Energy: Hydrogen

Baroness Meacher Excerpts

Thursday 17th September 2020 Lords Chamber

[Lord Callanan (Con)]

The noble Lord is entirely correct that a number of other countries are developing hydrogen strategies. However, the Government believe that the UK is currently well placed and in the leading pack internationally. We are keeping pace with international developments and leading in a number of international fora on this subject.

[Baroness Meacher (CB) [V]]

My Lords, when around 80% of UK households have gas heating systems and these systems account for about 30% of the UK’s CO₂ emissions, will the Government’s hydrogen strategy include a commitment to introduce hydrogen-ready boilers for 2025? This would not only support our net-zero targets but sustain and create thousands of jobs, since we are of course home to companies such as Worcester Bosch and Baxi, which are making world-first hydrogen boilers.

[Lord Callanan (Con)]

The noble Baroness is entirely correct. We are planning to publish a heat and buildings strategy in due course, setting out the immediate actions we will take. We are already working with Baxi and Worcester Bosch, the companies she mentioned, on hydrogen-ready boilers. These have been developed under a £25 million pot of funding, which BEIS provided.

Emissions: Housing

Baroness Meacher Excerpts

Monday 22nd June 2020 Lords Chamber

[Lord Callanan [V]]

My noble friend is entirely right. As the holders of the incoming presidency of COP 26, the Government will continue to press for much greater ambition around the world to reduce emissions, build resilience, co-operate and support each and every country.

[Baroness Meacher (CB) [V]]

My Lords, in response to the Minister’s reply to the noble Lord, Lord Teverson, and his encouraging reference to hydrogen, does he agree that the UK Government urgently need a UK-wide hydrogen strategy which includes sustainable domestic heating, transport and energy-intensive industry? Germany is about to confirm such a strategy, and many other countries are doing the same. Will the Government respond positively to the hydrogen industry’s campaign to have this important strategy? Companies are willing to invest £1.5 billion in it if the Government are behind them. Will he talk to key people about their plans?

[Lord Callanan [V]]

Of course. I am always willing to have meetings with stakeholders and others about this important area. As I said in response to a previous question, we continue to investigate with other people—for instance, boiler manufacturers—how hydrogen can contribute to our climate goals in the future. It is an important point to make.

Corporate Insolvency and Governance Bill

Baroness Meacher Excerpts

Committee stage & Committee: 1st sitting (Hansard) & Committee: 1st sitting (Hansard): House of Lords
Tuesday 16th June 2020 Lords Chamber

[Lord Leigh of Hurley (Con) [V]]

I will speak to Amendments 12, 13, 17, 18, 30 and 31, all of which are mine. Essentially, they make the same point, but I had to table several amendments to the Bill to cover it. The point is to allow an extension of the moratorium where the rescue of the business, as opposed to the company, is likely. I draw the attention of your Lordship’s House to my register of interests, which includes being deputy chairman of finnCap, a stockbroker, and senior partner of Cavendish Corporate Finance, which specialises in selling businesses. Unusually, I am speaking to an area in which I have some limited expertise, particularly in selling businesses.

I add to the remarks of the noble Lord, Lord Hendy, that private equity firms, banks and others do spread their risk, and insolvency is a devastating experience for the owner of a business, who may have spent years building it up and invested all their family wealth into it. They too need as much protection as possible.

At the moment, there is constant reference throughout the Bill to “the company”, but frequently, if not in the vast majority of cases, the actual limited company, or plc company, will not survive—there is simply no possibility—and there will be no return to the shareholders or equity at all. However, the actual business itself might well survive. For example, in the retail sector, many businesses trade from shops. The companies that have the leases with the landlords will disappear, but the businesses trading in those shops will, hopefully, carry on. Typically, they may be sold to a third party but, to do that, the directors or monitor will need time to negotiate a transaction that preserves the business and the jobs. I thank the noble Lord, Lord Mendelsohn, for inviting me to amplify the amendments, but what they are saying is pretty simple. In many instances, the business that is owned by the company is viable and likely to carry on, but there is no chance of the company so doing. The amendments in my name seek to address this.

Amendments 12 and 13 refer to the situation where a director wants to extend the moratorium with creditor consent, and Amendments 17 and 18 to where the directors apply to the courts. I share the concern of other noble Lords that the courts are going to be very busy as a result of the Bill, and I hope that sufficient resources will be given to them. Again, where the directors apply to the courts, the courts will see that the business may well carry on, even if the company is not able so to do. This will then allow the courts to instruct the directors to carry on the moratorium.

Amendments 30 and 31 refer to the circumstances where the monitor is in charge. I will make a few comments about the monitor in a minute. The Bill states that

“the moratorium is no longer likely to result in the rescue of the company as a going concern”.

This ignores the possibility that the business might well be rescued as a going concern. It is particularly important that the monitor is a person who is able to see that viability and implement it. It would be tragic if the moratorium ends for all the wrong reasons.

I support the noble Lords, Lord Stevenson and Lord Hodgson of Astley Abbotts, in emphasising the importance of who the monitor is. The noble Lord, Lord Stevenson, quite rightly made the point that it need not necessarily be a chartered accountant or an insolvency practitioner. It would be great if the legislation allowed the flexibility for a turnaround professional to be appointed as a monitor, albeit with the appropriate protections, as they really do know what they are talking about in enabling a business to carry on afterwards. The story from the noble Lord, Lord Hodgson, about the investigating accountants telling the directors that they would be back on Monday to carry out receivership is chillingly true; I have seen it in practice. I have also seen much better examples, where the investigating accountants have been told by the bank that under no circumstances will they be appointed as the receiver, or in our case monitor. So they are truly independent and are working to try to ensure that the business carries on, as opposed investigative accountants being appointed, who know that they might be appointed as the receiver, with subsequent huge professional fees.

It is vital that we try to ensure that the monitor is independent not just at the time of appointment, as these amendments suggest, but subsequently, and is not appointed as a receiver without proper investigation that their actions have been in the interests of the business. I will not amplify this point any more but will simply quote from the Insolvency Practitioners Association, which has said:

“Expanding the definition”,


as I have suggested,

“will enable monitors to more broadly assist businesses, working with their owners, stakeholders and directors to give them a greater opportunity to survive the economic strictures of Covid-19 responses”—

which is the purpose of the Bill. Without the amendments I have tabled, the Bill will be heavily emasculated.

[Baroness Meacher (CB) [V]]

My Lords, I thank the noble Lord, Lord Vaux, for his detailed amendment to Clause 12, and support it most strongly. I apologise to the Committee; I must be responsible for the fact that I am listed ahead of the noble Lord, Lord Vaux, who will move his amendment, but I hope that my brief comments will nevertheless make sense. As it stands, Clause 12 interferes in an unacceptable way in the commercial activities between companies. By restricting the ability of suppliers of goods and services to terminate contracts with a company that has entered a relevant insolvency procedure, the clause puts the viability of supplier companies in jeopardy, particularly if they are small, as other noble Lords have mentioned, or if their client company represents a substantial percentage of their sales.

Along with the noble Lord, Lord Vaux, I am particularly concerned about the provision in Clause 12 to allow the Secretary of State to remove exclusions in Schedule 4ZZA using subordinate legislation. As the Bill stands, small companies are excluded from the restrictions on supplier companies, so they can, at the moment, terminate their contract to supply goods and services to a client company when it enters relevant insolvency procedures. This is surely absolutely essential if we are to encourage new entrants to the supply sector and if we are not to threaten the future of small companies. As I understand it, the amendment in the name of the noble Lord, Lord Vaux, would permanently protect small companies from the effects of Clause 12.

Another control over supplier companies is the restriction preventing them from requiring payment of outstanding charges as a condition of continued supply. Such a restriction surely also risks the financial viability of the supplier. I question the morality of a Government interfering in the marketplace to protect one company, apparently at the expense of others. Will the Minister explain how the Government justify the different treatment of companies involved in insolvency proceedings and their suppliers? Why do the Government appear unconcerned about the future of supplier companies? I agree with the noble Lord, Lord Hodgson, that a major problem with the Bill is that it combines understandable emergency measures to deal with the Covid crisis with permanent Henry VIII powers. This has been the matter of most concern to the Delegated Powers Committee, of which I am a member.

In conclusion, I hope that the Minister will accept the amendment in the name of the noble Lord, Lord Vaux. If not, I hope that the noble Lord will bring it back on Report.

[Baroness Bowles of Berkhamsted (LD) [V]]

My Lords, I declare my interests in the register as a company director. There are many good amendments in this group that I support, but I will limit my speech to the ones in my name, relating to creditor priorities and to review, and to a couple related to them. The background to Amendments 25 and 40 is the same as that already raised by the noble Lord, Lord Hodgson, and the noble Baroness, Lady Kramer. The position of financial institutions is uniquely privileged in that they will inevitably continue to be involved but they are not bound by the same conditions of moratorium as others who must continue to supply. They are not bound to normal supply terms or the ipso facto clause, and are free to accelerate and increase their demands, achieving elevation to both the amount and priority of their lending.

As well as the issue of priority, enhanced charges and advancement extract funds from the company, which is counterproductive to the very rescue that is the purpose of the moratorium. The effect of both those possibilities would be to leave unsecured creditors and, notably, pension deficits in a worse position in a subsequent insolvency. Put together, the two effects make the price of the moratorium too high, and the financial institution behaviour pattern is compelled to happen.

I do not need to remind the Committee that the operation of banks is not geared towards benevolence. I wish they had that in their articles but they do not; they are geared towards maintaining their own capital and their own profit, which is encouraged by bonuses and regulation. There have been some appalling examples of banks squeezing SMEs, for example as elaborated in the FCA’s report on RBS’s Global Restructuring Group, which this House debated last June. It is clear from that FCA report that there is no desire to interfere in contractual terms.

Oil: Changes in Global Markets

Baroness Meacher Excerpts

Thursday 21st May 2020 Lords Chamber

[Lord Callanan]

We understand that this is a troubling time for this vital sector for the economy. We are in regular contact with the industry. It is taking advantage of our unprecedented financial recovery packages and we will continue to monitor the situation.

[Baroness Meacher (CB)]

My Lords, as the economy picks up following the Covid-19 pandemic, the UK, with its considerable technical knowledge, has an opportunity to lead the world in producing sustainable energy. The Minister referred to contacts with other countries. Can he say a little more about those contacts, which will help to ensure that we benefit from this extraordinary situation?

[Lord Callanan]

As well as maintaining contacts with other countries, we invest considerable funds in helping countries in the transition and in promoting their domestic carbon reduction targets. The noble Baroness makes an important point and we will keep that in mind.

Fuel Poverty

Baroness Meacher Excerpts

Thursday 4th April 2019 Lords Chamber

[Lord Henley]

The noble Lord is right: it is for local authorities to do that, but he will also remember that we brought forward further regulations this year, which he and I debated in this House, whereby we increased the obligation on landlords in how much they should be expected to spend to raise houses in the private rented sector to, I think, at least band E. I forget the precise level that they have to be at.

[Baroness Meacher (CB)]

My Lords, how many households dependent on universal credit have to choose between sufficient food for their children and sufficient heating to keep the children warm during the winter months? If figures are not available, will he commit the Government to commissioning a study to find out that information?

[Lord Henley]

My Lords, I will see whether those figures are available and if they are, I will make them available to the noble Baroness. In my original Answer, I was trying to address the importance of the aggregate fuel poverty gap. We are seeing that come down over the years; the aggregate fuel poverty gap was of the order of £857 million in 2010 and it has now dropped by £25 million to £832 million.

Climate

Baroness Meacher Excerpts

Tuesday 2nd April 2019 Grand Committee

[Baroness Meacher (CB)]

My Lords, I too thank the noble Baroness, Lady Jones, for securing this incredibly important debate. Anyone looking at our newspapers might think that the single most important issue facing the whole world was Brexit, but of course, far more urgent, with far greater risks to humanity, most particularly to developing countries, is climate change. Measures to cut carbon emissions are growing but at nothing like the rate needed if we are to tackle the problem in due time.

I first mention solar energy, because the sun has almost infinite energy, if only we could trap it. Yes, solar panels are cropping up all over the place, but two major obstacles stand in the way of significant use of solar energy: the problems of storage and distribution, as I am sure most noble Lords know. Research programmes in a number of countries are working on those two problems, but they are too small and not co-ordinated to achieve the speed of progress so desperately needed. Can the Minister explain what the Government are doing to enhance research in this vital field? It is far too important to leave to the private sector, but too many Governments are just leaving it to private companies. It must be government-led and co-ordinated.

The second area of potential breakthrough after solar, which I see as the absolute number one, is the use of hydrogen. I have received a helpful note from the Hydrogen APPG and wanted to convey a few of its main points. More than 30% of all UK carbon emissions come from domestic heating and cooking. Can we get that down to zero? We really need to. The H21 North of England report 2018 examined the potential for a large-scale conversion of homes and businesses from natural gas to hydrogen and found that such a conversion could, by 2050, achieve 17% of the Government’s carbon reduction target, set in the Climate Change Act 2008. No doubt we need to go faster than that, but it would be one hell of a step.

There is growing support from the Government for a large-scale hydrogen conversion project. For example, the Chancellor’s Spring Statement announced that the Government would explore options for decarbonising the gas grid. Can the Minister explain to the Committee what options the Government plan to explore, and over what timeframe? That sentence from the Chancellor reads as though he may not be doing very much at all, but it would be very interesting to know precisely what he has mind and how fast he plans to do it.

There are also significant benefits to a large-scale hydrogen conversion for the transport industry. What steps have the Government taken to convert cars, buses, lorries, trains, ferries or even aeroplanes to hydrogen use, and do they have a planned timeframe for such reforms?

It is of interest that the trade unions are supportive of the potential of hydrogen to create highly skilled jobs, especially in the north of England. That would be pretty helpful in the years ahead. The UK could become a world leader in hydrogen technology and a leading exporter of skills and technology. We can achieve such heights only if we get on with the changes so urgently needed. I look forward to the Minister’s response to this important, if short, debate.