Great British Energy Bill

Lord Mackinlay of Richborough Excerpts

2nd reading
Monday 18th November 2024 Lords Chamber

[Lord Mackinlay of Richborough (Con) (Maiden Speech)]

My Lords, I am particularly grateful to be in this place and very lucky because, just over a year ago, my luck had sincerely run out. I have to give thanks to my dear wife, now Lady Mackinlay, for her forthrightness and robustness—her insistence that a DNR notice and palliative care were not in order for me, and that they should fight for me until the end. But once we got over that small hiatus, I thank the NHS for keeping me alive, getting me on my feet and getting me into the state that I am in today.

I give particular thanks to the right honourable Rishi Sunak, the previous Prime Minister, for including me on the Dissolution Honours List. I hope it was a recognition that I had a little more to give to the political life of this country but which I could no longer do adequately as an MP at the other end—a job that I thoroughly enjoyed. I am sure that noble Lords who have taken that route into this place will know exactly what I am talking about.

I give my great thanks to the staff of this House—I am looking at some who I have had a relationship with for many years. My thanks go to Black Rod, the doorkeepers and the many other staff who have rallied round and offered me help and assistance. I might look like I need help but it is not quite as deep as you might think. Many noble Lords in this House, once they see my office on the first floor—right next to a lift and very close to here—will be green with envy; I have a rather nice room on my own, complete with fridge. They might get an invite and a welcome there in due course.

On 28 September last year, completely out of the blue, and within 12 hours of feeling perfectly well, I was given a 5% chance of living. The sepsis started from nowhere. They said that it was down to pneumonia, but I had had no symptoms and a clear chest. It was completely out of the blue, which highlights the danger of the disease. It is not a disease in itself; it is yourself trying to fight off a disease, and doing it particularly badly and going into overdrive.

There is a lot to be learned about sepsis. It is a killer of 48,000 people a year in the UK. Some will be, dare I say it, very end-of-life, and so little can be done, but there will be many tens of thousands of others whose lives could be saved—or bits and pieces that could be saved—and that is worth doing. I will be devoting a lot of my efforts and the voice that this place gives me to, among other things, highlighting sepsis, working with great charities such as the UK Sepsis Trust, which I have already done a lot of work with. This is not a condition or disease where we are looking for some magic bullet that has yet to be found, as might be true of some forms of cancer. This is easily solvable if you find it and recognise it early—if you can recognise that your loved one is feeling possibly the worst that they have ever felt in their whole life. Thankfully, my wife asked the question: could this be sepsis?

I got through it, after seven months under NHS care. I spent a lot of time just over the bridge in St Thomas’ Hospital. I am very grateful that so many colleagues from the other place, and some from this House, could come and visit me regularly. That is what kept me going. I did not feel that I was really out of the swing of politics for too long, despite laying in a bed for a very long time.

I was unlucky; many people go through sepsis and lose nothing. They might find themselves with brain fog or temporary conditions from which they will recover, but many people do lose bits and pieces. They might lose a few fingers or a bit of a foot. I was very unfortunate; because of the extent of the clotting, I lost all four limbs. They were all amputated on the same day, 1 December last year—a day that, for obvious reasons, I will not forget. After the NHS having spent probably many hundreds of thousands of pounds keeping me alive over a long period, you then come to the question of what we should do to get people like me on their feet.

Do we provide them with appropriate prosthetics? The prosthetics we see here are trial ones—I know we should not use props in this place, but I hope that noble Lords might forgive me today. They are provided by the private sector and on a trial. The NHS, obviously not wishing to spend too much money on items that perhaps will not get used, might give me these prosthetics in year 3. But I want to get on with life in year 1, and I am doing that with this type of prosthetics. To his great credit, the new Secretary of State had a meeting with me and many other multiple amputees last week to discuss this very point. Could the NHS please adjust its way of doing things, so that it is focused on the patient rather than on a menu of what is usually done—a page saying, “We do this in year 1, this in year 2 and this in year 3”?

What was I in my normal old life? I was—and still am—in practice as a chartered accountant and chartered tax adviser, as in my register of interests. There are not many across both Houses, so noble Lords will not be surprised to hear that finance Bills have always been of great interest to me. Sadly, in the last few years of being in the Government at the other end, I did not have too much good to think about many of the finance Bills, so I used my mother’s great saying, “If you have nothing good to say, best say nothing”.

However, that does not apply now, does it? I am over on this side and, if noble Lords want to hear my thoughts on various aspects of the Finance Bill that will be before us—I know we do not have too much influence at this end—I wrote about the IHT APR position on X, or Twitter, over the weekend, and much support that has had. That 20% rate of IHT is not really true if you have to extract money out of a cash-poor business, and then CGT, dividends or income tax has to be paid to get the wedge of cash required to pay the 20% IHT—but that is straying into another field.

Why did I choose “Mackinlay of Richborough”? Looking around, I have noted that many ex-MPs have taken the name of their dear constituencies that they represented for so long. I thought that was right for me, too. I had an unusual constituency: South Thanet. It went from Cliftonville in the north, right the way around through Broadstairs, Ramsgate and Sandwich Bay, into Sandwich and then the hinterlands of Kent, with some beautiful villages. But, right in the middle of the north and south bits, is a place called Richborough. Not many people know that—they do not know the significance of it. It is a hugely significant part of this country. It was where the Romans first came ashore, and there is a substantial Roman fort. I will not go into its history, which is easily available if noble Lords look up Richborough fort on English Heritage—they will find more about it than they probably ever wanted to know. Additionally, in the First World War, there was a major port at Richborough—a proper working port, long since not used because of silting up. It was the site through which much of the apparel for the First World War passed—it was hugely significant in its day.

Nobody lives in Richborough now, to my knowledge, although there might be the odd farm cottage. But one of the reasons why I thought Richborough was such a good name was that it used to have a major power station, fired by good old Kent coal from the Kent coalfields. It was significant in the provision of energy. That has long since been blown up—it went in around 2013. The cooling towers could be seen from north Kent. I was a keen sailor, and you could see it off Whitstable, miles and miles away across the flats of Thanet. But it is long gone and has been replaced with proposals for a huge battery farm, which will be part of the mix of renewables into the future. It is the site where interconnectors from Belgium, Germany and France come in to make up the difference when the renewables we are discussing today fail us—we will probably be using energy on the back of German coal, but never mind that. There is a massive solar panel field nearby and a bigger one has been proposed, and there is even a biogas facility.

So all around that area of Richborough is the past, the present and the potential future of energy provision. That is why I took the name, because this is will be the subject of the future. I fought, through all my years since 1991, to extricate Britain from the European Union. I know this is not a day for contentious speeches, so I will steer clear of contention—a little—but energy will be the discussion point for the next 10, 15 or 20 years. I founded the Net Zero Scrutiny Group of Peers and MPs because of its importance. I am minded of a phrase, although nobody can tell me who came up with it: it is either Benjamin Franklin, General Patton or John F Kennedy—take your pick. It is, “If everybody is thinking the same, nobody is thinking”. My worry is that, on this topic, nobody is really thinking because we have all been working to the same pattern and the same hymn sheet.

This is too expensive, complex and important, and it will change our lives too much—when, frankly, most of the rest of the world is giving up—for us just to let this go through on the nod. That is why I thought today’s debate on GB Energy was a good one to be making my maiden speech in—not least because I can have 15 minutes rather than about five. But this topic will run, and I will take a full part in it.

On that name Richborough, I sincerely thank the outgoing Prime Minister, who represents the seat of Richmond. The name is not only a nod to my former constituents, who were so bold and so brave—I am so thankful that they supported me for those nine and a bit years that I was an MP for them. It is also a little nod to the outgoing Prime Minister, who so graciously gave me this life peerage to continue my work. I thank noble Lords for listening. Today is a day of non-contentious speeches, including from me, but there will be a lot more around the corner.

Energy Bill [Lords]

Lord Mackinlay of Richborough Excerpts

Report stage
Tuesday 5th September 2023 Commons Chamber

[Andrew Bowie]

I was very pleased to take that intervention. I thank my right hon. Friend for it. If he is patient, I will explain to the rest of the House—I think Committee members are aware—what we seek to do with the hydrogen levy as it stands.

The Government’s amendments will remove provisions that enabled the levy to be imposed on energy suppliers in Great Britain, ensuring that within Great Britain the levy can be placed only on gas shippers. In the case of Northern Ireland, the amendments seek to ensure that only gas supply licence holders who engage with gas shipping can be subject to that levy. That reflects the different approach to the licensing of gas shipping across Great Britain and Northern Ireland.

The revised provisions will provide a fairer approach to funding hydrogen, placing the charge higher up the supply chain, with the potential for costs to be spread to the sectors expected to benefit most from early hydrogen development, not the wider British public. I remind the House that the Bill will also enable the option of funding hydrogen through the Exchequer. By providing two robust and reliable options for hydrogen funding, we will help bolster industry confidence in the viability of the UK hydrogen economy and boost private investment, with the potential to unlock significant energy security and economic benefits. The hydrogen sector could support over 12,000 jobs and generate up to £11 billion in private investment by 2030.

I must be clear, and the House should understand, that the Bill will not actually introduce a levy on gas shippers. Instead, it will enable the Government to introduce the levy through secondary legislation.

[Craig Mackinlay (South Thanet) (Con)]

It is very welcome that the levy will not be applied on households as a direct cost they will see in their bills, but it is something of a sleight of hand just to push it further up the supply chain, because it will be an energy-related cost somewhere in the supply chain that will feed down to every business and household in another way through an additional charge they will face, much like VAT. I welcome it as far as I can, but I would rather see it removed in its entirety.

[Andrew Bowie]

I thank my hon. Friend for his contribution. As we have spoken about before, I understand his position on the levy. It is our belief that in ensuring that the levy is placed higher up the chain, the sectors that will benefit most from the early development of hydrogen will bear the brunt of the cost, not the wider British public. That is the aim and intention of what we seek to achieve.

As I was saying, the Bill will not introduce the levy on to shippers; instead, it will enable the Government to introduce the levy through secondary legislation. I am sure we will continue to have this debate in the months and years ahead.

I turn to Government new clause 63, amendment 8 and new clauses 40 and 50 on renewable liquid heating fuel. I thank my right hon. Friend the Member for Camborne and Redruth (George Eustice) for his work and amendments relating to renewable liquid fuels for low-carbon heating. His constructive work with the Government has been incredibly helpful and positive. I also pay tribute to my hon. Friend the Member for Bury St Edmunds (Jo Churchill), who has been championing the use of renewable liquid fuels for low-carbon heating for many years.

As the recent biomass strategy made clear, such fuels will have a critical role to play in decarbonising our economy. We recognise that they have the potential to play an important role in decarbonising heat, especially as not all off-grid properties will be suitable for electrification. We will explore the potential of these fuels for heat by issuing a consultation within 12 months. We want to take the powers now to support the use of these fuels in heat in the future, should they be needed. That is why we tabled Government new clause 63, taking powers to impose obligations on heating fuel suppliers to increase the supply of renewable liquid heating fuels.

--- Later in debate ---

[Nadia Whittome (Nottingham East) (Lab)]

I rise to speak in support of new clause 35. My amendment is about funding for decarbonising homes and I hope Members across the House will agree that it is badly needed. Our homes are among the least energy-efficient in Europe and heating them accounts for 14% of all UK carbon emissions. If we do not retrofit around 29 million existing homes in the UK we will not be able to reach net zero by 2050. This is a mammoth task, so we must act now.

However, decarbonising housing is not just about tackling the climate crisis: millions of people are living in freezing homes that are expensive to heat, left at the mercy of the volatile gas market. Poor-quality housing is costing people their health and even their lives. Retrofitting homes would reduce bills, make homes safer and improve people’s quality of life. It would also create new jobs in every part of the country, helping build the green economy we so desperately need.

The Climate Change Committee has found that people accept the need to make changes to their homes, but they need well-designed policies to help them to act. The biggest barrier for many will be the up-front cost. The Government have funding to retrofit the homes of people on low incomes, and that is available through the social housing decarbonisation fund and the sustainable warmth fund, but the amount on offer just is not enough, particularly given the rising labour and material costs. In fact, last year, the number of Government-funded energy efficiency measures installed in UK homes dropped by half, year on year. It is now a shocking 97% below 2012 levels.

If the Government had not cut energy efficiency support in 2013, just imagine how many more people might have spent last winter in a comfortable home and how many fewer families would have had to choose between heating and eating. Short-sighted Tory cuts have cost us a decade in a fight we cannot afford to lose. We need long-term consistent funding and a clear road map of how the decarbonisation of housing will be achieved. Local authorities are uniquely placed to understand the needs of their area and to target schemes where they can provide the most benefits. In Nottingham, against the odds, more than 4,000 homes have been retrofitted by the city council in the past decade. Just imagine what more could be achieved by councils across the country with long-term predictable funding for decarbonising homes. The amendment is calling for the Government to undertake an assessment of the benefits of providing this funding to local authorities. I hope the House will invest in our future by supporting new clause 35.

[Craig Mackinlay]

I suppose that the volume of my amendments probably speaks for itself, but I have a great interest in this Bill. I am aware of the limitation of time this afternoon, so I will keep my observations to the two areas that I think are fundamentally important.

I absolutely despise this Bill. I have been in this House for eight years, and I have rarely seen a Bill of such nature. It is 426 pages, and it has attracted 146 pages of amendments. That means it has a lot of interest, but I want to discuss two of the amendments that I have tabled.

First, amendment 50 relates to clause 152(4) and the hydrogen grid conversion trials. The clause seeks to amend the Gas Act 1986, and I am particularly concerned by subsection (4), which increases the rights and powers available to unknown new inspectors. It includes the

“power to enter premises in the trial location for the purpose of inspecting anything on the premises, or carrying out any tests on the premises, in preparation for or otherwise in connection with the trial.”

My amendment, which I tabled with others, would interpose at least a magistrate—a justice of the peace—in that proposal before we start entering people’s premises. We accept that in other energy matters. For example, to have a meter changed, it has to go through a magistrates court. I know that well, as I used to sit as one.

Clause 248 causes me the most gross concern. It is the reason that I hope an amendment can be accepted, although I know it was not selected by Mr Speaker. The clause is titled “Sanctions”, and I suppose it does what it says on the tin. Subsection (4) states: “Energy performance regulations”—which are unknown and may be put into place in this House in the future by statutory instrument—

“may provide for the imposition of civil penalties by enforcement authorities”

for a penalty of up to £15,000 for not complying with those regulations. Were that not bad enough, all in this House should sit up and take notice of subsection (3) —I know it is a big Bill. It states that energy performance regulations, which are as yet unknown, but are available to be put on the statute book in the future by statutory instrument,

“may provide for the creation of criminal offences”

in relation to various cases, with imprisonment for a term of up to 12 months.

I do not know about other Members in the House, but I rather like “The Shawshank Redemption”. It is a great film. I can imagine the old lags in the future having a chat about why they are in prison. One might say, “I’ve done benefit fraud—£50,000-worth—and I got six months.” Another might say, “I had dangerous driving causing an injury—8 months.” The businessman talking to them will say, “I had a very good business with 20 people working for me in a factory. They have all been put out of work. My business has closed and my family are on the street.” The others will say, “What on earth did you do, sir?” and he will say, “I infringed an energy performance certificate, and I got 12 months.”

[Sammy Wilson]

Does the hon. Member agree that that could be for something as simple as renting out premises without having shown the EPC for them? It is a ridiculous situation.

[Craig Mackinlay]

My right hon. Friend has it exactly right. Hence I feel that when we in this place are creating criminal penalties that could put our fellow citizens in prison for 12 months for an unknown offence of the future relating to net zero, we have a duty to discuss them properly. This must be the first time we are potentially criminalising people in this country for not adhering to the new code of net zero. We should not be doing it lightly. We should be doing it carefully and with consideration. It should not be done by statutory instrument.

[John Redwood]

I thank my hon. Friend for highlighting this issue to all in the House. I hope that the Government will take urgent action to get rid of it, because it is completely unacceptable. It also shows how little time we have to discuss fundamental issues.

[Craig Mackinlay]

My right hon. Friend has put his finger exactly on the pulse. This is a substantial Bill. I say to the Minister that I hope the Government will strip out criminal penalties for not adhering to unknown net zero certification, EPCs and all the rest of it in the future for something as simple as not complying with some of these net zero regulations. This is really serious. I hope that when the Bill returns to the other end of the Palace, consideration can be given to strip out such proposals.

I could have gone on at huge length this afternoon. I tabled many amendments because these are overweening powers trying to push and nudge us and to ban things. All I can imagine is that the Chinese embassy will be looking at the Bill with great enthusiasm, as it will drive even more of our high-energy businesses offshore. China will be pleased that it will be able to sell us more solar panels and wind turbines based on its steel, produced on the back of very cheap coal power. That is what we are doing here: driving our high-energy businesses offshore. This is not a recipe for energy security; this is a recipe for energy disaster.

I could talk at length about what is wrong with the net zero proposals banning cars, banning oil boilers, banning this and banning that. That is not what we do as Conservatives. We actually allow freedoms. We allow the market to decide. The Bill goes in the wrong direction.

[Caroline Lucas]

There are some elements of the Bill to commend, not least the net zero duty on Ofgem, but overall it fails to deliver the scale of ambition we need or to set out a vision of an energy system free not just from Putin’s influence but from expensive and polluting oil and gas in their entirety. My amendments would address that failing.

New clause 29 would prohibit the approval of new oil and gas field developments and the issuing of new oil and gas exploration and production licences. I am sure that the Minister will seek to paint the new clause as somehow incredibly radical and the policy of Just Stop Oil, pretending that it would recklessly turn off the taps tomorrow. He will no doubt trot out the same tired lines about a quarter of the UK’s energy continuing to come from oil and gas in 2050. In reality, the new clause is far from radical. It would simply do what the science tells us is necessary if we are to secure a liveable future for ourselves and our children and rule out any new oil and gas licences. In doing so, it would follow the advice of experts including the Climate Change Committee, which in its latest report was clear:

“Expansion of fossil fuel production is not in line with Net Zero.”

It acknowledges that while the UK will continue to need some oil and gas until the target is met,

“this does not in itself justify the development of…North Sea fields.”

Yet rather than heeding that warning, just one month later we had the former Secretary of State vowing to max out the North sea’s remaining oil and gas reserves. The Government re-announced 100 new licences and it was not ruling out the prospect of Rosebank.

However hard they try to obfuscate and evade, Ministers cannot deny the fact that, without additional abatement, the projected CO₂ emissions from existing fossil fuel infrastructure would already exceed the remaining carbon budget for a safe climate. Any oil and gas extracted from the North sea belongs not to us but to multinational companies, which will sell it to the highest bidder on the global market. The majority of fossil fuel projects in the pipeline are for oil, not gas, and will do nothing to boost energy security, given we currently export 80% of the oil that we extract.

--- Later in debate ---

[John Redwood]

The wish to carry through a great electrical revolution will require a lot of good will from the British people. My worry about this legislation is that it may antagonise them by being unduly restrictive, particularly with the threat of civil and even criminal penalties on some of their conduct. We need to persuade people that the green products will be cheaper, better, more acceptable and make a more general contribution, and not try to bamboozle them. I hope that there will be an opportunity to vote on the amendments tabled by my hon. Friend the Member for South Thanet (Craig Mackinlay) to get rid of the threat of criminal and civil penalties over the issue of a proper transition.

For things to take off, the products—the heat pumps and the electric cars—will have to be much more popular. More people will have to believe in their specifications and adequacy, and they will have to be more affordable. I, for example, would be very happy to have a heat pump to heat my rather small London flat, but I am told that there is not one available because I am not allowed to adorn the outside of the block of flats with any of the things that a person would need to make a heat pump system work. There must be practical solutions to these problems. We cannot force the pace by legislation; the markets and the investment have to catch up.

My second worry about this legislation is that energy policy has to achieve three things at the same time. Yes, we have to take considerable environmental issues into account, but we also need affordable energy and we need available energy. In recent years, all main parties have put so much emphasis in their policy making on the environmental that we are missing the obvious, which is that we are no longer guaranteeing security of supply. We cannot guarantee security of supply if we are mainly relying on wind farms. We cannot rely on solar on a dark winter evening when people want to cook their meal and turn the heating up, because there is no solar. We have to look at the relative costs. The unit cost of energy generated by a wind farm that is already built is very cheap on one costing system, but if we have a gas turbine system that is non-operational for most of the time, only kicking in occasionally when the wind does not blow, that is part of the cost of the delivery of the wind power and it is a far more expensive way of running gas turbines than if we use them all the time.

[Craig Mackinlay]

My right hon. Friend is making an excellent point about the extra energy provision that we need to make renewables work. Has he considered the true environmental cost of the batteries, the digging up of cobalt by children in the Democratic Republic of Congo, the smelting and all the rest of it? That is the real cost of relying on renewables, and we hear very little about the real cost of the batteries.

[John Redwood]

I am greatly in favour of doing proper, whole-life carbon accounting, taking into account all the CO₂ generated by making the green product—its lifetime use, on which it may be better, and its disposal, on which it may be worse. It is certainly the case that if we acquire an electric vehicle that has generated a lot of CO₂ in its production and then we do not drive it very much, we will have not a CO₂ gain but a CO₂ loss, so there must be realistic carbon accounting. We also should not fall nationally for the fallacy that is built into the international system. For example, we could say that we have brought our CO₂ down because we are importing things, but that actually generates a lot more CO₂ than had we done it for ourselves.

This is the essence of the argument about our own gas. If we get more of our own gas down a pipe, it produces a fraction of the CO₂ for the total process than if we import liquefied natural gas having had to use a lot of energy compressing and liquefying the gas, a lot of energy switching it back, and a lot of energy on long-distance sea transport. Therefore, we must be realistic in the CO₂ accounting.

Finally, I do not think that the Bill is giving us much guidance. For example, if the electrical revolution does take off, because the really popular products arrive and people find them affordable, how will they get the power delivered to their homes? We are already told that many wind farms cannot be started or cannot be connected to the grid any time soon. There needs to be a massive expansion of green capacity and a big digging-up of roads and re-cabling of Britain. If my constituents are all to adopt an electric car and a heat pump, we need a massive expansion both of electricity generation and of grid capacity. I do not see that happening at the moment. There need to be market reactions and proper investment plans, and this legislation is not helping.

I fear that this Bill adds to the costs. It adds targets that could turn out to be unrealistic and that could be self-defeating, because quite often the actions taken to abate CO₂ end up generating more CO₂ at the world level and mean that we have exported an awful lot of crucial business that we would be better off doing here.