Great British Energy Bill

Earl of Effingham Excerpts

Committee stage
Monday 13th January 2025 Lords Chamber

[Lord Petitgas (Con)]

My Lords, I support the amendments in my name and those of my noble friends Lady Bloomfield, Lord Trenchard and Lord Effingham. They aim to ensure that the proposed entity, Great British Energy, operates in a manner that aligns with fiscal responsibility, transparency, accountability and the overarching national interest.

Amendment 78, tabled by my noble friend Lady Bloomfield, mandates the reinvestment of all profits back into the company. The reinvestment question is a good test of what GBE is about and its future performance. As I said, GBE is de facto a permanent capital investment vehicle that will be deploying capital in illiquid minority stakes. It is very unlikely that it will ever be able to dispose of those and realise a lot of liquidity, so at best it will deliver some dividends. If it did, it would be best for it to be reinvested, ensuring that the £8.3 billion is the maximum commitment for taxpayers.

My Amendment 79 in my name stipulates that Great British Energy must not invest in projects that are reliant on government subsidies. GBE is already structured as a crowding-in investment, which means that it is likely to take more risk and accept lower returns than the private sector. This is what the mandate of “facilitate, encourage and participate” means to me. There is nothing wrong with that, but the private sector and foreign funds should be attracted to the GB partnership for that reason. Therefore, I see no reason to pile in and give the private capital two bites of the cherry by allowing it to work with GBE with government subsidies.

I spoke enough about Amendment 80 earlier. Amendment 81 builds on it with a firm measure of accountability. By requiring independent third-party evaluations of GBE’s investments, we introduce an essential safeguard against conflict of interest and political interference. Transparency and objectivity in evaluating investments are paramount, especially when the risk of poor decision-making with public funds looms large. As your Lordships know, I am particularly concerned by the lack of detail and definition of investment process and framework within GBE, at least at this stage. I believe that the Minister has taken good note of my concern about the lack of precision on an investment committee.

Finally, Amendment 82 limits Great British Energy’s investment to UK-registered companies. The purpose of this entity, as set out by the Government, is to bolster Britain’s energy security and our national economy. Investing in foreign-registered companies undermines that goal. We must ensure that any investment of public money supports British jobs, British innovation and British interests. This amendment ensures that GBE prioritises domestic enterprises, strengthening the UK’s energy sector and reducing dependency on foreign entities.

I will remind the House of the holy grails that I think we want to achieve with GBE. Number one is energy security; number two is energy sovereignty; number three is economic growth; and number four is low costs for bills and more employment. Indeed, we do not want GBE to outsource, be it our energy security, sovereignty or supply chains. We know it is an incredibly difficult topic because, as a country, we are ahead on decarbonisation, but we are behind in terms of ownership of our own infrastructure. We are also behind in terms of supply chains and we are behind on production of cable, wind turbines and other technology. Therefore, we have a lot of work to do in this area and I think it will be an extremely difficult topic because of supply chains, China dominance and the fact that we are behind on infrastructure and technology.

All these amendments share a common theme: safeguarding taxpayer money, ensuring operational transparency and prioritising the interests of the British people. Conservatives believe in the power of the private sector and market-led solutions and, where state intervention occurs, as in this case, oversight is extremely important. We urge the Government to accept these amendments and commit to ensuring that GBE operates as a responsible, efficient and transparent entity.

[The Earl of Effingham (Con)]

My Lords, I rise to speak in support of the amendments I have tabled to Clause 6 of this Bill, along with the contributions from the noble Viscount, Lord Trenchard. These amendments reflect three core principles of fiscal restraint, operational transparency and the safeguarding of national interests.

Amendment 83 seeks to limit the number of Great British Energy representatives attending conferences of the parties to the United Nations Convention on Biological Diversity to no more than five. I greatly understand the importance of international collaboration on biodiversity, but we absolutely must be realistic about the need for cost control and proportional representation. These international summits are indeed vital, but we have to recognise also that very significant amounts of taxpayers’ money are spent on travel and accommodation. It is simply not appropriate for Great British Energy, funded by the public purse, to send unnecessarily large delegations. By limiting attendance, this amendment ensures that taxpayers’ money is spent wisely, without detracting from the company’s core mission, which can be accomplished with a lean and laser-focused task force.

Amendment 84 would require Great British Energy to publish its principles, policies and criteria for evaluating prospective investments. One of the most persistent criticisms of government-led initiatives is the opacity with which decisions are often made. Entrepreneurs, innovators, universities and companies across the country deserve clarity when applying for backing from Great British Energy. For example, what metrics will Great British Energy use and what constitutes a worthwhile investment? By requiring the publication of this information, we will not only promote transparency, which should be encouraged, but foster a more competitive and accessible process for any prospective partners. This is good governance in action.

Finally, Amendment 85, tabled jointly with the noble Viscount, Lord Trenchard, addresses the critical issue of national security and economic prudence. It would require that Great British Energy does not co-invest with Chinese state-owned companies without prior notice to the International Trade Committee of the other place. The risks associated with Chinese state-owned companies are well documented. Co-investment with such entities could compromise the integrity of Great British Energy and pose long-term risks to our national security. Furthermore, it would expose the UK to significant economic and political vulnerabilities. To be clear, this amendment does not propose an outright prohibition, but it does mandate a right and proper process of scrutiny. Requiring advanced notice to the International Trade Committee will introduce a layer of accountability which will ensure that such decisions are not made in haste or without proper oversight.

Together, these amendments reflect a responsible approach to managing Great British Energy. They ensure that the company operates in a manner that is transparent, cost-effective and aligned with the UK’s strategic interests. I urge all noble Lords to support these amendments and help guide Great British Energy to be an entity that truly serves the British people both efficiently and prudently.

[Viscount Trenchard (Con)]

My Lords, I rise to support my noble friend Lord Effingham in his Amendment 85, to which I have added my name. Certainly, there are good reasons to be very cautious in selecting international partners with whom we will co-invest in the energy sector. Chinese state-owned companies are managed under rather different governance systems from those which the London Stock Exchange would consider appropriate for its listed companies. I agree with my noble friend that the Secretary of State should consult the International Trade Committee of another place before considering such co-investment.

Among other amendments in this group, I also support my noble friend Lady Bloomfield of Hinton Waldrist in her Amendment 78, which would ensure that GBE will reinvest all profits into the company. I agree with what she said in her speech, especially as GBE, as a publicly owned company, will not be subject to the disciplines of the marketplace, and its shareholder will be more concerned with achieving policy objectives through GBE than with maximising its return on investments and contributing to long-term growth.

--- Later in debate ---

[The Earl of Effingham (Con)]

That is one example of where, to monitor the cost, we need to keep a tight grip on the number of people we send in delegations. It does not aim at that organisation specifically; it is that plus anything else to which GBE might wish to send delegates.

[Lord Teverson (LD)]

I understand the issue of public expenditure, travel and all that, but the noble Earl specifically names a culprit in his amendment. That is what the Committee looks at and what it tries to get into Bills, so the amendment specifically aims at that organisation rather than the broader canvas.