Great British Energy Bill

Earl Russell Excerpts

2nd reading
Monday 18th November 2024 Lords Chamber

[Earl Russell (LD)]

My Lords, it is a pleasure to wind up in this debate. I welcome to the House the noble Baroness, Lady Beckett, with her 45 years of experience and her wisdom. I know that she will make an important contribution here. I also welcome the noble Lord, Lord Mackinlay. Not only did he beat Al Murray and Nigel Farage on the same night but I am so delighted that he beat sepsis as well. I wish him well in his campaigning in this House—it was emotional for me when he entered, so I wish him well.

We on these Benches welcome this important and timely Bill. But, like many of your Lordships, we have concerns with it and how it is set out. These relate to the clarity of the strategic objectives, the purpose, the definition and the scope, as well as the lack of reporting, accountability and oversight within the Bill. The noble Baronesses, Lady Bloomfield, Lady Hayman and Lady McIntosh, and the noble Lord, Lord Ravensdale, all raised this.

Other areas of the Bill are not defined well enough, which leaves us in a difficult position as legislators. The noble Baroness, Lady Noakes, said that it is a “seriously flawed” Bill. I do not agree with that—it is an important Bill—but some points need clarification. I hope to work with Members across the House to help clarify some of these matters, because the Bill is important to our energy security and our future. I thank the Minister and his Bill team for meeting us all, cross-party, before the debate. This is important, and I welcome his commitment, his openness and his approach to the Bill.

The Bill is very short—in some respects, it is perhaps too short for its own good. It establishes Great British Energy, a publicly owned company owned solely by the Secretary of State. Some Members questioned whether other options might be appropriate, looking at whether that could be expanded slightly or changed. The Bill fulfils a Labour Party manifesto commitment to achieve net zero and to make energy generation clean from carbon by 2030.

Great British Energy’s founding statement says:

“Great British Energy stems from a simple idea: that the British people should have a right to own and benefit from our natural resources. That these resources belong to all of us and should be harnessed for the common good”.


What is not to agree with there? We definitely agree with that. Backed with an initial capitalisation of some £8.3 billion over this Parliament, the plan is that GB Energy will work closely with industry, local authorities, communities and other organisations to make progress on our energy independence. It should be noted that this funding does, however, drop to £125 million in 2025-26.

GB Energy will invest in and partly own new projects, crowding in and not crowding out private finance. This is key to the energy transition, but this will be a difficult tightrope for that organisation to walk—that is a very small space. It aims to take on elements of risk, invest in emerging technologies and lay the groundwork for investment, helping to build the UK supply chains and deliver much-needed jobs and growth.

We have the third-best wind resources in the world, and they are still largely underdeveloped. We also have some of the highest domestic energy bills in Europe. But our continued dependence on the importation of gas must end. If we continue to lack energy independence, we will continue to be vulnerable to the vast fluctuations in the international markets. It is always our domestic bill payers who suffer. Today, we are at the start of a cold spell in winter. Continued international tensions mean that the gas and energy markets are rising as we speak.

The energy transition will bring short-term costs, but it will bring long-term benefits and security, and it will reduce bills permanently. However, energy bill payers must be supported and must benefit from that transition process. Equally, huge costs come from simply doing nothing. It is estimated that, in 2022-23, the energy bill support scheme cost the Government £6 billion, with absolutely no long-term benefits. So when the Conservatives go on about costs, they should remember that the biggest cost of all is that of doing nothing. The promise is that GB Energy will save some £300 a year. I hope that it does and that that happens soon.

I turn to our areas of concern with the Bill. The first is the general lack of funding available. There is a big, long shopping list of stuff that needs to be done, and my concern is that, because Labour cut its green budget virtually in half before the general election, there is not enough money to do everything on that list. Therefore, priorities will have to be set, which means that the money needs to be spent very wisely.

Can I ask the Minister to provide the House with further clarity on what, if any, borrowing powers GB Energy will have and how they will be used and monitored? Further, will the national wealth fund be supporting GB Energy and, if so, how? Many Members have asked that. It is also unclear whether GB Energy will be able to use debt financing powers and how that would sit on Treasury balance sheets. When does he believe GB Energy will be able to make its own investments?

A great concern for us is the lack of any written strategic priorities for GB Energy. A plan needs to be made and there needs to be scope in the Bill for parliamentary oversight of it. I welcome the comment by the noble and learned Lord, Lord Falconer, that this needs to be in the Bill. It is clear from discussions with the Minister that the plan is not yet written and is unlikely to be ready before we finish scrutinising the Bill. That puts us, as a House, in a difficult position. The legislative cart has been put before the strategic priorities horse.

We need to find a way forward through that. The noble Baroness, Lady Hayman, said it was a skeleton without any flesh. There are ways in which we can find solutions—we could delay Report; we could ask for a draft publication to be made available; we could even ask for heads of terms to be agreed with the Minister, or verbal assurances to be given by the Minister from the Dispatch Box. We should have an opportunity for parliamentary oversight. That is really important. Moreover, there should be opportunities for a further strategic review of those priorities if they change.

There is no overall reporting or accountability for GB Energy in the Bill. Other than what it must provide—like every other UK company—to Companies House, there is literally no reporting. That is not good enough, and it needs to change. Many Members have raised that in the House. We added a reporting duty to the Crown Estate Bill. My suggestion is that a similar thing is done here for GB Energy—it could have agreed headings and things that need to be reported on. Reporting needs to happen, and there needs to be parliamentary scrutiny.

What is the area for GB Energy? The Bill has such an inclusive and broad range that it is impossible to know what is included and what is not. It could virtually spend 98% of its money on nuclear energy or it could spend 98% on carbon capture and storage, despite the fact that that has already been given £22 billion. There are no definitions at all and, looking around the House, I think that worries noble Lords considerably. They do not know where the money will be spent and what the priorities are. The House as a whole is asking for clarification on those issues.

We understand that the Government do not want to be restricted, that a lot of this money will be seed money and enabling money, and that the Government want freedom to do that work. However, that needs to be balanced against the need for some clarity of what we are signing up to and approving.

There is also a need for a general environmental duty. We put one in the Crown Estate Bill. That should be copied over. I welcome the support of the noble Baronesses, Lady Hayman and Lady Young, for a nature recovery duty as well. We will support that; it is an important duty. I ask the Minister to consider that.

Clause 6 was raised by the noble Lords, Lord Lilley and Lord Bourne. It gives the Secretary of State sleeping powers. I note that he has to consult with GB Energy beforehand and to report to the House afterwards. Are those powers really necessary? Are they appropriate? Should the Minister maybe come to the House before using those powers and seek some kind of approval? I do not know—they seem a little over the top for what is necessary. They are copied from the nuclear industry. We are talking about windmills and stuff here. Do we need that power?

Other elements are missing from the Bill altogether. Community energy is something that we on these Benches will be concentrating on a lot. Community energy must appear in the Bill and in the strategic objectives for GB Energy. I thank the noble Baronesses, Lady Hayman and Lady Young, for supporting this. The founding statement makes welcome claims, and the Minister gives his assurances. However, the reality is that there is nothing in the Bill or in the strategic priorities.

We all want community-led energy to succeed and to experience accelerated growth from its very small base of 0.5% of our energy, but this will happen only if those who invest to make that growth happen have the confidence that this Government truly support this as a way forward. Vague promises are not investment options. Real-worth investment in this sector requires firm commitments from the Government, so I will seek to work with the Minister to make sure that we write this into the Bill and the strategic objectives, because, without that, it will not happen. It is an important part of the energy transition, an important part of taking communities with us and an important part of strengthening and decentralising our grid. In fact, I would like to see a plug and play system designed for community energy, linking together planning, investment and everything else that needs to happen across the piece, so that this stuff can really get off the ground. When will this investment in community energy come?

There is no point in creating renewable energy if we cannot plug it in when it is finished. Similarly, there are real issues around grid capacity and grid connections—lots of noble Lords raised that. My understanding from the Minister is that the grid is not in or crucial to the Bill, so where will the funding for grid connections come from? How that will be done is really important. Similarly, home heating accounts for 18% of CO₂ emissions in this country. I call on the Minister to look at using GB Energy as a vehicle for helping to get heat pumps into homes. We need 600,000 heat pumps to be brought into our homes annually by 2028. There is no mechanism and no promise of doing that at the moment. The noble Lord, Lord Deben, suggested allowing people to borrow against their mortgages to pay for the cost of heat pumps. I suggest that GB Energy could be a vehicle to help make that happen, making it affordable to homeowners so we can get this stuff done.

In the transition, jobs and skills are really important as well. The noble Lord, Lord Ashcombe, and others mentioned this. There was not much in the Budget. The Budget itself, despite all the investments, is not creating real long-term growth, so I really encourage the Minister and the Government to invest more in jobs and skills so that the green transition benefits people and brings benefits to them.

Spatial planning has also been mentioned. A number of new organisations are being created here; the landscape is changing. We have NESO, Ofgem, the Crown Estate, GBN and GBE. How will they all work together? These are questions that people asked.

Finally, to wrap up, I encourage the Government to look at future-proofing GBE to make sure that it outlasts this Government and the next.

King’s Speech

Earl Russell Excerpts

Thursday 18th July 2024 Lords Chamber

[Earl Russell (LD)]

My Lords, I congratulate Labour on securing a historic win and the noble Lord, Lord Hunt of Kings Heath, on his appointment.

This Parliament has a powerful mandate for bold action to fight the climate emergency and ensure an unprecedented revolution in the deployment of renewable energy. We must ensure a return to the all-party consensus on climate change. This June marked the 12th consecutive month of global temperatures of 1.5 degrees above preindustrial levels. Global sea surface temperatures have also breached the 1.5-degree Celsius threshold for each of the last 15 months. We are running out of time. Our global climate goals are melting before we transition away from fossil fuels.

Although the Conservatives passed a ground-breaking Climate Change Act and cut our CO₂ emissions to their lowest levels since 1879, ultimately Sunak prioritised the perceived electoral benefits of climate polarisation over climate action. Dither and delay and climate culture wars have meant that UK energy bills were £22 billion higher over the past decade than they would have been had we taken action earlier to rid ourselves of our overdependence on fossil fuels. Precious time, inward investment and our international reputation were all sacrificed.

The Climate Change Committee is clear that we are off course to meet the fifth and sixth rounds of our carbon budgets, particularly for heating and transport. Were someone to ask, “How would you get to net zero by 2050?”, the answer would come back, “I would not start from here after nine years of Conservative government”. Labour have made their job more difficult as well by deciding to cut their own £28 billion annual budget for climate change. I call on Labour to revisit these budget decisions. We have a historic opportunity to turn to the next chapter in the fight against climate change and transform the United Kingdom into the world’s leading innovative and successful green economy.

The international frameworks, legislation and policy are all largely in place. The job of government is to implement change at an unprecedented pace and scale, and that means taking critical decisions and building lots of infrastructure. The initial signs are encouraging: in particular, the ending of the effective nine-year ban on new onshore wind farms, the launch of the National Wealth Fund, the approval of three big new solar farms and the masterful appointment of Chris Stark as the head of mission control. This is all good for our energy security, reducing energy bills and ensuring a future for humanity.

I am proud of my party’s manifesto, which was judged by Greenpeace and Friends of the Earth to be better than Labour’s for the environment and nature. We on these Benches are committed to achieving net zero by 2045. I encourage Labour to be bold. As Ed Davey said, please steal our ideas, especially on tackling the failing water companies and the sewage scandal. We welcome Labour’s plan to make the UK a clean energy superpower, doubling offshore wind, trebling solar and quadrupling offshore wind, along with the Government’s commitment to decarbonise our energy generation by 2030, including the creation of Great British Energy.

The Liberal Democrats have always been and will always be champions of renewable energy. The UK has the third-best wind resources in the world. Renewable energy is cheap and proven and has short delivery times. It provides energy security and lowers costs to consumers. It is entirely possible to decarbonise our power generation by 2030, but no nation has ever fully decarbonised their national power generation within such a short timeframe.

Success will require an intergovernmental approach across Whitehall, the devolved regions and local government. It will also involve rapid societal change not seen here since the dawn of the Industrial Revolution. It means building a massive amount of infrastructure, equivalent to some seven times more over the next 10 years than was built over the previous three. The “how, not if” reforms to planning will need to be carefully balanced and communicated to ensure that we do not get bogged down in nimby infrastructure wars. The Government need to balance building with spatial strategies that include brownfield first and enhanced, larger geographical areas of nature protection.

The Government must make a number of key policy decisions urgently and set out a comprehensive policy programme. The solutions are well known: onshore and offshore wind power; rooftop solar; a huge home insulation programme; the delivery of affordable home heat pumps, the take-up of electric vehicles; a massive update to the grid and interconnectors, generating more power in the south, where it is consumed; and decisions on carbon capture and storage, medium and long-term power storage and how we get cheap energy to heavy industry and nuclear power.

We await the Bills and will scrutinise them carefully when they arrive to ensure that they work. We will hold Labour to account and push them to be ambitious. Great British Energy is welcome, but I encourage Labour to invest in community energy schemes, and I caution against on an overreliance of nuclear projects that are often over budget and delivered late.

Adaptation and resilience is the bit that no one wants to talk about, but we can no longer afford to ignore it. From our health systems to urban planning, water infrastructure, transport, flood defences, the resilience of critical infrastructure, food security and the control of wildfires, there is little joined-up comprehensive thinking going on across government. The recommendations of the Adaptation Committee of the Climate Change Committee need to be fed into Whitehall and delivered across government.

The key to success in all these projects lies in the Government’s ability to bring the public along for the transition. That requires providing real cost of living benefits to people early on. To make the green revolution work, it must provide jobs, wages and economic growth. The Government must work to provide the educated skills workforce required.

I believe passionately in the need for a just climate transition. It is essential that our citizens see tangible benefits. Another spike in the international energy markets could cost the UK an extra £50 billion. We welcome Labour’s foreign policy plans to establish co-ordinated global action on climate change. I want Labour to form ever-closer relations with Europe, and to see a return to having shared environmental standards with the EU. Global finance mitigation and adaption will be key issues at COP 29. This is an ideal opportunity for the Labour Government to show leadership. We encourage His Majesty’s Government to act with speed, but to bring society with them.

Electricity: Cost-competitiveness

Earl Russell Excerpts

Thursday 16th May 2024 Lords Chamber

[Lord Callanan (Con)]

The noble Lord is right and wrong at the same time. Of course, it makes absolute sense to build more nuclear power, and we are doing that. However, his reference to the last Labour Government gives me the opportunity to state that, when they came to power in 1997, they cancelled all our new nuclear generation.

[Earl Russell (LD)]

My Lords, the UK green economy grew by 9% last year, delivering much needed green growth and green jobs for UK workers. Does the Minister agree that investment in our world-leading offshore wind capacity not only provides the UK with the long-term energy security we require but is also good for UK energy bill payers and our environmental futures? Will the Government consider increasing the funding for AR6 to secure the future energy capacity and security we require?

[Lord Callanan (Con)]

We have allocated over £1 billion for AR6, and it is important to procure newer capacity. It is also worth saying that we cannot rely on offshore wind alone: we need to consider the whole system. That is why we need nuclear, storage and technologies such as tidal, which my noble friend is always asking me about. We need a range of technologies, including interconnectors with other parts of the world, because that is the best way to secure a levelised grid that is secure and provides our energy independence in the future.

Home Insulation

Earl Russell Excerpts

Tuesday 14th May 2024 Lords Chamber

[Lord Callanan (Con)]

There were a number of questions there. In response to the noble Baroness’s last question, the majority of the schemes are currently delivered through local authorities. I absolutely concede that delivery through GBIS has been disappointing. I held a round table with the obligated energy suppliers in March to discuss possible changes and improvements to the system. We will have more to say on that shortly. But this is only one of a number of different energy-efficiency schemes. In the last year alone, we spent about £2.5 billion on improving insulation and upgrading the homes of the poorest members of society.

[Earl Russell (LD)]

What actions have the Government taken to improve the energy efficiency of homes in the private rented sector to date, and what outcomes have been achieved? Does the Minister agree that it is imperative that we improve the take-up of home insulation schemes among the poorest households, which are often the hardest to reach?

[Lord Callanan (Con)]

I certainly do agree that we need to target the poorest households, which is precisely what we do under schemes such as the social housing decarbonisation fund and the energy company obligation. The noble Lord is also right to point out that the private rented sector is one of the most difficult sectors. But home insulation grants, ECO, et cetera, are often rolled out in PRS homes.

Contracts for Difference (Sustainable Industry Rewards) Regulations 2024

Earl Russell Excerpts

Monday 13th May 2024 Grand Committee

[Baroness Bennett of Manor Castle (GP)]

My Lords, I have some technical questions, although I begin by broadly welcoming the Government’s direction of travel on this. It really is urgent that we proceed with offshore and floating offshore wind schemes.

I have two questions, one of which refers to the Procurement Act, which I spent more hours than I care to remember debating in this very Chamber when it was a Bill. How does this provision fit with the social value provisions in the Procurement Act? These measures would seem to be carved-out and very narrow provisions within that, so I am wondering how those two legal elements interact. My other question is, this provision provides a mechanism for offshore and floating offshore wind; how will this impact potentially on bids for solar, hydro and other schemes? Will it create a disadvantage for smaller-scale schemes, particularly community schemes?

[Earl Russell (LD)]

My Lords, I note that this SI has not been the subject of any report by the Secondary Legislation Scrutiny Committee. On these Benches, we broadly welcome the SI and its intention to grow the green economy. The UK is one of the best-placed countries in the world for developing and deploying offshore wind to help to provide energy security and meet our net-zero commitments. In 2023, a record 49 terawatt hours, 17% of the UK’s total electricity generation, was produced by offshore wind energy. The UK is aiming to triple its offshore wind capacity in the next six years and desperately needs a successful wind auction this year after the failure to attract any bids from offshore wind developers for the last round of contractual auctions.

The green economy in the UK grew by 6% last year and is crucial to delivering economic growth, the just transition and our climate goals. There are worries about the level of support for future investment in the UK offshore wind sector, and this SI is broadly welcomed on these Benches for recognising this and aiming to improve the situation.

This SI applies contracts for difference sustainable industry rewards—SIRs—which, it is said

“will help to address recent supply chain challenges that could otherwise hinder the deployment of offshore wind (OFW) and floating offshore wind (FOW). They will do so by providing additional revenue support to OFW and FOW developers, through a series of lump-sum payments in addition to their regular CfD payments, should they invest in the economic, social, and environmental sustainability of their supply chains”.

Carbon Dioxide Transport and Storage Revenue Support (Directions and Counterparty) Regulations 2024

Earl Russell Excerpts

Monday 13th May 2024 Grand Committee

[Baroness Bennett of Manor Castle (GP)]

My Lords, the noble Lord, Lord Jones, spoke about a war on carbon. Of course, that is a war we should not be having to fight. The arrival of these regulations is an expression of failure over decades. We have continued to dig up and burn coal, oil and gas, and now, having done all that damage to the natural carbon capture and storage—the best possible form of it, which nature has done for us over hundreds of millions of years—we are trying to find a mechanism to undo some of that damage. Yet what we are doing here is establishing an expensive, top-down framework for a technology that does not yet exist at any scale and which, if successful, will create natural monopolies.

This novel industry has zero customers and no guarantee that there will be any in the future. It will be heavily dependent on the Government to adopt an energy and industrial strategy down a route that makes the carbon capture and storage industry possible. It is heavily centralised, risky and expensive, which must be contrasted with the decentralised, readily available and readily deployable technologies that exist as an alternative to CCS. What the Government are proposing with these regulations are huge subsidies for decades, in the hope that at some point there will be economic developments that will start to reduce the cost to the taxpayer. This means that our situation is a bit like the problem we have with incinerators, whereby we build incinerators with contracts to supply them with waste for decades and then have to generate the waste. The Government are really combining science fiction with dinosaur thinking here.

I feel some sympathy for the Minister, because these regulations have landed in your Lordships’ Committee in a rather unfortunate week. To quote the Energy Mix website, referring to the carbon capture and storage industry,

“Industry Navigates Very Bad Week”.

This article reflects two developments in Canada, where Capital Power has cancelled a 2.4 billion Canadian dollar carbon capture and storage project at its Genesee generating station, saying that it is “technically viable” but “not economically feasible”. It also reflects, as the Canadian national organisation Environmental Defence said,

“the latest failure in carbon capture’s terrible track record”.

This project had already received 5 million Canadian dollars from the Government of Alberta and was being set up for further tax breaks and support from both the federal and provincial Governments. It is just not working.

The other bad week to which the website referred concerned figures that have come out of Boundary Dam Unit 3, a project worth 1 billion Canadian dollars. It promised to capture 90% of the CO₂ that was being generated but, in fact, its capture rate has been only 57%. This gives me a question to ask of the Minister—and perhaps of the Labour Front Bench—about the regulations before us and the Government’s plans: if there are contracts promising a certain rate of capture but that rate of capture is not met and they fail to deliver what is promised, with the potential to cause considerable damage in this new industry, what will be done? I note that the Toronto Globe and Mail is saying that there are

“continuing tensions between industry and the federal government about the extent to which public dollars will be used to provide”

for this industry.

With that in mind, I note the Minister’s comments in his introduction. I also note paragraph 5.10 of the Explanatory Memorandum to the directions, eligibility and counterparty regulations and paragraph 5.9 of the Explanatory Memorandum to the directions and counterparty regulations, both of which refer to the importance of information being deployed publicly, as well as the Minister’s comments about commercial confidentiality. In so many areas of public provision, we have seen real problems with people hiding behind a total lack of transparency arising from that coverall of commercial confidentiality. Can the Minister assure me that that will not happen in this case?

[Earl Russell (LD)]

My Lords, I rise to speak to both of these SIs. I note that neither of them has been subject to any report by the Secondary Legislation Scrutiny Committee.

Both SIs relate to carbon capture, usage and storage—CCUS—and are broadly welcomed on these Benches. I will not partake in any debate on CCUS today. It is a suite of technologies that enable the mitigation of carbon dioxide emissions from large point sources, such as power plants and refineries, and the removal of existing CO₂ from the atmosphere. In short, CCUS is one vital tool in the toolbox to help us reach net zero.

The Government envisaged building a competitive, self-sustained CCUS market in the UK. I note that, as of today, no commercial-scale CCUS projects are up and running. CCUS could provide economic growth potential as part of the transition to net zero—£1 billion of government money has already been made available for investment in four potential clusters, which aim to be capable of storing 20 to 30 megatonnes of carbon dioxide by 2030—but CCUS has had a slow and slightly rough start in the UK.

The revenue, directions, eligibility and counterparty SI establishes the process by which the Secretary of State can direct a carbon capture counterparty to offer to contract with an eligible carbon capture entity. It also sets out the requirement that certain information must be published by the counterparty in respect of contracts entered into, as well as the requirement on the counterparty to notify the Secretary of State promptly if it is likely to be unable to perform its functions. This instrument concerns the implementation of industrial carbon capture business models, or ICCBMs—there must be a better acronym—which are intended to support the ambition set out in the net-zero strategy to deliver carbon capture, usage and storage, or CCUS, in four industrial clusters. The ICCBMs have been designed to incentivise the deployment of carbon capture technology by industrial and waste users who often have no viable alternative, as the Minister set out, and are similar to contract for difference schemes.

My questions on this SI relate to the future review and scrutiny of those contracts. As they are commercial contracts—I note that they are in the public domain, but some of this may not be made public—and are signed off by the Secretary of State, can the Minister explain what, if any, further parliamentary scrutiny there will be of these processes? These contracts are for new and in some cases yet unproven technologies, so how will value for money be ascertained and reported back to Parliament in future, especially given that the SI allows for the amendment of those contracts in future and no statutory review is envisaged? I welcome the response to the consultation and the changes, including the use of the term “energy recovery generating station” and around the exclusions and support.

Because of time, I will not go through all that the SI on carbon dioxide transport and storage does. It seeks to help establish first-of-the-kind infrastructure in the UK to transport and permanently store the carbon dioxide that has been captured. It provides Exchequer-funded revenue support to mitigate the financial risks of the initial investors. The investment in this infrastructure is welcome, and I recognise the need for it, but what level of financial support is envisaged at this stage? If none is required now but money is perhaps required at some later point, can I ask if and how Parliament might be consulted on that and what limits are in place on those future financial investments in this scheme? If more money goes in, how will that be reported and noted by Parliament?

My other questions relate to parliamentary oversight and scrutiny of the new types of technology and new contracts—what they are delivering and whether they are delivering value for money, how they are monitored and how Parliament gets future say in scrutiny of them.

Finally, in relation to both SIs, the process is delivered via commercial contracts, and both SIs allow for alterations and a requirement on the parties to inform the Secretary of State if the counterparty is unable, or likely to be unable, to fulfil its role as entered into. What, if any, dispute resolution mechanisms exist here between the department and the contractors? I am particularly interested in what legal dispute resolution mechanisms exist to give adequate oversight of this process to Parliament before any potential legal disputes end up in court.

[Baroness Blake of Leeds (Lab)]

I thank the Minister for his in-depth introduction to the two SIs that are before us today and for the comments we have heard so far. There will be some repetition in some of our concerns and questions.

I start by setting a bit of the context. I admire the ambition that is expressed, as we discussed during the passage of the Energy Act, recognising that this whole area is just one part of the toolkit in addressing the need to remove carbon from our industry. The Minister outlined the sheer scale of the proposals here, which involves going from 6 megatonnes in 2030 to 9 megatonnes in 2035, but I do not think he expressed what that will mean in terms of the infrastructure required to support the operations. I have to be honest that this Government have so far not had a great track record in delivering infrastructure across the piece, particularly transport infrastructure.

I would like to have a bit more sense, given the backlog in transport investment, of whether investment in this area will jump the queue, if you like, in the planned progress. Is there a plan? That is a question we come back to again and again in terms of delivering on this agenda. Of course, the other major issue around all this is the way the planning system works, or does not work. Can the Minister assure us that we can move forward with confidence in delivering a fairly steep timetable approaching 2025—next year? The clock is well and truly ticking.

Energy: Welsh Government

Earl Russell Excerpts

Wednesday 24th April 2024 Lords Chamber

[Lord Callanan (Con)]

I am sorry that the noble Lord takes that attitude, because all projects across the UK are evaluated on the same basis. Of course, it is not possible to take forward every project, but the assertion that projects in Wales are somehow discriminated against is just not true. I could give him many alternative examples of projects in Wales—from nuclear, to hydrogen storage, to hydrogen allocation rounds, and CCUS projects—that are going forward.

[Earl Russell (LD)]

My Lords, does the Minister agree with the Institute of Welsh Affairs that Wales should retain, and local communities gain, greater income from the renewable energy developments that they host?

[Lord Callanan (Con)]

I am not familiar with those particular circumstances; I would be happy to chat to the noble Earl about it.

Offshore Petroleum Licensing Bill

Earl Russell Excerpts

Committee stage
Tuesday 23rd April 2024 Grand Committee

[Lord Lilley (Con)]

May I just add a few brief comments? I endorse what my noble friend Lord Moynihan and the noble Lord, Lord Bruce, have said.

I speak from a position of considerable ignorance. I used to know quite a lot about this but I know much less now. However, it seems that everyone is agreed that future fields will not be allowed to flare and vent and are not planning to flare and vent. So the first subsection of the proposed new clause to be inserted by Amendment 1 would legislate for something that is going to happen anyway.

However, the second proposed new subsection says that we should not allow any new fields until old fields have been prevented flaring. I do not see the relevance of the connection between the two. If we can stop old fields flaring and venting, we ought to. If we cannot, that is a problem, but what has it got to do with new fields, which will not flare and vent? Unless we have some explanation from the backers of this amendment of why they are linking the two, I cannot see why we should support it.

[Earl Russell (LD)]

My Lords, I rise to speak in favour of all the amendments in this group.

I start with the first amendment, which is in the names of the noble Baronesses, Lady Hayman and Lady Blake of Leeds, and the noble Lord, Lord Randall of Uxbridge; I have also put my name to it and support it. The amendment comes out of Alok Sharma’s amendment in the Commons; it was the one amendment that the Minister in the other place said the Government were prepared to go away and look at.

I take the points that have been made about what has been achieved under a voluntary mechanism. I also recognise that the new oil fields do not have this, but I would like to hear from the Minister and get a response from the Government as a productive one was not really given in the Commons. This is a real issue that needs looking at, and the Government may have real concerns about bringing this measure in for old fields.

My understanding is that some of this can be done by replacing methane with compressed air, et cetera. If there are concerns, I would like to hear them because, as we have heard, methane is 80 times more potent over 20 years than carbon dioxide. It is a huge greenhouse gas and the Government have signed up to the 2030 commitment to reduce it; indeed, the UK leads the world in some of these respects. So it would be good to see stricter regulations written in.

Progress has been made. The Government have committed to zero venting and flaring by 2030. Already, a near 50% reduction in flaring since 2018 has been achieved, but to put that in perspective, Norway banned venting and flaring in 1971, which is the year I was born. This is not rocket science; it is not difficult to achieve. While I recognise that progress has been made, I am 52 now, so we are 52 years behind Norway. These are powerful greenhouse gases, so we are waiting for this voluntary system to come in, but we need to take action: we need action at speed, at pace, to make sure that these things happen. I want to hear from the Minister whether he has ideas about how that can be done.

I recognise as well that the NSTA guidance currently states that there should be none for new developments and it should be phased out by 2030. However, the problem with this is that the enforcement is patchy and 2030 is still a long way off. It is a long time for us to be letting out these extremely powerful greenhouse gases, so I think something should be done at scale and speed to make that happen.

The Government argued throughout this Bill that they want to give the industry certainty, and that is one of the underlying themes behind the need to put forward these measures. My question to the Minister is why we are not doing that on venting and flaring. If this is about certainty for industry, and this involves industry having to invest to change and adapt, why are we not giving a clear steer—clear guidance, clear timetables—on the intention to do this? That would seem to be the sensible thing to do and the thing that industry would welcome the Government doing, so I call on the Government to do that and I support the amendment. I thank everybody who has spoken to it.

My Amendment 6 is a simple amendment replacing one word with another. It replaces “must” with “may”, but it goes to the very heart of the Bill. The story is that the Bill was cooked up over a boozy lunch as a way of dividing the Opposition. Who knows whether that is true or not but, if our energy crisis and energy security could be resolved by a two-clause Bill, I suspect that somebody might have done it before and that it would not have magically appeared when nobody else had managed to do it.

The Bill actually says that there is a duty to invite applications. I listened to all the debate in the Commons as part of my preparation for the Bill, partly because I am new to this place and am a bit sad, sitting there on the weekends, but I felt that this point was missed in the Commons, which is why I tabled this amendment. Having spoken to colleagues on the Opposition Benches, I kindly ask the Government to look at this probing amendment, because it is important to understand their motivations. They are putting this legislation forward, taking parliamentary time, telling us that it does things that are needed and are important, and I had to ask the House of Lords Library for a special briefing on the Bill because I was frankly astounded that it could be passed and never again would another North Sea oil or gas licence be agreed. How do these two things happen?

The Government are telling me that this is resolving our energy security and providing certainty, yet the Bill can pass and another licence can never be granted. I am confused about what the Bill actually does and have put forward this amendment in the hope that there is substance in the Bill and it is not just an attempt to divide the Opposition and destroy the consensus that existed on climate change. This is so important not just to the way we work here or in the other place but to the message that we send to the people of this country as we transition. We had the chief executive of the CCC on Laura Kuenssberg this weekend and have heard Alok Sharma; the Government have had resignations and this Bill has damaged our international reputation.

It is important that we understand what the Bill does if we are selling our international reputation for it. What does it do? What is the point of it and what does it achieve? My amendment is really an attempt to figure that out. That is why I have included it and I will question the Minister on that.

My Amendment 7 would mean that only companies that have publicly stated that they will invest in the green economy half the profits derived from winning an application can be invited to apply. I point out that 50% is a random figure—we can amend and debate that—but I believe in the green transition and in the need to protect these jobs. I believe in a just transition and that these things are extremely complicated. I also recognise that we will continue to have some dependence on oil and gas as we transition to net zero, not just for our energy needs but for lubrication and other industrial purposes.

I recognise that we will have oil and gas licences, but we must act at scale and speed to disinvest from oil and gas. We must leave as much of this stuff in the ground as we can. Once it is extracted, it may not count towards our net-zero targets, but it will for some other country after it has been sold on the international market, as 80% of it will be. It will be burned. We live on one planet and have one atmosphere. Emissions go somewhere and they will affect us. The idea that the Bill does no harm is not correct; it has consequences. A lot of oil and gas companies do not invest in the green economy in the North Sea, and they should. This amendment is simply an attempt to lay down a marker.

My Amendment 8 would mean that

“the OGA cannot invite nor accept an application for a seaward area production licence from a Russian oil and gas company”.

This point was raised by Richard Foord in the other place. It is my understanding that one Russian oil or gas company has a licence in the North Sea, when we have a war in Ukraine and continued threats to our European security. The Minister spoke quite clearly at Second Reading about the Bill providing for our energy security, but these Benches have questioned that because 80% of our oil goes into the international market.

This is a simple, clear, straightforward amendment that does what it says on the tin. If we are concerned about energy security, why are we allowing Russian oil and gas companies to bid for, win and run licences to extract our oil and gas, put it on the international market and perhaps even sell it back to us? The Government would then have to subsidise bill payers with billions of pounds to pay for it, in a vicious circle that helps no one. This amendment is clear, and I would like it to be agreed to.

Of the other amendments, I strongly support Amendment 9 on a marine spatial strategy. It is extremely important, and it is important that we plan for the future. If we are to have new oil and gas licences, it is important that we do not rule out the ability to have other green energy. I also support Amendment 10 in this group, but I apologise for getting a bit carried away and going over my time.

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[Baroness Jones of Moulsecoomb (GP)]

My Lords, I shall speak to the two amendments in my name, Amendments 4 and 19, but I also want to say that I very much enjoyed the introduction to the amendments from the noble Lord, Lord Lennie. He said that this is a very damaging Bill, and that is absolutely true—but what offends me so deeply is that it is so old fashioned and out of date. It does not take into account any of the science that has happened over the past 10 years. But luckily, these amendments expose the falsehoods that have been told by the Government in attempting to justify new fossil fuel extraction in the midst of a climate crisis.

First, the Government are deluded in saying that new oil and gas licences can in any way be compatible with delivering our climate targets. That is impossible. Secondly, they are deluded in thinking that propping up the oil and gas industry can possibly be in the interests of workers—and doing that rather than genuinely engaging with the need for a just transition and the practicalities of how that can be delivered. Thirdly, they are deluded in thinking that new oil and gas extraction will do anything to reduce domestic energy costs rather than be exported on the world market to the highest bidder.

Amendments 3 and 8 would establish a climate test, which is very necessary. The UN Production Gap Report has warned that the worlds’ Governments already plan to produce more than double the amount of fossil fuels in 2030 than would be consistent with limiting heating to 1.5 degrees centigrade. The IPC’s sixth assessment report was clear that

“projected CO₂ emissions from existing fossil fuel infrastructure without additional abatement would exceed the remaining carbon budget for 1.5 degrees centigrade”.

Closer to home, the Climate Change Committee observed in its latest progress report that

“expansion of fossil fuel production is not in line with net zero”.

Regardless of the claims from some people, possibly on the opposite Benches, that the UK will continue to need some oil and gas up to 2050, again to use the words of the Climate Change Committee,

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

The issuance of new fossil fuel extraction licences will directly contribute towards global heating. The Government will not accept a climate test in this Bill, because they know that new oil and gas is incompatible with a safe climate. If the Minister would like to hear more about this, I would be very happy to meet him and explain it as simply as I possibly can.

My Amendments 4 and 19 set out the just transition test. It is ironic that this Government try so hard to invoke the destruction of working-class communities by the Thatcher Government when they attempt to use oil and gas workers as an excuse to continue pumping new oil and gas, which will further inflame the climate emergency and actually make life harder and harder for people. The choice that we are facing is between a managed and fair worker-led transition now, or chaos later, when the reality of the planet crisis bites even more fiercely. Without serious plans for a just transition, communities will once again be left behind and hollowed out as a result of Conservative policy.

This proposal would require just transition plans for the North Sea workforce that are compatible with limiting global heating to 1.5 degrees centigrade. It specifies that these plans must be agreed through formalised collective agreements with unions and that they apply to all workers, whether they are directly or indirectly employed, or even self-employed—which is vital, given the heavy casualisation in the oil and gas workforce. This amendment will be a step towards delivering a just transition that would see workers at the centre of transition planning, with a clear and accessible pathway out of high-carbon jobs. We have to do this—we absolutely must, if we care about people and their work.

So, rather than propping up jobs that we know will not exist in the future, the Government should be actively supporting workers to transition out of the oil and gas sectors while also addressing their very real concerns—such as around the cost of retraining, which is often borne by workers themselves. The failure to deliver a just transition is not inevitable; it is a political choice. If the Government were serious about listening to workers and protecting jobs, they should have no problem supporting this amendment, which puts job security at the heart of the transition to a green future.

[Earl Russell (LD)]

My Lords, I will speak to my Amendments 5 and 17, which would introduce a cost of living and consumer energy price test that the OGA must conduct before inviting applications for seaward area production licences. The cost of living and consumer energy price test is met in relation to a relevant year if the production of domestic natural gas will clearly, first, lower energy prices and, secondly, reduce the cost of living.

Originally, as was alluded to, the Minister in the other place claimed that this Bill would reduce energy prices but very quickly had to retract that statement from the public domain. My question is: why are we passing this Bill if it will not have any impact at all on reducing the cost of energy bills for consumers? Some 80% of all the natural oil and gas here will be exported. As we have heard, the Bill will do little, if anything, to help our energy security, protect jobs, transition and help the green economy, which is the energy of the future. Instead, we are investing in the energies of the past, and that investment seems to bear few benefits for people or the planet.

We are already seeing individuals with record debt for their energy prices. We have seen the war in Ukraine and the spike in energy prices. As long as we as a country continue not to invest in energy efficiency or renewables and continue to be dependent on the international energy markets, we will continue to suffer as those markets fluctuate. The Government themselves have had to invest £7 billion in subsidising energy bills—in effect, a continued and added subsidy to the oil and gas companies on top of the tax breaks that they already have. We have the most expensive energy prices in Europe so this amendment simply seeks to put in a test where the cost of energy to consumers should be considered.

On the other amendments in this group, Amendments 3 and 18 in the name of the noble Lord, Lord Lennie, would apply a climate change test. I fully support applying a climate change test. The question I would put to the noble Lord, in relation to these specific amendments, concerns asking the Intergovernmental Panel on Climate Change whether it is set up and in the best position to conduct that particular test for us as an individual country. I suggest that, if we want a climate change test, it might be better for the UK’s own Climate Change Committee to pass a judgment on whether that test could be met.

Finally, on to the amendment in the name of the noble Baroness, Lady Jones, of course, although we on this side recognise that we will continue to have some oil and gas as part of our energy mix—even under net zero—we want to see a move to a just transition. I welcome this amendment as an attempt to do that.

However, the amendment is slightly ill defined. I would rather see that transition come about through the profits from the extraction of this energy being directly allocated to the green economy. So, while I welcome the amendment and we do not oppose it, my personal view is that that is a more efficient way of doing it.

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[Baroness Jones of Moulsecoomb (GP)]

All the amendments I have tabled here reveal the scam that is absolutely built into this Bill—it is really offensive to the general public—because this carbon intensity test has been deliberately drafted so that UK oil and gas are always deemed to be low carbon, as compared to international comparisons. So there will never be any limit to the number of oil and gas licences issued. My Amendment 11 probes why the Government have chosen to apply the carbon intensity test only to natural gas. It is our first example of how the Government are fudging the numbers with egregious greenwashing.

Why is the carbon intensity of crude oil being ignored in the Government’s test? The answer is obvious: oil is more carbon intensive than gas and the North Sea produces far more oil than gas, making North Sea production more carbon intensive than most of the countries we import oil and gas from. So the Government fiddle the numbers by ignoring oil altogether, thereby making North Sea extraction look like it is somehow tackling climate change rather than pumping even more carbon into the atmosphere and making it ever harder to reach net zero.

The second part of the scam is that the Government do not compare like with like. Despite the fact that most of our imported gas comes via pipeline from Norway, which has less than half the carbon intensity of UK oil and gas, the Bill compares the UK’s gas with liquefied natural gas. LNG is almost four times as carbon intensive as a UK gas and almost 10 times as carbon intensive as gas from Norway because of the processing necessary to liquify, import and regasify the LNG. By comparing UK production with imported LNG instead of all natural gas imports, the Government have added another layer to this dubious test that will green-light new oil and gas licences for decades to come.

The Government have drafted this Bill at an extremely well liquified dinner—if my guess is right—to exclude the bulk of UK oil from the equation, despite oil being the most carbon-intensive component of North Sea production. It is an absolutely outrageous piece of draftsmanship, and yet another example of this Government legislating against reality to create whatever legal conditions are required to force through government policy.

Taken together, my amendments will ensure that the carbon intensity test compares like for like. The amended carbon intensity test will compare all UK oil and gas production with their equivalent imports and include all relevant processes for the extraction, transportation and delivery of oil and gas in usable form to its final customer. I hope that all noble Lords will agree that, if a carbon intensity test is to be used, it must properly assess the carbon intensity of North Sea oil and gas relative to their imported equivalents. It is essential to amend with the Bill along the lines that I propose. I beg to move.

[Earl Russell (LD)]

I speak in favour of the amendments in this group. They all relate to the two tests in the Bill, as the noble Baroness, Lady Jones, has said. The LPG and the UK net importer test are both one-way gates, where the answer is always yes. That is not good enough. There needs to be a proper test that counts the carbon cost of doing these things.

My slight issue with this is that a lot of the amendments in this group are not in scope in this very short, almost Private Member’s Bill-type of legislation. Inevitably, the amendments were gathered around the little bits that are in scope in the Bill to be amended. From our side’s point of view, there are lots of amendments seeking to change these tests. I am not minded to say which is the best amendment to take forward. From our side of the Room, some thought should be given to coalescing around one of those tests. I am happy to support that, but we need to go away and do some thinking to get a unified position.

On the proposal of the noble Baroness, Lady Jones, to remove Clause 1, if that were to be pushed to a vote, I would be prepared to support it. The Minister makes a lot of grand claims for this Bill. In his summing up, he keeps saying that the granting of licences do X, Y and Z. That may well be true, but nothing in the Bill commits to anyone granting any licences. The only thing that the legislation does is to say that there should be tenders. The joined-up logic that the Minister is giving us for the Bill does not, in point of fact, bear relevance, because it could be passed but no licences ever granted again. Equally, we could continue to have licences every year without this Bill.

The Bill does little other than to drive a wedge between us and our commitments to protect the environment, and serves as a way in which to politicise this issue in the run-up to the election. That is all I have to say.

--- Later in debate ---

Moved by

[Earl Russell]

20: Clause 2, page 3, line 25, leave out “Scotland”
Member’s explanatory statement
This amendment would mean the Act does not extend to Scotland.

[Earl Russell (LD)]

My Lords, I shall be brief, as these amendments are pretty straightforward. I recognise that the amendment would have an impact on the Bill but against that, it must be said that Scotland has provided the UK with lots of North Sea oil and gas and very little is coming back to Scotland. There is no allocation of money for the green transition and no commitment to the green transition—nothing flows back to Scotland. There is no protection for the workers; not a single penny that is generated from this extra extraction of North Sea gas and oil is in any way directly allocated to come back to the people of Scotland or to their industry.

The other amendment in my name would delay the implementation of the Act until 1 September 2025. To my mind, the Bill is not really properly put together; it is not properly worked out or part of a full and coherent energy strategy. Everyone on this side of the Room has recognised that we will continue to be dependent on oil and gas, even under net zero—but there is no coherent, conjoined or constructive strategy for providing energy security or lots of the things that are claimed in the Bill. For that reason, there are good and sound reasons for arguing for the implementation of the Bill to be delayed. I beg to move.

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In our view, it therefore makes sense to provide certainty for our oil and gas industry, to help to utilise those domestic resources and to continue the transition to net zero. I thank noble Lords for their attention and I hope they will feel able not to press their amendments on the basis of the reassurances that I have been able to give.

[Earl Russell (LD)]

I thank the Minister for his response and thank all noble Lords who have taken part in this short debate. Of course I recognise what the Minister has said to me, but my understanding is that all the Bill does is require an annual tendering for licences to take place. While I recognise a lot of the sentiment and the answers that the Minister has given me, I do not feel that the consequences flow just from not having an annual tender for licences for Scotland. We could still have licences granted every year if the Bill was not in place.

I thank the noble Duke, the Duke of Montrose, for his contribution. Again, I do not see how it was my intention to remove in any way the whole of Scotland from the renewables debate, and I am not aware that this is a consequence of my amendment, but I will of course go away and have a look at that. I beg leave to withdraw my amendment.

Amendment 20 withdrawn.

Paying Polluters: UN Report

Earl Russell Excerpts

Monday 22nd April 2024 Lords Chamber

[Lord Callanan (Con)]

I thank the noble Baroness for her question. I cannot comment on cases that are currently ongoing, but we will certainly bear her comments in mind when we consider our policy on this matter.

[Earl Russell (LD)]

My Lords, with fossil fuel and mining industries already having won more than $100 billion in awards and at least 175 treaty-based ISDS cases closed or pending that are directly related to environmental measures, does the Minister agree that foreign investors are using the dispute settlement process to seek exorbitant compensation from states that seek to strengthen their environmental protection? What actions are the Government taking with partners and allies on the international stage to try to find solutions to these problems?

[Lord Callanan (Con)]

As the noble Earl is probably aware, there are discussions in the OECD at the moment about the use of these clauses. As I said, we are responsible for the ones that we have signed, recognised and arbitrated against, and we very carefully ensure that these clauses protect our right to regulate in these circumstances on energy and climate change matters. The success of that has meant that we have seen no successful claims against the UK.

Offshore Petroleum Licensing Bill

Earl Russell Excerpts

2nd reading
Tuesday 26th March 2024 Lords Chamber

[Earl Russell (LD)]

My Lords, like the noble Baroness, Lady Jones, I will try not to be too boring and go on too long. I will also try not to damage any animals, either living or extinct, during my speech. On these Benches, we will oppose this Bill. I notice that, as in the other place, the opposition parties here are united in opposing it.

If the Bill passes, it will be remembered for two things: being mostly pointless and being needlessly politically divisive. The noble Lord, Lord Lennie, said that it is a straightforward Bill. The noble Baroness, Lady Young, said that its only virtue is that it is brief. The length of the Bill reflects any usefulness that flows from its consequences. The Bill does what it claims—somebody said this, but I am not sure who—but sadly what it does is damaging.

I venture to suggest that the Bill is not about energy security at all; instead, it is much more about performance politics and the need for political security on the Benches opposite. The clue to the whole Bill is contained in the first four words: “Duty to invite applications”. I want the House to note that this is not a duty to grant any applications—at all at any point. It is entirely possible that the Bill will be passed and enacted for not one more single North Sea licence ever to be granted again. The Bill is barely longer than a Private Member’s Bill. Who knew that the answer to all our energy security needs lay in a little over 250 words?

The Government have made grand claims that the Bill will provide energy security and protect jobs, and that it is more environmentally friendly than importing LPG. As the noble Lord, Lord Lennie, said, the Energy Secretary in the other place also claimed that it would lower energy bills, but that was quickly retracted. In truth, the Bill achieves none of these things.

I was interested in the story the noble Lord, Lord Lennie, told about the lunch where the Bill was supposedly cooked up over a few glasses of wine as a skewer to pin the opposition down on a political wedge and divisive issue. To my mind, the Government have created a heffalump trap for themselves.

The Government also argue that the Bill provides energy security. Fundamentally, it will make no difference at all, in my mind, as NSTA already has the power to grant licences and has done so almost every year since it was set up. NSTA itself, at its own board meeting, said that it did not want or require the powers contained in the Bill. Therefore, the Bill undermines the independence of the organisation that the Government set up to deal with granting new licences. As Alok Sharma said in the other place, the Bill, as drafted, is “something of a distraction”, and NSTA’s ability to grant new licences will not change materially because of it.

The oil and gas is all owned by private companies and is sold, as people have said, on the global markets. The Government have no say or control over where it is sold or to whom. As has been discussed, Global Witness has argued that up to 80% of that goes on to the international market and does not come in any way to the UK. It has been estimated that the gas supply created will be the equivalent of just four days on average per year. This is hardly going to provide us with energy security in the future. I do not believe that the Bill will do anything for energy security or to reduce bills.

The Government have made a series of arguments about securing jobs in the North Sea. It is undoubtedly true that North Sea oil is in decline, as everyone across this House has agreed and the Minister himself has noted. To my mind, the only way to protect jobs is through a real and meaningful plan, investment and a shift to a green economy, but this Bill does not do any of those things. I want to be clear that we on these Benches believe in a just transition. We recognise, fundamentally, the importance of protecting the jobs involved in this industry—between 30,000 and 200,000. We have heard different numbers, but I do not think we should argue about numbers. We should be respectful to all those who work in this industry, and I think the last thing they want is us having petty political arguments about the future of their jobs.

I welcome the contribution of the noble Lord, Lord Bruce, with his knowledge and experience of this industry. I welcome his basic message that these people want to be part of the future and do not want us arguing about their jobs. They want us to work together to create a transition for the North Sea towards a green economy, which is the only future they have. All of us need to find ways that we can do that. As the noble Baroness, Lady Hayman, said, new licences will not protect industry or workers to secure that just transition. For that to happen, there need to be allocated funds and plans, but, again, the Bill does not do that. As the noble Lord, Lord Bruce, said, they know what they want, and they want to be part of the future, so it is a shame that this Bill does nothing to secure or provide that future for these people. I honestly wish that it did, as not a single extra penny of taxpayer revenue will be allocated to the transition as a direct result of this Bill.

Three-quarters of all the oil and gas companies that operate in the North Sea do not invest a penny in UK renewables. Why do we allow them to have licences but not require them to invest in the transition? The tests to attain those licences are, in the words of the noble Baroness, Lady Boycott, “impossible to fail”, or, in the words of the noble Baroness, Lady Hayman, “unfailable”. The importing of LPG is not a fair equivalence, when, as the Minister knows, a lot of our oil comes through the pipelines from Norway. The consequences of these tests are all negative, and they are damaging for our reputation abroad and our standing on the world stage.

I welcome the £30 billion investment in the low-carbon economy, mentioned by the Minister. I thank the Conservatives for halving our CO₂ emissions; they are now at the lowest levels since 1837. What a tremendous achievement this Government have made, and I am grateful for it. However, at a time when they should be basking in the warm glow of their achievements, the Government come forward with a politically divisive Bill. It is a shame; we should be leading the world, not having arguments at home.

We freely recognise that, under net zero, we will need some oil and gas, not just for our energy but for industrial and other processes. As the noble Lord, Lord Lilley, says, it is a huge challenge, and we need to phase out demand for fossil fuels—I completely agree with him there. The war in Ukraine has had damaging impacts on energy prices, and the Government have spent some £70 billion supporting bill payers. I welcome that, but it is money we could have put into the green economy. We cannot continue going round the mulberry bush and investing in old energies; this money should be going into the energy of the future.

I welcome the contributions about the need for spatial plans and the need to protect marine protection areas. These are important issues raised in this Bill that need to be discussed. We will have an opportunity to discuss, through amendments, how we balance these protections with our need to do different things with our seabed.

As the right reverend Prelate the Bishop of Norwich said, the Bill is damaging to our international reputation. It will make it harder for us to secure the investment that we need in our green industries going forward. I call on the Government to accept Alok Sharma’s amendment which was tabled in the other place and which will, I think, be tabled here. It is the one that the Minister in the other place said the Government might be prepared to consider. If the Government are going to be doing this anyway, why not put it in the Bill and give the signal to industry that this is their intention? We are here to provide certainty to industry, so let us put it in the Bill.

We really have to leave fossil fuels in the ground. We have to wean ourselves off these things that are killing our planet. Alternatives do exist; the transition will be difficult and painful, but we must make that journey and seize the nettle. We have no choice. We need to work together as politicians to make sure that the transition happens and that it is a just one. Drilling for more oil is like offering an extra duvet to someone in the middle of a burning building. Rishi Sunak has said that he wants to max out North Sea oil.

The Bill will achieve nothing and will weaken our climate commitments. It sows division and weakens our international reputation. It makes the UK look like a riskier place to invest, just when we need that investment so that we can transition. That is why the Bill is so damaging. It does nothing but send out a signal that the Government’s policy on the environment is not clear, consistent or dependable, and, as a result of that, that the UK is not as safe a place as it should be to invest in the energy needs of the future. That is a bad message.

My party is committed to boosting renewable energy and increasing funding for wind, solar, marine power and tidal schemes. We will also enact an emergency programme to insulate all British homes by 2030, cutting emissions and fuel bills and ending fuel poverty.