Great British Energy Bill

Lord Cryer Excerpts

Committee stage
Wednesday 15th January 2025 Grand Committee

[Lord Petitgas (Con)]

My Lords, I also support these amendments aimed, like others, at greater accountability and transparency of the delivery of GBE. In particular, I support Amendment 95 in the name of the noble Earl, Lord Russell, on budgets. It is all very well to check on delivery and ask for more reports, but you only get what you measure. It needs to be set against a budget and objectives. I have found the objectives in the Bill to be a little vague. I am therefore in favour of Amendment 95 to the extent that it will allow us to set reporting and disclosure against a set of objectives, and a certain budget. I would also add additionality in there, as that is the only way to understand whether the delivery has been effective.

[Lord in Waiting/Government Whip (Lord Cryer) (Lab)]

My Lords, I will begin with Amendments 95 and 96 in the name of the noble Earl, Lord Russell.

Amendment 95 proposes requiring GBE to publish an annual budget report and send it to Parliament through the Commons Energy Security and Net Zero Select Committee—or its successor, as he said, since its name seems to keep changing every five minutes. Amendment 96 proposes requiring GBE to publish an annual report on various topics which must also be sent to the Select Committee. GBE will already have a requirement to produce publicly available annual reports and accounts at Companies House, and the Secretary of State will lay copies before Parliament.

The noble Earl, Lord Russell, also mentioned the requirement that the Secretary of State appear before the Select Committee to speak to those reports. That requirement is already fulfilled. I know that Select Committees cannot subpoena witnesses, so there is no compulsion, but the Secretary of State and other Ministers regularly appear before relevant Select Committees. I emphasise other Ministers with specific interests. Once GBE is up and running, and producing these accounts, that is the time when the Secretary of State will appear before the relevant Select Committees. In theory, the Secretary of State does not have to appear—as I said, there is no compulsion—but it would be pretty odd if they did not do so under those circumstances.

There are also additional requirements on government-owned companies to ensure transparency and accountability. These include the obligation to follow the Treasury’s directions on accounts through the powers extended in the Government Resources and Accounts Act 2000, and laid out in the Government Financial Reporting Manual and related “Dear Accounting Officer” letters. Furthermore, GBE will be required to report on its governance around, exposure to, and risk of, climate-related scenarios in its operations as set out by the Task Force on Climate-Related Financial Disclosures a couple of years ago.

I acknowledge the noble Lord’s expectation that Parliament will hold a strong interest in the performance of GBE, which anybody who knows anything about how Parliament works would expect. I fully anticipate that the relevant Select Committees will call representatives from the company and from the department to provide evidence when required.

The point about hydrogen made by the noble Lord, Lord Hamilton, is a little wide of the scope of the amendment. However, I remind noble Lords that the exact mix of technologies in which GBE, as an operationally independent company, chooses to invest will be determined by its board in due course. His prediction—he is inviting me to look into the future, and I suppose he is doing the same—is that, as technology advances, hydrogen starts to fall in cost. That is fairly sensible, although I do not ask the noble Lord to hold me to it, because we are looking into the future and we do not know what technologies there will be then.

Amendment 97 proposes that GBE reviews the impact of its activities on sustainable development in the UK. This Government—this has been made very clear and repeatedly so—firmly believe in a healthy natural environment and that is critical to a strong economy and to sustainable growth and development. Our commitment to the environment is unwavering and will be in the future, including through meeting the Environment Act 2021 targets and halting biodiversity decline by 2030. That is a pretty demanding target, but that is what we have set out for five years’ time. I assure the noble Earl that the projects in which GBE is involved will be subject to the usual and rigorous planning and environmental regulations, where the impacts on the environment and habitats are considered. The Bill focuses on establishing the company, and adding more detail at this point may restrict its activities or add layers to its reporting and governance.

Amendment 117, proposed by the noble Baroness, Lady Bloomfield, seeks to legislate the scrutiny of GBE by relevant Select Committees. My noble friend and I have touched on that to some extent. This amendment goes beyond the precedent and practice of the involvement of Select Committees in public appointments. The chief executive of Great British Energy, once appointed, will also be its chief accounting officer and will be accountable to Parliament for their stewardship of GBE and its funds. As is common practice for public bodies, the management and leadership of GBE will be available to the relevant Select Committees as needed. There is no real need to legislate on this arrangement at this point.

I remind noble Lords that the chief accounting officer would, in all likelihood, be called before the Public Accounts Committee. Over the past few years, the PAC was chaired by Margaret Hodge, as was, who is now the noble Baroness, Lady Hodge; she was followed by the honourable Member for Hackney South and Shoreditch. Those who have seen those sessions know what an acute and thorough grilling that committee gives to anybody who appears in front of it. That Select Committee is always chaired by a Member of the Opposition; that is set up in the Standing Orders of the House of Commons. It is now chaired by the honourable Member for Cirencester and Tewkesbury. Having served with him in the other place for more than 20 years, I assure noble Lords that he will be just as incisive as his predecessors.

The Cabinet Office guidance on pre-appointment scrutiny by House of Commons Select Committees provides criteria and processes for such roles. It sets out that decisions on the scrutiny of individual posts should be made between the Secretary of State, the chair of the relevant Select Committee and the Cabinet Office. It is not common practice for this to be set in primary legislation. As per this guidance, no public body currently appears to have its full board subject to that kind of pre-appointment scrutiny. We anticipate recruitment for the substantive board to begin over the course of this year and will ensure that it is undertaken in a manner that aligns with best practice. To reassure the noble Baroness—

[Earl Russell (LD)]

I am sorry to intervene, but I think the noble Lord has moved on to the next group of amendments in his response to me, unless I am mistaken, because the next one is on government appointments, is it not?

[Lord Cryer (Lab)]

No, at present I am talking about Amendment 117.

[Earl Russell (LD)]

Oh, I am sorry.

[Earl Russell (LD)]

I thought the noble Lord had moved on; I apologise for interrupting.

[Lord Cryer (Lab)]

I am glad I was able to reassure the noble Earl. I hope that I have provided the assurances and explanations sought by noble Lords in tabling these amendments, and I sincerely hope that they will not press them.

[Lord Hamilton of Epsom (Con)]

May I press the Minister a bit harder on green hydrogen? If my noble friend Lord Roborough is right and, whatever happens, it will be much too expensive to produce, then we surely have to look elsewhere. What is the Government’s attitude towards liquid hydrogen as a fuel for the future?

[Lord Cryer (Lab)]

I am grateful to the noble Lord for that question. I cannot add anything to what I said before. GBE will look at a range of technology and sources. The whole of energy policy is predicated on security of supply and range of supply, because at various times in British history, although those two things have not been absent at the same time—or perhaps they have, briefly—there have been times when one or the other has been absent. If it is possible for hydrogen to play a part in that security of supply and range of supply—it certainly would on the latter—I do not see why that should not be part of the nation’s energy supply in the future.

[Earl Russell (LD)]

I thank all noble Lords who have taken part in the discussion on this group of amendments, and I thank the Minister for responding to me; I apologise for interrupting him. I appreciate everything he said, and I appreciate that there will be reports on GB Energy and that there are lots of opportunities for parliamentary scrutiny. It is appropriate that we ask these questions. The amendments in this group and others look to go a bit further to ensure that certain things will be reported on.

In response to the discussion on the previous group, the noble Lord, Lord Hunt of Kings Heath, asked me whether we were looking for a separate report. In my mind, this is about making sure that GB Energy produces a really good-quality annual report that covers a broad range of areas and is open and transparent about its activities.

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[Lord Cryer (Lab)]

Before the Minister responds, I should have pointed this out before, but I was not aware: reading out speeches from another Member is not acceptable, according to the Companion. That is partly my fault. I apologise: I should have said something.

[Earl Russell (LD)]

I apologise; I thought that it was acceptable. The noble Lord should have intervened earlier if it was not. I would not have done it if I had known that it was not acceptable, so I apologise to the Committee.

Great British Energy Bill

Lord Cryer Excerpts

Committee stage
Monday 13th January 2025 Lords Chamber

[Lord Offord of Garvel (Con)]

My Lords, I thank the noble Earl, Lord Russell, the noble Lord, Lord Cameron of Dillington, and my noble friends Lord Roborough, Lord Howell, Lord Trenchard, Lady McIntosh and Lady Noakes for their contributions on this group. The debate raised critical issues regarding the sweeping powers, as we highlighted, given to the Secretary of State. Why is it that any and all directions that the Secretary of State gives to GBE are hidden from the eyes of the public and lack parliamentary scrutiny? Considering once again that GBE is funded by £8.3 billion of taxpayers’ money, is subject to an unlimited cap on financial assistance and will not cut the British consumer’s energy bills, this is deeply concerning.

Let me turn to the amendment of the noble Earl, Lord Russell. Amendment 66 would ensure that the Secretary of State does not give any direction to GBE without first delivering an oral Statement before Parliament setting out those directions. I am acutely aware of the lack of detail in this legislation, and it is crucial that we have proper oversight of the wider activities of GBE as ordered by the Secretary of State. It is not only I who thinks this: the Government have agreed. In fact, in Committee in the other place, the honourable Member for Rutherglen, Michael Shanks, said that the Government want Great British Energy to be

“accountable, transparent and clear about how it is delivering on its objectives”.—[Official Report, Commons, Great British Energy Bill Committee, 15/10/24; col. 168.]

I therefore see no reason why the Minister should not support amendments that seek to improve accountability and reporting measures in the Bill and ensure sufficient oversight of the objectives, directions and activities of GBE. If the Prime Minister stands by his statement that he would not make a single promise that he was not confident he could deliver, the Minister ought to support these amendments, which would ensure that GBE was indeed “accountable, transparent and clear about how it is delivering on its objectives”.

The UK Infrastructure Bank, referenced by my noble friend Lord Trenchard, was set up with the explicit purpose of financing projects to drive our energy transition, and it already includes rigorous safeguards to ensure that taxpayer money is spent effectively. Governed by strict rules and subject to detailed annual reporting, it provides the public with comprehensive information on its performance and investments. Given that these robust mechanisms are already in place for the Infrastructure Bank, is it not fair—indeed, essential—that GBE undergoes the same level of scrutiny and oversight? If we are truly committed to safeguarding public funds, surely the same level of accountability should applie to all publicly funded energy initiatives.

Amendment 87 in the name of my noble friend Lady McIntosh would require a Minister to table a motion for resolution in each House of Parliament on any directions that are given by the Secretary of State to GBE before the directions are adopted. In a similar fashion, Amendment 66 in the name of the noble Earl, Lord Russell, would prevent the Secretary of State from directing GBE unless they have delivered an oral Statement to Parliament. I am grateful to both noble Lords for bringing these amendments, which will undoubtedly improve the levels of scrutiny and oversight to which the directions which are given to Great British Energy will be subject.

The only details included under Clause 6 are that

“Great British Energy must comply with the directions”

and that:

“The Secretary of State must publish and lay before Parliament any directions given to Great British Energy”.


This is simply not good enough. It is the bare minimum to allow Parliament to have sight of the directions issued to Great British Energy before they are acted on. In fact, it would be negligible to allow Great British Energy to be directed without sufficient parliamentary scrutiny. I therefore trust that the Minister has listened carefully to the concerns raised by Amendments 66 and 87.

Amendment 86, tabled by the noble Lord, Lord Cameron of Dillington, seeks to ensure that, before giving any direction to Great British Energy, the Secretary of State must consult

“the National Energy System Operator”—

known as NESO—

“the Climate Change Committee and the Gas and Electricity Markets Authority”.

I discussed in detail the importance of consultation in our debate on Amendments 56 and 116. As I said, engagement and consultation with the relevant parties is crucial if GBE is to be a success. The Secretary of State must not act in isolation. It is crucial that he or she consults with the relevant stakeholders. I therefore welcome the amendments in the names of the noble Lord, Lord Cameron of Dillington, the noble Earl, Lord Russell, and my noble friend Lady McIntosh. I look forward to the Minister’s response on the concerns raised by noble Lords in the debate on this group.

[Lord in Waiting/Government Whip (Lord Cryer) (Lab)]

My Lords, I now turn, as you would expect, to Amendments 66, 86, 86A and 87, tabled by the noble Earl, Lord Russell, the noble Lord, Lord Cameron, the noble Baroness, Lady McIntosh, and the noble Viscount, Lord Trenchard. As I have said, and as my noble friend has said previously, Clause 6 sets out that the Secretary of State will be able to give directions to Great British Energy, and that Great British Energy must comply with those directions.

As Great British Energy will be operationally independent, the intention is that the power will be used only when it is really needed. This will ensure that GBE has the space it requires to fulfil its role and deliver its strategic priorities. I draw the House’s attention to the comments made by the noble Baroness, Lady Noakes, in this context.

The purpose of the clause is to ensure that there is a mechanism in place should any urgent or unforeseen circumstances arise. For example, it could be used if the Secretary of State considers that they need to give GBE a direction that is in the interest of national security or otherwise in the public interest. The amendments before us would risk delaying the Secretary of State’s ability to give Great British Energy that direction, potentially compromising national security under certain circumstances.

The noble Earl, Lord Russell, raised the perfectly reasonable points of accountability and scrutiny. I am not impugning his motives—or the motives of anybody else who has tabled amendments—but if there was an issue of national security that perhaps took place at the start of a recess, it would seriously hamper the Secretary of State’s ability to act.

The noble Earl also raised, interestingly, the possibility of Labour losing the next election. It may come as a shock, but we are not actually planning to lose the next election. However, the mechanism of accountability and the decisions of this Government and future Governments are subject to the views of voters. That is part of the democratic process. We might not like a future Government exercising the directions we have put on the statute book, but that probably applies to past Governments as well. It is part of the democratic process and the process of accountability and scrutiny.

The amendment in the name of the noble Baroness, Lady McIntosh, would take this point further by requiring the resolution of each House, which I genuinely do not think is practicable. However, to ensure transparency and accountability, any directions given to Great British Energy will be published and laid before Parliament before they are given.

Further, Clause 6 requires that the Secretary of State must consult GBE and other persons considered appropriate, before giving directions to GBE. This means that GBE’s management and its board—yet to be appointed—will have the opportunity to express any reservations they have about the direction to Ministers before any such direction is made. If appropriate, this could include the National Energy System Operator, the Climate Change Committee—which has been consulted by successive Governments—the Gas and Electricity Markets Authority, Great British Nuclear and the National Wealth Fund, as well as groups not referenced in Amendment 86.

The noble Lord, Lord Cameron, mentioned at least two of the organisations on that list; he mentioned others too, as I think did the noble Viscount, Lord Trenchard. We could end up with a list as long as your arm of bodies that have to be consulted, which would seriously hamper the Secretary of State’s room for manoeuvre.

Finally, it is not unusual for a Secretary of State to be able to direct an arm’s-length body and such powers are found in several pieces of legislation—again referenced by the noble Baroness, Lady Noakes. In the specific context of government-owned companies, such powers are, for example, included in the Energy Act 2023, which created Great British Nuclear, where named stakeholders are also not included in the directions clause.

For these reasons, I hope the noble Earl recognises that adding this detail would not be beneficial and will withdraw his amendment.

[Earl Russell (LD)]

In my speech, I recognised the needs of national emergencies or an energy emergency. One of the options I offered the Government was to allow them to amend my amendment to exempt those situations from the need to give an Oral Statement. Will the Minister respond to that specific point, please?

[Lord Cryer (Lab)]

The noble Earl makes a fair comment. However, what he is putting forward is far too prescriptive. There are plenty of precedents for Secretaries of State being able to operate in this way.

I am starting to sound like the secretary of the Baroness Noakes fan club, but the noble Baroness, Lady Noakes, pointed out that there is the ability to summon the Secretary of State before a Select Committee. There are various Select Committees which have the ability to summon Secretaries of State after the fact. Ministers of all Governments might not be that keen on appearing before Select Committees, but they do not have a lot of choice in the matter. In the vast majority of cases when they are summoned, they appear before the Select Committee and give an account of their actions.

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[Lord Cryer (Lab)]

My Lords, Amendment 85F in the name of the noble Lord, Lord Murray, and Amendments 85G and 85H in the name of the noble Lord, Lord Fuller, would require the Secretary of State to give GBE directions to regularly report on the impact of its investments on electricity generation from solar, renewable and wind sources in the UK. We have already set out in this debate the need to avoid placing excessive reporting burdens on GBE. Nevertheless, the concerns raised remain pertinent.

It is important for GBE to maintain its operational independence and to ensure its long-term success, which these amendments would hinder. Further, the intended use of Clause 6, as has been repeated again and again, is to give directions for urgent situations only. These amendments would broaden it unnecessarily.

On renewables specifically, I assure your Lordships that GBE will focus on driving clean energy deployment. This will inevitably include a range of renewable resources, including solar and wind. GBE will be an operationally independent company and the exact mix of technologies it chooses to invest in will be determined in due course.

On accountability, which the noble Lord, Lord Murray, and others raised, let us bear in mind that the Secretary of State can be—and is—called before the energy Select Committee at any time. As far as the chief accounting officer is concerned, he or she can be called before the Public Accounts Committee, which, looking at the PAC’s track record, I would have thought is highly likely to take place. As we are all aware, the Secretary of State is also accountable to the House of Commons every few weeks. That includes—and this is pertinent—Topical Questions, which, in a fairly recent change to Question Time in the other place, are included in every Question Time, which means that things that have only just happened that do not have a relevant Question on the Order Paper can be raised by MPs of any party. Of course, annual reports will have to be submitted to Companies House in the usual way. That is set out in statute.

On that basis, I urge noble Lords not to press their amendments.

Great British Energy Bill

Lord Cryer Excerpts

Committee stage
Tuesday 3rd December 2024 Lords Chamber

[Lord Hamilton of Epsom (Con)]

My Lords, I support this amendment, but for all sorts of different reasons from those given my noble friend Lady Noakes. I am very worried that this money will be wasted. At the end of the day, there is a whole mass of commercial companies out there that are more than happy to invest in energy projects of one sort or another as long as they show a return. Why we need taxpayers’ money is slightly beyond me. I do not quite understand why that will make a big difference, unless the taxpayers’ money goes into projects that are completely uncommercial and therefore lose money for the taxpayer.

This comes back to the remarks I made earlier about the Government trying to pick winners. They have no record of success on this whatever. Indeed, if Ministers were so good at picking winners, no doubt they would be doing it commercially somewhere else and not bother to be in this place. It worries me that, at the end of the day, they will be left with nothing but the non-commercial aspects of development of energy projects rather than those that work and make money, because if they work and make money, the private sector will invest in them anyway.

I would like to know the Minister’s view on this, because it strikes me that there is a contradiction in terms. There are not going to be a mass of profitable projects that Great British Energy can invest in; there will merely be those that people say are not profitable and do not work. Therefore, the only way of getting them going is to shove taxpayers’ money into them and probably lose it. That is why I support my noble friend’s amendment.

[Lord Cryer (Lab)]

My Lords, before I move on to the substance of the quite extensive amendments, let me say that this has struck me as being a very constructive and interesting debate, with some genuinely deeply interesting contributions. For those of us who served in the House of Commons—I was there for 22 years, and I am fairly new here—what is striking is that the way of working here seems to be that we have confrontation only when it is necessary. For those who do not know, at the other end of the Corridor, it tends to be the other way round; you have confrontation whether you need it or not.

Amendments 35, 36, 37 and 38 in the names of the noble Lord, Lord Offord, and the noble Baroness, Lady Noakes, seek to understand how the specific mechanism envisaged in this clause might be used and why it represents financial assistance. The Government have committed to capitalise Great British Energy with £8.3 billion, as we are all acutely aware, over this Parliament.

Clause 4 gives the Secretary of State the power to provide financial assistance to Great British Energy—simply put, to allow the Secretary of State to fund the company. Subsection (2)(a) allows the Secretary of State to provide financial assistance in the form of a grant to Great British Energy. That provision might be used while Great British Energy is in its initial set-up phase, and before it can undertake revenue-generating activities. It could also be used in circumstances where the Secretary of State required Great British Energy to undertake non-revenue-generating activities.

At Second Reading, and in conversations inside and outside the Chamber, noble Lords have asked how Great British Energy will be able to raise equity. Subsection (2)(b) allows the Secretary of State to acquire shares in Great British Energy. This will be an important mechanism by which the Secretary of State will fund Great British Energy through this kind of equity injection. This method has been used to fund other public bodies, such as the formerly publicly owned but no longer publicly owned Green Investment Bank.

Great British Energy must be wholly owned by the Crown, so it will not be possible for other parties to acquire shares. Subsection (2)(c) allows the Secretary of State to acquire assets on behalf of Great British Energy. This provision might be used while Great British Energy is in its initial set-up phase, before it can undertake its own acquisitions. It could also be used in circumstances where it might be more appropriate for an asset to sit on the balance sheet of the Department for Energy Security and Net Zero—or DESNZ, to use one of the worst acronyms I have ever heard—rather than on that of Great British Energy.

Subsection (2)(d) allows the Secretary of State to enter into contractual arrangements with Great British Energy. This might be used where Great British Energy acts as an agent of the department under a contractual arrangement; for example, to deliver a support scheme. Subsection (2)(e) allows the Secretary of State to incur expenditure on behalf of Great British Energy, similarly to how I have already set out with regard acquiring assets. This provision might be used while Great British Energy is, again, in its initial set-up phase, before it can undertake its own acquisitions and operations, and/or where it might be more appropriate for expenditure to sit on the balance sheet of DESNZ rather than on that of GBE.

Similar provisions can be found in other legislation; for example, in Sections 320 and Section 129 of the Energy Act 2023, the latter regarding financial assistance in respect of carbon capture and low-carbon hydrogen production. There is therefore nothing unusual about the inclusion of these forms of assistance.

Amendment 39 in the name of the noble Baroness, Lady McIntosh, who I am glad to see is now in her place, seeks to make the provisions of Clause 4 regarding the ways in which the Secretary of State can provide financial assistance to GBE subject to a condition that a plan be developed for the transition to clean energy. We must resist this amendment because it is not needed and would produce what could be perceived as an unhelpful result, although I appreciate that the noble Baroness may simply be probing the Government’s priorities in providing financial assistance to GBE. Her amendment would mean that the Secretary of State would have no means of providing funding to GBE until the condition had been met and would, in effect, prevent the company being set up, recruiting any resources or undertaking any of the general activities required to create a new business. This would be a highly unusual provision and would curtail GBE’s ability to operationalise its activities through lack of financial assistance.

We have already set out GBE’s mission and five functions in its founding statement. Its mission is to drive clean energy deployment to boost energy independence, create jobs and ensure that UK taxpayers, bill payers and communities reap the benefits of clean, secure, homegrown energy. I am happy to reassure the noble Baroness that in due course GBE will clearly set out plans as to how it will contribute towards the transition to clean energy and the nature of interventions in specific sectors.

Amendments 40, 41, 42, 44, 45 and 108 are in the name of the noble Lord, Lord Offord. Amendment 40 requires any financial assistance to GBE to be included in the national debt. I am happy to assure the noble Lord that this is the case. Therefore, the amendment is superfluous to the situation. As a company wholly owned by the Secretary of State, GBE will sit fully within the consolidated accounting boundary of DESNZ. It will be on the department’s balance sheet and funds provided to it will be shown transparently through not just GBE but the department. Similarly, investments in projects or businesses made by GBE will also be shown in its annual report and on its balance sheet.

Amendment 41 seeks to require that GBE cannot sell shares without the approval of Parliament. Clause 1 already requires that GBE must be wholly owned by the Crown. It is entirely appropriate for that to be the case and for the Secretary of State to be the sole shareholder—we debated that earlier this evening. GBE will not be able to sell its shares to a third party, so the amendment is not needed.

If the amendment also includes the Secretary of State as a party who may acquire further shares in GBE—which, as set out in Clause 4, is one of the means by which the Secretary of State may provide financial assistance to the company—it is not necessary to require additional parliamentary approval for these individual issuances of share capital, not least because Parliament’s approval is already being sought through the Bill to allow the Secretary of State to provide financial assistance to GBE.

Amendment 42 seeks to limit financial assistance to GBE, above the announced commitment of £8.3 billion, without laying regulations approved by a resolution of each House. I again resist this amendment, as there are existing parliamentary controls and processes if any additional financial assistance were considered for GBE in the future. Any spending of public money requested by the Government must be voted for in the other place. There is an annual process that we are probably all aware of: the estimates cycle. Although I acknowledge that your Lordships’ House has no role in the estimates process directly and passes supply and appropriation Bills without debate, the other place provides the required degree of scrutiny, including the use of Divisions.

Amendment 44 would require the Secretary of State to produce an annual report on all financial assistance provided by GBE and to lay it before Parliament. I resist this amendment because, again, it is unnecessary. The reporting requirements upon GBE are already sufficient to achieve the objective of the noble Lord’s amendment. Detail on any financial assistance received from the Secretary of State will be included in the accounts of GBE, submitted as part of its annual report and accounts, as per its obligations under the Companies Act 2006.

Amendment 45 requires the Secretary of State to make regulations, to be approved by both Houses, to define the conditions that the Secretary of State may impose on financial assistance provided to GBE. I again resist this amendment. It is right that the Secretary of State can set out appropriate conditions for financial assistance provided to the company, but it would create a great deal of inflexibility if the Secretary of State were required to itemise any potential conditions in regulations. Where conditions for financial assistance are occasionally outlined in legislation, these are typically not limiting, as is the case in sections of the Energy Act 2023 relating to Great British Nuclear—GBN. In that case, Section 320 details financial assistance to GBN, and subsections(3)(a) and (3)(b) stipulate some potential conditions. However, that list of conditions is explicitly exhaustive and their application is left to the discretion of the Secretary of State. The Energy Act provides some good examples of the types of conditions that the Secretary of State may decide to put in place for GBE, but it is important that the legislation grants flexibility to the Secretary of State not only to provide financial assistance in any manner but to set any conditions deemed appropriate.

I assure the noble Lord that, while there is a broad power, it will of course be subject to the normal spending and budgeting controls. It will be subject to parliamentary scrutiny through the estimates process and to HM Treasury financial delegation controls, which are applicable to all government departments and tailored to mitigate specific risks, and it will be overseen by the accounting officer of the department, who can be called before various Select Committees, particularly the Public Accounts Committee.

Amendment 108 in the name of the noble Lord, Lord Offord, seeks to add a new clause allowing the Secretary of State to limit the ability of GBE to finance itself through borrowing. Noble Lords will be aware that, as a publicly owned company, GBE will not be permitted to borrow money from commercial bodies without explicit permission from His Majesty’s Treasury. Generally, the Exchequer can always borrow money more cheaply than financing from the private sector. If circumstances were to change and GBE received such permission, then, because it is a public sector body, any borrowing by Great British Energy would appear as a liability on the Government’s balance sheet and therefore would be transparent and visible to any interested party, including us.

[Lord Hamilton of Epsom (Con)]

I would be most grateful if the Minister could answer my question. Is there not a danger that, if there is a profitable energy project, the private sector will pick it up and make money on it but, if it is much dodgier and more speculative, and it might lose money and the risk is much higher, GBE will be left with it and probably lose money for the taxpayer?

[Lord Cryer (Lab)]

I see the point the noble Lord is making, but that is a matter for the board. I have a certain degree of faith in the Secretary of State and we have an extremely competent chair with a well-proven track record. In due course, we will hopefully have a board with a similar track record. I do not think we will be dealing with the sort of people who fritter money away because they happen to fancy it. But that is a matter for the board of GBE.

[Baroness Noakes (Con)]

At the outset, the Minister said that Great British Energy was going to be capitalised at £8.3 billion. That formulation was used in the manifesto, the July statement, et cetera. He then seemed to imply that the amount of financial assistance given under Clause 4 was not within the £8.3 billion. Could he clarify whether it is or not?

[Lord Cryer (Lab)]

Yes, it is within the £8.3 billion.

[Baroness Noakes (Con)]

Perhaps I could take us on to another aspect of the £8.3 billion. Helpfully, the noble Lord confirmed in response to my noble friend Lord Offord’s Amendment 40 that financial assistance would be included in general government debt, so we expect to see the £8.3 billion in the measurement of debt. At Second Reading, I raised the issue that I could not see the £8.3 billion in the Budget Red Book and therefore within the forecasts produced by the OBR for government debt—one of the key items in the Chancellor’s fiscal rules. I failed to ask the Minister for direct confirmation of that at the time. I do so now: is the £8.3 billion included in the current OBR forecasts for government debt?

[Lord Cryer (Lab)]

As far as I know, the answer to that question is yes. That is to the best of my knowledge. If it is not, I will have to write to the noble Baroness.

[Baroness Noakes (Con)]

I would be very grateful if the noble Lord would write, because it is very difficult to see the £8.3 billion. The £125 million for 2025-26 is visible in DESNZ’s departmental numbers, but it is not clear that anything else is. If the Minister is right, there is no problem. If he is wrong, it looks like another potential black hole in the nation’s finances—one wholly of this Government’s making. So it is important that we sort this out.

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[Lord Cryer (Lab)]

I have answered the noble Baroness’s question to the best of my ability; I will write to her.

[Lord Offord of Garvel (Con)]

I thank the noble Lord for his response to these amendments. I reiterate that the core aim of these amendments is to protect the taxpayer, ensure proper scrutiny and secure the financial integrity of Great British Energy, so I am sure we will come back to that on Report. I am very taken with the advice given by my noble friend Lord Hamilton of Epsom, that nationalised industries do not have a great track record of producing profits and returns for the taxpayer. In the meantime, I beg leave to withdraw the amendment.