Overhead Electrical Transmission Lines

Debate between Lord Bruce of Bennachie and Lord Callanan

Thursday 29th February 2024 Grand Committee

[The Parliamentary Under-Secretary of State, Department for Energy Security and Net Zero (Lord Callanan) (Con)]

My Lords, I start by thanking my noble friend Lord Swire for bringing forward this extremely important issue. It is right that we should debate it. I also thank all noble Lords who have contributed to this debate.

I remind noble Lords that the revised national policy statements for energy infrastructure, including a specific one with the catchy title of EN-5 on network infrastructure, came into force less than two months ago. Among other things, these set out the Government’s expectations for the use of undergrounding, which is the practice of laying electricity transmission cables underground and the subject of this debate.

That National Policy Statement for Electricity Networks Infrastructure states, as other noble Lords also recognised, that

“overhead lines should be the strong starting presumption for electricity networks developments in general”.

However, in nationally designated landscapes, such as national parks or areas of outstanding natural beauty—for example, Dedham Vale, which my noble friend mentioned—

“the strong starting presumption will be that”

developers

“should underground the relevant section of the line”.

That accounts for the importance of protecting the natural beauty of these areas. That strong starting presumption for overhead lines remains flexible, however, and undergrounding may be used in other areas in certain circumstances—namely, where there is

“a high potential for widespread adverse landscape and/or visual impacts”.

The noble Baroness, Lady Blake, acknowledged this point.

I hope that my noble friends Lord Swire and Lord Effingham are at least partly reassured on the flexibility available in certain locations. Such decisions will be weighed up by the Secretary of State. Furthermore, my noble friend Lord Effingham asked what proportion of overhead cables will be replaced with underground ones. I can advise that only those in protected landscapes would be. It is a relatively small or modest proportion. We acknowledge the beauty of our areas of outstanding natural beauty, hence our starting presumption of undergrounding in these areas.

My noble friends also asked about communications with Ofgem. I am not aware of any specific discussions that we have had with it on the possibility of increasing funding for the visual impact provision projected by the energy industry, but my officials will go back to Ofgem and I will write if we discover any further information or discussions on that subject.

The Government arrived at this policy position for various technical, operational, environmental and, of course, cost reasons. I seek the indulgence of the Committee to talk noble Lords through them, but before we delve into the depths of underground cables, if noble Lords will forgive the pun, and before I turn to the specific points raised I will give some context to the debate.

As Members of the Committee and, I assume, everyone taking part in this debate will know, the Government remain committed to our net-zero targets. To get there, we are accelerating domestic energy production. However, it is similarly critical that we expand our network infrastructure—a point recognised by all noble Lords. Without that, how are we to get the electricity generated in the North Sea, off the coast of Aberdeenshire and the rest of Scotland to the consumers who wish to use it?

To achieve this, we need to build about four times as much transmission infrastructure by 2030 as we built in the previous 30 years. I repeat that point: we need to build four times as much infrastructure by 2030—in five or six years’ time—as was built in the previous 30 years. It will require an estimated £40 billion to £60 billion of investment in our electricity transmission infrastructure by 2050. Let me be straight: in practice that will include building more overhead lines to connect supply to demand. I accept that will be an unpleasant pill to swallow for many in the Committee and, undoubtedly, within the country as a whole and some rural areas. However, it is one that we cannot shy away from.

The reason for that is that there are many benefits to so doing. Overhead lines are much easier to maintain. Trying to identify a fault in an underground cable is like finding a needle in a haystack, with multiple disruptive excavations needed, and often takes many weeks to complete. Overhead lines are much cheaper to build, as has been said. Some estimates suggest that undergrounding may be between five and 10 times more expensive, as the noble Lord, Lord Bruce, mentioned. Costs depend on the topography of an area and other factors. Those costs are ultimately passed on to consumers through their electricity bills. That is a difficult case to make to families up and down this country who are struggling with the cost of living, and it sets a high bar to meet for changing the Government’s policy.

I have talked about the urgent need to accelerate the deployment of new transmission infrastructure, and overhead lines are much quicker to build than underground lines. Some of us think that the time taken to build overground lines is long enough, but it would cost much more if we had to put them all underground. As noble Lords will well know, and have raised, time equals money and the longer the delays to rolling out transmission infrastructure, the higher developers’ constraint costs. Network constraints occur when the electricity transmission system is unable to transmit power to electricity users because the maximum capacity of the circuit is reached. The National Grid electricity system operator manages those constraints by paying generators to switch off or turn down in locations where the network is congested, and to switch on or turn off in locations closer to electricity users. Those constraint costs are ultimately passed on to consumers.

Analysis from National Grid indicates that, if delays to network build persist, annual constraint costs could rise from around £2 billion per year in 2022 to around £8 billion per year in the late 2020s. That would be the equivalent of an extra £80 per household per year. Undergrounding more of our essential transmission infrastructure would, I am afraid to say, only increase that cost to consumers even further.

Let me be clear that undergrounding has an important part to play in developing and delivering our critical network infrastructure, and is rightly the default starting position for protecting our most important landscapes, where overhead lines cannot be rerouted. This helps to mitigate the visual impact associated with overhead lines and pylons, which many communities are understandably concerned about—such as with those natural landscapes in East Anglia to which my noble friend Lord Swire referred. Burying cables underground, as the noble Lord, Lord Bruce, ably demonstrated and pointed out, also protects them against adverse weather conditions.

Another question that my noble friend Lord Effingham asked was about whether all future consultations on overhead lines can factor in the benefits of undergrounding. It is important for me to emphasise that developers, not government, are responsible for bringing forward the preferred design of an electricity networks project. The noble Baroness, Lady Blake of Leeds, asked how the balance was achieved in all cases by developers—and I assure the noble Baroness that developers take into account many things, including regulatory requirements, planning policy, cost, technical feasibility and environmental impacts. In doing so, it is all about striking a balance between all those different and often competing considerations. The consenting process considers and scrutinises those proposals. Undergrounding transmission is, I am afraid, not a simple change that can be made late in the process of a project’s development; it is something that needs to be considered very early in that process.

My noble friend also warned in his speech that something awful was about to happen to our countryside, by which I presume he is referring to the pipeline of overhead transmission infrastructure waiting to be built. It is equally important to emphasise that we must not downplay the environmental impacts of undergrounding. In fact, installing underground cables requires significant engineering works, which not only prolongs the construction time compared to overhead lines but causes significant damage to the surrounding area. The breadth of land needed for trench cabling, for example, is around the width of a football pitch. To the point made by the noble Lord, Lord Bruce, about situating water pipes next to underground electricity cables, I am afraid that that might not be such an efficient prospect after all. Of course, it would serve only to widen that trench even wider.

I move on to the point about the environmental and ecological impacts of overhead cables. The environmental impact of undergrounding, as I said, can be significant and indeed permanent, not only during installation but during operation. It can, in essence, create a somewhat sterilised strip of land where there were once trees and hedgerows, causing habitat and species loss. We should ask ourselves whether that is a price worth paying because of the visual impact of overhead lines; we may have different opinions about that. As with many discussions and considerations of energy policy, it is about balancing out different risks and problems in every area.

[Lord Bruce of Bennachie (LD)]

I understand what the Minister is saying, but we have certainly had experience of quite a number of pipelines being laid from the north of Scotland right across Scotland. That was years ago, but you would not know where they are now. So, yes, there was disruption at the time, but it settled completely.

The Minister acknowledged as well that security of supply could be an issue. Is that a factor that should be weighed a bit more heavily where there are lines that are systematically prone to disruption on a regular basis, so that undergrounding might be a better offer?

[Lord Callanan (Con)]

Yes, I absolutely concede the noble Lord’s points but, given the modern policy environment and all the legal impacts, much energy infrastructure that was built many years ago would be very difficult to build today. In past generations, consumers were perhaps much more understanding of installations of nationally significant infrastructure than they are now. I absolutely accept the noble Lord’s point. In all these considerations, it is also about balance—balancing out competing factors, of which cost is one and convenience is another, but security of supply is an equal factor that also needs to be considered. I suspect that the noble Lord is probably considering the low-voltage distribution network rather than the high-voltage transmission aspect of the supply.

My noble friend Lord Swire talked about the different creative technologies available for laying underground cables and asked whether the Government had considered those factors. Ultimately, it is not for the Government to opine on those matters. Those innovative solutions are quite rightly being driven forward by industry and they are a brilliant example of how we can use such innovations to support the delivery of our energy infrastructure ambitions and our net-zero infrastructure. The transmission owners and others are the experts in this field and, of course, we will continue to liaise with and support them in their endeavours.

I hope I have—but I suspect I have not—succeeded in persuading noble Lords that undergrounding is far from being the silver bullet in our endeavour to expand our network transmission infrastructure and meet our net-zero targets. In fact, using underground rather than overhead lines may in some respects have the opposite effect and lead to more delays rather than fewer, given that the installation takes much longer. In some cases, the upfront costs are perhaps not worth it in the longer term, as my noble friend Lord Effingham suggested. In our bid to greatly expand our domestic energy production and meet the needs of households up and down the country, I am afraid that we need to act and build networks faster than we have ever done in the past.

It is for those reasons, which I have talked the Committee through, that the Government have decided to maintain our policy position of a starting presumption of overhead lines for electricity network developments in general. That is not to say that the Government stand idly by while communities living in the path of new transmission infrastructure are affected; it is quite the opposite. That is why, at last year’s Autumn Statement, the Chancellor announced proposals for a community benefits scheme for communities living near transmission network infrastructure, which the noble Baroness, Lady Blake, asked about. The communications campaign is due this year and I invite the noble Baroness to get in touch directly so that we can provide more details on it.

I am afraid that I am running out of time, so I will move to my conclusion. I will write to noble Lords if I have not answered any of their points.

I do not need to tell the Committee that, as with so many issues, no policy is etched in stone indefinitely. In fact, the Government would not be doing our job properly if we did not keep policies under review. However, that falls far short of committing to look again at the Government’s current policy on undergrounding less than two months after it came into force. Now is not the time. The Government can determine whether this should be reassessed if and when more evidence is provided by industry. For now, the best place for the majority of transmission infrastructure is—I am sorry to say—up in the air, for technical, operational, environmental and cost reasons and, most importantly, to protect consumer bills.

Oil and Gas Windfall Tax

Debate between Lord Bruce of Bennachie and Lord Callanan

Wednesday 19th July 2023 Lords Chamber

[Lord Bruce of Bennachie]

To ask His Majesty’s Government what assessment they have made of the impact of the oil and gas windfall tax on investment and jobs, and the capacity of the energy sector and supply chain to deliver key components of the transition for achieving the United Kingdom’s net zero objectives.

[The Parliamentary Under-Secretary of State, Department for Energy Security and Net Zero (Lord Callanan) (Con)]

My Lords, the Government introduced the energy profits levy to respond to exceptionally high prices that mean that oil and gas companies are benefiting from extraordinary profits. The Government have been clear that we want to see producers reinvest profits to support the economy, jobs and the UK’s energy security, which is why we have introduced generous investment allowances. Our North Sea transition deal reflects the key role of the sector in that energy transition.

[Lord Bruce of Bennachie (LD)]

I thank the Minister for that reply. As we increase our efforts to meet net zero, which we clearly must, does he agree that through all the projections to and through net zero, we will continue to use fossil fuel, albeit on a declining basis? Therefore, is it not essential, because Norway has said that it will produce every ounce of oil and gas that is commercial in its sector, that we do nothing to prevent the transition being led by the energy industry, which is increasing its investment in the necessary technology such as carbon capture and storage, hydrogen and green electricity, and that we need to ensure that it can continue to do that?

[Lord Callanan (Con)]

I am very happy to agree with the noble Lord. I am tempted to observe that he might want to talk to some of his colleagues on his Benches about that message. He is right that it makes much more sense as we go through the transition to obtain those resources from our own fields rather than import them at a much higher carbon content.

Energy Bill [HL]

Debate between Lord Bruce of Bennachie and Lord Callanan

Committee stage
Monday 16th January 2023 Grand Committee

[Lord Callanan (Con)]

I thank the noble Lord, Lord Bruce, for his amendments. I will take up the question from the noble Lord, Lord Teverson, first. The answer is absolutely; we have an extensive programme called the Energy Efficiency (Energy Using Products) Regulations. They are largely similar to those we had in the European Union, but we have extended them and taken them further. We have recent regulations on more efficient lighting and there are others coming, as well as some on the more popular white goods that people use. I would be happy to send him more details of that.

I move on to Amendment 234 from the noble Lord, Lord Bruce. The Government agree of course with the principle of having an independent body to advise on targets and timetables for energy efficiency policy and net-zero policy more broadly. But we already have that body: the Climate Change Committee fulfils that role. He will also be aware that the Government will announce further details about the energy efficiency task force that was announced by the Chancellor and the Business Secretary late last year. There is a lot of detailed work happening on that at the moment. We hope to have more to say very shortly.

On Amendment 235, the Government fully recognise the importance of energy storage and its ability to help us to use energy more flexibly and decarbonise our electricity system more cost-effectively. Our measure to define electricity storage provides long-term clarity and certainty over its treatment in regulatory frameworks. That will facilitate storage deployment going forward. At this stage, however, it is premature to set a target for the sector. We do not yet know the full extent of the system requirements for storage. Especially in the context of high energy bills and having to pay for increased storage, it would not be responsible to set storage target at this time, as we could set a target that is too high or too low and favour a more expensive technology over a relatively cheaper one. Instead, our approach is to remove barriers and spur innovation for all low-carbon flexibility technologies. We published the 2021 Smart Systems and Flexibility Plan with actions to facilitate the deployment of these technologies, including storage at all scales.

The Government are not in disagreement with the noble Lord, except on the narrow issue of targets. I hope he recognises our commitment to enabling the deployment of flexibility, including energy storage, across our energy system to even out fluctuations in generation and demand and therefore deliver the best outcomes, which we all want, for our consumers. Therefore, I hope that he will see fit to withdraw his amendment.

[Lord Bruce of Bennachie (LD)]

My Lords, I am grateful to the Minister for that response. As I said, I accept that the Government have been doing quite a lot, but I still believe they can do an awful lot more. I hope that those initiatives yield results.

On the noble Baroness’s intervention, I do not think it is a question of people not knowing how to install heat pumps; it is about people having expectations of heat pumps that do not suit every property. I speak from my own personal concerns. I have a house built in 1910; it is not the most efficient house. I inquired about a heat pump, and was told that if I was lucky I would get an ambient temperature of about 14 degrees, which would cost me about £10,000. I could get the ambient temperature up to 18 or 19 degrees as long as I spent £120,000 on increasing the insulation in the house. But other houses could be upgraded much more cheaply, so I suggest that they should be prioritised.

I am sorry, but I do not think the Scottish Greens are realistic about what they think can be achieved between now and 2025. In places such as Aberdeenshire and the Highlands, they will find a kickback when people are told that they cannot have an oil-fired boiler, there is no gas and we do not have a viable alternative for their property—yet.

Energy Security

Debate between Lord Bruce of Bennachie and Lord Callanan

Monday 5th December 2022 Lords Chamber

[Lord Callanan (Con)]

My noble friend makes some very good points, and I agree with him on the three issues he talked about: generation, energy efficiency and of course distribution, which is equally important. We have a very advanced cybersecurity strategy. I am not going to go into detail on that now, or indeed our contingency plans to protect our energy infrastructure, but we are very well aware of the risks and are devoting a considerable amount of attention to this matter.

[Lord Bruce of Bennachie (LD)]

My Lords, the Minister was a little sneering about the alternatives to nuclear power, but has he not considered that the record of nuclear power is one of going massively over budget, massive delays and an unidentifiable cost of waste management disposal? To take up the previous point, local generation and local distribution, rather than massive and highly vulnerable major projects, is a much better way to ensure sustainability in the future.

[Lord Callanan (Con)]

The answer to the noble Lord is that we need both. We need new large-scale nuclear power, not least to replace some of the ageing stations that are being phased out, but we want lots of new renewable power locally as well. Indeed, our strategy is to produce exactly that. I know that the Opposition tend to be a bit down on our renewable energy record but, dating from the coalition days, we have a fantastic renewable energy policy. We are continuing to roll out new renewables at a very large rate—one of the fastest in Europe—and we will continue to do so, subject to inevitable supply chain constraints as the rest of Europe seeks to catch up with the excellent policies that we have been following.

Subsidy Control Bill

Debate between Lord Bruce of Bennachie and Lord Callanan

Committee stage
Monday 7th February 2022 Grand Committee

[Lord Bruce of Bennachie (LD)]

I am glad that those conversations are taking place, but is not the danger that if the devolved Administrations do not have the opportunity to get that advice, they might as well move to a direct challenge? It makes the friction more extreme rather than less. I accept the point the Minister is making about not wanting lots of frivolous requests, but if the right to request at all is denied, the danger is that there will be more contentious challenges.

[Lord Callanan (Con)]

We are not denying the right to request, which is why we are currently in discussions with the devolved Administrations to try to codify the system, but we have to accept the reality that they have a fundamental objection to subsidy control being reserved to the UK Government. They do not believe that it should be a UK-wide function. While we can agree and discuss many of the details, it is a black or white situation whether it is reserved to the UK Government. We feel it should be. That was Parliament’s decision in the United Kingdom Internal Market Act. The devolved Administrations do not agree with that, but it is a fact, so while it is possible to agree with them on many of the details, and we have engaged extensively at ministerial and official levels, we cannot resolve the fundamental difference of opinion on the overall principle.

There is a risk that this amendment would overburden the subsidy advice unit with numerous and unnecessary directions for referrals. The noble Lord, Lord Bruce, talked about the ability of the current Scottish Administration to put friction in the relationship and to seek to cause division where there is perhaps no division at the moment, and that would require substantial and unpredictable additional resources. In contrast, given my department’s responsibility for and its relationship with the Competition and Markets Authority, the Secretary of State will be able to take referral decisions that factor in the overall workload and capacity of the subsidy advice unit and will work with others in government to ensure the unit is appropriately resourced to deliver its functions over the medium and long term.

We appreciate that the new regime represents a significant shift from the requirements of the previous EU state aid regime and that public authorities will need to familiarise themselves with the new requirements and processes. Public authorities will already be used to the interim arrangements under our international obligations, including in the trade and co-operation agreement, which require an assessment of a prospective subsidy or scheme against six principles. As always, my department stands ready to support further through guidance and advice to help to ensure that public authorities in all parts of the United Kingdom are prepared and feel comfortable making their own assessments and giving out subsidies, hopefully without the need to seek advice from the subsidy advice unit. Therefore, for the reasons I have stated, I am unable to accept the amendment and hope that, given the explanations I have provided, the noble Baroness will feel able to withdraw the amendment.

National Security and Investment Bill

Debate between Lord Bruce of Bennachie and Lord Callanan

Report stage
Thursday 15th April 2021 Lords Chamber

[Lord Callanan (Con)]

I am of course grateful to the noble Lord, Lord Bruce, and my noble friend Lady McIntosh for Amendment 9 in their names. As they outlined, it seeks to exempt from the call-in power acquisitions made by way of obtaining security over a qualifying entity where no effective control is obtained. I start by placing on record my thanks to the noble Lord, my noble friend and the Law Society of Scotland for meeting my noble friend Lord Grimstone and me following Grand Committee to discuss this issue in detail. Indeed, we have considered all the points that were made.

As I emphasised in that meeting and in our subsequent correspondence, the Government do not consider that the provision of loans and finance is automatically a national security issue. Indeed, lenders need confidence that they can see a return on ordinary debt arrangements in order to provide that service. However, we must also recognise that in a small number of cases national security risks can arise through debt arrangements. Noble Lords have particular concerns about the Bill with regard to Scotland. I understand—and the noble Lord, Lord Bruce, stated—that this is because it is usual practice in Scotland for a lender to become the registered holder of shares in security through a shares pledge.

Having heard the concerns, the Government have reflected carefully on the issue, but we continue to believe that an exclusion would not be appropriate in this case. In such circumstances, the legal title to shares will, as a matter of fact, have been acquired by the lender, and it is important that we do not inadvertently create a loophole that those who wish us harm might otherwise seek to exploit.

While I note that the proposed amendment has been updated since the version debated in Grand Committee, reflecting my noble friend’s intention to limit the exemption to situations where “no effective control” is obtained, I fear that this would be difficult to reconcile with the mandatory regime.

It would introduce a new, inherently subjective concept that would sit uncomfortably with the need for acquirers to be able to objectively determine their legal obligations. I hope that noble Lords who have stayed the course on this Bill—a small, gallant band—will know by now that it is focused on the central premise of acquiring control, with these circumstances defined in detail in respect of entities in Clause 8. This amendment would lead to a circular argument in the Bill, in which a trigger event is the acquisition of control—except for when control is not acquired. I am sure that a number of lawyers in this country would be licking their lips with that provision in the Bill.

I mentioned particular concerns about how this would affect the mandatory regime, but the Government also consider that this would cause difficulties for voluntary notification and for the Secretary of State’s call-in power. None the less, both my noble friend Lord Grimstone and I have committed to monitoring the operation of the regime in practice with regard to this issue. Clause 6 provides the Secretary of State with the power to make “notifiable acquisition regulations” to amend the scope of the mandatory regime. That could be used in future, if considered appropriate, to exclude circumstances related to acquisitions by way of security from the mandatory notification regime.

I will address head-on the point made by the noble Lord, Lord Bruce, that this will be particularly disadvantageous to Scotland. It is important to emphasise that such lending arrangements are also possible in England and Wales—albeit we know that they are less common. This Government are staunch supporters of Scotland and it is vital that the Scottish legal and finance sectors continue to flourish.

Let me briefly make three other points on this amendment, which I hope will provide further reassurances to the noble Lord and my noble friend. First, the Bill broadly mirrors the existing approach of the persons with significant control register, which does not exclude legal owners of shares acquired by way of security. I take great confidence from the fact that this has been in place since 2016 and has had no discernible effect on the willingness of lenders to provide finance in Scotland.

Secondly, the mandatory notification and clearance element of the regime is proposed to apply only to entities of a specified description within 17 sectors of the economy. The number of circumstances requiring notification where a lender acquires the legal title to shares at or above the thresholds in this Bill is therefore likely to be low and, as with all acquisitions, the Government expect that the overwhelming majority will be quickly cleared to proceed.

Thirdly, as has been previously debated, I am sure my noble friends will welcome the removal of the 15% threshold I spoke about in a previous group. This will further reduce the number of cases covered by the mandatory regime in relation to securities.

So, for all the reasons I have outlined, I hope that both noble Lords will accept the arguments I have put forward and will feel able to withdraw the amendment.

[Lord Bruce of Bennachie (LD) [V]]

I thank the Minister for his response and for addressing the details. I am not convinced that the Law Society will be entirely satisfied that the difference between Scottish and English law has been fully appreciated. The Minister talked about legal title but, as I said in my opening remarks, legal title is meaningless if the shares pledge explicitly excludes any mechanism for dealing with the shares—either receiving voting rights, dividends, or the right to sell and an obligation to have them back when the loan is repaid. It simply is not control.

I take note that the Minister is concerned that the Scottish situation is not unique and therefore could cause complications in England and Wales, but the practice is clearly well established in Scotland. As I said in my opening remarks, it has been since the 19th century and is relatively unusual elsewhere in the UK.

I understand that the Minister believes that there will be relatively few instances, but part of the problem with the Bill is that an awful lot is undefined, in terms of the 17 sectors, the details of how those will be determined, the circumstances in which triggers will happen and the definition of national security. All of those things are explicitly not set out in detail.

I welcome Ministers saying they will monitor the situation closely. The assurance I would be looking for if we withdraw this amendment—obviously we will ask the Law Society what it feels about the unamended Bill—is that, if it becomes apparent there is a significant negative impact on Scottish business and the Scottish sector, the Government will be prepared to act to remove such discrimination.

It is a long-established fact that one reason the Scottish financial services sector is so strong is that it has a long history of prudent asset management and insurance, which has given Scotland a disproportionate share of both national and international business because of its reputation for, if I may put it in these terms, “canniness” in managing investments and other people’s money. That being the case, we do not want a situation where the law as introduced somehow compromises that. That would not be good for Scotland or the UK either.

I hope these remarks will be noted by Ministers and they will undertake to consult and respond to any representations that emerge showing that the concerns we have outlined are real and significant. If the Minister is correct in his assurance that, though they may be real they will not be very significant, perhaps the matter can rest. But I am sure that I, the noble Baroness, Lady McIntosh, and others will make it clear to him that, if it becomes apparent that there is a significant problem for Scotland and that uncertainty is disadvantaging Scotland, he will hear about it. In the meantime, I withdraw the amendment.

Oil and Gas Industry

Debate between Lord Bruce of Bennachie and Lord Callanan

Tuesday 22nd September 2020 Lords Chamber

[Lord Bruce of Bennachie]

To ask Her Majesty’s Government what steps they will take to ensure the recovery and diversification of the United Kingdom oil and gas industry supply chain.

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con) [V]]

My Lords, I recognise the impact that the coronavirus pandemic and the lower oil price have had on the oil and gas supply chain. We are working closely with the sector to agree a transformational North Sea transition deal, which we have committed to delivering in this Parliament. The focus of this deal will be on ensuring that the sector can support the energy transition and on anchoring the supply chain here in the United Kingdom.

[Lord Bruce of Bennachie (LD) [V]]

My Lords, I thank the Minister for that reply. Does he agree with me that, as we transition to net-zero carbon, we will continue to require fossil fuels and that it is better to use our own, which meet high international standards, and to sustain a quarter of a million UK jobs? Will the Government work closely with the industry, the Scottish Government and local councils to help accelerate diversification into carbon capture and storage and renewable energy, and exploit the huge potential from hydrogen, using the capital and world-class expertise that exists in our industry, so that these high-quality jobs can be diversified into new, low-carbon-sector jobs, rather than be lost?

[Lord Callanan (Con) [V]]

I agree with the points made by the noble Lord. I congratulate the sector on its response to the twin crises of the pandemic and the lower oil price. The Government launched an unprecedented Covid-19 financial package because we want to support the sector, which sustains more than 270,000 jobs in the UK. As I said earlier, we are committed to a proper North Sea transition deal.

Covid-19: Business

Debate between Lord Bruce of Bennachie and Lord Callanan

Wednesday 13th May 2020 Lords Chamber

[Lord Callanan]

Of course, we want employers to be as flexible as possible and to consider, for instance, staggering arrival and departure times from work to enable people to avoid peak times wherever possible. As I said, we are also encouraging people to walk and cycle wherever they can; we recently announced a £250 million emergency active travel fund to help with that. Ultimately, it will require both employees and employers to work together to take into account each other’s needs and to use common sense.

[Lord Bruce of Bennachie (LD)]

Given the decision of the devolved Administrations to maintain their guidance to stay at home and to limit the return to work, will the Government carefully monitor the path of the virus across the UK? If there is significant variation in the incidence of cases or deaths between England and the rest of the UK, will the Government revise the guidance in their documents? Can the Minister give an assurance that workers, companies and, indeed, Governments in the devolved Administration areas, or indeed anywhere in the United Kingdom, will not be penalised for maintaining a cautious approach which might prevent a second spike?

[Lord Callanan]

Of course, we keep these matters under constant review. It is not our intention to penalise anyone. We want to continue to work together with the devolved Administrations in all parts of our United Kingdom.