Energy Bill Relief Scheme and Energy Price Guarantee Pass-through Requirement and Miscellaneous Amendments Regulations 2022

Lord Callanan Excerpts

Tuesday 22nd November 2022 Grand Committee

Moved by

[Lord Callanan]

That the Grand Committee do consider the Energy Bill Relief Scheme and Energy Price Guarantee Pass-through Requirement and Miscellaneous Amendments Regulations 2022.

Relevant document: 18th Report from the Secondary Legislation Scrutiny Committee. Special attention drawn to the instrument. Instrument not yet reported by the Joint Committee on Statutory Instruments.

Motion agreed.

Newport Wafer Fab

Lord Callanan Excerpts

Tuesday 22nd November 2022 Lords Chamber

[Lord Lennie (Lab)]

My Lords, the House of Commons Foreign Affairs Committee found no evidence to suggest that a review into the acquisition of Newport Wafer Fab had taken place, yet Politico reports that the Government’s National Security Adviser concluded that there were not enough security concerns to block it. Will the Government confirm on the record whether the review that was promised by the then Prime Minister Johnson took place or not? The same Foreign Affairs Committee warned that the sale of Newport Wafer Fab potentially compromises national security and is the loss of a prized asset to a competitor amid a global shortage of semiconductors. Given the sale has not been blocked, what steps are the Government taking to mitigate these risks?

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

My Lords, obviously, there is a limit to what I can say about this, but I will endeavour to be as helpful to the House as possible. I certainly can confirm to the noble Lord that the review did take place and was one of the factors that the Secretary of State took into consideration when he made his decision. It was made in a quasi-judicial manner and the Secretary of State considered that a risk to national security had arisen from the trigger event, which is why he made the order that he has.

[Lord Fox (LD)]

My Lords, I think we welcome this decision. When it comes to the National Security and Investment Act, the Minister is the best authority because, while Secretaries of State have come and gone, the Minister took it through this House and he is still here. Perhaps he can add some perspective, because at the outset of this case the Minister stood up and said that the technology in Newport Wafer Fab was not worthy of being called in through the National Security and Investment Act. Over time, that has evolved, so what has changed? Is it the Government’s view of Newport Wafer Fab or the Government’s view of China?

[Lord Callanan (Con)]

I am not sure that I said that, but I will certainly look back through the record. This has been going on for a long period. The Secretary of State has taken into account all the relevant factors, as he is obliged to do under the legislation. The noble Lord is right; we debated it extensively, but this decision has been taken purely on the grounds of national security. That is what the Secretary of State is required to do. That is what he has done, taking all the relevant factors into consideration, and he has made a final order in this case.

[Lord Wigley (PC)]

My Lords, which is the greater security threat: that the technology at Newport goes into Chinese hands or that we lose the overall capacity to be able to manufacture in this sector?

[Lord Callanan (Con)]

The noble Lord will know that I cannot go into specific details of this case, but I am delighted to say that we have an extensive range of companies in the UK manufacturing and producing in this area. South Wales is one of the notable success stories with the catapult acceleration plans that we have there.

[Lord Patel (CB)]

My Lords, with the sale of a major semiconductor company of the United Kingdom and with no gigafactory for the manufacture of batteries, what effect will this have on our ability to manufacture electric vehicles?

--- Later in debate ---

[Lord Callanan (Con)]

I am looking forward to the proper debate we will have on the report on electric battery vehicle manufacturing from the noble Lord’s committee later this week. We have over 100 companies active in this area in the UK and some excellent research and development and manufacturing facilities. This decision was not taken on any industrial policy matter. As is required under the legislation that we debated extensively and that the noble Lord, Lord Fox, referred to, the decision was taken on national security grounds alone.

[Lord Pickles (Con)]

My Lords, this is an unusual case in so far as it is retrospective. My understanding is that the National Security and Investment Act came into being only in January. In another place the prospect was raised of other companies being in the control of hostile countries. What process is in place to review that, in terms of not only future hostile takeovers but ones that might currently exist?

[Lord Callanan (Con)]

My noble friend is right that the Act came into operation in January. There were some retrospective elements in that. A trigger event occurred and therefore the Secretary of State could exercise his power. When future trigger events occur, we will look at every transaction based on national security implications, as is required under the Act.

[Lord Purvis of Tweed (LD)]

My Lords, the final order stated that the security risk was the reintroduction of semiconductor production at that site. Now that have a £39 billion trade deficit with China, what are the Government’s assessments of the key sectors of the UK economy which are vulnerable to Chinese technology on the same basis as this final order?

[Lord Callanan (Con)]

As was printed in it, the final order was based on the technology and know-how that could result from a potential reintroduction of compound semiconductor activities at the Newport site. The noble Lord has read the final order. As I said in a previous answer, this has no implication for any other policies. Every one of these transactions is looked at on national security grounds in the context of the legislation that was passed giving quasi-judicial power to the Secretary of State. It has no implication for any other sectors of the economy. Every transaction is looked at on an individual basis.

[Lord Forsyth of Drumlean (Con)]

My Lords, I bought a new Land Rover in July, and I am still waiting for a second key because of the shortage of chips. Given the Chinese aggression towards Taiwan, and given its dependency, surely this decision is to be welcomed. We should aim for a degree of self-sufficiency, as far as is possible, in the production of chips, given our determination to be a country which is secure against totalitarian states and their aggression.

[Lord Callanan (Con)]

I am sorry to hear about my noble friend’s Land Rover key; I hope it is restored to him as quickly as possible. We have a very active semi- conductor manufacturing and research and development facility in this country. We have over 100 companies actively working with compound semiconductor devices. Around 5,000 UK companies, 90% of which are SMEs, are designing and making electronics components devices, systems and products. The Chancellor announced an increase in funding in this area. The south Wales cluster is particularly important. We are spending hundreds of millions of pounds promoting it. We are very proud of it. This has no implications beyond that specific transaction, which was considered on national security grounds under the legislation, as the Secretary of State is required to do.

[The Earl of Erroll (CB)]

Does the Minister agree that it is not just a matter of intellectual property or the number of research and development staff, but that we must manufacture stuff and not be totally reliant on foreign supplies? Reinforcing what the noble Lord, Lord Forsyth, just said, it is a bit like being unable to grow crops and feed your people. If we cannot manufacture, we will collapse because we cannot import the stuff. It could be bog standard chips or bog standard anything. We need to get our manufacturing capability up in this modern world, where there will be a shortage of all this stuff.

[Lord Callanan (Con)]

I agree with the noble Lord. That is why in 2016 we set up the Compound Semiconductor Applications Catapult, with £50 million of funding. Since then, it has initiated over £100 million of projects and collaborative projects which have generated or saved over 4,700 jobs in the UK. Therefore, we are very active in this space. This decision has no implications for that investment, which will continue. It was a quasi-judicial decision on national security grounds, which is what the Secretary of State is required to do.

[Lord Adonis (Lab)]

Are there any other national security investigations of this kind under way?

[Lord Callanan (Con)]

The noble Lord knows that I cannot comment on other live cases until final orders are made. I can give him some figures from the National Security and Investment Act report, published in March. The NSI unit received 222 notifications and 17 applications were called in. Since then, we have made 10 final orders, and acquisitions have been unwound or blocked on three occasions.

[Lord Howell of Guildford]

My Lords, there has been some change of view over time about this case, so might we expect further changes of view in other areas where the Chinese are deeply involved—for instance, in civil nuclear power, where they are embedded? There have been doubts about that all the way along. Can the Minister assure us that when and if a change of view is beginning to develop, or new facts come to light, he will keep us informed on this change in policy in the way that our entire nuclear programme is going?

[Lord Callanan (Con)]

I do not accept that there has been a change in policy. The policy is the National Security and Investment Act, which this House passed. If and when other trigger events occur, there will be a full investigation by the NSI team in my department and the Secretary of State will take a quasi-judicial decision, as he has done in this case.

Energy Bill Relief Scheme Pass-through Requirement (Heat Suppliers) (Northern Ireland) Regulations 2022

Lord Callanan Excerpts

Tuesday 22nd November 2022 Grand Committee

Moved by

[Lord Callanan]

That the Grand Committee do consider the Energy Bill Relief Scheme Pass-through Requirement (Heat Suppliers) (Northern Ireland) Regulations 2022.

Relevant document: 18th Report from the Secondary Legislation Scrutiny Committee. Instrument not yet reported by the Joint Committee on Statutory Instruments.

Motion agreed.

Energy Bill Relief Scheme Regulations 2022

Lord Callanan Excerpts

Monday 21st November 2022 Lords Chamber

Moved by

[Lord Callanan]

That the Regulations laid before the House on 31 October be approved.

Relevant document: 17th Report from the Secondary Legislation Scrutiny Committee. Considered in Grand Committee on 16 November.

Motions agreed.

Republic of Ireland and Northern Ireland: Energy Supply Shortfalls

Lord Callanan Excerpts

Monday 21st November 2022 Lords Chamber

[Baroness Ritchie of Downpatrick]

To ask His Majesty’s Government what assessment they have made, if any, of the progress of discussions with the Government of the Republic of Ireland and the Northern Ireland Executive regarding energy supply shortfalls, particularly gas, in this coming winter.

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

My Lords, the UK and Ireland have a mature vehicle for co-operation to ensure that their gas emergency operational plans work together. There are protocols between the transmission system operators and modifications to emergency plans have been identified following joint emergency exercises. Additionally, a tripartite interconnector agreement is in place, which includes provisions on emergencies. A gas and electricity emergency group, comprising representatives from the three jurisdictions, complements these arrangements and the regional approach to emergency planning.

[Baroness Ritchie of Downpatrick (Lab)]

My Lords, I thank the Minister for his detailed Answer. Given the strengthening nature of British-Irish relations and all the problems that have been indicated with energy supplies, can the Minister guarantee that, no matter what pressures there are on the supply of natural gas in Britain, there will be no cut in supply of natural gas to Ireland—both north and south?

[Lord Callanan (Con)]

I cannot give the noble Baroness an absolute guarantee but it will not happen unless there is a national emergency. We have made agreements with the operators that, in the unlikely event of a supply shortage to the United Kingdom as a whole, that pain will need to be shared equally but, of course, it is not our intention for this to happen.

[Lord Empey (UUP)]

My Lords, the Minister will be aware that the subject of energy is devolved to Northern Ireland. There is currently no Energy Minister; I held that role for some time. What powers of intervention does the Minister have in the event of an interruption to supply or another emergency in the absence of a Northern Ireland Executive?

[Lord Callanan (Con)]

The noble Lord asks a very good question, given his experience. We keep these matters under constant review, but both Northern Ireland and the Republic depend on Great Britain for supply of gas and certain amounts of electricity. All the transmission system operators and civil servants on both sides of the border are working very closely together to make sure we plan for any operational difficulties.

[Lord Howell of Guildford (Con)]

My Lords, some parts of the energy supply of Northern Ireland are part of a larger energy entity for the whole of the island of Ireland. Can the Minister explain what role it might play? Given that there is plenty of gas on the high seas waiting for destinations and the Republic of Ireland has some terminals to receive it, there ought to be no problem sharing that in a constructive way.

[Lord Callanan (Con)]

I will check but I do not think my noble friend is exactly right; I do not think the Republic of Ireland has any LNG terminals. It relies on the ample supply Great Britain has. We supply them through our interconnector pipelines. He is also right that there is a single electricity market in Ireland with power stations, many of them gas-fired, on both sides of the border. We will ensure that they continue to receive supplies.

[Lord Teverson (LD)]

My Lords, Germany has 89 days, France 103 days and the Netherlands 123 days of gas storage. I believe we have nine days. Could the Minister inform us what is happening with the Islandmagee facility in County Antrim, Northern Ireland? I understand that the Rough facility in the North Sea was commissioned last month. Is that now full?

[Lord Callanan (Con)]

The Rough facility is working again, which was a commercial decision taken by the operators. The noble Lord is right about the overall quantity of supply but, of course, the countries he mentioned have no indigenous supplies of their own. We are very fortunate that some 40% of our supplies come from the North Sea.

[Lord Lennie (Lab)]

My Lords, with the uncertainties that exist around gas supply and demand this winter and, given that 84% of supply to Northern Ireland comes through the Moffat pipeline from Scotland, can the Minister assure the House that sufficient contingencies are in place between the UK and Irish Governments to meet any significant variations in demand or supply?

[Lord Callanan (Con)]

I refer the noble Lord back to the Answer that I gave to the noble Baroness, Lady Ritchie. We are of course extremely concerned about the upcoming winter. Many emergency drills have been held and we are in close contact with operators both in Northern Ireland and in the Republic of Ireland. I am pleased to say that co-operation is very good.

[Lord Watts (Lab)]

My Lords, is it not a failure of the Government not to make sure that there is sufficient supply for energy, both in the UK and in Ireland? Is this not a failure of government policy?

[Lord Callanan (Con)]

I do not agree with the noble Lord: it is not a failure of policy. The whole world has been hit by a massive supply shock due to Putin’s war in Ukraine. If the noble Lord were correct and it was a failure of this Government’s policy, why is there a failure in France, Germany and the Netherlands? These countries are on the continent as well and are also suffering from a lack of gas supplies. In fact, the UK has been helping them out by using our LNG terminals to offload gas, piping it through the interconnectors and helping our European friends to rebuild their supplies.

[Lord Lexden (Con)]

Are my noble friend and the Secretary of State for Northern Ireland receiving regular and detailed reports from Northern Ireland civil servants about energy supply issues there in the absence of a devolved Executive?

[Lord Callanan (Con)]

Yes, co-operation is ongoing and all Ministers are receiving regular updates. Actually, the island of Ireland as a whole is less dependent on gas for heating than the UK: about one-third of its heating depends on natural gas, but about 80% of ours does. There is a much higher reliance on both electricity and fuel oil for heating in Northern Ireland and southern Ireland.

[Baroness Brinton (LD)]

My Lords, in the light of the answer that the Minister has just given, I will ask him a question about England that I have asked in the past and that he will be familiar with. In the event of electricity supply cuts, what arrangements are available in Northern Ireland for people who have to rely on ventilators and other life-critical kit at home? Whom do they go to?

[Lord Callanan (Con)]

I had an exchange with the noble Baroness a few weeks ago about this vital matter, which is of course of great concern to us. Established provisions are in place in England, Scotland, Wales and Northern Ireland for vulnerable customers to be supplied temporarily.

Climate and Ecology Bill [HL]

Lord Callanan Excerpts

Committee stage
Friday 18th November 2022 Lords Chamber

[Baroness Blake of Leeds (Lab)]

My Lords, it is extremely welcome to have the Bill return for Committee, and I appreciate the opportunity to take part and to continue to raise issues that we feel are not being met by this Government and are within our grasp to make a real difference on.

Again, I commend the leadership shown in this area by the noble Lord, Lord Redesdale, in bringing the Bill forward. I also commend Zero Hour for providing us with all the important briefings to support and improve the quality of our debates, and of course I commend all the campaigners across the country who have worked hard to raise the issues concerned and to push them to the forefront of the political agenda. In today’s debate, I thank the noble Lord, Lord Green, in particular, for sharing his expertise, which added a richness to the discussions at hand.

I turn to the Bill and note all of the comments about the impact of the amendments tabled by the noble Lord, Lord Redesdale, and what they actually mean. I welcome the decision to give the Bill a more concise focus. I believe that steps to make it more amenable to the Government of course mean that it is more likely to see actual action, which is the reason that we are all here. So I am pleased to support these amendments.

As we heard, the Bill as published had various joined-up objectives: imposing a duty on the Government to introduce a strategy for reducing the UK’s

“overall contribution to global greenhouse gas emissions to net zero”;

establishing a “Climate and Nature Assembly” to advise the Government; and giving additional duties to the Climate Change Committee and the Joint Nature Conservation Committee. These all remain important aspects, but this group of amendments will leave us with a five-clause Bill with just one major objective for the Secretary of State: a duty to ensure that the UK

“halts and reverses its overall contribution to the degradation and loss of nature in the United Kingdom ... by ... increasing the health, abundance, diversity and resilience of species, populations, habitats and ecosystems”

and by

“fulfilling its obligations under the UNCBD and … the Leaders’ Pledge for Nature”.

The case for tackling biodiversity loss, climate change and environmental risks to public health is clear. Research from the Natural History Museum—I am pleased that we have had its input—found that the UK is last among G7 countries in terms of how much diversity survives, and it sits in the bottom 10% of all countries globally. It is worth us all repeating these statistics.

As we have heard, we are one of the most nature-depleted nations on earth. Much damage has already been done, and letting it continue would be even more alarming. Some of our most iconic and much-loved British animals could soon be extinct, including the red squirrel, the wildcat, the water vole, the dormouse and even the hedgehog. We have already seen a two-thirds decline in flying insect numbers in England in just the last 16 years. Thousands of badgers continue to be killed, authorised by this Government—in my view unnecessarily—and there are also bee-killing neonic pesticides. The Government have also failed to act to stop illegal hunting or effectively limit peat extraction and moorland burning.

If the Government fail to deliver on their environmental targets, their promise to protect at least 30% of our land, waters and ocean by 2030 is in serious doubt. It is no surprise that environmental groups, including the RSPB, the Wildlife Trusts and the National Trust, have accused the Government of an attack on nature by their policies, such as weakening environmental protections in investment zones, the retained EU law Bill and threatening to downgrade new environment-friendly farming subsidies.

The Government have cut funding for national parks by 40% in real terms over the last decade, leaving our most precious nature sites in crisis. Their plan to make up the shortfall is “through private investment”, without giving any further detail on what that will look like. They also failed to set new 2030 biodiversity targets in line with their legal requirements under the Environment Act 2021, and there is no current suggestion of when these will be set. Perhaps the Minister can comment on this in his remarks.

The Labour Party has committed to putting the environment and climate at the heart of its agenda and delivering nature-positive action which halts and reverses the loss of biodiversity by 2030, for the benefit of all people on the planet, as is the ask of the Bill. That element of reversing will make the real difference between the Government’s position and what is necessary. The Environment Act commits to halt species decline but fails to reverse decline and does not tackle broader biodiversity loss.

Without revisiting all the discussion at Second Reading, again I ask the Minister to tell us about progress towards a plan to tackle these messages. Also, where is the positive engagement strategy? Taking the public with us is so important in this agenda and, as we have discussed previously, a wider communication and education strategy is so important as we go forward.

The Government should back the Bill and commit fully to what is necessary to save our natural environment.

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

My Lords, I join all other speakers in congratulating the noble Lord, Lord Redesdale, on securing this Committee for his Private Member’s Bill today and on continuing to highlight this vitally important issue. I particularly welcomed his comments on red squirrels. When I was a Member of the European Parliament for the north-east, I was a proud member of the European Squirrel Initiative—that major NGO at the forefront of the debate—and of course, Northumberland is on the front line of the battle to preserve red squirrels, which persist primarily in Scotland; the greys have managed to eradicate them for most of England. In my view, we need to pursue an eradication policy of the greys—my noble friend Lord Randall also mentioned that important issue.

We do not have to shy away from the fact that nature is in decline around the world. That is exactly why we are setting a legally binding target in England to halt the decline in species abundance by 2030. This ecology Bill deems “species abundance” too limited and seeks to widen this to include habitats and ecosystems. However, in our view, species abundance is a good proxy for the health of the wider ecosystem. The indicator we will use to track progress includes over 1,000 representative species for which we have robust data. Between them, these species depend on the majority of habitats found in England. Action to achieve the species abundance target will necessarily require the creation and restoration of wider habitats and ecosystems.

This target is an ambitious one—indeed, it is world-leading. We will take determined actions to halt the decline of nature, but those actions will not stop once we meet that target. We know that halting the decline in nature is not enough and we will continue to take action naturally leading to a reversal of that decline. That is why we have consulted on long-term targets to increase species abundance, improve the red list index for species extinction risk, and create or restore more habitat—all by 2042. Five-yearly interim targets will help the Government to stay on track.

Furthermore, the overall suite of targets, including on water and air quality, will put nature at the centre of all government policy-making for generations to come. We will confirm all our long-term environmental targets as soon as practicable and will set out our approach to meeting them in our revised environmental improvement plan in 2023.

Energy Bill Relief Scheme (Northern Ireland) Regulations 2022

Lord Callanan Excerpts

Wednesday 16th November 2022 Grand Committee

Moved by

[Lord Callanan]

That the Grand Committee do consider the Energy Bill Relief Scheme (Northern Ireland) Regulations 2022.

Relevant document: 17th Report from the Secondary Legislation Scrutiny Committee

Motion agreed.

Energy Prices (Domestic Supply) (Northern Ireland) Regulations 2022

Lord Callanan Excerpts

Wednesday 16th November 2022 Grand Committee

Moved by

[Lord Callanan]

That the Grand Committee do consider the Energy Prices (Domestic Supply) (Northern Ireland) Regulations 2022.

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

My Lords, these regulations were laid before the House on 31 October 2022. They are quite narrow and define the terms “Northern Ireland domestic electricity supply” and “Northern Ireland domestic gas supply” for the purposes of the energy price guarantee Northern Ireland schemes. I will refer to these schemes as the “EPG NI”.

Energy is of course an essential and unavoidable expense for households. The economic fallout of the Covid-19 pandemic and the ongoing war in Ukraine have driven a global inflationary surge that is continuing to hit UK households and businesses. A typical household in Northern Ireland has seen its energy costs increase threefold since this time last year, which will put significant financial pressure on Northern Ireland households. The Government have moved swiftly to introduce emergency legislation to protect consumers from these inflated prices and to limit inflation.

The electricity and gas markets operate differently in Northern Ireland. There is a different regulator—the Utility Regulator for Northern Ireland—no price cap and an entirely different set of suppliers. Therefore, Northern Ireland could not fall under the remit of the Great Britain energy price guarantee scheme. The Government have established the energy price guarantee Northern Ireland scheme to deliver much-needed equivalent support.

The EPG NI reduces the unit cost of electricity and gas for domestic consumers in Northern Ireland, via the same mechanism as the energy price guarantee in Great Britain. Energy suppliers reduce consumer bills by a set amount of pence per kilowatt hour, and His Majesty’s Government compensate them for that reduction. Electricity costs are being reduced by 20 pence per kilowatt hour and gas by almost 5 pence per kilo- watt hour.

Importantly, the EPG schemes in Great Britain and Northern Ireland are intended for customers on domestic tariffs. The energy bill relief scheme is for customers on non-domestic tariffs. The Energy Prices Act 2022 set out that the EPG Northern Ireland schemes are to apply to those with “domestic electricity supply” and “domestic gas supply”. These regulations define those terms for Northern Ireland.

These definitions will mean that some non-domestic premises will be in scope of the energy price guarantee electricity scheme in Northern Ireland. This includes some places of worship, which have similar metering and tariff arrangements to domestic premises. These non-domestic premises will receive EPG support. There was no timely way for energy suppliers to disaggregate them from traditional domestic premises with similar metering and tariff arrangements.

The Government want to ensure that energy users in Northern Ireland receive equivalent support to that offered to Great Britain. By a quirk of the electricity market in Northern Ireland, a bespoke definition of domestic electricity supply was required for the timely establishment of a scheme in Northern Ireland. That is what these regulations do, and I therefore commend them to the Committee.

[Lord Browne of Belmont (DUP)]

My Lords, I welcome this instrument. It will go some way towards alleviating hardships in many Northern Ireland households.

Energy supply in Northern Ireland is very complicated because Northern Ireland has a separate energy market from the rest of the UK, with its own rules and regulations, but, as in the rest of the UK, energy costs continue to rise at a very high rate. One problem is that two-thirds of households in Northern Ireland use heating oil but, unlike in Great Britain, the oil market in Northern Ireland is not regulated. Is there any consideration of how those who use oil will be compensated? There is great competition in the oil market in Northern Ireland, and so many suppliers, so the prices can be kept at a reasonable rate.

Turning to gas, in the past 12 months both Northern Ireland gas providers, SSE Airtricity, which supplies Greater Belfast, and Firmus Energy, which supplies townlands, have increased their prices many times. There is a problem here. The gas market is even more complicated because the Utility Regulator must approve any tariff changes proposed by Firmus Energy in its 10 townland networks, but not in Greater Belfast. SSE Airtricity must also go through the regulator.

The main electricity provider in Northern Ireland is Power NI, which is overseen by the Utility Regulator, but there are other electricity providers in Northern Ireland, which increase their prices. They are not subject to the regulator and can put up their prices at any time. Has that been considered?

--- Later in debate ---

[Lord Lennie (Lab)]

My Lords, I thank the Minister for bringing the regulations before us and the noble Lords, Lord Browne, Lord McCrea and Lord Teverson, for their comments and questions. I thank the noble Lord, Lord Browne, in particular for clarifying the depth and strength of the market in Northern Ireland. I was going to say that the regulations were not contentious, but there is a bit of contention and, no doubt, the Minister will deal with that.

The instrument defines the terms “NI domestic electricity supply” and “NI domestic gas supply” to scope the extent of premises that will be eligible. Specifically, this is to include some non-domestic premises which due to their similar metering and tariff arrangements would receive EPG support. Given there is no way for energy suppliers to disaggregate, it is difficult to disagree with this. I would be keen to hear from the Minister the scope of this impact, both in terms of the number of non-domestic premises and any additional costs incurred.

The Explanatory Notes use places of worship as an example, as did the Minister, but what other types of non-domestic premises are included? Perhaps we could turn to the experts from Northern Ireland to help us with this.

I would like to raise an issue that was brought up in the other place during the debate on this instrument on Monday. There is a scheme document linked to this instrument, headed “Establishment of domestic electricity price reduction scheme for Northern Ireland”, which in Schedule 5 states that the Government will require suppliers of electricity to hand all meter data to the Government for the purposes of regulating and discussing the domestic supply scheme.

This data will encompass many things; it will be held by the Government for 10 years and can be shared with other departments, law enforcement agencies, regulatory bodies and others. While it is not pertinent to today’s instrument, this is the same for rest of the United Kingdom in the respective document. This appears to be a breach of the data access and privacy framework which was produced when smart meters were first rolled out. It states that smart meter data is the property of the customer and can be disclosed to third parties, including the Government, only with their consent. I understand the Minister in the other place committed to write to Dr Alan Whitehead MP on this issue and I would appreciate it if the Minister could ensure that I receive the same response.

[Lord Callanan (Con)]

I thank all noble Lords for their contributions to the debate. The Government have implemented the EPG Northern Ireland scheme to ensure that consumers are protected from excessively high energy bills over the winter period, and I am sure that is something the Committee supports. The Committee will be reassured to know the scheme is already in force and delivering support to households across Northern Ireland. I hope this will also go some way to assuring the public that the Government are committed to taking decisive action to deal with the energy crisis.

As well as providing immediate relief, this scheme, alongside the EBRS, will support economic growth and limit inflation caused by increasing energy bills and their knock-on impact on prices, labour, goods and services. The scheme has been designed to operate robustly and guard against fraud and gaming, and we will continue to monitor the schemes to ensure that support is provided and limited to those people and businesses who it is designed to help. We are committed to reviewing the schemes and we will consider how best to offer further support to the customers who are most at risk to energy price increases beyond April 2023.

In response to the questions raised, I will concentrate first on the point made by the noble Lord, Lord Browne, about heating oil. The noble Lord will be aware—and this was raised also by the noble Lord, Lord McCrea—that the alternative fuel payment will provide £100 to support households who do not use mains gas for heating. This alternative fuel payment is in addition to the £400 that households will receive through the energy bills support scheme. This applies in Northern Ireland and is designed to compensate for the rise in the price of heating oil from October 2022 in a way that is equivalent to the support received by people who heat their homes using mains gas and receive their support via the energy price guarantee. As the £100 alternative fuel payment is designed by reference to the increases in the price of heating oil and other alternative fuels that happened from September 2021 to September 2022, the Government are committed to continuing to monitor the prices over the coming months and we will consider further intervention if it is required to protect UK householders from extraordinary fuel prices.

The noble Lord, Lord Browne, further asked about unregulated electricity providers in Northern Ireland. Of course, the regulation of prices is a matter for UR, the regulator in Northern Ireland. The noble Lord is right that some electricity suppliers in Northern Ireland are not price regulated. It is a competitive market, but the EPG applies to all suppliers equally—the same discount applies to all.

The noble Lord, Lord McCrea, asked for clarification on backdated payments. The £400 EBSS will not be backdated, as it is paid as a flat sum. The EPG is, of course, backdated via an additional pence-per-kilowatt payment on top of the base EPG rate from November to March.

The noble Lord, Lord Teverson, also raised a point about the particular predominance of the oil provision in Northern Ireland; I think that I answered that in response to the noble Lord, Lord Browne. On the point regarding the single electricity market in Northern Ireland, there is no problem here. The measures that we are implementing are designed to support domestic consumers in Northern Ireland at the supply level as they relate to the retail market and do not impact on the underlying wholesale market. Therefore, they have no effect on the workings of the single electricity market.

The noble Lord, Lord Lennie, raised a point about metering and tariff arrangements and the scope of the impact on the number of non-domestic premises that have been brought into the EPG. In addition to places of worship, he questioned what other premises are included. I can confirm to him that some farms and small businesses are included. In respect of small businesses, it is those that are operating from former dwelling-houses. In reality, very few premises are affected—possibly fewer than 100 non-domestic premises are in scope—and the EPG and the EBRS of course provide equivalent support.

The noble Lord went on to ask about meter data. We are continuing to plan for and assess the use of personal data provided under the scheme documents in Northern Ireland and Great Britain. Obviously, as part of this work we will ensure that we comply with any relevant legal duties under the smart meters Data Access and Privacy Framework, so the data will be used only when necessary to calculate support payments and, of course, to ensure the good use of public money, which I am sure the noble Lord will support.

With that, I think I have answered all the relevant questions—

[Lord McCrea of Magherafelt and Cookstown (DUP)]

I do not think I heard a response from the Minister on whether the payment that was promised—the £400—would be coming out to the people of Northern Ireland before Christmas.

[Lord Callanan (Con)]

I cannot give the noble Lord a precise date for that now; we are working to implement it as quickly as possible. As soon as I can provide him with further information on that, I will do so. However, we are working as fast as possible, and we are aware of the urgency of the situation. We know that the money is required, and we will get it out as fast as we possibly can.

I commend the regulations to the Committee.

Motion agreed.

Energy Bill Relief Scheme Regulations 2022

Lord Callanan Excerpts

Wednesday 16th November 2022 Grand Committee

Moved by

[Lord Callanan]

That the Grand Committee do consider the Energy Bill Relief Scheme Regulations 2022.

Relevant document: 17th Report from the Secondary Legislation Scrutiny Committee

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

My Lords, these regulations were laid before the House on 31 October. The EBRS GB and EBRS NI schemes are necessary in response to exceptional global circumstances affecting energy prices. Putin’s illegal war in Ukraine has led to an unprecedented rise in energy prices, affecting businesses and vital services right across the UK. The Government have moved swiftly to introduce emergency legislation to protect consumers from these inflated prices, which will stop businesses collapsing, protect jobs and limit inflation. I am grateful to the opposition parties for helping us speed the legislation through the House. The wider negative effects of this economic pressure, including on the businesses of gas and electricity suppliers themselves, would be severe and would materialise very quickly in the absence of an intervention of this kind.

The Energy Bill Relief Scheme Regulations 2022 and Energy Bill Relief Scheme (Northern Ireland) Regulations 2022—the EBRS regulations—have been created under the Energy Prices Act, which, as the House knows, gained Royal Assent on 25 October 2022. The Energy Prices Act, introduced in Parliament on 12 October, provided the legislative footing needed to ensure that businesses across the UK receive support with their energy bills this winter through this EBRS. The regulations are essential secondary legislation, needed to implement and operationalise the ERBSs.

The regulations reduce the charges for electricity and gas supplied by licensed energy suppliers to eligible non-domestic customers and make payments to suppliers in respect of those reductions in Great Britain and Northern Ireland. The schemes represent significant and bold action by the Government to protect all eligible non-domestic customers—including businesses, charities and the public sector—such as hospitals and schools, from excessively high energy bills over the winter period. As a result, the scheme will run for a six-month period from 1 October 2022 to 31 March 2023.

Turning to the detail of the regulations, the EBRS GB and EBRS NI regulations set out that, with few exceptions, all non-domestic customers with electricity and gas contracts from licensed non-domestic energy suppliers will be eligible for a discount. The discount will be applied to the wholesale price element of bills, and the regulations set out how this discount has been calculated. The regulations cover the process by which the energy supplier is reimbursed by the Secretary of State for the discount. Regulations give powers to the Secretary of State to delegate this function where he considers it appropriate. Further provision is included to prevent suppliers or customers deriving greater benefit than is intended, in order to protect the integrity of the schemes.

The regulations also provide for an additional reduction to be applied for qualifying financially disadvantaged customers who are supplied under so-called “deemed” or “out-of-contract” contracts. The EBRS NI regulations prevent end-users who are outside Northern Ireland receiving the discount to their bills. The regulations also cover essential operational matters, including information and reporting obligations, enforcement powers and powers to impose civil penalties in respect of missing or defective declarations.

To accompany the regulations, we have published a suite of legally binding rules and non-statutory guidance, which provides further detail on how the schemes work in practice. Given the urgency of ensuring that organisations receive the support they need this winter, we have not been able to launch a formal consultation. Instead, we have had extensive informal consultations with energy suppliers, regulatory bodies and delivery bodies. We commit to reviewing these instruments as necessary following their implementation, based on stakeholder feedback. Additionally, separate pass-through requirement regulations were laid in Parliament to ensure that intermediaries such as landlords, who have received energy price support, pass through the benefit obtained to end-users—for example, non-domestic customers in rented properties. This also includes the laying of separate regulations to ensure the pass-through of EBRS benefits to heat network customers.

The regulations’ objectives are to support economic growth and to limit inflation, and we expect their most significant impact to be the avoidance of the closure of many firms, and therefore of redundancies. The benefits of avoiding closures will accrue to business, while the benefits of avoiding redundancies will of course provide broader benefits to society. Our aim is that the support delivered through these schemes will enable public services such as schools and hospitals to continue to operate this winter.

The EBRSs remain a source of critical support for non-domestic customers across the United Kingdom. Let me emphasise that the measures in these regulations are crucial for the effective operation of the schemes. The schemes will complement the other large-scale support the Government are providing with energy and the cost of living. I hope the House will be able to support these measures and their objectives. I commend the draft regulations to the House.

--- Later in debate ---

[Baroness Hoey (Non-Afl)]

My Lords, could I intervene before the Minister responds? I have carefully gone through the Energy Bill Relief Scheme Regulations 2022 and the Energy Bill Relief Scheme (Northern Ireland) Regulations 2022, which are about the same thickness, to see where the differences are. Obviously, we know that the situation is different in Northern Ireland, so there have to be some differences, but it would be helpful if, in winding, the Minister could clarify any substantial differences between how the scheme is going to work in Northern Ireland and in the rest of the United Kingdom. As the Minister is aware, we in Northern Ireland are always wary of being treated slightly differently for some unknown reason that we find out about later. I appreciate that there have to be separate regulations on this, but I would appreciate clarification on any substantial differences.

[Lord Callanan (Con)]

I first thank noble Lords for their contributions to this debate. As I said, the Government have implemented the EBRS GB and NI schemes to ensure that non-domestic consumers are protected from excessively high energy bills over the winter period. The schemes will make sure that the amount that eligible businesses pay for their wholesale energy costs comes down to a reasonable level, with some saving over 50% on those costs.

I am sure it is reassuring for the House to know that the schemes are already in force and delivering support to organisations across the UK. I hope this reassures the public that the Government are committed to taking decisive action to alleviate at least part of this energy crisis.

As well as providing immediate relief, these schemes will support economic growth and have the happy effect of limiting inflation caused by increasing energy bills and the knock-on effects on prices, labour, goods and services. As I said at the start, we are confident that the schemes will seek to avoid firm closures and redundancies and will ensure that vital public services and charities can continue to operate over the winter.

We will continue to monitor the schemes to ensure that this support is provided to the people and businesses that they are designed to help. We are committed to reviewing the schemes by the end of the year and will continue to work with stakeholders to ensure that their feedback is taken into account. We will use the review to look at how best to offer further support to customers who are most at risk from energy price increases beyond April 2023.

I start off with the contribution of my noble friend Lady McIntosh, who asked whether the House would have the opportunity to review the rules accompanying the statutory instrument. It is worth pointing out that the schemes have been set up at pace, and the House of course helped by passing the legislation at pace, to deal with the crisis. Therefore, it is right that the more technical details of the scheme have been included in statutory rules, which have been published on GOV.UK. The first tranche of EBRS GB and NI rules were published on 1 November; amendment rules relating to discount recovery were published on 4 November; and a third tranche of amendment rules relating to disputes and treatment of financially disadvantaged customers was published on 9 November. Minor changes made via amending rules were published on 10 November. If the noble Baroness wants to check on GOV.UK, she can while away her weekend reading the rules in detail. The business support scheme is intended to give immediate relief to businesses and other non-domestic consumers from the current level of inflated electricity and gas prices.

The noble Lord, Lord Lennie, and my noble friend Lady McIntosh asked the good question about what will happen in six months’ time, once these schemes come to an end. I cannot say that I have an answer for the Committee at the moment, because we are still to conduct the review of the scheme, which we have said that we will do by the end of the year. Perhaps if I set out what the review will consider, that will give the Committee some clues as to where we intend to go with this. The review will consider how best to offer further support to customers who are most at risk of energy price increases. By their very nature, they are likely to be those who are least able to adjust—for example, by reducing their energy uses or increasing their energy efficiency. Of course, any further support will begin at the end of the initial six-month support scheme.

My noble friend Lady McIntosh asked something that, I have to say, has nothing to do with these regulations, about lessons learned from Storm Arwen. We have had extensive discussions on that subject in this House. We published a comprehensive review of the recommendations for improvement of the electricity sector in response to Storm Arwen. There were a number of key recommendations covering enhancing system resilience; protecting customers; and additional support, such as compensation. The recommendations are due to be finalised by December 2023, but the majority are already complete, ahead of this winter.

My noble friend also asked about the assessment of the impact of administration and resource costs to Ofgem. Of course, we are working very closely with Ofgem to ensure the effective enforcement of the scheme requirements, and we will ensure that it has the necessary resources to carry out its role in this and many other government schemes operating in the energy sector. Given the pace at which we had to deliver the impact assessments of this time-bound intervention, we have focused on the largest and most significant impact—of course, the direct costs to the Exchequer.

My noble friend also asked about the 28-day disqualification policy. The arrears rule already referred to applies only to the additional discounts that suppliers are required to apply to those qualifying disadvantaged on deemed or out-of-contract contracts. That is in addition to the main EBRS discount.

On the points made about suppliers increasing energy bills, the EBRS scheme is shielding businesses across the country from soaring energy prices. The vast majority of energy suppliers are operating responsibly and within the spirit of the scheme. Of course, we are aware of reports that some companies are being faced with excessively high quotes this winter. I can tell the House that we will take a robust approach to this, and we are working with Ofgem to ensure that the licensing conditions have not been breached and that businesses are able to see the full effects of support offered by the scheme.

My noble friend Lady McIntosh also raised the issue of the UK’s energy resilience in winter. We have a secure and diverse energy system, and we are confident of our plans to protect households and businesses in the full range of scenarios this winter, in light of Russia’s illegal war.

--- Later in debate ---

[Lord McCrea of Magherafelt and Cookstown (DUP)]

I listened to what the Minister said and return to a point raised by the noble Baroness, Lady McIntosh. Do I take from the Minister’s remarks that there is going to be a review after the winter period that is covered by the present legislation? There are many small businesses scattered across the community in Northern Ireland that are totally dependent on electricity and have therefore met this volatility in energy prices. It is hard for them to plan for the future without knowledge of where we will go after the short period covered here. How long does the Minister think the review will take, because these businesses certainly need to plan for the future?

[Lord Callanan (Con)]

The noble Lord makes a very good point. As I said, we will conduct a review as soon as possible with the aim that it will be published before the end of the year. That will inform businesses of where we hope to go with the scheme after its expiry in April. That applies not just to businesses in Northern Ireland but to small businesses across the whole United Kingdom.

In conclusion, the Government remain committed to ensuring that consumers receive help with the rising cost of living and with energy costs. These regulations are vital to ensuring that support is delivered this coming winter. I commend this draft instrument to the Committee.

[Lord Teverson (LD)]

I thank the Minister for his reply to my point on fraud but, as he has not replied on holiday home lets, I assume that, if they are on business rates, they will get this benefit.

[Lord Callanan (Con)]

There are two aspects to this support. The price guarantee applies to domestic consumers and the EBRS applies to business consumers. If it is registered as a domestic premise, the home owner would receive this support in the same way as other owners of multiple homes would receive it—under the domestic scheme. If it is registered as a business, again they would receive a price discount. That applies to all businesses across the UK, with a few exceptions for some generators.

I take the noble Lord’s point about how this will probably go down badly in the areas concerned, but the scheme was rolled out at pace. We saw similar effects with the Bounce Back Loan Scheme during the pandemic. By the very nature of these schemes, if you do not spend years putting the scheme in place, going through every detail and exempting certain groups that might perhaps be undeserving of the support, there will be cases that most people regard as slightly unfair. That is in the nature of rolling something out quickly. We needed to get the support out quickly, which is why this has been done that way.

Motion agreed.

Climate Change (Targeted Greenhouse Gases) Order 2022

Lord Callanan Excerpts

Tuesday 15th November 2022 Lords Chamber

Moved by

[Lord Callanan]

That the draft Order laid before the House on 19 October be approved.

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

My Lords, this order was laid before the House on 19 October. It will amend the Climate Change Act 2008, expanding the definition of greenhouse gases under the Act to include nitrogen trifluoride, which I will refer to as NF₃. The order will make NF₃ a targeted greenhouse gas. This means that NF₃ emissions will be included within the scope of emissions presented to Parliament annually, and within scope of the full accounting period for the UK’s third and subsequent carbon budgets.

Tackling climate change is, of course, of the utmost importance to this Government. Internationally, we have taken a leading role to promote action through COP 26 and have considerable achievements to reflect on. Through our leadership, we delivered the Glasgow climate pact, wherein 197 countries reached a consensus on the need to urgently tackle climate change. Net-zero commitments now cover 90% of the world’s economy—up from 30% two years ago, when the UK took on the COP 26 presidency. We have continued to champion the need for action in the COP 27 conference taking place as we speak and will strive to ensure that the historic Glasgow climate pact is at the forefront of international co-operation, keeping alive the ambition of limiting the rise in global temperature to 1.5 degrees.

Domestically, we have achieved a great deal on our road to net zero already. Between 1990 and 2019, we grew our economy by 76% and cut our emissions by 44%, decarbonising faster than any other G7 country. Our domestic target is also consistent with the Paris agreement temperature goal to limit global warming to well below 2 degrees centigrade and pursue efforts towards 1.5 degrees centigrade.

Our legally binding carbon budgets are in line with the latest science and put us on a trajectory to achieve net zero by 2050. In June last year, the Government set the sixth carbon budget, for the first time incorporating the UK’s share of international aviation and shipping emissions, an important part of the Government’s decarbonisation efforts that will allow for these emissions to be accounted for consistently.

I will take a moment to talk through what this order will do. The Climate Change Act 2008 was the first of its kind and made the UK the first country to introduce a legally binding long-term emissions reduction target. This order updates the Act by introducing nitrogen trifluoride as the seventh targeted greenhouse gas under the Act. NF₃, primarily used in the production of electronics, is considered a potent contributor to climate change, and estimated to be 17,000 times more potent than carbon dioxide. This order will rightly introduce new duties on the Secretary of State to report on these harmful emissions.

Happily, I can assure the House that NF₃ emissions have been captured in UK greenhouse gas emissions national statistics and international reporting to the UN Framework Convention on Climate Change since 2015. NF₃ is also in scope of the UK’s nationally determined contribution under the Paris Agreement. This order will, however, ensure that the Climate Change Act and statutory reporting pursuant to the Act are aligned with our greenhouse gas inventories and international reporting practice, and that our domestic targets continue to align with the latest science.

I assure the House that this statutory instrument does not put our domestic targets at risk. Representing less than 0.0001% of total UK territorial emissions in 2020, this inclusion in carbon budgets does not make a material difference to the challenge of meeting them and can therefore be tackled without reviewing the levels of the legislated targets.

I place on record my thanks to the Committee on Climate Change for its advice in this regard. It similarly holds the view that the addition of NF₃ to the Act will not jeopardise our ability to meet our carbon budgets and net-zero target. Recognising the important role of measuring and reporting energy use and carbon data, the Government introduced a streamlined energy and carbon reporting framework on 1 April 2019. This reporting framework sets a light-touch reporting regime, setting out minimum mandatory emissions reporting requirements for all quoted companies and large businesses, which will, as a result of this order, now also cover NF₃ emissions. Due to the very low use of NF₃ in UK production, and as existing reporting methodologies, such as the widely used greenhouse gas protocol, already require NF₃ to be included in companies’ inventories, I assure the House that the impact on business from this instrument coming into force will also be minimal.

I place on record my thanks to the Administrations in Scotland, Wales and Northern Ireland, for their support during the consultation process in bringing forward this legislation. I am grateful to the Welsh Minister for Climate Change, who has also tabled a statutory instrument consent memorandum before the Senedd, stating that this order is the most practicable legislative vehicle for the provision in question to apply in Wales. My officials will continue to engage with their colleagues in the Welsh Government and I hope that, by the time this order leaves the other place, an SI consent Motion will have been passed by the Senedd.

The Government want to ensure that, as we transition the economy to net zero, the Climate Change Act evolves with the necessary developments in science and our international commitments. Therefore, I commend this order to the House.

[Lord Teverson (LD)]

My Lords, I have to admit that I never came across nitrogen trifluoride in my chemistry lessons, or at all before I read this SI. Although I very much accept the Minister saying that we have very small emissions in this area, as he says, it is some 17,000 times more potent than CO₂. It also lasts in the atmosphere for something like 500 years.

What I do not understand is how we measure these emissions. They are used in LCD screens. Although we do not manufacture many of those in this country, can the Minister explain whether this gas escapes in disposal of those electronic items, and whether we then measure that? Our consumption of those products is much greater than our production, so I would be interested to understand how that works and whether we have a bigger problem than he stated. I am not saying that this is the case but am trying to understand. If it is the case, do the Government have any means to manage this? Also, the SI mentions pensions. The Minister did not mention anything about this. Why are the regulations on those coming along later, as I understand it from the Explanatory Memorandum, rather than now?

The major thing that I want to understand, which the Minister mentioned, is the contradiction in the context given in the Explanatory Memorandum, paragraph 6.4 of which says:

“As of 2021, all international reporting practice has been to include NF₃ as a targeted greenhouse gas.”


However, paragraph 7.2 says:

“In 2013, the UNFCCC mandated the inclusion of NF₃ in all national greenhouse gas inventories”.


Therefore, I am rather confused as to whether this all happened in 2021 and will be reported in 2023 or whether we have done all this since 2013. It would be useful to understand that.

[Lord Lennie (Lab)]

My Lords, I thank the Minister for introducing this statutory instrument, and send apologies from my noble friend Lady Blake, who was due to be here but is currently supervising the birth of her latest grandchild—good luck with that.

The instrument extends the scope of emissions captured and reported under the Climate Change Act 2008 by including nitrogen trifluoride—I had not heard of it either, until yesterday when preparing for this—as a targeted greenhouse gas. Following on from the point made by the noble Lord, Lord Teverson, I point out that this means that NF₃ emissions will be included within the scope of emissions for the annual statement of emissions for 2021, to be published by 31 March 2023, the full accounting period for the UK’s third carbon budget—CB3—and for subsequent carbon budgets. I am not sure whether that is the answer, but that is my understanding of what we are dealing with.

We on this side of the House have no objections to this instrument, but we have some questions. The Climate Change Act requires the Secretary of State to reduce the amount of net UK carbon emissions to at least 100% below the 1990 level, and to set a carbon budget for each five-year period, to report each year in line with international reporting practices. As we have heard, NF₃ has a global warming potential that is 17,000 times or thereabouts greater than carbon dioxide, although I am not sure that you can smell it, taste it or see it. Therefore, it is right to include it in the annual emissions reporting.

The Climate Change Committee highlighted that the volume of current NF₃ emissions is so low that it is not likely to impact on achieving the 2050 target, as the Minister said in his introduction. However, I am interested in whether the Government have made any assessment of the likelihood of this changing and whether there should be any increase in NF₃ emissions. Also, what is likely to affect the increase in NF₃ emissions into the atmosphere?

As we are coming to the end of the third carbon budget period, I would appreciate it if the Minister could update the House on the current expectation going into the fourth period next year. Given that these budgets were set long in advance—the third in 2008 and the fourth in 2011—they require long-term policy planning, and while the Climate Change Committee in June this year stated that the prospects for meeting the fourth are better than for meeting the fifth and sixth, it has also highlighted the dependence on short-term macroeconomic trends and the extent to which emissions rebounded following the pandemic.

On a wider note, the Climate Change Committee’s report in June emphasised that delivery is undermining the Government’s policy ambition. What steps are the Government taking to address this and to ensure that the positive words are met with the required delivery actions? The report also emphasised that action to address the rising cost of living should be aligned to net zero, yet we have seen the Government favouring non-renewables, with their loopholes to the oil and gas levy, while continuing their apparent ban on onshore wind.

We have asked for this to be considered many times, but I would be interested to hear the Government’s assessment of the impact that these decisions will have on their ability to hit forthcoming carbon budgets.

[Lord Callanan (Con)]

First, I thank all noble Lords for their contributions to this debate. The points raised demonstrate the need for the Government to continue to press ahead with our world-leading climate goals.

The Climate Change Act was indeed a landmark piece of legislation globally, placing the UK at the forefront of climate change action. The Act requires the Government to ensure that our emissions reporting meets standards set internationally. I am proud that this Government are doing exactly that in bringing forward this legislation, and that was recognised by both speakers.

It is worth restating my thanks to the Committee on Climate Change for its support, advising on this legislation and its compatibility with those carbon budgets already set. I further thank our devolved Administrations for their responses to the consultation on this order and, as I said, to the Welsh Minister for Climate Change for her support in bringing forward the statutory instrument consent memorandum in the Senedd.

The Government are intent on delivering a UK economy that is greener, more sustainable and more resilient. Having handed over the presidency of COP 26, we will work with this year’s presidency, Egypt, to make sure that international commitments secured at COP 26 under the Glasgow climate pact are honoured.

The pact remains the blueprint for accelerating climate action in this critical decade to keep 1.5 degrees centigrade in reach. This is a pivotal moment to redouble our efforts, resist backsliding and ultimately go further and faster using the Glasgow and Paris commitments as the baseline of our ambition. Domestically, we will continue to keep abreast of developments and make improvements where needed to ensure that the Climate Change Act 2008 continues to provide the basis for our world-leading, legally binding emission-reduction targets.

The noble Lord, Lord Teverson, asked a very reasonable question: why are we only now reporting on NF₃ from 2020-21, when we have previously included it from 2013 in the Explanatory Memorandum? The Government have been reporting NF₃ emissions in their official statistics and as part of our international reporting obligations since 2015—with a two-year lag—when nitrogen trifluoride was included under the United Nations Framework Convention on Climate Change guidelines. This legislation extends that reporting to statutory reporting requirements to ensure that NF₃ emissions can be captured by our domestic as well as international reporting. Given the high potency of NF₃, we must recognise the importance of ensuring that we reduce its impact through its inclusion in our climate targets.

The noble Lord, Lord Lennie, posed a number of other questions. If the noble Lord will forgive me, I will come back to him on those in writing. I commend this order to the House.

Motion agreed.