Nuclear Regulated Asset Base Model (Revenue Collection) Regulations 2023

Lord Callanan Excerpts

Tuesday 28th February 2023 Lords Chamber

Moved by

[Lord Callanan]

That the draft Regulations laid before the House on 15 December 2022 be approved. Considered in Grand Committee on 22 February

Motion agreed.

Domestic Heat Pumps: Budget Underspend

Lord Callanan Excerpts

Tuesday 28th February 2023 Lords Chamber

[Baroness Sheehan]

To ask His Majesty’s Government what assessment they have made of the reasons for the underspend in the annual £150 million budget to install domestic heat pumps and other low-carbon alternatives to gas boilers.

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

My Lords, despite it being a challenging year for the energy sector, provisional data from Ofgem shows that we have received 14,100 applications so far. Industry has reacted positively to the scheme during its first year, with suppliers developing competitive offers alongside the grant. The Government recently launched a targeted marketing campaign to increase public awareness. We will consider options such as increased marketing, as well as keeping grant levels under close review.

[Baroness Sheehan (LD)]

My Lords, I thank the Minister for his Answer. We know that heat pumps are the only show in town today that can deliver low-carbon domestic heating cheaply and quickly. In 2022, a whopping 20 million heat pumps were installed across 16 EU countries, yet our Government fall short time after time in delivering even the basics needed for success, such as home insultation measures, a skilled workforce and improved public awareness. What plan do the Government have to move their woeful current rate of under 10,000 in almost a year on the boiler upgrade scheme to their target of 600,000 a year by 2028? Without a plan, the target is pie in the sky.

[Lord Callanan (Con)]

The noble Baroness obviously did not listen to the Answer that I gave her, because I just said that we have received 14,100 applications for the scheme. But this is not the only scheme by which heat pumps are installed. There are those that are installed by the private sector, and they are already starting to be installed in many new properties. A range of our other schemes—the social housing decarbonisation fund, home upgrade grant, et cetera—also support the installation of heat pumps.

[The Lord Speaker (Lord McFall of Alcluith)]

My Lords, the noble Lord, Lord Campbell-Savours, will participate remotely.

[Lord Campbell-Savours (Lab) [V]]

My Lords, with heat pump technology plagued by misinformation, can the Government not sponsor a network of privately or commercially occupied exhibition homes with air source heat pumps installed, where potential investors can be advised on the efficacy of their installation and the need for accompanying measures of draught and insulation control, without which they are ineffective and a waste of money? A well-designed installation will give 3 to 4 kilowatts of heat output per kilowatt of mains supply. That is a good return.

[Lord Callanan (Con)]

I agree with the noble Lord’s figures on the efficiency of heat pumps. He will find that there are a number of show properties around the country already; a lot of the installers or manufacturers already have showrooms demonstrating the technology for prospective purchasers.

[Lord Howell of Guildford (Con)]

My Lords, I declare an energy interest, as in the register. Further to this and the last Question, do the Government accept that, with their full commitment to future renewables, the removal of all gas heating and cooking, and millions of new electric vehicles, we will see an enormous need not only for more generating plant but, more importantly, for a completely new electrical transmission system nationwide? It is estimated that the burden on the transmission system will increase 400%, when it is already at 100% and overloaded. Do we have the plans in place to cope?

[Lord Callanan (Con)]

My noble friend makes a very good point: huge investment is required to both upgrade and reconfigure the transmission grid. We are moving away from a system based on point loads to a much more diversified system of renewables, et cetera. The point is valid. Billions of pounds are being invested in the grid and we have a plan to upgrade it. It is worth saying that there will be ongoing demand for gas; it will be declining, but we will still be using it.

[Lord Vaux of Harrowden (CB)]

My Lords, we have just heard claims that are often made about heat pumps—that they generate four to five times the energy you put in. That is only in ideal circumstances, typically where the outside temperature is 15 degrees and the water temperature is about 38 degrees. The reality is that you get out about two and a half times the energy you put in. That is a good result, but not if you are expecting four to five times. I worry that these unrealistic claims of real-life performance may undermine consumer confidence and reduce the uptake of heat pumps. Can the noble Lord please ensure that real-life performance is always made clear and included in the MCS database?

[Lord Callanan (Con)]

The noble Lord makes a very good point. Performance will vary depending on the temperature outside. It is also worth saying that heat pumps have been installed extensively across Europe, including in countries which typically have much lower ambient air temperatures than the UK does, such as Norway. But his point is valid: we need to make sure that people are given accurate information.

[Lord Foulkes of Cumnock (Lab Co-op)]

Would the noble Lord, Lord Callanan, be a little less pedantic than his noble friend Lord Murray? Since the noble Lord, Lord Callanan, mentioned Ofgem in his initial reply, could he explain why Ofgem wants us to pay more for all our heating, despite the wholesale cost of gas reducing? What are the Government going to do about this?

[Lord Callanan (Con)]

I thank the noble Lord for a question not at all related to heat pumps. He makes a valid point: the price cap has been reduced in line with the reduction of wholesale prices. At the same time, there is a gap in funding because of government support. We have—the taxpayer has—been paying about one-third of people’s energy bills through the winter. That support is unsustainable in the longer term and is starting to be withdrawn, but I am sure the Chancellor is looking at this very closely.

[Lord Greenhalgh (Con)]

My Lords, is it not fair to say that implicit in the last two Questions is the rather disappointing uptake in the number of homes putting in heat pumps? I declare that I put in a gas boiler recently and got change from £5,000. Have the Government done any work on the point raised by my noble friend Lord Forsyth on the cost for the average punter to change their home? The reality is that the markets determine what people put in. We need to look at the actual cost of installing a heat pump. If we imagine a scenario where 10% of new builds have heat pumps and the retrofit programmes go in great guns, what would it cost to install one of these things? Have we got research? If the Minister cannot answer me directly at the Dispatch Box, will he please write to me with a detailed response?

[Lord Callanan (Con)]

I can answer my noble friend directly: we have done lots of research on these matters. I will give him a couple of examples of existing offers. British Gas has a starting price for an air source heat pump of £2,999 and Octopus Energy is offering one for £2,500 including the upgrade grant that we are offering. It obviously depends on the circumstances of the property. There are huge number of variable factors, such as how many radiators you need—whether your existing radiators can be reused will depend on their size. There are a lot of different factors to take into consideration, but his point is ultimately valid, in that we have to make sure that the prices of heat pumps come down over time. As consumers get more used to them and volumes go up, I think that they will.

[Baroness Worthington (CB)]

My Lords, I request a similarly detailed answer from the Minister on the costs of the hydrogen trials. As he will know, I do not support this way of moving forward. However, had we taken the same approach to heat pumps, ground source heat pumps in particular, how much would it have cost us per household for 2,000 homes? How much are we spending per household on the hydrogen trials?

[Lord Callanan (Con)]

As the noble Baroness is aware, we have two potential trial villages at the moment. We will make a decision later this year on which one will be selected, assuming that we get the powers to do so in the Energy Bill. We are still looking very closely at the costs of the trial. They are still to be determined, so I cannot give her an answer yet. The two gas networks are looking at the costs as we speak.

[Lord Lennie (Lab)]

My Lords, in addition to the underspend highlighted in the Question by the noble Baroness, Lady Sheehan, about £2.1 billion remains unspent of the £6.6 billion promised in the Conservative manifesto to be used on energy efficiency and decarbonisation of heat. The think tank E3G puts this down to a lack of effective policies on domestic insulation and decarbonisation. Can the Minister say if and how the Government intend to deliver on that manifesto promise?

[Lord Callanan (Con)]

The noble Lord will have to have a little patience and wait for the Chancellor’s spending announcement. As I have said before, there has been no lack of government commitment in this area: we are spending £6.6 billion over this Parliament, and we have already had another £6 billion committed by the Chancellor for energy-efficiency schemes from 2025. It is going well.

--- Later in debate ---

[Baroness Parminter (LD)]

My Lords, one of the reasons for the so far disappointing uptake of the welcome boiler upgrade scheme is the lack of consumer awareness. Even the Minister’s own figures from what was BEIS said that 80% of people have little or no awareness of heat pumps. He mentioned that there will be further marketing: my understanding is that this will be ads on search engines and social media. Does he really believe that £300,000 spent is sufficient for the scale of the challenge and to make this welcome scheme work?

[Lord Callanan (Con)]

It is certainly a good start. I was talking to officials about it earlier today. It started only in the middle of January and has already driven about a 62% increase in traffic to the GOV.UK website that provides information about heat pump offers. As the scheme moves into its second year, we will move into what further marketing activity we can do.

I will go back to the question from my noble friend, who I believe was going to ask me about the Swaffham Prior scheme. For those in the House who are not aware, Swaffham Prior is a village in Cambridgeshire. I suspect that it was in his constituency—

[Lord Lansley (Con)]

No.

[Lord Callanan (Con)]

Anyway, I have visited it, and it is a great example of a community coming together to install heat pumps and a domestic heat network, supported by government funding. It is an excellent project and is going extremely well. I give my congratulations to Cambridgeshire County Council and Swaffham Prior on implementing it.

Heat and Buildings Strategy: Gas Boilers

Lord Callanan Excerpts

Tuesday 28th February 2023 Lords Chamber

[The Lord Bishop of Oxford]

To ask His Majesty’s Government what assessment they have made of progress on their Heat and Buildings Strategy, published on 19 October 2021; and whether they have any plans to change the date of 2025 for banning the installation of gas boilers in new-build homes.

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

My Lords, the Government have made good progress towards their target. Between October 2021 and November 2022, 240,300 measures were installed through Help to Heat schemes. The building regulations will continue to set a performance-based standard rather than banning specific technologies. However, to ensure that new homes are carbon-zero ready, we plan to ensure that the future homes standard is set at a level that will effectively preclude new homes being built with fossil fuel heating.

[The Lord Bishop of Oxford]

My Lords, I thank the Minister for his Answer and draw attention to my membership of your Lordships’ Environment and Climate Change Committee. I note that in 2020 the Government brought forward, in a very welcome way, the date for phasing out new petrol and diesel cars from 2035 to 2030, which has had a significant positive effect on that market. Has further consideration been given to bringing forward to 2030 the present date of 2035 for prohibiting the installation of new gas boilers to further encourage the rapid development of low-carbon domestic heating?

[Lord Callanan (Con)]

I can correct the right reverend Prelate. We have not set a date of 2035 for prohibiting the installation of new gas boilers; we have said that this is our aim but, crucially, it will depend on the availability of cheap alternatives for people to heat their homes with.

[Lord Teverson (LD)]

My Lords, the overwhelming evidence is that hydrogen will never work in domestic heating. Will the Government stop their trials of hydrogen villages and concentrate their efforts where hydrogen really can make a difference?

--- Later in debate ---

[Lord Callanan (Con)]

The noble Lord is right to an extent. At the moment, hydrogen heating for homes is an unproven technology, which is why we need to carry out trials and research to ascertain whether it is a viable technology. In the meantime, we know that heat pumps and electrification work and are operable technologies, which is why we support them.

[Lord Naseby (Con)]

My Lords, I remind my noble friend the Minister that there are millions and millions of terraced houses throughout the United Kingdom. It is absolutely impossible for them to have heat pumps. Against that situation, would it not be much more sensible to ask the gas industry to produce, in the interim, new boilers that are less difficult in relation to zero carbon? In addition, the point that was just made about hydrogen seems equally relevant to me.

[Lord Callanan (Con)]

I am afraid that I do not agree with my noble friend. It is perfectly possible for heat pumps to be used in terraced properties. The thing about the UK is that there is a multiplicity of different property types and flavours; not all solutions will be appropriate for all properties, so we need to look at a number of options. We also need to continue to improve the efficiency and effectiveness of gas boilers. In whatever scenario, there will still be millions of gas boilers fitted in existing properties in the next few years; there is more that we can do to improve existing efficiencies.

[Baroness Jones of Whitchurch (Lab)]

My Lords, one of the main reasons given for the relatively low take-up of heat pumps is that there are not enough skilled engineers to install them. What work is being done to retrain existing gas boiler installers so that they can install this new technology, speed up installation and help us meet our carbon targets?

[Lord Callanan (Con)]

The noble Baroness makes an important point. We are rapidly increasing the number of available skilled installers. I have opened a number of schemes in both the public sector and the private sector. In September we launched the home decarbonisation skills training competition, a £9.2 million fund for training people who work in the energy efficiency, retrofitting and low-carbon heating sectors. Of course, the industry itself is also investing in training capacity; for example, Octopus Energy is investing £10 million in a new training centre and Ideal Heating has announced a new £1 million training centre near Hull. So there is a combination of public and private sector investment in this area.

[Baroness Boycott (CB)]

My Lords, as a further incentive for people to change their energy sources, will the Government give consideration to an energy-saving stamp duty under which energy-efficient homes pay an adjusted lower rate, with a rebate paid to new home owners who improve the energy efficiency of their home within two years of purchase? Will they also consider reintroducing the landlord’s energy saving allowance, which used to encourage landlords to undertake energy-efficiency measures but was abolished in 2015?

--- Later in debate ---

[Lord Callanan (Con)]

The noble Baroness will be aware that these are matters for the Chancellor. As a Minister, I have long observed not getting into predicting taxation policy. I will certainly pass her suggestions on to the Chancellor.

[Lord Forsyth of Drumlean (Con)]

My Lords, further to the questions from the right reverend Prelate and my noble friend Lord Naseby, I was involved in raising funds to refurbish our rectory. The church insisted on putting in a heat pump; because of the nature of the property, it cost nearly £40,000 just to insulate it in order to make the heat pump work efficiently. Heat pumps are not suitable for all buildings, which is why it is essential that we look for an alternative.

[Lord Callanan (Con)]

I partly agree with my noble friend. It is a good thing that the rectory was insulated anyway, whatever kind of heating was installed in it. Heat pumps obviously work best in well-insulated properties, but you can now get high-temperature heat pumps that work in all scenarios. I agree with my noble friend that, as I said earlier, there is a multiplicity of property types and different technologies will work in different properties.

[Lord Browne of Ladyton (Lab)]

My Lords, from the evidence that it received, the Environment and Climate Change Committee, of which I was a member at the time, concluded in its inquiry on the boiler upgrade scheme that a shortage of relevant skills is a major barrier to the take-up of the boiler upgrade scheme and low-carbon heat. The microgeneration certification scheme, which certifies whether companies are capable of fitting renewable heat products, gave evidence to the committee that the three-year duration of the scheme and

“the delayed release of the market-based mechanism to support heat pump growth”

did not

“provide sufficient long-term certainty to grow the sector and encourage retraining.”

Despite this investment in training, does the Minister agree with the MCS that a long-term policy of decadal length is required to create a stable policy landscape to encourage investment in training? If he does, what do the Government intend to do about that?

[Lord Callanan (Con)]

The noble Lord will be aware that the next Question is on the boiler upgrade scheme; his question might perhaps have been more appropriate there, but I agree with him. The Answer I gave earlier shows what we are doing to invest in upgrading existing skills. It is a long-term job over decades, as the MCS correctly said. I was at a reception with the MCS last week, talking to it about this very issue.

[Baroness Worthington (CB)]

I agree with the Minister in his statement that there is a multiplicity of solutions for decarbonising heat. One very promising technology is the use of heat loops, or networked ground source heat pumps. These are much more efficient than even air source heat pumps and are an excellent technology that we should be trialling, perhaps instead of hydrogen.

--- Later in debate ---

[Lord Callanan (Con)]

I am aware of the noble Baroness’s scepticism about hydrogen—we have discussed it a number of times. I agree with her about ground source heat pumps. There are some great, innovative UK companies developing them and we support them under the boiler upgrade scheme.

[Lord Lennie (Lab)]

My Lords, the Committee stage of the Energy Bill started in September 2022, and we still have not reached Report. Is this delay down to the Government adopting the Labour Party’s suggestions in Committee, which would make targets of the future homes standard and ban the installation of gas boilers in new homes? I guess from the Minister’s response so far that this is not the case. Can he say what is causing the delay?

[Lord Callanan (Con)]

I am sorry to tell the noble Lord that it is nothing to do with the Labour Party’s policies. My responsibilities do not extend to predicting the business of this House. I am sure that the Chief Whip has taken careful note of the noble Lord’s comments.

[Baroness Parminter (LD)]

My Lords, permitted development rights are still insisting that heat pumps are sited a metre away from the boundary of properties. Given the Minister’s welcome commitment to heat pumps and to getting these new homes with low-carbon solutions, what plans do the Government have to update PDR to ensure that heat pumps can play the role that we need them to?

[Lord Callanan (Con)]

One of the factors of the UK’s planning system is that different interpretations are given by different local authorities. I suspect that certain Members on the Opposition Benches would criticise us if we dictated to local authorities how they should implement their own planning policies. Clearly, we need to work with them. As I said earlier, there is a huge range of different areas and property types. Some local authorities are quite permissive in what they will allow and some are not, but we continue to work with them to make sure that they are abreast of all the latest guidance.

Retained EU Law (Revocation and Reform) Bill

Lord Callanan Excerpts

Committee stage
Thursday 23rd February 2023 Lords Chamber

[Baroness Crawley (Lab)]

My Lords, I shall speak to Amendment 145 in the name of the noble Earl, Lord Lindsay. This amendment, to which my name has been added, has the backing of the Safeguarding Our Standards consumer protection campaign and continues the theme of other exclusion or carve-out amendments in this group, in that it would ensure that the Bill will not apply to any regulations relevant to the Government’s forthcoming digital markets, competition and consumer Bill. Many believe that this DMCC Bill represents the most significant reform of UK competition and consumer protection law in years.

The noble Earl, Lord Lindsay, who cannot be here today, and I work closely together with the Chartered Trading Standards Institute, of which he is president and I am a former president. We thank both CTSI and Which? for their support and advice on this amendment. In the Autumn Statement, the Government committed to bringing forward the DMCC Bill in this Session of Parliament, and it would be good to know from the Minister when that Bill will be published—it is supposed to be imminent. It will provide important reforms to competition and consumer protection law, including providing the Competition and Markets Authority with significant new powers to promote and tackle anti-competition practices and, indeed, updating retained EU law, such as the Consumer Protection from Unfair Trading Regulations 2008, with measures to combat fake reviews and subscription traps. It is likely that businesses around the country will be reviewing their current approach to sales and marketing, given the expected new powers the CMA will impose as far as fines are concerned in relation to consumer law breaches through that Bill.

However, there is a very serious risk that the REUL Bill in front of us today will cut across what the Government are trying to achieve through the digital markets, competition and consumer Bill. That is why we believe that regulations that are in scope of the digital markets, competition and consumer Bill should be excluded from the retained EU law Bill. There is already a precedent for this, as the Financial Services and Markets Bill currently going through Parliament, which has already been talked about today, is excluded from the scope of the retained EU law Bill to avoid the risk of the two different pieces of legislation contradicting one another. We have not yet had a proper answer as to why this precedent is still there. The organisation Which? is, however, on record as arguing that the relevant clauses and schedule in the FSM Bill need to be improved to ensure that decisions about any remaining financial services retained EU law are accompanied by effective consultation as well as parliamentary and stakeholder scrutiny.

I urge the Minister to look carefully at this amendment in light of the need for robust competition and consumer law going forward in a very difficult economic time for many people and businesses.

[Lord Callanan (Con)]

My Lords, this debate has demonstrated what we already knew: there is retained EU law across all sectors of the economy, some of which is out of date and unfit for purpose. The Government have taken a sensible approach by requiring that this retained EU law is reviewed and updated equally and in the same timeframe. This makes sure that no specific policy areas get left behind. We have had essentially the same debate on all groups—with Opposition Members highlighting certain areas and saying, “This is very important”, and of course we agree with them, then asking for specific carve-outs, which is impossible until we have done the work reviewing it.

We reject Amendment 6. We think it is unnecessary and ask that it be withdrawn. The amendment would see legislation on artists’ resale rights excluded from the sunset provision. However, the UK Government have already committed to ensure that the necessary legislation to uphold the UK’s international obligations after the sunset date will remain in place. This can also be accommodated using the broader powers contained in the Bill. Again, we contend that there is no need for any carve-outs for specific policy areas.

Similarly, I disagree with the noble Lord’s additional Amendments 13 to 15, which would put various copyright computer programs and database regulations outside the scope of the sunset. The Government believe that an effective and efficient intellectual property system—

[Baroness Brinton (LD)]

I apologise, I was not quite clear about something the Minister said. He made reference to the issues relating to the creative industries being covered by broader powers. Could he help the Committee by explaining what those broader powers are?

[Lord Callanan (Con)]

There are a number of broader powers in different pieces of legislation. I can get the noble Baroness confirmation in writing, but clearly if it is retained EU law it is also subject to the powers in this Bill.

As I was saying, an effective and efficient intellectual property system is fundamental to the Government’s economic ambition. In common with the rest of the Committee, we continue to support a strong and effective IP system that delivers for all those who rely on it. As part of that, assessing retained EU law on intellectual property as a consequence of this Bill will only help to ensure that this remains the same.

Ministers across government are already working closely with their devolved Government counterparts on their retained EU law plans, taking decisions on whether to preserve, reform or revoke legislation, and developing delivery plans to ensure that all necessary action is taken well before the sunset date. Once this process is complete, the Government will update the House on their intentions for the areas where they will focus on reform.

Finally, I turn to Amendment 145, tabled by the noble Earl, Lord Lindsay. A digital markets, competition and consumer Act is not expected to exist when this Bill receives Royal Assent. As such, it is not possible for this Bill to reference that Act if it does not exist. The powers in the Bill will be used as necessary to ensure that all reforms proposed by a forthcoming digital markets Act will operate as intended. I hope that has provided noble Lords with reassurance and that the noble Lord will feel able to withdraw his amendment and the others will not be moved.

[Baroness Wheatcroft (CB)]

Forgive me for interrupting at this late stage, but could the Minister tell the Committee how much time he thinks will be necessary to update the House on what is happening to the 4,700—and growing—pieces of legislation?

[Lord Callanan (Con)]

If the noble Baroness has been listening to the debate so far, she can reference the dashboard with the 4,700 pieces that are listed. As has been said in previous debates—we have been through this at great length now—the dashboard will be updated as the Government’s intentions, once this review has been carried out, become clear.

[Baroness Wheatcroft (CB)]

The Minister said that, once decisions had been taken, he would update the House on the outcome for the 4,700 pieces of legislation. It was that I was querying.

[The Earl of Clancarty (CB)]

The Minister mentioned that a decision had been made to continue artists’ resale rights. Where was that original decision made and will it continue in the same form that it is now?

[Lord Callanan (Con)]

The Government have signalled our general intention and the importance of the IP protection regime, which of course involves artist resale rights. We have stated our intention for that regime to continue, and we will of course update the House as soon as we have more information.

[Baroness Brinton (LD)]

My Lords, I thank the Minister for his reply. Like other noble Lords, I thank all three Ministers for responding to a Committee that is clearly concerned about what is going on in the Bill. The hour is late, so I will be brief.

The noble Earl, Lord Clancarty, was right to be concerned about the consequences for artists after 1 January next year. I was particularly concerned about the definition of “broader powers”, and I recognise that other noble Lords have made comments or asked questions about what is happening first. The real message from this is that it is a great shame that we are rushing a group of amendments on the creative industries, which are vital to the growth of UK plc. None of the Bill seems to deal with law that is out of date, and that needs to be looked at.

The message for the day from all these groups is that the Government really should consider pausing the Bill. On every amendment we have debated today, there has been concern about the order of information coming out, so that Parliament, stakeholders or consumers can be aware of what is going on. It feels like this is all happening back to front. So I hope that the Government will take that seriously.

[Lord Callanan (Con)]

I will issue a clarification: it is actually 3,700 pieces of retained EU law, not 4,700, as I inadvertently said.

[Baroness Brinton (LD)]

I am grateful for that clarification, but it exactly makes the point that every noble Lord made this afternoon.

Retained EU Law (Revocation and Reform) Bill

Lord Callanan Excerpts

Committee stage
Thursday 23rd February 2023 Lords Chamber

[Lord Collins of Highbury (Lab)]

The noble Lord may want to re-open the debate on the referendum and EU membership, but I do not. I want to focus on people’s rights now; that is the important point. That is why I appeal, across the House, to people who may have supported Brexit and people who did not. I think the House can unite on this sort of issue. As we have heard, this is not the way to do it; there is a better way to review retained EU law and a better way to create certainty and understanding on the part of the public.

That is why these amendments are so critical, in that they ask for specifics. I am pretty certain that, sadly, the Minister will give us the same mantra that we heard in the other place: “Trust us, this is a process; we have a time constraint.” Why they have put this time constraint in place, God only knows. But the Minister will not give us an idea about the specifics, and that is really important.

As my noble friend Lady Crawley, the noble Lord, Lord Fox, and others have mentioned, this is not just about regulations; this is about case law as well. That is vital. I cannot beat the illustration of my noble friend Lady O’Grady. All Governments of all colours have had to be persuaded to give these rights. It has not been an easy journey for workers, particularly women workers, and that is the other thing about this. Hard-won rights, particularly on equal pay and equal rights at work, are under threat here. That is something that the public need to hear very firmly.

I conclude with a simple request of the noble Lord, Lord Callanan. He has assured us that UK employment rights do not depend on EU law, and we have heard the arguments in this debate. Can he confirm which of the regulations that I have listed in Amendment 40 are not covered by Clause 1? Can he give us that guarantee? I suspect that he will not; he will make some excuse. But this will not go away; this debate will continue because the public out there need to know whether they can trust this Government. I suspect that they will answer no; what they want is Parliament to decide.

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

My Lords, I thank everybody who has contributed. I suppose we had to have the debate in principle at some stage, and we have had it on Clause 1. I will attempt to provide some reassurance to noble Lords. I suspect that those who think that somehow the Government have malign intentions will not be convinced, but let me try my arguments anyway.

As my noble friend Lord Frost made clear, this is of course an enabling Bill. The measures in it, including the sunset, will provide for UK and devolved Ministers to make decisions to review, amend or repeal retained EU law as they see fit. I agree with my noble friend Lord Frost’s point. I understand that the Opposition will want to portray all EU law as perfect and ideally suited for the UK’s circumstances, but most of my time in the European Parliament was spent during the period of the last Labour Government. There were numerous occasions when UK Ministers, and civil servant at the behest of UK Ministers, came to give me examples of where the regulations were not suited to the UK and not in the UK’s interests. Many times, as a Conservative, I agreed with them, and we did our best to change or amend them. Often, we were not successful. This legislation gives us the opportunity—

[Lord Fox (LD)]

My Lords—

[Lord Callanan (Con)]

I will let the noble Lord come back in a moment, but let me make a little progress—I might answer some of his points, you never know.

Let us not pretend that it is all perfect. I accept that the Opposition have a principled difference with us on how we go about this process, but at least let us have the debate and, I hope, make some progress. The sunset is not intended to restrict decision-making; rather, it will accelerate the review of retained EU law across all sectors, as my noble friend Lord Hamilton made clear. The Bill will allow for additional flexibility and discretion to make decisions in the best interests of this country.

I start with Amendment 1, in the name of the noble Lord, Lord Fox. I take this opportunity, as I have done many times in this Chamber before, to reassure him and the noble Baroness, Lady Burt, and the Committee, that the repeal of maternity rights is not and never has been the UK Government’s policy. As I have said many times before, our higher standards in this area were never dependent on our membership of the European Union. Indeed, the UK provides stronger protection for workers than is required by EU law. I have made this point many times, and the opposition parties do not seem to want to accept it.

[Lord Fox (LD)]

My Lords—

[Lord Callanan (Con)]

I am going to make this point and then I will allow the noble Lord to intervene.

Our high standards were never dependent on our membership of the European Union. We provide stronger protection for workers than is required by EU law, both under previous Governments and under this Government. Let me give the Committee some examples. We have one of the highest minimum wages in Europe. On 1 April this year, the Government will increase the national living wage by 9.7% to £10.42—higher than most other European countries. UK workers are entitled to 5.6 weeks of annual leave, compared with the EU requirement of four weeks. We provide a year of maternity leave, with the option to convert to shared parental leave to enable parents to share care, whereas EU maternity leave is just 14 weeks. The right to request flexible working for all employees was introduced in the UK in the early 2000s; the EU agreed rules only recently and will offer the right to parents and carers only. The UK introduced two weeks of paid paternity leave in 2003; the EU has legislated for this only recently. Let there be no doubt about the commitment of this Government to enhancing and providing for workers’ rights.

[Lord Fox (LD)]

I am afraid I can wait no longer. I am somewhat surprised that I still do not really understand what the Minister is saying. We did not put on the dashboard the regulations and laws set out so ably by the noble Lord, Lord Collins, and by my noble friend and others; the Government put them on the dashboard. If the Minister is saying that these do not affect British employment regulations, how can that be true? It is simply not true. What the Minister is saying is wrong. They are on the dashboard and they will sunset if nothing is done. They affect day-to-day employee rights, and therefore the Bill potentially affects those employee rights because these regulations are on the Government’s dashboard.

[Lord Callanan (Con)]

They are on the dashboard if they are retained EU law. I noticed that, in all the statements and speeches from Members opposite, the words “if” and “could” were doing an awful lot of heavy lifting. I accept that there is no trust from the Opposition in the intentions of the Government and that they want to make their political attacks. The reason I outlined UK employment rights and standards was to demonstrate the commitment of this Government to those rights. The point that the noble Lord, Lord Fox, made earlier is essentially correct: while we have some very high standards, of which we are proud and will maintain, there is a complicated mishmash of laws in this area between some elements of EU and domestic law.

[Lord Kerr of Kinlochard (CB)]

My Lords—

[Lord Callanan (Con)]

If the noble Lord will sit down, I will come to him in a second. I will make this point and then I will give way.

UK rights were provided in the complicated mishmash of UK law, with higher standards often based on minimum standards and provisions that were in EU law originally. That is why they have been included on the dashboard. We will conduct a review of all these regulations—which this legislation provides for—and we will do so in the context of the high standards that the UK already has.

[Lord Kerr of Kinlochard (CB)]

I think I understand the noble Lord’s argument, and that he is therefore going to end by saying that he accepts Amendments 1, 23 and 40. If our standards are so high, there can be no question of the Government reducing our standards or amending or sunsetting the legislation spelled out in Amendments 1, 23 and 40. If the Minister is not prepared to accept these amendments, will he explain why, if they are in the Government’s view good, they have to be in doubt until the end of the year and then possibly dead?

[Lord Callanan (Con)]

As the noble Lord knows very well, that is not what I am saying. The reason that I am not saying that goes back to two points made earlier in the debate. First, there is a complicated mishmash of rights and responsibilities across these particular laws, but we will maintain our high standards. Secondly, it goes back to the argument the noble Lord, Lord Fox, made about interpretive effects. If the interpretive effects are being abolished to bring them in line with the rest of UK common law and to reduce some that have the status of primary legislation to secondary legislation, we need to review the whole panoply of employment law as a whole—which we will do, but we will do it in the context of the high standards that we have and will maintain. That is the point I am making

[Lord Hope of Craighead (CB)]

I am very grateful to the noble Lord for giving way. It is a question of the sunset and whether one can achieve what the Minister is suggesting in time. A lot of the worries we have are that the Government are trying to move too fast. We are trying to create a new rulebook for ourselves. I quite understand the desire for that, and I quite see the value of a timetable, because, if you do not have a timetable, things will drift into the far future, which is not desirable in view of the objective the Government have. However, they are trying to move too fast. The more we debate these issues, the more complicated they become, and the more people have to be consulted. That is the basic problem. I hope very much that, when we come to look at the sunset, the Minister will take account of these things and be a little more relaxed about the date for the sunset, otherwise we will be moving far too fast and destroying so many rights because of mistakes and misadventures.

[Lord Callanan (Con)]

The noble and learned Lord knows I have tremendous respect for him and there is a great deal of sense in what he says. If we are getting into a discussion about the sunset, it is my view and the Government’s view that we can do all of this, given the current sunset. Work is under way across Whitehall in the new business department on employment law and in Defra on environmental regulations to do exactly that.

[Baroness Young of Old Scone (Lab)]

My Lords—

[Lord Callanan (Con)]

I will give way in a second; let me answer the previous point before the noble Baroness makes another. I think it is perfectly possible and work is under way in the business department and in Defra, which have many of these retained EU laws, to do precisely that. As Committee proceeds, I hope to be able—maybe I will not be able, but I will do my best—to convince the Committee that we will be able to do this in time, with the given sunset. I give way to the noble Baroness.

[Baroness Young of Old Scone (Lab)]

Would the noble Lord perhaps admit that the only way in which the timetable can be met is by not undertaking the sort of consultation we have come to expect, and indeed enjoyed, during the passage of all this legislation over many years, which has resulted in it being EU retained legislation? My personal sphere of knowledge is the work in Defra. I am desperately worried that many of the things emerging from Defra that are purportedly a replacement for EU law are not being portrayed as that when they come out, and they are not being consulted on in any way whatever. I do not believe that the EU retained law workload can be done by Defra in time without it being a fait accompli by Ministers that is not consulted on and does not go through a process in this House that allows us to have any influence on it. So I would like the Minister to assure us that there will be a full process of consultation that can be contained by the deadline.

[Lord Callanan (Con)]

“Yes” is the answer to the noble Baroness’s question. All new regulations will be subject to a period of consultation. I have to say, with great respect, I would have a little more sympathy for the noble Baroness’s argument had any of these regulations been introduced into UK law in the first place with a period of consultation—but, of course, we all know they were not. Many of the people complaining now that these regulations are so valuable never said anything at the time about the process by which they were introduced. But I accept that is a difference of principle between us.

As I said, our high standards do not and never have depended on EU law. Ministers will have the power to preserve such retained EU law from the sunset where appropriate. Building on some of the earlier points made by the noble Baroness, Lady Humphreys, this includes Ministers in the devolved Governments. As such, it is the Government’s contention—I suspect it is one that will not draw much sympathy from the Opposition—that there is simply no need for any carve-outs for individual departments, specific policy areas or sectors, particularly when I have been able to reassure the Committee on the principles of maternity rights and employment law as a whole.

[Baroness O’Grady of Upper Holloway (Lab)]

My Lords, one reason we have such concerns about the timetable is that, as we have heard in exchanges today, there is no agreement on the evidence base we are working to. Part of solving that would be going back to the drawing board on the impact assessment, which, as we heard, was red rated and deemed not fit for purpose. Could the Minister explain at what point we will be looking again at that impact assessment and dealing with the criticisms of the one that received the red rating? What impact could that have on the timetable? If we could agree more and have dialogue on the evidence base, perhaps we might be able to make more progress.

[Lord Callanan (Con)]

I totally understand the point the noble Baroness is making. I have looked at this—indeed, I was the Minster responsible until very recently for the Regulatory Policy Committee, which does some fantastic work. But of course it is very difficult to produce an impact assessment for what is essentially an enabling framework Bill. I think what would be more relevant to the noble Baroness, and what she would be more interested in seeing, are the detailed impact assessments that will be produced on the particular regulations. If regulations are just carried on and essentially replaced, there will be no need to bring an impact assessment because there is no change. However, if change is proposed, of course the relevant departments will produce impact assessments for those particular regulations. I am sure the noble Baroness will have great enjoyment in reading those.

[Lord Davies of Brixton (Lab)]

My Lords, perhaps the Minister will take on board that, when he says there is no need for carve-outs, his own Amendment 45 creates a carve-out for financial services. We can have a substantial debate on that issue when we get to that amendment, but the idea that you do not have carve-outs is clearly wrong; the Government’s own amendment creates one.

[Lord Callanan (Con)]

We will get to that debate on those technical amendments later.

[Noble Lords]

Oh!

[Lord Callanan (Con)]

I think it was the noble Lord, Lord Davies, who talked about the Financial Services and Markets Bill, which repealed a number of EU regulations and produced regulations that were more suitable for the UK.

Moving to the specific amendments we are debating, Amendment 23 relates to the transfer of undertakings regulations. It is up to Ministers and the devolved Governments to decide what to do on specific pieces of policy. This Bill, as a framework Bill, creates the tools for departments. Plans will be approved by a Minister of the Crown, or the devolved authority where appropriate, and will be shared when that work has been done, given that it is an iterative process that is still ongoing. As part of the retained EU law programme of work, as I said earlier in response to the noble Lord, Lord Fox, the Government are conducting a comprehensive review of all retained EU employment law in the context of the very high standards the UK already has to ensure that our regulations are specifically tailored to the needs of the UK economy, are workable in UK common law and help to create the conditions for growth and investment. That review includes the transfer of undertaking protection of employment regulations.

[Lord Collins of Highbury (Lab)]

Can I ask a simple question on TUPE? My fear is that we are not getting straight answers. Does the noble Lord think that it sets a good standard to protect workers in difficult circumstances? If he does, where does it need to be improved? If he is unable to answer those two questions, what are we to conclude?

[Lord Callanan (Con)]

I have already given the noble Lord examples of where UK worker standards and employment regulations are superior to the base standards of the EU. I cannot give him a specific answer to his question, as he well understands, because that work is ongoing, but it is ongoing in the context of the high standards that we already have. If any changes are proposed to that regulation—it may be that the change of interpretive effect will require some ongoing changes to the regulation; I do not know because that work is currently ongoing—the regulation will be presented to this House, when the noble Lord will no doubt want to comment on it.

--- Later in debate ---

[Lord Lucas (Con)]

In the context of some of the arguments advanced by my noble friend, has he considered extending the principle embodied in Clause 15(5), which says that, in particular subject areas, changes cannot increase the regulatory burden? This would address some of the points made in the amendments by giving an overall protection that workers’ rights will not be reduced by the changes made as a result of the Bill. It might give some comfort to those of us who support the Bill and do not doubt the Government’s intentions to see them embedded in law, in just the same way as they propose in Clause 15(5).

More generally, I am disappointed that my noble friend does not address the issue of the role of Parliament. To my mind, it is a great demonstration of the need for the House of Lords that this Bill has arrived in our House in this shape, and if we let it go out of this House in the same shape, we will demonstrate why we ought to be replaced.

[Lord Callanan (Con)]

I totally understand the point my noble friend makes; I am a passionate believer in the rights of this House and have happily stated on many occasions within government that in many cases we do a much better job of scrutinising legislation than the other House. It sometimes makes life a little uncomfortable for Ministers such as me defending this, but when I talk to some of my colleagues in the Commons, I realise how relatively little time is given to some legislation compared to this House.

I also understand my noble friend’s first point. I reiterate that it is certainly not the Government’s intention to reduce workers’ rights. The House will get tired of hearing me repeat it, but we have higher standards than most of the rest of Europe and we have every intention of maintaining that.

[Baroness Andrews (Lab)]

My Lords, before the Minister sits down, I should like to ask him one question. He has addressed the issue of the sunset clause in different ways; we have different opinions about that. Why were the Welsh and Scottish Ministers not given the same power to amend the sunset clause? They were not consulted about the Bill and have no powers in this respect.

[Lord Callanan (Con)]

They certainly have the power to examine, repeal or change EU law within their specific areas of competence.

[Baroness Andrews (Lab)]

The reason I raise this is because we are talking about the capacity of the Civil Service to do the things the Government are requiring of it. That challenge is infinitely greater for the devolved Administrations. One issue raised by the Bill is the impact the Bill has, deliberately or accidentally, not on the devolution settlement but on the capacity of Wales and Scotland to influence the way in which decisions about whether to retain, remove or amend instruments will be made. It is an extremely important point, and it deserves a serious response.

[Lord Callanan (Con)]

I thought I had given the noble Baroness a serious response. Within the area of devolved competence, the devolved Administrations have the same rights as the UK Government to amend, repeal or replace retained EU law.

[Lord Fox (LD)]

My Lords, I am assuming the Minister has now sat down. He touched on the interpretive effects that I raised in the set of amendments, but I do not think the answer was as full as we need. I think there will be other opportunities for the Minister to come back, and I will certainly press them. In the end, my assumption is that it will be up to the courts to decide which cases are in and which are out; it will be up to the courts and the lawyers who are pressing the courts to reinterpret or allow interpretations to continue. We need to know from the Government what is their assessment of the effect of that on this body of law and others across the spectrum we are discussing.

All Governments have to make choices, and the day-to-day push and pull of government can throw up many difficult dilemmas and severely stretch the national bandwidth for decision-making, but with this Bill, the Government are giving themselves 4,000 more choices they did not need to make. In opting to make these choices alone, without debate, discussion or consensus, each of these choices is bound to become a battleground, and each will be down to a Secretary of State—decisions that will call down attention from every corner of civil, legal, commercial and social society. So good luck with that, Minister.

The first amendment in the group illustrates some of the places where these battles will be fought across the country. No matter how close to their chest the Government play this, the arguments will not go away; indeed, the more secrecy and circumspection, the more suspicion will rise. The right reverend Prelate spoke about using the specifics to test the general, and this was an opportunity for the Minister to be more specific so that we could judge the general better. I do not think he has yet achieved that; however, we have six groups in very much in the same vein, so perhaps the Minister can work on his performance. In the meantime, I beg leave to withdraw Amendment 1.

--- Later in debate ---

[Lord Collins of Highbury (Lab)]

My Lords, I shall be relatively brief. These two regulations were covered in my Amendment 40, so it could be argued that I have already addressed them.

I want to focus on the points raised by the noble Lord, Lord Fox, and particularly by my noble friend Lady O’Grady about the impact of these regulations on women. I know that my noble friend was part of this because we were working together on the same campaign, when my noble friend Lady Prosser launched the campaign for part-time and temporary workers’ rights within the Transport and General Workers’ Union going out. We took it to Europe to try to persuade MEPs to support us. It would be good to hear whether the Minister responded positively to the campaign to protect part-time and temporary workers when he was an MEP.

These rights have had the most effect on women. Women often choose to work part time for all kinds of reasons, but there is no reason they should have less pay and poorer conditions as a consequence. I had the same conversations with the noble Baroness, Lady Neville-Rolfe, when she was part of Tesco. Tesco is one of the biggest employers of part-time workers and many women were thus able to support their families.

It comes back to the fundamental issue raised by the noble Baroness, Lady Altmann. Here we have a situation where we risk these regulations simply falling off the shelf because of an arbitrary date for a sunset clause. These are fundamental rights which have changed the lives of women and their families. If they fall off, we will have no say in it. If the Minister changes them and we do not like the changes, all we can do in this Parliament is to say no—which means we do not have the rights at all again. That cannot be right. I hope the Minister can reassure us again on the specifics.

[Lord Callanan (Con)]

I thank all those who have contributed. I listened with interest to my noble friend Lady Altmann but I am afraid that her points were incorrect. I will not repeat the points that I made on the first group about how UK standards are superior. Those standards were introduced in UK law by Governments of both persuasions and approved by the UK Parliament. I am tired of repeating this point, but they did not, and do not, depend on EU law. My noble friend obviously was not listening to the points that I made on the first group.

Let me respond to the noble Lord, Lord Fox, on Amendment 2. I apologise if I am repeating the same points as I made on the first group. We are essentially covering the same ground as Members opposite seek to probe me on specific regulations. As I said on the first group, it is the Government’s position that there is no need for specific exemptions or exceptions to the sunset clause.

There are something like 4,700 identified pieces of law—I hope that we are not going to go through this debate for all 4,700 of them, although maybe it would suit the Opposition to do just that. The Bill provides the tools to remove or reform retained EU law in secondary legislation, but—and this point is crucial—it also enables the Government to preserve and restate retained EU law. This allows for the preservation of the status quo and no change at all to the policy operation where it has been reviewed and deemed fit for purpose for our benefit here in the UK.

As part of this process, and as the Bill allows, the Government are reviewing all retained EU employment law to ensure that our regulations, including the Part-time Workers (Prevention of Less Favourable Treatment) Regulations 2000 and the Fixed-term Employees (Prevention of Less Favourable Treatment) Regulations 2002, meet the needs of the UK economy. We are doing so on the back of the fact that we already have much superior standards to most other countries in the European Union, and far in excess of what EU law legislates for. I appreciate that there is a principled difference between us on this, but I will keep repeating that point as many times as noble Lords ask me for exemptions.

Let me pick up the point made by the noble Earl, Lord Clancarty. I agree with him that the creative industries have made a substantial and sustained contribution to economic growth and job creation across the UK, growing, on average, at nearly twice the rate of the wider economy. The Government are completely committed to supporting these vital industries.

Let me repeat again that it is up to departments and the devolved Administrations as to what they wish to do with specific pieces of policy. With that, I hope that noble Lords will be content to withdraw or not to press their amendments.

[Baroness Altmann (Con)]

My Lords, I am struggling to understand my noble friend’s comments. If UK law is already stronger than retained EU law, why do we need to get rid of the retained EU law? What is the problem with retaining it on the statute book and going with our stronger protections?

[Lord Callanan (Con)]

I am sorry that my noble friend does not seem able to understand this, but the Bill provides the tools to remove or retain EU law. It also enables the Government—I repeat this point again—to preserve and restate retained EU law. If my noble friend had listened to our debate on the first group, she would know that I made the point to the noble Lord, Lord Fox, that there is some retained EU law in this area, and a lot of UK domestic legislation that builds on and intertwines with it. There is also the interpretative effects, which were originally aligned. Therefore, while maintaining the high standards that this Parliament has legislated for, and possibly extending those standards in some areas, it is incumbent on us, in order to tidy up the statute book, to make sure that all our laws work for the best interests of this country.

[Baroness Altmann (Con)]

My Lords—

[Lord Callanan (Con)]

Let me make the point to my noble friend before I give way to her again. Many of these regulations will indeed be preserved, retained or replaced. If it is the case that the Government come forward with such proposals, those regulations will be consulted on, and debated in the other place and debated here. My noble friend will have the opportunity to comment on them then.

[Baroness Altmann (Con)]

I thank my noble friend. I am still not quite sure what we can say to women, who currently have hard-won protections in the labour market, about where their future rights and protections will end up. We do not have a list of all the things that are going to be changed; the Government themselves have already said they do not necessarily know all the wider ramifications of this. If those protections are, in the view of a Minister, in need of change, and presumably being weakened, Parliament will have the opportunity to look at them. However, as the noble Lord opposite said, if they do not like them, they lose the whole lot.

[Lord Callanan (Con)]

My noble friend asks what she can say to women. She can tell them that they have one of the highest minimum wages in Europe as a result of the policies of this Government, that they are entitled to 5.6 weeks of annual leave compared with an EU requirement of four weeks, and that they are entitled to a year of maternity leave in the UK whereas the EU minimum is only 14 weeks—that is what she can say to women workers.

[Lord Fox (LD)]

My Lords, I believe I owe the Committee an apology. In withdrawing my previous amendment I said there were 4,000 unnecessary decisions facing the Government. I am afraid I was wrong. I have listened to the Minister and I understand now that it is 4,700 unnecessary decisions, on which the Government will be using important legislative and administrative bandwidth. I believe there are better things to be doing than this process, and perhaps in one of his other comments the Minister can explain why all this time is being wasted if, as he says, nothing will change—and that is our point.

When it comes to the question of interpretative effects, it is strike two. The noble Baroness, Lady O’Grady, and indeed the Minister himself, set out this intermingling of UK-derived, EU-derived and case law, and the fact that if we start pulling one piece of string there is a very great chance of it unravelling. The Minister has acknowledged there are interpretative effects, but we need a more detailed assessment of how the Government expect those to pan out as the courts get their teeth into the post-2023 situation. When I ask this in the next group, it might be better if the Minister undertakes to write a very detailed letter—possibly assisted by the department’s lawyers—that explains the legal view on how this is going to work. That is perhaps a way of avoiding me asking the question another few times.

At the end of the previous group, there was a very interesting intervention from the Minister’s own Benches on Clause 15(5), and how changes to the wording of that clause could begin to draw the sting of some of the arguments that we have heard so far and will hear later. The Minister might take to heart the advice that came from his own Benches.

We heard in the debate about the disproportionate effect that the stifling of this legislation could have on women, minorities, the creative industries and a wide group of people. That is why it was important to have this amendment in a separate group. However, given the nature of the debate, I beg leave to withdraw Amendment 2.

Nuclear Regulated Asset Base Model (Revenue Collection) Regulations 2023

Lord Callanan Excerpts

Wednesday 22nd February 2023 Grand Committee

Moved by

[Lord Callanan]

That the Grand Committee do consider the Nuclear Regulated Asset Base Model (Revenue Collection) Regulations 2023.

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

I beg to move that these draft regulations, which were laid before the House on 15 December 2022, be considered. The Government recently took the historic step of investing in the development of Sizewell C—our first investment in a nuclear project for 35 years—and have designated the project as the first to use a RAB model. In approving the instrument, we would be helping to fully establish the model for potential use on all new nuclear projects, which we need to ensure a low-carbon, low-cost and resilient electricity system, so that we can reach our emission reduction target and provide energy security.

The RAB model offers a chance to do this in a way that draws in new sources of finance at a lower cost of capital, thereby reducing the overall cost of a nuclear project for consumers compared to current funding models. A nuclear company that is designated under the Nuclear Energy (Financing) Act is entitled to receive a regulated revenue stream, overseen by the regulatory authority, Ofgem, which of course has a duty to protect the interests of all consumers. This would cover the cost of activities related to the design, construction, commissioning and operation of the relevant nuclear project, as well as activities related to an approved funded decommissioning programme. These regulations provide the framework to implement secure, long-term funding to nuclear projects.

In accordance with Section 18 of the Act, the Secretary of State may direct the designated revenue collection counterparty, the Low Carbon Contracts Company, to offer to contract with a designated nuclear company. Once the revenue collection contract is entered into, the regulations establish a mechanism for all licensed electricity suppliers in Great Britain to make payments to the counterparty so that it can pay the amounts owed to nuclear companies. The revenue collection counterparty may also return money to suppliers, hold sums in reserve and cover up its losses through requiring suppliers to post collateral and undergo a payment mutualisation process in case of supplier default. The regulations also set out the arrangements for a supplier levy to pay for the revenue collection counterparty’s operating costs.

The contracts for difference revenue stream was designed with similar considerations in mind to the nuclear RAB revenue stream, such as incentivising private sector investment in secure low-carbon electricity. The CfD revenue regime has been operating for a number of years and is familiar to suppliers, investors and generating companies. In developing these regulations we have therefore strived, where possible, to replicate the revenue regime set out in the CfD legislation, with differences to account for the specific features of a nuclear RAB model.

Two key features of this are, first, that the revenues which the nuclear company is entitled to receive from suppliers under these regulations would be regulated by Ofgem, whereas CfDs do not have this regulatory oversight. Secondly, these regulations will allow the revenue collection counterparty to collect revenues from suppliers during a project’s construction phase as agreed in its revenue collection contract, not simply during the operations phase, as with the CfD regime.

Throughout the project’s duration, the revenue stream from suppliers under these regulations will work in a similar fashion to the CfD regime. We anticipate that using a recognised and reliable revenue model will minimise the impact of introducing such measures on suppliers and their consumers.

We carried out a full public consultation last year and sought views on the general idea of these regulations replicating those which underpin the CfD revenue mechanics, and the differences needed to account for the specific features of a nuclear RAB. Overall, we received 40 responses from organisations and members of the public, who were mostly in support of the proposals. Accordingly, in our government response, published on 14 December 2022, we set out plans to proceed as proposed.

Following careful consideration, we consider it preferable not to exempt specified groups under these regulations, as costs could be shifted on to other vulnerable groups not included under such an exemption. Instead, we want to pursue measures which support wider protections for vulnerable groups, such as the cost of living payments for pensioners and those on means-tested benefits announced in November’s Autumn Statement. I assure the Committee that, as the Government set out during the Act’s passage, we will ensure that consumers’ interests are protected and steps taken to prevent consumers bearing unacceptable costs. We have estimated that a generic nuclear project approved in this Parliament would add approximately £1 a month to a typical household bill during the project’s construction phase.

In conclusion, this secondary legislation represents an essential step towards implementing the nuclear RAB model by ensuring a secure and consistent revenue stream. This model is a key enabler for the Sizewell C project, and the nuclear projects we need beyond that, to help ensure a secure, low-carbon and low-cost future electricity system. I commend these draft regulations to the Committee.

[Baroness Blake of Leeds (Lab)]

I will try to be brief in my questions; I am happy to take answers in writing if that is appropriate. I thank the Minister for his very thorough summary of the regulations we have before us today. I agree that this is an interesting way of securing funding for what I think we are all coming to realise is going to be an important contribution to the energy crisis we face at the moment.

The Minister tried to give reassurance about the customer and the role of Ofgem in that. One of our concerns is that this model is complex and long-term. Potentially, if things go well, it could be very successful, but our concern is about if things do not go so well, costs overrun and all those sorts of things. Some reassurance on how customers’ interests will be protected would be very helpful. The other factor in terms of costs is whether we are talking just about Sizewell C or about all the other nuclear projects. Where do we stop? If £1 becomes £10 or £20, perhaps those affected might have more to say about this.

The other concern is that, if things do not go so well, projects get cancelled or other things happen, we are talking potentially about a large sum of money that could be accrued through this model. Could I have a bit more explanation about how the mechanisms could ensure that money not used in the project or any future project would be returned to the customer? There is a concern that the Low Carbon Contracts Company would just sit on customers’ money rather than handing it back. What would the mechanism be to hand that money back?

Moving on, there was a question in the debate in the Commons about whether this will be reviewed or not. There was a suggestion that a review could cause a lack of confidence, and therefore that there should not be one, but the Minister then commented that there will be a review in 2025. It would be good to have some clarification about when a review is a review or not.

[Lord Callanan (Con)]

I thank the noble Baroness for her questions—and for being the only one to turn up and take an interest in this statutory instrument. Of course, I assure her that we will keep a close eye on the costs. Ensuring that we do not allow the costs to run out of control is probably the most crucial aspect of the project, so both Ofgem and my department will be closely monitoring this.

We can give her the reassurance she is looking for that consumer interests will be protected if there are any cost overruns. Proposals for the RAB model include multiple mechanisms for ensuring that consumers are protected from unacceptable costs. This includes: robust due diligence before a final investment decision to be confident that the project will be effectively managed; requiring a project to move through various staged approvals; and value-for-money tests fully in line with the Treasury’s Green Book. The noble Baroness also asked about how money is returned to consumers through beneficial payments. We will ensure to do that if it is at all possible.

With regard to a review, we have decided not to include a statutory review clause in order to retain stakeholder confidence in the stability of the revenue stream. I think that that is probably in line with the noble Baroness’s thinking. There are plans for the operational costs levy rates to be next reviewed in 2025, and we will then consult on the costs for the next three financial years—that is, from 2025-26 to 2027-28. This is in addition to the other plans that we have in order to monitor and evaluate the effectiveness of the RAB policy, which we will keep under review as necessary or appropriate. As she said, these are long-term schemes, over many years—if not decades—to provide secure funding for the next generation of nuclear reactors in this country.

I thank the noble Baroness for her support. We are grateful for the support the Opposition have provided both for the legislation in the first place and for this statutory instrument. I hope I have resolved her complaints; I am very happy to write to her if there are any additional points.

Motion agreed.

Methane Emissions

Lord Callanan Excerpts

Wednesday 22nd February 2023 Lords Chamber

[Baroness Blackstone]

To ask His Majesty’s Government, further to their commitment to the Global Methane Pledge launched at COP26, what plans they have to set a target for reducing methane emissions by 30 per cent on 2020 levels by 2030.

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

My Lords, the UK has adopted early and ambitious measures to tackle methane emissions. Between 1990 and 2020, UK methane emissions dropped by 62%, more than any other OECD country. The Government recognise the urgency to do more and are pursuing efforts to secure further emissions reductions in line with the net-zero strategy and our carbon budgets. The Government’s approach is consistent with the global methane pledge as a global reduction target.

[Baroness Blackstone (Lab)]

My Lords, I am grateful to the Minister for his Answer, but I am not absolutely sure whether he is saying that the UK itself is committed to a 30% reduction, or whether it is just taking part in a collective reduction. Can he clarify that? I also want to ask him about the vexed problem of landfill sites, where we are still capturing only 70% of the biogas coming from them—and the proportion has declined since 2016. How will the Government increase methane capture rates to nearer 90%, as happens in some sites, by both reducing greenhouse gas emissions and harvesting more useable gas for the economy? If he does not know the answer to these questions, can he write to me?

[Lord Callanan (Con)]

I do know the answers to the noble Baroness’s questions, she will be shocked to know. In answer to her first question, I say that the UK is signed up to, and helping to implement, a global target. On the waste sector, she is absolutely right that we need to do more. Landfill emissions over the last 25 years have been tackled in two ways: by reducing the amount of biodegradable waste going to landfill, with the landfill tax being a key driver, and by increasing the efficiency of methane collection from existing landfills. The other thing we need to do more is to increase waste food collections, so that we can generate more clean gas through anaerobic digesters, which is part of my department’s policies.

[Lord Teverson (LD)]

My Lords, the Minister mentioned the word “urgency”, yet if we look at the North Sea, we are emitting three times the amount of methane compared with the equivalent extraction by Norway. On our side, the Government, through the North Sea Transition Authority, are just saying that there should be an end to the regular venting and flaring of methane by 2030. Should we not be performing as well as Norway now, if that urgency is there?

[Lord Callanan (Con)]

The noble Lord is right that we need to do better venting and flaring; it is a priority. We set out our commitment to the World Bank’s Zero Routine Flaring by 2030 initiative, as the noble Lord said. We are working with regulators and industry to eliminate this practice as soon as we possibly can.

[Baroness Rawlings (Con)]

My Lords, I will follow on from the very good question from the noble Lord, Lord Teverson. One of the worst methane leaks happened with the rupture of the Nord Stream gas pipeline. Our report on UNCLOS detected a possible lack of protection of seabed pipelines. Can the Minister assure your Lordships that the MoD is making extra sure that these are better protected in future?

[Lord Callanan (Con)]

The explosion in the Nord Stream pipeline was truly shocking, with large quantities of gas released. I do not think that any investigations have yet shown who is responsible for that; I am sure we all have our strong suspicions. It was an appalling act of sabotage. I am sure that the authorities in the MoD and the security services are looking very closely at all our own interconnecting pipelines.

[Baroness Bennett of Manor Castle (GP)]

My Lords, following on from the question asked by the noble Lord, Lord Teverson, I point out that we are three times as bad as Norway in the published figures. However, I am sure the Minister is aware of the study out in the past month from Princeton University and Colorado State University, which says that the real figures are five times as bad as the published figures and that methane release data is based on outdated, unpublished, publicly unavailable or generic figures. Will the Government ensure that the best peer-reviewed research and methodology is used to calculate methane emissions from oil and gas?

[Lord Callanan (Con)]

Of course we will want to make sure that the information and published figures are as accurate as possible, but I think the noble Baroness does us a little bit of a disservice. We have reduced our methane emissions in the UK, as I said, by 62%. That is much better than the US and the EU 27. Clearly, we need to do more, but we have a good record in this area.

[Lord Trees (CB)]

My Lords, with respect to greenhouse gas emissions from cattle, will His Majesty’s Government take into account, first, that the UK cattle herd has reduced by over 30% since 1975? Given the short half- life of methane in the atmosphere, that represents a similar permanent reduction in our national herd’s contribution to atmospheric methane. Secondly, we currently produce beef per unit of weight at less the half the global average greenhouse gas emissions.

[Lord Callanan (Con)]

I know that the farming sector has a good record, but of course ruminant livestock are one of the largest causes of farm emissions and one of the largest emitters in this country. We need to do more and we need to do better. I am straying into the territory of my noble friend Lord Benyon, but this is an area that we do need to improve our performance in.

[Baroness Blake of Leeds (Lab)]

The Minister rightly highlights the successes that the UK has shown in reducing methane emissions by 62% between 1990 and 2020. We welcome the UK signing up to the global methane pledge after COP 26. If the Government now say that UK emission reduction will have reached only 64% by 2030, where is the commitment to the pledge to reduce methane emissions by 30% from the 2020 levels? Where is the urgency? The memo calls us a global leader. Are we effectively saying that we have done our bit rather than continuing to lead the way?

[Lord Callanan (Con)]

No, we are not saying that we have done our bit; we are saying that we have an extremely good record that is, as I said, much better than many of our industrialised partners, principally because we have virtually eliminated coal from our energy mix. Because we have done much better, performative-wise, than other countries it makes it more difficult for us to reduce further going forward, but we are committed to doing that. We are committed to working with our partners. Many of these sectors, as has been indicated by the questions, are quite difficult to tackle but we will certainly take a lead in this.

[Baroness Sheehan (LD)]

The International Energy Agency estimates that 72% of methane released from the UK’s oil and gas sector could be abated cost-effectively with existing technologies and practices. Will the Government accept the recommendations of Chris Skidmore’s net-zero review and ban routine flaring and venting by 2025—as the Norwegians did back in 1971?

[Lord Callanan (Con)]

Of course, we have received Chris Skidmore’s excellent report only recently, and we are studying its conclusions and recommendations in detail and will respond shortly. As I said, we will do our best to reduce routine flaring and we have a target—but if we can exceed that target, we certainly will.

[Baroness Jenkin of Kennington (Con)]

My Lords, the announcement that every council will implement domestic food waste collections by 2025 is, of course, welcome, but it will not end the landfilling of other organic waste, such as garden waste and commercial food waste. If the UK were to bring forward its proposed end of landfilling organic waste from 2028 to 2025, it would cut methane emissions by an extra 13%, as a result of the time lag between waste arriving in landfill and the production of methane. Will the Minister talk to his noble friend at Defra to encourage it to look again at this point?

[Lord Callanan (Con)]

I am sure that my noble friend has heard the noble Baroness’s point, and she makes a very salient contribution. It is vital that we implement food waste collection as fast as possible, and I am particularly keen to do that because we have a whole series of anaerobic digestors being rolled out across the country, generating clean green gas that can feed directly into the gas mains. We have a subsidy policy in place for that; it is an excellent scheme, and we want to expand it.

[Lord Watts (Lab)]

My Lords, as well as failing in most areas of public policy, the Government are failing in the insulation of homes. Would not it be good for them to actually do something about this, as it would reduce pollution and help people with their energy bills?

[Lord Callanan (Con)]

It would indeed be good for the Government to do something about it—and, indeed, we are. We have an excellent insulation programme; we are spending something like £6.6 billion over this Parliament on insulation schemes. If the noble Lord would have a little patience, we will announce new schemes shortly. The Chancellor has already committed another £6 billion from 2025 for those schemes. Of course, there is always more that we can do—we have one of the biggest problems in Europe in terms of having the oldest housing stock, as many of our homes were built before the First World War. There is a lot to do, and we are doing a lot—and in essence the noble Lord is right, in that we can of course always do more on insulation, but let us not pretend that we are not doing anything at all.

Strikes (Minimum Service Levels) Bill

Lord Callanan Excerpts

2nd reading
Tuesday 21st February 2023 Lords Chamber

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

My Lords, the public expect the essential services that they pay for to be there when they need them. This Bill aims to maintain a reasonable balance between the ability of workers to strike and the rights and freedoms of the public to access essential services during those strikes.

The latest ONS data shows there were 843,000 working days lost because of labour disputes in December 2022. This brings the number of strike days lost between June and December to nearly 2.5 million, which is the highest since 1989. Industrial action is disruptive for everyone: for those who rely on those essential services to get to work or care for their families, for the NHS trying to get the backlog down, and for schools trying to recover lost learning after the pandemic. It also, of course, vitally impacts on our local businesses, whose sales and productivity suffer.

While we are pleased that voluntary derogations were eventually agreed for the strike action in health sectors in December 2022 and early this year, I am afraid that is not guaranteed to be the case for future action or in all sectors. Indeed, during the ambulance service strikes in December and January, some derogations were not agreed until immediately prior to the strike action, leaving employers with sometimes only hours, not days, to implement full contingency plans. This creates a great deal of uncertainty for everyone concerned, including the staff, the public, patients and their families. Further, there is no guarantee that where derogations have been agreed the required numbers of staff will not strike on the day itself. This can create uncertainty and inconsistency across the country, and unnecessary risk to patient safety.

While I would emphasise that the Government firmly believe that the ability to strike is important—it is rightly protected by law—the recent industrial action has highlighted the disproportionate impacts that strikes can have on the public. We need to be able to have confidence that when strikes occur, people’s lives and livelihoods are not put at undue risk, and so do the public; that is why this legislation is needed.

I turn now to the detail of the Bill, which establishes a legal mechanism to implement minimum service levels for periods of strike action affecting certain services. It achieves this by making amendments to the Trade Union and Labour Relations (Consolidation) Act 1992 that add obligations relating to minimum service levels to the list of requirements necessary for the union’s strike action to be protected from liability in tort.

The legislation will enable minimum service levels to be implemented in key sectors via regulations. The key sectors specified in the Bill are broadly the same set that were defined as important public services in the Trade Union Act 2016, which have long been recognised as important for society to function effectively. The six key sectors are health services, fire and rescue services, education services, transport services, the decommissioning of nuclear installations and management of radioactive waste and spent fuel, and border security. These are the right sectors, given the economic impacts of their potential disruption as well as the impacts on public safety and the ability of the public to go about their daily lives.

Regulations will be tailored to each relevant service to meet legitimate aims, such as safety, public health, access to work and to healthcare, among others. The Government believe it is only right that minimum service levels and the services they apply to are informed by consultations, as required by the Bill, and that there is parliamentary scrutiny of the regulations before they come into effect. This is why these regulations must be approved by both Houses of Parliament before they can be made.

The Bill and subsequent regulations are designed to enable employers to specify the workers required via a work notice in order to meet minimum service levels during strikes within those relevant sectors. Should a union notify an employer of strike action in accordance with existing rules, the Bill will allow the employer to issue a work notice to the union, seven days before the strike, specifying those workers needed to work during the strike and the work that they will need to carry out to secure the minimum level of service.

Work notices must not include more persons than are reasonably necessary to meet the minimum service level and employers must not have regard to whether a worker is or is not a member of a union when producing the work notice. Employers must consult the union on the number of workers to be identified in the work notice and the work to be undertaken, and have regard to any of their views before issuing that notice. Each employer and union must also adhere to data protection legislation regarding those work notices.

To enable a minimum service level to be achieved on a strike day and where a work notice has been issued, a trade union must take reasonable steps to ensure its members, when named on a work notice, comply with it and therefore do not participate in the strike. What is considered “reasonable” will to an extent depend on each specific situation and could include making it clear in its communications with members that, where members are named in a work notice and required to work on a particular day, they should attend work on that strike day. A union which fails to comply with this obligation could lose its protection against liability in tort.

Additionally, if an employee takes strike action despite being named on a work notice, they will lose their automatic protection against unfair dismissal for industrial action. While it is up to the employer, not the Government, as to whether disciplinary or legal action is taken in instances of non-compliance, these measures are necessary to enable employers to manage these situations in the same way as they would now with unauthorised absences or unprotected strike action.

The Bill ensures that minimum service levels align to existing law in respect of taking industrial action and associated legal protections. These provisions are needed to make minimum service levels effective where they apply. This legislation is not about sacking workers; it is about protecting people’s lives and livelihoods by enabling minimum service levels to be applied during strikes.

The Government have already released consultations on the minimum service levels for our blue-light ambulance and fire services and for rail services. These consultations ensure that the public and industry stakeholders, including employers, unions and their members, are all able to provide feedback on what the minimum service levels should be and how they are proposed to work.

Everyone wants to see an end to current strikes and we are doing all we can to negotiate fair and affordable pay settlements with the unions. But at the same time, we must act to protect the public for the future. This legislation is not about stopping or preventing strikes. It simply brings us into line with many other modern European countries, such as Spain and Italy, where minimum service levels are a common way to reduce the impact strikes can have on the public. However, we are not going so far as to ban strikes completely. We are taking a fair and reasonable approach by asking that, before a union takes strike action within a relevant service, they agree adequate voluntary arrangements of cover where they are necessary. Where this has not happened, we will introduce regulations to enable minimum service levels to be applied.

We are of course always mindful of and thankful for the contribution that public sector and other workers make to our country. But if trade unions continue to take disproportionate and potentially unsafe industrial action, we firmly believe that we need to take steps to protect the public. I beg to move.

Strikes (Minimum Service Levels) Bill

Lord Callanan Excerpts

2nd reading
Tuesday 21st February 2023 Lords Chamber

[Lord Callanan (Con)]

My Lords, I thank all noble Lords for their contributions on what is, in the Government’s view, a very important Bill. There is clearly a wealth of expertise on this topic across the House, not least among the large number of ex-trade union general secretaries we seem to have on the Opposition Benches, who have all contributed well. Of course, I sense the strong feeling on this issue. As is usual in this House, we have had a thorough and engaging debate; most of the speeches have been thoughtful and I certainly listened with interest to what Members had to say.

I start, as many others did, by congratulating my noble friend Lady O’Neill on her excellent maiden speech. Unlike some others, she kept it relatively uncontroversial. It is a pleasure to see her in place today, and I am glad she has chosen this debate to make the first of what I am sure will be many well-informed contributions. I first met my noble friend during a visit to Cory’s Riverside Heat Network a few years ago and I am delighted, as an energy Minister, that we are welcoming someone with such a passion for energy. She has done some tremendous work as Bexley Council leader; she pioneered its decarbonisation vision and made Bexley a flagship Conservative borough. My noble friend and I have many things in common. We both have Irish parents: she has two and I have one. We both started our careers in local government. Hers was considerably more successful than mine: she became a council leader, and I was one Conservative out of 66 councillors in Gateshead. So, she did much better than I did in that respect. Congratulations to her on an excellent maiden speech.

I will do my best to respond to as many as possible of the contributions made and issues raised, but as always, time is limited and I apologise in advance if I do not have enough time to address everybody’s contribution. Let me start with concerns about the design of the Bill, raised by the noble Baronesses, Lady O’Grady, Lady Donaghy, Lady Whitaker, Lady Jones and Lady Kennedy, the noble and learned Lord, Lord Judge, the noble Lords, Lord Strasburger, Lord Monks, Lord Prentis, Lord Whitty, Lord Fox and Lord Collins, the noble Viscount, Lord Stansgate, the right reverend Prelate the Bishop of St Edmundsbury and Ipswich, my noble friend Lord Balfe and probably some others I have missed. I maintain that it is right that the detail of specific services and minimum service levels be set out in secondary legislation—that is not something for primary legislation. As a number of Members have observed, the Government published consultations on establishing MSLs in ambulance services and fire and rescue services on 9 February. Yesterday, we published a consultation on minimum service levels for rail.

It is entirely proper and legitimate for the Government to enable employers, employees, trade unions and their members and, most of all, of course, the public, who are affected by all of this, to contribute to the consultations. We had a lot of contributions from so-called vested interests, but we did not have much on behalf of the great British public. So, they will all be able to contribute and the Government will seek approval from both Houses of Parliament before any regulations come into force. I can also confirm to the noble Baroness, Lady Donaghy, that we would expect to engage ACAS as part of the consultation process.

When it comes to the sectors included in the Bill—mentioned by the noble Baronesses, Lady O’Grady, Lady O’Neill and Lady Randerson, as well as my noble friends Lady Browning, Lord Dobbs and Lord Greenhalgh—as I said in my introduction, the key sectors covered are broadly the same set that were listed as important public services in the Trade Union Act 2016 and which have long been recognised as important because of the far-reaching consequences for members of the public who are not involved in any way in that dispute.

As many other Members have done, I pay tribute to what I thought was a very moving speech by my noble friend Lady Browning. It was a heartfelt contribution, explaining personally how people have to live with the increased anxiety of not being able to get an ambulance during a strike. They have had to adjust their lives accordingly. I totally agreed with her contribution. It demonstrates the disproportionate impact that strikes can have on the public and why, therefore, this legislation is needed, especially for health services. As she said, minimum service levels aim to relieve that mindset. It is therefore only right that these sectors are included within the scope of the legislation.

Many people have been left worrying about whether an ambulance will be there when they need it. The rail strikes have left people unable to access their work, their healthcare and, in many cases, their education. Some people have probably been unable to access their church services, led by the right reverend Prelate, although we would need to consult further on whether that would be regarded as an essential service.

With regard to the specific transport services, as raised by my noble friend Lord Greenhalgh and the noble Baroness, Lady Randerson, the Government have identified passenger rail as a priority to be consulted for implementation first. My noble friend Lord Leicester explained why, quoting the relevant statistics on the impact of rail strikes from the Centre for Economics and Business Research. The direct cost of all strikes and the indirect cost of worker absences due to rail strikes so far is at least £1.7 billion over the eight-month period to January 2023. The Opposition are very keen to talk about nurses and healthcare; I note that they are slightly less keen to talk about rail strikes. Cebr also says that

“unresolved industrial disputes are having an adverse impact on growth”

at a time when many forecasters expect the economy to be in recession.

Before minimum service levels are introduced in any other transport services, we would, of course, consult to ensure that all evidence and stakeholder views are fully considered. This would include employers and industry experts. Obviously, we recognise that each transport service is unique and consultation will be key to ensure that we get this right. As regards other services, I am happy to confirm to my noble friend Lord Balfe that the Government currently have no plans to implement minimum service levels on coffee or sweet shops.

I reassure the number of noble Lords who expressed concern about the powers in the Bill to amend primary legislation, including the noble and learned Lord, Lord Judge, the noble Baroness, Lady Chakrabarti, the noble Lords, Lord Strasburger, Lord Monks and Lord Whitty, and the noble Viscount, Lord Stansgate. Before I turn to Clause 3, I want to be clear that proposed new Sections 234B and 234F contain no such Henry VIII powers. There is no intention or ability to use Henry VIII powers to set the minimum service levels. These powers are strictly limited to Clause 3, and the powers in this clause can be exercised only to make amendments that are necessary to give effect to the Bill; they are therefore truly consequential. It is a standard clause included in much legislation, with standard wording. Drafting includes the references to Acts passed later in the same Session for the simple reason that those Acts might have been drafted before this Bill becomes an Act, and therefore may not take it into account. That is the only reason.

Many noble Lords spoke in a greatly entertaining way about the international comparisons that the Government are using when referring to this legislation. The noble Baroness, Lady O’Grady, referred to this, as did the noble Lords, Lord Allan and Lord Strasburger. As I said in my introduction, most major European countries have some version of minimum service levels for their key public services. In fact, many countries go further. Some, such as the USA, Australia and Canada, go much further and ban strikes completely in some blue-light services. As noble Lords will know, the approach to setting minimum services levels differs from country to country, taking into account their different circumstances; but can we please not have some of the wild exaggerations that some noble Lords made about the consequences of this legislation. This is common across many other perfectly well-functioning liberal democracies.

Many Opposition Peers also accused the Government of focusing on legislating and not on resolving the disputes. We have always said that we wanted to reach an agreement. Ministers across government have been meeting with the trade unions to attempt to resolve these disputes where it is possible to do so and, crucially, where it is affordable to the taxpayer. In some cases, I am pleased to say that settlements are being reached. As the noble Lord, Lord Collins, observed, just this afternoon, while we were in this Chamber, the Government have published a joint statement with the Royal College of Nursing announcing their agreement to enter a process of intensive talks. Both sides are committed to a fair and reasonable settlement.

There is no question that industrial action can have a disproportionate impact on everyone: on members of the public who rely on essential services to get to work or to care for their families; on the NHS trying to get the backlog down; on schools trying to recover the lost learning after the pandemic; and on local businesses whose sales and productivity suffer. We need to have confidence that, when workers strike, people’s lives and livelihoods are not put at risk. It is therefore necessary, in our view, to have the power to act if required.

A number of noble Lords were entirely reasonable to raise the devolved Administrations and their involvement. The noble Baronesses, Lady O’Grady, Lady Chakrabarti and Lady Randerson, were right to mention this important issue. However, the plain fact is that industrial relations is a reserved matter. The Government have a duty to protect the lives and livelihood of their citizens across Great Britain. The disproportionate impacts that strikes can have on the public are no less severe on people in Scotland or Wales, and they have every right to expect the Government to act to ensure that they can continue to access vital public services during strikes. We obviously recognise that, in some cases, this will affect employers operating services which are devolved. The Government have published consultations on the application of MSLs for ambulance services, fire and rescue services, and rail services. As part of the development of MSLs in those areas, and the consultations that are legally required to inform these, we will continue to engage with the devolved Administrations on the geographical scope of the regulations.

A number of noble Lords suggested that this could be a vehicle for firing workers—a point raised by the noble and learned Lord, Lord Judge, the noble Baronesses, Lady Chakrabarti and Lady Whitaker, the noble Lords, Lord Strasburger, Lord Monks and Lord Hain, and the right reverend Prelate the Bishop of St Edmundsbury and Ipswich. Let me once again assure them that this is misleading as to what this legislation will actually do. The Bill equips employers to manage instances where a worker takes strike action despite being named on a work notice for that particular day of strike action by removing the employee’s automatic protection against unfair dismissal for industrial action. It is at the discretion of the particular employer, not the Government, as to what, if any, disciplinary action is taken in these circumstances. We hope that employers are fair and reasonable, and take this sort of action only where it is necessary. It is no different from employers managing instances of non-compliance for any other unauthorised absence.

The noble Baroness, Lady O’Grady, the noble Lord, Lord Allan, and the noble Viscount, Lord Stansgate, all spoke of the use of “reasonable steps” in the Bill. There are a range of steps that trade unions could take, and what is considered reasonable will depend on each specific situation. First and foremost, a trade union should not call a union member identified in a work notice as required to work on a particular day out on strike that day. The trade union could also encourage those individual members to comply with the work notice, and make it clear in their general communication with members that where members are named in a work notice, and therefore required to work on a particular day, they should attend work on that strike day.

A number of noble Lords spoke about our international obligations and considered arguments on this point were made by the noble Baronesses, Lady Blower and Lady O’Grady, and the noble Lord, Lord Allan. As we have said, the Government are confident that the Bill is compatible with our international obligations, including the European Convention on Human Rights. As all Ministers do, I had to sign a statement of compatibility before I introduced the Bill in this House and, as all Ministers do, I did that on legal advice. As the minimum service levels framework is developed, the Government will continue to uphold their international obligations, including those under the TCA.

I was pleased to hear my noble friend Lady Noakes speak passionately in her support of the Bill, and, in particular, about balancing the rights of the public with the rights of the ability of workers to strike. That is fundamentally what the Bill seeks to achieve. Other noble Lords spoke similarly on international labour obligations, including the noble Baronesses, Lady O’Grady and Lady Kennedy, and the noble Lord, Lord Balfe. Some have said that it is wrong for the Government to set minimum service levels via regulation, rather than via negotiation or independent arbitration. That point was also raised by the noble Lords, Lord Whitty and Lord Liddle.

We have consistently said that we hope we do not have to use the powers in the Bill and that, where possible, if unions can agree on voluntary arrangements where they are necessary, that is obviously better than having to legislate. Where we have to bring forward regulations, these will be subject to consultation and scrutiny in both Houses of Parliament. We think that it is fair and reasonable to enable employers, employees, trade unions and their members, and the public as a whole, to participate in the process of setting minimum service levels, and then for them to be approved by both Houses of Parliament before they are applied. This would not necessarily be the case if the minimum service level was simply agreed between the employer and the union.

It was right that the noble Lords, Lord Monks and Lord Fox, and the noble Baroness, Lady Randerson, spoke passionately about the naming of individuals as part of the Bill. To be clear, the Bill enables employers to issue work notices to specify the workforce required to achieve the minimum service level for that strike period. Trade unions are required to take reasonable steps to ensure that members identified in the work notice comply with that notice. Therefore, the trade union needs to see the work notice and know which union members may be named to be able to take those reasonable steps. Individuals named on a work notice will be notified of this as regards themselves only; the work notice will not be a public document. In addition, there are no sanctions or consequences for individuals if the minimum service level is not then achieved.

The impact assessment for the legislation has now been published, as a number of noble Lords observed. Overall, we expect the legislation to be of net benefit to the economy. We have of course noted the RPC’s comments and will consider whether it is possible to revise the impact assessment to address them. Impact assessments will also be published for all subsequent regulations on minimum service levels. We believe that many of the concerns expressed by the RPC will be addressed when those are published.

A number of noble Lords, including the noble Baronesses, Lady O’Grady and Lady Donaghy, and the noble Lord, Lord Hain, expressed concerns that union members would be targeted individually and unfairly by employers in work notices. The Bill is clear that an employer must not have regard to whether a worker is a member of a union, or a particular union, when issuing a work notice. Nor does the Bill do anything to diminish other protections against discrimination, which, I hope, addresses the questions raised by the noble Lord, Lord Sahota.

The noble and learned Lord, Lord Judge, suggested that the Bill enables unilateral variation of employment contracts. It is true that legislation made under the Bill will affect the relationship between some employers and some workers, and that they will be required to comply with it where applicable, but in that respect it is no different from most employment legislation. The Bill does not provide employers with powers to unilaterally vary employment contracts; it merely allows the giving of a work notice which adjusts the circumstances in which workers may lawfully go on strike. I am afraid that I do not agree with the noble and learned Lord that any of that is akin to unilateral variation.

Some noble Lords, including the noble Baronesses, Lady Chakrabarti and Lady Jones, the noble Lord, Lord Prentis, and my noble friend Lady Noakes, raised the existing life and limb law. Disproportionate impacts on the lives and livelihoods of the public still occur during strikes, despite Section 240 of the 1992 Act being in place. The aims of MSLs are to balance the ability to strike with the rights of the public to access the vital services they depend on during those strikes. The purpose of Section 240 is to allow for criminal prosecutions for those who intentionally and maliciously endanger life or cause serious injury to a person by going on strike. In my view, these are two fundamentally different aims, and, as my noble friend Lady Noakes flagged up, the right to access key services clearly goes beyond life and limb.

I will also take on board and consider the point made by the noble Lord, Lord Fox, about the Home Office guidance in the Manchester Arena tragedy and follow that up with him.

Finally, a number of noble Lords rightly raised the issue of the pressure that the cost of living is putting on people and our public services. That is why we have committed to halving inflation and growing the economy, and why we have provided £26 billion to support individuals and businesses. We are investing billions more in schools, the NHS and social care, and all that of course supports those who work in those services. The Government respect the vital work that public sector workers do on the front line to protect the lives of others—a point we have made a number of times and will continue to make.

Once again, I thank all noble Lords who have spoken. I reiterate what I said in my opening remarks: the Government support workers’ ability to strike; it is an important part of industrial relations that is rightly protected by law. The Bill seeks to maintain a balance between the ability to strike on the one hand, and on the other the public’s right not to be subjected to disproportionate impacts as they try to go about their daily lives and access essential public services. My noble friend Lord Patten was right when he said that striking the balance between the ability to strike and the right of the public to be safe and protected is difficult, but we believe that our approach is a proportionate way to provide this important balance. I am happy to confirm to him that the Government have no intention of banning the ability to strike. As my noble friend Lord Dobbs so eloquently put it, the Bill is intended to keep the country working.

To encourage further engagement with the Bill, links to the consultations will be circulated to participating Peers after this debate. In the meantime, I of course look forward to discussing the Bill further with Members in Committee. With that, I beg to move.

Bill read a second time.

Moved by

[Lord Callanan]

That the bill be committed to a Committee of the Whole House, and that it be an instruction to the Committee of the Whole House that they consider the bill in the following order: Clause 1, Schedule, Clauses 2 to 6, Title.

Motion agreed.