Energy Bill [HL]

Lord Callanan Excerpts

Report stage
Tuesday 28th March 2023 Lords Chamber

[Lord Lennie (Lab)]

My Lords, I thank the noble Lord, Lord Teverson, and all other noble Lords and Baronesses who have spoken. While I may agree with the noble Lord, Lord Teverson, that these trials are not a good thing, they are upon us and therefore we have to deal with what we face rather than what we might not have faced had we stopped the trials in the first place. I do not think the Government are about to abandon the plan, and therefore we have some concerns about the plan as it goes ahead.

Clause 111 makes certain modifications to the Gas Act 1986 so that the person running the trial has clear grounds to enter property. That causes me concern that they can carry out essential works and safety checks and disconnect gas supply. Can the Minister deal with some questions? He may not be able to deal with them tonight and may want to write to me later. When can property be entered? What safeguards will be in place? What burden of proof will be applied on entry? When can a property not be entered? Will future guidance be published and, if so, when can we expect it to be with us? The Labour amendment

“requires the Secretary of State to take a number of steps with regard to the areas and people affected by hydrogen grid conversion trials and to make arrangements for Ofgem to provide information, alternative heat sources and offer the right of opt out (which would disapply the right of gas transporters to enter premises to disconnect). It would also require the Environment Agency to monitor and report on hydrogen escape, and the Health and Safety Executive to monitor safety implications.”

Subsection (1) provides the Secretary of State with a power to make regulations by statutory instrument to require a person conducting the trial to follow specified steps to ensure consumers are appropriately informed about the trial and the need for them to be disconnected from their gas supply before it happens. This clause also provides the Secretary of State with a power to make regulations to introduce consumer protections for people who are, or are likely to be, affected by the trial, and a list of examples is provided.

Our amendment sets out a number of reasonable steps, ensures that people are not disadvantaged, whether they participate or take an alternative, and ensures an alternative is offered and they can opt out. The trials are much more popular in Redcar, I am led to believe, than they are in Whitby. An exchange of correspondence took place between Graham Stuart, the Minister at DESNZ, and Justin Madders MP and Louise Gittens, who is the leader of Cheshire West and Chester Council. To quote from the letter from Graham Stuart, he said:

“I fully agree that local support for the trial is essential … However, we will only go ahead with a trial in an area where there is strong local support … I do agree it is very important this context is set out clearly, particularly for the communities in the areas across the country served by the gas networks which the networks are assessing.”


If that is true, certainly in Whitby, I do not think a trial will proceed, but I may be wrong. I would welcome the Minister’s assessment of the correspondence and what he makes of it in relation to the trial. It is not so much about cost, although there is a cost, and it is not so much about safety, although there is a safety issue; it is about local democracy and whether they want the thing to go ahead in the first place.

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

I thank all noble Lords who have contributed. I start by addressing the point raised by the noble Lord, Lord Lennie. This is a matter for which I have ministerial responsibility, so I am familiar with all the issues. I too am getting, not a massive stream of correspondence, but a lot of correspondence from the people in the two trial areas. I have met Justin Madders, the MP for the Whitby trial area, Ellesmere Port, and of course I know Jacob Young very well from Redcar. The point that Graham Stuart made in that letter is still absolutely valid. We are waiting for the submissions of the two rival networks, which we should receive later this month. A lot is happening this week; it is a busy week. One of the factors that we will carefully take into consideration is precisely the point that Graham Stuart set out in his letter: the degree to which there is local support. Clearly, one way to measure that is to talk to the local Members of Parliament and the local authorities; that will be critical in any decision-making.

Let me also address the question from the noble Baroness, Lady Worthington, on the costs of the trial. I cannot give the noble Baroness an overall cost yet because we have not received the final submissions from the networks, but I can say that consumers in the trial location will not be expected to pay more for their heating than they would have if they had remained on natural gas. They will also not be expected to pay for the installation and maintenance of either any hydrogen-capable appliances or any alternative heating option that they wish to go for.

Let me now address Amendments 53, 54 and 57, tabled by the noble Lord, Lord Teverson and the noble Baroness, Lady Sheehan. As noble Lords will know, decarbonising heat in buildings and industry is essential if we are to deliver net zero. One of the great things about this country, but also one of our problems, is the massive diversity and age of buildings in the UK, as a product mainly of the industrial revolution, and the diverse consumer needs. I think most reasonable people would accept that no single solution can provide the best option for everyone. I agree with the noble Baroness, Lady Worthington, that the majority of the solution will probably be electrification, but there will be some properties for which it is not suitable.

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[Baroness Worthington (CB)]

I want to press on the question of what is being trialled. The Minister mentioned feasibility, benefits and costs, but what about the environmental impacts of this trial? We are talking here about a global warming gas, and a very slippery gas because it is the smallest element—it escapes everywhere. Will the regulations contain measures to monitor the environmental impact of both the NO_x emissions in the home and the greenhouse gas impact of the hydrogen, which will leak when it is distributed that widely? Can that be included in the trial so we can also assess those disbenefits?

Finally, it is true that the only reason really that some houses might not qualify for a heat pump is if they are not very efficient. It is ironic that, for safety reasons, the leakier the house, the more likely it is to then be able to take hydrogen. This precious commodity, which is very expensive to produce and will be very inefficient, is being used in houses which are leaky and being made leakier to be made safer. It seems just so counter to everything we want to achieve on efficiency, resilience and climate change. I hope there will be a trial of the environmental impacts on air quality, climate change and energy efficiency, not just the benefits to the gas industry.

[Lord Callanan (Con)]

I know the noble Baroness has strong views on electrification but let me reassure her that this is precisely the purpose of the trial. We need to use an existing network to find out what happens to hydrogen in an existing network. Clearly, environmental monitoring and checking for leaks and so on is a crucial part of it. It is one of the reasons we need to do it on an existing network in an existing community, to find out what happens outside of theoretical lab experiments where it is very easy to set up a trial with new pipework, new valves and new equipment. I have visited hydrogen demonstration houses up in Gateshead, my home area. It works very well but these are brand new properties, constructed with hydrogen appliances and new pipework. That is not a very good trial as to how it would work in the real world in existing communities. That is why we need to do the trial. The things that the noble Baroness asked about are exactly what we need to be checking and monitoring to judge the effectiveness of any hydrogen experiments in the real world.

I turn to Amendment 56, tabled by the noble Lords, Lord Lennie and Lord Teverson, and the noble Baroness, Lady Sheehan. This amendment covers several aspects which I fully agree are important for the safe and effective delivery of the village trial. However, I assure noble Lords that the evidence that this amendment seeks to gather through a statutory consultation is already being gathered and will be reviewed by the department as part of our assessment process, following the submission of final proposals at the end of this month. As I said, in May 2022, we sent a joint letter with Ofgem to the gas networks setting out an extensive list of requirements that proposals for the trial should meet. This included requirements mentioned in the amendment, such as local support, costs, environmental impact and consumer protections, as well as many other important areas.

After the gas networks submit their proposals for the trial—later this week, as I said—the department will undertake a thorough assessment against the full list of requirements set out in the letter. That process will involve expert input from the various statutory bodies involved, including the Health and Safety Executive and Ofgem. We will publish the result of that assessment later this year, including the relevant evidence to explain our decision, and that will be available to all noble Lords. I reassure the House that we fully understand the importance of conducting the trial properly.

I touched on this earlier but the noble Lord, Lord Teverson, raised the point about local support for the trial. I reiterate that we will go ahead with a trial only in an area where there is strong local support. The gas networks are working closely with local authorities, communities and Members of Parliament as they develop their trial proposals. My officials also meet regularly with the relevant local authorities. Final proposals for the trial will need to contain evidence of strong support from the local community, validated by an independent external source, such as a local council. Again, I am happy to meet the local Members of Parliament.

The networks are extensively consulting local residents to develop an attractive consumer offer tailored to the community. They have opened drop-in centres in both Whitby and Redcar where anyone can engage directly with them and ask questions about what the project means for them, and have held a number of public events.

Safety is of course fundamental, which is the point made by the noble Baroness, Lady Sheehan. Before any community trial can go ahead, the Health and Safety Executive will need to be satisfied that the trial will be run safely. No trial will go ahead until all necessary safety assessments have been successfully carried out. I hope noble Lords will accept my reassurances on that.

If it goes ahead, the trial will start in 2025 and provide vital evidence that will be required to enable the Government to make decisions in 2026 on any potential future role for hydrogen in decarbonising heat. I hope noble Lords will accept that undertaking another formal consultation would duplicate the work that the department and the gas networks are already doing, and could delay important milestones for ultimately meeting net zero.

I agree that the trial must be conducted properly, and I have already spoken about the additional consumer protections that will be in place for the trial. Those protections, which must be met by the gas networks, also mean that the trial must be delivered with minimal disruption to consumers.

I hope I have been able to reassure noble Lords that the department will carefully consider all these factors in coming to a decision on the trial. Importantly, we will be closely examining the evidence and outcomes of the gas networks’ engagement with local authorities and consumers in the trial areas. I hope that, with the reassurances that I have been able to provide, the noble Lord, Lord Teverson, will consider withdrawing his amendment.

[Lord Lennie (Lab)]

Could the Minister please write to me about the questions I asked about entering properties and whether further guidance will be published and available?

[Lord Callanan (Con)]

As I said, the powers that we propose to provide are essentially similar to those that the networks already have on the basis of essential safety works. Still, I am happy to provide the noble Lord with further information and details.

[Lord Teverson (LD)]

My Lords, when the IPCC report on the global warming challenge came out last week, and it gave a pretty dire view, the Secretary-General of the United Nations, António Guterres, who I think had just been watching the Oscars, said it was

“everything, everywhere, all at once”—

but I do not think he would have included the village hydrogen trials within that broad definition. I understand what the Minister has said, and I welcome all his assurances to local citizens about how the trials will work, but, frankly, the science clearly says that hydrogen sent through the gas pipe network to a range of residential properties does not work, does not make sense and is not going to happen in the future.

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Moved by

[Lord Callanan]

55: Clause 112, page 100, line 26, leave out “may” and insert “must”
Member's explanatory statement
This amendment requires regulations under Clause 112 (regulations for the protection of consumers: hydrogen grid conversion trials) that make provision for the imposition of financial penalties to include provision for a right of appeal.

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Moved by

[Lord Callanan]

58: After Clause 113, insert the following new Clause—
“Treatment of recycled carbon fuel and nuclear-derived fuel as renewable transport fuelAfter section 131C of the Energy Act 2004 insert—“131D Recycled carbon fuel and nuclear-derived fuel(1) An RTF order may—(a) designate as recycled carbon fuel a description of liquid or gaseous fuel which is produced wholly from waste derived from a fossil source of energy;(b) designate as nuclear-derived fuel a description of liquid or gaseous fuel which is produced wholly using, or by a process powered wholly by, nuclear fuel.(2) Where a designation under subsection (1) is in force, the recycled carbon fuel or nuclear-derived fuel is to be treated for the purposes of this Chapter and any RTF order as renewable transport fuel.””Member's explanatory statement
This amendment, which inserts a new clause in Chapter 3 of Part 3 of the Bill, provides for recycled carbon fuel and fuel derived from nuclear energy to be treated as a renewable transport fuel for the purposes of renewable transport fuel obligations under Chapter 5 of Part 2 of the Energy Act 2004.

Electricity Supplier Obligations (Excluded Electricity) (Amendment) Regulations 2023

Lord Callanan Excerpts

Thursday 23rd March 2023 Lords Chamber

Moved by

[Lord Callanan]

That the draft Regulations laid before the House on 8 and 20 February be approved.

Relevant document: 32nd Report from the Secondary Legislation Scrutiny Committee. Considered in Grand Committee on 20 March.

Motions agreed.

Strikes (Minimum Service Levels) Bill

Lord Callanan Excerpts

Committee stage
Thursday 23rd March 2023 Lords Chamber

That is precisely what is wrong with this Bill and its imposition—I use that term because the noble Lord will no doubt repeat comments he has made before, and the noble Baroness the Minister has also said, “It is up to companies: there is no statutory obligation”. But he who pays the piper calls the tune. I am sure we will see Governments use these powers, whether through funding or other forms of coercion. No one will be fooled. I think it is dangerous for the Government; my advice to them is to stay out of industrial relations—it will only end in tears.

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

I thank the noble Lord, Lord Collins, for his helpful advice. I will be sure to pass it on to the Prime Minister.

[Lord Collins of Highbury (Lab)]

Ted Heath would have done.

[Lord Callanan (Con)]

He was slightly less successful than the current one.

Each amendment in this group seeks to add additional evidence-gathering or reporting requirements or scrutiny to the regulation-making powers in the Schedule to the Bill. Before addressing them, perhaps the Committee will permit me a moment to reply to the rather general points made by the right reverend Prelate the Bishop of Manchester. I am afraid that I fundamentally disagree with him. Recent strike action has demonstrated the disproportionate impacts strikes can have on the public, presumably including his parishioners. They have been unable to access work and healthcare or attend education classes and are worrying whether an ambulance will be there when they need it. Businesses are also crucially affected by industrial action; 23% of them could not operate fully due to industrial action in the UK in December and 2.4 million strike days were lost between June and December. I am sorry that the right reverend Prelate does not believe his parishioners need protecting from these actions, but this Government certainly do.

[The Lord Bishop of Manchester]

I have every concern for my parishioners and the members of the various parishes, schools and chaplaincies—everyone in my diocese, whether they are Anglican or otherwise. However, I do not believe that this legislation is taking us in the right direction or that passing it will create better ambulance, train or hospital services for the people in my diocese. We may disagree, but I assure the Minister that I speak on behalf of everyone in my diocese.

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[Lord Callanan (Con)]

They will also get to vote in democratic elections and make their feelings clear. By the very nature of the legislation, if a strike is taking place with no minimum services, given that this Bill imposes minimum services, his parishioners will get a better level of service once it goes through. However, we should have debated these points at Second Reading. I am sorry that the right reverend Prelate could not be present then.

Amendment 15, tabled by the noble Lord, Lord Allan, seeks to require the Secretary of State to lay a Statement before each House outlining how the regulations that set minimum service levels and specify the relevant services are both necessary and proportionate. As my noble friend Lady Noakes, who has had to go to the Financial Services and Markets Bill in Grand Committee, pointed out, this amendment adds unnecessary duplication. Sufficient checks and balances before the regulations can be made are already built into the legislation. This includes the need to carry out consultations and the requirement that regulations must be approved by both Houses before they can be made.

Key stakeholders, including employers, employees, members of the public—perhaps even churches—trade unions and their members are all encouraged to participate in the consultations and have their say in the setting of these minimum service levels before they come into effect. Parliament, including Select Committees, as they already have done, will have an opportunity to contribute to the consultation. Following the consultation, the Government will consider all representations and publish a response setting out the factors taken into account in determining the minimum service level to be specified in those regulations.

Subsequent regulations on MSL will be accompanied by an Explanatory Memorandum which will outline the legal effect of the regulations, to address the complaints of the noble Baroness, Lady Chakrabarti, and the noble Lord, Lord Cashman, and its rationale and why they are necessary. Impact assessments will also be published alongside the regulations, which will then be subject to the affirmative procedure. We think this approach is appropriate; it is a common way for secondary legislation to be made.

Amendment 36, tabled by the noble Lord, Lord Collins of Highbury, and the noble Baroness, Lady O’Grady, also requires the relevant Commons Select Committee to publish a report on how the Act will impact that sector before regulations are made. This will delay the implementation of minimum service levels—I suspect that is its intent—and extend the disproportionate impact that strikes can have on the public.

Amendment 36A, in the name of the noble Lord, Lord Hendy, would require the Government to lay draft regulations before each House of Parliament at least 28 days before the regulations are intended to be made, with an Explanatory Memorandum setting out factors taken into account in determining the MSL. These additional steps are, in our view, unnecessary and duplicative for the reasons that I have set out. The Government resist Amendments 16, 17, 20, 36 and 36A.

Amendments 38 and 39, in the names of the noble Lord, Lord Collins, and the noble Baroness, Lady O’Grady, would place limitations on the consultation provision, which the Government again resist. In the Government’s view, Amendment 39, as drafted, would not have the effect that noble Lords perhaps intended. In reality, it would require consultations to be published within a six-week window after the Act is passed, meaning that, by their very nature, future consultations after this period would then not be possible. Amendment 38 would prevent consultations taking place at all after the Bill has achieved Royal Assent. Both amendments would remove the ability to specify minimum service levels on an ongoing basis and, in our view, unduly limit our ability to respond appropriately as circumstances change—again, I suspect that this is the purpose of those who tabled the amendments. Key stakeholders are all encouraged to participate in the consultations to help shape the way MSLs operate. As I have made clear in previous responses, the Government have already published consultations on implementing minimum service levels in ambulance, fire and rescue, and rail services.

Amendment 40, in the name of the noble Lord, Lord Fox, would require the Secretary of State to lay a copy of a report in both Houses of Parliament, no later than six months after the Act is passed, setting out the findings of a review into the impact of the Act in regard to six key sectors. The noble Lord will be unsurprised to hear that I resist this amendment on the grounds that all the potential impacts of minimum service levels, including those on staffing, etc cetera, and the other factors the noble Lord mentions, will be considered as part of the process of making detailed regulations for those specified services. As I have set out on numerous occasions, these regulations will be accompanied by detailed impact assessments. We have also committed to conducting the usual review of the full impact of the Act within five years of the first secondary legislation coming into force. We believe that is a much more appropriate timescale to review the impacts.

I apologise to the Committee if I have spoken at length but there were a lot of amendments in this group. I hope I have been able to provide at least some reassurance on the consultation processes that we intend to undergo prior to making regulations, as is required by the Bill.

I was going to say that I hope noble Lords will feel able not to press their amendments, but I see that some noble Lords are seeking to intervene.

[Baroness Chakrabarti (Lab)]

I want to ask a question of the Minister, just to be clear in my own mind. The trade unions say that the Government do not need these powers to enforce minimum service level agreements because they are reasonable and negotiate voluntarily and will continue to do so—they say it is not necessary to legislate. The Government disagree with that and legislate. Then, when some of us say that there needs to be a transparent process and proper consultation because this is such grave legislation for trade union rights, the Minister responds by saying, “No, no—we do it anyway, so we don’t need to put that on the face of the Bill”. Is there not a contradiction at the heart of this argument? The Government will legislate only one way: for powers for the Secretary of State but never for scrutiny of the Secretary of State. How is that consistent with what the Government say to unions, who are saying do not legislate for this because reasonable agreements will be negotiated in any event?

[Lord Callanan (Con)]

On a number of occasions, including the first day of Committee, I have made it clear that if voluntary arrangements are in place, which there are in some services, that is our preferred approach. However, it is the case in certain ambulance services that those voluntary arrangements were not agreed until literally the night before the strike action was due to take place, and indeed some trade unions then changed their minds about voluntary arrangements. We therefore think it is appropriate to have the back-up power. If they can be agreed, that is our preferred approach. The approach outlined by the noble Baroness is the normal process of consultation. If Parliament chooses to give the Government these powers—we will see the outcome of the debates in both Houses—then we will consider whether it is appropriate to make these regulations or not, given the circumstances in each case. Those regulations will then be further approved by Parliament.

[Lord Fox (LD)]

I have two points. In answering the noble Baroness, Lady Chakrabarti, the Minister used the ambulance service as an example of the Government having to use the power. I understood that it was the employer that used the power, and in the case of ambulance workers the Government are not the employer. Can the Minister perhaps square that language?

In a rather less difficult answer, in dismissing one of the amendments tabled by the noble Lord, Lord Collins, the Minister said that the process of publishing information at parliamentary level would take too much time. It is on the record that a recent former Transport Secretary of State said that the Bill will not solve the current problems. What is the Government’s time target for this, given we know that the Minister thinks one of the amendments would take too much time? What is sufficient time? When do the Government expect the Bill to be in place, all other things being equal, and what is the hurry?

[Lord Callanan (Con)]

On the noble Lord’s first question, as he well knows, it is the Government’s job—or duty, if we get the legislation through—to make the regulations, and then it will be at the discretion of employers whether they use the powers that are given to issue work notices. We have debated this many times.

With regard to the timetable, these things are beyond my authority level. It depends how quickly the Bill goes through Parliament, how many amendments there are, how long ping-pong takes, and the scheduling of the legislation by the usual channels. I hope we will get the legislation through as quickly as possible. Of course, I hope that we never need to use it, as I have said before, but we think it is appropriate that the power should be there as a backstop.

[Lord Hendy (Lab)]

My Lords, I am sorry to trouble the noble Lord a moment further, but could I invite him to express a view on the report of the Delegated Powers Committee? It points out that there is no detail in the Bill and criticises it for that. Does the noble Lord accept that criticism?

[Lord Callanan (Con)]

We will be responding in due course to the report from the Delegated Powers Committee. I entirely accept that this is a wide secondary-legislation-making power for the Government, but we think that it is appropriate in these circumstances.

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

[Lord Allan of Hallam (LD)]

My Lords, I am sorry the Minister did not feel comfortable accepting the amendments in this group, but I think it has been a helpful debate.

The noble Baroness, Lady Chakrabarti, and the noble Lord, Lord Collins, both talked about the potential for inserting friction into industrial relations. These Benches very much agree that that may be the effect of these regulations, so we think it is right to insert a certain level of friction into the legislative process to try to head off what may be a very poor outcome.

The noble Baroness, Lady Noakes, who I understand is now in Grand Committee, talked about the measures as being “not draconian”, which is an interesting framing. However, the fact is that they impact on people’s fundamental rights. Whether it impacts one person, a thousand people or a hundred thousand people, the general principle is that one should be much more careful with any legislation that affects fundamental rights. My amendment was trying to make sure that we had a framework which reflected that.

There is an old maxim that if you only have a hammer, everything looks like a nail. In this Bill, the Government are granting themselves the power to create a hammer which will be offered to employers, but employers may prefer to meet their staff with other tools, such as cash or commitments to a negotiated settlement. In this debate, concerns have come out once more about what happens when the only tool you offer employers is the hammer and the potential knock-on effects of that.

It is right that we are testing whether the Government really will use those powers only in extremis, because “can’t” is often used when “won’t” is closer to the truth, until “won’t” becomes “will” and “can’t” is miraculously turned into “can”—as we have just seen with the recent move to settle the health disputes. That is another example of the Government saying that something is impossible—like minimum service levels are impossible—and then it becomes possible. I hope the Government will strengthen the Bill before Report to make sure that “can’t” really means “can’t” when it comes to negotiated minimum service levels. With that hope, and not yet entirely jaded by experience, I beg leave to withdraw my amendment.

Strikes (Minimum Service Levels) Bill

Lord Callanan Excerpts

Committee stage
Thursday 23rd March 2023 Lords Chamber

[Lord Fox (LD)]

My Lords, I fully expect the Minister to stand up and tell us that none of these amendments, which have been put so well by noble Lords, is necessary. I expect him to say that there is no possibility of the Bill, once it becomes an Act, breaking or impairing our relationship with the international organisations that noble Lords have mentioned. I wonder how he will be able to say that, given the nature of the Bill.

We come back to its skeletal nature and the answer which nobody seems to know to the question “What is a minimum service level?” Until we know, we do not know whether the Bill breaks any agreements that we have with organisations in this country or around the world. I refer your Lordships to our previous debate in Committee, in which we discussed correspondence with the noble Lord, Lord Sharpe, in which he represented the issues around the fire and rescue services. I remind noble Lords that, after I prompted him on why the consultation had raised the issue of the Grenfell Tower fire and the Manchester Arena bombing, the Minister—the noble Lord, Lord Callanan—said that one thing the consultation sought to probe was that the minimum service level would include the ability to cope with issues on that scale. He did not disagree with me when I came back and said that that implied that 100% of the fire and rescue services in an area would need to have been named in the work order under a minimum service level. In effect, that would ban striking.

In the event of such a minimum service level, that calls into question our relationships with the ILO, the EU under the TCA and others, because it is a de facto ban on striking. It may or may not upset those relationships, but I want the Minister to be able to say what minimum service level is being modelled when he tells us that we do not need to worry.

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

My Lords, I sometimes wonder when I listen to the noble Lord, Lord Fox, whether I need to bother replying to these debates, because he has written my speeches before I get up. For the benefit of the House, I will go through this anyway.

Amendments 18A, 18B, 32B and 36C all relate to the UK’s international obligations. Before I deal with the amendments in detail, it is worth reiterating, as I have previously and as we debated last time round with the noble Baroness, Lady Chakrabarti, that the Government firmly believe that the Bill is compatible with our convention rights and complies with all international conventions that the UK is signed up to. I signed a statement to that effect.

Amendment 18A in the name of the noble Lord, Lord Hendy, looks to ensure that the Bill does not prevent people from taking strike action and cannot be used to create an offence. I oppose this amendment because its effect would be to prevent any minimum service levels from being implemented at all. He will understand my reservations, given how the Bill is drafted in respect of the operation of work notices and where an employee would lose their automatic protection from unfair dismissal for industrial action if they participated in a strike while being named on a work notice. To be clear, our Bill does not prohibit strikes or other industrial action, but it does enable employers to continue to deliver a minimum service level to their users and stakeholders during and notwithstanding that action.

The Bill is about balancing the ability to strike with the rights and freedoms of others. Preventing minimum service levels being implemented does not strike a balance; it would merely maintain the current disproportionate impacts that strikes can have on the public—although I expect that that is a cause of legitimate disagreement between us.

Amendment 18B would ensure that the regulations did not compromise our obligations under the trade and co-operation agreement. However, given the reiteration I made earlier, we believe that this amendment is duplicative and unnecessary. The Government remain committed to our international obligation and respect the process of the respective governing bodies in providing any rulings that are required concerning compliance. I recognise that the noble Lord, Lord Hendy, has a desire for relevant international conventions and treaties, and their associated governing bodies, to have a greater role in respect to minimum service levels in Great Britain. But my argument here is that incorporating decisions by supervisory committees into domestic primary legislation, as this amendment seeks to do, goes way too far.

Amendment 32B, tabled by the noble Lord, Lord Collins, and the noble Baroness, Lady O’Grady, seeks similarly to prevent minimum service regulations being made where they could be said to be within scope of the trade and co-operation agreement and other international obligations. As I stated at the outset, the Government firmly believe that we are entitled to bring forward this legislation—many other European countries already have similar legislation—which I remain satisfied is compatible with all the international conventions the UK is signed up to. The noble Baroness will, of course, be aware that there are existing mechanisms for monitoring adherence to the trade and co-operation agreement—if indeed there are concerns from EU member states or the European Commission, although I do not believe there will be.

In any case, I am surprised if anybody thinks that ensuring that the public are able to access some level of service in key sectors, including emergency services, during strike action goes to the heart of the TCA, not least because many EU member states already have minimum service level arrangements in place. Indeed, in some of the services we have mentioned, some member states ban strike action completely in those areas. As drafted—and perhaps not intentionally—this amendment would prevent minimum service levels regulations being made at all, which, given that is the purpose of the Bill, we clearly cannot accept.

Finally, on Amendment 36C from the noble Lord, Lord Hendy, and to respond to the points the noble Baroness, Lady Chakrabarti, and the noble Lord, Lord Woodley, made, as I have stated previously, the Government firmly believe that the Bill is compliant with convention rights and international conventions. The Bill also enables regulations to be made in a way that is compliant with the convention rights, and on making those regulations, Secretaries of State will need to carefully consider the relevant articles of the ECHR, alongside international conventions, if they choose to suggest minimum service regulations to Parliament. So they will also have to make similar statements.

I highlight that this amendment seeks to restrict minimum service levels so that they can be made only where they are necessary to provide protection for the life, personal safety or health of the whole or part of the population. While the protection of life and health are indeed important aims of minimum service levels in areas such as healthcare—

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

I apologise to the Minister—it took me a while to find this on my system. He referred to minimum service levels being common in other European countries. I submitted a Written Question on this, to which the noble Lord, Lord Johnson, replied:

“The Government does not believe that direct comparisons with other European countries are particularly helpful because of the different administrative and legal frameworks governing industrial action.”


The Minister will also be aware that the overwhelming majority of the other countries in Europe that are cited provide for negotiated minimum service levels, not state diktat.

[Lord Callanan (Con)]

I did not say that they were particularly common, just that they exist in some European member states. Of course, provisions, agreements, labour relations, laws, relations with trade unions, et cetera, are different in other member states. The example I cited last time was border service provisions; many member states prohibit, in effect, strikes by border service personnel because those services are delivered by police, army or military services. The arrangements are different in other member states, but that goes to my point that we are entitled to do what we believe appropriate for the United Kingdom. However, similar provisions—albeit in different circumstances—exist in other member states of the European Union and other democracies worldwide. Noble Lords will remember from the previous Committee day the reasons we have given for believing that the six sectors in the Bill are correct.

The amendment would incorporate into domestic law decisions of supervisory committees of the ILO. These committees’ conclusions and recommendations are non-binding; they are intended only to guide the actions of national authorities. The only body with explicit competence to interpret ILO conventions is the International Court of Justice. I highlight to the noble Lord, Lord Hendy, that the ILO supervisory committee has stated that minimum service levels can be made in services

“which are not essential … but where the extent and duration of a strike might be such as to result in an acute national crisis endangering the normal living conditions of the population … and … in public services of fundamental importance.”

We do not believe that we are in contravention of our ILO duties. The amendment does not provide for minimum service levels in those circumstances, and I am therefore puzzled as to why the noble Lord did not include them in it, given that they were referenced previously in Committee and today.

I hope that, with these reassurances, I have been able to persuade noble Lords to withdraw and not move their amendments in this group.

[Baroness Chakrabarti (Lab)]

My Lords, I have two quick questions about the Minister’s answer to my noble friend Lord Hendy. First, I think I understood from his answer that he thinks that Amendment 18A would drive a coach and horses through minimum service level agreements. This may be an argument about “prohibit” or “prohibition”, because my understanding of the Bill as drafted is that, where a minimum service level agreement is imposed by regulations, that will remove some of the existing protections in trade union law. The Minister clearly wants that to be the case, but surely he is not suggesting that, for example, regulations should be able to impose criminal or civil penalties on workers. If that is not his intention, could something like Amendment 18A not be welcomed to make sure that regulations could not create that level of penalisation in the Bill? If regulations cannot criminalise workers, it is important that that is on the face of the regulation-making power.

Secondly, on the ILO as opposed to the ECHR, I think I heard the Minister say that the only body competent to determine compliance with the ILO is the International Court of Justice. That is hardly taking back control, and it is completely inconsistent with this Government’s permanent position on the Strasbourg court and the ECHR. What would be wrong with a domestic court having the ability to scrutinise whether or not regulations made by a future Secretary of State comply with the ILO conventions?

[Lord Callanan (Con)]

I will deal with the noble Baroness’s two questions. First, the reason I opposed Amendment 18A from the noble Lord, Lord Hendy, is that we believe it would effectively kill the Bill—indeed, this may be the noble Lord’s intention. This is because where a person is named on a work notice, they are effectively prohibited from striking for the day that they are identified to work; they would lose their automatic protection from unfair dismissal for industrial action if they did participate in the strike. This means that regulations for minimum service levels could not be made within the current drafting of the Bill. They would enable the prohibition of participation in a strike, and therefore the minimum service level could not be implemented—thus killing the Bill. I am sure the noble Lord, Lord Hendy, would be very happy if that were the case, but noble Lords will also understand that that is why the Government oppose the amendment.

Supervisory committees of the ILO are not entitled to interfere in UK law. There are conventions that we are signed up to, but the only way to interpret the decisions of the ILO is through the provisions of the ICJ. I am not a legal expert, but I can get legal clarification that it is possible for the ECHR to take into account the rulings of the ILO when adjudicating the relevant provisions in the ECHR.

[Baroness Chakrabarti (Lab)]

Please forgive me; I do not mean to be difficult, but these are very important points and I do not think I made myself clear in the way I put the questions to the Minister. I will try just one more time.

I do understand that the Minister intends that once minimum service level agreements have been imposed by regulation, employees who breach work notices will lose their protection from dismissal. I understand that as the ultimate sanction against them in the Bill. But my understanding of Amendment 18A is that it is also trying to deal with things such as regulations being used to create new criminal offences or new civil penalties—things that are not just removing protection from dismissal. Is the Minister prepared to say, in Committee, that this is not the intention behind the regulation-making power? Accordingly, will he consider amendments at a later stage to that effect?

I was not suggesting that it is about the Strasbourg court adjudicating on the ILO. I was suggesting that in our domestic public law, our courts are normally capable of second-guessing the legality of regulations. If that is to be the case, will our courts be able to determine whether regulations comply with the ILO?

[Lord Callanan (Con)]

I am happy to give the noble Baroness the commitment she seeks. There is no intention to create any criminal offence within this Bill; it does not do that, and it is absolutely not our intention.

On her follow-up question, the provisions in the TCA relevant to minimum service levels include commitment to ILO conventions, non-regression and rebalancing. Enforcement mechanisms vary, depending on the particular provisions. For the non-regression clauses, enforcement mechanisms include consultation and escalation, involving panels of experts and potential rebalancing measures, all of which would take place at an international level and cannot bring any claims in the domestic courts. I hope that gives the noble Baroness the reassurance she is looking for.

[Lord Hendy (Lab)]

My Lords, I am very grateful to the Minister for the clarity of his answer, and to all noble Baronesses and Lords who participated in the debate. I will not do them the disservice of attempting to summarise their speeches.

Let me deal with two points arising from what the Minister has said. First, he asked whether my intention is to kill the Bill. It would certainly be my desire, but that is not the effect of these amendments, for sure. He says Amendment 18A and the other amendments would prevent minimum service levels being set. That is simply wrong, as a matter of law. There is nothing to prohibit the minimum service levels being set. What the amendments propose is that the minimum service levels be set in such a way that, first, they cannot penalise workers for going on strike—individual workers who are requisitioned to provide service under a work notice should not be penalised, in accordance with the jurisprudence of the European Court of Human Rights—and, secondly, they comply with the standards of the ILO and the European Social Charter.

That brings me to my second point, which is the importance of the ILO. I say this with the greatest respect, but I am not sure the Minister has quite understood the position of the ILO in the hierarchy of international law so far as the United Kingdom is concerned. Before I explain that, I will make one thing clear: the Minister read a passage from one of the supervisory bodies of the ILO—it was in fact the committee of experts—and suggested that I had not quoted it. I read that very passage on to the record earlier this afternoon; I think Homer might have nodded briefly and missed that. The Minister said that the decisions of the ILO are not binding. In one sense, of course, that is true. Britain was the first country in the world to ratify Convention 87, which is the most ratified of all the conventions of the ILO. It is an international treaty and we are bound by it, but I agree that it is not binding in domestic law.

Secondly, ILO conventions and their jurisprudence are taken into account by the European Court of Human Rights in interpreting the various articles of the European convention, particularly Article 11. If you want to know what Article 11 has to say about the right to strike, it is no good looking at the text of that article. What you have to look at are the decisions of the European court. Every one of them refers to the jurisprudence of the ILO and the European Social Charter in defining what permissible restrictions there may be on the right to strike.

The third reason the ILO is so crucial is because of the trade and co-operation agreement. This is the point I was endeavouring to communicate to the Minister, but I think I failed to do so. I read a few words from Article 399 of the trade and co-operation agreement, but let me read a sentence. Article 399(2) says that

“each Party commits to respecting, promoting and effectively implementing the internationally recognised core labour standards, as defined in the fundamental ILO Conventions”.

So we are bound by the fundamental ILO conventions. Article 399(5) makes specific reference to implementing the provisions of the ILO conventions ratified by the UK and the provisions of the European Social Charter ratified by the UK.

It is not a question of the ILO interfering in the domestic jurisdiction of British courts or the British Parliament. We have chosen to be bound by the provisions of the ILO—a choice that we repeated in 2021 when we ratified the TCA. The fact of the matter is that we do not comply with the requirements of the ILO in relation to minimum service levels, particularly—I mentioned this earlier, but the Minister did not deal with it—because the ILO requires that minimum service levels are set with the intervention or input of the social parties, particularly the trade unions, and that there should be a specified mechanism for resolving any disagreements. That is not what the Bill provides, so we may well be in breach. Having said all that, I beg leave to withdraw my amendment.

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It is so much better to work with employees on a voluntary basis. This has been done in many cases during the recent spate of strike action, and it has worked well. The Bill would destroy that way of working.

[Lord Callanan (Con)]

My Lords, I will now reply to the debate on Amendment 21, tabled by the noble Lord, Lord Fox, and Amendment 23 in the name of the noble Baroness, Lady Randerson, which have been grouped. These seek to limit how and when a work notice can be issued by an employer.

Amendment 21 seeks to place an additional and, in our view, burdensome requirement on employers in relation to issuing a work notice. Amendment 23 seeks to alter, fairly fundamentally, how a work notice operates. Both amendments would create unnecessary uncertainty for employers, unions and workers around their respective obligations for work notices.

Amendment 21 requires the employer to exhaust all options to prevent a strike before they issue a work notice. However, it is my submission that employers are already incentivised to avoid strike action due to the substantial cost and disruption that it causes them. If a trade union has given notice of a strike under Section 234A of the 1992 Act, which must happen before any work notice can be given, it seems reasonable for the employer to assume that the options to avoid a strike have, in fact, already been exhausted for the purposes of producing a work notice.

It is also not clear what the test would be for an employer to show that all the options had been exhausted to prevent a strike, creating significant uncertainty for employers and trade unions. The Bill does not prevent employers and unions continuing to negotiate to reach a settlement on the broader trade dispute and, we would hope, for the strikes to be called off. However, we know that negotiations can be complex and can cause uncertainty, so all parties, especially the public, need the fundamental reassurance that the minimum service will operate on a particular strike day. Therefore, the Government resist this amendment.

Amendment 23 seeks to alter how work notices are to operate by specifying that the work notice must identify only the number of persons required to work during a strike rather than actually naming them. There are a number of problems with this approach. First, trade unions are required under the legislation to take reasonable steps to ensure that members identified in the work notice comply with that notice. For that to be true, the trade union would need to see the work notice and to know which union members have been identified as required to work in order for it to take those reasonable steps to ensure that those members attend work rather than going on strike. Secondly, this amendment could lead to confusion between employers and workers about who exactly is required to work, particularly in instances where a large number of individuals are employed to deliver essentially the same duty—for instance, call handlers. There would no longer be workers

“identified in a work notice”

for the purposes of paragraph 8(3) in Part 2 of the Schedule. Consequently, the provision removing the automatic protection from unfair dismissal would presumably also not apply, and therefore cannot be accepted.

I reassure noble Lords that individuals named on a work notice will be notified of this as regards themselves only. They will not be issued with the work notice itself, and the work notice will not be a public document. Unions will be bound by data protection law in the usual way, and there will be no sanctions or consequences for individuals if the minimum service level is not then achieved.

Identifying individuals to work in advance of the strike day helps to provide clarity for workers, unions and employers about who exactly is required to work and the arrangements for that particular working day, as well as strike. Without this we believe it will cause confusion and would potentially lead to minimum service levels not being achieved, continuing the disproportionate impact strikes can have on the public, as well as potentially costly and unnecessary litigation between unions and employers.

Finally, let me pick up on the questions asked by the noble Baroness, Lady O’Grady.

[Lord Monks (Lab)]

Would the Minister accept that there is tremendous scope for victimisation in the provision that he is talking about, which this probing amendment is opening out? If the work notice is imposed on union officials—convenors, shop stewards, secretaries or whatever—they are in an extremely vulnerable position. They may have been doing the negotiation. They may have been regarded by the employer as awkward. All of a sudden they are put in the frame to say that you are coming into work, regardless of the role they may have played in the origins of the dispute. Is this not a victimisation permit for employers to use in all kinds of circumstances?

I worked in a place where the senior steward had been sacked and was victimised, and it is quite a common occurrence—other colleagues here will perhaps know more about that than me. It seems that the Government are giving a blank check to employers to take on individuals who are prominent in the union, and putting them in an impossible position of being summoned in by the employer at the same time as they may well have been leading the workers in the particular dispute that is taking place. What would the Minister say about that idea that he is giving a charter for victimisation?

[Lord Callanan (Con)]

I understand the noble Lord’s concerns but I do not believe he is justified in his worries. The Bill is clear that an employer must not have regard to whether a worker is or is not a member of a union when issuing a work notice. If an employee feels that they have been unfairly targeted then they can raise a grievance with their employer or ultimately take legal action to challenge whether the work notice complied with the law. That would then be a matter for the courts to decide.

[Lord Blunkett (Lab)]

I have listened with great care to what I think has been an analytical destruction of the very heart of this Bill. If, as the noble Lord has already enunciated, the right to take action for unfair dismissal is automatically removed by this Bill, how on earth can an individual take a grievance?

[Lord Callanan (Con)]

I do not understand the point the noble Lord is making.

[Lord Blunkett (Lab)]

I used to teach industrial relations a long time ago—I may be rusty. The purpose of unfair dismissal protection is that the employer cannot arbitrarily take away the right of a person to their employment unless they have good cause. If they have declined, and have taken a grievance following the notice they have been given, and unfair dismissal protection has been withdrawn, how can that grievance procedure be proposed and implemented?

[Lord Callanan (Con)]

They lose their protection only if they do not comply with a work notice. The whole principle of this—as the noble Lord has studied industrial relations, he will understand—is that, for a strike to be lawful, effectively you are breaking the contract you have with your employer. If the strike is lawfully called, you are entitled for the purpose of industrial action to break that contract. This merely reinstates that contract between you and your employer. If a work notice is issued and you do not comply with it, it would be treated as an unauthorised absence. There is no intention to say that that will result in dismissal. I would have thought that that would be very much a last course. As I said at Second Reading, we do not believe it will result in people being dismissed. We believe people will comply with the regulations and the law, and that the Bill will have the effect that we intended.

[Lord Hendy (Lab)]

I am sorry but I did not quite understand the Minister. I can see that dismissal for refusing to comply with a work notice might be a matter of last resort for the employer, but we are dealing here with the potential for bad employers to take the opportunity to sack somebody, and they might sack somebody without notice. If they do that, there is no possibility at all of the worker taking up a grievance. I do understand what other legal avenues there might be for such a worker—I can visualise none.

[Lord Callanan (Con)]

I was responding to the point I was asked about, and I made the point that, under the Bill, it is clear that an employer must not have regard to whether a worker is or is not a member of a union when issuing the work notice. I was outlining procedures that they could then follow if that was the case. Ultimately, they could challenge it in court, and that would be a matter for the courts.

I was going to go back to the point from the noble Baroness, Lady O’Grady, but I see that the noble Baroness, Lady Randerson, wants to intervene.

[Baroness Randerson (LD)]

In order to reassure me on the issue of names becoming public, the Minister said that names would not be made public and—I assume this is what he meant—would remain private between the employer and the employee. I just want to tease out how this will actually work. Apart from the fact that the person concerned would turn up at work on that day and so it would no longer be private, how would trade unions and other workers be able to challenge any of this legally? How would they challenge the overall balance of the decision-making of the employer and the fairness in the way in which all this has been carried out, particularly if someone were to end up losing their job as a result of the whole process? How would there be any legal assurance about this if the whole thing is cloaked in mystery?

[Lord Callanan (Con)]

Let me outline the procedure for the benefit of the noble Baroness. The work notice will not be a public document. The Bill makes it clear that current data protection legislation applies, while allowing the employer to provide the work notice to a trade union so that the Bill can be effective. Under the Bill, trade unions are required to take reasonable steps to ensure that their members who are identified in the work notice comply with that work notice. The trade union therefore of course needs to see the work notice and to know which union members may be named, in order to enable it to take those reasonable steps. Unions will otherwise be bound by data protection law in the usual way. Additionally, while those named on a work notice will be notified about that regarding themselves only, they will not be issued the work notice itself. Naming individuals to work in advance of the strike day helps to provide clarity to the workers, to unions and to employers regarding arrangements for that working day as well as the strike.

If the Committee will now permit me to move on and answer the question posed by the noble Baroness, Lady O’Grady, that may provide some clarity on the Government’s thinking in this respect. The first question the noble Baroness asked was whether Secretaries of State have a say in who is identified in a work notice. Fundamentally, the work notice is a matter for the employer, so there is no way that Secretaries of State can influence who is identified on a work notice.

Secondly, the noble Baroness asked whether a worker would be in breach of a work notice if they were sick on the relevant strike day. Workers should of course be supported if they are unwell and cannot work, and it remains the case that if a worker is too unwell to work, they are not obliged to work under a work notice. I hope that provides the clarity the Committee is seeking on this point, and I therefore hope that the noble Lord can withdraw his amendment.

[Lord Fox (LD)]

My Lords, this debate has revealed—or rather, not revealed—more than I expected. I am grateful to the Minister for imaginatively making things up as he goes along, which is what this seems to be. We have a Bill in which none of the details is included, and we are relying on the Minister to flesh out from the Dispatch Box how the Bill will work. [Interruption.] I am not talking about what the Bill is, but how it will work.

At least two misapprehensions are driving that interpretation of how the Bill will work—not what it says in law, but what it will do. The first is that the nature of the service sectors the Bill has identified is such that they are politicised. The Minister’s description of the interplay between employer and employee is an unrestrained free-market description, but we know—and this is why I was talking in the last group about using the current dispute as a model—that this is not a pure-play employee/employer relationship. There are three parties in this dispute, and the third party is the Government. By experience, behind the scenes and sometimes in front of the scenes, the Government have been part of the process of progression of these disputes, and in the end, they have been the arbiter of whether or not they were settled. So the Minister’s description of the nature of the dispute in which these minimum service levels and work orders would be used is an inaccurate model for us to consider.

The Minister speaks of the unions and the workforce as if they are two separate entities. We have to understand what the Minister thinks a union is. In large part, the union is the workforce, so keeping the work order secret from the workers by giving it to the union is an interesting concept.

The second misapprehension is that the Minister is expecting the union to oversee the work order, which is a list of names. We know from the Bill, because it specifically says so, that the names on that list could and should be either union members or non-union members. How does the union deal with the non-union members? Is it fair for the non-union members to have their names on the union’s list? These are the sort of practical details we do not have to hand because we do not have a description of work orders and minimum service levels. That is the problem the Minister is having to deal with and is working very hard to do so.

I will look very hard at Hansard because I find it very difficult to understand how the Minister sees the unions and the workforce operating independently in a workplace. Leaving that to one side, I beg leave to withdraw Amendment 21.

--- Later in debate ---

[Lord Fox (LD)]

I will speak very briefly to this group of amendments; I will make no attempt to emulate the speeches from either the noble Lord, Lord Woodley, or the noble Baroness, Lady O’Grady, who have great experience in the union movement.

In the Bill, there is a specific requirement for the unions “to take reasonable steps” to implement work orders. On these Benches, there is still no understanding of what “reasonable steps” actually means and what legal jeopardy unions would be in if they did, or did not do, particular activities. However, I characterise this collection of amendments as causing the employers to take reasonable steps not to victimise members of the union as a result of this legislation. Therefore, it adds a mirror to the reasonable steps that the unions have to observe, so that the employers should similarly observe the same steps—and I support the spirit in which the amendments have been delivered.

The noble Baroness, Lady O’Grady, mentioned private sector deliverers. Having read the letter from the noble Lord, Lord Markham, my reading is that he rules providers such as Amazon out of the remit of this legislation. It would be helpful if the Minister could confirm whether my interpretation is correct. I credit the noble Lord, Lord Markham, with coming to your Lordships’ House and participating in Committee. We had no such benefit of a Transport Minister, and we still do not know the position of private sector suppliers of services in the transport industry. While we seem to have an explicit ruling out of private sector deliverers in the health service, we have no such ruling out in the transport sector. Will the Minister, in responding to or confirming my interpretation of the letter from the noble Lord, Lord Markham, also tell us whether the similar and other deliverers of private sector services, which are crucial to the railway industry, will be included in the remit of the Bill, or, as in the health service, not included?

[Lord Callanan (Con)]

My Lords, I thank all noble Lords who have participated in this short debate: the noble Lords, Lord Collins, Lord Hendy, Lord Woodley and Lord Fox, and the noble Baroness, Lady O’Grady.

Amendments 22 and 24 to 31 all relate to placing additional requirements on the process of issuing our famous work notice. It is the view of the Government that the current requirements in the Bill strike the right balance between the views and perspectives of employers and unions to enable a reasonable and fair work notice to be issued. The Bill explicitly requires that employers must consult a relevant trade union, and have regard to their views, before issuing a work notice. Additionally, work notices must not include more persons than are reasonably necessary to meet the minimum service level and employers, as I said earlier, must not have regard to whether a worker is or is not a member of a trade union when producing that work notice.

I respond, first, to the point made by the noble Baroness, Lady O’Grady, who waxed lyrical about Amazon warehouses. While it is possible for a private business to be in the scope of minimum service level regulations, if they provide a relevant service as specified within the regulations, I am happy to reassure the noble Baroness that the Government have no plans or intentions to apply minimum service levels to Amazon.

Amendment 22 tabled by the noble Lords, Lord Collins and Lord Hendy, and the noble Baroness, Lady O’Grady, would limit the issuing of work notices to recognised trade unions only. However, it is of course possible that strikes can be called by recognised and unrecognised trade unions, which can lead to disproportionate impacts on the public. It is therefore our view that MSLs must be able to be applied where a union, recognised or not, provides a strike notice to an employer.

I move on to Amendments 24 to 31 from the noble Lord, Lord Collins, and noble Baroness, Lady O’Grady. Amendment 24 looks to ensure that employers cannot name more persons than necessary to secure the minimum level of service. However, it is already recognised that employers should not roster more people than are needed to achieve a minimum service level, so that some workers can continue to take strike action if they wish to—that is the whole principle of the Bill. That is why the Bill already requires employers not to identify more persons than are reasonably necessary. This enables the employer some limited flexibility in providing for contingency to respond on the day to any operational incidents, sickness or other types of absence. In our view, the existing approach strikes the right balance and provides sufficient safeguards for workers. To go further would limit or eliminate an employer’s flexibility, which could then mean that minimum service levels—the whole point of the legislation—would not be achieved.

Amendments 25 and 26 both look to ensure that each individual is able to go on strike for at least part of the period of the strike, notwithstanding any work notice. The Government resist these amendments for three reasons. First, the number of days on a strike notice could be substantial across both short and long periods for which the union has a mandate to strike. It is therefore reasonable that some workers may need to work more than 50% of those strike days, especially if their colleagues are off sick, on leave or attending training. Secondly, these amendments would cap the minimum service level and reduce the influence of the consultation, and those who respond to it, in the setting of the minimum service level. Thirdly, Amendment 26 appears to prevent any work notice being given where there is only one day given on a strike notice, which therefore creates a loophole which could be exploited—that may have been the purpose of the amendment.

Amendments 27 and 28 look to require the employer to ignore a person’s trade union activities or use of trade union services in deciding whether to identify a person in a work notice. However, we believe the Bill already sufficiently protects against any discrimination regarding a worker’s union status when employers are preparing their work notices. The trade union activity or services that a union member may have been involved in are connected to whether they are a union member, which, as we have already said, the employer must not have regard to.

Additionally, existing legislation—Section 146 of the Trade Union and Labour Relations (Consolidation) Act 1992—already provides a remedy for workers who are discriminated against on union grounds, and that section will continue to be applicable here. Therefore, we believe the amendment is duplicative in nature.

[Lord Collins of Highbury (Lab)]

My noble friend Lord Woodley raised the issue of a health and safety rep, who does not necessarily have to be a union rep or even a union member but may well be victimised because of their activity in protecting workers. Will the Minister ensure that is explicitly addressed?

[Lord Callanan (Con)]

I do not accept the word “victimised”. A work notice effectively says that somebody has to fulfil their whole working contract as normal, whereby they come into work and get paid for it. That is not victimisation in any conventional sense of the word.

[Lord Hendy (Lab)]

The Minister raises Section 146 of the 1992 Act, which protects against detriment on union grounds, as he rightly says. But “union grounds” means either union membership or union activity, and Section 151 is the same protection against dismissal on grounds of union membership or union activity. Can the Minister explain why only union membership is protected in this Bill and not union activity?

[Lord Callanan (Con)]

It is because, as we already said, Section 146 of the Trade Union and Labour Relations (Consolidation) Act already provides a remedy for workers who are discriminated against on union grounds. That section will remain applicable here, as I said earlier.

[Lord Hendy (Lab)]

I apologise for intervening again. The point is that Sections 146 and 151 specify membership and activities, whereas this Bill protects against discrimination on the grounds of union membership alone. If the same protection against union activity is required in Sections 146 and 151, it should be required here as well. The obvious implication, if you were arguing a case in court, is that that protection is not given under this Bill, otherwise it would have been included.

[Lord Callanan (Con)]

I will seek further legal advice. I am not a lawyer, but it seems to me that if the provision already exists in other applicable legislation, there is no need to duplicate that provision in another statute. I will certainly check that with the lawyers for the noble Lord.

Amendment 29 seeks to require the employers to be satisfied that the work notice does not identify more people than reasonably necessary before giving a work notice. However, as we set out in new Section 234C(5), the employer is already required to not identify more persons in the work notice than are reasonably necessary for the purposes of providing MSLs.

Amendment 30, meanwhile, seeks to require the employer to assess the equality implications of the work notice. Again, in our view, this is not necessary. The Bill does nothing to reduce the existing obligations of employers under the Equality Act 2010. As I said, there is an existing legal provision that continues to apply. There is no need to restate it.

Finally, Amendment 31 seeks to require the employer to assess the health and safety implications of the work notice and consult health and safety representatives. The Government’s view is that the current requirements in the Bill strike the right balance between the views and perspectives of employers and unions to enable a reasonable and fair work notice to be issued. As I have said, the Bill explicitly requires that employers must consult the relevant trade union and have regard to its views before issuing a work notice.

Adding any further steps or requirements to this process will result in disproportionate and costly burdens for employers and could result in delays to the issuing of a work notice by the employer and therefore delays to minimum service levels being applied. I fully accept that this may well be the purpose of the amendment, but I hope the Opposition understand why the Government cannot accept it. Additionally, when drawing up work notices, employers must still adhere to the relevant requirements set out in existing health and safety law. That is unchanged by this legislation.

For these reasons, the Government resist these amendments.

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

I thank the Minister—I think—for that response. Many of us raising legitimate concerns about this Bill are quite disturbed that the argument for naming individuals seems to be that you have to name individual workers so that they can be threatened with the sack and that it is necessary to share those names with employers so that they can be required to take reasonable steps or face significant sanctions, including seeing the entire workforce stripped of protection against unfair dismissal.

The whole basis of this Bill seems to be born of a “command and control” school of management where you order people to work rather than seek agreement, which I think most modern management is about. That is why it is particularly frustrating for those of us who are critics of the Bill, because we know that where minimum service levels are genuinely needed for safety issues and made by agreement, whether or not those agreements have been made at the last minute—so be it; that is often the case—they are much more likely to work effectively than anything proposed in this Bill.

I could make a number of points. I thank the Minister for his point about Amazon, but I feel I have now heard very confusing messages across this Dispatch Box from him and the noble Lord, Lord Markham, so I will want to come back and clarify that.

At some point I would like an opportunity to explain more clearly the real concerns in the trade union movement about victimisation and derecognition. They are not being brought up to put obstacles in the way of this Bill. They are born of real-life experience, both of trade union officers representing shop stewards, convenors and reps who have been victimised and of many of our families who have been through this. The penalty of victimisation is so high—to have your livelihood removed is massive. I would like to pursue this area in other ways if possible, because I am sure we can convince the Minister of the sincerity of that concern and the need for genuine protection.

It is confusing why there are specific references to not selecting people on the basis of trade union membership but not extending that to those who hold trade union office and lay leadership positions.

I could go on, but I will leave the Minister with one last question. I have yet to meet a reasonable employer who wants this Bill. I have had plenty queueing up to tell me that it is wrong, immoral or maybe just unworkable and will make matters worse from a pragmatic perspective. Can the Minister tell us of a single employer or group of employers batting for this Bill? I have yet to meet one. I beg leave to withdraw.

--- Later in debate ---

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

My Lords, I will speak to Amendment 41 in my name and the names of my noble friend Lord Collins and the right reverend Prelate the Bishop of London, and support the amendments tabled by the noble Lords, Lord Fox and Lord Hendy.

Many of us agree that one of the most disturbing features of the Bill is that it hands employers powers to name individual workers in a work notice and potentially force them to work against their will, through a strike, without their individual consent or the agreement of their union—or face the sack. Many employers in the public and private sectors have told us very clearly that they do not want this authoritarian power because it would sour industrial relations. If the Bill is enacted, they fear that they would come under undue political pressure to exercise that power. The publication of WhatsApp messages, as I mentioned previously, between the then Health and Education Ministers revealed that at the very same time as they were publicly praising, clapping and thanking key workers for their efforts during the pandemic, privately they were describing those same workers and their unions—unions are made up of workers—with contempt.

The noble Lord, Lord Callanan, has often sought to reassure us by saying that he hopes the powers will never be used and that there would be no undue pressure. However, I am sure that he would agree—I might even get a smile out of him—that if Gavin Williamson was Education Minister today, on the evidence of those WhatsApp messages, he would be straining at the leash to ensure that academy schools pulled that trigger. That is the fear.

The Government have continually cited France, Italy and Spain as countries that also provide minimum service levels. However, unlike in the UK, in each of these countries the right to strike is a constitutional right. Perhaps the noble Lord can also confirm which of these countries, if any, have provided a blanket power to remove protection against dismissal for individually named striking workers? I submitted a Written Question on this subject, but the response I received did not answer the Question. What is more, it took 15 days rather than the expected 10 not to answer my Question. In fact, the answer, as we have heard, is zero. None of those countries does that.

Can the Minister also explain and justify a gaping hole in the consultations issued on the Bill so far? Those consultations failed to ask whether respondents agree with the Government that it is acceptable to sack individual firefighters, ambulance staff and rail workers if, for example, for reasons of conscience they do not comply with the work notice. Could it possibly be that this is not in the consultation because Ministers know that they will not get the answer that they want? Most fair-minded people find the idea of such sackings abhorrent. The sacking of individually named workers who refuse to comply would be catastrophic for workers’ rights, staff morale and industrial relations in this country. I remind the Minister that NHS job vacancies currently stand at over 133,000 and that 17% of newly qualified teachers leave within two years.

Not so long ago, following a public outcry about what happened at P&O, Government Ministers condemned its scandalous behaviour, and rightly so. Ministers said then—I quote from the 24 January government press release—that unscrupulous employers

“must not use threats of dismissal to pressurise employees into accepting new terms”.

But the Bill provides powers to do exactly that: to pressurise key workers into accepting terms under threat of the sack. These key workers’ heroic work through the pandemic has earned the public’s respect and gratitude. One firefighter was moved to write a letter about his experiences. He says that he has been proud to work for the service for 15 years, including being deployed to Nepal following the devastating earthquakes in 2015; that he and his colleagues have a can-do attitude and have provided emergency cover voluntarily when needed through industrial action; and that they entered the service because they want to help people. He warns against this legislation and says that it is unnecessary, given that arrangements for emergency cover are already in place, and says that Ministers

“can’t simply legislate away the depth of anger and frustration we feel about how we’ve been treated. The Bill could lead to individual workers like me being sacked for taking part in legal and democratically decided industrial action over issues which are genuinely of concern to society in general.”

Taking the power to sack workers whose names are chosen unilaterally by employers, as sanctioned by Ministers, is understandably perceived as deeply provocative. If this firefighter refused to comply with the work notice, does the Minister really imagine that his colleagues would stand by and let him be sacked? Some argue that the Bill is intended to be provocative but, if so, that would be foolish. The provision to sack workers flies in the face of all industrial relations common sense and any sense of human decency.

I know that we are covering the same ground, but it is not just named individuals who could be vulnerable to the sack, as the Joint Committee on Human Rights made clear in its report:

“We find it hard to see how it is compliant with Article 11 ECHR to expose any participant in industrial action to the risk of dismissal simply because a trade union fails to take unspecified ‘reasonable steps’ required in respect of those subject to a work notice.”


I will not go on, but I look forward to the Minister's response—or, better still, an indication that this Government will remove that right to sack striking workers from the Bill.

[Lord Callanan (Con)]

My Lords, I thank all noble Lords who have contributed to this debate. At the risk of provoking further interventions, I will start by replying to the noble Baroness, Lady Chakrabarti. I do not know the legal definition of victimisation, but her understanding of it is clearly different from mine. I would define it as something like “subjecting an individual to degrading, unfair treatment”. In effect, a work notice says to an employee, “You fulfil your contract, as has been previously agreed, as normal. You come into work, do your normal contracted job and get paid for it.” In any definition that I understand, that is not victimisation. Obviously she has an alternative view, but I do not believe that it would come under the definition.

I will directly address the point by the noble Baroness, Lady O’Grady. I have said it before and will say it again: this legislation is not about sacking key workers. Let me be very clear about that. She inquired about the outline of the Bill: it is about protecting the lives and livelihoods of the public by enabling minimum service levels to be applied on a strike day. If people comply with the legislation, then there is no question of anybody being sacked on the basis of it.

This group of amendments seeks to ensure that no detrimental action could be taken by an employer against persons who are named on, but then fail to comply with, a work notice. There would be no consequences for participating in a strike despite being named on a work notice. The whole intention of these amendments is not to achieve a balance between the ability to strike and the rights and freedoms of the rest of us to go about our normal daily business—to get an ambulance, to attend the health service or to have a firefighter come to put out a fire in my property. This is about ensuring that strike action can continue with no consequence whatever and with no regard as to whether a minimum service level will be achieved. That fundamentally cannot be accepted by the Government.

For a minimum service level to be achieved, it strikes me as obvious that enough people need to attend work and therefore workers need to be appropriately incentivised to do that. The legislation achieves this by removing the automatic protection from unfair dismissal where employees participate in strike action despite being named on a work notice. While it is at the discretion of employers rather than the Government as to what, if any, action is then taken against employees in those circumstances, we think it vital that the Bill equips employers to manage instances of non-compliance, just as they would in any other case of unauthorised absence, to enable them to achieve that minimum service level. As my noble friend Lady Noakes observed, employees retain all their existing protections against discrimination—a very good point that further reinforces why these amendments are not required.

Overall, we believe that the approach in this legislation is fair and reasonable and ensures that there is the balance, which we have talked about so often, between the ability to strike and the rights and freedoms of everyone else to go about their daily business and use essential public services. Removing the ability for there to be any consequences whatever for failing to comply with a work notice would likely lead to strikes being more disruptive, as we have seen, when compared with the level of service that employers would be able to provide by applying a minimum service level that allows for these consequences.

Finally, there is a point of detail. Amendments 32 and 32A, if implemented, would cause a significant legal conflict with Part 2 of the Schedule, which makes amendments to the Trade Union and Labour Relations (Consolidation) Act 1992 to make clear that there is no automatic protection from unfair dismissal for an employee who is identified in a valid work notice but participates in the strike contrary to that work notice.

In conclusion, I resist these amendments on the grounds that they seek to sustain or increase the disproportionate impact that strikes in these key areas can have on the public as a continuation of the status quo, a continuation of the public being disproportionately impacted by strikes and a continuation of lives and livelihoods being put at risk by those strikes. Therefore, I cannot accept these amendments.

[Lord Fox (LD)]

With each group of amendments that passes, I get the impression that the area of carpet between me and the Minister is getting larger. The differences are getting larger rather than smaller, which is disappointing because sometimes in Committee they can be narrowed, but I do not get that sense. In describing the change in a person’s contract so that on one day they are able to strike with legal protections and on the next day that contract is unilaterally changed, I do not have to use the word “victimisation”. I can use some other word, perhaps “unfair” or “wrong”. That is the fundamental difference between me and the Minister, and that is what is causing the carpet to expand. Acknowledging that this was a probing amendment, I beg leave to withdraw the amendment.

--- Later in debate ---

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

If I can elaborate even further, it is not necessarily the issue of being counterintuitive or not; if there is a voluntary agreement, both parties enter into that voluntary agreement with good faith. So if, as we have discussed many times before, safety is genuinely at risk and there are life and limb agreements, unions and employers work incredibly closely together to secure the consent of individual workers, and issue them with what we call exemptions to go across that picket line. That can all happen. But as soon as you introduce the law and remove that requirement for agreement, why is it our responsibility to make this work? It is not our responsibility; it is the employer’s responsibility. You cannot have it both ways. If we are going to have a voluntary agreement, we will do our best to honour and make that voluntary agreement work. If the state intervenes and dictates to workers under threat of dismissal, it simply will not work.

[Lord Callanan (Con)]

My Lords, I am grateful to those who have contributed to the debate.

It should go without saying that, to achieve a minimum service level, employers, employees and trade unions all have a part to play, and the Bill makes clear what those respective roles are. As many Members have quoted, unions are required to take “reasonable steps” to ensure that the union members named in the work notice comply with the notice. If they do not, they will lose protection from legal claims.

In response to the noble Lord, Lord Woodley, I say that there are a range of steps that trade unions could take, and what is considered reasonable can depend, as my noble friend Lady Noakes made clear, 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 its general communication with workers that, where members are named in a work notice and therefore required to work on a particular day, they should work on that particular strike day.

Before turning to the individual amendments, I will respond to the question from the noble Lord, Lord Fox, about what would happen if a number of the workforce are sick on the day of the strike. As I indicated to the noble Lord from a sedentary position, the responsibility of the unions is to take “reasonable steps”, as it says in the Bill. If union members named in a work notice are off sick, it is not the responsibility of the trade unions to find other members to take their place; it is the responsibility of employers to ensure that enough work notices are issued to fulfil that minimum service level.

Amendments 34 and 34A seek to diminish the responsibility of unions to take reasonable steps to ensure that their members who are named on a work notice actually attend work rather than participating in strike action. These amendments would remove any obligation on the trade unions to notify their members of the need to comply with a work notice and not to take part in the strike, which, in my view, would reduce the likelihood that a minimum service level will be maintained or achieved. Therefore, the Government are unable to accept them.

Amendment 33 goes further and seeks to ensure that unions have no responsibility whatever for ensuring that their members comply if they have been named on a work notice. It also ensures that there are no consequences for failing to meet that responsibility. I submit that that is an attempt to disrupt the balance between the ability to strike and the rights and freedoms of others, and therefore the Government cannot accept the amendment.

If a union member does not cross a picket line when identified on a work notice, this will of course negatively affect the employer’s ability to achieve the minimum service level at all. The picket line is usually a critical place for a union to exercise persuasion over its members, and we have seen some egregious examples of that. However, the Bill and the achievement of minimum service levels would be substantially undermined if the union’s obligations did not extend to picketing, and therefore we cannot accept Amendment 35.

The responsibility of the union to take reasonable steps is a continuing one, because the impact on the public is the same if a minimum service level is not achieved, whether or not that results from picketing activities. Therefore, the Government cannot accept these amendments, which would significantly reduce the responsibilities of trade unions. Our view, which is reflected in the legislation, is that they need to play their part in ensuring that essential services continue during strikes. As always, we encourage unions to act responsibly and to fulfil their statutory duty that will be established by the Bill if it becomes law. I therefore hope that the noble Lord, Lord Collins, will withdraw his amendment.

[Lord Collins of Highbury (Lab)]

The simple fact is that the Minister tries to keep repeating a narrative that the Government are on the side of the public and, somehow, the Opposition are not. Actually, that is not the case, and, as I said before, the public will not be fooled.

I am glad that the noble Lord, Lord Markham is here, because we had a discussion about the six sectors. There was a manifesto commitment on transport, but then that disappeared, especially when an impact assessment said that the law would not work and would prolong disputes, with greater impact on the public, so it is not worth doing. Now, we have had discussion about six sectors, a number of which have very strong voluntary agreements that work. Employers have told us that where people volunteer to do something, against their conscience, which is what we are talking about, it will be more effective. In the health service, NHS Providers is telling us that that is what it wants to do: it wants to ensure that people volunteer and that there are proper cover arrangements. What we are moving to here is compulsion, penalties and dismissal. It will have the complete opposite effect to what the Minister has said.

--- Later in debate ---

[Lord Hendy (Lab)]

My Lords, at the risk of saying what I said earlier, if this amendment is not accepted by the Government, that presents a problem to the whole House as to what is to be done about Bills that do not conform to the elementary requirements of various committees, where detail is not published in the Bills but reserved to regulations. That problem will have to be confronted if the Government are not prepared to accept this very modest amendment, as my noble friend Lady Chakrabarti put it.

[Lord Callanan (Con)]

I thank noble Lords for their contributions to this debate. To start with the question from the noble Lord, Lord Collins, about the Government’s response to the reports from the Delegated Powers Committee, the Constitution Committee and the Joint Committee on Human Rights, I am happy to confirm that I expect to be able to respond to those reports before Report.

This amendment tabled by the noble Lord, Lord Collins, and the noble Baroness, Lady O’Grady, requires indicative minimum service levels to be set out before regulations can be made for that service. The Government recognise the importance of relevant parties having sight of a minimum service level before it is applied. That is why Secretaries of State must consult on minimum service level regulations and why Parliament will have an opportunity to contribute to the consultation and scrutinise those regulations, which are subject to the affirmative procedure, as I have said before.

The effect of this amendment is superfluous, given that all parties will be able to know the proposed minimum service levels once regulations are laid in the usual way. This approach ensures that the implementation of MSL is not significantly delayed, thereby not extending the disproportionate impact that strikes can have on the public. I am sure that the noble Lord, Lord Collins, and the noble Baroness, Lady O’Grady, will understand, if not agree, why the Government cannot accept the amendment.

[Lord Collins of Highbury (Lab)]

In light of those comments, I beg leave to withdraw the amendment so that we can move on to the next group, where we will have a much more comprehensive debate.

--- Later in debate ---

My noble friend Lady Donaghy said, “Gis a power”. I will keep repeating that; it is really quite useful, because it sums up where this Government have reached. They have run out of ideas and policies; they now just want to resort to narrative that they think will have appeal. I think they have even got that wrong, because I do not think the public will follow the narrative the Minister keeps repeating today. I think the people know who is responsible and how they want it resolved. We have seen it resolved in the health service and elsewhere. Our concern here is that this is an unacceptable power grab.

[Lord Callanan (Con)]

My Lords, as I set out in the previous group, which the noble Lord, Lord Fox, described as the amuse-bouche grouping, there are already sufficient checks and balances built into the legislation before any regulations can be made. These include the need to carry out consultations with key stakeholders, including employers, employees, relevant trade unions and their members, who are all encouraged to participate in the consultations—we have some of the regulations out for consultation at the moment—and have their say in setting minimum service levels before they come into effect.

Parliament, including Select Committees, will also have an opportunity to contribute to the consultation and scrutinise the regulations. The Government firmly believe that this is the right approach. It ensures that a wide range of views can be gathered. Parliament can scrutinise regulations without significantly delaying the implementation of MSLs and therefore extending the disproportionate impact that strikes can have on the public.

Amendments 42 to 48 all seek to amend the provisions to make consequential amendments. The Government resist these amendments on the grounds that Clause 3 is a fairly standard clause, used regularly in primary legislation. Let me explain to the Committee what it is for. The power to amend primary legislation within the clause is a standard power with standard wording. Perhaps it will be helpful to give some examples of where it is on the statute book already. It is in Section 182 of the Health and Care Act 2022, Section 47 of the Corporate Insolvency and Governance Act 2020, Section 23 of the Bus Services Act 2017—I am sorry that the noble Baroness, Lady Randerson, is not here to hear that—and Section 66 of the Children and Social Work Act 2017. This power is not unique to legislation introduced under a Conservative Government. I say to the noble Lord, Lord Collins, that Section 51 of the Constitutional Reform and Governance Act 2010 also includes the same power. Additionally, the report, The Legislative Process: the Delegation of Powers, published by the Lords Select Committee on the Constitution in 2018, states:

“Delegating power to make provision for minor and technical matters is a necessary part of the legislative process … Delegated legislation, which is subject to less parliamentary scrutiny, should only be used to fill in the details.”


That is exactly what this power is intended for.

I remind noble Lords that the DPRRC did not draw attention to or raise concerns about this delegated power in its report published on 2 February. I know that it did on others, but it did not with this one. The power may be used only to make amendments to other legislation that are genuinely consequential on this Bill. It is there purely to ensure that the legal provisions within this Bill can be maintained after they have received Royal Assent. Therefore, the Committee will understand why I cannot support these amendments.

Amendment 48 seeks to remove the power for the Secretary of State to make consequential amendments to primary legislation made by the Scottish Parliament or the Senedd. The Government again resist this amendment on the grounds that the provisions of this Act will extend to England and Wales and Scotland. Employment rights and duties and industrial relations are reserved in respect of Scotland and Wales. Therefore, it is right that the Secretary of State has the power to make consequential amendments to primary legislation made by the Scottish Parliament or the Senedd, if required to ensure that the new legal framework operates in a coherent way across the entirety of Great Britain.

The disproportionate impacts that strikes can have are no less severe on people in Scotland or Wales than they are in England. They have every right to expect the Government to act to ensure that they can continue to access vital public services during strikes. The Government will of course engage with the devolved Administrations as appropriate. I have met devolved Ministers to discuss the Bill. Obviously, we will engage further if any consequential amendments are required to Acts of the Scottish Parliament or Welsh Assembly. As this clause is completely standard and has been introduced in several pieces of legislation, including by a previous Labour Government, I hope that noble Lords will feel able to withdraw or not move their unnecessary amendments.

Turning to Amendments 45 and 46, I believe that the intention of the noble Lord, Lord Collins, is to delay the commencement of regulations providing for minimum services until the Government have assessed the Bill’s impact on recruitment and retention in the public and private sectors, and the impact on those with protected characteristics. However, the amendments as drafted are to Clause 3, which provides a power to the Secretary of State to make consequential provision. Therefore, the amendments would delay commencement of regulations which make consequential amendments to other legislation.

Speaking to what I believe is the intended purpose of the amendment, I say that the Government resist it. As I have already set out in my response to the noble Lord, Lord Fox, the Secretary of State must consult on regulations, and they must be approved by both Houses before they can be made.

Impact assessments will be published for all subsequent regulations on minimum service levels and will, as always, contain a public sector equality duty assessment. I also draw noble Lords’ attention to the already published impact assessments for the Bill and currently ongoing consultations on establishing minimum service levels in ambulance, fire and rescue, and rail services, all of which contain public sector equality duty assessments. I hope that I have convinced noble Lords to withdraw and not move their amendments.

[Lord Fox (LD)]

I thank noble Lords for their contributions to the debate on this group. I am particularly grateful to the right reverend Prelate the Bishop of Leeds for painting a picture of King Henry VIII strutting across the Field of the Cloth of Gold on a pair of stilts.

Electricity Supplier Obligations (Green Excluded Electricity) (Amendment) Regulations 2023

Lord Callanan Excerpts

Monday 20th March 2023 Grand Committee

Moved by

[Lord Callanan]

That the Grand Committee do consider the Electricity Supplier Obligations (Green Excluded Electricity) (Amendment) Regulations 2023

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

My Lords, these regulations, and the Electricity Supplier (Excluded Electricity) (Amendment) Regulations 2023, were laid on 8 and 20 February 2023 respectively, and were recently debated in the other place.

The purpose of the Electricity Supplier Obligations (Excluded Electricity) (Amendment) Regulations 2023 is to improve the operation of the EII exemption scheme. This will ensure that access to the scheme for existing recipients is not negatively impacted by the effects of the Covid-19 pandemic, and that new applications can benefit from the scheme earlier than would otherwise be possible.

The purpose of the Electricity Supplier Obligations (Green Excluded Electricity) (Amendment) Regulations 2023 is to ensure that electricity suppliers in Great Britain contribute to CfD scheme costs more in proportion to their market share, regardless of whether they source electricity from the EU or the UK.

I acknowledge the Joint Committee on Statutory Instruments, the Secondary Legislation Scrutiny Committee and the other place, all of which have provided helpful reviews of these regulations.

These statutory instruments amend the Electricity Supplier Obligations (Amendment & Excluded Electricity) Regulations 2015 and the Contracts for Difference (Electricity Supplier Obligations) Regulations 2014.

The Electricity Supplier Obligations (Amendment & Excluded Electricity) Regulations 2015 provide for a scheme that helps to mitigate the risk of carbon leakage by exempting eligible businesses from a proportion of the costs of funding renewable electricity and minimise the risk of companies or production moving to overseas territories with less robust net-zero targets. These are costs associated with funding the renewables obligation, the contracts for difference and the small-scale feed-in tariff schemes. The costs associated with these schemes are passed on by electricity suppliers through their electricity bills. They have a particularly high impact on foundation industries such as steel, paper, chemicals and cement, which are critical to many infrastructure projects and provide well-paid, highly skilled jobs across the United Kingdom. As foundation industries, these businesses are critical in the development of new projects, including offshore wind, and therefore play an important role in the transition to net zero.

The exemption also provides relief for new and emerging industries, such as battery manufacturers—critical to electric vehicles—and manufacturers of semi-conductors, which are of key importance to the UK high-tech economy. They provide jobs not only directly but indirectly, such as in the aerospace and automotive sectors. They employ people from Cornwall to Kent and from Grangemouth to south Wales.

The original legislation was put in place in 2017 and since then over 320 businesses have benefited from the exemption. Businesses which applied in 2017 are now due to be reassessed under the regulations; they will need to be reassessed this year using the last three years of data. For these businesses, this will include the 2020 and 2021 trading periods. This new instrument makes amendments that will allow businesses to exclude data from that period, which, of course, does not reflect the normal course of their business, thereby preventing an unintended consequence from the Covid pandemic’s effect on industry.

This instrument also allows companies applying for an exemption to apply for relief with one quarter of financial data, rather than two. This will help and encourage businesses and start-ups to apply for relief.

The sectors eligible for the existing exemption scheme employ around 400,000 workers and account for more than a quarter of total UK exports. Many are located in areas of economic disadvantage and provide good, high-paid jobs. In the UK, our electricity prices for medium and large industrial users were the highest among the EU countries in 2021. Clearly, electricity costs have a significant impact on the competitiveness of such enterprises. The industries affected operate mainly in international markets, so higher electricity prices place them at a competitive disadvantage, resulting in the risk of carbon leakage, whereby companies choose to move their production to countries with less ambitious climate policies.

--- Later in debate ---

[Lord Lennie (Lab)]

My Lords, I thank the Minister for his thorough explanation of the regulations and the noble Baronesses, Lady McIntosh and Lady Hamwee, for their contributions and questions, which the Minister will no doubt deal with when he comes back.

I will take the reverse order from the Minister: I will deal first with the green amendment and then with the energy intensive amendment. Contracts for difference are the main way in which the Government support low-carbon electricity generation projects. While we were in the EU, a supplier could seek a reduction in their liability proportion in the levy by offsetting low-carbon electricity generated in the EU area. The UK is no longer under an obligation to offset any low-carbon electricity generated in the EU area. Following industry consultation—I do not know how thorough it was, or how much there was—removing the green excluded electricity was determined to be the fairest way of proceeding following our exit from the EU. As I understand it, the supplier obligation applies to all licensed suppliers of electricity to pay for the contracts for difference.

The statutory instrument is relatively straightforward: it removes something that was implemented when contracts for difference first became the major instrument of the development of renewals in the UK. It looks to close a potential loophole in state aid regulations. Suppliers importing electricity from Europe should not have that supplier obligation applied to them and the electricity they are bringing in from European sources. As we no longer have responsibilities over state aid, it is no longer appropriate to continue with the arrangement that was dependent on the state aid loophole. In the past, suppliers had to provide proof of power coming in to claim that there was no money to pay, as it were, for that energy coming in. Now the opposite is the case: suppliers will have to provide evidence of what is coming in as a renewable source, via the interconnector, from Europe to ensure that they pay. Can the Minister say why any company would now produce evidence of green energy imports through the interconnector in order to pay? Nothing in the regulations requires that evidence is given so that payment is made, and there is nothing about enforcement action or penalties against bodies which do not provide information to enable future payments to be made.

Also, there is no inversion in place for the relationship between the strike price and the reference price. As I understand it, that means that, instead of normal procedure as far as the contracts for difference in this country are concerned, the supplier does not get a payment from the Government in respect of the strike price. As the reference price is currently above the strike price, the supplier has to pay back into the Low Carbon Contracts Company. The company then has a reasonable obligation to pay back that money to suppliers. So I ask the Minister: are companies now obligated under the SI to pay money into the LCCC for contracts for difference which were pre-exempted, and also to get money from the LCCC when the general strike price is inverted against the reference price?

The energy intensive industry exemption, as the Minister said, provides relief to around 320 electricity-intensive companies in the UK. It launched in 2017, and it needs to be reassessed this year under the scheme’s rules. Following consultation, the Government decided to implement two minor changes to the operation of the scheme. The amendments to the scheme are designed to improve accessibility to the EII scheme and to account for the Covid-19 pandemic period. First, it will allow companies applying under the exemption from the indirect costs of funding contracts for difference, the renewables obligation and the small-scale feed-in tariffs to be able to feed in three of the previous five years for assessment, as the Minister said, in order to account for possible lower trading and electricity usage during the 2020 and 2021 pandemic years. Secondly, it will allow new companies to apply with only one quarter of trading rather than two, as was the case previously.

Labour does not oppose those sensible changes which take account of what happened during the Covid period. Companies will be judged against their present performance rather than that of previous years. It is likely that companies previously exempted from the scheme can now be brought into it. Does the Minister agree with that? Could he comment on the observation made in the other place that the mining of hard coal is on the eligibility list? Given the environmental effects of that industry, it seems at least curious as to why it may be included under the EII scheme.

[Lord Callanan (Con)]

I thank all noble Lords for their valuable contributions to the debate. The electricity-intensive industries exemption provides relief for key foundation industries, including companies operating in the steel, paper, chemicals, cement and glass sectors. The scheme also supports emerging sectors ,such as battery manufacturers and companies making semiconductors. The companies this scheme supports are located all over the UK and provide high-paid, good-quality jobs both directly and in the supply chain.

These EII regulations are necessary to improve the operation of the current excluded electricity scheme. They will make it easier for start-ups and new businesses to apply. They will also allow businesses to account for the impact of Covid-19 when reapplying for relief. We will update and publish our guidance on the GOV.UK website to ensure that businesses are aware of these proposed changes, and proactively engage with stakeholders to ensure that they are too.

Following the consultation in spring 2023, we will come forward with our proposals on the recently announced British industry supercharger, which aims to roll out further support to important manufacturing businesses. This will be through exempting firms from certain costs arising from renewable energy obligations, as well as the GB capacity market costs, while also exploring reductions on network charges, which are the costs that industrial users pay for their supply of electricity.

The proposed removal of the green excluded electricity exemptions from the CfD scheme means that a supplier in Great Britain will pay a proportion of the contract for difference scheme cost that is closer to their market share. It will remove a condition placed on the British scheme by the European Commission and ensure that the supplier obligation is applied to GB suppliers in accordance with their market share.

We are proposing these legislative amendments following a public consultation. It generated 28 responses from a cross-section of the energy industry, representative bodies, brokers and other concerned parties, with the policy proposals receiving wide support.

I will move on to the specific questions raised. My noble friend Lady McIntosh asked about redistribution costs, the impact of standing charges, impact assessment and the consultation period. I say to her that, for the EII exemption scheme, any increase in the bills of non-eligible consumers arising from these changes is likely to be extremely minimal. For this reason, it was felt that a new impact assessment was not required. The redistributed cost applies only to the policy cost element of an electricity bill and does not impact or increase the current standing charge.

The noble Baroness, Lady Sheehan, asked a number of questions about consultation responses, the number of consultees and the distribution of comment, and about the carbon border adjustment mechanism. The Government’s response to the consultation will be published shortly and it will set out further detail on the distribution of comments received. I can tell the noble Baroness that, in total, there were 64 responses to the EII exemption consultation, including from electricity suppliers, currently eligible businesses and other organisations.

Regarding the distribution of comments, there was significant support for the amendments proposed under this SI, as they improve access to the schemes and ensure that firms are not disadvantaged by the impact of the Covid pandemic. The scheme continues to have a robust process both for initial applications by EIIs and for the required reassessment that an EII needs to go through to continue to receive the exemption. This includes an assessment of the company’s accounts, its electricity bills and any other supporting evidence. As officials are in regular dialogue with firms in the energy-intensive sectors it was felt that, given the relatively minor and technical nature of the changes, five weeks represented a sufficient consultation period. As stated, we will publish our formal response shortly.

The noble Baroness, Lady Sheehan, also asked about a carbon border adjustment mechanism. I agree that this could represent an easier solution to the problem of carbon leakage, but I am sure she will accept that it is more of a long-term change. The EU is also looking at it on a longer timescale. We will shortly publish a consultation on a potential CBAM, but I am sure the noble Baroness will realise that there are lots of potential implications of such a mechanism.

Electricity Supplier Obligations (Excluded Electricity) (Amendment) Regulations 2023

Lord Callanan Excerpts

Monday 20th March 2023 Grand Committee

Moved by

[Lord Callanan]

That the Grand Committee do consider the Electricity Supplier Obligations (Excluded Electricity) (Amendment) Regulations 2023.

Relevant document: 32nd Report from the Secondary Legislation Scrutiny Committee

Motion agreed.

Cleaner Energy Technologies

Lord Callanan Excerpts

Tuesday 14th March 2023 Lords Chamber

[Lord Roborough (Con)]

My Lords, in begging leave to ask the Question standing in my name on the Order Paper, I declare my interests as set out in the register.

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

My Lords, published carbon values are used across government for valuing the impacts on emissions resulting from policy interventions, including options for different clean energy technologies. Those values are consistent with the UK’s domestic and international climate change targets.

[Lord Roborough (Con)]

I thank my noble friend the Minister for his Answer. In light of third-party research suggesting that atmospheric carbon units would need to be at an unaffordable price of several hundred pounds per tonne, even many years into the future, for electrolytic hydrogen to make economic sense, can he reassure the House that the Government are confident in the economic case for its support and that the economics will remain under review?

[Lord Callanan (Con)]

I understand the point my noble friend is making, but the potential of hydrogen to support the global transition to net zero is widely recognised, with international partners, such as the US and the EU, also having set out significant support for hydrogen. The Government are supporting multiple hydrogen production technologies, including both CCUS-enabled and electrolytic hydrogen, to get the scale and cost reductions we need.

[Lord Teverson (LD)]

My Lords, the Energy and Climate Intelligence Unit released a report last week that stated that, when it comes to green steel, the EU has some 38 projects, while the United Kingdom has one—and eight of those in Europe are already functioning. Does that mean, for the country that invented the Industrial Revolution, that we are about to see the extinction of our steel industry?

[Lord Callanan (Con)]

No, I think the noble Lord is being too pessimistic, as he often is. We have ambitious projects supporting steel. The noble Lord is right that hydrogen is probably one of the technologies that will be required to decarbonise the steel industry and we are working closely with the industry on that.

[Lord Lennie (Lab)]

My Lords, in 2021 the Government set out in guidance a revised approach to valuing greenhouse gas emissions due to the more ambitious goal in the Paris Agreement to limit global temperature rise and the UK’s legal requirement to achieve net zero by 2050. Can the Minister say what steps the Government have taken since this adjustment to ensure that the revised approach is meeting its intended goals?

[Lord Callanan (Con)]

We give a value to carbon and use that to inform our policies, not least through the ETS. We have supported a number of early-stage technologies. Offshore wind was extremely expensive when we first started supporting it; now it is very cost-competitive and we are confident that we will end up in the same position on hydrogen.

[Viscount Trenchard (Con)]

My Lords, does my noble friend the Minister agree that the only way even to get close to the net-zero targets is to make major changes to the current energy policies to enable a substantial increase in both the number and speed of deployment of nuclear reactors?

[Lord Callanan (Con)]

I certainly agree with my noble friend that we need to expand both the potential and the deployment of nuclear reactors, and we are doing just that. We recently passed the Nuclear Energy (Financing) Bill, for which I am grateful for the House’s support. We have invested several hundred million pounds in the new Sizewell plant and are supporting Rolls-Royce to develop the next generation of small modular reactors.

[Baroness Hayman (CB)]

My Lords, I declare my interests as set out in the register. I think the Minister would be disappointed if I did not raise with him one established clean technology: onshore wind. Can he tell the House what progress we are making with the consultations about lifting the effective ban on new onshore wind developments? Yesterday, the noble Lord, Lord Naseby, referred to the parliamentary pension fund and its investments and report. As a pensioner, I read its report and was delighted to see a photograph of a wind turbine in which the pension fund had invested. My disappointment was that it was in Sweden, not the UK. When can we get some investment and some jobs in onshore wind in this country?

[Lord Callanan (Con)]

I would indeed be disappointed if the noble Baroness did not raise the subject of onshore wind. She partly answered her own question in that she knows that we are consulting on revising the planning policy framework. I think she is doing us a bit of a disservice. Sweden has a different topography and interests from those of this country. Where we have a world-leading operation is, of course, in offshore wind, where we have the biggest offshore wind farm in the world—and the second, third and fourth. We are truly world leading.

[Baroness McIntosh of Pickering (Con)]

My Lords, has my noble friend made an assessment of the amount of water needed to create hydrogen for use in energy technology? Is this going to be an issue in areas of the UK that might be water-stressed at this time?

[Lord Callanan (Con)]

If there is one thing many parts of the UK are not short of, it is water. The noble Baroness’s point is partly valid in that we need substantial quantities of water for producing electrolytic hydrogen, which is fundamentally electricity and water, so that is something we need to bear in mind in terms of location.

[Lord Wigley (PC)]

My Lords, as the Minister fully appreciates, we do not necessarily get the energy at the right time from some of the alternative sources and that brings into play the importance of pumped-storage schemes. Is he aware of concern in the industry that the regulations the Government are abiding by are holding back the development of pumped storage and will he please have a look at this in association with those in his department?

[Lord Callanan (Con)]

The noble Lord is of course right in that renewables are good, available and cheap but they are intermittent so we need technology such as nuclear, which has already been referred to, and pumped storage, of which there are excellent examples in Wales. We will certainly look at removing any future barriers to the deployment of further pumped storage.

[Lord Alton of Liverpool (CB)]

My Lords, on an earlier occasion, the Minister referred to the possibilities of nuclear fusion. Is he in a position to say whether the contribution that British scientists have been making to this exciting possibility are inching forward in any way? Given the earlier exchanges about the importance of lithium in making batteries for electric cars, how does the Minister respond to reports today that China already possesses 25% of the lithium market and within a decade will have 30%? Of course, it relies on child slave labour in countries such as Congo to make those batteries.

--- Later in debate ---

[Lord Callanan (Con)]

The noble Lord had two questions there. I completely agree with him about fusion. We need to support it, but of course it is at a very early stage. It has great potential, but it seems to have had great potential for many years now. The noble Lord’s other point on the use of critical minerals is important, of course, which is why we have a critical minerals strategy. There are also lots of exciting new battery technologies which might perhaps not need so much lithium—so the Chinese need to be careful that they are not investing in the wrong technologies.

[Baroness Jones of Whitchurch (Lab)]

Has the Minister seen the recent report from the Climate Change Committee, which says:

“A reliable, secure and decarbonised power system by 2035 is possible—but not at this pace of delivery”?


Indeed, it went on to say that there had been a lost year in which politicians had not acted with the necessary determination and delivery. Can the Minister reassure the House that the Government are on target to meet the targets that have been set? The committee really does not think that they are.

[Lord Callanan (Con)]

Well, if the noble Baroness is referring to the legally binding carbon budgets, of course by their very nature they are legal targets and we have to meet them. We have met all our carbon budgets so far—in fact, we have exceeded them—but of course as we go on it gets more difficult. We have lots of ambitious policies to continue rolling out renewables and other carbon-reduction technologies, but we will respond to the CCC report in due course.

[Lord Geddes (Con)]

My Lords, not unexpectedly, I ask: “Tidal power?”

[Lord Callanan (Con)]

Yes, well, however many times the noble Lord asks me that question, he gets the same answer. We are supporting tidal stream technology under the latest CfD round—and of course we keep the technology under review and, if the costs come down, we will want to continue to support it and roll out further projects.

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

My Lords, when does Minister expect the carbon capture and storage projects to go ahead?

[Lord Callanan (Con)]

It depends on which projects the noble Lord is referring to. He might hear some good news in the near future with regard to the track 1 cluster announcements.

[Lord Lilley (Con)]

Could my noble friend tell the House what the Government’s estimate is of the social cost of carbon?

[Lord Callanan (Con)]

I am not quite sure where the noble Lord is going on that question. Perhaps we should have a more detailed discussion outside the Chamber.

[Baroness Foster of Aghadrumsee (Non-Afl)]

My Lords, given the energy trilemma of the cost, the mix and security of supply, and given the year that we have had, should security of supply not be given more prominence in energy policy?

[Lord Callanan (Con)]

The noble Baroness makes a very good point. Security of supply is vital, and it is one reason why we want to continue to roll out the deployment of renewables in the UK—because, of course, if it is generated in the UK, it is secure. Part of the problem that we have seen over the past year has been our exposure to the vagaries of international markets. Sadly, we get only 40% of our gas supplies now from our own resources in the North Sea, and the rest we have to import, either by LNG or by pipeline. So we want more secure, reliable power generated here in the UK, because of course that is the most secure.

Alternative Fuel Payment Pass-through Requirement (England and Wales and Scotland) Regulations 2023

Lord Callanan Excerpts

Tuesday 14th March 2023 Grand Committee

Moved by

[Lord Callanan]

That the Grand Committee do consider the Alternative Fuel Payment Pass-through Requirement (England and Wales and Scotland) Regulations 2023.

Relevant documents: 32nd Report from the Secondary Legislation Scrutiny Committee. Special attention drawn by the Joint Committee on Statutory Instruments, 29th Report.

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

My Lords, in moving the Alternative Fuel Payment Pass-through Requirement (England and Wales and Scotland) Regulations 2023, I will speak also to the Non-Domestic Alternative Fuel Payment Pass-through Requirement and Amendment Regulations 2023. These instruments were laid on 21 February and 23 February respectively and were debated last week in the other place.

The purpose of these instruments is to ensure that the financial benefits from the alternative fuel payment and the non-domestic alternative fuel payment schemes are passed through to end consumers. The non-domestic regulations also contain an amendment that corrects a drafting error in the Energy Bills Support Scheme and Alternative Fuel Payment Pass-through Requirement (Northern Ireland) Regulations 2023.

Before I begin, I thank the Joint Committee on Statutory Instruments, the Secondary Legislation Scrutiny Committee and the other place, all of whom provided helpful advice and feedback on these regulations. Time has not permitted us to incorporate everyone’s views into these regulations. None the less, we are grateful for the feedback that we have received. We will continue to explore and consider the comments that both the committees and Members of both Houses have given us, and we will consider how they can be reflected in the design of future regulations as well as current and future schemes.

The SLSC asked three questions. The first was on whether the effectiveness of the pass-through requirements of the other energy support schemes has been monitored. The second was whether there is any evidence of misuse of the application of “just and reasonable” by intermediaries to withhold the energy support from end-users. The third was whether there were any end-users recovering the energy support from their intermediaries via the courts system.

As my officials have now shared with the Committee, on the effectiveness of pass-through requirements, there is a diverse range of energy contracting structures, with many different forms of the supplier/intermediary/end-user relationship. The Government do not have visibility on the granular detail of these contracting structures and relationships. To our knowledge, this type of data does not currently exist in any aggregated verified source. Instead, we are monitoring the uptake of the energy support schemes where possible and putting in place evaluation of the pass-through requirements.

On the committee’s second question, we do not have evidence that the concept of “just and reasonable” is being misused by intermediaries to withhold support from intended beneficiaries. However, we will continue to monitor through our extensive stakeholder networks to make sure that the pass-through requirements are being met. On its last question, we are not aware of any tenants or businesses seeking recovery of support from their landlords through the courts where landlords have failed to pass on support. We will look into this as part of our evaluation of the effectiveness of the pass-through requirements.

--- Later in debate ---

[Lord Callanan (Con)]

My Lords, I was just moving on to the issue of enforcement. The approach in these instruments is consistent with other energy schemes. If an intermediary does not pass on the benefit to an end user who is entitled to it, that end user will be able to pursue recovery of the benefit debt through civil proceedings. Should a court rule in the end user’s favour, they would be entitled to the payment plus interest. The interest is set at 2% above the Bank of England’s base rate.

The Government have published guidance on the GOV.UK website to ensure that requirements are clear to all parties. The guidance includes template letters to support end users, such as tenants, which they can use to contact their landlord should they be concerned about their energy bills. We are of course mindful of the concerns that this House and the other place have raised with us about enforcement. The Government will continue to keep the scheme under review. We will continue to work with a wide range of stakeholders to ensure that these pass-through requirements work for everyone who is in scope, including vulnerable groups. We want them to receive what they are entitled to.

In conclusion, these instruments are vital to ensure that support reaches the people it is designed to help. They are essential to the effectiveness of the alternative fuel payment scheme in Great Britain and the non-domestic alternative fuel payment across the United Kingdom. They will ensure that intermediaries pass on the support to those who really need it: those households and non-domestic energy customers who are most vulnerable to high energy costs. It is for all these important reasons that I commend these regulations to the Committee.

[Baroness Blake of Leeds (Lab)]

My Lords, I thank the Minister for a very full explanation of the SIs before us. I am pleased that the Government have fully caught up with the need to support consumers; I slightly disagree with the suggestion that this was done in a timely manner, but we and many others out there know about that. There was concern over a rather difficult period for the Government over the summer months but, on the back of this, I can underline that we will not oppose these SIs. We welcome them and want to see the help and relief that we have been discussing passed on, through the pass-through arrangements, so that people get the relief when they do not get the upfront sums directly.

--- Later in debate ---

In general, we want the SIs to progress; we want the payments to come out the door, but we remain mystified as to why there is not more of an enforcement regime surrounding them to ensure that the most vulnerable receive the money that is due to them.

[Lord Callanan (Con)]

I thank the noble Baroness for her valuable contributions to the debate. I reiterate that these instruments are necessary to ensure the effective implementation of the AFP scheme in Great Britain and the non-domestic alternative fuel payment schemes across the UK, by allowing support to reach those who need it. These schemes are already in place and are delivering support to organisations across the UK.

The domestic AFP scheme is delivering £200 to households that use alternative fuels such as heating oil, LPG, coal or biomass. The vast majority of eligible households received the payment automatically via their electricity supplier during February. A small proportion of households will need to apply for AFP support—for example, if they do not have a direct relationship with an electricity supplier and cannot be paid via that route. The non-domestic alternative fuel payment is delivering £150 to non-domestic customers who also use alternative fuels for heating, helping premises in Great Britain and Northern Ireland to meet their energy costs this winter. It will also deliver a top-up payment to the highest users of kerosene heating oil.

We are meaningfully engaging with stakeholders across the UK to promote and disseminate requirements for these schemes. Of course, we will continue to seek views and feedback from those impacted by all the pass-through requirements.

To respond directly to the point made by the noble Baroness, Lady Blake, about providing timely support to customers, I agree with her. The Government have moved at pace to develop what has been a very complex scheme to implement, bearing in mind that we are talking about significant sums of public money. We need to make sure that procedures are put in place to ensure that there is no fraud or gaming of the system.

The launch of the domestic and non-domestic AFP schemes follows months of close work with stakeholders across the country to deliver the Government’s help with the cost of living to customers. As I said in my introduction, we continue to listen to consumer groups such as MoneySavingExpert, housing associations, charities and others.

On the noble Baroness’s question about the requirement to notify end-users and the lack of any enforcement mechanism, we will of course continue to monitor the effectiveness or otherwise of the pass-through requirements. We acknowledge that these requirements have been stood up at pace, and we will continue to review them for the future.

In response to the noble Baroness’s point about letting customers know what they are entitled to, we are running extensive publicity schemes about the different benefits available to those who are eligible to apply for help with their heating bills. As I said, we continue to engage with stakeholders, including third-sector organisations, to reach communities who may be eligible, as well as regularly communicating through those same consumer groups. We are continuing to use social media during this period and encouraging stake- holders to amplify this message through their channels.

Finally, of course—the noble Baroness will appreciate this—we work very closely with local authorities, which are also able to promote the scheme on their own websites, through their own social media and through councillors and others who know their communities well. We also have online guidance for end users to understand their entitlement better. We really do want to see this help getting to all those people who need it, and we encourage parliamentarians, councillors and others to spread awareness through their own networks. We want to see this help getting through.

In response to the noble Baroness’s questions regarding how information resulting from the review will be communicated to Parliament, we would be very happy to write in due course to interested Peers, and the noble Baroness herself, on our monitoring of these pass-through requirements.

Domestic prepayment customers have been provided with a voucher that they are able to redeem within three months. Of course, prepayment customers on smart meters have their bills credited automatically. It is only those on old traditional meters who need to receive their prepayment vouchers. Some can get them on their mobile phones; some are sent them through the post. Non-domestic prepayment customers will instead be provided with a £150 cheque. Customers who have not been provided with this automatically will, of course, be able to apply directly through the alternative fund, which opened for domestic customers on 6 March.

I hope that this has dealt with all the noble Baroness’s questions, and I commend these regulations to the House.

Motion agreed.

Non-Domestic Alternative Fuel Payment Pass-through Requirement and Amendment Regulations 2023

Lord Callanan Excerpts

Tuesday 14th March 2023 Grand Committee

Moved by

[Lord Callanan]

That the Grand Committee do consider the Non-Domestic Alternative Fuel Payment Pass-through Requirement and Amendment Regulations 2023.

Relevant documents: 32nd Report from the Secondary Legislation Scrutiny Committee. Special attention drawn by the Joint Committee on Statutory Instruments, 29th Report.

Motion agreed.

Carbon Budgets: Methane Flaring

Lord Callanan Excerpts

Thursday 9th March 2023 Lords Chamber

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

My Lords, the Government recognise that eliminating routine methane flaring is a priority. North Sea flaring has halved in the past four years. We have committed to make every effort to ensure that routine flaring from oil and gas fields ends as soon as possible, ahead of the World Bank’s zero routine flaring by 2030 target. Methane emissions are fully accounted for in the UK’s carbon budgets, and the oil and gas sector is on track to deliver against this target.

[Baroness Sheehan (LD)]

My Lords, the figures the Minister has quoted are hotly disputed by the respected journal Energy & Environmental Science. However:

“With natural gas prices at historic highs, gas flaring is an extraordinary waste of economic value … alongside its negative impacts on climate change and human health.”


Those are not my words but the words of the IEA’s recent technology deep dive report into flaring. Why do the Government not just stop this historic madness, follow the Skidmore review recommendation and ban flaring and venting, other than in an emergency situation, as Norway did in 1972?

[Lord Callanan (Con)]

These are complicated technological and economic matters. If it were as simple as the noble Baroness makes out, we would do it, but we are working to do it as quickly as possible. The figures that I quoted are from a press release from the North Sea Transition Authority that was issued today—the authority must have seen the noble Baroness’s Question. Flaring is down by 50% since 2018. We must not get this out of proportion; of the UK’s methane emissions, only 1.6% are from the oil and gas sector, compared with the likes of the 49% that come from agriculture.

[Baroness McIntosh of Pickering (Con)]

My Lords, does my noble friend the Minister accept that there is a huge amount of methane leakage from landfill sites? How do the Government propose to deal with the methane escaping from those sources?

[Lord Callanan (Con)]

My noble friend makes a good point. Some 30% of our emissions are from the waste sector, which is one of the sectors where we are doing our best to try to reduce emissions because the gas is valuable and can be used, and indeed it is trapped on some sites. We have a system of supporting anaerobic digesters to deal with the waste; they can produce green gas that is then fed into the gas main.

[Baroness Bennett of Manor Castle (GP)]

My Lords, returning to oil and gas methane emissions, the last time we discussed this at Oral Questions on 22 February I raised the same point that the noble Baroness, Lady Sheehan did, that the figures are heavily disputed and academic research suggests that methane releases are five times higher than the UK’s official figures. The Minister said then that the Government would

“make sure that the information and published figures are as accurate as possible”.—[Official Report, 22/2/23; col. 1648.]

What progress has been made since then on ensuring the accuracy and reliability of figures for methane releases from the oil and gas industry?

--- Later in debate ---

[Lord Callanan (Con)]

I have checked figures with officials from the last time the noble Baroness asked me that question, and I am confident in the information that I have been given and the UK statistics. The noble Baroness shakes her head, but the figures are probably more reliable than some of her scientists.

[Lord Kamall (Con)]

Can my noble friend the Minister tell us what the Government are doing to encourage more use of landfill gas for domestic and commercial energy?

[Lord Callanan (Con)]

My noble friend makes a good point, and I touched on it in an earlier answer. We want to try to trap as much of this gas as possible because it is a valuable resource. As I mentioned, the green gas support scheme is a system that uses a gas levy to support anaerobic digesters across the country to take some of the waste food and organic matter that can be turned into useful gas that is fed into the gas main.

[Baroness Blake of Leeds (Lab)]

My Lords, methane flaring accounts for approximately 145 billion cubic metres of gas per year globally, contributing to the overall methane emissions that cause 25% of global heating today. We can dispute the studies; indeed, I shall reference the study in the journal Science that came out last week which found that methane flaring is responsible for five times more methane entering the atmosphere than previously thought. I am quite taken aback by the complacency here. Does it not at least warrant further consideration if studies are disputing the evidence that the Minister has cited today? Bearing that in mind, and given the worries about the recent surge that have been highlighted, what progress is being made on farming and landfill, as has been mentioned? I do not think we have had the detail. When can we expect the Government to produce the latest, much-promised plan to achieve all targets and net zero?

[Lord Callanan (Con)]

The noble Baroness asked a number of questions there. We can argue about the figures but we can all agree that it is something that we want to eliminate as quickly as possible. We have a target to get rid of all flaring emissions by 2030, as I mentioned in earlier answers, but let us not get this out of proportion. These are 1.6% of our emissions, which we should eliminate as quickly as possible, but, as the noble Baroness mentioned, the bigger sectors to tackle are agriculture and waste, as other noble Lords have mentioned.

[Lord Sharkey (LD)]

My Lords, in the last four months the sky over Hampshire and the Isle of Wight has been lit up twice by huge emergency flaring from the Fawley refinery. What release of methane was involved in these incidents? What steps are being taken to prevent more such episodes?

[Lord Callanan (Con)]

I thank the noble Lord for that question. I am not familiar with that incident, but I will speak to officials when I get back to the department.

[Lord Wallace of Saltaire (LD)]

My Lords, will the Minister recommend to us how we should pronounce the acronym for his new department?

--- Later in debate ---

[Lord Callanan (Con)]

The noble Lord makes a very good point. The finest minds in the Civil Service have been devoted to deciding the acronym for the new department. “Deznez” seems to be the favourite, though I should say that my Secretary of State rightly points out that no one has any idea what all these acronyms stand for so we should use its full title, which is the Department for Energy Security and Net Zero.

[Lord Fox (LD)]

In answer to my noble friend’s Question, the Minister said that there are reasons why this is technically difficult. It would help noble Lords if the Minister could explain what those technical difficulties are. I can understand it when new wells are being tested, but this is established production over the long term. What exactly are the technical difficulties?

[Lord Callanan (Con)]

I am happy to arrange a briefing with officials for the noble Lord if he would like, but the technical difficulties are, first, technological, in that it requires a lot of new infrastructure and pipework to be installed, and some of the facilities that flare are oil platforms that do not have facilities to pipe the gas to shore. Secondly, there are huge economic costs associated with it; obviously, some of the infrastructure goes back to the 1970s.

[Lord Geddes (Con)]

My Lords, would this problem not be greatly reduced if we put more emphasis on tidal energy?

[Lord Callanan (Con)]

My noble friend is dogged in his determination to get tidal on the agenda. I agree with him that we need more renewable energy, and we have allocated a number of CfD contracts to different forms of tidal energy.

[Lord Stirrup (CB)]

My Lords, on a slightly different tack, has the Minister’s department made any assessment yet, or will it do so, of the claims we have recently seen in the press about new technology for carbon capture and storage at sea? Is that likely to be a game-changer or has it been overhyped?

[Lord Callanan (Con)]

The noble and gallant Lord deserves a longer answer than I have time for. CCUS is emerging technology. We have a huge programme of support and will be making announcements shortly about the track 1 cluster, to use the jargon, of some of the schemes that will be supported. There are a number of innovative schemes around the UK that deserve our backing.

[Lord Blunkett (Lab)]

My Lords, will the Minister confirm that historically the capture of dangerous gases of this sort has been by our peat bogs? The protection of peat, particularly in the Pennine area, is crucial to this. What steps will the new department take to ensure that we can continue to protect those areas?

[Lord Callanan (Con)]

The short answer is it is not the responsibility of DESNZ but of Defra in terms of environmental protection, but I will pass on the noble Lord’s comments.

[Baroness Bennett of Manor Castle (GP)]

My Lords, the Minister might like to take this opportunity to withdraw the slur that he made in his answer to me against scientists from the Energy Institute at Colorado State University, the department of civil and environmental engineering at Princeton University, and the Princeton School of Public and International Affairs, whose work was published in the journal Energy & Environmental Science. Does the Minister agree that that is a reputable source?

[Lord Callanan (Con)]

People are always quoting various scientists at me, and for one opinion there are others. I am confident in the figures that the UK uses for our emissions.