Drax Biomass Power Station

Debate between Lord Callanan and Baroness Jones of Whitchurch

Monday 3rd July 2023 Lords Chamber

[Baroness Jones of Whitchurch]

To ask His Majesty’s Government what assessment they have made of the extent to which Drax biomass power station has complied with sustainability requirements; and whether they are reviewing subsidies to it.

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

My Lords, this is a matter for Ofgem. The regulator is the administrator for monitoring compliance with the sustainability criteria within the renewables obligation scheme. It has opened an investigation into whether Drax Power Ltd is in breach of its annual profiling reporting requirements related to the renewables obligations scheme.

[Baroness Jones of Whitchurch (Lab)]

I thank the Minister for that reply. It is estimated that we will have given Drax some £11 billion in subsidies over the different renewable energy schemes. Is the Minister concerned that Drax’s claim to be using sustainably sourced wood from Canadian forests currently lacks any detailed full-cycle carbon accounting and the audit trail that we have the right to expect for that level of subsidy? Why did Ofgem commission the technical consultancy Black & Veatch to advise on this even though the company is already working for Drax? Finally, does the Minister accept that, in order to get to the truth, independent advisers and scientists should go to Canada to check that 70% of the wood biomass being imported is actually sustainable offcuts, as our rule requires, and not from virgin forests?

[Lord Callanan (Con)]

A couple of points for the noble Baroness. First, the renewables obligation legislation was originally introduced by the last Labour Government. Secondly, Ofgem is investigating these matters. The noble Baroness is jumping to a lot of conclusions there. If it is proved that Drax is not in compliance, of course some of the value of the certificates that it has received will be withdrawn.

Cleaner Energy Technologies

Debate between Lord Callanan and Baroness Jones of Whitchurch

Tuesday 14th March 2023 Lords Chamber

[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.

Heat and Buildings Strategy: Gas Boilers

Debate between Lord Callanan and Baroness Jones of Whitchurch

Tuesday 28th February 2023 Lords Chamber

[Lord Callanan (Con)]

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

[Baroness Jones of Whitchurch (Lab)]

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

[Lord Callanan (Con)]

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

Renewable Energy: Generation Licences

Debate between Lord Callanan and Baroness Jones of Whitchurch

Tuesday 13th December 2022 Lords Chamber

[Lord Callanan (Con)]

The noble Lord is right: we need to expand our nuclear production. We have just agreed the contract for Sizewell, only a couple of weeks ago, and other developments are planned. We have not set a specific target for nuclear production, but we will need to replace a lot of the aging plants that will come offline in the next 10 or 15 years or so.

[Baroness Jones of Whitchurch (Lab)]

My Lords, the Minister, in reply to several questions, has said that it comes down to cost. Could he assure us that the full cost of continuing to invest in fossil fuels is factored in when that equation is calculated? Fossil fuels come at a cost to the environment and certainly to our climate change ambitions. Can he assure us that this is fully taken into account when those balanced decisions are taken?

[Lord Callanan (Con)]

There are of course no subsidies given to fossil fuel generation. In fact, it is the opposite: they are paying into the system record levels of taxation. This is a gradual transition. To all those who want to get rid of fossil fuels, I say great, but 80% of our heating is gas heating at the moment; are we going to turn off people’s gas boilers overnight? I suspect that the answer to the noble Baroness’s question is no. Of course we want to roll out renewable generation, which is what we are doing, but it is intermittent, as the question from my noble friend Lord Forsyth intimated earlier. We need back-up generation for that; that could take a number of different forms, and nuclear is one of the possible options. In the short term, as we move to a more renewable system, we will need fossil fuel generation.

COP 27: Outcome

Debate between Lord Callanan and Baroness Jones of Whitchurch

Tuesday 6th December 2022 Lords Chamber

[Lord Callanan (Con)]

I agree with the point made by my noble friend. We will need to make sure that, when the fund is up and running and established, it goes to the people who really need it, which is sadly not the case with some other UN funds.

[Baroness Jones of Whitchurch (Lab)]

My Lords, in addition to the steps we need to take to curtail our use of excavation of fossil fuels, we need to do something about the consumption of those fossil fuels. What are the Government doing, in terms of our use in industry, home heating and transport systems, to cut down on the demand for fossil fuels and to make sure that all those sectors start to move very quickly towards using renewable energy?

[Lord Callanan (Con)]

The noble Baroness makes an important point. Energy efficiency should be our first port of call, and indeed it is. Over this Parliament, we are spending £6.6 billion on home energy efficiency measures. In the mini-Statement a couple of weeks ago, the Chancellor announced additional funding of another £6 billion from 2025. We are currently consulting on the £1 billion ECO+ energy conservation scheme. We are looking at additional measures in terms of regulation that we would also need to introduce, and that is just on the domestic side. On the industrial side, we have a suite of measures—the industrial decarbonisation fund, et cetera—to help industry to cut back on its emissions and to save energy as well. Energy efficiency should always be our first port of call, and I agree with the noble Baroness.

National Minimum Wage (Amendment) Regulations 2022

Debate between Lord Callanan and Baroness Jones of Whitchurch

Thursday 10th March 2022 Grand Committee

[Baroness Jones of Whitchurch (Lab)]

My Lords, I thank the Minister for his introduction to these proposals, and the Low Pay Commission for the thorough and very persuasive way it has drawn up its recommendations. The labour market during the Covid era was undoubtedly worrying, but it is good to see the evidence that, since the economy has started to pick up, pay growth has been the strongest for low-paid workers. As a result, the proportion of the workforce reliant on the national living wage has fallen from 6.5% to 5.4%.

We therefore welcome the decision of the Low Pay Commission to get back on course to meet the national living wage target of reaching two-thirds of median earnings by 2024. We therefore support the increase of 6.6% in the rate, lifting it to £9.50 an hour for those aged over 23, and the subsequent rates that follow on from that.

These recommendations were finalised in December 2021, but since then we have had rising inflation, a rising cost of living and now the reality of huge increases in energy bills. The Minister referred to that. Has any provision been made for the Low Pay Commission to monitor those significant surges in the cost of living, and potentially to make emergency adjustments to the pay rate to ensure that the lowest-paid workers can survive the coming financial crisis without falling into debt? In the first instance, I suggest that the Government could go further and scrap the national insurance increases, and indeed adopt Labour’s policy of a minimum wage of at least £10 an hour, which would go some way to alleviate the pain.

I also support my noble friend Lord Davies’s point about pensions. He made an important point about pension payments needing to be factored into the living costs of the lowest paid. They therefore should be included as part of the statutory scheme.

Moving on from that, I ask the Minister: what happened to the other recommendations in the Low Pay Commission report? Will they come before us separately? I read the report, and it is clear that the commission has, for example, done a great deal of work on the domestic workers exemption, where staff such as au pairs and domestic servants live with a family. As it says in its report, it heard a great deal of distressing evidence from individuals whose hidden voices are rarely heard. As a result, it made a definite recommendation to remove the domestic worker exemption in Regulation 57(3) of the 2015 regulations. What happened to that recommendation?

Secondly, the commission addressed the issue of the pay for individuals involved in sleep-in shifts in social care. This was subject to a Supreme Court ruling this year, leading to calls for more clarity and consistency. The Low Pay Commission identified that there was a variety of practices across the sector, with payments “unregulated” and

“determined by negotiation between commissioning bodies, providers and the workforce.”

It concluded that any further clarification should be “linked to wider plans” for social care funding currently being considered by the Government. Can the Minister confirm that this issue is being considered in the context of the social care reforms, and that adequate money is being set aside to encourage new people into the sector, including those required to sleep over with those for whom they are caring? If we are not careful, this issue, which the Low Pay Commission has flagged up, will fall between all of these stools: it will not be delivered as part of the minimum wage recommendations and it will not be part of the social care reforms either. Once again, those care workers will fall through the crack.

Finally, we welcome the fact that the commission will carry out further work on the impact of low pay on those with protected characteristics, including younger, older, disabled and women workers, and workers from ethnic minorities. We recognise the complexities of untangling the cause and effect of these trends, but given the undoubted pay gaps that we know exist, we believe further measures may be required to rebalance the pay and employment opportunities of these disadvantaged groups.

I hope that the Government’s remit to the Low Pay Commission for next year will ask it to do further work on this issue so that we can be completely satisfied that the pay rates are being sufficiently addressed. I look forward to the Minister’s response.

[Lord Callanan (Con)]

I thank the noble Lord, Lord Davies, and the noble Baroness, Lady Jones, for their valuable contributions to the debate. The points raised demonstrate the importance of providing a pay rise to workers, and both noble Lords welcomed the increases.

The national minimum wage and national living wage make a real difference to millions of workers in this country, and I am obviously glad that there is cross-party agreement in the House that these increases, which will help to protect workers in all parts of the UK from increased inflation and protect their standards of living, should proceed. It is just a shame that the Liberal Democrats obviously did not consider it important enough to join us for this debate, but I am glad that the other two noble Lords have. The national minimum wage and national living wage have increased every year since their introductions. The regulations mean that, on 1 April, full-time workers on the national living wage will earn over £5,000 more than they did in 2015, when it was introduced.

Everyone will note that, once again, the Government’s impact assessment has received a green fit-for-purpose rating from the Regulatory Policy Committee, which is just as well because I am the Minister responsible for that committee. The impact assessment estimates around 2.5 million low-paid workers will benefit from the minimum wage increase. We estimate there will be a total wage benefit to workers of about £1.3 billion. The total cost to employers for implementing the LPC’s recommended rate is estimated at £1.6 million. This marks a 42% increase in the national living wage since the policy was first announced in 2015. Of course, younger workers will also get more money from the increases to the national minimum wage.

I turn to the points raised by the noble Lord, Lord Davies. The Government of course consider the expert and independent advice of the Low Pay Commission when setting these rates. We reward workers with the highest possible minimum wage, while considering the impact on the economy and, of course, the affordability for businesses. The Low Pay Commission draws on economic, labour market and pay analysis, independent research and stakeholder evidence. The key distinction between the Low Pay Commission rates and the other rates, such as the Living Wage Foundation’s voluntary living wage, is that the Low Pay Commission has to consider the impact on businesses and the economy.

I turn to the next point that the noble Lord, Lord Davies, raised on pensions. From April, the full yearly basic state pension will have increased by over £2,300 in cash terms since 2010. The overall trend in the percentage of pensioners living in poverty is a dramatic fall over the recent decade. There are 200,000 fewer pensioners in absolute poverty, both before and after housing costs, than there were in 2009-10. The Low Pay Commission considers all aspect of low pay when making its recommendations for minimum wage rates.

I move on to points made by the noble Baroness, Lady Jones. In response to the points about the Low Pay Commission considering the change in the cost of living, we consider the expert and independent advice of the commission when setting the rates. The LPC’s remit is for the national living wage to reach two-thirds of median earnings by 2024, subject to wider economic conditions. Since its introduction, the national living wage has grown more than twice as fast as consumer prices. This year’s increase will be the largest ever in cash terms and will help to protect the income of 2 million low-paid workers against the cost of living. In April, a full-time worker on the national living wage will see their annual earnings rise, as I said, by over £1,000. I also said in my introduction that we will shortly publish this year’s remit for the Low Pay Commission, which will once again continue to consider a wide range of stakeholder and academic evidence.

On the point made by the noble Baroness about social care, we are incredibly proud of all the work that our health and social care staff do and recognise their extraordinary commitment. The 1.5 million people who make up the paid social care workforce provide an invaluable service to the nation—and did so especially during the pandemic. The noble Baroness will be aware that we recently brought forward our strategy for the adult social care workforce in the People at the Heart of Care: Adult Social Care Reform White Paper. That was backed by at least £500 million to develop and support the adult social care workforce over the next three years. This historic investment will enable a fivefold increase in public spending on the skills and training of our direct care workers and their registered managers. This will include hundreds of thousands of training places, certifications for care workers and the professional development of the regulated workforce. It will help support our commitment to ensure that those who receive care are provided with choice, control and support to live independent lives, that they receive outstanding quality and tailored care, and that people find social care fair and accessible.

Since the introduction of the national living wage in 2016, care worker pay has also increased at a faster rate than ever. So I hope that the noble Baroness will accept that we remain committed to supporting worker protections through this crucial policy and to ensuring clarity for businesses on how the policy will develop over the next few years. We will also run a communications campaign alongside the uprating, thereby helping workers to check their pay and supporting businesses to make the necessary changes. We will also continue to monitor the labour market closely over the coming months. We will continue to prioritise enforcement of the minimum wage through HMRC’s ongoing work and the naming scheme, where we will continue to name employers who have underpaid their staff. We named 208 employers on 9 December 2021, including some of the UK’s biggest household names. To date, we have named more than 2,500 employers.

As the noble Baroness also mentioned, the Minister for Small Business, my colleague Paul Scully, confirmed in the House of Commons that we will bring forward regulations to remove the exemption from minimum wage legislation for so-called live-in domestic workers such as au pairs. This change will newly extend this right to them, ensuring that those workers receive the wages that they deserve and that we thereby do our bit to help tackle exploitation.

I again thank the Low Pay Commission and its staff for gathering the extensive evidence and providing well-reasoned recommendations. It gives me pleasure to commend these regulations to the House.