Strategy and Policy Statement for Energy Policy in Great Britain

Debate between Lord Callanan and Baroness McIntosh of Pickering

Monday 25th March 2024 Lords Chamber

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

My Lords, the past few years have brought unprecedented challenges and uncertainty to Great Britain’s energy system. But we have remained resilient and last year laid the foundations for an energy system fit for the future with the landmark Energy Act 2023, which I know many noble Lords were involved in. It was the largest piece of energy legislation in the UK in a generation, and a world first in legally mandating net zero.

The changes in that Act, including the powers to establish the National Energy System Operator, NESO, and new duties for Ofgem, mean that now is the right time to reaffirm the Government’s strategic priorities and policy outcomes in this strategy and policy statement. The Draft Strategy and Policy Statement for Energy Policy in Great Britain is developed according to Part 5 of the Energy Act 2013. It sets out in clear terms the Government’s strategic priorities and other main considerations of their energy policy, the policy outcomes to be achieved, and the roles and responsibilities of persons involved in implementing that policy.

The Secretary of State, Ofgem—the independent regulator for gas and electricity markets in Great Britain —and the NESO, a new independent public corporation responsible for planning Britain’s electricity and gas networks and operating the energy system, will be required to have regard to the strategic priorities set out in this SPS. The Secretary of State and Ofgem must also have regard to the policy outcomes contained within the SPS, and they must both carry out their respective regulatory functions in a manner that they consider best calculated to further the delivery of the policy outcomes.

The NESO is expected to be established this year. The SPS serves an additional purpose of setting out and clarifying the roles and responsibilities of the NESO, alongside Ofgem and the Government. The SPS is intended to provide guidance to the energy sector on the actions and decisions needed to deliver the Government’s policy goals, and places emphasis on where the Government expect a shift in the energy industry’s strategic direction.

As the independent energy regulator for Great Britain, Ofgem cannot be directed by the Government on how it should make decisions. Similarly, the NESO is being set up to be operationally independent and free from day-to-day government control. However, the SPS will provide guiding principles for Ofgem and the NESO, when it is established.

The strategic priorities and policy outcomes within the SPS do not include the creation of any new policies or duties. The SPS reaffirms the Government’s existing priorities and commitments, such as affordability, protecting consumers, security of supply, net zero, investment ahead of need, and encouraging Ofgem to make full use of its enforcement powers to support these ambitions. This statement will therefore support strategic alignment between government, Ofgem, NESO and the industry, through making clear what government wants to achieve in the energy sector.

As mentioned, the legal framework of the Energy Act 2013 means that Ofgem, NESO and the Secretary of State all have a duty to have regard to the strategic priorities within the SPS. Ofgem and NESO must also give notice to the Secretary of State if, at any time, they conclude that a policy outcome contained in the SPS is not realistically achievable. Ofgem must also publish a strategy showing how it will further the delivery of the policy outcomes, and its annual report must assess its contribution to delivery of the policy outcomes. The SPS therefore acts as a tool to promote alignment between government, Ofgem and NESO, as all parties will have to have legal regard to the statement in some sense.

As per the Energy Act 2013, the SPS has completed two consultations. The first consultation was undertaken with Ofgem and the Welsh and Scottish Governments. Government worked with all parties to make sure that their views were correctly captured before moving on to a second, public consultation held last summer. In the public consultation, government received views from Ofgem, the Scottish Government, ESO and many stakeholders across industry, including businesses, investors, trade bodies, suppliers, generators and infrastructure operators.

Feedback throughout both consultations was generally positive, and stakeholders were keen to see an SPS implemented to give guidance to the sector and clarity on the roles of Ofgem, NESO and government in delivering the Government’s priorities for the energy sector. Since the consultations have concluded, officials have worked through that feedback and, where appropriate, have used this to inform the current iteration of the SPS which is now laid before your Lordships. The Government are confident that this SPS reflects the right strategic priorities and policy outcomes for energy policy for the whole of Great Britain.

I thank the Secondary Legislation Scrutiny Committee for the time it has taken to review the SPS, as well as the noble Lords, Lord Hollick and Lord Lennie, the noble Baroness, Lady Hayman, and others, for their interest in the development of the SPS.

In conclusion, the SPS reaffirms the Government’s commitments and priorities for the energy sector and, in doing so, acts as a tool to support alignment between government, Ofgem, NESO and industry. I beg to move.

[Baroness McIntosh of Pickering (Con)]

My Lords, I congratulate my noble friend on bringing forward the draft strategy and policy statement, which I support.

As president of National Energy Action, and focusing on the SPS’s aims of affordability and protecting consumers to which my noble friend referred, I want to put a question to him. Although I accept, as the department explains in paragraph 46—this was also referred to by the Secondary Legislation Scrutiny Committee—that although Ofgem is independent of government, the regulator is required to

“have regard to the strategic priorities set out in this statement when carrying out its regulatory functions”,

does my noble friend share my concern, particularly for those living in fuel poverty, that although a consumer has control over the unit cost of electricity they are purchasing, they have less control over the standing charge? My understanding of the changes being brought in on 1 April, is that, although we are reducing the unit cost to the consumer, the standing charge is going up incrementally. I imagine, in a very short order—possibly two to three years’ time—that instead of standing charges going up to 50p or 70p, they will cost up to £1 per day. I believe that for many living in fuel poverty that is unaffordable.

So, while I accept that Ofgem should operate independently of the Government, I recall that in 2014, as part of the price review that the water companies’ regulator Ofwat carried out, the Government issued a request to Ofwat to have regard to the affordability of customers’ bills. My question to my noble friend is: is that something the Government might be minded to do under this SPS, in order to have regard to affordability and protecting consumers?

Biomass: Power Generation

Debate between Lord Callanan and Baroness McIntosh of Pickering

Wednesday 13th March 2024 Lords Chamber

[Baroness McIntosh of Pickering (Con)]

My Lords, will my noble friend look clearly at developing more home-produced products, such as fast-growing willow coppice, that will both give a sustainable source of energy to Drax but also help hard-pressed British farmers at this time?

[Lord Callanan (Con)]

My noble friend makes a good point. It is not just Drax; there are many commercial and domestic biomass boilers as well that I am sure would be happy to use sustainable British-produced biomass.

Electricity Network Connection Action Plan

Debate between Lord Callanan and Baroness McIntosh of Pickering

Wednesday 22nd November 2023 Lords Chamber

[Lord Callanan (Con)]

I think the noble Baroness will find that Ofgem’s view is that it was already fulfilling that mandate—and, of course, the vast majority of the new connections are because of new renewable electricity, which is to fulfil our net-zero obligations. Ofgem is fully in line with that.

[Baroness McIntosh of Pickering (Con)]

My Lords, does my noble friend not agree that it would make more sense to keep locally the electricity that is generated in the North Sea and coming onshore in Scotland, the north of England and Humberside, which have some of the coldest and poorest-insulated households in the UK?

[Lord Callanan (Con)]

I am not sure I understand the point my noble friend is making. The reason we have a national grid is to distribute electricity around the country so that all communities get the chance to benefit. If you had a much more localised system of grids, it would be much more inefficient. The whole idea or principle of the national grid is that the whole country can benefit from all our renewables infrastructure.

Biomass Strategy 2023: Cross Sectoral Sustainability Framework

Debate between Lord Callanan and Baroness McIntosh of Pickering

Wednesday 15th November 2023 Lords Chamber

[Lord Callanan (Con)]

I am pleased to hear that the noble Baroness has a biomass boiler. In fact, she does not need to get rid of it, because if she sources her pellets from the appropriate sources, that is a renewable resource. These are not pellets from virgin forests but by-products from the timber production process. There are very strict sustainability criteria attached to them and, even if those pellets were not used for biomass production, they would be a waste product because the timber would still be harvested for its other uses. So the noble Baroness does not need to feel so guilty.

[Baroness McIntosh of Pickering (Con)]

My Lords, will my noble friend look favourably on taking fast-growing willow coppice and miscanthus from local growers right across Yorkshire to give a constant stream of reliable, sustainable farm produce to Drax going forward?

[Lord Callanan (Con)]

I did not quite hear the start of my noble friend’s question, but if she is asking whether we want to source more sustainable biofuels from UK sources, the answer is yes, absolutely.

2030 Emissions Reduction Target: Heating

Debate between Lord Callanan and Baroness McIntosh of Pickering

Tuesday 5th September 2023 Lords Chamber

[Lord Callanan (Con)]

Public acceptability is a key component; that is why we ruled out Whitby for the trial. Redcar is the only other location being considered.

[Baroness McIntosh of Pickering (Con)]

My Lords, does my noble friend agree that decarbonisation would be faster if we had better insulated rental properties, rather than seeing most of the heat go through single-glazed windows, particularly in the north of England?

[Lord Callanan (Con)]

I would not characterise just rental properties in that way; whatever form of heating is used, better insulation and better performance of buildings is a good thing.

Road Fuel Prices

Debate between Lord Callanan and Baroness McIntosh of Pickering

Tuesday 4th July 2023 Lords Chamber

[Lord Callanan (Con)]

As I just said to the noble Baroness, Lady Blake, we will legislate as soon as we can. We will consult on the secondary regulations in the autumn, but we cannot implement them until we have the primary legislation through. There are of course a number of existing fuel price checkers, but the problem is that they are not updated frequently enough and are not compulsory, so not all retailers have to take part in them. When we have the powers, there will be a compulsory scheme and all retailers will be expected to comply.

[Baroness McIntosh of Pickering (Con)]

Does my noble friend agree that the excessive prices that have been charged have had a disproportionate impact on rural motorists and have added to the cost of deliveries of foodstuffs and other items? Is that something that the Government will keep a watchful eye on?

[Lord Callanan (Con)]

My noble friend makes a good point. For many rural areas, where filling stations perhaps do not get the throughput of customers, prices tend to be higher anyway. It is certainly something we want to keep an eye on to make sure that rural customers are not disadvantaged.

Drax Biomass Power Station

Debate between Lord Callanan and Baroness McIntosh of Pickering

Monday 3rd July 2023 Lords Chamber

[Lord Callanan (Con)]

The noble Lord should be careful of jumping to conclusions. I have not seen the programme, but my officials have. They have engaged extensively with forestry experts and Canadian officials following the programme, and the officials’ conclusion is that the “Panorama” programme provided an inaccurate representation of practices by the forestry and biomass sector on the ground.

[Baroness McIntosh of Pickering (Con)]

My Lords, looking at renewables more broadly, does my noble friend have a view on the efficacy and morality of taking electricity that has been generated offshore in the Yorkshire and Humber region and transporting it all the way down to the West Midlands, when we could actually use that electricity locally, particularly to power up electric cars, for which there are so few charging points in rural areas?

[Lord Callanan (Con)]

I have to say that I am really not sure what the noble Baroness is talking about. There is a national grid. Electricity is transported from all parts of the country to other parts, as demand varies. That is the whole principle of a grid.

Non-Domestic Alternative Fuel Payment Application Scheme Pass-through Requirement Regulations 2023

Debate between Lord Callanan and Baroness McIntosh of Pickering

Tuesday 16th May 2023 Grand Committee

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

My Lords, this instrument was laid on 17 April 2023 and debated yesterday in the other place. Its purpose is to ensure that the financial benefits from applications to the non-domestic alternative fuel payment scheme are passed through to end consumers. I thank the Joint Committee on Statutory Instruments and the Secondary Legislation Scrutiny Committee for their consideration of and comments on the regulations.

In response to the unprecedented rise in energy prices resulting from the Ukraine war, we have delivered critical support to households, businesses and other non-domestic consumers. Moving at considerable pace, the Government brought forward emergency legislation on energy support last year, paving the way for financial support to be delivered rapidly across the entire United Kingdom. The non-domestic alternative fuel payment scheme serves a crucial purpose in ensuring that businesses and organisations which are not on the gas grid and instead rely on alternative fuels for heating are not left behind and receive comparable support to users which are on the gas grid. Businesses, organisations and other non-domestic customers that use alternative fuel are receiving £150. These payments were disbursed through electricity suppliers, in most cases as a credit into the electricity supply accounts registered at qualifying properties. The vast majority of customers entitled to a payment will have already seen this credited to their bills.

We are providing the additional top-up payment to businesses and organisations consuming a very high volume of kerosene heating oil. An application service was opened on 20 March so that eligible non-domestic customers could claim this additional payment. We also provided an application process for businesses and organisations to apply for the basic £150 payment in the limited circumstances where this would not have already been received through electricity suppliers—for example, for alternative fuel users who do not have an electricity supplier and therefore did not receive a payment through this route.

This instrument plays an important role in making sure that support reaches those who need it. We have already brought forward regulations with respect to the main part of the scheme: the £150 payments delivered through electricity suppliers. This instrument complements those earlier regulations and extends that principle of pass-through to payments made in relation to the application process that commenced on 20 March.

I appreciate that some noble Lords are already familiar with the purpose of pass-through requirements, as we have brought forward several similar instruments before, not least the previous instrument in relation to this scheme. For those who may not be so familiar, let me explain what they do.

This instrument makes it mandatory for intermediaries to pass the financial benefit of the scheme on to end- users. It takes the same approach as the previous instrument and those relating to other price support mechanisms such as the energy bills support scheme and the energy bill relief scheme. That is needed because some payments will necessarily be made to intermediaries such as commercial landlords rather than the end-users, who ultimately bear the brunt of inflated energy bills. Where support is provided to an intermediary, we need to make sure that it can be appropriately passed on to the end-user.

Perhaps it would be appropriate to clarify what we mean by “end-user”. In the case of the non-domestic alternative fuel payment, an end-user is an individual, business or organisation which consumes energy or energy products and pays for that consumption indirectly through an intermediary. An example would be a tenant business paying for its energy usage through a service charge or all-inclusive rent.

As with the other energy schemes, this instrument requires support to be passed on in a just and reasonable way. The Secondary Legislation Scrutiny Committee has previously asked about the term “just and reasonable”, so let me clarify what these regulations are working to achieve. The regulations have been drafted in this way to account for the many kinds of relationships between an intermediary and an end-user. If the Government took a narrow definition of “just and reasonable”, there is the risk of inadvertently excluding some intermediaries from the pass-through requirements. This also accommodates scenarios where intermediaries have multiple end-users to pass the support on to. The regulations also make it clear when and how intermediaries should communicate with end-users, regarding the benefit being passed on.

I now turn to enforcement. The approach in this instrument 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 regulations also require intermediaries to provide information to end-users. For example, intermediaries must inform end-users of the amount of scheme benefit that has been received, the amount that will be passed on and the remedies available to the end-user. I thank the Joint Committee on Statutory Instruments for its comments on the enforcement of this requirement. Again, our approach is consistent with that taken in the earlier pass-through regulations for this scheme and across the other energy schemes.

With respect to that requirement to pass on information, it is important to reiterate that, in our view, there would be insufficient incentive for end-users to make use of an enforcement mechanism given the time and administrative burden involved in doing so. For that reason, the regulations do not provide a specific enforcement mechanism in relation to the obligation on intermediaries to provide information to end-users. Nevertheless, we consider that there remains value in retaining this requirement in the instrument, on the basis that we expect the vast majority of intermediaries to comply. This is aided by the Government’s publication of 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, that they can use to contact their landlords, should they be concerned about the application of pass-through requirements.

In conclusion, this instrument is vital to ensure that support reaches the people that it is designed to help. It is essential to the effectiveness of the non-domestic alternative fuel payment across the UK. It will ensure that intermediaries pass on the support to those who really need it, and that businesses and organisations paying for energy indirectly as tenants are properly supported at this time of high energy costs. It is with all these important reasons in mind that I commend these regulations to the Committee.

[Baroness McIntosh of Pickering (Con)]

My Lords, I thank my noble friend and the department for bringing this measure forward—it is deeply appreciated among businesses. Do we know what the duration of the support will be in this regard?

I take this opportunity to thank the department for bringing forward the impact assessment as part of this, because we are very quick to criticise departments when they do not include such assessments. On this occasion, however, it is very thorough and greatly appreciated. I have learned a new term—counterfactual. I am not quite sure what it means, but we are told that the option of this support is being considered against a “counterfactual of doing nothing”. I do not know whether this is yet another Americanism that has crept into the English language.

I shall just press my noble friend on one point. He has been quite clear about how the intermediaries are responsible for identifying the end-user, yet on page 4 of the 36th report, printed on 10 May by the Joint Committee on Statutory Instruments, it is clearly stated that the committee wishes to report defective drafting in Regulation 5. This refers to the fact, stated in paragraph 3.2 of the report, that there is

“no mechanism in the Regulations for enforcing these requirements. This reflects an approach adopted in previous instruments dealing with the pass-through of scheme benefits by intermediaries”.

How does my noble friend and the department respond to that charge against them?

That is the only question that I have. I wholeheartedly welcome the regulations before us this afternoon. It is extremely important that the support is given, particularly in areas such as rural areas which are off grid.

I know I said that that was the only comment that I had, but I have one last question. On the £150 going to the smaller users, does that mean that the civil action can be pursued through the small claims court, which obviously would not significantly add to their costs, if they had to bring such a claim to which my noble friend referred? I thank my noble friend and the department for bringing forward the statutory instrument before us today.

Retained EU Law (Revocation and Reform) Bill

Debate between Lord Callanan and Baroness McIntosh of Pickering

Report stage
Monday 15th May 2023 Lords Chamber

[Lord Callanan (Con)]

I do not require the noble Lord’s advice on this.

I will start with Amendment 2 from the noble and learned Lord, Lord Hope, which requires that legislation listed in the revocation schedule be referred to a Joint Committee of both Houses and be considered by the committee for a period of at least 30 sitting days. Should the Joint Committee consider that the revocation of the legislation listed would substantially alter UK law, a Minister of the Crown must ensure that the revocation be debated and voted on by both Houses prior to 31 December.

I start by reassuring noble Lords that it is the Government’s view that this amendment is unnecessary. Every piece of retained EU law in the schedule has been thoroughly reviewed, and will be reviewed and debated alongside Amendment 64, which has been tabled. I am confident that the changes to Clause 1 that we have introduced have alleviated the substantial concerns raised by Members across this House during the passage of the Bill and provided the legal clarity and certainty that has been called for.

Although I know that a number of noble Lords have not yet had the chance to see it, today we have published an extensive schedule explainer—again, responding to the concerns that many Members have raised; officials have been working hard on this all weekend—which explains, line by line, why each of the, in total, 587 pieces of legislation has been deemed suitable for inclusion on the schedule. That has been sent to every Member in advance of the debate on Wednesday. I hope that this will alleviate the concerns raised in this debate, including by my noble friend Lord Hodgson and the noble Lord, Lord Kerr, and other noble Lords, about the amount of information that has now been made publicly available.

In addition, the preservation power in Clause 1 will enable relevant national authorities to preserve legislation on the revocation schedule where they deem it necessary and where the relevant procedures and timescales have been adhered to. This provides a proportionate safeguard against unforeseen consequences of legislation listed on the schedule being revoked. The purpose of our amendment is to provide that legal certainty and clarity as efficiently as possible. To require yet further referrals and debates, and approvals to the list which can be scrutinised during the Bill’s passage, is unnecessary.

On Amendment 4, I have introduced changes to the Bill that I hope will reassure the noble and learned Lord, Lord Hope of Craighead—I think they have done—that his proposed changes to the functioning of the Bill are not necessary. Indeed, the revocation schedule I have laid guarantees that only a set amount of retained EU law will be revoked, which is clearly set out in the Bill. This is very similar to the mechanism proposed in this amendment that would see instruments or provisions expressly listed in a ministerial Statement. However, for a number of reasons, I believe that my proposed revocation schedule is better equipped to deliver this amendment’s desired outcome.

For similar reasons I am opposed to Amendment 6. This amendment would introduce changes to Clause 1 that are reflective of those already introduced by the Government. Indeed, the revocation schedule in Amendments 1 and 5 seeks to accomplish similar goals to Amendment 6 but in a more comprehensive way. This amendment would require a list to be compiled in order to be revoked and would open the door for multiple such lists being laid over the coming months. Again, the proposed revocation schedule is already drafted, has been vetted and is ready, and I believe it is a more appropriate solution. Finally, the amendment has unclear timelines and does not offer as much certainty as the revocation schedule, which is clear about when the revocation of pieces of retained EU law would occur and works in step with other timings in the Bill, such as the expiry of the powers on 23 June 2026.

I was going to refer to the amendment in the name of the noble Lord, Lord Hacking, but he said that he will not press it.

Amendment 8 attempts to exempt any pieces of legislation from the sunset should they be identified after the end of 2023. As I already outlined, this amendment is now unnecessary.

Amendments 10, 11 and 12 all concern the devolved Administrations and their preservation power in what was Clause 3. However, given that under my proposal Clauses 1 and 2 have been removed from the Bill and a revocation schedule has replaced the sunset, these three amendments are defunct and we ask that they are not pressed.

Amendment 16 seeks to oblige the Secretary of State to publish a health and safety impact assessment for any retained EU law which is to be revoked, at least 90 days before the revocation. All legislation listed on the revocation schedule has been considered by the relevant departments and checked by the relevant teams. As such, a health and safety impact assessment is not needed, given the depth of the work that has already been carried out.

We have introduced this Bill to help us realise the opportunities of Brexit. I reassure my noble friend Lord Jackson and other noble Lords that the Government remain committed to a reform programme. Legislation that has been identified on this schedule had already been identified and would have been allowed to sunset anyway. We are still committed to making the opportunities of the reform programme, and we retain the ambition and fundamental purpose behind this work.

I hope that the noble and learned Lord will feel able to withdraw his amendment and that other noble Lords will not press theirs and will support the government amendments.

[Baroness McIntosh of Pickering (Con)]

Before my noble friend sits down, will he respond to my question about sufficient consultation time being allowed? The Food Standards Agency has accepted all the legislation that relates to it which falls in the revocation schedule to which my noble friend referred, subject to sufficient time for consultation. Can my noble friend say, hand on heart, that, by the time the Bill is concluded, there will be enough time for consultation before the schedule applies?

[Lord Callanan (Con)]

I have seen the letter from the Food Standards Agency to which my noble friend refers. The schedule is published and we have now published the explainer, so people can see what is on it. The vast majority of legislation published on the schedule is unnecessary and redundant, and can be safely revoked.

--- Later in debate ---

[Lord Callanan (Con)]

The dashboard lists all the pieces of retained EU law that have been identified; the schedule lists those that are being revoked.

[Baroness McIntosh of Pickering (Con)]

My Lords, while I am extremely grateful to my noble friend, I think he has made a bit of an own goal because I think it is still the case that the dashboard is simply not comprehensive. My concern, and I think that of the noble Lord, Lord Hacking, the noble and learned Baroness, Lady Butler-Sloss, and others, is that there are a number of items of EU law that are simply not on the dashboard. As we speak today, I am unclear about what the legal status of the dashboard is.

What I do take comfort from, based on what I understand my noble friend to have said, is that, if, for example, there is a piece of Defra retained EU law that does not appear in the revocation schedule on which we are going to vote, it will remain on the statute book and, even more importantly, it cannot be amended. So it can neither be revoked nor amended. If that is not the case, I would ask my noble friend to rise to the Dispatch Box and explain where I am wrong.

--- Later in debate ---

[Lord Callanan (Con)]

I have explained this, but I will do so again. The powers to modify, change or update the assimilated law remain in the proposals. Obviously, the measures that are in the schedule will be revoked, but there are powers to modify, or restate. To take an example, interpretive effects are being abolished and, in some pieces of legislation, that will require minor changes to that legislation, to update it, because of the removal of interpretive effects. The policy intent will stay the same, but it is possible that some minor changes will be required, which is why the Government need this power. So the noble Baroness is partially correct to say that existing measures that are not being revoked will become part of assimilated law; but the Government do have the power to modify or change them.

[Baroness McIntosh of Pickering (Con)]

My Lords, I am not sure that that is entirely clear, but I have pressed the point as much as I can at this stage. I beg leave to withdraw my amendment.

Energy Bill [HL]

Debate between Lord Callanan and Baroness McIntosh of Pickering

Report stage
Monday 17th April 2023 Lords Chamber

[Lord Callanan (Con)]

I did organise a recent meeting with officials to discuss the issue, at the request of the noble Baroness’s Front-Bench colleague, the noble Lord, Lord Teverson. The noble Baroness had the opportunity to attend if she had wished to.

[Baroness McIntosh of Pickering (Con)]

My Lords, I am grateful for the discussion that we have had on the various amendments in this group, and that my noble friend the Minister referred to the use of coal on heritage railways. I am delighted to say that I am president of the North Yorkshire Moors Railway and hope that we can continue to enjoy the spectacular scenery and days out that heritage railways offer.

I am disappointed that my noble friend missed an opportunity to explain to the House specifically which areas the amendments to the levelling up Bill will cover. Rather than detain the House further at this stage, I will pursue that through Written Questions, where I will have to get an Answer. I beg leave to withdraw my amendment.

Cleaner Energy Technologies

Debate between Lord Callanan and Baroness McIntosh of Pickering

Tuesday 14th March 2023 Lords Chamber

[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.

Carbon Budgets: Methane Flaring

Debate between Lord Callanan and Baroness McIntosh of Pickering

Thursday 9th March 2023 Lords Chamber

[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.

Green Investment

Debate between Lord Callanan and Baroness McIntosh of Pickering

Tuesday 7th March 2023 Lords Chamber

[Lord Callanan (Con)]

The noble Lord would not expect me to comment on detailed negotiations with particular companies. We have long had a policy of open and free trade, but we have some relatively limited and targeted investments, including in the automotive sector, which have proved very successful. We are not going to follow the lead of the US and close our borders to foreign competition.

[Baroness McIntosh of Pickering (Con)]

I congratulate the Government on the investment in National Savings bonds. Will my noble friend tell us what the level of investment has been and what type of projects have benefited from them?

[Lord Callanan (Con)]

I am afraid I do not have that information to hand. I will need to write to my noble friend.

Retained EU Law (Revocation and Reform) Bill

Debate between Lord Callanan and Baroness McIntosh of Pickering

Committee stage
Thursday 2nd March 2023 Lords Chamber

[Lord Callanan (Con)]

I do not agree with the noble Lord’s characterisation. If they wish, it is perfectly possible for them, before the sunset date, to renew that legislation. The extension mechanism is of course something that we will discuss with them as appropriate.

[Baroness McIntosh of Pickering (Con)]

I have to say that that is a little disappointing as a summing-up. I take responsibility for not giving proper hearing to the amendments in the name of the noble and learned Lord, Lord Hope—I had not realised he had slipped away, and I had promised to speak to them, so I am very grateful to the noble and learned Lord, Lord Thomas, for speaking to Amendment 58.

In summing up, my noble friend did not refer to the fact that the Scottish Parliament have removed their consent from the Bill—news which reached us only a week ago. My noble friend did not respond on what the Government’s approach will be to the amendments. That would help us in our deliberations.

I am extremely grateful to the noble Lord, Lord Collins, for probing as eloquently as he has, because that is the purpose of Committee. It would be helpful to know at this stage how the Government intend to respond to the amendments from the Scottish Parliament, though they are not before us today but in a different procedure.

Obviously, I prefer my deadline to that of my noble friend, but I am very grateful to her for tabling the amendment for debate. Equally, the noble Baroness, Lady Humphreys, spoke very eloquently about the position in Wales.

I am slightly at a loss here. I have been a UK parliamentarian for a while now but I was born in Scotland, and it grieves me that the UK Government do not appear to be making proper commitments in what was the internal market Bill and other Acts that we have passed, not just the Bill before us today. I feel that the Government’s work is cut out for them on this group of amendments.

I am sure that we will wish to return to these issues at a later stage but, for the moment, I beg leave to withdraw Amendment 51.

--- Later in debate ---

[Lord Callanan (Con)]

I am not going to give an absolute commitment, but I will talk to the lawyers. On the famous letter from my noble friend Lady Bloomfield, I actually pushed officials to try to assimilate the contents of the letter and get it out to the Committee as quickly as possible, because I thought noble Lords would want to see it before we considered the Bill on a further day. They worked very late into the evening to get the letter out, after going through all the necessary approvals that the Government need to go through. Given some of the criticisms, I wish I had not bothered. Nevertheless, I still think it was helpful to noble Lords and will do my best to get them the letter to which the noble Baroness referred.

[Baroness McIntosh of Pickering (Con)]

My Lords, this has been an excellent debate. It reflects not least the concerns of the legal practitioners, who will be left to interpret the status of the laws. But what concerns me is that the Minister and the department are perhaps in denial about the level of concern that has been expressed not just in the Committee this afternoon but in those examples from various sectors that we have heard today. This has been a beneficial session in probing where we can reach agreement before Report to help the Government get the Bill through. I know that my noble friend cares very deeply and passionately about that.

The Committee accepts that the supremacy of EU law will go but my noble friend needs to consider whether the abolition of this principle will affect the interpretation of EU law when it comes to being assimilated. Is that not a factor to take into account in how we assimilate that law? I leave my noble friend and the Committee with that thought.

However, I believe that we have established some ground rules during this debate, so that we can regroup before Report. I, among others, look forward to receiving the letter from my noble friend and, at this stage, beg leave to withdraw my amendment.

Vulnerable Households: Energy Costs

Debate between Lord Callanan and Baroness McIntosh of Pickering

Tuesday 31st January 2023 Lords Chamber

[Baroness McIntosh of Pickering (Con)]

My Lords, I beg leave to ask the Question standing in my name on the Order Paper and in doing so I refer to my entry on the register as honorary president of National Energy Action.

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

My Lords, as part of the Government’s comprehensive package of support, in addition to the energy bills support scheme, EBSS, and the energy price guarantee, EPG, there is further targeted support for vulnerable households to help them to navigate these challenging times. This includes a cost of living payment of £900 to households on means-tested benefits, £300 to pensioner households and £150 to individuals on disability benefits. Ofgem is supporting the Government to deliver EBSS and EPG.

[Baroness McIntosh of Pickering (Con)]

I pay tribute to the Government’s warm home discount scheme and accept that it has been an enormous success. Recently, the chief executive of Ofcom has asked for a serious assessment of introducing a social tariff. Given the fact that Citizens Advice recognises that there has been an excess profit of £7.9 billion this year for electricity distribution companies, will my noble friend do one of two things: either introduce a new social tariff or increase the warm home discount? Instead of asking other households to pay for it, will he ask the electricity distribution companies to pay for the increase?

[Lord Callanan (Con)]

There were a lot of questions there. The issue around social tariffs is that the warm home discount was introduced in the first place to replace various social tariffs on offer because this was considered to be a better way of supporting vulnerable households, but we always keep these things under review. I did not quite understand my noble friend’s point about excess profits. If she was talking about suppliers, many suppliers have actually gone bankrupt; they are not making excess profits. If she was talking about generators, we have already imposed an excess profit levy on generators.

Hospitality Industry

Debate between Lord Callanan and Baroness McIntosh of Pickering

Tuesday 24th January 2023 Lords Chamber

[Baroness McIntosh of Pickering (Con)]

My Lords, will my noble friend look favourably on keeping the alcohol duties at their current levels while the hospitality industry continues to suffer due to the crisis we are currently experiencing?

[Lord Callanan (Con)]

Again, I know that the Chancellor keeps alcohol duty levels under constant review. I am sure that I am the same as all other noble Lords, who would love to see them reduced, but if you raise this with the Treasury, it will say that it has lots of demands for tax and duty reductions and not many people offering to increase others to make up for them.

Prepayment Meters

Debate between Lord Callanan and Baroness McIntosh of Pickering

Tuesday 24th January 2023 Lords Chamber

[Lord Callanan (Con)]

I am sorry, but the noble Baroness is absolutely wrong. First, nobody is forced to have a smart meter. Secondly, if you have a smart meter, you pay the same tariff. There is no difference in cost just because of the particular meter you have. Smart meters are, in my view, a great innovation and provide a lot of comfort and ease for consumers—but there is no difference in the tariffs between normal meters and smart meters.

[Baroness McIntosh of Pickering (Con)]

My Lords, is my noble friend aware that prepayment meters lose the option of the direct debit reduction, so those customers are actually paying a premium rate? Also, in Committee on the Energy Bill, I mooted the idea of a social tariff for the most vulnerable customers, which the Government are now looking at. Will my noble friend bring forward amendments on Report in that regard?

[Lord Callanan (Con)]

As I said, people pay slightly more for prepayment meters because of the cost to suppliers of servicing those customers. The issue of social tariffs is of course different. I have had this debate with my noble friend before. We had a system of social tariffs that was replaced by the warm home discount, which was found to be a better way of supporting vulnerable customers. But, of course, we will continue to look at the issues.

REUL Bill: Trade Unions and Workers’ Rights

Debate between Lord Callanan and Baroness McIntosh of Pickering

Monday 23rd January 2023 Lords Chamber

[Lord Callanan (Con)]

I thought I had answered the noble Lord, Lord Woodley, but let me repeat the point for the noble Lord, Lord Watts, who obviously was not listening closely. UK employment rights do not depend on the European Union. Let me give him some more examples of how our rights are better than in the EU. The right to flexible working for all employees was introduced in the UK in the early 2000s; the EU agreed such rules only recently. The UK introduced two weeks of paid paternity leave in 2003, but the EU has got around to that only recently.

[Baroness McIntosh of Pickering (Con)]

My Lords, given that most of the directives and regulations within the EU retained law Bill fall within the brief of Defra, will my noble friend commit to employing more experts in this field, even on a temporary basis, who will be able to take a view as the Bill proceeds and before its implementation?

[Lord Callanan (Con)]

I will leave the appropriate Ministers to commentate on what is happening in Defra. The noble Baroness is right that a lot of retained EU law belongs in Defra. I am sure Defra is looking very closely at what can be changed, modified or repealed as we speak.

Energy Bill [HL]

Debate between Lord Callanan and Baroness McIntosh of Pickering

Committee stage
Monday 16th January 2023 Grand Committee

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

My Lords, I will also speak to Amendments 222ZB, 222ZC, 222ZD, 222ZE, 222ZF, 242I and 246A in my name. They will deliver on commitments we made in the British Energy Security Strategy to support the simplification of the offshore wind consenting process while continuing to protect our marine environment and meet our international conservation obligations.

The UK is a leader in offshore wind—we have the most installed capacity in Europe, as the Committee will be bored of hearing me say. Our ambition is shared across the devolved Administrations and we recognise the key role of Scottish projects in particular, as well as Welsh projects in the Celtic Sea. We will continue to work with the devolved Administrations as the Bill progresses through Parliament and as we develop subsequent secondary legislation to ensure a streamlined and efficient consenting process across the whole of the United Kingdom.

Amendment 222ZA sets out definitions for the subsequent clauses and Amendment 222ZB allows the use of strategic compensation measures to discharge obligations under the habitats regulations, the Marine and Coastal Access Act 2009 and the Scottish and Northern Irish equivalents. If all feasible options to avoid, reduce or mitigate any adverse impact on protected sites have been exhausted, the consenting authority may decide that an offshore wind project is in the public interest. However, it must first satisfy itself that sufficient compensatory measures are taken or secured before granting consent.

Identifying ecologically robust and securable compensatory measures in the marine environment frequently causes delays to project consent. To date, these measures have been delivered on a project-by-project basis. This is likely to become increasingly challenging. This amendment will enable earlier identification and agreement of suitable compensatory measures on a larger scale across multiple projects, which will help to support quicker decision-making on consents. Ministers in the devolved Administrations will retain their current roles in consenting. This amendment will ensure that they are also able to agree and secure strategic compensatory measures to satisfy compensation obligations for projects to which they consent.

Amendment 222ZC will enable the creation, operation and management of one or more marine recovery fund. The funds, once established, will be an optional mechanism for offshore wind developers to discharge a specified consenting condition that will help to compensate for damage to a protected site by paying into the fund. The Secretary of State will be able to delegate functions connected with the marine recovery fund. It is our intention to delegate the functions necessary for devolved Administrations to operate their own funds where appropriate, so that their Ministers may choose to use a marine recovery fund to undertake the delivery of measures related to projects to which they consent.

Amendment 222ZD will help to speed up the consenting process by streamlining assessments, including the habitats regulations assessment process. It will do this by enabling future regulations to address environmental protection of all protected marine sites early enough in the pre-application planning process to inform adequate and ecologically robust mitigation measures. This amendment also allows the Government to consider enabling developers to provide compensatory measures that improve wider marine ecosystems. I must emphasise that this broader approach would be considered only where developers have already avoided and mitigated their environmental impacts, and where like-for-like measures are not possible. Consent decisions will remain subject to advice from Defra’s statutory nature conservation bodies and their equivalents in the devolved Administrations.

Amendment 222ZE requires the Government and the devolved Administrations to consult each other, as well as statutory nature conservation bodies and marine regulatory bodies, on changes to the process prior to making regulations on environmental assessments.

In addition to Amendment 222ZA, Amendment 222ZF sets out some key definitions for the purposes of these new clauses. Amendment 242I ensures that the provision about affirmative procedures in the UK Parliament does not apply to regulations made by the Scottish Ministers under Amendment 222ZD, which will instead be subject to affirmative procedure in the Scottish Parliament. Amendment 246A sets out the commencement date of the clauses in this chapter. With that, I beg to move.

[Baroness McIntosh of Pickering (Con)]

My Lords, it would be churlish of me not to congratulate and thank my noble friend the Minister and the department on bringing forward the amendments to which he just referred. He promised these at Second Reading and they form part of a package, from April 2020, in the British energy security strategy. So far, so good. However, as I mentioned at Second Reading, in the EU Energy and Environment Sub-Committee some two or three years ago we took evidence to the effect that there should be a moratorium, particularly given the scale of the programme, the numbers involved and the massive area to be covered by offshore wind development; as my noble friend said, that is a very ambitious programme. However, the government amendments are flouting the mitigation hierarchy that I am sure he would wish to sign up to. The amendments seem to be proceeding to the end stage, which is only meant to be a last resort in law: that is, mitigation and compensation.

--- Later in debate ---

[Lord Callanan (Con)]

My Lords, I thank all noble Lords for their contributions to this debate and the broad support for the government amendments. I congratulate the noble Baroness, Lady Worthington, on summarising quite well the dilemma that we all face in these matters: we can spend lots of time doing lots of very detailed environmental assessments and take everything into account, but the practical effect is that we continue with the existing power generation system that we know is damaging. I am not pretending that any of these issues is easy, but we think that we have provided a balance.

I start by providing reassurance that these amendments will not change the level of environmental protection, only the responsibility for delivering those actions, to ensure that they are implemented at the earliest opportunity and across a broader area than planned.

I thank my noble friend Lady McIntosh for her Amendments 242C and 242D on the impact of offshore wind farms on wildlife and marine habitats. On her first amendment, I reassure her that the Government already have in place rigorous environmental protection processes which each offshore wind development must undergo. These include a requirement for the Secretary of State to consult the relevant statutory nature conservation body and an examination of each application by an examining authority—in this case the Planning Inspectorate—which makes an independent recommendation to the Secretary of State. When developers submit their applications, they are required to provide information to enable the competent authority—in this case the Secretary of State—to undertake various assessments, including an environmental impact assessment and, where relevant, a marine conservation zone assessment and/or a habitats regulation assessment. These evaluate the impacts that the projects will have on the environment throughout their operational life cycle, from construction right through to eventual decommissioning.

Turning to Amendment 242D, I welcome my noble friend’s interest in our marine protected areas network. The current planning and legislative frameworks already ensure that offshore wind developments undergo rigorous scrutiny to identify impacts on marine protected areas, including the environmental assessments that I have just outlined. If at any stage of its life cycle the offshore wind farm would have impacts on protected sites and those impacts cannot be avoided, reduced or mitigated, but at the same time the project is considered to be in the public interest, then the Secretary of State, as the appropriate authority, has a duty to ensure that the necessary compensatory measures are put in place.

Defra is currently leading work with the offshore wind industry and other stakeholders to develop a library of ecologically robust and commercially feasible strategic compensation measures. Those compensation measures within the library will have had their effectiveness and feasibility tested before they are ever placed in that library. We also intend to introduce a set of offshore wind environmental standards for offshore wind farms, including a noise standard. The standards will apply across the industry and will, we hope, reduce the overall environmental impact of the sector.

It should not be automatically assumed that offshore wind developments will necessarily be harmful to marine protected areas. In many cases, such developments, as the noble Baroness, Lady Worthington said, may be compatible with the conservation objectives of the marine protected area in question. In any event, the Secretary of State cannot provide consent for an offshore wind development unless they are satisfied that the sequential legislative tests have been met.

[Baroness McIntosh of Pickering (Con)]

I understand that in Norway oil and gas firms are required to publish the environmental data that they hold. Would my noble friend see fit to ensure that the same happened here? What sort of environmental impact assessment is done before planning is given?

[Lord Callanan (Con)]

I have just outlined to my noble friend all the different assessments that are carried out before permission is given. The Planning Inspectorate makes a recommendation to the Secretary of State, and all those documents are published when relevant consents or others are given. If that is not the case, I will correct that for my noble friend, but as far as I am aware they are all published.

In respect of the comments that were made about the onshore grid, the amendments here apply only to the offshore elements of the wind farm development, which are the generation station itself and the offshore transmission. The building and the upgrade of the onshore network infrastructure—I am well aware that that is a very controversial subject in certain parts of the country, particularly East Anglia, at the moment—will always be subject to separate planning applications from National Grid, which is undertaking that work.

I reassure my noble friend that the wider offshore wind environmental improvement package has an evidence programme looking at all environmental impacts of offshore wind and how to address them, including a workstream on the impact of noise on marine mammals. The offshore wind environmental standards will use that evidence base to suggest any appropriate mitigation measures that developers can take. With that explanation, I hope my noble friend is reassured that existing legislation provides for robust protection for wildlife and for our marine habitats, and will therefore feel able to not press her amendments.

I turn to the question from the noble Lord, Lord Teverson, about whether the fund is voluntary. The marine recovery fund will be an optional framework through which developers could discharge a condition of their consent, to compensate for any adverse environmental effects on a protected site or sites that cannot otherwise be avoided or mitigated. Developers will of course retain the ability to deliver compensation outside the MRF. Again, Defra is currently looking at a range of potential operators for the fund. We will set out further details in the regulations when they are tabled, and I am sure we will have further debates on that important subject. I thank noble Lords for their contributions to the debate.

[Baroness McIntosh of Pickering (Con)]

Would my noble friend explain the status of the mitigation package, with compensation coming last and mitigation, recovery and all the other aspects coming first? What is its status in law?

[Lord Callanan (Con)]

Yes, of course, mitigation avoidance will always come first. It is only as a last resort, if it cannot be avoided or mitigated, that compensation will be looked at as an alternative—only at the very last stage.

Product Safety and Metrology (Amendment and Transitional Provisions) Regulations 2022

Debate between Lord Callanan and Baroness McIntosh of Pickering

Tuesday 13th December 2022 Grand Committee

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

My Lords, since 1 January 2021, the post-exit UK conformity assessment—UKCA—marking has been in use alongside recognition of the EU’s CE and reversed epsilon markings. For most product sectors, recognition of the CE marking in Great Britain is due to end at 11 pm on 31 December this year. The main objective of this instrument is to reduce immediate cost increases and burdens for businesses, given the current cost of living crisis and global supply issues, by providing businesses with additional time to transition to UKCA requirements. This means that businesses will continue to have flexibility in how they can legally place products on the market in Great Britain while maintaining high levels of product safety for British consumers. Without the measures implemented by this instrument, industry will have to meet UKCA requirements from 1 January 2023 at a time of economic hardship for many businesses.

By way of background, the UKCA marking was introduced in Great Britain to replace the EU’s CE marking. As a result of Brexit, we have the autonomy to set our own product regulations and ensure that they work for businesses and consumers in this country. To place products on the market in Great Britain, manufacturers must ensure that products meet the essential safety requirements of relevant product legislation. Compliance is achieved by following a conformity assessment procedure. For lower-risk products, manufacturers can self-declare compliance; for higher-risk products, manufacturers may need to go to a conformity assessment body—a CAB—for product testing.

We have of course engaged with businesses on the challenges that they face in transitioning to UKCA. The feedback that we received from industry informed the decision to announce a range of measures in June to make it easier for businesses to use the UKCA marking. However, given the current cost of living crisis and economic challenges that businesses are facing, we need to go further in our support. The SI will not only implement the measures announced in June but provide flexibility to allow businesses to use CE marking or UKCA marking for their goods for a further two years.

Over the past 12 months, officials have delivered an extensive programme of domestic and international engagement to support businesses transitioning to the UKCA regime. Officials have also engaged with UK conformity assessment bodies and worked closely with the UK Accreditation Service to ensure that organisations that wish to become UK CABs can do so.

Despite the work we have done to support industry to transition, industry engagement has indicated that the additional costs and burdens of fulfilling UKCA requirements may be impacting UKCA business uptake. Although we recognise that a further extension to the recognition of CE marking may raise questions about the future transition timescales to the mandatory UKCA regime, we believe that the benefits of reducing immediate burdens and costs for industry in the current economic climate outweigh the potential risk of business hesitancy to prepare.

The UKCA marking remains valid when placing goods on the market in Great Britain. We will continue to engage with industry closely to provide businesses with support and to understand how to take a pragmatic approach to improving regulation to the benefit of businesses and consumers.

I turn to the key elements of the instrument. First, this instrument extends the time for existing transitional provisions allowing certain products meeting EU requirements and markings to be placed on the market, or put into service, in Great Britain. This will give businesses the option to choose to use the CE marking for a further two years until 31 December 2024.

Secondly, this instrument provides that where a manufacturer has undertaken any steps under EU conformity assessment procedures in the period up to 31 December 2024 but those goods have not been placed on the Great Britian market, those steps will be taken to have been done under the equivalent UK conformity assessment procedures. This applies for only as long as any certificate issued is valid or until 31 December 2027, whichever is sooner.

Thirdly, this instrument extends time for existing labelling easements. This will allow businesses to affix the UKCA marking and to include importer information for products imported from EEA countries, and in some cases from Switzerland, on a label affixed to the product or an accompanying document, rather than on the product itself.

The SI does not cover all product areas that require UKCA marking, and there are different rules in place for medical devices, construction products, cableways, transportable pressure equipment, unmanned aircraft systems, rail products, and marine equipment.

Without the measures implemented by this instrument, most businesses will have to meet UKCA requirements from 1 January next year for product sectors covered by this instrument, at a time of cost of living increases and global supply chain challenges. From 1 January 2023, if businesses are unable to meet UKCA requirements, most businesses will not legally be able to place their products on the Great British market. This could cause short-term market and supply chain disruption across different sectors. In turn, reduced product availability could translate into higher costs for commercial supply chains and consumers.

In conclusion, I hope noble Lords will recognise that, at a time of cost of living increases and global supply chain challenges facing UK businesses, it is vital that the UK Government continue to support businesses. Without this legislation in place, recognition of the CE marking in Great Britain would end at 11 pm on 31 December 2022 for most product sectors. The main objective of the instrument is to provide businesses with additional time to transition to the post-exit independent UK conformity assessment marking by providing flexibility to use either CE marking or the UKCA marking, while maintaining high levels of product safety for UK consumers. Therefore, I commend the regulations to the Committee.

[Baroness McIntosh of Pickering (Con)]

While my noble friend pauses for breath, I thank him for introducing the regulations. What will their status be in the context of the EU retained law Bill? Will this be one that the department seeks to keep or to dispense with?

Energy Supplies

Debate between Lord Callanan and Baroness McIntosh of Pickering

Wednesday 12th October 2022 Lords Chamber

[Lord Callanan (Con)]

The noble Lord speaks a great deal of sense. They are eminently sensible suggestions and of course local communities will want to feel the benefit of any procedures that they consent to in their areas.

[Baroness McIntosh of Pickering (Con)]

My Lords, following up that point, does my noble friend agree that energy from waste is very much the way forward, and will he ensure that any benefits go to the local community from electricity generated from waste?

[Lord Callanan (Con)]

I am happy to agree with my noble friend that energy from waste is an excellent production technique. There are many successful energy-from-waste projects; it is another technology that will make a contribution to our energy supply.

Prepayment Meters: Pricing

Debate between Lord Callanan and Baroness McIntosh of Pickering

Tuesday 11th October 2022 Lords Chamber

[Lord Callanan (Con)]

I assume the noble Lord is referring to Ofgem. I can assure him that it looks very closely at the balance between standing charges and individual units, but the network has to bear certain standing costs, which are independent of individual units of gas and electricity. We talked earlier in this Question about the expansion of renewables. Of course, the expansion of renewables involves enormous changes to the structure and operation of the grid to make sure that that power can be transmitted around the country, and that has to be paid for.

[Baroness McIntosh of Pickering (Con)]

My Lords, my noble friend will be aware that those living in rural areas pay the highest cost of fuel, which is not covered by the price cap. I am thinking of oil, solid fuels and LPG. What plans do the Government have to extend the price cap to these fuels to help those living in rural areas, particularly in the north of England and other parts of the country where it is particularly cold in the winter?

[Lord Callanan (Con)]

Of course, a number of people across the country live off the gas grid and use oil, LPG, et cetera. The noble Baroness is right that in most cases they benefit from the electricity cap, but they do not benefit from the gas cap. We are looking at how they can be assisted. We have a commitment that they will receive an equivalent level of support and we will ensure that that is the case.

Energy Bill [HL]

Debate between Lord Callanan and Baroness McIntosh of Pickering

Committee stage
Wednesday 7th September 2022 Lords Chamber

[Lord Callanan (Con)]

I will leave that as a comment; there is nothing I can reply to on it. When I have further information, I will update the Committee.

The commitment proposed by my noble friend Lord Moylan to have in storage gas equivalent to 25% of forecast domestic consumption by 2025 is extremely ambitious. It is also horrendously expensive to do and, I submit to the Committee, unnecessary. The Government fully recognise the importance of gas storage, as I said, and officials continue to work on the future role that it can play in the clean energy landscape, particularly as gas production, as a number of noble Lords have said, can start to decline. But, of course, the fact that we get 45% of our production from our own continental shelf is, in effect, a giant gas storage facility and that is why we have traditionally had much less than continental countries which do not have those advantages. There is an integrated market—that is correct—and both sides benefit from it. As I said, the interconnectors over this year have been operating massively in the direction of the rest of continental Europe from the UK.

I think I have answered all the questions that were raised about gas storage facilities.

[Baroness McIntosh of Pickering (Con)]

I am sure it is on the departmental website, but do we know how much gas is supplied by interconnectors from Norway, and how much is supplied by tankers from Dubai and other countries in the overall scheme of things?

[Lord Callanan (Con)]

When my noble friend says “tankers”, I take it she means LNG tankers. I forget the exact figure, but we get 45% from our own domestic capacity and about 3% to 4% through interconnectors, so I guess the rest will be made up from LNG shipments. We have three LNG gasification terminals in the UK. Those figures are off the top of my head; I will correct them if they are not right.

Turning to the amendment in the name of the noble Lord, Lord Foster, I am sure he expects the reply that he is going to get. As he will be well aware, changes to tax policy are considered as part of the Budget process. As Treasury officials are always very keen to tell me whenever I put forward such proposals, they have lots of proposals from people for exemptions from various taxes but not many proposals for how to make up the revenue that would be lost from them. I am sure that the Chancellor will want to take that fully into consideration in the context of the Government’s wider fiscal position. I fully take on board the points that the noble Lord made. The Government keep all taxes under review and always, the Treasury tells me, welcome representations to help inform future decisions on tax policy.

Net Zero Strategy: High Court Ruling

Debate between Lord Callanan and Baroness McIntosh of Pickering

Thursday 21st July 2022 Lords Chamber

[Lord Callanan (Con)]

I thank my noble friend for his recommendation for my holiday reading. I am not certain yet I will get a holiday, but if I do, I am sure his committee’s report will make fascinating reading—though I need no persuading of the importance of home energy efficiency and insulation schemes. We continue to progress work on just such a scheme, and I hope the new Prime Minister, when he or she comes into office, will support it.

[Baroness McIntosh of Pickering (Con)]

I will be taking the Energy Bill with me as my holiday reading. I congratulate my noble friend on the Statement he made and on having regard to the unprecedented energy circumstances in which we find ourselves and the challenges this poses for farmers and others. In support of the words of my noble friend Lord Howell, I ask my noble friend the Minister to increase the efforts of international co-operation to ensure that other countries are matching the efforts of this country and others in Europe.

[Lord Callanan (Con)]

My noble friend can be assured that we will do that. We make a relatively small contribution. We need to set the lead, but this is the epitome of an international problem, and all our efforts will be negated if other, bigger emitters do not reduce their emissions as well, so her point is correct and powerfully made.

Energy: Prices and Supply

Debate between Lord Callanan and Baroness McIntosh of Pickering

Thursday 14th July 2022 Lords Chamber

[Lord Callanan (Con)]

The noble Viscount makes a good point. The Prime Minister and my noble friend Lord Grimstone visited the UAE and Saudi Arabia on 15 and 16 March. They met leaders of both countries and had some extremely productive discussions about collaboration and the importance of maintaining energy security and working together to help the green transition.

[Baroness McIntosh of Pickering (Con)]

My Lords, I declare my interests in respect of National Energy Action.

I welcome Ofgem’s ruling that overpayments of grossly inflated direct debits will be rectified. However, does my noble friend not question why the standing charge on each household bill has increased by up to 50%, given that this goes to distributors whose costs have not increased to the same extent as those of electricity suppliers? Should this not be urgently investigated?

[Lord Callanan (Con)]

Ofgem does look very closely at connection cost standard charges and direct fuel costs. Funding the transition from a big node-type power supply to lots of more diverse, renewable sources of energy requires considerable investment in our transmission system. In order to expand the use of electric cars, heat pumps et cetera, we must reinforce the electricity supply system, which of course needs to be paid for.

Warm Home Discount (England and Wales) Regulations 2022

Debate between Lord Callanan and Baroness McIntosh of Pickering

Monday 20th June 2022 Grand Committee

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

My Lords, these regulations were laid before the House on 12 May.

For 11 years, the warm home discount scheme has ensured much-needed support to millions of households. Since it began, it has provided more than £3.3 billion in direct assistance to households. Primarily, this support has taken the form of direct rebates off household energy bills.

The Government committed in the 2020 energy White Paper to extend and expand the scheme and to reform it better to target households in fuel poverty. These regulations provide for that expanded and reformed warm home discount scheme in England and Wales. Under the regulations, the scheme is set to last until 2026. The regulations succeed the previous warm home discount regulations in England and Wales. The Government will lay separate regulations for an expanded warm home discount scheme in Scotland, which will be debated separately.

The regulations have six main provisions. First, the expanded annual spending envelope is set in the regulations. For winter 2022-23, the spending envelope is £474 million, rising each year thereafter. Secondly, participating energy suppliers will be obligated to provide rebates directly off the energy bills of fuel-poor households. The value of the rebates for households is set at £150—an increase of £10. This means that around 2.8 million households will receive a rebate every winter. Thirdly, the scheme will continue to provide rebates to pensioners on the lowest incomes—those in receipt of the guarantee credit element of pension credit. This “core group 1” of eligible pensioners, as it is known, has been a key feature of the scheme throughout its existence.

Fourthly, there will no longer be a “broader group” of other low-income and vulnerable households. Under the former scheme, this group was required to apply to their supplier every year for a rebate. Even if eligible, these households were not guaranteed to receive a rebate, and the criteria varied by supplier. The Government are therefore creating a “core group 2” of households on the lowest incomes and with the highest energy costs. Eligible households will be those in receipt of one of the qualifying means-tested benefits or tax credits and meeting a high energy cost threshold. These households will be identified through data matching using benefits data, property characteristics data and energy supplier customer data. The Government intend to publish a statement setting out the exact details of the eligibility, including the high-cost threshold.

Fifthly, these regulations make it mandatory for suppliers to contribute to Industry Initiatives. Industry Initiatives allow suppliers to fund other financial and energy-related measures such as financial assistance payments, debt write-off, benefit entitlement checks, energy advice and energy efficiency measures. Industry Initiatives will be set at £40 million for this winter and rise each year thereafter. The regulations also set minimum obligations and caps regarding financial assistance. This recognises the value that they provide, while ensuring that other high-value Industry Initiatives measures still receive funding.

In addition, the Government are maintaining aggregate and household-level caps on debt write-off to avoid this measure being misused to reduce bad debt. The last Industry Initiatives restriction is to limit the number of mains gas-powered boilers and central heating systems that can be installed. These will still be permitted to support particularly vulnerable customers during emergencies but will be restricted to align with the heat and buildings strategy.

Sixthly, and finally, the regulations set the thresholds for suppliers participating in the scheme. The Government are lowering the thresholds so that more suppliers participate, and to reduce the barriers to customers switching suppliers. In 2022-23, the threshold will be set at 50,000 domestic customer accounts; from 2023-24, it will be set at 1,000 accounts. This means that 99.9% of the market is covered.

The Government are expanding the scheme to provide rebates to 750,000 more households. Thanks to these reforms, the vast majority of eligible households will receive their rebates automatically, without having to apply. A small minority will be contacted and required to contact a helpline to confirm their details.

The Government’s analysis shows that, by focusing support on households on the lowest incomes, the fuel poverty targeting rate will increase to 47% overall and 560,000 more fuel-poor households will receive a rebate compared with an unreformed scheme.

The Government held a consultation on these reforms last summer and we published our response in April. The consultation responses supported extending and expanding the scheme as well as proposals for reform. The Government are proceeding with the main proposals; however, we decided to make a number of changes in light of the consultation responses. We have added housing benefit to the list of qualifying benefits, and tax credits in the eligibility criteria for core group 2. Energy suppliers will be required to provide estimates of the value and proportion of spending under industry initiatives in relation to households where a person has a disability or a health condition. This will enable the Government to monitor the level of support provided to disabled customers. The Government have removed the proposed mid-year adjustment to the Industry Initiatives budget. This risked creating significant uncertainty and delivery risks. Lastly, the Government are keeping the overall debt write-off cap under Industry Initiatives at £6 million per year.

The warm home discount remains a source of critical support for many low-income households. The regulations extend this scheme, expand the support to more households and focus that support on those most in need. I therefore commend these regulations to the Committee.

[Baroness McIntosh of Pickering (Con)]

My Lords, I congratulate and thank my noble friend for presenting the regulations before us, which I warmly welcome. I set out my interest on the register, as president of National Energy Action, and raise some of its concerns about these regulations—or rather, what is not in the regulations—with my noble friend and ask for his positive response.

First, I point out that the regulations were drafted at a time when the scheme was very successful, prior to the Covid crisis. I will come on to that in a moment. My first concern is that the way of selecting core group 2, to which my noble friend referred, is potentially unfair. While National Energy Action supports the guiding principle that the Government should help the worst first, the proposed methodology creates a significant risk that some households that are currently eligible for support and live on the lowest incomes could miss out on rebates, if they are falsely estimated to have lower energy costs. The new core group 2 methodology also means that you cannot access a rebate without receiving a means-tested benefit. What happens to the 50% of fuel-poor households that do not currently receive such a benefit? Have the Government considered what will happen in those circumstances?

If a household is not selected as part of core group 2 but should have been, it seems very difficult to contest the decision. The customer journey is not particularly user-friendly. How does my noble friend expect to resolve issues arising from that circumstance? National Energy Action is not convinced that the funding available through Industry Initiatives is sufficient to meet the expected demand. The way that funding has been allocated for Industry Initiatives means there is significant uncertainty about the total available pot each year. The first year of the scheme could see a reduction in funding compared to 2021-22, which does not seem sensible given the energy crisis and is surely not what the Government envisage happening.

The department has still not made amendments to the scheme to ensure that, if and when there is a supplier failure, the supplier of last resort takes on the full obligation of the failed supplier. This means that there is a risk that some obligation can be lost through the process, so that the overall number of rebates is reduced and projects that have been committed to go through industry initiatives actually go unfunded. Then, there is the significant issue that I raised earlier: the scheme was designed for good times and against that background; it was not put together with an energy crisis in mind. Although it is too late to go back to the drawing board now on the warm home discount, could not the Government look at what additional protections are necessary? Given that the Treasury has agreed one-off payments this winter, and that the crisis will outlast that support, something extra might be necessary against that background.

National Energy Action would therefore like to propose a number of things that it believes the Government could do to overcome this. One is to investigate deeper price protection or a new social tariff, which I have raised with my noble friend before. This would make energy more affordable for a discrete and well-defined set of low-income energy customers. Such a tariff must be additional to existing schemes, mandatory for all suppliers, targeted at those most in need, reduce the costs of eligible households and use auto-enrolment. It might need primary or secondary legislation so that it could sit alongside the price cap.

Secondly, will the Government consider accelerating the repayment of utility debts across the UK? This would provide financial support for households that have a debt repayment plan with their energy supplier, with government matching every pound paid by the customer with £1 of Treasury funding. This would help every indebted household, but it would cost £500 million per year.

A further proposal is accelerating the improvement of energy efficiency through three possible methods, the first of which is prioritising parliamentary time for the passage of ECO4 legislation. The second is committing the remainder of the funding promised in the Conservative Party manifesto for upgrading fuel-poor homes. Apparently, the Government have committed only £1.1 billion of the promised £2.5 billion for the home upgrade grant scheme. Committing the remainder would help more than 100,000 households to save more than £750 a year on their energy bills. The third method is setting regulatory minimum energy efficiency standards for rented properties. This would help those in the private rented sector, which has some of the leakiest housing in the UK. Despite winter temperatures being as low as they are, we probably have some of the most poorly insulated housing in the whole of northern Europe.

Finally, I would like to raise the issue of the role of the regulator, which has probably not costed in, in general, the failures of existing energy companies over this past year. Will the department consider a number of measures, such as reducing the standing charge for pre-payment users by recovering SOLR costs on a volumetric basis, and better identifying and acting on the financial vulnerability of energy consumers? Will they ensure that the costs of failed suppliers are spread over a longer period, to reduce the immediate burden on consumers? Will they reduce the wider burden of energy debt on consumers by enforcing licence obligations? Finally, will they work to ensure that all prepayment users can receive a smart meter as a priority, and perhaps have a more general debate on what the role of the regulator in this market should be?

With those specific comments, which I hope my noble friend will look on favourably, I give a warm welcome to the regulations before us.

--- Later in debate ---

[Lord Callanan (Con)]

Yes, of course we will conduct a process of constant improvement. As more data become available, as universal credit is rolled out, and as EPCs are increasingly rolled out and more properties have one, it will make targeting easier. We will modify the scheme as we go forward, using new and improved targeting data.

I thank noble Lords for the useful points they made. I am pleased that virtually everyone who spoke was in broad agreement that the scheme should continue at this time because it has been very successful at providing householders on the lowest incomes with critical support.

[Baroness McIntosh of Pickering (Con)]

Before my noble friend takes his seat, there seems to be a discrepancy in the figures. My noble friend said that 69% of the fuel poor are in receipt of means testing, which means that 31% are not. The NEA said 50%. I would be interested to know, however many there are, how those who are not in receipt of the means-tested benefit under core group 2 will qualify. Is it the Government’s intention to commit all the funds that were highlighted in our manifesto at the last election?

[Lord Callanan (Con)]

My noble friend has asked me a number of difficult questions. Yes, we want to ensure that as much of the funding as possible is committed to this scheme, perhaps all of it will be. I am not sure what my noble friend is referring to by the funds we promised in our manifesto. Is she referring to energy efficiency? In that case, the majority have already been allocated.

On the targeting of those in fuel poverty, I default to the information that I have been given as opposed to the NEA figures, but if there is a mistake in those numbers, I will write to my noble friend.

Fuel Poverty

Debate between Lord Callanan and Baroness McIntosh of Pickering

Monday 13th June 2022 Lords Chamber

[Baroness McIntosh of Pickering (Con)]

My Lords, I beg leave to ask the Question standing in my name on the Order Paper, and I refer to my interest in the register as president of National Energy Action.

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

My Lords, in our latest official projection, there would be an estimated 3.03 million households in England in fuel poverty in 2022, according to the low-income, low-energy efficiency definition. The Sustainable Warmth strategy, published in February 2021, details our approach to tackling fuel poverty in England. Energy efficiency remains the best way to tackle fuel poverty in the long term, reducing the amount of energy required to heat a home and contributing to lower energy bills and of course, carbon emissions.

[Baroness McIntosh of Pickering (Con)]

I thank my noble friend for that Answer. The figure used by the NEA is 6.5 million households in fuel poverty. Of course, that figure would have been substantially higher had it not been for the generous measures given by the Government in late May of this year. Does my noble friend recognise that there is now another type of fuel poverty, and that is the fact that it is costing £100 to fill the tank of an average family car? In those circumstances, does he accept it is causing real hardship in rural areas, and particularly for carers travelling between their clients? Will the Government, as a matter of urgency, reduce the VAT of 20% on fuel and the 57% fuel duty and make sure that is passed on to the forecourts?

[Lord Callanan (Con)]

I totally understand the points that my noble friend is making, and the Chancellor has, of course, already reduced fuel duty. Domestic fuels, such as gas and electricity, are already subject to the reduced rate of 5% VAT. Going further, I would not guarantee that prices would fall, given that most of the price rises are driven by a number of factors that can be seen worldwide. The other problem is that cutting VAT would also be a tax cut for everyone, including wealthier people in society.

Construction Contracts (England) Exclusion Order 2022

Debate between Lord Callanan and Baroness McIntosh of Pickering

Monday 13th June 2022 Grand Committee

[Lord Callanan (Con)]

Yes—very good. There is a pipeline of potential projects that could adopt this model, and the Government believe that its use will deliver benefits to consumers. Through increasing competition in the delivery of strategic infrastructure, it will ensure that the cost of this infrastructure is market tested and therefore fair for water and sewerage customers. I apologise for the complicated nature of the explanation and I commend this instrument to the House.

[Baroness McIntosh of Pickering (Con)]

I am sure that we are all very grateful to my noble friend for presenting this document. I am sure that he will be aware of the vexed issue of sustainable drainage systems—SUDS—in relation to the provision of water and sewerage services. So I ask very specifically whether the implementation of SUDS will be affected and enhanced by the exclusion in this regulation.

Paragraph 7.3 of the Explanatory Memorandum says:

“The instrument is limited to a specific procurement model for high value infrastructure assets in the regulated water and sewerage sector ... There are two projects under active development and a further 18 strategic water resource schemes are being progressed ... across the next 2-3 price review periods”—


so we are looking at a period of 15 years. As we are told that the significance and the business impact of this is estimated at £54,000, how will this enhance the ability to introduce SUDS and other larger water infrastructure projects if it is such small beer? That is the only issue that I will raise; otherwise, obviously I approve this instrument.

Pollution Prevention and Control (Fees) (Miscellaneous Amendments) Regulations 2022

Debate between Lord Callanan and Baroness McIntosh of Pickering

Monday 23rd May 2022 Grand Committee

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

My Lords, the Pollution Prevention and Control (Fees) (Miscellaneous Amendments) Regulations 2022 were laid before the House on 25 April 2022. I will refer to these regulations as the fees regulations.

As the environmental regulator of the offshore oil and gas sector, which I shall refer to as the offshore hydrocarbons sector, BEIS’s Offshore Petroleum Regulator for Environment and Decommissioning, which I shall refer to as OPRED, recoups the cost of its regulatory functions from the offshore hydrocarbons sector rather than the taxpayer footing the bill. OPRED minimises the impact of the offshore hydrocarbons sector on the environment by, for example, controlling air emissions and discharges to sea and minimising disturbance over the life cycle of operations, from seismic surveys to post-decommissioning monitoring.

Regulatory activities for which OPRED can recover costs are covered in two ways: within a suite of regulations that are covered by the fees regulations, and by five fees schemes which are not, as they do not require legislative change and will be amended administratively. OPRED’s annual fees income is on average £6.2 million, which is recovered from around 120 companies, which are billed quarterly. OPRED recovers its costs via fees based on hourly rates.

The fees regulations will revise the hourly rates used to calculate fees payable by the offshore hydrocarbons sector. The fees relate to the provision of regulatory functions in relation to the environmental management of offshore operations. Currently, the fees that OPRED charges for providing regulatory services are based on hourly rates of £197 for environmental specialists and £108 for non-specialists. Environmental specialists are qualified technical staff who carry out the legislative functions of the Secretary of State, and non-specialists are administrative staff who support them.

The current hourly rates have been in force since June 2021. OPRED reviewed the cost base and concluded that the existing hourly rates need revising to reflect the present costs to OPRED of providing specific regulatory services. The fees regulations will therefore amend the charging provisions by increasing the existing hourly rate for environmental specialists to £201 and decreasing the current hourly rate for non-specialists to £104. As the changes relate to cost recovery, they do not represent monetary changes linked to inflation.

OPRED’s fees are determined by adding together the recorded number of hours worked by environmental specialists and non-specialists on cost-recoverable activities, multiplied by the hourly rates. The new hourly rates were approved by Her Majesty’s Treasury in March 2022 and were calculated in line with the Treasury’s Managing Public Money guidance. They cover the expenditure on all resources used by OPRED to support cost-recoverable activities—for example, staff salaries, accommodation, IT and office services, and corporate services such as human resources, senior management, legal, finance and learning and development.

Guidance on OPRED’s fee-charging regimes is published and clearly explains the scope of the cost-recoverable functions undertaken by OPRED and how the costs are to be calculated and recovered. The cost-recoverable functions undertaken by OPRED include, for example: the evaluation of applications and issuing of consents for seismic surveys, and the conducting of appropriate assessments of the likely significant environmental effects of proposed projects; assessing and approving operators’ oil pollution emergency plans; and compliance monitoring activities, including offshore environmental inspections.

The fees to be paid will be revised by a small amount, sufficient only to allow OPRED to recover its eligible costs. OPRED’s guidance on its fee-charging regime will be revised to reflect the new hourly rates. Those who OPRED charge are aware that the hourly rates are reviewed annually. Although there was no statutory requirement to consult on the fees regulations, in April 2022 OPRED informed the offshore hydrocarbons sector of the planned revisions to the hourly rates, and no representations were received.

Therefore, I conclude by emphasising the importance of the revisions to the hourly rates being introduced by the fees regulations. The revisions will enable OPRED to recover the costs of providing regulatory services from those who benefit from them, instead of these costs being passed on to the taxpayer. The fees regulations will be debated by the House of Commons tomorrow, 24 May. I therefore commend the draft fees regulations to the House.

[Baroness McIntosh of Pickering (Con)]

My Lords, I congratulate my noble friend on bringing forward these regulations, which seem perfectly reasonable. I thank the environmental specialists and non-specialists for the crucial work they do in this sector.

I have just one small question to ask my noble friend, if I may. If you look at the same regulations from last year, we seem to be reversing the rate that was agreed for the non-specialist workforce. I think the rate was increased from £101 to £108 last year, so I would like to understand why the Government have decided to cut that back to £104.

My noble friend has just told us that there were no responses to the consultation, so one has to accept that no alarm was expressed by the non-specialist sector. For my greater understanding, can he explain what proportion of the workforce are environmental specialists, as opposed to non-specialists? Paragraph 7.3 of the Explanatory Memorandum states that

“the total amount to be recovered by OPRED in FY 2022/2023 will be broadly similar to the average received in previous years”.

On what assumption is that based? Is the increase in environmental specialists being covered by the reduction in the non-specialist sector in order to keep it within that envelope?

With those few remarks, I welcome the regulations before us.

Contracts for Difference (Miscellaneous Amendments) Regulations 2022

Debate between Lord Callanan and Baroness McIntosh of Pickering

Tuesday 17th May 2022 Grand Committee

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

My Lords, these regulations were laid before the House on 31 March 2022.

The recent British Energy Security Strategy spoke of ensuring a new lease of life for the North Sea in low-carbon technologies such as carbon capture. The Net Zero Strategy set out the Government’s ambition to have a carbon capture and storage sector with an operational capability of capturing 20 megatonnes to 30 megatonnes of carbon dioxide per year by 2030. In its Sixth Carbon Budget, the Climate Change Committee re-emphasises the crucial role that carbon capture and storage—CCS—will play in reducing emissions from industrial processes, combustion, electricity generation and hydrogen production. The energy White Paper 2020, set out the Government’s view of how to achieve a low-cost, low-carbon electricity system.

While we cannot predict today exactly what the generating mix will look like in 2050, we can be confident that renewables will play a key role. However, in order to decarbonise while maintaining security of supply and keeping costs low, we will need to balance renewable variability against demand. To do this, we will need system flexibility, energy storage, and non-weather dependent low-carbon generation. We consider that thermal power with carbon capture and storage is one technology that can provide this at scale. In the subsequent Net Zero Strategy, the Government committed to using consumer subsidies to support construction of at least one power CCS plant to be operational by the mid-2020s.

In the round, these strategies illustrate the critical importance of carbon capture and storage technologies. To enable this, we have developed the dispatchable power agreement. This is a carbon capture and storage subsidy for gas-fired projects connected to a full carbon capture and storage system that are intended to provide low-carbon flexible power generation. The dispatchable power agreement contract is a bespoke contract based on the standard terms of the contracts for difference used in the allocation rounds; it has been amended in consideration of specific amendments to ensure suitability for power carbon capture and storage. The dispatchable power agreement will be a key tool used to encourage low-carbon electricity generation by bringing forward investment in power carbon capture and storage plants and to incentivise such facilities to operate in a manner which benefits the UK energy market. It is commonly referred to as a business model and is intended to implement this commitment.

The regulations were laid before the House on 31 March. The amendments in this instrument are needed to ensure that existing regulations under the Energy Act 2013 can be used to award dispatchable power agreements. These regulations are used to award contracts for difference currently. The proposed amendments are not intended to impact the standard contract for difference for the current allocation round or future allocation processes of the standard contract for difference.

This statutory instrument introduces three changes to the existing regulations, which are: the Contracts for Difference (Allocation) Regulations 2014, which we shall refer to, for the purposes of ease, as the “allocation regulations”; and the Contracts for Difference (Definition of Eligible Generator) Regulations 2014, which we shall refer to, for the purposes of ease, as the “eligible generator regulations”.

This statutory instrument, first, amends the eligible generator regulations, specifically the definition of an eligible generator. Currently, generating stations connected to a complete carbon capture storage system are eligible generators. The change allows for retrofitted carbon capture storage projects to constitute an eligible generator. It does this by widening the criteria for carrying out a generating activity to include altering an existing generating station into a generating station connected to a complete carbon capture storage system. By making this change, retrofitted power carbon capture storage plants can be eligible for the dispatchable power agreement.

This statutory instrument, secondly, amends the allocation regulations. Currently, the allocation regulations include a specific reference to contracts granted pursuant to Section 10 of the Energy Act 2013. The regulations refer to such contracts and suggest that they will include a “strike price” and “reference price” within their payment mechanism. The amendment retains the references to a strike price and a reference price, but by amending the language to state that a strike price and reference price “may be included”. An alternative payment mechanism which does not use these terms could also be used. This ensures that contracts which do not specify a strike price and a reference price can therefore be contemplated. This means there will not be a requirement for these specific terms to be used in a dispatchable power agreement and the alternative payment mechanism can be used, which will allow for the alternative payment mechanism under the dispatchable power agreement. Further details of this payment mechanism have been set out in the recent dispatchable power agreement publication.

The third change that this statutory instrument makes is to amend the eligible generator regulations. Currently, an eligible generator is defined as connected to a “complete CCS system”, which means

“a system of plant and facilities for … (a) capturing some or all of the carbon dioxide (or any substance consisting primarily of carbon dioxide) that is produced by, or in connection with, the generation of electricity by a generating station; … (b) transporting the carbon dioxide (or substance) captured; and … (c) disposing of it by way of permanent storage”.

The amendment proposes to add into sub-paragraph (b), after “transporting”, the words

“including by way of non-pipeline transport methods”,

to contemplate potential alternative transport methods. The consultation responses noted that it would be helpful to clarify that transport could be carried out by way of non-pipeline method. The proposed amendments in this statutory instrument intend to facilitate non-pipeline transport generally in the regulations, as has been set out. The proposed changes to the eligible generator regulations aim to be neutral regarding the different possible configurations of non-pipeline transport and will not exclude any particular form of non-pipeline transport.

In accordance with the Energy Act 2013, a consultation was carried out from July to September 2021, and the response was provided by the Government in March of this year on GOV.UK. We received 16 responses to the consultation from businesses and organisations, some directly involved in power CCS, and from trade associations, non-governmental organisations and other interested parties. The responses were largely positive in favour of the proposed changes but respondents requested some clarifications, which we have responded to in the published government response. These proposals will enable the award of the dispatchable power agreement, but they do not create any new commitment to offer support.

In conclusion, the measures introduced by the SI are aligned with the Government’s carbon budget and net-zero targets and help to enable power carbon capture and storage projects. I commend these regulations to the Committee, and I beg to move.

[Baroness McIntosh of Pickering (Con)]

My Lords, I thank my noble friend and congratulate him on presenting the regulations to us this afternoon. He will be aware that there were great hopes, particularly off the Yorkshire and Humber coast, that facilities had been identified which would be appropriate for exactly the type of venture that is set out in the regulations before us today. So I welcome the regulations, but is my noble friend able to confirm that he believes that the take-up on the proposals for carbon capture and storage will increase and multiply because of the content of the regulations before us this afternoon?

Separately—he might think I am going off-piste here, and I probably am—can my noble friend explain something? If I understood it correctly, one of the difficulties we have with wholesale gas prices impacting the UK as they have—though perhaps not as badly as in other European countries, which rely heavily on Russia—is that we have gas storage of only 60 days, which is about two months. That strikes me as being terribly low. I do not suppose that that would benefit from these proposals, but I would like to understand why, historically, we seem to have a lower storage capacity than other European countries. Is that something that the Government might be minded to look at that?

The only other point I wish to make, which I am sure my noble friend is very familiar with, is the point raised in the 37th report of the Secondary Legislation Scrutiny Committee, which I find myself in some sympathy with. Even though I am a lawyer by training and spent about nine months of my training going through all the scientific evidence—produced mostly by scientists rather than lawyers—on whether fluoride was a carcinogen, I find that even these small regulations before us this afternoon are full of jargon. There is a request in paragraphs 22 and 23 of the 37th report that the Explanatory Memorandum perhaps be revised to enable us humble Members of the House to understand better its contents. Can my noble friend simply confirm that that is the case? If that could happen in advance next time so that, when we see the Explanatory Memorandum we are better able to follow it, it would be very welcome indeed.

I thank my noble friend and his department for all they are doing at this particularly difficult time, and I give a warm welcome to the regulations this afternoon.

European Research Council

Debate between Lord Callanan and Baroness McIntosh of Pickering

Wednesday 27th April 2022 Lords Chamber

[Baroness McIntosh of Pickering (Con)]

My Lords, I thank my noble friend for making good the shortfall if we are not remaining part of the Horizon programme. But does he accept that universities have benefited from match funding from other universities in other member states and that that is going to be lost? Do the Government intend to replace that with other establishments from outside the European Union?

[Lord Callanan (Con)]

I am afraid I do not understand the point my noble friend is making; there is no shortfall as such. The UK pays its fair share for our participation in Horizon and has always done so, and a similar amount of money will be made available in the future if association proves impossible.

Energy Security Strategy

Debate between Lord Callanan and Baroness McIntosh of Pickering

Wednesday 27th April 2022 Lords Chamber

[Lord Callanan (Con)]

I know that the noble Baroness is a passionate supporter of onshore wind. She brought her Bill on it recently and we debated the subject at great length. I know she will continue to probe and push me, as is correct, on this subject about which she feels so strongly. The Government are clear: we want to see an expansion of onshore wind and we would like to see the communities that host this new Bill’s infrastructure benefit from developments in their areas. We hope that will drive greater levels of community consent, which will allow more of the procedures to come forward. I will write to the noble Baroness with details of repowering existing onshore wind infrastructure.

[Baroness McIntosh of Pickering (Con)]

Will my noble friend look closely at the possibilities for energy from waste and distance warming that are tried and tested and work so successfully, not just in this country but across most of Europe? Will he also ensure that many of these projects could be fed into the local grid rather than into the national grid, as happens currently?

[Lord Callanan (Con)]

Energy from waste is an important topic, both in generating electricity but also for heat networks. I have visited a number of very innovative energy from waste plants; there is one in particular in east London that is extremely successful and powers and heats thousands of local homes in the community. By the very nature of a heat network, under an energy from waste plant, it does of course benefit and help the local community.

COP 26

Debate between Lord Callanan and Baroness McIntosh of Pickering

Monday 28th March 2022 Lords Chamber

[Lord Callanan (Con)]

I agree with the noble Baroness; it is important that we get a green taxonomy right, and the products and services that will form part of it. We are working hard towards getting it finalised in the UK. I cannot give her a precise timescale at the moment, but we are determined to be a world leader in green finance.

[Baroness McIntosh of Pickering (Con)]

My Lords, can my noble friend tell us how much of the palm oil we import comes from the process of deforestation in countries such as Brazil? Should we not be aiming to reduce the amount of palm oil we import from these sources?

[Lord Callanan (Con)]

Deforestation is clearly a problem. I suspect most of the palm oil we import does not come from Brazil. It is more likely to be from Malaysia or Indonesia, as I think they are our largest sources. Obviously, it needs to be sustainable. Palm oil can be a very useful product—it can form foodstuffs and be part of a whole range of consumer goods, but we must make sure it comes from sustainable sources.

Lithium Ion Batteries: Fire Safety Standards

Debate between Lord Callanan and Baroness McIntosh of Pickering

Thursday 3rd March 2022 Lords Chamber

[Lord Callanan (Con)]

The noble Lord highlights an important point. I am devastated that our EN numbers do not match, but I would be happy to compare them afterwards if the noble Lord wishes. It is vital that we carry out checks on illegally imported products; the fire that he referred to was caused by something not in conformity with UK standards. We carry out checks on a risk-based approach where required.

[Baroness McIntosh of Pickering (Con)]

My Lords, does the Minister not agree that if these e-scooters are privately owned, they are illegal, so they should not be taken on to the train in the first place?

[Lord Callanan (Con)]

No, I do not. If they are privately owned, there is a prohibition on riding them on public highways, but there is nothing wrong with taking them on trains if permitted by the train operators.

Drax Wood Pellets

Debate between Lord Callanan and Baroness McIntosh of Pickering

Monday 13th December 2021 Lords Chamber

[Lord Callanan (Con)]

I am afraid that I and the noble Baroness will have to disagree on this. Biodiversity is one of the criteria we take into account. We have sent officials out to southern USA, where most of this biomass comes from. This is residue, by-product from the forestry process, so it is not unsustainable. I think the noble Baroness is wrong.

[Baroness McIntosh of Pickering (Con)]

Would it not be more sustainable if my noble friend could source all the wood from fast-growing wood coppice or miscanthus from farmers in North Yorkshire and across Yorkshire? It is closer to Drax and would reduce the carbon footprint, as well as helping local farmers with their growing capacity.

[Lord Callanan (Con)]

Indeed it would, and we already source some small quantities from the UK, but the noble Baroness needs to look at the size of the forests in southern USA, which are, I think I am right in saying, about the size of the landmass of western Europe. Great and sustainable though North Yorkshire wood is, I suspect we would struggle to meet the quantity required.

Football: Casey Review

Debate between Lord Callanan and Baroness McIntosh of Pickering

Monday 6th December 2021 Lords Chamber

[Baroness McIntosh of Pickering (Con)]

My Lords, if that is the case, what reassurance can my noble friend give the House this afternoon that families who take their young children to what should be a joyful sporting event will be safe and will not be exposed to the same dangers as happened on that day?

[Lord Callanan (Con)]

My noble friend makes an important point. It was families with young children, or people who were there with friends or family with disabilities, who were targeted by some of the people trying to get into the stadium. The noble Baroness’s report looked into some of those instances and came forward with recommendations on how to ensure that minorities intent on doing harm do not mar such important days for others.

Homes: Environmental Standards

Debate between Lord Callanan and Baroness McIntosh of Pickering

Thursday 2nd December 2021 Lords Chamber

[Lord Callanan (Con)]

The right reverend Prelate is right to draw attention to some of the export guarantee schemes that we already have. I also draw his attention to the boiler upgrade scheme, which we will be introducing from April next year. That is £450 million of straight, upfront grants for people to install heat pumps.

[Baroness McIntosh of Pickering (Con)]

I remind my noble friend that I am president of National Energy Action. Does he agree that much can be achieved through building regulations to make houses more energy efficient and more resilient to flooding? Does he share my disappointment that the review for sustainable drainage systems will not be concluded till autumn next year? Will he use his good offices to ensure that the regulations are brought forward by the middle of next year at the very latest?

[Lord Callanan (Con)]

I thank my noble friend for her question. She is right that building regulations have an important role to play. From 2025, the future homes standard will ensure that new homes produce at least 75% lower CO₂ emissions compared to those built to current standards.

Power Outages: North of England

Debate between Lord Callanan and Baroness McIntosh of Pickering

Thursday 2nd December 2021 Lords Chamber

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

In the face of damage to infrastructure unprecedented in recent years, network engineering staff have been working tirelessly in challenging conditions to make repairs and restore power as quickly as possible. As of this morning, fewer than 20,000 people remain without power, and more than 950,000 have had their electricity restored. The Secretary of State has commissioned his officials to conduct a post-incident review to learn lessons and improve system resilience and customer support.

[Baroness McIntosh of Pickering (Con)]

I am grateful to my noble friend for his Answer. He will be aware that there was simply no way to report a power cut or to receive information as to how the planned power cut might be expected to be terminated. There was no mobile signal and, obviously, there was no access because there was no power to the internet, which are the two main means by which customers are asked to report a power outage. Will my noble friend ensure that the military engineers are sent in to support Northern Powergrid and others responsible for the remaining thousands of customers who are without power, and ensure that a rumour going around that some will be without power until the new year is absolutely untrue? In the long term, will my noble friend ensure that we reduce reliance on overhead power lines and the overhead transmission of power, and seek to put these giant electricity wires underground, as is the case in other parts of the country?

[Lord Callanan (Con)]

Of course, there are many lessons to be learned from the past week. It has been extremely challenging in the north of the country. I am from there myself and well aware of the issues: many people have contacted me about it. I just say to the noble Baroness that more than 4,000 engineers have been working to repair the damage, 750 generators have been deployed to provide emergency power and vulnerable customers have been prioritised for support. There are clearly issues about being able to contact Northern Powergrid, in particular; it was overwhelmed by the volume of calls. These were exceptionally strong winds of more than 100 miles per hour, and it is the most damage that has been done to the system for 15 years.

Shortages: Protection for the Vulnerable

Debate between Lord Callanan and Baroness McIntosh of Pickering

Wednesday 20th October 2021 Lords Chamber

[Lord Callanan (Con)]

I think we have a difference of opinion here. As I said to the noble Baroness, Lady Janke, the universal credit uplift was only ever meant to be temporary. The opposition parties do not accept that, but that was the case. We recognise that some people continue to need extra support, which is why we introduced the £500 million household support fund.

[Baroness McIntosh of Pickering (Con)]

I refer to my position as president of National Energy Action. Does my noble friend share my concern that there are currently 4 million people in fuel poverty? Will he use his good offices to ensure that everyone has a warm home this Christmas?

[Lord Callanan (Con)]

Of course, we are constantly looking at the various schemes we have. We announced £850 million for the home upgrade grant yesterday, which will go precisely to those my noble friend is concerned about—the fuel-poor living in rural areas.

Energy Prices: Electricity Bills

Debate between Lord Callanan and Baroness McIntosh of Pickering

Wednesday 13th October 2021 Lords Chamber

[Baroness McIntosh of Pickering (Con)]

I beg leave to ask the Question standing in my name on the Order Paper and declare my interest as president of National Energy Action.

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

My Lords, the largest element of gas and electricity bills, which is wholesale costs, has increased significantly. The Government are committed to protecting customers, especially the most vulnerable. Households will continue to be protected throughout the winter by the price cap and through the warm Home discount and the winter fuel payment and cold weather payment schemes. A new £500 million household support fund has also been made available to councils to help the most in need over the winter.

[Baroness McIntosh of Pickering (Con)]

Given the record rise in wholesale gas prices and the fact that many fuels such as heating oil, coal and LPG, on which many rural dwellers depend, are not covered by the price cap, will the Government immediately lift the green levies on household bills, which account for 25% of the total, but ensure that energy companies pay for the green infrastructure from which they will ultimately profit, while targeting all available financial resources on those on the lowest incomes with the least efficient homes, to ensure that a further 1.5 million are not forced into fuel poverty?

[Lord Callanan (Con)]

Heating oil and LPG are of course not covered by any of the levies that my noble friend refers to—that is, they are separately controlled. There is a free market in them and they have not gone up nearly as much as gas prices. But as with every other utility, the energy companies pass through the cost of investment in the sector’s networks to end consumers, as well as the cost of additional energy infrastructure investment and environmental and social policies.

Climate Change

Debate between Lord Callanan and Baroness McIntosh of Pickering

Tuesday 7th September 2021 Lords Chamber

[Lord Callanan (Con)]

The right reverend Prelate makes some good points, and of course tackling climate change must be a shared endeavour. Our ambition puts affordability and fairness at the heart of our efforts, and that goes hand in hand with supporting economic growth and prosperity. We support a number of campaigns to do exactly that, such as the Simple Energy Advice campaign and Together for Our Planet.

[Baroness McIntosh of Pickering (Con)]

I congratulate the intergovernmental panel on a serious and thorough piece of work and the action that our own Government are taking. How confident is my noble friend that countries, such as India and China, that are not yet doing enough will actually step up to the plate on the basis of the scientific evidence before us today?

[Lord Callanan (Con)]

That is the £6 billion CO₂ question, in that we will have to wait and see. A tremendous amount of diplomacy is going on. My right honourable friend Alok Sharma, the COP president, is obviously engaging extensively, and we hope that they will publish realistic NDCs before COP.

Post Brexit: Small Service Businesses

Debate between Lord Callanan and Baroness McIntosh of Pickering

Monday 24th May 2021 Lords Chamber

[Lord Callanan (Con)]

I understand the noble Lord’s concerns but we have reached a balanced deal with the EU similar to the EU’s agreements with Canada and Japan, and the TCA is the basis of our agreement, so I am sorry to tell him that this will not be renegotiated.

[Baroness McIntosh of Pickering (Con)]

I declare an interest as I practised European law in Brussels. Can the Minister explain the situation regarding the freedom to provide services, in particular family law, under the EU-UK Trade and Cooperation Agreement? I understand that this is not covered. What would the situation be if a solicitor or an advocate in this country wanted to represent a member of the family living in the European Union? How would the agreement apply to that? Also, can the Minister and his department urgently address the availability of insurance for small firms and solicitors post Brexit and post Covid?

[Lord Callanan (Con)]

As my noble friend is aware, legal services are subject to separate international agreements. The details of how that will apply across member states are complicated, so it is best for me to write to her.

Offshore Gas Rigs

Debate between Lord Callanan and Baroness McIntosh of Pickering

Thursday 11th March 2021 Lords Chamber

[Baroness McIntosh of Pickering (Con) [V]]

While I welcome that a target has been set, can my noble friend reassure us that the essential flaring and venting for operational and safety reasons will be allowed to continue? How can this be accommodated within a net-zero approach?

[Lord Callanan (Con)]

I have set out that, where it continues for operational reasons, we want to reduce it as much as possible, and we are committed to the World Bank initiative to eliminate it completely by 2030.

National Security and Investment Bill

Debate between Lord Callanan and Baroness McIntosh of Pickering

Committee stage & Lords Hansard
Tuesday 2nd March 2021 Grand Committee

[Lord Callanan (Con)]

I thank everybody who has spoken in this debate and thank my noble friend Lady McIntosh of Pickering for tabling the amendment. It seeks to clarify that certain factors, namely employment effects, reciprocal investment or trading opportunities and the desire to protect UK businesses from international competition, cannot be taken into account in assessing whether a trigger event would give rise to national security risks. I was surprised to see that the noble Baroness, Lady Bennett, and my noble friend Lady McIntosh are now differing on some things. That is most unusual; it is something to be encouraged for the future.

My noble friend articulates a reasonable concern here: that a regime used to screen investment for national security purposes could be used to screen investments more widely. Indeed, the shadow Secretary of State, in his opening speech at Second Reading in the other place, argued that the Bill should include an industrial strategy test—I was therefore surprised to see the noble Baroness, Lady Hayter, supporting this amendment.

As such, I have some sympathy with the aims of this amendment. I can, however, reassure my noble friend that the Bill is about protecting national security, nothing more and nothing less. The Bill does not set out the circumstances in which national security is, or may be, considered at risk. As I said on previous groups, this reflects long-standing government policy to ensure that national security powers are sufficiently flexible to protect the nation. The Bill also does not include factors which the Secretary of State must or may take into account when assessing national security risks. Instead, factors that the Secretary of State expects to take into account in exercising the call-in power are proposed to be set out in the statement that we have provided a draft of and is provided for by Clause 3.

The draft statement, published upon introduction of the Bill, includes details of what the Secretary of State is likely to be interested in when it comes to national security risks. This includes certain sectors of the economy, and the types of acquisitions that may raise concern. It does not currently state anything which the Secretary of State intends not to take into account with regard to national security. This is a conscious choice. If the Secretary of State were to start listing areas of the economy or types of acquisition that he considered unlikely to present national security concerns, I suspect that this would result in a long and dense document of little use. We judge that it is therefore more helpful for businesses and investors to set out where the Secretary of State is more, rather than less, likely to use the call-in power.

I understand, however, the concern that without a definition extraneous factors may be taken into account. My reassurance for my noble friend comes from the courts. Were the Secretary of State to seek to use the powers in the Bill for a purpose beyond national security, his decisions could be challenged in the courts through judicial review and could not be successfully upheld. It is with this judicial oversight in mind that the Secretary of State is constrained in delivering the purpose of the Bill. I am therefore confident that the Bill as currently drafted contains sufficient safeguards against inappropriate use of the regime, and that the Government are already providing a good amount of information for parties affected by the regime on its likely areas of focus.

I hope that my explanation, taken together with these points, provides sufficient reassurance to my noble friend, and that she therefore feels able to withdraw her amendment.

[Baroness McIntosh of Pickering (Con)]

My Lords, I am most grateful to all those who have spoken in the debate, particularly my noble friend Lord Hodgson, and the noble Lord, Lord, Clement-Jones, for their eloquent support.

Like the Minister, I am slightly baffled by the sudden lack of support from the noble Baroness, Lady Bennett, with whom I have enjoyed a deeply cordial relationship. I obviously take issue with a number of issues to which she referred, not least setting out the importance to the economy of foreign investment, which is well established and repeated in the national security and investment government response published, I understand, this week. I also take issue with the fact that I am not a great expert on the financial crash, although I seemed to lose an awful lot of the small amount of money I had invested in the stock market. What is the saying about how to make a small fortune in the stock market? I have forgotten, but, anyway, that burnt my fingers.

I believe that the start of the financial crash was actually in the US, with the selling of mortgages, both in the US and here, for a greater value than the value of the property, and a lot of grief was caused as a result. I am pleased that my noble friend Lord Callanan feels that the Bill is still perfectly formed and fit for purpose, but I beg to differ. My noble friend referred to the statement in Clause 3, but we are told that the Secretary of State only “may” publish such a statement. Clearly, it would be immensely helpful to have such a statement at this stage, if possible, to give an indication of the direction of travel.

Domestic Energy Efficiency: Retrofitting

Debate between Lord Callanan and Baroness McIntosh of Pickering

Monday 1st March 2021 Lords Chamber

[Lord Callanan (Con)]

The noble Lord makes a very good point. I have received a number of representations from rural landlords and others on these matters. We recognise that improving older rural properties may be more challenging. That is why we have provided an incentive for off-gas homes to be insulated under the current eco-system and will focus the future home upgrade grant on poorer performing homes. The noble Lord will also be aware that we produced a range of exemptions under our minimum standards regulations for homes that are too expensive or too difficult to improve.

[Baroness McIntosh of Pickering (Con)]

My Lords, I remind the House of my interest as president of National Energy Action. Will my noble friend work closely with bodies such as NEA to ensure that the least-efficient homes will obtain the highest amount of warm home grants and other grants that are available through the government schemes?

[Lord Callanan (Con)]

We work with a wide range of organisations. My noble friend is right to point out that it is important that we target the poorest-performing homes for the first and most urgent action. We will certainly do that as far as possible under many of the current schemes.

Covid-19: Night-time Economy

Debate between Lord Callanan and Baroness McIntosh of Pickering

Tuesday 26th January 2021 Lords Chamber

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

The night-time economy includes businesses operating between 6 pm and 6 am and is therefore very broad. BEIS and DCMS sponsor the hospitality, entertainment, arts and culture sectors, all of which play a significant role in the night-time economy. Over the course of the pandemic, the Government have worked closely with businesses from across these sectors to understand their concerns, and have responded with £280 billion of funding to support businesses, retain jobs and provide support on backdated rents.

[Baroness McIntosh of Pickering (Con)]

I thank my noble friend for his Answer and for the support that the sector has received. I am delighted that he recognises the contribution that the night-time economy makes, in billions of pounds of revenue—in its heyday—and in accounting for 8% of the national workforce, with a high proportion of young people employed. Will he work closely with the Treasury to ensure that, going forward, specific support can be targeted on the fixed costs of those working in the night-time economy, such as rent, insurance, electricity and water, which amount to 15% of their turnover? To date, little targeted help in that regard has been given; this would be very warmly received and would ensure a return to a sustainable and vibrant future as soon as businesses are allowed to reopen.

[Lord Callanan (Con)]

My noble friend makes some important points. We will of course work closely with the Treasury, as always. The support package that the Government have put in place is designed to help businesses with their fixed costs. It includes the business rates holiday, the job retention scheme and various grants, and introduces a moratorium on the eviction of commercial tenants. The Government keep all these support measures under constant review.

Green Economic Recovery

Debate between Lord Callanan and Baroness McIntosh of Pickering

Monday 14th December 2020 Lords Chamber

[Lord Callanan (Con)]

I thank the noble Lord for trying to tempt me down the road of reforming the tax system, but I will happily leave that for the Chancellor to announce.

[Baroness McIntosh of Pickering (Con)]

Will my noble friend join me in congratulating farmers on both responding to the Covid epidemic and delivering a green environmental economic recovery? What could be greener than buying locally produced meat, dairy products and cheese this Christmas? Will my noble friend join me in doing so?

[Lord Callanan (Con)]

I thank the noble Baroness for her question. She is quite right, of course: the farming community has had a very difficult year, as have many other industries. Where possible, we should all buy local freshly produced produce.

Carbon-neutral Homes

Debate between Lord Callanan and Baroness McIntosh of Pickering

Thursday 10th December 2020 Lords Chamber

[Lord Callanan (Con)]

The noble Lord makes some interesting points. I think we are all aware of the limitations of working from home, but companies should be as open and transparent as possible in their reports about the energy and emissions that they are responsible for. This includes employees who work from home.

[Baroness McIntosh of Pickering (Con) [V]]

My Lords, will my noble friend join me in congratulating National Energy Action on all it does on home insulation and warm homes? I have the honour to be the honorary president of National Energy Action. Is it fair that new homes are still being built using gas boilers, which will eventually be banned, given that there will be an enormous cost for the occupiers of those homes in retrofitting new boilers at some future date?

[Lord Callanan (Con)]

We are consulting on these matters at the moment. The noble Baroness makes a very good point and I happily pay tribute to the work that National Energy Action does.

United Kingdom Internal Market Bill

Debate between Lord Callanan and Baroness McIntosh of Pickering

Report stage & Report: 2nd sitting (Hansard) & Report: 2nd sitting (Hansard): House of Lords
Monday 23rd November 2020 Lords Chamber

[Lord Callanan (Con)]

I of course thank the noble Lord for his help in answering the question more thoroughly than I did, and I can confirm my understanding that he is correct in what he says.

[Baroness McIntosh of Pickering (Con)]

My Lords, I am overwhelmed that my noble friend the Minister has accepted Amendment 14. Perhaps I may press him a little more on Amendment 16. If I understood him correctly, he said that it should be for all of the devolved Administrations to publish their responses to a consultation. I would beg to differ. It would be much better for all concerned, including myself, to find in one location on a national Westminster-based government website all the responses that have been published.

He did not comment—I would be grateful if he would—on why he would feel unable to give reasons for any decisions reached. I am grateful to the noble Lord, Lord Foulkes, who has also signed Amendment 16. Is there any problem the Government would have in giving reasons for any decisions if they were not prepared to accept the responses to the consultations from the devolved Administrations?

[Lord Callanan (Con)]

I will write to the noble Baroness with further information on that point.

United Kingdom Internal Market Bill

Debate between Lord Callanan and Baroness McIntosh of Pickering

Committee stage & Committee: 4th sitting (Hansard) & Committee: 4th sitting (Hansard): House of Lords
Wednesday 4th November 2020 Lords Chamber

[Lord Callanan (Con)]

On my noble friend’s first question, she will notice that Clause 38(8) states:

“A notice under subsection (2) or (3) may not require a person … to produce or provide any document or information which the person could not be compelled to produce, or give in evidence, in civil proceedings before the court”.


I hope that that resolves the matter. I will write to her on her second point.

[Baroness McIntosh of Pickering (Con)]

I thank everyone who has contributed, including my noble friend the Minister in summing up the debate. We had an excellent discussion on the issues, and I am grateful to the noble Baroness, Lady Bowles, for raising them because they are pertinent. I am slightly confused as to why it is necessary to include in the Bill powers that already exist. We are told that they are not new, yet my noble friend will not agree to include in the Bill a matter that is already causing alarm.

I am grateful to the noble Baroness, Lady Ritchie, for alerting me to the Constitution Committee report in that regard. It has highlighted its concern and received a verbal undertaking from the Lord Chancellor. I should repeat that we are referring to the Law Society of Scotland, not the Scottish Law Commission. If both the committee of this House and the Law Society of Scotland are concerned, that verbal reassurance is not enough. I may well reflect on the matter and come back on Report. However, for the moment, I am grateful for having had the opportunity to debate this matter and I beg leave to withdraw the amendment.

United Kingdom Internal Market Bill

Debate between Lord Callanan and Baroness McIntosh of Pickering

Committee stage & Committee: 2nd sitting (Hansard) & Committee: 2nd sitting (Hansard): House of Lords
Wednesday 28th October 2020 Lords Chamber

[Baroness McIntosh of Pickering (Con) [V]]

My Lords, I am struggling to understand the Minister’s reply on Amendments 26 and 45. I am particularly concerned about Amendment 26, which is a probing amendment and simply asks for greater clarity, which I do not think we have had. Is he saying that the statutory requirement has no effect? Does he mean that it is valid or not? Is it enforceable? I am trying to avoid a situation where there is any doubt whatever, and court action might be taken. I do not quite understand his answer that the possibility of court action is excluded if, in the view of others, a statutory requirement has effect and could, therefore, be actionable.

[Lord Callanan (Con)]

No, it does not mean that the requirement is to be treated as though it never had any legal effect. Rather, it allows the continued operation of the requirement, except to the extent that it has discriminatory effect.

--- Later in debate ---

[Lord Callanan (Con)]

I apologise in advance if noble Lords are in for more technical explanations. We will take together the minor technical amendments in my name to Clauses 3 and 4. All involve drafting improvements or clarifying technicalities. None of these amendments results in a change of policy, but they need full and proper scrutiny in this Chamber and noble Lords deserve an explanation of the improvements that they make to the Bill.

First, I turn to Amendment 9. This clarifies Clause 3 by identifying what is a relevant requirement in relation to a specific case where particular goods are sold. Without this amendment, there could be ambiguity as to whether a requirement needs to apply to all sales of all goods to be a relevant requirement. For example, where a business has produced a tin of biscuits in Scotland and seeks to rely on the mutual recognition principle to sell them in England, this amendment makes it clear that the relevant requirements are those that would apply to the sale of the biscuits in England and to the equivalent, hypothetical sale of the biscuits in Scotland, Northern Ireland or Wales. Requirements that apply to other sales of other goods—for example, requirements that apply to the auctioning of a painting—would not be relevant requirements in this context. Without this amendment, there is a risk of legal uncertainty over which requirements are relevant. This could create confusion, costs and inconvenience for businesses.

Amendment 10 provides similar clarification. It emphasises that subsection (2), which defines and therefore enables one to identify a relevant requirement in relation to a particular sale, makes relevant requirements only in relation that sale. Requirements are not relevant in any general way; they are relevant only in relation to the sale in question.

Amendment 18 clarifies that Clause 4(1)(a) refers to a specific sale of goods, rather than a hypothetical sale of goods. It makes clear that we are referring to an actual sale of goods and not to a hypothetical sale. As a result, the amendment removes any potential ambiguity around which existing statutory requirements are excluded from the mutual recognition principle. This amendment also ensures consistency with Clause 3(1), as proposed to be amended by Amendment 9—also in my name. Once again, we are considering requirements which apply specifically to a particular sale—for example, the requirements that would apply to the sale of a tin of biscuits in England, as per my previous example, but not all requirements that might apply to any other sales of goods. This makes clear which statutory requirements might be excluded, if the conditions in Clause 4(2) are met.

Amendment 19 corrects a small drafting error in Clause 4(1)(a). This paragraph refers to “a” part of the United Kingdom when it should refer to “the” part of the UK mentioned in the opening words of the subsection. It removes any ambiguity around which part of the United Kingdom is being referred to in Clause 4(1)(a), so that there can be no doubt that when we are considering English requirements, we are considering how they apply in relation to a sale in England. Without this amendment, there could be confusion over whether we are referring to just those requirements which apply in England or to requirements which could apply in any part of the UK.

Finally in this group, Amendment 23 aligns the language used in Clause 4(2) and 4(5). Both provisions refer to a hypothetical sale on a particular day, rather than to an actual sale. These subsections set out the conditions for when an existing requirement will be excluded from mutual recognition. Both should refer to a hypothetical sale on the relevant day. This amendment clears up the ambiguity by making it clear that both subsections refer to a hypothetical sale, rather than to an actual sale. Aligning the language in this way will make the drafting of this clause clearer and will avoid any confusion over why the wording is different in Clause 4(2) and 4(5) when both should refer to a hypothetical and not to an actual sale.

Taking again the example of the sale of a tin of biscuits, Clause 4(2) and 4(5) refer to the statutory requirements around the sale of biscuits, which would have been enforced in different parts of the UK on the relevant day, which is the day before this Bill comes into force, if the tin of biscuits had been sold on that day. This means that we will always be talking about a hypothetical sale here, and the amendment to Clause 4(5) makes this clear. Without this amendment, it is not clear that Clause 4(5) is referring to a hypothetical sale, which may cause confusion. I beg to move.

[Baroness McIntosh of Pickering (Con) [V]]

My Lords, I am interested to know why the Minister felt that these amendments needed to be moved at this time; what provoked that? Furthermore, who decides—and in what circumstances—what is a hypothetical sale, as opposed to a real sale?

Oil and Gas Industry

Debate between Lord Callanan and Baroness McIntosh of Pickering

Tuesday 22nd September 2020 Lords Chamber

[Lord Callanan (Con) [V]]

We are currently awaiting proposals from the industry and we are committed to working closely with it; it has a key role to play. We will, of course, be consistent with our international obligations.

[Baroness McIntosh of Pickering (Con)]

What is the current state of interconnectors to the energy market? What new interconnectors is my noble friend expecting to come on stream and when might that be?

[Lord Callanan (Con) [V]]

My noble friend is right that interconnectors have a key role to play. There are a number of existing electricity and gas interconnectors, which will play a key role in the transition. They also provide security of supply to both imports and exports of energy. We will be supporting them.

Retail Businesses: Financial Support

Debate between Lord Callanan and Baroness McIntosh of Pickering

Monday 21st September 2020 Lords Chamber

[Lord Callanan (Con)]

We continue to keep all these things under review. I hope that the noble Baroness will appreciate that our response so far has been tremendous. The Bounce Back Loan Scheme has supported nearly 1.2 million loans; the Coronavirus Business Interruption Loan Scheme has supported more than 60,000 loans, worth £13.7 billion. There are, of course, always additional things we could be doing but I hope she will acknowledge that we have done a lot for this sector.

[Baroness McIntosh of Pickering (Con)]

My Lords, many of the businesses that have not been able to claim have also been impacted by the lack of insurance cover, even though they thought they were covered. Can my noble friend use his good offices to intervene to make sure that, at the very least, they can claim on the insurance for which they have paid premiums? Also, has he looked at the impact on the night-time economy—pubs, clubs, casinos and such—if the curfew imposed in certain areas is extended for any length of time?

[Lord Callanan (Con)]

Insurance cover is a matter of commercial contracts between providers and the insured; it would not be right for us to interfere in a contract that was lawfully made. My noble friend will understand that I am unable to comment on the possibility of any curfews at the moment.

REACH and CE

Debate between Lord Callanan and Baroness McIntosh of Pickering

Thursday 17th September 2020 Lords Chamber

[Lord Callanan (Con)]

As I said in previous answers, we are endeavouring to be as flexible as possible to keep the transition as simple as possible and to reduce the costs. As I said, we are seeking a data-sharing agreement with the European Chemicals Agency which will make the registration process relatively straight- forward.

[Baroness McIntosh of Pickering (Con)]

My Lords, the EU Environment Sub-Committee wrote to my noble friend before the summer. Can he confirm today whether he shares my concern at the risk of a lack of oversight of the decision-making process within UK REACH? Can he further confirm what significant resources will be made available to the Health and Safety Executive to give it the tools it needs to manage effectively a new regulation regime?

[Lord Callanan (Con)]

We have put in place a new UK REACH IT system, closely modelled on the European system to make the process as simple and as easily replicable as possible. The HSE has been provided with the appropriate resources to police the new system.

Renewable Energy

Debate between Lord Callanan and Baroness McIntosh of Pickering

Tuesday 15th September 2020 Lords Chamber

[Lord Callanan (Con)]

The noble and right reverend Lord is right that solar will play a critical role in the mix. A number of projects have already been approved and are ongoing. I am sure we will receive further bids for solar power projects in the contracts for difference auction next year.

[Baroness McIntosh of Pickering (Con) [V]]

My Lords, I will press my noble friend to say whether the figure he very kindly gave the House includes energy from waste, whether he will look to increase the contribution that it makes to renewable forms of energy, and in particular whether its benefits will be shared with local communities.

[Lord Callanan (Con)]

The figures I gave were on total renewable capacity, but my noble friend makes a good point. A number of waste-to-energy schemes have been highly successful. We of course have to recognise that various communities have some concerns. We will always seek to work with local communities to make sure that any further projects are acceptable to them.

Small and Medium-sized Enterprises: Public Procurement Contracts

Debate between Lord Callanan and Baroness McIntosh of Pickering

Monday 7th September 2020 Lords Chamber

[The Lord Speaker (Lord Fowler)]

I call the noble Baroness, Lady Scott of Needham Market. Baroness Scott? No? We will go on. I call the noble Baroness, Lady McIntosh of Pickering.

[Baroness McIntosh of Pickering (Con) [V]]

My Lords, can I ask my noble friend the Minister what opportunities there will be for small and medium-sized businesses in the food sector to bid for contracts to deliver food to schools, hospitals, prisons and other public sector services? This is a wonderful opportunity to have locally produced food locally delivered for local consumption.

[Lord Callanan (Con)]

I agree with the point that my noble friend is making but, of course, each individual contracting authority will have its own strategy for food procurement. The Crown Commercial Service has established a number of frameworks for the provision of food, and this agreement will deliver a UK-wide SME-inclusive food-procurement service for public sector food buyers.

Corporate Insolvency and Governance Act 2020

Debate between Lord Callanan and Baroness McIntosh of Pickering

Wednesday 29th July 2020 Lords Chamber

[Lord Callanan]

The latest official statistics show that the number of corporate insolvencies decreased by half in June 2020 compared to the same month last year. However, the noble Baroness is right to say that we may well face a large increase in the months to come. We have been working with the courts and have provided the resources to make sure that they can satisfy that demand.

[Baroness McIntosh of Pickering (Con) [V]]

My Lords, my question goes to the independence of the monitor. Will my noble friend and the Government consider requiring a more stringent review by the monitor to support the rescue of a company as a going concern?

[Lord Callanan]

Again, we debated these matters extensively during the passage of the legislation. We are satisfied that monitors are appropriately regulated and that their independence is guaranteed. However, we will keep all these matters under review.

European Union (Withdrawal Agreement) Bill

Debate between Lord Callanan and Baroness McIntosh of Pickering

Report: 2nd sitting (Hansard - continued) & Report stage & Report: 2nd sitting (Hansard - continued): House of Lords
Tuesday 21st January 2020 Lords Chamber

[Baroness McIntosh of Pickering]

I followed my noble friend’s arguments closely and understood him to say that Section 8 can be used only to correct deficiencies following the EU withdrawal Bill. His summing up was comprehensive, but he did not respond to the potential obvious deficiencies in the audio-visual media services directive. This may not be the only directive that falls into this category, but it is a category that I banged on about ad nauseam during the first EU withdrawal Bill and it has still not been resolved. If my noble friend is not able to answer today, could he write and tell me, and everyone else who has spoken in this debate, what the legal position is? We have not implemented the directive, but we are now leaving the European Union and it becomes part of retained law, I would argue, in a very deficient way.

[Lord Callanan]

If it becomes part of retained EU law before the end of the implementation period, it will be transferred into British law by snapshotting the procedure. I do not know the details of that directive, so I undertake to write to the noble Baroness about it.