Great British Energy Bill

Lord Frost Excerpts

Committee stage
Wednesday 22nd January 2025 Grand Committee

[Lord Hamilton of Epsom (Con)]

My Lords, the concern that we have here is all to do with financing projects, and the worry that the Great British Energy fund will be used to bolster the financing of some highly speculative energy projects that the private sector is not prepared to back. Those are the ones that will be moving in the Government’s direction and they will be very speculative. They may well not make money; they may be almost doomed to lose money when they start.

There is a great concern here that, when the Treasury is raking around to get contributions for a highly speculative scheme, it will be looking for Great British Energy to put some money into the pot in addition to taxpayers’ money. One thinks here about the development of batteries or energy storage—which is all very controversial—and the whole business of storing CO₂ emissions and pumping that into existing oil wells. I am not sure that the technology for that has been completely satisfied. It all seems to be rather speculative as to whether it will ever happen.

That is the worry that many people have about this Bill. There is a very lively private sector that is happily picking all the low-hanging fruit when it comes to profitable ventures in the energy field. If we are not careful, Great British Energy will be left with everything else that is far from profitable, is extremely speculative and may well lose taxpayers’ money in the process. We want some reassurance from the Minister that this will not happen. Otherwise, it really will be an abuse of taxpayers’ money if Great British Energy just gets involved in all the things that the private sector is not prepared to back.

There are so many different areas that are very speculative when it comes to energy. We had a great debate about hydrogen in the past, for instance. My noble friend Lord Roborough and I do not in fact agree that there is a future for hydrogen. We do not seem to have had any great elucidation from the Minister on this; I do not know whether the Government think that hydrogen is a good idea or a bad one. Either way, it is a typical example of a very speculative form of alternative energy that could cost a fortune to develop and lose people an awful lot of money if it did not work out at the end of the day.

The point of my amendment is that I am very concerned that the Great British Energy fund will be used for these very speculative ventures and I am not sure that that is really what the taxpayer is looking for. I had an issue with what my noble friend Lady Bloomfield said about all the profit that would be made by Great British Energy. I am not sure that it will be making any profit; I think it is much more likely that it will make thundering great losses and all the billions of pounds that are put into it will merely disappear with very little to show for it in the future.

[Lord Frost (Con)]

My Lords, I speak to Amendment 130 in my name. I begin by noting my interests as set out in the register; I have a new interest as a director of Net Zero Watch.

Amendment 130 would postpone the entry into force of much of this Act until the Secretary of State publishes a comprehensive report setting out the full costs of the renewable energy industry. My noble friend Lord Hamilton has just set out the logic of having such a clause that delays the entry into force of certain provisions. From my point of view, the logic is that certain things need to be made clear before Great British Energy can effectively start its work.

It is in this area—the cost of renewables, the subsidies, the taxpayer support, the higher prices—that this problem of establishing the basis on which GBE is proceeding seems the strongest because it would be going into this without any reliable costings in this area and with a real sense that what is known about the costs of renewables is not being disclosed entirely frankly for full and honest debate. When we try to have a debate on this subject, we are often shot down by a statement that, whatever the costs, the costs of climate change are higher. But again, that is never set out. I was lucky enough yesterday to be able to ask the Secretary of State when the last cost-benefit analysis had been done on this subject, and he said it was in 2021. That was before the Ukraine war, which is used as the justification for the rush to renewables.

The NESO report was produced last autumn. It shows that both the pathways to decarbonisation of the energy grid in 2030 are more expensive than doing nothing. That is even clearer if you eliminate the vastly inflated carbon price included in those costings. My right honourable friend the shadow Secretary for Energy Claire Coutinho said last week that internal work within the department on the full system costs of renewables, which she commissioned when she was Energy Secretary, had been stopped. That work would have given us the data that would have enabled the report that my amendment requires.

To conclude on this point, I refer to a blog by Sir Dieter Helm, a well-known expert in this area and not someone with whom I agree on the fundamentals of climate change. He says in this blog, written last week, on the prospect of renewables costs falling:

“It would be wonderful if it was true, but sadly it isn’t anytime soon”.


He goes on to say the UK and the EU are

“telling fairy tales that ‘it’s all going to be cheaper’ here”.

He is one of the biggest experts in this area. We need honesty and GBE needs clarity about the reality on which it is proceeding with its work. That is why I have tabled my amendment, and why we need a proper report and clarity. GBE needs a reliable starting point so that its actions can be tested against reality and we can be sure that it is acting properly in the public interest. I hope the Minister looks at the issue with that in mind, and perhaps gives this amendment sympathetic consideration.

[Lord Roborough (Con)]

My Lords, I rise briefly in support of my noble friend Lord Hamilton of Epsom’s Amendment 118B, with which I obviously agree, as I do on most things—apart from the widespread competitiveness of green hydrogen. I also draw the Committee’s attention to my interests in solar and wind energy project development.

This amendment appears entirely logical in preventing GB Energy investing in any project whose economics depend wholly or in part on government support. This would prevent any impression that the Government may be self-dealing or that there could be any bias in project support from the Government. Without the amendment, there is a risk of a chilling effect on private sector projects that may wish to compete with projects backed by GB Energy, if there is a perception that the Government will always prefer GB Energy projects. There is also a risk that the Government will face the moral hazard of temptation to prop up failing GB Energy projects and investments. For these reasons, this is a highly desirable amendment.

I am also interested in the Minister’s replies to my noble friend Lord Frost on the whole system cost of renewables—particularly if the Minister were able to give this Committee some insight into the carbon costs that his department are using. If he cannot do so now, perhaps he can do so in writing. If the Minister does not agree with the wisdom of my noble friend’s amendment, what transparency can he offer into the amount of government support that may be falling into the hands of GB Energy’s projects?

Great British Energy Bill

Lord Frost Excerpts

Committee stage
Wednesday 15th January 2025 Grand Committee

Moved by

[Lord Frost]

98: After Clause 7, insert the following new Clause—
“The Chair of Great British Energy(1) The Chair of Great British Energy may not be appointed until the appointment has been scrutinised by the Treasury Committee of the House of Commons, or any successor committee.(2) The Chair of Great British Energy must be based full-time at the headquarters of Great British Energy in Aberdeen.(3) The Chair of Great British Energy must undergo an annual review on their performance and—(a) this review must be carried out by external auditors;(b) this review must be submitted to the Secretary of State and laid before Parliament.”Member’s explanatory statement
This would require the Chair of Great British Energy to undergo pre-appointment scrutinisation, to be based at Great British Energy’s headquarters full-time and to undergo an annual review of their performance.

--- Later in debate ---

[Lord Frost (Con)]

My Lords, in moving Amendment 98 I will also speak to Amendment 99 in my name. As it is the first time I have spoken in Committee, I take this opportunity to declare an interest as the director of the company Net Zero Watch.

I have a couple of preliminary remarks before turning to the text of the amendments. These two amendments very much echo themes that we have been debating at length over the last day or two. They are amendments to make up for the lack of detail in the Bill and to ensure, as my noble friend Lady Noakes pointed out the other day, that this company is subject to the same degree of scrutiny that large public companies would expect to face. With the Bill, we are creating a company with precious little oversight or scrutiny as normally understood in company law, and with an idiosyncratic version of the normal governance and accountability arrangements that go with a normal company. Of course, this fact is why nationalised public companies are typically so badly run.

The only detail we have had on the ground covered by these two amendments is in the founding statement, which says:

“Led by its own CEO, Great British Energy will be overseen by an independent fiduciary Board, rather than ministers, benefitting from industry-leading expertise and experience across its remit. Trade unions will also have a voice and representation within Great British Energy”.


Although Ministers both here and in the Commons have commented on that, they have not gone beyond what that statement says, and we are still left rather unclear about how these arrangements are to work, other than to say that normal company law will apply. As I say, that is not quite enough, and these amendments are designed to fill the gap here.

I turn to the text of the amendments. Amendment 98 is designed to set out a few minimum requirements for the themes that we have been talking about: transparency and accountability. Amendment 98 would make clear that there must be a chair and, more importantly, that the appointment of the chair would require a degree of parliamentary scrutiny, in this case by the Treasury Committee. As has been noted, we have already trespassed slightly on this ground, and the Minister noted that this degree of scrutiny would be going beyond precedent. He read out the Cabinet Office guidance on this subject, which is interesting but not decisive for this House and the legislators.

Certainly, the degree of parliamentary scrutiny is dictated by the very political nature of this job, and quite a political figure has been appointed to it as the current chair. He has not been shy in giving us his ambitions for the company. He told the Guardian on 17 October that he thought it should become a “national champion” and

“a longer-term operator in … areas, such as floating offshore wind”.

I do not know whether that is the Government’s view of the development of GB Energy—it might or might not be—but they are statements by the chair and, by making them, he is coming into the arena of political debate about the company. Therefore, some sort of political process in his appointment seems logical. I cannot help noting that he has made broader reflections on politics, populism and progressivism, and he has been a quite a critic of Brexit in the past. Of course, he is entitled to have these opinions but, once you get into the political field, you must expect to face a degree of political scrutiny of your appointment. That is why this amendment would require such public scrutiny.

Similar thoughts are behind the other part of this amendment: the requirement for a publicly available review of performance against the purposes of GBE, and that this should be done independently. Once again, we come back to the point that has been touched on at length: that this is an unusual company and that normal accountability mechanisms are not there. There is only one shareholder, the content of the board is uncertain and, as it stands, there is no requirement in the Bill for directors of any kind at all—although I will come on to Amendment 99. This is a public company, fulfilling absolutely classical public goals, so there must be accountability to the public in how it is run.

Proposed new subsection (2) would require the chair to be based full time at the headquarters of the company, which has been said to be Aberdeen. The Government have made a virtue of that fact, at some length, when talking about GBE. They also confirmed, in October, that the new chair would be based in Manchester. It is not unusual for a non-executive chair to be based somewhere else, but the current chair role is not exactly a non-executive one; it is quite hands on. I struggle to see how one can run the company in quite that way.

The Government say that he will

“regularly spend time in Aberdeen”.

That is good and important, obviously—but this is a new company. It needs leadership as it is built up. If the taxpayer is going to get value for money out of the chair, his salary and the process, he should be where the company is when he is working.

I wish to record that Amendment 99 is a copy of an amendment tabled by Andrew Bowie MP and debated in the Commons—although perhaps it was not fully debated. Again, this comes back to the fact that we are dealing with an unusual company. What is being created is, in many ways, more like an executive arm of HMG than a genuinely independent company. The description that the Minister just gave about the role of the CEO rather confirmed that. It sounded much more like the role of the Permanent Secretary of a department, responsible to Parliament as accounting officer, than the role of a genuine CEO of a company.

The Bill is literally silent on appointment processes, content of the board and so on. The amendment is designed to fill that gap, to give clarity on numbers, and to make it clear that there must be non-executives as well as executives, that there must be a CEO as well the chair, that there can be no repeated appointment beyond defined limits and so on. That is a bare minimum. There already are some provisions in the Bill connected with the articles of association, so the line of principle about what is right to include in the Bill and what is not has already been passed. I hope that, with that in mind, the Minister will consider that these are serious amendments designed to deal with potential weaknesses in the corporate governance and accountability of GB Energy. I look forward to hearing his response.

--- Later in debate ---

[Lord Frost (Con)]

My Lords, I thank the Minister for his comprehensive and understanding response, and I thank other noble Lords who spoke in support of these amendments. I have two very quick points in response.

First, I note what the Minister says about the likely degree of independence of Great British Energy. We will have to see how that turns out, but I make the point, which was not really dealt with in his response, that there will always be an area where the company thinks that something is operational, but the Government believe it is political. That is where it is important to have clarity on relationships and how accountability works, so I am not entirely persuaded that the Bill gets this right at the moment, but I hear what he says.

[Lord Hunt of Kings Heath (Lab)]

I am not sure that you can legislate for this. I understand what he says, because as Ministers, we have relationships with a number of key bodies at the moment. We have formal relationships, there are accountabilities, reports and meetings, but we also build up trust, understanding and working closely together. It is difficult to legislate for that. In saying that we want GBE to work, it has to feel operationally independent, or it is not going to work. We cannot micromanage it, but on the other hand, we are setting the tramlines in the context in which it operates. It is hard to go much further than that, in reality.

[Lord Frost]

Obviously, there is a degree of judgment and practice in how these things are done. There is also a degree of judgment on the extent to which it is desirable to fix the framework within which these judgments and relationships operate, which is probably the area of disagreement.

On the question of where the chair is based, the amendment may not be perfectly drafted. I think there is a difference between “based at” and “resident at”. The point of this amendment is to make sure that the business of the company, when transacted by the chair, is very firmly in Aberdeen, the HQ of the company, and not dragged elsewhere by the fact that the chair may not be resident there. This may not perfectly deal with that point, but it is an important point all the same, so I welcome the Minister’s comments on it. I will reflect on whether any of this is necessary at Report, because it is part of a wider discussion, but for the time being, I beg leave to withdraw the amendment.

Amendment 98 withdrawn.

Great British Energy Bill

Lord Frost Excerpts

Committee stage
Tuesday 3rd December 2024 Lords Chamber

Moved by

[Lord Frost]

2: Clause 1, page 1, line 3, at end insert “, in order to advance the objectives set out in subsection (1A).
(1A) The objectives which the Secretary of State must seek to advance in designating a company as Great British Energy are—(a) reducing household energy costs in a sustainable way, and(b) promoting the United Kingdom’s energy security.”

[Lord Frost (Con)]

My Lords, I rise to move Amendment 2 in my name, and I thank my noble friend Lord Offord for his Front-Bench support for it. I draw noble Lords’ attention to my interests as set out in the register, and I note my regret that I could not be here for Second Reading.

The purpose of my amendment is to establish why the Government are creating Great British Energy and what its underlining objectives and purposes are. Ideally, this would be clear from the Bill or the related documentation, but it is such a thin Bill that calling it a “skeleton” Bill really does not do it justice. Its rather evanescent, wraith-like provisions provide no solidity other than giving a fig leaf of cover to the willed actions of the Secretary of State. I think that we as legislators and the British people are owed a bit more than that from the Bill.

Before I come to the detail, I note that the Bill includes a requirement for the articles of association to contain a statement of “objects”. Of course, objects are not the same as objectives, and what is now Clause 3(2) bears that out. The objects there described are process requirements on the company and limits on where it may spend its very generous taxpayer funding: production of energy, reduction of carbon emissions, energy efficiency, security of supply and so on. They are a “what”; they not the “why”.

The Bill also includes a requirement, in Clause 5, for Great British Energy to have strategic priorities and plans but, again, there is absolutely no constraint on the Secretary of State as to what those strategic priorities may be. Really, this is not good enough for a vehicle for £8 billion of taxpayers’ cash. It is important to have a clear idea of why Great British Energy exists and what its purposes are. That is what my amendment is there to secure and why it is written as it is.

My amendment sets out two objectives for Great British Energy:

“reducing household energy costs in a sustainable way”

and

“promoting the United Kingdom’s energy security”.

In putting those two objectives forward, I am not inserting my own view to substitute for that of the Government. Rather, I am ventriloquising into the Bill, looking at the political statements, spoken and in writing, of the Government and the party opposite and trying to use them to ascertain why they feel this Bill and this company are necessary.

I will briefly take noble Lords through this. I look first, of course, at the Labour Party manifesto— a document whose probative status has been quite significantly weakened in recent months, one might say, but it is all that we have. Number four of the six priorities of the party says:

“Set up Great British Energy, a publicly-owned clean power company, to cut bills for good and boost energy security”.


Those are the two purposes set out in my amendment. Similarly, the launch document for Great British Energy, which was published on 25 July, says that:

“In an unstable world, the only way to guarantee our energy security and protect billpayers permanently is to speed up the transition away from fossil fuels”,


et cetera. At Second Reading in the Commons on 5 September, the Secretary of State said that the Bill would “protect family finances”. The Energy Minister said that it would

“guarantee our energy security and protect bill payers”—[Official Report, Commons, 5/9/24; col. 529.]

once again.

It seems a fair reading to see these as the underlying purposes of Great British Energy and to see them reflected in the Bill. If the Minister, speaking for the Government, thinks differently on this, then perhaps in winding up he could explain what the Government see as the objectives of Great British Energy instead and why they should be different from those in this amendment.

Noble Lords may ask why, if those purposes are understood by all concerned to be the objectives of Great British Energy, they need to be reflected explicitly in the Bill. There are a few reasons. The first, which I have touched on, is simple transparency. The hard-pressed British taxpayer needs to know why they are being asked to stump up over £8 billion.

--- Later in debate ---

[Lord Hunt of Kings Heath (Lab)]

My Lords, it is always helpful to have that kind of clarification, because I certainly was not intending to mislead the Committee in any way. From what I see in Clause 3, I am clear that GBE can participate in, encourage and facilitate the production, distribution, et cetera—informed, as I say, by the strategic plans and priorities. But I will obviously look at that and, if I have got myself confused, I will certainly reflect on it.

[Lord Frost (Con)]

My Lords, I am most grateful to the Minister for his response and to all those who contributed to our discussion, including the mini-discussion at the end about the difference between objectives and objects, which is important and I am sure we will return to it. I do not want to detain noble Lords long but, as the Minister repeated the words of Lady Thatcher on this subject, I cannot forbear repeating her words in her final work on it:

“By the end of my time as Prime Minister I was also becoming seriously concerned about the anti-capitalist arguments which the campaigners against global warming were deploying”.


She—rightly, in my view—added:

“We should be suspicious of plans for global regulation that all too clearly fit in with other preconceived agendas. We should demand of politicians that they apply the same criteria of commonsense and a sense of proportion to their pronouncements on the environment as to anything else”.


Those wise words are worth bearing in mind today when we discuss this issue.

I am not sure that we have entirely got to the bottom of this issue, and I suspect that we will have to return to it in some form on Report, because it is so fundamental to what the Bill is about. For now, I beg leave to withdraw my amendment.

Amendment 2 withdrawn.

Product Regulation and Metrology Bill [HL]

Lord Frost Excerpts

Committee stage
Wednesday 20th November 2024 Grand Committee

[Baroness Ritchie of Downpatrick (Lab)]

My Lords, I welcome this landmark Bill, and I welcome my noble friend the Minister and the noble Lord, Lord Sharpe, to their Front-Bench positions. I firmly believe that the Bill protects consumer rights. However, I declare an interest as a member of the Secondary Legislation Scrutiny Committee, which scrutinises statutory instruments. In that respect, I refer to the amendment in the names of my noble friend Lady Crawley, the noble Earl, Lord Lindsay, and the noble Lord, Lord Foster of Bath, which would require the Secretary of State to conduct appropriate consultation on draft regulations under the Act.

It is vital that we set out as we mean to go on. One criticism that our committee had of many of the statutory instruments is the lack of proper consultation, as well as inadequate memorandums and impact assessments. This amendment in the name of my noble friend Lady Crawley is timely, and I urge my noble friends on the Front Bench to accept it. More effective scrutiny processes are required in legislation to ensure that the policy decisions made with the powers set out in the Bill can be effectively scrutinised as products and marketplaces evolve, particularly those that will evolve online. It is important that consumers are totally protected.

The noble Lord, Lord Jackson, referred to relationships with the EU. I hope that the Government are successful in resetting that relationship and that there is a closer relationship with the EU, because it is important not only for trade but for society and economic growth—and it is good for wider relations in this part of our global world.

[Lord Frost (Con)]

I shall speak briefly to my Amendment 128. I begin, like others, by congratulating my noble friend Lord Sharpe on his role.

My amendment is only a small one, and it is overwhelmed by the pretty savage surgery proposed in other amendments tabled by other noble Lords—a surgery that is well merited, on the basis of what we have seen so far. I shall save my substantive remarks on my main concerns about the Bill until the fourth group, where most of my amendments lie. I share the concerns about constitutional and democratic process expressed by other noble Lords so far. I would probably not go so far as the noble Lord, Lord Anderson, in advocating a very complex, process-heavy and corporatist EU-type process for the Bill, because I believe that speed and simplicity in legislation are also advantageous —but certainly, if any of the Bill survives, we need some sort of serious scrutiny-sifting process to make it work.

My Amendment 128 is just one tiny part of this. It would ensure that, if Clause 2 survived at all, the powers under Clause 2(7) would be exercised—if they were exercised—under the affirmative procedure. That, however, is really a minor part, when we look at some of the other proposals on the table. Nevertheless, I hope that the Minister will reflect, and I look forward to hearing his thoughts.

--- Later in debate ---

Moved by

[Lord Frost]

4: Clause 1, page 1, line 9, leave out subsection (2)
Member’s explanatory statement
This amendment removes from the Bill a broadly-drawn power to align with EU environmental regulation.

[Lord Frost (Con)]

My Lords, in moving Amendment 4, I will also speak to my Amendments 6, 15, 36, 37 and 42. I thank the Minister for the constructive exchanges we have had in the previous two or three weeks, both face to face and in writing.

--- Later in debate ---

[Lord Frost (Con)]

My Lords, I will pick up where I left off. I was about to note that my six amendments in this group have a substantive purpose and, I guess, a probing, clarificatory purpose. I will begin with the substantive. My amendments are separate, but they all stem from the same broad thought, and they are designed to deal with the fact that the powers in the Bill give Ministers the ability to make regulations for products in the UK, or GB, in a range of areas defined by simple reference to existing EU laws; and, beyond that, to provide for those regulations to evolve dynamically —that is, when the EU changes its law, that change feeds through into our regulations.

Personally, I am not and have never been a purist in this area. I do not think it is necessary for GB to have its own defined sets of rules on every single thing, with the UKCA designation that covers everything—unless, of course, we were to drop the current approach to regulation entirely, which was, after all, developed in the last few decades under an EU law framework, and revert to a more traditional, common-law, objectives-based framework. That is possibly a step too far for the time being. Given that, it makes sense to look at other standards and whether they work for us. In practice, that is what happens now, in a limited way. For example, we recognise the CE marking for the EU while sometimes having the UKCA marking or our own rules in parallel, but there are two problems with this.

First, I do not see why that possibility of recognising other standards should be limited to EU law only. Of course, I do not really agree with the thrust of Amendment 17 in this group, which we are about to discuss, which would require alignment with EU law. We may want to use other standards from other territories with less prescriptive regulatory frameworks, and we may want to allow goods with different standards from more than one place to compete on our market to make the country open to the best standards globally. That is the first problem the Bill presents.

Secondly, I do not really think it is right for us in this Parliament to subcontract our lawmaking to another body. It must be clear what the law of this country is at any given moment; it must be properly on our books. It is not good enough to say to the question “What is the law on product X?” that the answer is whatever EU regulation number whatever says it is today. My amendments are designed to deal with these points, and I take them in logical, not numerical, order.

Amendment 4 deletes Clause 1(2). I propose this really to explore why it is necessary, in a Bill specifically on product regulation, to include the ability to import large areas of EU environmental law. I can see that it might be convenient, but the same could be said of lots of other areas too. If there is a more specific and persuasive explanation, I would be interested to hear it from the Minister.

--- Later in debate ---

I hope I have reassured the Committee with my comments and respectfully ask that the amendment be withdrawn.

[Lord Frost (Con)]

My Lords, it has been a very interesting debate, even though it may have had a slightly retro feel to those who lived through it all in 2019 and 2020.

I have a couple of quick points. On Amendment 37, if it is genuinely the Government’s view that this clause is not intended to and does not give the power to create ambulatory references, it seems we agree on substance—but maybe it could be clearer in the Bill.

On my question about the Windsor Framework, I gently suggest that the Minister has not quite answered the point. It is not about mirroring in GB; it is about goods that are able to circulate in Northern Ireland and therefore can circulate in the rest of the UK without further ado. I would appreciate it if that could be clarified further. I will not prolong this debate, even though I suspect we will return to this on Report. I beg leave to withdraw my amendment.

Amendment 4 withdrawn.

Electricity: Cost-competitiveness

Lord Frost Excerpts

Thursday 16th May 2024 Lords Chamber

Asked by

[Lord Frost]

To ask His Majesty’s Government what assessment they have made of the overall cost-competitiveness of electricity generated from recently commissioned offshore wind farms compared to electricity generated from recently commissioned gas-fired power stations at current gas prices.

[Lord Frost (Con)]

My Lords, I beg leave to ask the Question standing in my name on the Order Paper, and I draw attention to my relevant unpaid interests in the register.

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

My Lords, offshore wind is one of the cheapest generating technologies in the UK and is comparable to or cheaper in cost than fossil-fuel based alternatives. It is a vital technology that will allow us to decarbonise the power sector by 2035 and enhance the UK’s energy independence. The department publishes its cost estimates in the generation costs report.

[Lord Frost (Con)]

My Lords, I thank the Minister for that response, but I gently suggest that perhaps he needs to look more carefully at the plausibility of the assessment he has just given. If renewables were as cheap as he asserts, it is hard to understand why bill payers and taxpayers are having to pay about £12 billion per year in subsidy, which is £600 for every family in the country. If offshore wind can be produced for £50 per megawatt hour, as his department asserts, it is hard to understand why the Government have had to offer twice that this year to get anyone to take up a contract. Would the Minister agree that it is better to be honest and that pushing out these fantasy figures just makes it easier for the proponents of net zero and the party opposite to indulge in fantasy politics that the whole energy sector can be decarbonised in just six years?

[Lord Callanan (Con)]

I certainly agree that the Opposition’s policy is fantasy politics. However, I will give the noble Lord the costs in the latest published analysis, which show that electricity from offshore wind is 60% cheaper to build and operate than gas-fired power. The levelised costs are £44 per megawatt hour for offshore wind, versus £114 per megawatt hour for closed-cycle gas turbines. The other key point is energy security. As the noble Lord is well aware, the amount of gas coming from the North Sea is declining year on year, and therefore we have to import increasing amounts of gas. It makes no sense to make us dependent on imported gas for the years to come. We can see the effects of the Russian invasion of Ukraine on gas prices. With the current turmoil in the Middle East, it makes even less sense.

Net Zero (Economic Affairs Committee Report)

Lord Frost Excerpts

Monday 16th October 2023 Lords Chamber

[Lord Frost (Con)]

My Lords, I am grateful for the opportunity to debate this report. I declare my interest as an unpaid trustee of the Global Warming Policy Foundation, a charity.

The committee’s report, as has been said, is now over a year old and therefore, unfortunately, rather out of date. It reflects a world where the policy goal of net zero was undisputed and its economic and financial underpinnings unquestioned. As we know, during 2023, as the real-world costs of the net-zero transition have become more apparent across western economies, we are beginning to see thinking change. Our own Government’s very welcome, though still minimalist, decisions to delay the deadlines for compulsory transition to EVs and gas boilers recognise the reality that the current course to net zero is likely to prove impossibly costly and politically and economically unworkable.

I certainly agree with the committee’s scepticism, though perhaps not from the same direction, about the relationship between the Government’s net-zero plans and hard reality. Nowhere is that scepticism more justified than in one area: wind power. Given the short time available, that is the issue I want to concentrate on today. One often hears it said that wind power is both a cheap form of energy and one that enhances energy security. I am afraid that both those points are fundamentally mistaken. Given the time constraints, I want to make just two broad points.

The first of these is the obvious one: wind power is intermittent and therefore requires back-up. We get wind power only when the wind blows, so widespread use of it means that we must maintain a back-up source of dispatchable power, currently gas. It is argued that the back-up to wind power in the future will be electricity storage. Unfortunately, this is implausible. Doing so through battery power will be fabulously expensive—several times the annual GDP of this country—if it is even possible at all. Hydrogen might be a little cheaper, though still well beyond what can plausibly be paid for. I am afraid that last month’s Royal Society report about hydrogen storage, which purported to show its feasibility, is based on rather implausible assumptions. At least, I hope they are implausible. For example, there is a belief that total UK electricity demand in 2050 will be half what it is now. We face a rather bleak future as a country if that is so.

The truth, which wind power proponents shy away from, is that the more wind power you have, the more gas you need as well. The resultant rickety generation system then makes the overall grid less reliable, while balancing it becomes ever more complex and costly—last year it was nearly £4 billion for this alone. This stressed renewables grid cannot be relied on by a modern economy.

Secondly, as a result of these things, wind power is expensive. It is obvious that running wind plus back-up will always be more expensive than just back-up. Moreover, running that back-up gas network at partial efficiency brings extra costs and deters the investment that we want to see. It is widely believed that wind power costs are coming down fast, but this really does not seem to be the case. The estimates produced by the department are a little disconnected from this reality.

If, as the department claims, an offshore wind farm can deliver power at £44 per megawatt hour, or £55 in current money, why did no wind farm developer take up the offer last month of contracts for difference at £65 per megawatt hour? Why did Vattenfall cancel its plans for the Norfolk Boreas wind farm in July, rather than deliver energy at the price it was contracted to—prices, by the way, that ignore the costs of back-up or strain on the grid? It is obvious from examining the published accounts of companies that costs have not fallen to any great extent, onshore or offshore. A policy based on the assumption that they have therefore makes no sense.

The truth is that the whole wind power project risks being a huge waste of effort and resources. It is going to deliver us, at fabulous cost, an electricity grid that is more unreliable, less secure and more expensive than the one we have now. The correct way forward to reach any serious target to reduce carbon emissions has to be a gas to nuclear programme, first by more modern CCGT generation at existing sites and restarting fracking, following that with a revived nuclear programme. We will obviously be able to do that only if we can eliminate the market distortions and the massive subsidies and consumer costs that come with the current wind power programme.

I do not have much expectation that this is going to happen, given the investment that this Government and their predecessors have made in wind power. I still hope that my noble friend the Minister and his department will look at these issues with a fresh eye and perhaps at least put in place a proper red team review of the wind power programme, before it is too late.

Retained EU Law (Revocation and Reform) Bill

Lord Frost Excerpts

Report stage
Wednesday 17th May 2023 Lords Chamber

[Baroness Lawlor (Con)]

I have added my name to my noble friend Lady Noakes’s Amendment 51A, and I would like to follow on from what she has said. It is important that the legislative momentum for sunsetting, removing or revoking EU legislation be kept up. The reporting requirement on the Government will, as she said, keep up the momentum and help the Government and indeed Parliament to keep track of what has gone, what is yet to go and how further regulations, if any, will be modified.

There is a very good reason for doing this, and it relates to cost. Ultimately, it is people who bear the costs, either through what they pay for goods and services or through their taxes for government compliance costs in dealing, as now, with two systems of law: EU retained law and our own common law.

I hope the reporting requirement will enable us all to know where we are going and help us keep track of getting rid of that which the Government have pledged to get rid of or modify where necessary. That is very important in the interests of efficiency, for everyone, not just businesses. It is also important for transparency. Not only does regular reporting help the momentum; it will make for fairness so that we are all clear about the rules. I hope it will mean greater prosperity, which we need to encourage. In my view, we need to move back more thoroughly to our common-law system, and that is something on which I hope to touch when we consider the next group of amendments.

[Lord Frost (Con)]

My Lords, I support Amendment 51A, to which I have added my name. There is perhaps little to add to what has been said in support of the amendment, other than to recall that the corpus of retained EU law that will be covered by it remains a corpus of law—however normalised, we must hope, by the Bill—that was brought on to the UK statute book in a distinct and different way that did not always enjoy full discussion in this Parliament, as we have said many times. It is logical and reasonable to keep that corpus of law under particular review under this distinct process, so that it can be kept in view of this House and of Parliament. The original purpose of the Bill as introduced by the Government—to review, reform, perhaps revoke and perhaps continue with the legislation—can be kept fully in mind and implemented. To me, that is the logic behind the amendment, and I hope the Government will be able to take that on board.

[Baroness Fox of Buckley (Non-Afl)]

My Lords, I support this amendment, whose intention is well thought through, whatever the lawyers say. I shall say why.

When consideration was being given to what had driven the changes that the Government themselves brought in with the removal of the sunset provision in Clause 1, some credence was given to the words of Jacob Rees-Mogg, who had originally introduced the Bill, and who stated that this was an admission of administrative failure and the inability of Whitehall to do the necessary work. I am no fan of blaming “the blob” for everything. The reason why I support this amendment is that it allows the general public, let alone Parliament, to see what work is being done when and where. That is why transparency matters: so that you cannot just blame things going on behind the scenes.

The Secretary of State for Business, Kemi Badenoch, suggested that the previous demands on the Bill, with its cliff-edge, had caused so much concern that civil servants were choosing to reduce legal risk by preserving EU laws, rather than prioritising meaningful reform. Now that the Government have changed this, we need to be aware that we are having meaningful reform and, again, to see it. Otherwise, I worry that we will have simply put off making decisions about how to deal with this situation.

My final reason is that in this House on many occasions noble Lords have, in good faith, worried that the whole removal of retained EU law was a plot to undermine workers’ rights, women’s rights and everyone’s rights. I have never been as cynical about it as that and have always believed that those rights were fought for domestically and we do not need to be concerned. But I hope that everybody in the House might support this amendment because it should reassure. It gives us now the opportunity to say what is retained, what is removed and what is reformed—rather than, as it were, gossiping behind the scenes with almost a conspiratorial atmosphere of what is really going on—and that we simply are enacting now what was voted for in 2016 and everyone can see what is happening. Reporting it in full will be very helpful.

Retained EU Law (Revocation and Reform) Bill

Lord Frost Excerpts

Committee stage
Thursday 23rd February 2023 Lords Chamber

[Lord Frost (Con)]

My Lords, I fear we are in for quite a repetitive afternoon as we work through proposals to exclude one law after another from this Bill.

I want to make a couple of broader points. First, we must remember what the Bill does. It defines a corpus of law inherited from the European Union and says that it needs to be reviewed by the end of the year. As a result of that review, laws will be dropped, retained or restated. There is an attempt being made to suggest that the only option is the first one—that all these laws that are an important part of our regulatory framework will somehow disappear and that people should be very frightened about that prospect. That is obviously not going to happen. This is a fiction.

[Noble Lords]

Oh!

[Lord Frost (Con)]

It is not in any way the Government’s intention to—

[Lord Clement-Jones (LD)]

How do you know?

[Lord Frost (Con)]

We know because the way that companies and employment rights are regulated cannot be changed overnight. I have no doubt that when the Minister comes the Dispatch Box he will make it perfectly clear that our intention is to maintain high standards in this area, and that is the approach that will be taken through this process. That is what is necessary.

Secondly, as many people know, before I came into this House I was a diplomat and a civil servant, and did other things. Under a Labour Government I ran the campaign against the working time directive, out of the Foreign Office. The then Labour Government did not like the working time directive and mounted what the then head of the TUC said was the most effective campaign against a piece of employment legislation ever. The Labour Government did it again on the agency workers directive.

Therefore, forgive me if I take with a pinch of salt the suggestion that the laws that we are debating, and each suggestion for an exclusion, are somehow a perfect emanation of the wonderful European law-making process. They are not, and the behaviour of the party opposite in the past on some of these specific pieces of legislation demonstrates that. The correct way forward is for the Government to review these laws en bloc in accordance with the provisions set out in the Bill and to come to a reasonable and appropriate assessment of them, not to give any of them quasi-constitutional status by excluding them from this review process. I am sure that is what the Minister will say, and we look forward to it.

[Lord Carlile of Berriew (CB)]

When the noble Lord made his transfer from diplomacy to contentious politics, did he expect that he would be coming to this House and suggesting that the practices that he had followed throughout his very distinguished career in the public services would involve excluding Parliament from a vast swathe of legislation when, as my noble friend Lady Meacher and the noble Lord, Lord Whitty, made clear a few moments ago, there are ways of doing this which do not exclude Parliament?

--- Later in debate ---

[Lord Frost (Con)]

Well, I had sat down. Nevertheless, of course, most of the time that I was a diplomat and civil servant, this Parliament was excluded on most of those provisions. Once the working time directive or agency work directive or whatever had been agreed at EU level, this Parliament was excluded. What we are doing is now giving the Government—and Parliament, let us not forget, through secondary legislation—the power to take a view on these things, and that is quite right.

[Baroness Andrews (Lab)]

My Lords, it is quite extraordinary that the noble Lord says that Parliament has been given power. We have been given no power. He has been in this House long enough to know that we are excluded from changing or even challenging secondary legislation. We have no purchase on this Bill, other than by the process we are going through now.