Great British Energy Bill

Lord Hunt of Kings Heath Excerpts

3rd reading
Tuesday 25th February 2025 Lords Chamber

Moved by

[Lord Hunt of Kings Heath]

1: After Clause 6, insert the following Clause—
“Reviews of Great British Energy’s effectiveness
(1) The Secretary of State must appoint an independent person to carry out reviews of the effectiveness of Great British Energy.
(2) In carrying out the review, the independent person must have regard to the statement of strategic priorities prepared by the Secretary of State under section 5(1).
(3) After each review, the independent person must—
(a) prepare a report of the review, and
(b) submit the report to the Secretary of State.
(4) On receiving a report, the Secretary of State must—
(a) send a copy of the report to the Scottish Ministers, the Welsh Ministers and the Department for the Economy in Northern Ireland, and
(b) no less than 14 days after complying with paragraph (a)—
(i) publish the report, and
(ii) lay a copy of the report before Parliament.
(5) The first report must be submitted to the Secretary of State within the period of 5 years beginning with the day on which this Act comes into force.
(6) Subsequent reports must be submitted to the Secretary of State at intervals of not more than 5 years.
(7) In this section, references to an “independent person” are to a person who appears to the Secretary of State to be independent of—
(a) the Secretary of State, and
(b) Great British Energy.”
Member’s explanatory statement
This amendment requires the Secretary of State to appoint an independent person to carry out reviews of the effectiveness of Great British Energy.

[The Minister of State, Department for Energy Security and Net Zero (Lord Hunt of Kings Heath) (Lab)]

My Lords, Amendment 1, in my name, inserts a new clause after Clause 6 which requires the Secretary of State to appoint an independent person to carry out reviews of Great British Energy’s effectiveness. Throughout the Bill’s passage, the Government have made it clear that we are committed to ensuring that Great British Energy is subject to appropriate accountability and reporting requirements.

In particular, we have set out in the Bill that Great British Energy’s annual report and accounts will be published and laid before Parliament. The annual report and accounts of Great British Energy will be subject to external audit and the Comptroller and Auditor General will be appointed as the company’s external auditor, in line with the Managing Public Money guidance. The accounting officer of Great British Energy, once appointed, will also be accountable to Parliament, and the National Audit Office will have the right to review Great British Energy’s work and report its findings publicly, and to the Public Accounts Committee.

Having reflected on arguments made on Report in relation to independent reviews, particularly by the noble Lord, Lord Vaux, I am bringing forward this amendment. It will require the Secretary of State to appoint an independent person to carry out a review of the effectiveness of Great British Energy, including having regard to the statement of strategic priorities with which Great British Energy must comply.

The review prepared by this independent person will be submitted to the Secretary of State, who must ensure that it is published and laid before Parliament. The Secretary of State must share the report with the devolved Governments at least 14 days before publication. The first review must be submitted to the Secretary of State within five years of the Act coming into force, and there will be further reviews at a maximum of five-year intervals. We think that this sensibly balances additional accountability alongside the existing mechanisms of review and reporting, while not overburdening Great British Energy and ensuring that it has the time and space to take long-term strategic decisions as an operationally independent company, and as we have debated extensively during the preceding stages of the Bill.

I also repeat the assurance I gave to the noble Lord, Lord Vaux, on Report, which relates to additionality, and confirm that this will be an important principle for Great British Energy, particularly in respect of its investment activity. As such, we expect that these independent reviews will consider “additionality” as part of any assessment of Great British Energy’s effectiveness, having regard to the statement of strategic priorities in doing so.

This amendment is in keeping with a commitment I gave on Report. I hope noble Lords will support the amendment and I beg to move.

[Lord Vaux of Harrowden (CB)]

My Lords, I rise very briefly to thank the Minister for tabling this amendment, which, as he says, introduces a periodic independent review of Great British Energy’s effectiveness, as he undertook to do on Report. I am most grateful to him for the constructive discussions we have had around this as the Bill has moved through its stages. I also thank all noble Lords who have added their support to this through the process.

The amendment does not go quite as far as my amendment on Report, in two respects. First, as the Minister has just alluded to, it does not include any mention of reporting on the extent to which GBE has succeeded in encouraging private investment. However, the noble Lord was very clear on Report about the importance of the additionality principle for GBE and that he therefore expected that it will be covered by the independent review of effectiveness, and he has just repeated that in his speech just now, which gives me more than sufficient comfort on that question.

Secondly, my original amendment proposed a review every three years. While I think that it would have been better to have the initial review before 2030, which is the Government’s deadline for achieving decarbonisation —therefore, there would be time to do something about it if things were not going right—the five-year interval that the noble Lord’s amendment requires is a reasonable compromise.

I do have one question about the amendment. It was changed at the last minute to give the devolved Governments the opportunity to see the independent report 14 days prior to it being laid before Parliament. I fully understand and agree that the devolved Governments should be given the independent report, but I really do not understand why they should get it in advance of the UK Parliament. I would be grateful if the Minister would explain the reasons for that.

Frankly, however, that is not a major issue. I am very grateful to the Minister for tabling the amendment, which will be a very significant improvement to the transparency and accountability regime that Great British Energy will be subject to, and I therefore urge all noble Lords to support it.

--- Later in debate ---

[Lord Offord of Garvel (Con)]

My Lords, in concluding for His Majesty’s loyal Opposition, I thank noble Lords from across the House for their tenacity in scrutinising the Bill, and in particular the noble Lords, Lord Alton of Liverpool and Lord Vaux of Harrowden, for their amendments. On my own Benches, I note the contributions of many noble friends, who have done sterling work to temper what is a misguided piece of legislation which will not deliver cheaper energy for UK households or businesses.

GB Energy is flawed because it exposes the conflict at the heart of this Government between the Chancellor’s stated priority of economic growth on the one hand and, on the other, the accelerated pursuit of net zero at any cost that the Energy Secretary has made his ideological obsession. While this scrap rages at the centre of Whitehall, there is only one loser: the public, who, it has been confirmed today, will be loaded up with the price of net zero to the tune of another £111 per household this year. That is directly because of this Government’s policies and a far cry from the promise in the Labour manifesto of a reduction in energy bills by £300 per year per household—a manifesto pledge which this Government have refused to include in this legislation.

As the Bill has progressed through your Lordships’ House and the other place, the chasm between rhetoric and reality has indeed been exposed. I believe that in a decade we will look back and ask why we invented this cardboard cut-out company. But despite our deep scepticism, it would be churlish not to wish GB Energy a positive start, so I offer some start-up advice. With its £8 billion of borrowed money, the first order of business should be a feasibility study of all the energy sources available to us in the UK. If it does so, it will discover the following. The dash for renewables at any price is a folly. In doing so, we are loading excessive costs on to our energy bills, to the point now where our industrial energy in the UK is five times more expensive than in the US and seven times more expensive than in China. All the while, we are offshoring jobs from the UK to China, turning UK revenue into Chinese profits. This is impoverishing our nation.

The Government are denying the facts. We are an energy-rich country, and our hydrocarbon industry is the envy of the world in terms of compliance and sustainability. Surely it is irresponsible to refuse to even explore the opportunities that onshore gas could bring, while of course undertaking an assessment of risk. The fact that this Government’s policy continues to tilt towards shutting down offshore oil and gas is surely an affront to the hundreds of thousands of skilled workers in Aberdeen and the north of Scotland. They surely deserve better than this.

Meanwhile, both parties agree that nuclear is efficient and clean, but it should be accelerated. We should cut the red tape by unleashing our homegrown engineers while being unafraid to learn from those, such as the Koreans, who have been able to roll out nuclear energy more quickly and at a lower cost.

If GB Energy does this feasibility study, it will realise the facts and then it should pivot net zero accordingly to ensure that our transition to a cleaner energy system is both fair and affordable to UK households and industry. For the sake of the country, we can only hope that it does so.

Finally, I believe it is important to state unequivocally that my own party must reflect on the last 14 years of government energy policy. The verdict of the electorate in July was clear and resounding. As many noble Lords are aware, an error does not become a mistake until one refuses to correct it, and I would encourage the current Government to heed these wise words.

[Lord Hunt of Kings Heath (Lab)]

My Lords, we were debating my amendment, but we seem to have done the “the Bill do now pass” speeches as well, so if noble Lords allow, I will do both in my response.

I thank noble Lords for their general welcome for my amendment. I think it is a very satisfactory outcome of our debates in Committee and on Report. On the question asked by the noble Lord, Lord Vaux, and the noble Earl, Lord Russell, about the devolution aspect, the noble Earl put his finger on it. It seems perfectly appropriate that the devolved Governments should receive a copy before publication, because that then allows them to have sight of any findings that might be relevant and which they may have to answer on the day of publication. No slight is intended to Parliament in this, it is just the normal business of Government-to-Government relationships and courtesy. That is why we withdrew the original amendment and replaced it with the revised one, in the light of representations made to us by the devolved Governments.

On the timings of the review, noble Lords will know that we had in mind, at first, the UK Investment Bank, which I think has a seven-year review period. The noble Lord proposed three years and in the end we compromised. That is not unreasonable: Great British Energy must be allowed some time to set itself up and get itself into working order and then, at an appropriate point, we will have a review. It is worth making the point that GBE’s work does not come to an end in 2030; that is just a deadline we have given for clean power. We expert GBE to go on for many years to come, and therefore it is going to be a judgment, but we think five years is not an unreasonable time.

I say to the noble Lord, Lord Naseby, that I agree with him about the potential for small modular reactors —we have a programme that Great British Nuclear is running at the moment and I hope it will be able to come to some important decisions over the next few weeks and months—and he is absolutely right to mention them. I also share his view about the potential of hydrogen. We do not disagree at all with the noble Lord on that.

As far as community energy is concerned, this was raised on Report and I do not think there is anything more I can say at the moment. Clearly, we recognise the important role that community groups can play. Our intention is that Great British Energy will build on existing support, by partnering with and providing funding and support to local and combined authorities, as well as community energy groups, to roll out renewable energy projects and develop up to 8 gigawatts of clean power. I am afraid I cannot give any more details at the moment, but I understand and take note of what noble Lords have said about the companies concerned. I take this seriously and will ensure that it is considered, and we will set out further details in due course.

On the issues raised by the noble Baroness, Lady McIntosh, about sustainability, let me be clear that the independent review is focused on the effectiveness of GBE in delivering its mission. It will cover all aspects of the work of Great British Energy and will not focus solely on its financing, as the noble Baroness feared. To give an example, one of its important roles will be to clear the way to allow developers to come in. That will be an important part of the review. Furthermore, as I have already said to the noble Lord, Lord Vaux, additionality will be an important part. Clearly, the amendment that I brought on Report—about GBE needing to keep under review the impact of its activities on the achievement of sustainable development—means that that will be part of any review undertaken by the independent reviewer. I hope that reassures the noble Baroness.