Grangemouth Oil Refinery
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Baroness Bryan of Partick
To ask His Majesty’s Government what assessment they have made of Project Willow in securing the Grangemouth oil refinery and the jobs of the skilled workers currently employed there.
The Minister of State, Department for Energy Security and Net Zero (Lord Hunt of Kings Heath) (Lab)
My Lords, Petroineos’s decision to cease refining at Grangemouth is deeply disappointing. The Government have stood with workers from the outset. Alongside the Scottish Government, we announced a £100 million Falkirk and Grangemouth growth deal package to support the local community. We launched Project Willow to find an industrial future for the site, identifying nine low-carbon business models that could create 800 jobs by 2040.
Baroness Bryan of Partick (Lab)
I thank my noble friend the Minister for his reply and for the commitment to the future of Grangemouth. The Project Willow report was paid for by the UK and Scottish Governments but was prepared
“solely on the instructions of Petroineos”,
the current owner of the site. Jim Ratcliffe, the billionaire majority owner of Ineos, is adept at getting Governments to pay for his projects while his company, and he personally, keeps the profits. The nine projects suggested in Willow offer a blizzard of possibilities when what is needed is a clear project that can be implemented as soon as possible. Will the Minister consider fast-tracking sustainable aerospace fuel, along the lines of the proposals from Unite the Union?
Lord Hunt of Kings Heath (Lab)
My Lords, I am grateful to my noble friend and of course I am very much aware of Unite’s proposal to transition Grangemouth into a sustainable aviation fuel plant. We are very grateful for the input from Unite and will continue to engage with the union. I have to say, though, that I think the Project Willow approach is the best way forward. It evaluated over 300 technologies and identified nine potential technologies. We have £200 million available from the National Wealth Fund to invest. The focus at the moment is twofold. One is to give support to the workers who are going to lose their jobs. The second is to encourage private investors to look at these proposals. We have the National Wealth Fund, with £200 million to invest, to act as an incentive and we are working very hard in relation to that.
Baroness Sheehan (LD)
My Lords, I draw the House’s attention to my role as chair of the Environment and Climate Change Committee. What will be the process by which the preferred option or options will be chosen out of the nine front-runners identified by Project Willow? To what extent will the Circular Economy Taskforce be involved in the decision-making?
Lord Hunt of Kings Heath (Lab)
My Lords, Project Willow set out nine potential developments. The most near-term developments include hydrothermal plastic recycling, dissolution plastics recycling and ABE bio-refining. On the question about the task force, I will certainly discuss with my colleagues the ability of the task force to input into this. Clearly, in terms of decision-making, the key thing now is to find investors for those projects. Clearly, the National Wealth Fund, with the £200 million that it is going to make available, will play an important role in that.
Lord Offord of Garvel (Con)
My Lords, the closure of Grangemouth is indeed a tragedy for the UK, and even more so for Scotland and for the 400 highly skilled jobs that are being lost. Of course, we know that this is what is referred to as the transition as we go from hydrocarbons to renewables, but, if you talk to the folk in Grangemouth, the problem, they say, is that this just transition is not very just. Indeed, if you talk to the folks in Aberdeen, they say that the just transition is not very just, as we now have data that shows that the transition of jobs from the North Sea oil and gas fields to renewable wind farms is running at 58%, and that jobs that were previously paid at £55k are now paid at £35k. So I ask the noble Lord to consider the patronising language of this just transition. Will he please go back to the department, drop the concept of a just transition and perhaps introduce a new concept called an affordable transition?
Lord Hunt of Kings Heath (Lab)
My Lords, I think the noble Lord is being unfair. Of course we want to see workers who are being displaced by changes in the industrial sector being helped and supported as much as possible, with additional training to enable them to accept good jobs in other sectors. At Grangemouth, a support facility is being made available, with training need analysts for each worker, and I gather that 300 such employees have already requested to take advantage of that. There are open evenings, career fairs and direct engagement with local employers.
As for the North Sea, I just make the point to the noble Lord that, although he has an obsession with gas, the fact is, as he knows, that the UK continental shelf is a declining basin. In the last 10 years, 70,000 people lost their jobs under the stewardship of the Government he served. I did not see much effort there by that Government to establish programmes to provide good jobs. We are at the early stages. We are working very hard. The green energy sector, including nuclear, has huge opportunities and we need to do everything we can to ensure that skilled workers being displaced in some areas of the energy sector are given every opportunity to take up new roles.
Baroness Hayman (CB)
My Lords, I declare my interests as set out in the register. Given what the Minister has just said, is it not important that the sorts of skills, advice, training and support that he has described for Grangemouth are available much more widely if the transition is to take place effectively—and justly—in other areas? What plans are there to bring in the skills passporting programme that we have argued for for many years, as well as the specific training that will be needed?
Lord Hunt of Kings Heath (Lab)
My Lords, I take the point, although I think it is right that we have some specific measures in relation to Grangemouth. I also think it is right to refer to a 2023 report by the CBI, which showed that there was a 9% increase in the green economy that year compared with 1% overall, and 950,000 people are now working in what could be described as a net-zero green economy. These are often very good, very well-paid jobs. We have a number of regional skills hubs. In the nuclear sector, we have a separate nuclear task force taking work forward in relation to this. The challenge we face is that, over the next few years, we need thousands more people to come into the low-carbon energy sector. We are doing everything we can, working with industry and with further education, to ensure that that happens.
Lord Foulkes of Cumnock (Lab Co-op)
My Lords, there are reports that, because of a loophole in the key energy scheme, Petroineos will get a windfall payment of £6 million. Rather than going to the multimillionaire Jim Ratcliffe, surely this money should be used for the retraining of the workers who are going to lose their jobs.
Lord Hunt of Kings Heath (Lab)
My Lords, obviously we should look very carefully at any loophole that may have been identified. I should make it clear that Petroineos has said that it has invested $1.2 billion since 2011 to maintain Grangemouth’s operation, recording losses in excess of $775 million during that period. Unfortunately, that is clear evidence that Grangemouth is not a viable commercial proposition.
Lord Lilley (Con)
My Lords, the closure of Grangemouth will make us more dependent on imports, as will the Government’s policy of not giving licences to extract shale gas or new licences for oil in the North Sea. The Government think that we can cope with being less dependent in normal times—I do not agree—but surely the Government must accept that there may come a time, in an emergency, when we will need to exploit our own resources. So why are the Government, on Saturday, cementing in the only successful shale wells on land in Lancashire, meaning that we will not be able to take advantage of them in future? Is that not an act of vindictive vandalism?
Lord Hunt of Kings Heath (Lab)
So why then did the party opposite, when in government, not allow fracking to take place? It is pure hypocrisy to attack us for a decision that we have made firmly that we will not allow fracking to take place. I take the point about energy security and reliance on imports, but I say to the noble Lord that the UK Government are required to hold stocks of oil as a member of the International Energy Agency. At the end of January 2025, we had the equivalent of 130 days of net imports, substantially higher than the required 90 days set by the IEA. There is no complacency here at all: we of course keep that under very close review and energy security is always going to be our number one priority.
Heathrow Airport Closure: Resilience and Security
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Lord Harris of Haringey (Lab)
My Lords, I beg leave to ask the Question standing in my name on the Order Paper. In doing so, I refer to my interest in the register as chair of the National Preparedness Commission.
The Minister of State, Department for Energy Security and Net Zero (Lord Hunt of Kings Heath) (Lab)
My Lords, I extend my sympathies to all those affected by what happened at Heathrow. I also wish to praise the efforts of all the people who worked so hard to get Heathrow up and running again. The Government work continuously with industry, regulators and other stakeholders to improve and maintain the resilience and security of energy infrastructure and to minimise the risk of unplanned outages. Alongside Ofgem, my right honourable friend the Secretary of State commissioned the National Energy System Operator to carry out a review to investigate the power disruption to Heathrow. Once we have all the information, we will be best placed to understand any wider lessons to be learned on energy resilience and security for critical national infrastructure.
Lord Harris of Haringey (Lab)
My Lords, I am grateful to my noble friend for that reply, and I share his comments about the work put in to restore supplies. Some 30 years ago, the IRA had a credible and viable plan to bomb a whole series of substations around London to deprive London of electric power. It was thwarted only through the efforts of MI5 and the Metropolitan Police. Although it now appears that the fire was nothing to do with malicious action, it has demonstrated how significant substations are. What steps are being taken to ensure that substations around the country are properly secure against malicious actors?
Lord Hunt of Kings Heath (Lab)
My Lords, I thank my noble friend for his work, particularly the work of the National Preparedness Commission. The matter he raises is very important. The Government take the protection of energy infrastructure seriously. We continually work with industry and the regulators to ensure that proportionate security measures are in place at key sites. In relation to what happened, the cause of the fire is still under investigation, and that is why we need to ask NESO to investigate the situation thoroughly. If there are lessons to be learned more generally relating to the issue my noble friend has raised, of course we will take them very seriously.
Lord Dobbs (Con)
May I link the previous Question that the Minister has just answered with the current one about security? Is it true that, in this dash for installing green energy, solar panels and heat pumps, the vast majority of these bits of kit are imported? How is it possible to guarantee that our energy infra- structure in coming years will not be covered in a whole load of Chinese chips? Are we in danger of following in the erroneous footsteps of the Germans when they sold their energy soul to Russia for cheap energy and paid for it wholesale later?
Lord Hunt of Kings Heath (Lab)
My Lords, that is a bit of a stretch from the Question, but I congratulate the noble Lord on his method. We of course look at the issue of Chinese ownership and involvement in the energy sector. We take security risks very seriously. Equally, we take a consistent and long-term strategic approach to managing the UK’s relations with China. On the development of a UK supply chain, I agree with him. It is worth making the point that, even with solar, much of the value of work in installing it is held in the UK, and other parts of the energy sector are too. We are very keen to see the growth of a UK supply chain generally.
Earl Russell (LD)
My Lords, when the substation caught fire, the Heathrow authorities decided that they needed to reconfigure all their internal electricity network, thereby turning off and back on again all the critical safety and computer systems, despite the fact that two other substations remained available to Heathrow. Does the Minister agree that it is important that both the inquiries that have been announced seek to understand why the Heathrow authorities felt that they were unable to transfer from one substation to another without restarting their computer systems?
Lord Hunt of Kings Heath (Lab)
My Lords, my understanding is that, in Heathrow’s view, the supply was insufficient to ensure safe and secure operation. Therefore, it proceeded to reconfigure its internal electricity network to enable the resumption of full operations, utilising the other two external supply points. This required hundreds of systems to be safely powered down and then safely powered up, with extensive testing. The Kelly review will analyse all the relevant material concerning the robustness and execution of Heathrow’s crisis management plans and the airport’s response. The review that my right honourable friend the Secretary of State has commissioned from Ofgem will be looking at the issues of energy, the power outage and what lessons we have learned. We will have discussions with Heathrow to make sure that the terms of reference give us a comprehensive picture.
Lord Mackinlay of Richborough (Con)
My Lords, it has become apparent over the last couple of days that Heathrow had submitted evidence to the environment committee of the House of Commons regarding the overrating of power requirements in that area, saying it felt that the net-zero pathway was not helping that. We are adding EV charging and heat pump requirements to the network on a daily basis, but not really doing the proper jigsaw puzzles to make this work. Ultimately, the responsibility has to be with Heathrow Airport for not having a back-up supply. I note that data centres in that area, which are hugely energy hungry, have back-up, and they never go out of power.
Lord Hunt of Kings Heath (Lab)
My Lords, I am sure those are things that need to be looked at and reviewed by Heathrow, and more generally in relation to the grid and network connections, which I think is part of the question the noble Lord raised. We recognise that, in moving to clean power, we need to strengthen both the grid and the network locally. We will be looking at these matters. We have had reports from the National Infrastructure Commission recently. NESO’s work and advice have led to the Clean Power 2030 Action Plan, which sets out proposals on how we are going to reform the grid and expand it to meet some of those issues.
The Lord Bishop of Sheffield
My Lords, last week’s events surely demonstrate how urgently we need strong regional transport infrastructure to complement and supplement airports in and around London. To that end, I am deeply grateful to the Government for their public commitment to the reopening of Doncaster Sheffield Airport. At the risk of a different stretch, can the Minister reassure the House that the Government will deliver on that commitment by ensuring adequate financial investment to support the South Yorkshire Mayoral Combined Authority and the City of Doncaster Council in getting flights off the ground once again?
Lord Hunt of Kings Heath (Lab)
My Lords, that was a nice try but I am afraid I am not going to respond in the way the right reverend Prelate might wish—although, if we are talking about regional transport hubs, I hope that this year we can celebrate the reopening of the Kings Heath station in Birmingham.
Baroness Ludford (LD)
My Lords, do the Government accept—I think this is less of a stretch—that one lesson to be learned is that Heathrow’s lack of contingency and resilience plans means that a third runway is not feasible?
Lord Hunt of Kings Heath (Lab)
My Lords, I do not take that point at all. Clearly, Heathrow had a resilience plan. One of the points of the investigations is to see how effective it is, and we are mindful of the impact the closure had on thousands of people. The noble Baroness knows that the Government believe that we need to expand Heathrow. It is a hugely important asset to the United Kingdom, but we have to make sure that any expansion is in line with our legal, environmental and climate obligations.
Lord Katz (Lab)
My Lords, on the subject of resilience, businesses and local councils, such as Ealing and Hounslow in west London, have long raised concerns about a lack of capacity and resilience frustrating their plans for growth. As I am sure my noble friend the Minister is aware, this was highlighted by the National Infrastructure Commission’s recent report on electricity distribution networks, in which it cited network constraints in west London brought about by the otherwise welcome installation of data centres—as we have already heard. Does my noble friend agree that we need to reverse the hopeless record on infrastructure investment by the previous Government and invest in a decent, future-proof grid which can cope with better growth for Heathrow and with homes and businesses in west London?
Lord Hunt of Kings Heath (Lab)
The noble Lord is right; this Government are having to invest huge amounts into the infrastructure, which was neglected by the party opposite for years. He is right about the National Infrastructure Commission. It produced a report in February that said that, with demand for electricity set to double by 2050, the current pace of additional investment in the country’s electrical distribution networks needs to double. We are giving that earnest consideration.
Ecodesign for Energy-Related Products and Energy Information (Amendment) (Northern Ireland) Regulations 2025
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Lord Hunt of Kings Heath
That the draft Regulations laid before the House on 4 March be approved.
Relevant document: 20th Report from the Secondary Legislation Scrutiny Committee
The Minister of State, Department for Energy Security and Net Zero (Lord Hunt of Kings Heath) (Lab)
My Lords, this instrument, which was laid before the House on 4 March 2025, forms an important part of the Government’s commitment to ensuring that energy-related products are sustainable and efficient by enabling new regulations to be enforced as they apply in Northern Ireland. Ecodesign policies aim to reduce the environmental impact of energy-related products by reducing their energy consumption and use of material resources, reducing carbon emissions and saving businesses and consumers money on their energy bills. Energy labelling regulations help better inform consumers and encourage them to purchase more efficient products.
Following our departure from the European Union, Great Britain assimilated its regulatory regime for energy-related products standards into domestic law, which we may in future amend. Noble Lords will also be aware of the agreement reached by the UK and EU regarding the Windsor Framework, which helps to ensure the flow of trade within the UK internal market by removing trade burdens and safeguarding Northern Ireland’s place in the union. It allows Northern Ireland to maintain dual market access by continuing to apply EU rules with respect to the regulation of energy-related products. We see it as a necessary element of the commitment to keep the enforcement legislation for Northern Ireland up to date.
This statutory instrument is therefore required to enable market surveillance authorities properly to enforce the latest EU rules which apply in Northern Ireland, ensuring legal consistency and fulfilling the UK’s international obligations. The instrument will update both the Ecodesign for Energy-Related Products Regulations 2010 and the Energy Information Regulations 2011 with respect to Northern Ireland. These updates will ensure that the specific Northern Ireland tables in the 2010 and 2011 regulations accurately reflect the latest product-specific ecodesign and energy labelling measures and enable these measures to be enforced by the relevant market surveillance authorities.
Seven new EU product regulations will apply in Northern Ireland. The ecodesign regulations include: smartphones, mobile phones, cordless phones and slate tablets, which will be regulated for the first time; fans driven by motors with an electric input power between 125 watts and 500 kilowatts; household tumble dryers; and local space heaters. The energy labelling regulations cover household tumble dryers. The ecodesign regulations seek to improve the energy efficiency of all products, while new energy labelling regulations reflect new labelling standards.
Repairability and recyclability of products has been included for the first time under EU ecodesign, and certain energy labelling regulations, to ensure further sustainability and benefit consumers. The statutory instrument will extend the current ambulatory references to EU measures in the Ecodesign for Energy-Related Products Regulations 2010 and the Energy Information Regulations 2011 for Northern Ireland. This will ensure that these schedules continue to reflect the most up-to-date versions of these EU ecodesign or energy labelling measures in force, whether amended or replaced, while minimising the need for further updates to the enforcement regulations.
The requirements updated by this instrument will not restrict manufacturers’ ability to sell into the EU or Northern Ireland, unless they are not willing to meet the EU’s regulations. The EU’s higher standards are likely to become the industry default, and we can assume that manufacturers are likely to choose to meet those standards. If this is the case, the measures will have no impact on traders who abide by the relevant standards.
Since in Great Britain we will look to achieve higher product efficiency, it is very likely that Great Britian will seek to attain similar standards. As such, we will consult as soon as possible on the merits of mirroring the new EU regulations, with the first of these, on tumble dryers, expected to be launched shortly. Our intention is to apply the measures on a UK-wide basis to maintain the smooth functioning of the UK’s internal market and because we share similar goals on product energy efficiency. Our consultations will be on the appropriate means to achieve this aim.
I acknowledge that we are currently on a journey, reflecting on the benefits and processes of such regulations. I thank the noble Lord, Lord Watson, and the Secondary Legislation Scrutiny Committee for their initial scrutiny of this statutory instrument. This included their reflections on how these types of instruments should be handled. I reiterate our commitment to continue to publish Explanatory Memorandums on EU regulations, consistent with our commitments to Parliament and the Northern Ireland Assembly.
I recognise that issues relating to Northern Ireland and protecting its continued status as an integral part of the United Kingdom’s internal market are important to Members of this House, just as they are to the Government. We take these matters seriously, and we are determined to act in the interests of the people of Northern Ireland and in line with the international agreements that reflect the status of Northern Ireland within the United Kingdom. I commend these regulations to the House.
Amendment to the Motion
Lord Hunt of Kings Heath (Lab)
My Lords, I thank all noble Lords who have taken part in this very interesting debate on this statutory instrument for their contributions. I also note also the thanks from the noble Baroness, Lady Hoey, to my noble friend Lord Coaker and the Secretary of State for Defence in relation to the JR position, which I am sure is much appreciated by them.
Obviously, I have listened with great care to the comments of the noble Baroness, Lady Hoey, and the noble Lords, Lord Dodds and Lord Morrow, in relation to the Windsor Framework and the interrelationship with the EU. I also listened with care to the input of the noble Lord, Lord Bew, and his assessment of the framework. As he said, despite the frustrations it has also brought achievements.
The noble Earl, Lord Russell, was very supportive of the Windsor Framework, but suggested there were some issues that needed consideration. We will look with great interest at the outcome of the independent review by the noble Lord, Lord Murphy, and the work of the Northern Ireland Scrutiny Committee. The noble Lord, Lord Dodds, mentioned evidence that has recently been given to that committee.
On the issue of our response, consultation and the Select Committee’s recommendation on how we should handle such instruments in the future, we are committed to publishing further changes through parliamentary Statements to both Houses. I recognise that issues relating to Northern Ireland and protecting its status as an integral part of the United Kingdom’s internal market are important to the Members of the House, as they are to me and to the Government.
I said in opening that we are on a journey. We will very much reflect on the comments that have been made by noble Lords in the debate. We are very much committed to the Windsor Framework, but we want to make sure that it operates as effectively as possible. I do not ignore the comments of noble Lords who are not in favour of the Windsor Framework, but there is no doubt that we need to look at the way it operates and see where there can be improvements. I hope noble Lords will not think that I am rejecting the tenor of the remarks made about seeking to improve the way we do these things. My department is committed to doing that.
The ecodesign and energy labelling laws will update the pre-existing enforcement regime in accordance with what was agreed in the Windsor Framework. If we do not update regulations with respect to Northern Ireland, market surveillance authorities would not be able to enforce the law and we would then risk breaching our obligations under the Windsor Framework. We think that consumer products, ecodesign and energy labelling go hand-in-hand with providing consumers with valuable information, enabling them to make an informed choice and eventually driving the market towards more energy-efficient products.
I have listened to the comments about consumer information and awareness. I will take that back to the department in relation to making sure that as much information as possible about the implications of these regulations is made available to members of the public in Northern Ireland. Of course I take that point.
The noble Baroness, Lady Hoey, raised an important point on consultation. The issue here is that, under the terms of the Windsor Framework, Northern Ireland remains aligned with EU single market rules for certain goods and maintains access to this market. As such, these new regulations automatically apply in Northern Ireland under Section 7A of the European Union (Withdrawal) Act 2018. Of course, the substantive changes being discussed were adopted by the EU in 2023 and April and July 2024.
The fact is that we are fulfilling our obligations by making sure that we can then legally enforce regulations as they apply in Northern Ireland. We are committed to the UK internal market and we wish to support Northern Ireland’s place in it. I repeat: the work of the Northern Ireland Scrutiny Committee, which will examine how to strengthen the role of Northern Ireland in the Windsor Framework, clearly has very important work to do, and we will study its outcome very carefully. As a department and a Government, we would obviously wish to support the new committee in carrying out its functions. As I have said, the independent review from the noble Lord, Lord Murphy, will also be of great interest.
I understand what noble Lords have said about consultation. I should say that the Government did carry out extensive assessment of these delegated EU Acts as they came forward over the past couple of years. Obviously, much of that work was done by the former Government, as the noble Baroness, Lady Bloomfield, suggested. Notwithstanding the Windsor Framework and disagreement about it, we believe that Northern Ireland consumers are likely to benefit from the changes being introduced in terms of lower operational costs. The new smartphone regulations are an area where there is no current equivalent regulation already in place in Great Britain, but the regulation promises potential benefits for both consumers and businesses. Obviously, that is the point of us looking at the benefits of adopting similar regulations in Great Britain.
On the impact on Northern Ireland, which the noble Baronesses, Lady Hoey and Lady Bloomfield, in particular referred to, the previous Government published Explanatory Memoranda on these regulations when they were adopted by the EU between 2023 and 2024. An Explanatory Memorandum was prepared but not published due to the timing of the general election and then the dissolution of the scrutiny committees. But more detailed internal department analysis in relation to tumble dryers has indicated that consumers in Northern Ireland would benefit from lower operational costs and improved repairability. We will set out the detail of the benefits for all UK consumers in mirroring tumble dryer regulations for Great Britain. We will shortly publish an impact assessment, alongside a forthcoming consultation, to mirror tumble drying standards for Great Britain. We will commit to consulting as soon as possible on mirroring the rest of the regulations in GB. Through this, we will be in a stronger position to evaluate impacts.
On the specific detail on tumble dryers, I am not sure I can answer all the questions that the noble Baroness raised, but we are aware that the EU’s regulation is a significant change from that in Great Britain. Only tumble dryers featuring the most efficient heat pump technology, which also makes them more economical in terms of running costs, will be allowed on the EU market. The EU’s regulation estimates saving €1 billion in user expenses by 2030 and a reduction of 10 terawatts of electricity by 2030. We are looking to consult on similar savings in Great Britain.
I am assured that, if the noble Baroness is planning a shopping trip to Scotland, she would not be arrested for buying a tumble dryer in Great Britain and bringing it back to Northern Ireland. I hope that reassures her.
On whether businesses operating in Northern Ireland will have to follow EU standards, as the noble Lord, Lord Dodds, asked, yes, of course there is a consequence from these regulations applying in Northern Ireland. This SI is about providing the relevant market surveillance bodies with the means to do that in accordance with the Windsor Framework.
The noble Lord, Lord Dodds, mentioned extended ambulatory references. The current legislation already includes ambulatory references to automatically cover when EU measures are amended. The instrument extends this to cover when the EU measures referred to are replaced. That ensures that the schedules continue to reflect the most up-to-date versions of the EU ecodesign or energy labelling measures in force, whether amended or replaced, while minimising the need for further updates to enforcement regulations. We will none the less continue to publish Explanatory Memoranda on new EU measures.
To come back again to consultation, during the creation of this statutory instrument, officials consulted counterparts in the Northern Ireland Executive and the relevant market surveillance authorities. Officials in the Northern Ireland Executive were also consulted on the creation of Explanatory Memoranda commissioned under the previous Government, so we are aware of the product-specific regulation covered by this SI—I think that it was mostly done by the previous Government. Let me be clear, too, that the SI is only about updating the Northern Ireland enforcement regime to reflect the new EU measures, which will automatically apply in Northern Ireland by virtue of the European Union (Withdrawal) Act 2018.
The noble Baroness, Lady Bloomfield, asked about market surveillance. It will be done by the Office for Product Safety and Standards in Northern Ireland, as for the rest of the United Kingdom. I have heard the points made about alignment, but I have to say that these matters in relation to Great Britain will be considered on a case-by-case basis, which is how the Government are approaching them.
I suspect that I have not answered all the specific questions, and I shall look through Hansard and follow this up with letters to noble Lords, but I hope that I have shown that the Government are engaging with Northern Ireland in an appropriate way and that we will reflect on these processes in the light of this debate and the report of the Select Committee. We look with great interest at the work of the Northern Ireland Scrutiny Committee and the independent review of the noble Lord, Lord Murphy. I hope that noble Lords will feel that we are dealing with these matters, controversy and disagreement though there may be in relation to the Windsor Framework, as sensitively as possible. These measures will bring advantages to consumers in Northern Ireland.
Lord Dodds of Duncairn (DUP)
Did I correctly hear the Minister say that he committed to the Government making a parliamentary Statement at each point when legislation changed automatically? I am grateful to him for confirming my point on the automatic updating of UK domestic legislation without any further parliamentary procedure, but on the point of how it is notified, could he confirm that that is indeed the case?
Lord Hunt of Kings Heath (Lab)
My Lords, what I think I said was that, in line with the scrutiny committee’s recommendations, we will commit to publicising future changes through a parliamentary Statement to both Houses.
Baroness Hoey (Non-Afl)
My Lords, first, I thank everyone who has taken part in what seems to have become a fairly regular late-night discussion of a statutory instrument that goes slightly wider than the specifics. I also want to say a genuine thank you to the Minister, because he has certainly made us feel that he has been listening and that he will take back some of the points that have been made, when perhaps sometimes, in the busy schedule of all Ministers and officials, they do not get the detail of what is causing so many problems. I genuinely hope that he has learned something —I do not mean that he does not know what he is talking about, but I hope that he has learned a little more tonight about some of the very strong feelings.
My crucial point is that I never seem able to get Ministers, Opposition Front-Benchers, and certainly not the noble Lord from the Liberal Democrats, to actually say that they want to see changes to the Windsor Framework. They keep saying—the noble Lord has said it again tonight—that they are committed to the Windsor Framework. Yet, time after time in this House, we hear of all the things that are wrong with the Windsor Framework and how it is not working.
I know that the noble Lord, Lord Bew, will be a strong supporter of the Windsor Framework, as he has since the beginning—until, perhaps, there have been changes in all sorts of ways. We cannot ignore the realities of what is happening to the principle of it. As we have more such SIs and more discussion of them, I hope that we will finally get the Government and Opposition to recognise that this is not sustainable and cannot go on. In any kind of discussions with the European Union, the Government must put first and foremost the United Kingdom of Great Britain and Northern Ireland as a unifying force—as something that needs to be unified.
I will quickly remind people of all the other little things to do with the Windsor Framework that are just so annoying. There is the pets issue—the idea that you have to deal with extra bureaucracy to take your pet on holiday to Northern Ireland. We could not ban the live exports of animals for slaughter in Northern Ireland, and we cannot even get a ministerial answer to how many have gone off to other awful parts of the world to be killed in very cruel situations. The noble Lord, Lord Dodds, asked a question, and he got the answer back that it was a devolved matter, but it was not devolved when the law was brought in.
People are still finding it very difficult to get seeds to Northern Ireland. There are many other issues, such as parcels. Very soon, someone in England wanting to send a present to their relative in Northern Ireland will have to send the parcel from a post office as if they are sending it to a foreign country. That is going to cost the Post Office more, as well, so where will the costs go? Every month, every week, every day, there is something new. Noble Lords need to realise that this issue is not going to go away, and we will continue to come back on it. But I thank everybody once again, and I would like to withdraw my regret amendment.
Energy Prices
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Lord Sikka
To ask His Majesty’s Government what steps they are taking to control energy prices.
The Minister of State, Department for Energy Security and Net Zero (Lord Hunt of Kings Heath) (Lab)
My Lords, the Government believe that the best way to protect bill payers and to mitigate the energy price spikes that we saw in 2022 is through our mission to deliver clean power by 2030. Under the default tariff price cut, Ofgem has capped the profits of energy suppliers in the retail market. In addition, the Government are reviewing Ofgem’s role to ensure that it is a strong consumer champion.
Lord Sikka (Lab)
My Lords, I thank the Minister for the reply. We need a glimpse of reality here: between 2020 and 2024, the UK’s 20 biggest energy companies made an operating profit of £483.4 billion—yes, noble Lords heard that figure correctly—which is a major cause of social problems. Steel, shipbuilding and engineering industries are struggling, 6.1 million households are in fuel poverty and 110,000 pensioners a year are dying in fuel poverty. The Government have three non-mutually exclusive policy options: price controls, public ownership, and worker-elected and consumer-elected directors on company boards. What proposals would the Minister like to offer for ending profiteering in the energy industry?
Lord Hunt of Kings Heath (Lab)
My Lords, I am very grateful to my noble friend for his support. The issue of prices is of course serious for both business and domestic customers. That is why we have the warm home discount and the support given to businesses that use energy intensively. Clearly, this is a continuing issue that will be solved only if we can wean ourselves off the international gas markets, which we are going to do by moving towards clean power. I just say to my noble friend that Ofgem does in fact cap the profits of energy suppliers in the retail market; they are capped at 2.4%.
Earl Russell (LD)
My Lords, we have some of the most expensive electricity prices in Europe, just at the point when our citizens need to turn away from fossil fuels to run their cars and heat their homes. I know that the Government are looking at electricity market reform, particularly zonal pricing. Will the Government work on a cross-party basis to develop those plans? When do they feel they will be in a position to bring forward legislation?
Lord Hunt of Kings Heath (Lab)
My Lords, I cannot give a definitive date for future legislation, as the noble Earl will understand, but he is right about market reform. We are considering fundamental changes, including zonal pricing. I understand that the previous Government looked at marginal pricing when they started their work but decided not to make any changes. On input, I would be very glad to meet with the noble Earl to discuss his proposals.
Lord Geddes (Con)
My Lords, the Minister will not be surprised by my question: what price tidal power?
Lord Hunt of Kings Heath (Lab)
My Lords, it depends on whether tidal power can offer value for money. I recently met with a number of developers who are interested in developing tidal power. I understand their passion and the potential, but we must ensure that it provides value for money. However, the door is open to further discussions.
Baroness Hayman (CB)
My Lords, I declare my interests as set out in the register. The market for electricity in this country is obviously a very complicated one, but Ofgem made it clear in the announcement of the recent price increases that the link with international gas prices is influencing the current rise in the cost to consumers. Can the Minister assure me that, as we move to that clean power system, the REMA review that he mentioned will look at whether delinking the overall UK market from the price of natural gas internationally would be in the best interests of consumers?
Lord Hunt of Kings Heath (Lab)
My Lords, that is an interesting comment, and the noble Baroness is of course absolutely right. Our problem is that we are tied to international gas prices, and noble Lords who are fixated on our using even more gas need to consider the implications of that. We are looking at how future gas market networks would work in a situation where gas is used much more infrequently. On marginal pricing, the more we use renewables, the less we are concerned about the international market. The contract for difference limits enable us to pay the renewable developers at a price that has already been agreed, rather than worrying about what the international price market will be.
Lord Offord of Garvel (Con)
My Lords, the Minister is always reminding us from the Dispatch Box that our electricity is the most expensive in the OECD. He blames international gas markets for that, but our European neighbours are subject to the same markets and seem to have cheaper electricity. Take France, for example. Our electricity is 80% more expensive than France’s. Why is that? It has a more balanced energy system, and it uses nuclear for its baseload. It is a simple fact that just shy of 50% of our electricity bills is comprised of green levies, subsidies and network realignment. I ask the Minister to slow down. Can we now just take some time to reflect, and reassess this mad dash to renewables by 2030? Please let us not put all our eggs in one expensive and fragile basket.
Lord Hunt of Kings Heath (Lab)
My Lords, I do not agree with the noble Lord at all. I remind him that our electricity market structure and its reliance on the international gas market is an inheritance from the last Government, and the highest prices we had were under the stewardship of the last Government. In getting ourselves off these international market prices, going to renewables and using nuclear as the essential baseload, we can grow the economy and give ourselves security. I totally disagree about the speed; we need to do this as quickly as we can.
Lord Liddle (Lab)
My Lords, do we not depend on high-priced gas because we rely on it when the wind does not blow and the sun does not shine to make our renewables work? The answer therefore has to be to invest more in energy storage, which I think we are doing, to strengthen international grid links so that we can gain supply there, and to invest for the long term in nuclear power.
Lord Hunt of Kings Heath (Lab)
My Lords, I agree with my noble friend on all of that. I am glad that he mentioned the importance of nuclear energy as our essential baseload. With Sizewell C, the SMR programme, the opening of Hinkley Point C and the advanced modular reactors, we have the opportunity to have an excellent industry in the UK to give us low-carbon baseload energy.
Lord Teverson (LD)
My Lords, the best way to reduce the costs of energy is by not needing so much of it. Is the Minister strongly pressing his colleagues in government to get the Future Homes Standard out and implemented, so that families who buy new houses know they are not going to have to retrofit and will have low energy bills? When is that announcement going to be made?
Lord Hunt of Kings Heath (Lab)
The noble Lord is clearly right that energy efficiency in our homes is necessary if we are going to meet the net zero target by 2050 and hold down the cost for domestic consumers. I cannot give him a date, but I can say that my department is working across Whitehall on the policies we need to enunciate to get going in that area.
Lord Howell of Guildford (Con)
My Lords, has the Minister noticed that the chairman of Électricité de France has just been sacked and that, understandably, advice has been given to EDF to spend less money on overseas investments and concentrate on power in France? Can he give us an idea of what effect that has on our one major nuclear development, Hinkley, where, of course, EDF is a major player, and on Sizewell C, where it is a minor but considerable player? Is this not rather dangerous, given that nuclear power, along with renewables, is absolutely necessary to get our costs down in future?
Lord Hunt of Kings Heath (Lab)
My Lords, I have noticed the change in leadership at EDF, and we look forward to having discussions in the future with the new person who has been appointed. EDF has made a major investment in Hinkley Point C and, as the noble Lord says, is an important minority shareholder in Sizewell C. We have enjoyed a good relationship with EDF. My right honourable friend the Secretary of State for Energy Security and Net Zero met with his counterpart in the French Government only a few weeks ago, and we maintain close contact with both the French Government and EDF. We will have to see how this unfolds over the next few weeks, but I am confident that we will see progress towards the opening of Hinkley Point C and a final investment decision on Sizewell C.
UK Energy: Grid Decarbonisation
Lord Hunt of Kings Heath Excerpts(1 week, 4 days ago)
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Lord Offord of Garvel
To ask His Majesty’s Government what assessment they have made of the impact of their plans to decarbonise the grid by 2030 on the United Kingdom’s energy security.
The Minister of State, Department for Energy Security and Net Zero (Lord Hunt of Kings Heath) (Lab)
My Lords, in an era of heightened geopolitical risk, switching oil and gas for home-grown clean energy from renewables and other clean technologies offers security that fossil fuels cannot provide. NESO’s independent modelling confirms that achieving clean power by 2030 is feasible, while ensuring security of supply without increasing costs to consumers, with scope for lower bills.
Lord Offord of Garvel (Con)
My Lords, this self-imposed target of decarbonising the grid by 2030 is all very admirable but is it realistic and is it achievable? Looking at my national grid app, it is telling me that right now, today, renewables are 43% of the grid and the rest is non-renewables. Noble Lords may have noticed that this is quite a good day for sun and wind, which is why it is at a high number. Last year, the average was 37% from green energy. That is precisely why this is unachievable, and a target that we cannot hit in 2030. In one simple word, it is called “baseload”. In China, they use coal for baseload and in America they use shale gas for baseload. That is why factory electricity is seven times cheaper in China and five times cheaper in the United States. We have abundant hydrocarbons in the UK and we have great nuclear capability. Is now not the time to review this target to make it realistic and, more importantly, affordable for British consumers and businesses?
Lord Hunt of Kings Heath (Lab)
No, my Lords, and I very much regret that the Opposition have withdrawn their support for policies taking us towards net zero, particularly in view of the fact that the noble Baroness, Lady May, took the decision when Prime Minister to legislate for the 2050 net-zero target. It is interesting, in relation to China, that the IEA reckons that 60% of the global expansion in renewable energy between now and 2030 will be in China. As for the noble Lord’s obsession with fossil fuels, the reason that we have these high prices, which the party opposite bequeathed to the country, is the unreliability and volatility of the international gas and oil markets. Getting clean power gives us energy security and much more reliability in prices.
Lord Ravensdale (CB)
My Lords, I declare my interest in the register. Can the Minister please update the House on the progress his department is making with banning the imports of Russian nuclear fuel? Importantly, when will it be taking those measures, with all the benefits that will bring for not only energy security but national security and our domestic industries?
Lord Hunt of Kings Heath (Lab)
I am grateful to the noble Lord for raising this question again. He will know that the Government have committed to prevent the import from Russia of nuclear fuels by 2030. We are discussing whether we could bring this forward. I am afraid I cannot give him any more information at the moment, but as soon as a decision is made, I will let him know.
Viscount Hanworth (Lab)
My Lords, since the announcement by President Macron in the autumn of 2021 of the France 2030 agenda, France has been committed to closing the nuclear fuel cycle. This means that it intends to use its uranium more efficiently and to deploy nuclear waste in its reactors. It is motivated by the supposition that, by 2050, the stocks of uranium will be pre-empted by the Chinese and the Americans. What is the Minister’s reaction to this supposition? Is the UK likely to follow the lead of France?
Lord Hunt of Kings Heath (Lab)
My Lords, the noble Lord will know that through Urenco, at Capenhurst, we are investing a considerable amount of money into the HALEU programme to enable us to have the whole fuel cycle undertaken in the United Kingdom. This is good for energy security and good for exports. I understand the point that the noble Viscount makes about uranium. We are confident in the future supply, but I acknowledge his underlying point of the importance of nuclear energy as an essential baseload.
Baroness Sheehan (LD)
Does the Minister agree that consumers choosing green electricity as their preferred source of power is a powerful driving force for the increasingly rapid uptake of electric vehicles, for example, given that UK EV sales increased by more than 20% last year? Surely it is far better than relying on fossil fuel generation from unstable regions such as the Middle East and Russia for long-term energy security.
Lord Hunt of Kings Heath (Lab)
My Lords, I totally agree with the noble Baroness that the wholesale move to electrification, not just in power generation but in transport, industrial processes and home heating, will lead us to be much more energy secure. We will ensure that we make the contribution we need to make to deal with climate change and we can grow the economy and bring thousands more green jobs to this country.
Lord Kirkhope of Harrogate (Con)
My Lords, there appears to be a contradiction. Certain Ministers are encouraging the farming industry to use as much of the good agricultural land as possible to produce food, and yet other parts of government are hell-bent on having solar panels everywhere, including on our best agricultural land. What exactly is the policy of the Government on this?
Lord Hunt of Kings Heath (Lab)
My Lords, I do not think there is any confusion at all. The policy is quite clear. We value our agricultural land, and the total amount of it that could be used by solar in future, over a considerable number of years, is less than 1%. The noble Lord may have noticed that, on 21 March, only two or three days ago, Great British Energy announced that its first major product will be the solar accelerator, which will enable hundreds of schools and hospitals across England to install new rooftop solar power. We are not just talking about the use of agricultural land. We want to see an expansion of solar, but it can be in relation to schools and hospitals and buildings as well.
Lord Lennie (Lab)
My Lords, when will the Government make a decision about the awarding of a contract for advanced small modular reactors in this country?
Lord Hunt of Kings Heath (Lab)
My Lords, a process for small modular reactors is being undertaken by Great British Nuclear at the moment. It has undertaken a technology appraisal, tenders have now come in, and I expect that the outcome of the process will be known by the end of spring. That is tied into SR discussions.
Lord Alton of Liverpool (CB)
My Lords, did the Minister note over the weekend the views of Unison and the Independent Anti-Slavery Commissioner, along with the letter sent by a Holocaust survivor to Mr Ed Miliband, all supporting the all-party amendment, which was passed by your Lordships’ House by a majority of 50, saying that there should be zero tolerance for the use of slave labour in supply chains? When Mr Miliband went to China last week, did he raise the use of Uyghur slave labour in the manufacture of solar panels and other green technology? Did he raise the use of child labour in the DRC in lithium and cobalt mining and their use in green technology, including these solar panels?
Lord Hunt of Kings Heath (Lab)
My Lords, I understand the noble Lord’s concern. He will know that the Great British Energy Bill is being debated in the other place in a day or two’s time. I understand the point that he raises and we will look at that letter with a great deal of consideration. We are committed to tackling the issue of forced labour in supply chains, and legislation and guidance are already in place to help businesses take action against modern slavery.
Lord Howell of Guildford (Con)
Could the Minister, who is usually very clear, be a little clearer with us about what is meant by decarbonising the grid by 2030? A number of authorities are saying that that is not what is going to happen at all. A number of gas-generating electricity stations are already being commissioned, and when they are there in 2030, as they will be, they will emit large amounts of carbon dioxide. How is that going to be handled? How is it going to be buried? Have the contracts begun for carbon capture and storage? It does not appear that there is much sign of that.
Lord Hunt of Kings Heath (Lab)
My Lords, the noble Lord will recall that we signed contracts in December to launch the first carbon capture, usage and storage project. We expect that, by 2030, clean sources of energy will produce at least 95% of Great Britain’s generation, and gas power generation will be there mainly as a back-up.
Scotland: New Nuclear Power Generation
Lord Hunt of Kings Heath Excerpts(2 weeks, 3 days ago)
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Lord Foulkes of Cumnock
To ask His Majesty’s Government what discussions they plan to have with the Scottish Government regarding the extension of new nuclear power generation to Scotland.
The Minister of State, Department for Energy Security and Net Zero (Lord Hunt of Kings Heath) (Lab)
My Lords, Scotland’s policy on new nuclear energy projects is a matter for the Scottish Government. We remain open to discussions with the Scottish Government on nuclear energy’s future in Scotland. In the meantime, we welcome EDF’s recent decision to extend Torness’s operation to March 2030.
Lord Foulkes of Cumnock (Lab Co-op)
My Lords, I agree that we should respect the role of the Scottish Government, but surely now is the time to stop pussyfooting around, when the Scottish Government say that they are quite willing to accept in the future electricity generated by nuclear in England. Given that energy is a reserved area, surely we should look at ways of stopping the blockers in Scotland, as well as in the rest of the United Kingdom. Will the Minister have a look at it?
Lord Hunt of Kings Heath (Lab)
My Lords, my noble friend knows that on powers relating to nuclear the issue is that, in Scotland, nationally significant infrastructure projects, including nuclear, are broadly reserved. However, Scottish Ministers have devolved executive competence for planning decisions for improving applications to build, operate or modify electricity-generating stations with capacities exceeding 50 megawatts in Scotland. We are not in a position to make a change to that. Scotland has a rich nuclear heritage, and the work being done at Torness is extremely valuable in providing clean energy to Scotland. As I have said already, we very much support EDF’s decision to extend the life of Torness by a couple of years.
The Earl of Kinnoull (CB)
The Net Zero, Energy and Climate Change Interministerial Group met on 6 March and the communiqué came out yesterday. It has a section in it about what was discussed, and nuclear power is not mentioned. The interministerial group met in October and March last year, and nuclear power is not mentioned in either of those two communiqués. Can the Minister assure us that nuclear power will be on the agenda of the next meeting of the interministerial group?
Lord Hunt of Kings Heath (Lab)
My Lords, we are always open to discussing nuclear power in that group, and with the Scottish Government. However, it is very difficult to make progress in view of the current Scottish Government’s position on nuclear. I can say that, on 6 February in the Scottish Parliament, Anas Sarwar, the leader of the Scottish Labour Party, called on John Swinney, the First Minister, to drop his ideological opposition to nuclear power in Scotland.
Lord Offord of Garvel (Con)
My Lords, the GMB came out and said that the Scottish economy is losing out to the tune of £1 billion because of the Scottish Government’s ideological indifference to nuclear. Am I right that, last week, the noble and learned Baroness the Advocate-General said that there had been a fundamental reset in the relationship between the UK and Scottish Governments? I ask the Minister if this is not the time to demonstrate that reset. Can we please have a joined-up, holistic strategy for nuclear that does not stop at the Tweed?
Lord Hunt of Kings Heath (Lab)
My Lords, there has been a reset and we have been in close discussions with the Scottish Government on a number of energy matters, but the fact is that the Scottish Government are opposed to new nuclear development. I agree with the noble Lord—and Anas Sarwar said it too—that the refusal to allow new nuclear power plants is costing Scotland billions in investment and thousands of jobs, which will go to England and Wales instead. I agree with that, but the fact is that we are dealing with the Scottish Government, who, at this stage, are not prepared to go for new nuclear.
Lord Wigley (PC)
My Lords, in view of the difference of opinion on nuclear power in Scotland, demonstrated by both the Minister and the noble Lord, Lord Foulkes, will the Minister accept that, in Wales, there is a widespread wish to see the former nuclear power stations of Wylfa and Trawsfynydd being used? That brings together the Labour Government in Cardiff and the Plaid Cymru-run local governments in Anglesey and Gwynedd. Given the strong feeling that this should happen, not least in the context of medical isotopes, can the Government give particular attention to bringing investment to those two sites?
Lord Hunt of Kings Heath (Lab)
My Lords, the department rejoices in the approach of the Welsh Government, and indeed of the noble Lord. I well understand the potential for new nuclear developments in Wales and think it is a tragedy that the proposals in Wylfa did not go ahead. The noble Lord knows that, in the siting policy currently in play, Wylfa is listed as a site of great potential. The new siting policy is more flexible, but, undoubtedly, Wylfa in particular still has great potential.
Earl Russell (LD)
My Lords, last year, Scotland met 113% of its national power needs from renewable sources alone. This is set to radically increase, providing much-needed clean power to the rest of the UK. I welcome the expansion of the £150 warm home discount to more homes in Scotland. Does the Minister agree that the SNP Government must take urgent action on energy efficiency? Their decision to scrap their own green heating plans for heat pumps in new homes will leave Scottish citizens poorer and colder.
Lord Hunt of Kings Heath (Lab)
My Lords, the noble Earl is not going to draw me into commenting on what the Scottish Government have done on these matters. However, it is worth making the point that, in 2023, 19.3% of electricity generated in Scotland came from nuclear. That indicates that, in clean power, nuclear has a huge amount to offer Scotland, Wales and England.
Lord Spellar (Lab)
My Lords, would the Government’s hand not be greatly strengthened in dealing with the Scottish Government if they themselves moved ahead on a decision on small modular nuclear reactors? When do they expect to announce the outcome, and can we have something slightly more definitive than “soon”?
Lord Hunt of Kings Heath (Lab)
My Lords, I absolutely agree with my noble friend on the importance of the small modular reactor programme. He knows that Great British Nuclear is going through a selection process at the moment. We expect important announcements to be made in the spring.
Lord Forsyth of Drumlean (Con)
My Lords, power devolved is power retained. If the Scottish Government are not acting in the interests of the United Kingdom, with their opposition to nuclear power and to oil and gas, that will create great difficulties for the rest of the United Kingdom. Has the Minister considered taking back the power for them to prevent the appropriate infrastructure needs of the country as a whole?
Lord Hunt of Kings Heath (Lab)
My Lords, I do not think it is the case that we should reopen the devolution settlement, and the noble Lord would not really expect me from the Dispatch Box to say that we should. I think it is clear that, overall, new nuclear has a huge role to play, in the baseload that it can provide and in clean power. The move towards the final investment decision on Sizewell, progress on Hinkley Point C, the SMR programme and the potential of advanced modular reactors will give us a hugely important foundation for clean power for Great Britain as a whole.
Baroness Curran (Lab)
My Lords, I speak as a former planning Minister in the Scottish Government. Does the Minister agree that the best way to address this case is not more conflict with the Scottish Government but promoting the argument for nuclear power in a positive way—and, perhaps, working hard so that Anas Sarwar becomes First Minister of Scotland and we can resolve this problem?
Lord Hunt of Kings Heath (Lab)
My Lords, those are very wise words from my noble friend.
Lord Watts (Lab)
My Lords, if the Scottish Government do not want nuclear power but are willing to use electricity that it has generated, should there not be a reflection of that in the price they pay?
Lord Hunt of Kings Heath (Lab)
My Lords, we are looking at the whole issue of zonal pricing, but I do not think we would go quite that far. It is interesting, though, that the Scottish Government were in favour of the extension to the current plant in Torness. I agree with my noble friend Lady Curran that we should work on that and be constructive in our approach. We have had fruitful discussions on some of the difficult issues around Grangemouth and the North Sea transition. We should build on the reset that the Prime Minister and the First Minister have taken forward, and we should articulate the advantage that nuclear power gives to all countries in Great Britain.
Licensed Oil and Gas Fields: Emissions
Lord Hunt of Kings Heath Excerpts(3 weeks, 3 days ago)
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Baroness Jones of Moulsecoomb
To ask His Majesty’s Government how they plan to assess the ‘scope 3 emissions’ of licensed oil and gas fields, and what impact they have on their emission reduction targets.
The Minister of State, Department for Energy Security and Net Zero (Lord Hunt of Kings Heath) (Lab)
My Lords, the Government have consulted on supplementary environmental guidance relating to emissions from burning extracted oil and gas. We are working towards publication of finalised guidance as soon as possible. Emissions produced by burning oil and gas are accounted for in our domestic targets for the sectors which use these fuels. Emissions are not accounted for in carbon budgets if this fuel is burned outside the United Kingdom.
Baroness Jones of Moulsecoomb (GP)
My Lords, I am sure the whole House will be with me in expressing concern about the collision in the North Sea and in sending hope to the rescue services, the sailors and, of course, all marine life.
I thank the Minister for his Answer. That was exactly what I was concerned about. Once the gas and oil are extracted, the total emissions should then be accounted for, on the assumption that it will all be burned, whether or not it is exported or moved somewhere else.
Lord Hunt of Kings Heath (Lab)
My Lords, first, I join the noble Baroness in expressing my sympathy to all concerned in the tragic events that have taken place in the North Sea. I also agree with her that we should pay tribute to the emergency services—and, of course, we are very concerned about the environmental impact.
I ought to explain to the House that scope 1 emissions are direct company emissions that occur from sources owned or controlled by the company. Scope 2 are indirect emissions resulting from generation of purchased energy, typically electricity, or purchased heat. Scope 3 are all indirect emissions not included in scope 2 that occur in the value chain of the reporting company and include downstream and upstream emissions—if noble Lords wished to know what those scopes were.
The point here is that we would be double-counting the emissions—or that is the risk—if we went down the route that the noble Baroness suggests. We had this consultation in the light of the Finch judgment, because we needed to revise the environmental impact assessment to take account of scope 3 emissions. We are carefully considering the consultation at the moment, and it would be premature for me to say anything more at this stage.
Baroness Hayman (CB)
My Lords, I declare my interest as chair of Peers for the Planet. Did the consultation involve—I do not think that it did—the issue of ending venting and flaring, which is not essential, from oil and gas fields in the North Sea? We know how damaging that is, and the Minister will recollect that during debates on the Energy Bill noble Lords across the House took a view that it was a dangerous practice that needed ending. What are the Government doing about ending it?
Lord Hunt of Kings Heath (Lab)
My Lords, I believe that the noble Baroness is right that venting and flaring are not covered in the EIA consultation, which is about scope 3, and I think they would come into scope 1. We are, of course, concerned about this and are considering the matter. My understanding is that the upstream oil and gas sector overall makes up to 3% of total net territorial greenhouse gas emissions. Of course, we are committed to meeting carbon budgets 4, 5 and 6, and we have just received advice from the Climate Change Committee in relation to carbon budget 7—all those things come into the mix as well—but I certainly take seriously the point that the noble Baroness raises.
Earl Russell (LD)
My Lords, given the Supreme Court decision and the new rules on oil and gas production being consulted on, what other measures and assessments of extra resources are the Government considering or undertaking to ensure that continued progress is made towards a just transition in the North Sea?
Lord Hunt of Kings Heath (Lab)
My Lords, the noble Earl is right. We issued a consultation paper last week in relation to the North Sea and the transition that takes place. There is a decline that has carried on for many years in North Sea production. On the other hand, the workers in the North Sea are very skilled, and there is no question that, as the number of workers in the oil and gas fields reduces, so there is a big demand to increase the workforce in offshore oil and gas. The consultation, our policy of a just transition and the jobs hubs that we have established are very much geared towards ensuring that we make use of very skilled people and find new employment for them.
Lord Foulkes of Cumnock (Lab Co-op)
My Lords, when the carbon capture and storage schemes were given the go-ahead recently, the one in Scotland was not among those that were given the go-ahead. When does the Minister expect further consideration of this?
Lord Hunt of Kings Heath (Lab)
My Lords, we are of course in discussions with His Majesty’s Treasury over the next spending review and it would be premature for me to comment on any of the detail. Clearly, carbon capture, usage and storage have a very important role to play in the future, and I have noted my noble friend’s elegant bid for investment in Scotland in that regard.
Lord Offord of Garvel (Con)
My Lords, the Government have repeatedly refused to clarify whether Jackdaw and Rosebank will be shut down under their policy of refusing to grant any new oil and gas licences. That is despite both licences being granted in 2022 and 2023 in recognition of their contribution to net zero and to our national energy security. Will the Minister please clarify that this is not another example of government policy being dictated by lawyers rather than by politicians? How does he expect the Chancellor to fulfil her growth agenda with the most expensive energy prices in the OECD?
Lord Hunt of Kings Heath (Lab)
My Lords, the best way to deal with energy prices is to move from being utterly reliant on international gas prices subject to the volatility that has arisen from the invasion of Ukraine by Putin. That is why we must move towards clean power as soon as we possibly can, to give ourselves energy security.
I cannot answer that question in relation to Rosebank and Jackdaw. The original consent decisions were subject to judicial review, which was paused pending the outcome of the Finch judgment. In the light of the Finch judgment, as I have said, we are consulting on new environmental impact assessments. When we have produced those, it will then be up to developers to make applications for consents according to the new guidelines we have produced. I cannot forecast the outcome of that process.
Baroness Sheehan (LD)
My Lords, who in government is responsible for collecting the data on spillages from the oil and gas industry operations in the UK? Scope 3 emissions take account primarily of greenhouse gas emissions, but they also take account of pollution. How do the Government deal with pollution, particularly in marine protected areas due to those spillages?
Lord Hunt of Kings Heath (Lab)
My Lords, in relation to the North Sea, the Offshore Petroleum Regulator for Environment and Decommissioning has an important role to play in the work that is undertaken on oil and gas. Of course, we have wider environmental law. Defra has a role to play. The Department for Transport—obviously, in relation to the tragic incident that has taken place—also has a role to play. On the point the noble Baroness raised, there has to be a cross-government approach to protecting biodiversity and the health of our seas. My department certainly plays its part in that.
Lord Mackinlay of Richborough (Con)
My Lords, I declare that I will become the director of the Global Warming Policy Foundation from next month. Have the Government assessed the amount of lost investment, lost jobs, lost tax revenue and lost balance of payments costs in the unwelcome approach that we take to new gas and oil in the UK? We are simply substituting supply with that of our foreign competitors, notably Norway, Qatar and the US. Into the future, that could be domestic.
Lord Hunt of Kings Heath (Lab)
My Lords, as an avid reader of the Daily Telegraph, I was of course well aware of the noble Lord’s appointment. I heartily congratulate him on it and welcome him to our debates on energy. However, he is wrong. The best way to proceed is the way we are doing, by ensuring that we grow home-produced, clean-power energy. This is the best way to grow the economy. As for investment in the North Sea, the very fact that we are producing a consultation on environmental impact assessment and last week produced our consultation in relation to our policy of issuing no more licences gives clarity to the industry in which investment can continue to take place.
Climate Change
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Baroness Sheehan
To ask His Majesty’s Government what steps they are taking to promote action against climate change internationally following reports that 2024 was the warmest year on record globally.
The Minister of State, Department for Energy Security and Net Zero (Lord Hunt of Kings Heath) (Lab)
My Lords, the Government are committed to driving forward action on climate change. At COP 29 we announced an ambitious target to reduce emissions by at least 81% by 2035, and we will continue to urge other countries to be as ambitious.
Baroness Sheehan (LD)
My Lords, last December the Environment and Climate Change Committee, which I chair, published its report on methane, a greenhouse gas 80 times more powerful than carbon dioxide in its first decade. It is quite extraordinary that fully one-third of the global warming seen to date is due to methane, but methane is short-lived and its potency reduces rapidly, so we could slow near-term warming by cutting global methane emissions. Under UK leadership at COP 26 in Glasgow, the global methane pledge was signed, thanks in no small measure to the leadership of the noble Lord, Lord Sharma, who I am pleased to see in his place.
Baroness Sheehan (LD)
It is coming. It committed us to work with others to reduce global methane emissions by 30% by 2030. So can the Minister justify why, in their response to the Methane: Keep Up the Momentum report, the Government ruled out publishing a methane action plan for the UK, a key requisite for global climate leadership?
Lord Hunt of Kings Heath (Lab)
My Lords, the noble Baroness will know that we welcomed the report of her committee. We have provided a full written government response, including how we will support internal action to deliver on the global methane pledge. She will also know that we have included methane policies in our delivery plan for carbon budgets and will contribute towards the global methane pledge. I think that shows decisive action, and we are going to take strong international leadership to deliver against that pledge.
Lord Sharma (Con)
My Lords, decarbonising energy systems is a key way for countries to cut their emissions. The UK, alongside other developed nations, has supported developing countries, such as South Africa and Vietnam, to set up just energy transition partnerships to mobilise public and private finance to help those nations have cleaner energy. Will the Minister confirm that the UK will continue to support those partnerships? Will he tell the House how much UK climate finance has been deployed to support them?
Lord Hunt of Kings Heath (Lab)
My Lords, I pay tribute to the noble Lord for his work in this very important area. Of course, we are committed to international climate finance and to the £11.6 billion in the current spending review. By implication, I think he is asking the question he asked my noble friend the Leader last week about the impact of the reduction in the overseas aid budget. It is too early to be able to respond to him, and clearly we also have the forthcoming SR discussions, but the Prime Minister, in announcing the decision to the House last week in relation to the defence budget, said that the UK
“will continue to play a key humanitarian role in Sudan, Ukraine and Gaza, tackling climate change”.—[Official Report, Commons, 25/2/25; col. 633.]
The Earl of Devon (CB)
My Lords, I watched the play “Kyoto” last week, which tells the story of the birth of the climate change strategies that we currently adopt, and particularly the role of the oil and gas companies in resisting those developments. I noted that on the following day, BP announced that it is reversing its strategy to support renewable energy and refocusing on oil and gas. What steps will the Government be taking to discuss this matter with BP and to get our national flagship energy company to reverse that decision?
Lord Hunt of Kings Heath (Lab)
My Lords, clearly, these are matters for individual companies to decide, but I say to the noble Earl that notwithstanding individual decisions made by such companies, overall, we are seeing a massive expansion in renewable and low-carbon energy throughout the world. Of course, the Paris Agreement and the nationally determined contributions that countries are making towards it will spearhead the move towards a low-carbon, low-emission economy. Whatever setbacks there may be, we must continue to work on that basis.
Baroness Jones of Moulsecoomb (GP)
My Lords, do the Government agree with Bermuda and countries that are suggesting a tax on kerosene jet fuel? It is a pollutant that is currently untaxed, and the idea is that the money from that tax should go into a fund that poorer countries can access in order to set up their own renewable energy systems.
Lord Hunt of Kings Heath (Lab)
No, my Lords, I am not aware that the Government are looking at that suggestion favourably. However, the offer we made at COP 29 for an 81% emission reduction by 2035 is a very substantive offer indeed. We need to work towards that. We also have to work towards the seventh carbon budget. We received the advice on how we will do that from the Climate Change Committee only last week, and that is where we should focus our efforts.
The Lord Bishop of Norwich
My Lords, on this World Wildlife Day, the day that the United Nations marks the adoption of the CITES—the Convention on International Trade in Endangered Species—and given that climate change is having an impact on rare and endangered species and the habitats that support them, making them rarer and more endangered, even extinct, and driving up their illegal value, will the Minister allow us to hear a little bit more about how His Majesty’s Government are working to ensure that their obligations under the CITES are met?
Lord Hunt of Kings Heath (Lab)
The right reverend Prelate is absolutely right to identify those issues. It is worth making the point that the World Meteorological Organization has recently confirmed 2024 as the warmest year on record. I also refer the right reverend Prelate to the UN biodiversity summit in Rome on 25-27 February, where key decisions were agreed on resource mobilisation, monitoring and review of the global diversity framework. On his specific question, I will follow up with a letter.
Lord Offord of Garvel (Con)
My Lords, China is top of the league table for global CO2 emissions, accounting for roughly a third of the total. In contrast, the UK’s share is a paltry less than 1%. In the last year alone, China had more coal capacity in construction than at any point in the last decade and, as a result, China’s industrial energy prices are seven times cheaper than the UK’s. Today, respected economics professor Gordon Hughes has said that the UK Government’s drive for net zero at any cost will add £900 to annual household costs. While we play the good little boy scout on net zero, does the Minister believe that this is an equitable trade-off for the British public?
Lord Hunt of Kings Heath (Lab)
There clearly is, my Lords, because the way to get away from the volatility of the international gas market, which has had such an impact on energy prices in this country, is to move towards homegrown energy security. That is what we are designing to do with clean power. NESO has confirmed that this is the best way for us to invest our resources in energy. In relation to the global situation, global investment in renewables in 2024 reached $2 trillion, as against $1 trillion in fossil fuels. We have to combat and react to climate change, and the only way we can do this is to decarbonise as soon as we possibly can. I am proud that the UK is a global leader.
Earl Russell (LD)
My Lords, in light of Trump’s denial of climate change, it is vital that the UK continues to provide international leadership and, in particular, support for international climate science at this time. What work are the Government undertaking to support international climate science, and particularly American scientists?
Lord Hunt of Kings Heath (Lab)
My Lords, from what I have already said, the UK is a global leader. We are working with many other countries. In relation to climate science, obviously I understand the point the noble Earl is raising. Clearly, we need to ensure that the integrity and power of climate science continue. These are matters that we will be considering over the next few months. We need to set out policies in relation to delivery of the fourth, fifth and sixth carbon budgets, and we have to respond to the advice from the Climate Change Committee in relation to the seventh carbon budget. Clearly, the whole context in which we do this is having very good climate science.
Warm Home Discount
Lord Hunt of Kings Heath Excerpts(1 month ago)
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Earl Russell (LD)
My Lords, I welcome this Statement—in particular, the clear commitment to provide a one-off payment for next winter. These payments will help with continued rising household energy costs, as the energy price cap has risen again by 6.4%. Until we break our dependence on gas for 30% to 40% of our electricity generation and 85% of our home heating, we will remain at the mercy of the volatile international markets.
Indeed, households are set to pay over £800 more per year for their energy compared with the winter of 2020-21—a 77% increase. The UK has spent £140 billion on the international gas market since the war in Ukraine started, for no long-term energy security or reduction in the energy bills being paid. That is 10 times the total GB Energy budget to date.
We have 6 million households living in fuel poverty today, and most of them have been for some time. We have some of the worst-insulated homes in Europe and some of the highest energy bills. High energy bills are a continued legacy issue and are, in part, a direct result of the last Government’s failure to do more to transition to renewable energy earlier. Progress is being made on the transition and we welcome this.
The Climate Change Committee is absolutely clear and unequivocal. Politicians who oppose action on net zero will make their constituents poorer by driving up their energy bills. Although we welcome these measures, we ask the Minister to go further and introduce this much-needed help now, to provide help for those who need it now, and not to make people wait until next winter.
We also call on the Government to scrap the energy price hike for the nearly 10 million pensioners who lost their winter fuel payment and to provide more help to other vulnerable groups, particularly those with disabilities. The estimated cost is about £130 million. We also call on the Government to ensure that all energy companies sign up to a single social tariff as soon as possible, to provide a long-term, stable mechanism for helping to reduce fuel poverty.
We need to do more to smooth the energy price costs as we drive over the energy transition speed bump in the road ahead. We have constantly called for an emergency 10-year home insulation programme. Domestic home heating is still 77% gas powered. We need a huge and urgent increase in the number of heat pumps installed.
Finally, I want to ask about long-term reforms and for some clarity on the direction of travel on measures to reduce our energy bills, and in particular about electricity market reform, which feels like an idea whose time has come. Does the Minister agree? When can we expect progress?
Our electricity prices are linked to the global fossil fuel market. Natural gas prices thus set the UK market electricity price. Will this Government look at the option for decoupling electricity market structures so that we have one rate for gas and one for electricity? Is it not time to stop the artificial inflation of the price of our home-generated renewable electricity, so that the savings can be passed on to our bill payers?
Will the Government publish reports on these matters? Will they also look at reforming contracts for difference?
I am disappointed that we do not have consensus on climate change, but my hope is that we could have consensus on electricity market reform as a measure to save bill payers money.
The Minister of State, Department for Energy Security and Net Zero (Lord Hunt of Kings Heath) (Lab)
My Lords, I thank noble Lords for their comments on the Statement on the warm home discount. The noble Lord, Lord Offord, is right, of course, that this comes as there is an increase in the energy price cap. In a sense, we are repeating the debates we have had over the last few months.
The noble Lord, Lord Offord, talked about the Government having an ideology. But it is not an ideology; it is about the stark facts of climate change, the impact it will have on us and the lessons we learn from the Russian invasion of Ukraine and the impact that has had on our energy security.
We believe that the way to proceed is to move to home-grown clean energy as soon as possible. It is interesting to see the change in stance of the Opposition. After all, it was the noble Lord’s party that took through legislation enshrining net zero by 2050. There is the work of the noble Lord, Lord Deben, who chaired the Climate Change Committee for some 10 years with great distinction, the work the then Government did on COP 26 in Glasgow, and the growth in the green economy over the past few years. It is a pity that we seem to have lost that consensus.
The noble Lord will know that Governments never speculate on future energy prices, but we have said that we are determined to cut bills as far and as fast as we can and that a figure of up to £300 by 2030 remains our objective. On levies, of course, policy costs associated with bills are expected to increase over time and clearly, the last Government used levies extensively, but as low-carbon capacity expands—renewables, CCUS, nuclear-hydrogen—those costs will drive reductions in electricity wholesale prices. It is worth reflecting on the advice we have just received from the Committee on Climate Change on the seventh carbon budget, because that makes a similar point: although there are some initial clear up-front investment costs, in time the benefits of having cheap renewable energy will come to the fore in terms of the costs that have to be borne by the consumer and by businesses.
I very much agree with the noble Earl, Lord Russell, on the net zero policies that need to be taken forward. He is absolutely right about the challenge we face with our housing stock, and the requirement to do everything we can to help transform it. He will know that we have the Warm Homes Plan. We have already kick-started delivery of it with an initial £3.4 billion over the next three years towards heat decarbonisation and household energy efficiency. We published a consultation in February this year on improving the energy performance of privately rented homes, and we have announced a raft of policies to support heat pump uptake. However, there is a long way to go, and it represents a major challenge.
On a social tariff, we are working closely with other government departments to unlock data that will enable us to target support more effectively to those who need help with their energy bills. My honourable friend the Minister for Energy Consumers is leading a working group with Energy UK and other stakeholders to see how we can take further sustained action on improving the affordability and accessibility of energy.
On energy market reform, the noble Earl’s point is well taken. We are launching a comprehensive review of the energy regulator Ofgem. We want to establish Ofgem as a strong consumer champion, driving up standards for households and business consumers, both now and as energy use evolves with smart and green technology. That should not be taken as criticism of Ofgem; it is more that we see future potential to develop Ofgem’s role.
On reform of the market more generally, we are considering two key reform options to enhance the efficiency of the electricity market by strengthening locational price signals better to match supply and demand—either a reformed national pricing model, or zonal pricing. This work is being undertaken. I take the noble Earl’s point about the relationship between electricity and gas, and we are looking at that issue too. On the overall position of price to business/price to consumers, in the long run, we must charge on with our aim to get clean power as quickly as we possibly can. That is the way to get long-term stability.
Baroness Young of Old Scone (Lab)
My Lords, I welcome the Statement about the measures that the Government are taking to help hard-pressed families keep warm and to alleviate fuel poverty.
I want to make just two points. On the electricity market reform, I would press the point made by the noble Earl, Lord Russell. Governments have been talking about electricity market reform for over two years now. The link with the gas market has become so dysfunctional that I must press the Minister for some urgency on this.
I would also like to raise a question on an area that is not covered by the Statement but is a vital part of ensuring that people do not remain in fuel poverty: new-build homes. We are going to build a considerable number of new-build homes, and the future homes standard 2025 is about to be introduced on a serial basis, but it rather misses the opportunity of going further. All new homes should not just have heat pumps and improved ventilation and insulation but should come fully equipped with solar panels, a battery wall and an electric vehicle charger.
Putting those in at the beginning may mean a small increase in a house price but trying to retrofit them immediately afterwards means a big sum for many households. Can the Minister give us some assurances about pressing the pace on electricity market reform and geeing up the future homes standard?
I advise the Minister not to be upset when the volume housebuilders make a song and dance about this. They made a huge song and dance in the middle of the last decade about energy-efficient and zero-carbon homes. The Government seemed to be about to ignore that and the housebuilders got on with getting ready for zero-carbon homes, but then, at the last minute, George Osborne pulled the rug out from underneath that. This Government can, perhaps, do rather better at facing up to the reality of needing these homes built to the highest possible standards.
Lord Hunt of Kings Heath (Lab)
My Lords, those two points from my noble friend are well made. On what is, in essence, mandation in relation to new homes, these points have been strongly put to my department. We are still in discussions across Whitehall in that regard, but I very much take and understand the point that she raises.
In relation to energy market reform, my noble friend urges me and my colleagues to get a move on. Our publication in the autumn has made significant progress in helping us to narrow down how reformed national and zonal pricing could be designed and implemented. We are working with stakeholders on the impact of these reforms. Clearly, they are pretty significant, but we are not delaying this. We have not put this into the long grass; we understand the importance of it.
Great British Energy Bill
Lord Hunt of Kings Heath ExcerptsTuesday 25th February 2025
(1 month, 1 week ago)
Lords ChamberRead Full debate Great British Energy Bill 2024-26 View all Great British Energy Bill 2024-26 Debates Read Hansard Text Watch Debate Read Debate Ministerial Extracts Amendment Paper: HL Bill 71 Running list of amendments – 20 February 2025 - (20 Feb 2025)
“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.
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.