Energy Bill Relief Scheme (Non-Standard Cases) Regulations 2023

Lord Lennie Excerpts

Monday 30th January 2023 Grand Committee

[Lord Teverson (LD)]

My Lords, again, this instrument came into force on 12 January and we are now more or less into February. Can the Minister remind us when the scheme ends, because we must be getting quite close to that?

I have only one question on this, and I will not ask the one about prosecution, because these are large amounts of money; I would have thought it was more important. According to the Explanatory Note on page 11,

“Regulations 3 and 4 provide the Secretary of State with a power to obtain information about the supply of gas or electricity to persons who are or may be eligible for assistance under the Scheme.”


I am interested in whether the Minister’s officials have done that, and how they found it.

[Lord Lennie (Lab)]

My Lords, this requires energy providers to share information with the Government, such as meter readings and contract agreements, to allow BEIS to ensure that appropriate relief can be passed on to businesses that are not eligible for the energy bill relief scheme because their energy is supplied by the grid, not from a licensed supplier. The current energy bill relief scheme, announced in September, comes to an end in March 2023. It supports businesses and public sector organisations such as schools and hospitals, and so on, by providing the discount on wholesale gas and electricity prices.

First, this instrument applies only until March 2023; it has been in effect since September without this information. How much relief has not gone to the relevant businesses in this time period? What impact will this error have had on these businesses and how long will it take the Government to gather this information, analyse it and enact the required changes?

The Government have announced a new energy bills discount scheme, the EBDS, from April 2023 to April 2024 for eligible non-domestic customers in Great Britain and Northern Ireland. Is the error that occurred in the original scheme now fixed so that, from day one, the EBDS will be fully effective?

--- Later in debate ---

[Lord Teverson (LD)]

They are not even fined; they just get the money back plus the interest.

[Lord Lennie (Lab)]

I agree; there is no penalty at all. They just have to pay back the money to the individual that they should have paid in the first place, plus a bit of additional assistance.

[Lord Callanan (Con)]

I again thank the noble Lords, Lord Teverson and Lord Lennie, for their contributions. As both noble Lords have said, the EBRS Great Britain and Northern Ireland regulations are already in force and delivering support to organisations across the United Kingdom. However, the Government have responded to the concerns of stakeholders to ensure that a further group of non-domestic energy consumers, including some critical to national infrastructure, can also receive support to avoid decreases in production or, even worse, the closure of some businesses. These regulations are essential secondary legislation which is needed to support the delivery and operation of the EBRS non-standard scheme.

The Government remain committed to taking decisive action during this energy crisis to assist the widest possible range of consumers. As well as providing immediate assistance, this relief will support economic growth and limit inflation caused by increasing energy bills and their knock-on impacts on prices, labour, goods and services. We are confident that providing relief via the non-standard cases scheme will help mitigate the risks of closures and redundancies among eligible businesses and ensure that they can continue to operate.

The scheme has been designed to operate robustly and guard against fraud, error and gaming. We will continue to monitor it to ensure that this support is provided to the businesses it is designed to help. The Government remain committed to ensuring that consumers receive help with the rising cost of energy. The regulations are vital in ensuring that support is delivered to those businesses.

I turn to the questions asked by both noble Lords. The noble Lord, Lord Teverson, asked whether the scheme will run for the same period as the standard EBRS. Yes, it runs from 1 October to 31 March. He also asked about passing information to the Secretary of State—whether the department has done this and how it found it. So far, we have found that energy suppliers are providing the information we require to support their claims in a timely manner, which ultimately supports their own customers and end-users.

The noble Lord, Lord Lennie, asked why it applies only until March 2023; that is, the same finishing date as the existing EBDS. Of course, there are substantial costs on the Exchequer. I am sure the Chancellor keeps all these things under review, but at the moment, the scheme ends at that point. The noble Lord also asked whether the EBDS will be fully effective after the EBRS is ended. I assure him that many civil servants in my department are working to ensure that that is exactly the case and that there is a smooth transition between the two schemes.

The noble Lord also asked whether a mistake has been rectified with EBRS. It was not a mistake. We identified that there was a group of businesses supplied with energy by unlicensed suppliers and we have set up this scheme to provide support for those businesses which did not benefit when others benefited because they receive their energy through licensed suppliers. We stood up the scheme as quickly as we possibly could, given all the demands that have been placed on the department from all the other schemes as well.

In response to the noble Lord’s questions about intermediaries, we believe that in those cases, energy providers are working closely with their end-customers to ensure that they are all offered support. Of course, in many cases, these are very big businesses, and we have direct communication with many of the end-customers. Normally, we do not have a problem making sure they realise their eligibility, but we are of course seeking to provide as much information as possible to ensure that they are aware of their rights—although, in those cases, I am sure they are well aware of them themselves.

I think I have dealt with the questions from both noble Lords, and I therefore commend the regulations to the Committee.

Energy Bills Support Scheme and Alternative Fuel Payment Pass-through Requirement (Northern Ireland) Regulations 2023

Lord Lennie Excerpts

Monday 30th January 2023 Grand Committee

[Lord Teverson (LD)]

My Lords, I thank the Minister for going through yet another of these SIs. I am sure he will not mind if I ask him some just and reasonable questions about it.

First, I note that the measure came into force on 12 January, so it is already in place. Obviously, it is administered, to a degree, by the energy companies, but who is policing it? Is it the Northern Ireland civil servants, or is it BEIS directly? I would be interested to understand that. If it is Northern Ireland officials, are we confident that sufficient management governance will take place from here?

I welcome that the Government and the department have spoken at length to consumer organisations in Northern Ireland. I am interested to understand whether there have been any complaints yet of end-users not receiving this when they feel that they should have, to get some idea of how well it is working.

The Minister talked about the method of civil law, and having fines—plus, generously, an interest-rate benefit if people manage to get through a whole court process. We have said before that it is very unlikely that much of that would happen, but, if an intermediary ignored the need under this legislation to pass on those payments, would the Government have the ability to prosecute that person? I can imagine there being a certain number of landlords who will just think, “No one’s looking at me, there’s not a lot of publicity about this, I’ll just keep the money”. I would be interested to understand whether there is, at the end of the day, a criminal long-stop prosecution ability in terms of fraud and so on. Also, will the Minister say how many more SIs around these schemes are still to come?

[Lord Lennie (Lab)]

My Lords, I thank the Minister for introducing this scheme. If he feels a bit of déjà-vu, it is because we have already been here. We discussed this on the UK scheme. This scheme is to ensure that support provided to intermediaries on behalf of the end-user in the energy bill support scheme and the alternative fuel payment in Northern Ireland must be passed to the intended recipients. This is welcome and important, but there are questions about what difference the instrument will make to intermediaries if they do not do it.

The Explanatory Memorandum states:

“Relevant intermediaries are any individual that is party to a domestic electricity contract … and passes on the costs of the energy supplied under this contract to an end user of the energy supplied … Intermediaries should pass on the discount irrespective of how the end user pays for their energy use … If an intermediary does not pass through the whole of the scheme benefit provided to them, then they must demonstrate to the end user that the amount they are passing on is just and reasonable, including taking into account the extent to which the intermediary’s charges to end users reflect the increased cost of energy as a result of the energy crisis.”


The Minister said that intermediaries include landlords. They do indeed, but they also include sublets, student accommodation, social housing providers, local authorities, site owners, site managers, marinas for onshore power, combined heat and power operators, electric vehicle charging operators and other residential building managers. It is possible for an intermediary also to be an end-user because they can live in the scheme that they manage. Given the variety and range of intermediaries and the complexity of this calculation, will it have any impact on the number of intermediaries that do or do not pass the benefits through?

The Explanatory Memorandum also states:

“The intermediary must, within 30 days of a scheme benefit being provided, provide information to the end user in writing ... The intermediary must ensure the end user receives the pass-through amount as soon as reasonably practicable ... Where an intermediary fails to effect a pass-through to which an end user is entitled, that end user may recover the amount from the intermediary as a civil debt.”


How many end users will be aware of this? How many will know about this scheme at all? If I am a landlord, is it worth the risk of not passing it on and sitting and waiting to see what happens? If I do not get any orders to justify, I can just keep the funds. It is a small amount of money to a court—a maximum of £600—but to a landlord who may have multiple lettings, it can be a considerable amount of money. Do the Government expect end users will do this for £600? Will fees make it not worth while for them to do it? How will intermediaries be disincentivised from taking this gamble? There is no penalty if you are found not to have passed on the money. Intermediaries are just ordered to pass on the funds in the scheme, plus 2% above interest rates. It does not seem to be a huge gamble that the intermediary might be taking. Will the Government not be enforcing this in any way? As the SLSC said, there is inequality of arms. It almost encourages intermediaries to take a chance, and the victims are the tenants and the end-payers of the scheme.

Electric Vehicle Battery Production

Lord Lennie Excerpts

Monday 23rd January 2023 Lords Chamber

[Lord Lennie (Lab)]

My Lords, 12 months ago, £100 million was made available by the Government to Britishvolt to help unlock the necessary private finance and the company’s future. Ministers were falling over themselves boasting about how they were supporting 3,000 highly skilled direct jobs and a further 5,000 jobs in the supply chain in the north-east of England. But the money never materialised, and we all now know the consequences. Does this signal the end of the Government’s green industrial revolution, at the expense of these jobs and the key role they would have played in the electric vehicle industry and the wider decarbonisation of the UK’s economy?

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

No, is the short answer to the noble Lord’s question. Of course, before we make any government money available, we do the appropriate due diligence. As a result of this work, the funding was designed so that agreed milestones had to be achieved for the company to draw down substantial amounts of taxpayers’ funds. In the event, it was not able to meet those milestones, so the money was not handed over. I am sure the Opposition would like us to be careful with public money. If the alternative had happened and we had handed over the funds and the company had still gone into administration, I am sure the noble Lord would have been on his feet demanding an inquiry into why we had been so careless with public funds.

Energy Bill [HL]

Lord Lennie Excerpts

Committee stage
Monday 16th January 2023 Grand Committee

[Baroness Worthington (CB)]

My Lords, I must start with an apology. My train was delayed for 45 minutes and many others were cancelled, so I am just about here on time. I thank my noble friend Lord Ravensdale for stepping in just as we started.

I am delighted to be here to speak to the amendments in this group which relate to the part of the Bill that seeks to take further powers to ensure that we have fuel resilience in our country. Amendments 213 to 219 seek to extend the scope of the Government’s proposals so that we have a more inclusive definition of fuel resilience beyond oil and liquid biofuels that includes gas.

The measures in this clause are a set of broad powers to allow the Government to ensure that economic activity in the United Kingdom is not adversely affected by disruption to core fuel sector activities, reducing the risk of emergencies affecting fuel suppliers. They give powers to the Government to issue directions for the purposes of managing risk, reducing potential adverse impacts and facilitating recovery from disruptions to core fuel sector activities.

The powers given to the Government by the Bill are extremely wide and potentially concerning, but I will come on to that. In essence they allow the Secretary of State to direct any core fuel sector participant to do anything for these purposes. More reasonably, they also allow the Secretary of State to require information and that certain types of incidents be reported. Leaving aside the wide-ranging nature of the powers for now, we have tabled these amendments to inquire why the definition of fuels excludes gas from the resilience proposals. I am sure I will be told that a draft version of the Bill was shared with the BEIS Select Committee, that no reference was made to gas as a core fuel and no complaints were made at that point. However comments from the committee in November 2021 were informed by the fuel shortages of autumn 2021 and since then we have seen a sharp spike in gas prices and some constraints on the supply of gas, which were exacerbated by the invasion of Ukraine. I should note that in 2021 the UK imported around 60% of its gas for use in all sectors. Although we have North Sea gas, we are by no means self-sufficient, so interruptions to fuel supplies raise problems. Gas is the sector where we remain very exposed—but that is certainly not true of biofuels. If we compare the two, the volumes are completely different and it seems odd to include biofuels but exclude gas.

Helen Thomas wrote last week in the Financial Times:

“The Rough offshore gas storage facility, partially reopened … by Centrica”


last year after having been closed for five years,

“has been steadily withdrawing gas … At about 54 per cent full … it is far from the 80 per cent-plus levels on the continent. And European storage capacity … is about 25 per cent of annual consumption compared with less than 1 per cent for the UK”.

That is equivalent to only three days, so we can see how tight some of these margins might be if there are disruptions. That could have left the country very short, especially had this winter’s weather been harsher than it has been.

Rough is not being refilled because the facility is being operated on a merchant basis rather than the strategic one which the Government might perhaps prefer. Whereas Governments in Europe can mandate storage, here, we are relying on Centrica to find a place where future prices make sense to it commercially to take storage into Rough, and it is of course looking for a decent return rather than strategic fuel resilience. The journalist added that no one thinks that storage operated on this basis will provide security of supply, and I tend to agree. I would be interested in the Minister’s thoughts on this question and on what more the Government could and should be doing to include gas in their fuel resilience strategy and indeed in this legislation.

It seems sensible that we would want the same powers, should we need them, to issue directions and to require reporting of incidents and the provision of information. Had we experienced a more severe winter, we could have come seriously unstuck, and I would like to understand how the Government would have intervened to ensure that critical businesses and households were prioritised. That is obviously an issue of some concern to the Government, given that these powers are being taken. Do the Government already have the necessary powers? If so, where are they and how would they work? I would be interested to hear more about that.

I have tabled Amendments 220 and 221 because I am seeking clarification and expressing concern about the wide-ranging nature of the types of financial assistance the Bill will allow. Certain types may be required, but why does the Secretary of State need powers to make grants, effectively, to firms involved in refining, transporting and storing fuels that are commercially very lucrative? We have all seen the headlines about how much money these companies are making, and it seems odd to take such a broad power, which could mean that public money was being spent with no requirement to pay it back to the public purse. It seems unnecessarily broad, providing the equivalent of a grant, and I would like to understand the justification for it. When looking ahead to the transition to net zero, we have described how we need to provide more public money, but it is right to say that investors in the current fossil-fuel-based energy system should have enough resources to ensure that they can meet regulations set by government without the need for further public money. That is a point that needs answering.

This is also arguably a sector that we would expect to go into managed decline as we look to electrify most of the demand being met by the current provision of these fuels, so it may be appropriate for assistance to be given. Transition loans, guarantees or even the Government taking a stake could be required to make the transition happen swiftly and in an orderly fashion, but simply giving out public money with no strings attached seems rather reckless. I would like to understand the specific circumstances and conditions under which a grant would be appropriate. If that cannot be dealt with in detail here, I would be happy to receive a letter outlining a case study that could justify this use of public money, given the economic climate we find ourselves in.

Finally, Amendment 222 is a modest proposal relating to the reporting of such financial assistance to Parliament. I could not see any reference in the Bill to the notification of Parliament in relation to these financial forms of assistance—only in relation to the scrutiny of statutory instruments or guidance. Is it really the Minister’s intention that this assistance would not be made public until BEIS’s accounts are published, which would obviously be after the horse has bolted and we would have to comb through the footnotes to understand what forms of financial assistance had been given under Clause 222? I feel quite strongly that, if it is important enough to have its own separate regime, it should be important enough to brief Parliament and there should be a protocol for notifying us of the intention to use these powers.

I have drafted an amendment that I hope the Minister will accept. If not, I look forward to assurances from the Dispatch Box about how and when Parliament will be notified before the expenditure is committed. With those remarks, I beg to move.

[Lord Lennie (Lab)]

My Lords, we on these Benches are generally supportive of the amendments in the name of the noble Baroness, Lady Worthington, but I would like to ask the Minister about some specifics.

Three key powers are taken under the Bill: the direction-making power, the information power and the financial assistance power. I am particularly interested in the information power. The government fact sheet states:

“The information required from industry will be limited to what is necessary and Government will work with industry to minimise any administrative burden incurred.”


What practical protections will be in place to ensure that this information is limited in this way, and what, in practice, is meant by:

“Government will work with industry to minimise any administrative burden incurred”?

I would welcome a response to those questions. If the Minister cannot answer today, writing will do.

--- Later in debate ---

[Lord Teverson (LD)]

My Lords, I shall be brief. When I first read this clause I assumed it was effectively to give permission to go out to sea from land, like some coal mines. I am interested to know whether that was the Government’s intention.

I was also quite interested that the site has to be partly in territorial waters. Territorial waters go out to 12 nautical miles, so that seems to suggests that it does not. I wonder why there is the stipulation that the site has to be partly in territorial waters. It seems to me that if this is done it really needs to be within territorial waters. I have no other questions.

[Lord Lennie (Lab)]

My Lords, I will also be brief. I do not want to provoke another debate—two hours on this would be unnecessary. We are all doing our bit by keeping this Room at low temperature in terms of this debate. I do not know whether they can turn the heat up a bit, as I think that would be helpful to all of us.

[Lord Callanan (Con)]

The noble Baronesses, Lady Sheehan and Lady Bennett, are in charge of heating.

--- Later in debate ---

[Lord Lennie (Lab)]

Perhaps it is something like that.

The Government state that the best means to manage hazardous nuclear waste in the long term is in GDF undersea burial sites. Can the Minister tell us how they have concluded that that is the best possible means? Clearly we have plenty of it and we will have plenty more. We support nuclear power and nuclear generation as part of the overall mix of energy fuels to supply the UK—there is no question about that. However, dealing with hazardous waste is an important matter that we would like some information about.

[Baroness Bloomfield of Hinton Waldrist (Con)]

I thank the noble Baroness, Lady Bennett of Manor Castle, for the opportunity to debate and discuss Clause 230.

This clause relates to geological disposal facilities. We have spoken about this often in the Chamber during Questions. GDFs are highly engineered facilities capable of isolating and containing radioactive waste within multiple protective barriers deep underground, so that no harmful quantities of radioactivity ever reach the surface environment.

The Government consider a GDF to be essential to the successful decommissioning of the UK’s civil nuclear legacy and our new-build nuclear power programme which will support the UK Government’s net-zero ambitions and their energy security strategy. The process to find a site for a GDF is under way, and it is therefore vital that we have a clear legal framework to ensure that such a site will be licensed and subject to oversight by the Office for Nuclear Regulation—the ONR.

On the noble Baroness’s point about disturbance, there is no evidence that any disturbances were caused by the specific seismic studies undertaken on behalf of Nuclear Waste Services. We have not seen any, and none has been drawn to our attention, but if the noble Baroness has other information, obviously we would be very grateful if we could see it.

Clause 230 makes clear that certain nuclear sites, including a GDF once prescribed in regulations, located wholly or partly in or under the territorial sea adjacent to the UK require a licence and are regulated by the ONR. In answer to the noble Lord, Lord Teverson, I have no idea why it says “wholly or partly”; I take his point that it is a long way off to get to “partly in our territorial waters”. However, presumably that is a drafting necessity.

The GDF siting process is a consent-based approach which requires a willing community to be a partner in the project’s development. Four areas have entered the siting process: three areas in West Cumbria—in Copeland and Allerdale—and one in Theddlethorpe in Lincolnshire. This clause is intended to provide clarity to parties with an interest in the GDF process that a GDF in their community, whether located deep below the land surface or deep below the seabed, will be safe, secure and appropriately regulated by the ONR. I would like to be clear: no part of a GDF will be in the sea itself, nor will radioactive waste be dumped in the sea. That is banned by international conventions, including the London convention and protocol. Whether a GDF is built in the geological formations deep below the land surface or deep below the seabed, it will be accessed from facilities on land, and the waste will be isolated deep underground within multiple barriers to ensure no harmful quantities of radioactivity reach the surface environment.

I thank noble Lords for their contributions, I hope this has assured the noble Baroness of the Government’s intentions for this clause, and I hope she will feel able not to oppose that this clause stand part of the Bill.

--- Later in debate ---

[Baroness Bloomfield of Hinton Waldrist (Con)]

I turn now to the amendments in the name of my noble friend the Minister. The 2011 report by the noble Lord, Lord Hutton of Furness, started the Government on the road to the reform of public sector pensions. While the Public Service Pensions Act 2013 made a large number of reforms, it did not cover all public sector bodies, including those within the Nuclear Decommissioning Authority group. A proposed bespoke career average revalued earnings scheme was, following statutory consultation with affected NDA employees and a ballot of union members, formally accepted by the trade unions. The bespoke scheme is in line with the rest of the public sector. The reformed scheme still offers excellent benefits to its members. Notably, indeed unusually for other reformed schemes, it still includes provision for members to retire at their current retirement age. For nearly all, this will be 60.

The complicated nature of the pension schemes in the context of the statutory framework which applies to pension benefits across the NDA estate means, however, that specific legislation is needed to implement the new scheme. Amendment 227B provides the Secretary of State with the power to make secondary legislation designating a person who will be required to amend the provisions of a nuclear pension scheme.

[Lord Lennie (Lab)]

My Lords, I think we are out of order.

[The Deputy Chairman of Committees (Lord Lexden) (Con)]

My Lords, the amendment is Amendment 227B.

--- Later in debate ---

[Lord Hollick (Lab)]

I rise to speak to Amendment 242A, which my noble friend has just introduced. In the course of our inquiry into the net zero transformation, the Industry and Regulators Committee, which I chair, took extensive evidence about Ofgem’s remit and whether it should be amended to include a specific requirement to have regard to meeting the UK’s net zero emissions target.

Ofgem’s primary statutory duty is to protect the interests of existing and future consumers in relation to gas and electricity. This objective is to protect those interests taken as a whole, including their interest in the reduction of greenhouse gases and in the security of the supply of gas and electricity. This duty guides Ofgem when it is making decisions and trade-offs in the regulatory framework between the three objectives of decarbonisation, affordability and security of supply.

Many of our witnesses told us that the net zero target should be included explicitly within Ofgem’s strategic duties, not least because Ofgem’s responsibility for setting the price and affordability of energy must take into account the substantial level of costs of the transition to net zero which will have to be borne by consumers.

If there is no explicit reference to net zero, there is a danger that the decisions will be very short-term in nature, focusing on short-term costs for consumers and not the long-term costs of failing to achieve net zero and invest in the infrastructure necessary to achieve that. The Climate Change Committee agreed. It argued:

“Giving Ofgem a net zero responsibility”


will help it to

“think … strategically about the changes that lie ahead so that we can minimise the cost to the consumer in the long run.”

Jonathan Brearley, the CEO of Ofgem,

“said that Ofgem is open-minded about whether it should be given a primary duty to achieve net zero, arguing that ‘I and the board have been very clear that we see net zero as fundamental to our existing duty’ … noting that there may be a benefit to clarifying that.”

The impact of net-zero costs on consumer bills is, ultimately, a decision for the Government, not for regulators. The Government promised a strategy and policy statement setting out priorities for delivering a net-zero energy system to ensure that the supplies are available at the lowest possible cost—that was promised in 2022. They also promised to publish a fairness and affordability proposal by the end of 2022. Neither of those documents has yet been cited, and it is indeed unclear whether the consultations are actually taking place. There will be an opportunity in our debate on Friday on the report from the Industry and Regulators Committee for the Minister to enlighten us on the progress of those two very important pieces of work on strategy and affordability.

Without those two statements from the Government, Ofgem will struggle to reflect net-zero costs in its energy pricing; but there is no doubt that those costs will have to be reflected, and Ofgem should have a clear and explicit duty to do that. That is why the Government should accept the amendment, to make it plain to all parties that Ofgem has a strategic duty to take into account the very considerable short and long-term costs of the transformation of our energy system and challenge the Government should their guidance impose unaffordable or unfair costs on consumers. Perhaps the Government might find such an independent intervention from the statutory regulator a little inconvenient. It would be ironic if the regulator most responsible for regulating the journey to net zero is one of the only regulators which does have a specific responsibility in its remit.

[Lord Lennie (Lab)]

My Lords, I thank all noble Lords who have spoken, particularly the noble Lord, Lord Teverson, my noble friend Lord Hollick and the noble Baroness, Lady Hayman. I also support what the noble Baroness, Lady McIntosh, said and what the noble Lord, Lord Ravensdale, asked.

I will comment on how reforming the remit of Ofgem using the Energy Bill would achieve what we are trying to achieve in the amendments in my name and those of the noble Baroness, Lady Hayman, and the noble Lord, Lord Teverson. Ofgem’s remit has not changed substantially since 2000. It does not prioritise electricity decarbonisation in line with the Government’s recent legislation or stated ambitions; it has only a consideration of greenhouse gas reduction. As a result, Ofgem has been unable to reform substantially its working practices and regulatory frameworks in response to the Climate Change Act 2008 and the UK’s subsequent net zero ambition.

The Government have an opportunity to address that with the Energy Bill, and, while they have recognised the need to reform substantially the working practices of Ofgem in the past, they have done so through the creation of a strategy and policy statement—an SPS—for Ofgem. That urgent statement will be welcome; we note that, largely due to its complexity, it has not been published since 2020, when it was first proposed. It was consulted about in 2021, but we are still waiting for the statement to see the light of day. It seems to us that, to help with the Government’s net zero ambition, giving Ofgem the mandate to advance policies in support of net zero would be extremely welcome.

Industrial Action

Lord Lennie Excerpts

Wednesday 11th January 2023 Lords Chamber

[Lord Lennie (Lab)]

My Lords, I begin with a statement of the blindingly obvious—that this is an issue of the Government’s own making. Yesterday the Minister kindly wrote to me to update me on the Government’s proposals to legislate for minimum service levels, or “minimum safety levels”, as the Statement said a couple of times. I wonder what it is. Is it “service level” or “safety level”, and is there a difference between the two?

In his letter, the Minister said that:

“The Government also has a duty to the public to ensure their safety, protect their access to vital public services and to help them go about their daily lives.”


We can all agree on that, but the Government are failing in that duty. In November, close to 40,000 patients waited more than 12 hours in A&E for a decision to be admitted to a hospital department, an increase of 350% over the previous November. In the last week of 2022, more than one-quarter of ambulance patients in England queued in the back of ambulances to be admitted to A&E—that is almost 19,000 people. A week ago, the president of the Royal College of Emergency Medicine said that up to 500 people a week could be dying because of delays to emergency care, the worst he has ever seen. Yesterday an emergency medic described to the Independent newspaper how he had declared a man dead on the waiting room floor in front of his wife and members of the public after he collapsed, as the hospital had run out of beds and trolleys. These are not examples of the public’s safety being ensured, of access to vital public services being protected, or of people being helped to go about their daily lives; these are examples of the Government failing in their duty.

Strikes did not cause these situations, but the Government’s failure to prevent them are making these situations even worse. That is why this is not about public safety but about the Government playing politics to try to distract from the real issues—the economic situation that they have caused and the NHS staffing shortages. Excess deaths are at their highest levels since the pandemic peak, and the public is being put at risk every day due to the NHS crisis that the Government have presided over. The Government know that their plans will not work. What assessment have they made of the effectiveness of minimum service levels to reduce the number of strikes and disruption? The impact assessment for the Transport Strikes (Minimum Service Levels) Bill stated that imposing minimum service levels could “increase … frequency of strikes”. Is this no longer the case? Does the Minister accept that firing highly skilled employees in essential public services would be counterproductive and would exacerbate the problems that already exist?

The Government have also been disingenuous in their arguments about bringing in these provisions. The letter that I received from the Minister also said, as has been repeated on a number of occasions by the Government, that

“this package of measures will see the UK align with many countries across the world such as France and Spain that already have minimum service levels in place, to prevent large swathes of their economies being ground to a halt by industrial action.”

While it is true that western European countries, including France, Spain and Italy, require some essential public services to keep a level of activity, in practice, when there are strikes, these levels are most often due to mutual agreements between employers and unions. In Italy, for instance, employers often defer to unions in deciding these levels. On the Paris transport network, levels are the result of voluntary agreements. The last two occasions when the French Government used their powers to force striking workers to return to work were 12 years apart. But most of all, those countries, with the laws that the Government are bringing in in this country to solve strikes, lose vastly more strike days than does Britain. Is that what the Government are really trying to achieve?

As well as referring to other countries, the Statement referred to the International Labour Organization, yet the ILO requires compensatory measures and an independent arbitrator, as well as saying that minimum service levels can happen only in services when

“the safety of individuals or their health is at stake”.

Yet the Bill that the Government have introduced does not contain those measures and allows regulations to be made in relation to transport, education services and the Border Force.

If the Government know that they cannot make these regulations without breaching ILO rules, what is this other than performative politics? What the Government should be doing is sitting down at the negotiating table and hashing out long-overdue deals that are needed to maintain our vital public services. Does the Minister accept that the Government’s failure to negotiate with workers is worsening, and will continue to worsen, the performance of public services, including adding to waiting times in the NHS? When will they return to the negotiating table to try to clear up the mess they have made?

[Lord Fox (LD)]

My Lords, I thank the Minister for taking questions on the Statement and congratulate the noble Lord, Lord Lennie, on his contribution. I will try to focus my questions and comments on how the Minister expects this to work.

The coming Bill is interesting because it introduces the concept of a minimum service level. Of course, in the Bill, the actual levels of service are not defined—true to form, this Government will come back with secondary legislation to do that. Can the Minister give your Lordships’ House at least an idea of what criteria will be used to come up with the minimum service levels? Will they be the same right across the country or will, for example, rural and urban areas have different minimum service levels? These are important issues.

There is, however, a wider issue around service levels. Taking yesterday as an example—when there were no strikes, as far as I am aware—can the Minister tell your Lordships’ House whether the tens of thousands of people waiting weeks to see their GP were getting a minimum service level? Were the people across Britain waiting sometimes tens of hours for ambulances getting a minimum service level? Were the people trying desperately to travel by train from Manchester to London experiencing a minimum service level? This is the baseline from which this legislation is working, and it is clearly not good enough. The public expect and deserve higher minimum standards than they are getting today, and on every day when there are no strikes.

Instead of addressing this issue, which I would define as the Government’s duty of care, the Bill passes the onus on to individual workers in these sectors. It is not the Ministers, the bosses or indeed the union leaders who will be sacked if the Government’s standards are not met; it is individual workers. I want briefly to illustrate this. If the Bill is enacted, the Secretary of State will impose a minimum service level. In the event of a strike, employers will be required to identify named employees who will be mandated to work via a work notice. At that point, these individuals are deprived of their right to strike on pain of probable dismissal. That does not square with the Secretary of State’s statement that this does not infringe the right to strike.

I know the Minister, and I am sure that, in his heart, he knows that a different approach is needed to deliver the service levels we need in this country. First, as was mentioned by the noble Lord, Lord Lennie, we need to plug the huge hole in our public sector workforce. We literally need hundreds of thousands of new people in order to deliver the basic service levels we require. A serious Government would be working with everyone in every part of these vital sectors. Can the minister tell your Lordships’ House one thing in this legislation that will help to build a bigger, better workforce in this country? Of course, a necessary first step is sorting out the pay disputes.

Turning to the NHS, the Government have absented themselves from negotiating the pay round, citing the inviolability of the pay review body. This position would have more credibility had not the Government suspended the body as recently as 2018, instead negotiating directly to deliver the 2018-21 pay agreement. What has changed since 2018 that means the Government will no longer directly negotiate with workers on this issue?

The original Bill, over the summer, targeted only rail. As we have heard from the noble Lord, Lord Lennie, the impact assessment identifies more than a dozen risks and unintended consequences—not least, I hasten to add, the proliferation of sub-strike action such as overtime bans, which would cripple the NHS and is already crippling our rail services. The current Bill steps beyond the Government’s manifesto commitment and adds five more sectors. Given the differences between the two Bills, when will the Government publish an updated impact assessment?

Finally, I am sure it is extremely frustrating running a public service in the United Kingdom, but can the Minister tell us how many bosses actually asked His Majesty’s Government for this legislation? Can he point to any appetite for this beyond the Back Benches of his own party? As I said, we will take a practical approach to scrutinising this legislation when it comes to your Lordships’ House.

Energy Bill [HL]

Lord Lennie Excerpts

Committee stage
Monday 19th December 2022 Grand Committee

[Lord Lennie (Lab)]

My Lords, I thank the Minister and others who have spoken in this brief debate for bringing forward these amendments, as they represent necessary but foreseeable conditions for what is already a doorstep of a Bill. As the Minister said in his introductory statement, these amendments collectively show why and how heat networks and heat zones will be regulated and established.

In response to the noble Lord’s query, my understanding is that there are currently 14,000 heat networks, which represent 480,000 customers—about 2% of the total energy network. However, that percentage is predicted to rise to just under 20% by 2050. They will be a huge and significant part of the future energy market, and thus crucial in meeting net zero as they can unlock otherwise unobtainable and inaccessible large-scale renewable and recovered heat sources, such as waste heat. They are especially important for built-up areas, as they are the most effective way of accessing waste heat from industry and heat from rivers and mines.

There are currently no specific protections for customers of heat networks. A recent Competition and Markets Authority report said that while the majority of heat networks customers received a service comparable to that for other traditional customers, a significant minority did not. Higher prices and more frequent outages were just a couple of the highlighted issues. The CMA recommended regulating the sector, with Ofgem announced as the regulator and Citizens Advice and the energy ombudsman named as alternative dispute resolution bodies.

I have some questions for the Minister. First, on non-domestic customers, what steps do the Government envisage will be taken to draw the line between which of them will receive these protections and which will not? Secondly, while protecting these provisions, why have they come to us so late and to what extent were Scottish heat network customers not receiving equivalent protections under the initial drafting of the Bill? Finally, does this come into play only in a case where the powers in Clause 171 to designate GEMA as the licensing authority in Scotland are used?

[Lord Callanan (Con)]

I thank all noble Lords for their contributions to this brief debate. I acknowledge the point made by the noble Lord, Lord Teverson: it will be difficult for me to ask him in future to limit the number of Liberal Democrat amendments after tabling all these. I quite take his point there; all I will say is that I flagged up to noble Lords at Second Reading that these amendments would be coming forward. There will be more on other subjects, as I also flagged up at Second Reading, which are still being drafted and will be tabled as soon as possible.

I first remind noble Lords, in acknowledging the point made by my noble friend Lord Lucas, that heat networks will play a crucial role in the UK reaching its net-zero targets, as they are one of the most cost-effective ways of decarbonising heating, particularly in built-up areas, where it would be more difficult to have individual property solutions. Noble Lords will probably be aware that the Climate Change Committee estimated that around 18% of UK heat will potentially come from heat networks by 2050—up from around 2% currently—to support the cost-effective delivery of our carbon targets. However, the sector is currently unregulated.

The Bill will provide regulation for that sector and give Ministers a power to introduce, among other things, consumer protection rules and carbon emission limits on heat networks. The majority of heat networks are performing perfectly well and often run by local authorities, housing associations and others, but one or two small, private networks are abusing their customers. Of course, once you are connected to it, that is effectively a monopoly. You have no choice but to take your business elsewhere, so regulation is required in the sector.

I will now talk to Amendment 162. The Bill already allows the Government to control heating sources by providing for authorisation conditions to contain emissions limits; this is contained in paragraph 14(3)(f) of Schedule 15. By gradually lowering emissions limits, authorisation conditions will drive changes in the types of fuels and technologies used to power various heat networks.

Using emission limits allows for dynamic, ongoing regulation. I submit that mandating specific heat sources is a more limited approach that risks the Government and this House picking winners. The exact approach for implementing emission limits will of course be subject to further consultation with industry and stakeholders. Settling on a pathway ahead of that consultation would, at this stage, be unwise.

Removing whole fuel types risks ignoring other factors that will come into play, such as technological improvements, system efficiencies, varying fuel costs, the replacement cycle of generation assets, and the need for flexibility in a system to provide separately for back-up or peak demand.

The Government are of course committed to net zero by 2050, and we see heat networks playing a vital role in this. The Government wish for the Bill and its secondary legislation to ensure that the heat network sector thrives and expands and is not held back in this goal. Therefore, I hope that the noble Lord, on behalf of the noble Baroness, Lady Worthington, will feel able not to press the amendment.

--- Later in debate ---

Moved by

[Lord Lennie]

162YYYZA: Clause 175, page 144, line 28, after “State” insert “or the GEMA”
Member’s explanatory statement
This amendment would ensure that the GEMA may be designated as the regulator for heat network zones.

[Lord Lennie (Lab)]

I shall speak to just this amendment and be fairly brief. It would ensure that the Gas and Electricity Markets Authority was designated as the regulator for heat network zones. Those zones are fundamental to the scale of expansion necessary to achieve net zero. As we heard before, this in turn depends on local authorities having the right resources to deliver their responsibilities effectively. The amendment would ensure that the Secretary of State delegates to GEMA its authority status to act as regulator in this regard, as already described for heat networks. Essentially, they should expand them in the most efficient manner possible if we are to achieve net zero. Given Ofgem’s regulatory responsibility for zoning, as well as for the networks themselves, this would ensure a joint approach to get the best out of heat networks.

While the devil may be in the detail of the regulations themselves—we have heard about some of that already—the Opposition support the proposals in this group of amendments. Essentially, they are adaptable to changes. Monitoring and adapting to market changes will be vital, and we support the amendments in the names of the noble Lords, Lord Teverson and Lord Ravensdale, to which they will speak shortly. I beg to move.

[Lord Teverson (LD)]

My Lords, we move on to the zoning regulations. I very much agree with the amendment moved by the noble Lord, Lord Lennie. When I read through this section, I must admit that I found it extremely opaque in many ways. I will come to my own amendments in a minute, but perhaps the Minister can explain a few things to me. Clause 174(2) says:

“A heat network zone is an area in England”.


I presume that means that this is just English legislation, not for the rest of the United Kingdom, but it is very unspecific about what a network zone would be. I had assumed that it would be a single zone or single heating system, but it obviously is not. I am interested to hear from the Minister what a zone is likely to be in practice.

We then have a zone authority. Clause 175(1) states:

“Zones regulations may designate a person to act as the Heat Network Zones Authority”.


Again, as the noble Lord, Lord Lennie, pointed out, we have very vague ideas as to who this should be. I am interested to hear again from the Minister who the authority is expected to be.

Then we move on to zone co-ordinators. Who are they and what exactly do they do in comparison with the zone authority? Of course, in Clause 175(5), we have a list defining local authorities. I was delighted to see the Council of the Isles of Scilly, which I have represented in the past, there—all 2,000 souls are represented in that list. I would be really interested to understand from the Minister how all this works. Clause 175(4) says that the

“Regulations … may make provision for the Authority to require a local authority, or two or more local authorities”,


so it seems to me a very complicated landscape. I would be interested to understand how that jigsaw fits together.

Two of my amendments would change “may” to “must”; I just cannot see how it could remain “may” in those two places. The main thrust of my arguments is in Amendments 165 and 166. They are about making sure that the regulations are in line not only with the strategy and policy statement—which we have referred to many times already regarding the text of the Bill—but with, in particular, local authorities’ net-zero plans. A huge number of local authorities, as I know the noble Baroness, Lady Bennett, has pointed out, now have net-zero objectives and plans to back them up. We should give credit to that and include it in the Bill. My Amendment 166 is very much on the same area of the delivery of heat networks within zones and how they fit in with local net-zero energy systems.

As I said, it would be really useful to everybody to understand how this geography is meant to work. I suppose my question is: is this just too complicated or is there some logical method here that does not get in the way, and does not create a bureaucracy that gets in the way, of these systems?

--- Later in debate ---

[Lord Callanan (Con)]

They could be, but we do not want to designate a particular technology because it will vary from area to area and locality to locality. It is to be expected that heat pumps will play a part in heat network zoning. That would be the case but we do not want to be particularly specific.

[Lord Lennie (Lab)]

I thank the Minister and the noble Lords, Lord Teverson and Lord Ravensdale, for their contributions. I will assume that their questions have at least been addressed, if not fully answered. We might come back to them later; we shall see. On Amendment 162YYYZA, which would designate GEMA, the Minister said that there will be further consultation on who will ultimately become the designated body for network zones. Once that decision is made, will we hear about it? Will whoever has been designated that role be regulated or will it just be announced?

[Lord Callanan (Con)]

It will be set in the appropriate regulations. The bottom line is that we have not made a final decision at this stage.

[Lord Lennie (Lab)]

I beg leave to withdraw the amendment.

Amendment 162YYYZA withdrawn.

--- Later in debate ---

[Baroness Bloomfield of Hinton Waldrist (Con)]

My Lords, I beg to move Amendment 169 standing in the name of the Minister, my noble friend Lord Callanan, and will also speak to Amendments 170 to 172. This group of amendments considers the definitions set out in Chapter 1 under Clause 186 on “Energy smart appliances and load control”. Clause 186 sets out a number of definitions that are used in other clauses of the Bill relating to load control. These include permitting the creation of new licensable activities, the modification of licence conditions and industry codes for load control purposes, and the making of regulations for energy smart appliances.

Amendments 169 to 171 have two combined effects. First, by removing the reference to the “use, discharge and storage” of electricity, the definition broadens the potential scope of appliances captured. This is because the definition is now agnostic to the way in which the appliance interacts with electricity. Instead, we are now concerned only that there is a flow of electricity into or out of the appliance which can be controlled by a load control signal. The original formulation does not clearly capture local generation of electricity by an appliance—for example, solar panels—and we wish to capture this.

For the purposes of licensing load control, the relevant factor is the sending of a load control signal to an energy smart appliance, regardless of whether that signal is then received by the appliance. Therefore, the amendments make it clearer that the signal needs only to be sent to an energy smart appliance, not necessarily received, to be regarded as a load control signal.

Amendment 172 clarifies that a load control signal may not only be a signal that directly affects electricity usage by an appliance but one that affects the electricity flow into or out of an appliance, based on additional information that is available to the appliance. This means that the improved definition also captures a signal which can configure a device to change electricity usage, depending on additional information available to the appliance. For example, an appliance could be configured to increase its electricity usage if the price of electricity drops below a certain level.

I hope the Committee will agree that these are important amendments that deliver additional clarity in the definitions used.

[Lord Lennie (Lab)]

My Lords, we welcome the clarification.

Amendment 169 agreed.

--- Later in debate ---

[Baroness Sheehan (LD)]

My Lords, so much has already been said that there is little for me to add. I have put my name to Amendment 192.

The only thing I want to say is that the Government need to understand the strength of feeling across the Committee on the complete lack of emphasis in this Bill on something that is doable, that is within our grasp and that the Government have recognised needs to be done but have done nothing whatever to implement it. Noble Lords are trying to help the Government here by tabling what I think are very sensible amendments; I hope that the Government will take note of them.

We have had lots of briefings on this issue. There is huge depth of feeling in the communities of Britain on this. One of the NGOs that we received some briefings from, the UK Green Building Council—sorry, it is not an NGO; it is, however, a body that knows an awful lot about this matter—published a scorecard assessing the Government’s progress since they published their Heat and Buildings Strategy in October 2021. The council concluded that

“most of the Government’s proposals or plans fail to deliver progress towards—or even actively hinder—a net zero carbon built environment.”

In its Review of Energy Policy 2022, the UK Energy Research Centre is equally scathing.

I hope that the Government will take note of these telling criticisms and do something in the Bill to rectify that.

[Lord Lennie (Lab)]

My Lords, I thank noble Lords who have spoken in this debate so far. We on the Labour Benches certainly welcome Amendment 192 in the names of the noble Baronesses, Lady Sheehan and Lady Hayman, and others, which would create a requirement to publish a national energy demand reduction strategy. It seems an obvious point to make.

We received some information from Energy UK. It says that, although we cannot deal with the current crisis in this Bill, it can ensure that long-term strategies are put in place to tackle the energy efficiency of the UK’s housing stock. This powerful point was made by the noble Lord, Lord Foster. If we do not have targets to measure it against, we cannot really manage it; we just have—I do not quite know what—a sort of wish list, I suppose. We support the targets suggested by the noble Lord, Lord Foster.

The Bill outlines its intention to create powers to remove the European energy performance of buildings directive, or EPBD, requirements in the UK. Those requirements are not perfect, but they have been in place in the supply chain, effectively delivering energy efficiency measures and low-carbon technologies. How will the Government safeguard against the potential for the UK to roll back on energy performance of buildings regulations when we remove the European energy performance of buildings regulations? We risk falling behind the rest of Europe, if we have not done so already, in this space.

We also need to see the detail regarding how the Government will safeguard against the potential for the UK to fall behind the rest of Europe. We need clarification on what measures the Government will take to ensure that all buildings are fit for the future, given the lack of measures in the Bill to reform planning and building regulations. The latter requirement could also be backed by the introduction of a net-zero test, as previously set out, but what measures will the Government take to ensure that all buildings are fit for the future, given the lack of measures in the Bill to reform planning and building regulations or set specific targets for delivery?

Finally, in relation to what the noble Lord, Lord Foster, said about the 19 million homes requiring energy efficiency measures to be put in place pretty quickly, I recommend to the Government Labour’s warm homes plan, which will deliver fully costed upgrades to 19 million homes, cutting bills and creating thousands of good jobs for the future.

[Lord Callanan (Con)]

I thank everyone who has contributed to this debate on energy efficiency, which is very much a matter dear to my heart. Noble Lords may have noticed that I was delighted to launch the Government’s £18 million “It all adds up” energy saving campaign on Saturday—it is almost as if it was designed especially for this debate—with advice that could help UK households cut hundreds of pounds off their bills. The campaign features tips on simple, low or no-cost actions that households can take to immediately cut energy use and save money while ensuring that people are able to stay safe and warm this winter.

We know that warmer homes and buildings are key to reducing bills and will create jobs along the way. That is why the Government are committed to driving improvements in energy efficiency, with a new ambition to reduce the UK’s final energy consumption from buildings and industry by 15% by 2030. Existing plans that we already have in place are expected to deliver around half of this new ambition. To go further, we will need to work together as a country to reduce waste and improve the way we use energy. As has been referenced in this debate, a new energy efficiency task force is being established to lead this national effort.

First, Amendment 192, in the names of the noble Baronesses, Lady Hayman and Lady Sheehan, and the noble Lord, Lord Whitty, requires the Secretary of State to publish a national energy demand reduction strategy to provide for the delivery of low-carbon heat and energy efficiency targets for all UK homes and buildings. Again, while I understand the reasoning behind this amendment, we do not consider it necessary to ensure that our commitments to improve the energy performance of buildings and our net-zero targets are met.

We already have a heat and buildings strategy which sets out the actions the Government need to take to increase the energy efficiency of buildings in the near term and provides a clear long-term framework to enable industry to invest and deliver the transition to low-carbon heating. Just having another strategy document does not make the policy decisions that are required any less difficult. As I have already mentioned, the Government are launching the energy efficiency task force with the key objectives of developing a long-term strategy to drive improvements in energy efficiency and reduce national energy demand.

As I have repeated many times in the House, we are investing £6.6 billion over this Parliament on clean heat and improving energy efficiency in buildings, reducing our reliance on fossil fuel heating. As I think the noble Lord, Lord Ravensdale, referenced, the Autumn Statement also recently announced a further £6 billion of funding to become available from 2025. In the context of spending reductions and a difficult economic environment, I was delighted to see that announcement from the Chancellor. The Government also recently announced—and we are now consulting on—a further energy efficiency support scheme through ECO+. The scheme will be worth about £1 billion and shall deliver an average household saving of around £310 per year through a broad mix of affordable insulation measures, including loft insulation, cavity wall insulation, draught-proofing and heating controls.

Amendment 197, in the name of the noble Lord, Lord Foster, requires the Secretary of State to set an average energy performance certificate target for mortgage lenders of EPC C by the end of 2030. It also gives the Government the power to make regulations that relate to the disclosure of energy performance information on properties in their portfolio. I have met with many of the lenders, and I agree that they have an important role to play in improving the energy efficiency of the UK’s housing stock. However, as we highlighted in our consultation on improving home energy performance through lenders, the Government are concerned that the amendment may have unintended consequences for the mortgage and housing market. I am sure that this is not the noble Lord’s intention, but there is a danger of disincentivising mortgage lenders from lending to energy-inefficient properties. We would then end up with a load of unmortgageable homes in the UK, which I do not think anybody wants to see.

It is imperative that mortgage lenders are not disincentivised from lending to any particular group while home owners are under unprecedented financial pressure. The Government are using the feedback from the consultation to refine the policy and will publish a response once the policy matters have been resolved.

The noble Lords, Lord Ravensdale and Lord Foster, and the noble Baroness, Lady Young, all mentioned the importance of skills. If anything, that is key to this area, probably even more so than the availability of funding. We understand that scale-up requires consistent long-term deployment streams via government funding and regulation, which is what we are attempting to do, so that companies working in these markets can make the investments needed and individuals can choose to upskill.

To grow the installer supply chain, we are investing in skills and training. In 2021, the Government invested £6 million in the BEIS skills training competition, resulting in almost 7,000 training opportunities being provided across heat pump installation and wider retrofit skills. In fact, we have another training competition out for bids at the moment.

Amendment 212 in this group from the noble Lord, Lord Foster, would require the Secretary of State to collect and publish a list of those public buildings that hold display energy certificates, commonly referred to as DECs, and those that do not. I really do not believe that it would be cost effective for the Government to identify and inspect all public buildings that require a DEC, nor to record this information. The energy performance of buildings report published in 2020 cited an estimated DEC compliance of about 83%. We currently publish DEC data as part of our register. I hope noble Lords agree that this demonstrates that the existing system, which we intend to continue and keep under review, is working well in respect of DEC compliance.

Finally, Amendments 198A and 198B from the noble Lord, Lord Foster, would require the Secretary of State to ensure that all households achieve an energy performance certificate band C by 2035, with specified exemptions, and require regulations relating to energy performance in existing premises. The Government remain committed to our aspiration of improving as many homes as possible to reach EPC band C by 2035 where practical, cost effective and affordable. That is why, as I mentioned, we are investing £12 billion during this Parliament into the various Help to Heat schemes, some of which the noble Lord referenced, to make sure that homes are warmer and cheaper to heat, including £1.5 billion to upgrade around 130,000 social housing and low-income properties in England. However, we need to retain flexibility to choose the best approach, rather than being restricted to the regulatory requirement.

Regarding existing premises, the Government have consulted on raising the minimum energy-efficiency standards for the domestic and non-domestic private rented sectors. We are in the process of considering our responses to both consultations. However, it is important to stress that improving existing buildings is a complicated issue and requires striking a balance between improving standards and minimising impacts on the housing market, and, for the private rented sector specifically, ensuring that the final policy is fair to both landlords and tenants. That is a particular dilemma that we face with the PRS regulations.

Similarly, regarding the social rented sector, the Government have committed to consult within six months of the Social Housing (Regulation) Bill receiving Royal Assent. By prescribing specific targets without any opportunity for landlords to offer views, the proposed amendment would be at odds with this commitment.

I thank all noble Lords who contributed during this debate, but given what I have set out and the Government’s long-term commitment to drive improvements in energy efficiency, I hope that they will not press their amendments.

Prime Minister: Trade Unions

Lord Lennie Excerpts

Monday 19th December 2022 Lords Chamber

[Lord Callanan (Con)]

My noble friend makes an important point. It is almost as if the rail unions, in particular, are seeking to punish the public at this difficult time and exploit the monopoly position that they have to make life as difficult as possible for people wanting to join their friends and family for Christmas. It is appalling behaviour.

[Lord Lennie (Lab)]

My Lords, on Tuesday the UK quarter 3 growth figures will be published. They are expected to show that the economy has contracted by 0.2%, as well as real falls in household disposable income as wage increases fail to match inflation. These pressures on working people will have a severe impact, with families already cutting back on food and heat. What discussions have the Government had with the trade unions on policy options which will give families the support they will need to get through the crisis in the winter months?

[Lord Callanan (Con)]

We have given extensive levels of support. We are spending tens of billions of pounds on direct support to households over the winter on energy bills, cost of living payments, et cetera. This Government have an excellent record of standing by people, both in the pandemic and since then. We all know it is a difficult time; public expenditure is tight and, if what the noble Lord says is true and the economy has contracted, then there is even less money to go around because tax receipts will collapse as well. We have to keep all of these matters under consideration. We will stand by families as much as we can, and I think our record proves that.

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

Lord Lennie Excerpts

Tuesday 13th December 2022 Grand Committee

[Lord Lennie (Lab)]

My Lords, I thank the Minister for his detailed introduction to this instrument, the main objective of which is to provide businesses with additional time to transition to the post-exit independent UK conformity assessment, the UKCA. As has been said, the UKCA is a conformity mark that indicates conformity with the applicable requirements for products sold within GB.

The purpose of the instrument, without compromising on safety or consumer and environmental protection, is to correct a deficiency arising from EU exit by preventing immediate cost increases and burdens on businesses, which the Minister set out. It will ensure that businesses continue to be provided with flexibility and choice on how they comply with product regulations. The instrument’s provisions will also prevent potential temporary and short-term market and supply chain disruption that may have occurred at the start of 2023 if the recognition of products meeting EU requirements and markings came to an end at the end of December 2022.

We support the instrument overall, but I have some questions in response to the provisions that the Minister set out. First, this is the second extension and it is significantly longer than the first one. What are the Government getting wrong? Is it entirely down to cost of living and supply chain challenges? How sure are they that this will be the last time? If they are not, what needs to change for there not to be another extension?

On the second set of provisions that the Minister set out, the instrument provides for where a manufacturer or other relevant persons has undertaken steps under EU conformity assessment procedures. This applies only as long as the certificate is valid or until 31 December 2027. This seems sensible and the benefits of reduced costs are self-evident, but does it come with any risk? If so, are the Government taking any steps to mitigate this risk? If not, why not just carry over everything? Why is that date specified?

Conformity Assessment (Mutual Recognition Agreements) (Amendment) Regulations 2022

Lord Lennie Excerpts

Tuesday 13th December 2022 Grand Committee

In conclusion, we introduce these regulations to give effect to provisions which keep our barriers to trade with Switzerland low. As I said, we do this while preserving our robust protections for product safety as a responsible Government. This SI will provide certainty on the UK’s approach to recognising and designating CABs for certain products under the MRA. I therefore commend these regulations to the House.

[Lord Lennie (Lab)]

My Lords, I thank the Minister for setting out the details of the regulations for us. I note that we have lost our one Back-Bencher, so it is now a two-person show, but there we go.

This instrument makes provision to give effect to a mutual recognition agreement—an MRA—between the United Kingdom of Great Britain and Northern Ireland and the Swiss Confederation. It amends earlier regulations. An agreement between the UK and the Swiss Confederation came into force on 1 September 2021 and contains the conditions under which each country will accept conformity results from the other. The five areas it covers are: electrical equipment; measuring instruments; radio equipment; transportable pressure equipment; and noise emitting equipment for use outdoors. The MRA for these is a mutual testing arrangement between Switzerland and Great Britain, but is there any expectation that the sectors covered by this MRA will be expanded in the future? The Minister referred to 12 areas and we have five with us. Are the other seven going to be covered by the regulation at some point in the future?

Equally, the MRA sets out how relevant goods can be tested—Switzerland against UK regulations and UK against Swiss regulations. Are there any notable divergences or are they simply technical adjustments between one and the other? The UK has MRAs with several countries agreed as part of arrangements made under the UK’s trade continuity programme. To this extent, the assessment is the same as that performed to assess conformity with requirements in third countries. This may reduce the need to duplicate conformity assessment. This will provide continuity. It will also have the benefit of saving time for manufacturers, with products being able to be placed on the market more quickly than if they were required to undergo a separate test of conformity in the UK as well as in Switzerland before they arrive.

The instrument implements the Swiss MRA in a similar way, by amending Schedule 1 to the 2021 regulations so that it includes all the domestic regulations which the UK may recognise for Swiss CABs to test against under the Swiss MRA. Since 1 January 2021, the UK and Switzerland have granted temporary bilateral access to goods conformity, assessed against each other’s regulations. Switzerland will no longer apply these temporary measures for new conformity assessment procedures carried out by bodies based in the UK after 31 December 2022. Under reciprocal arrangements set out in the Swiss MRA, conformity assessment procedures issued before this date will still be recognised for goods placed on the market in 2023, ensuring continuity of trade between the parties.

When the Swiss MRA enters into force in 2023, conformity assessment bodies will be permitted to issue new approvals for conformity assessment procedures once they are designated under the agreement. The Swiss MRA specifies the products and sectors to which it applies, such as radio equipment. The amended 2021 regulations also set the power of the Secretary of State to designate UK CABs for the purpose of assessing against Swiss requirements. The instrument amends Schedule 2 to the 2021 regulations to include product sectors of the Swiss MRA.

The main direct impact for business associated with this new legislation will be a one-off familiarisation cost, at a central estimate of £2,300. More specifically, as of 11 October this instrument would have familiarisation impacts on only around 300 affected businesses which are involved in the manufacture and sale of the products within the scope of the instrument, and which trade those products with Switzerland but not the EU. The familiarisation costs should presumably be balanced out by the reduced bureaucracy in having to meet a single assessment conformity. Have the Government made any assessment of the value of exports made by the 300 UK businesses to Switzerland that would be required to break even in this regard?

Energy Bill [HL]

Lord Lennie Excerpts

Committee stage
Monday 12th December 2022 Grand Committee

[Lord Teverson (LD)]

My Lords, I welcome the Bill’s return to Committee; I am very pleased that that is the case. I have no comments to make on the amendments, but I note that during that interregnum, as the Minister described it, the Government gave planning permission for a coal mine. Although we are not going to debate it here today, that is a hugely retrograde decision which flies in the face of the Bill and the general way in which it looks forward. However, I have no comments on the amendments that the Minister has tabled.

[Lord Lennie (Lab)]

My Lords, I am also delighted to be debating the Energy Bill again. I am delighted that the noble Lord is still the Minister so that we at least have continuity on the Bill; it remains much the same as it was before we left it some three months ago.

As the Minister said, the amendments refer to Clauses 84 and 85 of Chapter 2 of Part 2 on “Decommissioning of carbon storage installations”. This gives the Secretary of State a power to make regulations regarding the financing and provision of security for decommissioning and legacy costs associated with carbon capture utilisation and storage. The decommissioning of offshore installations and pipelines used for carbon dioxide storage purposes is modified by Section 30 of the Energy Act 2008, which modified Part 4 of the Petroleum Act. Clause 84 enables further modifications to the modified Part 4 in relation to the definition of carbon storage installation, and the establishment of decommissioning funds and legacy costs as set out in Clause 82, “Financing of costs of decommissioning etc”.

Clause 85 relates to Sections 30A and 30B of the Energy Act 2008, which make provision for a person to qualify for change of use relief on installations and submarine pipelines converted for CCS demonstration projects—as defined by Energy Act 2010. This relief removes the ability for the Secretary of State, in some circumstances, to take steps under the modified Part 4. This clause makes amendments to Section 30A of the Energy Act 2008 by broadening the scope of change of use relief so that it applies to eligible carbon storage installations more generally, amending the trigger point to qualify for such relief.

Amendments 99 and 100, which the Minister referred to, were tabled by my noble friend Lady Liddell, who unfortunately cannot be here and therefore will not be able to move them. They reflect value-for-money considerations in the decision-making process, meaning that the Secretary of State could accept provision of security in respect of amounts to be contributed on account of decommissioning costs—costs likely to be incurred, as the Minister said, many years after the establishment of the fund—rather than requiring such amounts to be paid simply in cash.

[Lord Callanan (Con)]

I thank the noble Lord, Lord Teverson, and the noble Lord, Lord Lennie, for their comments, but I do not think there were any points for me to address, so I will leave it there.

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[Baroness Bloomfield of Hinton Waldrist (Con)]

It could be a commercial company. It depends who gets the contract for the funds. Then they will be invested.

[Lord Lennie (Lab)]

Are the funds held in escrow so that they cannot be used for anything else, or can they be used as part of the normal purposes?

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Moved by

[Lord Lennie]

113: Clause 90, page 83, line 25, at end insert—
“(aa) the Official Opposition;”Member's explanatory statement
Under the Bill, the Secretary of State has to produce a CCUS strategy and it has to be reviewed after 5 years. However, they have the power to review it before the end of this 5-year term if certain circumstances have taken place (including a general election) but must consult certain people if it is outside the 5-year period. This amendment seeks to include His Majesty’s opposition in that consultation.

[Lord Lennie (Lab)]

My Lords, these amendments refer to Clauses 90 and 91. They concern consultation over the CCUS strategy and its periodic review. I am grateful to Drax for providing definitions. Carbon capture and storage traps and removes carbon dioxide from large sources and most of that CO₂ is not released into the atmosphere. That can be either pre or post combustion. If it is post combustion, the storage usually takes place underground in large silos, the largest of which is in Texas and which is currently processing 5 million tonnes of CO₂ a year. As an advert for Drax, it reckons that it would be able to process 20 million tonnes in North Yorkshire by 2030 or thereabouts.

Amendment 113 is about the requirement to include His Majesty’s Opposition in the list of organisations that must be included in stakeholder consultation. These reviews must happen either every five years or more frequently if certain circumstances take place, including a general election or if there is a material change of policy on CCUS. These reviews are to ensure a stable and predictable regulatory landscape for investors. I would have thought that the amendment to include the Opposition in the consultees’ list would be quite attractive to the Government, given the current state of the political landscape in the UK—but there you go. This new requirement would clearly be of overall benefit to the development strategy by involving a wider parliamentary group beyond just the Secretary of State when a review is required. If the Secretary of State seeks to amend the statement, they will have to follow the requirements in Clause 91, which include the requirement for the statement to have been approved by a resolution of each House of Parliament before the Secretary of State can designate it as a strategy and policy statement.

The amendment tabled by the noble Baroness, Lady Liddell, in this group would ensure a requirement for consultation on the CCUS strategy and policy statement, if the Government should seek to amend it. It sets out the process that would have to be followed, and the Opposition support this amendment. I beg to move.

[Lord Teverson (LD)]

My Lords, I was getting ahead of myself on the last group, and I apologise to the Grand Committee for that. I would have thought that the Government would like to accept this amendment, as they are likely to be in opposition in five years’ time. I wait to hear from the Minister.

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[Lord Callanan (Con)]

I do not think that is the case. As a Minister, I have issued many consultations. In my experience there is never a problem with anybody contributing who wishes to, even if they are not statutorily listed in the legislation. They are normally public consultations in any case, with a large number of stakeholders. The advice from officials and others is always to extend the scope of consultation to be as wide as possible because you then minimise any potential legal challenges as a result. I understand the noble Lord’s concern but I do not think it is warranted on this issue.

[Lord Lennie (Lab)]

My Lords, the amendment that seeks to include the Opposition as part of the formal consultation would avoid what we get in Parliament, which is the “ayes and noes” and the “take it or leave it” approaches to policy development. This is an area where we have pretty much a common interest. It seems a sensible approach to throw open the consultation at least to the Opposition—who knows, maybe even to the fourth party—but to make it as wide as possible to avoid that prospect of Parliament rejecting or accepting in total whatever is put before it. It is about buy-in. As the Minister said, there are plenty of examples where buy-in has been part of the Government’s approach to consultation. It seems strange that this is not one of them. With that, I beg leave to withdraw the amendment.

Amendment 113 withdrawn.

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[Baroness Worthington (CB)]

My Lords, I too am glad to be back debating energy. As has been noted, we find ourselves in a completely different sent of extreme weather events today, but I am glad that we have all been able to make it here to resume this important discussion.

Since we last met, emergency legislation has gone through on some of the issues that we raised in Committee and at Second Reading on the need for a short-term response to the energy crisis bearing down upon us. The Bill is very much about long-term measures, so it is right and proper that the Government supplemented that legislation with faster-paced legislation. However, there were many provisions in that rather hurried legislation, which I know has caused concerns in the market, so the Government have to work hard to deliver the right signals to investors and to businesses around the country that the transition will be orderly and consistent and can encourage investment across the piece. I am sure we will come back to debating the net effect of all the Government’s measures on energy in later clauses.

Amendment 117 relates to the setting up of a low-carbon heat scheme. Specifically, the amendment would change the provision that the Secretary of State “may” by regulations make provision for the scheme to “must” and apply urgency to the challenge of bringing forward those regulations by requiring that they are passed within 12 months of the Bill being enacted.

The reasons are self-evident. If we are to solve the problem of our reliance on volatile fossil fuels, which are also contributing to air-quality problems and climate change, we need to get on with the electrification of heat. The scheme would move us along in that direction and give investors confidence that there is a market that they can plan for and invest in. We therefore urge the Minister to reassure us that the regulations will be passed with all due haste and brought in in good time, and I look forward to hearing from him on the timetable within which we might see the regulations.

Amendment 118 seeks to add to the Bill statutory requirements for and deadlines by which we will stop selling the gas-based boilers currently going into properties. I support that in principle, although I imagine that there will be concerns about the specificity going into primary legislation. However, it is essential that we give clarity to the manufacturers of existing boilers that the Government are serious about ending their current dominance.

I receive, as I am sure everyone does, a lot of correspondence about hydrogen-ready boilers. That needs to be unpacked. I do not know what can be done to prevent the mis-selling of that concept, but it is borderline mis-selling because it is very unclear whether hydrogen-ready boilers are even possible. I therefore think it has more to do with the manufacturers preserving the status quo than with their genuinely seeking to be involved in the transition. Lots of technical advisers tell me that simply saying that something is hydrogen-ready is not sufficient and that it is very difficult and complex to achieve, so I have some sympathy with Amendment 118.

Amendment 121 seeks to except hydrogen if it is compliant with the low-carbon hydrogen standard. In previous debates I have made it clear that I do not deem the low-carbon hydrogen standard sufficient. It is a number that has been put out there, but I do not think it takes into account all the effects of hydrogen on the climate specifically. Hydrogen is a greenhouse gas, as we have talked about previously. The global warming potential of hydrogen needs to be taken sufficiently into account when we consider a low-carbon hydrogen standard, and I do not think it has been, so I am a little nervous about us putting the provision in as it stands because I do not consider that standard tight enough.

The Government’s amendments on opening up the opportunity for the regulations to apply to manufacturers seem entirely sensible. We have to decide the right point at which regulation would be most efficient to drive this. The manufacturers may well be the right place for this, or they may not, but having that option seems correct to me.

In Amendment 122, the Opposition Benches seek to include specificity in relation to the heat pump market. Again, I can see the logic of that. I am sure it is probing amendment, more than anything else, to get clarity on the scale of the market that we expect. I doubt that it could survive in primary legislation, but I am sure it is there to try to elicit positive statements so that the heat pump sector can move in this regard.

Amendment 119 concerns cases where it is not possible to fit heat pumps. It is a difficult amendment to legislate on. Very few of the properties where a large enough heat pump or geothermal source can be installed cannot electrify heat. Therefore, I believe that the amendment is not necessary.

I very much look forward to hearing the response to the group. As I have said, it is of primary importance to get moving, and to get investors moving, so that we can start to have a manufacturing sector that is enabled by those regulations as quickly as possible. I beg to move.

[Lord Lennie (Lab)]

My Lords, 95% of UK homes are centrally heated and most CO₂ emissions come from burning fossil fuels, contributing to about 30% of the UK’s total greenhouse emissions, about half of which is from heating our domestic properties. Will gas boilers be banned in 2025? As part of the future homes standard, new homes will be able to install only energy-efficient heating systems and will produce 31% lower emissions compared to the current levels. The standard will come into effect in 2025. The International Energy Agency has also stressed that no new gas boilers should be sold after 2025. The UK’s official climate advisers recommend that all gas boilers should be banned by 2033 to end the UK’s further contribution to climate change. That is the background to the amendments being moved.

We support Amendment 117 tabled by the noble Baroness, Lady Worthington, which adds a bit of the oomph by replacing “may” with “must” in relation to the low-carbon heat scheme. Amendment 119, in my name, would ensure that the Secretary of State, in making a low-carbon heat scheme, must

“provide a plan for low-carbon heating in homes where it is uneconomic or unfeasible to have a heat pump (large, rural, off-grid homes etc.).”

Amendment 121 seeks to allow

“heating appliances that use hydrogen produced to the Low Carbon Hydrogen Standard (blue hydrogen) to be included in low-carbon heat schemes.”

I note what the noble Baroness, Lady Worthington, said about hydrogen in general, but if we are going to have hydrogen, let us have blue hydrogen at this stage.

Amendment 122 states:

“Sub-paragraph (i) seeks to include the Government’s own figures for heat pumps in the Bill. Sub-paragraph (ii) seeks to include the number of heat pumps in the latest figures on recommendations from the CCC. And sub-paragraph (iii) seeks to oblige manufacturers producing gas boilers to turn to minimum 25% production of heat pumps by 2028 to facilitate the clean heat transition.”


Government Amendment 123

“makes it clear that a low-carbon heat target set by virtue of clause 100(1)(c) or (d) may be set, in the case of a manufacturer, by reference to heating appliances of the manufacturer that are supplied or installed, whether by the manufacturer or someone else.”

Government Amendment 124 simply corrects a drafting error.

Amendments 117, 119 and 121 relate to Clause 98 in Chapter 1, on low-carbon heat schemes, of Part 3, on new technology. Clause 98 provides the Secretary of State with powers to set up a regulatory scheme through secondary legislation to encourage the sale and installation of low-carbon heating technologies, such as electric heat pumps. Clause 98(3)(b) allows for this to include, for instance, hybrid heat pump systems that involve both a heat pump and a fossil fuel boiler. This is welcome, but our primary concerns are when and how the powers will be used. Amendment 117, tabled by the noble Baroness, Lady Worthington, requires the scheme to be set up within 12 months of the Bill becoming law, and we agree with that.

Amendment 119 seeks to ensure that the Government are aware that there are a number of homes where heat pumps are not the solution, and to address filling this large gap. There is one fundamental flaw with this clause that Amendment 121 seeks to address: it effectively prohibits the deployment of either hydrogen-ready boilers or boilers that use blue hydrogen under low-carbon heat schemes.

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[Lord Teverson (LD)]

My Lords, I particularly support the proposal to take out Clauses 108 and 109. I did not put my name to that, but it seems the obvious solution. As the noble Baroness, Lady Worthington, said, we have all been on the receiving end of massive lobbying by the hydrogen lobby. I will not go into hydrogen extensively, but clearly there are areas where hydrogen will need to work. It will be important in some energy-intensive industries and some long-term transport solutions, but we seem to have overreached in terms of those applications.

For heating, it just cannot make sense to use green hydrogen, which would have to be produced by renewable electricity, as electricity could be used anyway. Scientifically and in terms of the laws of physics and efficiency, it does not make sense. Heating is an important area—as we said, it represents some 40% of UK emissions—so surely it must be electrification directly, geothermal technologies or air source heat pumps, as we have discussed before. That is why I think these clauses not standing part is the best solution. If that is not agreed, I thank the noble Baroness for supporting my amendment; the noble Lord, Lord Lennie, has a similar one. This should not be compulsory and those consumers should be very aware of all the other repercussions.

My second amendment, Amendment 126, is less important. As with previous amendments, it just makes sure that only people who really benefit from these trials should have to pay for them and that those who do not should not. I do not understand how BEIS and the Government have become the victims of the lobbying that takes place.

Finally, perhaps I can cite a gentleman whose work I have been reading, Jan Rosenow. He takes his statistics from BEIS’s Hydrogen Production Costs 2021 and Ofgem’s wholesale market indicators. He is very clear that, depending on how you look at the timescale between now and 2050, hydrogen will cost three to 11 times more than fossil fuel gas at its present levels. Clearly, this is not an acceptable solution or route for decarbonisation.

[Lord Lennie (Lab)]

My Lords, these amendments relate to Clauses 108 and 109—Chapter 2 in Part 3—on hydrogen grid conversion trials, covering modifications of the gas code and regulations for the protection of consumers. The background to this is that in 2021 the Government launched a consultation on facilitating a grid conversion hydrogen heating trial. The Government’s Ten Point Plan for a Green Industrial Revolution sets out the ambition to support the industry to deliver hydrogen neighbourhood and hydrogen village trials by 2025. This consultation sought views on proposals to legislate to allow gas distribution network operators to carry out activities needed to deliver a grid conversion.

It would be unfair to say that the Government did not alert people to the complexity of the trial, because the consultation document announced that it involved replacing gas supplies with hydrogen in consumers’ premises. It also said:

“Existing in-home appliances and devices such as boilers and meters will need to be replaced with hydrogen-compatible equivalents. Pipework may need to be replaced if it is not already suitable for hydrogen. Additional internal work may also be required to make the property ‘hydrogen-ready’.”


On the face of it, the Government understood the complexity. They also said that the trials would be carried out by the gas distribution network operators in partnership with local authorities, and that, in the trial of hydrogen, safety

“will be of paramount importance”—

that is good news—with the Health and Safety Executive being consulted and involved in any measures of conversion.

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[Lord Callanan (Con)]

Let me finish, then the noble Baroness, Lady Worthington, will be able to come back.

I will start with Amendments 125 and 126. With Amendment 125, the noble Lord, Lord Teverson, calls for an adequate level of information to be provided to consumers in the trial area concerning safety, long-run bill impacts and opting out of the trial. I agree that these are important issues. Support from local people will be crucial to the success of the trial, and gas transporters are already working closely with communities in the potential trial locations. In fact, the relevant Members of Parliament have already been in touch with me, and I already have meetings in my diary to talk with them and residents from the local areas about this.

Steps have already been taken to ensure that people have all the information required to make an informed choice about whether they wish to participate. Both gas transporters have opened demonstration centres in the two shortlisted local communities to raise awareness of what the trial would involve.

Clause 109 provides the Secretary of State with the power to require the gas transporter running the trial to take specific steps to make sure that consumers are properly informed about the trial. In meeting their responsibilities to inform consumers, we fully expect gas transporters to provide clear information about each of the important topics listed in the noble Lord’s amendment.

I turn to Amendment 126. The Government have been very clear that no consumer in the trial location should be financially disadvantaged due to taking part in the trial. Last year, the Government published a framework of consumer protections that will underpin the trial. Consumers in the trial location will not be expected to pay more for their heating than they would if they had remained on natural gas or to pay for the installation and maintenance of hydrogen-capable appliances.

The village trial will be paid for through a combination of government and Ofgem funding and contributions from the private sector. All gas consumers pay a very small amount towards Ofgem’s net-zero funding for network companies, which supports projects to decarbonise the energy sector; that includes this trial. All gas consumers will benefit from well-informed strategic decisions on how to decarbonise the way we heat our homes.

I hope that I have been able to reassure the noble Lord that the important issues he has raised, about which I agree with him, are already effectively addressed by the Bill, and therefore that he feels able not to press his amendments.

I move on to Amendment 127 in the names of the noble Lord, Lord Lennie, and the noble Baroness, Lady Blake. As I have said, local support will be crucial to the success of the trial. Gas transporters are already working closely with communities in the potential trial locations to develop an attractive offer for people who want to convert to hydrogen. However, we understand that not everyone will want or be able to connect to hydrogen, and the Government are clear that nobody will be forced to do so. The gas transporter running the trial will have to provide alternative heating solutions and appliances for people who do not take part in the trial. In May 2022, this requirement was clearly set out in a joint letter from BEIS and Ofgem to the gas transporters, alongside the other requirements that must be met before any funding is provided for the next stages of the trial. The gas transporters will need to demonstrate that they have a viable plan for providing alternatives to hydrogen. There is already an effective way to ensure that they provide alternatives to hydrogen, through the Government’s funding requirements.

We therefore do not believe that this amendment is necessary. I fully appreciate the noble Lord’s intention—which I share—to ensure that the trial is conducted properly, with alternative heating systems offered to people who do not take part. With that information, I hope he feels reassured that there are already steps in place to ensure this and will therefore feel able not to move the amendment.

I will say a few words about the stand part notices on Clauses 108 and 109. I know that the noble Baronesses, Lady Jones and Lady Worthington, and my noble friend Lord Moylan, who is not here now, have registered their intention to vote against these clauses. I have already established that the overall intent of these clauses is to support a safe and effective trial for hydrogen heating.

Clause 108 allows the Secretary of State to designate a hydrogen grid conversion trial, ensuring that both this clause and Clause 109 are narrow in scope and would apply only for the purposes of such a trial. Importantly, the clause expands the duty to participants of the gas transporter running the trial to undertake the required work without charge. It also makes certain modifications to the Gas Act 1986 to build on existing provisions concerning powers of entry. This will ensure that the gas transporter running the trial has clear grounds to enter private properties to: carry out any essential works, including replacing appliances and installing and testing safety valves; undertake inspections and tests for the trial, such as safety checks; and safely disconnect the gas supply in a property.

It is important to emphasise that gas transporters already have powers of entry into properties through the Gas Act. We are merely extending these powers in a very limited way to conduct the necessary work to set up and deliver the trial. Gas transporters will only ever use these extended powers as a very last resort once all other attempts to contact property owners and reach an agreement are exhausted. The existing rules on powers of entry requiring a gas transporter to obtain a warrant from a magistrates’ court will continue to apply, of course. I reiterate once again that nobody will be forced to use hydrogen. I have already covered the plans for alternative arrangements in my comments on the amendment earlier.

Finally, I draw noble Lords’ attention to the fact that the majority of responses to the public consultation the department ran last year on facilitating a hydrogen village trial were broadly supportive of our proposals to change legislation in this way. I therefore urge that Clause 108 stands part of the Bill.

Clause 109 provides the Government with the powers to establish consumer protections for people taking part in this world-leading hydrogen village trial. It will do this by giving the Secretary of State two delegated powers to make regulations which require the gas transporter running the trial to follow specific processes to engage and inform consumers about the trial, and ensure that consumers are protected before, during and after the trial.

The department is of course working closely with the gas transporters as they develop their plans for consumer engagement and protection. It is worth saying that there is quite a bit of support in these communities for the trial. The council leaders in the areas concerned have expressed their support and one MP in particular is actively campaigning for their area to take part in the trial. Opinion is obviously mixed in both communities, but we want to make sure that it has the maximum level of support required. I have already highlighted the importance of consumer engagement and support in my earlier comments. Regulations made under this clause will ensure that people will have all the information required to make an informed choice about whether they wish to participate.

The second power in this clause, to introduce regulations for consumer protections, will work alongside existing protections such as the Consumer Rights Act 2015 and the Gas (Standards of Performance) Regulations 2005. This recognises that it is a first-of-its-kind trial and will allow the Government to introduce additional protections for consumers in the trial area. These might include regulations to ensure that consumers are not financially disadvantaged by taking part in the trial.

I am sure that all noble Lords will agree that these provisions, which—as I said, again—were well received by stakeholders when we consulted on them last year, are crucial to ensure the fair treatment and protection of people in the selected trial area.

[Lord Lennie (Lab)]

The Minister said that no one would be forced to take part in the trial. I appreciate that but, first, it seems like the place for that statement to be made is within the Energy Bill. Secondly, will they be given an alternative low-carbon solution?

[Lord Callanan (Con)]

The answer to both of those questions is yes. No one will be forced to take part in the trial. If they do not take part in the trial, they will of course be given an alternative low-carbon solution.

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[Baroness Worthington (CB)]

With a Bill of this magnitude, if we are saying that it is a principle that there is a right to refuse, that principle should be in the primary legislation. That is where you put principles—and then the details can be worked out. Nothing in the Bill says that consumers have the right to refuse. I am sure that we are going to revisit this, as it is fundamentally important that principles are enshrined in primary legislation.

[Lord Lennie (Lab)]

Can I briefly support that? The place to put it is under protection of consumers in the Bill. There is a clause entitled “Regulations for protection of consumers”, and the right not to take part in the trial would be one of those protections.

[Baroness Sheehan (LD)]

I completely agree with the noble Lord, Lord Lennie, and the noble Baroness, Lady Worthington, on this—but could I ask the Minister a separate point about how the trials will be carried out? The Minister said they were going to provide evidence. I want to ask how long the trials will last. One of the issues with hydrogen, if I understand it, is its impact on the pipes that carry the gas to the boilers, et cetera. Those pipes perish in time, because the hydrogen makes them brittle in a way that natural gas does not. Of course, that will lead to cracks and leakages. Will the trial take place over a long enough period to see whether that is indeed the case and what the jeopardy from those pipes might be?