Employment Policies

Lord Lennie Excerpts

Tuesday 6th December 2022 Lords Chamber

[Lord Callanan (Con)]

The ingenuity of my noble friend in seeking to ask his questions knows no bounds. As far as I am aware, Ministers do not have employment contracts. We serve at the behest of the Prime Minister and sovereign, and I am sure that most Ministers are happy to continue doing so.

[Lord Lennie (Lab)]

My Lords, in September, the TUC reported the UK Government to the ILO, saying that they had taken steps to infringe the right to strike. As the noble Lord, Lord Woodley, said, that was done, first, by passing a law to use agency workers to break legitimate strike action and, secondly, by proposing a minimum service level of transport. What consideration have the Government given to the substance of this complaint in how they progress the Transport Strikes (Minimum Service Levels) Bill?

[Lord Callanan (Con)]

Forgive me for taking everything that the TUC says with a little pinch of salt but, as I said to the noble Lord, Lord Woodley, we are very confident that all our measures do not infringe the right to strike. They seek to provide a balance between, on the one hand, allowing trade unions to take legitimate strike action but, on the other hand, trying to ensure some level of minimum service for the public. I hope that the Labour Party will take the opportunity to condemn the disgraceful tactics of the RMT recently in seeking to deny people their essential travel at Christmas.

Energy Security

Lord Lennie Excerpts

Monday 5th December 2022 Lords Chamber

[Lord Lennie (Lab)]

My Lords, I thank the Minister for the Statement that we are discussing now. The key announcements in the Statement—the green light for Sizewell C and the return of the Energy Bill—are both overdue, but better late than never, and we welcome both. Nuclear must play a role as part of the balanced pathway to net zero, as the Climate Change Committee says, and we on these Benches support new nuclear projects, so it is about time that the Government finally gave Sizewell C the go-ahead. The reports a month ago that it was being put under review were very worrying after a decade of government dithering, so we are pleased that this has been put to bed.

We also welcome the return of the Energy Bill, which of course should never have been paused while Conservative Party infighting took precedence over national need. We look forward to picking up where we left off next week. Given that this is the second Government since it was paused, my first question is: can we expect any government amendments to the Bill when it returns?

As for the third announcement in the Statement, on ECO+, a drive towards energy efficiency is needed but in reality, at the current rate of installation, the 19 million homes below energy performance band C will not reach that level until the next century—yet this announcement gives neither extra resources to fix that nor any indication of how it will change. Perhaps the Minister can elaborate a bit further and offer some reassurance here.

While we are on energy efficiency, it is one of the best ways to reduce reliance on fossil fuels, but the Government have failed on that over and again. Household energy bills are £1,000 more as a result, and earlier this month we had another reheated announcement with no new resources for energy efficiency. When are the Government going to get a grip on this issue?

As ever, the real problem with the Statement is everything that is not in it. New nuclear and Sizewell C in particular are indeed positive steps, but they are just one part of the pathway to net zero. They simply must be accompanied by a sprint for cheap, clean, homegrown renewables, yet all that we have seen recently instead is another round of government infighting, this time on onshore wind.

Just this week, new research from the ECIU has found that if the moratorium on onshore wind had not been put in place in 2015, turbines could have built to power 1.5 million homes through this winter, reducing the reliance on gas enough to heat more than half a million extra homes. The research also estimated that this will be costing £800 million on bills this winter, so why have the Government not yet cleared this up?

Unless the Minister answers that the Government will finally act in the national interest and end the ban, I am sure his argument will be that it is just up to local consent. But RenewableUK warned this weekend that a planning rule means that renewed permission must be sought from local authorities for every onshore wind farm after an initial 25-year lifespan, with at least two coming up for renewal next year. So we could see existing onshore wind farms starting to disappear, at a time when we desperately need more. It says that the UK could lose 2 gigawatts of capacity by 2032 because of this—more than 14% of the total from this energy source. So when will the Government finally bring the consenting regime in line with other infrastructure?

There is one more thing on onshore wind. In the other place on Tuesday, the Business Secretary suggested that one reason for avoiding onshore wind was that wind turbines are too big to be constructed onshore. As Greenpeace and Friends of the Earth said, this is complete nonsense. So can the Minister confirm whether the Government are aware that the biggest barrier to the development of onshore wind is not turbine size but their policy?

On solar, the story is the same. Back in August, the Prime Minister said he would

“protect our best agricultural land”

from swathes of solar farms—before an apparent change of tack. But just last month the new Environment Secretary repeated this sentiment. This would be a mistake: blocking solar risks preventing the equivalent of 10 nuclear power stations-worth of power being built. It is one of the most cost-effective ways that renewable energy technologies can be deployed today and, importantly, deployed rapidly, with sites able to begin supplying electricity to the grid within six months of beginning construction.

The Committee on Climate Change’s projections state that 40 gigawatts of installed solar capacity will be needed by 2030 to keep on track to achieve net zero by 2050. At the end of 2021, the total installed capacity of solar PV in the UK was under 14 gigawatts. The previous Environment Secretary wanted to block solar power on land entirely; the current one is openly hostile. Neither of these stances will allow us to build the necessary capacity to reach net zero by 2050, let alone any sooner. Will the Secretary of State therefore rule out the plans to block further solar power on land?

I have one final question. Amongst all this, oil and gas giants still enjoy a massive loophole for investing in more fossil fuels. Why do the Government think it right to be leaving billions of unearned, unexpected windfall gains in the pockets of oil and gas giants, forcing the public to pick up so much more of the cost of this support in higher borrowing and taxes in the future?

[Baroness Sheehan (LD)]

My Lords, I thank the Minister for bringing the Statement to the House. I of course also welcome the return of the Energy Bill.

I will start with nuclear, and the Government’s generosity with British taxpayers’ money in rebooting Sizewell C. I understand that common sense has prevailed: reports are circulating that China General Nuclear has been bought out. Can the Minister confirm that that has in fact already happened, and is not just an aspiration? Can he also comment on a recent article in the New Civil Engineer about fears of an 11-year delay to Hinkley Point C, on the back of news of a new contract between the Government and EDF, stipulating that Hinkley C will still be funded even if it does not start operating until 2036? If this were to be the case it would not be surprising, since no nuclear reactor has ever been built on time or on budget.

Finally on nuclear, the Secretary of State in his Statement cites it as a key plank in our bid for energy sovereignty. Can the Minister say where the raw uranium fuel for nuclear power generation originates from? The last time I looked, we do not mine any of it in the UK. I hope the Minister will agree that nuclear cannot be said to be the indigenous energy we need in the same way that energy farmed from our sun, wind and waves undoubtedly is.

Intermittency concerns about energy from renewables are often cited as a reason why nuclear is necessary. However, those concerns have been comprehensively debunked. There are many, much cheaper answers to intermittency if the Government were but minded to invest in them seriously. Energy storage is an example, including in the form of green hydrogen generated from the excess wind power that the grid is unable to harness in real time. There is also pumped hydro, more solar and onshore wind geographically spread out, marine energy, smart energy and demand management et cetera.

I have not even mentioned interconnectors. Can the Minister outline the Government’s view on the Morocco-UK interconnector power project? A project that is expected to provide low-cost, clean energy to more than 7 million UK homes by the end of 2030 with no taxpayer inputs and create 1,350 permanent jobs in the UK is surely worth a mention in any government energy Statement in 2022.

Moving on to fossil fuels, why do the Government persist in preferential treatment for the fossil fuel sector, for example, through subsidies? The OECD reports UK subsidies in 2021 of £200 million on decommissioning, £250 million on oil and gas investment, £1 billion on fuel oil, £1.5 billion on ring-fenced oil and gas trade corporate income tax relief and £2.1 billion on red diesel fuel. That is £5 billion of subsidies, which is unjustifiable.

On investment allowances, I agree with every word that the noble Lord, Lord Lennie, said. In the windfall tax paid by oil and gas extractors, they benefit from an investment allowance. However, no equivalent relief is available for renewable energy generators. This is nothing short of outrageous and will disincentivise investment in that sector.

Finally, on decommissioning, the subsidy regime may be even more costly than the £200 million reported by the OECD, because decommissioning relief deeds risk leaving taxpayers paying out to companies which never made a contribution to the Exchequer. That is madness. Can the Minister say to what extent the Exchequer is exposed to these types of deed? Currently we have no visibility of the assumptions behind those deeds or the liability that might result from them.

In conclusion, a Government who produce a Statement on energy needs which does not give immediate full-throttle support and investment impetus to energy efficiency of the built sector, on-ground solar, onshore wind and community energy projects are a Government who do not get the urgency of the situation the planet faces. The lack of ambition on energy saving is breathtaking. These are the low-hanging fruit which can do so much to wean us off expensive and immoral payments to the Russian pariah state as well as other unstable regions of the world. The Government could and should have done much more on these easy wins if they are serious about energy sovereignty. I am sure that many of these things will come up in the Energy Bill that we will debate next week.

Energy Bills Support Scheme and Energy Price Guarantee Pass-through Requirement (England and Wales and Scotland) Regulations 2022

Lord Lennie Excerpts

Tuesday 22nd November 2022 Grand Committee

[Lord Lennie (Lab)]

My Lords, first, I apologise for being slightly late in attending. I hope you will allow me to make the comments that I want to, in following up those from the noble Lords, Lord Hodgson and Lord Teverson.

I thank the Minister for his introduction to the SIs. They are regulations that seek to put right a substantial loophole in the arrangements set out under the energy price assistance scheme. As we have heard, this concerns customers who do not pay their energy directly but where, for instance, it is paid by an intermediary. These categories of consumer are at risk of not receiving the relief that should be guaranteed under the energy price support or for businesses under energy relief schemes. It is right that we should correct this, and quickly, so our support for these instruments is not in doubt.

The design of the SI to deal with all the problems is, however, somewhat at risk. Generally, the SIs require the intermediary to provide a fair and reasonable pass-through of what has been received for bills in the first instance—not necessarily the full amount but a fair and reasonable amount. This has the potential to give rise to complications. What is a fair and reasonable difference between what an intermediary receives and what it passes through? Perhaps the Minister, in his response, could explain what can be taken into account in establishing what is seen to be a fair and reasonable payment.

I understand that there is no sanction on any intermediary if it fails to pass on what it is supposed to pass on. As we heard from the noble Lord, Lord Hodgson, a customer’s redress is through the civil courts, and some draft letters have been provided for that to happen. But in the light of the comments by the noble Lord, Lord Hodgson, about the inequality of arms and so on, does the Minister believe there is any likelihood of a customer taking a landlord to court over a failure to pass through part or all of the payments they should have received? The Secondary Legislation Scrutiny Committee talks about the “inequality of arms”, and there is a massive gap in power between landlords and vulnerable tenants.

In the limited cases of district heating schemes, as we have heard, if the pass-through is not sufficient there is a recourse to the Energy Ombudsman, but this is not available in the majority of cases. Why is the ombudsman not available to all customers who do not receive the pass-through from their landlords?

Finally, given that these SIs seem unlikely to resolve all pass-through problems, will the Government commit to monitoring this and establishing exactly what the facts are on the ground—as the noble Lord, Lord Teverson, said, we are not entirely sure how many people will be in this situation? Will they, if necessary, review these SIs quickly thereafter to make them fit for all circumstances and pass-through payments?

[Lord Callanan (Con)]

I thank all three noble Lords who have contributed to the debate for their questions. These regulations are essential to the successful implementation of all the energy support schemes. They will help to ensure that the support reaches the intended beneficiaries. We are all agreed on that.

To continue to empower all energy consumers, we have provided more information via our online guidance, especially to some of the most vulnerable energy end-users, such as older people and those with disabilities. The Government will continue to engage with all relevant stakeholders in this sector, including the energy regulators, energy companies and civil society, on the delivery of the schemes—for example, SSE, Electric Ireland, Ofgem, the Utility Regulator of Northern Ireland, MoneySavingExpert and the Consumer Council. We will also continue to monitor the schemes to ensure that this support is provided to the people and businesses it is designed to help.

In addition—this responds to some of the questions raised—we are committed to reviewing the energy price guarantee and energy bill relief schemes by the end of the year, and of course we will work with stakeholders to ensure that their feedback is taken into account. We will use these reviews to consider how best to offer further support to the customers most at risk from energy price increases beyond April 2023. Looking ahead, the Government are working to deliver the energy bills support scheme alternative fund payments and the increased alternative fuel payment of £200.

My noble friend Lord Hodgson asked a question relating to the so-called inequality of arms—I completely understand the point he is making—and in particular the support for vulnerable people. The noble Lord, Lord Teverson, asked a related question on ensuring that end-users are aware of what they are entitled to. The regulations take this scenario into account. Where an intermediary receives energy support but has multiple end-users, the regulations say that it should determine a just and proportional method of dividing the benefit among those end-users, and clearly communicate how it has arrived at the amount allocated to the end-users.

Of course, we are keen to ensure that all end-users, including those who are vulnerable, receive the benefits of the schemes to which they are entitled. As such, we have been delivering and building a communications campaign. In addition, we have of course engaged with landlords, housing associations and charities that protect those who are most vulnerable.

For example, in developing the energy bills support scheme, we regularly engage with consumer groups and charities precisely to ensure that the scheme reaches the groups most in need and that we reach vulnerable consumers across the UK via a broad suite of communication channels. As well as working with charity and consumer groups, we work with stakeholders including local authorities, faith groups, the rural network and food banks to help disseminate information about the scheme and how it works.

We also recognise that many vulnerable consumers are on traditional prepayment meters. We have a communications campaign outlining the actions that these people need to take to receive their discount. For example, we have made details available via social media posts, radio broadcasts and posters translated into several languages.

In response to the question from my noble friend Lord Hodgson about compliance, the EBSS has a robust compliance and monitoring framework. Data has now been published showing that, in the first month, 97% of payments were successfully delivered to eligible households in England, Scotland and Wales. Where a supplier appears to be falling behind expectations, we will engage directly with them and ensure compliance. We will publish monthly updates until the end of this scheme. The EPG and the EBRS also have robust monitoring and evaluation in place to ensure that the schemes are operating effectively. As I said, they will be subject to review by the end of the year.

The noble Lord, Lord Teverson, asked about how we divide the scheme benefit between end-users. For the EBRS, the obligation is on the intermediary to pass on the benefits of the scheme, not the energy retailers themselves. The noble Lord will recall that the EBRS is a discount that is applied to the unit price of gas and electricity; it is not a direct payment to the suppliers. The energy suppliers will provide the appropriate EBRS price reduction to their customers, some of whom will be intermediaries, based on their contract type. Intermediaries will then be expected to pass on to their end-users a just and reasonable amount. That would be the case in the majority of park homes, where the site owner is on a commercial tariff.

The noble Lord, Lord Teverson, also asked me how park home residents will receive the payment. As I said, the majority of those households receive their energy bill support scheme payment automatically via their domestic energy supply contract. However, a small number of households do not have a domestic energy supply contract and, as such, will receive the £400 in funding through alternative funding mechanisms; it will not be delivered through electricity suppliers. We are currently working with delivery partners to make sure that the £400 support is provided to households at their primary residence. This includes those who do not have their own direct domestic electricity meter or a direct relationship with an energy supplier, including park home residents.

In response to the noble Lord, Lord Lennie, who asked what a “just and reasonable” amount might be, the regulations go further than simply setting out the just and reasonable test: they have been drafted to give examples of what is just and reasonable. Intermediaries are obliged to provide details to end-users setting out why they consider what they have done to be just and reasonable. The guidance published alongside the regulations gives further colour to the concept.

Intermediaries must pass on the discount irrespective of how the end-user pays for their energy use. They can adjust the amount that they pass on based on their charges to end-users; crucially, they have to demonstrate to end-users that this amount is just and reasonable. Intermediaries can take into account the extent to which they have increased their charges to end-users as a result of the energy crisis. For example, if the intermediary has shielded their end-users from the impact of increased energy prices, in those circumstances, it may be just and reasonable for them to retain some or all of the scheme benefit. The circumstances will be very individual.

--- Later in debate ---

[Lord Callanan (Con)]

The answer to my noble friend’s question is that there is already a regulator in place for heat networks, so it is appropriate to use the regulator. Unfortunately, for most of the other circumstances there is no regulator in place, which is why we have had to default to the court process. I totally accept his point about the inequality of arms. I am not unrealistic about the difficulties that many tenants and others will face in trying to enforce their rights under this, but all we can do is put the regulations in place, publicise them and make sure that people know their rights. We will keep the scheme under constant review. We will ensure that the payments are passed through and that people receive the benefit to which they are entitled. We will not hesitate to act further if there is widescale avoidance of this responsibility.

[Lord Lennie (Lab)]

Following up the point from the noble Lord, Lord Hodgson, is there then a possibility in the review that an ombudsman for the energy sector —not Ofgem—could be established or that the heat regulator could cover energy? I am not saying that that is going to happen, but it is a possibility. Secondly, the Minister kept saying that landlords “must pass on”, but if they fail to do so there is no sanction in the legislation; they just do not pass it on and they get away with it. Should there not be some sort of sanction for landlords if they fail to pass on just and reasonable costs to consumers?

[Lord Callanan (Con)]

The sanction is that the person who does not receive the benefit can take the matter to court. That is the point I am making. I am not pretending that this situation is ideal, but many landlords, charities and others involved in the sector are, by their very nature, not subject to energy regulators. Of course, if they are energy supply companies, such as heat networks, they are regulated by Ofgem, which is the energy regulator. All these intermediaries encompass a range of operators, from park home operators to landlords of houses in multiple occupation. It is difficult to see how we could establish an overall regulator for all these different circumstances, particularly as the whole thing is only temporary, for as long as the support scheme lasts.

We have attempted to address the situation as well as we can, by providing the appropriate guidance and by making sure people have access to enforcing their rights. I do not pretend to disagree with noble Lords that the situation is not ideal, but we have addressed it as best we can. I commend the regulations to the Committee.

Newport Wafer Fab

Lord Lennie Excerpts

Tuesday 22nd November 2022 Lords Chamber

[Lord Lennie (Lab)]

My Lords, the House of Commons Foreign Affairs Committee found no evidence to suggest that a review into the acquisition of Newport Wafer Fab had taken place, yet Politico reports that the Government’s National Security Adviser concluded that there were not enough security concerns to block it. Will the Government confirm on the record whether the review that was promised by the then Prime Minister Johnson took place or not? The same Foreign Affairs Committee warned that the sale of Newport Wafer Fab potentially compromises national security and is the loss of a prized asset to a competitor amid a global shortage of semiconductors. Given the sale has not been blocked, what steps are the Government taking to mitigate these risks?

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

My Lords, obviously, there is a limit to what I can say about this, but I will endeavour to be as helpful to the House as possible. I certainly can confirm to the noble Lord that the review did take place and was one of the factors that the Secretary of State took into consideration when he made his decision. It was made in a quasi-judicial manner and the Secretary of State considered that a risk to national security had arisen from the trigger event, which is why he made the order that he has.

Republic of Ireland and Northern Ireland: Energy Supply Shortfalls

Lord Lennie Excerpts

Monday 21st November 2022 Lords Chamber

[Lord Callanan (Con)]

The Rough facility is working again, which was a commercial decision taken by the operators. The noble Lord is right about the overall quantity of supply but, of course, the countries he mentioned have no indigenous supplies of their own. We are very fortunate that some 40% of our supplies come from the North Sea.

[Lord Lennie (Lab)]

My Lords, with the uncertainties that exist around gas supply and demand this winter and, given that 84% of supply to Northern Ireland comes through the Moffat pipeline from Scotland, can the Minister assure the House that sufficient contingencies are in place between the UK and Irish Governments to meet any significant variations in demand or supply?

[Lord Callanan (Con)]

I refer the noble Lord back to the Answer that I gave to the noble Baroness, Lady Ritchie. We are of course extremely concerned about the upcoming winter. Many emergency drills have been held and we are in close contact with operators both in Northern Ireland and in the Republic of Ireland. I am pleased to say that co-operation is very good.

Energy Bill Relief Scheme Regulations 2022

Lord Lennie Excerpts

Wednesday 16th November 2022 Grand Committee

My second question is on the issue of fraud. I cannot remember where it was in the Explanatory Memorandum, but I welcome the fact that that is discussed in these papers. It must be relatively easy to police this scheme to make sure that retail energy companies pass on the money to consumers. I do not see that as a big issue; it is relatively easy. However, the other area that was brought up is where landlords effectively pass on an electricity cost separately to their tenants. As the Minister will know, often for small businesses the balance of power between landlord and tenant is very much in favour of the landlord, and often tenants do not want to have arguments with their landlords. The paper suggests that the department will keep a close eye on that. I do not understand how that can happen. I am not saying that that will be an easy area of policing, but I would be keen to hear the Minister’s opinion on how that would be policed and enforced, given that asymmetric power that often is in that relationship. However, I welcome the secondary legislation.

[Lord Lennie (Lab)]

My Lords, first, I thank the Minister for bringing forward the instruments today and thank the stalwarts of the energy debates, the noble Baroness, Lady McIntosh, and the noble Lord, Lord Teverson, for their questions and comments, which I am sure will be responded to.

These are the first two instruments from the Energy Prices Act, which we debated recently. We supported the Bill during its passage and appreciate the pressing need to have these arrangements in law as soon as possible. As such, we will not be preventing the passage of these instruments. This also means that many of the points that we have made in regard to these instruments have already been debated in passing the Energy Prices Act. I will not spend time dealing with that and repeating points but rather will focus on the specific contents of the instruments before us today, not least as we will be considering more before too long.

As we have heard, between them these two instruments make provision for the implementation of the energy bill relief scheme—the EBRS—for non-domestic customers across the UK, with powers derived from the Energy Prices Act: Section 9 for Great Britain and Section 11 for Northern Ireland. To comment on a point that the noble Baroness, Lady McIntosh, raised, what these instruments do not do is to set out the exact terms of the scheme, neither for the first six months, which is now clear, nor for the following 18-month period that the Act allows these powers to provide for. We now know the Government’s plans for the first six months—they were recently revealed—but we have heard little on their plans for the period thereafter. Like the noble Baroness, Lady McIntosh, if the Minister is able to, I would appreciate it if he could elaborate on what is proposed, or at least update us on the progress of their consideration as to what might happen for the latter part of the period that this Act governs.

Part 3 of the instrument relates to discount recovery, on which I have a small item to raise. I understand that Energy UK previously expressed concerns to the Minister about the arrangements in this part. Its interpretation is that energy suppliers would not receive financial cover to cover the difference between normal and capped unit rates, which is inconsistent with what the Energy Prices Act suggested. That issue appears to have been fixed, which is welcome, but it is troublesome that it was not the case from the outset. I am keen to hear an explanation from the Minister of how these issues emerged and some reassurance that, in action, energy companies will have no difficulty receiving their entitlements.

I also understand that the consultation to resolve the issue took place under non-disclosure agreements, which not only is concerning in itself but, as Energy UK raised, often means that not all suppliers are included in talks and that the industry cannot work together with the Government to come to the best solutions. This seems neither a sustainable nor an effective way of creating policy.

Part 5 of the instrument, which relates to qualifying financially disadvantaged customers, requires the Secretary of State to make rules about further reductions that the suppliers must apply to the amounts payable of these customers within 14 days of the scheme’s introduction date. As the Explanatory Memorandum says,

“The current levels of many deemed and out-of-contract tariffs mean that, even with the discounts provided by the rest of the EBRS scheme, these customers … would often still experience particular difficulty in obtaining a supply of energy at a reasonable rate”.


It is welcome that additional support will be set out. However, given the situation, waiting until 14 days after the scheme’s introduction does little to offer reassurance to these customers and makes it difficult, if not impossible, for your Lordships to scrutinise the plans. Perhaps the Minister could give some advance notice of the Government’s plans for this section.

Before I finish, I briefly revisit one broader area from the Energy Prices Act, regarding the powers of the Secretary of State, some of which allow them to escape secondary legislation. Of course, that is not the case here, as we are debating secondary legislation, but I use this opportunity to repeat our regret that other significant powers given by the Act are not subject to parliamentary debates such as this.

[Baroness Hoey (Non-Afl)]

My Lords, could I intervene before the Minister responds? I have carefully gone through the Energy Bill Relief Scheme Regulations 2022 and the Energy Bill Relief Scheme (Northern Ireland) Regulations 2022, which are about the same thickness, to see where the differences are. Obviously, we know that the situation is different in Northern Ireland, so there have to be some differences, but it would be helpful if, in winding, the Minister could clarify any substantial differences between how the scheme is going to work in Northern Ireland and in the rest of the United Kingdom. As the Minister is aware, we in Northern Ireland are always wary of being treated slightly differently for some unknown reason that we find out about later. I appreciate that there have to be separate regulations on this, but I would appreciate clarification on any substantial differences.

Energy Prices (Domestic Supply) (Northern Ireland) Regulations 2022

Lord Lennie Excerpts

Wednesday 16th November 2022 Grand Committee

[Lord Teverson (LD)]

I absolutely agree with the noble Baroness. There were no implications at all. I was trying not to say “the United Kingdom”, because the system is different from that in Great Britain. I thank her for that.

I think that I have made my point. I am interested to understand whether there is any issue between the two sides of the border in terms of what is a single market.

[Lord Lennie (Lab)]

My Lords, I thank the Minister for bringing the regulations before us and the noble Lords, Lord Browne, Lord McCrea and Lord Teverson, for their comments and questions. I thank the noble Lord, Lord Browne, in particular for clarifying the depth and strength of the market in Northern Ireland. I was going to say that the regulations were not contentious, but there is a bit of contention and, no doubt, the Minister will deal with that.

The instrument defines the terms “NI domestic electricity supply” and “NI domestic gas supply” to scope the extent of premises that will be eligible. Specifically, this is to include some non-domestic premises which due to their similar metering and tariff arrangements would receive EPG support. Given there is no way for energy suppliers to disaggregate, it is difficult to disagree with this. I would be keen to hear from the Minister the scope of this impact, both in terms of the number of non-domestic premises and any additional costs incurred.

The Explanatory Notes use places of worship as an example, as did the Minister, but what other types of non-domestic premises are included? Perhaps we could turn to the experts from Northern Ireland to help us with this.

I would like to raise an issue that was brought up in the other place during the debate on this instrument on Monday. There is a scheme document linked to this instrument, headed “Establishment of domestic electricity price reduction scheme for Northern Ireland”, which in Schedule 5 states that the Government will require suppliers of electricity to hand all meter data to the Government for the purposes of regulating and discussing the domestic supply scheme.

This data will encompass many things; it will be held by the Government for 10 years and can be shared with other departments, law enforcement agencies, regulatory bodies and others. While it is not pertinent to today’s instrument, this is the same for rest of the United Kingdom in the respective document. This appears to be a breach of the data access and privacy framework which was produced when smart meters were first rolled out. It states that smart meter data is the property of the customer and can be disclosed to third parties, including the Government, only with their consent. I understand the Minister in the other place committed to write to Dr Alan Whitehead MP on this issue and I would appreciate it if the Minister could ensure that I receive the same response.

[Lord Callanan (Con)]

I thank all noble Lords for their contributions to the debate. The Government have implemented the EPG Northern Ireland scheme to ensure that consumers are protected from excessively high energy bills over the winter period, and I am sure that is something the Committee supports. The Committee will be reassured to know the scheme is already in force and delivering support to households across Northern Ireland. I hope this will also go some way to assuring the public that the Government are committed to taking decisive action to deal with the energy crisis.

As well as providing immediate relief, this scheme, alongside the EBRS, will support economic growth and limit inflation caused by increasing energy bills and their knock-on impact on prices, labour, goods and services. The scheme has been designed to operate robustly and guard against fraud and gaming, and we will continue to monitor the schemes to ensure that support is provided and limited to those people and businesses who it is designed to help. We are committed to reviewing the schemes and we will consider how best to offer further support to the customers who are most at risk to energy price increases beyond April 2023.

In response to the questions raised, I will concentrate first on the point made by the noble Lord, Lord Browne, about heating oil. The noble Lord will be aware—and this was raised also by the noble Lord, Lord McCrea—that the alternative fuel payment will provide £100 to support households who do not use mains gas for heating. This alternative fuel payment is in addition to the £400 that households will receive through the energy bills support scheme. This applies in Northern Ireland and is designed to compensate for the rise in the price of heating oil from October 2022 in a way that is equivalent to the support received by people who heat their homes using mains gas and receive their support via the energy price guarantee. As the £100 alternative fuel payment is designed by reference to the increases in the price of heating oil and other alternative fuels that happened from September 2021 to September 2022, the Government are committed to continuing to monitor the prices over the coming months and we will consider further intervention if it is required to protect UK householders from extraordinary fuel prices.

The noble Lord, Lord Browne, further asked about unregulated electricity providers in Northern Ireland. Of course, the regulation of prices is a matter for UR, the regulator in Northern Ireland. The noble Lord is right that some electricity suppliers in Northern Ireland are not price regulated. It is a competitive market, but the EPG applies to all suppliers equally—the same discount applies to all.

The noble Lord, Lord McCrea, asked for clarification on backdated payments. The £400 EBSS will not be backdated, as it is paid as a flat sum. The EPG is, of course, backdated via an additional pence-per-kilowatt payment on top of the base EPG rate from November to March.

The noble Lord, Lord Teverson, also raised a point about the particular predominance of the oil provision in Northern Ireland; I think that I answered that in response to the noble Lord, Lord Browne. On the point regarding the single electricity market in Northern Ireland, there is no problem here. The measures that we are implementing are designed to support domestic consumers in Northern Ireland at the supply level as they relate to the retail market and do not impact on the underlying wholesale market. Therefore, they have no effect on the workings of the single electricity market.

The noble Lord, Lord Lennie, raised a point about metering and tariff arrangements and the scope of the impact on the number of non-domestic premises that have been brought into the EPG. In addition to places of worship, he questioned what other premises are included. I can confirm to him that some farms and small businesses are included. In respect of small businesses, it is those that are operating from former dwelling-houses. In reality, very few premises are affected—possibly fewer than 100 non-domestic premises are in scope—and the EPG and the EBRS of course provide equivalent support.

The noble Lord went on to ask about meter data. We are continuing to plan for and assess the use of personal data provided under the scheme documents in Northern Ireland and Great Britain. Obviously, as part of this work we will ensure that we comply with any relevant legal duties under the smart meters Data Access and Privacy Framework, so the data will be used only when necessary to calculate support payments and, of course, to ensure the good use of public money, which I am sure the noble Lord will support.

With that, I think I have answered all the relevant questions—

Prescribed Persons (Reports on Disclosures of Information) (Amendment) Regulations 2022

Lord Lennie Excerpts

Tuesday 15th November 2022 Lords Chamber

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

My Lords, these regulations were laid before the House on 17 October 2022. The changes made by the statutory instrument before the House today are necessary as a result of changes made through another SI, also laid on 17 October: the Public Interest Disclosure (Prescribed Persons) (Amendment) Order 2022. Among other changes, that order made Members of the Scottish Parliament prescribed persons and removed the European Securities and Markets Authority as a prescribed person for whistleblowing.

The regulations before the House today make two subsequent changes. First, they exempt Members of the Scottish Parliament from the duty that most prescribed persons are under to report annually on the whistleblowing disclosures that they have received. Secondly, as it will no longer be a prescribed person, the regulations remove the European Securities and Markets Authority as a body exempt from the reporting requirements.

The Employment Rights Act 1996, as amended by the Public Interest Disclosure Act 1998, enables workers in all sectors to seek redress if they are dismissed or suffer detriment at the hands of the employer because they have blown the whistle. Workers who believe that they have been dismissed or otherwise detrimentally treated for making a protected disclosure can complain to an employment tribunal.

As I set out earlier, the changes in the regulations before the House today are necessary as a result of changes made in the Public Interest Disclosure (Prescribed Persons) (Amendment) Order 2022. I am pleased to say that the Public Interest Disclosure (Prescribed Persons) (Amendment) Order 2022 makes a number of significant additions to the list of prescribed persons. It adds the Drinking Water Inspectorate, the Office for Environmental Protection, Environmental Standards Scotland, Social Work England, all 129 Members of the Scottish Parliament, the Scottish Public Services Ombudsman and the natural resources body for Wales.

The SI also removes the European Securities and Markets Authority as a prescribed person. This reflects the fact that, since EU exit, the relevant regulatory responsibilities have been assigned to the Financial Conduct Authority. Consequently, disclosures that could previously be made to the European Securities and Markets Authority will now be made to the FCA.

The overall effect of the statutory instrument is that more workers will be able to blow the whistle to a relevant prescribed person. This not only ensures that the worker making the disclosure is more likely to qualify for employment protection but means that those regulators and public bodies will benefit from receiving valuable intelligence.

The SI before the House today concerns the annual reporting requirement that most prescribed persons are under. It was introduced in 2017 and requires most prescribed persons to publish an annual report on whistleblowing disclosures made to them by workers. The requirement introduces greater transparency around the work of prescribed persons to increase confidence among whistleblowers that their disclosures are taken seriously and action is taken where appropriate.

The requirement also supports greater consistency across different bodies in the way they respond to disclosures. A small set of prescribed persons is exempt from the reporting requirement, such as Members of the House of Commons and Welsh and Scottish Ministers. These prescribed persons are exempt as, obviously, they do not have a regulatory function. Instead, they are prescribed due to their distinctive and key role in aiding constituents on whistleblowing matters and supporting them to make a disclosure to a regulatory body, as relevant.

The SI amends the list of prescribed persons exempt from the reporting duty in two ways. First, it adds Members of the Scottish Parliament to the list of prescribed persons exempt from the reporting requirement. This will ensure that MSPs will be able to fulfil their new role in a proportionate manner and means that they will be prescribed on the same terms as Members of the House of Commons. Secondly, as I said, the SI removes the European Securities and Markets Authority as a prescribed person exempt from the reporting requirement. This is necessary because, as I explained, the ESMA is being removed as prescribed person.

To conclude, the Government value the role of whistleblowers in bringing wrongdoing to light. The effect of the Public Interest Disclosure (Prescribed Persons) (Amendment) Order 2022 and the Prescribed Persons (Reports on Disclosures of Information) (Amendment) Regulations 2022 will be to bring the list of prescribed persons up to date and ensure its effective operation. This will mean that whistleblowers across Great Britain have a greater opportunity to report on wrongdoing that they witness at work while qualifying for employment protection.

It is of course important that this list operates in a manner that is proportionate and effective. In particular, it is right that Members of the Scottish Parliament are exempt from the reporting duty that prescribed persons are under. I therefore commend this regulation to the House.

[Lord Lennie (Lab)]

My Lords, I thank the Minister for bringing the regulations to the House, and I will also be brief in my remarks on this entirely sensible instrument. As we have heard, it amends the Prescribed Persons (Reports on Disclosures of Information) (Amendment) Regulations 2017 to exempt Members of the Scottish Parliament, who are being added as prescribed persons to the Public Interest Disclosure (Prescribed Persons) (Amendment) Order 2022, from the requirement to report annually about the public interest disclosures that they receive from workers. It also makes a further amendment to the 2017 regulations to reflect the fact that the European Securities and Markets Authority is being removed as a prescribed person.

The Public Interest Disclosure (Prescribed Persons) Order 2014 prescribed persons to be recipients of whistleblowing disclosures for the purpose of Part 4 of the Employment Rights Act 1996. The 2017 regulations created an obligation on prescribed persons to report annually about what public interest disclosures they receive from workers. They also exempted prescribed persons from the obligation by excluding them from the definition of “relevant prescribed person” in Regulation 2. The 2022 order is amending the 2014 order to add Members of the Scottish Parliament as prescribed exempted persons and to remove the European Securities and Markets Authority.

This follows on a call for evidence in 2013 by the then Department for Business, Innovation and Skills about introducing an obligation on most prescribed persons to report annually on the whistleblowing disclosures they received. The intention was to increase confidence that whistleblowing disclosures were and are looked into and to drive up transparency across how prescribed persons are handled.

The MSPs are not the regulators of a sector or specific type of wrongdoing, and there is an interest in ensuring that they are not burdened with the administrative requirement to produce annual reports, as is the case with MPs. As such, they have been added to the list of those exempted from producing these reports. The European Securities and Markets Authority is being removed as a prescribed person from the 2022 order to reflect the fact that, since EU exit, the relevant regulatory responsibilities have been assigned to the Financial Conduct Authority. Consequently, it should be removed from the list of prescribed persons exempt from the reporting duty.

[Lord Callanan (Con)]

My Lords, I am very grateful to the noble Lord for his support. This is entirely uncontroversial and there are no questions, so I commend the regulations to the House.

Climate Change (Targeted Greenhouse Gases) Order 2022

Lord Lennie Excerpts

Tuesday 15th November 2022 Lords Chamber

[Lord Teverson (LD)]

My Lords, I have to admit that I never came across nitrogen trifluoride in my chemistry lessons, or at all before I read this SI. Although I very much accept the Minister saying that we have very small emissions in this area, as he says, it is some 17,000 times more potent than CO₂. It also lasts in the atmosphere for something like 500 years.

What I do not understand is how we measure these emissions. They are used in LCD screens. Although we do not manufacture many of those in this country, can the Minister explain whether this gas escapes in disposal of those electronic items, and whether we then measure that? Our consumption of those products is much greater than our production, so I would be interested to understand how that works and whether we have a bigger problem than he stated. I am not saying that this is the case but am trying to understand. If it is the case, do the Government have any means to manage this? Also, the SI mentions pensions. The Minister did not mention anything about this. Why are the regulations on those coming along later, as I understand it from the Explanatory Memorandum, rather than now?

The major thing that I want to understand, which the Minister mentioned, is the contradiction in the context given in the Explanatory Memorandum, paragraph 6.4 of which says:

“As of 2021, all international reporting practice has been to include NF₃ as a targeted greenhouse gas.”


However, paragraph 7.2 says:

“In 2013, the UNFCCC mandated the inclusion of NF₃ in all national greenhouse gas inventories”.


Therefore, I am rather confused as to whether this all happened in 2021 and will be reported in 2023 or whether we have done all this since 2013. It would be useful to understand that.

[Lord Lennie (Lab)]

My Lords, I thank the Minister for introducing this statutory instrument, and send apologies from my noble friend Lady Blake, who was due to be here but is currently supervising the birth of her latest grandchild—good luck with that.

The instrument extends the scope of emissions captured and reported under the Climate Change Act 2008 by including nitrogen trifluoride—I had not heard of it either, until yesterday when preparing for this—as a targeted greenhouse gas. Following on from the point made by the noble Lord, Lord Teverson, I point out that this means that NF₃ emissions will be included within the scope of emissions for the annual statement of emissions for 2021, to be published by 31 March 2023, the full accounting period for the UK’s third carbon budget—CB3—and for subsequent carbon budgets. I am not sure whether that is the answer, but that is my understanding of what we are dealing with.

We on this side of the House have no objections to this instrument, but we have some questions. The Climate Change Act requires the Secretary of State to reduce the amount of net UK carbon emissions to at least 100% below the 1990 level, and to set a carbon budget for each five-year period, to report each year in line with international reporting practices. As we have heard, NF₃ has a global warming potential that is 17,000 times or thereabouts greater than carbon dioxide, although I am not sure that you can smell it, taste it or see it. Therefore, it is right to include it in the annual emissions reporting.

The Climate Change Committee highlighted that the volume of current NF₃ emissions is so low that it is not likely to impact on achieving the 2050 target, as the Minister said in his introduction. However, I am interested in whether the Government have made any assessment of the likelihood of this changing and whether there should be any increase in NF₃ emissions. Also, what is likely to affect the increase in NF₃ emissions into the atmosphere?

As we are coming to the end of the third carbon budget period, I would appreciate it if the Minister could update the House on the current expectation going into the fourth period next year. Given that these budgets were set long in advance—the third in 2008 and the fourth in 2011—they require long-term policy planning, and while the Climate Change Committee in June this year stated that the prospects for meeting the fourth are better than for meeting the fifth and sixth, it has also highlighted the dependence on short-term macroeconomic trends and the extent to which emissions rebounded following the pandemic.

On a wider note, the Climate Change Committee’s report in June emphasised that delivery is undermining the Government’s policy ambition. What steps are the Government taking to address this and to ensure that the positive words are met with the required delivery actions? The report also emphasised that action to address the rising cost of living should be aligned to net zero, yet we have seen the Government favouring non-renewables, with their loopholes to the oil and gas levy, while continuing their apparent ban on onshore wind.

We have asked for this to be considered many times, but I would be interested to hear the Government’s assessment of the impact that these decisions will have on their ability to hit forthcoming carbon budgets.

[Lord Callanan (Con)]

First, I thank all noble Lords for their contributions to this debate. The points raised demonstrate the need for the Government to continue to press ahead with our world-leading climate goals.

The Climate Change Act was indeed a landmark piece of legislation globally, placing the UK at the forefront of climate change action. The Act requires the Government to ensure that our emissions reporting meets standards set internationally. I am proud that this Government are doing exactly that in bringing forward this legislation, and that was recognised by both speakers.

It is worth restating my thanks to the Committee on Climate Change for its support, advising on this legislation and its compatibility with those carbon budgets already set. I further thank our devolved Administrations for their responses to the consultation on this order and, as I said, to the Welsh Minister for Climate Change for her support in bringing forward the statutory instrument consent memorandum in the Senedd.

The Government are intent on delivering a UK economy that is greener, more sustainable and more resilient. Having handed over the presidency of COP 26, we will work with this year’s presidency, Egypt, to make sure that international commitments secured at COP 26 under the Glasgow climate pact are honoured.

The pact remains the blueprint for accelerating climate action in this critical decade to keep 1.5 degrees centigrade in reach. This is a pivotal moment to redouble our efforts, resist backsliding and ultimately go further and faster using the Glasgow and Paris commitments as the baseline of our ambition. Domestically, we will continue to keep abreast of developments and make improvements where needed to ensure that the Climate Change Act 2008 continues to provide the basis for our world-leading, legally binding emission-reduction targets.

The noble Lord, Lord Teverson, asked a very reasonable question: why are we only now reporting on NF₃ from 2020-21, when we have previously included it from 2013 in the Explanatory Memorandum? The Government have been reporting NF₃ emissions in their official statistics and as part of our international reporting obligations since 2015—with a two-year lag—when nitrogen trifluoride was included under the United Nations Framework Convention on Climate Change guidelines. This legislation extends that reporting to statutory reporting requirements to ensure that NF₃ emissions can be captured by our domestic as well as international reporting. Given the high potency of NF₃, we must recognise the importance of ensuring that we reduce its impact through its inclusion in our climate targets.

The noble Lord, Lord Lennie, posed a number of other questions. If the noble Lord will forgive me, I will come back to him on those in writing. I commend this order to the House.

Government Departments: Communication with Industry and Commerce

Lord Lennie Excerpts

Monday 14th November 2022 Lords Chamber

[Lord Callanan (Con)]

Of course we need action. I agree with the noble Lord on that, and we will hear the Chancellor’s latest proposals on Thursday. It is a difficult issue that needs resolving, but one of the consequences of our record low levels of unemployment is skills shortages. However, we have a skills plan to invest across the whole range of the economy to make sure that we have the skills we need.

[Lord Lennie (Lab)]

My Lords, the Financial Services and Markets Bill received significant submissions of written evidence from business, industry and commerce, including many from the City who welcome the Bill but call for a number of commitments on the transition from EU to UK regulation. Recent government actions have undermined faith in the City, at a time when we need to listen closely to our world-class financial and professional services. What assessment have the Government made of submissions to the Bill and what further steps will they take to engage productively as it continues its passage through both Houses?

[Lord Callanan (Con)]

I agree with the noble Lord on the importance of our world-class business and professional services in the City of London. Perhaps he can have a word with his noble friend about the importance of these industries to the country. Of course, we will continue to liaise with all City firms; we will not always agree on everything, because appropriate regulation is important, but we will continue to liaise with them.