Cement Industry: Carbon Dioxide

Lord Lennie Excerpts

Wednesday 12th July 2023 Lords Chamber

[Lord Callanan (Con)]

That is one of technologies we are looking at. We also gave £3.2 million to the Mineral Products Association to develop a low-carbon fuel mix for cement. It held a trial at Hanson’s Ribblesdale plant and Tarmac’s Tunstead plant using a mix of 100% net-zero fuels, including hydrogen.

[Lord Lennie (Lab)]

My Lords, I too agree with the Minister that the concrete industry accounts for approximately 1.5% of emissions in this country. Globally, the figure rises to 8%, as the noble Lord, Lord Lucas, said. Last year, a report from the Low Carbon Concrete Group suggested that the UK concrete industry could become a carbon sink by the 2040s. Welcome though this prediction is, we must recognise that this is a global problem. What steps are the Government taking to encourage other countries to set out and achieve similarly ambitious goals?

[Lord Callanan (Con)]

Both the Liberal Democrats and Labour agreeing with me is destroying my credibility on this side of the House. I agree with the noble Lord; we are seeking to work with other countries as well. One of the issues in the sector, as we look to reform the ETS, is carbon leakage. We must make sure we do all we can to avoid it.

Geothermal Heat and Power

Lord Lennie Excerpts

Thursday 6th July 2023 Grand Committee

[Lord Lennie (Lab)]

My Lords, I, too, am grateful to the noble Lord, Lord Cameron, for setting up this debate. Geothermal energy offers opportunities as a sustainable and reliable energy solution. We all know that, with possibly one or two exceptions, a decarbonised power system is the key to us achieving net zero. This means that our Government, whoever they are, must give focus to different low-carbon solutions. The current Government are simply not doing enough of this.

One of the potential solutions is geothermal energy. It is regarded as environmentally friendly because of its lower greenhouse gas emissions compared with carbon-based sources, minimal air pollution, efficient energy conversion, lower water use than other conventional technologies and reduced land requirements. It is also considered a renewable source of energy that harnesses the earth’s natural heat to generate power. This heat is continually renewed through geological processes, such as radioactive decay, and residual heat from the planet’s formation.

It is argued that geothermal energy projects not only contribute to emissions reductions but provide job opportunities across the supply chain. As has been said, in Germany the geothermal industry has generated €14.9 billion for the economy and created 24,000 jobs this century. In the Netherlands, which was also cited by the noble Lord, Lord Cameron, there are claims that for each direct geothermal job a further two or three indirect jobs are also created. According to the International Energy Agency’s 2021 geothermal Annual Report, this country has an estimated 43,700 GSHP systems installed which generate approximately 1,330 gigawatt hours of energy per year, which is less than 0.3% of the annual UK heat demand. By comparison, Germany had more than 440,000 systems installed in 2020, while France had around 210,000 systems.

What is geothermal energy? We have heard that shallow geothermal systems typically involve the use of ground source heat pumps to modify the temperature obtained from the resource, but just last week it was reported that the Government’s boiler upgrade scheme managed to award only half the number of grants to help households it targeted switch from boilers to heat pumps. The £70 million left over from this policy due to grants not being issued cannot be used in future years and will be returned to the Treasury.

In order to meet the UK’s climate change targets, the Government want to install 600,000 low-carbon heat pumps annually, but the current rate is about one-ninth of that. In December 2022, the House of Lords Environment and Climate Change Committee launched an inquiry into the boiler upgrade scheme and found that the scheme was seriously failing to deliver on its objectives, with a disappointingly low take-up of grants. The committee called on the Government to take a number of steps: to provide clear guidance and information to industry and consumers regarding viable options for low-carbon home heating; to roll over the remaining budget from the first year of the scheme into the second year; and to establish a review to consider an extension to the scheme. Have the Government responded to these asks from the committee?

Deep geological systems are, as the name implies, at greater depth where the heat is more intense but cost significantly more to produce. By way of an example—we have also heard Redruth being cited—there is an active project in Auckland in the north-east of England. It will involve geothermal energy being sourced four miles underground. The water temperature is 73 degrees centigrade at Auckland Castle, and there is the aim of ensuring that Bishop Auckland becomes the first fully decarbonised town. That is exactly the sort of project the Government should be investing in if levelling up is to have a real practical meaning, particularly in former mining communities such as those in the north-east.

The House of Commons Environmental Audit Committee has judged that the Government have been slow to exploit the potential of geothermal energy and have not integrated it fully into the net-zero strategy. It went on to argue that the Government appear to be holding back a sector which could have a transformative effect upon the UK’s capacity to meet climate goals and grow the economy. With the Government missing their target towards achieving their aims, without a change of direction, geothermal energy will remain a peripheral influence.

Electricity Capacity (Amendment) Regulations 2023

Lord Lennie Excerpts

Wednesday 5th July 2023 Grand Committee

[Baroness Walmsley (LD)]

My Lords, I inform the Committee that I have a close family member who works for Ofgem. He is responsible for energy security and has been making plans for next winter, but I have not discussed this SI with him.

The capacity market, brought in by a Liberal Democrat Secretary of State, has been a great success. This statutory instrument aims to continue that success by improving the processes and reducing the administrative burden. We are all in favour of that, especially the flexibility that makes it easier to transfer from capacity market schemes to contracts for difference, where appropriate. However, I have a few questions for the Minister about the scheme in general.

First, how well are the Government succeeding in minimising the use of fossil fuels in the capacity market? What percentage is expected to be clean energy, and within what timescale? I was glad to hear the Minister say in his introduction that there will be an emissions limit on those applying.

Secondly, what is the Government’s aim for enabling demand reduction, and what percentage of bids do they want to see for the demand-side reductions? This is just as important as generation if we are to decarbonise and reduce the potentially enormous grid capacity increase needed to reach net zero. How many of the successful companies in offshore wind round 4 auctions have reached financial close for their projects—that is, they have agreed their financing requirements to deliver the scheme with financial institutions? As I understand it, only one successful bidder has yet managed to reach financial close on their project, so the whole programme of offshore wind coming on stream is coming to a halt.

Moray West offshore wind farm, owned by Ocean Winds and minority shareholder Ignitis Group, has secured £2 billion of non-recourse project finance. Initially, bids were famously low, but with inflation now across the supply chain, perhaps the numbers do not add up for most of the schemes. How are the Government going to solve this? Given the financial situation, can the Minister say whether it is still wise to have most capacity market schemes for only 12-month projects?

I look forward to the Minister’s reply—particularly to the questions about coal.

[Lord Lennie (Lab)]

My Lords, I thank the Minister for setting out the instrument and giving us advance warning that more is to come shortly. The capacity market is at the heart of maintaining a secure and reliable electricity system. It provides all forms of electricity capacity on a system during periods of electricity shortage and stress, such as when it is extremely cold or when the wind is low while demand is high. As the Minister said, the capacity market works by allowing eligible bidders to compete in T-1 or T-4 auctions on a one-year or four-year basis ahead of when they must deliver capacity. A successful bidder is awarded a capacity agreement which requires delivery during times of stress.

As the Minister said, this instrument makes changes to three areas of regulation. First, Regulation 10 of the 2014 regulations obliges the Secretary of State to set out whether capacity auctions are to be held. The change will require the Secretary of State to publish a decision only if the Government determine that an auction will not be held, helping to improve administrative efficiency. Does this effectively enrol a current capacity provider into the scheme automatically?

Secondly, Regulation 34 of the 2014 regulations allows capacity providers to seek termination of their capacity agreement with a view to becoming eligible to participate in the contracts for difference scheme. I think the Minister said that they are mutually exclusive as things stand. Currently, the LCCC, as the counterparty, has to give notice of such an intention. However, it cannot know in advance if the CMU will be successful in its bid for a contract for difference.

This instrument means that notice comes from a capacity provider seeking termination of their capacity agreement in order to become eligible to apply in a contract for difference allocation round. How many capacity providers have thus far been unable to use the process set out in Regulation 34? The Minister may say all of them, but how many would have wanted to use the termination process? Have the Government made any assessment of the impact of this, and will this change be kept under review?

Thirdly, I turn to Regulation 41 of the 2014 regulations. Capacity providers can be financially penalised, as the Minister said, if they fail to provide capacity in times of stress. Currently, the settlement body has 21 days to calculate the relevant penalty and to invoice capacity providers which must pay such penalties. This instrument increases the timeframe to 35 days. Does that mean that penalties that should have been paid were previously missed because they were not calculated in time? If so, could the Minister indicate the value of those? By contrast, is this change expected to increase the number and value of penalties that are enforced? I look forward to the Minister’s response.

[Lord Callanan (Con)]

First, I thank the noble Lords, Lord Naseby and Lord Lennie, and the noble Baroness, Lady Walmsley, for their valuable contributions on an important subject for the nation’s electricity supplies.

As I mentioned in my introduction, the capacity market is our main mechanism for ensuring the security of electricity supply. To address the point made by the noble Lord, Lord Naseby, I say that it has already secured the majority of Great Britain’s capacity needs right out to 2026-27, because the Government take no chances with the security of supply. We continue to believe that the capacity market is an effective insurance mechanism, providing secure and affordable electricity that families and businesses can rely on.

The capacity market is, indeed, tried and tested. The fact that it has supported investment in just under 17.5 gigawatts of new-build, flexible capacity since its introduction demonstrates that it can bring forward the capacity needed to meet future peak demand and replace older capacity as it retires and as we transition to a net-zero economy.

Furthermore, we continue to take steps to ensure its ongoing, efficient and effective operation. The Government are committed to ensuring that the right policy tools are in place for delivering a secure and affordable electricity system as we transition to net zero. That includes regularly assessing the performance of the capacity market and, as we are debating today, exploring improvements to the scheme.

As we noted in our 2023 government response to the capacity market consultation, we have set out a two-phased approach for reforms in the capacity market. This instrument seeks to implement purely technical amendments under the first phase to improve the administrative arrangements. In the next phase of reforms to the capacity market, the Government intend to undertake further analysis and development on the remaining proposals prior to taking a final decision on implementation. This includes proposals to align the capacity market with net zero, such as reducing the emission intensity limits for new-build plants and enabling low-carbon capacity with low capital expenditure to access multi-year agreements.

We will also look ahead to the future as part of the review of electricity market arrangements programme. REMA is exploring options to create an electricity market design that will enable us to transition efficiently from fossil fuels to renewables and other forms of low-carbon generation, which I hope will make us more resilient to overseas energy shocks and ensure energy security.

Electricity and Gas (Energy Company Obligation) Order 2023

Lord Lennie Excerpts

Tuesday 20th June 2023 Grand Committee

[Baroness McIntosh of Pickering (Con)]

My Lords, I thank my noble friend for introducing the order this afternoon, which I warmly welcome. I declare my interest as honorary president of National Energy Action, based in the north-east, an organisation with which I think my noble friend is very familiar. It welcomes the scheme but has one or two issues that it would like to understand better.

I ask my noble friend about the background to how the scheme has been introduced, because it could lead to unfairness in how the money is distributed. In particular, a potential flaw is that the targeting of the scheme is quite loose: it is not tight enough sufficiently to help fuel-poor households, which he said is the purpose of the order. For the majority of the scheme, households are assumed to make a financial contribution to the cost of the measures, which may effectively make a large proportion of the scheme inaccessible to the lowest-income households, which cannot afford to make such contributions. The way in which the policy is funded is therefore potentially unfair. Coupled with the rather loose targeting, this means that low-income households may effectively subsidise higher-income householders’ home upgrade.

I give my noble friend an illustration. The UK Government are assuming that £80 million will be provided in customer contributions over three years to support funding of the scheme. That is based on the assumption that uptake is not disproportionately affected by the level of contribution required. The assumption apparently originated from research based on a survey of 1,000 owner occupiers who fell within the general eligibility criteria. I put it to my noble friend that that may not be representative of low-income households, which I understood was the purpose we are trying to achieve with the order before us.

Similarly, research quoted in the impact assessment assumes that three-quarters of home owners will be willing to contribute towards insulation measures, with almost half willing to contribute £500 or more. Once again, I put it to my noble friend that it is extremely likely that households unwilling or unable to contribute fall into the category of the most financially vulnerable, and therefore in most need of the support given by the scheme.

Those two examples point to the potential for this not being what the Government intended. On vulnerable households, I think my noble friend described the purpose as extending support to households in the least energy-efficient and lowest income bands. I would like to query my understanding. Could the targeting have been better and could we have directed the funding more clearly to those in that bracket?

I warmly welcome the fact that support is being extended to off-grid rural households in Scotland and Wales. Can my noble friend assure me that the grant to English homes in that bracket for the home upgrade funding that he referred to will be as high as for those in Scotland and Wales?

[Lord Lennie (Lab)]

My Lords, this has nothing to do with the instrument, but I begin by congratulating the noble Lord, Lord Callanan, on his efforts to recruit Sadio Mané to play for Newcastle United when he was recently in Senegal. As a fellow Newcastle United season ticket holder, I can pass on the warm thanks of all fans of Newcastle United. I suppose more unites us than divides us when it comes to being “Howay the lads” fans.

The draft order proposes a Great British insulation scheme, which would require licensed gas and electricity suppliers to promote the installation of energy-efficiency measures, such as loft or cavity wall insulation, across Great Britain. The Department for Energy Security and Net Zero explains that while ECO4 aims to deliver full-house retrofits for low-income and vulnerable households, the new scheme seeks to encourage rapid installation of the most cost-effective, mainly single insulation, measures and to extend support to a much wider group of households in the least efficient and lower council tax banded homes. These are worthy aims.

The department expects the scheme, as the Minister said, to provide around 376,000 insulation measures in 315,000 homes by the end of March 2026, which coincides with the ECO4 scheme’s end date. The department also says that Ofgem, which will administer the scheme, will be required to submit monthly reports on progress to the Secretary of State on suppliers’ performance. What will the Government do if performance is not on target overall? Are there any plans to push beyond the initial target, if performance suggests that this could be possible? Will Ofgem report on the income distribution of household delivery?

Those suppliers required to participate in the ECO4 scheme are also required to participate in the Great British insulation scheme, so the same domestic gas and electricity supply data is being used as under the ECO4 scheme. Were there any issues with the use of this data? If so, have they been addressed and overcome?

Unlike the ECO4 scheme, a minimum level of delivery of the obligation will be set for each of the three phases of the Great British insulation scheme. It requires each obligated supplier to achieve at least 90% of its home heating cost reduction obligation and low-income minimum requirement for phases A and B through measures completed before the end of each phase, with the total obligation required to be met by 31 March 2026. Suppliers will have performance requirements across each phase of the scheme—a new development from ECO4. This is of course a good thing, but how will the performance in each phase be monitored and enforced?

The instrument also sets a low-income minimum requirement. This will ensure a minimum level of support through the scheme for those on the lowest incomes and the most vulnerable—the low-income group, as it is known—while allowing the remaining support to be targeted at a much larger pool of people now challenged by higher energy bills, in other words the general group. There is no upper limit on the amount of a supplier’s home heating cost reduction obligation that can be met through the measures delivered to the low-income group.

The low-income minimum requirement is defined by the instrument as 20% of the overall obligation, and that 20% must be delivered using the standard low-income eligibility criteria. Assuming the distribution is equal, 20% of 315,000 homes is 63,000 low-income households. Given that this scheme will be paid for by all customers but that the much larger benefits will be felt only by benefiting households, does a 20% minimum not feel somewhat low? I appreciate that it is only a minimum, but is there any incentive for the participants to deliver above this 20%? How was this amount reached? Do the Government have an estimate for where they expect this to fall across the whole scheme?

The home-heating cost reduction target is set at a level that assumes that households in the general group —as in Article 12 of the order—will collectively contribute £80 million, as the Minister said, towards the cost of installing the insulation measures, which is equivalent to 10% of the £800 million scheme budget earmarked for this group. This reflects that households in the group will generally have higher incomes and be able to contribute. Any contributions will in practice be a matter for agreement between the customer and the installer, reflecting the measure’s type and property issues.

For the purpose of the home-heating cost reduction target, should a participant elect to go beyond the minimum 20% for the low-income group, would the general group be significantly more burdened by the total contribution required? For example, if, across all providers, the general group averages only 40% of the overall makeup, which I understand is unlikely but a possibility, is it correct that this group would then be required to double their joint contribution to the £80 million home-heating cost reduction target, compared to if it made up the maximum of 80%?

Domestic premises cannot receive more than one insulation measure under the Great British insulation scheme. As long as it is installed on the same day as, or after, the insulation measure is completed, owner-occupied premises in the low-income group can also receive heating control measures under the scheme. The heating control measures must be completed within three months of the insulation measure.

The majority of responses to the consultation addressed the fact that private rented sector households are ineligible for heating control measures, or for cavity or loft insulation, if they are in the general group. These measures are excluded as landlords have responsibilities to maintain and improve their housing. Is that a good enough reason? Why is it acceptable for lower-income households to have to choose between unaffordable bills or a lack of heat because they are renting, if their landlord is not adequately improving their property? For clarity, if a participant offers a combination of an insulation measure and heating control measures to either a household in the general group or a non-owner-occupied household in the low-income group, would the cost be expected to be apportioned between the scheme and the payer or would that not be a feasible option?

Another aspect of the instrument is targeted encouragement to support the development of innovative products and installation techniques. This is of course welcome. Has any assessment been made of the potential impact of this encouragement? What counts as an innovative product or installation technique? Perhaps the Minister can enlighten us on that.

The 2021 Sustainable Warmth strategy announced plans for the expansion of ECO to run from 2022 to 2026, with an increase in value from £640 million to £1 billion per year. This obligation is expressed in terms of outcomes, not expenditure. The obligation is for notional annual bill savings of £224 million to be achieved by 31 March 2026. Part 10 of the instrument amends the 2022 order. Most of the changes are made to enable heating measures that are of benefit to ECO4 households in achieving annual cost savings, and reducing their overall energy bill, to be installed in a wider range of circumstances.

Labour’s warm homes plan would upgrade the energy efficiency of about 2 million homes per year. It would upgrade all 19 million homes that need it and help families to save up to £500 on their energy bills. The target of 315,000 homes under this scheme does not really compare. Do the Government accept that this is a drop in the ocean of what is needed? As part of the Labour green prosperity plan, the warm homes plan would give families the grants and loans they need to upgrade the energy efficiency of their homes, cutting their energy bills and emissions. Labour’s national plan would save households £500 a year, cut national gas imports by up to 15% and create over 206,000 full-time equivalent jobs in retrofitting industries.

Climate: Behaviour Change (Environment and Climate Change Committee Report)

Lord Lennie Excerpts

Wednesday 7th June 2023 Grand Committee

[Lord Lennie (Lab)]

My Lords, I begin by also thanking the noble Baroness, Lady Parminter, and the other members of the committee for producing a thorough and focused report. I was not a member of the committee but will set out my observations on its key findings and recommendations, and the Government’s response. No doubt, the Minister who follows me will tell me whether I have got it right.

Behavioural change is essential if we are to achieve climate and environmental goals and deliver wider benefits. The Government’s current approach to enabling behavioural change to meet climate and environmental goals is inadequate to meet the scale of the challenge. I draw on the Climate Change Committee’s assessment, which identified that 32% of emissions reductions up to 2035 require decisions by individuals and households to adopt low-carbon technologies and choose low-carbon products and services, as well as reduce carbon-intensive consumption.

While the Government have introduced some policies to help people adopt new technologies, these have not been replicated in other policy areas. There has been progress in some areas, but not all—the noble Baroness, Lady McIntosh, mentioned electric cars.

There is a reluctance to help people to cut carbon-intensive consumption. Time is not on our side, and there is too great a reliance on as yet undeveloped technologies. A quote that I liked in the report was from Sir Patrick Vallance, who said:

“Dreaming that something brand new will appear and save us by 2050 is not sensible”.


Priority behaviour change policies are needed in the areas of travel, heating, diet and consumption to enable the public to adopt and use green technologies and products and reduce carbon-intensive consumption. Polling shows that the public are ready for leadership from the Government in this space. The Government should provide clarity to individuals about the changes we need to make in how we travel, what we eat and buy and how we use energy at home, and they should articulate the many co-benefits to health and well-being of taking those steps.

A public engagement strategy, both to communicate a national narrative and to build support for getting to net zero is urgently required, but information is not enough to change behaviour. The Government need to play a stronger role in shaping the environment in which the public act through appropriately sequenced measures including regulation, taxation and the development of infrastructure. A behavioural lens must be applied consistently across all government departments, as too many policies, from planning and building standards to advertising regulations, are still encouraging high-carbon and low-nature choices. As the country faces a cost of living crisis, the Government must tailor behaviour change interventions to avoid placing a burden on those who can least afford it—a fairness clause. They must also work with the many groups and organisations at different levels of society which have a critical role in securing behaviour change for climate change and the environment. Behaviour change interventions will not be effective nor consistent unless existing structures for the cross-government co-ordination of climate and environment policy are overhauled and made more transparent and accountable to Parliament and the public.

The Government have responded. In September 2022, the Government were under Liz Truss. The one thing that she achieved during her premiership was commissioning Chris Skidmore to lead an independent review of net zero. The purpose of the review was to determine an affordable and efficient approach for the UK to fulfil its net-zero commitments, specifically an approach that was pro-business, pro-enterprise and pro-growth, which I have no doubt members of the committee would welcome. In January 2023, the review’s findings were published in the report, Mission Zero: Independent Review of Net Zero. The review praised the UK for the steps that it had taken towards achieving net zero. However, it warned that the Government, industry and individuals needed to

“act to make the most of the opportunities, reduce costs, and ensure we deliver successfully”.

In March 2023, the Government published their response to the recommendations made in that review. In their report, the Government agreed that “decisive action” was needed to seize the “major economic opportunities” that net zero could bring to the UK. The Government also addressed the review’s 129 recommendations. These included the following three recommendations. The first was to expand public reporting. The Government stated that

“there are many existing mechanisms to regularly scrutinise the government’s performance on net zero, including by Parliamentary Select Committees … independent bodies such as the National Audit Office, and … the Climate Change Committee”.

The second was to publish a public engagement strategy. The Government said that they had outlined their approach to public engagement in their net zero strategy. They also committed to providing additional details on public engagement “in the coming months”. This included plans to support public awareness through their digital platforms, to develop a road map outlining net-zero proposals, to establish a framework to “amplify net zero messaging” and to create an office for net zero delivery. The Government stated that the creation of the Department for Energy Security and Net Zero meant that there was now a

“department dedicated to delivering on our ambitious climate ambitions and a senior ministerial voice at the Cabinet table”.

The impact of behaviour change, the actions taken by individuals or organisations to reduce their energy use, can be significant and an essential part of the journey. On the Chris Skidmore review, while we quite rightly have a duty to ourselves, to each other and to the planet to achieve net zero and halt the temperature increase, far too often the argument focuses only on that side of things and fails to acknowledge the opportunities that net zero can bring. The Skidmore review was scathing in its assessment of the Conservative Government’s failure to recognise the huge potential for economic growth and good, green jobs that come with the transition to net zero.

What would we do? As your Lordships know, Labour would put net zero at the heart of our plans for a fairer, greener future with our green prosperity plan and invest £28 billion per year in tackling climate change, growing the green economy and creating good, green, secure local jobs across the country. Last year, the independent Climate Change Committee warned that the Government’s current climate strategy will not deliver net zero and that credible government plans exist for only 39% of the UK’s required emissions reductions.

I conclude where I began: by congratulating the committee on its impressive report and ask the Minister whether he truly feels that the Government are ready for the scale and speed of implementation to achieve environment and climate goals.

COP 28

Lord Lennie Excerpts

Wednesday 17th May 2023 Lords Chamber

[Lord Callanan (Con)]

The noble Baroness makes an important point, although it is slightly off the topic of the COP 28 agenda. We are incredibly proud of the massive contribution of £11.6 billion that this Government are making towards international climate finance, helping those very countries. The wider issue of debt relief is also important and will be taken forward by international development colleagues.

[Lord Lennie (Lab)]

My Lords, the Government have already set out some of their priorities for COP 28, one of which is to actively follow up on the phase-down of coal and the phase-out of all fossil fuels. The recent words of COP 28 president Sultan Al Jaber have been widely interpreted as meaning using carbon capture and storage to capture CO₂ emissions and not completely phase out fossil fuels. What consideration have the Government given to these remarks and what steps have been taken to address them?

[Lord Callanan (Con)]

The noble Lord makes an important point, citing the chairman of COP. The reality is that there will still be a requirement for fossil fuels in the years to come. There will still be a requirement in the UK, which is why we have an ambitious programme —we are spending £20 billion on carbon capture usage and storage. That still enables emissions to take place but of course they will be captured and stored back underground.

Non-Domestic Alternative Fuel Payment Application Scheme Pass-through Requirement Regulations 2023

Lord Lennie Excerpts

Tuesday 16th May 2023 Grand Committee

[Lord Lennie (Lab)]

My Lords, I thank the noble Baroness, Lady McIntosh, and the noble Lord, Lord Teverson, for their repeated comments from previous similar discussions.

This instrument provides for pass-through requirements on intermediaries in respect of non-domestic alternative fuel payments in Great Britain and Northern Ireland. The Energy Prices Act enables energy support schemes to help households and businesses with energy costs for winter 2022 and future periods. As we have heard, this scheme will provide a single £150 payment to non-domestic users of alternative fuels in Great Britain and Northern Ireland. In Great Britain, payments are made to non-domestic premises in an off-grid postcode. In Northern Ireland, payments are enabled to on and off-grid postcodes.

Intermediaries are individuals in receipt of a scheme payment who, under these regulations, should pass on the payment in a “just and reasonable” way to end users. If this is less than the full amount, the intermediaries must justify the reduction to end users. This must be made in writing within 30 days of the scheme’s benefit being provided and payment made as soon as reasonably practicable. That is all well and good so far.

However, as we have asked of previous pass-through schemes, what is the remedy if this plan is not followed? How can an end user challenge the reduction in a payment or a delay in receiving either the full or reduced payment? There is no mechanism to enforce these regulations, as the noble Lord, Lord Teverson, and the noble Baroness, Lady McIntosh, said. Of course, most intermediaries will comply with the requirements built into the scheme but that does not achieve the policy objective that requires all intermediaries to do so.

We do not oppose these regulations but they fall down because no one actually has to do anything about them to ensure full compliance. There is a theoretical remedy through the civil courts, as the noble Lord, Lord Teverson, said, but how does an end user who has not been notified that they are due a payment mount a claim for such a payment to be made? Just because the Government have made corresponding regulations for other comparable schemes does not justify doing so again here. Labour and other opposition parties have previously raised this concern about effective enforcement and the Government have batted it away—and no doubt will do so again here today. But a scheme that relies upon people acting in a just and reasonable way without the means to ensure that they will do so is not a foolproof scheme but a best-endeavours scheme. Its success cannot be measured by less than 100% effectiveness. What does the Minister say on that?

[Lord Callanan (Con)]

I thank my noble friend Lady McIntosh, and the noble Lords, Lord Teverson and Lord Lennie, for their comments.

This instrument is necessary to ensure the proper delivery of the non-domestic alternative fuel payment scheme by allowing support to reach those who need it. The scheme is already in place and delivering much-needed support to non-domestic consumers across the UK. The scheme supports a wide range of businesses and other non-domestic consumers that are not connected to the gas grid. As I said, it is delivering a payment of £150, thereby helping businesses and organisations that rely on alternative fuels to meet their eligible costs. Most eligible customers should have already received their £150 payment by the end of March as a credit from their electricity suppliers. Where these payments were received by an intermediary, the pass-through regulations that we previously made ensure that they passed it on to the end users in a just and reasonable way. Although a relatively small proportion of businesses and organisations are entitled to a top-up payment, these payments are also important in ensuring that those consumers are not left behind and receive support comparable to those received by consumers on the gas grid and who have benefited from other schemes.

We opened an application service for the top-up payment on 20 March, and we are processing payments as quickly as possible. In addition to the top-up payment, we provided a route for customers to apply for the basic £150 payment in the limited circumstances where it was not possible for them to receive it through an electricity supplier. These regulations ensure that in all these circumstances, where a payment is made following an application, end-users benefit from the requirement that intermediaries pass on that support in a just and reasonable way. It is a case of extending the safeguards already in place for the earlier part of the scheme to payments made following an application.

On the specific points made in the debate, the noble Baroness, Lady McIntosh, asked about the duration of the support and the latest report from the JCSI. We are providing one-off payments to eligible businesses and organisations to ensure comparable support to that received by on-grid customers who have benefited from the energy bill relief scheme, and we are in the process of issuing payments to applicants. In response to the noble Baroness’s point about the JCSI’s comments on enforcement, also raised by the noble Lord, Lord Teverson, our view remains, as the noble Lord, Lord Lennie, correctly predicted, that there is little value in establishing a formal enforcement mechanism. However, we believe that it is important to include a provision on pass-through of information, as most intermediaries will comply with this.

The noble Lord, Lord Teverson, asked how successful the existing pass-through arrangements have been. We are not aware of any significant issues in the delivery of this scheme or the pass-through arrangements. Nevertheless, the scheme remains in progress, and we will continue to keep it under review and respond to any issues as they arise. As the scheme is still in progress, we are not yet in a position to say precisely how many businesses will benefit, but we believe that around 400,000 end-users will receive some level of payment under the scheme. That is a considerable amount of support.

--- Later in debate ---

[Lord Lennie (Lab)]

Is that the payment to intermediaries, who are expected to pass it on, or is it the payment received by end-users?

[Lord Callanan (Con)]

It would be the end-users, irrespective of whether they received it directly or via an intermediary.

As I said, we have published extensive guidance for both the intermediary and the end-user to ensure that they know their obligations and entitlements. Although we are mindful of the comments that we have received regarding these and previous pass-through regulations, in our view it is important that the non-domestic alternative fuel payment is delivered consistently as one coherent scheme. As these regulations cover only a small part of a much wider scheme that is already in place, it is right that we maintain essentially the same approach followed in the previous regulations for other parts of the scheme. Nevertheless, we will continue to update and publicise the guidance on GOV.UK to ensure that end-users and intermediaries understand their rights and obligations. I therefore commend these regulations to the Committee.

Climate Change: Net Zero Strategy

Lord Lennie Excerpts

Wednesday 3rd May 2023 Lords Chamber

[Lord Callanan (Con)]

My noble friend makes an important point. I know he has a lot of experience in this area and he is right to point out the scale of the task. It is an immense challenge to be done over many years; none of this happens overnight. Some of the wind farms that are coming on stream this year were planned a decade ago; it all takes time to do, but over the next 20 or 30 years we need to make progress towards those goals. They are legally binding, so we need to meet them and we are on track to do so.

[Lord Lennie (Lab)]

My Lords, following the Minister’s answer to the noble Baroness, Lady Jones, the Government are currently way off track to meet their sixth carbon budget for 2033 to 2037. This is a crucial period once the low-hanging fruit has all been picked. What additional measures are the Government considering to ensure that the harder to abate sectors deliver the necessary reductions in large-scale emissions in order to ensure we meet our net-zero targets?

[Lord Callanan (Con)]

The sixth carbon budget goes through to 2038. We have set out policies to meet— I think—about 97% of the targets under that and we have a number of other policies that are so far unquantified. In essence, the noble Lord is right, of course. As we make faster progress—and we are making very swift progress—the targets become more difficult to meet: but I am confident that we can do so.

Energy Bill [HL]

Lord Lennie Excerpts

3rd reading
Monday 24th April 2023 Lords Chamber

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

My Lords, I will update the House on the legislative consent Motion process for the Energy Bill. The UK Government are seeking legislative consent Motions from the devolved legislatures for the Bill, in line with the Sewel convention. My officials are working with devolved government officials and will continue to do so throughout the Bill’s passage.

The Scottish Government have requested amendments to the Bill and are currently withholding support for legislative consent. We will of course continue to work with them regarding their concerns. The Welsh Government have not yet laid a legislative consent memorandum. It is not possible at present to obtain a legislative consent Motion from the Northern Ireland Assembly, but the UK Government are engaging with officials in the Northern Ireland Civil Service. The UK Government welcome the interest that the devolved Governments have shown in the Energy Bill and will continue to work closely with them on proposed changes in order to progress legislative consent Motions for the Bill.

[Lord Lennie (Lab)]

My Lords, this huge Bill leaves the House in far better shape than when it arrived. A combination of Labour, the Liberal Democrats, other parties, individuals and, most importantly, Cross-Benchers have secured measures that should see ISOP’s independence assured, community energy export markets develop, warmer homes and an efficiency plan to achieve that, the Gas and Electricity Markets Authority strengthened, and the ceasing of any further coal mining in this country—thanks to the noble Lord, Lord Teverson. It is to be hoped that the Government will support these changes in the other place and will not bring this Bill back for ping-pong. The range of supporters across the House should be sufficient to convince the Minister to back the changes to the Bill made by this House.

In the meantime, my thanks go to the Minister—remarkably, he has stayed the course while his Government have changed leadership three times and his Secretary of State twice since we began in September 2022—and his advisers from BEIS, and subsequently DESNZ, who have continually briefed and been available to answer questions and clarify intentions as we wended our way through this tome of a Bill.

My appreciation goes to my noble friend Lady Blake for her continuing support and to the noble Lord, Lord Teverson, on the Liberal Democrat Benches, with whom it has been a pleasure to work on the Bill. My thanks are also due to a number of Back-Benchers and Cross-Benchers, mainly drawn from the Peers for the Planet group, particularly including the noble Lord, Lord Ravensdale, the noble Baronesses, Lady Hayman, Lady Boycott, Lady Bennett and Lady Worthington—sadly temporarily departed from this House—and my noble friend Lord Whitty. Thanks also go to the House staff and the doorkeepers for arrangements during delays in advancement of the progress of the Bill, which were not of their making, and for keeping the quick-quick-slow dance rhythm to the Energy Bill.

My biggest thanks go to the remarkable Milton Brown in Labour’s legislative team of advisers for always being up to date with the progress of the Bill, for his liaison with the other place and for his political briefings and judgment, which allowed my noble friend Lady Blake and me to keep focused on this Bill over a long period. We wish it well on the next stage of its journey.

[Lord Teverson (LD)]

My Lords, one of the things that strikes me most about the passage of the Bill through this House is that it is has been the opposition parties saying to the Government, “Get on with it. We actually need this Bill through to give the powers that we need to meet decarbonisation and modernise the energy production system in this country”. I agree with the noble Lord, Lord Lennie, that the amendments that have been made by this House are absolutely in line with the Government’s decarbonisation objectives. I hope that the Commons, as well as the Government themselves, will consider them as positive rather than negative.

I will not go through the long list of other Peers named by the noble Lord, Lord Lennie. What I will do is to say a great deal of thanks to Peers for the Planet for its work in the House, to the noble Lord, Lord Lennie, and to the noble Baroness, Lady Blake, whom I have enjoyed working with very much indeed. From our own offices, I thank Sarah Pughe and Sarah Dobson.

We look forward very much to not having to play ping-pong on this Bill. Maybe that is too much to hope for but I thank the Ministers, the noble Lord, Lord Callanan, and the noble Baroness, Lady Bloomfield, for their co-operation during the passage of the Bill. I also thank their teams. I look forward most of all to the Bill being implemented, so that the country as a whole can move ahead in its aims and objectives.

Powering Up Britain

Lord Lennie Excerpts

Wednesday 19th April 2023 Lords Chamber

[Lord Lennie (Lab)]

My Lords, the papers published before the Easter Recess represent, as my friend Ed Miliband said in the other place, a Groundhog Day of reannouncements, reheated policy and no new investment. The Government continue to fail to acknowledge the scale of the climate crisis and the need for urgent action rather than baby steps. The biggest indictment is an admission that the policies announced do not deliver the promises made at COP 26 to meet the UK’s 2030 climate target.

On emissions targets, despite saying that they are building on their COP 26 presidency, the Government cannot say whether they will meet the targets set in Glasgow. Meeting these targets is crucial if we are to prevent catastrophic climate change, so can the Minister now confirm that the Government will ensure that the UK will meet the NDC emissions targets that they committed to at COP 26?

The UK’s businesses operate at a disadvantage because of the Government’s delay in responding to the Inflation Reduction Act in the United States. Why are the Government delaying their response, thereby putting us behind in the international race for green jobs? Without clear support from the Government, British businesses are struggling to transition to a low- carbon economy.

The Government’s ban on onshore wind is preventing the UK cutting bills and providing energy security. Polls show that British people support onshore wind by a ratio of 20:1. The ban is costing hard-pressed families approximately £160 a year on their energy bills and leaves the UK dependent on expensive gas imports. Can the Minister say when they will get a grip and end the ban on onshore wind?

The Government’s track record on energy efficiency is appalling, leaving uninsulated households with bills £1,000 higher than those of properly insulated homes. Labour’s warm homes plan aims to bring down bills for 19 million homes and to reduce reliance on fossil fuels. Why will the Government not support it?

There is a range of other failures. There is the failure to provide support for electric vehicle infrastructure. The new UK emissions trading scheme lacks the necessary price signal to drive emissions reductions. Setting 2030 as the date for phasing out sales of new petrol and diesel cars is both later than other countries and comes without a plan on how to achieve it. In summary, the Government’s lack of real ambition puts the UK at a major disadvantage in the drive towards a low-carbon future.