Great British Energy Bill

Debate between Lord Lilley and Lord Hunt of Kings Heath

2nd reading
Monday 18th November 2024 Lords Chamber

[Lord Hunt of Kings Heath (Lab)]

We are. There is always going—

[Lord Lilley (Con)]

I tabled a Question some time ago to ask the Government whether they knew of any peer-reviewed science or any science collected by the IPCC which suggested that there would be extinction of the human race if we did nothing worldwide—not as much as we are doing now, but nothing—and they said that there is no such peer-reviewed science. Why does the Minister rely on alarmism?

[Lord Hunt of Kings Heath (Lab)]

I am not alarmist at all. I rely on report after report showing the consequences. Shall we turn to our own independent Climate Change Committee? The noble Lord supported the Conservative Government over a 14-year period. I did not see that Conservative Government disowning the independent advice they had received. He might as an individual, but I do not think his Government did. Noble Lords opposite, when they run down organisations such as the Climate Change Committee—or, indeed, the OBR, as they seem to now—need to remember that they listened to and reflected on the advice of those bodies during that 14-year period.

I agree with the noble Lord, Lord Cameron, that if climate change is critical, energy security comes a close second. That is, of course, what makes the Bill so important, so I hear what noble Lords are saying. The noble Lords, Lord Offord, Lord Duncan and Lord Bourne, the noble Baronesses, Lady Bloomfield and Lady Hayman, my noble friend Lord Hanworth, the noble Earl, Lord Russell, and a number of other noble Lords have commented on the structure of the Bill, with concerns about a lack of detail and questions about the accountability of GBE to Parliament, how it is to be reviewed, and its relationship with the national wealth fund, Great British Nuclear, the Crown Estate, NESO, and, as the noble Lord, Lord Bourne, mentioned, the Climate Change Committee.

I also say to the noble Lord, Lord Bourne, that the fact that GBE is going to be headquartered in Scotland of course does not inhibit its UK-wide responsibilities. I have noted what he had to say about investment in Wales.

However, I accept that there are a number of organisations here and I will take it upon myself to write to noble Lords, setting out how we think the relationships will work together, as I think that will inform our discussions in Committee. On the structure of the Bill, noble Lords will know that this was laid in the Commons very soon after the election as an early priority of the Government. Because of that, we have focused, inevitably, on the provisions that are fundamental to the establishment of Great British Energy. Clearly, we are still working through some of the policy issues on which we need to come to a view, including, of course, discussing them with GBE and the devolved Governments. That is why the Bill, to an extent, does not have the detail which noble Lords wish to see.

However, I have listened very carefully. We will come to Committee, and I hope I can respond constructively to some of the issues that noble Lords have raised. Equally, I want to ensure that GBE is operationally independent and able to make its own decisions within the structure of the Bill and the strategic priorities laid down by the Secretary of State. We are listening very carefully to what noble Lords have to say.

As I said to the noble Lord, Lord Howell, last week in our debate on energy, I fully accept that our drive towards clean power by 2030 is but one aspect of the decarbonisation of society in this country and the move to net zero. In relation to transport, heating and industrial processes, this is a huge challenge and one which we are committed to achieving. The noble Lords, Lord Offord and Lord Ashcombe, and the noble Baroness, Lady Bloomfield, asked about the clean power target. There are a number of different ways of reading the report from NESO, but it is quite clear that the number one message from NESO was that it is possible to build, connect and operate a clean power system for Great Britain by 2030 while maintain security of supply. I accept that it is very challenging—there is no doubt whatever about that—and the NESO report contains a number of those challenges. However, this is independent advice; it says that it can be done and we believe it can be done. It is very challenging, but it is doable.

On cost, as the noble Earl, Lord Russell, said, the biggest cost is doing nothing. As the noble Baroness, Lady Hayman, said, the Climate Change Committee has said that the net cost of transition will be less than 1% of GDP over the entirety of 2020 to 2050. The OBR has highlighted that delayed action on reaching net zero will have significant negative fiscal and economic impacts and that acting early could

“halve the … cost of getting to net zero by 2050 compared to acting late”.

I noted also the comments of the noble Lord, Lord Ravensdale, on this.

I come to the Bill itself. The noble Baroness, Lady Noakes, and the noble Lord, Lord Vaux, raised that we have partly used the UKIB legislation as a model for some of the clauses in this Bill. The noble Lord and the noble Baroness were particularly focused on the make-up of the board of directors. The fact is that we have brought in clauses from the Great British Nuclear provisions in the Energy Act. The structure very much follows that. We do not think that it was necessary to put into primary legislation provisions in relation to the board, because this will be covered. It is a company, and so will be encompassed within company law, the code of practice and sound corporate governance. GBE will have a chair and a chief executive officer, both of whom will be accountable to Ministers. It will have a board of directors that follows sound corporate governance practice, including the provisions of the UK Corporate Governance Code and those published by the Financial Reporting Council.

We want GBE and the national wealth fund to work closely together. As Great British Energy scales up, we will set out how the two institutions will collaborate and complement each other. On the issue of crowding out investment, surely my noble and learned friend Lord Falconer was right. The whole point about GBE is to speed up the deployment of mature and new technologies but with a focus on where this can complement existing private sector activities.

I must say that the references that the noble Lord, Lord Lilley, made to HS2 and the Post Office were a bit rich, considering the record of the Conservative Government’s stewardship, or not, over 14 years.

I will come on to Clause 3, the objects, which has drawn quite a lot of comment. I say to my noble friends Lady Winterton and Lord Grantchester and to the noble Lords, Lord Cameron and Lord Naseby, among others, that emerging technologies such as CCUS or hydrogen could be very much part of GBE’s portfolio once it is operational. I noted the comments from the noble Baroness, Lady McIntosh, on waste. On Drax, we had a good run on that a couple of weeks ago, although I may not have convinced noble Lords of the Government’s position. I look forward to discussing storage with the noble Lord, Lord Duncan, and my noble friend Lord Stansgate. I also agree with the noble Lord, Lord Ashcombe, on the potential of floating offshore wind.

We, of course, are reluctant to see a list of technologies. Noble Lords sitting on the Front Bench will be readily aware of the list argument, and it is well taken. If you list, you are at risk of excluding other technologies. One must be very careful not to constrain the ability of GBE in its operational independence and its ability to spot the technologies that need supporting. I do accept, with my noble friend Lady Young, that community energy has huge potential in itself and as a way to leverage public support generally for the kinds of changes that we need to see happen. We certainly believe that GBE will deliver a step change in investment in local community energy projects and will work strongly in partnership with local authorities and community groups to deliver this. I know that local authorities would welcome a much stronger partnership to enable this to happen. I take the point from the noble Baroness, Lady Hayman, and my noble friend Lady Young about biodiversity. I look forward to discussing that further with them and in Committee.

I come now to my favourite topic: nuclear energy. First, we want to make sure that GBN can carry on with its work—the technology appraisal of the shortlisted technologies for the SMR programme is particularly important—and that it will work in complementary ways to GBE without there being duplication of effort. I picked up the important contribution from the noble Lord, Lord Ravensdale. I say to the noble Viscount, Lord Trenchard, that nuclear power is not being underprioritised in my department. I need no persuading of the importance of nuclear energy. It acts as the essential baseload, and when it is aligned with gas that, in future, will be abated by CCUS, we will have the right balance to complement the intermittency of renewable energies.

On nuclear and resources, we have just announced a huge resource allocation to Sizewell C to get it over the next two years. We are working very fast towards final investment decisions over the next few months; we have the SMR programme and we are very excited by the potential of AMRs. I very much take what my noble friend Lady Winterton said about the potential of SMR manufacturing in the UK.

A number of noble Lords mentioned the grid and planning and what they described as the roadblocks to developers. I very much take that point. We have already signalled, in parallel with GBE, our intention to reform the planning system to enhance our grid connections. I take the point about the delays to the connection which developers are suffering at the moment. Clearly, we have to do something about that, but GBE’s main priority will be to help developers get through some of the roadblocks and focus on the energies that need support.

I noted with interest the comments the noble Baroness, Lady McIntosh, made about the impact on farmers and on fishing fleets. I accept that consultation and environmental assessments must continue to be made in any more streamlined planning process and expansion of the grid.

My noble and learned friend Lord Falconer and the noble Baroness, Lady Noakes, raised the question of state subsidies and competition law. As an operationally independent company, GBE will be subject to the same legal and regulatory framework as other entities in relation to subsidy control and competition law, such as the Subsidy Control Act 2022. The Bill does not alter that framework.

I hear what noble Lords say on Clause 5 in relation to strategic priorities and the statement. It is unlikely that we will have published the statement of strategic priorities before Royal Assent, but I have listened to what noble Lords have said. I will reflect on that and I am sure we will discuss it further in Committee. Noble Lords seem to be indicating that they would like to discuss it in Committee.

On power of direction, the noble Lord, Lord Lilley, was particularly assertive that the Secretary of State would wish to take almost micromanagement control. I assure him that that is not the intention. It is a backstop, reserve power.

On the annual accounts and reports, there will, of course, be accountability. The chief executive officer will be the accounting officer. The National Audit Office will oversee. Ministers will answer to Parliament. Select Committees can invite GBE in to give evidence. Noble Lords will debate. We will have Questions and more general debates.

I listened to noble Lords and I understand that they have looked at the UKIB legislation. We will reflect on that, but my noble friend Lady Young is right: there is a balance here between due accountability and not putting a load of bureaucratic micromanagement on this organisation, which is not what we want to happen.

I absolutely agree with noble Lords that we must make the most of the supply chain. I picked up the point about skills and managing the transition in the North Sea.

The noble Lord, Lord Alton—my noble friend, if I may call him that—and I have worked together on these issues. I congratulate him on his work and the huge effort that he has made in Parliament, the influence that he has had on legislation, and the help that he gave me around enforced organ harvesting, particularly in Xinjiang province but in China more generally. At this stage, we expect UK businesses, including GBE, to do everything in their power to remove any instances of forced labour from their supply chains. They should not approve the use of products from companies that may be linked to forced labour. I am very happy to talk to the noble Lord about the energy potential of Merseyside, as he suggested, and to discuss the issues that he raised so eloquently.

I have reached the time limit. This has been a very good debate and I am most grateful to noble Lords. I would like to think that contributions were constructive, and I look forward to debating this in Committee.