Electricity and Gas (Energy Company Obligation) Order 2022
Lord McNicol of West Kilbride Excerpts(1 year, 10 months ago)
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Lord Teverson (LD)
My Lords, there have been a few changes in the Government over the past week and it is excellent to see the Minister still here. I took the opportunity to look up his responsibilities, because there has been a bit of a shuffle in BEIS and I was even more delighted to see that he has responsibility specifically for energy efficiency—I think he had it before; the climate change side has moved slightly. I am delighted that energy efficiency remains with the ministerial purview of this House.
I also welcome the fact that the Government tabled an amendment on Report to the UK Infrastructure Bank Bill to include energy efficiency specifically as part of the bank’s remit in terms of its investment. I think the whole House very much welcomed that change. They could have done one or two other things, but at least we had that.
On ECO and the prior schemes, I read a report by the Energy & Climate Intelligence Unit—ECIU. I am on its advisory board and it is one of the better of these think tanks. It was interesting that the report reckoned that between 2009 and 2019 some 6 million homes had been improved to band C in energy performance. It estimated that that amounted to a 20% cut in their gas demand, which meant that on an annual basis now those households were saving £1.2 billion. Clearly, that is significant.
Those figures are from 2009 to 2019 and the ECO scheme came in in 2013, but the number of applications dived hugely over the past eight years and only now has started to tick upwards again. It was interesting to read in the Explanatory Memorandum that some 2.4 million homes had made applications to the ECO scheme, but in 2020 we still had 3.5 million homes in energy poverty. Think about that. There were applications for 2.4 million homes but at the end of that process there were still 3.5 million homes in fuel poverty—and that was before the huge price rises in energy that we are now seeing.
The Minister mentioned 450,000 applications and taking them out of fuel poverty. There is no chance of taking homes out of fuel poverty at the moment. We are going to add to that because of the energy prices that there are.
I know this from my own experience. At the beginning of this year I paid a monthly standing order to Octopus Energy of £212. This month I paid £355. That is not my only energy cost, but I admit that, for me, it is not a crisis. But, my goodness, for people outside that is an horrific increase in their energy bills.
I suppose I just want to make the same old argument again that there is so much to be gained from these programmes, as that statistic from the ECIU suggested, but at the moment they are only a pinprick—a drop in the ocean—in terms of what we actually need. Of course, it is easy to say that if we were not starting from where we are now but from before George Osborne as Chancellor of the Exchequer massacred the various energy efficiency schemes’ futures in terms of new homes and those sorts of applications, my goodness we would be in a better position than we are now. We are in a position where the Government are spending £37 billion, I think it is, on putting right the cost of living crisis, much of which is driven by energy costs, yet all of that is just to stand still, and I am not the first person to say that. If only we were managing to put that money into these sorts of schemes, my goodness those fuel poverty numbers would start to come down rather than inevitably skyrocketing, as they will. That is my comment on this. As the noble Lord, Lord Whitty, said, how can one argue that this is an improvement? As I said, it is a drop in the ocean, given what we need to do.
My question follows on from what the noble Lord, Lord Grantchester, said. One of the lessons from the disaster of the green homes grant was that the bit that involved local authorities actually worked. I am interested to understand how our local authorities, which are so much better at understanding their local communities and the issue of fuel poverty, will be tied in to the way the ECO4 scheme is delivered.
Lord McNicol of West Kilbride (Lab)
My Lords, like many others, I thank the Minister for his explanation of what this order achieves: introducing the latest energy company obligation, ECO4, replacing ECO3, which came to an end in March. I start by echoing what the noble Baroness, Lady McIntosh of Pickering, said, about the effects of the delay. Has any assessment or estimate been made of the effects of the delay between 1 April and the new regulations coming in?
As we heard, the order will place a cost-reduction obligation on gas and electricity suppliers that exceed domestic supply thresholds, requiring them to promote the installation of energy efficiency and heating measures to reduce the cost to low-income and vulnerable households. Unlike ECO1 and ECO2, which were centrally funded, I understand that this obligation to fund and finance again falls on the energy companies using their own resources, as was the case with ECO3.
If this understanding is correct, can the Minister confirm what assessment was made of the difference in impact between these two approaches, given that we now have examples of both? Given that energy suppliers will incur these costs, which will need to be recouped, we can expect them to be passed on directly to customers through energy bills. As others have asked, is this really the best approach at this time, given the energy crisis? Will any steps be taken to encourage or even obligate energy companies not to pass costs on to customers who can ill afford them at this time? In reality, if they are passed on, it will be the consumers and customers who will be paying for the upgrades of their own homes.
As the Minister outlined, the objectives of this order are to help alleviate fuel poverty, accelerate progress to meet fuel poverty targets, contribute to carbon reduction, reduce the costs of meeting the renewable energy target and encourage innovation. All of these are welcome, as is the targeting of vulnerable and low-income households. If the target we have heard about of annual bill savings of £224 million is reached, this will make a real difference.
TRIPS Agreement: Vaccines
Lord McNicol of West Kilbride Excerpts(1 year, 10 months ago)
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Lord Callanan (Con)
The position is as I repeated to my noble friend Lady Sugg: all vaccine dose donations will be reported as overseas development assistance and be included within the 0.5%. I think the noble Lord is being very unfair about the UK’s support. We are in fact a leader of international support in response to the pandemic; we have spent more than £2.1 billion since 2020 to address its impacts and that includes up to £829 million to support the global development, manufacture and delivery of vaccines, treatments and tests in lower-income countries.
Lord McNicol of West Kilbride (Lab)
My Lord, the deal agreed at the WTO conference obviously fell short of what was initially proposed. Even after 18 months, discussions on extending the waiver to treatments and tests have been postponed again by another six months. Surely sharing clinical data and research on vaccine production is in our own self-interest, but a poor substitute would be having a relationship with or speaking to the pharmaceutical industry. Have Her Majesty’s Government had any representations with British pharmaceutical corporations to try to bypass the obstacles that exist?
Lord Callanan (Con)
The UK Government have regular meetings with pharmaceutical companies. Of course we want to see the maximum amount of support offered to lower-income countries. I just outlined the support we are providing, but we agreed at the meeting to a consensus-based decision that does not waive IP rights but streamlines the processes for developing countries using compulsory licensing to produce and export Covid-19 vaccines.
Post Office: Horizon Compensation
Lord McNicol of West Kilbride Excerpts(1 year, 10 months ago)
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Lord McNicol of West Kilbride (Lab)
My Lords, I thank the Minister for repeating the Statement and in anticipation of answering my questions. He has often been on the right side of this debate, and I thank him for that. The biggest and most frequent criticisms that your Lordships’ House has had are threefold—some have been answered—the time taken to deliver compensation, who gets it, and the levels and amounts. Many of those issues have now been resolved over previous months and with this Statement. March’s announcement that 555 sub-postmasters would receive the compensation that they were entitled to was welcome, as is today’s further announcement confirming a £19.5 million interim compensation package.
However, it is frustrating that it has taken so long to reach this point, when what was needed to be done has been clear and obvious for many years. I am sure that we all agree that the victims of this scandal have been made to endure this stressful uncertainty for far too long.
It is clear that the positive resolution we have now reached is thanks to the tireless work of campaigners both inside and outside this place. That includes, as ever from this place, the noble Lord, Lord Arbuthnot, and from the other place, Kevan Jones. Both have done a tremendous job in fighting this injustice. To be fair, the Minister here and Minister Scully have acted where their predecessors have failed to.
We all know the history of this case, so I will not rehearse the arguments. It is well-documented, both here in Parliament and across the media. We all hope that this sad episode will drive lasting change. The shame of this miscarriage will, rightly, be felt across government for many years to come.
I have a few questions for the Minister; he has touched on some already, and I am looking for more details on others. Can he provide a timescale for when all compensation payments will be made? Will the Minister confirm that the compensation will not affect the Post Office’s core funding, its day-to-day operations or its viability in any way, given the vital role that it performs in many, if not all, our communities? The Minister knows that, across this House, we have called for those involved to be held accountable. Can he update the House—he has a little already—on the ongoing investigations, specifically into Fujitsu and others involved in the technology that led to this failure? Has Fujitsu been sanctioned? Have any of its other contracts been re-evaluated, checked or looked at?
It is not just those external to government. The Minister has previously committed to hold those responsible to account—by that, I mean the Post Office board. Can the Government confirm that the inquiry will extend to the directors of the Post Office, including those placed there by the department—those who wrongly sanctioned legal action? While affected postmasters have lost thousands in legal costs, this is far from all they have lost. The Minister touched on the non-pecuniary damages, but I wonder if he could say a little more. The financials have been restored but, as he and the Statement said, many people were affected in many ways other than financial.
Last year’s historical shortfall scheme for non-GLO postmasters included interim payments, which are urgently needed both for those living in poverty and to start bringing closure to this ordeal. I think the Minister said he expects the payments to start within two weeks, but can he confirm that this will be the case, and will they cover all those affected?
To take a step back, in his High Court judgment in the Horizon IT systems case, Justice Fraser stated that the denial by the Post Office
“amounts to the 21st century equivalent of maintaining that the earth is flat.”
His judgment into this scheme went on to state that the Post Office showed
“the most dreadful complacency, and total lack of interest in investigating these serious issues”.
Will the Post Office now introduce an independent component when conducting prosecutions so that if there are any future prosecutions in other areas, there will be an independent component before taking them to the next stage?
This whole ordeal around the wrongful prosecution of sub-postmasters has caused a huge waste of public funds and time, as well as a huge deal of mental anguish to those wrongfully prosecuted. Can the Government ensure that such a huge level of carelessness and complacency is never repeated so that we can avoid a further waste of public funds, as well as the stress caused by this ordeal?
All sides of this House are rightly united and outraged at what the sub-postmasters and sub-postmistresses experienced and the injustices they suffered for almost 25 years. Lives have been unjustly destroyed, and jobs lost. Some have been imprisoned and others lost their business, and many had the prospect of having a conviction hanging over them. Saddest of all, some did not live to see justice finally restored.
Construction Contracts (England) Exclusion Order 2022
Lord McNicol of West Kilbride Excerpts(1 year, 11 months ago)
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Lord Callanan (Con)
Yes—very good. There is a pipeline of potential projects that could adopt this model, and the Government believe that its use will deliver benefits to consumers. Through increasing competition in the delivery of strategic infrastructure, it will ensure that the cost of this infrastructure is market tested and therefore fair for water and sewerage customers. I apologise for the complicated nature of the explanation and I commend this instrument to the House.
Lord Fox (LD)
As the Minister knows, I am no lawyer—perhaps I should have taken a law degree before attempting this statutory instrument. I note that it is not just the European Union that can amass red tape; we seem to be doing it very well on our own, so I am not sure it can refer us to the WTO for competition.
This is a very complex model. I was caught by the idea that we appear to have been progressing without it for a while. In a sense, is this closing a loophole that has been spotted, or does this reflect a trend in how the market is going about delivering these projects? What drove the decision to table this statutory instrument now? In other words, what has caused this to happen now when it clearly could have happened some time before or in future?
In passing, the Minister mentioned benefits to consumers. I think he outlined that there would be some sort of competitive tendering process, and therefore the price of a particular project would go down in cost. I am interested in the very sharp end of the consumer experience—the connection and that kind of thing. I assume that this applies to that as well as to the larger projects. If it does not, how will a new consumer attempting to join the system experience it? As I understand it, at the moment they are given a “take it or leave it” price by the water supplier. Does that continue to be the case? Will there be an opportunity for consumers to drive down the cost to them of an individual connection or is this focusing only on much larger projects?
The other point is how this flows through the supply chain. The Minister mentioned that the tier 1 contractors are potentially liable to be most affected. However, this marks a change right down through the chain to tiers 2, 3 and others. I would be interested to know how low down their tier structure the department intends to bring suppliers up to speed on how they address their role in this change in the supply chain. Other than that, I think I welcome this and certainly look forward to the Minister’s answers.
Lord McNicol of West Kilbride (Lab)
My Lords, I again thank the Minister for his introduction to another very technical SI. Until his introduction, the only real question I had was around the consultation. He touched on it at the end of his introduction, but I could not find any of the details of the responses to it online. That is probably me, but could he say a little more about the feedback received as part of the consultation?
Following on from the themes of the general public and who will benefit from this SI, the Minister said there were some concerns and worries from the first-tier subcontractors. I think we all agree that the removal of “pay when paid” was good. I worry a little, if we are bringing back special circumstances which in reality are “pay when paid”—although under slightly different processes in terms of certificates and completions—whether we are opening it up. Is the Minister worried about this at all or is the SI tight enough to prevent “pay when paid” returning to the construction sector?
The final point has been touched on by the noble Lords, Lord Berkeley and Lord Fox, and is about fair competition and the general public. Does the Minister believe there will be any increase in price or unitary charge for the general public in this SI? With that, I will leave my questions.
Lord Callanan (Con)
In essence, the noble Lord is right. The regulation exemption will apply to the main, overall contract, but the separate contracts that will exist lower down the supply chain with SMEs will still be subject to the provisions of the construction Act. I suppose the answer to the noble Lord’s question is ultimately it is for the main supplier to price in the risk. Of course, if it wants to be paid, it needs to deliver on the contract and on the service that it is being contracted to provide. As in all these things, it is about providing the right incentives and fair value for the taxpayer or, in this case, the water bill payer, and for the main contractor to deliver the project as efficiently as possible. Ultimately contracts between the lower-tier levels and smaller SMEs are still subject to the provisions and they will need to be paid in any case.
In response to the question asked by the noble Lord, Lord McNicol, this instrument is limited to a specific procurement model that Ofwat wants to use in the regulated water and sewerage sector. He referred to the consultation. That was held through individual and group meetings with the relevant construction industry and with water sector stakeholders and was undertaken over a two-month period.
I was asked a question on pay when paid.
Lord McNicol of West Kilbride (Lab)
I understand when the consultation took place. The bit I could not find when I was reading the statutory instrument was the response to the consultation and whether that has been published on the website or shared at all, because I could not find any information on the consultation. I knew exactly when it was and what happened.
Lord Callanan (Con)
It was not published, but I would be happy to send the noble Lord a letter with the details of the consultation in question.
I was asked a question on pay when paid. Again, it is quite technical. DPC first-tier subcontracts are not excluded from Section 113 of the Housing Grants, Construction and Regeneration Act 1996 under this statutory instrument. This means that pay-when-paid clauses are not permitted. Instead, payments will be made according to an agreed schedule for the delivery of the project.
The basis of DPC is to provide better value for money for customers, ultimately, and bills are expected to be lower than they would have been if the schemes were delivered by regulated water companies via the traditional business-as-usual model by which companies’ prices are set. The first-tier contractors are expected to be part of the highest-level CAP and they are responsible for funding the delivery of the schemes under those contracts.
I hope that I have been able to satisfy the Committee on the questions that were asked—obviously not.
Contracts for Difference (Allocation) and Electricity Market Reform (General) (Amendment) Regulations 2022
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Lord McNicol of West Kilbride (Lab)
My Lords, I thank the Minister for his introduction. I similarly had only three questions arising from this SI—two of which the noble Lord, Lord Lilley, asked and the final one has also just been asked. This is a very technical SI, which we support, and I will just pick up on a couple of points.
The instrument will amend the validity period of the supply chain plan statement—one point that the noble Lord, Lord Lilley, raised—so that it is valid for nine months, not 12 months, from the date of notice given by the Secretary of State. However, it goes on to say:
“The Secretary of State will … be able to determine a longer period if in their opinion there is a compelling reason for the period to be longer”.
Can the Minister share what he would consider to be “compelling reasons” for why it would be extended past nine months, if we are moving it back from 12 months? The noble Lord, Lord Lilley, touched on the second point about the qualifying of the impact under the new commitments; I will leave the Minister to answer that question.
On the supply chain, Regulation 2(3) amends the requirement to provide a supply chain plan statement so that it applies to all floating offshore wind projects. This was the point just made: the current 300-megawatt threshold generating capacity will continue to apply to all other eligible projects that are not floating offshore wind projects. Have the Government given any consideration to removing this threshold for other projects to encourage SCPs?
Finally, I understand that the consultation on the new supply chain plan questionnaire—the condensed version—closes tomorrow. Do any of the changes that would come under that affect this SI and does closing the consultation after the Grand Committee agrees this SI have any consequences?
Lord Callanan (Con)
I thank all the three noble Lords for their contributions. They were raising wider concerns about how the process works; I do not think anybody objected to the SI itself, so I thank Members for their support. The points that were raised demonstrate the need for these regulations—they are technical changes—and the support for introducing them.
As I said at the start of the debate, these changes are essential to ensure that the next CfD allocation round, which will be the first annual one, can best support something we all want to see: an increase in the pace of renewable development and the deployment needed to help us achieve our net-zero ambitions and get the price of electricity down in the longer term. At the same time, they help to achieve our legal net-zero commitments.
My noble friend Lord Lilley was right to point out the need to consider the likely cost to consumers, the impacts on energy security, et cetera. These regulations must be made now, ahead of the next CfD allocation round, which is planned for March next year, as I said, so that the developers have certainty as to the legislative framework for the next round.
Dealing with some of the questions raised, my noble friend Lord Lilley asked me to explain how a shorter validity acts as an incentive and what happens after the supply chain lapses. He also asked whether supply chain plans are published. The answer is that they are. They set out how they will improve the capacity of the supply chain. The noble Lord, Lord Teverson, touched on the reason and I need to be slightly careful here. We are endeavouring to ensure that—how should I put this?—as much of the supply chain as possible is located in the United Kingdom, without breaching our legal obligations, which nobody would want to see us do. We are subject to legal action from the European Commission in the WTO, at the moment.
My noble friend Lord Lilley also asked what the Government are doing to stop CfD generators delaying their start dates so they can benefit from high energy prices. First, the vast majority of operational CfD projects are, happily, paying back into the system, due to the current high energy prices. I set out those figures in a letter to the noble Lord, Lord Teverson. Subject to his agreement, I would be happy to send a copy to my noble friend.
In essence, in April this year, the Low Carbon Contracts Company, which is responsible for administering this system, returned £108.3 million to GB suppliers in respect of payments made by generators since last autumn. However, my noble friend is correct, and the Government are aware of a small number of projects that have delayed their contract start dates to try to benefit from current high wholesale prices. Legally, CfDs are private law contracts between the Low Carbon Contracts Company, the CfD counterparty and generators. The Government are not legally a counterparty to those contracts. However, we have raised the matter with the industry and made it clear that, in our view, this practice is not within the spirit of the scheme, which is intended to deliver benefits to both consumers and developers. While operating on commercial terms, these developers will not receive CfD payments. We are examining possible changes to the scheme to prevent future CfD projects acting in this way. While this practice is regrettable, it is important to remember that CfDs have played a significant role in massively bringing down the cost of offshore wind in recent years.
My noble friend also asked about capacity. The CfD scheme currently supports 16 gigawatts of new capacity, of which 13 gigawatts is offshore wind. Only two projects, totalling 1.4 gigawatts, have delayed their contract start dates in order to sell their electricity on the open market.
Turning to the slightly problematic area which concerns the noble Lord, Lord Teverson, reflecting the concern of the EU that we are breaching WTO rules, my legalistic response to this is that in the supply chain plans we do not require developers to use UK content. The supply chain plans are there to encourage them to invest in creating competitive, capable and efficient supply chains which are, of course, necessary for us to deliver net zero, taking into account our national obligations.
India: Cereals Export Ban
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Lord Grimstone of Boscobel (Con)
My Lords, as I said earlier, only a very small amount indeed of Indian wheat comes to the UK. Indeed, the majority of production of wheat in India contributes to the domestic market. India produced 109 million tonnes of wheat last year, and of that no less than 90 million was consumed domestically.
Lord McNicol of West Kilbride (Lab)
My Lords, since the Russian invasion of Ukraine, the number of countries imposing export restrictions on food has climbed from three to 16. With Russia and Ukraine accounting for 29% of global wheat exports, cereal prices have jumped another 6% following India’s announcement. The Minister is right that the impact on the UK will be negligible, but this is on top of a cost of living crisis. What steps are Her Majesty’s Government taking to alleviate that crisis and to mitigate the current vulnerability of food shortages and food cost spikes?
Contracts for Difference (Miscellaneous Amendments) Regulations 2022
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Lord McNicol of West Kilbride (Lab)
My Lords, although it is a little tangential, I declare my interest as set out in the register as a commissioner on the UK Hydrogen Policy Commission, which is within the same field though not directly relevant to this SI.
First, as other noble Lords have done, I thank the Minister for his explanation of the regulations before the Committee. As we have heard, they make a few minor but important amendments to two previous sets of regulations—the eligible generator regulations and the allocation regulations. Before I dive into those, I reiterate our support for the continuation of contracts for difference as a method of securing energy capacity while ensuring that developers, government and customers can be confident in the security of long-term, high-cost and high-investment projects.
Regulation 2 in the draft regulations ensures that non-pipeline transport methods are included within the definition of complete CCS systems. My reading of the 2014 eligible generator regulations, and that of many who responded to the consultation, certainly did not appear to exclude this system. I am not convinced how necessary it is. I agree that non-pipeline transport of carbon dioxide is essential to decarbonised projects outside the clusters. As the noble Lord, Lord Teverson, said, we would hope that transport around and inside the clusters would be by pipeline.
The noble Lord, Lord Teverson, presumed that this would be on trucks. My presumption was that it would be on rails. Again, it would be interesting if the Minister had any information from the department about how non-pipeline transport would take place, as there is an environmental difference between rail and road transport.
Regulation 2 also widens the criteria for carrying out generating activity to include alterations of existing generation stations to connect them to a CCS system. As other noble Lords have said, this makes perfect sense. I agree that it is an important step to help retrofit a station to give access to the benefits of contracts for difference.
That change is appropriately repeated, in Regulation 3, for the allocation regulations, but the main thrust of Regulation 3 is to allow contemplation of contracts that do not specify a strike price and reference price, in line with the new payment method under the DPA business model. Instead, the DPA business model will implement an availability payment for low-carbon generation capacity and a variable payment, which links the new power CCS plants—again, there is a long time lead-in here, since we are hoping they will be in operation by 2030, so perhaps the Minister can confirm the dates for the completion of the CCS plants—with an unabated reference plant. This is said to incentivise availability and enable more flexible operation. Of course, it is right to ensure that the regulations are updated correctly, to allow for these new developments to take place, but perhaps the Minister could elaborate somewhat on how these changes will incentivise availability and when we can expect to reap the benefits from the new power CCS plants.
The noble Baroness, Lady McIntosh, has already picked up on—and I am sure that the Minister has read with excitement—the Secondary Legislation Scrutiny Committee’s 37th report. In paragraphs 21 to 23, as has been stated, the committee was critical. To be fair, all our interventions have been quite detailed. In the produced documentation, I have been able to understand clearly that it is of importance. We have already had from the department an Explanatory Memorandum on that. I hope that, before all future debates, these points raised on page 9 of the committee’s report will be taken into consideration.
Lord Callanan (Con)
First, I thank my noble friend Lady McIntosh, and the noble Lords, Lord Teverson and Lord McNicol, for their constructive points and comments. Let me start by emphasising that the changes contained in these regulations are essential to enable the award of power carbon capture and storage contracts. The Government are committed to reaching net zero and, of course, to decarbonising our electricity system. All noble Lords will be aware that the Climate Change Committee has described CCS as a necessity and not an option to help us on the road and transition to net zero. Therefore, CCUS will be essential to meeting the UK’s 2050 net-zero target—I think that all three speakers agreed with that point.
Decarbonising the power sector has so far led the UK’s efforts to reduce greenhouse gas emissions. Thirty years ago, fossil fuels provided nearly 80% of the UK’s electricity supply. In 1990, electricity generation accounted for about 25% of total UK emissions, but by 2018 that was down to only 15% of total UK emissions. Today, I am pleased to say that the country gets over half of its power from low-carbon technologies, and the majority of those are renewable.
We can be confident that renewables will continue to play a key and increasing role in our generation mix on the overall journey to net zero, to decarbonise while maintaining security of supply, and keeping costs low. But for when the wind is not blowing and when the sun is not shining—something that applies particularly to the homeland of the noble Lord, Lord McNicol—we will need to balance renewable variable against demand. To do that, of course, we need system flexibility and energy storage, and we need non-weather dependent low-carbon power generation. That is why we consider that thermal power with carbon capture and storage is one technology that can provide that at scale. Therefore, carbon capture storage technologies will be important for the trajectory to achieving our 2050 net-zero target, and they will play a vital role in levelling up the economy, supporting the low-carbon economic transformation in our industrial regions and helping to create new high-value jobs.
On the specific points that were raised, starting with my noble friend Lady McIntosh, I am pleased to say that these regulations will indeed facilitate the rollout of the Government’s CCUS programme but of course will not bring projects forward in themselves. However, I am pleased to say that we have also seen significant interest in the programme, particularly from the east-coast cluster that my noble friend mentioned. We will seek to bring forward at least one power CCUS plant in the mid-2020s. This will be achieved through the CCUS cluster sequencing process and is subject to the outcome of that process, including, as always, value for money and affordability considerations. I am sure that my noble friend would agree with that.
Around half of our demand for gas is met through domestic supplies, but in meeting net zero by 2050 we may still use a quarter of the gas that we use now. So, to help to reduce our reliance on fossil fuels, we have to fully utilise the great North Sea reserve: we have to use the empty caverns that we have created for CO2 storage, and we must bring through hydrogen to use as an alternative to natural gas and help to use our offshore expertise to support our offshore wind sector. As a result of those plans, the North Sea will still be a foundation of our energy security, but of course we will have reduced our gas consumption by over 40% by 2030.
As clarified by the noble Lord, Lord Teverson, who was doing my job for me, the Explanatory Memorandum was revised on 5 May with in-depth footnotes to explain the acronyms and technical terms. I apologise if it was not clear; obviously, it is a complicated subject.
On the points made by the noble Lord, Lord Teverson, we consider that the capacity for T&S networks to be able to accept CO2 from dispersed sites and from international sources, transported by ship, road or rail—which would be non-pipeline transportation—may be important for our long-term objectives of achieving our carbon budgets and net zero, so we do not want to exclude power CCS projects that can transport and store CO2 by non-pipeline transport. We will need significant volumes of new-build, low-carbon capacity to meet growing electricity demand and to take the place of retiring capacity. To complement expanding intermittent renewables, it is important that some of this capacity is flexible and can operate for extended periods when renewable output is lower.
Our existing gas generation capacity is ageing. Most of it was built in the 1990s, during the so-called dash for gas. Advances in gas turbine technology mean that a purpose-built, modern, new-build gas-fired power station with CCUS would be more efficient than an older design retrofitted with CCUS technology. However, utilising existing assets can of course improve value for money in some cases, and to decarbonise our electricity system in line with the targets of the fifth and sixth carbon budgets, we consider that we will have to use existing generation as well as new-build capacity, both of which of course would need to be abated.
On the capacity market, CCUS requires more support for capacity given the co-ordination problem with infrastructure yet to be built, and the DPA incentivises investment to bring forward low-carbon generation capacity. The availability payment also acts as a way to incentivise those power CCUS projects and helps to maintain high capture rates throughout the DPA. I will come back to the noble Lord in writing on his question regarding the “payback” from CfDs for departments, but I think the answer will revolve around the fact that the money goes into Ofgem and is therefore used to offset other CfD payments. I certainly do not think that any of it appears either in the BEIS or Treasury budgets, but I will come back to the noble Lord and confirm the details of that.
On the points raised by the noble Lord, Lord McNicol, we wanted to ensure that non-pipeline transport was explicitly and unambiguously included in these regulations, and there is certainly no presumption in favour of road transport. Indeed, rail or shipping may also be covered and are probably more likely forms of transport. To take one pertinent example, at the moment Norway is currently shipping CO2. I hope that clarifies the point for the noble Lord.
To close, I underline once more that these regulations are a vital part of the UK’s efforts to reach net zero and to decarbonise our electricity system. With that, I commend these draft regulations to the Committee.
Queen’s Speech
Lord McNicol of West Kilbride Excerpts(1 year, 11 months ago)
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Lord McNicol of West Kilbride (Lab)
My Lords, the economy, energy and the environment are three of the biggest challenges that we as a country now face. It is no wonder that so many from across your Lordships’ House wanted to contribute to this debate.
I start by thanking all those who have spoken. There have been many thoughtful and thought-provoking speeches—your Lordships’ House at its best. I particularly thank my noble friend Lady Jones of Whitchurch for her opening contribution, in which she clearly outlined the fundamental failure of this Queen’s Speech when she said:
“We know that what really concern people are the cost of living crisis, the huge rise in energy bills, lengthening NHS waiting lists and the impact of climate change on our future well-being. However, instead of a programme to address these very real concerns, the Government have chosen to pick fabricated fights to please a dwindling group of core supporters.”
I also congratulate the right reverend Prelate the Bishop of St Edmundsbury and Ipswich on his maiden speech and offer these Benches’ support in addressing his priority—the challenges facing young people in towns and villages—which we are more than happy to support.
The Queen’s Speech contained 39 draft Bills, of which two sit in the Treasury, two in Defra and two and a half in BEIS. It is not just the lack of Bills that worries me but the content of them. They feel woefully inadequate to deal with today’s challenges across the economy, environment and energy. Inflation is currently at a 30-year high, with the potential for it to peak above 10%. An environmental crisis is rapidly approaching and looming, while millions of families are facing the catastrophe of soaring energy bills. My question to the Minister is this: does he really believe that the Bills as set out in the Queen’s Speech address these challenges? If he does, which is what I expect him to say, can he outline how the Treasury, BEIS and Defra Bills will actually deliver on that? Will he also answer some of the questions from his own Benches, specifically those from the noble Lord, Lord Forsyth?
I start with the economy. Over the last five hours of this debate, we have heard speech after speech and statistic after statistic on how the Government are failing on the economy—and that is just from the Government’s own Benches. This Government have overseen a decade of low growth. The IMF has predicted that, in 2023, the UK will slump to the bottom of the G7 league table. In March, the British Chambers of Commerce downgraded its own growth forecast for 2022 by half a per cent on its previous estimates, reflecting a deteriorating outlook for consumer spending and a weaker than expected rebound in business investment. Most people are experiencing real-terms pay cuts this year and are likely to do so for the next few years. As my noble friend Lord Chandos said in addressing these issues, it is painful for many but it is devastating for the poorest.
The Bank of England has increased the base interest rate from 0.75% to 1% in order to counter inflationary pressures, but this will further squeeze household incomes. The Bank of England has warned that, for many years, the cost of living crisis will feel more like a recession. While the Government like to talk of record numbers of vacancies, many businesses are finding that they are simply unable to recruit the staff that they need, holding back their potential and that of the wider economy. Rather than presenting a coherent set of measures to tackle the cost of living crisis and rebalance the economy, the Government’s answer to poor economic performance appears to be deregulation of financial services, which could pave the way for a repeat of past financial crises.
The financial services and markets Bill should be about how financial systems work for the people, by prioritising financial inclusion, green investment and the regulation of emerging markets such as those relating to cryptocurrencies—but I fear it will not. These Benches welcome the UK innovation bank being put on a statutory footing, but there needs to be greater and more consistent focus on green investment.
The Queen’s Speech did nothing to revisit social security uprating, as my noble friend Lord Wood and many others outlined. That is despite the Prime Minister committing to consider a more generous increase when he appeared before the Commons Liaison Committee earlier this year. As the noble Lord, Lord Bridges, said, the Government say one thing and do another. A variety of charities are warning of an exceptional growth in poverty unless the Government ensure that social security payments keep pace with inflation. In response to the Queen’s Speech, the Trussell Trust noted that, for many families, life is
“no longer about living but surviving”.
For millions of families facing the catastrophe of soaring energy costs, the Government’s energy Bill is hopelessly inadequate. There is nothing to tackle the cost of living crisis, to bring forward energy efficiency measures or to ensure the green energy sprint that could bring down bills. The current energy crisis is a product of failed energy policies. British people are paying the price of higher energy bills now, because of the Government’s failure, over the last decade, to properly regulate the energy market or to develop renewables. Fortunately, we have seen some progress on nuclear power and will see more nuclear build, but more needs to be invested in renewables.
The Government could, today, have introduced greater support for working families and pensioners facing these rising bills, funded by a windfall tax on oil and gas companies. Nor does the Bill contain the measures desperately needed to end the ban on onshore wind and to build a national mission of home insulation. A decade of failed energy policy has left energy bills too high and the UK’s energy system just too weak. Labour would have brought forward an ambitious energy Bill that took real action to bring down energy bills, accelerate the green energy sprint and strengthen the UK’s energy security.
Finally, on the environment, the Covid pandemic served to highlight the importance of open and outdoor spaces. This Session of Parliament will see us debate a number of vital environmental targets, but, as the noble Baroness, Lady Hayman, rightly highlighted, this will be done by secondary legislation enabled by the Environment Act. The process underpinning this has been chaotic from the start. That, coupled with a lack of environmental content in the Queen’s Speech, does not instil in us sufficient belief that the Government have the ambition to solve this crisis. Given the severity of the climate crisis and the level of public interest in it, it is disappointing that the Government are not doubling down on commitments relating to net zero—an opportunity missed. The Government seem to have chosen to devote more time and political capital to stopping climate-related direct action from protesters than to solving the issues they are raising.
In conclusion, this Queen’s Speech feels light and full of rhetoric, with little ambition. To quote the noble Lord, Lord Tugendhat, there is an “absence of urgency”. Where is the high-skill, high-tech, high-wage Britain of the 21st century? Where is the plan to rebalance and rebuild our economy? Where is the plan to reduce energy bills for consumers and businesses? And where is the promised employment rights Bill? The Government simply do not have the answers to the challenges our country now faces.
Tomorrow, Labour will give the Government another chance to support a windfall tax. As we have heard, there is much support for this across the Floor of the House. Let us hope the Government take that opportunity.
Energy Security Strategy
Lord McNicol of West Kilbride Excerpts(2 years, 1 month ago)
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Lord Callanan (Con)
There were a number of questions from the noble Baroness. I think she may have unfairly maligned my noble friend Lord Ashton. I am not aware that he has any strong views on the subject. I am sure he will communicate with me if he does, but he has not so far. The strategy will be published later today, and I apologise that the noble Baroness has not had a chance to look at it so far.
With regard to her other questions, we are rolling out the development and formation of low-carbon sources of power, be they nuclear or offshore wind, and we are going to go further on onshore wind. I know it is a subject that the noble Baroness feels passionately about. We must do so in full recognition of the concerns of many local communities. We want to take people with us when we do that, so we will seek a number of pilots to take those policies forward.
We are already spending a lot of money on energy efficiency programmes. I have outlined them numerous times in this House before, but I would be happy to do so again. It would have been good to go further but, regrettably, that was not possible in this case.
Lord McNicol of West Kilbride (Lab)
My Lords, I think there may be a theme to these questions. The Minister is well aware of these Benches’ support for nuclear and offshore wind. However, onshore wind and solar power are the electricity sources that can reduce our reliance on Russian gas the fastest, given their short construction times. Bottlenecks in planning can be resolved through changes to regulation, and doing so would unlock new power to eliminate Russian gas from our energy mix. Yet our understanding is that specific targets for onshore wind, which is the cheapest and fastest, have disappeared or been removed. Could the Minister explain why? Surely it is not possible that the Government are once again prioritising internal party politics rather than the national interest.
Lord Callanan (Con)
There is a lot of good news in this strategy for those who believe in the development and deployment of low-carbon power: the expansion of nuclear and of offshore wind, further developments in hydrogen, et cetera. As I said, in terms of onshore wind, we will be looking to develop a limited range of partnerships with supportive local communities. I should add that this is in England; Scotland and Wales have their own separate planning powers. We will look to develop partnerships with a limited range of supportive communities to try to agree further deployment of onshore wind.
Nuclear Energy (Financing) Bill
Lord McNicol of West Kilbride ExcerptsThursday 24th March 2022
(2 years, 1 month ago)
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Lord McNicol of West Kilbride (Lab)
My Lords, this Bill is about finance as much as it is about nuclear power. Labour believes that new nuclear has an important supporting role to play in the energy mix, alongside the decisive shift to renewables needed to deliver the climate transition and low-carbon energy and secure our energy for the future. As set out by the Climate Change Committee, we need all the low-carbon sources at our disposal to deliver that rapid and fair transition.
The fundamental point is: if we are to build new nuclear power stations, how are we to fund them? Labour supports the building of them for a number of reasons. Nuclear energy is the only proven technology which can supply low-carbon baseload electricity at scale. At a time when we face a global climate crisis, the further rolling out of nuclear energy will also play a crucial role in the UK meeting its climate targets.
I am grateful to the noble Lord, Lord Oates, for tabling Amendments 1, 3 and 10 in this group and was pleased to add my name to Amendment 10, following the extension of the scope into legacy benefits. We are in agreement on the importance of achieving value for money but, given the Government’s track record on their use of taxpayers’ money, it is no surprise that many noble Lords want to see stronger requirements in the Bill. Amendments 3 and 10 bring us to the core issues here: the impact of the RAB model on consumer bills and the practical impact on people on very low incomes.
For weeks the Government have been promising meaningful action to help people across the country through the ever-worsening cost of living crisis. Try as the Government might to blame rising inflation, energy bills and Ukraine, the OBR’s stark warning about living standards shows that the problem faced by many is an issue around the British economy. In meetings over recent weeks, we have been told that protecting claimants of universal credit and other social security benefits is simply too difficult, particularly as we are talking about saving only £1 or £2 a week, but in these circumstances £1 or £2 a week will be critical for many families and households.
However, yesterday’s Spring Statement did nothing to support pensioners and benefit claimants and we must consider Amendment 10 against that backdrop. If we had faith that the most vulnerable in society would be protected, there would have been no need for the noble Lord, Lord Oates, to table this amendment. In less than two weeks’ time, pensions and other social security payments will be cut in real terms. People are already having to choose between heating and eating.
We support the use of the RAB model to finance new nuclear projects and we very much hope that having a more reliable energy baseline will make costs more predictable. However, it is our duty to look at those who are disproportionally impacted by this decision. We have only to look at the newspaper headlines this morning about the deepest cost of living crisis since the 1950s. On that basis, we hope that the noble Lord, Lord Oates, will test the opinion of the House when we come to Amendment 10 and that MPs will have the opportunity to debate this important matter.
“(c) the nuclear company is not owned, wholly or in part, by a foreign power or entity listed in regulations made under section (Barring of certain foreign powers or entities from involvement in UK civil nuclear projects).”Member’s explanatory statement
This amendment makes clear that a company may not be designated by the Secretary of State if it is owned, wholly or in part, by a foreign power or entity specified in regulations laid by the Secretary of State.
Lord McNicol of West Kilbride (Lab)
My Lords, I shall speak also to Amendment 6 in this group.
Amendment 2
“makes clear that a company may not be designated by the Secretary of State if it is owned, wholly or in part, by a foreign power or entity specified in regulations laid by the Secretary of State.”
In Grand Committee, my noble friend Lady Wilcox of Newport very ably, in my Covid absence, introduced two Labour amendments that would have severely restricted foreign involvement in the UK’s civil nuclear industry. During the course of that debate, she suggested that if the Government were sympathetic to the arguments but uneasy with the mechanism, they could come forward with an alternative. In responding, the Minister confirmed this. These adapted amendments following Committee take on board the considerations that we debated and, although weakening the original amendments, retain their essence.
It is with that in mind that I hope the Minister will consider Amendments 2 and 6 favourably. They now provide alternatives—rather than banning foreign involvement completely, they would require the Secretary of State to establish and maintain a list of foreign powers and entities that are barred from involvement in UK nuclear projects. This feels both proportionate and reasonable. As we see it, the list would operate in a similar manner to the financial action task force’s list of high-risk countries for money laundering, which is part of our domestic law via regularly updated SIs.
The amendments do not specify criteria for including states or entities on the list; it could be national security, but the Secretary of State could also choose to bar a company that has a questionable track record in other respects—be it a poor delivery record or safety concerns. It may be that the department wishes to bar the involvement of some individuals or entities currently subject to sanctions but who may not necessarily still be on the sanctions list at the time of a future designation.
The Minister told us in Committee that this was an interesting idea and that the department would study it closely. We are grateful that he made BEIS officials available to us for discussion on this and other topics last week, but that meeting took place just hours before the deadline for tabling government amendments, and final agreement could not be reached. The Minister knows we are supportive of the Bill, but our general support should not diminish the importance of our concerns. The feeling of colleagues in Grand Committee and in private discussions since has been that the protections under the National Security and Investment Act 2021 are not sufficient in this area. We feel that Amendments 2 and 6 offer a sensible way forward, building on a system already used by other departments—Her Majesty’s Treasury, for example—and familiar to financial and other institutions across the country.
Should the amendments be accepted, I am sure the department will be free to address any drafting deficiencies, but we on these Benches believe that this is an important point of principle and will test the opinion of the House if the Minister does not accept Amendment 2. With that, I beg to move.
Lord Vaux of Harrowden (CB)
My Lords, I speak to Amendments 4, 7 and 8 in this group in my name, but, before I do that, I will quickly say that I also support Amendments 2 and 6, in the name of the noble Lord, Lord McNicol of West Kilbride. In Committee, I said I was unable to support his amendments because I felt that a blanket ban on foreign state involvement in our nuclear programme went much too far, so I am delighted that he has now found a more flexible formulation, which would enable the Secretary of State to decide who should be barred from the nuclear programme.
The amendments in my name are intended to cover a similar point, but perhaps more widely and slightly more flexibly. Last week, we spent a lot of time discussing the importance of being able to identify the ultimate beneficial owners of property in the UK. It seems to me considerably more important that we should always be certain of the identity of any party that may be able to exercise significant control over a nuclear company, either directly or indirectly, and that we should be able to take action to prevent undesirable parties, should they attempt to obtain significant control of a nuclear company. My amendments simply seek to achieve that.
As I mentioned in Committee, it was ruled out of scope when I tried to introduce an amendment that would have allowed the Secretary of State to revoke the licence of a nuclear company if an undesirable party obtained significant control. My amendments here are restricted to the designation under the Bill, but the comments I am about to make apply every bit as much to the licensing regime, and I ask the Minister to keep that in mind.
I have revised my amendments from Committee so that my three amendments now introduce a regime for designated nuclear companies that is similar to that which applies to persons with significant control of UK companies. They further give the Secretary of State the ability—not the obligation—to revoke the designation of a nuclear company either where the Secretary of State is not satisfied that the identity of a party with significant control has been verified, or if a party later obtains significant control and the Secretary of State is not satisfied that they are a fit and proper party to own or control a company.
I am very grateful to the Minister and his team for their helpful engagement on this point—again, unfortunately, just before the deadline for submitting the amendments. They have pointed me towards the National Security and Investment Act 2021—the NSI Act—as providing the protections that I am seeking and, to an extent, they are right. But there remain important gaps, and I want to raise them and hear what the Minister thinks.
First, the NSI Act comes into play only if there is a notifiable transaction, so it does not apply at the point when a nuclear company is applying to be designated. It seems to me important that we designate companies only where we are satisfied that we know the identity of all parties that might have significant control, so Amendment 4 adds a new condition that the Secretary of State is satisfied that the identity of any party with significant control has been verified.
I am sure the Minister will tell us that the Government will of course carry out this verification as part of their due diligence—he is nodding—before a designation is granted. If the Government intend to carry out this step anyway, why not accept the amendment? Secondly, it is, sadly, not uncommon for due diligence not to be completed as thoroughly as we might like—1 am sure we can all think of examples of that. The amendment would not add any burden to the Government, but it would ensure that this critical verification step must be included in the due diligence, so why not accept it?
There is another reason. If the due diligence failed to identify such a party for some reason, without Amendments 4 and 7 taken together there would be no mechanism in the Bill to remedy the situation after the designation had been granted. The NSI Act would not apply, because no qualifying transaction would have taken place. So we would be stuck with a party that we had not verified, which cannot be right.
The next problem with relying on the NSI Act is that the first remedy under the Act is that, if a notifiable transaction takes place without authorisation, it is void. But that can apply only to UK companies. If, for example, a nuclear company has a 51% shareholder that is a Japanese company, and a Chinese company later takes a stake in that Japanese company, there is no way we can void that transaction, regardless of what the NSI Act says.
Lord McNicol of West Kilbride (Lab)
I am very grateful to the Minister for his detailed response to these amendments and to the noble Lord, Lord Vaux, who ably introduced his amendments and made many powerful arguments in their favour. I appreciate the sentiment and tone of the Minister’s response. It is unusual to hear a Minister not taking up the powers that we are looking to give the Secretary of State and being constrained. In the world that we live in today, and given the importance of the civil nuclear sector, we think that these amendments—the Secretary of State having this power—is so important.
The Minister is right—this is about due diligence—but I think he is wrong when he talks about an outright ban. That would come in on an entity or designated organisation only if the Secretary of State wished it. It would come to Parliament only if it was recommended by the Secretary of State. Amendments 2 and 6 as written give that power to the Secretary of State.
I am also very pleased to hear about the special share. It was in one of the amendments that we laid in Committee, and we fully support moving forward with Sizewell and the Government taking a special share. We would love it to be retrospective as well, for Hinkley, but we understand the difficulties with doing that.
We on these Benches fundamentally believe that Amendment 2 and, consequentially, Amendment 6 set important principles, so notwithstanding the Minister’s response I would like to test the opinion of the House with regard to Amendment 2 and, consequentially, Amendment 6.
“(5A) Where conditions are imposed under subsection (5)(c), these may include duties on the nuclear company to—(a) collect data relating to the quantity and value of domestically produced goods and fuel utilised during the construction and operation of the nuclear project, and(b) make such data available to the Secretary of State to publish in a manner, and at a frequency, that the Secretary of State deems appropriate.”Member’s explanatory statement
This amendment would allow the Secretary of State to compel a nuclear company to collect data relating to domestically produced goods and fuel, with such data to be shared with (and published by) the Secretary of State.
Lord McNicol of West Kilbride (Lab)
My Lords, I am sure this group will be very brief. Amendment 5 does exactly what it says: it instructs
“the Secretary of State to compel a nuclear company to collect data relating to domestically produced goods and fuel, with such data to be shared with (and published by) the Secretary of State.”
When tabled in Committee, this amendment was far broader and wider, but I have edited it down in the hope that the Minister will accept it. If it is not technically quite right, we could bring back some wording for Third Reading. We believe the actions required would not be onerous on industry, as much of the data already exists within its procurement process.
The reasons for tabling this amendment are twofold. First, as was said in relation to amendments in the previous group, in my name and those of the noble Lords, Lord Vaux and Lord Oates, the nuclear industry is a highly sensitive one. Parliament and the Secretary of State knowing where the component parts originate is just a sensible approach. With the war in Ukraine and problems with Russia, China and other nations, being clear on where goods and component parts originate makes good sense.
Secondly, we are unashamedly in favour of government, Parliament and the Secretary of State supporting the development and promotion of British goods, skills and jobs. To do that and to invest in relevant areas, it helps—and they should be required—to know what is and is not domestically produced, and thus where the gaps are.
We have just completed Report on the Subsidy Control Bill, which replaces the historic EU state aid scheme. If implemented well and properly by devolved authorities, local authorities and national government, the Bill will assist in the direction of subsidies to help the UK industry. With those few words, I beg to move Amendment 5.
Baroness Bennett of Manor Castle (GP)
My Lords, I rise briefly to speak in support of Amendment 5 and particularly to pick up an aspect of it that we did not really discuss in Committee. It was brought to my attention by a foreign visitor. If we are talking about the source of the fuel, it is not just about whether the fuel going into the reactor is manufactured in the UK but where the raw material, the uranium, comes from. As the noble Lord, Lord McNicol, just said, there are issues of security here, as well as issues of human rights et cetera. Looking down the list of the world’s top uranium producers, Kazakhstan is number one and Russia, China—according to an estimated figure—and Ukraine are also in the top 10. I have been trying to establish what the current situation is—perhaps the Minister will tell me, or write to me later—about our current fuel and the origin of the supplies, but it is important in the context of this amendment that we consider that.
Baroness Bloomfield of Hinton Waldrist (Con)
I thank the noble Lord for his continued and constructive engagement with the Bill. I state clearly to him and to the noble Baroness, Lady Bennett, that I share the ambition to maximise the opportunities for UK industry in the nuclear supply chain. We are taking steps actively to support and develop the UK nuclear supply chain, including our world-leading nuclear fuel industry, which the recent spending review confirmed will be supported up to £75 million to preserve and develop the UK’s nuclear fuel production capability. We expect developers to play their part in this, supporting UK businesses to compete for opportunities in new projects, and to share their plans with government. For example, EDF has set out that, if the Sizewell C project is approved, it will aim to place 70% of construction contracts with UK companies—up from 64% at Hinkley Point C—and has engaged with the department on its plans for the plant’s supply chains.
For those projects that proceed to construction and operation, we expect that data on their supply chains, including what opportunities are being won by UK businesses, will continue to be shared with the department. Specifying that a nuclear company must use UK nuclear fuel would create a significant risk of putting the UK in breach of its obligations under the TCA, and potentially also of our obligations under the WTO and other international agreements—but we do expect developers to be transparent with the public about UK content in their effective supply chains during construction, as EDF has been with the Hinkley Point C project. We will support developers to make this information public where it does not prejudice commercial interests.
We believe that the matter is best taken forward through negotiations on new projects seeking the support of a RAB funding model and ongoing partnership working with the sector. Therefore, I do not believe that it is appropriate to accept the noble Lord’s amendment today. However, I accept the spirit in which the amendment was tabled, and I hope that I have given some assurance that we will actively aim to maximise the opportunities for UK companies as we deliver on our ambitions for nuclear power. As for the specific question from the noble Baroness, Lady Bennett of Manor Castle, I need to check with my officials to make sure that that can be divulged and, if it can, I will write to her after this stage of the Bill. In the meantime, I ask the noble Lord to withdraw his amendment.
Lord McNicol of West Kilbride (Lab)
I thank the Minister for her response and for her assurances. It is good to hear that the information on where the products come from is shared with the department. We were hoping that it could be shared more widely and publicly to help promote our industries. With that, I beg leave to withdraw the amendment.
“(3A) Nothing in this Part prevents the Secretary of State establishing a Government-owned company into which the assets, liabilities and undertakings of the relevant licensee nuclear company may be transferred in order to allow electricity supply to be commenced or continued.”Member’s explanatory statement
This amendment makes clear that nothing in Part 3 of the Bill (the special administration regime) prevents the Secretary of State from taking a project into public ownership, where that would allow electricity supply to be commenced or continued.
Lord McNicol of West Kilbride (Lab)
My Lords, Amendment 11 would require the Secretary of State to undertake an assessment of the case for establishing a state-owned entity to take over the delivery and operation of a nuclear project in the event that a nuclear company fails and cannot be saved or have its assets transferred:
“This amendment makes clear that nothing in Part 3 of the Bill (the special administration regime) prevents the Secretary of State from taking a project into public ownership, where that would allow electricity supply to be commenced or continued.”
The ultimate aim of the Bill is to get power generated and distributed to homes and businesses across the country. We hope that firms will not fail, but if they do, there needs to be a clear process to ensure that plants are able to be built or continue to operate. I am sure the Minister will argue, as he did in Committee, that the special administration regime does this, but there is still potential for steps that may be needed, and surely, options should be defined in legislation now, rather than waiting until the worst should happen.
Amendment 12, in the name of the noble Lord, Lord Ravensdale, is fundamental to how nuclear energy is seen in the green mix. The Prime Minister has made this argument in favour of the wording within this amendment: I realise that we on these Benches do not often call for the Prime Minister’s words to be turned into law, but in this case we do. In fact, the government briefing and policy background to this Bill states, in paragraph 2:
“The Government has made high-level commitments to eliminate its contribution to greenhouse gas emissions. This includes the passage of legislation that requires the UK to bring all greenhouse gas emissions to net zero by 2050, as well as subsequent commitments to reduce carbon emissions by 78% and to decarbonise the electricity system by 2035.”
That is all commendable. It goes on:
“This will require rapid, significant changes in the energy sector: total UK electricity supply will need to double by 2050 and electricity from low-carbon sources will need to quadruple, in order to deliver the UK’s commitment to become a Net Zero emissions economy by that year.”
This is the important bit; it goes on, in paragraph 3:
“A key part of this will be to secure the transition to a clean electricity system that is reliable and affordable for energy consumers. This will require a substantial deployment of renewable technologies, alongside technologies such as nuclear which can provide energy to consumers when the wind is not blowing or the sun does not shine.”
Finally, paragraph 4 says:
“Large scale nuclear power plants are the only proven technology available today to provide continuous, reliable and low carbon electricity.”
I think the Government’s words speak for themselves, and I am happy to support the noble Lord, Lord Ravensdale, in his amendment. With that, I beg to move my Amendment 11.
Lord McNicol of West Kilbride (Lab)
My Lords, I am really looking forward to reading Hansard tomorrow and I compliment the Minister on hiccuping his way through the whole of his response, as with his introduction.
I thank the Minister for his detailed explanation and response to my Amendment 11 and for committing those words to your Lordships’ House. I also thank all other noble Lords for their participation in the debate, especially the noble Baroness, Lady Neville-Rolfe, on the next steps. Hinkley has been a good start; RAB, if this measure makes it through both Houses, is a vast improvement on CfDs; and, hopefully, Sizewell will be another step forward. But there is still more to do. The noble Baroness’s mention of SMRs and future large-scale civil nuclear developments is important. With that, I beg leave to withdraw the amendment.