Great British Energy Bill

Lord Offord of Garvel Excerpts

Report stage
Tuesday 11th February 2025 Lords Chamber

[Lord Hamilton of Epsom (Con)]

My Lords, I wish to pick up the concern voiced by the noble Lord, Lord Vaux, that GB Energy will pick up some of what I have described as the low-hanging fruit of projects in the energy sector, which can be serviced by the private sector. I do not think that that will happen very much. The putting up of wind turbines and so on by the private sector is well established. It is done by financiers who are more concerned by the feed-in tariff than they are by anything else. They even succeed, as I mentioned in Committee, in being paid at a time when nobody wants the electricity coming from the wind turbines, which I always think is a rather remarkable financial deal to be able to pull off.

Turning to Amendment 39 in the name of my noble friend Lord Frost, I raise with the Minister the question of tiered finance. There will be an awful lot of looking into the activities of GB Energy in investing in things but, in my view, here lies the problem: you will find that there are different layers of finance going into a project that may involve GB Energy. The risk we always run is that, unless the new chairman who has been appointed for GB Energy is incredibly smart, he is going to be left with the worst, highest-risk element of any of these deals being funded by the taxpayer. Of course, this means that, if the thing goes wrong, the private sector will suffer less than the taxpayer, who will lose all their money.

I would like to hear the Minister’s view on tiered finance, including how we will be able to have openness around it. Will it be possible for outsiders to look in on these deals and comment on them? Generally, does the Minister agree with me that the risk to the taxpayer seems extremely high on this? Of course, we will need Treasury authorisation for all these deals—the Treasury may stop them happening in the beginning—but it would be interesting to know how the Minister’s mind is working on this because it strikes me that the taxpayers are standing in the way of the high-risk elements of any of these deals in which GBE gets involved.

[Lord Offord of Garvel (Con)]

My Lords, I thank my noble friend Lady Noakes for opening the debate on this group of amendments, as well as all noble Lords who have contributed to the debate so far.

My noble friend Lord Frost pointed out in Committee that this Bill is even thinner in its contents than Bills that we would normally term skeleton Bills. I completely agree with this characterisation. As it stands, there is nothing in the Bill that tells us what Great British Energy will actually do. What will it invest in? How will it decide where its money goes? What criteria will it use for its investments? We have had three and a half days of Committee over five days on the Bill. We still do not know the answers to these questions.

On the first day in Committee, the Minister said:

“The key thing in the structure of the Bill is the objectives set in Clause 3. They will be informed by the statement of strategic priorities that Great British Energy will operate in, making sure that it will be aligned with the Government’s priorities”.—[Official Report, 3/12/24; col. 1066.]


We have discussed the different objects and objectives of Great British Energy, but I think that we need to return to this topic. It was pointed out by my noble friend Lady Noakes and the noble Lord, Lord Vaux of Harrowden, that, contrary to what the Minister has claimed, Clause 3 does not set out the objectives of Great British Energy.

Clause 3 establishes the objects of Great British Energy. Those objects set out what GBE will do. Those objects will be the means through which it will try to achieve its objectives, but what those objectives are still eludes us. That is why Amendment 1, tabled by my noble friend Lady Noakes and signed by the noble Lord, Lord Vaux, is so important. It establishes in the Bill the objectives that Great British Energy will have to work towards. Ensuring energy security, increasing long-term energy storage, increasing the levels of clean energy generation and reducing energy costs are all laudable objectives. They are all things that the Government have indicated that they want Great British Energy to work towards, but unless they are put into the legislation, there is no assurance that they will happen.

This point is especially pertinent given the recent refusal to re-commit to reducing energy bills. Noble Lords will be all too aware that during the election campaign the Government pledged to reduce energy bills by £300 per household. We then heard the chair of Great British Energy, Jürgen Maier, speaking on Sky News this weekend and refusing to say whether that promise still stood. Then the Prime Minister, speaking at the National Nuclear Laboratory last week, confirmed this figure and said:

“We said we’d aim for £300 … That’s what I want to achieve”.


We therefore have what appear to be different commitments from the chair and the Prime Minister. The chair will not commit to reducing household energy bills by £300 per year, but the Prime Minister will. Which one is it? If we already have a difference in opinion, and clearly no joined-up thinking before the Bill has even been passed, how can anyone believe that Great British Energy will follow through on its supposed objectives? It is evident that the only way this will happen is if there is a clear statement of those objectives in the Bill.

I turn to the other amendments in this group. My Amendment 20, and Amendment 37, tabled by the noble Lord, Lord Vaux of Harrowden, seek to ensure that there are clearer reporting requirements in the Bill. Currently, there are no requirements to submit reports other than the usual ones under the Companies Act 2006. Many noble Lords have argued that this is not acceptable. The reporting requirements in these two amendments are not overly onerous for GBE to comply with, yet the net benefit would be significant.

I have also tabled Amendment 41, which seeks to ensure that Great British Energy is given a specific direction to achieve a 10% minimum return on its investments annually. Like with the rest of the Bill, there has been absolutely no indication of the expectations that will be placed on GBE. Without this, how can anyone be certain that the taxpayer will see value for money from this investment? If £8.3 billion from the public purse is going to be funnelled into a state-operated investment company, I am certain that taxpayers would like some guarantee that it will pay off—or at least some measure of target return.

This brings me to Amendment 49. Given the permissive extent of the borrowing provisions in the Bill, it is pertinent to allow the Secretary of State to implement a restriction on borrowing. The amendment does this via affirmative statutory instrument, allowing the Secretary of State flexibility, while placing greater safeguards on the amount to be spent via Great British Energy.

In the same vein, we also need to ensure that there are adequate safeguards for the financial assistance that the Secretary of State can provide. Amendment 56 does this by preventing Clause 4 coming into force until the Secretary of State has established the conditions under which financial assistance may be provided. Once again, we need clarity around this issue. We need to know when, how and why the Secretary of State would give financial assistance, under what circumstances and with what conditions attached; otherwise, there is a distinct possibility of the Bill becoming a blank cheque to Great British Energy for unlimited sums of public money.

Finally, Amendment 57, in my name and that of my noble friend Lord Effingham, requires the publication of a revised financial framework document. I said in Committee that I did not feel it possible to move forward with the creation of Great British Energy until the Government were more forthcoming on this matter. Regrettably, this elusive information is still being withheld. We need sight of the framework document. Once again, I strongly urge the Government to produce this and allow noble Lords to examine its contents.

[The Minister of State, Department for Energy Security and Net Zero (Lord Hunt of Kings Heath) (Lab)]

My Lords, I am grateful to all noble Lords who have taken part in this interesting debate. Of course, we have returned to some of the arguments that we had in Committee. I understand that noble Lords would like to have more information about the activities of Great British Energy, but we have chosen to bring a Bill that, essentially, sets up the basics of establishing a company. Much of the detail that noble Lords have discussed will come through the statement of strategic priorities, which we will debate later.

We do not think it right that we can publish our own statement, or a draft, without the full active participation of Great British Energy, and we are not really going to move from that position. Given that the statement of strategic priorities is to come and that we will hold Great British Energy to account for its performance, as would be expected with any normal public body for which the Government are ultimately responsible, we are resistant to putting what we believe to be unnecessary detail in the Bill, restricting what the company can do in carrying out its activities, especially as these evolve over the longer term.

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[Lord Fuller (Con)]

My Lords, I shall speak very briefly in support of the noble Baroness, Lady Young of Old Scone, in her Amendment 13. It is said that when you are in a hole, stop digging—especially when it is a bloody great big one. It seems to me that it was the noble Lord, Lord Krebs, who dug himself into the mire by talking about CCC accounting principles, just delegating it to the regulators, so it is all right then, greenwashing away the IMO shipping carbon costs. He undermined his case, and it demonstrates how biomass burners such as Drax use smoke and mirrors to obfuscate. If the noble Baroness had tested the opinion of the House, she might have had much more support than she might have imagined. It is time to stop the classification of biomass as clean energy and I welcome her intervention.

[Lord Offord of Garvel (Con)]

My Lords, I will briefly include a consideration of the second group of amendments, talking about the definition of clean energy, and I express my gratitude to my noble friend Lord Trenchard. These amendments address a matter that many in this House have questioned during our debate: Great British Energy’s role and involvement in the production of nuclear. There is no doubt that nuclear energy in some shape or form will have a critical role to play in achieving the Government’s net zero targets. If the Government, via GB Energy, are to recognise the importance of nuclear, it is only right that they consult Great British Nuclear before investing in nuclear technology. That is where Amendment 36, proposed by my noble friend Lord Trenchard, becomes so crucial.

I also support Amendment 10, also proposed by my noble friend Lord Trenchard. This explicitly includes nuclear energy in the definition of clean energy. We know that it offers a reliable, low-carbon source of energy. In addition, Amendment 7, tabled in my name, includes

“the production of nuclear energy”

as part of GBE’s objectives, which complements Amendment 10 and further solidifies nuclear energy’s central role in being part of our long-term solution for energy security and decarbonisation.

Finally, turning to Amendments 2, 3, 4, 5, 6 and 11, proposed by the noble Baroness, Lady Liddell of Coatdyke, which would expand the definition of clean energy, we support the intention behind them to ensure that we remain inclusive of all potential technologies.

To conclude, I urge the Minister to consider the amendments in my name and those of my noble friend Lord Trenchard carefully, as they would help to ensure a clean, secure, sustainable energy future for the UK.

[Lord in Waiting/Government Whip (Lord Cryer) (Lab)]

My Lords, I shall speak not so briefly, actually, on this group of amendments concerning the scope of clean energy as defined in the Bill, particularly in relation of carbon capture, usage and storage, hydrogen, nuclear power, biomass and renewable liquid fuels.

Taken together, these amendments seek to broaden the definition of clean energy within the Bill to explicitly include CCUS, blue hydrogen and nuclear energy, while others aim to restrict biomass or impose additional reporting requirements on GBE. While the Government recognise the significance of these technologies and lauds them in achieving net zero, we must resist these amendments, for reasons I will now set out.

I turn first to Amendments 2, 3, 4, 5, 6, 11 and 12, tabled by my noble friend Lady Liddell of Coatdyke. These amendments aim to ensure that CCUS and CCUS-enabled blue hydrogen are explicitly covered under Clause 3. The Government recognise that hydrogen and CCUS are vital in our transition to net zero, contributing to decarbonisation and energy security while supporting jobs in key industrial regions.

Analysis by DESNZ—a great acronym—and the Climate Change Committee confirms that CCUS-enabled blue hydrogen will be crucial for scaling up hydrogen production into the 2030s, which was referred to extensively at Second Reading, in Committee and today. On hydrogen, Ministers remain committed to delivering on our current trajectory, which includes offering contracts to the 11 successful electrolytic hydrogen projects through the first hydrogen allocation round and delivering future allocation rounds, as well as providing support for blue hydrogen production through the CCUS programme, with the £21.7 billion recent funding paving the way for the first large-scale blue hydrogen production plant.

Clause 3(2)(b) already enables GBE to facilitate, encourage or participate in projects, such as CCUS and CCUS-enabled hydrogen, that would contribute to the reduction of greenhouse gases from energy produced from fossil fuels. Therefore, these technologies fall within the scope of GBE’s objectives. We have made it clear—in the founding statement, in the Explanatory Notes and during multiple stages of the Bill’s passage—that emerging technologies such as CCUS or hydrogen could be part of GBE’s energy portfolio once it is operational. However, while GBE will be able to invest in these technologies, as we have emphasised on many occasions, it will be an operationally independent company. The exact mix of technologies in which it chooses to invest will therefore be determined in due course and be influenced by available opportunities, now and in future. I hope that the noble Baroness, Lady Liddell, recognises that these arguments are not required and will therefore withdraw her amendment.

I now turn to Amendments 7, 10 and 36, which were spoken to by the noble Lord, Lord Offord, the noble Baroness, Lady Bloomfield, and the noble Viscount, Lord Hanworth, the latter speaking on Amendments 10 and 36 on behalf of the noble Viscount, Lord Trenchard. Amendment 7 in the name of the noble Lord, Lord Offord, seeks to add

“the production of nuclear energy”

as an objective in Clause 3. Amendments 10 and 36 in the name of the noble Viscount, Lord Trenchard, seek to expand the definition of “clean energy” used in Clause 3(2)(a) to ensure that it includes both renewable energy and nuclear energy and would require GBE to consult GBN before it invests in nuclear energy.

We must resist these amendments for two key reasons. First, it is already possible for GBE to invest in nuclear energy. Nuclear energy is already defined as clean energy under Clause 3; as such, its production, distribution, storage and supply are activities that GBE could undertake under Clause 3(2)(a). Secondly, I assure noble Lords that GBE would engage with Great British Nuclear ahead of any such investment in nuclear energy. I do not think that we need to include such a requirement for the Secretary of State to direct GBE to engage with GBN ahead of any investment in nuclear energy given both this context and the fact that the Secretary of State is the sole shareholder in both companies.

This Government view nuclear power as one of the reliable, secure, low-carbon sources of home-produced electricity. It will play an important role in helping to achieve energy security and clean power while securing thousands of good, skilled jobs as well as a range of power and energy supplies. The Government are taking significant steps to advance nuclear energy. GBN is leading the selection of small modular reactor technology. Incidentally, a record £410 million has been allocated for fusion research and development, supporting cutting-edge facilities and research.

I wish to add something regarding the comments from the noble Baroness, Lady Bloomfield. Considering the importance of the remits of the two entities, GBN and GBE, they will remain independent sister companies for the time being to ensure that both organisations are best placed to deliver on the Government’s ambitions for energy security and variety of supply. We are maintaining a nuclear focus board for GBN, with highly specialised and experienced personnel; again, this has been debated over a long period. The two organisations will work together effectively to ensure that the UK is on the path to achieving energy security and clean power while securing thousands of skilled jobs.

I hope that the noble Lord, Lord Offord, recognises that this Government are taking active steps to support the continued growth of the nuclear sector; that he is reassured that the Bill allows for GBE to support nuclear energy within the definition of clean energy; and that he will agree not to press his amendment. 

I now turn to Amendments 13 and 44 in the name of the noble Baroness, Lady Boycott; my noble friend Lord Berkeley and the noble Baroness, Lady Young, also spoke to them. Amendment 13 seeks to exclude biomass from the Bill’s definition of clean energy. Amendment 44 would require GBE to produce a plan for its use of biomass power generation and assess the impact of it on both sustainability and its compliance with targets and obligations.

I must resist these amendments for the following reasons. The Government recognise biomass as vital to the UK electricity grid. The Intergovernmental Panel on Climate Change and the UK’s Climate Change Committee—the CCC, which engages with Governments of all hues—highlight its role in decarbonisation if strict sustainability policies are in place. Biomass sourced under strict sustainability criteria is considered a low-carbon energy source; the noble Lord, Lord Hamilton, also spoke about this.

The Government support only sustainable biomass, and generators such as Drax receive subsidies only for biomass that meets the UK sustainability criteria. A CfD has recently been agreed with Drax for short-term support from 2027 to 2031 to provide crucial low-carbon, dispatchable power for UK energy security. With our having introduced tough new sustainability measures with clear and enforceable standards, Drax will need to use 100% sustainably-sourced biomass—up from the current figure of 70%—and no more money will be paid for non-compliant biomass. There will be substantial penalties for any failure to meet these strict criteria, protecting both consumers and the environment.

The comments from the noble Lord, Lord Krebs, were interesting, to say the least. He set out that the figures are more complex than the headline figures might appear. I would add that the UK’s sustainability criteria limit supply chain emissions and include environmental protections. Where biomass comes from forests, land criteria ensure sustainable harvesting and productivity. Large-scale biomass generators can convert to bioenergy with carbon capture and storage—BECCS—which the Climate Change Committee and the International Energy Agency recognise as key to net zero, delivering negative emissions alongside low-carbon electricity. Of course, Drax’s activities are accountable to Ofgem.

Amendments 13 and 44 would unnecessarily constrain the company, despite the role of biomass in balancing an energy system with increasing renewables. GBE will operate independently, with its investment choices guided by strategic priorities and opportunities available at the time. Parliament will scrutinise its activities—we have just discussed this at great length, particularly with regard to Clause 5—through annual reports and standard accountability processes.

The Government have tabled an amendment requiring GBE to review its impact on sustainable development. This will ensure compliance with environmental regulations while supporting nature and biodiversity. The framework document will mandate annual reporting on sustainable development, embedding it into the company’s strategy and operations. Given these reasons, I hope that the noble Baroness, Lady Boycott, can see a way not to press her amendments.

Amendment 35 in the name of my noble friend Lord Berkeley seeks to direct GBE to assess energy-related issues for off-gas grid households and to report on the role of renewable liquid heating fuels. I must resist this amendment for the following reasons. While the Government recognise the challenges faced by off-gas grid households, GBE will have the autonomy to determine its investment priorities. The Government already have measures in place to support those households. For example, the boiler upgrade scheme is receiving an extra £30 million for this financial year, as well as a near-doubling of its budget to £295 million in the next financial year, so that families can benefit from £7,500 off the cost of a heat pump. Evidence shows that 42% of grants under this scheme have gone to properties off the gas grid; that figure is not bad.

As my noble friend Lord Berkeley discussed with my noble friend the Minister, although renewable liquid fuels may play a limited role in decarbonisation, their affordability and supply constraints make them unsuitable for large-scale deployment. We are committed to engaging with industry on the challenges and solutions for decarbonising heat in rural homes, and we will take a considered and proportionate approach. I therefore hope that, with my response and the meetings that my two noble friends have had, my noble friend Lord Berkeley will be able to see a way not to press his amendment.

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[Lord Howell of Guildford (Con)]

My Lords, I have glad tidings for the noble Baroness, Lady Boycott, regarding her concerns. There are between 23 million and 27 million homes in this country still using gas for heating, cooking and warmth. Clearly, that has to be tackled. The answer is quite simple, but complicated as well. The answer is that modern electric boilers can replace all those gas boilers, without having to dig and provide new hydrogen pipes and all sorts of other such complications.

The snag is that electricity is so hopelessly expensive. That is the deterrent. Here we are, wishing to transform millions of homes away from gas, and the pipes then will all become redundant. We can put in modern electric boilers, which can do the job just as well, but the cost goes up rapidly. If only we could focus on how to reduce the cost of electricity by building rapidly—which we are not doing—the cheaper, smaller modular reactors and cheaper devices for producing electricity, and even using more hydrogen on the electricity side; that is another story that we have not really discussed. Even on that basis, we are facing the problem that electricity is very expensive. As long as we keep it that way, as long as we play that game in relation to the overall energy cost, we are shooting ourselves busily in both feet.

[Lord Offord of Garvel (Con)]

My Lords, the topic of community energy was raised several times in Committee by noble Lords on all sides of the House, because it is a highly important aspect of energy provision. When in government, we introduced the community energy fund, which provided funding to specifically target the community energy sector. So, I would concur with noble Lords that it is very important that communities are involved, as they are able to raise and solve issues that are unique to their local community.

[Lord Hunt of Kings Heath (Lab)]

My Lords, I will first say that I am grateful to noble Lords for their support for my Amendment 8. I echo what the noble Baroness, Lady Bennett, said about the success of campaigning. She might have recognised the Government’s role in this, but she did not quite get that over the line. But there is always hope.

On the point made by the noble Lord, Lord Hamilton, about community benefits, I agree with the principle; we are looking at community benefit schemes. I have told noble Lords before about my visit to Biggleswade wind farm, where the company involved is giving around £40,000 a year to the local community. Certainly, we need to look at schemes like that and see what we can do to extend them.

As regards nuclear and that interesting discussion, the noble Lord, Lord Wigley, made it very clear that the existing sites contained in the last statement will always be recognised for what they offer. We are not seeking to undermine their potential; we are simply saying that we need a more flexible siting policy in the future.

The noble Lord did not mention Wylfa, so I will. Of course, he will know that Wylfa was identified as one of the sites in the last statement. Clearly, it still offers many potential opportunities. There was a great deal of interest earlier this week in the planning inspector’s report, which purportedly came out against the development of Wylfa. I, for one, think that it offers great potential.

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[Earl Russell (LD)]

My Lords, I rise from these Benches to speak against Amendment 15 in the name of the noble Lord, Lord Petitgas. His amendment seeks to add a limit on the maximum amount of money that the Secretary of State can provide to GBE—anything above and beyond the £8.3 billion that the Government have committed to. We strongly oppose this amendment. The noble Lord talked about resolve, strength and all these things, but I do not agree with any of that. It is not for the Opposition to use an amendment to legislation to determine what funds a Government can spend on something in the future, when we do not know what is going to happen.

Just this week we have talked about the Drax situation; the Government have halved the subsidies to Drax. The money that the Government are saving from having to subsidise Drax is money that could well go to GB Energy—for example, to fund the long-duration energy storage that we desperately need, so that we can do the transition and keep the lights on. The money should be used for other renewables projects.

It is for the Government to make day-to-day spending decisions and they are accountable for the decisions they make, as GB Energy is accountable to the Treasury and the public for how it spends its money. Ultimately, the Government themselves are responsible to the public, but I do not think it is for the Opposition to put a cap on what Governments can spend. Core spending is a decision for the Government, so this would be a highly unusual amendment and, if it is put to a vote, we will oppose it.

[Lord Offord of Garvel (Con)]

My Lords, I support the amendments in the name of my noble friend Lord Petitgas. In tabling his amendments, my noble friend looks to protect the taxpayer while securing the financial integrity of GB Energy, establishing that GB Energy’s attempt to ramp up renewables must not come at the cost of fiscal responsibility and £8.3 billion. The drafting of Clause 4 is far too ambiguous. We must introduce sufficient safeguards by limiting the scope that the financial powers in the Bill afford the Secretary of State. The taxpayer is coughing up a significant £8.3 billion into an investment vehicle that, as my noble friend Lord Petitgas said, has the potential to completely de-risk the profits of multi-million pound energy companies. Meanwhile, the Government have cancelled winter fuel payments, introduced an NI jobs tax and launched a raid on British farmers, all to save money.

The reality is that £8.3 billion is actually a very tricky number. On the one hand, it is a lot of money, a big, significant investment into energy. On the other hand, in the scheme of energy investment required, it is a relatively inconsequential figure, especially when we talk about wind farms being built out to the potential tune of £100 billion. Either way, whether we consider that to be a big or a small number, the taxpayer deserves to know that the Government are deploying public funds appropriately. The Bill contains no limitation on how much financial assistance GB Energy will receive, there is no cap on the money that can be pumped into GB Energy and nor does the funding have to undergo any approval. What is to stop GB Energy becoming a bottomless pit?

Clause 4 states:

“The Secretary of State may provide financial assistance to Great British Energy”.


But, again, we are lacking in detail on ways to hold the Secretary of State and GB Energy accountable. We have seen no method to restrict the amount of financial assistance the Secretary of State may provide, nor do we understand how the success of each investment will be measured, or indeed reported on. I trust that the Minister will take these amendments seriously. Our transition to net zero must be done with an eye to fiscal responsibility, ensuring that the energy transition is both sustainable and affordable.

[Lord Hunt of Kings Heath (Lab)]

My Lords, I am grateful to the noble Lord, Lord Petitgas, for returning to a theme he developed in Committee. I assure the noble Lord, Lord Offord, that I take the amendments seriously. But, like the noble Earl, Lord Russell, I do not believe that they are appropriate, because I do not think it right to constrain the arrangements we set out in the Bill in this way. Nor do I think it appropriate for Parliament to take to itself the kinds of controls that the noble Lord is suggesting.

Let me make it clear, first, that in terms of the sum, we are committed to capitalising Great British Energy with £8.3 billion over this Parliament, but we have the flexibility in the future for a current or future Secretary of State to provide further financial support if it were required in this or a future Parliament. There must be flexibility here: one cannot set in stone a figure for all time. We must allow GBE to develop and grow, and we have to learn by experience.

However, the idea that the money being spent by GBE will not be subject to thorough tests and reviews is simply not true. As we have already said, any financial assistance to GBE provided by the Secretary of State will have to be subject to the usual governance and control principles applicable to public sector bodies, such as His Majesty’s Treasury’s Managing Public Money principles. GBE will be allocated funding through the spending review and will draw down on it when required in the normal way, through the supply estimates process, which is scrutinised, of course, by the other place. As is the case with any government spending, the Secretary of State will be able to finance planned activities only if Parliament votes the necessary financial provision.

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[Lord Teverson (LD)]

My Lords, very briefly, I was pleased to add my name to this amendment and, like others, I commend the noble Lord, Lord Alton of Liverpool, for his long-time work on this crucial area. On supply chains, those companies involved in fitting solar or anything else in this area should really be concerned about their supply chain in terms of scope 3 emissions, where they have to track their supply chain backwards, so I would hope that was also a method to check means of manufacture as well. I am also very sympathetic to the amendment from the noble Baroness, Lady Bennett.

[Lord Offord of Garvel (Con)]

My Lords, Amendment 18 is a simple yet essential safeguard that ensures that public funds will not support companies tainted by modern slavery in their energy supply chains. The UK has long stood against forced labour and exploitation. If we are serious about a just and ethical transition to clean energy, we must ensure that Great British Energy, a publicly backed entity, operates to the highest moral and legal standards. There is a clear precedent for this approach. The UK’s Modern Slavery Act 2015 requires companies to take responsibility for their supply chains, yet we know that modern slavery remains a serious issue in the global energy sector, particularly in the sourcing of solar panels, batteries and raw materials such as lithium and cobalt.

This amendment does not create unnecessary bureaucracy or hinder investment; it simply ensures that taxpayers’ money does not fund exploitation. If there is credible evidence of modern slavery in the supply chain, public funding must not flow to that company. It is a basic ethical standard. It is also a matter of economic resilience, because reliance on unethical supply chains creates risk for businesses, investors and the public. Therefore, supporting this amendment strengthens the integrity of Great British Energy. aligns our economic ambition with our moral obligations and sends a clear message that Britain’s clean energy future must be built on ethical foundations. I urge all noble Lords to support this amendment.

[Lord Hunt of Kings Heath (Lab)]

My Lords, I am grateful to all noble Lords who spoke in this important debate, and particularly, of course, the noble Lord, Lord Alton. He and I have worked together on a number of these issues, particularly in relation to enforced organ donation in Xinjiang province, and I have always been tremendously grateful for the advice and support he has given.

On this debate in general, I agree with the noble Earl, Lord Russell, that behind it lies more fundamental changes that we need to see, including his point about the development, where we can, of a UK supply chain. He said that he is going to support the noble Lord, Lord Alton; I understand and accept that.

Let me say at once that the Government wholeheartedly agree on the importance of confronting human rights abuses, including modern slavery, in energy supply chains, and we are committed to tackling the issue. I am glad that the meeting with Jürgen Maier was helpful; he is providing some strong leadership in this area. I have had also had discussions with the noble Lord, Lord Alton, between Committee and Report, but we have not quite found a way through as yet.

My understanding is that Great British Energy will already have a range of tools in place to support its efforts to identify and tackle human rights abuses in its supply chain. Indeed, as a state-owned company, it will be expected not only to abide by but to be a first-in-class example of adherence to the UK’s existing legislation and guidance. We support voluntary due diligence approaches taken by UK businesses to respect human rights across their operations and supplier relationships, in line with the UN’s Guiding Principles on Business and Human Rights and the OECD guidelines for multinational enterprises.

The noble Lord, Lord Offord, referred to legislation passed by his Government, which I readily acknowledge. Under Section 54 of the Modern Slavery Act 2015, Great British Energy will be required to prepare a slavery and human trafficking statement for the financial year, in relation to its turnover of £36 million or more, outlining the steps it has taken in the financial year to ensure that slavery and human trafficking is not taking place in any of its supply chains nor any part of its business. Once the Procurement Act 2023 comes into force—on which the noble Lord, Lord Alton, and I shared a common endeavour—it can reject bids and terminate contracts with suppliers which are known to use forced labour themselves or anywhere in their supply chain.

We will also use the modern slavery assessment tool known as MSAT to assess the supply base for modern slavery risks. With these tools, I am assured and am confident that Great British Energy will not ignore credible evidence of modern slavery and human rights abuses. I believe that its exemplary adherence to this legislation, which the Government rightfully expect, will not only ensure that the company is doing all in its power to combat modern slavery but also pull up the standards expected of the UK’s wider energy industry under the existing legislative landscape. I think the chair of GBE has reinforced that point.

It is our belief that any action that has to be taken must not only be robust but—to take the point of the noble Earl, Lord Russell—take a whole-of-government and society approach. We expect UK businesses, including GBE, to do everything in their power to remove any instances of forced labour from their supply chain. Our guidance and international principles encourage business to remediate or mitigate when instances are uncovered, such as industry collaboration or improved internal purchasing practices. Amendments 18 and 19 would not allow GBE the opportunity for mediation; they would only penalise it.

There is a practical question around how these amendments might work in practice and what their impacts on GBE and its operations would be. They do not define what is meant by “credible evidence”, and this could be left open to interpretation. I am not trying to be pedantic here because, clearly, the noble Lord, Lord Alton, suggested in his opening remarks that he wanted to give the Commons the opportunity to debate this matter. I agree that we should not be too pedantic about the wording of the amendment, but I wanted to mention that as one of the practical consequences of enacting the amendments as they are currently drafted.

Combating human rights abuses, such as modern slavery, across the whole energy industry is a much more effective way to make progress than applying measures on a company-by-company basis, as these amendments would do. We recognise that the landscape has changed since the Modern Slavery Act was introduced; that is why we are committed to improving our response to modern slavery and will set out next steps more broadly in due course.

I should inform the House that we are partnering with an expert institution to provide detailed and relevant information on what modern slavery statements should cover, including practical advice for businesses to go beyond compliance with their legal requirements and actively identify and remedy instances of modern slavery in their supply chains. GBE will follow that, of course.

The noble Lord, Lord Alton, expressed some scepticism about the Solar Taskforce. Having been relaunched by my department, it will focus on identifying and taking forward the actions needed to develop resilient, sustainable and innovative supply chains that are free from forced labour. The aim is to support the significant increases needed in the deployment of solar panels to meet our ambition of seeing a large increase by 2030.

More widely, the Government are taking action to ensure that our clean energy supply chains are resilient as a key priority in the transition to net zero, in both de-risking the delivery of our carbon budgets and maximising the economic benefits from the transition. This will involve domestic action, such as investment in manufacturing, and international action, such as removing trade barriers and collaborating with our allies.

With respect to the speech from the noble Lord, Lord Alton, I know that the House wants to see action from the Government. I can assure noble Lords that my department is working collaboratively across Whitehall on this important issue, including with the Department for Business and Trade and the Home Office, to assess and monitor the effectiveness of the UK’s existing measures, alongside the impacts of new policy tools that are emerging to tackle forced labour in global supply chains, including in the energy sector. We are not ignoring the points made by the noble Lord. We take this seriously and, as I said, we are strongly looking at this across Whitehall at the moment.

I turn to the amendment in the name of the noble Baroness, Lady Bennett, to which she spoke so eloquently. Let me be clear: the UK’s existing sustainability criteria put limits on the greenhouse gas emissions of the supply chain and already include environmental protections. Where biomass is sourced from forests, the land criteria include requirements around sustainable harvesting and maintaining productivity. This ensures that forests are managed well and in a sustainable manner, as carbon dioxide emissions released during combustion are absorbed continuously by new forest growth. The statement that we made on Monday in relation to biomass reflects how the Government are moving. They might not be moving as fast as the noble Baroness wants, but we are, I think, moving in the direction that she wishes to see.

I remind the noble Baroness, Lady Bennett, that, as a public body, Great British Energy already has a duty to conserve and enhance biodiversity. The noble Earl, Lord Russell, was right to remind me of my own Amendment 38, which we will come on to at some point this evening. I do not want to repeat what I am going to say later, but it is a very important amendment and I hope it will provide considerable reassurance to the House.