Great British Energy Bill

Lord Offord of Garvel Excerpts

2nd reading
Monday 18th November 2024 Lords Chamber

[Lord Offord of Garvel (Con)]

My Lords, I begin by welcoming the noble Baroness, Lady Beckett, and the noble Lord, Lord Mackinlay of Richborough, to this House and congratulate them on two magnificent maiden speeches.

We are debating a Bill that grants the Secretary of State sweeping powers to establish Great British Energy, a publicly owned energy company, with an £8.3 billion allocation of taxpayers’ money. With the Government unilaterally accelerating the target for zero-carbon electricity to 2030, it is obvious that the Bill is ideologically fuelled, with energy analysts such as LCP Delta stating that there is “zero chance” that the Government will meet that 2030 goal.

The substance of the Bill is equally concerning. Despite its far-reaching aims, the Bill is notably lacking in detail, as my noble friend Lord Lilley pointed out. There is no clear business plan, no accountability framework and no specific road map for how the Government intend to deliver on these unrealistic promises. In short, the Bill seems more about political grandstanding at COP 29 than about practical solutions.

During the last election, the Government made countless promises to working people that this Bill would reduce their energy costs. Yet, what we see today is a Bill that is short on details and long on empty promises. When the Government had the chance to enshrine this pledge in law, they voted in the other place against a Conservative amendment that would have made the £300 reduction a legal priority for GBE. Why, then, have the Government refused to commit to the very promise they made to the British public? I join my noble friend Lady Bloomfield in asking the Minister to give guidance on how much energy bills are expected to fall by 2030: maybe not by £300, but can we please have at least an indication of how that will be fulfilled?

Labour’s plan to create 650,000 green jobs across the country by 2030 as part of the green prosperity plan also need to be substantiated. Again, there is no mention of this in the Explanatory Notes or the founding statement. While they made this bold claim again in their manifesto, they have failed to provide any concrete details on how this would be achieved, leaving many workers concerned about their future. There is a genuine fear that without proper planning and support, individuals could find themselves jobless or unable to transition their skills to new industries.

While this Government claim to be the party for working people, they have failed to anticipate where the jobs for these working people will come from in the Great British Energy Bill. As mentioned by my noble friend Lady Bloomfield, 200,000 jobs already exist in the North Sea oil and gas sector. We know that 40,000 of those are at risk under the current plans, so again, my question to the Minister is quite simple: what is the plan to deliver on these pledges on jobs, when jobs are already being lost in the existing oil and gas sector?

The Government’s 2030 target to decarbonise the UK electricity grid sounds bold but in reality, the National Energy System Operator has called it immensely challenging. Is not this clean energy target really about infrastructure? NESO’s latest report lays bare the scale of the hurdles we face. To come even close to hitting this target, we need to invest £40 billion a year, every year, to fund grid upgrades, renewable generation and storage capacity. When you start looking at the facts, you see that this should not be reduced to a political slogan. It is a monumental challenge that requires far more than the details outlined in the Great British Energy Bill.

We are told by energy players that, in order to meet this 2030 target, we need to overhaul the national grid. Again, I ask the Minister: where is the national grid even mentioned in this Bill? If the Government are truly serious about addressing the energy crisis, why is the grid, the very backbone of our energy system, not even part of the conversation? Where are the clear policies on expanding grid infrastructure? Where is the commitment to solving the grid bottleneck that hampers renewable energy connection at the moment? Why are we talking about targets without addressing the structural issues that will make or break any decarbonisation effort?

I must agree with the noble Lord, Lord Rooker, who said last week in our energy debate that:

“The UK is world class in setting targets”,—[Official Report, 14/11/24; col. 1954.]


but less so at delivering actions. How can we decarbonise when the grid cannot even handle today’s demand, let alone the future of renewable energy? If we are serious about the 2030 target, then surely the grid must be at the heart of this Bill, not an afterthought.

Let us consider the Bill’s relationship with the UK Infrastructure Bank, which was highlighted by a number of noble Lords, particularly the noble Lord, Lord Vaux. The bank was launched with a £22 billion fund and comes and with a clear and structured accountability and transparency framework. It is governed by rules that ensure that taxpayers’ money is used efficiently, and it is subject to rigorous annual reporting, providing the public with the necessary details on its performance and investments. If we are to create another institution with overlapping responsibilities, it is fair to ask: where is the real added value here?

In fact, Great British Energy hands over far greater powers to the Secretary of State. As highlighted by my noble friend Lady Noakes, £8.3 billion of taxpayers’ money will be handed over with too much discretion and without the proper frameworks to hold this body to account. How can we trust that the British taxpayer will get value for money if we are not putting in place on day one the necessary safeguards and reporting structures to ensure transparency and proper governance?

We have had the benefit of two such debates before today’s Second Reading, and in this time a number of themes have been discussed in your Lordships’ House. As my noble friend Lord Ashcombe pointed out, there is a consensus that at the moment, our energy system is run approximately 75% hydrocarbon and 25% non-hydrocarbon. We need to flip that on its head and make it 75% non-hydrocarbon, 25% hydrocarbon, but that does not mean zero hydrocarbon, and it does mean that we need more room for nuclear power.

In fact, in the debate last week, the noble Lord, Lord Browne of Madingley, said that we have a real good chance in the UK to meet these targets because of our pre-eminent position in science and technology. Therefore, when we hear the warnings of the industry that we are going too fast and the sudden acceleration is simply unachievable, I think there is a red warning flag that must be heeded.

We understand that, if it is £300 per household and there are almost 28 million households, that comes to £8 billion and we know that renewables cannot deliver at a return of £8 billion on top of £8 billion in five years, because renewables returns come over 20 years and not five years. So why are unreasonable numbers being put out into the public domain? Is it actually a good use of taxpayers’ money to put £8 billion into renewables? For example, there is a target of 100 offshore wind farms, with £35 billion committed and another £60 billion in the pipeline. Rather than being crowded in, the private sector has already decided this is a good area to invest in. Would the money not be better targeted, as was said, at the plumbing and the national grid? As we said last week, it was designed to send energy from Scunthorpe to Stornoway and is now sending energy from Stornoway to Scunthorpe.

These questions have been raised by a number of noble Lords across the House. We also have the issue of the North Sea oil and gas being shut down too quickly. There will be a real knock-on effect on our net zero by 2050 target. At the moment, more than half the renewable investment comes from hydrocarbon companies reinvesting their profits, and the skills of the people required to do the transition exist in the oil and gas sector.

Having had these two debates and the Second Reading, we have given this Bill a really good airing, and there are some warnings for the Government in accelerating this. We cannot be in a situation where the Government put forward bold targets and empty promises: we must have details. It is not reasonable to take on trust that £8 billion of taxpayers’ money will be well spent; we need some transparency and accountability in the Bill to ensure the funds are used effectively.

In conclusion, we have heard grand pledges on lower energy bills, but I think it is only fair that the Government back them up with some concrete actions, or at least some commitments. Again, with the promise of green jobs, we have yet to see any plans as to how those jobs are going to be protected. There are already workers facing job insecurity in the transition towards a low-carbon economy. As we have discussed, despite all the talk of decarbonisation, we still have not addressed the major issue of infrastructure.

So I ask, in conclusion, how can we trust the Government’s ambitions when the foundations for success are not set out more clearly in the Bill? Where is the plan for infrastructure? Where is the commitment to accountability? Where are the protections for the British taxpayer? And, most important of all, how will Great British Energy result in cheaper energy for UK consumers?