Great British Energy Bill

Debate between Lord Petitgas and Lord Hunt of Kings Heath

Committee stage
Monday 13th January 2025 Lords Chamber

[Lord Hunt of Kings Heath (Lab)]

The noble Lord raises matters of great geopolitical importance and importance to the UK’s economy. He will have seen that my right honourable friend the Chancellor has been in China in the last few days, seeking to engage that country in relation to economic co-operation and development, within appropriate security safeguards. We want to see jobs in the energy sector developed as much as possible in the United Kingdom, but equally, we are operating in a global economy. For very good reasons, we are concerned about the introduction of tariffs which may inhibit international trade, and we must also be mindful of the economic value-for-money issues that clearly have to come into play in this area.

Let me return to the Bill and what is appropriate for us to include in it. We believe that this issue is a matter for GBE, working within the constraints set through the statement of priorities and through Clause 3, and also in relation to the further work we are going to do. We have mentioned solar, and noble Lords are right that much of the raw material for solar panels comes from China, although it is British companies working in the United Kingdom that benefit more from the value of the work on solar installations.

Turning to the amendment of the noble Lord, Lord Petitgas, as a publicly owned company, GBE will be held accountable through regular reporting to my department. It will be subject to HM Treasury’s value-for-money guidelines, its investments will be subject to safeguards and risk assessments, and it will invest in the private sector to share risk and reward.

On green taxonomy, a decision about how a potential UK green taxonomy could be used or applied has not yet been finalised. The Government have launched a consultation to gather views on the value of the case for a UK green taxonomy, and it will close on 6 February.

We need to come back to what Clause 6 is for as a whole. It is a backstop which one hopes would never have to be used; it is not a way to encourage the Secretary of State to micromanage a company that we very much want to be operationally independent.

[Lord Petitgas (Con)]

I want to go back to the point about the company acting independently. There is little bit of confusion about this company being an energy company, as opposed to an investment company. There will be myriad small investments. If it acts independently, which is fine, it needs an investment committee, and I have not read anywhere that there will be one. The chairman-elect is Jürgen Maier. He may know the sector but he is not an investor. So, effectively, taxpayers will be limited partners in an investment company without an investment committee and with a chair who is not an investor, so it is not unreasonable to ask for information about rates of return and to understand exactly how it will be done. If the answer is, “Don’t worry, it’s an independent company but value for money will be done by the Treasury with DESNZ”, that is a different governance process, but the governance of investment and selection to me remains relatively obscure.

[Lord Hunt of Kings Heath (Lab)]

My Lords, I do not really think I can go any further than the remarks I have made this afternoon. It will ultimately be for GBE’s board to decide how it will arrange its board committees. I have noted what the noble Lord said about an investment committee. I will certainly draw his remarks to the attention of Jürgen Maier, who may not be an investment expert, as the noble Lord suggests, but my goodness me he has a lot of experience in this sector.