Great British Energy Bill

Lord Teverson Excerpts

Committee stage
Monday 13th January 2025 Lords Chamber

[Lord Hamilton of Epsom (Con)]

My Lords, I was speaking to the noble Lord, Lord Mandelson, the other day. This was when he was chasing around after the chancellorship of Oxford University. I said to him that I thought he would serve his country much better in Washington than in Oxford. I congratulate him on becoming our ambassador in Washington. I think he will do a very good job.

I mention the noble Lord, Lord Mandelson, because a quote attributed to him is that, “When politicians try to pick winners, the losers invariably find the politicians”. People should recognise that the track record of politicians in trying to pick winners is absolutely abysmal. Invariably, political considerations and jobs come into it; profitability is the last thing that is ever considered.

Therefore, it is essential that we support these amendments. They are asking for some degree of accountability for Great British Energy, which will have billions of taxpayers’ money. If we are not very careful, it will go to all the projects that have been rejected by the private sector as not being viable and will invariably lose money. That should be of great concern to us all because it discredits government and wastes taxpayers’ money.

[Lord Teverson (LD)]

My Lords, can I make a comment on that? I am a trustee of the green share in the Green Investment Bank, which was privatised by the Tories after it was set up by the coalition Government. It was a very profitable operation, although it was fully publicly owned. The issue was that it was almost too conservative in terms of making money under Treasury rules, so it did not make as much of a difference—it did make a difference—as it should have done. One of the risks is that GB Energy could be too conservative because the Treasury is too close to it and will not let it do the innovation that needs to happen for decarbonisation to take place by 2030.

[Lord Hunt of Kings Heath (Lab)]

My Lords, I want to make just two points. The noble Lord, Lord Teverson, made a very interesting and wise contribution. I say to the noble Lord, Lord Hamilton, that of course I have heard the expression that Governments are not very good at picking winners. That is why we have set up GBE. We will have a company with people with expertise to enable investments to take place within the context we set under Clause 3 and Clause 5 as strategic priorities. None the less, it will have operational independence.

The noble Lord, Lord Teverson, is right; noble Lords in their various amendments are seeking to pin down GBE through excessive reporting requirements. The risk is that GBE, far from being allowed to flourish and develop, will be inhibited and micromanaged. That is why these amendments are wholly inappropriate in relation to Clause 6. The power of direction is not to be used in the way that noble Lords are suggesting; it is a backstop power. What is the point of setting up GBE if we are to undermine its independence in the way these amendments suggest?

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[Lord Teverson (LD)]

My Lords, onshore wind has a remarkably small footprint in terms of its use of the land, which seems to get forgotten. I can see 30 wind turbines from my bedroom window; the nearest is about 1 kilometre away. They are excellent: they show that renewable energy is working. We should have more of them, and I hope that the Government will continue to make it easier for these developments to take place towards our 2030 objective of decarbonised electricity.

[Lord Offord of Garvel (Con)]

My Lords, I speak in support of the amendments in the names of my noble friends Lord Fuller and Lord Roborough—Amendments 67, 73, 104 and 105. In bringing forward these amendments, my noble friends raise the matter of great importance that is the agricultural industry, which has been subject to punitive measures by the Government in the form of the family farms tax raid.

Amendments 67 and 104 prevent Great British Energy from supporting projects on or owning land that is grade 1, 2 or 3 to prevent the loss of good and high-quality agricultural land. Alternatively, Amendments 73 and 105 encourage GBE to pursue developments on land that is designated grade 4 or 5 —essentially, the worst agricultural land. It appears obvious that the Secretary of State, who directs Great British Energy, will support an approach that balances the need for renewable energy with the need to preserve our nation’s food security.

As explained by my noble friend Lord Fuller within his allotted time, the purpose of this group of amendments is to protect the best and most versatile land for food production. I echo the concerns of my noble friend Lord Roborough that some of the largest and most significant solar developments seem to be approved without due consideration given to the quality of the land which is being sacrificed in the process. It is an undeniable fact that grade 2, the best and most versatile agricultural land, is being lost to existing solar developments. That is not merely a matter of farming but of our country’s food security. As my noble friend Lord Fuller so neatly put it, at best Great British Energy may help to turn our lights on and heat our homes, but there will be no food on the British people’s plates.

The question is not whether we should develop renewable energy but where we should develop it. The goal of achieving energy security should not come at the expense of food security. I ask the Minister to give us his full assurance that under no circumstances will the Secretary of State approve developments that undermine our nation’s ability to feed itself.

Recent analysis of land take by ground-mounted solar installations shows a concerning trend: solar developments are disproportionately targeting the best and most versatile land—that is, land classified under grade 1 and 2. Across England, only 17% of land is classified as grade 1, yet 19% of the land used for solar installations falls into this category. This trend violates the general recommendation to avoid productive agricultural land development. In contrast, grade 5 land, the poorest agricultural land, has been disproportionately avoided. That is exactly the type of land that solar projects should be prioritising, yet it remains underutilised. Only 0.5% of solar installations are on grade 5 land, despite such land constituting 8% of England’s agricultural landscape.

The issue is particularly pressing, given the Government’s ambitious target to triple solar power capacity to 50 gigawatts by 2030. As we expand solar energy, more and more land will be acquired. However, unless active measures are taken to ensure that the correct land is used for these installations, we will continue to see the loss of high-quality agricultural land, exacerbating concerns over our nation’s food security. Amendment 73, therefore, is vital: it seeks to ensure that renewable energy development does not come at the cost of our most productive agricultural land.

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[Viscount Trenchard (Con)]

My Lords, I rise to support my noble friend Lord Effingham in his Amendment 85, to which I have added my name. Certainly, there are good reasons to be very cautious in selecting international partners with whom we will co-invest in the energy sector. Chinese state-owned companies are managed under rather different governance systems from those which the London Stock Exchange would consider appropriate for its listed companies. I agree with my noble friend that the Secretary of State should consult the International Trade Committee of another place before considering such co-investment.

Among other amendments in this group, I also support my noble friend Lady Bloomfield of Hinton Waldrist in her Amendment 78, which would ensure that GBE will reinvest all profits into the company. I agree with what she said in her speech, especially as GBE, as a publicly owned company, will not be subject to the disciplines of the marketplace, and its shareholder will be more concerned with achieving policy objectives through GBE than with maximising its return on investments and contributing to long-term growth.

[Lord Teverson (LD)]

My Lords, I will make a few comments on this. I am rather attracted to the amendment from the noble Baroness, Lady Bloomfield—one worries that, if this were a successful organisation, all profits would disappear back into the Treasury, which would be very unfortunate. I think that is an excellent bonus, but I suspect I probably would not put it in as an amendment to the Bill.

In terms of investment committees, I cannot believe that this organisation will not have a proper professional investment committee, which, I hope will probably have some external members as well. But this misses one of the key points—which I also would not put in the Bill, so I have not put down an amendment—which is the discipline with which the great Green Purposes Company, of which I am a trustee, keeps the feet of the Green Investment Group part of Macquarie to the fire. It is around checking and making sure through proper systems that the investments that are made are truly green and add to low carbon, rather than otherwise. There needs to be a check on that side so that the organisation itself also avoids greenwashing, which is one of the big issues that would undermine the reputation of Great British Energy if it should ever happen. Obviously, we hope that it would not, and I am sure the Secretary of State would not want it to, but there needs to be something within the organisation—an external audit would be good—that includes the impact on greenhouse gas emissions and biodiversity as part of its performance.

In terms of foreign companies, again, I would not honestly see this as being part of the legislation, but I would absolutely say that Great British Energy should be involved in joint venture companies with foreign businesses. That is one of the key areas where we should be able to bring intellectual property back into this country and work together with other nations, as well as strong UK companies. Those joint ventures would be extremely important in terms of the performance of this company.

Lastly, why are we discriminating against the UN convention on biodiversity? It is an organisation that is struggling. I am not disagreeing on how many people we should or should not send to it, but why that and not the United Nations climate change committee or the COPs? I do not get that. It would be very negative for that organisation, for which we are struggling to get international consensus to tackle the real and huge biodiversity problems that we have on this planet, if it was mentioned in a Bill of the UK Parliament. That would be absolutely negative for our international reputation.

[The Earl of Effingham (Con)]

That is one example of where, to monitor the cost, we need to keep a tight grip on the number of people we send in delegations. It does not aim at that organisation specifically; it is that plus anything else to which GBE might wish to send delegates.

[Lord Teverson (LD)]

I understand the issue of public expenditure, travel and all that, but the noble Earl specifically names a culprit in his amendment. That is what the Committee looks at and what it tries to get into Bills, so the amendment specifically aims at that organisation rather than the broader canvas.

[Lord Hamilton of Epsom (Con)]

My Lords, I support these amendments. I have certain reservations about my noble friend Lady Bloomfield’s Amendment 78, because it assumes these investments will make money. I have a bit of a problem with that. The real difficulty, as we have discussed, is that all the low-hanging fruit when it comes to investment in renewable energy has already been picked by the private sector. It does this quite simply by calculating a return on guaranteed income. Therefore, what worries me is that Great British Energy will be left picking up the bits that other people do not want to touch. The chances of it making money are probably quite small. Of course, it will have to count off the losses against the profits, so you need to have something at the end of the day. I know that the noble Lord, Lord Teverson, has achieved something little short of miraculous by investing other people’s money and actually making money, but that is an exception rather than the rule. The chances of Great British Energy squandering billions of pounds of taxpayers’ money are rather higher than it making any profits for anybody.

Clearly, accountability is very important when it comes to these sorts of sums. We should do everything we can to ensure that taxpayers’ money is looked after in the best way possible. Everybody should have great reservations about believing—to come back to the point I made earlier—that politicians are able to pick winners. The record on this has been absolutely abysmal. The chances of more money being lost than made are, I am afraid, very great indeed.