Great British Energy Bill

Lord Vaux of Harrowden Excerpts

Committee stage
Monday 13th January 2025 Lords Chamber

[Baroness Noakes (Con)]

My Lords, we now move to some more technical aspects of the Bill, compared to some of the really significant issues we have been debating in recent groups. I am sorry that the Minister dealt with these recent groups in such a perfunctory way. We did not get a response of substance at all to the very significant points that my noble friends have been making, and I think it is right that the Government think again about their attitude to whether or not they are prepared to accept proper legislative scrutiny in your Lordships’ House. I hope that we can move to a more constructive phase going forward.

I shall also speak to two other amendments this group. I have Amendment 92, to which the noble Lord, Lord Vaux of Harrowden, has added his name, and I have added my name to his Amendment 89.

Great British Energy will be a company formed under the Companies Act 2006, an Act imprinted in my memory. At the time, in 2006, it was the longest Act ever produced, and it took many months of my life. Under Section 442 of that Act, private companies are given nine months to file their accounts, while public companies have only six months. I am assuming that Great British Energy will be a private company, as there is no ability for its shares to be offered to the public; it will therefore have nine months to file its accounts, and my Amendment 88 changes that to six months, in line with public companies. GBE will be a substantial company, with upwards of £8 billion flowing through it, and it ought to be subject to the same degree of scrutiny that large public companies have.

Many public sector bodies manage to get their accounts out and laid before Parliament before the beginning of the Summer Recess, which gives them nearly four months, which should be plenty of time. Listed companies generally get their accounts out very much quicker, mainly because it makes no sense whatever to spend a long time in the new financial year looking backwards.

I would not normally have thought that an amendment like this would be necessary, but I was shocked to discover this autumn that the National Wealth Fund’s report and accounts for 2023-24 were not signed off until 21 November 2024. I was even more shocked to find that the previous year was only about four weeks better than that, with the report and accounts being signed off on 23 October 2023. I do not think we should tolerate such a laid-back approach to putting the only regular accountability document relating to Great British Energy into the public domain. If six months is good enough for plcs, it ought to be good enough for GBE and, indeed, any other public sector body.

The Government have been very unresponsive to calls in the various other amendments that we have been considering during this Committee for extra reporting going above and beyond what is included in the annual report and accounts. This underlines the need for a very timely approach to the one accountability document that the Government are prepared to concede will exist for Great British Energy—namely, its annual report and accounts.

My other amendment, Amendment 92, is more of a probing amendment. It would require the Comptroller and Auditor General to be appointed as Great British Energy’s auditor. Allowing the Comptroller and Auditor General to do company accounts was, incidentally, one of the minor achievements of the Companies Act 2006, reflecting the trend at the time for increasing use of limited liability companies to carry out public sector activities more extensively. I hope that the Minister will confirm that the Comptroller and Auditor General will be appointed as Great British Energy’s auditor. He is the auditor to the National Wealth Fund, and I cannot see that there could possibly be a case for not using him.

As I said earlier, I also support Amendment 89 in the name of the noble Lord, Lord Vaux. I will not steal his thunder, but I highlight the importance of proposed new paragraph (d) of his amendment, which would require Great British Energy to report on the extent to which its investments have crowded private sector money in. There will be many other measures of success for Great British Energy, but this is a key one. The Government have been very quiet about exactly how Great British Energy will work with the private sector. It is essential that there will be good public reporting to shed light on this area as Great British Energy moves into its operational phase. I beg to move.

[Lord Vaux of Harrowden (CB)]

My Lords, once again we return to the issue of accountability and transparency. I hope the Minister is starting to hear the trend. In this group we are looking at the annual reporting requirements that apply to Great British Energy, and I hope at least that the Minister will agree this time that Clause 7 is the right place to talk about reporting.

I thank the noble Baroness, Lady Noakes, the noble Lord, Lord Cameron of Dillington, and the noble Viscount, Lord Trenchard, for their support on Amendment 89. First, however, I state my complete support for Amendments 88 and 92, tabled and just introduced by the noble Baroness, Lady Noakes. We are talking about a company that is going to be spending £8.3 billion over the next five years, so it must be right that at least the discipline that applies to public companies should apply to GBE in terms of providing timely information and its audits.

The Minister said earlier that he thinks the Bill includes the appropriate levels of accountability and transparency. I find that quite hard to understand. As the Bill is currently drafted, the only reporting that GBE will be required to provide publicly—or to the Secretary of State—is the annual accounts and reports referred to in Clause 7, which need to comply only with Section 441 of the Companies Act 2006, as we have just heard.

The contents of such accounts are quite limited, and they do not have to include much information that will allow Parliament—or other parties—to scrutinise the performance of GBE against its objectives. Indeed, it is not impossible—depending on how the Government choose to finance GBE—that it might even be able to take advantage of small or medium-sized company exemptions to the information it must provide in its accounts, especially given the increase in the limits for those that are going to take effect this April.

The impact assessment that accompanies this Bill says:

“Future benefits will depend on GBE’s future activities and spending decisions which are not in scope of this impact assessment. Therefore, no quantification of benefits has been provided at this stage. All investment into and expenditure of GBE will be subject to future spending reviews and business cases, which will set out in detail the monetised and non-monetised impacts of GBEs activities”.


It says exactly the same in respect of the costs. My first question for the Minister is therefore simply whether, and in what form, those spending reviews and business cases that the impact assessment talks about will be published and reported on. I asked the same question at Second Reading, but I am afraid I did not receive a reply at that point.

In the absence of those spending reviews being published—which I suspect will be the case—and any reporting on actual performance against them, we need something more than the limited information that must be published in the accounts in accordance with Section 441 of the Companies Act. My Amendment 89 seeks modestly to expand those requirements for publishing information by which the success, or otherwise, of GBE can be measured.