Great British Energy Bill

Debate between Lord Vaux of Harrowden and Lord Hunt of Kings Heath

Committee stage
Wednesday 15th January 2025 Grand Committee

[Lord Hunt of Kings Heath (Lab)]

My Lords, I am grateful to noble Lords who spoke in this debate, both today and in our deliberations on Monday. It seems quite a long time ago since then, and I am looking forward to a very constructive engagement today and welcome the contributions that all noble Lords are going to make.

Let me say at once that I very much understand the importance of information being provided in order to judge the performance of GBE and of it being held to effective account. There is no disagreement at all between me and other noble Lords on this. Noble Lords will know, as the noble Baroness, Lady Noakes, explained very clearly in her remarks on Monday, that her Amendment 88 requires GBE to file its annual reports and accounts within six months from the end of its accounting reference period. As she said then, and as noble Lords have repeated, this aligns with the Companies Act 2006 for public companies whose shares are publicly traded. Of course I agree that a six-month filing period is appropriate for public companies. Financial markets need up-to-date and timely information on the performance of a company, as do its range of stakeholders and shareholders, to help them make informed decisions when companies are seeking to raise capital.

I also understand why noble Lords wish this discipline to be applied to GBE, but it is a private limited company owned wholly by the Crown. It is not unreasonable for the Government to say that, on that basis, we should be in line with the Companies Acts requirements, which set a nine-month filing period for private limited companies. I should also say that this is an arrangement applied to most government-owned companies: for example, the National Wealth Fund, the National Energy System Operator and the Low Carbon Contracts Company. I know that the noble Baroness, Lady Noakes, was concerned about the filing deadline, but it is also the case that the vast majority of these organisations, government-owned companies, file their accounts well in advance of the statutory requirement.

I understand the point that the noble Viscount, Lord Trenchard, made about public interest in Great British Energy, and I welcome that. Indeed, I want GBE to be well-known and seen as spearheading the drive we wish to see in relation to Clause 3 and the statement of priorities in Clause 5. We wish GBE to be as successful as possible.

My point is that, in a sense, what is in statute in relation to the Companies Act is a minimum requirement because, as GBE is owned by the Secretary of State, it will be subject to the usual mechanisms that apply in the public sector. They are put in place to ensure that the public interest is discharged and proper public accountabilities are in place.

On Monday, the noble Lord, Lord Teverson, made an interesting point: one of the concerns some people have is that, because of GBE’s structure and because it is publicly accountable, it will be subject to a considerable number of the controls put in place for bodies that fall within public accountability. The key question is: can we ensure that GBE has sufficient operational independence to perform effectively in its work? There are a number of issues here around the way it will work in future.

I should also say that the annual report and accounts are not the only means of scrutinising the funding allocated to GBE. All funding to GBE must be voted on by Parliament; because of that, it will be scrutinised through the supply and appropriations debates in the other place.

Amendment 89 in the names of the noble Lord, Lord Vaux, and the noble Baroness, Lady Noakes, proposes specific topics to be included in the annual reports and accounts of Great British Energy, as well as the granting of an additional power to His Majesty’s Treasury to require further information. I can confirm that much of the proposed content will already be included and publicly available in the annual report and accounts, as required by Clause 7, and will be laid before Parliament. As an example, the financial assistance details under new paragraph (a), proposed by this amendment, will be included in the accounts of GBE. Details are likely to include issued share capital and items on the balance sheet of the company, such as borrowing from government if that method has been utilised.

The noble Lord, Lord Vaux, and my noble friend Lady Young of Old Scone were concerned that Great British Energy would need only to follow the provisions of the Companies Act in preparing its annual report and accounts. However, I can assure them that that is not the case. GBE will adhere to the additional reporting requirements for government-owned companies over and above the reporting requirements under the Companies Act. These include the obligation to follow the Treasury’s directions on accounts through the powers extended in the Government Resources and Accounts Act 2000, laid out in the government financial reporting manual and related “Dear Accounting Officer” letters. The most recent of these account direction letters requires bodies to give a true and fair view of the state of affairs, including net resource outturn, the application of resources, changes in taxpayers’ equity and cash flows for the financial year.

Furthermore, GBE will be required to report on its governance around exposure to and risk of climate-related scenarios in its operations, as set out by the Task Force on Climate-Related Financial Disclosures. Finally, any future funding of GBE will be subject to agreement through a government spending review, or another mechanism, as the Government see fit.

Amendment 92 in the name of the noble Baroness, Lady Noakes, proposes to require the Comptroller and Auditor-General to be the external auditor of Great British Energy; I think she said on Monday that it is a probing amendment. I am very happy to reassure noble Lords in this case. It is already the case that the Comptroller and Auditor-General will be the external auditor of Great British Energy. The company will also need to comply with the provisions set out in the Treasury’s Managing Public Money document, which requires the Comptroller and Auditor-General to be the external auditor for non-departmental public bodies such as Great British Energy. The requirement will also be set out in the framework document for Great British Energy, which we will debate shortly.

Amendment 90A, in the name of my noble friend Lady Young, seeks to require additional reporting from Great British Energy. Again, I assure her that much of the information that she seeks will be provided in GBE’s annual report and accounts, as a matter of course. The annual report and accounts will include key achievements and milestones, general business information relating to its strategic direction, a review of the company’s performance, challenges and future outlook, as well as financial statements and resourcing levels. It will also include reporting in line with the recommendations of the Task Force on Climate-Related Financial Disclosures.

GBE may also make more information available through reporting, such as when projects or investments are announced. We want to set this company up to be transparent and accountable, with a reporting regime appropriate to its company basis and status. The accountability of Ministers to Parliament for its performance will also be in place.

We very much take the point about the need for this organisation to be transparent and accountable. In the light of this debate, I will set out how this all comes together in detail and send a note to noble Lords. I hope that provides some greater reassurance.

[Lord Vaux of Harrowden (CB)]

I realise that Monday is quite a long time ago now and that the noble Lord has probably forgotten this, but I asked a specific question then. The impact assessment for the Bill says that, because the Bill does nothing but create the company, “no quantification of benefits” and costs

“has been provided at this stage”,

and that those benefits and costs

“will be subject to future spending reviews and business cases”.

I asked whether those future spending reviews and business cases would be made public.

[Lord Hunt of Kings Heath (Lab)]

I am not sure that I can answer that point in detail. The impact assessment is built around the legislation, rather than the future activities of GBE. May I take that specific question away? Clearly, the funding that the Government provide Great British Energy will have to be in the public domain and part of the normal process of dealing with a spending review and the financial consequences and flows of money that follow it. I am happy to look into that in more detail, if the noble Lord would like.

[Lord Vaux of Harrowden (CB)]

That would be very kind. The issue is that, if the Bill had been done in the normal way and included the detail of what GBE was going to do, the impact assessment would have covered those activities. However, those things are not included in the Bill so are not covered by the impact assessment. When the statement of strategic priorities and the detail of what the company will do are published, there will be no impact assessment on them, other than the spending reviews and business cases. It is important that they are made public, as if they had been part of the impact assessment that would have happened if this had been done in the usual way.

[Lord Hunt of Kings Heath (Lab)]

My Lords, as I said, I think we have acted properly with the impact assessment, which is based on the Bill. GBE has yet to commence its work. I have said that I will write to noble Lords detailing how we see GBE being held to account, in terms of its reporting and accountability, and I will add some more information about how that relates to the statement of strategic priorities in Clause 5.

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[Lord Vaux of Harrowden (CB)]

My Lords, the noble Baroness, Lady Noakes, regrets that she is not able to be here today, because this was scheduled after she already had other commitments, so, with the leave of the Committee, I will channel the noble Baroness to wrap up. I thank all noble Lords who have taken part in this constructive debate and the Minister for his constructive response.

Common themes are emerging throughout our discussions on the Bill, and the subject of transparency and accountability is probably the major one. I know that the noble Baroness will be disappointed by the response to shortening the reporting deadline to six months, which does not seem overly onerous. I was encouraged, I think, by what the Minister said about the reporting requirements and I look forward to receiving the letter he has spoken about. However, he did not refer in his answer to a couple of things that were in the amendment and are really important.

First, it is important that GBE reports on the investments it has made, and I do not think he mentioned that. Secondly, as a number of noble Lords mentioned, the key issue is that of additionality—in other words, what impact GBE is having on crowding-in private investment alongside the public investment. As I said on Monday, anyone can spend money. If this is to be in any way positive, it needs to attract private investment that would not otherwise have happened. It is really important that that is measured in the same way as it has to be by the National Wealth Fund. I think it is true to say that the National Wealth Fund, because it has the obligation to report on additionality, is actually performing rather well on additionality.

[Lord Hunt of Kings Heath (Lab)]

My Lords, I think I said by implication that I consider those matters that I would expect the company to report on.

[Lord Vaux of Harrowden (CB)]

I am reassured to hear that and I look forward to receiving the letter. We may need to come back to this, and I hope the noble Lord will be willing to sit down, discuss the overall questions around accountability and transparency and, I hope, put something forward himself that will strengthen what is, if I am honest, a somewhat thin Bill. With that, I beg leave to withdraw the amendment.

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[Lord Vaux of Harrowden (CB)]

In effect, under the Bill GB Energy will take a chunk of the activity of the National Wealth Fund—approximately a third of the total value, in fact—and put it into another entity. As I said, the National Wealth Fund’s framework document includes quite a lot of information around requirements to make financial returns and, in particular, the additionality principle. Therefore, because we are, in effect, moving a chunk of the National Wealth Fund’s activities into a different entity, it would presumably be appropriate that that remains subject to fairly similar levels of governance and control. Could the Minister perhaps say a little about the expectation on financial returns and additionality, which he has not mentioned in his response so far?

[Lord Hunt of Kings Heath (Lab)]

My Lords, by implication, we would expect the organisation to be as transparent as possible and to cover the sort of areas that the noble Lord mentioned. It is also fair to say that, given the comparisons being drawn between Great British Energy and the UK Infrastructure Bank, in the case of the UKIB, the framework document was published before Royal Assent. The point is that the organisation was operational before Royal Assent, but this Bill is being brought to Parliament before we have operationalised the company, so there is a distinction. As I said, noble Lords can be reassured that there will be a stringent framework document to ensure proper accountability. I am searching to find something else to say to give comfort, but I have to say that this is as far as we can go. Having said this from the Dispatch Box, it has to happen.

Returning to the part of the amendment that would require the relationship between GB Energy and other relevant public bodies to be included in the framework agreement, noble Lords will know that that is not typically part of a framework document, but GB Energy’s relationship with relevant public sector bodies will of course be part of delivering its objectives. Again, the partnerships will be undertaken in accordance with GB Energy’s operating principles and, where appropriate, we will provide definition to those relationships in the upcoming statement of strategic priorities. As part of its annual reports and accounts, we will of course expect GB Energy to report on activities undertaken as part of its public sector partnerships. We expect it to enter into a number of partnerships or relationships with other public bodies, but that is not appropriate for the framework document.

The other point to make here is that GBE will be accountable to Parliament, with a statement of strategic priorities laid before Parliament, and the accounting officer of Great British Energy, and Ministers, will be accountable to Parliament for the work and performance of the company. Members of your Lordships’ House will be able to ask questions and debate, and I have no doubt that Select Committees will wish to examine the chair and chief executive of the organisation from time to time, which seems wholly appropriate and will provide the public accountability that needs to go alongside the normal accountability that a private company would expect to operate, within the legislation that it will be covered by. We need to remember that it is also publicly accountable alongside the accountability that it needs to discharge as a private company.

The issue I come back to is that we have to ensure that it has enough operational independence. A push-back from noble Lords might be to ask: will it be overly constrained? We have to get the balance right between proper accountability and reporting and—dare I say it —what I hope will be an entrepreneurial approach to the formidable task it is being given. That is why the appointment of the incoming chair has been so important —to give us that expertise and experience.

As noble Lords will see, it is very difficult for us to agree to Amendment 121A, which would defer commencement of most of the provisions in the Bill until a framework document had been laid before Parliament. We do not think it possible to produce a framework document without the active involvement of the company itself. That is probably as far as I can go on this interesting area, but I can assure noble Lords that there will be a fully fledged framework document, which I think will cover all the issues that noble Lords are concerned about.

[Lord Vaux of Harrowden (CB)]

My Lords, I thank all noble Lords who have taken part in this short debate, and the Minister for his response, which is helpful and encouraging—I understand his point. However, I think he put his finger on the fundamental problem with the Bill, which is precisely what he said: the company is being established before we really know what it is going to do and before it starts to operate. Therefore, there is no scrutiny of those things at the moment. When he says that there is accountability through, for example, the statement of strategic priorities, it is not strictly true. It gets laid before Parliament, but there is no debate, approval or anything. The framework document will not even be laid before Parliament.

[Lord Hunt of Kings Heath (Lab)]

My Lords, of course, that is a fair point but, equally, I would say, as a Minister accountable to Parliament, that the opportunity for noble Lords to ask questions and take part in debates is considerable. I would expect that GBE and any statement of priorities will be fully part of the rough and tumble of life in Parliament. Anyone who has been involved in a company organisation such as that will know that parliamentary accountability really does bite and is effective.

[Lord Vaux of Harrowden (CB)]

The Minister is right on that—I cannot disagree—except, again, that accountability is only as good as the information on which one bases it. If there is no information, or if it is really thin, it is hard—

[Lord Hunt of Kings Heath (Lab)]

My Lords, I do not want to intervene constantly, but I think noble Lords will be awash with information about GBE, its performance and activities.

[Lord Vaux of Harrowden (CB)]

I am very encouraged to hear that but there is nothing in the Bill that says that. If one is honest, what tends to happen is that if something is really successful, we will be awash with information telling us how successful it has been. If it is less than successful, I wonder how much information we will see. Fair enough, but there is a wider discussion to be had between now and Report on transparency and accountability, and I hope the Minister will be open to that. With that, I beg leave to withdraw Amendment 93.

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[Lord Vaux of Harrowden (CB)]

My Lords, I was not going to speak on this, but I just point out very quickly that the other Act that has a clause that is not quite the same but similar to Amendment 99 is the UK Infrastructure Bank Act. As I have already pointed out, that is the really analogous organisation to Great British Energy, so it must be appropriate, I think.

[Lord Hunt of Kings Heath (Lab)]

My Lords, I am grateful to the noble Lord, Lord Frost, for initiating the debate on his Amendment 98, where he proposes to place a number of requirements on the role of the chair of the board of Great British Energy. I agree that the chair, the board and the chief executive officer have major responsibilities. I must say to him though that I do not recognise GBE as being an executive arm of my department. It is very interesting that he said that, because the noble Lord, Lord Teverson, made the interesting remark on Monday that there is a risk in having too many controls and reporting arrangements in relation to GBE, detracting from what we need it to do. We do want it to have operational independence, albeit working within the context of Clauses 3 and 5 of the Bill, the requirements under the Companies Act and the accountability arrangements I have already referred to. We need very highly skilled people at the top of GBE to find their way through this in order to ensure that it actually delivers on the things we want it to deliver on.

At the risk of inviting the noble Lord, Lord Hamilton, to intervene, I take his point about winners and Governments: this is the whole point of having an organisation that is not part of government—but, of course, it is owned by government—and being able to really get on with the job that needs to be done.

I will address pre-appointment scrutiny of the chair in relation to Amendment 101 soon. Amendment 98 requires the chair to be a full-time position based at the headquarters of Great British Energy in Aberdeen. I must say that it would be highly unusual to specify that a company’s non-executive chair should be full time or based formally at an organisation’s headquarters. Looking at the Grand Committee, almost all noble Lords here have taken roles as chairs or non-executive directors of organisations that can be based very far from where they are resident. Frankly, if we were to adopt this principle, we might inhibit the appointment of high-calibre people, notwithstanding that Aberdeen is a very fine place to live and work, as I know from the experience of having a family member working in the offshore oil and gas industry from there.

I do not think that a full-time chair is appropriate; I think it is perfectly appropriate to have a part-time, non-executive chair in that role, as the noble Lord, Lord Frost, has already remarked. Having an interim chair does not preclude having a very lively presence—and a jolly good thing too. I do not think we should insist that that should be a full-time role.

My main board experience is in the public sector, in the National Health Service, and I have been around in the NHS for long enough to know the problem of chairs who come in on a daily basis and inhibit the proper role of the chief executive. I would be wary of encouraging that development in GBE; I am sure that it will not happen.

Again, in relation to the annual review of the chair’s performance by external auditors, which is to be laid before Parliament, first, we will of course ensure that there are annual performance reviews for Great British Energy’s chair. This aligns with best practice followed by other public bodies, and my department is well used to doing this in relation to a number of the bodies it oversees. The review will typically be performed by a senior official in the sponsoring department, supported by the senior independent director on the board, who will have deep insight into the chair’s performance over the year.

Of course, there will also be regular meetings between the responsible Minister and GBE, as there is in my department between Ministers and other organisations, as would be expected. In a sense, these are also part of the accountability mechanism. However, I acknowledge the expectation of the noble Lord, Lord Frost, that Parliament will have a strong interest in the chair’s performance. I fully anticipate that the relevant Select Committees will call on them on a regular basis to provide evidence and, of course, I fully expect the chair of GBE to accept those committee’s invitations.

Amendment 99, also in the name of the noble Lord, Lord Frost, would place certain requirements on the composition of Great British Energy’s board. As noble Lords have said, it largely replicates provisions in the UK Infrastructure Bank Act. We made clear in our founding statement that GBE will be an operationally independent company, overseen by an independent board. We do not think that it is necessary to legislate these provisions, since established governance documents, such as the UK Corporate Governance Code and the Governance Code on Public Appointments, already apply.

The UK Corporate Governance Code, published by the Financial Reporting Council, sets out best practice in relation to corporate governance. Although it applies formally to listed companies only, it is standard practice for government companies to comply with it or, where they do not, explain why. The Governance Code on Public Appointments provides clear guidance for ministerial appointments, which are regulated by the Commissioner for Public Appointments and should be followed even where roles are not formally within the scope of the commissioner. I can give an assurance from the Dispatch Box that Great British Energy will comply with these codes, ensuring best practice in corporate governance.

GBE will also be required to follow corporate governance best practice to help guide the composition of its board. This will have an impact on the number of directors required at each stage of GBE’s development and operation. We think that, having given those assurances, there needs to be a degree of flexibility at this stage about how GBE goes forward in relation to the composition of its board. The noble Lord’s amendment would also place standard requirements on when an individual should cease to be a director. I can assure him that such provisions already exist, including in the Companies Act 2006, and that they will, as is common practice, be replicated in GBE’s articles of association.

Amendment 101 in the name of the noble Earl, Lord Russell, proposes to require all appointments by GBE to be scrutinised by the Energy Security and Net Zero Committee in the other place before they come into effect. This is similar to new subsection (1), proposed by Amendment 98. Noble Lords will know that Cabinet Office guidance on pre-appointment scrutiny by House of Commons Select Committees provides clear guidance on the criteria and process to be used in these circumstances. It sets out that decisions on the scrutiny of individual posts should be made between the Secretary of State, the chair of the relevant committee and the Cabinet Office. It is not common practice for this to be set in primary legislation.

The guidance gives the criteria of the types of roles which may be in scope. Importantly, it sets out the principle that the posts which require pre-appointment scrutiny are, most typically, the chair or equivalent of the organisations. None of the roles identified in the guidance as requiring pre-appointment scrutiny are in government-owned companies of the kind that GBE will be. No public body currently appears to have its full board subject to pre-appointment scrutiny. Where individual roles are scrutinised, it is done following agreement between the Secretary of State and the committee chair.

From our point of view, the calibre of Great British Energy’s director appointments will be of great importance. We want GBE to succeed, so we want the highest calibre of people to be appointed as chair, to non-executive positions and to the chief executive officer role. We anticipate that recruitment for the substantive board will begin over the course of this year, and we will ensure that recruitment is undertaken in a manner which aligns with best practice. I can assure the noble Earl, Lord Russell, and the noble Lord, Lord Frost, that in line with Cabinet Office guidance, any relevant public appointments to Great British Energy will be discussed with the appropriate Select Committee chair. I hope that I have been reassuring regarding this.

Great British Energy Bill

Debate between Lord Vaux of Harrowden and Lord Hunt of Kings Heath

Committee stage
Tuesday 17th December 2024 Lords Chamber

[Lord Hunt of Kings Heath (Lab)]

My Lords, this is a very interesting set of amendments, and I am grateful to all noble Lords who tabled amendments and have spoken in this debate. Clearly, as we said before, the overarching aim for the statement of strategic priorities is to ensure that Great British Energy operates in line with, and delivers on, the priorities set out by the Government. That is proper for the Government to do.

It is clearly important that we have a means through which to influence the strategic plans of Great British Energy. Equally, we want Great British Energy to have as much operational independence as possible within the parameters of Clauses 3 and 5. Inevitably, that makes me cautious about a number of the amendments proposed during this debate, which one way or another seek either to constrain the powers of GBE or to direct where it ought to focus its priorities and energies.

Amendment 46 tabled by my noble friend Lady Young proposes an addition to Clause 5 to ensure that Great British Energy will reduce greenhouse gas emissions, improve energy efficiency, ensure security of supply and include community ownership. As she said, we debated some of those matters on our first day in Committee. I agree with her about the vagaries of groupings, which after 27 years of membership of your Lordships’ House remain an eternal mystery to me, as we are enabled to repeat many of the debates already held. Indeed, the noble Earl, Lord Russell, has promised to come back to the very issue of community energy when we meet again on some distant future date in mid-January.

The Bill clearly provides a statutory basis for facilitating and encouraging the reduction of greenhouse gas emissions, improving energy efficiency and ensuring the security of supply of energy under the objects set out in Clause 3. Clearly the statement of strategic priorities must be consistent with these objects. I understand the point that the noble Lord, Lord Hamilton, made about prices; there was an Oral Question today on the impact these are having on UK businesses. He will know that, as I said then, the highest price for energy was achieved under his Government’s watch.

The noble Lord, Lord Offord, also spoke on that topic, and talked about security of supply. I think he very much reinforced what the noble Lord, Lord Hamilton, said when the latter raised the issue of the sun not shining and the wind not blowing, and the resulting reliance on gas. In our aim to move towards clean power by 2030 we envisage using renewables much more than currently. However, we also need nuclear as an essential baseload for our energy generation, and gas as the flexible energy generation which you can turn on and off. Currently gas is unabated, but with CCUS it will largely become abated. That is the way we see ourselves going forward, along with having long-term energy storage as set out in our clean power action plan.

On North Sea oil and gas—again, the noble Lord, Lord Offord, has raised this with me a number of times—I repeat that we are committed to a just transition, working with industry and the workers involved themselves to recognise the importance of the sector, which will operate for decades to come. We remain in close engagement with the industry on these matters. Like the noble Earl, Lord Russell, my essential response to these issues about energy price reductions and the need for long-term price stability is that reliance on international fossil fuels, and the markets that operate in the way they do, is simply not the way to solve them.

I turn to the specifics in Amendments 47 to 50 and 51A, tabled by the noble Lord, Lord Offord, my noble friend Lord Whitty, and the noble Earl, Lord Russell, and supported by the noble Baroness, Lady Bennett, and the noble Viscount, Lord Trenchard, although he did not speak to them. These amendments would require the statement of strategic priorities to include targets relating to consumer bills, jobs and supply chains, and to include reference to community energy schemes.

On the general principle, we want Great British Energy to operate independently. The Bill is focused on making the minimum necessary provisions to support establishing the company—that is why the Bill is constructed in the way it is. Normally, Governments are accused of trying to micromanage the institutions they are responsible for, but here the Government are saying that GBE needs to have as much operational independence as it can within the constraints of Clauses 3 and 5. However, some noble Lords wish to constrain, in one way or another, what Great British Energy should do. We are resistant to that as a general matter of principle.

[Lord Vaux of Harrowden (CB)]

I am rather baffled by the Minister’s argument. The Government are going to publish a statement of strategic priorities, but if Great British Energy is going to be independent why does it need such a thing? Presumably the statement of strategic priorities will point the company in the right direction, but the implication of the Minister’s argument is that it is going to be incredibly thin. Is that correct?

[Lord Hunt of Kings Heath (Lab)]

I do not really know why the noble Lord is baffled by what I said. I thought I clearly said that we wish Great British Energy to have as much operational independence as possible, within the constraints of Clauses 3 and 5. At this stage, I cannot tell him what will be in the statement of strategic priorities, because it is being worked on, but it will have sufficient detail to make absolutely clear the Government’s priorities within the constraints I have suggested, while allowing Great British Energy the breadth and room to move in the way it thinks best.

On the issue of jobs, which my noble friend Lord Whitty was absolutely right to raise, all the organisations he mentioned have a role to play to ensure not just that we create the required jobs but that we can fill them. The issue is not so much lacking jobs for the future but enabling enough people to come forward to be given the right training and skills to fill them as effectively as possible. There is a clear message in the action plan we published last week:

“The wider transition to net zero is expected to support hundreds of thousands of jobs, with Clean Power 2030 playing a key part in stimulating a wealth of new jobs and economic opportunities across the country. These jobs will cross a range of skill levels and occupations, including technical engineers at levels 4-7 … along with electrical, welding, and mechanical trades at levels 2-7, and managerial roles including project and delivery managers at levels 4-7. Many of these occupations are already in high demand across other sectors”.


We have within the department the Office for Clean Energy Jobs, whose role is to co-ordinate action to develop a skilled workforce to support and develop our clean power mission.

I should mention the nuclear industry. I am at risk of repeating myself, but other noble Lords have enjoyed doing that during our deliberation. The Nuclear Skills Taskforce calculated that we need 40,000 extra people working in the nuclear sector—civil and defence— by 2030. That is in five years’ time. That goes up into the 2040s. There is a huge job to be done, and I believe it is my department’s role to work with industry and all the other organisations to spearhead that.

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[Lord Vaux of Harrowden (CB)]

There was one other question I asked the Minister which he has not answered, which is whether the strategic priorities document will be accompanied by an impact assessment. The impact assessment we have with this Bill basically says that there are no benefits or costs because all it does is create the company, so we are effectively going to go through this process of creating something that can spend £8.3 billion with no impact assessment if that does not happen. Will there perhaps be an impact assessment that accompanies it?

[Lord Hunt of Kings Heath (Lab)]

My Lords, at this stage, I cannot answer that because it is still to be decided as part of the work that we are taking forward in relation to drafting the statement.

[Lord Vaux of Harrowden (CB)]

My Lords, I thank all noble Lords who have taken part in this debate. Before I sum up, I say to the noble Lord, Lord Howell, that I am not against this Bill. The problem we have here is the lack of any detail in it and the lack of any scrutiny once we have that detail, which is what the Constitution Committee pointed out. As the noble Earl, Lord Russell, pointed out, there is a high degree of unanimity around the House that the current situation set out in the Bill in that respect is really not adequate and that we need a greater level of parliamentary involvement in what will be the core element of this Bill: what GBE is going to do.

I take on board the points that the noble Lord, Lord Teverson, made about secondary legislation. I agree, but it is what we have at the moment, so we have little choice but to work with it. I would love to see a change to the way secondary legislation is debated, and it should be amendable, but we have a way to go before we come there.

There were plenty of ideas in this group as to how we might improve the scrutiny. I do not think any of us are wedded to any one of them. I am encouraged by what the Minister says about listening to the Constitution Committee and his belief in parliamentary scrutiny. I therefore hope that we can have some useful and constructive discussions between now and Report on this subject and come up with something that we can all agree on as an appropriate level of parliamentary scrutiny on this most critical aspect of the Bill. If we do not, I am absolutely confident that we will come back to this on Report. For now, I beg leave to withdraw Amendment 51.

Great British Energy Bill

Debate between Lord Vaux of Harrowden and Lord Hunt of Kings Heath

Committee stage
Tuesday 3rd December 2024 Lords Chamber

[Lord Hunt of Kings Heath (Lab)]

My Lords, it was more than two. I can quote Prime Minister May, and I acknowledge her leadership in this country being the first to enshrine the 2050 net-zero carbon target. Prime Minister Johnson only recently addressed COP 26 in Glasgow; I think we all acknowledge the leadership the noble Lord, Lord Sharma, showed there. The noble Lord, Lord Ahmad, announced to the UN the £11.6 billion in international climate finance for the period 2021-22. Although we are having this friendly discussion about future energy policy, there is still some consensus on the need to decarbonise our energy supply, and Great British Energy is part of the way we are going to do it.

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. We have been clear that the first statement, which will be published in 2025—after due consultation and discussion with the devolved Governments and with Jürgen Maier, the chair of Great British Energy—will ensure that GBE is focused on driving clean energy deployment to boost energy independence, create jobs and ensure that UK taxpayers, bill payers and communities reap the benefits of clean, secure, home-grown energy.

Of course, the issue of energy bills is very important. We are relying strongly on the advice of the Climate Change Committee, of which the noble Lord, Lord Hamilton, is probably not a great fan—but none the less, over 14 years his party listened to it. The committee said that a clean energy future is the best way to make Britain energy independent, protecting bill payers, creating good jobs and tackling the climate crisis.

The independent National Energy System Operator confirmed a few weeks ago that our 2030 clean power goal is achievable and can create a cheaper, more secure energy system. More broadly, the OBR—another body to which the previous Government paid great attention; they ran into trouble when they did not—highlighted that delayed action on reaching net zero will have significant negative fiscal and economic impacts. The Committee on Climate Change has said that the net costs of the transition, including upfront investment, ongoing running costs and costs of financing, will be less than 1% of GDP over the entirety of 2020 to 2050—lower, it said, than it concluded in its 2019 Net Zero report.

I have already said that we will publish the statement of priorities in 2025. How will GBE be judged? It will be judged on its performance against the statement of priorities within the context of the objectives set by Clause 3.

[Lord Vaux of Harrowden (CB)]

The Minister has said again that the objectives of the company are set out in Clause 3. I am afraid that is not correct. The objects of the company are set out in Clause 3. As the noble Baroness, Lady Noakes, said, those objects restrict the activities—they do not set out the objectives. Nowhere in the Bill are the objectives of the company—what it is trying to achieve—laid out. I have not yet heard an argument from the Minister as to why that is.

[Lord Hunt of Kings Heath (Lab)]

I really do not read Clause 3 in that way. Subsection (2) says:

“The statement must provide that Great British Energy’s objects are restricted to facilitating, encouraging and participating in”.


One way to read that is that Great British Energy’s objects are around the following four paragraphs, informed by the strategic priorities and plans that the Secretary of State will prepare over the next few months.

[Lord Vaux of Harrowden (CB)]

There is only one way to read the words the “objects are restricted to”. That is what the clause says.

--- Later in debate ---

[Lord Hunt of Kings Heath (Lab)]

My Lords, I cannot give the noble Lord chapter and verse today but will certainly write to him with what we can say in public.

[Lord Vaux of Harrowden (CB)]

My Lords, I thank all noble Lords who took part in this interesting debate and the Minister for his fairly fulsome answer. On Amendment 10, I am not totally convinced that trading is covered by the objects as they stand but I will read his answer in Hansard to see whether I can convince myself that he is right. As he says, the issue is that if it is not in the objects, it is not allowed. I want to make sure that it is allowed—not that it has to happen—in the same way that he argued the other way around on the security definition. That said, I beg leave to withdraw my amendment.

Domestic Solar Panels

Debate between Lord Vaux of Harrowden and Lord Hunt of Kings Heath

Monday 25th November 2024 Lords Chamber

[Lord Hunt of Kings Heath (Lab)]

My Lords, of course, I cannot guarantee that the majority of solar panels between now and 2030 are going to be built in this country. What I can assure noble Lords is that, as part of the work we are taking forward, we will look at the UK supply chain. However, the essential point here is that we must strive towards clean power. I do not discount the positive impact of heat pumps. The Government, in their warm homes plan, are as committed to heat pumps as they are to solar.

[Lord Vaux of Harrowden (CB)]

My Lords, one of the best ways of increasing solar panels on the roof is to incentivise people to put excess capacity over their own usage requirements. What assessment have the Government made of peer-to-peer trading arrangements, which would allow people to sell their excess to their neighbours at a price higher than the smart export guarantee but lower than the retail price? I hope the noble Lord will agree that would be a win-win situation.

[Lord Hunt of Kings Heath (Lab)]

The noble Lord has raised this with me, and I think mentioned it at Second Reading of the GBE Bill, so we are giving it consideration. Of course, one should say that in terms of the incentives for people to invest in solar panels, we already have the smart export guarantee, which is a payment for excess electricity generated. However, as part of the warm homes plan, we are looking at the role of incentives and the use of private finance to find a way to help people with the upfront cost, which—even though solar is cheaper than other renewable energies—is always one of the main problems in relation to people being able to invest in their own solar panels.