Retained EU Law (Revocation and Reform) Bill

Lord Whitty Excerpts

2nd reading
Monday 6th February 2023 Lords Chamber

[Lord Whitty (Lab)]

My Lords, the Minister will remember that, about four years ago, we were discussing the EU withdrawal Bill. It was flawed in many ways—it took a long time, and we were raising all sorts of points —but we all recognised at that point that we needed something such as that, because we needed some degree of continuity, stability and time to consider whether we wanted the EU regulations or whether we wished to change them. We agreed, in principle, that we needed a Bill. The opposite is true of this: 80% of speakers in your Lordships’ House today have been fundamentally opposed to the Bill. A larger proportion of representations from civic society, industry and business—almost everybody; not just the usual wussy bugbears of the Government, such as human rights lawyers, trade unionists and environmentalists—is opposed to the basic precept of the Bill. So I will scrap the rest of my speech, except to pose the key question: what is your Lordships’ House going to do about it, with this unanimity of view?

If they were put to the vote tonight, I would vote for the amendments to the Motion. While I would have preferred to try to block the Bill at Second Reading, the House of Lords does not do that. So what shall we do if we follow our normal course? We need to make some fundamental amendments to the Bill, and I will suggest five. We should establish, before we go any further, a proper parliamentary process for considering the remains of the EU regulations, which probably needs to be a body of both Houses. We should delete the arbitrary sunset deadline of December this year, which is less than 11 months away. We should delete the provisions in Clause 15(5), which mean that we can alter the regulations only in a deregulatory way, with a very narrow definition of deregulation. We should put in the Bill the declarations made by Ministers that workers’ rights and environmental protections will not diminish. We should also move back the ultimate sunset clause of the end of 2026, as we need more time. Frankly, the reindeer in Lapland can wait a bit; there is, after all, still a statute on our book that says that you are allowed to kill a Scotsman in Carlisle if he is carrying a bow and arrow, but not on a Sunday—we have never deleted that one. While we need to delete some laws in due course, let us take proper consideration under parliamentary procedure and not under ministerial fiat.

There is such unanimity of view that the House of Lords needs to get out of its pram and assert itself. If necessary, we should do so more than once. If the Government do their usual job of rejecting all Lords amendments, let us send it back again; then the Government will have to decide whether to use the Parliament Act, by which time we will be in a general election and, hopefully, the world will change.

Net Zero

Lord Whitty Excerpts

Thursday 26th January 2023 Lords Chamber

[Lord Whitty (Lab)]

My Lords, slightly to my surprise, I very much welcome this report by Chris Skidmore and I agree with pretty much everything the noble Baroness, Lady Hayman, said. Chris Skidmore has performed two key changes in mindset on this for us—if we are prepared to follow them.

First, it is now very difficult for the darker sides of His Majesty’s Treasury and other bits of Whitehall—and, indeed, the less progressive elements of industry—to claim that there is a conflict between government intervention to improve economic performance and intervention contributing to our environmental target of net zero. Net zero is an economic strategy; it is the only one in town. The environmental is economical. What is good for carbonisation is good for economic progress and Britain’s economic leadership.

Secondly, the report finds that the present policies for reducing greenhouse gases are clearly nowhere near sufficient—or, more accurately, are not yet being pursued sufficiently vigorously and in sufficient detail to add up to an effective net-zero pathway. We need to confront these big points. It is not news that we are falling short on a lot of our environmental targets; the Climate Change Committee points this out regularly. What is new is that we must now recognise that these failures are also profound economic failures. They will affect us economically in terms of our prosperity as well as being a setback to our achievement of the net-zero strategy.

We must recognise that, although dramatic changes in technology may come through in the coming decades and help us meet our net-zero goals, most of the progress we make until at least 2035 will have to be done with technology that we already have or is already pretty close to proving. This means that we will need a much clearer map of technological choices and government decisions. For example, we need big early decisions on fuel and energy; on the deployment of new forms of nuclear power, including SMRs; and on the role of hydrogen.

Hydrogen is seen as a solution to our most acute problems in replacing fossil fuels. We probably need to use hydrogen for heavily energy-intensive industries and heavy transport such as marine, road, rail and, possibly, aviation. However, we cannot expect hydrogen to be produced in a green form that is also sufficient to provide a basis for heating our buildings. As the noble Baroness, Lady Hayman, said, we probably need instead to mandate heat pumps or some other technology, such as district heating, together with a proper, solid, greatly enhanced energy efficiency programme, national installation standards for all new build and substantially greater, more targeted resources for retrofitting buildings. The other thing we need is a greater emphasis on land use and agriculture than is in the Skidmore report; not enough of it focuses on how we produce our food and use our land.

Thirdly, we need brave decisions on road vehicles. This means getting rid of all petrol and diesel cars more rapidly, probably with road rationing—by price or by zoning—as well.

Lastly, as the noble Baroness, Lady Hayman, said, we need coherence in government. We need proper cross-government machinery. A shadowy committee about which none of us knows and which has no clear conclusions and no clear strategy is not enough. We need a proper office for net zero, and it has to transcend the whole of Whitehall and, indeed, the whole machinery of government at all levels in this country.

Net Zero (Industry and Regulators Committee)

Lord Whitty Excerpts

Friday 20th January 2023 Lords Chamber

[Lord Whitty (Lab)]

My Lords, I thank my noble friend Lord Hollick for the report. I remember that, when it first came out, I was deeply impressed by it. Since then, we have had a global energy crisis, and in this House we have considered, but have yet to complete, two enormous and constantly changing energy Bills to try to set out government policy more clearly.

Regrettably, those Bills do not answer many of the problems which the report originally raised. That includes, as others have said, the storage of gas and the production of renewable energy; the early deployment of carbon capture and storage; our much clearer nuclear strategy, including the role of small modular reactors; and the question of whether hydrogen will play any role in the heating of housing and other buildings, and the business model needed to support hydrogen. No decision has been made on the connectivity of the various arrays of offshore wind, the funding for heat pumps or the enhanced money for energy efficiency in homes to ensure that energy efficiency both benefits consumers and reduces the use of gas in our homes. There is also the question of how that will be paid for, whether by private or public funding, and in which way that will be delivered.

Those strategic questions have yet to be answered. The two Bills we have had since then have done some useful things, many aspects of which I agree with, but they have not answered many of these fundamental questions, including the role of the regulator as we go forward. This report focuses very much on the regulator and we do not yet have a clear indication about the relationship between Ofgem’s central role of looking after consumers and the net zero strategy. In Committee on the current Bill that is still going through—Committee has not yet finished—I tried to add a commitment where the role of Ofgem is extended to the consumers of heat networks. This is much needed, I agree with that, but we need to write into the terms of reference of Ofgem and other regulators the need to support and not to undermine the Government’s net zero strategy.

Like other regulators in the wake of privatisation, Ofgem was given the responsibility of looking after consumers, quite rightly, but that has to be expanded. We have to be clearer than we are in the current regulations and the Bill that is now going through about the relationship between Ofgem and the proposed future systems operator for the energy sector. It is important that not only Ofgem but the rest of our regulators have a relationship with the net zero strategy. Ofcom and Ofwat, in particular, need to have a relationship with net zero, as, frankly, do the financial regulators, to ensure that we are deploying finance and our whole financial system to support the overriding importance of net zero. Although this report rightly relates to Ofgem, we need to take the wider lessons on how regulation now operates in this day and age.

We also need to take up the point of cross-government co-ordination. That was repeated in the report just recently received from Chris Skidmore, and I hope that, while he may not be able to give a reply today, the Minister will be able, by the time the noble Baroness, Lady Hayman, has her QSD on Thursday, to give us an indication of how the Government will respond to Chris Skidmore’s report.

Energy Bill [HL]

Lord Whitty Excerpts

Committee stage
Monday 19th December 2022 Grand Committee

[Baroness Bennett of Manor Castle (GP)]

My Lords, I shall speak chiefly to Amendment 162. tabled by the noble Baroness, Lady Worthington, although I take the opportunity to welcome the government amendment on help for micro-businesses and say that it is great to see that happening. The noble Lord, Lord Ravensdale, has already introduced this very clearly; I shall make just one additional point and apologise to the Committee for my absence last week when a number of amendments that I had either tabled or supported were debated. I was in the Chamber with the genetic technology so-called precision breeding Bill. If we have two environment Bills running in exact parallel, it creates some difficulties. I particularly want to thank the noble Baroness, Lady Worthington, for some excellent support for some of my amendments last week.

On Amendment 162, I want to make the point that it is crucial here that we are talking about local networks; what may be appropriate in one place may be inappropriate in another. I am thinking, for example, of areas where air pollution is an issue and the kind of fuel used will be a particular issue in that area. It may, indeed, be appropriate for the regulator to take action on the basis of local conditions as well as of national polities, in terms of either the nature crisis or the climate emergency.

[Lord Whitty (Lab)]

My Lords, noble Lords may have noticed that I extracted my amendments to the second group, when they were originally suggested to be tabled in this group. They relate to the protection of consumers.

I am grateful that the Minister emphasised protection, for both domestic and non-domestic consumers, of the commitments to district heating, decentralised energy and community energy. I am strongly in favour of that move, but I do not think the Bill, as first drafted, or as I read the amendments proposed in the Minister’s group, entirely meet the need to protect consumers of district heating et cetera to the same extent that consumers of other suppliers are protected. I was gratified by some of the Minister’s words this afternoon, but I still do not feel that this combination of what is in the Bill and the Minister’s own amendments will deliver for consumers of district heating the protections, that have been absent for so long, which are supplied via Ofgem to consumers of other forms of electricity supply. I think it will need a bit of tweaking and I shall come to that in the following group.

I do, however, want to register my appreciation for the role of decentralised energy being recognised here. We have some tidying up to do, but I welcome the Government’s commitment to extend support both for consumers in this sector and for the sector itself.

[Lord Lucas (Con)]

My Lords, I wonder whether rounds one to three of the green heat network fund are throwing some light on the potential for expansion in this sector. Are the Government viewing heat networks as something that we will see a lot of, or just little bits and pieces? Coming back to the amendment spoken to by the noble Lord, Lord Ravensdale, if we are going to see a lot, are we seeing green heat sources coming into play in this area? If we are to see a lot of networks, and since the ones I am familiar with, at least, require serious street works, is there a possibility of combining those street works with separating sewage from storm water?

--- Later in debate ---

Moved by

[Lord Whitty]

161B: Clause 166, page 140, line 12, at end insert—
“(3A) The central role of the Regulator in relation to heat networks is to ensure that customers of heat networks have at least equivalent consumer protection to customers of other forms of energy.(3B) The Regulator must have regard to the need for ensuring regulations are supportive of, and compatible with, the United Kingdom’s climate change commitments.”

[Lord Whitty (Lab)]

My Lords, I cannot hope to compete with the Minister, who took six minutes to speak to about 40 amendments, which I think is a record even for this Committee Room. I took out my amendments from the previous group, as I mentioned, because the combination of the Bill at present and the amendments to which the Minister and I just referred does not clearly put the consumer of heat networks on the same basis as the consumer of other forms of energy supply.

I confess that, for part of my career 10 or 12 years ago, I was a little schizophrenic about this, because I was both the honorary president of the CHP Association, which is the predecessor of the Association for Decentralised Energy, and the chair of the statutory energy consumers protection body, which was the National Consumer Council and then Consumer Focus, until the coalition Government unfortunately abolished it. I was both a champion for consumers and for this technology, and I still am. The problem is that the consumers of this technology, the households and commercial or industrial elements that depend on district heating and other forms of heat network, are the least protected of all consumers. While I agree with the amendments the Minister spoke to just now—they are a significant improvement—I do not yet feel that the new wording makes that clear.

My Amendments 161B and 161C propose to put in the Bill, eventually in the Act and the Schedule associated with it, a clear and unequivocal commitment that the regulator’s main and central role will be to ensure that consumers of energy supplied through heat networks have the same rights, protections and regulatory authority as other consumers. If you put that centrally, the role of regulation will be clear. I was gratified when the Government committed to extending regulation in this area and, by and large, I was in favour of the consultative document they put forward. I was slightly more equivocal about giving Ofgem the job, but it is logical that it should be done by Ofgem. My equivocation on that issue was that Ofgem’s record in protecting consumers over the last two or three years has not been that great. Nevertheless, I accept that Ofgem should undertake this role.

The situation at present is that the majority of customers of heat networks are in social housing run by local authorities or organisations subcontracted by local authorities. While there are a lot of private heat networks and some commercial heat networks, the majority are in that category. The consumers are therefore tenants and leaseholders of local authorities on what were once local authority estates. Therefore, they are probably among the lower incomes and have a higher proportion of vulnerable consumers.

This makes it doubly worrying that, for years, there has been no equivalent protection for those who receive their energy from the big six or big eight—whatever it is now—energy suppliers. My amendments are intended to make clear that the main role of the regulator is to protect those consumers. They relate in part to the amendments moved by the Minister relating to the price cap, but they are not just about the price cap. They are also about the price support schemes and the whole range of requirements placed on energy supply companies in relation to customer service for consumers, recognition of the problems of vulnerable consumers in particular and the need to ensure that supplies are continuous for such consumers.

--- Later in debate ---

[Lord Callanan (Con)]

I thank the noble Lord, Lord Whitty, and the noble Baroness, Lady Blake, for their comments and amendments. As I said on the previous group, the Government are committed to introducing protections for heat network consumers that ensure that they receive a fair price and a reliable supply of heat, and are not disadvantaged compared to other consumers. Ensuring that heat network consumers receive comparable protections to gas and electricity consumers is the primary reason for agreeing to the CMA’s recommendation to regulate heat networks.

We also recognise the vital contribution that heat networks will ultimately make in decarbonising heat in buildings. I highlight to the noble Lord that the Bill already provides for the heat networks regulator to prioritise protection of consumers and the decarbonisation of the sector. The Bill provides for Ofgem to be the heat networks regulator in Great Britain, with the Utility Regulator taking on the equivalent role in Northern Ireland.

Schedule 15 to the Bill provides for regulations making provision about the objectives of the regulator. This includes its principal objective to protect the interests of existing and future heat network consumers. This is equivalent to Ofgem’s principal objectives to protect the interests of existing and future gas and electricity consumers. We intend for this principal objective to be set out in the regulations.

Schedule 15 also provides for regulations specifying the interests of existing and future heat network consumers that are to be protected. This includes consumers’ interests in the reduction of greenhouse gas emissions generated by heat networks. Schedule 15 also provides for the introduction of carbon emissions limits on heat networks in England and Northern Ireland. We intend again for this to be provided for in the regulations.

The regulations will also give Ofgem powers to investigate and intervene on networks where prices for consumers appear to be disproportionate compared to systems with similar characteristics or if prices are significantly higher than those consumers would expect to pay if they were served by an alternative, comparable heating system. Ofgem will also be able to set rules and guidance on how heat networks recover their costs through their heat tariffs.

Amendment 161CA tabled by the noble Lord, Lord Lennie, and the noble Baroness, Lady Blake, is on ensuring the efficiency of existing heat networks. I thank them for highlighting the importance of ensuring that regulation facilitates the improvement of technical standards on heat networks. This will ensure efficient heat networks that provide fair prices and reliable heat to consumers at the same time.

I reassure noble Lords that the Bill, more specifically paragraph 14(3)(d) of Schedule 15, already provides measures for ensuring heat network efficiency. Schedule 15 provides for the introduction of technical standards, which will protect consumers from being supplied by inefficient networks. The regulator’s compliance activity in relation to new and existing heat networks will include work on any standards mandated in authorisation conditions under this power.

I therefore submit that the intentions behind the noble Lords’ amendments are already provided for in the Bill, so I hope that they do not press them.

[Lord Whitty (Lab)]

My Lords, I thank the Minister for that reply. I will clearly want to look at these clauses and the Schedule once all these amendments have been agreed and adopted. I am still not absolutely convinced that all aspects of consumer protection will be covered by this and by Ofgem’s role, but I welcome the Minister’s reassurance.

The key issue is whether all interventions will treat the consumers of district or decentralised heating the same as they would consumers of other forms of energy supply. That also applies to the Government. The Minister referred to the price cap, but the price subsidies or support that we agreed the other week has not found its way to consumers of district heating. That may be a matter of time or it may be that the entity that supplies the heat is obliged to pass that on, but that is not clear at the moment. Things like that need to be tightened up before the final version of the Bill is agreed. I therefore look forward to seeing what the clauses look like following the Minister’s amendments to see whether any further amendments are needed to meet my concerns in this respect. In the meantime, I withdraw my amendment.

Amendment 161B withdrawn.

Energy Bill [HL]

Lord Whitty Excerpts

Committee stage
Monday 12th December 2022 Grand Committee

[Baroness Jones of Moulsecoomb (GP)]

My Lords, I support the thrust of these amendments but I also have huge qualms about hydrogen and electric vehicles. Quite honestly, electric vehicles still clog the roads and their drivers still run over and kill people. If we are thinking about low carbon, we should go for public transport.

I also want to quibble with the noble Baroness, Lady Randerson, when she said that there was a lack of government leadership on this issue. The fact is that the Government are not giving us leadership on any issues. They are running around like a pack of confused ferrets. We are incredibly lucky that the whole of Britain is somehow hanging together and not having any disasters.

Returning to the amendments, something Greens are always very concerned about is marketisation and financial engineering around environmental issues. The UK has a long and dangerous track record of mismanaging this. In the same way that financial engineering around mortgages caused the 2008 financial crisis, there are risks that bankers will abuse the climate crisis as an opportunity to get filthy rich while destroying the very systems we are working to protect. It has been done before.

That is why we are concerned about concepts such as natural capital, which risks being a double-edged sword. If it helps policymakers to recognise the immense value of our natural capital and our natural world, it might be helpful, but if it simply creates new opportunities for bankers to get filthy rich, it is deeply dangerous.

For this reason, it is essential that carbon removals are genuine physical processes that remove carbon dioxide from the atmosphere and lock it up. There cannot be any ambiguity or scope for financial markets to exploit for profit, or for our Government to claim success when no real carbon dioxide has been removed from the atmosphere.

I was at a round table last week; there were about 16 of us, and we were fairly evenly divided between scientists and parliamentarians. All the parliamentarians were from the Commons, apart from me. The scientists all agreed with each other and kept saying the same thing: that we must stop burning fossil fuels. However, all the parliamentarians, apart from me, said, “Oh, that’s quite difficult—I cannot ask my constituents not to fly”, and things like that. My concern is for the Government to be deeply behind the science. Even the UN is now saying that we must act urgently. You cannot, even now, talk about low carbon and net zero; we are past the point where they will have the impact that we need. Instead, we should be talking about carbon-negative measures. If the Government do not wake up to that very soon, I hope that we can replace them.

[Lord Whitty (Lab)]

My Lords, much has been said already. I agree with the main thrust of the amendment tabled by the noble Baroness, Lady Randerson, which urges the Government to set out a very clear case for the decarbonisation of the various transport sectors. I do not think that we are there yet, and I do not think that the industry feels that we are there yet. It is important, for the reasons that the noble Baroness has just spelled out, that the transport sector knows which way it is going.

I must partially apologise to and reassure the Committee, because some of my speech was intended for the previous group of amendments. As noble Lords were making such commendable progress this afternoon, I did not get here in time to intervene on the amendment on home heating—an issue where, again, some clarity of decision is needed. Home owners and landlords are now faced with decisions on how to replace their gas boilers: they know they need to get rid of their gas boilers, but quite what they are going to get to replace them with is unclear. Of course, people replace their cars, and even their lorries and buses, rather more frequently than their houses and boilers. It is important, therefore, for the transport industry that there is some clarity on the general direction of government policy for the different sectors of transport.

On this topic, we immediately run up against the issue of hydrogen. I am not quite as sceptical as some of my colleagues, but I am sceptical, because hydrogen has been seen as a “get out of jail” card for almost every sector on their decarbonisation trails. That is not only for heavy industry, to replace the very heavily carbon-fuelled industries such as steel, glass and so forth, with its knock-on effect on the construction industry, et cetera, but for parts of the transport sector and for home heating. It has been seen by some as the solution to the decarbonisation of heavy vehicles, shipping, the train system and even aviation. However, hydrogen is not capable of doing that without safety dangers; and, in any case, it is not capable of doing that because we do not yet have the technology for producing green hydrogen at scale. Therefore, it will come in, if at all, only much further down the line. However, waiting for hydrogen—whether in the form of hydrogen blend for home heating or hydrogen-based vehicles or batteries for the transport sector—is seen as an excuse for not taking other technologies more seriously and urgently than we have done.

The amendment tabled by the noble Baroness, Lady Randerson, would require the Government to do that job for the transport sector. I think that they need to do that for other sectors as well, and that they should not exaggerate either the degree to which hydrogen is the solution or, in particular, the closeness of technological breakthroughs to provide genuinely green hydrogen. It is not going to happen in the kind of timescale that we are talking about. Therefore, the amendment has implications beyond transport, but transport itself needs a clear plan. I hope that the Minister will take up with his transport colleagues the need to work urgently, as the noble Baroness’s amendment urges, to ensure that the transport sector knows where it is going, even if nobody else does.

[Baroness Worthington (CB)]

My Lords, I am sorry to speak a second time—I am not sure whether I am allowed—but may I speak to Amendments 130A and 130B? In my excitement I forgot to speak to them. Those amendments in my name seek to address the carbon removals questions in the Bill.

Amendment 130A is to try to interrogate the Government’s amendments to the definitions of carbon removals, as stated in the Climate Change Act. My amendment would reinstate reference to forestry and other physical activities in the UK. I think this amendment is necessary because we do not want to see definitions used in the Climate Change Act, which are foundational to our understanding of what we need to do to tackle climate change domestically, to somehow allow vague processes such as the purchasing of offsets or some other financial instrument to be eligible for the net-zero accounting. I seek reassurances on that. I also seek reassurances that we acknowledge that forestry and land use need to be referenced alongside mechanical sinks to keep the system holistic and inclusive. So I am probing on those two questions: forestry and land use, and making sure we are talking about physical activity and not financial chicanery or accounting trickery.

I feel quite passionate about Amendment 130B. I am sure the UK will emerge as a world leader in this regard. If we are to become the centre of a market or set of policies that are economy-wide in decarbonising our system, we will have to get to grips with the MRV—the monitoring, reporting and verification of carbon removals—to get to a net-zero position. It is hugely important. When you burn a tonne of fossil fuel the impacts are certain and very low in error bars, but when it comes to the biospheric removal of carbon in particular, there are huge uncertainties and an absolute paucity of data. It really has not been looked at comprehensively enough, especially now that large sums of money may be resting on this approach to reaching net zero.

I urge the Minister and the department to really assess what the UK could do to set some gold-standard regulations regarding carbon removals. Let us start the debate with this Bill, pursue it and continue with it. Given that we are at the forefront of reaching these challenging carbon budgets that we have set ourselves, I have no doubt that carbon removals will have a role to play. But let us do it in a world-class way and not use it as a weasel-word excuse for allowing fossil fuels to continue, without the certainty that those removals are genuine, additional and permanent and can offset the almost permanent damage that we know occurs from the release of fossil fuels. It is hugely important that we do this. I tabled this as an opportunity to spark a debate, and I hope we will come back and consider it in more detail. The UK has a great potential role to play in this area.

Energy Prices Bill

Lord Whitty Excerpts

3rd reading
Tuesday 25th October 2022 Lords Chamber

[Lord Teverson (LD)]

My Lords, we on these Benches very much support the Bill, although it might have a few Henry VIII powers and go a little further than it needs to. However, it is clearly absolutely essential for households getting through the winter to come. I very much thank the Minister and the noble Baroness, Lady Bloomfield, for their work from the Government Benches, and all his other officials who have been involved. On our side, I also thank Sarah Pughe from our Whips’ Office. I also thank the Labour Front Bench, and particularly the noble Lord, Lord Lennie, for their co-operation and for the work we have done together. I make one least plea to the Minister, with which I am sure he will agree: it is very important that we manage to deliver the benefits that the Bill gives to those who are off-grid. I know that he and his officials will work hard to ensure that this is the case, although I understand that it will be difficult.

[Lord Whitty (Lab)]

My Lords, while I have no wish to dissent from this unanimity, I think that we are owed an indication from the Minister as to where this fits in with the overall energy policy. We had an Energy Bill before us which is now in limbo and which in part overlaps with the Bill. From the new Secretary of State for BEIS—and indeed from the Minister himself, with the assumption, we hope, that he is still here—we need an early statement on the totality of energy policy, on which this is dealing only with the immediate emergency—profound though it is—facing so many families and businesses. We need to know the totality of the position from the new Administration, so can we have some indication from the Minister as to when we are likely to see that?

[Lord Callanan (Con)]

I am sure that the new BEIS Secretary of State, when he or she is appointed, will wish to convey at the earliest possible opportunity the future of the Energy Bill to the noble Lord.

Energy Bill [HL]

Lord Whitty Excerpts

2nd reading
Tuesday 19th July 2022 Lords Chamber

[Lord Whitty (Lab)]

My Lords, I begin by thanking the Minister for his cogent explanation of the Bill. I also very much appreciate following the very substantial intervention of the noble Lord, Lord Howell, where he really underlined the gravity of the short-term and long-term problems we face. The fact is that this is the first supposedly cross-sector Bill we have had for 10 years and it does not measure up. It follows detailed government statements on energy strategy, energy security and energy efficiency, on hydrogen, and also all the pronouncements on the path to carbon net zero, but the Bill, despite its size and its complexity, frankly, deals with only a small and limited part of those strategies.

It began life, of course, as an energy security Bill, but the “security” has been dropped and it now conveys, as I think the noble Lord, Lord Howell, was suggesting, very little sense of direction on energy security in either the national and global sense of energy self-sufficiency, nor in the domestic sense of affordability and reliability for the British economy, for households and for businesses here. I say to the Minister that, given the pressures on the legislative programme, it might have been better to have a more comprehensive Bill now; otherwise, we will be faced with further Bills in the next couple of years, dealing with the areas which this Bill, broadly speaking, omits. In default of a comprehensive Bill, perhaps he can give us an indication of what additional Bills, in both senses, we are expecting over the next couple of years. What is the programme of statutory instruments and policy statements that will be necessary to deliver the intentions of the Bill and the rest of the Government’s programme?

But let me give the Minister some comfort and say what I broadly approve of in the Bill first. I agree with the concept of a future systems operator and putting it on a new basis. We need some degree of operational controlling mind in the electricity and other markets, and I think this moves us in the right direction. We still need to see how this role is developed and precisely what its operation and structure will be. How will it relate to the existing National Grid functions and to the potentially extended role of Ofgem, which is implied by the Bill but not really spelled out in any great detail?

I also very much welcome the resurrection of a commitment to carbon capture and storage, and the provision for support for that sector. It has been a serious failure over the last 10 years: the failure to endorse the outcome of the first competition in this area and then to completely abandon the second competition in 2015. So, we have not been on the path we should have been. It is clear from what the Climate Change Committee says that we will need to have a very heavy contribution, particularly in the period up to 2035, of carbon capture and storage if we are to get anywhere near the path we have set ourselves in getting to net zero by 2050.

It is true that there has been little progress on carbon capture and storage in the rest of the world as well as here, but we need to make a new start, and the UK is probably one of the best places in the world, in that we are able to store carbon in abandoned oil and gas wells in the North Sea and the Irish Sea. Indeed, if we move away from the original idea of carbon capture and storage—that we would put it on the end of a large emitter or a power station—and look at it at the centre of or serving a hub of industries, then actually the economics work out and probably the complexity is much less. I think the commitment to carbon capture and storage is very important.

I also welcome, to some degree, the support for increased decentralisation through heat networks and district heating. In particular, I welcome the commitment to consumer protection regulations for users of district heating, because although I absolutely buy into the concept of district heating, and it will be part of any future energy system in this country, the fact is that consumers—the households that rely on district heating—are not able to switch or to change provider or in many cases to change the tariff and the way in which they are charged. We need some protection for those consumers built into any increase in district heating.

As to what is not in the Bill, we all know that energy efficiency needs to be in the Bill. I appreciate that the other day in the Moses Room, the Minister introduced some improvements in the ecosystem for delivery of that; they were very minimal, but I welcome them as far as they go. The commitment to energy efficiency needs to be much more structured and widespread, so that it is not all delivered through the ecosystem but is delivered by the kinds of schemes we used to have; the commitment from the Government and government-induced measures to improve energy efficiency has reduced by more than 80% over the last 10 years. That really needs a new approach. Some of the systems that are still in operation in Scotland and Wales would be helpful here.

Two other things need to happen, because we have had two disastrous attempts to introduce energy efficiency programmes for the able-to-pay sector, and we need to have one that actually works and ensures that the owner-occupiers, particularly those who can afford to do so, are attracted to increasing the energy efficiency of their own homes. That also requires an effective household advice scheme. The downgrading of the Energy Saving Trust over the past few years has been unreasonable and it needs to be revived in some sort of form, so that businesses, individual households and landlords can get the best advice on energy efficiency.

The long-term objective of energy policy must be pretty clear: to get away from fossil fuels. Here, I disagree with the noble Lord, Lord Howell, at least in the immediate term. The answer to the dependence on Russian oil and gas is not for Europe, Britain and the United States to switch to other gas and oil suppliers. Frankly, it is a bit sickening to see that the response of Johnson and Biden to get away from the dependency on Russian supplies because of its treatment of Ukraine is to go cap in hand to another dictator in Saudi Arabia, which has been bombing and committing war crimes against its own neighbour, Yemen, for several years.

Nor is the response of the climate sceptics—that we simply reopen North Sea oil and gas or start fracking here—right. The fact is that gas is a world market and the electricity market is still linked to that gas price. Hence, the huge hikes that we have seen in consumer prices here are caused by the world gas situation. We need to reduce global dependence on gas, not enhance it.

We need a system that will divert investment, and hence dependency, away from fossil fuels through lower carbon investment and fuel sources. Part of this legislation helps that, and part will help the transition. But I return to the carbon capture and storage provision because the large-scale carbon users, particularly those which supply the building industry with steel, glass, cement and so forth, are not going to get away from carbon use in production very easily or rapidly. We therefore need a proper system of carbon capture and storage, of the sort now being advocated.

That requires a change in approach, one which will encourage investment in that sector. The Government are now committed to it. One of the major propositions of this Bill is to support it, but the Minister will probably recognise that in order for that to happen and be delivered in practice, a support system is required similar to the one we gave to offshore wind after the last major energy Bill. We need a development programme, a clear timetable and a clear indication of the regulations and statutory instruments required to enforce the legislation which will be applied to carbon capture and storage.

I was at a very useful briefing the other day from the Carbon Capture and Storage Association. Its chair was there: my noble friend Lady Liddell. She would be here were it not for the heat of the day preventing safe transport from Scotland, and she would undoubtedly be participating in this debate. We are a point where we can turn around a failure to implement carbon capture and storage over the last 15 years. There is interest out there, nationally and internationally, and we need to ensure that we deliver that. That will require more than the bald provisions of the Bill and a follow-up from the Minister’s department to ensure it gets properly developed.

There are a few short paragraphs on hydrogen in the Bill. One of the difficulties with hydrogen is that it is touted as the solution to almost every sector’s problem —heavy transport, heavy industry, domestic heating—yet we do not yet have the ability to produce green hydrogen without serious problems. The Government have, of course, produced a hydrogen strategy but it gives rise to a number of questions that still have to be fully addressed.

I support many of the senses of direction of this Bill, but a lot more will be needed to deliver the outcomes the Government want. Here we are today on the hottest day of the year, with the temperature increase being the opposite of what we normally talk about, and which is required to transform the heating of homes in this country. We also need air cooling in our buildings and homes, and the technology exists to do that. To meet those kinds of challenges we need a very strong sense of direction from the Government. While the Bill goes some way in that direction, I fear that there will be many other Bills and we will require many other statutory instruments and policy statements from the Minister before the direction is properly set.

Electricity and Gas (Energy Company Obligation) Order 2022

Lord Whitty Excerpts

Tuesday 12th July 2022 Grand Committee

[Baroness McIntosh of Pickering (Con)]

My Lords, I thank my noble friend for bringing forward the order. I understand that there has been quite a delay, as the legislation was due to have legal effect on 1 April. I wonder why there was a delay, but I am delighted to see the order before us this afternoon. I remind the Committee of my interest as president of National Energy Action, which briefed me in advance.

First, I welcome the fact that the spending envelope is going to be much greater than previously. I understand that it has been increased from £660 million to £1 billion a year, which is quite a sizeable increase and makes the scheme much more ambitious. As my noble friend said, it is a fabric-first, multi-measure approach to upgrading homes. The scheme is better targeted and allows local authority suppliers and others to qualify households into it. I regret that, as I understand it, during the delay from 1 April until when this finally comes into effect—my noble friend can tell us when exactly—25,000 households could have benefited, so it is important that we get the statute adopted as soon as possible.

I would like to raise a couple of concerns. The practice of allowing households to make financial contributions towards the measures continues but, if a household is in extreme fuel poverty, how is it expected to find the resources to contribute, given that we are soon to be living in the worst fuel poverty that I can remember? I pay tribute to Martin Lewis, who I think has done consumers and households a great service generally in guiding people towards the schemes and explaining how all of us can save money as October approaches. Perhaps this is not the best day to be discussing this, given the temperatures today.

I would like to clarify why the scheme does not set an adequate minimum of solid wall properties to be treated. I wonder if there was a particular reason for this. The figures that I have are that over 90% homes with solid walls still need to be insulated to meet fuel poverty commitments, at the same time as delivering net zero. We are probably talking about a million fuel- poor households living in solid wall properties with no insulation—some of the worst-insulated houses not just in Britain but probably in the northern hemisphere.

There is a gap in the provision of energy advice that perhaps has not been met by the scheme. How does my noble friend expect to reach the fuel poverty targets at the same time as delivering net zero if we do not have a more comprehensive network of advice provision? While the proposed defined roles of retrofit adviser, retrofit assessor and retrofit co-ordinator will ensure that households are advised initially of the options, we need to ensure that homes are assessed properly and that there is a proper plan for improvement and evaluation. Is there a case that the advice should go further and include information on other available energy schemes and support?

At the moment, it is not entirely clear whether advice is accessible. I seek assurances from my noble friend that any information comes in multiple formats, because not everyone has access to the internet, not everyone has English as a first language, and there are obviously a variety of disabilities to deal with.

With those few concerns, which I hope my noble friend will address, I give a warm welcome to the instrument before us.

[Lord Whitty (Lab)]

My Lords, the noble Baroness, Lady McIntosh, has anticipated me, which is completely understandable since I am a vice-president of the same organisation, but I would like to put this in a slightly broader context.

The other day, when we were having an exchange at Questions, the Minister admonished me for apparently disparaging the ECO scheme. My point is not that the scheme is not desirable. It is a means of delivery that has proved its worth in certain respects. Certainly, the energy companies have now developed systems that identify where they could intervene with their own customers. However, inevitably, by relying entirely on the ECO scheme to deliver energy efficiency provisions, people get missed out. I have always argued that putting the responsibility on the companies as the main means of delivery means that there will always be gaps, because the companies will prioritise in relation to their own consumers. What we really need, have needed for some time and, in the current circumstances, need even more is a scheme that helps absolutely everybody who is fuel poor or likely to be made fuel poor, of which there are now more because of the current energy crisis.

Energy efficiency measures meet a lot of the Government’s and the country’s objectives of saving energy, moving away from fossil fuels, working towards net-zero targets, and off-setting the energy dimension of the cost of living crisis. We therefore need to strengthen them. I assure the Minister that I approve of the direction in which these regulations move, because they broaden the way you can bring people in. They increase the schemes and the comprehensiveness by looking at multi-measures in a way that past interventions frequently have not. This means that schemes can be addressed that do not rely on mini-interventions but look at the total fabric of the house and the systems by which it is currently heated. The detailed measures on the upgrading of the ratings are also important, and the broadening of the people who can refer into the scheme, particularly via the health service dimension, is also much to be welcomed.

As the noble Baroness said, there are some gaps. The biggest, which is not a gap but an inadequacy, is the failure to set a really strong target for solid wall insulation. The danger is that we do not have the companies and contractors to do that, because the regulations do not imply sufficient jobs and there is not the training for installers that is needed to deliver the aspirations. In terms of where we are on home energy efficiency, that is probably the biggest single inadequacy of delivery so far and it needs to be addressed.

I echo the noble Baroness’s point about advice, because a lot of the fuel poor, or those who are increasingly in danger of becoming fuel poor, do not have adequate advice in this area. The kind of advice they need overlaps with the advice needed by people in the hitherto so-called “able to pay” category. The failure of the successive schemes to deliver effective support for the “able to pay” sector really underlines the need to upgrade the whole of the advice in this area. The information is still inadequate and difficult to access for both the fuel poor and those who perhaps can still make a contribution themselves, and in some cases pay for the whole lot themselves.

In general, I think this order is in the right direction for the delivery of the ECO scheme but needs to be put into a broader context. That broader context becomes more difficult, because in the next few years we are about to decide what the main form of home heating in this country will be. Individual householders and landlords have to face decisions on insultation, whatever the form of heating. It is not yet clear whether we will still have something approaching the gas network or whether gas will be replaced by a hydrogen blend or by hydrogen. The number of properties is not clear. Many properties do not qualify or are not appropriate for heat pumps in their present form. There will be some difficult decisions on how they address that. Most households would prefer to know what the totality of their movement is, whether they are fuel poor or in the “able to pay” sector. They would like to know that they can perhaps insulate up front and then change to a different form of heating, or at least that they will not have to change everything in their house twice and that, whether they go under the ECO or a scheme where they pay themselves, they will not then have to adapt all their appliances and network again in two, three, four or five years because we have changed the form of heating.

We need a more strategic approach to this, but I assure the Minister that, as far as it goes, I am in favour of what he is proposing to us today.

[Lord Grantchester (Lab)]

I thank the Minister for introducing this order and for writing to draw my attention to it, especially to how it is lowering consumer bills. The ECO scheme has been among the favourites for Conservative Governments to target. It is certainly to be encouraged that they focus on energy efficiency measures to upgrade homes and on targeted support, thus reducing heating costs for low-income and vulnerable households and those at risk of fuel poverty across Great Britain, but not Northern Ireland.

Although it is true that the number of homes with a band C EPC increased to 46% in 2021, it cannot be claimed that that was all due to the ECO scheme. Nevertheless, it is part of a flurry of measures, this one supporting 450,000 homes to be able to save on average £290 a year.

In his letter, the Minister wrote that savings in the least energy-efficient homes could average £600 this winter, which would be wonderful. Can he explain this figure? How many households would be in this number, and how many would reach that magical threshold of band C? Would this alarm many households, in that they might now become liable to higher bands of council tax?

One of the intricacies of ECO3 was that households switching from larger to smaller suppliers to save on their bills could take themselves to companies below the threshold and thus be outwith the obligation for improvement measures. Many of these customers have now found themselves with bankrupt companies. Under SoLR, on which I have questioned the Minister previously, they will have been redistributed to larger suppliers within the obligation. Can the Minister explain the effect of ECO4 on this? Will the threshold be a cliff edge or a reducing threshold while maintaining worthwhile energy efficiency measures?

One of the consequences of reducing thresholds was that energy companies found it cheaper to pay a resulting fine than to offer ECO schemes. Could any increased penalty be liable to push a vulnerable company into bankruptcy and all the consequences of SoLR? With the scheme continuing with household contributions, will energy companies target only those who can make a contribution and ignore those with the lowest incomes?

Winter Heating Initiatives

Lord Whitty Excerpts

Thursday 7th July 2022 Lords Chamber

[Lord Callanan (Con)]

I will certainly pass my noble friend’s thoughts on to whoever occupies those great offices in the Treasury in the next few weeks. Regarding his first point, we want to ensure that any reductions in international energy prices are passed on to consumers as quickly as possible.

[Lord Whitty (Lab)]

Does the Minister accept that fuel-poor households will seriously suffer not just during the coming winter but, given the way that the energy market is going, in subsequent winters? Do the Government accept that, in order to deal with the problem of fuel poverty, they need to knock the heads of the energy companies together and introduce proper, targeted social tariffs, and to reintroduce a comprehensive insulation programme that does not depend solely on the rather haphazard procedures under the ECO scheme? That needs to be done as a matter of urgency, in line with the rest of the energy strategy.

[Lord Callanan (Con)]

I am sorry that the noble Lord is so down on the ECO scheme. It is a good programme and, as he is probably aware, we are expanding it to £1 billion a year. It is not the only energy-efficiency scheme we have: there is the home upgrade grant, the local authority delivery scheme and the social housing decarbonisation fund, which is about to launch bids for another £800 million of grants to local authorities and housing associations.

Strikes: Cover by Agency Workers

Lord Whitty Excerpts

Tuesday 5th July 2022 Lords Chamber

[Lord Callanan (Con)]

If the view of the modern Labour Party is that capping prices is effective in a modern industrialised market economy then I truly despair.

[Lord Whitty (Lab)]

My Lords, do the Government actually believe that there is a right to strike? In the railways dispute and in the potential disputes for airline staff, the votes were overwhelmingly in support of strike action and these strikes are absolutely legal, yet the Government seek to use secondary legislation to completely undermine the trade unions. Has Jacob Rees-Mogg convinced the Tory party that we should go back to the 18th century Combination Acts?

[Lord Callanan (Con)]

The answer to the noble Lord’s question is yes.