Great British Energy Bill

Lord Whitty Excerpts

Committee stage
Tuesday 17th December 2024 Lords Chamber

[Lord Whitty (Lab)]

My Lords, I have a short but crucial amendment in this group—Amendment 51A—which deals with the key issue of employment. It rather shocked me when I checked the wording of the Bill that the words “employment”, “skills” “training”, “retraining”, “upgrading” or even “fair transition” are not mentioned in it. At one of his briefing meetings, I asked my noble friend the Minister for a clear chart of the various bodies we are now envisaging having influence on energy policy—NESO, Ofgem and now Great British Energy and Great British Nuclear. None of them have as a central mission to provide the new and upskilled workforce that will be needed to deliver both the grid and the new forms of energy which will take us to clean energy by 2030 or 2035.

I also looked through the previous Act of the last government—the Energy Act 2023—which is 473 pages long. It provides much of the body of approach to energy policy which the new Government have largely adopted. From a rough-and-ready word check, I do not think that the words “employment”, “skills” and “new skills” appear in that either.

If we are to deliver a clean energy system, from generation to delivery, and energy efficiency in our homes, offices and buildings, as well as a transformation of our industry and transport, we will need a much more skilled, or differently skilled, workforce than the one we have at the moment. That requires somebody to take responsibility for that. None of the bodies has that as one of its central tasks. That needs to be remedied before this Bill disappears from this House.

We need to ensure that those currently employed in sectors of energy which will reduce in gas and oil have a high level of skills which will be relatively easily transformed into skills delivering the new clean energy—or those further down the line delivering home efficiency and other forms. We do not have that in the energy policy. It is mentioned in passing in one of the White Papers, but it is nowhere in proposed legislation. This amendment would at least put it in the statement of priorities required to be issued by NESO early in the transition. It will need following up; it will need more than that. It will need substantial intervention, provision of retraining, apprenticeships and skills, and redefinition of jobs if we are to achieve the timescale and trajectory to net zero that we are envisaging.

This amendment, which is supported by the TUC, would put a marker down that we need to address this issue. Without a transformation and extension of the workforce, we will not deliver the full energy system in anything like the timescale currently envisaged. Can my noble friend the Minister ensure that the Government come back with some way of reflecting in this Bill that employment and the transformation of employment are an important priority, as is assigning responsibility for them to one of the many bodies now in this arena? It may not be regarded by many as central to this Bill, but it is central to the delivery of the outcome. I put down this simple amendment at this point, and I will return to it at a later stage.

[Baroness McIntosh of Pickering (Con)]

My Lords, there are a number of interesting and thought-provoking amendments in this group. I am delighted to follow the noble Lord, Lord Whitty, in speaking to his. I will speak to my Amendment 55 and ask the Minister to respond on a number of issues when he winds up on this group.

I felt that this amendment was necessary to probe the thinking of the Government. Clause 5(7), on strategic priorities and plans, says:

“The duties to consult imposed by subsections (4) to (6) may be satisfied by consultation carried out before this Act comes into force”.


What is the timetable for those consultations? Can the Minister assure the Committee that they will be meaningful and last, as in the terms of my Amendment 55, for the usual 12 weeks—ideally not covering the summer or Christmas holidays, which is so often the case? Will they be meaningful and be over a 12-week period, and will they consult farmers, fishermen and local communities?

Why are those three groups important? With farmers, as the Minister knows because we debated this in Questions and earlier in Committee, the Government are minded to take over highly productive land—often grade 2 or 3 land—for solar farms. In preparing for today, I have been issued information from David Rogers, an emeritus professor of ecology at the Department of Zoology at the University of Oxford. He is not personally known to me, but he has some very good figures.

I think the Government are underestimating, as of today, the amount of agricultural land that will be taken out of useful production. Let us look at the five most affected constituencies. In Newark, it is a land take of 7.9%. In Rayleigh and Wickford—I declare that I represented Rayleigh many years ago in the European Parliament—4.9% would be taken out of production. Sleaford and North Hykeham will have a reduction of 4.62%. In Newport East, the figure will be 4.6%, and Bicester and Woodstock will see 3.96% out of production.

We have to have a very grown-up debate about what the land use framework will be. I do not think that it will be published before this Bill passes, but I pay tribute to the work of the noble Baroness, Lady Young, in this regard. She has put an inordinate amount of work into this. There will be other opportunities to discuss the impact on farming. I hope the Minister will give us an assurance today that farmers will be included in the consultation and say what form the consultation will take.

I turn now to fishers and the spatial squeeze they face. The National Federation of Fishermen’s Organisations provided a briefing, at my request. It is the first to understand that fishers must share the sea, and if other industries expand so much that fishing is squeezed out of its traditional grounds, they obviously do not want to see the industry collapse. In the NFFO’s view, it is a mistake that when a new wind power station is built or protected areas are designated, the fishers who previously worked there are deemed simply to go and fish somewhere else; that is often not the case. Fish can be caught only in the places where they live and breed. They have been caught commercially in UK waters for centuries, and the areas where they feed, migrate and breed are well known, so expecting displaced fishing efforts to simply resume somewhere else entirely misses the point.

In the NFFO’s view, there is an absolute need for a strategic approach. The UK’s needs for food, energy, communication, transportation, waste disposal and recreation all intersect at sea, and the interests of fishers —and, in fact, of all users—can be met only with a strategic approach to using the marine space. How will the Government use the consultation to ensure that that is achieved, and that fishers’ voices will be heard when such a plan is developed, to ensure their future?

I turn to the work we did on the EU Environment Sub-Committee, chaired by the noble Lord, Lord Teverson. We took evidence on the environmental impacts of these developments, particularly offshore wind farms and their future replacements, on marine life and the future of the fishers. The NFFO views with increasing concern the environmental impacts of such vast industrial developments in the sea. It makes a plea that, as we go forward, any strategic overview will be consulted on. A ban on fishing is obviously not an option, in its view. We hope that fishing will not be automatically damaged through any development of the marine environment, but that common ground will be found, so to speak, in any consultations on developing strategic priorities and plans within the remit of Clause 5.

I turn finally to local communities. It is regrettable that in the past, planning permission has been granted separately for offshore and onshore wind farms, because then, a separate planning application takes place, particularly for offshore windfarms, wherever the energy reaches the shore. That poses all sorts of problems that really came to life during the general election. Perhaps it is no surprise that we have a Green Member of Parliament for part of the Suffolk coast, because if you are going to have a large substation created separately from the original planning application for the offshore windfarm, that poses problems for the Government—whichever Government it happens to be.

Also, there is alarm that the Government are planning to take back control, so to speak, of planning decisions. Under the proposals the Government envisage, we are taking the decision away from local communities— I pay tribute to all who have served and who continue to serve as local council representatives—and giving it to the Secretary of State. That is wrong, because local communities should be asked to decide where these electricity substation superstructures will be placed and, just as woefully, where the overhead pylons will be placed. I still bear the scars, as the then newly elected Member for the Vale of York, from when we were deemed to take an additional, second overhead line of pylons. This does not go down well with local communities.

I hope the Minister will look kindly on the points I have made and listen to the voices of the farmers, fishermen and local communities as the Government proceed to develop their strategic priorities and plans.

--- Later in debate ---

Tabled by

[Lord Whitty]

51A: Clause 5, page 3, line 8, at end insert—
“(1A) The statement of strategic priorities under subsection (1) must further the goals of a fair transition for energy workers and the creation of quality energy sector jobs.”

--- Later in debate ---

[Lord Whitty (Lab)]

I advise my noble friend that, while I will not move Amendment 51A now, I will return to this subject, because I do not consider that we have dealt properly with the transformation of the workforce to deliver the net-zero targets.

Amendment 51A not moved.

EV Strategy: (ECC Committee Report)

Lord Whitty Excerpts

Wednesday 16th October 2024 Lords Chamber

[Lord Whitty (Lab)]

My Lords, I will try not to repeat too much, but I repeat noble Lords’ words of appreciation to the noble Baroness, Lady Parminter, for her introduction to this debate and her chairing of the committee’s report. It was a truly remarkable effort. I couple with that my praise to the committee for making a coherent, if not universally supported, report; and I praise the staff for making sense of such a vast area of different expertise.

There are multiple markets in this area: the company car market, which differs from the private car market; the used car market; the leased market; and the commercial vehicle market. They are all different markets but, actually, the issues involved here are much wider than that. Surface transport, and road transport within that, makes a big contribution to our carbon emissions. Unless we resolve that, we are not going to be anywhere near our targets for the transition to net zero. The Minister who is about to reply is from the net zero department and therefore has a considerable strategic interest in this issue but, of course, other departments— the Department for Transport and His Majesty’s Treasury—are going to make the key decisions here.

The range of topics which impinge on this go from what you can do with a lamp-post outside your house to what are effectively geopolitical issues—namely, what form of trade we will encourage with China, with the transfer of technology and therefore the cost, and possible production here, of what are in China relatively cheap electric vehicles.

The timescale for the last propulsion switch in transport modes, from reliance on horsepower to the internal combustion engine, was about 40 or 50 years; we are attempting to make a very dramatic change in six years. That requires very real focus by the new Government on all aspects in all departments, and I join in the call for a Statement from them at an early stage on how they will deliver this key part of our net-zero ambition. Incidentally, in terms of timescale, roughly 120 years ago the main means of propulsion may have been electric. The world speed record was held in the 1890s by an electric car. Unfortunately, we took the wrong decision at that point, and the consequences are still with us. We must address all aspects of the road system, the traffic system and the taxation system, to get this delivered.

I agree with my noble friend Lady Young on the need for misinformation to be countered by the Government as well as the advertising industry. That is very important. There has been a lot of misinformation in this area. Regarding the point made by the noble Lord, Lord Lilley, I do not disagree that the subsidies and encouragement have been misplaced. Where I do disagree is that you can avoid a significant degree of taxation, manipulation or subsidy to meet our objectives. The big misapplication has been, as he says, that the main subsidy in recent years has been to the company sector. That has a double problem: it means that the pre-existing subsidies to the private sector and individual owners of cars has been dropped, and those need to be restored.

However, the bigger effect is the recent slowdown in the move to electric vehicles, which has been completely dominated by the fleet schemes and affects both ends. Within the companies, those who switched to electric vehicles for their fleets four, five or six years ago are now trying to sell them off on the second-hand market, but the cars are too big and too expensive for the second-hand market, and not the kinds of cars which most car-owning households want. As a result, the price that the companies get for second-hand cars is not what was forecast, and they are therefore slowing down the take-up even of fleet cars at this point.

Therefore, we need action on both fronts. We need to focus largely on the markets in which individual car owners operate. This includes second-hand and upfront costs of new cars, because there is a virtual equalisation of a total lifetime cost already while the upfront cost is still deeply prohibitive for a lot of potential owners. We need to change the economics for the fleet cars so that they produce smaller fleets and therefore solve their problem in five or six years’ time of producing cars in the second-hand market which they can sell at a price that most car owners will be prepared to pay. To switch the subsidy and the tax incentive while at the same time addressing all the different markets that are involved is quite a complex thing to do.

On top of that, we have the problem of disincentives. The biggest disincentive to buying an electric car has been anxieties about range. Those are gradually diminishing, but the fact remains that the number of charge points available to that 40% or so of the population who cannot connect their car to a charge point from their own home means that there is a social division among people who can afford electric cars, over and above the price differential. It means that the cost of running an electric car for those people who live in flats or terraced houses, or any kind of house that fronts straight on to the street, is substantial. The taxation differential aggravates that.

There are a lot of things that need addressing. Some are being addressed, but most, as yet, frankly, are not. We are behind even the targets we set ourselves for motorway stations, so those who use their car for work and transport are faced with higher prices than those using them for pleasure or for short-term purposes. All these things can be addressed, but they need to be addressed across government pretty rapidly. I would like to hear from the Minister how, and over what timescale, we will see progress on this front.

There are three things we decided not to tackle, but which we will need to tackle. They are not in the report, but I hope that some of them are at least in the new Government’s strategy.

The first is the question of hybrids, and I declare an interest as a hybrid owner. The previous Government more or less said—and I think this is the general view—that hybrids will be phased out, and that they are, in effect, a dead-end technology. Yet people who bought hybrids hoped, by and large, to contribute towards saving carbon. They at least need to have some way of transferring into the full electric mode within the next few years.

Secondly, we need investment in manufacturing, as my noble friend Lord Woodley said. I disagree with his analysis of where the money should go, but I do not disagree with him that we need a strategy for UK-based production. We also need a strategy for battery production. We need more than a strategy; we need to recognise that battery production will have to become more sophisticated and that we will have to address in that same context, both in the UK and worldwide, the whole question of scarce mineral resources, the availability of lithium in particular, and the Chinese control of large parts of the lithium supply chain.

Finally, we will have to face the fact of how we change motor taxation, as Norway already has as the most successful adopter of new electric vehicles. The switch to EVs, with the failure to raise fuel duty, has meant that the Treasury’s income from motor transport has diminished and will diminish even more drastically. At some point, the Government will have to face the issue of how we tax road transport in future. It might well be that the issue of road mileage taxation comes back on to the agenda.

I remember, some 25 years ago, as a Minister in the Ministry of Transport, we produced a worked-out plan for a partial mileage taxation. I was quite convinced by this and went to see my old boss, John Prescott. He said, “Don’t be so bloody stupid”. I understand the politics of it, but it is no longer stupid. We need to ensure that we have a basis for motor taxation that meets the needs of making a major contribution towards reducing our carbon emissions. That requires a new and imaginative approach to road taxation.

Hydrogen Energy

Lord Whitty Excerpts

Tuesday 14th May 2024 Lords Chamber

[Lord Whitty (Lab)]

My Lords, in previous Questions the Minister and the Government have indicated that all strategic decisions on the use of hydrogen will be taken in 2026. Clearly, the decision on home heating has already been taken. Does the Minister intend to bring forward decisions on the strategic use of hydrogen in industrial and transport applications? If not, are we going to wait another couple of years and have things dribbled out, rather than take a strategic approach to the use of hydrogen, which the Government previously implied would be there in 2026?

[Lord Callanan (Con)]

I am sorry if I have given the noble Lord the wrong impression. We have already taken strategic decisions on the use of hydrogen. We are supporting the production of both electrolytic green and CCUS-enabled blue hydrogen. We are already rolling out the business models for the delivery of commercial-scale use of hydrogen, and we are one of the leading nations in Europe on doing that. The decision in 2026 would be on whether hydrogen has a role in domestic heating. The noble Lord is getting the issues confused.

Home Insulation

Lord Whitty Excerpts

Tuesday 14th May 2024 Lords Chamber

[Lord Callanan (Con)]

I do not quite understand the noble Lord’s question. We will clearly use more electricity as we roll out more electric vehicles, the electrification of heating, et cetera—but we will use it in different ways. There are ways, for instance, in which we can do load spreading. One of the advantages of smart meters is that they allow people to consume electricity at different times and take advantage of different time-of-use tariffs, et cetera. So, as well as having particular peaks, we can also spread out those peaks over longer times of the day. There is a lot of demand management we can do, as well as increasing the amount of renewables we have on the grid, which we are doing.

[Lord Whitty (Lab)]

Further to the point made by the noble Lord, Lord Teverson, is the Minister at all confident that the standards for insulation are being met for all new build? Likewise, is he confident that they are being met where planning permission provides for refit? Because anecdotal evidence suggests that both are very low in achievement.

[Lord Callanan (Con)]

I think that the noble Lord is talking about the building regulations under future homes standard, which is what I was referring in response to the question from the noble Lord, Lord Teverson. They are responsibilities of DLUHC. I am not aware of any evidence that the standards are not being met —clearly, it is the responsibility of local councils to ensure that the building regulations are adhered to—but I am sure that we would be interested in any evidence that the noble Lord has that the regulations are not being adhered to.

Home Insulation: Health and Mortality Rates

Lord Whitty Excerpts

Tuesday 19th March 2024 Lords Chamber

[Lord Callanan (Con)]

No, I do not accept that. There has not been a rota of schemes. The most successful scheme, the ECO scheme, has been going since the early part of the previous decade and we have committed funding for a number of years to come. The more successful schemes, such as the social housing decarbonisation fund and others, are also multi-year programmes precisely to provide the long-term certainty to industry that so many contractors say they desire. We have already announced the funding for 2025-28—another £6 billion—and we have set out the schemes on which it will be spent. So, no, I am afraid I do not accept the noble Baroness’s analysis.

[Lord Whitty (Lab)]

My Lords, 20 years ago, when I had some responsibility for the insulation programme, health issues were just as important, if not more so, than fuel poverty as such, or climate change. I made some attempt to get the Department of Health to recognise the preventive nature of this programme. I failed totally, but would the Minister care to comment on his ability to persuade the current Department of Health that a preventive insulation programme is very much in its interests and the long-term interests of the health service?

[Lord Callanan (Con)]

I have not had any discussions with the Department of Health on this. I am not sure of my ability to persuade it of anything, but I would have thought it relatively self-evident that spending money on insulation schemes saves people money and has long-term health benefits. I do not think we need any studies to show us that.

Advanced Modular Reactors: Criticality Tests

Lord Whitty Excerpts

Tuesday 19th March 2024 Lords Chamber

[Lord Callanan (Con)]

Of course it is not disregarded. The safety of the UK’s nuclear programme—the disposal of waste nuclear fuels, et cetera—is one of our highest priorities. We have an excellent record when it comes to nuclear in this country.

[Lord Whitty (Lab)]

My Lords, while we are on nuclear, what do the Government make of the reports last week of a major breakthrough in fusion technology, and what support are they giving to British technology in this field?

[Lord Callanan (Con)]

There is indeed lots of exciting talk and articles about developments in fusion, and there are a number of British companies at the forefront of that—we are supporting them. The note of caution I give is that fusion has been the coming technology for about the last 30 years; every year it is 10 years away. To not be cynical about it, there are some great breakthroughs and we are now finally getting more energy out of the system than we put into it, which is very encouraging. But it is a long way away yet.

Limiting Global Temperature Increase

Lord Whitty Excerpts

Wednesday 13th December 2023 Lords Chamber

Asked by

[Lord Whitty]

To ask His Majesty’s Government whether (1) the position of the OPEC states, and (2) the lobbying of fossil fuel companies, at the Dubai COP 28 have made it more difficult to achieve the goal of limiting global temperature increase by 2050 to 1.5 degrees Celsius above pre-industrial levels.

[The Parliamentary Under-Secretary of State, Department for Energy Security and Net Zero (Lord Callanan) (Con)]

My Lords, the UK Government do not comment on the positions of different groups and countries. The UK worked tirelessly with all parties to push for an ambitious outcome at COP 28 that keeps 1.5 degrees within reach, and we welcome the deal reached this morning, which is the first time that there has been a global agreement to transition away from fossil fuels. It maintains the Paris Agreement to limit global warming to 1.5 degrees centigrade.

[Lord Whitty (Lab)]

My Lords, I join with the Minister in accepting that the current draft is a darn sight better than the dreadful draft presented two days ago, but it is still, sadly, deficient. In the run-up to the COP, we not only saw the petrostates and fossil-fuel companies trying to derail any reference to fossil fuels in the agreement; we also saw the IPCC and the scientists warning us that we were well off the Paris trajectory towards 1.5 degrees, to which we are all supposed to be signed up. Perhaps we also ought to acknowledge that any improvement due to the UK Government’s intervention was down to our own Minister, the noble Lord, Lord Benyon, with the actual leader of the British delegation being called back from saving the world to saving the Prime Minister. Is not this Government’s moral authority to persuade smaller, more vulnerable and poorer nations to adopt a net-zero policy sadly undermined by our continued licensing of oil and gas extraction in the North Sea and other retreats from our green policies? Can the Minister give us a date for abandoning those polices?

[Lord Callanan (Con)]

There was a whole series of questions in the noble Lord’s statement. This was an international agreement, involving almost 200 countries. Is it perfect? Is it everything we would have wanted? No, but it is certainly a great achievement by our extremely hard-working negotiating team. I do not agree with the noble Lord on the second part of his question about licensing and increased production in the North Sea. Even if they come on stream, the output in the North Sea will still continue to decline and we are still committed to phasing out oil and gas production.

Hydrogen Heating

Lord Whitty Excerpts

Monday 11th December 2023 Lords Chamber

[Lord Callanan (Con)]

There is a long and detailed answer to that, but there are a number of different elements to it. We will be consulting very shortly on the future homes standards, which will take advantage of new technology in terms of setting standards for all new developments. Clearly, there is a big challenge with existing, particularly residential, properties. I have said that heat pumps and heat networks will play the majority role in decarbonisation efforts. There could also be a role for renewable heating fuels, where there are some exciting developments.

[Lord Whitty (Lab)]

My Lords, given the growing case against using hydrogen as the main source of domestic and office heating, are the Minister or Ofgem about to stop supplier companies offering so-called “hydrogen-ready” boilers to those who need a boiler replacement? Is the Minister any further ahead on the kind of technology that is going to be used for district heating schemes?

[Lord Callanan (Con)]

I think the CMA is looking into some of the claims. Chancellor, it is a complicated area, because you can blend hydrogen into the existing gas network and that will work perfectly satisfactorily with all existing gas appliances. In that respect, all appliances are hydrogen-ready. But I am sure Ofgem will want to look at the full implications of that as well.

Energy Bill [HL]

Lord Whitty Excerpts

Report stage
Monday 17th April 2023 Lords Chamber

I will also speak to Amendment 138 in this group, which seeks to rename under statute the Oil and Gas Authority as the North Sea Transition Authority, which we already know. I could be accused of being desperate to finally find an amendment that the Government will agree to. This one is so totally obvious that I wonder whether the Minister might actually be tempted to agree to it. I beg to move.

[Lord Whitty (Lab)]

My Lords, I have a small amendment in this group—Amendment 68—which deals with electricity storage. This very comprehensive Bill looks a bit different from the one that we first saw, and I am not absolutely confident that I have inwardly absorbed the implication of every government amendment that we have had in the last few months. But I am pretty sure that one dimension of investment in the system that has not been fully spelled out is that of electricity storage.

We have obviously dealt with it as a way of subsidising and encouraging investment in generation and there are big changes which are welcome, by and large, in relation to carbon capture and storage, and slightly more controversial in relation to hydrogen. But one of the key things about the new system—which will be much more decentralised than previously and dependent on different forms of generated electricity—is that we need some real investment in electricity storage. We need it partly because those who have always opposed some renewables stress that they are variable and there is occasional intermittence. That will happen, but investment in pipes, pylons and wires may not be sufficient to avoid some faults and breakdowns in the system.

We need to be able to call on electricity which is stored in some form to ensure that supplies are continuous. I am not sure why this has not appeared in the strategy. It needs to be somewhere. I attended part of a seminar over at the Institution of Mechanical Engineers a few weeks ago which explained the different technologies that exist for electricity storage. There are obviously some old-fashioned ones such as hydroelectric power, where you keep the water back, but there are many new technologies that could be developed for a significant investment in electricity storage. The common assumption is that it will be batteries in some form or another, but batteries in themselves raise considerable problems. In particular, a significant installation would involve problems of maintenance and of the critical materials needed for large-scale battery storage.

There is the possibility of storage in hydrogen—and that may raise other problems with hydrogen—and there is storage in ammonia and storage in compressed air. Any of these technologies need to be pursued, but we do need some system of storage. The least I would hope for from the Minister today is an acceptance that part of the strategy will be to ensure that we have cutting-edge technology in electricity storage, and an indication of how that will be financed, what the government incentives are and what the regulatory structure will be. If the Government can give me that general assurance, I will be happy.

[Lord Ravensdale (CB)]

My Lords, I declare my interest as a project director and engineer working for Atkins in the nuclear industry. I also chair the cross-party group Legislators for Nuclear.

In Committee, my previous amendments in this area—they were originally put forward by the noble Baroness, Lady Neville-Rolfe, before she joined the Front Bench—aimed to define nuclear as taxonomy-aligned within the UK’s green taxonomy. Naturally, I was delighted to see the Government commit to this in the Spring Budget, pending a consultation,. I shall speak briefly to my resulting Amendment 137.

Following the green taxonomy announcement and progress on the renewable transport fuel obligation, there remains one glaring aberration in the treatment of nuclear in the Government’s financing frameworks: the current exclusion of nuclear from the UK green financing framework, which describes how the UK Government plan to finance expenditures through the issuance of green gilts and the retail green savings bonds. Now that nuclear is due to be specified as taxonomy-aligned, I am sure that the Minister would agree, for consistency if nothing else, that it should also now be eligible under the green financing framework. This would have many benefits in ensuring the availability of vital extra funding for nuclear projects to enable the decarbonisation of our energy system.

I would be grateful if, in summing up, the Minister could state when the Government intend to address this issue.

--- Later in debate ---

Tabled by

[Lord Whitty]

68: Clause 164, page 134, line 4, at end insert—
“(A1) Within six months of the day on which this Act is passed the Secretary of State must place before each House of Parliament a strategy for a significant increase in the provision of electricity storage facilities to enhance the resilience and flexibility of electricity supply.(B1) This strategy must cover all forms of electricity storage, including battery, hydrogen, ammonia, adiabatic compressed air energy storage systems, and hydroelectric storage; and cover potential licensing, planning, regulation, subsidy and taxation considerations.”Member’s explanatory statement
A future electricity network based largely on renewable sources of generation will require significantly increased storage capacity – which could be based on multiple technologies and is likely to require some form of government support in its development. This amendment would ensure that this dimension is considered and reported to parliament.

[Lord Whitty (Lab)]

My Lords, I beg to move Amendment 68, and if my voice holds out I will also speak to Amendment 74. I appreciate that the Bill is primarily about the system, the capital investment and the totality of the supply of electricity, but, as the Minister recognised in his reply to the first group, the issues among the public are, “How much does it cost?”, “What effect does this have on my standard of living?”, and, in particular for the more vulnerable consumers, “Can I afford to keep my family and my house warm?”. There is no mention of any new initiatives in the Bill.

[The Deputy Speaker (Lord Russell of Liverpool) (CB)]

My Lords, I think the noble Lord may think that he is on the following group of amendments; this is the amendment in the previous group that I suspect he did not want to move. He is perhaps a touch premature.

[Lord Whitty (Lab)]

Oh! My apologies to the House and to the Deputy Speaker. I will return to the subject.

Amendment 68 not moved.

Moved by

[Lord Whitty]

69: After Clause 166, insert the following new Clause—
“Introduction of a social tariff for vulnerable energy customers(1) Within six months of the day on which this Act is passed, the Secretary of State must prepare a plan in relation to bringing forward a social tariff for vulnerable energy customers and lay that plan before Parliament.(2) The Secretary of State may by notice in writing require the economic regulator to introduce a social tariff for energy that satisfies the following conditions—(a) it is additional to the Warm Home Discount and Default tariff price Cap,(b) it is mandatory for all licensed electricity and gas suppliers,(c) it is targeted on households that are in or at risk of fuel poverty,(d) it is set at a level that is below the market price, and(e) it automatically enrols eligible households onto the tariff.”Member’s explanatory statement
An amendment to give the Secretary of State the power to introduce a social tariff for energy and place a duty on the UK Government to prepare a plan for the introduction of such a tariff.

[Lord Whitty (Lab)]

My Lords, I will now move this amendment properly. I will not repeat what I just said, but the fact is that in this massive Bill, which gives the strategy for the energy sector for the next 10 years, the social dimension of that strategy and its effect on consumers are not entirely but largely ignored.

I moved a similar amendment in Committee and the Minister was not particularly interested. He claimed that we were already looking after the interests of vulnerable consumers. A couple of years ago, or slightly more, I did a small job for Energy UK, looking at the effect of the energy system on vulnerable consumers. To be fair, as a result of that both the trade body and some individual companies significantly improved their consumer service to the more vulnerable consumers, but they have not dramatically changed the tariff structure in favour of those who are least able to pay or who require a rather larger amount of energy than average because of their family condition, health, age, mobility and so forth.

A simple requirement that energy suppliers must include in their tariffs a social tariff for identified vulnerable consumers seems the most obvious and straightforward way forward. We have the warm home discount and the major intervention, using taxpayers’ money, to off-set the effects of the gas price rise, which I fully recognise is the biggest intervention the Government have made on this front, but this would be an obligation on the companies to ensure that they have a social tariff. This is because the present structure of tariffs is unfair and discriminates against more vulnerable consumers. Anybody who does not pay by direct debit is at a disadvantage with almost all the energy-supplying companies. A failure to pay by direct debit means that you pay more.

At a more extreme level even than that, those who are on prepayment meters—we have seen the scandals that have appeared in the last few months—systematically pay significantly more than those who pay by direct debit. This is not right. Those consumers are the most vulnerable. In many cases they are put on prepayment meters because they find it difficult to meet the cost. I appreciate that the Government have intervened to ensure that the more draconian measures to force people on to prepayment meters have been tackled, and I thank them for that, but it is still the case that the most vulnerable consumers, using the easiest method for them to pay, pay more than the rest of us on higher incomes. That is wrong. The easiest way to get out of that is to require all companies to have a social tariff, and to ensure that the system of the priority service register, which in theory exists to identify those customers, actually leads to an offer and a supply of a differentially favourable tariff.

The priority registration system was originally to make sure that they were not hit by shortage of supply. It has been used by companies to identify those who are most vulnerable, but it is differentially effective. Our study found that the level of signing up for the priority service was very different region by region and company by company. Also, the use to which it was put was not at all systematically clear. The large number of people who do not know of the register, or that they could perhaps use their presence on it to ask for a different tariff, means that, in essence, people who perhaps are not digitally literate or do not have time to compare the market—or “Compare the Meerkat” or whatever—are doubly disadvantaged with respect to the systems of pricing and tariffs available to them.

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[Baroness Bloomfield of Hinton Waldrist (Con)]

My Lords, this group covers amendments tabled regarding support and protections for the most vulnerable energy consumers. First, I thank the noble Lords, Lord Whitty and Lord Teverson, and the noble Baroness, Lady Bennett of Manor Castle, for their amendment to introduce a social tariff for vulnerable energy customers.

I am all too aware of the context for the noble Lords’ amendments, as energy bills have dramatically increased for all households over the past 18 months. This, coupled with the wider cost of living, has put the budgets of vulnerable households under considerable pressure. Noble Lords will be aware that the Chancellor set out in the Autumn Statement that the Government would work with consumer groups and industry to explore the best approach for consumer protection from April 2024. He also said that the Government would assess options, including a social tariff. These discussions are already well under way and are ongoing.

As set out in Powering Up Britain: Energy Security Plan, the Government have committed to consult this summer on options to provide better targeted support for those who need it most. In addition, the Chancellor announced in the Spring Budget that the energy price guarantee will be extended at £2,500 for an additional three months to the end of June 2023. This is in addition to the expanded warm home discount scheme, which has been extended until 2026 and which provides £475 million in support per year in 2020 prices.

The amendments tabled by the noble Lord, Lord Teverson, and the noble Baroness, Lady Bennett of Manor Castle, relate to the smart prepayment meter rollout and the restriction of the use of prepayment meters. The Government want to see the highest possible levels of smart meter coverage across the country, including for prepayment. Energy suppliers are each being set annual minimum installation targets and large suppliers are required to publish their performance against those targets, broken down by credit and prepayment.

This amendment would go further, effectively mandating the replacement of legacy prepayment meters by the end of 2025. This would present significant logistical challenges, including the need for energy suppliers to obtain warrants to enter consumers’ homes. I think we can all agree that that would not be a satisfactory outcome. Prioritising the replacement of legacy prepayment meters may have the unintended consequence of creating disincentives for suppliers to install smart meters for vulnerable credit customers. Data from Ofgem indicates that around 70% of those with disabilities pay by direct debit and may therefore benefit from the automated readings which smart meters deliver.

I understand the sentiment that lies behind the noble Lord’s calls for measures aimed at ending self-disconnections, such as a social tariff. However, his amendment is not the way to achieve this. The best way is through the work under way to explore the best approach for consumer protection, which I outlined earlier.

Regarding the noble Lord’s second amendment, the Government agree that the recent findings in the Times in relation to customers of British Gas having prepayment meters forcibly installed were both shocking and unacceptable. It is critical that our most vulnerable energy users are protected, and that is why the Government acted quickly to tackle this issue of inappropriate prepayment meter use. The Secretary of State wrote to energy suppliers insisting they revise their practices and improve their action to support vulnerable households.

Following that, all domestic energy suppliers have agreed to cease the forced installation of prepayment meters, and the remote switching of smart meters to prepayment mode, while Ofgem and industry agree and implement a code of practice to improve consumer safeguards. Ofgem will then start a formal statutory consultation process to modify suppliers’ licence conditions in line with the code, which will allow Ofgem to use its full enforcement powers to enforce compliance with the code.

I am pleased that the Chancellor has acted through the Budget to remove the premium paid by prepayment meter customers. That will happen from July initially, through the energy price guarantee, with Ofgem bringing forward options for longer-term solutions to be implemented by April 2024.

Prepayment meters can continue to play an important role in the market. They are a useful tool for some customers to prevent debt building up, and a complete ban on prepayment meters would likely see a move to using debt enforcement via the courts and bailiffs, which is not a desirable outcome. However, it is important that the rules around their use are sufficient and properly enforced. That is why Ofgem is undertaking a review to consider how prepayment meters are handled across the market. The Government will continue to review progress to ensure that these processes lead to positive changes for vulnerable consumers.

Amendment 74 tabled by the noble Lord, Lord Whitty, relates to protecting heat network consumers. Robust consumer protection rules are of paramount importance, which is the primary reason that the Government are regulating the heat network sector. Schedule 16 provides for regulations to make the regulator’s principal objective to protect the interests of existing and future heat network consumers. That mirrors Ofgem’s principal objectives regarding existing and future gas and electricity consumers.

I would like to provide more detail on what that principal objective will mean in practice. It will ensure that the regulator prioritises enforcing rules that ensure that heat network consumers receive fair prices and reliable supplies of heat. The regulator will have powers to investigate and intervene where prices appear unfair or are significantly higher than comparable heating systems. The regulator will also introduce heat supply standards of performance, including adequate compensation for consumers who experience outages. That will ensure that heat network consumers receive comparable standards to gas and electricity consumers.

We are introducing these measures through secondary legislation and authorisation conditions, as with gas and electricity consumer protections, to ensure that rules can be updated more easily as the market matures and decarbonises. The Government will consult on the specific consumer standards that need to be met, and I encourage the noble Lord to consider that consultation once it is published later this year.

I hope that noble Lords are reassured by this explanation and feel able not to press their amendments.

[Lord Whitty (Lab)]

My Lords, I thank the noble Baroness for that considered reply and the recognition in her remarks that there is still a serious problem. She referred to Ofgem coming up with something in relation to the way in which prepayment meters operate. In this new era, with a new structure following the Bill, it would be useful if Ofgem and the Government looked at the totality of structures for all forms of supply of energy, and particularly at the impact on more vulnerable consumers—Ofgem would need to take the lead, I guess. I hope the issues that I raised on the structure of tariffs in relation to the priority service register and the impact on vulnerable consumers would be included. I am watching this space. The noble Baroness has moved some way towards recognising that there is an issue.

I refrained from commenting in detail on heat networks because my voice was going. There is a problem. I very much welcome the fact that this is one bit of consumer protection in the Bill; it has been extended to the users of district heating. District heating has been convenient and is usually quite cheap but is now faced with real problems. I hope that the consultation will cover it.

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[Lord Deben (Con)]

My Lords, having been introduced by the noble Lord, I want to try to help the Government. We all know that, first, energy efficiency is the most sensible way of proceeding towards the statutory targets that this Government have supported and this Parliament has voted for. Secondly, we know that every mechanism that we have tried so far has not delivered to the extent that we hoped it would. Thirdly, we know that this is an all-party view; nobody disagrees with it except those who still believe that climate change is not happening. Even if you do not believe in climate change, you must understand the cost of living crisis and, therefore, that doing this is crucial to reduce costs, particularly for those who are least able to bear them. So there is every reason for energy efficiency.

It is therefore not surprising that every adviser of the Government has emphasised this—not just as one among many possibilities but as the most important thing that any Government could do at this time. That is not just the Climate Change Committee but the National Infrastructure Commission and everybody else who has paid any attention at all to this. Yet the Government, in explaining to their supporters why this would not be an acceptable amendment, suggest that somehow or other it would add unnecessarily to the various schemes and programmes that are already in place.

I have to say to the Minister that the Climate Change Committee has looked very carefully at this and it does not actually meet the facts, because none of these other things satisfactorily deals with the reduction of energy use. There is a bit of an argument about how much of a difference you could make but, roughly speaking, if we had real energy efficiency, we could do all the things we are doing at the moment at about half the energy use. This is a hugely important matter.

These particular amendments may well have failings, but that is to remind the Government that they should have brought this forward in the Bill themselves, so that it did not need to be amended. I beg the Minister, whom I hope is in a sympathetic mood, even to statements by me, to take seriously the fact that no one believes that we should not have this amendment or something like it—no one who I can find logically does.

There will be some people who, if it is pressed to a vote, will support the Government because they feel that they must. I am happy to meet any of them and listen to their arguments for not doing this; it will be difficult for those arguments to be effective. I merely ask the Minister to please not put us yet again in the embarrassing position that either we vote against energy efficiency on the side of the Government or we vote against the Government for energy efficiency, which is what every independent adviser advises and which is, I happen to be sure of, actually the view of any Minister who has looked at the facts.

[Lord Whitty (Lab)]

My Lords, I am glad to follow the noble Lord, Lord Deben; in the way he has spelled it out, it is clear that there is a huge gap in the energy strategy being presented by the Government. You would not believe that from the size of the Bill and the details within it, but the fact is that, unless we have a strand of policy, properly delivered and enforced, that deals with energy efficiency, we are missing the easiest target: to stop households and businesses spending money on energy when relatively simple adjustments to their homes or to the regulations that cover buildings could change that.

I am lost in admiration for the noble Baroness, Lady Hayman, who raises this issue on every piece of legislation going through the House. I am astounded that the Government have not taken it up.

There is something odd about this. More than 20 years ago, I was sitting where the Minister sits, and I was responsible for policies against fuel poverty and for energy efficiency. At the end of the Labour Government, we were doing roughly four times the number of interventions that the Government have done. So when the Minister turns around, as he did in Committee, and says that they are already doing a very substantial amount of stuff—they are doing some stuff; there is a social housing fund for energy efficiency and the ECO scheme, which is not a particularly efficient way of delivering it but does deliver something—at the end of the day, it does not amount to what we were doing 20 years ago. Had we continued doing that for the last 20 years—maybe we would have had to alter it and to update the interventions—then the energy efficiency of our buildings would be substantially greater. The Minister is required to explain to the House why this glaring omission is not in this or any other Bill.

There are relatively simple things you can do which make a dramatic difference, though it is slightly difficult to do it. Why, for example, do regulations on new builds not universally require new-build houses to approximate to a net-zero position? Why, for example, does the planning system tend to favour demolition of buildings, which itself is carbon-releasing and carbon-inefficient, rather than effective retrofitting? Why, in effect, have the schemes that the Government have come forward with in the owner-occupier sector—the green homes grant and the Green Deal—not worked, despite the fact that industry and campaigners have been very much in support of them? The answer is that they have not been made sufficiently attractive and the delivery has not been made sufficiently attractive to businesses—installers and the workforce—to ensure that we have a massive effort on this front.

I am glad that the Government have established a more effective Energy Efficiency Taskforce, but that task force needs to come up rapidly with a strategy which will address all of these issues and deliver for us a contribution to solving the energy-induced part of the cost of living crisis, and at the same time begin to reduce our dependence on energy use and enhance our contribution towards meeting net zero. It is so obvious that I am astounded, as the noble Lord, Lord Deben is, that the Government have not seized this opportunity.

I hope that, before the Bill finishes its turn in this House, we will see a rectification of that and a real commitment to an energy efficiency strategy which makes sense, is attractive and works.

[Baroness Altmann (Con)]

My Lords, I support these amendments and the concept of improving energy efficiency. I probably cannot express the rationale for that better than the noble Baroness, Lady Hayman, and my noble friend Lord Deben.

I would like to ask my noble friend the Minister if there are particular issues in the wording of these amendments that the Government have a problem with. Is it the EPC ratings or the six months? If there are such issues, would the Government consider coming back at Third Reading with their own version of what seems, universally across the House and across the country, to be so sensible? Given the Government’s excellent record and excellent intentions in improving the energy performance and net-zero performance of the British economy and our country, would they consider these measures?

Strikes (Minimum Service Levels) Bill

Lord Whitty Excerpts

Committee stage
Thursday 9th March 2023 Lords Chamber

For those reasons, it is my opinion that the view expressed by the Joint Committee on Human Rights is too modest. If the Bill goes through, we run a real danger in this country of violating the convention, and I would be grateful to hear a refutation of those views from the Minister.

[Lord Whitty (Lab)]

My Lords, it is a pleasure to follow my noble friend Lord Hendy. This discussion on the first amendment is bound to stray widely, but one of the areas it does have to consider is whether the various sub-committees and our adherence to and acceptance of international conventions going back more than half a century need to be jeopardised by this rather inadequate Bill. It is also a pleasure to follow the noble Lord, Lord Balfe; he says this Bill is unnecessary, and I totally agree.

As the noble Baroness, Lady Fox, implied but did not say, it is not only hyper-skeletal but hyper-political. It is political in a way which is dangerous, not least to the Government themselves. The clause we are debating does not say when or at what stage in the process Ministers would intervene and, if necessary, unilaterally set minimum service levels. Is it when a strike is first contemplated? Is it when the executive starts consulting its members? Is it when the members vote yes, in accordance with legal provisions? Is it when the first strike day is announced, or on the strike day? When is it? Either way, the difficulty is that in many cases, the Minister will be intervening unilaterally with a minimum of parliamentary scrutiny, and, as my noble friend said, there will already be jointly agreed minimum service levels. That is why it is dangerous to the Government: every dispute in which the Minister intervenes in this way becomes a political dispute.

We have spent years trying to take industrial relations out of politics, but this brings them right back in. A central feature of this Bill is that at any stage, the Minister’s own view can override all agreements and unilateral action by the unions to observe the health and welfare of the population at large and the minimum service level. That politicises industrial relations in a way that has not happened for many years. I hope the Conservative Party understands what it is doing in this respect.

The Bill is also unnecessary and political in the sense that the reason for it—which is largely coincidental—is that a number of different disputes have arisen at roughly the same time because of the cost of living crisis and the squeeze on public sector pay. The public are getting anxious about the situation and they see the Government are not able to resolve it, so the Government have invented this Bill. They want to use the period from now until the general election, which the noble Lord, Lord Balfe wants to jump, to tell the public that they have a solution to all this industrial unrest. But it is not the solution; it is a promulgation, if they are not careful, of that industrial unrest.

When I intervened at Second Reading, I told the Government that they had an alternative: they could sit down and talk, make a new offer and change things. At least somebody in government—albeit not universally—has listened to me or come to the same conclusion. As a result, the Government are now sitting down with the RCN, which they refused to do at one point. They have made a better offer to firefighters—or at least, the fire brigade’s executive thinks the offer could be referred back to its members. Even in some of the disputes involving the railways, the next period of strikes has been postponed because the employer or the Government have moved. That is the alternative to intervening unilaterally and politically, in a way which is very dangerous to this Government and to the rights of workers and trades unions. But think how much worse it would have been if, instead of making an offer to the FBU, the Government had taken a unilateral decision to make the present MSL irrelevant and to statutorily impose a new one, and if some firefighters or their representatives had been nominated in the employer’s work notice, been told they had to strike-break, and refused to. Workers would have been dismissed, becoming potential trade union martyrs, and the union could have been sued for vast sums.

If that happened, how would noble Lords imagine that trade union executives, and ultimately members, would respond? This measure, the ability to intervene in this way, will actually prolong strikes and create more strikes, not solve them. The Government are going to tell the country that they have the solution but they have the opposite, and it is time this Bill was withdrawn.