Great British Energy Bill

Lord Whitty Excerpts

Report stage
Tuesday 11th February 2025 Lords Chamber

Moved by

[Lord Whitty]

9: After “communities” insert “and projects providing for workforce planning and training to ensure adequate jobs and skills in a fair transition to cleaner energy”

[Lord Whitty (Lab)]

My Lords, I thank the noble Baroness on the Woolsack for that clarification.

I applaud completely Amendment 8, and am glad that the Government have moved this amendment which reflects the discussion in Committee. However, I am deeply disappointed that they failed to reflect an amendment that I tabled in Committee and had hoped that Ministers would accept. I find it quite extraordinary that, in a Labour Government’s proposition on the transformation of the energy sector, there is no clear reference to the workforce, workforce planning or raising skills.

We are, in effect, transforming over time a workforce whose most skilled and probably best paid employees work on oil wells to then operate in the wind sector, other renewable energy sectors and the nuclear sector. We wish to transform the generation end, but it affects the distribution and transmission end as well, where the whole system has to be changed and made more connected. The development of storage and new skills will be required, right through to the retail end where today’s jobbing electricians, gas fitters and plumbers will have to change their skills to fit in with the new energy form. But the Bill does not mention it.

I criticised the Conservative Government, who had much longer Bills where the words “skills” and “workforce” did not appear, but this Bill, on the strategic requirement for Great British Energy, which will be a major mover in this area, does not really mention skills. I hope, therefore, that the Minister will accept that there is a requirement and bring forward an amendment at Third Reading which reflects that.

I gently say to the Ministers on the Front Bench that, unless we reflect on that, we are going to lose some support among the existing workforce and those who might be thinking of training to enter the workforce. This applies to other Bills as well; if I were capable of being in two places at the same time, I would be making the same point on the buses Bill, where a relatively elderly workforce is going to be faced with a transformation in technology and regulation. I might also have made the same point on the railways Bill.

I gently say to my colleagues on the Front Bench that these are quite heavily unionised industries that they are proposing to transform. It would be good to have the representatives of the existing workforce, and, potentially, the future workforce, on-side in the job of Great British Energy and the Government. I declare an interest as a member of the GMB and the former general secretary of Unite and UNISON. We are at an early stage, and the Government need to recognise that representation will be important during this transformation of a very important sector. I hope they will recognise that and commit to putting something in the Bill for Third Reading.

--- Later in debate ---

[Lord Hunt of Kings Heath (Lab)]

My Lords, I have already spoken to my Amendment 8 and I now turn to Amendment 9 from my noble friend Lord Whitty, which is an amendment to my amendment. I had an opportunity for a very useful discussion with him after Committee. On jobs—the skilled people in the industry—I make it clear to the House that in Great British Energy’s policy priorities its mission is to drive clean energy deployment, boost energy independence and create jobs, alongside the other important aims. The GBE founding statement is explicit that GBE will boost the number of skilled jobs in this essential industry.

The statement of strategic priorities will reiterate these points and provide some more detail, and I am confident that GBE will take strongly on board the point that my noble friend has raised. We have already said that we expect trade unions to have a role in GBE, and I think the appointment as a non-executive director of my noble friend Lady O’Grady, the former general secretary of the TUC, supports this. I would also very much like to arrange a meeting between my noble friends to discuss this further.

On Amendment 22, we expect the statement of strategic priorities to outline any areas or programmes of activity that the Government would like GBE to prioritise in pursuit of its objectives. The problem with the wording of this amendment is that it would distort the work of GBE by placing community energy above and beyond the company’s other strategic priorities.

On Amendment 25, to support community energy groups to access funding and establish themselves in all areas of the UK—a point I made earlier—GBE will provide commercial, technical and project planning assistance, increasing the capability and capacity to build a pipeline of successful projects in local areas. Our local power plan will ensure coherence with other public sector advisory functions, and funding and finance organisations operating in the local energy space.

On community funds, of course we recognise the important role that community groups play in our efforts to tackle climate change and the sector asks around future funding. Great British Energy will build on the community energy fund by partnering with and providing funding and support to community energy groups to roll out renewable energy projects and develop, as noble Lords have said, up to 8 gigawatts of power. Further details will be set out shortly, but that is as far as I can go tonight.

As far as Amendment 14 is concerned, I make it clear to the noble Earl, Lord Russell, that there is no question about the importance of what he said about the challenge we face in relation to our building stock. That is therefore the challenge of our warm homes plan. We do not agree with the amendment because we do not think it should be the role of GBE to roll out the warm homes plan. I think he was talking about a wider principle than specifically the Bill and the role of GBE.

The warm homes plan has to be seen as a vital component of our ambition to become a clean energy superstar. As a first step we have committed an initial £3.4 billion in the next three years towards heat decarbonisation and household energy efficiency, and £1 billion of that has been allocated in the 2025-26 financial year. The intention is to upgrade up to 5 million homes across the country over this Parliament by accelerating the installation of efficient new technologies such as heat pumps, solar, batteries and insulation and to work and partner with combined authorities and local and devolved governments to roll this out. I accept that this is essentially a first step. It is a really challenging area, alongside our industrial processes. We will set out further details on the warm homes plan in due course, and we think that is the best way to proceed.

Finally, there are two responses to Amendment 53 tabled by the noble Lord, Lord Fuller, with whom I had the opportunity of a very useful discussion. I do not think it necessary to constrain GBE. Any development in which it is involved and provides finance will be subject to the existing stringent planning regulations, although we hope to see reform of our planning system, and the environmental impact assessments in environmental legislation that is brought to bear when considering these applications. The noble Lord’s argument should be with the planning system and environmental protections. The noble Lord, Lord Teverson, is right—we do not think that this Bill is the appropriate place for these proposals.

[Lord Whitty (Lab)]

My Lords, I will withdraw this amendment to an amendment. I tabled it because Clause 3(2) restricts the objects without mentioning the workforce. If my noble friend has other ways of dealing with this, that is fine.

Amendment 9 (to Amendment 8) withdrawn.

Heat Networks (Market Framework) (Great Britain) Regulations 2025

Lord Whitty Excerpts

Monday 3rd February 2025 Grand Committee

[Baroness Bloomfield of Hinton Waldrist (Con)]

My Lords, these regulations represent a pivotal step in securing the long-term sustainability of heat networks across Great Britain. Heat networks are central to the UK’s decarbonisation strategy, particularly in densely populated areas, and are projected to supply 18% of the nation’s heat demand by 2050. Presently, more than 500,000 households and businesses are already connected to these networks, which, as the noble Earl, Lord Russell, rightly observed, historically have operated without formal regulation.

The previous Conservative Government made notable progress in modernising this sector, investing £32 million through the heat network efficiency scheme. This funding allowed network operators to replace outdated and inefficient equipment, resulting in improved reliability and more efficient heating for consumers. Heat networks are expected to play a crucial role in reducing carbon emissions, particularly in areas where individual heating solutions are less feasible, such as, as the Minister suggested, dense urban environments.

The measures in the SI seek to establish a structure of regulation for the heat networks market designed to ensure that heat networks operate in a way that benefits the consumer. The key provisions include: the licensing of heat suppliers; stronger consumer protections; regulatory oversight from Ofgem; and performance reviews on data and reporting. Additionally, the regulations will encourage market development to foster innovation, competition and the integration of renewable energy solutions, which will be essential for meeting the UK’s climate goals. These provisions are designed to create a fairer, more transparent and consumer-friendly heat network sector, while supporting the transition to clean energy, making it a central pillar in the Government’s wider decarbonisation agenda.

Notwithstanding the comments made by the noble Earl, Lord Russell, about the lack of regulation in this market, Energy UK has acknowledged that the current level of regulation is lighter than that for gas and electricity, which is understandable given the market’s current stage and variability. However, it also recognised the need for regulation to become more robust as the market matures. While the measures to encourage investment in the sector are welcomed, Energy UK advocates for further efforts to promote wider connections to heat networks and enhance investment, particularly in underserved areas.

Despite the positive progress these regulations represent, several challenges remain. On consumer protection, how can we ensure that vulnerable consumers are adequately safeguarded and fully informed of their rights? Regarding investment and market growth, what additional steps can be taken to incentivise further investment in heat networks and ensure that the sector remains competitive? Could we see measures such as tax incentives or grants for businesses in local authorities looking to develop new networks or to expand existing ones? As the market evolves, how do we maintain the right balance between regulation and innovation—fostering growth without stifling creativity and new ideas? It is essential that these regulations allow space for technological breakthroughs and market experimentation. Finally, given that heat networks often operate as local monopolies, how can we ensure fair competition and prevent consumers being locked into poor-value contracts? The introduction of transparency measures, dispute resolution mechanisms and regulatory enforcement will be essential in addressing these concerns.

In conclusion, these regulations are a vital step in creating a fair, efficient and sustainable heat network market. They aim to protect consumers, encourage investment and support our climate objectives. As we move forward, we must ensure that these regulations continue to adapt to meet the evolving needs of the sector. To that end, ongoing consultation with stakeholders, consumers and innovators will be critical to ensuring that the heat network market thrives, while the interests of the public are protected.

I end with a plea to the Minister to keep a watchful eye on Ofgem, which has seen its workload increase exponentially over the last few years. I hope that his department continues to monitor Ofgem’s increasing responsibilities and to ensure that its resources are increased to match.

[Lord Whitty (Lab)]

My Lords, could I ask the Minister one question? I apologise to him: I realised this was being done today only about 20 minutes ago.

A significant number of existing heat networks are run by local authorities or hived-off organisations owned by local authorities. The aim of this legislation, as far as consumers are concerned, I have strongly supported for a long time, including during the proceedings of the Energy Act. I am very much in favour of consumer protection and consumer redress as spelled out in part of these regulations, but I have been told elsewhere that those protections and certainly those forms of redress are different if they are for consumers of heat networks run by local authorities, compared with a private sector or mixed ownership of the heat network. I would like to know whether that is true in principle. If it is at all true, perhaps the Minister could write to me and explain what the situation is.

[Lord Hunt of Kings Heath (Lab)]

My Lords, I am most grateful to noble Lords who have taken part in this short but none the less interesting and, I think, important debate. As the noble Earl, Lord Russell, the noble Baroness, Lady Bloomfield, and my noble friend Lord Whitty have suggested, the development of heat networks is a very important one, and we want to see considerable progress over the next few years.

I also think it is important that the sector itself has broadly supported the regulatory proposals. I believe, and I think it was explicit in what the noble Baroness said, that that confidence will allow them to invest in the future and develop the market, which is what we earnestly hope for and wish to see.

In response to the noble Baroness, Lady Bloomfield, I accept that this is another responsibility that is being placed on Ofgem. I have had quite considerable experience in dealing with regulators in my time in government. I think Ofgem discharges its responsibilities very seriously, and I have confidence in its ability to discharge this new responsibility. In a sense, it is simply extending the principles of the current regulation of gas and electricity to network heating, so it is something I am confident it will be able to do.

In response to the noble Earl, Lord Russell, I make it clear that from April this year, heat network consumers will also be able to seek redress from the Energy Ombudsman scheme and, through Citizens Advice and Consumer Scotland, will have access to advice and advocacy services afforded to the gas and electricity markets. In answer to the noble Baroness, we think this will be particularly helpful to the vulnerable customers she mentioned.

The noble Earl asked me about retrospection. The new arrangements will not be able to be applied retrospectively. The fact he raised this shows why it is so important that we get a move on in introducing these new regulations, and how customers were at risk under the previous arrangements.

As far as fair competition is concerned, again, I very much accept that point. Indeed, this work arose from the Competition and Markets Authority, and Ofgem is well used to intervening in areas where it feels that competition is not being fairly adopted. I am confident that it can deal with that. The data gathered by Ofgem—and, of course, it will have this ability to require data to be provided to it—will enable it to identify emerging issues and trends and adapt regulation as the heat sector develops and grows. As I see it, regulation will be proportionate and organic, marching in step with the way the market itself develops.

I inform the Committee that we will be introducing further regulations this year: first, to introduce protections against insolvency and debt management; and, secondly, to create an entity to implement mandatory technical standards. Putting those together will provide the foundation for this market to grow in future. Market growth seems to me to be a fundamental question, so we are working to expand the existing heat network market through capital funding via the green heat network fund, which will establish heat network zones in key locations. This will allow heat network developers to deploy large-scale district heat networks in dense urban locations, where, as I have said already, they are best suited to provide low-carbon heat.

On support for smaller heat networks, my understanding is that, first, Ofgem will take a proportionate and outcomes-based approach to regulation, providing guidance and supporting small operations.

To come back to the legacy issue and add a bit more information, on legacy issues with existing heat networks, we will take action to guide heat networks through legacy challenges that they face with existing heat networks, with remedial works implemented over time. One advantage of giving authorisation to current schemes is that, once they have been given an authorisation, they then come under these regulations. In one way, if there are pre-existing issues, at some point they will be authorised, and then they can be dealt with under these regulations. So, in fact, although strictly speaking it cannot be retrospectively applied, I hope that that can bring comfort to customers who are really concerned about the situation as it is.

I understand also, in relation to vulnerable customers, that a priority services register will enable vulnerable consumers to access additional support relating to their heat network, including receiving communications in an accessible format, assistance reading their meters and the ability to nominate another person to act on their behalf when dealing with their heat provider.

In relation to the point raised about regulation and customer prices, Ofgem will have direct powers to intervene on prices with a general authorisation condition, to set prices fairly, with data-driven interventions proceeding from January 2026.

On the point raised by my noble friend Lord Whitty, first, I acknowledge the work of local authorities of in some ways even pioneering district heating systems. My noble friend may know that in the heart of the city of Birmingham we had a district heating system that ran right through the city centre, and we can see the potential area. I have also been informed about the South Westminster Area Network, which is being established through close working between Westminster Council and Westminster business improvement districts. That is a new approach to procurement; it took four months to bring forward a partner, which is much quicker than for many of the schemes and developments.

The point that my noble friend raised is a new one to me, and I hope that he does not mind me just checking it out and coming back to him on it. On the face of it, it seems puzzling, but I think that I need to find out some more information about it. But I take his point that we want local authorities to continue to take a lead in developing some of these network heating schemes and, clearly, the public must have confidence in how that is done.

Finally, the noble Earl, Lord Russell, asked me about Great British Energy. He will know that we believe that, in the development of local plans and the role of GBE in doing that, there is clearly potential to give encouragement to community energy schemes and network schemes. I cannot really say any more about that, but I shall draw those remarks to the attention of the start-up chair of Great British Energy.

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.