Environmental Targets (Public Authorities) Bill [HL]

Debate between Viscount Trenchard and Earl Russell
Viscount Trenchard Portrait Viscount Trenchard (Con)
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My Lords, I declare my interest as a member of the advisory board of Penultimate Power UK Ltd and as a consultant to Japan Bank for International Cooperation.

I congratulate the noble Lord, Lord Krebs, on obtaining a Committee stage debate for his Bill. I recognise his consistent efforts in raising environmental and climate issues in this House, although I may not always wholly agree with him and sometimes question whether his approach is proportionate. I regret that the obsessive determination of both the last Government and this one to eliminate fossil fuels too quickly, particularly gas, has ensured that the cost of providing electricity to industrial users is now the highest in the world. For example, household electricity in the UK is 42% more expensive than in France and 169% more expensive than in the United States. As for industrial electricity, UK prices are two and a half times as much as the equivalents in both France and the US.

The comparisons with France are important because French electricity is generated 70% or more from nuclear and the UK grid depends for around 15% of its supply on imports, much of that from France. I did not speak at Second Reading on 18 October but the contribution to that debate by my noble friend Lord Blencathra is relevant to my amendment. My noble friend said:

“Take Great British Nuclear, which was created in 2023, not 100 years ago. It has as its objects ‘to facilitate the design, construction, commissioning and operation of nuclear energy generation projects for the purpose of furthering any policies published by His Majesty’s government’. I do not think you can make a better contribution to net zero than that”.—”.—[Official Report, 18/10/24; col. 397.]


My Amendment 2 seeks to exempt Great British Nuclear—weirdly and misleadingly renamed on Tuesday as Great British Energy-Nuclear, or GBE-N—from the duty to adhere to the environmental targets laid out in the Bill. I have argued before that to establish GBE as a separate publicly owned company from what is now GBE-N was a mistake and that it would have been much more sensible to have integrated GBE-N into GBE at the time of GBE’s establishment. I say that the renaming is misleading because it gives the impression that GBE-N is being brought under GBE’s umbrella. Perhaps the Minister can tell your Lordships what corporate or structural changes have taken place in either company as a result of the renaming.

Noble Lords will remember that when we debated the GBE Bill many of us lamented the fact that GBE has been given £8 billion to invest in energy projects, principally wind and solar, whereas GBE-N does not have any committed funding to invest in nuclear projects. I move this amendment not out of disregard for the environment but from a desire to see our environmental goals achieved through pragmatic, economically responsible policy. The Bill sets ambitious and admirable goals but, in its current form, it risks entangling Great British Energy-Nuclear, a vital strategic body, in layers of environmental regulation that could unintentionally undermine our path to both net zero and energy independence.

Nuclear energy is not merely an option; it is an economic and environmental necessity for this country. However, as many noble Lords will appreciate, the economics of nuclear are finely balanced. The upfront capital costs are at present extraordinarily high. Each new gigawatt-scale power station costs billions of pounds. We acknowledge that investors, both domestic and international, will certainly scrutinise every risk and additional burden before making a decision to invest.

I welcome the Government’s decision to invest in Sizewell C, as such huge projects are always going to need public sector support. To subject Great British Energy-Nuclear to further regulatory obligations under the Bill beyond what it already faces from the Office for Nuclear Regulation, the Environment Agency and planning authorities would be to risk unnecessary cost inflation. It would create bureaucratic drag and, worse, it would signal to markets that the UK remains a difficult environment for major infrastructure investment.

Let us be clear: nuclear energy is not on a level playing field with other low-carbon technologies. Wind and solar have enjoyed significant subsidy support over the past decade through contracts for difference, feed-in tariffs and other mechanisms. Nuclear, by contrast, is expected to finance itself under far more stringent conditions and is simultaneously capable of delivering baseload power that intermittent renewables cannot. Why is the consumer required to subsidise only intermittent energy sources but not nuclear projects?

The result of that is that UK-developed new nuclear schemes suffer a massive disadvantage compared with UK renewable schemes but also compared with nuclear schemes developed overseas, which, fortified with massive subsidies from foreign Governments, particularly the US, are coming over here and driving out UK-originated nuclear schemes which cannot compete financially.

Furthermore, nuclear is already held to the highest environmental and safety standards. From construction to decommissioning, the nuclear industry is subject to extensive regulation, scrutinised by multiple agencies and underpinned by rigorous science. It is misleading to suggest that this sector operates without accountability; to the contrary, it is perhaps the most tightly governed of all.

I say this not out of a lack of concern for the environment but because we must think strategically. Nuclear energy is, after all, one of the cleanest forms of energy over the long term. Its carbon footprint is negligible and it plays a critical role in achieving a stable low-carbon grid. The Government have rightly committed to ramping up nuclear capacity, both through small modular reactors and new gigawatt-scale stations. But these ambitions must be matched by policy consistency. If Great British Nuclear is to fulfil its remit, it must not be hobbled by duplicative environmental targets that add cost without adding value.

Furthermore, I remind the House that GBN is not a typical public body. It is a strategic delivery vehicle. Its success is measured not in reports or audits but in gigawatts connected to the grid. I propose, therefore, that we either exempt Great British nuclear entirely or create a more tailored framework, recognising the unique challenges and contributions of nuclear infrastructure.

Our duty is to make Britain cleaner, safer and more secure. We must avoid binding the hands of the very institutions we have created to do precisely that. I urge the House to support this measured, targeted amendment and to ensure that economic realism and environmental ambition go hand in hand. I beg to move.

Earl Russell Portrait Earl Russell (LD)
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My Lords, very briefly, I thank the noble Viscount, Lord Trenchard, for bringing his amendment, which seeks to remove Great British Nuclear from the Bill. I just remind noble Lords that the Bill of the noble Lord, Lord Krebs, seeks to install an environmental recovery obligation and adaptation for public bodies to help meet our targets under the Environment Act and the Climate Change Act.

The purpose of this amendment is to remove Great British Nuclear and make an exception for that particular body which does not apply to any of the other 29 listed public bodies that are named in the Bill. For the noble Viscount’s argument to be successful, an argument needs to be put forward that Great British Nuclear is in a particular situation that is separate to all the other bodies named in the Bill, such that it has a specific, cast-iron case to be removed from the provisions in the Private Member’s Bill before us today.

I have not heard that argument, so, in short, I do not support this amendment—rather the opposite. I remind noble Lords that only the other week the Public Accounts Committee published a report on Sellafield talking about the intolerable risks there. There is a £136 billion cost and a projected timeframe of 100 years for dealing with the nuclear waste legacy in this country. This Government have no long-term geological store for nuclear waste and are unlikely to have one before the 2050s at the earliest. That is in sharp contrast with the announcement of a nuclear renaissance.

Great British Energy Bill

Debate between Viscount Trenchard and Earl Russell
Viscount Trenchard Portrait Viscount Trenchard (Con)
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My Lords, I rise to follow the noble Lord, Lord Vaux, in speaking to Amendment 93, which he moved on behalf on my noble friend Lady Noakes. I have also added my name to this amendment.

As has been said several times in our debates, this is in essence a framework or enabling Bill but one that gives a large number of Henry VIII powers to the Secretary of State. A requirement to produce a framework document setting out the operating and financial principles that GBE will use would be a significant improvement to the Bill, as the noble Lord, Lord Vaux, explained so eloquently. It is essential that the principles underpinning the relationship between the Secretary of State and GBE should be publicly understood and supported. The arguments that I have previously used in relation to my Amendment 86A also apply here; other relevant public bodies, as mentioned in that amendment, clearly include GBN, NWF, NESO, Ofgem and Mission Control.

I also support my noble friend Lady Noakes in her Amendment 121A, which I think is justified in the circumstances, but I would certainly like to hear the Minister’s view on it. Amendment 121A would ensure that the framework document is laid before Parliament before the Act comes into force.

Earl Russell Portrait Earl Russell (LD)
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My Lords, I shall speak briefly on this group of amendments.

I generally give my support to Amendment 93. I understand that these things are being done quickly and urgently to get GBE established and that the Government need to get that done, but there is a general lack of detail in the Bill and we do not have the framework agreement. If the Minister could update the Committee on where that framework document is and what stage it is at, that would be useful. In the interests of trying to find a compromise and a way forward on these issues, I do not know whether it might be possible for the Minister to provide the equivalent of heads of terms or to say something from the Dispatch Box about what he would expect the framework document to cover or to send us an outline of what is likely to be in that document. We are keen to support the principles of this Bill, but the Bill is extremely short and lacks detail.

On the other side of the fence, there is a slight feeling that we are being asked to approve things without knowing what it is we are approving. If it were possible to find a way forward on these issues before Report, that would be appreciated, but I am interested to hear from the Minister what stage these documents are at and what impediments there may be beyond the Minister’s control in these matters.

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Viscount Trenchard Portrait Viscount Trenchard (Con)
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My Lords, I support my noble friend Lord Offord’s Amendment 94, to which I have added my name. I have also added my name to Amendment 103 in the names of the noble Lords, Lord Vaux and Lord Cameron, and my noble friend Lady Noakes.

The noble Lord, Lord Vaux, made the same point that I tried to make on Monday much more eloquently than I did: GBE and GBN are not comparable institutions. Unfortunately, it seems that the Minister’s department does not recognise that. I refer to the Explanatory Notes at page 6, paragraph 22. The power to give directions in the hands of the Secretary of State

“is consistent with the power that the Government has to direct comparable institutions, for example: the Department for Energy Security and Net Zero has a statutory power to direct Great British Nuclear, although, to date, this has never been used”.

I repeat the point made by the noble Lord, Lord Vaux, that, despite what this says, I cannot think that they are comparable institutions.

Both Amendments 94 and 103 require an independent person to carry out a review of GBE’s effectiveness. Of the two, I prefer Amendment 103, which requires the independent person to review the extent to which investments by GBE have encouraged private sector investment in those projects. Amendment 94 requires an annual independent review, whereas Amendment 103 requires such a review only once every three years. Perhaps we could compromise at two years.

I have also added my name to Amendment 102, in the name of the noble Earl, Lord Russell. This requires GBE to report on its relationships with other connected bodies and is, to some extent, similar to some of the other amendments we have debated. It is obviously a requirement of working together on strategic objectives and directions that GBE should maintain excellent relationships with its stakeholders. One of the ways to achieve that would be by adopting the noble Earl’s amendment, and I look forward to hearing him speak to it and to hearing the Minister’s response.

Earl Russell Portrait Earl Russell (LD)
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My Lords, I rise to speak to my Amendment 102 in this group, which concerns independent review and governance. It would insert a new clause after Clause 7 on Great British Energy stakeholder relationships. To be honest, it is a bit of a probing amendment and one that is looking for a bit of reassurance from the Minister.

The amendment argues:

“Within one year of the day on which this Act is passed, and every two years thereafter, Great British Energy must publish a report regarding its relationship with … Great British Nuclear … the Office of Gas and Electricity Markets (Ofgem) … National Energy System Operator (NESO) … the UK Infrastructure Bank … the Crown Estate”.


Obviously, it is essential that Great British Energy publishes reports and that these are available. It is important that we have a good understanding of how Great British Energy is working in practice. That involves understanding how it is establishing its working relationships alongside other partners and fulfilling its missions and goals, as we work towards net zero. It extends to objectives and joint projects and asks, “What problems are happening?” These are all key issues in the energy transition, which is itself a complicated business that involves lots of partner organisations and joint and crossover responsibilities. This is already a crowded space—or a tangled web, if you like—in which Great British Energy is being created. Indeed, the delivery of GB Energy’s goals will happen only if the new organisation builds strong and lasting relationships that develop well and help create both joint working and good outcomes.

I want to say a word about the Crown Estate Bill, if I may. It is the cornerstone of GB Energy’s relationship with the Crown Estate; their partnership was announced on the same day that GB Energy was created. Clearly—certainly for the initial part of GB Energy’s life—that partnership will be about developing floating offshore wind with the Crown Estate. As part of the Crown Estate Bill, an amendment was agreed in order that the Crown Estate produces an annual report on its relationship with GB Energy. So that is already happening on the Crown Estate side. I ask the Minister to give an assurance that, from the Government’s point of view, there is no reason why that requirement would not be mirrored on GB Energy’s side. I cannot see one; it seems like common sense to me. As others have said, reporting is a general issue running across this Bill.

I note what the Minister has said today in relation to group 10. I also note what he has said about the possibility for ongoing parliamentary scrutiny. Ministers are responsible, of course, for example at Question time. As the Minister has confirmed today at the Dispatch Box, GB Energy will be subject to scrutiny by all the Select Committees across both Houses of Parliament, but it is important that these relationships are reported on via an annual report. I would like to hear some reassurance from the Minister on that.

I turn briefly to the other amendments in this group. As we have heard, Amendment 94 in the names of the noble Lord, Lord Offord of Garvel, and the noble Viscount, Lord Trenchard, would require the Secretary of State to appoint an independent person to review annually the effectiveness of Great British Energy in delivering its objectives, meeting its strategic priorities and complying with its directions. The independent review would be required to cover Clauses 3, 5 and 6 of the Bill.

I would be interested in the Minister’s response to this amendment. My worry is that this would be overly burdensome for the organisation. I am not certain that I was able to find another comparable organisation where these conditions applied, so my concern is whether we are asking for something that is not on a level playing field with other, similar types of organisations. I note as well that strategic directions can be given and, as I said, there are also other methods of scrutiny, so it would be the Minister’s right, at any point, to give the strategic direction for that to happen.

Amendment 103 in the name of the noble Lord, Lord Vaux of Harrowden, would require an independent review of the effectiveness of Great British Energy in achieving its objectives and the extent to which it had encouraged private investment. But this would be every three years. I was interested to hear what the noble Lord said in relation to the UK Infrastructure Bank. Again, my worry is whether this is a level playing field, but I was interested that the noble Lord said that that is part of that organisation and how it works. That makes me more inclined to lend support to his amendment.