Oral Answers to Questions

Wera Hobhouse Excerpts

Tuesday 12th November 2024 Commons Chamber

[Michael Shanks]

I recognise the hon. Gentleman’s point, and I am looking forward to meeting him and his colleagues this afternoon to discuss the particular issues in his area. We need to build more network infrastructure across the UK to make this endeavour a reality, but he is right: we want to bring communities with us on this journey. That is why we have said that we are looking again at what community benefits will look like, building on some of the work that the previous Government did in consulting on this issue. Crucially, however, if want to bring down bills and deliver energy security, we will have to build the infrastructure, and that is what this Government are committed to doing.

[Wera Hobhouse (Bath) (LD)]

The Minister knows well the Liberal Democrats’ commitment to community energy. Will the Government establish a clean community energy scheme, look at the barriers that currently face community energy projects and look at supporting the National Grid to deliver community energy?

Great British Energy Bill

Wera Hobhouse Excerpts

Report stage
Tuesday 29th October 2024 Commons Chamber

[Pippa Heylings]

In fact, I said at the beginning of my contribution that I welcomed the constructive debate in Committee.

[Wera Hobhouse (Bath) (LD)]

If the Government have bought into the idea of community energy, does my hon. Friend not think it odd that they are so afraid to put it in the Bill?

[Pippa Heylings]

I could not have put it better myself. I thank my hon. Friend for leading the fight for the Liberal Democrats as the former spokesperson on energy security and net zero. That question goes to the crux of the matter.

We have fantastic examples from many communities of how important community energy is. My hon. Friend the Member for Inverness, Skye and West Ross-shire (Mr MacDonald) led the recent Westminster Hall debate, in which there were fantastic examples from rural communities of how they feel about community benefits. There are also the efforts of my hon. Friend the Member for Edinburgh West (Christine Jardine) in supporting the Aikengall community wind farm, which provides a direct benefit of an amazing £120,000 for the community.

Community energy is not just for Scotland. In my own county of Cambridgeshire, there is the Swaffham Prior community heat network, and the village is the first of its kind to switch to reliable zero-carbon heating. It was started by the Swaffham Prior Community Land Trust, and it addresses fuel poverty and the village’s reliance on oil heating. The Liberal Democrats will continue to promote those who have pioneered community energy schemes, proving their worth and championing their critical importance to our energy future.

While the Government have not previously backed our amendments, which is incomprehensible to us, I am grateful to the Minister for the conversations we have had recently and the assurances he has given us that the Government really do want to make provisions in the Bill for community energy in the Lords. I look forward to supporting our colleagues in the other place in this endeavour, but the interventions from Labour Members—saying that this will be in the founding statement and the strategic priorities, but not in the Bill—are causing us to doubt that commitment. I therefore urge the Government to make good on their promises. We know their commitment to community energy, so let that be understood clearly and let us put it in the Bill.

--- Later in debate ---

[Victoria Collins (Harpenden and Berkhamsted) (LD)]

I refer Members to my entry in the Register of Members’ Financial Interests.

Energy is at the heart of our economy. It powers our homes, our schools, our workplaces and even our democracy. Most importantly, it is at the heart of our communities. This Bill must ensure that it brings those communities and community energy projects with it, which is why I am speaking wholeheartedly in support of amendment 5.

Local to Harpenden and Berkhamsted is the Grand Union Community Energy benefit society, which runs several community energy fund schemes, including solar canopies, and is investigating heating from aquifers. As a not-for-profit, it aims to use its proceeds to help householders, especially the most vulnerable, to reduce their energy bills and energy use. It also supports other community organisations that do not have a regular income. In Berkhamsted, it has worked with Sunnyside Rural Trust to review the energy strategy of its Northchurch site. I have spoken to passionate members, such as Sarah, Paul and John, about why they are making it work and the difficulties they face.

If we are to reach net zero, community energy is needed to fill a gap between individuals, businesses and councils. It was John who reminded me that if community energy is supported, there is a significant resource of people ready and waiting to put their voluntary efforts into getting schemes off the ground. By their very nature, they are embedded in their communities, and we must bring our communities with us if we are to make the change that is needed.

However, our community energy projects need support. Community energy projects face insurmountable costs when trying to sell the power they generate to local consumers. Grand Union Community Energy is nervous about taking on the delivery of projects, as there is uncertainty about how electricity prices may change in the future. Community energy needs stability too. As it stands, community energy schemes find it nigh impossible to sell their power directly to local consumers, which leaves pricing and some projects financially unviable without further support.

Previously, feed-in tariffs helped to provide pricing stability, but when that scheme ended in 2019, many planned community projects were scrapped and the number of new projects slowed significantly. Current access to funding has been vague, erratic and uncertain, especially since the rural community energy scheme ended, and I know many people have not bothered to apply for funding because they find it so difficult.

We must unlock the potential of our community energy projects, and that is why I support amendment 5. There are many ownership models. The Liberal Democrats are calling for large energy suppliers, when they work with community energy projects, to work with them to sell the power they generate to local customers at a discounted rate and provide community benefits. Overall, we must ensure that these projects are financially viable and supported with technical, commercial and legal advice, and we must seize this opportunity to bring our communities with us.

[Wera Hobhouse]

I welcome that the Government are taking renewable energy investment seriously and creating a mechanism for it. In common with many Liberal Democrat Members, I will focus on amendment 5, which would specifically require Great British Energy to support community energy projects as part of its strategic priorities.

Labour Front Benchers have supported community energy for a long time, and cross-party support was clearly displayed on Second Reading, as it is by the large number of Members’ signatures on amendment 5. The same was true of my amendment 2, which was sadly defeated in Committee. To their credit, the previous Government introduced the community energy fund, which made a difference, but more needs to be done to support community energy. Despite strong cross-party support for community energy, the Great British Energy Bill makes no mention of it. Liberal Democrat Members believe that it should be on the face of the Bill.

In Committee, the Minister said that including community energy in the Bill was not appropriate. I understand that GB Energy is not precluded from supporting community energy by the Bill, just as I understand the Government’s argument that if the new company is to be able to work flexibly, it should not be hampered by too many provisions in the Bill. However, our concern remains that unless something concrete is included in the Bill, future Ministers, Governments or chief executives of Great British Energy may decide not to support community energy and the full benefits of local energy may not be realised. Amendment 5 would strengthen the Bill in line with the clear parliamentary consensus in support of growth in this highly promising clean energy sector.

The community energy sector has seen minimal growth in recent years. It has suffered from damaging policies, such as the end of the feed-in tariffs that helped fuel growth. Since 2010, there has been no growth in the sector. Regulatory changes are required to ensure that communities receive the benefits they deserve for hosting clean energy infrastructure. All of these arguments are well understood and the benefits of community energy have been well researched. The new Government have said time and again that they support community energy and that it is a shared aim.

I welcome the conversation and the open debate on this issue. I understand that the Government take issue with putting the term “priority” on the face of the Bill. The passage of the Bill has not reached its final stages, and there is room for further debate. I very much hope that the Government recognise how strongly colleagues across the House feel about including specific support for community energy, and that such an inclusion will create cross-party support for the Bill as a whole.

[Llinos Medi (Ynys Môn) (PC)]

First, let me congratulate the hon. Member for Dewsbury and Batley (Iqbal Mohamed) on his passionate maiden speech.

I rise to speak to amendments 11 and 12, tabled in my name, which seek to provide certainty to particular energy sectors that they will be prioritised by GB Energy. I must declare an interest as an officer of the marine energy all-party parliamentary group, of which the UK Marine Energy Council is the secretariat.

Large-scale Energy Projects and Food Security

Wera Hobhouse Excerpts

Tuesday 22nd October 2024 Westminster Hall

[Wera Hobhouse (Bath) (LD)]

It is a pleasure, Sir Mark, to listen to this lively debate and I congratulate the hon. Member for Ynys Môn (Llinos Medi) on bringing it to the Chamber. There are clearly some different opinions, but I think the overall consensus does obviously emerge. Food security and energy security are equally important. Clearly we should not be displacing good productive farmland for any use that is not food production. As I understand it, the pressure comes mainly from landlords evicting active tenant farmers from their land. In that context, I first ask the Minister whether the Government will actually bring in the long-awaited tenant farming commissioner, who would look at these tensions between landlords and tenant farmers.

As we have already heard, the threat to UK food security comes not from renewable energy projects, but from a number of complex interrelated issues relating to how our food is produced, how it is subsidised, sold onto the middleman and supermarkets, and to a demand and supply mechanism that is broken.

At the heart of our food supply problems globally is climate change. Therefore, tackling climate change must be our top priority. Solar plays a major part in our efforts to get to net zero. More renewables also means less dependence on oil and gas and better security for our constituents when it comes to their energy bills. This year, England will produce 26% less wheat than in 2023. This comes after the wettest 18 months since records began. The loss of wheat in 2024 alone is over 5,000 times greater than the loss of food production caused by three new solar farms being approved in July. These are the figures we need to take into consideration.

When it comes to food supply and security, solar farms are a drop in the ocean compared with what we lose to the climate crisis. Meeting the UK Government’s plans for increasing solar energy by 2035 would mean using about 0.3% of the UK’s land—and we have already heard the comparison with golf courses. We need to look at how we sensibly use all our land. My constituency of Bath is served by solar energy from Lightsource BP, which is helping the UK to transition to net zero through solar projects. Projects like these need timely grid connection, and the Minister will know that that is currently the biggest barrier to farmers diversifying their income through renewable energy.

Even if all future ground-mounted solar was built on farmland, the impact on UK food production as a result of the change in land use would be very small. As solar technology develops, it will need less space in the future. An example is bifacial panels that capture solar light on both sides of the panel. There are also types of solar panels where crops can be grown below. Many farmers who are unlikely to volunteer their best land for solar power are positive about this technology. Many solar farms are home to grazing animals like sheep, which live alongside the panels. We do not have to choose one or the other. Many farmers find it useful to lease less productive land to energy companies for solar farms, providing much-needed additional income. If farmers must keep productive farms, they must also be profitable. It would be bad for food security to take away what could be an important income stream for farmers.

The National Farmers Union agrees on the importance of renewables and says that,

“solar projects often offer a good diversification option for farmers.”

We should not be prohibiting farmers from using their land how they best see fit. If crops can grow and livestock can graze while the same land accommodates solar panels, where is the issue?

We need to guarantee food security by implementing a national food strategy. The Liberal Democrats would boost the farming budget by £1 billion. We must support farmers to produce high-quality food to high standards while also improving our natural environment, and we must encourage people to buy local. It is so important that people understand the connection between locally produced food and high-quality food—and, yes, we occasionally have to pay a little bit more for it, but these are the important connections and arguments we need to make.

The Liberal Democrats have been calling for a proper visa and seasonal worker scheme. This would allow our farmers and fishers to access the workforce they need. We would also provide an extra £1 billion for the ELM scheme to support profitable, sustainable and nature-friendly farming across the UK. The Government also need to ensure effective regulation of UK food systems, agriculture and land use. We would seek to strengthen DEFRA, which is currently under-resourced and undervalued.

We should not have to choose between solar farms and food security. Farmers must be free to make their own choices and be supported to do so, and I hope the Government are listening to farmers.

Great British Energy Bill (Third sitting)

Wera Hobhouse Excerpts

Committee stage
Thursday 10th October 2024 Public Bill Committees

[Pippa Heylings]

I thank the hon. Member for making that point about the cost for communities of connecting to the grid, which makes it completely unviable for them to do so. It is not about capacity; the communities know what they want to do and are ready to do it. Unfortunately, although there is a right to sell energy locally, the cost of connection makes it completely unviable.

[Wera Hobhouse (Bath) (LD)]

An additional problem is that small community energy projects cannot provide directly—cannot sell directly—to the consumer. That is one of the major problems. Therefore, the Government should really put their mind to it and accept our amendment, so that we can assure our communities that the Government are really serious about this issue. Does my hon. Friend agree?

[Pippa Heylings]

I very much agree. Indeed, I find it very hard not to agree with my hon. Friend, who tabled the amendment.

We are obviously waiting to see the local power plan. We hope that it contains detail not only about the benefits, as with the Scottish and Welsh examples, but about the ownership model empowering local communities to do this work.

Given the cross-party support for the amendment, I will not withdraw it.

Question put, That the amendment be made.

--- Later in debate ---

[Perran Moon (Camborne and Redruth) (Lab)]

Although I entirely agree with the importance of the warm homes plan, I am getting really concerned that we are losing focus. We are looking to create a Bill that allows the scope and flexibility to ensure—I am glad the Minister mentioned this earlier—that the UK taxpayer gets the best bang for their buck. As the expert witnesses consistently testified, one of the key benefits of the Bill is that it is not overly or unnecessarily prescriptive and allows the scope to develop the strategic priorities, referred to in clause 5, that focus on ensuring that we get this right. I look forward to speaking to the Minister in due course about those priorities. GB Energy will work alongside and in partnership with the private sector, but we must avoid trying to be too prescriptive in a specific Bill focused on this area.

[Wera Hobhouse]

The hon. Gentleman is a new Member of Parliament; I have been here a little longer. Those of us who have been here longer always want to ensure that something is in statute—in law—because we parliamentarians are always a little wary of leaving it to a further document that may or may not come. We would like to see some assurances in law to ensure that whatever has been promised will actually happen. Does the hon. Gentleman share my concern?

[Perran Moon]

I am absolutely delighted that the Government are already talking about the warm homes plan. We have a plan, and it is coming through; we have talked about it coming through in spring. Today we are talking about the Great British Energy Bill, and it is really important that we retain the focus on ensuring that the Bill has flexibility, so that we can see the strategic priorities delivering on GB Energy specifically.

--- Later in debate ---

[Michael Shanks]

That is an important point. We will announce more about allocation round 7 in due course, and how our industrial work and British jobs will work together to create those supply chains. It is an important point about the broad nature of what we want to do: to give confidence to industry that a pipeline of projects will be coming long into the future—beyond 2030, actually, although that is our initial key target—so that it is worth investing in and building the factories and supply chains in the UK. Great British Energy will be part of that, but it will certainly not be the entirety of it. We are working with the national wealth fund and the UK Infrastructure Bank to deliver more of those projects in the UK.

The final function, which the shadow Minister will appreciate, is that Great British Energy will help advance the work of Great British Nuclear. We will say more in due course about exactly how those two organisations work together. Those five functions enable Great British Energy to deliver on its clear mission of driving forward clean energy deployment, boosting our energy independence, creating good jobs and ensuring that UK taxpayers, bill payers and communities reap the benefits of clean and secure home-grown energy.

[Wera Hobhouse]

Will the Minister confirm that he said that we might cross-reference the five functions in the Bill? In that way, people will be clear, for example, that community energy is cross-referenced in the Bill as one of the five functions. Did he say that earlier?

[Michael Shanks]

No, I did not say that. What I was saying was that the context of the objects in the Bill is given by the functions that we set out in the founding statement. It is clear that those founding principles of Great British Energy, which the Secretary of State announced in that founding statement along with the start-up chair, Juergen Maier, will be largely what drives the initial statement of priorities for the company.

The objects themselves are around creating restrictions on what Great British Energy can do. We have left them deliberately broad so that the company is able to move in and out of different spaces. I am not sure whether the hon. Lady was here earlier, but we said clearly that there is nothing in the Bill that precludes community energy at all. I have repeated a number of times our absolute commitment to that and to the local power plan.

We will turn to clause 5 in due course, but it is relevant to the point we are discussing. Great British Energy will, of course, be operationally independent—a model adopted by a number of different companies; it is important for it to have its own board of experts in their fields. However, the Secretary of State will be able to set the company’s strategic priorities, which we will debate later. That is to ensure that although Great British Energy is operationally independent, it is setting out the functions in its founding statement while remaining agile to the Government priorities of the day. Importantly, it is a vehicle for delivering the central points of Government policy, including community energy, energy efficiency and many of the other things we have talked about. I commend the clause to the Committee.

Question put and agreed to.

Clause 3 accordingly ordered to stand part of the Bill.

Clause 4

Financial assistance

Question proposed, That the clause stand part of the Bill.

Great British Energy Bill (Fourth sitting)

Wera Hobhouse Excerpts

Committee stage
Thursday 10th October 2024 Public Bill Committees

[Andrew Bowie]

It is a pleasure to serve under your chairmanship, Sir Roger. The amendment would bring to the Bill a concrete objective for Great British Energy to reduce the wholesale price of electricity. I am pleased to move this amendment, which will introduce a specific strategic priority to reduce wholesale electricity prices and to require that an annual report is produced on how Great British Energy’s activities are affecting wholesale energy prices and therefore consumer electricity bills.

Further to the discussion earlier about the impact of Great British Energy on bills, notable by its absence, sadly, is a purpose for GB Energy to reduce wholesale electricity prices. As we noted earlier, the Bill states that the objects of GB Energy are only to facilitate, encourage and participate in the production of energy, the reduction of greenhouse gas emissions, improvements to energy efficiency, and measures for ensuring the security of supply. It would be remiss of the Government not to include the ambition to reduce the wholesale price of electricity as a strategic priority of the company.

Why is reducing wholesale electricity prices important? Wholesale costs account for about 60% of a customer’s energy bill and are a major consideration in suppliers’ retail pricing decisions. In the two years since Vladimir Putin’s invasion of Ukraine, we have seen the sizeable impact of the international energy crisis on bill payers in the United Kingdom. Tensions rising in the middle east could very much affect our domestic energy costs, so it is more significant than ever that we take into account the impact that Great British Energy could have on wholesale electricity prices to reduce consumer bills as much as possible.

It should be incumbent on Great British Energy, through its investments and its part and full ownership of projects, to drive down wholesale electricity prices to the benefit of UK bill payers and businesses. In winter 2022-23, the Conservative and Unionist Government paid half the country’s energy bills to protect households from the worst of the energy shocks triggered by that war in Ukraine. Energy bills, alongside the pressures of inflation, have been a consistent worry for all our constituents. We also have the highest energy costs for industry in Europe.

The Government have outlined that their plans to tackle future energy security, to reduce bills and to lower wholesale prices for electricity hinge on the creation of GB Energy. Therefore, it would be prudent to write into the Bill the strategic priority to reduce wholesale electricity prices. On Tuesday, we heard from the chair of GB Energy that

“Every megawatt and gigawatt of renewable energy that we put on the grid will help to bring bills and prices down.”––[Official Report, Great British Energy Public Bill Committee, 8 October 2024; c. 6, Q5.]

I agree. Therefore, it has been intimated that that is indeed a strategic priority for GB Energy, and the Bill ought to reflect that.

This group of amendments also introduces the requirement for the Secretary of State to give a specific direction to Great British Energy that it must report on its progress.

[Wera Hobhouse (Bath) (LD)]

I have an honest question. Since energy is sold in a daily, 10-minute or whatever market, and that market operates, how can the Government ensure that the market behaves in the way they want it to behave? Is that question useful? I want to understand what the hon. Gentleman’s amendment will actually do to guarantee the price, since British energy operates in a market.

[Andrew Bowie]

That is an important question. I think we all agree that the reason the United Kingdom was so exposed to the energy price shocks that the entire western world has experienced over the past two years was our overreliance on the highly volatile fossil fuel market. Building new technologies to drive us towards a cleaner future and lower bills is therefore important. Our exposure to the market to which the hon. Lady refers had an adverse impact here in the United Kingdom. Just as stating in the Bill that a reduction in bills is important, the reduction of wholesale electricity prices should also be a stated object in the Bill. If GB Energy is to do anything, alongside all its other strategic objects, surely it must be working towards a reduction in electricity prices. We would therefore like to see that on the face of the Bill.

[Wera Hobhouse]

The hon. Gentleman is being generous in giving way. Would that not be a clear state intervention in the market?

[Andrew Bowie]

I do not think so, but the creation of the company is a state intervention in the market. That is one reason we on the Conservative Benches disagree with the Bill. We think that we can drive up investment in renewables and new technologies in this country by allowing companies the freedom to invest and by creating the best environment for private investment in this country. That is what we did when we were in government. That is why we have the first to the fifth-largest offshore wind farms in the world, and that is why we cut emissions faster than any other country in the G7, at the same time as growing the economy. That is a record that I am very proud of, and I worry that this state intervention in the market will have a negative effect.

We are debating the creation of GB Energy and this Bill. As part of that, a reduction in electricity prices should be one of the strategic aims.

--- Later in debate ---

[Michael Shanks]

I think my hon. Friend the Member for Peterborough has a lot to answer for, with the metaphors that have now started, but the hon. Lady makes a serious point. I would just gently challenge one point that she makes. The statement of strategic priorities is not about giving every detail on all the objects. The direction of the company is already very clear. The reason that the objects have been left broad is so that the company can explore opportunities in all those areas without having to come back and get direction on every single point.

[Wera Hobhouse]

Will the Minister give way?

[Michael Shanks]

I will answer the previous intervention first. The point of having an independent company—this is why it is used as a mechanism by Governments of all types—is that it can have the flexibility to move. That flexibility is within the very strict parameters set by Government, but with a broad scope to move into opportunities as they arise.

[Wera Hobhouse]

I thank the Minister for giving way. The second part of his reply answered what I am worried about, and what we as a Committee have been worried about all along, which is parliamentary scrutiny. Will the Minister advise at what point that parliamentary scrutiny can be exercised?

[Michael Shanks]

The hon. Lady is well versed in how Parliament works, and there are a number of mechanisms already open to Parliament to scrutinise the work of the Department and the Secretary of State. Indeed, the transparency around clause 5 is that this will be laid before Parliament in the same way that the priorities for the UK Infrastructure Bank and various other independent companies are laid before Parliament.

On the hon. Member for South Cambridgeshire’s second point, which I did not get to and is a very fair point, we are not seeking to design something behind closed doors that has no engagement. I have taken a lot of meetings in the three months that I have been a Minister, and I am very happy to take many more. We want to hear a broad range of views on this and we are happy to discuss it, but there is a balance between having an open approach to how we create, draft and bring ideas together, and ending up with a document—in the end, it will not be a huge document—that just goes round a process for months on end and stops the company from getting on with what we want it to do.

We heard from all the witnesses on Tuesday that speed is important; we do not want to waste any time, and I think that the Liberal Democrats support that approach. We want to get on and do it, and that is important. As I said earlier, I will come on to the point about the devolved Governments and the engagement that we plan with them in due course.

Furthermore, in setting up a company, the company is subject to all the requirements that other companies are, in terms of Companies House and having to produce annual accounts and an annual report. The activities of the board will also, of course, be available so that people can see what decisions the company is making. It is important that this company is at arm’s length from Government but has all the benefits of being publicly owned, in that it is required to manage the stewardship of public funds in a careful and accountable way.

In my view, the amendment is unnecessary, as the processes are already in place to scrutinise the work of Great British Energy and the work of the Department more generally. We will not be accepting the amendment today.

Oral Answers to Questions

Wera Hobhouse Excerpts

Tuesday 8th October 2024 Commons Chamber

[Miatta Fahnbulleh]

We have an ambitious plan to build more homes. We want those homes to be fit for the future. We will put out information in due course on the standards we want across those homes, but we have an opportunity to do insulation, energy efficiency and homes that are fit for the future, at the same time as building the homes we need.

[Wera Hobhouse (Bath) (LD)]

Local authorities play an important role as trusted sources of knowledge and expertise, and guide householders, for example, to trusted installers, but they need the resources to do that. Will the Department devolve some resources to local authorities to fulfil that important role?

[Miatta Fahnbulleh]

We see local and regional government playing an absolutely fundamental role to reach homes that we need to upgrade, but also to help us deliver the scale of ambition we want. Local and regional government will be a key part of our warm homes plan.

Great British Energy Bill (First sitting)

Wera Hobhouse Excerpts

Committee stage
Tuesday 8th October 2024 Public Bill Committees

[Torcuil Crichton]

And economic benefit too, we hope.

Juergen Maier: Of course.

[Wera Hobhouse (Bath) (LD)]

Q Good morning, Mr Maier. It is very good to see you here. I have some questions about the overall aims that the Bill and the company are trying to achieve. You have just said that it will be an enabler, so we have to imagine it as something that will happen before any contracts for difference are attributed. It is an enabler to make people and companies ready to bid into the CfDs, for example. Is that how you see the role? People are used to the status quo, and the CfDs have been very successful. Some companies are wondering how it is all going to fit together.

Juergen Maier: Certainly the enabling part of what we do will be pre-CfDs, as you say. That is also where our partnership with the Crown Estate comes in. This is where we will be doing a lot of the early consenting and engaging on the willingness to co-invest and give confidence, but we will also be there past the CfDs. As and when the schemes get developed, there may be opportunities to come in and be a co-investor. We would also be supporting that.

[Wera Hobhouse]

So—

[The Chair]

Order. Is this within the scope of the Bill? Our last question will be at 9.47 am, and four more Members have indicated that they wish to come in.

[Wera Hobhouse]

Q Does the Bill give us enough clarity? How will other financial institutions, such as the UK Infrastructure Bank or the British Business Bank, support what GB Energy is trying to do? The Bill is very short, so I wonder whether there is enough scope within it to explain that to investors.

Juergen Maier: There will be two things. The Bill clearly sets out the structure of how we will set up Great British Energy and the key areas of focus. Obviously there will then be a business plan and a framework agreement between us and the Secretary of State, in which we will have to clarify exactly those questions and where Great British Energy and the UKIB take their role. Those are things that will need to be clarified, but I do not think that putting them in the Bill would particularly help us to do that.

[Wera Hobhouse]

Q I have one last question about the timeframes, which are very vague. The Bill states:

“The Secretary of State must prepare a statement of strategic priorities for Great British Energy.”

Do you have any idea of when we can expect that statement to be laid before Parliament?

Juergen Maier: I am not sure of the exact timings. Maybe when you get evidence from the Minister he will be able to put a time on that.

[Perran Moon (Camborne and Redruth) (Lab)]

Q Mr Maier, you have talked about how local communities will benefit from community energy; you mentioned floating offshore wind off the east coast of the United Kingdom. Down in Cornwall, we are very close to the Celtic sea opportunity, which is between us and Wales. Could you elaborate on the benefits, particularly the social benefits, that may come from the Celtic sea development in an area like Cornwall, which is one of the most deprived in the UK?

Juergen Maier: Indeed. The earlier question was pointed at the north-east and Aberdeen, hence my response, but you are right. As a matter of fact, the two key areas where floating offshore wind will be developed are in the north-east and in the Celtic sea. From a logistics point of view, you could not put them further apart, so it is not exactly ideal—

--- Later in debate ---

[Wera Hobhouse]

Q Good morning. I want to come back to clause 5 of the Bill, which is about the statement of strategic priorities. Most of what I have heard this morning is that we are a bit worried about there not being enough detail on certain things. Should there be more detail about the strategic priorities in the Bill, such as job creation, or should there be a precise timeline for when we can actually expect that? The whole purpose of the Bill is to speed up all that energy transition, and currently we do not know when we will see a statement. Is it important that we actually get some timelines in the Bill?

Mike Clancy: The simple answer is yes. The longer there is a concept phase, albeit a positive concept phase, the more that we are talking about a multiplier effect from GBE in many respects. If GBE is delivered, starts to operate and gives confidence to the direction of energy policy, other investors will see this as a serious proposition and therefore we will be engaging in this huge process of energy transition.

As I said just a moment ago, it also means that talented people can see a future. We want to be part of that. So, within the process of parliamentary drafting, the more that we have a clear set of objectives—actually differentiating it as a public entity and setting the tone for what you want from energy assets in the future—the better, because that will give that confidence. That also has a knock-on effect for the confidence of private investors in other parts of the energy environment.

[Uma Kumaran]

Q Thank you both. I really welcome hearing the views of trade unions in this session, especially about keeping workers at the heart of this. Do you think that GB Energy can help to drive the demand for skills and apprenticeships and prepare our workforce for a just transition?

Mika Minio-Paluello: There is a lot of demand at the moment, and a part of the challenge is a significant lack of supply. Part of the reason for that lack of supply is that there is a lack of investment. We as a country have not invested into our workforce sufficiently over time, which is why you get into a situation where different sectors effectively end up poaching people who are most in demand.

GB Energy provides a mechanism as part of solving that. It will not solve it as a whole—the Government have other plans as well to try put that investment in— but it can have a significant role in going, “Yes, here, we are going to provide that long-term investment directly.” Also, clearly, GB Energy will be partnering with the private sector. In that co-operation, it can then say, through its procurement powers, “Okay, in our joint project on this big offshore wind farm, we are going to require the supply chain across the board to be investing into apprenticeships, whether that is one, two or three tiers down,” so that we get that overall growth. It therefore can play a significant role there.

Mike Clancy: I have already touched on this. It might sound strange, but we probably have a bit of a mission at present because of the constraints applied by the previous Administration to remove our members in technical occupations in the energy field from the public sphere, because the labour markets that they operate in reward better in the private sector. The private sector is in a war for talent in this area because, in this country, over the many decades, we have not valued STEM skills and engineering. I speak as a humanities graduate who is always in awe of people who actually go to institutions and learn things that matter and are then applied for the health of the nation.

We have to start with valuing STEM—valuing it on a diverse basis, ensuring that the workforce reflects our diversity objectives more generally—and having a clear understanding that, even within Government, there can be an element of robbing one to pay for the other, such as with defence and aviation. Lots of areas need these STEM skills, which are then easily transferable into digital skills, and there are better salaries for some of those elsewhere.

If you want to deliver that promise about high-quality jobs, you really have to think and have a labour-market strategy for GB Energy that works in this competitive context at all levels—from apprenticeship, through to technical, through to engineering and even through to doctoral level. Again, in terms of the direction and objectives of the Bill, it is about being an exemplar for the entire energy sector in relation to the skills matrix, with how people are employed and the diversity objectives that any public company should have. That is what the Bill should try to address in sufficient detail.

--- Later in debate ---

[Torcuil Crichton]

Yes, what can the Bill and GB Energy itself do?

Ravi Gurumurthy: I have already articulated what it can do on the development side to get rid of some of the risks to do with planning, consenting, grid connection and so on. On the more novel technologies—small modular reactors, floating wind, tidal range and so on—I think we have also talked about how if the state is co-investing in some way, it signals a degree of commitment and insulates companies slightly from the risks. In both the investor and developer roles, GB Energy can play a role in accelerating things. The biggest way in which the state can de-risk investment and increase private sector contribution is through the National Energy System Operator, providing a clear, strategic plan and forward visibility of what is happening in terms of technology and location. That is how I think we will get the investment—not just in the assets, but in the supply chain as well.

Shaun Spiers: On clean, flexible power, what Green Alliance has proposed is a sort of vaccine taskforce-style operation to crowd in all potential technologies for this. It is not clear who would fund it, if GB Energy did not. That is a really important part of 2030 power decarbonisation. There is also the local power plan. The previous Government had a plan—I think it was in 2014—to power 1 million homes by community energy, which was abandoned four years later with about 67,000 homes powered. There is a clear remit here for making community energy economically viable and getting local investment in community energy.

[Wera Hobhouse]

Q I want to come back to what Shaun said a little earlier about the slight risk of the great power that the Secretary of State has. Do you think that there should be some protection in the Bill for communities, so that they can have a say? We also know that quite a lot of the delivery of our new transition infrastructure might be delayed because communities are not entirely certain, for instance. Is there a risk, and should there be something in the Bill that protects communities, so that they can be confident they are part of the transition and are being listened to?

Shaun Spiers: I think a nature recovery or nature protection duty in the Bill would be helpful in reassuring communities. The investment in community energy, where people really have a stake in the energy, will take some of the sting out of the opposition to renewables, but I would not overload the Bill with things that are better dealt with in the planning system. This is a Bill to enable a lot of investment in achieving a decarbonised power system and long-term energy security. To try to overload it with things that are best dealt with in other parts of government, or other legislation, would be a mistake.

[Wera Hobhouse]

So the Bill is sufficient in protecting communities?

Shaun Spiers: I would like to see a nature recovery duty in the Bill.

[Catherine Fookes]

Q Welcome to the participants. My question follows on beautifully from Shaun’s comments around community. How do we think that GB Energy can accelerate and drive investment in the development of community enterprise and community energy?

Shaun Spiers: One thing that is necessary to say is that this is a major part of the transition and a priority of the Government. That was the case for periods during the coalition, when there was a really vibrant community energy movement and a sense in which people were coming around to supporting renewable energy—which otherwise they would have opposed—because they could see they had a financial stake in it but had also been engaged in developing it. What snuffed that out had more to do with planning issues than with investment, but there are ways in which GB Energy can pump-prime some of the investment.

I am trying to think back to the community energy manifesto we put together in 2018. I cannot think of any specific things, but I can write to the Committee, if that is helpful. There are specific financial incentives that would help get this off the ground. To be honest, though, communities across the country were really keen on community energy. It was a vibrant movement and could be again, with the right political framework as much as investment.

--- Later in debate ---

[Josh MacAlister]

Q Dan McGrail, this is a question for you. What are the views of your private sector members about the role that GB Energy can play in de-risking investments and crowding in private sector investment? What are they saying at the moment?

Dan McGrail: Occupying space where there is a highly liquid market for private capital is unlikely to bring much additionality. Offshore wind is one of those places —fixed-bottom offshore wind, to be precise. That is a mature market; there is capital that will flow to projects if the wider investment conditions of those projects are right, and that is more Government policy-related. However, there are other markets. For example, onshore wind in England has basically been under-invested in for the past decade. There will still be nervousness within the private sector: “Do I want to be the first developer to test local planning? What does the risk profile of that look like?”

I see a clear role for GB Energy to partner with the private sector to help to accelerate the return of investment in that market, or for example within the growth of the floating offshore wind market, where there are clear opportunities that go beyond just the energy sector and into transition, such as floating offshore wind in Scotland or in the Celtic sea, where we know that there is a much bigger economic growth story. Those are areas where I think we could see public and private capital working very comfortably together.

[Wera Hobhouse]

Q We had a line of questioning around research and development. Do you think it is important that the Bill is future-proofed in that way—that GB Energy really focuses on those markets and those projects where the private investors would not come in behind? Is there any way in which the Bill could strengthen that? Research and innovation is probably one of the main focuses of what GB Energy can deliver successfully.

Adam Berman: A fundamental conundrum with GB Energy will be the extent to which, through legislation, you want to constrain its investment activities. Clearly, from an industry perspective, we are very keen that there be an emphasis on additionality, on complementing and not duplicating private sector capital that is already there.

Dan mentioned wind. The recent CfD allocation round 6 auction crowded in about £20 billion of private sector investment—that is one year and one auction. That is not to say that £8.3 billion capitalised over a Parliament is not a significant sum of money; it is to say that if we want the most bang for buck, it is absolutely about thinking about those areas where it can be complementary to the private sector. On the one hand I am saying that, yes, industry would be very happy for GB Energy to have that as a focus, but it is also fair to say that it would be a restriction in GB Energy’s activities if it were only to engage in a space that enabled additionality, because it would restrict some of the investment portfolio that it could end up with.

Dan McGrail: The private sector and the industry in general have been quite clear that we see a real benefit in the participation of GB Energy in emergent technology, such as tidal energy. However, even within the five founding statements, there is nothing specific about fostering UK home-grown innovation. I would err on the side of caution within legislation, or at least I would not put it as a boundary condition. It should not be the only thing, but if it were somewhere in the plan—either in the founding statements, if they get modified, or in the plans brought forward by the Secretary of State—that would be healthy.

[Catherine Fookes]

Q It is good to see you both. You were not here for the earlier sessions, but there were a lot of questions about whether there is enough detail in the Bill. Before I was an MP, I used to be the CEO of a charity; if the objects of that charity had gone into an incredible amount of detail telling me exactly what to do, it would have been very difficult 10 years down the line, when I joined the charity, to pivot and do what we did. I think you are absolutely right: we are hearing from every single witness that the Bill needs to be general enough to allow the business plan to be developed by the experts running the company. You are chiming with everyone else, which is interesting and good.

My question is about tidal power. I represent a Welsh constituency, Monmouthshire. We have the River Severn in the south of the constituency, which is a tidal river, and we have the Celtic sea. What opportunities will the Bill give to generate more tidal power?

Dan McGrail: The Bill allows space for GB Energy to take quite an activist role in the sector. I am aware of tidal power companies that are already very keen to engage with GB Energy on specific proposals. One thing about tidal power is that we have seen the success of many projects through the CfD auctions. We need to see them come to investment decisions. The more we can see a state actor enabling companies to take decisions, the more it will help to scale up the industry and then the technologies. From the technologies, we can hopefully deliver the kind of supply chain growth and jobs in local communities to which we all aspire.

Carbon Capture, Usage and Storage

Wera Hobhouse Excerpts

Monday 7th October 2024 Commons Chamber

[Ed Miliband]

My hon. Friend is entirely right. The challenge for the Government, and for the companies that have won these contracts, is to make sure that we create jobs in the supply chain, including in her constituency. I look forward to meeting her to discuss this.

[Wera Hobhouse (Bath) (LD)]

Waste incinerators release, on average, a tonne of CO₂ for every tonne of waste incinerated. They are usually called “energy from waste” but their environmental value is questionable unless carbon capture is attached. Yes, we need to recycle more, but energy from waste will be with us for years to come. Will the Secretary of State commit to significantly scaling up carbon capture for energy from waste plants?

[Ed Miliband]

The hon. Lady is absolutely right, and it is why one of the projects we funded is an energy from waste project. This is exactly the kind of role that CCS can play.

COP29: UK Priorities

Wera Hobhouse Excerpts

Tuesday 10th September 2024 Westminster Hall

[Wera Hobhouse (Bath) (LD)]

I congratulate everybody who has contributed to this important debate. Many different points were made, and all were made well and passionately.

The new hon. Member for Ealing Southall (Deirdre Costigan) was absolutely right to say in her passionate opening speech that it is unacceptable when Governments make international agreements and then do not honour them. That is not only catastrophic for our climate action but it undermines our international reputation.

The hon. Members for Bristol Central (Carla Denyer) and for Stratford and Bow (Uma Kumaran) were absolutely right to say that the UK has a huge responsibility to show climate leadership.

The hon. Member for Whitehaven and Workington (Josh MacAlister) made a strong plea for developing our nuclear capacity. I, too, am not entirely certain about his point, but I am sure the Government will be able to persuade us on that—or not, as the case may be.

The hon. Member for Strangford (Jim Shannon), who never misses an opportunity to speak in debates about net zero, spoke up for the nations that are being left behind and made the point that we need to bring everybody with us. I do not agree with everything the hon. Gentleman says about climate change, but we definitely agree on that point.

The hon. Member for North Herefordshire (Ellie Chowns) asked the Government what progress we are making on energy efficiency in housing. She made her point well, and it has very much been heard by us Liberal Democrats.

I pay tribute to my hon. Friend the Member for South Cambridgeshire (Pippa Heylings) for her intervention, in which she said that we need, and should work towards having, a climate envoy at COP29.

Last but not least, we heard powerful points on the importance of water, which is becoming a massive issue with climate change, as water shortages will drive a lot of displacement. Those points were well made.

The UN is not a world Government, and COP can work only on a consensual basis. Effective diplomacy is therefore essential in coming to arrangements. Although the agreements made at COPs are not legally binding, we must not underestimate their importance in setting the global agenda on climate change. COPs are also crucial to getting polluters to engage with climate-vulnerable countries, many of which have been severely impacted by climate change and are on the brink of climate catastrophe.

COP28 resulted in countries agreeing to “transition away” from fossil fuels, using the strongest language ever used in respect of the phasing out of fossil fuels. This marked a significant step forward. Regrettably, despite excitement that the COP28 agreement saw the beginning of the end for fossil fuels, the actual text was undermined by loopholes and was flawed given the absence of timescales. That means there is even more emphasis on the upcoming COP29 summit, which will be more important than ever. Strengthening the wording on the acceleration away from fossil fuels must be the first priority. That will require rapid and sustained emission reduction, and increasing renewables will be crucial.

The Liberal Democrats absolutely agree with the Green party about the focus on renewables. At COP28, a commitment was made to triple renewable energy. The commitment marks progress; now, action must follow. Climate finance must be increased if the agreements of COP28 are to be honoured.

Here at home, I urge everybody to support the climate and nature Bill. Nature is critical for effective climate action, and biodiversity is our greatest natural defence against climate change. The CAN Bill would require the Government to rapidly reduce our carbon footprint and protect and restore ecosystems, and would ensure that the Government take responsibility for the environmental damage caused by our supply chains.

Halting and reversing deforestation made it into the final text of a COP agreement for the first time at COP28, with Governments agreeing on the need to halt and reverse deforestation by 2030. But forests continue to be decimated for crops. Reversing deforestation is also a responsibility for importing countries such as the UK, which must eliminate deforestation from their supply chains. Deforestation must be a big focus for COP29, and ideas such as a compensation fund for conserving standing rainforest should be part of the discussion.

No country should be left behind in our shared goal of halting warming. Article 6 of the Paris agreement is all about helping countries to work together to meet their climate goals through the voluntary transfer of carbon credits. At COP28, we were unable to finalise this; we look ahead to COP29 to make it easier for countries to collaborate on lower emissions.

Finalising the new collective quantified goal on climate finance must also be a focus. The NCQG aims to set a new financial target for supporting developing countries in their climate actions. The timeframe for the goal is crucial: a short goal will inspire a sense of urgency to get finance flowing where it is needed.

It is reassuring that the new Government have committed to ending licensing for exploring new oil and gas, and I hope Labour will take this promising start on to the world stage and negotiate for an agreement that goes further and faster than the agreement made last year. It is particularly important that the more developed nations remain the driving force behind the global journey to net zero, setting a good example and bringing the international community along with us.

At COP28 we understood that COP’s work was based on three pillars of action: mitigation, adaptation and loss and damage. Mitigation is where we have made reasonable progress; adaptation is the next challenge.

The second pillar of climate change is adaptation. It is essential to adjust to climate change as it is happening. As we speak now, we see it everywhere. The Climate Change Committee has advised that the gap between the level of climate risk we face and the level of adaptation under way has widened in the past few years. Estimated adaptation costs in developing countries are five to 10 times greater than current public adaptation finance flows. At home, sea levels could rise by over a metre by the end of the century.

The more we put off adaptation measures, the more difficult and expensive it will be in the future. National adaptation plans or NAPs—another acronym—are a vital part of this. COP29 must focus on financial and technical assistance, and close the adaptation finance gap. Another part of the COP28 agreement that needs action is the overreaching global goal of adaptation. A long time in the making, that agreement is welcome, but its framework does not adequately address the financial support needed. The GGA requires quantified, measurable targets to mobilise finance.

The third and final pillar, and the one of most importance if we look around the planet, is loss and damage. The launch of the loss and damage fund at COP28 was a breakthrough: it marked an important step in Britian’s relationship with climate-vulnerable countries. However, the money that was pledged was miserable. It is shameful that we, a rich nation, could not come up with more. COP29 should establish long-term commitments from countries to make adequate annual contributions.

Under the previous Conservative Government, the UK’s contribution to the loss and damage fund came from pre-existing climate finance commitments and the foreign aid budget. Foreign aid is vital, but it is separate from climate action; it is about education, health and so on. To put the two together was either cynical or a huge misunderstanding; it makes a mockery of the whole principle. The idea of the fund is that richer nations should support poorer ones, no strings attached. Simply redirecting pre-pledged finances to the fund was a real dereliction of duty. COP29 is the moment for countries to stand by their pledges by announcing concrete steps to achieve them. The implementation of the fund must be led by the needs of countries vulnerable to climate change, rather than the interests of donor countries.

To conclude, national and international action on climate change is not a nice-to-have luxury, but an imperative to avoid the inevitable destruction of livelihoods around the world and the potential of large-scale conflict and mass displacement. The stakes could not be higher. We might have to reinvest a fraction of our wealth, but the benefits of that are immeasurable.

[Mark Garnier (Wyre Forest) (Con)]

It is a pleasure to serve under your leadership, Dr Huq, and to respond to the hon. Member for Ealing Southall (Deirdre Costigan), who gave a passionate speech. I have been a Member of Parliament for 14 years, and it is a great joy to see so many new Members present for the debate and contributing to it. All the speeches so far have been by new Members, with the exception of that by the hon. Member for Strangford (Jim Shannon)—a regular feature that new Members will get to know well. Parliaments need to refresh, and we have seen a great refreshment over the last election. It is a delight to respond to some very passionate and thoughtful speeches.

The hon. Member for Ealing Southall raised a point that we all agree on, and which is the most important thing to remember: all of us in every part of this House want to achieve net zero, become carbon-neutral and get to a point where we are not relying on fossil fuels; but at the end of the day, we have to look at how we achieve that. It is the detail that I suspect we will find ourselves disagreeing on.

As we discuss the future of our climate commitments, it is essential that we recognise the substantial progress that the Conservative Government made over the last few years. There have been a lot of speeches about how we have not done well, but I remind the House that we had some successes. From 2010, the Conservative Government led the way on climate change by making the UK the first major economy to legislate a 2050 net zero emissions target. We achieved a remarkable feat: the UK cut its emissions by 50% between 1990 and 2022, while growing the economy by 79%. That is a clear demonstration that we can achieve economic growth while reducing our carbon footprint—a very important point. It is worth putting that in perspective. During the same period, France reduced its emissions by only 23%, and the USA saw no change in its emissions between 1990 and 2021. The independent Committee on Climate Change affirmed that our net zero target was feasible, deliverable and could be met at the same cost that was estimated for our previous target of an 80% reduction.

Since the election, there has been much discussion on the plans to make the grid carbon-neutral by 2030, yet since coming to power the new Labour Government have been relatively quiet on their plans for net zero targets—something that I hope the Minister will change today. We are looking at net zero, not making the grid carbon-neutral, but if the Government’s plans to decarbonise the energy grid are anything to go by, we could face the risk of being over-ambitious. That means they may leave working families faced with the prospects of picking up the bill, and I hope the Minister today will be honest with the public about the costs and the trade-offs that will be involved.

The Opposition believe it is vital that the Government take a more pragmatic, proportionate and realistic approach, to ensure sustained public support for our goals. That is an important point—we have to win the support of the public in doing this. Otherwise, the current Government may find—as we did—that if they get things wrong, there may be a change in Government and a different approach could be brought in by an electorate who do not necessarily understand the technicalities of achieving net zero.

Before I go into the latest rounds of negotiations in Baku in November, I want to reflect quickly on our global leadership, as well as the success we had at COP26 in Glasgow. It is worth mentioning that Alok Sharma, who was the president, took his seat in the House of Lords yesterday. He attended Cabinet in the last Government and acted as a quasi climate envoy—a point that a number of people have raised. So we did have somebody championing the climate in Cabinet, and he is now in the House of Lords and will continue doing so.

The historic Glasgow climate pact ensured that we kept alive the 1.5 degree commitment. Since the UK took over the COP presidency, over 90% of the world’s GDP is now covered by net zero commitments, and that is up from 30%. More than 153 countries have put forward new 2030 nationally determined contributions, which effectively amount to climate plans. Record levels of finance have been pledged to help countries adapt to the effects of climate change through the adaptation fund and the least-developed country fund, both of which were established under the UK presidency. Finally, after six years of negotiations, we confirmed the Paris rulebook, which sets out the instructions and products needed to fully implement the Paris agreement on climate change.

Looking ahead to COP29, we need to focus on balancing our ambitious climate goals with the realities faced by British families and businesses. As a Conservative Government, that meant that we were committed to practical adjustments where necessary, but British families still want to know where a Labour Government stand with the net zero plans. Will they stand by their manifesto commitment to reverse the extension on the ban of petrol and diesel cars from 2030 to 2035? Will they commit to moving homes from gas boilers to heat pumps? How will they help landlords in getting homes ready for their new minimum energy performance certificate requirements? How will they manage to maintain energy security and independence for the UK while banning the extraction of oil and gas in the North sea? I know that point has been raised on many occasions, and the co-leader of the Green party, the hon. Member for Bristol Central (Carla Denyer), raised a very important point about Rosebank and what is going on in the North sea.

While the hon. Lady was making her speech, I checked how the grid was using energy. At 9.45 am we were using about 30 GW of power. Wind accounted for 37.5% of that, which is fantastic, but gas was 17%, nuclear was 16% and solar was 7.5%. We were importing 16.3% from Denmark—where the state of green energy is fantastic—Norway, France, Holland and Belgium. The bottom line is that we all want to get rid of fossil fuels, but we do not want to be reliant on foreign fossil fuels. That is a vulnerability, and that is why we have to be pragmatic. I absolutely take the hon. Lady’s point about getting away from Rosebank, but we do not want to be importing from Russia. We want to have security as we transition to net zero. That is a really important point.

In his speech on nuclear, the hon. Member for Whitehaven and Workington (Josh MacAlister) raised the most important point about this: what we need is dispatchable baseload power. We must have dispatchable baseload power, and wind and solar do not provide that.

[Wera Hobhouse]

The hon. Gentleman just said “dispatchable” baseload power, and that is exactly what nuclear is not. If we just have a baseload that trundles along, renewables will be the ones we turn off and the nuclear will keep going; that is a waste of a lot of renewable energy, and it already happens. Does not the hon. Gentleman agree that we need to rethink our idea about baseload as we move into a more flexible, renewable world?

[Mark Garnier]

The hon. Lady is absolutely right.

Great British Energy Bill

Wera Hobhouse Excerpts

2nd reading
Thursday 5th September 2024 Commons Chamber

[Ed Miliband]

My hon. Friend is a great champion for his area and he is right. I am sure he reflects the feelings of every right hon. and hon. Member, whatever side of the House they are on, that there are huge opportunities in this sector. We intend to exploit them. I look forward to seeing his constituency.

[Wera Hobhouse (Bath) (LD)]

rose—

[Ed Miliband]

I will make a bit more progress. I have set out our case—a case that the British people overwhelmingly support. According to post-election polling by More in Common, Great British Energy was supported by an overwhelming 73% of voters and opposed by just 8%. It appears from the Conservative’s reasoned amendment—so-called—that Conservative Members will vote against the Bill today. If they do that, they will do something remarkable: they will go one step further than refusing to listen to the people who did not vote for them by refusing to listen to the people who did vote for them—quite a remarkable feat by an Opposition—because Great British Energy was supported not just by Labour voters, but by Conservative voters by a majority of four to one—56% to 14%.

--- Later in debate ---

[Ed Miliband]

I will make a bit more progress. [Interruption.] Conservative Members are still in the “the show was great but the audience was poor” stage of Opposition. Let me give them some advice—they will get out of that over time, but they are in the early stages now.

Because I get my kicks in strange ways, for a bit of light entertainment, I have been reading what the Conservative party leadership candidates have been saying. It is really interesting, honestly; it is quite fun reading. [Interruption.] Yes, somebody has got to do it. The right hon. Member for Tonbridge (Tom Tugendhat) said that people

“will never vote for a party that they have stopped taking seriously.”

Well, that is true. He said they should be

“given credit for seeing the errors that we may make and correcting them.”

Correct. The right hon. Member for North West Essex (Mrs Badenoch)—I believe the shadow Minister, the right hon. Member for East Surrey (Claire Coutinho), is the mastermind for her campaign—said it was no good

“having the same policy arguments from the last Parliament.”

The shadow Minister should take those words to heart.

I agree with those candidates that the Conservative party needs to move on. I am in a generous mood, Madam Deputy Speaker. I have been involved in leadership campaigns, so I have some advice. I have a free idea for the not very famous five still left in the Tory leadership competition: back an idea that the public support. Back an idea that Conservative voters support; back an idea that Labour voters support; back an idea that Reform voters support—Reform Members are not here. Back an idea that Liberal Democrat voters support. They should move on from the arguments of the last Parliament, show a bit of bravery—even break the Whip and stand out from the crowd. They should break from the past and back our Bill today.

[Wera Hobhouse]

The Secretary of State knows I share his passion and ambition to get to net zero. One big concern about GB Energy is that it will crowd out, rather than crowd in investment. Will he enlarge on how he intends to crowd in investment into green energy?

[Ed Miliband]

I am very surprised by the Liberal Democrats saying that. It is slightly “orange book” Liberal Democrats, if I may put it that way, for those old enough to remember. I say respectfully to the hon. Lady and all Members of the House: look around the world at what is happening before our eyes. There is catalytic public investment—public investment levering in private investment. The whole old fashioned, free market 1980s argument about crowding out turns out to be wrong. Just look at what is happening in America. Why is the money flowing to the United States? In part, because of the catalytic public investment. [Interruption.] I can see Opposition Members are going to be slow learners.

Great British Energy is at the heart of our long-term plan to accelerate the transition to clean energy and ensure we are never at the mercy of volatile fossil fuel markets again. It will speed up delivery, create good jobs and protect family finances, and we will reap the benefits for generations to come. I commend the Bill to the House.

--- Later in debate ---

[Claire Coutinho]

If the hon. Lady would bravely like to say that the company will generate energy, I am sure that she would like to tell us how much, because no one else seems able to.

[Wera Hobhouse]

Will the right hon. Member give way?

[Claire Coutinho]

I am sorry, but I will make some progress.

Finally—this is really important—the Secretary of State pays lip service to nuclear, but we know that when Labour was last in power it did not start a single nuclear power plant in all its 14 years. All summer, there has been an eerie silence. On the capital raise for Sizewell C, which should be out by now—nothing. On the small modular reactor competition, which should be deciding its final projects now—nothing. We committed to a third large-scale nuclear power plant at Wylfa—again, nothing. We wrote to the Under-Secretary of State for Energy Security and Net Zero, the hon. Member for Rutherglen, but once again he has refused to confirm any detail or, with regard to Wylfa, whether those plans are even in place. Can the Secretary of State say whether the creation of GB Energy is slowing down those projects and causing the timetable of these programmes, which will provide clean, cheap energy, to slip?

--- Later in debate ---

[Claire Coutinho]

That is a very fair question. I hope that the energy Minister, who I assume will wrap up the debate, will be able to provide some detail.

Far from being a super-nerd, the truth is that the Secretary of State is the ultimate career politician. He comes up with big titles and makes big promises to the public, but he has no idea how to deliver. My big fear—[Interruption.] He should listen, because it is an important point. My big fear is that he is losing focus on all the amazing technologies that will come online after 2030, whether it is fusion energy, the next generation of nuclear reactors or carbon capture. These are the innovative new technologies that will not just deal with the 1% of emissions in the UK but the 99% produced overseas. In Government, I focused a lot of my time on speeding up the development of those technologies. We launched the £1 billion green industries growth accelerator specifically to reduce any supply chain constraints, for example on cables. We provided almost £200 million to help the UK become the first commercial producer of advanced nuclear fuel outside Russia. We were making Britain one of the most exciting places in the world for fusion energy development, with £600 million of funding.

[Wera Hobhouse]

I thank the right hon. Member for giving way—finally. She is criticising the Government for the rushed target of decarbonising the grid by 2030. Can she enlighten the House on when the Conservative party would do it?

[Claire Coutinho]

I will. This is a critical point, which I have made in recent weeks. The point about having longer to decarbonise is that it gives time to develop British supply chains. That is exactly what I was doing. The green industries growth accelerator and some of the other things that I have talked about gave us time to set up British companies. Those things cannot be done in five years. There is a need to get project finance, to hire workers and train them, and to get planning permission. There is a huge amount that needs to be done. The fact that the Secretary of State wants to rush the transition and make it happen at breakneck speed is risking British jobs and livelihoods, and making us dependent on Chinese supply chains.

The Secretary of State has promised many things with the Bill, but he simply cannot set out any detail about the things that he wants to deliver. It would be a blank cheque for £8 billion of taxpayers’ money, with no plan, no evidence, and no numbers for the bill savings or profits that he has been promising the British public. That is why we cannot support the Bill as it stands.

--- Later in debate ---

[Wera Hobhouse (Bath) (LD)]

I congratulate the new hon. Member for Clwyd East (Becky Gittins) on a wonderful whistle-stop tour of her constituency, from wonderful dog walks to rowdy cows in fields and fascinating museums that testify to the history of her constituency. We lived in Liverpool for 10 years, many years ago, and we visited her constituency many times and had wonderful days there. I know how beautiful it is.

Championing renewable energy is in our DNA as Liberal Democrats. Renewables are clean, cheap and popular. We welcome the fact that the new Government are turning around the damaging attitude taken by the Conservative Government and are attempting to make the UK once more a global leader in getting to net zero. We are absolutely on the side of the Government when it comes to the ambitious targets that are being set to get to net zero. We are pleased that through the Bill new steps are being taken to restore British investment in the green economy. The Bill must ensure that renewable energy and home insulation can be rolled out at speed so that we meet our climate targets, bring down energy bills and provide green, well-paid jobs in the future.

The previous Conservative Government’s obsession with oil and gas left us in a mess. The dithering, delaying and even denying of the Tory Government held us back. I have often said that net zero is not like a bus that we can miss and say, “Whoops! We’ll get the next one.” This is a target that we cannot miss, and delaying is just as bad as denying that climate change is happening at all.

[Graham Stuart]

Will the hon. Lady give way?

[Wera Hobhouse]

I am happy to give way; the right hon. Gentleman and I have had many discussions on this issue.

[Graham Stuart]

I wonder whether the hon. Lady knows of a single major economy on the planet that went faster than the previous Conservative Government in cutting emissions.

[Wera Hobhouse]

I am happy to respond to that, because I do believe that the UK was a global leader. There was cross-party agreement about net zero, but the last Government broke that agreement. That is our problem. Each year and each month matters when it comes to setting the pace to get to net zero. Instead of producing our own renewable energy, we were left reliant on fossil fuels—the energy of the past—and on dictators such as Vladimir Putin. In this unstable geopolitical environment, that was a death sentence and led to the catastrophe of the recent energy crisis.

Families are once again worried about another dramatic energy bill increase—we say that honestly to this Government and want to work with them on this issue—this time of £140 on a typical family’s annual energy bill. Pensioners are also rightly concerned about the Government’s plan to cut the winter fuel allowance for millions of the poorest and most vulnerable people. I raised the matter in business questions earlier and said what is important to us. We of course recognise that through the pension increase next April there will be relief for pensioners, but this winter, when things have become really difficult for pensioners, the Government should not make cuts before we have seen the benefits. We have been making that point and hope to work constructively. It is a political choice and, in our view, it is the wrong one, but it is pretty rich of the Conservative party to complain.

It is clear that if we are to hit our net zero targets, we must drive up investment in renewable energy. The Climate Change Committee’s 2024 progress report found that policy reversals and delays, together with inconsistent messaging, hindered progress just when acceleration was needed. Only around one third of the emission reductions required to meet the 2030 target are covered by our current plans. I challenged the shadow Secretary of State on what the Conservatives’ plans for decarbonising actually are, but we have had no answers. We must, for example, at least triple the operational capacity of offshore wind installations to meet our 2030 targets—and we Liberal Democrats absolutely believe in the 2030 targets.

New first-in-class renewable energy technologies are coming on the scene thick and fast, and the Government must find better mechanisms for funding them than we currently have in place. One example, if I may bring it up, is DRIFT Energy, which is based in my Bath constituency. I hope the Secretary of State is listening. DRIFT uses sailing ships to travel to the deep sea to harvest deep ocean wind and generate green hydrogen. Interesting technology is coming on board, but these new technologies still face many investment problems. The green hydrogen is then delivered to ports around the world—they are essentially fishing ships for energy. Truly novel technology like this does not fit neatly under a Department, so it becomes exceptionally hard to win grants, let alone multimillion-pound grant support. It is important that we are aware of that.

[Max Wilkinson (Cheltenham) (LD)]

Does my hon. Friend agree that we need the Bill to look at and include schemes like the Cheltenham green deal, run by Cheltenham borough council, through which local organisations that could not otherwise fund green schemes are able to access funding borrowed by the local council? Such schemes will then make money and provide a return for the taxpayer so that local areas can start producing more renewable energy for themselves—for example, through the investment in solar panels on the roof of Cheltenham Town football club.

[Wera Hobhouse]

As I progress with my speech, my hon. Friend will hear that our focus on local authorities, local decision making and local involvement is crucial. Let us ensure that our emerging technologies, which have the potential to be hugely valuable, are not overlooked or forced to seek support from abroad.

[Mr Gideon Amos (Taunton and Wellington) (LD)]

Does my hon. Friend agree that the Secretary of State should take on board one of the emerging technologies that could deliver the most for Great British Energy: the potential for tidal range energy? In a previous life, I was responsible for the consenting of the Swansea tidal lagoon, which unfortunately the previous Government failed to fund. It is the second biggest tidal range in the world and could be a massive success story for Great British Energy and the UK. Does she agree that the Secretary of State should take that on board as a key objective of Great British Energy?

[Wera Hobhouse]

I totally agree, and I am sure that the Government will agree too. A lot of these decisions are ultimately about value for money; as these tidal range technologies come on board, they can become cheaper. I hear the Government are saying that this is exactly the plan: that, where it is currently expensive, Great British Energy can come in and provide support. We understand and support that principle.

This new Government must ensure that they have clear and consistent messages. Delays to the phase-out dates of fossil-fuel vehicles and boilers, as we saw under the last Government, have sent mixed signals to investors, businesses and consumers. We hope that GB Energy will go some way in providing confidence to other investment bodies and the wider industry that Britain’s green economy is open for business.

We Liberal Democrats realise the importance of community buy-in. The new Government must put local voices at the centre of the journey to deliver net zero. We need to win hearts and minds to persuade people that net zero projects are good for their communities, for their pockets and for our future national economy.

[Sarah Dyke (Glastonbury and Somerton) (LD)]

The Government have said that they believe communities that host renewable energy infrastructure should benefit from it, but there are currently no ways to force developers of on-ground mounted solar panel farms to provide community benefits. Does my hon. Friend agree that the Government should use this Bill to make provisions for guaranteed community benefits in these circumstances?

[Wera Hobhouse]

We have already had some detailed discussions about what we are doing with communities that have to host vital infrastructure, and it is important that the Government assure local communities and the Liberal Democrats that this will happen. As the Bill progresses, we need to discuss how we can get legal assurances and whether the Bill is the right place for this.

As I have said, we need to win hearts and minds to persuade people. Only with local consent can we successfully deliver the path to net zero, which is why we have called for communities living near large-scale infrastructure projects to receive community benefits—for example, through reducing energy costs and funding local initiatives. We are keen to work collaboratively to ensure that these benefits are in place in legislation.

We Liberal Democrats welcome the inclusion of clause 3, which lists specifically all the objects of GB Energy. Although those aims all have their merits, the Government have failed to include anything on community energy. That is especially disappointing—[Interruption.] May I continue? I will lay this out as I understand it—I worked on the all-party parliamentary group for community energy, and I will get to my point. It is especially disappointing that the new Government have failed to include anything on community energy, given their welcome words in the House about how important it is to enable community energy—I hear it again and again. It is no longer about words; we now have a Bill before us in which we can make this happen.

I will lay out what I think is necessary. Without the inclusion of community energy, the Bill will be a major missed opportunity. In the past, the now Secretary of State and his Ministers have been vocal champions of community energy. In a previous debate on making Britain a clean energy superpower, the Under-Secretary of State for Energy Security and Net Zero, the hon. Member for Rutherglen (Michael Shanks), stated:

“One of the missions of GB Energy will be around the idea of community-owned power.”

He has also advocated for local communities to have

“some sense of ownership of the assets”—[Official Report, 26 July 2024; Vol. 752, c. 942.]

that they generate. Last year, the Secretary of State himself tabled two enabling amendments on community energy to the then Energy Bill; his new clause 53 specifically would have required large-scale energy suppliers to offer a special agreement to small-scale energy companies. He has spoken at length about Labour’s local power plan, much of which we are in agreement with, but where is the commitment to community energy in this Bill?

The biggest issue we identify is that energy supply licensing conditions hinder small community energy projects from selling directly to consumers. In turn, this makes it difficult to retain advantages for local communities—discounts on their energy bills, for example, or raising new money to invest in new projects. The high burdens and costs currently involved in being a licensed energy supplier mean that not a single community energy project in all the UK can sell its power directly to local people. Locally sourced energy does not travel further across the nationwide grid, and therefore reduces that constraint on it, but the cost-benefits of selling locally produced energy to local consumers are not going to community projects and nor do they benefit the consumer. That must change. Regulatory changes are required; the Government must put them in place or stop talking about their support for community energy.

Community energy schemes need to receive a guaranteed, discounted price for the clean electricity that they contribute to the energy system. If the costs of selling their power to local households and businesses were proportionate, many more community energy schemes would become financially viable and we would get many more than we have; I urge the Government to really look at our concerns and what we can include in the Bill to make these regulatory changes. Clause 3 is the ideal place to add community energy and ensure that it is one of Great British Energy’s objects.

To conclude, we Liberal Democrats welcome the steps being taken to restore British investment in renewable energy after the mess left by the previous Government. These steps will help us to bring down energy bills, create high-quality jobs, increase our energy security and, of course, reach net zero. However, there is a clear gap in this Bill for community energy, despite Labour’s manifesto committing to it, and we urge the Government to listen to our concerns.

[Several hon. Members rose—]

--- Later in debate ---

[Sir Bernard Jenkin (Harwich and North Essex) (Con)]

Let me be the first to congratulate the hon. Member for Northampton South (Mike Reader) on his maiden speech. He has demonstrated in two ways that he is quite a rare beast. Being an engineer is not a widely held profession in this House, and he will no doubt bring great value with that expertise and experience, but his business experience is also extremely valuable. I am afraid that if he looks around him on the Labour Benches, he will see precious few people with any business experience—as the Secretary of State has shown with his Bill.

The Bill is about setting up a shell company. That is it. The idea that that constitutes an energy policy is a complete myth. In fact, the Government have not even produced an energy policy. There has not been a White Paper on UK energy policy under this Government. There are no pages full of data and numbers to give us any confidence that the Government know what they are trying to achieve, how they will achieve it, or what the risks are.

In fact, that was given away in an astonishing letter that the Secretary of State wrote to the director of the electricity system operator, asking for all the information that one would expect the Government to have given that this was a major platform in their manifesto. [Interruption.] The Under-Secretary of State for Energy Security and Net Zero, the hon. Member for Rutherglen (Michael Shanks), shakes his head—I will give way to him if he wants to intervene—but where are the numbers? Where is the data backing up this wild assertion that just going all out for renewables will provide security of supply and lower energy costs? It is a mantra that Labour Members keep repeating to themselves with increasing enthusiasm and vehemence to make up for the fact that they have no numbers to back up their assertions.

Let me be clear about one thing: I am an advocate of achieving net zero. I believe in the target of net zero by 2050—indeed, I am a member of the net zero all-party parliamentary group. When Members hear me speak, they are not listening to some luddite or climate change denier. I want this policy to work, but there are very considerable risks, which are evidenced by reading between the lines for what is not in the Secretary of State’s letter and what is clearly flagged in Fintan Slye’s response to it.

[Wera Hobhouse]

Does the hon. Member not recognise that under the previous Government, the UK was falling badly behind on investment, when other countries— particularly the US—had transformed the investment that they were drawing in by making very big Government commitments to some projects, particularly nascent ones? Does he not recognise that that sort of Government support makes a big difference to business confidence?

[Sir Bernard Jenkin]

I do not agree with that, simply because we have seen massive investment in renewables over the past 14 years, as the former Minister, my right hon. Friend the Member for Beverley and Holderness (Graham Stuart), and the shadow Secretary of State, my right hon. Friend the Member for East Surrey (Claire Coutinho), set out. We have been making fantastic progress with bringing renewables on stream, but there are considerable questions to ask. I wish it were as simple as setting up a shell company and saying, “We are going to get the state to do everything”, but I am afraid it is not. As the shadow Secretary of State pointed out, Ørsted and EDF make massive losses, and either the taxpayer has to pay for those losses or those costs go on to electricity bills.

The Secretary of State announced on Tuesday that we have got all this renewable capacity coming on stream—enough to power 11 million homes. That is if we match the maximum capacity of the renewables with the average annual demand of those homes, but of course renewables are intermittent. It seems such an obvious thing to say, but we have to say it: sometimes the sun is shining, sometimes the wind is blowing, and sometimes we have enough water for hydroelectric power, but sometimes not. In the winter months, solar makes very little contribution—it makes no contribution in the dark, at night. [Interruption.] It may seem obvious, and the hon. Member for Stroud (Dr Opher) may laugh, but we need to point these things out, because when the Secretary of State says that renewables are cheaper than fossil fuels, he is comparing the strike price with the cost of buying marginal supply capacity when we need that extra marginal supply.

The strike price will not be reflected in our electricity bills, because we have to add in other things, such as system balancing costs. We have to add in grid infrastructure costs, because renewables require massive investment in grid infrastructure. We have to add in the costs of importing through interconnectors when we do not have enough domestic supply. We have not begun to factor in storage costs—the storage capacity of our electricity system is still miniscule. Members should read the Royal Society paper on creating electricity storage in this country: it is going to be astronomically expensive, and will probably still not be enough. Then there are constraint payments—oh, yes, the constraint payments. This year, we are paying £500 million to renewable producers under the contracts for difference scheme not to produce electricity when they can produce it, because that is how the system works. That is how we have attracted so much investment, but those payments are going to be about £1.5 billion next year.

I would like the Government to produce some forecasts. How much will the balancing costs be in each year over the next 10 or 15 years? How much grid infrastructure investment will need to be funded? That appears on our electricity bills—it is the standing charge, and boy, that charge is going to go up with all the infrastructure investment that we will require. How much will we have to spend on importing electricity? The two interconnectors coming into East Anglia as part of the Norwich to Tilbury programme will be importing electricity. They are not for exporting, because the only security of supply we will have if we have shut down all our combined cycle gas power stations by 2030 is from other places.