Energy Bill [Lords]

Alan Whitehead Excerpts

Report stage
Tuesday 5th September 2023 Commons Chamber

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. As Members can see, there is great interest in this debate. I am therefore pondering exactly what the time limit will be. Members will be informed just before Dave Doogan speaks, I believe. [Interruption.] It will not apply to the Labour Front Bencher; the hon. Gentleman can be relieved.

[Dr Alan Whitehead (Southampton, Test) (Lab)]

The Minister is quite right: the Bill has been with us for rather a long time. I am personally delighted that it is before us this afternoon, but we need to remember that Second Reading was over a year ago, in July 2022, in another place. The Bill has survived four Secretaries of State and two Departments in its passage through the House, so it certainly should be an improved Bill by now. I am concerned, however, that the long passage of the Bill to the statute book has had a real effect on investors and various other people seeking to invest in the low-carbon economy. We should not forget that.

What is this Bill about? As the Minister has said, it is essentially about the decarbonisation of the energy system and making that system fit for net zero. It is, overwhelmingly, a Bill that enables that decarbonisation to take place, and it has been described in a number of instances as a “green plumbing” Bill, which I think is not a bad description. It provides the necessary mechanisms and the details of how we will reach our targets in a variety of areas, as the Minister said: on hydrogen, on carbon capture and storage, on licensing, on the introduction of an independent system operator—which is very important to good construction—on low-carbon heat schemes, on district heating, on energy-saving appliances, and on fusion power. It also makes a number of regulation changes in relation to civil nuclear decommissioning and oil and gas management. It is, moreover, a Bill that the Opposition have welcomed, both for its extent and for its “green plumbing” activities. We were supportive of its measures in Committee, while also tabling amendments that we thought would strengthen its approach. Indeed, the Government have inserted some of them in the Bill, with very slight changes, and we welcome that as well.

However, in my view the Bill is incomplete and unsatisfactory, given its ambition as a green decarbonisation Bill, in that it fails to complete the three tests, or tasks, that are necessary to provide the clarity and consistency that would ensure that the policy will deliver what is claimed. Those tests are these. First, what are the targets for a policy, and how firm are they? Secondly, what are the technical means whereby the proposed targets can be actioned? Thirdly, what is the plan, both financially and procedurally, to make the targets real and not just hot-air aspirations? It is essential to the process of energy decarbonisation for all three of those tests to be in the Bill as we proceed against very tight timescales and immense challenges of implementation.

In some instances, the Bill has succeeded in that regard. The Government’s targets were set out in a number of documents on clean energy, such as the energy security strategy and the 2020 Energy White Paper. Indeed, in a number of instances, the targets contained in those documents have been substantially added to in the Bill. For example, the target of 10 GW of low-carbon hydrogen production by 2030 has been underpinned by the clauses relating to such matters as hydrogen levy management procedures. I applaud the Government’s change of heart on the hydrogen levy. Although a number of Committee members knowingly voted the wrong way, with the honourable exception of the right hon. Member for Elmet and Rothwell (Alec Shelbrooke), the Government have put that right now. We would have liked to see them go a little further with a clear statement that the money would come from the Consolidated Fund, but we will live with the change that they have undertaken to make. I think we can count that as both a win for our pressure on the Bill and a win for the Bill itself.

[Caroline Lucas]

I agree that those three tests for decarbonisation make a lot of sense, but does the hon. Gentleman agree that as well as targets for some of the good stuff, we need to see the Government stop doing the bad stuff? In this case, the bad stuff is more and more new licences for oil and gas in the North sea. Would Labour support my amendment, which would see an end to the MER rule on maximising the economic recovery of petroleum and replace it with a just transition to a greener economy? As long as we have a statutory duty to maximise the economic recovery of oil and gas, it does not matter how many targets we have on renewables, because we will not meet the targets that we need to meet.

[Dr Whitehead]

I do not think it would be appropriate for me to indicate exactly which amendments from various Members we might or might not support, and it would take a great deal of time for me to do so, but the hon. Member will recall that we tabled an amendment on maximum economic recovery in Committee. I think she can take from that that, broadly speaking, we support the principle of “stop doing the bad things and start doing the good things”. Whether the detail of her new clause fits exactly with that picture is another matter, but I hope she can take some encouragement from that.

[Sammy Wilson (East Antrim) (DUP)]

Does the hon. Gentleman accept that, while the Government may have set out the high-level ambitions and targets, they have failed to highlight the cost of this Bill to ordinary constituents? I think, for example, of the cost of bringing properties up to certain energy efficiency levels, the size of the hydrogen levy and who will pay it when it is introduced, the cost of sustainable aviation fuel to the aviation industry and the cost of flying—I could go on. That has not been spelled out, because there is a dishonesty here, and the burden will fall on ordinary people.

[Dr Whitehead]

It is not for me to defend how the Government have managed their arrangements as far as the costs of these measures are concerned, but I would say more generally that we have to cast this Bill in terms of how much it would cost us as consumers and others if we did not do these things over the next period. We need to consider the cost to people’s bills, people’s lives and people’s welfare if we simply stood aside and ignored doing the things that are necessary for decarbonisation. I can honestly say that in the longer term the overall cost of doing these things would be far more on the saving side for customers and the general public than the issues that are before us at the moment.

The Government have done a number of things in this Bill. I mentioned the measures on hydrogen, which I welcome in terms of meeting hon. Members’ concerns. We are also pleased to see that the Government have tabled amendments on other issues of concern to Members such as sustainable aviation fuel, and new clause 34 on liquid fuel.

[Chris Grayling]

I am keen to see a process start now that leads to our securing the investment we need to ensure that sustainable aviation fuel is available for our industry, and given the timeframe I am keen to see both parties making a commitment to that in their manifestos. Can the hon. Gentleman give me an assurance that the Opposition also support this move towards developing a sustainable aviation fuel industry in this country?

[Dr Whitehead]

I understand the right hon. Gentleman’s concerns about what the shortly-to-appear Labour Government will be doing on these matters, although I hope that he will not go about spreading defeatism on his own side. As a future Labour Government, we are very concerned about the need to develop sustainable aviation fuel in a cost-effective and timely manner. We understand that this is a substantial element of the transition that will be undertaken in aviation, but we have to be careful that we do not procure all the resources that might go to other things for use in making sustainable aviation fuel, because there are many other things that can be done with those fuels. We need a balance between the various possible candidates for what would go into sustainable aviation fuel for the future.

I am pleased that the Government have also made a concession on liquid fuel heating obligations. In other areas, despite having ample opportunity and time to put additional material in the Bill—indeed, the Government have put substantial amounts of additional material in the Bill with our support—they have not taken the opportunity to place in legislation the three tests that I mentioned, which is why our amendments concentrate on those emissions.

--- Later in debate ---

[Angus Brendan MacNeil]

The hon. Gentleman mentions boilers, and a number of organisations, including Green Alliance, Action for Warm Homes, Power for People and Energy UK, have produced briefs that point to how infrequently such Bills come around. There are great changes in energy technology and in world events, but they are not mirrored in Parliament. Both sides of the House should commit to not cramming everything into one energy Bill every decade. Given how things are changing in this sphere, Parliament should address it far more frequently than every decade.

[Dr Whitehead]

If the hon. Gentleman contains himself, he will see that we have tabled an amendment on low-carbon energy in homes. I agree that we cannot put everything in a Bill but, because of the urgency of the commitment we are making with this Bill, it is important that we get as much clarity as possible on what we are doing in the Bill now, so we know where we are going and the ways we are doing so.

Having discussed those other amendments, I will now draw attention to Labour’s amendments. I hope the House will understand why we have drafted them in this way and how that relates to the tests I mentioned. On our new clause 53, the Government say they support community and local energy. Indeed, as the Minister said, the Government have put a modest amount of funding into supporting community energy but, as the hon. Member for Hastings and Rye (Sally-Ann Hart), who is not in her place now, said, we still do not have an understanding of how community energy can actually work. We think community energy will be an important part of the decarbonisation process. It is not one of the large, shiny things upon which money will be lavished in large amounts but, in aggregate, it will have a huge impact on decarbonising energy in this country.

The Government still have not introduced arrangements that will enable local power producers to trade locally and get the proper value of their trade, which is vital to the success and certainty of these projects. Labour wants to support local energy projects practically, particularly through the “valley of death” period where the pockets of community energy are usually shallower than needed for all the planning permissions to run their course. With support from Great British Energy and local authorities, we propose that £400 million a year will eventually support the important role of community and local energy in decarbonising power.

[John Redwood]

If this electrical revolution is to take off, many more people will need to buy electric cars and heat pumps. Does the hon. Gentleman have any advice for the Government on how those items can be made more popular and more affordable?

[Dr Whitehead]

The Government and I have been in considerable discussion about precisely that point. We need to make sure we change the model of ownership of those devices. We perhaps need to have a longer debate about that on another occasion.

[Lloyd Russell-Moyle (Brighton, Kemptown) (Lab/Co-op)]

My hon. Friend is making an important point about new clause 53, which stands in his name and those of his Front-Bench colleagues. Is not it the case at the moment that the grids—the national grid and the local distribution networks—do not have a duty to positively engage with small-scale and community electricity suppliers to encourage them on to the grid and instead just put them at the bottom of a list that is first come, first served? The new clause will start to change that approach, which is supportive and nurturing in its essence.

--- Later in debate ---

[Dr Whitehead]

My hon. Friend is absolutely right. The campaign that he may be referring to was signed up to by the Minister when he was not a Minister; he may have some other views on that these days, but the new clause is not too far from the original document that he signed a while ago. I am going to have to make some rapid progress, so I am sorry to say that I will not be able to take any further interventions. However, I will try to get through the measures we are proposing as quickly as possible, in order to allow other Members who are bursting to get into the debate the time to do that.

Our new clause 56 deals with delinking renewables and gas prices. A mechanism should be in place to ensure that the dividend from renewable power costs and prices can come through to customers. However, as we have seen in the recent power crisis, that is not the case at the moment. Gas prices surged to nine times the price of renewable power at some stages during the energy crisis and are still substantially more expensive than those of renewables, but they rule the roost as far as energy prices for the retail market are concerned, through marginal cost pricing. We think that needs to change through delinking the process and we wish to put an amendment in that would ensure that that happened, so that the benefit of renewable power can come to customers in the way that the whole House would intend to happen.

New clause 57 deals with onshore wind. Three minutes before the Bill came to the Floor of the House, a written statement on onshore wind was made by the Minister. I have had a chance to read it quickly and it seems to me as though it still treats onshore wind as a special case and not as an ordinary case of a local infrastructure project, which should receive no better and no worse consideration than any other such project. Onshore wind is essential to the decarbonisation of our energy system, but we have just let it collapse over a considerable period by, in effect, banning it. The Government are taking grandmother’s footsteps back from the ban, but this is still not good enough.

[Sir John Hayes (South Holland and The Deepings) (Con)]

I was one of the architects of what the hon. Gentleman described as a ban. He will understand that, when onshore wind was no longer permitted across the UK, this catalysed the offshore industry and we became a world leader in offshore wind precisely because developers then chose to go offshore. Offshore wind has many advantages, not least its scale, the size of the turbines and the single point of connection to the grid. Onshore wind has none of those virtues.

[Dr Whitehead]

That is remarkably like saying I am encouraging you to use your second car because I shot the tyres out of your first car. The right hon. Member makes a quite ridiculous statement.

First, onshore wind is the cheapest form of power available. Secondly, it can be available for community and local energy, in the way described earlier. Thirdly, through CfDs, it can systemically provide a cheaper power environment for the population as a whole. It is a disgrace that only two turbines have been commissioned in this country since February 2022. It is a golden opportunity for decarbonisation that we are missing completely.

[Anna McMorrin]

On that point, will my hon. Friend give way?

[Dr Whitehead]

I said I would not, but I will.

[Anna McMorrin]

My hon. Friend is being very generous. Does he agree that the failure to roll out onshore wind is costing families £182 a year because of lack of investment?

[Dr Whitehead]

Lack of investment does indeed have a direct impact. If we go back and look at what could have been the case and look at what is the case now, there is a direct link between energy prices now and the lack of development of onshore wind. Our amendment, which we hope to push to a vote, would make the way that onshore wind was treated simple and straightforward: it should be treated no differently from any other local infrastructure project. There should be the same protections, safeguards and concerns for people who have that local infrastructure coming their way. It should not be a special case, over and above other projects, which I think will produce an explosion of investment in onshore wind in future.

[Sir John Hayes]

On that point, will the hon. Gentleman give way?

[Dr Whitehead]

No. I have to make progress.

New clause 61—

“National Warmer Homes and Businesses Action Plan (No. 2)”—

addresses another area in which the Government have set out their aspirations. The Minister has said that the Government are making progress on their aspirations to retrofit homes, as set out in their national energy plans and the White Paper, “Powering our net zero future”. Those aspirations include having all homes at an EPC band C standard by 2035 and all private rented properties at band B by 2030. However, nowhere are there any plans about how we are actually going to do that or how homes that are among the worst insulated in Europe can be lifted to the levels needed by 2035. The Government are stuck with aspirations but no plan.

Our new clause puts a plan in place. It puts those aspirations into legislation and requires a Government plan to bring them about, which would be another enormous win for decarbonisation. People’s energy bills will fall, fuel poverty will be tackled and gas supply in retrofitted properties will reduce by perhaps 25%. It would be a win all round.

The Government have no plan. Labour has a substantial plan, which has already been put forward, including a 10-year programme to uprate and retrofit 19 million homes, costing £6 billion per annum by the second part of the next Labour Government, with a local authority and community base getting it done. That will transform the present, pretty paltry progress that has been made. Admittedly, there has been good progress in some areas, including the energy company obligation, the local authority delivery scheme, the home upgrade grant and other schemes, but who can forget the spectacular failure of the Government’s green homes grant a little while ago? Our new clause will transform the way that works and we want it to be added to the Bill.

New clause 62 is closely associated with new clause 61, but addresses the private rented sector.

New clause 59 is very important. We want to see the decarbonisation of our energy, power and electricity systems by 2030. The Government’s ambition at the moment is mostly to decarbonise the power system by 2035, but, again, they have no plan as to how that will actually happen. They have given no indication as to what steps they will take to achieve this, and they are certainly beginning to fail in the implementation of carbon budgets. Bringing forward the decarbonisation of the power system would greatly enhance that and allow us to meet our targets. Labour wants to see the complete decarbonisation of the system by 2030. That does involve massive uplifts in the rate of progress—for example, in offshore wind by five, in solar by three, and in onshore by two—and, indeed, the development of other renewables. In that regard, I recommend that hon. Members have a look at new clause 51.

[Alec Shelbrooke]

Will the hon. Gentleman give way?

[Dr Whitehead]

No, I will not give way again.

My hon. Friend the Member for Birkenhead (Mick Whitley) has a particularly interesting new clause on tidal range. With the right effort and the right investment, a huge acceleration of build-out can be achieved. Indeed, we have set out our plans on how to do that over the next period. What we need is for that ambition and those plans to be in legislation and in the Bill now.

The Minister did not give any indication in his contribution of whether the Government will move towards any of these amendments, but we hope to press some of them to a vote this afternoon. However, I have to say that we do so within the general setting that we are supportive of the Bill. We want it to succeed, but we want it to succeed with our bits added on, not least because this is the Bill that we will inherit when we are in government shortly. We will then have to do all the work that the Government have set out in the Bill.

Finally, let me say to those hon. Members who are thinking of voting against our amendments that they contain the Government’s own ambitions. What we are trying to do is to put the Government’s own ambition into legislation and provide ways by which it can be achieved. If hon. Members decide to vote against these changes this afternoon, they will, at least in some measure, be voting against their own Government. I hope that they will have sufficient sense to make sure that they do not do so as far as this Bill is concerned.

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. As Members can see, there are many people who wish to take part in this debate. I know that Alok Sharma will show self-restraint, but we will be imposing a time limit to ensure that we get in as many people as we can. The debate is very time limited. The multiple votes will come at 6 o’clock, so I ask people to show restraint even on the time limit that I impose.