Great British Energy Bill

Andrew Bowie Excerpts

2nd reading
Thursday 5th September 2024 Commons Chamber

[Andrew Bowie (West Aberdeenshire and Kincardine) (Con)]

It has been a great privilege to listen to so many maiden speeches this afternoon, with so many Members of Parliament, pretenders to the throne, representing what they claim to be the most beautiful constituency in the country. Everybody, of course, knows that is West Aberdeenshire and Kincardine, but listening to everybody was a great reminder of the fact that there is so much more that unites us than divides us. We are all privileged to serve in this place, and we are all privileged to serve the constituents who sent us here for however long or short.

However, reading through the list of the 18 constituencies whose Member gave their maiden speech today felt like reading the list of all the parts of the country where I either spoke or campaigned over the last year. The fact they are now all represented by parties not my own perhaps says something about my campaigning ability: Clwyd East; Northampton South; North East Hertfordshire; Eastleigh; Stratford and Bow; Cheadle; Truro and Falmouth; Camborne and Redruth; Stroud; Barrow and Furness; St Austell and Newquay; Inverness, Skye and West Ross-shire; Caerfyrddin; Ayr, Carrick and Cumnock; Frome and East Somerset; Carlisle; Ynys Môn; and Leeds South West and Morley—all fantastic maiden speeches. Welcome to the House of Commons. It is just unfortunate that, on such an auspicious and a proud day for those Members, we had to spend our time talking about an unnecessary and costly gimmick that will not improve our energy security and will do nothing to reduce consumers’ bills or our carbon emissions.

We heard the Liberal Democrats claim that we left a mess for the Government to clean up when it comes to energy. Well, if having the first to fifth largest offshore wind farms in the world, the fastest reduction of carbon emissions in the G7, an end to coal-fired power production and net zero in law is a mess, I would like to see a good job well done.

We heard great claims from the Secretary of State that GB Energy will incentivise investment and speed up the deployment of new technologies while scaling up more mature ones, all of which is debatable to say the least. As the public out there watch their bills go up again, the Labour party claimed through the election that creating this company will automatically lead to lower bills. We heard again and again that bills will be £300 lower. Funny that we do not hear that figure bandied around as frequently today. That is the most questionable claim.

If not £300, as the Secretary of State used to claim, by how much will bills fall as a result of establishing this company, and by when? How will this company speed up deployment? What will it do differently, given that we already have the first to fifth largest offshore wind farms generating power here right now without this costly gimmick? Although I respect the ambition and agree that we need to see more jobs for British workers and the establishment of a UK-based supply chain, which is why we created the sustainable industry rewards that will come in at allocation round 7, does the Minister acknowledge that this will take time and that we are hundreds of thousands of workers short of the plans that we have to build right now, and that this will make no difference to the Government’s 2030 plans?

The Secretary of State’s claim not to be neutral about where things are made rings hollow to the supply chain in and around Aberdeen, which is worried about the future of North sea oil and gas because of his Government’s decisions. The announcement, with much fanfare, that GB Energy will establish an unprecedented partnership with the Crown Estate is fantastic, but what does that mean for Scotland, where the Crown Estate is devolved? The private sector projects are, in the Secretary of State’s words, guaranteed to return a profit, so why do they need to be de-risked by the taxpayer? What will be the cost to the taxpayer when, inevitably, some of these new technologies fail? What will be the company’s final bill for taxpayers?

Although £8 billion is a large amount of money—just think how many pensioners could heat their home for that amount, for example—the TUC, no less, conducted an analysis last year that found that GB Energy will need around £61 billion to £82 billion of investment between 2025 and 2035 to scale it up to the level needed to do all the miraculous things that the Government claim.

This initial £8.3 billion capitalisation, large when we have such pressure on public finances, seems a little on the low side if the Government really want to create a British Ørsted or EDF, bailed out annually by the taxpayer, especially given that £3.3 billion is planned to fund local authorities and provide low-cost loans to communities, leaving £5 billion to do everything else. When does the Minister expect his boss, the Secretary of State, who has returned to the Chamber, to go cap in hand to the Treasury asking for more money? What exactly does he think the Chancellor’s response will be?

How will the establishment of GB Energy impact the independence of GB Nuclear? Will GB Energy now have the final say over the small modular reactor drawdown process? How is that process progressing anyway? Do we have a timeline for a final decision on that or on a third gigawatt-scale reactor at Wylfa?

[Josh MacAlister (Whitehaven and Workington) (Lab)]

I thank the hon. Gentleman—apologies, the right hon. Gentleman—for giving way. Some 18 years ago, a younger Member for Doncaster North approved land at Moorside, next to Sellafield, for new nuclear use, but 18 years on we are now at the eleventh hour, thanks to the indecision, chaos and confusion of the last Government, who were unable to make long-term decisions about the nuclear future of our country but are now lecturing this Government. Why is the shadow Minister defending the last Government’s approach when it is so apparent that a new approach is needed?

[Andrew Bowie]

I thank the hon. Gentleman for his question. He was right the first time—hon. Gentleman, not right hon. Gentleman. I was very pleased to visit Sellafield and Moorside in his constituency, and I was proud to be the first Minister for nuclear in the history of this country. I was proud to launch Great British Nuclear, and to announce the small modular reactor drawdown scheme, our route to market for alternative energy, that we would build a third gigawatt-scale reactor at Wylfa and that we would carry on with things at Sizewell. Now it is in the hands of the hon. Gentleman’s party to take the decisions necessary to move the nuclear industry to the next level, moving forward on our proud, world-leading agenda for reinvestment and our revolutionising of this country’s nuclear industry, of which he is rightly proud.

[Mr Perkins]

On that point, will the shadow Minister give way?

[Andrew Bowie]

I will not, because that will eat into his own Minister’s time to respond. Oh, maybe I will as it is the hon. Gentleman who is asking.

[Mr Perkins]

The shadow Minister is such a generous man. He is listing all the commitments he made, but we all know that his Government made £22 billion-worth of commitments that they had no idea how they would pay for. Why does he not tell the truth?

[Andrew Bowie]

“Truth” is quite an interesting word coming from the party that has decided to prioritise train drivers over pensioners and that, on the very day it announced a 22% increase in junior doctors’ pay, told the pensioners of this country they would be going cold this winter.

To go back to the matter at hand, what will be the relationship between GB Energy and UK Industrial Fusion Solutions or the International Atomic Energy Agency? How will that affect the plans for STEP—the spherical tokamak for energy production—at West Burton? The Secretary of State wants the UK to export more energy, but has he done an analysis of the impact on bill payers of building the required infrastructure and interconnectors? Will GB Energy and not Ofgem now be the final decision maker when it comes to the approval of new international interconnectors to the continent? If so, how will it be held responsible for those decisions by the Department and by Parliament?

I know the Minister is a respectful person, so I ask him sincerely to please end the disrespect being shown to the people of Aberdeen, with the “will they, won’t they” game being played around the location of GB Energy’s headquarters. Politics aside, that area of the country is already worried about its economic future. My plea to him, as my hon. Friend the Member for Gordon and Buchan (Harriet Cross) asked earlier, is to end that situation and make an announcement as soon as possible.

Ultimately, the simple question the Minister will have to answer, after having considered all the points made by hon. Members this afternoon, is why? Why are the Government doing this? Britain is already a world leader in clean energy production. We are already leading the world in cutting our carbon emissions. We already export energy. We are building new technologies at unprecedented rates. We have halved our emissions and done so while growing the economy.

The Secretary of State regularly, and rightly, claims that it is Britain’s over-reliance on gas that has led to bill payers here paying higher bills than in other countries. As I say, he is not wrong. It is acknowledged by the Climate Change Committee that we will be reliant on gas for a significant proportion of our energy supply for many years to come, so his decisions for the North sea will leave us, in the short term, even more reliant on foreign imports and on the countries and regimes he claims he wants to free us from, and there will be a lower tax return for the Treasury from a smaller sector. Jobs, capabilities and skills will be lost overseas, and bills will not fall, certainly not by the £300 he claimed during the election.

So if there is nothing in GB Energy for bill payers, it does not have the capital to enable it to be an Ørsted or an EDF, we are already a world leader, it will open the taxpayer up to huge risk, investing in emerging technologies might fail and it will not increase our energy security, the question is why do it? What is the point in GB Energy? Surely the Secretary of State is not that desperate to have something to put on his “Ed stone” or to have a new plaque to unveil. It may well be about the “Ed stone”, but the Secretary of State should be aware that this Bill could be the Government’s tombstone. We have seen how these projects end up: Robin Hood Energy collapsing, leaving Nottingham City council with a bill of £38 million; and the same with Bristol Energy. What will the bill for the country be if GB Energy follows the same path?

Great British Energy will not produce any energy, it will not cut household energy bills by £300 as the Prime Minister, the Chancellor of the Exchequer and the Secretary of State for Energy Security and Net Zero have all stated, and it will not compensate for the amount of investment in energy projects that will be deterred by the Government’s plans to prematurely shut down the UK’s oil and gas sector. It is an unjustified use of taxpayers’ money at a time when the Government are withdrawing the winter fuel payment for 10 million pensioners as energy bills rise. I echo the words of the Secretary of State and urge Members on the Government Benches to ignore their Whip and vote for our amendment this evening.

Great British Energy Bill (First sitting)

Andrew Bowie Excerpts

Committee stage
Tuesday 8th October 2024 Public Bill Committees

[Josh MacAlister (Whitehaven and Workington) (Lab)]

I am also a member of the GMB.

[Andrew Bowie (West Aberdeenshire and Kincardine) (Con)]

I am not!

[The Chair]

For full transparency, I am a member of Unison.

Examination of Witness

Juergen Maier gave evidence.

[The Chair]

We will begin by hearing oral evidence from Mr Juergen Maier, chair of Great British Energy and of Digital Catapult. Before I call the first Member to ask a question, I remind Members that all questions should be limited to matters within the scope of the Bill. It is a short and quite a narrow Bill, and if you stray I will tell you off, so do not stray in the first place. We must stick to the timings; for the first evidence session we have until 9.50 am.

Will the witness introduce himself for the record?

Juergen Maier: Good morning, everybody. It is a pleasure to be here. I am the start-up chair of Great British Energy. I am in the process of stepping down from Digital Catapult; we are just looking for the new chair to replace me, so that I can focus on this role.

[Andrew Bowie]

Q Good morning, Mr Maier, and thank you for joining us this morning. Congratulations on your appointment as chair of Great British Energy.

It was announced with great fanfare at the Labour party conference that the new headquarters of Great British Energy would be in Aberdeen. What does that actually mean? What will the HQ actually do? How many people will be employed at the HQ?

Juergen Maier: The HQ is where we will centre all our operations. That means that all the key staff will be there, including the chief executive when we get around to appointing one. We will probably start with an interim chief executive who might not be located there, but eventually that is our plan.

There will be other locations. We would also like a location in Edinburgh and one in Glasgow, in particular to help on innovation and maybe financial services. I see the main role in Aberdeen as being particularly around operational engineering jobs. Ultimately, those are the jobs that are in abundance in Aberdeen; they are the well-paid jobs and the ones that are in greater quantity.

[Andrew Bowie]

Q The overarching aim of GB Energy is to speed up the transition to invest in new and emerging technologies. When your time as chair has ended and you look back, what will you judge as success?

Juergen Maier: There are two very simple answers. The first is how many renewable energy and clean energy projects Great British Energy has been a part of, as a co-investor, an investor or an enabler, and how much more renewable energy we have thereby managed to get on the grid. The second is how many jobs and how much prosperity we have created as a result, making sure that as much of the supply chain is Scottish/British, rather than overseas.

[Catherine Fookes (Monmouthshire) (Lab)]

Q Welcome, Mr Maier. It is great to meet you—thank you for coming before the Committee. In Monmouthshire, we have seen the benefit of a lot of community energy projects, such as solar power on the Bridges community centre in Monmouth. In Wales, we have also seen lots of hydro projects in community energy, such as Ynni Ogwen in Bangor. Can you share how you think the Bill’s provisions will support community energy projects in the whole of Britain and Wales?

Juergen Maier: Community energy is definitely a priority for Great British Energy. If you want to point specifically to the Bill, clause 3, “Objects”, refers in subsection (2)(a) to

“the production, distribution, storage and supply of clean energy”.

I see community energy as a core part of that. As Great British Energy, we definitely want to support the schemes that you have been talking about, whether those are in Wales, Scotland, England or Northern Ireland. We will definitely be doing that.

--- Later in debate ---

[The Chair]

I call the shadow Minister to ask the first question.

[Andrew Bowie]

Q I think it is fair to say that at the recent TUC congress some scepticism was expressed about the current Government’s plans for the energy sector, not least in respect of fears about the tens of thousands of jobs that are currently under threat in the oil and gas sector. How do you see GB Energy fitting into the overall piece when it comes to seeking to protect those jobs through the transition?

Mika Minio-Paluello: It is true that trade unions want to see good-quality jobs going forward, and that there are concerns about how we deliver a just transition, because we see the reality that transitions are not easy. To make that happen, we need some levers—some tools that can help to ensure that workers either have their existing jobs future-proofed or have transfers to new places. GB Energy is a tool that can help to make that possible that we currently do not really have in the UK. In France, Norway, Denmark and Germany there are a lot more institutions—the public sector effectively has a bigger stake—and we do not have that.

As Juergen said earlier, GB Energy can be part and parcel of enabling the supply chain growth that we have not seen in recent years, because CfDs have not delivered that as they are. It can also deliver the co-ordinated collective pathways for workforce, as well as upskilling, which does not really happen given the piecemeal way it is working at the moment. It can also play a role by ensuring that renewable jobs will be good jobs, both through procurement and through, in effect, ensuring a race to the top. That is all part of a plan, and what came out of our congress recently was that we need to see a plan. To have that plan, we need institutions like GB Energy.

[Andrew Bowie]

Q Do you have enough clarity thus far, through this Bill and the creation of GB Energy, to give confidence to those people in the sector who are worried about their jobs—

[The Chair]

Order. I do not think there is anything in the Bill about jobs, shadow Minister, so I am being steered by the Clerk to get you off the subject. Let us go to Olivia Blake.

--- Later in debate ---

[The Chair]

Order. Just a reminder again that we are talking about what is in the Bill—not blue-sky thinking about what GB Energy might do and that kind of stuff.

[Andrew Bowie]

Q I think we are all agreed that

“the production, distribution, storage and supply of clean energy”

should include nuclear energy—very important to your members, Mr Clancy. But to build on the point from the hon. Member for Whitehaven and Workington, I think there is a lack of clarity in the Bill at the minute over the operational independence and the autonomy of Great British Nuclear. Are you seeking that from the Government? Is it something that we should seek to have in the Bill as it moves through Committee?

Mike Clancy: That is not just in terms of the Bill, I think; the actual future of Great British Nuclear has a degree of uncertainty around it, per se, because, again—I am in danger of repeating myself—we have been here before. I used to be a member of the Nuclear Industry Council some moons ago, and we are rightly evangelists for our members, who deliver nuclear energy. We recognise that there are lots of controversies down the back end, in terms of decommissioning, but nuclear is an essential part of the future energy mix and the achievement of our climate goals. Therefore, there has to be a range of certainties in response—that is not a glib remark at all—and, in the GB Energy area, it is about companies knowing that they can invest and get the return. The Bill needs to be consistent with that.

[Stephen Flynn]

Q You have spoken eloquently and rightly about the energy transition, jobs, skills and STEM, but I have double checked and the Bill contains absolutely no detail about any of those things. Is that correct?

Mika Minio-Paluello: My understanding is that it is not currently in there, but it will be contained in the statement of strategic priorities. There are questions about how much should be added in. We understand that the logic is that the Bill will create an enabling vehicle—it will enable GB Energy to act and do things—so is it useful to put in many, many limitations? Probably not, because adding in too much detail will slow it down. Is it, on the other hand, useful to put in a clause that says that the statement of strategic priorities should have regard to a just transition and job creation? That could be a consideration.

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[The Chair]

A few of us have. Okay, if we finish early, we have more time to leg it over there. Please could the witnesses introduce themselves.

Dan McGrail: Good morning everybody, my name is Dan McGrail, I am the chief executive of RenewableUK, which is a trade association representing the wind industry predominantly, but also the tidal energy sector and crucially, the supply chain that sits within that. We have about 500 member companies across the UK and we work closely with devolved Administrations and national Government.

Adam Berman: Good morning. My name is Adam Berman, I am director of policy and advocacy at Energy UK, which represents the whole of the energy sector really, short of upstream oil and gas extraction—everything from all the forms of generation, right through the networks and into household level. We represent the retail energy suppliers as well.

[Andrew Bowie]

Q For the record, can I say how nice it is to see Dan again? And also to thank you, Adam, and Emma for the support and, indeed, challenge you posed when I was sitting on the other side, talking through the Energy Bill last year. I ask of both the panellists: the strategic policies and plans are set out in the Bill—are they adequate for GB Energy and indeed the aims and ambitions of your organisations as you seek to see them progress?

Dan McGrail: It is good to see you too, shadow Minister. First, I think there is a trade-off in legislation like this, between the focus you want to provide, and the guard rails put into the Bill, and giving the entrepreneurial freedom to the organisation to invest where opportunities arise. We believe, and the report we wrote prior to the release of this was quite clear, that focus is important, but is legislation the place to put the focus? Our view is that the business plan that is set up and put in place by the chief executive and their team, once appointed, is the place to put that focus. It will be much more predictable if it is developed by experts in the sector who have conducted a thorough analysis of where the opportunities are for investment, and where the real additionality is.

One additional point that is important to detail in the statement, when it comes, is how the investment priorities of GB Energy would be different from those of the private sector. Would GB Energy take a longer view on returns on investment? Would it have a different rate of return? That would help to clarify the role of GB Energy within the ecosystem of the sector and with other private investors so that there is understanding of where real partnership opportunities lie.

In short, the answer to your question is that it is important to have a focus, but do the focus in the plan rather than in the legislation.

Adam Berman: I certainly agree with Dan. My one reservation with the legislation is that GB Energy will face two distinct competing priorities: the first is making money, which would probably primarily come from established mature renewables, and the second is solving distinct problems within the energy system that are a result of market failures. There is some overlap—although not complete overlap— between those two priorities. The question is whether there should be more clarity in the legislation over which strategic objective GB Energy should be solving. That is not an issue for industry to resolve, but it is something that, without stronger guidance in the legislation, GB Energy may struggle to reconcile once it is formed.

[Andrew Bowie]

Q Do you think there is enough provision in the Bill to allow for the Secretary of State to be publicly accountable for the decisions that he or she may take in the future, in regard to the concerns you have just raised?

Adam Berman: I do not think there is a deficit in terms of accountability, and I do not think there are 500 bodies that should be consulted before any decision is made by GB Energy; if you look at things like the planning system and statutory consultees, you can see how that is an issue. That being said, there is a list of organisations that any Secretary of State should consult, through their due diligence, which is everyone from the National Energy System Operator to the Climate Change Committee to industry to devolved Administrations. We would very much assume that the Secretary of State and the Department would do that due diligence themselves. However, I do not think shackling GB Energy through the legislation to having to do that to make every decision is necessarily the right approach.

Dan McGrail: I fully agree with that.

[Olivia Blake]

Q I wanted to ask about the definition in the Bill on clean energy. Do either of you have any thoughts on whether that definition is clear enough?

Dan McGrail: From my perspective, the definition is probably good enough. It is quite tricky to go too narrow and say renewable energy only, because there are certain areas, such as long duration storage, where the sector would like GB Energy to participate in, or at least to have the freedom to participate in, which, if it is too narrowly constrained or defined, may prove problematic later down the line.

One thing I think would be advantageous in the definition, or in the objects, is to clearly set out the guard rails, such as ensuring the carbon budgets are referenced. If we reference the carbon budgets, future Secretaries of State would need to make sure that any investments that were made were in line with the delivery of the carbon budgets. That is comparable to what was done with the set-up of the Green Investment Bank, where there were specific references to what the Secretary of State would need to go back to primary legislation to change, and what would be foreseeable within secondary legislation—not directing the Green Investment Bank to invest in fossil fuels, for example, would have required a complete change of mandate. I think some similar thinking, therefore, would be helpful here.

Adam Berman: I do not completely agree. I do not think there is a big problem of definition, but I would say that we need to ensure it is consistent with the CCC’s existing language and with the technologies that it thinks are consistent with the sixth carbon budget. Clean energy may encapsulate all of them, but I think we would have to make sure that it includes established mature renewables, nuclear, carbon capture, utilisation and storage and hydrogen, just to leave those options on the table. I do not disagree with Dan that there needs to be a focus, but GB Energy needs to at least be given the option to engage in the technologies where it thinks there may be additionality in terms of bringing in GBE’s involvement.

Great British Energy Bill (Second sitting)

Andrew Bowie Excerpts

Committee stage
Tuesday 8th October 2024 Public Bill Committees

[The Chair]

Mr Zipfel, one of the disadvantages of having a geriatric Chairman is that my hearing is not as good as it used to be. But for everybody’s benefit and, most particularly, for the Hansard reporters, it might be helpful for you to speak up a little and be very clearly on microphone. I call the shadow Minister.

[Andrew Bowie (West Aberdeenshire and Kincardine) (Con)]

Q50 Good afternoon, gentlemen, and thank you for taking the time to be with us today. Clause 3 of the Bill, titled “Objects”, states that GBE’s

“objects are restricted to facilitating…the production, distribution, storage and supply of clean energy”

and must include

“measures for ensuring the security of the supply of energy.”

SSE and EDF Renewables are involved in both those objects right now, so how do you see the Bill and the creation of this company as either assisting or facilitating you in your objectives?

Alistair McGirr: At SSE, we welcome GB Energy, and as a company that is headquartered in Scotland, we particularly welcome its location. We think that Scotland has a larger opportunity for investment across the clean energy transition. To answer your question directly, it depends on how the organisation is set up and on its governance, but if, as has been suggested, GB Energy will be focused on crowding in investment, there is an opportunity for it to help to accelerate that transition and, importantly, to capture some of the wider opportunities that can come from the transition.

Tristan Zipfel: You can probably tell from my accent that I come from a country where state-owned investment in energy assets is commonplace, so that is something that we at EDF are very comfortable with and see very positively. In fact, I would say that any initiative that leads to directing more investment, capital and effort into decarbonisation is a very good thing. As Alistair said, it will be important that GB Energy is set up in a way that triggers and supports investment in the sector and does not disrupt the competitive playing field that we currently have in it.

[Andrew Bowie]

Q Thank you for those clear answers. It says under “Strategic priorities and plans”, which is clause 5 of the Bill:

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

If you were the Secretary of State and were tasked with drawing up strategic priorities, what would they be?

Alistair McGirr: On the way that we think about the particular benefits from GB Energy, first, we look at it as a potential partner for some of our investments. We work with a number of commercial entities, some of which are state owned—for example, Equinor, which we work with on the Dogger Bank offshore wind farm and on our carbon capture and storage projects. We work with these parties on a commercial basis and we would be open to working with GB Energy on projects that would help to accelerate the transition. So co-investment is one area. We would be keen to see that targeted at areas where there may be a bit of policy risk. With things like hydrogen storage, hydro-pump storage or CCS, there may be an opportunity for GB Energy to take some of the policy risks that private companies perhaps cannot.

Offshore wind is an area where there has been lots of debates, and there was some nervousness relating to the initial discussion about the Crown Estate tie-up. However, we think that with the principle they were trying to achieve, which is the acceleration of that environmental consenting process, there is an opportunity to accelerate projects and, importantly, reduce the cost of bringing those projects to fruition.

To give an example, our Berwick Bank offshore wind farm up in Scotland, which is one of the largest in the world, is currently sitting within the planning process and has been for 20-plus months now. Projects like Berwick Bank could be accelerated by a focus on areas where GB Energy can accelerate environmental consenting, basically by taking a more strategic approach to how it thinks about environmental consenting rather than considering that on a project-by-project basis.

To make a point on offshore wind, the one area that everyone will talk about—I am sure we will come back to it—is floating offshore wind. There is a big opportunity for not only GB Energy, but the national wealth fund to capture a whole range of benefits from the emerging sector, in terms of both bringing the costs of delivery down and making sure that there is a supply chain available to deliver the projects that are currently under development.

Perhaps a last point to mention is the local power plan. We would be quite keen, as an operator of electricity distribution networks, that the local power plan was able to be targeted in areas where there is a wider system and societal benefit in supporting and unlocking a lot of the low-carbon projects in the distribution network, because it is no secret that there will be lots of questions about how things connect to that local distribution network. We think that the local power plan has a particular route in targeting some of those investments in a way that can better integrate low-carbon technologies into the distribution network.

Tristan Zipfel: To add to what Alistair said, for a start, the UK is in a really strong position to maintain its leadership in the renewables market. There is a strong industry in place, and I think GB Energy can fit into that and strengthen the framework. As a co-investor, in particular, I think GB Energy could bring value, as Alistair said, by investing in frontier technologies, but also by helping to strengthen the link and connection with local communities. For our projects to be successful, it is absolutely paramount that they are adhered to by the local communities. As a developer, we spend tremendous efforts on being present and creating a connection with local communities. Having GB Energy on board for certain projects could reinforce that link and even provide a sense of public ownership in the project, which I think would be very strong.

Alistair talked about emerging technologies and how some of them present certain risk profiles, where having an investor like GB Energy could help kick-start the development of this segment of the market. He mentioned CCS; I think we could talk about hydrogen as another example.

GB Energy also has an interesting role to play as a developer. We have seen the announcement of the partnership with the Crown Estate on the offshore site. There is an opportunity for GB Energy to focus on the segments of the market where the private sector is struggling to make progress, perhaps because the infrastructure is not yet there, or because there are specific risk profiles that make the private sector struggle to invest in these segments of the market, despite them presenting long-term value. That is where there is a real opportunity for GB Energy.

[Andrew Bowie]

Q I will be brief, because I know that others want to come in. Mr McGirr, you specifically mentioned Berwick Bank and planning and consenting. Obviously, Berwick Bank is in Scotland, and planning and consenting is a devolved competence. Clause 5(4) states:

“The Secretary of State must consult the Scottish Ministers before including in a statement under this section anything which concerns a subject matter provision about which would be within the legislative competence of the Scottish Parliament”.

As a company that has heavily invested in Scotland, did you realise that there was detail in the Bill about how GB Energy will interact with the devolved Administrations, given that so many aspects of what it is seeking to achieve are competences of the devolved Administrations, specifically in Scotland?

Alistair McGirr: In terms of the premise, I definitely agree that the devolved Administrations have to play an important role in the direction of GB Energy. I do not think there necessarily needs to be anything in the legislation. I suppose it is also worth mentioning that there might be a view about how the investments are spread across different parts of the country. In reality, a lot of those will be up in Scotland because of the opportunities that Scotland has.

[The Chair]

I have three Members on my list already, and we have 15 minutes left, so please be short, sharp and to the point.

--- Later in debate ---

[The Chair]

We will now hear oral evidence from Dan Labbad, who is the chief executive officer of the Crown Estate. For this session, I am afraid that we have only until 2.50 pm. For the benefit of the record, Mr Labbad, could you introduce yourself?

Dan Labbad: I am Dan Labbad, the chief executive of the Crown Estate.

[Andrew Bowie]

Q Thank you for giving us your time this afternoon, Mr Labbad. How do you foresee the Bill and the creation of GB Energy impacting on the offices of the Crown Estate? In your answer, could you give some detail on the recent agreement between the Crown Estate and GB Energy, and what that will mean moving forward?

Dan Labbad: First, thank you for having me here this afternoon.

The Crown Estate has been operating in the offshore renewable energy space for a long time—roughly 25 years—and, working with Government, the private sector and the third sector, we have created what is the second largest offshore wind capability in the world. That is something that we as a country should be very proud of, but obviously what got us here will not get us where we need to be.

When you look at the Climate Change Committee’s report on what is required from offshore wind and other renewable and zero-carbon technologies into the future, you see that we need to accelerate our deployment in a way that is balanced with other marine uses, including the environment, and ensure that we are deploying at a rate that meets the targets that were set for good reason. We have been organising the Crown Estate for the last five to 10 years in order to do that, accelerating leasing and starting the de-risking process for developers.

We also have a Bill before Parliament to enhance our powers to do more in this space. For example, we have something called the marine delivery route map, which looks at all uses on the seabed to ensure that we can create spatial co-ordination for different uses. That is fundamental to being able to achieve deployment, but even with our new powers we cannot do it alone. We need support, certainly support from Government.

There are three key areas that we would have called on had GB Energy not been announced, but Great British Energy offers a number of things. First, there is the co-ordination of all the agents involved in what is a very complex energy sector, both within and outside of Government. One of the big encumbrances at the moment is that everyone is working in slightly different directions; you do not achieve targets if everyone is working in slightly different directions.

Secondly, there are the increased investment powers to ensure that we are additive to what the private sector needs and ensure that we can achieve the acceleration throughput that we are talking about and invest in new technologies.

Finally, it can ensure that we are evolving policy around areas that are not limited to planning and grid, for example, so that we have the pathways not only to lease seabed for renewable deployment but to deliver generating capacity. We see GB Energy bringing those things.

[Andrew Bowie]

Q We have spoken with previous guests this afternoon about the necessity for the Secretary of State and the Minister here to have strategic priorities and plans to engage with Scottish and Welsh Ministers and all the devolved Administrations. Obviously, the Crown Estate is an area that is devolved in Scotland. You said that within the market right now there are different plans, priorities and timescales and people are moving in different directions. How are you co-ordinating with Crown Estate Scotland to ensure that your work with GBE will be uniform and joined up across the United Kingdom? Otherwise, none of the targets will be met.

Dan Labbad: Consultation across the country is fundamental. In fact, if you look at our Celtic sea round 5 tender, which is live at the moment, you will see that we consulted heavily with the Welsh Government and with Welsh stakeholders. In fact, we evolved our approach quite considerably in the deployment of that tender approach through that consultation, adding a lot of value.

I should say that to get a leasing programme out like round 5—which is the 4.5 GW floating wind programme that we have at the moment live in the Celtic sea—you engage with many stakeholders. The count in the case of the Celtic sea was more than 70 stakeholders from global and local environmental groups, developers across Government, the third sector again and a whole host of users of the seabed. Without doing that we do not deploy, because we do not get everybody’s buy-in. If we are talking other parts of the country, there is no difference whether it is Northern Ireland or Scotland.

We enjoy a good relationship with Crown Estates Scotland and with the Scottish Government. They are partners in our marine delivery route map and we are co-ordinating on systems issues, because obviously some of the environmental issues and deployment and grid issues do not have borders, so that consultation is, as you suggest, fundamental.

[Perran Moon]

Q In relation to clause 1(5), about the statement of strategic priorities, you just mentioned the Celtic sea round 5 tenders. I think I am correct in saying that they did not have any mandatory social value element. What would be your thoughts on social value being mandated as part of the strategic priorities for local coastal communities, particularly deprived areas such as Cornwall?

Dan Labbad: First, as regards the Celtic sea, there are social requirements as part of the tender process. I obviously cannot talk about them too much, given that we are in a live tender for procurement purposes, but there are social requirements as part of that tender.

To your question, it is fundamental. It will be a real failure if we end up deploying renewable energy on the seabed in the way we need to in the next 20 years and are not able to capture a fair proportion of that industrial complex for ourselves as a country. It would be a real pity if we did not build new jobs and new futures for young people across the country and if we did not support the distribution of that benefit across the country, including to coastal communities.

We have to bear in mind that there is a role for developers and a role for Government and the Crown Estate. For example, in the Celtic sea a 4.5 GW tender does not build a supply chain. It is not enough; the critical mass is not there. Again, that is why it is so important that Great British Energy and the Crown Estate work together, with our additional powers and being able to provide forward commitments to, for example, the Celtic sea. We estimate at the moment that it has the potential for another 12 GW of offshore wind, predominantly floating but also fixed. You need that type of scale so that both Government and private sector investment in the supply chain, including in coastal communities, will stick. That is why this partnership is so important and why we have to remember the size of that prize, so to speak.

--- Later in debate ---

[The Chair]

Good afternoon. We will now hear oral evidence from Josh Buckland, a partner at Flint Global. For this session, we have until 3.10 pm. Mr Buckland, will you identify yourself for the purposes of the record, please?

Josh Buckland: I am Joshua Buckland, a partner at Flint Global.

[Andrew Bowie]

Q Thank you very much for joining us, Mr Buckland. Obviously you come from the perspective of a company that is investing—alongside others that are investing—in the future technologies that will guide us towards net zero and a clean future. One of the objects of Great British Energy, as clause 3 states, is that it should be involved in

“the production, distribution, storage and supply of clean energy”.

Do you see the Bill and the creation of GBE as an assistance in unlocking private capital and the investment that we need in the new technologies, or are you worried, as some are, that this might be a blockage and get in the way of the private sector?

Josh Buckland: I think that that is the right question to ask. Ultimately, the amount of capital we need to invest in the energy transition is so significant that we will have to deploy and leverage in private finance at a scale that has not really been seen before, and any intervention from Government needs to play a role in unlocking that private capital. The Government have set out that Great British Energy will be mobilised with £8.3 billion of public capital. On the surface, that is a significant amount of money, but in comparison with the hundreds of billions that we will need to deploy through the overall transition, the way that it crowds in greater levels of private investment will be the key test of its success.

The Bill sets out a range of roles that Great British Energy could play, some of which could have a bigger impact on mobilising capital than others, and a range of different mechanisms that it could deploy. It is probably too early to tell whether the structure and the decisions it makes will mobilise capital at the scale that the Government intend, but the framework set out in the Bill will definitely give it the potential to do so.

[Olivia Blake (Sheffield Hallam) (Lab)]

Q I am interested to know whether there are any conditions that you would like to see put on the financial assistance provisions and their scope under clause 4, given your unique placement within the system.

Josh Buckland: The financial assistance statements set out in clause 4 are relatively broad; they give Great British Energy the ability to invest in a variety of ways. It comes back to the question of how you create value through Great British Energy. One of the key tests will be whether it can drive additionality, so whether it can deploy capital in a way the private sector cannot. That usually rests on two issues. One is whether it can invest earlier in the development curve when private investment at scale is tricky, so where there is technology risk or development risk. An alternative is whether it can invest on a sub-par basis, so effectively whether it can create catalytic capital—that is the terminology often used—in a way the private sector would not be able to.

Clause 4 could potentially do those things, and there is no restriction on its ability to do them, but obviously the Government have not yet said much about exactly what format these investments will take. That is not necessarily an issue from a legislative perspective. I have looked back at the legislation that underpinned the UK Infrastructure Bank and the Green Investment Bank, which I was involved with when I was in government, and both those Acts are relatively high-level in terms of the interventions and mechanisms that they can deploy. On the surface, there is nothing that restricts that. As the Government think about the deployment of Great British Energy, I imagine that they will want to set out how it will give more clarity to the private market on the sorts of interventions and mechanisms that it will look to deploy at scale.

--- Later in debate ---

[The Chair]

From one Scotsman to another—I call the shadow Minister.

[Andrew Bowie]

Q Thank you, Sir Roger. Good afternoon and thank you for joining us today to help our deliberations on the Bill. My first question was going to be to Ms Powis, but I will expand on it to Ms Dawes to begin with. The Carbon Capture and Storage Association has written to the Committee expressing concern about the definition of technologies that GB Energy might be able to invest in and work on. It would like to see an extension of the definition from

“the production, distribution, storage and supply of clean energy”,

to include technology that might be involved in carbon capture and storage. It is not set out clearly within the Bill that that is the case. Ms Dawes, as somebody who works with the companies involved in the extraction and production of fossil fuels in Aberdeen and the drive to transition to net zero, do you share the concern with the narrow prescription of what GB Energy will be allowed to invest in and be involved in?

Myrtle Dawes: I understand their concern. From my perspective, I understood that that would be covered under clause 1(2)(b), which concerns the reduction of greenhouse gases. Fundamentally, the storage or utilisation of carbon dioxide comes with the reduction of greenhouse gases. [Interruption.] As Olivia is here, she could probably respond.

[The Chair]

Order. If I may interrupt, we have now been joined by Olivia Powis, who is chief executive of the Carbon Capture Association. For the benefit of the record and Hansard, could you identify yourself?

Olivia Powis: I apologise for being a couple of minutes late. I am Olivia Powis, chief executive officer of the Carbon Capture and Storage Association.

[The Chair]

There is no need to apologise; we understand the vagaries of travel in London and are grateful to you for joining us. Minister—shadow Minister, I beg your pardon—would you like to come back?

[Andrew Bowie]

Q It was the case once, Sir Roger.

Thank you for joining us, Ms Powis. I was going to ask about the concerns that your association has brought to our attention about the definitions in the Bill, particularly in clause 3, concerning the objects that GBE is restricted to facilitating, encouraging or participating in. Please could you expand on those, and also on your suggested changes to the Bill, about which you kindly wrote to us two weeks ago?

Olivia Powis: I would be pleased to expand on that. We welcome the Bill and its support. In his opening remarks on Second Reading, the Secretary of State stated that

“Great British Energy will support project development”

to

“help speed up the roll-out of offshore wind and other technologies”—[Official Report, 5 September 2024; Vol. 753, c. 460.]

such as CCUS, wave, tidal and hydrogen.

We believe, however, that the narrow definition of clean energy in the current draft of the Bill could be prohibitive to low-carbon technologies and inadvertently limit the scope of GB Energy’s investments, thereby reducing the potential for public projects and hindering the UK’s ability to meet its net zero targets.

The definition of clean energy should be clarified to ensure that it encompasses energy sourced from fossil fuels when combined with carbon capture and storage—that is, when abated. We, alongside Hydrogen UK, have proposed some alternative wording that would enable abated fossil fuels to be included, and ensure the reduction of greenhouse gas emissions from energy produced from fossil fuels. We must future-proof this definition to make sure that GB Energy is able to invest safely in projects such as low-carbon energy with CCS and is not at risk of being challenged.

Jack Norquoy: I understand the concerns that have been raised. Some of our members will also be members of the Carbon Capture and Storage Association. I understand those concerns and am happy with the suggestions. Our recommendation for the Bill, and moving forward, is that it maintains alignment with what the Climate Change Committee has within its scope as part of our transition to net zero.

[Andrew Bowie]

Q Ms Powis, do you suggest that if we do not make those changes to the Bill, it might be prohibitive to further investment in CCUS, or do you think that the words from the Secretary of State on announcing the Bill were enough to calm any jitters in your industry?

Olivia Powis: No, we would recommend that the wording is changed in the Bill so that it is future-proof. We welcome the words that came alongside it, but we want to ensure that it is future-proofed for when people come back to this legislation in five years’ time. It must be on the face of the Bill.

[Andrew Bowie]

Q This is a question to Ms Dawes and then to Mr Norquoy. You obviously represent two different types of energy companies. The Net Zero Technology Centre represents companies that are still very much involved in the North sea, although investing heavily in the next generation of technology that will get us to a cleaner future. How do you see this Bill, and the creation of GB Energy as a company, as helping to facilitate your work at the Net Zero Technology Centre? To Mr Norquoy, I ask the same question: how do you see it as assisting the members of your organisation, Scottish Renewables?

Myrtle Dawes: I am really excited about this. For reference, the Net Zero Technology Centre received £180 million of Government funding. We have managed to raise and match that with industry and go on to have more than 100 start-ups. We have more than 69 commercialised technologies. We have done more than 300 projects and gone on to give value back to GB of an order of one to nine in cost-benefit terms. When I see something like this, on a much bigger scale—our work is really a microcosm of this—it is really exciting. It is a catalyst sitting at the heart of Government, which will make sure that there is support for innovation during the period when it needs acceleration, when we need this technology to make things more efficient and drive down costs, and when we need to get good technology into the next set of infrastructure projects. For us, it is really exciting. Given what we have seen at the NZTC, it could go on to deliver quite a lot of value.

Jack Norquoy: I share that enthusiasm. Scottish Renewables has welcomed the development of GB Energy, alongside many of our members in industry. Of course, we welcome any additional investment at this time, particularly when we have heightened ambitions towards 2030. We have an unprecedented line of sight in Scotland with our pipeline, so we welcome the conversation and the development of GB Energy to deliver the support that will be needed to accelerate deployment.

We are particularly interested to see what the goals of GB Energy are. That has been set out in the Bill and in the surrounding documents, but we will need to see some clearer objectives and pathways to support that with industry. We appreciate that that might come after the Bill. We have interest in the governance, too; the importance of operational independence has been discussed today. Finance is very important to the heightened ambitions for what GB Energy will do, as the Bill sets out, but we also want GB Energy to work with industry.

This comes at a time when there are a lot of welcome moving parts in industry, such as the development of a strategic spatial energy plan, the national wealth fund and GB Energy. We welcome the Bill and we would like to see the establishment of GB Energy, but in the steps ahead we would like to see a pathway to give some assurance to our members in industry who are now actively involved in the pipeline on how they can help towards the deployment to 2030.

[Andrew Bowie]

Q This will be my last question, Chair, I promise. Mr Norquoy, you represent Scottish Renewables. In the past, there have been moments when the aims and objectives of the UK Government and those of the Scottish Government have not been entirely aligned. Your members operate in a devolved administrative area, Scotland. How content are you, given the provisions of the Bill, that GB Energy—an arm of the UK Government, a company established by the UK Government and answerable to the UK Secretary of State—will have the autonomy and power to work constructively with and under the auspices of the devolved Administration in Edinburgh?

Jack Norquoy: The Bill includes a reference to working with Scottish Ministers, which is welcome, as part of improved relations at the moment, which are welcome too. On governance and devolved competency, as we heard in earlier evidence from the Crown Estate, the partnership with GB Energy is welcome. There will have to be development across the UK to support our net zero targets, but we want to ensure that there is parity with Crown Estate Scotland too. At the start, I highlighted the pipeline that we have sitting in Scotland. On the point about the competency of the Scottish Government, we would like to see some more detail—again, probably outwith the Bill—on how we can ensure parity between extra powers to the Crown Estate and to Crown Estate Scotland.

[Stephen Flynn]

Q We have heard a great deal today, and rightly so, about the potential investment that GB Energy could make, whether that is in production, storage or generation and so on and so forth. I am particularly interested in the innovation space and in your experience with the Net Zero Technology Centre. Do you think that GB Energy’s focus should be on that, given the relatively small quantum that is available, or do you think that it should be broader and more focused on the de-risking of projects that might already be in the pipeline but might require assistance in relation to consent, planning or further capital investment?

Myrtle Dawes: I suppose it would have to be towards the impact. Naturally, the budget we are looking at is well suited to innovation. The crowding in of money that we could get around that from investors—the impact that we could have by moving on a lot of projects—is quite significant.

To take the example of floating offshore wind, we have some of the best wind resources in Europe and actually the world. We are sitting with one of the best supply chains for subsea in the world, because the North sea has been the harshest place in the world to do business. If we are ever going to get an effective floating wind business, with technology and jobs here in the UK, we need to start and move on it now. Not only is there an opportunity to get electricity here in the UK, but we are very close to the heartland of Europe, which is also looking for electricity and for hydrogen. We can do lots of things where the impact, if we were to move now, would be great.

I have also worked on de-risking in major projects. They do need de-risking. I do not think that those in the supply chain are necessarily looking for a handout; they are looking for clarity, for investable business cases and for things where they can do the commercial work that they normally do. I can tell you that at the heart of this is technology that has to be sufficiently robust and reliable, and cheap enough that the product is cheap for the customer, who in this case is those who are using our energy.

Olivia Powis: I support everything that has been said. I think GB Energy offers the potential for targeted investment and support in areas of the value chain, for new innovations and across the supply chain. In particular, we look at some capture technologies with lower TRLs that would benefit from some investment, enabling them to move forward from what we refer to as the valley of death, to be able to compete on the open market. There are many opportunities within the innovation space.

Jack Norquoy: A big part of what GB Energy will do is the local power plan, to which a sizeable contribution of that £8 billion allocation has been made. You raised a point about how the rest of it will be spent; I echo the comments that have been made about innovation.

There will be a need for GB Energy to have a balance. That has been outlined in what we have seen so far, in that there will be a need to generate revenue in order for there to be a public return, but it is important that that money be targeted at high-risk areas where we need the longer-term strategic view to support innovation. Sectors in Scotland such as the marine energy sector would very much welcome that targeted support. So we have a balance between GB Energy being willing to take more risk than perhaps we have seen so far and some investment going towards the local power plan, developing the stable revenue that we will want to see coming through.

--- Later in debate ---

[The Chair]

Thank you. I call the shadow Minister.

[Andrew Bowie]

Q Thank you for joining us this afternoon, Mr Whitehouse. I think it is fair to say that OEUK has been somewhat sceptical, although it obviously wanted to work with the Government, about the overarching policies towards the energy sector, and specifically the sector you represent. Speaking specifically to this Bill and the establishment of Great British Energy, how do you see that company interacting with members of OEUK to deliver what we all want to achieve, which is greater energy security and a drive towards a cleaner net zero future?

David Whitehouse: Looking at the 400 members that we represent—people investing in our oil and gas, wind developers, people investing in carbon storage, but also a huge supply chain—I do not think we are sceptical. As an organisation, looking at our 400 members and at the 200,000 people who work in the sector, we see that journey to net zero as a real opportunity for the UK and for Scotland if we build on our industrial strengths. We are so lucky in this country that we have brilliant people and a world-class supply chain; we are also lucky that the wind blows and that we have the North sea and other assets. We must make best use of them.

Within the context of a wider energy strategy, we absolutely welcome GB Energy. It will play a role in a bigger energy strategy and a bigger industrial strategy. How do we see GB Energy working? We see it unlocking opportunities that otherwise would not happen. It will not create value if it simply replicates what the private sector would do anyway—I think that will be acknowledged in the priorities that I would expect to see from the Secretary of State. There is a still a huge role to play in de-risking projects, as well as in some of the local energy projects that have been raised. There is a huge opportunity to invest in technology and future infrastructure.

We touched on infrastructure with our European neighbours. How do we interact with it? Already, we have a number of companies looking at what kind of projects meet the mandate of GB Energy and would fulfil it. Do not forget the world-class supply chain that we have. We will fail in this country if we do not recognise how important our supply chain is. Our oil and gas supply chain is world-class. The transferability of those skills to what GB Energy needs to deliver is huge. There is a massive appetite for us to leverage the skills that we have and use GB Energy as a vehicle to deliver value for the country.

[Andrew Bowie]

Q Do you think this Bill will do that, Mr Whitehouse?

David Whitehouse: I think what you have is a Bill that, as you have heard in evidence, provides broad definitions and broad statements of intent. In and of itself, it is a platform to deliver that. What will be critical is that the Government, the Secretary of State and the devolved Governments, who have welcomed this, work together and honour the words about working in partnership with industry to take what is on paper and turn it into a reality of unlocking opportunities that would not be happening—opportunities for communities up and down the UK, and certainly for our key supply chain companies—to help us to accelerate some of the critical projects that need to be unlocked.

[Andrew Bowie]

Q We had the CCSA before us a few minutes ago, and there was some concern from its members about the objects in clause 3(2), which states that

“Great British Energy’s objects are restricted to facilitating…the production, distribution, storage and supply of clean energy…the reduction of greenhouse gas emissions…improvements in energy efficiency, and…measures for ensuring the security of the supply of energy.”

Is there any concern from among your members that the stated objects will prevent GB Energy from partnering with or investing in some of those companies, given that they have an existing footprint in the oil and gas sector?

David Whitehouse: We will look to bring clarity in that area. The interpretation we have taken and the conversations we have had indicate that this would not preclude companies from investing in that manner, and that the Bill is broadly defined to allow all companies to invest. That is something we very much welcome. We see the journey to net zero as being one of inclusivity, not exclusivity. As I have said, we represent companies that produce oil and gas, which have a critical role in our energy mix, but in terms of bringing forward technology, as it stands, no, we do not think that. There is an opportunity, though, as the Secretary of State brings forward the priorities, to provide clarity that those things would not be excluded.

[Andrew Bowie]

Q I have one last question, if I may beg your patience, Sir Roger. Obviously, Mr Whitehouse, a lot of the members that you represent are in Aberdeen. In our very first piece of evidence this morning, we heard from Mr Juergen Maier, who is the new chair of GB Energy. It has been announced that the headquarters of GB Energy, established by this Bill, will be in Aberdeen. How important do you think that is, given the links that will have to be established to the existing energy sector and the importance of the supply chain to the success of GB Energy? How do you think the geographical location of the headquarters will affect the future success of the company, and indeed the energy sector in the UK?

David Whitehouse: The position we have always taken is that you have energy communities up and down the UK. We have a very proud energy sector, and in principle I think you could have put GB Energy in many places, but we welcome it in Aberdeen. The reason we welcome it in Aberdeen is because that is where you see a real density of high-quality operators, high-quality developers and high-quality supply chain. That is the right place to put it. We take confidence that this journey to net zero must be about inclusivity, and about breaking down barriers and building bridges. Having GB Energy centred in Aberdeen is a good statement of intent that this Government—it was also supported by the Scottish Government—recognise that as well. We need to make the most of our industrial strength. Placing this in Aberdeen is a good statement of intent, so we welcome that.

[Torcuil Crichton]

Q Mr Whitehouse, I hear what you say about the Bill and GB Energy being an opportunity, but I hear from some of your members that they think renewables are a threat. How can we change that language? To protect that world-class supply chain, what can the industry and GB Energy do to ensure that the supply chain and the jobs stay here?

David Whitehouse: Apologies: what was the word they were using?

--- Later in debate ---

[The Chair]

You are most kind. With that in mind, we will now hear evidence from Andy Prendergast, who is the national secretary of the GMB. We have until 4.30 pm, in theory, but we may be interrupted. Mr Prendergast, for the benefit of the record could you identify yourself?

Andy Prendergast: I am Andy Prendergast, national secretary of GMB union.

[Andrew Bowie]

Q Thank you for taking the time to come and join us, Mr Prendergast. For the benefit of the Committee, could you elaborate on the overarching view of GMB members on the establishment of Great British Energy and on Government energy policy overall?

Andy Prendergast: We see GB Energy as a long-overdue, desperately needed step. As a country, and as someone who works for a union supporting tens of thousands of energy workers and people who work in energy-intensive industries, there is a real problem at the moment when we look across the world at the investments being made in green technologies and what other Governments are doing to ensure that those investments lead to jobs and supply chains in their nations. What we see in Britain is a complete failure to match that, whether it is the Inflation Reduction Act in America, or European subsidies.

As a union, we regularly sit down with investors who have shovel-ready projects that have the opportunity and potential to transform huge swathes of Britain in areas that we have called “left behind”, “post-industrial” or “red wall”, but we simply cannot get the support to get those through. The investors are telling us that if they decide to put their site in Philadelphia, they get huge subsidies and tax breaks; if they decide to put it in Germany, they get subsidies and Government support, but in Britain there is simply a void.

I have heard quite a lot of people talk about the importance of supply chains. I will be honest: for my union, we do not necessarily see that to the same degree. If we look at offshore wind, we see jackets, technology and blades that are not made in Britain. We have huge swathes of the country where people are willing and able to work, yet they are sitting there watching this technology be imported in. In the case of the Methil fabrication site in Scotland, which is currently sitting without work, they are watching the wind turbines that they could be building being put up in the sea in front of them. We need to avoid that, and I think GB Energy is the first step to doing that—a step, frankly, that should have been taken a long time ago.

[Andrew Bowie]

Q In the case of the Methil yard in Scotland—I think it is Burntisland we are speaking about—the UK Government and, I think, the Scottish Government did attempt to save that yard and ensure that it works moving forward. I do not know how GB Energy would have been able to do much more, but I take your point that we need to build up the domestic supply chain and ensure that there are manufacturing jobs here.

Do you think that the aims and objects of this Bill go wide enough? Do you think that there is broad enough scope for the different technologies that GB Energy will have to invest in? We have heard the CCSA raise slight concerns that there might not be the scope for investment in carbon capture, for example, where a lot of new jobs are going to be created, and presumably a lot of those will be members of the GMB.

Andy Prendergast: We fought for carbon capture to be included. As far as we are concerned, having checked the wording, we think that is covered. An issue we have on the scope is whether the funds are sufficient to back the ambition. Before the election, we were talking £28 billion at one point. What we have offers a huge scale and a huge opportunity, and while ultimately we would like to see more money, this is genuine, real money that was not there before. That is a step in the right direction. From a trade unionist point of view, I very frequently argue about a lack of money—we do it on a daily basis everywhere.

Another concern with the Bill, which I think the Bill itself addresses, is the relationship between GB Energy and GB Nuclear. We desperately need new nuclear. We are waiting for the decision on Sizewell and we would like to see the decision on Wylfa as well as small modular reactors. There is a genuine question about whether SMRs fit under the remit of GB Energy or GB Nuclear, and it needs to be resolved. SMRs are another of those technologies that British brains created but, if we are not careful, we will see the supply chains go overseas. It is an industry that is likely to be £180 billion within a decade. The choice we have with that is either to support British companies such as Rolls-Royce or, as with wind, to import this key technology that should be supporting companies and jobs throughout Britain.

[Andrew Bowie]

Q I could not agree more. There will be 70,000 jobs created by SMRs alone over the next few years if we get it right. Would you like to see clarification in the Bill of the relationship with Great British Nuclear?

Andy Prendergast: I am not necessarily saying that it needs to be in the Bill, but it needs to happen quite quickly. The Bill refers to the fact that it needs to be bottomed out, and every route we look at to net zero requires a huge increase in the amount of nuclear power. We need that decision on Sizewell quite quickly. I do not look at that as key to GB Energy, but it needs to be resolved.

[Andrew Bowie]

Absolutely. By the end of the year would be great.

[Josh MacAlister]

Q Welcome, Andy. Thousands of your members are at Sellafield, involved in one end of the energy system, doing brilliant work in the decommissioning field. You have touched on the relationship between GBN and GBE. The Bill does have flexibility for future involvement with nuclear. What I imagine the Government have tried to do, which I think the Bill achieves, is to get the relationship right so that GBN can continue with its programme of work without being disrupted, while opening the door in the future for a bringing together of the two endeavours. Does the GMB have views on how best to enable the multi-gigawatt-scale programmes in the future, and reflections on the experience with GBN today that would inform the Bill?

Andy Prendergast: The most important thing to say about nuclear is that the nuclear industry in Britain is, to a degree, a tragedy. We invented it. The first civil nuclear site in the world was British, and yet when we came to Hinkley Point, we had to import the know-how and technology and reinvent the wheel. What we have done in Hinkley Point has been amazing. The site employs tens of thousands of people and provides real, skilled jobs—the kind of jobs people are proud to do, which is very important.

If we look at the lessons we learned from Hinkley and transfer them to Sizewell, we start speeding up the process. If we then go on to Wylfa, it becomes easier to take them through. The key thing it shows is that we cannot have those huge gaps. When we have gaps, we lose the skills. What is frightening for us in so many areas is that we are talking about an energy transformation, but we simply do not have the skills to transform at the speed we need to.

There is an estimated lack of 40,000 welders in this country. In the near future we will need more pylons, a huge amount of work on the water mains, SMRs, CCS and hydrogen. I sat on a load of Government bodies with the last Government, and all I kept hearing was, “We need more welders.” You had to take a view that, sadly, repeating “We need more welders” does not magically lead to a lot of welders showing up. We need the investment in the skills and in the supply chain to ensure that we get the right people in the right place.

It is important to say that welding jobs are fantastically well paid. They are jobs that get paid more than most people in this room. There should not be a problem employing welders in this country if we simply resort to capitalism, so if there is a problem, how do we identify it and how do we get around it?

--- Later in debate ---

[The Chair]

Q We will now hear oral evidence from Michael Shanks MP, Minister for Energy at the Department for Energy Security and Net Zero. For this session, we think we have until about 5.05 pm. Mr Shanks, could I ask you to identify yourself for the benefit of the record?

Michael Shanks: Good afternoon. I am Michael Shanks, the Minister for Energy.

[Andrew Bowie]

Q Good afternoon, Minister—we have obviously not seen enough of each other today. When you were introducing this Bill on the Floor of the House, you said:

“There will be a range of projects, in some of which we will certainly have the controlling stake, and some of which we might help to get over the line, but in every single project there will be a return for the British taxpayer.” —[Official Report, 26 July 2024; Vol. 752, c. 939.]

We have already talked about how GB Energy will be important—almost the key partner in investing in riskier technologies. How can you guarantee that every single project will have a return for the British taxpayer?

Michael Shanks: It is important to say that the return for the taxpayer will take different forms. We have been really clear in all the briefings we have done on the Bill and in the founding statement that in some we will take an equity stake, in some there will be debt financing, and in others we might provide some of the capacity for organisations to take forward some of the funding or project delivery themselves. In each one of those, we expect that GB Energy will play a part in delivering those projects, getting them over the line and delivering for the British people. That will be done in a variety of ways.

Some of it will absolutely be money coming back to GB Energy, which we have said will either be further invested in more projects or give a return to the Treasury to fund public services in different ways, but it might also be that on community energy, for example, we help community projects to get up and running. That also delivers a return for those communities.

[Andrew Bowie]

Q You can see why the interpretation of what you said might lend itself to the understanding that what is returned to the taxpayer is a monetary value from every single project being invested in. Are you clarifying that today? You are not standing by that statement.

Michael Shanks: I am saying very clearly that the aim of setting up GB Energy is that, like other countries right across the world, we can have a stake in some of the projects we are delivering. That is quite normal in many European countries. Indeed, the previous Government found it acceptable for those projects to set up in the UK too; it is just that they did not want the UK to have a stake in any publicly owned energy. It is a very common method of delivering projects like this, and giving a return to the British taxpayer is important. It will take many different forms.

In time, there will absolutely be a significant financial return on many of these projects, but in some of them, as you rightly say, de-risking them and getting them over the line will involve us taking a strategy that means that, on individual projects, we might not make an immediate return. But the overall vision of GB Energy is that it will play a part in helping us achieve our targets by 2030, and the British public will have a stake in that future. That is something we believe in, and we hope all Members of Parliament support it.

[Andrew Bowie]

Q In the context of the Bill—the objects, the financial assistance and the strategic priorities and plans—it is quite clear that you are seeking to develop a company in the mould of an Ørsted or an EDF. I just quoted you on the target of 2030 for the decarbonisation of the grid. Some of the other witnesses have said that it will take 10 to 15 years and many billions of pounds more than has already been allocated to GB Energy even to begin to compete with an EDF or an Ørsted. How on earth will this company assist on that journey to 2030 decarbonisation if it will take as long as some of the other witnesses have said to begin to compete?

Michael Shanks: I think there are two different questions there. If you look at the rest of Europe, there are fantastic companies—EDF, Ørsted, Statkraft—that are delivering many of these projects in the UK. It is a model that clearly works, and that delivers economic and social benefits to those countries and to the people living in them. If we look at the price spike when Ukraine was invaded, EDF was able to mitigate some of that significant rise in bills for people in France. We are not saying that within six months of setting up GB Energy, it is going to compete with Equinor or Ørsted—of course we are not—but it is important that we start that journey. Of course, all these publicly owned companies started somewhere. They have been able to invest in the future to get to the scale that they are now, and to deliver significant projects in the process.

The second point of the question is important. GB Energy is not designed to displace any of those companies—or any other companies, incidentally—in delivering projects in the UK. It is about crowding in additional investment. We know that 2030 is going to be a real challenge. We have been very clear that we have set a target that we think is extremely ambitious, but achievable. When NESO publishes its road map shortly, it will give the detail on how we are going to get there. But we have to start somewhere, and I think GB Energy is a critical part of delivering that and will play a significant role in getting us to 2030—and, crucially, beyond 2030.

[Andrew Bowie]

Q You are absolutely right in what you say. Some of these companies—EDF, Ørsted, Equinor, Vattenfall—are fantastic companies. It should be noted that while EDF returned for the French taxpayer, it was also bailed out by the French Government to the tune of about €20 billion last year. I hope we do not get into a similar situation with GB Energy.

Moving on, some concern has been raised today that there has not been very much clarification, or that there is some confusion, over the status, operational independence and autonomy of Great British Nuclear within GB Energy. I wondered if you might expand on that and maybe think about putting something in the Bill regarding Great British Nuclear and its relationship with Great British Energy.

Michael Shanks: That is a really important question. We have said throughout that we want to have further discussions about the role of Great British Nuclear. I think folding it into Great British Energy is probably not the right solution, because what is really important—credit to your Government for doing this—is that the board of Great British Nuclear has significant expertise in nuclear projects. I think that is important for us to maintain. Clearly, there will be synergies and work together on certain projects, but they have, in some ways, quite different remits in terms of the investments we expect them to make, so I think they probably will remain in some form independent of each other. Clearly, the partnership working between them will be important, and we will say more on that in the coming months.

[Andrew Bowie]

I agree with you entirely on what you said about Great British Nuclear. Sir Roger, I think we should note that the Minister has just credited the former Government with something. I think it is the first time—

Michael Shanks: I think I credited you earlier as well. This is becoming a habit.

[Andrew Bowie]

Q This is my very last question, Sir Roger, as you will be pleased to hear. Earlier on, Juergen Maier, the chair of GB Energy, committed the headquarters in Aberdeen to employing in the region of hundreds of people—he did say over 1,000 people—in time. Will you be drawn on any specific numbers of people who will be based at the headquarters in Aberdeen?

Michael Shanks: No, I will not be. To be fair to Juergen Maier, what he said very clearly was that in the initial set-up phase and for some time afterwards, we are talking employees in the hundreds based in the headquarters. Eventually, we think it may expand beyond that in Aberdeen and in the satellite offices, and indeed in any other set-ups that we have across the UK. I think the critical point on jobs is that the role of GB Energy is to invest in projects where we are creating new well-paid, trade-unionised jobs in the UK. That is critical. The jobs are not necessarily going to be in the headquarters of GB Energy, but they will be created by GB Energy’s investment. That is where the tens of thousands of jobs right across the UK will come from.

Great British Energy Bill (Third sitting)

Andrew Bowie Excerpts

Committee stage
Thursday 10th October 2024 Public Bill Committees

[Michael Shanks]

I am delighted to hear the right hon. Gentleman’s wholehearted support for Great British Energy. That is fantastic. I did not know that, so that is wonderful, and I thank him for that great support. It has really cheered my whole day, in fact, that I now have his support. Things can only get better, as we say.

On the right hon. Gentleman’s specific point about efficiency measures, we are already taking a number of steps on that matter in other areas. For example, our warm homes plan will transform homes across the country, making energy in individual homes cleaner and cheaper to run. We announced a local grants programme to support that. Of course, that does not apply in Scotland, where such work is devolved. I think the Scottish Government could probably do more in this policy area. The Scottish Government have made significant budget cuts to projects—£133 million was taken out of energy efficiency measures in 2022 and 2023—so I think work could be done across the board on the matter.

On the point about updating Parliament, it is really important that we are talking about a publicly owned energy company. It will be independent of Government, but of course it will be responsible to Parliament in the way that any other independent companies wholly owned by the Secretary of State are. A copy of the strategic priorities will be laid before Parliament. Any directions given to Great British Energy by the Secretary of State will be laid before Parliament. Of course, there are already several other mechanisms that the right hon. Member for Aberdeen South, as an extremely well-versed parliamentarian—far more so than I am—knows he can avail himself of.

[Andrew Bowie (West Aberdeenshire and Kincardine) (Con)]

In respect of the point that the Minister has just made, and also the point that he made to the hon. Member for South Cambridgeshire, who represents the Liberal Democrats, he said that the strategic priorities would be laid before Parliament. Does he have a timescale for that? He said it would be far quicker than six months, so are we talking about before Christmas? Are we talking about before the November recess? Does he have in mind a date when the strategic priorities may be laid before Parliament?

[Michael Shanks]

If the hon. Gentleman is proposing that the Bill will be through Parliament by Christmas, that would be great—we could move forward. Of course, we need the Bill to have Royal Assent before we can move forward. I welcome his co-operation on making sure that it has a swift passage through the House of Lords and the Commons. We will move as quickly as possible. It is in no one’s interest, let alone that of a Government who are moving as quickly as possible to deliver this, for it to be delayed any further.

Finally, the requirement in new clause 1, tabled by the right hon. Member for Aberdeen South, to report to Parliament on energy efficiency measures is unnecessary because there are already many mechanisms for that. We have been consistently clear that Great British Energy will be operationally independent. I hope that the right hon. Gentleman will therefore not press his new clause to a vote.

--- Later in debate ---

[Michael Shanks]

Amendments 2 and 9 seek to add provisions on community energy to the Bill. As I have said in a number of answers in Parliament and in our session on Tuesday, support for community energy is something that I absolutely share, and it is clearly shared by a number of hon. Members across the House. It will be an integral part not just of Great British Energy, but of the Government’s entire energy strategy. That is why the local power plan is a key part of Great British Energy’s delivery model, and it goes broader than GB Energy, to every other part of Government policy on energy.

As my hon. Friend the Member for Na h-Eileanan an Iar pointed out, it is essential that communities are involved. It is not a nice-to-have; it is critical. If we are to build the infrastructure we will need in future, we want communities across the country to reap the rewards. A key part of that is community-driven projects and community-owned projects.

[Andrew Bowie]

Last year, almost to the day, we launched the £10 million fund for community energy projects, building on the success of previous community funds, to be delivered through local energy hubs. How does the Minister envisage Great British Energy working with those local hubs to deliver those community projects that we announced funding for last year?

--- Later in debate ---

[Olivia Blake]

This is a really valuable discussion, even if the amendment does not make it into the Bill. In the last Parliament, I served on the Energy Bill Committee. Conservative Members will remember the hours and hours of debate—it felt like days, months, years—about wider energy policy, and unfortunately there was nothing on reducing home energy use through insulation. I pay tribute to the wonderful Alan Whitehead, who kept us all entertained as the shadow Minister on that Committee. [Hon. Members: “Hear, hear!”] He was a very good man and gave a lot to this subject in particular.

Although I understand why the amendment has been tabled, this discussion is related more to wider energy policy than to the setting up of GB Energy. I understand why it has come up and it is good that we are discussing it, because it is a matter not just of energy efficiency but of human health. Sir Michael Marmot published a paper this year, reiterating the very human cost of poor-quality housing and the fact that so many homes in the UK have an energy performance certificate under level C. That is why I am pleased that in the run-up to the election we were championing the warm homes plan. I very much look forward to that, and I think it will cover the concerns of the hon. Member for South Cambridgeshire.

The Bill focuses not only on reducing emissions, but on reducing the use of energy within the objects. We have covered the issue with the words “energy efficiency” in clause 3(2)(c). I know that that sounds quite limited, but there is much more to energy efficiency than loss within our homes; it is also about loss of energy within the system, so it is right to have a broader framing of energy efficiency within the Bill.

[Andrew Bowie]

I will not detain the Committee long, but I want to express the Conservatives’ support for the Liberal Democrat amendment, primarily because of our concern about the impact of the removal of the winter fuel allowance from so many pensioners this winter, and the fact that the warm homes plan, as welcome as it is, will not be up and running until next spring, which leaves considerable concern over what might happen in and around this winter.

Those pensioners should be at the forefront of our mind as we look towards winter and as we are discussing an increase in the number of well-insulated homes in this country—on which, by the way, we had quite a good record when we were in government; we increased markedly the number of homes at EPC level C or above. For those reasons, we will support the amendment if it is pressed to a vote.

[Torcuil Crichton]

It is difficult to argue against home insulation, but I do not know whether we need legislation or an amendment to the Bill to achieve it, particularly when it is happening already in community-owned power companies such as Point and Sandwick Trust in my constituency. The company raises £1 million a year for its community, and distributed in the last 18 months £250,000 to people living in fuel poverty, to help with home insulation and heating costs. That is the template, the model and the example that GB Energy could help and sustain without need for the amendment.

[Andrew Pakes]

I share huge empathy with the sentiments behind the amendment, but I believe that the answer to home insulation sits not in the Great British Energy Bill, but in the wider clean power and clean energy mission. I find it quite rich for Opposition Members, who used to be in government, to talk about supporting an emergency home insulation programme when they decimated the apprenticeship programme that delivered the workforce that could actually insulate our homes.

[Andrew Bowie]

The record of the last Government was that we increased the number of homes that were insulated in this country to EPC C or above from 14% to more than 50% over our time in government. That is a record of which we can be proud. Can we do more? Absolutely—that is one of the reasons why we are actually backing the Liberal Democrat amendment—but I think that to castigate our record as somehow disgraceful, or to say that we did not deliver for the British people, is wrong. I ask the hon. Gentleman to withdraw or rethink his remarks.

[Andrew Pakes]

I thank the hon. Gentleman for being kind to me in the first intervention that I have ever taken in this House, but I will stick to my point: that we could achieve so much more in this country. We would be having a fundamentally different conversation about insulation efficiency and renewable energy if we had not gone through the last 14 years, in which budgets were cut. There are young people in my constituency of Peterborough who could have contributed, by moving from blue-collar to green-collar jobs, if we had had a further education system that was functioning and could train them—if we had a home insulation system that had a workforce that could get out and deliver.

Whatever we say in any resolution, motion or primary legislation in this place will not be enacted unless we have a people plan that delivers for it. That is why delivering on this issue should come in a different piece of legislation, even though I have huge empathy with the sentiments expressed by the hon. Member for South Cambridgeshire.

--- Later in debate ---

[Michael Shanks]

In summary, clause 3 is about restricting Great British Energy’s activities to those specifically listed in the Bill, around “facilitating, encouraging and participating” in clean energy projects, reducing greenhouse gas emissions, improving energy efficiency, and ensuring energy security in the long term. Clause 3 thus provides the framework for Great British Energy to carry out the five functions outlined in its founding statement.

I turn to the objects set out in clause 3. Clause 3(2)(a) will enable Great British Energy to facilitate, encourage and participate in clean energy projects. Clean energy is defined in the Bill as

“energy produced from sources other than fossil fuels”.

The object will enable Great British Energy to drive the deployment of clean energy, helping to boost our energy independence.

Clause 3(2)(b) will enable Great British Energy to facilitate, encourage or participate in projects that would contribute to the reduction of greenhouse gases from energy produced from fossil fuels. Building on some of the evidence we heard on Tuesday, I want to be very clear that that includes, for example, projects relating to carbon capture and storage, or blue hydrogen.

Clause 3(2)(c) will enable Great British Energy to deliver measures to improve energy efficiency. That could include, for example, supporting demand reduction through the local power plant.

Clause 3(2)(d) will enable Great British Energy to respond to any future energy crisis, and deliver measures to support the long-term security of supply. Great British Energy is part of a bold, long-term strategy to harness our nation’s clean energy potential, and ensure that we reduce our exposure to the volatile fossil fuel markets.

Through those objects, clause 3 provides the framework from which Great British Energy can carry out its five functions. Although the five functions are set out in the founding statement rather than in the Bill, it would be helpful to refer to them in the context of clause 3. First, Great British Energy will invest in and own energy projects. Secondly, Great British Energy will lead projects through their early development stages, to speed up delivery while capturing value for the British people. Thirdly, Great British Energy will deliver our local power plan, working with local authorities, combined authorities and communities to deliver the biggest expansion of community owned energy in British history. Fourthly, Great British Energy will work with industry to develop supply chains across the UK to boost energy independence, but also, crucially, to create good, well-paid, trade unionised jobs.

[Andrew Bowie]

On the point about supply chains, the sustainable industry rewards were being designed to come with the next auction round next year. How will GB Energy work alongside the existing frameworks to deliver those sustainable industry rewards, to ensure that we build up the domestic supply chain that everybody across the parties wants?

[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.

--- Later in debate ---

[Michael Shanks]

Great British Energy will be operationally independent, with the Secretary of State as the sole shareholder. To operate, Great British Energy clearly needs funding, and clause 4 will give the Secretary of State the power to provide financial assistance to Great British Energy. That is so that GB Energy can take action in line with its statutory objects set out in clause 3, including financing its investments, joint ventures and day-to-day running costs.

To be clear, our intention is that Great British Energy will become financially self-sufficient in the long term. Great British Energy will invest in projects and expect a return on investments, generating revenue and delivering profits that benefit the public. It will also create tens of thousands of good jobs. However, it is prudent to ensure that the Secretary of State has the power to provide further financial support if required. Just as private sector companies would rely on the financial strength of their corporate groups to raise funds, there could be a case for providing Great British Energy with further financial support for specific projects in the future. The clause will enable that.

I assure the Committee that any further financial assistance to Great British Energy provided by the Secretary of State will of course be subject to the usual governance and control principles applicable to public sector bodies, such as His Majesty’s Treasury’s “Managing Public Money”.

Finally, in the highly unlikely situation of Great British Energy facing financial difficulty, the powers set out in clause 4 would allow the Secretary of State to step in to help prevent any disruption to Great British Energy’s intended interventions. I commend the clause to the Committee.

[Andrew Bowie]

I am comforted that the Minister thinks it very unlikely that GB Energy will get into any financial difficulty. But let us look at state-owned energy companies around the world. Just last year, for example, EDF—a fantastic company investing a lot into the United Kingdom—had to be bailed out to the tune of about €20 billion. Although I am comforted by his assurance, I think we would like to see a little more evidence for that assertion before moving forward.

The Minister says that any financial assistance will be governed by the usual processes of being accountable to Parliament, and that the Secretary of State would be, should that be the case, but clause 4(3) states:

“Financial assistance under this section may be provided subject to any conditions the Secretary of State considers appropriate.”

Should it not be conditions that Parliament considers appropriate? Will the Minister expand more on what those conditions might be?

[Michael Shanks]

I am always willing to give the hon. Gentleman comfort, in this and many other things. On both those points, the Bill quite rightly says that it is subject to any particular requirements of the Secretary of State. That is about saying that, instead of giving money to a company without any requirements, requirements will of course be put on what that funding is for—a fairly standard thing that I think we would expect.

On the broader point about parliamentary scrutiny, there are of course a number of mechanisms through which Parliament can bring scrutiny to these decisions. As I have already said, it will be outlined that any additional funding that should be given to GB Energy in the future will be in the course of the normal processes of any financial transactions that the Government undertake.

I think this is important, though: the hon. Gentleman has used the EDF example on a number of occasions, but he does not often reference the other side of the equation —hugely successful state-owned companies around the world. The truth, in all this Bill, is that for the first time in more than 70 years we are delivering a publicly owned energy company in this country, in the same vision as many of the publicly owned energy companies that are hugely successful around the world and delivering huge returns to their taxpayers every single year.

We are starting off GB Energy on a much smaller scale —of course we are—but, in time, we see it as a vehicle for delivering some of the huge successes that those companies have, and delivering a huge return to the public. We believe that public ownership of infrastructure is a good thing, and we hope that we can convince hon. Members across the House that this is the right thing to take forward.

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

--- Later in debate ---

[Andrew Bowie]

I beg to move amendment 11, in clause 5, page 3, line 8, at end insert—

“(1A) The statement of strategic priorities under subsection (1) must include the reduction of household energy bills by £300 in real terms by 1 January 2030.”

[The Chair]

With this it will be convenient to discuss the following:

Amendment 12, in clause 6, page 3, line 38, at end insert—

“(1A)

(a) The Secretary of State must give a specific direction to Great British Energy that it must report to the Secretary of State on the progress made by Great British Energy towards the strategic priority of reducing household energy bills by £300 in real terms by 1 January 2030.

(b) A report under paragraph (a) must include a projection of how Great British Energy’s activities are likely to affect consumer energy bills over the following five years.

(c) A report under paragraph (a) must be made within two years of the date of Royal Assent to this Act and annually thereafter.

(d) The Secretary of State must lay a report made under paragraph (a) before Parliament.”

Amendment 24, in clause 5, page 3, line 8, at end insert—

“(1A) The statement of strategic priorities under subsection (1) must include a priority to reduce household energy bills by at least £300 in real terms.”

[Andrew Bowie]

It is a pleasure to serve under your chairship, Dr Huq, and a privilege to be back in another Committee Room debating a Bill on energy—we did not do enough of that last year.

Amendment 11 would provide a specific strategic priority for Great British Energy to reduce the average household energy bill by £300 in real terms by 1 January 2030. Amendment 12 would require an annual report to be laid before Parliament on how GB Energy activities are affecting household energy bills. The often repeated claim that the purpose of GB Energy was to save each bill payer £300 on their energy bill seems to be conspicuously absent from the legislation before us, which 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 in energy efficiency and measures for ensuring security of supply.

This morning, we checked the Labour party’s website. It still says:

“Great British Energy is part of Labour’s Green Prosperity Plan”,

which will

“cut bills by £300 on average and deliver real energy security.”

On 19 June, the Chancellor of the Exchequer said on Twitter:

“Great British Energy, a publicly owned energy company, will cut energy bills by up to £300.”

On 24 May, the now Prime Minister said on ITV’s “Good Morning Britain”:

“Well, we want to, as you rightly say, set up Great British Energy. That is a publicly funded, publicly owned company, which is owned by the taxpayer, making money for the taxpayer”,

and that it would reduce household bills by—he claims —£400. It is a little surprising that this has not made it into the legislation setting up Great British Energy, given that it was a prime reason for the delivery of this company in the first place.

[Josh MacAlister]

Can the hon. Member cite any legislation from the past 14 years that included a specific financial saving, to illustrate his point that it would be appropriate to put that in a piece of legislation? Does he not accept that his quote from the Labour party’s website includes the words “part of”—the point that the Government have made all along?

[Andrew Bowie]

The fact is that the Labour party has brought forward this legislation and is creating this company—a company that the Prime Minister, the Chancellor of the Exchequer and Labour candidates, now MPs across the country, claimed time and again through the election would cut bills by £300. It was one of the reasons why Labour is creating the company in the first place, so it is surprising that it did not want to put the £300 as a specific object in the Bill, given that it was so proud of the fact that this would deliver the savings it said it would.

[Torcuil Crichton]

I, too, have been checking online—with Full Fact, which discloses that the £300 figure that the shadow Minister raises is not based on Labour’s plans; it comes from a report from an energy think-tank Ember, and it is an estimate of what people would save. There was no Government commitment—there never was a Government commitment—to such a figure.

[Andrew Bowie]

That might be in Full Fact, but if the hon. Member goes to Channel 4’s “FactCheck”, he will see that it says:

“During the election campaign Labour suggested bills would be brought down around £300 a year”

through its “net zero energy plans”, including the creation of GB Energy. The Prime Minister said:

“Yes, I do. I stand by everything in our manifesto and one of the things I made clear in the election campaign is I wouldn’t make a single promise or commitment that I didn’t think we could deliver in government.”

So the question is this: will energy bills be cut by £300 by 2030 and, if so, why is that not in the legislation before us?

[Andrew Pakes]

The hon. Member sets great stock in saying what this Government might do. To give us context, can he tell us what his Government did? Did bills go up or down in his tenure as a Minister?

[Andrew Bowie]

While we were in government, we paid half of every single person’s energy bill in this country to get us through the energy crisis, which was created as a result—

[The Chair]

Order. We are going out of scope.

--- Later in debate ---

[Andrew Bowie]

It was created as a result of the invasion of Ukraine by Vladimir Putin, as everybody in this room knows. I know that out there in the country, constituents would like clarification that that remains an express aim of GB Energy, especially the cutting of £300 from their energy bills and particularly for the pensioners out there who are having that exact amount removed from them by this Government, as one of their first acts having got into power.

The Secretary of State has reiterated that clean energy will deliver cheaper energy; it has been repeated in the House, on the campaign trail, in videos and in leaflets. I believe it is important to enshrine accountability to that ambition in this Bill, which will create the institution of Great British Energy. We must introduce a mechanism by which the Secretary of State and GB Energy are accountable to households.

[Olivia Blake]

Surely the shadow Minister agrees that Great British Energy will reduce the costs of energy, because the types of energy projects in which it will be investing will be of lower-cost energy production and we will be less reliant on foreign fuel markets, which have been very volatile for a range of reasons. I accept what he says about what he did as Minister in the last Parliament, but this Government, in our first piece of legislation, are acting to create a vehicle that will enable us to get much further.

We have had a very successful auction, compared with the absolute farce of an auction at the back end of the last Parliament, for clean energy projects that are cheaper and will hopefully deliver on a scale never seen before in this country. I am proud to stand here and say that I think the amendment is not necessary. It is playing quite cute with the rhetoric around this question; it should be withdrawn, because it is playing politics rather than tackling the substance of what the Bill is intended for, which is very serious, as we face a climate and nature emergency.

[Andrew Bowie]

I do not disagree entirely with the hon. Lady. I think we should be aiming to reduce the cost to taxpayers, and that investing in new cleaner technologies, including nuclear, will see energy bills fall in the long run—so why not have that as one of the objects of the company in the Bill? The Bill states that the objects of Great British Energy will be

“the production, distribution, storage and supply of clean energy…the reduction of greenhouse gas emissions from energy produced from 15 fossil fuels…improvements in energy efficiency, and…measures for ensuring the security of the supply of energy.”

There is not one mention of reducing consumers’ bills. Surely we want to enshrine that in the legislation, if that is indeed one of the aims of the creation of this company.

My amendment 12 would include the necessity to present

“a projection of how Great British Energy’s activities are likely to affect consumer energy bills over the following five years.”

Transparency and accountability should be key to the operation of GB Energy, particularly when the investments and activities that the organisation undertakes have a potential impact on household bills for every family in this country. Thank you for allowing me to speak to the amendment, Dr Huq; I do so to ensure that the Bill makes provision for GB Energy to be held accountable on its aim to reduce energy bills for households.

It is in the best interests of GB Energy and of the British public that the company have a clear directive to ensure, through investment in clean energy technology, that the cost of household energy is reduced. Labour MPs made clear the intention of GB Energy to reduce bills—indeed, they campaigned extensively on the £300 reduction—so I hope that they will support amendment 12, which would support them in achieving that goal, along with including provisions on accountability and transparency to the public on the overall impact of GB Energy’s investments on consumer bills.

[Stephen Flynn]

I rise to support amendment 24, which is broadly similar to the shadow Minister’s amendment 11. I am intrigued by the discussion that we have had, various aspects of which appeared to disagree with evidence we have heard.

First, the hon. Member for Sheffield Hallam, if I picked her up correctly, made great play of the fact that GB Energy will reduce costs. Yet just a couple of days ago, each and every one of us was in the room with the chair of GB Energy, who was very clear that reducing bills

“is not the scope of Great British Energy”.––[Official Report, Great British Energy Public Bill Committee, 8 October 2024; c. 6, Q5.]

We can all watch the footage online, and we can all read Hansard.

Secondly, the hon. Member for Na h-Eileanan an Iar made the argument that the £300 promise was not actually a promise. Which is it? Will it or will it not reduce costs?

--- Later in debate ---

[Andrew Bowie]

The Minister is being generous with his time, and I appreciate that; he is a generous individual. If he will not commit to a £300 cut, why will he not stipulate that one of the objects of GB Energy is to reduce consumer bills? That is one of the arguments that Labour used in favour of its creation throughout the election, and indeed afterwards. Why will he not consider at least putting on the face of the Bill a commitment to reduce consumer bills?

[Michael Shanks]

For the reasons I have already outlined, that is implicit in the policy; it is why we are doing it. I think the shadow Minister agreed in response to one of my hon. Friends that this is a useful approach to reducing bills, and the push towards green energy is important.

[Andrew Bowie]

indicated assent.

[Michael Shanks]

The shadow Minister nods in support. I look forward to his support for the Bill as a vehicle for delivering it.

[Andrew Bowie]

indicated dissent.

[Michael Shanks]

He stops short of that.

The shadow Minister spoke earlier about the rising bills caused by Putin’s invasion of Ukraine, as if somehow the UK had no vulnerabilities that particularly exposed us to that invasion. Of course it was an external factor, but it led to huge price spikes in this country, and we are still exposed to volatile fossil fuel markets. We are determined to push towards energy security through cleaner green energy. That is moving at pace—our recent renewables auction was the biggest we have ever had, with 131 projects—and Great British Energy will drive that forward.

--- Later in debate ---

[Michael Shanks]

I fully suspect that in my time as Energy Minister, I will come back to the hon. Lady’s question. It is an important one, and I am very happy to discuss it.

Turning back to the amendments, we have been very clear that the creation of Great British Energy is about helping us to harness clean energy and reduce our reliance on volatile fossil fuels. But it is important—with the patience of the Chair—to outline the other things that we are doing, more broadly than Great British Energy and the Bill. It is important that Labour’s reforms dovetail with what Great British Energy is doing, particularly the review of market arrangements started by the previous Government. We will conclude that work.

We will continue to deliver the warm home discount, which provides a £150 annual rebate off energy bills for eligible low-income households. We are also looking at the burden placed on bills by standing charges, which still make up too much of so many people’s bills; the Minister for Energy Consumers, my hon. Friend the Member for Peckham, is looking at that now. We are working with Ofgem to look at how we can reduce that.

There is a series of measures that are all important and that all work towards the same goal. GB Energy is one of those, and it is important that we implement it as quickly as possible so that we can move forward with increasing our capacity for cheaper energy and reduce bills in the long term. For that reason, the amendments are not necessary.

[Andrew Bowie]

The Minister has our full support on the broad approach that he is taking on market frameworks, standing charges and working with Ofgem, given that we started that work when we were in government. However, a commitment to work towards reducing consumer bills, and specifically the £300 reduction that the Labour party promised during the election would result from the creation of Great British Energy, should be in the Bill. That is why our amendment is essential. I will press it to a vote.

Question put, That the amendment be made.

Great British Energy Bill (Fourth sitting)

Andrew Bowie Excerpts

Committee stage
Thursday 10th October 2024 Public Bill Committees

[The Chair]

Good afternoon, ladies and gentlemen. I assume that by now everyone is an expert in Standing Committees and knows how procedure works, but for the record, although I am sure this has been explained already, amendments are grouped in debating order, not sequential order, so you may find that something will be voted on much later than it is debated, because it appears in the Bill later. If you are worried, ask; otherwise, assume that we shall vote on the right things in the right place at the right time. Although I do not know what I am doing, the Clerks most certainly do. If in any doubt about that or anything in the way of procedure— I notice that one or two new Members are in Committee —please do not hesitate to ask. I shall not know the answers, but the Clerks will.

Because it is so warm, anyone who wants to take their coat off is welcome to do so. [Interruption.] I am tempted to say, “Run around to keep warm,” but unfortunately here you cannot.

Clause 5

Strategic priorities and plans

[Andrew Bowie (West Aberdeenshire and Kincardine) (Con)]

That I beg to move amendment 13, in clause 5, page 3, line 8, at end insert—

“(1A) The statement of strategic priorities under subsection (1) must include ensuring that wholesale electricity prices must be lower in real terms on 1 July 2030 than the day on which this Act is passed.”

[The Chair]

With this it will be convenient to discuss the following:

Amendment 14, in clause 6, page 3, line 38, at end insert—

“(1A)

(a) The Secretary of State must give a specific direction to Great British Energy that it must report to the Secretary of State on the progress made by Great British Energy towards the strategic priority of reducing wholesale electricity prices in the United Kingdom.

(b) A report under paragraph (a) must include a projection of—

(i) how Great British Energy’s activities are likely to affect wholesale electricity prices in the United Kingdom, and

(ii) the likely effect of the projected wholesale electricity prices on consumer electricity bills over the following five years.

(c) A report under paragraph (a) must be made within two years of the date of Royal Assent to this Act and annually thereafter.

(d) The Secretary of State must lay a report made under paragraph (a) before Parliament.”

Amendment 19, in clause 6, page 3, line 38, at end insert—

“(1A)

(a) The Secretary of State must give a specific direction to Great British Energy that it must report to the Secretary of State within three months of each investment it makes on the impact that the relevant investment is projected to have on wholesale electricity prices over the following ten years.

(b) The Secretary of State must lay a report made under paragraph (a) before Parliament.”

[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.

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

The Conservative party in government—I do not know whether opinion has changed—had little regard for private businesses. On Tuesday, however, we clearly heard expert witnesses from private businesses consistently testify that one of the Bill’s key benefits is that it is not overly and unnecessarily prescriptive, so it allows the scope to develop the strategic priorities that focus on ensuring that we get this right. The amendment is completely unnecessary, because it is yet another example of being overly prescriptive, which is not what businesses asked for on Tuesday.

[Andrew Bowie]

I completely agree that we should not be overly prescriptive of business, but one of the strategic objectives in setting up this company should be to work towards a reduction in wholesale electricity prices. The Bill sets out everything else that the company will seek to do, so why not add that to the Bill as an objective for the company in the long run? I do not know why there would be any disagreement with including that objective in the Bill, given that we all agree that electricity prices and the cost of doing business are far too high in this country. Surely, therefore, GB Energy should be working towards that objective—hence I think the amendment is necessary and we have moved it today.

On the requirement on the Secretary of State to give a specific direction to GB Energy, we think that it should report its progress on the priority of reducing wholesale electricity costs to Parliament. Amendment 19 would also introduce the requirement for GB Energy to report to the Secretary of State within three months of every investment on the projected impact on wholesale energy prices over the next 10 years. It is essential that we in Parliament, Government and Great British Energy take a sufficiently long-term view of the decisions and investments that will impact wholesale electricity prices and, therefore, consumer bills and the cost to industry in the years and decades to come. Those are the reasons for our amendments.

[The Chair]

I call the Minister.

--- Later in debate ---

As a publicly owned company, Great British Energy’s investments will give the British people a stake in the energy transition, which we believe is critical. Although the previous Government supported the investment of publicly owned companies for many years—just not any company publicly owned by the British taxpayer—we believe in doing things differently and in public ownership. That is the aim of the Bill and why we will resist the amendments in this group.

[Andrew Bowie]

I have nothing to add, other than to inform the Committee that we will press the amendment to a vote.

Question put, That the amendment be made.

--- Later in debate ---

[The Chair]

I am not sure whether Dr Huq referred to this in the morning, but before we proceed, I will say that ordinarily, at the end of a clause, there is a stand part debate on whether the clause, or the clause as amended, should stand part of the Bill. That debate is in the gift of the Chair. I am usually pretty relaxed about this, and I dare say that Dr Huq is as well. I understand that there was a fairly comprehensive debate on the first group of amendments this morning, so my impression is that we will probably not require a stand part debate.

The quid pro quo for that is a degree of flexibility when we come to talk about things, because very often matters overlap. I have always said that as far as I am concerned, you can have a stand part debate on the first group of amendments if you like, because very often the greater includes the lesser, but you cannot have your cake and eat it—you cannot do it twice. Hon. Members should bear in mind that if there are things that they want to say, it might be a good idea to say them, because they probably will not get the chance in a clause stand part debate. I hope that that is clear.

[Andrew Bowie]

I beg to move amendment 15, in clause 5, page 3, line 8, at end insert—

“(1A) The statement of strategic priorities under subsection (1) must include the creation of 650,000 new jobs in the United Kingdom by 2030 resulting directly or indirectly from Great British Energy’s pursuit of its objectives under section 3.”

[The Chair]

With this it will be convenient to discuss amendment 16, in clause 6, page 3, line 38, at end insert—

“(1A)

(a) The Secretary of State must give a specific direction to Great British Energy that it must report to the Secretary of State on the progress made by Great British Energy towards the strategic priority of creating 650,000 new jobs in the United Kingdom by 2030.

(b) A report under paragraph (a) must be made within two years of the date of Royal Assent to this Act and annually thereafter.

(c) The Secretary of State must lay a report made under paragraph (a) before Parliament.”

[Andrew Bowie]

The amendments would create a specific strategic priority for Great British Energy to create 650,000 new jobs in the United Kingdom by 2030, and require the production of an annual report on the progress of meeting that strategic priority.

It is worth our while this afternoon to take some time to consider the achievements of the previous Conservative Government in driving towards a cleaner energy future. It was a Conservative Government, under Prime Minister Theresa May, who legislated for net zero in 2019. It was a Conservative Government who began and created the contract for difference process, which was looked at with awe by the world at that stage—

[Torcuil Crichton (Na h-Eileanan an Iar) (Lab)]

Will the hon. Gentleman give way?

[Andrew Bowie]

I am mid-flow, but yes.

[Torcuil Crichton]

Was it not also a Conservative Government who refused to take the decision to give Harland & Wolff the funding that would have kept it open and avoided administration and now sale, and who left that hard decision to the incoming Labour Government?

[Andrew Bowie]

As the hon. Gentleman knows, there are many hard decisions to be taken in government, and every decision that the Government have to take has to provide value for money for the British taxpayer. I know that this Government recognise that, given the decision they have taken to remove £300 from every pensioner in the country—something I think they will come to regret.

As I was saying before I was so rudely interrupted, the Conservative Government built the first to fifth largest offshore wind farms in the world, ended coal for power generation and halved emissions at the fastest rate of any G7 power. In that regard, I know that everybody in the room is proud of the record of the Conservative Government just gone and will champion it in our work as we move forward.

Nevertheless, the issue of skills, and the lack of the skilled workforce required to deliver the next phase of the transition, was always at the forefront of Ministers’ minds. Indeed, because of that we established the nuclear skills fund when I was the Minister responsible for nuclear.

[Andrew Pakes (Peterborough) (Lab)]

The hon. Gentleman has forgotten to mention the onshore wind ban, which is really important. If he wants to celebrate his record, let us celebrate it in the full glare of light. Does he agree that one of our big challenges in this country is that we failed to make any progress on nuclear in the last 14 years? We talk about new jobs, but we are losing skilled engineering and nuclear jobs in this country today because they are going to other countries, because those countries are making the progress that we have failed to make.

[Andrew Bowie]

The hon. Gentleman draws me on to nuclear, which is a dangerous place for me to be drawn, as the Minister will know, because we could spend all afternoon talking about the Conservative Government’s legacy on nuclear—

[The Chair]

No, we could not.

[Andrew Bowie]

You might have other ideas, Sir Roger. The legacy is the creation of Great British Nuclear; the beginning of the small modular reactor down-selection programme; the development consent order move in respect of Sizewell C; £200 million invested into high-assay low-enriched uranium fuels to be developed here in the United Kingdom; moving forward at pace with Hinkley Point C; and a commitment to build a third gigawatt-scale reactor at Wylfa—something that this Government have abandoned. It is not the Conservative party that the nuclear industry has a problem with; the industry is now worried about the go-slow on nuclear being implemented in this country by the new Labour Government, because of their obsession with putting all their eggs in one basket of renewables and not looking to the wider benefits of investing in nuclear as well.

On the hon. Gentleman’s point about the onshore wind ban, we delivered everything that I have listed while respecting the rights of communities in this country not to have the countryside where they live, and that they respect and enjoy, industrialised. That is why we had stipulations on communities having a right over what was built in them. I stand by that. It was a good policy and we still halved our emissions faster than any other G7 nation.

When we were in government, we established the nuclear skills taskforce to address the skills gap of 250,000 people that the nuclear industry alone would have were we to deliver all the projects we seek to deliver in defence and energy. We all know that clean energy technology brings employment with it. Estimates for job creation in the transition range from 136,000 jobs to 725,000 jobs by 2030. We all know how beneficial clean energy technology can be for local communities when it comes to employment. Projects such as Sizewell C drive investment—it will bring as many as 25,000 new jobs to Suffolk, and there are already 1,000 apprenticeships in the area. These are high-paid, high-skilled jobs that deliver for the community.

We have heard from the Labour Government that GB Energy will create 650,000 new jobs. On Tuesday, when I asked the chairman, Juergen Maier, about the number of jobs to be based in Aberdeen, he told us that it would be hundreds or even 1,000. I hope that Aberdeen will benefit significantly from being the base for the HQ of GB Energy and that that is not merely paying lip service to a community that is losing out in investment, prosperity and employment opportunities as a result of the energy profits levy increases, the lack of investment allowances, the disinclination to offer new licences in the North sea and the impact that that will have on investment in the transition.

I represent a constituency near Aberdeen, where a significant proportion of constituents are employed in the oil and gas industry directly, or indirectly in the supply chain. The potential for new jobs and the preservation of existing jobs are deeply personal to me and other MPs in the room. In fact, 65,000 people in Aberdeen and Aberdeenshire are employed in that industry and in the supply chain, so I know how impactful on communities those jobs are. I therefore move that we include the creation of 650,000 new jobs as a strategic priority for GB Energy, as well as including the requirement to report on the progress made towards that ambition. If we do not deliver the new jobs and do not ensure that as we move through the transition, those working in the oil and gas industry will have jobs secured into the future—as well as creating the new jobs by delivering the projects we were seeking to, as I know the Labour Government seek to—we will have failed in all our shared ambitions.

[Olivia Blake (Sheffield Hallam) (Lab)]

The shadow Minister’s amendment seems to be a bit of a fig leaf over the failure of the previous Government to secure good, high-quality, unionised jobs in the green energy sector. We need only look at offshore wind. I have cited these statistics before, but in 2010 some 70,000 jobs were promised from the UK offshore wind sector. Unfortunately, 10 years later, it had delivered only 11,900, which is only 5,600 more than were achieved by 2014.

The capacity of offshore wind went up by a huge percentage under the previous Government, for which they should be commended, but their strategy in the past 14 years meant that while they were building offshore wind, they were also offshoring all the jobs that went with it. There was no strategy to cultivate labour-intensive sections of the supply chain; the majority of jobs went abroad. Not enough went into supporting the creation of servicing jobs in the UK. Furthermore, in another element of policy, the embarrassment and failure of the green homes grant truly laid bare the fact that we did not have the right industrial strategy—we had no industrial strategy to support the creation of jobs in those industries or to support a Government intervention such as the green homes grant.

A lot can be said about the opportunities that GB Energy offers. On Tuesday, the TUC agreed that GB Energy would be an enabler for a just transition for those currently working, but it is also my belief that this is a real opportunity for new jobs for the next generation. We have real potential to lever in a huge opportunity going forward to be a main player internationally in some of our emerging technologies.

I am proud to represent a constituency in Sheffield, where we have a lot of research capacity in many different areas related to energy, from battery storage to hydrogen and new nuclear. A lot of research is happening. Such innovation is important to allow for manufacturing jobs to spin off from the primary research.

The amendment is all well and good, but I think it is a little bit rich coming from the Conservative shadow Minister, given the abject failure to deliver on the jobs that we were promised under the previous Government.

[Andrew Bowie]

I have said publicly on the Floor of the House and in other places that we did not see the creation of the jobs that we wanted as a result of our revolution in energy production here in the United Kingdom. As I said, we have the first, second, third, fourth and fifth largest offshore wind farms in the world, which is a source of great pride, but the jobs onshore created as a result of that simply did not come about, hence why we were moving towards the creation of the sustainable industry rewards and were encouraging companies to invest and create the jobs. If the hon. Lady agrees that we should have done more to create jobs, surely she also agrees with the purpose of the amendment, which is to ensure that GB Energy will have as one of its stated aims the creation of 650,000 jobs in new and emerging technologies.

[Olivia Blake]

I would not want to limit the possibilities of GB Energy with a number. It is a big number that the hon. Gentleman has put here but, to be honest, there are huge opportunities in all the energy areas—especially in the supply chain within the UK, but also in the transition of jobs. It is really important that we take it in the round and allow GB Energy to play its role. Not all jobs will come from GB Energy; they will come from the much broader investments that we will see over the next decade. We have had a lost decade in this regard, and there is a lot of skills work that needs to come.

--- Later in debate ---

[Michael Shanks]

For reasons I will come to in a moment, we will not agree to the amendment because we will not put timeframes and numbers in the Bill—we do not see those in any piece of legislation from the previous Government or any other Government, and for very good reason. However, the hon. Lady is right that this decade is absolutely critical for this issue. That is why I am taking it very seriously, and will happily have conversations with her about how we get these jobs as quickly as possible. The timeframe for that is important, but it is also important that we start with building things such as Great British Energy, which I hope she will support, and our broader policy around the office for clean energy jobs, our industrial strategy and our increased investment in things such as the renewables auction.

To come back to what the hon. Member for West Aberdeenshire and Kincardine said about offshore wind, he took some credit for it, but of course his Government have to take responsibility for the complete failure on offshore wind in the last auction. We have turned that around with some really successful projects and want to build considerably more in the future. He gave an absolute masterclass for a new Minister like me on how to speak to something—the onshore energy ban in England—that I know he does not believe in, because he is a smart guy.

The reality is that that was ideology over delivery of something critically important. Now, we have inherited not just a lack of projects that would help us towards clean power and deliver jobs right across the UK, but an empty pipeline of projects, given the length of time where wind in England was banned. It is a ridiculous policy that I do not believe for a second the hon. Gentleman supports, but it was a very good example for me on how to deliver a line.

As I said earlier, this clause is specifically about giving very particular, rare directions in urgent or unforeseen circumstances. It is not a clause we expect the Secretary of State to be using regularly. That is important, because I suspect that if it was phrased in any other way, the hon. Gentleman would quite rightly propose an amendment limiting the powers of the Secretary of State to doing exactly that. This clause is about ensuring that Great British Energy has the space to fulfil its strategic priorities. Amendment 16 would widen that intention by adding a long-term goal.

More broadly, and relevant to both the hon. Gentleman’s amendments, I repeat that the aim of Great British Energy is to be operationally independent from Government. The Bill focuses solely on making the absolutely necessary provisions to establish the company. Adding further unnecessary detail—detail I know the Conservative party would not dream of adding to any of its own legislation—risks restricting the company in carrying out its activities and goes against what we have said. That sentiment was supported by almost every witness, including on specific questions about this matter, where I think people were hoping for different answers. Every single witness confirmed that the Bill is in the right place here. For those reasons, and many others, we will not be supporting the amendments.

[Andrew Bowie]

In confirming that we will be putting the amendments to a vote, I put on the record my congratulations to the Minister, because he may have achieved what I thought was unachievable: getting the right hon. Member for Aberdeen South to welcome and support something with “Great British” in its title. That is a quite a significant achievement, if I may say so.

Question put, That the amendment be made.

Division 6

Ayes: 3

---

Conservative: 3

Noes: 11

---

Labour: 9
Liberal Democrat: 2

[Andrew Bowie]

I beg to move amendment 17, in clause 5, page 3, line 8, at end insert—

“(1A)

(a) The statement of strategic priorities under subsection (1) must include developing supply chains within the United Kingdom in the pursuit of Great British Energy’s objects under section 3.

(b) ‘supply chains’ means the network of individuals, organisations, resources, activities and technology involved in the creation and sale of a commodity connected with Great British Energy’s objects under section 3.”

[The Chair]

With this it will be convenient to discuss amendment 18, in clause 6, page 3, line 38, at end insert—

“(1A)

(a) The Secretary of State must give a specific direction to Great British Energy that it must report to the Secretary of State on the progress made by Great British Energy towards the strategic priority of developing supply chains within the United Kingdom.

(b) A report under paragraph (a) must be made within two years of the date of Royal Assent to this Act and annually thereafter.

(c) The Secretary of State must lay a report made under paragraph (a) before Parliament.”

--- Later in debate ---

[Andrew Bowie]

Amendment 17 would introduce a specific strategic priority for Great British Energy to develop UK energy supply chains and require that an annual report be produced on the progress towards meeting that strategic priority.

We believe it is essential that our transition to net zero does not increase our reliance on foreign countries, foreign supply chains or, in particular, hostile foreign countries. We all want to see a “made in Britain” transition, where our offshore wind turbines are constructed by British manufacturing companies, are erected by highly skilled British workers and deliver clean, cheap energy for British homes and businesses. That is why I have tabled amendment 17, which would make establishing domestic supply chains a strategic priority for Great British Energy.

In the transition to net zero, we are presented with a great opportunity for investment and new jobs. As with employment, we must ensure that it is people in these islands and domestic companies that will benefit from the increase in investment that we hope to see in the new technologies in the coming years. We must not outsource our energy transition. In this transition, we will need steel for our turbines and oil for our turbines. The transition is one that spans the energy industry and incorporates the North sea.

[Catherine Fookes (Monmouthshire) (Lab)]

The hon. Member mentions steel. While his party were in power for 14 years, they had the chance to intervene and support the workers at Llanwern and Port Talbot, many of whom live in my constituency. Does he not agree that if his party had done more during their 14 years in power to support those workers, we would have much greater capacity to produce our own steel and for the transfer to green steel, which would help us to have a stronger UK-based energy industry?

[Andrew Bowie]

I am very proud of everything that we did in government to support our steelworkers and those communities around the country that depend on those jobs. It is desperately sad to see what has happened in Port Talbot recently. That is an example of what we must avoid moving forward, and something that we must avoid happening in the North sea, for example, where workers engaged in traditional industries are fearful about where their jobs sit in the forthcoming transition. Although I do not agree that we did not do everything we could to support steelmaking at Port Talbot, I do think that it is an example to learn from and one that we must avoid in the future.

[Torcuil Crichton]

What the shadow Minister is describing sounds like an industrial strategy—something that we have been missing for 14 years.

[Andrew Bowie]

Well, not quite. We did have an industrial strategy. We had a Department for Business, Energy and Industrial Strategy. It is not an industrial strategy. The amendment aims to establish within the strategic priorities of this company a commitment to deliver a UK-based supply chain, which is something that we sought to do while in Government, with the sustainable industry reward scheme that will launch next year with the auction round for the contracts for difference, and through other programmes and investment opportunities that we were seeking to see come to fruition. I am very glad that this Government seem to be taking the challenge in this regard just as seriously as we did.

The transition we are in just now spans our entire energy industry and incorporates the North sea and our homegrown petroleum outputs. As noted by the Climate Change Committee, we will need oil and gas for decades to come, not just as an energy baseload but as a key component in the transition and in the technologies for the transition.

In our electric vehicles and our batteries, we will need lithium. In 2023, Cornish Lithium opened Britain’s first lithium mine in Cornwall, with £53.6 million investment led by the UK Infrastructure Bank, which we established in 2021, to invest in our domestic supply chain, our clean technology supply chain and our energy future.

In our solar panels, we need silver, indium and copper. In our grid systems, we need kilometres and kilometres of copper. In fact, renewable energy will drive 45% of copper demand by 2030. Our reliance on China for low-cost, clean technology and minerals should worry us all. In 2022, we imported 64% of rare earth metals and 49% of lithium batteries from China.

[Perran Moon]

Will the hon. Gentleman give way?

[Andrew Bowie]

I would be delighted to give way to the hon. Member for Cornwall.

[Perran Moon]

The hon. Member for Camborne, Redruth and Hayle—but I take the shadow Minister’s point. As he said, it is important to consider that an awful lot of our critical minerals are imported from the other side of the world, from Australasia and China, but that in Cornwall we have massive deposits of tin, lithium and tungsten. Does he agree that one opportunity that might come from GB Energy is to expand British jobs in Cornwall and areas that are extremely deprived? In that respect, might he support GB Energy?

[Andrew Bowie]

The hon. Gentleman almost had me —I was almost there. We support creating new jobs in Cornwall. The opening of the mine last year was an incredibly positive step. It was delivered as a result of the UK Infrastructure Bank and the £53 million investment that we drove. The future for Cornwall is incredibly bright when it comes to critical minerals and its ability to supply UK projects and, moving forward, to export across the world. We have not even touched on the potential of geothermal in Cornwall, which is huge and extensive. Cornwall will match only Aberdeen in its importance on our energy journey—nearly match, but not quite.

We need to ensure the supply chains required. The building of clean energy infrastructure will benefit British companies with as much domestic involvement in supply and manufacture as possible. Not only does that safeguard our energy future against the impacts of disruption to the international system, such as we saw during the pandemic, but it reinvests the capital at Great British Energy’s disposal into UK supply chains. Supply chains are a vital component of the employment opportunities here in the UK, as well as our energy security in future.

[Harriet Cross]

Does my hon. Friend agree that the supply chains that we have are used to delivering large-scale multimillion-pound projects? That is important not only for home-grown jobs, but for the success of GB Energy and any infrastructure and skills that will come out of it. We need our home-grown supply chain, which is world renowned, to help deliver this.

[Andrew Bowie]

My hon. Friend and constituency neighbour is absolutely right. I completely agree. She is a doughty champion for supply chain jobs based in her constituency, in mine, in that of the right hon. Member for Aberdeen South and in others across the country. One reason that we have been so critical of this Labour Government’s North sea policies—the extension and increase of the energy profits levy, the removal of investment allowances, the removal of further licences in the North sea—is the impact on the domestic supply chain jobs that exist already and, by the way, on the high-skilled jobs that will deliver the cleaner energy future that we all want to get to.

That is why I and others in Committee have been so critical in the past—it is not that we do not want to see the transition; it is that we want the oil and gas industry, and those people in the supply chain who are employed by it now, to be a part of that transition. Without a successful domestic oil and gas industry or domestic supply chain, we will not deliver any of the projects that we are speaking so glowingly about in Committee and over the past few weeks, months and years. As my hon. Friend the Member for Gordon and Buchan says, it is critical for the supply chain to support net zero transition.

Security of supply chain is absolutely relevant to the objectives of GB Energy and should be included as a strategic priority, hence the amendment. I also tabled amendment 18, which would introduce the direction for GB Energy to report to the Secretary of State on the progress being made towards developing domestic supply chains.

[Michael Shanks]

I am enjoying this debate more and more. I feel that by the end of today, or Tuesday at a push, we may get the hon. Gentleman’s support for Great British Energy. I look forward to that.

The very argument that the hon. Gentleman has put forward for both amendments emphasises the absolute failure of 14 years of his Government. The very fact that he is making those points emphasises how much they failed. I welcome the realisation, albeit somewhat late, that manufacturing in the UK and having jobs in this country delivering for the energy future are important. The Kincardine wind farm off the coast not far from his constituency—perhaps it is in his constituency—is a very good example. It was towed into place, with all the jobs offshored somewhere else. That example that shows why we need to do things differently. Great British Energy and our industrial strategy are part of that.

While I could spend this time criticising the previous Government, I will simply welcome the fact that the hon. Gentleman has showed up to the party at all. This is a key part of what Great British Energy will do. The supply chains are critical, because 80% of the jobs in the oil and gas industry are in the supply chains, and the good, well-paid jobs we need for the future will be there too. I think it might have been the witness from the GMB who made a very good point about jobs in welding. That is a good example of where we can have real, well-paid jobs for the future if we invest in those skills now, and that is exactly what Great British Energy will do.

However, Great British Energy is not the only part that will deliver on those jobs. The Department for Business and Trade is also working at pace to develop an industrial strategy that will include detailed work on the supply chains, and we are working through the various taskforces launched under the previous Government and continued by this Government. For example, on the solar taskforce we have been looking clearly at how we can bring those jobs to the UK. The hon. Gentleman rightly talked about the security of where some of those manufacturing jobs are in the world—places in the world that we would rather they were not. Bringing some of that manufacturing capacity to the UK will be difficult in some of those industries, but it is important to do it so that we have resilient, diverse and sustainable supply chains.

My Department has also established an office for clean energy jobs, which will focus on developing the skills and the training for the workforce in core energy and net zero sectors around the transition, but also, critically, on bringing on the next generation of apprentices and workers in the skills and jobs that we did not know existed until the last few years. That will ensure the sustainability of our supply chains and meet our mission to make the UK a clean energy superpower.

Although it is welcome to hear the commitments from a Conservative party that has had something of a conversion on this issue, we do not think that amendments 17 and 18 are necessary to the Bill, because the Government are already committed to delivering our intentions.

[Andrew Bowie]

I do think that the amendments are necessary. If we are to go through the process of creating this company, we should set out as one of its objects the creation and sustainability of a UK-based supply chain, and indeed of the manufacturing jobs that come with that. For that reason, I will press amendment 17 to a vote.

Question put, That the amendment be made.

--- Later in debate ---

[Pippa Heylings (South Cambridgeshire) (LD)]

Taking away labels such as “nefarious” or “baubles” and moving to the serious intent of our interventions, this is about scrutiny, and I take the point from the right hon. Member for Aberdeen South in that respect. We heard from witnesses that if the objects remain broad, they are reassured that all their issues will be contained within the statement of priorities. Will the Minister reassure us about the engagement that will happen prior to the development of those priorities? If it will not happen through the House, what will the process be? Instead of baubles, we may find bits of home-made tinsel hanging on this majestic tree, which is not exactly what was bought in the shop, to continue the metaphor.

[Andrew Bowie]

A British-made tree.

[Pippa Heylings]

British-made and home-made. I think the serious issue is the extent to which there is reassurance that a statement of priorities, which everybody is accepting will be within the remit of the objects, will fulfil expectations and not steer into areas in which there will be duplication.

--- Later in debate ---

[Michael Shanks]

These are very important amendments, as I alluded to when discussing the last group of amendments. Since I became a Minister, I have worked very hard to reset the relationship. Indeed, the Prime Minister’s first official visit was, deliberately, to Scotland. He has set a clear expectation that all Ministers should be engaging with not just the Scottish Government but the Welsh Government and the Administration in Northern Ireland. That is particularly important in the energy space, because our priorities are broadly aligned. There are slight differences in targets and projects, but we all want to move in the same direction across all Governments of the United Kingdom, which is beneficial.

[Andrew Bowie]

I must take issue with some of the language about this reset—the normalisation of relations and the new respect agenda. We had an incredibly constructive working relationship with the Scottish Government while we were in government. Indeed, had we not, none of the projects that we see established now—we have talked about having the first to the fifth-largest offshore wind farms—and none of the discussions we are having about new technologies would actually have gotten off the ground.

A lot is made of the fact that the new Prime Minister’s first visit in office was to Scotland, but it was also the first visit of Prime Ministers Theresa May, Boris Johnson and my right hon. Friend the Member for Richmond and Northallerton (Rishi Sunak). Our commitment to working with the Scottish Government was demonstrated by what we delivered in our time in office. I very much hope that the Minister continues to enjoy his relationship with the Scottish Government, although I worry that as we move towards 2026 and the devolved election, this new warm relationship between the Labour party and the Scottish National party may become somewhat chillier.

[Michael Shanks]

I would have stopped short of the hon. Gentleman’s final point, which I will not repeat; I think that was more to salve his own conscience than to add any value to the debate. He may want to speak to the other side about some of those discussions to get a sense of whether the joyous relationship that he described was reciprocated. The fact is that if we want to achieve outcomes across the UK, whatever the political differences—they are significant, and he is right that they will become more significant in the few years ahead—we still need to be the grown-ups in the room and work to deliver them. My engagement has been very much around how we bring in the views of Welsh, Northern Irish and Scottish colleagues.

--- Later in debate ---

[Michael Shanks]

I take that point. I will come back to the role of the UK Government in Great British Energy in a moment, as it is important. Of course I want to engage with Scottish, Welsh and Northern Irish colleagues in this place, but I also want to find a way to engage constructively with the devolved Parliaments and Administrations, not just on the statement of priorities but far beyond that. We have already had conversations about how the board of Great British Energy might engage with the Scottish Government on a more regular basis. We are very open to those ideas, but—to come back to this point briefly—it is important that Great British Energy is funded and directed by the UK Government and therefore ultimately responsible to the UK Parliament.

[Andrew Bowie]

I thank the Minister for giving way; he is being incredibly generous with his time. Subsection (6) deals with Northern Ireland in the context of what we are discussing. Energy is a devolved competency within Northern Ireland, which works on an all-Ireland grid to deliver electricity on the island of Ireland. Is that the reason the language in that subsection is slightly different? It refers to consulting the Department for the Economy, as opposed to consulting Welsh Ministers and Scottish Ministers in the previous two subsections. How will GB Energy and the Department interact with our Northern Irish colleagues, given that GB Energy will be a body of the UK Government and paid for by UK taxpayers, but will have very little role in delivering energy in Northern Ireland?

[Michael Shanks]

I thank the hon. Gentleman for that important point. Early on in the development of the Bill, we had a genuine conversation with the Northern Irish Executive about whether Northern Ireland should be included in the Bill at all, on the basis—exactly as he says—that energy is completely transferred in Northern Ireland. We agreed that it was better to keep Northern Ireland in scope so that some of the benefits may come to Northern Ireland, in particular around skills and supply chains, but clearly the relationship will be very different. We do not anticipate Great British Energy funding specific projects, for example, for the reasons that he outlined.

The broader point here is a reiteration of an earlier point: Great British Energy will not have special powers compared with any other company. It is therefore important to recognise that if Great British Energy is delivering projects in Scotland, it will have to conform to Scottish planning and all the other regulations and consenting regimes in Scotland exactly as any other company operating in Scotland would. It will not have additional powers to supersede any of the regulations set by the Scottish Parliament. That is important because, clearly, although the funding will come from the UK Government through Great British Energy, the delivery of those projects, if in Scotland, will largely be the responsibility of the Scottish Parliament through the environmental planning and consenting regimes. Great British Energy will not have additional powers to supersede any of those regulations.

Great British Energy Bill (Fifth sitting)

Andrew Bowie Excerpts

Committee stage
Tuesday 15th October 2024 Public Bill Committees

[Stephen Flynn (Aberdeen South) (SNP)]

I beg to move amendment 3, in clause 6, page 3, line 38, at end insert—

“(1A) The Secretary of State must, in particular, direct Great British Energy that any revenues generated from activities of Great British Energy in relation to resources located in Scotland must be invested back into projects located in Scotland.”

Good morning.

[Andrew Bowie (West Aberdeenshire and Kincardine) (Con)]

Hear, hear!

[Stephen Flynn]

I thank the shadow Minister for that warm welcome. What a delight it is to be back in Committee Room 10 on a Tuesday morning to discuss the Great British Energy Bill.

Last week, we all spoke at length about the massive opportunities in the renewable energy sector in the UK and particularly in Scotland. From fixed-bottom and floating offshore wind to green hydrogen, blue hydrogen, tidal and wave, pumped storage hydro, onshore wind and so forth, Scotland has a plethora of resources. I believe it was the chief executive officer of the Confederation of British Industry who said last week that Scotland’s renewables sector could unlock economic growth for the UK—imagine what it could do for Scotland’s economy.

It is important to reflect on the fact that over the past 50 or 60 years or so of North sea oil and gas, £450 billion has flowed from Scotland’s waters down to Whitehall. Can anyone seriously and reasonably argue that Scotland’s society reflects the magnitude of that wealth in our public environment, our infrastructure or our energy projects, which are in their infancy? They should be much further on, using the wealth that we had accumulated over many decades.

I do not want to see the same mistake repeated. I want to see the revenue generated from Scotland’s energy resources returned to Scotland so that we can ensure a society that is greener, more inclusive and fairer, and that delivers the continual economic growth that we so badly need. Scotland produces six times more gas than we consume, with some 28 to 36 GW of floating offshore wind coming down the pipeline—and that is before I get into all the other energies that are keen to come on stream should the Government finally put in the financial mechanisms to support them.

That affords Scotland the ability to have a competitive advantage, not to repeat what Ireland has done on corporation tax—we cannot all chase the same reduction, which would be a race to the bottom—but to create a competitive advantage that attracts big business to Scotland based on the energy that we consume. The prize is so great that we surely cannot miss out on it. I appreciate that Members around this Committee Room in the United Kingdom Parliament may not share my enthusiasm for Scotland to have its resources returned, but it is an important point to engage with.

[Andrew Bowie]

Will the right hon. Gentleman give way?

[Stephen Flynn]

Always.

[Andrew Bowie]

I am listening carefully to the right hon. Gentleman. Does he share my concern that—should the amendment be agreed to and should the Minister consent to any revenue generated from Scotland by GB Energy being returned to Scotland—the Scottish Government will not be competent enough to deal with it, given that in only six years they have squandered the £700 million generated from the ScotWind leasing round, which was returned directly to Scotland to plug gaps in their own Budget and was not invested in new energy projects, new technology or new infrastructure across Scotland?

[Stephen Flynn]

No.

--- Later in debate ---

Division 8

Ayes: 1

Noes: 10

[Andrew Bowie]

I beg to move amendment 20, in clause 6, page 3, line 38, at end insert—

“(1A) (a) The Secretary of State must give a specific direction to Great British Energy that it must, within six months of the date of Royal Assent to this Act, report to the Secretary of State on the projected cost of fulfilling its strategic priorities under Clause 5 in accordance with its objects under Clause 3.”

It is a pleasure to serve under your chairship, Dr Huq, and to be back debating Great British Energy. Given that Margaret Thatcher has already been referenced this morning, we should appreciate that her legacy is the very reason we are standing here today, because she was the first world leader, at the 1989 UN General Assembly, to raise the prospect of irretrievable damage to the atmosphere, ocean and Earth itself from climate change. Had it not been for her global leadership in so many areas, we would not be debating the issues we are today, nor would the United Kingdom be the world leader in combating climate change we claim it to be.

--- Later in debate ---

[Michael Shanks]

I know that the Conservative party is in shifting political sands at the moment, but I was not expecting this morning to lead with such a full-throated defence of Thatcher—I do not think she is in the running for the leadership of the party.

[Andrew Bowie]

A shame.

[Michael Shanks]

Some things are outwith even the hon. Gentleman’s powers.

There are a number of reasons why we will resist amendment 20. First—I have made this point a number of times—the Bill is about making the minimum possible provisions to support the establishment of the company. Great British Energy will be operationally independent and, although directed at key points by the Secretary of State, its financial responsibilities will be the same as any other company, subject to all the regulations and laws that any company in this country has to face.

The amendment would introduce unnecessary detail into the Bill. As the hon. Gentleman would have agreed in previous Bills that he was involved in, this is an unnecessary amendment, and he would be making that exact argument if he was standing where I am today. As a publicly owned company, Great British Energy will be accountable through regular reporting to the Department, and its annual accounts and reports will be laid before Parliament so that Parliament can see them in detail. As a publicly owned company, it will also be subject to HM Treasury’s value-for-money guidelines. Like all existing public finance institutions, its investments will be subject to the usual safeguards and risk assessments to minimise the risk to taxpayers.

As I said in our last sitting, the purpose of clause 6 is for the Secretary of State to give direction to the company only in the most urgent or unforeseen circumstances. It is not for day-to-day operational reasons; I gave the example last time of national security issues. The power is meant to be used sparingly to ensure that Great British Energy has the space it requires to fulfil its role and deliver its strategic priorities. The amendment would change the intention of the clause, which is one reason we will resist it today.

As the hon. Gentleman knows, the Secretary of State will set Great British Energy’s strategic priorities to ensure that it remains aligned to current Government policy and strategy. It is therefore appropriate that we use clause 5 to set Great British Energy’s strategic priorities and objectives, not clause 6.

I assure the hon. Gentleman that the Secretary of State, rightly, has ambitions for Great British Energy—as the whole Government do and as I hope the whole House does. Those achievable objectives will be achieved through the funding envelope set for it by Parliament, backed by £8.3 billion of new money over the lifetime of this Parliament, and working in partnership with the private sector, local authorities and communities to spread skilled jobs and investment across the country.

Great British Energy’s aim is to become a financially sustainable, self-financing organisation in the long term, reinvesting its profits in the Treasury or into new projects. Therefore, I assure the hon. Gentleman that Great British Energy will be held accountable for the delivery of its objectives through the usual mechanisms. For those reasons, the Government will not support his amendment today and I hope that he withdraws it.

[Andrew Bowie]

I am sad not to hear a full-throated defence of Mrs Thatcher’s legacy when it comes to climate change—maybe the Minister is more of a “Hug a husky”, “Vote blue, go green” kind of guy in the Cameron mould.

[Michael Shanks]

You were once!

[Andrew Bowie]

Well, that was a long time ago. Although I do not agree with all those arguments for not accepting the amendment, I will not press it to a vote. We will explore those points more deeply, however, on Report. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Andrew Bowie]

I beg to move amendment 21, in clause 6, page 3, line 38, at end insert—

“(1A) (a) The Secretary of State must give a specific direction to Great British Energy that it must report to the Secretary of State on—

(i) Great British Energy’s in-year rate of return on investment, and

(ii) a forecast of the following year’s expected rate of return on investment.

(b) A report under paragraph (a) must be made within two years of the date of Royal Assent to this Act and annually thereafter.

(c) The Secretary of State must lay a report made under paragraph (a) before Parliament.”

Amendment 21 would require Great British Energy to provide an annual report to Parliament on its annual rate of return and investment, and a projection for the following year’s expected rate of return on investment. We heard from the Minister that every project will see a return—we heard it on the Floor of the House—and, as discussed under amendments 11 and 12, GB Energy will drive household bills down by £300. In line with that, it would be useful to include in the legislation a direction for GB Energy to report to the Secretary of State on its in-year rate of return on investments, and a forecast of the following year’s expected rate of return on investment.

We heard assurances from the Government that GB Energy will return lower bills for households, and indeed, as I said, that every project will see a return. As it is a company that intends to invest in and de-risk projects in rising new clean energy technologies, it would be useful to see the return on investment from those projects—statutorily, in the Bill. I imagine that the Minister will have no issue in accepting this amendment, given his confidence in the financial success of GB Energy, and indeed his confidence that every project will generate a return.

[Michael Shanks]

I thank the hon. Gentleman for succinctly introducing his amendment; I will be succinct in my response. In debates about previous amendments, I made the points—I will not repeat them—that we should not add unnecessary burdens to the Bill or use the power in clause 6 for different purposes. I know he takes that argument seriously. Amendment 21 significantly widens clause 6 from its intention, which is why we will not support it.

I reiterate, however, that Great British Energy will operate not through some extra-legal mechanism, but in the exact same way as every other company in the UK, and will be responsible in the usual way, under the Companies Act 2006, for the presentation of its accounts. In addition to filing those accounts, financial information, annual reports and so on with Companies House, they will of course be laid before Parliament, and I will personally make sure that the hon. Gentleman receives a copy the moment that it is printed—he can hold me to that—so that, quite rightly, he can scrutinise them.

It is important to say that the day-to-day financial management of the company will be in line with Government regulations. The point of setting up Great British Energy as an independent company is that it will have an expert fiduciary board that will scrutinise the accounts in the usual manner. For those reasons, we do not think that amendment 21 is necessary.

[Andrew Bowie]

While not accepting all of the Minister’s arguments, I look forward to him personally presenting me with the financial returns. I will not press amendment 21 to a vote, but we will obviously explore the issues in more detail when the Bill returns to the Floor of the House. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Andrew Bowie]

I beg to move amendment 22, in clause 6, page 3, line 38, at end insert—

“(1A) The Secretary of State must give a specific direction to Great British Energy that it must take all reasonable steps to satisfy itself at the time of any investment in renewable energy infrastructure that connection to the National Grid will be made in time for energy produced from the relevant investment asset coming onstream.”

Amendment 22 would require Great British Energy to take all reasonable steps to ensure that access to the national grid is ready for any energy infrastructure invested in by Great British Energy. The great grid upgrade is, without a doubt, a necessary component of our journey to net zero by 2050. Currently, new energy infrastructure such as wind turbines and solar farms—the clean energy-generating technology that we need to invest in in this country—has a significant wait time for grid connection, as do many other projects.

That is why, when in government, we commissioned the Nick Winser review to set out recommendations on how to reduce that timeframe. We accepted every single one of the recommendations and the advice on all 43 areas to ensure that the continued work to drive down connection times was accelerated. Despite the work we initiated in government by accepting those recommendations, the timeframe for obtaining grid connections for new projects can be as long as 10 years, so a project without grid connectivity will potentially not come online until the mid-2030s—well beyond the new Government.

[Ms Polly Billington (East Thanet) (Lab)]

It is a pleasure to serve under your chairship, Dr Huq. I am staggered that the hon. Gentleman is talking about the national grid as though the previous Government—his Government —had not been in power for the last 14 years and did nothing to transform the national grid to support the renewable energy that is essential for the country’s prosperity. All the failures in the national grid system, and all that backlog, are because of the failure to grip the problems with the national grid that happened on his Government’s watch.

[Andrew Bowie]

I thank the hon. Lady for her intervention, but I think she is being slightly unfair. When I was Networks Minister, we commissioned and accepted every one of Nick Winser’s recommendations on how we could speed up connection times, improve the national grid, build new infrastructure and ensure that the queueing system was brought into a much better shape than we found it in when we came into office in 2010—

[Stephen Flynn]

Why did you step down?

[The Chair]

Order. Will you stop chuntering from a sedentary position?

[Andrew Bowie]

However, I accept that more work can be done.

[Stephen Flynn]

In fairness to Committee members who may not have been here, perhaps the shadow Minister will remind us why he chose to step down as the Minister with responsibility for the grid.

[Andrew Bowie]

When I was moved to the position of Renewables Minister, it was impossible for me to carry on also being the Networks Minister. It is clear what the right hon. Gentleman is driving at: namely, the situation in the country today, where many communities feel under siege because they are hosting this new energy infrastructure—[Interruption.] The Minister laughs at the words “under siege”, but they do feel that.

Communities in this country face the prospect of new pylons, new energy infrastructure, new substations and battery storage facilities being built in the countryside. That industrialisation of the countryside is the reason that we proposed a review to investigate the costs of other technology that would not be so invasive of their communities, their landscape and the land in which they live and work. That is why we did that, and that is what I was about to speak about, but the right hon. Gentleman provoked me into coming to it earlier than I had planned.

We need to get this right. We need to take the country with us and have a discussion with the country about consent and consultation. It is about doing things not to communities but with and for communities.

[Torcuil Crichton]

The hon. Gentleman has almost made my point for me. Through GB Energy, communities will have a share and an investment. We will all share in the wealth of wind and in the grid connections that will come through this company.

[Andrew Bowie]

I am delighted to hear that the hon. Gentleman has such confidence in GB Energy’s ability to be the problem-solving fix-all. I have my concerns that that will not be the case and that the many issues we face—from grid connectivity to the targets that we in government set and the building of new infrastructure—will not be resolved by the creation of this company, given that the capital expended to it is so low in comparison with other state energy companies.

[Torcuil Crichton]

I agree with the hon. Gentleman that none of that will happen without the involvement, commitment, backing and consent of communities. Through GB Energy, that is what we will achieve.

[Andrew Bowie]

I thank the hon. Gentleman for his intervention. We must agree to disagree on this point. Of course, we want to see this effort succeed; we just have our doubts that it will.

Future renewable energy projects face huge connectivity challenges that the Government must be prepared for, but as I said, there is another equally significant challenge: the one facing communities. In my constituency, communities are expected to host hundreds of kilometres of new large pylon infrastructure, but the burden for new infrastructure falls particularly heavily on north-east Scotland, the north of England and East Anglia.

My key points are about the need to gain consent from communities, to reduce the burden where possible, and to have community benefits. We need to bring communities with us; there needs to be a conversation. If we are ever going to get to net zero, we need to stop alienating the communities hosting this infrastructure on behalf of the nation by imposing, rather than seeking, consent.

--- Later in debate ---

[The Chair]

Order. The Clerk is reminding me that interventions should be brief—I remember being told that myself when I sat on a Public Bill Committee at exactly the same point in 2015.

[Andrew Bowie]

Thank you, Dr Huq. When the hon. Member for East Thanet has a spare moment or is struggling to sleep at night, I advise her to go back and review the Hansard of our contributions to the Energy Bill Committee in the last Parliament, during which we debated such points at length.

[Michael Shanks]

Inspirational!

[Andrew Bowie]

It was inspirational. The Minister is absolutely right; they were inspirational speeches. Indeed, we talked about those issues at great length. When in government, I was proud to launch a consultation on community benefits, for example, which has still not been implemented. Although it is outside the scope of our discussion, it would be interesting to get an update from the Government on when they will bring forward the community benefits package and if any changes will be made to the package unveiled by us last November.

I return to the discussion on consultation and consent. In an attempt to reduce the burden on communities, we pledged to have a review into the presumption for overhead lines and to examine all other options that would be cost-comparable so as not to inflict that huge burden on communities.

[Stephen Flynn]

I am listening closely to the shadow Minister, and I am a little confused. On the one hand, he seems to be in favour of making sure that the grid capacity is there; on the other hand, he seems to be sticking up barriers to that grid capacity coming on stream and using terms like “reviews” and “consultations” that have no appropriate timescale attributed to them. What does he want to happen?

[Andrew Bowie]

Both can be achieved. Of course we need to improve the national grid and grid connectivity times. When I was in a ministerial position, not a day went past when a colleague did not come up to me on behalf of an individual, company or organisation that had been given grid connectivity times of seven, eight, nine or 10 years, and sometimes even more. That is an impossible place for the country to be in. It is preventing inward investment and holding back the economy, so we need to improve the national grid, review the queuing system and improve connectivity times, but we need to do it in a way that brings the country with us and does not inflict misery on the communities that are being asked to host this huge infrastructure on behalf of the rest of the nation. That is why we need to get it right and examine all the available options. We need to examine whether undergrounding or offshoring could be cost-comparable or preferable to overhead lines when we move forward.

[Stephen Flynn]

The shadow Minister is being generous with his time, as always. What sort of timeframe would he associate with that level of engagement going forward? He seems to lack certainty on what that new technology would be. Can he advise us of the cost savings that would go to the consumer from these new technologies, which I am not aware of and do not think that any Member in this room is aware of?

[Andrew Bowie]

It is precisely because we do not have all the answers that we commissioned that review in the very last days of the last Parliament, which we committed to in our manifesto and which sadly has been abandoned by the Labour Government.

It should be incumbent on Great British Energy to take into account the challenges that we all acknowledge we face to ensure that the investments that it undertakes give the best value for money on behalf of British taxpayers, whose money is invested in the funds for the company. It should also ensure that each project has grid connectivity available at the right time so that it is a worthwhile investment and returns can be realised as soon as possible from each investment.

[Michael Shanks]

I have to say that of all the amendments before the Committee, I find this one utterly extraordinary. The shadow Minister’s amendment says that Great British Energy

“must take all reasonable steps to satisfy itself at the time of any investment in…infrastructure that connection to the National Grid will be made in time for energy produced from the relevant investment asset coming onstream.”

The recognition, after 14 years, that dealing with the issues with connections to the national grid should somehow be important is extraordinary. For the hon. Gentleman to wake up this morning, just a few months after leaving government, and decide that fixing this problem is a massive priority is quite something.

I am genuinely concerned by some of the language that we have heard today. The shadow Minister spoke, quite rightly, about Cameronian support for the climate. I wonder whether the Conservative party, after such a short time, ever takes a look at itself and wonders whether the rhetoric that it uses about the mechanisms we are going to use to tackle the climate crisis is in the right place. I know we have some net zero sceptics in the running to lead the party, but it is quite extraordinary to say in one breath that there are huge connectivity challenges for the country and that communities are “under siege”.

--- Later in debate ---

[Michael Shanks]

My hon. Friend never misses an opportunity to mention Cornwall, but let us not relitigate our earlier argument.

There are huge opportunities. The hon. Member for Gordon and Buchan made the important point that there are certain parts of the country, particularly in the north of Scotland, where for obvious reasons there are a number of wind projects, and we need to look at the infrastructure that comes with that. We want to ensure we build the nationally important infrastructure to deal with the connections issue that the shadow Minister rightly raises, but we also need to recognise the need for cohesion in planning to make sure that there are not some of the issues that we have seen in other parts of the UK, where a number of projects have come on stream over time rather than being planned coherently.

Finally, on community involvement, the point about consent in dealings with communities is important. We want to take some of the previous Government’s work on consulting on community benefits—we will say more on this in the coming months—to make sure that there is genuine community benefit in hosting not just energy generation infrastructure, but network infrastructure, which will be critical. Nothing that we have said runs roughshod over the planning and consenting process, which will remain for communities.

[Andrew Bowie]

The Minister is being typically generous with his time. He says that nothing will ride roughshod over the planning and consent regime and allowing communities to have their say. Am I to take it from that that there are no plans afoot to resolve the Scottish planning and consenting issues that remain as a result of its being governed by the Electricity Act 1989 while the rest of the United Kingdom is governed by the Planning Act 2008 on electricity, which means that the automatic right to public inquiry remains in Scotland? Is the Minister assuring the Committee and me that that right will remain and that he has no plans to resolve that issue?

[Michael Shanks]

The question of balance, which I was just about to come to, is important. The right to a public inquiry can be triggered by a much smaller number of people in Scotland than in the rest of the UK, so there have been real issues: communities do not generally have a view, so individuals or campaign organisations trigger public inquiries. We are looking at the consenting regime, as I think the hon. Gentleman’s Government was, to bring balance to this.

Balance is key. The Government, from the Prime Minister down, have been clear that we will need to build this infrastructure, which is nationally important for all the reasons that the shadow Minister set out. That is why the amendment is so extraordinary. The shadow Minister said that we need to tackle the huge connectivity challenge—I wrote that down—and the Bill is the mechanism for doing that. Balance is key: my hon. Friend the Member for Na h-Eileanan an Iar made it clear that we want communities to benefit from having a stake in what Great British Energy will deliver, but it is important that we get on with building this infrastructure. For those reasons, we will not support the amendment.

[Andrew Bowie]

Right hon. and hon. Members have made some disparaging comments about the Conservative legacy on our climate, but I remind them that we halved our carbon emissions faster than any other G7 nation, built the first floating offshore wind farms in the world, ended coal for power generation and led the world in so many other ways, including developing new technologies and delivering the very successful COP26 conference in Glasgow. It is because our views on this are so aligned that I think the amendment would sit well within the Bill.

[Josh MacAlister (Whitehaven and Workington) (Lab)]

I think the shadow Minister is a secret supporter of the Bill, not a true believer in his amendment. In an interview that he gave to Politico earlier this month, he said that there were “mistakes” in the roll-out of mini-nuclear reactors, because it was a slow process, and he called the infrastructure delays facing the UK “absurd”. I think he knows that the Bill will help to speed those things up and that his false dichotomy between the Government and communities will not really pose a risk to projects.

[Andrew Bowie]

It is a matter of public record that I think we should have gone faster on small modular reactors, and I hope that this Government pick up the pace. On the hon. Gentleman’s other point, my concern is that the creation of GB Energy will get in the way of delivering our objectives and shared goals and supporting new technologies. We oppose its creation because we think it will actually be a block on getting where we need to more quickly.

[Josh MacAlister]

You don’t!

[Andrew Bowie]

I do. That is why I would like to press the amendment to a vote.

Question put, That the amendment be made.

--- Later in debate ---

[Michael Shanks]

I am hoping that at some point someone will want to take part in a debate, to save the Committee from hearing only from me.

Clause 8 sets out the extent of the Bill, which is important, and its commencement. The Act will come into force immediately on its passing, reflecting the fact that setting it up has been one of the Government’s key priorities, which is why we commenced the process and introduced the Bill to the House within our first 100 days.

It is important to us that the Bill reach the full territorial extent of the United Kingdom and that it benefit citizens in England, Scotland, Wales and Northern Ireland. We have shared net zero targets across the whole UK. Clearly the devolved Administrations have different responsibilities for different aspects of energy policy—it is generally reserved, but in Northern Ireland it is transferred—so the role of Great British Energy will be slightly different in different parts of the UK, but it is important to say that the investments that Great British Energy makes can still drive deployment, create jobs, boost energy independence and ensure that taxpayers, bill payers and communities reap the benefits of clean, secure, home-grown energy across the UK.

I thank the devolved Administrations, who have engaged with me since my appointment as Minister on the Bill. We have had detailed and helpful conversations with my counterparts in all the devolved Governments across the UK. I thank them for how they have engaged in our discussions: they have been supportive of Great British Energy, recognising the benefits that it brings to all parts of the UK, while clearly advocating on behalf of their own Governments. It is important that we continue that. My commitment to them and to the Committee is that we will continue the process after the Bill passes to ensure that we have a company that delivers for all the people of this United Kingdom. I thank them for their constructive and collaborative approach. I commend the clause to the Committee.

Question put and agreed to.

Clause 8 accordingly ordered to stand part of the Bill.

New Clause 2

Review of effective delivery

“(1) The Secretary of State must appoint an independent person to carry out reviews of the effectiveness of Great British Energy in—

(a) delivering its objects under section 3,

(b) meeting its strategic priorities under section 5, and

(c) complying with any directions given under section 6.

(2) After each review, the independent person must—

(a) prepare a report of the review, and

(b) submit the report to the Secretary of State,

as soon as is reasonably practicable after the completion of the review.

(3) The independent person must submit to the Secretary of State—

(a) the first report under this section within the period of 12 months beginning on the day on which this Act comes into force, and

(b subsequent reports at intervals of no more than 12 months thereafter.

(4) On receiving the report, the Secretary of State must, as soon as is reasonably practicable in each case—

(a) publish the report,

(b) lay a copy of the report before Parliament, and

(c) prepare and lay before Parliament a response to the report’s findings.

(5) In this section, references to an ‘independent person’ are to a person who appears to the Secretary of State to be independent of—

(a) the Secretary of State, and

(b) Great British Energy.”—(Andrew Bowie.)

Brought up, and read the First time.

[Andrew Bowie]

I beg to move, That the clause be read a Second time.

The Secretary of State is establishing a new state-run body—for the record, that is something that I oppose—of which the energy sector has many. For example, we have the UK Infrastructure Bank, an organisation that has many similarities with Great British Energy. As with UKIB, the Bill aims to give statutory force to the company’s objectives. However, unlike the legislation for UKIB, the Bill does not endeavour to create statutory forms of transparency, accountability and governance for the firm, so it is concerning that the Great British Energy Bill gives the Secretary of State sole powers of direction. We cannot possibly think why that would appeal to the Secretary of State, so my new clause 2 would ensure a level of independence in the governance of Great British Energy.

The Minister said on Thursday that Great British Energy would be “operationally independent”, but it lacks specific, key components to ensure that. Indeed, it seems that a significant level of direction lies with the Secretary of State. I suggest to the Minister that accepting the new clause to introduce a requirement for an independent person to review the effectiveness of Great British Energy in delivering its objects would ensure its independence and transparency.

There is a precedent in the legislation on the UK Infrastructure Bank for the designation of an independent person to carry out reviews into the effectiveness of GB Energy. If that does not happen, we are concerned that any review of its effectiveness may be perceived externally as Great British Energy simply marking its own homework. If the UK Infrastructure Bank has appointed an independent person to conduct reviews of its effectiveness, why are the Government so reluctant to set out the same standards for Great British Energy?

[Michael Shanks]

I thank the shadow Minister for his attempt to add an additional clause to the Bill. I will speak briefly about why we do not support new clause 2, but I agree with him on the importance of ensuring that Great British Energy be accountable, transparent and clear about how it is delivering on its objectives. We absolutely want to see that as well.

We believe that the Bill is in a strong place at the moment. It will, of course, utilise all the mechanisms already in place for other companies, including publicly owned companies, through its annual reports and accounts. It will provide regular updates on its work, meeting its objectives and the stewardship of the public funds that it is given. It is important to recognise that the reports, accounts, other information and directions that have been given will be laid before Parliament and will therefore be readily available to hon. Members. In the same way as any other company operating in the UK, Great British Energy will undergo external audit of its accounts, providing a further level of assurance. It will be expected to publish its own strategic plan on how it will deliver its objectives, which will be laid before Parliament.

I do not think it proportionate to add another mechanism for an annual independent review. I note the shadow Minister’s point about the UK Infrastructure Bank, but the rhythm of independent review was that it would happen once the bank had been operating for seven years and would be repeated at intervals of no more than five years. I do not think the new clause proportionate to what was introduced in the UK Infrastructure Bank Act 2023.

In the light of what my hon. Friend the Member for Whitehaven and Workington described as the shadow Minister’s secret support for the Bill—he doth protest a little too much in saying that he opposes it—I would hate to suggest that the new clause was some kind of mechanism to stymie the action of Great British Energy. However, the frequent cadence that the shadow Minister proposes for the review would considerably interrupt the work of the company in actually delivering. It would be under almost continuous review, which does not seem proportionate or effective for a company that we aim to move in a nimble and speedy way to deliver for the British people. I would rather Great British Energy got on with delivering for the British people on its important mission to deliver projects to benefit all the United Kingdom. We will not support the new clause.

[Andrew Bowie]

I am disappointed that the Minister will not accept the new clause. We have some concerns about transparency and accountability, which we will explore further on Report. I will not push new clause 2 to a vote today—not least because I seem to have lost my Whip, but also because we wish to explore the issue on the Floor of the House. I beg to ask leave to withdraw the motion.

Clause, by leave, withdrawn.

New Clause 3

Directors: appointment and tenure

“Great British Energy must secure that its articles of association provide that—

(a) Great British Energy is to have at least five and no more than fourteen directors;

(b) the chair of Great British Energy’s board, Great British Energy’s chief executive officer and the non-executive directors are to be appointed by the Secretary of State;

(c) the Board is to appoint one or more directors to be responsible for ensuring that the Board considers the interests of the appropriate national authorities when making decisions;

(d) the period of a non-executive director’s appointment is not to exceed four years, or such shorter period as may be specified in the terms on which the director is appointed;

(e) a person may be appointed as a non-executive director no more than two times;

(f) a person ceases to be a non-executive director as soon as—

(i) the person ceases to be a director by virtue of any provision of the Companies Act 2006 or is prohibited from being a director by law,

(ii) the person becomes bankrupt (in relation to England and Wales and Northern Ireland) or the person’s estate has been sequestrated (in relation to Scotland),

(iii) a registered medical practitioner who is treating the person gives a written opinion to Great British Energy stating that the person has become physically or mentally incapable of acting as a director and is likely to remain so for more than three months, or the person has resigned as non-executive director in accordance with notification which the person has given to Great British Energy.”—(Andrew Bowie.)

Brought up, and read the First time.

[Andrew Bowie]

I beg to move, That the clause be read a Second time.

On governance, new clause 3 would require Great British Energy to appoint between five and 14 directors, alongside a chair of the board, a chief executive officer and non-executive directors. Like new clause 2, it would bring checks and balances to the governance of Great British Energy to ensure that the powers of direction do not rest too heavily on the Secretary of State. Like new clause 2, it has a precedent in legislation: section 7 of the UK Infrastructure Bank Act 2023 sets out precisely the same requirements for the appointment and tenure of its directors. I therefore commend new clause 3 to the Committee.

Before I sit down, Dr Huq, may I take the opportunity to thank you and Sir Roger for your chairship? I thank the Clerks, the Doorkeepers, the Minister for his time, and all right hon. and hon. Members for their attendance.

I also thank the officials in the Box. I had the distinct privilege of serving in the Department for just shy of two years. The Minister is very lucky to have such an able team of civil servants supporting him in his work; it was a genuine privilege to work alongside them. Although I do not think that Great British Energy will succeed in its objectives, I wish them the very best in endeavouring to set this company up.

[Michael Shanks]

I was going to end on an argument about why the Conservative party is in such a rut, but the hon. Gentleman has changed the tone completely. I feel lost with my political attacks, so I will move swiftly on to why new clause 3 is not necessary.

I will not detain the Committee long. The argument is clear that there are quite established governance arrangements in place for companies of this type, and it is not necessary for primary legislation to make provision on the detail of the board of directors. There are a number of very well-established governance documents that set the course for this. The UK corporate governance code published by the Financial Reporting Council sets out best practice, to which Great British Energy will conform.

The interim chair Juergen Maier, whom we met last week, is in place to start up the company. Recruitment is under way for other key posts, and the permanent chair and the non-executive directors will be recruited in due course. The governance code on public appointments will make it clear how those will be carried out; they will be regulated by the Commissioner for Public Appointments. Although I recognise the shadow Minister’s legitimate points about transparency and accountability, I think his new clause unnecessary.

Rather than giving my prepared remarks criticising the Conservatives’ position, let me gently say that I am grateful that in the three days on which the Committee has met, the shadow Minister has moved closer and closer to voting Aye. I am confident that by Report he will be in the right Lobby. I welcome that move.

I genuinely thank all hon. Members for serving on the Committee; it has been a pleasure. Dr Huq, I thank you and Sir Roger for your stewardship of the Committee, along with everyone who has been involved in delivering its sittings. I also thank all our witnesses who gave their time freely last Tuesday. It was quite a lengthy session, but they gave important evidence—not least because every single witness confirmed how important Great British Energy is to delivering our mission to move to clean power by 2030.

As it has been three months now that I have had the privilege of having this job, I will finish by echoing the shadow Minister’s points, which were heartfelt, genuine and absolutely right, about the exceptional skill and qualifications of civil servants in what was once the Department of Energy and Climate Change. A change of Government is a considerable thing for the civil service, but it has moved at pace, as the Government have. I give real credit to the civil servants who make things happen and who so often do not get the credit for their hard work. I thank them all, and I thank hon. Members for their consideration. I do not support new clause 3, but I thank everyone for their time today.

[Andrew Bowie]

I will not push new clause 3 to a vote. We will discuss the issue further on Report, but I will not detain the Committee any longer. I beg to ask leave to withdraw the motion.

Clause, by leave, withdrawn.

[The Chair]

Thank you, everyone, for your patience with me and Sir Roger in the first Bill Committee of this Parliament.

Bill to be reported, without amendment.

Great British Energy Bill

Andrew Bowie Excerpts

Report stage
Tuesday 29th October 2024 Commons Chamber

[Luke Murphy]

I welcome the opportunity to speak at the Report stage of the Great British Energy Bill. It is a pleasure to follow my hon. Friends the Members for Bolsover (Natalie Fleet) and for Erewash (Adam Thompson), who gave such eloquent and powerful maiden speeches earlier in the debate. It is also a pleasure to follow my hon. Friend the Member for East Thanet (Ms Billington), who showed such leadership on this issue prior to her being elected to this House. As well as commenting on the overall thrust of the Bill, I want to comment on new clause 1 and amendments 6, 8 and 5.

It is somewhat surprising and, indeed, interesting to hear Conservative Members calling for a review of the effective delivery of energy policy, for legislation to reduce energy bills by £300 and for the creation of jobs as a result, not least because a review of energy policy and the trajectory of bills and jobs created under the previous Government would reveal some stark facts. Every family and business in Britain paid the price of 14 years of Conservative failure through rocketing energy bills. Indeed, Britain faced a worse cost of living crisis than other countries, because the Tories left us exposed to international fossil fuel markets controlled by dictators such as Putin.

When I said in my intervention on the right hon. Member for East Surrey (Claire Coutinho), who has since vacated the Opposition Front Bench, that we were reliant on Putin, she responded that I did not understand energy markets. I am afraid that just shows that she does not understand energy markets, because the truth is that we are at the mercy of international markets of which Russia is a part. The previous Government did absolutely nothing to reduce our reliance on volatile fossil fuels, and as a result of their failure to invest in clean energy, they left us with a legacy of high energy bills, energy insecurity and a lack of clean energy jobs. With our plans for Great British Energy and clean power by 2030, the new Labour Government are determined to change that.

I am somewhat surprised by amendment 8, which calls for legislating the creation of 650,000 jobs, not least because we create these jobs not through legislation but by having a meaningful industrial strategy, which was lacking under the previous Government. Figures from the Institute for Public Policy Research—which, I must admit, is my former employer—show that around 4% of our GDP is made up of green goods and services compared with the European average of 6%. If we had had an industrial strategy and created jobs from offshore wind at the same rate as Denmark did from its offshore sector, we could have green goods and services making up 11.5% of the economy and we could have created 100,000 more jobs. So although I admire the chutzpah of Opposition Members calling for price reductions, and the creation of 650,000 jobs, through legislation, I welcome instead our approach of creating a publicly owned energy generation company—the first in 75 years.

[Andrew Bowie]

All we are asking through our amendments is for the Government to put on the face of the Bill what they promised the British people, in their manifesto and many election campaign commitments, that Great British Energy would achieve. Why will the hon. Gentleman not challenge his Ministers to put on the face of this Bill the very things on which he stood for election, such as the creation of 650,000 jobs and the reduction of bills by £300?

[Luke Murphy]

I have to say that, whoever is the winner of the Conservative party leadership contest, I am not sure legislating for the creation of 650,000 jobs is the direction in which they will be heading. I do not believe we can legislate our way to job creation; I believe that is done by introducing an industrial strategy, something that was so lacking in the last 14 years.