Net Zero (Industry and Regulators Committee)

Baroness Donaghy Excerpts

Friday 20th January 2023 Lords Chamber

[Baroness Donaghy (Lab)]

My Lords, it is a pleasure to follow my fellow committee member the noble Lord, Lord Reay, and to thank the committee’s chair, my noble friend Lord Hollick, for his comprehensive introduction and his constructive and collegiate approach to our committee’s work. When you are planning something which has to happen in seven and 27 years’ time, and construction and operation take between five years, such as in the case of a battery factory, and 15 to 20 years for nuclear installations, that brings it home how urgent some of the decision-making is and how challenging those decisions are for any Government contemplating a general election within two years.

I will concentrate on our recommendation for a high-level task force to start the transformative changes needed, as already mentioned by the noble Lord, Lord Reay, what pump-priming, if any, the Government are prepared to support, and how the tension between the Treasury and BEIS can be solved. The Treasury focuses on new charges and revenue, whereas the Minister at BEIS has said that tax rises are not inevitable and that the priority is to bring people along with us.

First, a task force following the example of the vaccine task force is essential if there is to be any chance of reaching the net-zero target. A substantial majority of the witnesses who contributed to our inquiry were sceptical that the Government had in place the necessary strategic infrastructure. The Government’s disappointing response, saying

“Our current governance arrangements are effective”,


and then referring to the

“Government Priorities Delivery Committee (GPDC), chaired by the PM”,

just does not cut it. Will the Minister ask the Cabinet to think again?

Secondly, although it is apparent that there are plenty of willing investors around, there are some areas where the returns are not so obvious. The Government seem content to leave it to the private sector, with the honourable exception of some nuclear development which they have supported. It is important to create some strategic map to identify key areas of energy security or innovation where investors are not queuing up and where the state should intervene, at least in the short term—for instance, gas storage, interconnectivity, carbon capture, battery manufacturing and hydrogen, along with encouraging the development of the heat pump industry so that consumers have supportive infrastructure. At the moment, those costs need to be brought down.

This industry will not progress unless consumers are convinced that they will get servicing support, but housebuilders are not necessarily helping here. A relative of mine who bought a new-build house showed me an airing cupboard which was not an airing cupboard—it was full of machinery—and a garden shed which was not a garden shed but was the pump itself, taking up a considerable amount of garden space. How are the Government going about approving, if your Lordships will excuse the pun, these pump-priming projects?

Thirdly, what is the Government’s thinking on the use of government borrowing, as recommended in our report and referred to by my noble friend Lord Hollick, and the need to set out explicitly the distributional consequences for any funding proposals? The recent energy cost crisis revealed the limitation of consumer resilience.

Finally, applications for the 33rd UK offshore licensing round closed last week. Can the Minister indicate when announcements are likely to be made?