Great British Energy Bill

Baroness Hayman Excerpts

2nd reading
Monday 18th November 2024 Lords Chamber

[Baroness Hayman (CB)]

My Lords, I declare my interest as chair of Peers for the Planet. I thank the Minister for his interaction before this Second Reading debate and for the very clear and positive way in which he explained the Bill.

I look forward to both maiden speeches, and it is a particular pleasure for me to speak before the noble Baroness, Lady Beckett. We celebrated last month the fact that it is 50 years since we both entered the House of Commons, in 1974. She, of course, had a much longer career in the House of Commons—and a very prestigious one—than I did; I spent much more time in your Lordships’ House. It is an enormous pleasure to be reunited in the discussion of this important Bill.

I welcome the Bill and the opportunities that it presents in accelerating progress towards the Government’s clean power ambitions and delivering emissions reductions. The objectives the Government have set out for GBE are laudable, but it will be a large, complicated agenda, with a short runway to achieve it.

I do not share the gloom of the noble Baroness, Lady Bloomfield; I think that there are opportunities here. I certainly do not take the view that this is cost, cost, cost that we should not indulge in. We have all known, from the day that the noble Lord, Lord Stern, reported and from the reports that have gone through ever since, that the costs to this country and the costs to this world of not taking action on climate change are, in 10, 20 and 30 years, far higher than the costs of action.

I agree with the noble Baroness, Lady Bloomfield, that, as currently drafted, the Bill is very broad-brush—a skeleton without much flesh. It is clear that much will depend on the statement of strategic priorities and plans, which will be given by the Secretary of State under Clause 5. I hope that, as the Bill progresses through your Lordships’ House, we will be able to see the draft statement of strategic priorities. We need to have clarity here, as there will undoubtedly be some difficult decisions and difficult trade-offs to make as we progress.

In its 2024 progress report, the Climate Change Committee said that in order to make greater progress in decarbonising energy,

“British-based renewable energy is the cheapest and fastest way … The faster we get off fossil fuels, the more secure we become”.


It is really important that the projects that GB Energy participates in, facilitates or encourages—in the words of the Bill—are those which will be most effective in helping to deliver emissions reductions and the decarbonisation of energy.

At present, it is not clear how projects will be assessed and prioritised. Despite what the Minister said at the beginning, the accountability to Parliament that he suggested was there is, in fact, very thin indeed. It consists of the Secretary of State having a responsibility to publish the reports and accounts submitted to Companies House by GBE; frankly, I do not think that is good enough for such an important issue.

Apart from consulting with the devolved powers, which is welcome, there is no requirement for the Secretary of State to consult with any of our expert bodies, such as the CCC, the NESO or the wider energy sector in producing the statement of strategic priorities.

I have no doubt at all about the intentions of the Minister or the Secretary of State, but I gently ask them to reflect on how they would have approached a Bill as skeletal as this one when they were in Opposition. We need to set up GB Energy to be an organisation that is future-proof, robust and sustainable for the next 50 years, not just the next five.

On its funding, it is welcome that GB Energy is receiving £8.3 billion of government funding in this Parliament. However, the crucial question is how this will be split between the different objectives. There will need to be an assessment of what proportion should go to, for example, the reduction of greenhouse gas emissions or improvements in energy efficiency, and some clarity on how competing funding options will be prioritised as necessary. While £8.3 billion sounds like a lot of money—and it is—it can be very quickly spent, and there needs to be hard-headed discussions on how it should be spent. It would be helpful if, in his response, the Minister could say a little about how the Government plan to assess and prioritise projects to ensure that they benefit communities and offer best value for money for the taxpayer.

Energy UK has highlighted that it is important that GB Energy avoids conflicts of interest and market distortions by crowding in to areas where the private sector is already active. There is a real issue as to whether, if there are projects which can easily attract private sector funding, it would be appropriate for a government-owned company to compete. To ensure that it delivers additional emissions reductions, it will need to prioritise areas which are more nascent, need greater investment to scale up and will be less likely to happen without government partnership and support. Equally, it would be a real missed opportunity if a large proportion of the £8.3 billion were to find its way to fund projects already receiving significant public subsidy.

There are a few issues that are not mentioned in the Bill. We know that it is crucial we take the public along with us on the journey to net zero. One of the ways to do that is to give the public a real stake in progress. This is precisely what community energy projects do—or, I should say, could do, if there was a proportionate and fair playing field for them to operate in. I am sure that other noble Lords will raise these issues, which were debated at length during the passage of the Energy Bill 2023. I hope the Minister will be able to give some detail tonight about how GB Energy will be able to help remove the blockages that currently exist.

In his opening remarks, the Minister made it clear that the Government hope that GB Energy will bring in its wake new highly skilled jobs across the UK. Again, there is nothing in the Bill to explain how this will be implemented and how we can ensure that the skills of workers in our oil and gas industries are not lost, and that those workers are supported to transition to new green jobs, should they wish to do so. We also need to ensure that younger workers are being skilled-up to join the new green economy.

NESO’s advice to DESNZ highlighted the huge challenge ahead to achieve a clean power system by 2030 and concluded that this is possible with the right interventions, in a way that does not overheat supply chains and can offer

“Opportunities for local growth and good jobs”


and for

“positive impacts on nature, the environment and public health”.

Before I end, I will focus briefly on those positive impacts on nature. As the Minister knows, we are in a double-headed crisis. Climate change and biodiversity loss are two sides of the same coin: one exacerbates the other. In establishing a new company that will control substantial assets, there will be in many cases an opportunity for it not only to reduce emissions but to work to restore our native biodiversity and towards our mandated Environment Act targets—for example, by incorporating nature-based solutions and habitat restoration in the building of renewable infrastructure. Again, I am sure that is an issue which other noble Lords will wish to debate during the passage of the Bill.

The Bill and the creation of GB Energy offer real opportunity to move forward on the aspiration of achieving a zero-carbon grid, freeing us from the volatility and unpredictability of fossil fuel prices. I look forward to working with other noble Lords to ensure that, when we return the Bill to the Commons, it will establish an organisation that is effective, transparent and accountable, and equipped to take on the challenges it will undoubtedly face.

Great British Energy Bill

Baroness Hayman Excerpts

Committee stage
Tuesday 3rd December 2024 Lords Chamber

[Lord Wigley (PC)]

My Lords, I apologise for coming in late. I am here at the behest of the noble Baroness, Lady Finlay, who apologises to the Committee that she cannot be here to speak in support of Amendment 91, proposed by the noble Lord, Lord Alton. I very much support the points that he made.

The noble Baroness has asked me to make a brief contribution to the debate. I wholeheartedly agree with the points she has asked me to raise. These relate mainly to the importance of tidal power in both its devices, which we heard analysed a moment ago. Tidal range is one part of the possibility of creating tidal power; tidal stream is the other. Tidal stream has not yet been well developed and that could be something for the future, but tidal range most certainly has been. There is a predictability about it which gives it a tremendous advantage.

Tidal range devices use water height. The differential between high and low levels in the Severn, for example, is an enormously important factor. Using the same principles, there are locations suitable for lagoons as well—certainly around the coastline of Wales, in Swansea Bay and up around Anglesey. I understand that the Marine Energy Council recommends reaching a gigawatt of tidal stream capacity by 2035. This would be an enormous contribution.

The noble Lord, Lord Alton, spoke about the possibility that 7% of the UK’s electricity needs could come from the Severn Barrage. That would have the advantage of providing very important construction work, which could make a massive contribution to the south-east Wales economy. Given what has happened recently to the steelworks in Port Talbot, those jobs are very much needed. I hope that the Government will look seriously at this.

The case for this type of electricity generation is overwhelming. I hope the Government will give it the attention it deserves.

[Baroness Hayman (CB)]

My Lords, I rise very briefly, first to declare my interest and secondly to comment on some of the amendments in this group.

I have sat in the Minister’s chair, so I understand that he will not want to add a long list of exclusions or inclusions to the objects of the Bill. Even with that in mind, I hope that he will have listened carefully to the issues that have been raised. They are important and there is a theme to them.

I support the comments of the noble Baroness, Lady Boycott. Two issues have come out of the debate for me. The case for energy efficiency, insulation and heat pumps was made very powerfully by the noble Baroness, Lady Grender, and the noble Earl, Lord Russell. It is important that GB Energy looks to how it can provide a long-term, consistent environment for the policies that each Government pick up and put down. Industry, which has to be a key partner, finds this so frustrating and retrenches from investing in the skills training and expansion that are needed if we are effectively to retrofit the millions of homes in this country.

As we said in the debate on a Question earlier today, this is important not only for carbon reduction. We saw what happened from 2014: emissions from buildings fell by two-thirds after the change in policy. It is therefore really important that someone is boosting this and making sure that it is there for the long term to provide that stable environment. GBE will be in a position to do that, particularly if it is tied in with what we discussed in the Question earlier about the planning framework, again providing a clear and consistent road map for those who will need to invest in this.

The other thing that came out of the debate was that we have to be innovative, look to our strengths and be open-minded about sources of renewable energy. We have to understand that some of those sums that we had in our heads 20 years ago, about the cost of wave power, tidal power or whatever, have changed. They have changed financially but also in other dimensions, such as energy security and our priorities in energy. It is important that GBE is in there supporting those things.

I absolutely support Amendment 17. It may not be for the Bill but, as part of the innovative thinking we need from GBE, we need to look at such things as financial instruments. When we know that solar panels or heat pumps will pay off over the years but people are not going forward with them simply because they cannot afford the capital expenditure, it is important that we look not only at upping the government grant—helpful though that is in some instances. Houses can have mortgages on them for 10, 20 or 30 years. The costs of that investment can be spread in other and innovative ways, so I hope that the Minister can respond supportively to that amendment.

[Lord Offord of Garvel (Con)]

My Lords, I thank my noble friend Lord Naseby for introducing his thoughtful and technical amendments, which no doubt would improve the quality of the Bill should they pass. I also thank all noble Lords who have spoken on this group. Each amendment contributes meaningfully to the Bill’s ultimate aim by ensuring that governance reflects accountability, fairness and long-term sustainability.

I will limit my remarks to Amendments 8, 9, 12 and 13. Amendment 8 proposes the addition of “investing in” alongside “encouraging”. This is quite important, because it seeks a balance between fostering enterprise and ensuring strategic government investment to safeguard our national energy. We want a partnership between government and the private sector. By explicitly including “investing in”, the amendment aligns with our commitment to a dynamic and sustainable energy sector.

Amendment 9, by adding “one or more of”, would bring clarity and flexibility to the Government’s strategic objectives in advancing energy policies. It would ensure that the Government could prioritise specific energy initiatives based on strategic needs without being overburdened by one limiting obligation. It reflects the core principles of pragmatism and efficiency, ensuring that resources can be allocated where they can deliver the greatest impact.

We know that energy security and innovation in this area—referred to by my noble friend Lord Howell as bigger perhaps than the Industrial Revolution—require adaptability. Whether we are investing in offshore wind, nuclear power or emerging technologies, the amendment would allow for a tailored approach that maximised value for taxpayers’ money and strengthened our energy independence. I urge colleagues to support it to make sure that we have smart, effective and flexible governance in the Bill.

My noble friend Lord Naseby’s Amendment 12 is again quite technical. It seeks to insert the phrase “directly or indirectly” into Clause 3, which would again enhance the Bill by acknowledging the interconnected nature of emissions reductions and energy initiatives. This addition would ensure a pragmatic approach to addressing climate goals. Emissions reductions often involve complex supply chains and secondary impacts. Recognising these indirect contributions reflects our understanding of the broader economic and technological dynamics that drive innovation and decarbonisation. For example, investments in nuclear power or advanced grid infrastructure may not lower emissions immediately but they create the conditions for sustainable reductions in the long term, towards 2050 net zero. The amendment therefore provides the flexibility needed to pursue bold initiatives while holding true to the principle of cost-effectiveness for taxpayers. By adopting it, we would make the Bill more robust, practical and reflective of real-world energy systems. I urge my colleagues to support it.

Finally, my noble friend Lord Naseby’s Amendment 13 proposes the substitution of the word “produced” with “derived” in Clause 3. Again, this is a technical and seemingly small change, but it holds significant importance for our energy policy. “Derived” more accurately captures the diverse and evolving sources of energy in our transition to a low-carbon future. Energy comes increasingly from various integrated systems, including renewable sources, nuclear, tidal—as we have heard in great detail—and hydrogen. The term “produced” can be limiting, whereas “derived” acknowledges the broader, more dynamic approach needed to secure our energy future. The amendment provides the flexibility to encompass a wide range of energy sources and technologies, ensuring that our energy policies remain adaptable and forward thinking. It should reflect our commitment not only to reduce emissions but to foster innovation and maintain energy security in the face of global challenges.