Great British Energy Bill Debate
Full Debate: Read Full DebateEarl Russell
Main Page: Earl Russell (Liberal Democrat - Excepted Hereditary)Department Debates - View all Earl Russell's debates with the Department for Energy Security & Net Zero
(2 days, 10 hours ago)
Lords ChamberMy Lords, I will speak briefly in support of my noble friend Lord Hamilton of Epsom on carbon accounting. He said that he does not know very much about oilseed rape, but I do. About 20 years ago, in some of the very earliest stages of emissions reduction, I was involved commercially in that.
My noble friend asked that we should have pilot plants and studies to see whether the energy balance of oilseed rape can be done, as if it has never been done before. I can tell your Lordships that pilot plants were set up on Teesside, at enormous expense, and analysed to death. Although this is not a debate on farming, I can say that, at normal yields, when all was said and done, after the ploughing, sowing, fertilising, spraying, harvesting, processing and transportation, you came ahead on a carbon basis only when or if you burned the straw that otherwise would have been left behind in the field. Of course, at low yields, you spent more carbon on growing it than you got back at the end.
I make no other comment save to say that my noble friend is correct that, often, superficially attractive green energy schemes, when you boil them down, cost more carbon than they yield. That is important to look at because, otherwise, we could sleepwalk into an enormous waste of public funds through GB Energy, chasing projects that do not hit the target—which, of course, is to allow us to be more sustainable in future.
My Lords, I will speak very briefly. If I may, I will call out the elephant in the room on this Bill. We have had 10 groups of amendments turned into 18 groups on this final day in Committee—over half of the groups that we are discussing today are the result of one party degrouping amendments. We have spent over two hours speaking to the first group of amendments, and we have 18 groups to speak to today. I have heard a lot of speeches, but in the case of many, I could not tell which amendment they were even speaking to.
I will say just this: we support the Government and the Bill. This is an extremely important Bill. I am pleased to see action taken on these measures after the Conservative Party failed to do anything about it, left bill payers vulnerable to the increase in bills as a result of the war in Ukraine and ended up spending £40 billion of taxpayers’ money subsidising bill payers for no long-term benefits. In this group, we are generally supportive of Amendments 61, 65, 69, 70 and 74. For groups that we feel were unnecessarily degrouped, we will probably not make comments.
My Lords, I am very grateful to the noble Earl, Lord Russell, because it seems to me that we have “enjoyed” what essentially has been a rerun of previous debates, with Second Reading-type speeches, when the key concern, as the noble Baroness, Lady Noakes, suggests, is Clause 6 and the power of direction.
So I do want to come back to the intent of Clause 6. First, we want GBE to be operationally independent. A founding principle of GBE is that it should be independent as far as possible in executing its functions. The Bill is focused on making the minimum necessary provisions to establish the company. At Second Reading, some noble Lords opposite accused the Government of drafting the Bill in a way that meant we would use Clause 6 to micromanage GBE. We have always maintained, as the noble Baroness, Lady Noakes, rightly pointed out, that this is a backstop provision, yet now noble Lords opposite seek to micromanage both the Government and GBE by these various amendments, most of the issues in which we have already debated.
Secondly, we have set up GBE as a company for long-term success and as an enduring institution. Some of the amendments, which include short-term targets, would be wholly inappropriate in legislation. Indeed, it would be more appropriate for the Secretary of State to set priorities via the statement of strategic priorities in Clause 5, of course within the framework of Clause 3.
My third point is the intended use of the power in Clause 6. Let me make it absolutely clear, as I have done in the past, that the power to give directions to GBE is intended only for urgent or unforeseen circumstances. These amendments would widen the intention unnecessarily. The noble Baroness, Lady Noakes, is right about the relationship between government and such organisations. She and I have both had experience in relation to the NHS; it is a slightly different set-up, but we are talking about the relationship between a government department, the Secretary of State and public bodies. She will know that there the Secretary of State has always had a power of direction, but I think it has had to be used only a handful of times. The reason of course is that chief execs of NHS bodies understand that the Secretary of State is able to set the overall direction of the National Health Service without having to call on what is essentially a backstop power.
My fourth point on a number of the amendments is that the existing reporting requirements are set out in the Bill, which makes provision for GBE to produce and publish an annual report and accounts. They will undergo external audit; they will contain information on the activity of the company over the year; and they will also include reporting in line with the recommendations of the Task Force on Climate-Related Financial Disclosures. GBE may also make information available through reporting, such as when projects or investments are announced. We think that that is sufficient accountability.
On some points raised by noble Lords on Amendment 59, we believe that in an unstable world, the only way to guarantee our energy security and protect bill payers permanently is to speed up the transition from fossil fuels to home-grown clean energy. This is consistent with advice from the Climate Change Committee and it is why we have set an ambitious target to reach clean power by 2030, which the independent NESO considers achievable. We believe that the key role of BGE is focused on driving forward deployment.
I say to the noble Viscount, Lord Trenchard, and the noble Lord, Lord Howell, that I agree with them on the importance of nuclear power. But I say to the noble Lord, Lord Howell, that this is the second time he has tried to divert the Government from supporting Sizewell C. I say to him that this is a massive development and we are moving to final investment decisions over the next few months. It will produce 3.2 gigawatts, it is a replica of Hinkley Point C, 80% above ground, and we have the regulated asset-based approach which will bring in private sector expertise and disciplines. So, in agreeing with him on the importance of small modular reactors and advanced nuclear reactors, we should not underestimate the potential of Sizewell C—and indeed Hinkley Point C when it comes on line, I hope at the end of this decade.
Of course I take the points that data centres will need a lot of electricity, that grid capacity issues are vital and that we need more investment in the grid. I also take the point made by the noble Lord, Lord Berkeley of Knighton, about the beauty, or not, of pylons. I of course accept the point he makes, but we are going to have to have more pylons. None the less, they will have to go through vigorous planning and meet environmental protection requirements.
On jobs and Amendment 60, GBE aims to revitalise the UK’s industrial areas and we think that, by situating its headquarters in Aberdeenshire—which I am sure the noble Lord, Lord Bruce, will welcome—it will be able to leverage the skilled workforce available there and throughout Scotland. More broadly, we have set up the Office for Clean Energy Jobs to promote clean energy employment and focus on skills development and training in the core energy and net-zero sectors.
Amendments 61 and 76 concern supply chains, which are of course very important indeed. GBE’s founding statement has already made it clear that my department expects the company to prioritise the development of supply chains and to report to government on progress. To come to the noble Lord, Lord Alton, of course we have debated these matters over the years and I absolutely understand where he is coming from. But it will be for GBE as an operationally independent company to determine the projects and technologies it chooses to invest in, in accordance with its objectives. It will be expected to respect human rights under the Human Rights Act 1998 and it will be subject to the provisions on forced labour and supply chains, both under the Modern Slavery Act 2015 and the Procurement Act 2023.
We recently set out our Clean Power 2030 Action Plan, which requires significant deployment of solar electricity—noble Lords are right on that. Developing sustainable, diverse and resilient solar supply chains, free from forced labour, is important for the Government. As the noble Lord, Lord Alton, knows, we also have the Solar Taskforce, which will be looking at these matters.
On Amendment 63 on the cost of fulfilling the company’s strategic objectives, I can assure the noble Lord, Lord Petitgas, that the Secretary of State will set ambitious but achievable objectives for Great British Energy that can be achieved through the funding envelope. GBE will be backed, as noble Lords will know, by a capitalisation of £8.3 billion over this Parliament, and its objective is to crowd in additional private sector investment. However, it will be subject to HM Treasury’s value-for-money guidelines and, like existing publicly financed institutions, its investments will be subject to safeguards and risk assessments.
On Amendments 69, 70 and 85A, on the impact on carbon emissions of GBE’s investments, the company is committed to advancing the deployment of clean energy to aid the Government’s goal of decarbonising our electricity system by 2030. The amendments would require a report to be produced for every investment made by Great British Energy, which seems neither proportionate nor effective. On importing energy into the UK, we acknowledge that reliance on imported fossil fuels presents economic and security risks, as evidenced by the situation following the Russian invasion of Ukraine. The best response is to increase domestic power generation through renewable energy sources and nuclear power, while simultaneously transitioning to more sustainable methods for heating homes, fuelling vehicles and powering industry. These can substantially mitigate our exposure to volatile international markets and energy price fluctuations. We see GBE as being at the heart of those efforts.
My Lords, I rise to open this group of amendments, all on consultation and oversight, and to move my Amendment 66 in this group. Amendment 66 seeks to prevent the Secretary of State from directing GB Energy unless they have previously delivered an Oral Statement to both Houses of Parliament. Our view is that this is a reasonable check and balance on the use of these powers. My amendment does not stop the Secretary of State from giving strategic directions; it simply requires that, before doing so, the Secretary of State must have previously given this Oral Statement to both Houses.
We recognise that, for the Government, this is a reserve power that would be used only in emergencies. We also recognise that the Bill as written requires the Secretary of State to have previously consulted with GB Energy and any other persons the Secretary of State considers appropriate, and that the directions must be laid before Parliament. Our concern is that these are both very powerful controls given to the Secretary of State and, even with the condition to lay the direction before Parliament, that is done only after the direction is given. There is no opportunity for Parliament to discuss in any form the direction given or the reasons for it, or to have any opportunity to amend it before the direction is given to GB Energy. Parliament also has no say or chance to contribute to the form the direction should take. There is no way that Parliament can change the shape of it or amend it. These powers are absolute: GB Energy is directed in statute that it must comply with the directions given under this part of the Bill.
I draw the Committee’s attention to the fourth report of the 2024-25 Session of the House of Lords Constitution Committee, published on 28 November, which says of these provisions that,
“we are concerned that clauses 5 and 6 amount to ‘disguised legislation’. … This is of constitutional concern because there is no parliamentary oversight over the making of the statement of strategic priorities or the directions to Great British Energy”.
I must admit that I have to agree with that assessment. Our view is that, if there is a level of need such that directions from the Secretary of State are required, then there is also a level of concern such that a Statement should be provided to both Houses of Parliament.
When matters have gone this badly wrong, it is also important that Parliament should be given the opportunity to scrutinise what went wrong and why and what proposals the Secretary of State is bringing to make them right again. It is important that Parliament is given the right to look at how the new plans might work in practice and to be able to advise and raise objections with and suggest improvements to the Secretary of State. The Minister may come back on this amendment and may speak of this being a reserve power. He may say that these will be used rarely, if they are ever used at all; but when they will be needed, they will be needed urgently. The Minister may also argue that the Secretary of State would have previously consulted with GB Energy and others as the Secretary of State saw fit. This is all correct, but consultation in private could amount to no more than delivering the unhappiness on behalf of the Government and instructing the direction to GB Energy. These meetings happen in private, and Parliament is not privy to any of this information or the outcomes.
The Minister may also argue that these powers have been used in—and, indeed, directly copied from—the nuclear energy Bill. To that, I might kindly argue that nuclear accidents and nuclear emergencies are of a different order of magnitude to our renewable sector, although I do recognise the need for urgency when it comes to our energy supply and energy security. I also recognise that GB Energy will have a role in the nuclear sector—although that is to be strictly defined as yet—and, if the Minister wishes, a government amendment to my amendment could call for an exemption for either a nuclear accident or a national energy security emergency. I would be interested in the Minister’s response to my amendment, and I would be happy to discuss this with the Minister prior to Report.
For all other cases, my view is that an urgent Statement can be tabled in both Houses in a matter of mere days, and this can run concurrently while the Minister fulfils his other obligations in respect of consulting with GB Energy and others. Our view is that this is a carefully crafted amendment which seeks to balance the need to address emergency issues against the need for proper and full parliamentary scrutiny to take place. These may be reserve powers, but they are absolute powers, and they are under the sole control of the Secretary of State. They are enacted after consultations and are merely reported to Parliament after they have been enacted.
I ask the Government to think carefully. I know that they might feel that these powers are safe in their hands, but how would the Minister feel if, for example, Labour were to lose the next general election and these powers were in the hands of another Administration? I think it is in that light that the Government should reflect on whether there is a need for a further check and balance on these powers.
Turning to the other amendments in this group, Amendment 87, in the names of the noble Baroness, Lady McIntosh of Pickering, and the noble Viscount, Lord Trenchard, goes further than my amendment. It says:
“A Minister must table a motion for resolution in each House of Parliament on any directions given to Great British Energy under this section before the directions are adopted”.
I am generally supportive of this amendment, but I have two concerns about it. First, holding a vote will take more time. Secondly, if Parliament, for whatever reason, decided not to approve the directions, I wonder what the consequence would be, because these directions are only given in emergency situations. That is an unlikely consequence, but I do not necessarily agree that having a vote actually helps in this case. What I am interested in is parliamentary scrutiny and conversation, not Parliament having the right to have a vote on this issue.
Finally, Amendment 86, in the name of the noble Lord, Lord Cameron of Dillington, amends Clause 6 by adding that consultation should take place with the National Energy System Operator, the Climate Change Committee and the Gas and Electricity Markets Authority. This amendment is helpful, but to my mind it does not resolve the issue; the issue is one of parliamentary scrutiny, and Amendment 86 does not provide further parliamentary scrutiny. The heart of this, for me, is simply having greater opportunities for parliamentary scrutiny while not delaying emergency actions. That is what I am trying to balance. I beg to move.
My Lords, Amendment 86 in my name is, as noble Lords will realise, very similar to Amendment 56 in the name of the noble Baroness, Lady Hayman, which was spoken to last month by the noble Lord, Lord Ravensdale. The point is that we all have concerns about the overwhelming statutory powers of the Secretary of State to control, and give random formal directions to, GBE. As I said at Second Reading, we are worried that modern politicians are no longer likely to have had experience of running a business, particularly an investment business, which is what this is. On the whole, the same applies to civil servants who might be advising the Secretary of State. They also usually have little experience of the nitty-gritty of day-to-day private sector business and its associated hour-by-hour assessment of risk and, more to the point, when to take that risk. In other words, you cannot always be totally safety conscious.
Probably the key person with whom the Secretary of State should be consulting is a private sector investment analyst, or even a team of private sector investment analysts, as the noble Lord, Lord Petitgas, was saying early on in the previous discussions. That might be hard to spell out on the face of the Bill, so I will leave that one hanging. As noble Lords can sense, however, I am not at all happy that a politics-orientated—maybe even a party- politics-orientated—Secretary of State of either party should be able to give any direction at all on the issue of practical investment to a hopefully business-orientated board of GBE. I support Amendment 68 in the name of the noble Earl, Lord Russell.
The next thing to say is that Clause 6(3)(b) is superfluous. It states that the Secretary of State should consult
“such other persons as the Secretary of State considers appropriate”.
It is legally meaningless. The Secretary of State could take it or leave it. If he consults with no one, he can claim he did not consider anyone appropriate, so he is under no obligation to consult anyone, apart from Great British Energy, as it stands in Clause 6(3)(a). We therefore need some more specific recommendations.
It is of course right that the Secretary of State should have to consult GBE—after all, it will implement whatever direction he or she gives it—but the Secretary of State should also consult NESO. After all, it is responsible for driving the delivery of our power through the national grid and other transmission companies—we discussed this on another group—so, clearly, it needs to be consulted.
Then there is the Climate Change Committee, which is in very close touch with the state of play of the progress to net zero. It is also in touch with the latest science and knows the priorities of what is most needed to get us to net zero. It will have a view on what could or should be the essential focus of GBE, so it should also be consulted.
Then of course there is Ofgem, which represents the consumers and is their voice, so it seems only right that it should also be consulted on any formal direction from the Secretary of State to GBE. There may be others, and I take the point from the noble Earl, Lord Russell, about the fact that my list is of consultants, rather than Parliament, which might be able to influence the direction of the Secretary of State in a more formal way—although I hope that a consultation exercise would also influence his decision-making process.
In his response to Amendment 56 last month, the Minister seemed to say that the amendment was unnecessary because the Secretary of State would be in permanent consultation with all the organisations involved anyway, but he was at that time talking about the consultation on the strategic priorities in Clause 5 and here we are talking about later specific directions given by the Secretary of State to GBE. After all, the Government themselves put Clause 6(3) in the Bill, so they must have thought that highlighting the importance of consultation, and whom it is with, was important and necessary. In my view, they did not make it specific enough, or possibly wide enough, so I hope they can accept that they should enlarge their constituency of consultees.
My Lords, I now turn, as you would expect, to Amendments 66, 86, 86A and 87, tabled by the noble Earl, Lord Russell, the noble Lord, Lord Cameron, the noble Baroness, Lady McIntosh, and the noble Viscount, Lord Trenchard. As I have said, and as my noble friend has said previously, Clause 6 sets out that the Secretary of State will be able to give directions to Great British Energy, and that Great British Energy must comply with those directions.
As Great British Energy will be operationally independent, the intention is that the power will be used only when it is really needed. This will ensure that GBE has the space it requires to fulfil its role and deliver its strategic priorities. I draw the House’s attention to the comments made by the noble Baroness, Lady Noakes, in this context.
The purpose of the clause is to ensure that there is a mechanism in place should any urgent or unforeseen circumstances arise. For example, it could be used if the Secretary of State considers that they need to give GBE a direction that is in the interest of national security or otherwise in the public interest. The amendments before us would risk delaying the Secretary of State’s ability to give Great British Energy that direction, potentially compromising national security under certain circumstances.
The noble Earl, Lord Russell, raised the perfectly reasonable points of accountability and scrutiny. I am not impugning his motives—or the motives of anybody else who has tabled amendments—but if there was an issue of national security that perhaps took place at the start of a recess, it would seriously hamper the Secretary of State’s ability to act.
The noble Earl also raised, interestingly, the possibility of Labour losing the next election. It may come as a shock, but we are not actually planning to lose the next election. However, the mechanism of accountability and the decisions of this Government and future Governments are subject to the views of voters. That is part of the democratic process. We might not like a future Government exercising the directions we have put on the statute book, but that probably applies to past Governments as well. It is part of the democratic process and the process of accountability and scrutiny.
The amendment in the name of the noble Baroness, Lady McIntosh, would take this point further by requiring the resolution of each House, which I genuinely do not think is practicable. However, to ensure transparency and accountability, any directions given to Great British Energy will be published and laid before Parliament before they are given.
Further, Clause 6 requires that the Secretary of State must consult GBE and other persons considered appropriate, before giving directions to GBE. This means that GBE’s management and its board—yet to be appointed—will have the opportunity to express any reservations they have about the direction to Ministers before any such direction is made. If appropriate, this could include the National Energy System Operator, the Climate Change Committee—which has been consulted by successive Governments—the Gas and Electricity Markets Authority, Great British Nuclear and the National Wealth Fund, as well as groups not referenced in Amendment 86.
The noble Lord, Lord Cameron, mentioned at least two of the organisations on that list; he mentioned others too, as I think did the noble Viscount, Lord Trenchard. We could end up with a list as long as your arm of bodies that have to be consulted, which would seriously hamper the Secretary of State’s room for manoeuvre.
Finally, it is not unusual for a Secretary of State to be able to direct an arm’s-length body and such powers are found in several pieces of legislation—again referenced by the noble Baroness, Lady Noakes. In the specific context of government-owned companies, such powers are, for example, included in the Energy Act 2023, which created Great British Nuclear, where named stakeholders are also not included in the directions clause.
For these reasons, I hope the noble Earl recognises that adding this detail would not be beneficial and will withdraw his amendment.
In my speech, I recognised the needs of national emergencies or an energy emergency. One of the options I offered the Government was to allow them to amend my amendment to exempt those situations from the need to give an Oral Statement. Will the Minister respond to that specific point, please?
The noble Earl makes a fair comment. However, what he is putting forward is far too prescriptive. There are plenty of precedents for Secretaries of State being able to operate in this way.
I am starting to sound like the secretary of the Baroness Noakes fan club, but the noble Baroness, Lady Noakes, pointed out that there is the ability to summon the Secretary of State before a Select Committee. There are various Select Committees which have the ability to summon Secretaries of State after the fact. Ministers of all Governments might not be that keen on appearing before Select Committees, but they do not have a lot of choice in the matter. In the vast majority of cases when they are summoned, they appear before the Select Committee and give an account of their actions.
I thank the Minister for responding, and I thank everybody who spoke in the debate: the noble Lord, Lord Cameron of Dillington, the noble Viscount, Lord Trenchard, and the noble Baroness, Lady McIntosh of Pickering.
These are important issues; they are absolute powers. I recognise the point made by the noble Baroness, Lady Noakes, that there are other ways of summoning Ministers and that the whole idea of ministerial accountability is that Parliament afterwards can question Ministers. I think that is a bit of a second-tier kind of accountability, but I recognise that there may be situations where the Government need to act with urgency and even the act of giving a Statement could impede the Government from doing that, whether it relates to nuclear energy, energy security or foreign interference in our energy security. I did, therefore, offer the Government the possibility of amending my amendment.
It is important that we have discussed these issues. They are important powers, and it is important we debate them. I do not think we found an answer or a way forward, but the debate itself has been interesting. I thank the Government.
My Lords, I will speak very briefly to respond to the amendments in the name of the noble Lord, Lord Fuller. We congratulate him on moving his first amendment—indeed, he got his own group of amendments together, which is to be welcomed. I am afraid that, on these Benches, we cannot support what he is doing; this is just not the right Bill to do it. Even if his amendments were successful, all they would do is limit the powers of Great British Energy to do this stuff; they do not limit any other organisation or body from doing it.
It is very important that the Government come forward with the land use framework as quickly as possible—these are important issues. My understanding is that that Bill should come through in April or around then. These are complicated issues; we are a small island and there is lots of competition on our land use.
Labour also promised us a rooftop solar revolution. We strongly support that and encourage the Government to continue to work on its delivery. France, for example, gets 5% of its electricity from solar panels on car parks. I would like to see this Government replicating that. We have heard about warehouses, but many are constructed to a standard that cannot take solar panels, because the roofs are not strong enough. We must do more to get solar panels into commercial spaces and housing.
I also encourage the Government to do more on the future homes standard. There is uncertainty about whether it will have proper, fit and strong purposes and standards for new-build houses. Then there is the issue of retrofitting existing houses and how we get more energy-efficient measures into them.
I will point out something to the Conservative Benches. The idea that we can either eat or have solar panels is a false dichotomy. I note that, while Amendment 67 applies to agricultural land of grades 1, 2 or 3, Amendment 73 applies to agricultural land of grades 4 and 5, so the Conservatives are covering quite a lot of grades with their amendments. I argue that climate change itself is the biggest issue for us in terms of food security, not solar panels that cover far less than 1% of our land. We have just had the worst harvest since 1988—if not ever, as some people say—and that was because of a continuous wet climate. We have had the failure of the last autumn and winter crops. It is climate change itself that is causing us to have problems with food security—and that is causing massive problems for our farmers.
I welcome the amendments but they are not ones that we can support.
My Lords, I apologise to the Committee for missing the first bit of my noble friend’s introduction to his amendments. I take this opportunity to ask the Minister whether he could update the Committee on where we are with the land use strategy. Like the noble Lord, Lord Cameron, I, too, have been banging that drum for some time.
As the noble Baroness, Lady Young of Old Scone, gently chided my noble friend for the length of his introduction, I say to her that he is perfectly entitled to speak for 12 and a half minutes when introducing an amendment. That would not be the case if he were just one of the rest of us.
My Lords, it has just gone 10 pm. We are just over half way through the Government’s stated targets for this evening. As the noble Baroness, Lady Young of Old Scone, said, it is highly unlikely that we can finish another eight groups any time soon.
It is a firm convention that the House rises at 10 pm between Monday and Wednesday, and there has been no agreement to the contrary. We have had, thus far to date, one and a half days in Committee against a committed three days. This is a significant Bill; £8.3 billion worth of taxpayers’ money is going into it. We owe it the scrutiny that such public spending, rightly, should deserve. I ask the Government Chief Whip whether he will resume the House now or fairly soon after.
Will the Opposition Chief Whip take an intervention? I just want to point out that there have been two and a half days of scrutiny and not one and a half days. She is not correct.
I think that the noble Earl was not listening to me. I said that, to date, we have had one and a half days of scrutiny, and tonight would make two and a half days. The Government committed to three days. That was the point I was making.