Great British Energy Bill

Earl Russell Excerpts

Committee stage
Wednesday 22nd January 2025 Grand Committee

There are two missing great chunks of this issue. There is the recognition that the environmental impact is enormous, and that it requires intimate co-operation —an issue we have come back to again and again of co-operation with new or existing nuclear sites, maybe with small reactors on them instead of the big ones. There will have to be co-operation there, because most of the nuclear sites are on the sea and most of the switching stations obviously have to be on the sea as well, presumably in similar places. I do not know; this is all left completely undecided and undiscussed. It is certainly not mentioned in the Bill at all and I would like some comments from the Minister on that.

[Earl Russell (LD)]

I am sorry, but I am just a little confused which amendment the noble Lord is speaking to. This is obviously not Second Reading and we are not making general speeches. Could he help me with which amendment he is speaking to?

[Lord Howell of Guildford (Con)]

I had actually finished but I spoke repeatedly to the environment amendment. I mentioned it six or seven times. I am not sure what the noble Earl’s motive is. I thought that ought to be clear. Is it not clear?

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Moved by

[Earl Russell]

122: Clause 8, page 4, line 15, leave out subsection (2) and insert—
“(2) This section and section 5 come into force on the day on which this Act is passed.(2A) Sections 1 to 4, 6 and 7 come into force on the day the statement required by section 5(1) is laid before Parliament.”Member’s explanatory statement
This amendment means the Bill cannot come into force unless the statement of strategic priorities has been laid before Parliament.

[Earl Russell (LD)]

My Lords, I stand to open the very last group of amendments as part of the final day in Committee on the Bill. This group is on commencement and, in moving Amendment 122, I will also speak to Amendments 123 and 124. I will be very brief on my amendments in this group, as I feel that I have already spoken to them in the group on strategic priorities during day 2 in Committee, a debate that was so nobly led by the noble Lord, Lord Vaux of Harrowden, who I note is in his place. We had a very good and useful conversation on the strategic priorities as part of that group.

Amendment 122 would require that the strategic priorities are laid before Parliament. I have also tabled Amendment 123, which would require that they be laid before and approved by Parliament, and Amendment 124, which is, as I said, more of a compromise on these issues. It says that the Act

“cannot come into force unless a document setting out the thematic headings of the statement of strategic priorities has been laid before Parliament”.

That last amendment is where I really want to be on these issues.

My sense is that there is a general concern across the House, and across parties, on the need for some further clarity on the strategic priorities, but I welcome the words of the noble and learned Lord, Lord Falconer, at Second Reading. He made a welcome statement that some work should be done to try to find a solution on this. I also recognise that the Minister is in a difficult position here and that there is a need to get on with the Bill. I recognise that these things are being negotiated with the devolved authorities.

My last amendment is really an attempt to try to find a solution to these issues, and my hope is very much that a solution can be found. I hope that the Minister can say something on that solution today and maybe, after further consideration prior to Report, give at least the heads of terms of the kind of things that will be in the strategic priorities. On that, I think we can progress. My worry is that it otherwise feels, from our point of view, a bit like we are signing a blank cheque on these matters. That being said, those are my amendments.

I turn to the three other amendments in this group. Amendment 125, in the name of the noble Lord, Lord Offord of Garvel, is on the publication of a financial framework document and calls for that document to be published before the Act is passed. From my personal point of view, I would like to see some progress on the financial document and what it might contain. I am not certain that I would refuse to pass the Act if it were not published prior to then.

Amendment 126 is in the names of the noble Lord, Lord Hamilton of Epsom, and the noble Viscount, Lord Trenchard. This amendment says that the Act cannot come into force until its impact

“on the number of jobs in Aberdeen”

has been published. We do not feel that we would support that amendment. The development of offshore renewable energy will help to create jobs, and GB Energy will be headquartered in Aberdeen. The exact manner of how that happens is to be seen, but green energy and green jobs are good for our future and the Bill is good for our energy security.

We have had a few conversations about the cost of this Bill and GB Energy. I kindly remind the Conservatives that they spent over £40 billion subsidising energy bills as a result of the war in Ukraine. While that money was useful to those who were suffering in fuel poverty, in the longer term it did absolutely nothing to generate energy security for our country and our future. The biggest cost is doing nothing. To continue to do nothing is not an option that remains open to us, either in terms of preserving our future or of looking after bill payers. In the main, therefore, we welcome the Bill.

I turn, finally, to Amendment 127 in the names of the noble Lord, Lord Hamilton of Epsom, and the noble Viscount, Lord Trenchard, which calls on the Secretary of State to publish a report on the cost and viability of the Government’s net-zero strategy. That is not necessary before the Bill is passed, but I take the point made by the noble Lord, Lord Frost, who is not in his place. It is important that the Government are clear on figures, and those figures should be updated. However, when we have these conversations on cost, they are, unfortunately, very one-sided. The cost is always on one side of the equals sign and not on the other. There is a huge cost in doing nothing. We have seen LA go up in flames, and there are huge predicted costs to the global economy and our future.

The Government, to my mind, must do more in continuing to look at reforming the electricity market mechanism. The Government’s projected direction of travel is for us to electrify, and it is important that we continue to look at the cost of electricity and that the Government continue to work on providing social tariffs and making sure that those in need can afford to heat their homes. With that, I beg to move.

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[Lord Hamilton of Epsom (Con)]

Yes, but the fact that a number have gone already because the industry is declining is not a compelling reason for destroying even more, in my view—but I hear what the Minister says.

Of course, this contrasts tremendously with the inaugural address from President Trump, saying, “Drill, baby, drill”. He is quite keen on expanding the oil industry in the United States, which is interesting because he slightly gives the impression that the United States has been rather laggardly in producing oil. I have some quite interesting statistics from the Library that indicate that, throughout the Biden years, despite all the green initiatives that were produced, the United States was actually the biggest producer of oil in the world. In 2020, it produced 11.3 million barrels a day, and in 2023 it produced 12.9 million barrels a day. Of that, it was using about 8 or 9 million barrels for its own consumption and exporting the rest. The idea being put out by the Trump regime that drilling for oil will somehow be a new venture is quite interesting; it has been going on, fit to bust, under the Biden Administration—you slightly wonder how that ties in with all the green credentials that he was boasting about, when they were producing these vast quantities of oil. They were way ahead of the Russians, who were the second-biggest producer of oil, at about 10 million barrels a day.

We are now in an interesting situation, as there seems to be a recognition by the Trump regime that we will go on needing hydrocarbons and oil way into the future. At the end of the day, the idea that we can somehow phase all this out in this country slightly defies credibility because, as we have discussed already, the reserves of oil are higher than they have ever been, and we will go on needing it for quite some time. It is rather extraordinary that we do not produce our own oil in the North Sea for our requirements. As it is, we will have to import it from other places, creating CO₂ emissions and so forth on the way.

[Earl Russell (LD)]

I was listening to what the noble Lord was saying, and the truth is that North Sea oil is declining by 7% a year—which will not change—and that we have the third-best wind resources in the world. North Sea oil will never meet our energy needs and, if we do not find alternative forms of energy, we will be dependent on the international markets, which will mean huge variability, no security and huge cost to our bill payers. Surely the best thing to do is use the third-best renewable resources in the world that we have to back that up with a system that works.

[Lord Hamilton of Epsom (Con)]

I find that an interesting comment because, at the end of the day, wind energy is totally dependent on the feed-in tariffs that end up on everybody’s electricity bills. That is one reason why we are paying such enormous sums of money for electricity at the moment. The idea that wind is somehow a cheap option does not seem to be quite working out.

The broad point is that anybody who looks at the energy demands of this country knows that we will go on needing oil for quite some time to come. It seems extraordinary that we then depend on imports of oil from around the world, with all the CO₂ emissions that go with that, rather than producing our own. I can see no logic in that at all. The production of oil in the North Sea may be declining, but that does not mean that we should not, therefore, give licences to produce more oil from the North Sea if we actually need it in this country. That seems inexplicable when we are importing it from elsewhere.

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[Lord Hunt of Kings Heath (Lab)]

My Lords, that is a very interesting comment indeed.

I turn to Amendment 127, the effect of which I resist because in the end, it is inconsistent with our intention to set up GBE as quickly as possible. I understand noble Lords’ concerns about information being available now, but we are keen to see GBE up and running. The statement of strategic priorities will ultimately be subject to parliamentary scrutiny. We want GBE to play a full part in the discussions on it and the framework document will be extensive, following normal procedure.

On that basis, the Government are not willing to move in that area. However, I am looking at some of the issues around the statement of strategic priorities, particularly in relation to timing, and will perhaps give a sense of some of the pointers that will be raised in it. I will continue to have discussions with noble Lords on that between Committee and Report.

[Earl Russell (LD)]

I thank all noble Lords who have taken part in this debate. I start by reflecting the Minister’s last sentence in his response to this group of amendments. I thank him and his officials for the open nature with which they have engaged and continue to engage with us. The prospect of further discussions on these issues prior to Report is very welcome from my point of view.

As I have said, I recognise the need to set up GB Energy at speed, and I recognise that it needs to exist to feed into the strategic priorities. I particularly welcome the Minister’s last sentence. As I said, my amendments in this group were about trying to find a compromise and a way forward. I also welcome his comments from the Dispatch Box on the framework document, guaranteeing that it will be produced and will be extensive and follow the proper course of action. Again, those are welcome documents, and I am sure that Members of this Committee will note them.

It is welcome that GB Energy will be headquartered in Aberdeen. It is my opinion that GB Energy will help to create good and stable green jobs. The Minister said that 90% of oil and gas offshore jobs have high levels of transferrable skills. I think we can all agree that we need a just and fair transition for the people who work in our oil and gas industry, and we all need to keep that in mind. The Committee will also note the Minister’s comments on Amendment 127. With that, I thank all noble Lords for taking part in what has been an interesting set of debates.

Amendment 122 withdrawn.