Great British Energy Bill

Debate between Judith Cummins and Claire Coutinho

Report stage
Tuesday 29th October 2024 Commons Chamber

[Claire Coutinho (East Surrey) (Con)]

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

[Madam Deputy Speaker (Judith Cummins)]

With this it will be convenient to discuss the following:

New clause 2—Nature Recovery Duty—

“(1) In exercising its functions, Great British Energy must take all reasonable steps to contribute to the achievement of targets set under sections 1–3 of the Environment Act 2021.

(2) Under the duty set under subsection (1), Great British Energy must consider opportunities to incorporate nature-based solutions in—

(a) the design and maintenance of any assets in its ownership, and

(b) its investment decisions.”

This new clause would give Great British Energy a new duty, requiring it to contribute to the achievement of Environment Act targets. The duty specifies the incorporation of nature-based solutions (including nature friendly design and building measures) in all assets owned by and invested in by Great British Energy.

New clause 3—Prohibition of investments which would increase greenhouse gas emissions—

“(1) Prior to making any investment, Great British Energy must publish an assessment of the impact of the investment decision on—

(a) greenhouse gas emissions and

(b) the production or combustion of fossil fuels.

(2) Where the assessment carried out under subsection (1) showed that the investment was expected to contribute to an increase in greenhouse gas emissions, Great British Energy must not make that investment.”

This new clause would require Great British Energy to publish an assessment of potential investments on greenhouse gas emissions and the production or combustion of fossil fuels. Any investment which the assessment showed was expected to increase greenhouse gas emissions would be prohibited.

Amendment 3, in clause 1, page 1, line 3, at end insert—

“within 6 months of the day on which this Act is passed.”

Amendment 4, in clause 3, page 2, line 18, at end insert—

“(e) an emergency home insulation programme with targeted support for people on low incomes, and

(f) the expansion and development of renewable energy and technology.”

This amendment would set objects for Great British Energy of facilitating, encouraging and participating in an emergency home insulation programme with targeted support for people on low incomes, and the expansion and development of renewable energy and technology.

Amendment 1, 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.”

Amendment 5, page 3, line 8, at end insert—

“(1A) The statement of strategic priorities under subsection (1) must include a priority to advance the production of clean energy from schemes owned, or part owned, by community organisations.”

This new section would require the statement of strategic priorities to make specific regard to facilitate community-based clean energy schemes.

Amendment 6, 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.”

Amendment 8, 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.”

Amendment 11, page 3, line 8, at end insert—

“(1A) The statement of strategic priorities under subsection (1) must include a priority to allocate 3% of Great British Energy’s budget to marine energy projects.”

This amendment would require 3% of Great British Energy’s budget to be allocated for marine energy projects.

Amendment 12, page 3, line 8, at end insert—

“(1A) The statement of strategic priorities under subsection (1) must include a priority to work with Great British Nuclear on the development of nuclear energy projects.”

This amendment would require Great British Energy to work with Great British Nuclear on developing nuclear energy projects.

Amendment 13, page 3, line 8, at end insert—

“(1A) The statement of strategic priorities under subsection (1) must include a priority to require any renewable energy development located in Wales that Great British Energy owns or invests into offer a minimum of 10% community and 10% local ownership for each project.”

This amendment seeks to ensure that all renewable energy projects in Wales which are owned or invested in by Great British Energy would be required to offer a 10% stake in community ownership i.e. for individuals and households, and a 10% stake of local ownership, i.e. any Wales-based organisation.

Amendment 15, page 3 line 16, leave out “consult” and insert “receive the consent of”.

This amendment would require that the Secretary of State receives consent from Welsh ministers before including in the strategic priorities and plans any matter concerns a subject matter provision about which would be within the legislative competence of Senedd Cymru, if contained in an Act of the Senedd.

Amendment 7, 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 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.

(1B) A report under subsection (1A) must include a projection of how Great British Energy’s activities are likely to affect consumer energy bills over the following five years.

(1C) A report under subsection (1A) must be made within two years of the date of Royal Assent to this Act and annually thereafter.

(1D) The Secretary of State must lay a report made under subsection (1A) before Parliament.”

Amendment 9, page 3, line 38, at end insert—

“(1A) 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.

(1B) A report under subsection (1A) must be made within two years of the date of Royal Assent to this Act and annually thereafter.

(1C) The Secretary of State must lay a report made under subsection (1A) before Parliament.”

Amendment 10, page 3, line 38, at end insert—

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

(a) Great British Energy’s in-year return on investment, and

(b) A forecast of the following year’s expected return on investment.

(1B) A report under subsection (1A) must be made within two years of the date of Royal Assent to this Act and annually thereafter.

(1C) The Secretary of State must lay a report under subsection (1A) before Parliament.”

Amendment 14, 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 Wales must be invested back into projects located in Wales.”

This amendment would require the Secretary of State to ensure that all revenue generated by Great British Energy from resources in Wales are invested back into energy projects in Wales.

[Claire Coutinho]

It is nice to be back discussing Great British Energy, and on the day before the Budget, too. I am sure that Labour Members are worrying about what kind of horrors they will be forced to defend next. They will have had a miserable summer trying to explain to their constituents why they are scrapping the winter fuel payment for pensioners in poverty, just weeks after a general election in which no mention was made of that. They will have spent the last few weeks explaining that the term “working people”—the people they promised to protect in their manifesto—does not include small business owners, or employees with savings, and that their use of the term “national insurance” does not prevent a national insurance rise for employers. They will be getting a bashing from companies, who were told that Labour would be pro-business, yet have been clobbered by post-election announcements of tax rises and trade union charters, and who have a Prime Minister with an optimism about Britain that puts him on the charts somewhere between Eeyore and Victor Meldrew. And tomorrow Labour Members will have to explain why the Chancellor who said before the election that any change to the fiscal rules would amount to fiddling the figures is now changing them to open the door to billions of pounds of borrowing.

This is a timely return to the Great British Energy Bill. Our amendments today will give Labour Members an opportunity, which I am sure they will welcome, to hold their leadership to account for at least some of the promises that they were told to go out and sell. Let us take a look at a few of the promises that Labour Members made during the election. The hon. Member for Brent East (Dawn Butler) wrote on her website:

“We will set up Great British Energy…cutting energy bills by an average of £300 a year.”

The hon. Member for Bracknell (Peter Swallow) posted on Facebook:

“Why am I backing Labour’s plan to set up Great British Energy? It will save £300 off average household energy bills in the South East by 2030.”

The hon. Member for South Norfolk (Ben Goldsborough) said on Facebook:

“everyone in the east of England will get £300 off their energy bills…no ifs, no buts, no maybes, these will be measurable and you will be able to check our progress at the end of the next Parliament.”

At least 50 MPs made similar claims.

Why were Labour candidates up and down the country saying these things? Perhaps they were simply listening to the Cabinet. The Science Secretary said on “Good Morning Britain”:

“I can tell you directly…by the end of this Parliament that…energy bills will fall by up to £300.”

The Work and Pensions Secretary said:

“Great British Energy will get people’s bills £300 a year lower.”

This is my personal favourite: the Chancellor—the woman of the hour—said,

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

These were not one-off promises; it was the party line, as dictated by the Secretary of State for Energy Security and Net Zero. These promises are still up in writing. In fact, the Labour party website still says that its energy plans will cut bills by £300 on average. Oddly, Ministers now do not seem so keen on that pledge. We have asked them about it in this House, as have the media, but the number seems to have vanished. They have even taken down the Great British Energy website, and the newly appointed chair even said in Committee that cutting bills is

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

This is not trivial; these are promises that people care about. Every single Labour Member will have had constituents vote for them because they believed that Labour’s promise of £300 off their energy bills would make a meaningful difference to their lives. Amendments 6 and 7 in my name will hold the Government to account on their election promise to cut bills.

Our amendments would give Great British Energy a strategic priority to cut people’s energy bills by £300 by 2030, and would require Great British Energy to produce an annual report on progress towards meeting that target. Surely all Labour Members who made these promises and kept them up on their social media accounts will want to track the Government’s progress on this important issue for their constituents. Well, tonight is their chance.

But £300 off bills was not the Secretary of State’s only promise at the election. He also claimed that Great British Energy would create 650,000 new jobs, but he did not mention that figure on Second Reading, and the Energy Minister, the hon. Member for Rutherglen (Michael Shanks), did not mention it in Committee. It does not appear in Great British Energy’s founding statement, nor does it appear in the Government’s explanatory notes on the Bill.

The only detail we have heard about the number of jobs to be created by Great British Energy came from the Secretary of State’s hand-picked chair of that body, who said that “hundreds” of people will be employed at its Aberdeen headquarters. We have since found out that the chair himself will be based in Manchester. It is a funny kind of headquarters if the head will not be based there, but that is the kind of sophistry that the public are starting to expect from this Labour Government.

More importantly, those few hundred people will hardly make up for the 200,000 jobs this Government are putting at risk through their plans to shut down the North sea, or the missed opportunities for jobs thanks to their go-slow on nuclear. On the Secretary of State’s watch, we have already seen thousands of jobs in industry lost.

The Secretary of State can talk about skills passports and Government transition projects all he likes, but the truth is that they do not pay the bills. He likes to say that we need to cut carbon at an extreme pace, faster than any other major economy, in order to show climate leadership and save the planet, but if our gas production, steelmaking or energy-intensive manufacturing moves to Asia, which is still powered by coal, he will be adding to emissions. That would mean more carbon in the atmosphere, and would be devastating for the hundreds of thousands of people who would lose their livelihoods here in Britain. I say that as someone who, before entering Parliament, worked on regenerating some of our most deprived communities once the jobs were gone.

As with our amendments on the Government’s £300 pledge, amendments 8 and 9 in my name would give Great British Energy a strategic priority of creating 650,000 new jobs by 2030, and would require an annual report to Parliament on progress towards this aim. That is important, because even the trade unions that normally support Labour have warned the Secretary of State and his team that his plans will lead to the mass deindustrialisation of Britain. The general secretary of the GMB has said that the Secretary of State’s plans are

“hollowing out working class communities”,

and will amount to “decarbonisation through deindustrialisation.” He said that importing more from China is

“bad for communities, not great for national security and it makes no sense in terms of the environment.”

He also said, and I hope the ministerial team are listening closely to this one:

“Our message to Ed Miliband is very clear: We are worried about a lot of promises that are not being delivered on jobs.”

Those Labour MPs who are members of the GMB, including the Energy Minister, have the opportunity tonight to hold the Government to account by voting for annual reporting on the jobs being created. The question is, will they listen to the general secretary’s concerns?

The next promise was that Great British Energy would turn a profit for the taxpayer. The Secretary of State admittedly got himself into a mess on this one. He has never had to make commercial investment decisions, and neither has any of his ministerial team, which is why they have been caught out promising the British public that they can turn a tidy profit, while at the same time telling multimillion-pound energy companies that they will take the least attractive parts of their investments off their hands. That is important, because the Secretary of State has written this Bill to give himself powers of direction. That was not the case for the UK Infrastructure Bank, and there was a recurring question in Committee about how much independence the supposedly independent Great British Energy will have.

This is my proposal: if the Secretary of State wants the power to meddle, he should be duty-bound to report the results of that meddling—its profits and losses—to this House. Amendment 10 in my name would require Great British Energy to produce an annual report on the performance of its investments, including its in-year return on investment and a forecast of the following year’s expected return. That is the bare minimum we can expect, so that British taxpayers can see what he is doing with £8 billion of their money.

I tabled clause 1 because it is crucial that we have proper oversight of the wider activities of Great British Energy. New clause 1 would require the appointment of an independent reviewer to assess Great British Energy’s effectiveness in achieving its objectives and strategic priorities. In Committee, the Energy Minister said that the Government want Great British Energy to be

“accountable, transparent and clear about how it is delivering on its objectives.”––[Official Report, Great British Energy Public Bill Committee, 15 October 2024; c. 168.]

I agree, and that seems a perfectly good reason to support new clause 1.

As I have said previously, Great British Energy is pretty much a carbon copy of the UK Infrastructure Bank, which was set up to provide loans, equity and guarantees for infrastructure to tackle climate change, backed by £22 billion. No Minister has been able to tell us the real difference between Great British Energy and the UK Infrastructure Bank, or why the taxpayer has to pay for two headquarters, two chief executives and so on. The one difference appears to be that Great British Energy will mean additional powers for the Secretary of State.

If Labour Members are so intent on handing this Secretary of State billions of pounds to gamble with, I expect they will also want to replicate the independent review enacted by the United Kingdom Infrastructure Bank Act 2023. New clause 1 would provide that scrutiny and, although I intend to withdraw it this evening, if the Minister would like to table a similar amendment in the other place to follow the precedent set by the Act, I assure him of our backing.

The Secretary of State and his ministerial team have made big promises. It is crucial that this House can hold them accountable, as the consequences could not be more important for people’s energy bills, people’s jobs and businesses’ ability to succeed. As the respected energy and climate economist Dieter Helm has said, the risk is that this Government will head towards a 2029 election with industries lost and bills higher—exactly the opposite of what the electorate has been promised.

The Government’s refusal to publish evidence for their claims, to set out the details of their plans or to engage in any meaningful policy discussion outside their normal slogans and mantras means that their policies are more likely to fail. For example, the Secretary of State has said that this Bill and Great British Energy are part of his plan to ramp up renewables at breakneck speed because every wind turbine and every solar panel constructed will lead to cheaper energy and greater security, but that is simply not true. First, it depends on the price we pay for them. Expert analysis by Cornwall Insight found that the contracts for difference round that the Secretary of State bumped up, and that he now boasts about, will actually increase people’s bills by £5. Moreover, he has advertised to the multimillion-pound energy companies that he will buy whatever they sell, no matter the cost, up to 2030. People do not need a business background to work out what that will do to prices.

Secondly, if we are building renewables faster than we can connect them to the grid, the constraint payments needed by 2030 could add hundreds of pounds to people’s bills. Then there are the network costs, the green levies and the cost of dispatchable power. If the Secretary of State wants to replace gas, which is our main form of dispatchable power, he should set out the cost of what will replace it.

The options in this country are coal, which I assume Labour Members do not want, biomass, carbon-capture gas or unproven technologies, none of which will make our system cheaper. All the signs are that, far from making energy cheaper and more secure, this Secretary of State and his ministerial team will send people’s bills through the roof, and more and more people are sounding the alarm about whether he can even keep the lights on. Perhaps that is why he never commissioned an accurate assessment of his plans. Labour Members had 14 years in opposition, 14 years hankering for the jobs and the responsibilities they now have, but when we asked for the full-system cost of the Secretary of State’s approach, he could only say that it will be published “in due course.”

--- Later in debate ---

[Claire Coutinho]

I suggest the hon. Gentleman does some homework. We do not get our oil and gas from Putin. Instead, some 50% of our domestic gas supply comes from the North sea, which the party in government is trying to shut down. If he wants to talk about energy markets, he should do some reading about how they work. On that note, I commend our amendments to the House.

[Madam Deputy Speaker (Judith Cummins)]

I call Natalie Fleet to make her maiden speech.