Great British Energy Bill

Lord Alton of Liverpool Excerpts

2nd reading
Monday 18th November 2024 Lords Chamber

[Lord Alton of Liverpool (CB)]

My Lords, in congratulating and welcoming today’s perfect pitch, well-judged and outstanding maiden speeches, may I also scatter some stardust in the direction of the Minister, the noble Lord, Lord Hunt of Kings Heath, who I admire and like? The Government are fortunate to have him to drive forward their Great British Energy Bill. The noble Lord, Lord Bourne, was right to remind us that this relatively small Bill carries a large ticket—some £8 billion of taxpayers’ money—and as the noble Baroness, Lady Bloomfield, and my noble friend Lady Hayman said earlier, it will rightly be subject to scrutiny and amendment in your Lordships’ House.

I support a mixed economy of ownership: partnerships between the public and private sector and more community-owned energy, along with diversity of supply—everything from ever more resources for nuclear fusion technology to hydrogen, wind, solar and tidal barrages. In another place during the 1980s and 1990s, I founded and was chair of the All-Party Parliamentary Group for a Mersey Barrage. Although the then Government promised me they would consider the barrage project as part of the non-fossil fuel obligations and renewable energy policy, it never happened. The Mersey barrage would deliver enough clean, predictable energy to power hundreds of thousands of homes for 120 years, creating thousands of local jobs and turning the Liverpool City Region into a worldwide centre of excellence. I hope the Minister will agree to meet me and Steve Rotheram, the Mayor of the Liverpool City Region, to help ensure that the unique opportunity provided in this Bill is not squandered, as it was some 40 years ago.

In introducing the Bill in another place, the right honourable Ed Miliband rightly pointed to the absurdity—referred to by noble Baroness, Lady Winterton, earlier—of the city of Munich owning more of our offshore wind capacity than do the British Government. He has a point, but the missing reference was, to mix a metaphor, not to the elephant in the room but to the CCP dragon, and that is what I want to address my remarks to today. We all know that dragons wallow in sulphurous caves, snorting fire. Perhaps that is why China is responsible for around one-third of global CO₂ emissions. It has pumped out more pollution in eight years than the UK has in 220 years. It is building the equivalent of two new coal-burning power stations every week. It is doing this to build its industrial and military might and certainly not to do its bit toward tackling climate change.

Mingyang Smart Energy, China’s largest wind turbine firm, is involved in several projects in the North Sea. What are we thinking of, handing over such important capability in the net-zero transition to an entity that comes from an authoritarian and hostile state, and doing so as the European Union is launching its antitrust investigation into Chinese turbine manufacturers? Recall that the Joint Committee on Intelligence and Security says that China has been able to

“successfully penetrate every sector of the UK’s economy”,

that

“Chinese money was readily accepted by HMG with few questions asked”,

and that external experts concluded

“very strongly that HMG did not have any strategy on China, let alone an effective one”.

Instead of resilience, we have dependency. We currently have a trade in goods deficit of £32.3 billion, which we seem intent on adding to. A Civitas report documents over £140 million paid to United Kingdom universities by Chinese companies. Some are involved in military projects and some have links to institutions complicit in, facilitating or directly involved in the Uighur genocide, nuclear development, military research, espionage and hacking. Civitas identified “an existential threat” and says that China’s ambition at a global level is

“to become a technological and economic superpower, on which other countries are reliant, that represents the greatest risk to the UK”.

In recognising that threat, your Lordships’ House gave all-party support to my successful amendments to the Procurement Act, the Health and Care Act and the Telecommunications Security Act, and to remove some of the 1 million Chinese-made surveillance cameras now in the UK. I have also raised with RUSI the flooding of our markets with Chinese-made electric cars, Chinese-made cellular modules that are components in non-Chinese-made cars, and other electronic equipment which can be used to spy on us and to displace cars made by workers in democratic countries. South-east Asia is awash with Chinese EV car plants and sales, and it is producing electric long-haul lorries and mass-produced cheap EV cars for the mass market.

China is doing this to dethrone and destroy our automotive industry and to enhance its ability to withstand a blockade following the military occupation of Taiwan. It will also cost around 100,000 European car workers their jobs by the end of the decade. Many will lose those jobs because we simply cannot compete with slave labour. The Secretary of State has said that there should be no modern slavery in any part. So, can the Minister say what assessment has been made of reports that there are 96 companies relevant to the automotive sector and the production of electric cars operating in the Uighur region, including 38 that have documented previous engagement in state-sponsored labour transfer programmes, as highlighted by the International Labour Organization, and reports from Human Rights Watch detailing the use of slave labour in aluminium production, with Xinjiang accounting for 9% of total global supply?

I note the call from 50 legislators for Volkswagen to end its presence in Xinjiang and the damning red flag notice to Volkswagen from Morgan Stanley Capital. A US congressional select committee has found that two Chinese EV battery producers—CATL and Gotion High-tech—have links to companies operating in Xinjiang and forced labour programmes. The committee’s report connected both companies to XPCC, a Chinese paramilitary company sanctioned for its links to gross human rights violations in Xinjiang. Its customers include BMW, Volkswagen, Mercedes, Volvo, Stellantis and Renault. I note that Hikvision and Dahua, now banned across the UK from so-called sensitive sites and with links to Uighur internment camps, are selling EV chargers and kit boasting a facility to—I quote from their own advertisements—“scan licence plates and check them against the DVLA database”.

The supply chain story does not end there. Quite recently, as part of an inquiry into the Democratic Republic of the Congo, I took testimony from Nobel Peace Prize laureate Dr Denis Mukwege. He raised concerns about Chinese exploitation of critical minerals for green technology in the DRC. Cobalt is essential in making lithium-ion EV batteries. Around 75% of global cobalt supply comes from the DRC and 80% of its output is owned by China. CATL is linked to the Chinese state enterprise CMOC, which operates multiple copper cobalt mines in the DRC. Some 25,000 children are working in cobalt mines. Dr Mukwege asked what weight is attached to the use of child labour when it comes to our own purchasing policies. I hope the Minister can tell us.

I draw the Minister’s attention to the report of Sheffield Hallam University’s Helena Kennedy Centre for International Justice, entitled In Broad Daylight: Uyghur Forced Labour and Global Solar Supply Chains. It indicates that the PRC has placed millions of indigenous Uighur and Kazakh citizens from Xinjiang into what the regime calls “surplus labour” and “labour transfer” programmes, or as we should call them, modern-day slavery state-operated programmes. To be clear, workers cannot refuse the work or refuse employment, or challenge the inhumane conditions of work. We are talking about the forcible transfer of a population and enslavement. The report concludes that the solar industry is particularly vulnerable to forced labour in the Uighur region and identified 90 Chinese and international companies whose supply chains are affected.

In 2023, another report from Sheffield Hallam University, Over-Exposed, found that transparency has decreased in the solar industry, making it increasingly difficult to verify whether supply chains are free from risk of Uighur forced labour.

In responding to these findings, could the Minister ask his friends in the Ministry of Defence what response it has made to the December 2023 BBC report that the British Army was investing £200 million in solar panels made by companies believed to have an exceedingly high exposure to forced labour in China? The PRC’s global market domination across the solar photovoltaic supply chain has been expanding rapidly, with 93% of global polysilicon and about 2.1 million tonnes used in almost all solar panels produced in China, and about half of that is produced in Xinjiang. The Secretary of State has confirmed that he is worried about slave labour in the supply chains. Was the Secretary of State warned about companies involved in solar panel production in Xinjiang before awarding contracts to them and, if so, why did he go ahead?

I want to talk also about the Forced Prison-Made Goods Act 1897. Given that Xinjiang has been referred to as a vast prison, and that British law prohibits the importation of prison-made goods, what consideration has been given to the compatibility of the importation of goods made by Uighur prison labour with that Act of Parliament?

Against the backdrop of the 2021 House of Commons decision to name a genocide by the CCP against Uighurs in Xinjiang, the admirable Labour Member of Parliament Sarah Champion, chair of the International Development Select Committee, tabled in another place an all-party amendment to this Bill to tackle what she called,

“a sinister dependency on … forced labour programmes”—[Official Report, Commons, 29/10/24; col. 734.]

in the supply chains for solar panels. She said also that the UK has become

“a dumping ground for dodgy solar”—[Official Report, Commons, 5/9/24; col. 486.]

and tainted solar goods.

That has other implications for the UK. In July, during the Kings Speech debate, I raised the Mallard Pass solar project, which uses Xinjiang-produced solar panels. On 1 August, in reply to a Written Question, the Minister said:

“Ethical procurement is considered at paragraphs 4.104-109”


of the Secretary of State’s planning decision. Is it not the case that, elsewhere in the planning decision, it states that human rights concerns are not a reason to refuse a planning application? If so, why is that? Should not this Bill be used to change it?

Today, Prime Minister Sir Keir Starmer met Xi Jinping. Reports suggest that he raised sanctions against seven parliamentarians, of whom I am one. These are trivial in comparison with Uighur genocide. Can the Minister tell us whether that issue was raised? If so, what was the response?

On several occasions, I have been privileged to stand with the Minister when he moved amendments on forced organ harvesting in China. In a powerful speech, particularly relevant to this Bill and to Uighur slave labour in Xinjiang, he said:

“It is now a multimillion-pound commercial business in China”.


He went on to say:

“Millions of Chinese citizens are currently detained in labour camps. UN experts estimate that at least 1 million Uighurs are being held in camps in the region of Xinjiang… Companies from the West are complicit in this. Adidas, Nike, Zara and Amazon are among the western brands which, according to a coalition of civil society groups, currently benefit from the forced labour of Uighurs in Xinjiang. In July this year, a 13-tonne shipment of hair products from Xinjiang, worth more than $800,000, was seized by US Customs and Border Protection. This shipment included wigs made from human hair, which is hugely concerning considering the many reports and personal testimonies of female Uighur Muslims having their heads forcibly shaved in the camps”.


The now Minister then reminded the Grand Committee that parliamentarians had the opportunity to strengthen the legislation and

“prevent British complicity in such crimes and to send an important signal to other countries”.

He reflected that issues such as 5G and potential Chinese investment in new nuclear energy presented dilemmas but concluded that,

“there must be a time when we make a stand”.—[Official Report, 28/10/20; cols. GC 141, 142.]

The noble Baroness, Lady Kennedy of The Shaws, was sanctioned with me for doing precisely that. Although she is unable to participate today, we will work together at later stages in moving all-party amendments to create a human rights-centric approach to greener energy supply chains. Let us put that insistence in the Bill and amend it accordingly. Let us do as the Minister said and make a stand.

Great British Energy Bill

Lord Alton of Liverpool Excerpts

Committee stage
Tuesday 3rd December 2024 Lords Chamber

[Lord Alton of Liverpool (CB)]

My Lords, I rise on the final note of the contribution of the noble Earl, Lord Russell, on those amendments to speak to my Amendment 91, which he just mentioned. It is in my name and that of my noble friend Lady Finlay of Llandaff and the noble Lords, Lord Storey and Lord Woodley. I know it enjoys support from all parts of your Lordships’ House. It would insert the following new clause after Clause 7:

“Within six months of a designation under section 1(1) coming into effect, Great British Energy must publish an assessment of the potential use of tidal barrage projects to support decarbonisation of the energy sector”.


That sits comfortably with the other amendments in this group. I strongly support what the noble Lord, Lord Naseby, said about the use of hydrogen, what the noble Earl, Lord Russell, said about heat pumps, and what I think my noble friend Lady Boycott will say about biomass.

I also thank the Minister, the noble Lord, Lord Hunt, with whom I have already had one meeting—he promised that at Second Reading and I am grateful to him for it. It is partly about whether we can reduce reliance on forms of energy that come with a price tag connected to slave labour in places such as Xinjiang. If one is to stop using sources that have a human rights dimension, we have to find alternatives. In a way, that is what these amendments seek to do: to look at what some of the other alternatives may be. I also know that the Minister has kindly agreed to meet with me and the metro mayor for Merseyside, Steve Rotheram, along with his noble friend, the noble Lord, Lord Woodley, in due course, so we can talk further about the Mersey barrage, which I will come back to in the course of my remarks.

The noble Lord, Lord Naseby, talked about security and diversity—very important concepts that have come out in all the previous groups we have talked about. We should make sure that we are not so dependent on any one source that anyone else can then hold us to ransom. I would add to security and diversity the need for more reliance in the United Kingdom on ourselves and a reduction in dependency on countries such as the People’s Republic of China or Russia. I think all of us were horrified to see the dependency that Germany had at the beginning of the war in Ukraine, and we must learn the lessons of that.

Why tidal energy? I am grateful to the House of Lords Library for producing some notes on this for me. However, I have been interested in this issue since the 1980s, when I served in another place on the Environment Select Committee, but also because I founded the Mersey Barrage All-Party Parliamentary Group. This idea had not come out of the blue. In fact, tidal barrages have been around for many years. The first was thought of by the French in 1921. It did not come to pass until 1966, when the La Rance barrage, quite close to Saint-Malo in Brittany, opened. So this is not a fantasy or something out of dystopian fiction; they have been done and here are decades of experience.

Tidal energy could be a crucial pillar for delivering the objectives of the energy Bill. It would strengthen the UK’s renewable energy mix, complement intermittent sources such as wind and solar, drive the green industrial strategy by fostering innovation, create jobs and support regional economic growth. The United Kingdom is uniquely positioned to be a global leader in tidal energy.

We can learn from projects such as the La Rance estuary barrage in France, but we can also learn—I think the noble Lord, Lord Howell, will be particularly interested in this—from the experience of South Korea, where the largest operating tidal power station is based: the Sihwa Lake project, which produces 254 megawatts of energy. It is a 43.8 kilometre artificial lake constructed as a land reclamation project in 1994. It used a 12.7 kilometre seawall at Gyeonggi Bay and, after some false starts, if you look at its history, nevertheless, construction led to 552.7 gigawatts of electricity generated by the tides. I asked what that really means to a layman like me, and I was told that it is the equivalent of 862,000 barrels of oil, or 315,000 tonnes of CO₂, equivalent to the amount produced by 100,000 cars annually. It has 10 water turbine generators, enough to support the domestic needs of a city with a population of about half a million. After some false starts initially, as I said, it led to some very positive developments in the ecosystem there as well.

That neatly takes me to the Mersey barrage, an idea that, as I said, has been around for over 30 years now. There has recently been a new public consultation, which closed last month. I know that when the Metro mayor comes to meet the noble Lord, Lord Hunt of Kings Heath, there will be an opportunity to discuss the findings of that.

None of these things, whatever energy we produce, comes with no downside—we all accept that—but there are surprisingly few downsides to the use of tidal barrages. Merseyside would argue that the green industrial revolution could be started off there, and Britain’s renewable energy coast could be there, on the River Mersey and in the Irish Sea. It would power hundreds of thousands of homes and create many jobs. I visited Cammell Laird a few weeks ago to see the wonderful renaissance that has taken place there, alongside the extraordinary renaissance of the Port of Liverpool; these are big success stories that need to be understood and learned more widely. Listen to what the mayor himself says: “There is a strong strategic case for taking forward a Mersey tidal power project and we are developing detailed plans for how it could be made a reality. I also believe there is a strong moral case for it too—our planet’s future depends on it.”

As people such as the noble Lord, Lord West, will confirm, the Mersey has a huge tidal range—green energy to power every home in the city region for more than 100 years. Surely that is something worth giving serious consideration to. It is predictable, so it complements offshore wind and solar energy; but it is predictable in a way that they are not always. It should be a key part of the diversity that we heard about earlier. It is a well-established technology with minimal decommissioning needs. I would also point the Minister to other experience, not just overseas. The Orbital O2 project in Orkney is the world’s most powerful underwater turbine: 2,000 homes there receive their energy from it, and more than 2,200 tonnes of carbon are cancelled as a result of the work of the project.

Then, of course, there is the Severn barrage project, which has been around a long time and has had many advocates, not least on the Official Opposition Benches over the years. I know that some noble Lords, one of whom cannot be here today, are great supporters of it, as are some of my noble friends. This is an issue that has captivated the party of the noble Lord, Lord Wigley, who is in his place, and others. The idea was dropped back in 2010, but it was resurrected in 2024, with New Civil Engineer reporting that a new independent commission had been established. It estimates that 7% of the United Kingdom’s electricity could be generated, and challenges such as cost, risk and environmental impacts, which have previously halted major barrage projects, are believed to be capable of being overcome by the use of new technologies.

The UK could be in a position to be a global leader. I certainly think this is worthy of exploration, and that is all the amendment commits us to doing. This should not be seen as some sort of science fiction, as some projects undoubtedly appear to be from time to time. It is not unrealistic, and there are already very good examples, which I have cited. It is worth looking at further, and if the Minister cannot support the amendment, I hope he feels that the principle of delving further into the potential of barrages should be part of what Great British Energy seeks to achieve.

[Baroness Boycott (CB)]

My Lords, I very much support what the noble Lord, Lord Alton, and the noble Baroness, Lady Finlay of Llandaff, said about tidal power. I have followed what has happened on the Severn, and it is terrific to see that it is now coming back into play. Tides are probably our most reliable power source in the UK. There will always be a tide, when there might not be some wind.

I support pretty much all the amendments in this group which look at diversifying the sources of energy—all of what the noble Earl, Lord Russell, and the noble Baroness, Lady Grender, said. I shall speak specifically to Amendments 30 and 33, which would exclude biomass from the definition of clean energy, and there are many reasons for this. Over the past few years, it has become completely clear to me and, I think, to many other noble Lords—including the noble Lord, Lord Forsyth, who is not in his place, and who spoke about this issue during a Question of mine a couple of weeks ago—that while biomass is okay on paper, in theory, and on a very small scale in practice, it is not at all okay on the big scale at which we practise it. We cannot go on using it to reach net zero. I do not know whether noble Lords saw the “Dispatches” and “Panorama” programmes; also, an Ofgem investigation has found that biomass energy generators in the UK have “misreported”—that is not my word—the data on where they get their wood from. In other words, it is not waste wood. The idea was that offcuts and waste wood were used and burnt. That in itself was a fallacy, because the burning of wood releases so much carbon, but the story gets worse.

As the Wildlife and Countryside Link put it:

“Bioenergy which burns woody biomass actively harms nature restoration efforts and will not contribute to GB Energy’s goals of clean energy, energy independence, nor cheaper energy bills.”


This is before you get to the negative health impacts of sourcing and burning biomass, the damage it is doing to the renewable energy brand, or, importantly, habitat destruction, which so often gets missed in the race towards net zero.

I want to raise a couple of wider bioenergy issues. I am really worried by the idea of BECCS—bioenergy with carbon capture and storage, which the Government seem intent on believing is an inherently negative emission technology. Let us look a little further. The assumption is based on the idea that all biomass inputs are waste—which not even our sustainability requirements require—or are balanced out by regrowth. If it was entirely the former, let us be clear that burning waste wood releases more emissions than natural degradation, through which carbon is absorbed by the soil—and that is before you get to all the other environmental benefits of leaving forestry residue in the forest where it belongs. If we assume the latter to be true, it is only the case after several decades and, again, only if the trees are actually replanted. In short, there is no way to verify that biomass is carbon neutral at any point.

I feel that this has gone so far that it would even be worth the department itself sending someone out to where these pellets are apparently sourced from—in North America and in the province of British Columbia. Perhaps there is something that DESNZ or its predecessor, BEIS, has already done, which I have heard rumours about. I would be very grateful if the Minister could tell me if this has happened or is planned.

Biomass is not carbon negative. I understand that the Minister’s department baked BECCS into our carbon budgets over a decade ago and that they are ongoing in future carbon budgets, but the logic is flawed and, at its worst, truly deceitful. Just because we classify something as renewable or carbon negative does not mean that it is. We do not have time to grow the trees to absorb the carbon we are pushing into the atmosphere. As the noble Lord, Lord Forsyth, said, we are cutting trees down in North America and Canada, turning them into wood pellets, shipping them by various means back across Canada and the Atlantic, often to a power plant in Yorkshire where they are belting out carbon into the atmosphere, and we are calling this clean and renewable. My Lords, it is not.

My question for the Minister—apart from whether he is on this mission to find out the extent of this—is whether he will rule GBE out of involving itself with biomass power generation, and will he come back to me on what investigations his department has done in the past few years? Can we be honest at this point and remove the absurd assumption that biomass is inherently carbon-neutral at the point of use?

Great British Energy Bill

Lord Alton of Liverpool Excerpts

Committee stage
Tuesday 3rd December 2024 Lords Chamber

Moved by

[Lord Alton of Liverpool]

43: Clause 4, page 3, line 5, at end insert—
“(6) Financial assistance under this section must not be provided if there exists credible evidence of modern slavery in the energy supply chain of any company designated Great British Energy.”

[Lord Alton of Liverpool (CB)]

My Lords, in moving Amendment 43, I thank the noble Baroness, Lady Kennedy of The Shaws, the noble Lord, Lord Blencathra, and the right reverend Prelate the Bishop of St Albans for their support. I thank the noble Earl, Lord Russell, for indicating his support and that of his colleagues. I in turn am very happy to support his Amendment 100, which is grouped with Amendments 43 and 109.

I begin by thanking the Minister, the noble Lord, Lord Hunt of Kings Heath, for making good on his promise of a meeting to discuss this amendment, and for the involvement at that meeting of the Inter-Parliamentary Alliance on China. The noble Baroness, Lady Kennedy, is co-chair of IPAC with Sir Iain Duncan Smith, Member of Parliament. He, she and I are all sanctioned by the People’s Republic of China with four other parliamentarians. The noble Baroness, Lady Kennedy, regrets being unable to be here this evening.

During the meeting with the noble Lord, Lord Hunt, we discussed a number of questions I had raised at Second Reading. I would be extremely grateful if, when he comes to reply this evening—if he is in a position to do so—he could answer the question I put to him about the Foreign Prison-Made Goods Act 1897. In addition, can he say what assessment he and his officials have made of the implications of the Proceeds of Crime Act, which in the context of the Uighurs has been to the Court of Appeal on other issues, and for that matter of compatibility with the European Convention on Human Rights? I mention that as a member of the Joint Committee on Human Rights, which is about to be reconstituted tomorrow. I hope it will look at this question of human rights compatibility.

I should also mention the reports that have appeared on BBC World in the last couple of days. One of those reports concerns tomato purée being sold in the UK under the false label of being Italian, when it was actually made by slave labour in Xinjiang. Reports included details of Uighurs who were beaten and subjected to electric shocks for not meeting their targets. Last night, “Panorama” reported that other Uighur Muslims told BBC Eye—the World Service investigations unit, made possible by a grant from the FCDO—that if they failed to pick 450 kilograms a day, they would be strung up by chains from the ceiling and beaten until they fainted.

The BBC showed huge factories linked to the detention camps, with millions of square feet of space. It is easy to imagine solar panels being made in such places, which of course are not open to inspection. They are part of a vast collocated complex, which aims to undercut all competition and replace capacity, crucial to domestic and military needs in the United Kingdom, with a world dependent on an authoritarian state with hegemonic ambitions.

This amendment returns to the question that I raised at Second Reading and poses a simple question to the Committee: do we want a slavery-free green transition, or are we content to allow the laudable aims of the Government to be achieved through forced labour? Some noble Lords may disagree with the framing of the question, perhaps because they are fearful of overstatement. Unfortunately, as I have just described, the reality is that stark. My argument revolves around the following three predicates. First, China dominates much of the renewables supply chain—an issue that was raised earlier in our debates by the noble Lord, Lord Hamilton, and others. Secondly, forced labour is widely and credibly demonstrated to be present throughout the Chinese renewables supply chain. Thirdly, net-zero targets are unachievable without Chinese-made renewables. Therefore, the argument runs that 2030 cannot be achieved without slavery.

Let me unpack those predicates, beginning with China’s dominance. According to the International Energy Agency:

“Solar … is on course to account for two-thirds of this year’s increase in global renewable power capacity and further strong growth is expected in 2024”.


Indeed, the Minister referred to that in earlier exchanges. The International Energy Agency also said:

“China has invested over USD 50 billion in new PV supply capacity—ten times more than Europe—and created more than 300,000 manufacturing jobs across the solar PV value chain since 2011. Today, China’s share in all the manufacturing stages of solar panels (such as polysilicon, ingots, wafers, cells and modules) exceeds 80%. This is more than double China’s share of global PV demand. In addition, the country is home to the world’s 10 top suppliers of solar PV manufacturing equipment”.


This is a concerning picture.

Yet this should not come as any surprise. It is no secret that China has, for a long time, wished to develop strategic monopolies over the renewables sector, together with other areas of critical infrastructure. As I have argued here before—some might say rather tediously, and I apologise if that has been the case—we have allowed ourselves to become more and more dependent on the CCP regime as our own national resilience has simultaneously been emasculated. As recently as 2020, Chairman Xi Jinping gave a speech to the seventh session of the Communist Party’s finance and economy committee, in which he said that China will aim to form a counterattack and deterrence against other countries by fostering killer technologies and strengthening the global supply chain’s dependence on China.

The problem is broader than photovoltaics. The production of rare earths, which noble Lords will know is essential to the renewables supply chain, is again utterly dominated by China. As far back as the 1990s, Deng Xiaoping himself is reported to have said:

“The Middle East has oil, China has rare earths”.


A report by the Oxford Institute for Energy Studies says that

“China dominates the supply chain, accounting for 70% of global rare earth ore extraction and 90% of rare earth ore processing. Notably, China is the only large-scale producer of heavy rare earth ores. This dominance has been achieved through decades of state investment, export controls, cheap labour and low environmental standards”.

It is not just think tanks that are exercised about the degree of UK renewables market exposure. As James Basden, co-founder of Zenobē, said last year, China controls

“the supply chain all the way from the minerals through to assembly and distribution. That means both our power sector and automotive sector are very dependent on Chinese products”.

Suffice it to say, nobody disputes that China has a stranglehold on the renewables supply chain.

I turn to my second predicate: forced labour is unavoidable in the renewables supply chain. Forced labour is widely and credibly demonstrated to be present throughout the Chinese renewables supply chain. The problem is especially pronounced in the solar supply chain. According to Jenny Chase, the head of solar analysis at BloombergNEF:

“Nearly every silicon-based solar module—at least 95 percent of the market—is likely to have some Xinjiang silicon in it”.


Why would it be a problem for 95% of the market to have Xinjiang silicon? First, it is important to understand that polysilicon material is crucial—it is the single primary material needed to produce most solar panels.

Solar panels that do not use polysilicon enjoy a negligible share of the global solar-power market. Most crucially of all, according to a 2023 report by Crawford and Murphy, all manufacturers of this material in Xinjiang are tied to Uighur forced labour. The reason for this is that the entire process used to create metallurgical-grade silicon from mining to production is highly dependent on state-sponsored labour transfer programmes.

--- Later in debate ---

In the meantime, I am very happy to engage further with the noble Lord, Lord Alton, and to feed his views into the task force. I hope to make progress.

[Lord Alton of Liverpool (CB)]

I am indebted to the Minister—I will come back to that in a moment—and I thank the noble Lord, Lord Offord, and the noble Earl, Lord Russell, for their contributions to this debate. I was heartened by the in-principle support that they gave for what these amendments are seeking to achieve. I pick up a point from the noble Lord, Lord Offord, about the consumer having the right to know the origins of products. I feel very strongly about that and there is much more that we can do about it in due course.

I am a free trader, but I am always struck that it was Richard Cobden who drew lines in the sand. He said no to free trade when it came to human beings in the slave trade and no when it came to the opium trade. A three-day debate in the House of Commons led to the overturning of that trade, which to this day has some relevance in the context of China. Consumers can play their part in those activities and campaigns, because they can say no by voting with their feet, but they have to know what the origins are. That means that we have to do more to detect them. The noble Lord, Lord Rooker, often says that we can look at the cotton that comes out of places such as Xinjiang to detect its DNA, or at silicon or other raw materials.

And we should go right back in those supply chains. I made the point at Second Reading that 25,000 children are believed to work in cobalt and lithium mines in the Democratic Republic of the Congo. So these are things that matter a great deal to a lot of people in different places, and we can do more about them.

I know the Minister is no stranger to these issues. He was right to mention the Procurement Act and the joint efforts we made successfully to raise amendments to that. As he knows, I was involved in the modern slavery legislation in 2015, and I always give great credit to noble Baroness, Lady May, as she now is, who was then the Home Secretary, in bringing forward what was bipartisan and bicameral legislation.

Picking up a point that others have made this evening, the noble Lord, Lord Cryer—whose father I had the privilege of serving with in the other place— said earlier today that what he likes about this House is the willingness to try to find solutions, being less confrontational and working with one another to find ways forward. I hope we will try to do that.

It is difficult to square the circle. There are contradictions and inconsistencies here; it feels almost like Jekyll and Hyde in some respects. We have the Business Secretary, Jonathan Reynolds, saying:

“I give … an absolute assurance that I would expect and demand there to be no modern slavery in any part of a supply chain that affects products or goods sold in the UK … I promise … that, where there are specific allegations, I will look at those to ensure that”


this happens.

“It is an area where we have existing legislation, and indeed we would go further if that was required”.—[Official Report, Commons, 5/9/24; cols. 418-19.]


So I welcome what the Government have been saying, but the reality, when you start to look at supply chains and where these products are made, does not sit very comfortably with those promises.

On the basis of what has been said evening, I beg leave to withdraw Amendment 43, and I hope we can find scope to come forward with something on which we can agree at Report stage.

Amendment 43 withdrawn.

Great British Energy Bill

Lord Alton of Liverpool Excerpts

Committee stage
Monday 13th January 2025 Lords Chamber

[Lord Petitgas (Con)]

My Lords, I rise to discuss Amendment 80. It proposes that GBE be required to produce both quarterly unaudited and annual audited reports. These should disclose the rate of returns for each investment and the carbon emissions resulting from each investment. This amendment is a matter not only of transparency but of accountability. It will ensure that taxpayers are fully informed about how their money is being spent.

Let me address first the rationale behind requiring disclosure of carbon emissions. This is standard practice. Indeed, the Secretary of State has compared GBE to Ørsted in Denmark; Octopus in the UK is another possible comparison. Both companies measure scope 1, 2 and 3 emissions, following certain protocols. These align with the Task Force on Climate-Related Financial Disclosures and EU taxonomy. Will the Minister confirm whether GBE will follow the same practice and taxonomy?

The principle behind the amendment in my name on financial returns is abundantly clear: if the Government are going to use public funds to invest in energy projects, they must be duty-bound to report the results of those investments. This proposal is an essential part of providing insight and knowledge of the operation of GBE. It is a principle of good governance to avoid taxpayers writing blank checks; it aligns with the notion that taxpayers should know not only how their money is being spent but how it is being invested and managed to ensure it delivers adequate returns.

I remind the Committee that GBE will be not an operating company but an investing company owning minority stakes in a large number of projects of different sizes. This will be complex, and the only way to track and measure performance will be to look at individual investment returns. I also remind the Committee that there is no investment committee yet set up and no reference—it looks as if the Secretary of State, ultimately, is in charge of making decisions on these investments. I have never seen this in an investment company. No private equity firm would be run like this.

Operating companies produce classic annual reports and accounts, but GBE will be more akin to a permanent capital venture fund. Therefore, its annual report and accounts really should be supplemented by disclosure of the rates of return on its investments.

I will address a comment made by the Secretary of State during the Bill’s Second Reading in the other place. He made an interesting argument about the potential of state-owned companies. In his own words:

“State ownership is the right idea for creating wealth for Britain”,


as GBE’s investments

“will help generate return for the taxpayer”.—[Official Report, Commons, 5/9/24; col. 456.]

GBE, he argued, would not only contribute to energy security but create jobs and foster economic growth. While I am encouraged by the potential for GBE to generate wealth and drive the economic growth that we need badly, I will ask the Minister to clarify a few points in relation to this statement.

First, if GBE is indeed intended to generate returns for the taxpayer, can the Minister confirm the expected rate of return on investment for these projects? In particular, will these returns be sufficient to justify the use of £8.3 billion of taxpayers’ money? To be clear, the £8.3 billion of capital for GBE will be borrowed by the Government. I do not need to tell your Lordships this as it is everywhere, but the long-term gilt yield stands now sadly at 5.5%—up more than 50 bps in the last three weeks. Infrastructure returns typically are above 10% and venture capital is above 15%. Therefore, the benchmark that GBE should be aiming at must be in the range of 10% to 15%.

We all know that we get what we measure. I worried when I read the evidence given by GBE’s chairman-elect, Jürgen Maier, in the Public Bill Committee debate in the other House on 8 October, when he said that GBE’s success will ultimately be measured by the number of projects it is able to finance and the quantum of energy it is able to deliver to the grid. So are we measuring returns or the number of projects? Therefore, it is critical that we understand the financial viability of these investments and ensure that they will not end up being a burden on the public purse.

Secondly, there is significant concern about the risk of GBE becoming a dumping ground for less profitable or riskier energy projects, especially those that private sector companies are unwilling to back. I should add that there was no shortage of capital for net zero when I was in No. 10, so I have to assume that GBE will back transactions that are perhaps less profitable. This concern was raised in Committee and by my right honourable friend Claire Coutinho, who questioned whether the Government’s aim to derisk projects could result in throwing taxpayers’ money into unprofitable ventures.

Representatives of energy trade associations such as RenewableUK and Energy UK have also raised questions. In particular, Adam Berman from Energy UK identified what he described as two competing priorities for GBE: making profitable investment and addressing problems in the energy system arising from market failures. He said that the company might struggle to resolve this potential conflict if it was not addressed in the Bill. Can the Minister provide assurances that GBE will not be disproportionately directed towards these high-risk, low-return projects, which could undermine the Government’s goal of creating wealth for Britain?

The Secretary of State and the honourable Member for Rutherglen, Michael Shanks, have cited Ørsted as a model and precedent for GBE. Ørsted is not only an operating company—it is the main energy entity in Denmark—but is 49% owned by the stock market. Its equity is researched by 20 investment banks, creating public and financial scrutiny each quarter. That is certainly a very different picture from GBE. GBE will invest in illiquid, minority positions, yet will be a large operation, at £8.3 billion of capital. Incidentally, this is about half the market value of Ørsted. This compels us to scrutinise it seriously and to ensure disciplined governance and oversight.

In summary, it is crucial for the Minister to provide further clarification on the financial viability of the investments to be made by GBE, the risks involved, and how the Government will ensure that taxpayers’ money is used wisely. Transparency and accountability, as we have discussed through Amendment 80, will be key to answering these questions and demonstrating that GBE is indeed acting in the best interests of the British taxpayer.

[Lord Alton of Liverpool (CB)]

My Lords, I support the remarks made by the noble Lord, Lord Offord of Garvel, and the noble Baroness, Lady Bloomfield, and Amendments 60 and 61, which they spoke to, particularly what the noble Lord said about reducing our dependency on foreign states. I will not repeat the remarks I made on day one in Committee, or indeed during our debate on China on 20 December, but I will add two or three germane points to what has been said to the Committee this afternoon.

Since we had our debate in Committee, I have sent the Minister a report by Ignites Asia that identifies funds run by global managers who had at least £1.4 billion linked to 14 solar and EV companies using slave labour in Xinjiang—a point referred to by the noble Baroness, Lady Bloomfield. These amendments are primarily about accountability; Parliament has a right to understand on a regular annual basis, as the noble Lord said, precisely how what will become the Great British Energy Act is working out in practice. It has a right to know what we are doing about supply chains and around the objective to create, as Amendment 60 mentions, some 650,000 jobs. How are we getting on with those things and how are we doing on the other side of the coin?

Already we are seeing the loss of jobs—in companies such as Vauxhall, for instance—not because of fair competition or trade, which most of us in this House support, but because of unfair trade that is based on massive subsidies for companies operating in China that use slave labour. We will never be able to compete on fair terms with companies that do that, but we aid and abet those practices by simply turning a blind eye to what is happening. As well as looking at the jobs we might gain, let us look at the jobs we are likely to lose.

We should think seriously about the supply chain question. The amendment I tabled for day one did not come out of thin air. I am glad to say it had been promoted as an idea in earlier debates in another place by Sarah Champion, chair of the House of Commons International Development Select Committee. That shows that it is a bipartisan and bicameral concern. People from all parties and none have anxieties about the kind of things that can go on in our supply chains and the lack of resilience and increase in dependency implicit in this. I remind your Lordships of the excellent report produced in 2023 by the Joint Committee on Intelligence and Security, chaired by Sir Julian Lewis MP, which reminded us of the massive security dangers we have to address as a result of the threat that the People’s Republic of China undoubtedly poses to us.

We should learn the lessons of the pandemic. We bought billions of PPE items with millions and millions of pounds of public money—taxpayers’ money—when many of those products could have been made in this country by British workers. We have to be a lot more careful than we have been so far. The noble Lord, Lord Offord of Garvel, is right to point us in his amendment towards justifying the case made by the Government in favour of the Bill.

I tabled a Written Question to the Minister that I hope he will be able to answer, if not today during our oral exchanges then at least in writing before Report, about how many solar panels we intend to buy to fulfil the ambitions of the Bill: how many, and at what cost? What are the alternatives? Can they be made elsewhere? Only this morning I heard from a company that operates out of South Africa that says it can produce solar panels without any of the risks involved in using slave labour from Xinjiang. There must be others—we should be doing more to look for those alternatives.

We have to take the issue of genocide more seriously than we have, not least because of what we would be placing on the shoulders of those companies that will be encouraged through this legislation to buy these products. They can be prosecuted under the 2015 legislation that was promoted in an incredibly enlightened way by the then Home Secretary, the noble Baroness, Lady May, who we referred to in our Question Time exchanges earlier today. The Joint Committee on Human Rights is about to embark on a new inquiry looking at supply chain transparency and the effects on modern day slavery. I hope that the noble Baroness might be one of those who comes to give evidence.

We have to take this issue more seriously. There was a good example of pre-legislative scrutiny when both Houses looked at this, amendments were made and there was a coming together; that should happen again this time. The House of Commons declared that a genocide is under way in Xinjiang. This is the crime above all crimes. I do not need to convince the Minister of this—I know that—but it seems that I have to convince the Government. Whenever Mr Miliband is questioned on this, he simply says, “We care about human rights”. We all care about human rights, but this is the crime above all crimes. The 1948 convention on the crime of genocide requires us to prevent, to protect and to punish. We do not do any of those things very well.

--- Later in debate ---

[Lord Hunt of Kings Heath (Lab)]

My Lords, we rely on agreed definitions as to whether an energy is clean. The noble Lord mentioned biomass and Drax. He will know that the Government’s view, which his party also took when in government, is that the carbon absorbed by the forestry that replaces what has been transported to Drax more than covers the carbon expended in the process of bringing it to Drax, including the use of shipping. For 14 years, the party opposite accepted that this was an appropriate definition.

I turn to my noble friend Lord Berkeley’s amendment, on the risk to off-grid households and the value of renewable liquid fuels to these households. The noble Lord, Lord Bruce, also covered that point, and I listened with great care to what both had to say. Clearly, we want fuel-poor and off-gas-grid homes to benefit from the transition to net zero. The current energy company obligation includes incentives to deliver measures such as low-carbon heating to off-gas-grid rural homes in Scotland and Wales. Phase 2 of the home upgrade grant provides energy efficiency upgrades and low-carbon heating measures to low-income households living in the worst performing off-gas-grid homes in England in order to tackle fuel poverty.

We recognise that renewable liquid fuels could play a role in decarbonising heat off the gas grid. We therefore expect to prioritise the use of renewable liquid fuels for the small number of homes that are not readily suitable for electrification, as these have the fewest options to decarbonise through alternative low-carbon technologies. My noble friend Lord Berkeley suggested a meeting on this; I am very happy to engage with him and, indeed, with the noble Lord, Lord Bruce.

Amendment 76, tabled by the noble Lord, Lord Offord, and Amendment 77, tabled by the noble Baroness, Lady Bloomfield, relate to sourcing materials for GBE projects from the domestic supply chain. Adding the proposed detail to the Bill would too narrowly restrict the company in carrying out its activities, halting the potential feasibility of projects where UK sourcing is not currently possible.

On jobs, I take the point made by the noble Lord, Lord Bruce, concerning the importance of the UK continental shelf and the need for an orderly transition. My daughter supported her career as a wireline engineer in the oil and gas industry working out of Aberdeen, and I am well aware of the importance of the sector, what it has contributed to the UK economy and the skills and dedication of the people working there. As we have described, we want an orderly and just transition.

GB Energy will be committed to helping drive the growth of supply chains in the UK to accelerate the deployment of key UK energy projects. It is important, however, that we comply with the international trading rules that the UK is bound by, such as prohibitions on requiring local content contained under various agreements under the WTO.

Amendment 80, in the name of the noble Lord, Lord Petitgas, requires the Secretary

[Lord Alton of Liverpool (CB)]

I am sorry to interrupt the noble Lord, but I wonder if I can press him further on the issue of jobs and the impact on our own economy when countries run, in their own jurisdictions, the kind of slave labour arrangements that I and others referred to earlier. He will have seen the information about the loss of electric vehicle-related jobs because of the flooding of the market—we do not have any tariffs on those vehicles, whereas every other G7 country does. He will know that, in the last quarter, the trade deficit with China was some £32 billion but at no time since 1995 has there ever been surplus on our side of the equation. How can we justify, therefore, pouring more money into the economy of a country that relies on slave labour? It cannot just be left to companies, even Great British Energy, to identify whether a country is using slave labour or not; surely that is a matter for the Government, too.

[Lord Hunt of Kings Heath (Lab)]

The noble Lord raises matters of great geopolitical importance and importance to the UK’s economy. He will have seen that my right honourable friend the Chancellor has been in China in the last few days, seeking to engage that country in relation to economic co-operation and development, within appropriate security safeguards. We want to see jobs in the energy sector developed as much as possible in the United Kingdom, but equally, we are operating in a global economy. For very good reasons, we are concerned about the introduction of tariffs which may inhibit international trade, and we must also be mindful of the economic value-for-money issues that clearly have to come into play in this area.

Let me return to the Bill and what is appropriate for us to include in it. We believe that this issue is a matter for GBE, working within the constraints set through the statement of priorities and through Clause 3, and also in relation to the further work we are going to do. We have mentioned solar, and noble Lords are right that much of the raw material for solar panels comes from China, although it is British companies working in the United Kingdom that benefit more from the value of the work on solar installations.

Turning to the amendment of the noble Lord, Lord Petitgas, as a publicly owned company, GBE will be held accountable through regular reporting to my department. It will be subject to HM Treasury’s value-for-money guidelines, its investments will be subject to safeguards and risk assessments, and it will invest in the private sector to share risk and reward.

On green taxonomy, a decision about how a potential UK green taxonomy could be used or applied has not yet been finalised. The Government have launched a consultation to gather views on the value of the case for a UK green taxonomy, and it will close on 6 February.

We need to come back to what Clause 6 is for as a whole. It is a backstop which one hopes would never have to be used; it is not a way to encourage the Secretary of State to micromanage a company that we very much want to be operationally independent.