Renewables Obligation and Electricity Capacity (Amendment) (British Industrial Competitiveness Scheme Excluded Electricity) Regulations 2026

Debate between Lord Moynihan and Lord Blencathra

Wednesday 28th October 2026 Grand Committee

[Lord Blencathra (Con)]

I thank my noble friend for his intervention. I am disappointed that he only agreed with nearly every word I said, not every word, but he is absolutely right. I merely cited farming as one example of an area which is suffering because of high energy costs and reducing our capacity to produce fertiliser. In order for the scheme to successfully remove costs and benefit these industries, it must provide help to firms large and small, wherever they fall in the supply chain.

There is scepticism as to whether the policy achieves that. Specifically, the fact that the BICS will be available only to eligible businesses that use at least 33 megawatts per hour of grid-supplied electricity a year raises concerns. Small businesses—firms with under 50 employees—use up to 25 megawatt hours annually. For microbusinesses, that number is only 15 megawatt hours. The Government acknowledge that the renewable obligation certificates and capacity market costs asymmetrically damage British companies’ competitiveness, but it is the smaller firms, which do not necessarily have the same margins to deal with that cost, that are relatively the most affected by these policies. There is a chance that the scheme misses these businesses entirely. Surely the Government should be focusing on protecting them and promoting their competitiveness as a priority. Will the Minister commit to keeping these smaller firms, which are just as important to supply chains, under review as well?

I want to make a more general point. Implicit in this expanded scheme is the Government’s recognition that certain net-zero policies are economically damaging. They recognise that we are lagging behind when it comes to global competitiveness, and that much of the costs are the result of the policy they themselves support. The impact assessment calls the BICS

“part of the Government’s package for reindustrialisation.”

I have criticised that already, but it is tantamount to acknowledging that reindustrialisation is impossible, or at least markedly difficult, when policy costs are piled on industry.

[Lord Moynihan (Con)]

On that subject, I declare my interest as chairman of Amey, Acteon and Buckthorn. Does my noble friend not at least recognise the importance of the point made by the noble Earl, Lord Russell, who talked about the cost of energy? Was he not as surprised as I was on that subject that, in the OBR report today, on page 93, there is the sentence:

“The projection includes production from currently producing fields (including Jackdaw), and the NSTA’s estimate of production from development of new fields, which includes Rosebank”?


Rosebank is specifically stated. Does my noble friend have the remotest idea why something of such magnitude was not announced today by the Chancellor himself?

[Lord Blencathra (Con)]

My noble friend makes a very good point. We seem to be getting a lot of duplicitous statements and comments about Rosebank. We have one of the biggest oil and gas fields in our history, sitting out there off the Shetland Islands. We should be using it. There is no moral sense in trying to import gas from around the world and not using our own supplies. It does not add any more to global warming whatever. We should be using it and I look forward soon to hearing what the Government’s decision on Rosebank will be. If we can announce a huge oilfield in the Falkland Islands, why is it morally wrong to announce an oilfield in our own territorial waters? No doubt one day we might be importing our own oil from the Falkland Islands.

The impact assessment, as I said, claims that it is part of the Government’s package for reindustrialisation. I am concerned that it is not reindustrialisation; it continues to stop it and it continues to be deindustrialisation. If these facts were recognised by the Government, why stop at businesses that fulfil a strategic criterion? Surely, competitiveness is a general good. Would not every business benefit from lower costs or higher efficiency? Would it not be more prudent, instead of arbitrarily determining which manufacturing businesses are worthy of being competitive, for the Government to allow free and fair competition for them all?

Given that the Government acknowledge that carbon taxes and subsidies add costs and reduce competitiveness, this instrument represents an opportunity for them to begin the process of removing them. They need not stop at renewables obligation contracts. The ETS, CBAM and the carbon price support all represent additional costs and a choice.

The United Kingdom represents 0.8% of world CO₂ emissions. China produces 33%, USA 15%, India 8% and Russia 5%. So it is economic madness to sacrifice British industry and consumers on the altar of saving the world when the British contribution makes no difference whatever. The Conservative Party recognised this early on in this Parliament. It seems that the Government are now coming around. I hope they will now act speedily.