Great British Energy Bill

Lord Offord of Garvel Excerpts

2nd reading
Monday 18th November 2024 Lords Chamber

[Lord Offord of Garvel (Con)]

My Lords, I begin by welcoming the noble Baroness, Lady Beckett, and the noble Lord, Lord Mackinlay of Richborough, to this House and congratulate them on two magnificent maiden speeches.

We are debating a Bill that grants the Secretary of State sweeping powers to establish Great British Energy, a publicly owned energy company, with an £8.3 billion allocation of taxpayers’ money. With the Government unilaterally accelerating the target for zero-carbon electricity to 2030, it is obvious that the Bill is ideologically fuelled, with energy analysts such as LCP Delta stating that there is “zero chance” that the Government will meet that 2030 goal.

The substance of the Bill is equally concerning. Despite its far-reaching aims, the Bill is notably lacking in detail, as my noble friend Lord Lilley pointed out. There is no clear business plan, no accountability framework and no specific road map for how the Government intend to deliver on these unrealistic promises. In short, the Bill seems more about political grandstanding at COP 29 than about practical solutions.

During the last election, the Government made countless promises to working people that this Bill would reduce their energy costs. Yet, what we see today is a Bill that is short on details and long on empty promises. When the Government had the chance to enshrine this pledge in law, they voted in the other place against a Conservative amendment that would have made the £300 reduction a legal priority for GBE. Why, then, have the Government refused to commit to the very promise they made to the British public? I join my noble friend Lady Bloomfield in asking the Minister to give guidance on how much energy bills are expected to fall by 2030: maybe not by £300, but can we please have at least an indication of how that will be fulfilled?

Labour’s plan to create 650,000 green jobs across the country by 2030 as part of the green prosperity plan also need to be substantiated. Again, there is no mention of this in the Explanatory Notes or the founding statement. While they made this bold claim again in their manifesto, they have failed to provide any concrete details on how this would be achieved, leaving many workers concerned about their future. There is a genuine fear that without proper planning and support, individuals could find themselves jobless or unable to transition their skills to new industries.

While this Government claim to be the party for working people, they have failed to anticipate where the jobs for these working people will come from in the Great British Energy Bill. As mentioned by my noble friend Lady Bloomfield, 200,000 jobs already exist in the North Sea oil and gas sector. We know that 40,000 of those are at risk under the current plans, so again, my question to the Minister is quite simple: what is the plan to deliver on these pledges on jobs, when jobs are already being lost in the existing oil and gas sector?

The Government’s 2030 target to decarbonise the UK electricity grid sounds bold but in reality, the National Energy System Operator has called it immensely challenging. Is not this clean energy target really about infrastructure? NESO’s latest report lays bare the scale of the hurdles we face. To come even close to hitting this target, we need to invest £40 billion a year, every year, to fund grid upgrades, renewable generation and storage capacity. When you start looking at the facts, you see that this should not be reduced to a political slogan. It is a monumental challenge that requires far more than the details outlined in the Great British Energy Bill.

We are told by energy players that, in order to meet this 2030 target, we need to overhaul the national grid. Again, I ask the Minister: where is the national grid even mentioned in this Bill? If the Government are truly serious about addressing the energy crisis, why is the grid, the very backbone of our energy system, not even part of the conversation? Where are the clear policies on expanding grid infrastructure? Where is the commitment to solving the grid bottleneck that hampers renewable energy connection at the moment? Why are we talking about targets without addressing the structural issues that will make or break any decarbonisation effort?

I must agree with the noble Lord, Lord Rooker, who said last week in our energy debate that:

“The UK is world class in setting targets”,—[Official Report, 14/11/24; col. 1954.]


but less so at delivering actions. How can we decarbonise when the grid cannot even handle today’s demand, let alone the future of renewable energy? If we are serious about the 2030 target, then surely the grid must be at the heart of this Bill, not an afterthought.

Let us consider the Bill’s relationship with the UK Infrastructure Bank, which was highlighted by a number of noble Lords, particularly the noble Lord, Lord Vaux. The bank was launched with a £22 billion fund and comes and with a clear and structured accountability and transparency framework. It is governed by rules that ensure that taxpayers’ money is used efficiently, and it is subject to rigorous annual reporting, providing the public with the necessary details on its performance and investments. If we are to create another institution with overlapping responsibilities, it is fair to ask: where is the real added value here?

In fact, Great British Energy hands over far greater powers to the Secretary of State. As highlighted by my noble friend Lady Noakes, £8.3 billion of taxpayers’ money will be handed over with too much discretion and without the proper frameworks to hold this body to account. How can we trust that the British taxpayer will get value for money if we are not putting in place on day one the necessary safeguards and reporting structures to ensure transparency and proper governance?

We have had the benefit of two such debates before today’s Second Reading, and in this time a number of themes have been discussed in your Lordships’ House. As my noble friend Lord Ashcombe pointed out, there is a consensus that at the moment, our energy system is run approximately 75% hydrocarbon and 25% non-hydrocarbon. We need to flip that on its head and make it 75% non-hydrocarbon, 25% hydrocarbon, but that does not mean zero hydrocarbon, and it does mean that we need more room for nuclear power.

In fact, in the debate last week, the noble Lord, Lord Browne of Madingley, said that we have a real good chance in the UK to meet these targets because of our pre-eminent position in science and technology. Therefore, when we hear the warnings of the industry that we are going too fast and the sudden acceleration is simply unachievable, I think there is a red warning flag that must be heeded.

We understand that, if it is £300 per household and there are almost 28 million households, that comes to £8 billion and we know that renewables cannot deliver at a return of £8 billion on top of £8 billion in five years, because renewables returns come over 20 years and not five years. So why are unreasonable numbers being put out into the public domain? Is it actually a good use of taxpayers’ money to put £8 billion into renewables? For example, there is a target of 100 offshore wind farms, with £35 billion committed and another £60 billion in the pipeline. Rather than being crowded in, the private sector has already decided this is a good area to invest in. Would the money not be better targeted, as was said, at the plumbing and the national grid? As we said last week, it was designed to send energy from Scunthorpe to Stornoway and is now sending energy from Stornoway to Scunthorpe.

These questions have been raised by a number of noble Lords across the House. We also have the issue of the North Sea oil and gas being shut down too quickly. There will be a real knock-on effect on our net zero by 2050 target. At the moment, more than half the renewable investment comes from hydrocarbon companies reinvesting their profits, and the skills of the people required to do the transition exist in the oil and gas sector.

Having had these two debates and the Second Reading, we have given this Bill a really good airing, and there are some warnings for the Government in accelerating this. We cannot be in a situation where the Government put forward bold targets and empty promises: we must have details. It is not reasonable to take on trust that £8 billion of taxpayers’ money will be well spent; we need some transparency and accountability in the Bill to ensure the funds are used effectively.

In conclusion, we have heard grand pledges on lower energy bills, but I think it is only fair that the Government back them up with some concrete actions, or at least some commitments. Again, with the promise of green jobs, we have yet to see any plans as to how those jobs are going to be protected. There are already workers facing job insecurity in the transition towards a low-carbon economy. As we have discussed, despite all the talk of decarbonisation, we still have not addressed the major issue of infrastructure.

So I ask, in conclusion, how can we trust the Government’s ambitions when the foundations for success are not set out more clearly in the Bill? Where is the plan for infrastructure? Where is the commitment to accountability? Where are the protections for the British taxpayer? And, most important of all, how will Great British Energy result in cheaper energy for UK consumers?

Great British Energy Bill

Lord Offord of Garvel Excerpts

Committee stage
Tuesday 3rd December 2024 Lords Chamber

Moved by

[Lord Offord of Garvel]

1: Clause 1, page 1, line 2, leave out “company” and insert “subsidiary of the National Wealth Fund”
Member's explanatory statement
This would probe into the relationship between Great British Energy and the National Wealth Fund - formerly the UK Infrastructure Bank.

[Lord Offord of Garvel (Con)]

My Lords, I am grateful to all noble Lords who are present for this important debate, which deals with an essential topic for the future of our nation: our energy production, security and ownership. I will also speak to Amendments 3 and 5 in my name.

Amendment 1 seeks to probe into the relationship between Great British Energy and the National Wealth Fund, which was formerly known as the UK Infra- structure Bank. Amendment 3 seeks to probe into the fact that Great British Energy may be designated a company only if it is wholly owned by the Crown. Amendment 5 would specify that Great British Energy would be owned by the Secretary of State for Energy Security and Net Zero.

We cannot discuss this Bill without giving due consideration to Great British Energy’s relationship with the UK Infrastructure Bank. We have not seen an explanation of how this body is different from the UK Infrastructure Bank, which was set up to do the exact same thing that Great British Energy claims it will do. In fact, Great British Energy is almost a duplicate of the UK Infrastructure Bank, which was established to provide loans, equity and guarantees for infrastructure to tackle climate change, funded by £22 billion of taxpayers’ money. Great British Energy seeks to do something extremely similar, or so it claims, but the Bill gives far greater powers to the Secretary of State. I must ask why this is and why taxpayers should be burdened twice.

The UK Infrastructure Bank Bill had important accountability and reporting measures which have been removed from this Bill. It had a clear and structured framework for accountability and transparency. It was governed by rules to ensure that taxpayers’ money was used efficiently and was subject to rigorous annual reporting, providing the public with the necessary details on its investments and performance.

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[Lord Hunt of Kings Heath (Lab)]

The noble Lord is referring to a power of direction. We are coming on to relevant amendments later in the Bill, but let me make it clear that this power is often contained in legislation, although we believe it will be used very rarely indeed. I certainly would not expect it to be used. I think the noble Lord is suggesting that the Secretary of State will attempt to micromanage Great British Energy through the power of direction. I simply do not believe that this will happen under any Secretary of State.

I listened to what the noble Lord, Lord Vaux, said about duplication. At the beginning, we think it is sensible for GBE to use the National Wealth Fund’s expertise. He suggested that this is duplication; I think it is a pragmatic, sensible approach. We have certain expertise within the National Wealth Fund that can help as we establish GBE, but they are complementary functions. Having listened to the debate, I can assure noble Lords that my department will work closely with His Majesty’s Treasury to provide clarity to the market on how the two institutions will complement each other, and set out how this relationship will evolve in time.

I turn to Amendments 3, 4, 5, 6 and 7, tabled by the noble Lords, Lord Offord, Lord Vaux and Lord Cameron. There was an interesting discussion about whether GBE could or should be allowed to raise equity through the sale of shares while it remained majority-owned by the Crown. Amendment 3 proposes enabling external equity ownership of Great British Energy without its losing its status as a Crown-owned company. Similarly, Amendments 4, 6 and 7 specify enabling third-party ownership of up to 25% of the shares in Great British Energy without its losing its status as a Crown-owned company. Amendment 5 seeks to specify that Great British Energy is owned by the Secretary of State, rather than by the Crown.

We do not think that it is necessary for Great British Energy to sell its own shares to bring in external equity funding, or any funding, for its projects. In the case of the example which the noble Lord, Lord Cameron, gave, it would, though, be possible for Great British Energy to encourage private sector investment into the scheme to which he referred, or to co-invest with external partners, each taking an equity stake in a project that Great British Energy wished to support. I understand that the model has been used successfully by similar bodies, such as the former Green Investment Bank.

Clause 4 enables the Secretary of State to provide financial assistance to Great British Energy. This is so it can take action to meet its objectives. To be clear, our intention is for Great British Energy to become financially self-sufficient in the long term. It will invest in projects that expect a return on investments, but it would be prudent to ensure that the Secretary of State has the power to provide further financial support, if required.

Just as private sector companies would rely on the financial strength of their corporate group to raise funds, that could be the case for providing GBE with further financial support for specific projects in the future. However, we believe that any such financial assistance should be provided by the Secretary of State and, as such, be subject to the usual governance and control principles applicable to public sector bodies, such as His Majesty’s Treasury’s Managing Public Money.

It is also unnecessary to specify that Great British Energy is owned by the Secretary of State rather than the Crown. The Bill simply follows normal legislative practice in its drafting. For instance, Section 317 of the Energy Act 2023, which the Government of the noble Lord, Lord Offord, took through, expresses the ownership requirement for Great British Nuclear in the same way. Other legislation, including Section 6 of the Freedom of Information Act 2000, uses the same formulation. Clause 1(6) of the Bill explains that

“wholly owned by the Crown”

means that each share is held by a Minister of the Crown, which includes the Secretary of State, or a company wholly owned by the Crown, or a nominee of either of those categories.

We also think that it is entirely appropriate for the Secretary of State to be the sole shareholder in Great British Energy. I very much agree with the noble Baroness, Lady Noakes, on this. Introducing minority third party ownership, whether held by one minority shareholder or several, would add unnecessary complexity to its governance. A shareholder agreement or agreements would need to be put in place. They would need to cover elements relating to the control of Great British Energy, setting out which matters required approval of a simple majority of shareholders and which might require unanimous consent. For an organisation such as Great British Energy, playing such a key part in our mission to deploy clean energy—I take note of what noble Lords have said about parliamentary accountability—is it not surely right that Ministers both are accountable for their actions and can exercise full shareholder rights?

This has been an interesting debate. I am aware of noble Lords’ issues around the role of Great British Energy and the National Wealth Fund and its ability to draw in private sector investments, but we think—and it was a manifesto commitment—that this is a very important body that should stand alone. We are grateful that the National Wealth Fund is able to provide some support at the moment, but we think that this is the right way forward.

[Lord Offord of Garvel (Con)]

I thank noble Lords for their insightful contributions on the designation of a company as Great British Energy and the ownership of such a company. I welcome the amendments from the noble Lords, Lord Vaux and Lord Cameron—Amendments 4, 6 and 7. They were designed to probe the benefits of having flexibility to allow minority external equity ownership of Great British Energy. However, I cannot disagree with anything that the noble Baroness, Lady Noakes, said about introducing private equity into what is, in effect, government-underwritten risk, which means that it really should be debt.

The fact we are debating this indicates that there is no clarity about the substance and purpose of the Bill or about the exact ownership of Great British Energy. Given that we are debating £8.3 billion of taxpayers’ money, and that there is no limitation on how that financial assistance can be given or structured, we have a concern that will continue through Committee.

The experience of the House was brought into the debate by the noble Lords, Lord Howell and Lord Hamilton, who looked back over previous generations to instances of how overarching powers given to Secretaries of State can be used if not abused, sometimes with the best of intentions. Again, it speaks to how there could be more clarity in the Bill about how those powers will be allocated. We believe that accounting and reporting measures are absent from the Bill and that we need further detail and clarity on the priorities and plans of Great British Energy. I expect that we will return to those matters on Report but, in the meantime, I beg leave to withdraw the amendment.

Amendment 1 withdrawn.

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[Lord Murray of Blidworth (Con)]

My Lords, I just wish to make one submission on this amendment, in support of my noble friend Lord Frost. Clause 1(1A)(a), proposed by the amendment, contains the phrase

“reducing household energy costs in a sustainable way”.

The great merit of this is that “sustainable” has two meanings in this context: first, that the low prices are sustained over a long period, which is clearly a good thing; and secondly, that they are sustainable in the sense that they are good for the environment. It is a very well-drafted purpose clause and I commend it to the Committee.

[Lord Offord of Garvel (Con)]

I rise to speak to Amendment 2, in the name of my noble friend Lord Frost and my own. This amendment brings critical clarity to the purposes of the Great British Energy Bill. It clearly outlines the two primary objectives the Secretary of State must pursue when designating a company as Great British Energy: first, reducing household energy costs in a sustainable manner; and secondly, promoting the UK’s energy security. I should add that I would not in any way quibble with my noble friend Lady Noakes’s amendments to both those provisions.

These objectives reflect the values of economic responsibility, national sovereignty and long-term sustainability. In the face of rising energy prices and global uncertainty, ensuring that energy remains affordable for British households and businesses is paramount. Reducing costs while maintaining a focus on sustainability means we can protect consumers without compromising the environment. Moreover, energy security has never been more important. The UK’s reliance on foreign energy sources leaves us vulnerable to geopolitical instability—today we still import 40% of our energy. By emphasising energy security in this amendment, we are prioritising the resilience of our national energy infrastructure. A secure energy supply is not just a matter of economic policy; it is a matter of national security.

This amendment provides the framework for a holistic energy strategy that benefits consumers, supports industry and strengthens our nation. As Conservatives, we on these Benches believe that the Government’s role is not to overregulate or restrict but to create the conditions for growth and sustainability. Therefore, Great British Energy must not be a mere title, but an institution, if at all, that advances these vital objectives of lowering energy costs and ensuring energy independence for future generations.

It is imperative that we recognise the significance of Amendment 2, not only in the context of the Bill but as a cornerstone of sound legislative practice. Providing a clear statement of purpose ensures that any future actions taken under this Bill align with the objectives of affordability and energy security. Without such a guiding clause, we risk leaving the interpretation of the company’s aims open to ambiguity or to shifting priorities over time. Does the Minister not agree that a purpose clause of this nature would greatly improve the clarity of the legislation? If he does not agree to support this clause, could he outline on what grounds that decision has been taken?

This amendment would also serve to reassure the British public and industry stakeholders that Great British Energy will not deviate into activities that may undermine these core objectives. We have seen in the past how well-meaning initiatives can become overly bureaucratic or lose sight of their founding principles. A purpose clause acts as a safeguard, compelling policymakers and administrators to remain true to the Bill’s intent.

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[Lord Howell of Guildford (Con)]

My Lords, I support my noble friend Lady Noakes. We cannot let this clause float by with a nod of the head, because it omits vital developments—as our debates have done—in the whole pattern of energy supply and energy-environmental compatibility across the planet. They are developing fast in other countries but get no mention here, confirming that this piece of legislation, while sounding fine and fitting into the jigsaw of the past, is already out of date and being bypassed by major developments in the global politics of energy and the environment.

I will give the Committee two examples. The first is zonality. The thinking in many circles, certainly in America and increasingly here, is that energy security, which we discussed in relation to the amendment from the noble Lord, Lord Frost, will have to be considered in zonal rather than national terms; in other words, national, centralised organisations, even National Grid, do not fit into the pattern of a future that will deliver security, clean energy and affordability. If one applies a zonal lens to this scene—I listened to senior officials from the National Energy System Operator talking strongly about this the other night—many of the arguments we are having around Clause 1 fall to bits.

Secondly, US corporations, big corporations in other countries and some in this country are beginning to recognise that grid thinking and the centralised patterns of energy delivery compatible with net zero and our other objectives are never going to happen. We will have increased climate violence and it is too late to prevent the growth in carbon emissions which is going on now and continuing faster than ever. Methane, which is 80 times as lethal as carbon dioxide, is also growing very fast, according to the latest figures. Despite all our efforts, climate violence is coming and many feel that it is here already. Big corporations in America and some here are losing faith in the capacity of our system—a transformed, completely renovated grid system of transmission of power and a necessary pattern of generation which is reliable and does not stop when the wind stops—to supply their needs.

Such corporations are investing, or planning to invest, and finding out from National Grid that they have to wait 15 years to get any electricity, to adjust from gas to electricity, or whatever it is, and, in doing so, realising that they are on a futile course unless they can get their own assured, dedicated source of electricity. That is why we are reading in the papers about ideas for converting old coal stations to mini-nuclear power stations, and other technologies. All these things are racing ahead but none is mentioned in Clause 2. It is, in fact, if we are frank with ourselves, a completely unrelated and irrelevant clause.

Therefore, one’s inclination is to shrug one’s shoulders. I hope that when we come back to these things in detail at a later stage, we will have a rather more focused image of what is really happening in the world of energy supply, carbon dioxide and methane growth, climate violence, or anything else of which there is not much of a sign in this clause.

[Lord Offord of Garvel (Con)]

My Lords, I rise to speak in favour of my noble friend Lady Noakes’s stand part notice. This clause deals with the Crown status—or more accurately, the lack of Crown status—of Great British Energy, and it is imperative that we probe the Government’s reasoning and consider the implications of this approach.

Clause 2 states clearly:

“Great British Energy is not to be regarded as a servant or agent of the Crown or as enjoying any status, immunity or privilege of the Crown”.


Additionally, it specifies that the property of Great British Energy

“is not to be regarded as property of, or property held on behalf of, the Crown”.

Let us pause and consider what this means. Great British Energy is envisaged as a significant player in the energy sector, with the Government making it central to our net-zero ambitions and national energy security. It may well handle substantial public funds, represent the UK’s interests domestically and internationally, and carry out critical projects on behalf of the Government. Yet the Government have deliberately chosen to sever this body from the legal, financial and symbolic framework provided by Crown status.

I pose the question: why? Why has this decision been taken, and what are the potential consequences? There are three areas of concern I wish to highlight; the first is accountability and oversight. Without Crown status, Great British Energy sits outside the constitutional framework that traditionally governs Crown bodies. Will this weaken Parliament’s ability to scrutinise its actions? Will the Comptroller and Auditor-General have clear access to audit its books? In an age of heightened public interest in corporate governance and transparency, these questions should be considered.

Secondly, on legal implications, by denying Crown status, Great British Energy forfeits the legal immunities and privileges that might ordinarily protect a public body in its dealings. Does this leave it more vulnerable to litigation? Could it become ensnared in disputes that detract from its primary mission?

Thirdly, this is a public body intended to work for the public good. Denying it Crown status might send a message—rightly or wrongly—that it is not fully embedded within the public sector, raising questions about its mission and accountability to the public interest. I do not suggest that Crown status is a necessity in all circumstances. Indeed, there may be good reasons for taking this route, such as granting Great British Energy greater operational flexibility or shielding the Government from certain liabilities—but these reasons have not been clearly articulated by the Government, and they deserve to be.

As we face unprecedented challenges in energy policy, the creation of Great British Energy is a momentous step. Its structure and status must instil public confidence, ensure robust accountability, and align seamlessly with the broader aims of our national strategy. Clause 2, as it stands, leaves too many unanswered questions.

[Lord Hunt of Kings Heath (Lab)]

My Lords, we think Clause 2 is very important. It ensures that Great British Energy will serve the public as an independent company and operate in the same way as other UK companies. Before I come on to the main body of the argument, I say to the noble Lord, Lord Howell, that he had some interesting points to make about the role of advanced nuclear reactors tied into industrial processes and data centres. We are watching very carefully what is happening in the US and we are in discussion with some of the companies themselves. I very much take his point about that.

The clause ensures that Great British Energy will not have any special status, immunity or privilege normally associated with the Crown, nor will its property be seen as the property of the Crown. It will also be subject to the same legal requirements as other companies. This is in line with the vision we have had for Great British Energy from the beginning: that it should be an operationally independent and agile market player, and we want to ensure it remains that way. If we were to leave out the clause, either Great British Energy would be regarded as a servant or agent of the Crown and have the immunity or privilege associated with that status; or, at least, there would be ambiguity as to whether it has that status.

I understand that the courts in recent years have been faced with questions about whether certain persons or bodies had Crown immunity, and the issue was not clear in the legislation—for example, the Commissioners of Customs and Excise, and the Commissioners of Prisons. The clause avoids that ambiguity and the possibility of any litigation arising regarding Great British Energy’s status. Examples of how this might arise in the context of Great British Energy, are, first, that Crown bodies are generally not covered by the requirements of the Employers’ Liability (Compulsory Insurance) Act 1969; and, secondly, that parts of the Health and Safety at Work etc. Act 1974 do not bind the Crown. We would not want Great British Energy to be exempt from that legislation or for it to be unclear whether it is bound by such legislation.

As I mentioned earlier in response to the noble Baroness, Lady Noakes, we expect Great British Energy and the National Wealth Fund to work well together. It is while Great British Energy is being established that it will utilise the National Wealth Fund’s existing expertise, which I think has been widely acknowledged. This is work in progress, and I cannot say very much more than that at the moment. We are not making it up as we are going along. There are earnest discussions between ourselves, His Majesty’s Treasury and Jürgen Maier, the chair of Great British Energy, and we will work closely with His Majesty’s Treasury to provide clarity to the market on how the two institutions will complement each other and how their relationship will evolve over time.

I also acknowledge that the partnership with the Crown Estate will be hugely valuable. On the question of the Crown Estate’s own position, I will have to seek further advice and write to the noble Baroness, Lady Noakes, because I do not have the answer at the moment.

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[Baroness Hayman (CB)]

My Lords, I rise very briefly, first to declare my interest and secondly to comment on some of the amendments in this group.

I have sat in the Minister’s chair, so I understand that he will not want to add a long list of exclusions or inclusions to the objects of the Bill. Even with that in mind, I hope that he will have listened carefully to the issues that have been raised. They are important and there is a theme to them.

I support the comments of the noble Baroness, Lady Boycott. Two issues have come out of the debate for me. The case for energy efficiency, insulation and heat pumps was made very powerfully by the noble Baroness, Lady Grender, and the noble Earl, Lord Russell. It is important that GB Energy looks to how it can provide a long-term, consistent environment for the policies that each Government pick up and put down. Industry, which has to be a key partner, finds this so frustrating and retrenches from investing in the skills training and expansion that are needed if we are effectively to retrofit the millions of homes in this country.

As we said in the debate on a Question earlier today, this is important not only for carbon reduction. We saw what happened from 2014: emissions from buildings fell by two-thirds after the change in policy. It is therefore really important that someone is boosting this and making sure that it is there for the long term to provide that stable environment. GBE will be in a position to do that, particularly if it is tied in with what we discussed in the Question earlier about the planning framework, again providing a clear and consistent road map for those who will need to invest in this.

The other thing that came out of the debate was that we have to be innovative, look to our strengths and be open-minded about sources of renewable energy. We have to understand that some of those sums that we had in our heads 20 years ago, about the cost of wave power, tidal power or whatever, have changed. They have changed financially but also in other dimensions, such as energy security and our priorities in energy. It is important that GBE is in there supporting those things.

I absolutely support Amendment 17. It may not be for the Bill but, as part of the innovative thinking we need from GBE, we need to look at such things as financial instruments. When we know that solar panels or heat pumps will pay off over the years but people are not going forward with them simply because they cannot afford the capital expenditure, it is important that we look not only at upping the government grant—helpful though that is in some instances. Houses can have mortgages on them for 10, 20 or 30 years. The costs of that investment can be spread in other and innovative ways, so I hope that the Minister can respond supportively to that amendment.

[Lord Offord of Garvel (Con)]

My Lords, I thank my noble friend Lord Naseby for introducing his thoughtful and technical amendments, which no doubt would improve the quality of the Bill should they pass. I also thank all noble Lords who have spoken on this group. Each amendment contributes meaningfully to the Bill’s ultimate aim by ensuring that governance reflects accountability, fairness and long-term sustainability.

I will limit my remarks to Amendments 8, 9, 12 and 13. Amendment 8 proposes the addition of “investing in” alongside “encouraging”. This is quite important, because it seeks a balance between fostering enterprise and ensuring strategic government investment to safeguard our national energy. We want a partnership between government and the private sector. By explicitly including “investing in”, the amendment aligns with our commitment to a dynamic and sustainable energy sector.

Amendment 9, by adding “one or more of”, would bring clarity and flexibility to the Government’s strategic objectives in advancing energy policies. It would ensure that the Government could prioritise specific energy initiatives based on strategic needs without being overburdened by one limiting obligation. It reflects the core principles of pragmatism and efficiency, ensuring that resources can be allocated where they can deliver the greatest impact.

We know that energy security and innovation in this area—referred to by my noble friend Lord Howell as bigger perhaps than the Industrial Revolution—require adaptability. Whether we are investing in offshore wind, nuclear power or emerging technologies, the amendment would allow for a tailored approach that maximised value for taxpayers’ money and strengthened our energy independence. I urge colleagues to support it to make sure that we have smart, effective and flexible governance in the Bill.

My noble friend Lord Naseby’s Amendment 12 is again quite technical. It seeks to insert the phrase “directly or indirectly” into Clause 3, which would again enhance the Bill by acknowledging the interconnected nature of emissions reductions and energy initiatives. This addition would ensure a pragmatic approach to addressing climate goals. Emissions reductions often involve complex supply chains and secondary impacts. Recognising these indirect contributions reflects our understanding of the broader economic and technological dynamics that drive innovation and decarbonisation. For example, investments in nuclear power or advanced grid infrastructure may not lower emissions immediately but they create the conditions for sustainable reductions in the long term, towards 2050 net zero. The amendment therefore provides the flexibility needed to pursue bold initiatives while holding true to the principle of cost-effectiveness for taxpayers. By adopting it, we would make the Bill more robust, practical and reflective of real-world energy systems. I urge my colleagues to support it.

Finally, my noble friend Lord Naseby’s Amendment 13 proposes the substitution of the word “produced” with “derived” in Clause 3. Again, this is a technical and seemingly small change, but it holds significant importance for our energy policy. “Derived” more accurately captures the diverse and evolving sources of energy in our transition to a low-carbon future. Energy comes increasingly from various integrated systems, including renewable sources, nuclear, tidal—as we have heard in great detail—and hydrogen. The term “produced” can be limiting, whereas “derived” acknowledges the broader, more dynamic approach needed to secure our energy future. The amendment provides the flexibility to encompass a wide range of energy sources and technologies, ensuring that our energy policies remain adaptable and forward thinking. It should reflect our commitment not only to reduce emissions but to foster innovation and maintain energy security in the face of global challenges.

[Lord Hunt of Kings Heath (Lab)]

My Lords, this was a very interesting group. It clearly refers to a range of technologies in which Great British Energy could invest. I should start by saying that we intend GBE to be operationally independent and it is not for us to rigidly define what it should do or in which technologies it should invest.

The noble Baroness, Lady Hayman, of course anticipated my list argument because she has used it herself a number of times, but I take her point about ensuring long-term certainty and a stable environment for some of these crucial sectors. I recognise that GBE has great potential so to do, particularly in sectors where investment from the private sector may initially be difficult. I also take her point about how this has to be aligned with planning reform, enhanced grid connections and infrastructure.

Amendments 8, 9, 12, 13, 14, 23, 31 and 32, in essence, relate to technologies specific to GBE’s objects in Clause 3. Amendment 23 from the noble Earl, Lord Russell, would prevent Great British Energy being involved in CCUS projects, whereas the amendments from the noble Lord, Lord Naseby, would ensure that both carbon capture and storage and hydrogen fell within the scope of the Bill. The Government view both hydrogen and CCUS as vital to our drive towards net zero and to ensuring a just transition for industries based in the North Sea.

Great British Energy Bill

Lord Offord of Garvel Excerpts

Committee stage
Tuesday 3rd December 2024 Lords Chamber

Moved by

[Lord Offord of Garvel]

21: Clause 3, page 2, line 18 at end insert—
“(e) the production of nuclear energy.”Member’s explanatory statement
This would amend Great British Energy’s objects to include the production of nuclear energy.

[Lord Offord of Garvel (Con)]

My Lords, Amendment 21 is in my name. The UK led the world, becoming the first country to split the atom. This was followed in 1956 by the world’s first nuclear programme and a nuclear power station at Calder Hall—Windscale. At its peak in the 1990s, the UK generated approximately 13 gigawatts of power from nuclear energy, but this has slipped to around six gigawatts today. This story of decline stands in stark contrast to our modern understanding of nuclear power as the only current form of reliable, secure, low-carbon electricity which can be deployed at scale in the UK and therefore has to be considered a key component in the drive for net zero.

In January this year the previous Government published their policy paper, Civil Nuclear: Roadmap to 2050, and this was considered vital so that nuclear could offer the reliable, resilient and low-carbon power we need to reach net zero by 2050 and ensure our energy security so that we are never again dependent on the likes of Putin. Many other nations, including the USA and France, have endorsed a net-zero nuclear declaration which calls for a global tripling of nuclear energy by 2050.

Global energy is increasingly based around electricity. That means that the key to making energy systems clean is to turn the electricity sector from being the largest producer of CO₂ emissions into a low-carbon source that reduces fossil fuel emissions in areas such as transport, heating and industry. While renewables are expected to continue to lead, nuclear power can also play an important part, along with fossil fuels, using carbon capture, utilisation and storage, and indeed the removal of flaring, turning our hydrocarbon fields into the greenest in the world. Countries envisaging a future role for nuclear account for the bulk of global energy demand and CO₂ emissions, but to achieve a trajectory consistent with sustainability targets, including international climate goals, the expansion of clean electricity would need to be three times faster than at present. It would require 85% of global energy to come from clean sources by 2040, compared with just 36% today. Along with massive investments in efficiency and renewables, the trajectory would need an 80% increase in global nuclear power production by 2040.

We recognise the importance of renewables in achieving net-zero goals. However, going for a 100% renewable energy scenario represents a considerable gamble, especially given that grid balancing and storage technologies are still relatively nascent. One of the most pressing concerns is that solutions to renewables’ inherent variability fail to materialise quickly enough, and Britain either has to live with constraints and interruptions to its energy supply—an economic no-no—or pivot back towards an energy mix of yesteryear, reliant on fossil-fuelled power plants to provide a dependable baseload of electricity, albeit at a great environmental cost. If this were to transpire, the UK would seriously risk reneging on its 2050 net-zero target.

A lack of investment in existing and new nuclear plants in advanced economies would have implications for emissions, costs and energy security. In the case where no further investments are made in advanced economies to extend the operating lifetime of existing nuclear power plants or to develop new projects, nuclear power capacity will decline.

Nuclear power blends the best attribute of renewables, zero-carbon generation, with the best of fossil fuel power stations, dependability. According to the International Energy Agency, over the past 50 years, the use of nuclear power has reduced CO₂ emissions by over 60 gigatonnes —nearly two years-worth of global energy-related emissions.

The Prime Minister has made a vital promise to lower energy bills for households across the country—a commitment that resonates deeply with families facing financial pressures—but to ensure that this promise is more than just words, the Government must take decisive action to secure a diverse, competitive and sustainable energy supply. One critical way to achieve that is by expanding the production of nuclear energy.

Nuclear energy has the potential to significantly increase the UK’s energy supply. By introducing more nuclear power into the grid, we create a stable and abundant source of electricity. This additional capacity can ease pressure on prices by reducing reliance on imported fuels, particularly during global energy crises. With a greater supply of energy comes the opportunity for competition. Competition in the energy market pushes prices down for consumers, ensuring that families and businesses benefit from fairer, and lower, energy costs. Nuclear energy, as a reliable and low-cost source of power in the long term, plays a key role in fostering this competitive environment.

In respect of this amendment, nuclear energy is not just a technological option but a strategic necessity for the UK’s future. As the Government themselves have stated, nuclear energy

“will play an important role in helping the UK achieve energy security and clean power”.

To fulfil this vision, surely the Department for Energy Security and Net Zero must place nuclear energy at the core of its policies and strategies.

With 40% of the UK’s energy currently imported, this leaves us vulnerable to global market volatility and geopolitical tensions. Nuclear energy, with its long operational lifespan and domestic production potential, reduces our reliance on foreign energy sources. As electrification expands across sectors, from transport to heating, the demand for clean and reliable electricity will surge. Nuclear energy can meet this demand, ensuring a secure and steady energy supply for the long term. I beg to move.

[The Deputy Chairman of Committees (Baroness Morris of Bolton) (Con)]

My Lords, I must inform the House that if Amendment 21 is agreed to, I cannot call Amendment 24 for reasons of pre-emption.

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[Lord Hunt of Kings Heath (Lab)]

My Lords, I really cannot disagree with anything noble Lords have said in this debate, although I do not believe we need an amendment. I utterly agree that nuclear power is essential to the future; it provides the essential baseload; it is safe, secure and reliable. We have great opportunities in the UK to develop nuclear energy and the supply chain, even more than we have now. Obviously, Rolls-Royce, from a UK company point of view, has great potential.

We are keeping a very close eye on Hinkley Point C; the operational date that has been given for the first unit between 2029 and 2031 is very crucial. We are working very hard to get Sizewell C to final investment decision in the next few months. We have the SMR programme, and I agree with the noble Baroness, Lady Bloomfield, about the importance and value of the work of Great British Nuclear. We are regularly engaged with GBN, and I pay tribute to the great work that its chair and chief executive are doing.

I have met a number of companies who are very interested in developing AMRs. We have all seen the experience of companies such as Amazon, in the US, linking small modular reactors and advanced modular reactors with data centres; clearly, we wish the UK to be very much part of that. In terms of the UK’s growth agenda, if we combine military and civil nuclear defence requirements, we know that the nuclear skills task force has now estimated that we need about 40,000 extra people in the industry by 2030, and moving on with even more people by the 2040s. This is at once a challenge and a huge opportunity, because the careers that are offered in the nuclear industry are secure and well paid, and it is a very exciting industry to go into.

The noble Lord, Lord Offord, quoted figures from the IEA. Although we have seen a global downturn in nuclear energy, it is right to now talk about a renaissance. At international gatherings, it is pretty clear that there are countries coming back to nuclear, as we are, and other countries that wish to develop nuclear energy for the first time. This is very encouraging; we know that, in terms of popular opinion, there is a much more positive attitude among the public towards nuclear energy.

In saying I do not believe that the amendment is necessary, I do very much embrace the comments of the noble Lords and I can assure them that, in the department, we see nuclear energy as having an essential role for the future.

[Lord Offord of Garvel (Con)]

I thank the Minister for his clarity and unequivocal support of nuclear, and, indeed, for his reply to my noble friend Lord Howell of Guildford, who asked a specific question in relation to the GB Energy Bill. GB Energy can, if required, participate in nuclear, but the clear understanding is that discussions are ongoing with GB Nuclear. So I would encourage the Government to continue to clarify what that will look like and how it will be funded going forward.

[Lord Hunt of Kings Heath (Lab)]

If I may come back on that, the noble Lord may have seen that the energy Select Committee had a hearing at which the chair of Great British Energy and then the chair of Great British Nuclear gave evidence. It is clear from what they said that we will have no difficulty at all in establishing a co-operative relationship.

[Lord Offord of Garvel (Con)]

That is noted. I thank the Minister. I beg leave to withdraw the amendment.

[Lord Hamilton of Epsom (Con)]

Can I ask my noble friend why the new power station in Somerset is costing four times as much as an identical one in South Korea? Surely this will add to energy costs, not detract from them.

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[Lord Ashcombe (Con)]

My Lords, Amendment 22 in my name is about energy security. Energy security is a matter of utmost importance—a foundation on which our homes, businesses and industries depend. We must ensure that our nation can provide reliable power to keep the lights on and our economy running.

I was not in this country during the 1970s but lived in the Republic of Ireland. We suffered power cuts that caused significant disruption. I recall a farming friend who lost his entire pig herd due to a lack of ventilation—a stark reminder of the devastating consequences when power systems fail. We cannot afford to let such a situation arise here.

While I wholeheartedly support the goal of achieving net zero by 2050, we must temper ambition with pragmatism. The United Kingdom accounts for 1% of global carbon dioxide emissions, compared with 33% from China and 12.5% from the United States. While we strive for cleaner energy, we must be realistic about the scale of transformation required. Getting electricity production to net zero by 2030 is a noble aspiration, but it remains a significant challenge.

Progress has been made. According to the Department for Energy Security and Net Zero, the UK’s carbon dioxide emissions decreased by almost 50% between 1990 and 2023, including a 6.6% drop in the year ending 2023. Electricity generation contributes 11% of our greenhouse emissions. Efforts to reduce this share are ongoing. However, our energy mix relies on a delicate balance. Nuclear power—which we have just discussed—and biomass provide baseload capacity most of the time, while solar and wind offer renewable contributions that are inherently variable. Interconnectors, though helpful, depend on surplus supply from neighbouring countries.

The swing producer in our energy system remains gas, which under certain circumstances—when the wind is not blowing and the sun is not shining—supplies upwards of 60% of our energy needs. As the Government push for greater electrification, whether in transport, heating or industry, the strain on our grid will only increase. Targets for offshore and floating wind are ambitious, as are those for solar power, which raises concerns about land use and its impact on food production—an amendment for later discussion, I am sure.

Onshore wind also faces resistance, and these challenges make clear that gas generation will remain a critical component of our energy mix for years to come. Let us not forget that electricity accounts for only 20% to 25% of the energy consumed in this country, and that 87% of UK homes rely on gas for heating and hot water, yet domestic gas production declined by 10% between 2022 and 2023 and nearly 14% to August this year, according to Offshore Energies UK.

This leaves us increasingly reliant on imports, as our current production is about 40% of requirements. Imported gas comes via pipelines from Europe or as LNG shipments. Global instability, such as sanctions on Russia, has tightened supply, while demand in Europe has risen. Norway, a trusted ally, provides the majority of gas imported by pipeline, some 35%, placing many of our eggs in one basket. The additional 25% required comes as LNG, sourced from countries such as the United States and Qatar, both of which have indicated that their supplies will increase. This has a significantly higher carbon footprint—on average four times more than our domestic production—due to transport and production methods.

The North Sea Transition Authority’s 2024 Emissions Monitoring Report indicates that UK gas production is a top-quartile performer according to kilograms of carbon dioxide equivalent per barrel of oil equivalent—kgCO₂e/boe. The NSTA report also shows a good methane emissions performance—arguably a greater concern than carbon dioxide emissions—with the UK having an intensity of 1 kgCO₂e/boe versus the global average of 16 kgCO₂e/boe. I apologise for all the figures.

New UK developments are being delivered far more cleanly than the average of current existing UK developments. New UK developments are significantly cleaner than imports, producing emissions roughly 10 times cleaner than LNG imports. We are fortunate to have an abundance of hydrocarbons in our offshore waters. Despite the decline, there is still potential for two or three decades of production, as I mentioned at Second Reading. Exploiting this resource responsibly would protect some 200,000 direct and indirect jobs, sustain some critical industries and provide a bridge to the renewable future. Moreover, recommencing the issuance of oil and gas licences would help reduce global emissions by avoiding the higher carbon intensity of imports, stabilise our energy and bolster our economy.

However, I must caution that the current tax regime risks an 80% slump in investment in the UK oil and gas industry over the next five years, according to OEUK. This would undermine both energy security and our ability to transition effectively. Lifting the ban on new exploration and production licences, while ensuring robust environmental standards, offers a pragmatic path forward. It will protect jobs, reduce emissions and, most importantly, help secure the energy future of the United Kingdom. I very much look forward to the Minister’s response and beg to move.

[Lord Offord of Garvel (Con)]

My Lords, I thank my noble friend Lord Ashcombe, whose amendment I support, for his insightful contributions on the important issue of energy security. This issue cannot go unaddressed when discussing the Bill because of the consequences to our country’s energy production, supply and security. Indeed, Clause 3 explicitly states that GBE’s objects

“are restricted to facilitating, encouraging and participating in … measures for ensuring the security of the supply of energy”.

However, the Bill makes no provision to ensure the security and future of our energy supply, and I express my deepest concern that the tunnel-vision focus on renewable energy to achieve the Government’s overly ambitious target of clean energy by 2030 will inevitably compromise our energy security.

The UK’s energy security should indeed be at the forefront of the debate on the Bill. The Government have said that Great British Energy is part of their plans to ramp up renewables, which they say will result in cheaper energy and greater energy security. However, this is simply not true. Instead, the Government’s renewable plans will cost the British people and our national energy security.

We on these Benches of course recognise the need to cut household energy bills for families, to accelerate private investment in energy infrastructure, and to protect and create jobs in the energy industry across the UK, but the Bill gives no indication as to how this will be achieved. It does not include any measures to ensure the effective delivery of a reduction in household energy bills, nor an increase in British jobs, nor the long-term security of our energy supply. We understand that the purpose of Great British Energy will be to assist the Government in ramping up renewables to achieve their self-imposed target of 100% clean energy by 2030. This is a target that I believe to be driven by political ideology and which industry experts have described as aggressive, unrealistic and expensive, requiring far more than the allocated £8.3 billion of funding.

It is an undeniable truth that renewable energy will always be naturally unreliable. As my noble friend Lady Bloomfield brought to our attention at Second Reading, over the last couple of months, as was the case this time last year and in March, we have seen another dunkelflaute. Indeed, in March, the measure of how often turbines generate their maximum power failed to reach 20%, and we have recently seen levels drop to nearly zero. Relying on new interconnectors to Belgium and Holland will not offer energy security if their wind farms suffer the same weather conditions as ours or if their countries’ needs are greater than ours.

All this being said, it is therefore vital that we acknowledge the UK’s North Sea oil and gas industry when we discuss the future of our energy production and security. This industry has suffered under the Government, as they increase their taxes on North Sea oil to punitive levels. Energy firms have described increasing the windfall tax by 3%—with the headline rate of tax now a staggering 78%—and extending this to 2030 as a devastating blow. This hike will cut investment in UK natural resources and oil and gas production, as indicated by my noble friend Lord Ashcombe, which will make the UK increasingly dependent on imported supply. This will compromise our energy security, but consumers will also be exposed to price fluctuations. The country will become increasingly dependent on imported electricity and will therefore be forced to pay the market price for power as fossil fuel powered generators are closed at a quicker pace than we are ramping up the necessary capacity to replace them.

Not only this, but if investment in UK oil and gas decreases then the revenue generated from the energy profit levy, which the Government are relying on to help fund GBE, will decrease. By pressing ahead with ending oil and gas licences—a move no other major economy has taken—£12 billion in tax receipts have been lost from the North Sea. This, combined with the £8 billion which will be spent on GBE, is a staggering £20 billion of taxpayers’ money.

Analysts have spoken out and warned about relying on North Sea oil taxes to fund the Government’s green energy plans while the Government tax the operators to the point that revenues fall by 80%, as indicated by my noble friend Lord Ashcombe. We must address the fact that the revenue generated from the energy profit levy, or windfall tax, may fall if investment in UK oil and gas decreases. Alongside private sector investment, the Government are relying on windfall tax revenues to fund GBE and support the transition to clean power by 2030. Furthermore, the £8 billion allocated to GBE does not compensate for the amount of investment in energy projects that will be doomed by the Government’s plans to prematurely shut down the UK oil and gas sector.

The North Sea oil and gas industry is not only critical to the UK energy supply but a bedrock for many economies and communities. Economic ecosystems have developed around this industry. It is therefore critical that we manage the energy transition properly. The Government’s plan for GBE, combined with the energy profits levy, puts the industry at risk at this vital time. The proposed increases and the removal of the investment allowances could be detrimental to investment. Offshore Energies UK has warned that the tax increase could see investment in the UK cut from £14 billion to £2 billion between now and 2029. That is not scaremongering; it is what the industry is telling us.

--- Later in debate ---

Moved by

[Lord Offord of Garvel]

35: Clause 4, page 2, line 32, leave out “grant”
Member's explanatory statement
This would probe into the types of financial assistance which can be provided to Great British Energy by the Secretary of State.

[Lord Offord of Garvel (Con)]

My Lords, I rise to speak in support of amendments tabled to Clause 4 of the Great British Energy Bill, particularly those in my name and the name of my noble friend Lady Noakes. These amendments are crucial as they aim to provide clarity, ensure accountability and protect the taxpayer in what is undoubtedly an ambitious and complex policy area.

Let me first address the central issue that these amendments seek to probe: the nature and scope of the financial assistance the Secretary of State can provide to Great British Energy. We all agree that our energy future is crucial, both for achieving net zero and for ensuring security of supply in an increasingly uncertain world. However, noble intentions must be underpinned by rigorous safeguards, and the current wording of Clause 4 leaves far too much ambiguity.

Amendments 35, 37 and 38 in my name are designed to question the breadth of the financial powers the Bill affords the Secretary of State. It is entirely appropriate to scrutinise these provisions. The taxpayers of this country, who have faced significant financial pressures in recent years, deserve reassurance that the Government are deploying their public funds prudently. The inclusion of vague terms such as the ability to provide assistance by way of guarantees, indemnities and other financial assistance could allow for open-ended commitments.

These are not theoretical concerns. History is replete with examples of well-meaning initiatives that spiralled into financial mismanagement. By narrowing or better defining these provisions, we can ensure that GBE operates within a framework that prioritises efficiency, accountability and value for money.

I turn to Amendment 36 in the name of my noble friend Lady Noakes. This amendment questions the inclusion of specific provisions under subsections (2)(b) to (2)(d). These allow for financial support in connection with acquisitions, liabilities or the provision of assets. While there may well be situations in which such support is necessary, we must ask what checks and balances will be in place and what mechanisms will ensure that public money is not used to underwrite reckless decision-making or speculative ventures.

These amendments are not designed to obstruct the creation of Great British Energy or its objectives; rather, they are about ensuring that its financial underpinnings are solid, transparent and accountable. British principles dictate that the Government must always act as a careful steward of public funds, balancing ambition with fiscal prudence. It is also worth noting that robust safeguards will strengthen the Bill. Clear financial rules do not hamper innovation; they foster confidence for investors, for industry and for the British people.

In conclusion, I urge the Government to take seriously the concerns raised by these amendments. By supporting them, we send a clear message that while we are committed to achieving our energy goals, we will not do so at the expense of fiscal responsibility. The energy transition must be sustainable, in not only environmental terms but economic ones. I beg to move.

[Baroness Noakes (Con)]

My Lords, in this group I have Amendment 36, which partially overlaps Amendment 37 from my noble friend Lord Offord of Garvel. My noble friend asked some general questions about the financial assistance clause. My Amendment 36 is somewhat narrower: it is trying to find out exactly how paragraphs (b) to (d) actually work.

I understand how paragraph (a) works: the Secretary of State gives money to Great British Energy, or possibly lends it money, or guarantees or indemnifies something that Great British Energy does. However, when we get to paragraph (b), somehow the financial assistance is provided by the Secretary of State acquiring shares or securities, but Great British Energy does not appear to be involved at all in that transaction.

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[Lord Cryer (Lab)]

I have answered the noble Baroness’s question to the best of my ability; I will write to her.

[Lord Offord of Garvel (Con)]

I thank the noble Lord for his response to these amendments. I reiterate that the core aim of these amendments is to protect the taxpayer, ensure proper scrutiny and secure the financial integrity of Great British Energy, so I am sure we will come back to that on Report. I am very taken with the advice given by my noble friend Lord Hamilton of Epsom, that nationalised industries do not have a great track record of producing profits and returns for the taxpayer. In the meantime, I beg leave to withdraw the amendment.

Amendment 35 withdrawn.

--- Later in debate ---

[Earl Russell (LD)]

My Lords, my Amendment 100 seeks to insert a new clause after Clause 7 that would require Great British Energy to verify its supply chain in respect of unethical practices and to attempt to engage in ethical supply chain practices only. I will also speak in favour of the principles contained in Amendments 43 and 109 in this group, moved by the noble Lord, Lord Alton, and supported by others.

To be clear, I believe in people and planet, and we should not have to choose one or the other. The two are intertwined and co-dependent. Our goal of reaching net zero must not come at the expense of supporting repressive regimes which do not support the human rights of their own citizens, or on the back of slave labour.

The truth is that it is certain that a proportion of the supplies and materials used in this country as part of our efforts to decarbonise have unknown ethical origins or, if we look more closely, are probably produced in regimes with modern slavery practices.

Polysilicon manufacturers in China account for some 45% of the world’s supply, and some 80% of the world’s solar panel manufacturing. As the noble Lord, Lord Alton, alluded to, Sheffield Hallam University has linked forced labour in China’s labour transfer programme directly to the global supply chain of solar panels. Some 11 companies were identified as engaging in forced labour transfer, including all four of China’s largest polysilicon producers. Some 2.7 million Uighurs are subject to state detention and coerced work programmes.

The combination of unethical practices, cheap labour and deliberate foreign policies means that China controls much of the world’s rare earth materials and manufacturing that is necessary to produce solar panels. China built more renewable technology than the rest of the world combined last year. But China is still opening and highly dependent on coal mines. It is time for China itself to choose which side of the green revolution it is on.

It is not in our national interest to continue with such foreign power dependence in order to secure our net-zero goals. What actions are the Government considering or planning to undertake, along with our allies and partners, to verify supply chains and build our own manufacturing capacity, particularly for solar panels, so that we are not dependent on foreign countries for the materials we need to decarbonise, and so that we can be certain that the products we use are not the result of human suffering? I hope the Prime Minister raised these important issues in his recent meeting with the Chinese President.

My amendment would place a duty on GB Energy to verify and engage in ethical supply chain practices. This is not the end of the journey, but it is a start. Of course, these problems extend way beyond GB Energy and these measures should be implemented nationally.

Amendment 43 says that no financial assistance must be provided

“if there exists credible evidence of modern slavery in the energy supply chain”.

Amendment 109 calls for a warning to be placed on any products sourced from China that are used by GB Energy. Although I support the spirit and intention of both these amendments, my worry is that the Government will not be able to support them and that they will fail.

My fear is that if Amendment 43 passed it would put GB Energy at an unfair disadvantage in relation to other competitors in the industry operating in the UK. For this reason, the Government will most likely reject it. On Amendment 109, I expect that the implication of labelling these products might simply be to prevent their purchase by GB Energy, while other competitors in place in the UK marketplace without this labelling requirement would be able to continue their supply. Again, my worry is that this would do more to put GB Energy at a disadvantage versus its competitors operating in this country. The Government will probably reject the amendment on those grounds.

My hope is that my amendment or a newly tabled one on Report might help us to find a way forward together on this important issue, which we all need to make progress on. To be clear, this issue goes well beyond GB Energy, and the real long-term solutions to it sit with the verification of supply chains, strong and determined diplomacy, the creation of and investment in solar panel manufacturing on our own or along with our allies, or the research and development of new forms of manufacturing processes for these technologies. These are essential issues, but I suspect we will need to engage constructively together to find a way forward prior to Report, and that the solution, ultimately, goes beyond the scope of the Bill and GB Energy.

[Lord Offord of Garvel (Con)]

My Lords, I thank the noble Lord, Lord Alton of Liverpool, and the noble Earl, Lord Russell, for their amendments. We all agree that modern slavery is one of the great scourges of our time. It is estimated that tens of millions of people are trapped in forced labour worldwide, many of them in sectors tied to energy production and manufacturing. Indeed, as the noble Lord and the noble Earl pointed out very eloquently, renewable energy technologies such as solar panels rely on materials such as polysilicon, much of which is sourced from regions where reports of forced labour and human rights abuses are widespread.

These amendments seek to ensure that GBE operates with integrity and accountability in its supply chain practices. Each amendment addresses a crucial aspect of ethical responsibility, and together they would bind the Government to ensure clean energy does not come at the expense of human rights, ethical labour practices or transparency. I encourage the Government to look at this matter carefully. Can the Minister explain what measures will be put in place to ensure that there is oversight of Great British Energy’s supply chains? If Great British Energy is to represent the values of this nation, there is a strong case for tougher measures to prevent public funds being spent in a way that supports or sustains supply chains that exploit human beings.

On Amendment 109, while I recognise the sensitivity and complexity of this issue, it is crucial that we approach it with transparency and courage. Consumers and stakeholders have a right to know the origins of the products they use and the conditions under which they are made. I hope the Minister will listen carefully to the arguments made on this matter; we on these Benches will be very interested to hear his reply.

As a publicly backed entity, Great British Energy has an opportunity to set an example and be a model to other countries. I am sure the Government agree there are opportunities here and we look forward to hearing their response.

[Lord Hunt of Kings Heath (Lab)]

My Lords, I thank the noble Lord, Lord Alton, for his expert introduction to the amendment. I also thank the noble Earl, Lord Russell, for his wise comments. I say to the noble Lord, Lord Offord, that we are, of course listening very carefully to this important debate, and I have no doubt whatever about the gravity of the issue. The amendments seek to highlight the importance of ensuring that our supply chains are protected from forced labour, and I wholeheartedly support this.

Great British Energy Bill

Lord Offord of Garvel Excerpts

Committee stage
Tuesday 17th December 2024 Lords Chamber

[Lord Fuller (Con)]

My Lords, I will speak briefly in strong support of Amendment 55, tabled by the noble Baroness, Lady McIntosh. Of course we want to consult widely with farmers, fishermen and communities; after all, these are the people who are most likely to be greatest affected by the generation of renewable energy in the countryside. However, that energy will be consumed in the cities, and so those people will not necessarily see the benefits. The harms could be damaged landscapes, the consumption of land, and the introduction of noise and general disruption from construction. We are looking at towering turbines and new pylons. In my own area, in Norfolk, Diss faces being surrounded—fenced in—on both sides by two huge lines of pylons as part of our drive to net zero. Acres of land are lost to solar, with the loss of jobs in the countryside and the debilitating hum of battery storage.

What can the Minister say about the extent to which the consultation will be coupled with reassurances and promises of compensation for those in parts that are most affected—possibly a reduction in electricity or energy bills? It should not be just the generality of everyone’s electricity or energy bill but particularly those people who are most affected.

[Lord Offord of Garvel (Con)]

My Lords, I thank the noble Lords, Lord Whitty, Lord Hamilton, Lord Teverson, Lord Grantchester and Lord Fuller, the noble Earl, Lord Russell, and the noble Baronesses, Lady Young, Lady Boycott, Lady McIntosh and Lady Bennett, for their thoughtful contributions so far to this debate. This group has dealt with the critical subject of the strategic priorities of Great British Energy, and we must recognise the importance of this issue.

I begin with Amendment 46. As we discussed on the first day in Committee, the drafting of the Bill is concerningly lacking in detail. Unlike other Bills we have scrutinised in this House, the Great British Energy Bill lacks a clearly defined purpose and does not set out the company’s strategic priorities and plans. I am grateful that Amendment 46 looks to define the impacts of Great British Energy’s strategic priorities: the security of energy supply and the diversification of the ownership of energy facilities for the benefit of people and communities.

By explicitly stating that Great British Energy’s strategic priorities will assist in the reduction of greenhouse gas emissions and improve energy efficiency, we would ensure that the £8.3 billion of taxpayers’ money is used effectively for the Government’s stated purpose. Not only this but it is critical that Great British Energy looks to achieve a secure energy supply, as mentioned by the noble Earl, Lord Russell. We saw how that was disrupted with the war in Ukraine. This is not an issue that can go unaddressed when discussing a Bill that the Government claim is so consequential to our country’s energy production, supply and security.

In fact, Clause 3 explicitly states that

“Great British Energy’s objects are restricted to facilitating, encouraging and participating in … measures for ensuring the security of the supply of energy”.

However, the Bill makes no provision to ensure the security and future of our energy supply. We are concerned that there may be some tunnel vision here on renewable energy to achieve the Government’s unilateral, and perhaps overambitious, target of clean energy by 2030; that would inevitably compromise our energy security. I am grateful to the noble Baronesses for addressing this concern in their amendment.

Amendment 47 in my name requires the statement of strategic priorities and plans to include the reduction of household energy bills by £300 by 2030. Throughout the election campaign, the Government repeatedly promised that Great British Energy would cut household bills by an average of £300. A similar claim was made by at least 50 MPs, the Science Secretary and the Work and Pensions Secretary, and even the Chancellor said:

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


In an interview in June, the Secretary of State himself claimed that Great British Energy would lead to a “mind-blowing” reduction in bills by 2030. As the noble Baroness, Lady Boycott, put it so eloquently, the public are hearing this message and must not be misled.

It is worrying that in the other place the Government voted against a Conservative amendment to make cutting energy bills, quoting the £300, a strategic priority for Great British Energy. By doing that, the Government voted against an amendment that would hold them to their word. They voted against ensuring delivery on their promise to cut energy bills for the British people. Why do this? If it is not £300, what is it? The public genuinely believe that Great British Energy, as a new energy company, will supply them with cheap electricity. Can the Minister give the Committee a cast-iron guarantee that GB Energy will cut energy bills? By how much will they be cut?

The pledge to cut household energy bills by up to £300 was not the only promise the Government made during their election campaign. They also promised that Great British Energy would create 650,000 jobs, yet this too was defeated from becoming a strategic object of Great British Energy and is absent from the Government’s Explanatory Notes on the Bill and the Great British Energy founding statement. Why is this? Amendment 48 in my name would ensure that the Government are held to their word and that the creation of 650,000 new jobs is included in the statement of strategic priorities.

These are not trivial matters: they are promises that are important to people. The Government have already put 200,000 jobs at risk with their plans to prematurely shut down North Sea oil and gas. The public are aware of this transition and they want a just transition, but they are hearing of an acceleration in offshore oil and gas to the detriment of jobs and no commitment given as to the new jobs that will replace them. The Secretary of State has made huge promises that greatly impact people’s energy bills, their businesses and their jobs. It is therefore critical that the Government are held accountable.

Amendment 49 in my name would introduce a specific strategic priority for Great British Energy to develop UK energy supply chains and require that an annual report is produced on the progress of meeting this strategic priority. It is essential that our transition to net zero does not increase our reliance on foreign states, as has been mentioned many times, and particularly not on hostile foreign states. I think we all want to see a “Made in Britain” transition, where our offshore wind turbines are constructed by British manufacturing companies and erected by British high-skilled workers, and deliver clean, cheap energy for British homes and businesses. With that in mind, my Amendment 49 would make domestic supply chains a strategic priority for Great British Energy. In this transition to net zero, we are presented with great opportunities for investment and for new jobs. As with employment, we must ensure that British people and domestic companies benefit from the increase in investment we hope to see in the coming years. Therefore, we must not simply outsource this transition; the transition will not be just if it benefits only Chinese companies.

I am grateful to the noble Baroness, Lady McIntosh, for tabling Amendment 55. It is critical that the Secretary of State must consult with various groups and local communities, including farmers and fishermen, when implementing a statement of priorities that will almost certainly have significant implications for them. I remind noble Lords of Amendments 26 and 110, to which I spoke on the first day in Committee. I raised the importance of local community consultation when the activities of Great British Energy might result in the erection of pylons.

I also draw the attention of noble Lords to Amendments 106 and 107, which will no doubt be addressed in future debate. I too have expressed my concern on the impact of Great British Energy’s functions on coastal communities and commercial fishing. I seek to ensure that an annual report is prepared and published to assess those potential impacts.

I turn to Amendment 50 in the name of the noble Earl, Lord Russell. I do not intend to be repetitive, but this too is a fundamental issue with the Bill—it lacks strategy. How can the Minister expect the Committee to have thorough debate when the details of the Bill are so vague? The Bill lacks substance and we need to clarify the strategic priorities. However, by addressing amendments such as Amendments 50, and Amendment 73 which will come later in the debate, we can begin to address some of these glaring omissions.

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[Lord Offord of Garvel (Con)]

My Lords, I thank noble Lords who have contributed: the noble Lord, Lord Vaux, for opening this group, the noble Earl, Lord Russell, and my noble friends Lord Hamilton, Lord Effingham, Lord Howell, Lord Trenchard and Lady McIntosh. I particularly thank my noble friend Lady Noakes for her detailed scrutiny of the Bill and her expertise.

The debate has raised crucial issues regarding how our energy future is shaped, particularly community energy, transparency and the governance of strategic priorities. It is evident that we in this House today share many of the same concerns about the absence of a statement of strategic priorities and plans. I reiterate that this is in the context of the Bill being responsible for £8.3 billion of taxpayers’ money, with no detail as to GBE’s plans, priorities, objectives and purpose. As the noble Lord, Lord Vaux, said, the Bill is merely a skeleton, providing unabridged powers to the Secretary of State without clarity on how they can be used.

With that in mind, I welcome Amendment 119, tabled by my noble friend Lady Noakes, which would delay the commencement of other provisions in the Bill until a statement of strategic priorities has been laid before Parliament. This is a sensible and necessary step to ensure that Parliament and the public have sight of the plans that will guide the operation of this great new company, GBE. Furthermore, Amendment 58 would ensure that Parliament is made aware of Great British Energy’s strategic priorities, and Amendment 52 would give Parliament the power to reject a statement of strategic priorities once received. We cannot, in good conscience, simply allow this Bill to proceed without the opportunity to scrutinise these priorities, which will guide £8.3 billion of taxpayers’ investment.

Amendment 51 would introduce a clear time limit for the Secretary of State to publish the statement, while Amendment 54 would ensure that a motion for resolution is tabled in both Houses of Parliament. These amendments provide the necessary transparency and accountability to ensure that Parliament can scrutinise and approve those priorities before any further steps are taken. The Bill cannot and should not proceed until we have seen the strategic priorities.

This brings me to the question of whether Clause 5 should stand part of the Bill. In its report, the Constitution Committee expressed concern that Clauses 5 and 6 amount to disguised legislation and that Clause 5 does not offer an adequate degree of parliamentary oversight. This is a serious constitutional issue, and I hope that the Minister takes the committee’s concerns seriously as we continue our debate.

Amendment 53, tabled by my noble friend Lady McIntosh of Pickering, seeks to insert a provision into Clause 5 requiring the Secretary of State to produce a statement to the chairs of the relevant Select Committees in both Houses of Parliament. This amendment is fundamentally about transparency, and its purpose is simple: to ensure that Parliament can properly scrutinise the actions of the Secretary of State and guarantee that public money is being used efficiently and in the public interest. This is why we propose that a copy of a strategic statement be sent to the relevant Select Committees for their review and input.

As discussed earlier on Amendment 57, tabled by my noble friend Lord Effingham, transparency is not a luxury; it is a necessity. Transparency ensures that decisions are made openly and subject to public and parliamentary scrutiny. He brought to our attention consideration of the requirement that GBE deal with the devolved Administrations throughout the UK.

Finally, Amendment 90 seeks to insert at the end of Clause 7 the provision that the Secretary of State must

“arrange for a statement to be made in each House”.

The intent behind this amendment is to ensure that the actions of the Government in relation to Great British Energy are made public and accountable. For such a significant and impactful initiative, there must be a mechanism for direct communication with Parliament. This would allow both Houses to question, debate and hold the Government to account on any developments or changes in the direction of the company.

A comparison has already been drawn by the noble Lord, Lord Vaux, with the National Wealth Fund, previously the UK Infrastructure Bank. That organisation experienced thorough scrutiny and testing before its establishment. Why should we treat GBE any differently? If we expect such rigorous assessment for the UK Infrastructure Bank, it stands to reason that a similar level of transparency and parliamentary scrutiny should apply to Great British Energy. I urge noble Lords to support this amendment, as it reinforces the principles of accountability that should be at the heart of this Bill.

In conclusion, I welcome the amendments and the ongoing discussions regarding the strategic priorities and transparency of Great British Energy. The strategic priorities are critical to the success of the Bill, and I am grateful to all noble Lords who have expressed similar concerns. I reiterate my support for my noble friend Lady Noakes and all other noble Lords who have raised similar issues.

[Lord Hunt of Kings Heath (Lab)]

My Lords, I am most grateful again to noble Lords who have raised a number of very interesting points in relation to Clause 5 and the statement of strategic priorities. I remind the Committee that the founding statement set out GBE’s purpose, priorities and objectives, including its mission statements and its five functions. The first statement of strategic priorities is intended to ensure that Great British Energy will be focused on driving clean energy deployment, boosting energy independence, creating jobs and ensuring that UK taxpayers, bill payers and communities reap the benefits of clean, secure, home-grown energy.

Clearly, Clause 5 is important in that respect. The noble Lord, Lord Offord, will not be surprised that I will resist his opposition to it standing part of the Bill. He made another point in relation to the investment bank legislation. I understand the point; he knows that we have looked at this legislation and taken parts from it, but we have also looked at Great British Nuclear, which his Government put through in the last Energy Act. In some cases, we think that that is appropriate to look at in relation to the way this legislation has been framed.

Amendments 51, 52, 53, 54, 57, 58, 90, 119 and 128 all refer to the statement of strategic priorities, with some amendments seeking to defer commencement of the Bill in relation to the statement. The noble Lord, Lord Howell, always speaks with great experience on energy, and he is threatening us with many more amendments the next time we meet. We believe that the best way to get stability on prices and security of energy, and to deal with climate change, is to move in the way that we have set out. Numerous organisations have looked at it and say that, in the context of value for money, investment decisions and cost to government, this will be the cheapest way forward in the end, and that staying reliant on fossil fuels, with the unreliability of the international market, would not be a productive use of our resources and would do nothing for climate change. That is why we are going down this path.

I come to the amendment of the noble Lord, Lord Vaux, and his opening remarks on this group. We do not wish to escape parliamentary scrutiny. I say to the noble Baroness, Lady Noakes, that we do not want to weaken accountability processes. I assure her that there is no way we will use the power of direction in the way that she suggested might happen. She referred to the power of direction and from what she said I took it that she thought it could be used in a way which would simply direct GBE, instead of the statement of priorities, but perhaps I have confused that.

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[Lord Hamilton of Epsom (Con)]

My Lords, if I am brutally honest, I do not really like this Bill at all. It is a vehicle for a nationalised industry that should not even be set up by a Labour Government who want to gamble with other people’s money with no parliamentary scrutiny. Therefore, and on that basis, I really should support the amendment, because if they have to consult all these quangos and unelected bodies, which have made life such a nightmare for people for so long, they will never get anything done anyway, but that is just too cynical even for me. I have found that the Climate Change Committee represents a dwindling number of people in this country and basically keeps the Reform party in business.

As for the environmental committee, that is the one that, of course, the Government are going to ignore when they introduce their housing target of 1.5 million, because that has basically been blocking the number of planning permissions. Once again, I have a vested interest here: my family has land in Surrey that they are hoping to develop, so we are very keen on the recent Statement from the Deputy Prime Minister.

These quangos have not done anybody any good at all. The Government would be absolutely right if they resisted this amendment, because we have been run by these people for much too long and it is time that the country was run for the interests of the people.

[Lord Offord of Garvel (Con)]

My Lords, once again, I am very grateful to the noble Baronesses, Lady Young of Old Scone and Lady Bennett of Manor Castle, the noble Lord, Lord Ravensdale, and my noble friends Lord Trenchard, Lord Howell, Lord Hamilton and Lord Bourne of Aberystwyth.

Amendment 56 would require the Secretary of State to consult the relevant stakeholders before strategic priorities for GBE were published. Under this requirement, the stakeholders to be consulted would include, but not be limited to, the Climate Change Committee, the National Energy System Operator—also known as NESO—Natural England and the Environment Agency. Amendment 116 would introduce a new clause on the duty of GBE to contribute to climate-change and nature targets. This would require GBE to “take all reasonable steps” when

“exercising its functions and delivering on the objects in clauses 3 and 5”,

and

“all reasonable steps to contribute to the achievement of the targets in the Climate Change Act 2008 and Environment Act 2021”.

These objects reflect the values of climate and environmental responsibilities and sustainability which, within this House, are championed on all Benches. Great British Energy, and therefore the Secretary of State, have a unique opportunity to be involved in helping to achieve the targets of the Climate Change Act and the Environment Act. They are in a privileged position, undertaking meaningful actions to be involved in nature and biodiversity recovery. They can tailor their strategic priorities with the Climate Change Act and the Environment Act in mind. In fact, as a publicly owned company, GBE has a clear duty to protect and nurture the environment by consulting key stake- holders such as Natural England, the Climate Change Committee and the Environment Agency. The Secretary of State will ensure that the activities undertaken by GBE will be those which best help to tackle climate change, promote nature recovery and protect the UK’s environment.

At present, however, I do not believe that this Bill creates sufficient provisions to consult the relevant environmental agencies on GBE’s skeletal strategic priorities and plans; nor does it ensure adequate reporting measures, which we have discussed. In Committee and on Report on the Crown Estate Bill, we on these Benches scrutinised the unprecedented relationship between the Crown Estate and GBE. It appeared that this Government introduced this legislation with one major objective: to enable the Crown Estate to build more offshore windfarms in partnership with GBE. My noble friends acknowledged that it was important, when legislating, to increase commercial activity on the seabed around our shores, but a restriction must be placed on the development of salmon farms in England and Wales, especially given the damaging effects on nature and the environment resulting from salmon farms operated in coastal waters and sea lochs in Scotland.

As a result of the rigorous and critical debate on the protection of the environment and the preservation of animal welfare standards at Report on the Crown Estate Bill, this House successfully voted on an amendment requiring the commissioners to assess the environmental impact and animal welfare standards of salmon farms on the Crown Estate. It is evident that this House cares about environmental protections. Concerning this, I hope we might receive an encouraging response from the Minister on amendments discussed today.

Great British Energy Bill

Lord Offord of Garvel Excerpts

Committee stage
Monday 13th January 2025 Lords Chamber

Moved by

[Lord Offord of Garvel]

59: 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 day on which this Act is passed, and annually thereafter.(1D) The Secretary of State must lay a report made under subsection (1A) before Parliament.”Member's explanatory statement
This amendment would require an annual report to be laid before Parliament on how Great British Energy’s activities are contributing towards taking £300 off consumer energy bills.

[Lord Offord of Garvel (Con)]

My Lords, I rise to move Amendment 59 and to speak to Amendments 60, 61, 63, 65, 69, 70, 72 and 76 in my name.

Amendment 59 requires an annual report on how Great British Energy’s activities are contributing to reducing consumer household energy bills by £300. This frequently repeated claim, that the purpose of Great British Energy is to save each household £300 on their energy bills, seems conspicuously absent from the legislation, which states that the “objects” of Great British Energy are only to facilitate, encourage and participate in the production of energy,

“the reduction of greenhouse gas emissions … improvements”

in

“energy efficiency, and … measures for ensuring security of … supply”.

It is imperative that the Government be held accountable for their promises. The Secretary of State has reiterated that clean energy will deliver cheaper energy, and this has been repeated in this House, in the other place, on the campaign trail, in videos and on leaflets. It is therefore important to enshrine accountability for that ambition in the Bill that creates the institution of Great British Energy. We must introduce a mechanism by which the Secretary of State and Great British Energy are accountable to households for their pledge to reduce bills through investment in renewables, and for their specific promise to reduce household bills by £300 per household.

Amendment 60 in my name also seeks to introduce a mechanism by which the Secretary of State and Great British Energy are held accountable. Amendment 60 holds the Government to their word by requiring Great British Energy to report to the Secretary of State on the progress made towards creating 650,000 new jobs—another election pledge.

Amendment 61 in my name introduces a specific strategic priority for Great British Energy to develop UK energy supply chains and requires that an annual report be produced on the progress of meeting this strategic priority. It is essential that our transition to net zero does not increase our reliance on foreign states, particularly hostile foreign states. I am sure we can all agree that we want the so-called “clean energy” transition to utilise British industry, whereby offshore wind turbines and solar panels are produced by domestic manufacturing companies and erected by British workers. It is with that in mind that I bring Amendments 61 and 76.

Amendment 61 requires a fixed percentage of materials sourced or purchased as part of any investment made by Great British Energy to be produced in the UK and supplied from UK manufacturers. The transition to net zero presents our country with a great opportunity for investment and job creation; we must ensure that it is domestic companies and the British people who benefit from the increased investment promised by Great British Energy.

We must not outsource our energy transition. Amendment 72 in my name requires Great British Energy to report on the impact it has on imported energy. The Government’s target to achieve clean energy by 2030 must not increase our reliance on imported energy, which risks jeopardising our energy security and exposing British consumers to price spikes. It is already concerning, given that the hike in the windfall tax to 78% is already cutting investment in UK natural resources and oil and gas production, and will make the UK increasingly dependent on imported supply.

The distribution and transmission of electricity is intrinsic to the production of clean energy as set out in Clause 3. It is therefore critical that Great British Energy should take all reasonable steps to ensure that access to the national grid is ready for any energy infrastructure invested in by Great British Energy, and Amendment 65 in my name works to do just that.

The “Great Grid Upgrade” is without doubt a necessary component of our journey to net zero by 2050. Currently, new energy infrastructure—new wind turbines and new solar farms—have a significant wait time for grid connection. That is why the previous Government commissioned the Winser review, setting out recommendations on how to reduce this timeframe. The previous Government accepted advice on all areas—all 43 recommendations—to ensure that we could continue the work to drive down construction and connection times.

Despite the work that we on these Benches initiated in government by accepting these recommendations, the timeframe for obtaining grid connections for a new project can be as long as 10 years. In fact, a project without grid connectivity today might not come online until the mid-2030s, well beyond the Government’s ambitious goal of grid decarbonisation by 2030. It is therefore essential that the development of the national grid coincide with the development of renewable energy production.

Amendments 69 and 70, in my name, require GBE to report to the Secretary of State on the impact of each investment on carbon emissions and on the progress made by GBE towards reducing those emissions. I am grateful to my noble friends Lord Petitgas and Lord Trenchard, whose Amendment 80 would require Great British Energy to produce a quarterly unaudited and an annual audited report, including on the rate of returns for and the carbon emissions resulting from each investment. I support my noble friends’ amendment, which neatly covers both emissions resulting from, and the rate of return of, each investment. I expect that the latter will be debated thoroughly in the following group.

Supposedly, Great British Energy is to be established to drive the Government’s clean energy by 2030 goal and net-zero target, yet the Bill makes no provision for reporting on the impact of each investment on carbon emissions, which is critical if the Government are to achieve that pledge. Amendments 69 and 70 in my name, and Amendment 80 in my noble friend Lord Petitgas’s name, seek to rectify that, as does Amendment 85A in my noble friend Lord Hamilton of Epsom’s name, which I wholeheartedly support.

Finally, I return to the strategic priorities of Great British Energy as set out under Clause 5. As I have discussed previously, it is critical that we have sufficient oversight of and reporting measures on the financial assistance provided to Great British Energy. In that vein, Amendment 63 requires Great British Energy to report on the projected cost of fulfilling all its strategic priorities.

I trust that the Minister has listened to and carefully considered the array of issues raised in the amendments in my name and in those in my noble friends’. We must not lose sight of the sweeping powers that the Bill provides to the Secretary of State in issuing Great British Energy with directions over which Parliament will have no oversight. We must give due consideration to the purpose and impact of each direction. I beg to move.

[Baroness Bloomfield of Hinton Waldrist (Con)]

My Lords, Amendment 77 in my name

“would require … 75 per cent of all materials purchased as part of an investment by Great British Energy”

to be produced in the UK. I will speak only briefly, as my noble friend Lord Offord of Garvel’s Amendment 61, for which I thank him, similarly requires a fixed percentage of materials sourced or purchased as part of any investment made by Great British Energy to be produced in the UK and supplied by UK manufacturers. However, I will make some additional points.

It is essential that the race to clean energy by 2030 and net zero by 2050 benefit British industry. As my noble friend Lord Offord explained, we must not outsource our energy transition. I draw attention to the warning from the former head of MI6 that the courting of Chinese investment risks handing power to Beijing. Up to 40% of solar panels in Britain are produced by companies linked to forced Uighur labour in eastern China. Furthermore, Chinese businesses have funded or provided parts for at least 14 of the 15 offshore wind projects in, or about to be in, operation. Firms owned by the Chinese Government have large stakes in three projects, together producing the energy for 2 million homes. While the Government’s energy agenda is overly ambitious, it could benefit the domestic manufacturing industry if we look to prioritise British industry over that of foreign states.

I am sure that the Government will have no hesitation in supporting my amendment, considering that the Secretary of State has repeatedly said that Great British Energy will deliver jobs for the British people. Can the Minister tell the Committee what impact Great British Energy will have on British industry? Will he confirm that the Government’s clean energy targets will not increase our reliance on foreign supply chains?

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[Lord Hunt of Kings Heath (Lab)]

My Lords, I do not really think I can go any further than the remarks I have made this afternoon. It will ultimately be for GBE’s board to decide how it will arrange its board committees. I have noted what the noble Lord said about an investment committee. I will certainly draw his remarks to the attention of Jürgen Maier, who may not be an investment expert, as the noble Lord suggests, but my goodness me he has a lot of experience in this sector.

[Lord Offord of Garvel (Con)]

My Lords, in bringing the debate on these amendments to a close, I can deal head-on with the Minister’s comments and those of the noble Earl, Lord Russell, about the time given to the Bill. We have so far had one and a half days in Committee and we have one further day allocated, which will be only two and a half days on a Bill that spends £8.3 billion of taxpayers’ money, has no detail on how that money will be spent and gives endless power to the Secretary of State for Energy. It is entirely reasonable that we scrutinise it. The weekend’s press was full of the energy crisis that we face, with the shortage, storage and national grid issues.

[Lord Hunt of Kings Heath (Lab)]

My Lords, with the greatest respect, there is no energy crisis.

[Lord Offord of Garvel (Con)]

As I said, the point of government is to ensure that there is no energy crisis and at the weekend we had reports of there being gas supplies for less than one week, which is concerning to the public. Therefore, it is only fair and reasonable that Parliament debates that in some detail.

[Lord Hunt of Kings Heath (Lab)]

My Lords, what we had was one company looking for government subsidies using the opportunity to make alarmist headlines.

[Lord Offord of Garvel (Con)]

The point is that this is a topical debate that the whole of the public are interested in. They understand energy prices like nothing else now. They understand that, in terms of their household budgets, this is a major part of their cost of living and it is only reasonable that we get to debate this.

The amendments in this group are straightforward and simple. They are nothing to do with micromanagement; they are only to do with the accountability and transparency of this new company, which, as my noble friend Lord Petitgas pointed out, is not an operating company. The public think this is a company that makes cheap energy. It is an investment company sitting on one floor of a building in Aberdeen making investment decisions, and we have no idea how it will do that.

At the last election, the Government made promises to working people on this topic: to reduce energy costs, create jobs and drive forward our energy transition. Therefore, taking my noble friend Lady Noakes’s constructive point, we can argue about how we deliver the substance of these amendments, but we should not ignore the substance. Is it not fair and reasonable that we have in the Bill some consideration of government promises made to the public about the cost of energy—£300 in savings, which, incidentally, is £8 billion, the same amount as is being invested in 28 million households at £300—or the fact that 650,000 jobs are to be created? Is it not reasonable that the Bill somewhere talks about the fact that we want a strategic priority for the UK to develop its own energy supply chain? Is it not unreasonable that we have amendments that deal with how we make sure that the supply chain is fair? We have talked about a fair transition: well, where is the fair transition, to pick up what the noble Lords, Lord Bruce and Lord Alton, said, when we destroy our own highly skilled jobs in the north-east or end up using products made under dubious circumstances in overseas territories?

I would argue that all these amendments need to be considered. There is consensus in this House that we need energy security and that we need to get to 2050. The question is: why is this being speeded up artificially when we and the technology are not ready? Why are we doing this artificially?

My final point has been mentioned by many noble Lords so far: none of this works without the plumbing working. The national grid needs a serious upgrade and comprehensive investment to deliver this. If in these straitened times—we are continually reminded by the Government Benches that there is no money—there is a spare £8 billion, should it not be better used by being put into the national grid once and for all? In the meantime, given that we are where we are in Committee, I beg leave to withdraw the amendment.

Amendment 59 withdrawn.

--- Later in debate ---

Moved by

[Lord Offord of Garvel]

62: 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 within three months of each investment it makes on the impact that the relevant investment is projected to have on wholesale electricity prices over the following ten years.(1B) The Secretary of State must lay a report made under subsection (1A) before Parliament.”Member’s explanatory statement
This amendment would introduce a requirement that Great British Energy reports to the Secretary of State (and subsequently Parliament) on the projected impact that each of its investments would have on wholesale electricity prices over the following ten years.

[Lord Offord of Garvel (Con)]

My Lords, I rise to move Amendment 62 and to speak to my Amendments 64, 68, 71 and 75. Aside from the promises to cut consumer energy bills and create 650,000 new jobs made by the Government throughout the election campaign, the British public were assured that GBE would turn a profit for the taxpayer. Yet there is nothing in the Bill that elucidates an investment profile or targeted rate of return. Why not? The British taxpayer must be able to see what the Secretary of State is doing with £8.3 billion of public money.

With that said, Amendment 64 requires GBE to provide an annual report to Parliament on its annual rate of return on investment and a projection of the following year’s expected rate of return on investment. That point was picked by my noble friend Lord Petitgas in the previous group. The company intends to invest in and de-risk projects in new clean energy technologies and it would be useful to see the return on investment of these projects. The point was well made in the last group and this amendment continues to hammer that point home.

During the last election, the Government made countless promises on bills and energy costs—again, a point we heard in the last group—that were rehearsed, debated and put out by the Prime Minister, Chancellor and various Cabinet Ministers, who gave the figure of £300. Once again, it is only fair that we have amendments that hold the Government to account on these promises made to the British people. It is widely understood that the cost of electricity is a matter of serious concern and, again, as has been indicated, it is now the major part of any household’s weekly costs. Therefore, it is deeply worrying that the Government are voting against enshrining these promises in law when they made them so directly to the British public.

The Government have said that GBE is part of their plans to ramp up renewables, which they say will result in cheaper energy. But, again, we do not have the background and analysis. The only analysis we have had so far, from Cornwall Insight, found that in the last contracts for difference, the Secretary of State, on these assumptions, will potentially increase people’s energy bills by £5. So, again, we have conflicting reports from different experts in this space. The Office for Budget Responsibility has forecast that removal taxes will increase by 23% by 2030, again highlighting the cost of this transition to the ordinary consumer. It is with that in mind that I bring forward Amendment 71, which requires GBE to produce and report

“a cost benefit analysis of the price of electricity produced from renewable energy technologies compared to that produced from gas”,

which plays a critical role in energy generation.

I return again to the Government’s promises of 650,000 jobs with no detail as to how that will be deployed, other than the fact that we know there may be 100 or so in the Aberdeen headquarters. I believe that the Government’s punitive attack on the North Sea oil and gas industry will actually cost jobs, as the noble Lord, Lord Bruce, already mentioned in the last group—some 200,000 highly paid, highly technical jobs in the North Sea, which are critical to the transition to the new green energy world for which we all wish.

Finally, Amendment 75 would require GBE to carry out an environmental impact assessment on each investment it makes. The Secretary of State and GBE should give due regard to their role in maintaining the protection of our environment while ensuring that they deliver healthy returns on investment.

I am pleased to speak to this group. I look forward to the corresponding debate. The function of GBE as a type of investment body is central to its operation as a company. It is therefore essential that the Bill makes provision to report on the success and impact of each investment it makes, backed by £8.3 billion of taxpayers’ money. I beg to move.

[Viscount Trenchard (Con)]

My Lords, I congratulate my noble friend on his clear and well-argued introduction of his amendments in this group, to most of which I have added my name. As he said, the taxpayer must be able to see what the Secretary of State is doing with £8.3 billion of his money. State-owned companies do not have a great track record in realising a strong, positive return on their invested assets.

Unless GBE does that, it is likely to have a negative, rather than a positive, effect on wholesale electricity prices. Amendment 62 will ensure transparency on that. GBE intends to invest in and de-risk projects involving new clean energy technologies. It is clearly necessary to have full transparency as to the rate of return on each of the investments that GBE achieves. The amendment would require GBE to consider every single investment it makes in terms of the impact that it will have on electricity prices in the future. Does the Minister not agree that this would be a good discipline for GBE? Amendment 64 would ensure that we have such transparency on the whole portfolio of GBE’s investments across the board.

Amendment 71 contains a requirement for a cost-benefit analysis of the price of electricity generated by each of its investments compared with that of electricity generated by gas. We certainly need to know that. Many of us think that we are already saddling the consumer and industry with unnecessarily expensive electricity. The grid is always bound to draw electricity from renewable sources when they are available, in priority to gas. This means that gas power stations are constantly being fired up and down, and are seldom operated at full capacity. This distorts the price of gas, which in turn distorts the price of electricity because gas power stations produce much cheaper electricity when operated consistently at or near full capacity than they do under the current modus operandi. The price of gas used in the cost-benefit analysis required by this amendment ought to be the price achievable from constant operation rather than the distorted price resulting from prioritisation of renewable sources.

I also refer briefly to Amendment 75. It is clear that the main purpose of GBE’s collaboration with the Crown Estate is to build a large number of offshore wind farms in coastal waters. This amendment will require GBE to consider carefully the environmental impact of its activities on marine life and inshore fisheries, among others.

The Government have made much of their determination to cut energy bills. Their refusal to accept Amendment 71 and other amendments would show that they are less than certain that their plans will result in lower energy prices. I look forward to hearing the Minister’s response.

--- Later in debate ---

[Lord Hunt of Kings Heath (Lab)]

My Lords, I want to make just two points. The noble Lord, Lord Teverson, made a very interesting and wise contribution. I say to the noble Lord, Lord Hamilton, that of course I have heard the expression that Governments are not very good at picking winners. That is why we have set up GBE. We will have a company with people with expertise to enable investments to take place within the context we set under Clause 3 and Clause 5 as strategic priorities. None the less, it will have operational independence.

The noble Lord, Lord Teverson, is right; noble Lords in their various amendments are seeking to pin down GBE through excessive reporting requirements. The risk is that GBE, far from being allowed to flourish and develop, will be inhibited and micromanaged. That is why these amendments are wholly inappropriate in relation to Clause 6. The power of direction is not to be used in the way that noble Lords are suggesting; it is a backstop power. What is the point of setting up GBE if we are to undermine its independence in the way these amendments suggest?

[Lord Offord of Garvel (Con)]

My Lords, as in the previous group, these amendments are not designed in any way to micromanage. There is very little in the Bill that gives us any indication of how this company will operate. As indicated by my noble friend Lord Petitgas, it is an investment company without an investment committee or any investment directors. All that is being sought by these amendments is some level of accountability and scrutiny.

Once again, I say that when promises are made to the public that the Bill will address their concerns, it is not unreasonable that we ask for amendments to be made accordingly. For example, looking at employment in Amendment 68, we are simply asking for a report—as the noble Lord, Lord Bruce, said—on the impact these investments make on employment and bills. Why is that an unreasonable thing to say? We have 200,000 people in highly skilled jobs in the North Sea. They are worried that they are about to be phased out unilaterally and prematurely. Why is it unreasonable to have somewhere in the Bill a requirement that GBE comes to Parliament and explains what it is doing in relation to employment in this key sector?

As we have said before, the Bill has failed to substantiate the promises made. The job of the Opposition is to highlight that and to make it clear that this needs to be debated and scrutinised. That is what we will continue to do. In light of that, for now I will withdraw the amendment.

Amendment 62 withdrawn.

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Similarly, I do not support Amendments 86 and 86A, because they are based on the premise that certain organisations will always have an interest in any possible direction that could be given to Great British Energy. I do not think that that will always be the case. In addition, I certainly do not think that the Climate Change Committee should have any locus whatever: that organisation is already too big for its boots, and its remit does not naturally encompass the individual energy projects in which Great British Energy will be involved. I believe that Clause 6 is already well drafted, because it includes reference to consultation with relevant organisations without pre-judging who those consultees should be. I point out that, for many other powers of direction already on the statute book, there is often no requirement to consult beyond the body that is the object of the power. Consultation as drafted in the Bill is actually an important advance on that.

[Lord Offord of Garvel (Con)]

My Lords, I thank the noble Earl, Lord Russell, the noble Lord, Lord Cameron of Dillington, and my noble friends Lord Roborough, Lord Howell, Lord Trenchard, Lady McIntosh and Lady Noakes for their contributions on this group. The debate raised critical issues regarding the sweeping powers, as we highlighted, given to the Secretary of State. Why is it that any and all directions that the Secretary of State gives to GBE are hidden from the eyes of the public and lack parliamentary scrutiny? Considering once again that GBE is funded by £8.3 billion of taxpayers’ money, is subject to an unlimited cap on financial assistance and will not cut the British consumer’s energy bills, this is deeply concerning.

Let me turn to the amendment of the noble Earl, Lord Russell. Amendment 66 would ensure that the Secretary of State does not give any direction to GBE without first delivering an oral Statement before Parliament setting out those directions. I am acutely aware of the lack of detail in this legislation, and it is crucial that we have proper oversight of the wider activities of GBE as ordered by the Secretary of State. It is not only I who thinks this: the Government have agreed. In fact, in Committee in the other place, the honourable Member for Rutherglen, Michael Shanks, said that the Government want Great British Energy to be

“accountable, transparent and clear about how it is delivering on its objectives”.—[Official Report, Commons, Great British Energy Bill Committee, 15/10/24; col. 168.]

I therefore see no reason why the Minister should not support amendments that seek to improve accountability and reporting measures in the Bill and ensure sufficient oversight of the objectives, directions and activities of GBE. If the Prime Minister stands by his statement that he would not make a single promise that he was not confident he could deliver, the Minister ought to support these amendments, which would ensure that GBE was indeed “accountable, transparent and clear about how it is delivering on its objectives”.

The UK Infrastructure Bank, referenced by my noble friend Lord Trenchard, was set up with the explicit purpose of financing projects to drive our energy transition, and it already includes rigorous safeguards to ensure that taxpayer money is spent effectively. Governed by strict rules and subject to detailed annual reporting, it provides the public with comprehensive information on its performance and investments. Given that these robust mechanisms are already in place for the Infrastructure Bank, is it not fair—indeed, essential—that GBE undergoes the same level of scrutiny and oversight? If we are truly committed to safeguarding public funds, surely the same level of accountability should applie to all publicly funded energy initiatives.

Amendment 87 in the name of my noble friend Lady McIntosh would require a Minister to table a motion for resolution in each House of Parliament on any directions that are given by the Secretary of State to GBE before the directions are adopted. In a similar fashion, Amendment 66 in the name of the noble Earl, Lord Russell, would prevent the Secretary of State from directing GBE unless they have delivered an oral Statement to Parliament. I am grateful to both noble Lords for bringing these amendments, which will undoubtedly improve the levels of scrutiny and oversight to which the directions which are given to Great British Energy will be subject.

The only details included under Clause 6 are that

“Great British Energy must comply with the directions”

and that:

“The Secretary of State must publish and lay before Parliament any directions given to Great British Energy”.


This is simply not good enough. It is the bare minimum to allow Parliament to have sight of the directions issued to Great British Energy before they are acted on. In fact, it would be negligible to allow Great British Energy to be directed without sufficient parliamentary scrutiny. I therefore trust that the Minister has listened carefully to the concerns raised by Amendments 66 and 87.

Amendment 86, tabled by the noble Lord, Lord Cameron of Dillington, seeks to ensure that, before giving any direction to Great British Energy, the Secretary of State must consult

“the National Energy System Operator”—

known as NESO—

“the Climate Change Committee and the Gas and Electricity Markets Authority”.

I discussed in detail the importance of consultation in our debate on Amendments 56 and 116. As I said, engagement and consultation with the relevant parties is crucial if GBE is to be a success. The Secretary of State must not act in isolation. It is crucial that he or she consults with the relevant stakeholders. I therefore welcome the amendments in the names of the noble Lord, Lord Cameron of Dillington, the noble Earl, Lord Russell, and my noble friend Lady McIntosh. I look forward to the Minister’s response on the concerns raised by noble Lords in the debate on this group.

[Lord in Waiting/Government Whip (Lord Cryer) (Lab)]

My Lords, I now turn, as you would expect, to Amendments 66, 86, 86A and 87, tabled by the noble Earl, Lord Russell, the noble Lord, Lord Cameron, the noble Baroness, Lady McIntosh, and the noble Viscount, Lord Trenchard. As I have said, and as my noble friend has said previously, Clause 6 sets out that the Secretary of State will be able to give directions to Great British Energy, and that Great British Energy must comply with those directions.

As Great British Energy will be operationally independent, the intention is that the power will be used only when it is really needed. This will ensure that GBE has the space it requires to fulfil its role and deliver its strategic priorities. I draw the House’s attention to the comments made by the noble Baroness, Lady Noakes, in this context.

The purpose of the clause is to ensure that there is a mechanism in place should any urgent or unforeseen circumstances arise. For example, it could be used if the Secretary of State considers that they need to give GBE a direction that is in the interest of national security or otherwise in the public interest. The amendments before us would risk delaying the Secretary of State’s ability to give Great British Energy that direction, potentially compromising national security under certain circumstances.

The noble Earl, Lord Russell, raised the perfectly reasonable points of accountability and scrutiny. I am not impugning his motives—or the motives of anybody else who has tabled amendments—but if there was an issue of national security that perhaps took place at the start of a recess, it would seriously hamper the Secretary of State’s ability to act.

The noble Earl also raised, interestingly, the possibility of Labour losing the next election. It may come as a shock, but we are not actually planning to lose the next election. However, the mechanism of accountability and the decisions of this Government and future Governments are subject to the views of voters. That is part of the democratic process. We might not like a future Government exercising the directions we have put on the statute book, but that probably applies to past Governments as well. It is part of the democratic process and the process of accountability and scrutiny.

The amendment in the name of the noble Baroness, Lady McIntosh, would take this point further by requiring the resolution of each House, which I genuinely do not think is practicable. However, to ensure transparency and accountability, any directions given to Great British Energy will be published and laid before Parliament before they are given.

Further, Clause 6 requires that the Secretary of State must consult GBE and other persons considered appropriate, before giving directions to GBE. This means that GBE’s management and its board—yet to be appointed—will have the opportunity to express any reservations they have about the direction to Ministers before any such direction is made. If appropriate, this could include the National Energy System Operator, the Climate Change Committee—which has been consulted by successive Governments—the Gas and Electricity Markets Authority, Great British Nuclear and the National Wealth Fund, as well as groups not referenced in Amendment 86.

The noble Lord, Lord Cameron, mentioned at least two of the organisations on that list; he mentioned others too, as I think did the noble Viscount, Lord Trenchard. We could end up with a list as long as your arm of bodies that have to be consulted, which would seriously hamper the Secretary of State’s room for manoeuvre.

Finally, it is not unusual for a Secretary of State to be able to direct an arm’s-length body and such powers are found in several pieces of legislation—again referenced by the noble Baroness, Lady Noakes. In the specific context of government-owned companies, such powers are, for example, included in the Energy Act 2023, which created Great British Nuclear, where named stakeholders are also not included in the directions clause.

For these reasons, I hope the noble Earl recognises that adding this detail would not be beneficial and will withdraw his amendment.

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[Lord Teverson (LD)]

My Lords, onshore wind has a remarkably small footprint in terms of its use of the land, which seems to get forgotten. I can see 30 wind turbines from my bedroom window; the nearest is about 1 kilometre away. They are excellent: they show that renewable energy is working. We should have more of them, and I hope that the Government will continue to make it easier for these developments to take place towards our 2030 objective of decarbonised electricity.

[Lord Offord of Garvel (Con)]

My Lords, I speak in support of the amendments in the names of my noble friends Lord Fuller and Lord Roborough—Amendments 67, 73, 104 and 105. In bringing forward these amendments, my noble friends raise the matter of great importance that is the agricultural industry, which has been subject to punitive measures by the Government in the form of the family farms tax raid.

Amendments 67 and 104 prevent Great British Energy from supporting projects on or owning land that is grade 1, 2 or 3 to prevent the loss of good and high-quality agricultural land. Alternatively, Amendments 73 and 105 encourage GBE to pursue developments on land that is designated grade 4 or 5 —essentially, the worst agricultural land. It appears obvious that the Secretary of State, who directs Great British Energy, will support an approach that balances the need for renewable energy with the need to preserve our nation’s food security.

As explained by my noble friend Lord Fuller within his allotted time, the purpose of this group of amendments is to protect the best and most versatile land for food production. I echo the concerns of my noble friend Lord Roborough that some of the largest and most significant solar developments seem to be approved without due consideration given to the quality of the land which is being sacrificed in the process. It is an undeniable fact that grade 2, the best and most versatile agricultural land, is being lost to existing solar developments. That is not merely a matter of farming but of our country’s food security. As my noble friend Lord Fuller so neatly put it, at best Great British Energy may help to turn our lights on and heat our homes, but there will be no food on the British people’s plates.

The question is not whether we should develop renewable energy but where we should develop it. The goal of achieving energy security should not come at the expense of food security. I ask the Minister to give us his full assurance that under no circumstances will the Secretary of State approve developments that undermine our nation’s ability to feed itself.

Recent analysis of land take by ground-mounted solar installations shows a concerning trend: solar developments are disproportionately targeting the best and most versatile land—that is, land classified under grade 1 and 2. Across England, only 17% of land is classified as grade 1, yet 19% of the land used for solar installations falls into this category. This trend violates the general recommendation to avoid productive agricultural land development. In contrast, grade 5 land, the poorest agricultural land, has been disproportionately avoided. That is exactly the type of land that solar projects should be prioritising, yet it remains underutilised. Only 0.5% of solar installations are on grade 5 land, despite such land constituting 8% of England’s agricultural landscape.

The issue is particularly pressing, given the Government’s ambitious target to triple solar power capacity to 50 gigawatts by 2030. As we expand solar energy, more and more land will be acquired. However, unless active measures are taken to ensure that the correct land is used for these installations, we will continue to see the loss of high-quality agricultural land, exacerbating concerns over our nation’s food security. Amendment 73, therefore, is vital: it seeks to ensure that renewable energy development does not come at the cost of our most productive agricultural land.

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[Lord Hamilton of Epsom (Con)]

My Lords, it seems quite extraordinary that no reference is made in this Bill to nuclear because, let us face it, if you want to have clean energy generation, nuclear is the only thing that is available at the moment. My noble friend Lord Trenchard must be right when he says that we should be much more seriously considering both small modular reactors and large ones for our energy supply in future, because that is going to be the only way we really get clean energy. I find it quite extraordinary that this has all been parked somewhere separately when it all should be integrated. We should certainly be looking at the potential for nuclear, because that is where the future lies.

[Lord Offord of Garvel (Con)]

My Lords, I express my gratitude to my noble friend Lord Trenchard for tabling the amendments that we are discussing in this group. All three amendments address a matter that many in this House have questioned—that being GB Energy’s role and involvement in the production of nuclear energy and its relationship with Great British Nuclear. Amendment 85B requires GB Energy to consult with GB Nuclear before it invests in nuclear energy. Amendment 85C requires GB Energy to report on the impact of its investments in nuclear energy and private investments in the UK nuclear industry. Amendment 118C ensures that the Secretary of State reports on the impact of the Bill on the competitiveness of the UK nuclear industry.

Nuclear energy will be critical to achieve the Government’s net-zero targets. However, historically, those on Government Benches have dismissed nuclear’s role in the energy mix. Let me draw on the Government’s own nuclear record. Since the 1970s no new nuclear power stations have been built under a Labour Government. Instead, all nuclear power stations still in operation were commissioned under Conservative Governments. Labour’s longest-serving shadow Energy Minister, Alan Whitehead, even said that we do not need nuclear. I disagree, and I am sure many in this House do too and I call on the Minister to update Labour’s thinking on this matter.

If the Government, via GB Energy, recognise the importance of nuclear, it is only right that they consult with GB Nuclear before investing in nuclear technology. Can the Minister confirm exactly what relationship is envisaged between GB Energy and GB Nuclear? Have the Government already consulted with GB Nuclear on the functions of GB Energy, and if so, will they continue to do so? We urgently need the development of new nuclear sites, as energy generated from nuclear technologies is both reliable and low carbon. Therefore, it is essential that GB Energy and GB Nuclear have a more formal collaboration. Industry bodies such as the Nuclear Industry Association have called for greater clarity on the interaction and relationship between the two organisations.

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[Lord Hamilton of Epsom (Con)]

My Lords, I am very keen that my noble friend Lord Ashcombe should reintroduce the whole prospect of hydrogen, because I thought that it was rather rubbished by my noble friend Lord Roborough, who said that it was all going to be much too expensive. I think that the future lies in hydrogen, and I hope that it will be developed much more cheaply, so that it can be available for so many different uses, not only in power stations but also in aircraft, heavy vehicles and so forth. As I understood it, it was being developed and the price was coming down, but maybe I am completely wrong on that. I would be very grateful to hear from the Minister what the position of liquid hydrogen is: whether it is still prohibitively expensive and not likely to be a solution to our problems or whether the future lies in liquid hydrogen.

[Lord Offord of Garvel (Con)]

My Lords, as we have heard throughout the debate on this Bill, as well as in the other debates in this House on the future of our energy, we know that renewable energy by its nature will always be unreliable. It is, by its nature, intermittent. Many of us have expressed concern that this undeniable fact will result in shortages. As has been mentioned by my noble friend Lord Murray, last year Europe in fact experienced several episodes of Dunkelflaute. On the other hand, as has been highlighted by my noble friend Lord Ashcombe, what happens to energy supply in periods of persistent sunshine and wind?

Unfortunately, we find ourselves in a position in which the national grid is unable to cope with excess renewable energy supply. Grid capacity is a particular challenge for the offshore wind sector, because those sites are necessarily located far from sources of demand. Currently, the national grid pays renewable energy generators billions to reduce supply when there is more renewable electricity than the grid can manage. This problem will only be compounded by the Government’s ambition to build renewables faster than we can develop and connect them to the grid.

With that in mind, we should address the fact that the timeframe for obtaining grid connections for a new energy project can reach 10 years. Not only this, but a project without a grid connection today may not come online until well after the Government’s target of grid decarbonisation by 2030. There is no doubt that the renewable energy projects that will supposedly be supported by the establishment of Great British Energy will face the same connectivity difficulties.

As my noble friend Lord Ashcombe highlighted, over £1 billion was coughed up by bill payers last year to pay renewable energy generators to curtail excess supply, including £20 million in one day alone. This will only worsen under the Government’s agenda, and it will be consumers who will bear the cost via their energy bills. If renewable generation is scaled up so rapidly without the grid capacity to transmit it to the areas of high demand, those curtailment payments will only increase. We know that excessive curtailment fees are already being paid to wind farm operators who are generating more power than can be used. This is paid to get operators to switch off their wind farms and avoid overloading the grid. How ridiculous is that? We expect these curtailment costs only to rise under the new Government’s regime, and by 2030 it is possible that there will be a staggering £20 billion a year in subsidies and in maintaining back-up grid capacity. That equates to roughly £700 per household each year.

I turn to the amendments in this group in the name of my noble friend Lord Murray of Blidworth, which I support in their entirety. Amendment 85E requires Great British Energy to

“report annually on the impact of each investment it makes on the levels of curtailed renewable energy in the UK”.

Amendment 85D requires Great British Energy to

“invest in additional energy storage infrastructure to store excess renewable energy”,

and thereby minimise the cost of curtailing excess supply. In tabling these amendments, my noble friend has addressed many of the issues that I have discussed.

It is essential that the establishment of Great British Energy does not cost the taxpayer more than the already allocated £8.3 billion, and that it assesses the impact of its investments on the cost of wasting excess supply and prioritises the means of storing renewable energy. I hope that the Minister will agree.

[Lord Hunt of Kings Heath (Lab)]

My Lords, I am grateful to the noble Lord, Lord Murray, for Amendments 85D and 85E, which are focused on the issue of renewable energy curtailment. I must repeat, as I said earlier, that this debate is, in essence, about technologies, rather than the appropriate use of the directions in Clause 6. However, I assure the noble Lord that we are determined to increase significantly the deployment of short-term and long-term duration electricity storage to reduce curtailment.

I, too, was present in the debate on energy storage last Thursday, which was very interesting. My noble friend Lady Gustafsson recognised then that a variety of energy storage technologies would be needed to achieve net zero. That includes technologies such as lithium batteries and pumped hydropower storage—which can deploy at different scales and provide output over different lengths of time—and it can include emerging technologies, such as liquid air energy storage and flow batteries. Low-carbon hydrogen, too, can act as a low-carbon flexible generating technology and provide very long duration energy storage.

Today, around 7 gigawatts’ worth of grid-scale electricity storage is operational in Great Britain. This is made up of 2.8 gigawatts of pumped hydrogen and 4.3 gigawatts of grid-scale lithium battery storage. I add that we have announced a long-duration energy support scheme. We will publish a technical document in February. Applications will open in the second quarter, and we hope that the first agreements under the cap and floor system will take place in early 2026. It will be technology neutral, and it will be for projects that could not be built without the cap and floor system.

There are some developments in train: SSE, for instance, is doing exploratory tunnelling in the north of Scotland for pumped-storage hydro. Highview Power has reached FID in terms of liquid air energy storage near Carrington. Points on curtailment costs are well made; we see it as a key priority to accelerate network infrastructure to increase capacity on network and reduce constraints.

I do not think there is a lacuna; the Bill is constructed in the way it is. We have Clause 3 and the strategic statement of priorities in Clause 5. I hope I have reassured the noble Lord that the substantive point he raises is important and accepted by the Government.

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[Lord Ashcombe (Con)]

My Lords, it is worth stating what is going on out there on the national grid right now. Gas and wind are supplying between 42% and 43% each; therefore, it is the gas price that is driving the price for everything. We are in the unusual position right now where we are exporting electricity to the continent because they need it more than we do. To have 42% driven by gas, with the price at over £100 a megawatt hour at the moment, seems worrying, and what we can do to curtail that must be important; but gas is not going away any time soon, and we have to be careful about how we moderate the reduction in it.

[Lord Offord of Garvel (Con)]

My Lords, I whole-heartedly support Amendments 85G and 85H in the name of my noble friend Lord Fuller, as well as Amendment 85F in the name of my noble friend Lord Murray of Blidworth. The objects of GB Energy, as outlined in Clause 3, state that they are restricted to

“facilitating, encouraging and participating in ... the production, distribution, storage and supply of clean energy”.

The Minister has made a virtue in this House that the Bill does not focus on any one particular technology or solution, but would it not be correct to assume that GB Energy has actually been set up in an effort to boost the production of renewable energy in the UK? Otherwise, what is the investment of £8 billion to be spent on? The Government say that GB Energy is part of their mission to make the UK a clean energy superpower, but how can we ensure that it delivers on these promises? I have seen in both the previous days of debate in Committee that the details in this Bill are at best scarce, and the Bill makes no provisions to report on the impact of each investment that GBE makes on renewable energy production. How, again, are we supposed to measure its success in delivering for the British people, as promised throughout the election campaign?

It is in the public’s interest to disclose the impact of GBE’s energy investments and activities on the level of energy produced from renewable sources, whether that be solar, wind or hydrogen. It seems incredible that this Bill, which establishes a so-called clean energy company, does not include a means by which GB Energy is required to report on the generation of clean energy. Indeed, this is an alarming oversight.

My noble friend Lord Fuller has rightly outlined an additional reason as to why the reporting on the impact of GB Energy’s investment on the levels of renewable energy generated is so critical. As has been mentioned many times, Europe has recently experienced another dunkelflaute. Just last month, for three consecutive days, more than 60% of electricity generation in the UK had to come from gas, as wind output dropped. At the same time, our partners in Germany paid the highest average price per megawatt since the Russian invasion of Ukraine, with a lack of wind being the main factor behind this escalation.

It is essential that renewable energy generation associated with GB Energy’s functions is closely monitored, if we are to maintain our energy security. The Secretary of State has said that one of the aims of GB Energy would be to improve our energy security— this, too, is mentioned in Clause 3. However, I am deeply concerned that the Government’s tunnel-visioned focus on green energy alone risks threatening our energy security. I am sure the Minister will want to see the successes, maybe even the failures, of GB Energy in helping to generate renewable energy. If this is true, he will have no problem in offering support to the amendments in my noble friends’ names. Ultimately, these amendments require the most basic and necessary levels of reporting.

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[Lord Reay (Con)]

My Lords, I will speak to Amendment 131 tabled by my noble friend Lord Lilley, to which I have added my name. It would require GB Energy to publish a report on the projected costs of long-duration energy storage. I regret that I was unable to speak at Second Reading, for which I apologise.

This is an ambitious Bill that is part of an ambitious policy. It is a policy that is fundamental to a frighteningly large part of our lives: the availability of energy, the dependability of energy supply and the cost of energy. According to whether Governments succeed or fail in these areas, economies sink or swim, and functions slide into dreary and dangerous dysfunctionality. They bloom like an English country garden in midsummer or wither, shrivel and slumber like any garden anywhere on these islands in coldest, darkest, most forbidding winter.

Energy is a policy area to which the precautionary principle should clearly apply. It is not an area where we should make a habit of leaping about in the dark or buying pig after pig in poke after poke or moving forward, fingers crossed, on a wing and a prayer.

It is the very opposite of such an area. It is a subject on which clear-sighted, far-sighted sceptics, expert sceptics, industry sceptics, and seriously sceptical scientists and engineers with the national interest at heart deserve a hearing. The stakes are just too great—the Bill is well named—for turning a deaf ear or blind eye in their direction, as indeed we were forcibly reminded last week. Last Monday, the Secretary of State for Energy was bragging that wind power was the UK’s biggest source of electricity in 2024. He said that it was

“a huge moment on our journey away from energy insecurity”.

Less than two days later, NESO issued a warning that there was a close to 30% chance of power cuts that very evening.

Although the operator managed to eliminate this risk by sourcing back-up power, this came at vast expense, as my noble friend Lord Fuller pointed out, with prices rising to a staggering £5,500 per megawatt hour, around 80 times the average price in 2024—the highest energy prices in Europe. These are costs that the consumer and business in this country must bear, and part of the reason why our energy costs are as high as they are. Our industrial energy costs are four times those in the United States and 46% above the IEA median. The Government’s policy of net zero at any cost will serve only to make this dire situation worse.

As many of us know, the operator last week came very close to disaster, with only 580 megawatts of headroom. This is equivalent to less than a single power station cutting out and, just three hours after the peak, two power stations with a combined capacity of two gigawatts did indeed trip out, exhibiting how close we came to the lights going out. This near-miss should be a wake-up call to this Government and a signal that we need to change course. It should be, but will it be? I confess that I am not holding my breath. As things stand, the Government’s policy to pursue intermittent wind and solar and to neglect baseload power such as gas and nuclear in all likelihood will cause the country to run into severe problems in the future and, as we have seen, power cuts could happen any week.

The Government believe that long-duration energy storage will be able to balance energy supply and demand over time. This early-stage technology, driven by hydrogen, will potentially allow storage of energy from renewables over extended periods of time up to months and years. Battery storage, on the other hand, at present only has the ability to store energy in a small capacity for a mere two hours.

In a debate on the Science and Technology Committee’s report on long-duration storage, held on Thursday in this Chamber, the newly appointed Minister for Investment, the noble Baroness, Lady Gustafsson, stated that

“we are going to need colossal amounts of hydrogen storage”.—[Official Report, 9/1/25; col. 845.]

What this equates to are colossal subsidies at colossal expense to taxpayers—a cost that the Government are currently showing no sign of wishing to calculate.

In theory, wind plus green hydrogen appears to be a sensible idea that uses the output of wind farms when not required for the grid to generate green hydrogen, which then gets converted into electricity. The document that underpins the Government’s promotion of long-duration energy storage is, as my noble friend Lord Lilley pointed out, the Royal Society report produced in 2023. The report estimates that, by 2050, public and private costs required to establish long-duration energy storage in the UK will be £100 billion for actual storage, £100 billion to increase associated grid capacity and £210 billion for the wind and solar capacity required.

Unfortunately, there are multiple issues with the report in terms of its costings and assumptions. The report is based on unfeasibly low costs for hydrogen electrolysers, storage and generation. It assumes no leakage of hydrogen stored underground at high pressure for up to a decade. The return on capital assumption posits that investors will be attracted by a 5% return, but a return of two to three times that would be required in today’s marketplace to invest in a risky, early-stage technology such as this.

This is even without the recent sharp increase in gilt bond yields, with the cost of borrowing rising to the highest level for nearly 30 years, which is making every equity investment more expensive. These costings were produced before the surge of inflation a couple of years ago, which means that they are too optimistic. Even if the costs are achievable by 2050, the infrastructure will need to be built using today’s cost base, which will push up the cost base dramatically.

Substantial hydrogen electrolyser capacity will be required, which will need thousands of engineers that the UK does not possess. Perhaps the Minister could tell us where all these engineers will come from, particularly as there is strong international competition for this capacity from the EU and the US, which have significant hydrogen subsidies.

Even after the construction of a long-duration energy storage system, with its vast cost, the overall grid is likely to remain unreliable. The large storage caverns proposed by the Royal Society will take 10 years to fill and could empty in 12 months of extremely low wind. What happens if you have more than one year of very low wind over the 10-year period it takes to restock the storage caverns? Further questions surrounding the viability of this technology include the possible negative reaction of residents to having large caverns of hydrogen situated beneath their homes. The Government’s pronouncements suggest that they will plough ahead with granting subsidies to energy storage developers without having conducted adequate research on this issue.

At the same time that a calamity has narrowly been averted in the energy markets, we are experiencing a developing crisis in the financial markets. It has become apparent to market participants that the Government’s high-tax, high-borrowing Budget has markedly reduced any chance of growth. With the cost of borrowing rising dramatically, the Government’s spending plans are spreading alarm among investors, including the blank cheque written in respect of their uncosted ideological pursuit of net zero.

With expenditure on renewable subsidies now amounting to £11 billion a year, with an additional £2.5 billion for grid balancing and another £1 billion per year for the capacity market, the UK’s industrial and consumer electricity prices have become among the most expensive in the world. This will only get worse with the Government’s commitment of over £110 billion to connect remote wind farms to the grid.

Given the current economic and financial climate, it is more imperative than ever that the Government produce a report and come clean on the costs involved for the taxpayer of their plans for long-duration energy storage. We need an energy policy in which we can have confidence, and that means that, as an absolute minimum, we need more information, clarity and realism.

[Lord Offord of Garvel (Con)]

My Lords, I will speak in support of the amendments of my noble friend Lord Lilley. It goes without saying that long-duration energy storage is essential if the Government are to achieve the clean energy targets that will ensure that fossil fuels are phased out. To replace fossil fuel-derived energy, the Government are ramping up renewables—an entirely unreliable source. It is therefore critical that we use long-duration energy storage if we are to maintain the electricity supply.

As has been referenced by my noble friends Lord Lilley and Lord Reay, the Royal Society has estimated that a substantial volume of long-duration energy storage—enough to supply roughly a third of current annual UK generation—could ultimately be needed. It found that a strategic reserve of long-duration storage will be particularly important to address supply shortfalls from renewables in periods of low wind and rain. If the Government are to achieve a fully decarbonised electricity system by 2030, they must make provisions for substantial energy storage to manage the gaps between increased supply and demand. While Britain has just 2.8 gigawatts of long-duration energy storage capacity from four pumped hydro-plants in Scotland and Wales, it is believed that terawatt hours of long-duration electricity storage will be needed to decarbonise the grid in the whole of the UK.

The storage of power increases the flexibility of the grid and minimises likelihood of wasted renewables in cases of excess supply. Therefore, if GB Energy contributes to a large-scale rollout of long-duration energy storage, it would increase the availability of renewable power and may even lower consumer energy bills. The previous Government consulted on policy mechanisms to support low-carbon storage and introduced a target in the British Energy Security Strategy to deploy enough to balance the electricity system. We also moved to reform energy systems, establishing the future system operator, and consulted on a long-duration energy storage business. Finally, the previous Government addressed the challenging economics of long-duration energy storage projects and activity, and they consulted on introducing a cap and floor mechanism to implement additional financial support mechanisms.

Clause 3 states that GB Energy’s objects include facilitating and participating in the storage of clean energy. I therefore ask the Minister to confirm exactly how GB Energy will be involved in the storage of electricity generated from these renewable sources. It is critical as it prioritises the storage of energy to avoid the risk of blackouts, price fluctuations and our reliance on energy imported from foreign states. We cannot afford to compromise our energy security even more by failing to do so.

In conclusion, the development of long-term energy storage technology must occur alongside that of the national grid. We cannot increase our energy storage if we have no means to transmit and distribute the electricity. We face an immense but urgent challenge in scaling up our clean energy infrastructure, whether that be storage or distribution. I look to the Minister to clarify what proportion of the allocated £8.3 billion of taxpayers’ money will be invested in long-term energy storage solutions.

Great British Energy Bill

Lord Offord of Garvel Excerpts

Committee stage
Wednesday 15th January 2025 Grand Committee

[Lord Offord of Garvel (Con)]

My Lords, I speak in support of Amendments 88, 89 and 92, which stand in the names of my noble friends Lady Noakes and Lord Trenchard and other distinguished colleagues, including the noble Lords, Lord Vaux of Harrowden and Lord Cameron of Dillington. These amendments, although technical in nature, are vital to ensure that Great British Energy operates with the highest standards of transparency, accountability and good governance. This is not simply a matter of administrative precision; it is the fundamental issue of public trust.

Amendment 88 ensures that GBE files its reporting accounts within the same timeframe required of public companies under Section 442 of the Companies Act 2006. This alignment with established statutory requirements is essential. It demonstrates that GBE, although a public body, will not be afforded preferential treatment or lesser obligations than private enterprises. The public expect and deserve this parity, especially given GBE’s role as a steward of taxpayers’ funds.

Amendment 89 introduces additional requirements for GBE’s annual reporting accounts. Crucially, it provides the Treasury with the flexibility to define additional reporting requirements over time. This ensures that GBE can adapt to evolving priorities and maintain accountability as it grows. It is worth emphasising that comprehensive and transparent reporting is not an administrative burden; it is a cornerstone of effective governance. This amendment guarantees that GBE will meet not only the letter of the law but the spirit of public accountability. By ensuring this level of scrutiny, we are demonstrating a commitment to good governance that transcends political or ideological divides but sends a clear message that public funds and the public interest will always be protected.

[Lord Hunt of Kings Heath (Lab)]

My Lords, I am grateful to noble Lords who spoke in this debate, both today and in our deliberations on Monday. It seems quite a long time ago since then, and I am looking forward to a very constructive engagement today and welcome the contributions that all noble Lords are going to make.

Let me say at once that I very much understand the importance of information being provided in order to judge the performance of GBE and of it being held to effective account. There is no disagreement at all between me and other noble Lords on this. Noble Lords will know, as the noble Baroness, Lady Noakes, explained very clearly in her remarks on Monday, that her Amendment 88 requires GBE to file its annual reports and accounts within six months from the end of its accounting reference period. As she said then, and as noble Lords have repeated, this aligns with the Companies Act 2006 for public companies whose shares are publicly traded. Of course I agree that a six-month filing period is appropriate for public companies. Financial markets need up-to-date and timely information on the performance of a company, as do its range of stakeholders and shareholders, to help them make informed decisions when companies are seeking to raise capital.

I also understand why noble Lords wish this discipline to be applied to GBE, but it is a private limited company owned wholly by the Crown. It is not unreasonable for the Government to say that, on that basis, we should be in line with the Companies Acts requirements, which set a nine-month filing period for private limited companies. I should also say that this is an arrangement applied to most government-owned companies: for example, the National Wealth Fund, the National Energy System Operator and the Low Carbon Contracts Company. I know that the noble Baroness, Lady Noakes, was concerned about the filing deadline, but it is also the case that the vast majority of these organisations, government-owned companies, file their accounts well in advance of the statutory requirement.

I understand the point that the noble Viscount, Lord Trenchard, made about public interest in Great British Energy, and I welcome that. Indeed, I want GBE to be well-known and seen as spearheading the drive we wish to see in relation to Clause 3 and the statement of priorities in Clause 5. We wish GBE to be as successful as possible.

My point is that, in a sense, what is in statute in relation to the Companies Act is a minimum requirement because, as GBE is owned by the Secretary of State, it will be subject to the usual mechanisms that apply in the public sector. They are put in place to ensure that the public interest is discharged and proper public accountabilities are in place.

On Monday, the noble Lord, Lord Teverson, made an interesting point: one of the concerns some people have is that, because of GBE’s structure and because it is publicly accountable, it will be subject to a considerable number of the controls put in place for bodies that fall within public accountability. The key question is: can we ensure that GBE has sufficient operational independence to perform effectively in its work? There are a number of issues here around the way it will work in future.

I should also say that the annual report and accounts are not the only means of scrutinising the funding allocated to GBE. All funding to GBE must be voted on by Parliament; because of that, it will be scrutinised through the supply and appropriations debates in the other place.

Amendment 89 in the names of the noble Lord, Lord Vaux, and the noble Baroness, Lady Noakes, proposes specific topics to be included in the annual reports and accounts of Great British Energy, as well as the granting of an additional power to His Majesty’s Treasury to require further information. I can confirm that much of the proposed content will already be included and publicly available in the annual report and accounts, as required by Clause 7, and will be laid before Parliament. As an example, the financial assistance details under new paragraph (a), proposed by this amendment, will be included in the accounts of GBE. Details are likely to include issued share capital and items on the balance sheet of the company, such as borrowing from government if that method has been utilised.

The noble Lord, Lord Vaux, and my noble friend Lady Young of Old Scone were concerned that Great British Energy would need only to follow the provisions of the Companies Act in preparing its annual report and accounts. However, I can assure them that that is not the case. GBE will adhere to the additional reporting requirements for government-owned companies over and above the reporting requirements under the Companies Act. These include the obligation to follow the Treasury’s directions on accounts through the powers extended in the Government Resources and Accounts Act 2000, laid out in the government financial reporting manual and related “Dear Accounting Officer” letters. The most recent of these account direction letters requires bodies to give a true and fair view of the state of affairs, including net resource outturn, the application of resources, changes in taxpayers’ equity and cash flows for the financial year.

Furthermore, GBE will be required to report on its governance around exposure to and risk of climate-related scenarios in its operations, as set out by the Task Force on Climate-Related Financial Disclosures. Finally, any future funding of GBE will be subject to agreement through a government spending review, or another mechanism, as the Government see fit.

Amendment 92 in the name of the noble Baroness, Lady Noakes, proposes to require the Comptroller and Auditor-General to be the external auditor of Great British Energy; I think she said on Monday that it is a probing amendment. I am very happy to reassure noble Lords in this case. It is already the case that the Comptroller and Auditor-General will be the external auditor of Great British Energy. The company will also need to comply with the provisions set out in the Treasury’s Managing Public Money document, which requires the Comptroller and Auditor-General to be the external auditor for non-departmental public bodies such as Great British Energy. The requirement will also be set out in the framework document for Great British Energy, which we will debate shortly.

Amendment 90A, in the name of my noble friend Lady Young, seeks to require additional reporting from Great British Energy. Again, I assure her that much of the information that she seeks will be provided in GBE’s annual report and accounts, as a matter of course. The annual report and accounts will include key achievements and milestones, general business information relating to its strategic direction, a review of the company’s performance, challenges and future outlook, as well as financial statements and resourcing levels. It will also include reporting in line with the recommendations of the Task Force on Climate-Related Financial Disclosures.

GBE may also make more information available through reporting, such as when projects or investments are announced. We want to set this company up to be transparent and accountable, with a reporting regime appropriate to its company basis and status. The accountability of Ministers to Parliament for its performance will also be in place.

We very much take the point about the need for this organisation to be transparent and accountable. In the light of this debate, I will set out how this all comes together in detail and send a note to noble Lords. I hope that provides some greater reassurance.

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[Earl Russell (LD)]

My Lords, I shall speak briefly on this group of amendments.

I generally give my support to Amendment 93. I understand that these things are being done quickly and urgently to get GBE established and that the Government need to get that done, but there is a general lack of detail in the Bill and we do not have the framework agreement. If the Minister could update the Committee on where that framework document is and what stage it is at, that would be useful. In the interests of trying to find a compromise and a way forward on these issues, I do not know whether it might be possible for the Minister to provide the equivalent of heads of terms or to say something from the Dispatch Box about what he would expect the framework document to cover or to send us an outline of what is likely to be in that document. We are keen to support the principles of this Bill, but the Bill is extremely short and lacks detail.

On the other side of the fence, there is a slight feeling that we are being asked to approve things without knowing what it is we are approving. If it were possible to find a way forward on these issues before Report, that would be appreciated, but I am interested to hear from the Minister what stage these documents are at and what impediments there may be beyond the Minister’s control in these matters.

[Lord Offord of Garvel (Con)]

My Lords, I thank my noble friend Lady Noakes, in her absence, for her amendments in this group. In fact, this amendment, Amendment 93, ties closely with Amendment 125 in my name, which would ensure that this Bill does not come into force until a financial framework document has been published. Together, these amendments address an essential issue in the governance of GBE: the need for proper financial oversight and clear frameworks that ensure that this body is held accountable. That is the reason why I support Amendment 93 and why it is so critical to the Bill—because it would require the Secretary of State to prepare a framework document that sets out not just the operating principles but the financial principles through which GBE will pursue its strategic objectives.

Without this clear framework, GBE would operate without the financial clarity and accountability required to protect public funds and to ensure that GBE’s financial practices align with the UK’s broader energy strategy. A financial framework is not just a bureaucratic detail; it is fundamental because the energy sector is complex and fast-moving. GB Energy will be responsible for substantial public investment. Without this financial framework, there is a risk of financial mismanagement and inefficiency or lack of transparency. The framework simply provides clear guidelines on budgeting, expenditure, revenue generation and risk management; it also ensures that GBE’s financial decisions align with the Government’s energy and climate goals, such as achieving net-zero emissions and maintaining energy security.

[Lord Hunt of Kings Heath (Lab)]

My Lords, I am grateful to the noble Baroness, Lady Noakes, and the noble Lord, Lord Vaux, who spoke in her absence. As the noble Baroness raised earlier on in our debates, her amendment inserts an additional clause requiring the Secretary of State to prepare and publish a framework document setting out the principles underpinning the relationship between the Secretary of State, my department and other relevant public bodies and also requires financial and operating principles to be included in that document.

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Moved by

[Lord Offord of Garvel]

94: After Clause 7, insert the following new Clause—
“Review of effective delivery(1) The Secretary of State must appoint an independent person to carry out reviews of the effectiveness of Great British Energy in—(a) delivering its objects under section 3,(b) meeting its strategic priorities under section 5, and(c) complying with any directions given under section 6.(2) After each review, the independent person must—(a) prepare a report of the review, and(b) submit the report to the Secretary of State,as soon as is reasonably practicable after the completion of the review.(3) The independent person must submit to the Secretary of State—(a) the first report under this section within the period of 12 months beginning on the day on which this Act comes into force, and(b) subsequent reports at intervals of no more than 12 months thereafter.(4) On receiving the report, the Secretary of State must, as soon as is reasonably practicable in each case,—(a) publish the report,(b) lay a copy of the report before Parliament, and(c) prepare and lay before Parliament a response to the report’s findings.(5) In this section, references to an “independent person” are to a person who appears to the Secretary of State to be independent of—(a) the Secretary of State, and(b) Great British Energy.”Member’s explanatory statement
This amendment would require that the Secretary of State appoints an independent person to review the effectiveness of Great British Energy in delivering its objects, meeting its strategic priorities, and complying with its directions.

[Lord Offord of Garvel (Con)]

My Lords, I shall move Amendment 94 and speak to the amendments in this group, which, once again, address the review, scrutiny and governance of a publicly owned company.

It is alarming that so many in this House have had to table so many amendments to ensure that GB Energy undergoes proper independent review and governance. We find ourselves in the unfortunate position in which provisions to ensure the thorough review and governance of GB Energy are missing from the drafting of the legislation. This is rather strange. Why should publicly owned companies, funded by billions of pounds, not be subject to reviews by independent bodies or have to report on their successes or failures? The incoming chair himself has stated that “independently run” will mean “excellent governance” and that he will ensure that this is the case, but how? Although the Minister claims that these amendments, which would indeed ensure excellent governance, do not need to be included in the Bill, I strongly disagree. He claims that there will be many opportunities for review by the Secretary of State and, ultimately, for the usual sort of public scrutiny, but how will this be the case when the Bill does not include a single measure that requires GB Energy to be reviewed or allows for public scrutiny?

I am not alone in questioning the lack of governance to which GB Energy is presently subject. Marc Hedin, head of UK and Ireland research at Aurora Energy Research, also asked:

“what are the governance arrangements to ensure that Great British Energy carries out its duties and focuses on its remit? ”.—[Official Report, Commons, Great British Energy Bill Committee, 8/10/24; cols. 20-21.]

Amendment 94 in my name seeks to address this shortcoming. It requires the Secretary of State to appoint an independent person to review the effectiveness of GBE in delivering its objects, meeting its strategic priorities and complying with its directions. The amendment is closely aligned with Amendment 103, in the names of the noble Lords, Lord Vaux of Harrowden and Lord Cameron of Dillington, and my noble friend Lady Noakes. While demanding an independent review of the success or failure of GB Energy in achieving its objects, the amendment neatly requires a review of the company’s impact on private investment.

I draw your Lordships’ attention to Section 9 of the UK Infrastructure Bank Act, entitled, “Reviews of the Bank’s effectiveness and impact”. Under that section,

“The Chancellor of the Exchequer must appoint an independent person to carry out reviews of … the effectiveness of the Bank in delivering its objectives”,


and the results must be laid before Parliament. If the UK Infrastructure Bank—now known as the National Wealth Fund—has to undergo an independent review of its performance, why should GBE not face the same? It does not make sense. The Great British Energy Bill is almost a carbon copy of the UK Infrastructure Bank Act but with one glaring difference: provisions to ensure sufficient governance.

I hope that the Minister has listened carefully to the concerns I have raised and will be receptive to the worries other noble Lords will undoubtedly raise on this issue. I beg to move.

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[Lord Hunt of Kings Heath (Lab)]

My Lords, this has been a very interesting debate and I am grateful to noble Lords for what they have said. I will start with Amendment 102, tabled by the noble Earl, Lord Russell, and supported by the noble Viscount, Lord Trenchard. As he said, the amendment focuses on Great British Energy’s relationships with its key stakeholders and would require the company to publish a report every two years detailing its relationship with a number of named public bodies.

As I have already said, we of course expect and want Great British Energy to enter into a number of partnerships or relationships with other public bodies. This will include public bodies beyond those highlighted by the noble Earl, including, for example, those operating in the devolved Administrations—although I agree with him very much about the importance of the relationship with the Crown Estate.

I think it was implied in what I said earlier that we are absolutely certain, as part of the rigorous reporting requirements that the organisation will need to take part in through its annual reports and accounts, that it will report on activities undertaken as part of these partnerships. That seems to me a perfectly sensible request, which I can affirm readily. In view of that, I am not sure that you need a separate report, but we can make it very clear to GBE that we expect it to report on this regularly. We have already publicly committed to setting out how Great British Energy and the National Wealth Fund will collaborate and complement each other. I can assure noble Lords that we have made the same commitment on Great British Energy’s relationship with Great British Nuclear.

In terms of Great British Energy’s relationship with Ofgem and the National Energy System Operator, again, we would expect GBE to be subject to the same legal and regulatory frameworks as other entities. Clearly, when it comes to the Crown Estate, I readily say that, of course, GBE will report on its relationship, just as the noble Earl said. The Crown Estate will be doing similar, and we hope that there will be a consistency of approach in their reports. I am sure that there will be.

Turning to Amendments 94 and 103, which would require independent reviews of Great British Energy’s effectiveness, I thank the noble Lords, Lord Offord, Lord Vaux and Lord Cameron, and the noble Baroness, Lady Noakes, for putting their names to them. We all agree that Great British Energy needs to be accountable, transparent and clear about how it is delivering against its objectives and the statement of strategic priorities. The Bill already ensures that GBE will provide regular updates through its annual reports and accounts. These documents will be laid before Parliament, ensuring public accountability. Clause 5 provides that GBE must “act in accordance” with the priorities set out by the Secretary of State. To ensure this, Great British Energy must publish a strategic plan on how it will deliver those priorities, and it will update this plan regularly.

On the question, generally, of a review, I certainly understand the point that noble Lords have made and agree that reviews are important. I am prepared to consider the principle of a review between Committee and Report. I would not want to get into a debate about how regular those reviews should be. It is important that GBE has a good run before it is subject to such a review. Equally, I do not think you want a review happening on a regular annual basis because that would detract from its ability to perform effectively, but I understand the principle of a review. I will take this away without commitment at this stage, but I am happy to talk to noble Lords between now and Report about it.

Coming back to additionality, we obviously agree that it is an important principle, and we would expect Great British Energy to learn from the UKIB/National Wealth Fund approach. Of course, GBE has rather a wider role than the National Wealth Fund, particularly in that it is not just an investor but a developer, and it has an important future role to play in trying to get rid of some of the barriers to investment that we have seen in the energy sector.

Having said that, I think additionality will be covered. Equally, we accept that undertaking reviews from time to time is important. But they should not be done so frequently that they lose impact in what they are there to do. I hope noble Lords will accept that I have tried to be constructive in my response to these amendments.

[Lord Offord of Garvel (Con)]

I thank noble Lords for their contributions to the debate on this group, and I thank the Minister for listening to these concerns, which, as always, are to do just with the review and governance of GB Energy for it to be held to rigorous and proper account. I thank the Minister for considering how he deals with this. In the meantime, therefore, I beg leave to withdraw the amendment.

Amendment 94 withdrawn.

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[Lord Offord of Garvel (Con)]

My Lords, I will speak to the two amendments in this group regarding the appointments of the chairman and board of Great British Energy. These amendments, in the names of my noble friends Lord Frost, Lady Noakes and Lord Trenchard, attempt to fix a glaring omission from the Bill as it stands. As drafted, there is no mechanism to govern the appointments process of the chairman and the board, and this is a concern as we have heard on many occasions that GB Energy will be responsible for £8.3 billion of taxpayers’ money. Those at the top of the company will have enormous responsibility and therefore it is paramount that adequate scrutiny is given to these appointments.

My noble friend Lord Frost has attempted to address these concerns with his amendments in this group. Amendment 98 requires the chairman of GBE to undergo pre-appointment scrutiny in front of the Treasury Committee. This amendment has not come out of the blue: it is exactly the same process as the appointment of the chairman of the Office of Gas and Electricity Markets, otherwise known as Ofgem, which is the regulatory authority for the energy sector. Once the Secretary of State appoints the chair, they must appear before the House of Commons Energy Security and Net Zero Committee. This is also the case for the chairs of the Climate Change Committee and the Nuclear Decommissioning Authority. The Commissioner for Public Appointments keeps a list of significant appointments, which details the public bodies of which the chairs must undergo pre-appointment scrutiny by Parliament. There are no fewer than 40 current chairmanships of public bodies for which this appointments procedure applies.

There is clearly precedent for the chairmen of significant public bodies with responsibility for large sums of public money to be subject to pre-appointment parliamentary scrutiny. If this is the case for these three other public bodies with responsibilities in the energy sector, why should the chair of GBE not also be subject to the same pre-appointment parliamentary scrutiny process?

The Bill also fails to detail the procedure for the appointments and tenure of the directors of Great British Energy. As drafted, there are no requirements for the composition of the board, no limits on the number of directors that may be appointed and for how long a director may serve on the board, and no statutory duties to be conveyed on the board. The amendment from my noble friend Lord Frost plugs this gap.

Once again, there is precedent for having this level of detail regarding appointments to the board of a major public body. The Utilities Act 2000, which created Ofgem and which—we must not forget—was passed by the last Labour Government, did exactly that. Schedule 1 to that Act lays out, for example, that:

“An appointment of a person to hold office as chairman or other member must be for a term of not less than 5 years and not more than 7 years”.


So that Act includes details of the tenure and the appointments of the chairman and the board, yet the Bill does not. I ask the Minister why Labour thought it pertinent to specify the executive composition of Ofgem but does not believe it necessary to do the same for Great British Energy.

[Viscount Trenchard (Con)]

My Lords, I congratulate my noble friend Lord Frost on his two amendments in this group, which deal with the governance of GBE. There is, as has been said in previous debates, almost nothing in the Bill about the corporate structure of GBE or how it will be managed. I welcome my noble friend’s proposals to require that the chair should be full time and be required to attend the office in Aberdeen, from which it follows that he must be based there. That would also ensure that the person will be fully committed and be a real check on the powers of the chief executive, who may need oversight in interpreting the priorities and actions needed in response to directions received from the Secretary of State. My noble friend’s proposal that the board must comprise at least five and no more than eight directors makes perfect sense and provides for the assembly of a group of people with the appropriate skills and experience.

I have also considered and support Amendment 101 in the name of the noble Earl, Lord Russell, which requires scrutiny of any proposed appointments by the Energy Security and Net Zero Committee of another place. That committee should ensure that an appropriate balance of skills and experience among the directors is maintained at all times.

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Moved by

[Lord Offord of Garvel]

106: After Clause 7, insert the following new Clause—
“Annual report: impact on coastal communities(1) Within 12 months of the day on which this Act is passed, and annually thereafter, Great British Energy must annually report on the impact of their activities on coastal communities.(2) The Secretary of State must lay a copy of these reports before Parliament.”Member’s explanatory statement
This would require Great British Energy to annually report on the impact of their activities on coastal communities.

[Lord Offord of Garvel (Con)]

My Lords, I rise to speak to my Amendments 106 and 107 in this group and to support my noble friend Lady Bloomfield’s Amendment 118. These amendments are closely aligned with Amendments 27, 28 and 29 in the name of my noble friend Lord Effingham, which were debated on the first day in Committee. Amendment 106 introduces a new clause that ensures that Great British Energy must annually report on the impact of activities on coastal communities. Amendment 107 similarly requires GB Energy to report on its impact on commercial fishing.

The Government have committed to substantial wind developments, promising to double onshore and quadruple offshore wind by 2030. It goes without saying that there is a difficult balance to strike when undertaking considerable developments while minimising the damage to the communities and industries that are most likely to be affected. That said, we must not lose sight of the communities and sectors to which GB Energy’s activities may be costly. I remind noble Lords that the Government have said that GB Energy will work closely and collaboratively with local communities to achieve their clean energy targets. I therefore see no reason why they should not consult and report on the impact of its functions on the communities they suggest will reap the rewards of GB Energy.

The impact of GB Energy’s activities and the Government’s green energy agenda on communities throughout the UK has been a recurring theme and a point of serious concern throughout the debate on the Bill. Last year, I highlighted the burden facing rural communities in particular, as the Government looked to ramp up transmission and distribution infrastructure. It is essential that the energy transition, and GB Energy’s role within it, do not come at the expense of the communities and associated industries.

Many in this House urged the Minister to ensure that the Secretary of State and GB Energy consult local communities. I point to the noble Baroness, Lady McIntosh of Pickering, who rightly raised concerns that offshore wind development risks forcing fishermen out of the seas in which they operate. It is essential that we carefully consider the use of our country’s marine space. Preliminary results from the Plymouth Marine Laboratory concluded that all the proposed offshore wind farms in the UK are predicted to impact fishing, with fishermen pointing to both financial and safety concerns resulting from the construction and operation of offshore wind farms. Ultimately, this is an issue of spatial competition.

Amendment 115 of the noble Lord, Lord Teverson, is broader, addressing the impact of GB Energy’s activities on both fishing and commercial shipping. He is right to extend the scope to commercial shipping. I turn to the UK Harbour Masters’ Association, which notes the challenges faced by the sector from offshore renewable energy installations. It calls for a report on the impact of such installations on the shipping industry and insightfully draws a link with commercial fishing, noting that fishing vessels may be squeezed out of their usual channels and enter shipping routes to avoid sites of renewable energy generation. We must not ignore the worries and recommendations of these industry bodies. With this in mind, many environmental, biodiversity and wildlife bodies have called for GB Energy to deliver for nature alongside climate. I welcome and support my noble friend Lady Bloomfield’s Amendment 118, which requires GB Energy to make

“a positive contribution to nature recovery”.

Careful consideration is key to the success of GB Energy. We must not isolate but include those communities and sectors that will be most impacted by the Government’s attempts to create this green energy superpower. Additionally, we ought to consider how GB Energy will act in a way that seeks to benefit both the climate and biodiversity, which are inextricably linked.

I look forward to hearing the contributions of all noble Lords in the debate on this group of amendments, and the Minister’s response.

[Baroness Bloomfield of Hinton Waldrist (Con)]

My Lords, Amendment 118 in my name would introduce a new clause which requires GB Energy and its partners to make only investments that make a positive contribution to nature recovery. As my noble friend Lord Offord of Garvel rightly explained, the UK is facing both a climate and a nature crisis.

Nature recovery, the restoration of our country’s biodiversity and the climate are matters that are so closely interwoven. They cannot and should not be considered in a separate capacity. Therefore, if GB Energy is to be established in an effort to achieve clean energy by 2030 and net zero by 2050 and to reduce the UK’s carbon emissions in an attempt to tackle climate change, GB Energy ought to operate in a way which looks to make a positive contribution to nature recovery.

The Government themselves recognised the ties between climate and nature recovery. Indeed, they were elected on a manifesto which said:

“The climate and nature crisis is the greatest long-term global challenge that we face”


and

“The climate crisis has accelerated the nature crisis”.


The omission of a nature recovery duty is another shortcoming of the Bill. Climate change and the loss of biodiversity both compound and reinforce one another. The Royal Society has acknowledged that a flourishing ecosystem has the ability to combat the effects of climate change. We know that the UK’s biodiversity is under serious threat, yet we know that natural habitats have a significant role to play in absorbing and storing carbon and regulating the climate.

Wildlife and Countryside Link has called for nature recovery to be put in the Bill and the amendment in my name would do just that. It recognises that restoration of the UK’s nature has the ability to provide up to a third of the climate mitigation effort that is required if we are to achieve net zero by 2050. Rightly, it describes the Government’s failure to include a nature recovery duty as a “missed opportunity”.

A nature recovery duty ought to be a general principle of GB Energy. It would hold the Government to account on the manifesto they were elected on. It would introduce a clear condition, ensuring that GB Energy and its partners operate in a way which seeks to contribute to the biodiversity targets introduced by the previous Government in the Environment Act.

Nature recovery must not be seen to inhibit the facilitation of the production, distribution and storage of clean energy. Instead, it must go hand in hand with the objectives of GB Energy, helping to protect and restore carbon-rich habitats. Indeed, it is complementary to the objectives of GB Energy surrounding clean energy generation and distribution.

We must be cautious that the establishment of this body to rapidly ramp up the installation and generation of renewable energy technologies does not adversely affect biodiversity in the UK. We must seek to mitigate the risk of further diminishing or undermining the UK’s natural assets. The amendment in my name would do just that by embedding a nature recovery duty into law.

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[Lord Hunt of Kings Heath (Lab)]

My Lords, I am going to have to take advice on that as I do not have the information. However, if there are regulations which apply to companies, GBE will be expected to comply, and to act consistently with general government policy towards biodiversity. I will write to him about that in some detail.

On community benefits, I take the point of the noble Earl, Lord Russell, and other noble Lords. In our manifesto, we committed to ensuring that communities which live near new clean energy infrastructure projects can directly benefit from them. We are considering at the moment how to effectively deliver community benefits for those who live near new energy infrastructure, which includes new energy generation and transmission technology. We are developing guidance on community benefits for electricity transmission network infrastructure and onshore wind, which we will be publishing in due course. We are also reviewing our overall approach to community benefits, both to ensure consistency and quality and to ensure that communities are properly recognised and are able to come with us on our net zero and clean power journey. This includes looking to existing examples in Europe and further afield to see what has worked elsewhere. I look forward to updating the House on our approach to community benefits shortly.

The role of Great British Energy has been set out in its founding statement, and our commitment to putting local communities at the heart of the energy transition is a very strong component of what we are doing. The local power plan will support local communities to take a stake in the shift to net zero, as owners and partners in clean energy projects. They are important in themselves, as there is a huge appetite in many localities for community power, engagement and involvement. I agree that seeing a tangible benefit for local communities is important in itself, but it is also growing general support for the move to clean power and net zero, which is very important indeed.

We take the noble Lord’s point. It is clearly important, we are working on the details and will be publishing further information in due course. In my first week as a Minister in the department, I visited Biggleswade onshore windfarm, a small windfarm with 12 turbines. The company there is voluntary and there is a good practice trade guideline of paying £40,000 a year to the local community for such things as the local parish church, the community hall and other things. It was really good to see and is an example of what can happen.

[Lord Offord of Garvel (Con)]

I rise to close this group and indeed this sitting of the Committee today. It is worth saying that the chairman of Great British Energy, Jürgen Maier, has acknowledged the importance of communities. He used the words that GBE should be considered “a three-party partnership”, involving the private sector, the public sector and the community. If we also take account of the Labour assurances that have been given to communities along the way, I see no reason why we cannot consider these amendments further at the next stage, but for now, I beg leave to withdraw the amendment.

Amendment 106 withdrawn.

Great British Energy Bill

Lord Offord of Garvel Excerpts

Committee stage
Wednesday 22nd January 2025 Grand Committee

Moved by

[Lord Offord of Garvel]

111: After Clause 7, insert the following new Clause—
“Impact assessment of offshore wind energy installations and generation(1) The Secretary of State must assess the impact on—(a) the environment, and(b) animal welfare standardsof offshore wind energy installations and generation which occur under Great British Energy’s functions.(2) If an assessment under subsection (4) determines that relevant offshore energy installation and generation—(a) is causing environmental damage, or(b) has significant animal welfare issues,then Great British Energy must cease facilitating, encouraging or participating in the relevant activity.”Member's explanatory statement
This would require the Secretary of State to assess the impact on the environment and animal welfare standards of the installation and generation of offshore wind energy technologies.

[Lord Offord of Garvel (Con)]

My Lords, I rise to speak to Amendments 111 and 112 in my name, and in support of Amendment 113, in the name of my noble friend Lord Fuller.

Amendment 111 would require the Secretary of State to assess the impact on the environment and animal welfare standards of the installation and generation of offshore wind energy technologies. Amendment 112, also in my name, similarly requires an environmental impact assessment, but with the focus on the decommissioning of oil and gas structures.

The threat posed by the installation and generation of offshore wind farms and tidal energy is not new to the House. Many will be familiar with these concerns, as we on these Benches raised such issues in Committee in debates on the Crown Estate Bill, and discussed the purpose of electricity generation and the Crown Estate’s role in the stewardship of our seabed.

In considering the amendments in my name and that of my noble friend Lord Fuller, we must again address the Crown Estate’s strategic and unprecedented partnership with Great British Energy, which is estimated to result in up to 30 gigawatts of new offshore wind developments reaching seabed lease stage by 2030. We should expect to see considerable and accelerated growth in offshore renewable energy projects, with offshore wind contributing significantly to these efforts. The UK is the second largest offshore wind market in the world. Under the new Government, allocation round 6 has awarded 5.4 gigawatts of offshore energy contracts across fixed and floating offshore wind and tidal stream.

The speed and scale of these planned developments raises concerns about the impact on the marine ecosystem, as expressed by bodies such as Birdlife International. As stewards of our seabed and investors in and facilitators of offshore renewable energy projects, the Crown Estate and GB Energy have a duty to assess the impact of offshore energy installation and generation. GB Energy must restrict such installation and generation if it is found to cause the environment and its associated animals harm. Environmental concerns linked to the installation of offshore energy projects and the operation of these technologies include, but are not limited to, increased noise levels, the distortion in light pollution, and the potential impact on carbon storage and the biodiversity of the seabed and its composition.

In an overview of the ecological impacts of offshore wind on the marine environment, Birdlife International highlighted the impact of the installation and operation of offshore wind farms on marine animals. It found that the installation and generation of offshore wind technologies produces underwater noise, affecting the echo location behaviour of marine mammals. Porpoises, seals and marine birds have been shown to be displaced by wind farms, with some marine birds displaying consistent avoidance behaviour during breeding seasons. Noise pollution produced by piledriving has also been found to impact the behaviour of pelagic fish.

I have briefly outlined the impacts on our environment caused by offshore wind, yet other technologies also have the potential to cause significant harm. I am grateful to my noble friend Lord Fuller for addressing the threat tidal energy poses to the fish which inhabit our seas. As he will no doubt discuss this impact in more detail, I will succinctly outline the problems associated with tidal energy generation, which is foreseen to increase rapidly in the coming years. Tidal turbines in open water could result in additional mortality caused by rotor blade collision. This is significant, as tidal waters serve as key feeding areas for fish, as well as passage corridors for migratory fish. Other risks include changes in underwater noise, electromagnetic fields and habitats, and displacement.

Finally, I hope the Minister will listen to the concerns highlighted in the amendments in this group and will confirm to the Committee that he recognises that Great British Energy is in a unique and critical position to assess and minimise the impact of offshore energy installations on our environment and the marine life which inhabits it.

[Lord Fuller (Con)]

My Lords, I rise to speak to my Amendment 113. I have previously tabled amendments to the Bill on land, and now I return to the sea, which well fits someone whose territorial designation is Gorleston-on-Sea in the county of Norfolk.

These amendments require the Secretary of State to assess the impact on the environment and animal welfare standards of the installation and generation of tidal energy technologies and their associated cabling. When we consider tidal energy, I am not thinking just about the fish, important though they are—in the tidal races, the machines can mash their flesh—but about sea-birds and the rest of the marine flora and fauna. I am thinking about not just living creatures but the wider environmental effects that may happen slightly away from the installations of the machines themselves, in the associated cabling that links those machines to land—a topic I will return to.

I am not against harnessing this almost inexhaustible supply of energy. The energy is there; it is year-round, predictable and reliable. It deserves to be won and it should be won. But I am not starry-eyed about the practicality of building machines that can survive in the most hostile environment, pounded by the seas and eaten away by salt-water corrosion. I am involved in the liquid fertiliser business, so I know more than most how hard it is to reliably engineer things in these tough, salt-aggressive environments. It is hard to engineer reliability in these unforgiving places, but that does not mean we should not try.

We know that tidal generation is best located where the water flows fastest—where it is choked through the channels, so that the speed naturally increases—so the machines can operate most effectively. Last November, I visited Saint-Malo and saw for myself the world’s first tidal barrage power station, opened in 1966; it is nearly 60 years old. It was a really impressive spectacle. It is cheap energy, but it has not come without cost. Thomas Adcock, an associate professor in the department of engineering science at the University of Oxford, says that there has been a “major environmental impact” on the Rance estuary as a result of the tidal station. He said that

“this would make it very difficult to get permission to do such a barrage again”.

Researchers point to the adverse impacts on marine life of altering sedimentation patterns, as well as the impact on oxygen and nutrient levels in the water. I saw for myself that the fast-flowing water passing through the 24 turbines left nowhere for the fish to go. Sand-eels and plaice have disappeared, and the silting has reduced the number and variation of other fauna. Sand-eels are the subject of the very first post-Brexit EU fishing trade spat, and of course they are the preferred diet of British sea sea-birds, so this is an important matter. It is in the public interest that this all be taken into account, so that mitigations can be put in place.

My amendment would require GB Energy to take into account a number of factors and to continuously monitor them when assessing energy proposals. Examples include the cumulative impacts of the installations when considered alongside the predicted impacts of other projects in the area; transboundary impacts, whereby activities in other countries, such as commercial fishing, may be affected, as we have seen; and interrelationships whereby impacts on one receptor, such as noise, can have a knock-on effect on another and disturb species. Examples include sub-sea noise, which my noble friend mentioned, physical processes such sedimentation flow —we saw this in France—and the updated navigational risk assessment possibly deflecting vessels into the path of other sensitive zones.

For offshore tidal proposals, perhaps with tethered devices, we must have regard to the cables that will transfer the energy to the coast. Coming from Norfolk, I take particular interest in the Cromer shoal chalk beds marine conservation zone. It is one of 91 such protection zones established by the last Government, by an organisation lately chaired by my noble friend Lord Banner. The MCZ is a protected inshore site 200 metres off the north Norfolk coast, extending about 10 kilometres out to sea and covering 321 square kilometres. It protects our diverse species. It is predominantly sandy, but the chalk beds provide a stable surface for seaweeds and static animals to settle and grow, and they are home to the Cromer crab, one of the important exports of our county; it is an important source of economic activity too. So, even though marine energy machines may be some miles offshore, we need to consider the whole cable system as well, particularly if it passes through places like the Cromer MCZ on its way to the grid.

None of this is mentioned in the Bill, which is a slim Bill with fat consequences. The Secretary of State is not required to give directions to GBE to take these important environmental safeguards into account. My previous amendments observed that GB Energy is a company: there is to be a fiduciary board, and it is established under the Companies Act 2006 to promote its private self-interest. So, unless it is constrained, we should not be surprised if GB Energy acts in its private interests, not the country’s interests. If it follows purely commercial principles, why should it need to take the marine environment into account unless it is directed to? This amendment would require the Secretary of State to provide such directions.

I expect the Minister to say, “This is all very well but it is not really necessary”. However, we must learn lessons from the water Bill, which flowed through this House as an example of what to do when you have a private company that is established for public purposes yet strays from the path. I do not want a repeat of that. Success does not look like having successive legislation later to cure the unintended consequences of GB Energy getting carried away because it acts in the private interest, not the public one.

Let us put protections in the Bill now. This amendment would provide a simple safeguard, along with those proposed by my noble friend Lord Offord of Garvel, so that the Secretary of State is directed to ensure that sensible precautions are taken to protect our fisheries, sea-birds and other flora and fauna in the whole end-to-end tidal generation system, from the coast all the way to the grid. I am not trying to block tidal power and I am certainly not seeking to add cost or complexity—still less a set of directions or to provide excessive control. My concern is to make sure that this private body, established for public purpose, acts in the wider public interest—not just its self-interest—as to its environmental responsibility and sets an example to others.

--- Later in debate ---

The key point is that the environmental protections are in place. Noble Lords may say that they need to be improved—and the Government will listen to that—but, equally, I think many of us agree that the current planning system needs reform and that we need to speed up approvals where appropriate. I am not going to fall for the question from the noble Lord, Lord Hamilton; all I can say about what was in the newspapers this morning is that it was purely media speculation. However, lying behind it is the aim of the Government, which will have to be cross-departmental, to reform and speed up the planning system, and potentially to deal with the bat issue. But it must be done while ensuring that we maintain our environmental protections. It is on those protections that we should depend, not on giving Great British Energy a duty that it is not right for it to discharge.

[Lord Offord of Garvel (Con)]

My Lords, in concluding this group, I thank all noble Lords who have made thoughtful contributions on it. We are dealing with the impact of GB Energy and its activities on our environment.

In my concluding remarks, I will briefly mention Amendment 118, in the name of my noble friend Lady Bloomfield, which was discussed previously and is closely tied to the same issues raised in this group. That amendment would create a statutory duty for GB Energy to behave in a way that looks to promote nature recovery. The British Ecological Society has found that nature-based solutions can help to resolve the problems of climate change by reducing atmospheric greenhouse gas concentration. The alarming truth is that England is widely considered to be one of the most nature-depleted countries in the world, following historic and ongoing declines.

We must also note a point raised in the debate this afternoon: it is not just the deployment of wind farms or tidal technologies that causes environmental damage. If GB Energy is also set to decommission, as we have discussed, or to repurpose oil and gas structures, it must assess and mitigate the risk of this practice on the environment. As my noble friend Lord Fuller so rightly explained, GB Energy is a public company; it is only right that it acts in the public interest. I do not see why the Minister would disagree, but I thank him for his detailed response. In the meantime, I beg leave to withdraw the amendment standing in my name.

Amendment 111 withdrawn.

--- Later in debate ---

[Lord Petitgas (Con)]

My Lords, I will make a link between Amendments 118, 118A and 130.

On Amendment 130, it will be interesting to see whether we get the results, but my impression is that, in this country, there is not a single net-zero or renewable project that is not subsidised by the Government in some way. In fact, that is one reason why there has been so much private capital: with the electricity price being run off the marginal cost of gas turbines and the marginal cost of renewable energy—particularly from wind farms—being zero, in effect, there is no way not to make money in that business.

This raises a question around the subsidisation of the whole system, including whether GBE should pile in further when it is already subsidised. It also raises the question of whether we need GBE, because we already have private capital in the system. In fact, we probably have more wind energy than anybody else in the G7. We have said this before. There is a lot of private capital coming into this industry.

The real question is less about GBE and more about what level of subsidisation we are prepared to put in. This may explain why we have the highest energy costs in the G7—double those of the US. This morning, my noble friend Lord Howell talked about Stargate and the announcement made by the US. We will find it very difficult to compete—let alone not having the money, our energy costs are double those of the US—if we want to run LLMs and supercomputers.

[Lord Offord of Garvel (Con)]

My Lords, I thank and express my support for my noble friends Lord Frost and Lord Hamilton of Epsom, whose amendments address the matter of subsidised renewable energy technology. Considering that GB Energy is already supported by £8.3 billion, I see no viable reason why it should invest in renewable energy projects that are already substantially supported by government subsidies and funded by the British consumer, as my noble friend Lord Petitgas highlighted. Surely it is essential that the renewable energy industry in the UK is not reliant on government handouts for ever. We must look to create an environment that promotes competition and innovation and mitigates the likelihood of inefficiency.

At present, the Government subsidise low-carbon electricity initiatives through contracts for difference, where they guarantee developers a fixed price for the electricity that they generate. This is funded via a levy on consumer bills and, at the end of last year, the Government were considering holding the largest auction yet in 2025 despite recent scrutiny over consumer energy bills. The British consumer is already burdened by the cost of turning off wind turbines to avoid overloading the power grid; this costs the UK £1 billion a year, with that predicted to rise to more than £3.5 billion in the next decade. Why should the taxpayer be burdened numerous times?

According to the OBR, environmental levies are around £12 billion. This amounts to £400 per household in the UK. Yet the cost of offshore wind is less than current market prices and those agreed in auction rounds. If renewables are supposedly cheaper, I query why we are paying these subsidies in the first place. The truth is that the Government’s clean energy by 2030 agenda will require substantial levels of borrowing, which will be spent on subsidising renewable energy technologies. This rushed target will only cost the consumer more. It will not cover energy bills by the £300 a year promised during the election campaign.

Amendment 130 in the name of my noble friend Lord Frost would prevent the Bill being passed until the Secretary of State publishes a report calculating the costs to consumers and taxpayers of the UK renewable energy industry. The amendment raises the issue of transparency. If we are to pass a Bill that is so financially consequential, we must have sight of the Government’s current spending on renewable technologies.

Amendment 118B from my noble friend Lord Hamilton of Epsom would prevent GB Energy investing in a project

“that relies wholly or in part on”

government subsidies. Amendment 129 would prevent the Act being passed until

“the Secretary of State publishes a report on the appropriateness of further Government subsidy for offshore wind developments”.

These three amendments neatly touch on the concerns that I have raised. I ask the Minister to thoroughly consider the worries expressed by my noble friends.

[Lord Hunt of Kings Heath (Lab)]

My Lords, I am grateful to all noble Lords who have taken part in this debate, which reflects previous debates in Committee. It started with the noble Lord, Lord Hamilton, being worried that GBE will invest badly, not make money and invest in speculative projects, which he thought the Treasury might encourage it to do. My experience of the Treasury is that that is not how it works out in practice. Our challenge is encouraging the Treasury to make investment decisions, and the scrutiny with which it approaches this matter can be described as vigorous.

--- Later in debate ---

[Lord Vaux of Harrowden (CB)]

My Lords, I wish briefly to comment on and support the intent of Amendments 122, 123 and 124 tabled by the noble Earl, Lord Russell. At the risk of sounding like a stuck record, the basic problem with the Bill is that it includes absolutely nothing about what GBE will actually do. Yes, there are the objects in Clause 3 but, as we debated at some length previously, they set out only what GBE is allowed to do, not what it is intended to do.

What it is intended to do—its objectives, if you like —will be set out in the statement of strategic priorities in Clause 5. We have not seen those and it would appear that we will not see them for a while—certainly not before the Bill passes. As the Constitution Committee pointed out, that key document will not be subject to any parliamentary scrutiny—in fact, the Constitution Committee referred to it as “disguised legislation”—nor is there anything in the Bill to prevent GBE starting its activities before that statement has been published.

As I say, we have had several debates on this, so I will try not to repeat myself. There are a number of ways to do this: the new amendments in the name of the noble Earl, Lord Russell, may or may not be the right way and we have had other amendments previously. However we do it, it is critical that at least some substantive level of parliamentary scrutiny should be available on how GBE intends to spend its £8.3 billion before it starts to spend significant amounts of money.

[Lord Offord of Garvel (Con)]

I thank the noble Earl, Lord Russell, for moving his amendment and all noble Lords who made contributions or comments. Perhaps I may take them thematically, starting with the importance of oversight. As regards the amendments in the name of the noble Earl, Lord Russell, we on these Benches are in favour of the sentiment of Amendments 122 to 124.

As mentioned by the noble Lord, Lord Vaux, the strategic priorities for GB Energy are not included in the Bill. Indeed, we have not had sight of those most important principles; we simply do not have any concrete examples of what GB Energy as a company will be trying to achieve. I must therefore ask the Minister: how can we support the Government if we do not even know what the proposed investment vehicle will put taxpayers’ money into? This House and the other place must have sight of the strategic priorities of GB Energy so that we can assess its goals, what it intends to achieve, how these goals will be achieved, in what order they will be prioritised, and how much money will be spent on those goals and priorities.

I turn to Amendment 125 in my name, which ensures that the Bill cannot come into force until a financial framework document has been laid before Parliament. Much like the noble Earl, Lord Russell, I am deeply concerned that we have not yet had sight of this most important information. I do not feel it is possible to move forward with the Bill, or GB Energy itself, until we have understood its financial structure. I therefore strongly urge the Government to produce a financial framework for GB Energy and let us examine it.

Amendment 126, in the names of my noble friends Lord Hamilton of Epsom and Lord Trenchard, requires the Secretary of State to publish an assessment of the impact GB Energy will have on the number of jobs in Aberdeen. The Government are already putting at risk 200,000 jobs in the North Sea oil and gas sector in the UK but, of course, this will hit the city of Aberdeen particularly hard, as it is the centre of the UK domestic oil and gas industry. None of us would object to the Government looking to bring a more diverse range of sovereign energy sources online, but we should not be sacrificing hundreds of thousands of jobs or people’s livelihoods in the process.

The transition to green energy, if it is managed correctly and done in an orderly fashion—not on an artificially accelerated basis—has the opportunity to provide a swathe of new well-paid jobs. We must therefore hold the Government to their word that GB Energy will create 650,000 jobs, which is a big number and target. It is for this reason that the Secretary of State must publish an assessment of the impact GB Energy will have on the number of jobs in Aberdeen. That will show noble Lords whether the Government are keeping their word, whether these jobs are created and will be of benefit to Aberdeen, and whether we have indeed seen the transition talked about.

Finally, I turn to Amendment 127 in the names of my noble friends Lord Hamilton of Epsom and Lord Trenchard. That amendment will ensure that the Bill cannot come into force until the Secretary of State has published a report on the cost and viability of the Government’s net-zero targets. We should transition away from the use of fossil fuels and reduce the volume of greenhouse gases we emit into the atmosphere, but it must be done in an economical and sustainable manner. I hope that the Minister has listened carefully to these concerns.

[Lord Hunt of Kings Heath (Lab)]

My Lords, I do listen carefully to what noble Lords have said. Our final debate in Committee, as the noble Lord, Lord Vaux, suggests, takes us back to some of the early debates and concerns that noble Lords have. I am particularly grateful to the noble Earl, Lord Russell, for his support. The point he made is that the cost of doing nothing will, in the end, be much more expensive than the cost of net zero. I say to the noble Lord, Lord Hamilton, that sticking to oil and gas is certainly not a free lunch, either. The noble Earl also pointed to the declining reserves in the UK continental shelf. This is a fact of life and why there were losses of jobs in Aberdeen under the previous Government. I will come back to the issue of Aberdeen in a moment.

Clearly, the effect of the amendments will be to defer the commencement of most provisions in the Bill until several requirements have been met. They include the laying before and approval by Parliament of a framework document and statement of strategic priorities, the publication of an outline statement of strategic priorities, the publication of an assessment on the expected impact of the Act on the number of jobs in Aberdeen and the publication of a report on the cost and viability of the Government’s net-zero targets. We have already discussed many of these matters in Committee and the Committee will be aware of the Government’s views and intents on this.

Our aim is to get this Bill on the statute book as soon as we can. It is also our clear intention that the statement of strategic priorities cannot be produced without the full involvement of Great British Energy in order to get its expertise, including that of the newly appointed non-executive directors, to inform the statement. This is why we do not believe that we can publish the statement of strategic priorities either during the passage of the Bill or before Royal Assent. Once parliamentary approval is given, we will ensure that we move as quickly as we possibly can to produce the statement.

On accountability, in the end, Ministers will agree with the statement that we are accountable to Parliament. I do not think your Lordships’ House is backward in holding Ministers to account for what they do. We have the Select Committee process, there are numerous opportunities for scrutiny of what we decide in relation to the statement and, of course, the statement is also subject to revision from time to time.

On the framework document, I suppose I can only repeat what I said before. We are committed to producing a framework document. It will, as framework documents do, cover the governance structure, the requirements for reporting and information sharing, and the financial responsibilities and controls. I have given this assurance from the Dispatch Box, so that is a government statement of what is going to happen. The framework document will be extensive and will follow the normal course of action. I hope that assures noble Lords that everything is being done in a proper way and with proper accountability, ensuring that Great British Energy is subject to the appropriate controls—as is only right for a body that is ultimately responsible to the Secretary of State for its activities.

We think that it is a very good thing that GBE will be based in Aberdeen; a significant proportion of GBE’s staff will certainly be based there. We think that Aberdeen will benefit from new jobs in the economy created because of GBE’s investment in renewable energy projects. I understand and very much accept the need to ensure, as we have talked about, a just transition for the people involved in the oil and gas sector. We want to do everything we can to enable offshore workers to lead the world in the industries of the future, which is why we are working very hard with businesses, employees and workers to manage our existing fields for the entirety of their lifetime and are putting in place programmes to support a transition. It is interesting that research from Robert Gordon University shows that 90% of oil and gas workers have medium to high transferable skills for offshore renewable jobs; knowing the skills that people who work in the North Sea bring to the jobs they do, that does not surprise me.

This is all I will say to the noble Lord, Lord Hamilton, in relation to President Trump’s decisions: it is interesting that, in his first term, the US actually saw quite a drive into renewable energy. It may be that we will still see the same direction under the new Administration in the end; that is for the US Government to decide. We as a Government are sticking to the Paris Agreement and to the need to get to net zero and clean power as soon as we possibly can.

Great British Energy Bill

Lord Offord of Garvel Excerpts

Report stage
Tuesday 11th February 2025 Lords Chamber

[Lord Hamilton of Epsom (Con)]

My Lords, I wish to pick up the concern voiced by the noble Lord, Lord Vaux, that GB Energy will pick up some of what I have described as the low-hanging fruit of projects in the energy sector, which can be serviced by the private sector. I do not think that that will happen very much. The putting up of wind turbines and so on by the private sector is well established. It is done by financiers who are more concerned by the feed-in tariff than they are by anything else. They even succeed, as I mentioned in Committee, in being paid at a time when nobody wants the electricity coming from the wind turbines, which I always think is a rather remarkable financial deal to be able to pull off.

Turning to Amendment 39 in the name of my noble friend Lord Frost, I raise with the Minister the question of tiered finance. There will be an awful lot of looking into the activities of GB Energy in investing in things but, in my view, here lies the problem: you will find that there are different layers of finance going into a project that may involve GB Energy. The risk we always run is that, unless the new chairman who has been appointed for GB Energy is incredibly smart, he is going to be left with the worst, highest-risk element of any of these deals being funded by the taxpayer. Of course, this means that, if the thing goes wrong, the private sector will suffer less than the taxpayer, who will lose all their money.

I would like to hear the Minister’s view on tiered finance, including how we will be able to have openness around it. Will it be possible for outsiders to look in on these deals and comment on them? Generally, does the Minister agree with me that the risk to the taxpayer seems extremely high on this? Of course, we will need Treasury authorisation for all these deals—the Treasury may stop them happening in the beginning—but it would be interesting to know how the Minister’s mind is working on this because it strikes me that the taxpayers are standing in the way of the high-risk elements of any of these deals in which GBE gets involved.

[Lord Offord of Garvel (Con)]

My Lords, I thank my noble friend Lady Noakes for opening the debate on this group of amendments, as well as all noble Lords who have contributed to the debate so far.

My noble friend Lord Frost pointed out in Committee that this Bill is even thinner in its contents than Bills that we would normally term skeleton Bills. I completely agree with this characterisation. As it stands, there is nothing in the Bill that tells us what Great British Energy will actually do. What will it invest in? How will it decide where its money goes? What criteria will it use for its investments? We have had three and a half days of Committee over five days on the Bill. We still do not know the answers to these questions.

On the first day in Committee, the Minister said:

“The key thing in the structure of the Bill is the objectives set in Clause 3. They will be informed by the statement of strategic priorities that Great British Energy will operate in, making sure that it will be aligned with the Government’s priorities”.—[Official Report, 3/12/24; col. 1066.]


We have discussed the different objects and objectives of Great British Energy, but I think that we need to return to this topic. It was pointed out by my noble friend Lady Noakes and the noble Lord, Lord Vaux of Harrowden, that, contrary to what the Minister has claimed, Clause 3 does not set out the objectives of Great British Energy.

Clause 3 establishes the objects of Great British Energy. Those objects set out what GBE will do. Those objects will be the means through which it will try to achieve its objectives, but what those objectives are still eludes us. That is why Amendment 1, tabled by my noble friend Lady Noakes and signed by the noble Lord, Lord Vaux, is so important. It establishes in the Bill the objectives that Great British Energy will have to work towards. Ensuring energy security, increasing long-term energy storage, increasing the levels of clean energy generation and reducing energy costs are all laudable objectives. They are all things that the Government have indicated that they want Great British Energy to work towards, but unless they are put into the legislation, there is no assurance that they will happen.

This point is especially pertinent given the recent refusal to re-commit to reducing energy bills. Noble Lords will be all too aware that during the election campaign the Government pledged to reduce energy bills by £300 per household. We then heard the chair of Great British Energy, Jürgen Maier, speaking on Sky News this weekend and refusing to say whether that promise still stood. Then the Prime Minister, speaking at the National Nuclear Laboratory last week, confirmed this figure and said:

“We said we’d aim for £300 … That’s what I want to achieve”.


We therefore have what appear to be different commitments from the chair and the Prime Minister. The chair will not commit to reducing household energy bills by £300 per year, but the Prime Minister will. Which one is it? If we already have a difference in opinion, and clearly no joined-up thinking before the Bill has even been passed, how can anyone believe that Great British Energy will follow through on its supposed objectives? It is evident that the only way this will happen is if there is a clear statement of those objectives in the Bill.

I turn to the other amendments in this group. My Amendment 20, and Amendment 37, tabled by the noble Lord, Lord Vaux of Harrowden, seek to ensure that there are clearer reporting requirements in the Bill. Currently, there are no requirements to submit reports other than the usual ones under the Companies Act 2006. Many noble Lords have argued that this is not acceptable. The reporting requirements in these two amendments are not overly onerous for GBE to comply with, yet the net benefit would be significant.

I have also tabled Amendment 41, which seeks to ensure that Great British Energy is given a specific direction to achieve a 10% minimum return on its investments annually. Like with the rest of the Bill, there has been absolutely no indication of the expectations that will be placed on GBE. Without this, how can anyone be certain that the taxpayer will see value for money from this investment? If £8.3 billion from the public purse is going to be funnelled into a state-operated investment company, I am certain that taxpayers would like some guarantee that it will pay off—or at least some measure of target return.

This brings me to Amendment 49. Given the permissive extent of the borrowing provisions in the Bill, it is pertinent to allow the Secretary of State to implement a restriction on borrowing. The amendment does this via affirmative statutory instrument, allowing the Secretary of State flexibility, while placing greater safeguards on the amount to be spent via Great British Energy.

In the same vein, we also need to ensure that there are adequate safeguards for the financial assistance that the Secretary of State can provide. Amendment 56 does this by preventing Clause 4 coming into force until the Secretary of State has established the conditions under which financial assistance may be provided. Once again, we need clarity around this issue. We need to know when, how and why the Secretary of State would give financial assistance, under what circumstances and with what conditions attached; otherwise, there is a distinct possibility of the Bill becoming a blank cheque to Great British Energy for unlimited sums of public money.

Finally, Amendment 57, in my name and that of my noble friend Lord Effingham, requires the publication of a revised financial framework document. I said in Committee that I did not feel it possible to move forward with the creation of Great British Energy until the Government were more forthcoming on this matter. Regrettably, this elusive information is still being withheld. We need sight of the framework document. Once again, I strongly urge the Government to produce this and allow noble Lords to examine its contents.

[The Minister of State, Department for Energy Security and Net Zero (Lord Hunt of Kings Heath) (Lab)]

My Lords, I am grateful to all noble Lords who have taken part in this interesting debate. Of course, we have returned to some of the arguments that we had in Committee. I understand that noble Lords would like to have more information about the activities of Great British Energy, but we have chosen to bring a Bill that, essentially, sets up the basics of establishing a company. Much of the detail that noble Lords have discussed will come through the statement of strategic priorities, which we will debate later.

We do not think it right that we can publish our own statement, or a draft, without the full active participation of Great British Energy, and we are not really going to move from that position. Given that the statement of strategic priorities is to come and that we will hold Great British Energy to account for its performance, as would be expected with any normal public body for which the Government are ultimately responsible, we are resistant to putting what we believe to be unnecessary detail in the Bill, restricting what the company can do in carrying out its activities, especially as these evolve over the longer term.

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[Lord Fuller (Con)]

My Lords, I shall speak very briefly in support of the noble Baroness, Lady Young of Old Scone, in her Amendment 13. It is said that when you are in a hole, stop digging—especially when it is a bloody great big one. It seems to me that it was the noble Lord, Lord Krebs, who dug himself into the mire by talking about CCC accounting principles, just delegating it to the regulators, so it is all right then, greenwashing away the IMO shipping carbon costs. He undermined his case, and it demonstrates how biomass burners such as Drax use smoke and mirrors to obfuscate. If the noble Baroness had tested the opinion of the House, she might have had much more support than she might have imagined. It is time to stop the classification of biomass as clean energy and I welcome her intervention.

[Lord Offord of Garvel (Con)]

My Lords, I will briefly include a consideration of the second group of amendments, talking about the definition of clean energy, and I express my gratitude to my noble friend Lord Trenchard. These amendments address a matter that many in this House have questioned during our debate: Great British Energy’s role and involvement in the production of nuclear. There is no doubt that nuclear energy in some shape or form will have a critical role to play in achieving the Government’s net zero targets. If the Government, via GB Energy, are to recognise the importance of nuclear, it is only right that they consult Great British Nuclear before investing in nuclear technology. That is where Amendment 36, proposed by my noble friend Lord Trenchard, becomes so crucial.

I also support Amendment 10, also proposed by my noble friend Lord Trenchard. This explicitly includes nuclear energy in the definition of clean energy. We know that it offers a reliable, low-carbon source of energy. In addition, Amendment 7, tabled in my name, includes

“the production of nuclear energy”

as part of GBE’s objectives, which complements Amendment 10 and further solidifies nuclear energy’s central role in being part of our long-term solution for energy security and decarbonisation.

Finally, turning to Amendments 2, 3, 4, 5, 6 and 11, proposed by the noble Baroness, Lady Liddell of Coatdyke, which would expand the definition of clean energy, we support the intention behind them to ensure that we remain inclusive of all potential technologies.

To conclude, I urge the Minister to consider the amendments in my name and those of my noble friend Lord Trenchard carefully, as they would help to ensure a clean, secure, sustainable energy future for the UK.

[Lord in Waiting/Government Whip (Lord Cryer) (Lab)]

My Lords, I shall speak not so briefly, actually, on this group of amendments concerning the scope of clean energy as defined in the Bill, particularly in relation of carbon capture, usage and storage, hydrogen, nuclear power, biomass and renewable liquid fuels.

Taken together, these amendments seek to broaden the definition of clean energy within the Bill to explicitly include CCUS, blue hydrogen and nuclear energy, while others aim to restrict biomass or impose additional reporting requirements on GBE. While the Government recognise the significance of these technologies and lauds them in achieving net zero, we must resist these amendments, for reasons I will now set out.

I turn first to Amendments 2, 3, 4, 5, 6, 11 and 12, tabled by my noble friend Lady Liddell of Coatdyke. These amendments aim to ensure that CCUS and CCUS-enabled blue hydrogen are explicitly covered under Clause 3. The Government recognise that hydrogen and CCUS are vital in our transition to net zero, contributing to decarbonisation and energy security while supporting jobs in key industrial regions.

Analysis by DESNZ—a great acronym—and the Climate Change Committee confirms that CCUS-enabled blue hydrogen will be crucial for scaling up hydrogen production into the 2030s, which was referred to extensively at Second Reading, in Committee and today. On hydrogen, Ministers remain committed to delivering on our current trajectory, which includes offering contracts to the 11 successful electrolytic hydrogen projects through the first hydrogen allocation round and delivering future allocation rounds, as well as providing support for blue hydrogen production through the CCUS programme, with the £21.7 billion recent funding paving the way for the first large-scale blue hydrogen production plant.

Clause 3(2)(b) already enables GBE to facilitate, encourage or participate in projects, such as CCUS and CCUS-enabled hydrogen, that would contribute to the reduction of greenhouse gases from energy produced from fossil fuels. Therefore, these technologies fall within the scope of GBE’s objectives. We have made it clear—in the founding statement, in the Explanatory Notes and during multiple stages of the Bill’s passage—that emerging technologies such as CCUS or hydrogen could be part of GBE’s energy portfolio once it is operational. However, while GBE will be able to invest in these technologies, as we have emphasised on many occasions, it will be an operationally independent company. The exact mix of technologies in which it chooses to invest will therefore be determined in due course and be influenced by available opportunities, now and in future. I hope that the noble Baroness, Lady Liddell, recognises that these arguments are not required and will therefore withdraw her amendment.

I now turn to Amendments 7, 10 and 36, which were spoken to by the noble Lord, Lord Offord, the noble Baroness, Lady Bloomfield, and the noble Viscount, Lord Hanworth, the latter speaking on Amendments 10 and 36 on behalf of the noble Viscount, Lord Trenchard. Amendment 7 in the name of the noble Lord, Lord Offord, seeks to add

“the production of nuclear energy”

as an objective in Clause 3. Amendments 10 and 36 in the name of the noble Viscount, Lord Trenchard, seek to expand the definition of “clean energy” used in Clause 3(2)(a) to ensure that it includes both renewable energy and nuclear energy and would require GBE to consult GBN before it invests in nuclear energy.

We must resist these amendments for two key reasons. First, it is already possible for GBE to invest in nuclear energy. Nuclear energy is already defined as clean energy under Clause 3; as such, its production, distribution, storage and supply are activities that GBE could undertake under Clause 3(2)(a). Secondly, I assure noble Lords that GBE would engage with Great British Nuclear ahead of any such investment in nuclear energy. I do not think that we need to include such a requirement for the Secretary of State to direct GBE to engage with GBN ahead of any investment in nuclear energy given both this context and the fact that the Secretary of State is the sole shareholder in both companies.

This Government view nuclear power as one of the reliable, secure, low-carbon sources of home-produced electricity. It will play an important role in helping to achieve energy security and clean power while securing thousands of good, skilled jobs as well as a range of power and energy supplies. The Government are taking significant steps to advance nuclear energy. GBN is leading the selection of small modular reactor technology. Incidentally, a record £410 million has been allocated for fusion research and development, supporting cutting-edge facilities and research.

I wish to add something regarding the comments from the noble Baroness, Lady Bloomfield. Considering the importance of the remits of the two entities, GBN and GBE, they will remain independent sister companies for the time being to ensure that both organisations are best placed to deliver on the Government’s ambitions for energy security and variety of supply. We are maintaining a nuclear focus board for GBN, with highly specialised and experienced personnel; again, this has been debated over a long period. The two organisations will work together effectively to ensure that the UK is on the path to achieving energy security and clean power while securing thousands of skilled jobs.

I hope that the noble Lord, Lord Offord, recognises that this Government are taking active steps to support the continued growth of the nuclear sector; that he is reassured that the Bill allows for GBE to support nuclear energy within the definition of clean energy; and that he will agree not to press his amendment. 

I now turn to Amendments 13 and 44 in the name of the noble Baroness, Lady Boycott; my noble friend Lord Berkeley and the noble Baroness, Lady Young, also spoke to them. Amendment 13 seeks to exclude biomass from the Bill’s definition of clean energy. Amendment 44 would require GBE to produce a plan for its use of biomass power generation and assess the impact of it on both sustainability and its compliance with targets and obligations.

I must resist these amendments for the following reasons. The Government recognise biomass as vital to the UK electricity grid. The Intergovernmental Panel on Climate Change and the UK’s Climate Change Committee—the CCC, which engages with Governments of all hues—highlight its role in decarbonisation if strict sustainability policies are in place. Biomass sourced under strict sustainability criteria is considered a low-carbon energy source; the noble Lord, Lord Hamilton, also spoke about this.

The Government support only sustainable biomass, and generators such as Drax receive subsidies only for biomass that meets the UK sustainability criteria. A CfD has recently been agreed with Drax for short-term support from 2027 to 2031 to provide crucial low-carbon, dispatchable power for UK energy security. With our having introduced tough new sustainability measures with clear and enforceable standards, Drax will need to use 100% sustainably-sourced biomass—up from the current figure of 70%—and no more money will be paid for non-compliant biomass. There will be substantial penalties for any failure to meet these strict criteria, protecting both consumers and the environment.

The comments from the noble Lord, Lord Krebs, were interesting, to say the least. He set out that the figures are more complex than the headline figures might appear. I would add that the UK’s sustainability criteria limit supply chain emissions and include environmental protections. Where biomass comes from forests, land criteria ensure sustainable harvesting and productivity. Large-scale biomass generators can convert to bioenergy with carbon capture and storage—BECCS—which the Climate Change Committee and the International Energy Agency recognise as key to net zero, delivering negative emissions alongside low-carbon electricity. Of course, Drax’s activities are accountable to Ofgem.

Amendments 13 and 44 would unnecessarily constrain the company, despite the role of biomass in balancing an energy system with increasing renewables. GBE will operate independently, with its investment choices guided by strategic priorities and opportunities available at the time. Parliament will scrutinise its activities—we have just discussed this at great length, particularly with regard to Clause 5—through annual reports and standard accountability processes.

The Government have tabled an amendment requiring GBE to review its impact on sustainable development. This will ensure compliance with environmental regulations while supporting nature and biodiversity. The framework document will mandate annual reporting on sustainable development, embedding it into the company’s strategy and operations. Given these reasons, I hope that the noble Baroness, Lady Boycott, can see a way not to press her amendments.

Amendment 35 in the name of my noble friend Lord Berkeley seeks to direct GBE to assess energy-related issues for off-gas grid households and to report on the role of renewable liquid heating fuels. I must resist this amendment for the following reasons. While the Government recognise the challenges faced by off-gas grid households, GBE will have the autonomy to determine its investment priorities. The Government already have measures in place to support those households. For example, the boiler upgrade scheme is receiving an extra £30 million for this financial year, as well as a near-doubling of its budget to £295 million in the next financial year, so that families can benefit from £7,500 off the cost of a heat pump. Evidence shows that 42% of grants under this scheme have gone to properties off the gas grid; that figure is not bad.

As my noble friend Lord Berkeley discussed with my noble friend the Minister, although renewable liquid fuels may play a limited role in decarbonisation, their affordability and supply constraints make them unsuitable for large-scale deployment. We are committed to engaging with industry on the challenges and solutions for decarbonising heat in rural homes, and we will take a considered and proportionate approach. I therefore hope that, with my response and the meetings that my two noble friends have had, my noble friend Lord Berkeley will be able to see a way not to press his amendment.

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[Lord Howell of Guildford (Con)]

My Lords, I have glad tidings for the noble Baroness, Lady Boycott, regarding her concerns. There are between 23 million and 27 million homes in this country still using gas for heating, cooking and warmth. Clearly, that has to be tackled. The answer is quite simple, but complicated as well. The answer is that modern electric boilers can replace all those gas boilers, without having to dig and provide new hydrogen pipes and all sorts of other such complications.

The snag is that electricity is so hopelessly expensive. That is the deterrent. Here we are, wishing to transform millions of homes away from gas, and the pipes then will all become redundant. We can put in modern electric boilers, which can do the job just as well, but the cost goes up rapidly. If only we could focus on how to reduce the cost of electricity by building rapidly—which we are not doing—the cheaper, smaller modular reactors and cheaper devices for producing electricity, and even using more hydrogen on the electricity side; that is another story that we have not really discussed. Even on that basis, we are facing the problem that electricity is very expensive. As long as we keep it that way, as long as we play that game in relation to the overall energy cost, we are shooting ourselves busily in both feet.

[Lord Offord of Garvel (Con)]

My Lords, the topic of community energy was raised several times in Committee by noble Lords on all sides of the House, because it is a highly important aspect of energy provision. When in government, we introduced the community energy fund, which provided funding to specifically target the community energy sector. So, I would concur with noble Lords that it is very important that communities are involved, as they are able to raise and solve issues that are unique to their local community.

[Lord Hunt of Kings Heath (Lab)]

My Lords, I will first say that I am grateful to noble Lords for their support for my Amendment 8. I echo what the noble Baroness, Lady Bennett, said about the success of campaigning. She might have recognised the Government’s role in this, but she did not quite get that over the line. But there is always hope.

On the point made by the noble Lord, Lord Hamilton, about community benefits, I agree with the principle; we are looking at community benefit schemes. I have told noble Lords before about my visit to Biggleswade wind farm, where the company involved is giving around £40,000 a year to the local community. Certainly, we need to look at schemes like that and see what we can do to extend them.

As regards nuclear and that interesting discussion, the noble Lord, Lord Wigley, made it very clear that the existing sites contained in the last statement will always be recognised for what they offer. We are not seeking to undermine their potential; we are simply saying that we need a more flexible siting policy in the future.

The noble Lord did not mention Wylfa, so I will. Of course, he will know that Wylfa was identified as one of the sites in the last statement. Clearly, it still offers many potential opportunities. There was a great deal of interest earlier this week in the planning inspector’s report, which purportedly came out against the development of Wylfa. I, for one, think that it offers great potential.

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[Earl Russell (LD)]

My Lords, I rise from these Benches to speak against Amendment 15 in the name of the noble Lord, Lord Petitgas. His amendment seeks to add a limit on the maximum amount of money that the Secretary of State can provide to GBE—anything above and beyond the £8.3 billion that the Government have committed to. We strongly oppose this amendment. The noble Lord talked about resolve, strength and all these things, but I do not agree with any of that. It is not for the Opposition to use an amendment to legislation to determine what funds a Government can spend on something in the future, when we do not know what is going to happen.

Just this week we have talked about the Drax situation; the Government have halved the subsidies to Drax. The money that the Government are saving from having to subsidise Drax is money that could well go to GB Energy—for example, to fund the long-duration energy storage that we desperately need, so that we can do the transition and keep the lights on. The money should be used for other renewables projects.

It is for the Government to make day-to-day spending decisions and they are accountable for the decisions they make, as GB Energy is accountable to the Treasury and the public for how it spends its money. Ultimately, the Government themselves are responsible to the public, but I do not think it is for the Opposition to put a cap on what Governments can spend. Core spending is a decision for the Government, so this would be a highly unusual amendment and, if it is put to a vote, we will oppose it.

[Lord Offord of Garvel (Con)]

My Lords, I support the amendments in the name of my noble friend Lord Petitgas. In tabling his amendments, my noble friend looks to protect the taxpayer while securing the financial integrity of GB Energy, establishing that GB Energy’s attempt to ramp up renewables must not come at the cost of fiscal responsibility and £8.3 billion. The drafting of Clause 4 is far too ambiguous. We must introduce sufficient safeguards by limiting the scope that the financial powers in the Bill afford the Secretary of State. The taxpayer is coughing up a significant £8.3 billion into an investment vehicle that, as my noble friend Lord Petitgas said, has the potential to completely de-risk the profits of multi-million pound energy companies. Meanwhile, the Government have cancelled winter fuel payments, introduced an NI jobs tax and launched a raid on British farmers, all to save money.

The reality is that £8.3 billion is actually a very tricky number. On the one hand, it is a lot of money, a big, significant investment into energy. On the other hand, in the scheme of energy investment required, it is a relatively inconsequential figure, especially when we talk about wind farms being built out to the potential tune of £100 billion. Either way, whether we consider that to be a big or a small number, the taxpayer deserves to know that the Government are deploying public funds appropriately. The Bill contains no limitation on how much financial assistance GB Energy will receive, there is no cap on the money that can be pumped into GB Energy and nor does the funding have to undergo any approval. What is to stop GB Energy becoming a bottomless pit?

Clause 4 states:

“The Secretary of State may provide financial assistance to Great British Energy”.


But, again, we are lacking in detail on ways to hold the Secretary of State and GB Energy accountable. We have seen no method to restrict the amount of financial assistance the Secretary of State may provide, nor do we understand how the success of each investment will be measured, or indeed reported on. I trust that the Minister will take these amendments seriously. Our transition to net zero must be done with an eye to fiscal responsibility, ensuring that the energy transition is both sustainable and affordable.

[Lord Hunt of Kings Heath (Lab)]

My Lords, I am grateful to the noble Lord, Lord Petitgas, for returning to a theme he developed in Committee. I assure the noble Lord, Lord Offord, that I take the amendments seriously. But, like the noble Earl, Lord Russell, I do not believe that they are appropriate, because I do not think it right to constrain the arrangements we set out in the Bill in this way. Nor do I think it appropriate for Parliament to take to itself the kinds of controls that the noble Lord is suggesting.

Let me make it clear, first, that in terms of the sum, we are committed to capitalising Great British Energy with £8.3 billion over this Parliament, but we have the flexibility in the future for a current or future Secretary of State to provide further financial support if it were required in this or a future Parliament. There must be flexibility here: one cannot set in stone a figure for all time. We must allow GBE to develop and grow, and we have to learn by experience.

However, the idea that the money being spent by GBE will not be subject to thorough tests and reviews is simply not true. As we have already said, any financial assistance to GBE provided by the Secretary of State will have to be subject to the usual governance and control principles applicable to public sector bodies, such as His Majesty’s Treasury’s Managing Public Money principles. GBE will be allocated funding through the spending review and will draw down on it when required in the normal way, through the supply estimates process, which is scrutinised, of course, by the other place. As is the case with any government spending, the Secretary of State will be able to finance planned activities only if Parliament votes the necessary financial provision.

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[Lord Teverson (LD)]

My Lords, very briefly, I was pleased to add my name to this amendment and, like others, I commend the noble Lord, Lord Alton of Liverpool, for his long-time work on this crucial area. On supply chains, those companies involved in fitting solar or anything else in this area should really be concerned about their supply chain in terms of scope 3 emissions, where they have to track their supply chain backwards, so I would hope that was also a method to check means of manufacture as well. I am also very sympathetic to the amendment from the noble Baroness, Lady Bennett.

[Lord Offord of Garvel (Con)]

My Lords, Amendment 18 is a simple yet essential safeguard that ensures that public funds will not support companies tainted by modern slavery in their energy supply chains. The UK has long stood against forced labour and exploitation. If we are serious about a just and ethical transition to clean energy, we must ensure that Great British Energy, a publicly backed entity, operates to the highest moral and legal standards. There is a clear precedent for this approach. The UK’s Modern Slavery Act 2015 requires companies to take responsibility for their supply chains, yet we know that modern slavery remains a serious issue in the global energy sector, particularly in the sourcing of solar panels, batteries and raw materials such as lithium and cobalt.

This amendment does not create unnecessary bureaucracy or hinder investment; it simply ensures that taxpayers’ money does not fund exploitation. If there is credible evidence of modern slavery in the supply chain, public funding must not flow to that company. It is a basic ethical standard. It is also a matter of economic resilience, because reliance on unethical supply chains creates risk for businesses, investors and the public. Therefore, supporting this amendment strengthens the integrity of Great British Energy. aligns our economic ambition with our moral obligations and sends a clear message that Britain’s clean energy future must be built on ethical foundations. I urge all noble Lords to support this amendment.

[Lord Hunt of Kings Heath (Lab)]

My Lords, I am grateful to all noble Lords who spoke in this important debate, and particularly, of course, the noble Lord, Lord Alton. He and I have worked together on a number of these issues, particularly in relation to enforced organ donation in Xinjiang province, and I have always been tremendously grateful for the advice and support he has given.

On this debate in general, I agree with the noble Earl, Lord Russell, that behind it lies more fundamental changes that we need to see, including his point about the development, where we can, of a UK supply chain. He said that he is going to support the noble Lord, Lord Alton; I understand and accept that.

Let me say at once that the Government wholeheartedly agree on the importance of confronting human rights abuses, including modern slavery, in energy supply chains, and we are committed to tackling the issue. I am glad that the meeting with Jürgen Maier was helpful; he is providing some strong leadership in this area. I have had also had discussions with the noble Lord, Lord Alton, between Committee and Report, but we have not quite found a way through as yet.

My understanding is that Great British Energy will already have a range of tools in place to support its efforts to identify and tackle human rights abuses in its supply chain. Indeed, as a state-owned company, it will be expected not only to abide by but to be a first-in-class example of adherence to the UK’s existing legislation and guidance. We support voluntary due diligence approaches taken by UK businesses to respect human rights across their operations and supplier relationships, in line with the UN’s Guiding Principles on Business and Human Rights and the OECD guidelines for multinational enterprises.

The noble Lord, Lord Offord, referred to legislation passed by his Government, which I readily acknowledge. Under Section 54 of the Modern Slavery Act 2015, Great British Energy will be required to prepare a slavery and human trafficking statement for the financial year, in relation to its turnover of £36 million or more, outlining the steps it has taken in the financial year to ensure that slavery and human trafficking is not taking place in any of its supply chains nor any part of its business. Once the Procurement Act 2023 comes into force—on which the noble Lord, Lord Alton, and I shared a common endeavour—it can reject bids and terminate contracts with suppliers which are known to use forced labour themselves or anywhere in their supply chain.

We will also use the modern slavery assessment tool known as MSAT to assess the supply base for modern slavery risks. With these tools, I am assured and am confident that Great British Energy will not ignore credible evidence of modern slavery and human rights abuses. I believe that its exemplary adherence to this legislation, which the Government rightfully expect, will not only ensure that the company is doing all in its power to combat modern slavery but also pull up the standards expected of the UK’s wider energy industry under the existing legislative landscape. I think the chair of GBE has reinforced that point.

It is our belief that any action that has to be taken must not only be robust but—to take the point of the noble Earl, Lord Russell—take a whole-of-government and society approach. We expect UK businesses, including GBE, to do everything in their power to remove any instances of forced labour from their supply chain. Our guidance and international principles encourage business to remediate or mitigate when instances are uncovered, such as industry collaboration or improved internal purchasing practices. Amendments 18 and 19 would not allow GBE the opportunity for mediation; they would only penalise it.

There is a practical question around how these amendments might work in practice and what their impacts on GBE and its operations would be. They do not define what is meant by “credible evidence”, and this could be left open to interpretation. I am not trying to be pedantic here because, clearly, the noble Lord, Lord Alton, suggested in his opening remarks that he wanted to give the Commons the opportunity to debate this matter. I agree that we should not be too pedantic about the wording of the amendment, but I wanted to mention that as one of the practical consequences of enacting the amendments as they are currently drafted.

Combating human rights abuses, such as modern slavery, across the whole energy industry is a much more effective way to make progress than applying measures on a company-by-company basis, as these amendments would do. We recognise that the landscape has changed since the Modern Slavery Act was introduced; that is why we are committed to improving our response to modern slavery and will set out next steps more broadly in due course.

I should inform the House that we are partnering with an expert institution to provide detailed and relevant information on what modern slavery statements should cover, including practical advice for businesses to go beyond compliance with their legal requirements and actively identify and remedy instances of modern slavery in their supply chains. GBE will follow that, of course.

The noble Lord, Lord Alton, expressed some scepticism about the Solar Taskforce. Having been relaunched by my department, it will focus on identifying and taking forward the actions needed to develop resilient, sustainable and innovative supply chains that are free from forced labour. The aim is to support the significant increases needed in the deployment of solar panels to meet our ambition of seeing a large increase by 2030.

More widely, the Government are taking action to ensure that our clean energy supply chains are resilient as a key priority in the transition to net zero, in both de-risking the delivery of our carbon budgets and maximising the economic benefits from the transition. This will involve domestic action, such as investment in manufacturing, and international action, such as removing trade barriers and collaborating with our allies.

With respect to the speech from the noble Lord, Lord Alton, I know that the House wants to see action from the Government. I can assure noble Lords that my department is working collaboratively across Whitehall on this important issue, including with the Department for Business and Trade and the Home Office, to assess and monitor the effectiveness of the UK’s existing measures, alongside the impacts of new policy tools that are emerging to tackle forced labour in global supply chains, including in the energy sector. We are not ignoring the points made by the noble Lord. We take this seriously and, as I said, we are strongly looking at this across Whitehall at the moment.

I turn to the amendment in the name of the noble Baroness, Lady Bennett, to which she spoke so eloquently. Let me be clear: the UK’s existing sustainability criteria put limits on the greenhouse gas emissions of the supply chain and already include environmental protections. Where biomass is sourced from forests, the land criteria include requirements around sustainable harvesting and maintaining productivity. This ensures that forests are managed well and in a sustainable manner, as carbon dioxide emissions released during combustion are absorbed continuously by new forest growth. The statement that we made on Monday in relation to biomass reflects how the Government are moving. They might not be moving as fast as the noble Baroness wants, but we are, I think, moving in the direction that she wishes to see.

I remind the noble Baroness, Lady Bennett, that, as a public body, Great British Energy already has a duty to conserve and enhance biodiversity. The noble Earl, Lord Russell, was right to remind me of my own Amendment 38, which we will come on to at some point this evening. I do not want to repeat what I am going to say later, but it is a very important amendment and I hope it will provide considerable reassurance to the House.

Great British Energy Bill

Lord Offord of Garvel Excerpts

Report stage
Tuesday 11th February 2025 Lords Chamber

[Earl Russell (LD)]

My Lords, I thank the Minister and his Bill team for listening and constructively engaging with the many discussions that we have had on the issue of Great British Energy’s statement of strategic priorities and for bringing forward this helpful amendment.

I will be brief, as we have had a lot of discussion on this, particularly in Committee. Our position is that we support the intentions of the Bill and recognise that the Government are acting at speed to establish Great British Energy. However, we have always said that the Bill is too short for its own good. We recognise the difficult position that the Minister finds himself in. It is for Great British Energy, as an independent organisation, to write its own strategic priorities, as long as they are consistent with the objects set out in Clause 3. Great British Energy obviously needs to be established in order to write the strategic priorities, and discussions are required with the devolved Administrations.

Against these needs, we as parliamentarians were being asked to approve the Bill with no sight of the strategic priorities prior to the Bill being passed, or even after it is passed and the strategic priorities have been finalised. This was an issue that the Constitution Committee rightly highlighted as an area of concern. To us, it felt a little like we were being asked to sign a blank check, and your Lordships were rightly nervous about the implicit ask in the Bill as it was drafted.

From these Benches, we have consistently argued for progress on these matters and for the reaching of constructive compromise. Compromise needs to rightly balance the actions and operational independence of Great British Energy and, at the same time, the justified right of parliamentary scrutiny and oversight of the strategic priorities. Is this amendment absolutely perfect? No. Does it do a good and worthwhile job of balancing these competing needs and moving the issue forward? Yes, it very much does. I welcome the words the Minister has spoken from the Dispatch Box about a Written Ministerial Statement. This is an essential compromise, and I thank the Minister for this good progress.

[Lord Offord of Garvel (Con)]

My Lords, I will speak in support of the amendment in my name and that in the name of my noble friend Lord Trenchard. They represent an important step in ensuring that the development and operation of Great British Energy are aligned with the national interests and strategic needs of our energy sector.

Amendment 21, put forward by the Minister, ensures that the Secretary of State must prepare the statement of strategic priorities for GBE within six months of the passing of the Bill. This timely approach is crucial, as it establishes an early foundation for the strategic direction of Great British Energy, permitting the organisation to operate with clarity and purpose from the outset.

The inclusion of Amendment 26 in my name is equally important. It requires that the statement of strategic priorities must specifically address the development of supply chains in the United Kingdom. This is vital to ensure that the Great British Energy objectives are not only met but integrated into the broader goal of strengthening domestic industries and fostering economic resilience within our own borders. The definition of supply chains in this amendment reinforces the need for a comprehensive and interconnected approach to the creation and sale of commodities relating to Great British Energy’s work.

Finally, Amendment 33, proposed by my noble friend Lord Trenchard, brings an added layer of scrutiny and collaboration by mandating consultation with Great British Nuclear and the National Wealth Fund before the publication of the statement of strategic priorities. This amendment will ensure that Great British Energy’s strategies are developed in consultation with relevant stakeholders, thereby promoting a more cohesive and informed approach to energy policy.

These amendments collectively reflect our commitment to a strong, secure and sustainable energy future. I support them, and I encourage the Minister to do the same.

[Viscount Hanworth (Lab)]

My Lords, I wish to speak to Amendment 33, which is somewhat misplaced in this group. I have been asked by the noble Viscount, Lord Trenchard—

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Moved by

[Lord Offord of Garvel]

23: Clause 5, 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.”Member's explanatory statement
This ensures that the statement of strategic priorities includes the reduction of household energy bills by £300 by 1 January 2030.

[Lord Offord of Garvel (Con)]

My Lords, I shall speak to Amendments 23 and 24 in my name. These amendments would require the statement of strategic priorities to include the reduction of household energy bills by £300 per household by 2030 and the creation of 650,000 jobs in the UK by 2030. As noble Lords will recall from our debates in Committee, throughout the election campaign, the Government repeatedly promised that GB Energy would cut household energy bills by an average of £300 per household. In fact, a similar claim was made by at least 50 MPs, and the Science Secretary said:

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


On 19 June last year, the Chancellor said:

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


Finally, in an interview in June, the Secretary of State claimed that Great British Energy would lead to a “mind-blowing” reduction in bills by 2030. Considering that the Government had no qualms about repeating this promise time and again and appeared proud to do so, it is strange that they do not commit to this promise by including it in the drafting of this legislation.

That was not the only promise made by the Government. They also said that GB Energy would create 650,000 new jobs. Despite this, in the other place, the Government voted against Conservative amendments to make cutting energy bills by £300 and creating 650,000 new jobs a strategic priority for GB Energy. In so doing, they were voting against amendments that would hold them to their word.

Only last week, in a rather unconvincing interview on Sky News, the chair of GB Energy admitted that the Government’s pledge that GB Energy would create 1,000 jobs at its headquarters could take 20 years to deliver. In the same interview, he repeatedly refused to say when household bills would be cut, although the Prime Minister promised that GB Energy would save consumers £300 each. These promises are important to the British people, and the Government have already put at risk 200,000 existing jobs in North Sea oil and gas. They impact on people’s energy bills, their business and their jobs.

It is essential that the Government are held to account. We know there is a transition; we know that those 200,000 jobs can transition to the direction of travel in renewables and nuclear, but by accelerating unilaterally, there is going to be a gap, and the problem is that we are going to lose skills in the middle.

With that said, I look to the Minister to confirm exactly by how much consumers can expect their energy bills to fall—by £300, or pick another number. Will he give a commitment that GB Energy will reduce household energy bills, and how many jobs exactly will GB Energy create in the UK by 2030? I look forward to receiving a clear and positive reply, and I intend to test the opinion of the House on these matters.

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[Baroness Hayman (CB)]

Yes.

[Lord Offord of Garvel (Con)]

My Lords, I remind you all of what the Prime Minister said:

“I stand by everything in our manifesto and one of the things I made clear in the election campaign is I wouldn’t make a single promise or commitment that I didn’t think we could deliver in government”.


The number of £300 is not our number. The number comes from the Labour manifesto and a commitment to the British people.

The great British people think that GB Energy is a new electricity company that is going to deliver them cheaper energy; what we have discovered is that it is actually an investment plan employing 200 people in Aberdeen. It is a big delta: 650,000 jobs compared to 200 jobs rising to 1,000. These are not our numbers; these are the Government’s numbers. All these amendments are trying to do is hold the Government to account on commitments made in the election campaign, and I wish to test the opinion of the House.

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Moved by

[Lord Offord of Garvel]

24: Clause 5, 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 1 January 2030 resulting directly or indirectly from Great British Energy’s pursuit of its objects under section 3.”Member’s explanatory statement
This ensures that the statement of strategic priorities includes the creation of 650,000 new jobs in the UK by 1 January 2030.

[Lord Offord of Garvel (Con)]

My Lords, I beg to move.

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[Lord Wigley (PC)]

My Lords, I welcome the progress that has been made on these issues. There will be times when there may be differences of opinion, but on devolved matters it is right that the devolved authorities should have the proper say. I welcome the change being proposed by the Government.

[Lord Offord of Garvel (Con)]

My Lords, I thank the Minister for tabling these amendments on devolution, which I welcome. They follow concerns that we raised in Committee. I emphasise that it is important that consultations on devolution are published. Amendment 27 proposes a significant change to the current wording of Clause 5, and we agree that we need to move away from “consult” to “consent”.

The key tenet here is the Sewel convention, which we know well in this House. It is not a trivial matter of semantics; it reflects the principle that the devolved Administrations must have a genuine say in matters that affect their legislative domain. At the end of the day, the Scottish Parliament in particular has responsibility for significant aspects of energy policy, including renewable energy, energy efficiency and environmental protection. We have mirrored that in Amendment 29 for the Welsh Government.

All in all, we think that by requiring consent from the Scottish and Welsh Governments we can ensure that the energy priorities are developed in a way that respects the distinct needs and perspectives of each nation. I urge the Government to monitor those relationships carefully.

[Lord Hunt of Kings Heath (Lab)]

I am grateful to the noble Lords, Lord Offord and Lord Wigley. I commend the amendment to the House.

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[Lord Fuller (Con)]

My Lords, I will speak to my Amendment 51. Before I get into the substance of what I want to say, I want to say how proud I am that the Conservative Government passed the Environment Act that resulted in cleaner water, purer air, less waste and lower emissions. Only the Conservatives could have done that, and I know my noble friend Lady Coffey had a hand in that.

At an earlier stage of this Bill, I probed the Minister on the environment protections for tidal energy. Upon reflection, the amendment was too tightly drawn around tidal and insufficiently drawn for protections for other types, such as wave and barrage energy. Further, I do not think that sufficient attention was paid in my earlier remarks to coastal and estuarine environments, which are all part of the offshore scene. I have altered my approach to ensure that all marine proposals must consider the environmental impacts of their introduction. I welcome the Government’s late acceptance of some of these principles and their belated tabling of Amendment 38. On this side, we are grateful for it, but, as my noble friends have said, it does not go quite far enough.

My amendment would require the Secretary of State to assess the impact on the environment and animal welfare standards of the installation and generation of tidal, barrage and wave energy, together with its associated cabling. Amendment 38 talks generally about sustainability in its widest sense. My amendment seeks to define what sustainability means. It is not just carbon; it is about the wider impacts on flora and fauna. I noted and listened carefully to what the Minister said about the framework documents that have come forward, but they are in the future and we are in the now. It is certainty that we crave.

I will not detain your Lordships, because it is late, with my tale of my visit in November to the Saint-Malo tidal barrage—the world’s first, opened nearly 60 years ago. However, I want for a moment to consider the environmental costs of that valuable piece of infrastructure in France. There are lessons from history to be learned as we look forward to a post-carbon world. While saving the environment by reducing carbon emissions on the one hand, the French have damaged it on the other. My amendment seeks to direct Great British Energy to strike the appropriate balance between the desirability of reducing emissions and the essentiality of protecting flora and fauna in these places.

In commenting on the Saint-Malo barrage, Thomas Adcock, an associate professor in the department of engineering science at Oxford University, said there has been a “major environmental impact” on La Rance estuary as a result of that tidal barrage, and that

“this would make it very difficult to get permission to do such a barrage again”.

Researchers point to the adverse impacts on marine life due to the altering of sedimentation patterns, as well as the impact on oxygen and nutrient levels in the water. Sand-eels and plaice have disappeared, while silting has reduced the number and variation of other fauna. It is in the public interest that this is considered, so that mitigations can be put in place. My amendment seeks to ensure that, when the Government’s tilted sustainability balance is engaged, it must give sufficient weight to flora and fauna under the environmental pillar, not just pull the decarbonisation trump card out of the top pocket. This is why my amendment is needed and why it goes beyond Amendment 38.

I am not starry-eyed about the practicality of building big machines that can survive in the most hostile environments, pounded by seas and eaten by saltwater corrosion. I am involved in the liquid fertiliser business, so I know more than most how hard it is to engineer these things in tough, salt-aggressive places, but that does not mean that we should not try. It is hard to engineer reliability in some of these unforgiving places, so the installations will be larger and more environmentally intrusive, and require more maintenance than is needed on land.

That is why this amendment is serious. It will require GB Energy to take into account a number of factors and to continuously monitor these when assessing offshore energy proposals—for example, the cumulative impact of installations when considered alongside nearby projects; the transboundary impacts, when activities in other countries may be impacted, such as commercial fishing; any interrelationships where one receptor, such as noise, can have a knock-on impact on others to disturb species, and in particular subsea noise, which impacts on marine mammals; physical processes, which include changes to the sedimentary flow; and navigational risk assessments, because sometimes vessels can be deflected into the path of others.

Taken together, consideration of these factors would ensure that some of the most delicate marine and coastal habitats, such as that introduced by my noble friend Lady Coffey—the 321 square kilometre Cromer Shoal Chalk Beds marine conservation zone, one of 91 such zones established by the last Government—would be protected.

I am not against harnessing this most inexhaustible supply of offshore energy, including tidal. The energy is there, it is year-round, it is predictable and reliable, and it deserves to be won and should be won. It is just remarkable that the Secretary of State is not required to give the appropriate directions to GB Energy to balance not just the carbon environmental benefits but environmental safeguards in the widest sense.

This evening, we sat on the water Bill. That Bill is the consequence of not thinking ahead about what might happen when a public utility gets carried away. Let us put the protections in the Bill now to constrain Great British Energy, and require the Secretary of State to ensure that a private body established for a public purpose acts in the wider public interest, not its private self-interest, and sets an example to others.

In summary, I agree with the sentiment of Amendment 38, but it does not go far enough. We must not allow carbon alone to trump all other environmental considerations. I will listen carefully to the debate, but I feel that, because of the inadequacy of government Amendment 38, if adjustments are not made then I may seek to divide the House accordingly.

[Lord Offord of Garvel (Con)]

My Lords, I will speak to Amendments 47 and 48 in my name and in support of Amendment 51 in the name of my noble friend Lord Fuller.

The threat posed to the environment by the rapid installation of renewable energy technologies is familiar to this House, as it was discussed extensively in Committee and during debates on the Crown Estate Bill. We know that the UK is the second-largest offshore wind market in the world, and that allocation round 6 under this Government has awarded 5.4 gigawatts of offshore energy contracts across fixed and floating offshore wind and tidal stream. Indeed, the Government have committed to quadruple offshore wind by 2030 as part of their wind revolution.

The speed and scale of the Government’s offshore wind developments raise significant concerns about the impact on our ecosystem. While offshore wind farms may have the potential to have positive impacts on natural habitats, we must not neglect the potential harm that wind or tidal technologies may have on our natural environment. On that note, I support Amendment 51 in the name of my noble friend Lord Fuller, which follows a similar line to Amendments 47 and 48 in my name.

Through their so-called unprecedented relationship, the Crown Estate and GB Energy have a duty to assess and mitigate the impact of their activities on the environment. By law, GB Energy must assess, report on and minimise the impact of its activities on our environment in seeking to ramp up renewables and phase out fossil fuels.

I welcome Amendment 38 in the name of the Minister. We stand by to support the noble Baroness, Lady McIntosh, if she pushes her Amendment 40 to a Division. Meanwhile, I remain to be satisfied by the Minister’s response to my Amendments 47 and 48, and will consider testing the opinion of the House.

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Amendments 41 and 42 not moved.

[Lord Offord of Garvel (Con)]

My Lords, I wish to speak to Amendment 42.

[The Deputy Speaker (Baroness Finlay of Llandaff) (CB)]

I have already called it. We have finished that group.

[Lord Offord of Garvel (Con)]

My Lords—

[Noble Lords]

Order!

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Moved by

[Lord Offord of Garvel]

46: After Clause 7, insert the following new Clause—
“Impact assessment on erection of pylons(1) Great British Energy must assess the potential impact of the erection of pylons which occurs under or in support of its functions on—(a) local communities, and(b) the environment.(2) If the assessment under subsection (1) determines that the erection of pylons—(a) will cause significant harm to local communities, or(b) will cause significant environmental damageGreat British Energy must not facilitate, encourage or participate in the relevant activity.(3) Within 12 months of the day on which this Act is passed and annually thereafter, Great British Energy must produce an annual report on the impact of the erection of pylons used to support its activities on local communities and the environment, and lay all such reports before Parliament.”Member's explanatory statement
This would require Great British Energy to assess and report on the impact on local communities and the environment of the erection of pylons used to support its activities.

[Lord Offord of Garvel (Con)]

My Lords, I shall speak to Amendment 46 in my name and that of my noble friend Lord Effingham. This seeks to place a duty on Great British Energy to produce an assessment on the impact that the erection of pylons will have on local communities and the environment. Following such an assessment, if the erection of pylons will cause significant harm and damage to the above-listed categories, GB Energy must not continue to build them. The amendment also seeks to include an annual report on the impact of the construction of these pylons that must be laid before Parliament so that the proper accountability measures are in place.

To achieve the Government’s rushed and ideological target for clean energy by 2030, it has been proposed that nearly 1,000 kilometres of new power lines will have to be built. It is the undeniable truth that the infrastructure of the electricity network will need to be built at a far faster rate than it has been in the past decade if the Government are to meet this pledge.

The reality is this: it would be possible to find a way of distributing and transmitting electricity that will not permanently damage the countryside if the Government were to uphold our 2035 target. We understood this; we committed to exploring the use of undergrounding, because the energy system operator said that in the long term that can save costs and it will avoid irreparable damage to our countryside. It is strange that the Government have dismissed this advice, choosing to base their energy policy on ideology. This is particularly true, given that an official report into the East Anglia network has discovered that in the longer term it is cheaper to bury the cables underground. The evidence suggests that, if the Government stick to our original target, they may save £600 million through the use of underground cables rather than pylons.

However, if the Government insist on achieving a decarbonised grid by 2030 at the expense of the British countryside, it is essential that GB Energy assesses and reports on the impact of their use of pylons and ceases activity if it is causing significant environmental damage.

I am minded to test the opinion of the House. I urge all noble Lords to support this amendment.

[Lord Ashcombe (Con)]

My Lords, I understand that transporting electricity will continue to be a challenge; much of it is generated offshore in Scotland, but the need is far greater in the south. Pylons are not loved infrastructures by most but are a necessary evil. There is therefore an absolute need to assess their effect on not only those communities that live nearby but the environment, as pylons march across the countryside, often through much of our most scenic areas, not to mention the flora and fauna.

I suggest that pylons are not the only method of transport; my noble friend Lord Offord mentioned underground cables, and sea cables are also an option. There remain environmental factors, but power still has to come ashore to the areas of demand. The onshore issues therefore still remain.

The spend to achieve this, according to NESO, is some £40 billion a year for six years until 2030. I suggest two items of practicality: can the infrastructure be built on time, and do we actually have the workforce to complete this massive task? Local communities deserve nothing less than an assessment of the potential impact for the years to come.

[Lord Hunt of Kings Heath (Lab)]

My Lords, we come to the issue of pylons. This is of course an interesting issue; I well understand that pylons are not necessarily popular with the public. They are, I am afraid, just a consequence of what we need to do to expand the grid.

The projects that Great British Energy is involved in may require the erection of pylons, but the assurance I can give is that they will be subject to existing rigorous planning processes and the relevant regulations, as with any similar projects, including environmental impact assessments and statutory stakeholder engagement. We recognise that poorly sited pylon projects can have an impact on the local area, as has been mentioned, such as in relation to wildlife, heritage or sense of place. That is why we are retaining the checks and balances in the planning system and why we want to ensure that all developers continue to engage with communities.

Noble Lords have mentioned offshore solutions. We are already building an extensive offshore network. Indeed, the latest network design from NESO means that, by 2035, three times as much undersea cabling could be laid than pylons across Britain, so we are not ignoring the potential but we will need pylons. We are not reducing the planning regime in any way at all; we want to speed it up, but we will have the protections in place and environmental considerations will come to the fore.

We do not need this amendment. I am quite satisfied that the provisions in statute at the moment are sufficient.

[Lord Offord of Garvel (Con)]

My Lords, I believe that the Government’s tunnel-visioned focus on renewable energies means that the grid will have to be developed at a far greater rate than if we turned our attention to gas and nuclear. Renewables are by nature less dense in energy and require more infrastructure to connect their assets to areas of high demand. It is striking that, as reported by NESO, we will need twice as much grid to be built in the next five years as we have built in the last 10 years combined.

Under this Government, communities are being overridden and their concerns ignored. This is not the way to undergo a successful clean energy transition. By choosing to bring forward unilaterally their clean energy target by five years to 2030, the Government have shown that it is ideological dogma. Where is the community benefit scheme that we set out when in government?

NESO has also said that all grid projects need to be met on time and that three will have to be fast-tracked ahead of schedule. If that does not happen, the Government will not meet their target and families will pay billions of pounds in extra curtailment costs. This is the cost of these accelerated power plans. We must balance carefully the necessity of enhancing our energy infrastructure with the preservation of the landscape and the communities that rely on it.

This is not simply about building pylons; it is about ensuring that the energy transition does not come at the expense of the environment or local economies. That being said, I hope that noble Lords will look to support the amendment in my name. I wish to test the opinion of the House.

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[Lord Offord of Garvel (Con)]

My Lords, I rise to speak in support of my noble friend Lord Fuller’s amendment. In tabling it, he raises a matter of utmost importance: our nation’s food security and the agriculture industry, which has been subjected to punitive tax measures by the Government.

This debate is not about whether we should install renewable energy technologies; it is about where we should develop renewable energy. At best, we can hope that, indirectly, GB Energy will help to power and heat British homes in a bid to achieve clean power by 2030. However, it is imperative that the Government’s race to renewables does not come at the expense of British agriculture and food production. It should be known that, when land is used for solar farms, it does not see agricultural use for decades. We must look to protect the most versatile and fruitful land to feed the nation. This is not to say that there will not be land that can be used for renewable energy production. Ultimately, we cannot find ourselves in a position where we have warm homes but no food on our plates. Our energy security trumps food security.

My noble friend raised his concerns in Committee but, regretfully, the Minister’s response was rather unsatisfactory. It is essential that the protection of agricultural land for renewable energy development is embedded in law. With that in mind, I urge all noble Lords to support my noble friend. The amendment in his name presents us and the Government with an opportunity to take decisive action to reserve agricultural land for food production. I will support my noble friend Lord Fuller if he wishes to test the opinion of the House.

[Lord Cryer (Lab)]

My Lords, I turn to Amendments 50 and 52 in the name of the noble Lord, Lord Fuller, and spoken to in his prose poem of a speech. The importance of maintaining our natural resources to support UK agriculture and of supporting local stakeholder consultation in affairs that affect their surroundings and quality of environment are values that we share with the noble Lord. However, for the reasons that I will now set out, I must resist these amendments.

Great British Energy will be subject to the same rigorous planning processes that currently exist to protect agricultural land and minimise the effects on food security. The National Planning Policy Framework includes the preservation of agricultural land for food production as a key consideration in its legal framework governing renewable energy products. It emphasises the need to protect the best and most versatile agricultural land—namely, as the noble Lord, Lord Fuller, said, grades 1, 2 and 3A.

More broadly, looking beyond these specific amendments, the Government recognise that food security is national security—again, as the noble Lord, Lord Fuller, said. The Government do not believe that the accelerated rollout of solar generation poses a threat to food security; I will come on to that in a minute. The total area used by solar farms is very small: even in the most ambitious scenarios, less than 1% of the UK’s agricultural land would be occupied by solar farms. Furthermore, solar generation can be co-located with agriculture, and many projects are designed to enable continued livestock grazing alongside energy generation. Innovation may also reduce the impact of solar farms on agriculture. The emerging science of agrivoltaics is developing innovative ways in which solar can be integrated with arable farming

On statistics, it has often been argued that the land use framework says that 9% of land will be used for energy development. The noble Lord, Lord Fuller, mentioned the 9% figure; although he did not actually say that that would cover energy generation entirely, it was implied. This is not actually correct. The 9% figure covers agricultural land that would be used for the creation and restoration of habitats—I emphasise “restoration of habitats”—such as woodland, heathland, grassland and peatland. It does not cover generation alone. Defra will publish in the near future a land use consultation as an important first step in starting a national conversation on land use. There is also evidence that solar can improve biodiversity in certain areas and under certain circumstances when it is installed on agricultural land.

For these reasons, I hope that the noble Lord is assured that Great British Energy will always consider the effects on our agricultural land as a necessary element of its regulatory approvals and will, therefore, withdraw his amendment—although I am not holding my breath.

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[Lord Hamilton of Epsom (Con)]

My Lords, the reason why I am degrouping this amendment, and indeed Amendment 55, is because there have been developments that affect both these amendments.

Amendment 54 asks the Government to publish an assessment of the expected impact of the Bill on the number of jobs in Aberdeen. Since tabling the amendment, we have had a very remarkable interview with the new chairman of Great British Energy, who goes by the name of Jürgen Maier. For some reason, he did not seem even to know that the Government were committed to lowering people’s energy bills by £300. When he was asked about this, he just sort of waved the whole thing away. He also was asked about the number of jobs that were going to be brought to Aberdeen, and he said 300, which I think is a sort of top whack for the number of people he is going to employ in Great British Energy in Aberdeen. I think there was some hope that there would be rather more jobs than that in Aberdeen, but he did not seem to think that that was very important at all and, indeed, was something that stretched out to the next 10 or 20 years. He did not seem to want to be committed to any of this at all.

I think the Government have a slight problem if that is going to be the spokesman for renewable energy via Great British Energy, and I am not absolutely certain that they have the right man for the job. It seems to me important that you have somebody who stands up for the whole business of renewable energy and the ambitions—indeed, some of the things we voted on this evening—and objectives of Great British Energy. I think he should have a rather clearer idea of what he is trying to do because, if he does not, he will do nothing but bring embarrassment to the Government and everybody who believes in renewable energy.

The other thing, of course, that we must look for when it comes to jobs in Aberdeen is the renewal of the licences for the Jackdaw and Rosebank fields. I gather the Government are looking at this quite closely. It does seem to me to be absolute madness—which can only really be entertained by the Energy Secretary, Mr Ed Miliband—that, at the end of the day, we envisage a future where, inevitably, we are going to need oil and, for some extraordinary reason, that oil cannot come from our oil fields; the oil and gas will have to be imported from other countries, with, of course, a greater carbon footprint than there would otherwise be. That does not seem to be anything other than complete insanity.

I think the world is coming to realise that, although there have been these very ambitious goals of reaching net zero, the fact is that we are going to need fossil fuels for much longer than most people think. If that is the case, we might as well use our own sources of oil and gas and employ our own people, rather than employ Americans and people in the Gulf and import it from there. As I say, there will be a larger footprint if the whole thing is imported into this country from abroad.

So it strikes me that we have our priorities very seriously mixed up on this, and the Government will have to change their attitude on all of this, because otherwise we are going to make ourselves look absolutely ridiculous and do nothing to lower global emissions, which is the objective we are all trying to get.

My Amendment 55 deals with the viability of the Government reaching their net zero target. This, for me, has been very much affected by the breakfast I had this morning with people at JCB, who are very keen that we move to a much greater production of liquid hydrogen, because they believe that that is the one fuel that can actually drive heavy vehicles such as theirs, and that that fuel has a great future there. The good news about liquid hydrogen is that they think it could be very effectively used not only in heavy vehicles such as lorries and so forth but also in trains. They were not so happy that this was an answer for aviation—but aviation is a big and growing business, as the Government recognise, with their dedication to building a fourth runway at Heathrow. Obviously, aviation is going to be a growth business as more people fly around the world, and if we are not going to have a constant source of CO₂ emissions from that, we have to move to a better fuel.

So there are many reasons why hydrogen ticks many boxes, but the problem about it is that it is not actually a silver bullet but a golden bullet. It is extremely expensive to produce and uses very large amounts of electricity. So I hope that what we will be looking at is using small modular reactors dedicated to actually producing hydrogen. Perhaps—and I am not saying this will happen—this will be able to bring the price down to a level that is bearable and something we can live with, because, if we could get the price of liquid hydrogen down, it would make a massive difference to the ability to run heavy vehicles and aircraft and other forms of transport without polluting the atmosphere and increasing the CO₂ footprint, which is one of the problems that we have today. I look forward to what the Minister has to say about both my amendments and I beg to move.

[Lord Offord of Garvel (Con)]

My Lords, I rise to speak briefly in support of my noble friend Lord Hamilton of Epsom’s Amendments 54 and 55. My noble friend referenced an interview given on 3 February 2025, in which the chair of Great British Energy, Jürgen Maier, admitted that only 200 to 300 jobs would be created in Aberdeen by Great British Energy and it could take up to 20 years for the 1,000 promised jobs to materialise. Yet in January, the Energy Minister, the Member for Rutherglen in the other place, confirmed that the Government’s plan for Great British Energy to create 1,000 jobs in Aberdeen “has not changed”. It seems that we are told one thing by Ministers and another by Great British Energy’s chair.

It seems that the Government have given Great British Energy the responsibility for delivering on their commitments, but Great British Energy does not agree that Ministers’ ambitions are its responsibility. While Ministers and Great British Energy executives can disagree, the British people will be left without the tangible benefits they were promised. It strikes me that this should be of great concern to Ministers, who will be ultimately accountable for Great British Energy’s failure to deliver on the promises they themselves made.

Turning to Amendment 55 in the name of my noble friend Lord Hamilton, I supported his decision to probe the costs and viability of the Government’s net-zero targets. We have already had discussions around this question, most notably when we discussed pylons in an earlier group. We agree that the Government’s net-zero targets are driven by ideology and need to be reviewed to ensure that they are practically and affordably achievable. I hope that the Minister will look kindly on my noble friend’s amendment in his reply.

[Lord Hunt of Kings Heath (Lab)]

My Lords, I always look kindly on the contributions made by the noble Lord, Lord Hamilton, and enjoy debating these with him. However, sadly, I am not going to respond sympathetically to either of his amendments, perhaps to his disappointment and surprise.

The amendments would delay the designation of Great British Energy under Clause 1 and the ability of the Secretary of State to provide financial assistance under Clause 4. I must object to that. It is essential that Great British Energy starts its operations as soon as possible.

On Amendment 54, I will just say this: anyone who has met Juergen Maier will have been impressed with the quality and energy, and breadth of knowledge, experience and wisdom, that he brings to the job. He certainly has the backing of His Majesty’s Government.

We need to put to rest this nonsense around Aberdeen. I have stated very clearly already this evening that we expect Great British Energy to employ 200 to 300 people, initially at its Aberdeen headquarters. The substantial issue is that GBE’s activities will create and support thousands of jobs across the country.

As far as the continental shelf is concerned, I readily acknowledge the great contribution that it has made to the United Kingdom and the work of the skilled people who work in the North Sea. However, it is a declining asset. We have said that it will continue to play an important role in the future, but the future of energy in this country is to move to clean power as soon as we possibly can. We want to see continued extraction from the North Sea while that is necessary. We want to ensure a just transition for people working in the industry to other sectors, because they have a huge contribution to make.

In respect of the 200 or 300 people, the fact is that we are talking about this Parliament. As the years go by, there will be more jobs in Aberdeen and the GBE contribution will be enhanced.

I hope that the noble Lord, Lord Hamilton, will recognise that the Government are fully on top of these issues, and that we have a consistent, coherent policy to lead us to energy security, and will not press his amendment.

Great British Energy Bill

Lord Offord of Garvel Excerpts

3rd reading
Tuesday 25th February 2025 Lords Chamber

[Earl Russell (LD)]

My Lords, I will speak first to the amendment in the name of the noble Lord, Lord Hunt, which is supported by the noble Lord, Lord Vaux. These Benches are pleased to see that continued progress has been made and that this government amendment has been brought forward. There has been a unanimous voice across the House that there needed to be more reviews in the Bill and that it was important to have this amendment, so we are pleased to have it in place.

I echo what was said on the Government’s amendment to the amendment and the addition of proposed new subsection (4)(a), which requires a copy of the review to be sent to the devolved Ministers 14 days before it comes to Parliament. My assumption is that that is there so that the devolved authorities have a chance to comment on the review and that those comments have a chance to come before Parliament, but it would be useful if the Minister could confirm why that new subsection has been added and what the Government’s thinking is on it.

We welcome the review, but it is happening over a five-year timeframe, with the first review completed at the important date of 2030. If the Government recognise the need for the review, why not have it on a more regular basis? A three-year or four-year timeframe would be more useful for this proposed new subsection to have the effect that the Government intend it to have.

I turn beyond the amendment to what I want to say at the end of Third Reading. These Benches have been consistently supportive of the Government and their objectives in this Bill. We believe that, done well, GB Energy will help to secure our energy independence and reduce our reliance on volatile international gas markets, which have proved so costly for UK bill payers and our economic prosperity.

The previous Conservative Government spent some £40 billion subsidising bill payers, and that money provided no long-term benefit to our overall energy security. Just this week, the Energy and Climate Intelligence Unit published a report on the anniversary of the invasion of Ukraine, stating that £140 billion has been spent by the UK on the international gas markets since 2021—the equivalent of £1,300 per person. Again, this has brought no long-term benefits.

We have the third-best wind resources in the world, so it is great to see that these are finally being properly developed to bring us long-term energy security and to reduce costs for our energy bill payers. The CBI reported this week that the green economy contributed £80 billion in gross value added to the UK economy last year and grew at a rate of 10%—three times faster than the rest of the UK economy.

Having said all that, I always felt that the Bill was a little bit too short and lacked the content that it needed; that has caused us some challenges when scrutinising it. We welcome all the amendments that have been passed; we believe they add value and that the Bill leaves this place in a stronger position than when it arrived. I am particularly grateful to the Minister and his Bill team for including community energy in the Bill. This is a really important amendment, and it will benefit our communities and help with the energy transition. Community energy has been supported by MPs and noble Lords on all sides, so this is a win for everybody. I am grateful to Power for People, which has provided support to all of us on these matters, and we will continue to press the Government, as others have already mentioned, on the future of the community energy fund.

We also welcome the other amendments that were tabled: the amendment on strategic priorities; and the amendment that the noble Baroness, Lady Hayman, negotiated with the Minister on sustainable development.

Finally, if noble Lords will excuse me, I want to say something about the words that we use as parliamentarians and how we talk to each other on the issues of climate change. I deeply regret the end of the political consensus on climate change. My personal feeling as a relatively new Peer in this House is that while bits of our debates on this Bill were excellent, there were too many moments when points were repeated, purely party-political points were made that did not improve or challenge the Bill, filibustering took place, or we had numerous votes that took place very late at night.

The public support action on climate change. Polling consistently shows 70% support. The public also want to see reductions in their energy bills; they do not much care, frankly, how that happens, but it requires all of us to make progress. These matters are challenging enough to address with a sense of consensus, and they are made even more difficult when political hostility is added to the mix. My final point is that we must all work better together so that we can all achieve more.

[Lord Offord of Garvel (Con)]

My Lords, in concluding for His Majesty’s loyal Opposition, I thank noble Lords from across the House for their tenacity in scrutinising the Bill, and in particular the noble Lords, Lord Alton of Liverpool and Lord Vaux of Harrowden, for their amendments. On my own Benches, I note the contributions of many noble friends, who have done sterling work to temper what is a misguided piece of legislation which will not deliver cheaper energy for UK households or businesses.

GB Energy is flawed because it exposes the conflict at the heart of this Government between the Chancellor’s stated priority of economic growth on the one hand and, on the other, the accelerated pursuit of net zero at any cost that the Energy Secretary has made his ideological obsession. While this scrap rages at the centre of Whitehall, there is only one loser: the public, who, it has been confirmed today, will be loaded up with the price of net zero to the tune of another £111 per household this year. That is directly because of this Government’s policies and a far cry from the promise in the Labour manifesto of a reduction in energy bills by £300 per year per household—a manifesto pledge which this Government have refused to include in this legislation.

As the Bill has progressed through your Lordships’ House and the other place, the chasm between rhetoric and reality has indeed been exposed. I believe that in a decade we will look back and ask why we invented this cardboard cut-out company. But despite our deep scepticism, it would be churlish not to wish GB Energy a positive start, so I offer some start-up advice. With its £8 billion of borrowed money, the first order of business should be a feasibility study of all the energy sources available to us in the UK. If it does so, it will discover the following. The dash for renewables at any price is a folly. In doing so, we are loading excessive costs on to our energy bills, to the point now where our industrial energy in the UK is five times more expensive than in the US and seven times more expensive than in China. All the while, we are offshoring jobs from the UK to China, turning UK revenue into Chinese profits. This is impoverishing our nation.

The Government are denying the facts. We are an energy-rich country, and our hydrocarbon industry is the envy of the world in terms of compliance and sustainability. Surely it is irresponsible to refuse to even explore the opportunities that onshore gas could bring, while of course undertaking an assessment of risk. The fact that this Government’s policy continues to tilt towards shutting down offshore oil and gas is surely an affront to the hundreds of thousands of skilled workers in Aberdeen and the north of Scotland. They surely deserve better than this.

Meanwhile, both parties agree that nuclear is efficient and clean, but it should be accelerated. We should cut the red tape by unleashing our homegrown engineers while being unafraid to learn from those, such as the Koreans, who have been able to roll out nuclear energy more quickly and at a lower cost.

If GB Energy does this feasibility study, it will realise the facts and then it should pivot net zero accordingly to ensure that our transition to a cleaner energy system is both fair and affordable to UK households and industry. For the sake of the country, we can only hope that it does so.

Finally, I believe it is important to state unequivocally that my own party must reflect on the last 14 years of government energy policy. The verdict of the electorate in July was clear and resounding. As many noble Lords are aware, an error does not become a mistake until one refuses to correct it, and I would encourage the current Government to heed these wise words.

[Lord Hunt of Kings Heath (Lab)]

My Lords, we were debating my amendment, but we seem to have done the “the Bill do now pass” speeches as well, so if noble Lords allow, I will do both in my response.

I thank noble Lords for their general welcome for my amendment. I think it is a very satisfactory outcome of our debates in Committee and on Report. On the question asked by the noble Lord, Lord Vaux, and the noble Earl, Lord Russell, about the devolution aspect, the noble Earl put his finger on it. It seems perfectly appropriate that the devolved Governments should receive a copy before publication, because that then allows them to have sight of any findings that might be relevant and which they may have to answer on the day of publication. No slight is intended to Parliament in this, it is just the normal business of Government-to-Government relationships and courtesy. That is why we withdrew the original amendment and replaced it with the revised one, in the light of representations made to us by the devolved Governments.

On the timings of the review, noble Lords will know that we had in mind, at first, the UK Investment Bank, which I think has a seven-year review period. The noble Lord proposed three years and in the end we compromised. That is not unreasonable: Great British Energy must be allowed some time to set itself up and get itself into working order and then, at an appropriate point, we will have a review. It is worth making the point that GBE’s work does not come to an end in 2030; that is just a deadline we have given for clean power. We expert GBE to go on for many years to come, and therefore it is going to be a judgment, but we think five years is not an unreasonable time.

I say to the noble Lord, Lord Naseby, that I agree with him about the potential for small modular reactors —we have a programme that Great British Nuclear is running at the moment and I hope it will be able to come to some important decisions over the next few weeks and months—and he is absolutely right to mention them. I also share his view about the potential of hydrogen. We do not disagree at all with the noble Lord on that.

As far as community energy is concerned, this was raised on Report and I do not think there is anything more I can say at the moment. Clearly, we recognise the important role that community groups can play. Our intention is that Great British Energy will build on existing support, by partnering with and providing funding and support to local and combined authorities, as well as community energy groups, to roll out renewable energy projects and develop up to 8 gigawatts of clean power. I am afraid I cannot give any more details at the moment, but I understand and take note of what noble Lords have said about the companies concerned. I take this seriously and will ensure that it is considered, and we will set out further details in due course.

On the issues raised by the noble Baroness, Lady McIntosh, about sustainability, let me be clear that the independent review is focused on the effectiveness of GBE in delivering its mission. It will cover all aspects of the work of Great British Energy and will not focus solely on its financing, as the noble Baroness feared. To give an example, one of its important roles will be to clear the way to allow developers to come in. That will be an important part of the review. Furthermore, as I have already said to the noble Lord, Lord Vaux, additionality will be an important part. Clearly, the amendment that I brought on Report—about GBE needing to keep under review the impact of its activities on the achievement of sustainable development—means that that will be part of any review undertaken by the independent reviewer. I hope that reassures the noble Baroness.