Great British Energy Bill (Fourth sitting)
Michael Shanks Excerpts(1 year, 4 months ago)
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The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Michael Shanks)
It is a pleasure, Sir Roger, to serve in this Committee under your—
The Chair
Order. In case hon. Members are not fully aware, ordinarily we would call any Member on either side of the Committee before calling the Minister. It is not the same procedure as on the Floor of the House, where we would normally call, in this case, the Opposition and then the Government Front Bench. That is why I paused slightly to see whether anybody wanted to intervene.
Michael Shanks
I will take the amendments in turn, starting with amendment 13, tabled by the hon. Member for West Aberdeenshire and Kincardine. The creation of Great British Energy allows us to harness clean energy and have less reliance on volatile energy markets. I must resist the amendment for a number of reasons. Parts of the various amendments are linked, so I will deal with what they have in common.
First, a founding principle of Great British Energy is that it should be operationally independent. The Bill is clearly about making the minimum necessary provision to establish the company. Adding further unnecessary detail, as we have talked about with regard to various amendments today, risks restricting the company in carrying out its activities and going against our commitment to the British public. The hon. Gentleman will be familiar with this model of legislation, given his involvement with pieces of legislation such as on the UK Infrastructure Bank. We heard from a number of witnesses on Tuesday that they want the Bill to be broad enough to allow Great British Energy to move into different opportunities as they arise but, clearly, the focus we have set out for it concerns the long-term energy security of the country and bringing down bills.
Secondly, the Secretary of State has the power—we will come on to this, I have no doubt—to set the strategic priorities. It is right that the statement of strategic priorities sets out what Great British Energy’s objectives are. As the hon. Gentleman knows, because he and other hon. Members have referred to it at various points, we live in an increasingly unstable world. The last few years have brought that to the front of our consciousness. Our energy security and the protection we need to give to bill payers mean that we need to speed up the transition from fossil fuels to home-grown clean energy. We are unwavering in our commitment to that as a long-term project and a cornerstone of our sustainable plan to safeguard bill payers for good.
In speaking to these amendments, the hon. Gentleman referred to our witnesses on Tuesday and the fact that putting more green energy on the grid reduces overall costs. I agree with him on that, but it is therefore important to recognise that Great British Energy is a vehicle to speed up that process. Measures under the previous Government, of which he was of course part, made that more and more difficult—for example, the onshore wind ban, which one of his colleagues said was “always mad”. We need to recognise that this is a change of direction. If we agree that the only way to bring down bills and reduce the wholesale cost for good is to move to more secure home-grown green energy, we need to have the full commitment of Government to deliver that.
I will now turn to amendment 14, which would require the Secretary of State to give
“specific direction to Great British Energy that it must report…on the progress made by Great British Energy towards”
electricity prices. The report set out in the hon. Gentleman’s amendment must be made within two years of Royal Assent. We will resist the amendment today, because we think it is unnecessary.
As I have already outlined, the shift to clean energy is about increasing home-grown power and accelerating the reduction of our exposure to international markets. Broader than Great British Energy, the Government are running a series of programmes and reforms to pass on cheaper renewables to consumers. For example, as we mentioned earlier, there is the review of electricity market arrangements.
As a publicly owned company, Great British Energy will be accountable through regular reporting to the Department for Energy Security and Net Zero. Furthermore, like other arm’s length bodies of Government, it will be accountable to Parliament, but will operate independently, at arm’s length, from Ministers. That is important, because the point of setting up a publicly owned energy company independent of Government is to bring in the skills and experience of an executive board and staff who will not be directed day to day by Government, but will, of course, work within the parameters that we have set it. As I have said in response to a number of amendments today, adding further unnecessary detail risks restricting the company in carrying out its activities, and is against what we have said in setting out the Bill.
Michael Shanks
I will start where the brilliant speech of my hon. Friend the Member for Sheffield Hallam left off. It is a bit rich for the Opposition to talk about fixing the issue with jobs in the renewables sector that they failed to fix for 14 years. First, I take the issue that the hon. Member for West Aberdeenshire and Kincardine raised about jobs in Aberdeen, because it is an extremely important subject, but I think he confuses two things— I would suggest perhaps deliberately. Juergen Maier clearly said on Tuesday that the headquarters of Great British Energy in Aberdeen will have jobs in the hundreds, perhaps expanding in the years ahead, but that the jobs created by Great British Energy are much more than the headquarters. We have always said that it is the investments that Great British Energy makes that will invest in jobs in Aberdeen, in the north-east of Scotland and right across the UK, in the tens of thousands. That is important to separate out.
The hon. Gentleman’s point about the transition is really important, both to the Bill and more broadly. He is right: long before this Labour Government were elected, there was a transition under way in the north-east of Scotland. It is a declining mature basin. It is important that we now take seriously what that transition looks like, and that will require tens of thousands of new, skilled and—crucially, for the north-east of Scotland in particular—well-paid jobs. That is what we are attempting to do with Great British Energy but, as my hon. Friend the Member for Sheffield Hallam says, Great British Energy is not the only vehicle for it. We have deliberately said that we will set out an industrial strategy, because we are not a Government who think that manufacturing jobs in this country and an industrial strategy are an irrelevance. Actually, they are critical to our economic future.
Stephen Flynn (Aberdeen South) (SNP)
The Minister has tempted me to have a look at what Juergen Maier said. I asked him very clearly how many jobs would be in Aberdeen. His response was quite clear:
“It will be in the hundreds; it may eventually be 1,000 or more in the HQ.”––[Official Report, Great British Energy Public Bill Committee, 8 October 2024; c. 6, Q4.]
The HQ is, of course, Aberdeen. That would run contrary to what the Minister has just said.
Michael Shanks
That is not what I said at all. What I said a moment ago is exactly the same, which is that in the short term—in the start-up phase of the company—there will be a few hundred people. That is exactly what Juergen Maier said. In future, our aim—particularly with the right hon. Gentleman’s support, which I was not expecting at the start of today—is that it will grow even further, into a much bigger company. As a result, we expect that there could very well be thousands of jobs in the headquarters in Aberdeen. I am not ruling anything out or limiting the potential of Great British Energy, and I hope that the right hon. Gentleman is not either. I make this point again, for the benefit of the right hon. Gentleman: critically, that is not the limit of the jobs that will be created by Great British Energy. It is important to recognise that the jobs potential will come from the investments and partnerships that it makes.
Harriet Cross (Gordon and Buchan) (Con)
The second part of the amendment states that the jobs should be created by 2030. That timescale is really important, because it ensures that the expertise we have now can be retained to help build these jobs of the future. Even if the Government will not commit to the figure, will they look at the timescale, which will give the industry certainty?
Michael Shanks
For reasons I will come to in a moment, we will not agree to the amendment because we will not put timeframes and numbers in the Bill—we do not see those in any piece of legislation from the previous Government or any other Government, and for very good reason. However, the hon. Lady is right that this decade is absolutely critical for this issue. That is why I am taking it very seriously, and will happily have conversations with her about how we get these jobs as quickly as possible. The timeframe for that is important, but it is also important that we start with building things such as Great British Energy, which I hope she will support, and our broader policy around the office for clean energy jobs, our industrial strategy and our increased investment in things such as the renewables auction.
To come back to what the hon. Member for West Aberdeenshire and Kincardine said about offshore wind, he took some credit for it, but of course his Government have to take responsibility for the complete failure on offshore wind in the last auction. We have turned that around with some really successful projects and want to build considerably more in the future. He gave an absolute masterclass for a new Minister like me on how to speak to something—the onshore energy ban in England—that I know he does not believe in, because he is a smart guy.
The reality is that that was ideology over delivery of something critically important. Now, we have inherited not just a lack of projects that would help us towards clean power and deliver jobs right across the UK, but an empty pipeline of projects, given the length of time where wind in England was banned. It is a ridiculous policy that I do not believe for a second the hon. Gentleman supports, but it was a very good example for me on how to deliver a line.
As I said earlier, this clause is specifically about giving very particular, rare directions in urgent or unforeseen circumstances. It is not a clause we expect the Secretary of State to be using regularly. That is important, because I suspect that if it was phrased in any other way, the hon. Gentleman would quite rightly propose an amendment limiting the powers of the Secretary of State to doing exactly that. This clause is about ensuring that Great British Energy has the space to fulfil its strategic priorities. Amendment 16 would widen that intention by adding a long-term goal.
More broadly, and relevant to both the hon. Gentleman’s amendments, I repeat that the aim of Great British Energy is to be operationally independent from Government. The Bill focuses solely on making the absolutely necessary provisions to establish the company. Adding further unnecessary detail—detail I know the Conservative party would not dream of adding to any of its own legislation—risks restricting the company in carrying out its activities and goes against what we have said. That sentiment was supported by almost every witness, including on specific questions about this matter, where I think people were hoping for different answers. Every single witness confirmed that the Bill is in the right place here. For those reasons, and many others, we will not be supporting the amendments.
Andrew Bowie
In confirming that we will be putting the amendments to a vote, I put on the record my congratulations to the Minister, because he may have achieved what I thought was unachievable: getting the right hon. Member for Aberdeen South to welcome and support something with “Great British” in its title. That is a quite a significant achievement, if I may say so.
Question put, That the amendment be made.
Andrew Bowie
My hon. Friend and constituency neighbour is absolutely right. I completely agree. She is a doughty champion for supply chain jobs based in her constituency, in mine, in that of the right hon. Member for Aberdeen South and in others across the country. One reason that we have been so critical of this Labour Government’s North sea policies—the extension and increase of the energy profits levy, the removal of investment allowances, the removal of further licences in the North sea—is the impact on the domestic supply chain jobs that exist already and, by the way, on the high-skilled jobs that will deliver the cleaner energy future that we all want to get to.
That is why I and others in Committee have been so critical in the past—it is not that we do not want to see the transition; it is that we want the oil and gas industry, and those people in the supply chain who are employed by it now, to be a part of that transition. Without a successful domestic oil and gas industry or domestic supply chain, we will not deliver any of the projects that we are speaking so glowingly about in Committee and over the past few weeks, months and years. As my hon. Friend the Member for Gordon and Buchan says, it is critical for the supply chain to support net zero transition.
Security of supply chain is absolutely relevant to the objectives of GB Energy and should be included as a strategic priority, hence the amendment. I also tabled amendment 18, which would introduce the direction for GB Energy to report to the Secretary of State on the progress being made towards developing domestic supply chains.
Michael Shanks
I am enjoying this debate more and more. I feel that by the end of today, or Tuesday at a push, we may get the hon. Gentleman’s support for Great British Energy. I look forward to that.
The very argument that the hon. Gentleman has put forward for both amendments emphasises the absolute failure of 14 years of his Government. The very fact that he is making those points emphasises how much they failed. I welcome the realisation, albeit somewhat late, that manufacturing in the UK and having jobs in this country delivering for the energy future are important. The Kincardine wind farm off the coast not far from his constituency—perhaps it is in his constituency—is a very good example. It was towed into place, with all the jobs offshored somewhere else. That example that shows why we need to do things differently. Great British Energy and our industrial strategy are part of that.
While I could spend this time criticising the previous Government, I will simply welcome the fact that the hon. Gentleman has showed up to the party at all. This is a key part of what Great British Energy will do. The supply chains are critical, because 80% of the jobs in the oil and gas industry are in the supply chains, and the good, well-paid jobs we need for the future will be there too. I think it might have been the witness from the GMB who made a very good point about jobs in welding. That is a good example of where we can have real, well-paid jobs for the future if we invest in those skills now, and that is exactly what Great British Energy will do.
However, Great British Energy is not the only part that will deliver on those jobs. The Department for Business and Trade is also working at pace to develop an industrial strategy that will include detailed work on the supply chains, and we are working through the various taskforces launched under the previous Government and continued by this Government. For example, on the solar taskforce we have been looking clearly at how we can bring those jobs to the UK. The hon. Gentleman rightly talked about the security of where some of those manufacturing jobs are in the world—places in the world that we would rather they were not. Bringing some of that manufacturing capacity to the UK will be difficult in some of those industries, but it is important to do it so that we have resilient, diverse and sustainable supply chains.
My Department has also established an office for clean energy jobs, which will focus on developing the skills and the training for the workforce in core energy and net zero sectors around the transition, but also, critically, on bringing on the next generation of apprentices and workers in the skills and jobs that we did not know existed until the last few years. That will ensure the sustainability of our supply chains and meet our mission to make the UK a clean energy superpower.
Although it is welcome to hear the commitments from a Conservative party that has had something of a conversion on this issue, we do not think that amendments 17 and 18 are necessary to the Bill, because the Government are already committed to delivering our intentions.
Andrew Bowie
I do think that the amendments are necessary. If we are to go through the process of creating this company, we should set out as one of its objects the creation and sustainability of a UK-based supply chain, and indeed of the manufacturing jobs that come with that. For that reason, I will press amendment 17 to a vote.
Question put, That the amendment be made.
Stephen Flynn
I beg to move amendment 4, in clause 5, page 3, line 10, leave out subsection (3) and insert—
“(3) A statement under subsection (1) or a revised or replacement statement under subsection (2) will not take effect unless a draft has been laid before and approved by a resolution of each House of Parliament.”
Before I begin my remarks, it is probably best that I correct the record on behalf of the shadow Minister. It is not just in relation to Great British Energy that I have expressed some positivity; I did once watch “The Great British Bake Off” as well.
That aside, it was put to me by some members of the Labour party back in Scotland that I was not supportive of GB Energy, because I did not go through the Lobby with the Government some weeks ago, as I think the Minister referred to in his remarks today. The reason I did not go through the Lobby with the Government that day was that I was not entirely sure what GB Energy was going to do.
In fact, based on the information before us in this Bill, I am still not entirely sure what GB Energy is going to do in practice; it seems to be all things to all people. In principle, perhaps that is not a bad thing, and those who gave evidence to us put forward a number of positive arguments of the necessity for that to be the case, whether in relation to production, generation, the supply of energy or the community projects that Members have spoken about at length.
The purpose of my amendment is to ensure that the House of Commons is fully apprised of exactly what the Secretary of State intends GB Energy to achieve. That will be hugely important, particularly in the context of Scotland, because much of what has been discussed in relation to GB Energy, and the opportunities that may or may not exist, will ultimately be intrinsically linked to the success of projects in Scotland, where the majority of the UK’s renewable energy resource sits. Indeed, I think the director of the Confederation of British Industry said that it is a “golden ticket” to economic growth for the entire UK. Imagine what an independent Scotland could achieve in that context.
The point of the amendment is to ensure that the House of Commons is able to fully appraise the direction that the Secretary of State wishes to take. That might cause Labour Members some consternation, because they have just been elected with a massive majority and may well be able to set out their strategic vision, but they need to remember that they will not be in government forever. They will at some point be replaced—I am not entirely sure who will replace them; there is a decent suggestion that it will probably be by the Lib Dems rather than by the Conservatives, based on the leadership candidates.
However, the amendment would ensure that future parliamentarians and future groups of politicians will be able to apply the same scrutiny that I expect of Government today. I think it is good practice. In years to come, should the Conservative party, the Lib Dems or perhaps some other nefarious party come to control the UK state, they should not be able to do anything contrary to the wishes of Parliament without its having the ability to shape the future of what will hopefully be a successful intervention into the energy market, albeit one with very small amounts of money to drive forward the multiple goals that it seeks to achieve.
Michael Shanks
The right hon. Gentleman tempts me into discussing both independence and the future of the Conservative party, but for your sake, Sir Roger, I will not go into either, although I hope there will be such opportunities in the future. I will make two points in response to the amendment, and there is a broader point, which I will stay off for the moment, that we will return to in the next series of amendments around the role of the devolved Administrations—
Michael Shanks
The devolved Administrations in terms of the Governments—I thank the right hon. Gentleman.
The first thing to say is that the statement of strategic priorities cannot overrule the objectives in the Bill. If an incoming Government—I will not say “nefarious” or otherwise—were seeking to use Great British Energy for a whole other purpose, they would not be able to, because the legislation sets out exactly what it will be used for, and that will be in the articles of association. Those objects set the overarching framework for Great British Energy’s activities and it is right that this framework is in legislation passed by Parliament and debated here today in clause 3.
Were we to move to a point where we required parliamentary approval of the statement of strategic priorities, which is only designed to provide direction in the priorities that the Government sets for the company, we would create unnecessary burdens on the company. Going back to the points in the Lib Dem amendments from earlier, I am concerned that, rather than Great British Energy getting on with delivering, we would end up in a constant cycle in which people add various things—I think someone said “baubles” earlier on, but I am not sure that I will continue that metaphor—into the statement of strategic priorities that would take away from it actually delivering the objects that we will hopefully pass in this Bill.
Pippa Heylings (South Cambridgeshire) (LD)
Taking away labels such as “nefarious” or “baubles” and moving to the serious intent of our interventions, this is about scrutiny, and I take the point from the right hon. Member for Aberdeen South in that respect. We heard from witnesses that if the objects remain broad, they are reassured that all their issues will be contained within the statement of priorities. Will the Minister reassure us about the engagement that will happen prior to the development of those priorities? If it will not happen through the House, what will the process be? Instead of baubles, we may find bits of home-made tinsel hanging on this majestic tree, which is not exactly what was bought in the shop, to continue the metaphor.
Michael Shanks
I think my hon. Friend the Member for Peterborough has a lot to answer for, with the metaphors that have now started, but the hon. Lady makes a serious point. I would just gently challenge one point that she makes. The statement of strategic priorities is not about giving every detail on all the objects. The direction of the company is already very clear. The reason that the objects have been left broad is so that the company can explore opportunities in all those areas without having to come back and get direction on every single point.
Michael Shanks
I will answer the previous intervention first. The point of having an independent company—this is why it is used as a mechanism by Governments of all types—is that it can have the flexibility to move. That flexibility is within the very strict parameters set by Government, but with a broad scope to move into opportunities as they arise.
Wera Hobhouse
I thank the Minister for giving way. The second part of his reply answered what I am worried about, and what we as a Committee have been worried about all along, which is parliamentary scrutiny. Will the Minister advise at what point that parliamentary scrutiny can be exercised?
Michael Shanks
The hon. Lady is well versed in how Parliament works, and there are a number of mechanisms already open to Parliament to scrutinise the work of the Department and the Secretary of State. Indeed, the transparency around clause 5 is that this will be laid before Parliament in the same way that the priorities for the UK Infrastructure Bank and various other independent companies are laid before Parliament.
On the hon. Member for South Cambridgeshire’s second point, which I did not get to and is a very fair point, we are not seeking to design something behind closed doors that has no engagement. I have taken a lot of meetings in the three months that I have been a Minister, and I am very happy to take many more. We want to hear a broad range of views on this and we are happy to discuss it, but there is a balance between having an open approach to how we create, draft and bring ideas together, and ending up with a document—in the end, it will not be a huge document—that just goes round a process for months on end and stops the company from getting on with what we want it to do.
We heard from all the witnesses on Tuesday that speed is important; we do not want to waste any time, and I think that the Liberal Democrats support that approach. We want to get on and do it, and that is important. As I said earlier, I will come on to the point about the devolved Governments and the engagement that we plan with them in due course.
Furthermore, in setting up a company, the company is subject to all the requirements that other companies are, in terms of Companies House and having to produce annual accounts and an annual report. The activities of the board will also, of course, be available so that people can see what decisions the company is making. It is important that this company is at arm’s length from Government but has all the benefits of being publicly owned, in that it is required to manage the stewardship of public funds in a careful and accountable way.
In my view, the amendment is unnecessary, as the processes are already in place to scrutinise the work of Great British Energy and the work of the Department more generally. We will not be accepting the amendment today.
Stephen Flynn
I thank the hon. Gentleman for his intervention, although I am a bit disappointed that he regards seeking the consent of Scotland’s nationally elected Parliament as a blocking amendment. That is quite a Westminster mentality that he has adopted already in the few short weeks that he has been here—perhaps that is an indication of where his party intends to go in the months and years to come. Notwithstanding that, because I do not believe it was a necessary or helpful intervention in that context, I would be very keen to hear from the Minister on why he does not believe he should seek the consent of Scotland’s Parliament.
Michael Shanks
These are very important amendments, as I alluded to when discussing the last group of amendments. Since I became a Minister, I have worked very hard to reset the relationship. Indeed, the Prime Minister’s first official visit was, deliberately, to Scotland. He has set a clear expectation that all Ministers should be engaging with not just the Scottish Government but the Welsh Government and the Administration in Northern Ireland. That is particularly important in the energy space, because our priorities are broadly aligned. There are slight differences in targets and projects, but we all want to move in the same direction across all Governments of the United Kingdom, which is beneficial.
Andrew Bowie
I must take issue with some of the language about this reset—the normalisation of relations and the new respect agenda. We had an incredibly constructive working relationship with the Scottish Government while we were in government. Indeed, had we not, none of the projects that we see established now—we have talked about having the first to the fifth-largest offshore wind farms—and none of the discussions we are having about new technologies would actually have gotten off the ground.
A lot is made of the fact that the new Prime Minister’s first visit in office was to Scotland, but it was also the first visit of Prime Ministers Theresa May, Boris Johnson and my right hon. Friend the Member for Richmond and Northallerton (Rishi Sunak). Our commitment to working with the Scottish Government was demonstrated by what we delivered in our time in office. I very much hope that the Minister continues to enjoy his relationship with the Scottish Government, although I worry that as we move towards 2026 and the devolved election, this new warm relationship between the Labour party and the Scottish National party may become somewhat chillier.
Michael Shanks
I would have stopped short of the hon. Gentleman’s final point, which I will not repeat; I think that was more to salve his own conscience than to add any value to the debate. He may want to speak to the other side about some of those discussions to get a sense of whether the joyous relationship that he described was reciprocated. The fact is that if we want to achieve outcomes across the UK, whatever the political differences—they are significant, and he is right that they will become more significant in the few years ahead—we still need to be the grown-ups in the room and work to deliver them. My engagement has been very much around how we bring in the views of Welsh, Northern Irish and Scottish colleagues.
Catherine Fookes
It is a bit rich hearing the Opposition talk about how to work with the devolved Administrations. I am pleased to see in the Bill that Welsh Ministers will be consulted. The previous relationship between the Conservative Government here and the Labour Government in Cardiff was appalling. Often, the phone was not picked up to Mark Drakeford when he was First Minister. Could the Minister confirm that he will work with the Welsh Government and with our organisation, Trydan Gwyrdd Cymru, which is similar to Great British Energy, and how he will do that?
Michael Shanks
I thank my hon. Friend for her well-made point. Across the UK, we are resetting the way we do these relationships. It is not just the visits and set-piece moments; it is the day-to-day engagement and agreement. There is fulsome discussion and disagreement, but it leads to the view that, actually, we generally agree on the same outcomes and want to work out how to work co-operatively to achieve them. That is what the public would want us to do across these islands.
I will point out some of the engagement we have already had. The First Minister met recently with the start-up chair of Great British Energy and the Cabinet Secretary. I have met the Cabinet Secretary almost every week that I have been in post. It is important to talk through these issues and we think that consultation on the statement of strategic priorities is incredibly important.
I object to the amendment to move to a consent process for exactly the same reason that I gave in answer to the previous point. It is not that I do not want any engagement, but that I do not want us to get tied up in a process. In our engagement with Scottish colleagues, the challenge is how the Government reflect the view of the Scottish Parliament without everything going back through a process in committees. My real worry is that we get tied up in months and months of engagement, trying to find dates in calendars to discuss elements of the strategic plan, and do not actually get on with delivering things.
Josh MacAlister (Whitehaven and Workington) (Lab)
The right hon. Member for Aberdeen South made an important point about elected representatives from Scotland having a role in the strategic priorities for Great British Energy. But this is the United Kingdom Parliament, in which we have good and appropriate representation of Scottish electors, and very strongly and proudly so on the Labour Benches. Surely the UK Parliament and the UK Government are well-positioned to reflect the interests of the whole United Kingdom rather than, as the Minister is indicating, going through multiple repetitive processes that would hamper the ability of Great British Energy to achieve the goals that the right hon. Member for Aberdeen South surely wants for his own constituents.
Michael Shanks
I take that point. I will come back to the role of the UK Government in Great British Energy in a moment, as it is important. Of course I want to engage with Scottish, Welsh and Northern Irish colleagues in this place, but I also want to find a way to engage constructively with the devolved Parliaments and Administrations, not just on the statement of priorities but far beyond that. We have already had conversations about how the board of Great British Energy might engage with the Scottish Government on a more regular basis. We are very open to those ideas, but—to come back to this point briefly—it is important that Great British Energy is funded and directed by the UK Government and therefore ultimately responsible to the UK Parliament.
Andrew Bowie
I thank the Minister for giving way; he is being incredibly generous with his time. Subsection (6) deals with Northern Ireland in the context of what we are discussing. Energy is a devolved competency within Northern Ireland, which works on an all-Ireland grid to deliver electricity on the island of Ireland. Is that the reason the language in that subsection is slightly different? It refers to consulting the Department for the Economy, as opposed to consulting Welsh Ministers and Scottish Ministers in the previous two subsections. How will GB Energy and the Department interact with our Northern Irish colleagues, given that GB Energy will be a body of the UK Government and paid for by UK taxpayers, but will have very little role in delivering energy in Northern Ireland?
Michael Shanks
I thank the hon. Gentleman for that important point. Early on in the development of the Bill, we had a genuine conversation with the Northern Irish Executive about whether Northern Ireland should be included in the Bill at all, on the basis—exactly as he says—that energy is completely transferred in Northern Ireland. We agreed that it was better to keep Northern Ireland in scope so that some of the benefits may come to Northern Ireland, in particular around skills and supply chains, but clearly the relationship will be very different. We do not anticipate Great British Energy funding specific projects, for example, for the reasons that he outlined.
The broader point here is a reiteration of an earlier point: Great British Energy will not have special powers compared with any other company. It is therefore important to recognise that if Great British Energy is delivering projects in Scotland, it will have to conform to Scottish planning and all the other regulations and consenting regimes in Scotland exactly as any other company operating in Scotland would. It will not have additional powers to supersede any of the regulations set by the Scottish Parliament. That is important because, clearly, although the funding will come from the UK Government through Great British Energy, the delivery of those projects, if in Scotland, will largely be the responsibility of the Scottish Parliament through the environmental planning and consenting regimes. Great British Energy will not have additional powers to supersede any of those regulations.
Michael Shanks
I agree with the broad arc of what the right hon. Gentleman has just said, but there is no mechanism for Great British Energy to impose anything on the Scottish Parliament. The whole point I was making is that it is important to recognise that Great British Energy has to operate within whatever framework any Scottish Government set for it.
Stephen Flynn
Forgive me, Sir Roger; I think the Minister and I were in agreement there. The point I was making was that a future Secretary of State may seek to change the framework of GB Energy, and that would cause me concern in that regard. However, as it stands, I am content with the Minister’s comments and will not seek to press the amendment to a vote. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Great British Energy Bill (Third sitting)
Michael Shanks ExcerptsThursday 10th October 2024
(1 year, 4 months ago)
Public Bill CommitteesRead Full debate Great British Energy Act 2025 View all Great British Energy Act 2025 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 10 October 2024 - (10 Oct 2024)
The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Michael Shanks)
Good morning, everyone. It is a pleasure to be back in Committee. I will begin by addressing amendment 8, tabled by the hon. Member for South Cambridgeshire, before moving on to why clause 1 should stand part of the Bill.
The amendment seeks to specify the time within which Great British Energy will set out its priorities. For reasons I shall set out, we will not support it. First, though, it is important to say that the Government have already moved at pace on a range of energy-related matters, but particularly on Great British Energy. We have shown very quickly, in not quite yet 100 days in office, that we are moving forward to set up Great British Energy, and there will be no further delays in doing so. It is in our interests—indeed, as the hon. Member rightly said, it is in all our interests—that we move quickly on setting it up.
We have said clearly that we want Great British Energy to deliver a publicly owned, operationally independent energy company, and we are here today, within 100 days of Labour forming a Government, to make that happen. That work will continue. With the progress we have already made, and with a commitment that we want to quickly get Great British Energy delivering what we are setting it up to deliver—it is not at all in our interests to drag our feet—there is really no need for a specific timeline. I therefore hope that the hon. Member will not press her amendment to a vote.
Clause 1 allows the Secretary of State to designate a company as Great British Energy. Legislation often provides for a company that is set up under the Companies Act 2006 to be designated for certain statutory purposes, especially when substantial amounts of public money are involved, or where the company is being asked to fulfil a particularly important role. A recent example from the previous Government is the legislation on the UK Infrastructure Bank, which includes a similar provision.
Clause 1 simply sets out in detail the processes and arrangements to allow the Secretary of State to designate a company as Great British Energy. Perhaps most importantly, the clause allows Great British Energy to be founded as a publicly owned company, which gets to the heart of what this Government are committed to doing: giving the public a stake in Great British Energy. The clause protects the principle of public ownership by making explicit that the company would terminate if it ceased to be wholly owned by the Crown. I therefore commend clause 1 to the Committee.
Stephen Flynn (Aberdeen South) (SNP)
I rise to speak briefly to new clause 1, which is grouped with amendment 8 and clause 1. It is very straightforward. It will be for Government Members to consider whether it is appropriate for the House of Commons to be in full knowledge and understanding of what the Government seek to do on energy efficiency. They must also consider whether the steps that the Government take in that regard should be reported to this House to ensure that we are fully abreast of the progress that the Government hope to make and how that meets the promises that they as individuals made to their constituents prior to the election. We as parliamentarians can collectively hold the Government to account on those promises and ambitions.
In discussions on further amendments, we will talk in more detail about the promises that were made, and hopefully the Government might be minded to agree to include some of those promises in the Bill. For now, though, I think it worth while for Members to consider the role that this Parliament plays in scrutinising this Government in a constructive fashion.
Pippa Heylings
No one can deny that, as the Minister said, we have seen huge progress coming through immediately, and commitment from the Government. I thought we would have heard from the oral evidence that certainty is critical, and therefore that giving a deadline and a timeframe in which people and businesses could expect to see the statement would be good reassurance. As the right hon. Member for Aberdeen South indicated, it would also be good to have some kind of revision. I hear from the Minister that the Government will not accept the amendment, so I will not press it to a vote, but it should be considered.
Michael Shanks
On the hon. Lady’s point, I reiterate our absolute commitment to move faster—frankly, far faster than in six months—to deliver the statement of strategic priorities. We will talk about that later in relation to further amendments.
On the point from the right hon. Member for Aberdeen South, we do not think the theme of the new clause is particularly important in this part of the Bill. It is important, of course, that the aim of Great British Energy is to be part of what will deliver cheaper bills for all, and efficiency, but it is only part of the story. Of course, in the election campaign we made it clear that across Government—yes, through Great British Energy, but also through a series of other measures, including our reforms to planning and including a lot of areas on which I am working closely with his colleagues in the Scottish Government to expedite progress—we will deliver cheaper bills.
The right hon. Gentleman must acknowledge, despite his not supporting Great British Energy so far—I hope that he and his colleagues will change their minds when the Bill comes back—that on this point it is in fact an important vehicle. [Interruption.] He looks as if he does not agree with what I said. He did not vote for the Bill on Second Reading, so I took it from that that he did not support it. It is important that he recognises that Great British Energy has a really important part to play in delivering what I have set out. His colleagues in the Scottish Government certainly think so, which is why we have been working so closely together on the matter.
Stephen Flynn
I am sure that the Minister, as an esteemed and well-versed parliamentarian, will understand that the voting system in this House means that should a Member choose not to vote in favour of something, that does not mean that they are against it, as he is outlining. I would hate for him to inadvertently suggest to the public that something is the case when it is not the case. As he knows, I of course welcome the set-up of GB Energy, but what I want to see is the scrutiny that the new clause would obviously provide.
Michael Shanks
I am delighted to hear the right hon. Gentleman’s wholehearted support for Great British Energy. That is fantastic. I did not know that, so that is wonderful, and I thank him for that great support. It has really cheered my whole day, in fact, that I now have his support. Things can only get better, as we say.
On the right hon. Gentleman’s specific point about efficiency measures, we are already taking a number of steps on that matter in other areas. For example, our warm homes plan will transform homes across the country, making energy in individual homes cleaner and cheaper to run. We announced a local grants programme to support that. Of course, that does not apply in Scotland, where such work is devolved. I think the Scottish Government could probably do more in this policy area. The Scottish Government have made significant budget cuts to projects—£133 million was taken out of energy efficiency measures in 2022 and 2023—so I think work could be done across the board on the matter.
On the point about updating Parliament, it is really important that we are talking about a publicly owned energy company. It will be independent of Government, but of course it will be responsible to Parliament in the way that any other independent companies wholly owned by the Secretary of State are. A copy of the strategic priorities will be laid before Parliament. Any directions given to Great British Energy by the Secretary of State will be laid before Parliament. Of course, there are already several other mechanisms that the right hon. Member for Aberdeen South, as an extremely well-versed parliamentarian—far more so than I am—knows he can avail himself of.
Andrew Bowie (West Aberdeenshire and Kincardine) (Con)
In respect of the point that the Minister has just made, and also the point that he made to the hon. Member for South Cambridgeshire, who represents the Liberal Democrats, he said that the strategic priorities would be laid before Parliament. Does he have a timescale for that? He said it would be far quicker than six months, so are we talking about before Christmas? Are we talking about before the November recess? Does he have in mind a date when the strategic priorities may be laid before Parliament?
Michael Shanks
If the hon. Gentleman is proposing that the Bill will be through Parliament by Christmas, that would be great—we could move forward. Of course, we need the Bill to have Royal Assent before we can move forward. I welcome his co-operation on making sure that it has a swift passage through the House of Lords and the Commons. We will move as quickly as possible. It is in no one’s interest, let alone that of a Government who are moving as quickly as possible to deliver this, for it to be delayed any further.
Finally, the requirement in new clause 1, tabled by the right hon. Member for Aberdeen South, to report to Parliament on energy efficiency measures is unnecessary because there are already many mechanisms for that. We have been consistently clear that Great British Energy will be operationally independent. I hope that the right hon. Gentleman will therefore not press his new clause to a vote.
Pippa Heylings
I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 1 ordered to stand part of the Bill.
Clause 2
Crown status
Question proposed, That the clause stand part of the Bill.
Michael Shanks
We are making great progress—this will be a good day. Clause 2 is straightforward. It ensures that Great British Energy will serve the public as an independent company and operate in the same way as any other UK company, that it will not have any special status, immunity or privilege normally associated with the Crown, and that its property will not be seen as property of the Crown. It will be subject to exactly the same legal requirements as all other companies. That is in line with the vision we had for Great British Energy from the beginning: that it should be operationally independent and an agile market player. We will ensure that it remains that way.
Question put and agreed to.
Clause 2 accordingly ordered to stand part of the Bill.
Clause 3
Objects
Pippa Heylings
I beg to move amendment 2, in clause 3, page 2, line 18, at end insert—
“(e) measures to increase low carbon and renewable energy schemes owned, or part owned, by community organisations.”
This amendment includes community energy schemes in the objects that the Great British Energy company will be restricted to facilitating, encouraging and participating in.
Michael Shanks
Amendments 2 and 9 seek to add provisions on community energy to the Bill. As I have said in a number of answers in Parliament and in our session on Tuesday, support for community energy is something that I absolutely share, and it is clearly shared by a number of hon. Members across the House. It will be an integral part not just of Great British Energy, but of the Government’s entire energy strategy. That is why the local power plan is a key part of Great British Energy’s delivery model, and it goes broader than GB Energy, to every other part of Government policy on energy.
As my hon. Friend the Member for Na h-Eileanan an Iar pointed out, it is essential that communities are involved. It is not a nice-to-have; it is critical. If we are to build the infrastructure we will need in future, we want communities across the country to reap the rewards. A key part of that is community-driven projects and community-owned projects.
Andrew Bowie
Last year, almost to the day, we launched the £10 million fund for community energy projects, building on the success of previous community funds, to be delivered through local energy hubs. How does the Minister envisage Great British Energy working with those local hubs to deliver those community projects that we announced funding for last year?
Michael Shanks
That is a really helpful point. The community energy hubs that already exist are certainly something that we want to build on. The £10 million commitment is welcome. We have committed more than £1 billion to the local power plan over this Parliament, but we are building on what is already there, such as the local hubs. In Scotland, there is the community and renewable energy scheme, where we are already working with the Scottish Government to look at how we can jointly fund the project. It is really important that we work to build on what is already there.
The Government will not be supporting amendments 2 or 9 today. Amendment 2 seeks to insert an additional object to clause 3 specifically about community energy. As a few hon. Members have said, the purpose of the Bill is to set up the confines of Great British Energy as a company in as little detail as possible. We are not seeking to fill the Bill with every possible mechanism the company could use or every possible priority it could have. We are clear that we are setting up the minimum necessary provisions for Great British Energy to function.
My hon. Friend the Member for Whitehaven and Workington made the really important point earlier that we are not seeking to set in train, for however long GB Energy will deliver projects, our objectives right now, in 2024. We want to give it the most minimal possible scope, so that it can go forward in an agile way and move into areas that, at the moment, we may not think are critical. Community energy will change over time—it already has changed with regard to the models we are using.
There is nothing in the Bill that excludes communities at all. The production, distribution, storage and supply of clean energy extends to large-scale offshore programmes, but I do not think we should discount communities’ involvement in those. There are some really good models around the world. In Denmark, 20% is now expected for community ownership, so there are models of large-scale projects as well, although as the hon. Member for South Cambridgeshire rightly said, much smaller-scale generation projects that directly benefit local communities should sit alongside that.
Amendment 9 would require the Secretary of State to specifically set, as a strategic priority, measures to ensure that local communities benefit from low and renewable energy projects operating in their area. As we will discuss later, the Secretary of State will outline Great British Energy’s strategic priorities to ensure that it remains aligned with Government policy on energy more generally. The first statement, which we will make as soon as possible after Royal Assent—before Christmas, as was said earlier—will focus on driving clean energy deployment, creating jobs, boosting our energy independence and, crucially, generating benefits for UK taxpayers.
We have been clear that that process—I will say more about this later—will include consultation with Ministers in the devolved Administrations. We are already working on community energy with the devolved Administrations in Wales and Scotland, in particular, which are doing great work on it.
Clause 3 sets out the parameters for Great British Energy to carry out the five key functions that we outlined in the plan for it, one of which is to deliver the Government’s local power plan. We are very clear that Great British Energy’s role in delivering the local power plan will be to support and champion local community groups. In my evidence on Tuesday, I built on the comments of a number of our witnesses and said that there are two strands to our proposal. GB Energy will provide some of the funding, but it will also have a critical role where communities can access funding but lack capacity. I am thinking in particular about rural communities and local authorities across the country that previously had in-house energy expertise but are no longer in a position to lead on some of these projects.
There are great municipal schemes across Europe, and we would like to see some of them in this country. That will require GB Energy to provide funding and, crucially, capacity building.
Torcuil Crichton
I am pleased to hear that the Minister has such enthusiasm for municipal and community schemes. There are examples in my constituency of communities that have come together. There are three community-owned estates on the west side of Lewis with a plan for nine turbines generating 43 MW. That could bring in £4 million into that community, but it needs need pump-priming and help to get it there. Similarly, onshore windfarm schemes have been proposed and are in planning, with the offer for municipal and arm’s length companies of local authorities to take shares of up to 20%, as the Minister said. That is the kind of thing that GB Energy could do if we just get through this Bill.
Michael Shanks
I take my hon. Friend’s point in the spirit in which it was intended and not as an attempt to rush me through the rest of these proceedings so we can get the Bill up and running, but we will move at pace. Every time he speaks, he is very good at reminding me that I need to visit those projects in Lewis with him at some point. He is absolutely right that it is important that we give communities, in whatever form—local government, local island communities, villages or towns —the ability to come together with the capacity to deliver on their energy potential.
I fundamentally believe that the Bill is at the heart of what the Government desire to do on the local power plan and community ownership more generally. We are absolutely committed to community energy, including through things such as what the Co-operative party has put forward. There is nothing in the Bill that prevents that from happening. For those reasons, I hope that the hon. Member for South Cambridgeshire will withdraw her amendment.
Pippa Heylings
It is wonderful to hear hon. Members say how supportive they are of community energy and give examples from their local areas. In Cambridgeshire, the expertise is still there—it is absolutely amazing. We have community energy projects, including wind energy, and a whole village has an off-grid heat network, which is a national case in point.
I ask the Minister once again to take into account the cross-party support for the amendment. It is not a bauble, nor is it about crossing t’s and dotting i’s; it is about public ownership models. At the moment there is real concern, because although we talk about the great things happening, in the latest meetings we have held with advocates of community energy, we have been told that it is in crisis. Although GB Energy is removing the barriers to large-scale clean energy projects, there are barriers to community energy, which is why we have so few new community energy projects, in contrast to the past. We need investment, but it is not just about the money and capacity. It is about the rights—the ownership model and the right not only to generate but to sell locally, with an equal cost to connect.
Perran Moon
I am absolutely delighted that the Government are already talking about the warm homes plan. We have a plan, and it is coming through; we have talked about it coming through in spring. Today we are talking about the Great British Energy Bill, and it is really important that we retain the focus on ensuring that the Bill has flexibility, so that we can see the strategic priorities delivering on GB Energy specifically.
Michael Shanks
The hon. Member for South Cambridgeshire has rightly and passionately outlined the scandal of people living in cold homes and poorly insulated homes. She is right that it is an absolute scandal.
Stephen Flynn
The Minister is being generous with his time, as always. It is a scandal that people are in cold homes. Why is he supportive of the Government taking away the winter fuel allowance?
Michael Shanks
It is not within the scope of the Bill, but I am happy to answer the question. Whether or not there is a winter fuel payment, people are still living in homes that are poorly insulated, including in Scotland where the right hon. Gentleman’s colleagues have cut consistently, year after year, the budget that delivered insulation programmes in Scotland.
Michael Shanks
They cut more than £100 million last year to plug gaps in their own budget. If we are looking at energy efficiency, the right hon. Gentleman could look closer to home at what his own Government in Scotland are doing.
To return to the Bill, I want to address both paragraphs in the Liberal Democrats’ amendment 10. First, the new object proposed in paragraph (e) would mean that Great British Energy’s objects included facilitating and participating in emergency home insulation programmes. Several of my hon. Friends have pointed out that although those programmes are incredibly important—I will come in a moment on to what the UK Government are already doing on the issue—it is important to detach the Bill from every other part of our energy policy. Although I totally understand the perspective that says, “These issues are important. Let’s put them on the face of a Bill to say so,” it is really important to say that the Bill itself does matter. This is about setting up and delivering the Great British Energy company. It is not the answer to every single part of the energy system. There are places where we are already moving forward on home insulation programmes, such as the warm homes fund, and it would be more appropriate to talk about those matters in that connection.
That is not to downplay the importance of the issue. As a Government, we are committed to taking bold action. Within the first 100 days, my colleague the Minister for Energy Consumers, my hon. Friend the Member for Peckham (Miatta Fahnbulleh), has outlined the work that we will do on this. The warm homes plan that we have announced is the most ambitious such plan ever. It will be implemented from the spring, delivering cleaner, cheaper energy in the process and ensuring that people, particularly in those low-income households where fuel costs already account for a disproportionate amount of income, can spend less money on them because their home is insulated and warm. That is a right that everyone should have.
Harriet Cross (Gordon and Buchan) (Con)
Does the Minister appreciate that although in the run-up to the election it was assumed, or said, quite often that GB Energy would save households £300, that figure seems now to have been dropped? Is this not a mechanism to ensure that low-income households see some benefit from the Bill? They will not necessarily take the Government’s word for it that it may come later, when we have already seen announcements such as the figure of £300 being dropped.
Michael Shanks
We have not dropped any announcement on reducing bills, but GB Energy was not going to be the single thing that would deliver that; it was the Government’s whole energy strategy. It is important to say that. I said in my evidence to the Committee on Tuesday that GB Energy is an important part of delivering that, but it is not a silver bullet. It will not be the thing that deals with every single aspect of our energy policy. It is also about what we are doing, for example, around increasing the renewables auction to get more cheaper energy on to the grid. It is about what we are doing around planning, consenting and connections. All that work is related to bringing down bills in the long term.
The Conservative party—the party that was in government when all our constituents suffered some of the highest price spikes that we have ever experienced—has to recognise, as it did for many years until it moved away from this policy, that the only way to reduce our dependence on the volatile markets that have led to increases in bills is to move towards greener, cheaper energy in the long term. That is what GB Energy is about delivering, that is what will bring down bills in the long term, and that is what we continue to deliver through this Bill.
I turn to paragraph (f) of amendment 10, which I am afraid we cannot support today, partly because it says what is already in the Bill on expanding renewable energy and technology. The Bill itself facilitates exactly those points and defines clean energy as
“energy produced from sources other than fossil fuels.”
That existing object already enables Great British Energy to drive the deployment of clean energy, helping to boost our energy independence, create jobs and ensure that communities reap the benefit of home-grown energy. Therefore, as a whole, amendment 10 is unnecessary, as the Bill already enables all of those points in clause 3.
The words of the hon. Member for South Cambridgeshire are heartfelt and have been genuinely heard; I hope she gets that sense from all my hon. Friends and me. Such initiatives are an important part, not of GB Energy in itself, but of the whole Government’s mission to make communities in their households much safer from the lack of insulation and cold homes from which they are suffering at the moment. For those reasons, we will not support the amendment, and I hope that the hon. Lady will not press it.
Pippa Heylings
I thank all hon. Members for their serious consideration of the amendment. The hon. Member for Sheffield Hallam said that it was important to consider the role that energy efficiency plays within overall demand. I agree that it is part of the wider policy, but I think it is also critical in the context of GB Energy, because there is room for interpretation of clause 3(2)(c), which is about energy efficiency, as in energy efficiency in the process of generating energy.
Michael Shanks
In summary, clause 3 is about restricting Great British Energy’s activities to those specifically listed in the Bill, around “facilitating, encouraging and participating” in clean energy projects, reducing greenhouse gas emissions, improving energy efficiency, and ensuring energy security in the long term. Clause 3 thus provides the framework for Great British Energy to carry out the five functions outlined in its founding statement.
I turn to the objects set out in clause 3. Clause 3(2)(a) will enable Great British Energy to facilitate, encourage and participate in clean energy projects. Clean energy is defined in the Bill as
“energy produced from sources other than fossil fuels”.
The object will enable Great British Energy to drive the deployment of clean energy, helping to boost our energy independence.
Clause 3(2)(b) will enable Great British Energy to facilitate, encourage or participate in projects that would contribute to the reduction of greenhouse gases from energy produced from fossil fuels. Building on some of the evidence we heard on Tuesday, I want to be very clear that that includes, for example, projects relating to carbon capture and storage, or blue hydrogen.
Clause 3(2)(c) will enable Great British Energy to deliver measures to improve energy efficiency. That could include, for example, supporting demand reduction through the local power plant.
Clause 3(2)(d) will enable Great British Energy to respond to any future energy crisis, and deliver measures to support the long-term security of supply. Great British Energy is part of a bold, long-term strategy to harness our nation’s clean energy potential, and ensure that we reduce our exposure to the volatile fossil fuel markets.
Through those objects, clause 3 provides the framework from which Great British Energy can carry out its five functions. Although the five functions are set out in the founding statement rather than in the Bill, it would be helpful to refer to them in the context of clause 3. First, Great British Energy will invest in and own energy projects. Secondly, Great British Energy will lead projects through their early development stages, to speed up delivery while capturing value for the British people. Thirdly, Great British Energy will deliver our local power plan, working with local authorities, combined authorities and communities to deliver the biggest expansion of community owned energy in British history. Fourthly, Great British Energy will work with industry to develop supply chains across the UK to boost energy independence, but also, crucially, to create good, well-paid, trade unionised jobs.
Andrew Bowie
On the point about supply chains, the sustainable industry rewards were being designed to come with the next auction round next year. How will GB Energy work alongside the existing frameworks to deliver those sustainable industry rewards, to ensure that we build up the domestic supply chain that everybody across the parties wants?
Michael Shanks
That is an important point. We will announce more about allocation round 7 in due course, and how our industrial work and British jobs will work together to create those supply chains. It is an important point about the broad nature of what we want to do: to give confidence to industry that a pipeline of projects will be coming long into the future—beyond 2030, actually, although that is our initial key target—so that it is worth investing in and building the factories and supply chains in the UK. Great British Energy will be part of that, but it will certainly not be the entirety of it. We are working with the national wealth fund and the UK Infrastructure Bank to deliver more of those projects in the UK.
The final function, which the shadow Minister will appreciate, is that Great British Energy will help advance the work of Great British Nuclear. We will say more in due course about exactly how those two organisations work together. Those five functions enable Great British Energy to deliver on its clear mission of driving forward clean energy deployment, boosting our energy independence, creating good jobs and ensuring that UK taxpayers, bill payers and communities reap the benefits of clean and secure home-grown energy.
Wera Hobhouse
Will the Minister confirm that he said that we might cross-reference the five functions in the Bill? In that way, people will be clear, for example, that community energy is cross-referenced in the Bill as one of the five functions. Did he say that earlier?
Michael Shanks
No, I did not say that. What I was saying was that the context of the objects in the Bill is given by the functions that we set out in the founding statement. It is clear that those founding principles of Great British Energy, which the Secretary of State announced in that founding statement along with the start-up chair, Juergen Maier, will be largely what drives the initial statement of priorities for the company.
The objects themselves are around creating restrictions on what Great British Energy can do. We have left them deliberately broad so that the company is able to move in and out of different spaces. I am not sure whether the hon. Lady was here earlier, but we said clearly that there is nothing in the Bill that precludes community energy at all. I have repeated a number of times our absolute commitment to that and to the local power plan.
We will turn to clause 5 in due course, but it is relevant to the point we are discussing. Great British Energy will, of course, be operationally independent—a model adopted by a number of different companies; it is important for it to have its own board of experts in their fields. However, the Secretary of State will be able to set the company’s strategic priorities, which we will debate later. That is to ensure that although Great British Energy is operationally independent, it is setting out the functions in its founding statement while remaining agile to the Government priorities of the day. Importantly, it is a vehicle for delivering the central points of Government policy, including community energy, energy efficiency and many of the other things we have talked about. I commend the clause to the Committee.
Question put and agreed to.
Clause 3 accordingly ordered to stand part of the Bill.
Clause 4
Financial assistance
Question proposed, That the clause stand part of the Bill.
Michael Shanks
Great British Energy will be operationally independent, with the Secretary of State as the sole shareholder. To operate, Great British Energy clearly needs funding, and clause 4 will give the Secretary of State the power to provide financial assistance to Great British Energy. That is so that GB Energy can take action in line with its statutory objects set out in clause 3, including financing its investments, joint ventures and day-to-day running costs.
To be clear, our intention is that Great British Energy will become financially self-sufficient in the long term. Great British Energy will invest in projects and expect a return on investments, generating revenue and delivering profits that benefit the public. It will also create tens of thousands of good jobs. However, it is 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 groups to raise funds, there could be a case for providing Great British Energy with further financial support for specific projects in the future. The clause will enable that.
I assure the Committee that any further financial assistance to Great British Energy provided by the Secretary of State will of course be subject to the usual governance and control principles applicable to public sector bodies, such as His Majesty’s Treasury’s “Managing Public Money”.
Finally, in the highly unlikely situation of Great British Energy facing financial difficulty, the powers set out in clause 4 would allow the Secretary of State to step in to help prevent any disruption to Great British Energy’s intended interventions. I commend the clause to the Committee.
Andrew Bowie
I am comforted that the Minister thinks it very unlikely that GB Energy will get into any financial difficulty. But let us look at state-owned energy companies around the world. Just last year, for example, EDF—a fantastic company investing a lot into the United Kingdom—had to be bailed out to the tune of about €20 billion. Although I am comforted by his assurance, I think we would like to see a little more evidence for that assertion before moving forward.
The Minister says that any financial assistance will be governed by the usual processes of being accountable to Parliament, and that the Secretary of State would be, should that be the case, but clause 4(3) states:
“Financial assistance under this section may be provided subject to any conditions the Secretary of State considers appropriate.”
Should it not be conditions that Parliament considers appropriate? Will the Minister expand more on what those conditions might be?
Michael Shanks
I am always willing to give the hon. Gentleman comfort, in this and many other things. On both those points, the Bill quite rightly says that it is subject to any particular requirements of the Secretary of State. That is about saying that, instead of giving money to a company without any requirements, requirements will of course be put on what that funding is for—a fairly standard thing that I think we would expect.
On the broader point about parliamentary scrutiny, there are of course a number of mechanisms through which Parliament can bring scrutiny to these decisions. As I have already said, it will be outlined that any additional funding that should be given to GB Energy in the future will be in the course of the normal processes of any financial transactions that the Government undertake.
I think this is important, though: the hon. Gentleman has used the EDF example on a number of occasions, but he does not often reference the other side of the equation —hugely successful state-owned companies around the world. The truth, in all this Bill, is that for the first time in more than 70 years we are delivering a publicly owned energy company in this country, in the same vision as many of the publicly owned energy companies that are hugely successful around the world and delivering huge returns to their taxpayers every single year.
We are starting off GB Energy on a much smaller scale —of course we are—but, in time, we see it as a vehicle for delivering some of the huge successes that those companies have, and delivering a huge return to the public. We believe that public ownership of infrastructure is a good thing, and we hope that we can convince hon. Members across the House that this is the right thing to take forward.
Question put, That the clause stand part of the Bill.
Michael Shanks
I am very happy to. The right hon. Member talks about promises in an election campaign. He may distance himself from some of the promises that his Holyrood colleagues make—at least at the moment, until he makes his move—but it is important to say that, time and again, his own party made promises in its 17 years in power. We have committed to lowering bills, and as I will outline in a minute, we will continue to commit to that. GB Energy is the vehicle for doing that. I am delighted that he has pledged support for it today. That, along with all the Government’s policies, is how we will reduce bills in the long term.
Perhaps the right hon. Member should take a bit of a lesson from us about promises in election campaigns and how to win them, which is not to promise to set up a publicly owned energy company in Scotland and still not have done so 15 years after it was announced. We are doing it now within 100 days.
Stephen Flynn
I admire the Minister’s attempt to compare GB Energy, as supposedly a producer and generator of energy, with an organisation that could have sold electricity—
Stephen Flynn
Of course it did not do anything, because the capital was not there to do that. If it had existed under the price shock that the Tories brought in for all of us, it would not have been able to function, in the same way that so many others in the private sector were not able to function. The Minister is trying to equate two things that are not comparable. When he rises to his feet, as he seems very keen to, perhaps he will confirm, first, when bills will fall by £300, and secondly—as he failed to do the other day—when they will come down at all.
Before the Minister interrupted so pleasantly, I was pointing out to Government Members that the Conservatives made promises on energy that they failed to deliver. The public have high expectations—so get on and deliver.
Michael Shanks
We will not support the amendments tabled by the shadow Minister or that of the right hon. Member for Aberdeen South, but it is important to say why. As several of my hon. Friends have made clear, putting specific figures into a Bill is not what any Parliament does, but it is important to set out the objects, purpose and vision of GB Energy, as it will play a crucial role in bringing down bills in the long term and preventing the price spikes that we and our constituents still face.
Michael Shanks
For the reasons I have already outlined, that is implicit in the policy; it is why we are doing it. I think the shadow Minister agreed in response to one of my hon. Friends that this is a useful approach to reducing bills, and the push towards green energy is important.
Michael Shanks
The shadow Minister nods in support. I look forward to his support for the Bill as a vehicle for delivering it.
Michael Shanks
He stops short of that.
The shadow Minister spoke earlier about the rising bills caused by Putin’s invasion of Ukraine, as if somehow the UK had no vulnerabilities that particularly exposed us to that invasion. Of course it was an external factor, but it led to huge price spikes in this country, and we are still exposed to volatile fossil fuel markets. We are determined to push towards energy security through cleaner green energy. That is moving at pace—our recent renewables auction was the biggest we have ever had, with 131 projects—and Great British Energy will drive that forward.
Harriet Cross
We have already discussed the financial assistance in the Bill. It is therefore anticipated that there may be financial strain. Given that the objects in the Bill do not include reducing bills, what guarantee is there that reducing bills will be a priority if and when finances become tight?
Michael Shanks
On the financial point, the Bill is an enabling mechanism, like a number of other pieces of legislation, including the UK Infrastructure Bank Act 2023, which the hon. Lady’s party introduced in government to allow the Secretary of State to give additional funding to companies. We said throughout the election that we would reduce energy bills, and we stand by that, but we cannot flick a switch. The idea that some Members have put forward that somehow, after 14 years of chaos from the Conservative party, a Government can come in and, within 100 days, turn everything around overnight is simply and deliberately disingenuous. Conservative Members take no responsibility for the actions of the previous Government.
We are putting in place as quickly as possible the basis for delivering energy security in the long term and removing volatility from our energy market, so that we can deliver cheaper bills for everyone in the long term. We made no pledge during the election that we would do it in 100 days, a year or two years, because we know fine well that that commitment will take time. But it is the right journey for us to be on, and it is right that we have started by building the energy resilience we need in the system.
Stephen Flynn
I do not think that my Commons colleagues and I would suggest that the Government should have reduced energy bills within 100 days, but, my goodness, they have just gone up by 10%. The Minister says that it will not happen within a year or two years, so I would be keen, as would the public, to know broadly when he expects energy bills to come down. I do not say that from an angry position; I want the public to have a bit of clarity about his objectives.
Michael Shanks
It is an important point, and I take it in the spirit in which the right hon. Gentleman says he intends it, but nobody is in a position to say what will happen to bills on a particular date. They will start to come down as our exposure to more expensive forms of energy is reduced, but the price cap has already increased because we continue to be exposed to those international markets, and there are actions taken by the previous Government that will continue as we move into the winter. We are doing everything we can to turn that around as quickly as possible.
The right hon. Gentleman knows as well as anyone that at the next election we will absolutely be judged on this and on a whole series of commitments that we have made, as any party is judged on its commitments in elections. We stand by that. We are doing everything we possibly can to deliver the change that is necessary. It will bring down bills in the long term. It will be difficult— I am not suggesting that it will not—but it is a commitment that we have made and it is one that we will work towards.
Harriet Cross
Just for clarity, will the other changes that Labour is bringing in, such as ending North sea licences, increasing and extending the windfall tax and ending investment allowances, make us more or less secure in the meantime, before GB Energy is set up? Will they expose us more or less to the international market?
Michael Shanks
We are moving slightly off the Bill, but that is an important point; we have spoken about it before, and I am very happy to keep speaking about it. The difference is that, whether gas comes from the North sea or from international markets, it is traded on an international market. We pay the price whether it comes from the North sea or not. That is why the price spikes have been so important.
Michael Shanks
I fully suspect that in my time as Energy Minister, I will come back to the hon. Lady’s question. It is an important one, and I am very happy to discuss it.
Turning back to the amendments, we have been very clear that the creation of Great British Energy is about helping us to harness clean energy and reduce our reliance on volatile fossil fuels. But it is important—with the patience of the Chair—to outline the other things that we are doing, more broadly than Great British Energy and the Bill. It is important that Labour’s reforms dovetail with what Great British Energy is doing, particularly the review of market arrangements started by the previous Government. We will conclude that work.
We will continue to deliver the warm home discount, which provides a £150 annual rebate off energy bills for eligible low-income households. We are also looking at the burden placed on bills by standing charges, which still make up too much of so many people’s bills; the Minister for Energy Consumers, my hon. Friend the Member for Peckham, is looking at that now. We are working with Ofgem to look at how we can reduce that.
There is a series of measures that are all important and that all work towards the same goal. GB Energy is one of those, and it is important that we implement it as quickly as possible so that we can move forward with increasing our capacity for cheaper energy and reduce bills in the long term. For that reason, the amendments are not necessary.
Andrew Bowie
The Minister has our full support on the broad approach that he is taking on market frameworks, standing charges and working with Ofgem, given that we started that work when we were in government. However, a commitment to work towards reducing consumer bills, and specifically the £300 reduction that the Labour party promised during the election would result from the creation of Great British Energy, should be in the Bill. That is why our amendment is essential. I will press it to a vote.
Question put, That the amendment be made.
Long-duration Electricity Storage Consultation: Government Response
Michael Shanks Excerpts(1 year, 4 months ago)
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The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Michael Shanks)
This Government are committed to making Britain a clean energy superpower. I am announcing a further important step in enabling this mission: a decision to introduce a cap and floor regime to support investment in the next generation of long-duration electricity storage assets.
Our national mission to achieve clean power by 2030 and accelerate to net zero will require the capability to store energy when it is abundant to be used when supply is scarce. LDES technologies, which include pumped storage hydropower as well as new, innovative solutions like liquid air energy storage, are designed to store large quantities of excess electricity, such as that generated by solar and wind during periods of high output, and then supply it back to the grid over periods of several hours or days when it is most needed.
Low carbon long-duration flexibility technologies such as LDES will be pivotal in meeting and maintaining our clean power needs as electricity demand grows. LDES will also diversify our technology mix, giving us greater resilience. And by using renewable energy that can be stored, LDES can help the UK move towards energy independence. Analysis commissioned by Government found that in the central scenario, 20 GW of LDES resulted in electricity system savings of £24 billion by 2050. This represents a saving to consumers of 3.5% of the total system costs.
However, despite the clear benefits of LDES and the potential for significant expansion, it has been almost 40 years since any meaningful new sites were commissioned. This is partly due to uncertainty faced by investors in committing to these complex, long-term projects that have high upfront costs despite having low operating costs. In January 2024, under the previous Government, a consultation was published exploring the introduction of an LDES cap and floor investment mechanism. Today I am announcing the publication of the Government response to this consultation, in which we set out our decision to introduce a cap and floor investment mechanism.
A cap and floor mechanism is an established way to provide investor confidence and enable investment decisions to be made by project developers. It does this by providing revenue protection—via the revenue floor which is set at a low level—while offering benefits to consumers in return by regulating revenue via the revenue cap. A similar approach has been used successfully to deliver several critical electricity interconnector projects—cables that allow us to trade electricity with overseas markets—without a revenue floor ever being triggered. We are also announcing that Ofgem has agreed to expand its role in regulating LDES assets, by becoming the investment framework delivery body for LDES, building on its existing role and expertise in already delivering the cap and floor mechanism for electricity interconnection projects.
I would like to thank stakeholders who have taken the time to respond to the previous consultation. My officials will continue working at pace alongside Ofgem to facilitate Ofgem implementing the investment framework as soon as possible. Following this response, we expect the publication of a technical decision document this winter, along with documents by Ofgem as the LDES regulator and investment framework delivery body. We intend for Ofgem to be able to open the investment support scheme to applications from LDES developers in 2025.
[HCWS119]
Great British Energy Bill (First sitting)
Michael Shanks ExcerptsTuesday 8th October 2024
(1 year, 4 months ago)
Public Bill CommitteesRead Full debate Great British Energy Act 2025 View all Great British Energy Act 2025 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 8 October 2024 - (8 Oct 2024)
Torcuil Crichton (Na h-Eileanan an Iar) (Lab)
I am also a member of the GMB.
The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Michael Shanks)
I am also a member of the GMB.
The Chair
Welcome to our fourth and final panel this morning. We will now hear oral evidence from Dan McGrail, CEO of RenewableUK, and Adam Berman, who is director of policy at Energy UK. For this session we have until 11.25 am. There are questions at 11.30 am in the Chamber—I have one myself.
The Chair
A few of us have. Okay, if we finish early, we have more time to leg it over there. Please could the witnesses introduce themselves.
Dan McGrail: Good morning everybody, my name is Dan McGrail, I am the chief executive of RenewableUK, which is a trade association representing the wind industry predominantly, but also the tidal energy sector and crucially, the supply chain that sits within that. We have about 500 member companies across the UK and we work closely with devolved Administrations and national Government.
Adam Berman: Good morning. My name is Adam Berman, I am director of policy and advocacy at Energy UK, which represents the whole of the energy sector really, short of upstream oil and gas extraction—everything from all the forms of generation, right through the networks and into household level. We represent the retail energy suppliers as well.
Oral Answers to Questions
Michael Shanks Excerpts(1 year, 4 months ago)
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David Pinto-Duschinsky (Hendon) (Lab)
The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Michael Shanks)
The energy shocks of recent years have laid bare the exposure of our energy system to the international fossil fuel market. That is why we have started a mission to reach clean power by 2030, to end that reliance and ensure that the British people never again go through the sort of cost of living crisis that they have faced in recent years under the Conservatives.
David Pinto-Duschinsky
People across Hendon have paid the price for the previous Government’s failure over the last 14 years to invest in our energy system. Does the Minister agree that the only way to get us off the rollercoaster of high bills is to invest at pace and scale, as the Government are doing through our clean energy mission?
Michael Shanks
I completely agree. The only way to permanently protect hard-working families and businesses from the high energy bills from which many are still suffering is to get ourselves off our reliance on the volatile fossil fuel markets. That is why we are rolling out at pace and at scale the clean power necessary to do so, which not only gives us energy security but creates good jobs, brings down bills and helps us to tackle the climate crisis.
Lee Anderson (Ashfield) (Reform)
The Secretary of State will be aware that 25% of the UK is situated on top of coalmines, which can provide geothermal energy to heat houses and businesses in places like Ashfield. Will the Minister meet me to discuss how we can make that work in coalfield communities?
Michael Shanks
I very much welcome the hon. Gentleman’s question—which I must say is somewhat of a surprise. I will absolutely meet him to discuss that. We have been clear that any technologies can be part of the solution and, if that can be part of the picture, I will meet him to discuss the options and the technology more generally.
Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)
One of the ways in which we can increase energy security is through community-owned and co-operative energy schemes. They give greater control to local people, who get a say in where profits go, and crucially they build resilience from international energy markets. Will the Minister say a bit more about where community-owned energy will fit into the energy security plan?
Michael Shanks
I thank my hon. Friend for that incredibly important question. Community energy has so many benefits in our energy mix, including giving communities a stake in our energy future. We also know that there are many social and economic benefits that come from that. We are committed to our local power plan, which will deliver investment in community-owned projects. Great British Energy will have a key role to play in supporting communities, capacity building and in that initial funding to help them deliver these projects.
Sir Bernard Jenkin (Harwich and North Essex) (Con)
Could I invite the Minister to meet a cross-party group of MPs from the east of England to discuss how the review conducted by the electricity system operator can contribute to energy security and in particular to look at how undergrounding high voltage direct current cables could be cheaper in the long term than pylons and more efficient for achieving net zero? Will he agree at least to have a meeting with us on that basis?
Michael Shanks
I am always happy to have meetings with any right hon. and hon. Members across the House on a range of issues, so I will take that away. The evidence suggests that undergrounding is five to 10 times more expensive and that actually it can have more of a damaging impact on nature and natural habitats than pylons. The important thing with all of this is that this is nationally important structure, which is necessary for us to get to the targets that we want to get to. I know that the hon. Gentleman takes that seriously, and I will meet him and others, but we have been clear as a Government that we will build this infrastructure if it is necessary.
Tessa Munt (Wells and Mendip Hills) (LD)
The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Michael Shanks)
We are halving the development time for new transmission infrastructure through reforms of planning, supply chains and other areas, delivering the grid capacity that is needed to achieve clean power by 2030 and meet a doubling of electricity demand by 2050.
Tessa Munt
Communities are doing their very best, and lots of people are trying to help each community to power itself. My own village has its community solar project, which was fully funded by local residents. There are non-profit organisations which have dealt with local schemes by putting solar panels on schools with an element of community ownership, and there are individuals who try but are faced with extortionate costs for connection to the grid. The grid was really designed for big old power stations rather than smaller power creators trying to plonk power into the system. What can the Minister do to encourage National Grid to pivot, and help communities and individuals to create their energy nearer to their homes?
Michael Shanks
The hon. Lady is right to draw attention to the importance of community energy projects throughout the country. We want to see many more of them, but we have inherited a grid that needs significant upgrading, and we are now working apace to ensure that that happens. Part of the work that I have been doing with National Grid and others involves trying to identify the next steps that are needed to shorten the connections queue, and also to make it more affordable for smaller community projects to connect. There is an important role for partnership as well, with some of the bigger renewables projects giving part of their connections queues to smaller ones, and that is already happening in some parts of the country. There is no doubt that there is much more to do, but we are, as I have said, working apace to try to move this forward after 14 years of inaction.
Pippa Heylings (South Cambridgeshire) (LD)
As we have heard from my hon. Friend the Member for Wells and Mendip Hills (Tessa Munt), the lack of national grid capacity is holding back the UK’s push towards renewable energy. There are numerous examples of projects that have been delayed because they are waiting to be connected to the national grid, or because connection is too expensive. In my constituency, we cannot even connect the solar panels and batteries for the ambitious plan to decarbonise and electrify the refuse fleet for South Cambridgeshire district council. The projects that have been delayed include the building of new homes, which is crucial at present. Can the Minister explain to us how we are to reach this stage on the scale and at the pace that is needed?
Michael Shanks
The hon. Lady is right to highlight those issues. The connections queue, in particular, is a huge challenge, with more than 700 GW waiting to join it. The last Government did some work to establish how the queue could be prioritised, and we will now implement that, but we need to go further. It is clear that by 2030 we will need to build four times as much new transmission network as has been built since 1990. This is a project to rewire the entire country, to improve the current connections availability, and to work with everyone, including the new national energy systems operator, on the road map towards 2030.
Abtisam Mohamed (Sheffield Central) (Lab)
Michael Shanks
The latest contracts for difference round secured a record 131 renewable electricity projects across Great Britain. This will deliver a total capacity of 9.6 GW, enough to power the equivalent of 11 million homes. The Energy Secretary will continue to work with industry to explore how the contracts for difference scheme, and other energy policies, can be expanded even further.
Abtisam Mohamed
I commend the Secretary of State for his excellent work since he took office in accelerating clean electricity generation in the UK, and I commend the fantastic team he has with him. The Minister is right to say that there is a clean energy imperative if we are to tackle the climate crisis, boost our energy security and reduce our bills. What steps has the Minister taken to ensure that this Government encourage and take advantage of the significant opportunity around community energy, and will he meet me and representatives from my constituency of Sheffield Central to discuss how we can boost the growth of community energy?
Michael Shanks
I thank my hon. Friend for her question. She is absolutely right to say that, in order for us to meet our 2030 ambitions, we will need a whole range of different options. Community energy is a critical part of that, helping to deliver energy security and lower bills. Crucially, it also gives communities a stake in the energy future. That is why one of Great British Energy’s five objectives is to support the delivery of a local power plan, which puts local communities, combined authorities, local authorities and others in the driving seat in restructuring our energy economy. I am happy to meet my hon. Friend and others to discuss this issue further.
Greg Smith (Mid Buckinghamshire) (Con)
Contrary to what one of the Ministers said earlier, the last Government brought about one of the largest revivals in nuclear energy in 70 years in order to provide clean electricity generation, yet we hear precious little from the new Government on their plans for nuclear; we hear only their plans for inefficient technology that will destroy the countryside. Why are they so anti-nuclear, and when are they going to get on with delivering nuclear energy?
Michael Shanks
I will give credit to the Conservative Government on one thing: they were very good at making grand announcements. On delivery, however, they were much poorer. Looking at a whole range of things—carbon capture being a very good example—they had lots of warm words but no delivery whatsoever. On nuclear, they had lots of warm words but no delivery whatsoever. In 14 years, how many nuclear power stations were built under the Conservative party? None. We will get on with doing the work.
Melanie Onn (Great Grimsby and Cleethorpes) (Lab)
If we want to see an increase in clean energy generation, we need more announcements such as the one we saw last week on the development of carbon capture, usage and storage. Although that is incredibly welcome and a sign of determined action from the new Government, there is still more to be done. Perhaps the Minister can give an indication of when he anticipates he will be able to announce progress on track 1 extension, and share some information on track 2, because that would secure thousands of jobs in the Humber region.
Michael Shanks
My hon. Friend is absolutely right to say that in the three and a bit months that we have been in government we have moved at pace to deliver the largest renewables auction in history and to make last week’s announcement on carbon capture. We are working through the next stages of the process at pace, and we will have further announcements in the weeks ahead.
Graham Stuart (Beverley and Holderness) (Con)
Does the Minister agree that it would be better to have the right electricity system in 2032 or 2035 than to have the wrong one because of an artificial target, which may be undeliverable by 2030?
Michael Shanks
I could be wrong, but I think the right hon. Gentleman previously said that his own Government’s plans on onshore wind in England were not the right approach to take. I agree with him, which is why we lifted the onshore wind ban. The reality is that whereas the previous Government used to talk the talk on climate action, we are the ones now delivering—and delivering an energy system fit for the future.
Andrew Bowie (West Aberdeenshire and Kincardine) (Con)
One way to increase clean electricity generation in the United Kingdom would be to invest at pace in new nuclear. We left government with a clear plan to get to 24 GW of nuclear power by 2050. Does that target remain?
Michael Shanks
This is the whole point about the Conservative Government, and it is why we have inherited such an economic mess: they made a series of announcements, with absolutely no funding to back them up. As you would expect, Mr Speaker, I pay close attention to the Conservative party conferences, and the hon. Gentleman made a very astute point, which I am happy to repeat for the benefit of Hansard and the House: “After 14 years of Conservative Government, we are now in a position where it’s more difficult to build critical infrastructure than it was when we came into power”. I could not have put it better myself.
Andrew Bowie
Our record on nuclear speaks for itself. We launched the small modular down-selection process and Great British Nuclear, and invested £200 million in new advanced nuclear fuels. We consulted on a new route to market for advanced modular reactors and new technologies, and granted a development consent order for Sizewell C. There is concern that there is a go-slow in the Government right now, so when can we expect a final investment decision on Sizewell C? Will it still be this year?
Michael Shanks
I was not aware when my right hon. Friend the Secretary of State changed the titles of the ministerial portfolios that we had moved away from having a Minister for consultation, but it seems that all the hon. Gentleman was doing in his time in office was launching consultations. We are going to get on with delivering and we are moving at pace on the whole of the electricity system, including on nuclear, and delivering on the things that he failed to do.
Tracy Gilbert (Edinburgh North and Leith) (Lab)
Danny Beales (Uxbridge and South Ruislip) (Lab)
The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Michael Shanks)
My hon. Friend is absolutely right to say that that issue is holding back projects across the country, which is why we have tackled it from day one. We are attempting to release network capacity, which can then be reallocated to accelerate the connection of viable projects. There is a lot of work to do, and we are building on what the previous Government did to prioritise the queue and to build the necessary infrastructure that should have been built over the past 14 years.
Sir John Whittingdale (Maldon) (Con)
Anna Dixon (Shipley) (Lab)
Michael Shanks
Batteries will play an important part in the short-duration storage required for the energy system we are building for the future. It is a question of balance. Communities will be engaged in the consultation process, and I will be convening a roundtable with providers of battery technology and other short-duration storage in the next few months to learn both from projects that have worked well and from projects on which we could do better in future. I will happily share any information from that with my hon. Friend.
Zöe Franklin (Guildford) (LD)
Clive Jones (Wokingham) (LD)
In my constituency, a new solar farm at Barkham is being delivered that will provide clean energy for more than 4,000 homes and provide a funding boost for Wokingham borough council. It will be connected in 2026, but there were concerns that connection to the grid could be delayed by 11 years. What steps will the Minister take to reduce similar delays, and does he think that the Government can meet their net zero targets if the new renewable energy infrastructure cannot be quickly connected to the grid?
Michael Shanks
I thank the hon. Gentleman for his question. A similar point has been raised by many hon. Members across the House. This issue affects areas right across the country. We are doing what we can at the moment to prioritise the connections queue, so that the most important projects, or those most able to be delivered, can move forward. There is much more that we can do on that, but, fundamentally, we need to build much more network infrastructure in the first place so that we can speed up and reduce the cost of these connections for schemes such as the one he mentions.
Energy Infrastructure Planning Projects
Michael Shanks Excerpts(1 year, 4 months ago)
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The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Michael Shanks)
My noble Friend the Minister of State for Energy Security and Net Zero (Lord Hunt of Kings Heath OBE), made the following statement today:
This statement concerns an application for development consent made under the Planning Act 2008 by Ecotricity (Heck Fen) Ltd for the construction and operation of a solar photovoltaic electricity generating station situated in Lincolnshire.
Under section 107(1) of the Planning Act 2008, the Secretary of State must make a decision on an application within three months of the receipt of the examining authority’s report unless exercising the power under section 107(3) of the Act to set a new deadline. Where a new deadline is set, the Secretary of State must make a statement to Parliament to announce it.
The statutory deadline for the decision on the Heckington Fen solar park application was 27 September 2024.
Ecotricity (Heck Fen) Ltd has requested that the Secretary of State extends the statutory deadline to allow time for further negotiations with landowners and to ensure the necessary permissions can be obtained. I have decided to set a new deadline of no later than 24 January 2025 for deciding this application for these reasons.
The decision to set the new deadline for this application is without prejudice to the decision on whether to grant or refuse development consent.
[HCWS99]
Great British Energy Bill
Michael Shanks ExcerptsThursday 5th September 2024
(1 year, 5 months ago)
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Sir Bernard Jenkin
I do not agree with that, simply because we have seen massive investment in renewables over the past 14 years, as the former Minister, my right hon. Friend the Member for Beverley and Holderness (Graham Stuart), and the shadow Secretary of State, my right hon. Friend the Member for East Surrey (Claire Coutinho), set out. We have been making fantastic progress with bringing renewables on stream, but there are considerable questions to ask. I wish it were as simple as setting up a shell company and saying, “We are going to get the state to do everything”, but I am afraid it is not. As the shadow Secretary of State pointed out, Ørsted and EDF make massive losses, and either the taxpayer has to pay for those losses or those costs go on to electricity bills.
The Secretary of State announced on Tuesday that we have got all this renewable capacity coming on stream—enough to power 11 million homes. That is if we match the maximum capacity of the renewables with the average annual demand of those homes, but of course renewables are intermittent. It seems such an obvious thing to say, but we have to say it: sometimes the sun is shining, sometimes the wind is blowing, and sometimes we have enough water for hydroelectric power, but sometimes not. In the winter months, solar makes very little contribution—it makes no contribution in the dark, at night. [Interruption.] It may seem obvious, and the hon. Member for Stroud (Dr Opher) may laugh, but we need to point these things out, because when the Secretary of State says that renewables are cheaper than fossil fuels, he is comparing the strike price with the cost of buying marginal supply capacity when we need that extra marginal supply.
The strike price will not be reflected in our electricity bills, because we have to add in other things, such as system balancing costs. We have to add in grid infrastructure costs, because renewables require massive investment in grid infrastructure. We have to add in the costs of importing through interconnectors when we do not have enough domestic supply. We have not begun to factor in storage costs—the storage capacity of our electricity system is still miniscule. Members should read the Royal Society paper on creating electricity storage in this country: it is going to be astronomically expensive, and will probably still not be enough. Then there are constraint payments—oh, yes, the constraint payments. This year, we are paying £500 million to renewable producers under the contracts for difference scheme not to produce electricity when they can produce it, because that is how the system works. That is how we have attracted so much investment, but those payments are going to be about £1.5 billion next year.
I would like the Government to produce some forecasts. How much will the balancing costs be in each year over the next 10 or 15 years? How much grid infrastructure investment will need to be funded? That appears on our electricity bills—it is the standing charge, and boy, that charge is going to go up with all the infrastructure investment that we will require. How much will we have to spend on importing electricity? The two interconnectors coming into East Anglia as part of the Norwich to Tilbury programme will be importing electricity. They are not for exporting, because the only security of supply we will have if we have shut down all our combined cycle gas power stations by 2030 is from other places.
The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Michael Shanks)
indicated dissent.
Sir Bernard Jenkin
The Minister shakes his head, but if we have shut down all that capacity—if we cannot generate the electricity ourselves—we will have to get it from other places. There are phenomena called wind droughts, which can go on for very long periods. What are we going to do when the wind turbines are not turning and the sun is not shining during a very cold spell in the middle of winter? We had one or two close scares this winter. The generating margin that we used to enjoy has gone. The great risk of accelerating the decarbonisation of the electricity system is that there will be more appeals for voluntary or compulsory restraint from industry, because industry is the hidden customer that is shut off when we are short of electricity, or we risk more brownouts or even blackouts. That not impossible, so where is the data that the Minister is placing so much confidence in that shows these forecasts to be wrong? I am not making them off my own bat—there are plenty of people out there making them.
That brings me to the final brief point I want to make. I understand the logic that the Minister explained in his letter to me.
The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Michael Shanks)
May I begin by thanking right hon. and hon. Members who have participated in this extremely wide-ranging debate this afternoon? I particularly pay tribute to all Members across the House who made their maiden speech in this debate. Thankfully, the hon. Member for West Aberdeenshire and Kincardine (Andrew Bowie) has already run through all the constituency names, so I do not need to do that again. However, I do want to highlight specifically some of the really emotional contributions that we heard from hon. Members, particularly my hon. Friends the Members for North East Hertfordshire (Chris Hinchliff) and for Stratford and Bow (Uma Kumaran) and the hon. Member for Eastleigh (Liz Jarvis), who spoke so passionately, as many did, about their pride in their communities and the importance of this moment and this decisive decade in tackling irreversible climate change. There will come a point in this Parliament when we will not have debates that are dominated by maiden speeches, and I will really regret that, because every time I sit here I learn a lot more about the country in which we live. I thank all those Members for sharing their communities with us this afternoon.
This has been a thorough and interesting discussion about the principles behind this Bill and the establishment of Great British Energy. The UK faces immense challenges, from energy insecurity and our over-reliance on volatile fossil fuel markets to the cost of living crisis and climate crisis. This Government are determined to address those challenges with clean energy being a key part of the solution.
Other countries have already seized the opportunity of publicly owned energy generation companies, which has left Britain behind. Unlike previous Governments, this Government are committed to the benefits of public ownership in the UK, and we want UK citizens and taxpayers to own parts of our infrastructure, too.
Great British Energy will drive clean energy deployment, boost energy independence and generate benefits for all parts of the United Kingdom. It will deliver for the British people, creating good jobs, delivering profits and demonstrating international leadership.
Michael Shanks
I will carry on just now, because we have a very short time before we finish.
I wish to address the reasoned amendment tabled in the name of the right hon. Member for East Surrey (Claire Coutinho). I shall address many of these points in more detail, but, in short, Great British Energy will produce clean energy, protect bill payers in the long term, and invest in projects that expect a return on investments, generating revenue and delivering for the people of this country in the process. We will manage the transition in the North sea in a way that is prosperous and just and enables our offshore workers to retrain into the industries of the future in a long-term sustainable way. I urge the House to vote against this so-called reasoned amendment tonight.
I turn to some of the specific points that have been raised. I am sorry that I will not be able to get to all of them, because I have very little time. We have already announced a substantial amount of detail on GB Energy beyond this Bill, including publishing its founding statement, announcing the first major partnership with the Crown Estate, confirming that it will be headquartered in Scotland, and appointing Jürgen Maier as the start-up chair. This Bill is the next stage of Great British Energy’s journey, giving it the statutory footing that is needed to deliver on our ambitions. It is drafted to help establish Great British Energy and sets out the necessary legal framework.
GB Energy will be an operationally independent company, just as Great British Nuclear and the UK Infrastructure Bank are. It will be accountable to Parliament, not run by Ministers as some Members have claimed today. It will be overseen by an experienced board, benefiting from industry-leading expertise and experience right across its remit, bringing the most skilled and experienced individuals to the heart of the decisions that it will make.
GB Energy will not be a trading fund, as suggested by the hon. Member for Angus and Perthshire Glens (Dave Doogan). Instead, as I have already said, it will be an operationally independent energy company that owns, manages and operates clean energy projects. I suppose the confusion arises from the fact that the SNP’s commitment to set up a publicly owned energy company has not come to anything at all. I think it has been seven years since it was announced. Only this week, the Scottish Government drew down even more money from the ScotWind inheritance to plug the gaps in their day-to-day spending.
Michael Shanks
We have heard from the hon. Gentleman already.
There were multiple questions in this debate about how Great British Energy will lower bills and when taxpayers will see a difference. That features in the reasoned amendment tabled by the Opposition. Conservative Members want to raise the issue of bills as if they have been nowhere for the past 14 years. Their record is why people up and down this country are paying more in their bills, and the people will not forget it.
Michael Shanks
I will not give way; I am very short on time.
In an unstable world, the only way to guarantee our energy security and protect bill payers from future energy shocks is to speed up our transition away from fossil fuels and towards home-grown clean energy. We have been clear that we cannot flick a switch and fix 14 years of dither and delay overnight, but we have set about starting to do so, and we will continue. Throughout supporting the transition, Great British Energy will save families money by ensuring that electricity bills are no longer exposed to those kind of price shocks—[Interruption.] If Conservative Members want to put a number on this, let us just ask them to go back to their constituencies and ask their constituents how much more they are paying in their bills thanks to 14 years of Conservative government.
On the question of jobs, a number of hon. Members rightly raised the importance of investing in our supply chains and in the skills of the future. Great British Energy will create thousands of good jobs and build supply chains in every corner of the UK through the projects that it supports, as well as at its future head office in Scotland. Its investments will support companies across the energy industry, providing opportunities for high-quality, well-paid work rebuilding the UK’s industrial heartlands.
Several Members raised the question of community energy, which is at the heart of the Bill. Local power generation is an essential part of the energy mix, ensuring that energy projects deliver not just a community benefit but the social outcomes that local communities need. Many Members mentioned that.
Michael Shanks
I have said that I do not have time. The hon. Gentleman gave a speech in which he raised a number of points, and I am happy to come back to him at another time.
Community energy also reduces pressures on the transmission grid and the need for expensive investment, so community ownership will be critical. Great British Energy will deliver a step change in investment in local and community energy projects, putting local authorities and communities at the heart of the energy transition.
Finally, I will address a few points on devolution, which was raised by the hon. Member for Angus and Perthshire Glens, the right hon. Member for East Antrim (Sammy Wilson) and my hon. Friend the Member for Camborne and Redruth (Perran Moon). Great British Energy is intended to support all parts of the United Kingdom, and will help to ensure that every part of this country has a role to play in delivering our energy independence. Since we came into government, we have been engaging regularly with the devolved Governments, on this Bill and a range of other issues, to reset the relationships with them. I hope that soon the devolved Governments will indicate their support for the Bill by passing motions of legislative consent.
One of the Government’s five driving missions is to make Britain a clean energy superpower, and at the heart of that mission is Great British Energy. This is a bold idea, overwhelmingly backed by the British people—not only by people who voted Labour, but by people who voted SNP, people who voted Conservative and even people who voted Reform. Surprisingly, there were people who voted for those parties. This is an idea that has the public’s support. It will speed up the delivery of the clean energy that we need. It will deliver the next generation of good jobs, with strong trade unions, helping to re-industrialise all parts of our nation. It will protect family finances. It will learn the lessons of the past and allow the British people to reap the rewards of this transition. I urge the House to support the Bill and bring a fully operational Great British Energy one step closer to reality. I commend the Bill to the House.
Question put, That the amendment be made.
The House proceeded to a Division.
Madam Deputy Speaker (Ms Nusrat Ghani)
Will the Serjeant at Arms investigate the delay in the No Lobby?
Energy Infrastructure Planning Projects
Michael Shanks Excerpts(1 year, 5 months ago)
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The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Michael Shanks)
The Minister of State for Energy Security and Net Zero, my noble Friend Lord Hunt of Kings Heath OBE, made the following statement today:
This statement concerns an application for development consent made under the Planning Act 2008 by Ecotricity (Heck Fen) Ltd for the construction and operation of a solar photovoltaic electricity generating station situated in Lincolnshire.
Under section 107(1) of the Planning Act 2008, the Secretary of State must make a decision on an application within three months of the receipt of the examining authority’s report unless exercising the power under section 107(3) of the Act to set a new deadline. Where a new deadline is set, the Secretary of State must make a statement to Parliament to announce it.
The statutory deadline for the decision on the Heckington Fen solar park application was 9 August 2024.
Ecotricity (Heck Fen) Ltd has requested that the Secretary of State extends the statutory deadline to allow time for further negotiations with landowners and to ensure the necessary permissions can be obtained. I have decided to allow a short extension and to set a new deadline of no later than 27 September 2024 for deciding this application for these reasons.
The decision to set the new deadline for this application is without prejudice to the decision on whether to grant or refuse development consent.
[HCWS52]
Publication of Statutory Consultation and National Energy System Operator Licences Jointly With Ofgem
Michael Shanks Excerpts(1 year, 5 months ago)
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The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Michael Shanks)
Our nation stands at a pivotal moment in our energy and net zero journey. As we navigate the challenges of energy security and the urgent need for a sustainable future, I am proud to announce the publication of the joint Government-Ofgem response to the statutory consultation on national energy system operator licences and other impacted licences.
NESO will be a trailblazing, independent entity, serving as a trusted voice at the core of our energy sector. It will spearhead strategic planning for our energy systems and networks, manage the electricity system with precision and play a crucial role in achieving our overarching energy strategy and objectives.
NESO’s independence from commercial interests and operational control of the Government will enable it to provide unbiased, expert advice on critical decisions that will shape our energy landscape for decades to come, including our “clean power by 2030” target.
As we move forward, NESO’s role will be instrumental in achieving our net zero and energy security goals. By fostering innovation, enhancing system resilience, and promoting transparency, NESO will help navigate the complexities of our evolving energy system. We are enormously grateful for the valuable input from industry stakeholders, whose insights have been integral to shaping the future of NESO.
NESO will be regulated by Ofgem through two new licences, and this consultation response marks a significant milestone in establishing NESO’s regulatory regime. The final step will be for the Secretary of State to grant NESO these licences under the powers conferred by the Energy Act 2023. The Department for Energy Security and Net Zero and Ofgem are aiming to establish NESO this year.
Our response addresses thematically the feedback raised by stakeholders to the consultation on the contents of these licences published in March 2024. The key themes include NESO transparency and industry feedback, incentives and performance, energy resilience and critical national infrastructure, network planning, NESO transitional service agreements, future roles, uniform network code arrangements, and NESO’s advisory role. Alongside this response document, we are also publishing updated versions of NESO’s licences.
The establishment of NESO is intended to apply only to England, Scotland, and Wales. Energy is generally devolved in Northern Ireland. I will place copies of the statutory consultation response on national energy system operator licences in the House Libraries.
[HCWS57]
Making Britain a Clean Energy Superpower
Michael Shanks Excerpts(1 year, 6 months ago)
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The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Michael Shanks)
I beg to move,
That this House has considered the matter of making Britain a clean energy superpower.
It is a genuine pleasure to see you in the Chair, Madam Deputy Speaker, and a privilege to open this debate on the Government’s plan to make Britain a clean energy superpower. It is also a genuine privilege to have been asked to do the best job in Government— I think the hon. Member for West Aberdeenshire and Kincardine (Andrew Bowie) would concur—and serve as Energy Minister.
The urgency of the multiple challenges that we face as a country is the reason why this Government are moving at such pace on this mission. First, we have the challenge of energy insecurity and our over-reliance on fossil fuel markets, which was laid bare by Putin’s invasion of Ukraine. According to the International Monetary Fund, the soaring inflation that Britain suffered as a result of the energy crisis was far worse than in any other G7 country.
That led to the second challenge, which many of our constituents are still facing: skyrocketing consumer bills, with the default tariff price cap rising by approximately £2,800 in the year after the invasion.
Thirdly, while families continue to face the worst cost of living crisis in a generation, there is still huge demand for good jobs with good wages across every part of the UK, but perhaps particularly in the industrial heartlands that have too often been left behind in both the good and the bad times.
Fourthly, there is the challenge posed by the climate crisis, which grows more and more urgent every day. We are now halfway through the most decisive decade in preventing irreversible damage to our planet. This is our last chance to limit global warming to 1.5° and, frankly, we are way off track.
This Government are determined to address these challenges, but, unlike our predecessors, we do not see them as separate issues pulling us in different directions —a case of either green or growth. Each of these challenges points to the same solution, a green energy future, because investing in clean energy at speed and scale is the only way to deliver energy security and to save families from future energy shocks. It will also create tens of thousands of good, skilled jobs.
Mr Richard Holden (Basildon and Billericay) (Con)
The hon. Gentleman mentions families and energy prices. During the general election campaign, the Labour party and Labour candidates across the country claimed that GB Energy will save the average British household £300 a year. However, the Secretary of State refused to repeat this claim when given the chance last week. There has been quite a lot of confusion in the national media over the past couple of days, with Downing Street saying one thing and the Department for Energy Security and Net Zero saying another. Can the Minister now confirm, on the parliamentary record, how much GB Energy will save or cost British bill payers by the time of the next election? He is absolutely right that all these things are part of Labour’s energy plan for the country, so we need to know how much it will cost or save British taxpayers.
Michael Shanks
I thank the right hon. Gentleman for his question, but it takes a bit of brass neck to come here and talk about bringing down bills when the Government he supported for so long saw those bills skyrocket. We have been very clear that bills will come down. We said it throughout the campaign, we said it yesterday and we stand by it, because bills must come down, but this will not happen overnight. [Hon. Members: “Ah!”] The Opposition Front Bench make noises now, but they have wasted years. We now need to catch up on this mission. We will catch up, and we will bring down bills.
Andy McDonald (Middlesbrough and Thornaby East) (Lab)
Will my hon. Friend give way?
Michael Shanks
I will make a bit of progress, if that is okay.
We will create thousands of skilled jobs, which, crucially, will also tackle the climate crisis that we have not done enough to tackle in recent years. It is for these reasons that the Prime Minister has made making Britain a clean energy superpower one of his five missions. The Government have a clear long-term plan to deliver that mission by increasing our energy independence, protecting consumers, and delivering good jobs and climate leadership. The outcome of that plan will be the decarbonisation of our power supply by 2030 and an acceleration to net zero across our economy.
To achieve that mission, we need to forge a new path that moves away from these volatile fossil fuel markets. That is why I was so delighted to introduce the Great British Energy Bill to Parliament yesterday. The Bill corrects an anomaly in our energy ownership, in which we have widespread public ownership of energy in this country, just not by us. We have offshore wind farms that are owned by the Governments of Denmark, France, Norway and Sweden, but not our own.
Deirdre Costigan (Ealing Southall) (Lab)
Many of my constituents in Ealing Southall are incredibly excited by the Minister’s plans for Great British Energy, for taking back control of our energy system and for lowering the bills of hard-pressed families, but does he agree that the Conservative party will have confused many of my residents with its support for public ownership of energy infrastructure only by foreign Governments, and not by the British Government? Taking into account his great plans to make this country an energy superpower, does he agree—
Michael Shanks
I thank the hon. Lady for her helpful intervention, and I am very happy to agree with her. There is confusion at the heart of the Conservative party’s plans. They have been very happy to hand over key parts of our national infrastructure to foreign Governments, for the profits go to the public in those countries, but they have been ideologically opposed to any suggestion that the British taxpayer should have any stake in those futures. That is something that we will turn around.
Andy McDonald
I am grateful to my hon. Friend, and I welcome him to his position. I think it is clear to everyone that the early advance of the Great British Energy Bill demonstrates the Government’s priority, their commitment to driving down carbon emissions and the cost of energy, and their recognition that that can happen only through public ownership and private investment. That is something that the last Government failed to understand. I know that we will debate the Bill’s Second Reading after the summer recess, but could my hon. Friend say something about GB Energy having a controlling stake in new energy projects, and support to ensure that the public benefit? Perhaps he might also say something about the vexed issue of energy storage, because that will constitute a huge part of the programme.
Michael Shanks
My hon. Friend has raised two important points. To answer the first, GB Energy will invest in a range of projects and will have a key stake in them, delivering a return for the British taxpayer. There will be a range of projects, in some of which we will certainly have the controlling stake, and some of which we might help to get over the line, but in every single project there will be a return for the British taxpayer.
My hon. Friend’s second point is vital. I have been in this role for only a couple of weeks, but every meeting I have comes back to this question of connection, storage, and how we make sure that renewables can be delivered throughout periods in which there is electricity demand. Storage will be important, and GB Energy will have a part to play in that, as well as in answering wider questions about grid and network.
Let me return to the point about ownership by foreign countries. British waters are home to one of the largest offshore floating wind farms in the world, Kincardine, off the coast of Aberdeen. It is a good example of the problem with the current model. The foundations were made in Spain, the turbines were installed in the Netherlands, and only then was it towed into British waters. Our view is that British taxpayers should own some of that infrastructure, which is why yesterday the Prime Minister and the Energy Secretary announced an exciting new partnership between GB Energy and the Crown Estate to unleash billions of pounds of investment in clean power.
This partnership will enable two national institutions to work together for the benefit of the British people. As well as building supply chains, GB Energy will develop and own power projects in every part of the United Kingdom—in England, Wales, Scotland and Northern Ireland. It will be capitalised with £8.3 billion over the lifetime of this Parliament, money that can be invested in wind, solar, nuclear, tidal and other technologies, and it will deliver profits to the British people, playing a vital role in delivering the new jobs that we need.
Harriet Cross (Gordon and Buchan) (Con)
The Government’s plans to ban new oil and gas licences have been criticised by business leaders, unions and community groups throughout Scotland. As a fellow Scottish Member, will the Minister say whether or not he supports his Government’s plans, which it has been said will put up to 90,000 jobs across Scotland at risk?
Michael Shanks
We made it very clear during the election that the future of the North sea is incredibly important, but that future is a transition away from the oil and gas industries that we see at present. The Conservatives also need to recognise that the North sea is a declining basin. We have lost thousands of jobs there over the past decade, and that will continue in the future unless we accelerate our transition in the North sea to the clean energy jobs of the future. It is not good enough to bury our heads in the sand and pretend that this problem does not exist. We need a plan to give people secure, long-term, sustainable jobs for the future, rather than thinking that we can just carry on with business as usual.
Seamus Logan (Aberdeenshire North and Moray East) (SNP)
The Minister has referred continually to the role of GB Energy, but how will it deliver lower gas prices? Only yesterday one of his colleagues, the Secretary of State for Energy Security and Net Zero, admitted that the price of gas was determined on the international market.
Michael Shanks
I am not sure that the hon. Gentleman understands the purpose of GB Energy, but it is not to bring down gas prices; it is to bring down bills. The whole point of GB Energy is to move us away from our over-reliance on gas. If we are not reliant on gas prices, we will remove that risk to bills from the shocks that we receive from the international markets, but we can do that only if we invest in the clean energy of the future.
Ellie Chowns (North Herefordshire) (Green)
Does the Minister agree that the energy crisis is a matter not just of supply but of demand, and that the cheapest bill is the one that does not have to be paid because the energy is not being used? Does he intend to announce today ways of tackling the demand side? We could, for example, ensure that all new buildings are built to net zero standards, and announce a timeline for getting to that point as soon as possible. We could also announce a nationwide, street-by-street insulation programme to tackle the need for energy efficiency; that is the cheapest and quickest way to address the energy crisis. If he is not going to make those announcements today, when will they be made?
Michael Shanks
I thank the hon. Lady for her intervention. She has perhaps been reading our manifesto, because I agree with everything she has just said. That is why we are announcing a warm homes agency and looking at energy efficiency across the public and residential sector, and why we will massively upscale that domestic investment. I will come back to her points in more detail later. It is almost as if she knew what I was going to talk about.
Henry Tufnell (Mid and South Pembrokeshire) (Lab)
An announcement was made recently about collaboration with the Crown Estate, and how it will work with GB Energy. In Pembrokeshire we have a fantastic opportunity in the form of floating offshore wind. The Crown Estate is undertaking the leasing process for the seabed. Can the Minister assure us that there will be binding commitments to there being local content in the supply chain, and to addressing the skills gap in the region?
Michael Shanks
I thank my hon. Friend, who has already become a very strong advocate for his constituents. He cornered me in the Library to talk about these issues, and long may he continue to do so. He raises a really important point. The whole point of our partnership with the Crown Estate is that we will be able to look not just at investment in the clean power that we need, but at the supply chain creating good jobs in industrial communities. Our commitment to the British jobs bonus means that we will invest in those jobs in this country, creating the skills for the future.
Finally on GB Energy, as a Scottish MP it would be wrong of me not to say that I am incredibly proud that Great British Energy will be headquartered in Scotland. It is a signal of our commitment to delivering the good jobs that communities need, and to bringing the expertise and skills of Scotland’s growing renewables sector to the table as we drive forward towards even more ambitious plans across the whole country. In the driving seat of these ambitions is our new mission control centre, led by the former chief executive of the Climate Change Committee, Chris Stark. Mission control is about bringing together the best minds across Whitehall, but also, crucially, outside of Whitehall, so that we can set the direction, monitor progress and remove all the barriers in the way, whether they relate to the planning grid, supply chains or skills, so that the Government can work with one voice to deliver this plan.
Dame Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
On barriers, one of the key challenges is the capacity of our construction industry. Is my hon. Friend having conversations across Government about how we resolve that issue, so that we can deliver on this crucial agenda of moving towards net zero?
Michael Shanks
My hon. Friend makes an incredibly important point. This transition has to be hand in hand with the industrial strategy that the Government are driving forward. That is why the Minister of State, Department for Energy Security and Net Zero, my hon. Friend the Member for Croydon West (Sarah Jones) is also a Business and Trade Minister; that will bring together work right across Government on the industrial strategy. We also have to look at the skills for the future, and developing the next generation of apprentices and skilled workers, who will be in jobs that will be with us long into the future.
Catherine Fookes (Monmouthshire) (Lab)
My hon. Friend has mentioned Scotland, but I would like to mention Wales again, as did my hon. Friend the Member for Mid and South Pembrokeshire (Henry Tufnell). Monmouthshire has plenty of wind and wave opportunities. We have the tidal River Severn, and we also have small tributaries in the Wye valley, such as the Angidy above Tintern. My constituents are really looking forward to benefiting from the community energy projects mentioned in the Bill. When can our community energy projects start bidding into the process?
Michael Shanks
I thought for a moment that my hon. Friend was going to make a bid for GB Energy to be headquartered in Wales, which is one thing that I cannot commit to. She raises a really important point. One of the missions of GB Energy will be around the idea of community-owned power. We have to bring two things together: we want communities to be in the driving seat of much of this in the future, but also to have some sense of ownership of the assets. We also know that some of the smaller generation projects can be the most successful. If we can bring together the benefits of community ownership with smaller-scale generation projects, that would deal with some of the issues regarding the grid and network, because we would not be trying to bring power to communities from far away. There is real appetite for that, and it is some of the early work that GB Energy will do.
The Government have moved quickly on two aspects, one of which is onshore wind. We swept away some of the significant barriers that have held us back for far too long. Within 72 hours of coming into office, we removed the de facto ban on onshore wind in England that meant that just a single objection to a wind turbine prevented it from being built. Onshore wind is quick and cheap to build, and it becomes one of the cheapest sources of power that we have. Under the ban, in place for nearly a decade under the Conservative party, only two onshore wind turbines were built in the whole of England, and the pipeline of projects shrank by nearly 90%. We are now consulting on bringing large onshore projects back into the nationally significant infrastructure projects regime, and we have established an onshore wind taskforce to tackle the depleted pipeline of projects, to help us on our way to doubling onshore wind by the end of the decade.
We also have to speed up the roll-out of solar power. That means not leaving planning decisions languishing on desks for month after month, but getting on with making decisions. That is why my right hon. Friend the Secretary of State consented to 1.3 GW of solar, powering the equivalent of 400,000 homes.
Ben Obese-Jecty (Huntingdon) (Con)
The Minister talks of solar farms. In Huntingdon, the proposed East Park Energy solar farm stretches for six miles, from Great Staughton to across the constituency boundary, and is, at 1,800 acres, larger than Gatwick airport. Local residents have grave concerns about the scale of that development. What commitment will he make to our rural communities that they will have a say over the Labour Government allowing large solar farms to be built in local areas, given the detrimental impact on them?
Michael Shanks
The hon. Gentleman is right to represent his constituents, of course, and we will not in any way remove the ability of communities to be part of the consultation process and the planning system, but the issue is that this has not been happening for so long. We need to move forward with some of this infrastructure. We want to look at the benefit that communities will get from it—a range of options are being looked at—but at some point we need national recognition that some infrastructure is necessary and nationally significant. Some communities will have to host that infrastructure, and there should be benefits for them to doing so; it does not mean that we should stop doing these things. The days of the Government passing the buck to a future generation to fix the issues are gone. We need to tackle the crisis, and that means that we will build projects in communities—with consultation, of course—because nationally significant projects will have to go ahead if we want to reach our targets by 2030.
In one week, more solar capacity was delivered by this Government than through all previous solar projects consented to by the Department and its predecessors combined. We have reconvened the solar taskforce to explore what else Government and industry can do to help us to treble solar power by 2030.
Underpinning a renewables-based system will be a baseload of nuclear power. We want to see Hinkley Point C operational this decade, with extensions to the currently operating fleet, and we are also supporting the development of new sites such as Sizewell C. Meanwhile, Great British Nuclear is continuing to drive forward the competition for small modular reactors, with bids currently being evaluated by the Department.
There has been much debate about the role the North sea will play and what a just transition will look like. The reality, as I mentioned earlier, is that the North sea is a mature basin with declining reserves. Figures from the Office for National Statistics suggest that the number of direct jobs supported by the oil and gas industry has already fallen by more than a third since 2014.
Brian Leishman (Alloa and Grangemouth) (Lab)
Regarding the potential closure of the Grangemouth refinery, the Just Transition Commission recently said that the UK Government have taken positive steps in working collaboratively with the Scottish Government. There is no doubt that we are behind schedule because of the previous Government’s inaction. Will my hon. Friend provide an update on when the Grangemouth future industry board leadership forum will next meet?
Michael Shanks
Again, I thank my hon. Friend not just for his intervention, but for all the work he has done before and since his election. He has been a dedicated campaigner on this issue and has raised it a number of times with me and my right hon. Friend the Secretary of State.
My hon. Friend’s point about collaboration is incredibly important. We have reset our relations with the devolved Administrations across the country. In particular, on Grangemouth, we have been working hard with the Scottish Government to find a solution. That has been a far more helpful set of interventions than we had from the previous Government. For example, on Project Willow, we have committed to joint funding with the Scottish Government to drive forward to find a solution. We are leaving no stone unturned to secure an industrial future for the Grangemouth site, and I know that my hon. Friend will continue to campaign on the issue.
The future of the North sea more generally depends on having a plan for the industries of the future, whether that is carbon capture and storage, hydrogen or, indeed, renewables. The just transition is critical and it is something I take incredibly seriously, so we will work with North sea communities to develop a credible long-term plan. That work will be supported by a British jobs bonus to incentivise developers to build their supply chains here in the UK and to create good jobs in our industrial heartlands and coastal communities. We will make sure that our offshore workers are the people who decarbonise our country and deliver our energy independence, and that there is a strong, resilient workforce in the North sea for decades to come.
Barry Gardiner (Brent West) (Lab)
My hon. Friend, very importantly, mentioned the role that carbon capture, usage and storage has to play in the decarbonisation of our economy. I am sure he will have seen the latest National Audit Office report on CCUS and will therefore be aware that the Department has increased its reliance on CCUS substantially since this was first mooted. The NAO is clear in its report that uncertainty remains about the funding available for future stages of the CCUS project proposals; that the previous Government were behind in agreeing support for track 1; and that future progress on the programme is dependent on reaching financial investment decisions for at least some of the track 1 projects very swiftly. Will he give us an update—if not now, at some point later—on how this essential part of the programme will be handled?
Michael Shanks
My hon. Friend raises a very important point. The Department is reviewing the NAO report at the moment. This area will need investment, but we also need a concerted effort to understand what some of the barriers are. It is very clear that carbon capture and storage will be a critical part of the North sea infrastructure in the future, so we are taking those issues very seriously.
Carla Denyer (Bristol Central) (Green)
I very much welcome much of what the Minister has said in this announcement, including on the need for a just transition for those working in the oil and gas sector. However, before the election, the Government made a commitment to end new oil and gas licences, although they are still planning to allow the new Rosebank oil field to open, despite it being connected to a level of carbon emissions that we simply cannot allow in this country. I have two questions about the future of oil and gas. First, will the Minister confirm how and when the ending of new oil and gas licences will happen? Secondly, will the Government reconsider the opening of the disastrous Rosebank oil and gas field?
Michael Shanks
I was hopeful that that was going to be a very positive question, but then we got to a “however”. I thank the hon. Lady for her support of what I have said so far. North sea licensing is an important issue. We were clear throughout the election that we do not intend to issue any further licences in the North sea. We are looking at how exactly that will come into force, and a lot of detailed work is going on because we want to give assurances to the industry.
On the question of Rosebank and some of those other fields, we have said that we will not bring to an end any of the licences that are currently in place. I cannot speak on some of the particular issues, because there are, of course, cases before the courts, but we will come back to the House in due course to set out the detail. What is important is that we have said that we do not want any new licences in the North sea and we stand by that commitment. We now want to work out a detailed plan, so that that just transition, to which the hon. Lady rightly referred, can come into effect.
I wish to finish on the warm homes plan, which the hon. Member for North Herefordshire (Ellie Chowns) mentioned earlier and is so committed to supporting, and we are grateful to her for that. It will invest £13.2 billion in clean heat and energy efficiency over the lifetime of this Parliament, doubling the previously planned investment to upgrade 5 million homes, with grants and low-interest loans to support investment in insulation, low-carbon heating and other home improvements.
The latest Government figures show that 3 million households in England are in fuel poverty. In the private rented sector, the figure is one in four. Shamefully, the last Government abandoned their commitment to get those homes up to decent standards of energy efficiency, but we will not abandon tenants. We will ensure that homes in the private rented sector meet minimum energy standards by 2030, saving renters hundreds of pounds a year.
Michael Shanks
I will carry on, if that is okay.
We will ensure that we have a regulator that fights for consumers as well. We have seen repeated failures in recent years, including the scandal of the forced installation of prepayment meters, poor customer service, and consumers picking up the cost when companies go to the wall. The Government will overhaul the mandate, powers, remit and redress of Ofgem, and we will reduce the burden of standing charges, which have risen by £150 since the start of 2022. We will hold companies to account for wrongdoing and ensure that there is automatic compensation for those failed by their energy supplier.
Finally, the next 18 months in the run-up to COP30 are critical to ramping up and delivering on our global climate commitments. Britain must and will regain its influence on the international stage, so we will work with international partners to raise ambitions, including by leading a clean power alliance that brings together a coalition of countries to accelerate the clean energy transition.
The Government’s clean energy mission and our wider energy agenda are critical, not just for that international leadership, but as a route to lower bills, energy security and good, long-term jobs. There is no doubt that we are playing catch-up. If we succeed—and success is vital for all of the reasons that I have outlined—the benefits will be substantial and felt by everyone long into the future. We have wasted no time as a Government getting started in pursuing this mission and I look forward to the contributions of hon. Members across the House, so that together we can deliver this critical agenda for the future of our country.
Michael Shanks
With the leave of the House, Madam Deputy Speaker, I will respond to what has been a very wide-ranging and—until that last speech—a mostly positive debate. I thank all those who have contributed and have brought us their ideas and their huge experience, not just in relation to the green energy transition but in relation to everything from the care system and child poverty to vital matters of public discourse such as what we should put on our chips. That was raised by my hon. Friend the Member for Bathgate and Linlithgow (Kirsteen Sullivan), and, for the record, what she said was absolutely right.
I want to say something about the maiden speeches that we have heard today, because it has been genuinely incredible to sit on the Front Bench and listen to them all. The hon. Member for Beaconsfield (Joy Morrissey) said a moment ago that they had given her quite a lot to reflect on. I have 20-odd pages of notes here on those wonderful maiden speeches, but I have only 10 minutes in which to sum up. It was not so long ago that I gave my own maiden speech—less than a year ago, in fact—and the same trepidation that I had when I stood up then is with me now. I have to say, on reflection, that I am glad I was the only person giving a maiden speech, after a by-election, because this field of maiden speeches was just a little too good: they were fantastic. The House often comes in for criticism for no longer being the place where we take the moral course or talk about the high values of public service, but in every single one of those maiden speeches, from every part of the House, we heard the real dedication of Members to their communities and the passion with which they want to fight for those communities. I think that this Parliament, the Parliament of 2024, will do a huge amount to change people’s lives.
I will turn now to the substance of the debate, but I will come back to some of the maiden speeches if I have time. In her opening remarks, the shadow Secretary of State said that the Conservative party can be proud of its climate record, and in so many ways, if we were to go back years, she would probably be right. But the rhetoric that we are now hearing from this Conservative party is a million miles from that David Cameron conservativism that said we should take the environment seriously. Language in this matter is important. It matters that we talk truthfully when we speak about the opportunities and risks. It matters, too, that we do not conflate issues when there are no grounds for doing so.
I wish to pick out just a few things from the debate today. The shadow Secretary of State and a number of Members raised the issue of bills. Having sat and listened to those contributions, I do wonder where some Members have been for the past few years. There can scarcely be a Member in this House who does not know of the thousands of people up and down this country struggling in fuel poverty, and the millions who are still facing higher bills.
The reason that we are on this journey is not because of some sort of ideological commitment to net zero, but because we know that it is the only way to deliver the energy security that we need to reduce our dependence on volatile gas prices and to deliver the cheaper energy that we know will bring down bills. The commitment that we made throughout the election has not changed in the slightest. We will bring down people’s bills in the long term to avoid those shocks that have cost people so much in their household bills.
In what I thought was a great speech, the hon. Member for Bath (Wera Hobhouse) pointed out that this cannot be about growth versus green, which is really important. The two go hand in hand. It is a key part of both our economic strategy and our environmental strategy that we move forward. She also made the point about co-ordinating across Government, which is also important. It is why the Prime Minister himself is chairing these mission boards, so that we can bring together all Departments of State and internal and external voices to drive forward the change that is needed across Government.
On the oil and gas transition, the hon. Members for Gordon and Buchan (Harriet Cross) and for Aberdeenshire North and Moray East (Seamus Logan), who are perhaps not surprisingly on the same side in criticising this Government, made a number of points about the North Sea, which are important and which I take on board very seriously. None the less, the suggestion that the North sea is going to close overnight is nonsense and it has to stop being peddled by Members across the House, because it creates unnecessary uncertainty. There will be decades of work in the oil and gas industry in the North sea, whether or not we issue new licences. And, as has been mentioned, the skills, the experience and the infrastructure that is vital for a net zero transition are important. That is why we need to start the just transition now. It is why we should have started it years ago, frankly. We cannot simply bury our heads in the sand and hope that the economic reality of the future will be the same as the past. The North sea is declining as an oil and gas basin. We need to tackle what the future of that looks like now.
On the issue of scaremongering, the various contributions that have touched on solar could mark a really worrying change in the discourse that we are going to have in this House if we carry on the way that we are. The genuine questions about planning are important, and it is right that Members of Parliament are robust—indeed I would be myself as a constituency MP—in the defence of their constituents on these issues. None the less, there is such a thing as nationally important infrastructure, which is important for the whole country. Saying that there is going to be food insecurity because of these solar projects is incredibly dangerous language from the Opposition.
Indeed, the National Farmers Union, responding to some of that scaremongering, said that solar farms do not in any way present a risk to the UK’s food security. Solar farms make up less than 1% of the land use in this country. Even if we reach the target that we want to get to, they will still make up a tiny amount of our land use, and they are an important part of our energy infrastructure.
Greg Smith
I accept that the figure at the moment is 1%, but the volume of solar applications coming forward literally every week in my constituency alone means that the cumulative impact will be a hit to food security. I gently ask the Minister to look at the projected numbers for the future, not what we already have.
Michael Shanks
I will make some progress, because I have only four minutes. If I have time, I will come back to the hon. Lady.
The hon. Gentleman has repeated the point about food insecurity, despite me just saying what the National Farmers Union—which I think is an expert on this topic—has said about it. He has also made a point about the amount of infrastructure in one given area, which is why it is really important that we co-ordinate that infrastructure much better than we do at the moment. That is why the spatial energy plan is so important; the previous Government commenced that work, and we will continue it, because we need a holistic view of all this energy infrastructure so that individual communities do not become saturated with one particular type of infrastructure.
However, I say gently to all hon. Members that at some point we have to accept that some of that infrastructure is nationally important and will have to be sited somewhere. Even if we have offshore cables, that infrastructure, by its very nature, has to come onshore at some point. There will have to be a recognition of the need for infrastructure in communities, but I take the point about the importance of it being well planned.
Michael Shanks
I will first give way briefly to the hon. Member for Bristol Central (Carla Denyer).
Carla Denyer
The hon. Member for Mid Buckinghamshire (Greg Smith) raised a concern about solar threatening our ability to grow our own food in this country. I respectfully suggest that he checks out the recent research by Exeter University, which shows that we could increase the amount of renewable energy we generate in this country 13 times over using, I believe, less than 3% of the UK’s land, and none of the highest-grade agricultural land—
Michael Shanks
That is a helpful contribution, and I thank the hon. Lady for it. Even if we reached our solar target by 2030, it is a very small amount of land that would be used for what is an important part of our energy infrastructure.
A number of other points were made in this debate that underline how complex some of these decisions are going to be, but also the huge opportunities we have. A number of Members spoke about the industrial opportunity that will come from this green transition, and a number offered up examples from their own constituencies relating to the role of skills, which is going to be so important. The sense that this is the mission that we need to be on together as a country is also important, because it will take all of us—with all of our expertise, and the challenge that comes from the Opposition—to make the right decisions so that we can have a long-term plan that delivers the net zero future that we need.
Before summing up, I will return to some of the maiden speeches. In particular, taking advantage of being at the Dispatch Box, I want to highlight my colleagues from Scotland who have been returned to this Parliament, who made some fantastic speeches. It was brilliant to hear my hon. Friend the Member for Na h-Eileanan an Iar (Torcuil Crichton) speak in Gaelic during his contribution, which was fantastic. I am disappointed that more of our Lobby colleagues were not in the Chamber to hear him do that, but I am sure they will catch up. The point he made about the importance of involving communities in this future was also made by a number of hon. Members. That needs to take two parts: it needs to be consent and consultation, but it also needs to be a recognition of what the rewards for those communities should be. There are a number of options, because not all communities are aligned on what they think that reward should look like, but it is going to be a critical part going forward.
There were a number of quotes that I will look up in Hansard. My hon. Friend the Member for Na h-Eileanan an Iar talked about being seasoned with salt, which was wonderful. My hon. Friend the Member for Glasgow South West (Dr Ahmed) spoke about seeing the world through the long lens: having the discipline to look at some of these difficult, challenging public priorities and recognising that some of the benefits of what we are doing now will not be seen in the next five or 10 years, but it is none the less important to start the work, is something that we in this place can all bear in mind.
To conclude, since the summer recess is fast approaching, I could not help but notice that as a result of all the maiden speeches, we have produced something of our own staycation guide as we have gone around the House. Very quickly, I will just mention my hon. Friend the Member for Lowestoft (Jess Asato), the lido and the safari; the Turner art gallery in East Thanet; Barra, the jewel of the Hebrides with its whisky and salmon in Na h-Eileanan an Iar; the Norman castle in Waveney Valley; Bellahouston park in Glasgow South West, which I know well; one of Becket’s miracles—fantastic; I am going to see the hon. Member for South Northamptonshire (Sarah Bool) about that, and also because I now know that she is the one in the Chamber with sweeties, which is very helpful—and the Open championship in Central Ayrshire. My hon. Friend the Member for Central Ayrshire (Alan Gemmell) has the privilege of representing the constituency that I was born in, and he made a wonderful speech today. I will also mention Aldo’s chippy in Bathgate, Dumbarton castle in West Dunbartonshire, and the delight of being burnt as an effigy in Lewes. I thank the hon. Member for Lewes (James MacCleary) for concluding the debate.
With the 15 seconds that I have left, I thank all right hon. and hon. Members who have participated in the debate. I hope that this is the first of many for them, and that there continues to be a genuine exchange of ideas across the House.
Question put and agreed to.
Resolved,
That this House has considered the matter of making Britain a clean energy superpower.