Energy Bill [ Lords ] (First sitting)

Olivia Blake Excerpts

Committee stage
Tuesday 23rd May 2023 Public Bill Committees

[The Chair]

Sorry. I thought you were waving your hand. If people could stand up and make it plain to me that they wish to speak, I will call them. If they wiggle an eyebrow, raise a hand or otherwise, I will not see them and therefore will not call them. I call Olivia Blake.

[Olivia Blake (Sheffield, Hallam) (Lab)]

Thank you, Mr Gray. It is a pleasure to serve under your chairship and to follow my hon. Friend the Member for Southampton, Test. Having spoken to researchers at the University of Sheffield, and understanding that carbon capture and storage is more complicated than just the big carbon capture and storage programmes, I think his amendment is crucial. Modular and small carbon capture is really important, but where the captured CO₂ then goes is really important too. Having a CO₂ hub provider in this space is important for the circular economy of products, which, although not within the Bill’s exact remit, is fundamental to reducing carbon in the environment.

--- Later in debate ---

[Dr Whitehead]

The hon. Member is right that we should not seek to regulate everything out of existence. As she says, provided that the basic position is in place many industrial and commercial processes do not actually do harm, and there are all sorts of ways of making sure of that; then we can leave them alone.

My only point is not about separately regulating something that has otherwise been completely unregulated, but that this is an overall process and we need to make sure that, overall, the processes all point in the same direction. That is, one way or another, that we produce less carbon dioxide, allow less carbon dioxide to escape into the atmosphere and do what we can to use sequestered carbon dioxide in the best way. Normally, that means transporting it, for which we need regulations to make sure that there are no leakages, for example.

At the moment, we are considering a number of different options when it comes to the transportation of carbon dioxide. As the hon. Member for South Ribble will know, that does not just consist of trying to put down pipelines to deliver the carbon dioxide to the port of exit before it is put into the storage site. Obviously, sites themselves need proper regulation so that they are safe for the purposes of storage.

Earlier, the right hon. Member for Elmet and Rothwell questioned the process of storage. It is vital that the storage itself is suitable. We know, from what we have to rely on, that the storage is likely to be sound—that means, frankly, that once we have put the stuff underground it stays there and does not leak out subsequently. That is quite a science in its own right. A great deal of the time spent looking at storage sites is about being absolutely sure that the site is as we thought it was in order to avoid disaster once we have committed ourselves to storage on the site. Given the different kinds of storage site, considerable work is under way, all of which needs to be regulated properly.

We have to consider alternative forms of storage—saline aquifers, for example. It is not just a question of storing carbon dioxide in depleted oil or gas fields; a number of other geological formations appear to be suitable for the purpose. Whether those alternative formations can be used for storage onshore as well as offshore is a particular concern. People may raise the issue of carbon dioxide leaking out onshore—as well as offshore, potentially.

Throughout, there is a need to regulate how the process works. With respect to the hon. Member for South Ribble, I do not think that it is over-prescriptive to say that we need some regulation of the use of carbon dioxide—after all, in theory at least, using the carbon for the best purpose is an essential part of the process—hence the amendments that we have tabled, which I hope are constructive.

[Olivia Blake]

There are two points to this, are there not? There is a set amount of carbon at the moment, which is increasing annually. Usage allows us to reduce that—instead of new forms of carbon going into the atmosphere, we would reuse what we have. That is why the amendment is key. I hope that the Government take it away to look at again. It is also basic chemistry that if we are putting CO₂ into a chemical reaction, we will not get CO₂ coming out the other end until the product degrades, so it is a falsehood that it will all immediately leak—

[The Chair]

Order. Interventions must be brief.

[Olivia Blake]

Sorry, Mr Gray. There are two points there that I think the Minister has not considered fully.

[The Chair]

Dr Whitehead, perhaps you will be brief. We have already given this group quite a long debate.

Energy Bill [ Lords ] (Fourth sitting)

Olivia Blake Excerpts

Committee stage
Tuesday 6th June 2023 Public Bill Committees

[Alec Shelbrooke]

I take your advice, Mr Gray. One tries to push one’s luck, but I take your comments on board.

To summarise the comments I was going to make, which can wait until subsequent stages, there are several alternatives within the energy market that can be used to achieve some of the things we are hoping to achieve with the blunt tool of yet another tax on energy. Hydrogen will play an important part in the energy progress that we make going forward. These things will need capital funding to help set them up, similar to many things that were done when the North sea was first exploited. Government subsidies and underwriting helped to get that under way.

These are important areas. We must not be blind to the fact that the public are losing faith in the climate agenda overall. There are many reasons why that may be happening. It may well be just algorithms on social media that draw certain people together, but we cannot be blind to the fact that there is a growing movement against net zero. There is a growing movement in this House to talk about having a referendum on whether we want to achieve net zero. Some colleagues are now pushing that forward.

We have to act carefully and diplomatically, and show people that there are huge advantages to be had from this technology and this energy going forward. The Government raise a lot of revenue off energy production, as the hon. Member for Southampton, Test and I have outlined. I therefore feel that Government amendment 12 would be a mistake. However, the Minister has indicated that work is taking place in the background, and I have had indications that amendments may be brought in on Report. If the amendment is pushed to a Division today, I shall not vote against it, but I shall abstain.

[Olivia Blake (Sheffield, Hallam) (Lab)]

It is a pleasure to follow the right hon. Member for Elmet and Rothwell. I know that this is not really a declaration of interest, but my mother, Baroness Blake, was actually the person who moved the amendment in the other place. It is interesting that mother and daughter are both working on this Bill in different ways.

[The Chair]

A record?

[Olivia Blake]

Possibly a record. Who knows?

I rise to defend the amendments made in the Lords and to speak against Government amendment 12, predominantly because of the aims of the Bill that the Secretary of State outlined when it was brought forward. Those aims were about security, but also about tackling fuel poverty. The facts about fuel poverty in the UK at the moment are very telling. I will cite the End Fuel Poverty Coalition’s numbers: 1,000 people died in 2022 as a result of living in cold, damp homes, unable to heat them because of costs. We also know that 7 million people in the UK last winter were living in fuel poverty. Taken together, those are staggering numbers, and it is important that they are at the forefront of our minds when we discuss the levy.

It is telling that there seem to be unified voices against the policy. The figure of £118 that the shadow Minister mentioned came from Onward, which is a Conservative think-tank. The discussion is also about who has the broadest shoulders to help with the changes that desperately need to be made to our energy system. I completely agree with the shadow Minister that the Bill gives the public all the risk and potentially none of the benefits.

There are 37 independently published reports that set out that they do not believe that the UK will move fully to hydrogen for home heating. Obviously there are massive benefits for steel—Sheffield is the city of steel—that could be unlocked through hydrogen, and there are many benefits for industry, but it seems wrong for Government amendment 12 to remove the protections given in the other place to the levy to prevent that cost from falling so dramatically on households. As the right hon. Member for Elmet and Rothwell set out, it is really important that we bring the public with us.

Government amendment 12 is almost a wrecking motion for net zero, because the opposition to this will be huge. I ask the Minister to think hard about whether the Government want to champion such a burden on households when it is not clear whether the benefit will ever fall on households. We do not yet know the questions about hydrogen, let alone the answers, or what the benefits to home heating will be, if that is the path we go down as a nation when there are many alternatives growing at speed, as we have discussed. I think the Government’s amendment is very challenging. I urge them to think again for the benefit of all those who struggle to pay their energy bills now and for those who may struggle in future if the levy comes in.

[Kerry McCarthy (Bristol East) (Lab)]

I want to add to what has been said on both sides of the Committee Room today about how unwise it is for the Government to go down this path. I do not agree with what the right hon. Member for Elmet and Rothwell said about how we should not conflate public feeling about net zero with public concern about energy bills; the green transition and the move towards renewables will bring in cheaper energy and enhance our energy security, so I do not accept his arguments. However, if I were to argue that point with him, you would quite rightly say that I was broadening the debate beyond the parameters of the Bill, Mr Gray, so I will save my remarks for this afternoon’s Westminster Hall debate on the Government’s approach to net zero.

At the heart of the issue is what the shadow Minister, my hon. Friend the Member for Southampton, Test, said: consumers want to know how this will come to us. I share the concerns—my hon. Friend listed the other green levies in legislation, but the difference is that we can see a benefit from investment in such fields—but the hydrogen levy will mostly be to the benefit of energy-intensive, hard-to-decarbonise industries, and consumers will rightly feel that they are paying for something from which they will not receive the benefit.

We know that there is huge concern. The right hon. Member for Elmet and Rothwell said that there is fear in people’s eyes about how they will meet their energy bills. There is—I have seen that concern. In my public communications about how energy bills were predicted to rise, I was very worried about making constituents even more scared. It was a balance: I wanted to warn people about what is to come, but given the stress that they were under, I felt that it was important not to be alarmist. It is a difficult position to hold. As has been said, it could put about £118 on bills. Documents from the Department state that after 2030, the impact on consumer bills will ramp up even further:

“Once introduced, we expect its impacts will ramp up as we look to deliver our 2030 hydrogen ambitions to improve energy security.”

This is a deeply regressive move.

I do feel a bit of sympathy for the Minister, because he has to defend to the hilt something on which, given the reaction on Second Reading, he will end up having to U-turn. He will get all the flak, and his boss will get all the credit for having listened to people and changed his mind.

Somebody mentioned the think-tank Onward, which has contributed a piece to “ConservativeHome”. Onward has also said:

“The Government is walking into a trap with the hydrogen levy. It would be a mistake that risks stalling the development of a British hydrogen economy. It would also be unfair to ask households that won’t benefit from hydrogen directly to pay for it. The Government should think again. And the Treasury should get off the fence and back the role hydrogen can play in the economy.”

Clearly this is not an anti-hydrogen move. It is about ensuring that the people who will benefit bear the majority of the cost.

Energy Bill [ Lords ] (Sixth sitting)

Olivia Blake Excerpts

Committee stage
Thursday 8th June 2023 Public Bill Committees

I am sure the Minister will agree that one of the problems being encountered in the hydrogen trials is the question of precisely what the Government think they are doing in relation to participation under these clauses, and the extent to which that is clouding the ability to conduct the trials reasonably in the first place. With at least one of the trials, there has been considerable push-back from the local population because of how they fear it will be conducted. The amendment would enable trials to proceed much more expeditiously, and potentially more successfully, because the people being asked to take part would have guaranteed routes forward if they did not wish to participate. I, for one, wish the trials success—I do not wish to see them undermined—but they need to be conducted on the basis of a clear understanding of how to address the local population’s concerns. That would ensure the trials are a success and shape our thinking about hydrogen and local heating policy for the future.

[Olivia Blake (Sheffield, Hallam) (Lab)]

It is a pleasure to serve under your chairship, Ms Nokes. I rise to support the amendment, because this is a fundamental issue. The Minister talked about households only, but will the offer that he outlined be available to businesses? That is important, because businesses have different energy needs, even in residential areas.

It is important that we take people with us. They must have the option to say no to such trials and get low-carbon heating by another means. That is all I wanted to say on the amendment.

[Alan Brown]

There is another hydrogen trial ongoing—the H100 project in Fife, which is the world’s first trial of green hydrogen for heating and hot water. Like the hon. Member for Southampton, Test, I hope that that experiment is successful.

That trial in Fife highlights the issues that we are debating today. Will the Minister update the Committee on the number of properties signed up to H100? Investigative journalists have reported that the £1,000 sign-up offer was not enough of an inducement to make households sign up. That is the conundrum: it is fine to say that there will be a financial incentive or a consumer offer—the Minister says that we will never need to resort to using the powers in these clauses—but it is clear that some people are reluctant to sign up. If the financial inducement is not enough, how will the Government and the gas operators take those people with them and get this over the finishing line?

It is absolute critical that we take people with us. It is critical that consumers understand the offer they are getting, the risk and the way that the hydrogen trials are being undertaken. It is important that there is transparency in the reporting of the trials. In particular, we need to understand how risks and leakages will be reported. The worst thing that can happen is for rumours or wrong perceptions to circulate.

Amendment 118 is intended to give people an alternative to being part of a hydrogen trial. I support that principle, but that still leaves us with the dilemma of what happens if a household says, “I don’t want to be part of a hydrogen trial and, by the way, you can forget these heat pump things. I am quite happy with my methane gas, thank you very much.” What would happen in that circumstance?

That brings me to the Minister’s argument on Second Reading that the powers will not be used to either force people into the hydrogen trial or leave them disconnected from the gas network. What happens if not enough people are signing up? Frankly, the Government will then have a dilemma. If they want to facilitate these hydrogen trials, they need enough people on the hydrogen network, otherwise the trials will not be sufficient to get an understanding of, or see, the proper operation and benefits of hydrogen.

What will the Government do if not enough people are signing up? How will they facilitate people signing up without forcing them, and how will they get these powers to be successful in terms of mass criticality? There is the old phrase, “You can’t make an omelette without breaking some eggs.” It might well be that the Government are going to upset some people, but they will have to be honest about it. Just saying, “There is no way we will use the powers in the Bill” might be unintentionally disingenuous. I am curious what the Minister’s thoughts are. It is fine to say that the Government will not use them, but that remains to be seen.

--- Later in debate ---

[Katherine Fletcher]

Thank you, Ms Nokes, and I apologise for not prosecuting my arguments procedurally in the correct way earlier. I want to respond to what the hon. Member for Southampton, Test has said. I completely accept that he has tabled his new clause in the spirit of public safety, but I do think that this is an area that could be better understood by the public. I gently suggest to him that there might be a slight misapprehension in some of the material that he just quoted from.

What the hon. Gentleman was describing was neutrons degrading a physical structure, as a by-product of the plasma. There is an analogy here: it is almost like it getting shot at or water going through a concrete structure and then causing rust and degrading the steel within it. That is not necessarily the creation of a nuclear radioactive source; that is something being peppered with neutrons. And that is why it is not a commercially viable facility at the moment—because there are still things to be worked out, not least how we ensure that we do not build a very expensive thing that, by its own nature, then degrades over time and use. But that is not the same as creating a radioactive source.

The hon. Gentleman mentioned deuterium and tritium, which are different types of naturally occurring hydrogen elements. Tritium sounds, to my ear, almost like something that the Terminator would be using to do something particularly exciting. In fact, it is only a hydrogen that occurs in nature and that has a single proton and two neutrons within the nucleus, so it is a bit bigger and heavier than is typical. What that means is that it is a little more unstable. The natural half-life of tritium is 12 years, whereas the nuclear regulations that the hon. Gentleman seeks to apply or partially apply in this instance are designed to deal with things that have half-lives of thousands of years. Someone will tell me that I have this wrong, but with uranium-238 we are talking about very different orders of magnitude—

[Olivia Blake]

I am a biomedical scientist by background, so I come to this with a medical perspective. The issue with tritium is that it produces beta waves, which are a more damaging form of radiation to human tissues—only in a minor way, as it has a score of 1 compared with 20 for alpha waves, but there is an underlying risk. Exposure of the workforce to that level continuously could put DNA stability at risk, because it is an ionising form of radiation. If there is a problem—containment is always a big challenge that gets raised by scientists—hopefully we will overcome it, but it is right to have the protections, particularly for the workforce. That is why I welcome new clause 51.

[Katherine Fletcher]

I thank the hon. Lady for her intervention. Of course beta radiation is produced when a nucleus is separated, when the neutrons in tritium move away. For me, it is a question of proportionality and risk. At the moment, there is no viable commercial solution, so there is not a workforce but a research community, which is publicly and privately funded. On that becoming a workforce solution, I agree with her that ensuring that people are safe at work is vital but, should this come about, the Health and Safety Executive will not leave it unmonitored. However, new clause 51 is not about workplace safety; it is about putting something that is fundamentally not nuclear fission, as opposed to nuclear fusion, into a set of regulations designed to deal with such things.

I wondered about the criteria, given that the hon. Member for Sheffield, Hallam mentioned radioactivity occurring in the fusion environment. What percentage of Cornwall, with its radon gas, might be caught up in the thresholds? I will be interested to pursue on Report what we are actually talking about. As a scientist, the hon. Lady knows that 100 is very different from 1, even though 1 poses some risk.

I am grateful to the hon. Member for Southampton, Test for tabling the new clause, but given the opportunity for clean, net zero energy—which really could be the panacea for the world, as tree-huggers like me would say—in the UK we should look to tread lightly, but carefully, with any regulation of an industry that has such a level of potential and to which the UK has contributed so much already. He mentioned torus structures, but those are only one of a series of different potential generational tools—torus might be the research tool, not the commercial tool, so his concerns could disappear with a completely different production facility, perhaps based on electromagnetic rather than physical containment.

With regret, because I understand the genuine and heartfelt nature of the hon. Gentleman’s new clause, I think it is important that we do not stifle a nascent industry with regulation. I will therefore support the Government’s position.

--- Later in debate ---

[Dr Whitehead]

I have nothing to say on the clause, but I believe that my hon. Friend the Member for Sheffield, Hallam does.

[Olivia Blake]

I have a few concerns about clause 117, which would, as the Minister outlined, allow fossil fuel waste to be reclassified as renewable energy in the form of fuels for policies including the proposed sustainable aviation fuel mandate, which is currently being consulted on by the Department for Transport. It seems the Department would like to be able to include recycled carbon fuels, including unrecyclable plastic, as eligible fuels under the sustainable aviation fuel mandate. That is why the Bill will permit recycled carbon fuel to be treated as renewable, to help us to meet our sustainability targets.

Energy Bill [ Lords ] (Seventh sitting)

Olivia Blake Excerpts

Committee stage
Thursday 8th June 2023 Public Bill Committees

[Dr Whitehead]

My hon. Friend is absolutely right: the Government did not consider that. There were discussions at the time of the earlier smart meter roll-out about radio systems that could get over precisely those problems by patching in—that is, going on the back of a good radio signal and patch in on the next radio signal, where the overwhelming radio signal is against signals operating properly. But that decision was not made at the time. It was a one-frequency signal for the south of England and phone arrangements for the north of England, with the results that we now see.

Halfway through the roll-out it was decided to change the specification of the meter itself. Because the process of changing the specification was so slow, a number of retail companies that had large stocks of the original meters continued to install the SMETS1 meters long after they should have stopped installing them—just because they had those stocks, which the new specification had not got round to replacing because of the delays in the so-called SMETS2 meters coming on to the market and being installed. Consequently, a number of meters are still not operating in smart mode, because they are either awaiting update or replacement so that they can go into the smarter system. Of the 31.3 million smart and advanced meters that are currently in homes, only 28.1 million are operating in smart mode. The roll-out is worse than it looks from the overall statistics.

What do we do about all that? The Government have put a clause in the Bill that simply says to retail companies, “Okay, we are going to give you more of the same. We are going to regulate you and give you targets”—which, by and large, the retail companies are not achieving—“and if you don’t achieve those targets we are going to fine you and whip you harder to ensure you achieve them.” Frankly, if we go on in the present direction we will get to 2028, and we do not need detailed maths to demonstrate that we will not be much further forward in the roll-out.

That is important because, in terms of the use of smart meters across the board to collect aggregate data for marking our system as a whole, we probably need about 70% penetration to get the figures right under the circumstances. We are way away from that, and we will be for a quite some time. We may well have a situation where our smart systems are racing ahead, but the means of communication on those smart systems are not, thus the smart system itself is compromised in the medium to long term.

Amendment 100 seeks to put some options in front of the Government. It states that

“the Secretary of State must produce and lay before Parliament a report setting out options for securing a guaranteed roll-out of smart meters to at least 70% of premises in all regions and nations of the United Kingdom by 2025.”

That is a reasonable target to try and aim for. Not that we would necessarily adopt this approach right now, but the amendment then states that the report must consider, among other options, different ways of rolling out smart meters for the future.

Members may push back substantially on obligatory smart meter installation. Do we transfer responsibility for the remaining smart meter roll-outs from the retail companies, perhaps to distribution network operators? That would put an end to the current system, in which literally four or five installers could go up the same street on the same day to try to install smart meters on different premises, depending on what retail company the person was with. There would instead be one body that would be installing smart meters in the various regions, and doing so in a much more systematic way. By the way, a lot of the to-ing and fro-ing that goes on when someone switches supplies to their smart meter, and how that can be transferred in an operable way, would be ended as well.

I am on record from about 2015, I think, saying that it was not a bright idea to have given the roll-out of the smart meter system to energy retailers, and that it should have been given to distribution network operators at that particular point. That is now a widespread view, and, looking back with the wisdom of Captain Hindsight, it is something that we should have considered. We can still consider it now because smart meters are not owned by the companies that install them. They pretty much all employ third parties, which actually own the meters in people’s homes, to run them. We could relatively easily —without transferring the ownership of the smart meters from those third parties—transfer the contracting agent from energy retail companies to district network operators.

The Minister is a little less advanced in years than I am, and may not remember the switchover in television lines from 405 to 625. That was basically accomplished by saying, “You can keep a 405 line television—you don’t have to have a 625 one—but it might not work in a few years’ time if you have kept your 405 TV.” The switchover was accomplished pretty much in good time, and universally. We are asking the Government for a report that considers all the different options for getting us out of the hole that we are in regarding the smart meter roll-out, to ensure that smart meters can fully play the role that we want them to play in our future low-carbon energy economy, and that we have the means to do that and can confidently come back with something better than the flog-a-sickly-horse routine in the amendment.

I hope the Minister will have a positive response to the amendment. I feel so fed up with yet again considering a Bill that just seeks more of the same that I am tempted to press it to a Division if he is unable to come substantially towards what we are saying regarding the future of smart meters. It is that important. I am trying to ensure that some Government Members go home so that we can win, but obviously it is up to the Minister how far he can come towards that view regarding the future of smart meters.

[Olivia Blake (Sheffield, Hallam) (Lab)]

The amendment is eminently sensible. I speak with the experience in my constituency before Christmas of what is now referred to as the great gas flood of Stannington. Hundreds of millions of litres of water entered the gas system, causing 3,000 properties to have water ingress, in some cases it was so harsh that water was coming through gas appliances and hitting the ceiling with force, or wrecking the whole interior of people’s properties. I mention that because almost every property involved in the crisis had to have its meter replaced. To the exasperation of some of my constituents, their smart meters had to be replaced with refurbished meters. We had issues with the second-hand meters that were put in.

I am still carrying out conversations with the energy companies because there were differences in the units of some of the meters. Some measure cubic metres and some measure cubic feet, which means that some people are getting a very good deal at the moment on their energy, because their energy company does not know that they changed the unit, and some people are getting awfully ripped off. It is very complicated, but because Cadent, which did a fantastic job during the crisis to make people’s homes safe and to ensure that the faulty gas meters were immediately replaced—I have no problem with that—did not have any agency providing smart meters, there was a missed opportunity to upgrade or keep them.

We have actually seen a decline in the number of smart meters in my constituency because of that major incident. We know that such incidents will probably become increasingly likely and with climate change there are likely to be more problems with water ingress—although hopefully not at the scale we had in my constituency, which left constituents without hot water and gas for many weeks during a very cold snap when there was snow on the ground.

Energy Bill [ Lords ] (Ninth sitting)

Olivia Blake Excerpts

Committee stage
Tuesday 13th June 2023 Public Bill Committees

[Dr Whitehead]

As always, you are right, Ms Nokes, so I will temper my remarks. I hope that common sense will prevail and that a thumping majority will ensure that the clause is retained so that the Bill can progress to its next stage intact. The clause is important to Government policy, so it should not be taken out and disabled in the way suggested.

[Olivia Blake (Sheffield, Hallam) (Lab)]

It is a pleasure to serve under your chairship, Ms Nokes. I rise to speak in defence of clause 204, and I agree with the shadow Minister, my hon. Friend the Member for Southampton, Test, that the Government have suggested an interesting tactic.

Our housing stock has been described as the least energy-efficient in Europe. That means we are the least prepared to absorb future price hikes, like those experienced in recent years, and to address future temperature changes. In England alone, more than 13 million homes—59% of them—are below a C rating on the energy performance certificate standard. As a result, housing is one of the main sources of carbon emissions in the UK, accounting for around 20% of total emissions.

We should be making massive efforts and strides to improve in this policy area, yet energy efficiency programmes have been cut and home insulation rates have plummeted over the past decade. In 2013, the coalition cut energy efficiency programmes, after which insulation rates fell by 92%. The number of energy efficiency insulations peaked at 2.3 million in 2012, yet fewer than 100,000 upgrades were installed in 2021. That is rather pathetic, it has to be said.

The Bill and clause 204 in particular provide a golden opportunity to put in place the financial structures and programme to give the necessary upgrades to the 19 million homes in our country that are below band C on the EPC scale. Clearly, that is what a Labour Government would do.

[Mark Jenkinson (Workington) (Con)]

Has the hon. Lady heard of our ECO4 scheme?

[Olivia Blake]

Yes.

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

Has the hon. Lady heard of the issues with the ECO4 scheme? The energy companies have not met the target number of properties because it needs to be rewritten.

[Olivia Blake]

Those are the exact problems. In recent years a number of Government schemes have either failed because they have not had the workforce to deliver them, or experienced challenges because people have been drawn into other roles, particularly in the building sector and in relation to cladding issues and so on. That is exactly why the Opposition would be very pleased if the clause were protected. We need that action plan. Delivery is only worth something when it happens. We cannot just have targets that we repeatedly continue to miss. It would be exceedingly challenging to argue to the public that we should not prioritise getting their bills down by £1,000 a year or come up with an action plan to deliver that.

[Katherine Fletcher (South Ribble) (Con)]

Yes, the British public would experience significant benefits through bill reductions as a result of insulating their homes, but who is the hon. Lady suggesting should pay for the intervention that would produce that benefit? It would be a significant scheme, especially given that 30% of the housing stock is really old. Who would foot that bill?

[Olivia Blake]

Moving away from this Bill, Labour has a fully costed plan for achieving that and it is targeted at the 19 million homes.

[Andrew Western (Stretford and Urmston) (Lab)]

Does my hon. Friend agree that although the Government are reticent about placing this clause on the statute book, surely the fact that they are Government targets means the money will be found anyway?

[Olivia Blake]

Absolutely, and I will come to that point. This issue is so significant: it is important that we find the funding for these sorts of interventions because almost 9,000 neighbourhoods in England and Wales have very low incomes but higher than average energy costs because of poor insulation. That requires Government action, and I fully support Labour’s plans, which I believe would cost £12 billion a year—I might be wrong about that.

[Kerry McCarthy (Bristol East) (Lab)]

It is £6 billion.

[Olivia Blake]

Sorry, £6 billion—I have doubled my ambition. That is a large amount of money, but it would be very welcome in meeting the challenges we face.

I am not alone in my concerns about delivery in this space. In January, the Environmental Audit Committee rightly said that we need a national war mobilisation to improve energy efficiency and reduce carbon. The public are crying out for action to address fuel poverty and household emissions: 80% of respondents to National Energy Action’s polling supported funding retrofits for those on low incomes and, according to the New Economics Foundation, 64% of Conservative voters and 65% of people in the north support a national retrofitting taskforce.

Without the clause, the Bill will be another missed opportunity to tackle the cost of living crisis, to bring forward the emergency energy efficiency measures we need, and to start a national 10-year mission for home insulation. Delivery is important, and without an action plan I am not clear how those millions of homes, and the millions of people living in them, will benefit from better energy efficiency. We need to get on top of our carbon emissions and we need to ensure that housing is not forgotten, given its vast contribution to emissions.

It would be a mistake for the Government to remove the clause. All it is asking for is a warmer homes and a business action plan to set out how His Majesty’s Government intend to deliver energy efficiency. It is important to keep that clear ask in the Bill. I will be deeply regretful if the Government do not support the clause, because it will be another missed opportunity.

[Andrew Western]

It is a pleasure to serve under your chairship, Ms Nokes. At the risk of repetition, I too rise to defend clause 204. It is interesting that, in my first Bill Committee, we appear to be having something of a groundhog day moment. When we had a similar discussion about low-carbon heating last week, the Minister stood up and gave us various assurances that these things would be done, while resisting with all his might any attempts to compel the Government to do that in law.

It is incredibly challenging when the Minister says that superb progress is being made on these issues and that we have gone up to 40% over the past 13 years. In fact, on current projections we have something in the region of 200 years to go to upgrade the energy efficiency of the UK’s draughty housing stock. National Energy Action says that progress on energy efficiency is too slow, and the UK Business Council for Sustainable Development has calculated that the pace of the Government’s recently announced scheme would take almost 200 years to reach homes in need of upgrade. It is clear why the Opposition are so keen to see the targets in the Bill; clause 204 is therefore so important.

I warmly welcomed the addition of the clause in the other place because although the Minister talks about the energy White Paper, the net-zero strategy, the heat and building strategy that was published alongside it, and the future homes standard, none of those things actually compel the Government to act. That is the problem. The Government can miss their targets time and again because there is nothing that forces them to take the action needed. Warm words will not provide warm homes—it is that simple. This will not get us where we need to go unless it is on the statute book. We know that because we are already missing the targets.

Energy Bill [ Lords ] (Tenth sitting)

Olivia Blake Excerpts

Committee stage
Thursday 15th June 2023 Public Bill Committees

[Dr Whitehead]

We have reached an important part of the Bill, concerning core fuel sector resilience. As the Minister stated, we need to ensure that our core fuel supplies are not cut or interrupted by external circumstances, that we have resilience in our supplies, and that we can be assured at all times that petroleum and so on is getting to and from refineries, and to where it is supposed to go. The Minister has reflected already on past disruption to fuel supplies, which hon. Members will recall. It is understandable that we wish to be assured that supplies are secure.

The Minister also stated that we have powers already to ensure that, where disruption takes place, action can be taken to secure resilience. However, these measures on the principle of core fuel resilience go further than that. As the Minister says, this is about trying to anticipate potential disruption and problems as far as core fuel sector resilience is concerned, and then providing the Government with powers to respond proactively, rather than reactively, to the anticipated issues.

I suggest that one needs to be very careful in how one drafts something for that purpose. I assume that what we do not want, although perhaps the Government do, is to get into the situation in the film “Minority Report”, quite a while ago, in which the lead actor, who happens to be Tom Cruise—not that I regularly watch Tom Cruise films—

[Olivia Blake (Sheffield, Hallam) (Lab)]

Why not?

[Dr Whitehead]

Oh, all right. We can have a debate about whether Tom Cruise makes good films or not, but I think the general consensus would be no. The point about that film is that he was, as I recall, a detective who had to go round anticipating crimes before they were committed. Indeed, he did not just anticipate crimes—I think my hon. Friend the Member for Bristol East is looking this up on her iPad—

--- Later in debate ---

I personally think the amendment would be a good addition to the Bill. It has been put forward in a spirit not of animosity but of trying to ensure that we make the best sense that we can of a series of wide-ranging powers. As I said, Tom Cruise or no Tom Cruise, we should not stray completely into the area of trying to anticipate crimes and misdemeanours before they are undertaken, but take proper, proportionate action to ensure that the sector is able to work properly under possible disruption and that everyone works together to ensure that that resilience is as good as it can be.

[Olivia Blake]

It is a pleasure to serve under your chairship, Dr Huq. I should say that I am a member of the GMB union.

I rise to support the amendment, which is very reasonable and is an attempt to help the Minister. I am sure he will stand up and say that the Secretary of State would never knowingly try to give directions in contradiction to the measure that we have tabled, but the point of the amendment is to get that on the statute book and make it clear to the industry, and those who are employed in it, that that safety net would be there, because “anything” is a very broad word, as outlined by the shadow Minister, my hon. Friend the Member for Southampton, Test.

There have been great relationships within the industry for many years, and as it is such a critical industry when it comes to health and safety, the working rights of those employed in it are critical to maintaining that safety. I hope the Minister will look on the amendment kindly and understand the reasons for it.

[Andrew Bowie]

The powers in the clause are important to ensure resilience and address disruption in the core fuel sector. I thank the hon. Member for Southampton, Test for his amendment and reassure him, and the hon. Member for Sheffield, Hallam, that the powers are not intended to interfere with any rights to industrial action or any other employee rights. The Government have maintained a good working relationship with the industry over the years and aim to be aware of proposed industrial actions and to work collaboratively, as we have in the past, to understand the impact and potential mitigations for the risks that might arise.

Clause 224 enables directions to be issued for particular purposes only: to improve and maintain resilience, to restore continuity of supply or to reduce the risk or impact of a disruption. In a situation in which a proposed industrial action is assessed to cause a significant risk of disruption, the direction power could be used to ask core fuel sector participants to make contingency plans to mitigate the risk. It is not intended to cut across the rights in the legislation that the hon. Members have highlighted.

I emphasise that the Government will always seek a voluntary solution in the first instance before issuing a direction and, of course, we believe that industry participants will have a chance to make representations before a direction is made and to appeal a direction when issued. I therefore ask that the hon. Member withdraw his amendment.

Energy Bill [ Lords ] (Eleventh sitting)

Olivia Blake Excerpts

Committee stage
Thursday 15th June 2023 Public Bill Committees

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

It is a pleasure to serve under your chairmanship, Mr Gray. You must be delighted to have the Thursday afternoon shift this week. I agree with the Government amendments on the expansion of definitions and capturing other infrastructure required to facilitate service offshore wind generation, especially given the scale of the build-out still required and the renewable energy offshore wind targets that we want to see.

I agree with the principles of strategic compensation for adverse environmental effects in clause 246. Such considerations have been a stumbling block for Berwick Bank offshore wind farm, for example, so having regulations that provide clarity on environmental considerations and possible compensation for other projects is certainly welcome. The key test will be whether sufficient clarity is provided and workable. If we want to deploy renewable energy at a much quicker rate to achieve cheaper bills and eliminate reliance on fossil fuels, we need to be able to look at the environmental impacts in the round and come to sensible, balanced solutions. That means creating environmental equivalence or improvements elsewhere by implementing solutions away from sites if it is deemed that they cannot mitigate the environmental impacts of the site of infrastructure construction.

I have one word of caution; I may not be quite as concerned as the shadow Minister, the hon. Member for Southampton, Test, but we need to ensure that these regulations and processes do not become an avenue or vehicle for developers to choose a much easier, cheaper financial solution for them, rather than looking at all avenues to mitigate the environmental impacts at the construction sites. It is critical that robust analysis is undertaken by the relevant regulatory bodies. I realise that subsection (4) is not intended to ensure that everything is looked at and worked through to the nth degree, but we need to ensure that that analysis is not overlooked in the dash for renewable energy and that no shortcuts are taken that allow developers to choose an easy financial solution.

I turn to clause 247. I am sure the Minister is aware that the Scottish Government have concerns that the clause gives the Secretary of State the powers to operate a marine recovery fund in Scottish waters without the consent of Scottish Ministers. Indeed, the Secretary of State will have the powers to completely bypass the Scottish Government and appoint another person or authority, and that is replicated for other devolved Administrations. I understand that the Minister has had ongoing discussions with Gillian Martin MSP—the Energy Minister at the Scottish Government—and other officials on these matters, but as far as I know nothing has been agreed yet. That is why I tabled amendments 176 to 180 to outline my thoughts and put down a marker. Clearly, my amendments were not selected for debate and cannot be voted on, given when they were submitted, but they put down a marker. There is still a window in which the Minister can come to some sort of agreement with the Scottish Government on amendments. It would be good if he could provide the Committee an update on how close we are to a solution. Some form of amendment is still required to subsection (8) in that regard.

There may be issues with clause 247(4), which gives the Secretary of State broad regulation-making powers that could be used in a highly prescriptive manner to direct Scottish Ministers as to how they determine that a compensation condition has been discharged. Again, it should not have been too controversial to agree a way forward. That should be done with the consent of Scottish Ministers before implementation.

I hope that the Minister will acknowledge the collegiate working with the Scottish Government and officials. Nobody is trying to being awkward or territorial for the sake of it, nor are they trying to introduce arbitrary red lines. That is why we are giving the Government a bit more time, rather than pushing votes and extending the debate on this; we are trying to find a collegiate way forward. Again, I hope the Minister can give some insight about a solution with regards to subsection (4).

Finally, in relation to devolution, clause 247(9) allows the Secretary of State to cancel functions that Scottish Ministers have consented to under that clause, which seems anomalous. Again, I am looking for some sort of compromise to protect devolved functions in that regard.

Clause 248 does not provide sufficient certainty that Scottish Ministers will retain consenting functions in the Scottish offshore region or waters beyond 12 nautical miles. I understand that the Scottish and UK Governments have discussed this, but what is the timescale for a possible agreement? I believe that the Scottish Government have suggested draft amendments, so what is the UK Government’s view on them?

Subsections (7) and (8) of clause 248 are too broad. They could alter executively devolved powers and fundamentally shift existing arrangements for the consenting and licensing of offshore wind projects in the Scottish offshore region. Does the Minister appreciate those concerns, and does he have a plan to resolve the situation?

[Olivia Blake (Sheffield, Hallam) (Lab)]

It is a pleasure to serve under your chairship again, Mr Gray.

I declare an interest, given that we are now talking about renewables: my husband is a company secretary of an organisation called Sheffield Renewables, which is a community benefit society that funds, develops, owns and operates renewable energy systems in Sheffield. Although I hope that Sheffield will not become the coastline—if we do everything right so that vast swathes of east Yorkshire, including Selby, are not under water—I thought that it would be prudent for me to declare that interest at this stage.

As a former shadow Minister for nature, this part of the Bill strikes a chord with me. There are things to welcome in the clauses, but I share some of the concerns that have been outlined by my hon. Friend the Member for Southampton, Test. In fact, I agree with the words of an Environment Audit Committee report in relation to the development of offshore wind: we should

“be extremely sensitive to biodiversity considerations given the obvious risks of disrupting important habitats”.

That is important because the Bill represents an attempt to tackle not only the carbon crisis, but the nature crisis. What is bad for one is bad for the other, so it is important that we bear biodiversity in mind with every step we take through the Bill, not least because nature is a massive carbon sink. The UK already faces massive nature depletion—we have has some of the worst nature depletion in Europe—so it is right that we debate how the Bill takes such considerations into account.

I fear that clause 248 provides wide powers to ignore habitat regulations, marine Acts and general duties around assessment, which is problematic. There is also something of a misalignment between some of the wording in the Bill and that in the Environment Act 2021. When that Act seeks to alter habitat regulations, there are a lot of caveats, and it might be worth the Minister considering whether it would be right to have those caveats in the Bill, given that both measures represent Government policy and strategy.

I hope that the Bill does not conflict with 13 by 2030, which we have had a conversation about, and the protection of marine areas. I also hope that we will discuss protections. I particularly support our amendments 166 and 167, because it is important to have that switch-off or death switch, I suppose—I am trying to think of a way of phrasing it. We need to keep those protections in place where we can. If we allow ourselves to be deluded into thinking that the impact on the environment off-sea will not affect us, we are really missing the point. It would have been nice if there had been a reference to blue carbon in the Bill. Obviously, that has not materialised—I understand why, because the Bill is predominantly to do with energy—but we are missing measures in that space as well.

It is incredibly important that the Minister considers amendment 165, particularly as it outlines some of my concerns about the Bill’s alignment with the Environment Act. It is quite clear that the Bill could do more to ensure that environmental protections exist and that we are not cutting our nose off to spite our face with some of our activity.

Energy Bill [ Lords ] (Sixteenth sitting)

Olivia Blake Excerpts

Committee stage
Tuesday 27th June 2023 Public Bill Committees

[Andrew Bowie]

I thank the hon. Member for his intervention, and point him to the remarks that I just made regarding the huge investment that we are already making in the transition, the fact that we were the first G7 nation to sign a transition deal, and the £100 billion of private sector investment by 2030 that we hope to see, and that we are driving into British industries, supporting 480,000 green jobs by the end of the decade. We are looking to meet that target, unlike the Scottish Government’s green jobs target, which of course they have not met—alongside failing in four years out of five to meet their climate change targets, as was announced just last week. Since delivering a net zero workforce transition needs joint action by Government and industry, as I have said, we are continuing in that regard.

With respect to the scrutiny advised in the new clause, the Government already report progress on delivering our net zero ambitions through multiple channels—through parliamentary Select Committees, the Public Accounts Committee, independent bodies such as the National Audit Office, and—under the Climate Change Act 2008—the Climate Change Committee. I should point out that the hon. Member’s colleague and friend, the hon. Member for Na h-Eileanan an Iar (Angus Brendan MacNeil), has recently taken up the chairmanship of the Energy Security and Net Zero Committee, and will, I am sure, ably hold my Department to account. I hope that that provides the hon. Member for Kilmarnock and Loudoun with the reassurances that he needs to withdraw the motion.

[Olivia Blake (Sheffield, Hallam) (Lab)]

It is a pleasure to serve under your chairmanship, Ms Nokes. I have asked a few written questions in this space and I agree wholeheartedly with my hon. Friend the Member for Bristol East that the just transition should have already started for many workers. A survey two years ago found that workers were looking to move from the fossil fuel industry to renewables but that they were being put off by training fees. I have asked repeatedly about that.

I asked the Department whether it knew what the average cost of retraining would be for oil and gas workers but was told that it does not know or does not hold that data. However, I have heard at first hand from oil and gas workers who want to move into renewables that they face training costs of many thousands of pounds and that the quality of such training is questionable in some places. Government inaction risks leaving those workers behind when they want to be part of the transition and already have transferrable skills in those industries. I also recently asked a question about the Department’s discussions with the offshore wind industry on recognising an energy skills passport to help oil and gas workers, but was told in response that no such discussions have taken place.

I thank the Minister for his kind words about a transition. However, when will we see action for oil and gas workers? When will the inaction turn into action and delivery so we can get on with developing the green skills we need in this country to deliver net zero and compete in a global market?

[Andrew Bowie]

I thank the hon. Member for Sheffield, Hallam for the tone of her words. The Government believe that the best way to secure jobs for oil and gas workers is to continue to give them support and, indeed, to support investment into the North sea, which not only provides secure employment for them now and into the future but provides for our energy security needs, which is something the Labour party might take note of moving forward.

As a representative of a constituency in the north-east of Scotland, I am fully aware of the pressures that workers in the North sea oil and gas industry face and the desires of many of them to transition to new green jobs. We see that in the city of Aberdeen, which is transitioning from being the oil and gas capital of Europe to the energy capital of Europe. That is why we have set up our green jobs delivery group and why we are identifying recommendations and actions for central and local government, industry and business, and the devolved Administrations.

We are also exploring how we can support local areas to deliver a successful transition, and the Department for Work and Pensions is expanding sector-based work academy programmes to help those who are out of work develop the skills they need to re-enter the job market. The programme runs in England and Scotland and is developed by jobcentres in partnership with employers and training providers. The Government take that incredibly seriously and I have a particular interest in the matter.

I thank the hon. Lady for her comments, but we are clear that it is very important to support people who are reskilling and upskilling from traditional oil and gas jobs into new green jobs, while also investing in our oil and gas industry to ensure that investment continues to support the traditional jobs that will be needed for some time yet.

--- Later in debate ---

I am interested to hear from the Minister. I understand, of course, that our attempt just to excise sections 9A to 9I from the 1998 Act may cause similar issues as arose with new clause 43. If that is the case, I would be interested to hear what he has to say about it. However, this looks to be a rather simpler procedure than the one concerning the North Sea Transition Authority; we just excise what went into the Petroleum Act in 2015, and allow that Act to do its work of ensuring that we have a viable, profitable and economically useful North sea oil and gas sector in the very long term.

[Olivia Blake]

It has been an interesting discussion. “Maximum economic recovery” might sound like three benign words, but they could be a toxic combination. If we are not careful, they could be rephrased as “maximum economic crisis”. The climate catastrophe that will unfold if we do not cap global warming at 1.5°, and maintain that on average over 20 years, will be incredibly tough for any Government and for everyone internationally. Some reports suggest that if we wait 10 years, it will not take 1% of GDP to tackle the climate emergency; that will jump staggeringly. About 8% of GDP expenditure will have to go on resilience alone, and dealing with the consequences of the climate catastrophe. The cost of changing to a green energy system in that same decade would double as well. It is really important that we understand what that means.

I say “toxic combination”, but there is also the very real and significant risk of stranded assets. The financial sector, the insurance industry and pension funds are all very aware of the issue, and we see that in how they are changing the way that they invest in projects, and the divestment policies of many of the institutions in this space. Nature published an article in 2022 stating that 60% of oil and gas and 90% of known coal should remain in the ground if we are to get to 1.5°C, but the issue of stranded assets is a reality. We cannot have our cake and eat it; we cannot inhale our cake quicker and hope for the best. Every drop of oil and gas and every lump of coal that we burn contributes to the Anthropocene we are seeing. We have decisions that we can take, and we know that those decisions have an impact.

Stranded assets are really important in this debate. A report in 2022 suggested that the oil, gas and fossil fuel industry had £1.4 trillion of stranded assets. That means that there will be a cliff edge for jobs. There will be assets that people can no longer use or get value from. It will mean that we have barrels of oil, gas and coal that we cannot use, because—a very senior scientist makes this argument in the report—the world will have moved on. We hope that the world will move on as a result of the Bill; if we do not scale up net zero measures, UK households could be spending £500 a year on foreign gas, rather than saving £1,500-odd through a move to renewables and energy efficiency policies, and retrofitting.

This is an incredibly important point. We cannot just hope that things will get better, and squeezing every last drop out of the North sea is not compatible with our aim of 1.5°. We cannot set a date for getting to net zero, but then produce as much carbon and other greenhouse emissions as we like and hope for the best. There must be carbon budgeting, as we all know. We have had all this conversation about a just transition, yet we are giving massive tax breaks. For example, if Rosebank goes ahead, it will receive a tax break of £3.75 billion for something that may soon become a stranded asset.

[Katherine Fletcher (South Ribble) (Con)]

I am grateful to the hon. Lady, and I will be brief. Will she share the definition of a stranded asset? Some oil and gas extraction areas have enormous potential for carbon capture and storage; it will be a matter of pushing stuff down a pipe, rather than pulling stuff out of it. Has any of that been taken into account in her slightly apocalyptic analysis of what we can do in the North sea and other areas?

[Olivia Blake]

It is apocalyptic because going above 1.5°C will be catastrophic.

[Katherine Fletcher]

We are talking about a transition.

[Olivia Blake]

I absolutely agree that it needs to be a transition; that is exactly my point. In the scenario we are discussing,

“Fossil fuel resources that cannot be burned and fossil fuel infrastructure (e.g. pipelines, power plants) that is no longer used may end up as a liability before the end of its anticipated economic lifetime.”

The assets are not being valued at their value over their lifetime; it is that simple. Say we give a value to an asset for its lifetime—25, 50, 100 years or whatever. Its lifetime will fall short of that period, and there will be catastrophic consequences for the financial and economic world; things will go into freefall. This is about economic risk, not just what we have, where. It is that fundamental. That understanding is missing from a lot of this debate, but financial services, pension funds and the insurance industry are all saying that they are very aware of the issue.

[Katherine Fletcher]

The hon. Lady has just read quite a detailed definition of a stranded asset, which included fossil fuel reserves remaining under the ocean, if I heard her correctly.

[Olivia Blake]

We would have to leave them there, but figures for them would be baked into the economic analysis and the business planning for those sites. That is why there is a financial risk; financial plans will come into play that will be unrealistic and unmeetable. That is why the assets will become stranded assets; it had been planned that they would produce a profit over a period, but we will not get to that time because of the situation.

[Katherine Fletcher]

If I understand the hon. Lady correctly, she is worrying about a figure of £1.5 billion in stranded assets, which includes fossil fuels that are left under the ground. That does not take into account the fact that the assets could be repurchased for an energy transition. Would she agree that there is perhaps more analysis to do?

[Olivia Blake]

To be clear, it is not £1.3 billion; it is £1.4 trillion, and that is why this is significant. I am not the only one worried about this—so are financial institutions around the globe. This massive financial risk could spin us into financial crisis if we are not careful. This is not just a climate catastrophe; it is an economic situation that we need to monitor, and we need to ensure that we do not have a cliff edge that lands us in a spiral that we cannot get out of. That is why a transition is so important, and why we need development of industry in the North sea, but cannot rely on our valuations of assets at the moment.

We need to take into consideration changes in the use of oil and gas, so that we can reach 1.5°C. We cannot deal with those two issues in isolation. As much as that would please everyone at the moment and allow them to make a quick buck, it is economically illiterate to think that we can continue as we are. That is a big problem. There are huge opportunities for Government, and I welcome a lot of the things in the Bill that will help to unlock them.

At household level, the move to renewables would significantly benefit people. Renewables are three times cheaper than oil and gas-related heating and electricity. A record number of households are suffering from energy insecurity. It is important that we look at the issue in the round. We cannot just say, “We need this” or “We need that,” and expect it to add up. If the financial sector gets scared, and much suggests that it is, it will look to invest in other places. If insurance companies say, “We are not going to insure these facilities because there is such an economic risk to us,” we are in trouble. If pension funds flee from the sector, we are in trouble. Our financial sector is incredibly important in this area, and those in it are saying loud and clear, “Governments are behind us, and we need them to catch up.” This tiny phrase, “Maximum economic recovery”, and what it asks for, could lead to the cliff edge that we have all been saying that we do not want. That is why this is so important.

--- Later in debate ---

[Andrew Bowie]

I thank the hon. Members for Southampton, Test, and for Sheffield, Hallam, for their impassioned contributions to the debate. There has been talk of apocalypse and catastrophe, and there has been some idea that the country is not taking the issue seriously. The hon. Member for Sheffield, Hallam suggested that we were just setting a date and hoping for the best. Nothing could be further from the truth. We have decarbonised faster than any other G7 nation. Off the coast of this country are the first, second, third and fourth-largest offshore wind farms in the world. We created an entire Department to focus on the challenges of net zero, and we are passing this Bill, which will enable us to unlock so much of what we need to do to move this country forward even more quickly.

There was talk of economic illiteracy, but it is economic illiteracy not to support our outstanding British offshore oil and gas industry as it continues to produce the oil and gas that is required to keep the lights on in this country as we transition to a net zero future. It is the safest, most responsible offshore oil and gas sector in the world. Indeed, by 2035 we will have the first net zero offshore oil and gas sector, and the North sea will be the first basin in the world to be a net zero basin. I urge colleagues to stop talking down this Great British success story and start talking it up, as it contributes so much to our energy security and net zero ambitions.

[Olivia Blake]

I think the Minister completely missed the point of what I was saying. I am in no way doing down the industry. I am saying that there are financial risks linked to our climate risks, and they must be brought into this debate. That is fundamental, and future Governments will not thank us if we do not discuss and address that now.

[Andrew Bowie]

I could not agree more that there are financial risks. That is probably why, just this morning, so many businesses expressed their worry at Labour’s Just Stop Oil plans, which were outlined a couple of weeks ago and which the former Labour leader of Aberdeen City Council described as even worse for an industry than the actions of Margaret Thatcher in the 1980s. That is from a member of the Labour party who resigned due to Labour’s policies on oil and gas.

Energy Bill [ Lords ] (Eighteenth sitting)

Olivia Blake Excerpts

Committee stage
Thursday 29th June 2023 Public Bill Committees

[The Chair]

Before we begin, I remind Members that Hansard colleagues would be grateful if you could email your speaking notes to [e-mail]. Please switch your electronic devices to silent. Tea and coffee are not allowed during sittings. The only refreshment permitted in the Committee is the water that is available in the room.

New Clause 86

Investment protection agreements and climate change targets

“Within six months of the day on which this Act is passed, the Secretary of State must—

(a) initiate procedures for the United Kingdom to withdraw from the Energy Charter Treaty;

(b) lay before Parliament a report setting out—

(i) the list of investment protection agreements to which the UK is a party which offer protections to the energy sector, and

(ii) an assessment of the risks they pose to the Secretary of State fulfilling duties in this Act with regard to the achievement of targets set by the Climate Change Act 2008.”—(Olivia Blake.)

Brought up, and read the First time.

[Olivia Blake (Sheffield, Hallam) (Lab)]

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

It is a pleasure to serve under your chairship, Mr Sharma. It is the first time, I think, that we have been in the room together for this Bill. New clause 86 requests that the UK Government commence withdrawal from the outdated investment provisions of the energy charter treaty, which risk undermining our Climate Change Act 2008 targets, internationally agreed emissions reductions and duties in this Bill in respect of the impact of energy production on habitats, species and the climate.

As many Committee members are aware, the energy charter treaty is an investment agreement between 50 countries for the energy sector. The investor-state dispute settlement mechanism in the treaty allows foreign companies to sue Governments outside the national legal system in somewhat secretive tribunals. The amounts at stake can be in the billions, and the ECT has already generated at least 135 claims, making it the world’s most litigated ISDS agreement. In the most recent Intergovernmental Panel on Climate Change report, UN climate scientists warned of the risk that ISDS agreements are

“able to be used by fossil-fuel companies to block national legislation aimed at phasing out the use of their assets”.

The report even name-checked the energy charter treaty, yet the UK continues to be party to it.

The treat is not just a potential risk. There have already been several high-profile cases of fossil fuel companies suing Governments through the treaty. For example, German energy giant RWE is suing the Netherlands for €1.4 billion over its coal phase-out. The UK oil company Rockhopper won a case this summer against Italy over a ban on offshore oil drilling. It won more than £210 million—more than six times what it had spent on the project. UK fracking firm Ascent Resources launched legal action against Slovenia over requirements for an environmental impact assessment, which is quite a benign ask of any project. It has also launched legal action over Slovenia’s subsequent ban on fracking, introduced by its Parliament, and that case is still pending.

The energy charter treaty poses a huge threat to climate action. As states take the necessary steps to phase out or phase down fossil fuels, more and more fossil fuel giants will turn to such mechanisms to sue Governments. It has been estimated that if the UK Government follow the International Energy Agency’s recommended pathway and cancel oil and gas projects that are in the pipeline, they could face claims of up to £9.4 billion from the ECT alone.

Globally, there is a risk of up to $111.5 billion in claims, but that is clearly not the only risk. The most recent IPCC report warns that there is a risk of regulatory chill from investment agreements, and again it particularly highlights the ECT. The fear of being sued is causing Governments to delay or decide against taking the necessary action on climate. Last year, two countries acknowledged that that is already happening.

Countries across Europe are seeing the risks for what they are and are already taking action. Towards the end of 2022, there was a cascade of announcements from countries planning to exit the ECT. Germany, France, the Netherlands, Spain, Poland, Slovenia, Luxembourg and Denmark all said that they are leaving, and Italy has already left. The European Parliament has voted for a co-ordinated withdrawal of all EU countries, and the European Commission is now recommending that as well, because reform of the treaty has not worked and will not work. Current proposals for modernising the treaty are weak and do not have the support of many countries. They will mean that existing fossil fuel projects will remain protected for at least 10 years, and that some gas projects will be protected until 2040. Projects that have just been given new or extended licences, such as the Cambo oilfield, will be protected and all existing projects can still continue.

Reform has ultimately been a failure, and exiting the treaty is now the only option. Germany, France, the Netherlands, Spain and Slovenia have all referred to the incompatibility of the ECT with the Paris climate agreement and climate goals, and the EU Council recently decided that it will not support reform. If countries exiting the ECT do so in co-ordination, as seems to be happening, they could agree between each other not to apply the 20-year sunset clause, as has been suggested by several countries that are leaving.

In June, the Energy Minister at the time, the right hon. Member for Chelsea and Fulham (Greg Hands), said:

“The UK cannot support an outdated treaty which holds back investment in clean energy and puts British taxpayers at increased risk from costly legal challenges.”

That was stated in a press release on 24 June 2022. Back then, the Government wanted to put their trust in the reform proposals to fix the problem, but we have since seen country after country doing its own assessment and concluding that reform is not possible or has failed.

If the UK does not step up and become part of the vanguard for exiting the ECT, it could be left behind in an obsolete and collapsing treaty, bearing all the risks while others move on. Put simply, while we are still members of the ECT we will not be able to achieve the aims of the Bill and meet our net zero obligations without facing huge costs from the agreement. A co-ordinated withdrawal is the most effective way to protect taxpayers’ money, the planet and our future from this damaging treaty, and I urge the Minister to have a rethink.

I will not push this probing new clause to a vote, but I hope that it will allow the Minister the opportunity to set out the Government’s position on this very important issue. It is right that it is considered in this debate, but I accept that I probably will not get the support of Government Members in a vote.

[The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Andrew Bowie)]

It is a pleasure to serve under your chairmanship, Mr Sharma, on the last morning that we gather together in this room to debate the Bill. I thank the hon. Member for Sheffield, Hallam for tabling her important new clause, which relates to an issue that I addressed in a Westminster Hall debate not that long ago.

The UK is committed to addressing the urgent need for climate action at home and abroad through our ambitious net zero targets and international commitments. The new clause would initiate procedures for the United Kingdom to withdraw from the energy charter treaty. His Majesty’s Government completely recognise that the treaty needs to be updated to reflect the current energy landscape, which is why we worked hard for two years at negotiating to modernise it; hence, the comments to which the hon. Lady referred—by the former Energy Minister, my right hon. Friend the Member for Chelsea and Fulham (Greg Hands)—were absolutely correct.

We wanted to bring the treaty into line with modern energy priorities, international treaty practice and international commitments on climate change. Unfortunately, the European Union and its member states were unable to endorse the adoption of modernisation at the energy charter conference. Yes, the European Parliament has voted to update the treaty, and the European Commission is advising that member states or the organisation withdraw, but the EU Council was unable to reach an agreement on modernisation, which is why we are where we are today.

Since the energy charter conference, we have engaged with stakeholders across business, civil society and Parliament, and we are carefully monitoring the positions of the other contracting parties—including the countries to which the hon. Lady referred—and the EU, in relation to the adoption of modernisation. In a context that continues to develop near weekly, we are carefully assessing how to take forward our priorities in relation to the treaty, but we cannot accept the new clause, which would require the UK to initiate procedures to withdraw. As I said, we will carefully consider where we stand.

The new clause would also require the Government to lay before Parliament a report detailing UK investment treaties covering the energy sector and the risks that they pose to the Secretary of State fulfilling their duties under the Climate Change Act. The UK has investment agreements with around 90 trading partners, and the agreements are the responsibility of the Department for Business and Trade. The Government’s right to regulate in the public interest, including in areas such as the environment and labour standards, is recognised in international law, and the Government are clear that when negotiating trade and investment agreements we will continue to protect our right to regulate.

I hope that that provides the hon. Member for Sheffield, Hallam with the reassurance she needs, and I humbly ask that she consider withdrawing her new clause.

[Olivia Blake]

I thank the Minister for his response. He will not be surprised that I am not satisfied with it, but I will not press the new clause to a vote. There are many risks in this area. Other countries have already taken the lead, and we are being left behind, which exposes us to a higher level of risk. I hope that the Minister will not only continue to consider the modernisation of the ECT but consider withdrawing from it. I beg to ask leave to withdraw the motion.

Clause, by leave, withdrawn.

New Clause 87

Government support for community energy

“(1) Within three months of the passage of this Act, the Secretary of State must publish and lay before Parliament a report setting out the financial, policy and other support that the Secretary of State plans to make available to widen the ownership of low carbon and renewable energy schemes and increase the number of such schemes owned, or part owned, by community organisations.

(2) The report must set out—

(a) all policies, programmes or other initiatives with which the Secretary of State plans to support the development and construction of new low carbon community energy schemes;

(b) the level of financial support which will be made available for—

(i) the Rural Community Energy Fund,

(ii) the Urban Renewable Energy Fund, and

(iii) any other fund or support package designed to support the development of new low carbon community energy schemes;

(c) all policies, programmes or other initiatives the Secretary of State intends will increase community ownership of local low carbon energy schemes through shared ownership schemes;

(d) the steps the Secretary of State is taking to develop new market rules to make it easier for low carbon community energy schemes to sell the energy they generate;

(e) the number and the capacity of the new community energy schemes the Secretary of State expects to be constructed as a result of the measures set out in the report.

(3) Not less than twelve months after the publication of the report, and not later than the end of each subsequent period of twelve months, ending five years after the publication of the report, the Secretary of State must lay before Parliament and publish an assessment of the progress made by the policies, programmes and other initiatives set out in the report.

(4) The assessment must set out—

(a) the total amount of financial support provided by the policies in the report;

(b) the number and capacity of low carbon community energy schemes —

(i) completed, and

(ii) in development;

(c) the number and capacity of new shared ownership schemes;

(d) any changes the Secretary of State proposes to make to the policies, programmes and other initiatives included in the original report.”—(Olivia Blake.)

This new clause is intended to replace clauses 272 and 273, if those clauses are removed as indicated by Government Amendments 15 and 16. It would require the Government to report annually for 5 years on the support it is providing to Community Energy schemes and the number and capacity of such schemes that are delivered.

Brought up, and read the First time.

[Olivia Blake]

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

I redeclare my interest: my husband is a company secretary of an organisation called Sheffield Renewables, which is a community benefit society that funds, develops, owns and operates renewable energy systems in Sheffield.

It might seem strange that I tabled new clause 87, given that the Lords passed Labour’s much stronger new clause on community energy. I am extremely disappointed that the Government voted to strike out any attempt to use the Bill to further support community energy schemes. Although the Minister made some comments about wanting to support community energy, the Bill is somewhat lacking in that regard. New clause 87 gives the Government an opportunity to support some elements of community energy schemes.

A Bill that talks about energy security but fails to help many community groups across the UK that are raring to provide clean, green energy seems to have failed from the outset. Many community groups are being offered funding, but they are unable to take up the opportunities because they are unsure and there is uncertainty in this space. I spoke last week about the huge and growing public support for community energy projects and the failure of Government policy to respond to it. I hope that my new clause, which I admit does not go nearly far enough, will focus minds on this important issue.

The new clause is quite straightforward: it gives the Minister three months to report on what support will be provided for community energy for the next five years. I chose that timescale because Ministers often assure us that the Government’s review of electricity market arrangements, or REMA, will improve community energy’s access to markets and thus improve its viability. I am therefore asking for reports on the stop-gap measures that are needed before those arrangements come in and for an extension to the period to deal with any delays.

I have to be honest: I am almost embarrassed by the new clause. With sky-high energy bills and the climate crisis, we should be acting, not reporting, but perhaps reports will stimulate a bit of growth in action on the Minister’s part. The new clause also does not propose new policies to support community energy. I stress that that is not because such policies are not needed. Were we to have a Labour Government, there would be something much more robust in the Bill on this policy area, like clauses 272 and 273, which the Opposition defended last week but the Government were successful in stripping from the Bill.

The new clause asks the Minister to report on how he will refinance and restart the urban and rural community energy funds, which closed when the initial money allocated was used up. In its former shape, his Department supported those schemes at the time, so there is no reason why, if the Minister wants to see more community energy, he could not relaunch them now, or look into doing so. The new clause leaves scope for other initiatives to be included in the report, whether new funds, new policies or a new approach to allowing community groups to buy into and benefit from larger commercial schemes in their area. It would require assessments of progress and updates to be done annually for five years after the report is published, to check that we are on track.

As I say, we should be doing so much more with the Bill in this space, but I would love to hear the Minister’s response to the new clause and to the idea that the Government should, at the very least, restart the support schemes that they have let lapse and report on progress until REMA is completed.

--- Later in debate ---

[Andrew Bowie]

Far be it from me to spoil the enjoyment for hon. Members! I said this when we debated it last week, and I say it again: we continue to work on this. We continue to look at what more the Government can do to support community energy projects across the United Kingdom, and I will commit to provide an update on the next steps ahead of Report. I hope that is suitable for hon. Members. I do not believe that this new clause would add any value, so I encourage—indeed, I humbly beg—the hon. Member for Sheffield, Hallam to withdraw her new clause.

[Olivia Blake]

Beg the Minister might, but I will be pushing this new clause to a vote. The comments made by the SNP spokesperson, the hon. Member for Kilmarnock and Loudoun, and the Opposition spokesperson, my hon. Friend the Member for Southampton, Test, show why we are not completely confident that information from the Minister will be forthcoming, but I welcome his comments and his statement that he is currently looking at this and that there will be something ahead of Report. However, I truly feel that this new clause is the bare minimum requirement in this space, so we will push it to a vote.

Question put, That the clause be read a Second time.

Energy Bill [Lords]

Olivia Blake Excerpts

Report stage
Tuesday 5th September 2023 Commons Chamber

[Richard Drax]

It is. I have read many articles, not least by Mr Bean who, as we know, is a car expert. He wrote a very good article in The Guardian about why we are not quite ready for battery cars. If my wife or daughter is travelling from A to B, I want her to get there safely, as she can in a petrol or diesel car, without having to wait in a petrol section for some minutes to recharge her car, which then takes half an hour or so.

Our actions have consequences, and I urge the Government to think this through very carefully. We cannot impoverish our country to meet what I would call, in some cases, an almost cultish policy to turn this country into something we cannot afford. When we can afford it, and when it works, that is when we should adopt all these policies. I urge caution as the Government go forward.

[Olivia Blake (Sheffield, Hallam) (Lab)]

I declare an interest, as my husband is the company secretary of Sheffield Renewables, a community benefit society that funds, develops, owns and operates renewable energy systems in Sheffield.

I rise to speak in support of a number of amendments that would be vital additions to the Bill. It was a pleasure to sit on the Public Bill Committee to debate, at great length, many of the issues that have been raised today. I still feel the Bill is missing its intended purpose, as the Government put it, to

“deliver a cleaner, more affordable and more secure energy system for the long term.”

We are in a climate and nature emergency, and we are now seeing its effects. We are also facing the worst cost of living crisis in decades. Although I am pleased the Minister has listened to Members on both sides of the House on the hydrogen levy, there is still a lot more to do.

The Bill could have been our opportunity to tackle these issues head on, transitioning away from climate-wrecking fossil fuels while making energy affordable for everyone. Sadly, in its current form, it fails on those fronts. First and foremost, the Bill will fail to make energy more affordable for my constituents. National Energy Action has warned that 6.3 million households could be trapped in fuel poverty this winter, and by 2024 some households will face spending up to a quarter of their income on energy bills.

We need to overhaul our broken energy pricing system, not have more tinkering around the edges. I am proud to support new clause 36, tabled by my hon. Friend the Member for Norwich South (Clive Lewis), which would introduce a national energy guarantee. This idea needs to be considered, as we need to make sure that the burden of the transition does not fall on those who are least able to meet it.

Secondly and shockingly, the Bill fails to deliver any energy efficiency measures. There is nothing about how we will achieve the targets that have been set. The latest CCC report is clear that the Government need to rapidly scale up and accelerate energy efficiency to stand any hope of meeting legally binding decarbonisation targets. Obviously, the greenest energy is energy that is not used, and the more we can do to reduce the need for energy in poor-quality housing the better.

New clauses 33 and 35 aim to correct the current position by making it a legal requirement for the Government to produce an energy demand reduction plan and providing local authorities with funding for the decarbonisation of homes. I thank the hon. Member for Brighton, Pavilion (Caroline Lucas) and my hon. Friend the Member for Nottingham East (Nadia Whittome) for tabling those new clauses, and I urge the Government to support them.

Finally, the Bill fails to decarbonise at speed and scale. Again, the latest CCC report could not be clearer:

“Expansion of fossil fuel production is not in line with Net Zero”.

New clauses 2 and 29 would prohibit coalmines and new oil and gas respectively. New clause 30 would phase down UK petroleum, and new clause 59 would decarbonise electricity supply by 2030. They could and should have been central pillars of the Bill. They are about how we can transform our energy system and meet Labour’s ambitious plans to be a green energy superpower by 2030. However, the Government have removed many new clauses that were won in the Lords—for example, the one on banning new coalmines—and Ministers are refusing to support any such measures today. Instead, they waited until MPs went home over the summer to give the green light to hundreds of new North sea oil and gas licences, without proper scrutiny, in a damning indictment of this Government’s record on climate action. Those are not the only amendments that would help to raise the ambition in this Bill that the Government have removed.

Finally, I wish to mention the importance of new clause 7. The treaty that has been outlined is holding us back and we need to be on the front foot with this. I hope that Ministers will reconsider whether or not we should be part of this treaty in the future.

[Dame Andrea Leadsom (South Northamptonshire) (Con)]

This is a great Bill and I congratulate the Government as it takes us a huge step forward. Back in 2015, when I believe the hon. Member for Southampton, Test (Dr Whitehead) was the shadow Energy Minister, I was Energy Minister and we announced we were taking coal off the system by 2025. I recall that at that time the whole world was up in arms, saying, “Oh no, the lights will go out. This will never happen.” Yet by 2020 coal was almost off the system and today there is hardly ever any use of coal. That demonstrates what can happen when a Government set a direction of travel, put the funding behind it and let businesses and investors get on with it. It is a huge accolade for a Conservative Government, who then stand aside and let private investment come in. It is time that we committed ourselves to building new nuclear baseload, as that is vital. We can be proud of our achievements on offshore wind and the commitment now to carbon capture, usage and storage—that has been too long in coming but I am pleased to see it.

Time is tight, but I wish to refer to my new clause 60, which calls for a specific problem to be tackled in a specific way. We all have major concerns in our constituencies, where communities do not wish to see huge electricity pylons, great big wind turbines and great big industrial sites related to energy in their area. Yet we know that we need new onshore wind, lots of solar and lots of electricity pylons. My new clause proposes to make it much easier to build the 600 km of new electricity cabling and pylons that we need by 2030 to meet our power decarbonisation targets alongside major road and rail routes. As things stand, communities understandably object to these huge pieces of kit going through their areas, and then these things get delayed and delayed. In the past eight or so years, we have built only about 30 km of new pylons but we need about 600 km by 2030. We need to get our skates on. The Government can help by making it much easier for planning—