Great British Energy Bill (Third sitting)

Stephen Flynn Excerpts

Committee stage
Thursday 10th October 2024 Public Bill Committees

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

Good morning, everyone. It is a pleasure to be back in Committee. I will begin by addressing amendment 8, tabled by the hon. Member for South Cambridgeshire, before moving on to why clause 1 should stand part of the Bill.

The amendment seeks to specify the time within which Great British Energy will set out its priorities. For reasons I shall set out, we will not support it. First, though, it is important to say that the Government have already moved at pace on a range of energy-related matters, but particularly on Great British Energy. We have shown very quickly, in not quite yet 100 days in office, that we are moving forward to set up Great British Energy, and there will be no further delays in doing so. It is in our interests—indeed, as the hon. Member rightly said, it is in all our interests—that we move quickly on setting it up.

We have said clearly that we want Great British Energy to deliver a publicly owned, operationally independent energy company, and we are here today, within 100 days of Labour forming a Government, to make that happen. That work will continue. With the progress we have already made, and with a commitment that we want to quickly get Great British Energy delivering what we are setting it up to deliver—it is not at all in our interests to drag our feet—there is really no need for a specific timeline. I therefore hope that the hon. Member will not press her amendment to a vote.

Clause 1 allows the Secretary of State to designate a company as Great British Energy. Legislation often provides for a company that is set up under the Companies Act 2006 to be designated for certain statutory purposes, especially when substantial amounts of public money are involved, or where the company is being asked to fulfil a particularly important role. A recent example from the previous Government is the legislation on the UK Infrastructure Bank, which includes a similar provision.

Clause 1 simply sets out in detail the processes and arrangements to allow the Secretary of State to designate a company as Great British Energy. Perhaps most importantly, the clause allows Great British Energy to be founded as a publicly owned company, which gets to the heart of what this Government are committed to doing: giving the public a stake in Great British Energy. The clause protects the principle of public ownership by making explicit that the company would terminate if it ceased to be wholly owned by the Crown. I therefore commend clause 1 to the Committee.

[Stephen Flynn (Aberdeen South) (SNP)]

I rise to speak briefly to new clause 1, which is grouped with amendment 8 and clause 1. It is very straightforward. It will be for Government Members to consider whether it is appropriate for the House of Commons to be in full knowledge and understanding of what the Government seek to do on energy efficiency. They must also consider whether the steps that the Government take in that regard should be reported to this House to ensure that we are fully abreast of the progress that the Government hope to make and how that meets the promises that they as individuals made to their constituents prior to the election. We as parliamentarians can collectively hold the Government to account on those promises and ambitions.

In discussions on further amendments, we will talk in more detail about the promises that were made, and hopefully the Government might be minded to agree to include some of those promises in the Bill. For now, though, I think it worth while for Members to consider the role that this Parliament plays in scrutinising this Government in a constructive fashion.

[Pippa Heylings]

No one can deny that, as the Minister said, we have seen huge progress coming through immediately, and commitment from the Government. I thought we would have heard from the oral evidence that certainty is critical, and therefore that giving a deadline and a timeframe in which people and businesses could expect to see the statement would be good reassurance. As the right hon. Member for Aberdeen South indicated, it would also be good to have some kind of revision. I hear from the Minister that the Government will not accept the amendment, so I will not press it to a vote, but it should be considered.

[Michael Shanks]

On the hon. Lady’s point, I reiterate our absolute commitment to move faster—frankly, far faster than in six months—to deliver the statement of strategic priorities. We will talk about that later in relation to further amendments.

On the point from the right hon. Member for Aberdeen South, we do not think the theme of the new clause is particularly important in this part of the Bill. It is important, of course, that the aim of Great British Energy is to be part of what will deliver cheaper bills for all, and efficiency, but it is only part of the story. Of course, in the election campaign we made it clear that across Government—yes, through Great British Energy, but also through a series of other measures, including our reforms to planning and including a lot of areas on which I am working closely with his colleagues in the Scottish Government to expedite progress—we will deliver cheaper bills.

The right hon. Gentleman must acknowledge, despite his not supporting Great British Energy so far—I hope that he and his colleagues will change their minds when the Bill comes back—that on this point it is in fact an important vehicle. [Interruption.] He looks as if he does not agree with what I said. He did not vote for the Bill on Second Reading, so I took it from that that he did not support it. It is important that he recognises that Great British Energy has a really important part to play in delivering what I have set out. His colleagues in the Scottish Government certainly think so, which is why we have been working so closely together on the matter.

[Stephen Flynn]

I am sure that the Minister, as an esteemed and well-versed parliamentarian, will understand that the voting system in this House means that should a Member choose not to vote in favour of something, that does not mean that they are against it, as he is outlining. I would hate for him to inadvertently suggest to the public that something is the case when it is not the case. As he knows, I of course welcome the set-up of GB Energy, but what I want to see is the scrutiny that the new clause would obviously provide.

[Michael Shanks]

I am delighted to hear the right hon. Gentleman’s wholehearted support for Great British Energy. That is fantastic. I did not know that, so that is wonderful, and I thank him for that great support. It has really cheered my whole day, in fact, that I now have his support. Things can only get better, as we say.

On the right hon. Gentleman’s specific point about efficiency measures, we are already taking a number of steps on that matter in other areas. For example, our warm homes plan will transform homes across the country, making energy in individual homes cleaner and cheaper to run. We announced a local grants programme to support that. Of course, that does not apply in Scotland, where such work is devolved. I think the Scottish Government could probably do more in this policy area. The Scottish Government have made significant budget cuts to projects—£133 million was taken out of energy efficiency measures in 2022 and 2023—so I think work could be done across the board on the matter.

On the point about updating Parliament, it is really important that we are talking about a publicly owned energy company. It will be independent of Government, but of course it will be responsible to Parliament in the way that any other independent companies wholly owned by the Secretary of State are. A copy of the strategic priorities will be laid before Parliament. Any directions given to Great British Energy by the Secretary of State will be laid before Parliament. Of course, there are already several other mechanisms that the right hon. Member for Aberdeen South, as an extremely well-versed parliamentarian—far more so than I am—knows he can avail himself of.

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[Michael Shanks]

The hon. Member for South Cambridgeshire has rightly and passionately outlined the scandal of people living in cold homes and poorly insulated homes. She is right that it is an absolute scandal.

[Stephen Flynn]

The Minister is being generous with his time, as always. It is a scandal that people are in cold homes. Why is he supportive of the Government taking away the winter fuel allowance?

[Michael Shanks]

The right hon. Gentleman is combining two different things there.

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[Andrew Bowie]

I do not disagree entirely with the hon. Lady. I think we should be aiming to reduce the cost to taxpayers, and that investing in new cleaner technologies, including nuclear, will see energy bills fall in the long run—so why not have that as one of the objects of the company in the Bill? The Bill states that the objects of Great British Energy will be

“the production, distribution, storage and supply of clean energy…the reduction of greenhouse gas emissions from energy produced from 15 fossil fuels…improvements in energy efficiency, and…measures for ensuring the security of the supply of energy.”

There is not one mention of reducing consumers’ bills. Surely we want to enshrine that in the legislation, if that is indeed one of the aims of the creation of this company.

My amendment 12 would include the necessity to present

“a projection of how Great British Energy’s activities are likely to affect consumer energy bills over the following five years.”

Transparency and accountability should be key to the operation of GB Energy, particularly when the investments and activities that the organisation undertakes have a potential impact on household bills for every family in this country. Thank you for allowing me to speak to the amendment, Dr Huq; I do so to ensure that the Bill makes provision for GB Energy to be held accountable on its aim to reduce energy bills for households.

It is in the best interests of GB Energy and of the British public that the company have a clear directive to ensure, through investment in clean energy technology, that the cost of household energy is reduced. Labour MPs made clear the intention of GB Energy to reduce bills—indeed, they campaigned extensively on the £300 reduction—so I hope that they will support amendment 12, which would support them in achieving that goal, along with including provisions on accountability and transparency to the public on the overall impact of GB Energy’s investments on consumer bills.

[Stephen Flynn]

I rise to support amendment 24, which is broadly similar to the shadow Minister’s amendment 11. I am intrigued by the discussion that we have had, various aspects of which appeared to disagree with evidence we have heard.

First, the hon. Member for Sheffield Hallam, if I picked her up correctly, made great play of the fact that GB Energy will reduce costs. Yet just a couple of days ago, each and every one of us was in the room with the chair of GB Energy, who was very clear that reducing bills

“is not the scope of Great British Energy”.––[Official Report, Great British Energy Public Bill Committee, 8 October 2024; c. 6, Q5.]

We can all watch the footage online, and we can all read Hansard.

Secondly, the hon. Member for Na h-Eileanan an Iar made the argument that the £300 promise was not actually a promise. Which is it? Will it or will it not reduce costs?

[Olivia Blake]

I think the right hon. Member is purposely misunderstanding my comments. It is obvious: is the cost of cheap, green energy lower or higher than the costs that we have seen in the oil, gas and coal markets? It is as simple as that. Is it cheaper? Yes, it is. Doing things like Great British Energy will help produce more cheaper, cleaner, greener energy.

[Stephen Flynn]

The hon. Lady misunderstands my point. I do not disagree with that; in fact, I would like to see the Government go further and separate the price of electricity from the price of gas as they promised. That is one of the reasons why the Tories allowed people’s energy costs to soar, irrespective of their narrative about extenuating circumstances far outwith all our control. The point that the hon. Member for Sheffield Hallam made, quite clearly, was that GB Energy would reduce costs. Juergen Maier, the chair, said that that was not the scope of GB Energy. Which is it? The two things cannot be true at exactly the same time. We cannot say that something is going to happen and then say that GB Energy is not going to do it.

The crux of all this is that the public have expectations that GB Energy will reduce their energy bills by £300. Government Members can argue that that was not the promise; if that was not the promise, they were very quiet about it when they let the public believe that during the election campaign. If the public believe that, the Government need to deliver on the commitment that they made, and they should learn a lesson. The Conservatives made promise after promise after promise, and they failed to deliver when it came to energy. [Interruption.] Does the Minister wish to intervene?

[Michael Shanks]

I am very happy to. The right hon. Member talks about promises in an election campaign. He may distance himself from some of the promises that his Holyrood colleagues make—at least at the moment, until he makes his move—but it is important to say that, time and again, his own party made promises in its 17 years in power. We have committed to lowering bills, and as I will outline in a minute, we will continue to commit to that. GB Energy is the vehicle for doing that. I am delighted that he has pledged support for it today. That, along with all the Government’s policies, is how we will reduce bills in the long term.

Perhaps the right hon. Member should take a bit of a lesson from us about promises in election campaigns and how to win them, which is not to promise to set up a publicly owned energy company in Scotland and still not have done so 15 years after it was announced. We are doing it now within 100 days.

[Stephen Flynn]

I admire the Minister’s attempt to compare GB Energy, as supposedly a producer and generator of energy, with an organisation that could have sold electricity—

[Michael Shanks]

Could have! It did not do anything.

[Stephen Flynn]

Of course it did not do anything, because the capital was not there to do that. If it had existed under the price shock that the Tories brought in for all of us, it would not have been able to function, in the same way that so many others in the private sector were not able to function. The Minister is trying to equate two things that are not comparable. When he rises to his feet, as he seems very keen to, perhaps he will confirm, first, when bills will fall by £300, and secondly—as he failed to do the other day—when they will come down at all.

Before the Minister interrupted so pleasantly, I was pointing out to Government Members that the Conservatives made promises on energy that they failed to deliver. The public have high expectations—so get on and deliver.

[Michael Shanks]

We will not support the amendments tabled by the shadow Minister or that of the right hon. Member for Aberdeen South, but it is important to say why. As several of my hon. Friends have made clear, putting specific figures into a Bill is not what any Parliament does, but it is important to set out the objects, purpose and vision of GB Energy, as it will play a crucial role in bringing down bills in the long term and preventing the price spikes that we and our constituents still face.

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[Michael Shanks]

On the financial point, the Bill is an enabling mechanism, like a number of other pieces of legislation, including the UK Infrastructure Bank Act 2023, which the hon. Lady’s party introduced in government to allow the Secretary of State to give additional funding to companies. We said throughout the election that we would reduce energy bills, and we stand by that, but we cannot flick a switch. The idea that some Members have put forward that somehow, after 14 years of chaos from the Conservative party, a Government can come in and, within 100 days, turn everything around overnight is simply and deliberately disingenuous. Conservative Members take no responsibility for the actions of the previous Government.

We are putting in place as quickly as possible the basis for delivering energy security in the long term and removing volatility from our energy market, so that we can deliver cheaper bills for everyone in the long term. We made no pledge during the election that we would do it in 100 days, a year or two years, because we know fine well that that commitment will take time. But it is the right journey for us to be on, and it is right that we have started by building the energy resilience we need in the system.

[Stephen Flynn]

I do not think that my Commons colleagues and I would suggest that the Government should have reduced energy bills within 100 days, but, my goodness, they have just gone up by 10%. The Minister says that it will not happen within a year or two years, so I would be keen, as would the public, to know broadly when he expects energy bills to come down. I do not say that from an angry position; I want the public to have a bit of clarity about his objectives.

[Michael Shanks]

It is an important point, and I take it in the spirit in which the right hon. Gentleman says he intends it, but nobody is in a position to say what will happen to bills on a particular date. They will start to come down as our exposure to more expensive forms of energy is reduced, but the price cap has already increased because we continue to be exposed to those international markets, and there are actions taken by the previous Government that will continue as we move into the winter. We are doing everything we can to turn that around as quickly as possible.

The right hon. Gentleman knows as well as anyone that at the next election we will absolutely be judged on this and on a whole series of commitments that we have made, as any party is judged on its commitments in elections. We stand by that. We are doing everything we possibly can to deliver the change that is necessary. It will bring down bills in the long term. It will be difficult— I am not suggesting that it will not—but it is a commitment that we have made and it is one that we will work towards.