Great British Energy Bill (Fifth sitting)

Debate between Stephen Flynn and Michael Shanks

Committee stage
Tuesday 15th October 2024 Public Bill Committees

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

It is a pleasure to serve under your chairship, Dr Huq, and to see Committee members again. Having started the sitting with contributions from four Scottish MPs, we have gone through the greatest hits of Scottish politics, from the Thatcher Government to independence, Scotland’s wind and everything in between. It was a good way to start the Committee this morning.

Amendment 3 misunderstands not only the potential of Great British Energy, but how investments are already made in renewable projects in this country. The right hon. Member for Aberdeen South made a legitimate argument about the revenues from oil and gas over the past 60 years but, as hon. Members have already said, in more recent times and much closer to home, the legacy of the future of our energy story has already been squandered. What could have been almost £1 billion for our wealth fund to invest in future projects or in the inheritance of the country has already been spent to plug day-to-day spending. There is a danger that in such a short space of time we will repeat that oil and gas legacy in Scotland.

Great British Energy will invest in all four nations of the United Kingdom, and we are working closely with the devolved nations to make that a reality. Investments by Great British Energy will be made on the basis of the individual project, with decisions made at arm’s length from Government by an independent company. Clearly, with its leading role in renewables, Scotland will benefit from a great many of those investments, creating skilled, well-paid jobs in the process, with a genuine long-term investment in Scotland. That public investment is about crowding in private investment as well—and that is where I think the amendment misunderstands how the projects are delivered.

As much as the right hon. Gentleman and his colleagues might talk about how it is Scotland’s wind and Scotland’s waves, the reality is that without having crowded in investment through a publicly owned energy company such as Great British Energy, every penny that has already been spent on constructing projects in Scotland to generate electricity from our natural resources has gone offshore to private companies and foreign publicly owned companies. We greatly welcome that investment in Scotland and in the UK, which will continue in the years to come, but the purpose of the Bill is to ensure that a publicly owned energy company, owned by our taxpayers, can have a stake as well. The Bill, through Great British Energy, will allow some of that wealth to be retained for the benefit of our citizens.

It is our intention that the profits generated by Great British Energy will either provide a direct return to the Exchequer, benefiting the UK taxpayer, or be channelled specifically into measures that benefit the public, such as investment in more clean energy infrastructure. It is about benefiting people right across the United Kingdom, recognising that the investment came in the first place from taxpayers right across the United Kingdom. For those reasons, the Government will not support the right hon. Member’s amendment 3.

[Stephen Flynn]

I am incredibly surprised at the stance that the Minister has adopted. I jest, of course: it is no more than I expected. However, I do take issue with some of the points that have been raised.

First, it does a great disservice to this Parliament and to the supposed Union of equals to try to diminish the status of Scotland as a nation and equate it to other areas within the UK. Secondly, I agree to an extent with the notion put across by the hon. Member for Na h-Eileanan an Iar that energy is not constrained by borders, but under the watch of multiple United Kingdom Governments, energy-rich Scotland has been left with people living in fuel poverty. We have missed out repeatedly on the opportunities afforded to many other sovereign nations that have had control over their energy.

The hon. Gentleman also mentioned Equinor. The reality is that Equinor can advance its cause globally and seek to grow globally because it has benefited from its nation’s own natural resources, which is something that Scotland has never been able to do. The supine nature of Labour Members in Scotland continues, and people in Scotland will remember that in the days, weeks and years to come.

Conservative and Labour Members have referred to Scotland and to the supposed squandering of resources. How dare they, when Scotland’s Parliament has had to face up to 14 years of austerity from this place?

[Michael Shanks]

That has nothing to do with it.

Great British Energy Bill (Third sitting)

Debate between Stephen Flynn and Michael Shanks

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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[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.

Great British Energy Bill (Fourth sitting)

Debate between Stephen Flynn and Michael Shanks

Committee stage
Thursday 10th October 2024 Public Bill Committees

[Michael Shanks]

I will start where the brilliant speech of my hon. Friend the Member for Sheffield Hallam left off. It is a bit rich for the Opposition to talk about fixing the issue with jobs in the renewables sector that they failed to fix for 14 years. First, I take the issue that the hon. Member for West Aberdeenshire and Kincardine raised about jobs in Aberdeen, because it is an extremely important subject, but I think he confuses two things— I would suggest perhaps deliberately. Juergen Maier clearly said on Tuesday that the headquarters of Great British Energy in Aberdeen will have jobs in the hundreds, perhaps expanding in the years ahead, but that the jobs created by Great British Energy are much more than the headquarters. We have always said that it is the investments that Great British Energy makes that will invest in jobs in Aberdeen, in the north-east of Scotland and right across the UK, in the tens of thousands. That is important to separate out.

The hon. Gentleman’s point about the transition is really important, both to the Bill and more broadly. He is right: long before this Labour Government were elected, there was a transition under way in the north-east of Scotland. It is a declining mature basin. It is important that we now take seriously what that transition looks like, and that will require tens of thousands of new, skilled and—crucially, for the north-east of Scotland in particular—well-paid jobs. That is what we are attempting to do with Great British Energy but, as my hon. Friend the Member for Sheffield Hallam says, Great British Energy is not the only vehicle for it. We have deliberately said that we will set out an industrial strategy, because we are not a Government who think that manufacturing jobs in this country and an industrial strategy are an irrelevance. Actually, they are critical to our economic future.

[Stephen Flynn (Aberdeen South) (SNP)]

The Minister has tempted me to have a look at what Juergen Maier said. I asked him very clearly how many jobs would be in Aberdeen. His response was quite clear:

“It will be in the hundreds; it may eventually be 1,000 or more in the HQ.”––[Official Report, Great British Energy Public Bill Committee, 8 October 2024; c. 6, Q4.]

The HQ is, of course, Aberdeen. That would run contrary to what the Minister has just said.

[Michael Shanks]

That is not what I said at all. What I said a moment ago is exactly the same, which is that in the short term—in the start-up phase of the company—there will be a few hundred people. That is exactly what Juergen Maier said. In future, our aim—particularly with the right hon. Gentleman’s support, which I was not expecting at the start of today—is that it will grow even further, into a much bigger company. As a result, we expect that there could very well be thousands of jobs in the headquarters in Aberdeen. I am not ruling anything out or limiting the potential of Great British Energy, and I hope that the right hon. Gentleman is not either. I make this point again, for the benefit of the right hon. Gentleman: critically, that is not the limit of the jobs that will be created by Great British Energy. It is important to recognise that the jobs potential will come from the investments and partnerships that it makes.

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[Stephen Flynn]

I beg to move amendment 4, in clause 5, page 3, line 10, leave out subsection (3) and insert—

“(3) A statement under subsection (1) or a revised or replacement statement under subsection (2) will not take effect unless a draft has been laid before and approved by a resolution of each House of Parliament.”

Before I begin my remarks, it is probably best that I correct the record on behalf of the shadow Minister. It is not just in relation to Great British Energy that I have expressed some positivity; I did once watch “The Great British Bake Off” as well.

That aside, it was put to me by some members of the Labour party back in Scotland that I was not supportive of GB Energy, because I did not go through the Lobby with the Government some weeks ago, as I think the Minister referred to in his remarks today. The reason I did not go through the Lobby with the Government that day was that I was not entirely sure what GB Energy was going to do.

In fact, based on the information before us in this Bill, I am still not entirely sure what GB Energy is going to do in practice; it seems to be all things to all people. In principle, perhaps that is not a bad thing, and those who gave evidence to us put forward a number of positive arguments of the necessity for that to be the case, whether in relation to production, generation, the supply of energy or the community projects that Members have spoken about at length.

The purpose of my amendment is to ensure that the House of Commons is fully apprised of exactly what the Secretary of State intends GB Energy to achieve. That will be hugely important, particularly in the context of Scotland, because much of what has been discussed in relation to GB Energy, and the opportunities that may or may not exist, will ultimately be intrinsically linked to the success of projects in Scotland, where the majority of the UK’s renewable energy resource sits. Indeed, I think the director of the Confederation of British Industry said that it is a “golden ticket” to economic growth for the entire UK. Imagine what an independent Scotland could achieve in that context.

The point of the amendment is to ensure that the House of Commons is able to fully appraise the direction that the Secretary of State wishes to take. That might cause Labour Members some consternation, because they have just been elected with a massive majority and may well be able to set out their strategic vision, but they need to remember that they will not be in government forever. They will at some point be replaced—I am not entirely sure who will replace them; there is a decent suggestion that it will probably be by the Lib Dems rather than by the Conservatives, based on the leadership candidates.

However, the amendment would ensure that future parliamentarians and future groups of politicians will be able to apply the same scrutiny that I expect of Government today. I think it is good practice. In years to come, should the Conservative party, the Lib Dems or perhaps some other nefarious party come to control the UK state, they should not be able to do anything contrary to the wishes of Parliament without its having the ability to shape the future of what will hopefully be a successful intervention into the energy market, albeit one with very small amounts of money to drive forward the multiple goals that it seeks to achieve.

[Michael Shanks]

The right hon. Gentleman tempts me into discussing both independence and the future of the Conservative party, but for your sake, Sir Roger, I will not go into either, although I hope there will be such opportunities in the future. I will make two points in response to the amendment, and there is a broader point, which I will stay off for the moment, that we will return to in the next series of amendments around the role of the devolved Administrations—

[Stephen Flynn]

Governments.

[Michael Shanks]

The devolved Administrations in terms of the Governments—I thank the right hon. Gentleman.

The first thing to say is that the statement of strategic priorities cannot overrule the objectives in the Bill. If an incoming Government—I will not say “nefarious” or otherwise—were seeking to use Great British Energy for a whole other purpose, they would not be able to, because the legislation sets out exactly what it will be used for, and that will be in the articles of association. Those objects set the overarching framework for Great British Energy’s activities and it is right that this framework is in legislation passed by Parliament and debated here today in clause 3.

Were we to move to a point where we required parliamentary approval of the statement of strategic priorities, which is only designed to provide direction in the priorities that the Government sets for the company, we would create unnecessary burdens on the company. Going back to the points in the Lib Dem amendments from earlier, I am concerned that, rather than Great British Energy getting on with delivering, we would end up in a constant cycle in which people add various things—I think someone said “baubles” earlier on, but I am not sure that I will continue that metaphor—into the statement of strategic priorities that would take away from it actually delivering the objects that we will hopefully pass in this Bill.

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[Stephen Flynn]

I thank the hon. Gentleman for his intervention, although I am a bit disappointed that he regards seeking the consent of Scotland’s nationally elected Parliament as a blocking amendment. That is quite a Westminster mentality that he has adopted already in the few short weeks that he has been here—perhaps that is an indication of where his party intends to go in the months and years to come. Notwithstanding that, because I do not believe it was a necessary or helpful intervention in that context, I would be very keen to hear from the Minister on why he does not believe he should seek the consent of Scotland’s Parliament.

[Michael Shanks]

These are very important amendments, as I alluded to when discussing the last group of amendments. Since I became a Minister, I have worked very hard to reset the relationship. Indeed, the Prime Minister’s first official visit was, deliberately, to Scotland. He has set a clear expectation that all Ministers should be engaging with not just the Scottish Government but the Welsh Government and the Administration in Northern Ireland. That is particularly important in the energy space, because our priorities are broadly aligned. There are slight differences in targets and projects, but we all want to move in the same direction across all Governments of the United Kingdom, which is beneficial.

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[Michael Shanks]

I agree with the broad arc of what the right hon. Gentleman has just said, but there is no mechanism for Great British Energy to impose anything on the Scottish Parliament. The whole point I was making is that it is important to recognise that Great British Energy has to operate within whatever framework any Scottish Government set for it.

[Stephen Flynn]

Forgive me, Sir Roger; I think the Minister and I were in agreement there. The point I was making was that a future Secretary of State may seek to change the framework of GB Energy, and that would cause me concern in that regard. However, as it stands, I am content with the Minister’s comments and will not seek to press the amendment to a vote. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.