Paying Polluters: UN Report

Earl Russell Excerpts

Monday 22nd April 2024 Lords Chamber

[Lord Callanan (Con)]

I thank the noble Baroness for her question. I cannot comment on cases that are currently ongoing, but we will certainly bear her comments in mind when we consider our policy on this matter.

[Earl Russell (LD)]

My Lords, with fossil fuel and mining industries already having won more than $100 billion in awards and at least 175 treaty-based ISDS cases closed or pending that are directly related to environmental measures, does the Minister agree that foreign investors are using the dispute settlement process to seek exorbitant compensation from states that seek to strengthen their environmental protection? What actions are the Government taking with partners and allies on the international stage to try to find solutions to these problems?

[Lord Callanan (Con)]

As the noble Earl is probably aware, there are discussions in the OECD at the moment about the use of these clauses. As I said, we are responsible for the ones that we have signed, recognised and arbitrated against, and we very carefully ensure that these clauses protect our right to regulate in these circumstances on energy and climate change matters. The success of that has meant that we have seen no successful claims against the UK.

Offshore Petroleum Licensing Bill

Earl Russell Excerpts

2nd reading
Tuesday 26th March 2024 Lords Chamber

[Earl Russell (LD)]

My Lords, like the noble Baroness, Lady Jones, I will try not to be too boring and go on too long. I will also try not to damage any animals, either living or extinct, during my speech. On these Benches, we will oppose this Bill. I notice that, as in the other place, the opposition parties here are united in opposing it.

If the Bill passes, it will be remembered for two things: being mostly pointless and being needlessly politically divisive. The noble Lord, Lord Lennie, said that it is a straightforward Bill. The noble Baroness, Lady Young, said that its only virtue is that it is brief. The length of the Bill reflects any usefulness that flows from its consequences. The Bill does what it claims—somebody said this, but I am not sure who—but sadly what it does is damaging.

I venture to suggest that the Bill is not about energy security at all; instead, it is much more about performance politics and the need for political security on the Benches opposite. The clue to the whole Bill is contained in the first four words: “Duty to invite applications”. I want the House to note that this is not a duty to grant any applications—at all at any point. It is entirely possible that the Bill will be passed and enacted for not one more single North Sea licence ever to be granted again. The Bill is barely longer than a Private Member’s Bill. Who knew that the answer to all our energy security needs lay in a little over 250 words?

The Government have made grand claims that the Bill will provide energy security and protect jobs, and that it is more environmentally friendly than importing LPG. As the noble Lord, Lord Lennie, said, the Energy Secretary in the other place also claimed that it would lower energy bills, but that was quickly retracted. In truth, the Bill achieves none of these things.

I was interested in the story the noble Lord, Lord Lennie, told about the lunch where the Bill was supposedly cooked up over a few glasses of wine as a skewer to pin the opposition down on a political wedge and divisive issue. To my mind, the Government have created a heffalump trap for themselves.

The Government also argue that the Bill provides energy security. Fundamentally, it will make no difference at all, in my mind, as NSTA already has the power to grant licences and has done so almost every year since it was set up. NSTA itself, at its own board meeting, said that it did not want or require the powers contained in the Bill. Therefore, the Bill undermines the independence of the organisation that the Government set up to deal with granting new licences. As Alok Sharma said in the other place, the Bill, as drafted, is “something of a distraction”, and NSTA’s ability to grant new licences will not change materially because of it.

The oil and gas is all owned by private companies and is sold, as people have said, on the global markets. The Government have no say or control over where it is sold or to whom. As has been discussed, Global Witness has argued that up to 80% of that goes on to the international market and does not come in any way to the UK. It has been estimated that the gas supply created will be the equivalent of just four days on average per year. This is hardly going to provide us with energy security in the future. I do not believe that the Bill will do anything for energy security or to reduce bills.

The Government have made a series of arguments about securing jobs in the North Sea. It is undoubtedly true that North Sea oil is in decline, as everyone across this House has agreed and the Minister himself has noted. To my mind, the only way to protect jobs is through a real and meaningful plan, investment and a shift to a green economy, but this Bill does not do any of those things. I want to be clear that we on these Benches believe in a just transition. We recognise, fundamentally, the importance of protecting the jobs involved in this industry—between 30,000 and 200,000. We have heard different numbers, but I do not think we should argue about numbers. We should be respectful to all those who work in this industry, and I think the last thing they want is us having petty political arguments about the future of their jobs.

I welcome the contribution of the noble Lord, Lord Bruce, with his knowledge and experience of this industry. I welcome his basic message that these people want to be part of the future and do not want us arguing about their jobs. They want us to work together to create a transition for the North Sea towards a green economy, which is the only future they have. All of us need to find ways that we can do that. As the noble Baroness, Lady Hayman, said, new licences will not protect industry or workers to secure that just transition. For that to happen, there need to be allocated funds and plans, but, again, the Bill does not do that. As the noble Lord, Lord Bruce, said, they know what they want, and they want to be part of the future, so it is a shame that this Bill does nothing to secure or provide that future for these people. I honestly wish that it did, as not a single extra penny of taxpayer revenue will be allocated to the transition as a direct result of this Bill.

Three-quarters of all the oil and gas companies that operate in the North Sea do not invest a penny in UK renewables. Why do we allow them to have licences but not require them to invest in the transition? The tests to attain those licences are, in the words of the noble Baroness, Lady Boycott, “impossible to fail”, or, in the words of the noble Baroness, Lady Hayman, “unfailable”. The importing of LPG is not a fair equivalence, when, as the Minister knows, a lot of our oil comes through the pipelines from Norway. The consequences of these tests are all negative, and they are damaging for our reputation abroad and our standing on the world stage.

I welcome the £30 billion investment in the low-carbon economy, mentioned by the Minister. I thank the Conservatives for halving our CO₂ emissions; they are now at the lowest levels since 1837. What a tremendous achievement this Government have made, and I am grateful for it. However, at a time when they should be basking in the warm glow of their achievements, the Government come forward with a politically divisive Bill. It is a shame; we should be leading the world, not having arguments at home.

We freely recognise that, under net zero, we will need some oil and gas, not just for our energy but for industrial and other processes. As the noble Lord, Lord Lilley, says, it is a huge challenge, and we need to phase out demand for fossil fuels—I completely agree with him there. The war in Ukraine has had damaging impacts on energy prices, and the Government have spent some £70 billion supporting bill payers. I welcome that, but it is money we could have put into the green economy. We cannot continue going round the mulberry bush and investing in old energies; this money should be going into the energy of the future.

I welcome the contributions about the need for spatial plans and the need to protect marine protection areas. These are important issues raised in this Bill that need to be discussed. We will have an opportunity to discuss, through amendments, how we balance these protections with our need to do different things with our seabed.

As the right reverend Prelate the Bishop of Norwich said, the Bill is damaging to our international reputation. It will make it harder for us to secure the investment that we need in our green industries going forward. I call on the Government to accept Alok Sharma’s amendment which was tabled in the other place and which will, I think, be tabled here. It is the one that the Minister in the other place said the Government might be prepared to consider. If the Government are going to be doing this anyway, why not put it in the Bill and give the signal to industry that this is their intention? We are here to provide certainty to industry, so let us put it in the Bill.

We really have to leave fossil fuels in the ground. We have to wean ourselves off these things that are killing our planet. Alternatives do exist; the transition will be difficult and painful, but we must make that journey and seize the nettle. We have no choice. We need to work together as politicians to make sure that the transition happens and that it is a just one. Drilling for more oil is like offering an extra duvet to someone in the middle of a burning building. Rishi Sunak has said that he wants to max out North Sea oil.

The Bill will achieve nothing and will weaken our climate commitments. It sows division and weakens our international reputation. It makes the UK look like a riskier place to invest, just when we need that investment so that we can transition. That is why the Bill is so damaging. It does nothing but send out a signal that the Government’s policy on the environment is not clear, consistent or dependable, and, as a result of that, that the UK is not as safe a place as it should be to invest in the energy needs of the future. That is a bad message.

My party is committed to boosting renewable energy and increasing funding for wind, solar, marine power and tidal schemes. We will also enact an emergency programme to insulate all British homes by 2030, cutting emissions and fuel bills and ending fuel poverty.

Strategy and Policy Statement for Energy Policy in Great Britain

Earl Russell Excerpts

Monday 25th March 2024 Lords Chamber

[Lord Naseby (Con)]

My Lords, I welcome the speech from my noble friend and congratulate him on his dedication to this challenging industry. When one looks at the background to the document we have today, it is just over 10 years ago that the concept of a strategy and policy statement was introduced by the Act in 2013—and here we are now. We now have it, and the vehicle is to be this organisation, the NESO—I do not know exactly how to pronounce it.

It would be helpful for colleagues in the House if we had some indication of what the costs will be when NESO is actually established, as the sphere of influence it has to cover is massive—its responsibilities go right across electricity, gas and hydrogen—and it is no bad thing in life to know, before you start something, what the cost is likely to be. That at least provides you with criteria.

It is fortunate, or unfortunate, depending on one’s viewpoint—I had the privilege of serving on the Public Accounts Committee in the other place for some 12 years, as well as on the Select Committee on energy—that the National Audit Office published a report titled Decarbonising Home Heating on 18 March, precisely a week ago. Thankfully, I managed to pick it up. The summary of its investigations are, in effect, the first solid piece of evidence we have had in any depth on the particular area of home heating. We are talking about 28 million homes, which is a huge market, and the emissions that come from burning natural gas to heat homes. Reducing emissions from heating homes is a key component of the Government’s overall target of achieving net zero greenhouse gas emissions by 2050, and they have printed that here.

The report says, in paragraph 3 of its summary, that

“growing the supply chain for heat pumps to a minimum market capacity of 600,000 heat pump installations per year by 2028”

is the Government’s target. In the last 12 months, they have achieved 55,000, which seems like slow progress, quite frankly. Furthermore, it says that the Government are

“developing the evidence base to inform strategic decisions in 2026 on the future role of hydrogen in home heating”.

It seems to me that we should have done a fair bit of that work already, but apparently we have not.

Paragraph 4 says:

“The government also committed £6.6 billion from 2021-22 to 2024-25 for schemes to improve energy efficiency … This includes the Boiler Upgrade Scheme”,


which, equally, does not appear to be doing too well.

The report goes through a series of other points, with which I will not tire colleagues here, but it is well worth reading. I will, however, highlight points on some of the key findings. First, the NAO has established that some aspects of the

“plans to test the feasibility of hydrogen for home heating are behind schedule or have been cancelled, meaning it will have less evidence to make decisions in 2026 on the role of hydrogen”.

We know that British Gas has a trial going, and there is a small government trial, but I find that rather worrying. Secondly in relation to hydrogen,

“Ongoing uncertainty over the role of hydrogen could slow the progress of decarbonising home heating”.


The report goes on to say that the Government are thinking of using local government to play a role in establishing what to do about decarbonising home heating. As someone who had the privilege of being a leader of a local authority for some years, I do not think this is something, with a subject that is so important, that will be hugely welcomed by local government, which has more than enough on its plate.

As someone who comes from the world of advertising and marketing, I found it worrying to read, in paragraph 14 of the report, that the department has developed a campaign to promote heat pumps, but it does not seem to be getting through:

“public awareness is low: around 30% of respondents to a government survey in summer 2023 had never heard, or hardly knew anything, about the need to change the way homes are heated”.

This is all very worrying; we do not seem to be making the progress that we ought to be making.

There are a series of eight recommendations in the report; I will not go through them all, but I will pick out a couple. On page 12 of the summary—and remember this is the NAO, which is not prone to stating anything positive unless it feels quite strongly about it— recommendation c states that the department should:

“Consider whether it is possible to provide more certainty on the role of hydrogen in home heating before 2026 to help industry plan and invest”.


There are then some suggestions as to how that could be done.

Additionally, I have one other further area, and that is small nuclear reactors, which were not covered in the NAO report. It is worrying that we have known for at least three years that Rolls-Royce is geared up to do small nuclear reactors, and we have given it good money to work on them, but we are still not at a point where anybody is being appointed. There is a list of six potential people involved; some of them are not even ready now to do a proper pitch, and the rumour is that the pitch will be put back further because some of them are not ready. This slippage, all the way through, symbolises this market, and it is extremely worrying. It is possibly one of the most key areas of our industry and our lives when we talk about home heating.

I do not envy my noble friend on the Front Bench the job, and I thank him for his work so far. There is an awful long way to go, and even though His Majesty’s Government are not the vehicle for doing the communication, we must make sure there is better communication with the general public and that we should go forward together to meet the main policy objective in a way that is based on good science and good experience.

[Earl Russell (LD)]

My Lords, this is the first use of the power to designate a strategy and policy statement—SPS—for energy policy in Great Britain, which was introduced in the Energy Act 2013. The changes in that Act included the powers to establish a National Energy System Operator a new independent public corporation responsible for planning Britain’s electricity and gas networks and operating the electricity system. NESO will be required to have regard to the strategic priorities set out in the SPS and new duties for Ofgem, which are all contained in this statement. Can the Minister confirm that NESO will be set up this summer?

All that this statement does is to bring together existing policy and restate that policy in one coherent paper; the statement

“does not introduce new roles or duties for bodies in the sector, it is comprised of only existing government policy, commitments and targets”.

We broadly welcome the statement, but my first question is: why has it taken 11 years, since the Energy Act 2013, to get where we are today? It is 11 years late; we should have been revising the second edition by now. While key elements are welcome, there is much that remains unclear or subject to regular change going forward. I do not think this statement should last five years without review. Will the Government commit to more regular reviews, even an annual review, as we continue our process of transition?

The relationship between the National Energy System Operator and Ofgem is still undefined in this strategy, so when will this be defined? Will the Minister agree to give a further review as soon as NESO is set in place, so that its powers, functions and relationships can be fully scrutinised? The strategy document says that NESO has a duty to notify the Secretary of State if, at any time,

“it thinks that a policy outcome in the SPS is not...achievable”,

as has been stated by other speakers. What are the interim arrangements for the period until NESO is up and running if it decides that there are policies that are not achievable?

I worry also that Ofgem is not accountable to Parliament at the appropriate level of scrutiny for the new powers that are given to it under this policy. There seem to be some tensions for Ofgem between net-zero targets and promoting economic growth as set out in its core functions.

While I welcome the continued commitment to reach net zero, and I am thankful for all the work the Government have done, the Government need to do more at pace. There are key areas where progress is lagging, such as: the development of long-term energy storage; meeting targets, particularly for power generation to be decarbonised by 2030; and the ability to deliver the nuclear plan for a 24 gigawatt deployment by 2050, when many projects are running behind or are late. There are questions about whether we are still on track for offshore wind, following the collapse of the offshore wind auction this year. There are internal disagreements over the clean heat mechanism, and a year of delays means that the target for implementing heat pumps is in question, as we have heard. Emission targets for 2030 look unlikely to be met, the sixth carbon budget is behind schedule and the planned energy efficiency upgrade of ensuring that all properties achieve a rating of band C by 2030 does not have clear mechanisms to take it forward.

The Government are missing their own 2030 fuel poverty targets by 90%; we need a fair and just transition to net zero, yet fuel poverty is completely missing from this statement. I could not find the words in the document and neither does it make any mention of the Government’s own fuel poverty strategy. There is also no mention of the social energy tariff, and the rollout of smart meters is behind. We need more renewables, and we to do more to improve home insulation at scale and at pace. These matters need to be at the heart of our future energy polices, and it feels like they have been forgotten in these documents.

The mention of the EU-UK Trade and Cooperation Agreement is very welcome, as we are spending £1 billion extra a year on our energy bills. When do the Government think the strategic spatial energy plan will be ready? The policy states that the Government expect an investment of around £100 billion in the energy sector by 2030. Does the Minister agree that recent changes in government policy direction, particularly in relation to electric vehicles as well as on other matters, have caused market uncertainty and damaged investor confidence? What actions are the Government taking to ensure the long-term clarity and stability of our environmental policy?

Home Insulation: Health and Mortality Rates

Earl Russell Excerpts

Tuesday 19th March 2024 Lords Chamber

[Lord Callanan (Con)]

I just explained in the Answer to the noble Baroness that as part of all our energy efficiency schemes, we do evaluations afterwards of the effect on people’s bills and health. We are spending over £12 billion over this Parliament and the next on insulation schemes, because we know they make a crucial difference.

[Earl Russell (LD)]

My Lords, it feels as if energy conservation is still the last thought and never the first. We have some of the highest domestic energy bills in Europe and some of the worst-insulated homes, yet we fail adequately to improve home insulation. Meanwhile, we continue to import gas from countries such as Russia. When will the Government do the right thing for bill payers and the environment and set more ambitious home installation targets, particularly for social rented homes?

[Lord Callanan (Con)]

I disagree with the noble Earl; the figures he quoted are not correct, and we are improving home insulation standards. To give one figure, in 2010, 17% of homes in the UK were EPCC or above; now the figure is almost 50%, so we are making progress. We have a lot more to do. We have the oldest housing stock in Europe, but we are making progress.

Advanced Modular Reactors: Criticality Tests

Earl Russell Excerpts

Tuesday 19th March 2024 Lords Chamber

[Lord Callanan (Con)]

I understand the noble Lord’s concern, and I know the close interest he takes in this; I share his concerns. I know he had a very productive meeting with the Secretary of State and Minister Bowie to discuss these matters, and he has written following that. A letter on that is being drafted and will come to him shortly.

[Earl Russell (LD)]

My Lords, following the transfer of the intellectual property and personnel in the U-battery project to foreign control, are the Government confident that enough action and support are being provided to UK-based projects to develop advanced modular reactors to prevent them also falling under foreign ownership?

[Lord Callanan (Con)]

Of course there is always more that we can do to support these projects, but we are supporting them with massive financial resources and research and development designs. It is always concerning if foreign companies are taking control of some of these projects, but we nevertheless have a really good scheme of projects in the UK and we are supporting them.

Gas-fired Power Stations

Earl Russell Excerpts

Thursday 14th March 2024 Lords Chamber

[Baroness Blake of Leeds (Lab)]

My Lords, it is fair to say that there has been some scratching of heads as to why exactly this announcement was deemed necessary. There is general agreement that gas-fired power stations will be needed during the transition to net zero. However, there is disquiet at the emphasis on this aspect of policy rather than on alternative approaches such as ramping up investment in renewables.

If new-build plants are needed, it is essential that they are capable of converting to hydrogen or are connected to functioning carbon capture and storage. May I seek assurance from the Minister that this is indeed the Government’s view? Can he also inform us what estimate has been made of how many of these new gas plants will be needed, when they will come on stream and how long reliance on them is expected to last?

[Earl Russell (LD)]

My Lords, this announcement comes out of the blue and fuels doubts that this Government are on track to meet their own target of fully decarbonising power generation by 2035. So far, instead of progress we have seen repeated failures to prepare; the offshore wind auction collapse; an effective ban on onshore wind; nuclear power projects delayed; slow or no progress on battery storage, hydro-generation and tidal projects; and a lack of investment in overall grid capacity. I ask the Minister to confirm that the Government are still committed to fully decarbonising power generation by 2035 and that these will be the last ever carbon-based power generation plants to be built in the UK.

[The Parliamentary Under-Secretary of State, Department for Energy Security and Net Zero (Lord Callanan)]

I thank the noble Baroness and the noble Earl for their questions, especially the noble Baroness, although I am slightly perplexed. If she thinks that this announcement was unnecessary, why did the Labour Party ask for it to be repeated in this House today, given that it makes the same point? However, essentially, I accept the point that the noble Baroness has made. We think that this capacity is necessary; it is all about security of supply. The estimate is that in 2035, it might account for only 1% to 2% of all of the capacity that might be required. We are looking forward a decade, with uncertain projections of what the demand will be, how much renewable capacity will be available and even what the weather conditions will be like that far ahead. So, this is sensible contingency planning.

On the questions from the noble Earl, we very much hope and expect that these will be hydrogen ready or capable of having CCUS fitted. Indeed, some gas plants are already taking part in the CCUS cluster sequencing process. This announcement is entirely compatible with our net-zero obligations. Indeed, this is net zero: there will be some emissions but those can be abated, eliminated or captured, or the power stations can run on hydrogen.

We are very proud of our record. We have one of the fastest rates of decarbonisation in the G20, and we announced before Christmas that we have reduced our emissions by 50%. We have the five biggest wind turbine farms in Europe, and that capacity continues to be rolled out. This is sensible contingency planning to make sure that the lights stay on at those times when, as we all know happen, the wind is not blowing and the sun is not shining.

Biomass: Power Generation

Earl Russell Excerpts

Wednesday 13th March 2024 Lords Chamber

[Lord Callanan (Con)]

My noble friend is right. It is a complicated subject and should not be the subject of easy sloganeering or campaigning. A number of different issues are involved. What the primary wood is used for is, of course, a matter for the US authorities and for the Canadians.

[Earl Russell (LD)]

My Lords, yesterday at Oral Questions, the Minister— the noble Lord, Lord Benyon—said:

“Biomass is a perfectly legitimate renewable energy source if the wood that is being used is a renewable and sustainable harvest”.—[Official Report, 12/3/24; col. 1897.]


My question is simple: can the Minister—the noble Lord, Lord Callanan—confirm exactly what steps the UK is taking to verify beyond doubt that no old-growth timber is being cut and burnt at Drax?

[Lord Callanan (Con)]

Of course I agree absolutely with the statement made by my noble friend. As I said, I have spoken to Ofgem, which is investigating. It is its job to enforce against these criteria. My officials are in touch with those in British Columbia for further discussions. However, there are many perfectly legitimate reasons why timber would be removed from old-growth forests—for instance, for firebreaks, diseased wood, et cetera. This is a complicated issue. Drax is an important part of the UK’s energy security. Let us make sure that it does this sustainably and abides by the rules before we rush to judgment.

Energy Bills Discount Scheme (Amendment) Regulations 2024

Earl Russell Excerpts

Tuesday 12th March 2024 Grand Committee

[Earl Russell (LD)]

My Lords, this statutory instrument sets out to enable the Secretary of State to put down a date after which heat networks may no longer be able to make an application for support under the energy bills discount scheme. The EBDS was established in April 2022 to provide non-domestic energy consumers with a discount on their higher gas and electricity bills. It also gives discounts to domestic consumers on communal heat networks, who, unlike households using a normal mains electricity or gas supply, were not supported under the terms of the energy price guarantee.

Under the terms of the EBDS, qualifying heat suppliers—QHSs—are required to apply for support, which they must then pass on to the domestic customer in the form of energy bill discounts. The Minister in the other place noted:

“Without that support, domestic customers on heat networks would have been exposed to the full impact of high wholesale market prices. The support that we have provided through the EBDS regulations is estimated to be worth £180 million in total, and £1,200 for the average … customer”.—[Official Report, Commons, Fifth Delegated Legislation Committee, 5/3/24; col. 3.]


This is, if you like, the architecture that was set up at pace and at scale to deal with, as the Minister here has said, the consequences of the invasion of Ukraine, its impact on rising energy costs here and the impact of that on the cost of living.

I want to be clear that any comments I make on this statutory instrument are set against a background of welcoming all the measures that the Government put in place, at scale and at pace, to deal with those consequences in response to what was a crisis. That being said, I have some concerns about this instrument and its impacts; I am also concerned about the way in which this scheme was set up, particularly for people on communal heat networks. I also note that this instrument has been noted as being of interest by the Secondary Legislation Scrutiny Committee and the Joint Committee on Statutory Instruments.

The Government’s position is an administrative one in wanting to bring this scheme to an end. I fully understand that. The legislation, as originally drafted, means in effect that there is no end date, so, although the scheme will end, people will be able to continue to make applications for ever. That clearly has to end, so I have no disagreement there.

The intended end date is 31 March 2024. As the Minister said, there will be a two-week extension for those people who could not reasonably be expected to make an application because they hit the deadline. From a purely administrative point of view, this all seems fine and reasonable, but, from a customer’s point of view, there are impacts here. The customers we are talking about are those who are vulnerable and living in social housing.

The way in which the system was set up was not brilliant. I do not think that the operators of communal heat networks should have been required to apply in order to get the discounts in the first place. There have also been problems with pass-through to customers living in communal heat networks.

I want to ask a couple of questions before I come to an end. The end date is the end of this month, so it is literally the blink of an eye away. Why the urgency here? The Explanatory Notes say that the Government are still getting 20 applications a month. Is there the possibility of extending this?

I am concerned about what the Government are doing to inform the end-users and beneficiaries of these schemes. My thinking is that one of the reasons why this scheme was set up the way it was is that the Government do not have proper databases on the number of communal heat networks that exist, let alone the people in them. I understand why, in response to a crisis and not having those databases, the Government went down the route they did. However, I feel that this situation is likely to repeated in future. I request that the Minister and his department think again about trying to set up databases, so that the next time we are in this position, the discount on the cost of energy for people living in communal heat networks can come directly to them. That would be one point.

The numbers may not be that great, but there are still 60,000 individuals from vulnerable groups, as both committees have noticed. The cost per individual is likely to be £1,200. These are vulnerable people, and this is a big loss to them.

I note that the Government say that people can still seek redress through the ombudsman and the court system. However, that is quite slow and blunt, and applies only where owners of communal heat networks have made an application and received the funding but not passed it on to the end-user. I could find nothing in the information provided, but does the Minister know how many of those particular cases there are and what action the Government will be taking to support residents in those cases? Clearly, that is a criminal case—I am sorry if I am wrong and happy to be corrected—as the owner of a network has a discount but has failed to pass it on.

That is pretty much it from me. My real concern is that these are vulnerable people, and I encourage the Minister to do everything he can to make sure that they are supported. My real point is about learning, so that, the next time we are in this position, we can make sure that people in these situations get a better deal.

[Lord Lennie (Lab)]

My Lords, as we have heard, this instrument enables the Secretary of State to set a date after which heat networks can no longer apply for support under the energy bills discount scheme. Under the scheme, qualifying heat suppliers are required—that is the word used—to apply for support, which they then pass on to their domestic customers in the form of energy bill discounts. The Department for Energy Security and Net Zero has said that not all QHSs have applied for EBDS support. Although the scheme itself will end on 31 March, there is currently no effective date for applications to be received. The Minister has set this out—so far, so tidy.

DESNZ has estimated that 3,000 qualifying heat suppliers may not have applied for the EBDS, but we do not actually know, because there was no register of the qualifying heat suppliers. We do not know how many there are or where they are, so we cannot follow them all up. That is one of the problems with the scheme that was set up. However, we estimate that up to 60,000 domestic customers may lose out on support as a result of qualifying heat suppliers not applying for a scheme discount, as required.

As we have heard from the noble Earl, Lord Russell, the noble Lord, Lord Vaux, and the Minister the value of lost discounts is about £1,200 a customer. That loss will disproportionately affect disadvantaged groups, such as the elderly and ethnic minorities—people who have been described as “skint little people”—who are significantly more likely to be on heat networks. Could the Minister set out what specific initiatives have been undertaken to encourage take-up of EBDS bids by heat networks? Have they made inroads into identifying where the qualifying heat suppliers are, so that they can be targeted and encouraged to apply? Which initiatives have been successful, if any, and how recently? Has it been an evolving, slow process?

The proposal in this instrument makes administrative sense, rather than leaving open an estimated total liability of £6 million for not closing the scheme to new applicants. Administrative sense is one side of this equation; the other side is the customers, and it seems less considered from their perspective. The Joint Committee on Statutory Instruments and His Majesty’s Opposition initially expressed concern that an obligation was being placed on intermediaries without any means of enforcing it. It is all very well requiring someone to do something when, if they fail to do it, nothing happens except that the individuals can take them to court or to the ombudsman.

How many times has that happened during the course of the scheme? I suspect it is very few times, if any. Can the Minister tell us whether any such initiatives have been taken? Essentially, this is about a vulnerable customer being required to take their landlord to court to get a subsidy for their gas bill. The chances of that happening are fairly remote, but we will no doubt hear from the Minister on that. This means that companies and organisations that have failed to apply for, or pass on, discounts have simply got away with it. Who knows the truth of that? We do not know who they are.

As I indicated, we support the closing of the scheme and the ending date for applications, but we are unhappy with the way the scheme has been allowed to drift into oblivion with no forfeit for those who should have acted on it.

Heat Pumps

Earl Russell Excerpts

Wednesday 6th March 2024 Lords Chamber

Asked by

[Earl Russell]

To ask His Majesty’s Government whether it remains their policy for 600,000 heat pumps to be installed per year by 2028; and, if so, what actions they are taking to achieve this goal.

[The Parliamentary Under-Secretary of State, Department for Energy Security and Net Zero (Lord Callanan) (Con)]

My Lords, the Government remain fully committed to supporting the transition to low-carbon heating; this includes the aim to grow the market to 600,000 heat pump installations per year by 2028, and a range of measures are supporting this market growth. From 2025, we also expect that heat pumps will become the primary heating technology for new homes, under the future homes standard.

[Earl Russell (LD)]

My Lords, I thank the Minister for his Answer to my Question. There have been numerous rumours in the press that the Government might be about to scrap the so-called boiler tax. Is this indeed the case and, if so, how will the Government continue to work with industry to make sure that this important target is met?

[Lord Callanan (Con)]

Of course there is no such things as a boiler tax and therefore it is impossible to scrap it; but if the noble Earl is asking about the clean heat market mechanism—which is not a boiler tax—we will be implementing it because it is an essential part of meeting that 600,000 target and, of course, our carbon budgets.

Nuclear Decommissioning Authority (Pension Scheme Amendment) Regulations 2024

Earl Russell Excerpts

Tuesday 13th February 2024 Grand Committee

However, I found my noble friend’s proposals entirely convincing and I think this is a very sensible SI.

[Earl Russell (LD)]

I thank the Minister for introducing these regulations. There is little information available other than the statutory instrument and the accompanying Explanatory Memorandum. I also note that this has not been picked up in any way by the Secondary Legislation Scrutiny Committee. I do not have many overriding concerns or objections, and I understand that it is likely to be the same for others speaking today. I will pick up the points that the noble Lord made, particularly in relation to the small numbers who have been excluded under paragraph 7.3.

These measures will bring NDA pensions into line with wider public sector pensions in a move from a final salary scheme to a career average scheme. The proposals have been agreed with the unions and include provisions for retirement on full pension before the state pension age. I welcome that.

As is customary, I will ask the Minister a few questions. Most of them relate to the same issue, namely that of timing—the cause of the timing and whether that delay has had any impact on the proposals being put forward today. I am just not certain, so I will ask questions around those issues.

As the noble Lord said, this was originally completed way back in 2017 and the consultation was published in May 2018. The Explanatory Memorandum blames a lack of parliamentary time for this almost seven-year delay in bringing this into law. Can it really be correct that it has taken a full six or seven years to find a few minutes of parliamentary time to carry these small changes forward? Maybe it is, but I seek clarification on that point.

Considering these proposals are now late, is there any impact as a result? The report says that the unions supported the proposals. Has their position changed since they were originally consulted? Has the Minister or his officials gone back to the unions to ask for an update on their position? Was the last time they were consulted back in 2017? I seek clarification on that, because it was not clear from the information provided.

The Explanatory Memorandum states that the proposals will save an estimated £200 million over the term of the scheme. Is that figure still correct following the delay? Is it the same amount? Has there been any loss of public funding from the delay in bringing these proposals forward? Are there any changes to the long-term savings?

Obviously, we are dealing with the Nuclear Decommissioning Authority. If any issues of people being exposed to radiation that were not known about came to light after these proposals came forward, would there be any changes in the pensions available to them as a result of the changes to the scheme?

Paragraph 10.3 of the Explanatory Memorandum mentions that most of the responses were against the proposals, but there is very little information. I understand that there were not many objections and that these were small numbers, but there was no information in the pack about the reasons for the objections. Could I ask for a sentence on that?

Paragraph 11.2 says that these proposals will impact 8,000 staff and that consultations will begin on 1 April. Is that still the same number? Has it changed over time?

I note the Government brought forward their civil nuclear road map last month, which involves a big expansion of our civil nuclear programme. Is the reason why this been delayed for seven or eight years and then rushed forward related—

[Lord Callanan (Con)]

No.

[Earl Russell (LD)]

No? Okay, that is fine. Finally, how will the Minister monitor the implementation of the changes? Will that be reported anywhere?

[Lord Lennie (Lab)]

My Lords, this instrument enacts the Nuclear Decommissioning Authority pension scheme, based on the review of public sector pension schemes by my noble friend Lord Hutton in 2011. This resulted in the Public Sector Pensions Act, which enabled the majority of public sector pensions to move from final salary to career average revalued earnings schemes. About 8,000 workers are affected as a result of this instrument. We have nothing to complain about on the scheme, but the process has raised a few questions, as the noble Lord, Lord Young, and the noble Earl, Lord Russell, have pointed out. I would like these to be addressed.

During the consultation, many respondents raised concerns that the proposed definitions and the application of the proposed powers were insufficiently clear or too broad. Many sought assurances that the powers would be restricted to implementing the reform agreed with their national trade unions. Furthermore, respondents requested either member or trade union and/or trustee engagement prior to the use of any of the powers. Could the Minister respond to those concerns?

The trustees of the CNPP and MEG-ESPS asked that they be given sufficient time to review the final rule amendments, indicating that about 12 months would have been appropriate. The response to the consultation says that, in the light of this specific request, as much notice as possible would be given to the trustees and members prior to implementation. We now know that the implementation date will be 1 April 2024. Can the Minister tell us when the Government notified the trustees of the changes? Did they deem this sufficient for their purposes of consultation and informing their members?

The noble Lord, Lord Young, raised a concern regarding the reform of the pensions for NDA employees who are covered by the Electricity (Protected Persons) (Scotland) Pension Regulations, which were not included in the public consultation. There are very few of them, as the noble Lord and the information provided say. How many are there? If a change is to be brought in for the persons in Scotland, presumably another full consultation will take place to precede any further regulations.

Finally, to repeat the question of the noble Lord, Lord Young, and the noble Earl, Lord Russell, the decision to introduce the scheme was taken on 28 December. There has been plenty of parliamentary time for this half-hour debate to take place, so could we have the actual reason why it was delayed so long?