Gas Boilers and Heaters: Replacement Programme

Lord Callanan Excerpts

Tuesday 12th January 2021 Lords Chamber

[Lord Howell of Guildford (Con) [V]]

My Lords, I beg leave to ask the Question standing in my name on the Order Paper. I declare my interests as set out in the register.

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)]

We are currently developing different pathways to decarbonise heat, and as such it is too soon to estimate these costs accurately. However, the climate change committee estimates that the investment required to decarbonise the entire economy and meet net zero is less than 1% of GDP until 2050. Ensuring that the costs of transition are allocated fairly is a priority, and we will publish a call for evidence on affordability and fairness by April.

[Lord Howell of Guildford (Con) [V]]

My Lords, I thank the Minister for that reply. These estimates are interesting but, according to the Government’s excellent energy White Paper, there are 23 million existing homes attached to the gas supply grid. While it clearly makes sense to equip newly built homes with hydrogen or heat pumps or other technologies, is not the cost of retrofitting all existing homes—estimated by a government research paper at anything between £2,500 and £8,000, or more, per dwelling—and possibly having to replace large parts of the gas delivery grid as well, clearly going to be absolutely astronomical, whether it falls on consumers or taxpayers? Given the tiny contribution, at best, that this whole project could conceivably make to taking over all global emissions growth, is this really the wisest or most effective use of our national resources in combating worldwide climate change?

[Lord Callanan (Con)]

I understand the point my noble friend is making, but we do of course have a legal commitment and obligation to reach net zero emissions by 2050. Of course, 19% of total UK greenhouse gas emissions come from buildings, so we clearly need to take action in this sector. We also marry that up with an ambitious international agenda. We are hosting COP 26 this year and we will seek to persuade our international partners to follow this agenda as well.

[Baroness Blower (Lab) [V]]

My Lords, there are certainly home owners who live in flats on estates that were possibly originally built as social housing, with communal gas boilers and integrated estate-wide heating and hot water systems. Individual solutions will not be possible in these circumstances. Will the Minister say whether any thought is being given to such circumstances to quantify the problem and, if so, what support will be available to replace or upgrade such systems?

[Lord Callanan (Con)]

I point the noble Baroness to the social housing decarbonisation fund, which will deliver transformational change by upgrading a significant amount of the social housing stock that is currently below EPC up to that standard.

[Lord McCrea of Magherafelt and Cookstown (DUP) [V]]

In recognising the Government’s desire to reduce greenhouse gas emissions throughout the United Kingdom, one must also recognise the need to ensure that the transition is fair to householders and businesses. Therefore, can the Minister tell the House what detailed study has been done to identify any additional costs there will be to run any new heating system? How can we ensure that those living in poverty will be able to bear that financial burden and keep their families warm?

[Lord Callanan (Con)]

The noble Lord is right that we need to make sure that the change is affordable. We have a number of schemes to help low-income families. We have the ECO scheme and the green homes grant scheme, both of which considerably incentivise low-income families to make these changes.

[Lord Cormack (Con) [V]]

My Lords, may I press my noble friend on this point, bearing in mind that this will be government-enforced expenditure and will place a significant strain on many household budgets? Following this Question Time, will he discuss with the Chancellor the phasing out of all the means-testing of the winter fuel allowance and its replacement at an appropriate time with a boiler grant, especially to all those in receipt of universal credit?

[Lord Callanan (Con)]

We are committed to keeping the winter fuel payment to ensure that older people have the security and dignity they deserve, but we do have boiler grants, as my noble friend referred to them, through the green homes grant that are specifically designed and targeted at poorer members of society.

[Lord Oates (LD) [V]]

My Lords, I declare my interests as set out in the register. We need to ensure that green hydrogen is the predominant form of hydrogen used in the gas grid and elsewhere. To that end, what consideration have the Government given to using contracts for difference to drive down costs and encourage innovation in the production of green hydrogen, as we did so successfully for offshore wind during the coalition Government?

[Lord Callanan (Con)]

I understand that the noble Lord is very keen on green hydrogen and I agree with him on these points, but we are committed to consult on the preferred hydrogen business model in quarter 2 of 2021 to finalise a decision next year. Alongside this we will bring forward further details in 2021 on the revenue mechanisms that will be available to support these proposed business models.

[Baroness Neville-Rolfe (Con) [V]]

My Lords, planning for the phasing out of all use of gas boilers is, to my mind, a very bold step, especially when the nature of the possible replacements is unclear. What steps are the Government taking to ensure that the energy and construction industries will have the capacity to cope with this change? For example, I understand that there is currently capacity to install only 30,000 heat pumps a year, whereas the need is estimated to be more than 600,000.

[Lord Callanan (Con)]

My noble friend makes some very good points, but the forthcoming heat and building strategy will set out the direction of travel for decarbonising heat. We are working closely with the industry to create the jobs needed to meet net zero. We recently carried out research. There will be enough skilled heat pump installers to deliver our ambitions. We recently published that supply chain research, which shows that heat pump manufacturers are able to meet a significant ramp up in demand.

[Lord Thurlow (CB) [V]]

My Lords, some 1.75 million boilers are installed every year. I understand that the cost of the hardware alone, using an average price, is in excess of £3 billion annually. Most manufacturers are based abroad and the profits are being sucked out of the UK economy, principally into euros. We must expect these numbers to increase dramatically as fossil fuels are abandoned. Will the Minister please explain what the Government are doing to recapture more of this huge business by encouraging British technologies and British businesses to reclaim this important and growing sector of our economy?

[Lord Callanan (Con)]

The noble Lord is right. We have a number of incentive schemes. I referred to the ECO scheme and the green homes grant scheme. We want to be one of the world leaders in this field and we are working with manufacturers to advance the technology to bring it down to affordable levels to enable its wide- spread use in the UK.

[Lord Grantchester (Lab) [V]]

The recent energy White Paper stated that

“we will assess the case for encouraging, or requiring, new gas boilers to be readily convertible to hydrogen”.

Having recently experienced on 30 December the seizing up of a system boiler, I would like to know what assessment is needed for the Government to require hydrogen-ready boilers to be quoted alongside the conventional, and for the price premium for hydrogen-ready to be reduced progressively towards a conventional price if the consumer or bill payer is unaware of the requirement for all new boilers to be hydrogen-ready by 2025. Is this in the heat and building strategy that the Government are still preparing to publish?

[Lord Callanan (Con)]

We are supporting the development of prototype hydrogen-ready boilers that are not available at the moment through the Hy4Heat programme, which is due to conclude this year. Subject to its findings we plan to consult later this year to seek views from stakeholders on the role that hydrogen-ready appliances will play in the transition to net zero.

[Lord McNally (LD) [V]]

My Lords, the Minister referred to ground source heat pumps. How realistic are they as a green energy solution in terms of construction and cost?

[Lord Callanan (Con)]

They are one option. Air source heat pumps are another option and hydrogen a third. Domestic retrofit of community energy systems will also play a role. We will need to use a number of different technologies, but ground source heat pumps are certainly one possible technology.

[Lord Best (CB) [V]]

My Lords, it is clear that retrofitting all UK homes with low-carbon heating is a long way off. Very many households will depend on heating by electricity, which is at present much more expensive than its fossil fuel alternatives. Will the Minister confirm that the Treasury’s net zero review is looking at rebalancing the cost of electricity to make it more affordable, not least for those otherwise facing deep fuel poverty?

[Lord Callanan (Con)]

The Treasury’s net zero review, to which the noble Lord referred, is considering how the transition to net zero will be funded. Alongside this we are publishing a call for evidence by April to begin a strategic dialogue between government, consumers and industry on affordability and fairness. We have also expanded government support schemes, which I referred to earlier, to those on low incomes, who are likely to benefit from them or to be at risk of fuel poverty. We will respond to our consultation on fuel poverty in due course.

[The Deputy Speaker (The Earl of Kinnoull) (Non-Afl)]

My Lords, the time allowed for this Question has elapsed and accordingly we moved to the third Oral Question.

Green Homes Grant Scheme

Lord Callanan Excerpts

Wednesday 6th January 2021 Lords Chamber

[Lord Oates]

To ask Her Majesty’s Government what assessment they have made of the effectiveness of the Green Homes Grant scheme.

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)]

The green homes grant voucher scheme opened for applications in September 2020 and so far has received over 58,000 applications. There will be an independent evaluation of the processes and effectiveness of the voucher scheme, including a comprehensive analysis of scheme outcomes and evidence collected from scheme applicants and other stakeholders. This will begin this month and will run until 2023.

[Lord Oates (LD) [V]]

My Lords, given that the figures the Minister has given us show that the scheme has achieved less than 10% of its original target, does he recognise that no programme to upgrade the 28 million homes that require it will be successful if it is designed as a short-term stimulus measure, as this scheme was? Rather than downgrading quality requirements, will the Government therefore commit to a long-term sustained scheme over five or 10 years, which would incentivise the building industry to develop the skills base and create the jobs required to deliver such a major programme?

[Lord Callanan (Con)]

We are not downgrading the quality requirements, but the noble Lord makes a good point. We have had a number of these schemes over the years and we will look at what we can do in the future as well.

[Baroness Young of Old Scone (Lab) [V]]

My Lords, the noble Lord, Lord Oates, made a very good point: this needs to be a long-term scheme that gives the supply chain confidence to invest in and expand the workforce and create new green jobs. Can the Minister assure me that, in collecting the data that he says will come from the applicants, he will look at the assessment needed not only of the scheme’s contribution to carbon reduction but of its contribution to reducing fuel poverty in less well-off households? Can he tell us when we will see what proportion of households whose applications have been approved are in receipt of benefits and what proportion are landlords whose applications will benefit their tenants?

[Lord Callanan (Con)]

We have already listened to feedback and announced the extension of the scheme until March 2022. We will always listen to feedback. I gave the figures earlier for the number of applications that have been received. In due course, we will a provide further breakdown of those figures.

[Lord Mann (Non-Afl)]

The number of contractors engaged with the scheme appears, not least in the north and the Midlands, to be remarkably low. What will the Government do to incentivise more contractors so that issues such as the replacement of oil heating systems can be delivered through this scheme? There appear to be no contractors doing it anywhere across the whole of the north and the Midlands.

[Lord Callanan (Con)]

More than 1,300 companies are registered with TrustMark so far, of which 765 are registered with the scheme, including many businesses that operate nationally with substantial capacity to carry out work across the country, but the noble Lord makes a good point. We are well aware that we need to get more contractors and installers signed up to the scheme. We are actively working with TrustMark and the certification bodies to do that, but we need to ensure that the essential quality standards are met.

[Lord Naseby (Con) [V]]

My Lords, is my noble friend aware that he has made an excellent start with the Green Homes Grant scheme? I spoke to former constituents. However, just one element causes a problem: the need for an urgent review of the smart meter installation programme, particularly for those who want to take up this green project and have an old smart meter, which means they cannot switch suppliers. Will my noble friend look at this small handicap to those taking part?

[Lord Callanan (Con)]

I thank my noble friend for his question. The smart meter scheme is not part of the Green Homes Grant scheme. It is a separate scheme, for which I also have responsibility, but I would be happy to talk to him separately about the issues he raises.

[Lord Stunell (LD) [V]]

On Monday, the Minister announced that building contractors delivering the Green Homes Grant scheme no longer need to be registered with TrustMark, be certified with PAS or be MCS compliant, thus lowering the standard of entry for those undertaking work. This comes at a time when there is also an acute shortage of professional retrofit assessors, who are essential to check and sign off completed projects. That leaves owner-occupiers who are trying to do the right thing and make their homes energy efficient increasingly exposed to undetected bad workmanship or fraud. Exactly how does the Minister propose to increase the number of assessors, safeguard consumers and prevent this vital scheme getting a reputation for dodgy work and becoming a wild west waste of money?

[Lord Callanan (Con)]

We absolutely want to ensure that that is not the case. The noble Lord is incorrect. Main contractors still need to be registered with TrustMark. They also need PAS certification or be on a pathway to it. We are working with contractors to make sure that more are registered. We are also talking to the certification bodies. I have met a number of them to ensure that more contractors are signed up to the scheme. The noble Lord is absolutely right that the quality of the scheme and the standards of work carried out are of priority importance and we will make sure that that happens.

[Lord Moynihan (Con)]

My Lords, a nationally-focused, directly-funded scheme for installing energy efficiency measures and efficient heating for fuel-poor homeowners and private renters exists in Wales and Scotland. The recently introduced Green Homes Grant scheme obviously provides funding—albeit less generous—in England through local authorities but not through a single, efficient, focused nationwide scheme with high quality standards and an easy customer journey. Will the Minister look to improve the delivery mechanisms of the Green Homes Grant scheme to match the clarity of a single, focused nationwide initiative as part of the review process that he has just announced?

[Lord Callanan (Con)]

I understand the noble Lord’s point, but we specifically designed the local authority delivery element of the scheme to directly target owner-occupiers in private and social rented sectors but also to allow local authorities themselves to be responsible for the design of those schemes so that they more closely matched the requirements of their area. If we had a national instruction on how to do it, I think that would cause other problems. On balance, it is probably best to allow local authorities to decide how it works best in their areas.

[Lord Best (CB) [V]]

My Lords, I declare my interest as president of the Sustainable Energy Association. Bearing in mind that there have been delays in issuing the vouchers for Green Homes Grant spending, which are leading to a likely underspend in this financial year, can the Minister confirm that the Government will carry over this phase 1 underspend beyond the end of March into phase 2 spending, so that valuable funding support is not lost?

[Lord Callanan (Con)]

We announced the extension of the scheme until March 2022, as I am sure the noble Lord is aware. In the 2020 spending review, the Chancellor allocated over £1 billion to make public sector buildings and homes greener, including £320 million for this scheme in 2021-22.

[Lord Grantchester (Lab)]

With the initial plan for the Green Homes Grant to last only nine months now extended a further 12 months until March 2022, there must be doubts about the ambition of this scheme against the long-term challenge of making homes more energy efficient. With only 5.6% of applicants having had their applications approved and with only a single household receiving a voucher, can the Minister tell the House what success looks like for this scheme? For example, what maintenance of a set maximum response time for applicants will be achieved and how many of the 19 million homes EPC-rated D or worse will be improved through the scheme?

[Lord Callanan (Con)]

The noble Lord asks a lot of questions. I think his figures are incorrect. We had 58,000 applications and have issued almost 11,000 vouchers to those applicants. Another 11,000 are being processed and 35,000 have gone back to the applicants for further information or clarification of their quotes, et cetera. We keep all elements of the scheme under review. We announced the extension to March 2022 in response to the feedback we received from the noble Lord and others.

[Lord Foster of Bath (LD) [V]]

My Lords, the sector that will deliver home energy efficiency measures wants statutory targets, such as those for climate change, to give it confidence to invest in equipment and training. The Minister, Kwasi Kwarteng, in the other place has talked specifically of the benefits of statutory targets in driving action. Will the Government enact into legislation the targets for home energy efficiency they have already promised?

[Lord Callanan (Con)]

I cannot give the noble Lords a specific assurance on that. We keep all these matters under review.

[Lord Krebs (CB) [V]]

My Lords, I thank the Minister and his officials for a very helpful meeting in the autumn on this topic. Can he confirm that the original requirement for applicants to use vouchers for at least one primary measure, before becoming eligible for a secondary measure, has now been removed?

[Lord Callanan (Con)]

No. At present, we keep the primary and secondary elements of the scheme, because we think that is the best way of delivering the maximum carbon savings that I know the noble Lord is also keen on. We keep the scheme under constant review and listen to suggestions for improvements from him and others on how we can make it more effective. The noble Lord’s feedback is valuable, and I will bear it in mind.

[The Lord Speaker (Lord Fowler)]

My Lords, the time allowed for this Question has elapsed.

Corporate Insolvency and Governance Act 2020 (Coronavirus) (Suspension of Liability for Wrongful Trading and Extension of the Relevant Period) Regulations 2020

Lord Callanan Excerpts

Thursday 17th December 2020 Lords Chamber

Moved by

[Lord Callanan]

That the draft Regulations laid before the House on 25 November be approved.

Relevant documents: 37th Report from the Secondary Legislation Scrutiny Committee and 35th Report from the Joint Committee on Statutory Instruments (special attention drawn to the instrument).

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)]

My Lords, I think we all shared a sense of optimism last week when Margaret Keenan became the first person in the world to receive the Pfizer/BioNTech vaccine, administered at Coventry’s University Hospital. It gave us hope that, sooner or later, daily life for the majority may begin to return to some kind of normality. Until then, though, we continue to live with restrictions that are difficult for everyone but necessary to keep our citizens safe and make sure that the NHS is not overwhelmed. Today, all but a few areas of Great Britain are subject to restrictions put in place to limit the spread of the virus; the effect that this is having on many businesses, such as those in the retail and hospitality sectors, has been well documented.

The Government were swift to act and provide businesses with clarity and support when the impact of the pandemic was at its peak. Those companies that were worst hit were given every chance to survive and get through that period of uncertainty; I am grateful to everyone who contributed to the Corporate Insolvency and Governance Act. Businesses have benefited from a package of government support targeted at saving jobs and livelihoods, such as the furlough and job retention schemes, as well as billions of pounds in loans, rates relief and tax deferrals. However, until life returns to normal, we must recognise that the impact on businesses continues.

This instrument revives one of the measures introduced by the Corporate Insolvency and Governance Act 2020 and extends another measure. It revives the suspension of wrongful trading liability until 30 April and extends the flexibilities around the manner in which companies and other qualifying bodies can hold general meetings until 30 March. These measures, like others in that Act, are aimed at supporting directors in guiding their companies through the period in which business is being affected by the pandemic.

First, I shall deal with the temporary suspension of the wrongful trading provisions in the Insolvency Act, which expired on 30 September but which we propose to revive by this instrument. Noble Lords will be aware that wrongful trading is an action which may be taken by an insolvency officeholder, and can lead to a director being held personally liable for losses to a company’s creditors where it continues trading at a time when it is inevitable that it will enter formal insolvency proceedings. A successful action may lead to losses being recovered for the benefit of creditors but, more importantly, wrongful trading provisions have a vital role in preventing reckless insolvent trading in the first place. The threat of personal liability for directors is a strong deterrent to them causing companies to trade at their creditors’ risk. At the peak of the pandemic earlier this year, there were concerns that many would cause their companies to cease trading rather than risk personal liability in very uncertain trading conditions. They simply did not know what would happen or whether their companies could or would survive.

The temporary suspension of the wrongful trading provisions between 1 March and 30 September in the Corporate Insolvency and Governance Act allowed directors to discount the threat of personal liability for any worsening of their companies’ position during that period. It allowed them to take steps to save companies which would otherwise be viable but for the impact of the pandemic, without the concern that they would be penalised if things did not improve and the company had to enter insolvency proceedings. This then allowed them to access government support to continue trading, and therefore to save jobs and livelihoods.

I should say at this point that suspending wrongful trading does not give a free pass to directors and allow them to act irresponsibly. Other vital protections for creditors remain in place to protect them where a company is in an insolvent position, such as the director duties set out in the Companies Act, fraudulent trading or misfeasance actions under the Insolvency Act, or, ultimately, disqualification from acting as a company director.

At the end of September, many companies had returned to more normal levels of trading, so it was right that at that stage the protection given to creditors by the wrongful trading provisions should return. The suspension in the Corporate Insolvency and Governance Act was therefore allowed to expire on 30 September. Noble Lords will be well aware that since then, sadly, circumstances have worsened. A new wave of the virus has unfortunately meant further necessary restrictions being imposed across most of Great Britain. Directors again face uncertainty about future trading conditions; they need our support and reassurance that they can continue to trade and save companies that would be profitable but for the restrictions, without the fear of personal liability.

The Corporate Insolvency and Governance Act gave a power to make temporary changes to the effect of corporate insolvency legislation; this instrument uses that power to temporarily suspend the wrongful trading provisions again from 26 November until 30 April next year. This will give that reassurance to directors that they need not close viable companies solely because of uncertainty about their own position. It will help to save jobs, as well as contribute to the economic recovery. The suspension works by telling any court considering a wrongful trading action that it is to assume that a director is not to be held responsible for any worsening of the financial position of the company in the relevant period: 26 November 2020 to 30 April 2021. This was the approach that we used in the Act itself.

I am grateful for the report of the Joint Committee on Statutory Instruments, which addresses this specific point. It is important for directors to be absolutely certain that they will not face a wrongful trading action if they continue trading in uncertain circumstances, so if the assumption was in any way rebuttable this would not give them the reassurance they need when so much is at risk.

None of us can say for certain what will happen over the next few months, and the expiry date of 30 April 2021 will of course be kept under review. If, at some time before then, it becomes clear that the suspension has done its job in preventing companies entering insolvency proceedings unnecessarily, it will be removed. The protection for creditors will therefore return.

I move on to the measure on annual general meetings. The Corporate Insolvency and Governance Act also introduced temporary flexibilities around the manner in which companies and other qualifying bodies could hold general meetings. This is crucial to the operation of the UK’s strong corporate governance regime, which ensures that the boards of companies and other bodies are fully held to account by their members. This flexibility allows bodies to balance their constitutional arrangements with the prevailing coronavirus restrictions and, in doing so, safeguard the well-being of their shareholders and members.

Despite the fact that, in large part, the season for AGMs is now behind us, we know that around 80 large companies are still to hold annual general meetings between now and the end of March. That is excluding the multitude of smaller companies, charitable incorporated organisations and mutual societies which have similar obligations. The extension in these regulations until 30 March 2021 will give these bodies comfort that they can continue to convene these and other general meetings safely, while being consistent with their legal obligations.

I hope noble Lords will agree with many stakeholders that the two measures included in this instrument will provide much-needed reassurances to businesses in the critical trading period leading up to Christmas and beyond. I therefore commend these regulations to the House. I beg to move.

--- Later in debate ---

[Lord Callanan (Con)]

I thank the noble Lord, Lord Stevenson, and the noble Baronesses, Lady Bowles and Lady Altmann, for their valuable contributions. They are all veterans of the previous Act’s debates, and the points they raised very much reflect some of the concerns raised during those debates. They have also highlighted the importance of the measures and the necessity of doing all we can to extend them so that support for businesses can continue. Businesses have continued to face an exceptionally challenging time, with many of them unable to trade at full capacity due to the need to protect the population. These regulations provide the much-needed support for businesses to build on the foundations for economic recovery.

Picking up on the points raised by all three noble Lords, who rightly reflected the concerns of creditors, it is worth pointing out that the suspension of wrongful trading does not give a free pass to directors allowing them to act irresponsibly. This was a point made by the noble Baroness, Lady Bowles. Other vital protections for creditors remain in place to protect them when a company is in an insolvent position. These are the director duties set out in the Companies Act; the provisions of fraudulent trading; the provisions on misfeasance actions under the Insolvency Act; and, ultimately, disqualifications from acting as a company director.

The noble Baronesses, Lady Altmann and Lady Bowles, both raised the matter raised by the JCSI, and we are of course grateful for their input and for bringing it to the attention of the House. The suspension works by telling any court considering a wrongful trading action that it is to assume that a director is not to be held responsible for any worsening of the financial position of the company in the relevant period—and this is crucial—from 26 November to 30 April. This was the position we used in the Act itself. The purpose of the suspension is to prevent directors from otherwise putting viable companies into insolvency proceedings just because of the risk to them of personal liability. As I said in the introduction, I reassure all three noble Lords that this suspension will be kept under review while the restrictions remain in place, and we will consider using the power to end the suspension early if trading conditions change such that the suspension is no longer needed or no longer proportionate.

The noble Baroness, Lady Bowles, also raised the subject of further extensions, but I can reassure her the Government will extend only for as long as is necessary. The covering Act only allows for that, but we will of course keep this matter under close consideration. The suspension is related solely to the relevant period that I referred to.

The noble Baroness, Lady Bowles, and the noble Lord, Lord Stevenson, rightly raised the issue of what the noble Lord, Lord Stevenson, called the “lacuna” period and asked why the suspension of wrongful trading was not extended in the previous regulations laid on 24 September. At the time, even though social distancing and restrictions on social gatherings remained, directors had had seven months to access the package of help put forward by the Government, and some trading had returned to more normal levels. It was important at that time that protection for directors was reinstated. The suspension did not, in and of itself, remove any director’s responsibility continually to assess the company’s situation. We believe that things have changed since then; the uncertainty facing businesses has worsened again, and it is now right that the suspension should return, allowing directors every opportunity to help their companies survive the pandemic. This is matter of fine judgment, but we believe that we have the balance right.

The noble Lord, Lord Stevenson, also raised the issue of AGMs. We will be mandating that all AGMs can be held virtually in future, but we do recognise the value of holding physical AGMs. It is not appropriate to mandate that all meetings be held electronically. It is for companies to work with their members to establish their preferred way of working and holding meetings in future, to secure their consent and to make the requisite changes to their articles of association.

After all of those answers, I think I have addressed all the concerns raised, but let me reiterate: careful consideration has been given to extending these temporary measures, and the Government will, as I said, monitor the situation very closely before making any further decisions on how best to support businesses and representatives as the UK returns to normal. With that, I commend these regulations to the House.

Motion agreed.

Covid-19: Impact of No-deal Brexit on Vaccine Supplies

Lord Callanan Excerpts

Wednesday 16th December 2020 Lords Chamber

[Lord Bassam of Brighton (Lab) [V]]

My Lords, it is extremely concerning that the Government should contemplate no deal in two weeks’ time, in the middle of a pandemic, with the serious impact this could have on medical supplies and supplies of Covid-19 vaccines. How many Pfizer/BioNTech vaccines will be in the UK by 31 December? How many government ferries and RAF planes are on standby to bring Covid-19 vaccines into the UK in the event of no deal, and at what cost?

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)]

I think the noble Lord forgot to ask the main Question: I shall give him the Answer to that first and then go on to his supplementary. The UK has put in place a number of measures to facilitate trade with the EU beyond the end of the transition period and to avoid impact on vaccine supplies beyond 1 January. The Government have worked with Covid-19 vaccine suppliers to support them with robust contingency plans. If necessary, we will use alternative supply routes and Government-procured freight capacity in line with current government advice.

On his supplementary question, the noble Lord will understand that unfortunately I cannot set out details of commercial arrangements relating to vaccines at the present time, but I can reassure him that part of the commercial arrangements with vaccine developers is a requirement to ensure that vaccines are transported safely and securely to minimise the cost of damage.

[Lord Lancaster of Kimbolton (Con)]

My Lords, as we have just heard, and if press reports are to be believed, Royal Air Force planes are on standby to transport the Covid vaccine in the event of no deal—a perfectly reasonable thing to do under the military aid to the civil authorities rules. However, the rules are very clear that military assets can be used only if all commercial alternatives have been exhausted, so I seek reassurance from my noble friend that those commercial alternatives will be used first.

[Lord Callanan (Con)]

I welcome my noble friend to these Benches. He has acknowledged expertise in this area and, of course, he is quite right: commercial options will be used first, second and third, and the military only as a very last resort.

[Baroness Watkins of Tavistock (CB)]

My Lords, first, I congratulate the Government on procuring the vaccines so urgently needed. Each box contains 96 vials; each vial, five doses: a box is enough to vaccinate 480 people. The value is considerable and illicit drug dealers and criminals have never been more motivated to intercept or steal legal drugs, as the potential profit is far larger, at the moment, than those from heroin and cocaine. For this reason, I welcome the fact that we may have to use the military to ensure that vaccines are delivered safely in this transition period. Can the Minister assure the House that plans are sufficiently robust, in terms of security, to prevent theft?

[Lord Callanan (Con)]

As I said in my previous answer, the use of the military is very much a last resort. I am sure that the noble Baroness will understand that I cannot share details of security arrangements, but I can assure her that we have worked very closely with vaccine suppliers and others to ensure that shipments are properly protected and looked after.

[Lord Stevenson of Balmacara (Lab) [V]]

My Lords, will the Minister tell us a bit more about the contingency plans? Apparently, there is a Government-procured ferry on standby. We did not have much luck last time. Can he confirm that it is properly equipped to deal with the extreme refrigeration needed? Is there a backup to this contingency plan?

[Lord Callanan (Con)]

The noble Lord makes a very good point. I can assure him that there are a number of backup plans. We have worked very closely with the suppliers and we are confident that the cold supply chain will not cause any problems. Obviously, everybody is aware that this vaccine has to be transported at a temperature of minus 70 degrees, plus or minus 10 degrees centigrade, and the manufacturers have put in place proper supply units that are maintained at that cold temperature and can also be used for temporary storage.

[Baroness Ludford (LD) [V]]

My Lords, I am involved with the diabetes research charity JDRF. It has been in regular contact with the Department of Health and Social Care and insulin manufacturers, and has been reassured about the stockpiles of insulin being held. The main concern now is around replenishment of supply. We are already reading about freight movement difficulties and with, or especially without, a Brexit deal, this could well get worse after 1 January. Will the import of the Covid vaccine from January affect the replenishment of supply of essential medicines imported from the EU, such as insulin, and what plans have been put in place to prevent disruption?

[Lord Callanan (Con)]

I can reassure the noble Baroness that there will be no disruption to supply. We have put in place extensive measures to avoid any impact on the supply of essential medicines, in addition to the vaccine, beyond the end of the transition period. The Department of Health and Social Care has put a huge amount of planning work into this, so I think that her concerns are unfounded.

[Baroness Meacher (CB) [V]]

My Lords, considerable concerns have been expressed about the likelihood of shortages of medicines in the event of a no-deal Brexit. I understand that the Government have done a lot of analysis of the expected impact of no deal. Will the Minister place in the Library the results of that analysis with respect to shortages of medicines if we leave the EU without a trade deal?

[Lord Callanan (Con)]

As I just told the noble Baroness, Lady Ludford, we have put robust contingency arrangements in place; a huge amount of planning has gone into it and we are confident that there will be no disruption to medical supplies.

[Lord Roberts of Llandudno (LD) [V]]

The arrival last week of the vaccine from Belgium was greeted with great joy in the UK. We know also, for instance, that 98% of our consignments of insulin come from Germany and Denmark. We rely so much on other people and other nations. Can the Minister give me one instance of the benefit there will be for those who rely on medicines after we leave the European Union?

[Lord Callanan (Con)]

We co-operate on medicines supply with countries all over the world, not just in Europe. Those countries also rely on supplies from the United Kingdom, so we are confident that we will maintain good relations with other European and world nations and co-operate on these matters to our mutual benefit.

[Lord Mackenzie of Framwellgate (Non-Afl) [V]]

My Lords, the great disadvantage of the Pfizer/BioNTech vaccine is the requirement to store and transport it at low sub-zero temperatures; some other vaccines have much easier handling and storing requirements. Is this matter easily included in the specification, thereby making the end product far cheaper and easier to transport and administer?

[Lord Callanan (Con)]

As I said in previous answers, it is clearly a challenge to supply a vaccine that requires such careful handling, but Pfizer has years of proven experience: it has developed packaging and storage innovations for the vaccine, with specially designed temperature-controlled shippers using dry ice to maintain the temperature of minus 70 degrees, plus or minus 10 degrees centigrade.

[Lord Bilimoria (CB) [V]]

My Lords, we have the Pfizer/BioNTech vaccine available, with more than 137,000 people inoculated in the first week, and we hope to have the Oxford-AstraZeneca vaccine available soon, approved by the MHRA. In due course, when there is widespread availability of the vaccines, will the Minister look at getting businesses to work with the Government and the NHS to have vaccinations take place at large workplaces, including factories, under proper supervision, thus preventing disruption at work and speeding up the rollout of the vaccinations and saving lives?

[Lord Callanan (Con)]

This is a matter, of course, for the Department of Health and Social Care, but we will indeed want to work with businesses, as we have done on the supply of vaccines. We pay tribute to the work of the Vaccine Taskforce, which has done a tremendous job. We have 357 million doses of vaccines from seven leading candidates, some of which are manufactured in the UK and some abroad. We have worked very closely with business and we want to continue to do so in the future.

[The Lord Speaker (Lord Fowler)]

My Lords, all supplementary questions have been asked.

Energy White Paper

Lord Callanan Excerpts

Wednesday 16th December 2020 Lords Chamber

[Lord Oates (LD) [V]]

My Lords, I welcome the ambition and vision set out in the White Paper; however, as the Minister will be aware, ambition and vision are necessary but not sufficient conditions for success. What we need now is attention to detail and practical, credible implementation plans. Sadly, the White Paper lacks them.

First, while it rightly emphasises the need to secure a fair deal for consumers, the White Paper fails to set out credible means of doing so. Can the Minister tell us why the paper envisages the cost of decarbonising our energy system continuing to be piled on to electricity bills? It should be borne fairly across the economy, because placing the transition costs on bills is both highly regressive and counterproductive if we want, as the paper rightly suggests, to shift from gas use to electricity. Will the Government correct this omission and act to reduce electricity bills by shifting this burden?

Secondly, the White Paper places an emphasis on expanding offshore wind generation. I welcome that, but there is no reference in the Statement to onshore wind generation, one of the cheapest forms of generation available, and it is referred to only fleetingly in the paper. Can the Minister explain this?

Thirdly, nuclear continues as a government obsession, even though it is now ruinously expensive compared with non-carbon sources of energy. The physical engineering requirements for nuclear have always been extremely challenging, but the financial engineering required is now impossible. And yet we continue, despite the fact that, over 60 years since the UK’s civil nuclear programme began, we still have no means of safe, long-term storage of high-level nuclear waste—waste that is deadly for longer than any human civilisation has ever survived. How can the Minister justify such an economically and morally illiterate policy?

Fourthly, the White Paper envisages 5 gigawatts of hydrogen capacity by 2030. Can the Minister clarify whether this is green or blue hydrogen CCUS and tell us who will assume long-term liability for CO₂ storage under the Government’s plans for carbon capture and storage? Does not this liability issue further underline why our focus should be on green hydrogen? Does the Minister recognise that we need to invest heavily now in contracts for difference to further drive down the rapidly reducing costs of green hydrogen in the way that was done previously on wind generation?

Fifthly, the Government have relied in their Statement on the ability of home energy efficiency upgrades to reduce domestic energy bills. The Liberal Democrats agree that energy efficiency measures are critical to tackling emissions and reducing bills, but this is another area where government action falls short of its rhetoric. The Government told us that the Green Homes Grant would deliver 600,000 home energy efficiency upgrades by the original end date in March next year. It is likely to be a fraction of that. Can the Minister tell us the actual numbers that will be delivered by that date?

My noble friend Lord Stunell, a former DCLG Minister with huge experience in this area, could have told the Government that this would be the case. In fact, he did tell the Government—repeatedly. Does the Minister not recognise that there is no hope of upgrading the 28 million homes that need it unless we have a long-term investment programme that provides industry with the confidence to invest in the recruitment and skills training required?

Finally, will he agree to consult my noble friends Lord Stunell and Lord Foster of Bath, who, as former Ministers, both have extensive experience in this area and could help the Government prevent mistakes like this reoccurring in the future?

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)]

I thank the noble Lords, Lord Grantchester and Lord Oates, for their comments, particularly the noble Lord, Lord Grantchester, who was fairly positive in pointing out some of what he agreed with. He said that the Statement was largely positive, with some good solutions, and that he was pleased with much of it—although he did have some critical questions, which I will come to. The noble Lord, Lord Oates, was slightly less positive, and had some questions which I will attempt to address as well.

Both noble Lords raised the issue of poorer households, and they were right to do so. We have set out measures that will help households manage their energy consumption and keep bills fair and affordable, providing financial support for the most vulnerable and low-income households of at least £6.7 billion over the next six years. That includes the Green Homes Grant that the noble Lord, Lord Oates, referred to, which could see lower-income households save up to £600 a year on their energy bills, and the warm home discount scheme through to 2026 to cover 750,000 extra households. I understand the ambition that the noble Lord, Lord Oates, wishes us to meet, and I think we are making a good start, even if we do not perhaps match exactly what he would like to see.

Both noble Lords raised the subject of low-carbon electricity, which is vital. We are committed to fully decarbonised electricity generation by 2050. The current trajectory should see us largely decarbonised in the late 2030s. They both also referred to offshore wind power, and we have a manifesto commitment of 40 gigawatts of offshore wind, including 1 gigawatt of floating wind, by 2030, which will support up to 60,000 jobs.

Both noble Lords raised the important subject of hydrogen. We are aiming for 5 gigawatts of hydrogen capacity by 2030, which will unlock £4 billion in investment and support for up to 8,000 jobs. That is why we are supporting the deployment of power with CCUS by 2030, as the noble Lord, Lord Oates, referred to.

Nuclear power was raised. We believe that nuclear power continues to be an important source of clean, reliable and safe energy as part of our net zero mix. It will help result in lower costs for consumers. With the existing nuclear fleet largely retiring over the next decade, we do need further capacity. That is why the Government are entering into negotiations with EDF on the Sizewell C project in Suffolk, with a view to making an investment decision on a large-scale nuclear project before the end of this Parliament.

The noble Lord, Lord Grantchester, asked about the Committee on Climate Change’s advice on carbon budget 6. It is fair to say that, across the majority of our policies, our ambition to 2030 is broadly equivalent to that set out in the Committee on Climate Change’s advice. The White Paper actually goes further than the CCC in the deployment of low-carbon hydrogen production by 2030. We believe that our NDC is in line with its recommendations. Consistent with that ambitious plan, we want to create the space for companies to innovate and find new and better ways to achieve this target. As always, we remain grateful to the CCC for its advice. We will set out our approach to its reports and to achieving our emissions reductions targets in the net zero strategy next year.

The issue of SMRs was raised by the noble Lord, Lord Grantchester. I agree with him that this is an area that will be fruitful in the future and one that we need to move forward with and support.

[Lord Howell of Guildford (Con) [V]]

My Lords, I declare my interest in this area as in the register. This is a highly impressive and very ambitious programme, not least on the nuclear front, which the Minister has just been talking about. I want to ask about carbon-free home heating. There are 23 million homes in the United Kingdom—so the White Paper says—connected to the gas grid for heating, hot water and cooking. If, as we have been told, it will cost between £5,000 and £8,000 to convert each one, and if the whole national gas grid has to be upgraded to accommodate the smaller hydrogen molecules, we are talking about an astronomical sum of money and decades to complete it. Does my noble friend agree that a lot more reassurance is needed for all householders about how much it will cost each of them and how much disruption there will be in every home, and that this really is the best use of resources in the main task of combating global climate change?

[Lord Callanan (Con)]

I am grateful to my noble friend for his comments and particularly for his comment that the White Paper is highly ambitious. He might want to speak to the noble Lord, Lord Oates, on that. Of course, he is right to point out the immense challenge that faces us in decarbonising heat and buildings. We will publish our heat and buildings strategy next year, but there are a number of elements to that: investing in building insulation through schemes such as the ECO scheme and the Green Homes Grant; and investing in the production of hydrogen and in the various experiments and research and development on the potential for hydrogen to replace gas in the domestic grid. My noble friend is perfectly right that this is ambitious. It is an area that needs further work and study, but we are making progress. A new heat network transformation programme is launching next year, starting with £122 million of funding, which was confirmed at the spending review. The White Paper is laying the foundations for reducing the emissions from buildings, which we will build on in the study next year.

[Baroness Hayman (CB) [V]]

My Lords, I declare my interests as set out in the register. The Secretary of State in the other place spoke of unleashing private sector investment to fulfil the ambitions of the White Paper. To provide the legislative and regulatory clarity and certainty necessary to stimulate that investment, particularly in the wind sector, will the Government commit to act swiftly to bring forward the legislation promise on energy competition networks? Will they ensure that our net-zero commitments are at the heart of the new energy planning framework promised for next year?

[Lord Callanan (Con)]

The noble Baroness makes some very good points. I cannot give her the specific reassurances she wants; I understand her ambition for this sector, but the process of legislation is subject to parliamentary time, agreement with the business managers, et cetera. I have noted her points, and we will bear those comments in mind when planning the legislative programme.

[The Lord Bishop of Salisbury [V]]

My Lords, I very much welcome the energy White Paper. One thing we have learned during this pandemic is the importance of the local. What assessment have the Government made of the further potential of local solar, wind and micro hydro energy schemes and of what finance might be needed to facilitate their collectively enormous potential? Given the comments in the other place about the lack of rural infrastructure for energy, might the Minister find it helpful to consider the possibility of churches being places for siting bidirectional charging points for electric vehicles?

[Lord Callanan (Con)]

I thank the right reverend Prelate for his support. It is an interesting suggestion; I think I am correct in saying that the grant system for the production of charging points is available to churches, but if it is not I will certainly write to him on that. He is right that we need to transform the energy delivery system from one that was designed for large nodes in a fossil fuel world to a much more diversified system of national and local energy production. His comments are well made.

[Lord Rooker (Lab) [V]]

I am very pleased to see the Statement—the White Paper is winging its way to me at the moment. I am a bit disappointed that there was no mention in it of a potential barrage scheme or about the potential of small modular reactors. Could the Minister expand on those issues? The news about Sizewell C is excellent, but, if it is going to replicate Hinkley in the main, as I understand it will, why will it take so long? Can we not do some regulatory and other approvals in tandem? Speed is of the essence here, without skimping on safety. It should not take decades from the decision to go ahead to get the power out of a nuclear power station. I urge all speed on this.

[Lord Callanan (Con)]

The noble Lord’s comments are well made. We all find frustrating the length of time it takes to do anything in this country with the planning system and all the approvals needed, but safety is critical. We must make sure that everything is safe, has the proper approvals and goes through all the proper planning processes, et cetera. I accept his disappointment about barrage systems, but the key point is that these are all different systems with different considerations and investment appraisals. Some of these schemes were extremely optimistic; we have to try to select systems and projects that are good value for money, but we always bear all these systems in mind and are interested in future schemes coming forward for investment appraisal.

[Baroness Sheehan (LD)]

My Lords, the Government’s policy to extract every last drop from our part of the North Sea is incompatible with our net-zero target, the Paris Agreement and our leadership of COP 26 next year. When will the Government follow Denmark’s lead and stop for good the issuance of new licences for oil and gas exploration and plan instead for a just transition so that jobs and communities in Scotland and the north-east are protected?

[Lord Callanan (Con)]

I know the noble Baroness has strong feelings on this because she has asked me this question before. She should bear in mind that hundreds of thousands of jobs are dependent on the North Sea. We are delivering the North Sea transition deal, providing support for the people and communities most affected by the eventual move away from oil and gas production. We are supporting the transition of skills and supply chains for a clean energy transition and focusing export finance on low-carbon opportunities internationally. Many companies producing in the North Sea are committed to the net-zero challenge, so, rather than just say that they cannot produce any more, we need to work to help them in the transition away from fossil fuel production.

[Lord Lansley (Con) [V]]

My Lords, the White Paper refers to the creation of a net-zero hydrogen fund. As my noble friend knows, achieving production of clean hydrogen at a commercially viable scale is challenging but necessary if we are to achieve the switch to hydrogen fuel in our heavy goods vehicle fleet. Can my noble friend say whether the fund will enable us to achieve that objective of switching HGVs to hydrogen?

[Lord Callanan (Con)]

My noble friend is right to point out the scale of the challenge. We are investing £240 million of capital co-investment in low-carbon hydrogen production, which was committed to in the spending review. That is just one of the measures that will support our ambition for five gigawatts by 2030. The hydrogen strategy package, planned for next year—I am sure my noble friend will follow it with great interest —will set out more details in this space, including how we intend to leverage private sector investment through business models to satisfy the demand he suggests.

[Lord Broers (CB) [V]]

My Lords, I congratulate the Government on the most realistic energy plan we have seen in recent years. It realises that in the generation of electricity it is essential to sustain nuclear power or CCUS to address the problem that renewables are intermittent. The many applications of batteries are included without making the mistake of proposing that they can back up renewables on a national scale. It also includes the important role that hydrogen can play in storage and as a fuel. However, although there are tens of graphs in the accompanying document showing what will be realised in many different circumstances, I was unable in the short time available to find some of the essential data underlying these calculations. Where can these be found? For example, how were the additional costs of CCUS and the total cost of renewables, including their back-up, derived?

[Lord Callanan (Con)]

The noble Lord asks some very pertinent questions on the back-up detail and some of the graphs provided in the White Paper. I think it would be a more productive use of the House’s time if I wrote to him with the details he requests.

[Lord Whitty (Lab) [V]]

My Lords, I welcome the fact that we now have a strategy, but, on domestic heating, how do the Government plan to engage with the 23 million households currently supplied by gas, whose boilers, appliances and radiators will need to be retrofitted in double-quick time? What is the Government’s approximate timetable for the key decisions that will be required on the development of green hydrogen production and the introduction of hydrogen-based grids?

[Lord Callanan (Con)]

Like a number of other contributors, the noble Lord points out the importance of hydrogen. It is a potential key option for decarbonising heating, but it also needs to be looked at alongside the potential for heat pumps, heat networks, et cetera. We are developing all these options simultaneously, ensuring that we have the best available option for consumers and preparing the ground for the strategic decisions on these areas that will need to be made in the mid-2020s. On hydrogen heating, as I said, we are supporting a range of research, development and testing projects designed to help determine the feasibility of using low-carbon hydrogen as an alternative to the use of natural gas for heating. However, these are long-term decisions. We will publish the heat and buildings strategy next year. If the noble Lord is a bit patient, he will see the hydrogen strategy in the new year as well.

[Baroness Walmsley (LD) [V]]

My Lords, will the Government focus on green hydrogen production for heavy transport and industrial use, and phase out other types of hydrogen production as soon as possible? Our gas infrastructure for homes is currently unsuitable for pure hydrogen. What is the cost of upgrading it and how does that cost compare with installing heat pump networks, which are safer, deliverable now, cheaper and require less generating capacity than other available options?

[Lord Callanan (Con)]

The noble Baroness is right to point out the challenges but, of course, what we require is probably a combination of all these different strategies. Further work will be needed to understand the full extent of the changes that are required to transition the national gas infrastructure to carry hydrogen and to understand the associated costs. Not all properties are suitable for the use of heat pumps, but we are working closely with the gas industry and stakeholders to develop a programme of works to assess the safety, feasibility costs and benefits of using low-carbon hydrogen as an alternative to natural gas.

[Baroness Hooper (Con) [V]]

My Lords, I welcome the White Paper and the Prime Minister’s avowed intention to make the UK the Saudi Arabia of offshore wind power; indeed, I welcome the White Paper’s target of 40 gigawatts of offshore wind by 2030. However, this will clearly require the construction of many more huge wind turbines. Can my noble friend tell us about the supply chains for the construction of offshore wind turbines? How much of the technology and manufacture will be uniquely British, and how much will we be dependent on imports?

[Lord Callanan (Con)]

My noble friend makes a very good point. We will invest in the growth of the UK’s renewable manufacturing base to stimulate the UK’s supply chain. We will also support the delivery of the industry’s target of 60% of UK content in offshore wind projects by 2030 through requiring developers that are awarded a contract for difference to honour the supply chain plan that they put forward. We will put the UK at the forefront of manufacturing for wind turbines and, to support this growing industry, we will invest £160 million in modern ports and manufacturing infrastructure, providing high-quality jobs in our coastal regions.

[Lord St John of Bletso (CB)]

My Lords, in welcoming this White Paper and its ambitious programme, I declare my interests as disclosed in the register.

Given that 30% of UK households do not have access to off-street parking and it will take significant investment to upgrade electric vehicle charging infrastructure to meet future demand, what plans do the Government have to invest in hydrogen-powered infrastructure that is likely to be much more accessible and sustainable? Would it not be sensible for Her Majesty’s Government to invest more in technologies that would allow them to leapfrog battery-driven technologies straight into green hydrogen ecosystems?

[Lord Callanan (Con)]

Of course, huge amounts of money have been invested by both the Government and industry in the development of fuel cells, which are required for the use of hydrogen in vehicles. Again, I suspect that we will use a combination of technologies. Clearly, electric vehicles will have a huge role to play but, if fuel cell technology advances and the costs of hydrogen production come down, we will hopefully be able to have more vehicles powered by hydrogen as well.

[Lord Berkeley (Lab) [V]]

My Lords, the Minister just said, in response to another question, that nuclear will be clean, cheap, reliable, safe and lower cost. He will be aware that of the three EPR designs for nuclear reactors, one at Hinkley Point, one in Finland and one at Cap de Flamanville in France, the costs of the one at Flamanville have quadrupled since 2007, up to €12.4 billion today, and they do not expect generation to start until 2023. I understand the French Government have said they will not build any more of this type of reactor until they see whether this one works. Would it not be better to go for smaller-scale nuclear generation than continue with a new nuclear power station when we have not even got Hinkley Point anywhere near running?

[Lord Callanan (Con)]

I know the noble Lord is a sceptic as regards large-scale nuclear power; we have said that we will enter negotiations with EDF on the Sizewell C project but it will be subject to full government regulatory and other approval. Of course, value for money will be crucial. In addition, as I said earlier, we will be advancing support for SMRs at the same time.

[Lord Greaves (LD)]

Like my noble friend, and like the previous speaker, I am mystified by the Government’s obsession with large nuclear, which is going to be neither clean, safe, secure nor value for money. However, I want to ask about small modular reactors, which are the latest flavour of the month. How many does the Minister expect to be operating throughout the world within the next five years? What is the timescale for actual, practical design of a British version, and when would he expect manufacturing to start?

[Lord Callanan (Con)]

Of course, AMRs have not yet been commercially deployed anywhere in the world and we are at the earliest stages of research and development, but we recognise their potential for decarbonisation. The Government have ambitions to deploy an AMR demonstrator, a prototype reactor, by the early 2030s. Additionally, we will be allocating £385 million to support the development of both SMRs and AMRs.

[Lord Walney (Non-Afl)]

It is now two years since the Toshiba NuGen deal in west Cumbria collapsed. Small modular reactors are very welcome but are still many years off, so what are the Government doing to maintain the world-class nuclear skills base in that county and prevent it dissipating?

[Lord Callanan (Con)]

Coming from the north myself, albeit from the north-east and not the north-west, I understand the challenges that the noble Lord refers to. The commitment is to enter into negotiations regarding the Sizewell C project in Suffolk, but we keep all these options regarding nuclear power at different sites under review. First, we will see how this goes and then move forward with SMRs and AMRs as well, which do have potential. I am sorry that I cannot give the noble Lord a commitment at the moment, but we keep these options under consideration.

[The Deputy Speaker (Baroness McIntosh of Hudnall) (Lab)]

I am afraid that the 20 minutes allocated for Back-Bench questions have now elapsed.

United Kingdom Internal Market Bill

Lord Callanan Excerpts

Consideration of Commons amendments
Tuesday 15th December 2020 Lords Chamber

Moved by

[Lord Callanan]

That this House do not insist on its Amendments 1F, 1G, 1H, 1J, 1K, 1L and 8M to which the Commons have disagreed for their Reason 8N, but do propose the following amendments in lieu—

Commons reason

8N: Because the Lords Amendments would be detrimental to the clarity, simplicity and certainty of the United Kingdom internal market regime to be established by the Bill.

--- Later in debate ---

8U: Page 24, line 16, at end insert—
““common framework agreements” has the meaning given by section 10;”.

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)]

My Lords, I turn now to government Amendments 8P through to 8U regarding common frameworks. During many weeks—it seems like it anyway—of thoughtful and robust scrutiny, it is the discussions of the common frameworks programme that have at times proven the most thorough and considered. I pay tribute to and thank colleagues on all sides of the House, on the Opposition Benches, and from all sections, for the positive and collaborative tone with which they have approached discussions on this matter. I pay particular tribute to the noble Lords, Lord Stevenson of Balmacara, Lord Fox and Lord Purvis, and to the noble Baroness, Lady Hayter, who have probably spent more time with me than they would have liked in the run-up to Christmas. I thank them for their engagement.

I also give particular thanks to the noble and learned Lord, Lord Hope of Craighead, who has worked so warmly and collaboratively with the Government, and in a wonderful spirit, to try to find common ground. His contributions to each debate, as always in this House, have been hugely constructive and I want to record my gratitude to him.

We have heard praise from every corner of your Lordships’ House for the common frameworks programme and I put it on record again that I concur entirely with this praise, and reiterate once more this Government’s commitment to the common frameworks. The Government have been clear that the market access principles will work in tandem with the common frameworks. We have been asked to provide as much clarity as possible, and to state our continuing commitment to the programme, and we have thought long and hard about this over recent weeks.

As I have previously said to your Lordships’ House, it is key that we respect the flexibility of common frameworks, that we pay close attention to the interests of other parties involved in the common frameworks programme, and that we protect the voluntary and consensus-driven nature of the programme. These aspects are key to the effectiveness of these processes.

The Government have listened carefully and reflected on the points put forward many times by your Lordships’ House on putting common frameworks in the Bill, and I am pleased to say that today we are able to act. Given the strength of feeling on this matter, we would like to demonstrate our commitment to the programme, first, as requested by many noble Lords, by placing common frameworks in the Bill. Secondly, we are clarifying a relationship that we see between agreements made under the common frameworks processes and the internal market principles established by this Bill.

Specifically, we want to put it beyond doubt that the delegated powers under Clauses 10 and 17 may be utilised to, among other things, make provision to reflect common framework agreements. This can be achieved by excluding specific divergence agreed through the common frameworks process from the operation of the market access principles where all parties to the common framework are in agreement.

We believe that these amendments meet the objectives I have set out. They put beyond any doubt the Government’s commitment to the programme while respecting the voluntary nature of the common frameworks programme. They also make it clear that divergence may occur where there is agreement under a common framework, and that such divergence could be excluded from the market access principles. Regulations to give effect to such an agreement can be made under Clauses 10 and 17. In those cases, the Secretary of State would be able to bring to the House a statutory instrument to exclude from the market access principles a specific agreed area of divergence. This would follow consensus being reached between the UK Government and all the relevant parties that this is appropriate in respect of any specific defined topic within a common framework.

It is worth being clear that the regulation of professional qualifications is very different from that of goods and services. Unlike Parts 1 and 2, there is no power for the Secretary of State to amend the exclusions in Part 3. Although the amendment cannot apply in the same way to this part of the Bill, as your Lordships will be aware, Part 3 contains provisions for an alternative system. This will allow relevant authorities to retain control over professional standards and access to their professions.

For Parts 1 and 2, previous amendments have provided for consent to be sought from the devolved Administrations. Thereafter MPs and Peers from all parts of the United Kingdom would be able to debate and, if appropriate, agree to the change. We do not currently expect that such cases will arise very frequently, but we want to be clear that appropriate means are in place to respect them when they do. In our view, this is an appropriate way to ensure that the market access principles in the Bill can act to ensure certainty and a seamlessly functioning internal market while respecting limited divergence agreed under the common frameworks programme.

There has, of course, been significant debate in both Houses regarding the relationship between the common frameworks programme and the market access principles in the Bill, and the impact one has on the other. It is nevertheless important that such examples can be identified and that these matters are reported on rigorously, independently and transparently. In line with other government amendments to enhance the overall transparency of the UKIM Bill and the role of the office for the internal market, Amendment 8T demonstrates our commitment to transparency and evidence building regarding the interaction between the market access principles and the common frameworks programme. Therefore, as part of the OIM’s five-yearly review into the effectiveness of Parts 1 to 3 of the Bill in supporting a healthy internal market, the OIM will now also address how Parts 1 to 3 have affected the operation of agreements under common frameworks, including the effect that those agreements have had on the operation of the UK internal market.

We are confident that the amendments provide an appropriate way to ensure that the market access principles in the Bill can act to ensure certainty and a seamlessly functioning internal market. They do this while allowing for a degree of agreed divergence, reflecting different circumstances in particular parts of our United Kingdom. As noble Lords would expect, our partners in the devolved Administrations have been updated on this approach.

These amendments are the product of many weeks of robust and constructive debate. As I said, I thank all noble Lords from both the opposition Front Benches who have been involved in the debate. The amendments reflect the Government’s steadfast commitment to the common frameworks programme, to enhancing the overall transparency of the Bill and to making clear the Secretary of State’s power to exclude areas of divergence agreed under common frameworks. I beg to move.

--- Later in debate ---

[Baroness Hayter of Kentish Town (Lab)]

I also welcome the Motion moved by the noble Lord, Lord Callanan.

We are delighted that the Government have responded to the repeated and really quite strongly supported urgings from this House to hardwire, if you like, the common frameworks process into the Bill. After all, as we have heard, the Bill was introduced to deal with powers returning from the EU—powers that are devolved but might need to be used in ways that would not interfere with the development of our own UK single market.

Indeed, it was for that reason that the common frameworks process was established in 2017. The Government are about to write into the Bill—in a few moments’ time, when we will vote for it—that, in cases where a particular divergence in a market area is agreed under the common framework, such an agreement can be exempted from the market access principles. This recognises in law that uniformity is not always necessary in an internal market, allowing some divergence and differences to suit the particular circumstances of parts of our union.

Furthermore, as has been said, a review will take place to judge how that interplay between the framework and the market access principles is working in this new internal market. We hope that this review will show that a consensual approach to these issues works well with the wider aim of achieving a successful internal market. However, as the noble Lord, Lord Fox, said, it will also be interesting to see whether the review looks at how this works with the CMA and the OIM. We all have a lot to learn on this.

The Motion means that the frameworks are included in the Bill, which was lacking at the beginning. I thank Ministers for finding a route forward. I think they sometimes have to break more arms on their side than on ours—though they would know more about that than we do. We join them tonight in confirming the recognition of the devolved settlements and our wish to strengthen both devolution and the future of the union. We see those two aims as entirely compatible and I think they do too.

As we close this chapter of our adjustment to the post-Brexit situation, we also thank the Ministers for their other amendments, to ensure that the OIM appointments and most regulations are agreed with the devolved authorities. I think the Minister had a hand in the recognition of my particular pet project of recognising the importance of the internal market working for computers—sorry, consumers; too much time on Zoom. I do thank him personally; I know he had more than a little hand in that.

I thank all concerned. The Bill team have worked wonders. All those who have voted have enabled us to push on this. I thank the magnificent Lords clerks who have worked against the clock and conflicting interests to get this done, our colleague Dan Harris, my noble and learned friend Lord Falconer and my noble friend Lord Stevenson, who has led us on the Bill so well. I also thank our very special Leader, who gets us all here, my noble friend Lady Smith of Basildon. For the moment, let us put this Bill to bed.

[Lord Callanan (Con)]

There is a new “computers for consumers” skill that we also need to get passed in a future amendment. As the debate draws to a close, I am once again enormously grateful to those who have contributed to the discussion. These debates have been noteworthy for the breadth of ground covered and the depth of expertise on display. Everyone has acted in the finest traditions of your Lordships’ House. I would like to put on record my thanks for the contributions of colleagues on all sides of the House.

Today’s debate and amendments are the product of intense engagement, often to very tight timescales. I have already thanked colleagues who were involved in long team Zoom calls at different times, but the noble and learned Lord, Lord Hope, deserves all the praise that has rightly gone his way. I also add to the thanks from the noble Lord, Lord Fox, and the noble Baroness, Lady Hayter, to the Bill team. I thank the Bill manager, Shreena Kotecha, and Jayne McCann, Satchi Mahendran, Jefferson Yen, Dominic Entwistle, Katrina Gajewska, Bridget Micklem, Greg Dyke, Amy Smith, Dominic Bull and all their colleagues. I thank Martynas Zekas in my office, who has done such a fantastic job. They have all worked many long hours, late into the evening and at weekends, in difficult circumstances and often from home. They have all acted in the finest traditions of the Civil Service and we should put our thanks to them on the record. I also express my thanks to my ministerial colleagues—my noble friends Lord True, Lady Bloomfield, Lady Scott and Lady Penn. They have made invaluable contributions and helped to get this measure on the statute book. Thank you very much to all of them.

Throughout these debates, the enthusiasm for the common frameworks programme has been heartening. While discussions have been robust, as always, it is encouraging to hear unanimous support for the programme, which is a cornerstone of mutual co-operation between the Government and devolved Administrations. These amendments are the result of these discussions and underline the Government’s commitment to the programme. They make clear in the Bill the relationship between common frameworks and market access principles. I hope noble Lords will agree to support the Motion. I say to the noble Lord, Lord Fox, that some amendments go back to bring common frameworks into the Bill. I hope noble Lords will agree that this represents a positive conclusion to the work of your Lordships’ House on this Bill.

Motion A agreed.

Climate Change

Lord Callanan Excerpts

Monday 14th December 2020 Lords Chamber

[Lord Browne of Ladyton]

To ask Her Majesty’s Government what assessment they have made of the work of the Committee on Climate Change.

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)]

My Lords, the role of the climate change committee in providing independent expert advice to government is widely accepted as global best practice. Following the committee’s advice, in June 2019 the Government set a target to achieve net zero by 2050. We are very grateful for the committee’s recently published advice on the sixth carbon budget, which we will of course consider carefully ahead of setting it in legislation next year, as required by the Climate Change Act.

[Lord Browne of Ladyton (Lab) [V]]

My Lords, the Prime Minister’s commitment to reduce carbon emissions from 57% of 1990 levels to 32% by 2030 is the same as the target set out in the committee’s Sixth Carbon Budget report. To deliver it requires a centrally led, comprehensive strategy and timetable for the current Parliament—preferably one that accepts that it can be delivered in 10 years only with decarbonisation technologies already at maturity. Do the Government have such a strategy? Will it be published? And will the Government find time to debate the reports of the Committee on Climate Change?

[Lord Callanan (Con)]

Whether time will be allowed is of course not a matter for me, but I will pass that on to the Chief Whip. Strategies, or elements of them, are being published today in the energy White Paper. A hydrogen strategy and a heat and building decarbonisation strategy are to come, so we are conscious of our responsibilities in this regard.

[The Lord Bishop of Salisbury [V]]

My Lords, the Government have made a number of statements, which, with the 10-point plan and the upping of the nationally defined contributions to the Paris Agreement, are very welcome. The Government’s manifesto commits to planting 30,000 hectares of trees per year. That is a really key target to aim for in relation to the climate change committee’s report, but it is one that we have missed by 71% in the last year and consistently over previous years. I much admire the Prime Minister’s ambition, but how are the Government to ensure that performance exceeds or matches that ambition?

[Lord Callanan (Con)]

The right reverend Prelate is of course correct to point out that meeting these commitments will be a difficult, long-term task. It will require commitment from government and also from Parliament, local government and other stakeholders, but it is a challenge that we are rising to.

[Lord Cormack (Con) [V]]

My Lords, how many meetings do my noble friend and his ministerial colleagues have with the chairman and members of the climate change committee? Is the committee monitoring trade agreements to ensure their compliance with climate change obligations?

[Lord Callanan (Con)]

I met the chief executive of the committee only about two or three weeks ago. I am not aware of any comments or otherwise that the committee has made on trade agreements.

[Baroness Lane-Fox of Soho (CB) [V]]

I declare my interest as a director of Peers for the Planet. Nearly half the recommendations made by the climate change committee require some kind of behaviour change by the general public, yet a recent BEIS survey showed that only 5% of people understand in detail what net zero even means. What concrete plans do the Government have to urgently educate citizens about actions that they should take in order to reach government targets?

[Lord Callanan (Con)]

The noble Baroness is of course correct to highlight the importance of behavioural change. Getting to net zero will require action from everyone—as I said earlier, people, businesses and governments—across the whole of the UK. It is vital to engage the public in this debate on the challenge, and we intend to do that in the run-up to COP 26 later next year.

[Baroness Sheehan (LD)]

My Lords, I welcome the fact that the Government are ending support for fossil-fuel projects in developing countries, but here at home the Oil and Gas Authority’s remit remains to extract every last drop through its “maximising economic revenue” policy. Does the Minister agree that this is incompatible with the Climate Change Act and our leadership of COP 26 next year? Will he and the Government support my Private Member’s Bill, the Petroleum (Amendment) Bill, which seeks to rectify this?

[Lord Callanan (Con)]

No, I do not agree with the noble Baroness. The oil and gas industry employs tens if not hundreds of thousands of people. It recognises the challenge, and the Government need to work with that to help it in the transition.

[Lord Grantchester (Lab)]

Given the Committee on Climate Change’s recommended target of a 78% emissions cut by 2035 in its report on the sixth carbon budget, can the Minister confirm whether the Government will now raise their national determined contribution commitment to COP 26 policies to align with that?

[Lord Callanan (Con)]

I admire the noble Lord’s ambitions but we only announced the NDC two weeks ago, so we are not about to revise it already.

[Baroness Boycott (CB)]

My Lords, I want to follow up the question from the noble Baroness, Lady Lane-Fox, about behaviour change. The CCC said that the majority of the things we have to do are going to require buy-in from the public. The Minister has said to me previously that the Cabinet Office had set up a dedicated engagement team for COP 26 but I have not yet seen anything about any actions by it apart from a general endorsement for businesses to race towards zero. That is very good, but what about the public? Will the Minister update the House on the progress of this team? I am sure the noble Baroness, Lady Lane-Fox, and I would be delighted to meet him if there is more information that he could give us on its progress.

[Lord Callanan (Con)]

I am pleased that the noble Baroness recognises the importance of public engagement, and I totally agree with her. Obviously we have been in the middle of a global pandemic so it has been very difficult for the engagement team to do its job properly in terms of engaging with the public, but she can rely on the fact that we have some ambitious plans to engage with the public before COP next year.

[Lord Bourne of Aberystwyth (Con) [V]]

My Lords, heat pumps, offshore wind and installing installation at scale are all recommendations from the Committee on Climate Change, which does excellent work. These will help to create jobs and apprenticeships as well as helping us to get to net zero. The Government have certainly adopted this agenda but now they need to consider a serious step change in order to pursue it. Will my noble friend pursue these policies with even more vigour?

[Lord Callanan (Con)]

My noble friend makes a very good point; we will indeed. We already have the largest offshore wind capacity in the world, I think—certainly in Europe. We are world leaders in that technology and the costs have fallen massively. We will be conducting another contracts for difference auction shortly, and I think we will see even more ambitious progress. The targets have been set out and the money provided, and we are well on the way to meeting them.

[Baroness Burt of Solihull (LD) [V]]

My Lords, the Committee on Climate Change must be congratulated on producing a detailed achievable road map to net zero by 2050. It is now up to the Government to put in place the right policies to give investor confidence to the private sector and get the money flowing. When will the Government deliver the investment road map?

[Lord Callanan (Con)]

We only received the report from the committee a few days ago and we will be studying it carefully. We are providing lots of investment in this area. We have the Prime Minister’s 10-point plan, delivering something like £12 billion of public investment and hopefully leveraging three times as much private money. We have investments in the green homes grant and a number of other schemes, so we recognise the challenge. As I am sure the noble Baroness will recognise, public finances are quite tight at the moment, but I think we have an excellent record of providing the money to meet our ambitions.

[The Lord Speaker (Lord Fowler)]

My Lords, all supplementary questions have been asked.

Green Economic Recovery

Lord Callanan Excerpts

Monday 14th December 2020 Lords Chamber

[Baroness Ritchie of Downpatrick]

To ask Her Majesty’s Government what plans they have to promote a green economic recovery in response to the impact of the COVID-19 pandemic.

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)]

My Lords, as we rebuild, we must build back greener. Last month, the Prime Minister announced our Ten Point Plan for a Green Industrial Revolution, spanning clean energy, buildings, transport, nature and innovative technologies. The plan will mobilise £12 billion of government investment to unlock three times as much private sector investment by 2030, level up regions across the UK, and support up to 90,000 highly skilled green jobs.

[Baroness Ritchie of Downpatrick (Non-Afl) [V]]

Further to that, could the Minister outline what consideration the Government have given to the incorporation of a national retrofit strategy as a key infrastructure priority and a core element of their industrial strategy?

[Lord Callanan (Con)]

The Government will publish a heat and buildings strategy in the coming months; this will set out the immediate actions that we will take to reduce emissions from buildings, including deploying energy-efficiency measures and transitioning to low-carbon heating.

[Baroness Clark of Kilwinning (Lab)]

Does the Minister agree that, as we come out of the pandemic, there is a real risk that we will revert to the kinds of economic practices that created the climate crisis in the first place? No economic conditions of an environmental nature seem to have been placed on the money that has been put into the economy during the pandemic, so can he give an assurance that as we approach the COP 26 climate talks in Glasgow next year we will look seriously at how we both address the economic inequalities that have been exposed by this crisis and create a green economy? Does he agree with me that that will require significant shifts in both government policy and investment strategy?

[Lord Callanan (Con)]

The noble Baroness makes some important points, but, of course, all of the 10-point plan was exactly about building a UK that is greener, more prosperous and at the forefront of industries for the future.

[Lord Dodds of Duncairn (DUP) [V]]

The energy White Paper published today talks about kick-starting the hydrogen economy. I warmly welcome this commitment. How will the Government ensure fair access across all parts of the United Kingdom to the net zero hydrogen fund and the other funding streams, not least research and development?

[Lord Callanan (Con)]

The noble Lord is quite right to point out the importance of low-carbon hydrogen, and, working with industry, we are aiming for 5 gigawatts of low-carbon hydrogen production capacity by 2030. We will try to ensure that all parts of the United Kingdom can benefit.

[Lord Sheikh (Con) [V]]

My Lords, I declare an interest, as I am the co-chair of the APPG on Islamic Finance. Islamic finance can play a role in the green industrial revolution. As we will issue our first sovereign green bonds in 2021, I ask my noble friend the Minister: will Her Majesty’s Government consider the issuance of green sovereign sukuks, which will help support a green economic recovery following the pandemic? I believe that our financial services sector will play a key role in the economic recovery.

[Lord Callanan (Con)]

As the noble Lord rightly acknowledges, next year the UK will issue its first sovereign green bonds, subject to market conditions, and it intends to follow up with a series of further issuances to meet growing investor demand. However, this is a matter for the Treasury, whose Ministers will update Parliament shortly.

[Lord Taylor of Goss Moor (LD) [V]]

My Lords, first, I draw attention to my registered interests in renewable heat and sustainable development. Will the Minister acknowledge that the present taxation system fails to reflect the shift in the carbon intensity of energy, with sustainable electricity—and, indeed, electricity in general, which is now much more low-carbon—costing four times, per kilowatt, what gas now does? Is it not time to shift the tax system to reflect the priorities the Government have in their green agenda to shift what people do?

[Lord Callanan (Con)]

I thank the noble Lord for trying to tempt me down the road of reforming the tax system, but I will happily leave that for the Chancellor to announce.

[Baroness McIntosh of Pickering (Con)]

Will my noble friend join me in congratulating farmers on both responding to the Covid epidemic and delivering a green environmental economic recovery? What could be greener than buying locally produced meat, dairy products and cheese this Christmas? Will my noble friend join me in doing so?

[Lord Callanan (Con)]

I thank the noble Baroness for her question. She is quite right, of course: the farming community has had a very difficult year, as have many other industries. Where possible, we should all buy local freshly produced produce.

[Lord Ravensdale (CB)]

My Lords, I declare my interests in the register. The voice of the regions will be key to our green economic recovery. The Midlands Engine’s green growth conversation aims to bring together key players in the energy sector, including local authorities, LEPs, businesses and academics to create a regional action plan. What plans do the Government have to interact with such initiatives and support existing regional strengths to enable a clean economic recovery?

--- Later in debate ---

[Lord Callanan (Con)]

The noble Lord makes a very good point; the Midlands green growth conversation is an important piece of work, and I look forward to the Midlands Engine growth action plan, which I understand is being published in the new year. The 10-point plan sets out our intention to “reinvigorate our industrial heartlands”, such as the north and the Midlands.

[Lord Stevenson of Balmacara (Lab) [V]]

My Lords, we face increasingly high levels of unemployment post-Covid-19, so does the Minister agree that retraining will be key to the green recovery? Can he explain why that is not mentioned in the 10-point plan? Can he also confirm what budget has been allocated for retraining and that it will be additional to the funding already announced?

[Lord Callanan (Con)]

I agree with the noble Lord that retraining will play an important part. We recently launched the Green Jobs Taskforce to support it. It will look at the key challenges faced by employers and workers in supporting a green recovery, ensuring that we have the right pipeline of talent and skills provision.

[The Lord Speaker (Lord Fowler)]

Baroness Walmsley?

--- Later in debate ---

[Baroness Hayman (CB) [V]]

My question was about the Economic Affairs Committee report published today. It makes it clear that recovery from Covid-19 and investment in a green economy for the future are far from divergent aims; they are complementary. Does the Minister agree with the contention in that report that government spending should be on policies more tightly focused on creating job opportunities that reflect the long-term context and that the Government should prioritise green projects that can be delivered at scale and quickly and can take place across the country?

[Lord Callanan (Con)]

I agree with the noble Baroness that we need to generate more green jobs and to build back better—that was the aim of the 10-point plan, and it is a central aim of the Government. The noble Baroness makes an important point and we shall endeavour to do exactly that.

[Lord Randall of Uxbridge (Con) [V]]

My Lords, on The 10-Point Plan for a Green Industrial Revolution, may I urge my noble friend to press his department to invest some of the £5.2 billion promised over six years for flood and coastal defences in creating new wetlands, which would deliver massive benefits for the environment, nature, communities and, of course, jobs?

--- Later in debate ---

[Lord Callanan (Con)]

My noble friend makes an excellent point. He will be aware that in the 10-point plan we are doubling the green recovery challenge fund with an extra £40 million. Nature recovery can indeed help us to mitigate and adapt to climate change by capturing carbon and providing other environmental benefits. My noble friend’s point is very well made.

[The Lord Speaker (Lord Fowler)]

If the noble Baroness, Lady Walmsley, is still with us, I am quite prepared to take her question now.

I think we can take it that she is not. All supplementary questions have been asked, which brings Question Time to an end.

Carbon-neutral Homes

Lord Callanan Excerpts

Thursday 10th December 2020 Lords Chamber

[Baroness Thornhill]

To ask Her Majesty’s Government what progress they have made towards (1) the target for carbon neutral homes by 2050, and (2) improving energy efficiency standards for existing buildings.

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)]

Between 2010 and 2019, UK energy consumption per household has reduced by 21 %. Through our energy company obligation, we have upgraded over 2.2 million properties since 2013, and this year we announced a £2 billion green homes grant to help up to 600,000 more homes reduce their emissions.

[Baroness Thornhill (LD)]

I thank the Minister for his Answer and I hope he will agree that, with these things, the devil will be in the detail. For example, the Government’s ambition to install 600,000 heat pumps by 2028 is laudable, but how do they intend to incentivise owner occupiers to meet the £10,000 upfront cost of installing them in their homes? The retrofitting of homes, which is a massively significant issue, has actually stalled. Can the Minister explain why the Government believe that this has happened and say how far the £2 billion grant that he just mentioned will actually go, given that a report in 2017 to the energy efficiency group estimated that £5.2 billion would be needed every year until 2035 to get all our homes up to the EPC band C level, which at the moment 75% of our homes fail?

[Lord Callanan (Con)]

we are making considerable progress towards the target, but we recognise the role that energy efficiency will play in the decarbonisation of buildings. We remain committed to meeting our legally binding carbon budgets and will set out further action in the forthcoming heat and buildings strategy.

[Baroness Blackstone (Ind Lab)]

My Lords, I declare my interests as set out in the register. The Scottish Government have published proposals for point-of-sale standards to require all owner-occupied homes to meet a rating of EPC band C from 2024. Do the Government plan to implement the Committee on Climate Change’s recommendation that all homes—not just owner-occupied ones—are at least at band C by 2028?

[Lord Callanan (Con)]

We are constantly improving the number of homes: 34% of homes are now above EPC band C, which is up from 9% in 2009. Our various funding schemes. such as the ECO scheme and the green homes grant scheme, will all contribute towards raising those numbers.

[Baroness Jones of Moulsecoomb (GP) [V]]

My Lords, I am sure the Minister is well aware that, since 2017, 1 million homes have been built that will need retrofitting. Yesterday, the MCS Charitable Foundation released its Energising Advice Report. It recommends having a publicly funded one-stop shop for advice to homeowners on how to retrofit their homes—something to make it easy for them. Is that sort of advice something the Government might accept?

[Lord Callanan (Con)]

I thank the noble Baroness for drawing my attention to the report, but we already have a digitally led advice service, Simple Energy Advice, which provides tailored advice to homeowners and landlords on energy performance improvements that they can make to their homes. It also signposts further funding and directs them to suitably qualified tradespeople

[Lord Lilley (Con)]

I draw attention to my interests in the register. Carbon-neutral homes will require a massive expansion of carbon-neutral electricity. How confident is my noble friend in the optimistic projections of the future cost of renewables and carbon capture and storage, given that most large projects—from the Channel Tunnel through nuclear electricity to HS2—feature enormous cost overruns?

[Lord Callanan (Con)]

I understand my noble friend’s scepticism on this, but I point him to offshore wind, the cost of which has plummeted over recent years. It is possible that we can meet the standards, but of course we have to be fully aware of the potential for cost overruns in the future.

[Lord Redesdale (LD)]

My Lords, I draw attention to my interest in the register as the CEO of the Energy Managers Association. Covid has led to millions of employees working from home, and while this would not have had a major effect during the first lockdown, due to the lack of heating, the second lockdown is of course during the winter and there has been a marked increase in the amount of gas used by people working from home and putting their heating on at times when they would not have in the past. Have the Minister and BEIS looked into the amount of carbon emissions that this has led to in the UK? Are plans afoot to allow companies to install energy efficiency measures if they are contributing to the fuel cost—as they can under the Treasury rules—so that the home becomes a place of work?

[Lord Callanan (Con)]

The noble Lord makes some interesting points. I think we are all aware of the limitations of working from home, but companies should be as open and transparent as possible in their reports about the energy and emissions that they are responsible for. This includes employees who work from home.

[Baroness McIntosh of Pickering (Con) [V]]

My Lords, will my noble friend join me in congratulating National Energy Action on all it does on home insulation and warm homes? I have the honour to be the honorary president of National Energy Action. Is it fair that new homes are still being built using gas boilers, which will eventually be banned, given that there will be an enormous cost for the occupiers of those homes in retrofitting new boilers at some future date?

[Lord Callanan (Con)]

We are consulting on these matters at the moment. The noble Baroness makes a very good point and I happily pay tribute to the work that National Energy Action does.

[Lord Krebs (CB) [V]]

[Inaudible]—climate change risk assessment concludes that the risks from overheating in residential and public buildings as a result of climate change are a top priority for urgent action. Can the Minister update us on progress in reducing this risk, and explain what the Government meant when the noble Baroness said on Tuesday that the Committee on Climate Change’s recommendations for the most cost-effective path for getting to net zero by 2050 are

“often a bit more ambitious than our plans”?—[Official Report, 8/12/20; col. 1109.]

[Lord Callanan (Con)]

I did not hear the first part of the noble Lord’s question as he was cut off. On the second part, I have not seen the remarks that he refers to, so I shall write to him on that.

[Lord Grantchester (Lab) [V]]

Point 7 in this scatter-gun 10-point environment plan identifies another two missing strategies: the national retrofit strategy and the fuel poverty strategy. What assessment have the Government made of the “help to fix” interest-free loan scheme proposed by the Chartered Institute of Building to deliver the future homes standard, and will the fuel poverty strategy still be forthcoming before the end of the year?

[Lord Callanan (Con)]

We are committed to reviewing the decent homes standard for social housing around energy performance and decarbonisation. We will be consulting on further regulations for homeowners in 2021.

[Lord Stunell (LD) [V]]

In Greater Manchester, there are over 1 million homes needing energy efficiency upgrades but only about three homes are being assessed daily, so a householder who applies for a grant today is likely to face a three-month wait to get the go-ahead to start work. It will take more than a thousand years, at the current rate, to bring all Greater Manchester’s homes up to EPC level C. Does the Minister now accept that recruiting and training green home assessors, and upskilling the construction workforce, has to be his top priority, and that underpinning that has to be a decades-long investment plan to give certainty to those who are ready to invest their lives in this key endeavour?

[Lord Callanan (Con)]

I agree with the noble Lord that we need to invest further in training opportunities and upskilling. There are many jobs available in this sector and that is exactly what we are doing under the green home grant scheme. As well as grants to home- owners and the local authority delivery scheme, we are also investing in training places to bring those new jobs into fruition.

[Lord Best (CB) [V]]

My Lords, much of the problem of poor energy efficiency in homes is found in the private rented sector. Although the Government have launched their fund for the decarbonisation of social housing, what combination of sticks and carrots are they planning to deploy to secure decarbonisation and energy efficiency in the private rented sector?

[Lord Callanan (Con)]

The noble Lord makes a very good point. Our stick is that we are consulting on raising the minimum energy efficiency standards of privately rented homes, and our carrot is that landlords can apply through the green homes grant scheme to get grant aid to help them.

[Lord Randall of Uxbridge (Con) [V]]

Does my noble friend agree that the climate change commission’s recently published sixth carbon budget just gives further impetus to Her Majesty’s Government bringing forward more measures to accelerate the rate at which targets can be met?

[Lord Callanan (Con)]

Since committing in law to eradicating our contribution to climate change by 2050, we have announced a series of ambitious plans to cut emissions, including through the Prime Minister’s recent 10-point plan. We will of course consider the committee’s most recent advice carefully as we take further opportunities to cut emissions and build the low-carbon future that we all wish to see.

[The Deputy Speaker (Lord Lexden) (Con)]

My Lords, all supplementary questions have now been asked and we move to the next Question.

Prohibition on Quantitative Restrictions (EU Exit) Regulations 2020

Lord Callanan Excerpts

Thursday 10th December 2020 Lords Chamber

Moved by

[Lord Callanan]

That the draft Regulations laid before the House on 9 November be approved.

Relevant document: 35th Report from the Secondary Legislation Scrutiny Committee. Considered in Grand Committee on 8 December.

Motion agreed.