Great British Energy Bill

Earl Russell Excerpts

Report stage
Tuesday 11th February 2025 Lords Chamber

[Lord Vaux of Harrowden (CB)]

My Lords, briefly, I thank the Minister for tabling Amendment 21. It is identical to an amendment I tabled in Committee, and introduces a time limit of six months for the publication of the statement of strategic priorities. Given the importance of that statement, as we have had many discussions around, and that it is the only place where the aims for GBE will be set out, it is clearly essential that the publication should not be delayed. I am very grateful to the Minister for accepting the principle.

I was going to ask the Minister whether the statement will be accompanied by an impact statement or assessment, or whether the business cases and spending reviews will be published. He pre-empted that on the first group, and I am grateful for his positive answers to those questions.

[Earl Russell (LD)]

My Lords, I thank the Minister and his Bill team for listening and constructively engaging with the many discussions that we have had on the issue of Great British Energy’s statement of strategic priorities and for bringing forward this helpful amendment.

I will be brief, as we have had a lot of discussion on this, particularly in Committee. Our position is that we support the intentions of the Bill and recognise that the Government are acting at speed to establish Great British Energy. However, we have always said that the Bill is too short for its own good. We recognise the difficult position that the Minister finds himself in. It is for Great British Energy, as an independent organisation, to write its own strategic priorities, as long as they are consistent with the objects set out in Clause 3. Great British Energy obviously needs to be established in order to write the strategic priorities, and discussions are required with the devolved Administrations.

Against these needs, we as parliamentarians were being asked to approve the Bill with no sight of the strategic priorities prior to the Bill being passed, or even after it is passed and the strategic priorities have been finalised. This was an issue that the Constitution Committee rightly highlighted as an area of concern. To us, it felt a little like we were being asked to sign a blank check, and your Lordships were rightly nervous about the implicit ask in the Bill as it was drafted.

From these Benches, we have consistently argued for progress on these matters and for the reaching of constructive compromise. Compromise needs to rightly balance the actions and operational independence of Great British Energy and, at the same time, the justified right of parliamentary scrutiny and oversight of the strategic priorities. Is this amendment absolutely perfect? No. Does it do a good and worthwhile job of balancing these competing needs and moving the issue forward? Yes, it very much does. I welcome the words the Minister has spoken from the Dispatch Box about a Written Ministerial Statement. This is an essential compromise, and I thank the Minister for this good progress.

[Lord Offord of Garvel (Con)]

My Lords, I will speak in support of the amendment in my name and that in the name of my noble friend Lord Trenchard. They represent an important step in ensuring that the development and operation of Great British Energy are aligned with the national interests and strategic needs of our energy sector.

Amendment 21, put forward by the Minister, ensures that the Secretary of State must prepare the statement of strategic priorities for GBE within six months of the passing of the Bill. This timely approach is crucial, as it establishes an early foundation for the strategic direction of Great British Energy, permitting the organisation to operate with clarity and purpose from the outset.

The inclusion of Amendment 26 in my name is equally important. It requires that the statement of strategic priorities must specifically address the development of supply chains in the United Kingdom. This is vital to ensure that the Great British Energy objectives are not only met but integrated into the broader goal of strengthening domestic industries and fostering economic resilience within our own borders. The definition of supply chains in this amendment reinforces the need for a comprehensive and interconnected approach to the creation and sale of commodities relating to Great British Energy’s work.

Finally, Amendment 33, proposed by my noble friend Lord Trenchard, brings an added layer of scrutiny and collaboration by mandating consultation with Great British Nuclear and the National Wealth Fund before the publication of the statement of strategic priorities. This amendment will ensure that Great British Energy’s strategies are developed in consultation with relevant stakeholders, thereby promoting a more cohesive and informed approach to energy policy.

These amendments collectively reflect our commitment to a strong, secure and sustainable energy future. I support them, and I encourage the Minister to do the same.

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[Lord Hamilton of Epsom (Con)]

That may well be so; it was probably as a result of our pursuing these green policies, which has led to higher prices and which some of us think was probably rather mistaken. We are now in a position where we continue to pursue a green agenda.

[Earl Russell (LD)]

My Lords, the prices were the highest prices we had because the previous Tory Government failed to do anything about our dependence on foreign gas. When the war in Ukraine happened, gas prices spiked and the noble Lord’s Government ended up spending £40 billion on subsidising bill payers across domestic and businesses. That money was spent for absolutely nothing—no long-term benefit at all.

[Lord Petitgas (Con)]

It seems to me that, earlier, the noble Lord, Lord Teverson, answered a question that was not the exam question. I do not understand why he brought immigration numbers into the equation, and I do not understand why—

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[Lord Cryer (Lab)]

Order! We are not discussing an immigration Bill. We are discussing an energy Bill, so could we stick to order and stick to the scope of the amendment?

[Earl Russell (LD)]

My Lords, I shall speak against Amendments 23 and 24. If the Conservative Benches had put forward something saying that Labour should be held to account for the promises that they have made, then yes, they should. Should those promises be enacted in this overpoliticised amendment? No, because that is not the way that we do things.

This is a very politicised amendment. It does nothing to help bill payers, nothing to make Great British Energy any better at delivering for bill payers and nothing to reduce costs for bill payers. Amendments 23 and 24 are amendments for leaflets and nothing more. They are pointless, petty grandstanding.

[Baroness Williams of Trafford (Con)]

What? Leaflets?

[Earl Russell (LD)]

Yes, they can write a quick leaflet saying that they held the Government to account, when actually they achieved nothing other than tabling an amendment. The last Tory Government had a de facto ban on onshore wind, did little to develop renewable technologies, left us dependent on Russian gas and ended up spending £40 billion subsidising bill payers to import foreign gas, for little or no long-term benefit. The previous Government gave up on delivering on nearly all energy-efficient measures and left UK citizens in cold and damp homes. We believe that, if done well, GB Energy will provide energy security, reduce energy bills, create green jobs and kick-start economic growth. Many of these arguments also apply to Amendment 24.

Without wasting time, our response is much the same as to the previous amendment. Frankly, we feel that holding the Government to account by enacting something in a Bill is pretty delusional. It would be far better to do that outside of the Chamber.

[Lord Hunt of Kings Heath (Lab)]

My Lords, I resist these two amendments. My noble friend Lord Rooker, who knows more about parliamentary procedure than almost anyone in either House, is absolutely right about the inappropriateness of these kinds of amendments. I do not want to carry on this enjoyable debate with the noble Lord, Lord Hamilton, but I think it takes the biscuit in view his Government’s record. Also, as the noble Lord, Lord Teverson, said, I do not recall the last Government ever agreeing to change legislation in the way that has been suggested.

I want to allow the noble Lord, Lord Offord, to call a vote tonight, as I am sure he is very anxious to do, but the fact is that the only way to guarantee energy security and protect bill payers is to speed up the transition to homegrown energy; that is what we were elected on, that is the basis of this Bill and we are receiving huge support for doing so. Surely, the experience in the last few months and years of the kind of gas price shocks that we have seen, which have helped to drive increases and led to the introduction of the price cap, tells us that we have to get out of our dependence on fossil fuels and rely on homegrown energy.

As far as bills are concerned, the independent National Energy System Operator has confirmed that our 2030 clean power goal is achievable and can create a cheaper, more secure energy system. The Climate Change Committee confirms that a clean energy future is the best way to make British energy independent and protect bill payers, create good jobs and tackle the climate crisis.

As far as the question of employment is concerned, our expectation across this Parliament, in the early stages of the company, is that Great British Energy will employ 200 to 300 people at its Aberdeen headquarters. But, more substantially, through its activities and investments, GBE will also create and support thousands of jobs across the country. This is what we should focus on. I hope that, as the noble Lord, Lord Offord, puts this to the vote, the House will reject it.

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[Baroness Bennett of Manor Castle (GP)]

My Lords, it is a great pleasure to follow the noble Baroness, Lady Hayman, for whom I have the greatest respect. I know that the whole of your Lordships’ House applauds her and Peers for the Planet for their enormous amount of work, but I am afraid that, on this occasion, I disagree with her. I speak to Amendment 40, to which I have attached my name, and government Amendment 38, to which the noble Baroness has offered her support. I am afraid that

“must keep under review … sustainable development”

is a very weak form of words.

I understand that the noble Baroness seeks compromise and is taking what she can get. It would be lovely to be in a situation where we can start with a government Bill that says these things and then look to improve it. None the less, in speaking to Amendment 40, I am in the curious position of agreeing with the noble Baroness, Lady McIntosh, about the amendment and totally disagreeing with lots of the things she said. If offshore wind farms are spaces from which fishers are barred, they can become wonderful marine refuges, and if we are talking about damage to the seafloor, then deep sea trawling is the issue we should be talking about, and, most of all, damage to marine life. Indeed, if we are talking about biodiversity, solar farms managed in the appropriate way can be vastly better for biodiversity than arable farmland, in which the soil and the whole environment are totally trashed.

I am aware of the time, so I will not take long, but I want to point to what this amendment says and contrast “take all reasonable steps” to achieve the legally binding targets versus “keep under review”. This is much stronger wording, it is the right wording for a country that has a state of nature that is in a state of collapse, where there is so much that needs to be protected and improved, and for which we have the legally binding targets to which this amendment refers.

[Earl Russell (LD)]

My Lords, I rise very briefly to say that I too have put my name to this amendment and I am delighted that the Minister, the noble Lord, Lord Hunt, and the noble Baroness, Lady Hayman, have been able to negotiate this compromise. It is important that this is in the Bill; it will make a difference and I am very pleased to see it here. It also reflects the language that was used in the Crown Estate Bill and that is particularly useful for GB Energy because of the strong connection they have with one another. I welcome the words that the Minister used at the Dispatch Box, mentioning the Climate Change Act 2008 and the Environment Act 2021. I welcome the monitoring that is taking place on this.

I have some sympathy with the noble Baroness, Lady McIntosh. These are obviously all very difficult conversations, and the noble Baroness, Lady Hayman, put that quite well. Actually, the way we talk about it, the spirit in which we put these things into place and how we make them work in practice are the big challenges that we all have, going ahead, but I am very pleased to see this here.

[Baroness Coffey (Con)]

My Lords, I will speak to Amendments 40 and 47. I have recent ministerial experience of the Environment Act and the powers available under it, which is why I tabled some Questions for Written Answer. I was somewhat confused by the responses from the Government. When I asked whether they would publish their assessment, under Section 20 of the Environment Act, about not having the effect of reducing the level of environmental protection, I was informed by the Minister that the information was “legally privileged”. It surprised me that the Government, who are committed to the environment—I do not dispute that—are not prepared to share with the House why they do not think this will have an adverse impact on the natural environment. I went further, asking which provisions would be “environmental law” or would impact, and I was referred to Clause 3.

Under the Environment Act, the Minister is not required to ask the advice of the Office for Environmental Protection, but I would be grateful to know whether he, or any other department, has done so. Again, that sort of information would be useful to this House, recognising that we still do not have the strategic priorities—we have the objects, but nothing wider than that—in our consideration of this. I know for sure, from living in Suffolk—I referred to this in my earlier contribution today—of the significant impact that this energy infrastructure can have.

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[Lord Fuller (Con)]

My Lords, I shall speak in support of my Amendments 50 and 52.

They say that a nation is never more than three meals away from revolution. In the 80 years since we had to dig for victory, we have developed ever more exotic tastes, which in turn have spawned new crises from which only a first-world nation could suffer. Who can forget the filo pastry incident? While memories of hunger have faded, the need to put bread on the table has not gone away. Our nation sustains itself on the kindness of strangers, and the proportion of food that we grow ourselves has diminished and is now barely over 60%.

Last year, we had a nasty shock: the weather was bad, and a record number of farmers put land into environmental schemes. Only at the very last moment did Defra realise the jeopardy that we were placing ourselves in. Those schemes were suspended and limited plantings resumed, but it was too late to stop a 25% reduction in wheat production last harvest.

This year, it looks as though plantings have bounced back. However, that 25% fall in food production was a salutary warning about the fragility of our food supplies and a warning that we should not recklessly discard our farmland. It was a wake-up call because when land is converted to solar production, it is locked away for a generation—

[Earl Russell (LD)]

I think the reduction in last year’s harvest was due to the persistent wet weather and not anything to do with solar power.

[Lord Fuller (Con)]

My Lords, if I may correct the noble Earl, Lord Russell, I said that bad weather played a part but that a major contributory factor was the volume of land that was placed into environmental schemes, not solar. I am going to go on to solar in a moment, because we will then be talking about the future and not the past.

When land is converted to solar production, it is locked away for a generation—at least 30 years—and the ability for farming to bounce back and repair the shortage that we saw last year falls away. That Rubicon is crossed. Food in your belly ranks as the most basic human need. When the chips are down, you cannot eat a solar panel, to mix metaphors. Quite simply, these amendments make it clear that GB Energy should not entice, invest, promote or encourage land-hungry solar farms to be built on our best and most versatile land.

When I tabled similar amendments in Committee, I contemplated that GB Energy should be prevented from buying grade 1, 2 or 3 land for the purposes of renewable energy production more generally. I invited the Minister to meet me to discuss the issues that I raised. I am grateful to him for having done so. In the meantime, I have taken standings from other quarters. As a result, I have adjusted my approach this time to limit the scope of my amendments to grade 1, 2 and 3a land only and to restrict it to the promotion of solar panels alone, rather than renewable sources that are less hungry for land. I hope that, by modifying my approach, the Government might do likewise.

Your Lordships’ Library tells me that grade 1, 2 and 3a land comprises 42% of the cultivated area of Great Britain. By difference, therefore, 58% of agricultural land would still be available for solar energy under my proposal. It is not the best and most versatile land that feeds us. For solar, 58% is plenty to go at; it is about 12 times the size of Norfolk or over two and a half times the size of Wales.

Last time, the Minister rejected my proposal on the basis that there really was nothing to worry about. It was not expected, he said, that any more than 1% of the land—much less than is currently devoted to golf courses, apparently—would ever be submitted for renewables and that this really was not something that GB Energy should be concerned about, and certainly not him. On another occasion, the Defra Minister told your Lordships’ House that grade 1 and 2 land would not be part of the large-scale solar scene—move along, nothing to see here—and that, in any event, this was not the place to debate these matters.

They might not be worried but I am, because the Government have lost control of the numbers on solar. Let us examine those numbers. In Lincolnshire, a county that does more than any other to put bread on our table, already 2% of the land is under threat. Worse, thanks to my noble friend Lord Frost, who is not in his place, we learned that the majority of the Heckingham proposal is predominantly for the best grade 1 land under the rules laid down 60 years ago.

In response to a Written Question last November, the Government told me that only two farms, amounting to 1,400 hectares, were being assessed under the NSIP regime. There are five such schemes in the county of Norfolk, where I live, comprising over 7,500 hectares. We were told from the Dispatch Box that there would be no grade 1 or 2 land included in the Sunnica proposal, but there was.

Warm words and soft soap have been spoken around the Government’s proposals for a land use framework. That is something that should be welcomed, but they are only proposals, they are subject to consultation, and, in any event, they would be advisory and not statutory, and so not something that you could hang your hat on. Nevertheless, we now learn that this framework contemplates that fully 9%—not the 1% we were assured—of our farmland will be subsumed under non-agricultural uses to meet our renewable energy and other environmental objectives.

On so many levels, the Government’s rhetoric is at odds with the reality. They have lost control of the numbers and in so doing are imperilling our food security, which is national security.

Given that the Government’s promised indications have unwound so quickly—rather like a summer shower evaporates on a hot solar panel—I do not consider that the Minister has earned the benefit of the doubt on this matter. For this Bill is before us now, this evening—or should I say this morning? It is in the here and now, so this is the moment to ensure that Ministers are required to give direction to GB Energy to take sufficient and proportionate account of our food security alongside energy security.

I will not dwell quite so deeply as I did before on the reasons why we should be concerned about the impact of the uncontrolled growth of solar panels on our food supply. Suffice to say that on the economics, a farmer would do well to earn £200 an acre from the fruits of his labour, having invested millions in plant and equipment, and taking his chances with the risks of weather and the market. By contrast, solar developers are offering him the chance to sit on the beach with an index-linked £900 per acre or more for the next 40 years. The incentive there is to go way beyond the 1% and put our nation’s food security at risk. It is our responsibility to contain and to prevent the uncontrollable contagion—in fact, a stampede for solar on the best and most versatile land, leaving us vulnerable and ever more susceptible to the supply shocks and inflation on the food goods that every person must buy every day.

I am grateful to the Minister for facilitating a meeting with the new chairman of Great British Energy. At that meeting, Herr Maier conceded that his company would be a private company but one that would need to act in the public interest. That was reassuring, although I was struck by how it seemed to be news to him that saving customers £300 a year was within his remit. However, now that this important public principle has been accepted, I really do not see the prejudice in enshrining those public benefits in statute to direct the Secretary of State to balance food security alongside energy security, to avoid the risk that a private company established under the Companies Act 2006, with statutory duties to promote its own self-interest, will not get carried away on a frolic of its own in pursuing its own energy-related objectives while blind to the wider impact.

That is why I have presented this amendment in the way that I have. Amendment 50 is significantly less restrictive than the one I previously suggested. It follows the pattern in principle of government Amendment 38, but it is related to ensuring that solar farms and energy security versus food security are correctly balanced—in fact, the appropriate balance with the Secretary of State’s directions to GB Energy to balance between energy and food security and the public and private interests.

I do not want anybody to misrepresent what this amendment is demanding. It is not a ban on solar; well over 50% of the land would still be available for it. It is not restricting renewable energy on our best land. I am not saying that GB Energy should not invest in solar in any way, shape or form; I am saying that the best land should be reserved for food production, and the less good can be preserved for other purposes. It is in the national interest that it is done this way.

The Minister has said that he has sympathy with my arguments but that this is not the device or place to make these points. However, I fundamentally disagree. As a private company with £8.3 billion burning a hole in its pocket, you would expect GB Energy to set the tone, to provide expectations and to be the physical expression of what the Government expect, so this is exactly the right place and moment to shape our nation’s future energy supplies. If we do not do it here and now, where will it be done, and when, or are we just prepared to risk further legislation to rein in GB Energy later, as we have needed to do this evening with the water Bill that flows through this House?

I am very interested to hear what other noble Lords may have to say on this matter. It is a serious one, and there is nothing more serious than ensuring that our nation is fed. I hope that the noble Lord, even at this late stage, will concede, as he has done on the similarly worded Amendment 38, that this is a reasonable, sensible and proportionate way of ensuring that GB Energy does not get carried away on solar. If he does not, I regret to say that, even at this late hour, I am prepared and minded to test the opinion of the House.

Great British Energy Bill

Earl Russell Excerpts

Report stage
Tuesday 11th February 2025 Lords Chamber

[Lord Vaux of Harrowden (CB)]

My Lords, I shall speak to Amendment 37 in this group and to Amendment 1, which has been introduced by the noble Baroness, Lady Noakes, and to which I have added my name. Before I start, I thank the Minister and his team for the very constructive and helpful discussions that we have had since Committee. We have made good progress and I am very grateful. I also thank the noble Baroness, Lady Noakes, and the noble Viscount, Lord Trenchard, for their support for my Amendment 37.

The noble Baroness, Lady Noakes, has already introduced Amendment 1 with her usual clarity, so I will try not to repeat her too much. As we discussed at some length in Committee, this Bill creates GBE as an entity, but nowhere does it set out what GBE is actually expected to achieve—what its aims or objectives are. As the noble Baroness just pointed out, Clause 3 sets out its “objects”, but we should be completely clear that the objects set out only what the company is allowed to do, not what it is intended to achieve. The only place where the company’s aims will be set out will be in the statement of strategic priorities in Clause 5. However, we have not seen these, even in draft. They will be published sometime in the future and are not subject to meaningful parliamentary scrutiny. They will be laid before Parliament, but there is not even the level of scrutiny that may be applied to a negative statutory instrument. Your Lordships’ Constitution Committee described this as being “disguised legislation”.

It is important that the Bill should include, at least at a high level, some statement as to what GBE is actually intended to achieve. The noble Baroness, Lady Noakes, should be commended for not trying to score political points with her Amendment 1, which is why I have supported it. I think that she has tried to align the objectives in her amendment with what the Government have said are the goals for GBE, so I hope the Minister will look kindly on it. If not, and if the noble Baroness were to divide the House, I would be minded to support her.

My Amendment 37 covers similar ground to my amendments in a later group. I apologise: I was told at a late stage to degroup them on the advice of the Public Bills Office, for some esoteric reason that I am not sure I fully understand. These amendments all try to inject some much-needed transparency and accountability into the Bill—something that is currently somewhat lacking. The only reporting that GBE must do, as it stands, is the annual report and accounts that it must file in accordance with Section 441 of the Companies Act. We had a lot of discussions on this in Committee and the Minister undertook to write to set out the additional requirements that will apply to GBE as a publicly owned entity. I thank him for his letter, which I think satisfies the first three proposed new paragraphs of my Amendment 37. The element that would still not be covered, as the noble Baroness just pointed out, is the assessment of the extent to which the investments or partnerships entered into by GBE have encouraged additional investment by the private sector.

This is extremely important. If all that GBE does is make investments that would happen anyway in the private sector then that would not be a good use of public money. Indeed, it could actually damage the creation of a thriving market for financing green energy—the well-documented concept of crowding out. There is an important role for GBE, just as there is for the UK Infrastructure Bank, now called the National Wealth Fund, to act as a catalyst to kick-start or accelerate investment in new technologies where the private sector is not yet ready to invest. There is a good precedent for this: it can be very strongly argued that the offshore wind industry, now so successful, would have been much slower to develop without the initial backing of the European Investment Bank, which the UK Infrastructure Bank was designed to replace in this country.

If the Minister will confirm clearly that he would expect GBE to report in its annual report and accounts on the extent to which it achieves additionality then I will be happy not to press Amendment 37.

[Earl Russell (LD)]

My Lords, I will speak to my Amendment 17 in this group. This probing amendment seeks further clarity from the Minister on the Government’s commitments to Great British Energy’s budget. It seeks information on the timing of the delivery of the budgets that have been promised and further clarity on Great British Energy’s ability to borrow funds in the future.

I have raised a probing amendment on Report because, as we have heard, this money is still subject to the spending review, and we have seen recent announcements from the Chancellor surrounding growth. For those reasons, we seek clarity that the £8.3 billion up to 2029 is available as promised and will be delivered. We previously saw cuts to Labour’s £28 billion green deal before the election. The key thing—and I hope the Minister will agree—is that there is absolute clarity on these matters; that is needed for securing the £60 billion in private investment. We need clarity and consistency in policy direction, which I hope this Government will maintain.

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[Lord Hamilton of Epsom (Con)]

I am grateful to the noble Earl. He said that he thinks that green energy will lower costs. So far, green energy has actually raised costs. Why should it lower costs in the future?

[Earl Russell (LD)]

I thank the noble Lord for his intervention. Green energy over time will lower costs. There is an initial hump to get over with investment, but the trouble that we need to address is our increasing and continued dependence on the vast fluctuations in foreign gas markets. We saw what happened with the war in Ukraine, and we saw that the noble Lord’s Government had to invest £40 billion towards subsidising bill payers—money that was invested for no long-term benefit. We must get away from those things and we must have energy security. These are investments in Britain and in reducing our bills, and they are worthwhile doing. It is really important that GB Energy invests in these emerging technologies. That is why I have raised my amendment on GB Energy’s ability to borrow; if GB Energy cannot borrow it will not be able to make these key investments.

Amendment 20, tabled by the noble Lord, Lord Offord of Garvel, and the noble Earl, Lord Effingham, is about the annual report and financial assistance provided to GB Energy. We expect this to happen, so do not feel that the amendment is necessary.

We support the spirit of Amendment 37, but expect the Treasury to require all these areas to be reported on. Having reflected on what was said in Committee and the Minister’s response, we expect GB Energy’s reporting requirements to be similar to those of the Crown Estate. It would be useful if the Minister could confirm that.

Amendment 39, in the name of the noble Lord, Lord Frost, and supported by the noble Viscount, Lord Trenchard, is one of the strongest Conservative amendments to be tabled on Report. We have some sympathy with proposed new subsection (1), which is similar to an amendment I moved in Committee. At that stage, it did not win the Minister’s favour—I suspect that that might be the case again today. Where I slightly part company with noble Lord, Lord Frost, is in relation to the annual review for the chair of GB Energy. My view is that an important and good annual review would not be one that was fully made public. To me, that seems a slightly strange request, and may be counterintuitive to the object which he seeks.

I am going to stop there as I have run out of time and there are a lot of amendments in this group.

[Baroness Coffey (Con)]

I support Amendment 1, in the name of my noble friend Lady Noakes. I should declare at this point that I live about five miles away from Sizewell B nuclear power station and one that is about to be built, Sizewell C, and less than a mile away from other energy infrastructure that is still going through the planning process.

A lot of my time at the other end was taken up with considering the importance of energy, not only for a long-term sustainable future but the security issues rightly referred to in these objectives. The reason these objectives matter is that this is an unprecedented situation, where we are handing, in effect, a blank cheque to an arm’s-length body. Admittedly, it will have strategies set by the Secretary of State, but, as has been pointed out, there will be absolutely no reference to Parliament in its consideration. That is why the amendment tabled by my noble friend Lord Frost has attraction, in proposing at least having a direct connection with two Select Committees of the other place and a relationship with the chair of GB Energy. As my noble friend pointed out, these are the reasons that the Government gave us for having this new entity. Therefore, it would make a lot of sense for the Government to accept this amendment directly.

On Amendment 17, where I disagree with the noble Earl, Lord Russell, is that I do not believe we should get into legislation that dictates the amount of taxpayers’ money that will be spent. I have seen that happen before in legislation, and then all of a sudden money starts getting wasted. The whole purpose of this financial vehicle is to de-risk and bring in external private investment. That is a sensible approach, especially given the amount of uncertainty, which I appreciate the Government are trying to address in other ways. Nevertheless, for something such as energy security, a significant amount of investment is going to be required right across not just Great Britain but the United Kingdom, and this is a critical moment for our nation. That is why, while I think there will be money well spent, we should not be dictating a minimum.

The amendment tabled by the noble Lord, Lord Vaux of Harrowden, is really sensible. This company will be in an unusual situation—not unique, but unusual—and the extra information required, particularly in proposed new paragraph (d), is the core essence of why this company is being set up: it is stepping forward to try to get others to do so.

If anything, what has evolved over many years is the need for transparency and understanding. The amount of trust that people have in how their taxpayers’ money gets spent really matters in the contract that Parliament and government have with the electorate—the taxpayer. So, elements such as this will enforce the rationale rather than just necessarily seeing energy bills tick upwards, unfortunately.

So if Amendments 1 and 37 are pressed, I will certainly support them—although, regrettably, not Amendment 17 from the noble Earl, Lord Russell.

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[Lord Hunt of Kings Heath (Lab)]

My Lords, Amendment 8 relates to Clause 3 and makes it clear that community energy is within scope of the objects of Great British Energy. I am grateful to the noble Earl, Lord Russell, for his support and for our engagement between Committee and Report.

We had an interesting and somewhat lengthy debate in Committee on the role of community energy. I have always recognised the important role that community energy can have as we strive for clean power and net zero. Following positive discussions across the House, particularly with the noble Earl, Lord Russell, I accepted that the role of community energy could be made explicit in the Bill. That is why this amendment has been tabled. It sets out a clear intention that local and community energy is important for Great British Energy and the Government.

GBE will enhance existing support for community energy. This will be done through partnering with, and providing funding and support to, local and combined authorities, as well as community energy groups. This is very important. To support community energy groups to access funding and to establish themselves in all areas of Great Britain, GBE will provide commercial, technical and project-planning assistance, increasing the capability and capacity to build a pipeline of successful projects in local areas. This has clearly been missing in the current arrangements, where lots of local groups want to develop community energy but find it difficult to access advice and access the pathway to finance. GBE has a really important role to play here. I beg to move.

[Earl Russell (LD)]

My Lords, I support government Amendment 8 and will speak to my Amendments 14 and 25. I am deeply grateful to the Minister for putting community energy in the Bill with Amendment 8. It is now clear that Great British Energy may facilitate, encourage and participate in those things mentioned in Clause 3(2)(a) to (d) through projects involving or benefiting local communities.

I am really pleased, as this is a win for MPs on all sides of the other Chamber and for noble Lords on all Benches in this Chamber. There is notable strong cross-party support to see community energy in the Bill. It was a key objective for us, and I am delighted that we have had a successful negotiation and got this done. We have the third-best wind resources in the world. It is our view that there can be no Great British Energy without Great British community energy. With this amendment, our objective has been achieved.

It is worth noting that, as the Minister said, GB Energy has a unique role here. When Jürgen Maier was before the Energy Security and Net Zero Committee he talked about a system coming “out of the box”. That is exactly it—going into local communities, GB Energy will be able to deliver community energy and engage with them from start to finish.

I remind the House that community energy could deliver up to 8 gigawatts and power 2.2 million homes, saving two nuclear reactors-worth of energy. It could remove 2.5 million tonnes of CO₂ and provide over 30,000 jobs. What is not to like about that? I am delighted that we have made progress on this and I thank the Minister.

Moving on, my Amendment 25 is a probing amendment in response to a question that my counterpart, Pippa Heylings, asked in the Commons this week about the fact that, at the moment, the £10 million community energy fund is oversubscribed. Some 100 projects are unable to get funding, and the money is due to run out in May. While I greatly appreciate getting community energy into the Bill, can the Minister provide clarity on what will happen with that fund? Is he able to put more money in? Is there an interregnum until GB Energy can start funding it? Ed Miliband gave very strong words in support of community energy but did not really answer my honourable friend’s point about the money. If the Minister can provide any more certainty or say whether this is being looked at, that would be appreciated.

Amendment 14 is our warm homes plan and emergency home insulation plan. It requires the Government to transfer the responsibility for the warm homes plan to GB Energy should it be requested. We have some of that coldest, dampest and most miserable homes in Europe. UK housing stock accounts for around 7% of total carbon emissions. They are among the least energy-efficient homes in Europe, with 12 million homes in England alone currently falling below adequate energy efficiency standards. The UK Climate Change Committee has said that residential retrofits need to increase to a rate of 500,000 a year by 2025 and 1 million a year by 2030 to meet our climate targets. This is a huge and daunting task. It is one of the biggest infrastructure tasks of the 21st century.

Our citizens have suffered cold, damp, draughty and unhealthy homes for far too long. In the single largest housing-related cost burden to the NHS in 2023, some £50 million was spent fighting cold-related illness. Homes cost more to heat than they should because they do not retain the heat that the homeowners pay for. The best energy of all is the energy that we never use, in particular the energy that we do not waste on absolutely nothing. Energy efficiency remains a missing part of overall energy policy. Citizens should not have to choose between heating and eating. In this country, 6 million people live in fuel poverty, while at the same time we are wasting this energy. It is utter madness.

The last Government completely failed to tackle this problem. They cut the funding and the ambition to deliver warm homes and to insulate our homes. That was not good enough. Carbon Brief calculated that UK energy bills were £22 billion higher over the past decade than they should have been because the Conservatives cut the “green crap”. The number of homes being insulated each year at the start of 2024 was 98% below 2012 levels. Of that £22 billion, £5 billion was due to poorly insulated homes and £3 billion was because homes were being built that were not meeting energy efficient standards.

However, no Government of any persuasion has ever managed to tackle this problem. It is a tough nut to crack, even with the best will in the world. Going house-by-house and retrofitting our mixed housing stock is an extremely challenging undertaking. I welcome this Government’s commitment to the warm homes plan and the £6.6 billion in funding that has already been provided. The programme that the Government are setting out will provide low-interest loans to support families to invest in insulation, encourage low-carbon heating and enable the retrofitting of our homes. The Climate Change Committee has estimated that £3.15 billion is probably the total cost of getting this done, but I welcome what the Government are doing. My amendment is not a criticism of that but is here to support.

The burden is on the private sector, where 90% of these properties are owner-occupied and not meeting standards. We need to do stuff with the over-65s, because that is a particular problem. We need to tackle fuel poverty, as we have 2.26 million homes in fuel poverty as of 2022. We need new financing options, particularly green mortgages, so that private home owners can take the cost of making these measures and put them against their mortgage, and we need similar situations for people in the private rented sector.

This is good, though. The New Economics Foundation has said that every £1 spent of public investment could generate £4.60 in capital expenditure and £6.90 in broader economic activity; this is good for our homes and our economy. It could create thousands of green jobs and increase local UK supply chains.

I am worried about the delivery of these plans; that is why I have put this amendment forward. I recognise that the Government are exploring these issues as we speak and that my amendment is a bit radical and left field. I say to the Minister that this is difficult, and at a time when the Government are also trying to put in solar panels and heat pumps. I am not the only person to be concerned about delivery of these plans. I recognise that GB Energy is an independent organisation. My amendment is not prescriptive; it is simply about not ruling out options from the start. It is about making sure that that door is not closed to GB Energy from before it is set up; it is about making sure that there is space for those conversations to take place.

If my amendment passes and GB Energy never approaches the Government or the Minister to say that it wants to take any of this on, for whatever reason, then my amendment does no damage at all; it makes no difference whatever. It comes into play only if GB Energy approaches the Minister and says that it has the skills and the contacts within the industry, that it fits with its community energy plans, and that it wants to do this and make a difference. This amendment, if it does nothing else, allows these conversations to take place, and I think that is a good thing. I dare the Government to be different and take a different approach to this daunting and challenging task.

[The Deputy Speaker (Baroness Watkins of Tavistock) (CB)]

My Lords, I apologise. I failed to make it clear at the beginning that, as Amendment 9 is an amendment to Amendment 8, I have to call Amendment 9.

Amendment 9 (to Amendment 8)

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[Earl Russell (LD)]

The aim of my amendment is not that GB Energy should pay for it; I feel that GB Energy would be a good body to deliver it.

[Baroness Boycott (CB)]

Okay.

--- Later in debate ---

Moved by

[Earl Russell]

14: After Clause 3, insert the following new Clause—
“Warm Homes Plan and emergency home insulation(1) The Secretary of State must accept any request from Great British Energy to have responsibility over the delivery and implementation of the Warm Homes Plan.(2) If Great British Energy makes a request under subsection (1), the Secretary of State must provide support to Great British Energy following the transference of responsibility.(3) If Great British Energy becomes responsible for the delivery and implementation of the Warm Homes Plan, that delivery must include an emergency home insulation programme which—(a) provides targeted support for people on low incomes,(b) seeks to achieve to the reduction of household energy bills, and(c) contributes to the achievement of the United Kingdom’s climate and environmental targets.”Member’s explanatory statement
This amendment requires the Government to transfer responsibility for the Warm Homes Plan to GBE should it be requested and further requires GBE to introduce an emergency home insulation programme that would seek to reduce household energy bills, and contribute to achieving climate and environmental targets.

[Earl Russell (LD)]

I appreciate the Minister’s response and what the Government are doing in relation to the warm homes plan. I also appreciate the commitment he has given, in time. My amendment is not prescriptive; it is simply about keeping those conversations open. I think that GB Energy could fundamentally have a role in delivering all or part of the plans, and I wish to test the opinion of the House.

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[Lord Petitgas (Con)]

My Lords, in moving Amendment 15 I will also speak to Amendment 16 in my name. I will start with Amendment 16, which seeks to establish baseline investment governance for GBE. Remarkably, the Bill as drafted provides no clear framework for GBE’s investment decision-making process, leaving critical questions of accountability unanswered. This amendment is a necessary safeguard for three reasons.

First, it addresses the glaring governance gap that I just spoke about. The Bill delegates ultimate authority to the Secretary of State but offers no clarity on how GBE itself will assess value for money or who, within GBE, will be accountable for such decisions. Without defined governance structures, we risk approving an open-ended cash flow without proper oversight. This is simply not acceptable when billions of taxpayer pounds are at stake.

Secondly, it highlights the need for financial expertise and accountability. At Second Reading the Minister suggested giving GBE free rein to pursue opportunities with an entrepreneurial spirit—I think he mentioned independence today. While I sympathise with this ambition, GBE is neither a venture capital fund with a proven investment committee nor a publicly traded company like Ørsted in Denmark, subject to rigorous market scrutiny. In the absence of such mechanisms, it is imperative that His Majesty’s Treasury provides oversight. We need experienced financial professionals—dare I say grown-ups in the room?—to ensure value for money, while balancing financial returns with broader strategic goals.

Thirdly and lastly, Amendment 16 is designed to ensure public trust and confidence. Some may argue that setting governance requirements could stifle innovation. On the contrary, clear accountability and oversight would enhance GBE’s credibility and reassure taxpayers that their money is being managed responsibly. Without these safeguards, we risk undermining trust in this ambitious initiative.

This amendment does not constrain GBE’s mission; it strengthens it by ensuring robust governance and responsible stewardship of public funds. In summary, we are asking for clarification from the Minister of how GBE’s spending will be monitored and how the Government will ensure value for money.

Amendment 15 seeks to establish a cap on the level of funding for GBE. While the Government have allocated £8.3 billion for this initiative, the Bill lacks clarity on whether additional funding may be sought without parliamentary oversight. This amendment is prudent and necessary, again for three reasons.

First, it ensures fiscal discipline and taxpayer protection. GBE’s mission is to attract private investment into renewables but, as we have said several times, there is absolutely no shortage of private capital in this sector. Companies such as Iberdrola, SSE and National Grid have already committed billions to clean energy projects, so there is a clear risk that GBE’s funds will be directed towards high-risk or less attractive ventures like a magnet. As the noble Lord, Lord Mandelson, once said, when politicians try to pick winners, losers invariably find the politicians. A funding limit would safeguard taxpayers, while allowing GBE to prove its effectiveness and build a track record.

Secondly, Amendment 15 aligns with precedents and market practice. Other government initiatives aimed at crowding in private investment have operated within defined financial limits. Moreover, to me, GBE’s structure resembles that of a venture capital fund holding minority stakes in multiple projects. It would be unheard of for such a fund to operate with open-ended financial commitments. That would undermine investor confidence and fiscal accountability.

Thirdly and lastly, a cap signals discipline, not doubt. Some may argue that limiting funding could project a lack of ambition. On the contrary, in an era of fiscal scarcity, such a measure would demonstrate resolve and responsible stewardship of public resources. It would also encourage efficiency in achieving GBE’s objectives while maintaining credibility with Parliament and the public.

This amendment would not hinder GBE’s goals. It strengthens them by ensuring accountability and the prudent use of public funds. I am minded to test the opinion of the House on Amendment 15.

[Earl Russell (LD)]

My Lords, I rise from these Benches to speak against Amendment 15 in the name of the noble Lord, Lord Petitgas. His amendment seeks to add a limit on the maximum amount of money that the Secretary of State can provide to GBE—anything above and beyond the £8.3 billion that the Government have committed to. We strongly oppose this amendment. The noble Lord talked about resolve, strength and all these things, but I do not agree with any of that. It is not for the Opposition to use an amendment to legislation to determine what funds a Government can spend on something in the future, when we do not know what is going to happen.

Just this week we have talked about the Drax situation; the Government have halved the subsidies to Drax. The money that the Government are saving from having to subsidise Drax is money that could well go to GB Energy—for example, to fund the long-duration energy storage that we desperately need, so that we can do the transition and keep the lights on. The money should be used for other renewables projects.

It is for the Government to make day-to-day spending decisions and they are accountable for the decisions they make, as GB Energy is accountable to the Treasury and the public for how it spends its money. Ultimately, the Government themselves are responsible to the public, but I do not think it is for the Opposition to put a cap on what Governments can spend. Core spending is a decision for the Government, so this would be a highly unusual amendment and, if it is put to a vote, we will oppose it.

[Lord Offord of Garvel (Con)]

My Lords, I support the amendments in the name of my noble friend Lord Petitgas. In tabling his amendments, my noble friend looks to protect the taxpayer while securing the financial integrity of GB Energy, establishing that GB Energy’s attempt to ramp up renewables must not come at the cost of fiscal responsibility and £8.3 billion. The drafting of Clause 4 is far too ambiguous. We must introduce sufficient safeguards by limiting the scope that the financial powers in the Bill afford the Secretary of State. The taxpayer is coughing up a significant £8.3 billion into an investment vehicle that, as my noble friend Lord Petitgas said, has the potential to completely de-risk the profits of multi-million pound energy companies. Meanwhile, the Government have cancelled winter fuel payments, introduced an NI jobs tax and launched a raid on British farmers, all to save money.

The reality is that £8.3 billion is actually a very tricky number. On the one hand, it is a lot of money, a big, significant investment into energy. On the other hand, in the scheme of energy investment required, it is a relatively inconsequential figure, especially when we talk about wind farms being built out to the potential tune of £100 billion. Either way, whether we consider that to be a big or a small number, the taxpayer deserves to know that the Government are deploying public funds appropriately. The Bill contains no limitation on how much financial assistance GB Energy will receive, there is no cap on the money that can be pumped into GB Energy and nor does the funding have to undergo any approval. What is to stop GB Energy becoming a bottomless pit?

Clause 4 states:

“The Secretary of State may provide financial assistance to Great British Energy”.


But, again, we are lacking in detail on ways to hold the Secretary of State and GB Energy accountable. We have seen no method to restrict the amount of financial assistance the Secretary of State may provide, nor do we understand how the success of each investment will be measured, or indeed reported on. I trust that the Minister will take these amendments seriously. Our transition to net zero must be done with an eye to fiscal responsibility, ensuring that the energy transition is both sustainable and affordable.

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[Baroness Bennett of Manor Castle (GP)]

My Lords, I offer Green support for Amendment 18 in the names of the noble Lord, Lord Alton, and a range of other distinguished Members of your Lordships’ House. I will also speak to my Amendment 19, which goes further than the amendment from the noble Lord, Lord Alton, but which demonstrates just how moderate and reasonable his amendment is. Your Lordships’ House, the British Government and many parts of British society have long expressed their absolute horror at modern slavery, so surely we can put this into this important Bill, where it is such a crucial issue, as the noble Lord, Lord Alton, identified.

The noble Lord mentioned the Democratic Republic of the Congo and how the issues of modern slavery there, as well as child labour amounting to modern slavery, are very much an issue in terms of the energy supply chain. My amendment refers to

“credible evidence of deforestation or human rights abuses”.

I will take human rights abuses first. Much of what is happening in the Democratic Republic of the Congo might not fit the definition of modern slavery, but it absolutely fits the definition of human rights abuses. I note that I was at a briefing today with the DRC Foreign Minister, Thérèse Kayikwamba Wagner, who gave us the news, which has since been more widely reported, that, sadly, the ceasefire that had been called in the eastern Congo had been broken by M23, backed by the Rwandan Government. We have already seen nearly 3,000 people killed and some 3,000 people injured, and we heard from the Foreign Minister that, sadly, they expect those figures to rise very significantly. These are violent human rights abuses—there is simply no other term.

To tie this to the Great British Energy Bill, it is worth noting that the DRC produces 70% of the world’s cobalt, yet it somehow disappears without trace and reappears out the other side as legal, apparently appropriately sourced material, without any traceable chain to account for that. Of course, the people of the Democratic Republic of the Congo do not benefit financially from that. It is others—damaging, dangerous, aggressive forces—who benefit from it.

I wrote the amendment in this particular way because it goes back to the passage of what became the Environment Act, during which a number of noble Lords here today had much the same debate, with the tying together of deforestation and human rights abuses. One of the issues here is that indigenous people are responsible for protecting huge amounts of the world’s forests, and abuse of their rights is very much tied to the destruction of deforestation. I will note just one stat: if deforestation was a country, it would be the third-largest emitter of carbon behind China and the US. Much of that deforestation is of course linked in particular to agriculture. But in the DRC and parts of Latin America in particular, mining and deforestation are intimately linked.

So, your Lordships’ House has before it two amendments. I do not plan to push mine to a vote, but I offer the Green Party’s strongest support to the noble Lord, Lord Alton, for his amendment. How could we not vote to ensure that there is action on modern slavery?

[Earl Russell (LD)]

My Lords, I will speak also in favour of Amendment 18 in the name of the noble Lord, Lord Alton of Liverpool, and supported by the noble Baroness, Lady Kennedy of The Shaws, and the noble Lords, Lord Offord and Lord Teverson. I will speak briefly and will not repeat the arguments that I made in Committee.

We believe in people and planet, and we should never have to choose one or the other. The two are intertwined and co-dependent. Our goal of reaching net zero must not come at the expense of supporting repressive regimes that do not support the human rights of their own citizens, or on the back of slave labour.

In brief, we are very supportive of the intentions behind this amendment, but we feel that the ultimate solutions lie above and beyond GB Energy. The real solutions in the UK are about working with our allies and partners to develop our own manufacturing capacity for solar panels in particular, so that we are free of those from China. California has made progress on this; it can be done, particularly working with our European allies. This is really important stuff that the Government need to get to grips with.

We do not want to see GB Energy put at an unfair disadvantage vis-à-vis every other private contractor or engineering company doing solar panels in the UK. The noble Lord, Lord Alton, has already spoken about this, but I know that noble Lords will be very grateful to Jürgen Maier for having come and spoken to us. Unfortunately, I was off at the time, but my understanding is that it was a very good and productive meeting, and that he gave very strong and powerful arguments and responses to questions that were put to him on these issues. GB Energy, as we know, also has lots of stringent reporting requirements in place, including under the Modern Slavery Act.

Heat Networks (Market Framework) (Great Britain) Regulations 2025

Earl Russell Excerpts

Monday 3rd February 2025 Grand Committee

[The Minister of State, Department for Energy Security and Net Zero (Lord Hunt of Kings Heath) (Lab)]

My Lords, these regulations were laid before the house on 28 November 2024.

We know that to reach our net-zero commitment and reduce our reliance on international fossil fuels, we must use all the tools we have available. Currently, heating accounts for 23% of the UK’s carbon emissions. Two of our key technologies for decarbonising heat are heat pumps and heat networks.

Heat networks present us with an opportunity to enable a more resilient and flexible future for the UK’s heat, reducing carbon emissions and our future bills. Heat networks are particularly important, as they are in a unique position to exploit larger-scale and local low-carbon energy sources, such as large, efficient heat pumps and waste heat from industry or from natural sources that would otherwise be dumped. Proven internationally to provide affordable, low-carbon heat, heat networks are especially suited to dense urban areas. The Government expect that about 20% of the UK’s heat demand will be met by heat networks by 2050, which will be a significant increase from the current figure, which is about 3%.

We want to do everything that we can to support the much-needed growth of the heat network sector, but we also want to ensure that we deliver a fair deal for heat network consumers. Heat networks currently function as an unregulated monopoly: the 470,000 households that are supplied by heat networks cannot change their supplier if they are dissatisfied with their service or obtain redress if they are unfairly treated. The lack of regulation means that consumers are not guaranteed a fair service: heating is less reliable, suppliers are less transparent and it is harder for consumers to represent themselves or make complaints.

We have been working with consumer groups and have engaged in research that will allow, and has allowed, us to identify where this is happening in the market and what we can do to put in place measures to prevent such activity. These regulations are what we need to put in place to ensure that customers are protected. They stem from the Energy Act 2023, which provides powers for the Secretary of State to introduce regulations across Great Britain that will protect heat network consumers in a way that is rightfully comparable with other regulated utilities.

This statutory instrument seeks to provide protections to heat network consumers that are comparable with activities such as those in the gas and electricity sector. The instrument introduces an authorisation regime to be implemented by Ofgem; this will work in a similar way to the gas and electricity licensing regimes. It takes an outcomes-based approach to reflect heat networks’ diversity of scale and their nascent market position.

The regulations ban running a heat network without an authorisation. Existing heat networks are automatically given an authorisation in order to phase in market regulation. The conditions for authorisation are set by either the Secretary of State or Ofgem, and apply rules for running a heat network. Ofgem will be able to monitor compliance with regulations and act where appropriate.

Actions Ofgem can take include issuing information notices for compliance data, investigating suspected non-compliance, inspecting commercial premises of authorised persons and issuing a range of orders requiring remedial action. Consumer redress orders can also be issued, requiring that affected consumers are given compensation.

These regulations require Ofgem to publish statements of policy on how powers are used. Penalties will be proportionate to the authorised person’s size and the scale of harm that their non-compliance has caused. Additionally, the instrument gives Ofgem powers to set minimum performance standards. Although the scope of these standards is not defined in this instrument, these will include quality of service, outage minimisation and treatment of vulnerable customers.

This instrument also applies Parts 1 and 2 of the Consumers, Estate Agents and Redress Act 2007, with some modifications to apply them to heat networks. These create the roles of consumer advocacy bodies for heat network consumers, providing access to advice. It also extends the Energy Ombudsman’s redress scheme to these consumers. The regulations automatically enrol all heat networks into the scheme.

The commencement dates for some of the provisions are slightly different. This is because delays to the passage of the Energy Act mean that Ofgem cannot commence regulatory activities before January 2026. However, to ensure that heat network consumers are afforded some support before then, we are establishing the roles of the consumer advocacy, advice and redress scheme providers earlier, in April 2025.

Finally, this instrument makes amendments to the Heat Networks (Scotland) Act 2021, following extensive consultations with the Scottish Government. These amendments were made to ensure that Ofgem can regulate consistently across Great Britain.

My department has carried out two consultations to inform these regulations. The first consultation was on creating a market framework, in 2020; the second was on consumer protection, in 2023. Across both consultations, broad support for the structures created in this instrument was expressed. There is an ongoing consultation on the contents of the authorisation conditions, the outcome of which will be published before the authorisation regime commences.

In summary, this instrument represents the important first step in introducing comprehensive utility regulation to the heat network market. It lays the groundwork for a much fairer and just sector where heat network consumers are protected. We expect that this will provide a very good foundation for growing the sector in future. Putting consumer protection at the heart of our agenda is, we believe, a way to inspire public confidence. I beg to move.

[Earl Russell (LD)]

My Lords, I am pleased to say that we are very supportive of the heat networks regulations before us. We broadly welcome these moves, which will start to regulate the heat networks market in England, Wales and Scotland.

These regulations will bring in some much-needed consumer controls and protections for the customers of heat networks. As the Minister said, heat networks are a form of deregulated energy distribution, where heating, cooling and hot water are circulated from central sources of generation to multiple endpoints of use. These can include domestic dwellings as well as public and commercial buildings.

Frankly, it is shocking that heat networks have been largely unregulated to date, despite being an essential utility that is presently used by nearly 500,000 households in the UK. The only legislation that currently applies specifically to heat networks are the Heat Network (Metering and Billing) Regulations, which apply only to metering and billing.

Heat network customers have significantly fewer rights and protections compared with any other energy utility customers in the UK. A report carried out by the Competition and Markets Authority in 2018 found that the existing market was, in effect, a monopoly. It raised concerns about customer protections as this market grows and moves forward. To date, this market has been allowed to operate mostly unregulated. In all other aspects, heat network customers have fewer rights and consumer protections than any other energy customers.

We welcome the Government’s intention to grow this share of the energy market and we recognise that the extension of heat networks can bring benefits to customers as we make the energy transition. We welcome the use of large-scale heat pumps and novel uses of waste heat, particularly in urban areas. The recently announced Bunhill 2 Energy Centre, which will provide heat and hot water to more than 1,350 homes, a school and two leisure centres in Islington, with waste heat from the London Underground, is an example of this type of innovation. In future, waste heat from industrial processes or data centres could be used to provide new forms of domestic heat and hot water from heat that is currently used just as a by-product and released into the atmosphere.

I note the Government’s stated intention to see that some 20% of the UK’s heat demand is met by heat networks by 2050. These regulations are about creating those basic consumer protections for heat network customers so that they have the same protections as everybody else. We want to make sure that this heat network market is fit for purpose so that it can grow and new customers can enter it. At the moment, the lack of consumer protection is the main barrier to growing this market, so we fully agree with the Government on these points. The lack of a properly regulated market needs to be resolved, and we support the Government doing so.

This instrument uses the powers in Chapter 1 of Part 8 of the Energy Act 2023. It defines “regulated activities” in relation to heat networks and provides that anyone carrying out these activities needs an authorisation. Authorisations are to be granted by the Gas and Electricity Markets Authority, GEMA, and in practice by Ofgem. Ofgem will also have relevant enforcement powers and authorisations under the instrument. The regulations give it the powers to carry out this role, including investigative powers to collect information and issue different types of compliance notices, consumer redress orders and variable penalties.

What support will the Government give to very small heat networks and small community heat networks, particularly those with fewer than 50 members? Obviously, with new regulations there is some level of new burden, so are the Government aware of that and doing everything they can to support them in the transition?

As the Minister said, these regulations are only the first step in introducing a much fuller regulatory regime in the months and years to come. The authorisation regime run by Ofgem will come into force on 27 January 2026, but the provisions on consumer advocacy and the redress scheme to be operated by the Energy Ombudsman will come into force on 1 April 2025. How will those two systems work together? What will happen in that interregnum? Will the Minister and the Government ensure that, as they move from one regulatory regime to another, consumers will be protected through that transition?

I want to ask about historical legacy issues, in particular the money the Government gave to people in heat networks. Once these regulations come into force, what will happen to any legacy issues, conflicts or problems that pre-date these regulations?

Finally, in a statement in the other place it was made clear, as the Minister has said, that the Government want to grow heat networks to 20% by 2050. This has not had a lot of discussion in this place or the other place. We welcome this policy, but will the Minister take a moment to say how they plan to grow the heat network market? Beyond these regulations and making the regulatory framework work, what steps are planned to help increase the use of heat networks? What investment framework are the Government looking to use to help bring about more heat networks? What other mechanisms do they have in mind to help grow this market? How will it be reported on? What organisations will oversee the delivery of the increase in heat networks? Finally, does the Minister see a role for GB Energy in increasing the number of heat networks?

Great British Energy Bill

Earl Russell Excerpts

Committee stage
Wednesday 22nd January 2025 Grand Committee

There are two missing great chunks of this issue. There is the recognition that the environmental impact is enormous, and that it requires intimate co-operation —an issue we have come back to again and again of co-operation with new or existing nuclear sites, maybe with small reactors on them instead of the big ones. There will have to be co-operation there, because most of the nuclear sites are on the sea and most of the switching stations obviously have to be on the sea as well, presumably in similar places. I do not know; this is all left completely undecided and undiscussed. It is certainly not mentioned in the Bill at all and I would like some comments from the Minister on that.

[Earl Russell (LD)]

I am sorry, but I am just a little confused which amendment the noble Lord is speaking to. This is obviously not Second Reading and we are not making general speeches. Could he help me with which amendment he is speaking to?

[Lord Howell of Guildford (Con)]

I had actually finished but I spoke repeatedly to the environment amendment. I mentioned it six or seven times. I am not sure what the noble Earl’s motive is. I thought that ought to be clear. Is it not clear?

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Moved by

[Earl Russell]

122: Clause 8, page 4, line 15, leave out subsection (2) and insert—
“(2) This section and section 5 come into force on the day on which this Act is passed.(2A) Sections 1 to 4, 6 and 7 come into force on the day the statement required by section 5(1) is laid before Parliament.”Member’s explanatory statement
This amendment means the Bill cannot come into force unless the statement of strategic priorities has been laid before Parliament.

[Earl Russell (LD)]

My Lords, I stand to open the very last group of amendments as part of the final day in Committee on the Bill. This group is on commencement and, in moving Amendment 122, I will also speak to Amendments 123 and 124. I will be very brief on my amendments in this group, as I feel that I have already spoken to them in the group on strategic priorities during day 2 in Committee, a debate that was so nobly led by the noble Lord, Lord Vaux of Harrowden, who I note is in his place. We had a very good and useful conversation on the strategic priorities as part of that group.

Amendment 122 would require that the strategic priorities are laid before Parliament. I have also tabled Amendment 123, which would require that they be laid before and approved by Parliament, and Amendment 124, which is, as I said, more of a compromise on these issues. It says that the Act

“cannot come into force unless a document setting out the thematic headings of the statement of strategic priorities has been laid before Parliament”.

That last amendment is where I really want to be on these issues.

My sense is that there is a general concern across the House, and across parties, on the need for some further clarity on the strategic priorities, but I welcome the words of the noble and learned Lord, Lord Falconer, at Second Reading. He made a welcome statement that some work should be done to try to find a solution on this. I also recognise that the Minister is in a difficult position here and that there is a need to get on with the Bill. I recognise that these things are being negotiated with the devolved authorities.

My last amendment is really an attempt to try to find a solution to these issues, and my hope is very much that a solution can be found. I hope that the Minister can say something on that solution today and maybe, after further consideration prior to Report, give at least the heads of terms of the kind of things that will be in the strategic priorities. On that, I think we can progress. My worry is that it otherwise feels, from our point of view, a bit like we are signing a blank cheque on these matters. That being said, those are my amendments.

I turn to the three other amendments in this group. Amendment 125, in the name of the noble Lord, Lord Offord of Garvel, is on the publication of a financial framework document and calls for that document to be published before the Act is passed. From my personal point of view, I would like to see some progress on the financial document and what it might contain. I am not certain that I would refuse to pass the Act if it were not published prior to then.

Amendment 126 is in the names of the noble Lord, Lord Hamilton of Epsom, and the noble Viscount, Lord Trenchard. This amendment says that the Act cannot come into force until its impact

“on the number of jobs in Aberdeen”

has been published. We do not feel that we would support that amendment. The development of offshore renewable energy will help to create jobs, and GB Energy will be headquartered in Aberdeen. The exact manner of how that happens is to be seen, but green energy and green jobs are good for our future and the Bill is good for our energy security.

We have had a few conversations about the cost of this Bill and GB Energy. I kindly remind the Conservatives that they spent over £40 billion subsidising energy bills as a result of the war in Ukraine. While that money was useful to those who were suffering in fuel poverty, in the longer term it did absolutely nothing to generate energy security for our country and our future. The biggest cost is doing nothing. To continue to do nothing is not an option that remains open to us, either in terms of preserving our future or of looking after bill payers. In the main, therefore, we welcome the Bill.

I turn, finally, to Amendment 127 in the names of the noble Lord, Lord Hamilton of Epsom, and the noble Viscount, Lord Trenchard, which calls on the Secretary of State to publish a report on the cost and viability of the Government’s net-zero strategy. That is not necessary before the Bill is passed, but I take the point made by the noble Lord, Lord Frost, who is not in his place. It is important that the Government are clear on figures, and those figures should be updated. However, when we have these conversations on cost, they are, unfortunately, very one-sided. The cost is always on one side of the equals sign and not on the other. There is a huge cost in doing nothing. We have seen LA go up in flames, and there are huge predicted costs to the global economy and our future.

The Government, to my mind, must do more in continuing to look at reforming the electricity market mechanism. The Government’s projected direction of travel is for us to electrify, and it is important that we continue to look at the cost of electricity and that the Government continue to work on providing social tariffs and making sure that those in need can afford to heat their homes. With that, I beg to move.

--- Later in debate ---

[Lord Hamilton of Epsom (Con)]

Yes, but the fact that a number have gone already because the industry is declining is not a compelling reason for destroying even more, in my view—but I hear what the Minister says.

Of course, this contrasts tremendously with the inaugural address from President Trump, saying, “Drill, baby, drill”. He is quite keen on expanding the oil industry in the United States, which is interesting because he slightly gives the impression that the United States has been rather laggardly in producing oil. I have some quite interesting statistics from the Library that indicate that, throughout the Biden years, despite all the green initiatives that were produced, the United States was actually the biggest producer of oil in the world. In 2020, it produced 11.3 million barrels a day, and in 2023 it produced 12.9 million barrels a day. Of that, it was using about 8 or 9 million barrels for its own consumption and exporting the rest. The idea being put out by the Trump regime that drilling for oil will somehow be a new venture is quite interesting; it has been going on, fit to bust, under the Biden Administration—you slightly wonder how that ties in with all the green credentials that he was boasting about, when they were producing these vast quantities of oil. They were way ahead of the Russians, who were the second-biggest producer of oil, at about 10 million barrels a day.

We are now in an interesting situation, as there seems to be a recognition by the Trump regime that we will go on needing hydrocarbons and oil way into the future. At the end of the day, the idea that we can somehow phase all this out in this country slightly defies credibility because, as we have discussed already, the reserves of oil are higher than they have ever been, and we will go on needing it for quite some time. It is rather extraordinary that we do not produce our own oil in the North Sea for our requirements. As it is, we will have to import it from other places, creating CO₂ emissions and so forth on the way.

[Earl Russell (LD)]

I was listening to what the noble Lord was saying, and the truth is that North Sea oil is declining by 7% a year—which will not change—and that we have the third-best wind resources in the world. North Sea oil will never meet our energy needs and, if we do not find alternative forms of energy, we will be dependent on the international markets, which will mean huge variability, no security and huge cost to our bill payers. Surely the best thing to do is use the third-best renewable resources in the world that we have to back that up with a system that works.

[Lord Hamilton of Epsom (Con)]

I find that an interesting comment because, at the end of the day, wind energy is totally dependent on the feed-in tariffs that end up on everybody’s electricity bills. That is one reason why we are paying such enormous sums of money for electricity at the moment. The idea that wind is somehow a cheap option does not seem to be quite working out.

The broad point is that anybody who looks at the energy demands of this country knows that we will go on needing oil for quite some time to come. It seems extraordinary that we then depend on imports of oil from around the world, with all the CO₂ emissions that go with that, rather than producing our own. I can see no logic in that at all. The production of oil in the North Sea may be declining, but that does not mean that we should not, therefore, give licences to produce more oil from the North Sea if we actually need it in this country. That seems inexplicable when we are importing it from elsewhere.

--- Later in debate ---

[Lord Hunt of Kings Heath (Lab)]

My Lords, that is a very interesting comment indeed.

I turn to Amendment 127, the effect of which I resist because in the end, it is inconsistent with our intention to set up GBE as quickly as possible. I understand noble Lords’ concerns about information being available now, but we are keen to see GBE up and running. The statement of strategic priorities will ultimately be subject to parliamentary scrutiny. We want GBE to play a full part in the discussions on it and the framework document will be extensive, following normal procedure.

On that basis, the Government are not willing to move in that area. However, I am looking at some of the issues around the statement of strategic priorities, particularly in relation to timing, and will perhaps give a sense of some of the pointers that will be raised in it. I will continue to have discussions with noble Lords on that between Committee and Report.

[Earl Russell (LD)]

I thank all noble Lords who have taken part in this debate. I start by reflecting the Minister’s last sentence in his response to this group of amendments. I thank him and his officials for the open nature with which they have engaged and continue to engage with us. The prospect of further discussions on these issues prior to Report is very welcome from my point of view.

As I have said, I recognise the need to set up GB Energy at speed, and I recognise that it needs to exist to feed into the strategic priorities. I particularly welcome the Minister’s last sentence. As I said, my amendments in this group were about trying to find a compromise and a way forward. I also welcome his comments from the Dispatch Box on the framework document, guaranteeing that it will be produced and will be extensive and follow the proper course of action. Again, those are welcome documents, and I am sure that Members of this Committee will note them.

It is welcome that GB Energy will be headquartered in Aberdeen. It is my opinion that GB Energy will help to create good and stable green jobs. The Minister said that 90% of oil and gas offshore jobs have high levels of transferrable skills. I think we can all agree that we need a just and fair transition for the people who work in our oil and gas industry, and we all need to keep that in mind. The Committee will also note the Minister’s comments on Amendment 127. With that, I thank all noble Lords for taking part in what has been an interesting set of debates.

Amendment 122 withdrawn.

Small Modular Nuclear Reactors

Earl Russell Excerpts

Wednesday 22nd January 2025 Lords Chamber

[Earl Russell (LD)]

My Lords, as the SMR contracts have been delayed, has the proposed twentyfold increase in AI been included in the clean power plan? What are the Government’s proposals to deliver the energy required and meet our energy net-zero targets if SMRs will not be ready before 2032?

[Lord Hunt of Kings Heath (Lab)]

My Lords, obviously, we are all very excited by the potential of AI. My understanding is that current electricity demand from, for example, data centre growth—which is part of the package that the noble Earl is referring to—would in 2022 account for 4.05% of UK electricity consumption. NESO’s analysis of future energy scenarios reckons that data centres could increase annual electricity demand by between 27 and 62 terawatt hours by 2050, with estimates of total annual electricity demand ranging from 533 to 700 terawatts hours. Obviously, we are giving this a great deal of consideration.

Clean Heat Market Mechanism Regulations 2024

Earl Russell Excerpts

Monday 20th January 2025 Grand Committee

[Baroness McIntosh of Pickering (Con)]

I am grateful to the Minister for setting out the contents of the regulations before us. I am afraid that I share some of the scepticism of my noble friend Lord Lilley. I am grateful to the noble Lord, Lord Hunt, for referring to the warm homes scheme. He is aware of my disappointment that the discount is not going to be revisited, and I say that as honorary president of National Energy Action.

My understanding is that the heat pumps that are the subject of this measure simply are not as efficient as oil-fired central heating. I say that as where I live in the north of England, it is all oil-fired central heating; we are off grid and we cannot use gas. I walked past a surgery in the north of England that did not have just one heat pump; it had fitted three heat pumps, which probably means that one heat pump was not sufficient to generate the heat required.

My understanding—and I would be grateful if the noble Lord, Lord Hunt, could confirm this—is that, without log fires or some other secondary heating, heat pumps heat only to a top temperature of about 16 degrees. If you are retrofitting an existing building, as many of the windows may not be able to accommodate the size of the heat pump or the radiators that connect to it, substantial renovation may be required.

Furthermore, I am grateful to the Secondary Legislation Scrutiny Committee, which highlighted that the starting point referred to by the noble Lord, Lord Hunt, of around 40,500 installations per year is—in its word, at paragraph 56 of its 10th report—“ambitious”. The department expects the scheme to help ensure the installation of at least 77,000 heat pumps a year in existing homes between 2024-25 and 2028-29. I ask the Minister a simple question: is that feasible and realistic?

My noble friend Lord Lilley quoted £2,000 as the cost of an ordinary boiler. I recently got two quotes for a boiler. The boiler itself was not the issue. For the fitting, even that of an oil-fired boiler, you are looking at something in the region of £8,000 to £10,000. I repeat: if you live off-grid in a very rural area, it would be nice to think that heat pumps were an alternative, but, given the state of the current market, I just do not see them as feasible if they heat up to only 16 degrees when, in just the past two weeks, we have regularly had temperatures of freezing or down to minus 10. With those few remarks, I press the Minister to comment on these queries.

[Earl Russell (LD)]

My Lords, we are supportive of these regulations and the other actions that this Government have already taken—particularly in removing the outdated 1-metre rule on the requirement for planning permission—since coming into office. We are hopeful that, taken together with the other measures that the Government talk about, these measures will help us begin to make progress towards the target of 600,000 heat pumps by 2028 and help us to fulfil the need to meet these same figures every year going forward.

There are both supply-side actions and demand-side actions in this SI. We feel that the combination makes some valuable reforms. Most of all we welcome the work that has been done with industry after listening to concerns, making some much-needed reforms and finding ways forward on these issues. Our worry, though, is that, as welcome as these changes in the regulations are, they may not be sufficient in and of themselves to deal with the scale of the problem. In making this point, I quote the conclusion of the House of Lords Secondary Legislation Scrutiny Committee, which has already been mentioned:

“The DESNZ expects the scheme to help ensure the installation of at least 77,000 heat pumps a year in existing homes between 2024/25 and 2028/29. We consider this, from a starting point of around 40,500 installations per year, to be ambitious”.


Before I turn to the SI, judging by the debate on this measure in the other House, a little background information would be useful.

These regulations amend and reform a system that the Conservative Government brought in but mainly failed to make work in practice. The last Government compounded these problems by failing to work alongside and with industry and others in order to find amendments to the proposals, such that industry itself was prepared fully to support them and get behind them. These problems then led to further internal discussions about the policy itself, which further derailed progress. This problem meant that the implementation never really got resolved and, as a result, we are a long way behind on these targets. In short, the Conservatives had clear targets for the installation of heat pumps but failed to deliver them.

I give this background only because the Conservative Opposition spokesperson appeared to disown or not acknowledge that this is a reform of their policy. It may be that the Conservative policy has changed. If that is the case, I hope that the Conservative spokesman can make that clear.

--- Later in debate ---

[Lord Lilley (Con)]

They are of course three times more efficient on average—though not necessarily in cold weather. But electricity is four times as expensive as gas per therm.

[Earl Russell (LD)]

I welcome the intervention and will come back to the noble Lord on his point. During this transition, it will take a huge effort across government and beyond—and beyond the scope of this instrument—to meet the scale of these changes.

The regulations establish the new UK-wide heat market mechanism to promote the development of the market for retrofit installations of heat pumps in existing buildings. The CHMM is to launch on 1 April 2025 and run for an initial period of four years. In the interests of time, I will not go on too much, but there are two big changes from previous proposals. First, they propose to reduce the payment in lieu of any missing heat pump credits to £500 from the first year from the £3,000 proposed by the previous Government. Secondly, the period over which boiler sales are counted has been delayed to give the obligated parties more time to prepare. The Government have said:

“As set out in the consultation response published in November … We have also aligned the periods over which boiler sales and heat pump installations will generate obligations and credits, respectively, providing manufacturers with more time to prepare”.—[Official Report, Commons, Second Delegated Legislation Committee, 13/1/25; col. 4.]


The big change is that the new Minister has engaged and listened to industry and has managed to make some of the adjustments required by working in partnership. This approach has been welcomed by industry. Removing penalties and allowing more time is pivotal to finding common solutions. The approach of giving manufacturers more time to scale up the supply chain and expand sales without penalising customers is good and needs to continue while hitting some very ambitious and fast-approaching targets.

The ongoing relations with manufacturers and industry are clearly key to delivering this policy. How do the Government intend to continue these better relations while making sure that targets are met and that unnecessary costs are not passed on to consumers? I want to make it clear that this is not a boiler tax. The Conservatives, when this was their policy, were very keen that those words were not used to describe it.

Review mechanisms and relations with industry are crucial to delivering this policy. I note that any adjustments would require further legislation and that would change the whole impact assessment. Any increases in the target in future schemes would require further secondary legislation. I note that the Government have said that they will not force consumers and that this is about working in partnership. My worry is about the confidence that the Government have in the ability to deliver the volume of heat pumps required in the time available.

I would like briefly to ask the Minister about some wider points. The cost of getting a heat pump is still a barrier to entry. I welcome the fact that the Government have continued the £7,500 grant, which, to their credit, the Conservatives not only introduced but increased. Since that increase, we have had a remarkable uptake in the number of heat pumps. But, as we have heard, installing a heat pump is about a system-wide change. It is more than just installing a heat pump; often it involves under-floor heating and changing radiators. On average, this seems to be costing consumers at least an additional £5,000.

We have had some conversations as part of the GB Energy Bill about green mortgages. Are the Government considering finding ways that the additional costs, not just of heat pumps but other renewable energy technology, can be added to mortgages? Quality and innovation are clearly important as well, as is making sure that these are good-quality products.

The noble Lord, Lord Lilley, intervened on electricity market reform, and to some extent I agree with him. Our electricity is still very expensive—some of the most expensive in Europe. The Government’s policy is to get people away from gas and on to electricity. What plans do they have to make sure that electricity is affordable and to introduce social tariffs for those struggling to pay their bills?

On disinformation, misinformation and ignorance, according to the Government’s own policy document, only 51% of people in the UK know about heat pumps. There is disinformation and misinformation in this space—for example, that heat pumps do not warm our homes enough—so it is important that the Government have a strong public information campaign for the take-up of heat pumps, about what they are, how they work and what they do.

Finally, heat pumps can save the average household £300 a year, so they would go a long way towards Labour meeting its manifesto pledge. I wish the Government well, but these things are complicated.

Electricity Capacity Mechanism (Amendment) Regulations 2024

Earl Russell Excerpts

Monday 20th January 2025 Grand Committee

[Lord Lilley (Con)]

My Lords, I want to use this as an opportunity simply to ask a question of the Minister. Why do we not take the advice of Professor Dieter Helm, in his review of energy policy, which was that instead of us providing the capacity mechanism centrally, we require anyone providing electricity into the system—wind generator, solar generator or whatever—from an intermittent source to provide firm power, in other words to pay for some capacity for the times when the wind is not blowing? If that were done, this whole arrangement would be unnecessary. We would have a much clearer idea of the total cost of intermittent energy if the supplier were also paying for some of the back-up capacity that is necessary to meet the occasions when intermittency prevents delivery of the power.

The only argument I have heard against this is that, if you do it wind farm by wind farm, the aggregate amount of capacity would be statistically greater than is necessary to meet the fact that some wind farms will be producing when others are not, but that surely can be overcome by saying that a certain statistical proportion of the necessary capacity should attach to any intermittent generator. Then we would have a more rational, more credible and more manageable system than the one that we have under these regulations.

[Earl Russell (LD)]

My Lords, this instrument revokes and alters several provisions of the assimilated EU regulations relating to the internal electricity capacity market. The draft regulations make changes necessary for the operation of the capacity market following our withdrawal from the European Union and they revoke the 10-year approval requirements. We do not oppose these changes—I just say that to start with.

Our electricity capacity market was introduced in 2014. The measure is designed to ensure that maximum output is always available and thus that we can maintain sufficient electricity capacity to meet future predicted demand, always ensuring the security of electricity supply. As we have heard, the capacity market covers generation, storage, consumer-led flexibility and interconnector capacity. It is about ensuring the security of this supply at all times. Auctions are held annually, one year and four years ahead of delivery, to ensure that we have supply when we need it and can meet future peak demand in a range of scenarios, based on advice from the capacity market delivery body, the National Energy System Operator.

The capacity market was originally approved when we were part of the EU and was made under the European Union’s state aid rules for a period of 10 years. Following our withdrawal, this requirement was brought in and enshrined in our domestic law as part of the assimilated electricity regulations. The capacity market will continue to be required to maintain the security of supply and investor confidence. This market will be of even greater importance as we seek to decarbonise our electricity generation by 2030 and, at the same time, see an ever-growing increase in electricity demand. The draft regulations revoke the requirement that

“Capacity mechanisms shall be temporary”

and

“shall be approved … for no longer than 10 years”,

and other references to such mechanisms being temporary. The draft instrument also revokes several provisions that require minor correction. As I said, we do not oppose the recommendations in the instrument, but I wanted briefly also to turn to some broader points.

As we seek to reach net-zero carbon generation by 2030 and beyond, the Government have a continued dependency on unabated gas and propose that carbon capture and storage should be used as a key part of our energy mix. Indeed, the clean power 2030 plan has around 35 gigawatts of unabated gas on standby for security of supply, and this requirement for gas capacity will remain throughout the early 2030s until more low-carbon dispatchable power comes on board to replace it. Although required, back-up reserve gas generation that is used intermittently and only when necessary is also very expensive, understandably. The Government have agreed to invest some £22 billion over the next 25 years in carbon capture technology to help make sure that we can have this unabated gas without adding to our greenhouse gas emissions.

The week before last there was a debate in the Chamber on the Science and Technology Committee’s report on long-term energy storage. We have also had a couple of Questions about the Russian shadow fleet and the attack on Baltic power cables. Of course, renewable energy is not always reliable, and everybody knows that it needs to be backed up by a wide variety of other sources to help ensure the security of supply. On that basis, can I ask the Minister about the Government’s proposed energy mix going forward to net zero and beyond? I am a little concerned that we continue to have this requirement: it is basically solar, wind and dispatchable gas backed by CCS and nuclear. Will the Minister say a word about how the Government will keep this mix under continuous review? I encourage them to invest in alternative renewable technologies, such as wave, tidal and geothermal, that are able to provide the dispatchable power that we need. What is the Government’s thinking on that?

We must also ensure that all the wind energy we generate is available and can be used. As I said, there is also a need to radically increase our medium and long-term energy storage, which is available to help us get through periods when other sources of renewable energy are not on tap. I hope that the reforms to the capacity market already announced will help make that happen. More must also be done to reduce demand; as the Government know, the best energy is the energy we never use.

Turning to this SI, I note that, as the Explanatory Memorandum says,

“there is a requirement to review the Electricity Capacity Regulations … at least every five years to determine whether they are meeting their objectives and remain fit for purpose”,

and I note that the Minister said the Government will continue to keep the controls in place. As we are going through such a rapid period of change, we welcome the fact that the Government have brought forward the plan to decarbonise our power generation by five years, but what consideration have they given to the need to review these mechanisms more than every five years? What might trigger that? What is the Government’s thinking on those matters?

[Lord Offord of Garvel (Con)]

My Lords, these regulations represent an essential step in ensuring the continued security of electricity supply in Great Britain. This SI builds on the work initiated by the previous Conservative Government, which reviewed electricity market arrangements in 2022. The task in hand is to amend the existing provisions of the Energy Act 2013 following the UK’s withdrawal from the European Union and align our national electricity market with the post-Brexit reality. These amendments are crucial to ensure that the capacity market can continue to operate effectively and flexibly in a changed regulatory environment.

As we transition towards a low-carbon energy future, securing a reliable electricity supply requires robust mechanisms that incentivise investment in reliable and flexible energy sources. The amendments introduced by these regulations are intended to bolster the capacity market’s role in supporting the security and reliability of electricity supply in a period of evolving energy needs and shifting market conditions.

These changes enable the UK to pursue an independent course, while ensuring that the capacity market continues to provide the stability and security our energy grid requires. By revoking outdated EU provisions, the UK can define its own market mechanisms that better reflect national priorities, including transition to a low-carbon energy future and enhancing energy resilience across Great Britain.

Great British Energy Bill

Earl Russell Excerpts

Committee stage
Wednesday 15th January 2025 Grand Committee

[Viscount Trenchard (Con)]

My Lords, I rise to follow the noble Lord, Lord Vaux, in speaking to Amendment 93, which he moved on behalf on my noble friend Lady Noakes. I have also added my name to this amendment.

As has been said several times in our debates, this is in essence a framework or enabling Bill but one that gives a large number of Henry VIII powers to the Secretary of State. A requirement to produce a framework document setting out the operating and financial principles that GBE will use would be a significant improvement to the Bill, as the noble Lord, Lord Vaux, explained so eloquently. It is essential that the principles underpinning the relationship between the Secretary of State and GBE should be publicly understood and supported. The arguments that I have previously used in relation to my Amendment 86A also apply here; other relevant public bodies, as mentioned in that amendment, clearly include GBN, NWF, NESO, Ofgem and Mission Control.

I also support my noble friend Lady Noakes in her Amendment 121A, which I think is justified in the circumstances, but I would certainly like to hear the Minister’s view on it. Amendment 121A would ensure that the framework document is laid before Parliament before the Act comes into force.

[Earl Russell (LD)]

My Lords, I shall speak briefly on this group of amendments.

I generally give my support to Amendment 93. I understand that these things are being done quickly and urgently to get GBE established and that the Government need to get that done, but there is a general lack of detail in the Bill and we do not have the framework agreement. If the Minister could update the Committee on where that framework document is and what stage it is at, that would be useful. In the interests of trying to find a compromise and a way forward on these issues, I do not know whether it might be possible for the Minister to provide the equivalent of heads of terms or to say something from the Dispatch Box about what he would expect the framework document to cover or to send us an outline of what is likely to be in that document. We are keen to support the principles of this Bill, but the Bill is extremely short and lacks detail.

On the other side of the fence, there is a slight feeling that we are being asked to approve things without knowing what it is we are approving. If it were possible to find a way forward on these issues before Report, that would be appreciated, but I am interested to hear from the Minister what stage these documents are at and what impediments there may be beyond the Minister’s control in these matters.

[Lord Offord of Garvel (Con)]

My Lords, I thank my noble friend Lady Noakes, in her absence, for her amendments in this group. In fact, this amendment, Amendment 93, ties closely with Amendment 125 in my name, which would ensure that this Bill does not come into force until a financial framework document has been published. Together, these amendments address an essential issue in the governance of GBE: the need for proper financial oversight and clear frameworks that ensure that this body is held accountable. That is the reason why I support Amendment 93 and why it is so critical to the Bill—because it would require the Secretary of State to prepare a framework document that sets out not just the operating principles but the financial principles through which GBE will pursue its strategic objectives.

Without this clear framework, GBE would operate without the financial clarity and accountability required to protect public funds and to ensure that GBE’s financial practices align with the UK’s broader energy strategy. A financial framework is not just a bureaucratic detail; it is fundamental because the energy sector is complex and fast-moving. GB Energy will be responsible for substantial public investment. Without this financial framework, there is a risk of financial mismanagement and inefficiency or lack of transparency. The framework simply provides clear guidelines on budgeting, expenditure, revenue generation and risk management; it also ensures that GBE’s financial decisions align with the Government’s energy and climate goals, such as achieving net-zero emissions and maintaining energy security.

--- Later in debate ---

[Viscount Trenchard (Con)]

My Lords, I support my noble friend Lord Offord’s Amendment 94, to which I have added my name. I have also added my name to Amendment 103 in the names of the noble Lords, Lord Vaux and Lord Cameron, and my noble friend Lady Noakes.

The noble Lord, Lord Vaux, made the same point that I tried to make on Monday much more eloquently than I did: GBE and GBN are not comparable institutions. Unfortunately, it seems that the Minister’s department does not recognise that. I refer to the Explanatory Notes at page 6, paragraph 22. The power to give directions in the hands of the Secretary of State

“is consistent with the power that the Government has to direct comparable institutions, for example: the Department for Energy Security and Net Zero has a statutory power to direct Great British Nuclear, although, to date, this has never been used”.

I repeat the point made by the noble Lord, Lord Vaux, that, despite what this says, I cannot think that they are comparable institutions.

Both Amendments 94 and 103 require an independent person to carry out a review of GBE’s effectiveness. Of the two, I prefer Amendment 103, which requires the independent person to review the extent to which investments by GBE have encouraged private sector investment in those projects. Amendment 94 requires an annual independent review, whereas Amendment 103 requires such a review only once every three years. Perhaps we could compromise at two years.

I have also added my name to Amendment 102, in the name of the noble Earl, Lord Russell. This requires GBE to report on its relationships with other connected bodies and is, to some extent, similar to some of the other amendments we have debated. It is obviously a requirement of working together on strategic objectives and directions that GBE should maintain excellent relationships with its stakeholders. One of the ways to achieve that would be by adopting the noble Earl’s amendment, and I look forward to hearing him speak to it and to hearing the Minister’s response.

[Earl Russell (LD)]

My Lords, I rise to speak to my Amendment 102 in this group, which concerns independent review and governance. It would insert a new clause after Clause 7 on Great British Energy stakeholder relationships. To be honest, it is a bit of a probing amendment and one that is looking for a bit of reassurance from the Minister.

The amendment argues:

“Within one year of the day on which this Act is passed, and every two years thereafter, Great British Energy must publish a report regarding its relationship with … Great British Nuclear … the Office of Gas and Electricity Markets (Ofgem) … National Energy System Operator (NESO) … the UK Infrastructure Bank … the Crown Estate”.


Obviously, it is essential that Great British Energy publishes reports and that these are available. It is important that we have a good understanding of how Great British Energy is working in practice. That involves understanding how it is establishing its working relationships alongside other partners and fulfilling its missions and goals, as we work towards net zero. It extends to objectives and joint projects and asks, “What problems are happening?” These are all key issues in the energy transition, which is itself a complicated business that involves lots of partner organisations and joint and crossover responsibilities. This is already a crowded space—or a tangled web, if you like—in which Great British Energy is being created. Indeed, the delivery of GB Energy’s goals will happen only if the new organisation builds strong and lasting relationships that develop well and help create both joint working and good outcomes.

I want to say a word about the Crown Estate Bill, if I may. It is the cornerstone of GB Energy’s relationship with the Crown Estate; their partnership was announced on the same day that GB Energy was created. Clearly—certainly for the initial part of GB Energy’s life—that partnership will be about developing floating offshore wind with the Crown Estate. As part of the Crown Estate Bill, an amendment was agreed in order that the Crown Estate produces an annual report on its relationship with GB Energy. So that is already happening on the Crown Estate side. I ask the Minister to give an assurance that, from the Government’s point of view, there is no reason why that requirement would not be mirrored on GB Energy’s side. I cannot see one; it seems like common sense to me. As others have said, reporting is a general issue running across this Bill.

I note what the Minister has said today in relation to group 10. I also note what he has said about the possibility for ongoing parliamentary scrutiny. Ministers are responsible, of course, for example at Question time. As the Minister has confirmed today at the Dispatch Box, GB Energy will be subject to scrutiny by all the Select Committees across both Houses of Parliament, but it is important that these relationships are reported on via an annual report. I would like to hear some reassurance from the Minister on that.

I turn briefly to the other amendments in this group. As we have heard, Amendment 94 in the names of the noble Lord, Lord Offord of Garvel, and the noble Viscount, Lord Trenchard, would require the Secretary of State to appoint an independent person to review annually the effectiveness of Great British Energy in delivering its objectives, meeting its strategic priorities and complying with its directions. The independent review would be required to cover Clauses 3, 5 and 6 of the Bill.

I would be interested in the Minister’s response to this amendment. My worry is that this would be overly burdensome for the organisation. I am not certain that I was able to find another comparable organisation where these conditions applied, so my concern is whether we are asking for something that is not on a level playing field with other, similar types of organisations. I note as well that strategic directions can be given and, as I said, there are also other methods of scrutiny, so it would be the Minister’s right, at any point, to give the strategic direction for that to happen.

Amendment 103 in the name of the noble Lord, Lord Vaux of Harrowden, would require an independent review of the effectiveness of Great British Energy in achieving its objectives and the extent to which it had encouraged private investment. But this would be every three years. I was interested to hear what the noble Lord said in relation to the UK Infrastructure Bank. Again, my worry is whether this is a level playing field, but I was interested that the noble Lord said that that is part of that organisation and how it works. That makes me more inclined to lend support to his amendment.

[Lord Vaux of Harrowden (CB)]

I am sorry to interrupt the noble Earl. This was lifted directly, almost word for word, from the relevant legislation, the UK Infrastructure Bank Act.

[Earl Russell (LD)]

I thank the noble Lord. I would be keen to hear what the Minister has to say in response to that amendment.

[Lord Hunt of Kings Heath (Lab)]

My Lords, this has been a very interesting debate and I am grateful to noble Lords for what they have said. I will start with Amendment 102, tabled by the noble Earl, Lord Russell, and supported by the noble Viscount, Lord Trenchard. As he said, the amendment focuses on Great British Energy’s relationships with its key stakeholders and would require the company to publish a report every two years detailing its relationship with a number of named public bodies.

As I have already said, we of course expect and want Great British Energy to enter into a number of partnerships or relationships with other public bodies. This will include public bodies beyond those highlighted by the noble Earl, including, for example, those operating in the devolved Administrations—although I agree with him very much about the importance of the relationship with the Crown Estate.

I think it was implied in what I said earlier that we are absolutely certain, as part of the rigorous reporting requirements that the organisation will need to take part in through its annual reports and accounts, that it will report on activities undertaken as part of these partnerships. That seems to me a perfectly sensible request, which I can affirm readily. In view of that, I am not sure that you need a separate report, but we can make it very clear to GBE that we expect it to report on this regularly. We have already publicly committed to setting out how Great British Energy and the National Wealth Fund will collaborate and complement each other. I can assure noble Lords that we have made the same commitment on Great British Energy’s relationship with Great British Nuclear.

In terms of Great British Energy’s relationship with Ofgem and the National Energy System Operator, again, we would expect GBE to be subject to the same legal and regulatory frameworks as other entities. Clearly, when it comes to the Crown Estate, I readily say that, of course, GBE will report on its relationship, just as the noble Earl said. The Crown Estate will be doing similar, and we hope that there will be a consistency of approach in their reports. I am sure that there will be.

Turning to Amendments 94 and 103, which would require independent reviews of Great British Energy’s effectiveness, I thank the noble Lords, Lord Offord, Lord Vaux and Lord Cameron, and the noble Baroness, Lady Noakes, for putting their names to them. We all agree that Great British Energy needs to be accountable, transparent and clear about how it is delivering against its objectives and the statement of strategic priorities. The Bill already ensures that GBE will provide regular updates through its annual reports and accounts. These documents will be laid before Parliament, ensuring public accountability. Clause 5 provides that GBE must “act in accordance” with the priorities set out by the Secretary of State. To ensure this, Great British Energy must publish a strategic plan on how it will deliver those priorities, and it will update this plan regularly.

On the question, generally, of a review, I certainly understand the point that noble Lords have made and agree that reviews are important. I am prepared to consider the principle of a review between Committee and Report. I would not want to get into a debate about how regular those reviews should be. It is important that GBE has a good run before it is subject to such a review. Equally, I do not think you want a review happening on a regular annual basis because that would detract from its ability to perform effectively, but I understand the principle of a review. I will take this away without commitment at this stage, but I am happy to talk to noble Lords between now and Report about it.

Coming back to additionality, we obviously agree that it is an important principle, and we would expect Great British Energy to learn from the UKIB/National Wealth Fund approach. Of course, GBE has rather a wider role than the National Wealth Fund, particularly in that it is not just an investor but a developer, and it has an important future role to play in trying to get rid of some of the barriers to investment that we have seen in the energy sector.

Having said that, I think additionality will be covered. Equally, we accept that undertaking reviews from time to time is important. But they should not be done so frequently that they lose impact in what they are there to do. I hope noble Lords will accept that I have tried to be constructive in my response to these amendments.

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Moved by

[Earl Russell]

95: After Clause 7, insert the following new Clause—
“Budget report(1) Great British Energy must publish an annual budget report and send it to the Energy Security and Net Zero Committee, or any successor Committee, of the House of Commons.(2) This report must include but is not limited to—(a) a breakdown of current and expected funding sources;(b) spending per sector;(c) grid spending;(d) future spending;(e) estimations of future profitability.(3) A representative of Great British Energy must appear before the Energy Security and Net Zero Committee, or any successor Committee, if requested by the Committee.”Member’s explanatory statement
This amendment requires GBE to publish an annual budget report.

[Earl Russell (LD)]

My Lords, in moving Amendment 95, I will speak also to my Amendments 96 and 97, on accountability to Parliament. This group is all about GB Energy reporting to Parliament. As I have said, the Bill is quite short and some bits are missing, so I think noble Lords are just looking for as much reassurance as the Minister can give on these matters.

As the Bill stands, there are no real basic requirements for GB Energy to produce an annual report, or requirements for it to report to Parliament, beyond those in Clause 7 and what the Minister has said at the Dispatch Box today. I note that GB Energy will be subject to the same general reporting as other arm’s-length government organisations.

My Amendment 95 would ask GB Energy to publish an annual budget report, which would be sent to the Energy Security and Net Zero Committee or a successor committee of the House of Commons. That report must include but not be limited to,

“a breakdown of current and expected funding sources … spending per sector … grid spending … future spending … estimations of future profitability”.

It goes on:

“A representative of Great British Energy must appear before the Energy Security and Net Zero Committee, or any successor Committee, if requested”.


Amendment 96 says:

“Great British Energy must publish an annual report and send it to the Energy Security and Net Zero Committee, or any successor Committee, of the House of Commons”,


and that that report

“must consider Great British Energy functions and activity in the contribution to the following … supporting local communities and economies … the achievement of the United Kingdom’s climate and environmental targets … the relationship with The Crown Estate … a just transition to green energy … a jobs and skills transition into the green economy”.

It would also provide that Great British Energy must appear before that committee if requested.

Amendment 97 would require GB Energy to commit to an ongoing sustainable development review of its activities. It states:

“Great British Energy must keep under review the impact of their activities on the achievement of sustainable development in the United Kingdom”.


This would require GB Energy to keep under constant review the impact of its activities on sustainable development goals, as recognised by the United Nations, the Commonwealth and other bodies that refer to human rights developments, which aim to meet the economic, environmental and social needs of the present, while also ensuring the ability of future generations to meet their own needs.

At the outset I acknowledge to the Committee that my amendment is a direct copy of one tabled by the noble Baroness, Lady Hayman, and so skilfully negotiated with the noble Lord, Lord Livermore, the Financial Secretary to the Treasury, as part of the Crown Estate Bill. It was agreed as a government amendment to that Bill as it left your Lordships’ House. I wish to put on the record my thanks to both of them for their work in getting the amendment into the Bill. My reasons for bringing the amendment here again are, as I said, simply to mirror the other Bill, because the two organisations are so closely interlinked. For me, this is a minimum backstop amendment. I have added my name to Amendment 116, in the name of the noble Baroness, Lady Hayman, and I continue to support it, but I wish to make clear that if that amendment falls, this one is a kind of backstop.

My amendments are relatively straightforward, so I will turn to the other amendment in this group, Amendment 117, in the name of the noble Baroness, Lady Bloomfield of Hinton Waldrist. This would hold Great British Energy accountable to the relevant parliamentary committees of both Houses of Parliament.

The Minister has said—I already suspected that this would be the case with an arm’s-length body—that this would be subject to parliamentary scrutiny. It is good that he has confirmed that from the Dispatch Box. I just wanted to indicate my full support for the amendment and the principles that it sets out. It is obviously important that all bodies that the Government set up should be subject to parliamentary scrutiny from the Select Committees.

[Baroness Bloomfield of Hinton Waldrist (Con)]

My Lords, I shall speak to the amendments in this group, which contains amendments in my name and those of the noble Earl, Lord Russell, one of which he moved. I thank the noble Earl for introducing this group; I appreciate the sentiment and spirit of his amendments, and his support for mine.

I do not wish to repeat noble Lords’ arguments from previous groups, but these amendments again seek to shape the governance, accountability and sustainability of the proposed Great British Energy entity. They have been drafted in line with the values of responsible governance, fiscal prudence and national interest, so, although I will not repeat his arguments, or those of my noble friend Lady Noakes from earlier, I wholeheartedly agree with the comments made by my noble friend Lord Roborough on the first group.

On Amendment 95, which would require GBE to publish an annual budget report, I appreciate the sentiment of ensuring transparency in how public funds are utilised. On these Benches, we have always championed the prudent use of taxpayers’ money, and this amendment acknowledges that principle. However, we must ensure that such reporting is not merely a box-ticking exercise. The report must provide meaningful insights, ensuring that GBE operates efficiently and delivers value for money. We cannot allow an additional layer of bureaucracy to stifle innovation or create unnecessary costs. Therefore, I agree with the noble Earl, Lord Russell, on the spirit of this amendment, and I look forward to hearing from other noble Lords about how the reporting requirement could best be used to ensure that GBE operates in the best interests of the nation.

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[Lord in Waiting/Government Whip (Lord Cryer) (Lab)]

My Lords, I will begin with Amendments 95 and 96 in the name of the noble Earl, Lord Russell.

Amendment 95 proposes requiring GBE to publish an annual budget report and send it to Parliament through the Commons Energy Security and Net Zero Select Committee—or its successor, as he said, since its name seems to keep changing every five minutes. Amendment 96 proposes requiring GBE to publish an annual report on various topics which must also be sent to the Select Committee. GBE will already have a requirement to produce publicly available annual reports and accounts at Companies House, and the Secretary of State will lay copies before Parliament.

The noble Earl, Lord Russell, also mentioned the requirement that the Secretary of State appear before the Select Committee to speak to those reports. That requirement is already fulfilled. I know that Select Committees cannot subpoena witnesses, so there is no compulsion, but the Secretary of State and other Ministers regularly appear before relevant Select Committees. I emphasise other Ministers with specific interests. Once GBE is up and running, and producing these accounts, that is the time when the Secretary of State will appear before the relevant Select Committees. In theory, the Secretary of State does not have to appear—as I said, there is no compulsion—but it would be pretty odd if they did not do so under those circumstances.

There are also additional requirements on government-owned companies to ensure transparency and accountability. These include the obligation to follow the Treasury’s directions on accounts through the powers extended in the Government Resources and Accounts Act 2000, and laid out in the Government Financial Reporting Manual and related “Dear Accounting Officer” letters. Furthermore, GBE will be required to report on its governance around, exposure to, and risk of, climate-related scenarios in its operations as set out by the Task Force on Climate-Related Financial Disclosures a couple of years ago.

I acknowledge the noble Lord’s expectation that Parliament will hold a strong interest in the performance of GBE, which anybody who knows anything about how Parliament works would expect. I fully anticipate that the relevant Select Committees will call representatives from the company and from the department to provide evidence when required.

The point about hydrogen made by the noble Lord, Lord Hamilton, is a little wide of the scope of the amendment. However, I remind noble Lords that the exact mix of technologies in which GBE, as an operationally independent company, chooses to invest will be determined by its board in due course. His prediction—he is inviting me to look into the future, and I suppose he is doing the same—is that, as technology advances, hydrogen starts to fall in cost. That is fairly sensible, although I do not ask the noble Lord to hold me to it, because we are looking into the future and we do not know what technologies there will be then.

Amendment 97 proposes that GBE reviews the impact of its activities on sustainable development in the UK. This Government—this has been made very clear and repeatedly so—firmly believe in a healthy natural environment and that is critical to a strong economy and to sustainable growth and development. Our commitment to the environment is unwavering and will be in the future, including through meeting the Environment Act 2021 targets and halting biodiversity decline by 2030. That is a pretty demanding target, but that is what we have set out for five years’ time. I assure the noble Earl that the projects in which GBE is involved will be subject to the usual and rigorous planning and environmental regulations, where the impacts on the environment and habitats are considered. The Bill focuses on establishing the company, and adding more detail at this point may restrict its activities or add layers to its reporting and governance.

Amendment 117, proposed by the noble Baroness, Lady Bloomfield, seeks to legislate the scrutiny of GBE by relevant Select Committees. My noble friend and I have touched on that to some extent. This amendment goes beyond the precedent and practice of the involvement of Select Committees in public appointments. The chief executive of Great British Energy, once appointed, will also be its chief accounting officer and will be accountable to Parliament for their stewardship of GBE and its funds. As is common practice for public bodies, the management and leadership of GBE will be available to the relevant Select Committees as needed. There is no real need to legislate on this arrangement at this point.

I remind noble Lords that the chief accounting officer would, in all likelihood, be called before the Public Accounts Committee. Over the past few years, the PAC was chaired by Margaret Hodge, as was, who is now the noble Baroness, Lady Hodge; she was followed by the honourable Member for Hackney South and Shoreditch. Those who have seen those sessions know what an acute and thorough grilling that committee gives to anybody who appears in front of it. That Select Committee is always chaired by a Member of the Opposition; that is set up in the Standing Orders of the House of Commons. It is now chaired by the honourable Member for Cirencester and Tewkesbury. Having served with him in the other place for more than 20 years, I assure noble Lords that he will be just as incisive as his predecessors.

The Cabinet Office guidance on pre-appointment scrutiny by House of Commons Select Committees provides criteria and processes for such roles. It sets out that decisions on the scrutiny of individual posts should be made between the Secretary of State, the chair of the relevant Select Committee and the Cabinet Office. It is not common practice for this to be set in primary legislation. As per this guidance, no public body currently appears to have its full board subject to that kind of pre-appointment scrutiny. We anticipate recruitment for the substantive board to begin over the course of this year and will ensure that it is undertaken in a manner that aligns with best practice. To reassure the noble Baroness—

[Earl Russell (LD)]

I am sorry to intervene, but I think the noble Lord has moved on to the next group of amendments in his response to me, unless I am mistaken, because the next one is on government appointments, is it not?

[Lord Cryer (Lab)]

No, at present I am talking about Amendment 117.

[Earl Russell (LD)]

Oh, I am sorry.

[Lord Hunt of Kings Heath (Lab)]

But we are coming to that.

[Earl Russell (LD)]

I thought the noble Lord had moved on; I apologise for interrupting.

[Lord Cryer (Lab)]

I am glad I was able to reassure the noble Earl. I hope that I have provided the assurances and explanations sought by noble Lords in tabling these amendments, and I sincerely hope that they will not press them.

--- Later in debate ---

[Lord Cryer (Lab)]

I am grateful to the noble Lord for that question. I cannot add anything to what I said before. GBE will look at a range of technology and sources. The whole of energy policy is predicated on security of supply and range of supply, because at various times in British history, although those two things have not been absent at the same time—or perhaps they have, briefly—there have been times when one or the other has been absent. If it is possible for hydrogen to play a part in that security of supply and range of supply—it certainly would on the latter—I do not see why that should not be part of the nation’s energy supply in the future.

[Earl Russell (LD)]

I thank all noble Lords who have taken part in the discussion on this group of amendments, and I thank the Minister for responding to me; I apologise for interrupting him. I appreciate everything he said, and I appreciate that there will be reports on GB Energy and that there are lots of opportunities for parliamentary scrutiny. It is appropriate that we ask these questions. The amendments in this group and others look to go a bit further to ensure that certain things will be reported on.

In response to the discussion on the previous group, the noble Lord, Lord Hunt of Kings Heath, asked me whether we were looking for a separate report. In my mind, this is about making sure that GB Energy produces a really good-quality annual report that covers a broad range of areas and is open and transparent about its activities.

[Lord Hunt of Kings Heath (Lab)]

Perhaps I may intervene. In the discussion on the first group of amendments, I promised to write a letter to noble Lords focused on financial information. It might reassure noble Lords if I pick up that challenge and say that we should perhaps also try to encompass the annual report arrangements. If that would be a sensible way forward, the letter will set this out very clearly in writing so that noble Lords can see it after Committee but before Report.

[Earl Russell (LD)]

That would be greatly appreciated and would really reassure us. That was the point that these amendments were trying to get to, so I thank the Minister.

Amendment 95 withdrawn.

--- Later in debate ---

[Earl Russell (LD)]

I shall speak to my Amendment 101, and I thank the noble Viscount, Lord Trenchard, for adding his name in support of it. It would simply prevent the board of GB Energy from being appointed until each prospective appointment had been scrutinised by the Energy Security and Net Zero Committee. I believe in pre-appointment scrutiny, and I put this forward as a way of helping to ensure that that happens.

I shall not speak for long on this amendment, because I suspect that it will not win favour with the Government and that the Minister will argue that there are well-established processes and procedures for making such appointments. It might be useful if he could say a brief word about what those processes will be.

Amendment 99 is very similar to mine on pre-appointment scrutiny, so I lend my support to it. However, I would probably leave out the politics; I am much more interested in the skills and abilities people have to perform the functions that they undertake. Their personal politics should not really come into it.

Amendment 98, in the name of the noble Lord, Lord Frost, and the noble Viscount, Lord Trenchard, has three elements. The first reflects my amendment in this group. The second calls for the headquarters to be placed full time in Aberdeen. The third calls for the chair of GB Energy to undergo an annual review by external auditors, and for that review to be sent to the Secretary of State.

I cannot disagree with the first part, because we are kind of on the same ground, so I welcome it. Labour made commitments on the second part, but I am not certain that the Bill is the place to go into what a full-time headquarters is and how it should be defined, so I will park that. On an annual review by external auditors, my question is again about level playing fields. Would other people in other similar organisations find that that was part of their normal working relationship with their employment contracts? I suspect that they would not. If the answer is no, there is no precedent for putting it in the Bill, so I would not think it acceptable.

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[Lord Teverson (LD)]

I shall not prolong the conversation tonight but the noble Lord is, once again, absolutely right about national defence, radar and being able to see an incoming attack with missiles or whatever. The problem was that the Ministry of Defence did not man that area enough. Decisions were extremely slow. There was a rumour—of course, I have no proof of this —that it used to use its slowness and its objections to insist that developers helped it upgrade its military equipment. I do not know whether it was true—I am sure that it was not, of course—but that was the perception. The main problem was the slowness of response.

[Earl Russell (LD)]

My Lords, I rise to speak to my Amendment 118A, which covers wider considerations. Let me be clear: it is also a probing amendment, as are all the amendments in this interesting and diverse group. I thank the noble Lord, Lord Macpherson of Earl’s Court, for adding his support to my amendment, which is about ensuring that communities benefit directly from the renewable energy projects that Great British Energy undertakes. I put it forward to see whether that is possible and to ask, from the Government’s point of view, what barriers to that might exist.

My amendment would ensure that 5% of gross revenue from all Great British Energy

“renewable energy projects generating over one megawatt”,

both onshore and offshore, would

“be paid into community benefit funds”.

The idea for it came from the honourable Angus MacDonald MP’s experience with Scottish Government Good Practice Principles for Community Benefits from Onshore Renewable Energy Developments. This guidance promotes community benefits of a value equivalent to £5,000 per installed megawatt per annum, index-linked for the operational lifetime of projects.

My amendment requires that:

“Within six months of the day on which this Act is passed, the Secretary of State must prepare and lay before Parliament a report setting out proposals for ensuring that local communities benefit from renewable energy projects undertaken by Great British Energy. The report … must set out, but is not limited to, proposals for 5% of the gross revenue from all such renewable energy projects generating over one megawatt to be paid into community benefit funds”.


I will not go into the rest of the details; the amendment is before noble Lords. It simply puts into the Bill that local communities should directly benefit from renewable energy undertaken, and that there is a mechanism available for doing that. On the 5% figure, I am happy to have a conversation with the Minister if it is an issue. I note that Denmark’s Law on the Promotion of Renewable Energy 2008 had a 20% figure, in relation to which 5% is a lot lower.

To talk more about the spirit of the amendment, this is really about helping disadvantaged communities, particularly those that are hosting our renewable energy. A lot of them are in the highlands and in Scotland. They disproportionately suffer from poor infrastructure and poor public services, and a lot of them are living in fuel poverty. They are putting up with having their landscapes covered in turbines, dams, electricity transmission lines, substations and all the rest of it. I support community energy, as everybody knows—I have spoken to it in two other amendments and will not go into it here—but this is about more than that. This is not a nice-to-have; in my opinion, this is an essential part of the energy transition. It is about ensuring the continued long-term support for this journey that we are undertaking as a society.

Recent opinion polls on these matters are really strong. Where local communities benefit from the energy infrastructure, particularly the infrastructure that they host, their support for this transition is much stronger and more resilient. If this support falls away, that could be the end of the whole transition and of all this, so this is not just about being fair and supporting the communities that need it most and that host this stuff. It is also about making sure that these things go on beyond one Government and one term, that they are here, that we manage to take society with us on this journey, and that those who are hosting things that other bits of society need benefit from them.

Turning to the other amendments in this group, I signal my support for Amendment 118 in the name of the noble Baroness, Lady Bloomfield. I note that the Wildlife and Countryside Link put out a detailed briefing on that and why it needs to be there. I also support Amendments 114 and 115 in the name of my noble friend Lord Teverson. I will not go into too much detail on that. As he said, there is an Oral Question on this tomorrow. It is unfortunate that we have had more recent incidents, not just in the Baltic but off the coast of Taiwan. Obviously, the UK has a number of electricity interconnectors and gas pipelines —we had a conversation about gas in the House this week—and they will only ever increase. New contracts have been signed. We have about 7.7 gigawatts at the moment, and that will rise to 18 gigawatts by 2032, so this is a crucial part of our energy security and our journey to net zero.

I would ask the Minister one thing. We can have conversations about the other aspects later on, but I am worried about the Government going away, stepping up their appreciation of this risk and maybe recalculating some of their calculations around the security of supply as we transition to net zero in 2030 and beyond. Is there is a greater need to look at some of those things again? We will talk about the rest tomorrow.

If the Committee will excuse me, the noble Lord, Lord Macpherson of Earl’s Court, has left me a note. Does the Committee mind if I read that in support of my amendment?

These are his words: “My Lords, I would like to speak in support of Amendment 118A. I should first declare an interest as a director of two family-owned hydroelectric companies in Wester Ross. Having worked in the Treasury during the 1980s boom in North Sea revenues, I am all too conscious that Britain has a poor record in reinvesting the benefits of energy windfalls and an even worse record in passing on those benefits to communities directly affected by energy production. I think Shetland receives some money, but other places do not”.

“It is in the nature of renewable energy production that it tends to take place in remote areas. I am thinking in particular of the Highlands of Scotland, but the same applies to Cornwall, Devon, Wales and Cumbria. People living in these communities often have to live with negative aspects of renewable energy: towering windmills or hydroelectric schemes which change the natural environment and can particularly scar a hillside. Because of the remoteness, oil and gas and electricity connections cost more”.

“Successive Governments in Westminster and Edinburgh have supported the principle of requiring energy developers to support their local communities, and there have been some good examples of community investment. But practice is variable, and often contributions are set in cash terms and bear no relation to the subsequent success of renewable energy schemes. Great British Energy has a huge opportunity to lead by example in exercising best practice. By setting up community benefit as a fixed percentage of gross revenue, this amendment seeks to ensure communities benefit more fairly. A 5% contribution is relatively modest, as I understand it”—and he then goes on to make the Denmark point.

“Of course I hope that the noble Lord the Minister will agree to the amendment, but I have a feeling that he will argue that this amendment will cut across the operational independence of Great British Energy and that this Bill is the wrong vehicle for addressing community benefits. If that is the case, I would like to ask the Minister if he can go beyond fine words of general support for community benefits. Will he commit to setting out a clearer definition of what represents a reasonable and fair rate of community benefit for a given level of revenue for renewable energy projects?”.

[Lord Cryer (Lab)]

Before the Minister responds, I should have pointed this out before, but I was not aware: reading out speeches from another Member is not acceptable, according to the Companion. That is partly my fault. I apologise: I should have said something.

[Earl Russell (LD)]

I apologise; I thought that it was acceptable. The noble Lord should have intervened earlier if it was not. I would not have done it if I had known that it was not acceptable, so I apologise to the Committee.

[Lord Hunt of Kings Heath (Lab)]

We certainly got the noble Lord’s point.

This has been an interesting debate with which to finish today’s proceedings. I start with Amendments 106, 107 and 115. The debate between the noble Lords, Lord Teverson and Lord Hamilton, on the benefits of oil rigs and other structures for fish populations allows me to say that other energy infrastructure can also have a positive impact on nature. We know, for instance, that wind farms can coexist with farmland easily. We have examples of solar meadows, which is a practice of growing wildflower meadows on solar farms. I have heard talk of green corridors, where beautiful new pylons are built to extend the grid. I am not being facetious here, as we need to look at ways in which energy can contribute to nature recovery. It is an important point to make.

I agree on the importance of our coastal communities and commercial fishing, as reflected in Amendments 106 and 107. Amendment 115 would require GBE to consult annually with the commercial shipping sector and fishing industry. I would expect GBE to provide regular updates on its work on such issues through its annual reports and accounts. We know that the projects that Great British Energy is likely to be involved in will all be subject to relevant regulations, including environmental impact assessments. There will be statutory stakeholder engagement to understand the potential impact of development. In line with other energy developers, GBE will consider the impact and risk of its activity on the commercial shipping sector and fishing industry, as it will other affected stakeholders. I will draw these remarks to the attention of the chair of GBE, so he can understand the importance of the issue that the noble Lord, Lord Offord, has raised.

In relation to coastal communities, there will be many opportunities in the energy sector in the future. We talked about the challenge of the North Sea transition. We obviously hope that, as jobs reduce in the oil and gas sector, the people involved can take up other jobs, some of which I hope will be in the wider energy sector. But overall, GBE has an important contribution to make in this area.

On Amendment 114, the noble Lord, Lord Teverson, raised an important point on the Ministry of Defence and security agencies. Clearly, to ensure resilience, GBE will have to consider the impact and risk of its activity on offshore installation, including its pipeline and cable connections, within the context of relevant security regulations and hostile state action. It is a very important and serious matter. All nationally significant infrastructure projects, which include projects in the energy sector over 50 megawatts, undergo rigorous scrutiny to monitor and mitigate security risks. In the end, these decisions fall to Ministers to make in relation to development consent orders.

There was an interesting debate on air defence issues between the noble Lords, Lord Teverson and Lord Hamilton. I have to say that my department is working very closely with the Ministry of Defence on these issues. We are talking closely and working to ensure that our own offshore wind ambitions can coexist alongside air defence. MoD programme NJORD will deliver an enduring radar mitigation solution, which will prevent turbines from interfering with MoD radar systems. In the context of our more general working relationship with the Ministry of Defence, it will be a responsibility of GBE to consider and consult relevant stakeholders. My department will of course ensure that that happens appropriately.

Amendment 118, tabled by the noble Baroness, Lady Bloomfield, would place a nature recovery duty on Great British Energy. Let me say at once that we are absolutely committed to restoring and protecting nature and meeting our Environment Act targets. We want GBE to focus on its core mission to drive clean energy deployment, but I assure the noble Baroness that the projects that GBE invests in and encourages will be subject to all environmental and climate regulations, in the same way that every other company is.

I draw her attention to our recently published Clean Power 2030 Action Plan, which dedicates an entire section to

“Integrating clean power and the natural environment”.


I was going to quote from it, but I do not think I need to do now. We are launching an engagement exercise in 2025 to invite communities, civil society and wider stakeholders to submit their ideas on how we can best encourage nature-positive best practice into energy infrastructure and development. Feedback from this exercise will allow the Government to better understand how we can integrate nature restoration through the clean power 2030 mission. We very much agree with the substance of what the noble Baroness said.

Gas Storage Levels

Earl Russell Excerpts

Tuesday 14th January 2025 Lords Chamber

[The Minister of State, Department for Energy Security and Net Zero (Lord Hunt of Kings Heath) (Lab)]

My Lords, I am grateful to the noble Lord for his question. First, I must remind the House that, on Friday, National Gas confirmed that:

“The overall picture across Great Britain’s eight main gas storage sites remains healthy”.


The diversity of Great Britain’s sources of gas supply means that we are less reliant on natural gas storage than our European counterparts. This includes, as the noble Lord suggests, supplies from the UK continental shelf; our long-term energy partner, Norway; international markets via liquefied natural gas; and interconnectors to the European continent.

I understand and fully accept what the noble Lord says about the North Sea and the contribution of the oil and gas sector, which we have debated, but it is essential that we move as quickly as possible to clean power. Clearly, by 2030, that will give us a great advantage in energy security. We will look for low-carbon, flexible technologies to ensure that we have the proper balance when we get to clean power. We want to see a successful transition in the North Sea, recognising the contribution that it makes and will continue to make.

[Earl Russell (LD)]

My Lords, does the Minister agree, first, that this is a fabricated scare story? There are no issues with our gas. It is not running out and it can be quickly resupplied via pipelines and LNG. Secondly, does he agree that the best resolution is the rapid end to the Conservative’s legacy of overdependence on very expensive imported foreign energy? To that end, the Conservatives would be well advised to stop filibustering on the Great British Energy Bill, which will greatly improve our energy security, decrease our overdependence on expensive imported foreign gas from tyrants such as Putin, bring down energy bills and costs for bill payers, and help us to meet our energy and climate targets.

[Lord Hunt of Kings Heath (Lab)]

My Lords, I am glad that I was not alone in thinking that we enjoyed a filibuster last night. What is tragic is that the Conservative Party is clearly retreating from net zero and clean power and has become obsessed with gas. This is not the way that we need to go. The noble Earl is quite right. Centrica chose to put out what I can only describe as an alarmist statement. NESO and British Gas are quite clear that we did not face a crisis and that we have adequate supplies. I hope that those who were involved in making those claims last week will reflect on the concern that they caused.

Great British Energy Bill

Earl Russell Excerpts

Committee stage
Monday 13th January 2025 Lords Chamber

[Lord Fuller (Con)]

My Lords, I will speak briefly in support of my noble friend Lord Hamilton of Epsom on carbon accounting. He said that he does not know very much about oilseed rape, but I do. About 20 years ago, in some of the very earliest stages of emissions reduction, I was involved commercially in that.

My noble friend asked that we should have pilot plants and studies to see whether the energy balance of oilseed rape can be done, as if it has never been done before. I can tell your Lordships that pilot plants were set up on Teesside, at enormous expense, and analysed to death. Although this is not a debate on farming, I can say that, at normal yields, when all was said and done, after the ploughing, sowing, fertilising, spraying, harvesting, processing and transportation, you came ahead on a carbon basis only when or if you burned the straw that otherwise would have been left behind in the field. Of course, at low yields, you spent more carbon on growing it than you got back at the end.

I make no other comment save to say that my noble friend is correct that, often, superficially attractive green energy schemes, when you boil them down, cost more carbon than they yield. That is important to look at because, otherwise, we could sleepwalk into an enormous waste of public funds through GB Energy, chasing projects that do not hit the target—which, of course, is to allow us to be more sustainable in future.

[Earl Russell (LD)]

My Lords, I will speak very briefly. If I may, I will call out the elephant in the room on this Bill. We have had 10 groups of amendments turned into 18 groups on this final day in Committee—over half of the groups that we are discussing today are the result of one party degrouping amendments. We have spent over two hours speaking to the first group of amendments, and we have 18 groups to speak to today. I have heard a lot of speeches, but in the case of many, I could not tell which amendment they were even speaking to.

I will say just this: we support the Government and the Bill. This is an extremely important Bill. I am pleased to see action taken on these measures after the Conservative Party failed to do anything about it, left bill payers vulnerable to the increase in bills as a result of the war in Ukraine and ended up spending £40 billion of taxpayers’ money subsidising bill payers for no long-term benefits. In this group, we are generally supportive of Amendments 61, 65, 69, 70 and 74. For groups that we feel were unnecessarily degrouped, we will probably not make comments.

[The Minister of State, Department for Energy Security and Net Zero (Lord Hunt of Kings Heath) (Lab)]

My Lords, I am very grateful to the noble Earl, Lord Russell, because it seems to me that we have “enjoyed” what essentially has been a rerun of previous debates, with Second Reading-type speeches, when the key concern, as the noble Baroness, Lady Noakes, suggests, is Clause 6 and the power of direction.

So I do want to come back to the intent of Clause 6. First, we want GBE to be operationally independent. A founding principle of GBE is that it should be independent as far as possible in executing its functions. The Bill is focused on making the minimum necessary provisions to establish the company. At Second Reading, some noble Lords opposite accused the Government of drafting the Bill in a way that meant we would use Clause 6 to micromanage GBE. We have always maintained, as the noble Baroness, Lady Noakes, rightly pointed out, that this is a backstop provision, yet now noble Lords opposite seek to micromanage both the Government and GBE by these various amendments, most of the issues in which we have already debated.

Secondly, we have set up GBE as a company for long-term success and as an enduring institution. Some of the amendments, which include short-term targets, would be wholly inappropriate in legislation. Indeed, it would be more appropriate for the Secretary of State to set priorities via the statement of strategic priorities in Clause 5, of course within the framework of Clause 3.

My third point is the intended use of the power in Clause 6. Let me make it absolutely clear, as I have done in the past, that the power to give directions to GBE is intended only for urgent or unforeseen circumstances. These amendments would widen the intention unnecessarily. The noble Baroness, Lady Noakes, is right about the relationship between government and such organisations. She and I have both had experience in relation to the NHS; it is a slightly different set-up, but we are talking about the relationship between a government department, the Secretary of State and public bodies. She will know that there the Secretary of State has always had a power of direction, but I think it has had to be used only a handful of times. The reason of course is that chief execs of NHS bodies understand that the Secretary of State is able to set the overall direction of the National Health Service without having to call on what is essentially a backstop power.

My fourth point on a number of the amendments is that the existing reporting requirements are set out in the Bill, which makes provision for GBE to produce and publish an annual report and accounts. They will undergo external audit; they will contain information on the activity of the company over the year; and they will also include reporting in line with the recommendations of the Task Force on Climate-Related Financial Disclosures. GBE may also make information available through reporting, such as when projects or investments are announced. We think that that is sufficient accountability.

On some points raised by noble Lords on Amendment 59, we believe that in an unstable world, the only way to guarantee our energy security and protect bill payers permanently is to speed up the transition from fossil fuels to home-grown clean energy. This is consistent with advice from the Climate Change Committee and it is why we have set an ambitious target to reach clean power by 2030, which the independent NESO considers achievable. We believe that the key role of BGE is focused on driving forward deployment.

I say to the noble Viscount, Lord Trenchard, and the noble Lord, Lord Howell, that I agree with them on the importance of nuclear power. But I say to the noble Lord, Lord Howell, that this is the second time he has tried to divert the Government from supporting Sizewell C. I say to him that this is a massive development and we are moving to final investment decisions over the next few months. It will produce 3.2 gigawatts, it is a replica of Hinkley Point C, 80% above ground, and we have the regulated asset-based approach which will bring in private sector expertise and disciplines. So, in agreeing with him on the importance of small modular reactors and advanced nuclear reactors, we should not underestimate the potential of Sizewell C—and indeed Hinkley Point C when it comes on line, I hope at the end of this decade.

Of course I take the points that data centres will need a lot of electricity, that grid capacity issues are vital and that we need more investment in the grid. I also take the point made by the noble Lord, Lord Berkeley of Knighton, about the beauty, or not, of pylons. I of course accept the point he makes, but we are going to have to have more pylons. None the less, they will have to go through vigorous planning and meet environmental protection requirements.

On jobs and Amendment 60, GBE aims to revitalise the UK’s industrial areas and we think that, by situating its headquarters in Aberdeenshire—which I am sure the noble Lord, Lord Bruce, will welcome—it will be able to leverage the skilled workforce available there and throughout Scotland. More broadly, we have set up the Office for Clean Energy Jobs to promote clean energy employment and focus on skills development and training in the core energy and net-zero sectors.

Amendments 61 and 76 concern supply chains, which are of course very important indeed. GBE’s founding statement has already made it clear that my department expects the company to prioritise the development of supply chains and to report to government on progress. To come to the noble Lord, Lord Alton, of course we have debated these matters over the years and I absolutely understand where he is coming from. But it will be for GBE as an operationally independent company to determine the projects and technologies it chooses to invest in, in accordance with its objectives. It will be expected to respect human rights under the Human Rights Act 1998 and it will be subject to the provisions on forced labour and supply chains, both under the Modern Slavery Act 2015 and the Procurement Act 2023.

We recently set out our Clean Power 2030 Action Plan, which requires significant deployment of solar electricity—noble Lords are right on that. Developing sustainable, diverse and resilient solar supply chains, free from forced labour, is important for the Government. As the noble Lord, Lord Alton, knows, we also have the Solar Taskforce, which will be looking at these matters.

On Amendment 63 on the cost of fulfilling the company’s strategic objectives, I can assure the noble Lord, Lord Petitgas, that the Secretary of State will set ambitious but achievable objectives for Great British Energy that can be achieved through the funding envelope. GBE will be backed, as noble Lords will know, by a capitalisation of £8.3 billion over this Parliament, and its objective is to crowd in additional private sector investment. However, it will be subject to HM Treasury’s value-for-money guidelines and, like existing publicly financed institutions, its investments will be subject to safeguards and risk assessments.

On Amendments 69, 70 and 85A, on the impact on carbon emissions of GBE’s investments, the company is committed to advancing the deployment of clean energy to aid the Government’s goal of decarbonising our electricity system by 2030. The amendments would require a report to be produced for every investment made by Great British Energy, which seems neither proportionate nor effective. On importing energy into the UK, we acknowledge that reliance on imported fossil fuels presents economic and security risks, as evidenced by the situation following the Russian invasion of Ukraine. The best response is to increase domestic power generation through renewable energy sources and nuclear power, while simultaneously transitioning to more sustainable methods for heating homes, fuelling vehicles and powering industry. These can substantially mitigate our exposure to volatile international markets and energy price fluctuations. We see GBE as being at the heart of those efforts.

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Moved by

[Earl Russell]

66: Clause 6, page 3, line 38, at end insert—
“(1A) The Secretary of State may not give specific or general directions to Great British Energy unless they have delivered an oral statement setting out those directions before Parliament.”Member's explanatory statement
This amendment would prevent the SoS from directing GBE unless they have delivered an oral statement to Parliament.

[Earl Russell (LD)]

My Lords, I rise to open this group of amendments, all on consultation and oversight, and to move my Amendment 66 in this group. Amendment 66 seeks to prevent the Secretary of State from directing GB Energy unless they have previously delivered an Oral Statement to both Houses of Parliament. Our view is that this is a reasonable check and balance on the use of these powers. My amendment does not stop the Secretary of State from giving strategic directions; it simply requires that, before doing so, the Secretary of State must have previously given this Oral Statement to both Houses.

We recognise that, for the Government, this is a reserve power that would be used only in emergencies. We also recognise that the Bill as written requires the Secretary of State to have previously consulted with GB Energy and any other persons the Secretary of State considers appropriate, and that the directions must be laid before Parliament. Our concern is that these are both very powerful controls given to the Secretary of State and, even with the condition to lay the direction before Parliament, that is done only after the direction is given. There is no opportunity for Parliament to discuss in any form the direction given or the reasons for it, or to have any opportunity to amend it before the direction is given to GB Energy. Parliament also has no say or chance to contribute to the form the direction should take. There is no way that Parliament can change the shape of it or amend it. These powers are absolute: GB Energy is directed in statute that it must comply with the directions given under this part of the Bill.

I draw the Committee’s attention to the fourth report of the 2024-25 Session of the House of Lords Constitution Committee, published on 28 November, which says of these provisions that,

“we are concerned that clauses 5 and 6 amount to ‘disguised legislation’. … This is of constitutional concern because there is no parliamentary oversight over the making of the statement of strategic priorities or the directions to Great British Energy”.

I must admit that I have to agree with that assessment. Our view is that, if there is a level of need such that directions from the Secretary of State are required, then there is also a level of concern such that a Statement should be provided to both Houses of Parliament.

When matters have gone this badly wrong, it is also important that Parliament should be given the opportunity to scrutinise what went wrong and why and what proposals the Secretary of State is bringing to make them right again. It is important that Parliament is given the right to look at how the new plans might work in practice and to be able to advise and raise objections with and suggest improvements to the Secretary of State. The Minister may come back on this amendment and may speak of this being a reserve power. He may say that these will be used rarely, if they are ever used at all; but when they will be needed, they will be needed urgently. The Minister may also argue that the Secretary of State would have previously consulted with GB Energy and others as the Secretary of State saw fit. This is all correct, but consultation in private could amount to no more than delivering the unhappiness on behalf of the Government and instructing the direction to GB Energy. These meetings happen in private, and Parliament is not privy to any of this information or the outcomes.

The Minister may also argue that these powers have been used in—and, indeed, directly copied from—the nuclear energy Bill. To that, I might kindly argue that nuclear accidents and nuclear emergencies are of a different order of magnitude to our renewable sector, although I do recognise the need for urgency when it comes to our energy supply and energy security. I also recognise that GB Energy will have a role in the nuclear sector—although that is to be strictly defined as yet—and, if the Minister wishes, a government amendment to my amendment could call for an exemption for either a nuclear accident or a national energy security emergency. I would be interested in the Minister’s response to my amendment, and I would be happy to discuss this with the Minister prior to Report.

For all other cases, my view is that an urgent Statement can be tabled in both Houses in a matter of mere days, and this can run concurrently while the Minister fulfils his other obligations in respect of consulting with GB Energy and others. Our view is that this is a carefully crafted amendment which seeks to balance the need to address emergency issues against the need for proper and full parliamentary scrutiny to take place. These may be reserve powers, but they are absolute powers, and they are under the sole control of the Secretary of State. They are enacted after consultations and are merely reported to Parliament after they have been enacted.

I ask the Government to think carefully. I know that they might feel that these powers are safe in their hands, but how would the Minister feel if, for example, Labour were to lose the next general election and these powers were in the hands of another Administration? I think it is in that light that the Government should reflect on whether there is a need for a further check and balance on these powers.

Turning to the other amendments in this group, Amendment 87, in the names of the noble Baroness, Lady McIntosh of Pickering, and the noble Viscount, Lord Trenchard, goes further than my amendment. It says:

“A Minister must table a motion for resolution in each House of Parliament on any directions given to Great British Energy under this section before the directions are adopted”.


I am generally supportive of this amendment, but I have two concerns about it. First, holding a vote will take more time. Secondly, if Parliament, for whatever reason, decided not to approve the directions, I wonder what the consequence would be, because these directions are only given in emergency situations. That is an unlikely consequence, but I do not necessarily agree that having a vote actually helps in this case. What I am interested in is parliamentary scrutiny and conversation, not Parliament having the right to have a vote on this issue.

Finally, Amendment 86, in the name of the noble Lord, Lord Cameron of Dillington, amends Clause 6 by adding that consultation should take place with the National Energy System Operator, the Climate Change Committee and the Gas and Electricity Markets Authority. This amendment is helpful, but to my mind it does not resolve the issue; the issue is one of parliamentary scrutiny, and Amendment 86 does not provide further parliamentary scrutiny. The heart of this, for me, is simply having greater opportunities for parliamentary scrutiny while not delaying emergency actions. That is what I am trying to balance. I beg to move.

[Lord Cameron of Dillington (CB)]

My Lords, Amendment 86 in my name is, as noble Lords will realise, very similar to Amendment 56 in the name of the noble Baroness, Lady Hayman, which was spoken to last month by the noble Lord, Lord Ravensdale. The point is that we all have concerns about the overwhelming statutory powers of the Secretary of State to control, and give random formal directions to, GBE. As I said at Second Reading, we are worried that modern politicians are no longer likely to have had experience of running a business, particularly an investment business, which is what this is. On the whole, the same applies to civil servants who might be advising the Secretary of State. They also usually have little experience of the nitty-gritty of day-to-day private sector business and its associated hour-by-hour assessment of risk and, more to the point, when to take that risk. In other words, you cannot always be totally safety conscious.

Probably the key person with whom the Secretary of State should be consulting is a private sector investment analyst, or even a team of private sector investment analysts, as the noble Lord, Lord Petitgas, was saying early on in the previous discussions. That might be hard to spell out on the face of the Bill, so I will leave that one hanging. As noble Lords can sense, however, I am not at all happy that a politics-orientated—maybe even a party- politics-orientated—Secretary of State of either party should be able to give any direction at all on the issue of practical investment to a hopefully business-orientated board of GBE. I support Amendment 68 in the name of the noble Earl, Lord Russell.

The next thing to say is that Clause 6(3)(b) is superfluous. It states that the Secretary of State should consult

“such other persons as the Secretary of State considers appropriate”.

It is legally meaningless. The Secretary of State could take it or leave it. If he consults with no one, he can claim he did not consider anyone appropriate, so he is under no obligation to consult anyone, apart from Great British Energy, as it stands in Clause 6(3)(a). We therefore need some more specific recommendations.

It is of course right that the Secretary of State should have to consult GBE—after all, it will implement whatever direction he or she gives it—but the Secretary of State should also consult NESO. After all, it is responsible for driving the delivery of our power through the national grid and other transmission companies—we discussed this on another group—so, clearly, it needs to be consulted.

Then there is the Climate Change Committee, which is in very close touch with the state of play of the progress to net zero. It is also in touch with the latest science and knows the priorities of what is most needed to get us to net zero. It will have a view on what could or should be the essential focus of GBE, so it should also be consulted.

Then of course there is Ofgem, which represents the consumers and is their voice, so it seems only right that it should also be consulted on any formal direction from the Secretary of State to GBE. There may be others, and I take the point from the noble Earl, Lord Russell, about the fact that my list is of consultants, rather than Parliament, which might be able to influence the direction of the Secretary of State in a more formal way—although I hope that a consultation exercise would also influence his decision-making process.

In his response to Amendment 56 last month, the Minister seemed to say that the amendment was unnecessary because the Secretary of State would be in permanent consultation with all the organisations involved anyway, but he was at that time talking about the consultation on the strategic priorities in Clause 5 and here we are talking about later specific directions given by the Secretary of State to GBE. After all, the Government themselves put Clause 6(3) in the Bill, so they must have thought that highlighting the importance of consultation, and whom it is with, was important and necessary. In my view, they did not make it specific enough, or possibly wide enough, so I hope they can accept that they should enlarge their constituency of consultees.

--- Later in debate ---

[Lord in Waiting/Government Whip (Lord Cryer) (Lab)]

My Lords, I now turn, as you would expect, to Amendments 66, 86, 86A and 87, tabled by the noble Earl, Lord Russell, the noble Lord, Lord Cameron, the noble Baroness, Lady McIntosh, and the noble Viscount, Lord Trenchard. As I have said, and as my noble friend has said previously, Clause 6 sets out that the Secretary of State will be able to give directions to Great British Energy, and that Great British Energy must comply with those directions.

As Great British Energy will be operationally independent, the intention is that the power will be used only when it is really needed. This will ensure that GBE has the space it requires to fulfil its role and deliver its strategic priorities. I draw the House’s attention to the comments made by the noble Baroness, Lady Noakes, in this context.

The purpose of the clause is to ensure that there is a mechanism in place should any urgent or unforeseen circumstances arise. For example, it could be used if the Secretary of State considers that they need to give GBE a direction that is in the interest of national security or otherwise in the public interest. The amendments before us would risk delaying the Secretary of State’s ability to give Great British Energy that direction, potentially compromising national security under certain circumstances.

The noble Earl, Lord Russell, raised the perfectly reasonable points of accountability and scrutiny. I am not impugning his motives—or the motives of anybody else who has tabled amendments—but if there was an issue of national security that perhaps took place at the start of a recess, it would seriously hamper the Secretary of State’s ability to act.

The noble Earl also raised, interestingly, the possibility of Labour losing the next election. It may come as a shock, but we are not actually planning to lose the next election. However, the mechanism of accountability and the decisions of this Government and future Governments are subject to the views of voters. That is part of the democratic process. We might not like a future Government exercising the directions we have put on the statute book, but that probably applies to past Governments as well. It is part of the democratic process and the process of accountability and scrutiny.

The amendment in the name of the noble Baroness, Lady McIntosh, would take this point further by requiring the resolution of each House, which I genuinely do not think is practicable. However, to ensure transparency and accountability, any directions given to Great British Energy will be published and laid before Parliament before they are given.

Further, Clause 6 requires that the Secretary of State must consult GBE and other persons considered appropriate, before giving directions to GBE. This means that GBE’s management and its board—yet to be appointed—will have the opportunity to express any reservations they have about the direction to Ministers before any such direction is made. If appropriate, this could include the National Energy System Operator, the Climate Change Committee—which has been consulted by successive Governments—the Gas and Electricity Markets Authority, Great British Nuclear and the National Wealth Fund, as well as groups not referenced in Amendment 86.

The noble Lord, Lord Cameron, mentioned at least two of the organisations on that list; he mentioned others too, as I think did the noble Viscount, Lord Trenchard. We could end up with a list as long as your arm of bodies that have to be consulted, which would seriously hamper the Secretary of State’s room for manoeuvre.

Finally, it is not unusual for a Secretary of State to be able to direct an arm’s-length body and such powers are found in several pieces of legislation—again referenced by the noble Baroness, Lady Noakes. In the specific context of government-owned companies, such powers are, for example, included in the Energy Act 2023, which created Great British Nuclear, where named stakeholders are also not included in the directions clause.

For these reasons, I hope the noble Earl recognises that adding this detail would not be beneficial and will withdraw his amendment.

[Earl Russell (LD)]

In my speech, I recognised the needs of national emergencies or an energy emergency. One of the options I offered the Government was to allow them to amend my amendment to exempt those situations from the need to give an Oral Statement. Will the Minister respond to that specific point, please?

[Lord Cryer (Lab)]

The noble Earl makes a fair comment. However, what he is putting forward is far too prescriptive. There are plenty of precedents for Secretaries of State being able to operate in this way.

I am starting to sound like the secretary of the Baroness Noakes fan club, but the noble Baroness, Lady Noakes, pointed out that there is the ability to summon the Secretary of State before a Select Committee. There are various Select Committees which have the ability to summon Secretaries of State after the fact. Ministers of all Governments might not be that keen on appearing before Select Committees, but they do not have a lot of choice in the matter. In the vast majority of cases when they are summoned, they appear before the Select Committee and give an account of their actions.

[Earl Russell (LD)]

I thank the Minister for responding, and I thank everybody who spoke in the debate: the noble Lord, Lord Cameron of Dillington, the noble Viscount, Lord Trenchard, and the noble Baroness, Lady McIntosh of Pickering.

These are important issues; they are absolute powers. I recognise the point made by the noble Baroness, Lady Noakes, that there are other ways of summoning Ministers and that the whole idea of ministerial accountability is that Parliament afterwards can question Ministers. I think that is a bit of a second-tier kind of accountability, but I recognise that there may be situations where the Government need to act with urgency and even the act of giving a Statement could impede the Government from doing that, whether it relates to nuclear energy, energy security or foreign interference in our energy security. I did, therefore, offer the Government the possibility of amending my amendment.

It is important that we have discussed these issues. They are important powers, and it is important we debate them. I do not think we found an answer or a way forward, but the debate itself has been interesting. I thank the Government.

Amendment 66 withdrawn.

--- Later in debate ---

[Earl Russell (LD)]

My Lords, I will speak very briefly to respond to the amendments in the name of the noble Lord, Lord Fuller. We congratulate him on moving his first amendment—indeed, he got his own group of amendments together, which is to be welcomed. I am afraid that, on these Benches, we cannot support what he is doing; this is just not the right Bill to do it. Even if his amendments were successful, all they would do is limit the powers of Great British Energy to do this stuff; they do not limit any other organisation or body from doing it.

It is very important that the Government come forward with the land use framework as quickly as possible—these are important issues. My understanding is that that Bill should come through in April or around then. These are complicated issues; we are a small island and there is lots of competition on our land use.

Labour also promised us a rooftop solar revolution. We strongly support that and encourage the Government to continue to work on its delivery. France, for example, gets 5% of its electricity from solar panels on car parks. I would like to see this Government replicating that. We have heard about warehouses, but many are constructed to a standard that cannot take solar panels, because the roofs are not strong enough. We must do more to get solar panels into commercial spaces and housing.

I also encourage the Government to do more on the future homes standard. There is uncertainty about whether it will have proper, fit and strong purposes and standards for new-build houses. Then there is the issue of retrofitting existing houses and how we get more energy-efficient measures into them.

I will point out something to the Conservative Benches. The idea that we can either eat or have solar panels is a false dichotomy. I note that, while Amendment 67 applies to agricultural land of grades 1, 2 or 3, Amendment 73 applies to agricultural land of grades 4 and 5, so the Conservatives are covering quite a lot of grades with their amendments. I argue that climate change itself is the biggest issue for us in terms of food security, not solar panels that cover far less than 1% of our land. We have just had the worst harvest since 1988—if not ever, as some people say—and that was because of a continuous wet climate. We have had the failure of the last autumn and winter crops. It is climate change itself that is causing us to have problems with food security—and that is causing massive problems for our farmers.

I welcome the amendments but they are not ones that we can support.

[The Earl of Caithness (Con)]

My Lords, I apologise to the Committee for missing the first bit of my noble friend’s introduction to his amendments. I take this opportunity to ask the Minister whether he could update the Committee on where we are with the land use strategy. Like the noble Lord, Lord Cameron, I, too, have been banging that drum for some time.

As the noble Baroness, Lady Young of Old Scone, gently chided my noble friend for the length of his introduction, I say to her that he is perfectly entitled to speak for 12 and a half minutes when introducing an amendment. That would not be the case if he were just one of the rest of us.

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[Baroness Williams of Trafford (Con)]

My Lords, it has just gone 10 pm. We are just over half way through the Government’s stated targets for this evening. As the noble Baroness, Lady Young of Old Scone, said, it is highly unlikely that we can finish another eight groups any time soon.

It is a firm convention that the House rises at 10 pm between Monday and Wednesday, and there has been no agreement to the contrary. We have had, thus far to date, one and a half days in Committee against a committed three days. This is a significant Bill; £8.3 billion worth of taxpayers’ money is going into it. We owe it the scrutiny that such public spending, rightly, should deserve. I ask the Government Chief Whip whether he will resume the House now or fairly soon after.

[Earl Russell (LD)]

Will the Opposition Chief Whip take an intervention? I just want to point out that there have been two and a half days of scrutiny and not one and a half days. She is not correct.

[Baroness Williams of Trafford (Con)]

I think that the noble Earl was not listening to me. I said that, to date, we have had one and a half days of scrutiny, and tonight would make two and a half days. The Government committed to three days. That was the point I was making.