Amendment 2

Great British Energy Bill - Committee (1st Day) – in the House of Lords at 4:30 pm on 3 December 2024.

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Lord Frost:

Moved by Lord Frost

2: Clause 1, page 1, line 3, at end insert “, in order to advance the objectives set out in subsection (1A).(1A) The objectives which the Secretary of State must seek to advance in designating a company as Great British Energy are—(a) reducing household energy costs in a sustainable way, and(b) promoting the United Kingdom’s energy security.”

Photo of Lord Frost Lord Frost Minister of State (Cabinet Office)

My Lords, I rise to move Amendment 2 in my name, and I thank my noble friend Lord Offord for his Front-Bench support for it. I draw noble Lords’ attention to my interests as set out in the register, and I note my regret that I could not be here for Second Reading.

The purpose of my amendment is to establish why the Government are creating Great British Energy and what its underlining objectives and purposes are. Ideally, this would be clear from the Bill or the related documentation, but it is such a thin Bill that calling it a “skeleton” Bill really does not do it justice. Its rather evanescent, wraith-like provisions provide no solidity other than giving a fig leaf of cover to the willed actions of the Secretary of State. I think that we as legislators and the British people are owed a bit more than that from the Bill.

Before I come to the detail, I note that the Bill includes a requirement for the articles of association to contain a statement of “objects”. Of course, objects are not the same as objectives, and what is now Clause 3(2) bears that out. The objects there described are process requirements on the company and limits on where it may spend its very generous taxpayer funding: production of energy, reduction of carbon emissions, energy efficiency, security of supply and so on. They are a “what”; they not the “why”.

The Bill also includes a requirement, in Clause 5, for Great British Energy to have strategic priorities and plans but, again, there is absolutely no constraint on the Secretary of State as to what those strategic priorities may be. Really, this is not good enough for a vehicle for £8 billion of taxpayers’ cash. It is important to have a clear idea of why Great British Energy exists and what its purposes are. That is what my amendment is there to secure and why it is written as it is.

My amendment sets out two objectives for Great British Energy:

“reducing household energy costs in a sustainable way” and

“promoting the United Kingdom’s energy security”.

In putting those two objectives forward, I am not inserting my own view to substitute for that of the Government. Rather, I am ventriloquising into the Bill, looking at the political statements, spoken and in writing, of the Government and the party opposite and trying to use them to ascertain why they feel this Bill and this company are necessary.

I will briefly take noble Lords through this. I look first, of course, at the Labour Party manifesto— a document whose probative status has been quite significantly weakened in recent months, one might say, but it is all that we have. Number four of the six priorities of the party says:

“Set up Great British Energy, a publicly-owned clean power company, to cut bills for good and boost energy security”.

Those are the two purposes set out in my amendment. Similarly, the launch document for Great British Energy, which was published on 25 July, says that:

“In an unstable world, the only way to guarantee our energy security and protect billpayers permanently is to speed up the transition away from fossil fuels”,

et cetera. At Second Reading in the Commons on 5 September, the Secretary of State said that the Bill would “protect family finances”. The Energy Minister said that it would

“guarantee our energy security and protect bill payers once again.

It seems a fair reading to see these as the underlying purposes of Great British Energy and to see them reflected in the Bill. If the Minister, speaking for the Government, thinks differently on this, then perhaps in winding up he could explain what the Government see as the objectives of Great British Energy instead and why they should be different from those in this amendment.

Noble Lords may ask why, if those purposes are understood by all concerned to be the objectives of Great British Energy, they need to be reflected explicitly in the Bill. There are a few reasons. The first, which I have touched on, is simple transparency. The hard-pressed British taxpayer needs to know why they are being asked to stump up over £8 billion.

The second reason is that the Government seem to be doing a classic baptists and bootleggers operation with the Bill. The Government, having justified the creation of Great British Energy on the grounds I have just set out, have said a lot this autumn about energy security, however feebly justified, but rather less about protecting bill payers. Indeed, it is hard to avoid the sense that the Government are now trying to sidestep their commitment to cut bills, having repeatedly promised that Great British Energy would cut household energy bills by an average of £300. I could give many examples of where people who are now Ministers have commented on this. To give just one, Rachel Reeves, now the Chancellor, said on 19 June:

“Great British Energy, a publicly owned energy company, will cut energy bills by up to £300”.

It is a very clear commitment, but the Government are now reluctant to repeat this pledge and, indeed, defeated an amendment on this point in the Commons last month.

The £300 commitment has been replaced, sidestepped, shifted to one side and replaced by what the Energy Minister described in the Commons as a commitment to

“protect bill payers in the long term

Who knows when that will be? One might even think the Government are no longer confident that this vast expenditure of taxpayers’ money will reduce bills at all. Could the Minister tell us, in winding up, how much he thinks energy bills are likely to fall by 2030 once Great British Energy is up and running?

That brings me to my third point. Many observers, in which I include myself, are sceptical that the planned operations of Great British Energy are, in reality, likely to achieve what they purport. They are unlikely to fulfil either of the objectives in my amendment. After all, subsidies to renewables already stand at about £12 billion a year. That is a fact—it is in the Government’s accounts. The OBR estimates that this number will go up to £15 billion by the end of the Parliament.

This is not the place to review all the arguments on this point—we debated them on 14 November and I am sure we will discuss them again—but many of us are doubtful that public money funnelled into renewable energy that delivers power only when the wind blows and the sun shines is likely to increase our energy security. Many of us doubt that renewables are likely to reduce household energy costs. We look at the persistent increase in electricity prices since the renewables programme began in 2004—now giving us the highest prices in Europe—and wonder when the benefits are to come.

I take one view on this. No doubt Ministers and other noble Lords in the Committee take a different view. Reality will tell us who was right, but to be confident when we test what reality tells us we need to know what we are measuring against. My noble friend Lord Gascoigne noted in speaking on the railways Bill last month that the purpose clause he advocated was needed as a

“barometer setting out exactly what this Bill is seeking to do and what should be the Secretary of State’s overriding concern when making a decision

The same is true in this case. When the Secretary of State sets the strategic priorities in Clause 5, what are they supposed to be strategic about? When we reach 2030, whoever is in government at that point, we will need to know whether Great British Energy has succeeded against the tests it set itself—not whether it has fulfilled its objects or gone through the right processes, but whether it has succeeded against objectives connected to its underlying raison d’être.

That is why I submit that there needs to be a clear set of objectives in the Bill—for purpose, guidance, and to enable a judgment about success or failure. That is why Amendment 2 is necessary. I look forward to hearing the Minister’s reactions and the contributions from all noble Lords. Meanwhile, I beg to move.

Photo of Baroness Noakes Baroness Noakes Conservative 4:45, 3 December 2024

My Lords, I thank my noble friend Lord Frost for bringing forward this amendment. It crystalised in my mind that the Bill is a solution in search of a problem. It does not have a clear statement of what it is trying to achieve. Without that, it is likely that Great British Energy will end up with a set of activities that lack proper cohesion.

Like my noble friend Lord Frost, I have been searching back through what the Government have been saying, from the manifesto through to the “founding statement” and the Bill. The Government have been quite clear that they regard energy security and keeping bills low as important objectives of their Great British Energy project.

Being able to specify overarching objectives is logically separate from what we have in Clause 3: the objects of the company. These objects are designed to constrain Great British Energy to doing particular things that in turn will, in theory, deliver the objectives. If the objective is to deliver energy security, that can be delivered in a number of ways. Some could argue that having more oil and gas would be one way of giving us greater energy security. That is not the way that the Government have chosen, so through Clause 3 they restrict what Great British Energy will do to clean energy. As my noble friend Lord Frost said, after a number of years we should be able to judge whether they have achieved energy security through the way they have chosen to set up Great British Energy and the specific objects that it has been given.

My noble friend Lord Frost has outlined the way that the sands seem to be shifting on whether bills will be reduced. I heard on the radio this morning that the Prime Minister will reiterate his £300 promise this week. We look forward to hearing what he will say. Reducing bills and holding them down is clearly something that the Government have been promising for a good number of months by way of Great British Energy, and they need to be judged on whether they achieve that. They are choosing to do it through clean energy, as proposed in the Bill. We will need to look in due course at whether that objective has been achieved.

I have just a couple of drafting quibbles with my noble friend’s amendment. First, and most importantly, I do not think that the objective relating to bills should be confined to household energy bills. We know that the energy bills borne by British industries are ruinously high—much higher than those of all our competitors. Energy bills should be reduced for all energy consumers, not just households.

My second quibble is that the second objective in my noble friend’s amendment refers to “promoting” the UK’s energy security. I do not think it is good enough for this organisation to promote energy security; it should achieve energy security. I hope that, if my noble friend brings this amendment back at a later stage, he will bring a somewhat tougher version. However, these are minor quibbles with the drafting and do not detract from the fact that his amendment is very good.

Photo of Lord Hamilton of Epsom Lord Hamilton of Epsom Conservative

My Lords, I would like to support my noble friend Lord Frost’s amendment because we have to judge this Bill on what it achieves, rather than on the processes it goes through. I have a slight problem, because it seems to me that if you want lower energy prices, you want to recognise the advances made by technology and have lower feed-in prices paid by the consumer. That is the way you get energy prices down; but, of course, if Great British Energy is investing in the companies, it wants the feed-in prices to be as high as possible, so the companies make profits.

It seems to me that there is a conflict here, with government standing on both sides of the commercial argument. Let us face it, my noble friend Lady Noakes is right: the price industry is paying for energy as a result of this extraordinary pursuit of net zero is making us extremely uncompetitive in world marketplaces and makes the reindustrialisation of this country something we can only dream about. No company is going to locate in Britain to start a business here if it is paying much higher energy prices than in the rest of Europe, as my noble friend Lord Frost has reminded us.

The Government have to be much clearer in their own mind on what they are trying to achieve with Great British Energy. Just saying that it is going to lower energy prices is not quite good enough, really; you have to say how it is going to lower energy prices. That is something we all want to see, but it is very difficult to attain. Perhaps the Minister can explain how all this is going to be done.

Photo of Lord Murray of Blidworth Lord Murray of Blidworth Shadow Minister (Home Office)

My Lords, I just wish to make one submission on this amendment, in support of my noble friend Lord Frost. Clause 1(1A)(a), proposed by the amendment, contains the phrase

“reducing household energy costs in a sustainable way”.

The great merit of this is that “sustainable” has two meanings in this context: first, that the low prices are sustained over a long period, which is clearly a good thing; and secondly, that they are sustainable in the sense that they are good for the environment. It is a very well-drafted purpose clause and I commend it to the Committee.

Photo of Lord Offord of Garvel Lord Offord of Garvel Shadow Minister (Energy Security and Net Zero)

I rise to speak to Amendment 2, in the name of my noble friend Lord Frost and my own. This amendment brings critical clarity to the purposes of the Great British Energy Bill. It clearly outlines the two primary objectives the Secretary of State must pursue when designating a company as Great British Energy: first, reducing household energy costs in a sustainable manner; and secondly, promoting the UK’s energy security. I should add that I would not in any way quibble with my noble friend Lady Noakes’s amendments to both those provisions.

These objectives reflect the values of economic responsibility, national sovereignty and long-term sustainability. In the face of rising energy prices and global uncertainty, ensuring that energy remains affordable for British households and businesses is paramount. Reducing costs while maintaining a focus on sustainability means we can protect consumers without compromising the environment. Moreover, energy security has never been more important. The UK’s reliance on foreign energy sources leaves us vulnerable to geopolitical instability—today we still import 40% of our energy. By emphasising energy security in this amendment, we are prioritising the resilience of our national energy infrastructure. A secure energy supply is not just a matter of economic policy; it is a matter of national security.

This amendment provides the framework for a holistic energy strategy that benefits consumers, supports industry and strengthens our nation. As Conservatives, we on these Benches believe that the Government’s role is not to overregulate or restrict but to create the conditions for growth and sustainability. Therefore, Great British Energy must not be a mere title, but an institution, if at all, that advances these vital objectives of lowering energy costs and ensuring energy independence for future generations.

It is imperative that we recognise the significance of Amendment 2, not only in the context of the Bill but as a cornerstone of sound legislative practice. Providing a clear statement of purpose ensures that any future actions taken under this Bill align with the objectives of affordability and energy security. Without such a guiding clause, we risk leaving the interpretation of the company’s aims open to ambiguity or to shifting priorities over time. Does the Minister not agree that a purpose clause of this nature would greatly improve the clarity of the legislation? If he does not agree to support this clause, could he outline on what grounds that decision has been taken?

This amendment would also serve to reassure the British public and industry stakeholders that Great British Energy will not deviate into activities that may undermine these core objectives. We have seen in the past how well-meaning initiatives can become overly bureaucratic or lose sight of their founding principles. A purpose clause acts as a safeguard, compelling policymakers and administrators to remain true to the Bill’s intent.

To those who may argue that such specificity is unnecessary, I suggest that clarity fosters confidence. At a time when public trust in institutions is fragile, transparency in our legislative process matters. A purpose clause does not bind the hands of future Governments unduly; rather, it provides a clear framework within which they can operate and, indeed, innovate.

Let us not forget the broader geopolitical and economic context within which we are legislating. As we have seen with energy crises across Europe, over-reliance on foreign imports can leave nations exposed to sudden shocks. This amendment would equip Great British Energy with the mandate to bolster domestic resilience, reducing our exposure to such vulnerabilities. It also aligns with our broader net-zero commitments, as energy independence and sustainability often go hand in hand. By investing in clean, home-grown energy sources, we would reduce costs for consumers in the long term while cutting emissions. Is that not the win-win for households, industry and the environment that we all want to achieve by 2050?

Finally, I return to the principles we should be prioritising: prudent economic stewardship, self-reliance and forward-looking governance. This amendment is an opportunity to embed these principles in the DNA of Great British Energy at its birth. I urge the Minister to consider the benefits of a more explicit legislative framework and to recognise that this amendment is not an imposition but merely a refinement of the Bill’s ambitions. I urge my colleagues to support this amendment, which would ensure that Great British Energy is both practical and purposeful, with clear measurable goals that would directly benefit the British people and our economy.

Photo of Lord Hunt of Kings Heath Lord Hunt of Kings Heath Minister of State (Department for Energy Security and Net Zero) 5:00, 3 December 2024

My Lords, that was an interesting debate, led by the noble Lord, Lord Frost, proposing an addition to Clause 1 which would set Great British Energy’s objectives as

“reducing household energy costs in a sustainable way, and … promoting the United Kingdom’s energy security”.

The noble Lord asked why we are doing this. He then, to be fair, referred to the—I think three—debates we have had on energy policy in the last few weeks, in which we clearly set out our aims and drive towards clean power and net zero. We see Great British Energy, with the provision of financial assistance from the Secretary of State, as being at the heart of our clean power mission. It will speed up the deployment of mature and new technologies, as well as local energy projects. It will support the Government’s aim of decarbonising our electricity system by 2030, while ensuring we can meet future demand as we further decarbonise the economy.

I noted the intervention from the noble Lord, Lord Hamilton, and I thought I detected some scepticism about net zero. I remind him that his party, over 14 years, has made various statements in support of net zero. I note that Mrs Thatcher, at the UN General-Assembly in November 1989, said:

“the environmental challenge which confronts the whole world”—

Photo of Lord Hamilton of Epsom Lord Hamilton of Epsom Conservative

I thank the noble Lord for giving way again. I think he will be the first to acknowledge that two wrongs do not make a right.

Photo of Lord Hunt of Kings Heath Lord Hunt of Kings Heath Minister of State (Department for Energy Security and Net Zero)

My Lords, it was more than two. I can quote Prime Minister May, and I acknowledge her leadership in this country being the first to enshrine the 2050 net-zero carbon target. Prime Minister Johnson only recently addressed COP 26 in Glasgow; I think we all acknowledge the leadership the noble Lord, Lord Sharma, showed there. The noble Lord, Lord Ahmad, announced to the UN the £11.6 billion in international climate finance for the period 2021-22. Although we are having this friendly discussion about future energy policy, there is still some consensus on the need to decarbonise our energy supply, and Great British Energy is part of the way we are going to do it.

The key thing in the structure of the Bill is the objectives set in Clause 3. They will be informed by the statement of strategic priorities that Great British Energy will operate in, making sure that it will be aligned with the Government’s priorities. We have been clear that the first statement, which will be published in 2025—after due consultation and discussion with the devolved Governments and with Jürgen Maier, the chair of Great British Energy—will ensure that GBE is focused on driving clean energy deployment to boost energy independence, create jobs and ensure that UK taxpayers, bill payers and communities reap the benefits of clean, secure, home-grown energy.

Of course, the issue of energy bills is very important. We are relying strongly on the advice of the Climate Change Committee, of which the noble Lord, Lord Hamilton, is probably not a great fan—but none the less, over 14 years his party listened to it. The committee said that a clean energy future is the best way to make Britain energy independent, protecting bill payers, creating good jobs and tackling the climate crisis.

The independent National Energy System Operator confirmed a few weeks ago that our 2030 clean power goal is achievable and can create a cheaper, more secure energy system. More broadly, the OBR—another body to which the previous Government paid great attention; they ran into trouble when they did not—highlighted that delayed action on reaching net zero will have significant negative fiscal and economic impacts. The Committee on Climate Change has said that the net costs of the transition, including upfront investment, ongoing running costs and costs of financing, will be less than 1% of GDP over the entirety of 2020 to 2050—lower, it said, than it concluded in its 2019 Net Zero report.

I have already said that we will publish the statement of priorities in 2025. How will GBE be judged? It will be judged on its performance against the statement of priorities within the context of the objectives set by Clause 3.

Photo of Lord Vaux of Harrowden Lord Vaux of Harrowden Crossbench

The Minister has said again that the objectives of the company are set out in Clause 3. I am afraid that is not correct. The objects of the company are set out in Clause 3. As the noble Baroness, Lady Noakes, said, those objects restrict the activities—they do not set out the objectives. Nowhere in the Bill are the objectives of the company—what it is trying to achieve—laid out. I have not yet heard an argument from the Minister as to why that is.

Photo of Lord Hunt of Kings Heath Lord Hunt of Kings Heath Minister of State (Department for Energy Security and Net Zero)

I really do not read Clause 3 in that way. Subsection (2) says:

“The statement must provide that Great British Energy’s objects are restricted to facilitating, encouraging and participating in”.

One way to read that is that Great British Energy’s objects are around the following four paragraphs, informed by the strategic priorities and plans that the Secretary of State will prepare over the next few months.

Photo of Lord Vaux of Harrowden Lord Vaux of Harrowden Crossbench

There is only one way to read the words the “objects are restricted to”. That is what the clause says.

Photo of Baroness Noakes Baroness Noakes Conservative

My Lords, the noble Lord, Lord Hunt, may not be as familiar with company law as the noble Lord, Lord Vaux. The object of a company, which is what the clause refers to, is a constitution document, and it restricts what a company can do. That is what company law sets up for it. The Minister is trying to read “objects” in a broader sense. It is very clear that the clause refers to the legal documentation that will surround the full legal implementation of Great British Energy as a company. It does not have any other meaning.

Photo of Lord Hunt of Kings Heath Lord Hunt of Kings Heath Minister of State (Department for Energy Security and Net Zero)

My Lords, it is always helpful to have that kind of clarification, because I certainly was not intending to mislead the Committee in any way. From what I see in Clause 3, I am clear that GBE can participate in, encourage and facilitate the production, distribution, et cetera—informed, as I say, by the strategic plans and priorities. But I will obviously look at that and, if I have got myself confused, I will certainly reflect on it.

Photo of Lord Frost Lord Frost Minister of State (Cabinet Office)

My Lords, I am most grateful to the Minister for his response and to all those who contributed to our discussion, including the mini-discussion at the end about the difference between objectives and objects, which is important and I am sure we will return to it. I do not want to detain noble Lords long but, as the Minister repeated the words of Lady Thatcher on this subject, I cannot forbear repeating her words in her final work on it:

“By the end of my time as Prime Minister I was also becoming seriously concerned about the anti-capitalist arguments which the campaigners against global warming were deploying”.

She—rightly, in my view—added:

“We should be suspicious of plans for global regulation that all too clearly fit in with other preconceived agendas. We should demand of politicians that they apply the same criteria of commonsense and a sense of proportion to their pronouncements on the environment as to anything else”.

Those wise words are worth bearing in mind today when we discuss this issue.

I am not sure that we have entirely got to the bottom of this issue, and I suspect that we will have to return to it in some form on Report, because it is so fundamental to what the Bill is about. For now, I beg leave to withdraw my amendment.

Amendment 2 withdrawn.

Amendments 3 to 7 not moved.

Clause 1 agreed.

Clause 2: Crown status

Debate on whether Clause 2 should stand part of the Bill.

Photo of Baroness Noakes Baroness Noakes Conservative

My Lords, I tabled the Clause 2 stand part notice to probe the reasons why Clause 2 rules out Crown status for Great British Energy, but I also tabled it to explore further one of the topics we have already discussed: the relationship between Great British Energy and the National Wealth Fund.

As we debated at Second Reading, the Bill is a partial cut-and-paste job on the UK Infrastructure Bank Act. The main difference is that some important chunks did not get all the way over to the paste bit of the instruction. One way in which this Bill and that Act differ is that Clause 2, which deals with Crown status, has no counterpart in the 2023 Act. I do not know why the 2023 Act was silent on this, and I do not think we debated it when we went through the UK Infrastructure Bank Bill, as it then was. But, since the National Wealth Fund is fairly closely controlled by the Treasury, it may well have Crown status.

As we have discussed, the precise relationship between Great British Energy and the National Wealth Fund is something of a mystery, and I have to say that it remains so after the Minister’s letter to noble Lords after Second Reading. The Minister told us in that letter that the Government will set out the relationship in detail

“as Great British Energy scales up”—

I think that is code for saying, “We will make it up as we go along”.

The Minister said, as has been referred to, that in the early days Great British Energy investments will be made by the National Wealth Fund. This is another plea for him to explain how the interaction between the National Wealth Fund and Great British Energy will work in the context of one possibly having Crown status and the other very definitely not.

We have had almost no details on the much-trumpeted “partnership arrangement” with the Crown Estate and do not know how it will work in practice. However, for the purpose of this stand part debate, will the Minister explain how Crown status, which presumably attaches to the Crown Estate but not to Great British Energy, will affect activities under their partnership? Will the partnership itself have Crown status? That seems unclear.

I am no expert in constitutional law, but my understanding is that Crown status carries with it some exemptions from planning law and immunity from some prosecutions. I am not arguing for Great British Energy to have Crown status, because I think it should have as few freedoms as possible, but I seek in this short debate to find out the practical effect of not having Crown status, given that two of the closest partners that appear critical to the early success of Great British Energy have, or may well have, Crown status.

Photo of Lord Howell of Guildford Lord Howell of Guildford Conservative 5:15, 3 December 2024

My Lords, I support my noble friend Lady Noakes. We cannot let this clause float by with a nod of the head, because it omits vital developments—as our debates have done—in the whole pattern of energy supply and energy-environmental compatibility across the planet. They are developing fast in other countries but get no mention here, confirming that this piece of legislation, while sounding fine and fitting into the jigsaw of the past, is already out of date and being bypassed by major developments in the global politics of energy and the environment.

I will give the Committee two examples. The first is zonality. The thinking in many circles, certainly in America and increasingly here, is that energy security, which we discussed in relation to the amendment from the noble Lord, Lord Frost, will have to be considered in zonal rather than national terms; in other words, national, centralised organisations, even National Grid, do not fit into the pattern of a future that will deliver security, clean energy and affordability. If one applies a zonal lens to this scene—I listened to senior officials from the National Energy System Operator talking strongly about this the other night—many of the arguments we are having around Clause 1 fall to bits.

Secondly, US corporations, big corporations in other countries and some in this country are beginning to recognise that grid thinking and the centralised patterns of energy delivery compatible with net zero and our other objectives are never going to happen. We will have increased climate violence and it is too late to prevent the growth in carbon emissions which is going on now and continuing faster than ever. Methane, which is 80 times as lethal as carbon dioxide, is also growing very fast, according to the latest figures. Despite all our efforts, climate violence is coming and many feel that it is here already. Big corporations in America and some here are losing faith in the capacity of our system—a transformed, completely renovated grid system of transmission of power and a necessary pattern of generation which is reliable and does not stop when the wind stops—to supply their needs.

Such corporations are investing, or planning to invest, and finding out from National Grid that they have to wait 15 years to get any electricity, to adjust from gas to electricity, or whatever it is, and, in doing so, realising that they are on a futile course unless they can get their own assured, dedicated source of electricity. That is why we are reading in the papers about ideas for converting old coal stations to mini-nuclear power stations, and other technologies. All these things are racing ahead but none is mentioned in Clause 2. It is, in fact, if we are frank with ourselves, a completely unrelated and irrelevant clause.

Therefore, one’s inclination is to shrug one’s shoulders. I hope that when we come back to these things in detail at a later stage, we will have a rather more focused image of what is really happening in the world of energy supply, carbon dioxide and methane growth, climate violence, or anything else of which there is not much of a sign in this clause.

Photo of Lord Offord of Garvel Lord Offord of Garvel Shadow Minister (Energy Security and Net Zero)

My Lords, I rise to speak in favour of my noble friend Lady Noakes’s stand part notice. This clause deals with the Crown status—or more accurately, the lack of Crown status—of Great British Energy, and it is imperative that we probe the Government’s reasoning and consider the implications of this approach.

Clause 2 states clearly:

“Great British Energy is not to be regarded as a servant or agent of the Crown or as enjoying any status, immunity or privilege of the Crown”.

Additionally, it specifies that the property of Great British Energy

“is not to be regarded as property of, or property held on behalf of, the Crown”.

Let us pause and consider what this means. Great British Energy is envisaged as a significant player in the energy sector, with the Government making it central to our net-zero ambitions and national energy security. It may well handle substantial public funds, represent the UK’s interests domestically and internationally, and carry out critical projects on behalf of the Government. Yet the Government have deliberately chosen to sever this body from the legal, financial and symbolic framework provided by Crown status.

I pose the question: why? Why has this decision been taken, and what are the potential consequences? There are three areas of concern I wish to highlight; the first is accountability and oversight. Without Crown status, Great British Energy sits outside the constitutional framework that traditionally governs Crown bodies. Will this weaken Parliament’s ability to scrutinise its actions? Will the Comptroller and Auditor-General have clear access to audit its books? In an age of heightened public interest in corporate governance and transparency, these questions should be considered.

Secondly, on legal implications, by denying Crown status, Great British Energy forfeits the legal immunities and privileges that might ordinarily protect a public body in its dealings. Does this leave it more vulnerable to litigation? Could it become ensnared in disputes that detract from its primary mission?

Thirdly, this is a public body intended to work for the public good. Denying it Crown status might send a message—rightly or wrongly—that it is not fully embedded within the public sector, raising questions about its mission and accountability to the public interest. I do not suggest that Crown status is a necessity in all circumstances. Indeed, there may be good reasons for taking this route, such as granting Great British Energy greater operational flexibility or shielding the Government from certain liabilities—but these reasons have not been clearly articulated by the Government, and they deserve to be.

As we face unprecedented challenges in energy policy, the creation of Great British Energy is a momentous step. Its structure and status must instil public confidence, ensure robust accountability, and align seamlessly with the broader aims of our national strategy. Clause 2, as it stands, leaves too many unanswered questions.

Photo of Lord Hunt of Kings Heath Lord Hunt of Kings Heath Minister of State (Department for Energy Security and Net Zero)

My Lords, we think Clause 2 is very important. It ensures that Great British Energy will serve the public as an independent company and operate in the same way as other UK companies. Before I come on to the main body of the argument, I say to the noble Lord, Lord Howell, that he had some interesting points to make about the role of advanced nuclear reactors tied into industrial processes and data centres. We are watching very carefully what is happening in the US and we are in discussion with some of the companies themselves. I very much take his point about that.

The clause ensures that Great British Energy will not have any special status, immunity or privilege normally associated with the Crown, nor will its property be seen as the property of the Crown. It will also be subject to the same legal requirements as other companies. This is in line with the vision we have had for Great British Energy from the beginning: that it should be an operationally independent and agile market player, and we want to ensure it remains that way. If we were to leave out the clause, either Great British Energy would be regarded as a servant or agent of the Crown and have the immunity or privilege associated with that status; or, at least, there would be ambiguity as to whether it has that status.

I understand that the courts in recent years have been faced with questions about whether certain persons or bodies had Crown immunity, and the issue was not clear in the legislation—for example, the Commissioners of Customs and Excise, and the Commissioners of Prisons. The clause avoids that ambiguity and the possibility of any litigation arising regarding Great British Energy’s status. Examples of how this might arise in the context of Great British Energy, are, first, that Crown bodies are generally not covered by the requirements of the Employers’ Liability (Compulsory Insurance) Act 1969; and, secondly, that parts of the Health and Safety at Work etc. Act 1974 do not bind the Crown. We would not want Great British Energy to be exempt from that legislation or for it to be unclear whether it is bound by such legislation.

As I mentioned earlier in response to the noble Baroness, Lady Noakes, we expect Great British Energy and the National Wealth Fund to work well together. It is while Great British Energy is being established that it will utilise the National Wealth Fund’s existing expertise, which I think has been widely acknowledged. This is work in progress, and I cannot say very much more than that at the moment. We are not making it up as we are going along. There are earnest discussions between ourselves, His Majesty’s Treasury and Jürgen Maier, the chair of Great British Energy, and we will work closely with His Majesty’s Treasury to provide clarity to the market on how the two institutions will complement each other and how their relationship will evolve over time.

I also acknowledge that the partnership with the Crown Estate will be hugely valuable. On the question of the Crown Estate’s own position, I will have to seek further advice and write to the noble Baroness, Lady Noakes, because I do not have the answer at the moment.

Clause 2 agreed.

Clause 3: Objects