I write, not of our oxymoronically-named Secretary of State for Energy Security and Net Zero, but of his very expensive plaything, Great British Energy (sic). Already there is a website produced by the Labour Party ahead of the general election in July this year. Take a look, to see just how truly banal it is. It claims that it will reduce energy bills while also promising to invest in very expensive sources of energy, such as floating offshore wind and hydrogen, and quotes some very credulous electors who obligingly parrot the claim that it will “end the struggle between heating and eating.” That last claim is attributed to Gary, a pensioner from Dudley. I wonder if he is one of those who is now wondering what he has done. Is he one of the millions of pensioners who will be losing their winter fuel allowance?
The new Labour government has already appointed Juergen Maier CBE chair of Great British Energy. You can find out some more about him at his own website. As for the job he has been tasked with, it does seem to be a pretty ineffectual one. The government’s press release of 25th July 2024 tells us that the organisation won’t actually do very much. Rather it is to be given £8.3 Billion of taxpayers’ money to nudge and keep its fingers crossed:
Great British Energy will have five key functions
- Project development – leading projects through development stages to speed up their delivery, whilst capturing more value for the British public
- Project investment – investing in energy projects alongside the private sector, helping get them off the ground
- Local Power Plan – supporting local energy generation projects through working with local authorities, combined authorities and communities
- Supply chains – building supply chains across the UK, boosting energy independence and creating jobs
- Great British Nuclear – exploring how Great British Energy and Great British Nuclear will work together, including considering how Great British Nuclear functions will fit with Great British Energy
Leading, co-investing, supporting, boosting, exploring, considering. It’s like a thesaurus of management-speak gobbledook. It turns out that it’s not going to own anything, it’s not going to make anything, it’s just going to cost us all a lot of money while possibly helping to make our energy bills even higher.
Surely, I thought, that’s a bit cynical, even for me. There must be more to it than that. The Great British Energy Bill was being debated in the House of Commons the other day and I was pleased to see that it was rather more meaningful than the mutual back-slapping that accompanied what passed for a debate about the latest round of awards under the Contracts for Difference regime. At first it looked as though it was going to be more of the same, until Claire Coutinho stepped up for the Conservatives and proposed an amendment:
…this House, while recognising the need to cut household energy bills for families, accelerate private investment in energy infrastructure, and protect and create jobs in the energy industry across the UK, declines to give a Second Reading to the Great British Energy Bill because Great British Energy will not produce any energy, will not reduce household energy bills by £300, does not compensate for the amount of investment in energy projects that will be deterred by the Government’s plans to prematurely shut down the UK’s oil and gas sector, and involves an unjustified use of taxpayers’ money at a time when the Government is withdrawing the Winter Fuel Payment from 10 million pensioners as energy bills rise.
She went on:
I do not want to oppose the Bill just for opposition’s sake, but the Secretary of State has provided no detail on how the Bill will deliver any of his promises, let alone all of them. It is a four-page Bill in which he is asking for £8 billion of taxpayers’ money, while setting out no investment plan, no figures for the energy that will be produced, no numbers for energy bill savings or carbon emission reductions, and not even a timeline. I doubt it can deliver any of the things he has promised. He is asking for £8 billion of taxpayers’ money—a completely blank cheque—for an energy company that will not cut bills or turn a profit by 2030….
…The Secretary of State is setting up a new body when our energy sector is not short of state-run bodies. We have Ofgem, the National Energy System Operator, the Climate Change Committee, Great British Nuclear and, of course, the UK Infrastructure Bank, with £22 billion to provide debt, equity and guarantees for infrastructure finance to tackle climate change, set up by the former Prime Minister.
At this point, the taxpayer might well ask why they are coughing up twice for programmes that do the same thing. Here is why. When I read the Bill, tiny as it is, it rang a bell and, lo and behold, it is a carbon copy of the Infrastructure Bank legislation, so why do the same thing again? Well, there are a few important omissions and tweaks. First, while the Infrastructure Bank legislation sets out directions for governance by directors and non-executive directors, the Bill does no such thing. While the Infrastructure Bank legislation appoints an independent person to carry out a review of the effectiveness of the bank in delivering its objectives, the Bill does no such thing.
Lastly, while the Infrastructure Bank legislation gives special powers to direct investments to the Treasury—to independent civil servants—the Bill gives powers to the Secretary of State, who, as far as I am aware, has no investment background and no financial training and whose only period in the private sector, if I have this right, was as a researcher at Channel 4.
I think she made a number of excellent points there, though naturally – given the Government’s unassailable majority in the House of Commons – the amendment she proposed was not carried. What intrigued me, however, was her reference to the Great British Energy Bill being only four pages long. This is in marked contrast to the enormously complicated Energy Act which I critiqued (while it was still just a bill) here and here. I thought I really ought to take a look at the Bill itself.
Sure enough, after the boilerplate introductory blurb that we have learned to expect (statements that it is compliant with the European Convention on Human Rights and that it represents an environmental law that won’t reduce the level of environmental protection provided by any existing environmental law) we do learn that it is an extremely short piece of proposed legislation indeed. (Digression – lawyers might have some fun arguing that it if its object is to promote a massive expansion in huge industrial-scale renewable energy projects with their associated layers of infrastructure, then it does infringe various rights under the European Convention on Human Rights and is also environmentally damaging).
Clause one simply deals with the setting-up of the company and its name, while a very short clause 2 deals with its status. Clause 3 provides for its objects, which are to be “restricted to facilitating, encouraging and participating in— (a) the production, distribution, storage and supply of clean energy, (b) the reduction of greenhouse gas emissions from energy produced from fossil fuels, (c) improvements in energy efficiency, and (d) measures for ensuring the security of the supply of energy.”
(Again, those of us of an argumentative disposition might take issue with the definition of “clean” energy as being simply “energy produced from sources other than fossil fuels”).
Clause 4 provides (as Claire Coutinho observed) for the Secretary of State to provide financial assistance to Great British Energy, whether by way of grant, loan, guarantee or indemnity; acquisition of shares or other interest in any other company; the acquisition of any undertaking or assets; pursuant to a contract; or by incurring expenditure for the benefit of Great British Energy, subject (or not, as the case may be) to any conditions he considers appropriate.
Clause 5 provides that the Secretary of State must prepare a statement of strategic priorities for Great British Energy, which he can revise or replace, and which must be laid before Parliament. This must involve consultation with Scottish and Welsh Ministers and the Department for the Economy in Northern Ireland, where matters reserved to devolved legislation are touched upon.
Clause 6 provides that the Secretary of State may (after consulting Great British Energy and anyone else he considers appropriate) give instructions to Great British Energy and lay those instructions before Parliament. Great British Energy must comply with those instructions.
Clause 7 deals with the preparation of its report and accounts and provides that they must be laid before Parliament. Clause 8 confirms that the legislation is to extend to the whole of the United Kingdom.
And that’s it.
I wasn’t joking when I said at the outset that it’s going to be Ed Miliband’s very expensive plaything. It’s his creation and it’s his to do with as he pleases. Judging by the debate in the House of Commons, the website set up in advance by the Labour Party, and the Press Release issued by the Government in July, it doesn’t seem as though the Secretary of State yet has much idea about how it is to achieve its mutually contradictory objectives. While I am entirely lacking in confidence with regard to this farce there is one thing I have every confidence in – its ability to waste £8.3 Billion of taxpayers’ money over the next five years.
