Meeting of the Parliament

Meeting date: Wednesday, October 4, 2023

Official Report 1073KB pdf

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Energy Bill

The next item of business is a debate on motion S6M-10709, in the name of Gillian Martin, on a legislative consent motion on the Energy Bill, United Kingdom legislation.

I would be grateful if members who wish to speak in the debate were to press their request-to-speak buttons.

I call Gillian Martin to speak to and move the motion, for up to seven minutes.

17:00  

As our energy consenting powers are largely executively devolved rather than legislatively devolved, any changes to those schemes require the agreement of the UK Government and legislation at Westminster.

The UK Energy Bill has presented an opportunity to refresh the legislative framework under which we operate. We have engaged with the UK Government on the bill in good faith over many months in order to meet our joint objectives of reaching net zero and enhancing domestic energy security while ensuring that the devolution settlement and, indeed, the powers of this Parliament are respected.

The Scottish Government has secured amendments to the bill that are good for Scotland, provide a degree of protection for devolution and support a just energy transition. The bill will support our efforts to decarbonise heat in buildings by providing new powers for Scottish ministers to make and amend regulations covering energy performance certificates, replacing powers that were lost across the UK at European Union exit. It enables us to introduce regulation of heat networks, which will be critical to meeting our statutory heat networks targets and spreading the costs of heat networks regulation fairly by pooling costs across Great Britain. It will also give Scottish ministers formal influence over a significant new UK-wide market mechanism to encourage the supply of low-carbon heat appliances by manufacturers.

The Scottish Government has also negotiated amendments to mitigate potential negative effects of the bill. The offshore wind provisions have been amended to greatly limit the scope for a marine recovery fund to be used to undermine Scottish ministers’ current functions in relation to compensatory measures, and more generally to reduce the negative impacts of those clauses on devolved functions.

Enhanced consultation requirements have been secured to require the UK Government to more fully engage with the Scottish Government on the energy savings opportunities scheme. Although not perfect, that is an improvement on the UK Government’s original intentions.

The bill has also been amended to include detailed consultation requirements for a number of clauses relating to carbon capture, utilisation and storage, and hydrogen, and the UK Government has committed to setting up a ministerial working group on CCUS, which will enable us to drive forward work that is vital to delivering our net zero ambitions. However, the UK Government has rejected amendments that would have improved the bill in relation to issues such as CCUS and hydrogen.

Although those changes are welcome, I must emphasise that the changes to the bill do not go nearly far enough. It is the clearly established position of the Scottish Government and the Scottish Parliament that, where provisions in a bill touch on devolved competence, legislation should include a requirement for the consent of Scottish ministers. The UK Government has refused to include those consent mechanisms for all but a very small number of clauses.

That is not how devolution is supposed to work. The UK Government should respect the views of this Parliament and promote amendments to reflect that. To make matters worse, the UK Government has made it clear that, unless we agree to recommend that legislative consent be given to the bill as a whole—including those areas in which we believe it is riding roughshod over devolution—it will revert to the bill as it was originally envisaged. The Scottish Government has made it clear that such a negotiation tactic is unacceptable. It is tantamount to blackmail and it is incompatible with good-faith negotiation on important topics.

The Sewel convention is supposed to require the UK Government to amend legislation to reflect the legitimate expectation that the UK Government will not legislate in devolved areas without the consent of the Scottish Parliament. However, the UK Government has now chosen to turn the convention on its head with that take-it-or-leave-it approach.

Instead of the need for legislative consent protecting the interests of this Parliament, the threat of proceeding without consent has become a weapon for the UK Government. That is yet another way in which the UK Government is failing to respect the Sewel convention, which it has now breached on 11 separate occasions.

The Scottish Government remains committed to the Sewel convention and continues to work within both its letter and spirit, despite the current UK Government’s repeated disregard for its requirements. We have written to the UK Government to detail our objections to its approach.

Securing amendments to the bill is vital to the delivery of our net zero ambitions at this crucial juncture, and our decision to recommend consent is made on that basis. Although I recommend that consent be given, I do so reluctantly, and it must be made clear that we are being asked to accept a diminution of this Parliament’s powers under the threat of having those powers further weakened if we do not—jeopardising investment in our renewable sector and undermining our efforts to reach net zero. That is not a partnership of equals; those are the actions of a bully, treating the Scottish Parliament—and, by extension, the Scottish people—with nothing but contempt. Our recommendation of consent on this occasion should in no way be taken as acceptance of the UK Government’s approach to negotiations on the bill.

The Scottish Government is determined to deliver a just energy transition that enables the people of Scotland to realise the benefits of our rich renewables endowment and achieve a net zero future.

I move,

That the Parliament agrees that all relevant provisions of the Energy Bill, introduced in the House of Lords on 6 July 2022 and subsequently amended, so far as these matters fall within the legislative competence of the Scottish Parliament or alter the executive competence of the Scottish Ministers, should be considered by the UK Parliament.

I call Douglas Lumsden to speak for up to six minutes.

17:06  

We are happy to support the legislative consent motion if not the tone in which the minister has presented it to the chamber this afternoon.

It is heartening to see a good level of co-operation between the Scottish and Westminster Governments, which is much needed but seldom found. This is an issue that the whole of the UK should be working together on, as it affects us all. Ensuring our energy supply and sustainability is key to us achieving our net zero targets, and exploring and legislating for new technologies is vital to our energy security.

We also thank the Net Zero, Energy and Transport Committee and the Delegated Powers and Law Reform Committee for the time that they have taken to consider the matter and their careful scrutiny of the lengthy and complicated bill. I was happy that the work was done by the net zero committee before I joined, because I can see how much was involved. With more than 300 clauses, there was a lot to get through and, clearly, there are many areas that require a UK-wide response that also includes powers that are delegated to the Scottish Government.

I welcome the consultation and, obviously, the detailed conversations that have happened between civil servants and ministers across both Governments. It is refreshing to see both of our Governments working together on this.

Many of the concerns that were raised by the net zero committee—and its report of 17 March—have now been addressed, which is reflected in the report that it published on 26 September.

I am also grateful to my fellow committee members and the clerks for bringing me up to speed so quickly on a complicated and detailed bill.

Throughout the clauses that are before us today, there is reference to the ministerial forum that will address many of the issues of contention in the bill. I ask the minister for clarity—if she has it—on the frequency of the meeting for the forum, the process for agreeing the agenda and how the minister proposes to update this chamber on those discussions. It might also be helpful to the minister if the relevant party spokespeople could meet her before and after the meetings to discuss progress. It is important that the process be as transparent as possible, given the implications for business and communities throughout Scotland and in the north-east, in particular.

It would also be helpful if the minister could share the details of the memorandum of understanding that is to be established between the Scottish and UK Governments on how they will work together on the policy relating to the economic regulation of CO₂ transport and storage. That will be a new market, and any information would be appreciated.

Those points are picked up in the Delegated Powers and Law Reform Committee’s recommendation that the Scottish Parliament must be given the means by which to scrutinise and hold

“ministers to account for their position in any agreement with the UK Government.”

Perhaps the minister would like to update us now or in her closing remarks.

The fact that a key area of the bill concerns the relatively new industry of carbon capture is really exciting for our Acorn project. I say “new”, but I think that certain parts of the world have been doing carbon capture for a while now. With its deep underground depleted oil and gas wells, Scotland is uniquely well placed to store huge amounts of carbon deep underground. The carbon capture industry is, we hope, one that can bring huge economic benefit for the whole of Scotland.

It is vital that we all see the benefits of the move away from fossil fuels and towards renewable energy. Businesses and communities in the north-east are eager to play their part—that is a topic that I spoke about just last week—and the measures in the bill will assist with that. They will ensure that we have clear and consistent policy from both Governments on carbon capture, hydrogen, the reduction of emissions from industry and transport, and the provision of low-carbon power.

I also welcome the bill’s focus on the offshore wind environmental improvement package, as well as the habitats assessment process for offshore wind projects. The bill as amended now also imposes on the Office of Gas and Electricity Markets the express mandate of supporting the achievement of net zero, which will be key to ensuring that everyone, at all levels of government and in associated bodies, is focused on that goal.

District heating systems, too, are covered in the bill. I am convinced that district heating networks will have a huge role to play as we move away from traditional gas boilers, especially in large parts of our urban areas, where older, traditional flats may not be suitable for air-source heat pumps.

Without wanting to be too negative, one area that still disappoints me is this devolved Government’s stance against new nuclear. Wind power is great, but we need to understand that, on cold, still days, the wind does not blow and our turbines do not turn. We need to have a good, reliable baseload and not rely on imported electricity for our base. We have some great skills in nuclear and we have some great sites that are connected to the grid. I urge the Scottish Government to keep an open mind. Technology is changing, as is decommissioning. New nuclear could provide a real economic benefit to Scotland.

That said, I support the LCM before us today.

17:12  

Labour will support the LCM at decision time. The Energy Bill that is currently progressing through the UK Parliament is the first piece of energy legislation of such scale to be considered since 2015, so it represents a huge opportunity to address all the key ambitions regarding the just transition and the shift to net zero. However, although commentators have described it as a “mammoth” bill, it still does not go far enough. There is much more that needs to be done.

We have just heard about where the Scottish National Party and the Conservative Party disagree, but what I will take from the debate is the fact that the Scottish Government has achieved some negotiating successes in relation to amendments to the bill. That is important.

It is important not only that the UK and Scottish Governments work together, but that our local authorities do so, too, because they are key players in delivering planning and the community heat and energy projects that we urgently need in our communities. It is important that we do not forget that.

Although the Energy Bill makes some progress, it will leave the UK falling behind in the global race for the jobs and industries of the future. The bill’s stated aims are to leverage private investment in clean technologies such as carbon capture and storage and hydrogen, and to reform the energy system so that it is fit for the future by, for example, facilitating the deployment of energy storage, appointing Ofgem as the regulator for heat networks and ensuring the safety, security and resilience of the UK’s energy system.

However, the bill could have done so much more. Although it deals with a lot of technical considerations, many of the measures that it proposes are actually quite piecemeal and timid, and they fall short of the action that is required.

I was pleased that some amendments that were tabled by my Labour colleagues in the House of Commons and the House of Lords were agreed to. I want to highlight two in particular. The amendment that removed the hydrogen levy from consumers’ bills will mean that although investment to increase use of hydrogen will still be put in place, it will not be done on the backs of consumers, who would have had to fork out huge amounts of money for high energy bills. I emphasise that it is important that we maintain a focus on the push for green hydrogen and that we support such developments across Scotland. It is a huge technological process that offers major opportunities to use our renewables—especially offshore renewables.

In addition, establishing a net zero duty for Ofgem ensures that net zero is at the heart of the regulator’s work, which is absolutely critical. There are a number of changes that need to be made, but net zero needs to hold them together.

Although the bill is a step forward, I believe that there is so much more that needs to be done in order to deliver the just transition that we urgently need. Labour supported amendments in the House of Lords that were subsequently removed from the final stage of the bill, such as on banning coal mines, which would be absolutely key to net zero.

The bill also fails to support energy efficiency standards for private sector housing in England, which would have saved tenants in England hundreds of pounds—one of the progressive policies that were cancelled in Rishi Sunak’s net zero speech. That is a huge disappointment, especially as we are discussing the bill during challenge poverty week.

Let us not kid ourselves: the bill is not perfect. We will vote for the motion at decision time, but our view is that the bill was a missed opportunity, as Renewables UK and other industry groups have commented.

If a Labour Government were to be elected in the near future, we would continue the co-operative approach of the UK and Scottish Governments working together, but we would be much bolder, because we need a sprint to achieve clean energy by 2030. We would establish “GB Energy”—a publicly owned energy generation company that would be headquartered in Scotland. We would invest in the skills that we need now in order to develop the jobs, supply chains and infrastructure to transition our energy supply. That need has come across from all the renewables industry representatives whom I have met, as well as all the companies that are involved in oil and gas that want to transition. It is critical and we need political support now. The Scottish Government needs to step up to the mark.

In addition, the development of community-owned energy projects is crucial. We are missing a huge opportunity right across the UK as well as in Scotland. That goes back to the point about having resources at the local level to get going on such projects.

Finally, Labour would establish a national wealth fund that would help to secure the private investment that would ensure that there is finance available now and in the future. That finance would support the aspirations of some of the provisions in the bill, as well as the aspirations that many of us have for a decarbonised clean power energy network in Scotland that would be affordable for households as well as businesses. That will not come from the bill. We need change, but we will support it because of the small steps forward that it will make.

17:17  

First, I will address some of Douglas Lumsden’s questions, and points that were raised by Sarah Boyack.

Douglas Lumsden asked about a memorandum of understanding, which is still to be negotiated, agreed to and established. He asked about the ministerial forum on CCUS—I called it the “working group”. My officials have had some initial meetings on that, but it has not yet been formalised.

I will also address Douglas Lumsden’s remark about the provisions for hydrogen production and transport. We wanted to have the consent of Scottish ministers in relation to clause 154, but that was not agreed to. That is unfortunate, because at the moment the language is about consultation of Scottish ministers. We will have to beef up the ministerial forum so that it is, in effect, consent by another name.

We have really worked together on the bill. There have been a lot of negotiations between UK Government ministers and Scottish Government ministers. I hope that that is the spirit in which we will continue.

Sarah Boyack mentioned amendments that the Labour Party put in place: we broadly welcomed most of those amendments. It was nice to hear her recognising some of the work that the Scottish Government has done in order to get some amendments over the line that will be good for Scotland and its people. On hydrogen—I hope that this is where she was going with the comments that she made about it—we need more agreement on hydrogen standards and labelling, particularly when we talk about exporting it. The people who want to buy the hydrogen that is produced in Scotland want green hydrogen. We need to get those standards agreed, so I am glad to hear that Labour supports us on that.

I will wind up, Presiding Officer. Notwithstanding the issues around the negotiating tactics, which is a wider issue—I understand why the Welsh Government has not given consent because of that—much that is in the bill is long overdue. The stated aims of the bill are to increase resilience and reliability of energy systems across the UK, to support delivery of the UK’s climate change commitments and to reform the UK’s energy system while minimising costs to consumers and protecting them from unfair pricing.

I agree with Sarah Boyack that the bill could have gone further. Perhaps certain things will go further in the future, but I hope that everyone agrees that despite the negotiations and some of the tactics around them, and despite the bill’s limitations, the bill is in Scotland’s best interests. I hope that everyone votes to agree to the consent motion.