Energy Security and Net Zero Committee — Oral Evidence (HC 396)
1/68Welcome to this afternoon’s session of the Energy Security and Net Zero Committee, in which we are scrutinising the work of the Department. We are delighted to have, for the second time in this Parliament, the Secretary of State, the right hon. Ed Miliband MP, and the permanent secretary, Jeremy Pocklington. Gentlemen, you are both very welcome. I shall start the questioning before handing over to my colleagues. You have had a very busy first year. Do you think you are close to delivering change, rather than still being in the planning phase?
Thank you, Chair. Can I start by putting on the record my thanks to you and your Committee for your excellent work? I have had the benefit of reading some of the transcripts of your evidence sessions, so I want to say thank you for the really interesting work you are doing. To answer your question directly, I am incredibly proud of the pace we have set as a Department and what we are already delivering. I think you see, across industry and stakeholders, a response that says they have noticed the acceleration in the pace of not just ambition but delivery. I will just mention a few things where I think we have made real progress: energy generation, lifting the onshore wind ban, the most successful renewables auction ever, the amount of solar consented in 12 months compared with the previous 14 years, the new future homes standard with solar as standard, and big reform of the grid and planning. On investment, there was the biggest investment in clean energy in our history as a country in the spending review. This includes the biggest investment in nuclear in half a century, investment in four CCUS clusters, hydrogen transport and storage, and meeting our manifesto commitments on the warm homes plan and Great British Energy. On tangible results this year, there are a few things I would point to. Nearly 3 million extra families will get the £150 warm home discount this winter. Two hundred schools and 200 hospitals are to see their energy bills cut by Great British Energy this year through solar panels, and we are beginning the process of helping 5 million families under the warm homes plan. Just to say something about priorities for the year ahead—to take the context of the latter part of your question—I would say four things. The first is driving forward at pace on the energy generation we need, to get off the rollercoaster of fossil fuels. The second is translating the benefits of the mission into lower bills for people and communities, including delivering the warm homes plan, which will help cut bills, and expanding solar to more communities and families. Thirdly—this is a piece of work that Jeremy and I have been engaged on—we now consider ourselves an industrial policy Department, not just an energy policy Department, so we will be delivering on the promise of good jobs across the country, which the investments I have talked about will make possible, and making sure these are good jobs, with decent wages and strong trade unions. Fourthly, internationally, we will be working with other countries to keep momentum driving forward on the road to COP30 and beyond. So there is a lot done, but a lot to do—a slogan I used in an earlier stage of my life.
Thank you very much. You have outlined a pretty good agenda for the next hour and a half, and my colleagues and I will be asking you more detailed questions on most of those points in the time we have. We are going to ask you more about workforce planning later, but how important are the trade unions both to informing workers about the benefits of the energy transition and in delivering the transition?
Very important, and I think this is a big change from the past. We inherited a situation where trade unions were just seen as special interests, basically, and pretty marginalised special interests. I do want to say this quite clearly: I think the renewables industry still has some way to go in recognising the value and role of trade unions. This industry was born at a time when trade unions were quite far from being flavour of the month, and somehow it has been the view of some in the renewables industry that they don’t need to bother with trade unions. Obviously, companies have to make their own decisions, but I am very, very encouraging of the role of trade unions. In relation to the supply chains, you have recently seen an agreement between SeAH Wind and the GMB union, a recognition agreement, which is really important. This is just in the last few weeks. We have also seen Great British Energy – Nuclear reach agreement with the Prospect trade union. We want to see more of this happen. Why? Because I believe that trade unions have a crucial role to play in our society. Because I think they can actually make businesses work better, not worse. I don’t take the old-fashioned view that somehow trade unions are a recipe for conflict. They can be a recipe for co-operation and success, and workers deserve to be properly represented. So this is a really big emphasis and one that I have tried to show leadership on in the last year. EDF Renewables has also reached agreements with the trade unions in the last year.
Would you apply the same approach to the energy retail market?
I would encourage all companies involved in the energy sector to take seriously the role that trade unions can play in their companies.
When you gave your statement about energy market reform, I asked you about demand flexibility, and you talked about some of the tangible opportunities through electrification of heat for consumers, and so on. But do you also see potentially a growing opportunity for consumers to take advantage of different tariffs, and for the market to produce different tariffs, to help people to bring down their bills? How do you see clarity being provided so that people understand them in order to take full advantage?
I think that is a really good question, Chair. Let me say a couple of things. First, I think the combination of heat pumps, potentially solar panels and potentially batteries offers a way to give people real control over when they use electricity. After all, the wider promise here is to get off the insecurity of fossil fuels and on to home-grown clean electricity. That is the first point. Secondly, we are moving in the direction, over the next couple of years, of minimum half-hourly settlements, which is a technical thing but basically means the much clearer option of reduced tariffs at different times of the day. This is obviously entirely voluntary, but I think it does offer the opportunity for people to manage their usage in a way that they can take advantage of. I use the phrase “consumer-led flexibility”, because I think it is very, very important that it is voluntary and consumer led, although what is so interesting is that when this was tried first a couple of years ago—in the winter, I think, of ’22—there was actually much bigger take-up than was expected. So, I think it is where consumers want to go, and it is something we want to enable as much as possible.
This is something where we are working very closely with Ofgem and NESO, and we have put together a low-carbon flexibility road map in order to bring forward the consumer-led flexibility that the Secretary of State just outlined. Market-wide half-hourly settlement and smart meters are the key enabling tools that underpin that. But we have seen strong interest from the sector, and innovation as well. That all supports that journey.
Thank you for the additional information. I declare an interest as a recent owner of a heat pump, which is functioning very well.
Are you enjoying it?
I am. Hotter water than I had with a gas boiler. I benefited from the change in the planning regulations. On the—
On the one-metre rule. I am glad we have been of service to you, Chair.
Thank you—a personal counselling, or advice session from the Department. However, I hear from some of the retailers that, still, 35% of heat pump installations require planning consent due to noise, and that anything above 35 dB, which is similar to using a computer and a lot less than the noise from a fridge, requires planning consent. Heat pumps therefore require it if they are too close to their neighbours. Do you think that further adjustments are needed?
Let me answer that directly. What we have done is changed the permitted development right on the one-metre rule, as you said. That was talked about for a long time, but nothing was ever done. I think it has made a difference. Some retailers, I think, have said to you that the noise issue remains a big barrier. You have drawn that to our attention, and we are going to look at that, as to whether it is about the rules, the way they are being enforced or the knowledge of the rules. Often, I find on planning issues that sometimes it is the rules, sometimes it is the enforcement of the rules and sometimes it is the awareness of the rules. We have to work out which it is. I think my overall approach is to say, “Look, where there are barriers, let’s get rid of them if we possibly can.” If the noise thing is a barrier—obviously subject to ensuring no disturbance to people, which I do not think there will be—we should act on it.
Thank you for those answers. In the Sunday media round, we heard the leader of Reform, Nigel Farage, saying something that is often repeated, which is, “What is the point of us transitioning to net zero when we are responsible for such a tiny fraction of the world’s emissions?” In our inquiry, “Building support for the energy transition”, we heard evidence for the economic and national security benefits. What is the answer to what Mr Farage said yesterday, which in my experience a lot of people say?
We are taking action on the clean energy transition because it is the right thing to do for the country today, and it is the right thing for future generations. It is really important to say that. Nigel Farage wants to airbrush history. He wants people to forget about the fact that it was our exposure to fossil fuels that led to the worst cost of living crisis in generations: family finances wrecked, business finances wrecked and still paying the price—perhaps we will come on to that—and public finances wrecked as well. There is only one answer to that, which is home-grown clean energy that we control. The security we get from that home-grown clean energy is now essential for our energy security and our national security. Anything else, any decision to say, “Let’s just remain on fossil fuels”, subject to a global market controlled by petrostates and dictators, frankly surrenders our energy security and indeed our national security. Reform can make those arguments, but they fly in the face of the British people’s experience of what has happened to them and what they still face. Plus, as well as energy security, it is the right thing to do for jobs. If we go to what is happening at Sizewell, carbon capture and storage in four different parts of the country, or indeed offshore wind or what we hope to do with hydrogen, it is the jobs opportunity of the 21st century, and we should seize it. It is also the right thing for future generations. As I said in my climate nature statement a week ago, we should be proud of what Britain has done under Governments of both the Conservative and Labour parties in taking a lead and others following.
You are carrying out a public participation survey, or you are about to. Do you think that that will be sufficient to ensure that people have all the facts and are able to see for themselves the benefits that you have just set out? In an allied point, who are the best people to carry those messages? Who is most trusted in this space?
I think your inquiry is really important, and I will look forward to seeing the results of it. We have to make the case, and all of us who believe it have to make the case. Workers who are benefiting from clean energy, scientists who can tell us why we need to act, businesses that are operating in this area and ourselves as politicians—if we believe in this—should make the argument. It is interesting; two Reform mayors, Andrea Jenkyns and Luke Campbell, have been elected. They have just taken funding from my Department for clean power in their areas, and I am really pleased that they are taking that funding. But the lesson of this is that those mayors, faced with the choice of cutting bills through clean power or keeping their areas locked on expensive, insecure fossil fuels, chose the clean power course. That proves that, frankly, Reform’s energy policy disintegrates upon contact with reality and with what the British people want to see.
I know that you are going to publish the warm homes plan in the autumn; thank you very much for the response to our “Retrofitting homes for net zero” report, in which you made it very clear that that was what you were going to do—that was broadly the answer that you gave to our recommendations. Your offer is to cut energy bills for consumers by hundreds of pounds. How will you ensure that people recognise that this is the result of Government action?
The most important thing is that it happens. It is worth pausing on that for a moment. Against a very tight fiscal backdrop, the Chancellor chose to invest £13.2 billion over the Parliament in the warm homes plan, in line with our manifesto commitment. That is incredibly important. It is part of contributing to us upgrading 5 million homes over this Parliament. This is about social justice. Our warm homes obligation is about delivering, in particular to the poorest families—we will talk more about this in the autumn—a combination of energy efficiency, heat pump technology, batteries and solar panels that can cut people’s bills for good. This is something that the Prime Minister often talks about—not a sticking plaster, but actually cutting bills for good. We will shout about this and make it clear that this is something that this Labour Government are doing and choosing to do.
Thank you very much.
Richard Tice, the Member of Parliament for Boston and Skegness, wrote some letters to energy companies last week saying that a future Reform Government would cancel contracts for renewable energy. What do you think about that?
It was, if I am allowed to use this phrase, a clown car operation, I think it is fair to say. Richard Tice wrote a letter saying he was going to rip up the contracts, and then went on the “PM” programme that afternoon to rebut his own letter—to say that he had been highly misinterpreted and that he was not going to tear up the contracts. The broader point is that this is driven not by concern for the British people or interest in people’s energy bills. It is ideology. As I think Theresa May put it a few months back, the people pushing this anti-clean energy agenda are the real ideologues. Why would you want to stay on expensive, insecure fossil fuels? We need only to look at the geopolitical situation to see our level of insecurity and exposure. Why would you want to stay on those when you can have cheap clean power that we control?
I think one of the issues is that he suggests that we may lose jobs in different industries as a result of this, and that, with the current energy market, there is not an absolute conviction or clarity about the pathway to making sure that this does result in cheaper energy for everybody, particularly businesses.
It is interesting that you should ask that question, Polly, because the industrial energy prices thing is a very serious situation. I read with interest some of the testimony your Committee had as part of your cost of energy inquiry. It is important to understand why this happened. I have a chart here: when the crisis hit—when Russia invaded Ukraine—industrial energy prices basically doubled. The gas price has not got back to the level it was at in the past, so bills remain high. I was particularly struck by some testimony from director of the Energy Intensive Users Group, who said to your Committee, “With the energy crisis that hit after Russia invaded Ukraine, it is the wholesale electricity price that has been the dominant factor in driving electricity prices.” In other words, there are people who want to use their opposition to clean energy and climate action to say, “This is all the fault of that,” but they are just wrong. That is what the energy intensive industries are saying. I do not want to underestimate some of the seriousness of the situation, but, first, we have to work out the reasons why industrial energy prices are high. Secondly, the irresponsible thing about what Richard Tice is doing with that letter is that he is almost deliberately putting at risk tens of thousands of jobs across our country. The net zero economy grew three times faster than the economy as a whole last year. He is sending a message to businesses and others, “Don’t come and invest in Britain.” We are sending the message, “Come and invest in Britain,” and, to the tune of about £50 billion, they have been investing since the election—and are making commitments to invest—in Britain. That is about good jobs for people up and down the country, including in your constituency, Polly, and indeed Richard Tice’s constituency.
Could I ask one follow-up on that? I appreciate that there are about a million jobs involved in this industry overall, but there are jobs that will need to change or disappear. As you said, you are an industrial policy Department as well as an energy policy Department. As Secretary of State, how do you see your role in making sure that that that transition away from dirty fossil fuels does not mean the kind of absolute trashing of communities that we saw—in our lifetime—40 years ago?
We should be judged on the justness of this transition; we are absolutely determined to have a just transition. Let’s take the North sea; 70,000 jobs have been lost in the North sea in less than a decade, because it is a declining basin. The truth is that unless you build the future in carbon capture and storage, offshore wind, hydrogen and a whole range of other areas—and make sure that when we build that offshore wind, it is built in Britain as well as elsewhere—then we will not replace the jobs that are declining. I absolutely accept that we should be judged on the justness of this transition, but to make this transition just, you have to have put in place the levers to make it so. That is what the National Wealth Fund, Great British Energy, and our clean industry bonus as part of auction round 7 are absolutely designed to do—which in a way goes back to the opening question from the Chair. One of the things Jeremy and I spend a lot of time talking about is, “How do we make sure that we are the industrial policy Department that is delivering those jobs for the future?”
In the context of that, does the clean energy target of 2030 militate against the development of the supply chains that we will need in the long term, because we are going faster rather than fairer?
It is quite the opposite, if you think of the building of network infrastructure, which is creating tens of thousands of jobs, and the signal we are sending to investors. I meet investors all the time from all around the world. I am not trying to blow our own trumpet here, but so many of them say to me, “You are a Government with a stable majority, and you are a Government which has a clear plan. You know what you are doing, and you are minimising uncertainty.” We will perhaps come on to zonal pricing and all that. They say, “You are creating the stable environment in which we can invest.” Frankly, given all the pressures around the world and some of the doubts that some people are expressing on this agenda, for businesses, having somewhere to invest that they can rely on—they say this to me explicitly—is so important.
I will follow up briefly on some of what you just said. Lindsey oil refinery was in the news recently, when it went into administration. Anecdotally—or perhaps more than anecdotally—the workers there are saying, “We see all these renewables being developed and we see our jobs being lost. We can only conclude that our jobs are going because of net zero.” What is the way to address that? It sort of goes to the previous discussion.
Let me come to the specific and the general. On the specific, let us be absolutely clear about what has happened at that refinery: the workers have been deeply let down by the people who ran the refinery. I am deeply disturbed by some of what I have seen and heard, and by some of my experiences in dealing with the people running the refinery during the run-up to the announcement. That is why I have written to the Insolvency Service to ask them to look into some of the conduct that we saw. This has been a loss-making refinery over the years it has been controlled by that particular company. I have deep sympathy with the workers and the community. My colleague Michael Shanks went to see the workers last week to talk to them about the situation. Obviously the official receiver will have to make announcements about the future of the refinery. More broadly, on the refinery sector, this is a sector that Michael and I are really engaged in. Michael had a meeting last month, and I had one earlier this month, with the umbrella body that covers the refinery sector. I would just say in passing that they said that was the first meeting they had had with Ministers in 13 years. They had reached out to previous Ministers and had not had any meetings. We are looking at some of the specific circumstances facing the refinery sector, including the so-called EII—energy-intensive industries—compensation scheme, which the refinery sector does not qualify for. It is worth saying that there are refineries that are doing well, such as the Phillips 66 refinery, which is near Prax. Investing in CCS can help the refinery sector. SAF can help the refinery sector. Part of the challenge here is that we cannot as a Government stop the process of industrial change, but we must make that process work for workers and communities, and that is what we are committed to doing.
I would add to Phillips 66 the Essar refinery, which is near my constituency—we could make a similar case. You talked before about the high cost of energy in relation to the business costs in particular, but it is true for domestic and industrial users. Why are our transmission costs as well as our generation costs so much higher than in France and Germany?
The fundamental problem we have here is our exposure to fossil fuels. I think it came through in your cost of energy inquiry, particularly on the industrial side. I think it came through, in what I said, from the Energy Intensive Users Group. The whole point of Clean Power 2030 is to get us off reliance on gas. We have seen it in the time that this Government has been in power. The wholesale gas price goes up and it feeds through to bills. The price goes down and thankfully it feeds through into a reduction in bills, but it is not in our control. If we want to take back control, we need home-grown clean energy. Every solar panel and wind turbine we put up and every nuclear power station that we can build gives us that greater control. Now, specifically if you are talking about industrial users, I am really pleased with what we were able to do in the industrial strategy. The previous Government took action through the supercharger to help around 500 businesses. We are now helping 7,000 energy-intensive industries through the BIC scheme. This has been widely welcomed by Make UK, the British Chambers of Commerce and others. I recognise in your inquiry the issue of those businesses not necessarily being helped by these measures. The best answer is to drive towards Clean Power 2030 because it gets us off this reliance on gas. The key thing about driving to renewables is that it lowers the wholesale price. These are the fundamentals. How is it that clean power is about bringing down bills for good? Because it lowers the wholesale price and gets us off the link to gas.
So the Clean Power 2030 agenda will move us on to CfDs, setting the prices, essentially. Is it right that the Government effectively sets the price?
Well, it is through an auction. We set an administrative strike price, but that is a ceiling, and then it is through an auction process. One of the things that I take incredibly seriously—I took it seriously with AR6, but I inherited it mid-flight, if you like, and I am taking it very seriously for AR7—is how we both maximise deployment and do it in a value-for-money way. Our big focus—we have announced some of the changes on this, including lengthening CfDs and on who we let into the competition—is to make sure we maximise the deal that we get for the bill payer through this process.
Very quickly—I will come to my set of questions—I want to raise what our leader, Ed Davey, pointed out last week. I totally agree with what you are saying about the need to get away from our reliance on fossil fuels, and therefore the Government’s strategy is to have more renewables. I absolute agree with that, but in the meantime our electricity costs are still too dependent on gas prices because the wholesale gas price is linked to the electricity price. There is a proposal on the table for how to change that and get away from ROCs and on to CfDs. I hope the Department is looking very closely at that proposal, because that is one of the reasons why our energy prices are so high. I know, Chair, that you want me to ask a completely different set of questions—
It is up to you to ask the questions that you want to ask.
Secretary of State, I hope you will look at the proposals from our leader, Ed Davey, about—
Can I just cut in? The modellers have been hard at work—we love the modellers, particularly in our Department—so I have some useful figures for the Committee. In 2024, gas power plants set the price of electricity two thirds of the time. Our modelling suggests that, in 2030, they will set the price only one third of the time. Even more importantly, in 2024 about one fifth of generation was shielded from the wholesale price through CfDs, feed-in tariffs and nuclear, and in 2030 that will cover two thirds of generation. So what you are seeing is a big switch in how much of the time gas sets the price, and the extent to which any benefits of cheaper power are fed through to consumers. Obviously, I am familiar with the issue that you talked about, and we will look at any proposals on that.
Thank you. I am sure we can co-operate on this. I want to ask about this Committee. We obviously see the value of this Committee—we spend a lot of our time on it, and it is interesting—but we obviously want to be of value to the whole system. Secretary of State, what is the value of the Committee to you and your Department?
That sounds too softball a question—there must be a “but” coming. I see the Committee as very valuable, and I am not saying that to butter you up. As I say, my enjoyable Sunday reading was the testimony that you had had, which was very useful.
And here comes the slightly harder question.
Yeah, I knew it was coming.
The Department’s letters to the Committee are often simply a rehash of written ministerial statements. Given that we are a more informed audience, could you consider providing a bit more detail or analysis in these letters?
Okay, so one nerd level down, if you like. I consider that to be a compliment, by the way. That is absolutely fine. If the Committee’s request is that when we do written ministerial statements, we provide extra detail to you, I am sure we can meet that.
Is it also a possibility to give the Committee more information ahead of the media?
I am very happy to look at how we do this. We are obviously careful about making sure we do written ministerial statements in Parliament—and, indeed, oral statements. I am happy to take this offline with the Committee. The Chair, the Clerk and I had a conversation last week about how we can furnish the Committee as well as we can with the information it needs.
I just want to pick up on Polly and Wera’s questions. Secretary of State, you have often said that energy security is national security. Do you still believe that?
I really do, Mike. You only need to look at some of the instability we have seen in our world, in relation to Iran, for example, in recent months, and to see the extent to which oil and gas prices responded to that, to see how vulnerable we are as a country through our reliance on fossil fuels. Whether that is the North sea, which continues to play an important role in terms of oil and gas, or imported oil and gas, the price is the same. Therefore, if we are going to have energy security, clean home-grown power seems to me to be absolutely the key answer.
I like the fact that you have a very collegiate style in the Chamber and in the media, but in response to Polly’s question, we have a Member of this House who is essentially risking national security by trying to undermine the energy sector and investment. Do you think your response has been tough enough?
Happy to be tougher. I think what Richard Tice is doing is deeply irresponsible, and I think, frankly, it is playing politics with people’s jobs and people’s bills. For all of the workers who rely on working in clean energy, to the nuclear workers at Hinkley Point and the future nuclear workers at Sizewell, for those working on carbon capture and storage, those working on offshore wind, and those working right across this sector—as I said earlier, the net zero sector grew three times faster than the economy as a whole, and goodness knows we need these jobs and we need this growth—it is deeply, deeply irresponsible. As I said, when it has come into contact with reality, you even have Reform mayors now saying, “Well, we’re distancing ourselves from this, essentially.” It is not where the British people are. I do not think the British people do want a culture war on this. I actually think people want the benefits of clean energy. They think it is the right thing for the country. We have got to do it, and we are determined to do it in a way that makes the pressures on people’s living standards easier, not harder, but, honestly, I think it is deeply, deeply irresponsible. I actually do not think it will work, either.
Your role and your Department’s role is to provide certainty to the market. We heard repeatedly about the delays in announcing your position on REMA; they even led the Committee to write a letter to you. What have you learned from that process? Clearly we heard from businesses that they were not going to invest in contracts for difference because of the uncertainty, and it has slowed down investment in the sector. What have you learned from that process, and how can we make sure we get decisions quicker from the Department?
The thing I would say to you is that REMA was an incredibly complicated process and an incredibly complicated piece of work, and it was really important we got it right. We said at the end of last year that we would announce a REMA decision in time for the opening of the AR7 auction, which is at the beginning of August. We have done that. We have fulfilled the commitment. I think it has been widely welcomed by the industry where, frankly, uncertainty was the enemy of investment. We are absolutely committed to timely decision making and correct decision making, and sometimes you need to make sure you are willing to kick the tyres, particularly on something like this kind of reform.
I guess there is a challenge that when you go quickly, you can get misalignment of Government processes and decisions. Jeremy, in our report “Gridlock or growth?”, we were quite critical of the work of the Department and the lack of engagement and transparency with the Committee as we tried to deliver our inquiry. What has the Department learned from that, and can we see better working with our Committee, particularly when you are working at pace?
As the Secretary of State said, we are very happy to work with you to find the best way possible to work collaboratively with you. It is obviously a very important part of holding the Department to account. I feel that as permanent secretary, and it is also part of consultation and getting better-quality policy outcomes as a result.
Do you recognise that, as we picked up on in “Gridlock or growth?”, there is definitely misalignment between this Committee and the Department, and can you assure us that we will not see that in the future?
Our job is to do everything we can to serve the Government of the day, but that includes taking into account the views of this Committee very carefully. That is the commitment that I will give: we will consider all recommendations with absolute clarity.
I think in a way, Mike, you have partly answered your own question. If I can put it this way, we are dealing with the dilemma of doing things at pace, but in a collaborative way. If you think about the partial list of the things we have done over the last year that I gave at the beginning, it has involved acting at speed—move fast and build things, as I say. If sometimes the Committee has not been consulted as perhaps it might have wanted to be, that is the explanation. I am sure we can always find ways of improving, but this is one of the challenges of moving at pace. If I am honest, I think Government finds it hard to move at pace in general. In a sense, we have been trying to move things along because we recognise the urgency in a whole number of respects.
On the theme of certainty, during the election there was a very clear pledge from the Labour party of £300 off people’s energy bills. There has been a lot of criticism of the Department and the Government for dropping that direct commitment, and you will probably tell me that you have not. Is that still a firm commitment from this Government?
We said that we would cut people’s bills by up to £300, and that remains a commitment. It was based on independent modelling. The key thing is that we need to move to a system that can cut bills for good. The way to do that is with the lower wholesale prices that renewable energy will bring.
My question follows on nicely. The Government have committed to make electricity cheaper, and you have clearly set out through your clean power plan that the main driver of that will be reducing the dependence on volatile fossil fuels. Do you worry that if the Government are unable to deliver some of that benefit within this Parliament, to quite a wide span of consumers, Richard Tice might effectively persuade people that the drive for clean power is somehow to blame?
Here’s the interesting thing, Luke—I want to expand a little bit on my thinking here. We have got the top-down commitment of up to £300 by 2030, but we do not need to wait until 2030 to start delivering benefits to people. Let me give you some examples. The warm home discount is giving 3 million extra families—or 2.7 million extra families—£150 off their bills this winter. That is not in 2030, but this winter. By 2030, 5 million people will get lower bills as a result of the warm homes plan—partly thanks to the investment through the warm homes plan and partly thanks to the regulation and energy efficiency standards for the private rented sector, the social rented sector and so on. That is just the beginning. One particular interest that I have at the moment is that something like 1.7 million families in the UK—I would have to check the figure—currently have solar panels on their rooftops. We are just in the foothills of what we can do. We announced that solar panels will be fitted as standard for new homes. That is a few hundred pounds off people’s bills just on its own. We are going to deliver in two ways. We are going to deliver by 2030, and I am absolutely determined that we deliver in the meantime and convert the clean power benefit to people. I will give you another example that is not about consumers: we are cutting the energy bills of 200 schools and 200 hospitals, and we want to make that scheme bigger. Ever since that scheme launched, I have had lots of people saying, “What about sports clubs? What about miners’ welfare clubs? What about this? What about that?” I am really in the market for this. What is interesting about the Reform mayors is that they themselves say of solar panels on swimming pools, leisure centres and so on, “Why would we be against this? This is just going to cut people’s bills.” Why not reuse the free resource that we have to cut people’s bills?
Are you looking at other measures that might reduce bills in the near term—ideas like rebalancing levies or the reform of the standing charge?
On the standing charge, Ofgem is thinking about how to do it. Let me deal with it in two different ways, because I think there are two different ideas in the question. One is about whether there are reforms we can make to things like the standing charge, and Ofgem is looking at that. We do want to bear down on the cost of the standing charge. One has to confront the fact that if you take money from one place, you have to find it from somewhere else. It is about where you find it. Relatedly, I think your question is maybe about the issue of electricity versus gas, which I know has been an issue for the Committee. It is a long-standing ask of various people, including the CCC, that we find a way to reduce the cost of electricity. We are obviously looking at that. It is really important that if you move forward with something like that, you do so in a way that is fair. The obvious problem with a straight rebalancing is that you are taking the 100% of people who pay for electricity and loading the levies on to the 80% of people who pay gas, so you are essentially increasing the price for 80% of households. I want to do any measure that we take in a way that is fair, not just to the people who are getting the heat pumps or electricity but fair to everybody.
You alluded earlier to thinking about who might pay. There are two proposals out there around gas plants: bringing them into public ownership or regulating them through the RAB model, with the idea being that ahead of reform, and in delivering the change by 2030, the Government would have more control of how the price is set. Are the Government assessing that? Do you think it is right to say that the legacy gas power plants can effectively hold the Government hostage in setting the price?
We have got the capacity market in place for gas plants. I do not think we are about to go into public ownership of the gas plants—that is not on my agenda; I have seen the report you talked about—but obviously we continue to look at how we can get best value for money from the capacity market. It is interesting that in the clean power plans you see that gas is going to play quite a different role, because it will essentially function as a back-up in the electricity system. We are looking at the role of the capacity market in that context.
It will be really clear whether the Government have met their clean power target by 2030. The Government started the Parliament with some of the highest consumer energy prices, and the highest industrial prices, in the developed world. What measure of success will you use at the end of this Parliament to determine whether the Government have been successful in bringing down bills both for consumers and for industrial users?
We want to do everything that we can to get bills down. There is a truth here, which is that lots of what is happening is to do with the gas market, but we are determined to bring bills down.
You have understandably made the point a number of times that your commitment is to reduce the reliance on gas, as a long-term policy to bring bills down. A few minutes ago, you referred to taking the money from one place to move it to another. A lot of money is being made in one part of energy—in generation, largely. Is there an argument, and the potential, for using some of the money made there to reduce bills?
We obviously have a windfall tax in place, which has been playing an important role in raising revenue. There is a wider question that I think you are making reference to, which is about the balance between levies and public expenditure. You always have to be careful what you say, given that the Treasury is always watching, and we obviously face a very difficult fiscal backdrop, but obviously Governments always continue to look at the question of the balance between the role of levies and the role of public spending.
I guessed I would get that sort of answer, to be honest.
I am sorry to disappoint you—or pleased to meet your expectations.
Another little softball is coming your way.
Oh, gosh.
In January you refused to publish the minutes of the clean energy mission board, saying that it was not practice for Government committees to do so. Might you commit to publishing the membership of the mission board, like Cabinet Committees do?
This is the kind of difficult question you refer to the permanent secretary. Let me give some context. A bit like with Cabinet-level Committees, we do not tend to share the details of mission boards publicly. I will talk broadly, because it is important, and we have not really talked about the mission-led nature of this. As far as I am concerned, from our Department’s point of view, mission-led Government is working. It is important to say this. We have got Chris Stark running mission control in our Department. The level of co-operation there has been with MHCLG, MOD, the Treasury, DBT and other Government Departments has been really important to us. I particularly raise MHCLG, because on so many different planning issues—we have talked about the one-metre rule and the future homes standard—those are essentially MHCLG-owned policy. With MOD, there have been long-standing issues in radar, and we have already had great co-operation from the Defence Secretary and the people in the MOD on that, which has been such a bugbear for such a long time. If you think about DEFRA, my colleague Steve Reed is crucial to moving forward on lots of the issues that have blighted offshore wind and other things. As far as I am concerned, mission-led Government, including through the mission boards, is working.
You are pointing to the fact that mission-led Government is about getting out of the silo in Government. What is the biggest disconnect in Government? You have mentioned the MOD, MHCLG—
We are all frightfully connected. Patrick Vallance always said to me that the covid taskforce had a great thing on its side, which was that it was a Prime Minister-led response to a national emergency. He always said to me that this needs to have the authority of the Prime Minister, which the mission does—both limbs of the mission: Clean Power 2030 and accelerating to net zero—and that has made a real difference. I do not want to put Jeremy in a difficult position or suggest he makes invidious comparisons, but I genuinely feel that there has been a real responsiveness across Government.
I have been in the civil service a long time, and I would say that the mission approach is the most effective that I have seen for driving collaboration and joint working between Departments. That has been very visible over the past year, in respect of both pillars of the missions—clean power and accelerating to net zero—whether in working with MHCLG on planning reform and the Planning and Infrastructure Bill that is currently going through Parliament, or with DEFRA on environmental mitigations, and protecting the environment but getting the development and generation that we need. It includes work on very challenging subjects, like MOD and radar, where we have got to both deliver our national security objectives and get the wind power we need. It has provided that clarity of direction. It often means that when you are actually engaging at different levels—not just with the Secretary of State, but with the mission board, Ministers and officials—there is a degree to which teams and officials can self-action. They know this is a priority and something that will matter not just to the Department but to the Prime Minister and Government. That has helped to make progress. It is not always easy, and there is much more that we need to do, but I have been very struck by the engagement from all Departments in Government.
Since we need more good news stories, is there anything—even if the detail cannot be published—that would allow the public to share a little bit in some of the success stories?
I would say one thing—I hope I am not going to get into trouble for saying this—which is that we had an excellent discussion across Government about the whole EVs question. What you have seen, both on the 2030 mandate and on the recent announcement on demand support, has been a product of discussions across Government. In particular, DFT—led by my colleague Heidi Alexander—DBT and ourselves have been working together to say, “How do we meet the industrial imperative to protect our car manufacturers? How do we meet the consumer imperative to make this work for consumers? And how do we also meet the clean energy net zero imperative?” In a sense, collaboration sounds like it should be a sort of automatic thing but, inevitably, there can be particular departmental interests that overlap but do not always completely coincide, and I think the mission process has given us a focus. Another good example is DEFRA and the work that is going on to make sure we have reforms in the planning system that are nature-positive but also allow us to build our clean energy infrastructure.
Maybe after this session you could get the comms guys on your mission board on the case to package that up for the public—we all hear the public crying out for some good news stories—and also to address the Richard Tices of this world.
Is that a yes to the suggestion?
Yes.
Thank you. We look forward to seeing it, Secretary of State.
It is right to say that the Government are in a battle with some people who want to upend this mission. It is really important to say that the public get this in a way that Richard Tice and Nigel Farage definitely do not. The public do want to see action on clean energy. Whether it is solar panels or the good jobs we are creating, they absolutely recognise this. Part of it is about having confidence that we have the right arguments to help to make people’s lives easier today and do the right thing for future generations.
You have said that a number of times now, and polling evidence says that a significant majority agree with what you just said, but then when they believe it is going to cost them more money, their attitude changes. Do you accept that that is the reality?
The point is that we have got to make this transition work in a way that is good for people’s standard of living. Take what we announced on EV charging and EV support: it is about saying, “We’re going to have to make this transition. It’s the right thing to do. It can be good for our manufacturers, because they can get ahead in producing the vehicles of the future, and we want to do this in a way that works for consumers.” Take heat pumps: we talked earlier about the question of levies and rebalancing and so on. Why are people raising this issue? Because at the moment the system is artificially stacked against heat pumps, even though they are more efficient. We have to find a way of making people better off from moving to them. For me, it is all about saying, “How do we do this and do it in a way that makes people better off?” When the school gets solar panels on its roof, it is better for the school: they cut their energy bills and that means money for the frontline teachers. This absolutely an argument that we can win, and that is what we intend to do.
Thank you very much.
I want to ask about a couple of clean energy technologies that do not get as much attention. Do you think there is a risk that tunnel vision in the Department will lead to us missing out on becoming world leaders in some of the other clean technologies?
I do not think I would characterise it quite in the way that you suggest, but I acknowledge that we have got to make sure that path dependency—to use a really wonkish phrase—does not rule out or undervalue technologies that could be helpful in the future. Again, that is something that Jeremy and I discuss and are conscious of. At the same time, if we are going to support technologies, we have to do so in a way that is genuinely value for money. Sometimes, one of the hard things to judge is when a technology might be really expensive now, and the people who advocate for it say, “Yes, but offshore wind was incredibly expensive at one point. You supported it and it came down in price.” Working out where that is or is not going to happen is one of the issues. In the Department I recently set up STAC—which stands for the science and technology advisory council—under Paul Monks, our chief scientific adviser. I thought we needed a group of outside experts and scientists who can come in, look at issues like newer technologies and say, “You are undervaluing this,” or, “You’re valuing this correctly,” and so on. I am very conscious of that.
Geothermal is one of those technologies. To what extent do you think it will be part of the energy mix by 2030 and 2050?
In auction round 5, we awarded some CfDs in Cornwall for geothermal. I know that the current UK geothermal potential is estimated to be between 170 MW and 2 GW, and I can tell you that one of the issues that I have asked our Science and Technology Advisory Council to look at is the potential role of technologies like geothermal. Obviously, it is part of the auction round; at the moment, it is relatively expensive, but I know that there are strong advocates for it, and it is something that we need to look at.
Do you agree that we need to think about heat as a resource to reduce demand on electricity supply? If so, will you commit to consulting on and implementing a national geothermal strategy?
To the first part of your question, yes. However, on the second part, I think that we need to look in detail at this and work out the barriers and the potential. I will undertake to come back to you.
When looking at that, you might also want to think about the fact that it is also a potential domestic source of materials such as lithium. Turning to marine energy, do the Government plan to set specific targets for marine energy to incentivise investment in these renewables?
I think there are various ways in which marine energy can play a role. It is less about setting a particular target but more about seeing the different ways, through the auction rounds, that we can support marine energy. Michael Shanks launched the industry-led marine energy taskforce on 16 June to consider the role of marine energy deployment, and we will look forward to the strategic road map that the taskforce produces.
We heard from the Severn Estuary Commission about its report on tidal power and tidal range energy from the Severn. Following that inquiry session, we sent a letter and got quite a disappointingly non-committal and vague response. Could you clarify today the Government’s position on the Severn Estuary Commission’s proposals?
I think it is fair to say there is a long history here.
Over 100 years.
Indeed. Jeremy may want to add something, because I think he might have some previous experience on this. My position is that no technology should be ruled out. If it can be done in a value-for-money way, we should do it. For me, it is all about value for money. If it is value for money for the billpayer and taxpayer, and it is part of the low carbon mix, we definitely should not be ruling out. Whether that is nuclear or tidal, we should be open to it. That value-for-money test is the most important thing for me.
I completely agree with that. The judgment that we are trying to make is this: do we think that some deployment and support for deployment will bring that technology down the cost curve in a way that makes it competitive, taking into account the specific characteristics of that technology and the potential diversification advantages that it can bring to the wider system? That is a hard judgment to make, but that is the thought process that we have under way in the Department. Although we remain open to all the technologies, including those technologies that you have highlighted, sometimes in the past we have found that support has not led to the cost coming down or, for instance, some of the tidal range projects we have seen in the past have ended up with potentially very expensive strike prices on a broadly comparable basis. This is not a straightforward or an easy subject, even though we recognise that these technologies are attractive and could potentially play a role.
Part of the joy and challenge of my job is that often people will come to me and say, “I have the answer for you, and it does not require any Government funding.” I am like, “Hmm…” They say, “All it requires is a CfD of £150 per megawatt-hour.” And I am like, “Well, you know…” I am not saying that about this particular case, but this is the really difficult judgment that we are trying to make here: things can look like no-brainers, but when you actually look into them, you think, “Well, that is going to be incredibly expensive.”
What is the strike price? What is the risk transfer arrangement? What risks are being borne by the consumer and the taxpayer, what is actually being borne by the developer, and how mature are the costs? Those are the opening questions.
When you judge costs, do you take into account the fact that some forms of technology have a much longer lifetime? We have already seen 60 years of tidal range power generation in France, for example, and we are looking at a 120-year lifespan, which is different from a wind turbine, and it is different again for nuclear. Do you take that into account? Do you give a premium to technologies that provide stable generation rather than intermittent generation?
We absolutely do seek to take that into account. Some of these questions are not perfectly modellable, and it is a complicated issue to compare technologies with different lifespans, but that is what the analysts in the Department are seeking to do. Tidal range technology, to use your example, has a wonderful advantage in that is very predictable; you know exactly when it is going to work. And that brings some advantages to the system. However, it is also very predictable that there will be times when it is not operating and not generating electricity. Unfortunately, some of those times when it is definitely not generating electricity will include the winter peaks in January, when the system is under most strain. We take these things into account, but it is quite complex analysis.
If it is any consolation, Secretary of State, I think the same people come and ask me the same questions and tell me the same stories about the wonderful new technology they have. Whether they come to you or me first, I have no idea—
I don’t know; we will compare notes.
Maybe we will. The Mersey tidal barrage is a similar project. It goes to the question that Claire just asked about funding for these very long periods of time. Is any work being done about how potential funding for much longer-term projects might be delivered? It is true of nuclear, as well as technologies like tidal.
Perhaps I could offer a view on that. I think that one area where the Department has done a lot of thinking in recent years is on what we call the business model arrangements to support technologies. Obviously, the model that most people have heard of and are aware of is the contracts-for-difference model. It was 15 years, extending to 20 years for renewables. It is longer—35 years—for Hinkley. That model can provide long-term support. Increasingly, however, we are also looking at different forms of support, reflecting the characteristics of the technology. Obviously, for Sizewell we have moved to a regulated asset-based model. For carbon capture, we are moving to something called a dispatchable power agreement, which is essentially a more flexible CfD that incentivises the plant to operate when we need it to operate. That is what will apply for Net Zero Teesside. We are adjusting the model according to the technology—its characteristics, lifespan and the role we need it to play in the system. When looking at longer-term support, in this day and age, we would also look at the RAB model as well as the CfD model.
To sum up, my fundamental question—and an important one for us all to ask—to anyone coming forward with proposals is, “What is the price and is it value for money?” People have raised questions about the lifespan of some of these projects. As Jeremy said, it is definitely something that we seek to take into account. I also accept that one must not just go on what was concluded in the past; you need to keep looking at those issues. That is why I have asked STAC to look at them.
You mentioned the nature-positive energy transition. I also noticed that the strategic spatial energy plan document, which was commissioned to NESO, said that the “SSEP should also take into account the outputs of UK government programmes for England such as Marine Spatial Prioritisation Programme and the Land Use Framework.” I am interested to know what “take into account” means in that circumstance. When will we see that the strategic spatial energy plan is taking the land use framework into account, and how will it be taken into account? How will we know that it is happening and what difference will that make? Bearing in mind that myself, Torcuil and others across the country have climate-valuable land, such as salt marsh and deep peat, in their constituencies, we need to make sure that we are protecting, mitigating and restoring those, because they are vital contributors to tackling climate change.
That is something I should take away, to give an answer that justifies the depth of the question. Overall, for years, people promised a land use framework. My colleague Steve Reed is actually delivering it, and that is very important. For years, people have talked about how we need to plan our energy system better. We are going to deliver a strategic spatial energy plan, which will be crucial in the system of reform of national pricing and ensure that we have energy generation in the right place. What that language indicates is that we are determined to make sure that those things cohere in the way that land is used. Below that top line, you raised some very legitimate questions about what that will entail, so let me come back to you by letter.
Thank you very much. Are you concerned that your draft NPS for energy could undermine the ability of developers to mitigate harm to nature. and may also result in a small reduction in generating capacity?
I do not think so. My strong view—and a big part of this is the work we have been doing on nature recovery with Steve as part of our plans—is that we can do clean energy infrastructure in a way that builds the infrastructure that we need and does so in a nature-positive way. Overall, it is important to remind people—I know that you know about this—that the biggest threat to nature that we face, as I said in the House of Commons a week ago, is the climate crisis. Therefore, there is an imperative to act here.
It is not just developers but also larger organisations that are responsible for big pieces of transmission kit, and do not have good records in protecting or restoring nature, particularly climate-valuable environments. We need more reassurance that there is proper governance on that.
We are determined to do that. If you have examples where you think bad practices are going on—as part of Chris Stark’s work, he has clean power commissioners including those who cover nature—we would be interested in working with you on it.
Thank you.
I refer you to the report that the Committee published on the national policy statement, which has recommendations on non-delivery by developers and the role of deep peat, salt marsh and other environments in carbon reduction more widely.
Thank you both for coming in. Time is short, so in terms of mission-led government, if I ask my questions and you nod in agreement, that will save a lot of time. I have some questions on community energy and on the workforce, Secretary of State.
It feels like when you were in your previous life, Torcuil.
We had some exchanges last week in the Commons on community energy schemes. I asked you if you thought that NESO should prioritise good connections for community-owned schemes and designated ones needed for the 2030 transition. Where are you on that?
I think it is really important that we drive forward on community energy. I am also conscious that NESO has lots of demands about what it should prioritise. Our north star is delivering Clean Power 2030, which is obviously challenging—absolutely achievable, but challenging. That is the No. 1 imperative. It is worth saying, without going into this at great length, that a very big transformation is happening, which is the prioritisation and re-ordering of the queue. We had this first come, first served, slightly wild west queue; we are now going to prioritise what is required for clean power. That will open up space, including for demand-led initiatives.
My question is, are you going to prioritise communities?
Absolutely. Communities are an essential part of delivering. I cannot say to you, “We will prioritise community energy over large-scale projects,” if those large-scale projects are essential for us to meet Clean Power 2030, but it is a really big part of our plans.
Jeremy, here is a bit from the Infrastructure Act 2015. It says, “The Secretary of State may make regulations which give individuals resident in a community or groups connected with a community…the right to buy a stake in a renewable electricity generation facility that is located…in the community (if it is a land-based facility), or…adjacent to the community (if it is an offshore facility).” That is the opportunity of the 21st century, is it not? What would you advise the Secretary of State to do with that Act?
Shall I handle that? Jeremy is welcome to come in. I am really interested in that unmet or untriggered clause in the 2015 Act. I have been trying to get to the bottom of how it ended up in—I think the Liberal Democrats may have had something to do with it. We are looking very seriously at whether we can give expression to the clause and what it would mean in practice, because you have to work out what it means in practice, but the whole focus of GB Energy on community energy is to empower communities not just with community benefit—this is what I have learned from you—but community stakes as well.
Let me give expression to it. It gives communities a right to take part in energy projects on their doorstep. That would really enhance support for any project.
Yes. We are looking very seriously at it.
Given your answer, does it not make sense, in answer to Torcuil’s first question, to prioritise connections to community projects?
Can you explain again?
Doesn’t it make sense to prioritise community projects, to build the case for the transition?
Absolutely, we have to prioritise community projects. I just want to be completely open with the Committee. If you are saying that we should prioritise community projects over a large-scale project that we need for 2030, that is going to be hard to do.
But couldn’t you have an obligation on any of those big projects that they make sure there is a significant stake owned by the community, so that we get that buy-in and we have some local ownership, governance and accountability for the big energy project?
That is what we are looking at.
At the moment, we are worried that the power there in the 2015 Act could go, and all you are going to end up with is more community benefit fob-off, frankly.
It is less that it goes and more that it does not get enacted, but I am totally on your wavelength on this. That is why we have made GB Energy have a big focus on community energy. I absolutely believe that we can deliver, and deliver in a way that supports community energy.
Time is short, so I will move on to the workforce. I am encouraged by what you said, Secretary of State, about wanting to encourage all companies in the energy sector to take seriously the role of trade unions. Those trade unions—the GMB, of which I am member, among them—want you to keep the North sea open and keep the taps turned on in the same way as Norway, so we have energy security from oil and gas while we go through the transition. They see you as not wanting to do that.
I don’t think that is correct. We had a very clear manifesto position, which was to keep existing fields open for their lifetime. That is an important position. We also had a position that said we were not going to issue new licences to explore new fields. We are currently consulting on that. I am absolutely determined to build a just and prosperous transition in the North sea. That is why building the future, as well as ensuring we have a smooth transition for existing oil and gas, is so important. If you look at the recent report from the Robert Gordon University, for example, it talks in quite a lot of informed detail about how we manage this transition, and that is what we are absolutely committed to; for example, we stuck to our schedule of issuing new guidance on EIAs—environmental impact assessments—following the Supreme Court judgment. The Treasury is currently consulting on the tax regime, which is, after all, the No. 1 issue for lots of developers and companies in the North sea. I was delighted after the spending review to go work with and meet all the companies involved in the Acorn project. So, we are absolutely committed to both parts of that.
What would help in this just transition would be a national workforce strategy from your Department. We have not seen it.
We are going to do it. It will come out in the autumn. We have been working on it—the clean energy workforce strategy—and it is something where we have had really good engagement from all the trade unions and businesses. What it is absolutely about is delivering this transition in a fair way. Let us be frank about it: part of the challenge is matching the opportunities that could arise with the skilled workforce required by the companies. So many companies I meet say, “We are worried as to whether we will get the skilled workforce that we need.” When I came into Government, what surprised me was the level of detail on the needs. What depressed me was the lack of plans to meet them—we have to do both parts of that.
And retrofit as well.
Retrofit is an absolutely crucial part of it. We have a training grant, which I think is helping to train 18,000 people in heat pump technology. But retrofit is also part of it.
My favourite topic—decarbonising the difficult bits. I want to talk about your role in shaping strategy for other Departments. For my constituency, logistics are absolutely critical. The CCC also recognises that we have to decarbonise the logistics sector to hit our net zero targets, but we have not seen anything from DFT on low-carbon fuels or a direction for that sector, including impacts on grid capacity if we are going to have EVs running through the midlands. What does your Department do when other Departments drag their feet?
I do not think that is at all a fair characterisation of my colleague Heidi Alexander, who is a really enthusiastic supporter of this agenda. But why don’t I take away the issue that you raise and, as part of our work with DFT on mission-led Government, pass this on?
Do you actively identify those areas for which other Departments are responsible and put pressure on them? Ultimately, when we had the hearing last week, someone said you were responsible for net zero—I think it was the Government—and it is actually your head on the line.
Part of what we are doing is co-ordinating across Government a carbon budget delivery and growth plan, precisely because the previous Government had two goes at this, and their plans were found—guilty is the wrong word—not lawful. We have until the end of October to produce a plan. What is good is that this is driven across Government—whether in DEFRA, DFT, DBT or elsewhere. Everybody is playing their part in meeting our carbon budgets, and what you are talking about is absolutely part of that.
Smart meters and RTS are the programmes your Department oversees. There was a 15% reduction in smart meter installations last year. We had some quite shocking evidence on RTS, which meant your Department had to step in to stop the roll-out. With the Government getting rid of the IPA and rolling it into NISTA—which arguably has a more political angle, being responsible to the Treasury—how can we be assured that the programmes you are delivering are delivered on time and offer best value for the taxpayer?
We take the delivery of both of these very seriously. There are, I think, 39 million smart and advanced meters in homes and businesses across Britain now. Not enough of them are working in smart mode, and that has to change, frankly. We are going to be saying more about this in the coming weeks, but Martin Lewis and others have raised the problem of meters not working. The numbers have fallen, but not by enough. We are going to change that; we are determined to change it. On RTS, this has been a long inheritance, in the sense that people have been talking about the switchover for a long time. My colleague Miatta Fahnbulleh has led this well. We are now committed to a phase-out, but it is a phase-out to make sure we look after the welfare of those people on RTS meters. As you will be aware, we have started this in a gradual way, and we are making progress on it. We are very committed to delivering it in the right way. I don’t know whether you want to add anything, Jeremy.
I agree with that. I am tempted to add quite a bureaucratic answer on oversight and governance, because you asked about that and so I feel I should address it. In the Department, of course, we have very robust oversight of our large programmes, including smart meters, but you referred to the creation of NISTA. NISTA is bringing together the National Infrastructure Commission and the Infrastructure and Projects Authority, which already existed in the Cabinet Office, as I think you are aware; it was the Cabinet Office bit of the machine. It was the IPA that led the oversight—if you like, the scrutiny—of the Government’s major projects portfolio, the GMPP projects. So that bit was already in Government. NISTA is bringing those together; it is in Government. I think that is a sensible change to be making. I think it is better to have that access to Ministers and access to the advice that we have in Government. The chief executive was only recently appointed, so it is still establishing itself, and the process it needs is under way. It is overseen by the infrastructure committee at ministerial level.
You have led me on well to my next question. When Chris Stark came in, we questioned him on mission control and maturity of the organisation, and he was very honest about the fact that he did not have in place the governance, the commercial and the project control capabilities. You had got some great thinkers and strategists, but weren’t into the weeds. Has that now been addressed? I have heard the same from GB Energy: there are great announcements and big thinkers, but you are not getting into delivery. What is your Department doing to make sure you are delivering, not just announcing, new projects and funds?
The thing I would say is that my Department is now a delivery Department. In the past, it has sometimes been seen more as a policy Department that was about frameworks. But we are responsible for, I think, the second largest portfolio of major projects in Government, and our big focus for the last two and a half years, since we were founded, was making sure that we have the skills and capabilities and the strong functional support needed on commerce, project oversight and things like digital functions, so that we can oversee these very large programmes. That is paying dividends now, as we are now overseeing large-scale nuclear projects and the development of carbon capture, as well as long-standing programmes like smart meters.
If, like we do with the transport sector, we overlaid a mechanism like P3M3 to assess the maturity of your delivery, would you be confident that you would be at a good, strong maturity level in terms of delivery?
Our programmes are at different stages. Our mature programmes have mature delivery arrangements around them, but clearly the Department has newer projects and programmes, which have only relatively recently been created. We need to build the delivery capability in those cases, but I am confident in the Department’s capability.
I am keen to finish on time because we promised to do so. When are the British Coal Staff Superannuation Scheme pensioners going to get more of their money?
This is an issue that I care deeply about. I am incredibly proud of what we did on the Mineworkers’ Pension Scheme, which has increased miners’ pensions by an average of £29 per week. I think that is a really important thing that the Government did. This is something that is being taken forward by my colleague Sarah Jones, but the BCSSS issue is very important to me. I should say that, because of my significant interest in this as a coal mining MP, it is being taken forward by Sarah rather than me. But as a constituency MP, I am extremely keen on a good and positive outcome on this issue.
Thank you. Perhaps you can encourage Sarah to let us have a bit more detail in the near future. Secretary of State and permanent secretary, thank you very much for your evidence today. We will end the session there.