Welcome to this afternoon’s session of the Energy Security and Net Zero Committee on the work of the Department. We welcome the Secretary of State and the permanent secretary, and the Chair of the Environmental Audit Committee, Toby Perkins, who is here as a guest. Secretary of State, I think you want to start with an opening statement, so please go ahead.

Thank you so much, Chair. It is great to be here again. I want to thank the Committee and its members for your work. We came in 19 months ago with a clear mission. Since I saw you last, I believe that we have made really important progress on that mission—on bills, jobs and climate. I thought that I would briefly remind the Committee of some things that have happened since I was last here. We have expanded the warm home discount to nearly 3 million extra families this winter. We are taking an average £150 off energy bills from April. We have delivered something very important—I know the Committee is very interested in it, and that we will perhaps get into it later—in our warm homes plan, which is the biggest ever public investment in home upgrades. We are accelerating to clean power, which is really important for creating jobs. We have announced the UK’s first SMRs at Wylfa. We have published our clean energy jobs plan, which I know that the Committee is interested in, setting out how our mission will support 400,000 extra jobs by 2030. We have crowded in more than £3 billion of investment in supply chains through our clean industry bonus and agreed a fair work charter as a first step to improving workers’ rights in renewables. I draw the Committee’s attention to figures that have come out from BloombergNEF, which said that UK energy transition investment rebounded strongly in 2025, growing some 36% to $85 billion after a 9% fall in 2024. I think that reflects the clarity of our mission and the sense, for the private sector, that this is a mission worth investing in. Finally, we have used our domestic leadership to continue to work together on the international stage. I think that is important in the global context we face, with very significant global headwinds on climate. At COP30, although it was not necessarily the outcome that we all wanted, we saw more than 190 countries reaffirm their commitment to multilateral climate action, the Paris agreement and 1.5°C. If I can pose the counterfactual, after President Trump said that he was withdrawing from Paris, some people said that there would be a domino effect of countries leaving. That has not happened. I conclude by saying—I thank all the civil servants in the Department for this—that we came in with a clear mission, we are delivering on that mission and we do not intend to let up on the speed of that. We know that we have a really important job of delivery now and I look forward to discussing it today.

Thank you very much for that comprehensive analysis of the work of your Department. You introduced the local power plan yesterday in the House and then at an event that a number of us attended. You said that the public want us to be bold. I dare say that you would say that what you just set out is being bold. You said that they want hope. Do you think that the public know that you are being bold? Do they know the breadth of what you just told us?

Inevitably, I want people to know more about our mission. That is my job, the job of our Ministers and the job of everyone who supports our mission. I had the pleasure of reading some of your Committee’s testimony in preparing for this session, and I was particularly interested in the testimony of Luke Tryl from More in Common, because I think he is one of the most expert observers on these questions. He made a number of very interesting points. First, he said not to overestimate the backlash. The public still think that renewables and clean energy are more likely to lower bills and give us energy security than fossil fuels, because people do not have short memories. They are still affected by what happened when Russia invaded Ukraine and bills went through the roof. He said that what matters is meeting people where they are and showing them the material benefits of action and how important that is. He also made the point—which I think you are making—about our advocacy for this agenda. I am in no way complacent about the siren voices that want to take us back, double down on fossil fuels, leave us more insecure and betray our kids’ future, but I am confident that we can beat them.

What do you think needs to change to ensure that people have a good understanding of your agenda?

It goes back to the word that I used in my opening statement: delivery. What is really exciting about the phase we are now moving into is that people are going to see the benefits of our agenda: 2.7 million extra people this winter have the warm home discount as a result of the decisions taken by this Government; people right across the country will see £150 of costs taken off their energy bills this April; the warm homes plan is being rolled out. To make it even more concrete than that, I went to north Wales with the Prime Minister, the Chancellor and the First Minister of Wales, and I saw the young people at the local college realising that after years and years of promises to the people of north Wales, we were making the biggest investment in north Wales for a generation through AI and, in particular, through our decision on SMRs. They saw their future. My job and the job of my Ministers and, dare I say it, of Members of Parliament is to show those benefits at a local level. We win this place by place. By the way, there are so many things we are doing that I may not mention all of them, but through Great British Energy, something like 200 schools and 200 NHS sites have solar panels on their roofs—again, local benefit to people.

Great. As you quoted Luke Tryl, he said to us that people agree with what you said—they accept the science. I take your point that people still see renewables as the way to cut bills, but quite a lot of people—there has been a bit of a shift in this direction—think that the energy transition will cost them money, and when they think that, their support for it falls. What is your responsibility for ensuring that that does not happen? What is your intention over the coming months to address this through social media and local campaigns? You and I debated this yesterday in terms of solar farms and, as you put it, dealing with the wacko conspiracy theories. How are you going to do this? What is your part in it?

The biggest responsibility is to deliver, and that includes delivering lower bills. That is why what the Chancellor did in the Budget is so important. It is really important to recognise the historic nature of what the Chancellor did. People have talked for a long time about the costs of building the infrastructure that we need to build, and I am going to say something about that. The Chancellor took a really brave decision, which is that as well as closing down the ECO scheme, which we will perhaps get into, she transferred 75% of those renewable obligation costs to public expenditure. It is the right thing to do, and it is the fair thing to do. We are determined to deliver. It is about advocacy and explaining what we are doing, and it is about people seeing the benefits of our decisions. It is also about making the argument. We could decide to make an absolutely almighty gamble—having made the gamble and seen the effects when Russia invaded Ukraine—that we are never going to have another fossil fuel crisis, even though half of the recessions since the 1970s have been caused by fossil fuel price. We could decide that that is what some people want us to do—to double down on fossil fuels, cross our fingers and hope for geopolitical stability. I think that is pretty asinine, frankly, in a world where we have greater geopolitical instability than at any time in my lifetime. Or we could make the choice that we have made, which is to drive for clean energy because it gives us that security and it will drive down costs and then—let me come to this point, Chair, because it is important—make sure that we convert those lower wholesale costs of clean energy into lower bills. That is why the Chancellor’s decision was important.

Okay. The warm home discount will see £150 taken off the bills of 6 million people in April, which is a big increase. Is that going to be enough to convince people that you are on the right track?

No, we are going to need to do more.

What are you going to do?

We made a commitment of getting up to £300 off bills by 2030, and that remains our commitment.

How, when you have got those upwards pressures of infrastructure?

That depends on the policy choices we make between now and 2030. What the Chancellor did is an important downpayment and an important measure, but the cost of living crisis is deep and long standing. That is why I think it is a start.

We made a recommendation that everybody pays £160 towards the cost of servicing the consumer debt. Ofgem said it did not agree with that. What is your view?

Is that to put into public spending?

No, it was to write it off by getting the network companies to use their excess profits to pay for it. That was our recommendation.

Tax matters are for the Chancellor. I think your concern in your cost of energy report about the old regime for the previous RIIO price period is correct, and it has been corrected for the coming price period. I am old enough and wise enough not to get into tax matters, but if your point is that the job of my Department is to scrutinise bills in every regard to see how we can drive them down, that is absolutely what we are focused on. Martin McCluskey, our Minister for Energy Consumers, is very focused on that, as am I.

Thank you. We will move on to Wera Hobhouse.

I return to the exchange of questions in the Chamber yesterday. First of all, I welcome the local power plan; community energy is a fantastic way of getting communities and people on board. What is still missing is a clear definition of what community energy actually is. Now is, in some ways, a good opportunity to come in and say what we think should also be included. My thinking is that it is not just about who owns the asset of a community energy project, but the community who lives directly adjacent to that community energy installation. Should not the community who lives directly around an installation directly benefit from the energy that is created there? That is what is still missing as a definition. Would that not be the ultimate aim? In order to illustrate that, if you have a community energy project in Bath, such as solar panels on a school, the energy goes first to the school, but when the school is not using the energy it goes straight into the grid, rather than directly to the houses around there. That should ultimately be the aim of community energy, and the community around it, who might not own the asset, would see the benefits. Should that not be the ultimate aim of community energy?

This is a discussion we should continue to have. The principle that you set out, which is when communities live near large-scale energy infrastructure they should benefit from it, I agree with; that is community benefit in a broad sense. Specifically, the excitement for me of the local power plan is that it is a shift in thinking from simply large multinational companies, who have an important role in the energy system, owning energy to local communities owning energy as well. I think part of what you are getting at is the definition of community energy. We are determined to develop a definition of a community energy group, provide clarity for communities seeking to form them, and prevent the misuse of the designation. I am sure my Department would be happy to have those discussions with you.

Thank you. Could that also include something like local supply licences and ideas on how we can get over the regulatory hurdles? All those discussions are still out there, is that correct?

I completely agree. I said in my statement yesterday that it was very important to look at questions of not just the financial barriers that community energy groups face or the capacity barriers, but the system barriers. That is one of the discussions that we are going to have. Sometimes you do things in politics and you recognise that it is the start of a journey to a different place. I feel like what we did yesterday with the local power plan is the start of a journey to a different conception of who owns energy in this country. It is not the whole story in one document, but I think it is the start of a journey to a different place.

Just to add to the Secretary of State’s comments, community energy schemes have a number of advantages. One of them is about getting buy-in and support for the projects that are on the ground. That is one of the things you can see coming through in those sorts of cases. That has to be balanced with the practicalities of how you make schemes like that work in practice. Some of the things you were asking about are the things that we should go away and consider, as the Secretary of State suggested. It is about making them work in a practical way for local communities without excess complexity about how it all fits together, and in such a way that benefits could be shared among local residents. You do not want to create a complex system to solve a relatively small issue. It is about getting the proportionality of that sorted out.

Secretary of State, I recently sent you a written parliamentary question about the extent to which the Climate Change Committee’s CB7 projections took into account the energy needs of data centres. Minister White’s reply said that the Government will choose their own pathway and consider future trends in energy demand. When you have been in this game this long, you think that if the Minister does not answer a question, it is probably because they either do not know or do not like the answer. Can you give us greater clarity today? To what extent do the energy projections provided by the Climate Change Committee in CB7 take into account the vast expansion in energy demands that we are expecting as a result of data centres?

Candidly, the question about what they took into account for their projections is a matter for them. It is obviously something that we will scrutinise as part of our response to CB7. Let me just go to the more general question—

Before you go on to a more general question, because I think this is really important, would you not agree that it would be foolhardy for us to debate projections to do with the energy demands in 2038 to 2042 that did not take into account any expansion in demand as a result of data centres?

It is obviously important to take into account the impact of data centres.

But you do not know if they did?

You would have to ask them.

Well, I asked you, and I assumed when I asked you that you would find out whether they had or not.

I don’t know the answer, but I am happy to find out.

Okay. As I said, I submitted a written question to you. Your answer was unclear. I imagined that at that point you would have asked them, but I would be grateful to hear the answer. In terms of the cross-Governmental work, have there been discussions in Government on the desirability and impacts of data centres? It seems to me that we are all just accepting that data centres are coming and there is nothing we can do about it, without ever thinking philosophically about whether that is a good thing or something we should attempt to attract to the UK. Have there been discussions of that sort?

Yes—that is what I was going to say when I said I would give you a more general answer. First, a lot of work is going on with the National Electricity System Operator to make sure that in our future projections of electricity demand we look at the demands of data centres on the system, including any implications for bills, which are a crucial part of my job, for clean power and for demand overall. NESO is actively involved in that. Secondly, we know that electricity demand is going to grow significantly, in part because of data centres, but also more broadly as we decarbonise. Thirdly, an important part of the Government’s mission is recognising that the transition to AI is coming and that, because of the wider economic benefits, it is important for the UK to get not all the investment, but significant investment in AI and data centres. However, that is subject to making sure that the implications are acceptable, not just for the data centres, but for jobs, bills and costs. My Department has an important role in making sure that whatever we do on AI is consistent with that wider mission.

It is important that you have said that. We know a lot about what you have already said about your Department and energy policy, but you are also responsible for net zero, so there is a lot of talking to other Departments about the consequences of their decisions for net zero. When it comes to things like, for example, the aviation expansion that we are seeing, the Climate Change Committee suggested we need demand management measures, but the Department for Transport seems reluctant to take those. To what extent are you getting a hearing when you speak to colleagues about the impacts of their policies on these commitments, which you hold the pen for, on net zero?

Another thing that has happened since I came to this Committee is that we have published our carbon budget and growth delivery plan. I can say that we had massive amounts of co-operation from across Government, including in particular from the Department for Transport and DEFRA, because this is such an important framework. I believe that this framework is taken very seriously across Government. I was very impressed and heartened by the support across Government, not just at a political level, but at an official level, for recognising that this is a very important framework in relation to all the matters you set out.

Let me come back to the issue of the grid, which is one of the potential single points of failure of much of your and the Government’s plans. You referred to the welcome plans on renewable energy in schools and hospitals. We were delighted in Chesterfield to hear there was a plan for solar panels on our hospital, but when the hospital started to try to avail themselves of that, it was told that the grid is such that it will be 10 or 12 years before it can do that. Effectively this £5 million investment, and the £700,000 savings the hospital was expecting, will fall because of the failure of the grid. How important is it to expand the grid, and how will we ensure that policies you announce are not undermined by this single point of failure?

It is a really good point. We obviously inherited a massive backlog of investment in the grid over many years, and that is why making the investments in the grid, including in RIIO-3—the coming period—is so important, not least because of the question of the so-called constraint costs that we face. That is one part of it—the investment part of it. There is also a big reform piece. As you will know, NESO has embarked on the most comprehensive reform of the grid queuing system in generations, and has pushed back projects that were not necessary for our clean power and other objectives in order to free up space for projects like the one you are talking about. I will be frank with you: that has been a fiendishly complicated process. NESO has got partway through it, in the sense that it has reordered the queue, and new connection dates will be coming for those that have been prioritised. That is a discussion that is going on between NESO and the transmission operators. The whole intention of that is to prevent the kind of delays that you are talking about. We are about 18 months in. This is really hard, because it requires the investment and the reform of a really complicated system, but we are absolutely getting on with it at pace.

We are simply following the practice of the previous Government in relation to a 2015—I think—memorandum of understanding. But ask me anything about our relationship with China, Mr Thomas, and I will answer it.

That is the practice that was employed under the previous Government, but ask me any questions about our relationship with China and I will answer them.

It is absolutely right that we are vigilant about investments from China, in particular in relation to energy. The previous Government believed that it was right for China to own our nuclear power stations, but we do not agree with that. That is why we believe that we need UK ownership of our nuclear power stations, and that is the decision we made in relation to Sizewell C, for example. We absolutely need to be vigilant about all states—including China in particular—in relation to the control of our energy infrastructure.

Of course there are security risks in relation to China that we have to be vigilant about.

Yes; I am saying to you that that is why we have to be very cautious about our energy system.

Mr Thomas, do ask me any questions you like about our relationship with China.

As I say, we are following the practices of the previous Government.

I am just explaining to you that we are following the practices of previous Governments, but—

Mr Thomas, do ask me any questions you like.

As I say, we are following the previous practice—

We are following the previous practice, as I said, but do ask me any questions about our relationship with China.

I think I have explained to you the practices we are following and—

With certain countries, we have certain approaches, and with others, we have other approaches, as have previous Governments—

As I say, just ask me any questions you like on this topic.

I have answered the question, Mr Thomas.

He has answered that quite a few times.

Whether you like the answer is another matter, but he has answered it.

We proceed on a certain basis with some countries and on different bases with different countries, as has been the practice of previous Governments. But honestly, ask me any questions about our relationship with China, and I will answer them for you.

Well, you obviously do not have any questions actually about the substance. What is your question on the substance, Mr Thomas?

Do you have any more questions?

I am going to move to workforce. My observation is that when it comes to workforce-related issues in clean energy, we seem to be facing a bit of a chicken-and-egg situation—you cannot train or recruit people to jobs that do not exist as yet. That causes huge problems; you either wait for projects to start before you recruit and it ends up being very late, or you end up bringing people in from overseas. How do you think that you can crack that issue, particularly as no clean energy technical colleges have been announced?

I am really pleased that you asked that question. I am really proud of our clean energy jobs plan, which is a new departure for Government, because it sets out not just our ambition for 400,000 extra jobs in relation to clean energy, but how we are going to go about the process of making sure we have the workforce available. You mentioned our technical excellence colleges; we are getting expressions of interest at the moment, and we are going to start selecting those. We are embarked on a process across Government, with industry and unions, on how we can make sure that we have the workforce we need. We are employing a very intentional process around how we make sure that we have that skilled workforce that is appropriate to meet the needs that are there, and we are working with colleagues in the Department of Education and elsewhere.

Applications for expressions of interest on the technical colleges closes on Monday next week. There is an expectation that they will be established from April this year; is that remotely realistic?

We are going to move as soon as we can on these questions. I can get back to you on the precise timetable—

That is on the Government website—that they will be established in April.

We are moving as soon as we can.

The Government have told us that the majority of the clean energy workforce needed in the UK is already in employment. They are already comfortably in their jobs and they are working. Can you explain why they would move to clean energy roles, particularly if those roles are less well remunerated than their current jobs?

Overall, it is the case that clean energy jobs have, I think, about a 20% premium compared to jobs across the economy as a whole. These are good jobs, and part of our insistence as a Government is that they need to be properly remunerated and have good workers’ rights. I think we can attract workers into this area. Sometimes there will be skills needed that are very specific to clean energy and sometimes they will be more general, whether they are in construction, welding or a whole range of areas. Some of them, it is worth saying, will also be jobs from other industries such as oil and gas, for example. Part of the North sea future plan—and this is why what we are doing in the clean energy jobs plan is so important—is making sure that there can be a transition of oil and gas workers moving to other industries, including to clean energy. We do that in two ways: first, the North sea jobs service, which is matching the workers who might be leaving oil and gas into clean energy and secondly, we have set up a £20 million transition training fund to help train workers who might not have skills they might need to move into clean energy. On the question that you may want to discuss about the comparison between North sea oil and gas jobs and clean energy, that is something that we are looking at as a Department. There are advantages to clean energy jobs, because they can require less time away from home, for example, and various other things, but those are also issues that we are looking at.

You just mentioned some of the methods by which you are hoping to move and transition people who are already in the energy sector. Part of that is the energy skills passport. Do you think that the word “passport” is quite misleading? You might think that you get the passport and that automatically gives you the opportunity to move into other roles. That is not the case, because it appears to be just a portal that does some skills matching, and people will still need training, presumably from the fund that you talked about. We will have to arrange that, particularly for offshore oil and gas workers, if they want to move into offshore wind and do not have their GWO.

This is something that the North sea future board will definitely be looking at. For the sake of clarity, that board was set up with all sides of industry and Government to look at how we can make sure—and this is the big picture—that we have a fair transition in relation to our North sea oil and gas communities. I very much take your point, but the passport was talked about for a number of years. We took it out of being rather stuck and have moved it forward, but I accept that there is further to go, because you want the real meaning of the passport to be—

You want it to actually do what it says.

To do what it says on the tin. In a sense, we inherited that label, and I agree that a real passport involves as seamless a transition as possible, without the cost of moving from one industry to another necessarily falling on the individual.

I want to move on to refineries, which you probably will not be surprised by. Do you recognise the competitive disadvantage that refineries in the UK face, and are you doing anything about that?

We recognised that the situation facing refineries is challenging. We will shortly launch our future of fuels call for evidence. That will be the first time in decades that there has been a proper look at the role of the refinery sector. It is something that I have taken a personal interest in—and I know you have a personal interest in because of what has happened at Prax. First, we want to accelerate the work to get refineries into the CBAM, because that is how we can help to protect their competitiveness. That is something that we are working on with the Treasury. We need to look at some of the ways that the costs of refineries are covered, for example, the EII scheme—in which refineries are not currently included. It is something that myself and the Energy Minister, Michael Shanks, are both intimately involved in and thinking about. We recognise the importance of doing absolutely everything we can to protect the existing refineries we have.

I am conscious that I may be speaking to the next Prime Minister, so I shall be careful with my words.

Oh for goodness’ sake—most definitely not.

Following from the answers that the Secretary of State gave—or perhaps did not give—to my colleague, Bradley Thomas, is there any inhibition, other than his own desire, to publishing the documents to which reference has been made?

I have given an answer. I do not have any more to add to the answers I gave.

This is significant because, as the Secretary of State will recall, one of the United States’ concerns about Mr Mandelson’s appointment as our ambassador to the United States was his close relationship with China. There is a report in today’s paper that on a visit to China, Mandelson tried to get away from officials and have private meetings with members of the Chinese Communist party. Your failure to answer those questions directly will only give rise to the suspicions that the United States had in relation to Mr Mandelson; I hope they do not have those suspicions in relation to you.

The first clean energy agreement with China was made in 2015 and was not published. We are just following the previous practice. I suspect that you have a suspicion that there has been this big conspiracy, as you see it. I honestly think that it is really clutching at straws. I think I have given the answer.

Okay. You have announced the most massive expansion of solar panel investment. Of the solar panels in used in this country, 95% are imported from China. By expanding solar panels, we are increasing our dependency upon China. The same is true in relation to wind turbine blades. In answer to questions on that in the Commons, you said that we were going to try and develop our own manufacturing capability in relation to turbine blades.

We have, with GE and Siemens.

You have not said anything about how we are going to reduce our dependency on Chinese solar panels.

We inherited a situation where, as you are right to say, the solar industry across the world and indeed in the UK was dominated by China. Unlike the previous Government, we actually want to develop UK supply chains. That is why we have had the clean industry bonus, which is going to invest in, or lever in billions of pounds of private investment into, clean energy supply chains. It is not true to say that we do not have any domestic manufacturing, because Siemens in Hull provides precisely that domestic manufacturing. Now we want more of it. One of the things I have done in my Department is to turn it from simply being an energy policy Department into being an energy and industrial policy Department, where we are working on developing those supply chains through our clean industry bonus, Great British Energy and the national wealth fund. If you are asking me whether we also want to see investment in the solar industry domestically, the answer is yes. As Minister White pointed out in the House of Commons yesterday, when we left office, there were three leading solar manufacturing firms; when we came back into office in 2024 there were none. We also want to build up our domestic industry in other areas so that we diversify our supply chains.

When you made your announcement yesterday about allowing all these extra solar farms, why did you not put in a requirement that they be built using British-built solar panels, rather than imported ones?

Because we don’t have the industry, because of the failure of your Government.

If you announced that as industrial policy, wouldn’t that help generate the industry that is necessary? At the moment, a solar panel from China is about a fifth or a third of the price of one produced in our own country.

Sir Christopher, if we did that, you would say, “Why are you raising bills for everybody in this country?” We saw record solar installation last year. That is helping to cut bills for families across Britain. We are in a cost of living crisis, and it is incredibly important that we do everything we can to cut bills for families. Rooftop solar is one of the most untapped resources in the UK. Only around one in 20 households have rooftop solar. We need a lot more of it. We also need to find ways of diversifying our supply chain, but it will take time, because of the inheritance we got from the last Government, who were completely asleep at the wheel. Whether it is in solar or, potentially more fruitfully, in other industries where there isn’t the same dominance, we need to develop that potential.

But the costs of subsidising solar, wind and other renewables are being borne by the consumer. You have made a big thing of reducing bills by £150, but after that announcement was made, Ofgem said that bills would increase by £108 by 2031, just because of the need to invest more in transmission. Far from the bills coming down by £150, they will be coming down by next to nothing by 2030, compared with your pledge to the electorate prior to the last general election of reducing bills by £300.

Your question faces in so many different directions at once, Sir Christopher, that, with the greatest respect, it is hard to follow. You are simultaneously saying that the cost of solar is too low, that it is too high, that it will lower bills and that it will raise bills. You will have to clarify your question.

What I am saying is that you are putting subsidies into solar, you are putting subsidies into wind—

You’re really wrong about that.

You are increasing to almost total dependency on electricity, rather than utilising our gas resources. That brings me to my final question—

I just want to interject; you asked a question, so let me answer it, just for the sake of clarity. In the results of AR7, which we published yesterday, solar is at £65 per MWh. That is, by far, the cheapest technology available. If you are a fan of gas as a solution, that would be, by comparison, £147 per MWh to build and operate, so I want to say, with the greatest respect, that you are 100% dead wrong to say that we are somehow subsidising solar, because it is the cheapest power source at our disposal.

The sun hasn’t shone for the past month, so that is by the by.

Even when the sun is not shining, Sir Christopher, solar works.

I will not blame you for that.

There’s a headline: Miliband not blamed for sun not shining. That is extremely generous.

This is your last question, Sir Christopher.

According to NESO statistics, by 2030, under the clean power plan, the United Kingdom’s gas import dependency will still be 70%. What is the Government’s gas supply plan out to 2050, where will the gas be coming from, and why are we not getting it from our own North sea?

The North sea will continue to play a role for decades to come, which is why we had our two manifesto commitments: not to issue new licences to explore new fields, which is environmental leadership, but to keep existing oil and gas fields open for their lifetime. It will therefore continue to play a role, but as you know, Sir Christopher, the North sea is a declining basin. The NESO report on security of supply is very interesting, because it makes the case for why decarbonisation is essential for energy security. What it says is that in the so-called falling behind scenario—I suspect that you might want to fall behind the falling behind scenario—we are massively exposed to gas imports, not because of our policies but because the North sea is a declining basin. The real danger of a decision to move away from decarbonisation is not just what it means for climate change and bills, but what it means for energy security, because it will leave us very, very exposed and will impose massive costs, as we have to build all that new gas infrastructure. You’re shaking your head—

I am.

But I strongly recommend that you read the report. It is a really compelling case for why decarbonisation for the UK in particular is absolutely essential for energy security.

Secretary of State, like all good Labour Back Benchers, I wake up in the morning and read through my well-thumbed version of the Labour manifesto. In preparing for today, I looked at what you said to the nation 18 months ago and where we are at now. I think it is fair to say that there have been a lot of brilliant announcements from your Department, which have been well received by the public, in particular the local power plan, announced last night. You referred in your opening statement to moving now into delivery. Do you think your Department is ready to move into delivery, rather than making more announcements on strategy, plans and policy?

I think we are doing both at the same time. In relation to rooftop solar on schools and hospitals, we are already delivering. In relation to the warm home discount and the increase of 2.7 million people who will be receiving it, we are already delivering. Look at what is happening at Sizewell C and the jobs that are already there on site, or at Net Zero Teesside. We are delivering. In all those areas, things are actually happening on the ground, but I also take the point—

I will lose my time, Secretary of State. There is a lot to cover. You mentioned rooftop solar. People in my constituency are not actually that worried about housing; they are worried about rooftop solar on warehousing. Why can’t we unlock that? It feels to my constituents like such an easy win, and they don’t see the Department doing anything about it.

I share your pain. This is something that we are working on. We are in regular contact with the warehouse industry about how this can be accelerated. It goes more broadly to the point I was making earlier to Sir Christopher. Across the board, there is a massive opportunity in relation to solar, and I hope we will be saying more in the coming weeks about how we can have a solar sprint for households, but I totally accept the need to do it for warehouses too.

My colleague from the Environmental Audit Committee recognised that grid connections are one of the biggest challenges. Developers in my constituency also tell me that. We have had some not great feedback on the performance of NESO, in terms of connections. When they came in front of our Committee, they assured us that 2026-27 projects would be getting their connections by the end of January. Those projects are critical to delivering CP30, yet as I understand it, no single protected project for 2026-27 has received its connection. Does it worry you that delays are creeping into the delivery of your clean power plan?

It is something that we are very focused on. The truth is that NESO has embarked on a very, very complicated reordering of the queue. That reordering has happened, but now the process of making sure those that have come to the front of the queue get their grid connection date is under way. One of the things that is an issue is making sure that when those dates are offered, they are adhered to. Part of the problem in the past was not just that companies were offered dates a long way in the future—that is bad enough—but that they were offered dates that didn’t actually happen. Believe me, we are doing everything we can to speed up this process and make sure people are given realistic dates.

I have feedback that the industry feels that NESO gives one message to the Department and another to those on the ground. Do you think that NESO is completely honest with the Department on its performance and the issues?

I think NESO is doing a very valiant job. It is doing a difficult reordering of the process, and it is quite reliant on the transmission operators, but they all have a responsibility to step up.

I am going to use this as an example of what you asked about earlier. You asked about the Department being equipped to get on with the delivery of these things on the ground. For me, it is about having the capability and the people who can engage in the practicalities of making some of this happen. It is not only about creating economic frameworks that then drive and encourage other types of organisations to get on and do things, but about understanding enough and rolling your sleeves up to get involved. In the case of warehouse solar, for example, it is about understanding some of the institutional relationships between the owners of warehouses and the people who rent the space in them, and how you can go about influencing those. In the case of grid connections and associated infrastructure, it is about understanding the supply chains required to build the cabling, the planning applications required, and the oversight of and engagement in it, which we have already been doing for mission control for the generation assets that are required.

The network is probably not the sexiest part of what you talk about at the Dispatch Box, but it is pretty critical. As someone put it to me, we pay to build the network, use the network, maintain the network and decommission the network, but we do not own the network. Is that right?

Clearly, the network is privately owned. We inherited that system. In a sense, given the demands of the climate crisis, energy security and getting on with the process of reducing constraint costs and connecting companies, the most realistic thing to do is to work with the system we have. That demands leadership from my Department. It also requires strong regulation and—I have said this already, but it bears repeating—a much more intentional process of making sure that you connect the right people at the right times, and we are embarked on that process. Is it challenging? Of course it is. But one of the great things about mission control 2030 is that it is looking at all the network infrastructure we need for clean power 2030, and, in a granular way, at how we speed this up and make sure that it can deliver on time to keep constraint costs down.

This is my final question. I raised it with colleagues that, as well as the focus on generation, we need focus on storage. Again, it is perhaps not the sexiest part of the Department’s role, but the feedback I have had is that they do not feel there is the same emphasis on storage from the Department as there is on generation, in the big announcements at AR7 and so on. Even things such as STAC are quite narrow in their field of view on new technologies. Do you think that your Department is doing enough to look at alternative storage solutions and the storage we need to deal with the large volumes we will create in the future energy system?

It is certainly a big part of our plans. There is what is happening on long-duration storage, and what Ofgem is doing on its long-duration storage process and awarding long-duration storage. There is battery technology and the role of consumer-led flexibility. All those things are an integral part of the future system. I think that you are right to emphasise storage because we know that, if we can find ways to make sure that storage happens in the right places and in the right way, we have a vision of clean energy abundance, frankly.

Secretary of State, when you were last before us, I raised concerns about the Department’s approach to alternative clean power technologies, and you told us about establishing STAC, which has just been mentioned. Can you tell us what it has done in the last six months?

The Science and Technology Advisory Council, STAC, looks at a range of issues and advises me on a range of questions. Some of those are confidential matters, as you will all know and understand. I want to say more broadly to you, because I appreciate the point about alternative technologies, that since we last met, we have appointed Lord Whitehead, who comes with a real background in this field, to the task of driving forward our work on alternative technologies, whether that is tidal, geothermal or all the other technologies that could be at our disposal. I recognise that, in the way of these things, inevitably, the Department is likely to focus on the more mature technologies. Lord Whitehead was recently appointed to post, but I put on record my recognition that, while a lot of these technologies might be costly at the moment, as a Department we have a responsibility to look at where we can make progress and where they can provide more progress that we might otherwise have thought possible before.

Has the work of either STAC or Lord Whitehead changed your view on how much of a contribution those technologies can make, and on what timescale?

At this stage, I emphasise what I probably emphasised to you last time, which is that I am open-minded about these things. That is the work that Lord Whitehead is now undertaking. He is bringing to bear his considerable expertise in those matters. In the recent AR7 auction we saw, I think, four tidal stream projects awarded. I know the industry was disappointed about the scale of the budget in some ways, but we do have relatively significant amounts of tidal—130 MW— due to be deployed by 2029. My basic position is that I am open-minded on these questions. If these technologies can meet the cost test, then I am open to driving them forward.

There is certainly a lot of frustration in the geothermal industry that we are not taking advantage of it in this country as much we could be, with our geology.

I want to put this very gently: people tell me all the time—I am not talking about the geothermal industry particularly, because I think it can play a role—that if only I listened to their solution, then we could have free energy coming out of our ears. They will often then say, “Yes, it is incredibly costly now, but do not worry; the costs are going to come down dramatically. If only you give us a lot of support now, then it will be deployable.” I do not say that pejoratively because I think all of these ideas are important. What I have said about Lord Whitehead’s role acknowledges that we need to do more as a Department and to be open-minded about these possibilities.

On the question of technologies, you mentioned Wylfa. With so few sites suitable for GW-scale nuclear, why did the Government decide to host the first SMRs there?

Because it was our prime site and we wanted it for our flagship new programme, and, to be frank, because the people of north Wales have been made lots and lots of promises before, and I thought making them another promise that would not necessarily materialise for some time to come would just lead to more suspicion about whether Government were really serious. We believe in principle that there is a case for at least another large-scale nuclear power station. That is why we have asked Great British Energy-Nuclear to look at the potential of sites across the UK.

There are other sites that are probably only suitable for SMRs, or possibly AMRs, depending on which technology is used. Obviously, my concern arises from the fact that my constituency has Oldbury in it, for example. I have had lots of representations from the industry that they had expected GW-scale at Wylfa.

I know, and I understand that people will be disappointed in relation to Oldbury. What I will say is that, on the analysis that I was presented, Wylfa was a better site than Oldbury for the SMRs with scope for a bigger fleet. I really want to emphasise that Oldbury is a really good site. You will have noticed that we published our alternative routes to market recently, and what is quite exciting is that, coinciding with President Trump’s state visit, we have lots of companies from the US working with UK companies on these other routes to market. Oldbury is an absolutely prime site for that, so I would be very encouraging and positive about Oldbury.

Will STAC be involved in that work?

STAC can be involved in work where we see that there is a need. GBE-N has a lot of expertise on this. I see STAC more in relation to technology questions that need more of a new perspective. As to the question of Oldbury, we know it has huge potential.

I want to fit in nuclear and the warm homes plan and ECO, so I will try to be quick. On nuclear, I want to talk about the semi-urban population density criterion, which says where you can site nuclear power. The Fingleton review recommended that this criterion be changed because it was based on out-of-date assumptions and old technology, as well as the fact that it was formulated without the decades of safety data that we now have. In Heysham, we have Heysham 1 and 2 nuclear power stations—just down the road from my house—but under the semi-urban population density criterion, you could not put an SMR there now, which feels a bit silly when we have two operational nuclear power stations there. From what I have seen, this criterion restricts private investment—which you talked about before, Secretary of State—and conflicts with the aim of decarbonising industry. With regard to the Fingleton review, there is, to me, a risk that you will choose to implement these recommendations alongside the developments at Wylfa and the programme of GBE-N, but that will miss out the semi-urban population density criterion. So when will the semi-urban population density criterion be reviewed, and will that be done with an eye to the whole market, not just GBE-N projects?

That is a very specific and very legitimate question. Let me just say something about Fingleton. It is a really important review looking at how we can speed up nuclear build, and I am really grateful to John Fingleton for his work. We have said that we will have a comprehensive response to Fingleton by the end of February, that we support its recommendations, and that we will be providing a detailed response about how we plan to take it forward. I don’t want to be disappointing, but I think it is better if I take away your very specific point and incorporate it as we think about our response, because we are obviously engaged in cross-Government work on the response to Fingleton. Let me take that away and respond to it, because I think you make a very important and acute point.

It may have been part of the point, Secretary of State, that I want to emphasise the importance of dealing with that very detailed but very important point because of the impact on those alternative routes to market and that private investment in nuclear. I will move on to the warm homes plan and retrofit. Some analysis of the warm homes plan says that it is moving away from a “fabric first” approach and focusing on clean energy in terms of solar, batteries and heat pumps. My first question here is this. Was that a deliberate policy choice? Did you say, “Right, we’re getting to 2030. We need to focus on clean energy above”—say—"energy efficiency and insulation”? Bearing in mind some of the terrible things that have happened to people in previous retrofit schemes, where homes have been damaged, did that have an impact on that decision? Also, concerns have been raised with me that the end of the ECO scheme could see job losses, in the short term, in retrofit and uncertainty for the supply chain. We have had years of bits and bats of green energy projects not being done properly. So are you concerned that the end of ECO will damage supply chains and create job losses?

Let me deal with the two questions. On the first, my test is this. How do we do as much as we can to cut bills for people, because of the scale of the cost of living crisis? I think fabric has a really important role, but I also think that with the costs of solar and batteries coming down and with it now being possible to have a heat pump and have lower running costs than for a boiler, we have other things that can make a difference. So it is absolutely not saying fabric is not important. It is one of a suite of tools to cut people’s bills, and it is really important to say that. On the point about ECO, lots of good work was done under ECO, but as you know, there was also bad work, particularly in relation to external and internal wall insulation, and it was costing consumers a significant amount of money. Abolishing ECO is what has enabled us to take £150 of costs off bills. That said, in the warm homes plan we allocated another £1.5 billion of extra public spending in the light of the abolition of ECO. We have said that that money is, at least in the initial tranches, channelled through local authorities, but we want that money to help the ECO supply chain. My colleague Martin McCluskey has set up a group with representatives of firms that have been involved with ECO—local government, the industry and others—to do everything we can. I recognise, including as a constituency MP, the real challenges that ECO supply chain companies are facing. I do not want to minimise them. That said, we are doing everything we can with the money we secured in the Budget from the Chancellor’s decisions to help those companies with the challenges they face.

Finally, I want to put special attention on solutions needed in rural areas. In rural areas there are a lot more detached buildings that are usually older and often not in a great state in terms of fabric. They are often reliant on oil—there is no mains gas in a lot of areas. What thought has the Department given to how to ensure that all elements of the transition are fit for rural as well as urban communities? There are also grid problems in rural areas. One of my villages cannot have a superfast charger for electric vehicles because the grid would fall over.

This is a really important point. When you look at the boiler upgrade scheme—which is, after all, one of the main schemes—I think a significant percentage goes to people in rural areas, and indeed to those off the gas grid as well. I wondered whether the permanent secretary wanted to add anything.

You referred to oil central heating. Very often, we find that the cost benefits of heat pumps are particularly acute for people who have been relying on oil-fired heating.

Do you find that the homes that have oil-powered heating are ready for heat pumps, in terms of insulation, size of piping, radiators and stuff like that?

It will vary. The more recent assessments show that homes with a wider variety of heating systems are suitable for heat pumps, compared with some of the assessments that were done several years ago. That is partly as we now understand how the heat pumps operate within a system. It is also because those heat pumps are becoming more efficient and can work in different ways.

According to all our research, I think something like 86%—I say this from memory, although the percentage is certainly in the 80s—of households are compatible in terms of insulation with low-temperature heat pumps, and the percentage is in the high 90s for higher-temperature heat pumps. Partly, that is because the technology is changing and because heat pumps are more appropriate for many more households than perhaps is the perception.

Thank you, Minister and Mr Maxwell, for coming in. I am a Scottish Labour MP, so we are bound to disagree on something. Let me first damn you and then praise you, Minister. I noted earlier that, in response to the Chair, you said that tax matters were for the Chancellor, but this 78% energy profits levy on North sea oil companies is no longer a result of the Ukraine war; it is a result of your own dogmatic opposition to oil and gas, isn’t it?

No, I don’t agree with that. This decision is because the Chancellor faced really difficult challenges. Her job is to face the challenge of funding our public services, ensuring fiscal stability and doing everything she can not to raise taxes on ordinary families. As part of the balancing act that she had to do, she looked at the question of the windfall tax in the Budget, and I am sure that she will continue to look at it. That is why she reached the conclusions that she did. As you will know, she relies on OBR statistics on how much something like the windfall tax would bring in, but I can genuinely say to you that of all people, the Chancellor is very, very aware of the challenges that the industry faces in the North sea and the challenges posed by the windfall tax. If I may say so, you saw our pragmatism, because in relation to the area of licensing, we kept to our manifesto commitment but we have said that we will introduce transitional energy certificates to introduce so-called tiebacks, so that we can meet our second manifesto commitment, if you like, to keep existing oil and gas fields open for their lifetime.

Offshore Energies UK says that this will cost us £50 billion in lost investment, and Louise Gilmour of GMB Scotland—I declare my membership of GMB—says that it is costing us thousands of jobs. It goes beyond trade union subscription for me, because the guys who have kept my village alive for the last two generations are the North sea oil guys who put their lives at risk in the North sea, and their families made that huge commitment. I want to see them there for another two generations. Don’t you?

Yes. I do not underestimate the challenges that the sector faces from the windfall tax, and I do not want to minimise them, and I do not think the Chancellor would either. All I can say to you is that I know from my conversations with the Chancellor that she is fully aware of some of the challenges the sector faces. There are generous investment allowances as part of this, but I have talked to the industry a lot about this, and I recognise the issues they are raising.

In response to some of Melanie’s questions, you talked about the 20% premium for renewable jobs, but the truth is that a solar farm engineer will earn a third or a half less than a North sea engineer. Shouldn’t the clean energy jobs plan just come clean and say, “Yes, there will be jobs in renewables, but they won’t be earning the same amount as many did in the North sea”?

North sea oil and gas jobs are, rightly, highly paid jobs. My job is to do everything we can to raise the level of wages and improve the terms and conditions of the renewable sector jobs. Notwithstanding your point about tax, which is important and well taken, we know that the North sea industry lost something like 70,000 jobs in less than a decade under the last Government, so we know we need to plan for this future, and we know that clean energy offers a huge opportunity for that future. My job—this is why the work with the trade unions on the clean energy jobs plan is so important—is to work to raise those standards and improve those terms and conditions.

Thanks. Now let me praise you for your local power plan, which you announced yesterday; it is great.

I quoted you, so I at least deserve some praise.

Yes, you do. You described it as the start of a journey to a different place. Some of us are already there—in the Western Isles, we have 23 MW of community energy, and thank you for recognising that in yesterday’s statement. I heard what you said, Clive, in response to Mike Reader’s question about warehouse solar and how the Government have to connect it to the grid. The same is true for community energy. You talk about getting this plan off paper on to pylon. That means that community energy schemes need to get priority connection to the grid. I like what the plan says about tailored support for community energy, but the experience of my community is that they need priority support. Community energy schemes have to get to the top of the queue for connections if this is going to be a reality, don’t they?

I think it is worth letting the Committee in on the fact that you and I have had a number of discussions about this question, and, indeed, my special adviser has talked to you about this as well. I really recognise the point you are making, and I am meeting Jonathan Brearley from Ofgem this afternoon, so I shall make sure I raise this with him. How it is done can be debated, but obviously, we want community energy to be able to connect to the grid. If it is the case—and it is—that we are giving it much more priority, we need to carry that through into grid connection, among other matters, so that we make good on the ambitions.

You talked about us moving from community benefit to community share.

I was quoting you, actually, but yes.

It is a noble ambition, but it will require the Government to get into the wiring of community connections. Do you accept that, and will you apply civil service firepower to it?

I will let Clive come in; I am sure that he will happily do so. I do recognise that. It is worth saying why this is so important; it was in my answer to Wera as well. This changes people’s conception about ownership of energy. It is the idea that local communities can not only cut their bills but get a stream of income for the future and feel part of the creation of this future. We are in no doubt about the importance of it and your point is well taken.

Just to confirm—yes, the Department needs to be able to understand, in the same way that I talked about warehouses and things earlier, the complexities and practicalities for operators of different sorts of schemes.

Send your civil servants to the Western Isles—we can teach you all about it.

We are looking forward to our trip.

We will move on to some short questions for the remaining time. Before we do that, I draw attention to my membership of the GMB, which is in my entry in the Register of Members’ Financial Interests, as Torcuil mentioned it. I have a couple of questions before I hand over. You talked about the oil and gas training fund. We have heard similar challenges around gas engineers retraining to install not just heat pumps but a range of technologies and fabric in the warm homes plan. The challenge is that people lose money and time to retrain. Is this going to be picked up?

Sorry, could you explain the question again?

Gas engineers, who hopefully are part of the workforce for the warm homes plan, need to retrain. It costs them time and money. How will you handle that, and will you make sure they get paid equivalent rates?

As part of the warm homes plan, we have set up a workforce skills taskforce, which will be co-chaired by the TUC—the Trades Union Congress. It involves the GMB and others, and it is set up precisely to look at these questions—it goes to Melanie’s question as well—of how we make sure, particularly in relation to the warm homes plan, that we have the workforce we need. It goes back to my point about the much more intentional planned system that we have.

You just said that you are meeting Jonathan Brearley. A suggested question from us might be this. You alluded to RIIO-3 earlier. There is a pressure for costs to land on bills, particularly from the distribution network, as investment is needed. Are you going to be impressing on him the importance of avoiding that happening, or similar?

Avoiding?

Avoiding consumers having to pay the costs of the network expansion, especially given the conversation we had earlier.

The truth is that network expansion will need to be paid for, because if we don’t have network expansion, the constraint costs of us not being able to connect the renewable energy we need to people’s homes will go up. Network constraints will need to be paid for, but the job of the regulator—this is something I have emphasised to Jonathan a lot, and he recognises it—is to bear down as much as possible on those costs. It goes back to the question that Mike asked me earlier. We have inherited this system. The system of the TOs—transmission operators—is as it is, but that needs really tough regulation. That is in relation to both the TOs and the DNOs—the district network operators.

That did not sound like we are going to avoid the costs going on to bills, Secretary of State.

We always look at the balance, Chair, between the costs of building the network and where they fall, but part of my job is to be candid with you. Have we inherited a massive backlog of failing to build the network we need? Yes. We could decide to build a whole new fleet of gas-fired power stations, but that would also have costs. Chris O’Shea was saying this yesterday. We know that electricity demand is going to go up. If we are going to meet that demand, we have to build the network, and it will have to be paid for one way or the other. It is absolutely right that we look at what is a fair balance between public expenditure and bill payers in a way that cuts bills for individuals.

We have had correspondence about removing the carbon tax, and it came up in questions yesterday. The analysis that we have been given is that although scrapping the carbon tax would cost the Treasury £2 billion, it would save bill payers £7 billion. What is your assessment of that analysis?

We do not recognise those figures. Just to be really careful here, there are two things going on. There is the carbon price floor, introduced by George Osborne and frozen, and then there is the emissions trading scheme. The emissions trading scheme has been used by Governments of both parties—it has been in place for a very long time—to help decarbonise our energy system. It has actually done a really important job of helping to decarbonise our energy system. People can come along and say, “Let’s abolish it,” but of course they know that that is just nonsense. The reason it is nonsense is that we have the European Union bringing in a carbon border adjustment mechanism, so all it would mean is that any UK exporter would have to pay the carbon price to Europe rather than to the UK Exchequer. That is why the manufacturing industry, almost universally, have said, “Actually, we want to see linking with the EU emissions trading scheme”—the negotiations we are embarked upon—“because we think this is better for us.” It is all very well for Oppositions to be Oppositions, but we need a bit of realism in this debate about how the system works.

Great. I exploited my position as Chair a bit there. We will move on to Mike Reader.

Secretary of State, I want to pick up on a couple of things you have said. You have used some very careful wording around matters relating to your Department where, ultimately, the decision comes from the Treasury. In response to Torcuil, you talked about the Chancellor’s decision on windfall, and when you talked about the £150 off energy bills, you said that was the Chancellor’s choice. Did that idea come from your Department, or is it purely a Treasury mechanism?

Both together. I want to be clear about this: there is absolute, universal agreement on this. The cost of living crisis is the biggest issue families face. We made our commitments to cut bills deliberately because we recognise that, and we are determined to do it. The reason I highlighted the role of the Chancellor in this is that she took a really important set of decisions, the sort of which lots of people in the past had shrunk from. Indeed, lots of people would always say to me, “It would be great if the Treasury would agree to move some of the costs from bill payers to public expenditure, but of course it won’t happen,” and it is happening. That was the Chancellor’s decision, and it is one I fully support.

We had this in the previous session. A friend put it to me that you are doing exactly what the Opposition said you should do: you are cutting the green crap. You are cutting levies and putting it to cut people’s bills. That is an interesting way of putting the £150, but do you see that the argument could be made that you are essentially cutting levies to reduce people’s bills?

A couple of things. The current Opposition are saying we should just get rid of the renewables obligation and should not put it on to public expenditure, which of course is an absurd position because you would just be tearing up a whole set of contracts and no one would invest in the UK ever again, even if it was legally possible, which it isn’t. The Chancellor has found a way to say, “What is a fair way of balancing these costs between the taxpayer and the bill payer?” and she has made a big shift. No one had done that before, and she deserves massive commendation for having done it.

Where is the promised hydrogen strategy?

It is coming. It is the subject of discussions within Government and within my Department. We recognise the importance of this, including to the industry. I know the industry will be feeling a degree of frustration about it. We have had projects under HAR1, such as HyMarnham Power, that are expected to begin commercial operations in 2026, but I know we have a lot more to do, and we are going to get it out as soon as we can.

We risk losing investment if we do not get it under way. Is it a month, a quarter, six months, autumn, Christmas—

I am not going to pluck a timetable out of the air, but we want to get it out as soon as—

It is not out of the air. It is under your control.

I know, but my experience of Government is that if you set a timetable, you have to meet it, so—

Isn’t that what we want to do?

Exactly—that is why I don’t want to pluck a month out of the air. I recognise the urgency of this.

When the Climate and Nature Bill was introduced, you seemed to appreciate that climate and nature are intertwined. Are you concerned that the Government has lost sight of the nature half of that?

No. We recognise that we face a climate and a nature crisis, and that both are intertwined. When I made the statement in July last year about the state of climate and nature—it is something I will repeat this summer—it was precisely because we recognise the interlinked nature of these crises. I think it is entirely compatible to build new energy infrastructure in a way that is nature positive. Some of our reforms in relation to offshore wind, which have helped some of the consenting decisions, were done precisely because we recognise that.

Secretary of State, what is the Government’s view on hybrid heating systems? The Green Gas Taskforce has said that a system with a biomethane-fuelled boiler and a small heat pump is a cheaper alternative to stand-alone heat pumps for some 47% of homes, which have low energy efficiency. Do you agree, and what are you doing to embrace this new technology?

We do need to look at alternative technologies. If they are decarbonised technologies—obviously, biomethane has real potential—we should absolutely be looking at embracing them.

Does the consumer debt mountain worry you? Is your Department doing enough to tackle the billions and billions of pounds of consumer debt within our energy system?

Yes. It worries me most of all on behalf of the people who are in debt and are facing such difficult challenges. Obviously, it is an important part of maintaining the stability of the system. I know it is something that Ofgem is working on, and it is trying to find ways to get that debt burden down. One of the best ways of getting it down is things like the £150 off the cost of bills. Those are ways of making it easier for people to pay their bills and get out of the debt loop that many consumers are in.

Should we not be a little more honest with the public about the up-front cost of the energy transition? Yes, it is going to be a substantial cost, but energy will become cheaper in the future. Is that not a more honest way of looking at it—that the cost now is high, but it will be lower in the future? Is that not the narrative that we should get out there? We should be honest, because that is what it is.

Well, there are costs to be borne, but it comes back to the theme of the session: who bears the burden? Truthfully, we have two things going on. In order to get away from the rollercoaster of fossil fuels that we have been on, the right thing to do is clean power, which can cut bills. At the same time, we have to build the network infrastructure because of the backlog that we face and because of rising electricity demand. We are confident that they are compatible: we can cut bills and build the network infrastructure that we need. Things like the Chancellor’s decision in the Budget make that possible.

Further to Sir Christopher’s point, I want to ask you about the statement that Dale Vince, the CEO of Ecotricity, made in January this year about heat pumps. He said: “Despite widespread claims that heat pumps cut energy bills, the independent Censuswide survey paints a very different picture. Eighty-five per cent of respondents said their heat pump did not reduce their bills, while nearly seven in ten reported that their heating costs had gone up.” Why would we keep trying to encourage people to take up heat pumps if that is the effect that they will have on the costs that they face?

Dale has very strong views, which I do not agree with, on heat pumps. There are two things I would say. First, the truth is that even the people who advocate hydrogen in home heating recognise that heat pumps are going to have a very significant role in decarbonisation. We could stay on gas boilers forever, but we are not going to decarbonise our country if we do that, and nor are we going to have energy security. Given that, we have to cut the cost of electricity so that the electricity-to-gas ratio is such that the greater efficiency of heat pumps means that people can have lower bills. I have not referred to this so far, but that is why the Chancellor did not just take £150 of costs off bills, but focused that on cutting the cost of electricity, because the renewables obligation was levied on electricity. What she did was change that ratio quite significantly. Secondly, look, there are different surveys around, and our data suggests something different from what that data suggests. All the evidence I have seen says that on the right tariff, people can actually have lower running costs of heat pumps compared with boilers. That is part of our warm homes agency, so that people have the right advice in order to do that.

We have been told that the Department is going for redundancies of about 15% of staff. Is that accurate? Where does it leave your ability to deliver the agenda? Do you have concerns about your capacity and capabilities?

We are confident we can deliver our agenda. You will know that across Government there is quite a drive to reduce administrative costs, but I will let Clive add something.

As a Department, along with other Departments across Government, our administration budgets are falling over the period of the spending review by a little over 15% in real terms. We need to make sure that what we are doing as a Department can be afforded within the budgets that we have, so we will not be able to employ as many people in the future as we have now. Just to be clear, we are not running a redundancy scheme. We have in the year to date operated a modest voluntary exit scheme, which is a different sort of arrangement, and we have been telling our people over the last 24 hours about a plan to introduce a voluntary exit scheme for the financial year ahead of us.

Thank you for that clarity. I have been around quite a long time in organisations that have gone through redundancies, and one of the things that tends to happen is that the most experienced people leave. What are you doing to make sure that that does not happen?

In the way that you run a voluntary exit scheme, you look very hard at the people who are applying for that scheme and see whether they have the skills that you really want to hold on to in the organisation, and you make that part of your decision-making process.

It is not really voluntary if you are not allowed to leave if you are really good.

The difference from a redundancy scheme is that it is a voluntary thing to apply for. That is the key thing.

I understand. Thank you very much, Secretary of State and permanent secretary, for your evidence this afternoon.

Thank you to the Committee.