Viscount Trenchard (Con)

My Lords, I declare my interest as a member of the advisory board of Penultimate Power UK Ltd and as a consultant to Japan Bank for International Cooperation. I congratulate the noble Lord, Lord Krebs, on obtaining a Committee stage debate for his Bill. I recognise his consistent efforts in raising environmental and climate issues in this House, although I may not always wholly agree with him and sometimes question whether his approach is proportionate. I regret that the obsessive determination of both the last Government and this one to eliminate fossil fuels too quickly, particularly gas, has ensured that the cost of providing electricity to industrial users is now the highest in the world. For example, household electricity in the UK is 42% more expensive than in France and 169% more expensive than in the United States. As for industrial electricity, UK prices are two and a half times as much as the equivalents in both France and the US. The comparisons with France are important because French electricity is generated 70% or more from nuclear and the UK grid depends for around 15% of its supply on imports, much of that from France. I did not speak at Second Reading on 18 October but the contribution to that debate by my noble friend Lord Blencathra is relevant to my amendment. My noble friend said: “Take Great British Nuclear, which was created in 2023, not 100 years ago. It has as its objects ‘to facilitate the design, construction, commissioning and operation of nuclear energy generation projects for the purpose of furthering any policies published by His Majesty’s government’. I do not think you can make a better contribution to net zero than that”.—”.—[Official Report, 18/10/24; col. 397.] My Amendment 2 seeks to exempt Great British Nuclear—weirdly and misleadingly renamed on Tuesday as Great British Energy-Nuclear, or GBE-N—from the duty to adhere to the environmental targets laid out in the Bill. I have argued before that to establish GBE as a separate publicly owned company from what is now GBE-N was a mistake and that it would have been much more sensible to have integrated GBE-N into GBE at the time of GBE’s establishment. I say that the renaming is misleading because it gives the impression that GBE-N is being brought under GBE’s umbrella. Perhaps the Minister can tell your Lordships what corporate or structural changes have taken place in either company as a result of the renaming. Noble Lords will remember that when we debated the GBE Bill many of us lamented the fact that GBE has been given £8 billion to invest in energy projects, principally wind and solar, whereas GBE-N does not have any committed funding to invest in nuclear projects. I move this amendment not out of disregard for the environment but from a desire to see our environmental goals achieved through pragmatic, economically responsible policy. The Bill sets ambitious and admirable goals but, in its current form, it risks entangling Great British Energy-Nuclear, a vital strategic body, in layers of environmental regulation that could unintentionally undermine our path to both net zero and energy independence. Nuclear energy is not merely an option; it is an economic and environmental necessity for this country. However, as many noble Lords will appreciate, the economics of nuclear are finely balanced. The upfront capital costs are at present extraordinarily high. Each new gigawatt-scale power station costs billions of pounds. We acknowledge that investors, both domestic and international, will certainly scrutinise every risk and additional burden before making a decision to invest. I welcome the Government’s decision to invest in Sizewell C, as such huge projects are always going to need public sector support. To subject Great British Energy-Nuclear to further regulatory obligations under the Bill beyond what it already faces from the Office for Nuclear Regulation, the Environment Agency and planning authorities would be to risk unnecessary cost inflation. It would create bureaucratic drag and, worse, it would signal to markets that the UK remains a difficult environment for major infrastructure investment. Let us be clear: nuclear energy is not on a level playing field with other low-carbon technologies. Wind and solar have enjoyed significant subsidy support over the past decade through contracts for difference, feed-in tariffs and other mechanisms. Nuclear, by contrast, is expected to finance itself under far more stringent conditions and is simultaneously capable of delivering baseload power that intermittent renewables cannot. Why is the consumer required to subsidise only intermittent energy sources but not nuclear projects? The result of that is that UK-developed new nuclear schemes suffer a massive disadvantage compared with UK renewable schemes but also compared with nuclear schemes developed overseas, which, fortified with massive subsidies from foreign Governments, particularly the US, are coming over here and driving out UK-originated nuclear schemes which cannot compete financially. Furthermore, nuclear is already held to the highest environmental and safety standards. From construction to decommissioning, the nuclear industry is subject to extensive regulation, scrutinised by multiple agencies and underpinned by rigorous science. It is misleading to suggest that this sector operates without accountability; to the contrary, it is perhaps the most tightly governed of all. I say this not out of a lack of concern for the environment but because we must think strategically. Nuclear energy is, after all, one of the cleanest forms of energy over the long term. Its carbon footprint is negligible and it plays a critical role in achieving a stable low-carbon grid. The Government have rightly committed to ramping up nuclear capacity, both through small modular reactors and new gigawatt-scale stations. But these ambitions must be matched by policy consistency. If Great British Nuclear is to fulfil its remit, it must not be hobbled by duplicative environmental targets that add cost without adding value. Furthermore, I remind the House that GBN is not a typical public body. It is a strategic delivery vehicle. Its success is measured not in reports or audits but in gigawatts connected to the grid. I propose, therefore, that we either exempt Great British nuclear entirely or create a more tailored framework, recognising the unique challenges and contributions of nuclear infrastructure. Our duty is to make Britain cleaner, safer and more secure. We must avoid binding the hands of the very institutions we have created to do precisely that. I urge the House to support this measured, targeted amendment and to ensure that economic realism and environmental ambition go hand in hand. I beg to move.