Lord Sharpe of Epsom (Con)

My Lords, I am very grateful to the Minister for his detailed explanation, but it is difficult to consider this statutory instrument without reflecting on the circumstances that have made it necessary. The Government have presented these regulations as a modest and technical adjustment—an increase in the network charge compensation from 60% to 90%—but the scale of that increase speaks volumes. We are not dealing with marginal fine-tuning; we are witnessing the expansion of an emergency support mechanism designed to shield our most electricity-intensive industries from energy costs that have become structurally uncompetitive. If our electricity market were delivering affordable power to the productive economy, such levels of compensation should not be required. The Government’s own impact assessment, and my noble friend Lady McIntosh of Pickering, have acknowledged that, even after the British industry supercharger package, UK electricity-intensive industries will still face costs of around £93 per megawatt hour, compared with roughly £60 per megawatt hour in France and Germany. I go back to the impact assessment, because the first sentence is also extremely instructive: “Great Britain’s energy-intensive industries … continue to face some of the highest electricity prices in Europe, even after existing relief measures, due to higher network charges and policy costs compared to competitor countries”. Those two words, “policy costs”, are extremely instructive. These charges are the result of policy choices. A recent study by the Adam Smith Institute underlined the scale of the challenge. It showed that British businesses are paying nearly double the price of power paid by their French counterparts. The report identified as the most important factor in that disparity the United Kingdom’s reliance on what it described as “a combination of expensive renewables and a gas backstop”. The chief executive of the trade body Ceramics UK has said: “The relentless drive towards net zero is moving far faster than either kiln or fuel technology. Despite massive investment by the industry, achieving decarbonisation is extremely challenging and will lead to further deindustrialisation”. Of course, the impact assessment also refers to the decarbonisation issue. The Confederation of British Industry has warned that high energy prices threaten the United Kingdom’s standing as a manufacturing nation. Pointing to the competitive disadvantage faced by British firms—