New legislation to spur UK’s switch to low-carbon economy
We’ll send you a myFT Daily Digest email rounding up the latest UK politics & policy news every morning.
New energy legislation to support the UK’s transition to a low-carbon economy will be put forward by the government in the next parliamentary session, according to Whitehall and industry figures.
The Queen’s Speech on May 10 — when the monarch is due to outline the government’s legislative agenda for the coming year — is expected to consist of about 20 bills, including measures on “levelling-up” left-behind areas, financial services and economic crime.
But a draft bill on long-promised reform by ministers of audit regulation and corporate governance has been dropped from the Queen’s Speech, according to government officials.
Although Boris Johnson, prime minister, on Wednesday promised an ambitious package of legislation, the question of how many bills to include in the parliamentary session has been the subject of fierce debate among cabinet ministers.
“People in Number 10 have been worried that we’re doing too much legislation and that a Conservative government shouldn’t be passing so many laws,” said one Tory official.
At the heart of the energy bill are proposals for a so-called future system operator that would sit at the centre of the UK’s electricity and gas infrastructure and co-ordinate strategic planning, according to people briefed on the legislation.
Where climate change meets business, markets and politics. Explore the FT’s coverage here.
Are you curious about the FT’s environmental sustainability commitments? Find out more about our science-based targets here
The creation of the body will effectively amount to a renationalisation of key responsibilities for managing energy supply and demand that have been carried out by National Grid since the company’s privatisation in the 1990s.
But the future system operator would also have an expanded role in helping to plan for the UK to achieve net zero emissions by 2050.
Ministers have set out plans to increase power generation from renewable energy sources while also dealing with an anticipated doubling in demand as more households switch to electric cars and low-carbon heat pumps.
The energy bill will also pave the way for a new financing model to support increased production of low-carbon hydrogen gas as a source of power for industry.
Subsidy contracts similar to those used to incentivise wind farm construction will be used to encourage heavy industry such as chemicals and steel manufacturers to use hydrogen instead of methane gas.
The legislation will also outline a financing model for the rollout of carbon capture technology which — ministers hope — should enable the UK to keep using gas-fired power stations for decades and help to cut emissions from big industrial centres in the north of England, Wales and Scotland.
The model is expected to be a so-called regulated asset base that involves a surcharge being placed on households’ energy bills.
The energy bill will also contain regulations that will extend the household energy price cap covering millions of families beyond 2023.
The Queen’s Speech will have at least five bills that the government was unable to push on to the statute book during the current parliamentary session, said people familiar with its contents.
These include bills on higher education, the HS2 high-speed railway and online safety.
Other legislation promised by the government has been shelved, including a bill that would have made flexible working the default option for employees and created a single enforcement agency on employment rights.
Some of the likely measures in the next Queen’s Speech
The government has not so far confirmed the legislation that will be in the Queen’s Speech, but the bills below are likely candidates.
An economic crime bill would bolster authorities’ attempts to root out illicit money and was accelerated following Russia’s invasion of Ukraine.
A financial services bill setting out a post-Brexit regulatory framework would seek to capitalise on new areas including cryptocurrencies.
A bill of rights would revise and replace the human rights act and strengthen the role of the supreme court.
A Brexit freedoms bill would make it easier to remove EU law from the UK statute book or amend it.
A levelling-up and regeneration bill would require ministers to report on targets to help left-behind areas and also include planning reforms.
An infrastructure bank bill will put the government-mandated infrastructure bank on a statutory footing.
A media bill will smooth the privatisation of Channel 4 and include reforms to the broadcasting legal framework.
A transport bill will create a new supervisory body for the railways called Great British Railways.
Get alerts on UK politics & policy when a new story is published