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Chris Ruane (Vale of Clwyd) (Lab)
It is a pleasure to serve under your esteemed chairmanship, Mr Paisley. May I also congratulate my hon. Friend the Member for Ynys Môn (Albert Owen) on securing this important debate? He coined the phrase “energy island” to describe his constituency. His dynamism and personal energy are recognised far and wide, in the Chamber and across Wales. In fact, I think if National Grid were to plug a couple of power cables into him, it could probably power the whole of north Wales—that might be painful, though.
My hon. Friend made a comprehensive speech, lasting half an hour—and thank God he did, because I think the debate will run short. He touched on many big projects, such as Wylfa Newydd and the tidal lagoon project for Wales, but also smaller projects, including small solar projects, Dinorwig pumping station and clean coal as a transition. It was a wide and comprehensive speech, and once again I congratulate him.
Wales as a nation is blessed with natural geographical and geological assets, which have contributed to the energy of these islands for centuries. Our coalmines supplied the energy for the industrial revolution; as we all know, the first industrial revolution in the world was in the United Kingdom. That energy was supplied from south Wales coalmines. They supplied the steel mills, the factories and the steamers that traded around the world. I pay tribute to the brave miners who dug black diamonds from the earth. As the saying goes, the earth does not give up its treasures lightly. Many miners lost their lives. In fact, there were 200 mining disasters and 6,000 men died. The first disaster was in 1766 and the last in 2011.
I pay tribute to the miners. The loyalty of and sacrifice by those brave men was rewarded by the previous Conservative Governments’ pit closure programmes in the 1980s and 1990s. The Minister may laugh, but the constituencies and communities affected are still suffering to this day.
The Parliamentary Under-Secretary of State for Wales (Guto Bebb)
There is this myth about the closure of mines by Conservative Governments. Will the hon. Gentleman confirm that more pits closed in Wales under the leadership of the Labour party, under Labour Governments, than under any Conservative Government?
Chris Ruane
The big difference between what occurred under Labour and under the Conservatives is that the communities were left high and dry under the Conservatives. It was a political decision to close those mines. It was spite because of the industrial action by the miners. That was the big difference, and those communities are still suffering today. I want to move on to more modern times, but I thought I would just give the historical perspective.
Chris Ruane
I will move on now, Mr Paisley.
We now live in greener, cleaner times, but the Conservative Government’s attitude to energy, and especially renewable energy, in Wales has not changed. I was privileged to open Wales’s first offshore wind farm—in fact, according to Wikipedia, it was the UK’s first major renewable power project—which was located off the coast of my constituency, off Rhyl and Prestatyn. North Hoyle was a pilot, test-bed project for this new industry in the UK. It had the full support of the Welsh Government, the UK Labour Government, the local MP—me—and Ann Jones, the Assembly Member. Can I ask the Minister whether he supported that project—the wind farms off north Wales—when it was proposed?
Guto Bebb
In relation to Gwynt y Môr, I was on the beach in Llandudno, insisting that the Gwynt y Môr project should ensure that there would be a local supply chain, and I am very proud of the fact that the further education college, Coleg Llandrillo Menai, is supporting the training of people to work on that site. The hon. Gentleman tries to score a cheap point, but fails again.
Chris Ruane
I am pleased that the Minister is able to say that, but as has been said, there were Conservative Members in County Conwy who did not support the project.
Chris Ruane
The leadership in Denbighshire was totally different, but again, we move on.
The North Hoyle project was an outstanding success, and I pay tribute to npower renewables, which has donated £80,000 a year since 2003 to local charities in the communities of Rhyl and Prestatyn. It was a blueprint for other renewable companies to embed themselves in those communities. Again, the support for these projects came from Labour politicians.
Chris Ruane
No. The Minister has had two bites of the cherry. He will have bags of time at the end as well; he can expand as he sees fit.
When the previous Prime Minister, David Cameron, was a candidate for leader of his party, he tried to curry favour in Wales. He visited the Tory party conference in Llandudno, pointed to the turbines outside in the sea and described them as giant bird blenders.
Chris Ruane
The Minister will have a chance to respond. David Cameron then went down to Notting Hill and put a giant bird blender on top of his chimney. [Interruption.]
Chris Ruane
It was an example of the way the Conservative party has crudely used renewable energies to change its image. As well as the wind turbine on the Prime Minister’s house, there was “Hug a Husky”, but we all know that it was superficial. As soon as the Conservatives got into power, the worm turned—the winds of change turned. The Minister will know that many in his party were climate change deniers. My hon. Friend the Member for Ynys Môn pointed out that some of them have come around, but there is still a deep, ingrained resistance to green, renewable energies in his party.
I would like to compare and contrast the position of the Conservatives with the support that Labour gave, both in the Welsh Assembly and in Westminster. Labour supported this nascent renewable energy, wind energy, and it was a great success. We are seeing the benefits of that support today—last week, in fact—with prices per kilowatt-hour tumbling as the economies of scale take hold, research improves and manufacturing costs are reduced. It was a sound investment then, and we are looking for sound investments now and in the future in renewable energies.
Labour attempted the same level of support for the solar industry in the UK. In 2009-10, we set feed-in tariffs, in conjunction with listening to Japanese and British manufacturers, at a level that would result in investment in and actual manufacture of solar panels in the UK—not in China, but in the UK, and specifically in Wrexham in north Wales. There was a plan by the Japanese manufacturer to build the biggest solar panel factory in the whole of western Europe, but when the Conservative-coalition Government got in, they reduced the feed-in tariff rates and the Japanese factory pulled out.
My hon. Friend the Member for Ynys Môn said several times that what these new industries, and established industries, need is continuity—certainty for the future. Industries that will require billions of pounds of investment need consensus and continuity, to ensure that their investments will be sound and solid and the plug will not be pulled on them with a change of Government or on a whim.
We see the same measures being employed right up to today with tidal lagoons. The Labour politicians in south Wales, the Labour Welsh Assembly Government, are engaging with those companies because they realise that of the six tidal lagoons proposed for the UK, four will be in Wales. One is proposed off the coast of my own constituency, off Rhyl and Prestatyn, and one is proposed off Conwy as well. I have had a briefing from the two companies that want to take the project forward. It will be fantastic: it will create jobs and tourism; it is futuristic; and it will have a road all the way round it. That is the type of project that needs to be supported by the Government.
I pay tribute to my hon. Friends the Members for Swansea West (Geraint Davies), for Swansea East (Carolyn Harris) and for Gower (Tonia Antoniazzi) and, even though he is from 200 miles away, my hon. Friend the Member for Ynys Môn, who talked about tidal lagoons in his speech because he recognises their importance.
There is the tidal pilot project planned for Swansea bay. That will be the first purpose-built tidal lagoon in the world and it needs extra care, nurturing and attention, because it could change the way energy is delivered or harnessed on the whole of the planet. That is worth investing in. The investment that we put into wind in 2003-04 looked as though it was a bad investment at the time, because it was at a high rate, but we are reaping the benefits now, 13 or 14 years later. That is the kind of long view that we are looking for from the Government for lagoon energy in the UK, because good things will flow from it.
I am talking about research, building skills and manufacturing expertise, and all those could be exported around the world. The Government have shown little enthusiasm for this sector, and it is beginning to dry up. There is lots of enthusiasm all over Wales and especially around the Swansea area. Can I ask the Minister a question?
Chris Ruane
He says I cannot, but I am going to ask it anyway. Will he declare his love for the lagoon? There is a local campaign called “Love the Lagoon”—it involves Conservative councillors, Conservative politicians and Conservative Members who are keen to expand that because they can see the benefit for their community. Does he love the lagoon—if that is not a personal question?
Let us look at some of the arguments that the Government have put or may put forward for weakening their support for tidal lagoons. Will they be saying that prices for wind power have dropped so much that it will make lagoons unviable? The success of wind energy is down to early political and financial support, and we want the financial support that we offered then to be replicated now by the Conservative Government to make sure that these proposals go ahead.
The Swansea lagoon, like North Hoyle, was a test bed—a pilot project to test the effectiveness of lagoons and to learn from that experience. The cost of funding the Swansea lagoon—the pathfinder—is equivalent to the cost of a pint of milk a day for every household in the UK. That is a sound investment, as far as I am concerned. If it works, we can expand it to Cardiff bay, Liverpool bay, Colwyn Bay and England, to make sure that we stay at the forefront of this great, new, green technology.
The Welsh Government have given their full support to tidal lagoons. Senior Cabinet Ministers from many Departments have met Charles Hendry and fully engaged with him. The Welsh Government have invested in the skills demand and supply report for the proposed Swansea bay lagoon development, and have provided a £1.25 million commercial loan to the tidal lagoon company.
Chris Ruane
Absolutely, there was cross-party support. I think that there are even Conservatives who support it down there. In the meantime, we have prevarication and procrastination by the UK Government on the matter of lagoons. Welsh Government Ministers wrote to their UK counterparts in April and June of this year, and I believe that the June letters have still not been responded to. Will the Minister look into that?
Tidal lagoons also have an added benefit in that they will protect the coastlines where they are located from flooding. Both Denbighshire and Conwy have suffered terrible floods. The Minister will remember the floods in the early ’90s in Sir Anthony Meyer’s old seat, Clwyd North West, in Conwy county. Five thousand homes flooded. We had floods as recently as two years ago in my constituency. There has been coastal flooding from waves and the sea. That would be prevented if we were able to establish these tidal lagoons off the coast of Wales.
Chris Ruane
That is the point that I am trying to make. They are about tourism, flood defence, manufacturing, skills and research. That is why Welsh Ministers from different Departments have engaged on the issue, and that is what we want to see from the UK Government. We want to see Ministers from the Department for Business, Energy and Industrial Strategy, the Department for Environment, Food and Rural Affairs and other UK Departments engaging positively with Charles Hendry, the Welsh Government and the Welsh Assembly to make sure that these projects go ahead.
One of the arguments made—perhaps not by the Minister, but by others—is that with wind power and solar power, the wind is not always blowing and the sun is not always shining. With tidal lagoons we can predict down to the minute when the energy will be created over the next 125 years. It is all down to the moon and the movement of tides. That could create a predictable baseline of support for our national energy mix, on top of solar, wind power and nuclear, so that we have a good baseload of support.
All these renewable energy sources also become more viable with the advent of batteries. The lagoon will produce energy throughout the night, and if that can be stored in batteries it can benefit the rise of the battery-powered car industry in the UK. I ask the Minister to take these issues way and to consider them carefully. Hopefully, cost will not be an issue. I believe that £700 million will be saved by the cancellation of the electrification of the Cardiff to Swansea route. Can some of that money—just a fraction of it—be used to prime the Swansea economy and to support it?
I move on now to Wylfa Newydd. At £12 billion, it will be single largest investment project in Wales over the next 10 years. It has the potential to transform the economy of not only Ynys Môn and Gwynedd, but the whole of north Wales. Again, the Welsh Government have been working flat out to secure this development. It is their No. 1 priority as far as the economy is concerned. Successful delivery will involve many Welsh Government Departments if we are to maximise the economic benefit and reduce any negative effects on the environment and culture in Wales, so there is total engagement.
Big issues need to be addressed, such as the new power station’s access to the national grid and the building of a third crossing over the Menai strait. All those ducks need to be put in a row before this project starts. Again, we are looking for engagement and consensus between the Minister, MPs and Departments in Whitehall and the Welsh Government. There are many stakeholders, including local authorities; the company itself, Horizon Nuclear Power; the North Wales Economic Ambition Board; and the national Government. There is a good mix of groups and organisations, and we need to gel them together to get this renewable energy up and running in Wales.
The Parliamentary Under-Secretary of State for Wales (Guto Bebb)
It is a pleasure to serve under your chairmanship this afternoon, Mr Paisley.
I congratulate the hon. Member for Ynys Môn (Albert Owen) on a wide-ranging, detailed speech, which is nothing less than I would expect from him. He has always shown a great interest in the energy sector in Ynys Môn, and his enthusiasm and hard work in Anglesey is well understood by myself, from both before I was elected to this place and since. I suspect that he was very pleased that in June the people of Ynys Môn acknowledged that hard work when they provided him with the largest majority that he has enjoyed since he was first elected to this place in 2001. I congratulate him on that comprehensive success.
I considered the hon. Gentleman’s speech to be very wide-ranging and thoughtful. It was made in his typical manner—he always tries to be consensual and cross-party in his approach. I believe that is one reason for his recent success. It is fair to say that some of the speeches then fell into party political point scoring. That is a great shame because, as many Members have said, there is cross-party support for energy developments and opportunities in Wales. There is cross-party support for the nuclear sector in Anglesey—perhaps not from all parties in all parts of Wales, but certainly from all parties in Anglesey. There is cross-party support for the concept of a small modular reactor in Trawsfynydd, and for the concept of a tidal lagoon.
It is important to deal with the issue of the tidal lagoon at the outset. People want a tidal lagoon to be developed at Swansea. They can see the potential of the technology, and that the lagoon offers an opportunity for economic regeneration in Swansea and other parts of Wales. All Members in this place should support that. As the hon. Gentleman and other Members have mentioned, it is important to ensure that we have a cost-effective energy supply, prevent fuel poverty and avoid a situation in which businesses struggle to compete internationally due to energy prices. I therefore make no apology that this Government have commissioned the Hendry review and are taking it seriously.
My point, as the hon. Member for Vale of Clwyd (Chris Ruane) conceded in his speech, is that the funding of a tidal lagoon is a complex calculation that must be done by Government. He is absolutely right that we do not have to go back to the floods that struck Towyn in my constituency, for example, to understand the importance of flood defences in north Wales; there was flooding in Deganwy fairly recently. The construction of a tidal lagoon has the potential to deal with those issues, but I argue that flood defences are a devolved issue, not an energy generation issue.
A complex set of calculations need to be undertaken. The hon. Member for Vale of Clwyd also said that the cost, equal to a pint of milk a day, was eminently affordable. A pint of milk a day is £3.50 a week, or £14 a month. Before being flippant about £14 a month, he should remember that not all pensioners in Wales enjoy the salary of an MP. I would expect a Labour Member, of all Members of this House, to understand that £14 is a significant sum on a pensioner’s bill.
Chris Ruane
If I did say £14 a month, I apologise. The figure should have been £14 a year; I hope that the Minister will take that in the spirit in which it was meant. Also, can he give us a date when the Government will respond to the Hendry report?
Guto Bebb
I believe that it was the hon. Member for Swansea West (Geraint Davies) who commented that good things are worth waiting for; that was certainly the case with the Welsh football team’s appearance at the European championships last year. I would rather have a good decision made in time than a rushed decision. This debate has highlighted the previous Labour Government’s decisions to invest in all sorts of concepts in Wales, but it is fair to say that by the time the coalition came into government, we were paying the price for how the Labour Government dealt with public money. It is much better to have a decision made on sound grounds, which is what we will provide, than an early decision.
Albert Owen
The Minister is engaging in the knockabout that he said earlier he did not like. What I was arguing in my contribution was that we must make difficult decisions and investments in first-of-a-kind technology, to get that technology going. We did it in solar and wind, and we are reaping the benefits; I believe that we can do it in tidal as well, and the review says so. We have a competent Minister in Charles Hendry, who delivered it. He knows his onions. What we are getting from this Government is prevarication and pushback.
Albert Owen
I am sorry, but I need to establish this. I have been trying to tie this issue into the electricity market reform and the mechanisms set up by this Government. The Hendry review fits into that. We have cost-effective mechanisms and capacity mechanisms. For joined-up thinking, we now need a decision from Government.
Guto Bebb
No, I will not take another intervention on this issue. I would like to move on to the main elements of the debate—the issues raised by the hon. Member for Ynys Môn. As he rightly said, there has been an element of political knockabout towards the end of this debate, but it is important to highlight that we in Wales have an opportunity to contribute significantly to the energy mix in the United Kingdom, and to lead on energy generation. To those hon. Members participating in the debate who commented that we have not provided that leadership or that opportunity, I highlight recently consented projects in Wales: the Brechfa Forest wind farm, the Clocaenog Forest wind farm, the South Hook combined heat and power station, the Hirwaun power station, the internal power generation enhancement at Tata Steel and the North Wales wind farm circuit connection, which has benefited both my constituency and that of the hon. Member for Vale of Clwyd. We have had the Brechfa Forest connection; the Glyn Rhonwy pumped storage system, also approved recently; and the Wrexham energy centre at the Wrexham industrial estate.
If we were to believe the comments of the Labour party—
Geraint Davies
On a point of order, Mr Paisley. Is it in order for the Minister to refer directly to a comment that I made about the Government’s prevarication over three or four years about the cost of energy, which has created massive uncertainty in the business community, but not to allow me to intervene on that point?
Ian Paisley (in the Chair)
You have made a point, but I do not believe that it is a point of order.
Guto Bebb
I highlight again, therefore, in response to the comments that this Government have not supported energy generation in Wales, that the facts speak for themselves. The opportunities for further development have been discussed by the hon. Member for Ynys Môn and other hon. Members. I turn particularly to Anglesey’s potential for nuclear.
I think that everybody who is committed to the economic regeneration of north-west Wales is aware of the potential in nuclear. The hon. Gentleman has been rightly applauded by colleagues from all parties for the work that he has done to ensure that the development of nuclear does not happen in a vacuum but is fully integrated into the further and higher education sectors. We in north Wales can only be proud of how the HE and FE sectors are investing, in advance of any decision on the nuclear station on Ynys Môn, in order to ensure that the economic opportunities that come along with it are available for local people as well. We should be proud of that integration. Similarly, he highlighted that renewable energy is a success story in Wales. One of those successes, as I mentioned in an intervention, is the way that the FE sector in north Wales has tried to ensure that work opportunities servicing wind farms off the coast are open to local people.
North Wales is taking an integrated approach. The Government—both the Wales Office and the Department for Business, Energy and Industrial Strategy—recognise that as a positive sign of an area that is looking constructively at how we can contribute to the UK energy mix. Nuclear offers great opportunities as well as great challenges. This Government are the first to have commissioned and agreed to a new nuclear power station, but that was also a long-drawn-out process, because the sums involved and the implications of the investment are significant. The same will be true of the new Wylfa Newydd. It is imperative, in my view, that we reach a successful conclusion. In Horizon, we have significant partners willing to work with Government, but the decisions have to be right.
As a Minister in the Wales Office, I am pleased. I take with a pinch of salt the view of the hon. Member for Ynys Môn that I should not be in my place today, but I would have attended this debate regardless. Since taking my position at the Wales Office, I have been pleased to visit the current Wylfa station before decommissioning started, I will be pleased to visit the new proposed site and I have been pleased to visit Trawsfynydd, because the Wales Office knows full well how the energy mix in Wales can contribute to our economic redevelopment. That is why so many Conservatives in south Wales support the lagoon.
The small modular reactor opportunity is also an exciting prospect. The hon. Member for Ynys Môn mentioned the cabling systems that will be required to transfer electricity from Wylfa Newydd; my understanding is that the potential site of a small modular reactor in Trawsfynydd already has enhanced connectivity to the national grid. I take seriously the opportunity to build a small modular reactor in Trawsfynydd, and I am pleased to say to the House that I will visit there on Tuesday with a Minister for the northern powerhouse. We understand that although the consequences of a decision on Wylfa Newydd or a small modular reactor in Trawsfynydd would benefit the economy in north Wales, they are far more significant than that. As hon. Members have said, they have the potential not just to transform the economy of north Wales—as other projects could in south Wales—but to have an impact on the wider supply chain within the United Kingdom.
Contrary to Opposition Members’ comments, the Government have invested in city region deals for Cardiff and Swansea, so I must ask why we are accused of ignoring the Swansea city region. One reason for the Welsh and UK Governments’ keenness to see a cross-border north Wales growth deal is the energy supply chains. The energy opportunities in north Wales are not confined to north Wales; they are dependent on cross-border connectivity.
Geraint Davies
In the short time available, will the Minister say whether he has any idea when the decision will be made on the lagoon—not what it will be, but when it will be made? Will it be part of the clean growth plan?
Guto Bebb
I apologise; I meant Swansea West. The hon. Gentleman should be aware that the Swansea city deal includes a number of projects, but the tidal lagoon is not one of them, although it has certainly contributed to the development of the city region. I would have expected him, as the local MP, to understand what was within the deal in question.
Ian Paisley (in the Chair)
Order. The Minister has not given way, as the hon. Gentleman knows.
Guto Bebb
Good.
I should also address the possibility of moving forward with the small modular reactor—as I said, we will visit Trawsfynydd very shortly—and the renewables issues that hon. Members have raised. Our track record on renewables is positive. I fully accept that wind farm costs have fallen quite significantly as a result of investments made, but I think the comments of the hon. Member for Vale of Clwyd about the success of our renewables project since we have been in government were unreasonable. There has been more than £52 billion of investment in renewables since 2010—not an insignificant sum.
As for expected energy generation, we are now on track to deliver 35% of the UK’s electricity demand through renewable sources. Far from being a failure, that is a success story that we should be proud of. I am surprised by the accusation that the Government have not been proactive in our investment within the renewables sector. The evidence points the other way. It is all very well talking about projections, but in 2015 we achieved 25% of energy generation through renewable sources.
These are successful outcomes of an integrated Government policy that should be supported. Their success is reflected in the fall in the cost of renewable sources of energy. Opposition Members talk about failure to support developments in Wales, but it is worth pointing out that 49,662 sites in Wales are generating renewable energy—another success story that we should be proud of.
That point brings me on to an issue raised by the hon. Member for Ceredigion (Ben Lake). I have not responded to him in this Chamber before, so I welcome him to his place. He is absolutely right that one of the success stories of north-west Wales has been community hydro projects. My constituency has a few such projects, and I know full well that there are similar projects in the constituency of the hon. Member for Arfon (Hywel Williams), who is not here today. Community energy projects are really exciting, because they generate electricity locally and give a financial benefit to the locality. The Government support such developments, which are crucial to our energy policy, but we need to highlight to the Welsh Government how they are taxed differently in Wales from in Scotland and England.
The Welsh Government have been very constructive on energy generation in many ways, but the taxes on community projects—on equipment used in small hydro plants, for example—are not beneficial to the development of further community projects. That can be contrasted with the situation in England, which is a result of the UK Government’s decisions, and in Scotland. The Barnett consequentials of the decisions made in England could be applied in Wales; certainly the funding has gone to Wales.
We have a good story to tell on renewables. It is a success story that has really touched the grassroots, but we need to make sure that it continues, and that requires action both from the Welsh Government and from Westminster.
I apologise that I am running out of time, but I would like to allow the hon. Member for Ynys Môn time to conclude. He mentioned marine energy opportunities beyond tidal lagoons. I fully understand why tidal lagoons have dominated the debate—the hon. Members for Gower (Tonia Antoniazzi), for Swansea East (Carolyn Harris) and for Swansea West have a real interest in the issue, as do Members throughout Wales, because we understand the potential—but there is a real opportunity for innovatively designed marine energy proposals in Wales. I know that for a fact, because I have visited potential developments off Holyhead and off the Pembrokeshire coast. This is an opportunity for new technology to be developed to put Wales at the forefront of renewable energy opportunities.
The Government are looking carefully at these issues. We want to be supportive, which is why I have visited sites in Pembrokeshire and Ynys Môn and met Anglesey developers. We want to see renewable technologies operating in Wales, but within the context of an energy policy that is fair to the consumer and the business user and supports the development of the energy sector in Wales and the job creation that goes with it.
I thank the hon. Member for Ynys Môn again for bringing the matter to our attention. I apologise if I did not respond to every issue he raised, but 15 minutes is 15 minutes, and I am more than happy to write to him with further guidance on any specific issues. To hon. Members who are concerned about the wait for the tidal lagoon decision, I say that the Wales Office continues to argue strongly for that decision to be made, but—as has consistently been stated—it must be right for Swansea, for people who support the tidal lagoon there, and for our energy policy and its costs. That is the decision that the Government will deliver in due course.
Ian Paisley (in the Chair)
At the beginning of the debate I thought we might run out of speakers. We clearly did not; Members were very energised. Will the Member who moved the motion, the hon. Member for Ynys Môn (Albert Owen), give us a two-minute wind-up?