Draft Criminal Justice Act 2003 (Suitability for Fixed Term Recall) Order 2025
(1 day, 22 hours ago)
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The Committee divided: - Ayes: 11 / Noes: 6 - Question accordingly agreed to.
The Parliamentary Under-Secretary of State for Justice (Sir Nicholas Dakin)
I beg to move,
That the Committee has considered the draft Criminal Justice Act 2003 (Suitability for Fixed Term Recall) Order 2025.
It is a pleasure to see you in the Chair, Ms McVey. The Government inherited a prison system on the brink of collapse. The last Government added just 500 net places to our prison estate, while at the same time sentence lengths rose. As a result, the prison population is now rising by 3,000 each year and outstripping supply. When we took office, we were left with no option but to introduce a temporary change to the law that allows prisoners serving an eligible standard determinate sentence to be released on licence after serving 40%, rather than 50%, of their sentence in custody. That enabled the end of the dysfunctional and unmanageable end-of-custody supervised licence scheme, but we knew that it was just a first step.
Since taking office, this Government have delivered almost 2,500 prison places, and in the most recent spending review, we committed a further £4.7 billion to open 14,000 more by 2031. That will be the largest prison expansion since the Victorian era. That longer-term investment is necessary but not sufficient in itself to avoid the capacity issues that have faced the criminal justice system for so many years. In May, the Lord Chancellor announced that the adult male prison estate in England and Wales was projected to run out of places in November of this year, and that, alongside our long-term building strategy in sentencing reform, urgent measures to change the use of recall would be needed to ensure that we do not run out of cells, and so avoid a breakdown of law and order.
Last October, we commissioned the independent sentencing review, led by the former Lord Chancellor David Gauke, to find sustainable policy solutions and ensure that no future Government are ever again in a position where there are more prisoners than prison places, and are forced to rely on emergency relief. That is not an acceptable position for any Government to find themselves in. The review suggests that recalls should be rare and that, as a last resort, we should replace standard and short-term recalls for those on standard determinate sentences with a 56-day fixed-term recall. The Government have in principle accepted that recommendation, which requires primary legislation to be implemented. A Bill will soon be introduced to implement many of the review’s recommendations.
While the sentencing review offers us our path to ending the capacity crisis in our prisons for good, it will take time to take effect. The impact of the sentencing reforms will not be felt before next spring, so we remain in a critical position until then. This Government are not prepared to stand by while we run out prison places. That is what the Conservatives did, and we will not make the same mistake. That is why we are taking targeted action on recall, which remains a significant driver of prison demand. The recall population has more than doubled since 2018, from 6,000 to 13,000 prisoners in March of this year, without a corresponding growth in offender rates. With more people in prison and supervised in the community serving longer sentences, recall rates are naturally higher.
When recalled, offenders serving standard determinate sentences can currently receive either a standard or a fixed-term recall. The length of fixed-term recall is set out in primary legislation, and it is set at 28 days if the sentence is 12 months or more, or 14 days if the sentence is under 12 months. It remains the case that the Probation Service will undertake an individualised risk assessment before any offender is released under this measure, regardless of the offence they commit, which includes the risk of physical, emotional, psychological or sexual harm, to inform their risk management plan and licence conditions.
Offenders face recall to prison if they breach licence conditions, such as tagging, curfew, protective orders or exclusion zones or if their risk escalates. Those not suitable for a fixed-term recall may currently receive a standard recall, under which they remain in custody until the end of their sentence, unless re-released earlier by the Secretary of State or Parole Board. Our latest data shows at least 48% of all recalls are fixed-term rather than standard.
The draft order will mandate the use of fixed-term recall in specified circumstances. It will apply to adult offenders serving standard determinate sentences of less than 48 months. I want to be clear: we are excluding from this policy offenders who pose a higher risk to others. That means the measure will not apply to offenders who are convicted of terrorist or national security offences, pose a terrorist risk, are managed under the multi-agency public protection arrangements levels 2 or 3—which includes certain violent and sexual offenders—are recalled in connection with being charged with an offence, or are under 18 at the point of recall. Those offenders can continue to receive a standard-term recall, with release subject to Parole Board or Secretary of State decision.
In all other applicable cases, a fixed-term recall must now be imposed. That would mean the provision of around an additional 1,400 prison spaces, thereby allowing us to avoid a critical capacity crisis in November, and the serious risk to the public that that would bring, until the new measures from the independent sentencing review come into force.
I know that concerns have been raised by Members of this House and important bodies such as the Victims’ and Domestic Abuse Commissioners about the potential impact of this measure on victims—particularly survivors of domestic abuse—and public safety. I assure the House that those serious concerns have been at the forefront of our considerations. The worst possible outcome for victims of crime is if we run out of prison spaces, as predicted for November. That would mean new dangerous offenders would not be able to be locked up, as the police would have to halt their arrest. This policy is designed to prevent that happening. The exclusions we have established are purposefully designed to capture those assessed as posing a higher risk, thereby ensuring that those individuals can remain subject to standard recall procedures.
Let me be clear: victims are central to the Government’s work. We are determined to support victims now and reduce reoffending so there are fewer victims in future. Current or potential risk to victims is always considered as part of release planning. Probation will impose appropriate licence conditions, such as tagging, curfews and exclusion zones. Any offender who breaches those conditions, or whose risk is considered elevated, can once again be recalled to custody. Victims who have opted into the victim contact scheme will still be notified and retain their statutory right to make representations in relation to the licence conditions imposed. For those not eligible for that scheme, established public protection practices remain, and police may still issue disclosures where there is imminent risk. Measures in the Victims and Courts Bill will enhance victims’ access to information about an offender’s release, strengthening confidence in the system.
If further information is received following a recall that the offender has been charged with an offence, or they are a terrorist, pose a terrorist risk or would be managed at MAPPA levels 2 or 3 on release, they may be detained for longer on a standard recall at the discretion of the public protection team at His Majesty’s Prison and Probation Service. Their re-release would then be determined by the Parole Board or the Secretary of State.
I assure the House that we do not take this decision lightly and we have made every effort to ensure that it is appropriately targeted, proportionate and mitigated. The extent of the draft instrument and its territorial application is for England and Wales. An impact assessment has been prepared and published for the draft instrument. It concludes that there will be an increase in demand for various services, including probation, community accommodation and electronic monitoring services. We have been working closely with partners nationally and regionally to ensure the impacts of the measure on services are well understood and manageable, and to ensure that they are sufficiently resourced to respond to the immediate and longer term. However, it also concludes that by taking action we avoid the catastrophic consequences of doing nothing. We avoid a situation where trials would halt, arrests would be deferred and police forces strained.
I recognise that there are concerns about how an increase in the number of offenders being managed in the community will impact probation services. The Government inherited a Probation Service on its knees, and from day one, we have been hard at work getting a grip on the crisis.
It is vital that the Probation Service is properly equipped and resourced to deliver this change effectively. We are already making progress to rebuild the capacity of the Probation Service. We are committed to recruiting 1,300 trainee probation officers in 2025-26 to help meet additional demand, having exceeded our ambition to recruit 1,000 trainees in 2024-25. We are also reducing the administrative burden on probation officers by investing an initial £8 million in pilots of new technology. That will allow probation officers to focus more of their time on higher-risk offenders, for whom closer supervision is needed to reduce the risk they pose.
The Government have committed up to £700 million of additional funding to probation services by the final year of the spending review period, which is a funding increase of around 45%. That will mean thousands more tags, more staff and more accommodation to ensure that offenders are supervised and supported more closely in the community. Probation capacity will continue to be closely monitored as the new measures are introduced across the service. The Ministry of Justice carefully considers any policy changes with operational colleagues and workforce modelling teams. A transformation programme is also under way that aims to ease workload demands and to streamline processes for probation staff.
The draft order is necessary to avoid an imminent capacity crisis. It will free up enough prison places in as safe as possible a way to ensure the criminal justice system can continue to operate effectively until the implementation of longer-term reforms.
Dr Kieran Mullan (Bexhill and Battle) (Con)
It is a pleasure to serve under your chairmanship, Ms McVey. The draft order will amend the criteria for determining whether an offender recalled to custody should be eligible for automatic release after a fixed term. It has been framed as a pragmatic response to prison overcrowding, but in truth, it is a short-sighted and potentially dangerous change that prioritises expediency over safety and reactivity over long-term strategy. Let me be absolutely clear that this is not a procedural tweak but a significant recalibration of how we manage and record offenders.
The draft order would mandate fixed-term recall—automatic release after 28 days—for the majority of offenders serving under four years, so long as they are not managed under MAPPA level 2 or 3, they have not been charged with a new offence or they are not linked to terrorism or national security. We cannot possibly support that step. There are 67,000 registered sex offenders in the UK, and 95% of them are managed at MAPPA level 1. More than 63,000 registered sex offenders would now automatically be released from prison outside of very limited circumstances.
Such a sweeping change to recall policy, which would affect a large and potentially serious cohort of offenders, raises concerns about public protection and undermines the careful balance that recall decisions are meant to strike. In 2023-24, 45% of recalled offenders were deemed too unsafe for release by the Parole Board, yet under these new rules, many of them could now re-enter society without proper assessment; it is absolutely imperative that the Minister explains how many of those offenders would have been let out if these rules were in play at that time. The chief inspector of probation, Martin Jones, has warned that the policy risks creating a bounce-back effect whereby prolific offenders are released for up to 28 days, then recalled again repeatedly without the root cause of their behaviour being addressed.
These are not edge cases. The policy will apply to criminals serving sentences of up to four years, including those convicted of serious sexual and violent offences who, under the current arrangements, might have remained in custody pending robust risk assessment. Victim safety, public protection and community confidence demand far more than blanket rules, and the draft order exposes us to unacceptable risk. It makes a fundamental change that will create capacity at the expense of victims and public safety.
Let us dwell for a moment on the human consequences: by mandating automatic release after 28 days, the draft order strips away an important layer of risk management. We know that many offenders breach licence conditions not just on a mere technicality but with behaviours that signal a resurgence of their threat. That threat is particularly clear in cases involving domestic abuse. Domestic abuse charities and campaigners have raised deep concerns about fixed-term recalls being applied in this way, and last month Victims’ Commissioner Baroness Newlove stated:
“Victims will understandably feel unnerved and bewildered by today’s announcement. The cumulative effect has been to corrode confidence in the justice system and undermine victims’ sense of security.”
Ellie Butt, head of policy and public affairs at Refuge, warned:
“Refuge has consistently raised concerns about the serious safety risks posed to survivors of domestic abuse as a result of prison early release schemes…if a perpetrator were to breach”
licence conditions
“and be recalled to prison, they could be free to offend again in less than a month.”
The Domestic Abuse Commissioner, Dame Nicole Jacobs, stated:
“I cannot stress the lack of consideration for victims’ safety and how many lives are being put in danger because of this proposed change…Re-releasing them back into the community after 28 days is simply unacceptable.”
The Government will tell us they have no choice. Short-term thinking is jeopardising public safety. A couple of weeks ago, reports emerged that the Government have decided not to proceed with constructing new cells in an existing prison. Specifically, the Ministry of Justice has rejected long-standing plans to build a 240-place house block at HM Prison Gartree. They claim to be doing all they can to prevent early prisoner release, but how does that decision align with their attempts to increase capacity?
The Government will claim that there are not alternative solutions, but there are, such as tackling the remand population. As of March 2025, the number of people held on remand in England and Wales stood at 17,582, which is a full 20% of the total prison population, and still several thousand above the historical average. Those are people who are not yet convicted of any crime, and many may not ever be. Still, however, the Government failed to act on the Lady Chief Justice’s offer of additional court sitting days. Even now, sitting days remain available, but they have decided not to fund them. Every month they delay means more courtrooms left empty, more victims and defendants left waiting, and more pressure piled on to the system.
What about probation? The impact assessment for the draft order concedes that it would “increase the workload” on the Probation Service. That is an under-statement. In reality, the order would transfer pressure from the prison estate to the community, demanding that probation officers, already overstretched, manage a sudden influx of higher risk, less thoroughly assessed offenders. There has been a decrease in the absolute number of probation officers in the year up to March 2025, at a time when the Government are pledging to expand probationary services. The impact assessment says that will
“increase demand for probation services as offenders will spend more time on average on licence being supervised”
in the community. When do the Government expect to increase the total number of probation officers in a sustained way? How much of the additional funding in the spending review was allocated to this policy?
There are further impacts on the police, as the impact assessment makes clear. Chief Constable Gavin Stephens responded to the spending review on behalf of the police chiefs, commenting,
“it is clear that this is an incredibly challenging outcome for policing. In real terms, today’s increase in funding will cover little more than annual inflationary pay increases”.
Police forces are already shouldering a substantial share of risk. As I said, approximately 95% of registered sexual offenders in England and Wales are on MAPPA level 1, and are usually managed locally by the police and Probation Service. We are adding an additional task to their workload.
The statutory instrument fails on multiple fronts. It ignores victims, it burdens probation and it makes the public less safe. It does not address the underlying causes, and instead we have a blunt tool, wielded in haste, in the hope that no one notices the deeper difficulties it conceals. For those reasons, we will oppose the order today.
Josh Babarinde (Eastbourne) (LD)
It is great to serve under your chairship, Ms McVey. Liberal Democrats recognise the acute pressure on our prison system. We recognise, see and feel, as do many victims and survivors across our country, that the last Government allowed our prisons to reach breaking point. Victims and survivors are paying the price for the way in which our criminal justice system has been crashed, but the draft order is a blunt, reactive tool that could undermine justice, due process and public safety, all for the sake of short-term expediency. By imposing an almost one-size-fits-all 28-day fixed-term recall for most individuals serving determinate sentences under four years, the policy strips away vital safeguards. The Parole Board’s ability to assess individual cases is effectively bypassed and replaced by administrative convenience. That is not justice; that is bureaucracy displacing public safety. Victims, survivors and our communities at large deserve case-by-case recall processes.
The order also fails to provide adequate protection for victims, particularly survivors of domestic abuse, which the Minister knows is completely intolerable to me. Despite exemptions for some of the most serious offenders, at MAPPA levels 2 and 3, too many high-risk individuals could slip through the cracks, as has been the case under the SDS40 early release scheme, which I have highlighted time and again in the main Chamber. The Secondary Legislation Scrutiny Committee in the Lords has rightly raised the alarm that victims could be placed in serious danger, raising concerns that the re-release of some violent or sexual offenders who might slip through the net puts
“their victims at high risks of serious harm or death”.
When the Government have a very noble mission to create safer streets, surely that cannot be permitted.
We believe in a criminal justice system that rehabilitates, not one that bounces from crisis to crisis. Rehabilitation should aim to reduce reoffending, not to accelerate the release of individuals who have contravened licence conditions without due assessment. It is not just Liberal Democrats who are saying that. For example, Women’s Aid has spoken powerfully about the need to reassess the provision, as has Refuge, with which we have been working closely.
We support community-based alternatives to custody, such as investment in mental health and addiction services and a properly funded Probation Service, but not the dangerous shortcut that this draft order represents. The answer to overcrowding cannot be to cut corners on risk assessments or public protection. We cannot sacrifice justice at the altar of expediency, which is why the Liberal Democrats will oppose the draft order.
Sir Nicholas Dakin
I thank both speakers for their contributions to the debate. First, let me pick up on the points made by the Liberal Democrat spokesman, the hon. Member for Eastbourne, who was right to say that the criminal justice system crashed under the previous Government’s watch. That was our inheritance.
The hon. Member was also right to raise his concerns about the response being appropriate and safe. I can assure him that, given the alternatives we face, this will be a safe and appropriate way of proceeding. It is worth reminding ourselves that the recall population was 6,000 in 2018 and is now 13,600; it has grown exponentially. There is a need to create space in prisons in a safe and secure way so that we can lock up the dangerous people who need to be locked up. That is why we are taking this measure now, and it will be carefully and appropriately managed.
Where there are any issues of risk from individuals, they can be recalled at that point, and it is for the Probation Service to identify that. There are proper and sound bases in place to tackle the issue, but I thank the hon. Member for his constructive approach to this issue and for recognising that it is a challenge. It is a challenge that this Government are determined to meet in a safe and proper way that ensures that we can continue to lock dangerous people up.
That brings me to the speech made by the Opposition spokesperson, the hon. Member for Bexhill and Battle. As always, it was interesting and challenging, but it suggests that there is no recognition of his party’s contribution to the difficulties we find ourselves in. In essence, we have to take the hard decisions that the previous Government failed to take. If we take prisons as an example, 500 prison places were added in 14 years, compared with the 24,000 places added in the 13 years of the previous Labour Government. Already, more than 2,000 have been added in the first year of this Government.
We do not take lectures from the party opposite lightly; however, the hon. Member’s challenge is perfectly reasonable and proper. In the May of their last year in government, the previous Government brought in their parallel measure for the fixed-term recall for sentences of up to 12 months to create space in prisons. That is what we are being forced to do now, in a managed, proper and safe way.
Dr Mullan
I have one question for the Minister about the most important impact of the policy, and about the people who the Parole Board would otherwise say cannot be released in order to go home. What proportion of them will potentially be affected by this policy and will be let out?
Sir Nicholas Dakin
I do not think that information is—[Interruption.] The reality is that the Parole Board has so much to do that people have to wait a long time to get their parole hearing. That is one of the reasons why the prison system is essentially running out of spaces, and we inherited that from the hon. Member’s Government. We are having to roll up our sleeves and deal with the problem, whereas his Government just abrogated their responsibility. If they had taken the necessary actions, we would not be in the situation that we are now in. Frankly, it would be far better if we did not have to take these actions, but we do, in order to keep public protection in place, to keep people safe, and to be able to lock dangerous people up.
Question put.
Draft Contracts for Difference (Miscellaneous Amendments) (No. 3) Regulations 2025
(1 day, 22 hours ago)
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The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Kerry McCarthy)
I beg to move,
That the Committee has considered the draft Contracts for Difference (Miscellaneous Amendments) (No.3) Regulations 2025.
The regulations were laid before the House on 2 June this year. At the Global Offshore Wind conference this month, the Secretary of State for Energy Security and Net Zero reaffirmed our commitment to strengthening our energy security through the development of home-grown, low carbon power, while delivering a fair price for consumers. That is the best way to bolster our energy security, getting us off the rollercoaster of global fossil fuel markets. It is the best way to spark economic growth across the country, with hundreds of thousands of new jobs, particularly in our industrial heartlands, and it is the best way to tackle the climate crisis for today and future generations. That is why the Government are on a mission to make Britain a clean energy superpower, with clean power by 2030. The regulations will clearly contribute to that mission.
The contracts for difference scheme is the Government’s main mechanism for supporting new low carbon electricity generation projects in Great Britain. CfDs are awarded through annual competitive auctions, with the lowest price bids being successful. The sixth CfD allocation round—AR6, which ran last year—was the largest ever. It awarded contracts to 127 clean energy projects across Great Britain, capturing 7.2 GW of renewable capacity. However, we must ensure the continued success of the CfD. We must continually evolve the scheme to drive progress towards that 2030 clean power target, ensuring that it reflects the global challenges and opportunities faced by the renewables sector while delivering fair prices for consumers.
Building on our commitments in the clean power action plan, we plan to update the scheme, using the regulations, to continue our march towards a low carbon power system. First, the Secretary of State will be allowed to see anonymised bid information submitted to the National Energy System Operator for the allocation round before finalising the budget. In allocation round 6, there was unspent budget for fixed-bottom offshore wind, meaning that an opportunity was lost to potentially secure additional projects at a good price. Without addressing that issue, we risk not being able to take advantage of good value capacity deployment for Clean Power 2030.
Bringing forward renewable capacity at a reasonable cost will benefit consumers by moving the country away from volatile fossil fuel prices. A further amendment involves changing the budget publication process. As I mentioned, ensuring that we avoid budget underspend while continuing to protect consumers is crucial. Changing the budget publication process would allow the Secretary of State to set a budget based on anonymised bid information. That means that the Government can be certain that any capacity procured will advance our Clean Power 2030 ambition and be at a fair price for consumers.
To implement that policy change, we need to amend existing regulations to allow budgets for a CfD round to be published later in the allocation round process. We are also amending regulations to ensure that the costs of the clean industry bonus, referred to as the “sustainable industry reward”, are included in the Ofgem price cap. The first round of the clean industry bonus was run this year, applying to fixed and floating offshore wind, and it was a huge success. We have more than doubled the budget from £200 million to £544 million, leveraging up to £9 billion in investment into UK supply chains depending on AR7 results. That is an unprecedented amount of investment for our offshore wind industry. Never before in an allocation round has so much investment been earmarked for UK factories and ports, all in the poorest parts of our country.
The clean industry bonus sits within the CfD and is funded by the same levy on consumer costs. There needs to be specific provision in the relevant regulations that makes sure that the CIB is to be counted as a specific bill cost, as part of wider CfD costs. That is a technical change; all the rest of the CIB regulations are already in place. It will ensure that the price cap captures all the relevant factors that might affect it. The bill impact for CIBs is low: this year’s CIB round will cost consumers less than £1.50 a year for four years. What we get in return is a historic investment in our offshore wind industry.
To conclude, the consultation on these policy interventions sought views and supporting evidence on specific changes proposed for allocation round 7. We received a range of responses from across the industry, including developers, electricity traders and suppliers, as well as businesses operating in the offshore wind sector and consumer and environmental groups with an interest in the electricity sector.
Most respondents agreed with changing the budget publication process, improving the information available to the Secretary of State when setting budgets, and ensuring that CIB payments are included in the energy price cap. Respondents also provided input on how the Department should implement those policies. The Department continues to engage closely with industry on the development of the CfD.
Dan Carden (Liverpool Walton) (Lab)
The Minister mentioned UK manufacturing. I think it is really important that, as we seek to get towards a clean energy target and with these auctions going forward, the Government do far more to ensure that the production of wind turbines, for instance, is not just done abroad and imported, but involves UK manufacturing, providing decent, well-paid jobs up and down the country.
Kerry McCarthy
I could not agree more, and that is what the clean industry bonus is: it is designed to help foster those jobs through the manufacturing and supply chain. I am going up to my hon. Friend’s part of the world on Wednesday to see all that is happening in the bay when it comes to developing the energy resources of the Mersey. I am very much looking forward to that.
This instrument is another important step towards delivering clean power, shielding families from volatile gas prices and establishing the UK as a clean energy superpower. It builds on the existing success of the CfD scheme, evolving it to better reflect global market realities and to drive progress towards the 2030 clean power target, while protecting consumer bills.
Nick Timothy (West Suffolk) (Con)
It is a pleasure to serve under your chairmanship this sweltering evening, Mr Swayne.
Nick Timothy
Sir Desmond—I apologise; I will announce my resignation later this evening.
I am pleased to respond to the draft regulations for the Opposition. Under this legislation, the Secretary of State for Energy Security and Net Zero will be given new powers to view anonymised CfD bids before setting the budget for the next auction of contracts, due to take place later this year. That means that he will know ahead of time exactly how much will be procured if he sets the budget at a certain level, and therefore what the strike price will be. That poses questions about exactly how much the next round of CfD contracts—AR7—will end up costing the taxpayer.
Already, the process has been delayed. The previous allocation round was a record-breaking £1.5 billion, after the Secretary of State turned on the money machine. Everyone in industry—and, I suspect, Ministers too—believes that AR7 will be even more expensive. Ministers have made clear their intention to extend the CfD contracts to 20 years in an attempt to get strike prices down. Whether they succeed or fail in that respect, let us be clear about what it all means in the end: more expensive bills for the public—the very opposite of what the party promised before the election.
I note that the Minister, in her opening speech, talked again about the volatility of gas prices and repeated the soundbite about the rollercoaster of gas prices. I would appreciate it if, in her response to me, she explained why the Labour party has taken credit in its campaign materials for the reduction in bills caused by the fall in wholesale gas prices, when policy costs have actually increased.
Why are Ministers having to pump so much more money into CfD contracts? It is because of the Government’s ideological rush to decarbonise the grid within five years. That requires a massive expansion in wind power over the next two auctions, and the result will be higher prices forced on to households and businesses. We know that not just from experience and an understanding of how renewable technologies work, but because it has come from the horse’s mouth, too. Behind closed doors, a senior RWE executive has admitted that there would be “spikes in prices” and predicted that the “consumer risks losing out”. In other words, bills are going up. It would be nice if we could have such honesty from the Government.
This is the reality of net zero. Last January, a combination of dark skies and low wind—what has now become known as Dunkelflaute—brought Britain to the brink of blackouts. That was avoided only thanks to our remaining gas fleets, which the Government say they want to run down. The Prime Minister has promised categorically that decarbonising the grid by 2030 will not cause any power shortages, blackouts or energy rationing, yet unreliable solar contributed to a lack of inertia in the Iberian grid that could have prevented their power outages. In Britain, customers have paid over half a billion pounds already this year for power generated by wind, with which the grid cannot cope.
The OBR says that the costs of all these subsidies, and the hidden costs of renewables, will rise by 60% over the course of this Parliament. Wind is more expensive and highly unreliable, but the Government want more of it, instead of more reliable energy sources, such as gas and nuclear. I hope the Minister can take this opportunity today to explain in clear terms what this legislation will mean for the future of our energy system. Can she provide a date for when the allocation round 7 administrative strike prices will be published? Can she confirm that the budget will be kept as low as possible to keep strike prices as low as possible?
How will Ministers ensure value for money when they are trying to procure record capacity? Can the Minister tell us now that strike prices for offshore wind will be lower than those in AR6, and can she confirm that strike prices will be lower than the price of gas-powered electricity last year? If she cannot answer those questions, how can she possibly say that this legislation will cut bills? The public deserve the truth about how the Government are using their money to chase the ideological and the unachievable. Pushing policy to run faster than technology will allow, which is exactly what this Government are doing, will only lead us further away from genuine energy abundance, and leave our country not only poorer but less secure.
Kerry McCarthy
The shadow Minister went through his list of questions rather quickly. I will try to respond to some of his comments and answer a few of the questions, but apologies if I did not catch them all—I was trying to scribble away. We intend for the AR7 window to open on 7 August, and we will publish a final Government response very shortly, which will cover all the areas consulted on in March. On the administrative strike price, the shadow Minister cannot expect me to tell him now what the strike price will be. Ahead of every allocation round, we review our evidence base to ensure that it reflects the market environment. The administrative strike price for AR7 will be published ahead of the round opening—as I said, that round will open in August.
The shadow Minister talked about one of his favourite subjects: curtailment payments due to there not being grid capacity for wind. He will know, because he has been told this before in answer to previous questions, that we absolutely understand that issue, and we are prioritising increasing grid capacity to prevent it. Chris Stark, the former chair of the Climate Change Committee, is heading up mission control, and he is working every day—and possibly most of the night—to ensure that we give priority to the right projects in the grid connection. It is like towels on deckchairs; we weed out some of the projects that we know will never come to fruition, and we ensure that we invest in grid infrastructure so that we can make the most of the renewable energy being produced.
The shadow Minister asked why we are not investing in gas and nuclear. He has not been paying attention; he should know that there was a big announcement on nuclear. We are now also looking at small modular reactors. We have awarded Rolls-Royce preferred bidder status for that contract, which is attracting a lot of interest from around the world, to see if it can follow suit.
I am not sure it is worth our rehearsing the conversations about the cost of getting to net zero. I was going to say, “We are very much of the opinion”, but it is not an opinion—we know that the best way to bring down consumer bills in the long term is to get to clean power by 2030. We know that renewables will be cheaper for consumers and less volatile. Home-grown clean energy means that we will not be reliant on imported oil, gas and renewables. They are not only greener but faster to deploy and cheaper to build.
Jerome Mayhew (Broadland and Fakenham) (Con)
The Minister says that making the transition by 2030 will be the best way to stabilise and reduce prices, but even if we go full steam ahead with SMRs, or large nuclear replacement of the ageing nuclear capacity at the moment, none of that will be onstream by 2030. What does she suggest will be the baseload provider for periods where it is dark and the wind is not blowing?
Kerry McCarthy
It is a whole factor. There is solar, onshore wind, offshore wind, and increasingly storage. We have nuclear as part of the mix now, and we have said—
Kerry McCarthy
We have nuclear production in this country—[Interruption.] We have nuclear power as part of the mix. Obviously, the investment we have just announced does not come into effect for a while, but we have that as part of the mix. We have said that there will be 95% clean power with gas as a back-up if needed. We are not putting all our eggs in one basket by any means whatsoever.
Nick Timothy
One of the questions I asked was, why, given that the Minister and other Ministers keep talking about the rollercoaster of volatile fossil fuel prices, when wholesale costs fell, causing the price cap to fall, did the Labour party put out posters saying, “£129 off your bills delivered by Labour”? Will the Minister confirm that that reduction reflects the reduction in wholesale prices and has nothing to do with what the Government have done with policy?
Kerry McCarthy
I am not aware of that announcement, not least because I am not the Energy Minister—he is in the Chamber, making a statement about the oil refinery. But we are doing all we can to bring down consumer bills, and I think we deserve some credit for our efforts.
To conclude, meeting the Government’s commitment to the clean energy superpower mission, including clean power by 2030, will require a rapid and sustained scale-up of low carbon electricity. That will entail working with the private sector to radically increase the deployment of low carbon electricity, while at the same time protecting consumers. The instrument under discussion—in the loosest possible sense of the word, given how the debate has ranged over a number of other topics—is a step forward in achieving those ambitions; it supports the delivery of a clean power system, which shields families from volatile gas prices.
By amending the contract budget publication process and allowing the Secretary of State access to anonymised bid information, we will ensure that the previous underspend risks seen for fixed-bottom offshore wind are minimised, and the Government having greater certainty of outcome in the auction to procure more fixed-bottom offshore wind will allow us to make an informed decision on balancing capacity with costs to consumers.
The UK is a world leader in offshore wind, with 15.9 GW generating electricity. We have the highest deployment in Europe and are second in the world only to China. This policy intervention is another strong signal of the Government’s commitment to scale up deployment of fixed-bottom offshore wind to the benefit of businesses, bill payers and local communities. The instrument will build on the success of the CFD scheme—I will be polite and not mention how AR5 went under the previous Government compared with AR6 under us—adapting it in line with market and technological developments, and contributing to the UK’s crucial net zero targets and 2030 clean power mission. I commend the draft regulations to the Committee.
Question put and agreed to.