Fuel Poverty

Drew Hendry Excerpts

Tuesday 11th December 2018 Commons Chamber

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

I will rush through my notes because other Members want to speak, but we need more time for this kind of debate in the House, not the curtailed version we have tonight.

Far too many people are suffering cold and damp, in fuel poverty, and they should not be doing so. As my hon. Friend the Member for North Ayrshire and Arran (Patricia Gibson) pointed out, two of the most important drivers for fixing fuel poverty are reserved to this place: low incomes and fuel prices. Austerity has been one of the key drivers of fuel poverty for people across the nations of the UK. The UN special rapporteur has been mentioned tonight, so I will not cover that ground again, but he said that the

“manifestations are clear for all to see.”

Westminster austerity increases winter austerity for people.

[Patricia Gibson]

What my hon. Friend is saying is very important. I grew up in a household where the heating was never put on, and I remember trying to do schoolwork with my freezing hands trying to hold a pen. He has talked about the factors that drive fuel poverty. Does he agree that the high cost of nuclear will do nothing but exacerbate the high cost of energy, with the extortionate price rates involved hitting poorer families hard?

[Drew Hendry]

Indeed. I can only agree with my hon. Friend, and I will come back to that.

The key thing is that universal credit is driving the problems that people face in their houses. They have a genuine problem and have to endure pain in choosing whether to eat or put on the heating. That is not a cliché. It is a fact of life for people living in fuel poverty. Over the past five years and more, we have seen it in my constituency, with people suffering from the pilot of universal credit to its roll-out today.

The worst fuel poverty comes in areas of low income and, typically, rural areas. Unemployment levels are almost irrelevant when it comes to universal credit. The measures that the Chancellor introduced in his Budget do nothing for those already struggling on universal credit. They do nothing to reverse the cuts and nothing for those who are caught by the odious rape clause. Indeed, they do nothing to address the benefits freeze—even the transition funding will not come into place until next year. The Resolution Foundation has pointed out that the benefits freeze will cost low-income families £210 in 2019-20. Those are poor people, women, ethnic minorities, children, single parents and those with disabilities.

Measures can be introduced to reduce fuel poverty—for example, on insulation. The UK Government cut grants in 2015, and as a result, new insulation dropped by 90%. The new ECO programme is cautiously welcomed, but as green think-tank E3G pointed out,

“At least twice as much support is needed for low income households who struggle with their energy bills.”

It went on to say that the Government of Scotland grasped the importance of energy efficiency and that, including ECO support, they

“invest four times and twice as much per capita respectively in low income household energy efficiency as is invested in England.”

Low-income households need energy efficiency, and they need that to be invested in.

The Scottish Government’s green homes network has helped thousands of people to stay warm and save energy. It is clear to everyone except the UK Government that new industries such as carbon capture and storage and hydrogen need to be invested in. After the betrayal of Peterhead, with that £1 billion project withdrawn, it will not cut it for the UK Government to replace that with 10% of the investment promised. These new technologies need proper investment.

The Energy Saving Trust said that Scotland is not only “leading the way” in energy efficiency but

“regularly outperforms the rest of the UK when it comes to slashing carbon emissions.”

On public and community ownership, Local Energy Scotland, the Scottish Government’s arm, is going forward with local energy projects and community and renewable schemes through the community and renewable energy scheme—CARES. However, Ofgem’s consultation seems targeted to hit homes and businesses that generate their own electricity. The aim, it says, is to shift the burden to others; those who use more will pay less, and those who use less will pay more. That disproportionately hits those in areas of high fuel poverty.

We need fair pricing. People who are living off the grid need to be treated fairly. We need an off-grid regulator, and we need to bring forward payments for off-grid people. In 2012, my former colleague Mike Weir MP introduced a private Member’s Bill, the Winter Fuel Allowance Payments (Off Gas Grid Claimants) Bill, to help bring forward the timing of winter fuel payments to enable people to purchase fuel at a time of year when prices were likely to be lower. Yet this is not regulated.

Ofgem seems more interested in protecting the energy companies. It has also refused to do anything about the differential that households, particularly those in Highland and other rural areas, pay in energy unit prices. In Highland, it costs 4p a unit more for people to pay for their energy than in other parts of the UK. An Ofgem spokesman recently said to The Press and Journal:

“Network companies face different costs for serving customers in GB regions, for both gas and electricity. Licenced network operators recover their allowed revenues, set by Ofgem under the”—

RIIO, or “revenue = incentives + innovation + outputs”—

“price control arrangements, from customers located within their licensed areas... This is a reasonable way to allocate these costs between customers. Ultimately it would be for Government to decide if changes should be made to these existing arrangements. Typical network costs are around 25 per cent (about £250) of overall energy bills.”

Ofgem is more interested in looking after the energy companies than those consumers who are actually struggling. We need a fair redistribution of these costs, which does not mean costs rising for other people, but actually brings down the level for those who are suffering in rural areas. There is poor value and there are poor services.

In Scotland, despite benefiting from its energy wealth, Westminster has left an energy system in which consumers are struggling to pay their bills. Despite the huge renewable resources—25% of Europe’s offshore wind—and oil and gas tax revenues of £350 billion since the 1970s, investment has been in failing and failed nuclear power. Wylfa, for example, is rumoured to be benefiting from £6 billion in equity and £9 billion in debt funding from this Government. It has a strike price deal that, at £77.50, is way above a fair rate—it is, indeed, below Hinkley’s eye-watering £92.50, but way above offshore wind’s £57.50—and who pays? The consumer—those in fuel poverty.

The Scottish Government are bringing forward their publicly owned energy company, and we look forward to seeing the benefits of that. I will wind up soon, Madam Deputy Speaker, but you must understand that there is a lot of ground to cover in this debate, and we have been given very little time for everybody to do so. We look forward to bringing forward a publicly owned energy company to reduce bills for people in Scotland and to help them out of the poverty trap of fuel poverty, low wages and the crippling application of universal credit and austerity to people in their homes and across our communities. It is time that the UK Government took some responsibility for this and took action to alleviate the pain that people suffer on fuel poverty.

Oral Answers to Questions

Drew Hendry Excerpts

Tuesday 20th November 2018 Commons Chamber

[Richard Harrington]

The Government want to finalise the future trading relationship with the EU as quickly as possible. My right hon. Friend the Secretary of State mentioned one alternative to achieve that.

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

In addition to the threat that leaving the EU poses to skilled manufacturing jobs, the Minister will be aware of the devastating news that Michelin plans to close its factory in Dundee, threatening 850 such jobs. Will the Minister work closely with the Scottish Government to ensure a future for that plant?

[Richard Harrington]

I reassure the hon. Gentleman that I have spoken to the company and I have sought assurances about support available to staff. The Secretary of State and I have spoken with the Scottish Government’s Cabinet Secretary for Finance, Economy and Fair Work and with the Secretary of State for Scotland. The Department is playing an active role in the Dundee action group.

[Drew Hendry]

I thank the Minister for that answer, but his Government can do one thing right away to give immediate and future help. The UK Government are currently £50 million short on matching the Scottish Government on the Tay cities deal. Is this to be, like Aberdeen, Inverness and Stirling, part of a near £400 million shortage of match funding and a failure of the UK Government on city deals, or will he do the right thing and fight for match funding to support Dundee at this challenging time?

[Richard Harrington]

As the hon. Gentleman knows, each deal with each city is an individual one based on the circumstances of that city. I see him regularly, and it would be a pleasure to meet him to discuss his constituency and the proposed city deal.

Nuclear Power: Toshiba

Drew Hendry Excerpts

Monday 12th November 2018 Commons Chamber

[Greg Clark]

I pay tribute to my right hon. Friend for his important work in re-establishing the civil nuclear industry in this country. He is absolutely right: it is not just investment gaps that cause problems; we lose the ability to train workers in that industry, and we are having to restart training nuclear engineers. In previous statements to this House, I have said that we have accepted the recommendations of the Public Accounts Committee about looking at new models for financing new nuclear. It is right that we should do so, and in so doing we will proceed with deploying new nuclear power in this country.

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

The Secretary of State should indeed have come to the House with a statement on this matter, because it demonstrates clearly that nuclear plants are not economically viable. Will this failure finally lead the UK Government to realise that they must scrap plans to set up new plants for the declining, dangerous nuclear sector? Will the Secretary of State now commit to ruling out increased subsidies to other nuclear developments?

With the inevitable impact on the UK’s ability to meet its carbon reduction targets, does the Secretary of State regret his Government’s decision three years ago to cut investment in green technologies vastly, for ideological reasons, including the infamous betrayal of the £1 billion Peterhead carbon capture and storage project? The latest failure of nuclear is yet more evidence that renewables, growing cheaper and more reliable, are the future of low-carbon energy. Will the Secretary of State now finally properly commit to investing in renewables, including carbon capture and storage, to avoid falling even further behind the rest of the world?

[Greg Clark]

There is no one more committed than I am to the role of renewables in decarbonising our electricity supply. In fact, I am proud that the UK has delivered the fastest rate of decarbonisation in the G20 in the last years. We have created more than 400,000 jobs —many of them in Scotland—in low-carbon businesses and the supply chain. Renewable capacity in this country has quadrupled since 2010, and 30% of our electricity comes from renewables. Our record on renewables stands comparison with that of anyone else in the world.

However, my belief is that we should have a mix of low-carbon energy sources, and it is important that we should have low-carbon power from nuclear as part of that mix. I am surprised that the hon. Gentleman does not recognise and pay tribute to Scotland’s proud nuclear tradition. Many people are employed now, and have been employed in the past, in nuclear—at Chapelcross, Dounreay, Hunterston and Torness. The former leader of the hon. Gentleman’s party actually wrote to EDF to request and support the extension of the life of Hunterston and Torness well into the 2020s, so that they could continue to provide those jobs and that power. The hon. Gentleman talks a different game from his party’s correspondence.

Draft Electricity and Gas (Powers to Make Subordinate Legislation) (Amendment) (EU Exit) Regulations 2018

Drew Hendry Excerpts

Thursday 1st November 2018 General Committees

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

It is a pleasure to serve under your chairmanship this morning, Sir David.

The Minister, with her usual aplomb, in a well-presented technical exposition of what is in front of us this morning, asked us to accept that everything will be okay if we just leave it at that. I do not intend to cover all the ground that has already been covered, and I will try to be much quicker and perhaps a little blunter in expressing my feelings about what is in front of us.

This is not just a technical matter; it represents another Henry VIII power grab, following the Brexit power grab. We have concerns about giving UK Ministers the right to amend EU energy transparency rules through the negative procedure. REMIT creates a very important framework for identifying and penalising market abuse in the UK and across Europe. That helps consumers, industry and other active participants to have confidence that wholesale energy prices are open, fair and competitive and are the foundations of an effectively functioning energy market. It is of paramount importance that those transparency rules can be changed only with full transparency. That should therefore require the positive procedure.

This is just another example of how Brexit will entail a loss of transparency and scrutiny. The proliferation of these extra bits of Brexit red tape belies a Government unprepared for Brexit. Brexit is creating more red tape, unlike what we were promised. It is totally unacceptable that Ministers expect us to hand over more powers when we have been very clear that, in our view, the powers that are already held by Ministers are not being used to benefit Scotland.

For example, nothing has been done on regulating off-grid heating oil and gas. Nothing has been done to challenge the extra unit price that people in the highlands and islands pay for their electricity. Nothing has been done, as we heard from the hon. Member for West Aberdeenshire and Kincardine (Andrew Bowie) yesterday, for oil and gas in the North sea. To quote him exactly, he said:

“Exactly; we have done nothing.”—[Official Report, 31 October 2018; Vol. 648, c. 987.]

Why would we want to hand more unsupervised powers to the UK Government? I am afraid we have to reject that proposition.

Budget Resolutions

Drew Hendry Excerpts

Wednesday 31st October 2018 Commons Chamber

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

The Prime Minister promised to end austerity. The Chancellor said it is “coming to an end.” The Budget proved simply to be yet another rebranding exercise. The Tories are good at making promises, but they are bad at keeping them. The Resolution Foundation pointed out that, to end all spending cuts through all Departments by 2022-23, the Chancellor would need to spend £31 billion. Ten years after the financial crash, nothing has changed. The Chancellor continues to balance the books on the backs of the poorest in society. And that is before we even consider the impact of Brexit, which, incidentally, merited only a passing mention in the Chancellor’s speech.

Household budgets face tougher times as Brexit goes from holding the economy in its teeth to biting down and spitting out those who can afford it the least. That is not an outcome that we want to see for people in any of the UK’s nations, but Scotland actively voted to avoid it. That is why we in the Scottish National party believe that the power over the future of the people of Scotland should be in their hands, not in the hands of a Government who are wilfully ignoring the wishes of the Parliament in Scotland.

The way in which the Government are playing their hand is making the case for independence for Scotland for us, but let us see whether they can at least do a few small things to make life a bit more bearable. We welcome the freeze on whisky duty, a perennial call from those on the SNP Benches, but the Government must now commit to ruling out the use of geographical indicators as a bargaining chip with the EU. Scotch whisky must remain fully recognised everywhere.

With the costs of the movement of goods and people facing increases owing to Brexit, the UK Government must work with the Scottish Government to fix the issues over the highlands and islands exemption and allow the transfer of air passenger discount to Scotland in a workable format. Incidentally, the Chancellor’s Budget contained a veiled threat to allow for a dangerous increase in that tax, which would further hit Scottish travellers. The UK Government must also ensure that EU funding will continue until the end of the current multiannual financial framework and that Scotland must not be worse off in any respect of those funding allocations. Crucially, they must respect devolution.

Freezing fuel duty is also to be welcomed, but what is not welcome is the freezing endured, especially by those on low incomes in the highlands and islands, who still get a red raw deal through higher electricity unit charges and unregulated off-grid gas and heating oil. When will they get fairness? When will they see the change that they deserve and need?

Despite attempts to rebrand the message—the Chancellor now calls austerity “financial discipline”—after a decade, Tory austerity is far from over. Instead it continues to be more dogma and neglect. In contrast, the Scottish Government are using their limited powers to build an economy of the future with measures to unlock innovation and drive increased productivity, and they would do even more if they had the power to do so.

Scotland’s 2019-20 resource block grant is down nearly 7%, £2 billion in real terms, compared with the 2010-11 figure. That is even after the additional funding announced. Even the £602 million headline increase fails to mention the £53 million of existing budget.

[Douglas Ross (Moray) (Con)]

rose—

[Drew Hendry]

I will allow an intervention in a while, but I must make some progress just now.

We have yet to see the refund of joint VAT due to the Scottish Fire and Rescue Service and Police Scotland. Where was the convergence uplift due to the Scottish farmers? Some £160 million that should be spent in Scotland was simply spirited away by Ministers for their own projects.

[Douglas Ross]

Could I go back to the hon. Gentleman’s point about the block grant? Does he agree that, between this year and next, the block grant for Scotland is up £866 million in cash terms and up £381 million in real terms? How is that a cut?

[Drew Hendry]

What the hon. Gentleman fails to understand is that, if you put £1 in but, because of the rising cost, take £2 out, that is a cut effectively. What we have seen is a real-terms cut—[Interruption.] I have to educate him. That is what a real-terms cut means. As he has raised that issue, let us highlight other real-term and actual cuts that Scotland has endured: £400 million, due through the previous regulatory agreement for railways; the city deals are £387 million short of the match funding that the Scottish Government put in; £53 million is missing for the NHS from this Budget; and the VAT for fire and rescue services and for Police Scotland, at £175 million.

[Patricia Gibson (North Ayrshire and Arran) (SNP)]

My hon. Friend has rightly pointed out that £175 million has not been refunded to Scotland’s emergency services through VAT. Does he agree that it is bewildering that this money has not been refunded given that—[Interruption.] The hon. Member for West Aberdeenshire and Kincardine (Andrew Bowie) is chuntering from a sedentary position, “You were told.” A special dispensation on paying VAT was given to academy schools in England, but not to Scotland’s emergency services.

[Drew Hendry]

My hon. Friend makes an excellent point.

[Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)]

When the figures for what Scotland has lost are totalled up, agriculture VAT comes to £1.1 billion; and there is the £1.9 billion cut from 2010. That is £3 billion in total. When we look over the Irish sea, we see Ireland with its 7% growth in the last year alone. Ireland’s economy has grown by £18 billion. The Irish are getting £4 billion more in tax. What is the difference between Scotland and Ireland? Ireland, which is independent, is £7 billion ahead of Scotland with the Tories in Westminster. If that is not a wake-up call, what is?

[Drew Hendry]

I am grateful to my hon. Friend for making that point. He points out exactly where the powers lie to make a real difference for people.

[Alison Thewliss (Glasgow Central) (SNP)]

rose—

[Drew Hendry]

I will give way one last time.

[Alison Thewliss]

Is my hon. Friend as curious as I am about the political influence on this Budget? Belfast has received £2 million from this Government for a fire fund, whereas Sauchiehall Street, which has suffered two recent fires, has not had a single penny from this Chancellor.

[Drew Hendry]

My hon. Friend makes the point succinctly about the way Scotland is treated on these matters and I thank her for that intervention.

This Government’s negligent actions have already drained our economy of much-needed, vital investment. The Chancellor failed to take the steps to support the economy and businesses. The Fraser of Allander Institute estimates that a hard Brexit could cost 80,000 jobs in Scotland between 2020 and 2030. Mark Carney told MPs in this building that Brexit has already cost households—families—up to £900 each. Again, there was no mention of that in the Budget. And we know why. The UK Government’s own figures have shown that there simply is no good Brexit, with a substantial hit to the economy, as a best-case scenario, running to a whopping 8% reduction in GDP. In context, that is a cost of £2,300 per person, per year by 2030. Even if the UK signs a free trade deal with the EU, Scotland’s GDP will be hit to the tune of £1,610 per person every year until 2030.

There was also a failure to support the oil and gas sector in the Budget. The UK Government have now taken more than £350 billion-worth of North sea revenues, and that is excluding, by the way, the supply chain, corporation, employment or business taxes, and we are supposed to cheer when the UK Government do nothing in their Budget for that industry, other than to float the idea of a tax increase and then say they are not imposing it, along with some vague verbal support for decommissioning. Where is the funding from the Secretary of State? Why has he not been arguing for the sector deal for oil and gas?

The Office for Budget Responsibility is stating that the outlook for oil and gas is showing a rise from £1.2 billion to £2.2 billion per year on average. Production statistics are up on 2014-15 levels by more than 23% and oil and gas sales values are up by nearly 20%. New fields such as Capercaillie, Achmelvich and Nexen’s phase two in the Buzzard Field underline the remaining potential. A study at Aberdeen University suggests an extra 4 billion barrels of oil from offshore, on top of 2017 estimates, yet the sector is still ignored. [Interruption.] Some Conservative Members are chuntering that the Greens will not like that. Let me tell them that, unlike the Chancellor’s passing mention or the green UK statement that came out, I intend to mention climate change in my speech. That neatly leads me on to say that the Government, having ignored the oil and gas sector, a sector vital for the coming decades—[Interruption.] I am going to make some progress. The sector is vital in the coming decades while we transfer to low and zero carbon. It is an utter disgrace. A sector deal must be brought forward now. It should include national hubs for underwater innovation, transformational technology and decommissioning.

Where was the UK Government’s manifesto pledge that committed them to working collaboratively with the Scottish Government for an ultra-deep water port for decommissioning? Oil and gas has always been a poorly discharged duty by successive Westminster Governments, complete with ministerial pinball and 20 energy Ministers in 20 years. This Government, however, are also falling asleep over their duties to climate change—

[Several hon. Members rose—]

[Drew Hendry]

I shall let Members in, but I want to make some progress.

We need, and will need, oil and gas for our future heat while we transition to low and zero-carbon fuels, but meeting the Paris climate change targets means real investment in the technology to manage that switch. Anyone with an ounce of sense knows that carbon capture and storage is a vital component to achieve targets that are so important to us all.

The Secretary of State said earlier that he would not let the lead on technology slip, but where was that when the carbon capture and storage programme at Peterhead was abandoned? We had the opportunity to become world leaders, to demonstrate technological advancement and, crucially, to get a head start in the transition and to have marketable expertise and technology to export. Instead, three years ago, a £1 billion rug was pulled from underneath the industry, its companies and the people of Scotland. It was nothing short of betrayal.

Now the UK Government are back talking up carbon capture and storage, three years later. However, they say that they can catch up with only 10% of the original budget—which, incidentally, is the same amount that they squandered on the preparation work for Peterhead. You could not make this up. It is nothing more than lip service. With a will, however, the Government could sort this. There are still opportunities, including at Grangemouth, but the longer the wait, the more difficult and expensive it becomes, especially to man-made climate change. The Government must now fess up, about turn and push the pedal to the floor, properly fund the technology and at long last live up to the Paris commitments.

[Angus Brendan MacNeil]

Does my hon. Friend get as frustrated as I do when he listens to the litany of failures from Westminster and realises the sums of money involved? Compare that with the sums of money following the growth in the Irish economy in the last year—£4 billion in extra tax revenue. They can do so much more with the powers of independence. We are shackled by the crew down here in Westminster, whose vision and imagination are so limited. All that they can do is cut and continue austerity. It is the same record at the same time—[Interruption.] Conservative Members should behave themselves, please.

[Drew Hendry]

I thank my colleague for making that point.

On the subject of new technologies, where was the serious investment in renewables research and development? According to Government answers, that sits at a paltry £51 million, which is a failure to commit to evolving technologies such as tidal, in which Scotland is a global leader. The Scottish Government have led the way in supporting tidal, and now the UK Government must work with them to explore where differentiation from the CfD—contracts for difference—process could be achieved to support this through to commercialisation.

[Several hon. Members rose—]

[Drew Hendry]

I shall give way in a moment, because I did promise to, but it will have to be very brief. I want to come to a conclusion soon.

The solar industry has been battered by this Government, and now must be the time to reverse the plans to end the solar power export tariff for solar homes, small businesses and community energy projects. Ending that would be pernicious. The Government appear willing to pour unlimited amounts of public money into only one policy, however: they are obsessed with new nuclear.

Reports suggest that the Tory Government will pump £6 billion-worth of equity and about £9 billion of debt support into the failing Wyfla project, where project costs are trailed at about £20 billion. Both that and the huge white elephant that is Hinckley C have strike prices significantly higher than those for offshore wind. The National Audit Office and the Public Accounts Committee warnings about value for money must be acknowledged. The public will be paying for those projects for decades to come, through higher bills. There was nothing in this Budget for the victims of green deal mis-selling.

[Kevin Hollinrake]

Will the hon. Gentleman give way?

[Drew Hendry]

Very briefly, if the hon. Gentleman does not mind.

[Kevin Hollinrake]

The hon. Gentleman is keen to ask this Government what they are going to do, but what are his Government going to do about the historically slow growth rates in Scotland? Scotland is still growing 30% more slowly than the rest of the UK. Why is he not asking his own Government to deal with those issues?

[Drew Hendry]

The hon. Gentleman says nothing about productivity levels in Scotland, which continually outstrip those of the UK.

The Institute of Directors and the SNP made a demand for a small and medium-sized enterprises support line to help them deal with Brexit. The Chancellor also failed to deliver that. Meanwhile, in Scotland, the Scottish Government help business with a £96 million investment to deliver the most attractive business rates package throughout the nations of the UK. Already, more than 100,000 businesses in Scotland pay no rates at all through the small business bonus scheme. Significantly, the Scottish Government are setting aside resources of £340 million to provide capitalisation for the Scottish national investment bank.

I wanted to talk about much more, but I shall cut a lot out to aid the process today. Before I finish, however, I want to cover the fair treatment of workers. Westminster has failed to end wage discrimination and give young people the real living wage. Young people are used to being short-changed by this Tory Government, as are those whose rights are infringed by the gig economy and unpaid work trials. In the SNP, we believe that a fair day’s work should result in a fair day’s pay.

Contrast the Chancellor’s failure with the success of the Scottish Government’s real living wage accreditation scheme, which ensures that more than 1,000 employers now pay the real living wage and that, as a result, nearly 82% of workers in Scotland are earning it—the highest level in the nations of the UK. Imagine what more we could do if we had the power in Scotland to do so. In the meantime, the UK Government must stop ducking their responsibilities on pay. These measures are not only about doing the right and fair thing; they aid the economy by increasing productivity and boosting revenue through tax takes to spend on services. If the Government will not live up to their responsibilities for fair pay, fair conditions and young people, we should have the power in Scotland to do so ourselves.

I shall end on two things. First, in city deals around Scotland, the UK Government have fallen nearly £400 million short of the Scottish Government’s investment—so much for the 50:50 partnership. The Chancellor came up £50 million short on the Tay region deal and failed to confirm 100% coverage of Scotland, as promised by the Chief Secretary to the Treasury—good at making promises, bad at keeping them. But of course that is nothing new. We saw that in the highlands with the Inverness and Highland city region deal, where the UK Government put in only about 20% of the funding—their £53 million dwarfed by the Scottish Government’s £135 million.

Healthy economies need healthy communities. This week’s Budget had one massive failure. That was the failure to deal effectively with the problem that is universal credit. It should have been halted, fixed and properly funded. Instead, like everything else, it only got lip service. After five and a half years, since the pilot to full roll-out in the highlands, we have seen the misery that people have had to endure. Despite all the begging, cajoling, demanding and asking of Government to listen, they failed to do so. They have made promises to people that they were unwilling to keep. It is about time that the Government took responsibility and sorted that out.

[Mr Speaker]

I call Sir Michael Fallon, who is not subject to a formal time limit, but I know that his natural courtesy will make it quite inconceivable that he would wish to address the House for longer than seven minutes.

--- Later in debate ---

[Andrew Bowie (West Aberdeenshire and Kincardine) (Con)]

I rise to speak in this Budget debate, concerned about the unfairness that this Budget has created in this country—concerned that for one part of the country, there remains no tax cut for hard-working people; concerned that in one part of the country, the measures unveiled to support our high streets and SMEs are not being replicated, extra measures to help young people on to the housing ladder will not apply and the potholes will remain unfilled. I speak, of course, of the north-east of Scotland, which suffers under a central-belt-biased, economically illiterate, ideologically dogmatic, anti-aspirational, anti-wealth-creation, anti-business, distracted Administration, who punish the strivers and the grafters while we in the Conservative party reward them. Nurses, doctors, teachers, policemen, entrepreneurs, small business owners, the people that get up at the crack of dawn to open the shops in rural Deeside or Donside and the guys and girls who take off from Aberdeen airport to spend two weeks offshore doing hard, sometimes backbreaking work to maintain our energy supply are punished and taxed more, simply by virtue of living in Scotland. They are the people who this Government—this Conservative party—are committed to supporting.

The SNP’s decision not to match our plans to raise the threshold for the higher rate of income tax means that hard-working people in Scotland will be £1,000 worse off than their counterparts south of the border—£1,000 worse off for doing exactly the same job in the same country. Well, the Scottish Conservatives say, “Enough!” Today, we call on the SNP Administration to match this Government’s commitment to those who deserve a break and pass on this tax cut to the Scottish people.

It is safe to say that, in terms of totemic industries in Scotland, fishing and whisky are probably up there. Add to that brewing, and it makes for quite a good Friday night. All the above are reaping the benefits of decisions made by this Government and in this Budget: beer duty frozen, spirits duty frozen, and for the fishing industry, as we look towards that sea of opportunity that leaving the EU will bring—remembering, of course, that the SNP would have us back in the common fisheries policy—we welcome the £10 million of investment from UK Research and Innovation.

Of course, by far the biggest industry for the north-east of Scotland is the oil and gas industry, and far from the doom and gloom espoused by the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry), the sector has made it clear to us that the UK Government’s support over the past four to five years has been crucial to ensuring its survival, as it was buffeted by the winds of dramatically fluctuating oil prices and the longest sustained downturn in the sector’s history. The £2.3 billion of support from this UK Government since 2014 has been welcomed—[Interruption.] I would love to hear it welcomed by the hon. Gentleman; perhaps that is what he is trying to say from a sedentary position. I am not sure. That support has been welcomed by an industry that has contributed over £330 billion to the British economy, that supports over 330,000 jobs across the United Kingdom and that has a supply chain worth nearly £30 billion, stretching into every nation and region across our islands—servicing domestic activities and exporting almost £12 billion of goods and services to other basins around the world. It is a shame that the Scottish National party does not support it as the Scottish Conservatives do. That is why I and the wider oil and gas industry and the subsidiary industry that I represent have welcomed this Government’s decision not to increase tax and welcomed its commitment to maintaining fiscal stability.

[Drew Hendry]

You have done nothing.

[Andrew Bowie]

Exactly; we have done nothing. That was what the oil and gas industry was asking us to do. They want stability. Indeed, Oil and Gas UK has stated that the fiscally stable regime implemented and overseen by this Government, combined with our support for the sector and the industry’s own huge strides forward in cost cutting, slashing waste and pooling resources, has made the UK continental shelf one of the most attractive basins in the world in which to do business—something that we would not know from listening to the hon. Gentleman earlier on.

This was a great Budget for the people and businesses of the north-east of Scotland. Oil and gas, spirits producers, brewers and the fishing industry have all benefited from this Government’s decisions.

In Scotland, we have two Governments, sadly, and the contrast could not be starker. [Interruption.] Well, it is sad in terms of who is in government in Edinburgh. One is a nationalist Government, governing for their own base, focused on the central belt, focused on raising taxes, punishing aspiration, creation division and fostering grievance. The other is a Unionist Government, governing for the whole United Kingdom, backing business, rewarding hard work and supporting growth and aspiration. One is focused on ripping up our country, the other on growing it and helping our people grow with it. That is what this Government do, and that is what this Budget does, and that is why I am pleased to back it today.

Oral Answers to Questions

Drew Hendry Excerpts

Tuesday 16th October 2018 Commons Chamber

[Greg Clark]

It would be disastrous. The value of exports from Scotland to the rest of the UK is £45.8 billion, compared with around £12.5 billion to the rest of the EU, so anyone who, like me, is interested in being able to trade without frictions should apply their own analysis to their own policy of pulling out of the UK.

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

Scotland’s financial sector has described the prospect of a no deal Brexit as “horrific”. Does the Secretary of State agree that to protect businesses and to stay in the single market and the customs union the resignations of the Secretary of State for Scotland and Ruth Davidson are a price well worth paying?

[Greg Clark]

I hope that the hon. Gentleman supports the Government’s determination to ensure that the integrity of the whole United Kingdom is guaranteed by the negotiation. He suggests that the consequences of no deal would be negative; of course they would. That is why we are doing everything we can, with increasing confidence, to secure a positive deal with the rest of the European Union. I hope he will support that.

--- Later in debate ---

[Claire Perry]

It is quite right to note that the wholesale price determines the overall energy price, and of course it goes up and down. That is why the price cap Bill that we have all supported introduces a cap, not a freeze. I am sure that the hon. Lady is as pleased as I was to welcome the roll-out of the protection for customers on prepayment meters. That cap is already in place. It is already saving those households tens to hundreds of pounds a year. Indeed, the extension of the cap to the vulnerable consumers group is required by the CMA report. I would like to see these protections continue. Of course, all customers who are on rip-off tariffs will benefit when the price cap Bill we all worked so hard for comes into effect this year.

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

Winter is almost upon us, yet those suffering most from fuel poverty in the highlands are still paying higher electricity charges than those anywhere else in the UK, despite living in a centre of energy production. When will the Minister act to end this electricity unit price discrimination, which is estimated to add £400 a year to the already high cost of rural living?

[Claire Perry]

The hon. Gentleman raises a point that is also often raised by MPs who represent other areas, such as the peninsula of Cornwall and Devon. There has always been a convention that because it costs more to deliver energy through conventional structures to those furthest parts of the UK, they bear a higher tariff. There is work ongoing, supported through BEIS innovation funding, to encourage self-generation and self-storage in many of the most remote communities—perhaps some of the things we have seen around the Orkneys with the hydrogen bus. The hon. Gentleman raises an important point. That is why the price cap Bill is so valuable and should be supported by all parties—because it caps energy prices for everyone in the UK.

Green GB Week and Clean Growth

Drew Hendry Excerpts

Monday 15th October 2018 Commons Chamber

[Claire Perry]

It is great to see a Kettering green GB champion on our Benches. My hon. Friend is right: so many of our communities are living this process. It is not some scary existential threat. People are living it. They experience renewable energy—or not—and do not see it as a huge imposition. So many of our towns and communities are committing to these sorts of sustainable initiatives. That is part of Green GB Week, so that people can come together, learn from one another and, frankly, get a pat on the back for some of the things that they have done.

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

The Minister rightly mentioned the need to use innovation and new technology in rising to this challenge, yet her statement had not one mention of carbon capture and storage, which is considered vital to reach the Paris treaty targets. Norway is pushing ahead. Germany is planning this along the Rhine. Does she regret the £1 billion betrayal of Peterhead and will she commit to restoring CCS funding levels to 2015 levels?

[Claire Perry]

The hon. Gentleman and I have had exchanges on this. He knows that we have committed £100 million from our current budget to invest in carbon capture, usage and storage technology. That money is being spent. We are working with several industrial clusters to work out how we decarbonise the power and get industry to put its emissions in there. Frankly, I was not the Minister at the time of the project’s cancellation, but we were going to spend £1 billion on decarbonising coal, which we no longer want in our mix at all, and we had not thought at all about how we would get industries in this area to put their emissions in. Since the pause of that competition, we have spent more than £300 million investigating our aquifers. They are the best in the world—offshore—and we will continue to explore how to do this in the most cost-effective way.

Oral Answers to Questions

Drew Hendry Excerpts

Tuesday 17th July 2018 Commons Chamber

[Greg Clark]

The hon. Gentleman makes an excellent point. There is the opportunity, through the auctions that have been so successful, for expansions to come forward and be proposed, but he should also be aware that, given the leadership that we have in this area, we are also leading in replacing blades and turbines when they come to the ends of their life. That is a very important source of jobs that will be available to the exports markets around the world as well.

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

Offshore wind has an excellent strike price of £57.50 per megawatt-hour, yet this Government’s dogma will see consumers locked into paying £20 to £40 more per megawatt-hour for new nuclear. If that was not enough of a hit on family budgets, it has been reported that the Government will use the public purse to let Hitachi off the hook for the cost of any safety breaches at its Wylfa nuclear plant. Is it not time that this Tory Government ended their obsession with outdated, expensive and risky nuclear and put the public and consumers first?

[Greg Clark]

It is always necessary to have a diverse source of energy supplies, and nuclear has made and does make a big contribution to that: about 20% of our current electricity comes from nuclear. That is very important for households and businesses, including in Scotland. Every new project has to be assessed as value for money for the taxpayer and consumers and that will continue to be a criterion that will be rigorously imposed.

--- Later in debate ---

[Richard Harrington]

I am very pleased to reassure my hon. Friend, who works so hard on this subject, that we continue to work closely with the Scottish Government on many industrial strategy priorities, including our support for innovation and business productivity. Regarding the review, work is under way across government to determine its scope. Clearly, our partnership with the Scottish Government will be essential as that progresses.

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

Scrapped subsidies for renewables, failure to support the oil and gas sector in its time of need, betrayal over the pledge to invest £1 billion in new carbon capture in Peterhead—now, the Government are seemingly poised to splash £15 billion more of taxpayers’ cash on outdated nuclear technology at Hitachi’s Wylfa plant. When will we get an industrial strategy that actually works for Scotland?

[Richard Harrington]

That is not the picture of the oil and gas industry that I know following a visit to Aberdeen, where I saw more investment, more Government support and more support in the area for this Government’s industrial strategy. I am a great admirer of the hon. Gentleman normally, but I think he must have read the wrong script for this question.

Nuclear Sector Deal

Drew Hendry Excerpts

Wednesday 11th July 2018 Westminster Hall

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

It is a pleasure to serve under your chairmanship, Mr Owen, especially since in such debates as this we often refer to developments in your constituency.

I congratulate the hon. Member for Copeland (Trudy Harrison) on securing this important debate. We have heard a lot of enthusiasm for new nuclear, but I will change that, because I do not share that enthusiasm. In fact, the Government have many questions to answer on their path towards new nuclear, in particular on new developments.

The disastrous Hinkley Point C project exemplifies the Government’s regressive energy strategy and lack of a long-term plan that could cost taxpayers billions. The project at Wylfa is no different: total project costs are unclear, but have been trailed to be about £20 billion—more expensive than Hinkley’s £19.6 billion—a figure that could rise with inevitable delays. The direct investment represents a reversal of decades of opposition to investing taxpayer money in new nuclear.

The Government must fulfil the Public Accounts Committee’s recommendation of a full value-for-money assessment before signing any deals, and they must consider the National Audit Office’s report on Hinckley Point C. Consumers already face the impact of a bad deal made by the Government. Hinkley Point is set to cost consumers a fortune because of the appalling strike price deal that the UK Government made with EDF. As a result of the bad deal, consumers are set to pay at least £30 billion over the 35-year contract through their electricity bills.

[Mr Ian Liddell-Grainger (Bridgwater and West Somerset) (Con)]

I apologise for being late, Mr Owen. I had a supply chain meeting.

I invite the hon. Gentleman to come to Hinkley C—I mean that sincerely. I will host him and I will show him around the site and what is going on at Hinkley C so that he can see on the ground what is happening there and at the National College for Nuclear. I think that it would give him a new perspective on the situation.

[Drew Hendry]

I am grateful to the hon. Gentleman for the invitation to Hinkley Point C, but seeing the construction and the rest of the work, however good the quality, would not change the fact that the deal is disastrous for the taxpayer. It is also unlikely to get any better, because we face paying for another failing nuclear project.

The strike price for the new project has been trailed at £77.50 per megawatt-hour, which is down from Hinkley Point’s £92.50 through UK Government support for capital costs. That figure, however, is still significantly more than for offshore wind at £57.50 per megawatt-hour, even including intermittency costs of about £7 per megawatt-hour. How can the Minister justify that cost to the taxpayer?

My second question concerns financial liability for nuclear power station safety. Liability for nuclear developers is capped at €1.3 billion in the event of a nuclear incident, as agreed in the Brussels and Paris conventions. An event such as the one at Fukushima, however, would cost hundreds of billions of pounds. Moreover, The Times reported that Hitachi “won’t pay” for nuclear accidents at Wylfa and that, according to Nikkei reports, some of Hitachi’s directors want

“safeguards that reduce or eliminate Hitachi’s financial responsibility for accidents at the plant”.

Hitachi has already had two serious safety breaches at its nuclear developments, one of which resulted in a $2.7 million fine by the US Government.

Decommissioning costs ate up around half the budget of the now disbanded Department of Energy and Climate Change after the liabilities for cleaning up old nuclear plants were in effect nationalised in 2004 and 2005, when British Nuclear Fuels Ltd and British Energy faced financial problems. At the moment Hinkley C’s decommissioning costs are estimated at between £5.9 billion to £7.2 billion. Dr Paul Dorfman notes that given that decommissioning costs have been consistently underrated, and the precedent set by the Government’s taking ownership of liabilities of these companies more than a decade ago, it is highly likely that the Government will be forced to shoulder further costs if Hinkley developers have a shortfall. Again, will the Minster give an urgent assurance that taxpayers will not be left liable for safety failures at the Wylfa nuclear plant? That is wrong headed, especially for Scotland.

The announcement comes at a time when the prices of offshore wind, other renewables and storage solutions have dropped dramatically. Let us remember that the UK Government made the shameful decision to pull the rug out from under their long-term carbon capture and storage scheme in Peterhead. By cancelling the £1 billion competition just six months before it was due to be awarded, after spending £100 million on it, they broke their own election manifesto promise and left Peterhead—a key candidate for support—behind. The decision left a huge and damaging legacy to investment incentives and consumer confidence in the UK. Their new idea for carbon capture and storage is not the £1 billion minimum required, but a tenth of that—£100 million—which equals what was already wasted.

While the UK Government continue to fail Scotland’s energy sector, the Scottish Government see carbon capture utilisation and storage—CCUS—as an important decarbonisation infrastructure requirement and essential climate change technology. Scotland remains the best-placed country in Europe to realise CCUS on a commercial scale. That is why the Scottish Government support the Acorn CCS project at St Fergus, which has also secured €1.9 million in funding. The Scottish Government have delivered an exceptional range of support for the oil and gas sector. They have delivered an increase of £270 million to the economy, jobs and a fair work portfolio, including an uplift of more than £194 million in the enterprise and energy budget to support entrepreneurship, construction and productivity. That additional funding contributes to investment of almost £2.4 billion in enterprise and skills through our enterprise agencies and skills bodies.

I could go on and give a lot more detail on the Scottish Government’s support, but I will welcome one thing that the UK Government did recently: introducing the transferable tax histories mechanism in the 2017 Budget. But why has that been deferred by at least a year, when it is a crucial time for industry? That incentive could have been used to realise long-life assets.

The Scottish Government are doing everything they can with a world-leading climate Bill and bold support for renewable energy. The Scottish Government’s forward-looking agenda puts Westminster’s to shame. The UK Government should do more to support oil and gas and far more to support renewables opportunities. They should not make this mistake with nuclear. It is high time that they abandoned their costly love affair with nuclear and instead focused investment that can make a real, positive difference for our environment, jobs and our economy.

[Several hon. Members rose—]

Leaving the EU: Airbus Risk Assessment

Drew Hendry Excerpts

Monday 25th June 2018 Commons Chamber

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

Airbus’s risk assessment is sobering news for those drunk on the fantasies of Brexit. Airbus has forecast “severe disruption” and “interruption of production” in the UK, forcing it to switch investment planning away from the UK. Airbus says that this is not “Project Fear” but a dawning reality. The fact is that business after business is shouting, “Brace, brace.” At the heart of this is the lack of any plan or any sense over the customs union from this Government. This, coupled with no sign of any agreement over the EU-US open skies arrangement, means that Airbus is taking flight while the planes it already has in service could be stuck on the ground here.

The UK Government’s disastrous plan to leave the EU customs union and single market risks 80,000 jobs by 2030 in Scotland. Will the Secretary of State provide details about how the Government will protect 8,000 jobs and £541 million of activity in Scotland indirectly supported by Airbus? What technical discussions has he had with Airbus and sectoral organisations on the impact Brexit will have on the industry? In the light of this, what policy changes, if any, will he take forward?

[Greg Clark]

The hon. Gentleman talks about the impact of Brexit. It may have escaped his attention that we are negotiating the terms of our future economic partnership with the rest of the EU. The representations that have been made by Airbus—as I say, directed at the UK but also at other member states and the Commission —are about what that future economic partnership should look like. I hope there will be a broad consensus in the House that it should be a regime that allows fantastic sectors and companies within them to not only continue to export in a just-in-time system in which any delay at the border undermines the business model, but also to expand production in a rapidly expanding market, not just in Europe but around the world. That is what we are negotiating, and that is the context in which Airbus has given advice to us and the other side of the negotiations.