Post Office: GLO Compensation Scheme
Grant Shapps Excerpts(1 year, 11 months ago)
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The Secretary of State for Business, Energy and Industrial Strategy (Grant Shapps)
With permission, Mr Speaker, I should like to make a statement about Horizon and Post Office group litigation compensation.
The Horizon scandal is nothing short of a travesty. Today, I turn to those who lost everything—those who were driven to bankruptcy and lost the savings for which they worked all their lives; those who were falsely accused and lost their good name in our country’s courts; those who were falsely convicted and lost their freedom in our country’s prisons; and all those who, having lost everything possible, then took their own lives—to say that we should not be here and it should not have happened. It should have been said years ago, and I want to say it today: I am sorry. I am sorry for those years of pain, of hurt and of anguish. I apologise unreservedly for any part that my Department has played, historically, in this miscarriage of justice.
The Post Office is a public institution. It exists to serve the British people. That the best of us, our postmasters, could be subject to such intolerable injustice does not bear thinking about. This is a wrong that can never be put right, but I hope that the steps that we are taking today will be of some comfort to those who have fought and who continue tirelessly to fight for justice. We want the postmasters who exposed the scandal through the High Court group litigation order case to receive similar compensation to that available to their peers. That is what is right, and it is what is fair.
On 2 September, my predecessor at the Department for Business, Energy and Industrial Strategy, my right hon. Friend the Member for Spelthorne (Kwasi Kwarteng), wrote to those in the group litigation order case to ask their views on whether the Department or the Post Office should administer the scheme, which will deliver additional compensation to those postmasters who originally brought the case to court, and what form they would like it to take. The majority view was that BEIS should deliver an alternative dispute resolution approach, using the information prepared for the GLO case, so that is the route that we will now follow. Over the past three months, a great deal of work has been done to develop the details of the scheme, drawing on comments made in the consultation. I am writing to members of the group litigation today with further information about how it will work.
For too long, our postmasters have been left to endure devastating financial hardship. I am therefore pleased to say that all Post Office and Horizon-related compensation payments will be disregarded for benefits purposes. Once the disregard is in place, payments received by postmasters will no longer count towards the capital limit for means-tested benefits and pension credits, and will therefore not affect their eligibility to claim for them. The Government will legislate to put that disregard in place at the earliest opportunity.
We are now asking claimants to work with their representatives on their claims. In parallel, we are working to engage alternative dispute resolution specialists and lawyers to deliver the scheme. Those experts should be on board in the early spring, at which point full claims can start to be submitted and assessed. I hope that compensation will start to flow before the summer and that most cases can be resolved before the end of 2023.
We have already announced that we will meet postmasters’ reasonable legal costs in claiming under the scheme, and to ensure that lawyers can get to work on preparing claims, we are announcing details today of the funding available to enable postmasters to access initial legal support. We will shortly be inviting claimants’ lawyers to make proposals for commissioning the expert evidence that they will need. I have placed a copy of my letter to GLO postmasters, together with a number of supporting documents, in the Library of this House and on the Department’s website today.
Finally, we will create an independent advisory board for the scheme, chaired by Professor Chris Hodges, an expert in alternative dispute resolution. Alongside Professor Hodges, the membership of that board will include Lord Arbuthnot and the right hon. Member for North Durham (Mr Jones), who are recognised by Members on both sides of the House for their many years of outstanding campaigning for the wronged postmasters.
We are honoured to have members of the GLO group with us here today, but I know that nothing we do now will ever put right the decades of wrong. There are so many who cannot be here today, some because they are no longer with us and never lived to see their dignity returned to them by those who stole it. To all of you, I say that I am sorry for these past historic injustices that you should never have suffered.
I commend my statement to the House.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
I welcome today’s statement and apology, which represent an important step forward in the delivery of justice following what may well be the largest miscarriage of justice in our country’s history. There have been 900 prosecutions. All the postmasters involved have their own stories of dreams crushed, careers ruined, families destroyed, reputations smashed, and lives lost. Innocent people have been bankrupted and imprisoned.
Let me start by paying tribute to the Justice for Subpostmasters Alliance, the campaigning group, and to the hundreds of sub-postmasters whom no monetary amount can compensate for the injustice that they have suffered. This has been a long walk towards justice, and Members in all parts of the House have stood and spoken out in solidarity with the postmasters. I want to recognise, in particular, my right hon. Friend the Member for North Durham (Mr Jones) and Lord Arbuthnot, who are rightly to be members of the independent advisory board.
I also pay tribute to the Minister who was previously formerly responsible for the Post Office, the hon. Member for Sutton and Cheam (Paul Scully). I do not do so lightly, but after successive Conservative Governments had sat on the scandal, he was the first to take hold of it and eventually—following much campaigning by Members of Parliament and members of the Labour party—to establish a statutory inquiry. Finally, I want to thank the journalist Nick Wallis, whose BBC Radio 4 series “The Great Post Office Trial” did much to bring this scandal to general attention.
While I am pleased that some kind of acceptable outcome for the postmasters seems finally to be in sight, I have some questions to ask. The press release refers to a compensation scheme for postmasters who helped to expose the scandal, but I remind the Secretary of State that it was his Government who spent years aiding and abetting the Post Office in targeting those self-same postmasters who were looking for justice. Nearly £100 million was spent by the Post Office to defend the indefensible as part of a campaign of intimidation and deceit. The Government are the only shareholder in the Post Office, so it is right for the Secretary of State to take responsibility.
At the core of this unforgivable scandal is the belief that workers were dishonest and technology infallible. Perhaps that is not surprising, given the Government’s track record on defending the rights of working people. Decent, honest people have had their lives torn apart, have been put in prison, and have been made to wait years for justice. Will the Secretary of State tell us how long he expects it will take for this scheme, and the other schemes, to pay the appropriate compensation, and whether the aim of these schemes is to return people to what would have been their original position had it not been for their involvement in Horizon? Will he also tell us which legal firm will be involved in the administration of this scheme, and whether that firm has previously advised either the Government or the Post Office on this matter?
Value for taxpayers’ money is a key consideration on this side of the House, even if the Government like to waste it. Having wasted tens of millions of pounds on persecuting postmasters, can the Secretary of State tell us where the money for the scheme will come from as we face a cost of living crisis made in Downing Street? Will post office services suffer, or will other budgets be cut? The press release does not mention the Justice for Subpostmasters Alliance or Alan Bates, who led its efforts. Does the scheme have their full support?
I hope the Secretary of State agrees that those who were involved in this injustice should not benefit from their involvement. Will he tell us how he intends to hold Fujitsu to account, and whether it is still being given Government contracts? Will he also tell us whether he supports the continued retention of the CBE that was awarded to Paula Vennells—who oversaw the Horizon scandal—for services to the Post Office?
The Post Office is a national institution. It is part of so many of our lives. Its reputation has been hugely tarnished by this scandal, and I hope the Secretary of State will tell us how he intends to ensure that this never happens again and that the sub-postmasters receive justice as soon as possible.
Grant Shapps
I am grateful for the hon. Lady’s comments, although I rather hoped the House would come together today and debate this matter in a non-political, cross-party way, and she sought to make a number of, I think, somewhat inappropriate political points. I should gently point out that it was her party that was in power for the first 11 years of this scandal. I am pleased that we have worked across parties to fix it, and I think we should leave it there.
Earlier today I spoke to Alan Bates, the founder and leader of the Justice for Subpostmasters Alliance, who is sitting in the Public Gallery. Obviously the members of the JFSA will speak for themselves, as they always have, about the extent to which they are satisfied with today’s statement, but we have been working closely together. The Minister for Enterprise, Markets and Small Business, my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake), has been meeting them as well, and will be keeping a close eye on the operation of the scheme.
I reiterate the hon. Lady’s comments in thanking not just the right hon. Member for North Durham (Mr Jones) —as I did earlier—but my hon. Friend the Member for Sutton and Cheam (Paul Scully), Lord Arbuthnot, and others who have campaigned endlessly on this issue, including the BBC journalist Nick Wallis, who has played an important role in this long battle.
The hon. Lady asked about timescales. As I said in my statement, we aim to complete this part of the scheme by the end of 2023, or, I hope, sooner. The large number of documents that we are putting online this morning will enable people to get on with processing their applications before making formal applications early next year. Sir Wyn Williams, who is conducting the formal inquiry, will, I hope, be able to shed significant light on what went wrong and provide a set of recommendations to prevent it from happening again. I have no doubt that Members, certainly on this side of the House, will be anxiously awaiting those recommendations.
Dr Julian Lewis (New Forest East) (Con)
Will the inquiry which I gather is still under way ever reveal to the public how it was possible—in a modern constitutional democracy, with the presumption of innocence operating in our justice system—for hundreds of people with unblemished personal records to be prosecuted, tried and convicted because it was deemed that a computer programme could not be wrong?
Grant Shapps
The simple answer is yes, and that is the purpose of Sir Wyn Williams’s inquiry. I should remind the House that it could lead to individuals’ taking specific responsibility on the basis of his recommendations, and to the legal process that might consequently unfold.
As I said to the GLO group earlier today, anyone who has observed this from afar, watching and listening to coverage from Nick Wallis and others over the years, must feel their blood boil at the sheer injustice of a computer programme being placed ahead of people’s lives. I think that makes all of us shudder. I am only pleased that in this particular case, because of a group of people who undertook the most proactive work to try to get to the truth, we are now able to ensure that their compensation matches everyone else’s.
Mr Deputy Speaker (Mr Nigel Evans)
I call the Chair of the Business, Energy and Industrial Strategy Committee.
Marion Fellows (Motherwell and Wishaw) (SNP)
I do not mind being forgotten, Mr Deputy Speaker, but I am glad to be called. I hope this is not being added to my two minutes.
I want to thank the Minister for giving me advance sight of his statement. I particularly want to thank the Justice for Subpostmasters Alliance, and especially Alan Bates, who I have had the pleasure of speaking to at the all-party parliamentary group on post offices. I also stand here to say thank you so much to the right hon. Member for North Durham (Mr Jones) and to Lord Arbuthnot. Who would have thought I would be thanking a Lord in the other place?
I stand here in the shoes of giants. I take advice from everyone as chair of the APPG, but one thing I am sure of is that there are people right across this Chamber who will be watching the progress of this new scheme carefully. We welcome it—it is long overdue—but people will be watching to make sure that it runs properly. I want to thank the hon. Member for Sutton and Cheam (Paul Scully) and also the Under-Secretary of State for Business, Energy and Industrial Strategy, the hon. Member for Thirsk and Malton (Kevin Hollinrake), who invited me along to a meeting on this subject. It is important that people are watching, it is important that the scheme works and it is very important indeed that those who have suffered, and those who are left behind, are adequately recompensed.
Grant Shapps
I add my thanks to the chair of the all-party parliamentary group on post offices for all the work she has done with colleagues over this considerable period of time. I absolutely agree with her about the importance of making sure that this all now happens. She is right to say that Members across the House will be watching that closely, and none more so than the small business Minister, my hon. Friend the Member for Thirsk and Malton, I can assure her.
Lucy Allan (Telford) (Con)
I welcome the tone and nature of the statement that the Secretary of State has just made; I am delighted to hear his approach to this. I am also pleased to see at his side the Under-Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend the Member for Thirsk and Malton, who I know will keep postmasters front and centre of everything he does. Post Office workers rightly deserve compensation, but they also deserve justice, and to get justice they need those responsible for the suffering they endured for so many years to be held to account. It is possible that, within the Secretary of State’s Department, there are officials who were potentially responsible for what happened. What can he say to those sub-postmasters who are going to engage in this compensation scheme with an open mind to give them confidence that BEIS will act properly, fairly and promptly in all its dealings with them?
Grant Shapps
I can absolutely give my hon. Friend the assurance that, under my tenure, there will be no stone left unturned when it comes to this. I want to pay tribute to her for her work on bringing justice to this important cause; I know that she has had had a number of constituency cases in Telford. I can absolutely reassure her that, whether it is in the Post Office or anywhere else, we will make sure that no stone is left unturned.
Darren Jones
Thank you, Mr Deputy Speaker.
I welcome the announcements made today, which were recommended in my Committee’s interim report on compensation and by many others, and I welcome the appointments of my right hon. Friend the Member for North Durham (Mr Jones) and Lord Arbuthnot in the other place. In respect of the benefit disregards, can the Secretary of state confirm when the statutory instrument will be tabled? It will not take long to do, and it should be done quickly. Can he also confirm that while we are waiting for the benefit disregards to come into force, the victims who suffer loss as a consequence of that will be given additional compensation to cover the deductions from their benefits and pension payments?
Grant Shapps
I am just taking advice from my hon. Friend the small business Minister on the interim payments, and I think the answer is yes. On the scheduling of the SI, it will be done as quickly as possible in terms of parliamentary business, but that will not hold anything up because the payments have to be made first. They will be well in advance of that, and the commitment is in the statement today to lay the SI. Finally, I pay tribute to and thank the Chair of the BEIS Committee for all his and his members’ work on the subject.
Andrew Bridgen (North West Leicestershire) (Con)
I welcome my right hon. Friend’s statement and I also thank his Department for allowing Back-Bench colleagues from across the House with a long-term interest in this topic to be involved in the formulation of the compensation scheme. Will he commit to keeping the House updated on the progress of the compensation scheme? Let us all hope that sometime in the near future he will be able to come to the Dispatch Box and tell us that all the compensation has been paid to the recipients.
Grant Shapps
I thank my hon. Friend, and yes, we will certainly keep the House fully informed. My hon. Friend the small business Minister will be providing updates as well. I want to pay tribute to my hon. Friend the Member for North West Leicestershire (Andrew Bridgen) for his work on, I think, at least one case in his constituency, where he has helped to keep this subject high on the agenda.
Mr Kevan Jones (North Durham) (Lab)
I thank the Secretary of State for his statement. I also thank the Under-Secretary of State for Business, Energy and Industrial Strategy, the hon. Member for Thirsk and Malton (Kevin Hollinrake). It is nice to see a poacher turned gamekeeper in the Department. Can I also put on record my thanks to the hon. Member for Sutton and Cheam (Paul Scully)? In a long list of useless and indifferent Ministers over the years, he was the only one who actually got it and was determined to sort it out. I would also like to give my personal thanks to Alan Bates and the Justice for the Subpostmasters Alliance, because without them the truth would not have come out, and that happened in spite of the Post Office throwing a tsunami of cash—£100 million—at them to stop the truth coming out.
This is the only scandal I have seen where cover-up and lies ran to the top, not only of the Post Office but, I have to say, of the right hon. Gentleman’s Department. Today represents a move forward, and I welcome what is being done. Does the Secretary of State agree that what we need next, following the public inquiry, is for those individuals who were responsible for ruining people’s lives—in some cases people took their own lives; others who were innocent went to prison—to be held to account? It has to be a determination for the Department to ensure that those individuals—whether they are in the Post Office or in his Department—face the day of reckoning that should be coming to them in a court of law.
Grant Shapps
I again pay tribute, as I think the whole House does, to the right hon. Gentleman’s extraordinary work on this issue. He is right not only to highlight my hon. Friend the Member for Sutton and Cheam, who I have engaged with this morning over this, but to pay tribute to Alan Bates and all the work that he and his team have done. I was talking to him earlier. It was not until he got going in 2009 that this really started to unravel for the Post Office.
To the right hon. Gentleman’s main point, he is absolutely right to say that we cannot allow an injustice such as this to not meet justice. Of course, we have a free legal system in this country, and Alan and his colleagues were saying to me earlier that if it were not for democracy and the freedom of our courts, we would never have got this far. To really get to the nub of the right hon. Gentleman’s point: I agree with him, and we will not allow any process or shyness of what it might uncover to prevent the legal process from being able to run its full course.
Richard Graham (Gloucester) (Con)
As a former chair of the all-party parliamentary group on post offices, I welcome the Secretary of State’s statement, the compensation scheme announcements—particularly on the benefits disregard—and the comments on the timing of what will happen, but I think there are going to be some shocking lessons from all this that we will need to learn. These revolve around who knew what, and when, and what the role of the Federation of SubPostmasters was in standing up or not standing up for its members during this crisis. I hope the Secretary of State will agree that when the inquiry is finished there should be another debate in this House to make sure that we really do learn those lessons, including, as two or three Members have said, the crucial point about how technology cannot be wrong.
Grant Shapps
My hon. Friend is absolutely right. I had not realised that he was a former chair of the APPG, so I thank him for his work on this issue. On his central point, the lessons absolutely have to be learned. As I said earlier, anyone who has watched this just as a bystander, not having had their life turned upside down, can still feel their blood boiling, but what it was like to be involved in this must have been unimaginable. I hope this will be a salutary lesson for the idea that a computer can never be programmed in an incorrect way, or have a loophole or a problem, not just with regard to the Post Office or even Government procurement but for every walk of life and everything that computers are now involved with.
Karl Turner (Kingston upon Hull East) (Lab)
I thank the Secretary of State for his work in coming up with the scheme in such a short time. As he knows, I was instructed to defend one of these sub-postmasters in criminal proceedings. She should never have been investigated, let alone prosecuted. If the Post Office had done what it needed to do to comply with the disclosure rules, she would never have been convicted.
People at the very top must have made decisions to block defence lawyers getting information that was incredibly important to the defendants’ defences. Those victims—those men and women in the Public Galley—and their families will not feel they have had justice until every single person responsible is criminally investigated, potentially prosecuted and, if convicted, sent to prison for a very long time. Will the Secretary of State assure the House that is his intention?
Grant Shapps
The hon. Gentleman is, as ever, a very powerful campaigner on this and many other issues. I know of his involvement in this subject.
Following what Mr Speaker said, I do not want to stray too far into the judicial area, other than to say, as I mentioned before, that when Sir Wyn Williams completes his inquiry and makes his recommendations, this Government will take every single proposal very seriously. Everyone, not just those directly involved but the country at large, must know and see that the overall system, both the democratic part and the courts, got to the truth in the end. Even when that happens, it will not mean the sub-postmasters get what they lost, given the misery it has caused, but it will at least demonstrate that the system can be made to work for justice in the end.
Jason McCartney (Colne Valley) (Con)
I welcome my right hon. Friend’s statement and, in particular, the apology.
Like many colleagues in this Chamber, I have got to know my constituent Maria and many others who have been impacted by this awful scandal. My right hon. Friend is right that this wrong cannot be put right, but I welcome the details provided today. Will he and the Department continue to work tirelessly not only for justice but for compensation for all the victims?
Grant Shapps
To my hon. Friend’s constituent Maria, and to everybody else involved, the answer is yes.
Mr Alistair Carmichael (Orkney and Shetland) (LD)
We are not quite at the end of the road, but there is a sense today that perhaps the end of the road is in sight. I echo colleagues in taking a great deal of comfort from the participation of the right hon. Member for North Durham (Mr Jones) and Lord Arbuthnot in future proceedings.
One of the lessons we have to learn is that it is all too easy for people in Government and people in public bodies to use taxpayers’ money to defend situations where they have made mistakes. This is, by far and away, the most egregious example, but it is not the only example. As well as being involved in this issue for some time, I have been helping constituents who were defrauded by Midas Financial Solutions. They had to take the Competition and Markets Authority to court, and they eventually received compensation, but those who took the case are still out of pocket to the tune of £2 million. That is exactly the same situation in which the sub-postmasters find themselves. Why should they be treated differently?
Grant Shapps
Again, it is a dangerous and sometimes potent mixture to have the backing of essentially endless taxpayers’ money in a battle of David and Goliath. As the right hon. Gentleman knows, Ministers always have to be careful to weigh the advice to make sure that, when we wield the power of the state, we do so in the interest of society as a whole and not, as has clearly happened in this case, in a manner detrimental to individual citizens—in this case postmasters and sub-postmasters. His point is well made.
Siobhan Baillie (Stroud) (Con)
I pay tribute to my constituent Nichola Arch and hundreds like her who have campaigned tirelessly and constructively, despite their lives being torn apart by this scandal. There are adult children of postmasters and postmistresses who have only known their parents’ battle. It is right that the compensation scheme is generous and provides the necessary uplift to reflect the trauma of prosecution, and it is right that it is sensitively handled, but what we have seen with past Government compensation schemes, where the legal fees are covered, is that ambulance-chasing third-party organisations get involved and prey on the vulnerable, who are already exhausted. The upshot is often that the compensation is reduced to pay these third-party organisations. Will my right hon. Friend tell the postmasters and postmistresses from the Dispatch Box that the scheme has been designed so they do not need to rely on ambulance-chasing organisations and that all compensation should go into their pockets?
Grant Shapps
My hon. Friend makes an excellent point. As the right hon. Member for North Durham has also said, we do not want to see a complex and expensive legal process that costs a fortune for those who should have been compensated long ago. That is why this is going through an alternative dispute resolution process. We will also provide assistance in pulling the papers together so that people can make their applications as easily as possible.
Clive Efford (Eltham) (Lab)
I also pay tribute to Lord Arbuthnot, my right hon. Friend the Member for North Durham (Mr Jones) and the former Minister, the hon. Member for Sutton and Cheam (Paul Scully), for their tireless work on this issue.
May I press the Secretary of State a little further on getting justice for those who used the state to defend an indefensible position, which ended up putting people in prison and wrecking people’s lives, with some committing suicide? His Department was clearly involved in this. Will he guarantee full disclosure of any documents required for any future legal proceedings?
The problem is that the postmasters lack the means, and those who have been defending their position have untold means, because they are using taxpayers’ money. The Secretary of State says justice has to be done, but how does he see that being pursued? Will these people have to fund legal action again, or will the state fund criminal proceedings?
Grant Shapps
Again, I do not want to stray too much into the legal process, other than to say that Sir Wyn Williams will report and his inquiry will make a series of recommendations, and I can reveal that we are likely to look very kindly on what he has to say.
We put a number of steps in place after speaking to Alan Bates and those impacted by the group litigation, but we have not, for example, handled this stage of the process through the Post Office. Instead, there is the extra reassurance of an independent panel, which includes the right hon. Member for North Durham and Lord Arbuthnot, to make sure the same errors cannot be repeated.
The key point is about ensuring there is not a large cost. As I mentioned to my hon. Friend the Member for Stroud (Siobhan Baillie), there will not be a large cost in this part of the process. We then get into what will happen with prosecutions. I am probably leaping a little too far, but this significant injustice has caused misery to people’s lives, not only those who were wrongly convicted—I said in my opening remarks that some are not here to see this moment of partial justice—but the families who have been ripped apart and will never be brought back together. This damage and harm will last generations, and I very much hope our legal system will take all that into account.
Dean Russell (Watford) (Con)
I welcome my right hon. Friend’s commitment today and his statement. He is right to use the word “travesty”, as this was a scandal probably unequalled in government over many decades. I am grateful for his words today and the work he is doing, and I am pleased to hear that Alan Bates is in the Gallery to hear this, given the work he has done.
My question is about what will happen with this long-term commitment on communications. One thing I have heard often during this is that a lack of communication can, of itself, cause additional stress and anxiety. So will my right hon. Friend agree to ensure that there are regular communications from the Government on this, both in the House and outside?
Grant Shapps
I pay tribute to and thank my hon. Friend for what he did as Minister responsible in this area to help to bring forward the statement I was able to make today. On his point about communication, that is absolutely our intention, both through myself and through the small business Minister—the Under-Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend the Member for Thirsk and Malton.
Mick Whitley (Birkenhead) (Lab)
I too welcome the Secretary of State’s statement. However, the postmaster scandal has exposed the serious dangers inherent in using intrusive surveillance technology to monitor the activities of employees. A growing number of workplaces are adopting surveillance and artificial intelligence-assisted technology, and some employers are even reported to be delegating decisions on recruitment, promotions and even sackings to algorithms. The TUC has warned that worker surveillance is at risk of “spiralling out of control” without greater transparency and stronger regulation to protect workers. Will the Secretary of State now act to make it a statutory duty for employers to consult trade unions before introducing AI and automated decision-making systems in the workplace? Will he also ensure that every worker has the right to a human review of high-risk decisions made by technology?
Grant Shapps
The hon. Gentleman makes an interesting point. We have a lot of new technologies coming along, including things such as AI and generative AI. If the Horizon Post Office scandal demonstrates anything, it is that we have to be very careful about how we implement technology. I love technology. It gives us a great opportunity for productivity, but if we get to a point where it is about, “Computer says no” or, “Computer says yes” and that is what we believe without testing the input to those machines and the way they have been programmed—this will become much more challenging with things such as AI in the future—we will have problems and we will end up with more of these sorts of scandals. He raises an interesting specific point about how that might be addressed. I would be very interested to hear more from him about it, and perhaps we will organise a meeting, either with myself or with the Under-Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend the Member for Thirsk and Malton.
Duncan Baker (North Norfolk) (Con)
I believe I am still the only serving MP who used to be a postmaster, many moons ago, in a former life. So I really thank the Government for what they are doing to overturn, or make some reparations for, this injustice. But there is a problem, which gets to the heart of why this situation happened in the first place: the absolute lack of investment in and care for our beloved institution that is the post office network. Every year we lose banks up and down our high street. Last year, we even lost post offices on our high street, and that is not good enough. My community of Cromer is to lose an HSBC bank branch, so I make a plea to the Secretary of State to really invest in the post office network and to pay our postmasters properly. They cannot make a decent living at the moment out of what their payments are. We must make sure we safeguard their future by putting post office networks at the very heart of delivering banking services up and down our high streets. We must do that to safeguard our postmasters and our high streets.
Grant Shapps
I pay tribute to my hon. Friend, as someone who has actually been a postmaster and now serves in this House; he knows what he is talking about on this. He is right to say that this comes in the wider context of support for our high streets, the complexities that high streets face these days and the huge changes in the way that mail is sent and communications operate. That is why the Government have put £300 million into assisting the Post Office with running post offices in communities, and I know that there was a 4% tariff uplift most recently. But he raises a series of very good points, and I know that my hon. Friend the Under-Secretary and he will be continuing this conversation.
Jim Shannon (Strangford) (DUP)
I thank the Secretary of State very much for his statement. It has truly lifted the hearts of those in the audience, those outside and those across all the constituencies where sub-postmasters found themselves in very difficult positions. May I commend the right hon. Member for North Durham (Mr Jones)? I know that many have done so, but he has been incredibly assiduous. Strength of character has pulled this over the line, and I wish to put on record our thanks to him for that as well.
This morning, the media broke the news about the new compensation for victims of the Horizon IT scandal. That is very much welcome, because the cruel accusations of fraud saw sub-postmasters sent to jail, bankrupted and shunned by their communities. In some cases, suicide resulted from the impacts that this caused them, and we really feel the pain of that; the way in which the Secretary of State presented this statement has captured that very well. Will he assure this House and myself that lessons will be learned from the scandal and that accusations will not be made before full inquiries take place, as so many have lost their lives due to what have been false narratives?
Grant Shapps
That is absolutely the intention of this Government and Ministers. I hope that the lessons that will be drawn, both from what has happened so far and from Sir Wyn Williams’ inquiry when he reports, will be taken to apply not just to the Post Office, the Department for Business, Energy and Industrial Strategy or Governments, but the whole of society. As I mentioned a few moments ago, the dangers are inherent in the idea that just because the computer says yes or says no, that is a definitive, unchallengeable position. As we saw in this case, not only was it not, but it destroyed lives and families along the way, as well as livelihoods.
Mr Deputy Speaker (Mr Nigel Evans)
I thank the Secretary of State for his statement. I am sure the heart of the entire House goes out to the people who have had to face such trauma, and their families.
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Grant Shapps Excerpts(1 year, 12 months ago)
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The Secretary of State for Business, Energy and Industrial Strategy (Grant Shapps)
It will not be news to hon. Members that in the past year, Putin’s barbaric invasion of Ukraine has sent energy prices soaring.
Without this Government’s support, it would have sent thermostats sinking this winter, too. We have taken decisive action to keep homes, businesses, hospitals, and schools warm this winter. But if we are to avoid foisting this crisis on to future generations, we must think about the years to come, too.
This Government are investing now in a long-term plan, deploying transformative technologies to secure a cheaper, cleaner, reliable supply of energy for Britain and laying firm foundations for growth.
We are one of the biggest economies in the world, but for far too long our energy dependency has threatened to make us vulnerable, when the price of our energy is dictated by the whims of international energy markets.
To put a stop to this situation, we are securing our energy sovereignty.
We are building an energy system fit for the future, by delivering low-carbon energy and greater energy efficiency. We will continue working with our allies, whilst reducing the impact of international energy markets on our energy system.
By developing our world-leading renewables and investing in new nuclear, we will generate home-grown British energy for British families and businesses, boosting British jobs and British growth even as we transition to net zero.
Energy sovereignty is within our grasp. Clean, affordable energy for households and businesses is not a pipe dream, but a project we have now embarked on. Today I am setting out the steps we are taking on our path to energy freedom, delivering opportunity, security, and prosperity for all.
Investing in nuclear power
Nuclear power will be at the core of our threefold mission: to secure our energy supply; to supercharge growth; and to cut our carbon emissions. Today, it was announced that we have delivered on our commitments in the autumn statement, and that the Government will progress Sizewell C.
Our investment, the first made directly by a Government in nuclear power for 30 years, will drive forward the project’s development, and confirm the Government as a project shareholder. Next year, the Government, EDF, and the project company will work together to raise private capital under our new regulated asset base funding model for nuclear.
This is a truly significant moment, and our biggest step so far towards increasing our energy independence. Sizewell C will create 10,000 highly skilled jobs for the area and provide cleaner, cheaper, low-carbon electricity for the equivalent of 6 million homes for over 50 years.
Great British Nuclear
We remain committed to developing a pipeline of new nuclear projects beyond Sizewell C, where these offer clear value for money for taxpayers and consumers. We have been working at pace on the scoping and set up of Great British Nuclear, with the support of industry, and we will make an announcement on the set up of GBN early in the new year.
GBN will be tasked with helping projects through every stage of the development process and developing a resilient pipeline of new builds. We will back it with funding to support projects to get investment ready and through the construction phase, while recognising the challenging fiscal environment outlined by the Chancellor at the autumn statement.
GBN will enable the delivery of clean, safe electricity over the decades to come, protecting future generations from the high prices of global fossil fuel markets.
Boosting energy efficiency
We must do all we can to boost energy generation, but we can also make sure that none of us uses more than we need.
The days of wasting energy are over. Boosting energy efficiency with warmer homes and buildings is key to bringing down bills and boosting jobs along the way with green growth.
We are aiming high, with a target to reduce the UK’s final energy consumption from buildings and industry by 15% by 2030. We are also providing the money to get there, with a new £6 billion investment from 2025 to 2028 that comes on top of the £6.6 billion we are already spending over this Parliament.
Installing insulation in hundreds of thousands of homes across the country will save consumers around £310 a year through our ECO+ scheme, making our energy system more resilient and secure by slashing energy demand.
We recently launched a consultation so that we can make sure that the right support gets to the right people in the right way.
The Government have stepped in with an unprecedented package of support for households this winter, but there is more that households can do to help meet our energy demand reduction target and save money on their bills.
The Government are expanding their public awareness campaign to help reduce bills for all households and protect the most vulnerable over this winter and beyond.
Backed by £18 million, this campaign will complement existing Government support schemes. It will use public messaging to help consumers understand how they can reduce their own household usage and bills through making their homes more energy efficient for this winter and next. Moreover, it will provide vulnerable groups with the information they need to reduce energy usage without harming their health.
This information will also be available on the existing Help for Households website.
Legislating to drive investment and to secure our energy future
We have put the legislative vehicle to power up this long-term plan, the Energy Security Bill, back on track; it will be taken forward this Parliament.
The Bill will liberate private investment, driving jobs and growth in every corner of the country. Importantly, it will help to transform our energy industry by firing up the nascent CCUS and hydrogen industries, in which we already have a head start with pioneering projects from the Humber to the Mersey.
The Bill will encourage competition in the energy sector, enabling the economy to grow and flourish by creating opportunity, prosperity, and security with clean jobs, new skills, and cheaper bills.
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Energy Security
Grant Shapps Excerpts(1 year, 12 months ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
The Secretary of State for Business, Energy and Industrial Strategy (Grant Shapps)
With permission, Mr Speaker, I will make a statement on energy security.
Over half the gas we use in this country is imported. A third of all our energy comes from other countries. Each click of the thermostat and every flick of the kettle sends our money abroad. We are lucky that we have access to secure supplies and strong alliances, but while the price of energy is dictated by the whims of international energy markets, it will be hard to release ourselves from the grip of high bills ushered in by Putin’s brutal invasion of Ukraine.
The solution is energy sovereignty. We have the ability to generate our own energy here in the UK. We need only look at our renewables to know we are already doing this rather well, but it is time for us to do more: to bring energy home; to clean it up; to reduce our reliance on dirty, expensive fossil fuels; and to create a thriving, secure and affordable energy network. We will use the might of our many brilliant engineers, experts and innovators to build a system fit for the future.
As I mentioned in questions earlier, yesterday I was in Suffolk where, thanks to Government investment, the development of the Sizewell C nuclear plant has been given the green light. It will generate not only cleaner, cheaper, low-carbon electricity for the equivalent of 6 million homes, but 10,000 jobs during construction and thousands more in the supply chain. This is the first direct stake a Government have taken in a nuclear project since 1987, and it is the first step on the ladder to long-term energy independence. This has been long awaited, and to boost the nuclear industry further we will work fast to scope and set up Great British Nuclear. With GBN we are aiming to build a pipeline of new nuclear projects beyond Sizewell C where they offer clear value for money, and we will make announcements on this early in the new year.
It is not just nuclear of course: in order to strengthen our energy sovereignty we must look to our natural resources. This island is, as students of Shakespeare will know, a “fortress built by Nature”, and we are utilising that which nature has bestowed upon us—the howling winds of our coastlines, the crashing waves of our sea, and the radiant sun across our land—to create green, clean, cheap energy at home for us.
Those industries are booming, providing jobs and growth up and down the country. In fact, earlier this month, the country hit a truly historic moment, when our onshore and offshore wind farms provided more than half the UK’s electricity. Furthermore, the National Grid reported that on that day all our renewable energy combined provided 70% of the country’s overall electricity needs. However, we need low-carbon back-up for those days when the wind is not blowing and the sun is dimmed, which is why I have put the Energy Bill back on track. It will fire up our nascent hydrogen and carbon capture industries by providing new business models and liberating private investment. The Bill will hammer into place the high-tech solutions we need to produce our own energy.
Even after record Government support for household and business bills, the British people need us to take bold action, and the war in Ukraine, combined with sky-high energy prices, has put a spotlight on the importance of energy efficiency. Our ambition is to reduce energy demand by 15% by 2030. That will be backed by £6 billion in cash between ’25 and ’28, coming on top of the £6.6 billion we have already spent during this Parliament.
The majority of British houses are, thanks to their Victorian builds, rather draughty. Our energy performance certificates did not really bother the estate builders of the 19th century, which is why our ECO+ scheme will help households install insulation, saving them hundreds of pounds off their bills each year—money they can spend elsewhere to grow the economy.
Energy sovereignty is now within our grasp. Clean, affordable energy for households and businesses is not a pipe dream; it is a project we have now embarked upon. Building new energy networks will create jobs; producing our own renewable energy will keep bills low; and as businesses and households are relieved of the pressure of crippling bills, the economy can flourish and grow. Energy is coming home.
Edward Miliband (Doncaster North) (Lab)
I thank the Secretary of State for his statement, and can I take the opportunity to welcome him to his new role? We support new nuclear, and I welcome the announcement on Sizewell. The Climate Change Committee tells us that nuclear should play a role as part of the balanced pathway to net zero. In his reply, could he tell us the timetable for Sizewell’s final investment decision and when we expect it to be up and running? I also welcome the return of the delayed Energy Bill, which should never have been paused by the Government.
As for the rest of the statement, I am bound to ask: is that it? Alongside nuclear, we need a sprint for cheap, clean, home-grown renewables, and I have to say to the Secretary of State that, given the chaos, confusion and embarrassment of the Government on onshore wind, I find it extraordinary that he did not clear that up in the House today. Let me remind the House of some facts. The ban on onshore wind in England that they put in place in 2015 has raised bills for every family in this country by £150 each, and keeping the ban in place up to 2030 would mean customers paying £16 billion more on bills compared with a target of doubling onshore wind. Let us be clear: opposing onshore wind waves the white flag on our energy security and raises bills for families.
The only reason we are debating this issue is not that the public do not support onshore wind—they do, by 78%, according to the Department’s own polling—but that dinosaurs on the Government Benches oppose clean energy, and David Cameron and every leader since has indulged them. The problem is that the Secretary of State, who prides himself on being a truly modern man, is part of the fossilised tendency. He was part of the lobbying effort against lifting the ban in April. He said onshore wind was an “eyesore” and created “problems of noise”, and he urged the then Prime Minister to “largely” reject it. I may have had some issues with his predecessor, the right hon. Member for North East Somerset (Mr Rees-Mogg), but the Secretary of State’s position is making the Victorian of the Tory party look positively on trend, because the right hon. Member for North East Somerset after all called for the consenting regime for onshore wind to be brought into line with other infrastructure. Can the Secretary of State clear up once and for all what his position is on onshore wind? Will he now act in the national interest, properly end the ban and finally bring the consenting regime in line with other infrastructure?
On solar, it is the same problem. The Prime Minister spent the summer saying he wanted to block solar, echoed by the Environment Secretary in the last couple of weeks. Blocking solar risks preventing the equivalent of 10 nuclear power stations-worth of power being built, so will the Secretary of State rule out the plans of the previous Environment Secretary to further block solar power on land?
On energy efficiency, frankly this Government should be ashamed of their record, with the green deal fiasco, the green homes grant fiasco and energy efficiency installations running 20 times lower than under the previous Labour Government. Can the Secretary of State tell us from his announcement, which I am afraid contains no new resources, in what year the 19 million cold, draughty homes below energy performance certificate band C would be brought up to that level of decency under his plan? We would do it in a decade. Can he confirm that, at the current rates of installation, under this Government it would not happen till the next century?
We have seen five Energy Secretaries since 2019. To overcome the bills crisis we face and to tackle the climate crisis, we need ambition, consistency and going all in on the green energy sprint. I am afraid we have not had these things from this Government. All we have had is inconsistency, dithering and a Government looking over their shoulder at their own Back Benchers. The Secretary of State has a lot of work to do to convince the country that that is going to change, and if he does not, it means that this Government will land us with higher bills and more energy insecurity, and will fail to take the leadership we need in tackling the climate crisis.
Grant Shapps
I do not think the right hon. Gentleman was in the Chamber earlier for Business, Energy and Industrial Strategy questions, but I did point to a quote from him back in 2010, when he said it was “pie in the sky” that the then new Conservative Government would get to 40% renewables by 2020. What happened? By 2020 we had got to 43.1% renewables. That is our record of delivery when it comes to renewables, so I do not think we need to take too many lectures from the Labour party, or from the party that five minutes ago did not support new nuclear power. It failed to commission any of it during its time in office—13 years, was it?—but now that we are getting on with it, all of a sudden it seems to have swapped sides.
On wind power, both offshore and onshore, I do not think the right hon. Gentleman recognises the fact that the strike prices in the contracts for difference are now lower for any version of power production at all when it comes to offshore wind. These turbines are now so large that they cannot even be constructed onshore. They are so big that the turbines cannot be carried by road; they have to put offshore.
Grant Shapps
How big are they? It is convenient that the World cup is on because the right hon. Gentleman will be able to envisage this. Single turbines are seven football pitches in scope, as they turn. They are not buildable onshore, which is one of the reasons why the cheapest way to build them offshore to produce energy offshore is to build these mammoth turbines, which go together in groups of 200 or even up to 300. However, I am sure he knows all of this and that, rather than discussing the actual solutions, he likes to throw up the chaff.
Since the right hon. Gentleman has mentioned onshore, I just want to note that the energy White Paper and the net zero strategy have both said exactly the same as we have been saying this week, which is that onshore can happen where it has local consent. I do not know why this local consent principle is so difficult for him to understand. There it is: we are delivering on the renewables, on the nuclear, on the energy independence and sovereignty that this country needs, and there is nothing from the Labour party.
John Redwood (Wokingham) (Con)
Over the last 48 hours, wind has generated as little as 1% of our electricity, and it was at 2% when I checked this morning, while of course most of the homes we represent use gas for heating. Will the Secretary of State confirm that we need to get on with issuing more production licences for domestic oil and gas, which cuts the carbon dioxide involved and will enable us to keep the lights on, which we cannot do when the wind does not blow?
Grant Shapps
My right hon. Friend is characteristically correct that we cannot always rely on a single form of electricity generation. As the French have found out, we cannot always rely on nuclear. I think France has 71 nuclear power stations in its fleet, but about half of them are down at the moment, so it cannot rely only on nuclear. I was discussing this very fact with my opposite number yesterday. I know that my right hon. Friend welcomes the £700 million development approval cash that we have put into the first new nuclear since the 1980s, and he is absolutely right that we need a broad spread of different energy forms to ensure that we can provide the cheap power we require at all times.
Alan Brown (Kilmarnock and Loudoun) (SNP)
The reality is that this statement is just a padding out of the press release that BEIS put out earlier. I do welcome the energy company obligation funding for energy efficiency, but I think we need to be clear that this is not Government money; it is money funded from our energy bills and paid for by all bill payers. One issue with ECO4 is that it cannot be combined with other grants, whereas ECO3 did allow that money to be combined with other grants to bring down the costs of external insulation, for example. That is something the Secretary of State could consider to make schemes more affordable for people. The reality with EPC bandings is that there are more homes currently rated D to G than A to C, so much more direct investment is needed in energy efficiency to rectify that.
The Secretary of State talked about energy security, so does that mean that the Government have finally bought out China General Nuclear from the Sizewell C consortium? Talking about sovereignty, will he confirm that uranium imports are going to be needed to keep Sizewell C going? Is it still the intention to take a 20% stake, and does that mean funding capital of £6 billion or £7 billion towards Sizewell C, because there is still no clarity in today’s statement? On the myth about nuclear baseload, by the time Hinkley Point C comes on stream, seven of the eight existing nuclear power stations will have stopped operating, which proves there is no need for nuclear baseload whatsoever.
On wider energy policy, the Scottish carbon capture and storage cluster was the most advanced project, but it was still only classed as a reserve. Will the Government urgently review this classification, and make the Scottish CCS cluster a track 1 cluster to allow that investment to be released and for that project to go ahead? Pump storage hydro, as I have raised several times, could deliver about 3 GW of power by 2030. All that is needed is an electricity pricing mechanism—a cap and floor mechanism—so will the Government urgently review that and start these discussions?
Finally, we know about the oil and gas investment allowance. If we are going to have continued record investment in renewables, there should be a renewables investment allowance to encourage that, particularly for green hydrogen.
Grant Shapps
Yes, I can confirm that China has now been bought out of the deal on Sizewell. The money yesterday ensured that it is no longer involved in the development.
The hon. Gentleman asked about the future funding for Sizewell. He may be familiar with the new “regulatory asset base” approach to funding, which is built along similar lines to the contracts for difference that have been used so successfully for offshore wind power. That is how we will look to bring income to the project. I should also say that CfDs will now take place on an annualised basis, which will give those including Scottish clusters the opportunity to bid in as well.
I am always curious about the SNP’s approach to energy. As far as I can work out, it does not like the oil and gas industry—even though the industry employs thousands of its constituents—and it absolutely hates nuclear. I am not quite sure what it wants to do on non-windy days.
Mark Jenkinson (Workington) (Con)
Cumberland has sites ready to go for new nuclear. It has expertise, interest and development companies for both small modular reactors and large-scale nuclear. Will the Secretary of State work with me and my hon. Friends the Members for Copeland (Trudy Harrison) and for Carlisle (John Stevenson) to bring Rolls-Royce SMR and UK European pressurised reactors 5 and 6 to Moorside?
Grant Shapps
I know that Cumberland has a tremendous amount of expertise and a lot more to offer. When Great British Nuclear launches in the new year, it will help to bring not just traditional Sizewell-style nuclear assets to this country, but the small modular reactors from Rolls-Royce and potentially other competitors.
Mr Speaker
I call the Chair of the Business, Energy and Industrial Strategy Committee.
Darren Jones (Bristol North West) (Lab)
I welcome the Secretary of State to his role. May I push him slightly further on the financing of Sizewell C? My understanding is that the Government are committed to spending 20% of the cost, and EDF 20% of the cost. That leaves 60% to be financed from the private sector, which I think means that up to £20 billion of financing still needs to be sourced. What will the Government do if they cannot find that from the private sector?
Grant Shapps
I thank the hon. Member for welcoming me to the Dispatch Box. As he will know as Chair of the Select Committee, we have been working on the Sizewell deal for quite some time and we got to the Government investment decision stage yesterday. Of course, we have been talking to potential financiers along with EDF and the French Government. We are confident about the level of interest, but I have no doubt that I will come to his Select Committee, along with my right hon. Friend the Minister for Climate, to discuss that in more detail soon.
Sir Robert Syms (Poole) (Con)
I welcome the announcements on nuclear and specifically on Sizewell C. The Rolls-Royce scheme for modular nuclear seems very exciting, but we do need to get on with it. Does the Secretary of State have a view as to what year we will be starting the first project?
Grant Shapps
My hon. Friend will be pleased to hear that when I was at Sizewell yesterday, I was with leaders from EDF and the French Government—indeed, the French ambassador was there. Later in the day I spoke to my opposite number about ensuring that we can speed up co-operation on nuclear, as well as on things such as wind, and even on our interconnectors. I was going to say that the point of Great British Nuclear is to really put the acid under this, but I am sure that there is a much better nuclear comparison. It is really about ensuring that we get on with producing our new nuclear fleet a lot faster than has happened in the last few decades.
Clive Efford (Eltham) (Lab)
Will the Secretary of State confirm that, even with the additional money made available for home insulation, his officials have told him that the money falls short by tens of billions?
Grant Shapps
It is worth the House knowing that we have already put in £6.6 billion. We have announced another £6 billion, which will be spent in the period from 2025 to 2028. The £1 billion that I announced yesterday will cover hundreds of thousands of homes. Of course, it is typical of the Labour party to think that the only way in which this can ever be funded is by the taxpayer and that there are no other routes to market. Lots of homes will be improved by, for example, regulations on build, ensuring that the overall increase in improvements in EPCs comes not just through spending taxpayers’ cash.
Bim Afolami (Hitchin and Harpenden) (Con)
It is a pleasure to welcome my constituency neighbour to his place as Secretary of State. He and the House will understand the importance of critical minerals to energy security. Could he outline his approach for the UK securing critical mineral supply to ensure that, over the longer term, we have energy security, particularly on things like lithium-ion batteries?
Grant Shapps
My hon. Friend and neighbour is absolutely right. Critical minerals are so important in securing the entire supply chain. Earlier I mentioned green lithium up in Teesside, which is part of that supply chain. The UK can have the first green lithium production in Europe because of Brexit and our ability, for example, to use more flexible rules that the Europeans cannot access at the moment to produce it, so that is a very good win. He is right about the strategy, and we have a strategy for the most important critical minerals.
Wera Hobhouse (Bath) (LD)
On energy efficiency, will the Government introduce an inspection scheme for all rented accommodation to stop landlords from letting out properties that do not meet energy efficiency minimums?
Grant Shapps
Private landlords are already under an obligation to ensure that their properties reach certain standards. However, as the hon. Member may well know, the Government are consulting on raising that standard in line with the improvements that we would expect over a period of time, and we have already signalled that that would be likely to be to an EPC rating of C.
Andrew Bridgen (North West Leicestershire) (Con)
What is my right hon. Friend’s assessment of the risk to our country’s energy security this winter from possible disruption to the vital Norwegian gas pipeline, which will supply our country with approximately half of its gas needs this winter? Will he confirm that contingency plans are in place?
Grant Shapps
I am pleased to report that, notwithstanding things like terrorism or developments in the war in Ukraine, we have confidence about both our supply and European supply this winter. The weather has been better than might have been expected and gas supplies are full. I should also point out that the rough storage supply has been brought back online, which has increased our own storage by about 50%. I think that in all expected, imagined circumstances, we will be okay this winter.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
This morning the Secretary of State and my Opposition Front-Bench colleagues have spent a long time tilting at windmills. Does he agree that when it comes to getting the right energy and keeping people warm this winter, all of us need to have more courage? Energy from waste could fulfil 20% of our energy needs. Good energy from waste schemes can heat the whole of a town or city, such as Sheffield. Is it not about time that we took energy from waste really seriously?
Grant Shapps
The reality of energy supply is that anyone who thinks there is a single silver bullet—I am not accusing the hon. Member of that at all—is typically wrong. Almost any energy source or supply has its vulnerabilities and its shortcomings. Certainly, energy from waste has its place—we are active in that space—as does ensuring that, for example, we are using energy as efficiently as possible. That is why we announced yesterday that there will be an £18 million campaign about doing straightforward things such as ensuring that the boiler flow is set correctly on people’s boilers.
Selaine Saxby (North Devon) (Con)
Does my right hon. Friend agree that, as we pursue energy sovereignty, floating offshore wind in the Celtic sea can play a vital part? Will he confirm when we can expect an announcement on the floating offshore wind manufacturing investment scheme funding? To maximise the benefits to the communities around the Celtic sea, we need good port infrastructure to drive the project forward.
Grant Shapps
My hon. Friend is absolutely right. Floating offshore wind is an interesting development, and we are actively looking at it and working on it with a whole load of industry partners. She can expect some exciting information in this area in the future.
Caroline Lucas (Brighton, Pavilion) (Green)
As a student of 16th-century literature, I enjoyed the Secretary of State’s Shakespearian rhetoric, but I am frankly staggered that he can possibly think that Sizewell C is cheaper—cheaper than what? It is massively costly. The RAB funding model basically means that consumers end up paying twice: once towards the cost of construction to lower the cost of borrowing, and again for more costly energy. The Secretary of State will know that no nuclear power station in the world has been built to time and to budget. He has asked what we do on windy days: may I suggest more interconnectors, far more solar—including ground-based solar—flexible energy demand systems, onshore wind, energy storage, tidals, and the mass energy efficiency and insulation programme that this Government are still failing to deliver?
Grant Shapps
One would think the Green party would welcome 43% of our power being renewable, done under a Conservative Government. On Sizewell C, she asks what it is cheaper than; I will tell her—it is cheaper than being subject to Putin’s invasion of Ukraine.
Dr Julian Lewis (New Forest East) (Con)
It took an international conflict to lessen and hopefully eliminate Europe’s dependency on a potential enemy, Russia. Can the Minister confirm that we will have no future dependency on China for our nuclear power stations?
Grant Shapps
I can certainly confirm that in the case of Sizewell C; as I mentioned, we are making sure that the Chinese element of that is no longer involved. We do not have a principled objection, apart from where issues of national security are concerned: clearly, energy provision is very much in our sights.
Richard Burgon (Leeds East) (Lab)
I welcome the Secretary of State to his place. Renewable energy is nine times cheaper than gas, and onshore wind is incredibly cheap and incredibly green, so we need to be clear: the Tory ban on onshore wind has kept bills unnecessarily high, and has also undermined energy security. Is it not time that the ban was fully scrapped and the interests of people struggling with their bills were put ahead of the political interests of nimby Tory Back Benchers?
Grant Shapps
It is good that the electorate know what they will be getting if they vote for the Labour party. With us, they will be getting local consent: if people locally are happy to see such power production, they will get it. With them, they will get it willy-nilly.
I want to correct the hon. Gentleman on one fact: the cost projections on new forms of energy supply show that offshore wind is the cheapest available in the next likely bidding round.
Greg Smith (Buckingham) (Con)
I warmly welcome my right hon. Friend’s focus on securing energy security domestically, but does he agree that that must happen alongside food security, not over the top of it? We have vast swathes of land being taken for solar farms, while warehouse and factory owners cannot install solar because the grid cannot take the power. What is being done to ensure that rooftop solar can happen?
Grant Shapps
My hon. Friend is absolutely right about rooftop solar; I have had it on my own house for the past 11 years, and once it is there, it just carries on producing power. We need to expand that, both domestically and on factory roofs. I will be looking at things like permitted development rights, which enable those panels to go up on top of roofs. There are currently limits to the size of the panels that can be put in place, and I think they are a fruitful source of additional power.
Mr Clive Betts (Sheffield South East) (Lab)
I welcome the Secretary of State to his place. According to what he has said, Sheffield must be getting some things right: we have been doing energy from waste for over 30 years, since I was council leader, and ITM Power, the leading green hydrogen company, is in my constituency.
Regarding nuclear, is it not important that we ensure a UK supply chain, which has not always happened? Rolls-Royce and SMRs are therefore really important, working with Sheffield Forgemasters, but Madhvani International is also prepared to put billions of pounds of development capital into developing Hitachi-based SMRs—which are already regulated in North America—working with Forgemasters and other Sheffield companies. I am pleased that the Secretary of State will meet me tomorrow to discuss the proposal in more detail, but in principle, I hope that he welcomes it.
Grant Shapps
I welcome the hon. Gentleman’s foresightedness in all the schemes that he mentioned. It is a shame that the last Government to invest in nuclear power was Margaret Thatcher’s Government, all the way back in the 1980s; yesterday brought that long drought to an end. As the energy Minister, my right hon. Friend the Member for Beverley and Holderness, has reminded me, we have already provided £210 million to Rolls-Royce for the small modular reactor programme. I wish both Sheffield and the rest of the country well in attracting some of this new technology, and the supply chain that goes with it, to their constituencies.
Craig Whittaker (Calder Valley) (Con)
Land-based wind is a good, quick and relatively cheap way for the Government to achieve more on alternative energy and security of supply. Does my right hon. Friend therefore agree that the current partial ban on onshore wind is stifling growth, our march towards net zero, and our quest for security of supply?
Grant Shapps
I think a mixed provision of energy is extremely important—I have talked about solar, offshore and onshore wind, nuclear, and other sources. The answer is very simple: as has been set out in our energy review, the 10-point plan and elsewhere, where there is local consent, we will ensure that onshore wind can be part of that critical mix. It is a fairly simple principle, which the whole House should be able to unite behind, that local consent is important in these matters. That is the situation that exists, and will continue to exist.
Hywel Williams (Arfon) (PC)
The role that community renewable energy production could play is currently hampered by an unwieldy regulatory process. Will the Secretary of State bring forward amendments to the Energy Bill to empower community energy schemes to sell their power directly to local companies and customers, thereby also neatly slashing bills?
Grant Shapps
The hon. Gentleman makes a very good point. We are already doing everything we can to cut that regulatory burden, and my right hon. Friend the Member for Beverley and Holderness would be happy to take that conversation forward.
Mr Robin Walker (Worcester) (Con)
As my right hon. Friend has mentioned, the last time that a Government invested in new nuclear in this way was when my late father was at the Dispatch Box as Energy Minister in 1987. I remember very well the campaign to “Get more for your monergy”—as a nine-year-old boy, I even got to wear the T-shirt. To ensure that our constituents get more for their monergy, does it not make sense to break the link between gas prices and electricity prices? When will my right hon. Friend do that?
Grant Shapps
My hon. Friend’s late father clearly showed great foresight—it is a shame that it has taken all these years, via a 13-year Labour Administration, to do nothing at all on nuclear. I like the T-shirt that my hon. Friend’s father made him wear, and I agree with him on separating out those prices. At the moment the highest cost in electricity applies to everything, and we are actively looking at breaking that complex relationship.
Matt Western (Warwick and Leamington) (Lab)
I welcome the Secretary of State’s quote from Shakespeare, but if the bard were alive today, he would be writing either a comedy about the Government or a tragedy about their energy strategy. We have houses in my constituency being built with insufficient insulation and no solar panels, or solar panels on north-facing roofs. If onshore wind is indeed the cheapest source of energy generation currently, how is it that Warwickshire has no onshore wind turbines?
Grant Shapps
As I mentioned, the reference price shows that other forms of energy could be even cheaper. Until now, solar panels were not as effective on north-facing roofs, for example, but the hon. Gentleman is absolutely right that the technology is improving rapidly, with the result that we can install solar panels in more conditions than would otherwise have been available.
Alun Cairns (Vale of Glamorgan) (Con)
We need to recognise that developing our renewable mix of energy to 43% is a significant success—far more successful than other comparable nations—yet in these current weather circumstances, as people switch on their electric kettles during tonight’s football match, wind will only generate 2% of that energy mix. That underlines the importance of my right hon. Friend’s statement, so will he provide further detail and timescales regarding when small and advanced modular reactors will be possible? Wales has two of the preferred development sites, but does my right hon. Friend further agree that the Welsh Government need to be supportive of those projects to make them a reality?
Grant Shapps
My right hon. Friend is right. In Wales and Scotland, the devolved Administrations need to support new nuclear provision to provide energy security for their constituents. He talked about 43.1% of our energy coming from renewable power. Opposition Members said that it could not be done, but it has been done ahead of time and we will only go further.
Jim Shannon (Strangford) (DUP)
I thank the Secretary of State for his answers. In BEIS questions today, he referred to 10,000 highly skilled jobs and securing UK energy security, with British energy used for British homes. Some 6 million of those homes can be powered by the Sizewell C nuclear plant. Has the Secretary of State come to an assessment of how these decisions will have an impact on energy security for the devolved institutions? What steps will be taken to ensure that Northern Ireland, which I come from and represent, plays a part in securing energy independence?
Grant Shapps
The hon. Gentleman is right that a single nuclear power station can power 6 million homes, whereas a modular reactor can power perhaps 1.5 million homes. As a result of interconnectors, that power—when it is generated in Great Britain—helps Northern Ireland and all the devolved Administrations around the country. He is on the right track; that is the kind of energy independence that I mentioned in my statement.
David Duguid (Banff and Buchan) (Con)
The Secretary of State will be aware of analysis from the Climate Change Committee that states that we will not get to net zero in this country without carbon capture and storage. I therefore welcome his commitment to helping to liberate private investment in carbon capture and storage and other technologies. The Scottish cluster alone is poised to have billions of dollars-worth of investment. While he is pondering the acceleration of that project, will he consider joining me on a visit to the St Fergus gas terminal in my constituency? It has not only carbon capture and storage, but blue hydrogen, sustainable aviation fuel and net zero thermal power generation, and grid capacity and resilience improvements are being made in and around it.
Grant Shapps
My hon. Friend is right about the importance of private investment in carbon capture, utilisation and storage. The Energy Bill will look to unlock that private investment.
Aaron Bell (Newcastle-under-Lyme) (Con)
I welcome the Secretary of State to his place. Global gas prices have been at record highs. That has been caused by Putin’s illegal war in Ukraine and it has been a problem for the whole of Europe, so I welcome what the Government have done to protect my constituents from this impact through our energy price guarantee. Does he agree that the long-term solution to ensure stable and lower prices is to have diverse sources of British energy providing the power to our homes and businesses?
Grant Shapps
My hon. Friend is right. We need energy independence, security and sovereignty. That is what we are building in co-operation with our partners, with interconnectors, so that we are never again subject to the whims of a dictator from the east, as has happened this year.
Andy Carter (Warrington South) (Con)
I welcome many of my right hon. Friend’s steps to ensure energy security, particularly in the nuclear sector. He talks a great deal about Sizewell C; Warrington is the home of the National Nuclear Laboratory, so the decision will secure many of the 2,500 jobs that nuclear generates in Warrington. The north-west leads the way in carbon capture and storage and hydrogen technology with HyNet, so will he outline how hydrogen can play an important part in large industry energy generation for the future?
Grant Shapps
My hon. Friend is right about the role of hydrogen. I know from my time as Secretary of State for Transport how important that will be, particularly for transport in the much larger category of goods vehicles, buses, coaches, marine vessels and aviation. This is not just about the jobs in nuclear, which the Sizewell decision and Great British Nuclear will help, but about the development in hydrogen power. In particular, those hubs with great expertise will be tremendously important, and this Government fully back them.
Jack Brereton (Stoke-on-Trent South) (Con)
Investment in energy-intensive industries such as ceramics must also be a key part in reducing our overall energy consumption. Will my right hon. Friend look at what more can be done to invest in those key manufacturing sectors not only to reduce that energy dependence, but to reduce costs and support jobs in places such as Stoke-on-Trent?
Grant Shapps
The brilliant industries—particularly ceramics—in my hon. Friend’s constituency have been badly impacted by Putin’s war. The energy bill relief scheme has helped, and such things as the scheme for energy-intensive industries will assist, too. Ultimately, this comes to the point of today’s statement: energy independence, with low-cost and affordable energy, is the way forward not just for domestic users, but businesses such as those in my hon. Friend’s constituency.
Bill Presented
Elections (Proportional Representation) Bill
Presentation and First Reading (Standing Order No. 57)
Cat Smith presented a Bill to introduce a system of proportional representation for Parliamentary elections, for elections for directly-elected mayors in England, for local authority elections in England and for police and crime commissioner elections in England and Wales.
Bill read the First time; to be read a Second time on Friday 20 January 2023, and to be printed (Bill 201).
Oral Answers to Questions
Grant Shapps Excerpts(1 year, 12 months ago)
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Steven Bonnar (Coatbridge, Chryston and Bellshill) (SNP)
The Secretary of State for Business, Energy and Industrial Strategy (Grant Shapps)
Future energy prices remain highly uncertain and are expected to remain elevated throughout next year. The energy price guarantee from April ’23 is currently expected to equate to £500 of support for households in 2023-24.
Martin Docherty-Hughes
As I hope the Secretary of State will know, recent analysis published by The Herald has shown that the typical dual fuel bill for people in Scotland will be £3,300—£800 more than the current £2,500 price cap. Given the Chancellor’s plans to increase the price cap further, what levels does the Secretary of State expect average energy bills to reach in Scotland next year?
Grant Shapps
As the hon. Gentleman will know, a comprehensive range of different support is in place, including the energy price guarantee, which on average looks to guarantee £2,500. It is not specific to each household, of course, and it depends on how much energy is actually used—it is a cap—but there is additional help including the £400 non-repayable support through the energy bills support scheme.
Chris Law
The support to which the Secretary of State refers offers scant consolation to those suffering, particularly the near-130,000 households in Scotland who rely on heating oil. The £200 of support from the UK Government covers less than half the price of the typical minimum order of heating oil, so will he finally commit to increasing the support available to these households?
Grant Shapps
Of course, everybody has had a £400 discount from their bill that is not repayable, and 8 million families also have additional support—those on income support and the like. The hon. Gentleman mentions the £200; we only just doubled that from £100 in the autumn statement the week before last.
Chris Stephens
Rising bills terrify most households. The End Fuel Poverty Coalition recently warned that
“predictions of ‘a humanitarian crisis’ for children stuck in cold homes are now a very real possibility”,
so does the Secretary of State accept that failure to provide additional support for vulnerable families in April will have dire consequences?
Grant Shapps
I just mentioned support for 8 million families that goes beyond just the £400 and the energy price guarantee. Those 8 million families will benefit from all manner of additional support—£1 billion for local authorities, additional money for people on various forms of universal credit, and money for pensioners—all of which is designed to help people through a crisis that the whole House should recognise has been brought on by Putin the dictator invading Ukraine.
Angela Crawley
Contrary to what the Secretary of State says, the consequences will be dire. The Institute of Health Equity indicates that the development of millions of children will be damaged, so will he commit to providing adequate support for vulnerable families so that no child suffers the diverse health impacts of fuel poverty this winter?
Grant Shapps
I have mentioned the 8 million homes, but perhaps it will help the hon. Lady if I point out the specific means-tested benefits which mean that those families will receive an extra payment of £650 on top of all the other assistance and help that I have outlined. This is an unprecedented situation. We have put billions of pounds of taxpayers’ money into supporting people. I hope the whole House will recognise that this Government have done everything within our power to assist.
Steven Bonnar
The reality is that it is a damning indictment of decades of failed UK Government energy policy that we are even discussing harm to children as a result of rising energy Bills, given the vast energy resources at Scotland’s fingertips. Given that context, does the Secretary of State agree that it is absurd that nearly 1 million households in Scotland will be experiencing fuel poverty?
Grant Shapps
I have mentioned the household support fund, which is also available for the most vulnerable. I do just have to say, to this line of questioning, that it is extraordinary that while this Government are spending so much energy and money trying to support consumers, we still have the SNP refusing to allow new renewables such as nuclear power.
Sir Desmond Swayne (New Forest West) (Con)
When will there be clarity for park home owners about exactly what they have to do to get what they have still to receive?
Grant Shapps
My right hon. Friend is absolutely right to point out the plight of park home owners, who are in a different position from others because of the lack of connection, sometimes, to the grid. We are working very hard to ensure that they get their payments as well, which will happen this winter. My right hon. Friend can be reassured that we are doing that, and currently working through local authorities to deliver it.
Jonathan Gullis (Stoke-on-Trent North) (Con)
Mr Speaker, I know you are a huge fan of making sure your pottery comes from the Potteries. Ceramic manufacturers, despite the energy price cap guarantee—it has been hugely helpful, with one manufacturer saying it will save it £4 million over the winter months—are still left in a dire situation. Will the Secretary of State agree to meet me, the other Members of Parliament for Stoke-on-Trent and Rob Flello, the chief executive of the British Ceramic Confederation, to discuss what further support can be given to this vital industry?
Grant Shapps
My hon. Friend is absolutely right about the pressure those manufacturers are under, and I absolutely recognise that. There is the energy-intensive industries discount of 85%, but I would certainly be very happy to meet him and colleagues to discuss the matter further.
Stephen Flynn (Aberdeen South) (SNP)
To summarise, what we know is that, in Scotland, average household energy bills will exceed the energy price guarantee, but the Secretary of State is unwilling or unable to tell us by quite how much. Of course, we know that on top of that households in Scotland, and indeed children in Scotland, are going to suffer as a result, yet we see no new announcements of additional financial support forthcoming. All the while, Scotland produces its own energy far in excess of what would be required to meet its own demands. Can I therefore ask the Secretary of State whether it is little wonder that viewers watching this at this moment in time would be thinking that Westminster is failing Scotland?
Grant Shapps
I absolutely do not agree with the hon. Gentleman. I have already talked about the £400 that everybody has been able to receive back, with some additional measures coming through for people with unusual connection positions. We have the £650 cost of living payments for those on benefits, £300 for pensioners and £150 for disability costs of living. From what I can work out, the SNP does not like its oil and gas industry and does not want new nuclear power, so I have no idea what its plan actually is.
Stephen Flynn
It is a remarkable state of affairs that a nation that produces more energy than it requires faces child fuel poverty as a result of the actions of this Government here. The Secretary of State does not like those facts, but here are some more for him. To alleviate this crisis in the medium to long term, what we need from this UK Government is not investment in nuclear, but investment in clean, sustainable renewable industries. In that regard, can I welcome his U-turn on onshore wind, but also seek clarity about whether he will provide the same tax incentives for the renewables sector as he will for the fossil fuel industry?
Grant Shapps
This Government have a very proud record when it comes to renewables. When we came to power, barely 10% was from renewables; now the figure is 42%. In fact, on one day the week before last over half of this country’s energy was produced from offshore wind alone. The SNP does not like the answers I am giving because the amounts of money we are spending supporting people, including Scots, with energy bills this year means that, for example, the average single parent on means-tested benefit will be £1,050 better off because of the energy bills support scheme. Yes, we are doing our part, and perhaps it is time the SNP looked at its own policy to make sure it is encouraging energy production.
Tom Hunt (Ipswich) (Con)
The Secretary of State for Business, Energy and Industrial Strategy (Grant Shapps)
I visited the site yesterday and was delighted to confirm the nearly £700 million investment in Sizewell C pledged in the autumn statement.
Tom Hunt
There are clearly significant national benefits to Sizewell C in terms of national security, but as a Suffolk MP I am particularly interested in potential jobs creation. I understand that about 10,000 new jobs could be created. I previously worked closely with EDF and Suffolk New College to see how we can ensure that as many local people—and my constituents in Ipswich—benefit from Sizewell C as possible. Will the Secretary of State, in his own time—when he has a little availability—meet me, the principal of Suffolk New College, other education sector leaders and EDF to see how Ipswich people can benefit in a real, tangible way from Sizewell C?
Grant Shapps
My hon. Friend will be interested and happy to learn that I met two apprentices at Sizewell yesterday, who have two of what we expect to be 1,500 new apprentice jobs. He is right to mention 10,000 jobs in the immediate area—perhaps there will be 20,000 across the country—and we expect more than 70% of investment in the project to come to the UK. I will gladly meet him and his colleagues to discuss that further.
Tim Farron (Westmorland and Lonsdale) (LD)
Cumbria’s energy coast, including nuclear, wind, wave and tidal, also has the capacity to create thousands of jobs in our county. When will the Secretary of State make an announcement in respect of his engagement with Cumbria’s energy coast to make best use—
Andrew Bridgen (North West Leicestershire) (Con)
The Secretary of State for Business, Energy and Industrial Strategy (Grant Shapps)
With Sizewell C, we are securing a cheap, clean and reliable supply of energy to supercharge growth—I will provide more details in my oral statement. We have recommitted to increasing public investment in research and development to £20 billion each year by 2024-25, which will supercharge science and innovation, and we are supporting local enterprises and increasing the national living wage by almost 10%, the largest ever cash-terms increase.
Andrew Bridgen
As well as renewables, it is clear that we need to add more baseload capacity, and nuclear is the favourite for that. Hundreds of my constituents work at Rolls-Royce, and many of them work on the development of small modular nuclear reactors. Will my right hon. Friend outline what support the Government are giving to Rolls-Royce to develop this technology, which will not only add to the UK’s energy security but deliver a technology that we will be able to export successfully around the globe?
Grant Shapps
Like my hon. Friend, I am very keen on small nuclear reactors as part of the solution. We will be launching Great British Nuclear early next year to assist both Rolls-Royce and its competitors. There are other brands out there, all of which have interesting ideas about modular production of nuclear power, which will provide sustainable energy even when the wind is not blowing and the sun is not shining.
Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)
I welcome the Business Secretary to his first oral questions. He is the third Business Secretary we have had this year, and I have to say that lack of stability is the No. 1 complaint from businesses, which genuinely cannot keep track of Government policy in any particular area. If they do know the policy, they feel it could change at any moment if the internal politics of the Conservative party shift one way or the other. Does he accept that political instability has very real consequences for economic stability?
Grant Shapps
I very much welcome the hon. Gentleman’s welcome, I hope to be in post for a long time, not to disappoint him in any way. His talk about the instability of policy is a bit rich, as many Labour Members sat on the Front Bench under their previous leader, who believed in a whole bunch of different things. Even the shadow Secretary of State for Climate Change and Net Zero, the right hon. Member for Doncaster North (Edward Miliband), once said it is impossible for this country to get to 40% renewable energy—he called it “pie in the sky.” Right now we are producing 43.1% of our energy from renewables. That is from a party that is consistent.
Jonathan Reynolds
Respectfully, I think the Business Secretary needs to focus a little bit more on his own side and the humility required to do that.
On a more positive note, this Saturday is small business Saturday. A future Labour Government will tackle the issue of late payments to small and medium-sized enterprises by making audit committees report on public companies’ payment practices. With more than £20 million waiting to be paid at any one time, this is a change that will make a real difference and one that is backed by the Federation of Small Businesses. We could, however, implement it sooner by amending the draft audit reform Bill when it comes forward. Would the Secretary of State support that change?
Grant Shapps
I agree that payment for small businesses is very important, particularly when it is not done by larger companies that have the resources. That is one of the reasons why the Government have led the way to make sure that, when small businesses deal with Government, payments are made quickly and efficiently. The Under-Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) is looking at a whole range of different things to ensure that we speed up the culture of late payments to small businesses, and he will be saying more about that very shortly.
Elliot Colburn (Carshalton and Wallington) (Con)
Grant Shapps
My hon. Friend is absolutely right. Labour Members talk about helping businesses, but that is what you get with a Labour Mayor in London, bashing businesses. I would be proud to meet my hon. Friend.
Gareth Johnson (Dartford) (Con)
Grant Shapps
That is absolutely right. Voters will have their say. I say no taxation without representation.
Margaret Ferrier (Rutherglen and Hamilton West) (Ind)
Greg Smith (Buckingham) (Con)
Grant Shapps
I do enthusiastically support our SAF—sustainable aviation fuel—industry. Actually, it is a little known fact that last year at COP26 we sent more than 500 aircraft home with sustainable aviation fuel in their tanks, and this country has set a more ambitious target for sustainable aviation fuel than elsewhere, with 10% by 2030.
Sir Stephen Timms (East Ham) (Lab)
The Groceries Code Adjudicator has done a good job over the past 10 years, leading to a big fall in the number of breaches of the fair purchasing code, but bad practice is still rife in the fashion industry, with UK fashion retailers among the worst offenders. The Environmental Audit Committee called for a garment trade adjudicator. Will Ministers bring that proposal forward?
Virginia Crosbie (Ynys Môn) (Con)
Grant Shapps
I can confirm that that is the intention with Great British Nuclear. I know that areas such as Wylfa Newydd—if I am pronouncing it correctly—in my hon. Friend’s constituency could well be in line to benefit. However, as she can tell from my Welsh pronunciation, I suspect that I will be on the English side tonight.
Mr Virendra Sharma (Ealing, Southall) (Lab)
Yesterday, I hosted a roundtable meeting for businesses in my constituency. They were worried about late payments and a Government who are not helping them. Fifty thousand businesses close every year due to late payments, and small businesses account for two thirds of UK private sector employment. Will this Government act before the worst of the Tory-led recession bites to save millions of jobs?
Henry Smith (Crawley) (Con)
Grant Shapps
My hon. Friend will be reassured to know that I did know that he would have a topical question, and the answer to it is yes.
Feryal Clark (Enfield North) (Lab)
Recently, a Premier Inn hotel in my constituency threw out one of their visually impaired guests, Ms Angharad Paget-Jones, and her guide dog Tudor in the middle of the night because they refused to believe, despite being shown identification, that Tudor was a guide dog. Can the Minister tell me what action his Department is taking not only to ensure that businesses are complying with the Equality Act 2010, but to go after those who show frank disregard for it in practice?
Alex Cunningham (Stockton North) (Lab)
A few months ago, CF Fertilisers in Billingham ceased ammonia production there because of the high gas price. Now Mitsubishi, just a few hundred yards along the road, is consulting on the closure of one of its plants, with the loss of hundreds of direct and contractor jobs, for the same reason. Is the Minister aware of that latest blow to Teesside, and what is he doing to help firms such as Mitsubishi?
Grant Shapps
I was up in Teesside the week before last, and I have been keeping in close contact with what is happening there. The good news is that there are new jobs coming about in new industries, including new industries supplying electric battery manufacturing, which are available because this country is outside the European Union and able to produce new rules that will allow things such as green lithium to thrive here and provide up to 8% of Europe’s entire needs. New jobs are coming to Teesside.
Stephen Metcalfe (South Basildon and East Thurrock) (Con)
As my right hon. Friend will know, maths and higher maths is often the foundation skill upon which other innovative technologies are built. Can he therefore tell the House what steps his Department is taking both to fund higher maths and to give people the skills they need in maths to help us to reinforce our status as a global science power?
Newport Wafer Fab
Grant Shapps Excerpts(2 years ago)
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Urgent Questions are proposed each morning by backbench MPs, and up to two may be selected each day by the Speaker. Chosen Urgent Questions are announced 30 minutes before Parliament sits each day.
Each Urgent Question requires a Government Minister to give a response on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
Ruth Jones (Newport West) (Lab)
(Urgent Question): To ask the Secretary of State for Business, Energy and Industrial Strategy to make a statement on the sale of Newport Wafer Fab.
The Secretary of State for Business, Energy and Industrial Strategy (Grant Shapps)
On 25 May, the then Secretary of State for Business, Energy and Industrial Strategy called in Nexperia’s acquisition of Newport Wafer Fab for a national security assessment under the National Security and Investment Act 2021. Following further detailed and thorough consideration, on 16 November, I exercised my powers under the Act to make a final order requiring Nexperia to divest of at least 86% of its shareholding in Nexperia Newport, formerly Newport Wafer Fab.
My decision follows a quasi-judicial process that ensures that all relevant matters are taken into account and that the decision is made fairly. I am sure that the House will understand that I am unable to go into further detail about the national security assessments and implications that informed the decision, nor can I go into further detail about the final order.
What I can say is that the final order requires Nexperia to follow a set process leading to divestment within a specified period. This order has been shared with Nexperia and I published a notice summarising it as well. My officials, with the support of other Departments, will actively monitor compliance with the requirements set out in the final order and ensure that the national security risks continue to be mitigated effectively.
The National Security and Investment Act enables us to continue to champion open investment while protecting national security. Hon. Members can be assured that although we are unashamedly pro-business, the Government will not hesitate to act where there is a risk to UK national security. The UK has a number of strengths in the semiconductor sector, including in south Wales, and the Government aim to set out our semiconductor strategy soon to enable this technology to further support the global economy and national security.
Ruth Jones
Like many people in Newport West, I am deeply concerned by the decision made by the Secretary of State to order Nexperia to sell Newport Wafer Fab at this time and in this way. Nearly 600 people, with just one month to Christmas, have had the most unacceptable shock and worry heaped on them by this Government. We have heard so much about a commitment to levelling up, but this decision made by Tory Ministers is a disgraceful exercise in levelling down Newport West and south Wales.
Ministers have raised concerns about national security, despite the acquisition being cleared by two previous security reviews, including that by Sir Stephen Lovegrove, the former National Security Adviser. Nexperia, with the interests of its employees driving it, has proactively sought to deliver a range of far-reaching remedies that, if accepted, would fully address the Government’s concerns, but Tory Ministers have chosen not to enter into a meaningful dialogue with Nexperia or even to take the time to visit the site in Newport West.
I have been informed that Nexperia will now challenge the order, and will do everything possible to keep the factory operating and protect its employees in south Wales. They have my support. I am concerned that Ministers have chosen not to listen to my constituents, and have instead taken a decision that now puts their livelihoods and their families, as well as more than £100 million of taxpayers’ money, completely and unnecessarily at risk.
Nexperia has operated in the United Kingdom for nearly 100 years, and it has been at its Manchester site since 1970. Since April 2021, Nexperia has invested £160 million across the Stockport and Newport sites to expand their capacity and introduce new equipment. This is a long-term, well-established relationship, and the Secretary of State has ripped it to shreds. So I would like the Secretary of State to tell us: what discussions has he had with the Welsh Government and Newport City Council about the support Whitehall will provide to mitigate the impact of this decision on our local economy; what assessment has been made about the impact of this decision on my constituents; what specific discussions have Ministers had with the management at Nexperia; and will the Secretary of State publish the security assessment that prompted this decision?
Lastly, I want to pay tribute to the Nexperia Newport staff association, which wrote to the Secretary of State last Thursday. It has made clear its anger and sense of betrayal. Will the Minister agree to meet me and members of the staff association at the earliest opportunity? This decision does not just affect the people of Newport West; its effects will reach all corners of the United Kingdom for years to come.
Grant Shapps
The hon. Lady is quite right to be a doughty defender of her constituents, and I acknowledge that it will be a concerning time for 500 or so employees. She is not privy to the information that I have had to weigh up to come to this national security decision, which I have done with the utmost diligence and taking all of the factors into account; nor, I am afraid, can I accede to her request to publish that information. I would point her to the fact that the then shadow Business Secretary, the right hon. Member for Doncaster North (Edward Miliband), at the time of this takeover did actually call on the Government to use powers under the National Security and Investment Act to scrutinise the takeover, which I have done. In answer to her question about what the Government are doing, we had last week the £1.6 billion confirmation from the Chancellor for the nine Catapults, of which the Compound Semiconductor Applications Catapult in Wales is a part.
Sir John Whittingdale (Maldon) (Con)
I welcome the measures that the Government have already taken in the National Security and Investment Act to protect critical national infrastructure companies from overseas control, but does the Secretary of State agree that it is important we do not just shut the stable door, and that where we become aware that companies may have already come under the control of hostile overseas states, we act against those as well?
Grant Shapps
My right hon. Friend is absolutely right about this. The interesting thing is that the National Security and Investment Act did not exist when this original takeover took place, which puts this in an unusual category of being a retrospective piece of work. I believe, on the basis of the information that now comes to us and the ability to use the Act, that we would always take these decisions up front. The difference here is that we have had to look at it through a retrospective process. However, I can assure my right hon. Friend and Members across the House that we take these decisions very carefully and cautiously. We have now looked at nearly 100 such decisions, and it is unusual for us to take action to this extent overall.
Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)
I welcome the new Business Secretary to his responsibilities in the House, and I congratulate my hon. Friend the Member for Newport West (Ruth Jones) on securing this urgent question and on her tireless advocacy for her constituents on this matter. I welcome the fact that a decision has finally been made on Newport Wafer Fab, but the chaotic process and the lack of strategy from the Government have left workers and businesses facing a great deal of uncertainty that the Government are now honour-bound to rectify.
Nexperia first announced a takeover of Newport Wafer Fab in July last year. It has taken 16 months for the Government to make this decision. In April, the Foreign Affairs Committee was forced to conclude that the review had
“not, in fact, been started.”
Finally, the Government have decided to block the transaction. Meanwhile, jobs have been left hanging in the balance, and the costs of unwinding the deal have risen over that time. We also have to question why we are in this situation in the first place. The south Wales compound semiconductor cluster employs thousands of workers in one of the world’s most strategic sectors, but we are still yet to see the long-awaited semiconductor strategy, which has been 22 months in the making.
Of course, the Government scrapped their entire industrial strategy altogether when the current Prime Minister replaced it with the hastily cooked-up plan for growth. That has already been replaced, because it may have been the sixth plan in 12 years but it was the first to cause a financial crisis. Meanwhile, firm after firm in the semiconductor sector has been sold off to foreign businesses. It genuinely has not been easy even to understand what Government policy in this area is, so may I ask the Secretary of State these questions? First, why has this decision taken so long, when the Government have known everything about the transaction for at least 16 months? Secondly, what is he specifically going to do to secure the future of the jobs in Newport Wafer Fab and ensure we retain this capacity in the UK? Finally, when will the Government come forward with a proper plan for growth, including for key industrial sectors? Decisions such as this, while at times necessary, must form part of a coherent and consistent policy and must be made promptly. All businesses get from this Government is chaos and crisis, and it is not good enough.
Grant Shapps
I think that is a rather unfair assessment of what has happened for this reason: the National Security and Investment Act 2021 only came into existence this January, so to say that there have been 16 months during which we have not made any decisions is simply untrue. Secondly, nobody would expect us, particularly with 500 jobs at stake, to rush to a decision over something this important. That is what Labour seems to be suggesting it wants to do.
I want to make sure that jobs are protected. We will be working with Nexperia on this sale to ensure that plans are, I hope, put in place that do that. I have already referred to the wider investment in semiconductors, of which a large proportion is coming to Wales, so the Government already have a strategy in this exact area. It is one of the reasons why we have 100 companies carrying out work in semiconductors.
Sir James Duddridge (Rochford and Southend East) (Con)
More than five years ago, I visited this business as a Minister. It is an excellent business, with cutting-edge technologies. It employs local people, but also international people in high-quality graduate and PhD jobs. While I agree that national security should come first, I urge the Secretary of State to work across every single Department to ensure that we retain those skills that are so needed in the United Kingdom and in particular in this area represented by the hon. Member for Newport West (Ruth Jones).
Grant Shapps
My hon. Friend will be interested to hear that I think I read a report of his visit to the site. I have taken every opportunity to understand what is happening in Newport, and his experience was helpful. It is also worth the House knowing that, unlike prior to the takeover—I hear some Members still referring to “Newport Wafer Fab”—it no longer does “fab”. What it now does are wafers, and it manufactures purely for Nexperia, and most of that does not end up in this country, unless it happens to be re-imported. The jobs and skills are something we are keen to preserve, and we will be working very closely to ensure that there is a future.
Grant Shapps
The Department for Digital, Culture, Media and Sport holds the plan itself. It is worth the House and the hon. Gentleman knowing that the UK has several strengths in semiconductors. The sector already includes the design of compound semiconductors and academic research, and south Wales is a very important cluster within that. I have already referred to the additional money that the Chancellor announced from the Dispatch Box as recently as last Thursday, and we know that some of that money will head to Wales. It is also important for the House to know that in this context Newport Wafer was only a very small proportion of output to UK companies directly, and it is important that we make sure that capacity is maintained. It is also important to understand what that business was doing and how it was involved in our supply chain.
Mary Robinson (Cheadle) (Con)
Nexperia has operated a manufacturing site in my constituency for more than 50 years, and is a major employer in the Cheadle area, with some 1,000 people working at the Pepper Road site. They are understandably concerned by the Government’s decision. Could the Secretary of State please set out what measures he is taking to ensure that we safeguard Cheadle jobs and maintain the UK’s role in the vital semiconductor industry?
Grant Shapps
We welcome inward investment into this country. We have one of the most open provisions for inward investment of any country in the world, and one of the most open economies, so there is no reason beyond this decision for people to over-interpret what has happened here. This is a specific set of circumstances under a specific final order. There should not be a read-across. I can perhaps reassure my hon. Friend’s constituents, through her, that this decision does not form any kind of change in their relationship.
Tonia Antoniazzi (Gower) (Lab)
Is the Secretary of State concerned that the highly skilled employees at Nexperia Newport have threatened to walk out if the previous owner or an investment fund takes over ownership?
Grant Shapps
I have seen the reports that the hon. Member refers to. I do not want to get ahead of ourselves. In the next few weeks, Nexperia will provide its plan for the business, which we will come back to. I hear what she says, it is on the record and I am very conscious of her comments. In the end, it is of course a private business. The Government’s involvement is to look at the national security aspects of it, but as a Government we want to see good employers everywhere. In fact, we have backed five separate private Members’ Bills in this Session to improve the welfare of workers, and it is something that we take very seriously.
Mrs Heather Wheeler (South Derbyshire) (Con)
I congratulate the Secretary of State on making this decision. As he knows, I have been closely involved and tried to make sure that the correct decision was taken. There are many spin-offs from our universities and UK companies that are very interested in taking semiconductors to the next stage. Can I have his assurance that the Government will look widely at who may take the business forward and keep semiconductor build business going in the UK?
Grant Shapps
Although we have not met up, I pay tribute to my hon. Friend’s work in this area. As I have said, we are of course very keen to ensure that we have semiconductor manufacturing in this country. That south Wales cluster is enormously important, but there are other areas that share many of the skills. We will say more about this soon, not least because £1.6 billion has gone into the UK’s nine Catapults. That is an increase of 35% on the funding cycle, and semiconductors are a very important part of more than one of the Catapults.
Liz Saville Roberts (Dwyfor Meirionnydd) (PC)
During a recent session of the BEIS Committee’s inquiry into the UK semiconductor industry, a representative from Nexperia indicated that there is space at Newport Wafer Fab for expansion and diversification, and we all know that we are becoming ever more reliant on semiconductors. Will the Secretary of State therefore commit not only to saving the 500 jobs currently at Newport but to bringing forward the investment necessary to transform the Newport site into a semiconductor hub that can help sustain supply chains across the UK and, in turn, sustain national security?
Grant Shapps
It is worth saying for the House’s benefit —I am sure the right hon. Lady knows this —that this got going in south Wales partly through £1 billion of Government investment. Of course, it is important that we keep the investment flowing. This is principally a private business and I understand that Nexperia has indicated that it would like to expand it further. For reasons of national security, that will now happen, I hope, under the auspices of another private business. However, the Government stand four-square behind the principle that we should have high-tech industries and high-tech, well-paid jobs. That is something that we will pursue.
Sir Geoffrey Clifton-Brown (The Cotswolds) (Con)
Mr Deputy Speaker, it gives me no pleasure whatsoever to say that you will be aware that Mr Speaker granted me an urgent question on 16 July last year begging the Government to use their powers under the Enterprise Act 2002 and the upcoming security Act not to allow the sale to the Chinese-dominated Nexperia company. While there was a different Minister and that was a different time, I welcome my right hon. Friend to the Ministry, in his important job as Secretary of State, and welcome his decision to use the National Security and Investment Act 2021 to block the sale and to force the company to sell off its 86% share in it. Can he give the House any indication: in what way will the sale take place and how are the jobs— as others have said, it is just before Christmas—likely to be protected?
Grant Shapps
I thank my hon. Friend, who was key in persuading the Government to take forward the national security and investment legislation. That has been important in this case—definitive, in fact. Although he may have been right at the time, I understand we did not have any powers to block the sale at that time. I therefore congratulate him on his foresight. I do not think we could have done anything other than wait for the powers afforded to us in January and the action that I took very recently.
With regard to the next steps, I am afraid that I am bound by the National Security and Investment Act not to go into terrific detail, other than to refer to what I have already published and made available to the House with regard to the final order. However, there is in essence a process by which the company will report back to me on its plans and, over a period—it may well take several months—the sale of the company will take place.
Navendu Mishra (Stockport) (Lab)
Nexperia is a large employer in the local authority of Stockport, so I welcome the urgent question secured by my hon. Friend the Member for Newport West (Ruth Jones). From the nuclear industry to Huawei, the Government seem to be lurching from crisis to crisis. The reality is that they do not have an industrial strategy. Will the Secretary of State come back to the House urgently with an industrial strategy that will deliver growth and certainty for the people who work in the sector? This is causing significant problems for people employed by the business in Stockport and Newport.
Grant Shapps
We do not agree with the hon. Gentleman’s characterisation. Private businesses run these operations and 100 different companies have invested in semiconductor devices. Five thousand UK companies, 90% of which are small and medium-sized enterprises, are designing and making electronic components, devices, systems and products. I know that there are still some Opposition Members who think that the Government should take the lot over, but that is not a sensible way to go about doing business. I have already explained how the Government not only invested in what happened in south Wales but are investing more, based on the autumn statement that we heard from the Dispatch Box on Thursday. Be assured that more money is coming, but, in the end, it is for the private sector to decide how to invest it.
Mark Pawsey (Rugby) (Con)
There is no overestimating the importance of the semiconductor industry and, although the UK has only a small proportion of global turnover, it is worth £8 billion to the UK and we have leading capabilities in intellectual property, research and development, and particular leadership in compound semiconductors. That is why any acquisition or sale in the sector must be closely looked at. Does the Secretary of State agree it is important that we control access to the high-tech sector knowhow we have developed, retain that expertise in the UK and take appropriate action to protect UK interests?
Grant Shapps
My hon. Friend is absolutely right—it is about protecting UK interests. I know he has great expertise on the issue from the Business, Energy and Industrial Strategy Committee, so he understands what he is talking about. It is very important, for example, that the critical mineral strategy is supporting throughout, including with semiconductors. In the end—I think the whole House will agree with this—if there is a trigger that requires us to take national security measures, and if we judge that the bar has been hit and we are concerned enough, not to take remedying action would clearly be a dereliction of duty. That is the reason we have stepped in and acted. All the other points are right. We want to see the continuation of semiconductor production, but we must take national security first. My hon. Friend is absolutely right about that.
Jessica Morden (Newport East) (Lab)
Well done to my hon. Friend, and neighbour, the Member for Newport West (Ruth Jones) for securing this urgent question. Many of the 500-plus employees live in Newport East have been in touch over the weekend. I reiterate the great uncertainty that they now feel as a result of this decision. One would have thought that at least one of this year’s three Secretaries of State for Business, Energy and Industrial Strategy would have met the company to understand the impact of this decision on people’s lives. The Secretary of State has not answered the question, so I ask again: what is he going to do to protect jobs?
Grant Shapps
First, because of the process there is not quite as much freedom as the hon. Lady sets out for the Secretary of State to judge a quasi-judicial case such as this in the way she describes. I agree with her and sympathise with everybody who will be concerned about their jobs. I happen to think that their future remains bright. On the requirement for those skilled jobs, demand is very high and, through this process, as Nexperia comes back with its plan, we will be looking for a plan that helps to protect those jobs.
Stephen Crabb (Preseli Pembrokeshire) (Con)
I commend my right hon. Friend for the careful way he has approached this sensitive issue. I know he is acutely aware of the importance of those skilled jobs for south Wales. Will he reassure the House that he will move as quickly as he is able to under the strictures of the legislation to remove the cloud of uncertainty that is hanging over the workforce, and demonstrate that he understands that one part of Britain can precious ill-afford to lose these types of high-quality jobs, and that is south Wales?
Grant Shapps
I pay tribute to my right hon. Friend, who is on the Welsh Affairs Committee as well, I think—[Hon. Members: “He’s the Chair.”] With correction. Either way, he knows a lot about this subject and is therefore an expert in it. On the timetable that he asks about, it is somewhat prescribed in the final order. I cannot go into excessive detail about it. There is a balance between trying to move too quickly and therefore putting the business and jobs at risk, and moving at the appropriate pace, which I hope will see a successful outcome. I reassure my right hon. Friend, and the whole House, that I will be working closely on this issue to ensure that we bring certainty as soon as we can, without jeopardising what needs to happen next.
Wayne David (Caerphilly) (Lab)
Is the Secretary of State aware of the proposals that have come forward from the company directly to address the Government’s concerns? Those include the offer for the Government to oversee the reproduction process. Is he fully aware that this company and production process is of central importance not just to Newport, important as that is, but to the whole south-east Wales economy?
Grant Shapps
The Government would not be looking to take over and run the semiconductor business. However, the hon. Gentleman makes an important point about its place in the chain. It is worth mentioning, because some people imagine that it still does what it did when it was Newport Wafer Fab—build semiconductors designed by others and essentially be a factory for a lot of other people—that that is not what it does under Nexperia; it produces for one specific owner, and most of the products go abroad. I am keen to make sure that the entire supply chain is maintained, but the hon. Gentleman will understand, as I am sure everybody in the House does, that national security has to be the No. 1 consideration while we work through this issue.
Geraint Davies (Swansea West) (Lab/Co-op)
If there is a national security issue, that must be because this is a strategically important asset for the future growth of the economy. That being said, if we do not have a strategy for semiconductors in place, which the Secretary of State does not, the Government are surely duty-bound to invest immediately—to secure current jobs and build future jobs, perhaps through an equity share, and to ensure that the taxpayer can benefit from future income streams from this growing market—rather than to destroy people’s jobs. The Secretary of State’s idea of protecting national security is to destroy the foundations of our economy, which is ridiculous.
Grant Shapps
I am not sure whether the hon. Gentleman is calling for the Government to run the semiconductor factory. If he is, on the other hand, asking for a plan, he will need to be patient and to wait for the Nexperia process to complete. I very much hope that he and I will be able to stand here in due course and agree that the process has ended in a good place.
I just want to say to the House—because I think this has been slightly missed—that I do not take these decisions easily. Nearly 100 cases have been looked at under the National Security and Investment Act 2021. There have been only 10 final orders, of which this is one. Two acquisitions have been blocked. Only one has been unwound—in other words, there has been a retrospective decision—and that is this one. That is how carefully we take these decisions. I do have confidence that what happens next will be in the best interests of the people who work in south Wales and of semiconducting in this country.
Richard Foord (Tiverton and Honiton) (LD)
I understand that BEIS is expecting up to 1,830 voluntary notifications per year. In the first three months of the implementation of the Act, there were perhaps 222. Is the Secretary of State learning lessons from the implementation of the Act to ensure that the net is fine enough to block acquisitions that are of national security concern but not so tight as to squeeze the brakes on inward investment?
Grant Shapps
The hon. Gentleman is absolutely right: this is a new Act, so we are seeing how it works. As I mentioned a moment ago, final orders are extremely rare. An awful lot of the notifications—particularly the voluntary notifications—are looked at and then passed through very efficiently and very quickly, and I look at them most days of the week in my role. That is not causing any undue bureaucracy; we are looking at the notifications very quickly. The case before us is exceptional, inasmuch as it is retrospective, with the Act having come in only in January. In the end, we have to take a decision, and this House decided that it wanted to look after national security and investment in a sound and sensible way. The Act is performing very well in that regard, and those who criticise have perhaps not looked at—or are perhaps unable to be familiar with—the reasons why we are acting in just a small number of cases.
Jim Shannon (Strangford) (DUP)
I thank the Secretary of State for taking decisive action to block the sale of Newport Wafer Fab to state-backed Chinese Nexperia on national security grounds. Will he assure the House that he will take all necessary and proportionate action to mitigate the risks to the UK’s economic security now and in the future and to protect the UK from all geopolitical leverage on the part of the Chinese, who are hellbent on taking over vital security companies in the United Kingdom of Great Britain and Northern Ireland?
Grant Shapps
I should point out that we are very keen to see inward investment—a point that also ties in with the question that the hon. Member for Tiverton and Honiton (Richard Foord) asked. We are one of the most open countries in the world, as I mentioned, and we are unashamedly pro-business, but we want to make sure that, where necessary, national security is considered. There was a point at which that was not part of the process; I am pleased that it is now. I think that the National Security and Investment Act 2021 is performing well in that regard and that we are getting the right balance between encouraging investment, particularly in non-sensitive areas, and applying the Act where required. The Act is not about China; it looks at every acquisition in its own right.
Mr Deputy Speaker (Mr Nigel Evans)
I thank the Secretary of State for coming to the House and responding to questions for more than half an hour.
Bill Presented
Northern Ireland (Executive Formation Etc) Bill
Presentation and First Reading (Standing Order No. 57)
Secretary Chris Heaton-Harris, supported by the Prime Minister, Oliver Dowden, Secretary Michael Gove, Secretary Alister Jack, Secretary David T. C. Davies and Mr Steve Baker, presented a Bill to make provision to extend the period following the Northern Ireland Assembly election of 5 May 2022 during which Ministers may be appointed and after which the Secretary of State must propose a date for another election; about the exercise of functions in the absence of Northern Ireland Ministers; to confer powers on the Secretary of State to determine salaries and other benefits for Members of the Assembly in respect of periods in which the Assembly is not functioning; and to confer powers on the Secretary of State to set the regional rate in Northern Ireland.
Bill read the First time; to be read a Second time tomorrow, and to be printed (Bill 195) with explanatory notes (Bill 195-EN).
Bulb Energy Administration and Energy Bill Relief Scheme
Grant Shapps Excerpts(2 years ago)
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The Secretary of State for Business, Energy and Industrial Strategy (Grant Shapps)
I am today updating the House on the mergers and acquisition process for Bulb Energy Ltd (‘Bulb’) in special administration.
Bulb Energy Ltd (‘Bulb’) was taken into special administration by an order of the court on 24 November 2021. Ofgem applied to court, with the consent of my predecessor but one, my right hon. Friend the Member for Spelthorne (Kwasi Kwarteng), based on their determination that the special administration regime (SAR) was the most appropriate route for protecting Bulb’s circa l.5 million customers in the circumstances prevailing at that time—a recommendation which had subsequent BEIS accounting officer and ministerial concurrence.
The court appointed three individuals from Teneo Financial Advisory Ltd (‘Teneo’) as joint energy administrators and, following an application by Teneo, directed they enter into the circa £l.7 billion funding agreement with BEIS to support the achievement of their statutory objective of ensuring continuity of supply to Bulb’s customers at the lowest practicable cost until such time as the company may be rescued, or the business transferred to another company or companies. Bulb’s parent company, Simple Energy, was taken into “normal”—not special—administration on the same date by their secured creditors.
The energy administrators and their MSA advisers have delivered a competitive and extensive sales process over recent months, culminating in their recommendation to transact Octopus Energy’s bid as the optimal way to achieve their statutory objectives. Their recommendation has been reached after an extensive negotiation process to secure the best terms in the circumstances and detailed analysis of the counterfactual options, all of which show less favourable anticipated outcomes and carry significant operational and execution risks.
I have therefore approved the Octopus bid transaction and associated amendments to the existing funding facility and establishment of their new loan facility.
The BEIS-led consultation process on the energy transfer scheme (ETS) has commenced. Subject to Government approval, the energy administrators will arrange for a court hearing date for commencement of the ETS and to enable the completion of the transaction as all agreements take effect by mid-November.
Energy bill relief scheme (EBRS)
Vital businesses, charities, schools and hospitals up and down the country have seen an unprecedented rise in energy prices following Putin’s illegal war in Ukraine, and this new Government will take the difficult decisions when necessary to support our essential British businesses and public sector services. Support has already been introduced to help families with their energy bills this winter, and this new measure will help support growth, prevent unnecessary insolvencies and protect jobs.
The energy bill relief scheme (EBRS) will provide a price reduction for all eligible businesses and other non-domestic customers such as charities, schools and hospitals, who have recently experienced unprecedented rises in gas and electricity prices. The EBRS is a significant Government intervention reflecting the seriousness of the situation we face. It aims to support growth, prevent unnecessary insolvencies and protect jobs.
Subject to the will of Parliament, the price reduction will come into force at the beginning of November 2022 in time to cover energy consumed in October and will apply to the non-domestic customer’s actual gas and electricity consumption. It is intended to run for six months from 1 October 2022 until 31 March 2023. The price reduction will be linked to the wholesale element of a non-domestic customer’s gas and electricity bill. The actual price reduction received will vary depending on the contract type that a non-domestic customer is on, as well as the tariff and volume used. Government will reimburse suppliers in accordance with the scheme.
Funding for the EBRS will be sought through the estimates process. Any future costs for the delivery of the EBRS can only be projections and will depend upon energy usage levels and changes to the wholesale price of energy. As a result, the EBRS will give rise to an uncapped contingent liability. A review of the EBRS will be published after three months to assess effectiveness of the scheme and consider how support might be extended, further targeted, or revised beyond the initial six-month period for non-domestic customers most at risk from inflated energy prices. The Treasury-led review will determine support from April 2023—an update will be provided in due course.
I have laid before Parliament a Departmental minute describing contingent liabilities arising from the energy bill relief scheme (EBRS). It is normal practice when a Government Department proposes to undertake a contingent liability of £300,000 and above, for which there is no specific statutory authority, for the Department concerned to present Parliament with a minute giving particulars of the liability created and explaining the circumstances. If the liability is called, provision for any payment will be sought through the normal supply procedure.
I regret that due to the urgency of this scheme, I have not been able to follow the usual timelines for issuing notice at least 14 parliamentary sitting days before the liability begins to be incurred.
The Treasury has approved spending for this proposal in principle. I will continue to update Parliament on this scheme.
[HCWS348]
Shale Gas Exploration
Grant Shapps Excerpts(2 years ago)
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The Secretary of State for Business, Energy and Industrial Strategy (Grant Shapps)
As the Prime Minister set out when entering office, and in the House yesterday, the Government support the core ambitions set out in the 2019 manifesto. The Government will therefore revert to a precautionary approach and only support shale gas exploration if it can be done in a way that is sustainable and protects local communities. We will be led by the evidence on whether this form of exploration can be done in a way which acceptably manages the risk to local communities.
In the November 2019 manifesto, the Government confirmed a moratorium on shale gas exploration in England with immediate effect. Having listened to local communities and assessed the state of the science we ruled out changes to the planning system. As set out in the manifesto, we will not support shale extraction unless the science shows categorically that it can be done safely.
In line with the British Geological Survey report on the scientific advances in hydraulic fracturing since 2019, forecasting the occurrence of large earthquakes and their expected magnitude owing to shale gas extraction remains a challenge with significant uncertainty.
The Government are confirming today that we will again take a presumption against issuing any further hydraulic fracturing consents. This position, an effective moratorium, will be maintained until compelling new evidence is provided which addresses the concerns around the prediction and management of induced seismicity. This is in line with the commitment made in the 2019 Conservative manifesto.
While future applications for hydraulic fracturing consent will be considered on their own merits by the Secretary of State, in accordance with the law, shale gas developers should take the Government’s position into account when considering new developments.
[HCWS346]
A Green Industrial Revolution
Grant Shapps Excerpts(4 years, 10 months ago)
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The Secretary of State for Transport (Grant Shapps)
Madam Deputy Speaker, let me congratulate you on being re-elected to your post, and say how fantastic it is to be closing the debate on Her Majesty’s most Gracious Speech this evening with you in the Chair.
There have been many eloquent and good contributions to this debate. They clearly set out the huge challenges that we face in decarbonising our economy. One point I would make straight off the bat is that, although there has been quite a bit of heat and light in this debate, there is actually an awful lot on which we entirely agree. This House has, after all, voted under this Government to get to zero carbon by 2050. There is almost an auction of ambition about how we get there in the fastest way. It is right and proper that we challenge each other with different ideas, many of which have come through the contributions this afternoon, in order to come up with new ideas. Some of them are, I think, ideas that could be taken further, particularly in the field of transport. Other ideas, I know, have problems. None the less, all were presented and suggested in the best possible light and, because of that, I think that all parts of the House will agree that this has been a very good and useful debate this afternoon.
It is the first time that I have been at this Dispatch Box since yesterday’s Flybe announcement. I just want to touch on that matter for a moment. Flybe is an airline that flies 9 million people a year. It connects some of the most remote parts of our country—in fact, some of the most remote parts of our nation. I was pleased to see that the union, the British Airline Pilots Association, welcomed the rescue, and I was somewhat surprised to hear the Opposition spokesman say that he is not keen on this rescue, because it would have quite literally left quite a large number of communities completely stranded.
Andy McDonald
I am grateful to the Transport Secretary for giving way. Had he been in the Chamber yesterday when I spoke on the issue, he would have heard me say that I welcomed the Government taking action in respect of Flybe and recognised the importance of Flybe services to our communities right across the country. How we go about it is the important thing. The International Airlines Group is particularly interested in the package, and it will be asking why one corporate entity has been preferred over another. It is a question for him to address, but I hope that he accepts that it is necessary for intervention to take place.
Grant Shapps
I apologise to the hon. Gentleman and thank him for putting the record straight. I was not in the Chamber yesterday because I was dealing with the issue itself, but it sounded to me, from his comments earlier, that he regretted the rescue of Flybe, which I was surprised about because there are 2,400 jobs at stake and communities that would have had no other way of being connected. Just as an example of this, there are 46 Flybe routes that no other airline covers. There are 11 destinations that have no rail links whatever, and a further 12 that it would take more than six hours to get to. It was absolutely the right thing to do because it helps to connect our communities and level up our country. That is the right approach for a responsible Government when there is a strategic national interest, which is what makes this different from previous airline failures.
None the less, because the issue has been raised in this afternoon’s debate, I will say that we want to see aviation become much greener. This is an enormous challenge and, indeed, as many Members have said, an enormous opportunity for this country. If we can get to the front of that technological research and development, we can offer electric planes to the world. Right now, it is good to see that the University of Cranfield, among other places, is working on an aircraft—a Britten Norman aircraft—which is the only British-manufactured general aviation aircraft, a commercial passenger plane, being converted to an electric aircraft, which will fly in the Scottish highlands and do the island hops. It will be the world’s first commercial electric aircraft, and that is happening in Britain. Across the House, we should all be doing everything we possibly can to get to the forefront of electric aviation and, probably in between then and now, hybrid aviation. It is a big part of my work. Members may think I am absolutely obsessed with aviation, but that is where ideas and new technology will come from, so it is right to focus on it.
Vicky Ford
I am grateful to my right hon. Friend for mentioning Cranfield University, because I recall being asked to dig the first turf in the building of that facility about a decade ago. It just shows what can happen in 10 years. Does he agree that we need to harness the power of consumers? Some low-cost airlines give consumers the opportunity to carbon offset, but Flybe does not. Will he join me in encouraging airlines to give consumers at least the option to offset?
Grant Shapps
I agree that it is a great idea for airlines to offer carbon offsetting, but although that is a good first step, I want to go further. We have the opportunity, the brains and the capacity in this country to invent the future of flight, just as we helped in so many ways to invent flight initially. I want us to focus on that, and a lot of money and research is going into it now. At Cranfield, there is the E-Fan X plane—a BAe 146 aircraft built by de Havilland in my constituency back in the day, which is being converted into an all-electric aircraft in a project sponsored by, I think, Airbus and Boeing. This is a fantastic opportunity and we must take it.
Several hon. Members rose—
Grant Shapps
If hon. Members do not mind, I will make a little progress. I am right at the beginning of my speech and there will be plenty of opportunities to intervene.
Caroline Lucas
If we can get some electric planes, I will be happy, but does the Secretary of State accept that, right now, the increasing number of individual flights is outweighing the efficiency gains in each individual flight? In other words, improvements in energy and fuel are undermined by growing demand. Does he accept that until we get to the sunny uplands of electric planes, demand needs to be constrained, and that the blanket approach of APD will not constrain demand?
Grant Shapps
Let the Member who has never flown argue on that subject. I mean no disrespect, but the reality is that we have to reach an in-between place involving hybrid fuels. We probably have to go through a hybrid stage, as we have with road vehicles, where we use biofuels and other things. The Department is doing a huge amount of work in that respect.
Grant Shapps
With hon. Members’ permission, I will make a little progress first. I have not even touched on anyone else’s speech yet, so let me talk about this afternoon’s debate. We know that global warming is one of the biggest threats to humanity. That is why tackling climate change is so important, and my right hon. Friend the Secretary of State for Business, Energy and Industrial Strategy set out some of the measures we are taking.
The contributions to the debate have been particularly impressive, and I pay tribute to the nine Members I noted making their maiden speech today. Each was brilliant in different ways. My hon. Friend the Member for Barrow and Furness (Simon Fell) spoke about the poor rail service in his constituency—I am sorry about that. Other Members mentioned rail services in relation to Northern. The House will be aware that I have been speaking about that recently, and will again very soon. He made a beautifully pitched and calmly delivered speech, showing how much he cares about the community he now represents. Our hon. Friend the Member for Birmingham, Northfield (Gary Sambrook) spoke in great terms about his constituency and everything going on in the community, and did a wonderful job.
The hon. Member for Coventry South (Zarah Sultana) described her constituency with great care, leaving us in no doubt about her passion for it. My hon. Friend the Member for East Surrey (Claire Coutinho) made a fantastic speech, showing great knowledge of subjects including offshore wind. She pointed out that seven of the 10 largest offshore wind farms are here in the UK —a great statistic. The hon. Members for East Lothian (Kenny MacAskill) and for Pontypridd (Alex Davies-Jones) also made their maiden speeches in this debate. My hon. Friend the Member for Bolsover (Mark Fletcher) proposed a statue of the “Beast of Bolsover”, although we do not know how that would be taken. His was a fine speech.
The new hon. Member for Warrington North (Charlotte Nichols) talked about her constituency—the constituency in which I got married, it so happens—with great passion.
Finally, the hon. Member for Sheffield, Hallam (Olivia Blake) also spoke about her constituency very passionately indeed. There were fantastic speeches all around, and all concentrated on today’s subject of green growth.
Reducing carbon in the atmosphere is incredibly important. I know we have had a bit of a debate about it this afternoon because we will say, quite rightly, that our economy has expanded by over two thirds since 1990, but we have managed to cut carbon emissions by more than 40%. I want to point out—because this was questioned during the debate—that these are figures not that we have somehow come to but which have been calculated under the internationally recognised system for assessing the amount of carbon that has been cut. The figures do show a 40% cut since 1990, which is faster than any other G20 country.
We continue to lead the world in this process. We have legislated for zero carbon by 2050, becoming the first major economy to do so. Of course, what happens internationally is important, but I do not accept the argument that just because we cannot control what everybody else in the rest of the world does we should not be making the effort ourselves. It is the right thing to do, and we should be proud of our performance in this area.
We also know that measures have to be viable and practical. It is easy to say that we should just follow Norway, where a number of electric cars are sold. Does the House know why that is so? It is because it does not have a domestic car production facility to protect before the change to electric; it does not produce its own cars. So to all those Members who say, “Look, why don’t we just do it tomorrow? Why don’t we just demand that every car is electric from now on?”, the answer is: because every single factory in every single one of the constituencies affected would be closing tomorrow. We have to work with the industry and help it to make the transition, and that is what this Government are doing every single day of the week.
Let us not forget what this country has achieved so far. We ratified the Paris agreement. More than half our electricity—53%—now comes from low-carbon sources. We fostered green industry, which is now worth £45 billion; and that goes to my previous point that we need to have a period of transition for industry. The new green sector now employs 430,000 people, so it is growing all the time. We are setting a net zero target, and have committed around £2 billion to green growth initiatives. An awful lot is happening.
To manage these great efforts, we know that there has to be a framework—an industrial strategy. The clean growth strategy, which details our carbon-cutting plans through to 2032, is exactly that document. In July we published our green finance strategy to trigger investment in green infrastructure technologies and services, from offshore wind to energy-efficient housing. Of course, the Prime Minister will chair the new Cabinet Committee on Climate Change to help co-ordinate the effort of the whole country to get to zero carbon. Later this year the UK will have the honour of hosting the climate change summit in Glasgow.
Alan Brown
I want to go back to the argument of, “It’s great for Norway because they don’t have a domestic car production industry to protect, so they can do what they want.” What are the UK Government doing to change the domestic car production industry in the UK to allow it to capitalise on this market? The Government were very good at making behind-the-doors, closed deals when it came to advance talks about Brexit, so what are they doing to ensure that these companies can adapt to electric car manufacturing?
Grant Shapps
I am very pleased that the hon. Gentleman has asked that question. There is £500 million to help a gigafactory come to this country. That was not done behind closed doors; we announced it publicly. I am sorry he had not spotted the announcement. This is a very positive way of ensuring that more car production comes here. I should also let him know that one in five electric cars sold in Europe last year were made in the United Kingdom—made right here.
Our support for the electrification of vehicles is second to none. Let me give some examples. We now have more charging locations in petrol stations, as one of my hon. Friends mentioned. We have over 200,000 plug-in chargers in home locations. We have much more to do, though, and that is why both through the money already announced—£400,000—and another £1 billion in our manifesto we are pledging to put a lot more resource into having more charging locations so that people do not have as much range anxiety when they drive one of these vehicles. The need for that was one of the key points made by Members across the House.
I know exactly why people are concerned. I drive an electric car, as I have mentioned before. I know the anxiety of wondering about whether one will get to one’s next location, but the good news is that in reality, rather than just the concern about it, I have never found it to be a problem. Every single service station on the motorway network in this country—now bar one, I think—has electric charging. However, I want that charging to be faster. I want it to be rapid rather than just a so-called fast charge. This Government absolutely share the ambition of this House to get that job done and get it done quicker.
At the UN climate action summit, as Members know, the Prime Minister announced that we would double our contribution to £11.6 billion between 2021 and 2025. That will do a huge amount to assist. I heard someone say during the debate, “That’s not right because it’s coming from international development.” If we do not think it is right to use international development money to save this planet, then I do not know what the money is there for. It is absolutely the right thing to be doing.
I am delighted that the Queen’s Speech includes significant measures to move forward our green programme even further. In particular, the environment Bill will put accountability and practical delivery at the heart of our agenda while providing much-needed certainty for business. The Bill includes measures to improve air quality, restore habitats, increase biodiversity, build a less wasteful economy—hon. Members have mentioned things such as plastic waste, which it will deal with—and better manage our water resources.
Crucially, the Bill will introduce a system for new, legally binding long-term targets in all these critical areas so that central and local government—there has been some talk about how local government fits into this picture—are clear on their legal responsibilities to protect our precious environment. I have been working very actively with local authorities—for example, in the provision of electric car charging points—to ensure that they have everything they need to be able to accelerate this programme as quickly as possible.
Those targets all have a minimum duration of 15 years, because given the scale of the challenge we face, which has been so well articulated by Members across the House, we believe that we have to be extremely ambitious. We have to consider the implications for business, for industry and for the public. We must take people with us as we adapt to this enormous change, use new technology, and make sure that we hit the necessary emission goals, as we will have to do because they will be there in law.
Although air pollution has reduced significantly since 2010 and emissions of nitrogen oxides are at their lowest level since records began, I want to acknowledge a couple of areas where I share the concerns of the hon. Member for Middlesbrough (Andy McDonald). Since energy is no longer the most polluting part of our economy because we produced 53% through renewable sources last year, transport is now the most polluting part of our economy. I think he gave the figure: 27% of all pollution comes from transport, and 90% of that from vehicles. There is a huge prize in solving this problem, and the technology is already here. I heard Members talk about the use of alternative and different types of energy for cars—hydrogen, for example. These technologies are coming along. We have a £28 million programme to further the production of hydrogen vehicles. In transport, it is horses for courses, so heavy items such as trains will work well in future through hydrogen, and lighter items such as cars will work better through electricity. It is a question of developing in all those different ways, and that is what we are determined to do.
There was a very interesting exchange about the amount of NO2 in our atmosphere. A huge amount of these particles come from transport, and although that discussion was about whether pollutants and CO2 are the same thing—they are clearly not—the reality is that if we take a lot of the same steps it will solve the same problems. It is good and right that the Bill we are introducing tackles both those things: fine particulate matter and CO2.
We know that there is a huge amount to be done, and I know that the whole House wants us to get there. One of the most controversial areas is when we end the sale of petrol and diesel cars. I heard a number of calls in the debate to do that earlier than the already pledged 2040. I want to do that. I have spoken about that and we will consult on it, but we need to do it in a way that ensures that people do not end up coming back to the House saying, “What happened to that industry and those car producers in my constituency?” We have to do it in a way that works and takes the whole of the economy with us in the best possible way.
From some of the discussion this afternoon, it may not be obvious that the number of electric cars has grown from just 1,500 a decade ago to 200,000 today. The growth in the last year alone has been enormous. Electric car sales are taking off. I think I am right in saying that we have the second largest market in the European Union for ultra low emission cars.
We are doing an awful lot of things behind the scenes to encourage take-up. For example, if someone goes to pay their road tax on the DVLA site right now, they will see a page that suggests that they might be able to pay less road tax if they transfer to an electric car. I know that there are concerns about the overall costs of buying a new electric car, but I want to make this point. When someone buys an electric car, they will find that their petrol bill disappears—it is replaced by an electric bill, but that will probably be a 10th of the cost. They will find that there is no oil for the car and no servicing for the car, and the car tax may well be much lower. Given that 85% of car buyers buy on a finance package—a personal contract purchase—the overall lifetime experience of owning the car may not be all that different. But I agree that we need to work hard to ensure that, as with solar, where we have seen a 50% cut in the cost, we see the same with electric cars.
This has been an excellent debate. The Queen’s Speech has laid out an exciting programme to prepare Britain for the future, making us a more prosperous yet greener nation. We have a unique opportunity today, after three and a half years in which Brexit has—let’s face it—dominated everything about politics and absorbed so much time and energy. We now have a strong mandate to deliver our vision for a modern, green, growing economy, and that is why I commend the Queen’s Speech to the House.