Oral Answers to Questions

Debate between Kwasi Kwarteng and Alan Brown

Tuesday 12th July 2022 Commons Chamber

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

T5. Last week, I asked the Secretary of State about support for pumped storage hydro, and he let the cat out of the bag when he responded: “It should be stressed that this is a very specific technology to Scotland.”That was a disgraceful comment. It probably explains why Scotland has been overlooked for carbon capture and storage and excluded from the hydrogen village trials. But we do have the highest grid charges in the whole of Europe and we have contributed £400 billion in oil and gas revenue. Scotland is getting exploited, not supported. Is not that the case?

[Kwasi Kwarteng]

That is absolute nonsense. My answer to the hon. Gentleman’s specific question was that pumped storage hydro was something that was particular in Scotland—it was something that happened in Scotland. But as for this general remark about us not supporting Scottish energy, the SNP is the party that has turned its back on Scottish nuclear, which employs huge numbers of people. The SNP has completely abandoned nuclear, it does not care about the jobs, and it does not care about industry in its own country.

Oral Answers to Questions

Debate between Kwasi Kwarteng and Alan Brown

Tuesday 7th June 2022 Commons Chamber

[Kwasi Kwarteng]

Earlier this year I was delighted to announce investment—£210 million as I remember—in Rolls-Royce, and the SMRs, as well as advanced nuclear reactors, represent an exciting development in new nuclear. Looking at Labour Members, I must say that it is gratifying to see nuclear power being defended, as under their watch nuclear power was denuded and derided.

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

Hinkley Point C is 50% over budget and running years late. The Government cannot get investment for Sizewell C, and their impact assessment states that a new nuclear power station could cost £63 billion. Is the former Energy Minister, the right hon. Member for Hereford and South Herefordshire (Jesse Norman), correct to say that it is utter fantasy to pretend that this Government can deliver a new nuclear reactor each year?

[Kwasi Kwarteng]

The strategy is committed to 24 GW, and it is about large-scale nuclear and SMRs, which my hon. Friend the Member for Filton and Bradley Stoke (Jack Lopresti) referred to. It will be a balance, and we feel that we can reach that. It is rich of Scottish National party Members to deride our nuclear programme when they do not even agree with it. They think the whole thing is a complete waste of time. Where else would we find decarbonised baseload? They do not have the answer to that.

Energy Security Strategy

Debate between Kwasi Kwarteng and Alan Brown

Tuesday 19th April 2022 Commons Chamber

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

Clearly, this is not a strategy at all, but a series of high-level targets or rehashed information that the Government have spoken about several times. The reality is that the 2022 energy price cap is 75% higher than the April 2021 price cap, putting 6.5 million UK households into fuel poverty. People are going to die and yet there was no additional support announced to alleviate fuel poverty. How many fuel-poor households does the Secretary of State think is acceptable in modern-day Britain? Will he confirm that less than a third of his £9 billion support package is actually direct money from the Treasury that will not be clawed back?

Charities and energy companies alike are calling for much greater investment in energy efficiency, so why is there no additional funding for that? I am pleased that no new money has been announced for the Secretary of State’s nuclear fantasy. Does he stand by the impact assessment that states that the cost of a new nuclear power station, including capital finance, is as high as £63 billion?

The Government have included a blue hydrogen target, so why is the Acorn carbon capture and storage cluster still a reserve? Why is there no additional funding to match the doubling of the green hydrogen target? The 50 GW offshore wind target is very welcome, but what is the Secretary of State doing to upgrade the offshore transmission network strategy and to take account of the ScotWind leasing round? When, oh when, will they remove the iniquity of the transmission charges that prejudice Scotland, and does he understand the concerns about the new nodal pricing proposal that has been announced?

When will the Secretary of State get to grip with a funding mechanism for pumped storage hydro, so that SSE can get on and complete the Coire Glas project? If the new dash for oil and gas is to provide energy security, will the Secretary of State advise what percentage of North sea oil and gas gets traded and exported and how much goes abroad for refining?

Finally, will the Secretary of State commit to working with the Treasury to publish figures showing how much in additional oil and gas revenues, how much additional VAT from our energy bills and how much additional VAT on the petrol prices increase it has received, so that we can see the Treasury windfall that has happened during this cost of living crisis?

[Kwasi Kwarteng]

I am very grateful to the hon. Gentleman for his barrage of questions; I will try to answer a few of them. His position on nuclear and mine could not be more different, and I am very glad that he is honest and frank about nuclear. I still do not understand what his answer is on decarbonised baseload, in terms of security of supply, but I am grateful for his honesty. He will know that the transmission charges are a matter for Ofgem, and I would be very happy to speak to him and Ofgem about how we can move forward on that.

Russian Oil Import Ban

Debate between Kwasi Kwarteng and Alan Brown

Wednesday 9th March 2022 Commons Chamber

[Kwasi Kwarteng]

My hon. Friend will appreciate that there is a diversity of sources for coking coal; we are not just looking to Russia. He makes an excellent point about critical minerals, and he will appreciate that this is the first Government ever to have a critical minerals strategy. It will be published in the next few weeks, and the Under-Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend the Member for North East Derbyshire (Lee Rowley) is leading on that within the Department.

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

Electricity from gas power stations is one of the ways that we meet peak electricity demand. The Secretary of State knows that dispatchable energy can also be created from pumped-storage hydro, which is a completely renewable source. To minimise our reliance on gas and our switch to renewables, he knows that SSE is ready to go ahead and build Coire Glas in the highlands. Will he commit to agreeing a minimum floor price with the SSE, so that it can get on and build, and will he confirm the timescale for such an agreement?

[Kwasi Kwarteng]

I am really delighted that the hon. Member raises this. I think he has raised it at every BEIS questions for the past 18 months, and I will keep saying what I have said before. We are interested in the technology, but I need to look at the specific proposals he is suggesting, and we obviously need to work out whether it is value for money. Those are the parameters we always look at.

Nuclear Energy (Financing) Bill

Debate between Kwasi Kwarteng and Alan Brown

Report stage & 3rd reading
Monday 10th January 2022 Commons Chamber

[Kwasi Kwarteng]

My right hon. Friend will be aware that the small modular reactors cannot be brought onstream in the next few months, but with the right investment and the right incentives, all this technology can be brought onstream very quickly. I cannot say that it will be five years or 10 years, but it will be brought onstream and will help us to reach the decarbonising targets that we have set ourselves.

[Alan Brown]

Will the Secretary of State give way?

[Kwasi Kwarteng]

I must make progress—forgive me.

Since the publication of the Prime Minister’s 10-point plan in November 2020, £6 billion of new investment has already poured into the energy sector—just in a period of barely 15 months. It was notable at the global investment summit in October last year that a further £9.7 billion-worth of deals was announced. Foreign investment is particularly eager to help to finance our way to net zero. But I have to state that foreign investment must not come at the expense of our national security. That is precisely why the National Security and Investment Act 2021 was introduced to safeguard our key strategic industries.

The final issue that we have debated is the necessity of ensuring that there is adequate protection for consumers. With this approach, private investors will be given greater certainty through a lower and more reliable rate of return, but that will, in turn, lower the cost of financing projects and ultimately, in the medium term, help sharply to reduce consumer electricity bills. To protect consumers, the Government will of course put any potential projects through a rigorous due diligence process, allowing detailed scrutiny of a project’s cost along with its delivery plans. The RAB regime will be designed to incentivise the company to deliver the project to time and to budget.

Britain once led the world with our civil nuclear industry, and we fully intend to clear a path to leadership and innovation in this critically important piece of infrastructure.

[Alan Brown]

If there is such a desire for investment, why was £1.7 billion allocated in the last Budget just to develop this project to final investment stage? What are we getting for that £1.7 billion of taxpayers’ money?

[Kwasi Kwarteng]

We all know that the hon. Gentleman’s party is against nuclear, but we also appreciate that the comprehensive spending review that he alluded to was all about ensuring our commitment in the 10-point plan to at least one further final investment decision before the end of the Parliament, and that is the sum of money that we have allocated to ensuring that that happens.

I look forward to following the progress of this Bill and pursuing our plan for greater nuclear investment, greater resilience and greater affordability in our energy mix. On that basis, I commend the Bill to the House.

Bulb Energy: Administration

Debate between Kwasi Kwarteng and Alan Brown

Wednesday 24th November 2021 Commons Chamber

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

In 2018, there were more than 70 companies in the energy retail sector, but now there are fewer than 30—a reduction of 60%. Bulb is the 23rd company to go bust since August, a statistic that, somehow, the Secretary of State seemed to be happy about when he was at the Dispatch Box earlier. When are this Government going to get a grip on what is now a cost of living crisis and an energy supply crisis? As energy bills soar, the Treasury gets extra VAT, extra income on fuel duty, and, on top of the £350 billion-worth of oil and gas revenues from Scotland that it gets to squander, an extra £1.1 billion more that it predicted this year alone, because gas prices have increased, so when will it reinvest some of that money to support consumers and the sector?

Bulb was the seventh largest company, with 1.7 million customers. What is the plan for coming out of special administration, because the Secretary of State has still not told us that? When EDF, Scottish Power, Octopus Energy, Utilita and Good Energy all say that they cannot afford new customers, what will happen with these customers? Can the energy companies actually refuse to take new customers, and what discussions is the Secretary of State having on that?

The Secretary of State says that the energy cap is here to stay, but what will be the effect on consumers in fuel poverty when the cap invariably goes up by £400 to £600 in April? It is a disgrace. The Government have allocated £1.7 billion of taxpayers’ money to develop Sizewell C to final investment stage. Why not invest that money in energy efficiency and renewable energy and do stuff that actually brings down energy bills, rather than committing consumers to a 10 to 15-year contract for nuclear and six years on top of that? When will they get a grip on energy policy as a whole?

[Kwasi Kwarteng]

This is where the hon. Gentleman and I disagree. We are firmly committed to nuclear power; he is against it. We can do two things: we can commit to renewables, as we are doing with our 10-point plan, and commit to 40 GW of offshore wind. I hope that he recognises that we are committed to tidal for the first time in many decades—that is something that he should appreciate. He should also remember that we have the warm home discount and lots of mitigations protecting the most vulnerable customers across the winter and in the next few months.

Gas Prices and Energy Suppliers

Debate between Kwasi Kwarteng and Alan Brown

Thursday 23rd September 2021 Commons Chamber

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

This is not market failure; it is Government and regulator failure. Ofgem all along had the financial and hedging information to know which companies were at risk, so why are we now in crisis management phase?

The Tories promised us cheaper energy bills post Brexit, but right now electricity wholesale prices in the UK are the highest in the whole of Europe. Meanwhile, as gas prices increase, the Treasury gets extra VAT receipts and increased oil and gas revenues. Surely, there must be a redistribution of that increased Treasury income to help hard-pressed bill payers. At the moment, it is those bill payers who cover the additional cost of transferring customers to other energy suppliers. They cover the credit of customers with failed companies and then have to pay increased tariffs when transferred. The cap might stay but the cap does not stop energy bills going up, so why should bill payers pay even more money when the Treasury is getting increased revenue out of this? What is the additional estimated cost for bill payers?

A quarter of our electricity bills consist of levies, so as we move away from our reliance on fossil fuels, we need a fundamental shift in how that concession is paid for. That is something that the Treasury needs to address. It means ending the grid charging regime so that Scotland does not have the highest charges in Europe, and it means giving the go-ahead to pumped hydro storage in wave and tidal.

Finally, is the Secretary of State happy to sit by while the cost of living crisis is ongoing? Is he happy to plunge 500,000 extra people into fuel poverty, or will he fight the Treasury to end the universal credit cut and release extra money to help hard-pressed bill payers?

[Kwasi Kwarteng]

Clearly there was a lot in that question and statement. I will deal with a couple of issues, if I may.

With respect to universal credit and wider budgetary considerations, I have repeatedly said that they are matters for my right hon. Friend the Chancellor. We will have ample opportunity to discuss these things in the House. With respect to the move away from fossil fuels, the hon. Gentleman and I are in agreement: I think that we need a diverse supply of decarbonised sources of energy.

Finally, I dispute the idea that we are ill-prepared. We have the SOLR and SAR processes in place and we stress-tested them throughout the whole covid period, when I was in constant contact with the industry. I feel that so far we have managed to accommodate such supplier failure as we have seen with existing structures.

Fuel Poverty and Energy Price Caps

Debate between Kwasi Kwarteng and Alan Brown

Thursday 19th November 2020 Westminster Hall

[The Minister for Business, Energy and Clean Growth (Kwasi Kwarteng)]

It is a pleasure to speak under your chairmanship, Ms Rees, in this excellent debate on a really important issue. I cannot think of a more important issue that the House could debate; very few are more important and more relevant to people’s lives than fuel poverty. I congratulate the hon. Member for Linlithgow and East Falkirk (Martyn Day) on securing this important debate.

The challenges of fuel poverty and the affordability of energy for households are a huge concern for everybody—not just for members of Opposition parties, but for the Government. I particularly share the concerns about fuel poverty relating to health issues, both physical and mental, and the difficulties people are experiencing now because of the coronavirus pandemic. Obviously, my view of what the Government have been doing and of the importance with which we regard these issues will be slightly different from that of Opposition Members, but I can assure the House that the Government take the issue of fuel poverty extremely seriously.

As the hon. Gentleman mentioned, fuel poverty is a devolved matter, with England, Wales, Northern Ireland and Scotland all having their own fuel poverty targets, their own policies and in many cases their own definitions. However, we all absolutely share the view that fuel poverty is a critical issue.

It is not a new issue. In 2015, we published a fuel poverty strategy for England, which set out the Government’s approach to tackling fuel poverty then. The hon. Gentleman is quite right to say that we should publish a new fuel poverty strategy. We had wanted to publish it at the end of this year, but we are very hopeful that we can get it out early next year, and it is absolutely critical that we do so.

We are also committed to ensuring that there is appropriate scrutiny, so I am very happy to spend some time dealing with some of the issues raised in the debate. Obviously, I cannot deal with every single issue that has been touched on. We have talked about power generation, fuel poverty and the nature of the devolved settlement—it has been a wide-ranging debate—and I will try to deal with some of the issues. It is vital that we work together to tackle this really important problem.

The hon. Member for Greenwich and Woolwich (Matthew Pennycook) was good enough to mention the warm home discount, which was not referred to in any of the speeches by SNP Members. Of course, the warm home discount that he was good enough to mention is a critical part of the Government’s fight against fuel poverty. It provides financial assistance to more than 3 million low-income and vulnerable households each winter, and each one of those households benefits to the tune of £140 a year roughly, which represents £3.5 billion of public money and is a significant contribution.[Official Report, 16 December 2020, Vol. 686, c. 2MC.] It does not abolish the problem but it is a significant contribution, and I think that any fair-minded participant in this debate would have acknowledged that. I am grateful to the hon. Gentleman for doing so.

We have already consulted on extending the scheme until March 2022, recognising that it offers vital support to people in this country, and we are considering how a version of the scheme, or even the scheme itself, can perhaps be extended beyond 2022. These are matters of grave consideration.

Members mentioned the energy company obligation and that, too, is a scheme that has helped people in fuel poverty to improve the energy efficiency of their homes. It is another great GB-wide scheme, which is worth £640 million a year, and it has made an impact in improving the energy efficiency of homes across the country. Since it began in 2013, under—dare I say it?—this Government, nearly 2.8 million energy efficiency measures have been installed in over 2.1 million homes. Again, that is making an impact. The ECO has always been focused on supporting low-income and vulnerable households, providing improvements to give a long-term benefit to those households. Again, we are planning to consult on proposed changes to the scheme in 2021; we want to see how any future scheme can contribute to meeting actual targets.

Another form of assistance and another scheme, which Members were good enough to refer to, is the green homes grant. It was launched only in September and is a £2 billion programme to improve the energy efficiency of homes in England. Other attendant fuel poverty schemes are available in Scotland, Wales and Northern Ireland. I remind the House that the green homes grant offers low-income, vulnerable and fuel-poor households up to £10,000 for the installation of energy-efficient and low-carbon heating measures in their homes. There is also a local authority delivery element that considers households of all tenors and of all descriptions within a household income of under £30,000. Local authorities will shortly set out detailed eligibility criteria for that.

The hon. Member for Greenwich and Woolwich (Matthew Pennycook) suggested that there would not be time to fully implement the green homes grant. We are looking at that, and there is some flexibility in the system. I look forward to making the case that we should perhaps extend it, and there may already have been an announcement in that respect.

[Siobhain McDonagh in the Chair]

[Alan Brown]

The Minister will be aware some hon. Members have also raised concerns that people in many constituencies have been unable to get the free quotes required from approved suppliers to progress. Will the Government address that as well?

[Kwasi Kwarteng]

Absolutely. I suggested that there was flexibility in the scheme. One of the reasons that there would be flexibility is that we are trying to increase the number of installers who have the trust mark accreditation, so that they can do the work. It is a good scheme, and it goes some way towards meeting the manifesto commitment mentioned with respect to the £9.2 billion. There is clearly more work to be done and I fully accept that, but we have made a start. It would be irresponsible to say that the Government are “indifferent” to the problem, as was suggested by the Business, Energy and Industrial Strategy Committee. We are not “indifferent” to this important issue, though there may be disagreements as to how best to tackle it. It would be wrong to suggest that we are “indifferent” to that critical and hugely important problem.

The energy price cap was mentioned, and that opens up a whole new avenue of debate. Clearly that has had a role in not only helping people in straitened circumstances, but in helping industry. It has meant that the industry can, overall, be more productive and efficient. That obviously has the effect of driving down costs and thereby driving down prices. We are committed to ensuring fair energy prices for consumers, and that is why we introduced the price cap on default energy tariffs in 2019. The hon. Member for Greenwich and Woolwich mentioned that it was part of the Labour manifesto many years ago before he even got into the House. I think it was in 2013—the election was in 2015. Clearly, however, there was an issue and the Government accepted that. We introduced the requisite legislation. It is extraordinary that we are being criticised for adopting the policy suggested by the Opposition with which we have, over time, agreed. That shows that the Government do listen to ideas, from whichever quarter those ideas may arise.

The default price cap today protects around 11 million consumers, and a further 4 million households are protected by the prepayment meter price cap from 2021 when that is introduced. It is a big intervention in the way the energy market works and shows that we have a non-ideological approach to the issue. It also shows the Government’s determination to support hard-pressed energy consumers.

In my concluding remarks, I will talk specifically about the covid-19 response. I and the Government are fully aware that the covid-19 pandemic poses unprecedented and unusual problems with respect to fuel poverty. I was struck by the suggestion from the hon. Member for Kilmarnock and Loudon that fuel bills had risen by 37% or maybe it was his colleague the hon. Member for Linlithgow and East Falkirk. I fully accept that it is a huge increase.

From the outset of the crisis the Government recognised that the covid-19 pandemic would have a huge impact on household incomes and would lead to more straitened circumstances. That is why the Department for Business, Energy and Industrial Strategy acted swiftly to secure an agreement with energy suppliers to support consumers impacted by coronavirus. In fact, one of the first calls that I made was to try to organise a response, and the suppliers understood the difficult circumstances that we were in. We managed to reach an agreement as early as March, which provided real support for those who needed help the most.

The energy companies have responded reasonably well. There is a broad understanding in the sector about the nature of the problems. We have done a huge amount. People talked about poverty in general, and the Government have spent unprecedented amounts to protect jobs and incomes. We have extended the coronavirus job retention scheme until the end of March, which has been welcomed across the country. We have also increased the third self-employed grant and provided an uplift to universal credit, which was mentioned. I am happy to say that we have responded to the concerns by providing an uplift to universal credit.

We have also increased the upfront guarantee of funding for the devolved Administrations from £14 billion to £16 billion on top of the spring Budget 2020 funding. Despite all of the support and the unprecedented level of intervention, it is a sad fact that many households will struggle with their energy bills this winter. We are absolutely focused on that and I speak to energy suppliers all the time about how best we can meet the challenges. From 15 December this year, new rules will require energy companies to identify self-disconnecting prepayment meter customers, people who are confronted often with the very harsh dilemma that was pointed out and choose to take themselves out of the prepayment meter scheme. We require energy companies to offer them support to stay on supply and to offer emergency and family-friendly hours and credit to all prepayment meter customers. That is a world where we are driving change to meet the very problem that the hon. Member for Linlithgow and East Falkirk so ably identified.

In the spirit of cross-party co-operation, I hope I have always extended a warm hand to Members to discuss the issues. We have had an excellent debate. Like the hon. Member for Linlithgow and East Falkirk, I regret the fact that more right hon. and hon. Members could not participate today, but I am sure the question will be revisited soon. I will be very happy to attend a further debate if that is what Members want and also to meet individual Members on a face-to-face basis to discuss these really important issues.

Question put and agreed to.

Resolved,

That this House has considered fuel poverty and energy price caps.

Exiting the European Union (Energy Conservation)

Debate between Kwasi Kwarteng and Alan Brown

Wednesday 18th November 2020 Commons Chamber

[Kwasi Kwarteng]

I think there are two different issues. Clearly, there are labelling issues, but the question that the hon. Gentleman is asking relates to market access. There is no reason, once the SI is on the statute book, that there should be any impediment to trade.

Amendments to retained EU ecodesign and energy-labelling legislation are required to ensure that that legislation can continue to operate legally within the UK from 1 January 2021. Amendments are also made to our 2019 EU exit SI to ensure that that continues to function as intended. New energy-labelling regulations for some products have come into force in the EU, and they require that suppliers of the relevant goods provide rescaled energy labels with their products from 1 November 2020. Retailers, however—this should be stressed—do not need to display those labels until 1 March next year. This SI ensures that the March 2021 requirements that would otherwise not become retained EU law still come into force in March, as intended.

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

On retailers needing to display the new labels, does the retailer just swap one label for another, or is there some other process they need to go through come March?

Oral Answers to Questions

Debate between Kwasi Kwarteng and Alan Brown

Tuesday 29th September 2020 Commons Chamber

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

Of the Government’s planned six nuclear sites, so far we have the most expensive plan in the world at Hinkley, Toshiba has walked away from Moorside, and now Hitachi is giving up on Wylfa and Oldbury. Instead of relying on a Chinese state company to deliver the remining two nuclear sites, is it time for the Government to follow the private sector and ditch that outdated technology?

[Kwasi Kwarteng]

The hon. Gentleman and I have different views on that issue. It stands to reason that as we go towards net zero, we will need dispatchable power and a source of firm power. Most of the analysis we have seen suggests that nuclear has a part to play in that net-zero future.

Electricity

Debate between Kwasi Kwarteng and Alan Brown

Monday 15th June 2020 Commons Chamber

[Kwasi Kwarteng]

I think it is achievable, but what the hon. Gentleman is talking about is way outside the scope of this statutory instrument. As I have said, we are talking about flexible pricing; we are talking about the growth of renewables. This Government have committed to 40 GW of offshore wind power by 2030, which is a marked increase on the 30 GW ambition that we had. We are talking about nuclear as well—we have Hinkley Point. There are all sorts of generating power on the system. As I have said, we have a White Paper coming up, which talks about all these issues. Once again, with respect, I have to say that this is a very specific SI regarding the operation of the capacity market. The House will have plenty of time to debate other forms of electricity and power generation in the weeks ahead.

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

Is it still not the point, as the Minister has said, that there needs to be greater flexibility, that the market needs to evolve and that he could therefore still be more ambitious with these regulations? If he is tying changes to state aid in the regulations to effectively temporary measures regarding coronavirus, it is quite clear that that is about flexibility and how he could approach that. Could he not have been a bit more ambitious with what is in these regulations?

[Kwasi Kwarteng]

All I can do is repeat the answer that I have given. These regulations reflect our past discussions about the operation of the capacity market. He and I and others in this Chamber will have plenty of time to debate a new system. I ask the hon. Gentleman to have a little patience. We have a White Paper coming up and it would be precipitous to have an extensive debate about these issues in legislation ahead of the publication of the White Paper. He has asked many questions about that, and I advise him to wait for the debate on the White Paper.

--- Later in debate ---

[Kwasi Kwarteng]

We have had a very wide-ranging debate—far more wide-ranging than any I can remember on secondary legislation. I suggest that many of these subjects would be better discussed in a fuller debate, of which we will have many ahead of legislation in the autumn. The White Paper I hope will come soon. I had not realised it was the first birthday of its putative publication, but I am sure that it will come soon, and we will witness many debates about energy policy.

Let me touch on a few things that hon. Members raised. I do not share the fear expressed by my right hon. Friend the Member for Wokingham (John Redwood) about interconnectors. Going from 4% interconnector capacity to 9% is not indicative of an encroaching EU superstate or anything of that nature. Any Energy Minister who wanted to hit those net zero targets would be looking at interconnector infrastructure. He will know, as will my hon. Friend the Member for South Thanet (Craig Mackinlay), that Germany does have a problem with coal, but the majority of our interconnector capacity comes from France, Ireland and Norway, which are actually doing very well in terms of clean power generation.

With respect to the remarks by the hon. Member for Southampton, Test (Dr Whitehead) about T-1 and suspension, it will not be 12 months de rigueur; it will be up to 12 months. Each and every exemption will be looked at on a singular, case-by-case basis. It is not true that year-long extensions will be given without regard to the circumstances. On emissions, I think we are going to have separate legislation—potentially secondary legislation—regulating or capping emissions, so again, I ask him to be forbearing and patient in respect to legislation regarding emissions.

The hon. Member for Kilmarnock and Loudoun (Alan Brown) talked about the demerits of nuclear, about hydropower storage and about floating offshore wind, all of which are fascinating subjects but I am afraid are outside the limited scope of this statutory instrument on the capacity market. However, I would be very happy to engage him in debate about many of those fascinating and interesting opportunities and innovations in the energy sector.

The Government continue to believe that the capacity market is the right mechanism for delivering security of supply at the lowest—

[Alan Brown]

rose—

[Kwasi Kwarteng]

I happily give way.

[Alan Brown]

One point I raised that was specific to the regulations was about ensuring that we do not get more diesel generators bidding into the capacity market. I mentioned the reduction in the minimum threshold from 2 MW to 1 MW. Will the Minister address that point?

Energy Efficiency Measures: Net Zero Buildings

Debate between Kwasi Kwarteng and Alan Brown

Wednesday 26th February 2020 Westminster Hall

[The Minister for Business, Energy and Clean Growth (Kwasi Kwarteng)]

It is a pleasure to take part in this debate under your chairmanship, Mr Pritchard. I thank my right hon. Friend the Member for Ludlow (Philip Dunne) for bringing forward this important and timely debate, and congratulate him on his election as Chair of the Environmental Audit Committee. My first outing in this role was in front of his Committee—under a different Chair, who sadly was not re-elected. However, I am pleased to see that my right hon. Friend has taken her place.

I have taken part in a number of debates about these issues. This one covered many policy areas, including power generation, which is not really what the debate is about, but I will start with my right hon. Friend’s specific points about heat and the energy efficiency of homes. He presented five challenges, and I will address each individually.

First, my right hon. Friend mentioned zero-carbon heating beyond the RHI. We are absolutely committed to seeing how we can support the renewable heat incentive beyond the date on which it expires. He also mentioned the future homes standard. My hon. Friend the Member for Henley (John Howell) raised the fact that the zero-carbon homes target was scrapped. The Government feel that the future homes initiative is much more realistic and better in terms of reducing carbon emissions in houses than the initial zero-carbon scheme. That scheme allowed for offsetting, whereas the future homes standard will concentrate on lowering absolutely levels of emissions. I think that is a much better way of approaching the problem, but I am happy to discuss that with him later.

The third item mentioned by my right hon. Friend is really key to the debate: incentives for householders to contribute in some way to upgrading the energy efficiency of their homes. When we look at the totality of buildings in the UK in terms of their carbon emissions, the vast majority—about two thirds—are owner-occupied homes: those inhabited by people who have either paid off a mortgage or currently have one. It is a big challenge to raise the energy efficiency of those homes. Drawing on his professional background, he spoke about the ability to have consumer finance and incentivise people to make such large investments. On that note, the Government have already started: we have a £5 million green finance initiative, working with banks to provide finance for precisely the reasons he mentioned.

[Alan Brown]

Surely the £5 billion of green finance is a bigger package that will not be going to individual householders. If it was, it would be like the green deal scheme, which the Government had to terminate because it was not working right.

[Kwasi Kwarteng]

It is an initial step. In Germany, KfW has a consumer finance piece that gives small loans for green initiatives. We had a green deal; my personal view and, I think, the Government view is that it did not work principally because the interest rate was too high. However, that does not discredit such initiatives.

I was struck that the hon. Member for Newcastle upon Tyne Central (Chi Onwurah) mentioned the Labour party manifesto and its commitments on houses. It was extraordinary but unsurprising that although she mentioned all the jobs that would be produced and carbon emissions, she did not say how much the policy would cost. That is a critical part of the debate. As my right hon. Friend suggested, a huge amount—in the order of £65 billion—needs to be invested in the next 10 years. That will not all come from the Government; some will come from consumers, who will rightly invest in making their homes more secure. Investments in those houses are not lost money; they will enhance property values, so they make commercial sense in many ways.

[Mr Virendra Sharma in the Chair]

The fifth specific point mentioned by my right hon. Friend was the EPC scheme. It is not a perfect measure, but it does capture something about what we are trying to do. It has an indicative value in forcing up the standards we expect not only of the Government but of private sector landlords, as was mentioned in the debate. In that space, I can announce that we are already consulting on tightening standards in the private rental sector. We aspire for private landlords not to get properties to EPC band E but to make investments to improve their properties to band B or C by 2030. That is a significant improvement and a step in the right direction.

The debate has shown that we still have a big task. The hon. Member for Kilmarnock and Loudoun (Alan Brown) highlighted the achievements of the Scottish Government, but he will appreciate that of the 27 million homes in the UK, 24.2 million are outside Scotland, in England, Wales and Northern Ireland. While I appreciate the successes of the Scottish Government, we cannot see it simply as a competition. In fact, colleagues of his in the devolved Administration are always telling me, “We have got to work together and co-operate.” They want negotiations, discussions and policy evolution in partnership with the Government in Westminster. That is a welcome development. I have meetings and calls with Ministers in the devolved Administrations and I have just spoken on calls to Diane Dodds and Edwin Poots, the newly appointed Ministers in Northern Ireland. This cross-UK approach is the best method.

There are so many other issues we could talk about. We clearly need joined-up policy in this area. We cannot improve the energy performance of our buildings without engaging with our friends at the Ministry of Housing, Communities and Local Government. I was struck that that Department, which has responsibility for the performance of local authorities, was barely mentioned, which led me to believe that BEIS has the sole answers to all these questions. I wish that were true, but we do have to participate and engage with colleagues across Government in Treasury and MHCLG.

--- Later in debate ---

[Kwasi Kwarteng]

If she will not barrack me, I can say that we do have policies addressing fuel poverty. We have the energy company obligation, which we are completely committed to, and we committed billions of pounds in our manifesto to address fuel poverty specifically.

[Alan Brown]

Will the Minister give way?

[Kwasi Kwarteng]

I have two minutes in which to wrap up and allow my right hon. Friend the Member for Ludlow time to conclude the debate, so, with due courtesy and respect, please allow me to finish my remarks.

I am pleased that we had the debate and I am sure we will have more of them. This will probably make too much work for me and my officials, but I suggest we could debate specific issues raised this afternoon such as EPC standards, widening consumer finance and publicly owned building strategy—there are so many issues. Salix, the finance company focused on providing funding to upgrade public buildings, was not mentioned in the debate. There are many different avenues and I am sure that hon. Members in the Chamber will come to subsequent debates to discuss them more fully.

UK Oil and Gas Industry

Debate between Kwasi Kwarteng and Alan Brown

Tuesday 25th February 2020 Westminster Hall

[The Minister for Business, Energy and Clean Growth (Kwasi Kwarteng)]

It is a real pleasure to take part in this debate under your chairmanship, Mr Robertson. I thank my hon. Friend the Member for West Aberdeenshire and Kincardine (Andrew Bowie) for securing it. I was surprised to hear that we had not debated these issues since April 2018.

[Alan Brown]

Far be it from me to try to correct the record again, but there was a debate in this Chamber in October 2018, which was secured by my hon. Friend the Member for Falkirk (John Mc Nally). I spoke in that debate as well.

[Kwasi Kwarteng]

I am glad to hear we have debated these issues more recently. Certainly in my recollection, we have discussed this issue many times in this forum and in the main Chamber. The sector is vitally important. It has been for many decades now, and the Government take it extremely seriously.

My hon. Friend the Member for West Aberdeenshire and Kincardine used a phrase that struck me: “quick-changing expectations”. That is clearly what has happened. Where we are today is very different from where we were when we had the debate in April 2018 and where we were even last year. Some people have kindly observed that we have a new Government. We had a general election at the end of 2019, and we now have a new Government with a new mandate who are very much concerned with this issue.

Oil and gas is an important sector not only for energy security but, crucially, for the economy and jobs. It has contributed something like £340 billion in production taxes over the past six decades, and it has added £570 billion of gross value added to the economy since 1990. Many speakers in the debate observed that in excess of 250,000 jobs across the UK are dependent on the sector, so there is no question but that the oil and gas sector is vital.

However, we have to deal with the conditions that we find ourselves in. As the hon. Member for Southampton, Test (Dr Whitehead) pointed out, the UK continental shelf is now a highly mature basin. We are looking to reduce our fossil fuel use, which is inevitable, given that in June 2019 we made the very significant commitment to achieve net zero carbon by 2050. It is important to stress that, as of today, we are the only nation in the world—certainly among the advanced economies—that has enshrined that aspiration in law, meaning that it is no longer an aspiration but the law of the land to reach that target by 2050.

One very useful phrase that came out of the debate and that we need to think about was from my hon. Friend the Member for Waveney (Peter Aldous), who suggested that the oil and gas industry could act as “a bridge” to a low-carbon future. That is exactly the right sentiment and expresses succinctly how the Government think about the sector and our future as a low-carbon economy.

[Alan Brown]

One of the key themes in the Just Transition Commission and the moves towards net zero has been carbon capture development. There have been requests that the Government support far more than one cluster. The suggestion from the Member for West Aberdeenshire and Kincardine (Andrew Bowie) was for five clusters. Can the Minister outline where the Government are going on that issue?

[Kwasi Kwarteng]

With permission, Mr Robertson, I will address carbon capture later in my speech. There is plenty of food for thought and actual policy that I would like to address, but I want to talk about the transition. It is important, as the hon. Member for Southampton Test suggested, that we get the message out that we do not see the end of the oil and gas industry in this energy transition. Oil and gas has a crucial part to play in that transition, not least because of some of the carbon capture issues I want to address later.

Let us be clear where we are today. Currently, 70% of primary energy demand in the UK is met by oil or gas. Some 85% of houses—I suspect this includes the houses, apartments and dwellings of most people in this room—rely on gas central heating. The Committee on Climate Change has said that there will be a continued need for oil and gas as we make our transition to net zero emissions. That is extremely important, and on that basis I would like to talk about some of the announcements we have made, particularly in regard to carbon capture, usage and storage.

We made a public commitment in the Conservative manifesto to invest £800 million in carbon capture, usage and storage. It could not be clearer than that. I am very hopeful that we will be able to make a significant announcement along those lines in the Budget, to honour our manifesto commitment. It is important for my Department. However, Members will appreciate that I am not the Chancellor of the Exchequer, and that the Budget is a matter for him and the Treasury. In a former capacity, I served as the parliamentary private secretary to the Chancellor of the Exchequer for 18 months, which in the context of the political climate was a very long time.