Energy Security Strategy

Debate between Kwasi Kwarteng and Ed Miliband

Tuesday 19th April 2022 Commons Chamber

[Edward Miliband (Doncaster North) (Lab)]

I thank the Secretary of State for his statement, but I have to tell him that after all the hype and all the promises, his energy relaunch fails to live up remotely to the scale of the crisis that families are facing. The Government have already failed to deliver the immediate measures needed to help millions of families with their energy bills this year, and they now have an energy security strategy that has rejected the measures that could have made the most difference in the years ahead. It fails to seize the moment on the two most elementary tests of any decent green energy sprint—that is, going all-in on the cheapest forms of home-grown power, such as onshore wind, which remarkably, was not even mentioned in his statement, and finally delivering on the biggest no-brainer when it comes to an energy strategy: energy efficiency.

Hon Members do not need to take my word for it. We know from all the briefings and interviews that the Secretary of State gave before the relaunch that he has failed to deliver what he wanted. We know that he wanted a hard target to double onshore wind by 2030 and to treble it by 2035, because we have the earlier version of the document in which there were those targets. The Secretary of State was right because the ban on onshore wind that the Government introduced in 2015 has driven up bills for consumers. What did he say 10 days before the relaunch? He said that he wanted to see a major “acceleration” in onshore wind. The Prime Minister was said to be “horrified” at the delays, but when we got the document, we saw that there was no target, no plan and more imports and higher bills as a result of his failure. Perhaps he can tell us what the nasty accident was that befell the earlier version of his strategy.

On solar, let us be clear that the Government destroyed the solar industry with their decisions in 2015, abolishing the feed-in tariff. In this document, we see weak and vague language—it is even weaker, the House will be interested to know, than in the original version of the document, which is pretty weak in itself. Will the Secretary of State explain why there is no firm target for 2030 and a retreat on large-scale solar?

Let us take energy efficiency next, the biggest failure of all. We know that the Secretary of State wanted extra resources for energy efficiency, because he helpfully briefed the media to that effect. He was right, because that would immediately cut bills, imports and fuel poverty, but again, he failed. There is not a penny more for energy efficiency in this document. Even the Secretary of State’s Minister, Lord Callanan—we have to admire his candour—said on the day:

“It would have been good to go further but, regrettably, that was not possible in this case.”—[Official Report, House of Lords, 7 April 2022; Vol. 820, c. 2196.]

Will the Secretary of State tell us why the Government are failing to deliver when the economic, social and climate case is so overwhelming?

The Government’s failures on onshore wind, solar and energy efficiency matter because they are not just the cheapest and cleanest responses to the crisis that we face, but the quickest to deliver. That is why E.ON, the energy company, said of the strategy, that

“there is little in today’s announcement that will deliver…this decade, let alone this year.”

Why? Because the Secretary of State and the Prime Minister caved in to Back Benchers who dislike green energy and a Chancellor who refuses to make the green investments that the country needs. They cannot deliver a green energy sprint because they face both ways on green energy and simply will not make the public investment that we need.

On the other elements of the strategy, we support more ambition on hydrogen and offshore wind. On the latter, however, there are real questions about the investment required in the grid; perhaps the Secretary of State will respond to that point.

On new nuclear, the last Labour Government identified a whole series of sites for new nuclear. The Government have had 12 years in power and they have not completed a single power station.

Of course, the North sea has a role to play in the transition, but will the Secretary of State explain how maximising North sea oil and gas is consistent with all the advice from the International Energy Agency and the Intergovernmental Panel on Climate Change on limiting global warming to 1.5°?

On fracking, which the Secretary of State was also too embarrassed to mention, why commission another review rather than having the courage to say out loud what he believes: that fracking is outdated, will make no difference to prices and is unsafe, unpopular and should have no part in our future energy system?

In conclusion, the truth is that this cobbled-together energy relaunch does nothing on the cost of living and fails to deliver the green sprint that we needed. When it comes to the solutions to energy security, energy bills and the climate crisis, the Secretary of State has shown once again that the Government cannot deliver what the national interest demands.

[Kwasi Kwarteng]

I am pleased, in this Easter season, when Christians celebrate the resurrection of Jesus, that the right hon. Gentleman is back in his place. I thought that he had disappeared for a bit, but it is very good to see him again spinning out the same lines.

Let me deal with some of his accusations. There is plenty about onshore wind in the strategy. The one thing that we say about onshore wind—unlike the right hon. Gentleman’s position—is that it has to be pursued in the context of local community support. We have always had that position and have not moved away from it. People also say, “What about the energy efficiency measures?” He will remember that we had a whole document at the end of last year devoted to energy efficiency—it was called the heat and buildings strategy. He and the hon. Member for Southampton, Test (Dr Whitehead) kept asking month after month, “When will the heat and buildings strategy come out?” It did come out and it addressed precisely the energy efficiency issues that he wished it to.

On nuclear—this is the last thing I will say about the remarks from the right hon. Member for Doncaster North (Edward Miliband)—his attempt to pretend that the last Labour Government somehow made us more secure on nuclear is laughable. That did not happen. They were notorious for doing nothing to promote the nuclear industry. They were rather like our Scottish National party friends, who are at least honest about their position—they do not want nuclear. I am still not sure what he believes about nuclear, but we are driving forward nuclear and we are delighted to make it the centrepoint of our strategy.

Russian Oil Import Ban

Debate between Kwasi Kwarteng and Ed Miliband

Wednesday 9th March 2022 Commons Chamber

[Edward Miliband (Doncaster North) (Lab)]

I thank the Secretary of State for his statement. We are united against Russian aggression. We stand together in solidarity with the Ukrainian people. Let me echo his admiration for President Zelensky, whose bravery and eloquence yesterday were extraordinary and inspiring.

On the Secretary of State’s immediate decisions, we know that Putin’s war machine is being funded by oil and gas, which is why it is right that every country does what it can to isolate the regime, and that every company does so too. We fully support the Government’s decision to ban oil imports, which is a welcome step. It is also right to work with companies and unions on how we implement that policy. What assessment has he made of the impact of the ban on petrol and diesel prices?

We also support the Secretary of State’s decision to seek ways of ridding ourselves of Russian gas imports. On the wider energy security context, it is essential that we learn the right lessons from this crisis. Although 50% of our gas comes from the North sea and only 4% from Russia, we pay the same price for our own gas as for that which we import because we operate in an integrated gas market, so we are absolutely exposed to these rocketing wholesale gas prices, which are currently up 100% on the month and 800% on the year.

Therefore, the right lesson to learn is surely that we have to go much further and faster in developing home-grown zero-carbon power, including renewables and nuclear, which can free us from the whims of autocrats and dictators who can use fossil fuels as a geopolitical weapon. Does the Secretary of State agree this is the right lesson and that policy will need to change? In particular, does he agree that we should finally end the effective moratorium on onshore wind in the planning regulations, which since 2015 has denied us power each and every year equivalent to our gas imports from Russia? Does he agree that we should ramp up our offshore wind so we go well beyond 40 GW, and that it is time to finally get serious about energy efficiency—the best way of cutting energy demand and an area in which the Government have not succeeded in past years?

There needs to be a phased transition in the North sea, but will the Secretary of State now clarify the Government’s position on fracking? Will he confirm that the moratorium that was put in place will remain in place—no ifs, no buts—as fracking would not make any difference to the prices consumers pay, is dangerous and would take decades to come on stream? [Hon. Members: “No!”] They do not agree with me. I have a position against fracking; they support fracking. We would love to know what the Secretary of State and the Government think and I am sure they would, too.

Let me ask the Secretary of State about the cost of living crisis facing families, arising from what is happening to oil and gas prices. We have consistently warned the Government that their measures were wholly inadequate to address the rise in energy bills. Will he undertake to tell the Chancellor that, in his spring statement, he must come back with much more help for both families and businesses?

We are united in our support for the people of Ukraine. We will support the Government in everything they do that can cut off support for the evil and barbaric Putin regime, and we urge the Government to learn the right lessons for our country from this crisis, so we can achieve both energy security and energy sovereignty.

[Kwasi Kwarteng]

In his customary way, the right hon. Gentleman raised a large number of questions, the majority of which I hope to deal with. He spoke against Putin’s barbaric invasion and completely illegal actions. I am very pleased that he reflects our sentiments and that we have a mutual interest in making sure that Putin fails.

As far as the cost of living is concerned, the Chancellor of the Exchequer has made an extensive intervention, and it is wrong for Opposition politicians to say that the price cap that will be set in August will necessarily be higher than it is today. We simply do not know. As the right hon. Gentleman understands, the price cap will be set retrospectively, looking at the average price. It may well be higher, but there are circumstances in which it will not increase as much as he imagines. As is always the case, we take an ongoing approach to looking at the price cap. We speak to Ofgem all the time and Ofgem is engaged in work on how the price cap is calculated.

I am pleased to hear that the right hon. Gentleman is keen to support investment in the North sea, making sure that gas is a key transition fuel, something that many people on the Opposition Benches may disagree with. He is right to stress an increased focus on renewables and nuclear power—we are absolutely at one in our agreement on that.

Storm Eunice

Debate between Kwasi Kwarteng and Ed Miliband

Monday 21st February 2022 Commons Chamber

[Edward Miliband (Doncaster North) (Lab)]

I thank the Secretary of State for his statement. I join him in sending my condolences to the families of the victims who tragically died during Storm Eunice, and I express my sympathy to all those who have been affected by the storms. Many families have endured real hardship in these past few days, being without power for an extended period. I also know, including from my own constituency, that many others are facing an anxious time with the threat of flooding from Storm Franklin. My thoughts are with them, too.

I also join the Secretary of State in praising all the engineers, network staff and emergency service staff who have done such an important job in incredibly difficult circumstances over the past few days, as well as local authorities, which have also played an important role in the emergency response.

On the substance of the statement, first, the most important priority is to reconnect those who are still without power. I welcome what the Secretary of State said about people being reconnected by Wednesday at the latest, and I trust that he will, as he says, hold all the companies to account in mobilising all their resources across the country to make sure this happens.

Secondly, on vulnerable households, in its interim review of the response to Storm Arwen last November, BEIS noted confusion of roles and responsibilities for vulnerable customers and communities that were cut off. The Secretary of State says the arrangements are working better, and I am glad that lessons have been learned. Can he tell us how he is monitoring that and is assured of it?

Thirdly, there were unacceptable delays in the networks’ compensation payments after Storm Arwen, with 10,000 customers having not been compensated six weeks after the storm. What will the Secretary of State do to ensure speedy payments on this occasion?

Fourthly, these events raise longer-term issues. Scientists tell us that we cannot necessarily attribute the ferocity of Storm Eunice to climate change, but we know that we face more intense and frequent extreme weather as a result of the climate crisis, so again it throws up the question of our resilience and security as a country.

After the storms in 2013, there was a clear sense of the vulnerabilities of the overhead power network and agreement that the energy networks would act. In its interim report on Storm Arwen this month, Ofgem said again that it will review the costs and benefits of the resilience of overhead lines, and the Climate Change Committee has highlighted climate risks to the power system. Does the Secretary of State agree that events this winter demonstrate the need to give greater priority to and, indeed, investment in the resilience of our power network?

More generally, the Climate Change Committee said in its five-year progress report last summer that adaptation is

“under-resourced, underfunded and often ignored.”

Does the Secretary of State agree that these storms are yet another wake-up call about the need for a proper national resilience plan that covers our power lines, flood defences and critical infrastructure?

The truth is that, as a country, we face significant threats from extreme weather in the years ahead. Today we should acknowledge the important work done in response to this crisis, but the lesson has been demonstrated yet again that we owe people the long-term planning and investment to give them all the protection we can.

[Kwasi Kwarteng]

The right hon. Gentleman and other hon. Members will be surprised that I am in a measure of agreement with him. He is absolutely right to warn that extreme weather events could be—I am not saying they will be—a feature of our landscape and climate. As a constituency MP, I remember the floods of 2013-14 and the devastation they caused.

The right hon. Gentleman will appreciate that I launched a review of Storm Arwen, and we have learned many lessons from the interim report. We are committed to conversing with colleagues across Government on a more integrated plan. I am grateful to him for highlighting the extreme weather conditions that many of us may well face in the future.

Storm Arwen

Debate between Kwasi Kwarteng and Ed Miliband

Wednesday 1st December 2021 Commons Chamber

[Edward Miliband (Doncaster North) (Lab)]

I thank the Secretary of State for his statement. Let me first join him in sending my condolences to the victims who have tragically died during Storm Arwen and to their families. I express my sympathy to all those who have lost power and are suffering during this crisis. I know from my own constituency, where we had terrible flooding in 2019, the impacts of extreme weather and the traumatic effects it has on people and communities. I also join him in paying tribute to the many engineers, volunteers and emergency service workers who have worked tirelessly to step up and help during this crisis.

We have heard heartbreaking stories of outages leaving residents without power, water and light. There are also many reports that the Secretary of State will have heard of residents being unable to get proper information about what is happening and waiting for hours to get through on phone lines. On behalf of the many who have suffered, I want to ask him a few questions. Does he believe that there is enough support for the most vulnerable on the ground while the power outages continue, including the use of emergency generators, and has he given thought to calling in the Army if necessary to help with that process? He said that power would be restored “in the next day or two” for the overwhelming majority. Can he say how many people he estimates will be left without power and how long it will take to restore power for them?

After terrible storms in 2013—the stormiest winter in 40 years that saw hundreds of thousands lose their power—it was said that lessons would be learned, and I want to probe the Secretary of State a little further on three areas in that regard. First, on communications and information, the Science and Technology Committee recommended that the single national emergency number was put in place. The purpose of that number was that people would not just know who to call but could get information promptly. On the calling of 105, which he mentioned, there are multiple reports of it causing enormous frustration to people who are not getting the information. What is his assessment of whether people have been able to get the information, and if not, why not?

Secondly—the Secretary of State drew attention to this—Ofgem recommended in the wake of those storms that district network operators should share resources and personnel in the event of such a crisis. He said that that has happened, but is he satisfied that it has happened right across the DNO network, and at the scale that is required? Can he give us some further information on that?

Thirdly, after 2015 there was a clear sense of the vulnerabilities of the overhead power network, and agreement that the networks would survey the vulnerabilities that they faced and act. Is the Secretary of State satisfied, at this stage, that that has happened, because the continued vulnerability of power lines seems all too apparent?

Faced with the climate crisis, extreme weather events will sadly become all the more common in future. We cannot be this vulnerable in future. There is real concern that some lessons have not been learned, and on this occasion we must face up to those lessons and learn them.

[Kwasi Kwarteng]

On the situation with regard to the climate change emergency, the right hon. Gentleman and I have very similar views. Clearly Storm Arwen was an event the likes of which we have not seen for, certainly, 16 years, since the records of the DNOs started. We have to be prepared for similarly extreme difficult weather conditions in future and make sure that our system is resilient in that eventuality.

Turning to the right hon. Gentleman’s specific questions, the 105 line is the one number that people are being asked to call; it has been centralised. He is right to say that there was initial pressure. My understanding is that over the weekend, it took people up to two hours to get through, which is clearly unacceptable, but the storm hit and the companies did not have the communication networks, the call centres or the people there to deal with the situation. When I spoke to the CEOs of the companies yesterday, they said that the waiting time has been reduced to 10 minutes to a quarter of an hour. That is what I was told. If people are finding difficulties, they should definitely get in touch with their MPs, Government and also the distributors.



On the right hon. Gentleman’s second point, the North East South West Area Consortium is a very effective means by which the generating companies can share and deploy engineers across different networks. That is very effective, I am told by the CEOs of the companies, but I will have more calls today with local resilience leaders to ensure that what the generating companies are saying is matched by what people are experiencing on the ground, because, as he well knows, there can be a mismatch between the two.

Bulb Energy: Administration

Debate between Kwasi Kwarteng and Ed Miliband

Wednesday 24th November 2021 Commons Chamber

[Edward Miliband (Doncaster North) (Lab)]

(Urgent Question): To ask the Secretary of State for Business, Energy and Industrial Strategy if he will make a statement on Bulb Energy entering administration.

[The Secretary of State for Business, Energy and Industrial Strategy (Kwasi Kwarteng)]

As many people in the House will know, when energy suppliers leave the market, the regulator, Ofgem, runs a competitive supplier-of-last-resort process. Last week, Bulb informed the Government and Ofgem that it would be leaving the market. Ofgem has advised that the supplier-of-last-resort process is not viable for Bulb because of the size of its customer book. Ofgem has, with my consent, applied to the court to appoint energy administrators. If appointed by the court, the administrators will continue to operate Bulb under what is called the special administration regime, which is set out clearly in legislation.

We will update the House once the court has made its determination, but I wish to clarify a couple of points. First, a special administration regime is a temporary arrangement that provides an ultimate safety net to protect consumers and ensure continued supply. The special administration regime will keep bills at the lowest cost that it is reasonably practical to incur while ensuring that the market remains stable. The House should understand that we do not want the company to be in this temporary state for longer than is absolutely necessary. Supplies remain secure and credit balances will be protected. Finally, all domestic customers in Great Britain are, of course, protected by the energy price cap, which remains firmly in place.

[Edward Miliband]

It is right that the Secretary of State has been forced to come to the House: 18 companies have gone bust since he last came to the House in respect of this issue, in September, and reassured us that there was nothing to worry about.

I have a series of questions. First, what is the Secretary of State’s estimate of the scale of costs the taxpayer faces as a result of the Bulb bail-out? That was not clear from his statement, but this is a taxpayer bail-out and the public deserve to know. Will he level with people about the costs that bill payers are going to have to pick up from all the other companies that have failed since September? How much will bills increase as a result?

Secondly, we are now in a position in which companies have banked profits but losses stretching to hundreds of millions incurred by those same companies are being borne by taxpayers and bill payers. So many companies going bust in just two months—something not happening anywhere else in the world—points to a systemic failure of regulation. Firms took risky bets and were allowed to do so, and the Government and Ofgem significantly deregulated the conditions of operation in 2016. Will the Secretary of State now take responsibility for this clear failure of regulation? Does this not suggest that there needs to be a proper review of the regulation of the market?

Thirdly, there is a global dimension to gas price rises but the truth is that we are more exposed as a country because of failures on onshore wind, solar, energy efficiency and gas storage, which is just 2% of our annual demand compared with 25% in other countries. Will the Secretary of State admit that Government inaction over the past decade has left us more vulnerable?

Finally, on the cost-of-living crisis, with further energy price rises coming, why are the Government making the situation worse with cuts to universal credit, by raising national insurance and by refusing to bring some relief by cutting VAT on energy bills? With businesses being hit, too, where is the support that he indicated was coming more than a month ago for energy-intensive industries?

We have seen a failure of policy over a decade, a failure of regulation and the Government making the cost-of-living crisis worse. Is not the truth that this Government cannot be the answer to this energy crisis because it is their crisis? It is businesses and families who are paying the price.

[Kwasi Kwarteng]

On a point of fact, the number is actually 22 companies, not 18, and I refer back to that—[Interruption.] No, that is the figure. That shows the incredible resilience of the systems that we have in place. We have the supplier of last resort, which has worked very effectively, and, as I outlined in my statement, we also have the special administration regime, which was designed precisely to deal with situations such as the one we are now in.

On regulation, Ofgem has launched a review of the retail market and how it operates. I will be directly involved in that and will study it very closely.

The right hon. Gentleman talks about the global market and the situation we are in post covid; he and his party predicted record levels of unemployment and recession, and of course they were completely wrong—they were absolutely wrong. We are growing the economy stronger than any other country in the G7. We are also creating jobs and creating investment, so the right hon. Gentleman’s prophecies of doom were completely misplaced, and he is completely without any firm arguments over our response to what was a global pandemic.

Oral Answers to Questions

Debate between Kwasi Kwarteng and Ed Miliband

Tuesday 16th November 2021 Commons Chamber

[Kwasi Kwarteng]

I pay tribute to my hon. Friend for the excellent work he has done in a short time, representing his constituency. He knows that across Government we have regular conversations about how to help energy-intensive industries, and I would be happy to meet him and his constituents to discuss what we are doing.

[Edward Miliband (Doncaster North) (Lab)]

I join the Secretary of State in commending the COP26 President on the progress made at COP26, but we know much greater action is required, and it is the Secretary of State’s job to ensure that every part of our Government acts. There is an immediate test with the UK-Australia trade deal: yesterday, the Australian Government reaffirmed their 2030 target, which is consistent only with 4° of warming, and there are reports that our Government have allowed the watering down of temperature targets in that deal. Surely, if we are serious after Glasgow about not letting big emitters off the hook, the deal must be rewritten to enshrine in it a proper plan for Australia as well as the UK, including for 2030, to keep 1.5° alive.

[Kwasi Kwarteng]

The right hon. Gentleman is absolutely right: we have a duty to ensure that we put net zero at the centre in treaties and in our international obligations. Where I dispute with him is that the Australian deal does mention Paris climate ambitions and does commit to decarbonisation. Lastly, for the first time ever, the Australian Government have committed to net zero. That is a huge achievement, which I wish he would support and endorse.

[Edward Miliband]

The Secretary of State should not be defending the Australian Government’s 2030 target. It is he who said about the negotiations:

“There may have been an issue about specifically putting the 1.5° on the face of the negotiating mandate.”

It is time for the Government not only to talk tough, but to act tough, because we must put pressure on countries such as Australia. There is a clear pattern of behaviour here on climate. Too often, this Government face both ways: the Cumbria coal mine, the Cambo oil field, cutting overseas aid for the most vulnerable countries, cutting air passenger duty for domestic flights and failing to invest in green recovery at home. He is the man supposed to be in charge of ensuring the Government speak with one voice. Why does he think he is failing to do so? Is that the reason why people are calling for the COP26 President to take back control of energy and climate change?

[Kwasi Kwarteng]

The COP26 President did a marvellous job, and the person speaking with two voices is the right hon. Gentleman. On the one hand, he says COP was a great success, and then on the other hand, he is saying the Government have failed. It is inconsistent and it is implausible.

Income Tax (Charge)

Debate between Kwasi Kwarteng and Ed Miliband

Thursday 28th October 2021 Commons Chamber

[Kwasi Kwarteng]

That is a very direct question and, as I have said, conversations are ongoing. I speak to the CEO of Ofgem on a daily basis and we are always looking at the situation in terms of gas and electricity prices and how we can mitigate those risks.

[Edward Miliband]

The right hon. Gentleman was asked a very direct question, as he said, by my right hon. Friend the Member for East Ham (Stephen Timms). The right hon. Gentleman acknowledged two weeks ago the very difficult situation of the energy-intensive industries and said that he had submitted a formal request to the Treasury. What has happened?

[Hon. Members]

They are ignoring it.

--- Later in debate ---

[Kwasi Kwarteng]

We are not going to nationalise anything; that is very true.

[Edward Miliband]

It is hard to follow that response from the Secretary of State; he said, “a general context in which…something, something.” Can he just answer the question: when are we going to know what help is available for energy-intensive industries, if any, and what kind of help is it going to be?

[Kwasi Kwarteng]

All I would say to the right hon. Gentleman is watch this space and let’s see what happens.

Gas Prices and Energy Suppliers

Debate between Kwasi Kwarteng and Ed Miliband

Thursday 23rd September 2021 Commons Chamber

[Edward Miliband (Doncaster North) (Lab)]

(Urgent Question): To ask the Secretary of State for Business, Energy and Industrial Strategy if he will make a statement on rising gas prices and the collapse of energy suppliers.

[The Secretary of State for Business, Energy and Industrial Strategy (Kwasi Kwarteng)]

I came before the House on Monday to update colleagues on the action we are taking, and I appeared before the Business, Energy and Industrial Strategy Committee yesterday to discuss the matter in greater depth. The Government have been clear that protecting consumers is our primary focus and shapes our entire approach to this issue. We will continue to protect consumers with the energy price cap.

The global gas situation has had an impact on some energy suppliers, and I have been in touch daily with Ofgem. As it set out yesterday, there are more than 50 suppliers in the domestic market, and we may, unfortunately, see more suppliers exit the market in the coming weeks. However, it is not unusual for energy suppliers to leave the market, for various reasons, particularly when wholesale global prices are rising. Ofgem and the Government have clear, well-rehearsed processes in place to make sure that all customers are supplied with energy.

Our approach will be informed by the following principles: protecting customers, especially vulnerable ones, from price spikes. The solution to this crisis will be found from the industry and the market, as is already happening, and I repeat that the Government will not be bailing out failed energy companies. We would like to see a competitive energy market that can deliver choice and lower prices. The energy price cap, which continues to protect millions of customers, will remain in place. Consumers come first, and that has always been the centrepiece of our approach.

[Edward Miliband]

On Monday, I said to the Secretary of State that he was being far too complacent about the situation we are facing. Events since have, unfortunately, borne that out: complacent about the crisis in the market; complacent about the impact on families; and complacent about the cost of living crisis. He pretended on Monday and again today that it was normal for a number of suppliers to go down each winter, but what we are dealing with is far from normal: 800,000 customers losing their suppliers yesterday alone and 1.5 million in the last six weeks. So will he now answer the question he has so far failed to answer: does he believe taxpayers’ money will be necessary to stabilise the market? If so, how will he ensure value for money and that we do not simply end up with greater concentration of the big six suppliers?

Next, I have a letter here that Ofgem wrote to the Secretary of State when he was the Energy Minister 18 months ago during covid, warning about

“systemic risk to the energy supply sector as a whole”.

It said the usual Ofgem mechanism, the supplier of last resort, may not be possible. It went on:

“The failure of medium and large suppliers would need to be handled via a special administration regime placing significant burden and costs on government.”

So will he answer the question of what planning was done for this eventuality following that letter? Surely the Government should be in a position now to know exactly what needs to be done where there is systemic risk to suppliers. Have they not left the country dangerously exposed, with them scrabbling around for solutions?

Finally, we are seven days from the cut to universal credit. This is the last time a Government Minister will be in the House explaining to millions of families why they are plunging them further into fuel poverty. Instead of warm words or platitudes, can the Secretary of State now tell the British people how he can possibly justify this attack on their living standards? Is it not the truth that there can be no defence of it, and that the only right, proper and fair thing to do is to cancel the cut?

[Kwasi Kwarteng]

Obviously, as usual, the right hon. Gentleman raises a number of issues. We have not been complacent. The whole point about the supplier of last resort process, which was interrogated last year, is that it is an organised, well-established process that can allow existing strong companies to absorb customers and failure. [Interruption.] If he would desist from chuntering from a sedentary position, he might actually hear my answer.

I remember the letter last year. We interrogated, all through the covid process, the systems we had in place. During that period, the supplier of last resort was found to work. So far this year, it has been found to work, so I am not going to try to talk ourselves into exacerbating the crisis.

With regard to the special administration regime, that is something that is in place. Thankfully, we have not had to use that, but the right hon. Gentleman knows as well as many people in this House that it is there should the case arise.

With respect to universal credit, I will say what I said earlier in the week. That is a matter across Government in terms of budgetary responsibility. There will be a Budget at the end of October and there will be plenty of time to discuss that then.

--- Later in debate ---

[Kwasi Kwarteng]

As I have said, we have a supplier of last resort process that has worked well in the past couple of years. It is not my job to state the terms on which customers are absorbed by other companies—

[Edward Miliband]

It kind of is.

[Kwasi Kwarteng]

No, not ahead of the process. However, most of these prices are at or just below the price cap, and that is fundamentally what will protect consumers in this period.

Oral Answers to Questions

Debate between Kwasi Kwarteng and Ed Miliband

Tuesday 21st September 2021 Commons Chamber

[Kwasi Kwarteng]

I know, as a former Treasury Minister, that my hon. Friend is very focused on making the green transition as economically successful as possible. I and others in the Government are very focused on getting a proper electric vehicle charge roll-out, and I would be happy to speak to her to discuss the plans that we have adopted.

[Edward Miliband (Doncaster North) (Lab)]

Families looking at soaring gas prices will be deeply worried about how they will pay their bills. One of the reasons UK households are particularly vulnerable is the Government’s failure on home insulation. Emissions from buildings are in fact higher today than in 2015. I am afraid to say that the Secretary of State’s record is abysmal, with the fiasco of the green homes grant, cuts to spending, a heat and buildings strategy originally promised for spring 2020 which is still not published, and no proper plan for retrofit. Will he admit that families this winter will be paying the price of the Government’s failure on home insulation?

[Kwasi Kwarteng]

I will not admit that at all. The right hon. Gentleman got the date wrong—it was to be published in quarter 1 of 2021. I was the Energy Minister who said that.

[Kwasi Kwarteng]

Yes, it is still late, and I want to publish it as quickly as possible. I can admit that candidly.

The right hon. Gentleman talks about the green homes grant. I remind him that of the £3 billion that was sequestered—ringfenced—for the green homes grant, £1.5 billion was disbursed through Salix for public buildings, and that worked very well, while £500 million was disbursed by local authorities, and that was successful. The owner-occupier bit of it was a six-month programme—a short-term fiscal stimulus—that we have closed, and we are going to have a replacement imminently.

[Edward Miliband]

It is a complete fiasco. The Secretary of State actually cut the money that was supposed to be allocated to homeowners.

At least half a million families are going to be thrown into fuel poverty by the rise in energy prices. On top of that, along with national insurance rises, millions of families are facing a £1,000 a year cut in universal credit in just 10 days’ time. It is a Tory triple whammy made in Downing Street. Will the Secretary of State stand up for the millions of people who are deeply worried about their bills and tell the Prime Minister that he should cancel the universal credit cut?

[Kwasi Kwarteng]

I have a sense of déjà vu, as we addressed this issue directly yesterday. The right hon. Gentleman knows with his experience—I was going to say in government but I mean and in opposition—that universal credit is a matter for the Chancellor, in discussion with my right hon. Friend the Secretary of State for Work and Pensions.

UK Gas Market

Debate between Kwasi Kwarteng and Ed Miliband

Monday 20th September 2021 Commons Chamber

[Edward Miliband (Doncaster North) (Lab)]

I thank the Secretary of State for his statement and agree that we should not be alarmist on the issue of security of supply, but I fear his statement was much too complacent on the price and economic impacts of the current situation.

First, on continuity of supply, we support the Secretary of State taking all necessary measures to ensure that families and businesses continue to have access to energy and that we secure the issue of CO₂ supplies. The Secretary of State says that there are mechanisms in place to ensure that customers of failing companies get taken on, but the scale of the problems in the market will provide an unprecedented test of those mechanisms, so does he believe that taxpayer support will be necessary to deal with the problem? If it is, we must ensure value for money. I welcome his caution about outcomes that lead to taxpayer subsidy for big companies to further concentrate their market share, but can he therefore explain the alternatives and what he proposes happens to the customers of suppliers that do not get through this crisis? He is making a statement later this afternoon, and it would be good to know what he is going to say.

Secondly, on the impact of price rises on businesses and industry, can the Secretary of State set out his plans to support businesses, particularly energy-intensive industries? Has he considered with his colleagues the provision of Government support, including possibly loans, to help businesses facing difficulties? On consumer support, he is right to keep the price cap in place—it is a measure I have long supported—but the rise in the price cap of £139 means half a million more families will be plunged into fuel poverty. At a minimum, he should be looking at making the operation of the £140 warm home discount automatic and possibly extending it, but even that will not be enough. Families are facing a triple whammy: rising energy prices, national insurance rises, and, at the end of this month, the £1,000 cut in universal credit. These energy price rises turn the indefensible decision on universal credit into an unconscionable one. If he really wants to put consumers first, if he really wants to help working people, and if he really wants to tackle fuel poverty, is it not time, even at this late stage, to cancel this terrible decision on universal credit?

Thirdly, we need to learn longer-term lessons from this crisis about the lack of resilience in our energy system that has contributed to very large price spikes. The Secretary of State is right that there are global issues, but the UK is facing particular difficulties. Let me give some examples of Government decision making. In 2017, the gas storage facility, Rough, then 75% of our storage, was planned for closure. The Government could have acted to keep it open but did nothing. Our lack of gas storage was raised by industry, the GMB union and the Chair of the Business, Energy and Industrial Strategy Committee in 2019, my hon. Friend the Member for Leeds West (Rachel Reeves). A Minister said in reply that

“the UK’s gas system is secure and well placed to respond effectively to unexpected changes in supply and demand”.

Were the Government not, then as now, far too complacent on the issue of gas storage?

Next, energy efficiency could significantly cut the demand for gas, but we have had the fiasco of the green deal followed by the fiasco of the green homes grant and then the delayed heat and buildings strategy, and emissions from buildings are today higher than in 2015. When is the Secretary of State going to have a proper retrofit plan?

Our new nuclear programme is stalled, and while the Secretary of State is right that we have made progress on renewables, the truth is that we need to go further and faster, with a more diverse supply. Above all, there is not yet enough of a clear plan from Government for how we meet net zero with affordability and security. People have read what the Climate Change Committee said in its most recent progress report this summer:

“It is hard to discern any comprehensive strategy”.

Is not the truth that there is a direct line from the delay, dither and failure to the issues we face today?

I therefore urge the Secretary of State in the midst of this crisis to use this autumn’s net zero strategy—delayed—the net zero review, also delayed, and the comprehensive spending review to finally put in place a proper plan. Households, businesses and energy suppliers are looking to the Government for support and direction as we face this crisis; it requires not words but action and delivery. It is long past time for Government to get a grip.

[Kwasi Kwarteng]

I apologise, Mr Speaker, for issuing such a lengthy statement.

The right hon. Gentleman talks about a plan, but we have plans and strategies galore. We have the energy White Paper, which was widely well received and which I was very happy to present as Energy Minister, and we also have the Prime Minister’s 10-point plan. I was struck by the fact that when former US Secretary of State John Kerry came to the UK he publicly said that the UK’s plans for decarbonisation were more advanced than those of any other country.

The right hon. Gentleman has a legitimate concern about vulnerable customers, and I have made it very clear to the industry and to Ofgem that they are absolutely our No. 1 priority. We are looking at the warm home discount. As a Government, we have always focused on protecting the vulnerable and people in fuel poverty, and we will continue to do so.

--- Later in debate ---

[Kwasi Kwarteng]

It is not for me to comment on Russian energy policy or strategy here, although we can speculate about its motives. My job, and that of the Government, is to ensure that, whatever Russia does, we have security of supply and can protect our most vulnerable consumers. That is exactly what we are doing.

[Edward Miliband]

On a point of order, Mr Speaker.

[Edward Miliband]

Yes, Mr Speaker.

To follow on from the point made by the right hon. Member for Forest of Dean (Mr Harper), I submit that it really is not good practice for the Secretary of State to come to this House and say that he will make a joint statement with Ofgem this afternoon to set out the Government’s next steps, but refuse to tell Members what is in that joint statement. The point of his coming to the House is for him to be questioned on Government policy—including policy to be announced this afternoon.

[Kwasi Kwarteng]

Further to that point of order, Mr Speaker. I am happy to answer the right hon. Gentleman. He will appreciate that this is an extremely fast-moving and dynamic environment. As of 4.32 today, we have not finalised the statement, so it would be premature of me to make an announcement right now. There will be subsequent House of Commons events—we have oral parliamentary questions tomorrow and I am to appear before the Select Committee on Wednesday—so we can discuss these issues in full detail in the next few days.

Oral Answers to Questions

Debate between Kwasi Kwarteng and Ed Miliband

Tuesday 25th May 2021 Commons Chamber

[Kwasi Kwarteng]

It is an excellent question. My hon. Friend and I corresponded about this and spoke directly about this when I was the Minister of State for Energy. I am very pleased to tell him that we are committed to regulating the heat networks market within this Parliament, and we will bring legislation forward at the earliest possible opportunity. It is clearly a really important thing to be doing, and he and his constituents can rest assured that we are acting with due speed.

[Edward Miliband (Doncaster North) (Lab)]

I want to return to fire and rehire. Chris is a British Gas engineer who lives in Spelthorne, the Secretary of State’s constituency. Chris says:

“Working under fire and rehire has been horrific. It has caused stress and anxiety not just for me, but my family. I can’t overstate the effect that it has on mental wellbeing. And the Government and the Business Secretary, who is supposed to represent me…in parliament is doing absolutely nothing about it. I voted for Kwasi Kwarteng in 2019, but he’s failed us on this. A total let down.”

Chris met the Business Secretary recently and asked him why he had not acted on fire and rehire. What did he tell him?

[Kwasi Kwarteng]

I remember the meeting well. I met Chris, I think on the Avenue in Sunbury, and I said very clearly to him that we had an ACAS report that we hoped to publish in due course, and that once we published that we would set out further action, as the Under-Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend the Member for Sutton and Cheam (Paul Scully), very ably mentioned earlier.

[Edward Miliband]

The problem is that the right hon. Member is the Business Secretary. He is in charge. He promised an employment Bill two years ago. He has had the ACAS report for three months. He is not even telling us what is in the ACAS report. Maybe he can satisfy Chris and millions of people around this country by saying from the Dispatch Box today that he agrees with the principle that we should legislate to outlaw fire and rehire, and he will bring forward an employment Bill to do it. If he does not do that, people will suspect that the truth is not that he is not acting because he cannot act, but that he is not acting because he does not want to act, because he thinks this kind of one-sided power for employers is necessary for our economy to succeed.

[Kwasi Kwarteng]

We all know the Marxist trope of the employers versus the workers, and we have moved on from that—most of us. There are two issues there. One was related to the employment Bill, which we are committed to introducing to this House when we can, and that has always been our position. The second is that the whole point of having an ACAS independent report was to allow it to happen and then we would consider, after publication, the steps forward. I know the right hon. Member is impatient, and I know he is probably wishing that there was a leadership change in his party, but we have to stay focused on delivery.

10-point Plan: Six Months On

Debate between Kwasi Kwarteng and Ed Miliband

Tuesday 18th May 2021 Commons Chamber

[Kwasi Kwarteng]

I am pleased to say to my hon. Friend that I would be happy to meet him in Cornwall at any time of his choosing, provided, of course, that it fits in with my diary commitments. I am fully aware of the transport decarbonisation plan being absolutely crucial to his constituents—

[Edward Miliband]

When?

[Kwasi Kwarteng]

The right hon. Gentleman asks when. Unfortunately, wide though BEIS’s purview and authority are, my right hon. Friend the Transport Secretary will have a more accurate perspective on when that strategy will be published.

Advanced Research and Invention Agency Bill

Debate between Kwasi Kwarteng and Ed Miliband

2nd reading
Tuesday 23rd March 2021 Commons Chamber

[Edward Miliband (Doncaster North) (Lab)]

Let me start by saying that across the House we share the admiration for British science. It is one of our most brilliant national assets, employing nearly 1 million people directly and generating extraordinary value for our country. As the Secretary of State eloquently said, the work on vaccines has been truly remarkable. We commend our scientists and everyone involved for their work. Indeed, I hope the Secretary of State will not mind my saying that it is a successful example of an industrial strategy; the right hon. Member for Tunbridge Wells (Greg Clark) probably shares my view.

I turn to the details of the Bill. I should say from the beginning that we support the Bill; we have some issues with it, but we certainly support its aims. I just want to say something about the wider context, because I found it slightly remarkable that the Secretary of State did not mention the fact that we are two weeks from the start of the next financial year but the scientific community does not know its budget, and the Government appear to be contemplating significant cuts to its programmes.

The Secretary of State said last week to the Science and Technology Committee, which is chaired by the right hon. Member for Tunbridge Wells, that the Government

“are talking the talk of a science superpower…but…we also have to walk the walk.”

Quite. We support the intent of the Advanced Research and Invention Agency, but hon. and right hon. Members across the House should be aware that while the ARIA budget is £800 million over this Parliament, UK Research and Innovation’s annual budget is £9 billion. Last week, UKRI published a letter confirming that the BEIS official development assistance allocation will lead to a £120 million gap between its allocation and the commitments that it has already made. It warned of cuts coming on that scale, and the House should be aware of where those cuts are going to be. Potential areas include climate change, antimicrobial resistance, pandemics, renewable energy and water sanitation. Those are the kinds of things that that funding addresses. Mr Cummings was also at the Select Committee meeting—I will return to him shortly—saying that ARIA would solve the problems of civilisation. That is all very well, but I fear that these cuts seem to be coming right here, right now; and we cannot launch a successful moonshot if we cut off the power supply to the space station.

The other fear that we have is that the threat of cuts does not end there, because there is no clarity on how to cover the huge cost of the UK’s ongoing participation in Horizon Europe programme. To be clear, this programme used to be funded not from the science budget, but from our EU contributions. I say to the Secretary of State that it surely cannot be right to take money from the science budget to fund our participation. He will know that there is real fear in the scientific community about that.

I will give the Secretary of State the chance to intervene: does he not agree that cutting the science budget to fund Horizon would be exactly talking the talk but not walking the walk? I will happily give way to him if he wants to tell us. Maybe he can tell us when we will get clarity—when will the scientific community get clarity on how the Horizon money will be funded? He does not want to intervene, but the science community deserves clarity. We support ARIA but it deserves clarity. These are people’s jobs. This is incredibly important work and I hope he is fighting with his friends in the Treasury as hard as he can to give people that clarity and avoid the cuts.

[Kwasi Kwarteng]

rose—

[Edward Miliband]

Maybe he is going to tell us the news.

[Kwasi Kwarteng]

The right hon. Gentleman will know from his years in government—appreciably, many years ago now—that these conversations with the Treasury are ongoing, and we hope to get a satisfactory result.

[Edward Miliband]

We shall look forward to the Secretary of State getting a satisfactory result. I am not sure that I always got a satisfactory result with the Treasury, although I was in the Treasury at one point, at least as an adviser. This is very important and, as I say, people’s jobs and livelihoods and the scientific base of this country, of which we are all so proud, depend on it.

Let me come to the Bill, which we support. The Bill is important—the Secretary of State said this—because there is incredible work going on in the scientific community, but there is consensus that there is a lack of a mechanism to identify, build and fund truly ambitious, high-risk, high-reward programmes. We recognise the case for an independent agency that operates outside the established research funding mechanisms, but we feel that the Bill requires improvement.

I guess our concerns cohere into a different view about the role of Government and the lessons of DARPA, which my hon. Friend the Member for Cambridge (Daniel Zeichner) talked about, on which in some broad sense—maybe not in the Secretary of State’s mind, but in others’ minds—ARIA is modelled. It is impossible to ignore what we might call the spectre of Dom in this debate. He was at the Science and Technology Committee—chaired by the right hon. Member for Tunbridge Wells—and he does rather hang over this Bill. He is its sort of governmental godfather. In his telling, DARPA’s success—I think this is important—is simply because the Government got out of the way and let a bunch of buccaneering individuals do what they liked. It is definitely true, as I understand it, that DARPA has important lessons about the need for the culture that I talked about, including higher reward and, of necessity, a higher chance of failure, but it is simply not true that DARPA was somehow totally detached from Government. DARPA had an obvious client—the Department of Defense—a clear mandate around defence-related research, a clear synergy in its work with the procurement power of the US DOD and, incidentally, abided by laws on freedom of information.

I want to suggest that there are two different views about ARIA: one is that we should let the organisation simply do what it wants, relying on the wisdom of a genius chair and chief executive; and the other subtler and, in our view, more sensible approach—one more consistent with the lessons of DARPA—is that Government should set a clear mandate and framework for ARIA and then get out of the way and not interfere with its day-to-day decision-making. I also believe there is a democratic case, because the priority goals for the spending of £800 million over this Parliament should be driven by democratic choices; not about the specific items that it funds, but about the goals and mission.

That takes me to the three points that I want to make: first, about the mandate for ARIA; secondly, about its position in the wider R&D system; and thirdly, about accountability. I will try to emulate the Secretary of State’s brevity—perhaps not exactly his brevity, but as much as I can.

The deputy director of DARPA says about its success that

“having national security as the mission frames everything.”

The Secretary of State said to the right hon. Member for Tunbridge Wells at the Science and Technology Committee:

“If I were in your position, I would be asking what the core missions of ARIA are.”

I think the point that Dominic Cummings made, or I am sure would have made, is that this will be a job for the people we hire who are running the organisation. The Secretary of State went on:

“It will be up to the head of ARIA to decide whether he or she thinks the organisation should adopt what the innovation strategy suggests…or reject it.”

I really understand the wish to give freedom to ARIA, but surely it is for Government to shape and not shirk the setting of priorities, and it is not just DARPA where we can learn that lesson. Moonshot R&D—the Japanese agency established in 2019 to fund challenging R&D—has seven specific moonshot goals set by the Japanese Government, and my understanding from the evidence taken by the Science and Technology Committee is that the UK scientific community agrees with that idea.

I notice the hon. Member for North East Bedfordshire (Richard Fuller) putting his head in his hands. He has done that before when I speak, but let me just make this point in seriousness: £800 million is not in the scheme of things a huge amount of money, certainly when compared with UKRI’s budget. The concern is that unless, as the Select Committee said, ARIA focuses on a single or a small number of missions, it will dilute its impact.

Take the net zero challenge. I believe it is a challenge of political will and imagination, but it is also a technological challenge. If it is the No. 1 international challenge, as the PM said last week, and if it is the No. 1 domestic challenge, as I think it is, why would it not be the right mandate for ARIA for at least its first five years? Indeed, Professor Richard Jones and Professor Mariana Mazzucato, who perhaps have even greater claims than Dom to being godfather and godmother of this idea, said that climate change would be an ideal challenge on which an agency such as ARIA would focus. To be clear, providing a mandate does not mean micro-managing decisions, and it would be grossly simplistic to suggest otherwise.

Oral Answers to Questions

Debate between Kwasi Kwarteng and Ed Miliband

Tuesday 23rd March 2021 Commons Chamber

[Kwasi Kwarteng]

I would be absolutely delighted to meet my hon. Friend and the bodies that he has mentioned. We are absolutely committed to nuclear power and to the people of north Wales, in particular. Wylfa is still a prime candidate for new nuclear power and I look forward to pursuing our discussions to see what may be done in this regard.

[Edward Miliband (Doncaster North) (Lab)]

Let me associate myself, Mr Speaker, with the important remarks you made on this national day of remembrance.

I want to follow up the question about Liberty Steel because the Business Secretary’s answer simply was not good enough. No ideology or dogma must stand in the way of protecting the jobs of 5,000 people and many more in the supply chain. This is a critical part of our national infrastructure and it is critical to those communities. Will he now do what he has failed to do so far and say that he will do whatever it takes, including public ownership if it is the best value for money choice, to save those jobs if it is necessary?

[Kwasi Kwarteng]

The right hon. Gentleman will be absolutely aware that this is an ongoing commercial matter. He will know that I have seen local management, representatives of the unions and a number of people who are very, very keenly involved in the steel sector, and it would not be appropriate for me to enter into what is a commercially sensitive situation. My heart goes out to the workers. They are an excellent workforce, and Liberty Steel has a fine tradition in this space, but it would be inappropriate for me to enter into what are live, commercially sensitive issues.

[Edward Miliband]

It is not about the Business Secretary’s meetings or about his heart; it is about his action and his willingness to say that he will do plan B if it is necessary to save those jobs, as we expect him to do. The problem is that the reason people are suspicious of the Secretary of State is that there used to be a cross-party consensus in this country about industrial strategy, but in his two months in office he has torn up the industrial strategy, abolished the Industrial Strategy Council, and thrown in the bin all the work local areas have done over a number of years. Maybe he can tell the business community: why does he hate industrial strategy so much?

[Kwasi Kwarteng]

I think it is very easy for the right hon. Gentleman to get obsessed with the words “industrial strategy”. What this Government are committed to is action. That is why we launched the decarbonisation industrial strategy. That is why we are pursuing the fourth auction round in offshore wind. That is why John Kerry, who I was very happy to meet two weeks ago, said that this country is a world leader in decarbonisation.

Budget Resolutions and Economic Situation

Debate between Kwasi Kwarteng and Ed Miliband

Tuesday 9th March 2021 Commons Chamber

[Edward Miliband (Doncaster North) (Lab)]

I want to start by quoting a speech given in this Chamber 77 years ago, in June 1944, by Ernest Bevin, who was then the Minister of Labour. He said:

“With my right hon. Friend the Prime Minister, I had an opportunity of visiting one of our ports and seeing the men, of the 50th Division among others, going aboard ship…The one question they put to me when I went through their ranks was, ‘Ernie, when we have done this job for you, are we going back to the dole?’…Both the Prime Minister and I answered, ‘No, you are not.’”—[Official Report, 21 June 1944; Vol. 401, c. 212-13.]

The circumstances of this Budget are, of course, very different, but the sentiment is just as relevant. As we come through a very different national crisis, how do we in our generation do right by the British people? Some 120,000 people have died from covid. Our way of life has been dramatically restricted. Our key workers have stepped up and put themselves in harm’s way for all of us. Businesses have shuttered to protect our health and have faced incredible strain. The British people have been nothing short of heroic.

While the crisis has revealed the best of our country, it has also laid bare the deep flaws in the way our institutions and economy are run. In the words of the OBR,

“the UK has experienced higher rates of infection, hospitalisations, and deaths from the virus than other countries.”

We know that is partly because of higher deprivation, inequality and poverty. We know we are deeply unequal, both within and between our regions. Even before this crisis, 2 million of our fellow citizens faced destitution. That means they lacked at least two of the following basic essentials: shelter, food, heating, lighting, clothing or basic toiletries. That should shame us all in one of the richest countries in the world. We know our public services are deeply underfunded, from health to social care. We know, too, that the world of work is characterised by deep divisions of power, which meant some workers were safe and some were not.

This chasm between the spirit of the British people and the reality of how our country works demands from us that we face the Bevin question once again, of how we transform our country not just on jobs, but on public services and on inequality, too. This challenges us all, whatever party, to think bigger and more boldly. Of course that is hard, in the dire circumstances we face coming out of this pandemic—the public finances are under strain and the economy will take time to recover—but they are far less dire than those Bevin and his colleagues faced after 1945, and they thought big about the kind of country we could be. They raised their sights in the face of adversity.

While I would praise some of the measures taken by the Chancellor, I do not believe that a fair-minded observer would say that the Budget passes the Bevin test. On jobs, according to the OBR, even by 2025 unemployment never even gets back to pre-crisis levels. On welfare, the Budget tells people on universal credit that they need to go back to living on £74 a week from September, just as unemployment starts to peak. On the next crisis—the climate emergency—the Budget rejects a green stimulus and cuts green spending, as I will explain.

On public services—I do not think the Business Secretary talked about public services—the Budget appears to draw the extraordinary lesson from the crisis that public services need less resources, not more. In total, £17 billion has been taken out of departmental spending since Budget 2020, which was before the crisis, despite the greater needs and despite all that has been revealed in the pandemic.

What does building back better mean when unemployment is higher as far as the eye can see, the welfare state goes back to the way it was, the green revolution is ducked and public service spending is cut? This Budget fails the Bevin test and the build back better test. Why? I think it is because the Government have not truly learned the lessons of the past decade.

To be fair, the Government have been remarkably open about the failure of the last decade. The Business Secretary referred to the “Build Back Better” document that they published. It is a very interesting document, perhaps not for the reasons intended. There is a striking chart that shows the long-standing productivity gap between ourselves and our competitors, but it shows something else. In the past decade, we have not addressed our long-standing weaknesses, but fallen further behind. The productivity gap has doubled with Germany and is up by three quarters with France and one quarter with the US. Government getting out of the way did not work. Markets left to their own devices did not work and austerity did not work, so the question for the Government is: what are they going to do differently in the coming years from the last 10?

We needed first of all—the right hon. Members for Maidenhead (Mrs May) and for Tunbridge Wells (Greg Clark) have made reference to it—an industrial policy that intervenes at scale to help growth sectors and industries to succeed. There is one pre-eminent test on that, which is the green stimulus. To give some context, President Biden has pledged a $1.7 trillion green plan over 10 years. Germany has committed €40 billion over two years and France €30 billion over two years. Even what the Business Secretary claims—I will come to that shortly—is a fraction of that amount over the decade.

Let us take the infrastructure bank, as the Secretary of State talked about that. The OBR is highly revealing on the infrastructure bank: the annual spending of the bank is going to be just a third of the amount of its predecessor, the European Investment Bank—£1.5 billion a year versus £5 billion a year. So, not more investment, but less. What is the OBR’s verdict on the infrastructure bank? It says that

“given the scale of its operations (at around 0.1 per cent of GDP a year) and the fact that it replaces only some European Investment Bank activity, we have not adjusted our economy forecast.”

In other words, the bank has absolutely zero effect on growth, from all of those green measures that the Business Secretary talked about.

One of the most interesting things about the Budget—but which has perhaps been less remarked on—is that the growth returns to trend is up just an anaemic 1.7%. That is incredibly low by historical standards. This is low growth and low ambition.

A green stimulus could have helped our crucial manufacturing sectors, but instead they were left out in the cold. On steel, where is the £250 million clean steel fund, which was promised two years ago? There is no mention of steel in this 110-page document. On offshore wind, we are way off the Government’s target of 60% domestic content, and the negligible resources in the Budget simply do not measure up. On the automotive sector, I want to say something positive: it is good that the Government have brought forward the date of the petrol and diesel phase-out to 2030, which is what we called for. But I say to the Business Secretary that the rhetoric of ambition is not matched by financial support for this crucial sector. The Society of Motor Manufacturers and Traders said in reaction to the Budget:

“This is an opportunity lost”.

Germany is investing a total of €7 billion for transformation; we are way off that. The Government seem almost allergic to support for these sectors.

Let us take another area that everybody agreed could create hundreds of thousands of jobs, and I do not think the Business Secretary mentioned this either. It could help people in every community in our country: home insulation and retrofitting. We need a transformation of our housing stock. People may forget that the flagship policy of the Prime Minister’s 10-point plan was the green homes grant. The Business Secretary was given personal responsibility, as the Minister of State, for the green homes grant. He told us the Government would learn the lessons of the green deal, which had been a complete disaster:

“We’re completely focused on trying to make this a much better roll-out, and we’ve learned our lessons…We need to make sure that the right projects are identified, and that we can get the money out”.

It would “pave the way”, he said,

“for the UK’s green homes revolution.”

What has happened? The project has been a complete fiasco on his watch: contractors not paid; installers forced to make lay-offs; homeowners unable to get the grants—not a long-term comprehensive plan, but a piecemeal, privatised approach characterised by shambolic delivery on his watch, and he said not a word about it. He would be welcome to come in and say something about it now; he obviously does not want to. And no wonder: now the Government are cutting more than £1 billion from the green homes grant scheme as it has been such a disaster.

Is this just an accident? No, it is not. The failure on the green homes grant and on green manufacturing is all part of the same problem. The Government are good at talking about a green revolution; they will the ends, but not the means—a proper, thought-through industrial strategy. Indeed, tragically, we now have a Secretary of State for Business, Energy and Industrial Strategy who does not believe in industrial strategy. If I can put it this way, he is half the Secretary of State he once was. Any self-respecting organisation would have asked him in the interview when he was applying for the post of Secretary of State for Business, Energy and Industrial Strategy—although Secretaries of State do not exactly apply, they are offered the job—“Do you believe in industrial strategy?”

We got suspicious when in one of his first acts he tore up plans for the industrial strategy White Paper, and we thought, “How curious.” Then on Thursday we found out he had abolished the Industrial Strategy Council set up by the right hon. Member for Maidenhead. I hope the right hon. Lady will not take it amiss if I say that I admired some of her work, and this is one of the things I admired. I pay tribute to her and the right hon. Member for Tunbridge Wells; they learned the lessons of our history and said, “We need Government, business and unions working together on this joint enterprise, coming together to address the challenges our country faces.” And, goodness me, do we need this now as we seek to recover from coronavirus.

I have to say to the Business Secretary, who is new to his job, that this decision has caused consternation—I do not think that is too strong a word for it—in businesses up and down the country. Make UK said that it causes

“significant concern and frustration within manufacturers of all sizes across the UK.”

The director general of the British Chambers of Commerce said that the strategy’s demise was a

“short-sighted step that ministers will come to regret”.

All around the country, thanks to the work that was done, local chambers of commerce and local enterprise partnerships have spent years working on local industrial strategies. Now they are wondering what they are supposed to do with them, because the strategy seems to have fallen out of favour.

People might think that is just an accident. It is not an accident. I know that the Business Secretary dismisses his past pamphlets as the work of a maverick Back Bencher, but it is not a coincidence, because this—it is very interesting—is what he wrote:

“The draining of effort from our psyche has been replaced by a sense of entitlement.”

I do not know quite what that means. He continued:

“It has also led to a false belief in the value of industrial policy.”

I thought he had put all that behind him, but clearly not. He is so ideological—so dogmatic—about the free market that he had to get rid of the industrial strategy, and therefore he cannot deliver the partnership between Government and business that the country needs.

Let us turn more generally to business support. Businesses have made huge sacrifices in this crisis, as I said, and they face huge challenges in recovering from the pandemic, added to which are the billions of pounds of red tape as a result of the implementation of the Brexit deal. Even when the health crisis is over, businesses will take a long time to recover. We welcome some of the measures talked about by the Business Secretary, but there are still important groups that I believe are left out: two thirds of the excluded self-employed are not helped by this Budget, including limited companies, many freelancers and others; supply chain businesses are still left out; and whole sectors, such as the wedding industry, are ignored. Their plight will hold back the recovery.

We know that business debt is one of the biggest threats not just to individual businesses but to the recovery as a whole. Some £70 billion of business debt has built up during the crisis. In December, the Federation of Small Businesses reported that the proportion of those businesses describing their debt as “unmanageable” was 40%. The OBR says that, on current plans, the Chancellor will have to write off £27 billion of those loans.

In these circumstances, a sensible Chancellor would have been creative, yet he still refuses to budge. We have a scheme from the Chancellor with no links to profits, no ability to restructure and no ability for management or workers to develop creative solutions. He is just leaving it to the banks. Well, even the banks are telling him that that is very risky. If we face a wave of insolvencies, it will be at the Chancellor’s door. The danger is that this holds back the recovery, and it certainly fails the Bevin test.

Many of the businesses facing those debts are on our high streets, in retail. What is the single biggest long-term change that those businesses require? It is to address the deep unfairness that high street shops face against online retailers. I am sure that the Business Secretary is familiar with that problem. The Government launched a review of business rates not in the last Budget, not in the Budget before, not in the one before that, but six years ago. In fact, they launched the review so long ago that I was Leader of the Opposition when they did so—it is that long ago! A long-term Budget would have finally taken action in this area, but instead we got more delay.

I turn to the measures that were taken. On the so-called super deduction, we will welcome any measure to help business, but I point out, as we think about our capital stock and investment, that the OBR says that that measure

“does not affect the long-run level of the…capital stock”.

In other words, it will make a difference to the timing of business investment, but in fact, according to the OBR, business investment is expected to fall significantly in 2023 and 2024, and there are real questions about why this measure is targeted just at plant and machinery, which is only one fifth of business investment. Then we have freeports, which have been tried for 30 years. I am afraid that all the evidence is that, at best, they may displace economic activity from one area left out of prosperity to another a few miles away.

The problem is that the Government simply do not get that we cannot build private sector success on the back of public sector austerity. The cuts of the last decade have made local services worse, squeezed demand and undermined the crucial infrastructure of business success. People might wonder, “Well maybe they’ve learned their lesson.” I fear they have not. Again, this was not very clear from the Budget on the day, six days ago, but in a year’s time, for many of our public services, it will be austerity all over again. Next year, for current services in transport, housing and local government, and other so-called unprotected areas, public spending will be cut in real terms by £2.6 billion. Let us be clear: growth is anaemic, because their measures are so weak, so they turn to a strategy they tried from 2010 of cutting current spending and raising taxes on ordinary families. I fear they have not learned the lessons. They cannot grow the economy if they are giving tax cuts with one hand, but cutting the services that communities and businesses rely on with the other.

The issue is not just about resources, but about who spends them and where they are spent. We are the most regionally unequal country of any major developed economy and the most centralised. The levelling-up fund is a centralised pot of money to be determined by Ministers, and we are starting to discover where the money is actually going.

Salford is the 18th most deprived area in the country, but it is placed not in the category of most need—category 1 —but in category 2. Barnsley is the 38th most deprived area and is also in category 2. Richmond is 256th out of 317 for deprivation, but it happens to cover the Chancellor’s constituency, so it has found its way into category 1. The Government have said this is based on objective criteria, so what are they? Again, I am very happy to give way to the Business Secretary if he wants to explain what these objective criteria are. If it is all above board, why have they not published the criteria? Of course, they have form on this—the towns fund, the crony outsourcing of contracts to donors. The British people have a right to expect that the money meant for the most deprived areas is spent in the most deprived areas.

Ministers do not get the role for Government, they leave it to the market; they cannot tackle the inequalities we face; and, far from leaving austerity behind, for many it will look like austerity, feel like austerity and it will be austerity.

Of course, we have the most egregious example of all in the decision to cut the pay of nurses and NHS staff. They more than anyone have been the heroes of this crisis: they have put themselves in harm’s way for all of us. The Government promised a pay rise in the NHS plan. They did not just promise it; they legislated for it and they walked through the Lobby a year ago to vote for it. The Business Secretary was put up on “Question Time” on Thursday, as this decision was breaking, to try to justify this broken promise, and this is what he said:

“When I look at people in the hospitality sector, in aviation, in retail, many of them are very…worried they won’t…be in a job in two or three months.”

[Kwasi Kwarteng]

indicated assent.

[Edward Miliband]

He nods. As if that is somehow a justification for cutting the pay of nurses. What is the world in which their plight justifies cutting the pay of our nurses? I have never heard anyone, in a year of discussions, in any of those sectors say to me, “I’m finding it hard, so Government should cut nurses’ pay.” People would only say that if they believe in a race to the bottom or they believe in levelling down.

Before the Minister says everybody needs to tighten their belts, he should be careful, because it turns out there is plenty of cash to spend millions on a Downing Street makeover for a media briefing room that has not been used; to spend hundreds of thousands of pounds to pay off the man the Home Secretary was accused of bullying; and to give Dominic Cummings a 40% pay rise. The truth is it is one rule for them and another rule for everyone else. Let them not ever try again to tell people in this country that we are in this together.

Beneath the rhetoric, the Government cannot be the answer to the problems of the country. They may have produced a document charting 10 years of failure on productivity, but they have not changed their view. The answer to 10 years of failure cannot be more of the same. This should have been a Budget with a plan to respond to the climate emergency by creating the jobs of the future; and a Budget with a plan to help business through the crisis and beyond with debt restructuring, providing a decent pay rise for our key workers and dignity in the social security system, rather than plunging the most vulnerable into deeper poverty. This is a Budget of low ambition for Britain. The post-war generation would never have accepted such a meagre vision as that presented by the Chancellor and the Government. They never would have, and neither should we, and that is why we will vote against the Budget tonight.

Oral Answers to Questions

Debate between Kwasi Kwarteng and Ed Miliband

Tuesday 9th February 2021 Commons Chamber

[Kwasi Kwarteng]

I fully appreciate—this is our key message as a Government—that jobs and employment are a No. 1 priority. That is exactly why my right hon. Friend the Chancellor extended the furlough scheme. I am in constant conversation with him about how better to provide support for our economy under this distress.

[Edward Miliband (Doncaster North) (Lab)]

Businesses are facing a £50 billion bombshell in less than two months as Government support packages are due to end, and there is still no clarity about the future. The Secretary of State must realise that the Budget is too late. Businesses are making decisions now about their future and that of their workers. The CBI director general said a week ago:

“Businesses are currently completely in the dark when planning for the weeks and months ahead and this is hindering investment.”

The Secretary of State’s job is to stand up for our businesses, so can he explain to them why, yet again, they are being left completely in the dark?

[Kwasi Kwarteng]

What I will explain is the fact that, in four weeks in the job, I have seen 200 business leaders. I meet the BROs—the business representative organisations —constantly, and I am in constant dialogue with them to ensure that the Government provide the support. We have provided £280 billion so far, which is beyond any precedent that we have seen. We are in constant conversation not only with our stakeholders but with the Chancellor of the Exchequer.

[Edward Miliband]

Excuses are no substitute for a plan. Businesses need clarity and certainty, and they are not getting it from the Government. Let me turn to another critical issue facing them. We want them to succeed in our new trading relationship with the EU, but according to Make UK, 60% of manufacturers are experiencing disruption, the fashion industry says it faces “decimation”, and hauliers are warning of a permanent reduction in trade. What personal, tangible action is the Business Secretary taking to get a grip and deal with the mountains of red tape now facing our businesses?

[Kwasi Kwarteng]

Of course, Mr Speaker, you will remember that, ahead of the Brexit deal, we were told that there was never going to be a deal and that we were going to crash out with no deal. We were told all sorts of scare stories about what would happen with Brexit. I fully accept that there are issues on the border, and I fully accept that many of the business leaders I have spoken to have raised issues, but I think the situation is far better with a deal—ask Nissan in Sunderland—than was the case, certainly, only three months ago.

Oral Answers to Questions

Debate between Kwasi Kwarteng and Ed Miliband

Tuesday 15th December 2020 Commons Chamber

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

My hon. Friend and I have had a number of conversations about the green industrial revolution. I am very excited about the opportunities in her wonderful county, and I look forward to visiting, when restrictions permit me, some of these wonderful projects.

[Edward Miliband (Doncaster North) (Lab)]

Businesses face a double whammy from the ongoing economic crisis and potential Brexit disruption. They want the Business Secretary to stand up for them. Some 61% of the country will be in tier 3 from tomorrow, and the situation for many pubs, restaurants and bars is catastrophic, as this morning’s record redundancy figures show. Will the Secretary of State now finally recognise what he has been told repeatedly by Members across the House—and again today—and by industry that support for the hospitality sector is hopelessly inadequate if many of these businesses are to survive through the winter?