Civil Nuclear Road Map

Debate between Lord Callanan and Lord Liddle

Monday 15th January 2024 Lords Chamber

[Lord Callanan (Con)]

My noble friend makes a good point. Separate processes for potential reforms to the planning system are going forward in government across a range of areas. Of course, it is important not just for the nuclear industry but in terms of grid connections, solar farms and all the other technologies coming forward. We need to find ways to do these things more quickly in this country and to make sure that people have appropriate opportunities to feed in their views, their objections, et cetera, but there is no reason why it should take literally decades to do some of these schemes.

[Lord Liddle (Lab)]

My Lords, speaking as a native of Cumberland and a former Cumbria county councillor, does the Minister recognise that the most enthusiastic supporters of new nuclear power are to be found in west Cumberland and among the people who work at Sellafield and in its associated activities? Will he end the record of dither and delay—this is not a party-political point—about what is to happen in the nuclear industry? Does he recognise that at Sellafield and at Moorside there is a potential site for SMRs and the major new gigawatt nuclear power station, which was planned but then scrapped, although it is now apparently back under consideration?

[Lord Callanan (Con)]

I agree with a lot of what the noble Lord said. I absolutely accept the strong support of the communities in west Cumbria. I am not sure I agree that they are the most enthusiastic—I am sure our colleagues from Wales would disagree about that—but we can probably agree that they are as enthusiastic as many other communities. His party-political point about dither and delay was slightly unfair; much of it was started under a Government whom he was close supporter of. But perhaps we should put those matters aside and welcome the fact that both Front Benches now agree that we should take forward the new nuclear renaissance we have announced.

Electric Vehicle Battery Production

Debate between Lord Callanan and Lord Liddle

Monday 23rd January 2023 Lords Chamber

[Lord Callanan (Con)]

We have constant discussions with UK motor manufacturers and of course, we are always available for further discussions with companies that want to bring forward projects. The noble Baroness, as usual, is completely wrong. Already there have been substantial investments in this country. On 1 July 2021, Nissan and Envision announced a £1 billion investment to create a north-east EV hub. The site will produce a projected 100,000 battery-electric cars each year. Ford has committed a total of £380 million to make Halewood its first EV component site in Europe. Pensana received an in-principle offer of government support for its £145 million factory near Hull to make metal for magnets. So, this investment is coming. Of course, it was disappointing that the Britishvolt project was not successful, but the site remains an excellent one for this investment. Subject to discussions with the local authority and the administrators, we hope it can be taken forward.

[Lord Liddle (Lab)]

My Lords, what does the Minister anticipate the future of Jaguar Land Rover to be if there is no battery factory to supply it in the UK?

[Lord Callanan (Con)]

Jaguar Land Rover has an exciting future. It is an excellent company, providing brilliant vehicles that are exported all over the world. I am sure that it wants to make sure that its supply chain is appropriately robust.

Energy Prices Bill

Debate between Lord Callanan and Lord Liddle

2nd reading
Wednesday 19th October 2022 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)]

My Lords, Russia’s illegal invasion of Ukraine and its impact on global energy markets have affected families and businesses up and down this country. As we approach winter, this Government have made bold decisions so that homes are kept warm and businesses are kept open. On 8 September, the Prime Minister set out a comprehensive package to tackle rising energy prices. As part of this, she announced that we would bring forward emergency legislation, which is before noble Lords today.

I thank the Opposition and the whole House for their constructive engagement to expedite the Bill. Providing support to those who need it is a shared value across all parties, as seen in Monday’s proceedings in the other place. I also thank the DPRRC for its report on the Bill, published this morning. I welcome its constructive comments on ensuring that the powers in the Bill are appropriately drafted and justified. We will of course be responding to the committee shortly; however, it is important that we remember the context of the Bill and ensure that consumers are able to benefit from the Bill as intended and as I will set out.

The Energy Prices Bill means that consumers will pay a fairer price for their electricity and that no one is left behind. First, the Bill provides the legislative footing for the energy price guarantee, which will protect UK households from soaring energy prices. By reducing the unit cost of electricity and gas, the typical household will have the equivalent of an annual bill of £2,500. Effective from 1 October this year to the end of March next year, the energy price guarantee will provide domestic consumers in Great Britain and Northern Ireland with crucial support in the winter months.

To ensure that support is available up and down the country, an alternative fuel payment will provide a one-off £100 payment to UK households that use alternative fuels for heating. Heat network consumers will also receive a one-off £100 payment. We are exploring delivery routes for the alternative fuel payments in Northern Ireland as well.

The energy bills support scheme was announced earlier this year to provide £400 to support households. I confirm that, through this Bill, households in Northern Ireland will be able to receive equivalent support to those in Great Britain.

The Bill also provides support for non-domestic consumers, such as businesses, charities, schools and hospitals. The energy bill relief scheme will enable the Government to provide financial assistance to all eligible non-domestic organisations in Great Britain and Northern Ireland over the coming winter period. Bills will be reduced by a new government-supported price, which is less than half the wholesale prices anticipated this winter. Discounts apply from 1 October 2022, with an initial period of six months.

In three months, the Government will publish a review to consider how to continue support for non-domestic users, particularly those most vulnerable to energy price rises. The Bill provides that the scheme may be extended to those deemed eligible for up to four consecutive six-month periods. For non-domestic consumers who use heating oil or alternative fuels instead of gas, the Bill will also introduce a non-domestic alternative fuels payment. This support will likely take the form of a flat-rate payment delivered via electricity bills.

This legislation strengthens previous action by requiring, rather than expecting, landlords and other intermediaries to pass on the energy price support they receive to end-users, such as tenants, as appropriate. This applies to the energy price guarantee, to the energy bills support scheme and to the energy bill relief scheme. The Bill will also ensure that heat networks benefiting from the energy bill relief scheme pass through cost savings to their consumers. The Bill will provide for the appointment of an alternative dispute resolution body to handle complaints raised by consumers against their heat network if it has not complied with those pass-through requirements.

Finally, we must protect consumers from paying excessive amounts for this low-cost electricity, while ensuring that no firms are unduly profiting from Russia’s illegal invasion of Ukraine. Wholesale electricity prices are currently set by gas-fired generation, which is the most expensive form of generation. This means that consumers are having to pay over the odds for cheap low-carbon generation. The powers in the Bill will allow us to introduce a temporary cost-plus revenue limit for low-carbon generators that are not currently covered by a contract for difference. This will allow generators to cover their costs and receive an appropriate revenue that reflects their investment commitment and risk profile. The precise mechanisms will be subject to a consultation to be launched shortly, ahead of it coming into force from the start of 2023.

I stress that this is not a windfall tax; this is a targeted intervention to deal with a specific problem that has occurred in the wholesale electricity market. It will help to break the link between abnormally high gas prices and the cost to consumers of low-carbon electricity. We are also legislating for powers that will allow us to offer a contract for difference to existing generators not currently covered by the Government’s existing contracts for difference scheme.

[Lord Liddle (Lab)]

I raised this point about a windfall tax last week, so I thought I would be justified in intervening today. There is an argument that a windfall tax, which is predictable because the suppliers of electricity know what bills they are going to have to pay, is better in terms of promoting long-term investment in renewables, which we desperately need, than this cost-plus arrangement, which is also variable, as I understand it, by ministerial order. That provides no certainty for potential investment.

[Lord Callanan (Con)]

I am not sure the noble Lord is correct. The reason we have selected this mechanism is that it is a complicated picture; of course, many suppliers would no doubt argue that they have sold ahead their production to energy retailers, et cetera, and therefore the precise circumstances of every individual supplier will determine the arrangements that will be appropriate for them. It is not a windfall tax because a windfall tax would be levied on profits and would go to the Exchequer. This money clearly does not go near the Exchequer; it will go directly to consumers in the form of lower bills.

I mentioned that we will also introduce a contract for difference to existing generators that are not currently covered by the Government’s existing contracts for difference scheme. We hope that many of these suppliers will move voluntarily to contracts for difference payments, which will provide them with secure long-term revenue, and therefore there will be no need to impose this cost-plus mechanism.

The voluntary contract would grant existing generators longer-term revenue certainty and safeguard consumers from future price rises. This Bill is part of the swift, decisive action we are taking to deliver affordable and secure energy in the UK. There are no cost-free actions, but I think the whole House agrees that it would be wrong to do nothing. This Government will always act decisively to support households and help businesses grow. The consequences of not acting now would mean worse economic outcomes going forward; this Bill will provide certainty, reduce inflation and support economic growth. I would welcome the support of noble Lords in ensuring the Bill becomes law and therefore commend it to the House.

Economy: The Growth Plan 2022

Debate between Lord Callanan and Lord Liddle

Monday 10th October 2022 Lords Chamber

[Lord Callanan (Con)]

I know that there has never been a tax that the noble Lord does not want to increase even further, but it is already a very high level of tax. I think I saw a figure of £170 billion mentioned by the Opposition. That is worldwide profits. The UK cannot tax profits made in other jurisdictions; we can tax those that are made in our country, that we have control of. I remind the noble Lord that we also want those companies to invest in renewables, as they are doing. There are many renewable projects—offshore wind projects, hydroelectric projects, et cetera—in which we need additional investment. So the calculation made by the Treasury, which I have never seen to be shy of raising taxes in the past when it could, is that, on the one hand, of course we want to secure a fair return for taxpayers, but we also want to make sure that the profits are there to enable the massive sums that we need to invest if we want to move to a green transition in future.

On the suggestion of the noble Lord, Lord Vaux of Harrowden, of a briefing on energy markets for interested Peers, I say to the noble Lord that, as he knows, this is a complicated subject. Exactly who is making the excess profits under which particular regime is a complicated issue. He will be pleased to hear that we will shortly be debating the legislation to implement the support policies I have mentioned, and I am sure that these matters will be raised further in the debate during the passage of that legislation. I look forward to discussing it further with him then.

The noble Lord, Lord Liddle, made the point that we need to get onshore wind moving—a matter I know is dear to the heart of the noble Baroness, Lady Hayman, and she will no doubt agree. The British Energy Security Strategy recognises the range of views on onshore wind across the country and, as I said before, we will be consulting on developing partnerships with a number of supportive communities that wish to host new onshore wind infrastructure, perhaps in return for guaranteed lower energy bills. The growth plan went further, with specific changes to accelerate delivery of infrastructure, including bringing onshore wind planning policy in line with other infrastructure policies to allow it to be deployed more easily in England. The noble Baroness, Lady Walmsley, has asked many times about that; I am sure she will be pleased to hear that.

The noble Baroness, Lady Fox of Buckley, meanwhile noted the need for green innovative growth. We have indeed established a Green Jobs Delivery Group, headed by Ministers and business leaders, to act as a central forum for driving forward action on green jobs and skills. Our plans for net zero and energy security are driving an unprecedented £100 billion-worth of private sector investment by 2030 into new British industries, supporting about 480,000 green jobs by the end of the decade. To return to my earlier point, many of the companies investing in the UK are those that the Opposition wish to tax to death.

The noble Lords, Lord Bilimoria, Lord Eatwell and Lord Fox, alongside my noble friends Lord Lamont, Lord Lilley and Lord Bridges of Headley, all commented on the Government’s plans regarding taxes. The plain truth is that the Prime Minister promised that this would be a tax-cutting Government and we are keeping that promise.

A number of noble Lords also raised the overall approach of the growth plan.

[Lord Liddle (Lab)]

As I understand it, the Government are at present in negotiation with renewable energy suppliers, including companies running onshore and offshore wind farms, to persuade them voluntarily to accept a lower price than they are presently getting. This is effectively restricting their profits without any benefit to the Government in terms of tax.

[Lord Callanan (Con)]

This goes back to the point I made to the noble Lord, Lord Vaux, earlier: we will indeed be debating these matters further when the legislation arrives. It is a complicated subject. There are two types of renewables certificate. The earlier renewables obligations were given before 2015, and it can be said that some of those operators are indeed making considerable profits. They are perhaps the ones that the noble Lord is talking about. Then there are those that have been on the contracts for difference scheme since 2015, which are now, I am pleased to say, paying back into the system, such is the success of the CfD regime. But, as I said, we will be debating that when the legislation comes to this House.

Net Zero Strategy and Heat and Buildings Strategy

Debate between Lord Callanan and Lord Liddle

Wednesday 20th October 2021 Lords Chamber

[Lord Callanan (Con)]

I believe there were some documents that were published in error, but they have been withdrawn. Fundamentally, we do not believe in telling people what to eat or how to live their lives. Our focus is on helping people, incentivising them to make green choices, and to make those choices easier and cheaper. As we transition to net zero, we will be tech- led using British technology and innovation, just as we did in the last innovation revolution. I appreciate that the Greens want to lecture people and instruct them; I believe that carrots are much better than sticks.

[Lord Liddle (Lab)]

My Lords, I welcome this Statement. I have not had the opportunity, as yet, to read all the documents. I fear the criticism that I made in the debate on levelling up on Thursday is relevant. There is a clarity of destination about the Government’s policies, but no viable plan to get there. The thing that stuck in my mind is that when we are looking at the necessary move away from gas central heating, the incentives being offered for heat pumps—the £450 million over three years—is clearly inadequate, in comparison with the huge scale of the challenge.

I have always understood the noble Lord, Lord Callanan, to be a Conservative who believes in the use of market mechanisms—they are what Conservatives normally support. Can he tell me the Government’s estimate of the rise in gas prices that would be necessary to persuade the public, under market mechanisms, to install heat pumps?

[Lord Callanan (Con)]

The noble Lord will be pleased to know that I do believe in market mechanisms. His question is impossible to answer, and let me explain why. Heat pumps are three to four times more thermodynamically efficient than existing gas boilers. At the moment, because of the costs of various policies on the production of electricity to successfully decarbonised the electricity sector, there is an imbalance in pricing. The Treasury and the Government have accepted that we need to do something about rebalancing gas and electricity prices. Now is clearly not the time to do this, when we are experiencing record gas prices. In the longer term, and bearing in mind that this is a 15-year strategy, we need to change the balance of these costs. We are committed to do so. There are other market mechanisms of which I could speak in favour. We will consult on a market mechanism for gas boiler manufacturers to have a certain proportion of their sales be in heat pumps. I repeat what I have said before: the boiler upgrade scheme is not the only support mechanism we offer for installing heat pumps.

United Kingdom Internal Market Bill

Debate between Lord Callanan and Lord Liddle

Report stage & Report: 3rd sitting (Hansard) & Report: 3rd sitting (Hansard): House of Lords
Wednesday 25th November 2020 Lords Chamber

[Lord Liddle (Lab)]

Can the Minister reflect a bit more on what he has just said about treating this issue as a matter for common frameworks? It sounded as though he wanted a co-operative solution to this problem, one that would bring all the devolved Administrations into a common framework. However, at the end, he said that it is not appropriate—but why not? He has not given a satisfactory answer to that question. I remember challenging the noble Lord, Lord True, in an earlier debate at Report, on whether the Government had changed their policy on common frameworks and were no longer taking them seriously. I got a very vigorous shaking of the head from the noble Lord, Lord True. Would this not be a perfect example of how common frameworks were still being taken seriously by the Government, and would it not resolve a real problem that the Government have had?

The Minister talked about unacceptable uncertainty, but frankly, the unacceptable uncertainty about state aid has come from this Government. Mr Dominic Cummings had one view of state aid, as against the traditional Conservative view. That is where the uncertainty came from. Now that he has gone and now that he is out, thank goodness, we have an opportunity to create a sensible common policy. There is a need for balance, and it must be sensible. The best way is through a common framework in co-operation with the devolved Administrations.

[Lord Callanan (Con)]

I am not sure whether that was a question or a speech in the wrong place—but I take the noble Lord’s point. I think he is getting issues conflated. The common frameworks programme of course is a programme of work with diffuse levels of power and ultimately it is not clear where regulation lies. To resolve those matters on a cross-UK basis, there is no doubt in our mind where the proper operation of these powers is—state aid, or rather subsidy control, is a reserved matter for the UK Government. However, we have said that we want to work collaboratively. We want to work with the devolved Administrations and of course, as we have said, we will consult closely with them on any new policy that we develop and indeed on whether legislation is necessary. But, given my general support for the framework and the Government’s support for the framework programme, I do not believe that it is appropriate for this matter to be included in the framework programme.

Rolls-Royce

Debate between Lord Callanan and Lord Liddle

Wednesday 14th October 2020 Lords Chamber

[Lord Callanan (Con)]

We are happy to support good R&D projects. Rolls-Royce is a major beneficiary of our R&D support operations through the £1.95 billion Aerospace Technology Institute programme. It is also one of our largest UK investors in R&D.

[Lord Liddle (Lab) [V]]

My Lords, I was working for my noble friend Lord Mandelson in 2009 during a similar economic crisis when, as Secretary of State for Business, he secured assurances from Rolls-Royce that the establishment of the plant in Singapore would not lead to closure of the UK plant at Barlick or severe job losses. Given the crucial importance of Rolls-Royce to the British economy and the financial links between the Government and the company, why has the Secretary of State not made a personal intervention to save the Barlick plant?

[Lord Callanan (Con)]

The plant is not closing. Rolls-Royce has made it clear that it sees it having a long-term future and will continue to invest in it. However, we have to understand the context: the Covid-19 pandemic has dealt it a devastating blow. In its first half-yearly results, Rolls-Royce announced that the company’s revenue fell by 24% to £5.6 billion, while for civil aerospace, the area in which it operates, revenue fell by 37%. This is a devastating time for many companies, including Rolls-Royce. We are doing all that we can to ensure that it survives the pandemic and can go on to generate secure, well-paid jobs in the future.

European Union (Withdrawal Agreement) Bill

Debate between Lord Callanan and Lord Liddle

Committee: 2nd sitting (Hansard continued) & Committee stage & Committee: 2nd sitting (Hansard continued): House of Lords
Wednesday 15th January 2020 Lords Chamber

[Lord Callanan]

As the noble Lord is well aware, it is the role of the Commission to do the negotiating. It will report back to the Council and the Council will provide steers on how it will do that, but the detailed negotiation is a matter for the European Commission.

[Lord Liddle]

There is a meeting every fortnight of officials from member states that monitors what the European Commission is doing.

[Lord Callanan]

There is not a direct analogy between the position of the UK and that of the EU. The UK is one member state and the EU is 28—shortly to become 27—member states. My point is that this enables the UK to speak with a single voice in negotiations and ensures that partners can have faith that the Government’s position is the position of the United Kingdom.

It goes without saying that the Government will of course support Parliament in fulfilling its important role in scrutinising the actions of the UK Government in the negotiations. Both Houses will have all the usual arrangements for scrutinising the actions of the Government. I find incredible the statements that have been made about how little a role Parliament will have to play in these negotiations. This House alone has spent over 650 hours on debates on EU-exit-related themes since the 2016 referendum—believe me, from my point of view sitting on the Front Benches, it has sometimes seemed even longer. I find it difficult to believe that noble Lords will not want to question and interrogate me or whichever other Minister is in my place at the time on these negotiations. Indeed, committees of this House have already published three reports on this Bill after fewer than 10 sitting days of this Session.

Let me address the points made by the noble Earl, Lord Kinnoull, and the noble Lord, Lord Liddle, on the role of the European Parliament and the famous Article 218. The noble Baroness, Lady Ludford, is sadly not in her place but we have served in the European Parliament and know the reality of these matters. It is important not to draw unhelpful comparisons between the Commission which, as I said, negotiates on behalf of the 27 member states, and the UK Government on how negotiations are conducted. The information provided by the Commission to the European Parliament is carefully calibrated to not put the EU at a disadvantage in the negotiations. The detail of what information shall be provided to the Parliament is left entirely to the discretion of the European Commission.

The European Parliament will, as this Parliament often does, try to insert itself into the negotiations and want to influence their conduct through its various committees and organs. That is entirely right. It happens in the European Union and I suspect it will happen in this country as well. However, we need to be careful not to overstate what Article 218 does. It is not specific on reporting requirements and that compares very well with the Prime Minister’s commitment to keep Parliament fully informed about the progress of these negotiations. Article 218 does not specify what documents will be available or when.

Of course, it also bears saying that this Bill is not the final word on engagement between Parliament and the Government. As I indicated to the noble Earl, Lord Kinnoull, when we met and as I have said a number of times, the Government will want to start a process of discussions with Parliament into exactly how the various committees and organs in both Houses will scrutinise the work of the Government in this area. In our view, there is no need to set out bespoke statutory reporting requirements in the Bill or impose a statutory duty on a Minister to provide public commentary on the likely outcome of confidential negotiations at a fixed point, as was proposed in Amendment 28. In our view, this risks seriously disadvantaging negotiators acting for the United Kingdom.

I also note that setting out requirements of this type in legislation might well not have the desired effect, as an attempt to pre-empt outcomes and timings can be easily overtaken by events. Let me give the House an example. Last week, I delivered an update in this House on the Government’s negotiations and on Article 50, as required by Section 13 of the European Union (Withdrawal) Act 2018 and the Benn Act which many Members in this House spent many hours telling us was essential. For that debate, which took place at 10.30 in the evening, virtually the only people in the House to debate these matters were myself and the noble Baronesses, Lady Ludford and Lady Hayter. Many of the Members who insisted on passing the Benn Act and introducing these statutory reporting requirements did not trouble themselves to come along and take advantage of the legislation they had passed. There were only three speakers in that debate, myself and the two noble Baronesses.