Electricity

Alan Brown Excerpts

Tuesday 27th April 2021 Commons Chamber

[The Minister for Business, Energy and Clean Growth (Anne-Marie Trevelyan)]

I beg to move,

That the draft Warm Home Discount (Miscellaneous Amendments) Regulations 2021, which were laid before this House on 3 March, be approved.

The House may be aware that in October 2020 the Government consulted on the proposed one-year extension of the warm home discount scheme. The changes proposed were broadly welcomed, and these regulations will implement them.

The Government are committed to alleviating fuel poverty. In the sustainable warmth strategy, published in February, the Government restated our commitment to our statutory target to upgrade as many fuel-poor homes as is reasonably practical to at least an energy efficiency rating of band C by the end of 2030. The best long-term solution is to improve the energy efficiency of a home, thereby bringing down the cost of heating it, but that takes time and some homes, especially those that are harder to treat, may be left behind.

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

I thank the Minister for giving way so early. Are there any interim targets for upgrading homes to energy performance certificate band C? What is meant by practical, cost-effective and reasonable costs? Can those terms be defined, or are they left for others to judge?

[Anne-Marie Trevelyan]

If the hon. Gentlemen waits, we may be able to provide him with some more information.

As well as reaching millions of people each year, energy bill rebates are simple to deliver and consumer friendly. The warm home discount is therefore a key policy in our policy mix to help alleviate fuel poverty. Since 2011, the warm home discount has helped more than 2 million low-income and vulnerable households each year by reducing their energy bills at the time of year when that is most needed. Under the current scheme, around 1 million low-income pensioners in receipt of pension credit guarantee credit receive the £140 warm home discount as an automatic rebate on their energy bills, and more than 1.2 million low-income and vulnerable households receive the rebate following an application to their participating energy supplier.

Building on the success of the scheme, the energy White Paper committed to extending the scheme to at least 2025-26, expanding the overall spending envelope to £475 million a year from 2022 and consulting on reforms to improve the fuel poverty targeting weight. We intend to consult on the future scheme later this year.

Reforming the scheme has long lead times, however, and this winter I want to prioritise the safe and timely delivery of rebates to ensure that those in need continue to receive this vital support, particularly given the continuing impacts of covid-19. It is therefore important that minimal changes are made to the scheme for next winter. This will mean that the scheme will be worth £354 million and that eligible pensioners on pension credit guarantee credit, as well as eligible vulnerable households supported through the broader group, can continue to receive £140 off their energy bills.

We will also not be amending the current energy supplier participation thresholds, as any change now, with such limited time for implementation, could cause significant and potentially damaging administrative and financial challenges for smaller energy suppliers. We intend to review that for the future reform.

We are, however, making some improvements to the industry initiatives part of the scheme. That includes lifting the restriction on providing financial assistance under industry initiatives to those eligible for a rebate, which will create greater flexibility and help more people during the covid-19 pandemic. We will keep the current overall cap of £6 million for the energy debt write-off mechanism, but we will also introduce a new individual cap of £2,000, enabling support to reach a greater number of households in need.

We will additionally be making changes so that proposed industry initiatives and specified activities will ensure, so far as reasonably practicable, that advice on the benefits of smart meters is provided to households benefiting from the industry initiative or specified activity. During the covid-19 pandemic, smart meters have been invaluable for energy consumers, allowing prepayment customers to top up remotely from home, while also enabling suppliers to offer timely support to vulnerable customers. We are also introducing greater consumer protections for boiler and central heating system installations and repairs carried out under the scheme.

Finally, we are proposing to make some further operational changes this year. That includes introducing a requirement for the Gas and Electricity Markets Authority to inform the Secretary of State if an electricity supplier that becomes a supplier of last resort notifies the authority of its intention to meet all or part of a failed supplier’s non-core spending obligation. This additionally includes making changes to clarify the full extent of the small suppliers scheme obligations when it passes the relevant threshold and becomes newly subject to the non-core spending obligation.

To conclude, the regulations extend the warm home discount until March 2022, which will help more than 2.2 million households this coming winter. The regulations will provide vital support for low-income and vulnerable customers to keep warm this winter in advance of consulting on wider scheme reform from 2022. I commend the regulations to the House.

--- Later in debate ---

[Rob Roberts (Delyn) (Con)]

Thank you, Mr Deputy Speaker, for calling me to speak on this important motion today. I do so not only as the Member for Delyn but as the chair of the all-party group on fuel poverty and energy efficiency. The motion that we are debating is one of the biggest steps that we can take towards tackling fuel poverty in our country and, as seems to be the case throughout the House, I wholeheartedly support it.

Fuel poverty is one of the most pressing issues of the 21st century, so I am proud to see that this Government are committed to doing all they can to make sure that every household is able to afford to properly heat their home. While it is positive that fuel poverty rates have fallen in recent years—around 12% of households in Wales are now classed as fuel-poor—there is still much more to be done. But with definitions and methodologies being different in all four constituent parts of the UK, it is impossible to compare which measures have been most successful in driving down those rates. One of the things that my APPG will look into is whether we can get a UK-wide agreement on a single definition of fuel poverty, so that we can get a real understanding of the depth of the issue and the disparities between different parts of the country.

Although I am pleased to see the UK Government’s ambitious plans to tackle fuel poverty, whether that is through financial support or improving the energy efficiency of homes, as a Welsh MP, I find myself once again a little disappointed by the lack of action from the Labour Government in Wales. The Welsh Government have proved once again to be all talk and no action, with Welsh Labour setting targets to eradicate fuel poverty in Wales by 2010, then again by 2012, and then again by 2018. Sadly, they have failed to meet this target time and again, not even coming close. It is the most vulnerable households in Delyn and across Wales who will ultimately pay the price for those failings. However, with covid causing further strain on household finances, I am glad to see the UK Government go beyond setting arbitrary targets and look instead to provide real support and solutions for those who need them most. Schemes such as the warm home discount, which are available to households in Wales and throughout Britain, are more important than ever and are a lifeline for many over the winter months.

[Alan Brown]

I am sure the hon. Gentleman will accept that, if someone is fuel-poor, the reality is that they probably live in a household where they are poor anyway. They are living in poverty and one of the causes of poverty is the reduction in welfare and benefits, which is clearly reserved to Westminster. Does he acknowledge that that is a problem? Also, has his APPG looked at investment in energy efficiency in Scotland, where it is four times per capita that of Westminster?

[Rob Roberts]

I thank the hon. Gentleman for his intervention, which kind of highlights one of the issues that I mentioned, which is the disparity in the definitions of what fuel poverty actually means in each of the four constituent parts. I mentioned that 12% of households in Wales are classed as fuel-poor. Although I did not note it down, I believe that the percentage in Scotland was 24%, so I am not entirely sure that trumpeting the successes of the Scottish Government would be a good thing in that case.

Quite simply, with over 2.2 million low-income and vulnerable households in Britain benefiting from the scheme each year, it is the correct and best decision to extend it for a further 12 months, but increasing the overall spending target of the scheme to £354 million will see even more households able to access the support that they need. Following proper consultation, I also welcome the changes that the Government are bringing in, which will broaden the reach of the scheme and give energy companies more flexibility, making it easier for households to participate in the scheme.

From increasing consumer protection during boiler and central heating installation and repairs to removing the restriction on energy suppliers that prevents them from providing emergency support on top of the scheme, all these small changes will make a huge difference to those who benefit from it. Although there is room to improve the scheme, I am enthused to hear that the Government have considered the importance of the industry initiatives element when looking at the future of the scheme. But it is vital that we pass these regulations now; otherwise, millions of households who are struggling due to the pandemic would be put in an even more challenging situation. I agree with the hon. Member for Southampton, Test (Dr Whitehead), the Opposition Front Bencher, on seeking more long-term clarity, rather than continued short-term measures.

I thank everyone who has put in to speak today on this important matter and welcome them all to attend our next APPG meeting towards the end of May. We will continue to work with the Government and discuss ways to improve domestic energy efficiency, to achieve affordable warmth for all homes and to eventually and finally eradicate fuel poverty. Heating a home should never be a luxury; it is always a necessity. Today’s motion and ones like it recognise the need among the most vulnerable households in our communities and ensure that they can live comfortably, secure in the knowledge that they are able to get assistance in properly heating their homes. I hope that the measures are supported on both sides of the House.

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

Obviously, I welcome any moves to alleviate fuel poverty. The Scottish Government have provided a legislative consent motion for the draft regulations, so clearly I will not vote against them. However, the reality is that, although we welcome the measures and, as the shadow Minister said, the warm homes discount scheme has been a success, in many ways, it is a typical Tory trick, because it uses energy companies themselves and other bill payers to provide assistance to the most vulnerable. The reality is that we need much more direct UK Government investment, particularly in energy efficiency.

Recent schemes that were supposed to help with energy efficiency include the failed green deal scheme. The UK Government still have not provided compensation for those who were mis-sold green deal installations. We have just seen the failure of the green homes grant scheme. It is ridiculous that the UK Government pulled the money because the scheme was deemed to be too slow at helping people. Long-term funding is required to allow businesses to invest and to prepare for a pipeline of work, rather than the boom-and-bust cycles that we have at the moment.

Fuel poverty is a scourge of society, with something like 3.5 million homes considered to be in fuel poverty in 2018. It is known that the problem has increased in the past year due to the pandemic and people losing employment; yet the figures in paragraph 7.5 of the explanatory memorandum show only an inflationary increase to the funding available through the scheme. I therefore ask the Minister how many additional households she thinks require further support to alleviate fuel poverty, and how many will miss out because of that standing-still approach to the funding pot.

The Minister touched on the fact that imposing a cap of £2,000 for debt assistance will allow more people to be helped, so how many more people will be helped and how many people were previously helped at debt levels over £2,000 who will still have debt, even if they get assistance through the scheme? What is her response to the Committee on Fuel Poverty, which says that only 15% of the UK Government spend on fuel poverty actually reaches the fuel-poor? Will she listen to recommendations from industry, the third sector and the Business, Energy and Industrial Strategy Committee about investing directly in energy-efficiency measures and following the lead of the Scottish Government in terms of per capita investment, which, as I have said, is four times that of Westminster.

Will the Government consider that the Scottish Government are treating energy efficiency as a national infrastructure project, and when will we see proper joined-up policies looking at the long term? Will the Minister consider the call from the Environmental Audit Committee to reduce VAT on the refurbishment of energy efficiency installations in existing homes?

Paragraph 7.2 of the explanatory memorandum states that the Energy White Paper commits

“to all homes to reach EPC C standard by 2035”,

so as per my earlier intervention I am hoping that the Minister can clarify what “practical, cost-effective and affordable” means, and whether the Government will set that out. Paragraph 7.7 details that the funding envelope will rise to £475 million in 2022, from £354 million this year. Obviously, additional support for the fuel-poor is welcome, but on what basis has the additional £121 million been identified? How can a figure be derived when the same paragraph—7.7—states that there needs to be a consultation on scheme reform to better target fuel poverty? Surely good governance is about identifying a need and then identifying strategies and solutions to meet that need, rather than coming up with a figure and trying to work backwards to find a solution that meets the figure.

What will that £475 million look like for the average bill payer? Between the warm homes discount, contracts for difference, smart meters and other initiatives, what does it all mean for bill payers such as the previously fabled “just about managing”? Many people are struggling and the reality is that the more that gets lumped on energy bills, the more difficult it becomes for them to afford their heating.

Is the increased funding and consultation an admission that the current scheme is not hitting the right number of people, or the correct fuel-poor households? Paragraph 7.6 outlines that

“installations or repairs of boilers and central heating systems”

are required to be done through companies under the TrustMark scheme. I give a cautious welcome to that as well, but I would like to double check how reliable the scheme is, and what BEIS’s governance protocols are on it. I have already highlighted the green deal fiasco, where accreditation was far too easy for unscrupulous companies. I also have constituents who have been ripped off by installers of biomass boilers. Again, those installers were Government-approved contractors. I would just like to double check that the TrustMark scheme is fit for purpose and that the Minister makes sure that it has suitable overarching governance.

To return to fuel poverty and its effects, which is a reminder of why we need more action, roughly 3.5 million homes are fuel-poor. National Energy Action estimates that cold homes contribute to more than 30,000 winter deaths. Fuel poverty has been estimated to cost the NHS across the UK £2.5 billion, with ailments and conditions worsened by cold or damp houses. This is against the backdrop of the need to move away from fossil fuel heating.

I am on the BEIS Committee and we are undertaking a heat decarbonisation inquiry at the moment. We have heard that the overall install cost of a heat pump system is roughly £15,000. What are the Government’s plans to go from 20,000 installs per year to 600,000 per annum in 2028? How will that be paid for? It cannot just be put on the bills of the average bill payer yet again. Some direct Government investment is going to be required.

I implore the Minister to again look at some examples in Scotland. The provision of an independent advice body, Home Energy Scotland, has been welcomed by third sector organisations across the UK. They would like to see Westminster replicate such an independent body to provide free and impartial advice on modifications to the property, how to switch and to help people to make the correct decisions on how to manage their heating systems.

The Scottish Government also run an award-winning national fuel poverty scheme, Warmer Homes Scotland. Households assisted through that are expected to save an average of £325 in their bills. That is quite significant compared with the £140 warm homes discount rebate that the SI provides.

The SNP has pledged to replace the unreliable £25 cold winter payment with an annual £50 winter heating payment, which will cover 400,000 low-income households. Will the Minister look at that in the round, from a Westminster perspective? The SNP has also pledged that, if re-elected, it will introduce a £20 per week child payment, which is clearly going to help families, which then helps to alleviate fuel poverty.

I conclude with a cautious welcome, but really, more direct Government intervention is required if we are going to eliminate fuel poverty.

--- Later in debate ---

[Anne-Marie Trevelyan]

I thank hon. Members for their valuable and insightful contributions to this debate. I will do my best to answer their questions but, as ever, if I fail to do so, my team will make sure that we get back to everyone in due course.

The hon. Member for Southampton, Test (Dr Whitehead) highlighted some of the issues. To reassure him, the reforms will indeed target those most likely to be in fuel poverty as well as protecting the most vulnerable current recipients. He is right that consultation is required, but we felt that the pandemic pressures last year made that inappropriate and incredibly difficult, which is why we are rolling it forward for this year and will bring these consultations into action as quickly as possible. We absolutely recognise the value of industry initiatives, which is why we have expanded their potential use. The reform consultations later this year will include industry initiatives. I hope that reassures him on that front.

My hon. Friend the Member for Delyn (Rob Roberts) raised the really important and genuine challenge that we should try to find a UK-wide definition of fuel poverty. I take on board those things. I have regular meetings with the devolved Administrations on a number of issues, and I will put that on the agenda, because—he is not wrong—trying to think holistically is a really important challenge for this Government. I do not guarantee that I will find an answer immediately, but I absolutely take up the challenge of extending those discussions.

In response to the hon. Member for Kilmarnock and Loudoun (Alan Brown), we do have, as he asked, interim milestones in the fuel poverty strategy of fuel-poor households reaching an energy efficiency rating of band E by 2020 and band D by 2025. Achieving that is indeed a great challenge. However, investment in the local authority schemes element of the green homes grant scheme has increased by £300 million. We have already allocated £500 million across English regions, reaching 50,000 homes, and that will continue to roll out. This is absolutely targeted at reaching the most vulnerable households. Local authorities are making really good use of the fund and getting on with making these really important efficiency adaptations for those of our constituents who are most in need of it.

Turning to the contribution by my hon. Friend the Member for Southend West (Sir David Amess)—his early leadership on this should absolutely be celebrated. I have learned in my short time in this place that if you do not celebrate your achievements, no one else might do it, so I absolutely support his willingness to share. I did not know about that, so it is lovely to discover it. I very much hope that we will continue to reassure his constituents of our commitment, through both this SI and the forthcoming reforms, to really hone this and try to improve its reach even further. He will no doubt be waiting with bated breath for the heat and buildings strategy, which we will be publishing very soon—I would like to say imminently, but it is always hard to know just how clear one can be. Let us go with that. I hope that that will give him a clearer picture of the work we want to do to make sure we crack the efficiency challenge, which accounts for nearly 20% of our carbon emissions, so we have to find ways. It is complicated, with 50 million homes that are built in different ways. It is a huge challenge that we all have to undertake.

In the short term, we have heard from colleagues across the House about the importance of extending the warm home discount scheme that we are here to put through today for a further year. The financial situation that covid-19 has posed for households across the country in the past year has been challenging to say the least, but particularly so for low-income and vulnerable households.

[Alan Brown]

Will the Minister be able to clarify how the £475 million figure was derived? That is an increase of £121 million, which is an increase of almost a third. I am just curious about the workings that said £354 million this year is okay, but we need a massive increase the year after.

[Anne-Marie Trevelyan]

I thank the hon. Gentleman for that intervention, and I will make sure we give him the detail of the figures in due course.

I am really pleased that there is agreement across the House that low-income and vulnerable households should continue to receive the valuable support provided by the warm home discount at a time when they most need it. Over the 10 years of the discount scheme so far, more than £3 billion in direct assistance has been provided to low-income and vulnerable households.

Oral Answers to Questions

Alan Brown Excerpts

Tuesday 23rd March 2021 Commons Chamber

[Amanda Solloway]

BEIS regularly has talks with Her Majesty’s Treasury on these issues. Let me reiterate that we plan to be a science superpower by 2024-25, with a £22 billion investment. We also have a Second Reading debate today on a high-risk, high-reward agency. Furthermore, in terms of the spending review, more than £40 billion across Government was spent on science.

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

What new support he plans to provide to energy transition projects in Scotland.

[The Minister for Business, Energy and Clean Growth (Anne-Marie Trevelyan)]

The Chancellor’s Budget recently announced significant investment for energy transition projects in Scotland. We hope to shortly announce the North sea transition deal, which will play a vital role in transitioning the oil and gas industry to low carbon alternatives.

[Alan Brown [V]]

COP26 will allow Scotland to showcase existing and emerging net-zero technologies, but, policy-wise, we need to see a minimum floor mechanism for pumped storage hydro. We need innovation power purchase agreements available for wave and tidal, a contract for difference for hydrogen and the go-ahead for the Acorn carbon capture and storage project. Will the Minister meet me to discuss these matters and take the necessary actions ahead of COP26?

[Anne-Marie Trevelyan]

It is always a pleasure to meet the hon. Member for Kilmarnock and Loudoun (Alan Brown) to discuss these matters. COP26 is such an important moment, not only with our carrying the responsibility of the presidency to help encourage other countries to do more to reach their net-zero targets, but in order to showcase the genuinely world-leading decisions that we have taken to drive our own net zero.

Budget Resolutions and Economic Situation

Alan Brown Excerpts

Tuesday 9th March 2021 Commons Chamber

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

The idea that the Tories can level up broken Britain just defies logic. They have been the party of government for two thirds of the past century, they have been in power since 2010, and it was them who brought in austerity aligned with tax cuts for the richest. The PPE contracts awarded to friends and cronies say it all: the Tories create inequality.

The Tories’ concept of levelling up is that Westminster knows best, as demonstrated by the UK shared prosperity fund, which bypasses Scottish devolution. We know that the stronger towns fund was manipulated for political gain, so why will this agenda be any different? Even the handling of the furlough scheme and support measures showed the opposite of levelling up, with the refusal to listen to the devolved Administrations and regional Mayors about the need to extend the furlough and business support schemes; they were roundly ignored until London had covid spikes again. The Budget measures demonstrate the Tories’ view of levelling up too— £1.6 billion allocated for maintaining the stamp duty freeze, and the introduction of a mortgage guarantee scheme to the value of £600,000. That shows they are out of touch with reality.

When we have 3,000 people per year dying from fuel poverty, levelling up should involve cutting VAT on energy- efficiency measures and direct Government investment in them. As we transition to net zero, we must not create further fuel poverty. The contracts for difference process has been successful in bringing down the cost of renewables, but the overall project costs go on our electricity bills. It is unsustainable for the costs of decarbonising our heating systems to go directly on to energy bills. When will the Government address that?

The 10-point plan itself is useless without policies to back it up. For example, a target of 600,000 heat pump installations per year is useless without a credible, funded programme. That needs to go hand in hand with energy installation measures, starting with off-grid homes—a proper levelling-up opportunity that has been missed.

We need a pricing mechanism to be put in place to allow pumped-storage hydro in Scotland, in order to progress in rural areas that need economic stimulus. We must move quickly on carbon capture and storage schemes or we can forget the 2025 target. We need real investment in marine and tidal, reform of the CfD process to create further green jobs and a hydrogen strategy that matches the lead of the Scottish Government—and we really need to repurpose investment from the nuclear folly.

I welcome the Government’s plans to raise corporation tax, but they show that we have been fed lies that previous cuts in corporation tax increased revenue. About £50 billion has been lost in recent years that the Government could now be using for reinvestment. We needed additional investment, but worse, the Scottish Government’s capital budget was cut. That shows more than ever that Scotland needs the full powers of independence to implement its own green recovery and level up.

Electricity

Alan Brown Excerpts

Monday 1st March 2021 Commons Chamber

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

I agree with the Labour shadow Minister that the regulations are relatively straightforward, so we will not oppose them either. There are, however, a number of questions that still need to be answered.

First, paragraph 14.3 of the explanatory memorandum slips in the fact that a review of the operation of the electricity market reform programme was supposed to have been undertaken by December 2018. It is completely unacceptable that that report is now effectively more than two years out of date, and blaming Brexit and covid does not really stack up. What is the timeframe for that report’s coming before Parliament? What is the mechanism for presenting the findings of the review, and what will the scrutiny arrangements be, so that the Opposition parties can challenge it?

Paragraph 7.7 of the explanatory memorandum states that the cost of new premises is outwith the control of the CfD counterparty. Why are those costs outwith its control? Why are new premises needed? Does the need for new premises take into account the fact that it looks like many companies will be doing much more homeworking and hybrid working?

Paragraph 10.8 of the explanatory notes explains that the CfD counterparty budget has been cut to reflect the Chancellor’s squeeze on public sector pay. The Minister touched on that, but the cuts are £111,000. How many employees had their pay frozen to generate a saving of £111,000?

On the capacity market, what steps have been taken to reduce the reliance on diesel generators? How much of the capacity market is based on fossil fuel generation? There is no point in continuing to move towards net zero when the capacity market relies on fossil fuel generation, so the Government need to address that.

Paragraph 7.7 of the explanatory notes also confirms the much-increased capacity in the auction. I certainly welcome the increased capacity in the forthcoming auction, but can the Minister advise us on whether the procurement process will be amended to incentivise the use of local content in the UK supply chain to ensure a proper green recovery? Does she understand that if procurement continues to be based on price only, then the likes of CS Wind in Cambeltown and BiFab yards across Scotland will never win enough work to compete on price regularly? They can do the quality, but they need sustained work to get to a place where they can compete on price.

What steps will be taken in this auction to ensure that offshore wind projects in Scotland are not prejudiced due to the grid charges? It is outrageous that generators connecting in the north of Scotland still have to pay to connect to the grid, but generators connecting in the south of Great Britain are paid to connect to the grid. It is completely unfair and needs to be revised. I would like to know when the Government will do that, and what they will do to ensure that generators in Scotland are not prejudiced in the forthcoming auction.

Now that we have an increased target for offshore wind generation of 40 GW by 2030, what steps is the Minister taking to speed up the development of an offshore grid to help to facilitate this transformation? Will there be ring-fenced pots for wave and tidal in the forthcoming auction? What consideration has she given to power purchasing agreements to free up investment in the development of these emerging technologies? Also, what is she doing to ensure a route to market for pumped hydro? One of our colleagues has suggested a CfD for hydrogen. Would she agree to that? We also need a CfD mechanism for pumped hydro storage; that could double storage capacity. SSE is ready to go with a new pumped hydro scheme at Coire Glas, and Drax has developed proposals for an additional pumped hydro scheme at the Cruachan dam, but a route to market is critical to free up private investment.

Paragraph 12.4 of the explanatory notes states that these proposals will account for only 0.1% of a typical consumer’s bill, but as the hon. Member for Southampton, Test (Dr Whitehead) asked, what will be the cumulative effect of the CfD process on bills? If a user is struggling to pay for their electricity, they use less electricity, so the impact on their bills will be much higher, because they use less electricity than a typical consumer. We need to remember that the bills of the people who are really struggling—the fuel poor—will be more adversely affected in real terms. What will the Government do to take account of that, and what assessment has been made of the cumulative impact? As we move towards net zero and the ever-increasing CfD rounds, what measures will be put in place to protect the fuel poor? This will be particularly relevant when it comes to funding heat decarbonisation. The Committee on Climate Change has estimated that something like £250 billion-worth of expenditure will be needed to decarbonise our heating systems. It is impossible to imagine that that can just be put on users’ bills, so other mechanisms will be required.

While I am mentioning costs, I cannot help but mention the Government’s obsession with nuclear power. The £92.50 strike rate for Hinkley will look even more ridiculous once the next option round is completed. The fact is that both units at Hinkley will probably not be operational until 2028, while the existing nuclear power plants will go offline in 2022 and 2024. If the UK manages to keep the lights on for a few years without that nuclear power, that alone will put the baseload argument to bed. It is complete bunkum, and the Government need to move away from their obsession with nuclear and their determination to get Sizewell C signed. As the hon. Member for Southampton, Test, says, that would place an unacceptable burden on the bill payers of the UK, and it would be helpful if the Government woke up and realised that.

Will the Government finally update their estimate and appraisal system, which makes the bizarre assumption that nuclear costs will fall in the future? The Department for Business, Energy and Industrial Strategy’s system favours nuclear and is prejudiced against onshore wind, so it needs to update its processes.

I look forward to hearing from the Minister. As I say, I will not oppose the regulations, but there are a lot of questions still to be answered. The Government’s overall energy policy needs to be updated, and they need a clear near zero strategy. I am more than happy to meet the Minister to discuss this at any time.

UK Hydrogen Economy

Alan Brown Excerpts

Thursday 17th December 2020 Westminster Hall

[John Spellar (Warley) (Lab)]

It is a pleasure to serve under your chairmanship, Ms McDonagh. I congratulate the hon. Member for Rother Valley (Alexander Stafford) on securing the debate and on his considerable enthusiasm and the detail with which he presented it. I think we all agree that hydrogen has considerable potential, but at present that is exactly what it is. I do not mean that in the way that the electricity industry talks about nuclear fusion—nuclear fusion is the future and always will be. I mean it as a call to action, so that we explore the production and utilisation of hydrogen at pace. One benefit of covid has been to demonstrate how, without cutting corners, we can evaluate systems and roll them out. We, particularly Whitehall, need to learn from that.

My hon. Friend the Member for City of Chester (Christian Matheson) slightly chided me to say that we were going off topic, but given the way that the Government work, it is absolutely crucial that we get to the heart of this and change the processes within government, otherwise we will find it very difficult to survive in this future world. Key to this is the civil service’s addiction to process, with extended timescales and time not being a factor. That is true under Governments of all parties. It is enormously important that Parliament relentlessly holds it to account to get things moving.

It could be argued that both Brexit and covid enable and also force the Government to change. That means that we are compressing processes but also, and equally importantly, paralleling them: trying different approaches, seeing what works, and seeing what does not work and shutting that down.

To start with transport, buses and trains are a considerable component of the hydrogen economy and contribute to clean air, particularly in urban areas—by definition—but an important issue is where they are made. Up until now, the Government have been indifferent to where they are manufactured. We have the capacity in Ballymena, Falkirk and Leeds to produce the buses, but what those facilities need, of course, is a market. They need to get on the manufacturing learning curve. The operators need to get the operational experience and find out what the issues and problems are. There needs to be continuing feedback between operators and manufacturers, and that will of course enable us to secure the export markets that have been mentioned.

It might be that, in some conditions, batteries will prove to be better. We need to test that out and assess what will work. We need to learn the lessons that have been mentioned before about where we missed out on batteries and allowed that work to go abroad. We have the largest installation of wind farms in Europe, yet so much is manufactured abroad. Governments, including devolved Administrations, have not focused on that enough.

On domestic heating, nobody mentioned that town gas is composed of a substantial percentage of hydrogen. It might be a much better answer, as was mentioned, than heat pumps for flats and terraced properties, which is a big issue in moving to alternative form of heating.

Also, we need to look at how the production of hydrogen will take place. Let us be realistic. If we are going to roll out the utilisation of hydrogen, some of that initially, but hopefully very shortly, will need to come from hydrocarbon sources. That might be dealt with by carbon capture, but I sometimes think that that is the easy answer that people trot out to deal with that. We need to move much more towards green sources of hydrogen, and we therefore need to look at the institutional barriers. It is truly extraordinary that in the first two months of this year, National Grid paid wind farm operators £72 million to not run their wind farms. That is absurd, and it has been going on for a decade.

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

Is the right hon. Gentleman aware that £50 million was also paid out to turn off the nuclear plant? It is not just wind farms.

[John Spellar]

Indeed. I was not being dismissive of wind farms; I was talking about the institutional barriers. That is not a technical barrier; it is an institutional barrier. It is the same with nuclear. The problem is that in order to qualify for the renewable transport fuel obligation that was mentioned by the hon. Member for Rother Valley, new capacity has to be utilised. We have existing capacity, even though it is not needed. At the same time, we are paying the wind farm or nuclear operators, and that is acting as a barrier to producing cheaper hydrogen. These are the sorts of areas where Ministers, with the support of Parliament, need to be cutting through. We obviously also need to look at the question of energy storage—hydrogen is an effective form of energy storage—but we need to do a proper evaluation.

I am mindful of the constraints on time. I am slightly concerned about the Government’s announcements, because I would like to see a bit more cost accounting. I would like to see a proper analysis of how much each different system is costing. I am not saying that we should not have a subsidy at a certain stage. I would like to see it being a diminishing subsidy, because we have to exercise that rather than all having our pet theories and ideas, important as they are for driving the process. We need to make sure that this is affordable going forward. If we are to compete in an international market, that is where it will really be tested—whether something is affordable or not. I shall yield to the Chair and conclude my remarks.

--- Later in debate ---

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

It is a pleasure to serve under your chairmanship, Ms McDonagh. Like everybody else, I congratulate the hon. Member for Rother Valley (Alexander Stafford) on bringing forward this important debate—his second debate. He has a huge interest in the subject and spoke very well on it. Believe it or not, I agree with pretty much everything he said.

Because of time constraints, I will not pay tribute to everybody who has spoken, except to say that it has been a very good debate. I agree with pretty much all the contributions. The hon. Member for Waveney (Peter Aldous) said it is not a competition, but then made a very valiant plug for East Anglia. Everybody else said that it is not really a competition, but we have to be careful. The way some of the system is set up by the Government at the moment, with picking clusters ahead of others, makes it very much a competition. I would like to see a greater commitment from the Government on taking out carbon emissions, particularly through CCS, and on giving the go-ahead for five or more clusters rather than a couple at a time.

For the most part, when it comes to hydrogen, the UK Government say the right things and have set out some very welcome measures in the White Paper. If the UK and Scotland really are to be world leaders in this technology, it needs more work and greater financial commitment. The reality is that the White Paper was a year and a half late, which has had knock-on consequences for the rest of the policies that follow. The planned production of a hydrogen strategy is obviously welcome but, as the hon. Member for Rother Valley said, we cannot wait any longer. We really need that strategy to come out as soon as possible in 2021.

Germany published its hydrogen strategy in June 2020, so if we do not watch, the UK is going to be a year behind Germany. As we know, it has committed €9 billion. The £240 million net zero hydrogen fund may be welcome, but over a 10-year period, it looks quite paltry compared with Germany’s €9 billion. The UK plan target of 5 GW of low-carbon hydrogen production by 2030 is welcome, but it is the same as Germany’s. Could greater ambition be shown, to get ahead of the game?

When it comes to hydrogen business models, the UK Government are again behind the curve. The proposal to finalise those models in 2022 should and could be speeded up. We know the contract for difference process has worked well in bringing down the costs for renewables, although there are issues about the supply chain, but CfD could still be looked at for hydrogen production. Meanwhile, the effort—I am repeating myself on this point—that has gone into plugging nuclear is beyond belief. Let us put that effort into hydrogen and CCS and other low-carbon technologies.

Again, although the UK has made good progress in decarbonisation, 27 million homes are still reliant on fossil fuels for heating, and transport is still a huge contributor. In both those sectors, hydrogen will be pivotal, as has been said. On heating, we still need to see the buildings and heating decarbonisation strategy, and a future homes strategy is required. As the hon. Member for Rother Valley said, we need to look at a whole mix of options for our decarbonisation. Heat pumps, for example, are welcome, but we need a clear strategy and technology selection framework for that to develop and go forward. The way in which those measures will be paid for also needs to be evaluated, because there is a limit to what can be passed on to consumer bills. We already have too much fuel poverty in the UK; we cannot risk any more.

When looking at the 27 million homes that are still reliant on fossil fuel heating systems, and others that are reliant on electrification, it is impossible not to see hydrogen as the only large-scale conversion approach. Even so, the full large-scale roll-out of hydrogen would be in 2030, which means that every week for some 20 years, 27,000 homes will need their heat sources decarbonised. That is a huge task that requires much planning, and perhaps even an independent body to oversee it—like the switch from town gas, it will require a massive effort. Manufacturers in the UK already make hydrogen-compliant boilers, so will the Government mandate the sale and installation of hydrogen-ready boilers by 2025? That is an industry ask.

I welcome the H100 trial in Levenmouth and Fife, where up to 300 homes will be powered by green hydrogen. Interestingly, that project is funded by the Scottish Government and Ofgem, but no money is forthcoming from BEIS as yet. I wish Scottish gas networks well with that trial, and I hope that it will lead to an unlocking of money from and trials by the UK Government.

As has been touched on, hydrogen blending has long been talked about and planned as a way of initially reducing carbon emissions from the domestic heating system. There has been a lack of joined-up thinking on that, however, because, as I hope the Minister knows, the Gas Safety (Management) Regulations 1996 need to be changed to allow that blending to take place. That is a must, but the Government keep holding off on it. The Health and Safety Executive is consulting on that, but the time that we need for the consultation process, and to decide what to do and whether to change the regulations, could be a barrier to what the industry wants to do.

As my hon. Friend the Member for East Kilbride, Strathaven and Lesmahagow (Dr Cameron) mentioned, another facilitating requirement is a robust measuring system to allow the trading of hydrogen. That is a simple but necessary step. Those ideas have been waiting in the National Engineering Laboratory’s funding proposals for too long. The proposals ask for £10.5 million for a clean-fuels metrology centre, which could be the world’s first, and I have written to the Secretary of State about it. If the Minister could meet or write to my hon. Friend about that, it would be much appreciated.

On transport, hydrogen needs to play a major role in the reduction of shipping and aviation emissions. Again, for joined-up thinking, I urge the UK Government to include those measures in the 2050 net zero target. Those international emissions must be included if we are really serious about net zero. The Scottish Government have included those emissions in their 2045 net zero plans to drive innovation and industry. Other welcome initiatives include the world’s first hydrogen-powered crane—I welcome the Department for Transport’s £400,000 grant for that—and the setting-up of the Jet Zero Council, as well as the Airbus plans for ZEROe.

Aberdeen has led the way on buses with the introduction of 15 of the world’s first hydrogen double-decker buses. The Scottish Government invested £3 million in that project, but another £8.3 million came from the EU. In future, that money must be replaced by the UK Government if we want to roll out more hydrogen buses across the UK. As has been touched on, that is a fantastic manufacturing opportunity for bus companies such as Alexander Dennis and Wrightbus.

Will the UK Government provide a capital subsidy for ultra low emissions vehicles, including hydrogen buses? Will they consider changes to the bus service operators grant to move away from diesel buses? As the hon Member for Rother Valley asked, will any consideration be given to subsidising hydrogen as a fuel to incentivise its use? That could be done through the renewable transport fuel obligation. Again, for a forward-thinking strategy, will the Government set targets for the roll-out of hydrogen HGVs and buses? Those are all sensible measures that would help to create that step-change process.

Finally on transport, it is clear that the maritime sector is also gearing up for change. I welcome the HyDIME project—that is hydrogen diesel injection in a marine environment—that has been supported by £400,000 from Innovate UK for the design, construction and integration of a hydrogen-diesel dual fuel conversion system to take place on a commercial ferry operated between Kirkwall and Shapinsay. The project will unlock the licensing system to allow further projects to follow. Ports across the UK are looking at developing hydrogen as a fuel and the design of hydrogen-fuelled ferries.

Away from transport, Scottish Power’s Whitelee wind farm project proposed in my constituency demonstrates that the co-location of renewables and hydrogen production is on the cusp of commercial profitability. The proposal is to develop and install a combined solar photovoltaics, green hydrogen production facility and battery energy storage system in the existing wind farm site. It is proposed that hydrogen production will commence by 2023, with that sold as transport fuel within the Greater Glasgow area. That is the joined-up thinking that we really want to see developed across UK.

I cannot mention hydrogen production without mentioning Peterhead and St Fergus. The UK Government need to make up for the betrayal on that project and include it within the first CCS cluster to be given the go-ahead. I hope the Minister can confirm that while the White Paper shows only Grangemouth on the map of the UK, it will look at the overall project that links with St Fergus in the north and the hydrogen production facility. We also need the oil and gas transition deal to be signed off.

I can see I am getting a look from the Chair, so I will wind up. There are fantastic opportunities at stake here and I really hope that the UK Government grasp that. We need to see policies put in place going forward.

Energy White Paper

Alan Brown Excerpts

Monday 14th December 2020 Commons Chamber

[Alok Sharma]

Of course, my right hon. Friend led on all this work when he was Secretary of State in the Department and I thank him for that. The White Paper is a product of some of the excellent reforms that he undertook in Government, including the energy price cap. I agree with him: of course we want to invest in energy research. He will have seen the settlement that we got at the spending review. We will power ahead in research and development and be a leading country when it comes to R&D.

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

I thank the Secretary of State for advance sight of his statement. Clearly, we welcome any sensible proposals for the transition to net zero and value for consumers, and we will support policies accordingly. The White Paper is a year and a half late. Much of it is wishlists and it still has the same outdated nuclear obsession. For existing nuclear waste, there is a £132 billion bill. For Hinkley Point, it is £20 billion. To add to that £150 billion, we have Sizewell C, which is £20 billion, and Bradwell to follow, which is £20 billion. Despite market failure, the Government have not given up on Wylfa, Oldbury and Moorside, so that is potentially another £50 billion. Small modular reactors, advanced reactors and nuclear fission mean further blank cheques. We cannot be serious about energy bills and value for money when it all comes to 35-year nuclear contracts. Compare that with the commitment in the White Paper of just £50 million to upgrade properties to EPC band C.

What cost-benefit analysis has been done on the cost of nuclear jobs versus renewables? What is the Secretary of State doing about a route to market for pumped hydro? In Scotland, the Cruachan extension and the proposed Coire Glas scheme could be undertaken if the Government showed the same commitment to pumped hydro as they have nuclear. Can he confirm the route to market for tidal and wave energies, which he touched on earlier, and a contract for difference for hydrogen production? These processes, along with carbon capture and storage, are the chance to be world-leading and create green jobs, if they get a move on.

How will the Secretary of State ensure transparency for CCS site selections? Surely Peterhead, with its hydrogen proposals and existing carbon dioxide storage licence, has to be first in the batch. Can he confirm that it is under consideration, because it is not showing in the map in the White Paper? Sadly today, BiFab went into administration, with its yard in Tayside closing, which is proof of the failure to date of the CfD procurement process. Will the Secretary of State apologise for that and make sure that, following the consultation on procurement, this is remedied for the next auction process and that we get these jobs delivered in the UK?

There is so much in the White Paper—the future homes standard, the hydrogen strategy, heating buildings, decarbonisation, heat pump delivery—that is going to be consulted on from next year onwards. How can the Secretary of State make sure that these all come together and are delivered in time for the interim target of 2030? Finally, I welcome confirmation of the emissions trading system agreed with the devolved nations, and will he confirm that the carbon emissions tax alternative is now dead in the water?

[Alok Sharma]

I am delighted that the hon. Gentleman welcomes the UK ETS scheme that is being launched, but I will take it from his comments that he is not a fan of nuclear power. Perhaps I could explain to him that, of course, renewables are playing an increasingly large part in our energy mix, but the wind does not always blow as hard as we would like and the sun does not always shine. We know that nuclear power is reliable, safe and not intermittent; that is why it needs to be a part of the energy mix. He will know that a significant number of power plants will be coming offline and that is why we are proceeding with our discussions on Sizewell C.

The hon. Gentleman talked about tidal wave and tidal power. As I said in my response to the right hon. Member for Doncaster North (Edward Miliband), there will be an opportunity, through the CFD 4 process, to come forward with projects on that.

Finally, the hon. Gentleman talked about CCUS. What I can tell him is that at this point we have not made any decisions about the sites of CCUS plants, but we will provide much more detail on this in early 2021. Those who are interested, including folks from his constituency, will then be able to take a look at what we set out.

Financial Assistance to Industry

Alan Brown Excerpts

Monday 7th December 2020 General Committees

[Matthew Pennycook (Greenwich and Woolwich) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Pritchard.

Let me say at the outset, for the purposes of clarity, that the Opposition support the objective that underpins this motion—namely, the need to minimise the risk of carbon leakage by taking steps to ensure that energy-intensive industries are not put at a competitive disadvantage as a consequence of the cumulative impact of carbon pricing on industrial electricity prices.  

It is obviously important that UK manufacturing should be able to remain competitive during the transition to a low-carbon economy, and we recognise that there is a need to continue to provide compensation for the indirect emissions cost of whatever carbon pricing policy replaces the EU emissions trading system.  For that reason, we will not be opposing the motion this afternoon.  

I would, however, like to take the opportunity to raise with the Minister two important questions that relate directly to the motion under consideration. The is about what carbon pricing policy will replace the EU emissions trading system. To put it another way: in respect of what arrangement do the energy-intensive industries that we are discussing require compensation during the next financial year? 

As I have said to the Minister on previous occasions, we cannot run the risk of a dysfunctional carbon pricing system in the year we host the critical COP26 UN climate summit.  As the Committee will know, only 24 days—eight sitting days—of this parliamentary term now remain until the transition period ends, and with it the UK’s participation in the EU ETS. Yet the Government have still not announced whether a stand-alone UK ETS or a carbon emissions tax will operate from 1 January should a linking agreement with the EU ETS not be negotiated and put in place by that date.  Surely, the Minister cannot believe it is fair that the emitters in question still have no idea what arrangements they will be operating under in just three and a half weeks’ time. My understanding is that a decision has been on the Prime Minister’s desk since late last month. If that is the case, what on earth is stopping the Government making clear to those affected what fall-back carbon pricing arrangement will operate in the UK from 1 January should the linked UK-EU scheme not materialise from the negotiations in the coming days and weeks?

In all candour, I have no expectation of getting an answer today from the Minister, but I would be grateful if she could at least acknowledge that the Government recognise that they owe those operators clarity on this issue as a matter of some urgency. I would also be grateful if she could clarify how her Department has been able to estimate that the compensation budget for the next financial year will stand at £140.6 million. Although we know that we have a carbon price floor in place from 1 January, we still have absolutely no confirmation of what will replace the EU ETS.

The second issue I want to raise concerns the long- term arrangements for addressing carbon leakage and ensuring that our energy-intensive industries remain competitive as we accelerate the pace of emissions reduction. We accept that compensation of the kind we are authorising today is necessary, but to avoid the cost of such compensation spiralling over the long term, as the price of carbon is increased, there must be sufficient long-term support to green the industries in question. After all, as the Minister will know, many if not all of the energy-intensive industries covered by the motion will not only benefit from compensation for the indirect emissions cost of carbon pricing, but will continue to benefit from reduced costs in respect of climate levies. They are, in short, in a relatively privileged position relative to other less energy-intensive industries. Therefore, as we accelerate efforts to achieve net zero, there will have to be greater use of conditionality to ensure that the financial support provided to compensate these industries is balanced by measures to ensure that their carbon intensity is steadily reduced.

I note that a review and a consultation in early 2021 in relation to the compensation scheme have been mentioned, and the Minister touched on that in her remarks, but I would be grateful if she could reassure the Committee that the Government recognise the limits of the compensation mechanism in question over the long term as the price of carbon rises, and that they accept that more will need to be done beyond the schemes she touched on to accelerate the pace of decarbonisation in these industries, not least to manage the costs of the current scheme going forward.

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

rose—

[The Chair]

The hon. Gentleman arrived literally 30 seconds ago—11 minutes into the discussion.

[Alan Brown]

I apologise, Chair; I was in the main Chamber.

[The Chair]

I understand that, but on this occasion I am going to call the Minister.

Climate Change Assembly UK: The Path to Net Zero

Alan Brown Excerpts

Thursday 26th November 2020 Commons Chamber

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

I, too, pay tribute to the members of the public who came forward, not only for giving up their time to participate but for the effort they put into listening, learning and debating—unlike many of us politicians. It is amazing to see how many recommendations they were able to make on a consensual basis, and they are to be commended for that, too. The recommendations are also reasonable and practical, and I wish to look at some of them and see how the UK Government and the Scottish Government measure up against them.

Perhaps the first UK Government fail is the publication of the 10-point plan for a green industrial revolution, which of course makes no reference to the Climate Assembly, nor does it really accord fully with its recommendations. I do welcome the fact that they have brought forward the date for phasing out internal combustion engines to 2030, which matches the recommendation of the assembly. The assembly also calls for grants for low-carbon cars and a car scrappage scheme, which I fully support, but the Government have not yet implemented that, and there need to be bigger grants for electric vehicles. The Scottish Government do interest-free loans for the purchase of ultra-low emission vehicles, and they have extended the interest-free loans to the purchase of second-hand cars to try to extend the market and open it out for a wider public. I think that is something the UK Government could look at as well.

The assembly calls for investment in low-carbon buses and trains. Thanks in part to funding from the EU as well as funding from the Scottish Government, in Aberdeen we have the world’s first double-decker buses that run fuelled by hydrogen. The Scottish Government have awarded £7.4 million to bus operators through the Scottish ultra-low emission bus scheme, and that is going to procure 35 electric buses manufactured in Falkirk by Alexander Dennis Ltd, protecting jobs in these tough times. So where are the UK Government’s proposed electric bus town and the associated orders, and what replacement funding is there—to replace EU funding—for hydrogen buses?

The assembly’s recommendations on air travel are also realistic and welcome, especially the effective points where the polluter pays. We do need to see more from the Government on sustainable aviation.

When it comes home heating, there was strong agreement on the need for hydrogen, heat pumps and heat networks, so again a hydrogen strategy is required. The initial steps outlined in the 10-point strategy are a start, but we need a proper heat decarbonisation strategy. We have 27 million homes currently reliant on fossil fuel heating, so even if we start in January 2021 and go all the way to 2050, that equates to 20,000 homes a week, roughly, that need to be decarbonised. That is the scale of problem we are dealing with, and it needs to be addressed quickly.

The Government are talking about a roll-out of heat pumps, and again that is welcome, but these need to be targeted, initially for homes off the gas grid. But the roll-out of these needs to be aligned with energy-efficient installations, because the heat pumps themselves do not work unless the homes are properly energy efficient. Again, the UK Government need to spend more. We need to see this £9 billion that has been pledged in the Conservative manifesto for energy efficiency.

When it comes to electricity generation, it was welcome to see the strong embracement of both onshore and offshore wind by the assembly. That shows that the decision to stop onshore wind bids in the last couple of CfD auctions was actually a major blunder, but it is good that onshore wind can now bid again. But we do need to see the contracts for difference procurement process improved to incentivise the use of local supply chains. It is a disgrace that a yard on Teesside is due to close, and there are the pressures in the BiFab yards in Scotland. I realise there is a consultation ongoing on the CfD procurement process, and hopefully the outcome of that will be that UK supply chains are incentivised.

The public in the assembly also recognised that nuclear is expensive and that waste storage is an issue, so when will both the UK Government and the Labour party wake up to this? It is insane to me that the 10-point plan is committing something like £40 billion to £50 billion to new nuclear. I would love to go back to the assembly, ask it to prioritise that £40 billion to £50 billion and ask where it would want to spend it—would it be nuclear energy, marine, tidal or more floating offshore? I think we know what the answer would be.

My one disappointment in the recommendations was the lack of support for carbon capture and storage, because to date that has been integral in the UK’s planning for net zero. We in the SNP want to see carbon capture and storage go ahead at Peterhead as part of the just transition away from oil and gas. This shows at least a rethink in policy, or much better re-engagement with the public, is needed if the public are to be taken with us on carbon capture and storage. The UK Government need to take account of this.

When it comes to the natural environment, I welcome the recommendations on and understanding of peatland restoration and reforestation. Again, the Scottish Government have led the way on this, because 85% of trees planted in the UK in the last few years have been in Scotland. Over 10 years, the UK Government have only planted 20,000 hectares of new forest, so how they are going to get to 30,000 hectares a year by 2025 is a mystery, and we need a long-term strategy for that.

There is so much more I could talk about in terms of land use, food production and all the rest of it. It is a great report. I really hope the Government take account of it and we see that in forthcoming policies.

Exiting the European Union

Alan Brown Excerpts

Tuesday 24th November 2020 Commons Chamber

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Amanda Solloway)]

I beg to move,

That the draft Prohibition on Quantitative Restrictions (EU Exit) Regulations 2020, which were laid before this House on 9 November, be approved.

As I am sure hon. Members recognise, it is important that we have full sovereignty over our regulatory regime for goods at the end of the transition period. The statutory instrument will help to ensure that we are not challenged if we choose to diverge from EU regulations. At the end of the transition period, EU treaty rights on the movement of goods stemming from articles 34 to 36 of the treaty on the functioning of the European Union will be retained in UK law unless they are removed by this SI.

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

I thank the Minister for giving way. Obviously, the statutory instrument is about divergence, and the UK Government talk about taking back control. What is the position on consent to the regulations from the devolved nations? More importantly, what discussions have the Government had with the devolved nations to make sure that their wishes are not overridden and that divergences are not forced on the devolved Administrations?

[Amanda Solloway]

I thank the hon. Gentleman for his question. I will come on to that later in my opening comments.

The EU treaty rights prohibit quantitative restrictions or equivalent measures on imports and exports, meaning that divergence from EU regulatory requirements could result in a challenge from a business or importer if they deem it a barrier to placing their goods on the market in Great Britain. To be clear, the SI is not a pre-condition for divergence: as of 1 January, Parliament will of course have the ability to introduce new regulations. Instead, it is about removing potential grounds for legal challenge based on retained treaty articles that have no place on our statute book once we have fully regained our independence.

The SI will remove the aforementioned EU treaty rights so they no longer apply in England, Scotland or Wales. It will not result in any immediate changes for goods in the UK but will protect our right to diverge from EU goods regulations in future, where we so choose.

The SI will protect our ability to regulate goods as we see fit and ensure that challenges do not require us to keep in line with the EU regulations. I commend it to the House.

[Alan Brown]

On a point of order, Madam Deputy Speaker. I asked the Minister a specific question about consent and the devolved Administration and the Minister said that she would come on to that in her speech. Can you advise me on how I can get that answer from the Minister?

[Madam Deputy Speaker (Dame Rosie Winterton)]

Thank you for that point of order. The Minister may respond at this point or she may wish to respond at the end of the debate. If she wants to do it now, that is—

--- Later in debate ---

[Alan Brown]

The hon. Lady and her colleagues are making important points. She mentioned the levelling-up agenda. Is it ironic that although the UK Government talk about levelling up across the regions and nations of the UK, the areas that will be hit hardest by no deal and by a lack of preparation are the very areas that the Government pretend they are trying to level up? They speak with a forked tongue every time. Should not the Minister be giving us more information from the Dispatch Box?

[Lucy Powell]

Absolutely. This agenda could not come at a more critical time, because these same sectors and industries have been left on their knees as a result of covid-19. They just cannot cope with all these things coming at once.

--- Later in debate ---

[Lucy Powell]

My right hon. Friend makes a good point. It is not only the business community, but the farming community—communities that have historically both been the base of the Conservative party. I am not sure whether that was the same interview in which the Environment Secretary also made false claims about Lurpak butter which had to be rectified by the company afterwards.

[Alan Brown]

The hon. Member is absolutely right. It is quite clear that the Tories are no longer the party of business. As she correctly says, they are alienating the farmers with their attitude. Laughably, they call themselves the party of workers. Is it not the case that it is the workers who are going to be shafted most by Brexit? Many workers in the UK, including the 3 million, are currently excluded from any support from the UK Government whatever, so the Government are actually doing a good job of alienating the entire population.

[Lucy Powell]

The hon. Member is absolutely right. Company directors who have not had any support during this crisis are particularly aggrieved, and they are part of the 3 million excluded, who he rightly mentions. I know that he has been making these points consistently, so maybe the Minister will respond to that point; you never know.

--- Later in debate ---

[John Redwood (Wokingham) (Con)]

I have declared my business interests in the Register of Members’ Financial Interests. May I reassure the Opposition that I wanted to make a few comments in this debate, and I submitted a request to participate on my own initiative? I have not received any message from the Whips, either before or during these debates, that I should not make a few remarks. With the permission of the House, I will exercise that democratic right.

I understand that there is a parliamentary game going on and that the Opposition want to extend this debate because there are some other things that they do not want to discuss, but that is a matter for them. Oppositions are quite entitled to use what time is available for their own purposes.

[Alan Brown]

May I ask the right hon. Gentleman whether the game is not on the Government’s side, given that they have withdrawn all their speakers, except for his good self?

[John Redwood]

On the contrary. As I have just explained, there has been no pressure to withdraw my application. Some of my right hon. and hon. Friends who thought that they were going to speak in the debate have reread the proposal and realised that, given the incisive eloquence we would hear from the Minister, there was absolutely no need for them to come to the Chamber and duplicate and triplicate that. I have been foolish enough to think that I can add something to the Government’s case, because I support the measure. The fact that my right hon. and hon. Friends seem to have better things to do shows that they are 100% behind the measure, and just want it to be passed as quickly as possible as they attend to their other duties as busy MPs.

So why do I support these regulations, and why are the Government doing this? The first reason is to take back control. That is what millions of people voted for, and many of us are very frustrated that it still has not happened. As the Minister stated clearly, this is about ensuring that, from 1 January, we in this House, on behalf of the British people, can decide for ourselves within international law what the rules shall be on tariffs, quantitative barriers, restrictions and inducements to trade—and how right that is.

I always find it so disappointing that the Opposition, who now say that they understand the spirit of Brexit and have embraced it, do not believe that they can come up with any single improvement on the great body of European law that has been forced on us over many years. I am more optimistic. Working with the talent on the Government Benches, I can see lots of ways of improving on European law. It can be better, not worse, and more rather than less in the right areas. Surely our trade policy should be geared to the interests and concerns of businesses that back this country by investing and creating jobs in it.

--- Later in debate ---

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

I do not often say this, but it is a pleasure to follow the right hon. Member for Wokingham (John Redwood). I am glad that he actually came and contributed here today. At the end of his rousing speech, I admired his optimism. He has retained that optimism all this life. He spoke about what could be done better. Perhaps he should have a word with his Minister about that, because she did not give us very much in the way of what could be better, or of what is happening as a result of this legislation. Perhaps his words will be heard by those on the Front Bench.

As everyone in this Chamber is aware, we on the SNP Benches are trying to work our way out of this place. We do not always hold this place in the utmost respect, and today is another day that illustrates that, to be perfectly honest. The Minister took an intervention from me, said that she would answer my point and then sat down. She did not answer the intervention, did not respond to the point of order and did not give us very much in her speech at all. Then we have seen the Government Whips—my goodness, they have been busy today. We had seven withdrawals in the previous debate and something like 15 withdrawals in this debate. Madam Deputy Speaker, I take it that there is nothing you need to tell the House about why so many Conservative Members have had to withdraw from this debate.

[Madam Deputy Speaker (Dame Eleanor Laing)]

The hon. Gentleman is asking me, but I have absolutely no idea. Unfortunately, I have no responsibility whatsoever.

[Alan Brown]

I thank you for that, Madam Deputy Speaker. The way things are just now, I worry about why so many people are withdrawing. Hopefully, everything is all in order. We know that the Whips usually try to force people to speak in debates, especially debates that might be short or dry, so it is certainly unusual that the Whips have been pressuring their colleagues to withdraw from today’s debate.

I hope that you can show some forbearance, Madam Deputy Speaker, because as I thought there were so many speakers in the previous debate, I did not expect to be called so early in this one, so my notes are a wee bit haphazard; hopefully, you can bear with me on that.

I must commend the shadow Minister for her speech and for the amount of information that she covered. She highlighted the deficiencies that the Minister did not cover. She said that, in actual fact, when we talk about the movement of goods, one of the key issues is what it means for businesses and whether they are ready for this. We can talk about divergence in standards of the EU, but are businesses ready for what will happen on 1 January 2021? Have the Government given enough support to businesses? When we turn on the radio just now, it tells us all, “Get ready for Brexit”. That is all very well, but it does not actually tell us what we need to do. What is the point telling us to get ready, when there is no information that is clearly accessible to businesses about what they need to do? Are IT systems up and running? The companies need to know what they have to do to be able to export, and that is before we even get to divergence.

Just today, ironically, my office got a letter from the Secretary of State for Business, Energy and Industrial Strategy, which is supposed to be aimed at all businesses, but I can assure the Minister that although that letter might be a bit of propaganda, it does not clear up what businesses need to do going forwards.

[Patrick Grady (Glasgow North) (SNP)]

I hear that from businesses across my constituency as well. A lot of them do not know exactly what they are supposed to do or how they are supposed to prepare. The simple solution to this surely is to extend the transition period, as we called for in our Opposition day debate before the summer. There would be no shame in the Government taking a little bit more time to get the negotiations right and to give people time. If they do not want to call it the transition period any more, they can come up with a different name for it—call it the implementation period or the adaptation period, or something like that. There would be no shame in it; we are in the middle of a global pandemic—no one foresaw this coming. It would do nobody any harm, and then one day they would get the glorious Brexit they are looking for, rather than the cliff edge that we seem to be barrelling towards.

[Alan Brown]

I thank my hon. Friend for that intervention. I am pretty sure that many businesses across the UK would agree with what he said. It would be a simple, common-sense approach. It could be called the emergency covid implementation period—something that would give businesses a bit more certainty in the short term, while the Government sort out the mess.

The key question I had for the Minister earlier is about where we are on the consent of the devolved nations. Importantly, what discussions have been had with the devolved nations about what will happen if the UK Government wants standards to diverge from those of the EU? What would that mean in terms of how the devolved nations operate? What will it mean going forward? Are they going to ride roughshod over the wishes of the devolved Administrations, as with the UK Internal Market Bill and the shared prosperity fund, which was a mechanism to bypass the wishes of the devolved Administrations? Is that what we are looking at? It is symptomatic of the entire Brexit process and debacle.

I looked at the explanatory memorandum at the weekend—unusually for me, on Saturday night I was sad enough to read an explanatory memorandum. It said that the Welsh Government had granted consent, but the Scottish Government had not. The explanatory memorandum has now been changed and does not reference either the Welsh Government or the Scottish Government. It would be great if the Minister would clear up where things are on that. I would be happy to take an intervention—I am still happy to take an intervention. I see there are none coming.

I refer to a letter from Ivan McKee to Michelle Ballantyne MSP, convenor of the Economy, Energy and Fair Work Committee. He said:

“The UK Government is seeking to lay the SI as soon as possible in order to secure a debate in the UK Parliament before the end of the year. This timeframe means that the SI would need to be laid before Scottish Parliament consent is confirmed, however Mr Zahawi’s letter states that they will not debate the SI until consent is received, therefore the Scottish Parliament should have the usual 28 day period in which to scrutinise the notification.”

In the preceding paragraph, he also says:

“Scottish Ministers therefore consider that consenting to the regulation remains appropriate.”

The Scottish Government have indicated that they are willing to consent to the SI and are willing to work with the UK Government on it. The UK Government committed not to debate the SI until consent was given. As we are now debating the SI, I ask the Minister again whether consent has been formally given. Perhaps we can assume it has not been; it would be great if the Minister could clear that up later on.

This is about divergence. I understand the UK wants to protect itself from challenges. We can understand that—there is a need to have some legal protections—but the Minister did say it is not a precedent to diverging. Could she confirm that? Why would we want to diverge from the EU, especially at the moment, when we are still negotiating this trade deal that really determines the future of the UK, particularly in the short term, on 1 January? What is the status of the trade deal discussions? Surely the UK thinking about diverging has a massive impact on the trade deal because the trade deal will confirm what divergences are possible or not. It seems to me that the cart is before the horse. We can talk about taking back control, but unless the UK Government are capable of joining up the dots in the big picture, this SI matters not a jot.

[Patrick Grady]

I suppose we should commend the right hon. Member for Wokingham (John Redwood) for turning up and contributing to this debate. Taking back control was supposed to be what it was all about, and where are they? Where are the Tories—the European Research Group, the Maastricht rebels and all the rest of them?

We had the same last night with the statutory instrument that directly amended primary legislation passed by the Scottish Parliament. Fair enough, it was relatively technical in nature, as is this measure, but it goes to the point of respect for the devolution settlement, and it goes to the point of democratic accountability that Brexit was supposed to bring forward.

Was the Labour Front-Bench spokesperson not right when she said that when the Government force through relatively technical stuff such as this statutory instrument what they are doing is driving a coach and horses through the devolution settlement, and they are doing our work for us, because they are undermining the case for the Union?

[Alan Brown]

I wholeheartedly agree. The shadow Minister used the phrase “rocket boosters” under the argument for independence, and I hope we do have these rocket boosters in place and getting fired up right now.

[Alex Cunningham]

Despite the fact that we share nationality, we do not share that particular ambition for separation. Some things about that worry me a lot if Scotland does eventually go independent. One is, do I get a passport? But more important than that, will I still get my supply? Will the divergences be in place for me to get my square sausage, my Scottish black pudding, my sliced sausage and, of course, my supply of Talisker?

[Alan Brown]

I will need to catch up with the hon. Gentleman in better surroundings, and we can share a sausage and Talisker, but of course he makes a serious point. In actual fact, the devolved nations want a common framework for agreeing how goods move about. To be honest, if we get our wish of independence, we are going to operate that way as well. We want to work with the other nations, and that is really important. But the way this UK Government are going about it, they want to impose their will on the different devolved nations, and it is like it or lump it. Hopefully, we can toast a wee dram to independence and we will discover we will still be friends after that as well, even though we do not share the same aims at the moment.

[Patrick Grady]

I am sure the hon. Member for Stockton North (Alex Cunningham) will be entitled to a passport as well, but is not the point that Lorne sausage and Scotch whisky—the indicators of these vitally important products—are at risk because of the lack of the UK Government’s ability to conclude a deal with the EU? That is the kind of thing that ought to be being addressed through statutory instruments like this, Madam Deputy Speaker, and that is why it is relevant to this debate.

[Madam Deputy Speaker (Dame Eleanor Laing)]

For clarification, I was not suggesting that the hon. Gentleman was in any way out of order in the points he made. I am just really concerned about the square sausage.

[Alan Brown]

Yes, so we all share the same good taste in food then.

I agree with the point my hon. Friend made. Following up his earlier point about the contribution from the other Benches, I actually thought, “Oh my goodness, I’m going to have to listen to another 15 Conservative MPs tell me how great Brexit is going to be, how they are taking back control, how this is just another step in the way of taking back control and there’ll be wonderful trade deals.” So in one way there is a blessing: I do not have to listen to 15 speeches the same. But in another way, it is disappointing that they have not turned up here to actually do their job and actually say what they wanted to say. That is disappointing.

[Alex Cunningham]

The right hon. Member for Wokingham (John Redwood) actually talked about taking back control, but he talked about Parliament taking back control, yet we are seeing statutory instrument after statutory instrument giving more power to the Executive. Is that really Parliament taking back control?

[Alan Brown]

I agree absolutely 100%. Again, if Parliament was taking back control, we would expect parliamentarians in here doing their job debating it. But not only have the Executive taken more power, but we know there is more power invested in unelected bureaucrats who were advising the Prime Minister. I am sure nobody is shedding a tear that Dominic Cummings has actually left, but there is too much power in unelected bureaucrats behind the scene. It is double ironic when Brexiteers come here and talk about taking back control, and the Government were in hock to unelected officials.

We do have to wonder what divergences are planned by the UK Government, but also how these divergences are going to be managed. What is the process going to be? Will there be proper impact assessments undertaken, and will there be complete transparency on divergences that are proposed and what that means for businesses? How will we ensure that there are no unintended consequences by diverging in one area, which might affect more businesses adversely by stopping the export of their goods or preventing vital imports coming in? Those vital imports might prop up the supply chain of the key industries mentioned earlier, such as aerospace and automotive, because we rely on an EU-wide supply chain, with goods in the supply chain going backwards and forwards two or three times sometimes to create a finished product.

[Mr Kevan Jones (North Durham) (Lab)]

Does the hon. Gentleman agree that it is about not only the import of goods, but exports? One of our key exports is shellfish, which is very important to the Scottish economy. Does he agree that any barriers or disruptions of that could have a huge impact on the fishing industry in the UK?

[Alan Brown]

I agree wholeheartedly. That is the problem with the silo approach that the UK Government have taken sometimes. They talk about the fishing industry and fishing quotas and, sure, the fishing quotas are important, but for the Government they have become the symbol of Brexit, so fishing quotas seem to be getting looked at at the expense of everything else and that includes shellfish. We also rely on the free movement of people at the moment coming from the EU to do the processing of the fish and different things, so we might end up with bigger fishing quotas without the ability to process the fish and then export them. It is hugely ironic, and that is why the Government need to always have their eye on the big picture and to join up the dots, rather than making headline announcements, looking for the headline in The Daily Telegraph. They need to understand what this means for ordinary people up and down the UK.

[David Linden (Glasgow East) (SNP)]

I am sure my hon. Friend is just clearing his throat to get started, but on the issue of the free movement of people, is the issue of immigration not a red herring—if Members will pardon the pun—in the context of fishing? The UK Government said that this was all about reducing migration, but in order to do most of these trade deals, they will probably have to do a lot of visa-free travel for countries such as India?

[Alan Brown]

Absolutely. It is about looking at the big picture but, instead, the Government make big headline announcements to get some plaudits. It might help them to win an election in the short term, but what does that mean in the long term for the UK? That is something that the Tory party needs to consider.

I was speaking about divergences. I hope that the Minister will clear up how the divergence process will work and how it will be transparent, because we need to ensure that no divergences are given to some cronies who shout the loudest, because that again might have a wider impact on other businesses. So far, there have been allegations of cronyism in how covid has been dealt with, in terms of supplies of personal protective equipment. I would never accuse the Government of cronyism in giving contracts to people they know and who might favour the Tory party, but other people have done that, so I hope that the Minister will give us assurances that, going forward, any divergences from the EU will be done with the best interests of UK businesses at heart and, again, done with the wishes and agreement of the devolved Administrations.

[David Linden]

I would be so bold as to put on the record that this Government have been guilty of cronyism. But that is not just in the context of Brexit or the pandemic. For example, there is also the cronyism in terms of Richard Desmond and the Westferry scandal. So I would caution my hon. Friend. It is not just in terms of the pandemic that the Government have been guilty of cronyism; it goes much wider than that.

[Madam Deputy Speaker (Dame Eleanor Laing)]

Order. As the hon. Gentleman said, the point he has just made goes very wide, and very much wider than the particular statutory instrument before us. So I am sure that the hon. Member for Kilmarnock and Loudoun will stick very strictly to the terms of the SI, which he has done very well so far in his long speech.

[Alan Brown]

Hopefully, I will not be too much longer—these notes might be deceiving.

A key point, as I said, is divergences and this is all about the movement of goods. Where are we with regards to the movement of goods in terms of a no deal? Are we still reliant on the EU making concessions, just because the UK is not in a position to check in common goods? If we are going to look at diverging, we have to be able to manage what we have got just now, never mind changing things going forward.

This was raised yesterday. The Minister at the Dispatch Box was not able to answer it but, on checking goods and the movement of goods, how many custom agents will be required? How many have been trained? Yesterday, the hon. Member for Bristol East (Kerry McCarthy) highlighted that the Cabinet Secretary estimated that 50,000 customs agents are needed, but that it is also estimated that only 10,000 have been trained to date. The Minister could not clear that up. This Minister has been taking lots of notes, so although she has not intervened, I am expecting a lengthy response. I hope that she can tell us where we are with training and employing customs agents and whether there will be enough in place on 1 January 2021.

[David Linden]

My hon. Friend has been incredibly generous in giving way. On the point about customs agents, Brexit was sold on the premise of us taking back control. Does he share my concern that “taking back control” was just something on the side of a bus and that when we look at the greater detail, we find that the Government have done very little preparation, which is worrying?

[Alan Brown]

Yes, it is very worrying. There has been very little preparation—all last-minute stuff. That is also why the Government are unable to engage with the devolved Administrations and businesses. They have not planned or done enough to get us to where they want to be—not where I or my hon. Friend want to be—in time for 1 January 2021.

The reality of Brexit preparations, as described by my hon. Friend the Member for Glasgow East (David Linden), was illustrated yesterday by the passing of the Kent borders regulations, which allow the police to stop lorry drivers entering Kent because of the fear of the utter chaos at the border in January. That shows how the UK Government have not done enough and that more work needs to be done. Clearly, all those issues matter in the immediate short term and need addressing in the long term before we start looking at divergences of standards.

Is there any planned divergence for agricultural standards? That has been touched on and is important. The UK Government resisted protecting those standards for future trade deals in the Agriculture Act 2020. What does the SI mean regarding the UK’s ability to diverge from the EU? While the UK wants to avoid challenge, what does that mean for the devolved nations in terms of the UK Government protecting themselves? Will they impose their will on the devolved nations? I mentioned the point earlier, but on divergences, will the internal market Bill become the kicker through the back door by allowing divergences to be forced on the devolved nations against their will?

We do not accept that the UK Government have any legitimacy in imposing divergence from the EU acquis on Scotland’s behalf as a member of the UK. On democratic principles, we do not consent to allow any withdrawal of Scotland from the EU. That applies to the withdrawal agreement and any subsequent legislation used to enforce the unwanted and undemocratic divergence from the EU, which Scotland voted overwhelmingly to remain a member of.

We do not accept the economic impact of diverging from EU rules, and that also applies to leaving the transition period, particularly because, as we discussed, the economy faces unprecedented challenges as we try to recover from the covid pandemic. We do not support or accept the need for the UK internal market Bill, which potentially allows divergences to be forced on the devolved Administrations against their wishes. We really need better co-operative working from the UK Government.

It would be ironic, when there seemed to be consensus from the Opposition that they would not oppose the SI, if, unless we start to hear decent responses from the Minister, there was a vote on it after all.

[Madam Deputy Speaker (Dame Eleanor Laing)]

I have been informed that the Member who is No. 5 on the call list has withdrawn from the debate, as have the Members who are Nos. 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18 and 19. We therefore come directly to the Minister.

Fuel Poverty and Energy Price Caps

Alan Brown Excerpts

Thursday 19th November 2020 Westminster Hall

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

It is a pleasure to serve under your chairmanship, Ms Rees. I congratulate my hon. Friend the Member for Linlithgow and East Falkirk (Martyn Day) and my constituency neighbour, my hon. Friend the Member for Ayr, Carrick and Cumnock (Allan Dorans), on securing this debate. I thank the Backbench Business Committee. This is a very important subject, and it is a shame that there are not more hon. Members here to debate it, but obviously, between covid and the fact that it is a Thursday afternoon, it is understandable that the Chamber is not as full as it would normally be.

My hon. Friend the Member for Linlithgow and East Falkirk set out the issues really well. He highlighted the need to work on a cross-party basis. It was interesting to hear about the work undertaken with Falkirk’s forgotten villages. I am sure many of us have villages that claim to be forgotten villages. It is great to see them working together to secure a successful outcome and a gas grid connection. Hon. Members can tell how steeped my hon. Friend is in his constituency and the work that he does for his constituents by bringing forward those examples, defending his constituents and trying to effect change, as highlighted today. My neighbour, my hon. Friend the Member for Ayr, Carrick and Cumnock, reiterated Scotland’s contribution to the generation of the UK’s energy supply and fuel over the years. He also highlighted how East Ayrshire Council, which is my local authority as well, suffers from fuel poverty and poverty in general, which we would like to be addressed.

On that point, I welcome the fact that the UK Government, the Scottish Government and the three Ayrshire councils today signed off the Ayrshire growth deal. One of the proposals of that deal is for a national energy research demonstrator project at Cumnock. The leader of East Ayrshire Council today highlighted the need to tackle fuel poverty, and hopefully that will make a difference in our area.

I am lucky that I have never had the dilemma of not being able to turn on the heating, or faced the awful choice of what to cut out to turn it on, but as my hon. Friends have demonstrated, too many people do face the awful choice of heating or eating, which is simply not good enough. I am sure that all hon. Members present have dealt with constituents who are in that predicament, or who try to get by by heating only a couple of rooms. Heating only a couple of rooms invariably leads to dampness in the rooms that are not being heated, which obviously exacerbates health problems, including mental health problems, as my hon. Friend the Member for Linlithgow and East Falkirk highlighted. That has a personal cost as well as a cost to the NHS, which has been estimated at between £1.4 billion and £2.2 billion a year in England. If we tackle the problem, we will improve people’s health and wellbeing and cut costs to the NHS. Sadly, National Energy Action estimates that 10,000 people a year die earlier than they should owing to fuel poverty, so we need to tackle that scourge of society.

As has been pointed out, the four nations measure fuel poverty slightly differently, but there is no doubt that Scotland appears to have a higher rate. Some 24% of Scotland’s population are classed as fuel-poor. That is partly due to the fact that about 15% of homes are off the gas grid and have to pay more to heat their homes.

Within that cohort, in the highlands of Scotland, many customers pay about £400 a year more to heat their homes because they are on restricted meters. They pay a surcharge of between 2p and 4p per unit of electricity used. I highlight that to the Minister. Does he think it is fair that people in the highlands have to pay a surcharge while exporting electricity to the rest of the UK? I hope that that can be addressed. We need a better regulatory framework for off-grid heating, to control pricing for people who have to buy oil and gas. I hope that he will take that away and look at it.

It has also been highlighted that covid-19 has had an impact. People losing their jobs or working at home is exacerbating fuel poverty. Energy Action Scotland estimates that fuel poverty in Scotland could increase by 5% owing to the pandemic. Again, that illustrates the need for action.

I welcome the action taken by the Scottish Government to deliver their new child winter heating allowance. Those payments of £200 a year for those eligible start next month and are automatically paid, rather than people having to claim for them, so everybody will get them in full. The UK Government could look at that, along with the request from my hon. Friend the Member for Linlithgow and East Falkirk for an emergency coronavirus energy grant, to which I hope the Minister will respond.

We also need the UK Government to commit to keeping the £20 uplift for universal credit. That additional money has been a lifeline to many, but those on legacy benefits need a similar increase. That is not the responsibility of the Minister’s Department, but I hope he can speak to the Chancellor about that.

As was highlighted, the Scottish Government have brought forward groundbreaking legislation to tackle fuel poverty. We need to know when the UK Government will bring forward their fuel poverty legislation and strategy. We wait with bated breath for the energy White Paper. The Minister said recently, in a written answer, that he is still planning to publish it in the autumn, but I suggest that in Scotland it is already winter, rather than autumn, so hopefully we will see it soon.

One of the most important factors, apart from income and alleviating fuel poverty, is clearly energy efficiency measures. As we have heard, the Scottish Government have led the way on that. I want to focus a wee bit more on the details of energy efficiency—hopefully without repeating too much of what my colleagues have said. Obviously, it is a no-brainer that greater energy efficiency measures can assist in reducing carbon emissions at the point of use, as well as the demand in energy generation, so that also has an effect on reducing emissions further. Clearly, it will assist in reducing fuel poverty levels and it can be part of a green industrial revolution.

I welcome the 10-point plan and the commitment to making £1 billion available next year to make new, and existing, homes and public buildings more efficient. However, while I welcome that, it does feel like a wee bit of a rehash of previous announcements. We remind the Minister that the Conservative manifesto gave a figure of £9.2 billion, so we actually need to see plans for the rest of that money. I also ask the Minister to consider asking the Chancellor to remove VAT on energy efficiency home improvements, because that makes it more cost-effective for those that can only just about afford to install such measures.

Back to the 10-point plan: I welcome the proposals for installing 600,000 heat pumps every year by 2028. Obviously, we need to see how that is going to come forward in terms of an action plan and delivery programme. I request the Minister to look at tackling first those that are off the gas grid, and to make the heat pumps more efficient. To transform people’s lives, the plan needs to align with the installation of energy efficiency measures. Hopefully the programme will be co-ordinated in that way—providing energy efficiency and the installation of new heat pumps.

I do welcome those proposals, but I still think that we need more direct UK Government investment in energy efficiency; again, that comes back to following the lead of the Scottish Government. It is not just the SNP that has said that, but energy companies, third sector organisations and the cross-party Business, Energy and Industrial Strategy Committee in its 2019 report, “Energy efficiency: building towards net zero”. A key point from that report was:

“We note that Scotland’s investment of four times more than England cannot be explained by a less efficient dwelling stock: the latest housing survey data demonstrates that homes in Scotland actually have greater insulation levels than in England. For example, in 2017, 49 per cent of homes in England had insulated walls, compared to 60 per cent of homes in Scotland.”

Also,

“that Scotland has made much faster progress in improving the energy efficiency of its fuel poor homes than England, where in some bands, progress has stalled.”

On that, statistics show relative success—44% of Scottish homes were rated as Energy Performance Certificate Band C or better in 2018, compared with just 34% in England and 28% in Wales. In Scotland, the proportion of properties in the lowest EPC bands of E,F or G has more than halved since 2010, reducing from 27% to 12%. In England the figure is still at 16%, and unfortunately in Wales it is even higher, at 20%, although there is a caveat that the Scottish figures are measured slightly differently. No wonder the BEIS Committee concluded:

“The Government appears indifferent towards how public per capita spend in household energy efficiency in England compares to other parts of the UK”

and

“the governments of the devolved nations treat energy efficiency as a much higher priority than the UK Government.”

That “indifferent” comment is particularly damning. I would like to hear what the Minister has to say about that. I know that £1 billion has been announced, but we need to see the rest of that £9 billion commitment.

The Committee on Climate Change first confirmed that policies were not in place to deliver the UK’s ambitions in energy efficiency to improve homes to at least EPC band C. The CCC stated that regulations for the private rented sector prioritise costs for landlords over the costs for renters, and that minimum standards for social housing were required. By contrast, it observed that the Scottish Government were demonstrating how an effective policy package for energy efficiency improvements in buildings might be delivered. They have actually set out a comprehensive framework of standards, backed by legislation. When will the UK Government put in place a proper framework that covers the private rented sector, social housing minimum standards and owner-occupiers, as the Scottish Government have done?

We know our long-term energy efficiency and investment programme will create jobs that allow the programme to deliver the best value, avoiding spikes in cost, as part of a green industrial revolution. Some 27 million homes need their heating systems decarbonised, so it is critical that they are as energy efficient as possible. That is why it would be good to see a long-term Government programme that looked at energy efficiency as a national infrastructure project. Maybe that could be addressed when the national infrastructure plan is published.

My hon. Friend the Member for Linlithgow and East Falkirk mentioned the energy company obligation scheme. The committee on fuel poverty states that those measures do not actually help those who most need help, which confirms the need for direct, targeted investment. We do not want another failure like the green deal scheme, which has put more people into fuel poverty rather than helping them. I know that the Minister has acknowledged that appeals for mis-selling by Home Energy and Lifestyle Management have taken too long, but his Department needs to look at and resolve that matter.

Our net zero commitments will be built in to the next investment period for the transmission grid upgrades. ECO and smart meter costs are all being added to consumer bills. What will that mean for energy users of the future? Will the Government start to consider general taxation as a way to create some of that investment in our energy system?

Everybody will be pleased to hear that I am going to conclude my remarks, but I have a few comments from the BEIS Committee report. The Committee stated that the UK Government must not only match Scottish levels of funding but create a joined-up strategy, and that the

“weight of stakeholder evidence suggests that Scotland designating energy efficiency as a national infrastructure priority has helped to improve its policy impact, making energy efficiency policy better designed and funded, longer-term, as well as more comprehensively governed and targeted, than in England.”

I ask the Minister to reflect on that and, I hope, to bring forward similar plans for the rest of the UK.

--- Later in debate ---

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

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

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

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

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

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

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

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

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

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

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

[Siobhain McDonagh in the Chair]

[Alan Brown]

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

[Kwasi Kwarteng]

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

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

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

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

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

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

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

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

Question put and agreed to.

Resolved,

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