Draft Electricity Capacity (No. 1) Regulations 2019

Alan Brown Excerpts

Tuesday 2nd April 2019 General Committees

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

It is a pleasure to serve under your chairmanship and to follow the hon. Member for Southampton, Test; as usual, I will be somewhat briefer and, I suspect, more superficial than he was. I, too, would appreciate it if, when he sums up, the Minister reminded us how we got to this point; whether these proposed changes are sufficient to meet the concerns with the ECJ; what the outstanding risks are; and, if the proposed T-1 auction we are preparing for does not go ahead, what the supply risks are in terms of the electricity market. Energy UK, the industry body, is in favour of these changes, so it seems that some changes are required to facilitate further capacity auctions.

Paragraphs 6.4 and 6.5 of the explanatory memorandum detail the additional legislative changes required to accompany this statutory instrument. Can the Minister say what other changes are required, when they are coming and why we are not seeing the whole package together?

In terms of the Government consultation, half the responses express concerns regarding the T-1 agreement trigger and the amount of power or discretion that that gives the Secretary of State. Paragraph 10.3 of the explanatory memorandum says that some changes to the proposals have been made, following the consultation. Do the proposed changes to the legislation cover the concerns that respondents had with regard to the T-1 agreement trigger?

The hon. Member for Southampton, Test touched on the fact that the UK Government need a much more coherent energy strategy. Half the existing nuclear power stations are due to be decommissioned in the years 2023-2024. In recent written questions, I asked the Government about the proposed plans for the replacement generation capacity for these nuclear power stations. I was told that there are no immediate plans, but that they have decades to decide that. Clearly, they do not have decades to decide, given that those stations are going offstream in five years’ time. That shows the failings of the Government’s policy in their current nuclear obsession—new nuclear is not working but they are still carrying on full steam ahead.

We need more onshore wind generation in Scotland, CCS strategy, and greater investment in marine and tidal energy. Those are all required to stabilise the power generation market going forward. I would like to hear some comments about those issues, too.

Community and Sub-Post Offices

Alan Brown Excerpts

Wednesday 27th March 2019 Commons Chamber

[Gavin Newlands]

It is as if my hon. Friend, who is sitting next to me, had read my speech, because I am about to come to that.

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

There is a fantastic post office in the village of Dunlop in my constituency where people do great work. It has a fine range of whiskies and beers, by the way, so it is well worth a visit. They have the same issue. The sub-postmaster has worked out that on the hours he does, he gets paid less than the minimum wage, yet he hires staff and correctly pays them the money they are due. Is this not an injustice?

[Gavin Newlands]

It absolutely is. That sub-postmaster will have even less money once he has paid the commission to my hon. Friend for the advert he has just given.

At this point, it is worth giving some background and context regarding sub-postmasters’ remuneration. Previously, all post offices received a fixed element of pay—a core payment—that also allowed for six weeks’ annual leave. Now, only a small number of offices—about 400—that did not go through the network transformation, plus offices designated as community offices, continue to receive a fixed element of pay. Overall, the total amount paid to sub-postmasters has dropped as a result of the removal of this fixed element of pay from the majority of offices. The total amount paid by Post Office Ltd across the whole network in 2017-18 was 17% lower than in 2013-14, and that is before adjusting for inflation. As a result of the transformation programme, new post office models—main, local, and local-plus offices—are paid on commission only for the transactions they carry out. Main-model offices receive commission rates that are roughly one third higher than local-model offices.

It is with this backdrop that the Post Office is currently engaged in renegotiating the deeply unfair banking contracts with UK Finance, the body that represents the banks. Given that the Government have hidden behind the post office network countless times at the Dispatch Box while defending bank branch closures since 2015, and that, on behalf of the public, they own the Post Office, I hope that they will act as the proper stewards of the Post Office they should be and ensure that the deal ends up being a fair and sustainable one.

Draft Electricity and Gas etc. (Amendment Etc.) (EU Exit) Regulations 2019 Draft Electricity network codes and guidelines (Markets and trading) (Amendment) (EU Exit) Regulations 2019 Draft Electricity and gas (Market Integrity and Transparency) (Amendment) (EU Exit) Regulations 2019 Draft Gas (Security of Supply and Network Codes) (Amendment) (EU Exit) Regulations 2019 Draft Electricity Network Codes and Guidelines (System Operation and Connection) (Amendment Etc.) (EU Exit) Regulations 2019

Alan Brown Excerpts

Tuesday 26th February 2019 General Committees

[Claire Perry]

I assure my hon. Friend that my Department has been at the forefront of preparation across Whitehall for the event of a no-deal Brexit. We have introduced a number of legislative instruments, some of which I have taken through the House myself, and we have done lots of work with third parties and stakeholders. The inescapable fact is that we do not have an agreement about an ongoing legal basis on which the single electricity market in the island of Ireland will operate, and that is a real concern. We can take legislative powers to mitigate the worst impacts of that, but they will not be taken before exit day because other even more urgent things are ahead of them in the queue. So to the extent of our ability, I agree that we are as prepared as we can be, quite rightly, for a no-deal Brexit.

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

On that no-deal preparation, can the Minister confirm that a system to replace the REMIT reporting system that regulates the workings of the markets is still to be implemented?

[Claire Perry]

If I understand the hon. Gentleman correctly, he is referring to the capacity market in the UK. There are, indeed, technical challenges regarding the procedure of the capacity market, but I am not aware of any other regulatory concerns. I can assure the hon. Gentleman that one of the processes that has been working extremely well is that I and the relevant Ministers in the devolved Administrations are now speaking on an almost weekly basis to thrash through the elements of a no-deal Brexit and how they might affect us. I imagine that all would say we were well prepared.

[Alan Brown]

I am reading from paragraph 2.2 of the explanatory memorandum to the Electricity and Gas (Market Integrity and Transparency) (Amendment) (EU Exit) Regulations 2019:

“the REMIT Implementing Regulation, aims to prevent market manipulation and insider trading in the gas and electricity markets.”

That is what is in place now. Paragraph 12.3 explains that a domestic replacement system will need to be established and put in place, so does that not mean that there is a risk in that period of market manipulation and insider trading within the UK or GB domestic gas and electricity market?

[Claire Perry]

Part of the SI relating to the market integrity and transparency amendment will enable UK regulators—Ofgem and the utility regulator—to set up and operate domestic arrangements for market integrity and transparency that will mirror the EU regime. So one of the SIs before us today does indeed mitigate the risk the hon. Gentleman rightly identifies as unacceptable.

[Alan Brown]

What will the timescale for the replacement programme be? I note that there has been no formal consultation on the REMIT replacement, so what is the timescale for Ofgem implementing the new system?

[Claire Perry]

I hope I will answer the hon. Gentleman’s question during the rest of my remarks. My officials are scribbling frantically so that I can give a good response.

Returning to the first instrument, its principle is to amend and make workable the retained EU electricity and gas legislation that was created to harmonise energy markets and regulation across the EU. It also revokes the guidelines for trans-European energy infrastructure that set out processes for the development of EU infrastructure, as they will be irrelevant in a four-nation setting.

The second instrument amends retained EU gas legislation, ensuring that the regulatory framework relating to gas is maintained, including the technical EU network codes that govern the cross-border gas trade. That will maintain maximum business continuity and efficiency for UK gas operators and consumers. The instrument also maintains the framework for dealing with security of supply, such as matters relating to responding to gas supply emergencies, by updating the security of gas supply regulation to remove references to EU institutions.

The third instrument addresses EU electricity legislation relating to markets and trading, ensuring that these operate as part of domestic law. In particular, the instrument amends a wider package of rules, known as the EU network codes for electricity. It revokes the guidelines on the forward capacity allocation code and on capacity allocation and congestion management, which essentially govern how cross-border trade works within the EU’s internal energy market. Of course, it is a truism that the EU has made it clear that if we left without a deal we would no longer be part of that internal energy market, and that is where the potential legal risk to the single electricity market will derive from. The codes would have little to no practical application in UK law and are, therefore, being revoked by these statutory instruments.

We are, of course, keen to maintain cross-border trade and interconnector flow, which has been helpful in balancing our energy demand and keeping prices low. We are implementing alternative arrangements for cross-border trade with GB interconnectors, similar to those that were in place prior to the European market coupling. We have fall-back arrangements in place for the inter- connectors between the SEM and GB to ensure that trading can continue to take place in a no-deal scenario.

Excitingly, another aspect of the instrument is that it will amend the inter-transmission system operator compensation mechanism regulation, which established a mechanism to compensate national transmission system operators for hosting cross-border flows. Domestic UK legislation will no longer provide for such flow, because we cannot legislate for other countries; the cross-border elements will therefore be removed, while the provisions that relate to the setting of our own domestic network charges will be retained.

Similarly, the guideline on electricity balancing will largely be retained in Great Britain, with amendments to remove provisions that relate to a European platform for the exchange of balancing energy. The guideline will be revoked in Northern Ireland, because it does not apply to islands that are not connected with the rest of the EU.

The fourth instrument deals with EU legislation on the operation of the electricity system. Two of the EU regulations that it amends—the regulation establishing a system operation guideline and that establishing the emergency and restoration network code—concern the activities of energy system operators, which balance supply and demand on the system in real time and ensure that energy flows securely to customers across the UK.

Effectively, the instrument will amend the obligation on National Grid to co-operate with other system operators: it will require National Grid to assist the System Operator for Northern Ireland, with a similar reciprocal requirement on SONI, but will remove the obligation to co-operate with other system operators. Of course, it does not preclude such co-operation, which we encourage, but we do not believe that it is right for a GB system operator to be under a legal duty or commitment to co-operate that our EU neighbours would not legally require from their own system operators.

The unique shared arrangements that underpin the single electricity market on the island of Ireland require a different approach. In a no-deal scenario, EU regulations will oblige EirGrid, Ireland’s system operator, to endeavour to conclude a co-operation agreement with SONI because of the unique shared nature of the single electricity market. For Northern Ireland only, we are therefore retaining a similar requirement for SONI to ensure co-operation with EirGrid south of the border.

In addition, the instrument will revoke the connection codes, a set of three EU instruments for electricity. The codes will apply under EU law only from a date after exit and will therefore not be incorporated via the withdrawal Act. A similar issue will arise for some provisions of the gas transmission tariffs.

The last instrument deals with measures to ensure market integrity and transparency, which the hon. Member for Kilmarnock and Loudoun raised. It will amend retained EU law to ensure that UK regulators can maintain effective market surveillance and enforcement, and that market participants can continue to publish relevant inside information. In answer to his question about the REMIT programme, there will be no reduction in the abilities of UK regulators; post exit, regulators will rely on alternative but available sources of market data. We are assured that that will not affect their ability to keep the market under surveillance. The programme could run for up to two years, until we are assured that appropriate arrangements are in place.

[Alan Brown]

Will the Minister give way?

[Claire Perry]

I am coming to the end of my speech, but perhaps the hon. Gentleman would like to make a brief speech of his own.

In conclusion, although leaving the EU without a withdrawal agreement is not what the Government want or are aiming for, it is only prudent that we make the changes necessary to ensure that electricity and gas markets continue to function as normal, including doing all that we can to ensure the continuity of the single electricity market on the island of Ireland. I commend the draft regulations to the Committee.

--- Later in debate ---

[Alan Brown]

It is a pleasure to serve under your chairmanship, Sir Graham. I will make some general comments before addressing some of the individual statutory instruments. It seems to me that we have a UK Government energy policy that, in terms of new and nuclear energy, is in absolute tatters. It has completely fallen apart. UK Government policy will not allow onshore wind in Scotland. The Minister might have heard these comments once or twice before. Yet here we have no-deal preparation that undermines the collaborative approach of the EU internal energy market. That is a massive contradiction.

We have five statutory instruments before us. For each of those, no consultation has been undertaken, no impact assessment has been carried out, and we have only glib assessments of costs; most of the SIs say that the costs are less than £100,000. Is this lack of consultation and absence of impact assessments due to timescales and an actual lack of no-deal preparation undertaken by the Government, despite the fact that we have been pretending to prepare for this for the last two years? Is this why the Minister is one of the Cabinet Ministers who have been reported as demanding that the Prime Minister take no-deal off the table because it is so disastrous?

Turning to individual statutory instruments, I will start with the draft Electricity and Gas etc. (Amendment etc.) (EU Exit) Regulations 2019. Paragraph 2.3 of the draft explanatory memorandum states that if these amendments are not implemented, there may be “increased wholesale prices” for electricity. However, paragraph 12.3 confirms that there is no impact assessment. How do we know that not implementing this means that wholesale energy prices could increase?

The draft Electricity Network Codes and Guidelines (Markets and Trading) (Amendment) (EU Exit) Regulations 2019 confirms that Great Britain will be removed from the balancing guidelines. The explanatory memorandum states:

“CACM and FCA regulations are revoked”

as they provide for cross-border processes for trading in electricity via electricity interconnectors. What is the actual impact of the UK being taken away from these cross-border arrangements?

Paragraph 7.7 of the explanatory notes states that “alternative trading arrangements” can be put in place. What is the timescale for those alternative trading arrangements? What discussions have been had with the EU to allow cross-border trading to continue if there is no deal and we crash out on 29 March?

I have already touched on the draft Electricity and Gas (Market Integrity and Transparency) (Amendment) (EU Exit) Regulations 2019 in an intervention about REMIT, which prevents market manipulation and insider trading. The Minister argued that alternative domestic data interrogation will actually be used by the regulator for up to two years, allowing the regulator to ensure that there is no insider trading.

Paragraph 7.2 of the draft explanatory memorandum states:

“Replacement systems for secure transfer of sensitive market data will not be available at exit”,

and that

“registration and market data reporting requirements will not be commenced until additional implementation work is completed.”

That seems to be contradictory. How can we have absolute surety that systems will be in place to ensure the regulation and monitoring needed to avoid insider trading?

Paragraph 12.3 estimates that it will cost Ofgem £1.9 million, as well as annual running costs of £500,000, to set up a replacement system. What is the timeframe for setting up the new system? Who will actually pay for it? Will there be a direct Government grant to Ofgem, or will the cost be added to energy bills? What work has been done to date on the replacement system?

Paragraph 2.2 of the draft explanatory memorandum to the draft Gas (Security of Supply and Network Codes) (Amendment) (EU Exit) Regulations tells us that the draft regulations will facilitate “‘solidarity’ (gas sharing)” and will create a duty to

“collaboratively assess the risks to EU security of gas supply”,

and to create mitigation plans on an EU-wide basis. However, paragraph 2.3 suggests that not implementing the draft regulations would somehow

“threaten the continued secure and efficient operation of energy markets across the UK.”

Paragraphs 7.7 and 7.8 confirm that a no-deal scenario would revoke the solidarity of gas sharing and the collaborative risk assessment of gas supply to the EU. Why is walking away from that seen as acceptable to the UK Government?

In summary, no impact assessment has been provided for the potential withdrawal from the energy balancing markets for gas and electricity, there are no definitive proposals for how Ireland’s single market will work if there is a no-deal Brexit and there will be no consultation. That flags up the real risk of crashing out of the EU with no deal. That is why I agree with the Minister—that the Prime Minister should take a no-deal Brexit off the table as soon as possible. I look forward to her response.

[Claire Perry]

I thank hon. Members for an extensive delve into what are a series of deeply technical and quite complicated SIs. As always in this process, we have learned a lot. I will try to answer some of the specific questions raised.

The first, from the hon. Member for Southampton, Test, was on the risks and timing of the legal underpinning for the connections code. It is our intention to make further regulations, under the Electricity and Gas (Powers to Make Subordinate Legislation) (Amendment) (EU Exit) Regulations 2018, to incorporate those connection codes into domestic law. We absolutely appreciate the need for certainty, and we are therefore looking for a way to take forward the necessary provisions in a timely manner.

I can tell from the hon. Gentleman’s face that he does not think that that is acceptable. As I think he already knows, the process of triaging preparation for no deal has been very focused on the things we absolutely must do so as not to face a massive threat on day one, while there are other things that, although they might pose a legal question that might have to be addressed later, we can safely assume can be done.

The hon. Gentleman referenced good will, and in the absence of a legislative branch of Government in Northern Ireland, I pay tribute to the Northern Ireland Office and its civil servants, and indeed to the devolved Administrations, which have been incredibly helpful in working on this good-will basis. It is in nobody’s interests for a well-functioning single energy market or internal energy market to suddenly fail, and I think everyone is appraised of those risks.

The hon. Gentleman’s second point was on REMIT and why we are essentially having only a partial transfer. That is because Ofgem and the other utility regulators are confident that that is what they need to ensure appropriate scrutiny and appropriate levels of market information, and that there will not be a decrease in effectiveness on day one or during the period in which they will bring forward alternative arrangements.

The hon. Gentleman also raised the definition of the SEM. That will still refer to EU obligations due to a practical need for the definitions of the SEM to continue to align; as I mentioned, that is one of the few derogations, if you like. Our intention is to use the powers of the European Union (Withdrawal) Act to amend the definition of the SEM, in parallel with Ireland, once a new definition is agreed with Ireland in due course. As I have made clear, this is a contingent problem; it will not mean that energy will not flow in Northern Ireland on day one, but it may lead to legal uncertainty about the functioning of the market and concerns about future capacity market auctions. We are all keen to avoid that.

The hon. Members for Southampton, Test and for Kilmarnock and Loudoun raised the question of the removal of solidarity of supply. We have almost never had to rely on the solidarity regulation, at least in my reading of energy history, because we have one of the most globally developed gas markets in the world to provide security of supply through supply diversity. We are in an extremely fortunate position, not only because we can generate our own sovereign gas offshore and potentially onshore, but because in the past few years we have relied heavily on imports of liquefied natural gas, generally from diversified sources including Qatar, the US and our pipeline with Norway, which is not in the EU and is not subject to the solidarity regulation.

The hon. Member for Southampton, Test makes an extremely valuable point, however. It is absolutely our intention to work collaboratively with our closest neighbours, whether on energy policy or on climate change mitigation, and ensure that none of us faces a threat to security of supply—particularly from state agents that do not have Europe’s interest at heart. Even though we are removing the solidarity provision, which I believe has never been used, it is right to assume that we will continue to be good neighbours to Europe.

A question was asked about the capacity market. Of course, we have said that even in a no-deal Brexit we will still abide by state aid rules. We were instrumental in putting those rules into legislation; we believe in competition and not unfair subsidies of particular industries. Ofgem assures us that the current challenge is based not on the operation of the market but on procedure. We will keep working to ensure that the market is fully restored and continues to successfully deliver low-cost and low-carbon energy to the UK markets.

The hon. Gentleman also raised the differences in licensing between Northern Ireland and the Republic of Ireland. The Northern Ireland regulator is identifying the gaps in the licensing regime. We will consider amendments in due course, but since these are not “life and limb” regulations, it was considered acceptable to allow a short period of delay. However, we continue to work closely with the Northern Ireland civil service on these points.

The hon. Member for Kilmarnock and Loudoun raised impact assessments. He is right that the assessed costs of the draft regulations do not trigger a full impact assessment. The long-term economic analysis published last November and the document that we published today about the economic impact of a no-deal Brexit encapsulate his broader points about the possible impact of a disorderly Brexit on energy costs, among other things. It is perfectly right that we have not done an impact assessment for the draft regulations.

The hon. Gentleman also asked about the timescales for the alternative arrangements for cross-border trading. The Great Britain interconnectors to the continent are agreeing access rules with the regulators. Proposals went out for consultation earlier this year, and we have nothing to indicate that anybody wants to stop the free and fair trading of energy via those interconnectors, since all parties benefit from the arrangements.

[Alan Brown]

I accept what the Minister says about ongoing consultation with the regulators, but if there is a no-deal Brexit, what will be the expected timeframe for getting the trading arrangements in place? Obviously that will affect not only the existing interconnectors, but any business cases being proposed for new interconnectors. Everybody needs to know what the trading arrangements will be.

[Claire Perry]

The hon. Gentleman states very succinctly why there are

many uncertainties associated with a disorderly Brexit, only some of which the Government can mitigate with legislation such as that before the Committee. That is the reason for my strong view that the best way to avoid such consequences is to avoid a no-deal Brexit. I have said before and will say again that it is therefore incumbent on us all to vote for the deal before us, so that we can leave with a deal on 29 March, as we promised to those we represent. That offer remains on the table.

Draft Storage of Carbon Dioxide (Amendment and Power to Modify) (EU Exit) Regulations 2018

Alan Brown Excerpts

Monday 28th January 2019 General Committees

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

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

Obviously, the SNP supports carbon capture and storage, and likewise we will not seek a Division. We are still a wee bit bitter about the £1 billion that has been pulled, but it is good that the Government say they want to be a global leader in the field. The Minister mentioned an action plan, but can she confirm that there is a clear pathway, in terms of Government funding and a programme, to reach that large scale by 2030?

The Minister said in response to the shadow Minister, the hon. Member for Southampton, Test, that the regulations do not make any change of substance. Perhaps it is just the way it is written, but will she clarify something in paragraphs 2.1 and 7.2 of the explanatory memorandum? It states that the instrument

“addresses failures of retained EU law to operate effectively”.

Does that relate just to the need to incorporate EU law into UK law, or have the Government identified deficiencies that the draft regulations will rectify? If so, what are they?

With respect to Brexit, is there any cross-collaboration and research across the EU that could be put at risk?

Draft Carriage of Dangerous Goods (Amendment) Regulations 2019

Alan Brown Excerpts

Monday 28th January 2019 General Committees

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

It is a pleasure to serve under your chairmanship, Mr Bailey. I have a few brief questions. Paragraph 11.1 of the explanatory notes to the draft instrument says that the Office for Nuclear Regulation will publish guidance, following an informal consultation in 2019. Why will there be such a lag until it publishes that guidance, and why is it only guidance, not statutory guidance?

The following questions are probably more basic or high level and touch on what the shadow Minister outlined. Paragraph 7.3 of the explanatory notes tells of the national reference level of exposure being 100 mSv over one year. How was that exposure level defined? Why do the notes say that that is a cumulative exposure level over one year, yet the reference to one year is not included in paragraph 9 of the schedule?

How does the Minister see emergency plans working if there is a spike towards the end of that one year, taking workers over the 100 mSv exposure level? What guidance needs to be given or action taken if there are several spikes? For example, it is one thing to set the level at 100 mSv over a year, but what if there are a series of spikes of 30 mSv each at one time? That seems to me to be a more dangerous exposure than a 100 mSv exposure over one year. What cognisance has been taken of routine, year-on-year exposure to 100 mSv? It seems to me that a long-term, cumulative effect must increase the cancer risk associated with radiation.

As the shadow Minister touched on, why will emergency workers be allowed to be exposed to that massive spike of 500 mSv? Workers at Chernobyl were relocated at 350 mSv, so why are we saying that our emergency workers can be exposed to an even greater level than what happened at Chernobyl?

Nuclear Update

Alan Brown Excerpts

Thursday 17th January 2019 Commons Chamber

[Greg Clark]

My right hon. Friend is right that small modular reactors have significant potential. The nuclear sector deal that we agreed with the sector and published last year contains a substantial commitment to small modular reactors, many of which would be deployable on the sites of existing and recently decommissioned nuclear reactors. However, even large new nuclear reactors can make a useful contribution. There is a challenge in every country, and this is by no means just a feature of Japanese investors. I have described clearly and, I hope, candidly the challenges that exist given the abundant availability and falling prices of alternatives. That is why we will take forward a serious assessment of whether a different financing model might make the economics more competitive. Again, the sector deal that we struck contains a programme to reduce the build costs of new nuclear, which would of course also help its financeability.

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

This statement confirms that the UK Government’s nuclear programme is in tatters, yet the Secretary of State comes to the House, commends this statement, and says that he will carry on regardless, which makes absolutely no sense whatsoever. The National Audit Office confirmed that the Hinkley Point C strike rate of £92.50 per MWh was a bad deal. We know that offshore wind is currently £57.50 per MWh, but that is based on a 15-year concession, as opposed to a 35-year concession for the nuclear deal.

The Secretary of State has confirmed that the Government were so desperate for Wylfa that they would take something like a £6 billion stake and provide £9 billion of debt financing, yet he pretends that they were being prudent by limiting the 35-year contract to £75 per MWh. His use of the word “generous” in the statement could not be more appropriate. When Toshiba pulled out of Moorside with the loss of £100 million, its share price increased. At the time, the Secretary of State said, “Don’t worry. The circumstances are unique.” With this latest setback from Hitachi, the UK Government need a proper re-evaluation of their nuclear policy; they should not look just at alternative funding mechanisms.

Four existing nuclear power stations are due to close by 2024, taking more than 4 GW of capacity out of the grid, so what is the Government’s plan for replacing that capacity? New nuclear power stations are clearly not an option that could be completed by 2024. When will we know how much money is going to be thrown at Rolls-Royce for the small modular reactors that the Secretary of State mentioned? Why are the Government still blocking onshore wind in Scotland when it is clearly the cheapest mode of generation? When is the cut-off date for the ongoing discussions with Hitachi? When will the plug finally be pulled? When did the Government first find out about Hitachi pulling out? It was already being reported in the press, so how long before coming to the House to make this statement did the Secretary of State find out? When will nuclear power be properly benchmarked against onshore and offshore wind? When will the Government wake up and end their ideological obsession with nuclear?

[Greg Clark]

Given the hon. Gentleman’s suggestion that the strike price for Hinkley Point C was excessive, I would have thought he would welcome and approve of my statement, which sets a limit on what it is possible to provide to finance a private investment. He asks when the decision was made by Hitachi. My understanding is that it was made in Japan at 9 o’clock this morning, and I hope he would accept that I have come to the House as soon as possible.

The hon. Gentleman is critical of the nuclear industry, but I would have thought that he might want to pay tribute to Scotland’s proud tradition in the nuclear sector and to the people that have worked and contributed to our energy supply and still do. Chapelcross, Dounreay, Hunterston and Torness have for decades provided good jobs and employment both directly and in the supply chain across Scotland and continue to do so today. My determination to continue our tradition of being a nuclear nation offers continuing opportunities to Scotland, and I would have thought that he would welcome that.

Far from being at the expense of renewable energy, our energy policies have supported Scotland to become a world leader in securing energy from renewable sources. In fact, we heard earlier this month from WWF Scotland that wind output in Scotland has broken through the barrier of 100% of demand for the first time. That comes as a result of the policies that this Government have put in place to bring down the costs of wind, which is highly competitive. As a result, that is causing some competitive challenges for other technologies, including nuclear, but I would have thought that the hon. Gentleman would welcome the progress that has been made on renewables.

Oral Answers to Questions

Alan Brown Excerpts

Tuesday 8th January 2019 Commons Chamber

[Claire Perry]

No, and that is why the intention to close the feed-in tariff scheme was signalled many years ago: it has cost to date over £5 billion and we have a legacy cost of over £1.5 billion to fund that scheme going forward at a time when the price of solar is tumbling. We know that many companies are bringing forward large-scale solar installations without needing subsidy.

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

22. The Minister will be aware that the whole point of supporting new renewable energy technologies is to allow them to enter the marketplace and, hopefully, get to the point where they will become subsidy-free. Onshore wind is almost at that point, and it is also the cheapest form of electricity generation at the moment. What discussions has the Minister had with the Secretary of State for Scotland about developing onshore wind in Scotland?

[Claire Perry]

I have regular discussions with my right hon. Friend the Scottish Secretary regarding all the support we are providing for the BEIS Scottish energy sector. I hope that the hon. Gentleman will join me in celebrating the fact that we have opened up the CfD mechanism to the offshore wind provision that is coming for remote island projects—[Interruption.] He used to think that that was a very good thing. We should also never forget that it is UK bill payers collectively who have invested in the success of UK renewable energy. We will continue to review the potential for onshore wind, but the hon. Gentleman will know that the Scottish Secretary and I were both elected on a manifesto that said that further subsidy for large-scale onshore wind was not required or necessary.

Bombardier

Alan Brown Excerpts

Thursday 22nd November 2018 Commons Chamber

[Richard Harrington]

As ever, my right hon. Friend is right and as erudite as he always is in explaining the significance of the Government’s procurement role. That is also true for many other sectors in which I am involved, including construction. I think my right hon. Friend was asking me whether state aid policies will change in relation to the procurement of Government contracts and so on. I cannot answer that question, because we will have to see what happens in future, but I can say that my Department is regularly in touch with other Departments that are responsible for procurement, to push continually the advantages of Bombardier and many other companies in the supply chain, in all the areas that we deal with.

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

I thank the Minister for advance sight of the statement.

In the light of the 57% increase in profits announced earlier this year, the announcement of job losses is clearly a real kick in the teeth for the workforce. Our sympathies obviously go out to the 490 employees and their families. The latest news follows a longer-term pattern, with the 220 jobs lost in 2015, 630 lost in 2016, nearly 400 lost in 2017, and close to 500 lost now. Given that pattern, what discussions have the UK Government had with Bombardier over this period about stemming job losses and about the plant’s long-term future? What money can be made available either to protect these jobs or to help with redeployment? It is not good enough for the Government to say that it is a private company and a commercial decision, because they need to do everything to protect jobs from being lost.

We hear from the Government statistics about record employment and record low unemployment, but such statistics hide serious issues such as this one at Bombardier and the recent announcement of 850 job losses at Michelin in Dundee. What steps are the Government taking to make sure that the industrial strategy is fit for purpose and will protect manufacturing jobs?

One of the Brexit dividends so far has been the plummeting of the pound, which is actually supposed to help manufacturing exports. What assessment has the Minister made of future currency fluctuations and inflationary pressures in the sector and what that can mean for jobs?

Finally, the Minister’s statement confirms that the UK Government provided £20 million of research and development grants to the plant in Belfast, and this was to be used to bring in efficiency measures. Can he confirm that, when the Government give R&D grants for efficiency measures, they do an impact assessment to see what that means for jobs and that the grants are only for protecting jobs? Any job losses must come with transitional arrangements and plans for workforce redeployment.

[Richard Harrington]

I will try to answer the hon. Gentleman’s questions as best I can. I was jotting them down quickly as he said them.

First, I did say that this is a commercial decision, and it is a commercial decision. The last time I looked, Bombardier was not a nationalised industry, so it is not at all a question of the Government making people redundant. The Government’s support for Bombardier and for aerospace generally is unmatched by any time in history. Bombardier is an important part of the Aerospace Growth Partnership, which I chair jointly with Colin Smith, an industry veteran and former president of Rolls-Royce. We have channelled about £1.95 billion to support R&D, of which Bombardier is the beneficiary.

The hon. Gentleman mentioned the £20 million that was announced. This is for a number of projects including a reverse thrust project. [Interruption.] It is a reverse thrust for an engine. I know, Mr Speaker, that you will be personally interested in reverse thrusts. I have learned quite a lot about it and would be delighted to brief you personally on the subject if you require it. The serious point is that the whole of the aerospace industry, particularly in passenger jets, is changing. We must make sure that the Government funds that we have help to change our aerospace industry, which has a turnover of £42 billion, of which £38 billion is exported, and shape the business for the future. I am very pleased about the projects that are going on, and I have visited them with the hon. Member for Belfast East to see what was happening. The project itself—the factory that I visited—was opened by Arlene Foster when she was the Minister responsible for that area, so this is very much a cross-party thing.

The hon. Gentleman mentioned the ups and downs of the currency. He is right that it has changed significantly, but businesses such as Bombardier are used to dealing with changes in currencies. It has happened in cycles throughout history, and when companies such as Bombardier—I cannot speak for them, but this is what happens in my experience—get an order, they take hedging positions on the currency so that they do not face currency risk.

The most serious and significant point that the hon. Gentleman made, among the many points—[Interruption.] I will try. There has been a lot of chuntering about me going on too much, Mr Speaker, but the hon. Gentleman made a very important point about industrial strategy. Aerospace is a critical part of it. It is really about place, which is ideal for Bombardier because it is in Northern Ireland. It is about skills. Again, these are very highly skilled and very highly paid jobs, I am pleased to say. It is about channelling the partnership between the Government and the industry to produce a business for the future, and I am certain that Bombardier in Belfast will be part of that.

Oral Answers to Questions

Alan Brown Excerpts

Tuesday 20th November 2018 Commons Chamber

[Kelly Tolhurst]

I respect the fact that the hon. Gentleman has experienced issues in his constituency in relation to a particular post office, but to set a long-term sustainability programme for the Post Office against potential postmasters is quite frankly wrong. This is part of a sustainable programme that will enable us—this Government—to keep 11,500 post offices open, to increase, via the Post Office, the pay to which post office workers are entitled, and to give them longer hours and better locations.

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

9. What steps he is taking to ensure that value for money is achieved from energy generated from proposed new nuclear power stations.

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

As the Secretary of State said in his statement to the House on 4 June, in our negotiations with nuclear developers, a key focus of discussions will be achieving value for money and lower electricity costs for consumers.

[Alan Brown]

The National Audit Office has already confirmed that Hinkley Point C was a bad deal. Half the existing nuclear power stations will have closed by 2024 and the rest by 2028, and no nuclear power stations can be built in time to replace them. Why are the UK Government tying up energy policy for the next 50 years in deals that are poor value for money?

[Richard Harrington]

As far as I know, the hon. Gentleman and his party are against nuclear power altogether, so his is an interesting question. The Government, on the other hand, are committed to a diverse energy mix in which nuclear power plays a crucial part. Nuclear power is critical to our transmission to a low-carbon society, providing continuous, reliable, low-carbon electricity. We are also leaders in cutting emissions by renewables, and nearly 30% of our electricity comes from renewable sources.

Climate Change: Extreme Weather Events

Alan Brown Excerpts

Tuesday 13th November 2018 Westminster Hall

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

It is a pleasure to serve under your chairwomanship, Ms Dorries. I congratulate the hon. Member for Bristol North West (Darren Jones) on what is clearly a timely debate, and I wish him a happy birthday.

The hon. Gentleman would not have realised when he secured the debate that it was going to coincide with the worst wildfire to have hit California. Sadly, when I looked at the news reports this morning, the death toll had increased to 42. It is impossible to imagine what it must be like to be surrounded and engulfed by flames, and trying to flee those flames, or to be caught up in another natural disaster such as a tsunami and trying to flee the coming carnage. Those disasters are happening too often.

The hon. Gentleman detailed the other extreme events that have been happening recently: mudslides in California and Bangladesh; floods in east Africa and India; dust storms in India; heatwaves across the world, causing deaths even in the UK; typhoons; hurricanes; and extreme rainfall. He explained well that such events come at a human and a financial cost, and gave illustrative examples of the disproportionate impact that they are having on women and girls in some developing countries. It is sobering to think that 20 million people annually have to evacuate their homes and uproot their lives because of extreme weather events.

While other hon. Members also spoke about those issues, it was good that the hon. Gentleman not only highlighted the events that are happening here and now, but explained what a 4° increase would mean—Armageddon, frankly. That shows that we need to take action.

The hon. Member for Richmond Park (Zac Goldsmith) reminded us that we are on course for a 3° increase in temperature compared with pre-industrial levels, yet the IPCC report focuses on the difference between a 1.5° increase and a 2° increase, so we need urgent action. The hon. Gentleman also highlighted the clear environmental benefits of taking action: irrespective of climate change, that action will improve the environment of the world we live in. We need to remember that, and look beyond financial costs.

No debate would be complete without the hon. Member for Strangford (Jim Shannon). It was interesting that he highlighted his concern about the impact on education due to school closures because of extreme weather. I remember fondly when, back in my day, we had school closures because of extreme cold, or snow days. I am not sure about their impact on education, but they certainly gave us a lot of fun in the outdoors, so we took full advantage of them.

The hon. Gentleman mentioned the diesel scrappage scheme, and councils leading the way in that area, but I suggest that it is the UK Government who need to lead the way. The reason we have so many diesel cars on the road is that incentives were introduced by the UK Government. Clearly, the UK Government now need to take action to get those diesel cars off the road, because people are being penalised through no fault of their own.

The hon. Gentleman and the hon. Member for Plymouth, Sutton and Devonport (Luke Pollard) both highlighted the impact of erosion on coastal communities, and the example that the hon. Member for Plymouth, Sutton and Devonport gave—the cliffs that he once studied on, which no longer exist—was certainly a stark illustration of the effects of erosion.

The hon. Gentleman also highlighted both the impact of erosion on general transport infrastructure and the closure of the great western rail line, which cut off the south-west of England. Again, that illustrates the need for action and for resilience planning, as he said.

The IPCC report effectively looks at the lesser of two evils: limiting global warming to 1.5° C versus a 2° C increase. As the hon. Member for Richmond Park touched on, a 1.5° C increase would mean global sea levels being 10 cm lower in 80 years’ time than they would be with a 2° C increase. Coral reefs would decline by only—I say “only”, but this is frightening—70% to 90%, rather than being completely wiped out by a 2° C increase. That is a stark illustration of what is going on. With a 1.5° C increase, the Arctic ocean would be free of summer ice once every 100 years, rather than once a decade.

Apart from the head-in-the-sand deniers, people know that climate change is happening. We have the proof and we can see it happening with changing weather patterns. In my lifetime, I have seen winters get milder. As I was growing up, people said, “It used to be far colder in my day,” so there is that generational change. We know people’s memories might play tricks on them, but if we look at old maps of Scotland from the turn of the 20th century we can see they are littered with outdoor curling ponds. Those sites are marked on the maps, but not one of those curling ponds exists any more. That shows the change in winter over the past 100 years or so.

Met Office statistics also back up the changes, which have accelerated in the past decade. The hottest day is on average 0.8° C warmer than for the period 1961 to 1990. Winters are an average of 1.7° C milder as compared with that same period. We now have longer spells where temperatures exceed 25° C. We have fewer ice days, longer wet spells, shorter dry spells and higher extreme wet days. It is obvious that action needs to be taken at a UK level, within the devolved Administrations and at the international level, though the international level clearly becomes more difficult with a climate change denier such as Trump in the White House. I hope his tenure is short lived.

Unlike the hon. Member for Bristol North West, I welcome the Government writing to the Committee on Climate Change asking for updated advice on reaching a net zero carbon economy, on long-term greenhouse gas emissions, on when the UK should reach zero emissions of carbon dioxide and greenhouse gases, and the implications for emissions in 2050. I take his point that the UK Government need to take action, and I will come on to that. When that analysis and advice come at the end of March 2019, they will need sober reflection and concerted planning and action. This will have big implications for UK carbon budgets.

As the hon. Member for Richmond Park said, we are already on track to fail to meet those carbon budgets, so strong leadership will be needed from the UK Government and we will need proper parliamentary scrutiny. As the hon. Member for Bristol North West said, we need more debates on the main Floor of the House to bring that level of scrutiny to Government policy.

Lord Deben has confirmed that, as part of its work, the Committee on Climate Change will look at how the UK can effectively eliminate carbon emissions and set out the necessary steps to clean up the UK’s homes, industry, transport and agriculture. That will clearly be critical, but I have a few suggestions of my own. First, direct Government action will be required. They cannot continue to try to hide behind things such as the green deal and hide how borrowing happens; they need to take a lead and invest. They need to move away from the obsession with nuclear as a means of low-carbon transition. That will free up billions of pounds for investment in renewables and energy efficiency measures. They should follow the Scottish Government and invest directly in energy efficiency for homes. As the hon. Member for Strangford said, the UK Government need to embrace the renewables sector.

Greater investment is required in carbon capture and storage to try to recover from the shameful pulling of £1 billion of funding. That remains a continual reminder that Departments need to work together and that the Treasury cannot have carte blanche suddenly to pull funding streams because it wants to impose austerity. CCS can decarbonise energy production and energy-intensive industries, and it can produce hydrogen, which is a carbon-free source of fuel. Onshore wind must be allowed to bid in future energy auctions, and the UK Government should not end the generation export tariff in March 2019.

Figures from the Renewable Energy Association show that changes to the energy market rules already mean that employment in the photovoltaic sector in 2016-17 was down 30% as compared with 2011-12. The number of companies in the PV supply chain was down 60% over that period, and turnover was approximately 50% in real terms. Government policy changes have a massive impact on the renewables sector. It is little wonder that the UK has once again slipped down the EY renewable energy investment attractiveness index, which compares countries all over the world. We know we need to develop energy storage, but I would suggest that the funding for the Faraday challenge is insufficient, especially when we consider that the failing nuclear industry has been given a £200 million sector deal. The UK Government need to step up with an oil and gas sector deal to help that sector to realise the 2035 vision and carbon reductions in those industries.

Before I became an MP, I spent my career as a civil engineer working in the sewerage sector. Much of my work related to sewer flooding. I have seen the number of houses affected by internal sewer flooding. I cannot think of anything worse, but the numbers over the years have increased massively. That is due to the increase in the frequency of intense rainfall. That is coupled with changes to lifestyle and the urban environment, where more and more runways are put in. People change from soft landscaping to hard landscaping, which increases run-off and water gets into sewers quicker. That is causing problems and leads to internal sewer flooding. To solve that retrospectively is expensive.

Going forward, we need to try to mitigate those things—there is demand to build more and more houses—by taking stock of those factors. In Scotland, any housing development of more than two houses must incorporate sustainable urban drainage systems, or SUDS. That has been the law for a number of years, yet in England SUDS are still voluntary. SUDS are a way of minimising the run-off into sewers or water courses, thereby preventing any detriment.

In Scotland—I know this from experience as well—any new development must get permission to connect to the sewer system from Scottish Water, which has the right to say no. The developer must pay for any upgrades to the sewer system or any mitigation measures that are required. That becomes part of the planning conditions, yet in England the UK Government have steadfastly refused to end the right to connect. The Environment, Food and Rural Affairs Committee has made that recommendation over a number of years, yet the UK Government refuse to act. I do not understand that. If we are going to mitigate the impact of future housing and climate change, we need to start looking at this.

When it comes to building houses in Scotland, the Scottish Environment Protection Agency does not allow houses to be built on flood plain land with a predicted flood frequency of less than one in 200 years. Critical infrastructure cannot be built on land with a flood frequency of less than a one in 1,000 years. In England over the years, too many houses were built on flood plains, and we are now seeing the consequences of that.

The Government must take independent advice. They cannot listen to the lobbyists from the nuclear industry and the big housebuilders, which only want to make money. We need to take control and change where we are going just now. I have made a few suggestions, and I look forward to hearing from the Minister.

[Dr Alan Whitehead (Southampton, Test) (Lab)]

I congratulate my hon. Friend the Member for Bristol North West (Darren Jones) on taking the initiative of writing to the Backbench Business Committee to suggest we have this debate. I congratulate him not only on persuading the Committee to allow it but on putting the case this morning that his achievement in bringing this debate reflects the non-achievement of the House as a whole in putting the issue firmly on the Floor of the House. The fact that we are debating this matter here this morning with the cream of the usual suspects indicates that we are still a very long way from getting the issue debated with the importance and urgency it deserves. I therefore fully back and support the suggestion from my hon. Friend the Member for Bristol North West that the IPCC report should have been debated fully on the Floor of the House. Indeed, the developments from that report should be debated regularly on the Floor of the House from now.

The subject of this debate is extreme weather and climate change, which has been debated in this House previously. Climate change deniers have come to the Floor here and indicated that this extreme weather stuff is nothing to do with climate change; that it is all a bit of a hoax and we should just accept the fact that the weather changes, as I think a certain President of the United States recently opined, and we should not worry too much about it. Well, I think that has been comprehensively demonstrated to be not only a completely false conclusion but an alarming and complacent conclusion, because we know what action we will have to take on climate change over the next period.

The IPCC report, as hon. Members have mentioned this morning, is not just a wake-up call but a blueprint. As the hon. Member for Richmond Park (Zac Goldsmith) said, if we do not tackle the speed at which temperatures are rising and how much they are rising across the world, we will inevitably face a very difficult future. The extreme weather events that we are seeing at the moment are simply a signpost of the long-term enormous effects, as the hon. Gentleman set out, on the world’s economy and the livelihoods and lives of millions of people across the planet, and on the liveability, as my hon. Friend the Member for Bristol North West set out, of large parts of the planet in future. So the extreme weather events that we increasingly see are a harbinger of much wider effects in future—harbingers that we ignore at our extreme peril.

Hon. Members have drawn attention to a recent report by the Met Office on the changing nature of the climate in the UK. The report demonstrates to me that the issue is not only about hurricanes in the United States, flooding in south-east Asia or forests catching fire in northern Sweden but is very much here at home now and is the future that we will face to some considerable extent if we do nothing about it. The Met Office report is a stark reminder of how much and how rapidly things are changing. The creep of red across the map of the UK over the past 50 years shows the daily maximum temperatures of hot summer days and dry spells. Conversely, the creep of white across the country shows how icy days and daily minimum temperatures in winter change across the country. So we can see a clear change in climate.

As the hon. Member for Richmond Park has rightly said, we cannot attribute particular weather events to the effects of climate change, but elementary physics teaches us that—I speak as the proud possessor of a relatively good grade in O-level physics, so I am at the elementary level—if the temperature of water increases, as we know is happening, the water expands. It is not just a question of global icecaps and various other things melting that adds to sea level increases across the world; it is just the fact that water expands as it gets warmer.

As water expands as it gets warmer, the air above it is affected and becomes more turbulent. It absorbs more energy and takes up more water vapour, resulting in more precipitation, exacerbating the effects on the weather. It is not the case that climate change causes tidal surges or hurricanes in the southern United States, but it exacerbates them and changes them. They are longer in duration, more severe and more frequent, and are the consequences of the physics of climate change, as I have described.

So we know what our future holds if we do not take urgent action not only to mitigate climate change but to adapt to it. My hon. Friend the Member for Plymouth, Sutton and Devonport (Luke Pollard) set out clearly what is in store for our own country’s infrastructure as a result of the changes. Indeed, I have observed the substantial effects of tidal surges and extreme tidal weather; a vital part of communication infrastructure has been severed. To a much lesser extent, I have had a small attempt in my constituency area to get much greater attention paid to flood defences for the Itchen valley. For certain, that valley will be flooded to an increasingly frequent extent as a result of tidal surges and changes.

Southampton put together a scheme for dealing with tidal surges and possible flooding. It obtained some funding through the local enterprise partnership to assist with flood relief, but the funding was then taken away on the instructions of the Government and placed into a road scheme. Unless we take the issue seriously, get our priorities right and adapt our country for what we know will be a future of far greater extreme weather events, with all the consequences that that will have on infrastructure and our daily lives, we will surely pay the price. Likewise, if we do not take seriously what the IPCC says about the global scale, we will pay the price.

I am worried about the extent to which past performance is prayed in aid for not doing as much on climate change and global warming as we might do. It is true that the UK has performed better than many other countries in taking action on climate change, but the sheer scale of the task facing us means that one country’s performance cannot be set against another’s.

The hon. Member for Richmond Park indicated that our clean growth plan is good in many ways. It has many good things in it, and includes many good responses to the requirements of the fourth and fifth carbon budgets from the Committee on Climate Change. However, the clean growth plan itself acknowledges that it will not get us to the terms of the fourth and fifth carbon budgets. Indeed, it states that it will fall short by about 5% in terms of emissions by the time of the fifth carbon budget. The failure between the fourth and fifth carbon budgets is much worse; the clean growth plan gets us only about 50% of the distance between them.

Given what we know about the difference between 1.5° C and 2° C, as the hon. Member for Richmond Park mentioned, we have to do so much more. I was therefore dismayed that when the Government wrote to the Committee on Climate Change to ask what it thought about a 1.5° C, net-zero target on climate change they specifically excluded action to change the terms of the requirements of the fourth and fifth carbon budgets. We are looking at what we can do about a world increase of 1.5° C, with the enormous differences that the hon. Member for Richmond Park says would result from 2° C. Yet we are proposing no change at all in the current carbon budgets, which, even by the Government’s own plans, we will not reach anyway.

A theme of this morning’s debate is that far more needs to be done and we have, as the IPCC report tells us, a very limited amount of time in which to get it done. We therefore need at the very least to express that urgency in the House, to ensure that the debate is shared among all Members. The urgency, effort and additional activities that are needed to combat climate change, and to adapt, must be properly brought before the whole House. As a result of this morning’s debate that call might be heard.

[Alan Brown]

In terms of parliamentary scrutiny, does the hon. Gentleman agree that the Government sent out the wrong signal when they abolished the Department of Energy and Climate Change and subsumed it into the much bigger Department for Business, Energy and Industrial Strategy, where these issues get lost among all the other stuff that the Government are looking at?

[Ms Nadine Dorries (in the Chair)]

Order. Dr Whitehead, I am sure that you would like to hear from the Minister after you answer that question.