Draft Contracts for Difference (Sustainable Industry Rewards) Regulations 2024

Alan Whitehead Excerpts

Monday 29th April 2024 General Committees

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

It is a pleasure to serve under your chairmanship, Ms Rees. The Opposition very much support the changes, which we hope will come in for allocation rounds 7, 8 and 9—it would be nice if they came in for AR6, but that is not in anyone’s gift to sort out right now. First, we think they will make a material change to the quality of the schemes supported by Government funding. Secondly, we think they will uprate the whole industry so that it is clear about what it is doing about UK-sourced materials for the schemes, arrangements for UK jobs and the sustainability of the whole supply chain and of the products themselves. So far, so good; we are fully behind the proposal to introduce SIRs as a replacement for the present arrangement, which is the sustainable supply chain declarations.

I ought to say before we proceed that my voice is not that great. I was also enthusiastically supporting my football team on Saturday, but unfortunately the result was not as positive as that for the Minister’s team, which I understand has now been promoted to the championship. If my team fails to get promoted through the play-offs this season, our two teams will play each other, so we will both have lost our voices if we meet again under those circumstances.

The problem with the regulations is one of potentially considerable detail. If I am wrong in my concerns, I would appreciate an explanation from the Minister of why I am wrong. Alternatively, if I am not wrong in my concerns, will she tell me what the Government are thinking of doing in the future to put right what I think is a potential problem for the process?

The problem is that both the allocation round and the new process that is to be introduced are competitive and have a budget, but one precedes the other, providing for the possession of a sustainable industry reward, or SIR, which essentially allows the company to go on to the full allocation round. If a company does not have an SIR, it cannot go into the main allocation bidding.

Once the SIR process is in place, companies bidding to go into the main allocation round have three possible outcomes. The first is that they have bid for an SIR and their bid has been ticked off—the Government have said, “Yes, your bid qualifies for SIR status, so you can through to the allocation round.” However, that company may not necessarily want to bid in that first round, prior to the allocation round, to get a funded SIR, because they may have ways of reaching what is in the SIR other than by going for a funded SIR. For example, a Danish offshore wind operator may be able to reach those arrangements through its own existing internal facilities. It may say, “Well, we are going to bid in without a funded SIR, but we have an SIR, so we can qualify for the eventual allocation round.” That is outcome No. 1. No. 2 is a straightforward process where a company bids for and gets a funded SIR, and then goes through to the allocation round with that funded SIR in its pocket.

The third possibility depends to some considerable extent on how the budgets are set, both for the SIR and the eventual allocation round. A company could have qualified for an SIR, with the Government having ticked off its proposals as SIR-qualifiable, but when it gets into the pre-allocation round competitive bidding, it may fail to get an SIR because of the budget constrictions in the SIR process—logically, because it is a competitive round, it is possible that some people will fail to get a competitively bid SIR to go into the allocation round. At that point, it is a company that had a bid process in at pre-qualifying, which allows it to be competitive against all those other bidders that have funded SIRs going into the actual allocation round. If a company has bid on the basis that it is likely to win some funding in the SIR allocation round, but it fails to win it, logically it has to readjust its bid, as if there was no SIR in place, in order to remain competitive in the actual allocation round.

As far as I can see, companies would not be denied access to the allocation round, because they did have a certified SIR in the first place. If they have bid and lost, as opposed to having decided not to bid, their bid will have to look different in the allocation round itself. Is it the case that the most advantaged people in the allocation round may well be those who have bid for an SIR and lost, and who have then readjusted their bid accordingly? Could it be that the smartest strategy for companies is to try to lose an SIR, while having indicated that they can, in principle, meet its terms? They can then bid more competitively than if they had had an SIR in the first place.

That is not to undermine the scheme as a whole, which is potentially very good, but there is a potential problem with the process of going between two separate competitive allocations to get to the eventual position of companies being in possession of a CfD, which is what we want to happen. That could distort the bidding process and could certainly lead to some lack of clarity about the principle of placing these additional requirements on bidders to secure the sustainability and so on of supply chains, which could potentially undermine the process.

Does the Minister therefore have any guidance she can give me to show that this is not really a problem, because of various issues that she can conjure up this afternoon, either on receiving inspiration or otherwise? Alternatively, if she cannot fully satisfy me that I need have no worries about this issue, which I quite understand, we could perhaps engage in correspondence subsequently.

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[Amanda Solloway]

I thank the hon. Members for Southampton, Test and for Angus for their contributions. I will endeavour to answer the questions as fully as possible, but if I fail to answer them all, I am incredibly happy to have further meetings on the subject, as suggested, although this issue is not in my portfolio.

All companies need to meet a minimum standard of investment before they bid into the CfD, so there is a level playing field for everybody. Companies will know if they have been allocated an SIR before they bid in. If they fail to get a CfD, their budget will be reallocated to those who were successful. As I have indicated, however, if I have not fully understood the question, I am happy to clarify further.

On the point raised by the hon. Member for Angus, the UK does not manufacture all the components required to build a wind farm. We do not expect to make everything, and it would not be legal to mandate UK content. Where investment goes beyond the UK, we want that to go to cleaner, net zero-consistent firms that support our net zero commitments.

The contracts for difference are a key pillar for our energy security, but they need to adapt to changing market conditions. We are determined to make offshore wind deployment a success story and we are willing to take innovative steps to make that happen. Sustainable industry rewards have been deployed with industry input. They will provide much-needed support to an industry that has faced a tough economic environment and supply chain disruptions.

That support should trigger significant investment in expanding the supply chain’s capacity and capability in many deprived coastal areas around the UK and in new, cleaner manufacturing processes. The investment will help to deliver our levelling-up agenda and will positively impact communities that host large infrastructure projects by providing new, well-paid, high-tech manufacturing jobs, as well as by maintaining existing jobs. New offshore wind manufacturers from Britain and overseas are already looking at the UK, thanks to our package of supportive measures. It is true that the measures will have an impact on consumer bills, and we are talking to the Treasury to get the balance right between what realistic sustainable industry rewards can achieve, through targeted revenue support to get investment in the supply chain back on track, and the cost to the consumers.

These measures will also put us on an equal footing with our direct competitors in the EU and the US, who are investing heavily in their offshore wind supply chains. Considering how much deployment and potential we have, it is only right to try to attract and support as much of the supply chain as possible. It is key, though, that we provide the support in a targeted, proportionate way.

As many hon. Members will know, allocation round 6 of the CfDs is now live. The budget for allocation round 6 was announced as part of the Chancellor’s spring Budget. At over £1 billion, it is four times larger than for the previous round.

[Dr Whitehead]

The Minister is giving a good response to this afternoon’s debate, but I do not think that she addressed the detail of the particular point that I raised. It is not a question of reallocating CfDs but of how we go about a competitive allocation round if we have people in different circumstances, albeit with an SIR, leading up to that allocation round. I would appreciate an opportunity—outside this Committee, if possible— to get to the bottom of that particular problem.

[Amanda Solloway]

I would, of course, be delighted to facilitate that, either with me or the relevant Minister.

Although that budget does not include the SIRs, it is none the less a crucial step in our renewable energy deployment plans and demonstrates the Government’s commitment to ensuring that the UK remains one of the world’s leaders in renewables. The Secretary of State will decide in due course whether to increase the budget later this year. I commend the regulations to the House.

Large-scale Solar Farms

Alan Whitehead Excerpts

Thursday 18th April 2024 Westminster Hall

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

Thank you, Mr Henderson, for your consideration of the time available in what has been a very useful and educational debate. I congratulate the hon. Member for Sleaford and North Hykeham (Dr Johnson) on securing this debate. I also congratulate hon. Members on the way they have put their cases. The contributions from the hon. Members for Redditch (Rachel Maclean), for Buckingham (Greg Smith) and for North Wiltshire (James Gray) and the right hon. Members for Gainsborough (Sir Edward Leigh), for Haltemprice and Howden (Sir David Davis) and for Suffolk Coastal (Dr Coffey) all added greatly to the tissue of the debate.

Let us get one or two canards out of the way first. This debate was not, to my mind, about a lot of people standing up and being nimbys, although I understand that hon. Members will quite rightly want to defend what they consider to be the best interests of their constituencies. We had an intervention from the right hon. Member for South Holland and The Deepings (Sir John Hayes), who said that he would stand by South Holland and The Deepings to the last; the right hon. Member for Gainsborough, who I think perhaps is producing evidence for the wrong side in the civil war, nevertheless made the point very strongly about what he felt he was here to do for the interests of his constituency. That is not about nimbyism, but about defending what one thinks is best for one’s own area of the country.

The problem we have is how we ally together a policy that, by and large, everyone in this Chamber is agreed on and the way we carry it out in practice. The policy, on which I think there is no real difference between the Opposition and the Government, reflects the strong view that we should move rapidly forward on the deployment of solar across the country. The Government have a target of 70 GW of solar to be deployed by 2035. In our plans for decarbonisation of the energy system by 2030, we want to see 50 GW installed by 2030.

That is, in part, because solar is now one of the cheapest forms of energy that can be deployed in an energy emergency, where we have to produce an enormous amount of additional capacity over the next few years, in addition to replacing what is going away, to ensure that our system is resilient, stable and homegrown for our future. The fact that solar has to play a central role in our overall energy economy in the future, and the fact that the targets for installation of solar are very similar between the Opposition and the Government, underline how central it is felt to be that solar should play that key role.

When we decide that it will play that key role, the next question is: how do we do it? That is what a lot of the debate today has landed on. Where do we put solar? How do we put solar in various places? What is the most beneficial way to do it, assuming we are going to do it for the country as whole?

Much as we might want to, we will not be able to deliver all the solar on roofs and brownfield sites—certainly not on roofs. But, as I will come to in a moment, the issue of what proportion we can install in particular areas relates to how the Government set out planning and other energy management arrangements that prevent or downgrade the possibility of putting solar panels on to roofs, buildings, industrial workplaces and so on. The Opposition very much want to see, if possible, the predominance of that solar development concentrated on brownfield sites, roofs and industrial buildings, but we recognise that there is an enormous amount of work to do to facilitate the planning and commissioning arrangements that will allow that to happen.

Hon. Members, particularly the hon. Member for Redditch, mentioned cost and remediation on brownfield sites. Solar treads very lightly on the earth. We can do things with solar on brownfield sites that we might not be able to do with other forms of development on a brownfield site, particularly if it needs some remediation, so that is not the key issue. The key issue is the value of brownfield sites in an urban context and the hope value that those sites have, often in contradistinction to the sort of value that the developers think they might get from land that is not going to change its value, on hope or otherwise, in terms of their developments.

[Sir David Davis]

I am listening with interest to the hon. Gentleman. Does he agree that if we increase the incentive, up to the point of mandating in some cases, for the use of brownfield sites and roofs and so on, that is likely to alter the economics, with people like Elon Musk and others investing in more cost-effective and more easily used photovoltaic cells for that purpose?

[Dr Whitehead]

Yes, indeed. As the right hon. Member will know, solar is now not looking for subsidy from the Government in the way that, as the right hon. Member for Suffolk Coastal mentioned, it was a number of years ago. It might be that we ought to look at how we can direct the best use of land and facilities for solar, by reintroducing incentives and disincentives that can go into solar development for the future. I would emphasise that that is all in the gift of Government to bring about, in terms of changes to how planning, underwriting and frameworks are organised. We mentioned the land use framework, which has still not come forward from DEFRA. All those things can play a much more substantial role in getting the balance right about where we put what is an imperative to develop for the future.

Some of the questions that have been raised are about not so much solar itself, but, among other things, the cumulation of particular sites in particular places. Of course, there is not anything in planning arrangements that can easily deal with the question of cumulation. Again, that needs to be put into the context of a wider land use planning arrangement for the future. I am from a constituency that has one farmer, although we are not allowed to recognise who that farmer is in the census because we are not allowed to record one farmer in the census return; it has to be two farmers or no farmers. However, I do understand that it is a real issue when there is a cumulation of a number of these things in rural constituencies, and they can see no benefit of that cumulation for their local populations.

Again, it may be within the gift of Government to mitigate that problem by enabling local communities to benefit from the output of the particular farms in their area. Notwithstanding that, it is certainly the case that cumulation has come about not just because of developers’ lust for very large schemes, but because at the moment those are some of the only places where they can get decent connections in the near future. For example, Lincolnshire was the site of two power stations—Cottam and West Burton—which have now closed, but it still has good, high-level grid connections.

Therefore, there are schemes that might come forward in other parts of the country that do not have such good connections, which are being put on the backburner just because developers can get particular connections right now. That is also in the gift of the Government to sort out. They should get the connections in the country on a regularised basis so that the people bringing forward their solar developments actually have a choice of where to put their connection based on the best site for their development, rather than just looking at the economics of getting a connection right this minute.

[James Gray]

There is a perversity here, of course, which is that the further away a site is from the input into the grid, the bigger it has to be. Because Lime Down, the one in my constituency, is 30 miles away from a link into the grid, it has to be at least 2,000 acres, probably more, in order to pay for the connection.

[Dr Whitehead]

That is certainly true, but a much wider issue is the fact that connections in this country are pretty much available on a lottery basis. At the distribution network operator level, most of the capacity in most DNOs is taken up, and at the national grid level, the connections are entirely dependent on where the lines go. They do not necessarily go to where people want to connect up, and they are also very much at the limit of their capacity at the moment. A national plan to enable those connections onshore to be distributed equally across the country would go a long way to facilitating much better distribution of the wind and solar projects that we want to see for the future.

Although I do not represent a rural constituency myself, I have great sympathy with the problems of accumulation with solar development. The solution, however, is not to throw solar out; it is to do a number of the things that I have mentioned this afternoon—to reach our target and secure the equitable deployment of solar across the country to manage our electricity future positively.

[Dr Johnson]

The hon. Gentleman is talking about equitable distribution. I understand to some extent the point he is making, but surely there is some sense in saying that areas such as Lincolnshire, which have such high-quality farmland, should not have massive solar farms at all, because we will simply reduce our food security.

[Dr Whitehead]

I was intending to go into the 3a and 3b debate, but I do not think it will add anything greatly to what I have to say. Again, it is in the gift of Government, for schemes above the 50 MW level, to look at what the overall planning guidance suggests we should do. I am personally a little sceptical of the overall case about food production and land use because after all it was recently estimated that if we did produce the 70 GW target, that would take about 0.3% of UK land area, up from 0.1% today, compared with 69% of the land that is farmed. That does not add anything to the debate on Lincolnshire itself, but the point is that the actual land take of solar overall will be pretty minimal compared with what is in agriculture currently. As a matter of interest, the land taken by solar already is one fifth that taken up in the country for golf courses.

[Dr Johnson]

Will the hon. Gentleman give way?

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[Gordon Henderson (in the Chair)]

You will have to be quick, Dr Whitehead.

[Dr Whitehead]

I think the hon. Lady will forgive me for not being the Government right at this minute. It is not my responsibility to set out what the Government would do for the future; it is my responsibility to respond to this debate as the Opposition.

I have already said what we want to do in terms of planning land use and arrangements for the deployment of solar in a much more methodical way, and bringing forward arrangements that can, for example, make rooftop and brownfield solar much more achievable, to alter the balance of advantage and disadvantage for deployment across the country. That is probably all the hon. Member for Sleaford and North Hykeham can expect me to say about what we will do in government, but I would add that the Government could do that today, so I hope the Minister will tell us what he will do in terms of that balancing to get solar deployed in the future.

[James Gray]

I am most grateful to the hon. Gentleman for giving way a second time. I have been listening very carefully to his extremely interesting speech, but I must admit to being a little confused about what Labour party’s policy is on these matters. Let me ask him straightforwardly: will the incoming Labour Government —if there is one—be in favour of large-scale solar farms in the countryside or against them?

[Dr Whitehead]

That is a really interesting question. It is not necessarily the case that there will be an incoming Labour Government, but it is nice to hear the hon. Gentleman declare that there will be; that is really helpful. Should there be an incoming Labour Government, we will want to ensure we reach our targets of solar deployment equitably for the country as a whole. If that means bringing in new legislation, guidance and rules to allow that distribution to take place equitably, that is what we will do. As I am sure he will understand, the detail would take about three quarters of an hour to unpack, so we will have to leave it for now. I am very happy to have a cup of tea with him in the not-too-distant future and set all that out in some detail if he would find that interesting.

[The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Andrew Bowie)]

It is a pleasure to serve under your chairmanship, Mr Henderson. I congratulate my hon. Friend the Member for Sleaford and North Hykeham (Dr Johnson) on securing this incredibly important and timely debate on large-scale solar and the impact of the plans on rural England.

It has been fantastic to hear the passionate and well-informed speeches of my hon. Friends the Members for Redditch (Rachel Maclean), for Buckingham (Greg Smith)—he talked about the benefits of small modular reactors, which was music to my ears—and for North Wiltshire (James Gray).

My right hon. Friend the Member for Gainsborough (Sir Edward Leigh) talked about the positive benefits of further investment in nuclear power, which is why we unveiled the civil nuclear road map earlier this year—the biggest investment in nuclear in 70 years. He would struggle to find a bigger advocate of the benefits of our domestic oil and gas industry than me. I assure him that, despite my Scottish Presbyterian upbringing, I associate myself much more with the cavaliers than the roundheads. We also heard from my right hon. Friends the Members for Haltemprice and Howden (Sir David Davis) and for Suffolk Coastal (Dr Coffey). I think I have engaged with just about every one of them individually on various energy infrastructure projects, not least recently on solar.

It was also good to hear the concerns of communities raised in the interventions of many other Conservative Members, including my right hon. Friends the Members for Newark (Robert Jenrick), for South Holland and The Deepings (Sir John Hayes), for Ludlow (Philip Dunne) and for Staffordshire Moorlands (Dame Karen Bradley) and my hon. Friends the Members for Devizes (Danny Kruger), for North East Bedfordshire (Richard Fuller), for Sedgefield (Paul Howell) and for Cleethorpes (Martin Vickers).

I represent a vast rural constituency that encompasses some of the best farmland north of the border, which is itself looking at significant energy infrastructure build over the next few years, so I completely understand those concerns and have heard them myself from local communities worried about what that build will mean for the countryside in which they live and of which they are so fond.

Three years ago, the Government adopted our sixth carbon budget with the world’s most ambitious climate change goal—to reduce emissions by 77% by 2035, compared with 1990 levels. We also committed to fully decarbonising the electricity system by 2035, subject to security of supply. Renewables such as solar and wind, alongside other low-carbon technologies such as nuclear, will underpin the UK’s transition from a reliance on fossil fuels to a new, secure, clean energy system. Solar is an important part of the energy mix, and its deployment is a key part of the Government’s strategy for energy independence and clean growth.

As set out in the British energy security strategy and the energy security plan, we are aiming for up to 70 GW of solar capacity by 2035. To achieve that, we need to deploy both rooftop and ground-mounted technology. Ground-mounted technology is one of the cheapest forms of electricity generation and is readily deployable at scale. As such, the Government consider that there is a strong need for increased ground-mounted solar deployment, as reflected in the recently published energy national policy statements.

However, the Department and I recognise that, as with any new development, solar projects may impact on communities and, indeed, the environment. The planning system must allow all views to be taken into account when decision makers balance local impacts with the national need.

Because of the quasi-judicial role of Ministers in determining planning applications, I hope that Members will appreciate that it would not be appropriate for me to comment on any specific matters in relation to specific projects in the planning system. Nor can I comment on the merits or harms of any particular proposals, as that could be perceived as prejudging the subsequent outcome. However, the Government recognise that solar projects can impact on land use, and I can speak to that. It is important that the Government strike the right balance between those considerations and securing a clean energy system for the future. Again, the planning system must take those issues into account.

As the recently published national policy statement for renewable energy infrastructure sets out, solar developers

“should, where possible, utilise suitable previously developed land, brownfield land, contaminated land and industrial land. Where the proposed use of any agricultural land has been shown to be necessary, poorer quality land should be preferred to higher quality land avoiding the use of ‘Best and Most Versatile’ agricultural land where possible.”

If it is proposed to use any land falling under Natural England’s best and most versatile agricultural land classification—grades 1, 2 and 3a—developers are required to justify using such land and to design their projects to avoid, mitigate and where necessary compensate for any impacts.

It is clear to me and to the Government that concerns remain about the scale and volume of projects that are being applied for on BMV land in specific areas of the country, particularly in areas with historic and established grid connections. We have concerns that not all developers are properly considering those requirements. That is something that needs to be rectified. We want to see that, following the new EN-3 publication. Although I can say little of detail in this Chamber, I want to assure hon. Members that we are listening and that work is ongoing to see what can be done to ensure that balance is met.

Reference has been made to the fact that there are no Liberal Democrat Members in the Chamber this afternoon. My hon. Friend the Member for Redditch described their policy as “bananas”, which means, “Build absolutely nothing anywhere ever.”

[Dr Whitehead]

Near anybody.

[Andrew Bowie]

Near anybody—sorry. However, that is not actually the case. The Lib Dems’ proposal, which was voted on at their conference last year, is to remove restrictions on new solar and wind to accelerate deployment of renewable power. It is quite clear why there are no Liberal Democrats in the Chamber today; they would ride roughshod over the views of rural communities around the country to increase the deployment at pace and scale of solar and other technologies.

The reason why there are not many Labour Members in the Chamber is, as the hon. Member for Southampton, Test (Dr Whitehead) suggested, that not many of them represent rural communities, and they are not seeing the impact of the applications. I am now of the opinion, however, that they are just as confused about the Labour party policy on this issue as we all are, following what was a very interesting speech from the Opposition spokesperson.

Solar and farming can be complementary, supporting each other financially, environmentally and through shared use of land. Analysis shows that even in the unlikely scenario that all additional solar needed to meet the British energy security strategy ambition of 70 GW were to come forward as ground-mounted solar, which is not going to be the case, it would be less than 1% of all types of UK utilised agricultural land that was needed to accommodate it. However, as I have referred to, the concentration of so many of those projects in specific areas is concerning, and UK-wide analysis cannot take that into account. Again, although I am unable to say anything specific at this time, I can assure colleagues that we are listening.

The Government consider that improving our energy security is urgent and of critical importance to the country. I do not think that there is any disagreement on that, but it must be achieved together with maintaining food security for our United Kingdom. Solar projects and agricultural practice can co-exist. For example, the science of agrivoltaics is developing, in which solar is integrated with arable farming in innovative ways. That is coming on in leaps and bounds. Solar energy can also be an important way for farmers to increase their revenue from land less suited to higher-value crop production. Again, on that there is very little disagreement.

What we ultimately want to achieve is protecting our environment, backing British farmers and delivering long-term energy security with more low-carbon energy. I guarantee that this Government and this Department will not countenance the industrialisation of our green and pleasant land. It is possible to maintain and increase our food production in a more sustainable way in some areas and to see land use changes in others.

I turn briefly to the issue of cumulative impacts, which has been brought up multiple times. The planning system sets out how applicants and decision makers should consider cumulative impacts. When preparing an application for a development consent order, applicants for solar deployments and developments under the NSIP regime

“should consider the cumulative impacts of situating a solar farm in proximity to other energy generating stations and infrastructure.”

It is then a matter for the examining authority to consider cumulative in-combination effects with the other solar farm proposals and other developments in a locality when conducting an examination of a particular NSIP solar project. During the examination, the views of interested parties, which will include advisory bodies and local planning authorities, will be taken into account in the examining authority’s recommendations. Again, I assure colleagues that we are looking at that issue.

The Department and I appreciate the concerns raised about the clustering of projects around grid connections in some areas. As we bring more new energy infrastructure online to meet the demand for clean, secure electricity, so too must we increase grid capacity. As set out in the spring Budget, the Government are working with Ofgem and network companies to release more network capacity and prevent speculative projects from obtaining and retaining network capacity. That should result in more capacity across the country and help to reduce the clustering of projects.

Community engagement has also been raised. It is vital—this is where Conservative and Labour party policies differ dramatically—that communities have a voice in decisions about their local areas. There are established routes in the planning system to consider the impact of solar projects and to enable communities to raise concerns about developments. I know that there are concerns about how effective those routes are, but I will set out the policy as it stands.

The national planning policy framework, which underlies the planning system for projects below 50 MW, encourages developers, including those proposing solar projects, to engage with local communities before submitting an application. Local authorities will consider a range of factors when assessing applications, including visual and environmental impacts. Members of the public can submit their views to the planning authorities, and significant concerns will be taken into account as part of the local decision-making process. Developers taking larger projects through the NSIP regime must complete considerable community engagement before any approval is granted, giving communities ample opportunity to feed in their views. The level and quality of community engagement, among other factors, will be taken into account by decision makers.

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[Andrew Bowie]

My right hon. Friend knows that I am no longer the Minister responsible for the network or the national grid, but I will ensure that her concerns are passed on to the relevant Minister. Ofgem and the electricity system operator are engaged in a considerable review of how connections are offered across the country, because there is a problem with that system. That is recognised and is being addressed.

Let me briefly touch on community benefits, which have also been raised. It is important that communities can participate in and benefit from the deployment of new low-carbon energy technologies in their local area. However, the Government do not have a formal role with regard to community benefits for solar and other large-scale renewable energy projects. We believe that those are best agreed at a local level, between the renewable operator and the local communities, so that they can be tailored to each community’s individual needs. They cannot be taken into account and, I am afraid, are not relevant to the planning decisions. A number of solar developers already provide community benefits on a voluntary basis. We are working with Solar Energy UK, the industry body, to provide further guidance and advice on community benefits for solar developers and communities and to develop a more consistent approach across the country that is fair to all parties.

[Dr Whitehead]

Does the Minister accept that under the present trading arrangements for energy, a developer cannot provide a trading benefit for a local area only and has to treat it as though it were a national benefit? Is the Minister interested in changing that so that benefits can come to local areas, rather than simply being spread across the national grid, as hon. Members have said?

[Andrew Bowie]

As I said, we are working with the solar industry now to develop proposals and give guidance and advice on how best to support local communities and deliver community benefits, so that communities that host these projects on behalf of the wider nation see a benefit. We are not closing our minds to any suggestions that might benefit such communities moving forward. This is a wholesale change in how we deliver energy across the UK, so we should be open to thinking about how we do that in the most appropriate fashion.

I assure right hon. and hon. Members that we are deploying rooftop solar. It remains a key priority for the Government, and continues to be one of the most popular and easily deployed renewable energy sources. We want to see more rooftop solar on industrial and commercial properties, such as warehouses, factories and buildings, to make maximum usage of the available surfaces for business as well as for the environmental and climate benefits. There will be more on that in the solar road map, which will be published in the next few months.

The issue of forced labour was raised. I addressed that in the Chamber just the other evening in response to a debate that was secured by my hon. Friend the Member for Rutland and Melton (Alicia Kearns). However, as it has been brought up again, I reassure Members that the Government are committed to tackling the issue of Uyghur forced labour in supply chains, including in the mining used for the manufacture of solar panels, and are taking robust action. Over the past two years, we have introduced new guidance on the risks of doing business in Xinjiang, introduced enhanced export controls and announced the introduction of financial penalties for those who fail to report as required under the Modern Slavery Act 2015. That followed our announcement in September 2020 of the package of changes to section 54 of the Modern Slavery Act. These changes will require large businesses and public bodies to report on specific areas within their modern slavery statements, including their due diligence processes in relation to modern slavery. There will be yet more on that within the solar road map on what the industry is doing to ensure that it is not reliant on forced labour anywhere in the world, but particularly in China.

We need an increase in ground-mounted solar alongside rooftop solar over the next decade to meet our energy security and net zero goals and to reduce the cost to consumers. But it is clear to me, the Secretary of State for Energy Security and Net Zero and His Majesty’s Government in general that this growth must be sustainable and enabled by a robust planning system that balances the wider benefits with the local impacts, that local communities are listened to and that food security concerns are addressed. That is what we are committing to do. I look forward to the publication of the solar road map, which is the result of the solar taskforce’s work. The document will set out deployment scenarios as well as key actions needed to address challenges in several priority areas, including the grid, rooftop supply chains and skills.

Once again, I thank my hon. Friend the Member for Sleaford and North Hykeham for bringing forward this debate—

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[Andrew Bowie]

I assure my hon. Friend that it is imminent. We will see the publication within the next few weeks.

[Dr Whitehead]

Spring or summer?

[Andrew Bowie]

Spring. I close by thanking my hon. Friend the Member for Sleaford and North Hykeham for bringing forward this important debate. The contributions have been enlightening and well informed, and show the passion with which Members, who I am proud to serve with, have for the local communities that they are honoured to represent in this place.

Oral Answers to Questions

Alan Whitehead Excerpts

Tuesday 16th April 2024 Commons Chamber

[Mr Speaker]

I call the shadow Minister.

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

I am sure the Secretary of State does not want a repeat on her watch of the failure of allocation round 5, when her Department managed to crash the offshore wind market. However, the industry is already warning that the parameters set for floating wind in the next round, AR6, could mean that only one sub-gigawatt project succeeds in getting contract for difference support: way off the Government’s recently trumpeted target of 5 GW of floating offshore by 2030. What steps is she taking to ensure that we do not see another failure and lose the global race for this emerging technology?

[Claire Coutinho]

If people want to ensure that we win the global race for renewable technology, they should, frankly, vote Conservative. Under the Conservatives, world-leading mechanisms have been introduced. The only country that has built more offshore wind capacity than the UK is China. We have an enormous and very successful track record, and continue to work with industry to ensure that AR6 will be a success.

[Dr Whitehead]

I am not sure that answer gives much reassurance to industry or this House. The truth is that uprating our port infrastructure is critical for deploying floating offshore wind and for reaching a zero carbon power system, but Government support is so inadequate that they are funding only two ports, dropping viable projects on the way, when, according to the floating offshore wind taskforce, to reach floating offshore wind ambitions we need infrastructure upgraded in at least 11 ports. Is this not another example of the Government failing to invest for the future and failing to back British industry?

[Claire Coutinho]

The only failure on renewable energy is the record Labour left when they were in power, when 7% of our electricity was generated from renewables whereas now that figure is 50%. On ports, not only have we got our world-leading freeport agenda but we have put forward projects such as FLOWMIS—the floating offshore wind manufacturing investment scheme—which is also helping to build our port infrastructure.

Cavity Wall Insulation

Alan Whitehead Excerpts

Tuesday 26th March 2024 Westminster Hall

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

I congratulate my hon. Friend the Member for Halifax (Holly Lynch) not only on securing this important debate but on making the detailed case that needs to be made about his scandal. The contributions of hon. Members from across the Chamber have added to her exemplary presentation, and have underlined the urgent need to do something about the issue. My hon. Friends the Members for Blackburn (Kate Hollern) and for Bradford East (Imran Hussain) and the hon. Members for Tiverton and Honiton (Richard Foord) and for Strangford (Jim Shannon) all made first-class contributions to the debate.

Cavity wall insulation has played, and will continue to play, a tremendous role in keeping people’s homes warm, reducing bills, fighting fuel poverty and uprating homes so that they are fit for a low-carbon future. Indeed, the vast majority of cavity wall insulations work perfectly well and do a good job for the homes where they are fitted. Of course, cavity wall insulations need to be done with the right materials, by the right people, in the right places and according to the right standards. I regret to say that there are circumstances—rather more in the early days than now—where those criteria were not adhered to, and problems arose with properties in which cavity wall insulation had been placed.

[Mrs Pauline Latham (in the Chair)]

Order. Could you face this way?

[Dr Whitehead]

I am sorry, Mrs Latham. One would think that, in a reasonable world, there should be speedy recognition that the problem has arisen and an equally speedy arrangement whereby the person in whose home the problem has arisen can get restitution for what has happened, in terms of both compensation and putting right what has gone wrong with the cavity wall insulation.

The Cavity Insulation Guarantee Agency came into being in 1995. As hon. Members have mentioned, it provides guarantees for cavity wall insulation. There have been 6 million since it was set up, over a 25-year period. The agency has a good record of ensuring that redress is carried out speedily and properly, where problems have arisen.

Unfortunately, not everybody knows about the agency or has had their wall insulations guaranteed through CIGA. Indeed, they might have had cavity wall insulation installed before guarantees came into place. The picture today is quite good regarding guarantees, but that does not remotely address the problem before us this afternoon. As my hon. Friend the Member for Halifax said, this is essentially a scandal on a scandal. It is the problem of cavity wall insulation going wrong in a certain area. When it does go wrong, several cases often appear in certain areas because the installer—

[Mrs Pauline Latham (in the Chair)]

Order. Could the Opposition spokesperson address the Chair?

[Dr Whitehead]

Yes, I am sorry; I keep doing that. The appearance of a number of problems in a particular area might relate to a particular company carrying out faulty insulations or using the wrong material, whereas in other areas no such events will occur.

Scandal one is that a relatively high number of deficient cavity wall insulation arrangements came to light in a particular part of the country. Scandal two is that a parasitic law firm decided to make a good living by zealously pursuing people it thought might conceivably have a claim for failed cavity wall insulation, and tried to push those people down a path to restitution in a wholly cynical and unacceptable manner. I am pleased to hear from my hon. Friend the Member for Halifax that the Solicitors Regulation Authority is investigating that company, SSB Law, but that does not address the fact that other firms also pursued that practice. Ironically, SSB Law took over a number of claims from a company that had pursued this model and gone bust in the process. One might say, therefore, that it is a scandal, upon a scandal, upon a scandal.

The way this worked is set out in a letter from CIGA to my hon. Friend the Member for Halifax, which describes how the model operated.

“Claims lead generator often unqualified promises large payouts if homeowner signs up to pursue a claim for failed cavity wall insulation.

Details passed to a RICS surveyor who does not visit the property but prepares a claim schedule based on detail provided by the lead generator.

Claim is handed to a claims solicitor”.

SSB Law, as mentioned, was a claims solicitor that took on a number of these cases, including those of another company operating this model, Pure Legal, having apparently been offered the opportunity to do so by the Solicitors Regulation Authority itself.

The claims solicitor then sends a letter to the installer and

“informs them to put their insurer on notice and that the claim will be in the order of 60k for damages caused by poorly installed insulation—schedule of costs does not reflect the property and damage is often not evident.

Homeowners are actively discouraged from notifying the guarantee provider”

—in this instance, CIGA—

“and instead promised a large pay out.

Just before the claim goes to court, the Claims solicitor drops the compensation amount to just over 10k (They do this to encourage the installer or insurer to pay out and also so that they can still claim costs through the fast track legal route). Costs are typically around 70k at this point”.

That is the model, and it is a scandalous model. No one should be allowed to operate that kind of arrangement in this country, in this age. Solicitors’ companies are supposed to be protecting the interests of their clients and not just trying to make a living parasiting on the distress of homeowners dealing with cavity wall insulation problems. The Solicitors Regulation Authority has a substantial job to do in not just investigating this particular company, but hopefully broadening this out to investigate how solicitors are able to get away with this kind of arrangement, in this kind of way. As we have heard this afternoon, when that arrangement does not work out very well, they go bust and leave all those householders facing those huge bills.

Are the Government able to pursue any form of intervention to assist householders protecting themselves from the claims coming back against them? In a number of instances, those claims are from the installers that have basically been attacked by these particular law firms. The installers have defended themselves, but then the law firms went bust. They have put in a lot of money, and naturally they want some of it back. It is an almighty mess as to who is really responsible for all this, although we know that overwhelmingly the responsibility lies with the dodgy law firms that have pursued this kind of practice and given false guarantees and false promises to householders. Perhaps the Ministry of Justice could look at what sort of practices make this sort of arrangement possible.

We all want to see confidence in cavity wall insulation for future programmes, although we differ among ourselves on the extent of those programmes. The hon. Member for Tiverton and Honiton suggested that it was the Liberal Democrats, in alliance with the Government, that really pursued cavity wall insulation. That was true, but it was based on the programmes of the previous Labour Government, under the cert and assess programmes that carried on until about 2012 and 2013. That produced an enormous number of generally very good cavity wall insulation programmes, but it has crashed since that date. Certainly, the Opposition hope to revive those publicly funded and sorted-out retrofit measures under a future Labour Government.

I think there is agreement on all sides that we want the general public to see that cavity wall insulation is a good thing for their homes and for them, and indeed will be a good service for the nation in making our homes warmer and more liveable. It is important that everybody has confidence that that system is going to work as well as it should and, if it does not work as well as it should, that there is proper redress. I ask the Minister to pursue seriously whatever can be done to seek additional redress for the householders who find themselves in this difficult situation. I also ask the Minister —perhaps working in conjunction with the existing guarantee agencies—to ensure that, for the future, the public have the best level of protection they can get when cavity wall insulation goes wrong: a guarantee that, under most circumstances, people undertaking cavity wall insulation can rest easy that their cavity wall insulation should work rightly for them, but that they need not worry if it does not because help will be at hand to put it right.

Draft Strategy and Policy Statement for Energy Policy in Great Britain

Alan Whitehead Excerpts

Tuesday 19th March 2024 General Committees

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

The power to designate a strategy and policy statement, as the Minister has set out, has been in place since the passing of the Energy Act 2013. That Act envisaged, among other things, that a strategy and policy statement would be an essential tool in aligning the actions of Government and of Government agencies and bodies, such as Ofgem, and ensuring that they were marching in lockstep as far as the development of strategic priorities was concerned. Indeed, this strategy and policy statement is very important in making sure that, with the designation of a net zero mandate for Ofgem, which took place in the recent Energy Act 2023, the alignment is complete with the issue of the strategy and policy statement. However, I point out that these strategy and policy statements are supposed to last for five years and to be reviewed at the end of a five-year period—or, significantly, should an election take place in the meantime.

The strategy and policy statement power, therefore, has not been used since the introduction of the 2013 Act. We should have had one almost immediately after the Act, and we should be revising the second one now. The fact that one is not in place is a theme of this Government because we other publications have been long delayed, including a new national policy statement for energy and a national policy statement for nuclear.

The document necessarily acts at a very high level, and there is a lot that we agree with, particularly the strategic overview and priority that has been put forward with this policy statement. As I have mentioned, having an SPS is a great improvement on not having one in this area. However, it is clear that the document will not stand for five years, which is the time at which the legislation says it should be reviewed. For one, there is an election coming this year. While there are several points of substance on which Labour plans would differ from the Government’s, the most important is our commitment to clean power by 2030, which is a clear differentiation from the strategic view set out in the document. Certainly, should there be an election shortly and should Labour be fortunate enough to win, we will revise the policy statement at a very early stage in the next Labour Government.

[Alan Brown]

If Labour gets in and if the policy document is revised, how will it be funded to get to zero carbon by 2030? Surely, that was a key component of the £28 billion a year pledge, which has now been scrapped. The two are surely incompatible now.

[Dr Whitehead]

I am tempted by the hon. Member to go down the lengthy path of discussing how the move to clean power by 2030 will be financed. I can assure him that that is fully set out and sorted out as far as Labour policy statements are concerned. However, he makes the important point that a number of things that Government have done recently run against not only the idea of clean power by 2030 but their own strategy and policy statement as it is now being put forward —for example, putting back the mandate for the end of the sale of internal combustion engine vehicles to 2035 when it was originally 2030.

Regardless of the results of an election, I do not think the document can stand for five years because it leaves so much undefined. The Minister has mentioned the issue of the National Energy System Operator and its relationship to Ofgem, but that is completely undefined in the document because that has not yet been worked out. NESO itself is not yet established and, indeed, the strategy and policy statement makes frequent reference to unpublished interim steps, such as an interim strategic spatial energy plan, which we think is a good thing and long overdue. As NESO is established in the various plans that the SPS hints are in place, we need a much more substantive update to the policy statement, including what is to happen on the question of regional energy system planners, which the document mentions but does not discuss further, as far as their operation and organisation are concerned.

Can the Minister tell us when she hopes to issue an update to the strategy and policy statement? Perhaps, when we are clearer about what the National Energy System Operator will actually do and how its relation to Ofgem will pan out, she will be able to say to the House that a revision of the strategy statement will be forthcoming and will put things into place in a much clearer way regarding the new arrangement for energy systems.

There are also one or two drafting errors in the statement that I will point out. Twice, the document refers to plans that are due for completion in 2023. We are now in 2024, and it is not that the plans have not been completed or addressed; it is just that the document is referring to, I assume, something that has not been updated in terms of where we are now. It would be a shame if the document went out with factually inaccurate material on dates.

There are other commitments for 2024, on which we are not convinced the Government are making sufficient progress and which are mentioned in the document as if they were. One example is developing a plan for long-duration energy storage. Indeed, other areas bear little relationship to reality; for example, the Government reaffirm their commitment to the 2030 fuel poverty target, but National Energy Action says that they will miss it by over 90%. The SPS also talks about the roll-out of smart meters, but as we all know, that too is well off-track. I would question the value of a strategic overview that does not take proper account of the real state of the policy landscape it is summarising.

This strategy and policy statement is clearly going to need to be revised in the near future. However, as I said, it is better than having no statement at all, and it provides for some useful new processes such as Ofgem reporting annually on how it is meeting the requirement to have regard to the Government’s strategic objectives. For that reason, and because of the fact that we finally have a strategic policy statement, we will not be voting against the measure this morning.

Gas-fired Power Stations

Alan Whitehead Excerpts

Wednesday 13th March 2024 Commons Chamber

[Mr Speaker]

I call the shadow Minister.

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

I am little puzzled about what all this is about. The Committee on Climate Change and all credible energy experts have said that we will need a small residual of unabated gas in the system for the medium term, and that is consistent with a fully decarbonised power system. No one disputes that, and it is barely worth an announcement. We should extend the lives of existing plants to meet that need. If new-build plants are needed in the short term to replace some of those retiring gas-fired power stations, there is no disagreement, provided they are capable of converting to hydrogen or carbon capture, as the Government say they must be.

However, that is not what the Secretary of State said yesterday at the Chatham House meeting. The Government’s own analysis published yesterday shows that 24 GW of existing gas capacity could be maintained via life extension and refurbishment, and 9 GW of new capacity is already in the baseline under existing capacity market arrangements. That is an uncontroversial position and analysis, and hardly something worth making a huge fuss about. But again, that was not what the Secretary of State talked about at yesterday’s Chatham House conference.

Given that analysis, could the Minister enlighten us with the number of new gas plants that the Government are hoping to build, given there is no mention of that in the 1,500 pages of documents that were published yesterday? That is an important point, because it appears to show the Government’s intention to go beyond what is already in the analysis and build a large number of new gas-fired power stations for the future.

There is a great deal in the review of electricity market arrangements published yesterday that is worth discussing, not least the Government’s glaring failure to bring forward low-carbon flexible technologies such as long-duration storage, which everyone knows we will need. It is a shame that the Minister has not properly addressed that. Will he give us clarity on whether this is a meaningless announcement within existing policy arrangements? Or, as has been said, is it an attempt to conjure a culture war out of climate and energy policy, with announcements with no substance or value that show that the Government have no serious plan for energy in our country?

[Graham Stuart]

The hon. Gentleman asked whether new power plants will be hydrogen or carbon capture, utilisation and storage ready; we will legislate to make that a requirement. He asked how much there will be; around 5 GW, but that is dependent on so many interrelated things, such as the growth of low-carbon and flexible storage, which, as he referred to we are a world leader in developing and supporting both in innovation and through the capacity market. He suggested that none of that was clear yesterday, but it was made crystal clear.

We are a world leader, having announced £20 billion for CCUS. The hon. Gentleman will remember, because he has been around a long time, that in 2003 the then Labour Government said that carbon capture, utilisation and storage was urgent and that there was no route to 2050 without it, but then they proceeded to do nothing about it. This Government are getting on with it. We are putting our money where our mouth is and developing technologies such as carbon capture and hydrogen, in a way that the Labour Government failed to do—as they did with renewables, to boot. All they do is talk about climate, but the truth is that the greatest climate risk to this country is if the right hon. Member for Doncaster North (Edward Miliband) destroys the market and starts some state-run quango, which will wreck the renewables growth that we have seen.

Draft Energy Bills Discount Scheme (Amendment) Regulations 2024

Alan Whitehead Excerpts

Tuesday 5th March 2024 General Committees

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

As the Minister has explained, the draft regulations make a lot of sense administratively and in respect of future costs to the Government. The explanatory memorandum sets out the cost of keeping units in place essentially forever, because there was not originally a cut-off date for applying for the scheme or for being liable for the consequences of registration. The explanatory memorandum mentions a sum getting on for £6 million as the administrative consequences of not doing something. From that point of view, the draft regulations make a lot of sense.

From the point of view of consumers, and indeed of justice, the draft regulations make rather less sense. Does the Minister have any thoughts on that? Is there anything she would consider doing to mitigate the negative consequences? I address that question to her because I know that as the scheme has progressed she has always been keen for customers to get the full discounts to which they are entitled. She and I have discussed methods of ensuring that that happens. I completely exempt her from my criticisms of the problems that we are likely to see, because I know that her intentions are absolutely in the right place.

Let us go back to the introduction during the energy crisis of the methods by which discounts could be applied. As the Minister says, there were two schemes: the energy bills discount scheme for commercial and business interests, and the energy price guarantee for domestic customers. The energy price guarantee went straight to customers, because there was a direct relationship between the issuer and the receiver of the discount. However, although a substantial majority of customers were in that position, some domestic customers were not in a position to receive any direct discounts, because, as far as the scheme was concerned, they were not direct consumers of energy. They were people in park homes, people in shared properties in which a landlord had responsibility for the energy supply, or—as in this case—customers of a heat network. It was the intermediary, the heat network operator, that took the discount on the commercial energy bills discount scheme, not the customers themselves.

What happened after that was established as part of the overall discount scheme. I feel that some of the thinking on who got what and through which instrument was not pursued fully when the schemes first came in. Because of the speed at which they came in, the problem of pass-through to customers who would not receive the discount directly was not properly investigated in the first instance.

In an attempt to rectify that, a number of statutory instruments then made provision that, although the heat network operators would get the discount through the EBDS, they were essentially required to pass through the discount to customers. Indeed, because they had to apply for the discount, they were required to register to apply. The discount would not automatically come to them, as was the case in some other aspects of the energy bills discount scheme; they were effectively required to apply and register that they had applied.

[The Chair]

Order. I am following the Opposition spokesman’s comments very carefully. He is making an argument that the two schemes to which he has referred are related. He is entitled to make that argument, but strictly speaking it is not within the scope of the statutory instrument before the Committee. He has made his point clearly, but if he could move on to issues within scope of the statutory instrument, that would be helpful.

[Dr Whitehead]

I completely accept your guidance, Sir George, but I thought it essential for the elucidation of hon. Members to state the position as it actually was, as the discount scheme progressed.

The draft regulations relate specifically to combined heat and power companies required to give a discount to customers. When the Joint Committee on Statutory Instruments considered the original statutory instrument, it was concerned that it imposed an obligation on intermediaries to provide certain information to end users without a mechanism for enforcing it. There was no sanction on those bodies—in this case, energy networks as the intermediaries—to ensure that they would face legal consequences for failing to do so. In other words, if they did not apply to receive a discount or they did not pass it on to their customers, nothing would happen to them.

When I made that point in a debate at the time, the Government said, “We don’t think it necessary to have any kind of sanction in place, because most people will comply, on the basis that we have published a piece of secondary legislation that they will comply with.” However, it is apparent from the draft regulations that in many instances those people have not complied with the requirements. They either did not apply for the discount in the first place or have not passed it on to their customers; we do not know which, because there was never a sanction.

Now, at the end of the scheme, we are saying—perfectly reasonably for administrative purposes—that we should no longer require those people who have not applied to receive a discount to do so in future. As the Minister said, there is a brief period after 31 March when they will be able to do so, but after that it will stop. Effectively, the potentially large number of companies and organisations that have not applied the discount or passed it on will just get away with it. They will just continue with their business and have no liability after that to do anything for their customers. They will probably never know just how many of them have been disadvantaged as a result.

The explanatory memorandum indicates a range of customers and an amount of money of which customers may have been deprived, one way or another. It states:

“Based on data from existing applications, we estimate the value of lost discounts could be up to £1,200 per customer. This lost benefit would disproportionately affect disadvantaged groups—namely the elderly and ethnic minorities—who are significantly more likely to be on a Heat Network.”

There is a essentially a mini-impact assessment in the previous paragraph, which states that between zero and 3,000 quality heat suppliers

“have not applied for the scheme, representing £0-66m of support.”

That is the effect on customers.

The Minister has said that civil sanctions will continue to apply. It may well be that in many instances customers can still take their supplier to court if they think that the supplier has received a discount but it has not been passed through. However, it is very difficult for customers even to know that, and they certainly will not know it after the scheme comes to an end.

According to the impact assessment, there are a large number of customers who should have received a discount of £1,200 but have not, either because the company did not apply for the scheme or because it applied but did not pass anything through. Again, we do not know which is which, because we have no records. There were no sanctions relating to who was doing what with the scheme.

Although the Opposition do not intend to vote against the regulations today, I want to register substantial disquiet about how we have ended up here with the scheme. I know that the Minister is very keen on ensuring that everyone gets their discount. Are there any methods of reaching a more satisfactory ending, other than offering people the option of going to the energy ombudsman or the courts to get their discount? Most people would rather fly to the moon. I would value the Minister’s thoughts.

Oral Answers to Questions

Alan Whitehead Excerpts

Tuesday 27th February 2024 Commons Chamber

[Mr Speaker]

I call the shadow Minister.

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

Contrary to propaganda from the Conservative side, the last Labour Government handed over a detailed nuclear development plan that ran up to 2025, with 10 sites identified for nuclear development, early discussions with nuclear developers, and a plan for a deep and secure nuclear repository. Since then, over 14 years, not one electron of new nuclear power has been produced, Hinkley C is now at risk of further delays and no progress at all has been made on the establishment of a secure storage site for nuclear waste. What assurances can the Minister give that lessons have been learned from that frankly fairly lamentable stewardship of the previous plan, and that the latest plan is set up to deliver?

[Andrew Bowie]

I have never been accused of propagandising before. It is a matter of pride on the Conservative Benches that every single nuclear project that has ever been completed in this country has been completed under a Conservative Government—it does not look as though that is likely to change any time soon, despite the protestations and near-Damascene conversion of Labour Front Benchers on nuclear over the past few years. We are carrying on with our nuclear revival; we have set out our nuclear road map; and we are encouraging, enthusing and investing in our civil nuclear sector. I am very excited about the progress that we have made and what will take place in the sector over the next few years.

Civil Nuclear Road Map

Alan Whitehead Excerpts

Thursday 22nd February 2024 Commons Chamber

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

First, I congratulate the hon. Member for Folkestone and Hythe (Damian Collins) on securing this timely debate via the Backbench Business process. That is extraordinarily efficient, since the road map was published only on 26 January. To get a parliamentary debate in less than a month of that publication is good going indeed, so congratulations go to him.

I need to say at the outset, for the elimination of any doubt, that the Opposition consider that nuclear will play a significant role in our low-carbon economy for the future, and we therefore support its development over the future period. However, the very substantial questions that have been raised this afternoon are about what that development will consist of, how it will be organised, and what sites may or may not be available for its development, as well as a number of related issues.

It is good that we now have a nuclear road map, but I think it is fair to draw attention, as other hon. Members have done—the Chair of the Environmental Audit Committee, the right hon. Member for Ludlow (Philip Dunne), and the hon. Member for Folkestone and Hythe—to a number of the issues in the overall headline in the nuclear road map, which is that there should be a 24 GW target for nuclear development out to 2050.

By the way, contrary to the suggestion that the previous Labour Government did nothing on nuclear, in 2009 there was a nuclear national policy statement that set out the sites that should be made available for new nuclear and started the process of discussing those sites with developers. The problem is that since then, yes, there was a revised EN-6 national policy statement, but not a single electron of nuclear power has appeared between 2009 and the present. We are talking about a target for the future in the context of serious delays as far as nuclear is concerned.

Yes, we must talk about that target and what the energy mix will consist of for the future, but we must also talk about whether those things will materialise in the way envisaged, and about how we can overcome the substantial delays that seem to be baked in to the process of nuclear development. It is not clear whether that target will largely be filled by gigawatt-sized plants or by small modular reactors and advanced modular reactors. It is not clear what consideration should or will be given to the mix of nuclear, as it will sit in what will be a very different power mix from hitherto. What planning will be undertaken to ensure that such a mix will be optimal, given the need to have power systems that can act compatibly with other forms of power?

The road map commits to at least one gigawatt power station in addition to those under way at the moment, but as we have heard this afternoon, substantial delays in existing large nuclear plants are the order of the day. Hinkley is now 10 years delayed, Sizewell C does not yet have financial closure, and it does not look as though there will be any power from that until the early 2030s. The good news is that Sizewell B is likely to have a 20-year extension on its life. It is currently due to close in 2035, so that will be effectively the equivalent of a new large power station generating in the late 2030s onwards.

So far the Government have put £2.5 billion into Sizewell C and not one stone has yet been laid on another. I imagine there would be a need in principle for similar sums to be laid before future gigawatt nuclear power plants, if that is what the Government envisage for their 24-gigawatt strategy in the main. It is not indicated on the road map whether the Government are able or prepared to do that. Indeed, the money that has already been put into Sizewell was not planned.

On the other hand, while we are having a competition to determine what support, if any, should be given to the winner of the competition for SMR developments, an agreement in principle has been reached to build four SMRs on Teesside at no cost to the public purse, by the American company Westinghouse Electric Company, and Community Nuclear Power. It at least appears—competition or no competition—that there may be circumstances in which, at no cost to the public purse, nuclear power in the shape of SMRs can come forward. That is another reason why the competition needs to go ahead as quickly as possible, to get what we are doing in the UK as up to speed as possible with what people are doing elsewhere in the world.

What the agreement that has been reached in Teesside currently lacks is a clear route forward about sites. That is a proper subject for another delayed action, which, as mentioned in the road map, is the updating of strategic planning statements concerning nuclear. The last such statement, a revised EN-6, was published and adopted in 2011, and it identified, as the 2009 document had done, a number of specific sites for gigawatt power stations. However, it runs only until 2025. Indeed, a number of those sites were initially earmarked for nuclear plants, but the consortia advancing them withdrew.

We are now in a different age. The priority now is surely to identify sites, or at least to put in place clear conditions under which SMRs in particular might go ahead. I see from the road map that an intention for the development of an updated EN-7 appears to be that it will establish clear criteria for such sites. That is of course delayed, as with so many things related to nuclear planning and action. It is not with us at the moment, but it should be. I hope the Minister will give us a firm indication of when it will be published and adopted by this House.

An area where we have had delays and prevarication in the past is nuclear fuels. I am pleased to see in the road map a firm commitment to support the development of new forms of nuclear fuel and support for the production of existing fuel, such as high-assay low-enriched uranium, which at present is available only from Russian sources. Securing those fuel developments for Springfields nuclear fuels and establishing the funding that will make it work is an important piece of work under way early in the path of the road map, and I see the Minister has already laid a revised designation for Springfields in respect of enabling new uranium conversion facilities to be developed. All of that is a good piece of work by the Minister, and he should be applauded for it.

On the subject of delays, one of the most egregious is the absence of any progress on the identification and establishment of a nuclear repository. In the words of the road map:

“A process is well underway to identify a suitable site in which to develop a GDF”—

a geological disposal facility—

“that has suitable geology and the support of a local community.”

Those words vary little in content from the original White Paper in 2008 that stated that such a process was to get under way.

[Mark Tami]

I have been to Finland and seen its waste repository. It is not rocket science—it is not that difficult. We have put this off for years and years. The argument always used against the industry is, “There is no answer to the waste.” Well, there is an answer, and it is straight- forward. We just need to make that decision.

[Dr Whitehead]

My right hon. Friend has more or less written the rest of my speech for me. He is right that it is not rocket science; it is nuclear science. And it is pretty straightforward, essentially.

By the way, the White Paper under the previous Labour Government said in 2008 that the process should get under way rapidly, with community consent, and that a geological disposal facility should follow shortly after. Nothing has happened since then, but it is vital, as we contemplate the kind of programme that we are envisaging for nuclear and the decommissioning of all but one of our current nuclear fleet, that a storage facility gets under way. We need rather more in the road map than the sparse words right now, or we at least need a renewed specific pathway for a disposal facility to be published. I would be interested to hear from the Minister whether he is positively inclined towards that idea and whether he appreciates the urgency of making progress on a secure geological disposal facility.

Offshore Petroleum Licensing Bill

Alan Whitehead Excerpts

Committee of the whole House
Tuesday 20th February 2024 Commons Chamber

[The First Deputy Chairman of Ways and Means (Dame Rosie Winterton)]

Order. We are in Committee, so I remind Members that the Chair should be addressed by name or as “Chair” or “Madam Chair”, as Sir Alok Sharma did, and not as “Mr Deputy Speaker” or “Madam Deputy Speaker”.

Before I call the shadow Minister, I want to make it clear that I will be calling those who have amendments down first and I will then move on to others, going from side to side.

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

I would like to speak to our amendments 17, 18, 19 and 20, to comment on other amendments before us today and then to place all this into the context of the Bill as a whole by way of what will effectively be a stand-part contribution. This Bill remains an ill-advised, pointless piece of political posturing—

[Barry Gardiner (Brent North) (Lab)]

Don’t pull any punches!

[Dr Whitehead]

That was the mild version.

As the right hon. Member for Reading West (Sir Alok Sharma) has informed us, the Bill legislates for something that happens anyway. It will make no difference to bills, according to the Secretary of State. It will make no difference to our energy security, according to the former chair of BP. It will undermine the independence of the North Sea Transition Authority, according to the NSTA’s own board, and it and will reinforce the perception around the world that the UK is rowing back from climate action, according to the former COP President, the right hon. Member for Reading West. We regret that this insubstantial and damaging Bill has proceeded this far, and we will vote against it on Third Reading.

We do not need this one-clause Bill. We need instead a strategy for managing the North sea that supports our energy security, meets our climate commitments and secures the economic and jobs benefits of the transition to a low-carbon economy. We would have liked to debate a new clause setting out a new principal objective for the North Sea Transition Authority that would have put such a strategy into effect. However, because the Bill is so short and tightly drawn around the narrow issue of mandatory licensing rounds, amendments to put a more sensible strategy into place are regrettably not in order. We must therefore take the Bill on its own terms, even if that means treating it with significantly more respect than the drafters have treated this House with in presenting such a trivial and nakedly political proposal.

We have in the Bill at present two tests that should be passed if the Oil and Gas Authority is to proceed with mandatory licence issuance, and we know that the two tests cannot be failed. It is a fact that if properly drafted—we might come to that in a moment—liquefied natural gas will always be more greenhouse gas-intensive in production than UK natural gas and we will always be in a position where gas and oil produced in the UK and in a declining North sea field will not meet our total demand for gas and oil.

I learned in my first year at university—as I think the Minister did, because he did a similar degree to me—that a proposition that cannot be falsified cannot stand as a valid proposition. Here we have two completely non-valid propositions in the Bill. They are bogus and cynically contrived to give the appearance that something has to be achieved before mandatory licencing takes place. At the very least we need a test or tests that can be failed and that produce a proper level of judgment into the advisability of proceeding with such mandatory licences. The best test surely has to be whether such action is compatible with our climate change goals. The Government had previously introduced climate change compatibility tests into production generally. It is strange that these appear nowhere in the Bill.

[John Redwood]

The shadow Minister has said that getting more of our own gas out of the North sea would help our security of supply and reduce CO₂ because it would displace imported LNG, so why does he not support that proposition?

[Dr Whitehead]

The proposition before us today is for mandatory licence rounds in a declining North sea field, which would make no difference in the long term to the total amount of gas that we get out of the North sea, as everybody knows. It would instead put us firmly on the back foot as far as international climate change discussions are concerned. That is the key issue that we need to address this afternoon.

[David Duguid (Banff and Buchan) (Con)]

Following on from the question from my right hon. Friend the Member for Wokingham (John Redwood), is it therefore Labour’s position not to allow any new oil and gas licences in the future, if Labour were to come into power?

[Dr Whitehead]

It is Labour’s position that we do not wish to see new energy exploration licences issued for the future, but that does not mean that the North sea will not continue in production over a long period of time and provide a substantial amount of oil and gas for our domestic market.

Our first amendments, 17 and 18, would introduce a new test that would safeguard the legally binding commitments that the UK and all other nations made in the Paris agreement and have reaffirmed ever since. Every credible independent analysis—the Intergovernmental Panel on Climate Change, the International Energy Agency, the Climate Change Committee—shows that new exploration licences are not compatible with limiting warming and avoiding the worst of the devastating impact that climate change will have, and is having, around the world and here in the UK.

The test that we have put in amendments 17 and 18 is possible if we have achieved or are achieving our climate change goals internationally. Amendment 18 states:

“The climate change test is met in relation to a relevant year if the latest reports of the Intergovernmental Panel on Climate Change on the mitigation of climate change find that the granting of additional seaward area production licences is consistent with limiting warming to 1.5°C.”

No one who is serious about this can take that to mean that existing fields will not continue to produce for years to come—of course they will—but anyone who argues that business as usual and a few new licenses are the route to good, long-term jobs and energy security is frankly peddling a myth.

We must accelerate the transition to new opportunities for North sea workers in the low-carbon economy, including through carbon capture, usage and storage, through hydrogen and through floating offshore wind. We do not believe that tests are the best route to achieving that goal. We need a holistic strategy, but within the framework set out in this Bill, the climate change test we propose is the only way to achieve a policy that is consistent with being a responsible and leading actor on the world stage in the fight against climate change, with managing our existing North sea assets carefully and for the long-term, and with maximising the low-carbon economic potential of the North sea.

The other two amendments I will speak to highlight the extent to which the Bill fails even on the narrow terms it has set out. Amendments 19 and 20 would address the glaring deficiencies in the bogus carbon intensity test set out by the Government. Currently, the test compares UK gas production carbon emissions only against an aggregate of liquefied natural gas production emissions, ignoring pipeline-delivered gas, which makes up most of our imports, as the right hon. Member for Reading West reminded us. This amendment would correct that. As it stands, the test is designed to be impossible to fail, so it is barely worthy of the name. Including only LNG is a serious logical flaw. Before the Minister jumps to his feet, it is not true to say that every marginal unit of imported gas must be LNG. Indeed, we support substantial amounts of natural gas coming into the UK via the pipeline from Norway. The production of that gas is substantially cleaner than that of UK natural gas.

Apart from anything else, the Bill takes no account of the UK’s likely future gas demand profile. Demand for gas will decline as we rapidly decarbonise our power sector and electrify more and more of our economy. Indeed, this decline in demand, not just supply, is at the heart of a successful net zero transition.

Approving new exploration licences for fields that will take years to come online, on the assumption that the alternative must otherwise be LNG, without taking any account of future demand, is absurd. A fairer test would consider gas imports in the round.

[David Duguid]

I take on board the hon. Gentleman’s comment that, overall, 30% of our gas comes from Norway. Yes, that is the majority of our imports, but it is still 30% overall. Nobody in this House has authority over Norway’s future oil and gas prospects, but would he be in favour of the Norwegian Government exploring for new oil and gas to supply to us?

[Dr Whitehead]

No, in line with the IEA and the IPCC, I am not in favour of new exploration licences. The point is that, in a declining market, Norwegian supply will continue to be very substantial, even if no new exploration licences are granted in Norway.

The figure cited by the hon. Gentleman is almost right —the actual figure is 34%. The United Kingdom supplies 38% of its own gas, with the United States supplying 14%, Qatar supplying 9% and other countries supplying smaller amounts. Norway already occupies a very substantial position in our present gas supplies, and I am sure it will continue to do so.

[Caroline Lucas (Brighton, Pavilion) (Green)]

Does the hon. Gentleman agree that it might be useful to remind Conservative Members that, according to the UN production gap report, Governments are already planning for their existing developments to produce more than double the amount of fossil fuels in 2030 than is consistent with keeping global heating to 1.5°C or below? The idea that anyone can have vast new developments is not compatible with keeping below our climate target.

[Dr Whitehead]

The hon. Lady is absolutely right. New licences are an international issue. If we had new exploration licences around the world, we would simply produce far more oil and gas than is compatible with the 1.5° climate target. We should just keep it in the ground.

Finally, amendment 21 would go some way towards correcting another element of the carbon intensity test. As currently drafted—the Minister will want to listen to this bit—the test will not take account of methane emissions, which is a serious flaw. The whole case for comparing UK-based natural gas with LNG is based only on production emissions. The emission of methane at various stages of the production and transportation of LNG is, in aggregate, worse than the emissions of UK-produced and piped natural gas, but they are not carbon dioxide emissions, which is what the Bill says should be measured.

LNG’s potential carbon dioxide emissions upon burning are roughly the same as, or perhaps slightly greater than, the carbon dioxide emissions from UK natural gas. As the right hon. Member for Reading West said, that is elevated by the current UK practice of flaring surplus gas, which can be measured in carbon dioxide emissions.

Methane is a much more potent greenhouse gas than carbon dioxide over 20-year and 100-year timeframes. Its lifetime in the atmosphere is shorter than the lifetime of CO₂, but its impact is far more significant. The Climate Change Act 2008 is quite specific on how this should be measured. Section 93, which the Bill mentions but does not act on, states that

“greenhouse gas emissions…and removals of greenhouse gas from the atmosphere shall be measured or calculated in tonnes of carbon dioxide equivalent.”

Proposed new section 4ZB(1) of the Petroleum Act 1998 mentions the carbon intensity of natural gas, but proposed new subsection (3) defines “carbon intensity” as

“the carbon dioxide emissions attributable to its production”.

But carbon dioxide emissions in production are not the principal concern here, as the gas has not been burned at that point. Indeed, I can conceive of smart climate lawyers challenging the test’s validity on precisely that point. The Minister might therefore see amendment 21 as providing a vital lifeline to the integrity of his Bill. To that extent, the amendment might be seen as helpful, but I somehow doubt that he will take it up. To coin a phrase, “It’s the methane, stupid.” The Bill should say so.

Proposed new section 4ZB(4) already gives the Secretary of State the power to amend the carbon intensity test to include emissions other than carbon dioxide. Perhaps the Secretary of State or the Minister will shortly take that up to save the test. We can anticipate a fairly amusing statutory instrument debate when he tries to do that.

Amendment 21 would simply require the Government to produce a report analysing what the impact of that change will be. In the spirit of trying to improve a Bill that, by design, is fairly resistant to improvement, we welcome the amendments tabled by the right hon. Member for Reading West and the hon. Member for North Devon (Selaine Saxby).

The Climate Change Committee and the Environmental Audit Committee have called for a ban on routine flaring and venting, and such a ban is long overdue. A marine spatial prioritisation policy would help to organise and plan an optimal long-term, low-carbon economic strategy for the North sea.

There is clearly significant strength of feeling across the Committee that this is an inadequate Bill, and some of the proposed tests could undoubtedly make a bad Bill a little better, although some of those tests have internal problems. We would not want to vote against those tests, but the only comprehensive climate change and net zero compatible test is the one that we and, in principle, the hon. Member for Brighton, Pavilion (Caroline Lucas) have set out. It is the best available route, within a severely constrained process, to align this deeply flawed Bill with our essential energy security and climate change priorities.

[Selaine Saxby (North Devon) (Con)]

I rise to speak to new clause 2 on spatial prioritisation. The competing pressures on sea space mean there is essentially a spatial squeeze. I fully understand the Bill’s importance, as we all know that the oil and gas industry will have a key role as the UK transitions towards cleaner energy. The Bill will provide reassurance to the industry.

I am grateful that the Government have stated that each annual licensing round will take place only if key emissions tests are met, to support the transition to net zero. I thank the Minister and his team for their ongoing engagement on this issue but, as we seek to turn to renewables and clean energy, we need to ensure that we have the space and infrastructure to carry this forward, otherwise the energy transition will never come to fruition.

I brought up this issue directly with the Minister for Food, Farming and Fisheries, my right hon. Friend the Member for Sherwood (Mark Spencer), at the Environment, Food and Rural Affairs Committee, as my concerns extend beyond just oil and gas. I am also concerned about how floating offshore wind and fishing can cohabit the same ocean space, and I am also concerned about marine protected areas. There is clearly a balance to strike.

It was good to hear the Fisheries Minister’s response about cross-departmental work to ensure that our fishermen have a future in the light of our need to expand our renewable energy sources, but there is an opportunity in this Bill to ensure that we do not repeat these conversations as other energy sources compete for space in the precious waters around our coast. This will help not only the UK’s energy security but our push towards renewable energy, which will support our fishing fleets and retain a simultaneous focus on biodiversity and improving the condition of marine protected areas.

As a coastal MP, all these points are especially important to me. Being an eternal optimist, I think we can do all these things simultaneously if we can plan strategically where we have the opportunity.

--- Later in debate ---

[Dr Whitehead]

It is customary on Third Reading to start with thanks, and I would like to thank two groups of people. First, I thank the civil servants who held their noses to write this pile of rubbish for the House’s consideration. Secondly, I thank the Government for introducing the Bill, because as a number of people will know, it has led directly to the election of a new Labour Member of Parliament for Kingswood, following the resignation of the former Government climate tsar, who wrote the net zero report and had this to say about the Bill:

“This bill would in effect allow more frequent new oil and gas licences and the increased production of new fossil fuels in the North Sea… I can also no longer condone nor continue to support a government that is committed to a course of action that I know is wrong and will cause future harm.”

He then resigned, and the rest is history. Thank you, Minister, for increasing Labour’s representation in this Chamber by one seat. Although we hope to have a lot more seats in the very near future, that is progress.

The Minister has form on this. He was the Minister in the Adjournment debate on fracking some while ago—

[Graham Stuart]

It was not an Adjournment debate—get it right!

[Dr Whitehead]

Sorry; the Opposition day debate on fracking, which effectively brought down the Truss Government as a result of the various prevarications at the time. I thank the Minister for that.

What I do not thank the Minister for is the completely misleading and almost erroneous way in which he has characterised the future under the Bill. On licences, the Bill will do things that are already done, and it will not make any change. It will not suddenly increase confidence across the sector, because the sector knows that the Bill is just a piece of performative theatre; and it will do nothing—contrary to what the Minister and others have claimed—to cut energy bills, tackle the cost of living or improve our energy security.

At a time when people across this country have suffered two years of crushing energy costs and an inflationary crisis driven in large part by our significant exposure to gas prices—which, as we all know by now, are set internationally—the Bill offers no solutions. The Secretary of State herself admitted that it would not cut bills, and Lord Browne, the former chief executive officer of British Petroleum, said that it was

“not going to not make any difference”

to energy security. The board of the North Sea Transition Authority, which is responsible for giving out licences, unanimously agreed that the Bill is unnecessary and would challenge its independence. However, even though the Bill will achieve none of its stated aims, it is far from consequence-free.

[Graham Stuart]

Offshore Energies UK has said that if Labour’s policy was implemented, it could cost this country 42,000 jobs and £26 billion of economic value. Perhaps the shadow Minister will respond to that consequence.

[Dr Whitehead]

We are talking about what the Government are doing through this policy—that is what we are concentrating on today. I hope we will have another much wider debate about the effect that a comprehensive transition policy for the whole North sea field would have, with associated arrangements for the transition of investment, energy security and worker and job security, in the context of future jobs and future energy security. Many people in the industry have already said that that is exactly what we need to secure the future of the North sea. It is a declining basin; its output will not change greatly as a result of the measures that the Government are proposing. On the other hand, unless urgent action is taken to secure a holistic transition for the North sea, it certainly will not have the investment and the future that so many of us want to see. We need to put that overall consideration alongside some people’s shorter-term concerns about what will happen to the oil and gas industry right this minute.

[Douglas Ross]

This has been an extremely crucial issue in the north-east of Scotland, particularly this week. Does the shadow Minister think it is a small, short-term problem that 42,000 highly skilled workers in that area could lose their jobs under Labour’s plans?

[Dr Whitehead]

They will not. I have tried to make it very clear, against what is, frankly, misinformed scaremongering by Government Members, that under Labour’s plans the North sea will, of course, continue to produce efficiently and effectively over a very long period of time. We know that the North sea is a very mature field and is in decline, and all authorities have said that the Government’s proposals would make no difference to that overall pattern.

We are looking at how to make sure that the North sea continues to produce well and efficiently the oil and gas we will need for the future in declining amounts, while at the same time transforming that economy to produce new forms of energy for the future and maintaining security of production. That will be the big task for the future Labour Government—I am pleased that the hon. Member for Moray (Douglas Ross) is envisaging what the new Labour Government will shortly have to do. The long-term task in the North sea is not to pump every last drop of oil and gas it contains, but to give it a new lease of life. New industries can come into the North sea alongside the infrastructure that already exists, making it a new energy powerhouse for the UK in the future.

[Douglas Ross]

I cannot let that go unchallenged. This letter from the Aberdeen and Grampian chamber of commerce to the Leader of the Opposition—the leader of the Labour party in the UK—says that

“if North Sea production is to cease prematurely—a certain outcome of this”

Labour

“policy—then our entire energy transition is undermined.”

This has massive consequences, and I have to say that the reaction of the shadow Minister is quite telling.

--- Later in debate ---

[Dr Whitehead]

The hon. Member rather gives himself away by the first sentence he read out:

“if North Sea production is to cease”.

North sea production will not cease—

[Douglas Ross]

It is

“a certain outcome of this policy”.

[Dr Whitehead]

North sea production will not cease over a long period of time, and Labour is committed to making sure that that production continues at the appropriate level for the maturity of the North sea basin. That is something that all sensible people understand to be the case, although it is unfortunate that certain Conservative Members pretend it is not the case for their own political purposes.

[Sammy Wilson (East Antrim) (DUP)]

Will the hon. Gentleman give way?

[Dr Whitehead]

I will make some progress.

The Bill, as I have said, will achieve none of its stated aims, but it is far from consequence-free. The consequence is that it makes a mockery of our country’s commitments to take serious and responsible action on climate change. That is exactly the point the former right hon. Member for Kingswood, Chris Skidmore, made in his resignation letter to the Prime Minister. That point should not be a partisan point. Indeed, it has not been a partisan point, because a number of Members on all sides of the House, including a number of Conservative Members, can see the direction in which this short-sighted Prime Minister and Government are going, and want no part of it.

Some Members are trying to make changes to the Bill. As I have said, one has resigned, and a number are working hard to turn around the direction of this Government in resiling from our country’s climate change commitments—commitments they so recently signed up to, at the recent COP—on moving away from oil and gas. Regrettably, the Prime Minister and the Government, including this Minister, are not having any part of that. I am particularly disappointed that the Minister is not having any part of it, because of his long and honourable commitment to these matters on the international stage over such a long time.

The right hon. Member for Reading West (Sir Alok Sharma), the man who led this country’s climate negotiations at COP26 in Glasgow, has called the Bill “smoke and mirrors”, and a “distraction” that will

“reinforce the unfortunate perception of the UK’s rowing back from climate action”.—[Official Report, 22 January 2024; Vol. 744, c. 52.]

The right hon. Member for Maidenhead (Mrs May), the former Prime Minister—she signed this country’s net zero commitment into law and understood, as the current Prime Minister sadly does not, the value of cross-party consensus on the science of climate change—has said that she takes a different view from the Government on oil and gas licences, and that they will not provide for our energy security. Away from this Chamber, every credible independent expert has taken a dim view of the Bill. Lord Stern, one of the UK’s foremost experts on climate change, whose work has shaped how the world understands the costs of inaction, has called the Bill a “deeply damaging mistake”.

The reality is that the cost of living crisis we are in is to a large extent caused by our country’s deep exposure to the volatile international price of gas. The International Monetary Fund has said that this exposure meant the UK was harder hit by the crisis than any other western nation. Just today, the Energy and Climate Intelligence Unit has found that this country has spent an additional—in addition to normal spending—£75 billion on gas since the energy crisis began. Four extra days of gas supply by 2050 cannot possibly make the slightest bit of difference to this price. As I have highlighted, the Secretary of State herself conceded that point on the very day the Bill was announced.

The supposed arguments on energy security and jobs are similarly flimsy. The reality is that, as we have begun to discuss this afternoon, the North sea is an extremely mature and declining basin. Gas production will fall by 95% by 2050, even with new licences. The notion that this is a firm basis on which to build our energy security or protect jobs is clearly absurd. As I have outlined, we need a fair and balanced transition for North sea oil and gas workers that recognises the essential role they will continue to play in operating existing fields, which no one disputes will remain a vital part of our energy mix, and puts them at the heart of our clean energy future.

To safeguard the jobs, skills and livelihoods of the communities that have been the backbone of our energy system for decades, we need a Government with a proper industrial strategy to maximise the low-carbon economic potential of the North sea. Labour will create a national wealth fund to invest in low-carbon industries, it will launch a British jobs bonus to ensure that the supply chain benefits of renewable investment finally come to our shores, and it will create a new publicly owned energy company, GB Energy, headquartered in Scotland, to invest in home-grown clean energy and give us real energy independence. That is the answer that the country needs and that the communities who have served as the backbone of our energy systems for decades need. Political theatre, whether in Westminster or Holyrood, helps no one and does a disservice to the people looking to us for answers to the very real challenges we all face.

The final argument that the Government have made in favour of the Bill is that it is somehow, as we have begun to unwrap, a climate-positive piece of legislation. This argument rests on a series of partial and deliberately gameable tests, as we discussed in Committee, with skewed conditions that look only at a narrow band of emissions, ignoring methane for example; that look only at production emissions, ignoring the impact of actually burning the fuels we are extracting; and that look only at liquefied natural gas, ignoring the fact that the majority of our imports are pipeline-delivered. It includes no test whatsoever for oil, which makes up the majority of remaining reserves. That is why I have sympathy for the civil servants who wrote the Bill, who had to squeeze various things into it such as ignoring gas that was coming into pipeline, only having tests against liquefied gas and ignoring the methane emissions in the various versions of the arrangements in place for measuring emissions from production. I was very disappointed that the Minister gave no reaction at all this afternoon to that particular point on methane.

[Graham Stuart]

The data simply does not exist, as I think I set out. It does not exist and we cannot make a comparison if the data does not exist. We are world-leading in having that data; others do not have it. On the methane comparison, we are already below the internationally set goal; we have very low methane emissions in the North sea. On the comparison with LNG— which is the buffer fuel, which is why it is the true comparator, rather than Norwegian gas, which the hon. Gentleman is failing to admit—methane is emitted as it is shipped, so the methane story would make it even worse for LNG versus domestically produced fuel. Perhaps the hon. Gentleman would put that into his argument.

[Dr Whitehead]

I would not put it into my argument, but I am a little puzzled under those circumstances that the North Sea Transition Authority recently published a factsheet on precisely this point about the relative emissions of various contributors to gas and oil into the UK, which looked at the contribution from various countries and at the various emissions levels of those contributions, and set out how those contributions arise. I do not know whether the Minister is quite up to date with what his own North Sea Transition Authority is doing, but perhaps he ought to have a little look at that because he would see that actually the data is there. It does exist, and we can draw the sort of conclusions I drew this afternoon from it, and indeed from a number of other international data sources that are coming in.

The argument that the marginal unit of gas must always be LNG is simply not correct, because the Bill makes no provision whatsoever for the shape of UK gas demand at the point at which the gas is extracted and used. It effectively assumes that our national demand for gas will remain unchanged in perpetuity. When we are in a crisis caused by our reliance on fossil fuels and committed to a net zero transition, that assumption is patently wrong.

[Graham Stuart]

I hesitate to intervene again, but to suggest that this Bill has the assumption that our gas demand remains the same is absolute nonsense. Of course it is coming right down. We are on a net zero pathway. We are leading the world in that and our demand is falling fast; it is just that our production will fall even faster. The hon. Gentleman should not mislead the House, and I am sure he would not want to do so.

[Dr Whitehead]

I think I have already indicated that gas production is predicted to fall by 95% by 2050. The addition of one or two licences will not make any difference at all to that precipitous fall in practice, as it will be four days more of gas over the period. That is the basis for why we say that the Government’s commitment to net zero transition while producing large amounts of additional gas and oil is patently wrong. We should be sprinting towards clean energy. We should be investing in renewables, rather than banning them, as the Conservatives have done with onshore wind. We should be saving the country billions by moving to decarbonise power systems by 2030 and making far greater efforts to insulate homes and reduce gas demand there.

On climate change, on energy security, on jobs and on bills, this Bill has nothing to offer but false promises that frankly insult the public’s intelligence. To support this Bill, we would need to believe that we can double down on the causes of the cost of living crisis and still solve it; that we can somehow defy geology in the North sea and change the fundamental nature of international energy markets; and that we can ignore all the science and credible experts on climate change and still meet our commitments, including our commitment to transition away from fossil fuels made by the Minister at COP28 a few short months ago. It is clearly nonsense, but it is emblematic of a Government who have run out of ideas and run out of road—a Government who can see the many real challenges our country faces, but have no answer to them beyond confected political drama. In their misguided pursuit of a political dividing line, they have shrunk our country on the international stage, made us hypocrites in the eyes of the world and opened the door in this country to a new divisive politics on climate change that I sincerely believe the Ministers sitting opposite me today are not comfortable with, do not want as their legacy and will come to regret profoundly. This Bill will deliver nothing, but it threatens much. For that reason, I urge the House to vote against it.