Budget Resolutions
Albert Owen Excerpts(5 years, 11 months ago)
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Greg Clark
I will give way first to another west midlands MP, the hon. Member for Birmingham, Northfield (Richard Burden).
Greg Clark
The hon. Gentleman makes an important point. The next generation of diesel engines are much more environmentally friendly and fuel-efficient than their predecessors, so to replace an existing old-style engine with a new one is a step in the right direction, and I have been very clear, as I think he knows, that diesel will have a role to play as we transition to a 100% emissions-free world. That is captured in the “Road to Zero” strategy on which we consulted the industry, and I know that he was involved in those discussions.
Albert Owen
The Secretary of State talked about not losing our ideas. He will know that there are great ideas now in the marine energy technology sector, but they are at an early stage and companies need help and support before they can manufacture in this country. Will he have a word with the Chancellor so that we can have proper ring-fenced finance for this industry, as we had for wind energy under a Labour Government and for solar? Those sectors are now successful, but marine energy is lagging behind.
Greg Clark
We have an expanding innovation budget and we will have more to say about that in the weeks ahead, because our industrial strategy recognises the importance of seizing the opportunities that we have in clean growth, in which we are a world leader in many cases. I want to do with clean growth just what we are doing in the automotive sector, and marine and tidal energy is an important part of that.
Albert Owen (Ynys Môn) (Lab)
I agree with one point that the hon. Member for South Dorset (Richard Drax) made: it is very welcome that we have had extra expenditure on our armed forces. Of course the Chancellor of the Exchequer made that announcement with pride, but he was in the Government who took the money away in the first instance and made things very difficult for our armed forces over the last eight years.
The hon. Member for Wimbledon (Stephen Hammond) rightly highlighted his school, and said it was a very good comprehensive school. My school was the first comprehensive school in this country. Like many schools, it has suffered from cuts over the past few years, and it will, I think, be upset that not much money has gone into education. Certainly the Barnett formula will not help schools in Wales.
This was a political Budget and its main target audience was the different factions of the Conservative party. The slogan—and it is a slogan—that austerity has ended is cruel in many ways, because that is not the reality. Why should we believe this Government? It was a Conservative Government who told us they would end the deficit by 2015, yet under the figures given by the Chancellor on Monday the deficit will still be there in 2023-24. They have missed their target by a little over nine years, and even then the figure will be 0.8%.
There was a missed opportunity on low carbon and climate change. A decade after we in the House of Commons introduced the Climate Change Act, which I was very pleased to vote for, the Government had an opportunity to move forward. They have invested in some low carbon measures through the growth strategies, and I welcome the nuclear sector deal, but one area where investment is greatly lacking is marine and tidal technology. The Government are missing a trick there, because many companies now want to invest in this country, and are doing so in research and development, but the money simply is not there for them to go from prototypes to actual commercial delivery. The Government need to look at that, because many of these companies are international and they will go elsewhere and manufacture the prototypes in other countries, and Britain will lose out.
I urge the Minister to put pressure on this issue. I have discussed it with the Secretary of State for Business, Energy and Industrial Strategy, the right hon. Member for Tunbridge Wells (Greg Clark), and he does understand, but he needs to ring-fence a subsidy—and it is a subsidy—to help this new technology, as we did with wind. When Labour was in government the Conservatives criticised us for subsidising wind farms, yet they are now saying it is their flagship policy. That turnabout is most welcome, but we now need to concentrate on marine technology, because we have the resource, the research and development and the skills, and we need to develop them moving forward.
Finally, I want to talk about the north Wales growth bid announcement. Like my right hon. Friend the Member for Delyn (David Hanson), I cautiously welcome the £120 million for the 600,000-plus people of north Wales. It does not quite compare with the amount that appeared on the magic money tree for the Democratic Unionist party in Northern Ireland, which has half the population but got double the money. I wonder why that is, Madam Deputy Speaker. However, the money will be useful for the Welsh Government, for local government and for the business sector working with MPs to develop our economy, which has struggled over the past decade, and I very much welcome it.
Some of the bids involved include energy developments in north-west Wales, which is a good thing. We are building on the energy sector deals, which is good for the economy of north Wales, but we need to see the details. We need to see how much money is available now, so that the other areas of the Welsh Government can match-fund it to maximise the potential to make north Wales a centre of excellence in low carbon energy. That is something that I have campaigned for, alongside the Secretary of State for Business, Energy and Industrial Strategy. He was very good on this when he was in opposition.
We need to see more action from this Government, and I hope that the politics will be put to one side and that we will work together to develop low carbon energy so that we as a country can be a world leader. I hope that the region of north Wales can work with the regions of north-west England to develop and become more connected as a region of the United Kingdom, and that we can develop top-class jobs there, because that is what we need. We do not need slogans; we need real jobs. We do not want hollow remarks about ending austerity; we want actually to end it.
Robert Jenrick
I am happy to give the hon. Lady further details. We shall provide business rates retention, and we promised that in the spending review we shall consider whether it is possible to enhance the capital allowances. We have provided £14 million up front to ensure that two plots of land on the site are remediated so that jobs and investment can come in as soon as possible.
We have also announced new university-linked enterprise zones and a competition for more development corporations, starting with one we announced a month ago at Toton in the east midlands. We made an announcement about realising the potential of the Oxford-to-Cambridge arc of opportunity, with a new expressway and railway linking Oxford and Cambridge, and I am sure that the constituency of the hon. Member for Cambridge (Daniel Zeichner), with whom I have spoken about it on a number of occasions, will benefit.
In Coventry, we will support the automotive sector. We are in regular conversation with JLR about the issues described by the hon. Member for Coventry South (Mr Cunningham). In the Budget, we announced funding not only for Coventry as city of culture but, at the request of Mayor Andy Street, for a centre for autonomous vehicles in the city, which I hope will build on the great reputation of the automotive sector.
Robert Jenrick
With great respect, I shall not give way. I apologise, but there is not enough time now.
The Secretary of State said in his opening remarks that this is a Budget for skills, innovation and progress. We believe that this is an exciting time to be alive. We want to support innovation to drive the economy forward. We are investing £1.6 billion—
Albert Owen
On a point of order, Mr Deputy Speaker. The Minister said that he was responding to the debate, but three Members from north Wales raised the bid for the north Wales growth deal. The Chancellor only mentioned Wales twice in his Budget, although the Minister said that it was for the whole United Kingdom. Will he address some of the points made by some of the Members from Wales?
Mr Deputy Speaker (Sir Lindsay Hoyle)
I can assure you that that is not a point of order, but you have got it on the record.
Wylfa Nuclear Power Project: Taxpayer Liability for Safety
Albert Owen Excerpts(6 years, 2 months ago)
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Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
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Alan Brown (Kilmarnock and Loudoun) (SNP)
I beg to move,
That this House has considered taxpayer liability for safety at the Wylfa Nuclear power project.
It is a pleasure to serve under your chairmanship, Mr Robertson. I must say that when my alarm went off at 5.15 this morning, I was absolutely delighted to be getting up to travel here and deliver this speech. I am sure everyone else here in the Chamber is equally keen to be here, even though it is the last sitting day. I am equally sure that the power of my debating skills and the points I am going to raise will not only make the Minister ponder when she gives her response, but lead to changes in Government policy over the summer recess, so I look forward to some announcements when we come back.
To get to the main point of the debate, we must first look at the wider picture. We must look at the history and question why the Government are hellbent on new nuclear power stations and why the official Opposition appear to be in such unison with them. Nuclear energy was the future at one time; it was the low-carbon technology at a time when all other methods of generation apart from hydro were carbon based. However, while nuclear has been responsible for helping to keep the lights on for decades, keeping the lights on has come at a price.
We have a legacy of contamination, and the National Audit Office estimates that the clean-up will come in at £121 billion by 2020. The Magnox Swarf storage silo, in operation since 1964, contains waste sludge that is corrosive and radioactive, which is expected to pose a significant hazard until 2050. We have many more sites still to be decommissioned, which will lead to further increases in taxpayer burdens. According to Dr Paul Dorfman of the Energy Institute in London, the Nuclear Decommissioning Authority estimates that clean-up costs for the next 120 years will be in the region of £190 billion to £250 billion. That is some legacy to bequeath future generations.
On reflection, it is clear that the privatisation of the nuclear industry has proven to be another case of privatising the profits while renationalising the liabilities associated with the industry. We still do not know what to do with radioactive waste other than storage. We have a long-term problem looming because of the increasing volume of waste to be stored and managed, so why on earth do we want to create further liabilities with the proposed new power station at Wylfa?
We once thought asbestos was a wonderful heat-resistant product, but once we learned about the health risks associated with it, we stopped using it. Why, then, when we know the problems with nuclear, do we want to repeat the past mistakes associated with it? The UK Government tell us that we need more nuclear as a low-carbon means of energy generation, and Wylfa is one of eight sites proposed for a total programme of 13 new reactors. Yet renewables already provide a bigger proportion of electricity than nuclear within the UK, and in Scotland the divide between nuclear and renewables is even greater. While the nuclear process may be deemed to be low carbon, I suggest it is anything but green, given the toxic legacy I have already outlined.
Why do we want to commission more at exorbitant cost? The cliché is, “We need the baseload that nuclear provides,” but as far back as 2015, the chief executive of National Grid argued that the baseload concept was outdated. He added that large-scale nuclear reactors were also an outdated concept and that the future would be driven by
“demand side response and management”.
Albert Owen (Ynys Môn) (Lab)
I will come on to Wylfa Newydd if I catch your eye in a moment, Mr Robertson. I just wanted to say that the statement that the hon. Gentleman read out from the previous chief executive of National Grid has been put to bed by the new one. Indeed, even the previous chief executive said that we needed centrally located energy sources, or baseload, to continue. The hon. Gentleman has taken a very small quote from a very long statement from a previous National Grid chief executive. Current National Grid policy is certainly that nuclear is strong baseload.
Alan Brown
Clearly, we can both tear apart quotes, but the bottom line is that that is what the then chief executive of National Grid said. I was just going to come on to a quote from Dr Mark Diesendorf, of the University of New South Wales, in Australia. He stated that the assumption is
“that nuclear power is a reliable baseload supplier. In fact it’s no such thing. All nuclear power stations are subject to tripping out for safety reasons or technical faults. That means that a 3.2GW nuclear power station has to be matched by 3.2GW of expensive ‘spinning reserve’ that can be called in at a moment’s notice.”
He further states:
“The assumption that baseload power stations are necessary to provide a reliable supply of grid electricity has been disproven by both practical experience in electricity grids with high contributions from renewable energy, and by hourly computer simulations.”
Therefore, the argument that Wylfa and other stations are required to supply baseload is flawed.
Albert Owen (Ynys Môn) (Lab)
It is always a pleasure to serve under your chairmanship, Mr Robertson. On this last day of term, I welcome the opportunity to highlight the benefits to the economy of new nuclear power and low-cost carbon, and also to promote Wylfa Newydd, which is in my constituency. The hon. Member for Kilmarnock and Loudoun (Alan Brown) did not notify me that he would discuss it; I saw it on the Order Paper. I think it is custom to do so, but I will let it go for now, because I will have the opportunity to deal with many of the issues that he raises.
I recently wrote a booklet, called “Resetting the Energy Button”, for a number of reasons. Its purpose is to show how my constituency, the Isle of Anglesey, can play a major role in the move forward towards a low-carbon economy. Ynys Môn has a proud history of electricity generation. It has the natural resources, it has an experienced workforce and it very much mirrors the British Isles.
The Minister for Energy and Clean Growth (Claire Perry)
Will the hon. Gentleman be so kind as to send me a copy of his booklet? I am in need of some good holiday reading for the summer.
Albert Owen
Absolutely. In fact, I will also send one to the Chair, because I know that he is interested in this subject. Indeed, I should send some to the entire Scottish National party group in the House. I will do that over the summer. That is a promise.
Many energy developers have recognised the potential of the Isle of Anglesey to contribute to this major investment not just in new nuclear, but in marine energy and other technologies. You will know, Mr Robertson, from the time that we have spent together in the House that I am pro-renewables, pro-nuclear and pro-energy efficiency. I see no contradiction in that: I think that all three are needed if we are to meet our climate change goals and reduce emissions.
In the decade from 2001—when I entered the House—to 2011, the House of Commons was moving towards consensus on this issue. That was important. I accept that it was not universal, but there was a view that we needed a rich and diverse energy mix and that new nuclear was part of that mix. I was very proud to vote for the Bill that became the Climate Change Act 2008, because that was very pioneering of the UK; we were the first nation to introduce such a law. However, to achieve the objective, we need rich, diverse energy. We need base-load, and I will argue with the hon. Member for Kilmarnock and Loudoun that nuclear does provide base-load. He talks about offline, but this is factored in. Base-load is important, as is the intermittent status of renewables and, in particular, wind. He talks about figures, but I point out to him that we have had a very hot period over the last 28 days, and wind energy, offshore wind, contributed just 3% for that period. The rest came from base-load such as nuclear; the nuclear percentage went up in that period. I am therefore arguing convincingly for both—that we have the intermittent energy that we need in hot periods, but also, when we have cold periods, that we have the full load that is provided by nuclear and renewables. We need that balance.
New safe nuclear generation started in my constituency in 1963. Indeed, my father worked on the construction of the first Wylfa power station. The hon. Member for Kilmarnock and Loudoun had family who were in the nuclear industry: he told us in a previous debate that his brother-in-law was. Many families, across the United Kingdom, have benefited from the high-skilled, long-term employment opportunities that nuclear offers. The nuclear power station in my area was opened in 1971 and it produced up until the date of closure, which initially was 2010; that was extended to 2015. We are talking about 44 years of generation. I mention the jobs issue, because many of my peers at school left school and worked in the nuclear industry at Wylfa for all their working lives. Very few other industries can offer the longevity of employment and quality of jobs that nuclear brings; indeed, jobs for life are very rare.
Construction jobs are also important. In the move forward to Wylfa B or Wylfa Newydd, as it is correctly known now, we see an important uptake of skills for nuclear engineers and apprentices, and many people are training for the construction jobs—plastering, building, welding and so on. That is hugely important for areas on the periphery of the United Kingdom, such as at Wylfa in my constituency and, indeed, in Scotland. Scotland has benefited from nuclear over many years and still does today; £1 billion of gross value added comes from the nuclear sector—the two power stations. I believe—I will take an intervention if I am wrong on this—that the life of the two nuclear power stations has been extended by the SNP Government. Safe generation of nuclear energy is hugely important in Scotland, Wales and England. If we did not have it, we would be importing nuclear at this time of year either from England into Scotland or from France into the United Kingdom.
Alan Brown
The hon. Gentleman invited an intervention, and yes, he is correct: under the SNP Government, permission was given to extend the life of Hunterston B. Once an asset is there, if its life can be extended safely, we may as well do so. We will still have to deal with the toxic legacy at some point, but if we can make use of the asset in the meantime, we will do, so we are not absolutely blinkered.
Albert Owen
I understand what the hon. Gentleman says, but there is very little logic in that. If it is safe nuclear generation, it is safe nuclear generation. I accept that numerous previous Governments, of all colours, have not dealt with the legacy of nuclear waste. That is a fact, and we need to deal with it. But with new nuclear, the cost of decommissioning and of waste will be factored into the cost, which the hon. Gentleman did not explain; he did not take that out. The proper arithmetic of generation, of decommissioning and of waste will be part of the deal.
I do not know what the deal will be, but I do know that there will be some 850 jobs for the 60-year life of the new nuclear power station on Anglesey. That is huge for the local, regional, Welsh and UK economy. I also know that, at the peak, there will be 8,500 construction jobs. Again, that is a big figure. We have managed big projects in the past. I am thinking of the building of the nuclear power stations at Wylfa and Trawsfynydd and, indeed, the hydro at the Port Dinorwic storage facility. We have in north-west Wales a good legacy of these jobs, and I look forward to this project. Importantly, we are on the third round of apprentices. By the time Wylfa comes on board, there will be some 700 apprentices who have been trained in the area. Again, those are high-skilled jobs. They have had the opportunity not just to train in this country; many have been over to Japan and had the lifetime experiences that go with that.
The nuclear power station Wylfa Newydd has the support of Welsh Government. It has the support of the local council, which is Plaid Cymru led; it has the support of the Plaid Cymru Assembly Member; and it has my support. It has cross-party political support. That is important because of its potential.
The hon. Member for Kilmarnock and Loudoun is absolutely right to talk about the cost to the taxpayer of nuclear and other technologies. I have supported in the House of Commons a number of subsidies—I do not consider “subsidy” to be a dirty word—for offshore wind. When the cost was more than £100 per megawatt-hour and some people were arguing that we should not be doing it, and that the cost was too much, I argued that by investing at that stage we would be able to bring costs down, and that has happened. It has happened with onshore wind, with renewables obligation certificates—ROCs—and with solar, and it can and will happen with new nuclear as well. As I have said, I support this because we need that boost.
As the Minister will know, I argued—but was unsuccessful—for the Swansea Bay barrage, because the same principle applies to marine energy. We need to invest now for the future and the price will come down. We need a special, ring-fenced costing for marine energy and I will certainly write to the Minister, to the Secretary of State for Business, Energy and Industrial Strategy and to the Chancellor of the Exchequer to get that into the autumn Budget, because it is important; we are missing an opportunity with marine.
What I am establishing here is that I am pro-nuclear and pro-renewables and that my judgment has been to invest in them all. That means public—taxpayer—liability initially. We can look at oil, gas and electricity. They were 100% supported by the state when they were nationalised industries, and many new stations that came on board were given that subsidy when they were producing energy.
The statement by the Secretary of State in the House of Commons on 4 June was an important step forward for Wylfa Newydd, for the nuclear industry and for British industry in general. As I said, I do not know the details, but I do know that the statement confirmed that Wylfa Newydd would produce some 6% of electricity going forward. Electrification of surface transport is the big challenge for this country, and that is in addition to the built environment. We need that low-carbon extra resource, which I know Wylfa Newydd can produce.
I do not know the details, but it has been confirmed that the model will be different and, as we see from reading the “Nuclear Sector Deal”, the cost will be less than that of Hinkley. That is for sure, because when the first array of offshore wind was produced and the cost was much higher, we argued that it would come down. The nuclear sector deal asks for a 30% reduction in costs, and that is an agreement between industry and Government. It is important that Wylfa Newydd will come in at a much lower cost than Hinkley; we will learn the lessons of Hinkley. The Hitachi deal involves private money, and Government money from the UK—we do not know how much, and I doubt that the Minister will be able to help us at this stage, because of commercial sensitivity—and, importantly, Japanese agencies and their Government will be supporting it.
Alan Brown
I appreciate the hon. Gentleman saying that it is a different model. Does that mean that the costs cannot be compared directly to Hinkley? If the Government are taking on more liabilities and taking a stake in the project, we cannot just say, “Well, it costs less than Hinkley in terms of strike rate,” or whatever.
Albert Owen
No, the important thing to remember is that this is proven technology. The reactors that will be used have been produced—four in the world—on time and on budget, and they are effective. That is the difference with the Hinkley model, which has not been used before, and the risk is therefore a lot less. I have been to Japan and seen this technology in place. I know there have been incidents in Japan, but a delegation from Anglesey did go there and see it.
Sadly, this debate is about ideology. It is not about a low-carbon future, but purely the dogma of the SNP, which wants to close down nuclear per se. It is using the Wylfa argument to do that. The SNP is absolutely wrong. I want to see a balanced, diverse energy mix. I want to see the case for new nuclear, new renewables, jobs and skills, and research and development, so that the UK can become a leader in tackling climate change.
In conclusion, I wish hon. Members a happy summer recess. If they really want to find out about Wylfa, they should come to Anglesey. It is a great place to work, as I have indicated, for many people who work in the industry and are associated with the industry. I can assure hon. Members that it is also a great place to live, and it would also be a good place for them to visit. I am proud that Anglesey is ahead of the game in pioneering energy development.
Albert Owen
I was pleased that the Government launched the nuclear sector deal in Trawsfynydd. Trawsfynydd is a decommissioned station, but it has the infrastructure in place, and it has a community that understands and accepts nuclear energy for the future. I believe that putting the two together will benefit those communities and the whole of the UK.
Mr Sweeney
I thank my hon. Friend for that timely intervention. We have to think about this outside of these silos of energy generation. Although we want to decarbonise electricity in the UK, which is a laudable and vital aspiration, if we are to tackle the problem of climate change, it is critical that we recognise that nuclear has to be part of that mix.
Renewables, although we hope that they will eventually substitute all energy generation in the UK, are simply not mature enough, in terms of their reliability, to deliver output that is secure enough. The variability of wind is proving to be problematic. July’s wind energy is 40% lower compared with the same period last year. That is simply not sustainable enough for us to generate reliable energy sources in the UK. We have to look at other technologies, and nuclear presents an opportunity. We are not talking about rebuilding advanced gas-cooled reactors, which was a technology developed in the 1960s—it was advanced for the time, but is simply obsolete today. We are not talking about rebuilding that, with all the legacies of toxicity and problems with waste disposal that were mentioned, although I have to say that the advanced gas-cooled reactor fleet in the UK is a global benchmark for safety. I do not think there are any substantial risks associated with the advanced gas-cooled reactor fleet—it has had a tremendous safety record in the UK, which is a great triumph of British engineering.
We have to approach this with an industrial strategy; that is where we have to grip this. We are talking about shipbuilding and energy generation. All of those things can be linked to deliver a huge industrial and economic benefit for the UK.
Ronnie Cowan (Inverclyde) (SNP)
It is a pleasure to serve under your chairmanship today, Mr Robertson. It is less of a pleasure, however, to scrutinise the shoddy deal that taxpayers are being offered on the Wylfa power station. My hon. Friend the Member for Kilmarnock and Loudoun (Alan Brown) asked a serious question: why nuclear now that so many renewable energies are available? If we invested in them properly, we would see the renewable sector move into a new field, a new area of prosperity that would be more clean and bountiful, so why are we not investing in all the alternative clean energies as well? Why are we repeating the mistakes of the past? Asbestos was going to be a great new product, but now we live with the dangers and the costs it caused.
My hon. Friend stressed the line we were fed that without Hinkley coming on line in 2017 the lights will go out. The lights are on, the air conditioning is working overtime and Hinkley is still not contributing to that. The hon. Member for Ynys Môn (Albert Owen) said he had produced a booklet, which I really look forward to reading, that promotes nuclear and clean renewables. I hope it will be better than the booklet that was produced by the UK Government in the ’70s that said, “In case of nuclear attack, hide under a table.” [Laughter.] It said hide under a table or in the cupboard under the stairs. I remember reading it as a child and being pretty frightened.
Ronnie Cowan
Certainly. I have been waiting for the hon. Gentleman’s intervention.
Albert Owen
I was born and raised on Anglesey. My children were born and raised on Anglesey. Safe nuclear generation has been with us for 40-odd years. That is the reality. Silly scaremongering about atomic power and nuclear bombs does not do justice to the spokesman for the SNP.
Ronnie Cowan
As I was born and raised within a short distance of Hunterston power station, I understand that people worked on building that station, but we are talking about power that can cause so much destruction that we cannot possibly comprehend it. I agree we need a balance, which is why I support wind, wave, tidal, solar and hydro as part of the mix. I want us to progress so that we do not need nuclear as part of the mix. That is the ideal situation that we should work towards.
The hon. Gentleman correctly highlighted job creation, but obviously the jobs are where the investment is. He highlighted the lack of support for the Swansea tidal bay, which is an absolute travesty by this Government. It was a great opportunity to invest in renewable energy and see where that could take us. How many jobs would that create in Swansea and how many within the supply chain around it?
Ronnie Cowan
As I said, we are working towards a mixture of renewable energy. Ideally, if we could do away with the potential dangers, we should do so. One can say that about absolutely any industry. The coal mining industry was a dangerous business. We always worked to minimise the dangers, which is what we should do in the case of nuclear energy. If we can do it with nuclear as part of the mix, that is what we should work towards. We should invest in new measures to see if we can attain that. We should learn the lessons of Hinkley, a point made by the hon. Member for Ynys Môn. I hope we will learn the lessons of Fukushima as well.
The hon. Member for Glasgow North East (Mr Sweeney) said that nuclear was once seen as the future in the United Kingdom. He is right: it was once seen as the future. It was also seen as the future in Germany and Japan, but they have moved on. Unless we want to be left behind in areas of technology, we have to move on as well.
Albert Owen
On that point about Germany, an alliance or agreement with the Greens meant that they shut their nuclear capacity down, but now emissions have gone up as they import gas from Russia. They also import coal from Poland.
Ronnie Cowan
Obviously the Germans decided to bite the bullet while they heavily invest in renewable energy. If we do not do the same thing, in five or 10 years from now they will be way ahead of us and we will look back and ask why we did not do that.
We should be alarmed at a report in The Times that states that Hitachi will refuse to pay its fair share for nuclear accidents at Wylfa, with directors supposedly wanting
“safeguards that reduce or eliminate Hitachi’s financial responsibility for accidents at the plant”.
This is the same company that has been accused of lying to the US Government by concealing flaws in one of its nuclear power plants. It is a company in which a whistleblower said after the Fukushima disaster:
“When the stakes are raised to such a height, a company will not do what is safe and what is legal.”
It is a company that may be expected to pay only €1.3 billion in the event of a nuclear incident, even if such a disaster costs the UK hundreds of billions in damages. Pursuing nuclear energy is a folly, as my hon. Friend the Member for Kilmarnock and Loudoun has clearly outlined. Like so much of its ideology, Tory thinking is stuck in the 1950s. UK Government policy on energy seems to be no different.
Support for renewable energy has been slashed while taxpayers are expected to foot the bill for truly eye-watering levels of funding for nuclear stations such as Wylfa. That is irresponsible and avoidable. I was always under the impression that the Tories were the party of small government and of making prudent financial decisions, or so they like to tell us. Yet they saddle the taxpayer with more and more and more debt. Wylfa is just another example of a poorly negotiated deal for the taxpayers that the UK Government are supposed to represent. Of course, that is only considering the immediate financial and environmental impact. It goes without saying that the UK Government, by committing to Wylfa, are burdening future generations with the toxic legacy and cost of nuclear waste. I can think of few greater impositions of a Government on the rights of an individual than that.
I recently read with interest that survivors of the Fukushima disaster visited Wales to warn against the building of new nuclear reactors. In their first-hand testimony they outlined the devastating impact that the disaster had on local agriculture, with some people still unable to return to their homes seven years after the incident. Is a serious nuclear incident likely at Wylfa? Perhaps not, but having the station at all makes it a possibility. Why take that risk when the operator of the station may not even be liable for costs in the event of an accident? Why take that risk when the company in question was forced to pay a fine in response to allegations that it had lied to US regulators over safety concerns? Why take that risk when other sources of energy are available? We need urgent reassurances regarding the contract—the costs, liabilities and environmental impact.
Finally, are the UK Government serious about developing an energy policy fit for the 21st century and beyond? If so, they should abandon their nuclear obsession and look to the Scottish Government for world-leading ideas on the best transition for our nations into being responsible producers of energy.
Claire Perry
The hon. Gentleman and I know, because we form a holy trinity of debating on energy matters with my friend, the hon. Member for Southampton, Test (Dr Whitehead), that we all look forward to that 100% renewable future, but the problems of intermittency and storage will not be solved in the near term. We will not make ideological decisions that will put up costs and restrict energy supply if we do not have to—and we do not have to, because we have one of the best and most diverse energy mixes in the world.
Albert Owen
The figures that the Minister mentioned put gas at 50%. The big challenge is getting rid of gas boilers, which are in most houses. Moving to electricity will require a base-load from somewhere other than gas, which could well be nuclear.
Claire Perry
The hon. Gentleman is right, but we should start from where we are on energy policy. There is a role for further decarbonising gas to keep it in the mix, which is why I am keen to investigate, using excellent environmental standards, the potential contribution of onshore shale gas. [Interruption.] He is chuntering; he may not agree.
We have an independent regulator, the Office for Nuclear Regulation, which has scrutinised the proposed reactor design for Wylfa. The design has received design acceptance, which means that all regulators are satisfied that the reactor meets the regulatory expectations on safety, security and environmental protection at this stage of the process.
The hon. Member for Southampton, Test invited me to talk about the media reports—he is doing better than I am if he is reading the Japanese newspapers. I reassure him that any operator in the UK is required to obtain insurance to fulfil their financial responsibilities in the event of an accident, and as he referenced, international treaties, such as the Paris and Brussels conventions, provide the framework for the management of nuclear liability in the UK.
This deal will be no different. I emphasise that we are still going into negotiations and having conversations—we have not done the deal yet—but we are absolutely clear about the commitment to insurance for any form of accident. Not putting decommissioning liabilities on the taxpayer, as the hon. Member for Ynys Môn pointed out, is also part of those calculations. I agree with him that we did not think hard enough about that in the past; successive Governments had not worked out how to include those liabilities. We have learned, however, and we are moving forward with that.
Before the reactor can be built and operated, it will need a nuclear site licence. Wylfa will also always be subject to environmental permitting through Natural Resources Wales. A development consent order process that will run under the Planning Act 2008 will scrutinise the construction and operation proposals for the project.
The Energy Act 2008, passed by the Labour Government, introduced the funded decommissioning programme that moved the dial on who pays for decommissioning liabilities. It is now the case that all operators of new nuclear power stations are legally required to have secure financing arrangements in place to meet their full share of the costs of decommissioning and of waste management and disposal. We are absolutely committed to managing radioactive waste safely, responsibly and cost-effectively for the long term, but also to looking at other opportunities to reprocess some of that waste, as the hon. Member for Glasgow North East said. We will not repeat past mistakes where the taxpayer had to foot the bill for decommissioning.
There were some questions about liability in the event of an accident. I am happy to say that the last significant incident was the Windscale fire in 1957, and we are light years away from that plant in terms of nuclear operating technology and the safety regime that we operate. The Nuclear Installations Act 1965 makes the insurance that I mentioned a requirement, without which operators cannot operate. As the hon. Member for Southampton, Test mentioned, we also have legislation based on the Paris and Brussels conventions. If the total cost of claims ever exceeded €1.2 billion, a further €300 million would be provided by all contracting parties to the Brussels supplementary convention. Any further claims above that total would be met at Parliament’s discretion.
The only liability-based agreement with Hinkley Point relates to insurance failure, and the Government will provide an insurance product in the event that one cannot be obtained on the market. I am not in a position to comment on what might be the case with Wylfa, but I emphasise that the operator of the plant at Wylfa will have the same obligations as all other nuclear power stations and installations in the UK, and will be required to fulfil those obligations in the event of an incident.
Hon. Members have asked about what happens with the Brexit negotiations. Nuclear safety is and always will be our top priority. We will continue to apply the international standards on nuclear safety specified by the International Atomic Energy Agency irrespective of our future relationship with Euratom. I emphasise that we want a close association with Euratom: a new relationship that is broader and more comprehensive than any existing agreement between Euratom and a third country. The Nuclear Safeguards Act 2018 provides the reassurance of a backstop in the very unlikely event of any changes.
Alongside that, the UK is negotiating nuclear co-operation agreements to add to those already in place. On 4 May, we signed a bilateral NCA with the United States, and we have further arrangements with Japan, Canada and Australia that are also on track. Those relationships facilitate the sharing of best practice in terms of nuclear operations and liability management. As I said, we are considered to be a proud leader internationally in the field of nuclear safety and regulation.
Further investment will bring huge benefits through innovation. My right hon. Friend the Secretary of State travelled to Wales to launch the nuclear sector deal on 28 June, which was a fitting setting to underline how the nuclear industry provides economic opportunities across the UK, particularly in more remote areas, as we have heard from many hon. Members. The nuclear sector deal is worth more than £200 million. It focuses on innovation and skills, which we can then use to export, and by striking it we aim to ensure substantial cost reductions across the nuclear sector, to ensure that the sector can remain competitive with other low-carbon technologies, because I constantly have to balance all investments with the potential pressure on consumers’ bills.
Nuclear Sector Deal
Albert Owen Excerpts(6 years, 2 months ago)
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Several hon. Members rose—
Albert Owen (in the Chair)
Order. I will call the Front Benchers at 10.30 am. A number of Members wish to speak, so if they speak for seven minutes each we should get everyone in.
Several hon. Members rose—
Albert Owen (in the Chair)
Order. If remaining Back-Bench Members speak for no longer than six minutes, there should be time for everyone to speak who wishes to.
Mike Hill (Hartlepool) (Lab)
It is a pleasure to speak under your chairmanship, Mr Owen. I thank the hon. Member for Copeland (Trudy Harrison) for introducing the debate.
In the words of Lord Hutton of Furness, co-chairman of the Nuclear Industry Council, the UK’s civil nuclear sector
“is amongst the most advanced in the world. Our global leadership status has been earnt through a record across the entire nuclear lifecycle—from enrichment, through fuel production, generation, operation, new build, research and decommissioning—and increasingly enhanced by our world class regulatory system as the country’s new build programme takes shape.”
Hartlepool is part of that success story. Hartlepool power station, as part of the fleet of nuclear power stations that provides more than 20% of the UK’s electricity supply, has provided a low-carbon, reliable, clean energy product since 1983 and is a major provider of employment in the town.
The advanced gas-cooled reactor at Hartlepool currently provides electricity for more than 3% of the UK, with a net electrical output of 1,190 MW—enough to power 1.5 million homes. However, it is coming to the end of its life cycle, so I have written to the Secretary of State seeking support for Hartlepool as a site on which to develop new nuclear productivity around small modular reactor technology.
Hartlepool has the relevant licences, a skilled workforce, existing electricity transmission infrastructure and, more importantly, a community used to the presence of a nuclear generator. We are best placed to deliver the next generation of nuclear and meet the ambitions of the nuclear sector deal. The deal sets out pledges from both the Government and the nuclear industry for making cost reductions and initiatives to support the sector. SMRs are central to that vision, as they meet the increased demand for low-carbon solutions, produce clean, affordable energy and are much smaller than traditional nuclear reactors. Over their life cycle they could deliver £62 billion for the economy and create up to 40,000 jobs.
In an area where new energy solutions such as carbon capture and storage are being explored and developed through new technologies and industries, Hartlepool is in a prime situation to take our nuclear capability to the next level. That is why it is important that we are identified as a future site for SMRs as soon as possible. We have the potential and shared vision to develop the next generation of nuclear power and foster innovation and new technologies, and we are ready and willing to deliver this exciting agenda.
Albert Owen (in the Chair)
Because of the discipline of Back Benchers and the concise way in which they gave speeches, I can call the Front Benchers early. I ask them to leave some time for the sponsor of the debate to say a few words at the end.
Draft Warm Home Discount (Miscellaneous Amendments) Regulations 2018
Albert Owen Excerpts(6 years, 2 months ago)
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The Minister for Energy and Clean Growth (Claire Perry)
I beg to move,
That the Committee has considered the draft Warm Home Discount (Miscellaneous Amendments) Regulations 2018.
It is a pleasure to serve under your chairmanship, Mr Bailey, and it is nice to be in a cool room to discuss the warm home discount.
The regulations extend the warm home discount, or WHD, scheme until 2021, vitally ensuring that more than 2 million low-income and vulnerable customers receive a £140 rebate on their energy bills in winter, which is when they need it most. This is vital support, and a key policy for tackling fuel poverty. We are committed to tackling fuel poverty—it was a manifesto commitment—and this is part of our package.
The best long-term solution for reducing fuel poverty is to bring down the cost of heating a home by improving its energy efficiency. I have launched a number of interventions towards the aim of eliminating fuel poverty. In the clean growth strategy, we stated the aim of upgrading all fuel-poor homes to band C by 2030. In March of this year, I consulted on focusing all the energy company obligation funding, which is £640 million a year, on low-income and vulnerable households, away from a split between fuel poverty and carbon reduction. We have committed to the continuation of funding for domestic energy efficiency until 2028 at least at current levels, which is an investment of £6 billion over the next 10 years. We have also consulted on proposals to strengthen the existing minimum standard regulations in England and Wales, so that private landlords who own F and G-rated homes must make improvements before letting them. That is part of the wider, longer term aspiration that we set last year to improve as many homes as possible to band C by 2035. However, the energy-efficiency improvement of homes, although the best solution, takes time and some properties, particularly those that are harder to treat—often in rural areas such as the Devizes constituency I am so proud to represent—are left behind. That is why energy bill rebates through the warm home discount continue to play an important role.
This is all part of a package designed by the Government to be on the side of consumers, helping them to reduce their energy costs. We hope that there will be cross-party support for the Domestic Gas and Electricity Tariff (Price Cap) Bill when it comes back to the House in the next few days, as it will protect 11 million households currently on the highest energy tariffs.
The current scheme ensures that 1.2 million low-income pensioners in receipt of pension credit guarantee credit receive an automatic rebate of £140 on their energy bills and that more than 1 million more low-income and vulnerable households receive the rebate following an application to a participating energy supplier. In recognition of the success of the scheme, in the 2015 spending review we committed an annual £320 million to it, index-linked until 2021—rising with inflation. However, the regulations that underpin the scheme expired in April and therefore we are all gathered here today—I sound like I am at a wedding—to debate extending the scheme until 2021.
It is important to note that the extension to the regulations will not inhibit any future reform of the scheme. Colleagues will know that we intend to consult later this year on a number of changes from next year, including expanding the successful data-matching process that helps customers who may be eligible for the scheme to access it without having to go through a consumer application process, and also considering targeting the scheme more effectively by making use of the best possible data that the Government may collect and hold, obviously with the clients’ permission. To do that we need primary legislation and I am delighted that the data-sharing powers under the Digital Economy Act 2017 are expected to come into force before the summer recess.
The regulations we are debating today introduce a key change to the scheme. I have decided that more energy suppliers should be required to offer the warm home discount to customers so that from winter 2019[Official Report, 4 September 2018, Vol. 646, c. 2MC.] about 99% of the domestic market will be covered by obligated suppliers. Historically, a small supplier below the 250,000 customer account threshold did not have to offer the warm home discount, but we have decided that that threshold should drop to 150,000 customer accounts between 2019 and 2021. We want to step the threshold down gradually to give small suppliers, many of which are recent entrants to the energy market, time to put the right processes in place. The impact of the threshold will be reviewed, and if the scheme continues beyond 2021 we would expect it to be reduced further.
However, it is important to note that these regulations do not make significant changes to the scheme eligibility for winter 2018. This winter, I want to prioritise the safe and timely delivery of the rebates. That will mean that all eligible pensioners on pension credit guarantee credit would continue to receive a discount of £140 on their bills.
These regulations make only small changes to the eligibility for the broader group—the part of the scheme for which customers have to apply—because it will now include universal credit recipients, to reflect welfare changes. However, we believe there is more room for more innovation and industry-led projects to identify fuel-poor households and provide the most suitable package of advice and measures. So I have decided to increase the spending cap on industry initiatives from £30 million to £40 million. We are also expanding the list of activities allowed under the industry initiatives scheme to include, for example, the provision of financial assistance with energy bills for households that are not eligible under the core group or broader group for the warm home discount.
For example, those could be households that are not on benefits but are particularly at risk of fuel poverty. We all have such households in our constituencies, for example households that may have a member with a long-term illness or disability, or with other needs. The energy company will now have the opportunity to help. However, the total will be limited to £5 million overall and up to £140 per household, which is equivalent to the value of the rebate.
We want to ensure that these initiatives focus on support to reduce bills for the long term, not just as a one-off, for example through energy advice or energy debt assistance. The regulations will continue to reduce the cap on the spending allowed on debt write-off from £12 million to £10 million, and to continue to reduce it in future years, to £8 million in 2019-20 and to £6 million in 2020-21.
Albert Owen (Ynys Môn) (Lab)
The regulations cover England, Scotland and Wales. Has the Minister had consultations with Welsh Ministers, because the definition of “fuel poverty” in each of those countries is different? Also, may I ask about a very important issue, because we will be debating Northern Ireland tonight? Is there a comparable scheme in Northern Ireland? If there is, will it be administered under the budget that we will be debating this evening in the main Chamber?
Claire Perry
While I am finishing my speech, I will look to my officials to give me specific answers to those questions, but I thank the hon. Gentleman for the intervention and I am always very keen to work with what are a series of really innovative initiatives in the devolved Administrations. I have seen at first hand some of the best practice there and we can all share it and learn from it.
To conclude, the affirmative regulations that we are considering today will provide vital support for low-income and vulnerable customers to keep warm for the next three winters. The changes we propose will mean that more suppliers will be required to provide assistance to their eligible low-income customers, enabling suppliers to spend more on industry initiatives to provide innovative and long-term bill support to households in need. I commend the regulations to the Committee.
Energy Policy
Albert Owen Excerpts(6 years, 3 months ago)
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Greg Clark
I know that my hon. Friend has been a great champion for this technology and that he will be disappointed with the conclusion that has had to be reached. At the point of considering any proposal, we are required to examine the cost of alternatives, and the costs of low-carbon alternatives, including offshore wind and nuclear, were more competitive than those for this programme. It is not possible to specify a particular price, because such an assessment has to be made at the point of a decision. However, I have said very clearly that far from being against tidal technology, I am in favour of it, but a value-for-money case has to be presented. We will continue to be open to proposals that can demonstrate such a case.
Albert Owen (Ynys Môn) (Lab)
I am disappointed by today’s announcement. It sounds as if the Government have given up on innovation, marine energy and their own industrial strategy. The Secretary of State discussed wind energy. It would not be at the price it is today if we had not had a decade of subsidies through renewable obligations, which many Government Members opposed. Will he assure me that other marine energy projects such as those in my constituency and across the country will not be jeopardised and crowded out by the price of wind today, and that there is a level playing field for innovation in marine energy?
Greg Clark
The hon. Gentleman would accept that the commitment that I have given to pursue alternative energy sources, including projects in his constituency, has been clearly demonstrated. Of course we are open to innovation—we fund innovation. The assessment by independent experts is that the prospective cost reduction for this technology is not the same as that enjoyed by offshore wind. When it comes to future proposals, of course I will consider them rigorously, and if they can demonstrate value for money they can be contenders.
Oral Answers to Questions
Albert Owen Excerpts(6 years, 3 months ago)
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Claire Perry
The Government’s policy is to support a sector that employs 300,000 people and contributes £21 billion to the UK economy. We recognise that the vital oil and gas industry has an integral role to play as we transition to a low-carbon economy, which is why we are investing in technologies such as carbon capture, usage and storage, and exploring how things such as our world-leading submersible technologies can work to support oil and gas.
Albert Owen (Ynys Môn) (Lab)
The Minister will be aware of the potential of the marine energy sector in terms of both UK economic growth and reducing emissions. Will she assure me that projects such as Minesto and Morlais in my constituency will not be crowded out by the funding mechanism in place now, which favours offshore wind?
Claire Perry
The hon. Gentleman knows that we have set out £557 million to support all renewable technologies over the next few years. We want to make sure that we decarbonise at the right price for taxpayers and bill payers, which is one reason why the mechanism will continue.
Nuclear Power
Albert Owen Excerpts(6 years, 4 months ago)
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Greg Clark
I agree with my hon. Friend. It is not a positive reflection on previous Governments that, knowing that this important contribution of more than 20% of our power supply was coming to the end of its life in the decade ahead, no plans were made to replace it. The fact that we now have a pipeline of nuclear power plants will provide confidence that that source of energy will be maintained and, as we have discussed, provide important economic opportunities for people to enjoy successful careers and prosperity in that industry.
Albert Owen (Ynys Môn) (Lab)
The Secretary of State’s statement on Wylfa Newydd is good news for my constituency, good news for north Wales, and good news for the UK nuclear industry and wider industry. If we are serious about tackling climate change, we need to be serious about new nuclear and get on with it as quickly as possible. My constituents will welcome this announcement, but they will want assurances that the skills agenda is going ahead and that local people can have the quality jobs that previous generations in my constituency have had for over 40 years. I invite the Secretary of State to come to talk to training providers, local government and the Welsh Government so we can get this agenda up and running.
Greg Clark
I am grateful for the hon. Gentleman’s welcome. He knows very well the potential of the development for his constituents and those beyond. I had the pleasure, during the Anglesey Day he hosted, to meet many of the companies that would benefit. It is the case, I think, that some young people already working on the site have been to Japan for training purposes, deepening their skills and broadening their horizons. They will be very important engineers of the future in the UK. I am delighted that, subject to the success of the negotiations, this opportunity will be available for them.
Oral Answers to Questions
Albert Owen Excerpts(6 years, 6 months ago)
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Albert Owen (Ynys Môn) (Lab)
The Secretary of State for Business, Energy and Industrial Strategy (Greg Clark)
My ministerial colleagues and I have regular discussions with our counterparts in the Welsh Government on all aspects of the industrial strategy. Last week, my officials were in Cardiff to discuss with the Welsh Government the proposed Swansea bay tidal lagoon.
Albert Owen
At the heart of the industrial strategy is spreading prosperity across the whole of the United Kingdom, and working with devolved Administrations in our nations and regions will help to achieve that. The Welsh Government are working with practical developers—Minesto, an international company, and local company Morlais—to develop marine energy in my part of the world. The Secretary of State mentioned the Swansea bay tidal lagoon. Will he now make a decision and work with the Welsh Government and with developers so that we can roll that out, maximise our potential, and spread prosperity in this part of the United Kingdom?
Greg Clark
I share the hon. Gentleman’s enthusiasm for green energy, as he knows, and I am proud of our achievements. Since 2010, we have quadrupled the proportion of our electricity that comes from renewable sources. However, as the hon. Gentleman understands from being on the Select Committee, we also have a responsibility to minimise the impact on consumers’ bills. The Swansea proposal was very much more expensive—more than twice as expensive—as the Hinkley nuclear power station, for example. As I said, though, we are in discussions with our colleagues in the Welsh Government. I do not want to close the door on something if it is possible to find a way to justify it as being affordable to consumers.
Domestic Gas and Electricity (Tariff Cap) Bill
Albert Owen ExcerptsTuesday 6th March 2018
(6 years, 7 months ago)
Commons ChamberRead Full debate Domestic Gas and Electricity (Tariff Cap) Act 2018 View all Domestic Gas and Electricity (Tariff Cap) Act 2018 Debates Read Hansard Text Read Debate Ministerial Extracts
Greg Clark
I agree with my right hon. Friend, and I was making the point that we have long been a pioneer in regulation, which has meant adapting regulation to the changing circumstances. We started with RPI minus X, and that evolved into different models, including looking at the regulated asset base. In my view, it is necessary to keep up with our traditions of acting boldly to protect consumers’ interests, and we should be agile in response to new behaviours, especially those brought on by new technologies.
Albert Owen (Ynys Môn) (Lab)
I find myself in agreement with the Secretary of State and shall support the Bill. Indeed, I am in agreement with the Prime Minister that the energy market is broken and that customers are being ripped off. The importance of this legislation will be that Governments of whatever colour and the regulator cannot blame each other when something happens in future. There will be a framework that the Government, the regulator and the energy companies understand, and that is why we need legislation.
Greg Clark
I agree with the hon. Gentleman, and I was saying in response to my right hon. Friend the Member for Preseli Pembrokeshire (Stephen Crabb) that I think the regulator should be more agile in responding to the behaviour that had come about. In fact, the energy companies themselves should have recognised this, and one thing that they said to me was that none of them wanted to act individually and that they would prefer to have a consistent approach.
Greg Clark
My hon. Friend makes an excellent point, and my Department will work closely with Ofgem to ensure that those consumers can benefit from these provisions.
Albert Owen
The regulator will need time to consult before the Bill’s provisions are enacted. Is the right hon. Gentleman confident that, with the Bill being put before both Houses of Parliament today, customers will be able to benefit from it this winter?
Greg Clark
I am indeed confident of that, and it is one of the reasons why I am so grateful for the swift attention of the Committee on which the hon. Gentleman served in giving the Bill pre-legislative scrutiny and taking evidence from expert witnesses.
As I said earlier, the Bill has been constructed to be proportionate and to be directed at a particular problem that we expect to be temporary. On that basis, I hope it will enjoy support from across the House and we can swiftly progress it so that we can correct an intolerable situation in which consumers have been exposed to paying £1.4 billion more than they would in a competitive market. That abuse should end. This Bill will give Ofgem not only the ability to do so, but the requirement that it should do so, and I commend it to the House.
Gareth Thomas (Harrow West) (Lab/Co-op)
I agree with the right hon. Member for West Dorset (Sir Oliver Letwin) that we collectively owe praise to the hon. Member for Weston-super-Mare (John Penrose) and my right hon. Friend the Member for Don Valley (Caroline Flint) for bullying the Government into bringing the Bill before the House. Nor do I completely reject the right hon. Gentleman’s final assertion about the importance of having an effective regulator to regulate the market. What he missed, however, was the need to shake up significantly the way in which the market operates at the moment, to fundamentally challenge the power of the big six and the way in which regulation works between the transmission provider—National Grid—and the various distributor companies, given the impact that that has on bills.
As other hon. Members have said, while the Bill is good in that it will finally introduce an energy cap, it does not address the full scale of concerns across the House about how the energy market operates. E.ON put up prices last week on the coldest day of the year. Experts are increasingly concerned that the lights will go off at some point in the future. Gas capacity is another fear, and the energy ombudsman is unable or unwilling to enforce rulings in favour of consumers. Those are just some of the concerns about how the energy market works. It would have been good to have a far more comprehensive energy market reform Bill, of which the energy price cap was only part.
I fear that Ministers’ reluctant acceptance that a wider price cap is needed confirms the failure of regulation as it stands, and specifically confirms concerns about the powers and practices of Ofgem and its ability to keep the big six energy companies honest, along with National Grid and the distribution companies.
The Competition and Markets Authority, in its landmark investigation of the industry some four years ago, said that customers had essentially been ripped off to the tune of £1.4 billion—and that was since 2012. The only reason the Government referred the energy market to the CMA for investigation was the pressure from shadow Ministers and the then Leader of the Opposition. In the circumstances, and given the scale of overpayment by consumers, an energy price cap is hardly going to fundamentally change the dynamics of the energy market. Therein lies the problem with the Bill. It does not address the issues of ownership and the lack of accountability of those who currently own and distribute our energy. I therefore suspect that it will be of limited benefit to customers.
When the energy market was privatised, the country was promised the chance to have a stake in the new market. There was the famous “Tell Sid” campaign, which offered everybody a chance to own a stake in the energy market. Many mergers and acquisitions later, all we have seen in practice is that centralised unaccountable decision making has shifted from a series of Government Departments to six privately owned companies that control pretty much the whole chain from power station to customer. At the time, we were promised that unleashing competition would bring considerable benefits: prices would be driven down alongside an increase in innovation and efficiency. It is difficult to see exactly where those benefits are. Dissatisfaction with the energy market is so great that it is ranked bottom of all UK industries by the Institute of Customer Service. Part of the reason why people do not switch from one supplier to another is that they do not think they will get much benefit from switching, given the time and hassle it takes.
Six years ago, a very impressive ten-minute rule Bill was brought forward by the hon. Member for Harrow West, which I commend to the House, proposing that customers should be given the right to own the grid in their area, and that more people should be given the right to help control who benefits from the energy market. In effect, it proposed the sort of democratic public ownership that at the time was less fashionable on the Labour Benches, but which has become a bit more fashionable of late. I very much welcome that.
Albert Owen
I am sure the author of the Bill would agree with me that one model is the not-for-profit Welsh Water, which runs the utility and competes against others where necessary, but has competition in its tendering process so that it meets European competition rules for utility companies. It also invests in its customers, which is what is missing from the private monopolies that run distribution and transmission.
Gareth Thomas
My hon. Friend makes a very good point. If I may, I commend to him and the whole House the Co-operative party report on the reform of the energy market, which contains several proposals. One suggestion is that Welsh Water and the energy distribution model of similar mutuals in New Zealand might be the model for future of energy distribution in this country.
I do not hold the dogmatic view that public ownership through nationalisation might be a sensible way forward. I can see that there might be a case for some of the transmission network to be publicly owned, and I can see the argument for some public ownership of crucial, strategically important power stations to keep the lights on while a broader transition process is taking place. Fundamentally, however, I would like to make the argument for more co-operative, community-owned not-for-profit energy companies. They would own and supply energy, help to decarbonise our existing energy supply, be properly regulated, and, crucially, help to keep in the local community some of the wealth that is generated by energy, which I gently suggest should be strongly encouraged and allowed to emerge. Robin Hood Energy in Nottingham is a great example of that, as are Bristol Energy and Westmill Solar Co-operative.
I finish by gently saying to Government Members that I understand why they are tempted, for political reasons, to attack Opposition Members for looking again at public ownership, but when so many of the energy businesses in this country are owned, or part-owned, by state-owned companies from other countries, it prompts the question why public ownership by the British Government, or by the people of this country, could not be given a bit more encouragement by Ministers.
Albert Owen (Ynys Môn) (Lab)
The hon. Member for Taunton Deane (Rebecca Pow) is right to say that we have heard many good speeches, including from Members who took part in the pre-legislative scrutiny of the Bill by the Business, Energy and Industrial Strategy Committee. It produced a unanimous report, and I am pleased that the Government have taken on board the recommendations in it, because the Committee did a thorough piece of work.
I have supported and campaigned for an energy cap for many years. I am pleased that it will be introduced, and I will support the Bill tonight, but it would be wrong to say that it is a panacea: it is not. Many other pieces of work need to be done. I hope— I will work with the Government on this—that during the period of the price cap, we will look at other parts of the energy market, which the Prime Minister rightly described as “broken”. People are getting ripped off by, for example, transmission and distribution costs, because we have private monopolies running those sections of the energy market. It is right that we have the Bill, because the market has not worked.
I want to say something contrary to some of my colleagues on the Committee who have blamed the regulator. I have been on the Committee for many years, since it was the Energy and Climate Change Committee, and the regulator has done some good work. The first thing it did, as my right hon. Friend the Member for Don Valley (Caroline Flint) pointed out, was to ensure that consumers had greater transparency in their bills, so that they could see the unit prices. Before, those prices were hidden and people did not really know what they were being charged. The energy companies blamed the fact that wholesale costs had gone up, so they had to put their prices up. There is a new regime in Ofgem that is doing more impressive work in looking after the most vulnerable. When the chief executive gave evidence to the Committee he had the honesty to apologise for not doing enough, and that was the right approach.
Successive Governments have not done enough either. We have a huge responsibility to look after the most vulnerable energy users. As individual Members we must scrutinise the Government, but they must do more. When I was on the Energy and Climate Change Committee between 2010 and 2015, I was fed up of Ofgem coming to one session and saying that it did not have enough powers, and the Government would not give it more powers, and then a Minister—they changed regularly—coming to another session and saying that the regulator had enough powers. It was a missed opportunity, and we are much better placed now.
We put too much emphasis on switching as a panacea. As other hon. Members have said, a low number of people switch. It is not an easy thing to do. People are very busy, and vulnerable people may have two or three jobs. The last thing that they want to do is spend hours and hours on the line to a call centre to switch. That approach did not work, for many good reasons. I remember the Secretary of State in the coalition Government—the right hon. Member for Kingston and Surbiton (Sir Edward Davey)—saying that switching was the great answer. David Cameron, as Prime Minister, accepted that, and the issue was kicked into the long grass. I am glad that the CMA produced its report, but its predecessor, the Office of Fair Trading, held many inquiries and did not do a good enough job of helping people. I am pleased that we are better placed now. The role of the regulator is important, and it is now more proactive and helpful.
My hon. Friend the Member for Southampton, Test (Dr Whitehead) was a member of the Committee that pushed for measures on prepaid meters, which were affecting the most vulnerable. The energy price cap for prepaid meters has worked in helping to reduce their energy costs. There was a fear that the energy companies and suppliers would go up to the highest rate, but that has not really happened. I am therefore pleased to support the cap in the Bill, and I am pleased that there is a sunset clause.
Changing the behaviour of energy companies is essential. In the past, they have been playing the system while blaming others. They have always said that transmission costs are too high and fixed, and that they are vulnerable to wholesale costs. We had a situation, particularly from 2008 to 2014, described as “rocket and feathers”: prices rocketed, but when the price of crude came down there was only a trickling down or “feathering” in the cost of people’s bills. That situation has been exposed through tariffs, which has been important.
Transmission and distribution costs account for as much as 25% of people’s bills. The distribution companies are private monopolies, as is National Grid for transmission. There is no competition in that part of the sector. When we talk about a broken sector and free markets, we must remember that in many areas the market is actually restricted to one company. The hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry) rightly talked about the peripheral areas of the United Kingdom, many of which are off-grid, paying more for their energy. People who are off-grid do not have the option of dual fuel payments, so they are paying a lot for either off-mains gas or oil.
Stephen Crabb
The hon. Gentleman is making an important point about rural consumers who rely on off-grid gas and liquefied petroleum gas supplies. There have been inquiries into how that market functions. Is he satisfied that it is working fairly for rural consumers in Wales and the rest of the UK?
Albert Owen
No. I think more has to be done. I hope that the energy cap sunset clause will enable us, working with the Government and the regulator, to consider greater reform of the energy market so that we can prioritise helping isolated communities. I want to highlight the excellent work of Citizens Advice and many other groups. In my constituency and, I am sure, in the right hon. Gentleman’s, energy costs are a big issue in the citizens advice bureau’s casework, because of the price of oil in rural constituencies.
There is an answer to the monopoly status of the transmission and distribution companies: greater competition from not-for-profit organisations that reinvest in infrastructure. Welsh Water is a not-for-profit organisation. It has competition within it, because it puts its contracts out to tender. It is not a monolithic public monopoly, but a not-for-profit organisation that values its customers first and foremost. I know that the Minister will refer to the Government review of transmission costs. We have not had a response to that yet. I will support the Bill, because I have been campaigning for it for years. I do not think it is a panacea in itself, but together we can help vulnerable and non-vulnerable customers who have been ripped off for too many years.
Several hon. Members rose—
Claire Perry
I thank my hon. Friend. I would also like to put on record my thanks to the hon. Member for North Ayrshire and Arran (Patricia Gibson), whom I omitted to thank as one of the original campaigners north of the border.
Eight main issues were raised that I want to address. The first, which was raised by many hon. Members, including the hon. Members for Leeds North West (Alex Sobel) and for Ynys Môn (Albert Owen), and my hon. Friends the Members for Mansfield and for Eddisbury, was what will happen to vulnerable customers once all this has taken place. Of course, we have the safeguarding tariff that is now protecting 5 million people, saving them on average £120 compared with what they would have paid. That has been brought forward. We expect a whole package of additional improvements—smart metering, next-day switching, the midata project, the CMA policies about engagement with those disengaged customers, and an expectation that Ofgem will continue to scrutinise and actively monitor tariffs to make sure that any gaming creeping into the system is knocked on the head.
Many good comments were made about ensuring that the Bill will not disincentivise competition, including by my hon. Friends the Members for Wells, for Rugby (Mark Pawsey) and for Middlesbrough South and East Cleveland (Mr Clarke). We know the level of investment that we have to maintain, which is why the Bill will introduce a time-limited, intelligent cap. The powers given to Ofgem have to ensure that we do not disincentivise competition, while ensuring that companies have an incentive to improve the efficiency of their operations. Too many companies are still stuck in the operational methods of the past and customers are paying the price for that.
Interesting points were raised by my hon. Friends the Members for Fylde (Mark Menzies) and for Waveney (Peter Aldous), and the hon. Member for Kilmarnock and Loudoun (Alan Brown), about an appeal to the CMA, which is something for which the big six are lobbying. I firmly believe that given the level of transparency and scrutiny that will happen when setting the cap, there will be opportunities to ensure that that is robust. Ofgem’s decision on the cap can be judicially reviewed. Courts can consider these issues more quickly than the CMA, and a whole range of evidence can be taken in such a case, whereas with CMA decisions, the range of those who can comment is very restricted. I do not want anything that slows the introduction of the cap.
Albert Owen
I pay tribute to the Minister and the Secretary of State for honouring their commitment to take this measure through as speedily as possible. Will she look at other reviews? We await a Government response to the Dieter Helm review, which, by looking at transmission and distribution, could complement the price cap.
Claire Perry
The hon. Gentleman anticipates a point I was going to make about many contributions about the calls for additional market reviews. The call for evidence on the excellent Helm review, which was commissioned by my right hon. Friend the Secretary of State, has only just closed, and I think we need to take the time to consider it. I was struck by the speech made by my right hon. Friend the Member for West Dorset (Sir Oliver Letwin). What we want is a rational, functioning economic regulator in a market that is so vital in keeping the lights on, keeping investment going and keeping people warm in their homes, not a political rush to do things.
The right hon. Member for Don Valley raised the issue of green tariffs and gaming the system. Ofgem has never been required to scrutinise existing green tariffs. It will have to scrutinise carefully and consult during the process of the design of the cap to ensure that it is fit for purpose. As we heard from many Members, the expectation will be that customers should not have to overpay to be on a green tariff. We are now buying subsidy-free offshore wind and I opened the first subsidy-free solar farm only last year.
There were many questions about the structure of the cap, including whether it should be variable or fixed. My hon. Friend the Member for Weston-super-Mare has campaigned on this matter very strongly. I was again struck by what my right hon. Friend the Member for West Dorset said. The structure of the cap should be able to take into account changes in the wholesale system. Clause 6(1) states that the period of consideration has to be no greater than six months, but it is entirely within Ofgem’s powers to change the cap more frequently. Of course, as we know, standard variable tariffs are currently updated only one or two times a year. Companies buy forward and hedge their energy prices, so it is not usual for very strong changes in wholesale prices to be incorporated. We will get to see the structure of the cap and its sensitivity to those prices going forward.
There were concerns about ensuring we allow co-operative energy providers to be in the market. My right hon. Friend the Member for Harlow, who is such a doughty consumer champion, made that point, as did the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry), the hon. Member for Harrow West (Gareth Thomas) and others. We already have co-operative energy structures—White Rose Energy, Robin Hood Energy and so on—and there is no barrier to those companies coming forward and delivering.
My right hon. Friend the Member for Preseli Pembrokeshire (Stephen Crabb) and my hon. Friend the Member for Rugby asked about the removal of the cap. We will have a series of tests, and we have set out clearly in the Bill what those tests will be. Ultimately, we want loyal customers to be treated as well as, if not better than, new customers who are being attracted by cheaper deals. That will be the absolute test.
In conclusion, we know the Bill is necessary. We know we need to get it through Parliament. I have been really encouraged by the tone of the debate, with so many Members having really scrutinised the Bill and being absolutely determined to see it through. I am confident that we can pass this vital Bill and our constituents expect us to do so, as they do not want to be overpaying on their bills. I commend the Bill to the House.
Question put and agreed to.
Bill accordingly read a Second time.
Domestic Gas and Electricity (Tariff Cap) Bill (Programme)
Motion made, and Question put forthwith (Standing Order No. 83A(7)),
That the following provisions shall apply to the Domestic Gas and Electricity (Tariff Cap) Bill:
Committal
1. The Bill shall be committed to a Public Bill Committee.
Proceedings in Public Bill Committee
2. Proceedings in the Public Bill Committee shall (so far as not previously concluded) be brought to a conclusion on Thursday 15 March 2018.
3. The Public Bill Committee shall have leave to sit twice on the first day on which it meets.
Proceedings on Consideration and up to and including Third Reading
4. Proceedings on Consideration and proceedings in legislative grand committee shall (so far as not previously concluded) be brought to a conclusion one hour before the moment of interruption on the day on which proceedings on Consideration are commenced.
5. Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion at the moment of interruption on that day.
6. Standing Order No. 83B (Programming committees) shall not apply to proceedings on Consideration and up to and including Third Reading.
Other proceedings
7. Any other proceedings on the Bill may be programmed.—(Rebecca Harris.)
Question agreed to.
Nuclear Safeguards Bill
Albert Owen ExcerptsTuesday 23rd January 2018
(6 years, 8 months ago)
Commons ChamberRead Full debate Nuclear Safeguards Act 2018 View all Nuclear Safeguards Act 2018 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Consideration of Bill Amendments as at 23 January 2018 - (23 Jan 2018)
Dr Whitehead
I am afraid that it is not as simple as that. A considerable body of legal opinion states that, because Euratom was founded by a treaty other than the treaty of Rome—it was, in fact, founded before the EU came together—it can and should be dealt with separately. Although arrangements relating to association with and membership of various EU bodies have changed over time as a result of changes in EU regulations, that has not been the case with Euratom. The articles relating to associate membership and arrangements are identical to those that were in place when Euratom was founded. There is no case to answer as far as separate arrangements for Euratom are concerned.
Albert Owen (Ynys Môn) (Lab)
My hon. Friend is making a strong case for associate membership. He will recall a Westminster Hall debate that I held only last year, during which there was broad consensus on the issue, including among Conservative Members. I think that the Minister was the only Member who did not agree. The only reasons the Government have given relate to the legal position and the European Court of Justice. If Conservative Members were not whipped, they would understand the logic of the very sensible new clause.
Dr Whitehead
I thank my hon. Friend for making that strong point. I recall that even the hon. Member for Stone (Sir William Cash) suggested during that debate that associate membership of Euratom could be effective in continuing those arrangements, which have served us so well over many years.
Trudy Harrison
I have already said that I believe the transition period will happen, as the Prime Minister has indicated. New clause 1 is a delaying tactic, and that is absolutely not what the industry needs. We need certainty, and we need it today. I am pleased that the Department is already acting to recruit to the ONR safeguarding inspectors, who will also have responsibility for safety and security. That seems to me to provide vital synergies of shared knowledge and shared experience across the board in the nuclear sector.
Albert Owen
I want to speak briefly in support of new clause 1. We have debated whether there will be negotiations during the transition period, but I hope that the Minister will respond to this question when he winds up: does he intend to negotiate associate membership of Euratom? We are asking for associate membership, but we have been given no clear idea of whether he intends to seek such membership. We all want the safeguards to be in place from day one. Negotiating over Euratom standards is not in our gift, but we now have in place the highest standards in the world and co-operation with other world leaders.
Stephen Kerr
Having sat through a number of evidence sessions with me, as a fellow member of the Business, Energy and Industrial Strategy Committee, the hon. Gentleman well knows that there is no such thing as associate membership of Euratom. The Minister has repeatedly said that the Government intend to seek some form of close association with Euratom—I do not want to dwell on the semantics, but that is obviously a different thing—and to maintain a continuity of relationship with it. The new clause is therefore totally unnecessary, given the Prime Minister’s commitment to a two-year implementation period.
Albert Owen
I often agreed with the hon. Gentleman in Committee, but I think that he is completely wrong on that point. There is such a thing as associate membership—of Euratom, and of the European Union—and there are different levels of membership.
Albert Owen
Yes, there is. We need to negotiate from a position of clarity and strength, and I do not see us doing so. Without the proposed commitment in the Bill, I do not see the Government saying that they intend to go for third-party or associate membership of Euratom. We have not even seen the legal opinion that the Government were given about the need to leave Euratom in the first place. I support the need for nuclear safeguarding, and I will support the Bill on Third Reading, but new clause 1 is sensible, because it suggests that the Government should approach Euratom members and ask for associate membership, to give us the continuity and certainty that we want.
Ben Bradley (Mansfield) (Con)
The hon. Gentleman says that he wants continuity and certainty, but can he not understand the difficulty involved in writing into the Bill the outcome of negotiations that have not yet happened? How can Parliament effectively write into law that we are going to have a transitional period when the negotiations have not yet happened?
Albert Owen
The Government say that we need a transitional period for EU withdrawal, and it is obvious to me that we also need one for Euratom. The Government have said that we need to leave Euratom at the same time as we leave the European Union, but I stress again—I hope that the Minister will clarify the position—that nobody other than the Government has seen the legal advice that tells us that we need to exit Euratom. My hon. Friend the Member for Southampton, Test (Dr Whitehead) was absolutely right to say that there is universal support for the idea of our having associate membership. I have not met anyone who works in the industry who says that we should move away from Euratom. If we do, they—the workers; Prospect, the union; many of the experts who gave evidence to us; and the Nuclear Industry Association, which is the umbrella body—feel that we should have associate membership. The new clause therefore speaks on behalf of the industry in the first instance, and we as legislators should listen to what the industry is saying; we should not listen to the Government’s ideological grounds. The only reason why the Government want to leave Euratom is that they do not want to be under the European Court of Justice—that is the crux of it.
James Heappey
The hon. Gentleman, like me, will have received the briefing from the Nuclear Industry Association. Paragraph 5, on legal implications, clearly says that the treaties are entwined—that is the EU’s position and the UK Government’s position—and that it is not possible to remain a member of Euratom while leaving the EU.
Albert Owen
Well, let us clear this up now. I invite the Minister to say on behalf of the Government whether it is his intention—or their intention, if he is not in his post at the time—to negotiate associate membership. Yes or no? Otherwise, we are just guessing that the Government will negotiate some form of associate or third-party membership. I need to know these things from the Government, because we do not have anything in front of us. What we have today is a group of new clauses and amendments that would give us the certainty that we need. The industry is crying out for that, so I want to hear from the Minister.
Albert Owen
I am sure that the hon. Gentleman cannot speak on behalf of the Minister, but I will be interested to hear what he has to say.
Richard Graham
It strikes me as bizarre that the hon. Gentleman and his colleagues are taking their current line. I can only assume that that is either because they want to try to make the political point that the Government and the Conservative party do not want to have a future relationship with Euratom, which is clearly wrong—the Minister will confirm that when he speaks—or because the hon. Gentleman wants to score a political point with an industry that I know is dear to his heart by suggesting that, somehow, he is being more supportive by trying to write into law something that cannot be written into law. What is needed today—we will hear this from the Minister—is absolute confirmation of the Government’s intention to continue to have as close a relationship with Euratom as possible. That is what will be negotiated. It cannot be legislated for, otherwise we would do the same thing for all the many other organisations in Europe with which we might want to have a future relationship. All of that will be covered in the transition talks in Brussels.
Albert Owen
I am grateful to the hon. Gentleman. He knows me quite well, and I do not think he would accuse me of scoring political points. I have said consistently since before the Bill was introduced that we need clarity, whether we have full membership of Euratom, associate membership, or a third-party agreement.
Albert Owen
At this stage, I do not know what will happen, but I am going to find out from the Minister now.
Richard Harrington
I must apologise for my hesitancy when the hon. Gentleman asked me a question. I was not sure whether I was allowed to intervene on him, so I had intended to reply in my speech. Just to make matters clear, however, it is a statement of fact that the Government have served the article 50 notice to leave Euratom, the argument being that the two treaties were so interleaved that we had to. Secondly, there is no such thing as associate membership. Some countries have agreements on certain matters—associate membership on research and development, for example, in the case of Ukraine—but there is no legal category of associate membership. Thirdly, the Government intend to seek as close an association with Euratom as is possible. If it is acceptable to the hon. Gentleman—I attended his Westminster Hall debate, and I have listened very carefully to what he has said today—I will continue my remarks at the end of this debate.
Albert Owen
I am grateful, because that is helpful, but there is associate membership—it is just in different sections, whether that is research and development or various other—[Laughter.] There is. Conservative Members laugh, but when we had a debate in Westminster Hall, both sides were in agreement that we needed to strengthen our relationship through an associate or alternative membership.
Rachel Reeves
Like other hon. Members, my hon. Friend has a close constituency interest in this issue. Ukraine has associate membership for the research and development programme. One thing my hon. Friend and I are particularly interested in is whether we are seeking to have what Ukraine has: associate membership specifically for research and development.
Albert Owen
That is an important point. However, let me repeat that it is not Labour Back Benchers who are asking for this; it is the industry itself. We need to listen to the industry. Its members are not stupid. They know the technical and legal differences between associate membership and part-associate membership. What they want is certainty. If someone is in a position of strength, they do not go into negotiations, one against the rest, and say, “What are you going to give us?” We have to go to the negotiations with a firm belief that we want a strong associate membership, but I have not heard the Government say that, even in the Minister’s intervention.
James Heappey
I think that we are all pulling in the same direction, but we need to be careful about the language. There is not an on-the-shelf associate membership that we can just pick up and run with. There are associated countries, and there are countries that have associate arrangements, but those are bespoke, and thus far all of them have required the free movement of people and a contribution to the EU budget. It is therefore likely that whatever our associated membership might be, it will be different from that of countries that already have an associated membership. However, those countries are not “associate members”, in the sense that there is an associate membership class.
Albert Owen
I think the hon. Gentleman is agreeing with me, but we do not know our position or what our starting point is.
I would like to hear from the Minister—he will have enough time—that the British Government, on behalf of the nuclear industry, are looking for certainty. To say that they are looking for something as close as associate membership is not good enough. Are we looking for a specific British agreement with the rest of Euratom that gives us the same certainty as we have now? If so, we should support the new clause, because it strengthens the hand of the Government, rather than weakens it.
We should look at the comparison with the European Union (Withdrawal) Bill and phase 1, at the 11th hour waiting for the Irish to reach some sort of agreement. We cannot do that with Euratom and nuclear, because of its nature. Let us be absolutely firm. We are all pulling in the same direction. We want the best for the British nuclear industry. The nuclear industry wants an associate membership, so let us fight for it.
Mr Ranil Jayawardena (North East Hampshire) (Con)
Although I have not spoken on the Bill to date, I have been following its progress from afar. I rise, unsurprisingly perhaps, in opposition to the proposals that have been tabled by the hon. Member for Southampton, Test (Dr Whitehead). As his county colleague, I have a great deal of time for him, but on this occasion I have to say, with regret, that I believe that the measures would delay the implementation of the vital nuclear safeguarding measures that are facilitated by the Bill and extend lobbying for associate membership of Euratom.
Notwithstanding the uncertainty, instability and safeguarding risks that these new clauses and amendments implicitly condone, the association they appear to grasp at seems to be ideologically driven. Those who still worship membership of the customs union or the single market above all else should see the impossible implications of the measures.
Euratom, which was established by the Euratom treaty, as we have already heard, is uniquely joined to the European Union. It has the same membership. Its budget is part of the general budget of the EU. Importantly, it also makes use of the same institutions and entities: the Commission, the Council and, contrary to everything that we voted leave for—to take back control—the European Court of Justice. That is why this Bill, which will create our own version of things, is so crucial. Providing certainty as we leave is crucial, whatever the deal.
I note that the measures seek some association, but that is no silver bullet. As we have heard already, there is no such thing as associate membership, and hon. Members do not have to trust me on that. If we cannot trust the views of a former president of the Union of European Federalists, who can we trust? I speak, of course, of the former Liberal Democrat MEP, Andrew Duff, and he wrote:
“Euratom is therefore a fundamental building block of the European Union and not an accessory. It cannot be separated out from the rest of the Union. Joining the EU means joining Euratom; leaving the EU means leaving Euratom…There is no such thing as associate membership of Euratom.”
Mr Jayawardena
My life is greatly enhanced by that clarification. Let me turn to another source that the hon. Lady might put greater trust in—Professor David Phinnemore of Queen’s University Belfast. He agreed with the former Liberal Democrat MEP:
“Andrew Duff has been quick to point out, correctly, that there is in fact no such thing as ‘associate membership’ of Euratom or, indeed, of the EU for that matter. Non-member states can only be ‘associates’ of the EU.”
That is an academic’s view, as well as an MEP’s view.
The hon. Member for Ynys Môn (Albert Owen), in an exchange with my hon. Friend the Member for Wells (James Heappey), considered the notion of associated country status. Switzerland has associated country status. That is different from associate membership; it covers only research and development, and as my hon. Friend made clear, it is contingent on free movement. People in this country have said in a referendum that free movement must be controlled. Given the impossibility of the deal that the new clauses seek time to negotiate—to say nothing of its undesirability—it is pure folly to mandate years of uncertainty in a nuclear safeguarding transition period. I contend, rather, that the safeguards, inspections of nuclear facilities and monitoring that the amendments purport to support would be harmed more by a safeguarding transition period—especially since, once we have left the European Union, our Euratom membership cannot apply—than by moving forward immediately to new safeguards.
Albert Owen
Is the hon. Gentleman honestly telling the House that the British public do not want experts from other countries to move freely in the nuclear industry? We are talking about not just nuclear installations but research centres in this country that need international co-operation.
Mr Jayawardena
Although I like the hon. Gentleman very much and value his contributions to the House, I think he is missing the point and trying to undermine what the British people have clearly told us politicians. It is uncontrolled immigration that they seek to remedy.
Ben Bradley
I thank my hon. Friend, who will know much more than me about SNP Members and their outlook on life.
Our relationship with Euratom is a subject for negotiation. The Government have been clear that they will seek continuity, and they obviously want standards to remain as high as possible. How that connects directly with Euratom is not for this Bill; it is for negotiation directly with the EU. The exact nature of the relationship will of course be closely connected to trade, customs and countless other arrangements.
In Committee, we saw Labour’s attempts to get either a commitment to Euratom, which cannot be given in this Bill, or associate membership, which does not exist and this Bill cannot create. We need to build our own framework so that we are prepared to incorporate whatever kind of relationship with Euratom results from the negotiation. The Government have been clear that that is the most helpful and connected relationship that we can have, so we cannot lay out in this forum what that will look like. We need certainty and structure and to have our own plans in place—not just on paper, but well developed and physically in place—so that we can have continuity regardless of what happens further down the line, meaning that we need to crack on with things now to be ready in time. We heard evidence in Committee about the time needed to put things in place, so we need to crack on now.
I do not understand where the hon. Member for Ynys Môn (Albert Owen) was coming from in his speech. While very eloquent, he did not seem to grasp that we cannot write into the Bill things that have not yet happened or are not yet agreed. We cannot include a transitional period, and the Government cannot accept an amendment that foresees a future negotiation with another party, the result of which we just do not know. We need to be ready on exit day. We need to ensure that we cannot be taken by surprise and that continuity is ensured.
Albert Owen
I understand that the hon. Gentleman is on message, but the message is wrong. The words that I used in my contribution, which was echoed by SNP Members, were not mine, but those of the industry and the experts within it. For once, will the Government start listening to those who understand the industry, rather than bantering about who on which side of the House might be wrong?
Ben Bradley
I am sure the Minister will agree that we need to support the industry and that we need to do what the industry asks. My point is nothing other than that. My point is that we cannot make that decision in this Bill. It is for the negotiation to decide at a later date.
New clause 1 neglects to recognise that an implementation period is subject to negotiation and must be agreed directly with the EU—we cannot do it unilaterally. The idea of implementation before withdrawal also does not fit with broader plans and discussions that have been mooted for transition out of the EU after withdrawal in March 2019. It simply does not fit. The Government clearly cannot include in a Bill the outcome of a discussion that has not happened.
We need to decide the basic framework now and act accordingly.
Richard Harrington
I am sorry; I come from Leeds, so I should have known the difference.
The hon. Member for Leeds West (Rachel Reeves) mentioned Ukraine, which has been mentioned many times. Ukraine has association agreements on specific parts of Euratom’s activities, with research and development being the classic one. We must work within the existing legal framework, which allows for close association but not this theoretical category of associate membership.
Albert Owen
I am grateful to the Minister and the Secretary of State for the clarifications they have given today and previously in writing. I understand what the Minister is saying, but my point is that we are in uncharted waters. We need to get on the front foot, and the best way to do that is by acting on behalf of the UK nuclear industry, which is asking for associate membership. Will the Minister therefore please assure us that he will fight for an associate type of membership?
Richard Harrington
With all due respect to the hon. Gentleman, this quite amuses me, because last week I was berated for being a mouthpiece for the nuclear industry—something with which I was pleased to agree, by the way. The important point is that the language of whether we can have associate membership or not is not important; the important thing is what we come up with. People inside and outside the House can call it what they want, but effectively we all want the same thing. It is just not correct to call it associate membership, however, because there is no such thing. I have made that clear absolutely beyond doubt, as has the Secretary of State.