Oral Answers to Questions

Alistair Carmichael Excerpts

Tuesday 16th November 2021 Commons Chamber

[Greg Hands]

I would be delighted to have the opportunity to meet my right hon. Friend and his colleagues. I am always delighted to see so much energy in north Wales when it comes to questions of energy. I remind him that, when I say that we need to demonstrate cost reductions, the most recent reckoning on prices is that tidal stream is around £220 per MWh, wave is about £280 per MWh, and offshore wind is only about £40 per MWh. With scaling up and investment in the technology, we would expect those costs to come down, but I stress the current disparity between those sectors.

[Mr Alistair Carmichael (Orkney and Shetland) (LD)]

In order to get those costs to come down, though, we first have to have the ringfenced pot for tidal stream energy. At the Dispatch Box on 3 November—in column 926 of Hansard—the Prime Minister undertook in response to me that he would look again at this question. There is a hard deadline approaching at the end of the month with the contract for difference. When will we hear the outcome of the Prime Minister’s further look again at this question?

[Greg Hands]

The right hon. Gentleman will have heard the Prime Minister’s words on this matter yesterday from the Dispatch Box, when he was asked about it in relation to his COP statement. I have nothing new to say on the allocation round. We announced the parameters for allocation round 4, which will open in just a few weeks’ time, on 13 December. Project developers will be able to declare their intention to bid, and the round very much includes technologies such as tidal and wave, and other pot 2 emerging technologies.

Gas Prices and Energy Suppliers

Alistair Carmichael Excerpts

Thursday 23rd September 2021 Commons Chamber

[Kwasi Kwarteng]

My hon. Friend is quite right: we did a whole range of interventions to alleviate the burden on consumers and on businesses. Those were fiscal interventions that the Chancellor pursued last year, and I am sure that he is looking at a range of things this year, but that is a matter for him to decide ahead of the Budget.

[Mr Alistair Carmichael (Orkney and Shetland) (LD)]

What are the implications of the situation for the exploitation and extraction of gas within the UK continental shelf?

[Kwasi Kwarteng]

The right hon. Member will know that, in 2020, 48% of our natural gas came from the UK continental shelf, so that is clearly a strong, sustainable source of gas to this country. However, I suggest to him that gas is a transition fuel: in our pursuit of net zero by 2050, we want to transition away from it. That is why we are developing carbon capture and hydrogen, as he knows very well.

UK Steel Production: Greensill Capital

Alistair Carmichael Excerpts

Thursday 25th March 2021 Commons Chamber

[Kwasi Kwarteng]

My hon. Friend raises very serious questions about the business model, which I am not prepared to go into now. What I will say is that, in the first two months of my tenure as Secretary of State, I have pushed forward audit reform as a big issue. A consultation on it is under way. It is issues relating to things such as Greensill capital that show how necessary it is for us to reconsider what we are doing on audit reform and to have the best standards in the world.

[Mr Alistair Carmichael (Orkney and Shetland) (LD)]

I think we all understand the importance of commercial confidentiality, but, where significant sums of taxpayers’ money are concerned, that cannot not be a barrier to full accountability. The Secretary of State will be aware that the Scottish Government are out for guarantees north of £500 million as a consequence of Greensill’s difficulties. Is that not something for which there really ought to be full explanations?

[Kwasi Kwarteng]

The right hon. Gentleman is absolutely right. My understanding is that the Scottish Government are very exposed to Greensill’s financial engineering—let me put it that way—and there should be far greater transparency in this regard.

UK Space Industry

Alistair Carmichael Excerpts

Thursday 4th February 2021 Commons Chamber

[Mr Alistair Carmichael (Orkney and Shetland) (LD) [V]]

It is exciting to watch the way in which the UK space industry is currently growing, but it is worth remembering that the roots of that growth are to be found in the civil space strategy of 2012 to 2016, which was launched by the then Minister for Universities and Science, David Willetts. I want briefly to remind the House of what David Willetts said in the foreword to that strategy:

“The possibilities of the next fifty years represent something very inspiring for this country. Our pragmatic approach to private and public sector partnerships has helped pave the way for a new era of space activity in Britain, with the UK Space Agency leading the way. So, a strategy is more than simply words. A strategy can shape the future.”

Indeed, it does.

The progress we have seen since then has brought us to the point in Shetland where we are proud to be home to the burgeoning and ever-growing Shetland spaceport in Unst, the most northerly of the Shetland islands. Last year, we were delighted to welcome the partnership between Unst and Lockheed Martin as the preferred site for its UK Pathfinder launch operation. We hope to hear further information soon with regard to its future intentions. Just this week, we were delighted to hear the announcement of the intention of HyImpulse, a German company, to launch its maiden orbital flight from Unst in 2023.

The question is, how do we go forward? That takes me back to David Willetts’s words. We were dismayed to read recently in The Press and Journal that the view of Scottish Minister Fiona Hyslop is that the Sutherland site is best placed to achieve the first launch by the target date of next year. There are opportunities for all the communities involved in the growth of the UK space sector, and that was a rather bold and ill-considered assertion. It does not help anyone for the Scottish Government to be seen to favour one site over another.

As we look for a way forward, I take the Minister back again to the words of David Willetts and encourage her to build the strongest possible engagement with the companies that are doing business in this sector—they are the ones that know it best—rather than relying on information from politicians or public sector agencies, who may occasionally have an axe to grind. The Government have work aplenty to do in creating a fresh regulatory framework. Let us leave the commercial decisions to the companies that know best and that will put their money where their mouths are.

Marine Renewables: Government Support for Commercial Roll-out

Alistair Carmichael Excerpts

Tuesday 8th December 2020 Westminster Hall

[Mr Alistair Carmichael (Orkney and Shetland) (LD)]

I beg to move,

That this House has considered Government support for the commercial roll-out of marine renewables.

It is a pleasure to be here in Westminster Hall—not least because somebody thought it would be a good idea to turn off the heating in Portcullis House today—and to serve under your chairmanship, Mrs Cummins. This debate is both timely and—for a half hour Adjournment debate in Westminster Hall—very well attended. I thank all right hon. and hon. Members present.

I say timely because it follows hot on the heels of the speech by the Prime Minister last week, where he announced plans for a green industrial revolution creating 250,000 jobs. That has the potential to be a highly significant milestone on the road to net zero carbon emissions by 2050. The speech included many laudable goals, and it is my experience from many years in the House that where ambitious targets are made and married to genuine political commitment, that building cross-party consensus in the House for them is not a difficult process; I do hope that we will be able to do so.

If what we got from the Prime Minister last week was the strategy, then today I want to focus the attention of the House and the Minister on one very important tactic: marine energy. The generation of electricity using wave and tidal power is an industrial sector in which the UK has the ability to lead the world. Much of what I want to discuss today will not be new to the Minister. It follows on from a briefing he had in the House from leading industrial developers in the sector earlier in the year, organised by the all-party parliamentary group on marine energy and tidal lagoons.

What is needed now is the finely tuned support mechanisms from Government to turn technical feasibility into commercial application. I declare a very obvious and particular constituency interest. Living in an island community, one is acutely aware of the power of the sea and never far away from it. It can affect just about every aspect of life. Orkney is home to the European Marine Energy Centre, the undisputed world leader in testing wave and tidal devices, both domestic and international. Others envy that status, but it will not last for ever without the positive signals of support that I seek to get from the Minister today.

The Minister will be aware that the EU is already looking at ways to ramp up its efforts to exploit the opportunities that marine renewables present. History tells us that, although we have an advantage having done the groundbreaking research and development work, there are plenty of other places in the world where that could be deployed commercially, as happened with the development of onshore wind.

Although my constituency is currently central to this emerging technology, even now this is not an industry confined to any one constituency, region or nation of the United Kingdom. Work is ongoing in engineering workshops and university research centres throughout the country, from Strangford lough to the Isle of Wight, from the Pentland firth to the south-west of England, this is a truly UK-wide industry. Of course, on the mention of Strangford lough, I give way to the hon. Member for Strangford (Jim Shannon).

[Jim Shannon (Strangford) (DUP)]

As an Orangeman, there is only one green revolution that I will support, and it is this one. Does the right hon. Gentleman agree that the movement of the tide is as sure as the sun rising and setting? Projects such as the tidal energy generator in Strangford lough, which is a pilot scheme, has given my constituency a glimpse into tidal potential that should be further explored.

[Mr Carmichael]

I absolutely agree, and I would add to that list of tides and sunsets the attendance of the hon. Member for Strangford (Jim Shannon) at Adjournment debates in the Chamber and Westminster Hall. I think the chairman of the APPG wished to intervene.

[Richard Graham (Gloucester) (Con)]

I am grateful to the right hon. Gentleman for securing this debate and allowing me to intervene as chairman of the all-party parliamentary group on marine energy and tidal lagoons. As he and the hon. Member for Strangford (Jim Shannon) have highlighted, this is a resource of enormous potential across the UK.

We have representatives here from Wales. It is true to say that Bardsey will become the first island in the world to be entirely powered by tidal stream. The other projects in Morlais, Pembrokeshire and Perpetuus Tidal Energy Centre on the Isle of Wight, which is one of five centres funded through the Government’s TIGER project, give an idea, as the Minister is aware, of the potential. Does the right hon. Gentleman agree that, with COP26 in Glasgow next year, if the contracts for difference auction were to be just beforehand and marine energy to be given a fraction of the capacity there, that would be a fabulous project to highlight at COP26?

[Mr Carmichael]

I absolutely agree because, as I am about to illustrate, we have a nascent industry. It is growing but it is in a position to undertake that important role for the UK on the world stage. According to the UK Marine Energy Council, there are currently 22 tidal stream and 23 wave developers active in the UK, with an estimated investment to date exceeding £500 million of private capital in developing marine energy technologies, and £70 million in direct public support.

Estimates of support suggest that the tidal stream could deliver £1.4 billion gross value added by 2030, while the figure for wave is £4 billion by 2040. Those figures, plus the thousands of jobs that would come with them, are a tremendous prize. There are currently tidal stream sites with an aggregated output of 1 GW under development in the UK, awaiting a positive signal from the Government. The industry is ready to move, the technology is there, the private investment is primed but it does need a helping hand from Government at this critical stage.

[Stephen Crabb (Preseli Pembrokeshire) (Con)]

The right hon. Gentleman and I worked together in Government, and he knows that my constituency in Pembrokeshire is one of those hot prospects for the development of marine renewables in the years ahead. Does he agree that this area has been discussed a lot? It is very easy for everyone to be in agreement about the rhetoric, and how good these things would potentially be in the future, but what we need now is some practical steps that help build investor confidence to unlock the projects and see actual, practical growth in the sector.

[Mr Carmichael]

I absolutely agree. I have been watching and engaging with this industry since I was first elected in 2001. Candidly, we have seen a few false dawns over that time, but it is clear that we have got to that point, where it is so tantalisingly close, that we are now looking at that missing link to get us over the line.

I will offer a couple of illustrations from my constituency. Orbital Marine Power is at the forefront of this industry, and the most recent prototype successfully generated 3.25 GWh into the UK grid during a 12-month period of trials at the European Marine Energy Centre. Orbital has raised £7 million of construction debt finance through the Abundance crowdfunding platform to finance the building of a commercial tidal generator for deployment in spring 2021. Orbital and its investors are now awaiting the right signals from the Government to go fully commercial.

Orbital illustrates well the opportunity that we have here. Some 80% of the Orbital machine currently under construction is from UK suppliers. It believes that this could increase to 95% if the correct market conditions were put in place. The contrast with wind power, which has relied overwhelmingly on imported machinery, is almost too obvious to mention—I say almost, because nothing is ever too obvious to mention in politics.

The same runs true of Nova Innovation, which deployed the world’s first offshore tidal array in Shetland. Construction of the Shetland tidal array had over 80% UK content, including 25% of the supply chain spend in Shetland. Operation of the array has seen 98% UK supply chain content, with over 50% of project expenditure going to companies in the northern isles, such as Shetland Composites, which made the blades for Nova’s turbines and is now one of the top tidal blade manufacturers in Europe. Nova expects this high local content to be replicated at its other UK sites in Wales, Scotland, Northern Ireland and the south of England.

If we can be world leaders in the domestic application of marine renewable technologies, we will also be in pole position to become the leading exporters to the world. Make no mistake: these devices are substantial pieces of engineering, so the potential for jobs and green industrial benefits is enormous—I would say, parenthetically, that this is the point at which we should be looking at export finance support for these companies, so that when we get to that point we are not having to play catch-up.

The missing link, however, has long been one that would give wave and tidal energy the chance to develop commercially to the point at which it would, like other renewable technologies, outgrow the need for subsidy. To get to that stage, it simply cannot be linked in with other renewable technologies—often better established—and told to compete.

That brings me to my first ask of the Minister. We need a bit of fine tuning of the Government’s approach in the next CfD round. It is welcome that tidal and wave technologies will be in pot 2 for the forthcoming CfD round, with offshore wind in a separate pot 3. That learns from the failures of the past, and goes some way to addressing the most obvious weaknesses, which pitted so many technologies at very different stages of development against one another.

What the industry is really looking for is a pot within a pot—in other words, an allocated amount to be competed for by tidal and wave developers at a price that will not only make their projects economically viable and able to attract investment but, importantly, will do so in a manner that does not interfere with the overall objectives of the CfD round. The ability to create that ring-fenced refinement exists within legislation already. It is imperative that we act now. As we know from other renewable technologies, once the process of a commercial roll-out in underway, the costs drop like a stone.

As well as having an immediate effect, the creation of a tidal and wave-specific allocation would provide a clear and long-awaited policy signal and will pave the way for private investment, and not just in the technologies but in the infrastructure required to support the deployment. It is worth remembering that, by definition, most of that work will take place in coastal communities, from the Cromarty firth and the Clyde to the north-west and south-west of England, many of which have suffered badly for years as a result of post-industrial decline, even before the impact of the current pandemic.

My second ask of the Minister is one that he has heard before. The Government should support technology developers by implementing a complementary proposal that would support technology developers not yet able to participate in the CfD process. The innovation power purchase agreement would allow a developer to sell electricity to an electricity supplier at a strike price to be agreed with the Department for Business, Energy and Industrial Strategy.

I understand that that is not a BEIS responsibility and that it sits with the Treasury, and we all know that the Treasury is not always the easiest Department to deal with, so I offer it to the Minister as his opportunity for glory. This emerging industry needs a champion inside Government, someone who will prosecute the case with the Treasury so that the potential that we have all spoken about today can be realised and something that he has heard about can then become a reality. He could be that champion for the marine renewable industry. I can think of nobody better for the role.

In short, what the marine energy sector needs today from the Government is not a handout, but a signal of support that can in turn be used to open the door to private investment and to create a platform for a vibrant industrial sector that ticks all the Government’s boxes: clean energy, technical innovation, world leadership, export potential, industrial regeneration, a genuinely British product, and economic benefits for hard-pressed coastal communities the length and breadth of the United Kingdom. It is an opportunity to turn the rhetoric of the Prime Minister’s speech last week, and the Government’s laudable aspirations for levelling up, into a genuine political reality. If the Minister will take on that cause and fight it for us, he will have the support of all parties and all parts of the country.

--- Later in debate ---

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

I am delighted to be able finally to respond to the debate. There have been some really interesting interventions, and it is a shame that we have only had half an hour for it. It is also a real pleasure to participate in this debate with you in the Chair, Mrs Cummins.

I will address the two points made by the right hon. Member for Orkney and Shetland (Mr Carmichael), and then I will address some of the wider concerns relating to economic opportunities and the levelling-up agenda. First, the right hon. Gentleman gave me two challenges: the first was to look at the pot structure of the CfD round; and the second was, as he put it, my bid for glory within the Government, by championing the cause of marine energy. He will know that I have a real interest in this subject. I have seen the APPG on marine energy and tidal lagoons and its chair, my hon. Friend the Member for Gloucester (Richard Graham), a number of times on this issue, and I have also attended APPG meetings that the right hon. Gentleman, my hon. Friend the Member for Gloucester and I have had the privilege of hosting here in Parliament.

To begin with, the right hon. Gentleman is absolutely right about the pot structure, and I pay tribute to him for actually attributing some degree of good policy on the part of the Government, because we split the offshore wind element—the offshore wind competition—into a separate pot, and we have allowed marine tidal projects and remote island wind projects, which may be of interest to him, to remain in pot 2.

The right hon. Gentleman said that the competition was unfair, but of course when we set up the pot structure we did not know that it was unfair, because we had not seen the progress in the development of offshore wind. And all I will say to him now on this issue is that I am very sympathetic to ideas, as he put it, of having a pot within a pot. That means that within pot 2 there would be a reserved quantum for marine projects, particularly tidal projects, to be able to compete for. I can assure him that that idea is being considered.

Having said all that, however, there is an issue, as the right hon. Gentleman will be aware, about the actual costs—the initial costs of marine technology and how we can support such technology. This is very much a chicken and egg situation, because people who are keen supporters of marine energy technology would say, “Well, if you don’t support it, how are you going to bring the costs down?”, and of course, our friends in the Government, including within the Department for Business, Energy and Industrial Strategy and, in particular, the Treasury, would say, “Well, if something is going to cost £250 per megawatt-hour and nuclear is at £92 per megawatt-hour, there is a discrepancy there.”

Obviously, public money must be well considered and looked after, and the challenge is very much on the industry, as I have said to industry players and champions on separate occasions. The challenge is for them to show how these costs can come down. If they can, then I am sure that the Government would be very willing to support the technology.

We have initiated a marine energy call for evidence. The right hon. Gentleman will remember that there was a whole debate about the Swansea Bay lagoon. When the development consent order for that lapsed, the Secretary of State said that we would have a call for evidence and we are engaged in that process. I fully recognise the economic opportunities for the coastal communities that he represents so ably, and I also pay tribute to the European Marine Energy Centre in Orkney, which, as he reminded us, is a world-beating centre. Of course, it initially enjoyed Government support, as he will well remember, because he was in government at the time. It is something that I would be very willing to engage with him on.

[Mr Carmichael]

First of all, I understand the point the Minister makes about the operation of CfDs. When I was in government in 2011 and 2012, when the CfDs were introduced by the Energy Acts, we did not really know how they would work, so we have learned from the experience. Every time there is a development pot, one technology emerges, which is why the ring-fencing is important. On the issue of the evidence, will the Minister look at the figures that I have given him today relating to the private sector investment that is primed and ready to go? Surely there could be no better indicator of technological ability than the willingness of the private sector to put its money into it.

[Kwasi Kwarteng]

The right hon. Gentleman raises a fair point. The private sector is willing to go, of course, provided it is supported initially by the Government. That is exactly the kind of conversation we should be having. He made some good points in his opening speech. One of the phrases that stuck in my mind was that we should “open the door” to private investment. That is exactly what the CfD round has done. That is exactly what we would hope to achieve, should we go down that route with regard to marine energy. No Government in the world can simply spend their way to creating the industry. The trick is to create the financial incentives, as we have done with offshore wind, to allow us to open the door to private investors.

I pay tribute not only to the right hon. Gentleman, but to the communities he represents and to my right hon. Friend the Member for Preseli Pembrokeshire (Stephen Crabb)—I am glad I got the constituency right; I knew it was not Ceredigion. He made the point well. He represents a community that has clearly been under a huge amount of economic pressure and even distress with covid, and the green industrial revolution represents a real answer and a real chance to build back better, to level up, and to increase and widen economic opportunity across the country. It is rare to see three constituent countries of the United Kingdom represented in debates in Westminster Hall. I do not think we have Scottish representatives here.

[Mr Carmichael]

All four are here.

[Kwasi Kwarteng]

Forgive me; I saw straight through the Scottish representative. In this debate, we have representatives from all four countries of the United Kingdom. That is significant, and points to the fact that the levelling-up agenda is geographically extremely diverse. The green industrial revolution and green energy topics engage all four of our constituent nations. It is an excellent debate for that reason.

The Government remain absolutely committed to renewable energy, and that was highlighted specifically by the Prime Minister’s 10-point plan. We believe that the only way we can get to net zero by 2050 is through innovation. Tidal technology is part of that innovation. The only caveat is that it cannot come at any cost.

My right hon. Friend the Member for Preseli Pembrokeshire referred to eternal waiting and eternal words and rhetoric. We must have this dialogue and we must at least show a pathway to reducing costs, and if we can do that—I am sure we will be able to do that—we will in the short term be able to put flesh on the bones and realise in fact some of the aspirational rhetoric exchanged across the House for many years.

Climate Change Assembly UK: The Path to Net Zero

Alistair Carmichael Excerpts

Thursday 26th November 2020 Commons Chamber

[Mr Alistair Carmichael (Orkney and Shetland) (LD)]

I add my voice to those who have welcomed assembly’s report. As an initiative with its roots in Parliament and an exercise in co-operation across the different Select Committees, it was innovative and courageous and something on which we should now look to make progress and to build.

My constituency has been at the heart of this nation’s energy supply for the past 40 years. As we have relied on hydrocarbons, we have been home, very successfully, to two of the largest oil terminals that bring in hydrocarbons —oil and gas both—from the North sea and latterly from the area to the west of Shetland. We have a long history of being central to this country’s energy supply. We are now coming to a phase of our nation’s history in which we anticipate that our reliance on hydrocarbons will wind down. My constituency remains equally committed to playing a full part in energy provision for our future needs. It is therefore somewhat frustrating for us still to find that the opportunities that we have to contribute to green renewable energy in the future are somewhat frustrated by a lack of action and recognition on the part of the Government in respect of the opportunities that exist.

I met the Minister earlier this year with the Marine Energy Council, from which he heard about the opportunities that exist in the development of wave and tidal power, which has been a long, slow burner. We have now reached the phase of having finished the research and development work but not yet being fully able to go to commercial deployment. Every technology goes through this phase; we know that because back in the 1980s we were at the forefront of the development of onshore wind. The prototype of many of the turbines now seen throughout the country was built not far from my house in Orkney, on Burgar Hill—it was initiated by Cecil Parkinson back in the day. We did the groundbreaking, leading work on developing the technology, but we did not then fund the next stage to get it to commercial deployment.

The risk now is that we will do the same thing with marine energy, and in particular the development of tidal energy. We have done the research and development; we now need to find something like an innovation power purchase agreement, or a similar mechanism, that will get the industry through to the point at which it can contribute its full potential through a mature technology. We know that we are not going to get there, but we know also that if we leave it to others, others will take the opportunity. Just in the past week or so we have heard that the European Union is coming forward with its draft marine energy strategy, and it now speaks about an altogether different scale of deployment and development.

My worry is that we are about to lose the opportunities in respect of not just generating power for use in our own country but the development of a home-grown supply chain, which could be crucial and central to providing the green jobs about which we all speak in this Chamber. The sums of money involved in an IPPA for the marine energy sector are relatively small; the opportunities that they could produce for the UK as a whole, and for Orkney and Shetland in particular, are enormous. The Minister has heard this from the industry’s mouth; I hope that when he comes to respond to the debate he will have some good news to tell the industry.

Oral Answers to Questions

Alistair Carmichael Excerpts

Tuesday 19th March 2019 Commons Chamber

[Chris Skidmore]

When we look at our space industry, we see that it is truly part of the United Kingdom, right across every place. I went to Northern Ireland to see Thales and the work that it is doing on some of the satellite applications. Up in Sutherland in Scotland, we have a £31.5 million investment in vertical space launch. We want to ensure that our space industry—one of the fastest-growing industries in all of business—covers the whole of the UK.

[Mr Alistair Carmichael (Orkney and Shetland) (LD)]

7. What steps the Government are taking to support the development of marine renewable electricity generation.

[The Minister for Energy and Clean Growth (Claire Perry)]

It was a pleasure to meet the right hon. Gentleman and a cross-party group of colleagues only last month to discuss this matter. I commend the Marine Energy Council for the work that it has done, and indeed I see that it has published some interesting analysis today. We have provided £175 million of innovation funding to the sector. We all want it to succeed. We have the first pre-commercial array deployed off Caithness and, of course, we have the European Marine Energy Centre in his constituency.

[Mr Carmichael]

I thank the Minister for the meeting last month. We are now engaging with the Treasury in respect of revenue support for the sector, and any support that she can give it will be very welcome. In the meantime, however, we have the prospect of the energy White Paper. Will she use her offices to ensure that the potential for marine renewable energy generation is fully recognised when that White Paper comes to publication?

[Claire Perry]

I do not want to pre-empt the White Paper, but I think that one thing we will show in it is how the ongoing attempts to be technology-neutral can work across the piece to generate low-cost, low-carbon energy, and highly competitive technologies will be part of that. We remain interested in marine and tidal, as the right hon. Gentleman knows. Of course, we need to discuss with the Treasury any revenue support mechanisms, but I want to continue to engage with the sector on a long-term basis.

Honda in Swindon

Alistair Carmichael Excerpts

Tuesday 19th February 2019 Commons Chamber

[Greg Clark]

Of course I completely respect—everyone has to respect—the reasons that have been given for the decision, but I am pretty familiar with this industry and others, and there are a number of factors. I report to my hon. Friend truthfully that on the minds of many investors around the world is an anxiety caused by a lack of knowledge as to what our trading relationships will be with our most important neighbours in just over a month’s time. That is something that we should resolve; if we do, I think we can look forward to a resumption of significant investment and to statements that are happier than the ones I am able to give today.

[Mr Alistair Carmichael (Orkney and Shetland) (LD)]

I thank the Secretary of State for advance sight of his statement. I wish him, and all those with whom he will be working, well as they try to turn this unhappy set of circumstances around. Let us not forget that 3,500 house- holds are facing a pretty bleak future at the moment.

The point the House needs to address today is that this is not a one-off incident—it comes on the back of similar announcements from Nissan and Jaguar Land Rover. It raises serious questions about the future viability of our automotive sector as a whole. This is precisely the sort of thing the Secretary of State’s industrial strategy was designed to address. Why is it that, at the moment, it does not seem to be working?

[Greg Clark]

The decision we took to position this country at the leading edge of the new automotive technologies—battery technology and connected and autonomous vehicles—is evidently the right one, because the pace of change, as has been made clear by Honda today, is faster than even it expected just two or three years ago. If we sustain our commitment through the industrial strategy to make sure that we are the place in the world associated with the leading edge of battery technology and its manufacture—the Faraday challenge and the Faraday Institute are prime examples of that—there is a very prosperous future for that industry. However, it also occurs to me that, in a world in which there is such turbulence and so many changes, we should do everything we can to neutralise other sources of uncertainty. So we need to do both.

Oral Answers to Questions

Alistair Carmichael Excerpts

Tuesday 12th June 2018 Commons Chamber

[Mr Gyimah]

I can answer categorically: the UK will continue to be a member of the independent European Space Agency—currently, for every £1 we invest, we get £10 back—and Innovate UK is looking at a national space programme with the UK Space Agency. In addition, we are looking at a space sector deal to boost the work in our thriving space sector.

[Mr Alistair Carmichael (Orkney and Shetland) (LD)]

Some of the most exciting and innovative work in engineering at the moment is being done on the development of renewable energy from wave and tidal stream power. The sector itself has come up with a proposal for innovation in power purchase agreements. Will the Minister, or perhaps some of his colleagues, agree to meet me with a delegation from the sector to discuss how it can contribute to the Government’s industrial strategy?

[Mr Gyimah]

Absolutely. I am glad the right hon. Gentleman mentions the industrial strategy, and I would be delighted to meet him.

Delivery Charges (Scotland)

Alistair Carmichael Excerpts

Wednesday 20th December 2017 Westminster Hall

[Douglas Ross]

My hon. Friend raises a very important point; I would expect him to highlight this crucial issue for the borders, as he has done so ably. I think it is something we have to address as we progress this campaign.

The final piece of research that I want to mention is by Ofcom, which has now completed a two-year study of this issue. I welcome the confirmation that I recently received from the Minister that she will work with the Consumer Protection Partnership to establish a review of the evidence collected by Ofcom so far on excessive delivery charges and see what can be done to protect Scottish consumers from excessive charging. I would welcome further comments from the Minister on that point in her response today.

For me, the most important part of today’s debate is sharing just some of the examples that I have received from constituents and others through Parliament’s digital engagement team since I secured the debate. Their testimonies speak far better than anything that we politicians can put forward.

For example, Lynn from Moray was going to order a product from Groupon, but was disgusted to discover that the shipping does not cover her IV36 postcode, with the company saying that it delivers only to mainland UK. On its site, it had a map showing in red the areas to which it would not deliver. However, that red covered hundreds of square miles and included two cities—Aberdeen and Inverness—all of which are most definitely on the UK mainland. When the delivery company said that it would not deliver because it would have to take a ferry to reach Lynn’s address, she made the very valid point that it would not have to do so and, crucially, someone could continue to drive for another three hours north, east or west and still not require a ferry. We are definitely part, and an integral part, of mainland UK.

Lynn finished her correspondence to the company by saying:

“This is a blatant, lazy, cost saving exercise on the part of whichever delivery company this producer is using and is factually incorrect. This is disgusting and insulting.”

I absolutely agree with Lynn.

[Mr Alistair Carmichael (Orkney and Shetland) (LD)]

Perhaps through the hon. Gentleman, we could remind Lynn that actually ferries are very good at carrying parcels as well and the fact that they have to go on a ferry should not be an excuse for a further surcharge.

[Douglas Ross]

I am sure that the right hon. Gentleman will make that point again as the debate progresses. However, I think that using a ferry to get to Moray would incur a greater surcharge when we can use the road, rail and planes as anyone else would.

Marion from Speyside bought a new shower earlier this year. She knew the design that she wanted; she knew the model, the product, but she ended up buying it from Germany with free packaging and postage. That was cheaper than using other firms that advertise free UK mainland carriage, because of the large surcharge on AB and IV postcodes. She added in her email to me,

“It is this type of pricing that really annoys me as you are often at the final stages of paying before you find out. I am glad you and Mr Lockhead are highlighting this issue.”

--- Later in debate ---

[Mr Alistair Carmichael (Orkney and Shetland) (LD)]

It is a pleasure to serve under your chairmanship, Ms Dorries. I congratulate the hon. Member for Moray (Douglas Ross) on securing this debate. This is an issue that I have pursued over many years; I think it is fully 15 years since I first initiated an Adjournment debate on this subject. In that time, I think that, if anything, the situation has got worse.

In 2002, it was myself, the then hon. Member for the Western Isles and some colleagues from Northern Ireland who were interested in a debate like this. Since then it appears that the contagion has spread, so that it is now as far south as Moray—indeed, we have heard that communities and conurbations as significant in size as Inverness and Aberdeen can often find themselves excluded.

We have heard also, from the excellent piece of research done by Citizens Advice Scotland, “The Postcode Penalty,” that the cost of delivery to island communities can often be more than 50% higher than to other parts of the country. That is why I say to the Minister today that a market that operates in such a way that it excludes this number of people, our own fellow citizens, from any meaningful access to it, is an instance of market failure.

The problem is that, as the hon. Gentleman said, these are all private companies, and they are doing what private companies do; but when a market fails, it ceases to be a matter just for the private companies involved and it becomes a matter for Government. When a market has failed there is a duty on Government and on the competition authorities set up by them to ensure that it is made to operate in a way that is fair to everyone. That is not happening at the moment and there is an opportunity now for the Government to initiate these discussions and to say to this industry, “You are operating in a way that is not fair to too many of our fellow citizens, and if you are not going to put your house in order, as manifestly has been the case for some years, the Government will take some action to make you do that.”

One of the things I always say when people bring me examples of this situation is that there are many local businesses that can often provide the same thing at a comparable price once the delivery charge is taken into account. But there are often many things that are not available for people to buy, especially in our smaller towns and more remote communities.

Ahead of this debate a magazine, Culture Vulture Direct, was given in to my office in Kirkwall. It included a piece of furniture that I thought could grace the Carmichael living room this Christmas. It is a lovely little piece of furniture: a two-drawer cabinet, painted grey, with a soft whitewashed finish. Who could resist such an idea? What really sealed the deal for me was that it is called the Orkney narrow two-drawer cabinet. Ideal! Who on earth could possibly not want to have that in their living room in Orkney? Unfortunately, it comes from culturevulturedirect.co.uk, which in relation to this piece of furniture states that delivery is to the UK mainland only. That tells you all you need to know, Ms Dorries.

--- Later in debate ---

[Margot James]

I did hear the intervention from the hon. Member for Strangford (Jim Shannon), and I will look into that.

Businesses have a choice through the universal service obligation, which the hon. Member for Ayr, Carrick and Cumnock (Bill Grant) reminded us about. Royal Mail can deliver parcels up to 20 kg, five days a week, at uniform rates throughout the United Kingdom. Regrettably, some businesses and retailers choose not to use that option, and the Government are not in a position to oblige business to choose a particular delivery supplier. There are no regulations that prevent differential charging for deliveries by companies other than Royal Mail. A competitive market should be a sufficient incentive to put pressure on charges applied by retailers and delivery operators, and consumer law requires traders not to mislead consumers or partake in unfair practices.

[Mr Carmichael]

The Minister comes to the nub of the matter: a competitive market should provide the solution. In fact, the way this market is operating now is the problem; competition will not be the solution. Will she look at the issue of market failure, on the basis that courier companies are now a quite different and discrete market from Royal Mail?

[Margot James]

If the right hon. Gentleman will allow me, I will come on to what I propose to do before I close.

We already have legislation in place under the general Consumer Protection from Unfair Trading Regulations 2008 and the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013, which apply to online purchases. They make it clear that information given by traders to consumers regarding delivery costs must be up front and transparent before a transaction is entered into. Any consumer who believes those rules are being breached should report it to trading standards through the Citizens Advice consumer service.

If misleading advertising about the cost of delivery is an issue, the Advertising Standards Authority, which has responsibility for ensuring compliance with the code of advertising sales, promotion and direct marketing, will act to ban or amend advertisements that have the potential to harm or mislead the public. Decisions on complaints are made public, and where necessary the ASA will report persistent offenders to trading standards for further enforcement action.

The Government’s view is that regulating prices, or intervening in how businesses and retailers establish their pricing structures, would not overall be in consumers’ best interests, because they are commercial matters. The market is highly competitive and innovative, with many different types of companies being selected by online retailers to provide delivery solutions. That has given rise to new ways of receiving packages, such as collecting them from more secure and more convenient locations and post offices.

The issues involve a three-way relationship between consumers, online retailers and delivery companies. As Members stated in the debate, the postal sector regulator, Ofcom, has just concluded a two-year study of parcel delivery surcharges that reflect the cost to operators and go beyond them. It found that some retailers apply a surcharge to consumers for delivery to certain locations, while others do not. It is therefore not clear that surcharges applied by parcel operators to online retailers are automatically passed on to consumers in all cases. The Government will consult Ofcom further on what might be done to improve competition. As highlighted by my hon. Friend the Member for Moray, the Consumer Protection Partnership, which brings together enforcement bodies and advice providers and is chaired by my Department, recognises that this is a priority that requires further work. It brings together a number of important bodies with an interest in this vexatious matter.

A number of Consumer Protection Partnership members, including Citizens Advice Scotland, the Consumer Council for Northern Ireland, the ASA and other enforcement bodies, along with Ofcom, are working together to undertake a review of parcel surcharging. That review is looking at the existing research, evidence and legislative framework, with the aim of improving compliance by online retailers with consumer protection law. It will also consider further proposals relating to concerns about the level and fairness of parcel surcharging, about which we have heard so much this afternoon.