Oral Answers to Questions

Alistair Carmichael Excerpts

Tuesday 12th December 2017 Commons Chamber

[Richard Harrington]

I agree totally with my hon. Friend. I am very impressed by the way in which the finance industry generally is adapting to the clean projects ahead of us.

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

Support from the Government will be required to get marine renewables such as wave and tidal power to the point of commercialisation. Renewables UK has come up with a proposal for innovation power purchase agreements. What is the Government’s view of that?

Renewable Energy Generation: Island Communities

Alistair Carmichael Excerpts

Tuesday 4th July 2017 Westminster Hall

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

I beg to move,

That this House has considered support for renewable energy generation in island communities.

I am delighted to serve under your chairmanship, Sir David, and I am pleased to welcome the Minister to his new role. He is one in a fairly long line of Energy Ministers during my tenure in the House—I am not entirely sure how many I have seen—but he brings with him a reputation for being a diligent and effective Minister, and I wish him well in his time in the Department. It is the convention on these occasions to say how pleased we are to have secured the debate. Although I will keep my tie on, I will break with convention by saying that I am not particularly pleased; I have been around this course for the past 15 years and I am immensely frustrated that debates of this sort are still necessary.

I think it will be helpful for those who might be watching our proceedings from elsewhere to be quite clear not only what the debate is about but what it is not about. It is not about individual projects that may be under consideration; there are a number in my constituency, including in Orkney and with Viking Energy in Shetland. To say that we need a strategy to unlock the potential of renewable energy generation is not to say that any individual project in itself is right or should go ahead, nor is it to be confused with the consultation currently being undertaken by Ofgem on replacing Shetland’s power station with a 278 km, 600 MW high-voltage direct current cable. That is exciting some comment at the moment, but it is a proposal of which I remain to be convinced; having been around this course for many years, I do not regard it as quite so difficult or challenging for that particular project to get a cable on the seabed.

The debate is about how Government and the forces of government can unlock the potential for renewable energy generation that we all know is there within our island communities. A study commissioned jointly by the then Department for Energy and Climate Change and the Scottish Government in 2013—the “Scottish Islands Renewable Project”—estimated that the Western Isles, Orkney and Shetland could between them supply up to 5% of Britain’s total electricity demand by 2030. That is a quite significant prize and it is within our grasp. However, it is something that we already know will only happen if we can get everybody working together.

In that connection, I welcome the intervention this morning from Councillor Donald Crichton, chair of the Sustainable Development Committee in the Western Isles Council, calling for cross-party consensus building on this. As he said, the Conservative party’s manifesto commitment at last month’s general election to

“support the development of wind projects in the remote islands of Scotland, where they will directly benefit local communities”

is an important and welcome step. Similarly, I also place on the record my appreciation of the efforts of Lord Dunlop of Helensburgh, who, in his time as a junior Minister in the Scotland Office and before, did a lot to push this particular issue.

That manifesto commitment was welcome, and I am pleased that it has survived the cull of so many other commitments from that unfortunate document. However, we are looking to the Minister for some outline of what the commitment will actually mean in practical terms. If you will forgive me, Sir David, there is quite a history here, and it is important that we remind ourselves of some of it. A lot of the issues that underpin this history come from the fact that Ofgem—for reasons that are understandable in relation to non-renewable technologies—has for some time adhered to a system of locational charging. For renewable projects, far from the centres of populations and the ultimate points of consumption, that does not necessarily make the same sense, so we have looked for different ways around that over the years.

Back in the days of the late Malcolm Wicks, we tried the idea of a cap on transmission charges. That was brought in by him and the then Labour Government, and was then extended by Chris Huhne when he was Secretary of State for Energy, but that in itself did not provide the solution we had hoped for. We then moved on to the new contracts for difference regime, and within that it was suggested that we could have a dedicated islands strike price. Unfortunately, at the point that that was being submitted to the European Commission for state aid approval, it was felt that it could be delayed by the islands element, so it was removed for later submission. It was resubmitted at a later stage and went through the pre-approval application process, which concluded some time around the end of 2015.

In the meantime, we had a general election, and the Conservative Government that came in in 2015 had a manifesto commitment to have a moratorium on onshore wind developments. The point at which the Government decided to go ahead with the CfD auction round that we are currently part of, without any provision for the islands, sticks in my memory for two reasons. First, it was the morning after the American people had elected President Trump, and secondly, I remember very clearly taking the call from the Secretary of State on my mobile phone while I was going through Edinburgh airport. However, a consultation period followed, which should have ended in the early part of this year and to which we I think we still await the Government’s formal response.

I remind the House of that history at this point because it is germane to the debate. Although the commitment in the Conservative party’s manifesto from last month is new, the issue is not—it has been within the machinery of government for some considerable time. Although we hope that that commitment will be given the green light, it is far from the case that the work needs to start from scratch. What is now needed is the degree of political commitment to implement the commitment and to tell us exactly what it means, because time is not in plentiful supply.

If provision for the islands of Scotland is to be included in the next round of CfD auctions, we are looking at something that has to go through the machinery of government and possibly even the state aid consent procedures in order to be in place by the end of next year, so there is a need for some degree of urgency in the approach to this. When the industry hears from the Minister later, it will be looking for a degree of clarity. We are not looking for the blueprint on everything that is meant by the manifesto commitment, but we want to hear some sort of outline or framework through which this can be turned into a reality.

What are we looking at here? Are we revisiting the idea of an islands strike price, or are we looking at something that might, somehow or another, find a mechanism for including onshore island generation with offshore wind? I do not know just how doable that would be, or how workable it would be from the point of view of the industry, but those are some of the ideas that have been floated. Alternatively, does the Department have some new mechanism that is going to be brought forward?

In any event, when in all those processes will the work start in order to obtain state aid approvals? I understand that the Government will proceed on the basis that, regardless of what happens with Brexit, state aid regulation compliance remains a feature of our regulatory landscape for the foreseeable future. Is it the Government’s aspiration that any projects that would be brought forward under this new scheme would be eligible for the next round of CfD auctions? If that is the case, will the Minister at this stage consult within Government to get a commitment that the next auction round will not go ahead unless and until this scheme is in place and island-based projects are able to compete?

[Ian Murray (Edinburgh South) (Lab)]

I am grateful to the right hon. Gentleman for allowing me to intervene in the limited time he has. Will he explain to the House whether there is any other route to market for island wind if there is no access to the next round of CfD funding?

[Mr Carmichael]

The answer to that depends on what we mean by “route to market”. There are other ways in which the energy generated can be used, and a lot of innovative work is being done in relation to non-distributing technologies such as the use of hydrogen, but for all intents and purposes, for the projects being considered at the moment across the country, there really is not. Those in the industry will have a view on that, and if they bring forward something we are not currently considering, I think we will all be in the market for hearing it.

Finally and most obviously, we will want to hear in fairly early course exactly what is meant by the expression “community benefit”, which has been around the renewables debate for as long as I can remember and has meant different things to different people in different places at different times. If it is to form part of policy, a clearer definition will be necessary.

[Derek Thomas (St Ives) (Con)]

I appreciate the opportunity to intervene. Does the right hon. Gentleman agree that a significant motivating factor for accelerating the development of renewable technology has to be reducing household energy bills as part of the community benefit? Those bills are often higher in island communities such as the Isles of Scilly in my constituency, owing to the inaccessibility.

[Sir David Amess (in the Chair)]

We are fresh from an election, and there are lots of new Members here. The usual procedure in a short half-hour debate is that there should be prior discussions with the person whose debate it is as to whether they are prepared to take interventions. Of course, there is nothing to stop any Member intervening on the Minister’s speech.

[Mr Carmichael]

I am grateful for that timely reminder, Sir David—although it has driven from my mind the question that the hon. Gentleman asked. Perhaps I could write to him about it in the fullness of time. It was about driving down price, which is one of the important opportunities of a more diverse and flexible market structure than the one we have. The issues faced by my constituents are not dissimilar to those facing the hon. Gentleman’s constituents in the Isles of Scilly.

We want to hear a bit from the Minister today about something beyond the situation regarding wind generation. We would like to see a willingness from the Minister, his Department and the Government to engage with the renewables industry beyond the onshore, or even offshore, wind sector. The United Kingdom already has a pipeline of wave and tidal stream projects that could be some of the most significant and forward-leaning projects to be found anywhere in the world. The estimates we have seen are in the region of £76 billion-worth of development by 2050. It is a significant global market for which we are doing the initial heavy lifting at this point. I have seen in my constituency, and especially in Orkney over the years, how the industry has pulled itself up inch by inch, but in recent years it has been pushed backwards by a lack of dedicated support for wave and tidal projects. I hope that the Minister, in his time in the Department, will have some proper regard for that.

We need a proper ring-fenced pot for wave and tidal power. A pot of that sort could be transformative. It would not need to be particularly significant in size, but for it to be guaranteed would make a massive difference to those involved in the development of these technologies and would give a very positive signal to those who are looking at bringing their projects to this country to develop them and to put devices in the water at places such as the European Marine Energy Centre in Stromness. I know the Minister has not yet visited that centre, but I strongly encourage him to do so in the earliest possible course, because there he would see for himself the potential that is being thwarted by the inclusion of wave and tidal projects within the pot for emerging or less established technologies, where they are competing with offshore wind.

To give an illustration of what is involved here, the offshore wind sector currently has 5,100 MW of installed capacity, with a further 4,500 MW under construction. The marine renewables industry, by comparison, has 10 MW of installed capacity. In that context, it is pretty straightforward and easy to see which is the genuinely less established technology that requires the support found in the title of the pot.

To bring down the costs is not rocket science. We have been here before and seen it with other low-carbon industries. We have to get the devices into the water. We see what happens to them there, learn the lessons, innovate, improve and repeat. That work is still being done by those who demonstrate a commitment to marine renewables.

We have a burgeoning supply chain. We have investment from local councils in Orkney, which I would be happy to show the Minister. As I indicated to him this morning, we have a sector that is desperate to re-engage with him and his Department. I hope that in the time he has in this position—which I hope is both long and productive—he will engage with the sector, because the opportunities that it brings to the future development and the industrial strategy to which the Government still lay claim are significant indeed.

--- Later in debate ---

[Richard Harrington]

I can assure the hon. Gentleman that we are aware of that issue and we are fully on it. I am happy to meet him if he would like to discuss it separately, but I have only five minutes left now and I do not want to break into the time for the key points that I need to raise.

There is a range of options for overcoming the issues that I have outlined, and I hope that by taking a pragmatic approach we can do so quickly. We need to understand the costs of the projects and the impacts on consumers’ bills. My officials have begun the process of updating the evidence base to set an appropriate strike price—the maximum that these projects could get paid for each unit of electricity that they produce. We must not forget that any additional costs that arise as a result of awarding support contracts are ultimately paid by households and businesses in their electricity bills.

Our approach to supporting new renewables, of competitive auctions with limits on the maximum price that we will allow, ensures that we support only the more cost-effective projects. That approach is not new but has been applied very successfully to other technologies, such as offshore wind. The industry is confident that the renewables support auction currently under way, whose outcome is expected in the coming months, should lead to a significant further drop in price. Whatever approach we take will need to work in this context of quite rapid price changes, and we want to see the outcome of our current auction before making decisions regarding the remote Scottish islands.

We have been through very clearly the importance of local support. Not everyone in the islands will support the development of the wind farms, but I am told that the majority of residents do. I understand that a poll of 1,000 Isle of Lewis adults commissioned by Lewis Wind Power found that seven in 10 supported having wind farms on their island. That is encouraging, but such support should not be taken for granted. It needs to be rewarded in the way that has been discussed—through community benefit funds and other systems. The Scottish Government have informed my officials that all the developers on the islands have committed to pay at least £5,000 per megawatt of capacity per year into such funds for the lifetime of a wind farm. That means that the Viking wind farm on Shetland, for example, could provide up to £1.85 million every year to the community. That money could be used for all sorts of projects: schools, local support groups, scout groups—the list is endless. Developers are also offering communities the opportunity to own a stake in projects, which is something that the UK and Scottish Governments are keen to see more of. Beyond direct income, we should also acknowledge the other benefits that these projects could bring. For example, jobs will be created not just during construction but throughout the lifetime of the projects.

Wind energy can play an important role for the country as a whole in producing the electricity we all need to support the running of our economy and our daily lives and in helping to reduce the harmful emissions associated with our energy systems. We all appreciate the commitment that island communities will have to make to ensure that we have access to long-term clean power. That is why it is absolutely right that they should benefit from hosting the projects.

We recognise that there are different ways of delivering the benefits, but of course it is important that any commitments that developers make are real and go beyond warm words. The Scottish Government are considering this issue closely, and I very much welcome that work. I look forward to meeting the right hon. Member for Orkney and Shetland and a group of developers, which we discussed outside the Chamber. That is a very good idea, which I am keen to progress as soon as possible.

I hope that my response today, in the short time that I have had, provides some reassurance to Members, as well as to the constituents we all represent, that the Government will support the development of onshore wind projects in the remote islands of Scotland, where they will directly benefit local communities.

Another very good point made by the right hon. Member for Orkney and Shetland is that we are not starting from scratch. We know that, and I do not mean just the manifesto commitment, but everything that went before.

[Mr Carmichael]

I understood the Minister to say earlier that the Government would not come forward with firm proposals until after the conclusion of the current round of contract for difference auctions. Is that indeed the case? May I ask him to take that away and consider whether it is really necessary? At the very least, given the pressures of time on us here, we should have everything ready to go once we reach that point.

[Richard Harrington]

I am very prepared to consider that point as the right hon. Gentleman has asked me to do. I hope that hon. Members will bear with us as I and my officials tackle the issues that I have outlined. I hope to come back very shortly with a decision. I say “very shortly” because I want that on the record and because of the respect in which I hold the right hon. Member for Orkney and Shetland. In the meantime, I will shortly be meeting the hon. Member for Na h-Eileanan an Iar to discuss these issues further, and I would be happy to meet any other Members of this House.

Question put and agreed to.

Post Office Closures

Alistair Carmichael Excerpts

Tuesday 25th April 2017 Westminster Hall

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

It is a pleasure to take part in the debate and to serve under your chairmanship, Sir Edward. I congratulate the hon. Member for East Worthing and Shoreham (Tim Loughton), who introduced the debate, and his colleagues on obtaining time from the Backbench Business Committee.

It is almost trite to say that post offices, and sub-post offices in particular, are central to the life of many of our small rural and village communities, but that is very much the case. Indeed, as we see the withdrawal of other services, such as clearing banks, from such communities, they will only grow in importance. Maintaining a vibrant and viable network of sub-post offices across our smaller and more rural communities is therefore now more important than ever.

In my time in Parliament I have seen a large number of post office closures, although whenever there is a structured programme of closures we, in Scotland, generally do quite well out of it; we do not see very many post offices close because we have a small population spread over a large area of terrain. However, there has been a constant process of attrition. Time after time, sub-post offices have closed temporarily because the person running them has retired or moved away or is simply fed up with managing the business—and who can blame them? In fact, I have one post office that is about to reopen in the next month or two in the village of Finstown in Orkney. It has been a Herculean effort to find someone to take it on, but it shows that it is still possible to achieve that if there is willingness from a handful of people to make it work.

It is difficult now to make a sub-post office work as a stand-alone business, and for that reason the few businesses that are left are generally being folded into shops, garages, cafés and other places. That is good for those businesses, but it requires a bit more flexibility and sensitivity on the part of the Post Office. I am thinking of the example of Stromness, the second largest town in Orkney, which for years had a stand-alone sub-post office. When that sub-post office was no longer allowed to continue, it was moved into a bakers and general store. The community does not feel comfortable, despite the best efforts of the shop owner, to go along and get their pensions on one side of the counter while standing next to someone buying their messages on the other.

The Post Office needs to be more proactive in supporting people who are prepared to provide a sub-post office service. I spent an hour on Sunday night with the owners of the Palace Stores in Birsay in Orkney—a great little local shop that also includes the post office. They tell me that they have probably lost about a month of post office business because of poor connectivity. The broadband connection that is necessary to run a sub-post office is unreliable. That obviously has more to do with BT Openreach and Fujitsu, which provide the internet services for the Post Office, and their inability to speak to each other, but it is a good example of how the Post Office could make a real difference if it took a more proactive role in supporting its sub-postmasters and sub-postmistresses. A small country shop in Orkney going to talk to BT will get treated as if it were a small country shop, but a big organisation such as the Post Office would be listened to and taken much more seriously and, in that very practical sense, it would be able to support people who have for years provided one of the most important services in the communities I have been privileged to represent. For that reason, I hope that the Minister will take to the Post Office management the message that that should be its priority.

--- Later in debate ---

[Margot James]

I have talked so far mostly about financial issues. It is undisputed that the Crowns were losing £46 million and are now breaking even. There are still some loss-making ones to deal with. I appreciate that changes of the kind we are considering are not easy, especially when they involve staff who have worked in a place for many years. I know that the hon. Lady has had a briefing from the Communication Workers Union, and I have had meetings with it on several occasions; I sympathise with its position. However, it is essential that the business should continue to manage its costs to ensure that it can meet the challenges faced by high streets, let alone the Post Office, now and in the future, as the way we shop and get access to services continues to change.

Several hon. Members made points about Government services, and I agree that in 2010 the Government had hopes that the Post Office could take over many more such services; but the rapidity with which some of them migrated to the internet meant that that hope did not bear enough fruit. The staff in Crown branches that are being franchised have the opportunity to transfer to the franchisee in line with the TUPE process; or they can choose to leave the business. The Post Office offers a generous settlement agreement, which reflects the hard work, commitment and dedication that many employees have shown over the years. However, I reiterate the point that a more efficient Post Office is able to support and supplement thousands of small businesses, as my hon. Friend the Member for South East Cornwall (Mrs Murray) noted; she spoke with great authority about the needs of people in her largely rural constituency. The Government take those needs seriously and have honoured a commitment to maintain a service, even where it is not viable on a financial basis, to people living in the rural parts of her constituency.

[Mr Alistair Carmichael]

Will the Minister give way?

[Margot James]

I will not give way; I have no time left, really.

I agree with the hon. Member for Washington and Sunderland West (Mrs Hodgson) that poorer urban areas also have a great problem with access to local services—it is not just rural areas. I am pleased to tell her that the Post Office is now focusing on that issue. The Post Office is revisiting some poorer urban areas where it closed branches 10 years ago, to talk to retailers about setting up a local post office counter. I hope that that will succeed in the hon. Lady’s area.

Construction Industry: Blacklisting

Alistair Carmichael Excerpts

Wednesday 8th February 2017 Westminster Hall

[Margot James]

I will come back to the hon. Gentleman’s third question in a minute. On the second question, the self-employed are covered by the legislation. I accept that it may be more difficult for them to exercise any powers, but they are covered by the Data Protection Act. A self-employed individual may make a complaint to the Information Commissioner’s Office.

On the more vexed question asked by the hon. Gentleman, there have been public inquiries in the past to do with people without power who have been affected by dreadful instances. That we are talking about a group of workers who are traditionally not very powerful and perhaps do not earn huge amounts of money has nothing to do with the matter. Personally, I think that such individuals are more entitled to protection and safeguarding than the wealthy and powerful.

The compensation on offer is, absolutely, for serious amounts of money. The Information Commissioner’s Office has taken action, and approximately £100 million has been extracted from the industry for a compensation scheme and to satisfy the results of court actions. The matters we are discussing are being taken very seriously.

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

On the question of a public inquiry, is not the point that much of the information that has come into the public domain has done so in an utterly random way? That is why there is a need for a powerful and systematic examination of whatever evidence might be out there.

[Margot James]

We are now in a position where compensation and redress are available, and there is an absolute law against anything similar happening again. For the time being, we are not considering a public inquiry because action was taken back in 2010, as I mentioned. The Information Commissioner has also now announced a call for evidence. Pending the outcome of that, we will consider the framework and whether it is still appropriate. For now, no public inquiry is under consideration, but we will see what happens after the Information Commissioner’s call for evidence and its subsequent report.

I encourage anyone who thinks that they might have been blacklisted by the awful Consulting Association and who has not already done so to get in touch with the Information Commissioner’s Office through its helpline. Furthermore, the Trade Union and Labour Relations (Consolidation) Act 1992 prohibits an employer from refusing employment because someone is a union member, so that is illegal. Individuals who believe that they have been discriminated against can, as I said, bring a claim at an employment tribunal. Dismissal for such a reason would automatically be unfair.

I understand the desire for the blacklists regulations to be applied retrospectively, but in 2010 the Government decided that that was not appropriate. The compensation package is available, blacklisting is now against the law and the Government’s response to the consultation was clear about a new, specific criminal sanction not being proportionate. The Government will ensure that any allegations of blacklisting are investigated by the appropriate authorities.

Industrial Strategy Consultation

Alistair Carmichael Excerpts

Monday 23rd January 2017 Commons Chamber

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

If the Secretary of State is serious about building an industrial strategy that works for the whole country, and that encourages and maximises the opportunity for research and innovation, there must be space in it for the development of marine renewable energy—wave and tidal power. World-leading work on that is being done in my constituency at the European Marine Energy Centre. Will he visit and see for himself the way in which our island communities can help to build the strategy that he says he wants to create?

[Greg Clark]

I would be delighted to visit the right hon. Gentleman’s constituency—it is quite a time commitment, but I am sure it would be worth it. He will see when he reads the Green Paper that there are a number of sources of support for innovation. Obviously, in a competitive way, the research and development funding is available for scientists and researchers to bid for. There is also a chapter on the green economy that makes suggestions on how we can ensure that we get industrial advantage as well as keeping costs low for renewables. Both routes might be applicable for wave and tidal technologies.

Smart Meter Roll-out

Alistair Carmichael Excerpts

Tuesday 6th December 2016 Westminster Hall

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

I beg to move,

That this House has considered smart meter rollout across the UK.

It is a pleasure to have secured this debate and to serve under your chairmanship, Mr Gapes.

I think—or at least I hope—that the subject of the debate this morning would not be described as a matter of political controversy; it is a matter on which there is broad agreement. Essentially, I approach the debate on the basis that the Government are doing a good thing in the smart meter roll-out and, as a parliamentarian, I think it is our duty to explore whether they are doing it as well as might be possible. In the early days, we estimated that the smart meter roll-out could save the UK economy as a whole something between £17 billion and £40 billion between now and 2050. Obviously, there are a tremendous number of variables in an estimate of that range and over that period of time; I am one of those people who thinks that the upper end of that estimate could be conservative.

Before the Select Committee on Energy and Climate Change was dissolved, I had the pleasure of serving on it. Our last report on the energy revolution looked at what is being done in other parts of the world and, in particular, on the west coast of America in California and Seattle. It is apparent that many technologies that will assist consumers in the demand-side management of their energy use are not that far over the horizon. The foundations that we could lay through the smart meter roll-out could be built on in a significant way, both from the point of view of consumer flexibility and choice and in contributing to some of the wider issues about fuel poverty and climate change.

The Government have a target of 100% smart meter roll-out by 2020. What I want to explore this morning is whether that target is likely to be met, and whether it may be sensible at this point to reappraise the desirability of meeting that target. Given the history of the project to date, sticking to that 2020 deadline may bring some unexpected consequences. Energy UK has told me that so far its members have installed in excess of 3 million smart meters. That is significant progress, but when it is measured against the fact that we have in the region of 27 million households, and there may be in the region of 53 million energy meters to be installed, we see the scale of the challenge that the Government now face.

My first question for the Minister, when he addresses this issue, is: what is the likelihood that we are going to get to the 100% target by 2020? At this stage, are the Government looking at the possibility of reviewing it? What conversations are they having with Ofgem and what dialogue do they have with the suppliers in the industry? From the various energy companies and consumer groups that I speak to, such as Citizens Advice and Which?, there is growing consensus that the target will not be met but that, with a determined adherence to it, we could bring a range of unintended consequences.

This is a good time to look at these things again, when there is not a great deal of political heat surrounding the subject—no pun intended. However, if we get to the point where we have to review the target in two or three years’ time, at that point, politics will come into it. I am no better than anybody else; I will be there in two or three years’ time with the Hansard of today’s debate saying, “You were told at the time that you needed to do something. Why didn’t you?”

In many areas of the country, the key to the roll-out comes down to connectivity, which has indeed been problematic for the project and the concept as a whole. This ties into other areas of Government policy encouraging connectivity, especially for the more remote and rural areas. We know the commitments that the mobile phone operators have made in terms of expanding their coverage and getting 3G and 4G coverage across the whole country. They are now looking at the Airwave infrastructure that has been put in place for the emergency services, seeing the competitive edge that has been given to EE, which is the company rolling that out, and saying, “Surely we should be allowed to use these masts as well.” This is an area where public money is being put into infrastructure for one purpose, when it could have a benefit for another purpose. Surely, given that it is all the taxpayers’ pound, someone within Government should be joining up the dots to ensure that that does happen.

The issue is the limitations of what is available through the connectivity available to our constituents. It does not meet the expectation and the promises. The danger is that something that is a thoroughly desirable proposal in concept, could be undermined by poor consumer experience.

I suspect that, if we drew a Venn diagram of areas with poor connectivity and areas where we have a high number of households living in fuel poverty, we would find a substantial overlap. That is particularly acute in my own constituency. In the Northern Isles we have poor housing stock; long, dark, cold winters, because of our geography; and an ageing demographic. The Scottish Government’s most recent figures put levels of fuel poverty at 63% of households in Orkney and 53% of households in Shetland—the Western Isles were also up there at 62%—measured against a Scottish average of 35%. In pensioner households, in Orkney the figure is 85%, for the Western Isles it is 75% and in Shetland it is 44%.

Smart metering is obviously not going to be the panacea that cures fuel poverty, but it is important as part of the suite of options available to us. It is ironic that those who stand to benefit most and have the greatest need are, again, being left behind in the roll-out process. A bit of political direction, understanding that this is not going to succeed if it is just left in the major conurbations and urban areas, and that when we say 100% across the whole of the UK, it needs to mean exactly that, would be of enormous assistance. What is being done by the Minister and his Department to ensure that those of us in what would be termed as hard-to-reach areas are not left behind?

One of the major recent challenges, which is related to the connectivity issue, has been the performance of the Data Communications Company. That is the central resource needed to support smart meters. Just before the last election, the then Secretary of State signed off a replan of the DCC timetable. That left us with an aim to deliver the first operational services from 2016, with a central planning assumption of August 2016 as opposed to the original one of December 2015. The DCC, which is managed by Capita, has since drawn down all its available contingency and will have delivered all its final releases beyond the “maximum” agreed contingency, but we still have no confirmed date for the final release. Inevitably, given that we are now in December 2016, there will be slippage into 2017. Even if we take the optimistic view that we may have operational roll-out of DCC-enabled services by April 2017, that still leaves us with, at best, three years and eight months to deliver the remainder of the target. That is how tight things are.

The delays in the DCC have other consequences. The meters that have been rolled out are, for the most part, the first version of the smart metering equipment technical specifications—SMETS1, as the jargon has it—and a range of problems comes with that. SMETS1 has been rolled out because that is the only thing available at present, but SMETS1 was only ever intended to be a low-volume learning experience. The lessons have been learned and the limitations have been seen.

Suppliers know the issues that come from SMETS1 meters and want to go on to SMETS2 meters. It is frustrating for them not to be able to. Again, we risk damaging the concept by continuing to roll out something that we know to be suboptimal. SMETS1 meters do not have the flexibility of SMETS2 technology and, in particular, do not allow the switching of suppliers, which consumers regularly hear messages about from Government. Because of that technical issue, something in the region of 130,000 of the 3 million-plus smart meters that have been rolled out are currently operating dumb as a consequence of changing suppliers.

There have also been issues about pre-payment customers—people have lost credit and payment card functionality has been lost—and we know that there will be other technical issues. There is still no industry-wide solution for what they call multi-dwelling units—what to you and I, Mr Gapes, would be a block of flats. There is a lack of dual-band communication hubs, which use a frequency of 868 MHz and which are important for thick-walled properties and for reaching over long distances.

The challenges of the DCC timetable have led suppliers to whom I have talked to conclude that they are unlikely to meet the technical challenges until probably mid-2018. With pressure, they may be able to pull that forward but, again, it all takes us closer to the 2020 deadline and makes it all the more difficult to meet that. The insistence on the 2020 deadline will bring a range of other issues for suppliers, such as equipment and training of installers. Something that can take up to 26 weeks and cost the supplier in the region of £21,000 will become an even greater pressure on them if they are working to bring in a greater number of installers to meet that somewhat artificially imposed deadline.

Essentially, as I said at the start, the roll-out is a good thing, which the Government should be doing. We should not, however, pursue a timetable that will be counter-productive to achieving what we all know and agree is a good thing. To take a step back, I suspect that, since May 2015, there has been a lot of churn in Government energy policy, with a lot of changes, particularly in relation to subsidies for renewables and other areas. A lot of high-level political decisions have had to be taken, and the Department of Energy and Climate Change has been folded into its current home. The programme looks as though it might have slipped through the cracks of Government. It needs somebody to take it up, to give it direction and to ensure that, at the end of the day, we have something that merits and is deserving of the original vision we had when we embarked on the programme. It needs a political hero, and I can think of no finer a political hero than the Minister.

--- Later in debate ---

[The Minister for Climate Change and Industry (Mr Nick Hurd)]

It is a huge pleasure to serve under your chairmanship, Mr Gapes. I congratulate the right hon. Member for Orkney and Shetland (Mr Carmichael) on securing a debate on an issue that will touch and affect every home in the UK. It has drawn quite a crowd of visitors, whom we should welcome. I also welcome the new hon. Member for Richmond Park (Sarah Olney) to her place. I thank the right hon. Member for Orkney and Shetland for the constructive way in which he framed the debate, which is exactly what I would expect given his record in the House. I acknowledge the valuable contribution of my hon. Friend the Member for Wells (James Heappey), who, as I have said on Twitter, is one of the more thoughtful Members of Parliament on the subject of energy. He is always interesting on the topic.

As the right hon. Member for Orkney and Shetland said, the roll-out is a good thing and a long overdue upgrade of an outdated system. I am talking about not just meters—the technology for which is basically 100 years old—but how smart meters fit into a broader and more ambitious strategy to upgrade our energy system, as my hon. Friend the Member for Wells alluded to. Liberal Democrat Secretaries of State in the coalition Government, in which both the right hon. Member for Orkney and Shetland and I served, wrestled with the trilemma of security, affordability and increasingly clean sources of energy. We are also dealing with the matter of how to make the system smarter and more flexible so that it delivers a better experience for our constituents—perhaps by doing away with the nonsense of estimated bills now that we are in 2016, and with calls to call centres. We desire to give our constituents a greater sense of control and, of course, the opportunity to save money.

The roll-out is not the silver bullet for fuel poverty—that is entirely right—but the data suggest that the people with the first wave of smart meters are saving about 3%, according to British Gas surveys. Those are not insignificant sums of money. For our constituents on prepayment schemes, smart meters are a better system for the ability to top up and to read balances quickly. We see smart meters as the foundation of the smart, flexible energy system that we are working towards and to which we are committed. The Secretary of State recently launched the consultation with Ofgem. That is the direction of travel, and we are extremely committed to it because there will be significant benefits to the country—not just to our constituents, but to the people we rely on to supply energy.

There is a smarter future ahead, and that is what we are working towards. The roll-out is unequivocally a good thing, but the right hon. Member for Orkney and Shetland was right to identify some big challenges, none bigger than meeting the roll-out target. However, I associate him with being someone of optimism and ambition—he is a Liberal Democrat, after all—so I say to him that we should not give up on our ambition at this stage. There is no basis on which to do so. It is a challenging target but, as he will know as an experienced politician, if we take our foot off the accelerator, people will read the wrong signals. We want to send a strong signal of our commitment to ensuring that every household and small business is offered a smart meter by the end of 2020. We will follow the evidence and see what it tells us about the feasibility of the target in a few years’ time. The right hon. Gentleman may be in a position to say, “I told you so”—he has teed that up nicely—but I hope not. Now is the wrong time to send a signal of slipped ambition.

There are other challenges, including making the early smart meters interoperable. The right hon. Gentleman is entirely right about that. We should not want our constituents to trade off the opportunity to get a better tariff against the opportunity to retain smart functionality. I assure him that the DCC has begun a project to enrol the early SMETSI 1 smart meters from 2018 in order to make them usable by all energy suppliers, rather than just the one that initially installed them. It is an issue, but one that will go away.

Another challenge that the right hon. Gentleman rightly highlighted is reaching all consumers, including those at risk of being left behind. That requires both a wide area network and a home area network. The DCC is contracted to provide wide area coverage to 99.25% of meter points in Great Britain from 2020, which is, incidentally, greater than for current television and mobile services. There are big challenges, but it is wrong to slip back on our ambition, not least because we can point to good progress being made.

The right hon. Gentleman mentioned a figure of about 3 million smart and advanced meters being in operation. Actually, as of June 2016—these are slightly out-of-date data—the official number is that there are more than 4.2 million smart and advanced meters operating under the programme. Again, we now have some data from the quite large British Gas survey, which show what cost savings the roll-out is delivering for our constituents. The current run rate is about 3%, which is slightly higher than expected. We now have a sense of how popular the smart meters are, with eight out of 10 people recommending them and high levels of customer satisfaction. We have also updated the latest cost-benefit analysis.

[Mr Alistair Carmichael]

I completely accept what the Minister says about the signals that can be sent by taking the foot off the gas, to use his analogy, but there are technical issues coming down the tracks. The suppliers are all telling us that the roll-out could take them into the middle of 2018. What is the Minister doing to engage with the suppliers to bring that date forward?

[Mr Hurd]

We are not naive about this. We have set a demanding challenge, so the ongoing conversation with suppliers to talk through some of the practical differences is an essential, fundamental part of the Government’s responsibilities and Ofgem’s responsibilities. I am keen to mention that we have recently published the latest cost-benefit analysis of this ambitious programme, which suggests that we are looking at a significant net benefit of about £5.7 billion for the roll-out—including through supplier cost savings, system benefits and energy efficiency for our consumers. That all leads me to reassert the fundamental point that we remain committed to the programme. The right hon. Gentleman suggested that ambition might have slipped a bit and that the scheme might have been a ball dropped by a busy new Department. That is absolutely not the case. The fact that the Secretary of State recently announced an ambitious consultation about the direction of travel towards a smarter, more flexible system places the roll-out in that context. It is a top priority for the Department.

I want to give the right hon. Gentleman some reassurance about his constituency. He spoke powerfully about the levels of fuel poverty there, and the data are striking. He was candid about the fact that this agenda is not the whole solution to that challenge, but his desire to ensure that no communities are left behind in the process is laudable, and is an aim that is absolutely shared by the Government.

In response to the questions on whether remote rural areas of Scotland be excluded from the roll-out and what the planned communications coverage will be, I would like to place on the record that Arqiva is contracted to provide network coverage to at least 99.5% of Great Britain’s premises in the north region, which covers Scotland, by the end of 2020. That level of coverage compares favourably with other technologies such as mobile and broadband networks. Arqiva is on track to deliver its contractual coverage commitments, having already achieved coverage of more than 80% of premises in the region. Building the smart metering wide area network in Scotland has led to considerable progress and, subject to detailed planning, the DCC is confident that the right hon. Gentleman’s constituency will have a high level of premises coverage. There is a licence obligation on the DCC to strive—best efforts—for 100% coverage.

I hope that I have given the right hon. Gentleman some reassurance regarding his constituency and the fact that, despite some slippage in timetable—a matter of a few months, which, in the scheme of things and against the backdrop to which he alluded, is not the end of the world—the Government and the new Department attach the right level of priority and importance to the roll-out, which we sincerely believe will deliver a much better experience for our constituents in interacting with the energy systems on which they depend. The roll-out is the foundation for a much smarter energy system as we move to upgrade the energy infrastructure of the country after so many years of dithering and delay. It is absolutely at the core of that strategy.

Question put and agreed to.

Living Wage

Alistair Carmichael Excerpts

Thursday 3rd November 2016 Commons Chamber

[Margot James]

I shall be dealing later with some of the points that the hon. Lady made in her speech about other benefits, and the overall impact on wages and take-home pay, but she should bear in mind that 8.2% is not very dissimilar to 10%. That does not mean that I am defending what many people have described as excessive pay rates at the top end. Indeed, the Prime Minister has asked my Department to produce a discussion paper on corporate governance. She has made it clear that she expects some of that top-end remuneration to come under the microscope, especially when it does not seem to reflect improved corporate performance.

I have listened carefully to representations about the level at which Governments should set the national living wage and the way in which overall pay should be managed. Higher pay needs to be affordable for employers, because if they cannot afford to pay it they will not hire workers and, worse still, may even lay workers off. The Low Pay Commission is led by an expert panel and is absolutely independent of the Government. We will continue to take its expert and independent advice, which will help us to set the national living wage. The commission will make its recommendations after careful consideration of the state of the economy to ensure that we can afford to make the living wage as high as possible without costing jobs. It will gather extensive evidence across the economy from workers, their representatives and employers, and will then reach an independent view.

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

As the Minister will know, the merchant marine service has been one of the most difficult areas of employment when it comes to enforcement of the national minimum wage. When will we have the updated guidance on the application of the minimum wage to seafarers that we were promised?

[Margot James]

I will ask Her Majesty’s Revenue and Customs, which is the enforcement body for the minimum wage, what stage its investigation has reached. As one of my hon. Friends pointed out earlier, HMRC investigates every single complaint for underpayment, but it also mounts sector-based inquiries into such matters as the circumstances of seamen.

Let me now deal with some of the overall issues raised by the hon. Member for Mitcham and Morden. I share some of the concerns that have been expressed today. We know that employers are responding to the national living wage in a range of ways, depending on the markets in which they operate and the current state of their businesses. The extent to which they may be able to absorb the extra costs from profits, pass them on in the form of increased prices, increase the productivity of their staff or reduce other costs will vary between and within sectors. We think it essential for employers to ensure that their reward packages are competitive, and that they reward staff for their work in order to retain and develop workers who are fundamental to their success.

Ultimately, however, although we can set the minimum wage, it is for employers to decide how to manage those increases in their costs. Any changes in contracts must be agreed with workers, and must be in line with the law at the very least. Any instances of unfair dismissal that might result are, of course, a serious matter, and would be dealt with through employment tribunals, but employees could always contact the Advisory, Conciliation and Arbitration Service for guidance at the same time.

It is worth noting that changes in pay structures in the retail sector can reflect long-term changes to introduce greater consistency, perhaps the sort of changes that we have heard about this afternoon. Some may be coincident with, but not a consequence of, the introduction of the national living wage, and I do not accept that they are in any sense loopholes. The Government will continue to set a minimum hourly wage, and remuneration over and above that rate is a contractual matter between the employer and the employee.

--- Later in debate ---

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

I am pleased to have this opportunity to contribute to this important debate, and I pay tribute to the hon. Member for Mitcham and Morden (Siobhain McDonagh) for securing this time from the Backbench Business Committee. I am grateful for the many examples that she and others have brought to the House today. I do not in any way seek to diminish those examples when I say that the people I am about to speak about would probably bite your hand off if they were offered the terms and conditions that the hon. Lady and others have described. I want to talk about the pay levels and employment practices on offer to our seafarers that are all too common in the maritime sector in the United Kingdom.

The recent detention of two vessels operating in the North sea—the Malaviya Seven and the Malaviya Twenty in Aberdeen and Great Yarmouth respectively—lifted the lid on payment and employment practices that are frankly scandalous, and from what I hear from many of those who work in our merchant marine in the North sea, this is just the tip of the iceberg. These practices are much more widespread and there is much more to be found. To put it bluntly, if these practices were happening on dry land, enforcement action would be taken immediately. They would not be tolerated. Because they are happening at sea, however, they are somehow out of sight and out of mind. I hope that when the Minister speaks to representatives of HMRC, she will impress it upon them that that attitude has to change.

I want to bring to the House’s attention the situation regarding two ferries that run lifeline freight services to my constituency from Aberdeen. The Helliar and the Hildasay are operated by Seatruck Ferries, but they are on contract to Serco, which operates the Scottish Government-funded lifeline ferry service. The RMT tells me that in 2014, when it last had sight of the contracts, some 20 ratings on the two ferries were being paid £3.66 an hour. The ferries’ journeys start in Aberdeen and finish in either Orkney or Shetland in the Northern Isles, but the company is able to pay that rate because it is deemed to be operating wholly outside UK waters. It beggars belief. It is wrong not only for the ratings, most of whom are probably Estonian nationals, but for UK seafarers whose jobs and livelihoods are being undercut by such employment practices. It is outrageous that a taxpayer-funded service is being operated in a way that undermines the opportunities of British seafarers to get working conditions and employment rates to which they would otherwise be entitled.

Seatruck Ferries recently said:

“Seatruck Ferries operates in a worldwide shipping market where NMW”—

national minimum wage—

“application in isolation would place the company at a serious disadvantage in relation to its competitors.”

It would appear that what it is doing is illegal, but, frankly, that is sheer sophistry. It is a scam that the Government could stop if they were minded to take the necessary action to stop it. That is why the point about the Government guidance on the application of the national minimum wage that I made in an intervention on the Minister is not just important, but extremely urgent. The practice may be bad, but from what I hear an awful lot worse is going on in the North sea on ships that have been chartered to the oil and gas industry.

I will not detain the House much longer because I do not have the time, but in evidence to the Energy and Climate Change Committee I challenged the chair and chief executive of the newly created Oil and Gas Authority to bring the operation of the maritime sector in the North sea within its remit, but they flatly refused. It seems to me as though they knew that there was something nasty underneath the stone and for that reason they were not prepared to lift it.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

The time limit is now four minutes.

Nissan: Sunderland

Alistair Carmichael Excerpts

Monday 31st October 2016 Commons Chamber

[Greg Clark]

I am delighted that my hon. Friend has mentioned that. One of the great opportunities in industrial strategy is to combine our world leadership in offshore wind renewable energy with our commanding position in the automotive sector, and to bring them together so that when it comes to electrical vehicles and battery storage, we can lead the world, which is what we intend to do.

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

The Secretary of State deserves credit for a significant and substantial achievement, but special deals for the car industry or the financial services sector offer little comfort to the thousands of small businesses the length and breadth of this country—which, incidentally, goes north of Newcastle—that depend on exports for their livelihood. What will the Secretary of State do to ensure that these small businesses, which are the lifeblood of so many of our communities, get the same access to him and his Department as has clearly been given to the big boys in the multinationals?

[Greg Clark]

I am delighted that the right hon. Gentleman asks that question because one of my first visits as Secretary of State was to Aberdeen, where I had a very successful and important meeting with its chamber of commerce. Small businesses in Aberdeen and Aberdeenshire were talking about what they wanted to achieve from the Brexit negotiations. I think that I am the first Secretary of State in the Department to have appointed Ministers with regional and national responsibilities in relation to the devolved Administrations, which reflects the importance of building small businesses and every part of the United Kingdom into the industrial strategy.

Sellafield

Alistair Carmichael Excerpts

Tuesday 6th September 2016 Commons Chamber

[Mr Hurd]

I am grateful to the hon. Lady for giving me the opportunity to reaffirm again the Government’s appreciation for the extremely challenging and incredibly important work that is done by people on the site. It is deeply impressive that, given the complexity of the site and the legacy—this is really difficult stuff—Sellafield’s safety record over the past three years is the best that it has ever been. I quite understand why residents and people working at the site may have been upset and disturbed by the programme last night, but I hope that my statement and corroborating statements from other Members have reassured them that as far as the Government are concerned—not least because the independent regulator attaches enormous importance to Sellafield, as reflected in the resources committed to monitoring the site on a very proactive basis—Sellafield is safe.

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

I appreciate that the Minister has a duty to offer reassurance, but I have to warn him that the content and tone of what we have heard today come dangerously close to complacency. The people who have been responsible for the historical errors of judgment and underinvestment are still involved in the industry today. These words will be heard with concern in the north of Scotland, where we are seeing nuclear waste shipped out from the former Dounreay plant. Will the Minister have the risk assessment for that operation scrutinised independently of the people who were responsible for making the plans?

[Mr Hurd]

The right hon. Gentleman is an experienced Member of Parliament so I take seriously his warning about tripping over a boundary into complacency. I said at the start that I was determined not to do that. What I am trying to do is reflect genuine empathy with people who live close to the site and who work on the site, who will have been unsettled by the programme last night, which raised nothing new and which, I am keen to stress, in the eyes of the regulator does not change its position in relation to the safety of Sellafield.

The right hon. Gentleman will forgive me if I give some priority to that. He knows the reality of the situation at Sellafield, which is that as a legacy of the cold war, vast amounts of nuclear waste, dumped with no plan for how it would be disposed of safely, languished for decades without anyone properly tackling the problem. The priority for us is to do what we are doing now, which is to continue working to turn that round and clean up Sellafield as safely, cost-effectively and quickly as possible.