(1 week, 4 days ago)
Commons ChamberUrgent Questions are proposed each morning by backbench MPs, and up to two may be selected each day by the Speaker. Chosen Urgent Questions are announced 30 minutes before Parliament sits each day.
Each Urgent Question requires a Government Minister to give a response on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
(Urgent Question): To ask the Secretary of State for Energy Security and Net Zero if he will make a statement on the closure of the Prax Lindsey oil refinery.
In my oral statement on 30 June, I informed Parliament of the deeply disappointing news that the Prax Lindsey oil refinery had entered insolvency and that the court had appointed an official receiver to manage the situation on the site and determine the next steps. Since then, we have worked urgently to ensure the safety of the refinery site and the security of fuel supplies, and to protect workers. That also allowed time for bidders to express an interest in the site. Following a thorough process, the official receiver has rigorously assessed all the bids received and concluded that sale of the business as a whole is not a credible option.
I visited workers at the site on 17 July, and I will be meeting them again shortly today. I know that this will be hugely disappointing news to them, their families and the wider community. They are all in my thoughts at this time. A package has been offered to all directly employed at the refinery which guarantees their jobs and pay over the coming months. Alongside the usual support that is offered to workforces in insolvency situations, the Government will also immediately fund a comprehensive training guarantee for those refinery workers to ensure that they have the skills needed and the support to find jobs in, for example, the growing clean energy workforce.
Furthermore, we understand that the official receiver continues to explore various proposals for assets on the site. I therefore remain hopeful that a solution will be found that creates future employment opportunities at the Immingham site. The refinery will continue to process crude for the rest of the month, and the official receiver will continue selling refined products for a number of weeks, giving buyers time to adjust their supply chains.
The former owners left the refinery in an untenable position and gave the Government little time to act. That is why the Energy Secretary immediately demanded an investigation into their conduct and the circumstances surrounding the insolvency, and why I have repeatedly called on the owners to do the right thing and provide financial support to the workforce at this difficult time.
When the Prax Lindsey refinery closes its doors in October, there will be only four oil refineries remaining in the United Kingdom, following the news about Grangemouth a few months ago. This is the second oil refinery to close in the United Kingdom in only six months, prompting serious questions about our energy security and resilience. In Immingham, people are waking up today to the reality that redundancies are now inevitable. It is estimated that about 625 jobs will be lost. For the community in Lincolnshire, that is seismic.
As the Minister said, we are aware of the long-standing financial issues with Prax Group, and I reiterate my support for the Government’s investigation into its directors. What progress has been made on that investigation? When does he expect the report to be made?
We cannot escape the fundamental crisis facing our manufacturing sector. As Jim Ratcliffe has said, the sector is “facing extinction” because of
“enormously high energy prices and crippling carbon tax bills.”
The Minister’s Department knows that to be true and has exempted some industry from paying the net zero levies, recusing specific businesses from paying the extortionate green subsidy costs. That is a ridiculous situation that sees subsidies being paid by the Government to businesses to exempt them from the charges being imposed by that very same Government—we are truly through the looking glass. The Department is wilfully talking down the oil and gas industry with hostile language and an impossible fiscal regime while overseeing the deindustrialisation of the United Kingdom through the perpetuated high cost of industrial energy. This is not simply managed decline; it is accelerated decline driven by ideology and steered from Whitehall.
Will the Minister tell us what work is being done to ensure the future of the four remaining oil refineries in the United Kingdom? What, if any, assessment has been made of the UK’s resilience, given the steep reduction in our refining capacity over the past six months? What, if any, assessment has been made of the increased reliance on imports that will be necessary as a result of the reduction in British refining capacity? Will he please change course and start speaking up for our oil industry—upstream and downstream—which sees from the current Government a disregard for it, its workers and the communities that rely most on it?
I agree with the shadow Minister, who was right to point out the impact that news like this will have on the workforce, who are hearing it this week, as well as the wider impact it has on their families and the community. That is why it is so important that we provide that support.
On the investigation, there is not much that I can update the House on at the moment. The Insolvency Service is carrying out that investigation, and it would be wrong for Ministers to interfere in that, but we have obviously given the direction that we expect it to be completed as quickly as possible. Given the mess we found the company in, I would not be surprised if it takes a bit of time for the investigation to get to grips with what was going on there, but that is for the Insolvency Service to resolve.
On resilience and fuel supplies, we have been really clear throughout that we have done everything we can to try to find a buyer to keep the site operating as a going concern, which is important for the workforce as well as for local resilience, but Prax Lindsey oil refinery comprises about 10% of our remaining refinery capacity; Phillips 66—a much larger refinery—is immediately next door. In the past few weeks, we have already seen fuel supplies adjusted and commercial contracts renegotiated. Although we clearly wanted the refinery to stay open, our assessment suggests that there is not an immediate risk to fuel supplies locally or in the wider area, but we will continue to monitor that.
On the shadow Minister’s wider points, I will first repeat what I have said on a number of occasions: we do support the oil and gas industry. I have spent a lot of time with the industry understanding some of its challenges, which are long standing, particularly around jobs lost over the past decade, and we consulted widely on what the future of energy in the north-east should look like to give confidence to the industry. We inherited the fiscal regime from the previous Government. We have consulted quickly on what the future of the energy profits levy should look like to ensure certainty about the fiscal landscape. The Treasury will respond to that consultation in due course. We want to give certainty, but we also want to recognise that this is an industry in transition, and burying our heads in the sand and pretending that that is not the case does nothing to protect the workforce in the long term. We will therefore continue to invest in the new industries of the future and in that wider strategy.
Refineries are important to our economy and will continue to be important. That is why I brought all of industry together in a roundtable to discuss the challenges facing the refinery sector. I was shocked to discover that that was the first time there had been such an invitation from the Government in 13 years. I ask the shadow Minister to reflect on who was in power for 14 years.
(2 weeks, 4 days ago)
Commons ChamberThe British oil and gas industry is a resilient sector—it has had to be, given this Government’s actions over the past year—and it takes a lot to shock it, but shocked it was when, on 2 July, sadly the Energy Minister claimed to the Scottish Affairs Committee that there was no “material difference” between oil and gas imports and production from the North sea. Might the Secretary of State take this opportunity to apologise and clarify those remarks, because thousands of workers in the energy industry supply chain in Aberdeen and across the UK are very worried that the Department has such scant regard for them, their work and this world-leading industry?
First of all, Mr Speaker, let me congratulate the hon. Gentleman on his promotion to shadow Secretary of State. [Laughter.] On the specific issue he raises, we will take no lectures from the Conservatives. Some 70,000 jobs were lost in the North sea on their watch. And here is the difference: we are building the future. The Acorn project was talked about for year after year by the Conservatives but nothing was done. This Government are delivering.
The Secretary of State will not apologise. That is absolutely fine. The industry already knows that this is a Government who want nothing to do with it, and who take every opportunity to talk it down and make every effort to shut it down. In that same session last week, the Minister who is sitting to the Secretary of State’s left also claimed that
“much of the gas that is extracted from the North sea is exported”.
That is simply not true: 100% of all the gas extracted from the North sea is used in Britain. The Secretary of State knows that, so why is he so determined to talk down this industry, spout falsehoods and myths, drive investment out of the UK, rely more on imports and, crucially, cost people’s jobs and drive the skills we need out of this country? That is exactly what he and his colleagues are doing.
Here is the difference between them and us. They would keep us hooked on fossil fuels for time immemorial. They have learned not a single lesson from the disaster they inflicted on this country: family finances ruined; business finances ruined; public finances ruined. A year on, there is not a word of apology.
(2 weeks, 5 days ago)
Commons ChamberIt is a rare pleasure to see the Secretary of State at the Dispatch Box today, given that he turned down the opportunity to defend his plan for clean power by 2030 or the report from the National Energy System Operator that was published earlier in the year. Perhaps that is why we are being given a slightly longer statement than usual, making up for missed opportunities. However, we welcome the Met Office’s report, which makes for interesting reading. I think we can all attest to the fact that Britain today is warmer than it was before.
We all agree that the challenge of the changing climate is vast, and it is one of many challenges facing the United Kingdom today, but I must tell the House and the right hon. Gentleman that ridiculous statements such as that made this morning by the Environment Secretary, labelling opponents of net zero “unpatriotic”, is as offensive as it is risible, and does nothing to advance the cause. I must also express my growing sense of unease, and that of many others, about the language emanating from those surrounding this Secretary of State, accusing anyone who dares to question the policies or plans being worked on by his Department of being “deniers” or being supportive of an “end to our British way of life”. We need to bring back a sense of rationality, or proportion, to this debate, because out there, language such as this is alienating more and more people from the important cause of ensuring that the planet we pass on to our children and their children is in a better state than the one we have inherited.
The Secretary of State calls this “radical truth telling”, but I am afraid that he is not being honest with the British people about the impact of the Government’s plans on the climate, bills and jobs, or about the sacrifices it demands. The Leader of the Opposition has been very clear: chasing “Net Zero by 2050” is unachievable without making the country worse off. That is the truth. Global warming is a global issue, which we cannot face alone. The global climate challenge will not be solved by the UK alone, and it cannot be solved on the backs of British workers or British bill payers.
Order. We need to be careful about what we say. I think that the hon. Gentleman has suggested that the Secretary of State was not honest, and I think we are all honest Members here.
I completely agree, Mr Speaker, and I apologise if I insinuated the opposite in any way.
The UK accounts for less than 1% of global emissions. That is also the truth. In fact, now that I come to think of it, it is rather shameful that the Secretary of State should be using this report from the Met Office as cover, while ratcheting up the language and increasing the shrill criticism of all who question the Department and its policies, all to distract from the fact that the plans mean that Britain will be poorer and that no one looking at how we are decarbonising could ever claim that this is a model to follow. We are proud to have been a world leader—
Members do not give way when making or responding to a statement.
We are proud to have been a world leader, but it is not a race if no one else is running. If we are leading the way, we need to make sure that it is a path that others will follow. We must decarbonise in a way that creates energy security and prosperity, rather than forcing industry abroad and impoverishing British people. Why is that so hard for the Labour party to understand?
We see in the Met Office’s report that the demand for cooling has approximately doubled—a strong case for introducing more air conditioning into homes, which would improve comfort and reduce the burden on the health system during heatwaves. Although I welcome the Secretary of State’s commitment to expand the boiler upgrade scheme to include air-to-air heat pumps, which, as he says, offer cooling as well as heating, may I urge him to speak to the Mayor of London and get the ridiculous restrictions on air conditioning units in newbuilds in London removed? We must move away from this poverty mindset on reducing energy usage. Paying for solar panels to be switched off, while refusing to absorb the excess demand to cool homes, is truly ridiculous.
It is time to take the global scale and nature of this challenge seriously. Offshoring manufacturing, like ceramics, does not solve global warming, but it does make Britain poorer and Brits unemployed. To build this Government’s 1.5 million new homes, we will use more bricks that at any time since the second world war, but thanks to this Government, fewer than ever before will be made here in Britain. While the Secretary of State admired the fast-paced build out of new renewable generation, new nuclear and low-carbon energy on an unseen scale on his recent visit to the People’s Republic of China, perhaps he was able to reflect on the factors enabling that: the opening of two new coal-fired power stations every week, and the cost of industrial energy in China being less than a third of our domestic cost. We cannot innovate, manufacture, and create growth and prosperity while our energy costs are killing manufacturing. I am afraid that this Government’s plans will drive up the underlying cost of energy for industry, and Britain will pay the price.
Only a year ago, Labour candidates were trotting out lines on how they would cut bills by £300. Since then, network charges, which account for 22% of an energy bill, have risen by over £100 as a result of the rush to build out the grid for new renewables. Cornwall Insights, an independent energy analyst, has called for the Secretary of State to be
“transparent about what the money is being spent on”.
Its principal consultant has urged the Secretary of State to be honest with the public about the impact of net zero policy costs on bills.
Of course, a clean, secure and reliable power source exists in the form of nuclear. We welcome the announcements of the commitment to Sizewell C and the small modular reactor programme, but the lack of ambition, the refusal to commit to a third gigawatt-scale reactor—preferably on Anglesey—the decision to decommission the UK’s stockpile of plutonium, the selection of only one small modular reactor technology, and the refusal to repeat the 24 GW ambition that we set out for the nuclear industry are frustrating. We could do so much more. Will the Secretary of State commit to protecting Wylfa for a new gigawatt-scale reactor in the future?
It is indeed time for a policy of radical honesty. Global warming is a global challenge, and I am afraid the Secretary of State’s plans will have a negligible, or even negative, impact on global emissions. Sadly, he is driven by ideology, not by the practicalities of facing this challenge while growing the economy. We are telling the difficult truths; the Government are running from reality.
I will be honest, Mr Speaker: I just feel incredibly sad when I listen to the hon. Gentleman—and not in a good way. The trouble is that we are now in a situation in which the shadow Secretary of State goes into hiding when there is a statement about the climate crisis, because it is just too embarrassing to try to articulate the Opposition’s position.
The central chasm at the heart of the hon. Gentleman’s response is that he and his colleagues have taken the decision to abandon 20 years of bipartisanship on climate. Theresa May’s promise to deliver net zero by 2050 was one of the great strides forward, but he is now trashing that and saying it was a disaster. Let us be honest: it is grossly irresponsible. We are expected to believe that the Conservatives oppose net zero because they know, 25 years in advance of the target, that it cannot be achieved, but they cannot possibly know that. Indeed, the Climate Change Committee says exactly the opposite in its latest report. The hon. Gentleman says he is worried about costs, but all the evidence suggests that delaying action costs more, not less. The CCC says net zero will cut energy bills and the cost of motoring.
We do not even know whether the Conservatives want a net zero target at all, or no net zero target ever. The hon. Gentleman said something the other week—I read his interviews with care in my spare time—about reaching net zero by 2050 not being based on the science, but he is absolutely wrong. The Intergovernmental Panel on Climate Change says:
“In model pathways with no or limited overshoot of 1.5°C, global net anthropogenic CO2 emissions decline by about 45% from 2010 levels by 2030…reaching net zero around 2050”.
The point is that net zero was a target that Theresa May adopted, driven by the science.
What are the Conservatives? They are anti-science, anti-jobs, anti-energy security, and anti-future generations. I have to say that I cannot put it better than Theresa May—[Interruption.] The hon. Member for West Suffolk (Nick Timothy) should be quiet, because he used to work for her. This is what Theresa May, the Conservative Prime Minister just five or so years ago, has said:
“Those of us who advocate accelerating our progress towards net zero emissions are labelled fanatics and zealots. Ironically, the name-calling often emanates from ideologues at the political extremes or from populists who offer only easy answers to complex questions.”
I could not put it better myself.
(3 weeks, 3 days ago)
General CommitteesIt is a pleasure to serve under your chairmanship, Mr Vickers, and to be in the august company of the double award-winning Minister—the Scottish MP of the year, as of yesterday evening. The competition was very stiff.
The capacity market scheme was introduced in 2014 as part of the electricity market reforms to ensure security of electricity supply by providing payments for reliable sources of dispatchable generation or, in some cases, demand reduction. As we saw in January, a renewables-dominated system increases the need for capacity market generation. The system, which is designed to insure the market during periods of electricity system shortage and stress, is increasingly significant and increasingly costly as intermittency increases.
These regulations will allow unabated gas generators to exit their capacity market obligations without penalty for the purpose of retrofitting carbon capture, usage and storage and transferring to a dispatchable power agreement outside of the capacity market. The rationale for this is to allow generators to convert unabated gas to power with CCUS in order to decarbonise the UK’s electricity generation. So far, so good. We support that ambition in principle, as we believe in a cleaner energy system.
However, we also believe in delivering an energy system that is secure and affordable, on which we have some concerns. Namely, how will this impact energy bills? The regulations intend to allow unabated gas generators to transfer from existing capacity market agreements to a contract for difference mechanism to power CCUS, thereby entering a dispatchable power agreement.
If dispatchable power agreement contracts are more expensive than the average cost of electricity, higher prices will be locked in, and the cost of this mechanism will necessarily filter through to billpayers. Energy bills are composed of wholesale costs, network charges, contracts for difference subsidies, balancing costs such as curtailment payments, and capacity market payments. Under the Government’s clean power 2030 plan, those costs are all set to rise. Bills will go up.
This week, Ofgem announced a £24 billion investment in the electricity and gas grid, including a 2,700-mile pylon expansion, necessitated by, in Ofgem’s words, the need to
“handle the flow of electricity from new renewable sources.”
Onshore wind and solar panels need an expensive expansion of our infrastructure due to their dispersed locations, costing billpayers money. This is not cheap, and it will not bring bills down.
Contracts for difference payments are set to rise, while developers still await news of the administrative strike price for the next allocation round. We know that a high reserve price will drive up consumer bills. With increasing onshore and offshore wind bringing higher levels of intermittency into our systems, curtailment payments are set to increase, at least in the medium term. Last year, billpayers spent £1 billion balancing the grid by turning wind turbines off at times of over-generation, and now we have these capacity market changes.
The increase in intermittent renewables on stream in the UK must be shored up by increasing capacity market payments. Unfortunately, this Government continually prioritise climate targets over secure and affordable energy, and billpayers are paying the price. Can the Minister please tell us what impact the Government’s clean power 2030 payments will have on capacity market payments? Are the Government still committed to reducing energy bills by £300, and will the Minister reiterate that commitment?
There is no costing associated with these regulations or with clean power 2030 overall, as that would prove that the Secretary of State’s commitment to the unachievable targets he has set himself is pushing bills up.
I do not wish to stand in the way of these regulations. However, I must put on record our deep concerns about the impact of clean power 2030 and all these changes on consumer bills and the UK’s overall energy resilience.
(3 weeks, 5 days ago)
Westminster HallWestminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
It is a pleasure to serve under your chairmanship, Mr Twigg. Not being one to break consensus often, I am delighted to remind hon. Members of the value and importance of our oil and gas industry to communities in north-east Scotland such as my own, to the Exchequer, and to the United Kingdom’s energy security.
I congratulate the hon. Member for Burton and Uttoxeter (Jacob Collier) on so eloquently outlining the case for the petition, and the 110,000 people who signed it on enabling it to be debated this afternoon. They make a very strong case for changing the advertising regulations as they pertain to fossil fuel companies, due to the impact of burning fossil fuels on climate change. The reasons they give are twofold: because oil and gas are damaging for the environment, and to set an example to the rest of the world.
We know that burning fossil fuels emits carbon, which is leading to global warming. That is not up for debate, but if people think that shutting down the UK’s oil and gas industry or stopping it from advertising what it is doing will mean less carbon in the atmosphere, I am afraid they are sorely mistaken. First, we will need oil and gas for decades to come. Even the Climate Change Committee knows that oil and gas will remain integral to the United Kingdom’s energy mix, with fossil fuels predicted still to account for 23% of energy demand by 2050, and that is assuming we meet our climate obligations.
Secondly, more carbon is emitted if liquefied natural gas is shipped in from abroad, as is happening increasingly, having been drilled or fracked in Venezuela, the USA or even Norway. Although we all accept that the use of fossil fuels is contributing to global warming, shutting down our domestic production to resolve that, or stopping companies from advertising and telling the world what they are doing, is clearly illogical, as is taxing our domestic industry into extinction, refusing new exploration licences and damaging competitiveness through advertising bans. In fact, all those things would increase global emissions.
I turn to the argument about setting an example. The rhetoric of leading by example, being world leaders and winning the race on climate change is commonplace, and we are setting the pace. We slashed emissions by more than 50% compared with our 1992 levels, and we did so while the Conservatives were in government and faster than any other G7 nation, but we must look at what is happening now. The deindustrialisation of massive areas of the United Kingdom—Grangemouth, for example—has resulted in a hostile environment and sky-high green levies. The message is quite clear: do not follow where we tread. Other countries will look to the UK as an obvious example of how not to do it, because we have in no way demonstrated how to develop a sustainable energy future without undermining our industrial base or economy. That is making Britain poorer.
A ban on fossil fuel advertising would be counter-productive, because unlike previous bans on tobacco or junk food advertising referenced this afternoon, banning fossil fuel advertising will not reduce demand. The UK will continue to rely on oil and gas over the coming decades. Our oil and gas industry is not antithetical to our climate commitments; it underpins them. Without gas for energy, the lights in this country would go off and industry in this country would shut up shop. Without refined oil, we would have no medicines, bike tyres, phones, plastics, wind turbines, oil to lubricate the wind turbines, solar panels or batteries for the electric cars that the Government are urging people to buy.
I appreciate the work that has gone into the shadow Minister’s speech, but when he will address the petition’s point about advertising? It seems to me that most of the speech so far has been merely an advert for the fossil fuel industry.
If the hon. Lady is patient, I will come to that—I seem to have some two and a half hours to make my remarks. I will get to the point on advertising, but my point stands: without fossil fuels, we would have none of the above.
Let us look at China. It is often condemned for opening a new coal-fired power station every two weeks, but in the very next breath it is applauded for record investment in green technologies. The two are inextricably linked. Cheap, abundant energy is the only way to achieve innovation, a strong domestic manufacturing base, and industrial competitiveness. If we want the UK to drive the clean technologies of the future, we must bring down the cost of energy in the short term. The technologies and the skilled workers in the supply chain are the very technologies and the very people in the very companies—working in oil and gas right now—that are developing the cleaner energy future that we all want.
Even if we drive the industry out of the UK entirely or prevent it from advertising in the UK, it will still do so. It will just do it from the United Arab Emirates, Qatar, Saudi Arabia, Australia, south-east Asia, South America, Mexico, the USA, Canada, Norway—in fact, anywhere that is still investing in its domestic oil and gas industry. We rely on the oil and gas industry every single day, so a ban on fossil fuel advertisements would not reduce our consumption of fossil fuels. Instead it would simply be a further signal that the UK’s energy industry is closed for business.
This is personal to me, to my constituents and to the region that I have had the privilege to represent in this place for the last eight years. I saw when I was growing up, and I still see today, the immense contribution that the energy sector makes to communities and to economies. I see the value added by those high wage jobs that support families and communities. I know the individuals who make a positive contribution to the lives of their families, their home towns and our nation every day. Without them and their hard work, the lights would literally go out in this country. That is especially important as yesterday we marked 37 years since the Piper Alpha disaster, when 165 men lost their lives in the North sea while ensuring that energy still flowed into our nation. We remember the sacrifice that these individuals still make for us.
The Government’s harmful policies regarding the oil and gas sector, including the ban on new licences, are already causing the contraction of businesses. The Just Transition Commission has forecast that up to 120,000 jobs in the energy sector could be lost by 2030. We absolutely need to continue developing the cleaner energy mix of the future by investing in new nuclear, carbon capture and storage, and the rest. Renowned oil and gas companies have siphoned millions of pounds of investment into offshore wind and clean power generation, and we should allow them to tell the world about that.
If we are serious about reducing our carbon emissions, we must be serious about supporting the very companies with the expertise, infrastructure and capital to deliver that. The energy transition will be achieved not by demonising the oil and gas sector, but by working with it. These companies are not just part of the problem; they are essential to the solution.
Equinor, Ørsted and Vattenfall are leading examples of how legacy fossil fuel firms can pivot towards clean energy—
Order. I have been very generous, but the debate has a very narrow focus on advertising. I am sure that the shadow Minister understands that and will come back to that issue.
I absolutely will. In fact, Mr Twigg, you have pre-empted exactly where I was going in my speech.
Such investments are not token gestures—[Interruption.] Exactly. They are strategic investments that will shape the future of energy. Domestic supply chains, from engineering specialists to subsea infrastructure manufacturers, and from power cable component suppliers to logistics and offshore support companies, will support the transition. Again, we should allow them to tell people in this country about their work.
The hon. Gentleman will have heard earlier in the debate from the hon. Member for Thornbury and Yate (Claire Young) that some oil and gas companies advertise their work on decarbonising despite it making up only 0.3% of their business. On that basis, I could arguably edit my Wikipedia page to say that I am a professional swimmer or pub quizzer, but I do not think that would be a fair representation of what I spend most of my time doing, although it probably adds up to 0.3% of my time in some months. On that basis, would the hon. Gentleman reconsider whether he really thinks it is fair to allow oil and gas companies to advertise work that accounts for less than 0.5% of their business and use that to greenwash their image?
No, obviously that would not be fair, but as has already been pointed out, the Advertising Standards Authority has demonstrated that it possesses both the mandate and the mechanisms to hold companies to account for misleading environmental claims, and as yet it has found none to be in breach.
It is important that those companies, which require the underlying profit from their traditional exploration and drilling work to support their investment in the clean technologies of the future, are allowed to tell the country and the world about that. We should be immensely proud that we have not only a world-leading oil and gas sector—the cleanest basin from which to extract oil and gas in the world right now—but one that spends billions on developing the clean technologies of the future and attracts international companies to the United Kingdom to do the same.
If the issue is the accuracy of advertising, we should have confidence in the existing regulatory framework, which has proven capable of intervening where necessary. A blanket ban is neither proportionate nor necessary when robust oversight is already in place. I am afraid that the ban advocated by the petition may be purely ideological. It would damage investor confidence and be counterproductive in reducing carbon emissions.
I am proud that BP, Shell, Total, Equinor and the rest invest in music, art, culture, education and sport across the UK—and let us look at what happens when they do not. Baillie Gifford, a global investment management firm that invests in some of Scotland and the UK’s biggest companies, which just happen to be oil and gas companies, was sadly forced, under pressure from environmental activists, to withdraw support for the Edinburgh international book festival. Who has had to step up at the last minute to plug the gap? It is the Scottish Government—the taxpayer—to the tune of £300,000 this year alone, at a time of tightening budgets, fiscal constraints and a difficult financial outlook for the country. When there was money already available, that is utter madness.
The oil and gas industry, which is based in and around Aberdeen but has a presence across our entire island nation, is a national asset. We should be championing it and the people who work in it, not demonising them. We should be proud when we see the names of successful British companies supporting British artists, musicians and sportspeople, and when we see them investing in communities, schools and our country. We should absolutely allow them to tell the world of the globally significant investment that they are making in the clean technologies of the future, and we should not have any truck with this petition.
(1 month ago)
Commons ChamberI thank the Minister for advance sight of his statement, and for taking the time to speak with me on this issue earlier today.
Today, hundreds of jobs are at risk, and a strategically significant asset is in jeopardy. The Lindsey oil refinery has a capacity roughly equivalent to 35% of British petrol consumption and 10% of British diesel, and it supplies aviation fuel to Heathrow airport via a pipeline. Refineries represent a core strategic interest for the United Kingdom. We are reassured that the oil and gas fields to the west of Shetland are not at risk, nor is the network of petrol stations affected by today’s announcement —I would like to reiterate that that side of the operation is not at risk. The refinery has been loss-making since it was acquired from TotalEnergies in 2021, and we are aware of long-standing financial issues with the Prax group, including its being unable to provide accounts to the Government. As such, we support the Government in ordering an investigation into the conduct of the directors and the circumstances surrounding this insolvency.
However, despite the management issues facing the company, which, as the Minister has said, are multiple, it is clear that the refining industry as a whole is being driven into the ground by the high cost of energy in this country. In the late 1970s, Great Britain had 17 oil refineries; if the Lindsey refinery in the Humber closes its doors, only four will remain. Energy is the single largest cost of operating a refinery, so the sky-high cost of energy to industry in the UK is pushing manufacturers in energy-intensive industries such as refining out of business. As Sir Jim Ratcliffe at INEOS has said, the chemicals sector is “facing extinction” because of
“enormously high energy prices and crippling carbon tax bills.”
Industry in the United Kingdom is uncompetitive, with two oil refineries closing within six months. It is quite clear that we need a rethink. If our route to lowering emissions in the UK comes at the price of deindustrialisation, and costs jobs, livelihoods and economic growth—if it means impoverishing the UK and increasing dependence on imports, and a fragile supply chain for fuel and essential oil products—then we must rethink. If the Secretary of State brings refineries within the scope of the energy-intensive industries compensation scheme, he will be providing only a sticking-plaster response. Exempting specific industries from policy costs such as the renewables obligation, the feed-in tariffs, the contracts for difference subsidies, and capacity market payments does not fix the foundations. This piecemeal approach simultaneously accepts the devastating consequences of green levies for the industry and abdicates responsibility for fixing the root problem.
We are already seeing the real impact on working people’s livelihoods and communities of not taking action. Some 400 jobs have been lost at Grangemouth; 60 have been lost at Moorcroft pottery in Stoke; over 1,000 have been lost at Vauxhall in Luton; and 250 have been lost at Nippon Electric Glass Fibre Works in Wigan. Now we see the same at the Prax Lindsey oil refinery, where 440 people are employed. Unite the union has warned the Government that their policies
“have placed the oil and gas industry on a cliff edge”.
This Government are driving up the cost of energy, increasing our reliance on imports, and offshoring our carbon emissions. That is not good for the climate, and it is very bad for Britain.
Refineries have consistently raised the issue of the existential issues that the sector faces, including the cost of the emissions trading scheme and eye-wateringly high energy bills. Since the closure of Grangemouth, this Government have taken no action to tackle the fundamental problem: the need to reduce the burden on businesses, make UK manufacturing more competitive, and back British industry. I have some questions for the Minister. What are the Government’s plans for the Lindsey refinery? Does he expect to find an operator? How long will the Government support the refinery, and what plans do they have for the refinery if no buyer is forthcoming? What action will the Minister and his Government take to ensure that the situation is not replicated at Britain’s four remaining refineries? How many petroleum refineries does he expect to be left by the time the Labour Government leave office in 2029, and what will the Government do to bring bills down for all industrial energy consumers, not just those covered by the energy-intensive industries compensation scheme?
I thank the shadow Minister for rightly reiterating the fact that it is not the whole of the business we are discussing that has gone into administration today. It is really important to say that there is certainty in other parts of the business—we will be able to outline more of that in the days and weeks ahead. I also thank him for his and his party’s support for the investigation into the conduct of the directors that the Secretary of State has launched. Clearly, something has gone badly wrong here, and it is important that we get to the bottom of it.
The shadow Minister asked three specific questions. First, the Government have backed the official receiver, who is now running the refinery in the short term. We will use that time to see whether there is a possibility of finding a buyer—clearly, our very first option is to see whether someone wants to take on the refinery as a going concern, and we will put every effort into trying to find one. If that is not possible, we will look at what the wider future of the site might be and what possibilities exist for other industries on that site.
Turning to the shadow Minister’s wider questions, he spoke about fixing the root of the problem. I have to gently say to him, though, that he and his party oppose the action that will fix the root of the problem, which is our continued exposure to volatile fossil fuel prices that have driven up the cost of electricity. As he rightly said, households and businesses right across the country are paying the price for that. We have an answer to that, which is to move much faster towards a clean power system including renewables and nuclear that brings down costs and delivers that power here in the UK, rather than relying on the casino for volatile fossil fuels. However, the shadow Minister opposes that plan. He cannot call for us to fix the root of the problem—as he puts it—while opposing the very action that will do so. We have outlined a credible plan for how we will deliver cheaper electricity for all consumers across the country, including businesses, and we are getting on with delivering it. The Conservatives oppose all those initiatives.
(1 month, 1 week ago)
General CommitteesIt is a pleasure to serve under your chairmanship, Mr Betts. It is an unusual experience to be in full agreement with most of what the Minister has said. [Hon. Members: “Hear, hear!”] Do not get used to it.
I took the Energy Act through the last Parliament, and it is under section 22 of the Act in which the amendments necessary to implement the convention on supplementary compensation for nuclear damage are contained. Section 306 of the Act outlines the powers of the Secretary of State to make regulations concerning the CSC. The regulation before us today seeks to amend the classification of claims for compensation in respect of the convention on supplementary compensation, as set out under section 22 of the Energy Act/Nuclear Installations Act 1965.
Under the Nuclear Installations Act 1965, if compensation claims, excluding CSC-only claims, reach an aggregate of €700 million from the responsible person, the appropriate authority may be required to satisfy further claims, including CSC claims up to the equivalent of the aggregate €700 million and the value of the CSC international pooled funds. For CSC-only claims, the responsible person’s liability limit is 300 million special drawing rights, after which the appropriate authority’s liability is limited to the aggregate of 300 million special drawing rights and the value of the CSC international pooled funds.
Regulation 2(3)(b) will omit section 16(1ZAA) of the Nuclear Installations Act. Subsection (1ZAA) sets a financial limit on the compensation payable by a responsible person for CSC-only claims. Thereby, this regulation seeks to remove the lower liability cap for claims that relate only to the CSC, which is in place for claims arising under the convention on third-party liability in the field of nuclear energy: the Paris convention. As a result, the liability for claims under either convention is brought to €700 million. Any claim brought under the CSC, or under the CSC and the Paris convention, would have a cap on liability of €700 million plus the value of the CSC international pooled funds.
As a nation seeking to build a golden age of new nuclear—not quite as golden as it might have been had the Government stuck to our plans, but a golden age none the less—and to implement a revival of civil nuclear in the UK as part of our secure, affordable, clean energy ambitions, it is incumbent on us to put in place the necessary mechanisms to ensure consistent liabilities in the event of damages. That is what the draft regulations seek to do. I am in violent agreement with the Minister on this point, and we do not oppose any of these changes today.
Question put and agreed to.
(1 month, 3 weeks ago)
Commons ChamberHappy birthday, Mr Speaker, and very many happy returns. We obviously welcome new jobs when they are created, but will the Minister acknowledge the destructive impact of her Government’s policies on jobs in oil and gas in the North sea? On Friday evening in Westhill, in my constituency, I met many workers who are terrified for their future, their family and their community, because the skilled jobs in the supply chain that is maintained by oil and gas are not being replaced at the pace needed by renewables. That is due to a slowdown in offshore wind deployment and a steep decline in oil and gas activity. Will she not admit that the Government have got this dreadfully wrong?
Under the previous Government, we lost 70,000 jobs in the oil and gas industry and more than 1,000 jobs in the ceramics industry. We produced only 30% of the steel that we need in this country, and the chemicals industry fell by 30%. The Conservatives’ record is shocking. We are putting together a plan that will ensure we can transition a lot of people from oil and gas to renewables; as the hon. Gentleman knows, the skills are very similar. We are trying to make that easier through our passport system. We are developing a workforce plan, which we will publish in due course, that will involve hundreds of thousands of jobs. Why do Conservative Members oppose that?
There has been no contrition, or acknowledgement of the people losing their jobs today in this country as a direct result of the Government’s destructive policies. Some 3,000 jobs were lost in July 2024. Robert Gordon University estimates that there are 400 job losses every two weeks. Offshore Energies UK predicts that there will be 42,000 job losses unless there is significant policy change. The Just Transition Commission warns that 120,000 jobs may go by 2030, and that there is no prospect of a just transition, because the supply chain is just upping sticks and moving overseas. Will the Minister not acknowledge that this is the wrong course to take? Will she at least apologise to the men and women losing their jobs today?
The North sea will continue to play an important role for years to come, which is why we are keeping existing fields open for their lifetime. This is a declining base, and the hon. Gentleman knows that. This is not where the jobs of the future will be. They will be in the clean energy transition, which we are investing in at pace; there have been huge announcements today on nuclear, and there are the spending review announcements to come. We are investing in the jobs of the future; he is stuck in the past.
In the dim and distant past, in 2023, the Secretary of State described the Rosebank oilfield as
“a colossal waste of taxpayer money and climate vandalism”.
Does he still agree with that?
As with any application, there is a process that my Department will go through. We will look at any application in a fair and objective way.
(2 months, 2 weeks ago)
Commons ChamberOn 25 March, when we last debated amendments to the Bill, the Minister assured us that the mechanisms for preventing modern slavery in supply chains were adequate, and that the Procurement Act 2023 would provide adequate protection against technology that could have been manufactured using slave labour being deployed in the UK. He confirmed that in the coming weeks, he would convene cross-departmental meetings on that matter, and said that a broad strategy would be developed, through work with the solar taskforce and other Government Departments. Then we had the incredible sight of Labour MPs trooping through the Lobby, being whipped to vote against an amendment that would have prevented Great British Energy from investing in supply chains in which links to modern slavery were proven.
The offshoring of our emissions, our manufacturing base and our skilled jobs is understood and acknowledged to be the result of Labour’s energy policies, but on that day, we also saw the offshoring of Labour’s moral compass. We saw its narrow-minded, ideological obsession with achieving the unachievable: clean power by 2030, at any price and any cost, delivered through solar panels made by slave labour and with coal power in the People’s Republic of China.
Following all that, though, a screeching U-turn took place. Literally weeks after the Government whipped their MPs to vote against the modern slavery amendment the last time the Bill was debated, the Government conceded what we all knew to be the case—that the mechanisms cited by the Minister in this House were simply not up to the job. However, we sincerely welcome the acknowledgement that the UK must take a principled stand. The Procurement Act 2023 and the Modern Slavery Act 2015 were groundbreaking when they were introduced, but it is evident that more needs to be done today to prevent goods tainted by slavery from entering UK supply chains.
As my hon. Friend knows, heaven rejoiceth when a sinner repenteth. Does he share my hope—let us hope it is not naive—that, with this volte-face by Members on the Treasury Bench on this important issue, the cross-party consensus about the seriousness and perniciousness of modern slavery is restored, so that the House can face up to it, whenever and wherever it manifests itself?
I wholeheartedly agree with the sentiments expressed by my hon. Friend. He is absolutely right: over the past decade and more, a cross-party consensus was reached in this House about the pernicious nature of modern slavery and the work we must do together to drive it out of supply chains that could be contributing to, or investing in, the United Kingdom. I think we all believe that we have to achieve that. Now that the Government have acknowledged that the mechanisms in the Bill were not up to the job, as we said at the time, I hope that we can revert to cross-party working on this incredibly important issue.
The transition to clean power must be just, as we have said before and as the Minister has said many times, but it is clear that there is no justice where there is slave labour in supply chains, so we are glad that the Government have listened not just to the official Opposition, but to Members from across both Houses. However, there is a serious question: what does this mean for the clean power 2030 mission? If the route to decarbonisation relies on importing technology from China made with slave labour, surely there should be a rethink of whether that mission is conducive to good policy.
We are pleased that the Minister has rowed back from the position that the Great British Energy Bill needed no extra provisions to exclude slave labour from supply chains, and have accepted an amendment that safeguards against slavery and human trafficking. While we welcome the Government’s change of heart, it would be remiss of me not to reiterate for the record that the official Opposition remain resolutely opposed to the creation of Great British Energy, which is not great, not British, and will not produce any energy. The Minister often cites my constituency in Aberdeenshire in these debates because of the location of GB Energy’s headquarters, but I say to him in all sincerity that the people and businesses of north-east Scotland do not want more government. They want government to get out of the way and let them get on with what they do best: extracting oil and gas from the North sea, keeping the lights on and homes warm in our country.
Instead of wasting time on this wasteful vanity project, the Government should lift the ban on licences and work faster on replacing the energy profits levy. That would really create jobs—indeed, it would save jobs—and drive investment in Aberdeen, unlike this Bill. High industrial energy costs are pushing energy-intensive industries such as ceramics and petrochemicals overseas. The impact of those costs is real for industrial communities, and we need to see a real plan that shows that the Government understand that and will act on it.
We are grateful to the Minister for heeding our calls—and, indeed, those of other right hon. and hon. Members—for provisions on slave labour to be included in the Bill, and for listening to the arguments made by Members from all Benches in both Houses. Today, we welcome a small victory, the acceptance of an amendment that seeks to prevent modern slavery in our energy supply chains. That is a positive change to the legislation—legislation that should not exist, but a positive change none the less.
I call the Liberal Democrats spokesperson.
(3 months ago)
Commons ChamberI thank the Minister for advance sight of his statement, and echo his comments; of course, the Conservatives’ thoughts are with all those affected by the blackouts in Spain, Portugal and more widely.
The Minister rightly addresses concerns about the security of our grid in the context of the shutdown witnessed on the Iberian peninsula, and I am glad that he can confirm that he is carrying on implementing the recommendations from Exercise Mighty Oak, in which I was involved, on the action that would be required if such an event took place in GB. The primary responsibility of the Minister’s Department is to keep the lights on in this country. The images from Spain and Portugal are a sombre reminder of what happens when the grid fails. Extended blackouts are devastating, and it is a relief that power was restored to 99% of customers by 6 o’clock yesterday morning. The grid collapse in Iberia has demonstrated the fragility of the complex, interconnected systems that support modern life, and the very real impacts on human life of such a collapse.
It is the Minister’s responsibility to ensure that the same thing does not happen in Great Britain, as the price for our economy and for communities across this country would be catastrophic. We cannot get away from the fact that this Government’s plans to rush ahead to build a grid that is entirely dependent on the wind and the sun in just five years’ time will make our electricity grid significantly less reliable.
The stability of our electricity grid depends on what is called inertia, which is the ability for the system to resist destabilising fluctuations in frequency. It is the reason our grid has been so secure and resilient over the decades the Minister references. This inertia is provided by turbines, like those found in nuclear, hydro or, crucially, gas power stations, but it is not provided by solar or wind farms. If the grid does not have enough inertia to resist sudden changes in frequency, it can become destabilised, and cascading grid failure can occur. That means blackouts. As the Spanish NESO said in its latest annual report, the closure of conventional generation plants, such as coal, gas and nuclear, has reduced the firm power and balancing capacities of its grid, as well as its strength and inertia. This has also happened here in Great Britain. Data from NESO shows that the inertia in our grid has been steadily decreasing over time, as gas and coal have come off the system, to be replaced by wind and solar. This comes with a hefty price tag, which is the problem with so much of the Labour Government’s approach to energy security. Their imposed targets are saddling the British people with mountains of extra costs, as the Government rush ahead towards a power system that depends on the weather, rather than on firm, reliable baseload.
Tens of billions of pounds are spent subsidising wind farms, expanding the grid, and providing back-up from reliable gas plants. The Government set their 2030 target, and now they are trying to work out how they can achieve it, but they refuse to be honest with the British people. They refuse to do an open and honest assessment of the costs and risks that come with this approach. It is no wonder that even Tony Blair has said that the present policy solutions are inadequate and doomed to fail.
The Conservatives believe in a system that delivers secure, affordable and clean energy for the UK. A cyber-attack has been ruled out by the Spanish Government as a cause of their grid collapse, but we know that the threat of interference from hostile states is constant. Will the Minister update the House on the action he is taking to protect the grid from hostile activity? When will he finally tell us which single Minister is responsible for the safety and security of our offshore energy infrastructure?
The lessons from the incident on the Iberian Peninsula are abundantly clear. We must retain inertia in our grid to keep it stable and resilient. Nuclear power provides vital baseload power generation, along with inertia, which would have helped to mitigate a cascading failure like the one earlier this week. Will the Minister give the nuclear industry the certainty that it is asking for, and commit to 24 GW of nuclear power, as the previous Government did? Will he ask NESO to provide this House with a full, transparent update on the role of inertia in our power system, on the consequences of declining inertia, on the impact that has on grid stability, and on the costs associated with it?
Finally, the Minister has said that Great Britain has never experienced a complete shutdown such as that seen on the continent. What assurances can he offer this House that work is being undertaken, so that NESO and the National Grid are prepared for a black start, if ever that is needed?
I shall start with the more serious of the hon. Gentleman’s questions, and then, in reply to some of his other questions, I might gently remind him who was in office not that long ago. On a serious note, I agree entirely with him on his opening point: the first priority of my Department and the Government is to ensure our energy security. The past few days in Spain and Portugal have brought to light just how much of our day-to-day lives are dependent on a functioning electricity system, so he is right to make that point, and we are very aware of it.
I am surprised that the hon. Gentleman did not recognise the work that the previous Government did on building the renewable system, and on introducing inertia into the system, because that all started a number of years ago. We have a resilient grid in this country, and it is important to continue to have that. That means building new grid infrastructure, which he and a number of his colleagues quite often oppose. It is important to build that grid infrastructure and to invest in it. We will continue to work with NESO and others to understand the full causes of this outage. I will not be drawn into speculation on what may have caused it, because clearly the first priority of the Spanish and Portuguese Governments has been restoring power, but they will carry out investigations to find out the cause, and we will implement any lessons from that.
Finally, the hon. Gentleman was right to reflect on Operation Mighty Oak, which was carried out under the previous Government. We have been taking forward those recommendations right across government. My right hon. Friend the Chancellor of the Duchy of Lancaster is looking at resilience across Government. These are all important points. However, I say gently that energy security is an absolute priority for this Government, which means building the energy infrastructure that this country needs, and not opposing it at every turn.
I have to apologise to the former Prime Minister, but I have been a little busy over the last few days and have not read all of his report.
Indeed. I apologise and will prioritise it for my weekend reading. What I did see is that the Tony Blair Institute outlined very clearly its support for clean power as an important transition for this country. The shadow Minister earlier said that this was all about wind and solar, but that has never been the position for this transition. Nuclear will play a critical role, as will carbon capture, usage and storage as well as hydrogen. All of that was outlined in Tony Blair’s report.