Fuel Poverty

Angus MacDonald Excerpts

Wednesday 6th November 2024 Westminster Hall

[Mr Angus MacDonald (Inverness, Skye and West Ross-shire) (LD)]

Thank you very much, Sir Roger, for allowing me to contribute to the debate. I thank my right hon. Friend the Member for Orkney and Shetland (Mr Carmichael) for securing it.

The two big issues facing rural Scotland, and the highlands in particular, are the care sector and fuel poverty. I am sure hon. Members have not spent too much time worrying about this, but although the mean daily temperature in London is 16°C, it is 9°C on the island of Skye, where God comes from. On Skye we have longer nights, colder weather, windier conditions and older, draughtier houses. In June this year, the daily standing charge for electricity was 61.1p in the north of Scotland and 40.8p in London, so in the north of Scotland we pay 50% more to be connected to our electricity. That is shocking.

[Mr Carmichael]

Standing charges, which vary massively and randomly across the country—from memory, I think the worst area is actually north Wales—are one thing, but just a couple of weeks ago OVO Energy announced that it would start charging its customers £1.50 every time it sends them a paper bill. Is that not just—I say this, Sir Roger, for the purposes of staying on the right side of you—taking the mick?

[Mr MacDonald]

What is absolutely clear is that the electricity companies are not losing money. Their total profits add up to tens of billions of pounds, but the costs are being borne by the poorest people in our society.

[Anna Dixon]

Will the hon. Gentleman therefore join me in congratulating the Chancellor on increasing the windfall tax on gas and oil companies in recognition of the excess profits they are making? That money is being invested in some of the priorities that we have been talking about, such as home insulation.

[Mr MacDonald]

That is also Liberal Democrat policy, so I am pleased to support that.

Interestingly—I know you will find this interesting, Sir Roger—France, Italy, Ireland and others have an equalisation of standing charges. Ofgem’s reluctance to reform standing charges has been raised many times in Westminster Hall and in the main Chamber, so we need to get proper answers.

Town gas is by far the most affordable way of heating a house, but 60% of houses in the highlands do not have access to it. As my right hon. Friend the Member for Orkney and Shetland says, kerosene, bottled gas, electricity, wood and coal are very much more expensive, but people in the highlands have no option but to use them.

It is easy for us to have a go at the policy of stopping the winter fuel allowance. I do not understand why the figure was set at £13,000, rather than at the average household income of £34,000. That would have been a huge relief to many of the people who have been most affected, and it would probably have been much more popular for the Government.

In the highlands, incomes are much lower than in the rest of Scotland and Britain as a whole, and we have a much older population. The cost of living is between 15% and 30% higher than in the rest of Scotland, according to the Scottish Affairs Committee in 2021. We have a substantial depopulation problem and the highest cost of living in the UK, to which fuel is a major contributor.

I know the Energy Minister has heard this from me before, but community benefits from renewables are potentially the biggest saving grace from this. My No. 1 call is for fuel vouchers to be given to affected locals, and of course in the highlands we have lots of renewables. That would make a very big difference. The second thing the Minister could do is to get Ofgem to review standing charges. I estimate that if they were equalised, there would be a £75 a year saving at no cost to the Treasury. Thirdly, we should concentrate the winter fuel allowance on the most deserving people, who tend to be the older, the poorer and the more remote.

--- Later in debate ---

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

I thank all right hon. and hon. Members for participating in the debate. I particularly thank the right hon. Member for Orkney and Shetland (Mr Carmichael) for securing the debate and for his commitment on this issue in debates over many years. I know that it is a considerable issue in his constituency, where I think 31% of households are in fuel poverty, and he is right to raise it in this House. I always appreciate conversations with him, including our recent conversations on many of the topics that have been raised today.

I agree on the importance of this debate on tackling fuel poverty, although I should say at the outset that fuel poverty is devolved across the UK. Certain things that I will speak about relate to the UK Government’s responsibility for fuel poverty, which focuses on England. In the Budget last week, a considerable amount was assigned to the devolved Administrations, including one of the biggest devolved settlements for the Scottish Government in many years. I am sure that the right hon. Gentleman will raise these issues with colleagues in the Scottish Parliament to get much-needed funding to projects in Scotland as well.

On devolution, it is also important to say that we measure fuel poverty in very different ways across the country, with different metrics and targets for how we identify it. In Scotland, the metric for fuel poverty is the same as that used in England to measure energy affordability. It includes deeming a household fuel-poor if it has to spend a certain proportion of its income after housing costs on energy, which is a slightly different figure from the one used in Scotland.

Nevertheless, much of what we have heard today is true across all parts of the UK. Many hon. Members made the point that the choice between heating their home and feeding their family or paying other bills is a stark one for any family. In a country as wealthy as ours, that should not be a choice that families have to make.

I welcome the point made by the shadow Minister and others that we can all work together to move forward on the issue. However, we need to take more action than has been taken in the past 14 years. That is why our manifesto committed to slashing fuel poverty and delivering our warm homes plan. We have already taken the first steps in delivering that. In the Budget last week, the Chancellor committed £1.8 billion to support fuel poverty schemes, helping over 225,000 households to reduce their energy bills by over £200. We have announced that we will consult this year on increasing the minimum energy standards in the domestic private rented sector: 35% of all those in fuel poverty in England are in the private rented sector, so it is vital that we provide as much support as we can.

I will pick up on several points raised during the debate, but the critical point was about trying to bring all the different policies together into a cohesive fuel poverty strategy. That is indeed what the Government have committed to publishing in due course, to ensure not only that we have a clear focus on tackling fuel poverty but that the whole Government are aligned on delivery. That is the approach that the new Government have taken on a range of issues; in my Department that includes clean power by 2030. We making sure that all Ministers, wherever they are—in whichever Department and with whichever responsibility—come together to make the situation better.

I want to provide a little bit of context. I repeat that much of fuel poverty policy is devolved. In 2023, an estimated 13% of households—just over 3 million—were in fuel poverty in England, under the metric that is used here. That remains effectively unchanged since 2022. The Committee on Fuel Poverty, which advises on the effectiveness of policies and scrutinises them in England, stated that progress towards tackling fuel poverty has effectively stalled. In England, the target is to ensure that as many fuel-poor homes as possible achieve the minimum energy efficiency rating of band C by 2030, but 46% of all low-income households in England were still living in a property with a fuel poverty efficiency rating of band D or lower. That shows the sheer amount of work we have to do on the issue.

We are therefore working on a number of policies. In reflecting on the point made by the hon. Member for Mid Dorset and North Poole (Vikki Slade), I accept that there is an urgency to moving forward on all these issues. We have inherited quite a lot of issues that require urgent action. I ask for just a little patience, but I absolutely recognise the point that for someone living in fuel poverty, the impending winter is a crisis. The Government are therefore moving as quickly as possible on the issue.

The warm homes plan, which we announced in our manifesto and on which we are moving forward, is about transforming homes right across the country by making them cheaper and making energy clean to run, rolling out upgrades from new insulation to solar and heat pumps. We will partner with local and combined authorities, and the devolved Governments where possible, to roll out the plan. That was in the Budget speech last week, in which an initial £3.4 billion was announced towards heat decarbonisation and household energy efficiency over the next three years. That includes £1.8 billion to support fuel poverty schemes, which, as I said, will help more than 225,000 homes.

The right hon. Member for Orkney and Shetland raised several points. He rightly notes that the radio teleswitch service situation will be a worry to many people, particularly in rural communities. As he said, a roundtable was held, which was important and brought together the key stakeholders. Ofgem has updated its action plan to make sure that we are pushing forward and in particular that we are putting pressure on the energy companies responsible for delivery, to make sure that the upgrades are made and that targets are in place, including some key milestones that they must meet early next year.

Several hon. Members mentioned community benefits. This is a debate that we have had in this Chamber and across the House before. It is extremely important that if communities are hosting energy infrastructure such as the Viking wind farm in the right hon. Gentleman’s constituency, which I visited not long ago, there should be some benefit. We certainly do not want the communities that host vital energy infrastructure to be those that are most likely to be in fuel poverty. We are therefore doing a lot of work, building on the previous Government’s consultations, on what community benefits might look like. We want to make sure that communities and individuals get a genuine benefit, because some community benefits do not currently deliver quite the change that we would like.

[Mr MacDonald]

Will the Minister allow humble servants such as myself to get involved in that? I have spent several years working with the Highland council and others on community benefits, and I would appreciate a meeting.

[Michael Shanks]

I am always willing to take help from any Member. If the hon. Gentleman can take some of this work off my plate, I will be very happy to work with him. Of course, we will first have to work out the answer to the question of where God comes from, but if we can settle on the fact that it is self-evidently Rutherglen in the central belt, I will be happy to work with the hon. Gentleman. That spoils the joke I was going to make about his comparison of temperatures, which is that seeing him wear a very woolly jumper this morning in London made me wonder what he wears in Skye, but that is for another debate.

Genuinely, though, we want to have an open and collaborative approach, and we want to make this work. The consultation that the previous Government carried out and the feedback we have from a number of partners show that there are really good examples of community benefits working well, along with a lot of examples where they are not working well. If we could build on that approach together, I would very much appreciate it.

While we are discussing the hon. Gentleman, he made a very good point about remembering the different types of fuel that households use, and the real issue for off-grid homes—particularly in the north of Scotland, but right across the UK. Again, fuel poverty is devolved, so some of those questions are for the Scottish Government to answer—I know that the questions will be put to them—but we are aware that in England, for which the Department for Energy Security and Net Zero is responsible, 12% of rural households are in fuel poverty, and those are the ones with the largest fuel poverty gap. Tackling those particular challenges in the rural context is therefore really important.

Great British Energy Bill

Angus MacDonald Excerpts

Report stage
Tuesday 29th October 2024 Commons Chamber

[Sarah Champion]

My hon. Friend pre-empts me. This will work only if we do it across the whole of Government and in all sectors, and I want my Government to be leading the way on that. We have a hugely important role to play internationally, as well as in our own industries.

The UK’s failure to keep pace with our partners has resulted in the global supply chain splitting. Slave-made renewable products are being redirected to countries with weaker regulations, such as the UK. As the other place’s Modern Slavery Act 2015 Committee recently recognised, without forced labour import bans, the UK risks becoming a dumping ground for tainted products. Current legislation, such as the Modern Slavery Act 2015 and the Procurement Act 2023, cannot meet the scale of the problem, especially while human rights due diligence remains optional for companies.

I appreciate that the Department is looking into these issues through the solar taskforce’s upcoming solar road map, which I really welcome. However, the solar taskforce, made up mostly of industry voices, needs to have civil society and trade unions on the team for its work to be truly credible. That is especially the case given my concerns about Solar Energy UK’s solar stewardship initiative, or SSI, as I am doubtful that an industry-led solution can meet the scale of the challenges I have outlined today.

A just transition is not only about international workers’ rights; it is also about securing UK jobs and industry. Our energy strategy must prioritise green jobs and wealth creation here, and avoid fuelling growth in economies known for cutting corners. Following my discussions with the industry and unions, it is clear that the UK’s inadequate response to these issues is creating a competitive disadvantage for businesses here and an uneven playing field internationally. If GB Energy allows exposure to state-imposed forced labour, it creates a distinct risk for investors and businesses here in the UK.

The arguments I have laid out today have the support of unions, businesses and human rights advocates alike. They echo the sentiments of our Prime Minister, Foreign Secretary, Business Secretary and Energy Secretary. For too many years, tackling modern slavery has received a siloed, disjointed response from Government. We now have an opportunity to change that and to embrace cross-departmental, collaborative working. Renewable energy has a key role to play in our transformation to a low-carbon economy, but without placing human rights at its centre, our green transition will come at a grave cost.

This Bill is aptly named the Great British Energy Bill. It simply cannot live up to its name if it depends on modern slavery to achieve its aims.

[Mr Angus MacDonald (Inverness, Skye and West Ross-shire) (LD)]

I invite hon. Members to refer to my entry in the Register of Members’ Financial Interests. I thank my hon. Friend the Member for South Cambridgeshire (Pippa Heylings) for her commitment to our essential amendments, both in Committee and here today. I also thank the hon. Member for Na h-Eileanan an Iar (Torcuil Crichton), who has been incredibly supportive of our ambition for communities to benefit from renewable energy. I have one little correction: Tom Johnston, who invented the hydro boards, and the Labour Government did not actually put in place a proper system whereby local communities could benefit. They supplied a lot of power to the south and the cities, but it was of very little benefit to those of us living in the highlands, even then.

The Government have argued that nothing in this Bill limits community ownership. That is almost certainly true, but as my colleagues and I have emphasised, amendment 5 would not restrict GB Energy; it would simply clarify that community-led energy is a priority.

The Under-Secretary of State for Energy Security and Net Zero, the hon. Member for Rutherglen (Michael Shanks), recently experienced a powerful story of community-driven energy on his visit to the island of Eigg. Just 25 years ago, Eigg’s residents, frustrated by years of poor management and a lack of investment, took matters into their hands and purchased their island. The Eigg buy-out succeeded in 1997, sparking what is now a beacon of self-sustained energy. Since then, Eigg has moved away from fossil fuels, becoming the world’s first island to generate 24-hour electricity from a variety of different renewables. This small community of just 110 people demonstrates the innovation and resilience that flourish when communities are empowered.

Eigg’s journey is a true example of prioritising community ownership and how that drives forward sustainability and local resilience. To paraphrase the Under-Secretary of State for Energy Security and Net Zero, the hon. Member for Rutherglen (Michael Shanks), community involvement is critical, not a mere “nice to have”. If we are to build the infrastructure of the future, we must ensure that communities benefit directly. Community-driven projects are key to making that a reality, so let us follow Eigg’s lead and put the Government’s own words into action.

The current Government have an opportunity here to show their commitment to cross-party collaboration by embracing community energy. We are all aligned on the goals, so let us not get bogged down by technicalities or party politics. The Minister knows of the huge cross-party support for community energy ownership. If this goes to a vote, do this Government really want to vote against community energy ownership? Let us show the people of Britain that this Bill truly supports the right to own and benefit from our natural resources through Great British Energy.

--- Later in debate ---

[Dave Doogan]

He can indeed. The hon. Member may think he is being terribly smart—he is a self-professed expert in the energy market—but he will know how difficult it is for someone to penetrate the UK energy market unless they happen to be a large plc or a multinational. When the Scottish Government took forward that noble ambition, they found precisely the same barriers to entry as community energy companies and trusts. If the hon. Member wants to get excited about that situation, I suggest he takes it up with the Department for Energy Security and Net Zero.

[Mr Angus MacDonald]

Will the hon. Gentleman explain why the SNP Government have left community benefit at the same £5,000 level it was in 2014, even though prices have gone through the roof? Their advisory information could have been changed. They have been pressed on the issue many times because it has severely damaged the income of rural communities.

[Dave Doogan]

I am not sure what the hon. Gentleman is driving at, but if he wants to get in touch with me after the debate, I will be happy to discuss it further.

Renewable Energy Projects: Community Benefits

Angus MacDonald Excerpts

Tuesday 15th October 2024 Westminster Hall

[Mr Angus MacDonald (Inverness, Skye and West Ross-shire) (LD)]

I beg to move,

That this House has considered community benefits from renewable energy projects.

It is an honour to serve under your chairmanship, Dr Huq. In all our careers, we have seen extraordinary changes, such as the advent of the internet, artificial intelligence and mobile phones. Going back 50 years, in the early stages of many of our lives, we had the North sea oil boom. The oil boom was extraordinary for many countries, not least Norway, which has saved US $1.7 trillion from it. Great Britain saved none of that money, however, and I am worried that we will save none of the money from the extraordinary renewables boom that is coming our way.

One of the biggest systemic changes in our life is happening right now: the move from fossil fuels to renewables. Many billions of pounds are being made, a huge number of jobs are being created and cheap electricity is being generated, but it is overseas companies, with overseas ownership of renewables projects, that we are seeing all over the UK. Precious little of the money ends up in the hands of the people who are being impacted by those projects.

The issue I have with these renewables projects, whether solar, wind, pumped storage or whatever, is that they are in rural areas. The locals suffer the visual impact, and we have all seen miles and miles of 200-metre-high wind turbines and field after field, sometimes of prime land, covered in solar panels. Villagers—people—have to face those industrial projects, and we really need to take them with us on this net zero journey.

[Tim Farron (Westmorland and Lonsdale) (LD)]

I congratulate my hon. Friend on securing this important debate. I represent roughly 1,500 farmers in Westmorland. All of them, pretty much, have water flowing through their fields and their land—often very quickly—but few of them take advantage of hydroelectricity, which could be a source of cross-subsidisation for farming, while also creating important renewable energy for our communities as a whole. Does my hon. Friend think that hydro-technology, in particular on farmland, is a great way forward? We can farm and produce renewable energy at the same time.

[Mr MacDonald]

Micro-renewables are the way ahead, and the more micro the better. Whether that is a solar thing on a roof or hydro for a farm, I could not support it more.

In 2023, as part of research in a written submission to Parliament, Octopus Energy showed that 87% of people would support a turbine in their community if it decreased their bills.

Now, I do not blame the landowner; these projects can allow farmers to retain the land in their family for generations to come. In some way, it is like discovering oil or gold on their land, and it is great that our bountiful wind and rain can be such an asset for us, especially in an era when coal is inaccessible and unacceptable, nuclear is being phased out, and gas is often imported from countries with an unacceptable moral standing, while also badly hitting our balance of payments and being environmentally unfriendly to transport to Britain. Renewables are absolutely the future.

The 68 million people in the UK are enormous beneficiaries of our renewables sectors, but the cost is borne by a fraction of that number—by those living in the remotest areas. Those of us in the Chamber represent populations who pay a 50% premium on electricity connection fees compared with those living in cities. The same people are not connected to mains gas, and therefore pay a great deal to have tankers deliver heating oil to their houses.

[Liz Saville Roberts (Dwyfor Meirionnydd) (PC)]

I congratulate the hon. Member on securing this debate. As he will know, we are talking about fairness to communities. One of the unfair issues in terms of communities and the cost of electricity is standing charges, whereby households in north Wales and Merseyside pay £100 more a year than those in London. Does the hon. Gentleman agree that the present arrangement is fundamentally unfair and that things should be shared more fairly across the nations of the United Kingdom?

[Mr MacDonald]

I absolutely love that—I am going to make the right hon. Lady a dame in my first honours list. It is an absolute disgrace that people in rural Britain pay a premium to get renewables, even though it is us generating the electricity. The standing charge should be the subject of our next discussion.

Those of us in the highlands, and indeed in many other parts of Britain, have long, dark, windy and cold winters. When many people open the curtains in the morning, they look out on to a wind farm selling cheap, green energy to the big cities. The remote highlands and islands, the Scottish Borders, Wales, Cumbria and the west country are among our poorest areas.

[Mr Gideon Amos (Taunton and Wellington) (LD)]

Does my hon. Friend agree that community benefit and compensation for communities is important for not only the communities that experience these projects but the planning system? Take it from a former planning inspector: if we had a sensible and predictable level of community benefit, it would make granting planning permission smoother, with fewer objections.

[Mr MacDonald]

There is a recent change to planning in Scotland—I am unsure whether it extends to England—called national planning framework 4, which makes the economic benefit to the community part of the criteria for getting a plan in, so we are moving towards what my hon. Friend describes.

The areas I mentioned are among our poorest. They suffer from the highest level of fuel poverty, an older population, lack of affordable housing, poor transport infrastructure, struggling market towns, lower wages, and often worse education and health services than cities. Rural people have higher costs and lower incomes.

[Ann Davies (Caerfyrddin) (PC)]

In Caerfyrddin, we have the possibility of four lines of new electricity cables and pylons coming through. Does the hon. Member agree that the best community benefit for Caerfyrddin and our rural communities would be to underground the cables rather than have these pylon lines coming through?

[Mr MacDonald]

Somebody whose opinion I respect greatly told me that undergrounding cables was no more expensive. I was very surprised at that, because I had understood from the transmission line companies in Scotland that it was a great deal more expensive to underground them. I will definitely look into that, because I know that it is a requirement to underground them in Norway. We should explore that issue further.

So we have boom time in renewables, generating trillions of pounds over many decades, and we have a rural population that really needs financial help and investment.

[Claire Young (Thornbury and Yate) (LD)]

In the last decade, my constituency has seen a wide range of solar schemes with different community benefits, ranging from £20,000 a year for the 25 years of the project’s expected life, which is handed over automatically to parish councils, to just a £30,000 pot, which people have to bid into. Does my hon. Friend agree that there should be equity of treatment, and that there are benefits to having an ongoing relationship, beyond the monetary value it brings?

[Mr MacDonald]

I think my hon. Friend will be thrilled with the next part of my speech, which will answer that question. We have a huge financial need, and we have the renewables revenue, which we will talk about in a second. Money and need—bingo, we have a match. Is that not exactly what we are here in Parliament to facilitate?

I am pleased to hear that the Great British Energy Bill is largely here, as it holds the prosperity of much of rural Britain in its hands. It can insist that communities have a stake in local renewables projects and that we legislate to require all renewables projects to pay a significant sum to impacted areas. Amazingly, it made no mention of community ownership of renewables projects or of community benefits.

[Alison Griffiths (Bognor Regis and Littlehampton) (Con)]

I have been fortunate enough to visit your beautiful constituency, but in my beautiful constituency of Bognor Regis and Littlehampton, we have Rampion 2, a renewable wind farm that is due to go on to the sea closer to land than Rampion 1, with huge environmental and visible impacts. On your point about where the benefits sit, there is currently no requirement for any visitor centre to sit within the constituency impacted by the wind farm. Do you agree that any commercial benefits, such as a visitor centre, which will bring tourism and jobs, should reside in the most impacted constituency?

[Dr Rupa Huq (in the Chair)]

Order. For the benefit of everyone in the room, we avoid the word “you” because it refers to me. I remind all hon. Members that we speak in the third person.

[Mr MacDonald]

It is fair to say that building a visitor centre was not one of my list of key things to do with the money, but I shall add it to my list at around No. 97 —there is a space there. We will talk about this more in a minute, but fuel poverty, affordable housing and so on are probably the key uses for that money at the beginning.

The Lib Dem energy spokesman, my hon. Friend the Member for South Cambridgeshire (Pippa Heylings), has submitted an amendment to the Great British Energy Bill that would allow it to consider community benefits, and I very much hope that her amendment is taken forward.

I had a motion on community benefits passed in the Highland council. I have consulted the electricity generators and Ofgem. I have met Government Ministers here and in Scotland, discussed the issue with most knowledgeable people in all political parties and generally bored everyone I can find with it. There is consensus that it would be fair to require that the impacted rural people of the highlands and islands, of Scotland and of the UK as a whole benefit from bearing the costs of hosting our energy infrastructure.

The Highland council has done the work. It has a social value charter, which it would be pleased to share. The council and I agree on almost all aspects, except that the amount paid to communities should be a percentage of gross income from the projects, rather than £12,500 per megawatt. A percentage would allow communities to benefit from a soaring electricity price, as happened after Russia invaded Ukraine, and protect the project owners and utilities if the electricity price slumped.

Here is my financial proposal: 5% of revenue from all newly consented renewable energy, generated both onshore and offshore, should be paid to community energy funds. For onshore projects, two thirds of that should be paid to the affected council board, with one third paid to a council strategic fund. For offshore projects, all of that 5% of gross revenue should go to a council strategic fund. An existing renewables project should also pay money; I will explain that in a second.

[Anna Dixon (Shipley) (Lab)]

I am sure the hon. Gentleman will agree that the ownership of energy production is really important. The inaction of the last Government left the country reliant on energy produced and owned abroad, so I am proud of the work that this Government have done to found the publicly owned GB Energy, which will give us long-term energy security. I welcome this debate on the community benefits of renewable energy projects. I was reassured in the House just last week about communities such as Cullingworth in my constituency, where we are looking at proposals to host associated infrastructure—basically battery storage. Does the hon. Gentleman agree that those sorts of benefits should be for not just energy generation, but the associated infrastructure, such as battery storage? Community benefits should also come locally from those projects.

[Mr MacDonald]

I wholeheartedly agree. It should be the same for the transmission lines and the interceptors, for pumped storage and battery—really, the whole infra- structure of producing renewables.

So where is the 5% going to come from? It is really important that investors do not suffer from swings in British policy, and that they continue to invest in UK energy infrastructure. It is key that this increase is passed on to all consumers in the UK as part of a green tariff. My informed opinion is that paying that 5% to impacted communities would translate to about a 1.25% increase in electricity prices in Britain.

What should a council that receives that substantial amount of money use it for? Here are three examples of what has been happening already. One community fund near me gives £1,000 to each of the properties in the community. If 1,000 properties were given £1,000 each, that would be £1 million. Perhaps the locals managing the fund would allocate it to households that earn less than the UK median household income of £34,500. In any case, at a time of winter fuel allowance cuts, that would be most welcome. A second option is for the community to use the money to build affordable housing, and I know of a third community that injects money into its local care sector, for care homes.

Let me plagiarise the Highland council report in order to provide some context. In 2023, in the highlands, local communities received approximately £9 million. That is below the expected commitment based on Crown Estate Scotland’s guidelines, which suggest that developers should contribute £5,000 per megawatt, equating to £13.9 million. The total income from wind generation in the highlands for 2023 was estimated to be around £590 million. That calculation is based on a potential production of 11.8 GW. If all renewables—including hydro, offshore wind and pumped storage—were included, the benefit increased to 5%, and the amount of renewable energy doubled by 2030 to 22 GW, which is likely, then the community benefit would rise well above £50 million per year. That is a heck of a lot of money to highland rural communities. What would that be across the UK? £500 million a year? £1 billion? £5 billion over 10 years? This is a proper levelling-up fund for rural communities.

It was recently announced that two cancer wards on the island of Lewis in the Hebrides will share £4.5 million from a single offshore wind farm. That shows what can be achieved.

[Jayne Kirkham (Truro and Falmouth) (Lab/Co-op)]

Does the hon. Member agree that when we are looking at scaling up wind—floating offshore wind, for example, which will benefit Scotland and Cornwall, where I am from—we could look more closely at contracts for difference, and the licences and leases with the Crown Estate, in order to embed social value in them on a large scale and generate benefits such as apprenticeships or the building up of local supply chains? There are exemptions to the World Trade Organisation rules and so on, and we could manage to do that in quite a substantial way.

[Mr MacDonald]

I was a Highland councillor for quite a few years and sat on the planning committee. We heard application after application promising a large number of jobs and a large amount of local buying, yet we did not see that, but I do think we need to tighten up a great deal what is being offered in all the different aspects of renewables.

I have been looking at the situation overseas. In Denmark, new renewables projects must offer at least 20% ownership of their overall venture to local residents. In Germany, there is a local tax on renewables. In Heligoland, an archipelago in the North sea, three offshore wind farms were built in the mid-2010s, and the tax revenue taken in by the municipality was €22 million in 2016 alone. In Ireland, the contribution to community benefit fund is to be set at €2 per megawatt-hour of generation.

[David Chadwick (Brecon, Radnor and Cwm Tawe) (LD)]

I thank my hon. Friend for securing this terribly important debate on the fact that rural communities are not being paid sufficiently to host the infrastructure that we need to get to net zero. Earlier this month I visited Awel Aman Tawe, a community energy charity based in my constituency that uses the revenue that it gets from a turbine that it erected itself to pay for regeneration in that deprived area of Wales. Does he think that is a preferable or more desirable outcome in comparison with other projects, such as Bute Energy’s project in Powys, where the developer is hiding the community energy funds behind layers of bureaucracy that might make them inaccessible to local residents?

[Mr MacDonald]

The absolute sweet spot of this entire discussion would be communities’ ownership of their own renewables, which they could control and distribute as they wanted. Indeed, that is happening in some places. Of course access to funding is the big issue, but that is the perfect solution.

Surely, one of our great injustices is that our poorer people, who provide half the energy to the UK, have the highest level of fuel poverty and the highest electricity bills, and suffer the industrialisation of their nearby countryside. Now is the time to resolve that injustice.

[Dr Rupa Huq (in the Chair)]

Members who wish to make a speech should stand, and then we will be able to calculate the time limit. I will begin calling the Front Benchers at 3.28 pm, so there is not a lot of time left, because we have had a lot of long interventions.

--- Later in debate ---

[Mr Angus MacDonald]

I did forget to disclose that I may have a potential conflict of interest, the details of which are on the parliamentary website. I apologise for not saying so before, but I do not think anyone would find it a major such conflict. You did mention—

[Dr Rupa Huq (in the Chair)]

Order. The Minister did; not me.

[Mr MacDonald]

Sorry. The Minister mentioned community benefits, but in rather a weak way. The Members in this room—I think there have been 60-plus of us here—represent the majority of the land mass of Britain. I think the message we are sending loud and clear to the Minister is that we all feel very strongly about the community benefits, and we very much hope they will be significant. Thank you very much for allowing me to host this debate.

Question put and agreed to.

Resolved,

That this House has considered community benefits from renewable energy projects.

Great British Energy Bill

Angus MacDonald Excerpts

2nd reading
Thursday 5th September 2024 Commons Chamber

[Mr Angus MacDonald (Inverness, Skye and West Ross-shire) (LD)]

Thank you, Madam Deputy Speaker. That was a very heartfelt speech from the hon. Member for St Austell and Newquay (Noah Law). Cornwall and the highlands of Scotland share our westerly reaches and Celtic background.

I am very proud to have been elected to serve the people of the west highlands and Inverness in this Parliament. Following the Electoral Commission’s mistaken decision to cut the number of highland constituencies from three to two, I have, to a large extent, replaced two former MPs in Ian Blackford and Drew Hendry, who represented to the best of their ability Ross, Skye and Lochaber, and Inverness, Nairn, Badenoch and Strathspey respectively.

To say that my constituency is geographically challenging would be an understatement. It takes four hours to drive from east to west and from north to south. The highlands of Scotland are bountiful in their beauty—from the miles of sandy beaches in Gairloch and Lochaber, the mountains of Ben Nevis, and the Skye Cuillins and Torridon, to the castles of Urquhart on Loch Ness and Eilean Donan in Wester Ross. Our oaks and Scots pine trees are bent over as a result of the prevailing westerly wind. We have beautiful lochs and large, powerful rivers around every bend in the road.

Astonishing though the beauty is, it is the people of the highlands that I—like my amazing predecessor Charles Kennedy—love and am delighted to represent. Although the highlands are beautiful and the people wonderful, the region struggles financially. The Highland council is burdened with debts of £1.2 billion. Inverness’s population has increased rapidly, but the three-and-a-half hour drive from our highland capital to Scotland’s capital is not dualled and is not safe. The rural west faces severe fuel poverty, long journeys for NHS treatment, public service cuts, and a lack of essential services, with many young people leaving for cities.

Would it not be wonderful if a fairy godmother came along and bestowed a wonderful asset on the highlands—something that generated serious money for the area over generations, and a long-term provider of great employment? There is such an asset. The west highlands is the wettest area in Europe, and the wind is virtually unceasing. We have the most fantastic land to benefit from the move to renewables. That opportunity has not gone unnoticed: utilities and infrastructure firms from all over the world are queueing up to install 200-metre-high wind turbines on our hills; our hydro schemes are getting upgraded; and there are £5 billion pump storage sites at various stages of development in my constituency. Major construction projects abound across the highlands. Thousands of workers are brought in and accommodated in temporary modular housing.

Peak electricity use in Scotland is 3 GW, while our peak production is 10 to 14 GW. Scotland may add as much as another 10 GW of production capacity by 2030. We will be producing seven times more electricity than we use. Like for prospectors to a gold rush, the rich opportunities are accompanied by challenges. There are two important issues to which we need to pay attention. First, there is a cost to that for the highlands: the industrialisation of our countryside. What was a beautiful view of the mountains is now rows of 200-metre-high whirling turbines, and large new pylons marching across the country to the cities, where the demand is. Secondly, what is in it for the locals? The turbines and generators are manufactured overseas, the developer and utilities firms are from outwith the UK, and the workers are shipped in. Last year, our total community benefit from that multibillion-pound industry was an estimated £9.1 million in the highlands, and £26.4 million across Scotland as a whole. It should be a multiple of those figures. We in the highlands pay 50% more for electricity connection than people in the south of England, yet increasingly, the highlands is where that electricity is generated. The Government are releasing the restrictions on onshore wind farms in England, so what is an issue for Scotland now will become an issue for many rural areas across Great Britain.

What can be done about this? I propose that 5% of revenue from all newly consented renewable energy generated both onshore and offshore should be paid to community benefit funds. For onshore projects, two thirds of that should be paid to the affected council ward, with one third paid to a council infrastructure fund; for offshore projects, all of that 5% of gross revenue should go to council infrastructure funds. Existing renewable projects over 1 MW should pay 2%, as per the split already outlined. For transmission lines and substations, the Irish have an excellent community benefit plan that we can learn from—I would like the energy Minister to listen to this, rather than do his emails. The Norwegians handled the revenue from the North sea oil boom well, and their sovereign wealth fund is now valued at $1.7 trillion. Britain saved nothing, and we are in real danger of repeating that mistake with the renewables bonanza.

I close by saying there is considerable disadvantage to the people of rural Britain in taking on the downsides of hosting our move from a carbon-based economy to a renewable electric alternative. It is only fair that we make it beneficial to the people affected. It is great that the Great British Energy Bill will be further strengthened to include enabling community energy—that is really important.

Finally, Inverness is the centre of onshore and offshore wind, the existing hydropower industry, and massive pump storage projects. I am glad that GB Energy is going to be headquartered in Scotland, and I believe Inverness would be the right place for it. Irrespective of that, one of its first jobs should be to look at my proposals and to ensure that the benefits of Scotland’s renewables can be properly shared, because this is an opportunity that we cannot afford to miss.