Steel Safeguards
Debate between Anne-Marie Trevelyan and Jacob Young(1 year, 10 months ago)
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Anne-Marie Trevelyan
I am at risk of repeating myself, but I will do so for clarity. I was unable to make it to the Committee this morning because I was dealing with those international relationships and having really important conversations. Obviously I was not able to do that until I had made a final determination as a result of those. The information was passed to the Committee yesterday that I would not be able to make it, once we knew that you had granted a statement for today, Mr Speaker. That was the point at which I was able to make a final determination, and then of course I needed to start talking to my WTO friends and colleagues. The timeframe is such that one thing comes from another, but we are always at the disposal of the Chair to determine when those statements are able to be made in the House.
Jacob Young (Redcar) (Con)
Seven years ago Teesside faced the single biggest event of the industrialisation, with the collapse of the SSI steelworks and the loss of 3,000 jobs overnight. I wish to pay tribute to my predecessor, Anna Turley, for her work in trying to prevent the closure of that plant. Since this Prime Minister took office, the Government have stood up for our industry with support for British steel protecting 900 jobs in Redcar and Cleveland and extending the safeguards last year and again this year, as we have heard today. Can I urge the Secretary of State to continue her support for the steel sector, recognising how crucial steel is as a strategic national asset?
Anne-Marie Trevelyan
My hon. Friend is absolutely right, and I also pay tribute to his predecessor, whom I know well and who was a great champion. We have discussed some of the challenges that the steel industry continues to face, and this Government are absolutely focused on finding the right solutions for them. I am pleased that the category 17 safeguard, which we will keep, should at least help the steelworks in my hon. Friend’s constituency to play on a level playing field with the products that it makes.
Oral Answers to Questions
Debate between Anne-Marie Trevelyan and Jacob Young(2 years ago)
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Anne-Marie Trevelyan
Although there was indeed a drop in exports during covid, we have seen a 10% increase in the last quarter, which is very welcome. I am always happy to meet the hon. Gentleman, as he knows, to discuss any particular businesses, but the export support service, which has now been running for a number of months, is there to support SMEs in particular if they have issues with a country in Europe with which they want to trade. The team has also been focusing on supporting businesses with Russian and Belarusian activities in the past month, especially on supporting them to find alternative supply chains. The export strategy, which we published in October last year, is bringing together a whole series of tools to help those SMEs to discover new markets, and, indeed, to use the ones that now have more prospects thanks to the FTAs that we have.
Jacob Young (Redcar) (Con)
I congratulate the Secretary of State and her Department on their success in lifting the US 232 tariffs on UK steel and aluminium. Does she not agree that this flexibility to boost global trade afforded to us by our departure from the European Union is exactly why my constituents voted for Brexit?
Anne-Marie Trevelyan
I congratulate my hon. Friend on his recent marriage, which is very exciting. Let me just note that those of us on the Front Bench begin to feel very old when our youngest Members start taking this great step of confidence, which exactly reflects how my hon. Friend has campaigned for his constituents on the matter of steel. It has been a real pleasure to be able to bring the section 232 tariffs to a conclusion so incredibly quickly, working with my US counterparts and understanding that our UK-US relationship is critical not only to trade, but across so many of those inter-related activities. We are working closely together on trade and security matters as we deal with the terrible challenges in Ukraine.
Electricity
Debate between Anne-Marie Trevelyan and Jacob Young(3 years, 2 months ago)
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The Minister for Business, Energy and Clean Growth (Anne-Marie Trevelyan)
I beg to move,
That the draft Electricity Supplier Payments (Amendment) Regulations 2021, which were laid before this House on 21 January, be approved.
The statutory instrument amends regulations concerning the levies that fund the operational costs budget for the Low Carbon Contracts Company and the Electricity Settlements Company. The Low Carbon Contracts Company administers the contracts for difference scheme on behalf of the Government and the Electricity Settlements Company administers the capacity market scheme. Those schemes are designed to incentivise the significant investment required in our electricity infrastructure; to keep costs affordable for consumers; and to help to meet our net zero target while keeping our energy supply secure.
Contracts for difference provide long-term price stabilisation to low-carbon generators, allowing investment to come forward at a lower cost of capital, and therefore at a lower cost to consumers. The capacity market ensures security of electricity supply by providing all forms of capacity with the right incentives to be on the system and delivers capacity when needed by increasing generation or by turning down electricity demand in return for guaranteed payments.
In both schemes, participants bid for support via a competitive auction that ensures that costs to consumers are minimised. The next contracts for difference auction, the fourth to date, is planned to open in late 2021, and will be available to both established technologies such as solar PV and onshore wind as well as less-established technologies such as floating offshore wind. As the Prime Minister announced in October, we are seeking to secure up to 12 GW of renewable electricity capacity in this round—double that secured in the last round, which was held in 2019. That will allow a broad range of renewable technologies to come forward while delivering the best deal for bill payers.
The capacity market is tried and tested, and is the most cost-effective way of ensuring that we have the electricity capacity that we need now and in future. It facilitates investment in the existing capacity to remain in the market, and drives innovation in financing new capacity to be built. The capacity auctions held to date have secured the capacity that we need to meet the forecast peak demand at 2023-24. The next auctions, which will open tomorrow with the T-1 auction, and on 9 March with the T- 4 auction, will secure most of the capacity that we need in 2024-25.
The Low Carbon Contracts Company and the Electricity Settlements Company play a critical role in delivering the contracts for difference and capacity market schemes. They enter into and manage contracts for difference with low-carbon generators, and collect the supplier obligation levy from suppliers, which they use to make payments to generators under contracts for difference.
The statutory instrument sets a revised operational cost levy for the Low Carbon Contracts Company, and a revised settlements cost levy for the Electricity Settlements Company, which they collect from suppliers to fund their day-to-day operations. It is important that the LCCC and the ESC are sufficiently funded to perform their roles effectively, given their critical role in administering those schemes. However, the Government have made it clear that both companies must deliver value for money, and with that in mind we have scrutinised closely their operational cost budgets to ensure that they reflect their operational requirements and objectives. Savings have been identified in a number of areas. Both the LCCC and the ESC are mindful of the need to deliver value for money, as their guiding principle is to maintain investor confidence in the contracts for difference and capacity market schemes while minimising costs to consumers. They have taken a number of actions to date to reduce costs, and it is because of their actions that costs are falling both per contract and by overall generation capacity despite the growing size of the contracts for difference portfolio.
Jacob Young (Redcar) (Con)
My hon. Friend rightly points out that contracts for difference have meant a massive leap forward in our investment in wind technology and a decrease in costs for consumers. Does she agree that this is a perfect way to increase production of hydrogen as well, and will she consider meeting me to discuss how we can use contracts for difference in hydrogen production?
Anne-Marie Trevelyan
My hon. Friend is, as ever, a champion for Teesside, where, the work under way to help grow the future hydrogen capacity for our country is absolutely cutting edge. I will be absolutely thrilled to meet him to discuss this matter more fully. For now, the CfDs will be for the existing and established technologies, but he is not wrong that the future is bright for hydrogen. I look forward to meeting him to discuss it more fully.
We expect to increase to 55.16 GW of capacity and 546 capacity providers in 2021-22. Despite the increase in those numbers, the operational costs are expected to be marginally lower this year than last. The operational cost budgets for both companies were subject to consultation, which gave stakeholders the opportunity to scrutinise and test the key assumptions in the budgets and, importantly, to ensure that they represent value for money. The budgets remain unchanged save for one amendment, which I will briefly summarise. The consultation was published before the outcome of the 2020 spending review was known. The review had announced a pause in public sector pay rises for the majority of the workforce. Taking into account the outcome of this review and the wider economic landscape, the LCCC’ remuneration committee decided to agree a pay pause for its staff in 2021-22. Consequently, an allowance contained within LCCC’s operational cost budget for pay rises that was included in the consultation has now been removed.
To conclude, taking into account the removal of this allowance, the proposed operational cost budget for the LCCC in 2021-22 is £20,736,000 and £7,472,000 for the ESC. The amendments revise the levies currently in place to enable the companies to collect enough revenue to fund these budgets. Any levy collected that is not spent will be returned to suppliers at the end of the financial year in accordance with regulations. Therefore, subject to the will of Parliament, the settlement cost levy for the Electricity Settlements Company is due to come into force on the day after these regulations are made, and the operational costs levy for the LCCC by 1 April 2021. I commend these draft regulations to the House.
Oral Answers to Questions
Debate between Anne-Marie Trevelyan and Jacob Young(3 years, 9 months ago)
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Anne-Marie Trevelyan
As the hon. Lady is aware, we put £150 million into the IMF emergency fund, and the Treasury continues to lead in the Paris Club discussions and with the G20 to ensure that the right solutions are found for the long-term sustainability that those most vulnerable countries will need.
Jacob Young (Redcar) (Con)
Anne-Marie Trevelyan
Ensuring taxpayers’ money is well spent is central to DFID’s work and it is embedded in all our activity and will be at the heart of the new FCDO. Programmes are regularly appraised and monitored to ensure that they are value for money, performing effectively and delivering on manifesto commitments.