Oral Answers to Questions

Barry Gardiner Excerpts

Thursday 31st January 2013 Commons Chamber

[Mr Hayes]

As I have already said, the strike price that we agree and the process that leads up to that agreement will indeed be subject to such scrutiny, because we will be transparent about the arrangements that we make. Let me be perfectly candid. If this deal does not stack up, we will not proceed with it. It must be in the interests of taxpayers and it must be fair, although of course it must be commercially attractive as well. The negotiations are going ahead, and it would be inappropriate for me to say more about them, but I will say that this can be a win-win for our future.

[Barry Gardiner (Brent North) (Lab)]

The Minister is right to say that the deal must be in our interests, but that cannot be known until after the fact of the agreement on the strike price. The key problem with the strike price is a perverse incentive to overestimate the construction costs on which it will be based. If it is subsequently found that those costs are lower than the estimate, the consumer will be paying more for the strike price that the Department has agreed. Why did the Minister and his colleagues on the Government Benches vote against our amendments to the Energy Bill, which would have made transparency essential to the entire process?

[Mr Hayes]

Because we have said that we will publish an investment contract concerning details of the strike price. The hon. Gentleman, who is an experienced Member of Parliament, knows that the process of negotiation itself is bound to deal with commercial matters that are sensitive, and is bound to deal with trade secrets which, as he acknowledged in the Bill Committee, cannot be published. He also knows that it might be subject to all kinds of other matters that it would be inappropriate to debate now. However, we are clear about this: we will be transparent, and we will be straightforward.

--- Later in debate ---

[Mr Hayes]

I am aware of that situation, and I know how well my hon. Friend has articulated and represented the interests of her constituents in this regard. This is, in the end, a commercial decision. RWE took the decision to use Tilbury as a test bed in October 2011 and converted the station to run on 100% biomass. Particular circumstances have affected that decision, but I will be more than happy, as I already have begun to, to discuss the matter further with my hon. Friend.

[Barry Gardiner (Brent North) (Lab)]

In his response to my question earlier, the Minister of State was gracious enough to say that he wanted complete openness about the strike price. Will he therefore tell the House whether there will be a provision in the strike price negotiations for a claw-back, should the estimated construction costs exceed the real ones?

[Mr Hayes]

The hon. Gentleman is being mischievous. I have been very clear that those matters will be published for the scrutiny of the House, but he would hardly expect me to go into the detail of the negotiation while the negotiation was ongoing.