New Pylons: East Anglia

Bernard Jenkin Excerpts

Tuesday 19th July 2022 Westminster Hall

[Graham Stringer (in the Chair)]

Before we start the debate, I want to say something about the exceptional heat. While the heat remains at this level, I am content for Members not to wear jackets or ties in Westminster Hall. Mr Speaker has announced similar arrangements for the Chamber. When the House returns in the autumn, Mr Speaker and the Deputies will expect Members to revert to wearing a jacket, and will strongly encourage male Members to wear a tie when speaking in the Chamber and Westminster Hall.

[Sir Bernard Jenkin (Harwich and North Essex) (Con)]

I beg to move,

That this House has considered new pylons in East Anglia.

It is my great pleasure to introduce this debate on the prospect of new pylons in the east of England, and I thank the Backbench Business Committee for granting us time to discuss the new electricity transmission infrastructure in our constituencies, which will have a high impact if it goes ahead as proposed.

I am introducing the debate barely 24 hours after the death of my mother. She loved the countryside, she loved Essex and she lived in Suffolk; and she would have wanted me to carry on with the debate, I am absolutely certain.

East Anglia Green Energy Enablement, or GREEN, is the title of the project that proposes to build a new high-voltage network reinforcement between Norwich, Bramford near Ipswich in Suffolk, and Tilbury on the Essex coast. As an MP, I have never received as many emails from my constituents about a single topic.

Today, I speak as chair of the Off Shore Electricity Grid Task Force, or OffSET, which does what it says on the tin. We are calling on National Grid to publish a fully costed offshore alternative to East Anglia GREEN. Yesterday evening, we had a helpful meeting with National Grid and Electricity System Operator, or ESO, and National Grid informally made the commitment that it would produce those costings and plans so that they can be compared with the proposal it is making. We urge National Grid to make that commitment publicly.

In Scotland and Wales, new transmission infrastructure faces a similar backlash. Scottish and Welsh MPs kindly signed up for the debate to explain their frustration over the development of infrastructure in their constituencies, and if they are not here today, that is probably because of the heat, although their moral support is certainly with us.

The environmental and societal impacts of East Anglia GREEN will fall disproportionately on my constituents in North Essex, although they will see little benefit from the new infrastructure in their own lives. On the contrary, the impact is all negative. The new transmission infra- structure is primarily required to transport electricity from offshore wind farms off the east coast and from new nuclear builds on the coast to London.

The East Anglia GREEN background document states that the reinforcement will require

“underground cabling through the Dedham Vale Area of Outstanding Natural Beauty”.

That is obviously a mitigation, but it will create another problem. The construction phrase “undergrounding” will impact local habitats and archaeology—Dedham Vale is an ancient archaeological site as important as Stonehenge, only the henge in Dedham Vale was wooden, so it is not standing today, although its imprint still exists—as well as destroying valuable agricultural and arable land. Local farmers are concerned that undergrounding will disrupt soil layering and impede drainage.

The national planning framework states that development within area of outstanding natural beauty settings should be

“sensitively located and designed to avoid or minimise adverse impacts on the designated areas.”

In my constituency, I am particularly concerned about the construction to the south of the area of outstanding natural beauty, which leads to and from the proposed site of the Tendring substation. It will require a double run of cables, to the substation and then back from the substation towards London. That double run of pylons will adversely impact local communities to the north of Colchester.

I do not understand the rationale whereby because a community—Ardleigh village, in this case—already hosts existing infrastructure, it is seen to be best placed to host new infrastructure. Ardleigh has a small substation, but the planned new Tendring substation is much larger than the existing one and will cover 20 hectares, spreading into three different parishes. Two further customer substations may also be located nearby.

The House of Commons engagement team has kindly spoken to many constituents in all our constituencies about their experience of the National Grid consultation, and I thank all those who contributed, including two of my constituents. Laura, who stands to have pylons on three sides of her property, was told by a local estate agent that the value of her house could decline by 30% to 40%. That is not costed into any proposal; it is a hit that she and her family take, not something that National Grid or anyone else has to pay for. Julia, who was recently widowed, is struggling to sell her family home of 28 years because of uncertainty surrounding the East Anglia GREEN. The proposals are already blighting people’s lives.

[Mr Mark Francois (Rayleigh and Wickford) (Con)]

I am sure I speak for all of us here today when I offer my hon. Friend my most sincere condolences on his grievous loss.

The National Grid plan does not come through my constituency of Rayleigh and Wickford, but it runs relatively close. However, having checked with my office yesterday, I was given no notification at all about this consultation and, as far as I know, neither were my constituents. Does my hon. Friend agree with me—I say this to the Minister through him—that the consultation should be rerun, so that all Members of Parliament and the people they represent can have their say?

[Sir Bernard Jenkin]

I am very grateful to my right hon. Friend for his kind words. I agree with him completely. One of my arguments is that this consultation is completely inadequate. All the respondents to the House of Commons engagement team’s inquiries expressed a strong preference for an offshore transmission system, which would avoid the blighting of farmland, and people’s homes and communities. That barely figures in the consultation and it was only in yesterday’s discussion that National Grid started to explain why it had not really considered that, but it has not published the reasons, figures, assessment or analysis as to why that has been dismissed so quickly.

[James Cartlidge (South Suffolk) (Con)]

My hon. Friend is making an excellent speech. Did we not learn yesterday that the reason National Grid had not published those detailed figures and analysis is because it did not have them, and that its pledge to produce them by the end of the summer—to give us more information that it believes will show the justification for the decision—suggests it will be working in reverse? That is not how a consultation should be done.

[Sir Bernard Jenkin]

No, it is not, but to be fair to National Grid, it engaged openly with us and we were grateful for that engagement. I believe the people at National Grid are doing their best; of course, they are working within a regulatory framework and against expectations that have been set since the industry was privatised in the 1980s that are now completely out of date. Everybody is guilty of making mistakes, but this is not about blaming people for making those mistakes; we need to address why the mistakes are being made and put that right, without casting blame on the people who are doing their best.

[Jim Shannon (Strangford) (DUP)]

I commiserate with the hon. Gentleman on the loss of his mum. There is nobody as close to anyone as their mum, as I know, and we are very much aware of the hon. Gentleman’s sorrow at this time.

The hon. Gentleman has outlined the environmental impact. I know this is not in my neck of the woods but in East Anglia, but the issue is the same. Whenever these pylons are being put in back home, many of my constituents express concern about the health impacts. Is the hon. Gentleman aware of those issues? Have his constituents conveyed to him their concerns about the health impacts for individuals that could well be caused by pylons? For instance, he mentioned a lady in his constituency who will have pylons on three sides of her house. Surely she must have some extreme worries about that?

[Sir Bernard Jenkin]

I am not familiar with that issue, but the scientific literature on the health impact of pylons is still contested. There is no doubt, though, that they have a psychological impact, and that the psychological blight on people’s lives can be very serious.

People do not like living near pylons, which is why they tend to favour buying homes that do not have views that are blighted by pylons. It is a very sad development that National Grid is still proceeding in this direction, and I call this overground proposal a continuation of the patch and mend approach, as against the undersea option known as “Sea Link 2”. National Grid says that the “Sea Link 2” scenario would not provide the required capacity and would have required onshore transmission infrastructure as well. It should publish a like-for-like offshore alternative to East Anglia GREEN so that we can see not only what the additional costs would be, but what the additional benefits would be, and we could offset things such as property blight and damage to the environment, which is not costed into the proposal.

It is interesting to note that there is 10 times more total mileage of committed offshore transmission cabling in Scotland and the north of England than in the east of England. A constituent affected by East Anglia GREEN wrote to another National Grid consultation, and the community engagement team explained that the main reason for offshoring infrastructure from County Durham to southern Scotland was to

“significantly reduce its impact on communities.”

National Grid, again informally, now maintains that the reason for offshoring Scottish projects is that the electricity would have to cross multiple load boundaries, which is expensive. Again, it must explain that to the relevant stakeholders in detail. There is a complete lack of transparency about the process, which totally undermines public confidence in the decisions being proposed.

[Alex Burghart (Brentwood and Ongar) (Con)]

I extend my condolences to my hon. Friend at this time.

My hon. Friend is making an important speech. Does he agree that it is hard for us to explain to our constituents why an offshore route is not being taken when such routes clearly exist in other parts of the country? A number of colleagues in the Chamber today, and my hon. Friend the Member for Saffron Walden (Kemi Badenoch), who cannot be here, feel that it is difficult for us to make the case to our constituents that the proposals are fair and right when we are not being given the evidence.

[Sir Bernard Jenkin]

That is absolutely right, but we also need to make the point that even if the evidence is made available and proves the point in favour of the present proposals, it is against benchmarks that are out of date and inadequate for the purpose. That is why I call this a patch and mend approach to the existing infrastructure, when the scale of the extra capacity required to be carried in the East Anglian grid is massive. It is a huge leap, yet there seems to be no strategic or controlling mind behind the planning of the national grid for the next 50 to 100 years. It is all on much shorter-term horizons.

[Mr Richard Bacon (South Norfolk) (Con)]

I extend my sincere condolences to my hon. Friend, in common with colleagues.

The lack of a controlling mind does seem to be one of the biggest problems. Does my hon. Friend agree that the only reason that the network needs to be reinforced from Dunston in the north of my constituency, going right across Norfolk and into Suffolk, is because of the perverse decision to route existing offshore wind connections to that part of the network, instead of following National Grid Electricity System Operator’s own advice, which is to accelerate the provision of an offshore transmission network, which would save up to £3 billion in capital expenditure and a further £3 billion in operating costs? Does he agree that now is the time to revisit that decision?

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[Sir Bernard Jenkin]

My hon. Friend is completely right, but the real question is: to whom do we go to get it done? National Grid says it is locked into a regulatory and planning framework and has to operate in a certain way—that the assumption must be that overhead pylons are the right solution, unless there are other reasons.

The most difficult thing in the whole process is that not even the Minister for Energy, Clean Growth and Climate Change, my right hon. Friend the Member for Chelsea and Fulham (Greg Hands), is accountable for what is being decided; he will tell us, “This is the framework and this is what we have to stick to.” He will then tell us that there is going to be a new proposal for a different regime that would arrive at different outcomes, but that is not going to affect this consultation, and we will be left with decisions being forced down corralled pathways by an outdated regulatory and planning framework.

Who is accountable, today, for the decisions that are being made? Who is it? Who should we go to, and say, “You’ve got it wrong and you can change it”? If nobody can change it, it must be my right hon. Friend the Minister who is accountable. He must accelerate the new regime, which would allow us to look much more comprehensively and capably at a strategic plan. There is no controlling strategic mind in charge of planning the national grid. It is just something that happens, through an outdated market mechanism that was designed to sweat the assets of an industry that had far too much capacity in the 1980s.

We are now in a completely different world. We need a strategic planning framework, and it should be located, accountably, within the Department, so that Members of Parliament can hold Ministers accountable for what is being decided, instead of us just being shoved off into the system, where we do not seem to have any influence.

[Sir Oliver Heald (North East Hertfordshire) (Con)]

May I express my condolences to my hon. Friend? I am so sorry to hear his news.

Does my hon. Friend agree that this is a wider problem? Losing the quality of our environment is a big cost for people’s wellbeing. In this case it is utilities and electricity; in Hertfordshire, it is about the chalk streams. No value seems to be given to environmental factors. We have regulators, but it is all about doing it cheaply. Does he agree that the Government need to look at the issue again, from the point of view of wellness, the environment and preserving the really valuable things in our communities?

[Sir Bernard Jenkin]

I could not agree more. We have environmental policies and net zero policies that are costing the earth, even though they are designed to save the earth—they are very important policies and we put a great deal of money into them—and yet we have other policies that despoil the environment and communities. The damage they do is not costed into the proposals.

In a new regime, the effect on property prices, the loss of agricultural land and other non-monetised costs of the proposal need to be reflected in the costs; I think we would then find that the offshore transmission system would provide better value for money, and for the environment and communities. If it was worked out properly, an offshore ring main around the east of England down to London, with its connectivity, an interconnectedness to the continent, and direct connectivity from the onshore nuclear power stations and the new offshore East Anglia array—incidentally, the development of offshore wind is being held back by the lack of capacity in the national grid—could be the quickest proposal, because we would not have the same planning issues that we are tied up with here.

Dare I mention the words “judicial review”? If my constituents go for a judicial review—they are very well funded and well organised, and we are backing them—how many years will that hold up the proposal? Would it not be better for the Government to cut through and say we should go for an offshore grid, which has public support and which people recognise will help us to achieve our net zero targets more quickly and protect the environment and communities? That is what we should do.

The main point I will leave the debate with is that public opposition to infrastructure risks undermining the roll-out of renewable and nuclear power. The Government must balance what is best for local communities with what appears to be cheapest. The current approach is not serving my constituents in Harwich and North Essex. The current proposals, and the regime they reflect, command no public confidence at all in the Government of this country, and should change.

[Graham Stringer (in the Chair)]

Before I call hon. Members, I offer my condolences to the hon. Member for Harwich and North Essex (Sir Bernard Jenkin). I am sure I speak for everybody in this hall in doing that.

I will call the Opposition spokesperson at 10.40 am. I do not want to set a time limit; you can do the calculations yourselves. People usually take the appropriate time when it is left to them, rather than have the Chair set a time limit. I call Jerome Mayhew.

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[Sir Bernard Jenkin]

I am most grateful for your chairmanship of these proceedings, Mr Stringer, and to the Minister for his response and the care that he has taken over the matter. I am extremely grateful for the kind words that everybody has expressed to me today and for the high quality of all the contributions to the debate.

I am still very unhappy, because the Minister is effectively still disclaiming responsibility for the process that we are in and holds out no prospect of being able to change it. Environmental costs and community disbenefits are not costed into the scheme in any way; let us compare that with how much extra has been spent on High Speed 2 to mitigate its environmental and community disbenefits. Why are the Government not taking responsibility for the national grid in the same way as they take responsibility for railway or road development? It is inconsistent.

For the Minister to say, “Oh well, I’ll see what was said in that meeting,” and, “I can’t say anything because of the quasi-judicial nature of the process,” underlines that nobody is in charge and there is no strategic mind. It is for the Government to come to Parliament and ask for the powers necessary to be responsible, so that we can do something about this runaway train that is about to wreck the environment and communities—

[Graham Stringer (in the Chair)]

Order.

Motion lapsed (Standing Order No. 10(6)).

Shale Gas Production

Bernard Jenkin Excerpts

Tuesday 15th March 2022 Commons Chamber

[Greg Hands]

I thank the hon. Gentleman for that response. He is right in the first part of what he says: fracking is unlikely to change gas prices—or UK fracking is unlikely to do so. It is certainly unlikely to change it quickly, which is what I said in my opening statement. He is also right to point to the importance of following the science, and geological information is really important. However, I have to say to him that on nuclear he continues to be wrong. The SNP’s ideological hardcore opposition to nuclear is against Scotland’s interests. We have just seen the closure of the Hunterston nuclear power station, which provided enough nuclear energy to supply every home in Scotland for 31 years. It was a great Scottish, as well as UK, solution. Our other great source of gas is the North sea, where I would like to see the SNP approach becoming more constructive and supportive of the North sea transmission deal that the UK Government did a year ago.

[Sir Bernard Jenkin (Harwich and North Essex) (Con)]

I support what my right hon. Friend is saying about the need for more renewables and for nuclear. We all support the objective of net zero by 2050, but we are now in a gas supply crisis. The Government insist that we are in a European market; Europe is heavily dependent on Russia. We need to produce as much gas as we can. It is a simple question: is shale an option for the Government in the immediate term, or not? That is what we need to know; otherwise, the wells will be concreted over, which the Government said they do not want.

[Greg Hands]

I thank my hon. Friend for his support for renewables, nuclear and net zero, all three of which belong together, right at the centre of Government policy. He said that there was a gas supply crisis, but I would not characterise it that way. The UK has very secure sources of gas supply: around about 50% comes from the UK continental shelf; a further 30% comes from Norway, our great friend and NATO ally; and 20% is bought on the international market. There is obviously an issue with the price, but I do not share in my hon. Friend’s characterisation of a gas supply crisis.

Finally, my hon. Friend asked whether shale is an option. I repeat that Government policy in this area is unchanged: if people can show that the scientific base and the local community support is there, Government policy would be to allow shale if that turned out to be where those two key considerations led.

Russian Oil Import Ban

Bernard Jenkin Excerpts

Wednesday 9th March 2022 Commons Chamber

[Kwasi Kwarteng]

I was very determined not to inject any kind of partisan tone into these proceedings, but it struck me as particularly bizarre to hear the hon. Gentleman defend our North sea transition deal and the considerable oil and gas assets in Scotland. I would be very interested to hear what his Green counterparts in the coalition north of the border thought of his remarks.

In relation to protecting consumers, the hon. Gentleman will know that we are fully committed to the price cap, and review it all the time to determine how effectively it can operate. Of course, we are 100% behind renewables. Regarding onshore wind, it is important to remind the House that we lifted the ban on the pot one auction last year, which has led to a huge boost for onshore wind.

[Sir Bernard Jenkin (Harwich and North Essex) (Con)]

I thank my right hon. Friend for his statement and very much welcome the overall emphasis on replacing fossil fuels with renewables in the longer term. However, does his Department understand the urgency of the present short-term situation for not just prices, but security of supply? The Government have announced support for households, but what about businesses? Businesses tend to buy on six-month contracts and his hope that the situation will rectify itself within a few months is, I am afraid, hopelessly naive. We are facing a crisis in energy bigger than the oil price shock of the 1970s and it is likely to have as big an impact, or a bigger impact, on our economy than that had on our economy then. Is his Department seriously engaged with this situation with the necessary urgency?

[Kwasi Kwarteng]

We are absolutely engaged with that. As someone who is very interested in the 1970s, my hon. Friend will remember that the oil price quadrupled in three months. We are facing a difficult time. The Department is fully aware of the urgency of the problem, but he will appreciate that a lot of the investment that we needed to make simply was not made. We did not make enough commitment to nuclear—that was a historical mistake of previous Governments—but we are focusing on dealing with the problem in the here and now, and that is why my right hon. Friend the Prime Minister and I are coming up with a plan in the next few days to track—[Interruption.] I find it extraordinary that the right hon. Member for Doncaster North (Edward Miliband), who was responsible for energy policy in the last Labour Government, is smirking from a sedentary position, when he comprehensively failed the nuclear sector, completely failed on energy supply and completely failed on energy resilience. We are still trying to clean up his mess. I say to my hon. Friend that we are working on these plans.

Border Carbon Adjustment Tariffs and Decarbonisation

Bernard Jenkin Excerpts

Wednesday 16th December 2020 Commons Chamber

[Jerome Mayhew]

My hon. Friend has hit the nail on the head, because one of the key benefits of a border carbon adjustment is that it would allow us to decarbonise, and allow our heavy industry to accept the pain of higher energy costs, therefore letting the market work in our domestic market to incentivise the development of lower-carbon technology, while at the same time protecting it from being undercut by countries that are taking a little longer to go on the low-carbon journey.

We are not going to be spending money; we are going to be making money. That money could be used as the Treasury knows best. It does not mean that the money is taken out of the economy, because it could be put straight back in—in productivity-enhancing tax cuts, I hope, but that is up to the Treasury.

Best of all—I have saved the best till last—by freeing up the ability to price domestic carbon emissions at a realistic, behaviour-changing level, we can unleash the magic of the free market to seek out the most efficient solutions to low-carbon production. We do not need the Government to pick winners and subsidise industry once a market is working properly. Give a price to carbon, and that is exactly what we will create: a many-headed monster of innovation, entrepreneurialism, dynamism and efficient, productive capital growing our low-carbon future.

This future, if we are brave enough to embrace it before other nations, rather than just following, and if we are bold enough to allow the reshaping of the economy by demand rather than by direction, will equip our industry as leaders in low-carbon manufacturing. They will be leaders because they will be swimming in their natural element, whereas their international competitors will still be struggling to react to the short-term Government green initiatives and schemes that we all currently suffer from. It is a lead that could generate exports and growth in this country.

What is stopping us from delivering on the Prime Minister’s vision of a low-carbon, dynamic economy? Some worry about a protectionism challenge at the World Trade Organisation, but with a BCA applied in an open and transparent manner, nothing could be further from the truth. This policy is about removing unfair competition, not creating it. In any event, WTO rules expressly allow for tariffs whose purpose is to protect

“human, animal or plant life and health”

or

“to conserve exhaustible natural resources”.

Those are two exceptions tailor-made for this kind of tariff.

More practically, if the UK were to join the United States of America, our friends in the European Union and other countries to establish the principle of BCAs at COP26, that would be a game changer, because that would ensure their practical acceptance. Others worry that putting forward such an ambitious proposal at COP26 runs the risk of failing to achieve the consensus that would allow the PR men to claim a stunning success. It might, but the risk of failure is the price of ambition, so should we give up on our ambition? Of course not.

[Sir Bernard Jenkin (Harwich and North Essex) (Con)]

I have no doubt that my hon. Friend is right about the application of WTO rules, but what happens if a free trade agreement is already in place? Would that free trade agreement have to be renegotiated? Suppose we have a free trade agreement with the EU and we want to put a carbon tariff on German steel, which is very carbon intensive. Are we going to be tied in knots by what we might have already agreed? How does he think that would be resolved?

[Jerome Mayhew]

The example that my hon. Friend gives—that of Germany—would fall neatly into the European Union, which is consulting on this very issue, so in that case, it would be a coalition of the willing to allow us to go forward, I hope, with a form of equality between the European emissions trading scheme, or its successor, and the approach that we would take ourselves. However, I accept that that would be up to country-by-country negotiations.

Is there international support for this approach? Do we have a realistic prospect of bringing the world community together and with us at COP26? I say that there is, because President-elect Biden has already spoken about “carbon adjustment fees” against

“countries that are failing to meet their climate and environmental obligations.”

That is a clear indicator that the incoming Administration in America is taking this seriously. I know that there is many a slip between a statement of intent and action, but it is something that we can potentially get behind at COP26. The European Union, as has been mentioned, just this July launched a formal consultation on the implementation of a border carbon adjustment, and it is worth noting that for the President of the Commission—I think it was part of her manifesto when she was first appointed— this is one of the key objectives for her presidency.

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[The Minister for Business, Energy and Clean Growth (Kwasi Kwarteng)]

My hon. Friend the Member for Broadland (Jerome Mayhew) gave a compelling and fascinating speech. He elucidated many of the technical difficulties associated with imposing unilaterally, as he was arguing, a carbon border tax. My hon. Friend the Member for South Cambridgeshire (Anthony Browne) hit the nail on the head when he asked, “Should we do this unilaterally?” I am going to start by saying that, in my view and in the Government’s view, this is an important subject but it has to be treated as part of a multilateral effort. We are responsible for 1% of carbon emissions globally, and if we impose a tax unilaterally on carbon-emitting products coming into this country, we may well be disadvantaging our own consumers if others around the world are not placing such a tax. The Government feel that multilateral co-operation in this regard is by far the best way to prevent carbon leakage.

Another thing I would say to my hon. Friend is that by focusing on carbon emissions, he is really discussing the thorny issue of carbon accounting. Ultimately, the intellectual difficulty of accounting for carbon is the broader problem of whether the carbon is produced abroad or at home. In that respect, I would like to refer him to what my right hon. Friend the Chancellor of the Exchequer said in his announcement in this Chamber a little more than a month ago. I am proud that he announced that the UK would become the first G20 country to make Taskforce on Climate-related Financial Disclosures-aligned climate-related financial disclosures fully mandatory across the economy.

I am not saying that my hon. Friend said this, but I do not think it is right to say that we are somehow laggards on the issue of carbon accounting. In fact, I would say that we are taking a leadership role on this subject. He alluded to the fact that the EU is looking at how it can implement a carbon import regime with a tax on carbon-emitting products coming into the EU, and we are absolutely engaged with the EU in discussing that. We feel that that is part of the multilateral approach.

If my hon. Friend takes a broad view of this subject internationally, he will see that 2020 has seen far greater progress than any previous year. Only a couple of months ago the Chinese Government pledged to achieve a net zero carbon target in 2060, and that is incredibly significant. I remember when I was first appointed to this job, someone said to me that what we did in the United Kingdom would make no difference if China continued along its present path. I am pleased to say that China has changed its path and said very clearly that it has set a net zero target for 2060. The Japanese followed suit soon afterwards, adopting our target of 2050, as did the South Koreans. So the auspices for international co-operation on the measure that my hon. Friend has described are actually very good, and there is a chance that if we cannot reach an agreement at COP26 next November, we may well be advancing along the lines that he suggests in the not-too-distant future. I have to stress that multilateral co-operation on how we price carbon and how we account for carbon in the round is far more constructive than placing a unilateral tax in the way that he has described.

One thing I would say about the figures that my hon. Friend very ably quoted in regard to the benefit to the Treasury is that there would obviously be behavioural impacts, so it would be difficult for me to model the consumer demand for products that had been taxed in the way that he has described. I would be interested to have a conversation with him about the assumptions behind the analysis that he very ably referred to in his excellent speech.

[Sir Bernard Jenkin]

My right hon. Friend has said something that I regard as significant. Yes, we are going to try to achieve a multilateral approach at COP26, but if we do not succeed, we will consider a more unilateral approach. I am bound to say at this particular juncture, when the term “level playing field” is so commonly spoken about in respect of a certain negotiation, that it would surely be a distortion of international competition for some countries to be doing their best to deal with climate change and for other countries to be exploiting those efforts. If that is not a distortion of genuine free trade, I do not know what is. I think that the unilateral approach is justified.

[Kwasi Kwarteng]

This is an interesting debate. My hon. Friend suggests that a unilateral approach, punishing other countries for not adopting the climate change agenda—that is effectively what we would be doing—might work. As I have had to say repeatedly, I think that a multilateral approach is the best way forward. There is an open debate about the effectiveness of a unilateral approach when every other country in the world would not be disadvantaging these products.

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[Kwasi Kwarteng]

Sorry—I was just respectfully pointing out to my hon. Friend the Member for South Cambridgeshire that he cannot intervene on an intervention.

I am very happy to take up that point. Of course, I discuss with my right hon. Friend the Chancellor all the time how we can capture carbon accounting more effectively in order to pursue the goal that we all seek, which is a net zero world and certainly a net zero British economy.

[Sir Bernard Jenkin]

Will my right hon. Friend give way?

[Kwasi Kwarteng]

No, I have to make some progress.

Ahead of COP26, obviously, as the hon. Member for Brent North (Barry Gardiner) mentioned, we have to look at carbon accounting in the round, and we have to look at how we reduce incentives for carbon-emitting activity here in the UK and in the context of the imported carbon that we bring in from other countries. All these issues have to be addressed in the round.

What I wanted to say, and have said very clearly, is that we are actual leaders in this subject. We are actually driving ahead mandatory TCFD financial disclosures. There are no other countries in the G20 that have done that. We passed the net zero amendment to the Climate Change Act 2008 last year. Again, even though other countries have made public statements supporting that policy, they have yet to enshrine it in their in their legal codes. We are showing leadership. We intend fully to continue showing leadership and providing that sort of steer at COP26 in Glasgow.

[Kwasi Kwarteng]

It is not in my power to make that commitment to the House. As my hon. Friend knows, I am not the COP26 president, and I suggest that he directs that question to my right hon. Friend the Business, Energy and Industrial Strategy Secretary, who is the president of COP26. However, I can assure my hon. Friend that the issue is absolutely at the centre of the wider debate about climate change and of what I might call international energy diplomacy, and I am sure it will discussed very seriously at COP26 next year.

[Sir Bernard Jenkin]

I just want to put something on the record. The hon. Member for Brent North (Barry Gardiner) quoted a £10 billion subsidy figure for fossil fuels. Will the Minister confirm that the Government do not accept that figure? It is based on things such as the fact that we charge only 5% VAT on domestic fuel instead of 20%. It is typical of the EU to regard a low tax to help poorer households afford their fuel bills as a subsidy. One of the reasons we are leaving the EU is that it puts out rubbish propaganda such as that. We do not subsidise fossil fuels, and I hope the Minister will make that clear.

[Kwasi Kwarteng]

My hon. Friend is right. It is pretty extraordinary to say that we are somehow the laggards on this subject. When a country such as Germany is phasing out its coal dependency only in 2038, it is a bit extraordinary for Opposition Members to make that claim. We are very much the leaders in this arena, and my hon. Friend was quite right to point that out.

Carillion

Bernard Jenkin Excerpts

Thursday 12th July 2018 Commons Chamber

[Sir Bernard Jenkin (Harwich and North Essex) (Con)]

It is a pleasure to follow the hon. Member for Leeds West (Rachel Reeves). I commend her and the right hon. Member for Birkenhead (Frank Field) for their joint inquiry, which has shed a great deal of light on the situation. It was obvious when Carillion collapsed earlier this year that there was more than just one issue with the company. In general, companies do not go under for simple reasons, and there is no doubt that Carillion was mismanaged. The firm was paying ever increasing dividends, eventually reaching an annual figure of £80 million, while experiencing declining financial performance and an ever more rickety balance sheet. It took some time for that situation to arise.

The reason for Carillion’s importance to the Government and the intense public interest is that its failure was not just due to the spectacular nature of its bankruptcy; before its collapse, Carillion built hospitals, maintained schools, constructed bridges and roads and electrified railways. When it failed, it had approximately 420 public contracts with the Government accounting for 33% of its total global revenue. It was a shattering blow to public confidence in the Government’s ability to deliver public services via private contractors and providers. That was reflected in my right hon. Friend the Chancellor of the Duchy of Lancaster’s recent speech at Reform.

The Committee I chair, the Public Administration and Constitutional Affairs Committee, scrutinises the work of the Cabinet Office and the whole civil service in a way that we hope will improve public confidence in government and public services. We have taken a long interest in public procurement and public contracting, and we saw this crisis as an opportunity to consider the main strategic issues around outsourcing. In fact, we had already—prophetically perhaps—embarked on this inquiry before Carillion collapsed. Its terms of reference included whether the Government made effective decisions on outsourcing the delivery of public services, what lessons could be learned from the collapse and, given that the Government depend on so few public service providers, whether the rules on oversight and accountability of contracts needed to be changed.

PACAC’s findings were published this week, and they are stark. We uncover that sometimes the Government have little or no data on the services they wish to outsource or on the facilities they ask companies to manage. In some instances, what Government data there was was actually incorrect. My understanding—we could not put this in the report because we could not get it in evidence—of the Carillion prisons contract is that the Government originally thought they were transferring about 800 assets, but it turned out that the company was taking over the management of some 8,000 assets. How can such vast errors be made? I am afraid that it underlines how badly public services are run by Departments, but the lesson is not simply to pass that ignorance on as a risk to a private contractor and expect it to cope. We know that the Government are aware of that and have demanded that contractors accept in the contract the risks of their giving them incorrect information. There is no excuse for this carrying on.

We uncover a culture focused relentlessly on cost—by which I mean price—whereby companies are pushed beyond the limits of commercial viability and where procedures on transparency are not regularly followed. Most staggeringly of all, the Government cannot accurately assess the capacity of companies to which they are outsourcing to deliver a quality service. During the inquiry, PACAC found several instances where the Government had contracted with the private sector without knowing key data about the services they were asking companies to bid for. For example, in 2014, the NAO reported that the outsourcing company Compass believed that the information provided to it by the relevant Department was inadequate. It was managing facilities for asylum seekers.

Only two months ago, the NAO found that NHS England

“did not know enough about the services it inherited to set achievable…specifications and performance standards”

for a primary care support contract. Asylum seekers, primary care patients—these are the people who, for one reason or another, find themselves utterly reliant on the state to provide their accommodation food and for their basic human needs, and when outsourcing goes wrong, these people are on the frontline and they are the ones who suffer. The Cabinet Office did a brilliant job of rescuing the situation after the collapse and of keeping public services going, but it should never have come to that—the Government should not have to bail out private contracts with hundreds of millions of pounds of public money.

[Ronnie Cowan (Inverclyde) (SNP)]

Will the hon. Gentleman give way?

[Sir Bernard Jenkin]

I give way to my Committee colleague.

[Ronnie Cowan]

Given what the hon. Gentleman has just said, was he surprised as I was that, despite three profit warnings, despite hedge funds betting against its success and despite spiralling pension debt, the Government still handed out contracts to Carillion, including one to the tune of £1.4 billion for HS2?

[Sir Bernard Jenkin]

By that stage, the Government were in a Catch-22 situation. If they denied Carillion access to any public contracts, it would have been a further signal to the market that this company was going down and it would have put at risk all the other public sector contracts it held. Also, in that case, the risk was shared by two partner companies, which signed in blood that they would take over any risk of each or any of the companies going bust. The Government have not suffered any loss as a result of that contract.

[Ronnie Cowan]

What the hon. Gentleman is saying is typical of the attitude that Carillion was too big to fail—and not just with HS2; there was £158 million for Hestia with the Ministry of Defence and £62 million for electrification of the rail line from London to Corby. While the Government continued to give Carillion all those contracts, its suppliers must have been thinking, “Well, my money is safe here, too. If the Government believe in these big companies, I’m okay.” There is a knock-on effect, a domino effect, right the way through the process, and ultimately smaller companies suffered and failed.

[Sir Bernard Jenkin]

I totally agree with the concept that these contracts become too big to fail, and therefore, as I will explain, it becomes an illusion that the Government have transferred risk to these companies. These companies are a private sector extension of the public sector, and the public sector still carries the risk.

[Stephen Kerr (Stirling) (Con)]

My hon. Friend spoke earlier of contracts basically being awarded on price, rather than on any kind of value. Does he agree with the CBI’s response to the Carillion report that suppliers to the public sector need to “bid responsibly” for contracts and need to be “prepared to challenge” bad deals and to “walk away” from opportunities that will not yield long-term value? The reality is we have a group of companies in this country that seem to be addicted to bidding on price, and this becomes a self-fulfilling prophecy, à la Carillion.

[Sir Bernard Jenkin]

I agree, but unfortunately I think that the Government have fed that addiction. The pressures of austerity and the hunt for savings have encouraged the Government to try to get prices down and to be blind to the risks they are transferring to the private sector, resulting in the sickness of the sector. As I will explain, there is a misappreciation of the risks that private shareholders are prepared to bear, compared with the risks that we should be taking with public services and public money.

As I have said, the Government sometimes write into contracts that companies must accept the risk that the Government have got their own data wrong. An analysis disclosed by Serco found that this practice had taken place in 12 of the company’s recent procurements. That is in part driven by the decision to use contractual models such as payment by results that involve risk transfer on a huge scale. If the Government cannot assess the services they are trying to outsource, they simply cannot make an accurate calculation of a fair cost for the outsourcers, yet they tend to pretend to do so. In those circumstances, passing the risk on to contractors is unacceptable and, as we have seen, proves counterproductive, particularly if the Government are unable or unwilling to make a serious assessment of what is at risk when a company delivers public services.

PACAC found that the relentless drive to bring down costs has been among the most damaging factors. We received evidence from organisations and businesses in the sector that the Government have been “driven by price exclusively”, leading to a reduction in fees paid by up to 25% to 30%. Some people put it more bluntly. Rupert Soames, the chief executive officer of Serco, told us that

“in the four and half years that I have been running Serco I know one occasion”

when Serco had won a contract despite not being the lowest bidder. A survey conducted by the CBI revealed that 98% of businesses responding said that something other than “service quality” was the main reason why Government contracts are awarded. There are obvious problems with an undue reliance on price in the contracting process; industry leaders were concerned that “fudges” would

“allow technically poor but cheap bidders to continue... simply because the customer is desperate for the saving.”

Such bidders would then seek to renegotiate the price afterwards.

There are examples of all this going badly wrong. The Government, who are frequently the dominant purchaser in these markets, have great power to dictate prices to contractors. Professor Gary Sturgess, of the Australia and New Zealand School of Government—and why did we abolish our National School of Government and so have no equivalent institution?—told PACAC that companies were

“stupid to have gone ahead and entered into contracts... but this is a Government supply chain. ”

Representatives from the National Council for Voluntary Organisations said that, on average,

“large charities lose 11% on each contract they have with the government.”

There is something rather unpleasant about Government milking charities to subsidise public services, but that is, in effect, what is happening.

Instead of recognising that the focus on cost damages the ability of companies to meet the terms of their contracts and discourages innovation, the Government have taken a different approach. In some instances, they forgo performance penalties available to them, in essence declining to enforce the parts of the outsourcing contract that are designed to maintain the high standards of the service being provided, at the agreed price. In others, the Government have renegotiated the terms of some contracts. We received evidence from the Cabinet Office that just since 2016 the Government have renegotiated at least £120 million-worth of contracts in that way, including the Ministry of Justice’s flagship “Transforming Rehabilitation” scheme. The cost to the Government of the work necessary for the renegotiation itself is yet unknown.

PACAC found that the Government do not have a strong evidence base about when and whether to use the private sector, or whether such use will be more successful than using the public sector. This is what we call the decision to make or buy. The Treasury Green Book sets out a process that should be gone through when deciding whether to make or buy a service—whether to do it in house or put it out to contract—but we found no evidence that that was well understood or indeed followed. There is also a lack of a central database for outsourcing contracts, meaning that systematic analysis of outsourcing throughout the whole of Government is difficult at best, if not impossible. Nowhere is there an understanding of how much public service risk is being carried by each company, across all of its contracts and across all Departments. Without that kind of understanding, the Government are unable to prove the basic premise behind all forms of Government outsourcing: that the private sector is capable of providing a better service for better value. The basis for the claims made by the Minister who wrote the article in The Times earlier this week is data that is now some 20 years out of date. All this data should be published, as public confidence will not be strengthened without far more openness and transparency about how public contracts are let and managed. Nowhere is that more apparent than with private finance initiatives.

The ostensible purpose of PFIs was to take advantage of the expertise of the private sector in providing privately-financed infrastructure projects and buildings. However, despite having more than 20 years to research and form an evidence base, the Government were unable to justify their claims about the efficacy of PFI. In fact, in their testimony to PACAC, the Government claimed that PFI brought “discipline and rigour” to projects. But, while giving evidence, the chief executive of the civil service revealed that the real purpose is to make the public balance sheet look better. That motive can also be seen in the refinancing provisions for PFI, which allow the balance sheet to look better at the expense of the public finances.

It gets even worse than that. With private finance 2, it was decided that the proceeds of refinancing PFIs should be split between the contractors and the Government. After a school has been built and it is in the process of being managed, a lot of the risk has been carried, so the scheme can be refinanced at a lower rate of interest. It was decided that the benefits of that lower interest rate should be split 50:50 between the Government and the private sector. That was not the case with the original PFI scheme. It subsequently became apparent that, under the rather arcane public accounting rules, if such a change is made, the whole of the debt becomes public sector debt and is shown in the public sector borrowing requirement, so the Government said, “Oh, well, we’ll split it 70:30”. Therefore the Government now collect only 30% of the proceeds from refinancing a PFI contract. That is daft. It is the Government giving away public money just to satisfy silly public accounting rules. It should stop.

There are also issues concerning churn among civil service staff that make the management of public contracts difficult. Reports have highlighted the “insufficient continuity of staff” over the lifetime of a contract. On this front, the situation has been improving, but there is a great deal to do.

PACAC remains concerned that the Government are still taking a much too transactional approach to contracting and the management of contracts. It is vital not only that staff with commercial skills work alongside those within Government with other skills such as costing, IT and project management, but that those in the Government who manage the contract feel that those in the private sector are partners and collaborators. There should be trust and co-operation; it should not be an adversarial competition. When the Government make the decision to outsource a service, and when they accept bids from companies seeking to win the contracts for those services, it is crucial that the process of doing so is evidence-based and transparent.

It was to ensure that there was public trust in outsourcing, and in the Government’s capacity to do so, that Carillion was awarded contracts after it published a profit warning and after it had made other worrying sounds to the Government. That a company in the process of going bust should be awarded yet more contracts, giving it access to yet more taxpayer money, does raises the questions brought up by the hon. Member for Inverclyde (Ronnie Cowan) earlier. PACAC calls for the Government to re-examine how they assess contractors’ viability. Shareholders are prepared to take a far higher risk than the risk the Government should be prepared to take with public services and public money. The Government should publish their rationale for their decisions. Public service procurement cannot be done in the dark, cannot be done without evidence and cannot be done without the Government knowing what they are trying to outsource. It cannot be done on the cheap, and the public must be able to see that.

In conclusion, unless the right steps are taken and the right lessons are learned, a company very similar to Carillion, holding contracts of enormous public worth, could collapse again and all this will happen again. The public want companies that deliver public services better to reflect public-service values. Such companies are part of the public service, and if they do not demonstrate those values, they should not get the money.

[Several hon. Members rose—]

Office for Students: Appointment

Bernard Jenkin Excerpts

Monday 8th January 2018 Commons Chamber

[Joseph Johnson]

Mr Young has apologised, as the hon. Lady said. He has said that he regrets the comments, which suggests that he has moved on. He has also committed to not repeating those comments and accepted the reality that if he does, he will no longer be publicly appointed to the Office for Students board.

[Mr Bernard Jenkin (Harwich and North Essex) (Con)]

The Public Administration and Constitutional Affairs Committee oversees the public appointments process and we hold the public appointments commissioner accountable for the conduct of the code. This is a timely reminder that public appointments are to be held accountable. Is my hon. Friend satisfied that the panel had the due diligence they should have had when they made their appointment? What representations has he received from any member of the panel about the appointment since it was made?

[Joseph Johnson]

I thank my hon. Friend for his questions. The panel was correctly composed. As I said earlier, it consisted of a senior civil servant from the Department for Education, Sir Michael Barber himself and an independent panel member. They conducted the interview with Mr Young in the same manner as they conducted interviews with other candidates and found him appointable. In respect of due diligence, one has to look at what is reasonable and proportionate for a panel to do. Neither I nor the Department were aware of the offensive tweets before the appointment was made, but there is nothing unusual about that. Many of the remarks were made years—in some cases, decades—ago and it is not reasonable or proportionate for the Government to trawl through tens of thousands of tweets over many years when making public appointments.

Nuclear Safeguards Bill

Bernard Jenkin Excerpts

2nd reading: House of Commons
Monday 16th October 2017 Commons Chamber

[Greg Clark]

My right hon. Friend is absolutely right. As I say, I do not think anyone regards the arrangements that have prevailed as deficient, so it makes sense to replicate them as we can. We are being orderly in making sure that we have the right domestic framework in place in good time.

[Mr Bernard Jenkin (Harwich and North Essex) (Con)]

My right hon. and learned Friend the Member for Rushcliffe (Mr Clarke) referred to the fact that we have to make all these international agreements which have previously been reflected in agreements between the EU and international bodies and other countries. Is any other country outside the EU objecting to the likelihood that we will be seeking to make these arrangements, or to be a full member of the IAEA in our own right, with a voluntary agreement that it proposes?

[Greg Clark]

My hon. Friend will doubtless be aware that across the international community there is great recognition that there is little contention in this area. It is obviously in the global interest to have robust arrangements in place, and the discussions are taking place smoothly and without any contention.

--- Later in debate ---

[Drew Hendry]

I thank the hon. Gentleman for his contribution, but he highlights the fact that we have not seen that legal opinion or any indication that it is watertight. We should have the opportunity to see it; perhaps it will be forthcoming as a result of this debate.

[Mr Jenkin]

Will the hon. Gentleman give way?

[Drew Hendry]

No, I am going to make some progress.

As I was saying, in Scotland, although we are working towards a nuclear-free future, we have to maintain safety at existing facilities. The current challenges exist in the other nations of the UK; indeed, they are multiplied by this Government’s obsession with pursuing costly and dangerous new nuclear. That obsession has put nuclear at the heart of energy strategy, while the Government’s other obsession with hard Brexit would see them leave the very agency that oversees the security of markets, businesses and workers in the sector. To most people looking on, that is baffling and dangerous. To us, it is yet another day in the growing chaos of this Tory Government.

Leaving Euratom serves no purpose other than to put at risk standards that have been in place for many years. Hon. Members do not even need to take my word for it. The Nuclear Industry Association has said:

“The nuclear industry has been clear that our preferred option is to seek to remain part of EURATOM, and that the UK government should negotiate this with the European Commission. The industry in both the UK and Europe want to maintain the same standards as apply now, and have worked well for more than 40 years. Without access to Euratom’s NCAs and common market, the nuclear new build programme, nuclear operations and the decommissioning mission could be seriously affected.”

Everything that can be done must be done to mitigate the risk of any incident, the effects of which would be measured in millennia. Failures in nuclear safety and decommissioning carry a potential catastrophic impact so great that our closest eye and the very best and most up-to-date research are required to avoid such outcomes.

--- Later in debate ---

[Drew Hendry]

I agree that there are clearly unanswered questions about the legal position, which has not been challenged, exercised fully or even debated to any degree. Not only are our safety standards, research opportunities and business at risk, but we may see the most dramatic and negative effects of any withdrawal in the medical field.

[Mr Jenkin]

Will the hon. Gentleman give way?

Euratom Membership

Bernard Jenkin Excerpts

Wednesday 12th July 2017 Westminster Hall

[Albert Owen]

I absolutely agree. I have had a lot of correspondence from experts across the field, including the Royal Marsden Hospital, where cancer research is vital. As the hon. Lady says, it is absolutely essential that we get that right. This is not about the dogma that we must leave an institution; it is about ensuring that medical research continues, that we maintain high standards, and that we have the framework to move isotopes and do the things that she mentions.

[Mr Bernard Jenkin (Harwich and North Essex) (Con)]

I commend the hon. Gentleman not just on obtaining the debate but on his constructive tone, but why should the case for staying in Euratom not apply to every other agency that we will leave when we leave the European Union? As we leave those other agencies and regulatory bodies, we will set up our own, under international standards. Why can that not also be done with Euratom? Who would want to frustrate that?

[Albert Owen]

No one wants to frustrate anything—quite the contrary. I am trying to set the tone by saying that we need a long-term plan. I am worried that there will be a cliff edge, and that we will have to leave an organisation that has served us and the whole global community well for many years just because we leave the European Union. I repeat that experts have said that we can legally decouple Euratom and the EU. I think that doing so would improve our chances of getting a better agreement. I disagree with the hon. Gentleman that we would have to deal with every other agency. In a sense, Euratom is pretty unique, and the industry and experts—not politicians, but people who understand the industry—are worried about it.

Exiting the EU: Higher Education

Bernard Jenkin Excerpts

Wednesday 23rd November 2016 Westminster Hall

[Mr Bernard Jenkin (Harwich and North Essex) (Con)]

I congratulate the hon. Member for Ealing Central and Acton (Dr Huq) on securing this debate. The issues that she raises, and the questions that universities are raising, are of course legitimate matters of concern, but the language that she used—“we are all jumping off a cliff without a parachute”—is the kind of negative language we should try to avoid. In my dealings with vice-chancellors —I represent Essex University in this Parliament, I am a graduate of Cambridge University and I deal with other universities; I am shortly to be appointed a visiting fellow of another university—I do not find universities are using this alarmist language. They want to make a success of the opportunities they have in the world.

It is important to understand the tremendous strength that our universities now have as a result of the progression towards fees and loans. They have been liberated from the constraints that Governments used to put upon them, have grown dramatically and are financially stronger than they have ever been in my lifetime. It is an extraordinarily good position to be in when approaching the present situation.

A lot of the uncertainty arises from confusion, which I have to say extends to Government Departments. I chair the Public Administration and Constitutional Affairs Committee; I see a lot of the civil service struggling to catch up with the absence of preparation for the outcome of the referendum, which is one of the lessons that we must take from it. It is unforgiveable for a Government to call a referendum and remain completely unprepared for one of the possible eventualities. There are many officials rapidly trying to get their brains around some difficult and complicated questions, in a scenario that they perhaps are not emotionally attracted to anyway. It is taking some time and the Government are entitled to take that time. I do not remember the Opposition parties telling the Government that they should prepare for Brexit when the referendum was called; I think they should be given the time that they need.

A lot of the uncertainty arises from confusion about what category the problems and concerns should be put in. Some concerns arise simply because of the uncertainty, and the Minister has already addressed some of those concerns. He could address some more and give more definition and assurance about funding streams, the status of students and academic staff joining universities at the moment, and so on.

Most of the debate is about what the Government’s policy will be after we leave the European Union—post-Brexit questions on issues of post-Brexit policy, such as what our immigration policy or our policy towards foreign students will be. There are relatively few issues that have to be included in the article 50 negotiations. In my discussions with universities, I advise them to try to categorise the issues and not to overload the article 50 negotiation process by trying to get everything resolved in that agreement. The less we put into that agreement, the more likely we are to get what we require.

There are three basic overall concerns. The first is about the access that foreign students—particularly EU students—have to the UK. It is interesting to note that only 5% of students in the UK are EU students. Some 10% are non-EU foreign students, who pay full fees, whereas EU students do not. It is actually going to be an advantage to the universities sector if we can charge EU students full fees. At the moment, the British taxpayer helps to fund those students. What is more, we are obliged to offer them loans, and the default rate among EU students is higher than that among UK students. There is talk in the Treasury about universities having to pay the cost of that default. We can resolve that issue by leaving the European Union.

The second concern is about access to EU funds. Table 9.9 of the Pink Book has become famous in the debate about leaving the European Union, but nobody disputes that we are one of the largest net contributors to the European Union. No Government in their right mind would use the pretext of leaving the European Union to cut the funds that universities receive, just because they get some of their money from the European Union. Let us remember that the money universities get from the European Union for research grants comes from us taxpayers. We put money into the European Union and we get only half of it back. We should be able to afford to pay more into our universities to fund more research and support our universities more effectively as a result of leaving the European Union, because we will no longer be forced to pay to subsidise universities elsewhere in the European Union. I acknowledge the concern that universities need certainty now and year on year into the future, but my hon. Friend the Minister should be able to give them a long-term assurance that we will fund research programmes in our universities as generously, if not more generously, in the future.

Finally, the idea that we are no longer going to collaborate with other universities in the EU is about as potty an idea as could be imagined. First, there are non-EU countries that participate in EU schemes. CERN, for example, is an international project. Let us have confidence in our universities. We have the crown jewels of scientific research in the EU in our universities. If I am correct, we have four universities in the world rankings top 10. We have 10 of the top 50 universities in the world—more than any other country outside the US. Two are in London—the same number as are in the entirety of the rest of the EU. It would be perverse if the EU wanted to cut itself off from UK universities, so we should approach the negotiations and future collaboration with universities with confidence. We have what it takes to promote successful collaboration with countries across the whole of Europe, whether they are in the EU or not. Outside the EU, our universities have as great a future, if not a greater future, than they would if we remained in the EU.

[Geraint Davies (in the Chair)]

Talking of cuts, the Front Benchers have nine minutes each.