EU Referendum: Energy and Environment

Callum McCaig Excerpts

Tuesday 12th July 2016 Commons Chamber

[Callum McCaig (Aberdeen South) (SNP)]

This is a good debate to be having and I thank the shadow Secretary of State, the hon. Member for Brent North (Barry Gardiner), and the Labour Front Bench team for giving us the opportunity. It is a shame, however, that the hon. Gentleman did not get beyond his introductory remarks in what was an excellent overview of the issues.

SNP history is being made today in that it is the first time that the full force of “Team Callum” has been deployed at the same time. We will hear later from my hon. Friend the Member for Berwickshire, Roxburgh and Selkirk (Calum Kerr)—or, as I like to call him, the junior member of the team.

Today’s debate feels a little bit like the last day of school. There is a little bit more work to do, but not a huge amount of Government work is going on as we discuss things, pick over the bones of Brexit and ask questions about how we go forward. I am sure that the Secretary of State is pleased—as we all are—that we have a new Prime Minister because that will help to ease some of the uncertainties that were building up and it is welcome that we will not have several weeks of uncertainty. I hope that the Government use the summer recess to come up with some plans, because plans are badly needed.

Last week, we discussed the excellent Energy and Climate Change Committee report on investor confidence and were able to discuss some of the issues affecting the sector that have been exacerbated by the Brexit vote. It is fair to say and it bears repeating time and again that Scotland did not vote for Brexit, and we will be doing everything in our power to ensure that we do not leave. We should change the lexicon slightly and refer either to “Exit” or perhaps “Wexit”. Scotland is not for leaving, and our Parliament and Government have united around keeping Scotland in the European Union. However, the uncertainty afflicting the United Kingdom following the vote will have some effects while we wait for clarity about our maintained position in the European Union

On energy bills, The Guardian reports today on uSwitch research suggesting that, since 23 June, 12 providers have pulled their cheapest fixed-rate tariffs and replaced them with more expensive deals. That is the impact of Brexit, which will be felt by consumers and those who can ill afford to pay more. The weak pound will have another cost impact as the UK is a net importer of electricity. Such things will drive up bills and are an unfortunate consequence of the Brexit vote. The future of interconnection is also uncertain. Interconnection is important and represents a valuable and sensible Government aim. I have often said that we should not see it as a way of importing cheap electricity from the continent, as the Secretary of State said in her “reset” speech; we should be using it to export electricity to the continent. We should be investing in domestic, low-carbon electricity generation, for which Scotland has immense and highly enviable potential.

The prospect of cheap electricity from the continent is also slightly questionable. Exchange rates will obviously change over time, but the assumptions about future interconnection decisions built into the sums might not look so good when the pound is not faring so well against the euro. Such things will come out in the wash, as we say in Scotland, but we need to look at energy policy and interconnection to see whether it is the right thing to do.

Hinkley is another big question about which we have had some discussion and it will come as no surprise to anyone on the Government Benches that the SNP is not in favour of it. We have discussed it ad nauseam, but it bears repeating that the economics of Hinkley were, in the views of my party, myself and a large number of people in the Chamber, highly dubious. The fundamental economics have only been undermined by the Brexit vote, and we need to reconsider them. We cannot afford to have all our eggs in this particular basket, because if it does not happen—I suspect it will not—there will be a rather large hole to be filled. We cannot, like we did with the Brexit vote, enter the unknown with no back-up plan.

[Caroline Lucas]

To give some shape to the hole that the hon. Gentleman mentions, does he agree that it is shocking that the expected fall in wholesale electricity prices has driven up the Government’s estimate of the whole lifetime cost of Hinkley to £37 billion from the £14 billion of only a year ago?

[Callum McCaig]

I thank the hon. Lady for that intervention. The costs are eye-watering. Given the extent to which Hinkley is an international project, the costs could rise even further still. It is time to have a sincere look at the plans and to decide whether the project is possible, but I strongly assume that it is not, so we require a back-up plan. If we do not address the huge strains on our energy system, the bread and butter of keeping the lights on will be put in jeopardy—perhaps not today but in the decades to come. It is incumbent upon the Government and the Department of Energy and Climate Change to act now.

We also need clarity from the Government on the position of the internal energy market in the European Union. The Vivid Economics report that was cited last week and again today about the potential of being outwith the system adding £500 million per annum to the costs of our energy system is sobering. When DECC and the Government as a whole are engaged in their summer homework of working out how to get out of this particular pickle, I suggest that ensuring that we keep the co-operation of the IEM should be high up the agenda because it delivers for us here and for folks abroad. It will help us to meet the trilemma of energy costs and should not be sold down the river lightly.

To maintain security of supply, the time has come to scrap Hinkley and to invest in viable and cheaper forms of domestic energy, including onshore wind, on which we need to lift the embargo. We need the contract for difference auctions that the Secretary of State has mentioned. They should be as wide as possible, technology neutral—as they are supposed to be—and no one should be excluded from bidding. We need to get serious about building the suggested new gas plants, and I will make the case for Scotland again: if we can get the anomaly of transmission charging sorted, we are ready to go with gas plants in Scotland that will contribute significantly to reducing the forthcoming hole in energy production.

Above all, we need to invest in energy efficiency. The Scottish Government are doing strong work and that needs to be replicated right across these islands. If we are to deal with an ever more challenging set of energy circumstances, including where we get it from, the best way is to use less of it. The benefits for everyone are substantial in the long term.

On climate change, I agree with the hon. Member for Warrington South (David Mowat), who is no longer present, that it is regrettable that the UK will not be a member of the European Union. I pay tribute to the Secretary of State for her role in the Paris talks, where the UK played a strong hand—perhaps not as strong as I and others would have liked, but it was played well and resulted in a pretty good deal. The fact we are no longer going to be at the heart of the decision-making process is regrettable, because the UK can be proud of what it has done on tackling climate change and has more it could offer the EU. We need to work out how that will happen in a renewed relationship with the EU, but there will be an absence and that is regrettable.

I have some specific questions to ask about what the process will be and what the impact of Brexit is on our commitments from the Paris talks, which have been touched upon. Our nationally defined contribution was the European Union’s NDC, and I am not clear whether that still applies to us. I assume it does, as we are still a member, but we can and should do more. I am also unclear about some issues on the ratification of the deal. Do we have to ratify this before the Brexit deal is concluded? Is there an impact on the EU as a whole? I understand that the EU ratification process requires all member states to ratify before the EU can ratify it as a whole. Ultimately, the UN requires ratification by the 55 countries that account for 55% of the emissions. So are there implications for us? Are there implications for ratification by the EU? Are there implications for the whole deal if we are not able to do that?

[Amber Rudd]

I may not answer all the hon. Gentleman’s questions in this intervention, but let me say, as I did not pick this up from the questions put by the hon. Member for Brent North (Barry Gardiner) either, that we are pushing for early ratification of the Paris treaty on behalf of the United Kingdom.

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[Callum McCaig]

I thank the Secretary of State for that intervention and very much welcome it; that is progress and I hope it can be done. I do not think there will be any opposition on that—none will come from Scottish National party Members.

I do not want to go through the negativities, but on the eve of the Paris summit we had the sweet and the sour. We had the sour on CCS, to which my hon. Friend the Member for Coatbridge, Chryston and Bellshill (Philip Boswell) referred. The sweet was the commitment from the Secretary of State and the Government on coal. That was welcome and it was a significant step forward, but are there questions about its deliverability now? I think that there are, as the commitment had a subtle caveat, which was that it would be done only if and when it was possible. The combination of the effects on investor confidence and the lack of clarity on a number of these things will make it more difficult to meet the conditions required to have that coal taken off the system. There is a requirement to look at that again. Above all, although we all welcome the fact that we are getting the fifth carbon budget and that it agreed with the recommendations of the Committee on Climate Change, we do need the action plan. That is the fundamental thing; the bread and butter of this is how we do it. The ambition, determination and commitment is there, but it will come to be only if we have a viable plan. I do think this is achievable, but it has become more uncertain because of the Brexit vote.

In conclusion, yesterday’s events probably put us in a better place than many of us expected to be in. We do not have the added unwelcome uncertainty of a nine-week leadership contest, but a power of work needs to be done by Government over the summer. I hope the Secretary of State continues in her post to do that. I look forward to continuing to work with her and to marking her homework after the summer recess.

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[Calum Kerr (Berwickshire, Roxburgh and Selkirk) (SNP)]

It is a pleasure to take part in this debate. As well as having a fantastically named constituency—it is much easier to remember than Berwickshire, Roxburgh and Selkirk—the new hon. Member for Tooting (Dr Allin-Khan) did herself proud and stood tall for Tooting today. There were so many Labour MPs on the Benches around her that I wondered whether she was going to make a bid for her party’s leadership.

I also thank my hon. Friend the Member for Aberdeen South (Callum McCaig)—the other half, as he claims, of Team Callum. He failed to mention that he calls himself Callum 2.0. He is taller and has more hair, but anyone who can see his shoes knows that there are clearly some flaws in the design.

[Callum McCaig]

We need a 3.0.

[Calum Kerr]

We do, absolutely.

This has been an excellent debate—it is a shame that we did not have more such debates prior to the referendum. SNP Members did everything in our power to promote the case for the UK remaining in the European Union, and a key part of that was about keeping the protections that EU legislation has brought in the workplace, and on human rights and the environment. Unfortunately, those issues were too often brushed aside in the fierce political contest that we experienced during the referendum. Indeed, as we have heard, the environment scarcely featured in the debate about Britain’s membership of the EU.

The environmental protections that we have enjoyed in this country for decades, which cover areas such as air and water quality, emissions, waste, chemical regulation, and habitat protection, are all underpinned by EU legislation. Britain’s membership of the European Union has had an extremely positive effect on the quality of Britain’s beaches, our water and rivers, and on the air that we breathe. It has underpinned protection for many of our rarest birds, plants and animals, and their habitats. Like so many other questions on the detail of Brexit, the question of how we will continue to protect those precious assets needs a coherent answer.

Whenever we look at an issue in more detail, the value of European collaboration becomes clear. As the hon. Member for Uxbridge and South Ruislip (Boris Johnson) told the country just days after encouraging us to vote to leave:

“There will still be intense and intensifying European cooperation and partnership in a huge number of fields: the arts, the sciences, the universities, and on improving the environment.”

It is not clear how that picture of intensifying European co-operation squares with the Home Secretary’s statement yesterday that “Brexit means Brexit”.

On matters that stretch across a range of different fields that are vital to our prosperity and wellbeing, there has been little more than evasion and confusion from the Government thus far. That is why Ministers must do everything in their power to clarify how they will take forward the protection of the UK’s environment in this new political situation. There is so much about the EU that we do not want to abandon. For example, as part of my other brief, I have noticed in meetings on the digital single market a strong view that it makes sense to continue to adhere to EU directives and projects, even though we have voluntarily given up the capacity to shape them.

It is worth considering how the country’s approach to the environment has been shaped since it joined the EU. As many hon. Members have said, in the 1980s Britain was known as “the dirty man of Europe” because of widespread pollution of air, land and water. There is a risk that Britain will end up regaining that reputation. Although the UK has sometimes willingly followed the drive for environmental standards, and even at times led the way, it has taken years to get this country to meet some standards that are considered the norm in Europe.

When we consider environmental protection, it is worth remembering that in addition to the inherent worth of our landscape and ecosystems, there are key economic benefits to protecting biodiversity. Our natural environment in Scotland contributes an estimated £21.5 billion to the Scottish economy. Scotland also provides the major part of the UK’s contribution to the EU-established Natura 2000 network of protected sites, with more than 15% of our land designated for a wealth of habitats and species.

During the campaign, we heard nothing from the Brexiteers about what a vote to leave would mean for the habitats directive, for the circular economy, with its need for long-term planning and investment, or for issues around water quality, on which the UK still has a lot of catching up to do. What we did hear was a deep and often ideologically driven opposition to “red tape”. That red tape includes measures that protect rare species and unique habitats, and that prevent companies from damaging the environment or using dangerous chemicals in their products. It is now time to put the rhetorical bluster about red tape behind us and move on to focusing on what the Government’s red lines will be as they undertake these negotiations. If their priorities are muddled, or if key protections are sacrificed for short-term gain, we could be living with the impact for generations. Wherever all the moving parts of this constitutional crisis end up, we must ensure that the UK continues on the right path. As a range of environmental groups asserted before and after Brexit, co-operation and collaboration within Europe and with the EU works, because we do not solve such problems in isolation. My nation, Scotland, understands that, but does this House and do this Government also understand?