Charles Hendry
Main Page: Charles Hendry (Conservative - Wealden)
Mr Philip Hollobone (Kettering) (Con)
7. Whether he plans to amend the safety regime for offshore oil drilling following the publication of the analysis of the causes of the oil spill in the gulf of Mexico.
The Minister of State, Department of Energy and Climate Change (Charles Hendry)
I am delighted to take part in the Greg Barker show, Mr Speaker.
Although DECC regulates environmental aspects of the oil and gas sector, the Health and Safety Executive is responsible for safety. We have taken further steps to strengthen our regulatory regime by doubling the number of environmental inspections, and we are satisfied that the regime is one of the most robust in the world. We have been looking closely at information from the Macondo incident and will continue to do so. When those investigations are complete, we will determine what more, if anything, needs to be done to reinforce our regulatory approach.
Mr Hollobone
My constituents in Kettering would like to know whether an incident such as happened in the gulf of Mexico could happen on the UK continental shelf, and if so, what the Government would be able to do about it.
Charles Hendry
One of the most immediate actions taken was to ensure that we have capping and containment devices—two containment devices that could deal very quickly with such an emergency are now based in the UK. We are also working with the industry on capping devices that would provide early, permanent solutions.
Sir Robert Smith (West Aberdeenshire and Kincardine) (LD)
Will the Minister ensure not only that we will rightly learn any lessons from the inquiries into the gulf of Mexico incident, but that nothing is done to lose the leading-edge safety case regime that has been so well established since the Piper Alpha disaster?
Charles Hendry
My hon. Friend is absolutely right. We are keen to see international standards and work on that basis. However, that means bringing other countries up to the standard that already operates in the North sea, rather than lowering our standards to other international levels.
Miss Anne Begg (Aberdeen South) (Lab)
What is the Government’s role in the Oil Spill Prevention and Response Advisory Group, which was set up by the industry in the UK in the light of the disaster in the gulf of Mexico?
Charles Hendry
OSPRAG is rightly an industry-led initiative. We are working very closely with it, especially on identifying areas where Government involvement in crucial. We are particularly supportive of its work on developing immediate capping devices to ensure that should a disaster occur, it can be dealt with very quickly indeed.
Eric Ollerenshaw (Lancaster and Fleetwood) (Con)
8. When he expects to announce his plans for a consultation on electricity market reform.
The Minister of State, Department of Energy and Climate Change (Charles Hendry)
The Secretary of State announced his plan for a consultation on electricity market reform in the annual energy statement in July. In accordance with the DECC business plan, the consultation will be launched in December.
Eric Ollerenshaw
What reassurance can the Minister give the House that that consultation will end up not like the endless consultations of the previous Government, but with a clarity of purpose on our energy policy?
Charles Hendry
My hon. Friend is absolutely right. We must put a stop to Green Papers, reviews and consultations. We must draw a line in the sand and say, “This is the time to make decisions, this is the structure and this is basis for getting on with it.” We simply must get on with the investment.
Dr Alan Whitehead (Southampton, Test) (Lab)
Will the Minister consult on the question of capacity payments for energy plant investment and on low and high-carbon markets? Alternatively, does he consider, as is suggested in the coalition document, that simply having a floor price for carbon will be enough to sort the market out for the future?
Charles Hendry
The hon. Gentleman knows a huge amount about these issues. We are consulting on a floor price for carbon, which we believe is essential, and also on other mechanisms that might be necessary to secure investment in low-carbon technologies. We will consult on capacity payments in terms of back-up generation capacity and on other ways of managing demand, which we think is a more efficient way to deal with that problem.
Ian Swales (Redcar) (LD)
9. If he will take steps to ensure that the renewable heat incentive does not make UK energy-intensive industries internationally uncompetitive.
Mr Ben Bradshaw (Exeter) (Lab)
11. What assessment he has made of the effects on local employment levels of his decision not to pursue tidal technologies in the Severn estuary.
The Minister of State, Department of Energy and Climate Change (Charles Hendry)
A Severn tidal power scheme could create jobs in Wales and south-west England during construction and operation. However, it could also cause job losses in the Severn estuary’s ports, fishing and aggregate extraction industries. We are talking to interested private sector developers and remain absolutely committed to supporting the growth of a successful UK tidal energy sector.
Mr Bradshaw
Is it not extraordinary that the Energy and Climate Change Secretary can go from being anti to pro-nuclear in a matter of days, yet abandon tidal power for Britain? The Severn estuary has the potential to create 5% of our energy needs and create 100,000 jobs. How does that square with the Prime Minister’s promise to put tidal energy at the top of his so-called green agenda?
Charles Hendry
The right hon. Gentleman put it correctly in his own blog, when he said:
“In an ideal world, we would all like to see the scheme that has the potential to provide the maximum amount of renewable energy and the least environmental impact in other ways”.
But that might not be possible. We have looked at the costs, the environmental consequences, the benefits it would bring, the alternative schemes and the resulting diversion of capital, and we have decided that other tidal mechanisms would be better.
Miss Anne McIntosh (Thirsk and Malton) (Con)
What role did the environmental impact assessment have in the final decision not to proceed, and what lessons can be learned from this process?
Charles Hendry
It was part of the process, but it was not the whole process. We have also looked very carefully at the costs: the main barrage would cost more than £30 billion. We looked at the amount of subsidy that would require now, and believed that it was not the right way forward.
Alex Cunningham (Stockton North) (Lab)
12. What proportion of his Department’s funding for low-carbon technologies is likely to be allocated to port infrastructure for offshore wind industries in the next four years.
The Minister of State, Department of Energy and Climate Change (Charles Hendry)
The spending review announcement included about £200 million to support the development of energy technologies, as well as up to £1 billion for carbon capture and storage. We will commit up to £60 million to support offshore wind manufacturing infrastructure at port sites, to meet the needs of offshore wind manufacturers.
Alex Cunningham
I am grateful for that answer, and I am pleased that the Government are following through on this Labour party initiative. The Minister will know that north-east England, including the north bank of the river Tees in my constituency, is well placed to create thousands of jobs through the development of offshore wind farms. Can the Minister assure me that our north-east regional ports will get a share of this investment?
Charles Hendry
These are some of the best opportunities anywhere in the country. We know there are good opportunities across the country, and they will be particularly focused on assisted areas, which will certainly include parts of the north-east. There is great potential there that we hope will be developed.
Mr Charles Kennedy (Ross, Skye and Lochaber) (LD)
Given the developments in this sector generally, will the Minister comment on the £70 million wind energy fund, which has just been unveiled by the First Minister for Scotland, and which the First Minister claims is open for business immediately and will lead to the creation of 28,000 jobs? We all hope he is right. Has the Minister’s Department been involved with the Scottish Government? How does he see this rolling forward?
Charles Hendry
The First Minister’s announcement was based on his own decision, and we are still waiting for more details about what it will involve. However, when we put together £70 million for Scotland and £60 million for England, we have a significant contribution to the development of this industry in the United Kingdom.
Clive Efford (Eltham) (Lab)
13. What discussions he has had with the Secretary of State for Business, Innovation and Skills on the lending practices to be adopted by the proposed green investment bank.
Mr Dominic Raab (Esher and Walton) (Con)
15. What plans he has to introduce a floor price for carbon.
The Minister of State, Department of Energy and Climate Change (Charles Hendry)
The Chancellor announced in the Budget that the Treasury and Her Majesty’s Revenue and Customs would publish proposals in the autumn to reform the climate change levy to provide more certainty and support for the carbon price, and to encourage investment in low-carbon electricity generation. DECC officials have been supporting the Treasury and Her Majesty’s Revenue and Customs in developing these proposals, which will be published shortly.
Mr Raab
I thank the Minister for that answer, and I welcome his Department’s consultation on a floor price for carbon. I hope that that will take the place of the tapestry of tariffs and subsidies that distort the market for clean energy. How will he ensure that the price is set at a level that ensures a level playing field and encourages long-term investment, including in nuclear power?
Charles Hendry
My hon. Friend puts his finger on the most crucial issue in the area. This is one of the most important areas where we will be consulting and taking forward policy in the whole of this Parliament. We have to set it at a level that will stimulate investment, without penalising consumers or reducing the commercial advantage of British companies. That is a priority in our work.
John Cryer (Leyton and Wanstead) (Lab)
Does the Minister realise that a floor price for carbon that is significantly above the market rate will be seen as a subsidy for the nuclear industry, and how does he justify that?
Charles Hendry
This is a mechanism to support investment in all low-carbon technologies. We were left with a mountain to climb—£200 billion of new investment—as a result of the failure to secure enough investment in the past. These are part of the crucial measures required to make sure that international investors see the attraction of investing in Britain.
Andrew Stephenson (Pendle) (Con)
17. What steps he is taking to facilitate the construction of new nuclear power stations without public subsidy.
The Minister of State, Department of Energy and Climate Change (Charles Hendry)
I am on a roll now. The coalition agreement makes it clear that nuclear power without subsidy has a role to play in our future energy mix. The Government are committed to removing obstacles to investment in new nuclear. These include designation of a nuclear national policy statement, completion of the required regulatory justification process, completion of a generic design assessment, and putting in place a robust regulatory framework for waste and decommissioning.
Andrew Stephenson
I thank my hon. Friend for his reply. Nuclear must be part of a diverse energy mix, but does he agree that it is now too late for new nuclear to come on line before the old capacity shuts down?
Charles Hendry
My hon. Friend emphasises absolutely the right point. We have a challenge coming in 2016 when one third of our coal plant will close. Another large chunk of coal will go towards the end of the decade, and most of our nuclear plant will close during this decade. Had it not been for the five-year moratorium on nuclear under the previous Government, we would have been five years ahead, and the energy security of this country would have been greatly enhanced.
Angela Smith (Penistone and Stocksbridge) (Lab)
As was mentioned earlier, it is critical to advance manufacturing that the new generation of power stations goes ahead. Companies such as Forgemasters are looking for certainty. Will the Minister guarantee that the building of new stations will go ahead, even if it proves necessary to provide some public subsidy?
Charles Hendry
We have said that we want international companies to look at the opportunities in Britain, and we are encouraged that it is increasingly becoming one of the most attractive places in the world for investment in new nuclear. We will remove barriers to investment, but there will not be public subsidy for such work, and companies are not asking for that. We are creating the right framework for investment to take place.
Priti Patel (Witham) (Con)
T1. If he will make a statement on his departmental responsibilities.
The Minister of State, Department of Energy and Climate Change (Charles Hendry)
Since our last departmental questions, we have launched a consultation on the revised draft national policy statement on energy calling for a surge in investment in new energy. We have worked with colleagues in the Treasury to secure a spending review settlement that allows us to deliver on our key policy objectives, and we have published our departmental business plan setting out how we will honour our commitments in the coalition agreement.
Priti Patel
In the past few years, bonuses and other allowances paid to the Minister’s Department and its four quangos have totalled more than £30 million. What action is being taken to reduce these spiralling costs?
Charles Hendry
My hon. Friend raises an important issue. Targeting payment to specific staff, rather than building it into a general salary, is a more efficient use of public spending. For example, it does not increase long-term costs such as pension entitlement. We are, however, looking closely at such issues. We have already taken measures to tighten controls in areas such as travel, and we have implemented a pay freeze this year and next year for all staff other than those earning less than £21,000. The use of bonuses has been significantly reduced.
Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
Moving from housekeeping to international issues, I note that next week there will be a debate on the Cancun climate change conference, thanks to the hon. Member for Chippenham (Duncan Hames). That debate is very welcome, but until we heard some snippets from the Minister today, it underlined the fact that there has been a deafening silence from the Government in the House about what they want to achieve. We all want a good outcome, and we recognise the challenges, as the Minister said, about legally binding international agreements. Will he tell the House clearly what the Government hope to achieve in the UK, and whether they are planning to make a statement in Government time?
Andrew Stephenson (Pendle) (Con)
T2. I represent a constituency in the Pennines, where it already feels significantly colder than it does here in London. May I ask the Minister to explain what he is doing to ensure that we have adequate gas supplies at times of peak demand?
Charles Hendry
My hon. Friend raises a critical issue. We have already started to take action. I have licensed the Saltfleetby facility, which will give us a 15% increase in our gas storage, and the Deborah facility, which, if it gets the final investment decision, will double gas storage in this country. We shall also take steps in the Energy Security and Green Economy Bill this autumn to require greater security of supply from the energy companies.
Charles Hendry
I am grateful to the right hon. Gentleman, who was two of the best of the last batch of Energy Ministers. I had a meeting with the executive director of the International Energy Agency this week to talk about its work and about the energy outlook. We broadly share the analysis that we are moving into a period of widely available and relatively affordable gas, but the danger of that is that it could put off investment in gas development internationally, which could create shortages further down the line.
David Mowat (Warrington South) (Con)
T3. Over the past couple of years, work has commenced in countries other than the UK on about 60 nuclear power stations, which will provide cheap, economically sustainable energy across the world. Does the Minister agree that this represents an opportunity for our own office for nuclear development, and will his Department support it in its endeavours to secure exports?
Charles Hendry
One of the advantages that we have is that, because we do not have a national champion, we have an independent regulator who is robust and understood to be very forceful and effective. We can encourage other countries to look at that as well. The work we are doing across the piece on nuclear decommissioning and development is also critical.
Paul Blomfield (Sheffield Central) (Lab)
T8. The Minister has acknowledged the importance of private sector investment in the green investment bank. Will he outline to the House what practical steps are being taken to obtain such investment, and does he recognise that the delay in making a detailed statement about the bank’s function and structure is causing uncertainty in the sector, which will frustrate that investment?
Mr Dennis Skinner (Bolsover) (Lab)
Does the Minister recall that a couple of months ago I raised with him the question of planning applications for the installing of wind turbines close to villages? I asked him if the Department had decided whether the turbines should be 5 km or 2 km away, and I had the impression that he would have a look at it. Has he made his mind up yet?
Charles Hendry
The hon. Gentleman has raised an important point on which there is strong feeling on both sides of the House. We do not believe that that sort of distance restriction is appropriate, although we know that a different approach is taken in Scotland. We think it important for local communities to own the decisions, which is why we have a localism agenda. We want such developments to have the active buy-in and support of local communities, and we are determined to deliver that.
John Glen (Salisbury) (Con)
T5. Can the Minister assure me that he is working closely with his ministerial colleagues in the Department for Communities and Local Government to ensure that their approach to localism in the context of planning does not unreasonably restrict the diversification of farm businesses as they enthusiastically embrace small-scale renewable energy incentives?
Sir Robert Smith (West Aberdeenshire and Kincardine) (LD)
T7. Smart meters have a great potential to benefit both consumers and the national interest in reducing our carbon emissions. What discussions are the Government having with industry and regulators to ensure that the vital spectrum is still available to ensure that the roll-out of smart metering extends to the whole United Kingdom, including difficult-to-reach rural areas?
Charles Hendry
My hon. Friend has put his finger on an important point. A number of communication technologies may be appropriate in the context of smart metering. In July my Department, together with Ofgem, published proposals for the establishment of a national smart meter communications organisation. Ofcom is also directly involved, and we are working closely with it to deliver exactly the sort of solution that my hon. Friend wants.
Kerry McCarthy (Bristol East) (Lab)
As Ministers are no doubt aware, the Sustainable Livestock Bill will be before the House tomorrow. I appreciate that it is led by the Department for Environment, Food and Rural Affairs at the domestic level, but what is the Minister doing to ensure that the issue is on the agenda at the international climate change talks?
Charles Hendry
I should be delighted to come to the hon. Gentleman’s constituency. This is potentially one of the most important projects in the country, and I am delighted that the spending review was able to give £1 billion to taking forward carbon capture. That is the greatest single contribution any Government anywhere in the world has made to a single plant, and I very much hope we can make the Longannet project work. I should be very pleased to visit it with the hon. Gentleman.
Mr Peter Bone (Wellingborough) (Con)
This country has a liberalised energy market, but the previous Administration failed to persuade some of our European Union colleagues to liberalise their energy markets. What progress is this Government making?
Charles Hendry
Progress is indeed being made, such as in unbundling and separating the vertical integration of some of the larger European countries. They are also making particular progress in energy security, in terms of the development of gas and electricity connections. That will play a very useful role by greatly enhancing our security in times of international stress and pressure.
Mr Iain Wright (Hartlepool) (Lab)
In response to a question from my hon. Friend the Member for Stockton North (Alex Cunningham), the Minister acknowledged the huge potential of Teesside and the north-east in the manufacture of renewable energy. That requires Government support, yet business support is being cut, particularly in the regions. Given the enormous potential of Hartlepool, Teesside and the north-east, what can the Minister do to make sure we realise that potential?
Charles Hendry
It is a tradition of these exchanges that I discuss when I will visit the hon. Gentleman’s constituency, and I shall do so before the next exchange. I will be there in early December, so that I can better understand the massive contribution businesses in his constituency and thereabouts can make in respect of our energy security and the development of low-carbon technologies in this country.
Jo Swinson (East Dunbartonshire) (LD)
The Government’s current target is for 15% of energy to be produced from renewable sources by 2020. If the measures we are taking to encourage renewables prove successful, will the Government consider being more ambitious and revise that target upwards?
Charles Hendry
We have asked the Committee on Climate Change to look at whether that level of ambition should be raised. We are also examining whether we can do more through international co-operation: have some areas of renewable energy been locked out because they cannot be used for other countries’ domestic markets, so can we go further by looking at a “whole islands” approach around the British isles to maximise the resources that are available?
Ian Lavery (Wansbeck) (Lab)
Will the Minister update the House on the progress, or otherwise, being made in the development of the carbon capture and storage projects involving clean coal technology here in the UK?
Charles Hendry
As I have said, the spending review settlement allocated £1 billion to project 1. We will then take forward three further projects, and we have now announced that that could be open to gas as well. We are looking at three further projects because we believe Britain should be leading the world in this technology, and we are absolutely determined that it will.
Rehman Chishti (Gillingham and Rainham) (Con)
The generation tariff payment is not the consideration of any supplier and is therefore outside the scope of VAT. If a commercial company wishes to assign its income to a third party in exchange for the supply and installation of solar panels, will the funder of the panels be able to claim back the input VAT?