Geothermal Energy
Claire Perry Excerpts(5 years, 10 months ago)
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Dr Alan Whitehead (Southampton, Test) (Lab)
I congratulate my hon. Friend the Member for Bishop Auckland (Helen Goodman) on securing this important debate and on putting her case with such clarity and precision. After what she found out about geothermal during her research for this debate, I am sure she will agree with me that it is indeed Britain’s forgotten renewable. It is not forgotten because it is not feasible or because it does not bring tremendous benefits. It is forgotten simply because no one has done much about it, even though that resource is under our feet in many parts of the country and is relatively easy to access. When that resource is accessed and developed, it provides potential free heat and power, probably for 100 to 150 years, as a result of a single borehole drilled down into the ground to unleash it.
Why it should be forgotten is a source of puzzlement to me, because it is a universal and beneficial renewable. Some people may regard deep geothermal as not quite renewable, in that if there is drilling into a deep geothermal aquifer, the aquifer, in theory, depletes over time. However, if water is being raised from the aquifer at the typical temperature level in the UK of about 73° or 74° Celsius, that resource will deplete at only 1° in heat per 100 years. Yes, it depletes a bit, but it is not exactly calamitous—unlike, one might say, drilling a fracking well, where the well depletes after about eight years.
Dr Whitehead
No, it is a very factual debate—that is the difference.
The geothermal potential of the country is enormous, and the hon. Member for Falkirk (John Mc Nally) set out what the potential would be, in electricity and heat, for the UK were we to proceed seriously with geothermal energy. Perhaps a limiting factor is the fact that geothermal energy is not available everywhere in the country. We need to be clear about the fact that deep geothermal is available on the basis of three different kinds of site. Basins with very ancient water at the bottom are one kind of site. Another kind, which require slightly different technology, are areas with radiothermal granite batholiths. I believe that the Minister, as a first-rate geographer in her time, will know all about batholiths and lopoliths and various other things. We have quite a lot of radiothermal batholiths in the UK, with naturally occurring radioactive-based heat coming from deep within the earth’s crust. Another kind of site relies on the availability of technology to release heat by putting water down one pipe and up another, giving geothermal as a result.
As my hon. Friend the Member for Bishop Auckland mentioned, lower-temperature geothermal resources arise from abandoned mine workings. With heat-concentration techniques that is not a problem, in terms of concentrating the heat to get into production either for heat distribution or, indeed, for making steam to generate electricity.
As hon. Members have kindly mentioned, I have an interest in the debate because I think I can claim to be the only sitting Member of Parliament who has directly set up a geothermal energy scheme. I know a little, therefore, about how it all works. That scheme is based, as has been mentioned, in the middle of Southampton in a not particularly prepossessing shed, with a small wellhead in the carpark of the former Toys R Us store. That unprepossessing setting hides a well, drilled to about 1,800 metres. Water comes up at just over 70° Celsius and is converted into the material for a district heating scheme by a heat exchanger and concentrator. Now Southampton has a city centre district heating scheme with some 17 km of pipes, covering the university, the civic centre, the country’s only geothermally heated hypermarket and a five-star hotel. In other words, there is a complete city centre arrangement, heated substantially by geothermal energy. Not only that, but it has been heated in that way on an untroubled basis since 1987, and will continue to be so until 2087 on present estimates of what may be available. That is the potential, in practice, for geothermal energy.
The Minister for Energy and Clean Growth (Claire Perry)
It is a great pleasure, as always, to serve under your chairmanship, Mr Evans. We have had a brilliant and fascinating debate, and I commend the hon. Member for Bishop Auckland (Helen Goodman) for an extremely thoughtful, excellent, fact-filled and numerical brief. It is always music to my ears to hear about net present values, particularly when they involve a £7 billion greater turnover for an industry, and the opportunity to create billions of pounds of gross value added and provide many jobs. I thank her for putting the debate in that context. I also thank, as she did, the Coal Authority and Durham University for providing an excellent backdrop to the debate.
As the hon. Lady pointed out, 25% of housing stock in her constituency sits on top of coal workings, which were dug out at exceptional, personal cost by men working in the most horrific conditions, with heat often being one of the worst things they had to deal with. It should therefore come as no surprise that the areas that have been allowed to flood are hot areas, and it would be great to think that at the Durham miners’ gala on 14 July, the topic might be how the legacy that was so painfully won by the shovels and picks of so many men could be used to create something positive for our low-carbon future.
The hon. Member for Southampton, Test (Dr Whitehead) is always good at explaining these issues. I will not run through the batholiths argument again, but we have a long history of exploiting our various deep-geothermal sources. Like many other places, Bath, which is close to my constituency, was built on the thermal springs that were a happy by-product of those hot-spots. It was a pleasure to hear the hon. Gentleman describe the scheme in the city of Southampton, which was the first of its kind in the UK. The important thing about that example is that it shows when it works. This sort of heating works well when there is year-round take-up. One of the issues with such schemes is that they do not work terribly well when people need heating at just one time of the year, because the economics are not attractive. The hon. Gentleman said that an entire ecosystem was constructed around that heat, so that is a really good example. Of course, the water is 76°, so it comes up pretty hot. As the hon. Member for Bishop Auckland knows, the Eastgate renewable energy village, near her constituency, is the first eco-village in the UK. It was funded as way to explore this technology, and it provides heat from geothermal sources.
This is an incredibly exciting time to come together to talk about this issue. In 2013, we commissioned a review of the opportunities for geothermal, both heat and energy—I will talk about the distinction in a moment—and we mapped out the relevant parts of the UK. We have to pick through the issue of geothermal for energy and heat carefully. Iceland sits on the spot where the mid-Atlantic ridge breaks apart, which is not necessarily the most geologically stable place to be, so massive amounts of geothermal energy come to the surface, and islands are created overnight. I am very interested in the Icelandic interconnector project, which has the opportunity to create jobs in a cable factory where the interconnector makes landfall, and is a very interesting opportunity to bring in power generated by high levels of geothermal energy.
Unlike Iceland, we have relatively few opportunities to generate geothermal energy easily and cost effectively. The hon. Member for Falkirk (John Mc Nally) asked whether any projects have received a CFD, but none have bid in. Given what has happened to the cost of renewables—we have led the world in developing an offshore wind industry, and we are buying renewable energy at low prices that we could not have imagined even a few years ago—it is difficult for geothermal electricity to compete for CFDs. Arguably, the opportunities for heat are much more local and interesting.
Hon. Members have talked about the challenge of shallow geothermal, and we think that the most promising area is the low-temperature applications, such as district heating schemes. As the hon. Member for Bishop Auckland said, the water in her constituency is 30° C and shallow, so we do not need an incredibly difficult boring process to get it. We have heard from all parts of the UK, which is refreshing, about the opportunities for such heat schemes. I found the hon. Lady’s point about creating an export industry fascinating, because of course it was the mining industry that created the beam engine. The newcomer Watt engines, which pumped water out of the mines, led directly to the industrial revolution and our global leadership in technology. It is fascinating to think about how we can extract heat from those mines and create export industries across the UK.
The British Geological Survey, which is a marvellous institution, has surveyed the UK. We know about the opportunities both for deep geothermal heat and for shallow geothermal heat extraction, which is very widely distributed. Every investment we make has to pass a triple test: it has to deliver decarbonisation, it has to be deliverable at the right cost for consumers, and it has to create economic value added, as the hon. Lady expounded eloquently. That is the filter through which we review these schemes.
The hon. Member for Falkirk asked me several questions, which I shall try to answer. One was about the CFD—hopefully he is satisfied with my answer. Secondly, he said that the Government are not doing anything, but I am afraid I have to reject that. Heat is a devolved matter in Scotland, as he knows, but that has not prevented the UK Government from providing £4.5 million for the deep geothermal challenge scheme. The £250,000 he referred to was a welcome addition, but most of the funding was provided by UK-wide taxpayers. He talked about the HALO project, which I believe has been funded to the tune of £1.8 million by the Scottish Government and £3.5 million by the UK Government. I do not like to make political points; I find it much better to talk about investing in our UK-wide resources for the benefit of UK consumers and taxpayers. We have to go through the technological process and ensure these projects are economically effective so we do not burden taxpayers and bill payers unnecessarily, and we have to innovate.
Most houses—although not in rural areas—are on the gas grid, so when we invest we have to think hard about the cost trajectory vis-à-vis the fully costed position of being on gas heating. On the issue of rural homes, I am pleased to see my hon. Friend the Member for Central Suffolk and North Ipswich (Dr Poulter) here because, like him, I represent a very rural constituency, in which more than 40,000 homes, including mine, are not on grid. The challenge of decarbonising those homes and reducing our dependency on heating oil, which the hon. Member for Strangford (Jim Shannon) mentioned, is live. In our clean growth strategy, we set out our intention to ensure that no new buildings in rural areas use fossil fuel sources of heat by 2025. We are determined to get to that level and to encourage innovation of the kind that my hon. Friend the Member for Central Suffolk and North Ipswich talked about.
How do we innovate, drive down the cost of extraction and use that heat to the maximum effect to ensure that these projects are economically viable? We are working with the Natural Environmental Research Council and the BGS, and are funding a £9 million geothermal research facility—the UK geoenergy observatory—to study low-temperature geothermal energy in former mines in Glasgow. We also have a number of other innovation programmes and are working with the industry.
I want to flag up a possible route to funding, because I want to ensure that some of these schemes are developed. Phase 7 of the industrial strategy challenge fund, with £10 million of funding, is open for bids. The launch event for it is on 4 July. It would be great to see whether we can create a bid for an innovative scheme to produce a working, cost-effective scheme. As the hon. Member for Ogmore (Chris Elmore) said, we have the heat networks investment project, with more than £300 million of funding. I commend the Welsh Government, Bridgend County Borough Council and the hon. Gentleman’s efforts in creating that scheme, which has bid into the heat networks scheme. Although this is a devolved matter in Wales, as always I think we are better when we work together. This is an opportunity to bring forward innovation and create a scheme that can be incorporated into heat networks. I would be absolutely delighted to meet the Coal Authority or anybody else who is willing to help us think about how we can pull such a scheme together, because I want to see innovation proceed. Given the constituency interest of the hon. Member for Bishop Auckland, perhaps she is the person to lead that delegation.
We have the innovation route to market and the heat networks scheme. I have been given a number of “go away and look at them” actions, including looking at risk insurance and planning. As I said about the clean growth strategy, our building regulations must ensure that we do not put up new builds in off-grid areas that are dependent on current forms of fossil fuel heating.
We have an opportunity to make this very large latent resource, which was won so painfully over many years, part of our low-carbon future. We have spent tens of millions of pounds in this area. The UK is in a fortunate situation, because our renewables industry is powering ahead. Other countries look with envy at what we have delivered through other renewable sources of energy. We are one of two countries in the world doing enough to meet even a 2° rise in climate, due to what we have done in our energy industry. The opportunity to decarbonise heat, create local productivity and resource, and generate innovation that we can export elsewhere in the world is incredibly interesting.
Once again, I congratulate the hon. Member for Bishop Auckland on securing this debate. I thank all other Members who spoke—we had a marvellous conversation about the opportunities in the constituency of my hon. Friend the Member for Ochil and South Perthshire (Luke Graham). This is a very opportune time: there are routes to innovation, such as the heat networks investment, and I am in the lucky position of being able to make investment. I would like to see some of this innovation coming forward.
Business, Energy and Industrial Strategy
Claire Perry Excerpts(5 years, 10 months ago)
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Claire Perry
I am told that the Territorial Sea Act sets baselines and that within 12 nautical miles is regarded as onshore. [Official Report, Second Delegated Legislation Committee, 4 June 2018, c. 8.]
Letter of correction from Claire Perry:
An error has been identified in my response to the hon. Member for Southampton, Test (Dr Whitehead) in Second Delegated Legislation Committee on 4 June.
The correct response should have been:
Claire Perry
I am told that the Territorial Sea Act sets baselines and that within those baselines is regarded as onshore.
Energy Council
Claire Perry Excerpts(5 years, 10 months ago)
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The Minister for Energy and Clean Growth (Claire Perry)
The Energy Council took place on 11 June in Luxembourg. The UK was represented by the Deputy Permanent Representative, UKREP.
The Council adopted a general approach on the regulation on the Agency for the Cooperation of Energy Regulators. There were no formal objections to the text but a number of member states, including the UK, expressed the view that the role of the director of the agency should not be weakened.
The presidency updated Council on progress on the regulation, on all of which it hoped to reach deals with the European Parliament by the end of its presidency. Some member states called for higher ambition on the level of the 2030 EU targets for renewable energy and energy efficiency. Others indicated that they would consider raising the targets beyond the existing Council position but only in exchange for remaining very close to the Council position on other, sector-specific measures within the directives. Other member states expressed reluctance to move above the original Council agreed position of 27% on renewables and 30% on energy efficiency. The UK stressed that it was highly ambitious on climate mitigation but thought it essential member states be given enough flexibility to deliver this cost-effectively. The presidency concluded that the Council had taken note of the state of play.
The Commission provided Council with an update on its activities in relation to external energy policy, focusing on its discussions with Iran. Some member states, including the UK, expressed their desire to see quicker progress on the gas directive and to start discussions at the political level, though others disagreed.
The Council concluded after the Austrian delegation presented the priorities for their forthcoming presidency. These would include progressing negotiations with the Parliament on the remaining parts of the clean energy package, a focus on innovative energy technologies, and their plans to bring together international organisations to strengthen dialogue on energy security.
[HCWS769]
Oral Answers to Questions
Claire Perry Excerpts(5 years, 11 months ago)
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Colin Clark (Gordon) (Con)
The Minister for Energy and Clean Growth (Claire Perry)
My hon Friends and the House will agree that we should be proud of the UK’s progress in cutting emissions while driving economic growth. Since 1990, we have reduced our greenhouse gas emissions by over 40% while growing the economy by over two thirds—the best performance per capita in the G7. And we will, as part of our modern industrial strategy, continue to exploit the opportunities for future growth across the UK through our clean growth grand challenge.
Julian Knight
As we rightly move towards eliminating the internal combustion engine in all new cars from 2040, does the Minister agree that, in the short to medium term, it is important to jobs and growth that we recognise the role of clean diesel engines such as those in the cars that roll off the production in my local car plant?
Claire Perry
My hon. Friend rightly champions the incredible employer in his constituency. He knows that we are right to move towards eliminating internal combustion engines from our roads, but we must do it in a managed way and ensure that we preserve those jobs and particularly the investment in clean diesel during the transition to zero-emission vehicles. I know that there have been announcements today of job losses in his constituency, which will be concerning. However, they are part of the manufacturing plan that has been announced.
Colin Clark
The oil and gas industry plays an active role in protecting the environment and reducing emissions. Does the Minister share my shock that the shadow Chancellor advised Cambridge University to divest itself of oil and gas investments when that industry supports 300,000 jobs in the UK? Does she agree that the industry is playing its part, and that 300,000 UK jobs are worth protecting despite the Opposition’s—
Mr Speaker
Order. I say very gently that the Minister will want to focus on the policy of the Government. Her view about the policy of the Opposition is neither here nor there. With experience, I know the hon. Gentleman will realise that those questions are disorderly.
Claire Perry
The Government’s policy is to support a sector that employs 300,000 people and contributes £21 billion to the UK economy. We recognise that the vital oil and gas industry has an integral role to play as we transition to a low-carbon economy, which is why we are investing in technologies such as carbon capture, usage and storage, and exploring how things such as our world-leading submersible technologies can work to support oil and gas.
Albert Owen (Ynys Môn) (Lab)
The Minister will be aware of the potential of the marine energy sector in terms of both UK economic growth and reducing emissions. Will she assure me that projects such as Minesto and Morlais in my constituency will not be crowded out by the funding mechanism in place now, which favours offshore wind?
Claire Perry
The hon. Gentleman knows that we have set out £557 million to support all renewable technologies over the next few years. We want to make sure that we decarbonise at the right price for taxpayers and bill payers, which is one reason why the mechanism will continue.
Chris Elmore (Ogmore) (Lab)
One way in which the Government could invest in economic growth while decreasing emissions would be to invest in the Swansea Bay tidal lagoon project. They have flip-flopped over the past 10 days, with leaks about when the announcement will or will not be made. May I press the Minister? Can she please tell us when she will deliver that major economic investment for Wales?
Claire Perry
Having grown up on one side of the Bristol channel and seen the second-highest tidal range in the world on an almost daily basis, I will take no lessons on the value of tidal and marine technology. As guardians of public money, it is absolutely right that we make investments that deliver the right decarbonisation and the right value for the taxpayer. The hon. Gentleman should not rely on leaks and assume that they are Government information. That announcement will come in due course and the House will be the first to know.
David T. C. Davies (Monmouth) (Con)
Does my right hon. Friend agree that the recent announcement of support for Wylfa underpins the Government’s commitment not only to reducing emissions, but to economic growth, not least in Wales?
Claire Perry
My hon. Friend is right. I should clarify that we are entering commercial negotiations—a deal needs to be done—but we should make a virtue of the fact that we have one of the most diversified energy supplies in the world and one of the lowest-carbon energy supplies. We have also managed to get ourselves off coal, which other countries long to do.
Rebecca Long Bailey (Salford and Eccles) (Lab)
The Government’s shambolic policy on the solar and onshore wind sectors in recent years has meant that significant economic growth and decarbonisation opportunities have been lost. For example, we have seen dramatic feed-in tariff subsidy cuts; business and VAT rate hikes; and obstruction to clean power auctions. Sadly, as we have heard today, there are reports that the Swansea Bay tidal lagoon, the world’s first tidal lagoon, which would create thousands of jobs and local supply chains and use 100,000 tonnes of majority British steel, is potentially on the Secretary of State’s hit list. Will the Minister buck that trend today and confirm when the decision will be made, and outline what support she will give to solar and onshore wind?
Claire Perry
I remain bemused by the hon. Lady’s ability to seize a disaster out of a triumph. We have delivered more renewable energy than we ever thought possible, at a price that is unimaginable—[Interruption.] I know the Opposition Front Benchers do not give a stuff about consumer bills, as they have made that totally obvious, but we care about decarbonisation at the right price for the consumer.
Rebecca Long Bailey
I think we touched a nerve there. The Minister is living in a parallel universe to me, because in the first quarter of 2018 the deployment of new solar slowed to its lowest level since 2010, and next year onshore wind installation is expected to be at its lowest level since before 2008. But it gets worse: last November, the industrial strategy was published, yet seven months on progress has been slow, with business becoming increasingly frustrated. The industrial strategy council has not yet been appointed, no strategy for reaching the research and development target has been published and dozens of sectors are waiting for responses to their sector deals. So does the Minister accept, as some key business leaders do, that perhaps her Government’s chaos over Brexit and the apparent inability even to concentrate on an industrial strategy are undermining British business and indeed our growth?
Claire Perry
The previous point still stands. We are incredibly proud of our industrial strategy, with its groundbreaking opportunities to link up government and businesses for the first time. I go back to the point on the hon. Lady’s questions about solar: the thing about offshore wind is that we lead—[Interruption.] Again, if they could all stop chuntering, Mr Speaker—God almighty. We lead the world in terms of the installed capacity, and we have created tens of thousands of jobs. I know the Opposition Front Benchers, as per the first question, do not give a stuff about jobs, let alone consumer bills, but the point is that—
Mr Speaker
Order. Minister, please resume your seat. I am most grateful to you, but I am afraid dilation is not in order today. We have a lot to get through and not much time in which to do so. We have to make progress. We need short questions and short answers.
Mr Philip Hollobone (Kettering) (Con)
The Minister for Energy and Clean Growth (Claire Perry)
The last time I talked about dilation, I was in labour. However, in Kettering—
Mr Speaker
Order. What is required is a brief answer and a brief question—no dilation.
Claire Perry
In 2016, at least 150 GWh were generated in Kettering, mostly from renewables; this is enough generation to power 38,000 homes. In 2016, 405 GWh of electricity were consumed in the Kettering local authority area.
Mr Hollobone
It is great news that Kettering is one of the greenest boroughs in the country, but we do have a very large number of wind turbines in the borough. What are the Government doing to encourage offshore wind turbines, rather than onshore ones?
Claire Perry
We have maintained, and will continue to maintain, our manifesto commitment that says that no more large-scale onshore wind development is right in England. That should reassure my hon. Friend and his constituents.
Dr Rupa Huq (Ealing Central and Acton) (Lab)
The Minister for Energy and Clean Growth (Claire Perry)
Since 2010, we have seen a large increase in renewables deployment and investment, with more than £52 billion invested, and indeed it is paying off. In 2017, more than half our energy generation came from low-carbon sources. As prices tumble, we can buy more with the same amount of money, which is why we are making £557 million available for further contracts for difference. We have started negotiations with Hitachi to bring forward the country’s second new nuclear plant, which my hon. Friend the Member for Monmouth (David T. C. Davies) mentioned.
Dr Huq
The Minister talks a good talk, but rooftop solar panel take-up is at a seven-year low. In my seat, Alternergy has gone from topping the Fintech 100 to an 80% drop in business since the end of the feed-in tariff was announced in 2012. What assurances does the Minister have for such firms after the scheme closes next year?
Claire Perry
It is right that we look at how we can deliver subsidy-free energy using schemes such as the feed-in tariff that have been wildly successful. I will shortly be launching a call for evidence so that we can come up with a good replacement for the feed-in tariff scheme.
Sir Desmond Swayne (New Forest West) (Con)
What was the principal driver in the reduction of the price of new offshore wind?
Claire Perry
There were two things. First was the world-leading contract structure that we set up with our auctions; I pay tribute to that very good coalition policy. The second thing was the enormous deployment globally and the reduction in price of the various components. It has been a great British success story.
Barry Gardiner (Brent North) (Lab)
In 2015, the then Secretary of State said that 2018 would be the year for the UK to ratchet up our Paris climate commitments and our progress towards sustainable generation, but in the past three years the Government have capped support for low-carbon energy and destroyed 12,000 solar jobs. Clean energy investment, which fell by 10% in 2016, fell by a further 56% in 2017 to its lowest level in a decade. How about the Minister comes down off cloud complacency and finally gives investors certainty about the renewables industry, starting with a date for the consultation on the post feed-in tariff framework?
Claire Perry
I think that the question in all that preamble was, “What is the date?” As I said, we will be announcing that soon.
Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)
Globally, the nuclear power market is declining rapidly while the low-carbon power of offshore wind and battery storage becomes more affordable. How can the UK Government justify taking a reported £5 billion direct stake, and a further guarantee of £9 billion, in the nuclear white elephant that is Hitachi Wylfa Newydd?
Claire Perry
As I have said repeatedly, we have entered into negotiations. I have to tell the hon. Gentleman that one of the saddest things I saw at the conference of the parties in Bonn this year was the barge-loads of dirty brown coal sailing down the Ruhr because countries like Germany have made an ideological choice about their energy supply rather than focusing on what keeps the lights on, costs down and carbon falling.
Drew Hendry
The Minister said earlier that she “gave a stuff” about household budgets, yet Tory dogma is set to saddle consumers with nuclear energy costing about £80 per megawatt-hour compared with under £60 for offshore wind. Is it not time that the UK Government stopped living in the past, scrapped this nuclear project and put households, who bear the brunt of costs, front of mind?
Claire Perry
The hon. Gentleman cites numbers that have no relevance to the negotiations. We have to keep bills down, and we have to make sure that the lights are on, that we have a secure energy supply and that we decarbonise. We think nuclear is very much part of that mix.
Mr Paul Sweeney (Glasgow North East) (Lab/Co-op)
Tim Farron (Westmorland and Lonsdale) (LD)
The Minister for Energy and Clean Growth (Claire Perry)
The feed-in tariff scheme was launched in 2010 and now delivers £1.5 billion-worth of support a year for low-carbon generation. It has been really successful, and over 6 GW of it has been deployed—2.5% of UK electricity consumption. We want to see how we can deploy it at a subsidy-free level, as that is where prices are going. I will launch a call for evidence on the future of small-scale generation soon.
Mr Sweeney
Although I was delighted to hear that the world-leading small wind turbine manufacturer in my constituency, Gaia-Wind, was saved from liquidation this week by an overseas buyer, the unnecessary uncertainty that the Government have created around the future of small-scale renewable energy persists. So will the Minister put investors and companies at ease and make a cast-iron promise to bring forward the consultation on future support before the summer recess?
Claire Perry
I am really glad that, as the hon. Gentleman says, it looks as though at least some of the jobs at the company in his constituency have been saved. With these schemes, we always have to think about what is value for money and what is the right thing to do in terms of energy security and supply. I will not make cast-iron guarantees, but I can promise him that it will happen soon.
Tim Farron
Ben Dyson at Lakes Renewables Ltd in Kendal, which focuses on solar power, has seen a 50% reduction in his work due to the impending closure of the scheme. He has kept going by diversifying, but many other firms have gone to the wall. Ben urgently needs policy clarity from next March, and to see business rates on commercial rooftop solar abolished. What steps will the Minister take to ensure that these rates are abolished and that the growth of small green businesses such as Ben’s is encouraged?
Claire Perry
I met representatives of the various trade associations to discuss this really important point. It will be considered separately from the consultation. However, I invite the hon. Gentleman and his constituent to make any representations; I would be keen to receive them.
Maria Caulfield (Lewes) (Con)
The Minister for Energy and Clean Growth (Claire Perry)
This Government have provided unprecedented levels of support to help this incredibly important sector—that is something on which we do agree. The Government announced the transferable tax allowance, the sector’s No. 1 ask; established the Oil and Gas Authority; invested in the Aberdeen city deal, including the excellent £90 million Oil and Gas Technology Centre, which I was pleased to visit; and put together a fiscal package worth £2.3 billion. It is working, with 16 new final investment decisions this year.
Alan Brown
That all sounds very good, but the reality is that in 2016 the Budget measures on support for the oil and gas industry were only a third of the measures on inheritance tax. The measure on transferable tax history has been delayed further, so when will that come forward? Why can the Government find billions and billions of pounds for nuclear but not for the oil and gas sector?
Claire Perry
The hon. Gentleman and I usually talk about the sector in very positive terms. We have delivered the things that the sector has asked for and it is working. It is fantastic to see investment happening in the North sea basin. The fact that the sector has gone through a time of building resilience given the oil price decline means that it is now starting to invest and grow again.
Mrs Madeleine Moon (Bridgend) (Lab)
John Grogan (Keighley) (Lab)
The Minister for Energy and Clean Growth (Claire Perry)
I am delighted to answer this question and continue the conversation about carbon capture and storage that the hon. Gentleman and I were having last night. We are determined to deploy cost-effective carbon capture and storage at scale and in a way that helps to decarbonise both generation and industry. That is why we have asked the taskforce, the best minds in the country, and our CCUS council to convene. I am looking forward to receiving their report and acting on it very soon.
John Grogan
Does the Minister agree that the development of carbon capture and storage is crucial for much of British manufacturing and for the use of gas during the transition, and will she encourage innovation not just in technology but in finance, with both the Government and the fossil fuel sector contributing?
Claire Perry
The hon. Gentleman might have been reading one of the report’s recommendations. He is absolutely right. We must deliver this in a way that is cost-effective and supports further innovation. I am confident that, with the taskforce’s help, we will have very good recommendations and ideas to move forward with.
Ms Marie Rimmer (St Helens South and Whiston) (Lab)
Sir Edward Davey (Kingston and Surbiton) (LD)
The Minister for Energy and Clean Growth (Claire Perry)
The right hon. Gentleman knows, more than many in the House, the need to invest in innovative technologies, while maintaining a focus on value for money. We have rightly looked at this project with very serious scrutiny. There are some very attractive things about it, but it has to pass the value for money test. When that decision is made, the House will be the first to know.
Sir Edward Davey
Does the Minister accept that nuclear and offshore wind needed pathfinder projects, first-of-a-kind projects, to prove the technology and the economics and to get the cost down. Why can tidal lagoons not have such a pathfinder project, just as Charles Hendry recommended?
Claire Perry
Partly because of the right hon. Gentleman’s great policy decisions, we have had a world-leading advance in offshore wind in terms of the cost at which we can deploy it. He is right to say that we have to consider the whole life cycle of technologies and that is exactly what we have been doing in considering tidal technology.
Mr Speaker
The right hon. Gentleman has been given the accolade of being the source of world leadership in a particular field. I trust, therefore, that he will be gratified with his efforts today.
Michael Tomlinson (Mid Dorset and North Poole) (Con)
The Minister for Energy and Clean Growth (Claire Perry)
Of course, the whole House will shortly be able to pass the price cap Bill, which will assist all consumers with the cost of energy, and this comes on top of the prepayment meter and vulnerable consumers price caps that are in place. We are determined to continue supporting vulnerable consumers through such things as the warm home discount, winter fuel payments and repurposing the very large energy company obligation scheme to tackle fuel poverty.
Thangam Debbonaire (Bristol West) (Lab)
Claire Perry
I have always admired the hon. Lady’s passion. Again, as I have said multiple times, we absolutely are very keen to scrutinise this deal. It has to deliver the low-carbon energy we all want and the jobs we all want at a price that is affordable for the consumers we all represent.
Luke Graham (Ochil and South Perthshire) (Con)
Claire Perry
Those who missed the Clackmannanshire energy project Adjournment debate missed a massive treat: it was a very enjoyable, informative debate. We are very supportive of the project. My officials are working closely to explore funding opportunities, and I commend my hon. Friend for his continued leadership in this important area.
Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)
Richard Graham (Gloucester) (Con)
Claire Perry
I must pay tribute to my hon. Friend’s brilliant chairmanship of the all-party group on this technology area. He is absolutely right: we do think that water power has incredible potential. That is why the Government have invested over £100 million since 2010 in investigating various forms of the technology and why we are keen to continue to pursue opportunities, but they have to be at the right price for consumers.
Mr Virendra Sharma (Ealing, Southall) (Lab)
Energy Council: 11 June
Claire Perry Excerpts(5 years, 11 months ago)
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The Minister for Energy and Clean Growth (Claire Perry)
The Energy Council will take place on 11 June in Luxembourg.
The Council will discuss the regulation on the agency for the co-operation of energy regulators (ACER) with the presidency hoping to reach a general approach.
Under AOB, the presidency will provide an update on the current state of play in the negotiation of the regulation on governance of the energy union, the directive on renewable energy and the directive on energy efficiency. The Commission will then provide information on recent developments in the field of external energy relations. Finally, the Austrian delegation will provide information on the work programme for their forthcoming presidency.
[HCWS749]
Environmental Audit Committee
Claire Perry Excerpts(5 years, 11 months ago)
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Mary Creagh
I did not have time to go into our examination of the green investment bank. Our previous report in the 2015 Parliament recommended a green share in a special purpose vehicle, and I am pleased that has been taken up by the Government. The green investment bank was set up in 2012 to address market failure in this area. The question is whether that market failure still exists, and the answer is yes. Do we still need an investment vehicle to create confidence and to create that pipeline? The answer, post Brexit, is emphatically yes, which is why I mentioned access to European Investment Bank finance. Had we known Brexit was going to happen, would we have taken the same decision to privatise the green investment bank? Perhaps not.
Macquarie got the green investment bank, which has now been rebadged as the Green Investment Group, and there are still market failures. There is market failure in green transport, and our Committee heard there is no intermediate body to broker between the City of London and locals authorities that want to decarbonise their local housing schemes and council housing through low-carbon combined heat and power plants. The bank could have been that bridge.
We looked at how the process of privatisation was very disrupted and took longer than we expected, and we are concerned the Green Investment Group is investing in less risky projects. Of the four projects it has financed since privatisation, one is in Ireland, one is offshore wind in Sweden, one is in India and, of course, one is in Wakefield, West Yorkshire, for which I can claim absolutely no credit—obviously it was an excellent decision.
The Committee has an anxiety about where the Green Investment Group is going to go and whether it will focus on easier-to-finance, safer and less risky overseas projects now it is part of an international bank and lose its focus on green investment in the UK. It would be a tragedy if it does that.
The Minister for Energy and Clean Growth (Claire Perry)
I did not intend to ask the hon. Lady a question, but this gives me an opportunity to thank her and the Committee most sincerely for an excellent report. Again, I salute her leadership in this area.
Does the hon. Lady agree that the fact we still have a very substantial, multi-billion pound commitment from the Green Investment Group to invest in exactly the sorts of low-carbon innovation she and I both want to see is a sign of reassurance that the group will continue to access funds, in this case global funds, to invest in the UK and Europe?
Mary Creagh
I certainly hope that will be the case but, as we mentioned in the report, the Bloomberg figures show there has been a huge collapse in green investment in the UK—it has gone down from about £26 billion to £10 billion. We questioned the Minister on whether things are cheaper, whether there is policy uncertainty and whether there is Brexit uncertainty. I am pleased the Green Investment Group is promising to do that, and we look forward to seeing some of this project pipeline coming through, because we need £22 billion a year. This year we are on £10 billion, so we need to get that ramped up very quickly. I look forward to hearing more about how she will make that happen from a policy point of view.
Geothermal Energy: Clackmannanshire
Claire Perry Excerpts(5 years, 11 months ago)
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The Minister for Energy and Clean Growth (Claire Perry)
What a very lively Adjournment debate. They rarely get as good as this: a seamless team effort from my hon. Friend the Member for Ochil and South Perthshire (Luke Graham) and his colleagues focusing on a particularly fascinating new area of technology. It is a refreshing change to hear Members who are passionate about their Scottish constituencies, and who are prepared to stand up and work with the UK Government rather than just criticise and carp. That sense of working together to deliver this technology is very important.
I am delighted to be able to talk more about the Clackmannanshire geothermal energy project, which, as my hon. Friend rightly set out, looks to use a local resource from the legacy of decades of mining in a way that helps us to meet our renewable energy targets, and create jobs and innovation for the future. My hon. Friend made reference to our renewable energy successes. We are right, collectively across the UK, to be proud of them. Thanks to investment in innovation by UK taxpayers, working together north and south of the border, and east and west we are very much on target to achieve 30% energy supply from renewables by 2020. In fact, it looks as if we will go substantively beyond that. Scotland with its beauty—my hon. Friend alluded to it; his speech was a wonderful travel advert for his constituency—natural geographic advantages and engineering expertise has very much been in the forefront of that.
That brings me to the role of geothermal energy, which is a critical part of the renewable energy resource. It can be used in several ways, for example heat networks. The UK Government have set aside over £300 million to invest in district heat networks over the next few years. They are a really important way of bringing it forward. Deep geothermal power is another opportunity to create heat and generate power, as my hon. Friend the Member for Stirling (Stephen Kerr) discussed.
This is not about finding new resource. The mining legacy has created a lot of holes in the ground beneath our feet, which have filled up with water. The water has become heated and is now available without drilling deep wells. This is relatively easy to set up. I am proud to be working with the Coal Authority and others to consider how we might manage this mining legacy. Across the UK, it has recently been assessed that there are over 2 million GW hours of low-carbon energy stored in mine workings across the UK. I feel strongly that we should be looking at how to extract it.
As I said, there are several ways to use this very valuable resource. We can use it as heat to supply homes and businesses. It can help to deliver the clean growth aspects of our industrial strategy, because it can be used to provide heat to certain business sectors. It can also provide opportunities for energy through regeneration and storage. A lot of work is being done on storage capability. The problem with renewables is that they can be very intermittent. How do we store energy in a liquid state? Deep networks could be a way to help us to lead the world on this going forward. We are looking across the UK to see how we might exploit this great resource.
As my hon. Friend the Member for Ochil and South Perthshire eloquently and passionately set out, we have opportunities in Clackmannanshire to understand how we might use this local resource better. He set out the wider benefits from this potential source: not just lower cost lower carbon energy for his constituents, but creating businesses, creating innovation, creating jobs, reducing energy bills, reducing fuel poverty and reducing social inequalities. It could establish Clackmannanshire as a global authority on geothermal energy, attracting inward investment and innovation from other countries across the world. The Department and I are very keen to see more of such projects coming forward, because they deliver carbon savings, cost reductions and innovation.
We are working on heat networks. As my hon. Friend is well aware, there is a series of competences between the UK Government and the devolved Administration. Heat is a devolved matter, but energy is a reserved matter. There is, therefore, a huge area between the two parts of our government system where we have opportunities to work together on heat projects.
My hon. Friend and his constituency neighbour, my hon. Friend the Member for Stirling, should be patting themselves on the back for securing a city region deal worth more than £90 million to the region. The UK Government are investing more than £45 million, the Scottish Government are investing, the local councils are investing—it is truly a good example of partnership working. [Interruption.] As I said, it is always better when we work together—a message sometimes lost on Scottish National party Members.
This ambitious and innovative deal will drive economic growth across the region, innovation and research with at its heart, and also focus on the area’s incredible natural heritage. I think that we could expand the definition to include the mine workings and geothermal possibilities. That is what the Clackmannanshire geothermal energy project seeks to do, and my Department will absolutely support it, exploring potential funding routes and sharing learning from other networks from across the UK.
We are committed to supporting the project. We see opportunities for high-quality, cost-effective heating, for the creation of renewable energy and for the provision of many other benefits to the area. I am delighted that my hon. Friend has once again raised this opportunity and demonstrated the passion and commitment with which he and his constituents support it. It was encouraging to hear that other local businesses are already coming forward wanting to be part of it.
I hope that this debate can be the start of the process. It has allowed us to look at how we might fit the scheme into the various funding streams available. I would love to think it could be one of the first of many projects across the UK that will tap back into that resource beneath our feet. It is a resource that was created by the blood, sweat and tears of many thousands of fine working men—generally men—in the past, and it would be wonderful to use that legacy to help us to meet the targets of our renewable and low-carbon future.
My hon. Friend says it is a wee county but that it is not size that matters but what you do with it. It is a little late for that kind of commentary, so I will finish simply by commending him for doing such a superb job of standing up for his constituents and presenting the best way of combining the legacy of that wonderful area with some of the low-carbon energy solutions of the future.
Question put and agreed to.
Draft Scotland Act 2016 and Wales Act 2017 (Onshore Petroleum) (Consequential Amendments) Regulations 2018
Claire Perry Excerpts(5 years, 11 months ago)
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The Minister for Energy and Clean Growth (Claire Perry)
I beg to move,
That the Committee has considered the draft Scotland Act 2016 and Wales Act 2017 (Onshore Petroleum) (Consequential Amendments) Regulations 2018.
It is a genuine pleasure to serve under your chairmanship, Sir Henry. The draft regulations, which are part of a series of regulations that we have been bringing forward to fulfil commitments under the Smith and Silk commissions agreements, the Scotland Act 2016 and the Wales Act 2017, provide for the devolution of onshore oil and gas licensing to the Scottish and Welsh Governments.
This debate focuses on the devolution of section 45A of the Petroleum Act 1998 to the Governments of Scotland and Wales. That section provides assurances to the relevant authority that the relevant person will be able to plug and abandon a well or otherwise provide the funds necessary for that to be done. As such, the section is a key part of the licensing regime and needs to be devolved so that Ministers in the devolved Administrations can ensure that all licence obligations can be met as appropriate when wells are decommissioned.
When they have been fully commenced, the Scotland Act 2016 and the Wales Act 2017 will transfer legislative competence for onshore petroleum to the Scottish and Welsh Governments, with the exception of matters relating to the setting and collecting of licence rentals. The Acts also include provisions for Scottish and Welsh Ministers to exercise powers currently held by the Secretary of State or the Oil and Gas Authority in relation to onshore licensing in Scotland and Wales.
In February, we commenced sections 47 and 48 of the Scotland Act 2016, which transferred the existing UK onshore licensing regime as it applied in Scotland to Scottish Ministers. That provided Scottish Ministers with powers to administer the existing onshore oil and gas licensing regime in Scotland and to create a bespoke licensing regime if they wish. We have laid two statutory instruments to implement the relevant powers in the Scotland Act—affirmative regulations to make consequential amendments to taxation legislation, and negative regulations to make consequential amendments to the licensing regime.
Welsh Ministers and the Secretary of State for Wales have agreed that provisions that enable Welsh Ministers to administer the existing onshore oil and gas licensing regime in Wales, or to create a bespoke regime if they desire, will commence on 1 October. We intend to lay the negative regulations necessary to deliver that in early September.
I turn to the detail of these affirmative regulations. As I said, the draft SI will make amendments to section 45A of the Petroleum Act 1998 consequential to the devolution of onshore petroleum licensing functions to Scottish Ministers under section 48 of the Scotland Act 2016, and to Welsh Ministers under section 23 of the Wales Act 2017. We are debating not the ins and outs of onshore shale gas extraction, for example, but simply a set of consequential amendments to Acts of Parliament that we have already consulted on and passed. Those consequential amendments reflect the role of Scottish Ministers as the licensing authority in Scotland, and allow the licensing regime to work as intended in relation to onshore areas in Scotland. They also provide for the position both before and after commencement of the Wales Act 2017, which makes equivalent provision for devolution of onshore oil and gas licensing to Wales.
As I set out, section 45A gives the relevant authority the power to issue a notice requiring a responsible person, once they have begun drilling a well, to provide information regarding their financial affairs. If the relevant authority is not satisfied with the financial information that is submitted, section 45A allows it to issue a notice requiring the relevant person to take the action set out in the notice. Such a notice may include, for example, a requirement to provide security to the relevant authority to ensure that the costs of plugging and abandoning the well are covered. Although that power has not to date been used onshore, we consider that it can apply onshore and therefore that section 45A forms part of the regime that should be transferred. We intend to transfer the section 45A powers to Ministers in Scotland and Wales for their respective territories, using powers to make consequential amendments under the aforesaid Scotland Act and Wales Act.
There might be a question about timing. This affirmative SI could be laid in Parliament only after the Wales Bill received Royal Assent in January 2017, as it makes amendments that anticipate amendments made by the Wales Act 2017. A negative SI will follow these affirmative regulations to make consequential amendments to the onshore licensing regime in Wales.
Transferring powers from the UK Administration to a devolved Administration does not count as a regulatory provision, and therefore—in case hon. Members are wondering—there is no requirement for a regulatory impact assessment. Also, as these are consequential amendments to the Scotland Act and the Wales Act, which were consulted on separately, no specific consultation is required on these technical amendments.
The regulations are part of the transfer of competencies for onshore oil and gas resources to the devolved Administrations, complementing the provisions of the Scotland Act and the Wales Act. They simply make minor amendments to legislation governing the oil and gas licensing regime to ensure that there is a smooth devolution of powers for licensing. They are an important step towards delivering a recommendation of the Smith and Silk commissions agreements.
Claire Perry
As always, we have managed to have an interesting canter even through what looks like the driest of technical amendments. I want to try to answer some of the questions. I also thank Committee members for their support.
The hon. Member for Southampton, Test asked when the transfer to Welsh Ministers will be complete. That was a point of negotiation and agreement. The Wales Act 2017 provisions will commence on 1 October 2018. He asked if this was the final brick in the wall of the legislation; it is the last piece for Scotland, but there will be one additional statutory instrument for Wales.
Dr Whitehead
I am sorry, but I thought the Minister was finishing her comments about bringing together the various pieces of secondary legislation relating to Wales with the commencement of the Act, but I assume she has something to say about an additional negative instrument that is to come.
Claire Perry
I am happy to clarify. The Wales Act 2017 provisions overall commence on 1 October 2018. I have been informed that there is one additional statutory instrument for Wales. I assume we will have to detain our colleagues one more time to ensure we have all the relevant pieces of legislation in order for the Wales Act to commence. I am looking forward to a final conversation about that. Clearly, it is right to ensure that we have the correct licensing provision flowing to the devolved Administrations, to fulfil the commitments made with our various commissions.
The hon. Gentleman asked a series of questions about what was on and offshore. I am happy to write to him to clarify further. I am told that the Territorial Sea Act sets baselines and that within 12 nautical miles is regarded as onshore.[Official Report, 19 June 2018, Vol. 643,c. 1MC.] Outside that is territorial sea. We are transferring functions only in the onshore areas. He will ask what happens if there is a field that straddles both; I assume that there will be joint responsibility. We may have to debate that at a later date. If he is not satisfied with that answer, I am happy to go away and see if there is more information that I might be able to give him.
I cannot read what has been passed to me by my officials, so we will have to leave it there, unless the hon. Gentleman has any further questions. If not, I commend the regulations to the Committee.
Question put and agreed to.
Marks & Spencer
Claire Perry Excerpts(5 years, 11 months ago)
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Dr Lisa Cameron (East Kilbride, Strathaven and Lesmahagow) (SNP)
(Urgent Question): To ask the Secretary of State for Business, Energy and Industrial Strategy if he will make a statement on the implications of the decision of Marks & Spencer to close 14 branches across the United Kingdom.
The Minister for Energy and Clean Growth (Claire Perry)
I welcome the chance to address the House on this matter. I pay tribute to the hon. Lady for her chairmanship of the all-party group on textile and fashion, and I commiserate with her on the fact that one of the stores that will be closing is in her constituency.
Who among us is not touched by the hand of M&S? I counted up this morning, and I am in fact wearing three items of M&S clothing—I will not declare what they are. Indeed, my breakfast this morning entirely comprised items bought at the Gatwick M&S after a late-night flight. By the way, I defy anyone in the House not to say that they have at least one item of clothing in their wardrobe from that fine retailer. This is, however, a worrying time.
As the hon. Lady said, Marks & Spencer made an announcement on Tuesday about 14 of its UK stores. This is part of a well-advertised plan to reshape its estates and, essentially, to reshape its stores to compete, given the very big challenges of many online retailers in the country. Five of the stores will close this year or early next year, and all colleagues at those locations will be offered redeployment to other stores. Nine other stores have been proposed for closure, and Marks & Spencer has entered a period of consultation on the redeployment of staff in those stores. All of us will of course recognise that this is a worrying time for the over 600 staff members currently going through that process. I know that there will be concern among Members on both sides of the House about this issue. The Government—the Department for Work and Pensions and Jobcentre Plus—will of course stand by, should support be required, to work with the company.
There have been a number of announcements in the retail sector recently—negative and also positive in terms of job creation. We should all recognise the incredible contribution of this sector to the UK economy—it was almost £95 billion in 2016—and this Government’s ongoing support for the sector. We have announced measures worth more than £2 billion over the next five years to cut business rates, with a positive change to the indexation of business rates.
Only this March, the Under-Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend the Member for Burton (Andrew Griffiths), set up the Retail Sector Council, which is determined to drive up this sector’s productivity and ensure that it is fit to face future challenges. Sitting on the sector council are retailers—large and small; online and offline; in town and out of town—and the unions are of course very much a part of that process. The object of the council is for the Government and industry to work together to drive up productivity, and also to secure our fantastic retail sector’s future health and direction. We are working together on the requirements to make sure that productivity and economic growth in this sector can continue for many years to come.
Mr Speaker
I must just say—I probably do not have to, but I will do so anyway—that I share the Minister’s enthusiasm for Marks & Spencer, which is a most admirable institution. What she said about almost every Member having an item or more from Marks is incontrovertible.
Dr Cameron
I thank the Minister for her response.
Over the past few years, there has been a cascade of commercial announcements from well-known companies saying that iconic retail high street stores need to close if they are to cut costs: British Home Stores, Mothercare, Toys R Us, the Royal Bank of Scotland and now Marks & Spencer. As chair of the all-party group on textile and fashion, I know that the market is changing, but retail companies need to strike a balance between remaining competitive and understanding the wider implications of closing landmark stores. Marks & Spencer’s proposed store closures—14 imminently, and more than 100 in the next few years—will not only result in thousands of potential job losses, but could devastate our local town centres. It is well known that when anchor stores close, the surrounding subsidiary stores feel the impact of reduced footfall, meaning that many close as well.
Are our high streets to become ghost towns? My constituency has already felt the effects of BHS closures, and we expect to lose 67 jobs if the Marks & Spencer closes. Has the Department made any assessment of the impact of the proposed closures on local economies in Scotland and across the UK? What is the impact on disabled people who find it difficult to travel to outskirt retail parks to shop? Since the report by Mary Portas on saving the high street that the Government commissioned in 2011, how many of its recommendations have been implemented? Finally, will the Minister agree to meet jointly with the all-party group, MPs affected and representatives from Marks & Spencer to facilitate further consultation on these proposals, and to consider desperately needed plans to save our high streets?
Claire Perry
The hon. Lady raises some valid points—there is an M&S food shop in my Devizes constituency—and is right that attractive stores bring in footfall from which subsidiary stores benefit. Of course, the Government have taken forward many plans to support the high street, which is part of the reason for the rate changes. Local councils, which might be responsible for setting parking policy, rely on parking receipts to fund other transport services, but if those rates are remitted straight back to Westminster, their desire to create a more attractive parking and retail culture might be diminished, which is why it is important that our rate localisation policy proceeds. I hope that the Scottish National party will support it.
The hon. Lady asked whether an assessment had been made. There are ongoing assessments. The Under-Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend the Member for Burton, who sends his apologies for not being present, would be the person to take that meeting. I would not like to speak on behalf of his diary, but I shall make sure that the hon. Lady’s representations are put to him. He is working tirelessly on this issue across Government even while our retail sector continues to thrive and grow. As she will know from her work on the all-party group, there have been several important announcements in the last few weeks: Amazon has announced the creation of 400 jobs; Lidl has announced the creation of 40 new stores; and ASOS, an amazing online store employing thousands of people in call centre and support capacities, has seen its sales grow by 30% this year—it is becoming a truly global brand.
There is definitely a rotation in the way in which we all shop. I am sure that we all now buy many more of our unmentionable items online—sometimes we even buy them in stores—but the hon. Lady makes some valid points. We should all think hard about what we can do as individuals, particularly to support our local authorities, which are often responsible for planning, decision making, rates setting and parking decisions, all of which can have a material impact on the high street experience.
I will take away the hon. Lady’s request and make sure that my hon. Friend the Under-Secretary responds to her. I assure her that the reason for setting up the Retail Sector Council—it includes all sorts of retailers, from farm shops to large online companies, and of course the vital Union of Shop, Distributive and Allied Workers, which is providing so much support to workers in the industry—is to make sure that these conversations can be had on a cross-Government basis, and that policy making can be joined-up.
Mr Peter Bone (Wellingborough) (Con)
I must declare an interest: I am wearing a Marks & Spencer suit, although I do not want to give the House the impression that I am the fashion icon for Marks & Spencer.
Does the Minister agree that it is not all bad? Marks & Spencer has opened a massive store at Rushden Lakes in my constituency. It is hugely successful and employs lots of people. The store is a mixture of retail and leisure. It might just be that times are changing and Marks & Spencer is changing with them.
Mr Speaker
In relation to the first part of the hon. Gentleman’s inquiry I say simply this: so am I, and neither do I.
Claire Perry
Perhaps there will be a competition at the end of these proceedings to judge who wears M&S best—I am declining all responsibility for that.
My hon. Friend the Member for Wellingborough (Mr Bone) makes an important point. Companies such as Marks & Spencer, John Lewis and other major retailers have embraced this change and worked out how to be fit for the future. Sadly, in other companies—BHS, for example—the corporate management and the level of responsibility that were taken did not prepare the chain adequately for that change, meaning that many jobs were lost. Addressing that is partly the responsibility of the Retail Sector Council.
I appreciate that changes to jobs can be worrying for the more than 600 staff involved, but it is great that one of our iconic British retail chains is prepared to embrace the future, invest, and ensure that it can continue selling us the things that all of us—old and young—would like to buy. I will declare a final interest: I have about 12 Marks & Spencer jackets. They are the perfect combination of cheap and bright, meaning that I could catch your eye, Mr Speaker, when I was standing on the Back Benches.
Bill Esterson (Sefton Central) (Lab)
My suit is from an independent retailer in my constituency, not from M&S.
The Press Association reported last month that 21,000 retail jobs were at risk in the first three months of the year, with administrations at Maplin and Toys R Us, and store closures at New Look, House of Fraser and Carpetright. We now learn that M&S is to close 14 branches this year, and 100 stores by 2022. As we express our fond memories of M&S, may we remember that 872 members of staff will lose their jobs? We need some sobriety in the proceedings here.
High street retailers struggle to compete against out-of-town and online shopping, given their lower cost base, and that is not helped by the long-term squeeze on incomes under this Government. The Government have their much-trumpeted industrial strategy, but where is the retail sector deal? How do they propose to help the affected communities and high streets? The Government must go much further on business rates because the changes simply have not cut through to make the difference needed by high street retailers. What conversations have the Minister and her colleagues had this year with trade unions that represent retail workers?
Unless the Government are prepared to step in to secure a level playing field between our high streets, and online and out-of-town retailers, more shops will close, more high streets will lose key big-name brands, more communities will lose out, and more workers will lose their jobs. The Marks & Spencer closures show that leaving market forces to their own devices is simply not working, and the Government must ensure that there is a fair market in retail for the good of businesses, workers, communities and our high streets.
Claire Perry
The hon. Gentleman and I are in violent agreement. That is why the establishment of the Retail Sector Council, which absolutely involves store worker representatives, is vital. A series of financial measures has been taken forward. The Government have given almost £20 million to towns funding initiatives such as the Great British High Street. We have established the Future High Streets Forum, which is chaired by the Under-Secretary of State for Housing, Communities and Local Government, my hon. Friend Member for Rossendale and Darwen (Jake Berry), and that also involves retailers. More than £2 billion of measures were introduced in the autumn Budget to cut business rates, including the 100% small business rate relief that is so vital to independent retailers.
Claire Perry
The hon. Gentleman says that, but he bought his suit from an independent retailer, which will no doubt have benefited from that—[Interruption.] He should have bought more suits there, Mr Speaker.
One point that has not been raised is that there is an unfairness in the current structure of online and offline retailing because of the way in which retailers pay VAT. That is an issue for us all, and it is why online prices can be much lower. We are therefore bringing forward a review into the wider taxation of the digital economy to ensure that international corporation tax rules are fair, and that sellers that operate across online and offline marketplaces pay an appropriate amount of value added tax.
Sir Geoffrey Clifton-Brown (The Cotswolds) (Con)
I assure my right hon. Friend that she is indeed a fashion icon in her M&S outfits.
This sad announcement by M&S, particularly for the people who work there, puts further pressure on our high streets, on top of the correct announcement on betting regulations and the trend towards online shopping. Will my right hon. Friend redouble her efforts, and that of her Department, to ensure the vitality and diversity of our high streets up and down the land?
Claire Perry
Most assuredly. Working with high streets in my constituency, as I am sure many right hon. and hon. Members do, I know there is a huge power in having a vibrant high street sector with lots of shops and big anchor tenants, and perhaps also, as a way of driving footfall, shops where people pick up their online packages. Our high streets are part of our incredibly vibrant history. Many of us represent small market towns where the high street is a hugely important part of the local economy. Let us not forget that they employ hundreds of thousands of people right across the country.
John Mc Nally (Falkirk) (SNP)
All this is terrible news for our local retailers and for businesses on our local high streets. We have lost a staggering number of businesses over the past two or three years. It is terrible news for the employees and their families, and for our local economy. In my constituency, we will lose about 90 employees, which will have a devastating impact. Is it due to a combination of the Government’s austerity and the clicks versus bricks regarding VAT rates, which we have just spoken about? I know that the Government were planning a consultation on VAT. Will the Minister update us on where we are with that consultation? Is there any possibility, as I asked the Chancellor some time ago, of reducing VAT for our high streets to give local shops and high street retailers a fighting chance against online retailers?
Claire Perry
The hon. Gentleman anticipates the review I hope we can all support. I will ensure that my hon. Friends in the Treasury bring it forward as soon as possible. I do have to push back slightly. The hon. Gentleman is right and wrong. He is right that we are buying less stuff. In fact, there is the phrase “peak stuff”, which suggests that the younger folks among us no longer go shopping for pleasure, but prefer to do other things with their time—mostly involving their phones, as best I can tell from my own kids. There is the view that the acquisition of products and services is on the decline globally. I believe the vacancy rate for shops in great cities such as New York is now in double digit figures, which is very surprising and reflects a global trend.
We should welcome the fact that in this country real wages are now going up and increasing ahead of inflation. People are getting more money in their pockets. The Government’s actions in cutting taxes by over £1,000 for over 3 million people and in continuing to invest in high streets, allowing both money and choice, has meant that spending has held up reasonably well—in particular, since the Brexit referendum, which was supposed to deliver the death knell to shopping in this country. That has not happened. We are seeing a change in the way people spend, but it is vital we recognise the importance of this sector as part of our industrial strategy going forward. Industrial strategy, by the way, does not just mean smokestack industries. It means retail industries and creative industries—[Interruption.] The hon. Member for Sefton Central (Bill Esterson) should welcome the fact that we have a sector council up and running and should look closely at the steps it suggests the Government need to take.
Andrew Jones (Harrogate and Knaresborough) (Con)
I speak as a former Marks & Spencer supplier and current Marks & Spencer customer. The hon. Member for East Kilbride, Strathaven and Lesmahagow (Dr Cameron) highlighted the importance of an anchor store to a town’s retail offer and the social importance of the high street. I entirely agreed with her question. Will my right hon. Friend remain vigilant on, or at least sensitive to, the impact of business rates for physical retailers as compared to internet retailers? Will she monitor that carefully, because we want to ensure a level playing field for the social benefit we have been talking about?
Claire Perry
I agree entirely with my hon. Friend. We have tolerated that difference for too long. It is right to have a fair allocation of VAT between both channels.
Clive Efford (Eltham) (Lab)
It cannot be fair for our high street retailers to have to compete with online companies that offshore themselves for tax purposes and often use the most exploitative employment practices, such as minimum hours contracts. The Government have to act more urgently to deal with this problem. Does the Minister really think that if an employee loses their job at Marks & Spencer and goes to work for a company like Amazon, they will be given the same rate of pay?
Claire Perry
The hon. Gentleman flags up the reason that the Government commissioned the Taylor review on the future of good work: clearly, the workplace is changing. The expectation, and it has been pleasing to hear Marks & Spencer talk about this, is that it will do everything it can to redeploy its workforce, particularly into stores nearby that might be transitioning to food. I have been very struck on my forays into M&S by its incredible investment in its workforce—its commitment to increasing diversity and to providing good jobs over the long term—and we must all work to make sure that those jobs continue.
Colin Clark (Gordon) (Con)
I declare an interest as a former supplier to Marks & Spencer, and I am still involved in—but not paid by—the company that supplies Marks & Spencer. It is one of the most innovative retailers. It trains its staff, as other people have mentioned, and is a huge supporter of the British food industry. However, north-eastern Scotland has had to withstand 50% of the business rates increase, so I ask the Minister— [Interruption.] I ask her whether that increase in business rates can be justified and to be very conscious that business rates are damaging the high street, particularly as we are seeing in Scotland—[Interruption.]
Claire Perry
Mr Speaker, you can tell by the vigorous debate on this point the importance of having local government and national Government—[Interruption.]
Mr Speaker
Order. There are very unseemly exchanges between Scottish National party Members and Government Back Benchers. All should be united in wanting to listen to the reply from the Minister of State.
Claire Perry
This vigorous exchange points to the responsibility that we all bear—Westminster, national and local governments—for supporting our high streets and not using short-term measures, particularly tax-raising measures, that might further drive out the precious high street stores that we are all so interested in protecting.
Paula Sherriff (Dewsbury) (Lab)
Will the Minister tell us whether the closures will affect any Marks & Spencer hospital branches? If she is meeting the company, will she raise the scandal of the higher prices in these shops than in high street shops? When I met the company over two years ago, it flatly refused to match the promise of WHSmith by ending premium prices in hospitals. I hope that the Minister agrees that this is absolutely exploitative and must stop.
Claire Perry
The hon. Lady raises a fantastic point. We were all so shocked to see that practice; it seemed to be a terrible example of predatory pricing. My understanding is that no hospital shops are closing, but I will certainly ensure that the issue is raised by the Under-Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend the Member for Burton. This practice must end.
Mark Pawsey (Rugby) (Con)
Regrettably, Marks & Spencer chose to leave Rugby town centre a couple of years ago, but the good news is that it relocated to a much larger edge-of-town site at Elliot’s Field and is able to offer a much more extensive range. Does the Minister agree that this announcement means that it is important for retailers to work with developers and local authorities to continue to enhance and improve the retail experience?
Claire Perry
I absolutely do. The work that so many do on an unsung basis in our neighbourhood planning process should take into account these issues: how do we create vibrant centres where people want to live, work and travel to, and which mean we have a very vibrant high street sector? If you will indulge me for one minute, Mr Speaker, Marks & Spencer has been a leading company in its drive for zero-emissions activity. It was one of the first companies in the sector to set up such a plan. It has done amazing work with its supply chain and stores to reduce carbon emissions and sell sustainable products. I really do applaud it for that.
Tom Brake (Carshalton and Wallington) (LD)
This is a very worrying time for Marks & Spencer’s employees. I was therefore very pleased to be able to support my excellent store in Sutton by buying this suit there a month or so ago. While I agree with the Minister that people’s purchasing habits are changing, does she agree that inevitably, the report from Mark Carney that household incomes are now £900 lower than had been predicted before the EU referendum will have had an impact on Marks & Spencer? Does she also agree that if “max fac” is introduced, a £32.50 charge for every shipment, given that Marks & Spencer operates in 23 out of 28 EU countries, will also have a significant impact on it and the retail business generally?
Claire Perry
I am not going to comment on hypotheticals, both pre and post Brexit, in terms of the impact on the economy. However, the right hon. Gentleman points out the absolute requirement both to satisfy the referendum result, in terms of leaving the European Union, and to ensure that we have as close and as frictionless a trading relationship as possible, so that we do not see food prices or the prices of goods and services going up for these very integrated operators in the UK.
Luke Graham (Ochil and South Perthshire) (Con)
I commend the hon. Member for East Kilbride, Strathaven and Lesmahagow (Dr Cameron) for raising the issue of accessibility to the high street. I have witnessed the closure of shops in the high streets in my constituency and the movement away from high streets towards out-of-town parks, and I think we should try to stop that.
Companies in my constituency are paying some of the highest business rates in Europe, and, obviously, Scotland’s business growth is below that of the rest of the United Kingdom. May I ask the Minister to work with me and with other colleagues—on a cross-party basis, if needs be—and with the devolved Administrations to increase business growth in Scotland, so that we can at least match the rest of the United Kingdom?
Claire Perry
Absolutely.
My hon. Friend referred to disability access, and I think we still need to do more about that. We must bear in mind that it is not enough for companies simply to relocate out of town if people need cars or some other form of transport to get there.
Nick Smith (Blaenau Gwent) (Lab)
High streets throughout the country will be the poorer for this decision. Retail closures are coming thick and fast now. May I press the Minister on one point? When will we see a change in VAT rules that will help our local shops?
Claire Perry
As my hon. Friend—for he is a friend—knows, it is an unwise Minister who pre-empts a Treasury announcement, so I will not be tempted. But I think that we should focus on the fact that through such actions we can end up with a thriving great British company that is able to compete in the 21st century and to maintain its stores. We have seen too many great British names go under, partly because their managements did not make the right decisions and did not think enough about their staff in the long term.
Paul Masterton (East Renfrewshire) (Con)
I thank my hon. Friend and constituency neighbour the Member for East Kilbride, Strathaven and Lesmahagow (Dr Cameron) for securing the urgent question. The closure of the store in East Kilbride will also affect communities in my constituency such as Waterfoot and Eaglesham, where some of its staff live.
One of the problems with high street policy is that it involves a complicated mix of local government, devolved government and Westminster government, with often competing priorities. Will the industrial strategy present an opportunity for some combined thinking, so that we can develop good national policies that will ensure that our high streets can thrive?
Claire Perry
My hon. Friend has made clear exactly why the industrial strategy—which, as I have said, sounds a bit “smokestacky”—is actually focused on industries such as retail and hospitality, in which we know we must increase productivity and in which so many hundreds of thousands of staff, many of them women, are employed. That is why the sector council was set up. It has existed for only six weeks, but it has already had several very productive sessions. Ultimately, this is why the move to local industrial strategies, working with local enterprise partnerships and devolved Administrations—[Interruption.] Goodness me. Members are very shouty across the Chamber today. We have already had a discussion about politeness.
Mr Speaker
As I said a few moments ago, there is too much shouting between Conservative Back Benchers and members of the Scottish National party. The Minister must be heard. If Members want to squabble, they should not squabble when a Minister, a shadow Minister or anyone else is on his or her feet. Let us hear the answers.
Claire Perry
Thank you, Mr Speaker. I will endeavour to be brief.
It is vital for us to develop the national industrial strategy and to make it local, ensuring that mayors, devolved Administrations, local councils and local enterprise partnerships are involved in these decisions.
Gerald Jones (Merthyr Tydfil and Rhymney) (Lab)
As we know, the retail sector predominantly employs women. What can the Government do to support them during this process and to ensure that they are not disproportionately affected by the closures?
Claire Perry
The hon. Gentleman is right—retail is very much a female employment sector, often because women are working part time—but he and I should celebrate the fact that there are more women in work than at any time since records began and that the gender pay gap is at its lowest-ever level.
Nigel Huddleston (Mid Worcestershire) (Con)
The hon. Member for East Kilbride, Strathaven and Lesmahagow (Dr Cameron) made some very valid points, but let us be clear about one thing: M&S is changing its business model in response to changing customer needs, behaviour and desires, and it has survived since 1884 precisely because it continues to do that. Revenues are up—let us not paint a picture of gloom and doom—but profits are challenged, so what is happening is perfectly fair and reasonable. Does the Minister agree that we must ensure that there is a level playing field between online and offline on the high street?
Graham P. Jones (Hyndburn) (Lab)
Does the Minister—for whom I have the greatest respect—accept that small towns have been hardest hit by these and previous closures and that central and local government policy is partly responsible? In Accrington, for example, hundreds of jobs have been lost, either as a result of council redundancies or because the Government have relocated public services to bigger towns or cities. Hundreds of well-paid workers have been taken out of town centres, and that has affected retailers such as Marks & Spencer.
Claire Perry
Our two constituencies share similar characteristics. There is a very complex mix. People’s working and commuting patterns are changing, and their mobility is different. The hon. Gentleman has his brand-new trains coming, which might encourage more people to out-commute from the market towns. There is a complex series of problems, and they cannot all be solved in Westminster; they need national Governments, local governments, local economic partnerships and industry working together, and the great thing about the industrial strategy is that it is the first time that I can remember that industry and the Government have sat down and defined what they need to do to drive up their productivity, to make sure there are good jobs in these sectors, both in central towns and smaller towns for the future.
Tom Pursglove (Corby) (Con)
Does my right hon. Friend agree that, in the internet age, car parking charges in town centres make it more difficult for retailers both large and small and that local authorities might wish to reconsider them?
Claire Perry
As my hon. Friend knows, that is a difficult issue because local authorities rely on that revenue stream to fund other services, including buses in my constituency, and that is why the localisation of the rates, allowing local authorities to have more revenue from driving up activity in the high street and therefore rates revenue from the high streets, cannot come soon enough.
Jim Shannon (Strangford) (DUP)
I thank the Minister for her response to the urgent question. What consideration has been given to possible management and staff takeovers—such as by establishing co-operatives—of individual shops marked for closure? What discussions has the Minister had with Marks & Sparks in relation to that, and what help can the Minister and the Government give to help that happen?
Claire Perry
There has been close contact with Marks & Spencer at Government level to understand what is happening. There is also now a period of serious consultation between the company, unions and staff affected in those stores to make sure there is the best possible outcome for all.
Mr Philip Hollobone (Kettering) (Con)
Kettering’s Marks & Spencer shop is one of the 14 whose closure has been announced, and this is very bad news for local shoppers in Kettering who use the store and in particular for the 58 employees. The decision is even more bemusing given that Kettering sits in one of the fastest growing areas in the UK, with new houses going up all the time and the population increasing at a rapid rate. Will the Minister ensure that large retailers like Marks & Spencer are fully apprised of housing growth plans, because they might be making their decisions on incorrect information?
Claire Perry
My hon. Friend makes an important point and I will certainly make sure the Department ensures those pieces of information are shared, and of course a consultation is now under way—that was announced yesterday—with the stores affected and there might be new pieces of information that have not been thought about that should be used.
Draft Offshore Combustion Installations (Pollution Prevention And Control) (Amendment) Regulations 2018
Claire Perry Excerpts(5 years, 11 months ago)
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The Minister for Energy and Clean Growth (Claire Perry)
I beg to move,
That the Committee has considered the draft Offshore Combustion Installations (Pollution Prevention and Control) (Amendment) Regulations 2018.
It is a pleasure to serve under your chairmanship, Mr Sharma. It is nice to see so many familiar faces on both sides of the Committee as we return once again to the superb regulatory structure that gives us one of the safest offshore drilling regimes in the world. These regulations, which I shall refer to as the 2018 regulations, will provide our Offshore Petroleum Regulator for Environment and Decommissioning—OPRED—with powers to impose emissions monitoring and reporting controls on specific atmospheric pollutants from certain types of combustion plant on offshore installations. We touched on this subject in a debate last week, and I again place on the record my thanks to and admiration for the team at OPRED, who carry out a superb job and often in very difficult circumstances.
The 2018 regulations are needed to control and reduce emissions of air pollutants that are harmful to the environment and human health, and to implement two EU directives. Without the powers to control and monitor those air pollutants at individual plant level, it is difficult to quantify the pollutants that arise from individual large and medium-sized combustion plant and to ensure compliance.
The existing regulations, which date from 2013 and implement the provisions of chapters I, II and VII of the industrial emissions directive, are enforced through a permit. The permit conditions place controls on specified atmospheric emissions from combustion plant, such as gas turbines and engines, on offshore facilities that alone or when aggregated together have a thermal rated input equal to or greater than 50 MW. At the time when that directive was being implemented, there were no offshore facilities with qualifying large combustion plant and none was foreseen, so the obligations relating to that size of plant in chapter III were not transposed. However, there are now two offshore facilities that would fall within scope, and these regulations—this is why we are all gathered here on such a sunny day—will transpose those requirements in order to ensure that that large plant is captured.
The obligations under the medium combustion plant directive—it gets better—mean that we also need to extend our regime to medium-sized combustion plant, such as boilers, heaters and dual-fuel engines. I point out, because I know that the hon. Member for Southampton, Test will ask me, that 12 offshore installations will be captured by the new requirements.
Therefore, to transpose both directives, there will be new requirements to control, monitor and annually report data on the specified emissions from large boilers, heaters and diesel engines and from medium-sized boilers, heaters and dual-fuel engines. Carbon monoxide emissions will also have to be monitored, but not controlled.
Existing permits issued under the 2013 regulations will be revised and, where necessary, new ones will be issued. The 2018 regulations will also extend the provisions in the 2013 regulations on OPRED’s inspection plans and ensure that inspection reports are made publicly available. That will mean affected operators’ permits being amended to encompass the new requirements, and that of course will avoid the issuing and holding of multiple permits that fulfil similar obligations under both directives.
The broadening of the regulations does not—to be clear—remove any existing requirements. It brings into scope plant that was out of scope under the previous regulations, given its size. As always, we conducted a four-week public consultation last year. There were eight responses seeking clarifications of concerns. The Government’s response addressed these comments and we agreed to publish an updated guidance note to support operators’ compliance with these new regulations.
There was, however, one substantive issue regarding provisions in regulation 15, which allows emissions limit values to be placed within a permit to control the level of pollutants emitted into the atmosphere. There was a concern that by restricting the level of pollutants emanating from this plant, there may be an impact on hydrocarbon exploitation and production. In some cases, the pollutants may not be fully controllable because of limitations on space—plants were designed a long time ago—and space on offshore facilities is at a premium and is intrinsically linked to safe production.
We took account of those industry concerns by making it clear that we will work with operators to implement these regulations in line with the specifications. This may result in some periods of non-compliance for qualifying plants, where those plants are determined to be safety and environmentally critical elements. This is intended to avoid those offshore installations entering early cessation of production, making sure we maintain the security of our energy supplies and maximise the economic opportunity for the recovery of hydrocarbons.
In summary, the objective of the 2018 PPC regulations is to control atmospheric emissions from offshore combustion plant—which we would all like—which are both harmful to the environment and human health, in line with the EU directive requirements, effectively capturing as in scope those plants that were outside scope when the original directive was laid. This will be achieved through permits for qualifying combustion plant, conducting offshore inspections and investigation of breaches, and the use of enforcement notices to instruct operators to take action to address those breaches within specified timescales. I commend the regulations to the Committee.
Dr Whitehead
It really did sound quite interesting as a result. I say that because these are particularly dense regulations—dense in the sense of close-packed. Essentially, as the Minister has said, they are the process of transposing European directives into UK legislation, which I notice that we were supposed to have done under the directives by 19 December 2017. We are a little behind time and, should we get an extension of our leaving point of Brexit, issues could arise from that.
Claire Perry
I am always amazed by the hon. Gentleman’s ability to get Brexit into every conversation and I take the chastisement. Of course, we would not want to detain the Committee any further by delaying these regulations today.
Dr Whitehead
That is absolutely right. Let me make it clear that it is right and proper that we transpose the directives in the way the Minister has described, particularly in terms of the newer circumstances now in place offshore, which were not the case in 2013 when the original regulations came into place.
We have no issues with the process being undertaken. It seems to be a thoroughly sensible and well worked-out process. I am glad it now covers the installations operating in the North sea in the way the Minister has described. Indeed, she mentioned the two larger offshore plants—over 50 MW—and the existing 13 smaller offshore plants that will be covered by the transposition of the medium combustion plant directive.
I would like some brief clarification on a few points relating to those plants and how the regulations apply to them. First, the regulations include a phased implementation for both the IED and MCPD requirements on the point at which plants will not be deemed to be compliant and could be chased for enforcement on not being compliant. The regulations state that existing plants with a thermal input of greater than 5 MW will require a permit from 1 January 2024 and those with a thermal input of greater than 1 MW but equal to or less than 5 MW will require a permit from 1 January 2029.
I have two observations about that transposition. In fact, that grace period—as it were—before compliance is deemed to be necessary is not a transposition but a choice we have made in UK legislation. Strictly speaking, it does not relate to those two directives, and the ranges for the permits are different from those covered by the directives. The IED covers plants of over 50 MW and the MCPD covers plants of 1 MW to 50 MW. We therefore now have a different compliance regime here from that in the two directives. The question is, therefore, which side of our compliance line do the plants that we have mentioned—the 13 covered by the MCPD and the two by the IED—fall? For example, are all the plants listed as being covered by the MCPD under 5 MW? If so, they will have a long period before they require a permit. If they are mostly above 5 MW, the period for them is the same as for those covered by the IED.
The date of 1 January 2029 sounds like a very long way away and a long grace period as far as compliance is concerned. Can the Minister give further elucidation on why that period was chosen? If the smaller plants are all more than 5 MW, it may be that it does not cover anything; in which case, it is an academic exercise. That may well not be the case, but we have not had elucidation on that, which would be useful.
Secondly, are all the smaller plants external or internal? They are all present on rigs in one way or another, and clearly the larger plants will all be external, but the smaller plants could be partly or completely internal to the rigs. If that is the case, further safeguards may need to be considered for their operation. The Minister mentioned, for example, that there is no limit on carbon monoxide emissions, which could be relevant should those plants be internal.
Thirdly, to what extent do the draft regulations sit alongside or in any way supersede or otherwise replace the regulations that the Department for Environment, Food and Rural Affairs has made under the IED concerning concentrations of emissions from diesel plant generally? I assume that it is mostly diesel plant on the offshore rigs, and that might well be covered by the DEFRA regulations as well. I am not clear from what we have before us whether there will be any dual or cumulative effect from passing both sets of regulations.
My final question is on penalties. I assume that the penalty regime that we discussed last week is the one that will apply as far as the plants are concerned, but how does it relate to the penalty regime that was in the 2013 regulations? That 2013 penalty regime has been left virtually unamended by the draft regulations before us. If hon. Members refer to the 2013 regulations, they will find little to enlighten them, in as much as the penalty regime relates simply to the maximum penalty provided for in statute, and that appears in principle to have been superseded by the penalties in the regulations that we discussed last week. Will the Minister confirm whether that is the case? Have the regulations from last week in effect produced another layer on the draft regulations before us through assumption of that penalty regime? If not, is there any necessity to look further at what the penalty regime in the 2013 regulations refers to, so that it is fully compliant with what has been put forward in the new regulations before us?
I hope that my bowling this afternoon will have been regarded as fairly easy. I look forward to hearing from the Minister what she has to say about those particular points, with a view to making the draft regulations as good as we can get them.
Claire Perry
Anyone who thinks that the hon. Member for Southampton, Test is not earning his keep only needs to come to one of our many meetings to see an incredible level of scrutiny and questioning. I genuinely welcome that. Once again, he asked very pertinent questions, which certainly keep my officials on their toes. All the questions asked were relevant and important.
I may have to write to the hon. Gentleman with one or two answers, but what I have been able to glean so far is that the DEFRA regulatory regime applies onshore and we are discussing the offshore regime, so there is no transposition of the DEFRA regulations. He made a very good point about the fact that there could be internal plant, which of course might be generating carbon monoxide, and that could be a concern for the health and safety of workers. I believe that both new and existing plant could potentially be inside. Carbon monoxide is monitored, but no limit is set. In effect, I suppose, just as in our homes we would have carbon monoxide alarms to alert us to any sign of danger.
The hon. Gentleman wondered whether all the plants were diesel ones. Certainly some of the larger plants have gas turbines as well—again, a different form of emissions.
The hon. Gentleman asked careful questions about the timings of the introductions. I am assured that the phased timings align with article 5 of the medium combustion plant directive, but I shall ensure that the questions he asked about grace periods are properly answered after the debate. As I said at the start of the Committee, there was a realisation that some safety-critical equipment might be non-compliant for a time and be given a grace period to adjust. I shall take the grace period questions away and ensure that we write to him properly.
As always, I appreciate the scrutiny, as I think we all do. We make better legislation through doing it together, and the draft regulations are sensible. The hon. Gentleman also asked about the penalty regime. I wonder why we did not debate the statutory instruments together, which is a lesson for me to take to the parliamentary unit, because although they might be separate pieces of legislation they are in effect part of the OPRED arsenal of regulations. We might have saved right hon. and hon. Members some time.
I believe that the draft regulations are subject to the penalty regime that we referenced in last week’s regulations—the regime that already exists for emissions permits. The regime we debated last week related in essence to spills of oil and chemicals. Any significant breaches of the draft regulations would fall under the existing penalty regime, which is therefore another part of the arsenal.
On that basis, if the hon. Gentleman is content, I hope that the Committee will agree that we have considered the draft regulations.
Question put and agreed to.