Biomass Energy

Debate between David Mowat and Callum McCaig

Wednesday 24th February 2016 Westminster Hall

[Callum McCaig (Aberdeen South) (SNP)]

My understanding of the devolution framework is that when something is within the competence of the UK Government, the Scottish Government are unable to invest in it. There are specific exemptions in the Scotland Bill for topping up benefits, but there is nothing about energy. We are talking in a purely hypothetical way about something that is impossible.

[David Mowat]

rose—

Fuel Poverty

Debate between David Mowat and Callum McCaig

Wednesday 3rd February 2016 Westminster Hall

[Callum McCaig (Aberdeen South) (SNP)]

Thank you, Sir Roger. I am pleased to have the opportunity to speak in this debate and congratulate the hon. Member for St Ives (Derek Thomas) on securing it. We have had an interesting discussion that has taken in both aspects of the issue. First, there is the issue of direct fuel poverty—how we insulate our homes and pay for our bills, and how we can make that better. Secondly, there is the broader issue of poverty—if people cannot afford to pay for anything, fuel poverty is clearly going to happen. I am always somewhat perplexed that we focus our poverty debates not on poverty itself but on specific manifestations of poverty. In this case it is fuel poverty; sometimes it is food poverty or child poverty. The issue is not the individual manifestations but poverty as a whole. Nevertheless, as this is a debate on fuel poverty, I will address my remarks accordingly.

The hon. Member for St Ives gave an excellent speech. The phrase that stood out to me was that it was time to “wage war on fuel poverty”. That is absolutely correct. I was struck by the comment by the hon. Member for Strangford (Jim Shannon) that we need to learn from the different approaches in the UK’s different jurisdictions. I welcome the comments made by the hon. Member for St Ives about the Scottish Government’s projects and how they could be replicated in England to deal with rural constituencies such as his. The situation in Scotland is by no means perfect, and we can learn from others. Debates such as this can help.

The hon. Member for St Ives also mentioned making fuel poverty a national infrastructure priority, which is what the Scottish Government have announced. That could bring jobs and support, along with benefits in terms of climate change, but above all it could ensure that people can live in homes that they can afford to heat. The hon. Member for Stalybridge and Hyde (Jonathan Reynolds) mentioned the lack of political will and how many of the attempts to tackle fuel poverty were being directed at reducing subsidies for renewable energy. That is completely and utterly the wrong way to go about it. The cost of the contributions to renewable energy projects is infinitesimal when compared with fuel poverty. Yes, we should be looking to bring down bills, but a far bigger issue is the failure to pass on savings from wholesale prices, as has been mentioned. We risk throwing the baby out with the bathwater and missing some of our climate change targets, which will not help those in need.

The hon. Member for Congleton (Fiona Bruce) and my hon. Friend the Member for East Kilbride, Strathaven and Lesmahagow (Dr Cameron) both mentioned the scandal of prepayment meters and how those who are in greatest need face the highest bills. I can see no justification for that—I have heard several justifications for it, but none of them cut the mustard. It is unfair and iniquitous and it must stop. There are barriers to switching and it is a trap for people who can least afford to be trapped like that.

A number of Members talked about how fuel poverty is incredibly acute in rural areas. My hon. Friends the Members for Ross, Skye and Lochaber (Ian Blackford) and for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry) mentioned the need for a universal market. In a previous debate, my hon. Friend the Member for Inverness, Nairn, Badenoch and Strathspey secured a commitment from the Minister that she would launch, around the end of last year, a public consultation on the most appropriate level of support for electricity distribution charges in the north of the country. It is clearly now the start of this year, so when will that consultation be coming?

One of fuel poverty’s hardest impacts is its effect on people’s health, education and lives as a whole. The hon. Member for Castle Point (Rebecca Harris) mentioned a GP talking about prescribing insulation—that really stands out as testament to the scale of the problem. We are tackling the symptoms of fuel poverty and paying millions to deal with its manifestations. Investment at source in the form of insulation is money that will pay itself back many, many times in improved health, education and social outcomes, as well as in reduced bills and less need to seek energy from elsewhere.

[David Mowat (Warrington South) (Con)]

I am listening carefully to the hon. Gentleman’s arguments. He will be aware that the country that has reduced fuel poverty the most in the world over the past few years—indeed, it has also reduced carbon emissions—is the United States. That is because gas there is now one third of the price of our gas. Does he think that unconventional oil and gas in our country could make a big contribution to relieving the fuel poverty he is so concerned about?

[Callum McCaig]

I have had several conversations with people in the onshore and offshore oil and gas industries. Because of the nature of the European gas trading market, very few people seem to think that such options would reduce the costs here anywhere near as much as they have in the United States. They are also likely to be less cost-effective, so I do not believe that that is the answer to fuel poverty. It might be an answer to another question, but that is for another time.

Energy Bill [Lords]

Debate between David Mowat and Callum McCaig

Monday 18th January 2016 Commons Chamber

[Callum McCaig]

I disagree. The absence of a strong regulator is where there have been significant problems in the oil and gas industry, in particular with access to infrastructure. The inability to get two parties with competing commercial interests to agree a deal on access to oil and gas infrastructure—a pipeline, for example—has meant that investment decisions have not been implemented. The industry needs a regulator that is hard-touch where required. I very much hope that the threat of sanctions from the OGA will in itself be enough, and that they will not be required. The OGA probably recognises that itself. Issuing sanctions left, right and centre would suggest that its soft skills, its influence and the buy-in the Wood review has brought forward, are not working effectively enough. Where there is no compliance or buy-in to the idea of maximising economic recovery, and where disagreements about access to infrastructure are inhibiting investment, the regulator should go in—and go in hard—to ensure that what everyone is supposed to be working towards is delivered.

[David Mowat (Warrington South) (Con)]

The hon. Gentleman mentions, correctly, the need for a laser-like focus on maximising economic recovery as the objective of the Bill—and goodness knows we need it. Is it therefore his party’s position that the amendment in the House of Lords on carbon capture and storage is not necessary at this point, because it could risk reducing that laser-like focus?

[Callum McCaig]

Yes. I am coming on to that point now. I have spoken about carbon capture and storage many times and I will continue to do so. We fully support that. However, there is a requirement, which the shadow Secretary of State talked about, to have the review and the strategy in place before it can be imposed as one of the principal objectives of the OGA. If we dilute the core functions of the OGA, we distract from that attention. We should remember that the OGA and the Wood review come from a time when oil was over $100 a barrel. Those were the circumstances required to support the industry, which was going through difficult times, at a very high oil price. Those pressures are much higher today. I agree that we need to allow the OGA to bed in. Perhaps in future, once there is a strategy in place and it can be demonstrated that it has the support of the Government from both a financial and a strategic point of view, that might be something we want the OGA to do. At the moment, however, I think that is premature.

As I said, the Wood review comes from a time, two years’ ago, when oil was $110 or $115 a barrel. It is now $29 a barrel. The game has changed significantly. We have to accept that, while this is a vital step in supporting a vital industry, it will not be enough in and of itself. We need fiscal changes to the tax regime, particularly on incentives, and to review the tax level as a whole.

Immediately following the autumn statement, the Oil & Gas UK economics director, Mike Tholan, said:

“Since the last Budget, the oil price has declined further, and we must continue to do as much as we can to help boost confidence and encourage investment in the UK Continental Shelf. If the oil price continues to be lower for longer, there is little doubt that alongside industry’s own concerted effort to improve its efficiency, we will need to work with Treasury on additional measures, including revisiting the current headline tax rate—consistent with the government’s commitment to the sector’s tax rate falling over time.”

--- Later in debate ---

[Callum McCaig]

So we are backing up the cheap renewables with fossil fuels that are not so cheap, and the solution to that is to use the fossil fuels that are not so cheap all the time. That sum does not quite add up. I am not sure that I have worked out the equation.

We have been EVELed out of the changes in the planning regulations, but I would not have opposed them anyway. However, I think that what is good for the goose should be good for the gander, and that the policies should respect the different attitudes that exist in the different nations of the United Kingdom. We in Scotland would like onshore wind generation to continue, and we hope that there will be mechanisms to enable that to happen—which brings me neatly to the idea of a subsidy-free contract-for-difference mechanism that would provide the price stabilisation and allow a route to market for onshore wind, the cheapest form of renewable generation. I am sorry; I could not help it. That was there for the benefit of the hon. Member for Selby and Ainsty.

Finally, the emissions trading proposals would ban the Government from using carbon accounting through the European emissions trading scheme. I and my party are not opposed to that in principle, but would recognise that we are probably a little premature in terms of agreeing that in advance of the fifth carbon budget.

[David Mowat]

In principle, that apparently is the position of the hon. Gentleman’s party, because to leave the ETS, which is a Europe-wide system, seems an odd tack to take for a party that is always telling us how European it is. In particular, surely the way to fix this is to get a proper ETS, not one that has a price of carbon that is so low? That is the way forward, not by leaving it. Surely as good Europeans, that cannot be the SNP position.

[Callum McCaig]

I do not believe there was any suggestion to leave. I would not suggest we cannot use or do it, but, rather than looking to buy carbon emissions and the capacity off our dear friends on the continent, we should be looking to be the leader and to have that high ambition. We could be in a position not only to stop counting those emissions towards our own contributions, but sell some to others who may not be quite so good in dealing with it.

In closing, as I see it there are three aspects to this Bill: the Oil and Gas Authority, the onshore wind and the emissions trading. We at this stage support two out of three, and, as Meat Loaf said, “Two out of three ain’t bad.”

Climate Change

Debate between David Mowat and Callum McCaig

Wednesday 10th June 2015 Commons Chamber

[Callum McCaig]

That is a disappointing scenario and I share my hon. Friend’s frustration. Onshore wind has the potential to provide a win-win situation for communities to see investment that they might not otherwise have dreamed of—though that might not be the case in Glasgow—as well as a reduction in our carbon emissions.

Scotland is doing well with carbon reduction. Given the nature of our geography and the potential renewable resources in our nation, we are willing, able and well disposed to do a large part of the carbon reduction heavy lifting on behalf of the United Kingdom. However, that can only be done in partnership while the required powers rest in this place. I reiterate the need for that detailed and meaningful consultation with the Scottish Government.

I was pleased to hear the Secretary of State mention innovation, which will be required for a number of the renewable technologies that will play their part in meeting our climate change obligations. Offshore wind has the potential to deal with that; specific considerations in Scotland make it slightly more difficult there than in other places, owing to the depth of the water, but the resource there is unparalleled. We need the ability, through the contracts for difference mechanisms, to enable offshore wind in Scotland to take off and take up the heavy lifting on carbon reduction.

Clearly, there is a requirement for base-load, and I was pleased to hear the Secretary of State mention carbon capture and storage. I gently correct her by saying that Peterhead is not Aberdeen—it is a fair while up the road and the differences are stark, both for those resident in Aberdeen and those resident in Peterhead; we are friendly but competitive. CCS, too, has the potential to be transformational in how electricity generation and heat generation can be decarbonated.

Time is clearly of the essence, both in this Chamber and, more pressingly, as the temperatures—

[David Mowat]

I was interested to hear the hon. Gentleman mention “base-load” and “heavy lifting”. He will know that the low-carbon technology that does most to reduce emissions in this country is civil nuclear, and the same applies worldwide; we are talking about double the amount of renewables. That is clearly base-load, and civil nuclear is cheaper, even now, than wind, so is it something he advocates in terms of heavy lifting and base-load?

[Callum McCaig]

It is not something I would advocate in that regard, and I do not believe it is cheaper. The strike price for the new power station at Hinkley is £10 higher per megawatt-hour than the one for onshore wind.

[David Mowat]

I am afraid the hon. Gentleman may have inadvertently misled the House about the strike price for nuclear at Hinkley compared with that for onshore wind. The strike price in legislation for onshore wind is higher than that for nuclear at Hinkley Point C.

[Callum McCaig]

The figures I have seen are £82.50 as opposed to £92.50, but if I am wrong about that—I will check it—I will be more than happy to withdraw that statement. I do not believe that nuclear is safe or that it is an appropriate part of the energy mix.