Oral Answers to Questions

Douglas Chapman Excerpts

Tuesday 16th January 2024 Commons Chamber

[Martin Docherty-Hughes (West Dunbartonshire) (SNP)]

1. What recent discussions she has had with Ofgem on trends in the level of consumer energy debt.

[Douglas Chapman (Dunfermline and West Fife) (SNP)]

11. What recent discussions she has had with Ofgem on trends in the level of consumer energy debt.

--- Later in debate ---

[Graham Stuart]

I thank the hon. Gentleman for his question; he is right to highlight the issue of debt and families who are struggling. This is why we are providing £104 billion—or, on average, £3,700 per household—between 2022 and 2025, which is one of the most generous packages in Europe. In the autumn statement, we increased the national living wage, which is worth £1,800 to a full-time worker, and increased benefits by 6.7%—that is worth £470. Just last week, we also delivered a tax cut for 27 million people, which is worth £450 for the average worker. So we are taking steps, but we recognise the reality for many people that he set out.

[Douglas Chapman]

In my country, energy debt is rising, as Scottish consumers pay a premium on their energy bill—it is a high price to pay to keep the lights on in England. In the light of that imbalance, has the Minister discussed abolishing the not-fit-for-purpose Ofgem? If not, should his Government not give full responsibility for energy pricing in Scotland to the Scottish Parliament?

[Graham Stuart]

We have moved decisively to support families in Scotland and across the rest of the UK. I am pleased that the price cap has fallen by half since its peak last year, and we are making sure that our support is targeted at the most vulnerable. I have already laid out many of the measures we are taking precisely to ensure that people in Scotland and elsewhere are supported in what has been a tough time. Overall, we are, of course, looking to power up Britain. We have set out a plan to do that, precisely in order to have more of our power coming from Britain and to remove our dependence on foreign fossil fuels. I hope that the hon. Gentleman and his party will support us in our efforts to deliver that.

Grangemouth Oil Refinery: Energy Security

Douglas Chapman Excerpts

Tuesday 9th January 2024 Commons Chamber

[Graham Stuart]

My hon. Friend is a great champion of those workers in the oil and gas industry. We now have an integrated energy industry. He may have seen the recent research suggesting that 90% of those currently employed in oil and gas have transferrable skills to the green transition, in which we can positively expect to see many more jobs in future if we maintain the strength of that industry today. That is why it is so disappointing that some Opposition parties oppose new licensing of oil and gas when that is vital to maintaining those jobs and that capability. In that respect, the Alba party is more constructive than others sitting on the Opposition Benches.

We are working closely with both the company and the Scottish Government to ensure a managed transition of the site, support its workers and ensure that Scotland’s fuel supply remains resilient. Petroineos’s plans will ensure that the Grangemouth site can maintain Scotland’s fuel supply through imports. Adapting the infrastructure to accommodate imports in larger tankers, particularly of diesel at Finnart on the west coast of Scotland, will ensure that the import terminal has greater flexibility and maintain robust fuel security.

I recognise that consumers may be worried that increasing the UK’s reliance on imported fuel products could increase the price they pay at the pump. I want to provide reassurance that this conversion is unlikely to drive up the price of petrol and diesel for the Scottish consumer. Fuel prices are mainly driven by international petroleum product markets and exchange rates, and imports into other sites such as Clydebank are already competitive in the Scottish market.

I also want to acknowledge that the announcement of the conversion will be concerning to the refinery’s employees and their families. We remain in close contact with the Scottish Government to mitigate impacts on jobs and the local economy. As part of our commitment to levelling up, the UK Government are already supporting the Falkirk Council area through the UK shared prosperity fund. Its allocation of more than £6.1 million will deliver a range of interventions that support local businesses, communities, people and skills. We are also supporting Falkirk Council with £40 million of UK Government investment through the Falkirk city and regional growth deal, which is supporting a range of locally driven projects that will create high-value jobs to help boost the local economy. We are working with the Scottish Government to deliver the Forth Green freeport, which covers the area. The freeport aims to drive a transition to net zero by 2045 by attracting up to £6 billion-worth of investment and creating approximately 50,000 jobs, generating an estimated £4.2 billion in gross value added in the first five years.

[Douglas Chapman (Dunfermline and West Fife) (SNP)]

The Minister is giving a comprehensive reply. The Forth Green freeport is really important. He mentions that he has been in discussion with the Scottish Government and others in the Grangemouth area. Will he also make a direct plea to the freeport to make sure it is fully involved in any potential reinvestment in the facility at Grangemouth, which has been part of the industrial heritage and the industrial scene in Scotland for a very long time? It would be a very valuable contribution if the Government could make such an intervention.

[Graham Stuart]

As the hon. Gentleman will be aware, through contracts for difference and many other policy announcements from the UK Government, we are driving enormous growth in jobs in the green sectors. We expect them to grow to 480,000 jobs by the end of this decade. As I say, as a global leader in decarbonisation, Scotland, and that area in particular, has an enormous amount to offer and there are huge opportunities coming forward. We will publish next year a green jobs plan, working with industry to identify the pressure points and the opportunities going forward.

The Government remain absolutely committed to supporting the North sea oil and gas sector. The conversion of the refinery into an import terminal is not expected to impact significantly on North sea production. That is because only a very small amount of oil refined at Grangemouth currently comes from the North sea. Indeed, since the start of 2022, Grangemouth has received on average less than 10% of its supply from the North sea via the Forties pipeline, which the hon. Member for East Lothian referred to. This North sea crude would be made available to the open market via the terminal at Hound Point, alongside the rest of the Forties blend production. I can also confirm that there will be no impact on gas supplies.

I assure the House that the Government will continue to back North sea production by granting licences for new projects, such as the Rosebank field development. Developments such as Rosebank will continue to strengthen our energy security, support the transition to net zero, and create new jobs and opportunities. Rosebank, for example, is expected to be significantly less emissions-intensive than previous developments, which will help the UK to reach its ambitious targets for net zero. Its operator, Equinor, estimates that it will produce oil at around 12 kg of carbon dioxide per barrel, compared with an offshore production average of more than 20 kg of carbon dioxide per barrel. So it is already a much more efficient production. If electrification were to go ahead, it would be significantly lower again. In addition, the Rosebank project will provide investment of £6.3 billion in UK-based businesses, support around 400 UK-based jobs, and add around £24 billion to the UK economy across the project’s lifetime, according to its operator. Yet that licence finds itself opposed by the Labour party, even if it supports jobs and helps us to green the basin.

I want to finish by reiterating to the House the Government’s commitment to backing the North sea oil and gas sector to protect our energy security, attract investment, and create opportunities for communities in Scotland and across the UK. It is a declining basin. It is expected to fall, with new licences, at 7% a year. New licences are not part of increasing production, because we will not have increased production. It is about managing the decline and doing so in a way that brings forward developments such as Rosebank with lower emissions than the alternative. That is why it is the right thing to do for the environment, however counterintuitive that might seem. It is also the right thing to do for jobs and for the maintenance of the capability for the long term as we go through the transition and the green economy grows in the freeport as well as elsewhere.

The UK Government will continue to work closely with the Scottish Government on this issue to ensure that when the time comes, there is a just transition of Grangemouth into an import terminal—if that is the decision made—and to ensure that fuel supplies for Scotland and the UK are maintained. The Government will also continue to support economic development in the local area to ensure that there is a just transition for the workforce.

I look forward to continuing to engage with Members, and with the hon. Member for East Lothian in particular, on this vitally important issue.

Question put and agreed to.

Green Energy: Ports

Douglas Chapman Excerpts

Wednesday 18th October 2023 Westminster Hall

[Douglas Chapman (Dunfermline and West Fife) (SNP)]

It is a pleasure to serve under your chairmanship, Mrs Cummins. I am delighted to sum up in today’s debate on the contribution of ports to green energy. I really do thank the right hon. Member for Preseli Pembrokeshire (Stephen Crabb) for securing this debate, which it is important to have at this time.

This debate gives me the chance to highlight some of the benefits, from a Scottish perspective, of the development of ports north of the border, where our green port ethos is centred on the importance of net zero and the just transition. At the heart of the Scottish Government’s unique approach to our green ports is the commitment to the development of renewable technology, an innovative environment and the promotion of decarbonisation, alongside the creation of well-paid, high-quality jobs and skills development.

In that sense, the fair work practices agenda is embedded in our green ports from the get-go, and progress on freeports and green ports must be monitored and evaluated to ensure a just transition. We want to ensure that we make the most of the skillset we have in Scotland, valuing the existing expertise across the energy sectors while transitioning from oil and gas to renewables, and training up the new generation of workers into high-quality work.

In developing the Scottish green port model, the Scottish Government were mindful of the more negative aspects of freeports and their reputation for poor working practices, deregulation, weak productivity and the lack of real benefits for their surrounding areas. Instead, in Scotland, we are centring on sustainability, environmental concerns and fairness to boost innovation in renewables, and focusing on a prosperous growth agenda for our local communities based around our ports.

[Douglas Ross]

Given everything positive that the hon. Member has said about freeports in Scotland, does he agree that it is disappointing that the Scottish Greens, who are in government with his party in Holyrood, do not support Scotland’s two freeports?

[Douglas Chapman]

I worked very closely with the Minister, Ivan McKee, when the green ports project was at its inception. We worked with the UK Government at that time as well, and Mr McKee was very supportive of the whole concept. There is more I want to say today that might give the hon. Member a bit more reassurance that we see the green port opportunity as just that: a real opportunity to develop the economy of Scotland.

Others have mentioned their own constituencies; I am the Member for Dunfermline and West Fife, which has one of the two green ports being developed in Scotland, at Rosyth on the firth of Forth, along with Leith and Grangemouth. I believe it will be transformative for the local economy and in trying to meet our environmental ambitions. The green port will feature a new freight terminal, offshore renewable manufacturing and green power generation capacity, skills development opportunities and new rail connections. The regeneration of this important logistical port should deliver a huge boost to the local community, through employment opportunities, and the wider economy in the surrounding area. It is good for energy security, good for creating prosperous communities and, importantly, good for the environment.

The Forth green port aims to bring £6 billion in private and public investment and will contribute £4 billion in gross value added. It has the potential to create 50,000 high-quality jobs, stimulate growth in renewable manufacturing, and develop offshore wind and various alternative fuel sectors. It will also support research and development investment and drive business growth for small and medium-sized enterprises and start-ups.

Alongside the development of the green port, I have been campaigning for a number of years to reinstate the ferry connection from Rosyth to mainland Europe, which will not only boost connectivity and trade prospects, but contribute to a reduction in harmful emissions by reducing both the tourism carbon footprint and road miles for freight transport. It would also reduce the pressure on the land bridge ports in the south-east of England. It is a good example of joined-up thinking for the climate and for the economy. I hope that the Minister and his colleagues will open their ears to this plea. The project currently has a logjam with the border and export authorities in London. If anything could be done to ease that pain, we could get ahead and ensure that the ferry service can start as soon as possible. In the Republic of Ireland, I have seen new ferry routes helping to boost exports. If Ireland can do it, why not Scotland?

The second green port will be based at the Inverness and Cromarty firth—another area steeped in industrial history and now playing a critical role in offshore wind. The project will place the highlands at the heart of the drive towards net zero. It will create 15,000 jobs in the area and a further 10,000 across Scotland and the rest of the UK, focusing on renewable and low-carbon energy production. Again, it is good for the economy, good for creating prosperous communities, and good for the environment.

Before I draw to a close, it is good to remind colleagues not just of the benefits of a just transition, but of its true definition. Scotland’s Just Transition Commission described it as a process whereby

“Governments design policies in a way that”

benefits the climate change agenda—benefits that are widely shared—but where

“the costs do not unfairly burden those least able to pay, or whose livelihoods are directly or indirectly at risk as the economy shifts and changes.”

I remind Opposition politicians that we are trying to lead on that in Scotland, but we need to focus on these ambitious climate and net zero targets to ensure that the just transition actually happens and remains meaningful.

In conclusion, the Scottish Government are committed to using the new green ports to attract investment into our economy. In addition, Scotland has all the potential to be a world-leading green energy producer, where the jobs, the revenue and the power rest with Scotland. The maritime sector also has a strong responsibility and an opportunity to be a key player in that ambition and to make the managed transition work for everyone. Between our industry sectors and Government, we can all benefit, but the message needs to be: let’s just do it.

--- Later in debate ---

[The Minister for Energy Security and Net Zero (Graham Stuart)]

It is a pleasure to serve under your chairmanship, Mrs Cummins. I begin by thanking and congratulating my right hon. Friend the Member for Preseli Pembrokeshire (Stephen Crabb) on securing this important debate. We have heard high-class contributions from pretty much every person who has spoken so far. I will return, if I have time, to the trite and empty remarks—which were perhaps written by others—from the shadow Minister, the hon. Member for Manchester, Withington (Jeff Smith).

Just by way of context, it is worth highlighting the record, because track records should count for something. Less than 7% of our electricity came from renewables in 2010. That was the dire inheritance of this Government. It was the CfDs developed and delivered by this Government that transformed the economics of offshore wind and which led us from the Labour record of less than 7% to nearly half in the first quarter of this year. We have gone from a desperate legacy, where nearly 40% of our electricity came from coal—the filthiest of fossil fuels—as recently as 2012 to that being eliminated next year under this Conservative Government. It is this Conservative Government who have led the world. We have cut emissions more than any other major economy on earth and grown our economy significantly at the same time.

We heard about crowding in private investment, Great British Energy and writing cheques, which is the last thing we need. We have heard that from Labour before, yet every Labour Government in history have ended with unemployment higher than it was at the beginning, when they started. They all offer hope and cheques for all, promises of huge support and endless taxpayer subsidy, which will deliver nirvana. Nirvana has never been delivered by Labour—not a green one and not any other kind. I said that bit would come at the end, but I had to indulge myself and do it at the beginning.

As has been said by everyone here today, ports are so important to unlocking the green revolution. As colleague after colleague have highlighted, from the Humber to Wales to Scotland, the southern North sea and Northern Ireland, ports have an enormous contribution to make to economic regeneration. The fact that we are blessed with this phenomenal renewable energy opportunity in the UK—which this Government, uniquely and unlike the previous, are committed to unlocking—means that we can turn levelling up from an excellent concept into genuine delivery. The previously highly carbon-dependent areas of this country are the very areas that genuinely need that, and they are best set to benefit from it. Their ports are what will make that possible.

I recognise the importance of existing port activity in south Wales in securing the UK’s and indeed Europe’s energy supply. Last year, rather than being, as in the previous year, a net importer of a billion cubic metres of gas, we moved to being an exporter of 19 billion cubic metres of gas, making a significant contribution to storage in Europe and the energy security of an entire continent. A lot of that came through south Wales. Of course, it is the two LNG terminals in the constituency of my right hon. Friend the Member for Preseli Pembrokeshire, on the Milford Haven waterway, that helped to deliver that. Looking forward, the success of the Celtic freeport bid, covering Milford Haven and Port Talbot, demonstrates the opportunity to unlock investment and therefore growth for the south Wales area and delivering those high-paid, long-term jobs that so many colleagues on the Government side of the House not only talked about, but have a history of delivering.

The right port infrastructure is vital to deliver offshore wind and other renewables, as part of our transition to net zero. Big though the energy business, carbon capture and related things are, perhaps the biggest opportunity here is what all this will facilitate. When we took on the COP presidency, just 30% of global GDP had made net zero pledges. By the time the presidency was handed on by the UK to Egypt, that figure stood at more than 90%. The world is following. If we create among the world’s first genuine net zero industrial clusters, the inward investment that will come—into non-directly energy-related, yet still energy-dependent businesses, as every business is—could be quite phenomenal. That is why colleagues are right to share their excitement and why my right hon. Friend the Member for Preseli Pembrokeshire is right, again and again—alongside, as always, the hon. Member for Strangford (Jim Shannon)—to come here and enthuse about the importance of this and the opportunity it brings.

The Government’s policies, as set out in the British energy security strategy and endorsed in “Powering Up Britain” earlier this year, include bold new commitments, so that we can supercharge clean energy and accelerate renewable energy deployment. The Government set an ambition of 50 GW of offshore wind by 2030, up from just 14 GW today. The UK has the largest offshore wind sector in Europe and is home to all four of the largest offshore wind farms in the world. As part of that ambition, we are aiming for up to 5 GW of floating offshore wind. Colleagues have rightly highlighted the importance of ports to that, given the gargantuan scale of the products that will be required. Ports will play a vital part.

Colleagues have raised the issue of ensuring that we maximise the industrial heft and capability from this sector, which is why we are looking at reviewing the contracts for difference scheme and improving it with non-financial factors and other ways of encouraging industrial development.

The hon. Member for Aberavon (Stephen Kinnock) asked me what work we could do with the Crown Estate. The first thing is to work super closely with it, which we do. We are backed by colleagues from His Majesty’s Treasury, and it has been great to see how we can work together co-operatively to unlock this. As part of the tender for the offshore wind leasing round 5 in the Celtic sea, the Crown Estate will require floating wind developers to set out specific commitments to ports, as well as binding commitments on wider issues such as enhancing skills, addressing environmental impacts and delivering community benefits. I hope that that answers the hon. Gentleman’s reasonable question.

[Douglas Chapman]

During my summing up, I mentioned the ferry terminal from Rosyth to Europe. The Minister has brought in other issues such as skills, training and so on, but the other thing that we should think about is our ports for exports and ferry services. I noticed that he made a note that he would contact his colleagues at border control—that is a complete roadblock at the moment—to make sure that the ferry service can go ahead and be a success.

[Graham Stuart]

I certainly sympathise with the Scottish Government’s troubles and challenges with ferries. As the hon. Gentleman suggests, through my officials I will pass on that message to other Departments to facilitate that. Anything we can do to help, we will seek to do.

[Douglas Chapman]

Will the Minister give way?

[Graham Stuart]

I will not.

The offshore renewable energy catapult has estimated that floating offshore wind could deliver more than £40 billion for our economy by 2050, creating about 30,000 jobs in the process. We are moving at pace to deliver those benefits, with more than 25 GW of floating wind projects with confirmed seabed exclusivity—the most in the world. The last thing we need to introduce into the excellent track record and system for bringing in private sector investment from all over the world—which we are proud of—is Labour’s plans for Great British Energy clunking into a carefully calibrated set of market mechanisms. That will have exactly the opposite effect of the objectives that the shadow Minister, the hon. Member for Manchester, Withington, set out.

Going further, the Crown Estate has announced its plans to hold a seabed leasing round in the Celtic sea, capable of supporting up to a further 4.5 GW, as we have heard. We also understand the importance to investors of certainty on a long-term leasing pipeline. If they can see the scale, we can get large-scale investment. We are acutely aware of that issue and are working closely with the Crown Estate and with other Government Departments. We must ensure that the multiple uses of our seas are thoroughly considered, so that we can then provide the visibility to unlock investments in ports, which will then unlock further investment.

The Government recognise the critical role that ports will play in achieving our green energy ambitions and the importance of securing investment in the infrastructure. They will also be a big enabler for offshore wind and a catalyst for wider supply chain development.