Oral Answers to Questions
Debate between Graham Stuart and Kenny MacAskill(12 months ago)
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Kenny MacAskill (East Lothian) (Alba)
The Minister for Energy Security and Net Zero (Graham Stuart)
This Government are proud to have made the UK a global leader in offshore wind, and the industry believes that UK jobs in the sector will rise from the current 30,000-plus to 100,000-plus by 2030—if, of course, Conservative stewardship continues.
Kenny MacAskill
Jobs for whom? That is the question. We have already seen the shameful situation of UK seafarers who work in the offshore wind sector being laid off, to be replaced by low-wage, exploited migrant labour. As the sector develops, as we see people go out to work on the turbines for longer and as we see the building of floating accommodation for them to stay on, there is a huge risk that those workers—not just those on the supply ships—will also face exploitation. Will the Minister work with Cabinet colleagues to ensure that the national minimum wage applies in the offshore sector beyond the 12-mile territorial limit? That is the solution to protect our workers, and those from abroad, from being exploited.
Offshore Wind: Public Ownership
Debate between Graham Stuart and Kenny MacAskill(1 year, 2 months ago)
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The Minister for Energy Security and Net Zero (Graham Stuart)
It is a pleasure to serve under your—as ever—sartorially elegant chairmanship, Mr Dowd. I congratulate the hon. Member for East Lothian (Kenny MacAskill) on securing this important debate, and the hon. Members who have taken part in it.
The hon. Gentleman gave a well-constructed, well-researched and thoughtful speech from the particular political perspective from which he hails, and I thank him for it. He will be aware of the important role that offshore wind and other renewables play in delivering secure, domestically generated energy, and the boost that provides for economic growth across the UK. He is right that we must harness the opportunities of offshore wind for Scotland and maximise the benefits for our nations—whether that is Wales, Scotland, England or Northern Ireland.
Where the hon. Gentleman and I differ is on how best to exploit that opportunity from where we start. This Government believe that a state-owned model is not the best approach. I am sure that, if we had allowed some new state company to come in and dominate our offshore wind sector, we would never have seen the 70% reduction in the cost of offshore wind that we have seen over recent years. It was the contracts for difference framework that we created, which allowed companies from all over the world, state or non-state, to come in, that transformed the economics of offshore wind and opened up the potential for not only the UK but the whole world of this important technology in tackling net zero.
The UK market is open to offshore wind investment, whether from state-backed or privately owned developers, and it has been extremely effective. The success of CfD has been in leveraging private capital to support wider public benefits. Our market-friendly approach has transformed the economics, as I said.
The UK encouraged an estimated £50 billion of new investment in low-carbon sectors in 2021 and 2022 alone. We currently have 14.2 GW of installed offshore wind capacity, the most of any nation in Europe. The hon. Gentleman made many references to different countries, but we have more of it than anybody else, and we drove its changing economics by taking a competitive approach rather than a protectionist, state-run approach that would never have delivered such a transformation.
We are committed to our ambition of reaching 50 GW by 2030, including up to 5 GW of floating offshore wind. We have not only the world’s largest operational wind farm project—Hornsea 2 off the Yorkshire coast, which is named after a town in my constituency—but the second, third and fourth largest projects.
Graham Stuart
I will make a little more progress, if I may.
Properly regulated markets that incentivise private capital—or indeed state capital—to invest in the energy system provide the best outcomes for consumers. Market competition is the most effective driver of efficiency, innovation and value. Private ownership of energy assets improves performance and reliability, and offers consumers greater choice and higher standards of products and services.
Our free market approach means that we have a highly competitive offshore wind market, which benefits from the expertise and experience of developers from all over the globe. It has enabled significant decarbonisation of our energy system, with dramatic drops in the cost of renewables. In 2010, when Labour left power, this country had a paltry 6.7% of its electricity coming from renewables. That was shameful. In the first quarter of this year, nearly 48% of our electricity came from renewables. Ten or 11 years ago, nearly 40% of our electricity came from coal. Next year, that will be zero, again because of our market-friendly policies, which would be at risk were His Majesty’s Opposition to have their ideas for state-run energy companies wrecking one of the most successful markets in the world. All over the country people are benefiting from the growth of the sector, and the cheap, secure, low-carbon electricity it produces.
Scotland has already benefited from the opportunities in offshore wind. It is a shame the hon. Member for East Lothian could not bring himself to recognise any of that. With its strong winds and plentiful coastline, it has made a significant contribution towards our offshore wind ambitions: so far, 3 GW is operational or under construction, and more than 40 GW of capacity is in the pipeline. The opportunity is enormous. The Scottish taxpayer already benefits from the Crown Estate Scotland seabed leasing. All net profit from offshore wind leasing rounds and rent is passed on to the Scottish Government for public spending.
We welcomed the recent announcement of a potential £200 million investment in high-voltage direct current manufacturing in the highlands by Sumitomo of Japan, which could create up to 150 jobs. The offshore wind industry has also supported the revitalisation of ports from Wick to Dundee. A huge range of diverse companies in Scotland already benefit from the offshore wind industry’s growth: crane manufacturers, consultants, underwater operations experts, turbine maintenance specialists and more. We know that opportunity will only expand as we grow the industry further.
The UK, as I have said, leads the world in floating offshore wind, a new technology that opens up access to new, deeper areas of seabed. The Hywind Scotland project was the world’s first floating windfarm. Combined with the Kincardine project, also in Scotland, it has given the UK one of the largest amounts of operational floating capacity anywhere in the world, at 80 MW. The UK has the world’s largest floating wind pipeline, with around 25 GW already identified, including through the ScotWind leasing round and INTOG processes. That represents a huge opportunity for the Scottish economy, especially from installation and lifetime maintenance activities, which are best undertaken locally.
I suggest to the hon. Member for East Lothian that, if he is as passionately committed as he suggests to jobs and benefits for Scotland, he should not be sending a message that we want to deter foreign investment, but signalling that we welcome it.
Graham Stuart
I will in a moment, if time allows.
To achieve our deployment ambitions and secure high-quality local jobs, we must continue to build a robust and competitive UK offshore wind supply chain. We are focused on maximising the economic opportunity arising from our transition to clean energy. Our significant strengths, including in wind energy and innovation, mean we have an essential role in building those supply chains, as demonstrated by this Government’s investment to date.
Through the offshore wind manufacturing investment scheme, the UK Government have made available funding to support investment in major port and manufacturing infrastructure. We have seen more than £500 million invested by SeAH Wind and JDR Cable Systems in manufacturing facilities, which will create or safeguard up to 1,200 jobs. I want to see similar investments in Scotland. That is why we continue to work with industry as it develops a long-term industrial growth plan for the sector, following the publication of Tim Pick’s recommendations.
Government backing attracts the private investment needed to deliver net zero. That includes research and development, where we are supporting innovation in floating wind technology through the floating offshore wind demonstration programme. That uses £31 million of Government funding, alongside £30 million from industry, to keep the UK at the cutting edge of offshore wind innovation. We are not stopping there. Just two weeks ago, applications closed for the Government’s floating offshore wind manufacturing investment scheme, which will provide up to £160 million to kick-start investment in port infrastructure projects needed to deliver our floating offshore wind ambitions.
The hon. Member for East Lothian gave a passionate speech effectively opposing the world’s investing in our renewable energy, and in offshore wind in particular. I caution him to think again, send out a more positive line to the world and recognise the huge investment opportunities here.
Kenny MacAskill
Does the Minister recognise that everything that he has said about private sector investment can and does happen in Denmark, but Denmark has taken a 20% stake on behalf of the Danish people, as Norway has done for oil and gas? None of what the Minister has suggested is impossible in Denmark, and it is happening. Does he accept that?
Graham Stuart
Denmark’s situation, size and industrial history are very different from the UK’s. What I am saying is that the UK is a European and, indeed, a world leader. We have decarbonised more than any other major economy on earth, and we believe that it is making us the best possible investment environment. We do not see the advantages of taking the state stakes that the hon. Gentleman suggests.
It remains essential that communities most affected by offshore wind and its associated infrastructure can benefit from its deployment. We recognise, for example, that regional distribution charges particularly impact the north of Scotland. That is why our cross-subsidy scheme provides more than £100 million annually to protect electricity consumers in the far north. It is worth £60 a year to every household in the north of Scotland.
We also want communities and individual families that are not involved directly in the industry to see benefits. That is why we have recently consulted on proposals for community benefits for transmission network infrastructure, including in Scotland, because we are essentially rewiring the whole UK economy as we make this transition. We must do it at speed, but in a way that has community support and in which we recognise the impact on host communities. Developing transmission infrastructure, particularly between Scotland and England, will be key for unlocking the full potential of renewable energy, and offshore wind in particular. It will mean that we can get electricity from where it is generated to where it is needed.
Hon. Members will have seen that the first annual contracts for difference auction completed last week. I am delighted that it delivered a total of 3.7 GW of renewable electricity. Contracts have gone to geothermal projects for the first time. There are record numbers of tidal stream projects, in which Scotland is a major player; I was delighted to visit the European Marine Energy Centre in Orkney and see so much of the significant work going on there. We also saw a doubling of onshore wind from last year’s record auction, and new solar. We hoped that offshore wind would be successful in this round, but we recognise that the challenging macroeconomic pressures felt by the industry around the world impacted its ability to come through the round successfully.
We are reflecting carefully on the results of allocation round 5 so that we make appropriate adjustments for AR6. That is how it works: we get data by trying to understand supply chain costs and commissioning research, but the most valuable data of all is actual behaviour in real auctions. That information will come into adjustments for AR6 to ensure that our evidence base reflects the true market environment. At the same time, value for money for the consumer through a competitive process remains an important feature of the CfD scheme, and I make no apology for always prioritising protecting the consumer. With annual auctions now in place, the allocation round is due to open in about six months, meaning that there is an opportunity to gain a contract with minimal delay to deployment for projects that were not successful this time.
This Government have made real progress in delivering the ambitions set out in the British energy security strategy and our “Powering up Britain” plan. We are committed to achieving our ambition of 50 GW of offshore wind by 2030. It has a vital role to play in delivering a decarbonised power system by 2035, subject to security of supply, and achieving our legally binding 2050 net zero commitments. We need to celebrate what we have done to date and recognise that most of the growth is not in the past, but in the future. The opportunities for Scotland, Wales, Northern Ireland and England are immense, and we should work collectively to ensure that we attract investment and create as many jobs as possible in this country supporting the transformation of our energy system and our spearheading of the global move to net zero, which is so important to us and future generations.
Question put and agreed to.
Oral Answers to Questions
Debate between Graham Stuart and Kenny MacAskill(1 year, 4 months ago)
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Graham Stuart
As my hon. Friend knows, the Prime Minister is absolutely determined to bring net migration down to sustainable levels. I would also point out to him that the UK does not set decarbonisation targets per capita, because all countries need to reduce emissions in absolute terms. We are determined to play our part in doing that—to move to net zero, but in a pro-growth, pro-business manner.
Kenny MacAskill (East Lothian) (Alba)
It is not simply about empowering future generations, but those that exist. That is why the roll-out of smart metering is important. The latest quarterly statistics claim that 57% of UK households have smart meters, but that masks the fact that only four out of 32 Scottish local authorities are above 50% in the roll-out of smart metering, five are below 30%, and three island councils are below 10%. All those are also the areas with the highest fuel poverty. As we approach March 2024, when radio teleswitching will go off, how will we ensure that people have access to smart metering, enabling them to get off-peak tariffs?
Graham Stuart
The hon. Gentleman is right, both to enthuse about the importance of smart metering and the benefits it can bring—even more so as we move forward in the coming years—and to highlight the importance of ensuring, as ever, that something so important is equitably distributed. I, or colleagues, would be happy to meet him to discuss how we make sure that the issues he has rightly raised are addressed.
Prepayment Meters: Ofgem Decision
Debate between Graham Stuart and Kenny MacAskill
Graham Stuart
As I have said, the situation was created under the last Labour Government in which suppliers have been obliged to charge rates that reflect the actual costs to them of delivering a service to someone. That, at face value, is the correct system. We need to look at whether we need to change that system to be fair to vulnerable consumers, remembering that most vulnerable consumers are not on a prepayment meter. We have to have a system that is fair for all.
Kenny MacAskill (East Lothian) (Alba)
Almost one in five households in Scotland are off the gas grid. Fuel poverty and the use of prepayment meters are greatest in those areas because those households are reliant on unregulated fuels and on electric heating systems, which have always been more expensive. Will the Minister recognise that additional burden, regulate those additional fuels and provide sufficient support in those areas for insulation and alternative heating systems, as well as financial support? The crisis there is even greater due to the double whammy of people being off the grid and in fuel poverty.
Graham Stuart
I thank the hon. Gentleman for his question, and he is quite right to speak up for people in rural areas who find themselves in exactly the position he describes. I am pleased to say that as of today, credits to electricity bills will be being paid to of people who are on the electricity grid but off the gas grid—they will be appearing from now on. We are determined to help those people, which is why we announced in the autumn statement a doubling of the alternative fuel payment from £100 to £200. That money will be going to help those people, and the portal will also open before the end of the month for those who are not on either the gas grid or the electricity grid, so that they too can apply and get that £200 support.
Energy Bills: Self-disconnection
Debate between Graham Stuart and Kenny MacAskill(1 year, 10 months ago)
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Kenny MacAskill (East Lothian) (Alba)
(Urgent Question): To ask the Secretary of State to make a statement on the levels of self-disconnection from power sources and on Government support for energy bills.
The Minister for Energy and Climate (Graham Stuart)
As I set out to the House on Monday, the Government recognise the importance of protecting customers, including those on prepayment meters. This weekend, the Secretary of State set out a five-point plan on prepayment meters. He wrote to energy suppliers, calling on them to take every step to support consumers in difficulty, particularly those who are at risk of self-disconnection. The Government want to see a much greater effort from suppliers to help consumers in payment difficulties, including offers of additional credit, debt forgiveness or debt advice. As the hon. Member for East Lothian (Kenny MacAskill) will be aware, Ofgem, as the independent regulator, is in a position to direct suppliers in a way that the Government are not.
The Government understand that this is a difficult time for many families. That is why we have put in place unprecedented cost of living support. It is easy to take that for granted, but it is extensive. It includes the £400 discount under the energy bills support scheme, which has been appearing on electricity bills since the October bills arrived this winter, as well as the energy price guarantee, which does not need any form of application process and directly subsidises energy bills for the typical family this winter to the tune of an additional £900, with equivalent support in Northern Ireland. The Government are also committed to supporting those households without a relationship to a domestic energy supplier with a £400 discount under the energy bills support scheme alternative funding, with eligible households able to apply from 27 February.
It is critical that this support reaches consumers, which is why the Government have also urged suppliers to take action on increasing the number of vouchers being redeemed under the Government’s energy bills support scheme and why we have published a list of supplier redemption rates. We want to encourage suppliers to compare themselves with their rivals and look to do as well as the best, showing which ones are meeting their responsibilities and which need to do more.
There are also established industry rules and processes to reduce the risk of self-disconnection. Suppliers are required to have conversations with customers in arrears to set up a suitable debt repayment plan, taking account of their ability to pay. It is vital that these rules are followed. The Secretary of State wrote to Ofgem to ensure that it takes a robust approach to compliance. In response, Ofgem is reviewing supplier practice, and a key area of its review is the suppliers’ approach to self-disconnection.
But this is continuing work. This afternoon I will be meeting energy suppliers, Ofgem, Energy UK and Citizens Advice to ensure that they hear from the Government, the hon. Gentleman and all hon. Members that there is a strong urge in this House to do everything we can to protect everyone this winter, and most of all, the most vulnerable.
Kenny MacAskill
A parliamentary answer on Tuesday disclosed that around 66,000 households in Scotland and 660,000 across Britain had self-disconnected from smart meters in the third quarter of last year. Self-disconnection is a euphemism for simply being unable to afford to heat or power your home. It is as pernicious as the term “collateral damage” is in war. Those afflicted by self-disconnection and all its misery are also civilians, but we are at peace, not war. These figures are for a quarter before prices rose and temperatures dropped. They are also only the tip of the iceberg. The numbers are far greater, as these figures do not cover those on legacy prepayment meters, the numbers of which are substantial, with almost 2 million in the UK and 300,000 in Scotland. They apply to those that operated before smart meters were brought in and they will substantially increase the numbers so tragically afflicted.
In an energy-rich country, fuel poverty is an obscenity. Given this heartless cruelty in a cold winter, will the Minister, first, end the forced installation of prepayment meters forthwith? Secondly, will he immediately abolish the perverse higher standing charges and tariffs for prepayment meters? Thirdly, will he as a matter of urgency bring in a social tariff for the poorest and most vulnerable?
Graham Stuart
I thank the hon. Gentleman for his questions. He rightly raises the issue of those who are self-disconnecting. I think we can be proud of the fact that the numbers of people who were physically disconnected from power and heat last year were in single figures. The installation of prepayment meters has to be an absolute last resort. We must insist that people do not end up being physically disconnected from an energy supply. It is important to highlight that all suppliers are required to offer emergency credit when the meter runs out. This should give consumers enough time to top up their meters. Traditional meters have an automatic setting that allows for a set amount of emergency credit to be used after the customer is notified that the topped-up credit has been used.
As I have said, we are committed to having the right regime in place. In 2009, there were issues around the additional costs of prepayment meters. Ofgem had responsibility for supervising that at that time, as it does now, and it looked into the issues and brought in a regime to ensure that any costs and charges were commensurate with the actual costs of delivery. To a certain extent that has all been superseded by the energy price cap brought in by this Government, which limits the amount that anyone can charge for their energy.
Prepayment Meters
Debate between Graham Stuart and Kenny MacAskill
Graham Stuart
Of course, the Government are providing an unprecedented three layers of support for consumers: the cost of living support for those on benefits, the £900 reduction in energy bills this winter and the additional £400 energy bills support scheme, as well as help for those on alternative fuels. The Government are bending over backwards, within an unprecedented and tight situation, precisely to help constituents such as those the hon. Lady mentioned, because we have to bear in mind the most vulnerable—those who are struggling, especially on a day like this when it is so horribly cold.
Kenny MacAskill (East Lothian) (Alba)
Legacy prepayment meters number about 300,000 in Scotland and 2 million in the UK. Many have a credit limit of only £99, which with the perverse higher tariff and standing charges does not go far, especially in cold times such as now. That requires multiple top-ups, and often people who are on legacy prepayment meters live in either rural areas or deprived urban areas devoid of public transport, or have restricted mobility. Will the Minister also undertake to address this other injustice, heaped upon those who are already the poorest and most vulnerable?
Graham Stuart
The hon. Gentleman is right to highlight people in rural areas, including the remote highlands and islands, which I am sure the right hon. Member for Orkney and Shetland (Mr Carmichael) will question me about if he gets the chance. The hon. Gentleman is absolutely right that we need a system that recognises the geographical and proximity challenges that affect people such as those he has mentioned, and—while under unprecedented stress, as I say—works at that granular level for ordinary families, often in remote areas. They need help and we need a system that supports them.
Eastern Link Undersea Cable Electricity Generation
Debate between Graham Stuart and Kenny MacAskill
Graham Stuart
My hon. Friend is truly an expert in this area and, working with colleagues, is working very hard to ensure that these arguments are heard and that the case is made to ensure that minimum disruption for the maximum facility and benefit is brought to his constituency and those around it.
The Government are working closely with Ofgem, the independent regulator, and industry to ensure our electricity network is ready to harness the power of renewables to deliver for consumers. Our approach is threefold. First, we are working to ensure that transmission infrastructure is planned in a co-ordinated way. In July, the National Grid Electricity System Operator published the holistic network design. This is the first ever strategic plan for the infrastructure needed to bring energy from offshore wind onshore. This streamlined approach will reduce the cost of construction for networks, which also means lower bills for families, including in Scotland. Consumers will save £5.5 billion in costs from 2030 over the network lifetime. By reducing the amount of infrastructure required, it will minimise disruption to communities and the environment too.
We are not just changing the way we build; we are also speeding things up. The Government have committed to reducing end-to-end timescales for the construction of transmission infrastructure by three years. To get to this goal, we have appointed Nick Winser as the Electricity Networks Commissioner to review the development process and identify where it can be made faster. Ofgem recently consulted on speeding up regulatory approvals of network projects, and we expect it to publish a decision later this year. Officials in my Department are working with those in the Department for Levelling Up, Housing and Communities to reduce planning timeframes as well. We will consult on how communities should best benefit from hosting grid infrastructure in their local area.
We are making the way we do things smarter and faster, but we are also exploring new solutions to storage, which the hon. Member for East Lothian mentioned, that promise to alleviate capacity constraints.
Kenny MacAskill
Does the Minister accept that there is a difference between how community benefit is dealt with regarding onshore and offshore wind? I assume that came about through a failure to appreciate that wind would ever go offshore. Is he prepared to meet me and representatives from East Lothian, and perhaps even Aberdeenshire, to discuss how we may accrue some benefit from that offshore energy, which currently applies only to onshore?
Graham Stuart
Like the hon. Gentleman, I have a vision of us leading the world, as we are, and continuing that up to 2030 and beyond, by greening our energy supplies and our whole society, and developing the industrial capability that I mentioned, together with the benefits of coming up with a holistic system that brings maximum benefit and thus carries everybody with us. Every community should be proud to host these developments, but should also benefit from them. I would be delighted to meet the hon. Gentleman were I to continue in this role, and if I do not he can try to hold my successor to that. He has made a powerful case and is, quite reasonably, looking to do the right thing.
One of the most genuinely exciting technologies in this area is long-duration storage, which, as the name suggests, stores electricity when it is not needed by users, and releases it slowly over time when demand is higher than generation. That could enable us to reduce costs by maximising our consumption of cheaper domestic renewable generation, enabling a more efficient seasonal balancing of the system. There is a real chance to save tens of billions of pounds between 2030 and 2050, and we can make sure that those Scottish storms keep Yorkshire’s kettles warm in winter, hopefully within a system that benefits all.
To do so, the Government are developing policy to secure investment by 2024. With that investment, we will be able to deploy enough long-duration storage to balance the whole UK system. We are moving full speed ahead to deliver a clean, secure, and affordable energy supply for all. Today’s debate has highlighted the critical importance of infrastructure in achieving that aim, and for ensuring that the interests of all communities that host or are near to energy production and transmission are understood and met. We want all to feel positive about the outcome of the world-leading effort that we are collectively making in England, Scotland and other parts of the United Kingdom.
Question put and agreed to.
Oral Answers to Questions
Debate between Graham Stuart and Kenny MacAskill(3 years, 4 months ago)
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The Parliamentary Under-Secretary of State for International Trade (Graham Stuart)
Opportunities for UK exporters are significant. We are seeing exports rebounding this year and they are expected to grow by a further 8% next year, and further opportunities are being created all around the world as we have rolled over the existing EU deals, plus the EU itself, and started to negotiate other agreements. Of course, the first from-scratch agreement in principle was with Australia. I hope the hon. Gentleman would applaud and support this direction of travel.
Kenny MacAskill
That is all very well, but food production businesses in my constituency face a loss of trade, challenges with customs, and damage to their supply chains. They require to operate in today’s land, not some promised land that their business might never survive to be able to see. What is the Minister going to do to ensure that their difficulties are minimised and that support for them is maximised? They need butter today, not a promise of jam tomorrow.
Graham Stuart
It would very much help if the Scottish Government and the Scottish National party, of which the hon. Gentleman used to be a member, were to support the trade deals that we do to open markets around the world. He ought to know, as should his former colleagues, although I know they are pretty split even among themselves, that actually Scotland trades more with the rest of the world than it does with the EU. He will also note that EU volumes in May were back to the highest level since October 2019, so we are back to pre-pandemic levels with the EU. The teething problems are being dealt with, other problems are being minimised, and Government support is there. [Interruption.] It is about time that Scottish National party Members, who like to chunter from a sedentary position, got behind our exporters and stopped talking them down.
Oral Answers to Questions
Debate between Graham Stuart and Kenny MacAskill(4 years, 10 months ago)
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Graham Stuart
I spent months working with colleagues across Government to deliver the UK-Africa investment summit, which took place on Monday. I am delighted with the result and proud of the work of so many officials in making it happen. We have announced 27 commercial deals worth more than £6.5 billion from across African markets, but as my hon. Friend has pointed out, there is enormous potential for more.
Kenny MacAskill (East Lothian) (SNP)