Oral Answers to Questions

Debate between Greg Clark and Alan Whitehead

Tuesday 19th March 2019 Commons Chamber

[Greg Clark]

I will indeed meet my hon. Friend, and I am sure that my right hon. Friend the Minister for Energy and Clean Growth will join that conversation. We have a good record in bringing on a range of new technologies and I am very happy to make sure there are no barriers to that.

[Dr Alan Whitehead (Southampton, Test) (Lab)]

There will now be a 9 GW cut in future installed capacity by 2030 as a result of Toshiba and Hitachi ending their plans to build three new nuclear power stations. The Secretary of State has also cancelled plans to build tidal lagoons possibly providing about that amount of additional capacity, has banned onshore wind and has run down new solar installations. He has severely limited the auction for new offshore wind to only £60 million of a possible £557 million. Does the Secretary of State agree that on present policies it looks like there will be a substantial capacity gap in power production against likely 2030 demand? Does he have any plan to deal with that? Does he have any plans to revive the lost nuclear power proposals? Does he share the Opposition’s view that, among other things, we will need at least 50 GW of installed offshore wind to help close the gap and meet our climate change commitments?

[Greg Clark]

Quite the opposite is true. One of the reasons why it has proved impossible to finance privately some of these nuclear power stations is that the cost of renewables was falling and the availability was increasing so rapidly that they are being muscled out of the system. The forecast electricity margin for this year is now over 11%, the highest for five years. To put this into context for the hon. Gentleman, the contribution that the Wylfa nuclear power station—3 GW—would have made was procured in a single contract for difference auction for offshore wind. That shows the abundance that we have, rather than the shortage.

Nuclear Update

Debate between Greg Clark and Alan Whitehead

Thursday 17th January 2019 Commons Chamber

[Dr Alan Whitehead (Southampton, Test) (Lab)]

I thank the Secretary of State for his statement, but he must recognise that the Government’s new nuclear strategy, adopted by the Conservatives and spearheaded by their Liberal Democrat coalition partners in 2013, is now in complete meltdown. The Government have reacted far too slowly to ongoing concerns from nuclear partners, such as Hitachi’s UK nuclear arm Horizon, which have been raising concerns over funding mechanisms since purchasing the project from RWE and E.ON back in 2012. Today’s decision to withdraw from the Wylfa nuclear power plant lays a significant blow on our economy.

The company’s statement reads:

“Horizon Nuclear Power has today announced that it will suspend its UK nuclear development programme”.

That sounds very much like not only is Wylfa on the chopping block, but so, perhaps, are plans for Hitachi’s other nuclear project—the Oldbury nuclear power plant in Gloucestershire. The Secretary of State has stated that Hitachi wants to work on new projects at Wylfa and Oldbury. What does that mean in the light of the clear statement Horizon has made this morning?

Only two months ago, the Government’s lack of clarity over funding for new nuclear led Toshiba to withdraw from its new nuclear project in Moorside. With the three reactors expected at Moorside and two each in Wylfa and Oldbury, that makes a total of 9.2 GW of new nuclear energy that will not now be built. Can the Secretary of State tell us where he will find this power—not only through the next winter, but over the next 10 years?

The long-term coherence of the UK capacity arrangements is now significantly disrupted. With the capacity market also falling foul of legal challenge, these elements add up to a strategic energy sector that is now being grossly mishandled by this Government. Now that their nuclear plan has gone up in smoke what plan can the Secretary of State spell out to us for finding new backers for these projects? Given the apparent capacity constraint, is he intending to uprate the coming contracts for difference auction, removing the caps on capacity and funding that he has imposed to provide further opportunity to build new renewable energy capacity to replace what has been lost?

For this plant at Wylfa alone, Hitachi had planned to invest £16 billion. Does the Secretary of State have contingency plans, rather than warm words, that he can announce today for the economies of Anglesey and north Wales, where Wylfa was projected to create up to 10,000 jobs at peak periods of construction and 850 permanent jobs? For that matter, what about Moorside and the plant it lost two months ago? Government dithering leading to the cancellation of that plant has seriously undermined the UK’s energy security, its decarbonisation goals and the economy of Cumbria. The people of Moorside expected the plant, and roads, infrastructure and even apartment blocks had been built in preparation, all of which will now go to waste.

I come back the issue of Wylfa. Given that it is the Welsh economy that has lost £16 billion of inward investment, will the Secretary of State think about the £1.3 billion—less than a tenth of the price—required to build the Swansea tidal lagoon?

Given that energy is one of the sectors that creates the most carbon, today’s news deepens our profound concern about the Government’s ability to meet their own climate targets. The Labour party is proud to have announced our goal of reaching net-zero greenhouse gas emissions before 2050 and we congratulate the Government on attempting to catch up with our green ambitions. But given that the clean growth plan was already falling short and the Government were already failing to meet those targets, can the Secretary of State give us some detail today on how he expects to meet UK carbon budgets in the light of today’s developments? Can he assure us he is not intending to replace the low-carbon power that has been lost with new fossil fuel plants?

Finally, there appears to be some confusion about what was and was not said about nuclear power when the Prime Minister met Japanese Prime Minister Shinzō Abe last week. Did she raise Wylfa nuclear power station when she met the Japanese Prime Minister? It is an odd coincidence that this decision from Japan-based Hitachi has come so close to those meetings. Either they talked about the project and what was said was unsatisfactory, and the project was cancelled, or the Prime Minister did not think it worth mentioning, and it was still cancelled.

Confidence in the Government is a very live question today. The people of north Wales and Moorside have every reason to have none in this Administration.

[Greg Clark]

I will respond to the hon. Gentleman’s points, but I will start by saying one thing about nuclear investment. I have been clear in maintaining my support and that of the Government for new nuclear, but, for investments of over 60 years, a degree of cross-party support is required for those commercial investments, which, as we have seen, are difficult to secure.

The hon. Gentleman expressed disappointment that the investment was being suspended, but he himself has said we do not need nuclear power. The Leader of the Opposition has said he is passionately opposed to nuclear power and nuclear weapons in equal measure, the shadow Chancellor said he would end nuclear power within the first 100 days of a Labour Government, and the new Welsh First Minister said:

“I think the attitude to nuclear power we have here in Wales is to be sceptical about it”.

If we in this House want to encourage international investors to invest in new projects, it behoves us to express solidarity and consistency of purpose.

I have been very clear about why Hitachi made this decision. We understand it. It is was commercial decision. The hon. Gentleman did not say whether he would have gone further than we were willing to go. Is he proposing that we take more than one third of the equity—in effect, take Government control and all the risk attached to such an investment? He did not say whether we should be providing a contract for more than £75 per MWh, which would go straight to the bills of customers—both industrial and residential. It is hard to say how we can go beyond financing all the debts. I think, then, that fair-minded Members would accept that we have made a substantial and generous offer, but unfortunately it has not been possible to achieve the outcome that all sides wanted.

The hon. Gentleman asks how we can continue discussions and why the company has suspended, rather than cancelled, the proposals. It is for the reasons I have said. We are going to look at new financing models, including the regulatory asset base model recommended by the Public Accounts Committee. I think it makes sense to do that.

On our future energy needs, the hon. Gentleman was wrong to talk about the next 10 years, because we are talking about supplies beyond that. There is no issue with the future security of supply; National Grid itself has said that. Plans for Wylfa are long term and there is time for the market to react to this announcement. In many ways, the challenge of financing new nuclear is one of falling costs and greater abundance of alternative technologies, which means that nuclear is being out- competed. Far from there being a difficulty with future supply, those are the reasons why the competitiveness of nuclear is more difficult.

The hon. Gentleman mentions the other projects, including at Moorside in Cumbria. As I said, that decision was taken for different reasons, but in the review and the White Paper we will publish, that model will be available to all such sites. Finally, in the case of other renewables, we have seen a great expansion in renewable capacity, and that will continue. He mentioned the case of the Swansea tidal lagoon. No one is more enthusiastic than I about innovation and new technologies, but the truth is that the costs of the proposed project were three times that of Hinkley Point C, and a full programme would make a tiny contribution to our energy supply for a much greater cost.

I hope that we can work together in the weeks and months ahead. The hon. Gentleman is an expert and a dedicated student of energy policy. In considering the White Paper, I hope that we can agree an approach that will command the support of international investors, so that this country can continue to be a nuclear nation.

Smart Meters Bill

Debate between Greg Clark and Alan Whitehead

2nd reading: House of Commons & Money resolution: House of Commons & Programme motion: House of Commons & Ways and Means resolution: House of Commons
Tuesday 24th October 2017 Commons Chamber

[Dr Whitehead]

I am very sorry—it’s Don Valley now, isn’t it?

My right hon. Friend talked about the continuing imbalance of benefit in the roll-out of smart meters, with the benefit appearing to be accruing to energy companies, as opposed to customers. For our part, we support the idea of introducing smart meters across the country to replace the dumb meter system that serves the customer very badly and has historically done so, and is certainly not fit for purpose for the requirements of the different ways of supplying, using and measuring power that are coming our way with the energy revolution that is upon us.

The gain not only to customers but to our energy systems as a whole of having collectively installed, sufficient smart meters across the country to bring in new ways of measuring and predicting use of associating smart meters with smarter grids, thereby saving enormous amounts of further future expenditure in grid strengthening and capacity additions—all to the benefit of a smarter, more resilient, more efficient energy system for the future—suggests that supporting smart meters is right thing to do.

But then we come to the process by which smart meters are rolled out, and there is much to raise an eyebrow about. First, there is the Government’s original choice of who should undertake the roll-out—the energy companies: a model not adopted by any other country managing a smart meter roll-out programme, as my right hon. Friend the Member for Don Valley (Caroline Flint) pointed out. Secondly, there is, as a number of hon. Members have mentioned, the high overall costs built into the roll-out—costs that will eventually land on consumers in the shape of bills on their doormats. Thirdly, there is the truly lamentable performance so far in getting the DCC—the communications company responsible for making smart meters communicate well and on an interoperable basis—up and running so that smart meters, once installed, really can communicate with other and with the system. That communications company has now only just gone live, at the very end of the window for doing so before serious repercussions arise. Fourthly, there was the decision, halfway through the roll-out, to transition from one type of smart meter to another—a process akin to trying to change the wheel of a car while it is driving along the road.

All these issues raise legitimate and far-reaching questions about whether the goal of having a critical mass of smart meters in place by the end of 2020 is likely to be achieved and whether, in the short time available to us, moves can be made to get us back to that goal. The recent reports in the 2016 impact assessment suggest that we are not doing very well on installation—that we are set for an almighty bunching of installations in late 2018 and 2019 that is very daunting, even if vans of installers are not starved of meters to put up because they have been told not to install the old ones and are awaiting supplies of the new ones to install. I welcome the consultation on methods of resolving the possible hiatus in supply during the changeover from SMETS 1 to SMETS 2 meters. However, I am minded—I think the Government will have some difficult decisions to make in this regard—of what we need to do by 2020 in populating the country with smart meters to the extent that we can really make these changes possible, for our collective good, given the sheer number of smart meters that have been installed across the country.

We need to judge the very modest changes to the smart meter roll-out regime in this Bill against that wider background of decisions and progress made in the roll-out itself, and of how far away we are from the goal of having a national smart meter presence that makes all the other energy innovations—and cheaper energy and gas—possible, and to decide whether we should take the opportunity to add further elements of “getting on with it” into the Bill as it progresses through Committee.

We will not oppose this Bill on Second Reading. However, I place the Minister and the Government on notice that in Committee we will closely scrutinise the roll-out provisions currently in place to look at ways in which we can make amends for some of the frankly sloppy decision making that has occurred in the progress of the roll-out, and stiffen the sinews of the programme so that it works as well as it can. It is perhaps no coincidence that the—

[Greg Clark]

Will the hon. Gentleman confirm that the programme motion is generous in providing time for consideration of the Bill?

[Dr Whitehead]

The last time I heard about the progress of the programme motion, there was no agreement on the number of days that could be set out for the Committee stage, so it may well be the case that that concern will be reflected tonight. However, I would emphasise that as far as the main purpose of the Bill—

Energy Price Cap

Debate between Greg Clark and Alan Whitehead

Monday 3rd July 2017 Commons Chamber

[Dr Alan Whitehead (Southampton, Test) (Lab)]

(Urgent Question): To ask the Secretary of State for Business, Energy and Industrial Strategy if he will make a statement on the Government’s intention for an energy price cap.

[The Secretary of State for Business, Energy and Industrial Strategy (Greg Clark)]

Following a two-year inquiry, the Competition and Markets Authority found that energy customers on standard variable tariffs were paying on average £1.4 billion a year more than would be the case in a competitive market. That is completely unacceptable, so my party’s manifesto committed to introduce a safeguard tariff to extend the price protection currently in place for some vulnerable customers—those on pre-payment meters—to more customers on the poorest-value tariffs. The energy regulator, Ofgem, has the powers necessary to impose such a price cap without delay, and I wrote to its chief executive on 21 June to ask it to use its powers to do so. Today, the regulator has replied and announced that it will work with consumer groups to take measures, including extending the current safeguard tariff for those on pre-payment meters to a wider group of consumers, and move urgently to implement these changes.

I welcome this initial proposal—it is a step in the right direction—but I will wait to see the actual proposals turned into action to cut bills, as the test of whether the regulator’s changes go far enough is whether they move sufficiently to eradicate the detriment to consumers that the CMA identified. I remain prepared to legislate if they do not, and I hope that such legislation would command wide support across the House.

[Dr Whitehead]

I thank the Minister for his response. Does he recall that during the election his party placed the promise of an overall cap on energy prices at the centre of its manifesto? Indeed, does he recall the Prime Minister stating:

“I am making this promise: if I am re-elected on 8 June, I will take action to end this injustice by introducing a cap on unfair energy price rises. It will protect around 17 million families on standard variable tariffs from being exploited with sudden and unjustified increases in bills”?

Does the Secretary of State accept that Ofgem’s response to his letter of 21 June on energy prices falls far short of implementing that promise and that, although there are welcome suggestions on safeguarding tariffs and capping warrant charges for the installation of pre-pay meters, those measures would affect only 2.5 million customers, leaving more than 14 million SVT customers completely unprotected from price rises over the next period? Will he confirm that his letter did not ask Ofgem to consider introducing a general price cap? Will he tell the House why it did not, even though the chief executive officer of Ofgem confirmed earlier this year that it would have the discretionary power to implement an energy price cap?

Does the Secretary of State intend to pass legislation to require Ofgem to introduce a price cap, or is he now content to let his firm election promise of a cap fall by the wayside? If so, what does he have to say to the 17 million people on standard variable tariffs who thought that relief from rip-off price rises was on its way but will now feel completely betrayed by this policy U-turn?

Oral Answers to Questions

Debate between Greg Clark and Alan Whitehead

Monday 28th February 2011 Commons Chamber

[The Minister of State, Department for Communities and Local Government (Greg Clark)]

Spending decisions are a matter for local councils, but no council will see its spending power fall by more than 8.8% next year. Councils face difficult decisions owing to a fiscal crisis that was not of their making or of ours. The best councils are expanding the opportunities for the voluntary sector to help them to make savings. The worst-run councils are targeting the sector for disproportionate cuts. We are requiring all councils to be transparent in their actions.

[Dr Whitehead]

Next year, my local authority is cutting more than 20% of its running grants for voluntary and community organisations, which means that organisations such as the citizens advice bureau, the council for voluntary service and advice services generally will find it almost impossible to continue to support the volunteers they have supported over the past year. Does the Minister think that authorities such as Southampton will rue the day they did that, or is he rueing the day that he enabled his Department to acquiesce so readily in the cuts to local government funding that he has endorsed?

[Greg Clark]

I have made it very clear that councils should not cut disproportionately. I hope that the hon. Gentleman will take the opportunity to meet his local council. I understand that the leader of the council has invited every voluntary organisation to come to see what other opportunities there are for them within the council. I also hope that if he does go to the council, he will reflect on the fact that every Conservative and Liberal member has taken a 5% cut in their allowances, but Labour members have refused. When he is in city hall, I hope that he will get his friends there to make their contribution to the voluntary sector.

Oral Answers to Questions

Debate between Greg Clark and Alan Whitehead

Thursday 10th June 2010 Commons Chamber

[Greg Clark]

My right hon. Friend the Secretary of State has written to the Planning Inspectorate to inform it that the Government’s stated policy on such matters is now a material consideration when it reviews applications that have been made and gone to appeal.

[Dr Alan Whitehead (Southampton, Test) (Lab)]

This morning, the Minister for Housing stated that he did not wish to overturn the use classes order changes concerning houses in multiple occupation, but that he would look at them in detail. During the election, he stated that Southampton city council should have all the powers it needed to deal with homes in multiple occupation. It has all the powers it needs as a result of those changes. Is it therefore his intention to water down those changes as a result of looking at them in detail?