Nuclear Update

Debate between Greg Clark and Stephen Crabb

Thursday 17th January 2019 Commons Chamber

[Stephen Crabb (Preseli Pembrokeshire) (Con)]

I thank my right hon. Friend for his statement and for the extraordinary lengths that he was willing to go to in trying to create the right conditions for this important north Wales project to happen. However, given Hitachi’s decision, given the decision on Moorside and, in fact, given the failure of a whole swathe of Japanese nuclear projects around the world, are the days of relying on mammoth nuclear power stations that make huge demands of taxpayers’ cash over? Should we not be putting more energy into examining smaller nuclear reactor technology?

[Greg Clark]

My right hon. Friend is right that small modular reactors have significant potential. The nuclear sector deal that we agreed with the sector and published last year contains a substantial commitment to small modular reactors, many of which would be deployable on the sites of existing and recently decommissioned nuclear reactors. However, even large new nuclear reactors can make a useful contribution. There is a challenge in every country, and this is by no means just a feature of Japanese investors. I have described clearly and, I hope, candidly the challenges that exist given the abundant availability and falling prices of alternatives. That is why we will take forward a serious assessment of whether a different financing model might make the economics more competitive. Again, the sector deal that we struck contains a programme to reduce the build costs of new nuclear, which would of course also help its financeability.

Energy Policy

Debate between Greg Clark and Stephen Crabb

Monday 25th June 2018 Commons Chamber

[Greg Clark]

On the hon. Gentleman’s last point, my understanding is that the Welsh Government support the option of a third runway at Heathrow; I am not sure whether that is a co-ordinated position.

The hon. Gentleman asked a number of questions. I understand his disappointment that we have not been able to approve the proposal, but he will know that we all—be it the UK Government or the Welsh Government —have to be responsible stewards of taxpayers’ and consumers’ money. He asked about the analysis that has been made and the time that has been put into this decision. It was the request of the Welsh Government and the recommendation of Charles Hendry that we consider alternative suggestions as to the economic impact of the proposal. That is what we have done, and I have been willing to extend the analysis and leave no stone unturned to see whether this project can be approved.

The hon. Gentleman knows that our record on renewables is one of the strongest in the world, particularly for offshore wind, in which Wales—as well as every other part of the United Kingdom—is a huge beneficiary. We have quadrupled our deployment of renewables since 2010. We are the world’s leader in offshore wind, creating jobs and exports around the world. If we were to use the funds at less value for money—that is, take them from that very successful supply chain and deploy them instead to the programme of a tidal lagoon—the consequence would be job losses in Wales and other parts of the United Kingdom. It is the commitment to continue what has been a successful strategy of achieving jobs all around the country in offshore wind that provides the reason why we need to be rigorous about this.

Listening to the hon. Gentleman, one would think that what ordinary working people and businesses have to pay for their energy is a matter of complete indifference to him. Is there any limit at all to what he would he would make consumers pay? The Swansea lagoon would cost three times as much—I repeat, three times as much—as having the same electricity generated by offshore wind here in the UK. The whole tidal programme would cost £50 billion when we could have the same amount from wind for nearer to £20 billion. Is it Labour’s policy to charge £700 per household more than is needed in the first place? As for economic development in Wales, it would be cheaper to write a cheque for £15,000 to every single household in Wales than to subsidise this particular proposal. I am afraid that his response sums up the approach of spending whatever it takes, no matter how wasteful of consumers’ and taxpayers’ money that is.

The hon. Gentleman talks about industrial strategy, but the clue is in the word “strategy”. A strategy does not spray consumers’ or taxpayers’ money on any proposal—it requires a rigorous assessment. We are a leader in offshore wind because we took a decision to focus on a technology for which costs could come down and there was a massive global market in which we could create jobs. What he proposes would reverse that by doling out subsidy to whoever asks loudest, rather than what has been rigorously assessed. That is not strategic.

In summary, Labour would pay £700 per household for less reliable electricity, fewer exports from offshore wind and fewer jobs, including in East Anglia, on Teesside and in Scotland—and, yes, in Wales and Northern Ireland, too. It would saddle taxpayers with a decommissioning cost of over £1 billion. We will always put the interests of taxpayers, and working people who pay bills, first. I would hope that a responsible Opposition would acknowledge the seriousness of the analysis that has been made and recognise that its conclusion is rigorous.

[Stephen Crabb (Preseli Pembrokeshire) (Con)]

Even Conservative Members who have been the strongest supporters of the lagoon project have always known that there was a serious value-for-money question to be answered. Will my right hon. Friend confirm that every single avenue was explored to try to find a financial solution to make this happen, and that today’s announcement does not close the door on future investment in tidal and wave power that would give us reliable, clean energy into the 21st century and beyond?

[Greg Clark]

I can confirm that. Anyone who has concentrated on this proposal and seen the assessment that has been made would conclude that my hon. Friends and I have left no stone unturned in looking at all possibilities that might improve the economic case. However, when the conclusion is that something is so much more expensive than other low-carbon technologies, we have to follow that evidence and protect consumers and taxpayers from paying so much more than they need to pay. My right hon. Friend is absolutely right that we continue to believe in innovation. We have spent £100 million on new energy research and development. We will continue to do that. We have had other proposals that suggest they would be cheaper. I am very happy to continue work with other promoters of schemes to see whether what would be an attractive proposal can be implemented in a way that would be value for money.

Leaving the EU: Airbus Risk Assessment

Debate between Greg Clark and Stephen Crabb

Monday 25th June 2018 Commons Chamber

[Greg Clark]

The supply chain of Airbus and indeed of every company in the sector is pervasive right across the UK, and many employers—small and large—across many of our constituencies contribute to it. The hon. Lady asks about the impact of leaving the single market. The purpose of the negotiations in the months ahead is to make sure, as we leave the European Union and as we leave the single market—she knows that it is not possible to be a member of the single market and to be leaving the European Union—that we have an agreement that allows us to trade without frictions and without tariffs. That is our purpose, and it is what the Prime Minister has very clearly set out. It is within our grasp, and I am confident we will be able to achieve it.

[Stephen Crabb (Preseli Pembrokeshire) (Con)]

Is not the truth that the kind of Brexit deal that will fully safeguard our industrial base will be one that requires significant compromises? Does my right hon. Friend agree that we are fast approaching the moment when we need to spell out, for the benefit of business and industry, what those compromises look like?

[Greg Clark]

My right hon. Friend is right that any negotiation of course involves give and take. That is true on both sides, and it is important to remember that these observations have been addressed to the European Union as well as to the UK. My right hon. Friend talks about the time. As I said to the Chairman of the Exiting the European Union Committee, the right hon. Member for Leeds Central (Hilary Benn), now is the time when we are moving on from discussing the terms of our withdrawal to what our future economic partnership looks like. This is precisely the time at which we will set out and agree, I hope, a long-term future in which Airbus and many other companies can prosper.

Nuclear Power

Debate between Greg Clark and Stephen Crabb

Monday 4th June 2018 Commons Chamber

[Greg Clark]

The hon. Lady will know from her involvement in the scrutiny of the Nuclear Safeguards Bill that we have made very good progress both on the proposed agreements with other nuclear countries and on our intended association with Euratom. I regard this as an area in which it is clearly in everyone’s interest to have the greatest possible continuity of the existing arrangements. That is no secret; it is known to any partner and any investor, including Hitachi.

[Stephen Crabb (Preseli Pembrokeshire) (Con)]

I welcome my right hon. Friend’s statement. He will know that the Wylfa Newydd project will be the largest construction project in Wales for more than a generation, so what discussions is he having with the Welsh Government to ensure that we maximise the opportunities for the Welsh supply chain, which will be the backbone of delivering this important project in Anglesey?

[Greg Clark]

Of course, the opportunities for Wales follow from exactly the point that my right hon. Friend the Member for Sevenoaks (Sir Michael Fallon) made. The knowledge of the investment that will be made there provides great opportunities for people in north Wales and beyond to develop the skills that will be in high demand and to ensure that the engineering companies and other suppliers can gear up for this important work. Before I came to the House today I discussed the matter with the First Minister, and my right hon. Friend the Secretary of State for Wales spoke to Ken Skates, the Cabinet Secretary for Economy and Transport. We will work closely together to ensure that across Wales and, indeed, the United Kingdom, these opportunities result in real jobs and prosperity for the people of Wales and the UK.

Domestic Gas and Electricity (Tariff Cap) Bill

Debate between Greg Clark and Stephen Crabb

2nd reading: House of Commons
Tuesday 6th March 2018 Commons Chamber

[Greg Clark]

I disagree with the hon. Gentleman. As I will go on to explain, part of the problem that we are addressing is that the competition authorities have for some time identified this tendency on the part of companies, and the Bill’s proposals will give Ofgem the power to correct that. He brings me to my next point: for all the progress that has been made since privatisation, it is clear that the market is not perfect. That is indeed why the coalition Government referred the industry to the Competition and Markets Authority to assess how competitive the retail market was.

In 2016, the CMA concluded, following a two-year investigation, that

“our view is that the overarching feature of weak customer response gives suppliers a position of unilateral market power concerning their inactive customer base and that suppliers have the ability to exploit such a position through their pricing policies…by pricing their standard variable tariffs materially above a level that can be justified by cost differences from their nonstandard tariffs; and/or by pricing above a level that is justified by the costs incurred in operating an efficient domestic retail supply business.”

The CMA identified the detriment to consumers—that is, how much consumers are overpaying compared with a fully competitive market—at an average of £1.4 billion a year. This comes from the approach to pricing that is practised by the biggest six energy companies, which for the most part, inherited their customers from previous monopolies. Their approach is to charge their customers on default tariffs much more than those who engage in the competitive part of the market. Currently, the differential for the big six stands at around £300 a year. Those paying the default tariff are much more likely to be in reduced circumstances; 80% of households with an income of less than £18,000 did not switch supplier in the past three years.

From the outset, the UK’s energy market has had a regulator whose responsibility is to act in the interests of consumers. Indeed, if we look back, we can see that Britain has long been a pioneer in not only the privatisation and liberalisation of industries but the regulation of these utility industries, too. Indeed, the British model of privatising state-owned monopolies is to liberalise the market to allow new competitors in and to protect consumers against the power of incumbents—from BT to British Gas—which enjoy an advantage of inertia and loyalty. That has always been recognised in our regulatory arrangements.

[Stephen Crabb (Preseli Pembrokeshire) (Con)]

My right hon. Friend is making a very important point about regulation, but is not part of the context of the Bill the fact that the regulator, Ofgem, was far too slow to respond to the pressures on people, particularly those on low incomes and in vulnerable households?

[Greg Clark]

I agree with my right hon. Friend, and I was making the point that we have long been a pioneer in regulation, which has meant adapting regulation to the changing circumstances. We started with RPI minus X, and that evolved into different models, including looking at the regulated asset base. In my view, it is necessary to keep up with our traditions of acting boldly to protect consumers’ interests, and we should be agile in response to new behaviours, especially those brought on by new technologies.

Industrial Strategy Consultation

Debate between Greg Clark and Stephen Crabb

Monday 23rd January 2017 Commons Chamber

[Greg Clark]

Throughout this document, we want to close the gaps that mean that we do not achieve our full performance, and that is absolutely the case when it comes to the position of women at the highest levels in science, for example, and in research. As the Minister in the Department, I have been successful in the past in driving the appointments under my gift to increase the proportion of women at the top level. However, the hon. Lady is absolutely right that, when there is under-representation of people of talent, the whole economy suffers, and that should be corrected.

[Stephen Crabb (Preseli Pembrokeshire) (Con)]

I strongly welcome today’s statement and the consultation paper. When we visit large innovative manufacturers such as JCB, Toyota and Airbus, they all speak about the importance of the relationship with their local further education colleges. Does my right hon. Friend agree that one of the objectives of the strategy should be to replicate examples of excellence and to drive up standards in the FE sector so that even more workers and employers share in a picture of world-class skills education?

[Greg Clark]

My right hon. Friend is absolutely right. One of the proposals on which we are consulting is to have much better connections between local employers and further education to make sure that the skills that are being provided are those that can be taken up immediately in these industries.