Oral Answers to Questions

Greg Hands Excerpts

Tuesday 16th November 2021 Commons Chamber

[Shabana Mahmood (Birmingham, Ladywood) (Lab)]

8. What steps he is taking to help protect (a) business and (b) consumers from rising wholesale gas prices.

[The Minister of State, Department for Business, Energy and Industrial Strategy (Greg Hands)]

The Government’s energy price cap will ensure that millions of households are protected from an instant wave of bill increases this winter. We also have well-established schemes in place for those businesses that are most exposed to energy prices.

[Neil Parish]

Apologies, Mr Speaker—some of us are very slow learners.

With global energy markets in a state of flux, Tiverton and Honiton constituents, particularly elderly and vulnerable residents, are concerned about the sharp increases in household bills. With Christmas just around the corner, will my right hon. Friend assure me that the Government will do all they can to stabilise the UK energy sector and ensure that those who experience fuel insecurity have the support they need this winter? Many rural households are off grid, so oil and electricity prices are also of great concern.

[Greg Hands]

I assure my hon. Friend that protecting consumers is our No. 1 priority. The Secretary of State and I engage with Ofgem very often and with energy suppliers constantly, to monitor the health of the energy market. The Government’s warm homes discount, winter fuel payment and cold weather payment schemes will support low-income and vulnerable households throughout the winter.

[Shabana Mahmood]

Nothing that the Minister has said today will provide immediate relief to enough of the people who are struggling throughout the country. I have had constituents tell me that they are sitting in the cold to try to save money, yet the Government rejected Labour’s call to cut VAT on energy bills. Such a cut would have provided immediate relief to people in my constituency. What on earth does the Minister expect my constituents to do as they face a long, difficult and cold winter, with rising prices and rising energy prices in particular?

[Greg Hands]

Of course, I share the hon. Lady’s concern for vulnerable people who face potential rises in energy prices. She will know that VAT is a matter for the Treasury but, of course, a VAT cut would be very untargeted towards vulnerable people. That is why we have schemes in place, such as the warm home discount, winter fuel payments and cold weather payments, to help vulnerable and elderly people. The Government have got the policy right.

[David Duguid (Banff and Buchan) (Con)]

On energy security, UK natural gas production has come down from around two thirds of UK demand in 2015 to less than half in the first quarter of this year—with, by the way, around 25% coming ashore at St Fergus in my constituency. Does my right hon. Friend agree that although we see a welcome increase in UK renewable capacity, it is far preferable, while a reducing demand for gas still exists, to source that gas domestically rather than to depend on foreign imports?

[Greg Hands]

My hon. Friend is absolutely right that we will always prefer British gas production to foreign imports. Some 50% of the gas we currently consume comes from the UK continental shelf, with an additional 30% from Norway. My hon. Friend is right to mention the transition; I know how much he fights for his constituency’s huge extent and variety of energy producers. Earlier this year, we were delighted to agree the North sea sector transition deal, which will offer a fantastic future for my hon. Friend’s constituents and those right across north-east Scotland.

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

I think the technically correct answer to the question posed by my hon. Friend the Member for Birmingham, Ladywood (Shabana Mahmood) is (a) none and (b) none.

The Secretary of State claimed that he was in talks with the Treasury about assistance for energy-intensive industries a month ago; it turns out that he was not, and nothing has happened since. Meanwhile, wholesale gas prices remain at around 200p per therm, compared with 39p per therm a year ago. Industry is suffering grievously and 40% of energy companies have now gone bust, leaving more than 2 million customers without a supplier and forced to take on new suppliers, often at great cost to their bills. Even with the price cap, bills are likely to rise by a further £200 in the spring. This is a train wreck, so what is the Minister doing now to rescue passengers from the carriages and put the rolling stock back on the lines? Or will he just continue to act the part of a disinterested bystander?

[Greg Hands]

That allegation is rather unfair. We are engaging continuously with the Treasury on these matters. We have already put in place £2 billion of funds to help with the cost of electricity and to protect jobs. We have the £350 million Industrial Energy Transformation Fund, and the Under-Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend the Member for North East Derbyshire (Lee Rowley), meets regularly—and has done so very recently—with the Energy Intensive Users Group.

[Bob Seely (Isle of Wight) (Con)]

7. What plans his Department has to support the growth of (a) tidal and (b) nuclear power generation.

[The Minister of State, Department for Business, Energy and Industrial Strategy (Greg Hands)]

Our most recent contract for difference allocation round is the biggest ever. Tidal stream will be eligible to compete in pot 2 of the round. With regards to nuclear power, this Government see a vital role for new nuclear. We have just started considering the Nuclear Energy (Financing) Bill in Committee and, of course, we understand that net zero needs nuclear.

[Bob Seely]

I congratulate the Secretary of State and his team on putting in place a long-term energy strategy, because we have seen from Germany’s example how disastrous it is not to have that long-term strategy. Very quickly, on tidal, is the financing generous enough, because I understand that some tidal producers are saying that it is not? Secondly, on nuclear, will the £210 million for small-scale reactors—a brilliant thing to do—get us to a position where we are actually producing those reactors, or is this just an initial round of research?

[Greg Hands]

My hon. Friend has dextrously managed to get in two supplementary questions there. On tidal, of course we set the allocation round in September. That round will open on 13 December. Project developers can declare an intention to bid. May I commend his Perpetuus Tidal Energy Centre on the Isle of Wight for its brilliant work on tidal energy?

With regard to small modular reactors, the announcement made by my right hon. Friend the Secretary of State and his visit last week made it absolutely clear that there is strong support for British technology and British SMR design, and we want to see that move forward and make the UK a world leader in small modular reactors.

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

In the Budget, £1.7 billion was allocated just to develop Sizewell C to a final investment decision. The Government are putting through the Nuclear Energy (Financing) Bill to enter into a 60-year contract for that project, and yet, in terms of tidal stream, there was no Government support whatsoever. Without a ringfenced pot of money, tidal stream will not be able to compete in pot 2, so will the Government urgently reconsider the request for a £71 million pot of ringfenced money?

[Greg Hands]

Since 2003 successive Governments have provided innovation funding of £175 million to wave and tidal sectors, and there has been £80 million since 2010. We are strong supporters of tidal stream. The Prime Minister was explicit from the Dispatch Box yesterday, reiterating his support. What we now need to do is work with the sector to demonstrate cost reductions and the potential for this technology.

[Mr David Jones (Clwyd West) (Con)]

Like nuclear, tidal range has the capacity to deliver predictable large-scale generation with none of the problems of intermittence associated with other renewable technologies. The proposed Colwyn Bay tidal lagoon would have a generating capacity of more than 2 GW. There is considerable local support for the project, and the proposed developers are anxious to proceed. Is my right hon. Friend willing to meet with me and my hon. Friends the Members for Aberconwy (Robin Millar) and for Vale of Clwyd (Dr Davies), who also have an interest in the project, to discuss a way of taking it forward?

[Greg Hands]

I would be delighted to have the opportunity to meet my right hon. Friend and his colleagues. I am always delighted to see so much energy in north Wales when it comes to questions of energy. I remind him that, when I say that we need to demonstrate cost reductions, the most recent reckoning on prices is that tidal stream is around £220 per MWh, wave is about £280 per MWh, and offshore wind is only about £40 per MWh. With scaling up and investment in the technology, we would expect those costs to come down, but I stress the current disparity between those sectors.

[Mr Alistair Carmichael (Orkney and Shetland) (LD)]

In order to get those costs to come down, though, we first have to have the ringfenced pot for tidal stream energy. At the Dispatch Box on 3 November—in column 926 of Hansard—the Prime Minister undertook in response to me that he would look again at this question. There is a hard deadline approaching at the end of the month with the contract for difference. When will we hear the outcome of the Prime Minister’s further look again at this question?

[Greg Hands]

The right hon. Gentleman will have heard the Prime Minister’s words on this matter yesterday from the Dispatch Box, when he was asked about it in relation to his COP statement. I have nothing new to say on the allocation round. We announced the parameters for allocation round 4, which will open in just a few weeks’ time, on 13 December. Project developers will be able to declare their intention to bid, and the round very much includes technologies such as tidal and wave, and other pot 2 emerging technologies.

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[Mark Menzies (Fylde) (Con)]

16. What steps he is taking to deliver new nuclear power generation.

[The Minister of State, Department for Business, Energy and Industrial Strategy (Greg Hands)]

This Government are doubling down on our plan to deploy more home-grown, affordable clean energy in this country, and we are putting new nuclear at the heart of that plan. In the past four weeks alone, we have announced £1.7 billion allocated for a new large-scale nuclear power station, a new nuclear Bill to boost private capital and cut build costs, £210 million to back Rolls-Royce’s small modular reactor plan, and £120 million for future nuclear projects—new nuclear made and manufactured here in Britain.

[Paul Bristow]

I welcome my right hon. Friend’s commitment to increasing the generation of renewable energy in the UK and attracting investment in our renewable energy sector, especially the nuclear energy industry. The green industrial revolution is well under way in Peterborough. Will he join me in congratulating Peter Brotherhood, a manufacturer of 150 years standing, whose modular steam turbine offering, manufactured in the heart of my city of Peterborough, can promote further innovation in the nuclear energy sector?

[Greg Hands]

A previous question referred to Teesside as the centre of the green industrial revolution, but Peterborough is also one of the great centres in this country of the green industrial revolution, and there is no better champion of that than my hon. Friend, who is right at the centre of it. He is right that the £120 million nuclear innovation fund will create options for future nuclear capability, including the recent Rolls-Royce small modular reactors, which have £210 million of funding. There are plenty of opportunities there for his constituents to get into, and I thank him for his championing of the green industrial revolution.

[Mark Menzies]

I welcome the Government’s commitment to a new generation of nuclear power plants, representing a big step in our move towards net zero. Fylde, as the home of Springfields, the UK’s only civil nuclear manufacturing plant, will be playing its part in this transition, but following the recent announcements of the £210 million in new Government funding for Roll-Royce SMRs, what steps is the Minister taking to ensure that the fuel for the next generation of nuclear power will be manufactured in the UK, and in Lancashire?

[Greg Hands]

There is plenty of interest in Lancashire, Mr Speaker. My hon. Friend knows that I am well aware of how important Springfields is. In fact, we had meetings in the Department about it, as it is the only civil nuclear fuel manufacturing plant, as he rightly points out. It will play an important role as we further develop our new nuclear capability. I am looking forward to working very closely with my hon. Friend, who is a consistent champion of nuclear in this country.

[Jim Shannon (Strangford) (DUP)]

Northern Ireland does not have any nuclear power generation possibilities, but can the Minister outline how Northern Ireland can benefit from nuclear power, because we want to have the opportunity, the same as the rest of the United Kingdom of Great Britain and Northern Ireland?

[Greg Hands]

We are a Government for the whole United Kingdom. The hon. Member will know that Northern Ireland is importantly different from Great Britain in its electricity generation, grid and network. Overall, the UK’s nuclear capability will offer fantastic job opportunities—high-skill, high-tech jobs—for people from right the way across the United Kingdom, including Northern Ireland.

[Munira Wilson (Twickenham) (LD)]

13. What steps his Department is taking to support greener, better-insulated homes.

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[Sir David Evennett (Bexleyheath and Crayford) (Con)]

T7. I welcome the steps the Government have taken in the last month to reinvigorate the UK’s nuclear industry. Does my right hon. Friend agree with me that, thanks to this investment, we will have a cleaner, greener and more secure energy system that is less dependent on volatile fossil fuels?

[The Minister of State, Department for Business, Energy and Industrial Strategy (Greg Hands)]

I thank my right hon. Friend for his long-standing interest in this question. He will certainly know that, although nuclear is 16% of our current electricity generation, 12 of the 13 current nuclear power plants will be decommissioned or will no longer be producing by 2030. It is absolutely vital that we renew our nuclear capability, and I look forward to my right hon. Friend helping and supporting us in that effort.

[Matt Western (Warwick and Leamington) (Lab)]

T5. A month ago, the Secretary of State claimed that he had not commented on the Aquind project, yet two years before he had actually written to Alexander Temerko, just three days after seeing him at the Conservative conference, to confirm the Government’s support for the project. Will the Secretary of State now correct the record, confirm that he has indeed commented on the Aquind project and recuse himself from the decision-making process?

[Greg Hands]

Mr Speaker—[Interruption.] I will answer that question, because the Secretary of State is due to make a decision on the application by 21 January 2022, and the Secretary of State of course has a quasi-judicial role in determining this live planning application so it would not be appropriate to comment on specific matters regarding the proposals as that might be seen as prejudicing the decision-making process.

[Nickie Aiken (Cities of London and Westminster) (Con)]

T8.   May I first pay tribute to the BEIS ministerial team for its outstanding work during the pandemic to support businesses in central London, and particularly the Minister for London, my hon. Friend the Member for Sutton and Cheam (Paul Scully), who I know has worked tirelessly, and I thank him? What I am hearing now as we rebuild our economy is that businesses across the Cities of London and Westminster are seeing a real rise in vacancies, which is inhibiting their ability to repair their balance sheets and recover their cash reserves and has halted their ability to grow their businesses. We have got the jobs, where are the workers? What steps is the Minister for London taking to help businesses even further, particularly in the hospitality, retail and leisure sectors?

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[Dr Jamie Wallis (Bridgend) (Con)]

T10. I recently had the pleasure of meeting with Infinite Renewables in my constituency, which has done great work facilitating renewable projects across the UK. It pointed out to me that the strike price for nuclear power provides generous support to nuclear projects, but those supported by private wire power purchasing agreements in the renewables sector get very little support. What are the Government doing to facilitate private wire PPA renewables in the UK?

[Greg Hands]

I welcome Infinite’s work supporting renewable projects and my hon. Friend’s engagement in this. PPAs can improve the financial viability of renewables built without Government support. We anticipate that PPAs will complement Government mechanisms such as the contracts for difference scheme. Officials are investigating whether Government can play a role in encouraging further growth in the PPA market, and of course I am happy to meet my hon. Friend on this at any time.

[Joanna Cherry (Edinburgh South West) (SNP)]

As my hon. Friend the Member for East Renfrewshire (Kirsten Oswald) said, Scotland’s world-leading carbon capture and storage project at St Fergus was snubbed by the Government in favour of their pork-barrel interests in the red wall. Will the Secretary of State guarantee the Acorn team funding in the next round, or should we conclude that Scotland can only decarbonise with independence?

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[Greg Hands]

I thank my hon. Friend for his continual engagement on this issue. He will know that I met his colleagues in the OffSET group of MPs—the Off Shore Electricity Grid Task Force—very recently. On the offshore transmission network review, Ofgem has consulted on options for delivery models for offshore connections, including a regulated asset base approach. There continues to be ongoing work, and I am looking forward to meeting my hon. Friend at the next meeting of OffSET, or individually.

[Mrs Emma Lewell-Buck (South Shields) (Lab)]

Under this Government, the gig economy workforce has trebled in the last five years, fire and rehire is accepted, zero-hours contracts are supported, inadequate sick pay is ignored, and sanctions for non-payment of the minimum wage are absolutely pitiful. Why, then, did the Government ditch their own employment Bill and block the private Member’s Bill introduced by my hon. Friend the Member for Brent North (Barry Gardiner)?