Oral Answers to Questions

Debate between Harriet Cross and Michael Shanks

Tuesday 12th November 2024 Commons Chamber

[Michael Shanks]

I know well my hon. Friend’s constituency—it is next door to mine—and both wind farms she mentions. She says quite rightly that, for all the expansion in those technologies over recent years, very few of those jobs, particularly in manufacturing, have been in this country. We will do everything we can, through Great British Energy and the clean industry bonus we have announced today, to grow our domestic supply chains, build industry in this country and win jobs for Britain.

[Harriet Cross (Gordon and Buchan) (Con)]

Last week, just days after the Budget, Apache announced that it would exit the North sea by 2029. It said:

“The onerous financial impact of the energy profits levy…makes production…beyond 2029 uneconomic.”

What assessment have the Government made of the impact of those policies on current jobs in north-east Scotland, and how will Great British Energy compensate for the loss of those jobs?

[Michael Shanks]

We are working with industry in the north-east of Scotland to ensure that this is a just and prosperous transition. We have announced our next steps of responding to court judgments, and a consultation is open at the moment. We will have more to say about that in the months ahead. The hon. Lady must recognise that if she wants to see investment from Great British Energy, she might actually have to support its creation in the first place. The Conservatives cannot have it both ways; either they want a public energy company to invest in the jobs of the future—

Great British Energy Bill (Fifth sitting)

Debate between Harriet Cross and Michael Shanks

Committee stage
Tuesday 15th October 2024 Public Bill Committees

[Michael Shanks]

I have to say that of all the amendments before the Committee, I find this one utterly extraordinary. The shadow Minister’s amendment says that Great British Energy

“must take all reasonable steps to satisfy itself at the time of any investment in…infrastructure that connection to the National Grid will be made in time for energy produced from the relevant investment asset coming onstream.”

The recognition, after 14 years, that dealing with the issues with connections to the national grid should somehow be important is extraordinary. For the hon. Gentleman to wake up this morning, just a few months after leaving government, and decide that fixing this problem is a massive priority is quite something.

I am genuinely concerned by some of the language that we have heard today. The shadow Minister spoke, quite rightly, about Cameronian support for the climate. I wonder whether the Conservative party, after such a short time, ever takes a look at itself and wonders whether the rhetoric that it uses about the mechanisms we are going to use to tackle the climate crisis is in the right place. I know we have some net zero sceptics in the running to lead the party, but it is quite extraordinary to say in one breath that there are huge connectivity challenges for the country and that communities are “under siege”.

[Harriet Cross (Gordon and Buchan) (Con)]

I understand that in some constituencies this might not seem to be an issue, but in the north-east of Scotland it is a massive issue. For example, I have a town in my constituency called Kintore, which is next to a place called Leylodge. It is getting a 3 GW hydrogen plant next to an extended substation, with at least four or five battery plants and all the new pylons coming in to feed that. If the residents of Leylodge, where there are about 40 houses, and Kintore, where they number around 4,500—and similarly those in New Deer, up in the north—do not feel under siege, how do they feel?

[Michael Shanks]

I think that doubling down on the language is not helpful either, but I will come back to both those points.

I recognise the importance of the point about communities and a more strategic approach to infrastructure to ensure a balance. That is why we have commissioned the National Energy System Operator to look at the strategic spatial energy plan, which is important in how we look at energy in a strategic way. To say that communities are under siege is not the right language. This is nationally important infrastructure.

The Opposition do not support Great British Energy, but as my hon. Friend the Member for Na h-Eileanan an Iar said, Great British Energy is one mechanism whereby communities can benefit from infrastructure where they are not benefiting at the moment.

Great British Energy Bill (Third sitting)

Debate between Harriet Cross and Michael Shanks

Committee stage
Thursday 10th October 2024 Public Bill Committees

[Michael Shanks]

They cut more than £100 million last year to plug gaps in their own budget. If we are looking at energy efficiency, the right hon. Gentleman could look closer to home at what his own Government in Scotland are doing.

To return to the Bill, I want to address both paragraphs in the Liberal Democrats’ amendment 10. First, the new object proposed in paragraph (e) would mean that Great British Energy’s objects included facilitating and participating in emergency home insulation programmes. Several of my hon. Friends have pointed out that although those programmes are incredibly important—I will come in a moment on to what the UK Government are already doing on the issue—it is important to detach the Bill from every other part of our energy policy. Although I totally understand the perspective that says, “These issues are important. Let’s put them on the face of a Bill to say so,” it is really important to say that the Bill itself does matter. This is about setting up and delivering the Great British Energy company. It is not the answer to every single part of the energy system. There are places where we are already moving forward on home insulation programmes, such as the warm homes fund, and it would be more appropriate to talk about those matters in that connection.

That is not to downplay the importance of the issue. As a Government, we are committed to taking bold action. Within the first 100 days, my colleague the Minister for Energy Consumers, my hon. Friend the Member for Peckham (Miatta Fahnbulleh), has outlined the work that we will do on this. The warm homes plan that we have announced is the most ambitious such plan ever. It will be implemented from the spring, delivering cleaner, cheaper energy in the process and ensuring that people, particularly in those low-income households where fuel costs already account for a disproportionate amount of income, can spend less money on them because their home is insulated and warm. That is a right that everyone should have.

[Harriet Cross (Gordon and Buchan) (Con)]

Does the Minister appreciate that although in the run-up to the election it was assumed, or said, quite often that GB Energy would save households £300, that figure seems now to have been dropped? Is this not a mechanism to ensure that low-income households see some benefit from the Bill? They will not necessarily take the Government’s word for it that it may come later, when we have already seen announcements such as the figure of £300 being dropped.

[Michael Shanks]

We have not dropped any announcement on reducing bills, but GB Energy was not going to be the single thing that would deliver that; it was the Government’s whole energy strategy. It is important to say that. I said in my evidence to the Committee on Tuesday that GB Energy is an important part of delivering that, but it is not a silver bullet. It will not be the thing that deals with every single aspect of our energy policy. It is also about what we are doing, for example, around increasing the renewables auction to get more cheaper energy on to the grid. It is about what we are doing around planning, consenting and connections. All that work is related to bringing down bills in the long term.

The Conservative party—the party that was in government when all our constituents suffered some of the highest price spikes that we have ever experienced—has to recognise, as it did for many years until it moved away from this policy, that the only way to reduce our dependence on the volatile markets that have led to increases in bills is to move towards greener, cheaper energy in the long term. That is what GB Energy is about delivering, that is what will bring down bills in the long term, and that is what we continue to deliver through this Bill.

I turn to paragraph (f) of amendment 10, which I am afraid we cannot support today, partly because it says what is already in the Bill on expanding renewable energy and technology. The Bill itself facilitates exactly those points and defines clean energy as

“energy produced from sources other than fossil fuels.”

That existing object already enables Great British Energy to drive the deployment of clean energy, helping to boost our energy independence, create jobs and ensure that communities reap the benefit of home-grown energy. Therefore, as a whole, amendment 10 is unnecessary, as the Bill already enables all of those points in clause 3.

The words of the hon. Member for South Cambridgeshire are heartfelt and have been genuinely heard; I hope she gets that sense from all my hon. Friends and me. Such initiatives are an important part, not of GB Energy in itself, but of the whole Government’s mission to make communities in their households much safer from the lack of insulation and cold homes from which they are suffering at the moment. For those reasons, we will not support the amendment, and I hope that the hon. Lady will not press it.

--- Later in debate ---

[Michael Shanks]

He stops short of that.

The shadow Minister spoke earlier about the rising bills caused by Putin’s invasion of Ukraine, as if somehow the UK had no vulnerabilities that particularly exposed us to that invasion. Of course it was an external factor, but it led to huge price spikes in this country, and we are still exposed to volatile fossil fuel markets. We are determined to push towards energy security through cleaner green energy. That is moving at pace—our recent renewables auction was the biggest we have ever had, with 131 projects—and Great British Energy will drive that forward.

[Harriet Cross]

We have already discussed the financial assistance in the Bill. It is therefore anticipated that there may be financial strain. Given that the objects in the Bill do not include reducing bills, what guarantee is there that reducing bills will be a priority if and when finances become tight?

[Michael Shanks]

On the financial point, the Bill is an enabling mechanism, like a number of other pieces of legislation, including the UK Infrastructure Bank Act 2023, which the hon. Lady’s party introduced in government to allow the Secretary of State to give additional funding to companies. We said throughout the election that we would reduce energy bills, and we stand by that, but we cannot flick a switch. The idea that some Members have put forward that somehow, after 14 years of chaos from the Conservative party, a Government can come in and, within 100 days, turn everything around overnight is simply and deliberately disingenuous. Conservative Members take no responsibility for the actions of the previous Government.

We are putting in place as quickly as possible the basis for delivering energy security in the long term and removing volatility from our energy market, so that we can deliver cheaper bills for everyone in the long term. We made no pledge during the election that we would do it in 100 days, a year or two years, because we know fine well that that commitment will take time. But it is the right journey for us to be on, and it is right that we have started by building the energy resilience we need in the system.

[Michael Shanks]

It is an important point, and I take it in the spirit in which the right hon. Gentleman says he intends it, but nobody is in a position to say what will happen to bills on a particular date. They will start to come down as our exposure to more expensive forms of energy is reduced, but the price cap has already increased because we continue to be exposed to those international markets, and there are actions taken by the previous Government that will continue as we move into the winter. We are doing everything we can to turn that around as quickly as possible.

The right hon. Gentleman knows as well as anyone that at the next election we will absolutely be judged on this and on a whole series of commitments that we have made, as any party is judged on its commitments in elections. We stand by that. We are doing everything we possibly can to deliver the change that is necessary. It will bring down bills in the long term. It will be difficult— I am not suggesting that it will not—but it is a commitment that we have made and it is one that we will work towards.

[Harriet Cross]

Just for clarity, will the other changes that Labour is bringing in, such as ending North sea licences, increasing and extending the windfall tax and ending investment allowances, make us more or less secure in the meantime, before GB Energy is set up? Will they expose us more or less to the international market?

Great British Energy Bill (Fourth sitting)

Debate between Harriet Cross and Michael Shanks

Committee stage
Thursday 10th October 2024 Public Bill Committees

[Michael Shanks]

That is not what I said at all. What I said a moment ago is exactly the same, which is that in the short term—in the start-up phase of the company—there will be a few hundred people. That is exactly what Juergen Maier said. In future, our aim—particularly with the right hon. Gentleman’s support, which I was not expecting at the start of today—is that it will grow even further, into a much bigger company. As a result, we expect that there could very well be thousands of jobs in the headquarters in Aberdeen. I am not ruling anything out or limiting the potential of Great British Energy, and I hope that the right hon. Gentleman is not either. I make this point again, for the benefit of the right hon. Gentleman: critically, that is not the limit of the jobs that will be created by Great British Energy. It is important to recognise that the jobs potential will come from the investments and partnerships that it makes.

[Harriet Cross (Gordon and Buchan) (Con)]

The second part of the amendment states that the jobs should be created by 2030. That timescale is really important, because it ensures that the expertise we have now can be retained to help build these jobs of the future. Even if the Government will not commit to the figure, will they look at the timescale, which will give the industry certainty?

[Michael Shanks]

For reasons I will come to in a moment, we will not agree to the amendment because we will not put timeframes and numbers in the Bill—we do not see those in any piece of legislation from the previous Government or any other Government, and for very good reason. However, the hon. Lady is right that this decade is absolutely critical for this issue. That is why I am taking it very seriously, and will happily have conversations with her about how we get these jobs as quickly as possible. The timeframe for that is important, but it is also important that we start with building things such as Great British Energy, which I hope she will support, and our broader policy around the office for clean energy jobs, our industrial strategy and our increased investment in things such as the renewables auction.

To come back to what the hon. Member for West Aberdeenshire and Kincardine said about offshore wind, he took some credit for it, but of course his Government have to take responsibility for the complete failure on offshore wind in the last auction. We have turned that around with some really successful projects and want to build considerably more in the future. He gave an absolute masterclass for a new Minister like me on how to speak to something—the onshore energy ban in England—that I know he does not believe in, because he is a smart guy.

The reality is that that was ideology over delivery of something critically important. Now, we have inherited not just a lack of projects that would help us towards clean power and deliver jobs right across the UK, but an empty pipeline of projects, given the length of time where wind in England was banned. It is a ridiculous policy that I do not believe for a second the hon. Gentleman supports, but it was a very good example for me on how to deliver a line.

As I said earlier, this clause is specifically about giving very particular, rare directions in urgent or unforeseen circumstances. It is not a clause we expect the Secretary of State to be using regularly. That is important, because I suspect that if it was phrased in any other way, the hon. Gentleman would quite rightly propose an amendment limiting the powers of the Secretary of State to doing exactly that. This clause is about ensuring that Great British Energy has the space to fulfil its strategic priorities. Amendment 16 would widen that intention by adding a long-term goal.

More broadly, and relevant to both the hon. Gentleman’s amendments, I repeat that the aim of Great British Energy is to be operationally independent from Government. The Bill focuses solely on making the absolutely necessary provisions to establish the company. Adding further unnecessary detail—detail I know the Conservative party would not dream of adding to any of its own legislation—risks restricting the company in carrying out its activities and goes against what we have said. That sentiment was supported by almost every witness, including on specific questions about this matter, where I think people were hoping for different answers. Every single witness confirmed that the Bill is in the right place here. For those reasons, and many others, we will not be supporting the amendments.

Making Britain a Clean Energy Superpower

Debate between Harriet Cross and Michael Shanks

Friday 26th July 2024 Commons Chamber

[Michael Shanks]

My hon. Friend has raised two important points. To answer the first, GB Energy will invest in a range of projects and will have a key stake in them, delivering a return for the British taxpayer. There will be a range of projects, in some of which we will certainly have the controlling stake, and some of which we might help to get over the line, but in every single project there will be a return for the British taxpayer.

My hon. Friend’s second point is vital. I have been in this role for only a couple of weeks, but every meeting I have comes back to this question of connection, storage, and how we make sure that renewables can be delivered throughout periods in which there is electricity demand. Storage will be important, and GB Energy will have a part to play in that, as well as in answering wider questions about grid and network.

Let me return to the point about ownership by foreign countries. British waters are home to one of the largest offshore floating wind farms in the world, Kincardine, off the coast of Aberdeen. It is a good example of the problem with the current model. The foundations were made in Spain, the turbines were installed in the Netherlands, and only then was it towed into British waters. Our view is that British taxpayers should own some of that infrastructure, which is why yesterday the Prime Minister and the Energy Secretary announced an exciting new partnership between GB Energy and the Crown Estate to unleash billions of pounds of investment in clean power.

This partnership will enable two national institutions to work together for the benefit of the British people. As well as building supply chains, GB Energy will develop and own power projects in every part of the United Kingdom—in England, Wales, Scotland and Northern Ireland. It will be capitalised with £8.3 billion over the lifetime of this Parliament, money that can be invested in wind, solar, nuclear, tidal and other technologies, and it will deliver profits to the British people, playing a vital role in delivering the new jobs that we need.

[Harriet Cross (Gordon and Buchan) (Con)]

The Government’s plans to ban new oil and gas licences have been criticised by business leaders, unions and community groups throughout Scotland. As a fellow Scottish Member, will the Minister say whether or not he supports his Government’s plans, which it has been said will put up to 90,000 jobs across Scotland at risk?

[Michael Shanks]

We made it very clear during the election that the future of the North sea is incredibly important, but that future is a transition away from the oil and gas industries that we see at present. The Conservatives also need to recognise that the North sea is a declining basin. We have lost thousands of jobs there over the past decade, and that will continue in the future unless we accelerate our transition in the North sea to the clean energy jobs of the future. It is not good enough to bury our heads in the sand and pretend that this problem does not exist. We need a plan to give people secure, long-term, sustainable jobs for the future, rather than thinking that we can just carry on with business as usual.