Electricity

John Redwood Excerpts

Monday 15th June 2020 Commons Chamber

[The Minister for Business, Energy and Clean Growth (Kwasi Kwarteng)]

I beg to move,

That the draft Electricity Capacity (Amendment etc.) (Coronavirus) Regulations, which were laid before this House on 20 May, be approved.

Before outlining some of the provisions made by this draft instrument, I will briefly provide some context. The capacity market is at the heart of the Government’s strategy for maintaining the security of electricity supplies in Great Britain. It secures the capacity needed to meet future peak electricity demand, in a range of scenarios, through competitive technology-neutral auctions, which are normally held four years and one year ahead of the relevant delivery year. This draft instrument, together with capacity market rules changes to be made, performs two broad functions. First, it will ensure that the capacity market remains compliant with its state aid approval by giving effect to Government commitments recorded in the state aid approval decision. Secondly, it will make temporary modifications to support providers in the light of the effects of coronavirus.

The context of the capacity market state aid approval is, briefly as follows. The EU Commission state aid approval of the capacity market in 2014 was annulled in November 2018 by a judgment of the general court of the Court of Justice of the European Union. This introduced the standstill of normal operations of the capacity market until October 2019, when the European Commission completed its reinvestigation of the capacity market and granted state aid approval. On the back of this approval, the Commission state aid approval in October 2019 recorded the Government’s commitments to make technical changes to the capacity market design, to reflect recent market and regulatory developments, including reforms that the Department for Business, Energy and Industrial Strategy had already identified through the statutory five-year review of the capacity market in July 2019.

[John Redwood (Wokingham) (Con)]

I am glad that the Minister has started with the very important context, because, of course, an 80-page EU document explaining the history and the requirements should have been appended to our documents. Why, however, do we think it a good idea to comply with the proposition that our interconnector imported energy has to increase from 4% to 9% of our total by 2021, when we should be going for self-reliance and resilience?

[Kwasi Kwarteng]

I know that my right hon. Friend is a noted sceptic about climate change—or he was, certainly, until very recently—but he will know that any country that, like us, wants to reach the net zero commitment will necessarily be reliant on much greater interconnector capacity, from Europe in many instances and sometimes from countries such as Norway that are outside the EU, than is currently the case. That is exactly why we are proceeding on this path.

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[Kwasi Kwarteng]

All I can do is repeat the answer that I have given. These regulations reflect our past discussions about the operation of the capacity market. He and I and others in this Chamber will have plenty of time to debate a new system. I ask the hon. Gentleman to have a little patience. We have a White Paper coming up and it would be precipitous to have an extensive debate about these issues in legislation ahead of the publication of the White Paper. He has asked many questions about that, and I advise him to wait for the debate on the White Paper.

[John Redwood]

I do not know why the Minister referred to climate change in answer to my previous question. I was not talking about that and, as he says, it has nothing to do with the regulations, so may I have another go? Why have we agreed to more than double our importation of energy through interconnectors? Is it a good principle that we should be paying a capacity payment to foreign providers of electricity who want to sell us their surplus power, but who would not necessarily have it available when we wanted it?

[Kwasi Kwarteng]

In regard to climate change, my right hon. Friend will know that one of the big issues, or successes, that we have had in decarbonising electricity power generation has been through taking coal off the grid and having renewables. All the assessments that we have had and looked at show that an increase in interconnector capacity is part of that mix, just as nuclear is part of the mix, just as offshore wind and now onshore wind— the pot one auction—are part of the mix. All these things are part of the decarbonisation story of our power, and this is very important to us, which is why we have increased—or seek to increase—our interconnector capacity.

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[John Redwood (Wokingham) (Con)]

I am very concerned about the regulation, its provenance and whether it will limit our freedom of manoeuvre in ways we do not wish from the beginning of next year, when I hope we will be redesigning an energy policy that is fit for purpose to meet our three main priorities.

The Government have been very clear on their environmental priorities. They are not the subject of our debate today and I have no wish to go into them. They are an important matter that the Government have set forward, but the Government have always said that they have two other crucial priorities that matter a great deal as well. One is to have good value power—power that people can afford in their homes and which can make us more competitive in industry and commerce—where I think we have room for improvement. We also wish to pursue a policy of independence, so that we have resilience and reliability in our system. I therefore find it extremely worrying that we have responded to a state aid challenge upon us in the dying days of our membership of the single market, or its rules, when we are no longer a member of the European Union which sponsors it. We are setting forward a trajectory that says we will increase our imported power from 4% to 9%, mainly from the continent of Europe—from the EU—as part of our defence against historic allegations concerning state aid that would presumably go away from 1 January once we have left the European Union completely and once we legislate to make our own position clear.

Today’s regulation is not well described in the explanatory note. If one reads the 80-page European Commission decision document, one can see exactly how thorough their investigation has been since 2014 of our capacity market, how detailed their intervention in it has been, and how detailed the Government’s response has to be in this and in other work they have done to try to conform to the EU’s wish to redesign our capacity market in a way that they find acceptable and in a way that is clearly designed to promote a much wider European integrated energy market. Now, that may well make sense for neighbouring states close to each other on the continent—between Belgium, France and Germany. That is their choice and I have no problem with that. But as we are an island nation which used to be able to generate all its own power, I have some difficulties with that. We have many great advantages to generate wind power, wave power, solar power, hydro power and other renewable power, as well as prodigious reserves of other types of energy where the Government wish to gradually reduce or clean their use. There may well be clean ways of burning some of that carbon, with carbon sinks and so forth, which they will need and want to use.

It seems that the proposal today is from another age when we were gradually being linked into a continental system, which, incidentally, is a lot dirtier than our own system and has been really struggling to reduce its dependence on coal and its very weak strategic position of chronic dependence on Russian gas. The last thing we want to do as a country is connect ourselves to an ever bigger possible dependence on Russian gas via power generated on the continent when we have a wish to do our own thing.

It is a pity that the explanatory note does not mention the phrase “state aid” or explain up front that the regulations arise because of a state aid case. It refers to “Commission Decision SA.35980”. Those who follow these things know that “SA” stands for “state aid”, but it is not as clear and transparent as it might be. The average Member of this House probably does not follow those matters in that much detail and is not aware that we are being asked today to pass legislation because of a state aid infringement that goes all the way back in allegation to 2014. We ran that market relatively successfully from 2014 to 2018, it was suspended from 2018 until the end of last year, and now there has obviously been some sort of deal to get it up and running again.

The explanatory note states:

“Part 1 amends the description of a DSR CMU to clarify that a DSR CMU cannot provide capacity primarily by using a storage facility which reduces its import of electricity”.

Is not that interesting? First, we have to translate it. “DSR CMU” is the process that the shadow Minister was telling us about. One of the responses to a capacity market auction is to bid in an offer to buy less power than otherwise would have been bought as another way of contributing to the stability and resilience of the system rather than offering to provide more power for those who want to buy it. It is curious that the proposal is linked to any proposal that might reduce the import of electricity in the way that it does. That adds to my worries about the nature of this EU policy and intervention against the broader background of the EU’s trying to create a comprehensive European energy market with us fully linked into it.

The shadow Minister said that perhaps we were found to have acted illegally. The Commission is clear that that was the case for the period 2014 to 2018. It states that in its view the UK unlawfully implemented the capacity market in breach of article 108.3 of the treaty provisions on state aid. It has now come up with a form of words at the end of its decision that says that if we do those sort of things, it will see its way to believing that we are now compliant.

I do not suppose that the House has the appetite for a serious debate about any of that today and I understand that we are considering a statutory instrument, not our wider energy policy, but we should not let this go without some things being said. First, the regulations are the direct result of the most enormous intervention and intrusion into British energy policy and I hope that from 1 January next year, we will proudly set out our own energy policy and not need that sort of intervention. Secondly, the thrust of the policy was to make us more dependent on a European energy provision system that is neither secure nor particularly green. I strongly repeat that dragging us into more reliance on Russian gas is the last thing we want.

[Craig Mackinlay (South Thanet) (Con)]

My right hon. Friend made a point about EU energy not being particularly green. Does he share my concern that we pat ourselves on the back and say we have burnt no coal or had no electricity derived from coal over 30 or 60 days, yet much interconnector electricity has been manufactured by those dirty forms of energy that we are trying to get out of our market in the UK?

[John Redwood]

That is exactly right. People like to claim that we are importing nuclear energy from France, for example, but we are importing European energy in a pretty unified system, which has surplus capacity because it has not only French nuclear but an awful lot of dirty coal, Russian gas and so forth, which should cause us concern.

Thirdly, can we in future have an honest and clear explanation so that more Members of Parliament might understand what is going on and think it is a matter of some concern? I do not think that most of our colleagues realise that we are talking about resilience—our ability to keep the lights on in difficult conditions that might arise in future. We are talking about the pricing of electricity and these very big strategic issues. And finally, we are talking about whether this country is now going to have its own energy policy, or whether we are hastily legislating so that we can, for the foreseeable future, still be effectively under EU state aid rules, edging ever closer to integration with EU energy policy.

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

The Minister is keen to keep reiterating that the capacity market is integral to the security of supply and that these regulations allow the capacity market to continue to operate, thereby providing that security. That is fine and I agree with that sentiment, but I think that also means that there is a reluctance to look at the wider issues. If we are talking about the security of energy supply and how important the capacity market is, there is an argument that we should look at some of the bigger pictures.

I welcome the fact that the changes result in compliance with state aid and allow the capacity market to function. On another positive, I welcome the move to reduce the minimum capacity threshold in the capacity market from 2 MW to 1 MW. The chief executive of the UK’s REA—the Association for Renewable Energy and Clean Technology—stated that this will

“make it easier for cutting-edge clean technologies to compete.”

That endorsement is clearly very positive. However, will the Minister explain what measures are in place to ensure that we do not get more diesel generators bidding into the capacity market with the lowering of the threshold? What we want is more reliable renewable energy.

Has an assessment been undertaken as to whether grid pinch points could cause any restrictions for these potential newer forms of renewable generation, particularly in Scotland? That is also critical, given that these regulations allow for multi-year contracts, in terms of the demand-side response. We need to make sure that there are no pinch points preventing new renewables coming on-stream.

Paragraph 7.3 of the explanatory memorandum details changes from the regulations with respect to capacity market units not getting paid by simply not charging batteries. In terms of managing demand, does the Minister think that it is acceptable that EDF was recently paid a reported £50 million to halve output from Sizewell B for four months? Surely there is a better way to manage long periods of low demand for energy. Has he assessed how fit for purpose the energy market is for future pandemics or long periods of low demand? It is not just about security of supply at the upper end—we need it at the lower end as well.

On the bigger picture, what is the Minister doing to facilitate the co-location of large-scale storage alongside renewable energy sources such as offshore wind? This and the removal of the capacity cap in contracts for difference options would complement the capacity market. That needs to be reviewed as well. I stress that pumped hydro-storage is a perfect way to manage fluctuations in high and low demand and thereby provide security of supply. When are the Government going to assist in a route to market for the big projects that are in the pipeline in Scotland? Pumped hydro-storage is much more effective than nuclear and it is much more cost-effective, so we need to forget the white elephant of nuclear and in particular the desire to get small modular reactors up and running.

I turn back to the demand-side response, which, as outlined, is an accepted use within the capacity market, and there are some changes in the regulations in this regard. What assessment has the Minister made in the reduction of overall energy demand if the Government set and implemented a proper energy efficiency programme to ensure that all properties achieve energy performance rating C by 2030? Does he accept the research findings of the UK’s energy research institute, which said that this could reduce energy demand by 25%? That 25% reduction in demand is the equivalent of six Hinkley Point C stations, so why, again, is there the obsession with nuclear? A reduction in demand would make a massive difference and minimise the need for the over-reliance on the capacity market to keep the security of supply.

On energy efficiency and reducing demand overall, the Committee on Climate Change stated that the UK Government should match the ambitions of Scotland, and the Business, Energy and Industrial Strategy Committee reports that as well, so energy efficiency is critical to lower demand.

[John Redwood]

I was interested by what the hon. Gentleman was saying about pumped-storage schemes, which are crucial to flexibility. I was interested that he also thinks they can be very good value. Has he got some in mind? How are the Government responding to his idea of pumped storage?

[Alan Brown]

There is an extension at Cruachan, and I forget the name of the other one up in Scotland that is in the pipeline. SSE is bringing them forward. The difficulty is with getting an agreement on a pricing mechanism, a bit like the stumbling block that has happened with tidal lagoons and talk about a regulated asset base for nuclear, even though I am against nuclear. It needs a review of that kind and a long-term support mechanism for supply. Clearly pumped-storage hydro provides security of supply over a long period of time, rather than, say, 15 years for renewables. I am asking the Government to look at finding that support mechanism.

[John Redwood]

Pumped storage is also very important for the short term, because, as the hon. Gentleman knows, it can be switched on very quickly when there is a short-term peaking issue, as with the Dinorwig scheme. It has a lot to recommend it in that respect.

[Alan Brown]

I think we are in agreement across the Chamber for once. Obviously the pumped aspect can use electricity when there is low demand, so electricity can be taken at a cheaper price and used to pump water up to fill the hydro, and then the hydro can be used when there is peak demand, so it works both sides of the equation.

Paragraph 8.1 of the explanatory memorandum references the European Union, but then is silent on the issue of leaving the EU, because it states:

“This instrument does not relate to withdrawal from the European Union”.

However, I would suggest that the operation of the capacity market does relate to withdrawal from Europe. Paragraph 7.1 confirms that capacity is also provided by “interconnection with other countries.” The right hon. Member for Wokingham (John Redwood) has given his view on that interconnection. The regulations do still relate to leaving the EU. Will the Minister tell us what the current position is? Once again, it looks as though there will be a possible no-deal crash-out on 31 December. How will the UK participate in the single energy market?

Today, I checked the UK Government guidance on trade and energy from 1 January 2021 onwards. It was last updated on 6 November 2019, but basically it puts all the onus on the energy operators. The Government advise:

“Although it is a matter for individual businesses to work out what steps they need to take, the government anticipates these may include…interconnector owners/operators will need to continue to work with their stakeholders and regulators to prepare alternative trading arrangements and updated rules…interconnector owners/operators will need to continue to engage with the relevant EU national regulators to understand their processes for the potential reassessment of their Transmission System Operator certifications.”

Given how important energy is for us and that interconnectors are an agreed integral part of the capacity market, why is the latest UK Government guidance still effectively saying that traders are left to their own devices looking ahead to this critical deadline of 31 December 31/1 January? What discussions has the Minister had with energy suppliers? Where are we on a free trade agreement for energy, looking forward?

It seems to me that the regulations are yet again part of a drip-feed approach to energy policy. This has been touched on by the shadow Minister, and the Minister alluded to the White Paper coming forward, but we need definitive timescales for when we are going to see the White Paper. It would be good to get a better feel for what the White Paper is going to be. Given that year delay, it would be nice to at least have a forewarning or an understanding of what is going to be in it.

We know that the economy has taken a massive hit because of coronavirus. Despite the title of the regulations, they only skim the effects of coronavirus. It has been rumoured that the White Paper will cover that, so it would be good if the Minister could say, “The White Paper will cover the effects of coronavirus and how we are going to re-stimulate the economy.” Hopefully, that will be with a green industrial revolution. I suggest that will need to include more onshore wind, more offshore wind and greater support for floating offshore. I have mentioned pumped hydro storage, hydrogen production and carbon capture, which are all vital strategies that we need the Government to get on with. I hope that we hear a bit about that and that the Minister can answer some of the questions I have raised. There is effectively nothing wrong with what has been brought forward, but it is just not enough; we want to see more.

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[Kwasi Kwarteng]

Forgive me; the hon. Gentleman has raised some very specific points about our future energy policy, and I wish and hope that we can have a wider discussion on those specific points.

If I may reach a conclusion, these regulations are absolutely necessary to ensure the continued security of electricity supply. All our stakeholders in the market—the generators—say they want some security. The suspension of the market as a result of the judicial decision last year was very damaging and created a great deal of uncertainty. The SI deals with a lot of that uncertainty and is welcomed not only, I understand, by the hon. Member for Southampton, Test but across the sector.

[John Redwood]

rose—

[Kwasi Kwarteng]

I give way one more time.

[John Redwood]

But will the Minister confirm that we can legislate now for 1 January next year and have the system we want? This is only a very temporary thing if the Government come up with a sensible policy.

[Kwasi Kwarteng]

It is of its nature temporary. As my right hon. Friend will know from his long experience in Parliament, the last time we had an energy Bill was in 2013. The Government may well wish to introduce another energy Bill but, whether that is the case or not, there will be ample opportunity after 1 January 2021 to debate the future of our energy system. All the issues raised with regard to flexibility will be relevant, and I am sure that he and others will engage fully and enthusiastically in that debate.

The regulations are necessary to ensure continued security of electricity supply. They will also ensure, obviously, that the capacity market continues to comply with its state aid approval, which was granted last October but does not necessarily bind us forever and a day. The regulations also provide support for capacity providers during the coronavirus epidemic.

On those two grounds of state aid and dealing with the coronavirus pandemic, I commend the draft regulations to the House.

Question put and agreed to.

Resolved,

That the draft Electricity Capacity (Amendment etc.) (Coronavirus) Regulations, which were laid before this House on 20 May, be approved.

Recall of Tumble Dryers

John Redwood Excerpts

Monday 17th June 2019 Commons Chamber

[Kelly Tolhurst]

I appreciate the hon. Gentleman’s concern, specifically for his constituency, given the desperately sad incident that occurred there. He is absolutely right to ask these questions and raise these concerns, as would be any consumer who believed they were at risk.

We carried out the review at the behest of my predecessor, my hon. Friend the Member for Burton (Andrew Griffiths), who ordered a review of the Whirlpool modification process in 2018. As the hon. Gentleman will know, the review looked at the effectiveness of the technical modification and the adequacy of the outreach programme. It concluded that the risk was low, and was further reduced by the modification. Following the review, we issued a 28-day notice letter to Whirlpool, specifying issues on which we wanted more information and assurances. We were unsatisfied by its response, which is why, on 4 June, we issued a letter of intent of notice of a recall.

Following conversations that I had with the hon. Gentleman last week, he wrote to me at the end of the week asking for a meeting. As I said to him last week, I should be more than happy to meet him to discuss any of his concerns about the ongoing process. My absolute intention is to ensure that we hold companies to account when we do not believe that they are carrying out their legal obligation, which is to place safe products on the market.

The hon. Gentleman is entirely right to be concerned about the future prevention of fires. I can tell him that, according to Home Office data, there were 224 fires caused by tumble dryers in 2017-18, a 10% reduction on the previous year’s figure of 808. We will obviously do all that is required to ensure that consumers are kept free of harm. We are following due process, in line with the regulations, in order to ensure that Whirlpool carries out its obligations.

I am more than happy to answer any further questions from the hon. Gentleman in detail as the process continues, and, as I have said, I am also more than happy to meet any colleague at any time.

[John Redwood (Wokingham) (Con)]

Can the Minister give us some indication of how many machines the Government think are still out there which could be risky, in the light of the high incidence of fires that she has reported?

[Kelly Tolhurst]

In response to a query from Which?, Whirlpool said that 1.7 million cases had already been resolved. It estimates that another 500,000 machines are still in people’s homes.

British Steel: EU Emissions Trading Compliance

John Redwood Excerpts

Wednesday 1st May 2019 Commons Chamber

[Greg Clark]

Well, history is important in this because one of the reasons why our electricity prices have been high compared with others is that in the last five years of the previous Labour Government, industrial electricity prices rose by 64%. What we have done since then is provide £291 million in compensation for energy-intensive sectors, to correct some of the inflation that took place during that time.

As the hon. Lady knows and has acknowledged, my firm view is that in a world where manufacturing in this country and its opportunities around the world are undergoing a revival, there is absolutely no reason whatever why British Steel should not make a major contribution to that, right across the country. I am keen that we should conclude a sector deal with the steel sector. There have been important discussions. All sector deals require co-investment from the Government and the companies. No one is keener than I am to conclude one: as I hope is evident from my statement today, I am prepared to act in support of a sector that is important—not just for the economy, but for the towns across the country in whose lives it plays such a prominent role.

[John Redwood (Wokingham) (Con)]

If the Government had kept their word and taken us out on 29 March without the withdrawal agreement but tabled a comprehensive free trade agreement, we would not be in this mess. What are the Government going to do to have a proper industrial strategy, which can work only if there are more adequate supplies of much cheaper power?

[Greg Clark]

What my right hon. Friend has said is not the case. Our legal obligations for 2018 would be there, and the company would have to comply. Had we left without a deal, the company would be in the position that it is in.

When it comes to the competitiveness of the UK steel sector, it is clear that the markets are international and, especially in the case of British Steel, very substantially across the continent of Europe. It has been very clear that we need to make sure that we continue to trade on terms at least as favourable as we do at the moment with the European Union, which is why both British Steel as a company and the steel sector have been absolutely clear, in terms, that we need to ratify an agreement such as has been proposed, and we need to do it very quickly.

Climate Action and Extinction Rebellion

John Redwood Excerpts

Tuesday 23rd April 2019 Commons Chamber

[Claire Perry]

In the right hon. Gentleman’s remarks we hear the passion that he has bought to this portfolio for many years, and I share that passion. Let me correct him: I do not disagree with the protests. I disagree with some of the methods, but certainly not with the message. As I have said to him before, I think that just a few years previously he and I would have been out there ourselves carrying placards.

Let me pick up on the challenges the right hon. Gentleman talked about. He is right to acknowledge that the Government were bold to ask for advice on a net zero economy—we are the first industrialised economy to do so. I will consider that advice carefully and proportionally and, crucially, I will work out how we are going to pay for it. He will know from his time in his climate change role that the Committee on Climate Change was unable to recommend a net zero target when previously we asked for that advice, because the committee did not believe it could be done cost-effectively or, indeed, that we had the technology. It is right that we give that work the focus that it requires.

The right hon. Gentleman is absolutely right to say that we need to take a whole-of-Government approach. I was really pleased to see the Chancellor stand up and make the first ever green financial statement, in which he brought forward some extremely ambitious programmes to ensure that from 2025 no new homes will be built in this country that rely on fossil-fuel heating.

The right hon. Gentleman asked about the declaration of a climate emergency. The thing is, I do not know what that would entail. I could stand here and say, “I believe there is a climate emergency,” and he could say that, too. Many of our local councils, including my own council in Wiltshire, have done that. The question is: what are we going to do about it? That is why we should be proud of the fact that we have the most detailed proposals for how we will hit our carbon budgets.

I will answer the right hon. Gentleman’s point about carbon budgets in a moment, but he needs to look, as I am sure he has, at what other Governments have done. It is the easiest thing in the world for a politician to stand up and say, “I’m going to do this and I’m going to set these targets,” knowing that they will be dead and buried before the targets have to be met. The responsible thing to do is to put in place legislation, as the right hon. Gentleman did, to bind every successive Minister who comes along to meet the budgets, or to explain why they are not met, and to hold every future Government’s feet to the fire—as he says, it often is a fire—in respect of how we deliver on our ambition.

The right hon. Gentleman made a point about carbon budgets. He will know that we are not woefully far off: we are at 95% and 93% of the way to being where we need to be to meet the budgets that end in seven and 12 years. And that is without even costing or calculating the carbon savings that we will have from the homes changes we have made. This is an ongoing process and we are absolutely committed to delivering.

I take the right hon. Gentleman’s point about citizens’ assemblies. The wonderful thing is that everybody can talk about this issue. A national conversation is now happening. We have to engage with citizens, businesses, politicians, local authorities, bill payers and taxpayers—with everybody—because there is not one single thing that will move the dial. We have to change everything, do it rapidly and do it in a way such that no future Government can wriggle out of their responsibilities.

[John Redwood (Wokingham) (Con)]

In this policy area, it is most important that everything is based on the best possible science. I am sure we would all agree about that. What is the Government’s view on the likely changes in water-vapour levels and cloud cover, and on levels of solar radiation? Those are also important matters.

[Claire Perry]

My right hon. Friend is right. As a newly appointed fellow of the Royal Geographical Society—I had to get that in there—he will know that we have some of the best climate modelling in the world. The problem we have is that the planet is an unbelievably complicated ecosystem. We are finding some feedback loops that we did not even realise about: for example, what happens to the Thwaites glacier in Antarctica could have a meaningful impact on our sea levels immediately. We have the best scientific evidence base we have ever had. The 1.5° report by the Intergovernmental Panel on Climate Change was based on the best peer-reviewed science the world has ever seen. We have the message from our scientists; we must now continue to act.

Leaving the EU: Protection for Workers

John Redwood Excerpts

Wednesday 6th March 2019 Commons Chamber

[Greg Clark]

I warmly welcome the tone in which the hon. Lady has approached this issue. We have different preferences on what would be ideal, and I know that both the TUC and her own Front-Bench colleagues would prefer EU directives automatically to take their place in UK law and to be enforced through the European Court of Justice, as they are now. She knows that we disagree with her on that—in our view, it would not be consistent with leaving the European Union or with the sovereignty of this Parliament—but I accept that that is her position and that she has said that, notwithstanding that, we should explore whether we can meet her perfectly reasonable observations. I am grateful for that.

What we are publishing this afternoon are draft clauses that have not yet gone into the Bill. I am open to working with all Members of the House—of course, continuing to include the hon. Lady—to see which of the observations can be accommodated, subject to the general approach we wish to take. I think that she recognises, and I hope other Members will recognise, that this is an important opportunity. If we are to pass a withdrawal agreement and implementation Bill, the chance to have on the statute book from the outset—literally within the next few weeks, I hope—some important protections for workers is one that I think we should all take.

The hon. Lady asked some specific questions, of which I shall attempt to answer as many as I can. She observed, in effect, that future Governments and Parliaments may take a different view from that which we intend. As we know, it is a fact that no Parliament can bind its successor, but it can express a clear intention, set up a test and provide mechanisms against which proper scrutiny of any proposal can be mounted, and that is what we are doing. I acknowledge her right hon. and hon. Friends’ contribution to and, in fact, origination of this idea.

The hon. Lady is concerned that the statements that are provided for could be ignored and may not be as effective as she intends. The case law clearly establishes that if a statutory consultation is provided for, it cannot be lightly swept aside. There is a requirement properly to engage with the recommendations that come from such a consultation, but I hear what she said about that process being open to workers as well as to people who might represent them. We can talk more about that.

The hon. Lady asked about the application to future changes to workers’ rights that may come outside primary legislation. Clearly, the big changes come through primary legislation, but in the spirit of what I said earlier, I am certainly open to exploring what assurances we can give on other significant pieces of legislation that might be in scope.

The hon. Lady mentioned the jurisprudence of the ECJ. It would clearly be inappropriate after Brexit for the ECJ to have a remit in the UK, but of course, as she knows as a lawyer herself, any court can have regard to the decisions of any court that it considers to be relevant in the case being considered.

The hon. Lady mentioned enforcement, on which we strongly agree. There are industries—sometimes concentrated in particular places in the country—in which what she described is correct: a calculation is made that employers who abuse the rights of their workers are unlikely to be detected and enforced against, which leads them to think that they can get away with it with impunity. The intention behind the strengthened enforcement body that I described, and our intention in terms of resourcing it, is to firmly remove that idea from the mind of any such employer. I will work closely with the hon. Lady on that.

It is appropriate to recognise in the House and draw some pride from our record of employment rights. We have a successful labour market that combines a reputation for high standards—standards that have been recognised throughout the EU as being among the best in Europe—while having what is the most important right for workers, which is the right to work. Many more people in this country are able to work as a result of the effectiveness of our labour markets. We need to preserve that while giving expression to the objectives articulated by the hon. Lady’s colleagues, to make sure that the commitment we have given to build on that strength in future is something that is not just a matter of words but has parliamentary force behind it. I am grateful for what the hon. Lady said about working together.

[John Redwood (Wokingham) (Con)]

I am assured that the Government and this Secretary of State want high standards of employment rules in this country, and I look forward to our having independence so that we can have our own domestically crafted high standards, which will be above the minimum EU standards, but will the Secretary of State please explain why he has proceeded with this statement? I thought its sole aim was to win over the Labour party, but it seems Labour is in complete disagreement with it.

[Greg Clark]

I was very much influenced by the exchange between my right hon. Friend and the hon. Member for Bassetlaw (John Mann) when the latter spoke to his amendment in January. As I recall, my right hon. Friend correctly intervened on the hon. Gentleman to reinforce his personal commitment to establishing and maintaining Britain as a place of voluntarily high standards. Because that represents a point of agreement in the House and is a reflection of our traditions—our reputation is as place of high standards, thanks to the accretion of steps taken by Governments of both parties—I think this is an opportunity to work together to see whether we can establish something that is rooted in the sovereignty of this House, which my right hon. Friend quite rightly insists on, but also provides assurance to those who want to see measures as well as words.

Exiting the European Union (Structural and Investment Funds)

John Redwood Excerpts

Tuesday 19th February 2019 Commons Chamber

[Richard Harrington]

I totally agree with everything my hon. Friend said, other than not asking my views were on no deal. I think he knows those, and I hope most people in the House do.

[John Redwood (Wokingham) (Con)]

Will my hon. Friend just tell us what the dispute resolution procedure is?

[Richard Harrington]

If my right hon. Friend would bear with me, I will address that later in my remarks—I thought he was going to ask me the same question.

This instrument includes a transitional provision that enables the guarantee to be paid out to bodies involved in a European territorial co-operation programme. The power to fund beneficiaries of cross-border programmes currently comes from European law, and therefore needs to be continued in domestic law through this instrument to protect beneficiaries in a no-deal situation. That will enable the United Kingdom to continue to participate in cross-border European territorial co-operation programmes involving Northern Ireland, Ireland, and Scotland. Those programmes, known as Peace and Interreg V-A, support peace and reconciliation on the island of Ireland.

The EU has made special provisions to enable the United Kingdom to continue in both Peace and Interreg V-A in a no-deal situation, if the United Kingdom continues to pay for its share of those programmes. The transitional powers in this instrument enable the United Kingdom to make such payments to the EU to enable our continued participation in the event of a no-deal. That is consistent with our general commitments to Peace and Interreg V-A. In this arrangement, the European regulations do not need to be retained. The United Kingdom will sign an agreement with the EU to ensure that programme beneficiaries continue to follow relevant rules. The transitional provision to pay the guarantee to European territorial co-operation beneficiaries also ensures that beneficiaries of cross-border programmes other than Peace and Interreg V-A can be paid sums from the guarantee. Specifically, this provision gives Her Majesty’s Government and the devolved Administrations the appropriate powers to ensure that UK partners of such cross-border projects can receive the guarantee through domestic arrangements, to safeguard for all possible no-deal scenarios.

Among such scenarios, the House should note that in a no deal, without further changes to the European Commission’s regulations, UK organisations would be unable to continue in the majority of European territorial co-operation programmes, other than Peace and Interreg V-A, as they would not have third country access to the programmes. This instrument is designed to enable UK partners to access funding in such a scenario. The EU has published a no-deal regulation that would allow the UK to continue participating in EU programmes in the event of no deal until December 2019. However, that would depend on the UK agreeing to continue to contribute to the 2019 budget as if we were a member state. This proposal is subsidiary and without prejudice to the EU’s specific proposal on Peace and Interreg V-A. The Government are currently analysing the Commission’s proposal, but hon. Members should rest assured that this instrument will allow the guarantee on European territorial co-operation programmes to be distributed in any scenario.

Without this statutory instrument, delivery Departments would not have the powers to pay out the guarantee to beneficiaries of European territorial co-operation programmes.

Without legislation, the United Kingdom would not be able to pay for its share of the Peace and Interreg V-A programmes involving Northern Ireland. That would mean we could not take part in these two important programmes, and current beneficiaries of those programmes would be at financial risk.

I mentioned briefly the separate legal provision being made by the EU for the UK to continue to participate in the Peace and Interreg V-A programmes. That provision is intended to enable continued access to the programmes in the event of no-deal, but it does not resolve the problem of payment powers. That is why we need both the EU regulation and this statutory instrument to safeguard these programmes and to ensure the continuation of their benefits.

[John Redwood]

Before the Minister moves on from the money, will he explain how the money would be calculated, and whether we would have to make a contribution to the administration costs or just to the actual costs of the programme?

[Richard Harrington]

If I may, Mr Speaker, I will use this opportunity to answer my right hon. Friend’s earlier question about the dispute resolution. Any disputes in relation to how funding is spent are dealt with through the audit and default functions and the provisions set out in the existing funding agreements. As for his second question, I will have to give the matter some thought, as I must confess I do not know the answer. If I do not think of it in the next half an hour or so, I will certainly write to him with the answer on that. My memory is quite good and usually things come back in due course, as I know they do to you, Mr Speaker.

I mentioned that the EU is making separate legal provision for us to continue to participate in the Peace and Interreg V-A programmes. That provision is intended to enable continued access to the programmes in the event of no deal, but it does not resolve the problem of payment powers, which is why we need both the EU regulation and this statutory instrument to safeguard those programmes and to ensure the continuation of their benefits. Not having this instrument in force by exit would also prevent the Government and our devolved Administrations from paying out the guarantee to UK partners of other territorial co-operation programmes, risking their financial viability.

Nissan in Sunderland

John Redwood Excerpts

Monday 4th February 2019 Commons Chamber

[Greg Clark]

First, let me remind the hon. Gentleman that a greater amount of financial investment is going into Sunderland than was anticipated in 2016; this is a long-term commitment that has been made by the firm. He should welcome that and reflect that the future jobs of those employed in Sunderland have been secured by that investment in the Qashqai. That is a welcome factor.

The hon. Gentleman is right to point out that the company has expressed an urgent concern that we should resolve the question of Brexit, but he is wrong to say that the deal the Prime Minister has negotiated does not command the positive confidence of the industry. I have talked about Nissan, but let me mention the head of Ford in Europe, who said:

“It’s important that we get the agreement ratified that’s on the table at the moment”.

The chief executive of Aston Martin has said that it is “obvious” that the deal that we see

“meets the needs of all the requests we put forward as an industry and as Aston Martin.”

Toyota has said that it welcomes the announced deal, which

“would provide business with the certainty of a transition period and help avoid the significant production disruption a ‘No Deal’ outcome would have for ‘Just in Time’ supply chains in the automotive industry.”

I share the hon. Gentleman’s view that we should bring the uncertainty to an end, but the only way to do that is by backing a deal, and I commend to him the deal that has the support of every one of the employers in the automotive sector that I have quoted to him today.

[John Redwood (Wokingham) (Con)]

The big increase in vehicle excise duties, the squeeze on new car loans, and the general tax and regulatory attack on new low-emission diesels has had a predictable effect, in greatly reducing the demand for and sales of new diesel cars in the UK. Will the Government reconsider these damaging policies, given the strong bias in our industry to produce those Euro 6 diesels?

[Greg Clark]

I say to my right hon. Friend that, in fact, the extra investment is going into new Powertrains—cleaner Powertrains. Far from being critics of this, Nissan, as people who know the industry well know, is among the principal advocates for more ambitious environmental standards and has been a pioneer in establishing electric vehicles in this country. It is recognising that that is the way consumer demand is going, but it recognises that this is a positive step.

Nuclear Power: Toshiba

John Redwood Excerpts

Monday 12th November 2018 Commons Chamber

[Greg Clark]

I am grateful for the comments from the Chair of the Business, Energy and Industrial Strategy Committee. She will know that it is only very recently that it has been possible to invest in new nuclear. The Labour Government she supported had no future new nuclear build programme. She will know from her visits to Sellafield and other nuclear installations that we are taking forward the recommendations of the Public Accounts Committee, including at Wylfa in north Wales, to look, where we do have a counterparty with which we can negotiate, at new financial models, and it is right that we should do so. However, as the hon. Lady would expect, that depends on being able to demonstrate value for money for bill payers and taxpayers.

[John Redwood (Wokingham) (Con)]

How likely is it that the Secretary of State will find an alternative developer for a nuclear project in Cumbria? If we do not, how will we generate the power we are missing?

[Greg Clark]

We have a substantial pipeline of new energy projects, as a number of hon. Members have made clear. When it comes to the Moorside site in Cumbria, it was always available to developers to leave it. It will now revert to the Nuclear Decommissioning Authority. It will be open to developers to come forward to make proposals. However, whether with nuclear or other sources of clean power, we have a substantial pipeline of new projects coming forward to add to our energy supplies.

Domestic Gas and Electricity (Tariff Cap) Bill

John Redwood Excerpts

Wednesday 18th July 2018 Commons Chamber

[Claire Perry]

I strongly believe in competitive, well-regulated free markets. Indeed, in this market there are now more than 60 energy suppliers, all bidding for our business. I have recently switched again to a company that appears to be offering a very good green tariff. However, the problem, and the reason for the Bill, is that there is a very large group of customers who are sticky—who stay on expensive standard variable and default tariffs because they do not know how to switch, or they are not aware that they can. We can all think of grandparents, parents and others who fall into that category—it also includes young people who are renting accommodation—and they tend to be the furthest from the white heat of the switching market.

Understanding what the Bill does to the economic conditions in the market is, of course, an important part of Ofgem’s role. To go back to the original CMA report, however, we also know that the current pricing practices result in £1.3 billion of what it described as “excessive” returns, and we expect that number to come down. If you will indulge me, Madam Deputy Speaker, I wanted to make sure that the House was aware of that.

It is important that we have a level playing field for companies in the market. I have received representations stating that the customer accounts threshold for offering warm home discounts and ECO should be dropped to ensure that more companies can offer them to customers. We introduced legislation recently to reduce that threshold from 200,000 to 150,000, in increments of 50,000. Customers in receipt of warm home discounts will have a lower chance of losing them if they switch.[Official Report, 4 September 2018, Vol. 646, c. 2MC]

I hope the House agrees that amendment (a) is the most appropriate response to the concerns that have been raised, and that it will be welcomed by Members in this place and the other place. I hope that we will be able to move swiftly on this issue and keep our remarkable outbreak of cross-party consensus going, because I think the Bill is an absolutely vital piece of legislation.

[John Redwood (Wokingham) (Con)]

Can the Minister give us some indication of the kind of saving we that we could expect from the managed market, as a result of the amendment, compared with where we are at the moment?

[Claire Perry]

I do not know whether my right hon. Friend is referring to the per-household saving. We have been quite careful not to talk about that, because although we can understand that a total maximum excessive disbenefit of £1.3 billion is created by current pricing practices, how much of that is saved and passed on to consumers will depend on all sorts of things, including changes in the wholesale market and the efficiency of companies. I can reassure him, though, that the absolute price cap that was brought in to protect customers on pre-payment meters and those classified as vulnerable has led to savings of about £60 per household since it was introduced. Of course, prices go up, but customers are still better off than they would have been. Our expectation is that both overall and per household, consumers will see bills lower than they would otherwise have been.

Energy Policy

John Redwood Excerpts

Monday 25th June 2018 Commons Chamber

[Greg Clark]

The hon. Gentleman represents a country that has prospered from the development of the offshore wind industry. The truth is that if a decision had been taken to subsidise this proposal, that money would have come out of the budget for offshore wind, which would have led to job losses in Scotland and elsewhere around the United Kingdom. He mentions a proposed subsidy. The truth is that if a project that is not viable is subsidised by the taxpayer, it is simply a taxpayer-subsidised unviable project. That is no basis on which a project can be approved.

The hon. Gentleman refers to the nuclear power programme. If he regards the price agreed for the power from Hinkley Point C as too high, that is all the more reason for him to oppose this proposal, because it is so much costlier. He must accept that there is a responsibility for the use of consumers’ and taxpayers’ money that comes with being in office. When a proposal is so out of kilter with what can offer value for money, the necessary decision must be made, and he should respect that.

[John Redwood (Wokingham) (Con)]

I accept that, on the Secretary of State’s figures, this would be a very bad investment, but can he tell us about the amortisation period of the investment? Surely a barrage will last a lot longer than, say, a wind farm. Will he explain why his advisers think that the project would generate so little power on a not very reliable basis, given the reliability of the tides?

[Greg Clark]

My right hon. Friend is correct to point to the amortisation. As someone who has spent a career in finance, he is aware that in discounting the value of earnings in future generations, the great majority of the value is in the earlier years, and that has been the standard basis of the assessment made. What has not been taken into account is the prospective decommissioning cost of the proposed lagoon, which has been estimated at £1 billion. That has not been included in the analysis, but it would be a further liability for the taxpayer.