Nuclear Energy (Financing) Bill

Debate between John Redwood and Alan Brown

Report stage & 3rd reading
Monday 10th January 2022 Commons Chamber

[Alan Brown]

I agree wholeheartedly with that. Actually, as far back as 2015, Steve Halliday, the then chief executive of National Grid, said that baseload was an “outdated” concept and a false argument, so I agree with that. This goes back to my point that nuclear is too inflexible because it is either on or off, and it is actually nuclear that leads to wind turbines being turned off so often. The bizarre thing is that nuclear has hidden costs because of the energy constraint payments that are made.

To return to the amendments, our amendment 10 relates to clause 32, as does Labour’s amendment 5. I would point out, as I stated in Committee, that I do not support the Labour amendment because I believe that compelling the Government to take over a plant confirmed to have been economically unviable would be throwing good money after bad, which is the polar opposite of the rationale behind our amendment 10. However, to be fair, I certainly support all the other Labour amendments, particularly those about foreign ownership, and I will be happy to support them if they are pushed to a vote.

Finally—people will be glad to know—I turn to new clause 1. This is another attempt at transparency in what could otherwise be the Secretary of State committing huge sums of money via the special administration route. Again, I do not think it too onerous for the Secretary of State to have to report to Parliament on the likely costs of a bail-out of an insolvent company.

In Committee, the Minister argued that it would hamper the process, but given that the SAR process is only being implemented for the first time through Bulb going bust, it is unclear to me why a report to Parliament would unduly delay the anyway complicated process of going through the courts. The Minister stated that the court process would provide enough transparency, but also that the reporting requirement might have commercial implications and affect the Secretary of State’s ability to bring the administration to an end. Both aspects of that cannot be true: there is enough transparency or there is not. It seems to me that reporting to Parliament should not hinder the transparency process, and it should not have commercial implications, so this new clause has been put forward to ensure clear reporting of information to Parliament.

In conclusion, I have made it clear from the outset that this Bill lacks transparency. Clauses 2 and 3 give way too much power to the Secretary of State to assess what he or she believes to be a value-for-money nuclear project and then commit bill payers to paying for it. While I am opposed to the Bill, I have not even proposed wrecking amendments because the amendments today are all designed to ensure that, first, parliamentarians and, secondly, bill payers know exactly what money is being committed and for what reasons.

If the Government have faith in their arguments that nuclear energy is required and that it represents true value for money, it seems to me that they should willingly accept these amendments and new clause 1. If the amendments get defeated in votes, we will know that it is all about continued backroom deals that they fear will not stand up to scrutiny if they were to report on the actual sums.

[John Redwood]

I welcome proposals that will create more generating capacity in the United Kingdom. As the Minister knows, I am extremely worried that we are already typically 10% dependent on imported electricity and that the current plans envisage our becoming more import dependent, with the preferred route for electricity provision being the construction of more interconnectors. I am worried about this on security grounds, because we link ourselves at our peril into an energy-short system on the continent of Europe that is far too dependent on Mr Putin and Russian gas. I also worry about it because we are short of electricity and gas at the moment, and we see the price pressures that that creates. I think we should be doing more to expand the supply of both electricity and domestic gas.

I think the Scottish National party has made some important points, although it comes at nuclear power from a different perspective from that of the Government. While we could usefully enjoy more nuclear power, it is very important that those projects are timely and cost-controlled, with technologies that will deliver reliable power on a sustainable basis. Does the Minister agree that nothing in this legislation, and nothing that he can now do, can prevent the proportion of our electricity that is generated by nuclear from declining for the whole of this decade? As I understand it, these projects take a long time to get type approval and financing, and a long time in construction. As I also understand it, all but one of our current nuclear power stations is scheduled to close by 2030, and although one large new nuclear power station should come on stream during that period, it will not offset all the capacity that is taken out.

Taxation (Post-transition Period) (Ways and Means)

Debate between John Redwood and Alan Brown

Ways and Means resolution & Ways and Means resolution: House of Commons
Tuesday 8th December 2020 Commons Chamber

[John Redwood]

I do not disagree with the hon. Lady. I have said that I want to debate a real Bill. I am giving ideas to the Minister because I do not think what he has in mind for this Bill is going to quite suit me. I want to pep it up. I want to make it more exciting so that we can go out to the public and say, “This is the party that is going to level up. This is the party that knows how to recover an economy that has been damaged by covid”, and that requires lower taxes and different taxes and requires that we use the powers that only the House of Commons has. The House of Lords has very limited abilities to intervene, and on this occasion I am very pleased about that, because it nearly always wants to take the European answer, and the European answer is the high unemployment answer, the high taxation answer and the very complicated taxation answer.

VAT is an extremely complicated tax. We had to adopt its complications and we are now trying to add to those complications to try to avoid items slipping through. We are trying in these proposals to deal with small transactions that sometimes escape the net. They try to find ways of making online organisations, for example, responsible for levying tax between two people trading with each other.

[Alan Brown]

The right hon. Gentleman referred to the levelling-up agenda. On rough figures, we have had 50 years of the EU, 20 years of devolution and over 300 years of the Union. Why are devolution and the EU to blame for the requirement to level up when, quite clearly, the Union is at the heart of the problem?

[John Redwood]

I do not agree, and nor did Scottish voters when they were asked this question. We do have a great democratic country and I was a great enthusiast for the people of Scotland deciding whether they liked our Union or not. They said, yes, they liked our Union. Then the people of the United Kingdom were asked whether they liked the European Union and they said they did not. So I found myself in the happy position of agreeing in two big referendums with the winning side. It is such a pity that the Scottish National party lost both and has never understood the democratic principle that it then has to accept the verdict. I was on the losing side in a former referendum; like my whole party, I was against the principle of Scottish devolution, and we got that wrong. We lost that referendum and from the day after that we did not fight it, delay it or dilute it. We said, “Yes, devolution is the wish of the Scottish people.” We got on and implemented it.

Exiting the European Union

Debate between John Redwood and Alan Brown

Tuesday 24th November 2020 Commons Chamber

[John Redwood (Wokingham) (Con)]

I have declared my business interests in the Register of Members’ Financial Interests. May I reassure the Opposition that I wanted to make a few comments in this debate, and I submitted a request to participate on my own initiative? I have not received any message from the Whips, either before or during these debates, that I should not make a few remarks. With the permission of the House, I will exercise that democratic right.

I understand that there is a parliamentary game going on and that the Opposition want to extend this debate because there are some other things that they do not want to discuss, but that is a matter for them. Oppositions are quite entitled to use what time is available for their own purposes.

[Alan Brown]

May I ask the right hon. Gentleman whether the game is not on the Government’s side, given that they have withdrawn all their speakers, except for his good self?

[John Redwood]

On the contrary. As I have just explained, there has been no pressure to withdraw my application. Some of my right hon. and hon. Friends who thought that they were going to speak in the debate have reread the proposal and realised that, given the incisive eloquence we would hear from the Minister, there was absolutely no need for them to come to the Chamber and duplicate and triplicate that. I have been foolish enough to think that I can add something to the Government’s case, because I support the measure. The fact that my right hon. and hon. Friends seem to have better things to do shows that they are 100% behind the measure, and just want it to be passed as quickly as possible as they attend to their other duties as busy MPs.

So why do I support these regulations, and why are the Government doing this? The first reason is to take back control. That is what millions of people voted for, and many of us are very frustrated that it still has not happened. As the Minister stated clearly, this is about ensuring that, from 1 January, we in this House, on behalf of the British people, can decide for ourselves within international law what the rules shall be on tariffs, quantitative barriers, restrictions and inducements to trade—and how right that is.

I always find it so disappointing that the Opposition, who now say that they understand the spirit of Brexit and have embraced it, do not believe that they can come up with any single improvement on the great body of European law that has been forced on us over many years. I am more optimistic. Working with the talent on the Government Benches, I can see lots of ways of improving on European law. It can be better, not worse, and more rather than less in the right areas. Surely our trade policy should be geared to the interests and concerns of businesses that back this country by investing and creating jobs in it.

United Kingdom Internal Market Bill

Debate between John Redwood and Alan Brown

Wednesday 16th September 2020 Commons Chamber

[John Redwood (Wokingham) (Con)]

I rise to support clauses 46 and 47 and to disagree with the Opposition amendments. It is a great pity that the SNP wishes to turn every debate in this House into a debate on independence when they lost the referendum, because, as a great democrat, I have only ever wanted willing volunteers in our Union. I was delighted to support a referendum to leave it to the Scottish people, and I trust their judgment—it is a pity others do not as well.

Clauses 46 and 47 take important powers to honour one of the pledges made by the Vote Leave campaign, and believed by many voters in that important referendum, that the United Kingdom Government should replace the moneys for projects and investments that would otherwise have been supplied through the European Union. Taking this power illustrates that there is serious intent, that the Government will honour that promise of the referendum campaign, and that the United Kingdom will not lose—indeed, it will gain—as a result of changes in the arrangements for funding large projects and suitable investments.

I always thought that there were three problems with relying on the European Union to fund some of these projects. The first and biggest was that we had to send far more money to Brussels than we got back. One of the great advantages of this power is that every penny that taxpayers pay in the United Kingdom for these purposes will come straight back. There will not be a huge levy on top.

[Alan Brown]

Taking away the semantics about money and all the rest of it, I am sure that the right hon. Member understands that when it comes to structural funds, the EU disburses it to managing authorities—so in Scotland, the Scottish Parliament gets the money from the EU to administer and carry out projects. Clause 46 allows the UK Government to bypass the Scottish Government completely. The EU has not forced one single infrastructure project on England, Wales or Scotland against the wishes of the sovereign Parliaments, but this measure allows the UK Government to bypass the Scottish Parliament and not to recognise the sovereign will of the Scottish people. Surely that is the problem.

[John Redwood]

I do not see any problem at all. I cannot for one moment believe that the United Kingdom Government would want to force on Scotland a project that Scottish people did not wish. Nor do I recognise this idea of the sovereign Scottish Parliament; it is completely under the power of the European Union until we have properly left. The hon. Gentleman never seems to recognise the ultimate power of the European Court of Justice and of the money-awarding procedures that we had to go through to extract back some of the United Kingdom money that we had to send in very large quantities to the union.

Electricity

Debate between John Redwood and Alan Brown

Monday 15th June 2020 Commons Chamber

[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.