Oral Answers to Questions

Kwasi Kwarteng Excerpts

Tuesday 7th June 2022 Commons Chamber

[Mr Laurence Robertson (Tewkesbury) (Con)]

20. What steps he is taking to increase investment in renewable energy projects.

[The Secretary of State for Business, Energy and Industrial Strategy (Kwasi Kwarteng)]

In April, the Government published plans for accelerating renewable energy deployment in our British energy security strategy. Of course, that is very much at the centre of our strategy to ensure sustainability, affordability and security in the long term in our energy.

[Wera Hobhouse (Bath) (LD)]

[Wera Hobhouse]

I wish Alex a happy retirement; where would we be without Hansard?

Ofgem’s remit is a real barrier to increasing grid capacity, as it is currently impossible to make anticipatory grid infrastructure investment. That is slowing the growth of renewables and pushing up household energy bills. If we had the new wind and solar farms that the Government are seeking to procure in this summer’s contacts for difference auction already on the grid, every UK household would save £100 on their energy bill this winter. So why have the Government still not reformed Ofgem’s remit?

[Kwasi Kwarteng]

I am sure that the hon. Lady paid attention to the Queen’s Speech and will have noted that it contained an energy Bill, which will precisely redefine Ofgem in order to attract the anticipatory investment to which she referred.

[Mr Speaker]

I call Laurence Robertson. He is not here. I call Stephen Flynn, the SNP spokesperson.

[Stephen Flynn (Aberdeen South) (SNP)]

Thank you, Mr Speaker. Of course when we are talking about renewables, it is important in this Chamber to reflect upon the fact that Scotland boasts 25% of Europe’s offshore wind capacity and of its tidal capacity. Now that the UK Treasury is going to be coining in some £13 billion from Scotland’s North sea oil and gas sector this year alone, will it give a little bit back and match fund the Scottish Government’s £500 million just transition fund?

[Kwasi Kwarteng]

I am delighted to see the hon. Gentleman so enthusiastic about energy in Scotland. I wish he would extend his support to nuclear power and other forms of decarbonised baseload. On his question, the Treasury has announced a strong investment incentive in relation to the energy profits levy.

[Stephen Flynn]

The Government have £13 billion in their back hipper, yet they will not even give £500 million back. But we should not be surprised, because this UK Government are failing to fast-track the Acorn carbon capture and underground storage project; continue to preside over Scottish renewables projects paying the highest level of grid charging in the entirety of Europe; and confirmed just yesterday that big oil incentives will not be carried over to big renewables either. So may I ask the Secretary of State: is it not the case that, as ever, Scotland has the energy but we do not have the power?

[Kwasi Kwarteng]

Scotland has the energy, and in the form of the UK Government it has a strong supporter of renewables and energy in Scotland. The Minister for Energy, Clean Growth and Climate Change, my right hon. Friend the Member for Chelsea and Fulham (Greg Hands) and I negotiated the North sea transition deal, and we are also pleased to have announced the energy transition zone in the hon. Gentleman’s constituency, powered and funded by my right hon. Friend the Chancellor of the Exchequer.

[Kirsten Oswald (East Renfrewshire) (SNP)]

2. What recent assessment he has made of the potential effect of raising the energy price cap on standards of living.

[The Secretary of State for Business, Energy and Industrial Strategy (Kwasi Kwarteng)]

The Government are well aware of the difficulties households are facing, which is exactly why we have provided a further £15 billion of support, on top of the £22 billion announced earlier this year, to support people with the cost of living.

[Kirsten Oswald]

The energy price cap affects consumers and has major implications for business. The price of energy is recognised as one of the key drivers of inflation, because of rising prices at all levels. That is confounded by the Chancellor’s post-covid rises to VAT on hospitality and tourism. So does the right hon. Gentleman regret not doing more to get the Chancellor to provide more support to small businesses and small business owners, to help them and to help keep prices and inflation down?

[Kwasi Kwarteng]

The hon. Lady will remember that throughout the covid period my right hon. Friend the Chancellor of the Exchequer supported businesses to the tune of something like £400 billion. A lot of that support, in the form of loans and the future fund, is ongoing. I do not think we can take any lectures from the hon. Lady on supporting business through what has been a very difficult period.

[Angela Crawley]

This week, the citizens advice bureaux in Scotland revealed that 62% of the inquiries they receive relate to energy issues. As Ofgem has warned that people can expect a staggering 42% rise in energy prices, does the Secretary of State regret the time he has spent defending the Prime Minister against confidence votes instead of providing much-needed support for businesses and energy consumers to tackle the cost of living crisis?

[Kwasi Kwarteng]

As I have said once and am sure I will repeat, my right hon. Friend the Chancellor of the Exchequer has dedicated £37 billion precisely to help people through what is a very difficult time in relation to the cost of living.

[Dame Andrea Leadsom (South Northamptonshire) (Con)]

I congratulate my right hon. Friend on the excellent package of support for consumers and businesses, but I am sure he will agree with me—unlike the Opposition parties—that it is not just about what the Chancellor can do to step in: there are lots of steps that consumers and businesses can take for themselves to reduce their own energy costs before the energy price cap is changed again this autumn. Will my right hon. Friend update the House on what more can be done to help consumers and businesses to cut their own energy costs?

[Kwasi Kwarteng]

I am delighted that my right hon. Friend has raised that issue. As a keen follower of these matters, she will know what we have done in relation to the heat and buildings strategy, which sets out clearly the kinds of steps that we want people to see in respect of insulation and the possibility of selling energy back to the grid. We are doing lots of exciting things in this policy area. I am sure that my right hon. Friend will be pleased to hear that I am always interested in her ideas and I am delighted that she is heading our Back-Bench policy committee in this area.

[Caroline Lucas (Brighton, Pavilion) (Green)]

One of the fastest and most effective ways to protect people from the impact of rising energy costs would be an ambitious retrofit and insulation programme, which should have been at the heart of the Government’s approach but has been conspicuous by its absence. The Government support pledged so far for energy efficiency falls £1.4 billion short of their manifesto commitment, so will the Secretary of State tell us what more he plans to do on the issue? In particular, will he tell us with absolute certainty that legislation for ECO4—the energy company obligation—which was due in April, will not face any further delays and will definitely be laid before Parliament before the summer recess?

[Kwasi Kwarteng]

It is not my job to say when legislation will be coming into this House—[Interruption.] What I will say—[Interruption.] What I will say specifically in relation to decarbonisation is that we have a clear heat and buildings strategy. The manifesto commitment covered 10 years, so it was not over the term of the Parliament. There was a clear manifesto commitment over 10 years and more money clearly needs to be spent to honour that commitment over a 10-year spending period.

[Mr Speaker]

I call the shadow Minister, Dr Alan Whitehead.

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

It would be really nice if the Secretary of State told us when the ECO4 legislation is coming, because ECO4 is not going to work unless that legislation comes forward.

The Secretary of State knows that the new price cap and the increase in customer bills will have a devastating impact on customers’ struggle with the cost of living, so why is his Department directly contributing to the sky-high price cap levels by putting into place new customer levies—such as the socialisation of the costs of failed energy companies, the green gas levy and the nuclear regulated asset base levy—that will add perhaps £100 to the upcoming and future price cap levels, and hence to customer bills? The Secretary of State talks of Government assistance to help customers to cope with their bills, but is it not very much about giving with one hand and taking back with the other? Should customers not be angry at this cynical policy?

[Kwasi Kwarteng]

There is no reason to be angry about the support, because the £37 billion of support is very real. On the supplier of last resort, the hon. Gentleman will know that 26 firms had to leave the market as a consequence of sky-high wholesale prices, and all the SOLR levy does is socialise those costs within the industry. It was a necessary device to make sure that customers can ease on to other providers without interruption.

[David Johnston (Wantage) (Con)]

3. What steps he is taking to support new low-carbon technologies.

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[Jack Lopresti (Filton and Bradley Stoke) (Con)]

19. What steps his Department is taking to deliver new and advanced nuclear power in the UK.

[The Secretary of State for Business, Energy and Industrial Strategy (Kwasi Kwarteng)]

As my hon. Friend knows, for the first time in 20 years we are committed to much more nuclear capacity than we have ever seen, and the target of 24 GW by 2050 is ambitious but perfectly achievable.

[Jack Lopresti]

Does my right hon. Friend agree that an early decision to announce the commissioning of the first small modular reactors, built by Rolls-Royce, will provide additional investment in our national infrastructure, more jobs and, crucially, help to secure our sovereign energy independence of supply?

[Kwasi Kwarteng]

Earlier this year I was delighted to announce investment—£210 million as I remember—in Rolls-Royce, and the SMRs, as well as advanced nuclear reactors, represent an exciting development in new nuclear. Looking at Labour Members, I must say that it is gratifying to see nuclear power being defended, as under their watch nuclear power was denuded and derided.

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

Hinkley Point C is 50% over budget and running years late. The Government cannot get investment for Sizewell C, and their impact assessment states that a new nuclear power station could cost £63 billion. Is the former Energy Minister, the right hon. Member for Hereford and South Herefordshire (Jesse Norman), correct to say that it is utter fantasy to pretend that this Government can deliver a new nuclear reactor each year?

[Kwasi Kwarteng]

The strategy is committed to 24 GW, and it is about large-scale nuclear and SMRs, which my hon. Friend the Member for Filton and Bradley Stoke (Jack Lopresti) referred to. It will be a balance, and we feel that we can reach that. It is rich of Scottish National party Members to deride our nuclear programme when they do not even agree with it. They think the whole thing is a complete waste of time. Where else would we find decarbonised baseload? They do not have the answer to that.

[Claire Coutinho (East Surrey) (Con)]

T1. If he will make a statement on his departmental responsibilities.

[The Secretary of State for Business, Energy and Industrial Strategy (Kwasi Kwarteng)]

I am pleased to announce that since I last addressed the House we have committed £37 billion, along with our friends in the Treasury, to support the most vulnerable households with the cost of living. We have managed to attract substantial new investments across the piece in new technologies, and we continue to focus on energy, to ensure that it is sustainable, affordable and, above all, secure in the coming months.

[Claire Coutinho]

Semiconductors are an unbelievably important strategic asset to this country, and I commend the Secretary of State for calling in the acquisition of Newport Wafer Fab, which is our largest producer of semiconductors and an important innovator of compound semiconductors. That is exactly what the National Security and Investment Act 2021 was designed to do. Will he update the House on his next steps?

[Kwasi Kwarteng]

My hon. Friend will know that the NSI Act, which came into scope at the beginning of this year, gives me as Secretary of State powers to call in transactions that I feel are detrimental to national security. After long consideration and weighing up all the evidence, Newport Wafer Fab was, I think rightly, deemed to be such a transaction.

[Mr Speaker]

I call the shadow Secretary of State.

[Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)]

If a chair or chief executive of a FTSE 100 company presided over a culture of rule breaking, broke the law themselves and then said that they would do it again, would that person have the Business Secretary’s support, or would he demand better standards than that in public life?

[Kwasi Kwarteng]

I think that we deserve and are all well placed and right to demand the highest standards in any profession across any position and in any institution.

[Jonathan Reynolds]

I agree, but if the Business Secretary believes that integrity and honesty are important in all walks of life, he should have voted against the Prime Minister last night.

I welcome the Government’s U-turn on a windfall tax, but yet again they say one thing and do another. There is uncertainty about who the tax will apply to, and there is worry that the chaotic nature of the announcement could perversely incentivise investment in fossil fuels over renewables. Uncertainty and botched announcements are a feature of the Government, which is one reason why business investment has been so poor under the Conservatives. When will the Business Secretary offer certainty to businesses on who exactly the Government intend to apply the tax to?

[Kwasi Kwarteng]

The hon. Member will know that issues relating to taxation are a matter for my right hon. Friend the Chancellor of the Exchequer. As far as the hon. Member’s windfall tax is concerned, I have always been opposed to such taxes on principle, and I continue to be opposed. I hope that this energy profits levy does not discourage investment; actually, it has features that do attract greater investment.

[Mr Laurence Robertson (Tewkesbury) (Con)]

T2. I am sure that Ministers will join me in congratulating a Royal Mail depot in my constituency that has moved its fleet to electric vehicles. However, that does place a lot of demand on the system, so will Ministers ensure that, when formulating policy, industrial estates, for example, have sufficient electricity to enable even more of them to change to electric vehicles?

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[Alison Thewliss (Glasgow Central) (SNP)]

It was really interesting to hear the Secretary of State palm off the detail of the tax on electricity generators to the Chancellor, because the Chancellor could not answer many questions on that at the Treasury Committee yesterday, such as defining excess profits or saying exactly when it will start or what the impact would be on renewables generators in Scotland. Will he publish a full impact assessment on this policy and investment in the renewables sector in Scotland, which is a key sector in getting to net zero?

[Kwasi Kwarteng]

I am very happy to speak to the hon. Lady about the details of that fiscal change. The energy profits levy was announced by the Chancellor and the details will be worked out in consultation with us, but they are ultimately a responsibility for the Treasury. However, I am very happy to talk to her about those details.

[Helen Morgan (North Shropshire) (LD)]

Diesel and petrol prices have hit a record average high this morning, with diesel costing more than £1.85 a litre. Along with labour shortages, that is having a devastating impact on haulage businesses in North Shropshire and across the rest of the country, as well as driving inflation in the economy. What steps is the Secretary of State taking to support this critical industry through these dual crises?

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[Kwasi Kwarteng]

I am always very pleased to hear the hon. Gentleman’s contributions, given that he was born in my constituency—I am always pleased to see constituents doing extremely well in life. On my role, he is absolutely right that I am responsible for energy—I was Energy Minister and am now the Secretary of State—and that is why we have brought through the net zero strategy, which has plenty on energy from waste, including in relation to our energy needs.

[Peter Grant (Glenrothes) (SNP)]

The recently published preliminary report by the administrators of the failed Safe Hands funeral plans company suggest that this is yet another instance in which company directors have made false promises to innocent people, taken their money, played fast and loose with it and are likely to have lost it all. Will the Minister give us a timetable for the various bits of legislation in the Queen’s Speech so that dodgy company directors can be held to account immediately and not 10 or 15 years later?