Oral Answers to Questions

Kwasi Kwarteng Excerpts

Tuesday 22nd October 2019 Commons Chamber

[Lee Rowley (North East Derbyshire) (Con)]

5. What steps her Department is taking to review the regulation of hydraulic fracturing.

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

I pay tribute to my hon. Friend’s campaign on this fracking issue. We are all concerned about the impact of recent seismic events in Lancashire. My hon Friend knows that the Government have been clear that they will support the exploration of our shale gas resources only in a safe and sustainable way. The Oil and Gas Authority is undertaking an analysis of the data from Cuadrilla’s operations and we will set out our future approach as soon as we have considered that report.

[Lee Rowley]

I thank my right hon. Friend for his comments. Will he confirm that he will consider not just the OGA review, but feedback from constituencies such as mine that do not believe that fracking is the way forward?

[Kwasi Kwarteng]

My hon. Friend is right: this is one of the top issues that come across my desk. I feel the local concern about it, and we will take that into consideration when we reach a final decision.

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

The National Audit Office report confirms that the UK Government have not analysed the costs and benefits of fracking and do not know how much money they have actually spent supporting fracking. Governance and regulation risks remain, as well as decommissioning liabilities that need to be resolved. Is it not time that the UK Government followed the lead of the Scottish Government and decided not to support the development of unconventional oil and gas?

[Kwasi Kwarteng]

As I said to my hon. Friend the Member for North East Derbyshire (Lee Rowley), we will consider the Oil and Gas Authority’s report and we will look at the evidence before we reach a final decision on the issue.

[Jeremy Lefroy (Stafford) (Con)]

Does my right hon. Friend think that it might be a good idea to leave those carbon-based fuels in the ground as a reserve for future generations in case of emergency?

[Kwasi Kwarteng]

My hon. Friend knows that we are committed to a net zero carbon target. We are doing very well on renewables, and our success in that is the best way to reach the target.

[Mr Speaker]

Danielle Rowley—no relation to Lee.

[Danielle Rowley (Midlothian) (Lab)]

Definitely not, Mr Speaker. No offence to the hon. Gentleman.

The decisions that we take over the next year will be critical in preventing climate change from becoming irreversible. The Committee on Climate Change has said that fracking on a significant scale is not compatible with UK climate targets. It increases local air pollution, generates huge volumes of chemical waste water, causes earthquakes and is just not necessary for the UK’s energy security. Yet the Secretary of State recently reiterated her support for fracking. Given the climate emergency, will the Government reconsider and commit now to banning fracking?

[Kwasi Kwarteng]

As I have said on three occasions now, we will consider the OGA report, and we will look at the evidence. We are very mindful of what local communities are saying and we will set out our future direction shortly.

[Faisal Rashid (Warrington South) (Lab)]

7. What recent assessment she has made of the adequacy of workplace access rights for trades unions.

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[Karen Lee (Lincoln) (Lab)]

9. What assessment her Department has made of the potential effect of changes to VAT for solar on the uptake of photovoltaic and battery storage systems.

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

The hon. Lady will understand that the UK was forced to make these changes to comply with EU legislation. Since the new rates only came into effect on 1 October this year, it is too early to see what effect they have had. Once we have left the EU, we will have opportunities to amend the VAT treatment of low- carbon technologies to ensure that we can set the rates that we consider most appropriate.

[Karen Lee]

By raising the VAT threshold for solar installations, the Government are disincentivising the transition to green energy, and this is just one example of the Government’s failure to act with the urgency that the climate crisis demands. Will the Minister undertake today to consider adopting Labour’s plans to fit solar panels to 1.75 million low-income homes, which would combat climate change while creating jobs and reducing energy bills for people in Lincoln and across the UK?

[Kwasi Kwarteng]

I did suggest that the VAT increase was part of EU legislation, and that is something we can amend, if we wish to do so, after we have left the EU. Solar is a UK success story. I will not take any lessons from the Labour party about the success of solar: 99% of our solar-generating capacity and over 1 million installations have been deployed since 2010, since the Government took office. This is something that we are proud of, and it will obviously be part of our energy mix as we seek to hit the target of zero carbon emissions in 2050.

[Kevin Hollinrake (Thirsk and Malton) (Con)]

Even given the VAT situation, solar and wind, together with battery storage on commercial buildings, are pretty much viable without public subsidy. Is not now the right time for a widespread deployment on every public building, including every school, hospital and prison?

[Kwasi Kwarteng]

My hon. Friend makes an excellent observation. We are supporting innovation in this area. We have the Modern Energy Partners programme, which cuts energy costs and carbon emissions across the public sector.

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

Any VAT increase would be yet another hammer blow to solar. The Minister’s predecessors took solar power to the brink, blocked onshore wind, cut support for offshore wind and failed to capitalise on Scotland’s lead in marine and tidal power. Has he compared the detail in the Scottish Government’s new green deal with the lack of detail in the Queen’s Speech? When will his Government wake up to the climate emergency?

[Kwasi Kwarteng]

As I have said a number of times, the VAT increase was a consequence of EU membership, so on that basis I recommend that the hon. Gentleman support the European Union (Withdrawal Agreement) Bill this evening.

[Drew Hendry]

Last month’s energy auction revealed that offshore wind is a third cheaper than gas and half the price of the energy from Hinkley C nuclear plant, yet Tory dogma is holding climate change mitigation back. Does the Minister agree that VAT on solar is yet another barrier to much needed change, and will he ask the Chancellor to rule that out in the Budget?

[Kwasi Kwarteng]

I very much appreciate the hon. Gentleman’s prepared remarks, but he does not seem to be living in the real world. We have delivered on offshore wind, which he mentioned. The price has fallen by two thirds—that is a Government success and we are going to pursue that sort of success to meet the net zero carbon target.

[Giles Watling (Clacton) (Con)]

10. What steps she is taking to enable more women to establish businesses.

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

As a result of the Government’s support, the UK is a world leader in offshore wind and a leader in tackling climate change. The third contracts for difference auction in 2019 delivered 5.5 GW of new offshore wind capacity, and the price was £39 per megawatt-hour, which was two thirds less than just four years ago. Our sector deal also paves the way to increase exports fivefold to £2.6 billion a year by 2030.

[James Cartlidge]

In East Anglia, we want to be champions of clean growth and are very proud that off our coast we are generating 52% of this country’s offshore wind output, but we want to go much further. Can my right hon. Friend assure me that the national grid will be able to keep pace and that we will support technology such as battery storage that will enable us to make the most of our natural asset?

[Kwasi Kwarteng]

My hon. Friend can rest assured that the Government continue to upgrade and invest in the electricity system to ensure that it can deliver additional generation. Of course, battery storage technology and other forms of storage are at the centre of any strategy to reach the net zero carbon target.

[Greg Hands]

The offshore wind sector has been one of the Government’s biggest success stories, with the delivery of the world’s largest capacity. When I was at the Department for International Trade, we also made it a priority to be able to export that capability. Could the Minister tell us a bit about the work that BEIS is doing with the DIT to continue that work so that we also deliver real economic benefits for our country’s exporters?

[Kwasi Kwarteng]

I pay tribute to my right hon. Friend, who spent two years in the Department for International Trade and was an excellent Minister. He has driven a great deal of progress in this area. As he will know, increasing competitiveness and the capability of our supply chain are key to increasing our exporting power, and, through the offshore wind sector deal, the sector will invest up to £250 million for that purpose. I continue to work with my right hon. Friend’s former Department to identify opportunities, and I regularly meet my hon. Friend the Under-Secretary of State for International Trade, in his capacity as Minister for investment.

[Melanie Onn (Great Grimsby) (Lab)]

Ørsted recently opened an east coast hub in my constituency. It is committed to providing local employment opportunities as part of its business, but sadly the extension of the non-EEA visa waiver to the offshore wind workers means that some companies can exploit underpaid and overworked foreign labour rather than developing local opportunities. Will the Government commit themselves to ending the waiver next year?

[Kwasi Kwarteng]

The Government will absolutely commit themselves to supporting new jobs in the sector. Because of allocation round 3, the contracts for difference auction, we are envisaging 400,000 new jobs in the immediate future, in the next few years. This is something at which the Government are actually succeeding and on which we are working.

[Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)]

It was welcome that the Hebridean renewable project won 240 MW in the contracts for difference allocation round, but we need 370 MW to 400 MW for an interconnector. I know that the Scottish island group has enough CfDs to build an interconnector for clean green energy. Is it only the UK that could design a system under which we secure CfDs but Ofgem then says that that is not enough to build an interconnector? Will the Minister ensure that, in these days of climate change, the clean green energy of the Saudi Arabia of renewables—the Hebrides, Shetland and Orkney—is taken advantage of?

[Kwasi Kwarteng]

I welcome the hon. Gentleman’s enthusiasm and passion for this technology, but it is wrong to suggest that the CfD auction was a failure, or that it somehow constituted a defeat. In fact, it was extremely successful. As I have said, the price was £39 per megawatt-hour, two thirds lower than the 2015 price of £115. Obviously we are looking at interconnectors, which will be part of the solution to the issue of net zero carbon.

[Mr Speaker]

Anyone would think that the hon. Member for Na h-Eileanan an Iar (Angus Brendan MacNeil) was conducting a symphony orchestra rather than chairing an august Select Committee of the House, but the eccentricity of the hon. Gentleman merely adds to his lovability.

[Sarah Newton (Truro and Falmouth) (Con)]

There is huge potential for low-cost, low-carbon electricity generation from floating wind in the Celtic sea. Will my right hon. Friend accept an invitation to pay a visit on 19 November and find out about this exciting opportunity?

[Kwasi Kwarteng]

My desire and propensity to visit all these installations know no bounds, and I should be very happy—diary permitting, obviously—to take up my hon. Friend’s offer.

[Wera Hobhouse (Bath) (LD)]

Does the Minister agree that hydrogen should be made from renewables via electrolysis in the medium and long term?

[Kwasi Kwarteng]

The hon. Lady is right to point to the advantages of hydrogen, but, as she will understand, the issue with electrolysis is that it is currently very expensive, so the green hydrogen to which she has referred is something that we are continuing to develop.

[Mr William Wragg (Hazel Grove) (Con)]

12. What steps her Department is taking to support hydroelectric power generation.

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

A number of hydro projects are currently in receipt of support through the feed-in tariff and renewables obligation schemes. As my hon. Friend will know, from 2020 small-scale hydroelectric projects will also be eligible for the smart export guarantee, which allows people to resell excess capacity to the grid.

[Mr Wragg]

My right hon. Friend will be aware of the failure of Solarplicity during the summer. Many renewable energy companies, including Stockport Hydro in my constituency, are significantly out of pocket. Will my right hon. Friend meet me to discuss the problem, and will he urge Ofgem to step in and cover the debts that are owed to Solarplicity?

[Kwasi Kwarteng]

I should be delighted to meet my hon. Friend to discuss the issue. Obviously, I cannot commit Ofgem to bailing out companies or paying debts—that is not its function, as my hon. Friend should know—but I should be happy to meet him at any time that is convenient.

[Albert Owen (Ynys Môn) (Lab)]

I welcome the support given to hydroelectricity generation at this time. Exciting new projects in marine energy need the same support. We would not have a successful offshore wind industry had not support been given to that for decades. Will the Minister follow the work of his predecessor on this and work with the Welsh Government to ensure that this happens around the UK coastline?

[Kwasi Kwarteng]

Absolutely. The hon. Gentleman raises an important point: the success with offshore wind did not come out of a clear blue sky. It evolved and depended on huge amounts of investment and development over many decades. So I am very happy to engage with the hon. Gentleman and the Welsh Government on this.

[Eddie Hughes (Walsall North) (Con)]

13. What steps she has taken to ensure that new mothers can participate in the workplace.

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[Kerry McCarthy (Bristol East) (Lab)]

T2. British companies have been shown to be complicit in the fires and deforestation in the Amazon through their investments and supply chains. Will the Minister look at introducing mandatory due diligence to address this?

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

This subject has come up, and we need to look at how companies and exporters tackle serious carbon emissions. What they are doing in the Amazon is not acceptable. We need to engage with that and have a dialogue.

[Douglas Ross (Moray) (Con)]

T10. I recently visited Orbex in Forres, which is heavily involved in the new spaceport at Sutherland and is seen as a sector leader with its new innovative launch vehicle. Will the Minister outline what support the UK Government can give to companies such as Orbex, which plans to bring 250 high-quality jobs to the region?

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[Tommy Sheppard (Edinburgh East) (SNP)]

T6. Scotland has 35% of the total European carbon capture and storage capacity; it has much of the infrastructure already in place; and it has in my constituency the world-leading research group Scottish Carbon Capture & Storage. Will the Secretary of State press the Chancellor to seriously increase the amount of investment in the next Budget that goes into the industry, so that it can upscale and go into commercial production?

[Kwasi Kwarteng]

The hon. Gentleman is right: carbon capture, usage and storage is going to be crucial to our meeting our net zero carbon target. We are committed to supporting its deployment in the 2020s. The Government are already funding programmes in this policy area worth more than £500 million, and we will have a useful dialogue with colleagues in the Treasury to encourage the development of the technology.

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[David Morris (Morecambe and Lunesdale) (Con)]

I draw the House’s attention to my entry in the Register of Members’ Financial Interests. In my constituency, we have two EDF nuclear power stations. Part of the EDF group is RTE, which is currently working with the British company Aquind to deliver cross-EU-border energy infrastructure. The EU Commission has just removed UK companies from its list of projects of common interests, which affects their regulation. Will my right hon. Friend urge Ofgem to step up and protect British companies by granting regulation as soon as possible in accordance with British law?

[Kwasi Kwarteng]

Absolutely. We had an official present in the room at that PCI meeting on 4 October. This issue has been raised with me and is a matter of concern.

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[Kirstene Hair (Angus) (Con)]

I was delighted to hear that Seagreen wind farm off the coast of Angus was successful in its bid in the UK Government contract for difference auction. It will be the most powerful wind farm throughout the United Kingdom and will have the ability to power up to 40% of Scottish homes. Would the Minister like to come to Angus and see the impact it is already having on our local economy? The local port has already secured the contract for the operations and maintenance base.

[Kwasi Kwarteng]

I would be happy to visit Angus at any opportune time.

[Phil Wilson (Sedgefield) (Lab)]

Sedgefield is home to the largest business park in the north-east of England, with 500 companies and 10,000 to 12,000 jobs. More than 50% of the jobs and businesses there rely in some way on trade with the EU. If the Secretary of State has her way and there is no more frictionless trade with the EU, no more customs union and no access to the single market as there is now, does she not have a responsibility to publish an economic assessment on the effects that will have on my constituents’ jobs?