Contingent Liability (Letter of Credit) and Bounce Back Loan Scheme Update
Kwasi Kwarteng Excerpts(2 years, 3 months ago)
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The Secretary of State for Business, Energy and Industrial Strategy (Kwasi Kwarteng)
Contingent Liability (Letter of Credit)
Today I will lay before Parliament a departmental minute describing a number of contingent liabilities arising from the issuance of letters of credit for the energy administrators acting in the special administration regime for Bulb Energy Limited (“Bulb”). These letters of credit replace previous ones provided, announced within past written ministerial statements, which soon expire.
It is normal practice when a Government Department proposes to undertake a contingent liability of £300,000 and above, for which there is no specific statutory authority, for the Department concerned to present Parliament with a minute giving particulars of the liability created and explaining the circumstances.
I have ensured that Parliament has been afforded the full 14-sitting-day notification period to allow the proper scrutiny of these new contingent liabilities.
Bulb entered the energy supply company special administration regime on 24 November 2021. Energy administrators were appointed by court to achieve the statutory objective of continuing energy supplies at the lowest reasonable practicable cost until such time as it becomes unnecessary for the special administration to remain in force for that purpose.
My Department has agreed to provide a facility to the energy administrators, with letters of credit issued, with my approval, to guarantee such contract, code, licence, or other document obligations of the company consistent with the special administration’s statutory objective. I will update the House if any letters of credit are drawn against.
The legal basis for a letter of credit is section 165 of the Energy Act 2004, as applied and modified by section 96 of the Energy Act 2011.
HM Treasury has approved the arrangements in principle.
Publication of latest bounce back loan scheme and lender performance data
Today the Government provide an update on the performance of the bounce back loan scheme (BBLS), which was designed to provide rapid access to finance for small businesses affected by the coronavirus pandemic. The data in this release includes specific information on the value of loans marked as suspected fraud, and claims made and settled by individual lenders who are accredited for the scheme.
This data release is part of the Government’s ongoing commitment to transparency in relation to BBLS. The Government will continue to provide updates at regular intervals. This update will be published on the BEIS website to allow members to further scrutinise the data.
The data in this publication is as at 31 July 2022, unless otherwise stated. The data comes from information submitted to the British Business Bank’s (the Bank’s) scheme portal by accredited scheme lenders.
As of 31 July 2022, businesses have drawn a total of £46.6 billion through BBLS. The first evaluation of BBLS, published in June 2022, found that up to 500,000 businesses could have permanently ceased trading in 2020 in the absence of the scheme.
It is unfortunate that some have taken the decision to take advantage of this vital intervention by defrauding the scheme for their own financial gain. The Government have always been clear that anyone who sought to do so is at risk of prosecution.
Checks were put in place from the outset to reduce the risk of fraudulent applications being successful. Lenders are the first line of defence, and were required to make or maintain know-your-customer and anti-money laundering checks and use a reputable fraud bureau to screen applicants against potential or known fraudsters. Lenders reported preventing over £2.2 billion-worth of fraudulent applications as a result of these checks.
The Government remain focused on working with the Bank, lenders and law enforcement agencies to tackle fraud in the scheme. This work is supported by the Public Sector Fraud Authority, who have led the development of a sophisticated analytics programme to better understand the level and types of fraud committed against the scheme.
We are working with enforcement bodies including the National Investigation Service (NATIS) and the Insolvency Service to investigate instances of fraud, recover fraudulent loans and penalise fraudsters. Since September 2020, NATIS has opened 273 investigations into BBLS fraud, with a total value of £160 million. Some 78 suspects have been dealt with to date, with 49 arrests made. Meanwhile, Insolvency Service activity on BBLS fraud has so far resulted in 242 director disqualifications, 101 bankruptcy restrictions and 1 criminal prosecution. This enforcement activity is in addition to recovery work being undertaken by lenders as part of their obligations under the BBLS guarantee agreement.
At spring statement 2022, the Government announced an additional £48.8 million of funding over three years to tackle public sector fraud. This included further investment of £13.2 million in NATIS, effectively doubling their capacity to investigate BBLS fraud, and £10.9 million to enhance the Bank’s counter-fraud and assurance work programme.
Headline figures
£28.3 billion: the outstanding balance of total drawn loans making payments on schedule
£4.7 billion: the amount that has been fully repaid by borrowers
£3.2 billion: the outstanding balance of loans in arrears that haven’t yet progressed to defaulted
£1.4 billion: the outstanding balance of loans defaulted that haven’t yet progressed to claimed
£2.6 billion: the outstanding balance of loans claimed that haven’t yet progressed to settled
£1.2 billion: the total settled amount (the amount paid out to lenders under the BBLS guarantee agreement)
£1.1 billion: the total drawn value flagged by lenders as suspected fraud
Notes:
The values stated above will not add up to the total drawn values as set out in column 1 of table 3 (Detailed loan status by lender). That is because the above figures do not take account of events which can reduce outstanding balances—for example: partial repayments of a loan, certain recoveries received in respect of a loan, and amounts written off loans by lenders.
To aid the reader’s understanding of the data, the terms used in this publication are defined at the end.
All businesses remain responsible for repaying their loans under BBLS and are fully liable for the debt.
It is important to recognise that it is still relatively early in the life of the scheme, and therefore it is too soon to definitively assess the performance of the BBLS scheme as a whole. Data being collected from accredited scheme lenders is subject to refinement, addition, and correction over time. Please see “Limitations and further considerations” for further background.
The attachment can be viewed online at: http://www.parliament.uk/business/publications/written-questions-answers-statements/written-statement/Commons/2022-09-05/HCWS292
[HCWS292]
Departmental Update
Kwasi Kwarteng Excerpts(2 years, 5 months ago)
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The Secretary of State for Business, Energy and Industrial Strategy (Kwasi Kwarteng)
BEIS has been committed to improving the business environment and delivering upon the pillars of the plan for growth. We have a plan to secure more domestic energy, support people with the cost of living now, grow the economy and raise wages by reindustrialising our industrial heartlands and unleashing innovation, and accelerate great British science. At the same time, we recognise the power of the private sector and have taken steps to boost enterprise by making the UK the best place in the world to start, grow and invest in a business.
We have seen a significant increase in the global wholesale price of gas as a result of covid-19 aftershocks coupled with Putin’s illegal war in Ukraine, which has led to pressure on business and family budgets.
Tackling the cost of living to help families keep more of their own money:
Raising the national minimum wage and national living wage, giving a full-time worker a £1,000 a year pay rise. Uprating the national living wage has provided a pay-rise for about 2.5 million UK workers. This included the largest ever uplift of a £1,000 a year pay rise for full time workers aged 23 and over.
Helping now with the cost of living by ensuring families receive at least £400 of their electricity bills this winter. Our energy bills support scheme grant payment will take £400 off family electricity bills.
Increasing support this winter with at least £250 additional support for most vulnerable. The warm home discount (£150), winter fuel payments (between £100 and £300) and cold weather payments (£25/week), which ensure that the most vulnerable can heat their homes over the colder months.
Protecting the energy price cap, insulating families from the significant increase in wholesale gas prices. The energy price cap also currently shields 22 million consumers from being overcharged by suppliers. The cap will remain in place until at least the end of this year, ensuring consumers pay a fair price for their energy.
Shielding the public from rip-offs and boosting competition. Draft legislation will be published this autumn to give the Competition and Markets Authority (CMA) enhanced powers to tackle bad business practices, including making it illegal to pay someone to write or host a fake review and making it easier for consumers to opt out of subscriptions.
Pioneering British science to cure cancers and develop technologies so people have better lives:
Establishing the Advanced Research and Invention Agency (ARIA) to improve people’s lives through state-of-the-art technologies. ARIA will support high-risk, high-reward research and projects which support transformative change, including securing £800 million (by 2025/26) at the spending review, agreeing key principles with devolved authorities and setting out ARIA’s independence.
Securing biggest ever research and development budget. We have secured £39.8 billion of R&D investment supporting our commitment to ensure total R&D investment reaches 2.4% of GDP by 2027.
Strengthening the UK vaccine ecosystem to ensure resilience against covid-19 and other future health emergencies. The Vaccine Taskforce has already invested over £395 million in UK manufacturing infrastructure and skills. We have ambitious plans to invest more alongside industry to secure our domestic vaccine resilience. Areas of focus include mRNA capability and investments which will strengthen the resilience of the UK’s vaccine supply chains.
Developing cures for disease, diagnostics and other life-saving research. With DHSC we are committing up to £200 million to healthcare research, diagnostics and manufacturing, building on our world leading covid-19 vaccination programme.
Setting out our visions for the UK to be a global hub for innovation by 2035. We will do this by working with private business, reforming our existing R&D institutions and supporting seven technology families from quantum computing to artificial intelligence.
Building a world-leading UK space sector. We have published the national space strategy backed by £1.75 billion and aligned civil and defence policy for the first time. Through our part owned OneWeb satellite system, we have seen the launch of multiple waves of UK satellites. We also invested £20 million in specialised technology to support the James Webb telescope launch, marking a significant step in space discovery and our understanding of the universe.
Boosting British manufacturing and reindustrialising our former heartlands to drive long-term growth:
Delivered two gigafactories, bringing back manufacturing to Britain. We have announced funding for two major gigafactories in the UK using the automotive transformation fund. Envision AESC based in Sunderland and Britishvolt in Blyth, Northumberland, will have a total capacity of over 40GWh, create over 3,500 direct jobs, as well as 1,000s more in the supply chain and will see over £2 billion of private sector investment in the region. We have also helped secure Ford’s investment of £230 million in production of electric vehicle components at Halewood.
New support for energy intensive industry to protect it for the future. We have announced a three-year extension to EII compensation scheme in the British energy security strategy and more than doubling the budget. This goes alongside our consultation on “other” energy support measures to reduce electricity prices to improve competitiveness for these industries.
Commenced the National Security and Investment Act protecting British industry from hostile activity. This gives the Government greater powers to protect our national security by screening and, if necessary, intervening in investments and other acquisitions of control over sensitive entities and assets in the UK economy.
Taken significant steps to begin to compensate postmasters who have suffered as a result of the appalling Horizon IT failings. This has included announcing that Government will provide funding for interim compensation payments of up to £100k ahead of full funding for eligible postmasters whose Horizon-related convictions have been quashed. We have also announced £19.5 million interim compensation for the “GLO” group of postmasters who exposed the Horizon scandal—to be followed as soon as possible by final compensation.
Securing Britain’s energy to ensure more cleaner, cheaper energy is generated in this country:
Accelerating domestic energy independence through the British energy security strategy (BESS). The BESS and the Energy Security Bill includes support for household energy affordability and efficiency, new and ambitious commitments on nuclear and renewable energy, and setting out the role of the North sea in our low-carbon transition, including delivering our £1 billion commitment to carbon capture and storage clusters by 2030.
Largest-ever renewable energy auction providing 11 GW of great British electricity, with wind power coming in cheaper than ever. Earlier this month, we secured a record 11 GW of renewable energy through the biggest contracts for difference round yet—enough to power around 12 million homes.
Rebuilding Britain’s proud nuclear sector. We have passed the Nuclear Energy (Financing) Act 2022, which will unblock obstacles and cut costs. We are also investing in the sector through the £120 million Future Nuclear fund, £100 million for Sizewell C (in addition to driving forward negotiations), £120 million to develop small modular reactors. We have also established Great British Nuclear, a landmark moment in Britain’s nuclear history, to ensure we deliver multiple new projects this decade.
Securing strong domestic oil and gas extraction. We have given the UK’s oil and gas sector clarity about the role hydrocarbons will play in our energy need with an upcoming new licencing round, backed by the North sea transition deal we will ensure jobs are protected and technologies developed.
Kickstarted UK hydrogen industry with capital and revenue support as well as world-leading legislative framework. Over the last year, we published our hydrogen strategy and investor roadmap and launched a net zero hydrogen fund worth up to £240 million to nurture the UK’s world leading hydrogen economy. The Energy Security Bill also provides a legislative framework for our hydrogen business models.
Denying Britain’s enemies access to funding by ending Putin’s revenue streams. We also committed to end the use of Russian oil and coal power by the end of 2022 and are working with allies to support then away from use of expensive fossil fuels.
Backing other renewable technologies to build stronger domestic supply chain. We have provided a £60 million boost for floating offshore wind projects, supported entrepreneurs to find innovative ways to reduce expensive fossil fuel dependence through the energy entrepreneurs fund, and ringfenced £20 million per year for tidal stream electricity.
Worked with our colleagues across Government to deliver the UNFCC COP26 summit in Glasgow in November 2021 to move 90% of the global economy to net zero. This followed the publication of our heat and buildings and net zero strategies, which laid out a clear path to decarbonise all sectors of the UK economy and achieve net zero by 2050. The summit was attended by 120 world leaders and over 40,000 registered participants. The resulting Glasgow climate pact increases the likelihood of delivering the Paris commitment 1.5 degree scenario.
Since publishing the “The Ten Point Plan for a Green Industrial Revolution” in November 2020, we have landed £22 billion of inward investment into home-grown clean technologies, and estimate to have created around 68,000 green jobs.
[HCWS254]
Coronavirus-related Spend
Kwasi Kwarteng Excerpts(2 years, 5 months ago)
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The Secretary of State for Business, Energy and Industrial Strategy (Kwasi Kwarteng)
I am tabling this statement for the benefit of hon. Members to bring to their attention spend under the Industrial Development Act 1982. In addition to the obligation to report on spend under the Industrial Development Act annually, the Coronavirus Act 2020 created a new quarterly reporting requirement for spend which has been designated as coronavirus-related under the Coronavirus Act. This statement fulfils that purpose. Actual expenditure of assistance provided by Her Majesty’s Government from 1 January to 31 March 2022 £277,208,581 Actual expenditure of assistance provided by Her Majesty’s Government from 25 March 2020 £4,102,510,707 Department for Business, Energy and Industrial Strategy £237,216,907 Department for Environment, Food & Rural Affairs £6,075 Department for Transport £39,991,674 Contingent liability of assistance provided by the Secretary of State from 1 January to 31 March 2022 £9,228,141,179 All contingent liability of assistance provided by the Secretary of State from 25 March 2020 £83,769,317,646
The statement also includes a report of the movement in contingent liability during the quarter. Hon. Members will wish to note that measures such as local authority grants, the coronavirus job retention scheme and self-employed income support scheme, and tax measures such as the suspension of business rates are not provided under the Industrial Development Act 1982 and hence are not included below.
This report covers the first quarter of 2022, from 1 January to 31 March 2022, in accordance with the Coronavirus Act.
The written ministerial statement covering the fourth quarter of 2021 was published on 29 June 2022.
This is the final quarterly report on coronavirus expenditure under the Industrial Development Act 1982. This is in line with the reporting requirements under Section 75 of the Coronavirus Act 2020.
Spend under the Coronavirus Act2020
Under the Coronavirus Act 2020, there is a requirement to lay before Parliament details of the amount of assistance designated as coronavirus-related provided in each relevant quarter. In the period from 1 January to 31 March 2022, the following expenditures were incurred:
Expenditure by Department
Actual expenditure of assistance from 1 January to 31 March 2022 provided by:
Contingent liability under the Coronavirus Act 2020
[HCWS252]
Contingent Liability: Recovery Loan Scheme
Kwasi Kwarteng Excerpts(2 years, 5 months ago)
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The Secretary of State for Business, Energy and Industrial Strategy (Kwasi Kwarteng)
I am tabling this statement for the benefit of hon. and right hon. Members to bring to their attention the details of the extension to the Recovery Loan Scheme (RLS).
RLS is facilitated by the Government-owned British Business Bank and delivered through its delivery partners. Under the extension, lenders will offer facilities of up to £2 million to support businesses that would otherwise be unable to access the finance they need, or would only be able to do so at a higher rate of interest. There will be a £6 billion cap on the aggregate value of loans provided through the scheme for the first two years.
The extension covers the period from 1 August 2022 to 30 June 2024. Under the extension, the following changes will come into force:
The maximum amount of external finance available will be £2 million per business in Great Britain; for businesses in scope of the Northern Ireland Protocol, the maximum amount will be £1 million per business.
The requirement for businesses to certify that they have been affected by the covid-19 pandemic will no longer apply. To lend through the scheme, lenders will be required to certify that they would not have been able to offer a facility to the business on their normal commercial terms, or that they would have only been able to do so at a higher interest rate.
Personal guarantees will be permitted, but not required, for facilities under £250,000—as has been the case to date for facilities above £250,000. This brings the scheme in line with standard commercial practice in business lending. Principal private residences may not be used as security under any circumstances.
Otherwise, scheme parameters are unchanged. As previously:
The minimum facility size will be £25,001 for loans and overdrafts and £1,000 for asset and invoice finance.
Businesses will be required to meet the costs of interest payments and any fees from the outset.
Businesses who have made use of the previous coronavirus loan schemes will be able to access the scheme.
Given the above, the maximum contingent liability for lending up to the £6 billion cap on the scheme is £4.2 billion.
I will be laying a Departmental Minute today containing a description of the liability undertaken.
[HCWS240]
Advanced Research and Invention Agency
Kwasi Kwarteng Excerpts(2 years, 5 months ago)
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The Secretary of State for Business, Energy and Industrial Strategy (Kwasi Kwarteng)
The Advanced Research and Invention Agency (ARIA) is the Government’s new science funding agency. Backed by £800 million out to 2025-26, ARIA will pursue the scientific and technological discoveries that have the potential to profoundly change our world for the better.
Today, I am delighted to update the House on ARIA’S leadership and confirm that I have appointed Ilan Gur as ARIA’S first CEO, and Matt Clifford MBE as ARIA’S Chair.
Ilan Gur is Founder and CEO of Activate, a non-profit organisation that empowers scientists and engineers to bring ground-breaking research to market.
Ilan Gur previously founded two science-based start-ups and served in the first cohort of Programme Directors at ARPA-E. He obtained his PhD in Materials Science and Engineering from the University of California, Berkley. He will take post on 15 August for an initial fixed term of two years.
As ARIA’S founding CEO, Ilan Gur will play a pivotal role in setting the agency’s paradigm-shifting research agenda and establishing ARIA’s culture and organisational structure. He will be tasked with identifying, recruiting and inspiring a team of exceptional technical talent to tackle the world’s greatest challenges.
To support Ilan Gur, Matt Clifford MBE will take the helm as ARIA’s first Chair. Matt Clifford is co-founder and CEO of Entrepreneur First, an international investor in technical talent that has helped to build technological companies worth over $10 billion.
Matt Clifford is co-founder and non-executive director of Code First Girls, has served as a Council member at Innovate UK, and a Trustee of the Kennedy Memorial Trust. Before starting Entrepreneur First, Matt Clifford worked at McKinsey & Co and earned degrees from the University of Cambridge and the Massachusetts Institute of Technology. Matt Clifford will take post on 15 August for a fixed term of four years.
Both appointments have been made in accordance with the Governance Code on Public Appointments following a fair and open competition overseen by an Advisory Assessment Panel.
These appointments mark an important milestone in ARIA’s creation, ahead of the agency becoming fully operational later this year.
[HCWS218]
Oral Answers to Questions
Kwasi Kwarteng Excerpts(2 years, 5 months ago)
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Anthony Mangnall (Totnes) (Con)
The Secretary of State for Business, Energy and Industrial Strategy (Kwasi Kwarteng)
My hon. Friend will be aware that photonics is one of the seven technology families highlighted in the innovation strategy with the absolute intention of showing and developing its domestic potential and the exports possibilities.
Anthony Mangnall
I thank the Secretary of State for his response, but he will know that photonics is completely undervalued across the United Kingdom and that south Devon is home to a large contingent of the photonics sector. With that in mind, can I invite him or presumably his successor, if I am allowed to say that, to the iMAPS—International Microelectronics Assembly and Packaging Society—conference on 18 October to safeguard and flag up the photonics sector?
Kwasi Kwarteng
My hon. Friend will appreciate that in the current circumstances 18 October is a very long time away, but of course I will do my best to attend that conference.
Carol Monaghan (Glasgow North West) (SNP)
As chairman of the all-party parliamentary group on photonics and quantum, I am well aware of the huge success of the UK photonics sector, but its future depends on a thriving semiconductor industry based here in the UK. The UK has that capability, but we need the semiconductor strategy. Could the Secretary of State update the House on when we can expect to see that strategy?
Kwasi Kwarteng
By a curious anomaly, the semiconductor strategy is fully owned by the Department for Digital, Culture, Media and Sport, so that question could be directed to it, but I am grateful that the hon. Member has acknowledged the booming sector here in the UK.
Martyn Day (Linlithgow and East Falkirk) (SNP)
The Secretary of State for Business, Energy and Industrial Strategy (Kwasi Kwarteng)
We talk in Cabinet about the cost of living and the price cap all the time. The hon. Member will know that decisions on the level of the price cap are for Ofgem, but it is something we are constantly talking about in Cabinet.
Martyn Day
MoneySavingExpert’s Martin Lewis has asked a great question over social media:
“The energy price cap’s predicted to rise 64% in Oct taking a typical bill to £3,244/yr; & rise again in Jan to £500/yr more than when May’s help package was announced. What’ll u do to avoid this & when?”
How would the Secretary of State answer that question?
Kwasi Kwarteng
The hon. Member will know that the various parts are moving in the Government, but I am sure there will be the customary statement or Budget in November from my right hon. Friend the Chancellor of the Exchequer, and I am sure there will be some interesting measures there to deal with that particular question.
Sir Christopher Chope (Christchurch) (Con)
Will my right hon. Friend explain how people who live in park homes are going to be able to benefit from the £400 donation from the energy price cap?
Kwasi Kwarteng
I am very pleased to tell my hon. Friend that we recognise the difficulty there. There was a loophole, but we are in the process of consultation about how to deal with that particular issue.
Stephen Flynn (Aberdeen South) (SNP)
I am afraid the Secretary of State just does not get it. As we now know, by the end of the year fuel bills are going to increase by an amount greater than the financial support that has been put in place by his Government. One third of someone’s state pension is going to be required just to pay their electricity and gas bills, so I have a simple question, which I will repeat again: what are they going to do about it?
Kwasi Kwarteng
We have already announced, in the course of the past few months, £37 billion-worth of cost of living support measures this year. I have also mentioned that there will be a Budget in November, when I am sure there will be an update on this very issue.
Stephen Flynn
So nothing new, but let us face the reality as outlined by the abrdn Financial Fairness Trust just in the last couple of days: one in six households in the UK are now in “serious financial difficulties”—a number higher than throughout the entire pandemic—while inflation is sky-high, energy bills are sky-high, fuel bills are sky-high, clothing bills are sky-high, food bills are sky-high, wages are stagnating and we have the lowest growth in the entire G20, bar Russia. Britain is broken, isn’t it?
Kwasi Kwarteng
I am not going to take any lectures from the hon. Gentleman about economic management when his core policy is to separate from the UK, which will have a devastating economic impact on people in Scotland. I am not going to take any lessons from him, thank you very much.
Fay Jones (Brecon and Radnorshire) (Con)
The Secretary of State for Business, Energy and Industrial Strategy (Kwasi Kwarteng)
We are absolutely focused on critical minerals. I am delighted to say that we will publish a critical minerals strategy, which I personally commissioned and have a personal interest in as Secretary of State.
Mr Holden
China has been hoovering up rare earth metals around the world, and obviously other parts of the world have far worse environmental standards for extraction than the UK, but rare earth metals are vital to Nissan in Sunderland, where many of my constituents work, and to Britishvolt, which is just up the road. I thank the Department for the extra money that has been provided recently, with £1 million for Northern Lithium and Weardale Lithium in my constituency to look at this, but what more can the Government do to really help deliver the UK production of vital rare earth metals?
Kwasi Kwarteng
My hon. Friend is absolutely right to focus on that necessity. The Critical Minerals Intelligence Centre was launched only last week and is looking at precisely the question that he raises. In respect of Nissan and Britishvolt, he will know that we landed those investments only last year. We are looking very closely at how we can secure the supply chain here in the UK.
Bill Esterson (Sefton Central) (Lab)
Rare earth minerals are essential to our economy, not least in low-carbon sectors and in defence. The Japanese Government developed their rare minerals plan as long ago as 2010, in response to a blockade by China. I know the UK Government say that they will publish a critical materials strategy in the autumn, but if other countries have been building resilience since 2010, what confidence can we have that this Government will develop an effective strategy for our economy and our national security when, as the Secretary of State has just admitted, they have only just woken up to the scale of the risks that we face?
Kwasi Kwarteng
I think the hon. Gentleman does the Government a disservice. Obviously Japan was focused on security of supply, given its immediate exposure to China. Where we have come in is in bringing together, for instance, the United States and Canada: officials in Canada whom I speak to are looking at our critical minerals strategy with great interest, and we are very much leading the way in the Five Eyes.
Geraint Davies (Swansea West) (Lab/Co-op)
Yvonne Fovargue (Makerfield) (Lab)
The Secretary of State for Business, Energy and Industrial Strategy (Kwasi Kwarteng)
As the hon. Lady should know, a consultation, which includes proposals to take further steps to address unsafe products sold online, is being finalised, and the consultation paper will be published later this year.
Yvonne Fovargue
Unsuspecting and cash-strapped consumers are being peddled recalled white goods, unsafe devices claiming to save energy, and dangerous toys. Online marketplaces are a hotbed for unsafe products, as has been evidenced time and again by investigations carried out by Electrical Safety First and other organisations. What steps are the Government are taking to address the safety risks that consumers face when shopping on these platforms?
Kwasi Kwarteng
As the hon. Lady will know, the Office for Product Safety and Standards leads a national programme of regulatory action to look at precisely those risks. In 2021, for example, 12,500 products were removed from supply as a direct result of OPSS intervention.
Mr Robin Walker (Worcester) (Con)
My late constituent Bethany Shipsey was tragically killed after consuming just a small amount of the lethal explosive precursor dinitrophenol—DNP—which is sometimes wrongly marketed as a slimming or bodybuilding product. May I ask my right hon. Friend for a meeting to discuss this tragedy, and how we can take steps to crack down on the overseas suppliers who are selling this deadly substance into the UK online?
Kwasi Kwarteng
I should be happy to meet my hon. Friend, who did excellent work at the Department for Education.
Mr Speaker
Unlike Lord Callanan, who does not meet people.
Sir Edward Leigh is not here, so I call Gavin Newlands.
Gavin Newlands (Paisley and Renfrewshire North) (SNP)
The Secretary of State for Business, Energy and Industrial Strategy (Kwasi Kwarteng)
We have talked about energy prices. We have an energy price cap, and we have it because it protects consumers from being exposed to the wild gyration of prices—and that is what it has been doing.
Gavin Newlands
I thank the Secretary of State for that answer, whatever that was.
More than a fifth of my constituents already live in fuel poverty, despite the best efforts of the Scottish Government and local agencies investing heavily in energy efficiency measures. The £400 announced by the previous Chancellor is totally inadequate given that we hear the price cap is to rise by a further £500. What action will the Secretary of State, and what is left of his Government, be taking to change the energy market fundamentally in order to ensure that no one in this country is left to choose between heating and eating?
Kwasi Kwarteng
I made the point about the price cap because wholesale gas prices have gone up 20 times and the price cap is protecting vulnerable people who are eligible for it, just as some in the House have remarked that people relying on off-gas grid heating are not protected by it. In relation to the substance of the hon. Gentleman’s question, we are looking at energy market reform to decouple the marginal cost—the cost that people pay—from the actual cost of generation, which is much more based on renewables.
John Mc Nally (Falkirk) (SNP)
Andrew Bridgen (North West Leicestershire) (Con)
The Secretary of State for Business, Energy and Industrial Strategy (Kwasi Kwarteng)
My hon. Friend will have noticed that we are fully committed to the nuclear power industry and, unlike the Opposition, we are looking to develop nuclear power because it is an essential component of decarbonised, stable, firm power.
Andrew Bridgen
I thank my right hon. Friend for that reassurance. I have long spoken up for modular nuclear technology, not only for the baseload it can supply to our energy production but for the jobs and prosperity it can provide for the city of Derby and the north of England. Does he agree that while we wait for this modular nuclear technology to come online, it is also important that we invest in fracking, because short-term energy security has never been more important than it is currently?
Kwasi Kwarteng
My hon. Friend will know that I asked the British Geological Survey to look at fracking, and we will be coming out with a statement on its findings shortly.
Sir Christopher Chope (Christchurch) (Con)
The Secretary of State for Business, Energy and Industrial Strategy (Kwasi Kwarteng)
My Department remains relentlessly focused on energy security for the winter, and I have met many business groups, business people and energy suppliers over the last few days. Only last week, to protect our people from costly bills, we published the Energy Bill, and I am pleased that last week’s fourth round of the contracts for difference scheme was the most successful ever. It secured almost 11 GW across a range of clean technologies, including offshore wind, onshore wind, solar and, for the first time ever, floating offshore wind and tidal stream. This will help to boost our energy security for many years to come.
Sir Christopher Chope
In thanking my right hon. Friend for that answer, may I say that his answer to my earlier question will have been of little comfort to more than 100,000 households living in park homes? The Government are apparently still working on how to deal with this issue, but meanwhile those households fear they will miss out while those with second homes benefit more than twice, so can he guarantee that each of those households will get £400 in cash, as an energy bill rebate, whether it be in the form of a voucher, a direct payment or whatever? They need to know now that they will get the £400.
Kwasi Kwarteng
My hon. Friend has very successfully asked the same question twice, which is fair enough, and I will give him the same answer. We have had the consultation, and we will come up with a response that ensures his constituents get a fair deal on this issue.
Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)
In the last 12 years, this country has had a referendum on its membership of the European Union, a referendum on the continued existence of the UK and four general elections, and now we are about to have our fourth Prime Minister. In that time, business investment in the UK has fallen to the lowest level in the G7. Does the Secretary of State accept that one reason for that is the lack of political stability under the Conservative party?
Kwasi Kwarteng
I will take no lessons in political stability from the hon. Gentleman, who stood on a platform to elect a neo-Marxist as Prime Minister of this country. That would have been a catastrophic disaster for business investment and, indeed, for our economic prospects.
Jonathan Reynolds
If the right hon. Gentleman wants to be the next Chancellor, he will have to do better than that.
Let us look at an area where he should have taken a lesson from us. Earlier in the year, we said it would be a mistake for this Government to increase national insurance. With inflation and energy bills rising for businesses, we said it was wrong for the Government to add to that burden in a way no other major economy was doing. It seems that Conservative contenders are now lining up to disown the tax rise they voted for just a few months ago. Does he agree with his colleagues that the Government got this badly wrong?
Kwasi Kwarteng
People will understand that the increase in the national insurance contribution was precisely to pay for the NHS backlog and for ongoing health and social care costs. In that context, it made sense.
Peter Aldous (Waveney) (Con)
Kwasi Kwarteng
My hon. Friend will appreciate that when he first came into the House we did not have any auctions and then for about six years we had an auction every other year. It was very much my intention as Secretary of State to introduce an annual auction, and I am pleased to say we have done so. It has given much more security and visibility to the supply chain, which was one reason why I introduced it.
Chris Stephens (Glasgow South West) (SNP)
Kwasi Kwarteng
I have talked about this issue with my right hon. Friend the Transport Secretary, and we are looking at ways in which egregious action can be mitigated.
John Lamont (Berwickshire, Roxburgh and Selkirk) (Con)
Steve McCabe (Birmingham, Selly Oak) (Lab)
Kwasi Kwarteng
The hon. Gentleman will appreciate that I have been to Coventry many times to discuss this issue and that we have landed gigafactories in Sunderland. There were none when I became Secretary of State and we now have two, and we are working all the time to land more of them here in the UK.
Julian Sturdy (York Outer) (Con)
Alan Brown (Kilmarnock and Loudoun) (SNP)
Kwasi Kwarteng
That is absolute nonsense. My answer to the hon. Gentleman’s specific question was that pumped storage hydro was something that was particular in Scotland—it was something that happened in Scotland. But as for this general remark about us not supporting Scottish energy, the SNP is the party that has turned its back on Scottish nuclear, which employs huge numbers of people. The SNP has completely abandoned nuclear, it does not care about the jobs, and it does not care about industry in its own country.
George Freeman (Mid Norfolk) (Con)
I had looked forward to being in the box, but as they say, them’s the breaks. I take the opportunity to thank the Secretary of State, my private office and the team in the Department for their support in the past year. Does the Secretary of State agree that whoever wins this fabulous festival of talent, it is essential that we put science, technology and innovation at the very heart of our economy—perhaps even with a Cabinet Minister for it?
Kwasi Kwarteng
I think it is absolutely essential. I am sure that my right hon. Friend would agree when I say that he was an excellent Science Minister, and I am delighted to see him take an interest in our affairs from where he is seated. I look forward to his ongoing contribution to our science and technology agenda in the course of this Parliament.
Munira Wilson (Twickenham) (LD)
Gareth Thomas (Harrow West) (Lab/Co-op)
The Competition and Markets Authority recently concluded that a lack of competition in key parts of the economy was leading to higher mark-ups from already profitable firms. In short, inflation was being caused in part because Ministers were not doing enough to ensure effective competition across those key bits of the economy. What is the Secretary of State doing about that?
Kwasi Kwarteng
The new CMA chair, Marcus Bokkerink, was confirmed by the Business, Energy and Industrial Strategy Committee. He and I are working very closely to see how we can improve the performance of the CMA, to make sure that consumers get a better deal.
Valerie Vaz (Walsall South) (Lab)
The Minister knows that 115 Horizon Europe grants were cancelled last week. Will he commit to ensuring that that money is given to our excellent scientists, just as the previous, excellent, science Minister would have done?
Kwasi Kwarteng
I am pleased to announce that we have, in the first instance, committed to Horizon, but we also have a plan B—an alternative that will ensure that all the money we have put into Horizon is retained in the UK. That is exactly what I am discussing with the Chancellor of the Exchequer.
Mr John Whittingdale (Maldon) (Con)
I strongly endorse the remarks made by my hon. Friends the Members for Bury St Edmunds (Jo Churchill) and for South Suffolk (James Cartlidge), but may I raise a separate issue with the Secretary of State: the deep concern felt across the creative industries about the proposal in the consultation about relaxing the copyright exception for artificial intelligence? I spoke to the Minister’s predecessor, my right hon. Friend the Member for Kingswood (Chris Skidmore), who was sympathetic and said he would look into it. May I ask that the new Minister also looks into it and makes sure that we protect one of our most important industries?
Kwasi Kwarteng
My right hon. Friend is absolutely right. He knows that I am in constant talks with officials in the Department for Digital, Culture, Media and Sport and my right hon. Friend the Secretary of State for that Department to make sure that we have a reasonable response to this danger, which he very ably highlights.
Stephanie Peacock (Barnsley East) (Lab)
I am grateful to the Minister for meeting me to discuss the mineworkers’ pension scheme. I know, after speaking to him last week, that it has been referred to the Treasury for a decision. Given that that decision needs to be made before the House rises next week, may I urge him to chase it up, please?
Richard Graham (Gloucester) (Con)
Thank you for giving me a second chance, Mr Speaker. May I congratulate the Secretary of State and the Energy Minister on last week’s first ever ringfenced marine energy renewables auction? This is a landmark moment for the UK in generating our own domestic green energy from some of the world’s fiercest tides. When will my right hon. Friend be able to announce another ringfenced pot for marine energy?
Kwasi Kwarteng
During my time as the Energy Minister, my hon. Friend lobbied hard and consistently on this subject, and I am pleased to say that through my successors as Energy Minister and with me as Secretary of State, we have finally delivered. I pay tribute to my hon. Friend for his work to secure that.
John Cryer (Leyton and Wanstead) (Lab)
What discussions has the Secretary of State had with local authorities and other Departments about what seems to be a threat to the future of community swimming pools from rising energy bills? Swim UK, the Royal Life Saving Society and other organisations have said that, potentially, hundreds of pools face closure.
Energy Security Bill
Kwasi Kwarteng Excerpts(2 years, 5 months ago)
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The Secretary of State for Business, Energy and Industrial Strategy (Kwasi Kwarteng)
As the world has emerged from the covid-19 pandemic, global demand for energy has risen significantly—this has been exacerbated by Putin’s malign invasion of Ukraine. As a result, the wholesale price of gas has reached historically high levels.
That is why we are taking measures to support families
We are acting now with a £37 billion package of financial support this year. Millions of the most vulnerable households will also receive £1,200 of one-off support in total this year.
Making changes to the National Insurance Contribution threshold which take effect from today, with a typical employee saving over £330 a year.
Cutting bills by investing in energy efficiency. We are also making huge progress on the energy efficiency of UK homes making them more comfortable and affordable to run, backed by £6 billion of funding over this Parliament. In 2008, 9% of UK homes had an Energy Performance Certificate of C or above—it is now 46%.
But secure, clean and affordable energy for the long term depends on the transformation of our energy system. This means more home-grown energy from more diverse sources which reduce our dependency on imported fossil fuels and our exposure to volatile and high prices in international markets. And we will reform our energy markets so consumers benefit from lower-cost, home-grown renewables and other low- carbon technologies. Our agenda will catalyse investment, reversing lost decades of under-investment, and boosting jobs and new industries in a world-leading, low-carbon economy.
That is why we are bringing forward a landmark Energy Security Bill. This Bill will deliver a cleaner, more affordable and more secure energy system for the long term. It builds on the ambitious commitments in the Prime Minister’s 10-point plan and the British energy security strategy to invest in homegrown energy and maintain the diversity and resilience of the UK’s energy supply.
We will do this by:
Leveraging private investment in clean technologies and building a homegrown energy system.
Over the last decade the UK has built one of the most diverse energy systems in the world but previous Governments have historically failed to make these investments which has left us in the current situation. The Bill will deliver key commitments from the British energy security strategy, the Prime Minister’s 10-point plan and net zero strategy to drive an unprecedented £100 billion of private sector investment by 2030 into new British industries and supporting around 480,000 clean jobs by the end of the decade.
Accelerate the growth of low carbon technologies. We will introduce state of the art business models for carbon capture usage and storage (CCUS) and hydrogen, attracting private investment by providing long-term revenue certainty. Together with the measures on CO2 transport and storage, this will put the country on a path to seize market share and grow the economy.
Enable the set up and scale up of the first of a kind CO2 transport and storage networks. The Bill will establish the economic regulation and licensing framework to ensure successful deployment.
Taking further steps to explore the role for hydrogen to heat our homes and workplaces. We will enable the delivery of a large village hydrogen heating trial by 2025, providing crucial evidence to inform strategic decisions in 2026 on the role of hydrogen in heat decarbonisation.
Scale up heat pump manufacturing and installation, and a new white goods industry in the UK. We will establish a market-based mechanism for the low-carbon heat industry to step up investment and lower the cost of electric heat pumps, through economies of scale and innovation.
Take the next big leap on the technology of the future with fusion regulation. We will make the UK the first country to legislate for fusion, providing clarity on the regulatory regime for fusion energy facilities.
Reforming our energy system to protect consumers from unfair pricing.
The last piece of primary energy legislation of this scale was the Energy Act 2013. Almost 10 years later we need to ensure that this Bill accounts for the current global context.
Enabling the extension of the energy price cap, protecting families. The energy price cap is the best safety net for 22 million households, preventing suppliers from overcharging consumers. The Bill will enable the extension of the price cap beyond 2023.
Enhancing our network security with a new system operator, which will boost energy resilience. We will establish a future system operator, an independent body with responsibilities in both the electricity and gas systems, ensuring efficient energy planning, enhancing energy security, minimising cost to consumers and promoting innovation.
Creating more competition in our electricity networks to deliver bill savings. We will enable competition in onshore electricity networks, delivering up to £1 billion savings for projects tendered over the next 10 years.
Protect consumers from increasing network prices in the event of energy network company mergers. We will enable the Competition and Markets Authority to review any relevant energy network company mergers under the Energy Network Special Merger Regime. We estimate this could save energy consumers up to £420 million over 10 years.
Protecting consumers from cyber threats with new protections for smart appliances. We are taking powers to deliver appropriate protections for consumers and the grid by placing requirements on energy smart appliances.
Helping consumers manage their energy use and cut their bills to help with the cost of living. We are continuing to drive industry progress on the smart meter rollout which is set to deliver a £6 billion net benefit to society.
Enabling innovation and gearing our system toward net zero. We will reform energy codes, overhauling the way that the technical and commercial rules of the energy system are governed.
Reducing the number of cabling, landing points, and substations. We will introduce multipurpose interconnectors as a licensable activity, we are providing certainty to investors and developers, enabling them to make decisions regarding future multi-purpose interconnector projects.
Removing obstacles to innovative batteries and pumped hydro storage. We will facilitate the deployment of electricity storage, such as batteries and pumped hydro storage, by clarifying it as a distinct subset of electricity generation.
Creating a more equal and fair energy market. We will enable the Government to establish a buy-out mechanism under the ECO scheme for suppliers.
Ensure families living on heat networks are better protected. By appointing Ofgem as the new regulator for heat networks in Great Britain, we will ensure consumers get a fair price and a reliable supply of heat.
Kick-starting the development of heat networks. By enabling heat network zoning in England, we will overcome barriers to deployment by identifying areas where they provide the lowest cost solution to heating buildings.
Taking back control of powers given to the EU on the energy performance of buildings. The Bill will provide a replacement power to enable the UK Government to amend the EU-derived Energy Performance of Buildings regime going forward.
Ensuring the safety, security and resilience of the UK’s energy system.
The responsible operation of the UK energy system is crucial for our safety and security. That is why the Bill will bring forward measures relating to core fuel resilience, nuclear and the offshore oil and gas sectors.
Protect our fuel resilience from malicious action. We will bring forward measures for downstream oil security—oil terminals, filing stations etc—to prevent fuel supply disruption, such as from industrial action, malicious protest and for reasons of national security.
Boost British nuclear by removing barriers to investment. The British Energy Security Strategy is clear that nuclear is an important part of the UK’s energy mix. The Bill will remove potential barriers to future investment by enhancing our nuclear third party liability regime.
Prepare for our nuclear future and clean up the past. The Bill will also facilitate the safe, and cost-effective clean-up of the UK’s nuclear sites, ensuring the UK is a responsible nuclear state by clarifying that a geological disposal facility located deep below the seabed will be licensed.
Making our oil and gas sector fit for the future to ensure high standards. Our oil and gas sector will continue to play an important role in ensuring security of supply. This Bill will enable existing legislation to be updated ensuring that the offshore oil and gas environmental regulatory regime maintains high standards in respect to habitats protection and pollution response.
Ensure responsible ownership of our UK assets. The Bill will ensure that the UK’s oil and gas and carbon storage infrastructure remains in the hands of companies with the best ability to operate it.
Protecting taxpayers by maximising cost recovery. In line with the polluter pays principle, the Government will be able to more fully recover the costs associated with regulating offshore oil and gas decommissioning activities from the industry.
Simplifying regulatory frameworks. This Bill will bring forward the final delicensing and re-use of nuclear sites. It will allow more proportionate clean-up of these sites, resulting in estimated savings of around £490 million (NPV) over the first 20 years, with similar savings up to 2080.
Strengthen the Civil Nuclear Police’s powers to help keep Britain safe. This Bill will introduce legislation to enable the Civil Nuclear Constabulary to utilise their expertise in deterrence and armed response to support the security of other critical infrastructure sites.
[HCWS185]
Industrial Action: Employment Agencies and Trade Union Liability
Kwasi Kwarteng Excerpts(2 years, 6 months ago)
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The Secretary of State for Business, Energy and Industrial Strategy (Kwasi Kwarteng)
Government will shortly lay before Parliament two statutory instruments: the Conduct of Employment Agencies and Employment Businesses (Amendment) Regulations 2022, and the Liability of Trade Unions in Proceedings in Tort (Increase of Limits on Damages) Order 2022.
Removal of regulation 7 of the Conduct Regulations 2003
The recruitment sector is regulated by the Employment Agencies Act 1973 and the Conduct of Employment Agencies and Employment Businesses Regulations 2003 (“the Conduct Regulations”). Regulation 7 of the Conduct Regulations makes it a criminal offence for an employment business to knowingly—or having reasonably grounds for knowing—provide temporary workers to an employer to perform the duties of workers taking part in an official strike or other industrial action.
Repealing these burdensome legal restrictions, will give businesses impacted by strike action the freedom to tap into the services of employment businesses who can provide skilled, temporary agency staff at short notice to temporarily cover essential roles for the duration of the strikes.
We believe the changes we are making will help mitigate the impact of future strikes, such as those seen on our railways last week, by allowing trained, temporary workers to carry out crucial roles to keep trains moving. The change in law, which will apply across all sectors, is designed to minimise the negative and unfair impact of strikes on the British public by ensuring that businesses and services can continue operating. For example, strikes in public services such as education can often mean parents have to stay at home with their children rather than go to work, or rail sector strikes stopping commuters getting to work or to other businesses.
It should be noted that removing this regulation does not put in place any new barriers on an individual’s right to take part in lawful industrial action. Employment Businesses will not be required to supply agency workers to businesses, rather the change that we are making simply provides the freedom to do so should they wish to. Similarly, a key part of our protections for agency workers is that they cannot be compelled to take on assignments and removing this regulation does not alter existing health and safety requirements.
Increase to the damages cap for unlawful strikes
When they are considering legal claims against unions which organise or authorise unlawful strikes, employers may decide to bring a claim for damages against the union. The Trade Union and Labour Relations (Consolidation) Act 1992 sets the upper limits to the damages that can be awarded based on the size of the union that organised the unlawful strike action. The levels of damages have not been reviewed since 1982 and are significantly out of date.
Increases the existing caps for damages awarded against trade unions for organising unlawful strike action in line with inflation, using the Retail Price Index (RPI) as the measure of inflation.
Unions who comply with the statutory balloting framework and wider trade union legislation will be unaffected by this change. This statutory instrument does not affect the right to strike. So long as unions follow the law, they will continue to be protected from damages claims as they are now.
The Government are simply increasing the damages caps for unlawful strike action to broadly the levels they would have been at, had they been updated regularly since 1982.
[HCWS137]
National Security and Investment Annual Report 2022
Kwasi Kwarteng Excerpts(2 years, 6 months ago)
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The Secretary of State for Business, Energy and Industrial Strategy (Kwasi Kwarteng)
I am today laying before Parliament the first annual report under the National Security and Investment Act 2021. I will place copies in the Libraries of both Houses and the report will also be published on gov.uk.
The National Security and Investment Act 2021 protects the UK from risks to national security arising from acquisitions of control of entities and assets. In doing so it also maintains the UK’s status as an attractive place to invest. The system is predictable, enabling businesses involved in acquisitions to have certainty when engaging with it and it provides clear and efficient clearance processes for relevant acquisitions to be assessed, for remedies to be applied if necessary.
The new National Security and Investment (NSI) system commenced on 4 January 2022. The Act requires me to report on the system each year after 31 March.
I am pleased to lay the first NSI Act annual report before the House today. This fulfils my requirements under section 61 of the Act for this year.
The report shows that the system has started strongly. As of 31 March, the Investment Security Unit received 222 notifications and accepted 201 of them. To that date I had issued 17 call-in notices. Of those notifications that were cleared without any further action, all were cleared within the statutory 30 working-day limit. I had not imposed any final orders (the means by which I can impose conditions on, block, or unwind an acquisition) by 31 March in relation to the 17 call-in notices issued, though the full national security assessment process was still ongoing for many of them.
Because the data covers only the first three months of the Act’s operation, we cannot draw long-term conclusions or observe patterns with accuracy. However, the system is operating well and, extrapolating out, volumes at each stage are within the estimates provided by the impact assessment.
We brought forward the reforms in the NSI Act to protect national security while keeping the UK open to investment. The early data is encouraging and shows that these objectives can be complementary rather than mutually exclusive. Those who wish us harm should be in no doubt that we will always act to protect the UK’s national security interests. Equally, the Government’s ambition is for the UK to be the best place in the world to invest and to start and grow a business, so I hope that business leaders and investors will take confidence from this report.
[HCWS106]
Oral Answers to Questions
Kwasi Kwarteng Excerpts(2 years, 6 months ago)
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Mr Laurence Robertson (Tewkesbury) (Con)
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)
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.
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)
Jack Lopresti (Filton and Bradley Stoke) (Con)
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)
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.
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)
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?
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?