Reforming Competition and Consumer Policy
Kwasi Kwarteng Excerpts(2 years, 7 months ago)
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The Secretary of State for Business, Energy and Industrial Strategy (Kwasi Kwarteng)
I wish to inform the House that the Government have today published their response to the consultation “Reforming Competition and Consumer Policy—Driving growth and delivering competitive markets that work for consumers”, which was published in July 2021.
In this response the Government reaffirm their commitment to boosting consumer rights and preventing scams and rip-offs. This includes modernising the existing framework of consumer rights to better reflect today’s shopping practices and in particular increasing digitalisation. We set out an ambitious set of proposals to enhance enforcement of consumer rights, by sharpening the powers of the Competition and Markets Authority (CMA) and the courts, delivering our manifesto commitment to tackle consumer rip-offs and bad business practices. The response sets out reforms to competition law to further the dynamism of UK markets, and ensuring the CMA is able to act quickly and effectively to support this.
Implementing these reforms will create a prosperous economy where consumers can engage in markets with full confidence that they will get a good deal; and where vigorous competition drives growth and innovation while minimising burdens on business.
This agenda was consulted on in summer 2021, and received strong support from a broad range of interested parties and stakeholders. We received 188 written responses to the consultation, and further engaged directly with stakeholders in a series of roundtables and meetings on specific matters to determine how to best implement these ideas. We are grateful for the views received through the consultation process and will use these views to refine our reform programme and seize the opportunity to build back better.
The Government have also published today:
The results of a UK consumer protection study; and a post-implementation review of the Competition Appeal Tribunal Rules 2015, including the response to the related call for evidence of March 2021.
Copies of the consultation response, together with the other documents, may also be found online at:
https://www.gov.uk/government/consultations/reforming-competition-and-consumer-policy.
https://www.gov.uk/government/consultations/post-implementation-review-of-the-competition-appeal-tribunal-rules-2015-call-for-evidence.
https://www.gov.uk/government/publications/consumer-protection-study-2022.
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Energy Security Strategy
Kwasi Kwarteng Excerpts(2 years, 7 months ago)
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The Secretary of State for Business, Energy and Industrial Strategy (Kwasi Kwarteng)
With permission, Mr Speaker, I will make a statement on the British energy security strategy.
Our strategy provides a clear, long-term plan to accelerate our transition away from expensive fossil fuel prices set by global markets we cannot control. It builds on our success over the past decade in which we gave the go-ahead to the first nuclear power plant in a generation and achieved a fivefold increase in renewables. The British energy security strategy marks a significant acceleration in our ambition. It is confirmation of three mutually reinforcing goals of our energy policy and, indeed, of any well-constituted energy policy: security, affordability and sustainability.
We recognise the pressures that many people across our country are facing with the cost of living. This has been greatly influenced, as we all know, by global factors. That is why my right hon. Friend the Chancellor of the Exchequer announced a £9 billion package of support, including a £150 council tax rebate this month and a £200 energy bill discount in October to cut energy bills quickly for the vast majority of households. We are also expanding the eligibility for the warm home discount, which will provide around 3 million low-income and vulnerable households across England and Wales with a £150 rebate on their energy bills this winter. As I speak, our energy price cap is still protecting millions of consumers from even higher wholesale spot gas prices. Furthermore, we are investing over £6 billion in decarbonising the nation’s homes and buildings—set out very clearly in last year’s heat and buildings strategy—which saves the lowest-income families around £300 a year on their bills. I want to reassure the House that the Chancellor has promised to review his package of support before October and will decide on an appropriate course of action at that time.
Cheap renewables are our best defence against fluctuations in global gas prices. By 2030, 95% of our electricity will be produced by low-carbon means. By 2035, we aim to have fully decarbonised our electricity system. We will double down on every available technology. The strategy sets out a new ambition to propel our offshore wind industry. It will increase the pace of deployment to deliver 50 GW by 2030, instead of the 40 GW committed to in the manifesto. Of that 50 GW, up to 5 GW will be floating offshore wind. The strategy also commits us to slash approval times for new offshore wind farms from four years to one year. We also feel—this is reflected in the strategy—that our solar capacity can grow by up to five times by 2035.
As is well known, most of Britain’s nuclear fleet will be decommissioned this decade. We need to replace what we are losing, but we also need to go further. From large-scale plants to small nuclear modular reactors, we aspire to provide a steady baseload of power that will complement renewable technology. Obviously, the right time to take those decisions would have been 20 years ago, but of course the Labour party all but killed off the British nuclear industry. That is why we will be reversing decades of under-investment and building back British nuclear. We aim to deliver up to 24 GW of nuclear power by 2050, approximately three times more than today, which will represent 25% of our projected energy demand.
We are also doubling our ambition for low-carbon hydrogen production. The capacity we aim to reach by 2030 is 10 GW, with at least half of that total coming from green, electrolyser-produced hydrogen. This fuel will not only provide cleaner energy for vital British industries to move away from fossil fuels, but will also be used for storage, trains, heavy equipment and generating heat. The transition to cheap, clean power cannot happen overnight. Those calling for an immediate end to domestic oil and gas ignore the fact that it would simply make the UK more reliant on foreign imports. It would not, in fact, lead to greater decarbonisation globally.
Producing more of our own energy will protect us into the future. We feel that this historic change, this decarbonisation challenge, represents a huge opportunity for the United Kingdom: more wind, more solar and more nuclear, while also using North sea gas to transition to cheaper and cleaner power. This is a long-term plan to ensure greater energy independence and to attract hundreds of billions of private investment to back new industries that can create hundreds of thousands of high-quality jobs and stimulate business across the UK. This is not only a matter of reaching net zero, vital as that is, but an issue of national security. These are all objectives that everyone across the House, I am sure, shares. We all wish to see a homegrown clean energy system that will protect our people into the future, create good clean jobs, attract private investment and, above all, drive down bills for the British people. I commend this statement to the House.
Several hon. Members rose—
Edward Miliband (Doncaster North) (Lab)
I thank the Secretary of State for his statement, but I have to tell him that after all the hype and all the promises, his energy relaunch fails to live up remotely to the scale of the crisis that families are facing. The Government have already failed to deliver the immediate measures needed to help millions of families with their energy bills this year, and they now have an energy security strategy that has rejected the measures that could have made the most difference in the years ahead. It fails to seize the moment on the two most elementary tests of any decent green energy sprint—that is, going all-in on the cheapest forms of home-grown power, such as onshore wind, which remarkably, was not even mentioned in his statement, and finally delivering on the biggest no-brainer when it comes to an energy strategy: energy efficiency.
Hon Members do not need to take my word for it. We know from all the briefings and interviews that the Secretary of State gave before the relaunch that he has failed to deliver what he wanted. We know that he wanted a hard target to double onshore wind by 2030 and to treble it by 2035, because we have the earlier version of the document in which there were those targets. The Secretary of State was right because the ban on onshore wind that the Government introduced in 2015 has driven up bills for consumers. What did he say 10 days before the relaunch? He said that he wanted to see a major “acceleration” in onshore wind. The Prime Minister was said to be “horrified” at the delays, but when we got the document, we saw that there was no target, no plan and more imports and higher bills as a result of his failure. Perhaps he can tell us what the nasty accident was that befell the earlier version of his strategy.
On solar, let us be clear that the Government destroyed the solar industry with their decisions in 2015, abolishing the feed-in tariff. In this document, we see weak and vague language—it is even weaker, the House will be interested to know, than in the original version of the document, which is pretty weak in itself. Will the Secretary of State explain why there is no firm target for 2030 and a retreat on large-scale solar?
Let us take energy efficiency next, the biggest failure of all. We know that the Secretary of State wanted extra resources for energy efficiency, because he helpfully briefed the media to that effect. He was right, because that would immediately cut bills, imports and fuel poverty, but again, he failed. There is not a penny more for energy efficiency in this document. Even the Secretary of State’s Minister, Lord Callanan—we have to admire his candour—said on the day:
“It would have been good to go further but, regrettably, that was not possible in this case.”—[Official Report, House of Lords, 7 April 2022; Vol. 820, c. 2196.]
Will the Secretary of State tell us why the Government are failing to deliver when the economic, social and climate case is so overwhelming?
The Government’s failures on onshore wind, solar and energy efficiency matter because they are not just the cheapest and cleanest responses to the crisis that we face, but the quickest to deliver. That is why E.ON, the energy company, said of the strategy, that
“there is little in today’s announcement that will deliver…this decade, let alone this year.”
Why? Because the Secretary of State and the Prime Minister caved in to Back Benchers who dislike green energy and a Chancellor who refuses to make the green investments that the country needs. They cannot deliver a green energy sprint because they face both ways on green energy and simply will not make the public investment that we need.
On the other elements of the strategy, we support more ambition on hydrogen and offshore wind. On the latter, however, there are real questions about the investment required in the grid; perhaps the Secretary of State will respond to that point.
On new nuclear, the last Labour Government identified a whole series of sites for new nuclear. The Government have had 12 years in power and they have not completed a single power station.
Of course, the North sea has a role to play in the transition, but will the Secretary of State explain how maximising North sea oil and gas is consistent with all the advice from the International Energy Agency and the Intergovernmental Panel on Climate Change on limiting global warming to 1.5°?
On fracking, which the Secretary of State was also too embarrassed to mention, why commission another review rather than having the courage to say out loud what he believes: that fracking is outdated, will make no difference to prices and is unsafe, unpopular and should have no part in our future energy system?
In conclusion, the truth is that this cobbled-together energy relaunch does nothing on the cost of living and fails to deliver the green sprint that we needed. When it comes to the solutions to energy security, energy bills and the climate crisis, the Secretary of State has shown once again that the Government cannot deliver what the national interest demands.
Kwasi Kwarteng
I am pleased, in this Easter season, when Christians celebrate the resurrection of Jesus, that the right hon. Gentleman is back in his place. I thought that he had disappeared for a bit, but it is very good to see him again spinning out the same lines.
Let me deal with some of his accusations. There is plenty about onshore wind in the strategy. The one thing that we say about onshore wind—unlike the right hon. Gentleman’s position—is that it has to be pursued in the context of local community support. We have always had that position and have not moved away from it. People also say, “What about the energy efficiency measures?” He will remember that we had a whole document at the end of last year devoted to energy efficiency—it was called the heat and buildings strategy. He and the hon. Member for Southampton, Test (Dr Whitehead) kept asking month after month, “When will the heat and buildings strategy come out?” It did come out and it addressed precisely the energy efficiency issues that he wished it to.
On nuclear—this is the last thing I will say about the remarks from the right hon. Member for Doncaster North (Edward Miliband)—his attempt to pretend that the last Labour Government somehow made us more secure on nuclear is laughable. That did not happen. They were notorious for doing nothing to promote the nuclear industry. They were rather like our Scottish National party friends, who are at least honest about their position—they do not want nuclear. I am still not sure what he believes about nuclear, but we are driving forward nuclear and we are delighted to make it the centrepoint of our strategy.
Mark Jenkinson (Workington) (Con)
My right hon. Friend is right to point out that the Labour party destroyed Britain’s nuclear industry by failing to build new nuclear projects while in office. Labour is famous for selling off the family gold, but it also sold off cupboards full of silverware, including the UK Atomic Energy Authority Ltd, a very profitable nuclear company. Will my right hon. Friend update us on our new nuclear company, Great British Nuclear, its remit for new nuclear power stations and what that might mean for Moorside in Cumbria?
Kwasi Kwarteng
The development vehicle that we have announced in the strategy will inaugurate a new era for the nuclear industry. If hon. Members speak to anybody in the industry, they will hear people say that no Government in the past 25 years have been so positive and enthusiastic about nuclear power. There will be a great future and that represents a great endorsement for the skills and the industry that my hon. Friend has so ably promoted in the House.
Alan Brown (Kilmarnock and Loudoun) (SNP)
Clearly, this is not a strategy at all, but a series of high-level targets or rehashed information that the Government have spoken about several times. The reality is that the 2022 energy price cap is 75% higher than the April 2021 price cap, putting 6.5 million UK households into fuel poverty. People are going to die and yet there was no additional support announced to alleviate fuel poverty. How many fuel-poor households does the Secretary of State think is acceptable in modern-day Britain? Will he confirm that less than a third of his £9 billion support package is actually direct money from the Treasury that will not be clawed back?
Charities and energy companies alike are calling for much greater investment in energy efficiency, so why is there no additional funding for that? I am pleased that no new money has been announced for the Secretary of State’s nuclear fantasy. Does he stand by the impact assessment that states that the cost of a new nuclear power station, including capital finance, is as high as £63 billion?
The Government have included a blue hydrogen target, so why is the Acorn carbon capture and storage cluster still a reserve? Why is there no additional funding to match the doubling of the green hydrogen target? The 50 GW offshore wind target is very welcome, but what is the Secretary of State doing to upgrade the offshore transmission network strategy and to take account of the ScotWind leasing round? When, oh when, will they remove the iniquity of the transmission charges that prejudice Scotland, and does he understand the concerns about the new nodal pricing proposal that has been announced?
When will the Secretary of State get to grip with a funding mechanism for pumped storage hydro, so that SSE can get on and complete the Coire Glas project? If the new dash for oil and gas is to provide energy security, will the Secretary of State advise what percentage of North sea oil and gas gets traded and exported and how much goes abroad for refining?
Finally, will the Secretary of State commit to working with the Treasury to publish figures showing how much in additional oil and gas revenues, how much additional VAT from our energy bills and how much additional VAT on the petrol prices increase it has received, so that we can see the Treasury windfall that has happened during this cost of living crisis?
Kwasi Kwarteng
I am very grateful to the hon. Gentleman for his barrage of questions; I will try to answer a few of them. His position on nuclear and mine could not be more different, and I am very glad that he is honest and frank about nuclear. I still do not understand what his answer is on decarbonised baseload, in terms of security of supply, but I am grateful for his honesty. He will know that the transmission charges are a matter for Ofgem, and I would be very happy to speak to him and Ofgem about how we can move forward on that.
Several hon. Members rose—
Dame Andrea Leadsom (South Northamptonshire) (Con)
My right hon. Friend is aware that the Back-Bench committee on business, energy and industrial strategy has done a very swift and urgent inquiry into how businesses and households can reduce their energy bills this winter. Will he and the Minister for Energy, Clean Growth and Climate Change meet me and my vice-chairs to discuss some of the very sensible and practical measures in the inquiry?
Kwasi Kwarteng
Absolutely. I always want to take the opportunity to commend the great work that my right hon. Friend did when she headed the Department, when I was Energy Minister. We are really continuing in that vein. The Minister for Energy, Clean Growth and Climate Change and I will be delighted to meet her and her committee to discuss ideas that will give us security, affordability and sustainability.
Tonia Antoniazzi (Gower) (Lab)
This morning, at the Business, Energy and Industrial Strategy Committee, I was moved to tears listening to the chief executives of the energy companies telling us how horrific it is going to be for the public and vulnerable people to pay their bills. Now it will be fine and for the summer they will have increases, but in October it is going to be terrible. A short-term fix is not good enough—the people in this country deserve better. We deserve a long-term fix to our prices. The cost of living is extortionate, and the Secretary of State needs to help.
Kwasi Kwarteng
As I said in my statement, we are fully aware of the pressure on people’s household bills: it is a really, really extreme issue and we want to deal with it. I also said that my right hon. Friend the Chancellor will look at the matter again in October and see whether measures are appropriate. The hon. Lady will know that the price cap is set in August, so there is still a long period before we can work out what it is. It is a matter for Ofgem, and we are waiting to see what level it is set at in August.
Martin Vickers (Cleethorpes) (Con)
My right hon. Friend is well aware of the expertise and expansion in offshore renewables, hydrogen and carbon capture in northern Lincolnshire and the wider region. Does he agree that we could focus on exporting? We have great skill in financial management, planning and construction. Is he working with the Department for International Trade to expand our exports?
Kwasi Kwarteng
My hon. Friend makes a remarkable and interesting point. He will remember that just over two years ago, I visited Grimsby and saw him and many other local MPs, and we talked about the investment and the opportunities. I am very pleased that two and a half years later we have realised a lot of those ambitions. There is still a long way to go, but it is absolutely right to think of exporting our expertise, our talent and our sheer manufacturing ingenuity around the world. I am delighted to support him in that.
Darren Jones (Bristol North West) (Lab)
It was reported that there were no further announcements on the strategy for home insulation because when the Secretary of State asked the Chancellor to use £300 million of departmental underspend for that project, the Chancellor said no. Is that true or false?
Kwasi Kwarteng
I do not remember that particular incident, but the hon. Gentleman will know that energy efficiency was the centrepiece of the heat and buildings strategy, which he welcomed only at the end of last year.
Sir John Hayes (South Holland and The Deepings) (Con)
I refer hon. Members to my entry in the Register of Members’ Financial Interests. The commitment to solar is vital, but does the Secretary of State recognise that food security is as important as energy security? Every building, every warehouse and every commercial enterprise should be covered in solar before a single acre of valuable arable land is consumed by solar farms.
Kwasi Kwarteng
I would be very interested to hear my right hon. Friend’s views on solar. I think solar is crucial. I am delighted that we have so many former Energy Ministers in the Chamber today; my right hon. Friend was a very distinguished holder of the post, and I am very pleased to engage with him on this important subject.
Caroline Lucas (Brighton, Pavilion) (Green)
The triple test of the strategy is whether it helps to cut dependence on Russian gas, whether it brings down bills and whether it secures a safe climate. It manages to fail on all those fronts. It also has a massive hole where energy saving should be.
It has been reported today that the Government are considering scrapping green levies, which support renewables and address fuel poverty, as the Secretary of State knows, and which therefore help to get fuel bills down. Can he reassure me that that rumour is false and that any changes made will simply be about moving those levies to general taxation—or will this be another policy led by a handful of Tory Back Benchers?
Kwasi Kwarteng
I engage with Front-Bench and Back-Bench colleagues all the time and they have lots of brilliant ideas. I do not recognise the hon. Lady’s characterisation of the strategy; I think it does deliver on security, it does deliver on longer-term affordability and it does deliver on the sustainable net zero targets that many in this House agree with.
Richard Fuller (North East Bedfordshire) (Con)
One of the hurdles that families face when they look at putting in a heat pump or investing in home insulation is that they cannot afford the up-front costs to get the long-term gains. The enterprise investment scheme has been extremely successful in encouraging investment in entrepreneurship, which has a somewhat similar cash-flow profile, so will my right hon. Friend have a word with the Chancellor about whether we can implement a net zero enterprise investment scheme to marshal private capital to help with the social objective of achieving net zero?
Kwasi Kwarteng
We have a number of such schemes in existence and have trialled a number of others. We are always iterating the way in which we attract private capital to meet net zero; that is what we have been doing for the past three years, since net zero was passed into legislation.
Wera Hobhouse (Bath) (LD)
When fracking was halted in June 2019, Ministers said that they would not bring it back without compelling evidence. Now, however, the Government say that all options are back on the table. Where is the compelling new evidence that puts fracking back on the table?
Kwasi Kwarteng
I have been very clear. The hon. Lady is right to mention 2019: in October 2019 I was responsible—as was my right hon. Friend the Member for South Northamptonshire (Dame Andrea Leadsom), who was Secretary of State at the time—for announcing the moratorium. The facts about the wholesale price have changed: it is 10 times higher than at the end of 2019. I think that it is perfectly right to look at the resources that we have in our country to see whether we can use gas here for greater energy security.
Philip Dunne (Ludlow) (Con)
May I build on the excellent question from my right hon. Friend the Member for South Holland and The Deepings (Sir John Hayes), with which I agree? The Secretary of State has included in his medium and long-term strategy the ambition to raise solar power from 14 GW to 70 GW, which would obviously make an enormous contribution to renewable energy generation. Will he follow up the excellent work that he undertook with the Treasury to remove VAT on solar panel installation and also press for VAT to be removed from electricity storage for battery walls and similar products in domestic homes?
Kwasi Kwarteng
My right hon. Friend will appreciate that tax issues specifically are not in my portfolio, but I speak to the Chancellor of the Exchequer all the time about how we can incentivise investment in new, exciting green technologies. That is something that we are very pleased to do.
David Linden (Glasgow East) (SNP)
I think that all of us in this House, when we think of the energy crisis, would want to encourage our constituents to take forward energy efficiency measures, but in one particular type of property—the tenement properties that we have right across Glasgow’s east end—energy efficiency is even more problematic. Will the Secretary of State meet me to look at the specific energy efficiency challenges that Glaswegians face?
Kwasi Kwarteng
I would be very happy to meet the hon. Gentleman, as I meet many of his Scottish colleagues, to discuss really critical energy issues.
Miriam Cates (Penistone and Stocksbridge) (Con)
I very much welcome the commitment to rebuilding Britain’s nuclear industry. It is great news for consumers and it should be great news for the UK steel industry, particularly Speciality Steel in Stocksbridge in my constituency, which specialises in producing the kind of high-value steel required for such projects. I know that my right hon. Friend has welcomed Sizewell C’s decision to sign the UK steel charter. Can he confirm that that means it must commit to purchasing steel made and poured in the UK?
Kwasi Kwarteng
I cannot make any commitments on behalf of the company, because it is at arm’s length and has its own corporate structure, as my hon. Friend will know. However, as Secretary of State I have always championed the steel industry, which is vital for national security and for levelling up. It is a hugely important industry and I am very happy to work with her to promote it.
Seema Malhotra (Feltham and Heston) (Lab/Co-op)
Onshore wind is the cheapest power available to us, and the cleanest. Does the Secretary of State accept that bills for families and business will be much higher as a result of his failure to back it?
Kwasi Kwarteng
We have done more than many in driving onshore wind. The hon. Lady will know that we suspended the pot 1 auction and have brought it back, that we have more onshore wind than pretty much any other country in northern Europe, and that we continue aggressively and passionately to promote onshore wind.
Mark Pawsey (Rugby) (Con)
The retail energy market saw the big six suppliers increase to 90. Several were granted licences despite being undercapitalised, which caused them to fail and placed a burden on all consumers. We know that competition in the market is vital; what steps will the Secretary of State will be taking to make it effective?
Kwasi Kwarteng
In partnership with Ofgem, we have discussed trying to secure a much more resilient energy retail market, with financial covenants involving much more financial discipline and financial disclosure, as well as other ways in which we can ensure that what happened last winter does not happen again.
Dan Carden (Liverpool, Walton) (Lab)
Some 12,000 households in my constituency rely on prepayment meters. The chief executive of ScottishPower rightly raised that issue with the Business, Energy and Industrial Strategy Committee today, saying that it was perverse that those people—often the most vulnerable—can end up paying higher rates than people with direct debit arrangements. Will the Secretary of State take this up with the energy companies, and, if necessary, compel them to ensure that the most vulnerable members of society are not paying the highest prices?
Kwasi Kwarteng
I think it was Keith Anderson who spoke to the Committee this morning. I speak to Keith and others in the sector all the time, as does the Minister for Energy, Clean Growth and Climate Change, my right hon. Friend the Member for Chelsea and Fulham (Greg Hands). We will definitely look into this issue, because it seems disproportionate and unfair that people with prepayment meters should be paying so much more than those with direct debits, and we shall be happy to take it up with the leaders in the sector.
Mr John Whittingdale (Maldon) (Con)
I welcome my right hon. Friend’s commitment to a new generation of nuclear power stations. Can he confirm that the eight designated sites remain the Government’s preferred locations for those, including Bradwell in my constituency, and has he yet reached a view on whether a Chinese-designed reactor could be included?
Kwasi Kwarteng
As my right hon. Friend will know, Bradwell passed the generic design assessment. That was an arm’s-length process in which the Government did not become involved. There is clearly a discussion to be had about how we can take Bradwell forward, but, as my right hon. Friend knows, there is an absolute commitment to up to eight sites. I am not saying eight, because obviously we have small modular reactors as well, but eight sites would mean roughly 24 GW.
Kerry McCarthy (Bristol East) (Lab)
My hon. Friend the shadow Secretary of State visited Bristol recently to look at the ambitious projects that are going on there, including new water source heat pumps and the City Leap partnership. Is the Secretary of State aware of what is going on in Bristol, and what can he do to help cities to decarbonise?
Kwasi Kwarteng
I know that Bristol has a strong tradition of green, carbon-reducing policies. I should be happy to visit the city and see the great work that is being done there. It is a part of the world that I know well from Airbus and other great industrial concerns.
John Penrose (Weston-super-Mare) (Con)
I congratulate the Secretary of State on this excellent document. May I press him on the review of energy market arrangements and the long-term fundamental reform of the underlying market? Will he reassure me, and others on this side of the House—at the very least—that that will be done in a spirit that will maximise competition and consumer choice to ensure that we make the customer the king and the queen, and that it will include price cap reform?
Kwasi Kwarteng
All these issues are being looked at. The six-month periods for the price cap are being reviewed, and, as I have said, financial resilience for new entrants will be considered. A subject that has not been mentioned so far is the future system operator and the electricity system operator. That is a remarkable innovation, and I am proud that it is included in the document. I should be happy to talk to my hon. Friend about these matters.
Sammy Wilson (East Antrim) (DUP)
The Secretary of State has said that this is a long-term strategy, and obviously we need that, but there is a short-term problem, namely that people cannot afford to pay their bills at present. That is partly due to the green levies, which amount to about £400 a year in additional costs to individuals. What plans has the Secretary of State to deal with that? Given his plans for a number of new offshore wind turbines, may I ask how many he believes are needed, and at what cost? What is the cost of connection to the grid, and how will that affect the capital costs on people’s energy bills?
Kwasi Kwarteng
As the right hon. Gentleman will know, in the time during which I—indeed, I suspect, both of us—have been in the House, renewables have really taken off. They are the one bit of the energy story here in the UK that has been genuinely transformative and a world leader, and I am very proud of that. As for the immediate support for hard-pressed consumers facing a global price hike, my right hon. Friend the Chancellor committed £9 million to help people to pay their bills.
Jane Hunt (Loughborough) (Con)
What steps are being taken to ensure that the future energy strategy of the UK is secured by the manufacture of hydrogen fuel cells in the UK—in, say, Loughborough?
Kwasi Kwarteng
I had a feeling that my hon. Friend was going to mention Loughborough. She will know that we are absolutely committed to hydrogen. It has many uses: it can be used, potentially, in the gas grid, in transport—to which she alluded—and in industrial processes. We are very excited about the opportunities, outlined in the strategy, for more capacity so that we can drive innovation in those areas.
Cat Smith (Lancaster and Fleetwood) (Lab)
In 2019—it was during the general election campaign, but I am sure that was just a coincidence—the Government said that fracking in Lancashire would be off the table, that there would be a moratorium and that the wells would be filled with concrete. May I ask the Secretary of State what has changed between 2019 and today that has put fracking back on the table? What on earth did he get from COP26?
Kwasi Kwarteng
There has been an issue with the wholesale gas price, which has gone up about 10 times during that period. It seems entirely reasonable, if we have gas underneath our feet, to consider the possibility of using it.
David Morris (Morecambe and Lunesdale) (Con)
Would my right hon. Friend like to come to Heysham and look at the two reactors that are working in my constituency? The whole community is behind the nuclear power industry, and it is our future, so I extend that invitation to my right hon. Friend.
Kwasi Kwarteng
I should be very happy to go with my hon. Friend to see the nuclear reactors. The future is decarbonised baseload power. That is what we need, and it is something with which my hon. Friend and I are 100% aligned.
Stephen Flynn (Aberdeen South) (SNP)
The Secretary of State has said that his energy strategy would
“drive down bills for British people”.
By how much?
Kwasi Kwarteng
That obviously refers, relatively, to whatever the wholesale price of gas will be. I am not a gas trader, and nor is the hon. Gentleman. He has no idea what the wholesale gas price will be either. The strategy will have a tendency to lower prices.
Andrew Percy (Brigg and Goole) (Con)
If recent events have shown us one thing, it is the importance of having our own strategic steel industry—something that I know the Secretary of State understands. The announcement of the expansion of the energy-intensive industries compensation scheme is welcomed by the industry, but can the Secretary of State tell us when we will know the details of that?
Kwasi Kwarteng
We are in constant conversation about this. It was a hard-earned win for the Government, and we are very pleased to be backing steel. My hon. Friend knows of my commitment to the industry. We have won some battles, and I look forward to engaging with him on this in the future.
Sir Mark Hendrick (Preston) (Lab/Co-op)
Mr Deputy Speaker, you will know, as a Lancashire MP, that the people of Lancashire are fed up to the back teeth with fracking. As the Secretary of State knows, the moratorium came in 2019 because Lancashire was experiencing tremors measuring 8 on the Richter scale. It was a safety measure, because we were worried about safety. It was nothing to do with the wholesale gas price, so please, Secretary of State, do not come out with that now.
Kwasi Kwarteng
There was drilling, and I remember it well. When I was the Energy Minister, I was receiving daily updates on the Richter scale, and yes, there were moments—there were times—when the level exceeded the limit that we had imposed. I think it entirely legitimate now, given where gas prices are, to look again at some of the evidence.
Alun Cairns (Vale of Glamorgan) (Con)
I congratulate my right hon. Friend on the publication of the report, which provides certainty for so many sectors, particularly oil and gas, and nuclear. However, much attention has rightly been paid to the support for energy-intensive industries, and there have understandably been many questions involving the steel industry. Will my right hon. Friend confirm that the support extends to the chemical industry, given that Dow Corning has a site in my constituency, as well as others?
Kwasi Kwarteng
My right hon. Friend knows very well that the chemical industry is central not only to people in his constituency, but to those throughout the north-east. We engage with energy-intensive sectors such as the glass, steel and chemical sectors, and others.
Kwasi Kwarteng
Ceramics, yes. All those industries are covered by the energy-intensive scheme that we want to promote.
Rachael Maskell (York Central) (Lab/Co-op)
One of the greatest constraints on decarbonisation is the skill supply. Will the Secretary of State publish a workforce plan for the energy sector, so we can ensure that we are making the necessary investment in the skills that we need, both now and in the future?
Kwasi Kwarteng
The hon. Lady is absolutely right. That is why, when I was the Energy Minister, I—along with my right hon. Friend the Member for South Staffordshire (Sir Gavin Williamson), the then Education Secretary—set up the green jobs taskforce, working with unions across the sector. We came up with some very good proposals. We are driving that forward, because we recognise the skills gap and want to close it.
Virginia Crosbie (Ynys Môn) (Con)
I am delighted that Wylfa is specifically included in the British energy security strategy, and I look forward to welcoming the Energy Minister to Ynys Môn in a few weeks. The new Wylfa nuclear plant will bring local jobs for local people. Will the Minister consider discounting electricity bills for locals, and locating the headquarters of the new Great British Nuclear vehicle in north Wales, in recognition of the nuclear expertise and heritage in the area?
Kwasi Kwarteng
I think I would be getting a bit ahead of myself if I were to decide here and now at the Dispatch Box where that body will be sited, but I pay tribute to my hon. Friend’s tireless and passionate advocacy for the nuclear industry. She, among a number of others in this Chamber, has been a brilliant champion, and I look forward to working with her to drive nuclear power in Wylfa and across the country.
Hilary Benn (Leeds Central) (Lab)
People used to have their water supply cut off if they could not pay their bill, until it was made illegal to do so. Given that more and more of our constituents will be unable to pay their gas and electricity bills as the year progresses, does the Secretary of State share my concern that more and more prepayment metres will be installed in response, and that our constituents will in effect end up disconnecting themselves because they do not have enough money to put in the meter? If so, what is he going to do about it?
Kwasi Kwarteng
As I said in an earlier answer, I speak to the industry all the time. This has been raised, and we want to prevent people from having to take up prepayment metres if they can avoid it. That is something that we have done through a number of interventions to try to reduce the impact of very high prices globally. I also refer the right hon. Gentleman to the fact that my right hon. Friend the Chancellor of the Exchequer has announced a £9 billion package to help people who face high bills.
Several hon. Members rose—
Jack Brereton
Energy price fluctuations are a particular issue for the ceramics sector. Over Easter, I was delighted to visit 1882 Ltd, a ceramics producer in my constituency that has raised these concerns with me. What is my right hon. Friend doing to support the ceramics sector, and all energy-intensive sectors, to reduce the cost of energy and help to increase energy sustainability?
Kwasi Kwarteng
My hon. Friend will have noticed that there is a commitment in the strategy to energy-intensive users. From his first day here, he has been a tireless champion of the ceramics industry. I was pleased to see him in his constituency when I went there, and to the other Stoke constituencies. I look forward to working with him to ensure that we protect our precious ceramics industry in the UK.
Mr Deputy Speaker (Mr Nigel Evans)
I thank the Secretary of State for his statement. I am sorry that some people did not get in—a note will be taken of their names—but we have real time pressure today.
Oral Answers to Questions
Kwasi Kwarteng Excerpts(2 years, 7 months ago)
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Mr Virendra Sharma (Ealing, Southall) (Lab)
The Secretary of State for Business, Energy and Industrial Strategy (Kwasi Kwarteng)
As the hon. Gentleman knows, the energy price cap continues to protect consumers in a world where gas prices have more than quintupled in a year, and I strongly expect that it will continue to do so.
Mr Sharma
I thank the Secretary of State for that answer. Given the pressure that families are facing in this cost of living crisis, does he agree that the best way to help families to pay their bills is through a windfall tax on oil and gas producers in the North sea to give the poorest up to £600 off their bills?
Kwasi Kwarteng
As the hon. Gentleman will know, we believe that a windfall tax in this situation would be a tax on jobs, destroy investment and add to the uncertainty in oil markets. It would send completely the wrong message to investors, as well as to people who are invested in markets. Every one of us, anyone with a pension, would be adversely affected by such a tax.
Alun Cairns (Vale of Glamorgan) (Con)
My right hon. Friend is keen to ensure that householders and landlords improve the energy performance of properties. Will he consider the effectiveness of the current energy performance certificate system and whether that genuinely reflects the energy performance of a property? In addition, will he recognise the additional costs incurred in calling for improvements in off-grid properties, where people do not have the opportunity to invest in the same technologies as those in on-grid properties?
Kwasi Kwarteng
I am grateful to my right hon. Friend for that question. As he knows, the current EPC system is not perfect, but it does capture the significant improvement that has happened over the past few years. I am happy to consider people off grid and the challenges that they face from oil prices, and I would be happy to speak to him about that.
Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)
In recent years, the UK Government have printed and borrowed hundreds of billions of pounds, which have been gathered—I emphasise the word “gathered”—not earned by billionaires and the already wealthy. As a result, we have a cost of living crisis that makes energy price rises an acute crisis. Kerosene central heating oil has seen some of the biggest price differences, which especially hits rural and island areas where there is no mains gas. Do the Government have any plan to give people in such places a hand, which would cost a damn sight less than the bailout money that the billionaires have raked in from the Treasury?
Kwasi Kwarteng
As the hon. Gentleman knows, my right hon. Friend the Chancellor of the Exchequer announced an extensive package of support only a few weeks ago worth £9.1 billion—that included a £150 council tax rebate for bands A to D and £144 million in discretionary funding for local authorities—which affects everybody in this country. I am also very happy to engage with him on the specific issue of oil prices.
Sara Britcliffe (Hyndburn) (Con)
I have been contacted by many pensioners across Hyndburn and Haslingden who are concerned about the cost of their energy bills. Will the Secretary of State set out what measures are in place to support my residents, and will he continue to work with other Departments to keep those measures under review?
Kwasi Kwarteng
As I said, the Chancellor announced a £9.1 billion package of support only a few weeks ago. That included the £150 council tax rebate for bands A to D and £144 million in discretionary funding added for local authorities—spending to help the most vulnerable. We announced a £500 million extension of the household support fund last week, but I would be happy to engage with my hon. Friend on what more we can do in the next few months to assuage the burden.
Kwasi Kwarteng
I am very happy to answer the hon. Gentleman’s questions. He will know that the next price cap period will be set in August. Even he, with his gifts of prophecy, does not know what the price cap level will be in August. As the Chancellor of the Exchequer has said, we are continually reviewing actual spot markets and what is happening in the market.
The hon. Gentleman will know that nothing could be more damaging to the sector, to people employed in the sector and to the hundreds of thousands of jobs and families dependent on the sector than an arbitrary windfall tax, which would also impoverish many of the people exposed to those companies through their pensions. It is a regressive, retro measure that completely does not understand what business is all about.
Stephen Flynn (Aberdeen South) (SNP)
Aside from saying that he drives an ageing VW Golf, the Secretary of State is using every excuse possible to try to defend the indefensible. In just a matter of days, the energy price cap will increase by some 700 quid; in just a matter of months, it is anticipated that it will increase by a further £1,000. The Government’s response is 150 quid off council tax and £200 that they say is not a loan, but that is indeed a loan. Energy bills are anticipated to increase 14 times faster than wage increases. How on earth are people supposed to get by?
Kwasi Kwarteng
As I have said, we have a £9.1 billion support package, which was announced only four weeks ago. On top of that, we allocated £500 million of additional relief only last week to help people through this difficult time. One way in which I am afraid bills would go up is if we adopted the insane SNP policy of essentially shutting down North sea oil and having no intention at all to develop nuclear. That would be an utterly irresponsible and highly expensive way of dealing with the current problem.
Stephen Flynn
The Secretary of State does himself no favours by attempting to invent policies that are simply not reflective of the SNP’s position at this moment in time—but this discussion is about energy bills. If someone lives in the north of Scotland, their energy bill standing charge will increase by some 83%; if they live in the south of Scotland, it will increase by 100%; but if they live here in Westminster, in London, it will increase by just 38%. Scotland is energy-rich—oil and gas, wave, wind, tidal, hydro pumped storage. How on earth can the Secretary of State justify the inequity in such pricing?
Kwasi Kwarteng
The hon. Gentleman is indeed correct: Scotland is extremely wealthy in its range of energy sources. That is why we have sought to encourage it through things like the £27 million Aberdeen energy transition zone and the North sea transition deal. We have constantly supported the Scottish energy industry. The hon. Gentleman refers to a report by Ofgem. I speak to it regularly, and we always try to see what we can do to justify and to equalise bills across the UK.
Andrew Bridgen (North West Leicestershire) (Con)
I welcome the fact that the Prime Minister has announced that he will publish an energy supply strategy to deal with the UK’s energy requirements for the short, medium and long term. Can the Secretary of the State update the House on when we can expect the strategy to be published?
Munira Wilson (Twickenham) (LD)
The Secretary of State for Business, Energy and Industrial Strategy (Kwasi Kwarteng)
As the hon. Lady will know, few countries have done as well as we have in respect of offshore wind. We are backing a range of other technologies through our strategy, and also through the 10-point plan.
Munira Wilson
Russia’s invasion of Ukraine has made clear how crucial it is for the UK to press on with the push to roll out renewables and strengthen its energy security. Almost three weeks ago, the Prime Minister said that an energy independence plan would be unveiled in the next few days and there was speculation about a renewed push for onshore wind, but that plan has been delayed again, apparently because the Chancellor is blocking it. Will the Secretary of State explain why the Chancellor is now deciding energy policy?
Kwasi Kwarteng
The hon. Lady will understand that, when such publications are issued, a range of cross-Government “write-rounds” is required. We are constantly talking to colleagues across Government, not just in the Treasury, so that we can land the energy strategy as quickly as possible.
Derek Thomas (St Ives) (Con)
Getting on top of energy issues, particularly those relating to renewable energy, is the most difficult challenge in rural areas such as mine. How will the Secretary of State’s strategy—to be launched soon—enable the renewable energy sector to grow from the grassroots up, so that people in fuel-poor homes, who may not have the money to buy the necessary equipment at the outset, have an opportunity to install solar panels and battery storage which will help them to deal with the rising cost of energy?
Kwasi Kwarteng
We have just cut VAT on many of those products. I have already visited my hon. Friend in his constituency, and I am happy to have further discussions about what more we can do to drive the take-up of these important technologies.
Afzal Khan (Manchester, Gorton) (Lab)
Munira Wilson (Twickenham) (LD)
The Secretary of State for Business, Energy and Industrial Strategy (Kwasi Kwarteng)
Since we last met, my Department has been focused on three central strands. First, we are pleased to announce the passing of the Economic Crime (Transparency and Enforcement) Act 2022. Secondly, we have worked with Ukrainian colleagues to make sure that generators are arriving in Ukraine so that their public services can be powered and delivered. Thirdly, I am pleased to announce that we are phasing out imports of Russian oil over a nine-month period to make sure, with our allies, that the Kremlin does not benefit from its sale of hydrocarbons.
Munira Wilson
Small businesses across my constituency are struggling, like households, with spiralling energy costs. The British Chambers of Commerce reports that three out of four firms it surveyed will be passing on these costs to customers through higher prices, thus further fuelling the cost of living crisis for many people in Twickenham and across the country. What will the Secretary of State do to alleviate the pressure on small and medium-sized enterprises that are facing rising energy bills?
Kwasi Kwarteng
The hon. Lady will know that not only did my right hon. Friend the Chancellor of the Exchequer announce a £9 billion package particularly for the most vulnerable, but for all our citizens, a few weeks ago, but last week we announced a support package, again, for vulnerable customers. In relation to small business, she will know that over the past two years this Government have spent £405 billion in supporting businesses of all sizes through a very difficult pandemic and, again, through the heightened crisis that has been brought on by the Russian invasion of Ukraine.
Several hon. Members rose—
Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)
Last October the Secretary of State promised support for energy-intensive industries such as steel, glass and ceramics. His exact words were that it was his
“priority…to ensure costs are managed and supplies of energy are maintained.”
Yet six months later there is still no action, and there was nothing in last week’s spring statement, so when will this promised support be presented?
Kwasi Kwarteng
The hon. Gentleman will know that support is ongoing. We have the industrial energy transformation fund, which has allocated more than £50 million. We have also supported EIIs—energy-intensive industries—to the tune of £2 billion since 2013, so support is always there and has been ongoing.
Jonathan Reynolds
A chemicals manufacturer in Grimsby has been in touch with me this week. Its energy bill last year was £10 million; it has now gone up to £50 million a year. And it gets worse, because as we have heard in questions today, in two days’ time, compensation for the UK emissions trading scheme and the carbon price support mechanism comes to an end, so support is actually decreasing. Will the Secretary of State at least do the bare minimum and reassure firms today that that support fund will be extended?
Kwasi Kwarteng
I will reassure businesses that I engage with that we are constantly engaging in conversations with our Treasury colleagues and across Government to see how best we can use the existing schemes to support industries—the steel industry, ceramics industry and chemicals industry—in this difficult time.
Jack Brereton (Stoke-on-Trent South) (Con)
Jason McCartney (Colne Valley) (Con)
Kwasi Kwarteng
My hon. Friend knows that energy efficiency is at the centre of any net zero strategy, and I would be happy to work with him to ensure that we can drive progress in this area.
Jonathan Edwards (Carmarthen East and Dinefwr) (Ind)
Kwasi Kwarteng
The hon. Gentleman will appreciate that the Department continually looks at a range of schemes to see how best we can lighten the burden of rising energy prices.
Bim Afolami (Hitchin and Harpenden) (Con)
Beth Winter (Cynon Valley) (Lab)
Kwasi Kwarteng
As the hon. Lady is aware, we have made a number of interventions that have gone some way to lightening the burden. There is the £9 billion that my right hon. Friend the Chancellor announced a few weeks ago, and £150 off council tax for those in bands A to D. I have reassured the House that we are looking at a range of measures to see how best we can meet the challenge of the next few months. Nobody knows where the price cap will be in October.
Theresa Villiers (Chipping Barnet) (Con)
Kwasi Kwarteng
My right hon. Friend is absolutely right to identify this as an issue. That is why we are working, not only in Government but across G7 partners, to ensure diverse sources of energy supply, which can keep prices down.
Liz Twist (Blaydon) (Lab)
In Chopwell in my constituency, over 200 homes were due to benefit from cladding under the green homes grant local authority delivery scheme, but due to escalating costs, that work has been cancelled. Will the Minister meet me to discuss how we can ensure that the work is carried out?
Kwasi Kwarteng
As the hon. Lady knows, local authority delivery of the green homes grant was very successful, but I would be very happy to meet her to discuss the case she mentions.
Dame Caroline Dinenage (Gosport) (Con)
Last year, my right hon. Friend the Secretary of State made the welcome announcement that employment leave would be extended to unpaid carers. Will he please update the House on when that is likely to be delivered?
Lee Anderson (Ashfield) (Con)
Geothermal energy from old coalmines can heat our homes for years to come. Will the Secretary of State please assure me that he is doing all he can to support the Coal Authority in developing this fantastic new energy opportunity?
Kwasi Kwarteng
We are, absolutely, excited about the prospects for geothermal. I would be very happy to meet the hon. Gentleman to discuss this. I was happy, also, to talk to my Cornish colleagues about this exciting new technology; it is something on which we are focused.
Joanna Cherry (Edinburgh South West) (SNP)
The pupils of Boroughmuir High School’s climate change society in my constituency have impressed on me that their generation is relying on us to take action right now, because by the time they are old enough to do so it will be too late for systemic change. Can the Secretary of State reassure school students in my constituency that his plans for transition have the requisite urgency?
Kwasi Kwarteng
They do. I was very pleased to take up my office as Minister of State for Energy a month after the net zero legislation was passed, and for the last three years we have been resolutely focused on living up to the letter of the law, fulfilling our bargain and making sure we reach net zero in 2050.
Martin Vickers (Cleethorpes) (Con)
The Secretary of State is well aware of the opportunities for further developing the renewables sector in my Cleethorpes constituency and the wider Humber region. However, as he is also aware, there have been one or two setbacks of late. Will he meet me and neighbouring colleagues to discuss how we can move forward and maximise such opportunities?
Kwasi Kwarteng
I would be very happy to meet my hon. Friend. I am very excited about what is going on in his constituency and the wider Humber area, and I look forward to talking to him about decarbonisation.
Kate Green (Stretford and Urmston) (Lab)
Unscrupulous company directors make use of the compulsory strike-off process to avoid paying debts to both private and public sector creditors. In considering reform of Companies House, what can Ministers do to tackle this practice?
Kwasi Kwarteng
I would be happy to talk to my hon. Friend about those issues. I would like to point out that we had a significant victory in extending the safeguards last summer, and there has been some very good news on trade talks about the quotas that steel companies in this country are allowed by the US.
Marsha De Cordova (Battersea) (Lab)
The energy crisis is leaving some people in my constituency struggling to pay their bills, and the situation is even worse for those whose heating is paid for centrally and is not protected by the energy price cap. In some cases, many have seen their bills go up by more than 500%, so when will the Secretary of State bring forward legislation that will give Ofgem the powers to regulate these prices and end these excessive energy price increases?
Kwasi Kwarteng
The hon. Member will know that we are speaking with Ofgem about this very issue. Yes, the price cap does protect the vast majority of people, but there is an issue with people off grid, which I would be very happy to talk to her about.
Mr Richard Holden (North West Durham) (Con)
There is great concern in North West Durham among constituents affected by Storm Arwen about the prospect of being left without a landline as well as without power during a storm, due to the switch to the voice over internet protocol. Given that, does the Secretary of State, like me, welcome the announcement from BT today that this forced switch will now be paused and be on request only, as BT looks to ensure that proper back-up systems are in place during power cuts before returning to the broader roll-out?
Kwasi Kwarteng
I welcome the announcement. I was also very pleased to spend time with my hon. Friend in the unfortunate circumstances of Storm Arwen, and I look forward to the publication of that report soon.
Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)
Returning to off grid, Ofgem’s mission statement says that it aims
“to make a positive difference for all energy consumers, both now and in the future”,
yet off-gas grid consumers using electricity, oil and liquid gas face price rises in April four times that of Ofgem’s average consumer. Will the Secretary of State support my calls to regulate this for off-gas grid customers through Ofgem, and indeed support my Energy Pricing (Off Gas Grid Households) Bill?
Kwasi Kwarteng
Where I agree with the hon. Gentleman is that we need to have a more robust offer for people who are off grid. This issue has been raised continually in these exceptional times, and I look forward to speaking to Ofgem—and perhaps him—about these issues.
Several hon. Members rose—
Russian Oil Import Ban
Kwasi Kwarteng Excerpts(2 years, 8 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Secretary of State for Business, Energy and Industrial Strategy (Kwasi Kwarteng)
With permission, I would like to make a statement on the UK’s phase-out of imports of Russian oil in response to Vladimir Putin’s brutal and illegal invasion of Ukraine.
First, I want to say what a privilege it was for all of us to hear President Zelensky’s historic address to the House yesterday. I am sure that all Members will join me in thanking him once again for his inspiring words and great leadership. It is with those words in mind that I come here today.
The UK joins key allies, including the United States, in halting the import of Russian oil, which makes up 44% of Russian exports and 17% of the Russian Government’s revenue through taxation. This action follows the most punishing set of sanctions that the British state has ever imposed on a G20 nation. Our trade, financial and personal sanctions are having an effect on the Russian economy. As I speak, the rouble has now fallen by nearly 42%, and the Moscow Exchange’s stock trading has been shut since 25 February. The British Government have sent a clear message to Putin’s regime and to those who support him in his war against Ukraine.
It is important to remember that Russia produces only a fraction of the fuel products currently imported in the UK. In a competitive global market for oil and petroleum products, demand can be met by alternative sources of supply. As a result of international revulsion at Putin’s invasion, Russian oil is already being excluded from much of the market, and currently it is trading at quite a sharp discount from other crude oil sources.
We want to go further. Yesterday I set out that the UK will be phasing out imports of Russian oil during the course of the year. This transition will give the market, businesses and supply chains more than enough time to substitute Russian imports. Businesses should use this year to ensure as smooth a transition as possible, so that consumers will not be affected. The Government will work with companies through a new taskforce on oil to support them to make use of this period in finding alternative suppliers. Yesterday I spoke with businesses, unions and representatives from the sector, and of course I and officials in the Department for Business, Energy and Industrial Strategy will continue to engage with and support British business.
Although Russian imports account for 8% of total UK oil demand, we should remember that the UK is a significant producer of crude oil and petroleum products. We participate in a global market for those products and we have resources in place in the unlikely event of supply disruption. Over the course of the year, the taskforce that we have set up will work closely with international partners, including the USA, the Netherlands and the Gulf to ensure alternative supplies of fuel products. Last week I addressed the International Energy Agency and tomorrow we will have an extraordinary meeting of the G7 Energy Ministers to discuss further steps.
Although businesses should do everything they can to secure oil from alternative sources, it is important to emphasise that they will still be able to import Russian oil during this transition period. These measures target oil-related products imports only. The UK is not dependent on Russian natural gas, which makes up less than 4% of our supply. However, I will be exploring options to end that altogether.
I want to make it clear to the House that we must end our dependency on all Russian hydrocarbons. In the meantime, we need more investment in North sea oil and gas production as we make the move to cheaper, cleaner power. Turning off domestic production at this moment, as some are calling for, would be completely the wrong thing to do. We are not going to do that. The Prime Minister has also confirmed that the Government will set out an energy strategy to explain the UK’s long-term plans for greater energy security, including renewable and nuclear power, building on our 10-point plan.
This measure to phase out Russian oil, and those being taken by our allies, will move the west away from dependency on Russian oil. It will take us on a road to building a stronger and more resilient British energy system. It will increase the growing pressure on Russia’s economy and, ultimately, hamper Russia’s ability to impose further misery on the Ukrainian people.
Edward Miliband (Doncaster North) (Lab)
I thank the Secretary of State for his statement. We are united against Russian aggression. We stand together in solidarity with the Ukrainian people. Let me echo his admiration for President Zelensky, whose bravery and eloquence yesterday were extraordinary and inspiring.
On the Secretary of State’s immediate decisions, we know that Putin’s war machine is being funded by oil and gas, which is why it is right that every country does what it can to isolate the regime, and that every company does so too. We fully support the Government’s decision to ban oil imports, which is a welcome step. It is also right to work with companies and unions on how we implement that policy. What assessment has he made of the impact of the ban on petrol and diesel prices?
We also support the Secretary of State’s decision to seek ways of ridding ourselves of Russian gas imports. On the wider energy security context, it is essential that we learn the right lessons from this crisis. Although 50% of our gas comes from the North sea and only 4% from Russia, we pay the same price for our own gas as for that which we import because we operate in an integrated gas market, so we are absolutely exposed to these rocketing wholesale gas prices, which are currently up 100% on the month and 800% on the year.
Therefore, the right lesson to learn is surely that we have to go much further and faster in developing home-grown zero-carbon power, including renewables and nuclear, which can free us from the whims of autocrats and dictators who can use fossil fuels as a geopolitical weapon. Does the Secretary of State agree this is the right lesson and that policy will need to change? In particular, does he agree that we should finally end the effective moratorium on onshore wind in the planning regulations, which since 2015 has denied us power each and every year equivalent to our gas imports from Russia? Does he agree that we should ramp up our offshore wind so we go well beyond 40 GW, and that it is time to finally get serious about energy efficiency—the best way of cutting energy demand and an area in which the Government have not succeeded in past years?
There needs to be a phased transition in the North sea, but will the Secretary of State now clarify the Government’s position on fracking? Will he confirm that the moratorium that was put in place will remain in place—no ifs, no buts—as fracking would not make any difference to the prices consumers pay, is dangerous and would take decades to come on stream? [Hon. Members: “No!”] They do not agree with me. I have a position against fracking; they support fracking. We would love to know what the Secretary of State and the Government think and I am sure they would, too.
Let me ask the Secretary of State about the cost of living crisis facing families, arising from what is happening to oil and gas prices. We have consistently warned the Government that their measures were wholly inadequate to address the rise in energy bills. Will he undertake to tell the Chancellor that, in his spring statement, he must come back with much more help for both families and businesses?
We are united in our support for the people of Ukraine. We will support the Government in everything they do that can cut off support for the evil and barbaric Putin regime, and we urge the Government to learn the right lessons for our country from this crisis, so we can achieve both energy security and energy sovereignty.
Kwasi Kwarteng
In his customary way, the right hon. Gentleman raised a large number of questions, the majority of which I hope to deal with. He spoke against Putin’s barbaric invasion and completely illegal actions. I am very pleased that he reflects our sentiments and that we have a mutual interest in making sure that Putin fails.
As far as the cost of living is concerned, the Chancellor of the Exchequer has made an extensive intervention, and it is wrong for Opposition politicians to say that the price cap that will be set in August will necessarily be higher than it is today. We simply do not know. As the right hon. Gentleman understands, the price cap will be set retrospectively, looking at the average price. It may well be higher, but there are circumstances in which it will not increase as much as he imagines. As is always the case, we take an ongoing approach to looking at the price cap. We speak to Ofgem all the time and Ofgem is engaged in work on how the price cap is calculated.
I am pleased to hear that the right hon. Gentleman is keen to support investment in the North sea, making sure that gas is a key transition fuel, something that many people on the Opposition Benches may disagree with. He is right to stress an increased focus on renewables and nuclear power—we are absolutely at one in our agreement on that.
Robert Jenrick (Newark) (Con)
I welcome my right hon. Friend’s statement. We have to brace ourselves for the greatest impact on living standards that any of us has known in our lifetime, which necessitates a more pragmatic approach to energy policy. It means accelerating investment in renewables, potentially lifting the effective moratorium on onshore wind, looking again at fracking and taking all possible advantage of our domestic supplies in the North sea as part of a transition. Does my right hon. Friend agree with that, and also that it would be perverse and dangerous to take away oil from Russia and replace it with oil and gas from Iran and Venezuela, two regimes that are just as malign and dangerous as Putin’s in Russia?
Kwasi Kwarteng
My right hon. Friend is absolutely right: we have to look at all the possible technologies that can give us as much resilience as possible. We have to shrug off a lot of outdated dogma in this area, and I am pleased that the right hon. Member for Doncaster North (Edward Miliband) is full square behind nuclear, because as I remember, when he was Secretary of State, he was not the most supportive of the nuclear industry. My right hon. Friend is right to identify potentially hostile powers and we are keen to diversify away from providing resources to those powers.
Stephen Flynn (Aberdeen South) (SNP)
I think it is safe to say that we in this Chamber all broadly support the statement that the Secretary of State has made and, while there will be arguments about the potential speed of the transition, we cannot escape the sheer scale of what has been announced today. This is a seismic shift in UK, US and indeed European energy policy. However, we also cannot be blind to the fact that there will be consequences and one of the potential consequences is retaliatory action from Putin himself. What consideration has the Secretary of State given to that matter?
On that point, if there were to be gas and oil shortages on the European continent, as a producer of oil and gas, would that not emphasise the importance of Scotland’s North sea oil and gas reserves? In terms of resources and Scotland’s resources in particular, the renewable resources that Scotland has are enormous: 25% of Europe’s entire offshore wind capacity sits off the coast of Scotland. I was a bit disappointed that the Secretary of State did not say more about renewables, so I would like to hear a little more from him about the additional support he intends to give to onshore and offshore wind, tidal, hydro pump storage, hydrogen and so on and so forth, and what the timescales for that progress will be.
Of course, the second big consequence will be for consumers. We cannot escape that fact: there will be inevitable price rises, irrespective of what the Secretary of State intimated about the price cap. Will he commit to using every single penny of additional resource that comes from the North sea oil and gas sector to insulate households from the looming cost of living crisis?
Kwasi Kwarteng
I was very determined not to inject any kind of partisan tone into these proceedings, but it struck me as particularly bizarre to hear the hon. Gentleman defend our North sea transition deal and the considerable oil and gas assets in Scotland. I would be very interested to hear what his Green counterparts in the coalition north of the border thought of his remarks.
In relation to protecting consumers, the hon. Gentleman will know that we are fully committed to the price cap, and review it all the time to determine how effectively it can operate. Of course, we are 100% behind renewables. Regarding onshore wind, it is important to remind the House that we lifted the ban on the pot one auction last year, which has led to a huge boost for onshore wind.
Sir Bernard Jenkin (Harwich and North Essex) (Con)
I thank my right hon. Friend for his statement and very much welcome the overall emphasis on replacing fossil fuels with renewables in the longer term. However, does his Department understand the urgency of the present short-term situation for not just prices, but security of supply? The Government have announced support for households, but what about businesses? Businesses tend to buy on six-month contracts and his hope that the situation will rectify itself within a few months is, I am afraid, hopelessly naive. We are facing a crisis in energy bigger than the oil price shock of the 1970s and it is likely to have as big an impact, or a bigger impact, on our economy than that had on our economy then. Is his Department seriously engaged with this situation with the necessary urgency?
Kwasi Kwarteng
We are absolutely engaged with that. As someone who is very interested in the 1970s, my hon. Friend will remember that the oil price quadrupled in three months. We are facing a difficult time. The Department is fully aware of the urgency of the problem, but he will appreciate that a lot of the investment that we needed to make simply was not made. We did not make enough commitment to nuclear—that was a historical mistake of previous Governments—but we are focusing on dealing with the problem in the here and now, and that is why my right hon. Friend the Prime Minister and I are coming up with a plan in the next few days to track—[Interruption.] I find it extraordinary that the right hon. Member for Doncaster North (Edward Miliband), who was responsible for energy policy in the last Labour Government, is smirking from a sedentary position, when he comprehensively failed the nuclear sector, completely failed on energy supply and completely failed on energy resilience. We are still trying to clean up his mess. I say to my hon. Friend that we are working on these plans.
Madam Deputy Speaker (Dame Eleanor Laing)
We will have no more interventions from a so-called sedentary position.
Darren Jones (Bristol North West) (Lab)
I thank the Secretary of State for advance sight of his statement. He will know that many local authorities, NHS trusts and other public bodies are locked into gas supply contracts with Gazprom. To get out of them, the Government need to bring forward legislation to amend the public procurement rules. Will he do so?
Kwasi Kwarteng
The position in respect of Gazprom is that the UK company is separate from the parent but, should anything happen to Gazprom, just as with any other supplier of energy, we will take the appropriate steps.
Sir Desmond Swayne (New Forest West) (Con)
When we sanction Russia, we also sanction ourselves. We need to be clear with the British people, do we not, that this is a sacrifice we are expecting them to make, when the Ukrainians are making so much greater sacrifice.
Kwasi Kwarteng
My right hon. Friend is absolutely right. People in this country have an intuitive, heartfelt feeling for the people of Ukraine. People understand—I have seen it in my constituency at the weekend and I am sure he has seen it in his—and are willing to endure hardships in solidarity with the heroic efforts that the people of Ukraine are making. People understand that in this country, because we are a generous and giving country.
Caroline Lucas (Brighton, Pavilion) (Green)
The Government are right to get off Russian oil and gas—I welcome that—but wrong to propose replacing it with new domestic production. Our dependence on fossil fuels is what got us into this energy crisis in the first place, and that is why many of us, including the International Energy Agency, are calling for no new licences. The real insanity is trying to get out of one crisis by plunging ourselves into another. More extraction from the North sea will keep our bills high and drive us past safe climate limits, and fracking will not help. Will the Secretary of State use this moment to launch an emergency green revolution? Will he get serious at last about energy efficiency, and will he wean the UK off not just Russian oil and gas, but all oil and gas now?
Kwasi Kwarteng
On this question, I have to confess that the hon. Lady and I have completely different views. We are diametrically opposed. I agree with her on the net zero commitment, but this idea that we can simply switch the lights off, so to speak, on oil and gas is absurd. [Interruption.] It is completely absurd and we need to have investment in the North sea.
Alun Cairns (Vale of Glamorgan) (Con)
I commend my right hon. Friend’s statement and pay tribute to him and his predecessors for the diversification they have made to the supply, security and sources of the energy mix over recent years, despite the lack of investment in nuclear during the 2000s leading up to 2010. Does he agree that oil will remain a key source of energy for some time to come as we are transitioning? What consideration has he therefore given to bringing about influence on OPEC nations to produce more oil so that the global supply can be better managed?
Kwasi Kwarteng
My right hon. Friend raises a particularly important point. We had a discussion at the IEA ministerial only last week where we all agreed as a collective to release our stock. That was an American initiative that we supported. Clearly, we need to work as an international community to ensure we can provide enough supply to dampen the increase in prices that we are seeing.
Mick Whitley (Birkenhead) (Lab)
I welcome the spirit of these plans, but I urge the Government to act even faster. Russian gas and oil constitutes just a tiny fraction of the UK’s energy mix and we must break this last lifeline to the Putin regime as soon as we can. I am also deeply concerned to hear Government Members call for a resumption of fracking, which would be a betrayal of the commitments we made to the world in Glasgow just five months ago. Will the Secretary of State today commit to ruling out further investment in fossil fuels and instead pledge his Department’s support for an ambitious new green deal and wide-ranging investments in renewables, including the Mersey tidal project, so that we can finally set ourselves on the path of true energy independence?
Kwasi Kwarteng
As Energy Minister and now Secretary of State, I have been totally committed to increasing the supply and production of renewable power. We reopened the pot one auction for onshore wind. For the first time ever, we had a pot ringfenced for tidal stream technology. I have introduced an annual auction for offshore wind. I am completely with the hon. Member in being 100% behind renewables and the green revolution.
Andrew Bowie (West Aberdeenshire and Kincardine) (Con)
I thank my right hon. Friend not only for his statement, but for his continued and unflinching support for the oil and gas industry that I am proud to represent much of in West Aberdeenshire and Kincardine. On that, despite the importance of energy security, which has been brought home to us all through the tragic scenes we are seeing on television right now, is it not absurd that the Scottish Government’s official position continues to be that we should have no new licences, no new exploration and no new drilling in the North sea?
Kwasi Kwarteng
My answer to my hon. Friend is that he is absolutely right. It is the North sea transition deal—“transition” is the key word—not the North sea extinction deal, as the hon. Member for Aberdeen South (Stephen Flynn) and his Green friends north of the border are pursuing. We have a very different approach from Members on the Opposition Benches, and long may that continue.
Dave Doogan (Angus) (SNP)
“Transition” is the key word, as the Minister has just said. We need to pivot very quickly towards renewable energy, but this is a sharp reduction in oil and gas imports, as 8% come from Russia. We welcome that measure, but insofar as that will lead to a net reduction in the availability of oil and gas, it will also lead to a net reduction in emissions, which will not be maintained. We will need to supplement that demand in the short term. What discussions does he plan to have with the Scottish Government to ensure that we can meet that need with the maximum economic benefit to oil and gas services companies?
Kwasi Kwarteng
I am happy to speak to colleagues in the Scottish Government about these issues. The hon. Member should remember that while we are banning the import, it is a phasing out. We could have gone down the US route and had a 45-day grace period, but that would have been too disruptive to the supply chain. I would be happy to talk to him and his Scottish Government colleagues about how we can manage the process, and that is exactly why in the statement I also announced the formation of a taskforce to deal with that transition.
Richard Fuller (North East Bedfordshire) (Con)
In regard to the UK’s Russian oil ban, I am convinced of the moral case, although I am sceptical about the efficacy of such a ban in the long term. I welcome my right hon. Friend’s commitment to keeping all options open, but he will be aware that moving faster on the transition to green puts greater costs on households from technology risk. Will he therefore look again at options on insulating homes and Government support for home insulation as part of the package?
Kwasi Kwarteng
My hon. Friend, like other Members across the House, is right to focus on energy efficiency, because that is clearly a big part of this conundrum. We have had some successes, but we have also done some things not as effectively as we could have done. There were elements of the green homes grant that worked, and elements that did not work as well. I am constantly trying to improve the offer on energy efficiency with the public sector.
Kerry McCarthy (Bristol East) (Lab)
The Minister has been asked twice now specifically about fracking and has completely avoided answering the question. Would he like to have another go?
Kwasi Kwarteng
I will have a go, and I will be very clear. Funnily enough, I was a Minister at the time when the written ministerial statement on hydraulic fracturing was made. The Government have always been clear that we will take a precautionary approach and support shale gas exploration if it can be done in a safe and sustainable way. That remains our position, and we will be evidence-led. That is what we wrote and said in 2019, and we are still committed to that.
Robert Halfon (Harlow) (Con)
I thank my right hon. Friend for his statement. On oil prices, he will know that prices at the pumps are reaching £1.60 a litre. Hard-pressed motorists are paying over £16 more than a year ago and hauliers are paying more than £120 every time they fill up at the pumps, which is literally unaffordable for most people around the country. I recognise that the Government have done a lot with the fuel duty freeze, but the Irish Government have today announced a rebate of 20 cents on petrol and 15 cents on diesel. We must do the same. He must make the case to the Treasury, so he should not just fob me off. Will he introduce PumpWatch, as recommended by FairFuelUK, which would monitor prices from the big oil companies to ensure that motorists are not ripped off at the pumps when the petrol pump price rockets as the oil price goes high but goes down like a feather when the oil price lowers?
Kwasi Kwarteng
No right hon. or hon. Member has done more for motorists over the last 12 years than my right hon. Friend. I completely hear his imploring the Treasury to help consumers. My right hon. Friend the Chancellor provided a wide range of measures that offer some support, but we are always happy to talk to him to see how we can improve the offer.
Sammy Wilson (East Antrim) (DUP)
It is a great pity that it has taken a war in Europe to show how mad our energy policy is. Nevertheless, I welcome the Secretary of State saying that turning off domestic production of North sea oil and gas would be completely insane right now. Does he agree that it would be equally insane to turn our back on the shale gas that is available in the north of England, which would help to make us less dependent on foreign resources, create jobs, give us security of supply and give the Treasury revenue from gas? Does he agree that the Prime Minister’s decision not to concrete over the wells that are already there is the first step to the exploitation of that gas?
Kwasi Kwarteng
In conversation with the Prime Minister, we were clear that it did not necessarily make any sense to concrete over the wells. We are still in conversation about that. As I said, our position on the moratorium has always been the same: if fracking can be done in a safe and sustainable way, the Government are open to the idea. We have always said that; the position has not changed. With respect to the North sea, I fully agree with everything that the right hon. Gentleman said.
Selaine Saxby (North Devon) (Con)
I thank my right hon. Friend for his statement and for the work done by Conservative Governments to increase our renewable energy capacity by 500%. As we move towards the new normal of a greener and more secure energy supply, will he commit to increase the capacity coming out of the Celtic sea and accelerate the roll-out of floating offshore wind and the target that it can deliver on?
Kwasi Kwarteng
As my hon. Friend remarked, floating offshore wind is key to accelerating our renewables offer. In the next few days, we will hopefully be setting some slightly more ambitious targets for our 2030 ambition than we have hitherto set.
Mr Ben Bradshaw (Exeter) (Lab)
Given that the Conservatives have been in power for 12 years, why has the Secretary of State not already lifted the damaging moratorium put in by David Cameron on onshore wind—the cheapest and quickest way of generating renewables?
Kwasi Kwarteng
I am sure that the hon. Gentleman will remember that there was a moratorium on the pot one auction, which we lifted two years ago. I am pleased to say that in the fourth auction round, we have a separate pot that is ringfenced for onshore and solar technologies. Onshore will be fully reflected in that auction.
Dr Andrew Murrison (South West Wiltshire) (Con)
The Government are right to be cautious about windfall taxes, but it is worth Conservative Members remembering that it was Baroness Thatcher who introduced them in 1981. Given the extraordinary profits particularly of BP and Shell in recent times, and given the very real prospect of simply unaffordable bills landing on our constituents’ doormats in the near future, will the Government at least keep that option open?
Kwasi Kwarteng
My right hon. Friend is well versed in departmental responsibilities and he will know that issues to do with taxation are squarely within the remit of the Chancellor of the Exchequer. I personally feel that a windfall tax is not the way to go in this moment, because there is huge uncertainty about investment in the North sea as it is. If we were to entertain the idea of a windfall tax, that would simply frighten the investment, destroy jobs and destroy wealth creation. I do not think that is in anyone’s interest.
Liz Saville Roberts (Dwyfor Meirionnydd) (PC)
Putin’s bloody war in Ukraine is being financed by Europe’s addiction to fossil fuels, so we have to speed up our green transition, but more than one in 10 Welsh households are living in fuel poverty and the number is growing daily. Starved of public transport investment, Wales is the most car-dependent nation in the UK, so we will be disproportionately affected by rising prices. Rural regions of Scotland and England with high levels of car dependency are eligible for the rural fuel duty relief. Will the Secretary of State extend that to Wales?
Kwasi Kwarteng
Even if I wanted to, that is not in my power, but I would be very happy to talk to people across Government to address the issue that the right hon. Lady has raised.
John Lamont (Berwickshire, Roxburgh and Selkirk) (Con)
I welcome the Government’s statement today and their plans. Are they aware, however, of current supply issues for red and white diesel? Businesses in the Scottish Borders have contacted me in the last day or so to say that there are real issues in sourcing red and white diesel. Indeed, suppliers are reporting that Grangemouth will run out in the coming days. Are the Government aware of that, and will they investigate it further?
Kwasi Kwarteng
I pay tribute to my hon. Friend, who consistently and ably defends his constituents’ interests. The red diesel phase-out was announced two years ago, and I would be happy to talk to him to see how we can manage that transition.
Mike Kane (Wythenshawe and Sale East) (Lab)
To follow on from the question of the hon. Member for Harwich and North Essex (Sir Bernard Jenkin), many businesses, such as aviation, which has a massive impact on my constituency, hedge their future fuel costs, but many will be hugely exposed because they have not hedged those costs. Is the Department doing some analysis of the exposure of such businesses?
Kwasi Kwarteng
The hon. Gentleman raises a critical point. The Department is always looking, particularly at a time of extreme price volatility, at how prices affect the supply chain and businesses. The Under-Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend the Member for North East Derbyshire (Lee Rowley), was speaking to energy intensive industries this morning, as I was, and we are fully alive to their plight.
Lee Anderson (Ashfield) (Con)
We all welcome the banning of Russian oil and gas to put the squeeze on Putin, but what about Russian coal? We currently import more than 500,000 tonnes a year of coking coal, which is the same type of coal—metallurgical coal—that can be mined safely and cheaply in this country. Does my right hon. Friend agree that if we can get it out of the ground cheaply and safely, we should do that without delay?
Kwasi Kwarteng
My hon. Friend will know that the specific issue relating to the Cumbrian coking mine is under judicial review but, as I said in my statement, we clearly want to move away from Russian hydrocarbons. That is absolutely our intention.
Wera Hobhouse (Bath) (LD)
Obviously, the crisis makes us all aware of consumer energy prices and how to contain them to some degree. To reduce the average energy cost for consumers, we need a replacement for the green homes grant that is far more comprehensive and that recognises that solar power, battery storage and smart metering must be part of the solution. What are the Government’s plans to roll out residential solar much more ambitiously, which, together with battery storage and smart metering, could save the average consumer up to £900 annually on their energy bill?
Kwasi Kwarteng
The hon. Lady will appreciate that we have done quite a lot to drive solar. I referred to the fact that we have restarted the pot one auction, which is all about onshore wind and solar. When we announce the result, there will be lots of solar projects that will hugely increase solar capacity in this country.
Bim Afolami (Hitchin and Harpenden) (Con)
The Secretary of State knows that I am a strong supporter of his policy to end reliance on Russian oil and of the need to intensify our investment in renewable energy. There are many rural communities in constituencies such as my own and, I suspect, across the country that rely on heating oil. What plans does he feel his oil taskforce will make for securing the availability of heating oil, ensuring the price of heating oil does not rise out of ordinary people’s reach and intensifying energy efficiency for homes, particularly for the older buildings that we find in many rural communities in areas such as my own?
Kwasi Kwarteng
The taskforce will do exactly what my hon. Friend has asked for. It will look at where we can source supply at the cheapest rate and how we can increase our independence. It will look at taking away our reliance on Russia and at sourcing oil at the cheapest rate. There is an issue about further interventions for heating oil, and we are in discussions with the Treasury and others across Government all the time about how we can lessen the burden on our people.
Geraint Davies (Swansea West) (Lab/Co-op)
The Secretary of State will know that his Department refused support for the Swansea bay tidal lagoon, but the new Blue Eden lagoon project is nevertheless going ahead. Instead of looking again at fracking, which generates 5% of fugitive emissions—that makes it worse than coal for climate change—will he look at supporting the Welsh Government and Wales overall in marine technologies and renewable technologies, alongside looking at organic batteries at scale, which can store such renewables without causing pollution?
Kwasi Kwarteng
The hon. Gentleman makes a very fair point. We have done a huge amount as a Government in driving renewables. I was very pleased to see that the tidal stream auction has been ringfenced. On the specific Swansea lagoon project, I, as the Energy Minister at the time, and the Secretary of State felt that it was not economic, but generally I do not think any Government have done more for marine renewables and marine energy.
Mark Jenkinson (Workington) (Con)
I welcome my right hon. Friend’s swift and decisive action on phasing out Russian imports. To echo the comments of my hon. Friend the Member for Ashfield (Lee Anderson), as our minds are now focused on increased domestic production, such as that from the North sea, does the Secretary of State agree with me that the benefits of domestic supply chain resilience and security should also encompass other critical minerals, such as coking coal, of which we looked to Russia for over 750,000 tonnes—50% of our requirement—last year?
Kwasi Kwarteng
My hon. Friend will appreciate that there is a diversity of sources for coking coal; we are not just looking to Russia. He makes an excellent point about critical minerals, and he will appreciate that this is the first Government ever to have a critical minerals strategy. It will be published in the next few weeks, and the Under-Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend the Member for North East Derbyshire (Lee Rowley) is leading on that within the Department.
Alan Brown (Kilmarnock and Loudoun) (SNP)
Electricity from gas power stations is one of the ways that we meet peak electricity demand. The Secretary of State knows that dispatchable energy can also be created from pumped-storage hydro, which is a completely renewable source. To minimise our reliance on gas and our switch to renewables, he knows that SSE is ready to go ahead and build Coire Glas in the highlands. Will he commit to agreeing a minimum floor price with the SSE, so that it can get on and build, and will he confirm the timescale for such an agreement?
Kwasi Kwarteng
I am really delighted that the hon. Member raises this. I think he has raised it at every BEIS questions for the past 18 months, and I will keep saying what I have said before. We are interested in the technology, but I need to look at the specific proposals he is suggesting, and we obviously need to work out whether it is value for money. Those are the parameters we always look at.
Alexander Stafford (Rother Valley) (Con)
Yesterday at the Business, Energy and Industrial Strategy Committee, we had a panel of experts talking about this very issue, and when the issue of fracking was raised, they were unanimous in their voice that it would be neither effective nor cost-efficient, would not do anything for the price and was actually a bit of a red herring. Does my right hon. Friend agree with me that fracking is a red herring, and that we should instead focus for energy on more renewables and even more from the North sea, because fracking just does not work in this country?
Kwasi Kwarteng
I think we can look at a range of technologies. We looked at the fracking issue—I was the Energy Minister at the time—and there were issues regarding the seismicity of various projects. However, we have always had an open mind, and we have always said, and I will repeat it, that we will support shale gas exploration if it can be done in a safe and sustainable way. We will be led by the science on whether this is indeed possible, so there are lots of experiments and empirical evidence that we need to consider.
Jonathan Edwards (Carmarthen East and Dinefwr) (Ind)
The Secretary of State mentioned in his statement the need to protect the Ukrainian people from further misery. As he knows, Ukraine is a country with historical debt problems, and the full-scale Russian invasion we are witnessing will inevitably make matters worse for them. Considering this is likely to be a prolonged crisis, can he assure the House that the British Government will be leading international efforts with the IMF, the World Bank and the G7 to offer Ukraine debt relief?
Kwasi Kwarteng
The issues about Ukrainian debt relief are for a much wider set of participants than are reflected in this House. We will do everything we can to support the Ukrainian people, and we are looking at every possible intervention that can in some way lessen the burden of this ferocious assault.
Mr Richard Holden (North West Durham) (Con)
I thank the Secretary of State for his statement. The sanctions today are an excellent next step in what we are doing to clamp down on Russia’s ability to fund its war machine, but my constituents have two questions. First, how can they best support the Government’s actions with direct contributions themselves? Secondly, in their own interests as well, what is the UK going to do to boost our domestic oil, gas and coking coal supply to ensure not only that jobs are created here in the UK, but that we reduce our dependence on other international players at this point?
Kwasi Kwarteng
My hon. Friend is absolutely right. The issues of critical minerals and of security of supply could not be more important, and that is why I have commissioned a critical minerals strategy. On the help his constituents have offered and their full support, there are lots of ways in which we can contribute financially and materially. I helped organise such an effort in my constituency only last week, led by my excellent party chairman, Mike Brennan, but there are lots of ways we can help. On security of supply, that is absolutely, as the Prime Minister has said, our most important consideration right now.
Margaret Ferrier (Rutherglen and Hamilton West) (Ind)
Banning Russian oil will come at a cost every day for people across the UK, and it is a price I am sure they accept the necessity of due to this war by Putin on Ukraine. However, with an already growing cost of living crisis and soaring energy bills, what discussions has the Secretary of State had with the Chancellor about financially supporting green, clean and low-cost energy provision, so that it can be accessed faster and more broadly?
Kwasi Kwarteng
My right hon. Friend the Chancellor and I, and our Departments, speak all the time about these issues. The hon. Member will appreciate that there is a spring statement, but at the beginning of February my right hon. Friend announced an extensive £9 billion of projects. We will be looking across the year at how this market develops, but fiscal interventions, as she will appreciate, are a matter for my right hon. Friend.
Dr Ben Spencer (Runnymede and Weybridge) (Con)
I very much welcome my right hon. Friend’s announcement today. It cannot be right that we are bankrolling the Russian state and war machine through buying Russian oil and gas, and I am glad that we are moving to fix this at pace. He will know that we import quite a lot of aviation fuel from Russia, and his Department has done fantastic work in developing sustainable aviation fuel and its manufacture in the UK. Will he use this as an opportunity to drive that forward at even greater pace to set up SAF manufacture in the UK?
Kwasi Kwarteng
My hon. Friend raises a really important point. With the dismal prospect of the ferocious aggression and violence that we are seeing, one of the things we are thinking about is a more sustainable future. A very thin silver lining on a very dark cloud is the fact that we are talking about resilience and sustainability, and I am absolutely delighted to be working with my hon. Friend and with right hon. and hon. Friends in the Department for Transport to make sure that we accelerate the adoption of sustainable aviation fuel.
Rachael Maskell (York Central) (Lab/Co-op)
The pace at which we divest from Putin’s fossil fuels is important for stopping this war. As a result, as in wars past, if we scaled up our manufacturing to see retrofitting and our renewables industry, that could be not only the saviour of the Ukrainian people, but the saviour of our planet. Will the Secretary of State not only scale up, but lead an alliance of countries that need to make such urgent diversification to ensure that we apply this pain to Putin’s regime as quickly as possible?
Kwasi Kwarteng
The hon. Lady is absolutely right. We must work internationally across countries and come up with an alliance that can confront Putin in that way. That is why we are having an extraordinary meeting of G7 Energy Ministers tomorrow. However, it is relatively easier for us and American colleagues to shut ourselves off from that dependency than it is for colleagues in Europe, who are far more dependent on Russian gas and hydrocarbons.
Dr James Davies (Vale of Clwyd) (Con)
I welcome my right hon. Friend’s statement about a ban on Russian oil imports. Does he agree that the increasing need for self-reliance on energy sources means that it is right that we invest in renewable energy schemes in this country, including the possibility of a large tidal range facility in north Wales?
Kwasi Kwarteng
I hear the clamour for a tidal range facility in the Vale of Clwyd, and I am sympathetic towards it. My hon. Friend will, I am sure, be good enough to acknowledge that for the first time ever in the fourth auction round we have a tidal stream auction pot. We are committed to doing all we can to further the development of marine renewable energy.
Deidre Brock (Edinburgh North and Leith) (SNP)
The Secretary of State said that he was 100% behind renewables and he has mentioned the tidal stream pot, but I would like him to offer so much more support for tidal energy schemes, in which Scotland can play such an important role. It is a such a cleaner, greener and cheaper alternative to nuclear.
Kwasi Kwarteng
I recognise the hon. Lady’s commitment to tidal stream, and she will be good enough to notice that this is the first time that any British Government have committed to supporting any marine energy renewable project. There is always the clamour for more. We should do more, and we could do things more quickly, and I am happy to work with her and other Members across the House to see how best we can do that.
Madam Deputy Speaker (Dame Eleanor Laing)
I thank the Secretary of State for his thorough answers to a great many questions on this important subject.
Corporate Transparency and Economic Crime
Kwasi Kwarteng Excerpts(2 years, 8 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Secretary of State for Business, Energy and Industrial Strategy (Kwasi Kwarteng)
With your permission, Mr Speaker, I would like to make a statement on the reforms the Government will be bringing forward to improve transparency over the ownership of companies and property in the UK, and to strengthen the enforcement of financial sanctions. These are the key elements of our strategy to tackle dirty money from Russia and elsewhere.
The openness of our economy to investment from all parts of the world is one of our greatest strengths. However, we are determined that we want to attract the right kind of investment. As many Members will know, oligarchs and kleptocrats from Russia and elsewhere have used the veneer of legitimacy provided by UK registered companies and partnerships, and have used high-end property to help launder proceeds of corruption. At present, Companies House has very limited powers to prevent that abuse. In light of Russia’s outrageous actions in recent days, it is necessary that we put those criminals on notice and send a clear message that the UK will not tolerate their corruption here. To that end, I am announcing two immediate steps.
First, the Department for Business, Energy and Industrial Strategy is today publishing a White Paper on corporate transparency and register reform. The White Paper sets out a comprehensive package of reforms to Companies House. [Interruption.] Stop pre-empting. Just be patient. The agency will be transformed into a custodian of accurate and detailed information, ensuring that we can clamp down on those who seek to abuse UK corporate structures to launder money. Anyone setting up, running, owning or controlling a company in the UK will need to verify their identity with Companies House, which will then be able to challenge dubious information and inform the security agencies. Company agents from overseas will no longer be able to create companies in the UK on behalf of foreign criminals or secretive oligarchs. The reforms will not only tackle illicit finance, but directly support the millions of legitimate enterprises which transact with Companies House every day. Alongside the White Paper, we will be legislating for other measures, including reform of limited partnerships law, new powers to seize crypto-assets, and reforms to help businesses share information on suspected money laundering.
Secondly, we will be introducing legislation to Parliament tomorrow to accelerate other measures that will make an immediate dissuasive effect on dirty money and its purveyors from Russia and elsewhere. The Bill we introduce tomorrow will create a register of overseas entities to crack down on foreign criminals using UK property to launder their money. The new register will require anonymous foreign owners to reveal their real identity to ensure that criminals can no longer hold property behind secretive chains of shell companies. By legislating now, we will send a clear warning to those who have used, or who are thinking about using, the UK property market to launder ill-gotten gains, particularly those linked to the Putin regime. Tomorrow’s Bill will reform unexplained wealth orders, removing key barriers to their use by law enforcement. It will also include amendments to financial sanctions legislation, helping to deter and prevent breaches of sanctions.
The new property register and the reforms to Companies House will once more see the UK take innovative and world-leading steps to tackle anonymous shell companies. We have been leading on this agenda since being the first major economy to put in place a public register of beneficial ownership for all domestic companies in 2016. Not only can we pay tribute to the heroic efforts of the people of the Ukraine—Ukraine—to defend their democracy and their freedom; these measures, in a small but significant way, will put pressure on kleptocrats and oligarchs who have abused our hospitality for their own nefarious purposes.
Seema Malhotra (Feltham and Heston) (Lab/Co-op)
I thank the Secretary of State for early sight of his statement and for our call with the Under-Secretary of State for Business, Energy and Industrial Strategy, the hon. Member for Sutton and Cheam (Paul Scully), this afternoon. The Labour party and the House are united in our support for Ukraine and we take very seriously our role in ensuring that Russia’s unprovoked and unjustifiable aggression fails.
Russia’s invasion of Ukraine has shaken the world, with huge concern across Parliament and the country about the invasion and the unfolding humanitarian crisis. It is clear, however, that it has taken the Russian invasion of Ukraine to shake the Conservative party into finally taking the action that is required. These steps are imperative, not just for financial transparency but for our national security, and the Government’s action on that to date falls far short of the leadership required. That is why we must urgently take the necessary steps to drag illicit finance out of the shadows and make it clear that the UK will no longer be a home to dirty money.
We therefore support the Government in introducing the emergency legislation in the light of the atrocities that we are seeing in Ukraine. The need for it is clear for all to see, but the Secretary of State will recognise that these steps have been needed for a long time. He will know that Labour and, indeed, some Government Members have been calling for years for the measures that the Government have announced. We were first promised this legislation in 2016, and this draft legislation has in fact been ready since 2018. Although we support the Government’s actions today, the Secretary of State needs to take responsibility for the time and progress lost through Government inaction. I hope we will see that lessons are learned for this Bill and future legislation, because time is of the essence.
The UK would have been in a much stronger position to act with speed and our national security would have been better protected if the register had already been up and running. That is why the Government must move quickly, because the dangers of a lack of transparency, particularly in the current climate, are all too plain to see. If the intention, as stated, is to impede Russian money, the register will need to be operational in the coming weeks to have any effect. I assure the Government of Labour’s full support in moving through the Bill’s stages quickly, and hope in turn that they will act quickly to make the register and other measures a reality.
I wish to press the Secretary of State on some key areas in which the Government must go further to make the measures as effective as they could be, and I do that in the spirit of cross-party support. I welcome his announcement that the economic crime transparency and enforcement Bill, or some aspects of it, will finally be introduced tomorrow and welcome the White Paper reforms to Companies House, but frankly, we have to ask whether a White Paper is all he is bringing forward on Companies House—[Interruption.] We have been promised more before, and the Prime Minister announced that more immediate steps would be taken. Will the Secretary of State confirm when other aspects of the economic crime Bill, such as the reform of Scottish limited partnerships and the power to seize crypto-assets, will come before the House?
Will the Secretary of State confirm that the register of overseas entities will be publicly available and that there will be criminal penalties for non-compliance? Will those criminal penalties apply to those who fail to update the register annually, as well as to those who provide false information? Will he confirm when the register will be up and running? Can he give an update on the Crown dependencies and overseas territories, and will he commit to enacting similar reforms and to the Government taking action if they do not take action?
The freedom of our press will be vital throughout this invasion. Will the Secretary of State confirm whether the Government intend to use Monday’s legislation to tackle strategic lawsuits against public participation, so that journalists are not silenced and can freely report on the financial activity of Russian oligarchs? Finally, will he update the House on the discussions that he is having with the devolved Administrations on these important measures? I look forward to his response.
Kwasi Kwarteng
I am grateful to the hon. Lady for her points. Clearly, on the time that this has taken, she will remember that in the 2017 to 2019 Parliament, a huge amount of our time was taken up by members of the Labour party and the Opposition parties frustrating Brexit. They absorbed a huge amount of parliamentary time and I am afraid that that was one of the reasons we could not expedite this sort of legislation.
There will be criminal liability for failure to update the register annually and for giving misleading or inaccurate information. We are working with the Crown dependencies to update their transparency; by next year, they will have to have much greater transparency requirements. The hon. Lady will be pleased to know that my Government colleagues and I speak to our counterparts in the devolved Administrations on a very regular basis.
Dr Julian Lewis (New Forest East) (Con)
I welcome the statement, as far as it goes. As a matter of principle, does my right hon. Friend agree that cleansing British public life of dirty Russian money is not quintessentially difficult?
Kwasi Kwarteng
As my right hon. Friend appreciates, this legislation is timely. We are grateful that it seems to have elicited huge support across the House, and we are pleased to be able to expedite it.
Alison Thewliss (Glasgow Central) (SNP)
I thank the Secretary of State for advance sight of his statement. I also thank the small Business Minister—the Under-Secretary of State, the hon. Member for Sutton and Cheam (Paul Scully)—for giving me and my hon. Friend the Member for Aberdeen South (Stephen Flynn) his time earlier, which was appreciated.
I put on record the concerns that many of my Glasgow Central constituents have expressed over the weekend for the people of Ukraine. They call on the Government to do more. Like me, they will welcome action on sanctions and on the flow of dirty money through the City of London, so I am glad that there will be reform of Companies House. It is long overdue, and SNP Members have not been holding it back; we have been calling for it constantly for years. The Government have had multiple chances to deal with it.
As an interim step to action on Companies House, will the Government use the Verify scheme to ensure that people cannot fill the register with absolute guff, as happens now? Will they give Companies House interim anti-money laundering responsibility until the new Bill comes into force? When it does, will it be retrospective? Will it go back to the register and root out all the nonsense, or will it start again from scratch?
I am glad to hear about the register of overseas entities in the Bill, but I would like to know how it will differ from the draft Registration of Overseas Entities Bill. I sat on the Joint Committee on the draft Bill; our report came out in May 2019. How will the new Bill differ? Will it pick up on issues around definitions of legal entities, the use of trusts and the loopholes that they create? Will it take action on Scottish limited partnerships, which have legal personality and can hold property? Tackling them in the Bill is crucial.
Will we look at the cost to land registries of working on the Bill? In Scotland, the register of persons holding a controlled interest in land will come into force on 1 April 2022 and will include overseas entities, so the Scottish Government are moving on the issue in just over a month’s time. What conversations has the Secretary of State had with the Scottish Government on how the Scottish register will interact with the UK register?
Will the Government go after the enablers—the estate agents, the lawyers and the accountants who have facilitated so much of the kleptocracy in this country? They have to be held to account, too. I am glad to see that unexplained wealth orders, which have not been working properly—I understand that there have only been nine since their inception—are being fixed. I look forward with interest to that happening.
Finally, what will the Government do about enforcement? They can have the finest laws in the land, but if there is no action and no investment in enforcement, there is little point in having them at all.
Kwasi Kwarteng
I am grateful for the hon. Lady’s remarks. As far as the enablers are concerned, we have legislation already on the statute book. As my right hon. Friend the Foreign Secretary said in her statement, we are looking at other measures to tighten the regime.
We work with DA Ministers constantly. The Under-Secretary of State, my hon. Friend the Member for Sutton and Cheam (Paul Scully), has engaged ably and directly with DA Ministers, and we look forward to doing so.
This set of measures is only the beginning of the much tighter regime that we want to bring in. [Interruption.] People are chuntering from a sedentary position, but I would like to point out that these matters, particularly those regarding cryptocurrencies and cyber-crime, are complicated. We are trying to expedite legislation on those fronts as quickly as possible.
Mr Andrew Mitchell (Sutton Coldfield) (Con)
My right hon. Friend has brought excellent news to the House this afternoon, but will he at least acknowledge that the right hon. Member for Barking (Dame Margaret Hodge), my hon. Friend the Member for Amber Valley (Nigel Mills), my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) and I have been asking the Government to do these things for the last four years and more? Will he now look at the other measures that we have advocated to clamp down on dirty money and money laundering? He is absolutely right about Companies House, but will he now ensure that it has real monkey glands for investigating, and is not just a library? That will require money and officials with great expertise, but sunlight, as ever, is the best disinfectant.
Kwasi Kwarteng
I welcome my right hon. Friend’s remarks. I pay tribute to him, and to Members on both sides of the House, for the excellent work that they have done in ensuring that the measures have been introduced in a timely way. I look forward to working with him to ensure that we have a good regime. Let me also point out that we have £63 million in the spending review to deal precisely with the funding of Companies House.
Dame Margaret Hodge (Barking) (Lab)
The Secretary of State is sensing some frustration, and I will tell him why. The public register of beneficial ownership of properties that are foreign-owned was promised when David Cameron was Prime Minister in 2015. That had nothing to do with Brexit; it could have been introduced in that year. Then we come to Companies House. I am dismayed that all we are getting is a White Paper. We had an extensive consultation, completed a year ago, which built plenty of consensus around the reforms that were necessary. We do not need a White Paper; we need legislation, because that is what will stop this situation.
I am not sure that the Minister understands the issue of the enablers. There is hardly any ability for any of our enforcement agencies to get at those who not only collude with the process of dirty money coming into Britain, but facilitate it—lawyers, banks, accountants and others. If we do not stop them doing that, dirty money will continue to come in.
My final point to the Secretary of State is about the unexplained wealth orders. We greeted them with great expectations, but they have let us down. I would urge him to put a cost cap on litigation so that when we fail in an unexplained wealth order, the various recipients of dirty money do not get away with £2 million-worth in legal costs, as they did in one case.
Kwasi Kwarteng
I am sure that my answer will not satisfy the right hon. Lady, but I am pleased that we are introducing this legislation, and I look forward to working with her and colleagues on both sides of the House in ensuring that it is right. As for the cap on unexplained wealth orders, I think it will be the subject of plenty of discussion imminently, when we introduce the legislation.
Several hon. Members rose—
Mr Jonathan Djanogly (Huntingdon) (Con)
I welcome the statement. While I fully support efforts to have the means to investigate criminality and sanctions-busting schemes at Companies House—and I hope that that will be properly funded, because it will be expensive to carry out—I also hope that the process of registration will not be burdened to the extent that we lose competitive advantage and throw the baby out with the bathwater.
Kwasi Kwarteng
I think my hon. Friend is right. There is always a balance to be struck in legislation of this sort, but I think that, as he takes the temperature of the House, there is a real feeling that we need to expedite it. I feel confident that it strikes the right balance between fairness and transparency, and will not be overburdening people with bureaucracy.
Liam Byrne (Birmingham, Hodge Hill) (Lab)
This is at best a half measure. Companies House has 11,000 shell companies where there is no person of significant control registered, yet there have been only 112 prosecutions, which is just 1%. We have 12 different agencies in charge of economic crime, there is no Minister with clear responsibility, and the National Crime Agency says that its budget needs to be doubled. Irony of ironies, journalist Tom Burgis is being taken to court this Wednesday for daring to reveal the truth about the corrupt company ENRC; our courts are being used as arenas to shut down journalists. We need a far bigger, bolder plan from the Minister.
Kwasi Kwarteng
What the right hon. Member says about Companies House reform is not accurate at all. This set of measures will be the biggest reform to Companies House in 200 years. It is something significant. It has not been done in 200 years and it is something which we are very proud to have expedited—[Laughter.] I would have thought there would be a bit more recognition of the fact that this is vitally important legislation that is going to be brought in in a timely way.
Sir Robert Neill (Bromley and Chislehurst) (Con)
The Secretary of State is right to draw a distinction between that which needs to be done immediately to deal with the appalling behaviour of Putin and his cronies and the long-term reforms that are really important to the business structures of the United Kingdom, for our competitiveness and for company law as a whole, which should rightly not be rushed. In relation to the more urgent and pressing matters, will he undertake to work closely not just with the City but with the large amount of expertise we have in financial and legal services? For example, the Financial Markets Law Committee and others have a great deal of expertise, particularly around such issues as crypto-currency, and we need to harness that. The City and the financial sector want good regulation, because it is in Britain’s interests to have a clean and effective set-up and we should not be misled by those who suggest otherwise.
Kwasi Kwarteng
My hon. Friend is right. This idea that the City of London does not want regulation is a travesty and a disgrace. It is a slur on the reputation of our financial services. He is also right to say that there is a distinction to be drawn between what needs to be done immediately and can be done expeditiously, and other matters that need a great deal of thought and consultation, on which I am happy to engage with him and other colleagues.
Andy McDonald (Middlesbrough) (Lab)
The introduction of this corporate transparency work is welcome but way overdue; it is a shame that it took the invasion of Ukraine to bring it forward. While he is at it, will the Minister please encourage the chair of his party to conduct a review of the money that has come from oligarchs to Tory MPs and demand to know what was expected of them? Are they going to give that money back?
Kwasi Kwarteng
I would like to make a point about donations to political parties. We all know that we do not have state-funded parties. Any citizen can fund and give donations to political parties. I also want to say gently that not every single person of Russian origin is an oligarch. People come here—many of them have British citizenship—and they give freely of their funds.
Mark Pawsey (Rugby) (Con)
It is good that the measures will be with us tomorrow, but my constituents who have gone through the process of buying a property will find it hard to appreciate how, over many years, we have allowed the acquisition of UK property to hide wealth that has often been illegally obtained. Can my right hon. Friend reassure them that these new measures will bring this kind of activity swiftly to an end?
Kwasi Kwarteng
Absolutely. That is the point of this raft of measures. We want to shine the light of transparency on these transactions and to minimise the likelihood of people using our property and our goodwill to hide their ill-gotten gains.
Layla Moran (Oxford West and Abingdon) (LD)
As the MP whose name is on the Registration of Overseas Entities Bill, which is already tabled, may I express my delight that the Government are taking this up and more? Could I draw the Secretary of State’s eye to the amendment to the National Insurance Contributions Bill that was passed in the other place on the ownership of freeports? There is real concern that we may be dealing with one part but leaving a door open somewhere else. Will he assure us either that he will accept the amendment or that the matter will be covered in the Bill?
Kwasi Kwarteng
I am delighted to accept the hon. Lady’s warm words on the Bill. I am delighted that she is supporting it enthusiastically, and I am happy to engage with her on the passage of the Bill and to examine the amendment she has referred to.
Robert Jenrick (Newark) (Con)
I warmly welcome the creation of a register of overseas entities. Could my right hon. Friend give us a sense of how long it will take for an effective register to be created? Post legislation, it will presumably take months to establish the register, bearing in mind there are 95,000 foreign-owned properties in England according to the Land Registry and the Government propose to give those owners 18 months to register their ownership.
Secondly, further to the point made by my hon. Friend the Member for Huntingdon (Mr Djanogly), although I strongly support reform of Companies House, today a small businessperson in this country can pay £12 to register their company in less than 24 hours. Whatever we do must be as burden-free as possible to help small businesspeople and entrepreneurs to thrive.
Kwasi Kwarteng
My right hon. Friend is absolutely right. He says it may take a few months to get the register up and running, and I am trying to make the process as quick and effective as possible. He also mentions that we must not have a disproportionate effect, that we must not overburden small business people and people who want to incorporate and set up businesses, and we will not be doing that. I would be happy to work with him, as he did brilliant work in government, to make sure the Government get this right.
Sammy Wilson (East Antrim) (DUP)
It is a pity that it has taken a war in Ukraine to bring forward these measures. Irrespective of that, I have some concerns. First, the statement made no mention of what resources will be available to check whatever information is registered. Secondly, there is no indication of what will be done against those who facilitate money laundering in the first place—the whole professional industry engaged in that. Lastly, change is needed in the legal system to stop long, costly and complicated legal battles in court.
What discussions has the Secretary of State had on this with the Northern Ireland Executive? We do not have Russian oligarchs, but we have plenty of home-grown people who launder money from criminal activities using their past terrorist connections. That needs to be dealt with, too.
Kwasi Kwarteng
As I noted, observed and made very clear, we have a spending review settlement of £63 million for Companies House, which is a considerable uplift on previous budgets. There is a commitment to make sure we have the resources to police this new regime.
We speak to colleagues in the devolved Administrations all the time, and I am even happy to discuss these issues with the right hon. Gentleman, should he be so minded.
Richard Fuller (North East Bedfordshire) (Con)
I welcome my right hon. Friend’s statement, because clamping down on illicit international flows of capital is a good thing. Another good thing is open, legitimate global capital markets, where the City of London excels, supporting entrepreneurs in our country. Can my right hon. Friend assure me that, in bringing forward his legislation and the White Paper, he will pay due regard to the positive aspects of international capital, as well as clamping down on the illegal ones?
Kwasi Kwarteng
Absolutely. I am not embarrassed at all in agreeing with my hon. Friend that London is a hub of international capital, which is one of the great strengths and glories of our economy. I will do all I can, as I am sure he will appreciate, to make sure we protect that precious heritage.
Chris Bryant (Rhondda) (Lab)
I am sure it was a slip, but the Secretary of State said “the Ukraine.” Four Ministers have said “the Ukraine” in the past few days—
Chris Bryant
I fully accept that it was a slip. We will move on. “Ukraine” is the country. It is an important point, because Ukrainians hate it being called “the Ukraine.”
The point I was going to make is that we would have been in a 10-times better place in dealing with Putin’s invasion of Ukraine if all this had already been in place, which is why some of us had been calling for it for many, many years. The Secretary of State says he has expedited something. Well, I do not know what it would have looked like if he had slowed it down because, honestly, apart from anything else, we have world-beating lawyers, accountants and others who facilitate the hiding of all these assets. Do we not need to put on them the onus of having to report their dealings with Putin’s cronies, and should it not be a criminal offence if they do not do so?
Kwasi Kwarteng
I fully accept the hon. Gentleman’s point and I wish to put on record the fact that I corrected myself immediately—having said “the Ukraine”, I changed it to “Ukraine”. He makes a perfectly legitimate point about that little bit of grammar and the definite article, which is very important. On the speed with which we have brought forward this legislation, I wish to pay tribute to him and to Conservative colleagues, some of whom are no longer in their place, as they have led huge amounts of work and cross-party engagement. I am delighted that now we can expedite bringing this Bill forward.
Alicia Kearns (Rutland and Melton) (Con)
I very much welcome these efforts to rid ill-gotten roubles from our system, but in future packages will my right hon. Friend extend transparency efforts into the private education sector and education corporations? Our sanctions regime should stop sanctioned oligarchs from being able to pay future school fees, because they are sanctioned, but many of them pay school fees through shell companies, cash and cut-outs. So will he make sure that our amazing educational establishments do not continue to receive money from ill-gotten gains?
Kwasi Kwarteng
This issue has been raised already, particularly by my right hon. Friend the Education Secretary, who is absolutely focused on making sure that our education system is not abused in the way that our legislation on property and companies is.
Tulip Siddiq (Hampstead and Kilburn) (Lab)
The shadow Chief Secretary to the Treasury and I, in my role as shadow Economic Secretary to the Treasury, requested a meeting with Companies House to discuss its role in tackling illicit finance. It initially agreed to the meeting, only to cancel it at the last minute. In the email it wrote to us, it said that it had spoken to its sponsor Department, the Department for Business, Energy and Industrial Strategy, about the meeting and that BEIS was of the view that the issues that we wanted to discuss are best raised with the responsible Minister. Is it the Government’s policy to block Companies House from meeting shadow Treasury Ministers? Or does the Secretary of State agree that it is in the national interest for all of us to work together, across the political spectrum, to tackle dirty money and illicit finance?
Kwasi Kwarteng
I have been very clear that it is the responsibility of every Member of this House to engage with these issues. I have not been informed about that interdiction by my Department and I would love to hear more about it. However, as I have said, every Member of this House has an obligation to engage directly with those tackling these kinds of abuses.
Anthony Browne (South Cambridgeshire) (Con)
This House is united in agreeing that we need to get rid of dirty money from the so-called London laundromat, and I very much welcome these proposals on reforming Companies House, which is a big step in that direction. As a recent Treasury Committee report showed, the economic crime landscape is littered with agencies that are too weak to clamp down on money laundering and fraud. Will the Secretary of State confirm that Companies House will have not just the right resources—other Members have mentioned that—but sufficient powers to really clamp down on the oligarchs, who will no doubt be determined to try to block this?
Kwasi Kwarteng
My hon. Friend will appreciate that the legislation proposed will set up a range of criminal offences. As is always the case with criminal offences, we will absolutely make sure that the people who are enforcing those penalties are properly resourced. I am very keen to work with him to make sure that we get this right.
Janet Daby (Lewisham East) (Lab)
The Secretary of State has taken a similar question to this one, but it is very specific. Will he ask his party chair to conduct a review into the political donations made to the Conservative party and the links that these donors may have to the Kremlin?
Kwasi Kwarteng
I have answered this question before and I say, once again, that not everybody of Russian heritage giving money to any political party is an oligarch. I appreciate that the hon. Lady is not saying this explicitly, but the implication is that they are, and I reject the premise of the question.
John Penrose (Weston-super-Mare) (Con)
I warmly welcome these measures, particular the register of overseas entities. As has been widely said, some of us have been waiting for that for a very long time and it is hugely welcome, not just in here, but right the way through civil society outside this place. We cannot sanction an oligarch unless we know where he or she has stashed their money, and this register will make a big difference. May I push the Secretary of State a little further on his response to the question put by my right hon. Friend the Member for Newark (Robert Jenrick) about how long it will take once this new legislation is in place to clean up all the rubbish that is currently on the register, in order to make sure that we have something that is both clean and useful, and we do not have a case of “garbage in, garbage out.”?
Kwasi Kwarteng
My hon. Friend makes a very good case. There are two aspects to this. Clearly, there is the immediate signalling aspect, which will affect people’s decisions in the here and now. There is also the task of getting the register up and running, which may take a few months. I am open to working with him to make sure that we do that as quickly as possible.
Alyn Smith (Stirling) (SNP)
The SNP and the Scottish Government have been pressing for these measures for years. We are glad to see progress, but this is really overdue and it does not go far enough, so if the Secretary of State is holding out the bag for praise, it really is a bit out of bounds. I have two specific questions. To what extent do the Government intend to co-ordinate not just with the devolved Administrations and the home nations, but with the overseas territories, in taking this ethos forward? I note the commitment to properly funding Companies House, but can he undertake to keep the House informed of the discussions about budgets and funding the enforcement mechanisms of this properly, because if we are going to do this, it needs to be done right.
Kwasi Kwarteng
Dare I say it, but I have been a Member of this House for long enough not to bring a bag for praise—or whatever the phrase the hon. Gentleman used. I was not expecting that. What I do want to engage with him on is the fact that we are speaking to counterparts in the devolved Administrations because there must be a greater degree of co-ordination. We are also working with the overseas territories. We are expecting them to have much greater transparency, and we will be making that representation to them.
Mr Peter Bone (Wellingborough) (Con)
I refer the House to my entry in the Register of Members’ Financial Interests—I am a fellow of the Institute of Chartered Accountants in England and Wales. Further to what many Members have said, there is no point in our having a register if what is on it is untrue. Could we have a requirement for an auditor to verify the truth of a certificate, and if it turns out that it is untrue, that auditor is subject to criminal prosecution?
Kwasi Kwarteng
I am conscious that my hon. Friend would not want me to burden people who are legitimately setting up companies. He will also appreciate that the legislation will create new criminal offences, and I am confident that this will significantly tighten the regime that we have today.
Kerry McCarthy (Bristol East) (Lab)
The Minister said in his statement that the new register will require anonymous foreign owners to reveal their real identity, to ensure that criminals cannot hold property behind secretive chains of shell companies. Will it also deal with the issue of beneficial ownership sometimes just being put in the name of another individual so that, on the face of it, it looks like they are the person who is entitled to beneficial ownership, but really they are not?
Kwasi Kwarteng
The hon. Lady is absolutely right to say that we want to have greater transparency. The example in the statement was merely that; it was an example of how people can hide ownership of assets. We want greater transparency generally.
Kevin Hollinrake (Thirsk and Malton) (Con)
I very much welcome my right hon. Friend’s statement, particularly the bit about overseas entities. There are a couple of things that he might consider for his White Paper. Some 43% of all financial crime is identified by whistleblowers, so proper whistleblowing protection is absolutely critical to identifying this stuff. The other thing is failure to prevent economic crime. If we want our banks and wealth managers to clamp down on this stuff and to do the right thing, they need to face criminal charges if they do not.
Kwasi Kwarteng
I pay tribute to my hon. Friend, who has been speaking about these affairs with a great deal of knowledge and passion for many years, and I have engaged with him on these subjects. He will also appreciate that what we are doing in bringing forward this legislation does not capture the entire economic crime package. There are other measures that we will be looking to bring in very soon.
Dr Lisa Cameron (East Kilbride, Strathaven and Lesmahagow) (SNP)
There have been desperate calls from Ukraine that Russian and Belarusian crypto-assets be frozen and that blocks be put on users from Russia who may seek to mitigate the impact of sanctions through this means. Will the Secretary of State meet the all-party parliamentary group for crypto and digital assets, which I chair, because we want to work responsibly with the Government to make progress on this important matter?
Kwasi Kwarteng
The hon. Lady raises a key issue. It is of great relevance to me and my Department, and also of relevance to the Department for Digital, Culture, Media and Sport. I would like to say very briefly that the UK has led on this. The fact that Russian financial institutions are being denied access to SWIFT has been very much a success of our diplomacy, but I am very happy to talk to her about further measures.
Duncan Baker (North Norfolk) (Con)
I am pleased to have so much in common with my hon. Friend the Member for Wellingborough (Mr Bone), as I too am a former chartered accountant. The reforms to Companies House could not come soon enough—just getting a fictitious audit report removed proves incredibly difficult these days, so this legislation is much needed. However, if we are to empower Companies House to root out the corrupt filings, it must have the resource because, as we have heard, it is by no means a small issue. Can my right hon. Friend assure me that we will have not just the powers, but the resource, the tools and the capability to carry out those actions?
Kwasi Kwarteng
My hon. Friend will be pleased to learn that, as a consequence of the comprehensive spending review, my right hon. Friend the Chancellor of the Exchequer has increased the amount in anticipation of the reforms that we are bringing in. I am happy to work with my hon. Friend in future to ensure that we get this absolutely right.
James Murray (Ealing North) (Lab/Co-op)
As hon. Members across the House have made clear, the register to make public the overseas owners of property here in the UK is years overdue; it has been a crucial missing part of ridding our system of dirty money. Now that the Government have finally accepted it as a priority, there can be no further excuse for delay. Every day we waste now gives those backing and benefiting from Putin longer to hide their dirty money elsewhere. Will the Secretary of State follow our suggestion and commit to requiring all those owners of foreign property in the UK who need to disclose their details on the new register to do so by 31 March this year at the latest?
Kwasi Kwarteng
As I have said to the House, we are introducing legislation and, in the customary way, there will be plenty of scope for right hon. and hon. Members to move amendments and to tweak the legislation in any way they see fit.
Dame Diana Johnson (Kingston upon Hull North) (Lab)
The Secretary of State has been challenged several times this afternoon about the need for effective enforcement of any new legislation. What additional resources and support will be given to our law enforcement agencies to ensure that the legislation can be properly enforced?
Kwasi Kwarteng
My right hon. Friend the Minister for Security will address some of those issues in his Department. There is legislation currently under consideration that will give more powers to enforcement agencies. As far as my Department is concerned, we have campaigned successfully for more resources for Companies House so that it can become a much more effective watchdog than it currently is.
Stephen Flynn (Aberdeen South) (SNP)
There is something particularly brazen about a Secretary of State whose Government have overseen this very city being referred to as a laundromat saying in his statement that his Government are at the forefront of this agenda. Nothing could be further from the truth. I have a simple question for him on this topic: what financial penalties await those who seek to frustrate the register?
Kwasi Kwarteng
As I have said a couple of times, we did lead the way on SWIFT. I think that has been very effective in terms of the response of the German Government and my understanding is that they have shifted. I make no apology for defending London as a hub of capital, but we need to root out kleptocrats and dirty money.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
It is outrageous that the Government are only just introducing measures to deal with the £100 billion a year of illicit finance that this country, and especially the City, is awash with. Can the Secretary of State say how many of the 30 or so outstanding actions from the Government’s own 2019 to 2022 economic crime plan will be achieved by the actions he has identified today?
Kwasi Kwarteng
We are making very good progress on all those cases, but I bring to the hon. Lady’s attention the fact that the reform of Companies House that we are mooting is the first time in 200 years that it has been reformed in this way. I also highlight that we have led the way in the debate on SWIFT and on transparency in the international arena. Ministers from around the world are engaging with us directly on the effective measures we are bringing about.
Wera Hobhouse (Bath) (LD)
Can the Secretary of State confirm that any new legislation will make the beneficial ownership of all assets in the UK openly available for view and scrutiny, in a similar way to the Land Registry?
Kwasi Kwarteng
As I have said, we are bringing in a Bill and there will be plenty of scope to examine it and make amendments. I look forward to the hon. Lady’s engagement on that.
Andy Slaughter (Hammersmith) (Lab)
What the Secretary of State is proposing on a property register sounds very weak and very slow. There are billions in dirty money circulating on the London property market behind shell companies. By the time he has identified corrupt owners, the properties will probably have already been transferred. He also says nothing about seizing assets and imposing criminal penalties. Why is he not freezing assets and transfers now, pending disclosure?
Kwasi Kwarteng
The hon. Gentleman is experienced enough a parliamentarian to know that the idea of freezing assets is outside the scope of this legislation—indeed, it is outside the scope of my Department. The Government are looking at a range of other measures that may well reflect the concerns he has described.
Mr Deputy Speaker (Mr Nigel Evans)
I thank the Business Secretary for coming to the House, making his statement and answering questions from hon. Members for about three quarters of an hour.
Points of Order
Kwasi Kwarteng Excerpts(2 years, 8 months ago)
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Mr Deputy Speaker
I will just check with the people who know what is going on. It may well be that there will be a business statement either later today or very soon, in order to facilitate the business that the Secretary of State has announced.
The Secretary of State for Business, Energy and Industrial Strategy (Kwasi Kwarteng)
Further to that point of order, Mr Deputy Speaker. The Bill will be introduced but Second Reading will not happen tomorrow.
Kwasi Kwarteng
Further to that point of order, Mr Deputy Speaker. As my hon. Friend knows, there are three different stages to a Bill—introduction, publication and then Second Reading and further stages—so Second Reading will not be happening tomorrow.
Mr Deputy Speaker
Now I know what an umpire at Wimbledon feels like. I think we will leave it there and move on. Lords Amendments Time for conclusion of proceedings Nos. 2, 70, 72, 114 to 116, 141, 142, 3 to 57, 59, 60, 108 to 113, 117, 147, 153 and 154 Two hours after the commencement of proceedings on consideration of Lords Amendments Nos. 1, 58, 107, 61 to 69, 94 to 106, 121 to 140, 144, 145, 149 to 152 and 155 to 161 Four hours after the commencement of those proceedings Nos. 71, 74, 88, 73, 80 to 82, 87, 89, 146, 143, 75 to 79, 83 to 86, 90 to 93, 118 to 120 and 148 Six hours after the commencement of those proceedings
Police, Crime, Sentencing and Courts Bill: Carry-over Extension
Ordered,
That the period on the expiry of which proceedings on the Police, Crime, Sentencing and Courts Bill shall lapse in pursuance of paragraph (13) of Standing Order No. 80A shall be extended by 51 days until 28 April 2022.—(Kit Malthouse.)
Police, Crime, Sentencing and Courts Bill: Programme (No. 3)
Ordered,
That the following provisions shall apply to the Police, Crime, Sentencing and Courts Bill for the purpose of supplementing the Order of 16 March 2021 in the last Session of Parliament (Police, Crime, Sentencing and Courts Bill: Programme), as varied by the Order of 5 July 2021 in this Session (Police, Crime, Sentencing and Courts Bill: Programme (No. 2)):
Consideration of Lords Amendments
(1) Proceedings on consideration of Lords Amendments shall (so far as not previously concluded) be brought to a conclusion six hours after their commencement.
The proceedings—
(a) shall be taken in the order shown in the first column of the following Table, and
(b) shall (so far as not previously concluded) be brought to a conclusion at the times specified in the second column of the Table.
Subsequent stages
(3) Any further Message from the Lords may be considered forthwith without any Question being put.
(4) The proceedings on any further Message from the Lords shall (so far as not previously concluded) be brought to a conclusion one hour after their commencement.—(Kit Malthouse.)
Oral Answers to Questions
Kwasi Kwarteng Excerpts(2 years, 9 months ago)
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Christian Matheson (City of Chester) (Lab)
The Secretary of State for Business, Energy and Industrial Strategy (Kwasi Kwarteng)
The Government are committed to protecting jobs across the energy sector, which already employs over 700,000 people across the UK and is creating thousands of new jobs through our net-zero strategy.
Christian Matheson
I refer to my entry in the Register of Members’ Financial Interests as a member of Unite the union, which tells me that OVO Energy has a tangled web of companies into which £40 million has been salted away without any clear indication of what the money is or where it is coming from. Meanwhile, it is making 1,700 of its employees—a quarter of its workforce—redundant and its boss Stephen Fitzpatrick has said that they should keep warm by doing star jumps and that he is doing them a favour by sacking them because of the jobs market. Does the Secretary of State agree that it is about time that OVO stopped threatening to sack so many of its employees and opened up its books so that we can see where all the money is going?
Kwasi Kwarteng
I agree with the hon. Gentleman. I speak to the operators of energy suppliers the whole time, as does my right hon. Friend the Minister for Energy, Clean Growth and Climate Change, and we have had many concerns about the practices of some of these businesses and are very mindful of some of the accusations being made against OVO. I speak to Mr Fitzpatrick on a regular basis and I will absolutely pass on the hon. Gentleman’s concerns to Mr Fitzpatrick directly.
Sir Iain Duncan Smith (Chingford and Woodford Green) (Con)
The other day I noticed that the Government said they were going to help and encourage people to invest more in the gas industry and help to produce more, but then I heard a statement contradicting that from my right hon. Friend’s Department. Will my right hon. Friend clarify whether the Government are prepared to see more gas extracted and greater licences?
Kwasi Kwarteng
I and my right hon. Friend the Minister for Energy, Clean Growth and Climate Change have been very clear about the course we want to pursue. We do not believe it is the right thing simply to switch off the oil and gas sector. Unlike many Opposition Members, we do not believe in simply an extinction of the oil and gas sector; we think oil and gas is critical not only to energy resilience but to developing new technologies such as carbon capture and blue hydrogen production. We have maintained that position consistently for the nearly three years I have been a Minister in this Department.
Stephen Flynn (Aberdeen South) (SNP)
We have to admire the audacity of the Secretary of State in talking about protecting jobs in the energy industry when of course his Government have presided over the loss of some 35,000 jobs in Scotland’s North sea industry over recent years alone. It gets worse, because this is the same Government who opted not to fund carbon capture and underground storage in the north-east of Scotland, costing some 20,000 new jobs. Can the Secretary of State clarify why on earth the public should trust the Tories when it comes to jobs?
Kwasi Kwarteng
I will make three points about that. Acorn was an excellent project, and we want to see it developed very soon in the next wave, which we want to accelerate. There is an extraordinary arrogance in Members of the Scottish National party giving us lectures about energy when they are not committed to nuclear and are in bed with the Greens who simply want to flick the switch to turn off oil and gas in their own country. I am very happy to compare our record as job creators with the hon. Gentleman’s Extinction Rebellion approach to the North sea.
Stephen Flynn
I am afraid the Secretary of State does his reputation no good whatsoever by propagating such unfounded garbage. If he wants to talk about records, let us talk about records, because despite energy being reserved to this place, it is the Scottish Government who have delivered the £62 million energy transition fund; it is the Scottish Government who have just delivered £30 million to Aberdeen South harbour; it is the Scottish Government who have just delivered £15 million to the Aberdeen hydrogen hub; and of course it is the Scottish Government who have just delivered a £500 million just transition fund for the entire north-east of Scotland. After taking out some £375 billion from Scotland’s natural resources, when are the Tories going to give back?
Kwasi Kwarteng
I am not going to take any lectures from the hon. Gentleman about energy policy. His party is committed to a job-destroying coalition with the Greens, who want to switch the lights off the North sea. Everybody knows that; that is why investment is very difficult to attract, and our job is to militate against their Extinction Rebellion approach and encourage investment, as my right hon. Friend the Member for Chingford and Woodford Green (Sir Iain Duncan Smith) said, in our North sea.
Mark Pawsey (Rugby) (Con)
Jobs in the energy sector depend on an effective market, and that depends on consumers exercising their choice to change supplier, but switching fell by 73% in the year just gone compared with the previous year. What steps is the Secretary of State taking to ensure that we get back to an effective energy market?
Kwasi Kwarteng
There has been a critical issue with very high wholesale prices, which as I speak are about 200p a therm, whereas at the beginning of last year they were 50p a therm or lower; there has been a quadrupling of the price. The energy price cap has protected consumers, but we are talking to Ofgem all the time about how we can refine the cap to make it more sensitive to wholesale prices in the market.
Caroline Lucas (Brighton, Pavilion) (Green)
Today marks the start of International Energy Week, formerly International Petroleum Week. The Secretary of State was billed to open the event, and he will know that, despite the rebrand, the lead sponsors include fossil fuel giant BP, which is investing just 2.3% of annual capital expenditure into the jobs-rich green energy sector. When will the Government end their cosy relationship with the fossil fuel dinosaurs and replace the outdated duty to maximise economic recovery with a duty to minimise the extraction of North sea oil and gas and to maximise clean, green jobs instead?
Kwasi Kwarteng
The hon. Lady will know that we have committed to the “Net Zero Strategy”, which was lauded across the world as a world-beating document. She also knows that, as I have said repeatedly and my right hon. Friend the Minister for Energy, Clean Growth and Climate Change has also said, we are committed to a transition, not extinction. We have to work with fossil fuel companies and the industry to transition to a net zero future, and that is exactly what we are prepared to do.
Aaron Bell (Newcastle-under-Lyme) (Con)
Yvonne Fovargue (Makerfield) (Lab)
The Secretary of State for Business, Energy and Industrial Strategy (Kwasi Kwarteng)
We are working hard to design this scheme at pace. We acknowledge that delivering the bill reduction for this payment mechanism will require a special focus, and that is why we are engaging with consumer groups and Ofgem to work out how best to design the mechanism.
Yvonne Fovargue
People on prepayment meters will see their bills rise by £708, which is £46 more than for those who pay by direct debit. How will the Secretary of State ensure that people do not self-disconnect, leaving them without heat and means to cook? How will that be monitored? What thought has been given to private renters so that they do not lose out on the rebate due to the frequent tenancy changes in that sector?
Kwasi Kwarteng
We are constantly engaging with Citizens Advice, Ofgem and a huge range of stakeholders about how to protect the most vulnerable consumers. The package announced by my right hon. Friend the Chancellor only a couple of weeks ago includes £350, which goes halfway towards addressing the increase that the hon. Member for Makerfield (Yvonne Fovargue) describes. The warm home discount is being extended from 2 million people to 3 million people, and the uplift will be to £150.
Dr Alan Whitehead (Southampton, Test) (Lab)
The 4 million pre-payment meter customers in this country will be profoundly unimpressed by the Secretary of State’s answers this morning. Not only are they paying far more than the £693 increase on the price cap for customers with accounts, but it is uncertain whether they will have access to the £200 Government scheme to lend customers their own money, as they do not have accounts through which to do this. Indeed, many of them will miss out on the council tax rebate, too.
Would it not have been much more straightforward and fairer for prepayment meter customers if we had levied a windfall tax on companies that are profiting from high gas prices and provided those customers with a direct and non-refundable discount on their bills through their meter?
Kwasi Kwarteng
That is why we have £155 million that can be applied discretionally, particularly to protect these vulnerable consumers. Labour’s whole approach to energy security has been woeful. Labour destroyed the nuclear industry we had, without any progress, and it has created massive uncertainty in energy supply through its proposed windfall tax, which is not the way to produce energy supply that secures low-cost energy for our people.
Mr Virendra Sharma (Ealing, Southall) (Lab)
Darren Henry (Broxtowe) (Con)
The Secretary of State for Business, Energy and Industrial Strategy (Kwasi Kwarteng)
As we all know, rising energy bills are a cause for concern for people up and down this country, but we have stepped in to give families some breathing space, with our energy bills rebate and council tax discount. Our supply of gas is secure; unlike many European Union countries, we are not dependent on Russian gas. Much of our supply comes from British territorial waters and from reliable import partners, such as Norway. The UK is the fastest growing economy in the G7, unemployment is down to record low levels and wages continue to rise. There are challenges ahead, but Britain is bouncing back from the pandemic.
Darren Henry
Will the Secretary of State outline what steps the Department is taking to help low-income households in my constituency deal with the energy crisis?
Kwasi Kwarteng
My hon. Friend will appreciate the excellent statement made by my right hon. Friend the Chancellor of the Exchequer a couple of weeks ago. There was a range of measures totalling £9.1 billion, which included the council tax rebate for bands A to D and a £200 reduction in energy bills, totalling £350 to reduce bills. As I alluded to earlier, there was also an extension of the warm home discount.
Seema Malhotra (Feltham and Heston) (Lab/Co-op)
The Secretary of State omitted to mention that inflation is now at its highest level for 30 years. Energy costs are spiralling and the private sector has yet to recover to pre-pandemic levels. Does he acknowledge that the Chancellor’s very large rise in national insurance, coming in April, will make a bad situation for British businesses even worse?
Kwasi Kwarteng
I am delighted to hear Members from the Opposition parties so bullish about our economy, given that we are the fastest growing economy in the G7! The hon. Member for Sefton Central (Bill Esterson) mentioned Germany; I was very struck by the Bundesbank saying that Germany was facing recession, but we do not hear about that. We are creating more jobs, we have announced record investment and the Government’s plan is working in terms of bouncing back better from the pandemic.
Seema Malhotra
The Secretary of State did not answer the question, because he knows that this is a high-tax Government because they have created a low-growth economy. May I also raise his recent claim that fraud is not something that affects people day to day? Fraud is estimated to cost the British economy as much as £52 billion a year, so will he accept that he has got this wrong? Will he apologise to the 4.6 million people who are victims of fraud each year, and tell the House today what steps he will take to do better?
Kwasi Kwarteng
I will tell the hon. Lady exactly what steps I will take to do better. I will constantly and always fight against Labour’s socialism, its windfall tax, its inability to plan ahead and its total lack of remorse for the fact that it destroyed manufacturing jobs in the time it was in government.
David Johnston (Wantage) (Con)
Joanna Cherry (Edinburgh South West) (SNP)
Kwasi Kwarteng
I assure the hon. and learned Lady that we fully support the transition in the North sea transition deal and the oil and gas sector, whereas her party and the Greens are seeking to destroy it and destroy jobs. That is the fact that I want to raise here.
Antony Higginbotham (Burnley) (Con)
Luke Pollard (Plymouth, Sutton and Devonport) (Lab/Co-op)
Kwasi Kwarteng
The hon. Gentleman will appreciate that issues of settlement and asylum are ably dealt with by my right hon. Friend the Home Secretary. I engage with her constantly in respect of employment schemes for people who wish to come into this country.
Dr James Davies (Vale of Clwyd) (Con)
Martin Docherty-Hughes (West Dunbartonshire) (SNP)
The Government hate a monopoly, so can the Minister come to the Dispatch Box and tell my constituents who are former employees of Together Energy why his Government are using the energy crisis to create an energy monopoly by the big players, as opposed to small and medium-sized providers?
Kwasi Kwarteng
As I have maintained on a number of occasions, the hon. Gentleman’s party is a jobs destroyer in the energy sector, refusing to countenance any investment in the North sea, and in alliance with the Greens, who want to destroy jobs in the sector.
Storm Eunice
Kwasi Kwarteng Excerpts(2 years, 9 months ago)
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The Secretary of State for Business, Energy and Industrial Strategy (Kwasi Kwarteng)
With your permission, Madam Deputy Speaker, I would like to make a statement on the electricity disruptions as a result of Storm Eunice and set out exactly how we are working to ensure that power is restored to people’s homes as quickly as possible. Storm Eunice brought severe weather, including wind gusts of up to 122 mph. That is among the highest speeds ever recorded in England. The Met Office took the unprecedented step of issuing a double red weather warning for Friday. Ensuing hurricane-force winds have caused extensive damage to buildings and trees. They have also caused power outages and widespread travel delays. After a day of disruption caused by Storm Eunice on Friday, Storm Franklin made landfall last night. It must be remembered in this difficult time that four people have tragically lost their lives in incidents related to the storms. My thoughts, and I am sure the thoughts of the whole House, are with the families and friends who have lost loved ones.
The Met Office estimates further strong gusts today, though not on the same scale as Storm Eunice. Some people, particularly in the south and east of England, have been without power for more than 72 hours. I want to reassure them that we have dedicated teams of engineers working night and day to get them reconnected as soon as possible. Continuing poor weather conditions have hampered those efforts, but I am pleased to say that, as of now, over 98% of those affected by the storms—more than 1.4 million customers—have had their power supply restored. However, as of 4 o’clock today, just under 30,000 households are still without power.
Today, the Minister for Energy, Clean Growth and Climate Change, my right hon. Friend the Member for Chelsea and Fulham (Greg Hands), has been in Sevenoaks in Kent to see the impact of the storm and to observe repairs. This weekend, I spoke directly to leaders at Scottish and Southern Energy Networks, and today I had conversations with leading managers at UK Power Networks and Western Power Distribution. They have given me assurances that restoration is happening as quickly as possible. The UK has been particularly badly hit by storms this year, but I am pleased to say that overall, our network operators and our brave emergency services have learned lessons about how we can improve our response, and we will continue to learn those lessons.
When I commissioned the review into our response to Storm Arwen in November, I made it clear that the very long delays some people faced to be reconnected were unacceptable. I am pleased to say that, where practical, network operators have already implemented improvements to their procedures. Additionally, operators are sharing resources and ensuring that engineers are sent to the worst affected areas. Welfare provisions are in place for those who are most in need, particularly the vulnerable members of our communities. Network operators are engaged with local partners to ensure that people are being supported. Catering units are travelling to badly hit areas, and smaller welfare units are providing hot water and other facilities to people who are adversely affected. I am extremely grateful to the network operators and the emergency responders who have been working very hard to keep people as comfortable as possible. I am aware that during Storm Arwen, the people experiencing the worst effects of the devastation had difficulty in communicating, and that people are still experiencing issues today. However, I am pleased to say that if they call their network operator by dialling 105 from their mobile, they should get a speedy response. That action will automatically route them to the right operator based on their physical location.
I believe this is the first time that three named storms have come in such quick succession, day after day, since the storm-naming convention was introduced a little less than a decade ago. This is a difficult time for many, but I have been reassured that operators are working extremely hard to make sure people are reconnected as quickly as possible, and in the next couple of days at the latest. My Department and I will continue to provide support and apply pressure, where needed, to ensure people are reconnected in a timely way.
Edward Miliband (Doncaster North) (Lab)
I thank the Secretary of State for his statement. I join him in sending my condolences to the families of the victims who tragically died during Storm Eunice, and I express my sympathy to all those who have been affected by the storms. Many families have endured real hardship in these past few days, being without power for an extended period. I also know, including from my own constituency, that many others are facing an anxious time with the threat of flooding from Storm Franklin. My thoughts are with them, too.
I also join the Secretary of State in praising all the engineers, network staff and emergency service staff who have done such an important job in incredibly difficult circumstances over the past few days, as well as local authorities, which have also played an important role in the emergency response.
On the substance of the statement, first, the most important priority is to reconnect those who are still without power. I welcome what the Secretary of State said about people being reconnected by Wednesday at the latest, and I trust that he will, as he says, hold all the companies to account in mobilising all their resources across the country to make sure this happens.
Secondly, on vulnerable households, in its interim review of the response to Storm Arwen last November, BEIS noted confusion of roles and responsibilities for vulnerable customers and communities that were cut off. The Secretary of State says the arrangements are working better, and I am glad that lessons have been learned. Can he tell us how he is monitoring that and is assured of it?
Thirdly, there were unacceptable delays in the networks’ compensation payments after Storm Arwen, with 10,000 customers having not been compensated six weeks after the storm. What will the Secretary of State do to ensure speedy payments on this occasion?
Fourthly, these events raise longer-term issues. Scientists tell us that we cannot necessarily attribute the ferocity of Storm Eunice to climate change, but we know that we face more intense and frequent extreme weather as a result of the climate crisis, so again it throws up the question of our resilience and security as a country.
After the storms in 2013, there was a clear sense of the vulnerabilities of the overhead power network and agreement that the energy networks would act. In its interim report on Storm Arwen this month, Ofgem said again that it will review the costs and benefits of the resilience of overhead lines, and the Climate Change Committee has highlighted climate risks to the power system. Does the Secretary of State agree that events this winter demonstrate the need to give greater priority to and, indeed, investment in the resilience of our power network?
More generally, the Climate Change Committee said in its five-year progress report last summer that adaptation is
“under-resourced, underfunded and often ignored.”
Does the Secretary of State agree that these storms are yet another wake-up call about the need for a proper national resilience plan that covers our power lines, flood defences and critical infrastructure?
The truth is that, as a country, we face significant threats from extreme weather in the years ahead. Today we should acknowledge the important work done in response to this crisis, but the lesson has been demonstrated yet again that we owe people the long-term planning and investment to give them all the protection we can.
Kwasi Kwarteng
The right hon. Gentleman and other hon. Members will be surprised that I am in a measure of agreement with him. He is absolutely right to warn that extreme weather events could be—I am not saying they will be—a feature of our landscape and climate. As a constituency MP, I remember the floods of 2013-14 and the devastation they caused.
The right hon. Gentleman will appreciate that I launched a review of Storm Arwen, and we have learned many lessons from the interim report. We are committed to conversing with colleagues across Government on a more integrated plan. I am grateful to him for highlighting the extreme weather conditions that many of us may well face in the future.
Huw Merriman (Bexhill and Battle) (Con)
I welcome the Secretary of State’s statement. Thousands of my constituents and others across East Sussex remain not only without electricity but without water. I recognise this is one of the worst storms in decades, and I also recognise the huge amount of work delivered on the ground by the engineers at UK Power Networks and South East Water to try to fix this, but our water supply requires the electricity system to work and it is not good enough that there are no back-up generators in place for the water to be pumped into the hills and other areas across my constituency. May I meet the Secretary of State to discuss how we can have better resilience, with the water companies having their own back-up generators so that people are not without water when the electricity goes down?
Kwasi Kwarteng
My hon. Friend makes a fair point, and he is right to point out the intolerable difficulties that people face with regard to the water supply. Colleagues in the Department for Environment, Food and Rural Affairs and officials in BEIS are very engaged with this, and I would be happy to speak to him at a convenient time.
Gavin Newlands (Paisley and Renfrewshire North) (SNP)
Following Storms Arwen and Barra in November and December, and Storms Malik and Corrie in late January, we have now had three named storms in a week: Dudley, Eunice and Franklin. There will potentially be a fourth named storm in eight days, with Storm Gladys later this week. It seems this winter will not go quietly.
Naming storms sometimes dulls their impact, but the truth is that these storms’ heavy rain and snowfall, combined with record-breaking winds, have caused huge damage to buildings, environmental destruction and, sadly, the loss of four lives to uprooted trees, flying debris and flooding. My sympathies are with all those affected.
I join the shadow Secretary of State in thanking all the engineers who restored power to homes across the country and, indeed, the Network Rail engineers who restored the track and kept us moving. I am very sympathetic to his points about compensation payments.
Climate change has seen an increased frequency of storms, with Storm Franklin currently giving rise to flood warnings in parts of Scotland, England, Wales and Northern Ireland. Will the Secretary of State confirm that he will do all he can to ensure that his Government keep their climate pledges and the large spending commitments that go with them? Will he ignore his Back Benchers who seem to be obsessed with the UK reneging on its agreements? Following COP26, what are we doing to discuss future international responses to worldwide extreme weather?
Finally, Eunice left about 1.4 million homes without power, and Storm Arwen affected more than 1 million homes, including thousands in Aberdeenshire that were without power for well over a week. What short-term and long-term plans are being considered by the UK Government to strengthen our energy resilience and infrastructure? Crucially, what is being done to ensure we do not see a repeat of last year, when thousands were without power for so long?
Kwasi Kwarteng
The hon. Gentleman raises a number of fair points. On the net zero challenge, he will be pleased to know that the Chancellor’s latest comprehensive spending review at the end of last year had a considerable uplift in the capital spend dedicated to net zero. He will also appreciate that, for the first time ever, we had a ringfence for tidal stream. The Government are doing lots of things to pursue renewables and to decarbonise our power system.
On resilience, the hon. Gentleman will know that I commissioned a review of Storm Arwen, and there is an interim report. I am sure he and I will be able to discuss the full report in due course.
Robbie Moore (Keighley) (Con)
Storms Eunice and Franklin continue to have devastating impacts across Keighley and Ilkley, with several homes still flooded and a landslide at the rear of a property on Westlea Avenue in Riddlesden which has forced several constituents out of their homes, with one property left at structural risk. My heart goes out to all those impacted. Can my right hon. Friend assure me that emergency support will be made available to all those affected, and particularly to those who face the critical situation of being forced out of their homes for their own safety?
Kwasi Kwarteng
As I suggested in the statement, my hon. Friend will be pleased to know that we are working very closely with the distribution network operators to ensure adequate physical support. There is also a compensation scheme, which is operated with Ofgem. I personally raised the amount that people could be compensated in the aftermath of Storm Arwen, and we will stick to that this time. There is plenty of support for his constituents.
Wayne David (Caerphilly) (Lab)
Last week, we had a red alert for much of south Wales. The Minister has said that there have been a number of discussions with electricity companies, including Western Power Distribution, but can he tell the House what discussion has taken place with the Welsh Government?
Kwasi Kwarteng
We speak to officials in the devolved Administrations on a regular basis. I spoke only to WPD and the distribution network companies, but our officials engage with DA colleagues all the time.
Theo Clarke (Stafford) (Con)
Following this week’s storms, yet again my constituents have been hit by flooding in their homes, and Staffordshire businesses have been disrupted. Will my right hon. Friend work with me to create a flood control centre, based in Stafford, which will provide 24-hour local assistance to my constituents who are affected by flooding?
Kwasi Kwarteng
I reassure my hon. Friend that as a consequence of the 2013-14 floods, we established and made much more robust local resilience forums and flood defence networks. I would be happy to discuss with her schemes that may be applied to her constituency, particularly as regards a centre in Stafford.
Stephanie Peacock (Barnsley East) (Lab)
Flood warnings are in place across South Yorkshire and this is a worrying time for many in Barnsley, especially those without adequate insurance. I acknowledge the work of Flood Re, but, sadly, for many this is still not affordable. What work are the Government doing with insurance companies to make sure that everyone can get the insurance they deserve?
Kwasi Kwarteng
Again, I refer to the 2013-14 period. I know that a number of people here were not in the House at that time, but this was precisely the issue that came up then and we have tried to engage with Flood Re. It has responded more effectively and we will see what more can be done in this area.
Mark Pritchard (The Wrekin) (Con)
Shropshire has seen three storms in one week, with massive flooding along the River Severn, displaced flooding and a huge amount of storm damage. Often in these circumstances the actions or inactions of insurance companies, in supporting businesses that have been struggling after the pandemic and are now being flooded and people who are being driven out of their homes, compound the trauma that so many people suffer. Will the Secretary of State ensure that his Department deals with the Association of British Insurers and others to ensure speedy payouts? [Interruption.]
Kwasi Kwarteng
As the Under-Secretary of State for Environment, Food and Rural Affairs, my hon. Friend the Member for Taunton Deane (Rebecca Pow), reminds me, the Government and her Department are looking at Flood Re and how it responds to these very affecting natural disasters. However, I would be happy to discuss with my right hon. Friend the specific issues of business resilience and support that arise in his constituency.
Helen Morgan (North Shropshire) (LD)
The aftermath of Storm Eunice and Storm Franklin has taught us what many in Shropshire and across the rest of the country already knew: whenever a storm hits, the Government do not seem to be prepared to support the thousands of people in rural areas who are really badly affected. This is the third year in a row that villages along the Severn and Vyrnwy rivers have faced record or near-record levels of flooding—this includes the records being breached just a few hours ago in my constituency. People have been left cut off, often without power, water and, in some cases, accommodation. In order to help those impacted by these winter storms, these communities also need the food, water, emergency accommodation and electricity generators that have been mentioned while those services are restored. So will the Government commit to providing that assistance to people in the aftermath of these storms and to working with the Environment Agency to deal with the catchment areas in the upper Severn?
Kwasi Kwarteng
Perhaps belatedly, I welcome the hon. Lady to her position; I believe this is the first time I have encountered her in BEIS questions or statements. On the substance of her remarks, we engage readily with colleagues across the House who represent Shropshire seats. We have looked into how we can be more resilient against flooding in the Severn area, and my colleagues in DEFRA are very focused on this issue. I would be happy to engage with her on the business side of this resilience package.
Laura Trott (Sevenoaks) (Con)
First, I pay tribute to the work of UK Power Networks, which has been reconnecting people 24/7 over the weekend; they got me at 4 am on Saturday, for which I was very grateful. However, certain areas, such as Knockholt and Swanley Village in my constituency, have been subject to a number of power cuts over the year and have been difficult to reconnect this time because of out-of-date infrastructure. Will we make sure that they are prioritised in the wash-up of this, when we look at how we strengthen our infrastructure overall?
Kwasi Kwarteng
I am pleased to tell my hon. Friend that we have engaged very actively with UKPN; I spoke to the chief executive officer only this morning, and I understand that the Minister for Energy, Clean Growth and Climate Change, my right hon. Friend the Member for Chelsea and Fulham (Greg Hands), was very near my hon. Friend’s constituency, if not in it, earlier this morning. This issue is something we are very focused on; we want to engage with her to build up local resilience and, crucially, to work with the distributors of power.
Karin Smyth (Bristol South) (Lab)
I join the Secretary of State in thanking local people in Bristol and, in particular, Bristol City Council for getting meals to vulnerable people during the difficult last weekend, and Great Western Railway for trying to keep things running between Bristol and London. May I press him a little on the request from one of my colleagues for him to join the flood preparedness taskforce, working with local leaders, and ask what moves he is making to work with local leaders in Bristol and the further south-west to make us better prepared for the future?
Kwasi Kwarteng
On flooding, I know from my own experience as a constituency MP that a huge amount of work is being done at the Environment Agency level and co-ordinated by my right hon. and hon. Friends in DEFRA. They engage closely with flooded areas, and particularly vulnerable areas. The Government are always looking to reinforce our provision and help, and to learn lessons from events such as Storm Arwen. We are learning lessons and have learned lessons, but there is more progress to be made.
Craig Whittaker (Calder Valley) (Con)
As my right hon. Friend has said, we have seen unprecedented levels of power outages because of the consistent levels of storms in the past few months. He also mentioned the review after Storm Arwen, but will he say what steps the power companies are taking to ensure that all replacement infrastructure—that is happening as we speak—is much more resilient than that which it is replacing, so that we do not see the same issues in future storms?
Kwasi Kwarteng
My hon. Friend raises an important point. It is heartening to see him re-engaging with the House in such a dynamic way. He was a fabulous Whip—firm but gentle—and it is good to see him engaging on this issue. He will know that we engage with the power companies all the time; I have spoken to these people, including the CEOs, and they have given certain commitments. This time, they have responded very quickly. We had issues last time, but they have learnt the lessons from that. I am very happy to talk to him about how we are putting their feet to the fire on their promises and making sure that they can deliver on those. They made certain commitments this week and I am looking forward to seeing them making sure that they deliver on them.
Mick Whitley (Birkenhead) (Lab)
May I add my condolences about the people who died during these storms? Yesterday, hundreds of people in the north-west were forced to flee their homes as rivers burst their banks, and thousands more households remain without heating or electricity. Although Storms Eunice and Franklin may not be directly linked to global heating, there is absolutely no doubt that the impact of these kinds of extreme weather events will become all the more destructive as the climate crisis intensifies. Yet Tory Back Benchers are still plotting to deal a hammer blow to hard-won progress on climate, lining up the net zero agenda as the latest target in their never-ending culture war. Does the Secretary of State agree that recent days have demonstrated the importance of not only investing more in climate resilience measures, but going further and faster in decarbonising our economy?
Kwasi Kwarteng
The hon. Gentleman will know that I have nothing but good will to all my colleagues on the Government Benches, and we have a healthy debate about many matters of public policy. He will also know that we are 100% committed to the net zero strategy, which I was told by someone who is not even a resident of the UK was a world-beating document. I have announced that we have increased our financial commitment to net zero more than any other Government, and we want to work with everyone across the House to fight the challenge of climate change.
Jason McCartney (Colne Valley) (Con)
Flash flooding caused chaos and havoc throughout my Colne Valley constituency over the weekend: on Waingate in Linthwaite, fast-flowing water was going through people’s homes; Gynn Lane in Honley was like a river; and businesses were flooded in Holmfirth. I really thank the Kirklees Council staff who were updating me on the situation until late last night—Councillor Donna Bellamy and many more were on site and kept me updated. Does the Secretary of State agree that as well as resilience in our electricity network, we need resilience in our drainage infrastructure? We need to clear culverts, gullies and drains of debris so that when we get such heavy rainfall, we do not see flash flooding.
Kwasi Kwarteng
That is a crucial point. The effects of the storm clearly operate right across our economy. It is not just a power-distribution issue; flooding is a huge challenge. As a constituency MP with a Thames-side seat, I remember the flooding in 2013 and 2014. The Environment Agency and the water companies—Thames Water in my case—all have a responsibility to keep infrastructure in as fit and ready a state as possible, so that in future we have more resilience against such storms.
Rachael Maskell (York Central) (Lab/Co-op)
Right now, York is flooding. We are particularly concerned about the Clementhorpe area and the area around Tower Street, where there are lots of businesses that are not able to benefit from the Flood Re scheme. Will the Secretary of State go back and look at insurance for businesses so that they do not perpetually lose out year after year?
Kwasi Kwarteng
The Under-Secretary of State for Environment, Food and Rural Affairs, my hon. Friend the Member for Taunton Deane (Rebecca Pow), assures me that she and her team and colleagues in DEFRA are willing and eager to engage with the hon. Lady. My understanding is that the Foss barrier is working and has not been breached yet. I am hopeful that my DEFRA colleagues can engage with the hon. Lady on this extremely important issue.
David Johnston (Wantage) (Con)
Jack Bristow from Sutton Courtenay in my constituency is one of the four people who lost their lives in Storm Eunice. He had been using his truck to help with the aftermath of the storm down in Hampshire when a tree fell on it. He was only 23 years old and had a one-year-old son. Will my right hon. Friend join me in paying tribute to Jack and in paying our condolences to his mother Teresa, to his partner Courtney and to all those who knew and loved him?
Kwasi Kwarteng
I am very saddened to hear about the fate of my hon. Friend’s all too young constituent. These tragic events remind us of the real human cost of climate change and extreme weather eventualities. I remember that in my own constituency eight years ago, in 2014, a little eight-year-old boy, Zane Gbangbola, died. This is really the first time I have been able to pay tribute to him. I fully understand the pain and anguish that Jack’s family are having to live with.
Jim Shannon (Strangford) (DUP)
I thank the Secretary of State for his diligence. Tens of thousands of people across Northern Ireland have lost electricity, including some 500 people in one village in my Strangford constituency. Will the Secretary of State confirm whether additional funding will filter through the Barnett consequentials to coastal constituencies in particular? My Strangford constituency’s battle with coastal erosion has seen increased issues with coastal roads. What discussions has he had with the Deputy Minister at the Northern Ireland Assembly to ensure that all parts of this great United Kingdom of Great Britain and Northern Ireland will have help when they need it and that emergency support will be on hand as soon as possible?
Kwasi Kwarteng
The hon. Gentleman will know that Northern Ireland gets its fair share of support through the Barnett formula. On the specifics of climate change and erosion, I would be happy to meet him with DEFRA colleagues. I visited Northern Ireland only two months ago to talk about the need for more resilient energy and to decarbonise and rely more on renewables. Northern Ireland has a great story to tell about our future battle against climate change and I am happy to talk to the hon. Gentleman about it.
Contracts for Difference: Frequency of Allocation Rounds
Kwasi Kwarteng Excerpts(2 years, 9 months ago)
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The Secretary of State for Business, Energy and Industrial Strategy (Kwasi Kwarteng)
Since 2014 the contracts for difference scheme has been at the heart of our efforts to diversify and decarbonise our power system. Since 2010 we have increased the percentage of power generated from renewables from 7% to 43%, creating thousands of high-skilled jobs and bringing new industries to our former industrial heartlands.
To date contracts for difference has awarded contracts totalling almost 16GW of new renewable electricity capacity across multiple technologies. Since the first competitive allocation round (AR1), it has contributed to a more than 60% reduction in the per unit price of offshore wind, with substantial benefits for consumers. We opened our latest allocation round (AR4) on 13 December 2021. It is our largest yet, with an ambition to procure more new generating capacity than the last three rounds combined.
We want to further accelerate our low carbon power generation, making the UK less reliant on volatile fossil fuels and creating more home-grown power. This will help us to deliver a fully decarbonised electricity system by 2035.
To do this we set out an ambition to accelerate the deployment of low-cost renewable generation by undertaking a review of the frequency of the contracts for difference allocation rounds. The review of allocation round frequency has now concluded.
I have decided to increase the frequency of the allocation rounds to every year, from around every two years as it is currently. The next allocation round, AR5, will be brought forward to March 2023 and it is our intention that the subsequent allocation rounds will be held every 12 months in the following years.
In parallel, we have recently opened a consultation on changes to make AR5 more effective and forward-looking, particularly on the application process for supply chain plans.
Our review suggests that the move to more frequent contracts for difference allocation rounds is overwhelmingly supported by industry. Increasing the frequency of allocation rounds will help to encourage low carbon electricity generation, which may also encourage investment in supply chains, and benefit the UK in the longer term not least by protecting consumers from potentially volatile global markets.
These more frequent rounds will also support the delivery of those renewable technologies, such as onshore wind, offshore wind, and solar PV, which are key to decarbonising the power sector, creating jobs and bringing even more investment to our former industrial heartlands. This will sit alongside the Government’s commitment to bring forward another large-scale nuclear power plant this Parliament.
The contracts for difference scheme has been successful in deploying low-carbon generation and reducing the cost of capital for renewable technologies. As more renewables are added to the system, we will continue to consider how the scheme could evolve over the longer term to ensure it reflects the impact of renewables on the wider system, including total system costs.
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Advanced Research and Invention Agency
Kwasi Kwarteng Excerpts(2 years, 9 months ago)
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The Secretary of State for Business, Energy and Industrial Strategy (Kwasi Kwarteng)
The leadership of the Advanced Research and Invention Agency (ARIA) has been the subject of much Parliamentary interest. Today, I am delighted to update the House that I have appointed Dr Peter Highnam as the agency’s first Chief Executive Officer and re-commenced the search for ARIA’s first Chair.
ARIA, the Government’s new science funding body, will focus solely on finding and funding ground-breaking research projects with the potential to transform the lives of people in the UK, and around the world.
This announcement comes at an opportune moment, as the legislation to create ARIA enters the final stages of its passage through Parliament, ahead of the agency becoming fully operational later this year.
Dr Peter Highnam will play a pivotal role in ARIA’s formative years by defining the agency’s vision, recruiting its first programme managers, and establishing its organisational culture. He will take post on 3 May 2022 for a fixed term of five years.
Dr Peter Highnam brings a wealth of experience to the role, as he has served as Deputy Director at the Defence Advanced Research Projects Agency (DARPA) since February 2018, and as acting director on two occasions. He has previously held positions as the Director of Research at the National Geospatial-Intelligence Agency, and as Director of the Intelligence Advanced Research Projects Activity. Born in the UK, Dr Peter Highnam holds a PhD in Computer Science from Carnegie Mellon University. He obtained his master’s degree at the University of Bristol, and his undergraduate degree at the University of Manchester.
The appointment has been made in accordance with the Governance Code on Public Appointments, following a fair and open competition overseen by an Advisory Assessment Panel.
To support Dr Peter Highnam, I am re-launching the campaign to find ARIA’s first Chair. Once appointed, ARIA’s Chair will have the unique opportunity to be a trusted counsel for Dr Peter Highnam as he leads the agency through its fledgling years.
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