Regulation of Business, and Water, and Water Energy and Telecoms

Kwasi Kwarteng Excerpts

Monday 31st January 2022 Written Statements

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

The UK has left the European Union. We have regained sovereign control over our laws, borders and money. For the first time in half a century, we have the freedom to conceive and implement rules that put the UK first. This means that now is the time to think boldly about how we regulate in order to modernise our approach, unlock cutting-edge technologies, ease burdens and cut red tape, and boost competition.

In July 2021 I jointly launched the consultation on “Reforming the framework for better regulation”, to capitalise on the regulatory freedoms provided by leaving the European Union. In the consultation I set out that the Government are committed to a regulatory system that is smart, proportionate and considers the needs of business. The system Government use to manage the flow of regulation and understand its impacts is key to delivering this commitment and plays an important role in helping to drive behaviour and approaches to policy making across government.

An overwhelming majority of responses to the consultation welcomed some degree of reform. A full summary of responses to the consultation will be published today, alongside the Government’s policy document, “The Benefits of Brexit”.

Our proposed reforms to the framework for better regulation are underpinned by four core policy changes, which aim to improve and control the flow of regulation across government, and assess its value:

Adopting a greater emphasis on proportionality, to ensure that we regulate in a way that focuses on allowing businesses to grow, while giving greater flexibility to try innovative new approaches.

Ensuring that we are making the best use of alternatives to regulation by introducing an earlier scrutiny point at which departments will be asked to justify their decision to regulate.

Improving how we evaluate regulation, including post-implementation reviews.

Improving how we measure the overall impact of regulation, including consideration of a more holistic approach and the removal of the Business Impact Target (BIT) in its current form.

While these reforms represent a streamlining of process and a change of emphasis, they do not undermine or reduce the requirements for Departments to produce options appraisals and quantified impacts in accordance with the Green Book.

The reforms proposed to the framework for better regulation will not take place at once. There will be a transitional year, with one final BIT report, while we bring forward legislation to make changes to the Small Business, Enterprise and Employment Act 2015. BEIS will use that time to agree with Departments the details of metrics, targets and exemptions.

Alongside these reforms, today I will publish a policy paper on the future of economic regulation of water, energy, and telecoms within the UK. This follows a commitment in the National Infrastructure Strategy for Government to produce an overarching policy paper in this area.

The policy paper will set out Government’s vision to incentivise increased investment needed to create world class utilities infrastructure that helps protect consumers, promote economic growth and sector resilience, while meeting our ambitious environmental targets. The paper covers the following areas:

How the Government intend to ensure that the regulators’ duties will allow them to meet these systemic challenges, conducting a review of duties in 2022;

how the Government will provide strategic clarity on our long-term aims for these sectors, publishing a letter of strategic guidance to the CEOs of Ofwat, Ofgem, and Ofcom;

how competition for strategic investment opportunities can be enhanced for the long-term benefit of consumers and investors; and

how transparency and consistency in key processes can be improved; in particular seeking appropriate alignment on economical calculations and the regulatory appeals system.

This policy paper is the first step to updating our model of economic regulation. In 2022, we will be launching a consultation setting out more detail on a package of measures to ensure the UK model of economic regulation fits the needs of the modern age.

I will place a copy of the future of economic regulation of water, energy and telecoms within the UK paper in the Libraries of the House.

In putting all these reforms into practice, the Government and our independent regulators must always remember that the way we make and enforce regulation makes a tangible difference to people. Our job is to help people and businesses to achieve better outcomes for themselves. That was what taking back control for the UK was about.

I will place a copy of the “Benefits of Brexit” paper in the Libraries of the House.

[HCWS571]

Sizewell C: Update on Negotiations with EDF

Kwasi Kwarteng Excerpts

Thursday 27th January 2022 Written Statements

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

The UK was the first major economy to legislate for a target of net zero greenhouse gas emissions by 2050. As set out in the net zero strategy and the Prime Minister’s 10-point plan for a green industrial revolution, nuclear will continue to be an important and reliable source of clean electricity as we strive to decarbonise the UK economy. By 2050, we expect that the electricity system will be built on a foundation of renewables such as wind and solar, but these will need to be bolstered by reliable low-carbon power. The UK Government recognise that large-scale nuclear is the only proven technology available to provide continuous, low-carbon electricity at scale. Ministers are therefore firmly committed to deploying new nuclear in order to strengthen Britain’s energy security and reduce our exposure to volatile global gas prices, provided there is clear value for money for consumers and taxpayers.

In 2016 we took the decision to enter into a contract for difference over Hinkley Point C in Somerset, which is currently under construction and expected to begin generating power by 2026, when it will start providing 3.2 GW of electricity. However, with five of the UK’s six nuclear stations scheduled to close by 2028, the Government have made a commitment to bring a further large-scale nuclear project to a final investment decision during this Parliament, subject to value for money and all relevant approvals. To facilitate this, we have introduced legislation for a new financing mechanism, the regulated asset base (RAB) model, through the Nuclear Energy (Financing) Bill. It is estimated that RAB could lower the cost of each new large-scale nuclear power project by more than £30 billion, compared to the existing contracts for difference model. The RAB model is also expected to reduce Britain’s reliance on overseas developers for finance by substantially widening the pool of private investors to include British pension funds, insurers and other institutional investors from like-minded countries.

After Hinkley Point C, the Sizewell C project in Suffolk is the most advanced nuclear project in the UK. As a replica of Hinkley Point, Sizewell offers a high level of design maturity and an identified supply chain. The company developing the project has applied for both a development consent order and nuclear site licence and believes it can begin construction during this Parliament. If built, the new plant could deliver around 7% of the UK’s current electricity needs (enough to power the equivalent of around 6 million homes) and create tens of thousands of jobs across the country. New nuclear is not only at the heart of our plans to ensure greater energy independence, but to drive economic growth.

The Government entered into Sizewell C project discussions in January 2021. Following significant investment from EDF, the project requires additional financial support to further mature it to a point where other private investors (and, subject to value for money considerations and relevant approvals, the Government) could consider a direct investment in the project development company. Sufficient early development funding prior to the construction of major projects is a key determinant of subsequent project performance, and to this end the Prime Minister’s 10-point plan committed in 2020 to provide nuclear development funding for this purpose.

I am pleased to announce that I will today enter into an option agreement with EDF Energy Holdings Ltd, which provides Government with an option over the land at Sizewell C and conditionally over the shares in the development company in exchange for an option fee of £100 million. EDF Energy Holdings Ltd will invest that £100 million in further developing the Sizewell C electricity infrastructure project. Should the project reach a successful final investment decision, subject to value for money and all relevant approvals, the Government would recover this funding together with a financing return, either through an equity stake in the project, or in cash.

This agreement represents an important milestone for both the Government’s nuclear strategy and the project, which has the potential to significantly contribute to the UK’s decarbonisation and security of supply objectives. However, I am clear that this agreement does not represent a Government decision that the Sizewell C project will progress. Neither is it an indication that similar commercial arrangements would necessarily be desirable for other prospective nuclear projects. Decisions on the Sizewell C Project will be dependent on decisions in respect of planning and designation under the Nuclear Energy (Financing) Bill if passed into law.

Noting that the future of the Sizewell C project is not confirmed, the agreement the Government have reached with EDF provides the taxpayer with downside protection should the project not proceed. In return for the £100 million, the Government will be granted an option on the Sizewell site and conditionally over the shares in certain circumstances of the development company. In the event the negotiations with EDF do not successfully result in a positive investment decision satisfactory to all parties, then subject to certain conditions, taxpayers would be entitled to seek acquisition of either EDF’s shares in the Sizewell C development company or the site itself, or if neither can be delivered by EDF, the taxpayer would be entitled to a reimbursement of the £100 million with a financing return. This in turn would provide Government with the possibility of proceeding with alternative nuclear or low-carbon infrastructure, and therefore support the realisation of our net zero objectives.

Today’s announcement further demonstrates our commitment to energy security, investing in our thriving nuclear sector and creating thousands of jobs.

[HCWS562]

Oral Answers to Questions

Kwasi Kwarteng Excerpts

Tuesday 11th January 2022 Commons Chamber

[Damien Moore (Southport) (Con)]

1. What steps he is taking to improve productivity levels in the UK.

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

As we recover from the pandemic, the Government are seizing the opportunity to drive up productivity. We seek to level up the private sector in all parts of the UK.

[Damien Moore]

I recently visited the Financial Planning Corporation in my constituency, whose impressive productivity has enabled it to expand its business. Will the Secretary of State confirm that if bills and taxes go up in the spring, local businesses will continue to operate in a productive environment, free from bureaucracy and unnecessary red tape?

[Kwasi Kwarteng]

Absolutely. I know that my hon. Friend is doing an excellent job of representing his constituents and making sure that the Government deliver on the levelling-up agenda.

[Mr Speaker]

I call the shadow Minister.

[Bill Esterson (Sefton Central) (Lab)]

Buying British is a great way for the Government to boost productivity, so why are they buying so many covid tests from China? Many of those tests have only temporary approval from the Medicines and Healthcare products Regulatory Agency and are now banned in the United States. In contrast, the MHRA is delaying approval for British test manufacturers, who have approval and can sell around the world but not here. Surely the Secretary of State is not going to tell us that the MHRA has a different set of standards from those in all other countries. When will he get behind British manufacturers who want to play their part in fixing the shortage of covid tests?

[Kwasi Kwarteng]

The hon. Gentleman will know that the UK has led the world in life sciences manufacturing. I am delighted that the Under-Secretary of State, my hon. Friend the Member for Mid Norfolk (George Freeman), has taken up the role of life sciences Minister. He has engaged with our manufacturing base, and people look to the UK as an outstanding example of a world-leading life sciences manufacturing nation.

--- Later in debate ---

[Laura Trott (Sevenoaks) (Con)]

7. What steps he is taking to support the transition to net zero carbon emissions for homes not connected to the mains gas grid.

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

I would like to reassure my hon. Friend that if we look back at where we were this time last year, we came out with the heat and buildings strategy, which directly answered this question, and also a very generous comprehensive spending review settlement.

[Laura Trott]

I thank the Secretary of State for his answer. In Sevenoaks we are keen to play our part in achieving net zero, but many of my constituents in more rural areas are worried about the costs and feasibility of replacing their oil boilers as they are phased out. Can the Secretary of State provide reassurances to them, and all in a similar position, that safeguards will be put in place to ensure that alternatives are affordable and practical?

[Kwasi Kwarteng]

Very specifically in regard to her question, my hon. Friend will know that there is a £450 million boiler upgrade scheme, which was outlined in the CSR, that will provide up-front capital grants for the installation of low-carbon heating systems. She will also be aware that for lower-income households we have a £1.1 billion home upgrade grant, which will upgrade energy efficiency and increase low-carbon heating of non-gas homes across the country.

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

I am sure that the Secretary of State is aware that off-grid customers’ gas and oil supplies are not covered by the price cap, and that they will therefore experience even higher price fuel price increases this spring than the £600 or so now predicted for on-grid customers. Is the Secretary of State intending to provide any special assistance to off-grid customers, or is he going to let them stew alongside their on-grid neighbours, as the Government seem happy to do at the moment?

[Kwasi Kwarteng]

I think that is a complete misrepresentation of all the work that the Government have done to help customers. There are the winter fuel payments, as the hon Gentleman well knows, and £300 for 8 million pensioners is worth £2 billion. We have the warm home discount, we have cold weather payments. We have a full range of measures that will help off-grid customers in a difficult time.

[Simon Fell (Barrow and Furness) (Con)]

8. What support his Department is providing to life sciences clusters across the UK.

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[Mike Amesbury (Weaver Vale) (Lab)]

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

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

Before we proceed, I think it is fitting and right to say that I was desperately sad to hear that the hon. Member for Erdington had passed away last week. It is particularly ironic in that he was on the original draft of today’s Order Paper, fighting for his constituents as a dedicated public servant who always took a keen interest in the work of our Department.

I know that households and businesses are deeply concerned about the effect of rising energy prices across the next few months. We already provide £4.2 billion-worth of support for the most vulnerable. I am working closely, as many people know, with energy companies, Ofgem and ministerial colleagues across the Government to mitigate the impact of further price rises.

[Mike Amesbury]

May I echo the sentiments in regards to my late good friend and fellow trade unionist, the Member for Erdington?

Energy-intensive industries such as Tata Chemicals in my patch, and the Daresbury labs on the Sci-Tech site that the Secretary of State will be familiar with, need support and they need it now. Why does he not swallow his pride, support the windfall tax that Labour is proposing, plus the VAT measures, and help companies such as Tata and indeed British Steel?

[Kwasi Kwarteng]

My understanding of the Labour proposal—I might have got it wrong—was that the windfall tax would not be directed to companies; it was, as I read it, directed to consumers. He will know that I, as Secretary of State, have always engaged with energy-intensive users and companies, and I am looking at the moment to try to get a solution to this problem with colleagues across Government.

[Peter Gibson (Darlington) (Con)]

T2. I commend BEIS Ministers for their enlightened decision to locate part of their team in Darlington. At the same time as we level up with more jobs in Darlington, LNER is planning to reduce services to Darlington, which will have a detrimental effect on connectivity. What steps is my hon. Friend, in collaboration with colleagues, taking to protect connectivity vital to businesses in Darlington and right across the country?

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

I welcome the tribute that the Secretary of State just paid to our friend Jack Dromey, who was a great champion of British industry and of British workers and simply an all-round great man.

Over the last decade, Conservative Ministers cancelled the zero-carbon homes programme, banned onshore wind development, launched the eco-insulation programme and tore it up within one year. They reduced the UK’s gas storage capacity and at one particularly silly moment, the current Foreign Secretary claimed that solar panels were a risk to domestic food production. All those decisions have made this country more dependent on volatile wholesale energy prices than we otherwise would be. We know that means that there is an extremely difficult situation for British households, but it also risks making large swathes of British industry uncompetitive. The Secretary of State says that he is working hard, so what is his plan?

[Kwasi Kwarteng]

I am delighted to see the hon. Gentleman take his place. I remember him being a prominent member of the economic team under the right hon. Member for Islington North (Jeremy Corbyn). I am glad to see that there is life after death and that he is here today. My only regret is that the right hon. Member for Doncaster North (Edward Miliband) is not here. I am afraid that the split of net zero from business shows that Labour is not serious about the energy crisis. It is not serious about placing net zero in the context of business and growth and it is completely off the pace in terms of driving clean—

[Mr Speaker]

Order. I call Jonathan Reynolds. [Interruption.] Sorry, sit down and I will just explain once again. These are topical questions. They are not meant to have a “War and Peace” answer. I want to get Back Benchers on both sides of the House in. You are taking their time.

[Mr Speaker]

Order. Do you not both understand? Your Back Benchers are desperate to get in. If the shadow Secretary of State wants to come in, he should be brief. If not, he should come in early when he has got more time. Secretary of State, briefly.

[Kwasi Kwarteng]

Very briefly, we have reduced carbon emissions by 45% since 1990, more than any other country in the world. We have grown the economy by 80%. We think that net zero and economic growth go hand in hand; the Labour party does not.

[Esther McVey (Tatton) (Con)]

T4. Storengy is a company in my constituency that provides gas storage. It tells me that levels of storage in this country have been decreasing. Can the Minister tell me how many days’ worth of gas storage there is now on a cold day, as defined by the National Grid, and whether he thinks that is sufficient?

[Kirsten Oswald (East Renfrewshire) (SNP)]

T3. Energy bills are crushing families in the cost of living crisis that this UK Government are presiding over. One million more UK households could fall into fuel poverty this year, but that is not inevitable. Will the Secretary of State ask the Chancellor to act by cutting VAT on energy, increasing the warm homes discount for vulnerable households, providing support to energy companies so that they can help consumers, making an emergency energy support payment and restoring the universal credit uplift? Will he also revisit the Department’s recent position and consider freezing the energy price cap?

[Kwasi Kwarteng]

The hon. Lady will know that I have extensive conversations with my right hon. Friend the Chancellor about that very issue. That is why we have kept to the energy price cap, increased the warm homes discount and got a winter fuel payment. The issue is squarely at the heart of our concerns as a Government.

[Ruth Edwards (Rushcliffe) (Con)]

T8. Will my hon. Friend join me and my hon. Friend the Member for Loughborough (Jane Hunt) in backing Intelligent Energy’s bid for investment from the automotive transformation fund, which will bring a hydrogen fuel cell gigafactory and highly skilled green jobs to Rushcliffe and the wider east midlands? Will he accept my invitation to visit Rushcliffe to learn more about those exciting plans?

--- Later in debate ---

[Sir Iain Duncan Smith (Chingford and Woodford Green) (Con)]

I point out to the Secretary of State that HSBC, a British-registered bank, is being reported as having invested in Xinjiang Tianye, which is a subsidiary of Xinjiang Production and Construction Corps, which has been sanctioned by our allies the United States for committing atrocity crimes, including slave labour and genocide. Will he call in the bank and ask it to explain itself, as it is in breach of the modern-day slavery rules?

[Kwasi Kwarteng]

My right hon. Friend raises a very serious point. Clearly, HSBC’s dealings with China are of commercial interest to it, but those dealings also have a wider implication. He will know from his experience that the Treasury has direct ownership of that relationship; I am discussing it with my right hon. Friend the Chancellor of the Exchequer.

[Andy McDonald (Middlesbrough) (Lab)]

T7. The Minister for Corporate Responsibility has spoken about the Horizon Post Office scandal and the need to compensate victims properly. He will agree that the object of the exercise is to put those victims in the position that they would have been in had the insult not occurred in the first place. Will he ensure that any such scheme adopts the common law principles of compensating for pain, suffering and loss of amenity; exemplary damages; and past and future pecuniary losses and costs to put those people in the position that they should have been in?

--- Later in debate ---

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

Regional mutual banks are key to the success of small and medium-sized enterprises in the world’s most productive economies, including Germany and the USA. Will my right hon. Friend meet me to discuss that important opportunity?

[Kwasi Kwarteng]

I am very happy to meet my hon. Friend. We have discussed that important issue on a number of occasions when I was wearing different hats in Government, but I am happy to meet him again.

[Barbara Keeley (Worsley and Eccles South) (Lab)]

For the last two months, people in Eccles in my constituency have had to wait weeks and weeks for their mail. Postal delays have meant people missing urgent hospital appointments, not receiving prescriptions and suffering hardship after not receiving their bank cards. It is unacceptable that Royal Mail has done so little to fix this problem. This appalling level of service is causing harm to my constituents. Will the Minister take action to ensure that Royal Mail resolves these letter delays?

[Paul Howell (Sedgefield) (Con)]

We all know the challenges those in the automotive sector have had in the last few years, but it is more than just them; it is the supply chains as well. Can I encourage the Secretary of State to come and visit Gestamp in my constituency, which supplies everybody from Volvo to Jaguar Land Rover, Nissan and so on, to understand its efforts in research and development, and how we can help it to develop its business?

[Kwasi Kwarteng]

My hon. Friend knows full well that, as Secretary of State, I have visited his constituency at least two or three times, and I would be very happy to do so again.

[Mary Kelly Foy (City of Durham) (Lab)]

Households up and down the country are facing a cost of living crisis, with energy prices set to rise in April. While many are facing the choice between heating and eating, North sea oil and gas producers are posting record profits. Can the Secretary of State tell me why the Government are not backing the windfall tax on North sea oil and gas producers’ profits that would help measures to ease the burden on ordinary people?

[Kwasi Kwarteng]

As the hon. Lady knows, we remain absolutely committed to helping people through a difficult time. We have the warm home discount, which is worth £140, and the winter fuel payment, which is worth £200. We are doing all we can to make sure that we mitigate and alleviate the pressure of increased prices this winter.

Nuclear Energy (Financing) Bill

Kwasi Kwarteng Excerpts

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

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

I beg to move, That the Bill be now read the Third time.

I want to start by following right hon. and hon. Members in paying my respects to the late Member for Birmingham, Erdington (Jack Dromey). His constituency has lost a dedicated public servant and a real champion of local industry. I am sure that all our thoughts are with his wife and his family.

Civil nuclear power has worked for this country and it works for consumers, but we all know that the existing financing scheme has led to too many foreign nuclear developers walking away from projects, setting our nuclear industry back a number of years. While the contract for difference model was right for Hinkley Point C, the lack of alternative funding models has contributed significantly to the cancellation of recent potential large-scale projects, including Hitachi’s project at Wylfa and Toshiba’s project at Moorside. We urgently need a new approach to attract capital into the sector, and therefore we are introducing the new nuclear RAB model, which will deliver nuclear projects at a lower cost for consumers.

This new funding model is a win-win for nuclear and for our country. Not only will we be able to encourage greater diversity of private investment; we will also be able through this mechanism to lower the cost of financing new nuclear power and reduce costs commensurately to consumers and to businesses. New nuclear is absolutely essential if we are to have security of energy supply and diversity to ensure resilience.

We have heard from MPs across the House about how the nuclear industry in their constituencies has created and will create jobs—from Wylfa to Hartlepool to Hinkley. All those hon. Members are powerful advocates in this place for the future of the nuclear industry. Thanks to the Bill and other steps we are taking, I firmly believe that we are at the beginning of a new age, a new renaissance, of nuclear energy in the UK.

We have already made a commitment to bring at least one further large-scale nuclear project to final investment decision by the end of this Parliament, subject of course to value for money and relevant approvals. We are also creating not only an ability to invest in large-scale nuclear but a £120 million future nuclear enabling fund to tackle barriers to deploying new nuclear technologies. I am particularly pleased to refer to the fact that we have committed £210 million to back Rolls-Royce’s plan to deploy small modular reactors.

[Jonathan Edwards]

The one thing that perplexes me about this Bill is that it is for nuclear only. If the RAB model is the way forward, why is it not also available for other technologies, such as tidal?

--- Later in debate ---

[Kwasi Kwarteng]

I am pleased that the hon. Gentleman mentions tidal, because for the first time, I think, in the history of the technology—in the history of the world—this Government committed to supporting tidal stream only last year. I am pleased that he should support that initiative.

I would like to make a few brief comments on some of the key themes that the debate has covered. One of the Labour party’s amendments would have put investment in new nuclear in the deep freeze. It would have prohibited investment from abroad. The very purpose of the Bill is not only to reduce the UK’s reliance on overseas developers for finance, but to widen—and this is often overlooked—the pool of potential investors, including British institutional investors and investors from some of our closest allied countries. That is why we rejected the Opposition amendment and why we feel that the Bill broadens our ability to finance new projects. The amendment would have ruled out many companies and prevented like-minded allies such as Canada, Norway and Singapore, with their large pools of capital, from being able to invest in our industry.

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

I sincerely congratulate my right hon. Friend on bringing forward this Bill. There is absolutely no doubt that nuclear provides the zero-carbon baseload that we need in our transition to net zero, and this is really going to help, so many congratulations to him.

[Kwasi Kwarteng]

I thank my right hon. Friend for her intervention. The House will know that she and I worked very closely in the Department for Business, Energy and Industrial Strategy, and she was one of the first in the new Parliament to realise the key importance of nuclear. I pay tribute to the work that she, among others, did to drive this agenda. Clearly, this Bill is timely because, as she said, we cannot reach net zero without a substantial commitment to nuclear.

[John Redwood]

Will the Secretary of State give some indication of how long it might take to prove and put into a working model the small nuclear technology, if all went well?

[Kwasi Kwarteng]

My right hon. Friend will be aware that the small modular reactors cannot be brought onstream in the next few months, but with the right investment and the right incentives, all this technology can be brought onstream very quickly. I cannot say that it will be five years or 10 years, but it will be brought onstream and will help us to reach the decarbonising targets that we have set ourselves.

[Alan Brown]

Will the Secretary of State give way?

[Kwasi Kwarteng]

I must make progress—forgive me.

Since the publication of the Prime Minister’s 10-point plan in November 2020, £6 billion of new investment has already poured into the energy sector—just in a period of barely 15 months. It was notable at the global investment summit in October last year that a further £9.7 billion-worth of deals was announced. Foreign investment is particularly eager to help to finance our way to net zero. But I have to state that foreign investment must not come at the expense of our national security. That is precisely why the National Security and Investment Act 2021 was introduced to safeguard our key strategic industries.

The final issue that we have debated is the necessity of ensuring that there is adequate protection for consumers. With this approach, private investors will be given greater certainty through a lower and more reliable rate of return, but that will, in turn, lower the cost of financing projects and ultimately, in the medium term, help sharply to reduce consumer electricity bills. To protect consumers, the Government will of course put any potential projects through a rigorous due diligence process, allowing detailed scrutiny of a project’s cost along with its delivery plans. The RAB regime will be designed to incentivise the company to deliver the project to time and to budget.

Britain once led the world with our civil nuclear industry, and we fully intend to clear a path to leadership and innovation in this critically important piece of infrastructure.

[Alan Brown]

If there is such a desire for investment, why was £1.7 billion allocated in the last Budget just to develop this project to final investment stage? What are we getting for that £1.7 billion of taxpayers’ money?

[Kwasi Kwarteng]

We all know that the hon. Gentleman’s party is against nuclear, but we also appreciate that the comprehensive spending review that he alluded to was all about ensuring our commitment in the 10-point plan to at least one further final investment decision before the end of the Parliament, and that is the sum of money that we have allocated to ensuring that that happens.

I look forward to following the progress of this Bill and pursuing our plan for greater nuclear investment, greater resilience and greater affordability in our energy mix. On that basis, I commend the Bill to the House.

Energy Infrastructure Planning Projects: Suffolk

Kwasi Kwarteng Excerpts

Wednesday 5th January 2022 Written Statements

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

This statement concerns applications for development consent made under the Planning Act 2008 by East Anglia ONE North Ltd and East Anglia TWO Ltd for the construction and operation of the East Anglia ONE North and East Anglia TWO offshore wind farms with a maximum capacity of up to 800MW (East Anglia ONE North) and 900MW (East Anglia TWO), with associated infrastructure required to export the electricity to a proposed national grid substation at Friston in Suffolk.

Under section 107(1) of the Planning Act 2008, the Secretary of State must make a decision on an application within three months of the receipt of the examining authority’s report unless exercising the power under section 107(3) of the Act to set a new deadline. Where a new deadline is set, the Secretary of State must make a statement to Parliament to announce it. The deadline for the decision on the East Anglia ONE North and East Anglia TWO applications was 6 January 2022.

I have decided to set a new deadline of no later than 31 March 2022 for deciding this application to allow an opportunity for further information including in respect of protected species and construction flood risk mitigation to be provided and considered.

The decision to set the new deadline for this application is without prejudice to the decision on whether to grant or refuse development consent.

[HCWS512]

BEIS Update

Kwasi Kwarteng Excerpts

Wednesday 15th December 2021 Written Statements

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

The last few months have seen unprecedented increases in the levels and volatility of wholesale gas prices across the globe. This has been due to multiple international factors in supply and demand and has led to a shift in the size and shape of the energy retail market, with a significantly higher number of supplier exits than would normally be expected during this period.

Three principles have consistently guided the Government’s response. Customers, and particularly vulnerable customers, should be protected. We will not be bailing out failed companies with poor business models. And we must not return to the cosy oligopoly of the past.

The energy retail market is the main interface between consumers and the energy system, and its stability and effectiveness is vital. Ofgem has today set out in its open letter to energy suppliers the further steps it is taking to protect consumers, provide greater certainty for investors, and strengthen the resilience of the sector.

Future of the energy retail market

Earlier this year, the Government published an Energy Retail Market Strategy for the 2020s. This strategy set out our vision for a market which enables net zero and where:

Consumers should receive appropriate levels of protection, pay a fair price for their energy, and be able to easily engage with the market to exercise choice;

Energy companies should invest in innovative products and services to unlock the benefits of low-carbon technologies; and

Consumer choice and active market competition contribute towards a lowest-cost flexible energy system, which gives the right price signals and drives the uptake of low-carbon products and services.

This vision remains the right one. However, we also need to take account of the lessons from recent months to ensure that the energy retail market is resilient, sustainable, and continues to protect consumers as we move to a net zero energy system.

The Government therefore intend to review these lessons as part of a wider refresh of the current energy retail market strategy, with the aim of publishing an updated strategy as soon as possible, once the market has stabilised. We are inviting views on how future Government policy can best achieve the vision set out earlier this year, and how the lessons from recent market developments should inform this. We are particularly interested in:

How the retail market can help achieve the best outcomes for consumers, no matter how they engage;

How energy companies can help drive the private investment needed to achieve net zero; and

How the retail market, its underpinning regulatory framework and the energy price cap, may need to evolve to enable a lowest-cost, flexible and resilient energy system that continues to protect consumers.

To enable this refresh of our overall retail market strategy, and to help stabilise the market in the short-term, the Government is therefore pausing policy development on the recent public consultation on opt-in and testing opt-out switching. The Government are grateful to all those who took the time to respond to this consultation, and to the other recent Government calls for evidence on third-party intermediaries and on the transparency of carbon content in energy products. The Government will set out next steps on these issues and publish a summary of responses in due course.

This is a key opportunity to help shape the future of the sector and I would encourage every interested party to engage in this process.

The Energy Price Cap

The energy price cap has shielded millions of customers from price volatility in wholesale markets. As announced earlier this year, the Government remain committed to seeking to legislate to extend the energy price cap beyond the existing longstop date of December 2023, when parliamentary time allows, subject to conditions for effective competition not being in place. We continue to reflect on the price cap’s effectiveness and will take this into account in the design of any future cap.

Fairness and Affordability

The Government remain committed to publishing a fairness and affordability call for evidence on the options for energy levies and obligations to help rebalance electricity and gas prices and to support green choices, with a view to taking decisions in 2022.

[HCWS497]

Professional Qualifications Bill [Lords]

Kwasi Kwarteng Excerpts

2nd reading
Wednesday 15th December 2021 Commons Chamber

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

I beg to move, That the Bill be now read a Second time.

Services are a critical part of our economy, our trade and our lives. UK-qualified professionals in sectors including architecture, law and medicine, among many others, are at the forefront of their fields globally. It is a testament to their success that the UK is today the second largest exporter of services in the entire world. Good regulation is essential in providing the confidence that the market needs to grow. Good regulation is essential in providing the confidence that the market needs to grow. The Bill supports that endeavour so that services can not only thrive but provide excellent jobs in the future.

[Margaret Greenwood (Wirral West) (Lab)]

The British Dental Association has warned that the Bill could water down the standards required to practise. What are the Secretary of State’s thoughts on that? What assurance can he give the House that standards will be maintained?

[Kwasi Kwarteng]

I assure the hon. Lady that many such issues were rightly addressed and debated at great length in the other place. I have seen the concerns of some of our professional bodies. I feel that the Bill gives a measure of support, and I feel strongly that it is proportionate. It is on that basis that I am introducing the Bill and begging leave for it to be read a Second time.

I turn to the Bill’s elements—perhaps through these remarks the hon. Lady may get some reassurance. First, the Bill will revoke the current EU-based approach, temporarily retained from the end of the transition period, which often gives unreciprocated preferential access to holders of European economic area and Swiss qualifications, and put in place a new system that is global in outlook and can be tailored to the UK’s needs. The Bill is not a rejection of the valuable skills offered by EU professionals. On the contrary, it will ensure fairness and put them on an even footing with applicants from around the world. Professionals who have already had their qualifications recognised and work in the UK can continue to do so provided that they meet any ongoing practice requirements.

The Bill will also enable the Government and devolved Administrations to act promptly where shortages in services may occur and where consumers may well face unreasonable delays and charges. That is particularly important for regulated professions in the public sector. For example, in a 10-year period, just under a quarter of all UK recognition decisions were for secondary school teachers alone. Let me be clear, however, that the Bill is intended to complement, and not simply to replace, the Government’s ambitious domestic skills agenda.

The Bill will also support our trade agenda and boost UK businesses exporting services all over the world—in short, it will help spread our skills, innovation and expertise abroad. It will ensure that the UK can implement professional qualification provisions in the future trade deals that we all anticipate with enthusiasm. It will also ensure that UK regulators can be empowered to strike deals on recognition with their overseas counterparts while taking full advantage of provisions in such future trade deals. Finally, it will help professionals, both at home and from overseas, to access global markets.

We are working collaboratively with the devolved Administrations and devolved regulators, and I very much hope that we will come to a resolution on legislative consent by the time that the Bill leaves the House. Of course, our regulators’ expertise underpins all our professions, and that is the very reason why the Bill has the protection of regulator autonomy at its very heart. Regulators agree that that is the right approach, and in general they have voiced hearty support for the Bill.

This Bill is about ensuring that the regulation of professional qualifications works for the whole of the country’s interests. It is about fairness, ensuring that wherever professionals may come from, they have an equal opportunity to practise their professions; and it is about making access to professions more transparent, as well as supporting our own UK trade agenda. On that basis, I commend it to the House.

Subsidy Control Bill

Kwasi Kwarteng Excerpts

3rd reading
Monday 13th December 2021 Commons Chamber

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

I beg to move, That the Bill be now read the Third time.

I pay tribute to my hon. Friend the Minister for his leadership and diligence in steering the Bill through this House. I recognise the contribution of all the officials in my Department whose outstanding work has advanced us to this point. I thank you, Madam Deputy Speaker, and your colleagues for all the work you have done. I extend my thanks to all the House staff who have made sure that everything has gone as one might expect.

This Bill is a hugely important piece of legislation. It establishes a subsidy control system that has been designed by and for the UK. It demonstrates the Government’s clear commitment to seize the opportunities arising from Brexit. For the first time, the decision on whether to grant a subsidy will fall to the granting authority itself. At the heart of the regime is a set of clear and proportionate principles that will be underpinned by guidance.

Local authorities, public bodies and the devolved Administrations in Edinburgh, Cardiff and Belfast will be empowered to decide if they can issue taxpayer-funded subsidies by acting consistently with the principles outlined in the legislation. That includes a principle specifically designed to minimise distortions to UK competition and investment. The new regime will help to unlock potential so that all areas of the UK feel the benefits of targeted subsidies. That includes investment in skills, infrastructure, new technologies, and research and development.

With agreement, in Committee, the Government made some technical changes to the provisions to provide clarity in certain areas. Those included ensuring that the transparency requirements apply to subsidies under legacy schemes subject to certain exemptions and that the content of the CMA’s post-award report is consistent with that of its pre-award report.

There has been a thorough debate, including today, about specific elements of the regime. I welcome the recognition on both sides of the House of the need for the Bill. The new subsidy control regime will ensure that the UK maintains a competitive free market economy, which is fundamental to our national prosperity, while protecting the interests of the British taxpayer. The debate will continue through the remaining stages of the Bill as it passes to the other place and we will of course be mindful and attentive to that continuing debate. On that basis, I commend the Bill to the House.

--- Later in debate ---

[Kwasi Kwarteng]

I am very pleased that there have been as many contributions as there have been. I look forward to taking the Bill forward, as does my hon. Friend the Minister.

Question put and agreed to.

Bill accordingly read the Third time and passed.

Storm Arwen

Kwasi Kwarteng Excerpts

Wednesday 1st December 2021 Commons Chamber

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

With permission, Mr Speaker, I would like to make a statement on the electricity disruptions as a result of Storm Arwen and how we are working to ensure that power is restored to people’s homes.

Storm Arwen brought severe weather, including high winds of up to 100 mph, rain, snow and ice, causing the most severe disruption since 2005. Many people across the country, but particularly in northern England and Scotland, have been without power for a number of days. Three people have tragically lost their lives in incidents related to the storm. My thoughts—and, I am sure, the thoughts of the whole House—are with those people and their loved ones.

I want to reassure people who are still without power—who are exhausted, worried and angry—that we are all working incredibly hard to ensure that normal conditions return. We have incredibly dedicated teams of engineers, who have been working around the clock to restore the network. The scale of the restoration effort that engineers are facing is enormous. The weekend saw exceptionally strong winds of almost 100 mph, which brought large trees and debris down on to power lines. For example, central Scotland has only seen wind speeds like this twice in the last 25 years. Of course, to add to the complex situation, much of the damage is in remote and hard-to-reach places.

I am glad to say that more than 95% of those affected by the storm—over 935,000 customers—have had their power supply restored so far; I thank the engineers for their hard work and perseverance. However, as of 8 o’clock this morning, there were still 30,000 customers without power. The specific areas most severely affected are: Wear valley surrounding Eastgate and north Northumberland; the north Peak District and the South Lakes areas; and Aberdeenshire and Perthshire in Scotland.

Today, the Minister of State, Department for Business, Energy and Industrial Strategy, my right hon. Friend the Member for Chelsea and Fulham (Greg Hands), is on the ground in Berwick to see at first hand the impact from storm disruption. Yesterday, I spoke with the chief executive officers of Northern Powergrid, Electricity North West, and Scottish and Southern Electricity Networks to seek assurance that restoration is happening as fast as is humanly possible. I am satisfied that these operators are sharing their resources through mutual aid agreements, and putting engineers in the worst affected areas.

I am also grateful to emergency responders, who have been working hard to keep people as comfortable as possible by providing torches, blankets and other necessities, and sorting out alternative accommodation where necessary. Officials in my Department are monitoring the situation closely and are in constant contact with network operators to ensure that customers can be reconnected as quickly as possible.

People who are still experiencing issues or who need further support should contact their electricity network operator by dialling 105 from their landline or mobile phone. This will automatically route them to the right operator, based on their physical location. People are also eligible for compensation on which they can find details on the Ofgem website.

For those who continue to be without power, I know their primary question will be “When will power be restored?” I have been assured that the overwhelming majority of those still without power today will have it restored in the next day or two. I have asked operators to provide named contacts for MPs and I will be sharing those with colleagues.

This has been an extremely difficult week for many of our constituents, and I thank them for their fortitude in the face of these extreme weather conditions. When the power is back up and back to normal, we in BEIS will of course be looking at the lessons that we can learn from Storm Arwen in order to build an even more resilient power system in future.

[Edward Miliband (Doncaster North) (Lab)]

I thank the Secretary of State for his statement. Let me first join him in sending my condolences to the victims who have tragically died during Storm Arwen and to their families. I express my sympathy to all those who have lost power and are suffering during this crisis. I know from my own constituency, where we had terrible flooding in 2019, the impacts of extreme weather and the traumatic effects it has on people and communities. I also join him in paying tribute to the many engineers, volunteers and emergency service workers who have worked tirelessly to step up and help during this crisis.

We have heard heartbreaking stories of outages leaving residents without power, water and light. There are also many reports that the Secretary of State will have heard of residents being unable to get proper information about what is happening and waiting for hours to get through on phone lines. On behalf of the many who have suffered, I want to ask him a few questions. Does he believe that there is enough support for the most vulnerable on the ground while the power outages continue, including the use of emergency generators, and has he given thought to calling in the Army if necessary to help with that process? He said that power would be restored “in the next day or two” for the overwhelming majority. Can he say how many people he estimates will be left without power and how long it will take to restore power for them?

After terrible storms in 2013—the stormiest winter in 40 years that saw hundreds of thousands lose their power—it was said that lessons would be learned, and I want to probe the Secretary of State a little further on three areas in that regard. First, on communications and information, the Science and Technology Committee recommended that the single national emergency number was put in place. The purpose of that number was that people would not just know who to call but could get information promptly. On the calling of 105, which he mentioned, there are multiple reports of it causing enormous frustration to people who are not getting the information. What is his assessment of whether people have been able to get the information, and if not, why not?

Secondly—the Secretary of State drew attention to this—Ofgem recommended in the wake of those storms that district network operators should share resources and personnel in the event of such a crisis. He said that that has happened, but is he satisfied that it has happened right across the DNO network, and at the scale that is required? Can he give us some further information on that?

Thirdly, after 2015 there was a clear sense of the vulnerabilities of the overhead power network, and agreement that the networks would survey the vulnerabilities that they faced and act. Is the Secretary of State satisfied, at this stage, that that has happened, because the continued vulnerability of power lines seems all too apparent?

Faced with the climate crisis, extreme weather events will sadly become all the more common in future. We cannot be this vulnerable in future. There is real concern that some lessons have not been learned, and on this occasion we must face up to those lessons and learn them.

[Kwasi Kwarteng]

On the situation with regard to the climate change emergency, the right hon. Gentleman and I have very similar views. Clearly Storm Arwen was an event the likes of which we have not seen for, certainly, 16 years, since the records of the DNOs started. We have to be prepared for similarly extreme difficult weather conditions in future and make sure that our system is resilient in that eventuality.

Turning to the right hon. Gentleman’s specific questions, the 105 line is the one number that people are being asked to call; it has been centralised. He is right to say that there was initial pressure. My understanding is that over the weekend, it took people up to two hours to get through, which is clearly unacceptable, but the storm hit and the companies did not have the communication networks, the call centres or the people there to deal with the situation. When I spoke to the CEOs of the companies yesterday, they said that the waiting time has been reduced to 10 minutes to a quarter of an hour. That is what I was told. If people are finding difficulties, they should definitely get in touch with their MPs, Government and also the distributors.



On the right hon. Gentleman’s second point, the North East South West Area Consortium is a very effective means by which the generating companies can share and deploy engineers across different networks. That is very effective, I am told by the CEOs of the companies, but I will have more calls today with local resilience leaders to ensure that what the generating companies are saying is matched by what people are experiencing on the ground, because, as he well knows, there can be a mismatch between the two.

[Andrew Bowie (West Aberdeenshire and Kincardine) (Con)]

May I echo the words of my right hon. Friend in thanking all those in our emergency services and the local authority workers who went out over the weekend and have been doing so much to support our communities across the United Kingdom that have been affected? I also thank the people in local businesses who have opened their doors to look after those people who are more vulnerable and need support, such as the Fife Arms in Braemar, where temperatures dropped below zero over the weekend and people lost power and water. Lumphanan, Crathie and Corgarff in my constituency remain without power and do not even have access to a temporary generator. Can he expand on his discussions with Scottish and Southern Electricity Networks? What discussions has he had with the Scottish Government to see what the two Governments in this country might be able to do to speed up the response and support those people who are going to their fifth day without any power, heating or electricity in general?

[Kwasi Kwarteng]

My hon. Friend will accept that we are in an extreme situation. He will also know that I have spoken to Mr Alistair Phillips-Davies, who is the head of SSE. He and I and colleagues in the Scottish Government are apprised of the situation. Generators are being distributed that can take up the slack when important power infrastructure is down, but it is an ongoing situation and I would be happy to engage with my hon. Friend in the next few hours.

[Dave Doogan (Angus) (SNP)]

I thank the Minister for advance sight of his statement. This storm was of incredible strength when it hit us on Friday night, with the north-eastern parts of Scotland and England being especially in the full face of the gale. SSE’s storm models predicted between 60 and 100 high-voltage faults. In fact, it has sustained more than 500 high-voltage faults, with more than 1,000 instances of damage to its network. Sustained winds with gusts in excess of 90 mph were, unusually, from the north-east, affecting trees that do not normally have to yield to those winds. It has resulted in colossal tree damage to the network.

I wish to pay tribute to the fortitude and resolve of the many people facing severe hardship on day five without power, some of whom will not get it back today or tomorrow. It is a tremendous disruption to how we live today, and they are to be in our thoughts at this very challenging time for them. Indeed, as of 9 pm last night, 9,500 customers remained cut off from their supply, including 5,700 in Aberdeen and Aberdeenshire, 1,500 in Moray, 1,400 in my Angus constituency and 570 in Perthshire. This enduring lack of power would test anyone’s resolve, yet it is telling that people remain mindful of the extraordinary efforts of the engineers and support staff of SSE and its industry partners to restore supplies, and power has been restored to more than 118,000 customers. The UK Government have, I understand, said that they are

“on standby to provide further assistance to the Scottish Government”,

but like the Deputy First Minister in Scotland, I am a little sceptical as to what that is. I would be grateful if the Minister could elaborate on what that assistance would be. If it is financial assistance, is it new money or recycled money?

I was in touch with SSE again this morning, and it has assured me that it has engineers from across its network working in the north-east to repair supplies and also engineers from other networks sharing distribution network operator resources. That enormous recovery effort is hampered by the prolonged scale of the damage, which is compounded by the locations of the damage and the types of equipment that have been damaged. I place on record my thanks to the engineers working in all weathers to restore power supplies to Angus, to the council and to other members of the local resilience partnership who have done so much to help to restore supplies and in humanitarian welfare provision.

[Kwasi Kwarteng]

I welcome the hon. Gentleman’s remarks and pay tribute, as he does, not only to the fortitude of many of his constituents and other people in Scotland, but to the tireless efforts of the engineers, the voluntary staff and the DNO in this instance, SSE, in trying to deal with an unprecedented situation, as he recognised. He was right to point out that it was not only the high velocity but the direction of the winds that posed a huge challenge.

As the hon. Gentleman knows, I speak to counterparts across the border in the devolved Administration frequently; in fact, I was on a panel with the Cabinet Secretary yesterday and it is something that we are talking about all the time. We have not specified the amount of money, if there will be any. I do not think we have reached that conversation, but we are in constant dialogue with his colleagues in Holyrood.

[Dr Neil Hudson (Penrith and The Border) (Con)]

In my constituency and further afield, areas such as Alston, Garrigill, Nenthead, Kirkby Stephen, Matterdale and North Stainmore have been hard-hit by the power crisis. Some of those areas have had their power restored, but others are still without power. Will my right hon. Friend join me in thanking the engineers at Electricity North West, the emergency services, councils and volunteers who have been working so hard? Can he assure my constituents and people further afield that everything is being done across Government to support them, to help to restore power and to put in place contingency measures?

[Kwasi Kwarteng]

My hon. Friend will know that this is a matter of grave concern and focus for the Government. He will also appreciate that Electricity North West has done a reasonable job in restoring power to 95% of people affected, but clearly we want to work harder to make sure that those 6,000 or 7,000 people who are still off the grid can get their power back as soon as possible.

[Tim Farron (Westmorland and Lonsdale) (LD)]

I, too, send my condolences and pay my respects to those who have lost their life in such awful circumstances, in particular to the family of the man who passed away in Ambleside on Friday. At least 7,000 homes in my constituency have been without power for between three and five nights. I am immensely proud of the way that people in our community have stood up to support one another and their neighbours—they know who they are. I am also grateful to those working on the ground for Electricity North West to try to fix the problem as soon as possible.

In my communities and elsewhere in Cumbria, thousands are still without power. They feel forgotten, but they have not been, I hope, by many hon. Members here. Places such as Killington, Garsdale, parts of Coniston, Orrest Head, Ayside, High Newton, Low Newton, Witherslack, Hincaster, Lambrigg, Bowston, Hutton Roof, Crook, Outgate, Haverthwaite, Spark Bridge, Backbarrow, the outskirts of Windermere and others are facing a sixth night without power. Some people are being told that their connection will not be fixed until 8 December—this time next week.

The hardship caused, particularly to the elderly and other vulnerable people is unthinkable, which is why it is massively disappointing that it took until Wednesday for a Minister to come to the House to address the issue. It is not too late for the Government to act, however, so I ask the Secretary of State to task the Army to provide support to the engineers on the ground in Cumbria to speed up fixing the problem; to then use the Army to ensure that the most vulnerable are contacted and moved to emergency accommodation today; and to ensure that every affected community in Cumbria is given generators to provide at least a temporary fix today so that no one has to spend a sixth night in the cold.

[Kwasi Kwarteng]

We are contacting local resilience forums, listening to them and getting guidance from them as to how best to tackle the situation on the ground. The hon. Gentleman will appreciate that Electricity North West has already provided 150 generators. We will task it to see what more can be done to alleviate the extreme stress and challenging situation that many of his constituents face.

[Mr Richard Holden (North West Durham) (Con)]

I thank the Secretary of State for his statement. Storm Arwen has left thousands of my constituents without power for several days. It has been heartening to see how people in my local towns and villages have come together, particularly in Upper Weardale, Eastgate, St John’s Chapel, Quebec, Wilks Hill and Maiden Law. I also have a secondary school that is still without power, so several hundred children are not getting the education that they need.

I am delighted that the Energy Minister, my right hon. Friend the Member for Chelsea and Fulham (Greg Hands), is in North West Durham today. I thank him for his visit and for what he is doing there. He has contacted several local businesses on my behalf.

I will raise a couple of things with the Secretary of State. First, one of my rural surgeries has lost £10,000-worth of flu vaccines due to the electricity going down and the fridges going off, which will affect its ability to roll that out. Can he speak to the Department of Health and Social Care to ensure that the supply is reimbursed as quickly as possible? Secondly, some isolated communities have been told that it may be a long time before they can get full electricity. Will he do everything possible to ensure that they are reconnected well before Christmas? Finally, can he ensure that the Government respond positively to any request from the local resilience forum, including sending in the Army if necessary?

[Kwasi Kwarteng]

My hon. Friend will know that I am keen to engage with local resilience fora and hear from them what is the best way to proceed. He will also appreciate that we are incredibly conscious of the ramifying effects of the storm, particularly in regard to health and education. He knows that I am taking that up within Government. I take the point about isolated communities extremely seriously and I will be looking at that on a daily basis. I will say publicly that being without power until Christmas is simply unacceptable and I will do everything I can to make sure that that does not happen.

[Liz Twist (Blaydon) (Lab)]

I thank the Secretary of State for the statement, but in my constituency, pockets of people remain without energy, including in Ryton, Blaydon, Wylam—the part that is in my constituency—Victoria Garesfield, Coalburns and Byermoor. Six days on, all those places are still without energy and people are anxious and finding it extremely difficult to get through to find out information. Will he assure me that Members of Parliament will have direct lines and contacts so that we can get detailed information to tell our constituents? I thank the workers who have been out there in all weathers trying to reconnect people.

--- Later in debate ---

[Kwasi Kwarteng]

The hon. Lady is right to point out that there needs to be a way for right hon. and hon. Members to engage with DNOs and constituents, and I will look into that. I picked up on precisely the point about communications with the CEO of Northern Powergrid, the DNO relevant to her constituency, and he said that, having had a slow start at the weekend because the situation was completely unprecedented, they are working very hard to make sure that communications are effective. I reinforce the point that I made to my hon. Friend the Member for North West Durham (Mr Holden) that we will do everything we can to make sure that the generating of electricity happens long before the dates that are being bandied about for when they should be up and running.

[Robert Largan (High Peak) (Con)]

I thank the Secretary of State for the statement and for meeting me yesterday to discuss the situation in High Peak where thousands of homes have been left without power since the weekend, including in places such as Buxton, Chapel-en-le-Frith, Wash, Bagshaw, Sparrowpit, Wormhill, Peak Forest, Chinley, Hayfield and more. I put on record my thanks to the engineers at Electricity North West, as well as to Derbyshire County Council, the local resilience forum, the emergency services and our amazing mountain rescue teams for working to not just reconnect power but help the most vulnerable who have been affected. Unfortunately, some homes are experiencing their fifth day without power. I ask him to commit the Government to do whatever is needed and to provide whatever resources the local resilience forum requests to get power back to everyone in the High Peak.

[Kwasi Kwarteng]

As I have said to a number of hon. Members today, we are absolutely committed to getting power back. I need to reiterate that 95% of people who were affected now have their power back, but if someone is part of the 5% still without power, that is clearly no solace and will not help them in that situation. It is absolutely incumbent on me and my Department to make sure that we do whatever we can to resolve it.

[Grahame Morris (Easington) (Lab)]

I also acknowledge the heroic efforts of the engineers and emergency workers in seeking to restore power, and of the communities, businesses and residents across my constituency who have stepped up to support the elderly, local care homes and vulnerable people who have been left without power for five days. However, the Secretary of State has some important questions to answer. When the Met Office issued a red weather warning that there was a danger to life, what steps did he take to move basic resources, bottled water, emergency generators, fuel and blankets to the affected areas? What arrangements were made to consider the deployment of the Army—the Royal Engineers—to identify alternative accommodation and establish community reception hubs for those, particularly elderly people, left without power and in need of support? From where I am and my constituents are, the performance has been lamentable. There has been a complete lack of planning and foresight. I am sure that the whole House would welcome answers to those questions.

[Kwasi Kwarteng]

I do not accept the hon. Gentleman’s characterisation of where we are. He will appreciate that, over many years, we have had local resilience fora, which have acted incredibly speedily and with incredible dedication. They are precisely the organisations that know what the situation is on the ground, and I and my Department have been engaging with the people involved. They are responding extremely effectively to this difficult situation.

[Simon Fell (Barrow and Furness) (Con)]

Storm Arwen hit my constituency, like many others, very hard. Thousands of homes were left without electricity. Thankfully, that is now down to the hundreds, but those people are facing their fifth night without power. I reiterate requests for the Minister to listen to any calls from the local resilience forums to step up Government support.

On lessons learned, so many of my constituents have come to me feeling really dismayed by the fact that they are being pushed online to get information about what is happening and where support is coming from. However, if people do not have power or broadband, they simply cannot access those services. When the Government look at this, can we make sure that we look at how best to communicate with people who have no access to regular communications channels?

[Kwasi Kwarteng]

The communication point is fundamental. I have spoken to the CEOs of the DNOs and I am speaking to the local resilience fora; we are absolutely committed to having much, much easier and more fluent channels of communication in future. My hon. Friend will appreciate that this issue will not go away. There will be other incidents, and he is right to stress that we need a more resilient system.

[Ian Lavery (Wansbeck) (Lab)]

This storm was catastrophic; it had a devastating impact, with destruction right across my constituency and in Northumberland as a whole. This is about not just the power, but the destruction of properties, allotments and houses across the piece. People are looking towards some form of financial support from the Government, because this impacts on many people who have not got two ha’pennies to rub together. They will need specific, targeted Government support.

First, I ask the shadow Secretary—sorry, the Secretary of State; I nearly demoted him there—to consider what extra support can be given. Secondly, on isolation and communication, I have in my constituency an old people’s home that lost its electricity at 2 o’clock on Saturday morning and had it restored on Monday afternoon. In between, the lack of communication was unbelievable. Two people in that home were aged 100 years-plus. There were a lot of people with dementia who were frightened and who could not be moved because it would mean extra confusion. This is not acceptable. Will he look at what measures the Government can put in place to make sure that this does not happen again? Communications are very important.

Just before I sign off, I add what a brilliant job Northern Powergrid, its workforce, the engineers, the volunteers in the towns and villages and the council workers are all doing, pulling together to try to ease the effect of Storm Arwen.

[Kwasi Kwarteng]

The hon. Gentleman is quite right: Northern Powergrid is working very hard to make sure that people get their electricity back. As I said, 95% of the people affected have got the power back. There was an issue with communication on the weekend, I am sad to say. There was a huge surge in demand and not enough infrastructure—there were not enough people in the call centres—to deal with the situation. We will look into that. As Members from the south-east will remember—although there are not many of them in the Chamber today—we had a power outage on 9 August and we did manage to create a more resilient system. I am absolutely determined that this time we will have a more resilient system on the back of these tragic events.

[John Lamont (Berwickshire, Roxburgh and Selkirk) (Con)]

Thousands of my constituents across the Scottish Borders remain without power today after the catastrophic storm at the weekend. I felt the full force of that storm at home in Coldstream on Friday and Saturday. Many old and vulnerable residents have no power and that has been the case for five days. Like others, I pay tribute to the engineers and council workers who have worked so hard to get people connected, but serious questions remain about the failure of ScottishPower Energy Networks to provide accurate information to residents about reconnection times. There are also questions about the support that the Scottish Government provided to local councils across Scotland. What discussions have the UK Government had with ScottishPower Energy Networks and the Scottish Government about the response to the storm, and what more can be done to support my constituents in the Scottish Borders to get them reconnected?

[Kwasi Kwarteng]

As I said, I spoke to three CEOs of the DNOs. The CEO of ScottishPower was not one of those I spoke to, but I am very hopeful that we can get a call today, and I am looking forward to sharing with my hon. Friend exactly what that distributor is doing.

[Mary Kelly Foy (City of Durham) (Lab)]

Some of my constituents in places such as Sherburn Hill, Waterhouses, Bearpark and Low Burnhall are facing a full seven days without heating or electricity. This is a national scandal. I thank the emergency services, the workers, the engineers and all the community groups who have stepped up to help those most in need, but what are the Government doing to help the most vulnerable residents in Durham to get the help that they need—not tomorrow, not next week, but today?

[Kwasi Kwarteng]

As I said in a number of responses, we are working with the local resilience fora. The job of the local resilience forum, in the first instance, is to find out what is going on and to co-ordinate local responses, and then, of course, the Government are very focused on helping them to get what they need to make the situation much more comfortable than it is.

[Dehenna Davison (Bishop Auckland) (Con)]

We have all seen the photographs of the devastation caused by Storm Arwen and experienced it for ourselves—it is absolutely atrocious. When I was speaking to someone from Northern Powergrid a few days ago, they said that it is the worst damage in living memory. I pay tribute to Northern Powergrid, its engineers and all the local authority workers for all their hard work in trying to get this awful damage fixed.

I also thank the Secretary of State for his statement and for the numerous calls and meetings that we have had this week to discuss the damage and what more can be done to support some of the residents who are still without power. In my constituency, unfortunately, the number is still in the thousands. Place such as Langdon Beck, Evenwood and Middleton-in-Teesdale still face an absolute loss of power. However, in times like these, we see the best in our communities as well, with businesses such as Babul’s and Chocolate Fayre providing support to individuals still affected. Support has also been provided by individuals such as Tommy Lowther, Judith Buckle, Kimberley Clarke and others, including Paul Hedley, who responded instantly to calls to provide a generator—it had been sitting in his garage.

I really want the Secretary of State to address that point about emergency generators. After five days of no power, no heating and no light, the smallest things, such as a single lightbulb, a kettle to boil some hot water, a small heater and a little bit of phone charge, can make such a difference to people. What more can the Government, local resilience forums, local authorities and local charities do to work together to find out where these generators are and to get them deployed to some of these communities who could be facing disruption for days, if not weeks?

[Kwasi Kwarteng]

I thank my hon. Friend for the tireless work that she and other Members, on both sides of the House, have put in to make sure that their constituents are being well represented and to tell us what exactly it is like on the ground. That is how this House of Commons should work and I am very proud of that.

My hon. Friend will know that we are talking with the local resilience fora about generators. The companies—in her case, Northern Powergrid—are making an effort to get generators out to affected communities, and I am getting a regular update on what has been happening in that respect. I am very happy to speak to her, as I am to other Members, about this emergency.

[Richard Thomson (Gordon) (SNP)]

Like other Members, could I add my own thanks for the resilience and fortitude of those who have been left without power for so long and the dedication of the engineers who have been getting them back on grid? I also thank everyone involved in the volunteer response and in the local resilience partnerships.

While the priority has to be about getting those who remain off-grid back on to an electrical supply and supporting those who are not on-grid at the moment as best we can, there will at some point be an examination of how things could have been done better. There is an issue about the resilience of our communication infrastructure as well as our power infrastructure, because broadband went down and mobile phone networks went down, which hindered in many respects, the ability of people to respond. Will the Secretary of State consider, as part of that, looking at the obligations placed upon not just power distribution companies, but telecommunications providers to provide a more secure and robust service in all circumstances, no matter how adverse they might be?

[Kwasi Kwarteng]

I wholeheartedly agree with what the hon. Gentleman has just said. It is very easy for us simply to come up with a statement and then hope that the problem goes away, but I have made a firm commitment, as we did, as I have said, on 9 August 2019, when there was a power outage and we spent a couple of months, if not longer, having a proper inquiry as to what went wrong. I am confident that a lot of the measures that we came up with then did provide resilience. It is exactly in that vein that I want to approach this very difficult situation. It will not be the case that we will simply walk away from it; we will be trying actively to learn lessons. We cannot abolish extreme weather—well, we can in the long run, but we cannot do it perhaps as quickly as we would like—but we can certainly learn lessons to build more resilience.

[David Duguid (Banff and Buchan) (Con)]

Can I thank my right hon. Friend for his statement today and his commitment, as well as that of the Prime Minister earlier this week, including his commitment to provide any support that the UK Government can in Scotland in particular? I would like to associate myself as well with his remarks and those of other hon. and right hon. Members across the House in recognising the Herculean efforts not just of the power companies, but of local communities who have come out in force to support our neighbours, and friends and neighbours around those communities.

In a spirit of helping the hon. Member for Angus (Dave Doogan), the numbers he produced earlier were from I think 9 o’clock last night, but some numbers came out earlier today which show that, from the 9,500 customers who were still looking for power last night, it has come down to 6,400, 3,700 of those being in Aberdeen and Aberdeenshire, with areas such as Auchnagatt, Forglen, Methlick and New Byth coming on stream overnight. They will be delighted, but of course there are still 3,700 in Aberdeenshire and Aberdeen city for whom that is not much solace, as the Secretary of State said. So can I ask him what conversations he has had with the Scottish Government and the local resilience programmes in Scotland not only to get the power back on as soon as possible, but to make sure that we are focusing on helping the most vulnerable in our communities—those who are not on Facebook or on the internet and who do not have access to the regular updates that we all try to give?

[Kwasi Kwarteng]

My hon. Friend is absolutely right. This sort of crisis does not affect everyone equally. There are vulnerable and isolated communities that are particularly affected by this outage and our focus is on that. He will appreciate that the DNO in his area—I think it is SSE—has worked very well in providing support. It is providing accommodation in some instances, hot meals and food, and we are continuing to push that.

[Alex Davies-Jones (Pontypridd) (Lab)]

I am grateful to the Secretary of State for his update on the impact of Storm Arwen and my thoughts are with everybody impacted by this terrible natural event. Residents and businesses in Pontypridd were devastated by Storm Dennis in 2020. They were hit by horrendous flooding and, sadly, they are still, even now, feeling the impact of that. Although it is vital that residents and businesses get urgent help in the immediate aftermath, the long-term impacts are still massively impacting these people. Some are unable to get insurance, many have been hit by unnecessarily high insurance premiums and some have not even been pointed to Flood Re. So will the Minister please work with colleagues to look again at Flood Re and ensure that everybody—businesses and residents—can get access to affordable insurance?

--- Later in debate ---

[Kwasi Kwarteng]

I think the hon. Member is right. Many of us across the House have had instances of flooding and extreme weather events over the last 10 years. I myself, in my constituency, had a very extreme case of flooding in 2014 and the issues she raised with regard to insurance and lessons learned are things I am very conscious of. I would be very happy to take this up with her in any subsequent conversation or meeting.

[Mr Philip Hollobone (Kettering) (Con)]

Storm Arwen was an extreme weather event, but we are having more extreme weather events as the climate changes. Already, every winter in this House we have urgent questions and statements on power outages caused by electricity distribution lines coming down, and train disruption caused by electrical lines failing. The long-term fix is to increase the resilience standards of the poles, pylons, wires and connectors on the system. It is not to do with local resilience forums, which are more about responding to crisis; this is about raising the technical standards of the equipment that is deployed. An example is undergrounding electricity lines, which could be as much as 20 to 30 times more expensive than an overhead line, but, especially near more populous areas, that may well be part of the solution. Will the Secretary of State be kind enough to look at the technical standards of the electricity distribution network, because we need to raise those in the face of climate change?

[Kwasi Kwarteng]

My hon. Friend is absolutely right to raise the infrastructure challenges that we are experiencing in extreme weather conditions, which will probably be more frequent given the climate change to which he alluded. He will appreciate that, essentially, a whole new infrastructure not only takes time, but means paying considerable amounts of money, and in the meantime we have to deal with those extreme weather events, so the local resilience forums are very important. He is quite right to say that they do not solve the infrastructure problem long-term, but it is really important that they can act nimbly, because we can improve our infrastructure standards, but we are not simply going to abolish the threat of extreme weather conditions.

[Mick Whitley (Birkenhead) (Lab)]

The immense disruption caused by Storm Arwen over the weekend demonstrated how vulnerable much of the country is to extreme weather events. Recently, businesses and residents in my constituency were devastated by extensive flooding following torrential rainfall in the space of just a couple of hours. With climate breakdown set to make such events a more frequent occurrence, can the Secretary of State inform the House what steps his Department will be taking in conjunction with his colleagues at the Department for Environment, Food and Rural Affairs to improve the resilience of communities such as Birkenhead to extreme weather?

[Kwasi Kwarteng]

The hon. Member raises an important point, and he also alludes to the nature of the problem. BEIS is responsible for electricity and DEFRA has been particularly effective in responding to flooding, and he is quite right to suggest that both our Departments are working together, as we do with other colleagues across Government, and are more and more focused on the effects of climate change—and that is what it is—on our infrastructure and our people. We are working together to try to solve that general problem.

[Jim Shannon (Strangford) (DUP)]

I thank the Secretary of State for his statement. I also wish to convey my party’s and my own sincere sympathies to the family of Francis Lagan, who was killed by a falling tree during Storm Arwen in Northern Ireland. Can the Secretary of State outline what support is available specifically for businesses that rely on the internet that may have to wait weeks for its restoration? It was on the news this morning, and it was very clear that businesses in Yorkshire and elsewhere are finding it difficult to reconnect and take bookings. Can the Secretary of State allocate an urgent funding scheme to allow short-term contract mobile hotspotting to take place in the interim—just to help those businesses, as they need it right now?

[Kwasi Kwarteng]

This is clearly a matter for urgent discussion. The hon. Member will appreciate that, in my role, I cannot stand up such funds immediately. I think a lot of the onus will be on the devolved Administration as well, so I am very happy to take that up with colleagues in Northern Ireland as well as with my right hon. Friend the Secretary of State for Northern Ireland.

Contingent Liability: Bulb Energy

Kwasi Kwarteng Excerpts

Friday 26th November 2021 Written Statements

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

Contingent liability (indemnity)



Today I will lay before Parliament a departmental minute describing a contingent liability arising from an indemnity for the energy administrators acting in the special administration regime for Bulb Energy Ltd (Bulb).

It is normal practice when a Government Department proposes to undertake a contingent liability of £300,000 and above, for which there is no specific statutory authority, for the Department concerned to present Parliament with a minute giving particulars of the liability created and explaining the circumstances.

I regret that I have not been able to follow the usual notification timelines to allow consideration of these issues in advance of issuing the indemnity, but the fast moving nature of Bulb’s situation has required a rapid response to protect consumers.

Bulb entered the energy supply company special administration regime on 24 November 2021. Energy administrators were appointed by court to achieve the statutory objective of continuing energy supplies at the lowest reasonable practicable cost until such time as it becomes unnecessary for the special administration to remain in force for that purpose.

My Department has agreed to provide an indemnity to the energy administrators in respect of personal liabilities they might incur in the exercise and performance of their powers and duties as administrator. I will update the House if the indemnity is called upon.

The legal basis for an indemnity covering the energy administrators’ personal liability is section 166 of the Energy Act 2004, as applied by section 96 of the Energy Act 2011.

HM Treasury has approved the arrangements in principle.

Contingent liability (letter of credit)

Today I will lay before Parliament a departmental minute describing a contingent liability arising from the issuance of a letter of credit for the Energy Administrators acting in the special administration regime for Bulb Energy Ltd (‘Bulb’).

It is normal practice when a Government Department proposes to undertake a contingent liability of £300,000 and above, for which there is no specific statutory authority, for the Department concerned to present Parliament with a minute giving particulars of the liability created and explaining the circumstances.

I regret that I have not been able to follow the usual notification timelines to allow consideration of these issues in advance of issuing the letter of credit, but the fast-moving nature of Bulb’s situation has required a rapid response to protect consumers.

Bulb entered the energy supply company special administration regime on 24 November 2021. Energy administrators were appointed by court to achieve the statutory objective of continuing energy supplies at the lowest reasonable practicable cost until such time as it becomes unnecessary for the special administration to remain in force for that purpose.

My Department has agreed to provide a facility to the energy administrators, with a letter of credit issued, with my approval, to guarantee such contract, code, licence, or other document obligations of the company consistent with the special administration’s statutory objective. I will update the House if any letters of credit are drawn against.

The legal basis for a letter of credit is section 165 of the Energy Act 2004, as applied and modified by section 96 of the Energy Act 2011.

HM Treasury has approved the arrangements in principle.

[HCWS425]