Bulb Energy: Administration

Kwasi Kwarteng Excerpts

Wednesday 24th November 2021 Commons Chamber

[Edward Miliband (Doncaster North) (Lab)]

(Urgent Question): To ask the Secretary of State for Business, Energy and Industrial Strategy if he will make a statement on Bulb Energy entering administration.

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

As many people in the House will know, when energy suppliers leave the market, the regulator, Ofgem, runs a competitive supplier-of-last-resort process. Last week, Bulb informed the Government and Ofgem that it would be leaving the market. Ofgem has advised that the supplier-of-last-resort process is not viable for Bulb because of the size of its customer book. Ofgem has, with my consent, applied to the court to appoint energy administrators. If appointed by the court, the administrators will continue to operate Bulb under what is called the special administration regime, which is set out clearly in legislation.

We will update the House once the court has made its determination, but I wish to clarify a couple of points. First, a special administration regime is a temporary arrangement that provides an ultimate safety net to protect consumers and ensure continued supply. The special administration regime will keep bills at the lowest cost that it is reasonably practical to incur while ensuring that the market remains stable. The House should understand that we do not want the company to be in this temporary state for longer than is absolutely necessary. Supplies remain secure and credit balances will be protected. Finally, all domestic customers in Great Britain are, of course, protected by the energy price cap, which remains firmly in place.

[Edward Miliband]

It is right that the Secretary of State has been forced to come to the House: 18 companies have gone bust since he last came to the House in respect of this issue, in September, and reassured us that there was nothing to worry about.

I have a series of questions. First, what is the Secretary of State’s estimate of the scale of costs the taxpayer faces as a result of the Bulb bail-out? That was not clear from his statement, but this is a taxpayer bail-out and the public deserve to know. Will he level with people about the costs that bill payers are going to have to pick up from all the other companies that have failed since September? How much will bills increase as a result?

Secondly, we are now in a position in which companies have banked profits but losses stretching to hundreds of millions incurred by those same companies are being borne by taxpayers and bill payers. So many companies going bust in just two months—something not happening anywhere else in the world—points to a systemic failure of regulation. Firms took risky bets and were allowed to do so, and the Government and Ofgem significantly deregulated the conditions of operation in 2016. Will the Secretary of State now take responsibility for this clear failure of regulation? Does this not suggest that there needs to be a proper review of the regulation of the market?

Thirdly, there is a global dimension to gas price rises but the truth is that we are more exposed as a country because of failures on onshore wind, solar, energy efficiency and gas storage, which is just 2% of our annual demand compared with 25% in other countries. Will the Secretary of State admit that Government inaction over the past decade has left us more vulnerable?

Finally, on the cost-of-living crisis, with further energy price rises coming, why are the Government making the situation worse with cuts to universal credit, by raising national insurance and by refusing to bring some relief by cutting VAT on energy bills? With businesses being hit, too, where is the support that he indicated was coming more than a month ago for energy-intensive industries?

We have seen a failure of policy over a decade, a failure of regulation and the Government making the cost-of-living crisis worse. Is not the truth that this Government cannot be the answer to this energy crisis because it is their crisis? It is businesses and families who are paying the price.

[Kwasi Kwarteng]

On a point of fact, the number is actually 22 companies, not 18, and I refer back to that—[Interruption.] No, that is the figure. That shows the incredible resilience of the systems that we have in place. We have the supplier of last resort, which has worked very effectively, and, as I outlined in my statement, we also have the special administration regime, which was designed precisely to deal with situations such as the one we are now in.

On regulation, Ofgem has launched a review of the retail market and how it operates. I will be directly involved in that and will study it very closely.

The right hon. Gentleman talks about the global market and the situation we are in post covid; he and his party predicted record levels of unemployment and recession, and of course they were completely wrong—they were absolutely wrong. We are growing the economy stronger than any other country in the G7. We are also creating jobs and creating investment, so the right hon. Gentleman’s prophecies of doom were completely misplaced, and he is completely without any firm arguments over our response to what was a global pandemic.

[John Redwood (Wokingham) (Con)]

What action has the Secretary of State taken to ensure that, in future, there will be more UK domestic gas to replace unreliable and expensive imported gas, and what action is he taking to expand the capacity of our generating system for the days when the wind does not blow and the sun does not shine?

[Kwasi Kwarteng]

My right hon. Friend will know that this is the first Government in about 25 years or more who are firmly committed to nuclear power. He will understand that the Cabinet expenditure—the long-term commitment to nuclear power—will not necessarily bear fruit in a week or a month, but for the first time, we have made a very dramatic 100% commitment to increasing our nuclear capacity. That answers his point about security of supply overall.

In terms of gas, I am pleased to announce that I and the Minister of State, my right hon. Friend the Member for Chelsea and Fulham (Greg Hands), are driving the North sea transition deal. The key to that is transition—about trying to transition to net zero while securing jobs and security of supply from gas in the UK Continental Shelf. These are things of which we are apprised.

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

In 2018, there were more than 70 companies in the energy retail sector, but now there are fewer than 30—a reduction of 60%. Bulb is the 23rd company to go bust since August, a statistic that, somehow, the Secretary of State seemed to be happy about when he was at the Dispatch Box earlier. When are this Government going to get a grip on what is now a cost of living crisis and an energy supply crisis? As energy bills soar, the Treasury gets extra VAT, extra income on fuel duty, and, on top of the £350 billion-worth of oil and gas revenues from Scotland that it gets to squander, an extra £1.1 billion more that it predicted this year alone, because gas prices have increased, so when will it reinvest some of that money to support consumers and the sector?

Bulb was the seventh largest company, with 1.7 million customers. What is the plan for coming out of special administration, because the Secretary of State has still not told us that? When EDF, Scottish Power, Octopus Energy, Utilita and Good Energy all say that they cannot afford new customers, what will happen with these customers? Can the energy companies actually refuse to take new customers, and what discussions is the Secretary of State having on that?

The Secretary of State says that the energy cap is here to stay, but what will be the effect on consumers in fuel poverty when the cap invariably goes up by £400 to £600 in April? It is a disgrace. The Government have allocated £1.7 billion of taxpayers’ money to develop Sizewell C to final investment stage. Why not invest that money in energy efficiency and renewable energy and do stuff that actually brings down energy bills, rather than committing consumers to a 10 to 15-year contract for nuclear and six years on top of that? When will they get a grip on energy policy as a whole?

[Kwasi Kwarteng]

This is where the hon. Gentleman and I disagree. We are firmly committed to nuclear power; he is against it. We can do two things: we can commit to renewables, as we are doing with our 10-point plan, and commit to 40 GW of offshore wind. I hope that he recognises that we are committed to tidal for the first time in many decades—that is something that he should appreciate. He should also remember that we have the warm home discount and lots of mitigations protecting the most vulnerable customers across the winter and in the next few months.

[John Penrose (Weston-super-Mare) (Con)]

I welcome the Secretary of State’s commitment to making sure that this temporary measure is indeed temporary, and I encourage him to make it as short as possible. I also welcome his commitment to the ongoing use of the price cap, but I urge him when the price cap legislation comes up for renewal in the next 12 months to think very carefully about reform in order to make the price cap much more fit for purpose. At the moment, it is not doing what we need it to do. We have companies going bust and an ongoing problem with the loyalty penalty, which was, after all, one of the key reasons for introducing it in the first place.

[Kwasi Kwarteng]

My hon. Friend will appreciate that Ofgem, as I alluded to in my statement, has already launched a consultation on precisely the issue of the retail price gap. It will be driving that forward and I am sure that his input will be welcome. We have had lots of mitigations to protect the most vulnerable consumers, but we clearly need to have a discussion about the retail market. Ofgem is leading that discussion and my Department is supporting a closer look at the retail market.

[Jessica Morden (Newport East) (Lab)]

The Secretary of State mentioned the particular arrangements for Bulb customers, but constituents who have been moved from other energy suppliers that have collapsed—there were 21 when I mentioned this issue at business questions last week—are now facing long delays in being set up with suppliers of last resort, so they do not know what their bills are going to be, they face accumulating debt and they may miss out on the warm home discount. What are the Government doing to address that?

[Kwasi Kwarteng]

I am happy to talk to the hon. Lady about specifics in her constituency. The supplier of last resort process was set up for precisely this process. Generally, it is working, and customers have been successfully transferred to new suppliers.

[Bob Blackman (Harrow East) (Con)]

I welcome my right hon. Friend’s attention to detail on this issue. One of the problems is that gas prices have dramatically increased across the world and we have to cope with that. What is he doing to ensure that we increase the supply of gas so that the market then reduces overall prices?

[Kwasi Kwarteng]

The House should understand that we have a security of supply. For example, in 2020, 50% of the gas was from the UK continental shelf, 30% was from Norway, 18% was essentially shipped and 2% came from interconnectors. That is a diversity and security of supply that other countries in the EU and on the continent frankly do not have. My hon. Friend will also appreciate that the supplier of last resort process and the energy price cap have protected consumers considerably through this difficult period.

[Alex Sobel (Leeds North West) (Lab/Co-op)]

Hundreds of my constituents have been in touch with me over the last few months as their energy suppliers have collapsed. As the Secretary of State said, 22 suppliers have now collapsed. We are moving back to an oligarchy of energy companies that are increasing their profits, while the supplier of last resort is socialising losses. What is he going to do to fix the broken energy market? This winter we are going to have a perfect storm of rising wholesale prices and collapsing companies. How is he going to resolve that, so that people do not end up in fuel poverty?

[Kwasi Kwarteng]

I do not agree with the hon. Gentleman’s characterisation; I do not think that we are going back to an oligopoly, as he said. I have always maintained that competition is essential in this market. As my hon. Friend the Member for Harrow East (Bob Blackman) alluded to, there has been a huge mismatch between the wholesale price and the retail price cap. The retail price cap is there to protect consumers, otherwise we would have seen a huge increase in consumer prices and the hon. Gentleman’s constituents would have been under even more pressure.

[Craig Mackinlay (South Thanet) (Con)]

I have been on something of an energy nomadic experience over the last few months. I started with Avro Energy a few months ago, but that went bankrupt and I was converted domestically to Bulb, and I am now in the support scheme within the space of three months. There was a 12% energy price rise at the last round, in August. Who knows what it will be in April next year? The policy of trying to sell ten pences for sixpence does not last very long. What we are going to see over this winter is the Treasury—that is, the taxpayer—making up the difference for these spot prices versus the reality of what energy is being sold for to domestic users. Will my right hon. Friend please see the vision that the only bridging energy supply, of which we have a lot domestically, is gas? We all want net zero sometimes, but it is not going to happen tomorrow; it is going to take a generation to get there. We have a domestic supply that can bring us the two key planks of energy: security of supply and affordability. Domestic users and the industry need that immediately.

[Kwasi Kwarteng]

I have two points in response to my hon. Friend. First, I am not embarrassed about the retail price cap. It has protected consumers effectively and we are proud to maintain it. On the security of gas, I could not agree with him more, but he should be addressing his comments to other Members of this House, who want essentially to shut down the UK continental shelf. We had a North sea transition deal precisely because we recognised that the transition would take a number of years.

[Layla Moran (Oxford West and Abingdon) (LD)]

The fact that another energy supplier has gone under is causing huge anxiety for constituents everywhere, who will be equally concerned that the supplier of last resort process has not worked in this case. Will the Secretary of State reassure them: how many other energy suppliers is he concerned about this winter and how many customers would that represent? If this process is not working, is he considering a Northern Rock-style energy company to take on customers of companies that have gone under, given that the process has not been working in this case?

[Kwasi Kwarteng]

As I have maintained, there are two forms of remedy to deal with this sort of situation: the supplier of last resort, and a special administrative regime. In the particular instance that is the subject of the urgent question, it was felt by Ofgem, not the Government, that the supplier of last resort mechanism was inappropriate, and we are therefore looking at the special administrative regime, as I said in my statement—but both the structures are working.

[Mary Robinson (Cheadle) (Con)]

This will be a worrying time for Bulb customers, who will be concerned not only about the continuity of their supply, but about the protection of the payments that they have already made. Many of my constituents were with Avro and have been in touch with me, concerned about whether the payments that they have made by direct debit will be translated into future payments. Will the Secretary of State give them some reassurance that their payments have been and will be protected?

--- Later in debate ---

[Kwasi Kwarteng]

I mentioned in my initial response to the urgent question that consumer balances will be protected throughout the process.

[Chris Bryant (Rhondda) (Lab)]

The Secretary of State keeps on saying that it is all working, but to be honest, it does not feel like it is. I do not think that I have ever seen such an example of Government complacency at the Dispatch Box as bad as this. The truth of the matter is that millions of people are worrying about what their bills are going to be, businesses are going to struggle and 22 companies have gone under. How on earth is that, “Yes, it’s all working perfectly”? Will he please answer one simple question, to which taxpayers will want to know the answer: how much is the Government bail-out going to be in the end?

[Kwasi Kwarteng]

I will answer the hon. Gentleman’s latter question. There is no Government bail-out; the poor, failing companies have not been bailed out—I want to reiterate that. If he knows anything about the energy market, he will know that over the last few years, six or seven companies have exited the market and were dealt with through the supplier of last resort process. The stresses of this particular gas price situation—which, I remind hon. and right hon. Members, quadrupled in the last six months—meant that there was more pressure this year, but the system and structure of the supplier of last resort process and the special administrative regime are working.

[Mr Philip Hollobone (Kettering) (Con)]

The Kettering parliamentary constituency generates enough renewable energy from wind and solar to power all 45,000 local homes, and is one of the greenest constituencies in the whole country. If we are to reduce our exposure to volatile international gas prices, is it not crucial that we do more to diversify our source of supply?

[Kwasi Kwarteng]

Absolutely. My hon. Friend will be happy to realise that that is exactly what we are doing through the 10-point plan, with commitments to offshore wind, solar power, nuclear power and other technologies. It is a huge imperative for us—and for me as Secretary of State—to ensure that we have a diversity of supply.

[Peter Grant (Glenrothes) (SNP)]

Bulb was the seventh largest energy supplier in the United Kingdom. How much bigger does a supplier have to be before it is too big to be allowed to fail? What are the Secretary of State and his Cabinet colleagues going to do to ensure that the cost of this market failure is not borne by ordinary families, who are already struggling to pay their fuel bills this winter?

[Kwasi Kwarteng]

The hon. Gentleman makes a point about Bulb. It was a very large company, which is precisely why the supplier of last resort was not felt to be an appropriate mechanism in this instance. [Interruption.] Hon. Members chunter from a sedentary position. The solution is the special administrative regime, which I outlined—I hope, clearly—in my initial statement.

[Karl MᶜCartney (Lincoln) (Con)]

My right hon. Friend the Secretary of State has made various references to nuclear power and it is great to hear that there is a mix and a commitment to nuclear power. How long is it since the latest round of commissioning of nuclear power stations that the last nuclear power station was commissioned and how many more are planned in the future?

[Kwasi Kwarteng]

Being a close student of the energy White Paper, as I am sure he is, my hon. Friend will know that we have had a commitment to invest in one more large-scale nuclear project before the end of the Parliament. He will also know that we have committed to small modular reactors. I was very pleased to go to Sheffield to make that announcement only last week. Nuclear is clearly a big part of our energy mix and will help us in the future.

[Sammy Wilson (East Antrim) (DUP)]

The Government’s headlong rush to net zero is already showing through in people’s fuel bills and levels of fuel poverty in the United Kingdom. Despite what the Secretary of State has said about licences to help through the transition period, we will still be reliant for 50% of our gas on outside sources, which does not give us energy security. At the same time, we have enough gas under the ground in the UK to keep us totally supplied for the whole country for 150 years, which could help the levelling-up agenda in the north-west of England, and help my constituents who currently find themselves at the end of a very expensive pipeline and are very vulnerable. Why are the Government not prepared to exploit the resources that we have to deal with fuel poverty and fuel security and to help the levelling-up agenda in poorer parts of England?

[Kwasi Kwarteng]

I do not apologise for the net zero agenda. We saw big strides at COP26. We could have gone further. That is an area in which we are showing leadership and that is something we should be proud of. On, as the right hon. Gentleman put it, exploiting gas resources, we looked at fracking. There were issues with regard to the Richter scale, earthquakes and that sort of thing. People objected to that and we imposed a moratorium. But I am very happy to discuss this issue with him if he wishes.

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

The UK Government are responsible for families facing a cost of living crisis due to the triple whammy of rising gas prices, looming tax rises and cuts to universal credit. Thankfully, in Wales, our Labour Government are providing an additional one-off cash payment of £100 for vulnerable households to support them in paying their fuel bills this winter. This Government are more concerned with bailing out energy companies like Bulb than supporting the most vulnerable. Will the Secretary of State do the right thing and follow Wales’s lead in supporting the most vulnerable in fuel poverty?

[Kwasi Kwarteng]

Supporting the most vulnerable is exactly what we are doing through the warm home discount and the extension to it. That is exactly why we have maintained the energy price cap, which many of the companies have protested against. We are always mindful to protect consumers and to protect the most vulnerable.

[Alison Thewliss (Glasgow Central) (SNP)]

The Federation of Small Businesses has found that 77% of Scottish businesses have seen an increase in their overheads since this time last year, and fuel costs make up a huge proportion of that. What assessment has the Secretary of State made of the likelihood of these costs being passed on to consumers, who are also paying higher prices at the tills because of inflation and Brexit?

[Kwasi Kwarteng]

One word that the hon. Lady did not mention was covid. As a consequence of covid, my right hon. Friend the Chancellor of the Exchequer has put £400 billion into the economy to support the very businesses that she refers to. Many, many of the businesses in Scotland have been supported by that.

[Catherine West (Hornsey and Wood Green) (Lab)]

Just since the Budget, several companies have gone under. Will the Secretary of State inject some urgency into this matter and look again at the suggestion, now that the Treasury has the freedom to do so, to lift the VAT burden both on households and on small businesses, so that we could have an immediate lift that will happen in this country regardless of what is happening to global prices?

[Kwasi Kwarteng]

The hon. Lady will appreciate that matters to do with taxation, VAT and all those things are subject to the Chancellor of the Exchequer’s departmental policy. She will also know that there is urgency about this. I speak to Ofgem every day. We monitor the market extremely closely. We are looking at how the supplier of last resort process is working—it is working reasonably well. As I have said, we are looking at the special administration regime with regard to Bulb.

[Clive Efford (Eltham) (Lab)]

This is not happening in other countries. If this is evidence of the system working, I would hate to see it if it was not working. The Government have ruled out any bail-out from the Treasury. Will the Secretary of State give the same undertaking that customers will not be forced to pay huge bills in order to pay for the Government’s failure of regulation?

[Kwasi Kwarteng]

I would like to point out that an energy price cap such as we have does not occur in other countries, so consumers here are being protected. Many of those who are actually bearing the brunt of this crisis are the very firms that, for whatever reason, have had to leave the market. The structure is working. It is protecting consumers, and companies that have fallen foul of these very high prices have been forced out of the market.

Innovation Loans

Kwasi Kwarteng Excerpts

Monday 22nd November 2021 Written Statements

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

Innovation is central to tackling the largest challenges the world faces, from climate change to global pandemics. The UK must be in the vanguard of the response to these challenges. That is why the Government have placed innovation at the heart of our Plan for Growth including through our Innovation Strategy.

The UK has a long and illustrious history of world-leading innovation, from the industrial revolution to the vaccine development of the past year. Now we have left the EU, we can move even more quickly to respond to emerging challenges and global opportunities, and cement the UK’s position as a world leader in science, research and innovation. That is why the Government committed to public R&D spending reaching £22 billion in 2026-27. This represents the fastest ever sustained uplift in R&D funding, increasing R&D funding to £20 billion per annum by the end of the SR period, £5 billion more than 2021-22.

Following a successful extended pilot with businesses including those in clean growth tech, Innovate UK will deliver a new programme of £150 million in flexible, affordable and patient innovation loans over the next three years. Innovation loans will help SMEs to take their late-stage R&D, including in support of net zero, to commercial success so that they can grow and scale through innovation.

[HCWS408]

Oral Answers to Questions

Kwasi Kwarteng Excerpts

Tuesday 16th November 2021 Commons Chamber

[Stephen Metcalfe (South Basildon and East Thurrock) (Con)]

1. What progress his Department has made on delivering the “Life Sciences Vision”.

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

The “Life Sciences Vision” outlined our bold ambition to bring scientific excellence and the dynamism of industry together to solve the most pressing health challenges. I am delighted to say that since the strategy was published we have already launched a £200 million life sciences investment programme and established the life sciences scale-up taskforce.

[Stephen Metcalfe]

I welcome the record research and development settlement for my right hon. Friend’s Department that was delivered during the spending review, a good chunk of which will, I hope, support investment in health and life sciences. Does he agree that our world-class life sciences base has been and will be our defence against future pandemics? Will he comment on his Department’s plans to locate more life sciences manufacturing facilities in the UK, so that we are less reliant on a global supply chain?

[Kwasi Kwarteng]

I fully agree with my hon. Friend that world-class life sciences are vital, and I am pleased to confirm that we have already allocated £354 million in the spending review to strengthen the UK’s life sciences manufacturing base, with particular emphasis on preparing for future pandemics.

[Darren Jones (Bristol North West) (Lab)]

It has been reported that the Prime Minister is minded to split up the Secretary of State’s Department so that he can better deliver on the Department’s priorities. Does the Secretary of State agree on that?

[Kwasi Kwarteng]

I think it is absolutely vital that the net zero agenda—the climate change action agenda—is situated firmly in a Business Department, and I am delighted to head that Department.

[Mark Logan (Bolton North East) (Con)]

I have two questions for the Secretary of State. What role can life sciences play in the Advanced Research and Invention Agency? What role can Bolton play in ARIA?

[Mr Speaker]

We are meant to have only one question.

[Kwasi Kwarteng]

My hon. Friend smuggled a leading question into his first question. He knows that ARIA is a key part of our strategy to become a science superpower, and he and I can discuss the role that Bolton will play in that exciting future.

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

The “Life Sciences Vision” has dementia as its first mission. The Conservative manifesto committed to doubling research funding in a dementia moonshot, but the Budget ignored it. The UK Dementia Research Institute called this

“a major blow to UK neuroscientists racing to find cures for these devastating diseases”.

Alzheimer’s Research UK said that this

“lets down the nearly one million people in the UK affected by this devastating condition.”

So will the Secretary of State now set out a clear timetable for doubling dementia research funding, as Labour has? Or is the “Life Sciences Vision”, like the R&D road map, the industrial strategy, the innovation strategy, the grand challenges and Northern Powerhouse Rail, all talk and no action?

[Kwasi Kwarteng]

I completely refute the hon. Lady’s allegation that those things are all words. The innovation strategy is the first of its kind. It has been broadly welcomed across the sector, and she will know that dementia is one of the seven technologies in engineering and biology that we are pursuing in the innovation strategy.

[Ian Levy (Blyth Valley) (Con)]

2. What steps his Department is taking to help support the generation of offshore wind energy.

[Lia Nici (Great Grimsby) (Con)]

19. What steps his Department is taking to help support the generation of offshore wind energy.

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

The Government recently announced £380 million for our world-leading offshore wind sector, which is boosting jobs and investment across the UK. My hon. Friend will know that the allocation round 4 opens in December, and we are very much looking forward to the bids in that round.

[Ian Levy]

The House has often heard me talk about Blyth Valley being at the heart of the green industrial revolution. Catapult, in the Port of Blyth, has tested the largest windmill blades in the world for years. We need to continue to be at the forefront of blade testing, to hold our No. 1 position on the global stage. Will my right hon. Friend agree to meet me and the management team from Catapult to make sure that we continue to lead in the race to a greener future?

[Kwasi Kwarteng]

I would be delighted to see my hon. Friend and the great people who are working on the Offshore Renewable Energy Catapult in Blyth. It is a fantastic development and the people working there will surely allow us to hit the 40 GW target for offshore wind in 2030.

[Lia Nici]

As the Secretary of State knows, Great Grimsby is the UK’s largest centre for offshore wind operations and maintenance. The £160 million announcement for floating offshore wind was very welcome. Does he believe that the time is right to increase our ambitions for that power supply to above 1 GW, which would increase investors’ confidence?

[Kwasi Kwarteng]

I am delighted to see my hon. Friend, who I accompanied in her constituency shortly after her stunning victory in 2019. She will know that I and the Department are fully committed to ensuring that we have increased ambitions. We are always looking to increase our ambitions.

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

I welcome what the Secretary of State says about wind power—we are proud in Cumbria to be at the heart of offshore wind—but does that not contrast negatively with the Government still sitting on the fence about commissioning a new coalmine in west Cumbria? Given the incredibly disappointing outcome on coal from COP26, is this not a moment for the UK Government to take a lead and say that the coalmine will not open?

[Kwasi Kwarteng]

First, the hon. Gentleman will understand that the coalmine is a matter of an independent planning decision. Secondly, I completely deny his assertion that somehow COP26 was a failure. It was not. It was a great success, thanks to the COP26 President, my right hon. Friend the Member for Reading West (Alok Sharma). Huge commitments were made, which everyone is supporting.

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

Tapadh leibh. Scotland’s offshore islands could produce as much energy each day as some EU countries are sending to the United Kingdom. When will we see contract for difference levels match interconnector requirements? The Secretary of State knows about this subject. Will that come soon, especially for the Hebrides? I say gently to him that, as he knows, probably no other country in Europe would be squandering this opportunity.

[Kwasi Kwarteng]

The hon. Gentleman knows that I am fully committed to remote island wind. In fact, when I was Energy Minister, I spearheaded the move to have a separate pot for renewable island wind. He lobbied successfully, and I am happy to speak to him about that at any time of his choosing.

[Paul Howell (Sedgefield) (Con)]

Does my right hon. Friend agree that the recent comprehensive spending review and Budget announcement shows that the Government are delivering an historic increase in R&D investment to build back better with a high skill and wage economy for all of the UK? That is very much reflected in NETPark in Sedgefield, which he had the pleasure of visiting recently.

[Kwasi Kwarteng]

I was delighted to see my hon. Friend in his constituency and to see the wonderful businesses that he is promoting. He will know that the CSR is fully committed to driving our science superpower status through unprecedented investment.

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[Darren Henry (Broxtowe) (Con)]

11. What steps his Department is taking to support the renewable energy sector.

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

We are holding the largest ever contracts for difference round next month, as my hon. Friend is aware, and only last month we confirmed up to £160 million to support investment in the floating offshore wind industry.

[Darren Henry]

The Government have quite rightly taken action to accelerate uptake of electric vehicles by both subsidising those purchasing a new electric car and banning the sale of petrol and diesel vehicles from 2030. However, in my capacity as co-chair of the all-party midlands engine group, I recognise that vast areas of the midlands are insufficiently served with charging infrastructure. The Midlands Engine’s 10-point plan for green growth looks to tackle this issue. Will the Minister meet me to discuss how we can support the Midlands Engine Partnership, deliver greener transport, create jobs, and cut emissions?

[Kwasi Kwarteng]

I would be very happy to meet my hon. Friend and the Midlands Engine Partnership to discuss how we can decarbonise our economy. I know he does a fabulous jobs as co-chair of the APPG. I have always enjoyed my engagement not only with him but with the Midlands Engine Partnership.

[Sammy Wilson (East Antrim) (DUP)]

Does the Secretary of State at least accept that immediate environmental damage is being caused by the pursuit of renewable energy, with 13 million trees cut down in Scotland for wind farms, forests devastated across the world to produce ethanol for petrol, and Drax power station importing millions of tonnes of wood from America each year? Does he not accept that in an attempt to control the world’s climate, we are actually damaging the environment right now?

[Kwasi Kwarteng]

The right hon. Gentleman and I have exchanged differing views on this subject over many years now. What I do accept is that our drive—our push—for renewables is leading the world in pursuing a decarbonised economy.

[Jacob Young (Redcar) (Con)]

The Secretary of State is well aware that Teesside is the centre of the green industrial revolution. In building new renewable energy capacity, can he confirm that he is happy to visit Teesside to see our plans for linking that renewable energy with green hydrogen production to power our homes in Teesside?

[Kwasi Kwarteng]

Perhaps to the surprise of the House, I can confirm that I am always delighted to visit my hon. Friend. I have done so on many occasions and I look forward to doing so whenever he wants and whenever my diary permits.

[Matthew Pennycook (Greenwich and Woolwich) (Lab)]

In a speech last month to the Energy UK conference, the Secretary of State made the case for a decisive shift towards clean energy and away from what he termed “volatile fossil fuels”, on which he said

“we are still very dependent, perhaps too dependent”.

Will he therefore explain how a decision by the Government to permit Cambo, an oilfield whose anticipated lifespan would see it still producing oil four years before we are legally bound to reach net zero, would be anything other than fundamentally at odds with that vision?

[Kwasi Kwarteng]

The hon. Gentleman will understand that the licences under which Cambo was permitted were actually granted when his own party was in government. He will also appreciate that I have always said that there will be a transition. He and his Labour associates want to shut down the industry and cause mass unemployment among the 250,000 people in this country who work in the sector.

[Paul Bristow (Peterborough) (Con)]

12. What steps his Department is taking to increase nuclear power generation.

--- Later in debate ---

[Munira Wilson (Twickenham) (LD)]

13. What steps his Department is taking to support greener, better-insulated homes.

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

We are decarbonising heat through the renewable heat incentive, with an estimated £1 billion this year, and we have announced the boiler upgrade scheme, the green heat network fund and the launch of the green gas support scheme later this month.

[Munira Wilson]

Zero carbon homes was a Liberal Democrat policy that the Tories scrapped after the coalition. That means we now need to retrofit a million new homes. Will the Secretary of State commit to a zero carbon homes standard once again for all new homes built in this country?

[Kwasi Kwarteng]

I am pleased to inform the hon. Lady that we have a heat and building strategy that sets out clear plans and clear ambitions for decarbonising heat, particularly sources of heat in buildings and in homes.

[Robert Largan (High Peak) (Con)]

14. What steps he is taking to support energy-intensive businesses.

--- Later in debate ---

[Robert Largan (High Peak) (Con)]

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

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

First, I congratulate the COP26 President, my right hon. Friend the Member for Reading West (Alok Sharma), on his adept handling of the COP26 negotiations in Glasgow. My Department’s priority now is to turn all that ambition into concrete action. We will continue to attract private investment into green projects, and I am happy to announce that in recent weeks we have seen nearly £10 billion of new commitments at the Global Investment Summit, with £1 billion from SABIC on Teesside, and £230 million announced by Ford on Merseyside. We are getting on with the job of delivering a stronger economy for the UK.

[Robert Largan]

I have recently been contacted by Prisma Colour, another fantastic local business in High Peak that does really important work. Unfortunately, it has been hit by a more than doubling of its energy bills in recent months, which is simply not sustainable. I welcome what the Government are trying to do in the long run to ease supply pressures and help energy-intensive industries to bring down bills, but what can be done in the short term to help fantastic employers such as Prisma Colour?

[Kwasi Kwarteng]

I pay tribute to my hon. Friend for the excellent work he has done in a short time, representing his constituency. He knows that across Government we have regular conversations about how to help energy-intensive industries, and I would be happy to meet him and his constituents to discuss what we are doing.

[Edward Miliband (Doncaster North) (Lab)]

I join the Secretary of State in commending the COP26 President on the progress made at COP26, but we know much greater action is required, and it is the Secretary of State’s job to ensure that every part of our Government acts. There is an immediate test with the UK-Australia trade deal: yesterday, the Australian Government reaffirmed their 2030 target, which is consistent only with 4° of warming, and there are reports that our Government have allowed the watering down of temperature targets in that deal. Surely, if we are serious after Glasgow about not letting big emitters off the hook, the deal must be rewritten to enshrine in it a proper plan for Australia as well as the UK, including for 2030, to keep 1.5° alive.

[Kwasi Kwarteng]

The right hon. Gentleman is absolutely right: we have a duty to ensure that we put net zero at the centre in treaties and in our international obligations. Where I dispute with him is that the Australian deal does mention Paris climate ambitions and does commit to decarbonisation. Lastly, for the first time ever, the Australian Government have committed to net zero. That is a huge achievement, which I wish he would support and endorse.

[Edward Miliband]

The Secretary of State should not be defending the Australian Government’s 2030 target. It is he who said about the negotiations:

“There may have been an issue about specifically putting the 1.5° on the face of the negotiating mandate.”

It is time for the Government not only to talk tough, but to act tough, because we must put pressure on countries such as Australia. There is a clear pattern of behaviour here on climate. Too often, this Government face both ways: the Cumbria coal mine, the Cambo oil field, cutting overseas aid for the most vulnerable countries, cutting air passenger duty for domestic flights and failing to invest in green recovery at home. He is the man supposed to be in charge of ensuring the Government speak with one voice. Why does he think he is failing to do so? Is that the reason why people are calling for the COP26 President to take back control of energy and climate change?

[Kwasi Kwarteng]

The COP26 President did a marvellous job, and the person speaking with two voices is the right hon. Gentleman. On the one hand, he says COP was a great success, and then on the other hand, he is saying the Government have failed. It is inconsistent and it is implausible.

[Simon Jupp (East Devon) (Con)]

T4. Cleaner and greener aviation is undoubtedly the future, and Exeter airport is at the forefront of innovation in aerospace. This summer, we saw the first hybrid electric test flight on a commercial route, between Exeter and Newquay, thanks to support from this Government and this Department. What further steps will my hon. Friend take to support innovative green aviation to help it really take off?

--- Later in debate ---

[Gareth Thomas (Harrow West) (Lab/Co-op)]

T2. A loophole in company law means that Bain Capital does not have to reveal how much it is paying the army of advisers helping it demutualise Liverpool Victoria. FTI Consulting, Clifford Chance, Fenchurch Advisory Partners and others have all benefited, perhaps by as much as £50 million or more. Does the Secretary of State not think that the members of Liverpool Victoria, whose money this is, have a right to know exactly how their money is being spent?

[Kwasi Kwarteng]

The hon. Gentleman will know, from his long experience in this House, that many of these issues relate to financial disclosure, which is obviously in the remit of my right hon. Friend the Chancellor. I am particularly interested in this deal. I think he is absolutely right that people who are shareholders and people who are customers have every right to transparent data, and I would very much support that.

[Lee Anderson (Ashfield) (Con)]

T6. Carl Berridge’s company in Ashfield produces energy-saving boilers and heating solutions for industry, and he tells me that many businesses are unaware that new technologies can substantially reduce their energy consumption in a cost-effective way. What are the Government doing to ensure that industry gets the right information and businesses such as Powergas have the incentives they need to reduce the carbon footprint of industry?

--- Later in debate ---

[Kirsten Oswald (East Renfrewshire) (SNP)]

T9. This UK Government are simply failing to support Scotland’s potential for green investment. We have heard as much today: the UK’s most advanced carbon capture and storage proposal shelved; grid connection charges punishing Scotland’s renewable energy projects; and funding for tidal power held up as the Prime Minister dithers. Having squandered £350 billion of oil revenues from the North sea, can the Secretary of State appreciate why there are concerns that his Government will simply do the same with our vast energy resources?

[Kwasi Kwarteng]

I remind the hon. Lady that this Government are the first UK Government to commit to a North sea transition deal. That deal is a world first; it is leading the world and showing how we can decarbonise a historically very productive sector to drive new technology and new economic opportunity.

[Dr Jamie Wallis (Bridgend) (Con)]

T10. I recently had the pleasure of meeting with Infinite Renewables in my constituency, which has done great work facilitating renewable projects across the UK. It pointed out to me that the strike price for nuclear power provides generous support to nuclear projects, but those supported by private wire power purchasing agreements in the renewables sector get very little support. What are the Government doing to facilitate private wire PPA renewables in the UK?

[Joanna Cherry (Edinburgh South West) (SNP)]

As my hon. Friend the Member for East Renfrewshire (Kirsten Oswald) said, Scotland’s world-leading carbon capture and storage project at St Fergus was snubbed by the Government in favour of their pork-barrel interests in the red wall. Will the Secretary of State guarantee the Acorn team funding in the next round, or should we conclude that Scotland can only decarbonise with independence?

[Kwasi Kwarteng]

Again, I have to completely refute what the hon. and learned Lady says. The position is absolutely clear: Acorn was an excellent project and is on the reserve list, and I am looking forward to working with her constructively to make sure we land this very exciting project.

[Jerome Mayhew (Broadland) (Con)]

The sooner the offshore transmission network is constructed in the southern North sea, the better. It will save money for consumers and limit the damage to local communities and the environment. So will the Minister commit to restarting the previously planned consultation on a regulated asset base finance model for renewables and low-carbon energy-generating assets as soon as possible?

--- Later in debate ---

[Peter Aldous (Waveney) (Con)]

In Suffolk and Norfolk, investment in research and development is vital to making the most of the opportunities emerging in such sectors as low carbon and life sciences, as well as to tackling pockets of deprivation, particularly in coastal areas. It is thus concerning that, in the Budget Red Book, the east of England is coupled with London and the south-east as an area from which spending on R&D will be diverted and in which it will be discouraged. Will my right hon. Friend work with his colleagues across Government to ensure that this discrimination against Suffolk and Norfolk is removed and is not included in the levelling-up White Paper?

[Kwasi Kwarteng]

I pay tribute to the fantastic work that my hon. Friend has done representing his constituents over 11 and a half years. He will know that I personally, as a Minister, have always been committed to the east of England. I have visited him in Lowestoft, I have visited offshore wind projects, and I would be very happy to speak to him about how we can drive the R&D programme and how East Anglia and his constituents can benefit from the UK’s science superpower status.

[Ian Paisley (North Antrim) (DUP)]

Is it not the case that the most exciting industrial development in the UK at present is hydrogen production? Does the Secretary of State welcome the pioneering work by JCB, under Lord Bamford’s direction, along with the partnership with Queen’s University Belfast, to produce the first working hydrogen combustion engine, which has made the past the future? What support will the Secretary of State give to capitalise on that engineering excellence to ensure that British jobs and British tech flow from it?

[Kwasi Kwarteng]

The hon. Gentleman will be well aware that I am fully conscious and fully supportive of the great work that Mr Bamford and his colleagues are doing driving Wrightbus and driving the hydrogen economy. The hon. Gentleman may know that I am very shortly to visit to Northern Ireland to see that great work on the ground.

National Security and Investment Act 2021: Call-in Power

Kwasi Kwarteng Excerpts

Tuesday 2nd November 2021 Written Statements

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

The National Security and Investment Act 2021 protects the public from potential risks. It bolsters the UK’s status as an attractive place to invest by providing more efficient clearance processes for relevant acquisitions and more certainty and transparency for investors and businesses. It is a proportionate response to modern developments in international investment.

It will also ensure foreign direct investment projects can continue to boost jobs and stimulate the economy in every corner of the UK, as the vast majority of deals will be able to proceed without delay.

The Act provides for a call-in power which enables the Government to screen qualifying acquisitions for national security risks. In order to use the call-in power, the Secretary of State must—in accordance with section 3 of the Act—lay before Parliament, and publish, a statement on the expected use of the call-in power. This will provide clarity and certainty for businesses and investors on the circumstances in which national security risks are considered more likely to arise from qualifying acquisitions.

The Government consulted on a draft of the statement from 20 July to 30 August, in line with the commitment to consult given during parliamentary passage of the Act. I am grateful for the constructive responses which we received from businesses, investors, law firms and others.

I am today laying the statement before Parliament and publishing it alongside the Government’s response to the consultation. This fulfils the requirements of the Act and enables the call-in power to be used once the Act fully commences on 4 January 2022.

The statement should be read alongside other guidance documents which the Government have published about the NSI system, and further guidance will be published in the coming weeks.

I will place a copy of the Government response to the consultation on the draft statement for the purposes of section 3 in the Libraries of both Houses.

[HCWS368]

Income Tax (Charge)

Kwasi Kwarteng Excerpts

Thursday 28th October 2021 Commons Chamber

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

It is great to see you in the Chair again, Madam Deputy Speaker. I thank the right hon. Member for Doncaster North (Edward Miliband) for his congratulations on my becoming a father for the first time at the youthful age of—well, I will not say what my age is. I am pleased that that has happened.

I am also pleased to see the right hon. Member, in his usual way, give a comprehensive speech that lasted for nearly half an hour. The downside was that I had heard it all before. I was particularly gratified to see him at Prime Minister’s questions. It was great: a trip down memory lane. I remember being a humble Back Bencher, as he put it, when he did that same thing at PMQs. There was that same litany of doom and gloom, and it will prove no more effectual in 2021 than it did in 2015, when many of my hon. Friends were returned with enhanced majorities.

The Budget was an extremely successful occasion. It demonstrated clearly that there is continuing support for the economy. It demonstrated the immense, unusual and unprecedented interventions in the economy because of the dangers we faced from the global pandemic. The right hon. Member will remember that only a year ago people were prophesising that we would have record unemployment or early-1980s levels of unemployment. What happened? Because of the Chancellor’s interventions, well-crafted policy and the plan for growth, there was no employment disaster. Unemployment is very low by historical standards. The economy is growing faster than it has done for decades, and none other than the OECD says that the UK will be the fastest growing country among the G20 next year.

[Catherine West]

May I congratulate the Secretary of State on the happy news in his family? How many businesses does he think will go out of business this autumn because they owe the Government money from covid loans, cannot pay their energy costs and are worried about the weight that the increase in wages from the national minimum wage and national insurance contributions will put on their 12-month forecasts?

[Kwasi Kwarteng]

I thank the hon. Lady for her congratulations. However, I am surprised that she should express concern about the increase in the national living wage. I never thought I would live to see a Labour MP denigrate and decry that. We want to see a higher-wage, higher-productivity-based economy, and we are working hard to ensure that.

[Ms Karen Buck (Westminster North) (Lab)]

Will the Secretary of State give way?

[Kwasi Kwarteng]

Let me make some progress. To intervene so soon after an intervention is unusual. I will come back to the hon. Member.

During the pandemic, people and businesses have demonstrated remarkable levels of resilience. I fully agree with the right hon. Member for Doncaster North when he says that business has been heroic and people have been heroic. I am also immensely proud of the work done by the British Business Bank, for which my Department is responsible. Its schemes supported people and our economy to the tune of £80 billion, with Government-backed finance for 1.7 million businesses. That comes to the point made by the hon. Member for Hornsey and Wood Green (Catherine West). When it comes to the fundamentals of the economy, the Government are securing our economy and getting Britain back to work.

Contrary to all the prophecies of doom and gloom that recently came from Opposition Members, the Office for Budget Responsibility now expects our recovery to be quicker and the economy to return to its pre-covid level at the turn of this coming year. As the OECD and the International Monetary Fund show, there is considerable expectation that the UK will rebound strongly. In that context, our task turns to ensuring that our people and our businesses have ability and opportunity. They will not simply look back and complain about the situation that we have come through. They are positive and forward-looking. They believe in their country—unlike many Opposition Members, dare I say. We will achieve a strong rebound not by splashing cash indiscriminately as a number of Labour Chancellors did, dare I say, but by spending taxpayers’ money wisely to foster an environment that encourages innovation and growth.

I turn to the net zero agenda. I fully appreciate that many years ago the right hon. Member for Doncaster North was Secretary of State for Energy and Climate Change—I do not think I was in the House at that time—and I know that he shares the view that net zero is absolutely one of the most important strategic objectives of any Government.

[Wera Hobhouse (Bath) (LD)]

If the climate emergency really is the most important thing for the Government, why did the Budget not mention it once?

[Kwasi Kwarteng]

It did mention a huge amount of investment in the net zero agenda. The hon. Member should know by heart the Prime Minister’s 10-point plan, and that was 100% backed by yesterday’s Budget.

[Anna McMorrin (Cardiff North) (Lab)]

Will the Chancellor say in his speech at COP next week that, in his Budget, he made high-carbon domestic flights cheaper?

[Kwasi Kwarteng]

I gently suggest that the hon. Member looks at the work of the Jet Zero Council, which my right hon. Friend the Chancellor and I have been pushing. We want the UK to be the head of very low carbon emission flying. I am very enthusiastic about that. We will be leaders in that technology, and I do not think it makes sense simply to penalise and turn our backs on aviation. We should be trying to enhance aviation and decarbonise it, and that is exactly what we intend to do.

[Rachael Maskell (York Central) (Lab/Co-op)]

Will the Secretary of State give way?

[Kwasi Kwarteng]

I have to make progress. I know that hon. Members are springing up and down because they wish to make interventions, but I am sure they will be making speeches later in the debate.

We on the Government Benches understand what has sadly eluded the grasp of Opposition Members: we must create competition. We must back business and incentivise innovation in a free-market economy, not go back to a state-run, Soviet-style command economy.

The Labour party manifesto has been mentioned. I remember reading it. Like the right hon. Member for Doncaster North, I am somewhat of an insomniac—more so now, I dare say—so sometimes I have to read lots of these things. It said that we should get to net zero by 2030. As my hon. Friend the Member for Crewe and Nantwich (Dr Mullan) observed, even the unions that Labour is supposed to represent and that bankrolled it, rejected that proposal as completely unrealistic and destructive to our economy. That manifesto said not only that we should get to net zero by 2030, which is completely unrealistic, but that the state would own 51% of offshore wind farms. Imagine that. The right hon. Member for Hayes and Harlington (John McDonnell) said that, as Chancellor, he would nationalise 51% of offshore wind. I remember speaking to the industry, and it said, “Why on earth would we want to own 49% of what the right hon. Member for Hayes and Harlington owns 51%?” It was a completely absurd and unrealistic policy. On the green agenda and the net zero agenda, the Government have far more to offer the country than a souped-up, half-heated, Soviet-style approach to solving what is a fundamentally difficult problem.

For one year—so far—businesses in the retail, hospitality and leisure sectors will get a 50% discount on business rates. That is why my right hon. Friend the Chancellor decided that the business rates system should be more responsive and agile, with more frequent revaluations taking place every three years. That is a good, positive step that will give much more flexibility to the system.

I am also delighted to reflect on how the Budget told a great story about innovation. Innovation is a huge driver of productivity and progress, and unleashing innovation is a fundamental duty for my Department and for me as Secretary of State. We have launched Help to Grow, which will drive small and medium-sized enterprise productivity. We have also started a new co-investment venture capital fund that will be used to drive innovation and provide scale-up capital for businesses in need of that. The Budget confirms the eligibility criteria for our new scale-up visa, which all businesses I speak to, and small businesses in particular, say they need help in pursuing. We will unlock greater private sector innovation. We are reforming research and development tax reliefs to support modern research methods and to focus our minds specifically on the problem and challenge of innovation. Increasing R&D investment to £22 billion will confirm the UK as a science and technology superpower. We must make sure our small businesses, which after all are the heart of the British economy, have the support they need, which is why my right hon. Friend the Chancellor strengthened the British Business Bank in yesterday’s Budget, increasing its regional financing programmes to £1.6 billion and expanding its coverage, helping innovative businesses across the country get greater access to the finance that they need.

[Catherine West]

I welcome the British Business Bank and the fact that it has a regional focus, but what advice does the right hon. Gentleman have for businesses that are still in debt due to the covid loans they are struggling to pay back and therefore do not want to take on any more debt?

[Kwasi Kwarteng]

The hon. Lady makes a sensitive point. Nobody engaged in business wants to take on unsustainable levels of debt, but she will appreciate that the credit was offered in totally unusual circumstances; my right hon. Friend the Chancellor had to make decisions very quickly and we used the BBB to distribute that credit. No one is suggesting—not even anyone in the hon. Lady’s party—that the interventions and credit that was provided on good terms should not have been offered to many businesspeople. I am fully aware of the nature of the debt overhang and I am engaged with trying to think of ways of softening that, but the intervention was absolutely the right thing at the time. I must remind the House that many predictions of doom and catastrophe were mercifully avoided thanks to the timely and wise interventions of my right hon. Friend the Chancellor.

As well as supporting businesses, the Budget will protect the health, wealth and livelihoods of the British public. Under this Government, the proportion of people in low-paid work has fallen to its lowest level in 30 years. That is why I was so surprised to hear the hon. Member for Leeds West (Rachel Reeves) suggest that an increase in the national living wage was something to be regretted.

[Stephen Timms (East Ham) (Lab)]

Before the right hon. Gentleman leaves the business part of his speech, will he update the House on the latest provision of support for energy-intensive industries?

[Kwasi Kwarteng]

That is a very direct question and, as I have said, conversations are ongoing. I speak to the CEO of Ofgem on a daily basis and we are always looking at the situation in terms of gas and electricity prices and how we can mitigate those risks.

[Edward Miliband]

The right hon. Gentleman was asked a very direct question, as he said, by my right hon. Friend the Member for East Ham (Stephen Timms). The right hon. Gentleman acknowledged two weeks ago the very difficult situation of the energy-intensive industries and said that he had submitted a formal request to the Treasury. What has happened?

[Hon. Members]

They are ignoring it.

[Kwasi Kwarteng]

We are not ignoring anything. We are in active conversations, as we always are, on dealing with the situation. [Interruption.] Absolutely, we are completely as one on this, and we feel that, as my right hon. Friend the Chancellor said, we cannot simply bail out every single company—but we can provide a general context in which risks are mitigated.

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (George Freeman)]

We are not going to nationalise anything.

[Kwasi Kwarteng]

We are not going to nationalise anything; that is very true.

[Edward Miliband]

It is hard to follow that response from the Secretary of State; he said, “a general context in which…something, something.” Can he just answer the question: when are we going to know what help is available for energy-intensive industries, if any, and what kind of help is it going to be?

[Kwasi Kwarteng]

All I would say to the right hon. Gentleman is watch this space and let’s see what happens.

[Alex Cunningham]

Jam tomorrow.

[Kwasi Kwarteng]

The hon. Gentleman chunters from a sedentary position. I have visited his constituency—I have seen Teesside—and the picture of gloom, misery and devastation he paints is a total rejection of the optimism, dynamism and enthusiasm I see in Teesside. His negative attitude shows precisely why my friend the Mayor of the Tees Valley got 73% of the vote in the last election. [Interruption.] I am being told I am speaking loudly, but I am outraged that the hon. Gentleman should characterise his constituency in such poor and uninspiring terms; it is a disgrace.

[Alex Cunningham]

rose—

[Kwasi Kwarteng]

As well as supporting the Budget—

[Alex Cunningham]

The right hon. Gentleman makes an attack then will not give way.

[Kwasi Kwarteng]

I give way to the hon. Gentleman.

[Alex Cunningham]

I am grateful to the right hon. Gentleman for giving way. He talks absolute nonsense: I have spent 11 years championing energy-intensive industries in my constituency, trying to ensure people keep their jobs. He knows that, because I have met him and talked about it time and again, and what do I see? I see very little action. It is about time he got on the right horse, got down to Ofgem and started talking seriously about how we can put things right for energy-intensive industries in my constituency.

[Kwasi Kwarteng]

I was not making a personal attack on the hon. Gentleman’s role. If he had listened to what I said, he would know I was not commenting on his record as an MP; I was simply saying that the tone and negativity he expressed in that particular intervention in this debate did a disservice to his constituents. I was making a specific point.

[Richard Fuller]

To bring my right hon. Friend back to what the Opposition spokesperson, the right hon. Member for Doncaster North (Edward Miliband) was saying about the haste with which money can go to support my right hon. Friend’s plan for energy-intensive industries, is this not the same Labour Front Bench that was urging my right hon. Friend to give money to a business that is now under review by the Serious Fraud Office? Is my right hon. Friend’s prudence not therefore wiser than the rashness of the Opposition Front Bench?

[Kwasi Kwarteng]

That is a very good intervention. Labour Front Benchers were urging that £170 million from the UK taxpayer be given to a business that we now know has been recapitalised, has money from private creditors and is still operating. It would have been a disaster to sign away £170 million directly in the way they urged.

In conclusion, the Budget is a blueprint for a stronger Britain: a country where those with innovative ideas will get the support they need to turn them from dream to reality; a country where those whose talent is nurtured and whose skills are honed will get support, ongoing interest and strong engagement from the Government; a country where those who do an honest day’s work will receive a decent wage. We have every right to be confident about our future. We have listened to the litany of woe and despair for too long and, as my right hon. Friend the Chancellor said yesterday, we are optimistic and excited about the future of our country. Only a week ago at the global investment summit, people from across the world were desperate to invest in the UK; they believe in their bones that the UK is a great place to do business.

[Jim Shannon (Strangford) (DUP)]

Minister, my hon. Friend the Member for North Antrim (Ian Paisley) and I hope to have a meeting with you shortly on hydrogen and how it can be used to advance this great United Kingdom. Can you confirm exactly how it will benefit every part of Great Britain and Northern Ireland?

[Madam Deputy Speaker (Dame Eleanor Laing)]

Order. I remind the hon. Gentleman that he cannot address the Minister as “Minister”; he has to address him as “the right hon. Gentleman” or say “would the Minister?”, because when he says “Minister” that is second person, vocative case. He cannot say “Minister.” Other Members might know that the hon. Member for Strangford (Jim Shannon) and I have been having this conversation now for several years and it is my ambition that he will get it right, and one day he will.

[Kwasi Kwarteng]

We are very grateful for the long-forgotten grammar lessons administered from the Chair.

Hydrogen is important, and we have had debates on it in Westminster Hall and this place. I look forward to engaging with the hon. Member for Strangford (Jim Shannon) on this; I am due to visit Northern Ireland and I am sure we will have very constructive conversations.

The global investment summit was a huge success, and it was proof that, contrary to the picture of devastation, gloom and pessimism painted by Opposition Members, we are open for business as a country and attracting investment to a degree we have never seen before. It showed in the Budget yesterday that, as we race towards a new and brighter future, the Government will make driving economic recovery through private investment—that is central to this—a top priority. That is something I certainly commend to the House.

Development Consent Application under Planning Act 2008: AQUIND Ltd

Kwasi Kwarteng Excerpts

Thursday 21st October 2021 Written Statements

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

This statement concerns an application for development consent made under the Planning Act 2008 by AQUIND Ltd for the construction, operation, maintenance and decommissioning of the UK elements of a 2,000MW bi-directional subsea electrical power interconnector between Normandy in France and Lovedean in Hampshire.

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 original deadline for the decision on the AQUIND interconnector application was 8 September 2021. This deadline was previously extended to 21 October 2021.

I have decided to set a new deadline of no later than 21 January 2022 for deciding this application. Following receipt of the report from the examining authority, I required clarification from the applicant on several issues. Interested parties were given the opportunity to comment on the applicant’s response. I have decided that further work is necessary to consider the application in detail including whether further information is required, and this requires an extension to the deadline.

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

[HCWS348]

Gas Prices and Energy Suppliers

Kwasi Kwarteng Excerpts

Thursday 23rd September 2021 Commons Chamber

[Edward Miliband (Doncaster North) (Lab)]

(Urgent Question): To ask the Secretary of State for Business, Energy and Industrial Strategy if he will make a statement on rising gas prices and the collapse of energy suppliers.

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

I came before the House on Monday to update colleagues on the action we are taking, and I appeared before the Business, Energy and Industrial Strategy Committee yesterday to discuss the matter in greater depth. The Government have been clear that protecting consumers is our primary focus and shapes our entire approach to this issue. We will continue to protect consumers with the energy price cap.

The global gas situation has had an impact on some energy suppliers, and I have been in touch daily with Ofgem. As it set out yesterday, there are more than 50 suppliers in the domestic market, and we may, unfortunately, see more suppliers exit the market in the coming weeks. However, it is not unusual for energy suppliers to leave the market, for various reasons, particularly when wholesale global prices are rising. Ofgem and the Government have clear, well-rehearsed processes in place to make sure that all customers are supplied with energy.

Our approach will be informed by the following principles: protecting customers, especially vulnerable ones, from price spikes. The solution to this crisis will be found from the industry and the market, as is already happening, and I repeat that the Government will not be bailing out failed energy companies. We would like to see a competitive energy market that can deliver choice and lower prices. The energy price cap, which continues to protect millions of customers, will remain in place. Consumers come first, and that has always been the centrepiece of our approach.

[Edward Miliband]

On Monday, I said to the Secretary of State that he was being far too complacent about the situation we are facing. Events since have, unfortunately, borne that out: complacent about the crisis in the market; complacent about the impact on families; and complacent about the cost of living crisis. He pretended on Monday and again today that it was normal for a number of suppliers to go down each winter, but what we are dealing with is far from normal: 800,000 customers losing their suppliers yesterday alone and 1.5 million in the last six weeks. So will he now answer the question he has so far failed to answer: does he believe taxpayers’ money will be necessary to stabilise the market? If so, how will he ensure value for money and that we do not simply end up with greater concentration of the big six suppliers?

Next, I have a letter here that Ofgem wrote to the Secretary of State when he was the Energy Minister 18 months ago during covid, warning about

“systemic risk to the energy supply sector as a whole”.

It said the usual Ofgem mechanism, the supplier of last resort, may not be possible. It went on:

“The failure of medium and large suppliers would need to be handled via a special administration regime placing significant burden and costs on government.”

So will he answer the question of what planning was done for this eventuality following that letter? Surely the Government should be in a position now to know exactly what needs to be done where there is systemic risk to suppliers. Have they not left the country dangerously exposed, with them scrabbling around for solutions?

Finally, we are seven days from the cut to universal credit. This is the last time a Government Minister will be in the House explaining to millions of families why they are plunging them further into fuel poverty. Instead of warm words or platitudes, can the Secretary of State now tell the British people how he can possibly justify this attack on their living standards? Is it not the truth that there can be no defence of it, and that the only right, proper and fair thing to do is to cancel the cut?

[Kwasi Kwarteng]

Obviously, as usual, the right hon. Gentleman raises a number of issues. We have not been complacent. The whole point about the supplier of last resort process, which was interrogated last year, is that it is an organised, well-established process that can allow existing strong companies to absorb customers and failure. [Interruption.] If he would desist from chuntering from a sedentary position, he might actually hear my answer.

I remember the letter last year. We interrogated, all through the covid process, the systems we had in place. During that period, the supplier of last resort was found to work. So far this year, it has been found to work, so I am not going to try to talk ourselves into exacerbating the crisis.

With regard to the special administration regime, that is something that is in place. Thankfully, we have not had to use that, but the right hon. Gentleman knows as well as many people in this House that it is there should the case arise.

With respect to universal credit, I will say what I said earlier in the week. That is a matter across Government in terms of budgetary responsibility. There will be a Budget at the end of October and there will be plenty of time to discuss that then.

[Mr Mark Harper (Forest of Dean) (Con)]

May I press the Business Secretary a little on the Government assumptions on pricing? In his evidence to the Business, Energy and Industrial Strategy Committee yesterday, the head of Ofgem appeared to suggest that he expected these high prices to continue for some time. I accept that the Government do not have a crystal ball, but in making policy choices the Government must be making some assumptions about what they think is the most likely path for prices. Can the Business Secretary set those out for the House please?

[Kwasi Kwarteng]

As I have said repeatedly, I do not have a crystal ball, as my right hon. Friend has suggested, and I do not make predictions about the price but clearly, we prepare for every eventuality. The biggest help for consumers and customers at this current time is the energy price cap, which I have repeatedly stated is staying in place.

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

This is not market failure; it is Government and regulator failure. Ofgem all along had the financial and hedging information to know which companies were at risk, so why are we now in crisis management phase?

The Tories promised us cheaper energy bills post Brexit, but right now electricity wholesale prices in the UK are the highest in the whole of Europe. Meanwhile, as gas prices increase, the Treasury gets extra VAT receipts and increased oil and gas revenues. Surely, there must be a redistribution of that increased Treasury income to help hard-pressed bill payers. At the moment, it is those bill payers who cover the additional cost of transferring customers to other energy suppliers. They cover the credit of customers with failed companies and then have to pay increased tariffs when transferred. The cap might stay but the cap does not stop energy bills going up, so why should bill payers pay even more money when the Treasury is getting increased revenue out of this? What is the additional estimated cost for bill payers?

A quarter of our electricity bills consist of levies, so as we move away from our reliance on fossil fuels, we need a fundamental shift in how that concession is paid for. That is something that the Treasury needs to address. It means ending the grid charging regime so that Scotland does not have the highest charges in Europe, and it means giving the go-ahead to pumped hydro storage in wave and tidal.

Finally, is the Secretary of State happy to sit by while the cost of living crisis is ongoing? Is he happy to plunge 500,000 extra people into fuel poverty, or will he fight the Treasury to end the universal credit cut and release extra money to help hard-pressed bill payers?

[Kwasi Kwarteng]

Clearly there was a lot in that question and statement. I will deal with a couple of issues, if I may.

With respect to universal credit and wider budgetary considerations, I have repeatedly said that they are matters for my right hon. Friend the Chancellor. We will have ample opportunity to discuss these things in the House. With respect to the move away from fossil fuels, the hon. Gentleman and I are in agreement: I think that we need a diverse supply of decarbonised sources of energy.

Finally, I dispute the idea that we are ill-prepared. We have the SOLR and SAR processes in place and we stress-tested them throughout the whole covid period, when I was in constant contact with the industry. I feel that so far we have managed to accommodate such supplier failure as we have seen with existing structures.

[Joy Morrissey (Beaconsfield) (Con)]

Will my right hon. Friend confirm that the cold weather payment scheme will remain in place?

[Kwasi Kwarteng]

Again, there are further budgetary issues, but I have always said that we are absolutely focused on customers, particularly the most vulnerable customers. The warm home discount is staying and we are looking to protect the most vulnerable customers, particularly prepaid customers, from the worst effects of the energy price spike.

[Stephanie Peacock (Barnsley East) (Lab)]

On Monday, the Secretary of State dismissed our lack of gas storage as “not…relevant”. It has clearly left us vulnerable, so will he now admit that the closure of the Rough storage facility was a mistake?

[Kwasi Kwarteng]

I do not think that it is relevant, because there is no way that any storage in the world will mitigate the effect of a quadrupling of the gas price in four months, as we have seen. The answer is actually getting more diverse sources of supply and electricity through non-carbon sources—through nuclear, on which I am still very unclear as to the Opposition’s view, and through other sources of decarbonised energy.

[Sir Christopher Chope (Christchurch) (Con)]

Why do we not reduce VAT on fuel as a temporary measure? We did it for the hospitality industry, which was badly affected by covid-19. Why do we not abolish VAT for consumers on fuel now?

[Kwasi Kwarteng]

My hon. Friend is quite right: we did a whole range of interventions to alleviate the burden on consumers and on businesses. Those were fiscal interventions that the Chancellor pursued last year, and I am sure that he is looking at a range of things this year, but that is a matter for him to decide ahead of the Budget.

[Mr Alistair Carmichael (Orkney and Shetland) (LD)]

What are the implications of the situation for the exploitation and extraction of gas within the UK continental shelf?

[Kwasi Kwarteng]

The right hon. Member will know that, in 2020, 48% of our natural gas came from the UK continental shelf, so that is clearly a strong, sustainable source of gas to this country. However, I suggest to him that gas is a transition fuel: in our pursuit of net zero by 2050, we want to transition away from it. That is why we are developing carbon capture and hydrogen, as he knows very well.

[Robert Halfon (Harlow) (Con)]

Further to the question that my hon. Friend the Member for Christchurch (Sir Christopher Chope) asked, surely the Conservative answer—I raised this the other day—is to reduce VAT on energy bills, as was pledged by those who supported Brexit in the EU referendum. I know that the Secretary of State will say that it is up to the Treasury to decide, but he is very persuasive. He is a tax-cutting Conservative—he believes in tax cuts—and I know that, if he went to see the Chancellor, he would ensure that we got a VAT cut on energy bills.

[Kwasi Kwarteng]

I see the Chancellor on a regular basis, as my right hon. Friend knows, and I am delighted to inform him that those conversations tend to be confidential.

[Matt Western (Warwick and Leamington) (Lab)]

The UK suffers from higher costs both for consumers and for our businesses and industries. Why then, to follow the point of my hon. Friend the Member for Barnsley East (Stephanie Peacock), is the UK’s storage capacity just 2% of annual demand versus an average of 25% in Europe? Is that part of the reason why we do not have energy price resilience?

--- Later in debate ---

[Kwasi Kwarteng]

A conference of EU Energy Ministers took place only yesterday to discuss that very problem. Mitigating a quadrupling of the gas price is not a function of storage—that is a complete red herring. One reason why we have less storage is that we have a greater diversity of energy supply, and that is a strength, not a weakness.

[John Penrose (Weston-super-Mare) (Con)]

The Secretary of State is absolutely right to focus on consumers and not to bail out energy firms that got things wrong or are too fragile. However, will he explain how he is dealing with customers currently on capped tariffs with suppliers that have gone bust? Is he encountering any resistance from the firms being asked to take on those customers, who may be arriving as a loss to the acquiring firm?

[Kwasi Kwarteng]

As I have said, we have a supplier of last resort process that has worked well in the past couple of years. It is not my job to state the terms on which customers are absorbed by other companies—

[Edward Miliband]

It kind of is.

[Kwasi Kwarteng]

No, not ahead of the process. However, most of these prices are at or just below the price cap, and that is fundamentally what will protect consumers in this period.

[Janet Daby (Lewisham East) (Lab)]

This Government are responsible for families facing a cost of living crisis due to the triple whammy of rising gas prices, looming tax rises, and cuts to universal credit. Will the Secretary of State finally acknowledge and accept that it is completely and utterly immoral to cut universal credit?

[Kwasi Kwarteng]

What I do acknowledge is that there has been a quadrupling of the gas price, and that we have an energy price cap that will protect customers from such spikes. Schemes such as the warm home discount will also protect the most vulnerable customers. That is what I acknowledge.

[Alexander Stafford (Rother Valley) (Con)]

What assessment has my right hon. Friend made of this country’s structural dependency on gas, which was created by the last Labour Government’s sidelining of green technologies, such as nuclear and even hydrogen?

[Kwasi Kwarteng]

My hon. Friend is absolutely right. For example, the last Labour Government did absolutely nothing to drive nuclear power, which is a fundamental ingredient of security of energy supply.

[Tommy Sheppard (Edinburgh East) (SNP)]

The figure of £139 a year has been floated in the press as the increase in the energy price cap this year, but that refers only to the variable rate and does not take into account the changes in bills that people will face if they move from one tariff to another—often against their will in the current circumstances. Will the Secretary of State consider asking the regulator to direct energy suppliers to limit the price increase to any individual customer to a reasonable amount over the coming year?

[Kwasi Kwarteng]

As I have said, we have a supplier of last resort process, and it would be wrong of me here at the Dispatch Box to interfere in how it works. It has worked effectively over the past two years. As I have said repeatedly to the House, the energy price cap does give some succour, because consumers prices could be exorbitant without the cap. The price cap gives support, and we continue to support the warm home discount for the vulnerable end of the market.

[Mr Philip Hollobone (Kettering) (Con)]

Customers in Kettering and across the country will be worried that their gas and electricity could be cut off if their energy supplier goes bust. To put customers minds at rest, will the Secretary of State explain in straightforward understandable terms how the supplier of last resort process works?

[Kwasi Kwarteng]

What happens—and it is happening at the moment—is that there is a process of bidding for the customers of the exiting, failing companies, and the cost of absorbing those customers is taken on by the company that wins the bid and also by the industry at large; so the costs are mutualised, but generally it has been seen that there is always continuity of supply. That is a key element of the system.

[John Spellar (Warley) (Lab)]

The Secretary of State clearly believes that the invisible hand of the market will solve all this without his doing anything—but when he talks about customers, does he mean only domestic consumers, or will he ensure that supply continues to keep industry going and jobs secure? In that context, does he think it acceptable that Germany has some 90 days of gas storage while we have only nine days’ worth? Will he also commit himself to ensuring that there are adequate supplies under our control for the future by licensing new gasfields?

[Kwasi Kwarteng]

We protect domestic consumers in the way I have outlined, but it is fair for the right hon. Gentleman to raise the issue of industrial users of energy in business. He will know that we have schemes that which protect industrial users of energy: we have the energy industry incentive scheme, and yesterday we launched a new tranche of the industrial energy transformation fund with up to £220 million, which enables businesses to bid in for further support.

[Jacob Young (Redcar) (Con)]

I thank the Secretary of State for his tireless work over the last few weeks, not just on the gas price crisis but on the carbon dioxide shortage that followed. I also pay tribute to CF Fertilisers, which has come back online in Stockton, and to Ensus in Redcar for offering to help and come online too. For the benefit of people across Redcar and Cleveland, however, can the Secretary of State outline how we are supporting people and protecting them from these high prices?

[Kwasi Kwarteng]

My hon. Friend has made an excellent point. The carbon dioxide crisis—or question in hand—we dealt with immediately. I spoke to the CEO of CF Fertilisers twice, on Sunday and Monday, and we had a solution on Tuesday. I am very pleased that, as a consequence of that solution, the company has managed to get production up and running, and to get people back to work at its plant. My hon. Friend will know, after my many visits to Teesside speaking to Ben Houchen, that the Government are resolutely focused on helping his constituents to level up and get well-paid, secure jobs.

[Andrew Gwynne (Denton and Reddish) (Lab)]

These skyrocketing gas prices will have a devastating impact, not just on the public but on businesses, which will eventually have to pass those rises back on to the public. Does the Secretary of State understand that that double whammy for the public will see even more families being pushed into fuel poverty and consequently into food poverty as well? Apart from cutting universal credit very soon, making it even worse for many of these families, what is he doing? What is he doing to support them?

[Kwasi Kwarteng]

The hon. Gentleman will have seen reports that energy companies want the Government to lift the energy price cap. I have repeatedly resisted that. I have said explicitly, on the Floor of the House and in other places, that the price cap must stay, while also reaffirming our commitment to the warm home discount scheme and the winter fuel payment. We are absolutely focused on keeping consumer prices as low as possible in the energy market.

[Paul Howell (Sedgefield) (Con)]

We are all hearing about the number of businesses in this market that are going bust at the moment, but can my right hon. Friend assure me, and my constituents, that this is expected to be a short-term shock and we will come out of it with a robust market and plenty of diversity of supply?

[Kwasi Kwarteng]

My hon. Friend knows that competition is the key to this market. We had a world that was oligopolistic in this respect, but we have introduced the price cap, and there are plenty of small, nimble entrants driving innovation and a dynamic system. I am absolutely committed to a competitive market, and I am sure that after this process we will still have a vibrant and dynamic energy system.

[Kirsty Blackman (Aberdeen North) (SNP)]

Too many people nowadays have to watch every single penny, and have to worry about where all the money to pay the bills will come from. Will the Secretary of State have a look at the amount of time that it takes a supplier of last resort to provide people with an accurate forecast for their energy costs, and, if possible, try to reduce the period during which they experience that uncertainty?

[Kwasi Kwarteng]

I would be very happy look at that, as the hon. Lady suggests. I have said many times, I am in contact with Mr Brearley, the chief executive officer of Ofgem, on practically a daily basis now, and this is something that I can raise with him at our next meeting.

[Andrew Bridgen (North West Leicestershire) (Con)]

I draw the House’s attention to my entry in the Register of Members’ Financial Interests. I own shares in companies that invest in renewable energy. As the House will know, consumer energy bills are enhanced by climate change levy charges, which are used to support renewable energy producers. Is my right hon. Friend aware, however, that a large number of those renewable energy producers use special purpose vehicle companies to receive those subsidies, and that many of those SPVs are based offshore for tax purposes? Will he meet me to discuss how the Government are going to close that very clear tax loophole?

--- Later in debate ---

[Kwasi Kwarteng]

As my hon. Friend knows, I am always prepared to meet him at any time to discuss any matter he chooses to discuss with me.

[Dame Diana Johnson (Kingston upon Hull North) (Lab)]

Would the Minister still advise consumers to change their energy supplier, or would they just be better off changing their Government?

[Kwasi Kwarteng]

They had a chance to change their Government and, as I recall, that did not end so well for the Labour party, although maybe my memory fails me. We have a dynamic, vibrant and competitive market, and consumers should have a choice in order to keep their costs low.

[Stephen Metcalfe (South Basildon and East Thurrock) (Con)]

Obviously these are disturbing times for our constituents and I welcome the actions that the Government are taking. Can my right hon. Friend confirm that, whatever happens in the markets, no one in Basildon and Thurrock need fear supply failure or sudden hikes in prices this winter?

[Kwasi Kwarteng]

No one in Basildon and Thurrock, or anywhere else in this country, need fear the eventuality that my hon. Friend describes. As I have said, the supplier of last resort process is absolutely focused on ensuring that customers have continuity of supply. That is a top priority.

[Fleur Anderson (Putney) (Lab)]

Better insulation of homes is essential for cutting rising fuel bills and emissions. Does the Secretary of State agree that it was a mistake to cut the green homes grant earlier this year, and will he commit to reforming it and bringing it back?

[Kwasi Kwarteng]

As I have said a number of times, in this role and in my previous one, the green homes grant attempted to do three things. The first was to decarbonise public sector buildings, and that worked very effectively through Salix, the bank that disbursed those funds. The second element, which was disbursed by local authorities, has also worked very well. The third element is the one that we closed, and we want to get a renewed version of it.

[Selaine Saxby (North Devon) (Con)]

In the final days of the last Labour Government, the UK was near the bottom of the G20 league tables for green investment and renewable energy. I therefore congratulate my right hon. Friend on his Department’s achievements on offshore and floating wind energy. Can he confirm that his Department will continue to invest in this area, particularly close to my North Devon constituency and the Celtic sea?

[Kwasi Kwarteng]

Absolutely. My hon. Friend will know that we have some really exciting floating offshore wind projects in the Celtic sea that I am very pleased to see being developed. She is also right to observe that during the last Labour Government, we did absolutely nothing whatsoever to ensure security of energy supply or its diversity.

[Jack Dromey (Birmingham, Erdington) (Lab)]

An Erdington care worker with two children was close to tears when she said to me:

“I worked so hard throughout the covid crisis. Now I am facing my universal credit being cut, a tax increase and soaring energy bills. Jack, why are they going ahead with the cut to universal credit? Do they even begin to understand how difficult life is for people like me?”

Is she wrong?

[Kwasi Kwarteng]

The massive increase in energy prices is a global effect. I completely understand that people are facing issues this winter that were not foreseen maybe six months ago, but this Government have rigorously focused on protecting the most vulnerable customers in the energy market and we are absolutely focused on getting Britain back to work. That is why our unemployment rate is one of the lowest in the G7 at 4.7%. In France, it is 8%. We are creating jobs and we are keeping the economy going.

[Duncan Baker (North Norfolk) (Con)]

As my right hon. Friend will know, I have been something of a doughty champion in North Norfolk for the offshore energy grid—[Interruption.] He is smiling; he knows what I am going to say next. Will he work at speed to ensure that the offshore network grid will be implemented as soon as possible to ensure that we stop the dereliction of the countryside with the offshore cable corridors?

[Kwasi Kwarteng]

Nobody in this House has been as consistent and as focused on this issue as my hon. Friend. He knows that, as Energy Minister, I commissioned the offshore transmission network review, on which we have accelerated work. I would be happy to speak to him and other colleagues about the review’s progress.

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

The Secretary of State describes small energy companies such as Green in Newcastle upon Tyne Central as “failures,” but he says nothing of his own failure in structuring, regulating and shaping the energy market. Will he confirm that large energy companies, such as Green, will not receive a penny of taxpayers’ money? What support will he offer to the employees of Green, apart from slashing universal credit?

[Kwasi Kwarteng]

As I said, it has been a consistent feature over the past few years that energy companies have failed and left the market. We have a process to deal with that, the supplier of last resort. I categorically say to the House that we will not be giving any grants or subsidies to larger companies.

[Gareth Davies (Grantham and Stamford) (Con)]

I welcome the Government’s market-led approach. The CBI has been clear in saying that Labour’s plans to renationalise our UK energy network would result in higher household bills. Does my right hon. Friend agree that it could also threaten UK energy supplies?

[Kwasi Kwarteng]

Any Labour plan to nationalise the industry would be a step back into the dark ages and would be a disaster for this country’s reputation as a hub of international capital and investment.

[Rachael Maskell (York Central) (Lab/Co-op)]

Rising energy prices will disproportionately affect people living in the north, where it is colder during the winter. What assessment has the Secretary of State made of regional disparities, and how will he mitigate against them?

--- Later in debate ---

[Kwasi Kwarteng]

The hon. Lady raises a fair point, and clearly the single most important determinant of gas prices is the weather. That is why we have schemes such as the warm home discount, and it is why we are focused on protecting the most vulnerable customers wherever they are in the UK.

[Patricia Gibson (North Ayrshire and Arran) (SNP)]

Half a million more people are likely to fall into fuel poverty as a result of this gas crisis. With record increases in inflation, plans to cut universal credit that will hit 37% of Scottish families, supermarket shelves that grow emptier by the day and a regressive national insurance tax hike hitting those on the lowest pay hardest, what has gone so wrong as we face a winter of discontent? Why should anyone have confidence in this Government?

[Kwasi Kwarteng]

I will tell the hon. Lady why people should have confidence in this Government: we have a vaccine roll-out that is the envy of the world; we have got the economy back up and running; we have 4.7% unemployment, which is among the lowest in the G7; and we have navigated the storms of covid-19 pretty effectively.

[Margaret Ferrier (Rutherglen and Hamilton West) (Ind)]

A number of my constituents were victims of the green deal mis-selling scandal and have been left saddled with tens of thousands of pounds of debt for a scheme they thought was publicly funded and Government backed. The scheme was supposed to lower their energy bills, but now, on top of having to repay that debt, their bills are set to skyrocket.

In supporting my constituent who discovered that she is a victim only when she recently tried to sell her home, I was informed that the Secretary of State has no obligation to investigate cases more than six years old. Many victims of this scam will not have been aware immediately, so will he explain what recourse exists for victims who come forward later?

[Kwasi Kwarteng]

We have been dealing with green deal cases on a case-by-case basis. I have not been informed of the specific details that the hon. Lady describes but, with my officials, I would be happy to meet her to discuss the particulars of this individual case.

[Jim Shannon (Strangford) (DUP)]

This is almost a perfect storm: gas prices that have risen due to the maintenance projects that were rescheduled for 2021 because of the pandemic; lower-than-usual gas supply from Russia; and less liquefied natural gas reaching Europe because of increased deliveries to Asia. How can the Government assist when most of these factors are beyond our control? Is it realistic to hope that consumers will see a reduction in their bills within the next year?

[Kwasi Kwarteng]

The hon. Gentleman has given a pithy summary of the various causes of the energy price spike, one that is very realistic; it is a global phenomenon. What I have said repeatedly is that what the Government can do is ensure two things: that customers have continuity of supply, through the well-established SOLR process; and that we are resolutely focused on keeping the energy price cap, so that consumers—our constituents—are protected from those exorbitant price spikes.

Subsidy Control Bill

Kwasi Kwarteng Excerpts

2nd reading
Wednesday 22nd September 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.

The Government are determined to seize the opportunities arising from Brexit. Now that the UK has left the European Union and we are no longer bound by the EU’s regime, we have the freedom to develop a new, bespoke system of subsidy control for the UK that delivers on our national priorities. Before the UK joined the European economic community, as it was then called, there was no framework at all. That absence contributed, I think, to Governments pursuing a failed economic approach with Whitehall trying to run the economy. They distorted competition, often by bailing out unsustainable industries and attempting to pick winners. The regime that the Government have set out in the Bill will help public authorities to deliver subsidies where they are needed, without facing excessive bureaucracy or lengthy pre-approval processes.

[Miriam Cates (Penistone and Stocksbridge) (Con)]

One of the industries that I hope will benefit from the Bill is the steel industry. As my right hon. Friend will know from frequent and very welcome engagements with me on the issue, Liberty Speciality Steels in Stocksbridge is a key employer in my constituency. While we were in the EU, the industry had access to the EU’s research fund for coal and steel. Now that we have left, £182 million is due to be returned to the UK. Will my right hon. Friend look into the possibility of ringfencing that money, given that it has been raised from levies on the steel industry rather than through general taxation, so that we can have a UK fund for innovation in UK steel?

[Kwasi Kwarteng]

In her brief time in the House, my hon. Friend has been an impressive and focused campaigner on behalf of her constituents and the wider industry. As she knows, I am a particular fan of the steel industry, and want to seek a sustainable future for it here in the UK. I cannot give any budgetary guarantees, as she will appreciate, but this system does give us much more flexibility than was the case previously.

[Liz Saville Roberts (Dwyfor Meirionnydd) (PC)]

Will the Secretary of State give way?

[Kwasi Kwarteng]

May I make a little more progress? Many other colleagues want to speak.

This is a Bill that promotes autonomy, transparency and accountability. It will empower hundreds of local authorities, as well as the devolved Administrations and other public authorities, to take control, allowing them to design subsidies to meet local needs while also meeting national policy objectives.

[Liz Saville Roberts]

I am grateful to the Secretary of State for giving way to me now. I wanted to pursue his earlier comment. The Conservatives appear to be perpetuating a gift for blaming the EU for everything, to all intents and purposes, and it is no surprise that we have heard a little more of that today. We must bear it in mind that the UK was known for underutilising EU state rules—we were ranked 22nd out of 28 member states in 2018—and it could be suggested that that was due to Conservative ideology rather than to any intrinsic problem.

This Bill will steamroll devolved competence. Does the Secretary of State agree that it reflects a new Conservative ideology, which is deliberately dismantling the powers of devolved Governments and their accountability as elected Governments per se?

[Kwasi Kwarteng]

That was a rather lengthy intervention, if I may say so, although I do not want to entrench on the Chair’s prerogative. As the right hon. Lady will appreciate, the Bill is a function of our leaving the EU. We are not trying to rehearse the arguments of Brexit; we were doing that long before she was elected to the House. I was certainly involved in those debates.

The Bill sets out a regime founded on seven clear and transparent principles. According to those principles, the subsidy must be designed to remedy a market failure. It must be designed to bring about a change in behaviour. It cannot normally cover costs that would have been funded in any case. It must be appropriate, proportionate, and designed to minimise any distortions to competition and investment in the United Kingdom. Finally, the public authority giving a subsidy must carry out a balancing test, and proceed only if the benefits of the subsidy outweigh any distortions to UK competition and investment, and to international trade.

Those principles will be supported by guidance for all to see. That will ensure that public authorities fully understand their legal obligations, and will make clear which subsidies are permitted and prohibited and under what circumstances.

[Jonathan Edwards (Carmarthen East and Dinefwr) (Ind)]

As I understand it, the Bill also gets rid of assisted area status, which in the Welsh context includes my county of Carmarthenshire. Can the Secretary of State explain why the British Government are making it more difficult for the Welsh Government to help businesses in Carmarthenshire?

[Kwasi Kwarteng]

I do not agree with the hon. Gentleman’s description of what the Bill does. If he listens to the rest of my remarks, he may well hear further clarification. Of course, as is always the case, many of these issues will be discussed in Committee if the Bill’s Second Reading receives the assent of the House.

Public authorities will be empowered to make their own assessment of whether a new subsidy meets the requirements of the regime and, in the vast majority of cases, to proceed directly to granting that subsidy. For the first time, the decision on whether to grant a subsidy will always fall to the granting authority itself. For the largest subsidies, or those that present the highest risk of distorting competition, it is worth recalling that the default process under the EU state aid regime could last between nine and 12 months, and that that often determined whether a project could happen or not. Under the new regime, a new body, the UK subsidy advice unit, must publish its report within 30 working days. That is in huge contrast to the nine-to-12 month period under the EU.

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

The right hon. Member for Dwyfor Meirionnydd (Liz Saville Roberts) mentioned ideology. One ideology that I hope will always hold firm on this side of the House is that of not wasting taxpayers’ cash. Is the Minister comfortable with the situation in which local authorities and devolved Administrations could grant subsidies of hundreds of thousands of pounds without having to publicly declare them? Would we not be better with a much lower threshold, so that public scrutiny could always be in place?

[Kwasi Kwarteng]

Local authorities have to declare spending at much lower levels than the figure that my hon. Friend has just put forward. Clearly, transparency is at the centre of what we are trying to achieve. Instead of a year, the whole process will take only a few weeks. It will be a much quicker process and it will allow public authorities to act with far greater agility than before. However, I do not believe that the transparency will be in any way compromised. This is an area that will give more flexibility while not diminishing accountability. In fact, it will enhance accountability because, under the EU state aid regime, there was no way we could change the rules in any way.

At the same time, this is a regime that will provide certainty and confidence to businesses within the UK, and also to those among the foreign investment community who are keen to invest in the UK, by protecting against subsidies that risk distorting competition or causing harmful economic impacts. And of course, the regime will operate alongside our usual, traditional stringent spending controls to ensure the best use of public money.

[Sammy Wilson (East Antrim) (DUP)]

Does the Minister not see the inherent flaw in his argument about levelling up and treating the whole of the United Kingdom as one, in so far as Northern Ireland will be subject to a dual subsidy regime: the state aid rules imposed by article 10 of the protocol and the Bill that is going through today? So any subsidy that a public authority Northern Ireland wishes to give will be subject to the very one-year scrutiny that he is talking about, whereas a public authority in the rest of the United Kingdom will have it cleared within 20 days, thereby placing any attempt to attract business to Northern Ireland at a disadvantage.

[Kwasi Kwarteng]

That is precisely why I am addressing this precise point in my speech, if the right hon. Gentleman will allow me. We are setting out the detail of a UK regime that is far from simply adhering to the EU, and it will clearly no longer be necessary for Northern Ireland to be subject to the EU state aid regime. That is precisely why we have proposed the change to the Northern Ireland protocol to bring all subsidies within scope of the domestic regime.

The Bill, as hon. and right hon. Members should know, has been informed by a public consultation, which showed broad support for the Government’s proposals. The Government also held a second consultation with the devolved Administrations as we reached the end of the policy work and the considerable time that we spent trying to get the Bill shipshape. That second consultation showed clearly that the UK Government and the devolved Administrations agreed on the fundamentals of the regime, including the seven principles, the objectives for the regime, and the need to respect the devolution settlements and support levelling up.

[Liz Saville Roberts]

If the devolved Governments are as content as the Secretary of State is saying, why are the Welsh Government making a legal challenge to this Bill?

[Kwasi Kwarteng]

As I said, there is agreement on the fundamentals of the regime. The seven principles are not contested; they are agreed across the devolved Administrations and the UK Government. I am not privy to the exact motivation of the devolved Administration in this case but, as far as the general principles are concerned, there is a wide measure of consensus.

It is worth reminding the House that the devolved Governments will have more control over subsidies than they have ever had before. Previously, it was Brussels that made the decisions about which subsidies could be granted to support viable businesses. Now, with this Bill, it will be for the elected Governments in Edinburgh, Cardiff and Belfast to make those decisions.

During the trade and co-operation agreement negotiations and the creation of this new regime, ministerial colleagues, officials and I have worked closely with the devolved Administrations, and I thank those Administrations and the officials and Ministers here in Westminster for their considered and constructive input to the development of this policy.

[Daniel Kawczynski (Shrewsbury and Atcham) (Con)]

As somebody who has represented a border constituency for the past 16 years, I have become increasingly concerned about the additional levels of subsidy that the Welsh Government can give to businesses on the border, putting our Shropshire businesses at a disadvantage. Will the Secretary of State address that point, please?

[Kwasi Kwarteng]

As I have stressed, this regime has been discussed extensively with the devolved Administrations. Clearly we have conflicting views, but I believe the Government have worked constructively with the devolved Administrations and we feel that, along with our localism agenda, this is a step in the right direction. Compared with where we were for nearly 50 years in the EU state aid regime, this Bill is a significant improvement and enhancement that represents much greater devolution in this area than we have ever seen before.

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

Is my right hon. Friend as afraid as I am that the nationalists in Scotland will use any opportunity to be different and will impose big, generous subsidies to artificially support their own businesses simply to try to ensure that the English feel hard done by because it suits their agenda of separatism? That is not, in any sense, in the interest of the taxpayer.

[Kwasi Kwarteng]

My right hon. Friend makes a legitimate and correct observation about the general obstructionism we sometimes see. There are seven principles outlined in the Bill, however, and one of them is not to distort the UK internal market, so what she says would clearly raise issues.

Our emphasis in this regime is on transparency, accountability and, of course, agility. This all means that we will not simply be replicating the European Commission’s role in the process, requiring a central body in Brussels to sign off on specific subsidies. In other words, the UK Government did not go to great lengths to secure autonomy from the European Union on subsidy control only to reimpose the same old EU rules months later. That is not what this is about. I hope hon. Members will agree that outside the EU we will have the opportunity to do things differently. We did not leave the EU simply to settle back into the old ways of thinking and into the way things were done before. Those days are over.

I strongly believe that making the most of this new regime will need a culture change, not just in public bodies, devolved Administrations and local authorities but in central Government. It will be a culture change to take more responsibility for our own decisions, not simply outsourcing difficult decisions to the European Commission as we did for nearly 50 years. It will mean that we can be more accountable to the electorate for when and how taxpayers’ money is spent, and that we will be more agile in distributing public resources.

The Bill will ensure that our new subsidy system will maintain a competitive, free-market economy that has been central to the UK’s economic prosperity and success for decades. In that spirit, I commend the Bill to the House.

--- Later in debate ---

[Seema Malhotra]

I have given way to the right hon. Lady already and I hope she will not mind if I continue my remarks.

Will the Secretary of State clarify whether it is the Government’s intention that First Ministers, or public interest groups, be considered interested parties for the purposes of being able to bring forward a challenge to a subsidy decision—if so, why will the Government not put that in the Bill?—or will a challenge have to be made via the Secretary of State?

This is not where the devolution challenges end. Perhaps the Secretary of State could clarify his remarks on Northern Ireland, because, as I understand it, under article 10 of the Northern Ireland protocol, EU state aid rules must apply to subsidies that affect trade between Northern Ireland and the EU. This affects not only subsidies granted in Northern Ireland but subsidies granted throughout the UK. There is a risk—unless the Secretary of State wants to correct me—that article 10, taken alongside the new subsidy regime, could cause legal or practical difficulties, particularly if the UK and EU disagree on what affects EU-Northern Ireland trade.

[Kwasi Kwarteng]

I thought that I could not have been clearer on this precise point in my opening speech. I repeat: it is clearly no longer necessary for Northern Ireland to be subject to the EU state aid regime, and that is precisely why we proposed a change to the Northern Ireland protocol in order to bring all subsidies within scope of the domestic regime.

[Seema Malhotra]

I thank the Secretary of State. Indeed, I did hear those comments in his opening remarks. I was seeking to clarify the issue because I do not think it is clear across the House, and it is important that it is tested and made clear in the course of the passage of the Bill.

Crucially, what is the Government’s intention if the Bill does not receive legislative consent from Scotland, Wales and Northern Ireland, as has been requested?

Oral Answers to Questions

Kwasi Kwarteng Excerpts

Tuesday 21st September 2021 Commons Chamber

[Karl Turner (Kingston upon Hull East) (Lab)]

5. If his Department will increase spending on research into motor neurone disease.

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

The pandemic has shown us just how important and world-leading the UK’s life sciences sector is, and our Government are committed to making it go from strength to strength.

[Jason McCartney]

As a fellow rugby league fan, Mr Speaker, you will know the brilliance of Rob Burrow on the pitch and now his inspiration off the pitch. Rob is in Parliament today with his friend Doddie Weir to raise awareness of motor neurone disease and of the campaign calling on the Government to invest £50 million in MND research over the next five years for a virtual MND research institute. Will the Secretary of State please commit to meeting the MND Association to discuss this funding proposal further?

[Kwasi Kwarteng]

I thank my hon. Friend for the work he is doing in this area. He will know that in the last fiscal year, UK Research and Innovation spent £15.9 million on MND research. In the previous Parliament, 2017 to 2019, we announced £20 million to support the work of medical research charities which have now been impacted by covid.

[Karl Turner]

It has been said already, but rugby league fanatics like you and I, Mr Speaker, have long been inspired by the brilliance of Rob Burrow on the field, but I think we have been blown away by his tireless determination off the pitch to campaign to raise awareness of motor neurone disease. Does the Secretary of State agree with Rob and Scotland’s rugby union star Doddie Weir, who are both watching us, as the hon. Member for Colne Valley (Jason McCartney) said? We need to act now, Secretary of State—now—to increase research funding into this devastating, debilitating and life- limiting disease.

[Kwasi Kwarteng]

I pay tribute to the hon. Member, who raises an extremely important point. I do not know Rob, but I am very pleased that his tireless work has been raised today. As I said, in the last fiscal year UKRI spent £15.9 million on MND research. We have had a wider offer for medical research charities—we announced £204 million for Research England in the fiscal year 2020-21—but I am very happy to meet him and see what more we can do to pursue this important topic.

[Douglas Ross (Moray) (Con)]

Lucy Lintott from Moray was Scotland’s youngest person to be diagnosed with MND, aged 19. Eight years on, she is living with fiancé Tommy Smith. They have an 18-month-old, LJ, and, on Hogmanay, they are expecting their second child, a little girl. It is believed that Lucy is the first person in the world to have had two pregnancies after diagnosis. Will the Secretary of State meet Lucy and other campaigners to see what we can do to support her family and so many others in Scotland and across the UK?

[Kwasi Kwarteng]

I thank my hon. Friend for raising in this House such an inspiring story. I would, of course, be delighted to meet Lucy and him to discuss how we can pursue further progress in this area.

[Christine Jardine (Edinburgh West) (LD)]

As I am sure the Secretary of State will appreciate, there are very many of us in this House for whom this is a hugely important issue. He has already mentioned the research, but the key to the £50 million over five years is that it is not spread over other research—it is completely targeted on motor neurone disease. Will he take that to the Government and bear that in mind please?

[Kwasi Kwarteng]

Absolutely right. UKRI is responsible for the budget and I am in frequent conversations with UKRI. We have to work to see what we can do to focus, with laser-like attention, on this debilitating illness.

[Mr Speaker]

Thank you, Secretary of State. May I just say that everybody in rugby league is aware that Rob Burrow is an inspirational person? He really is that great man and great character.

--- Later in debate ---

[Mr Clive Betts (Sheffield South East) (Lab)]

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

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

Yesterday I updated the House on the UK gas market. As I said in my statement, protecting consumers is our primary focus and is shaping our entire approach to the issue; they must come first.

I welcome the new members of the Business, Energy and Industrial Strategy ministerial team. We had a great team before the reshuffle, but I am pleased that we have a good team with us today.

Over the summer, my Department has been abuzz with activity. We have introduced our innovation strategy and the hydrogen strategy, and outlined the new round for our contracts for difference scheme. It has been an excellent way to start and I look forward to continuing in that vein.

[Mr Speaker]

I call Harriett—I mean, Clive Betts.

[Mr Betts]

Thank you, Mr Speaker; for a minute, I thought you were going to miss me out!

I welcome the fact that the Secretary of State launched the Government’s hydrogen strategy in my constituency at ITM Power, which is a leading green hydrogen producer. The German strategy is totally committed to green hydrogen alone, and of course the Germans have put substantially more funding in than we have into this country’s strategy. The Government have an aspiration to replace all fossil fuel boilers in this country by the 2030s. That ambition is important for reducing carbon emissions and for the security of our energy supplies. Does the Secretary of State agree that we can deliver on that ambition only with a much more significant commitment from the Government to develop and install green hydrogen boilers across the country?

[Kwasi Kwarteng]

The hon. Gentleman is quite right. I make no apology for the fact that we have a twin-track approach in the hydrogen strategy. We have endorsed the production of green hydrogen, as he has described the German Government have done. We have also endorsed the production of blue hydrogen, because in the first instance, as he will understand, blue hydrogen is much cheaper than green hydrogen. In order to kickstart a hydrogen economy, we need a cheap source of decarbonised hydrogen. As such, blue hydrogen represents a transition to an economy that can be driven more by green hydrogen. The twin-track approach that we have outlined is certainly the best one.

[Harriett Baldwin (West Worcestershire) (Con)]

T3. I recently held an event for leading Worcestershire businesses on the journey to COP26 and net zero, and was impressed with their plans for investment. Will the Secretary of State reassure the House that now that one in six cars purchased in this country are electric, the grid will be strengthened in rural areas to ensure the widespread adoption of this new technology?

[Kwasi Kwarteng]

I know, as a former Treasury Minister, that my hon. Friend is very focused on making the green transition as economically successful as possible. I and others in the Government are very focused on getting a proper electric vehicle charge roll-out, and I would be happy to speak to her to discuss the plans that we have adopted.

[Edward Miliband (Doncaster North) (Lab)]

Families looking at soaring gas prices will be deeply worried about how they will pay their bills. One of the reasons UK households are particularly vulnerable is the Government’s failure on home insulation. Emissions from buildings are in fact higher today than in 2015. I am afraid to say that the Secretary of State’s record is abysmal, with the fiasco of the green homes grant, cuts to spending, a heat and buildings strategy originally promised for spring 2020 which is still not published, and no proper plan for retrofit. Will he admit that families this winter will be paying the price of the Government’s failure on home insulation?

[Kwasi Kwarteng]

I will not admit that at all. The right hon. Gentleman got the date wrong—it was to be published in quarter 1 of 2021. I was the Energy Minister who said that.

[Mr Betts]

Still late.

[Kwasi Kwarteng]

Yes, it is still late, and I want to publish it as quickly as possible. I can admit that candidly.

The right hon. Gentleman talks about the green homes grant. I remind him that of the £3 billion that was sequestered—ringfenced—for the green homes grant, £1.5 billion was disbursed through Salix for public buildings, and that worked very well, while £500 million was disbursed by local authorities, and that was successful. The owner-occupier bit of it was a six-month programme—a short-term fiscal stimulus—that we have closed, and we are going to have a replacement imminently.

[Edward Miliband]

It is a complete fiasco. The Secretary of State actually cut the money that was supposed to be allocated to homeowners.

At least half a million families are going to be thrown into fuel poverty by the rise in energy prices. On top of that, along with national insurance rises, millions of families are facing a £1,000 a year cut in universal credit in just 10 days’ time. It is a Tory triple whammy made in Downing Street. Will the Secretary of State stand up for the millions of people who are deeply worried about their bills and tell the Prime Minister that he should cancel the universal credit cut?

[Kwasi Kwarteng]

I have a sense of déjà vu, as we addressed this issue directly yesterday. The right hon. Gentleman knows with his experience—I was going to say in government but I mean and in opposition—that universal credit is a matter for the Chancellor, in discussion with my right hon. Friend the Secretary of State for Work and Pensions.

[Stephen Metcalfe (South Basildon and East Thurrock) (Con)]

T6. The space sector presents us with huge opportunities for the future prosperity of this country. What plans is my right hon. Friend developing with regard to the implementation, ownership, governance and funding of key elements of the national space strategy?

[Martyn Day (Linlithgow and East Falkirk) (SNP)]

T5. I was privileged to meet the international legend Doddie Weir before leading a debate on the petition he created on motor neurone disease in support of the targeted £50 million expenditure. I have certainly been convinced by his arguments, and we have heard cross-party support here today. Will the Secretary of State now commit to support this spending review bid?

[Kwasi Kwarteng]

Absolutely. In relation to this question, I pointed out that UKRI spent £15.9 million in the last fiscal year. The UKRI portion of our Department’s spend is being negotiated in the course of the spending review. I would be very happy to follow the guidance of the hon. Gentleman and make sure that we properly fund research into motor neurone disease.

[Cherilyn Mackrory (Truro and Falmouth) (Con)]

T7. Cornish Lithium, alongside Geothermal Engineering Ltd, will play a vital role in levelling up across Cornwall with the economic and job opportunities that they can provide. Will the Secretary of State, or a Minister, commit to visiting Cornish Lithium and GEL with me in the near future so that we can show him why their project very much deserves to have continued support from Government?

--- Later in debate ---

[Jason McCartney (Colne Valley) (Con)]

T8. With gas prices soaring, as we have heard, will the Secretary of State please turbocharge plans for home insulation schemes not only to help bring down household bills but to make people’s homes greener?

[Kwasi Kwarteng]

That is absolutely right. I fully recognise, as my hon. Friend appreciates, that we have had huge success in decarbonising our power sector, but we need to accelerate the decarbonisation of our homes and buildings. As I pointed out to the right hon. Member for Doncaster North (Edward Miliband), we have had some success in decarbonising public sector buildings—particularly through Salix—but we now need to focus on decarbonising our dwellings and other buildings.

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

The Minister can play accounting games over the Cambo oilfield, arguing that it was licensed 20 years ago, but essentially its emissions will still drive climate change. New research shows that 60% of existing oil and gas reserves must stay in the ground if we are to stay within 1.5° C, and the International Energy Agency has said that there must be no new oil and gas development of any kind. With COP26 in just six weeks, with the Secretary of State trying to have international diplomacy, what message does he think is given out by the Government going ahead with more oil and gas?

[Kwasi Kwarteng]

With regard to Cambo, the hon. Member will appreciate that the decision has been scrutinised in the normal regulatory way. As an energy Minister I helped to negotiate a North sea transition deal, and key to that was the word transition. We need to transition our existing oil and gas sector to a decarbonised platform. What she and others like her want to see is a complete eclipse and shutting down of oil and gas, with 250,000 jobs vanishing overnight. That would be completely irresponsible.

[Matt Vickers (Stockton South) (Con)]

T9. Retail accounts for 5% of our economy but pays 25% of all business rates. Yesterday, the British Retail Consortium published a report showing that 83% of retailers feel it is likely they will have to close stores should the burden not be reduced. Will my hon. Friend confirm that we remain committed to a fundamental review of business rates, and when we might hear more about that?

--- Later in debate ---

[Wera Hobhouse (Bath) (LD)]

May I press the Secretary of State further on blue hydrogen? The source of blue hydrogen is natural gas, which is a fossil fuel, so how can a Government committed to net zero invest millions of pounds in new technologies based on fossil fuels? The Secretary of State has said several times that it is a “transition”, but since this is not a net zero technology, a transition to what?

[Kwasi Kwarteng]

We have spoken about this issue many times in this House, and the hon. Member will appreciate that carbon capture is a key part of our net zero strategy. I think that is widely accepted, particularly by the Climate Change Committee. With her knowledge of chemistry, she will also know that carbon capture works hand in hand with the production of blue hydrogen and that blue hydrogen is not particularly carbon intensive. The reason why countries such as Germany have not pursued a blue hydrogen strategy is that they do not have the physical infrastructure in the North sea to do it.

[Sally-Ann Hart (Hastings and Rye) (Con)]

Renewable energy depends on increasing our grid capacity, so what steps is my right hon. Friend taking to do that?

[Margaret Ferrier (Rutherglen and Hamilton West) (Ind)]

UK steel producers face dramatically higher electricity costs than our European competitors. How can the sector attract the investment needed to decarbonise when it faces a £50 million a year barrier to investment?

[Kwasi Kwarteng]

I have discussed with the sector the ongoing issue of electricity prices or energy prices for the steel industry. That is why one of the first things I did as Secretary of State was to resuscitate the Steel Council. We are coming up with ideas to try to create a sustainable steel sector on a decarbonised basis.

[Richard Graham (Gloucester) (Con)]

I welcome the Minister back re-energised to his place in the Department, and as today is Gloucestershire Day, can I ask him to look very closely at the bid made by Gloucestershire to support the development of a vital new technology—nuclear fusion?

[Jim Shannon (Strangford) (DUP)]

Renewables are very important everywhere across the United Kingdom, but one of the problems for renewables is getting access to the grid. The Electric Storage Company in Northern Ireland has told me that if that was improved, energy could be stored for access to the grid. Can the Secretary of State tell us what he could do to make that happen?

[Kwasi Kwarteng]

I would like to hear more from the hon. Gentleman about this, and I am very happy to meet him to talk about it.

[Mr David Davis (Haltemprice and Howden) (Con)]

It seems that legislation is the only way that the hundreds of postmasters and postmistresses who have had their lives destroyed by the Horizon scandal will get sufficient compensation in a timely manner. Will the Department look at legislation to deliver this?

Draft Revised Energy National Policy Statements

Kwasi Kwarteng Excerpts

Monday 20th September 2021 Written Statements

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

Today I am laying before Parliament the draft revised energy national policy statements.

The energy national policy statements were first designated in 2011. They set out the Government’s policy for the delivery of energy infrastructure and provide the legal framework for planning decisions, in key energy policy areas: fossil fuels (EN-2); renewables (EN-3); gas supply and gas and oil pipelines (EN-4); electricity networks (EN-5); and nuclear (EN-6). They each sit below an overarching energy NPS (EN-1) which sets out the need for new energy infrastructure.

The Government announced a review of the current suite of energy national policy statements (NPS) in the energy White Paper: “Powering our net zero future” in December 2020.

The energy White Paper builds on the Prime Minister’s 10-point plan to set a long-term strategic vision for our energy system, consistent with net zero emissions by 2050. It establishes our goal of a decisive shift from fossil fuels to clean energy, in power, buildings and industry, while creating jobs and growing the economy and keeping energy bills affordable. It addresses how and why our energy system needs to evolve to deliver this goal whilst retaining a secure and operable energy system.

We have reviewed all the national policy statements for energy infrastructure and determined that the existing EN-1 to EN-5 documents should be amended to reflect the policies set out in the White Paper and support the investment required to build the infrastructure needed for transition to net zero.

A review of EN-6 has concluded that it will not be amended and therefore it is not part of this consultation. A new technology specific NPS for nuclear electricity generation deployable after 2025 is proposed and will be developed to reflect the changing policy and technology landscape for nuclear and support the transition to net zero.

On 6 September 2021 I launched a public consultation on the draft revised energy national policy statements, supporting habitats and sustainability reports and associated appendices. These are subject to a 12-week public consultation and are all available on gov.uk.

I will place copies of the public consultation “Planning for new energy infrastructure: review of energy national policy statements”, the “Appraisal of sustainability and its appendices: Appendices supporting evidence volumes I and II”, and the “Habitats regulation assessment” in the Libraries of both Houses. The public consultation will close on 29 November 2021. The relevant period for parliamentary scrutiny will be from 20 September 2021 to 28 February 2022.

[HCWS295]