Wylfa Newydd Nuclear Power Station: Decision Deadline Extension

Kwasi Kwarteng Excerpts

Friday 23rd October 2020 Written Statements

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

This statement concerns an application made by Horizon Nuclear Power Ltd under the Planning Act 2008 for development consent for the construction and operation of a new nuclear power station and associated infrastructure at Wylfa Head on the Isle of Anglesey.

Under section 107(1) of the Planning Act 2008, the Secretary of State must make a decision on an application within three months of receipt of the examining authority’s report unless exercising the power under section 107(3) 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 Secretary of State had previously reset the deadline for the application for the Wylfa Newydd nuclear power station to 30 September 2020.

Following the announcement that its ultimate parent company, Hitachi Ltd, was ending business operations in respect of the Wylfa Newydd nuclear power station, Horizon Nuclear Power Wylfa Ltd wrote to the Secretary of State requesting that he reset the deadline for his decision on the application until 31 December 2020 so that it could ascertain its options for the project.

The Secretary of State has agreed to that request and has therefore set a new deadline for deciding the application of 31 December 2020. The decision to set the new deadline for the application is without prejudice to the Secretary of State’s decision on whether to grant or refuse development consent.

[HCWS537]

Company Transparency (Carbon in Supply Chains) Bill

Kwasi Kwarteng Excerpts

2nd reading & 2nd reading: House of Commons
Friday 16th October 2020 Commons Chamber

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

I thank my right hon. Friend the Member for Staffordshire Moorlands (Karen Bradley) for giving the House an opportunity to debate this extremely important issue. I am extremely happy to respond on behalf of the Government.

I wholeheartedly agree with my right hon. Friend on the importance of transparency in supply chains. I know the great work she did when she was an Under-Secretary in the Home Office, under the guidance of my right hon. Friend the Member for Maidenhead (Mrs May) who was, at the time, the Home Secretary. That work was signal legislation. It had a huge impact and I think it is having a huge impact. It was a remarkable piece of legislation and I commend them for that.

The importance of highlighting the transparency of carbon emissions in supply chains is also extremely important. My right hon. Friend the Member for Staffordshire Moorlands will know that I always had an open-door policy. She saw me a number of times before the lockdown—before the new normal, as she put it—and, as far as I was concerned, we had a very constructive discussion on this issue. I will just say to her that whatever happens in the next five minutes she should continue to engage with the Department and me on this extremely important issue. There may be a number of differences between her policies and ours, but I think there is a strong common strategic objective which we should pursue together. I am therefore very open to having more conversations with her.

More broadly, the House will recognise that the UK has long been a leader in the fight against climate change. We have managed to do that while achieving impressive rates of economic growth. Between 1990 and 2018, the UK managed to reduce carbon emissions by 43% while growing the economy by 75%. As that has happened, the UK has decarbonised its economy at the fastest rate of all G20 countries since 2000. Our carbon emissions today are at their lowest level since the 19th century. Once again, I pay tribute to my right hon. Friend the Member for Maidenhead. It was under her Administration that we passed the net zero carbon legislation last year which essentially made us world leaders, as my right hon. Friend the Member for Staffordshire Moorlands suggested.

[James Cartlidge]

I pay tribute to the work the Government are doing. Does the Minister not agree that the key is the development of offshore wind, particularly, of course, in East Anglia? Does he agree that a key issue is the ability to grow that sustainably by having a more joined-up infrastructure in wind farms?

[Kwasi Kwarteng]

After a number of years in the House, my hon. Friend shows himself very adept at crowbarring somewhat irrelevant issues, which are extremely pertinent to his constituency, into this narrow debate.

[Karen Bradley]

I join my hon. Friend in supporting offshore wind and perhaps less emphasis on onshore wind in places such as Staffordshire Moorlands.

[Kwasi Kwarteng]

Mr Deputy Speaker, you will know, with your experience, that some of these remarks are not necessarily in scope. [Laughter.] So I will continue by addressing the actual issue.

My right hon. Friend the Member for Staffordshire Moorlands mentioned COP26 in Glasgow next year, where we will be taking centre stage and a leadership position not only in driving our climate ambitions but in encouraging others on a global platform, our friends and allies across the world, to take up the fight against climate change and, we hope, pursue highly ambitious nationally determined contributions. During these difficult times, our commitment to COP26 and urgent climate action has not wavered. Businesses and people are at the heart of our strategy for tackling climate change. We know we can only get there with a strong green recovery.

On corporate transparency, my right hon. Friend’s aims are absolutely central to the strategy we should pursue. There are minor differences of detail. She will know that we introduced legislation last year and that we were one of the first countries to endorse recommendations of the Task Force on Climate-Related Financial Disclosures. We feel as a Government that some of this action should be more embedded before we go down the route that my right hon. Friend has suggested.

[Karen Bradley]

I would just say to the Minister that sometimes we have to lead, and this is an opportunity to lead and to be the first to do something really important.

[Kwasi Kwarteng]

Dare I say, we are leading—maybe not exactly along the lines that my right hon. Friend has prescribed, but we are taking leadership? As I have said to you, Mr Deputy Speaker—

Electricity Generation: Local Suppliers

Kwasi Kwarteng Excerpts

Wednesday 14th October 2020 Commons Chamber

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

Thank you, Mr Deputy Speaker; I was going to make very much the same point. I congratulate the hon. Member for Ceredigion (Ben Lake) on securing today’s debate, and I will make the same point: I have never seen an Adjournment debate with so many interventions. They were all extremely gracefully and graciously accommodated in his speech, so many congratulations to him.

The hon. Member has spoken eloquently about the need for local communities to be able to supply electricity, and I think there are strong arguments in its favour. I know that similar views have been expressed to me and the Department by many Members. I am fully aware that my hon. Friend the Member for Waveney (Peter Aldous) has also done his bit to try to drive the issue of local supply up the agenda.

I know that the hon. Member for Ceredigion supports a campaign for electricity generators to sell directly to local consumers, for all the benefits he suggested in terms of local employment. I think he or one of the many intervenors used the phrase “local buy-in”, and those arguments are fully appreciated.

In my remarks today, I will address the matter in quite a technical way and give the specific reasons why we as a Government feel that this particular provision is not something that we would adopt, but I suggest to him that local community participation has to be on the agenda. It is certainly something that I as the Energy Minister will be willing to engage with and have a discussion about.

With regard to the licensing—we will talk a little bit about that—changing the licensing framework to suit the business models identified by his campaign appears attractive, but the danger—and we always have to be mindful of dangers in government—is that it would create wider distortions elsewhere in the energy system. I will talk to those directly. Instead of the hon. Gentleman’s proposal, I would urge stakeholders and hon. and right hon. Members across the House to engage with the ongoing work that the Government are undertaking with Ofgem to support flexibility and innovation more generally. Then perhaps we can come to a view about how the local element can play its part in the solution.

[Wera Hobhouse]

Is the Minister not aware that the main problem is the lack of a level playing field? Basically, the smaller providers cannot compete with the bigger providers, and therefore we need this change.

[Kwasi Kwarteng]

I am fully aware of that, and I will come on to it. I have only 10 minutes, so I ask the hon. Lady to bear with me; I will address that point later in my remarks.

Electricity and gas supply licences, as I am sure everybody in the Chamber knows, are usually granted on a Great Britain-wide basis. However, Ofgem has powers to award supply licences for specified areas and specified types of premises, and that can allow licensees, once they have the licence, to specialise and offer more targeted and potentially innovative products and services. The holder of such a licence could supply customers only in the specified geographical area and specified types of premises, with the full terms and conditions of the licence applying otherwise. That means that there is already provision through this licence to have local provision. Electricity suppliers can apply to Ofgem for a derogation from a particular provision of the supply licence, and if it is granted, provisions of the supply licence will not apply to them. There is already some degree of flexibility.

[Olivia Blake]

Will the Minister give way?

[Kwasi Kwarteng]

No, I am afraid I am very hard pressed for time. I may have time later to take an intervention, but I need to press on with my remarks.

Ofgem, as I have suggested, has been consulting widely on how to use such facilities more effectively to bring innovation to the specified locality, as it were, in this retail market. I understand that the consultation closed on Monday 12 October, and I hope that small-scale generators who wish to supply local communities have responded fully to the consultation.

The hon. Member for Ceredigion mentioned, very ably and relevantly, the Licence Lite provision, which allows aspiring suppliers or local generators to apply for a supply licence and receive relief from compliance with industry codes. On existing mechanisms, the Electricity Act 1989 already allows the Secretary of State to exempt, by scale, electricity suppliers from having an electricity supply licence if they meet certain conditions. There have been examples, certainly in my tenure as Energy Minister, of people successfully applying for exemptions.

Being an electricity supplier, as I am sure the hon. Gentleman knows, confers the right of the licensee to supply electricity to customers, but it also bestows certain obligations, and that is very important to remember. Those obligations include payment of a proportion of network costs. Clearly, if one is operating in a situation where one is not a licensee, then one can avoid paying the costs on which the whole system depends. That is a critical issue. In some instances, the Licence Lite regime can remove this burden, but clearly we would not want to go down a route where large numbers of suppliers are simply exempting themselves from those obligations.

Network charges, as people will understand, are levied on all users of the network, and they send signals that reflect the costs that users impose on the network. There are a range of signals to encourage generators to locate close to sources of demand, and placing a source of generation close to areas of high demand will mean that the generator gets paid credits for helping to avoid further investment in the high-voltage transmission network. Essentially, that means suppliers are incentivised to be in areas of high demand. There will be a commensurate problem in areas of low demand, because how would they attract the relevant suppliers? Ofgem is working to reform these signals through improvements to network charges, and it is also working to develop local markets for flexibility, which goes to the core of what I think the hon. Gentleman is talking about.

I do not believe—and I think the Government, thankfully, are of the same opinion—that artificially reducing network costs for local electricity suppliers is going to be highly efficient, because it could distort the market. One is essentially incentivising a behaviour that may not be economical in the first instance, and that would mean higher costs falling on other consumers, which would increase as more local suppliers were subsidised. Creating a special category of local supplier brings its own complexities, and there may well be unintended consequences as a result.

Having said that, I commend the hon. Gentleman for thinking very deeply and creatively about this issue. This is part of an ongoing conversation. He was quite right to say at the beginning of his remarks that a lot of the structures that we have today reflect the conditions and circumstances before we legislated for net zero, and in many cases reflect conditions that operated 30 or 40 years ago. There is an ongoing discussion to be had about how best to adapt our institutions to modern circumstances.

[Peter Aldous]

My right hon. Friend has highlighted some of the challenges that the Government face. As we have heard from Members around the Chamber, we have shown enormous potential for local community energy supply to play a full role in decarbonisation and the covid recovery. Will the Government be setting out in the forthcoming energy White Paper how we fully realise this potential and meet these challenges? When can we expect to see that White Paper?

[Kwasi Kwarteng]

My hon. Friend is straying into ground that is not necessarily covered in this debate. I am very hopeful that the energy White Paper will be published soon. I think the Secretary of State said in front of the Business, Energy and Industrial Strategy Committee that it would be published in the autumn, and we are still in the autumn, so I am hopeful that it will come imminently.

[Ben Lake]

Should legislative changes be required—I think there is support across the House for that, as has been demonstrated this evening—how best can we work with the Minister to carry through any opportunities that are identified as necessary?

[Kwasi Kwarteng]

Well, a very good start is a debate such as this. It has been a real eye-opener for me. I am delighted to see so much interest. I would suggest that people engage with the Department and engage with me. I am very happy to discuss these issues, which are absolutely fundamental to the energy transition that the hon. Gentleman mentioned. As I said, this is part of an ongoing conversation. I am hopeful that the energy White Paper will come hastily enough for my hon. Friend the Member for Waveney.

We have to focus on the flexibility of the whole system in terms of the current regulatory regime. If we get that right, then we can bring the innovation and perhaps some of the centralisation that the hon. Gentleman, and other hon. and right hon. Members, want to see. The prospects are considerable. We could see innovation and growth. We could see cost reductions and, most fundamentally, carbon reductions. I think that with a co-operative spirit, we can get very far. The hon. Gentleman’s actual proposal perhaps creates more problems than it solves, but I am very willing to debate and discuss that with him on a subsequent occasion.

I thank the hon. Member for Ceredigion for raising this issue and thank all Members who participated in this short but interesting debate.

Question put and agreed to.

Draft Electricity (Risk-Preparedness) (Amendment etc.) (EU Exit) Regulations 2020

Kwasi Kwarteng Excerpts

Wednesday 7th October 2020 General Committees

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

I beg to move,

That the Committee has considered the draft Electricity (Risk-Preparedness) (Amendment etc.) (EU Exit) Regulations 2020.

It is always a pleasure to see you in the Chair, Ms Elliott.

The regulations were laid before the House on 17 September. As members of the Committee will know, the transition period ends on 31 December 2020. At that point, direct EU legislation that forms part of the legal framework governing our energy markets will be incorporated into domestic law by the European Union (Withdrawal) Act 2018. This statutory instrument forms part of my Department’s work to ensure that the United Kingdom’s energy legislation continues to function smoothly after the end of the transition period.

This particular statutory instrument makes amendments and revocations to regulation EU 2019/941 on risk-preparedness in the electricity sector. It does two things primarily: first, it amends rules to ensure that they operate effectively in domestic law. Secondly, it revokes provisions that will no longer be relevant to us after the conclusion of the transition period. Specifically, it amends provisions relating to the development of electricity crisis scenarios and a risk-preparedness plan to ensure that they operate properly after the transition period. As of 1 January next year, the United Kingdom will make independent decisions on our energy policies. The statutory instrument applies to Great Britain and revokes certain obligations, for example, to submit information on our risk-preparedness to EU bodies and institutions.

In summary, the statutory instrument will ensure the operability and integrity of Great Britain’s energy legislation. It will provide certainty for market participants and safeguard the resilience of the electricity system. It will also ensure that the continued functioning of risk-preparedness is maintained, so we will have just as much provision for and foresight of risks as we had before, but we simply will not have to report back to the EU about our plans.

[Mr Robert Goodwill (Scarborough and Whitby) (Con)]

We have an interconnector between the UK and Europe. Will there be an impact on that, given that there will be an EU implication for the sale of electricity in both directions through the interconnector?

[Kwasi Kwarteng]

We have more than one interconnector connecting us to European countries, and we intend to build many more. This statutory instrument relates to our risk-preparedness. When we were in the EU, we had to report back to it to say how risk-prepared we were and what risks we were mitigating. We will no longer have to do that, and the statutory instrument is a good transition out of an EU-regulated system into one that we independently manage ourselves. That is broadly what it does.

The regulations are an appropriate use of the powers of the withdrawal Act, and we fully intend and believe that they will support a well-functioning, competitive and resilient energy system for consumers. On that basis, I commend the regulations to the Committee.

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

It is a pleasure to serve under your chairmanship this afternoon, Ms Elliott.

As the Minister set out lucidly and briefly, the SI is essentially about putting in place what will happen on risk-preparedness in a UK rather than an EU context. It does that by keeping in place most of EU regulation 2019/941 as retained law, but making a number of changes to the retained law to place it in a UK context, independent of what occurs in the EU. Of course, that process is essentially non-controversial and has to happen for our exit from the EU next year. Therefore, having these provisions in place in a timely fashion before that exit takes place is a straightforward and necessary process.

I have, however, some concerns about the consequences of that change, and I would like one or two assurances from the Minister about how that process will take place and what he has in mind for making it happen over the period, because the SI does not just make those changes. It commits the UK to publishing, by 5 January 2022, its own risk- preparedness plan. In a sense, that is not an enormous difference from what was the case previously under the EU regulation, inasmuch as the UK was supposed to publish its own plan, but it was then supposed to circulate that plan around EU member states, in both draft and final form, for comments and consideration. That particular process is excised by the SI this afternoon. It excises that process and sets up a UK process, with the addition of one or two differences from the position previously. In particular, it excises provisions in article 8 of the EU regulation, which describes the process of setting up a draft, circulating that and then publishing. We are now in a position, as a result of the SI, in which the UK will produce its own risk-preparedness plan, but is not required to produce in any way a draft for discussion or circulation to anybody—

[Kwasi Kwarteng]

We have left the EU.

[Dr Whitehead]

To anybody in the UK. That is the effect of the SI: there is no provision to publish, reveal or circulate any draft plan before publication of the actual plan, or the agreement of the actual plan, in 2022. That seems to me to be a bit of an omission, frankly, concerning our plans, because it is important that these plans are known about and discussed publicly and scrutinised well in advance of their final adoption. Therefore, I hope that the Minister will at least be able to say—even if he is not prepared to row back on any of the excisions that he has made in relation to the process of adopting a plan—that he will ensure that any draft plans are fully public, circulated and discussable before the final plan is produced, which will be by January 2022.

My second concern is that the terms of the SI effectively mean, as the Minister said, that we do not tell the EU anything we are doing as far as risk-preparedness is concerned, which we would be required to do under the previous regulations; we go our own way as it were on risk-preparedness. In reality, most of the risks that may arise in the UK electricity sector are likely to be common within the EU. Indeed, the right hon. Member for Scarborough and Whitby mentioned interconnectors, and they could easily be a substantial common risk for the UK and EU members, at least on a regional basis.

As the Minister will, I am sure, be aware, because he was very much involved in the process, as part of the comprehensive free trade agreement draft in May 2020, we as a country submitted an energy co-operation draft, which among other things suggests that we should continue to sit as an observer on the ENSO-E body, which is the body that oversees risk-preparedness across the EU. It is very likely, I would have thought, that if the EU agrees that energy co-operation draft, and agrees to our observer status on ENSO-E, it would want at least some transparency as to our risk-preparedness plans, and indeed some mechanism whereby those plans can be translated across to our partners and friends in the EU, so that we can proceed as far as possible on assessing risk and dealing with it on a joint basis, which I am sure the Minister would agree is a thoroughly sensible thing to do given the nature of those risks. Is the Minister able to address what observer status on ENSO-E may consist of, and confirm, should that provision go through, that our risk-preparedness plans will be shared in an appropriate and collaborative way, both with other EU member states and with ENSO-E?

I think the Minister will have gathered that the Opposition do not intend to oppose these regulations—

[Kwasi Kwarteng]

I was not so sure about that.

[Dr Whitehead]

They are absolutely the right thing to do under the present circumstances, but I am sure that the Minister will also agree that there are issues that arise, and that we need some clarification as to where things will go once these changes have been made.

[Kwasi Kwarteng]

The hon. Gentleman raised a number of points and I want to address them briefly. He is quite right that the very fact of leaving the EU means that we do not have to give EU member states sight of our plans, and we do not need them to, essentially, review our homework on this. That is what the SI does; it means that we do not have to refer back to them, and that is what having an independent energy policy means. So he is right to say that, but there will be scrutiny and debate and, I would expect, wide consultation ahead of the publication of such plans.

Every Energy Minister spends a lot of his or her time engaging with the industry, engaging with resilience issues, engaging with security issues, not only with domestic stakeholders, but with partners in the EU and across the world. It is a very outward-focused, engaged Department, and energy, with all its international implications, is particularly needful of international co-operation and international engagement. I would have no worries on his part about our ability to engage in a very co-operative spirit with allies and partners.

The hon. Gentleman said that the SI is non-controversial, and he is right about that – it is straightforward and necessary. He is also right about that. I disagreed with him when he characterised our position as ‘we go on our own way’. Well, of course, we have that independence, but as I have said, there is constant engagement with our French and German colleagues, and all sorts of countries across the EU. That will continue.

As the hon. Gentleman said, the regulations are straightforward and necessary. They will ensure continuity for our energy system. They will correct deficiencies arising from withdrawal from the EU—we are cleaning up all the redundant references in the legislation to member states and obligations that we owe EU bodies and institutions. They will retain relevant functions with a view to increasing resilience in terms of risk- preparedness, and above all, they will provide certainty for the market and market participants.

I think that the measure is a very simple piece of legislation. It is straightforward and necessary, as the hon. Gentleman suggested, and on that basis, I am very happy to commend the regulations to the Committee.

[Dr Whitehead]

Will the Minister give way?

[Kwasi Kwarteng]

I am not going to take any interventions, I am afraid.

Question put and agreed to.

The Insolvency (Moratorium) (Special Administration for Energy Licencees) (Regulations) 2020

Kwasi Kwarteng Excerpts

Wednesday 30th September 2020 General Committees

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

I beg to move,

That the Committee has considered the Insolvency (Moratorium) (Special Administration for Energy Licencees) (Regulations) 2020 (S.I. 2020, No. 943).

It is always a pleasure to conduct these affairs under your chairmanship, Mr Davies. The regulations were made on 2 September and laid before the House on 4 September. The Committee will be aware that the Corporate Insolvency and Governance Act 2020 introduced a free-standing moratorium regime for companies in financial distress. Those companies were allowed a breathing space from their creditors to pursue a rescue or restructure.

The regulations modify the way in which that moratorium regime, inserted into the Insolvency Act 1986 last year, applies with respect to companies that hold an electricity distribution or transmission licence or a gas transporter licence, to a smart meter communication licensee, and to companies that hold an electricity or gas supply licence.

The purpose of the regulations is to require a relevant energy company such as those I have described to notify the Secretary of State and Ofgem when it applies for, enters, extends or ends a moratorium under part A1 of the Insolvency Act. The regulations will avoid any delay to the ability of the Secretary of State or Ofgem to make a decision about whether to apply for a special administration order.

The regulations also modify the part A1 restrictions on enforcement and legal proceedings during a moratorium, so that Ofgem can continue to engage in legal processes, including enforcing licence obligations and revoking licences, without first having to seek the court’s permission. That feature of the regulations will enable Ofgem to act promptly to protect consumers. It should be noted that special administration has never been used in the energy sector, and the Government’s view is that it remains an unlikely resort.

The regulations are a short, simple and proportionate step to align the changes that the Government have made to provide businesses with flexibility and breathing space, which they need to continue trading during difficult times. They are also necessary to protect the interests of energy consumers and other market participants.

--- Later in debate ---

[Kwasi Kwarteng]

I appreciate that the hon. Member for Southampton, Test (Dr Whitehead) is not in his place, and I welcome the hon. Lady as his temporary replacement, but I detect his hand in many of her remarks; it was extremely characteristic of him to widen the scope of the debate. This is just an SI, but I was asked how many companies I thought would be insolvent. If I had a number, I would certainly never divulge it in this public forum. A lot of the questions posed by the hon. Lady are relevant, but they are not specifically tied to the nature of this debate or our specific requirement to consider the SI. I am happy to engage with her and her colleague in subsequent debates—that is an open invitation. I thank the hon. Lady for her contribution. I also thank you, Mr Davies, for the patient way in which you have chaired this debate.

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

Is my right hon. Friend looking at making it easier for communities to produce and distribute their own energy, and if so, would this SI affect their capability to do so?

[Kwasi Kwarteng]

I appreciate the enthusiasm of hon. Members to engage with this debate, but we have to be specific about the nature of the SI. I am absolutely happy to debate and talk to my hon. Friend individually about the scope for local communities to engage with energy provision, but the scope of the SI is, unfortunately, very narrowly concerned with the financial distress in which energy companies—as defined in the measure—may find themselves. Those companies will essentially have to pre-warn or give warning to the Secretary of State, so that the Secretary of State and Ofgem can act swiftly to address the situation. That is what the SI relates to, but I am of course happy to debate wider considerations in another forum.

[Chi Onwurah]

I thank the Minister for his comments and his recognition of the contribution of my hon. Friend the Member for Southampton, Test, the shadow Minister. However, I am slightly confused. As the Minister says, the SI is about insolvency provisions for energy suppliers, yet he seems to believe that any consideration of the likely level of distress and insolvency of energy suppliers, and indeed the impact of covid-19 on the energy market, which has given rise to the need for this SI, to be out of the scope of this debate. I have to say that I find that hard to understand, given that this SI is addressing that issue.

[Kwasi Kwarteng]

We can get into a debate about what the SI does.

[Chi Onwurah]

That is the purpose of the meeting.

[Kwasi Kwarteng]

I have tried to be as clear as possible, but I have been dragged in all sorts of different directions. When financial distress occurs the SI has two provisions. First, it enjoins, instructs or demands that companies give information to the Secretary of State, so that the Secretary of State and Ofgem can intervene. Secondly, it modifies the moratorium regime that the hon. Lady described in respect of those companies and puts restrictions on legal proceedings by creditors of those firms, so it essentially protects those firms in financial distress from their creditors. The causes of the financial distress, the impacts of covid-19, are not actually addressed in the SI.

I am sure the hon. Lady will want to come back on that, but I have resisted by saying that I am prepared to debate those issues in another forum. I do not think this is the right forum in which to engage with that, because we could be here all morning if that is what she wants to do. I am struck by the fact that, if she is very engaged with the debate, so few of her colleagues have attended this critical SI, which rather tugs against her contention that we can debate those wider issues in this format.

[Chi Onwurah]

rose—

[Kwasi Kwarteng]

I am not going to give way. In conclusion, I would like to say that the regulations align the corporate moratorium regime that the Government introduced last summer with existing powers to protect energy consumers and other market participants, and on that basis I commend the regulations to the Committee.

Question put and agreed to.

Oral Answers to Questions

Kwasi Kwarteng Excerpts

Tuesday 29th September 2020 Commons Chamber

[Neil Parish (Tiverton and Honiton) (Con)]

What steps his Department is taking to help businesses reduce emissions.

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

As my hon. Friend knows, helping businesses reduce emissions is crucial to delivering our net zero commitment. To tackle some of our highest carbon-intensive businesses, we have just launched the £289 million industrial energy transformation fund, and we are also extending the £300 million climate change agreements scheme to incentivise businesses to invest in energy efficiency.

[Neil Parish]

I thank the Minister very much for his answer. The business sector has successfully reduced greenhouse gas emissions by over 30% since 1990. However, emissions from business transport are counted separately, and transport emissions have gone down only by 3% since 1990. Does my right hon. Friend agree with me that we have a great opportunity in the UK to be a world leader in green transport—from electric vehicles to hydrogen lorries—and will he work closely with the Treasury to incentivise businesses to use more low emission vehicles in the future?

[Kwasi Kwarteng]

We do have extensive plans. We have further plans for decarbonising freight that will form part of the transport decarbonisation plan, which we expect to publish later this year. We work constantly with other Departments to ensure that we can reach our net zero targets. My hon. Friend is quite right to emphasise, in particular, the role that transport plays in carbon emissions.

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

If we want business to play its full part in reducing emissions and to finance the innovation and infrastructure critical to the transition to a low-carbon economy, the Government need to address the very real barriers to private investment. One obvious way to do so is through a national investment bank with a clear mandate to channel both public and private capital towards projects that aid a green recovery and help the country to achieve its net zero target. Does the Minister’s Department as a whole support the establishment of such a bank, and if so, will he update the House on what progress has been made in convincing his colleagues in the Treasury to get behind the proposal?

[Kwasi Kwarteng]

It is no secret that there is plenty of discussion about a national infrastructure bank. The Green Investment Bank, which was set up in 2015, was successful, and this is something that we are constantly in conversations about.

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

What steps his Department is taking to support manufacturing.

--- Later in debate ---

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

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

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

My hon. Friend will know that the Government have a long history of supporting the development of marine technologies. Since 2010, we have provided £80 million in research and development funding, and last month we published a call for evidence on the potential of marine energy, and we are looking forward to those responses.

[Sally-Ann Hart]

Will my hon. Friend please update the House on progress that has been made on the development of wind and wave technology around the coastline, as I know that the Crown Estate is looking at the development of wind farms off the south-east coast, near my constituency of Hastings and Rye?

[Kwasi Kwarteng]

My hon. Friend is quite right. In addition to the proposed extension to the Rampion offshore wind farm off Brighton, I understand that there is significant market interest in the Crown Estate’s current seabed leasing round, and that, we expect, will include areas off the coast of the south-east of England, near my hon. Friend’s constituency.

[Joy Morrissey (Beaconsfield) (Con)]

What steps his Department is taking to support an environmentally sustainable economic recovery in the automotive sector.

--- Later in debate ---

[Paula Barker (Liverpool, Wavertree) (Lab)]

What steps he is taking to support (a) the Mersey tidal project and (b) other new jobs and environmentally sustainable energy production on Merseyside.

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

I reassure the hon. Lady that we are looking with great interest at the Mersey tidal project and that the Government have already funded the north-west energy hub so that we can drive huge opportunities for the region in renewable energy. I know that BEIS officials recently met representatives from the Liverpool City Region Combined Authority to discuss the very Mersey tidal project that she mentions.

[Paula Barker]

Highly skilled, green manufacturing jobs should power our economic recovery beyond the pandemic and it is calculated that the Mersey tidal scheme could have the potential to generate up to four times the energy of all the wind turbines in Liverpool bay—enough energy to power 1 million homes. Liverpool city region’s Mayor has already secured £2.5 million of funding for the next phase of work. Given the Minister’s positive response, will he meet with the metro Mayor, local MPs and industry experts such as Martin Land, who now heads up the project, to help to accelerate it to feed stage development at the appropriate juncture?

[Kwasi Kwarteng]

I would be very happy to meet with MPs and representatives in the Mersey region. I know the Mayor, Steven Rotherham; I met him in my previous life as a DExEU Under-Secretary. I am happy to meet him and others again.

[Jessica Morden (Newport East) (Lab)]

What steps his Department is taking to ensure that employers do not use unfair and discriminatory practices when selecting people for redundancy.

--- Later in debate ---

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

  I was extremely pleased recently to welcome the Secretary of State for International Trade to Truro and Falmouth, where she was able to look at the globally significant lithium grades in geothermal waters in my constituency. Will the Minister ensure that the Government continue their part funding of this United Downs project to help it to continue its important steps towards the commercial production of lithium in Cornwall?

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

I pay tribute to my hon. Friend for the work that she is doing in this area. I also congratulate the United Downs project on last month securing £4 million from the Government’s getting building fund. As the Prime Minister has said this weekend, the UK will lead by example by keeping the environment firmly on the global agenda and serving as a launchpad for a global green industrial revolution.

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

Two years ago, having spent £1.2 billion of taxpayers’ money developing the European Galileo programme, the Government abandoned it to build a duplicate British system at a cost of £3 billion to £5 billion; they spent tens of millions on this “me too” sat-nav system, plus half a billion pounds on OneWeb, a bankrupt American satellite company. Now we hear that the British sat-nav system is to be abandoned too—and for what? According to newspaper reports, which are better briefed than Parliament, it is so that the Prime Minister can go head to head with Elon Musk.

--- Later in debate ---

[Grahame Morris (Easington) (Lab)]

Significant economic activity is ready to be unlocked by the Horden housing masterplan being developed by Durham County Council. The scheme ticks all the boxes: it will benefit small businesses and the green economy, improve housing, and support the Government’s levelling up and build back better agenda. Will the Minister support that plan and help to bring much-needed investment to my constituency?

[Kwasi Kwarteng]

We are very supportive of any schemes in this country that promote the net-zero agenda, and I would be interested to hear details of that scheme in the hon. Gentleman’s constituency. I would be happy to meet him, and others, to discuss those matters further.

[Christian Wakeford (Bury South) (Con)]

The north of England, and in particular Bury, has the potential to become a hub for start-ups, research and development, and innovation. That should also be utilised in the fight against coronavirus and the Government’s efforts to secure a vaccine that will end the pandemic. Will my right hon. Friend ensure that the Vaccine Taskforce relies on the strength of the whole UK, by distributing manufacturing capacity across the country?

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

Of the Government’s planned six nuclear sites, so far we have the most expensive plan in the world at Hinkley, Toshiba has walked away from Moorside, and now Hitachi is giving up on Wylfa and Oldbury. Instead of relying on a Chinese state company to deliver the remining two nuclear sites, is it time for the Government to follow the private sector and ditch that outdated technology?

[Kwasi Kwarteng]

The hon. Gentleman and I have different views on that issue. It stands to reason that as we go towards net zero, we will need dispatchable power and a source of firm power. Most of the analysis we have seen suggests that nuclear has a part to play in that net-zero future.

[Andrew Jones (Harrogate and Knaresborough) (Con)]

Harrogate and Knaresborough has a large conference and events industry, mainly driven by the Harrogate convention centre, which is now a Nightingale hospital. I have raised the industry’s specific challenges with Ministers already, but I understand that my right hon. Friend has been having discussions with the sector directly. Will he update the House on those discussions, and will he meet me to discuss the specific challenges for the industry in my constituency?

Fracking: Rother Valley

Kwasi Kwarteng Excerpts

Monday 28th September 2020 Commons Chamber

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

It is always a pleasure to conduct these debates with you in the Chair, Mr Deputy Speaker, and I am pleased to see you in your rightful place.

I thank my hon. Friend the Member for Rother Valley (Alexander Stafford) for securing this debate on an issue that I know is of great interest to not only his constituents but the wider public. I also thank my hon. Friend the Member for North East Derbyshire (Lee Rowley), who has shown real leadership and passion in his campaign against fracking. He has had an impact in the short time he has been here, in terms of changing people’s minds and changing, to some degree, how the Government approach this issue.

I have to stress that the Government have always taken a precautionary and evidence-based approach to this issue. We will only support domestic shale gas production if it can be done safely and sustainably. I want to address that point because events last year led us ineluctably to the point where we had to have a moratorium, but I will address that later in my speech.

As I said, the Government have taken a science-led approach to exploring the potential of shale gas. We had an open mind, but we were absolutely focused on environmental and safety regulations. In principle, we have supported the idea of fracking in the past, but it was clear, as I will demonstrate briefly, that this was not a path we wanted to pursue.

In 2011, the Government introduced a traffic light system so that regulators could take action to mitigate the risk of seismic events. Four years later—I remember being a Back Bencher at the time—we passed the Infrastructure Act 2015, which required shale gas developers to obtain hydraulic fracturing consent from the Secretary of State. All the necessary planning, environmental and health and safety permits would have to be obtained before fracking could proceed. We have been clear from the start that fracking could only go ahead if it was safe and sustainable for the environment and, crucially, as demonstrated by my hon. Friends, for local people—their constituents had to have a measure of consent. There also had to be minimal disturbance to those living and working nearby.

Last year, as my hon. Friends will remember, a number of events occurred in the summer that led us to the conclusion that we reached. In August last year, we had a seismic event with a magnitude of 2.9 on the Richter scale, which was a game changer in the story of fracking in this country. Cuadrilla, at its site in Preston New Road in Lancashire, reached that 2.9 Richter scale seismic event through fracking. I remember it vividly, as I was in France at the time—this was in the days when we could travel freely—and I had been in my post as Energy Minister for precisely three weeks. I kept a record of the daily calls I had with officials here in London and with people on the ground. We measured the seismic activity every day, and I got read-outs of the activity in the relevant area.

My hon. Friends will remember that the threshold at that time was 0.5 on the Richter scale, and that anything over that would require a necessary cessation in the fracking. So you can imagine my surprise, Mr Deputy Speaker, when one morning I was told that the Richter scale had hit 2.9. It was immediately apparent at that point that there would be no further fracking, as far as I was concerned. Obviously we had to look at the event, and we had to understand and appreciate the wider context. As I have said, we looked at the science, and in the light of the scientific evidence that emerged, we announced a moratorium in November 2019, before the general election took place. It was my duty to inform the relevant business people and investors that we would impose that moratorium.

As a consequence of the moratorium, the Government have made it clear that we will take a presumption against issuing any further hydraulic fracturing consents in this country. This sends a clear message not only to the sector but to the local communities concerned that on current evidence—I stress that it is on current evidence—fracking will not be taken forward in England. Nor is it likely that it ever will be taken up again unless there is compelling new evidence. As my hon. Friend the Member for Rother Valley implied, the world has rather moved on from fracking. He has eloquently championed the green revolution, hydrogen and a number of the new technologies that we think will get us to net zero. He described hydraulic fracturing as a technology of the past, and it is not something that we envisage in our future or in our progress towards net zero.

On that basis, the Government have no plans whatsoever to review the moratorium on hydraulic fracturing. We will not support fracking unless the science shows categorically that it can be done safely and without inconvenience. As I have said, this is extremely unlikely to happen, as far as I am concerned. In fact, there has been no fracking since August 2019 and no applications for hydraulic fracturing consents have been made. There will be no fracking for the foreseeable future in the Rother Valley or anywhere else in this country.

I would like to conclude by praising both my hon. Friends. They have not been in the House very long, but they have clearly made their voices and, more importantly, the voices of their constituents heard in this place, and they have been listened to. The objectives for which they have campaigned passionately over a number of years—certainly in the case of my hon. Friend the Member for North East Derbyshire—have been attained. They have been successful and I just enjoin them graciously to accept victory in this particular debate. I commend them both for the level of passion and enthusiasm with which they have engaged with green issues, including the green economy, the green revolution and what my hon. Friend the Member for Rother Valley called the “hub of green renewable energy”. I look forward to taking part in debates with them on the green revolution and seeing how best we can ensure that we reach a net zero future for ourselves and for future generations.

Question put and agreed to.

Draft Infrastructure Planning (Electricity Storage Facilities) Order 2020

Kwasi Kwarteng Excerpts

Thursday 17th September 2020 General Committees

[The Chair]

Before I call the Minister, I remind hon. Members about the social distancing rules; the seats are marked out clearly. Also, because of the covid regulations, it would be particularly helpful to our colleagues in Hansard if people could email any speaking notes that they have to [e-mail]. I call the Minister to move the motion.

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

I beg to move,

That the Committee has considered the draft Infrastructure Planning (Electricity Storage Facilities) Order 2020.

It is a pleasure to see you in the Chair, Mr Stringer. I am pleased that we have your direction for this hopefully short debate.

The draft order was laid before the House on 14 July. In the current situation, it is a very simple statutory instrument. Currently, for electricity storage facilities over 50 MW in England and over 350 MW in Wales, planning consent must be sought from the Secretary of State under the nationally significant infrastructure projects regime. For facilities below those thresholds, consent is derived from the relevant local planning authority. The SI simply removes the threshold and devolves all consents to the relevant local planning authority. We are doing this because there is strong evidence that the 50 MW threshold in England is distorting the sizing of projects and the nature of investment decisions. Here in England, there is clearly a clustering of storage projects sized just below the 50 MW threshold simply to avoid referral to the NSIP regime.

In 2019, we consulted on removing electricity storage, with the exemption of pumped hydro, from the NSIP regime in England and Wales. We received some 28 responses from the industry, and all bar two, I think, were broadly supportive of the change. For battery and more innovative forms of storage, the planning impacts are low compared with pumped hydro and other forms of generation. The extra time and cost of the NSIP regime is not thought to be proportionate and is also limiting the size of new projects to just below the threshold. The draft order removes these technologies, as I said, from the NSIP regime, so that consent will generally be sought from the local authority. To ensure consistent treatment, this will also apply to Wales, where the NSIP threshold, at 350 MW, is higher than that in England.

We feel that this measure will unlock investment in larger storage projects, support low-carbon jobs and help to decarbonise our energy system. Our assessment is that it could save the industry up to £7 million a year. As I said, the order does not remove pumped hydro storage from the NSIP regime, as hydro storage technology facilities have significant planning impacts, which we feel should be kept within the NSIP regime. Should Parliament approve the draft order, a parallel order will be required to amend the Electricity Act 1989 to ensure that consents for electricity storage fall within the local planning regime.

[Sir Robert Syms (Poole) (Con)]

I congratulate my right hon. Friend the Minister on a clear, concise explanation of what the Government are doing. It is rare in a Committee of this type that one actually understands what the Government are trying to do without doing handstands trying to read all the explanatory notes, so well done.

[Kwasi Kwarteng]

I thank my hon. Friend very much. I am pleased to say that I always try to boil down exactly what legislation does and to explain as simply as I can the Government’s aims. Having sat in these Committees, he and I know that many times people simply read out exactly what has been as presented to them, and in many instances—though not, I hasten to add, in this Parliament—Ministers have not really understood what they were saying. That was the impression I had as a Back Bencher, so I have tried to make things simple.

We will ensure that the statutory instrument applies for onshore and offshore facilities. We are working closely with the Welsh Government, who will pass their own legislation on storage located off the Welsh coast. The order will ensure that storage is treated appropriately in the planning system. That will unlock investment, which is critical to the net zero strategy that we have set ourselves.

--- Later in debate ---

[Kwasi Kwarteng]

As is often the case, the hon. Gentleman has widened the scope of the discussion, and many of the issues that he has raised are more appropriately debated on the Floor of the House in subsequent debates and in consideration of primary legislation.

I have to stress that this SI has very simple and very clear purpose, which the hon. Gentleman enthusiastically supports. I say to all hon. Members, look at the SI and welcome the fact that it removes electricity storage from the NSIP regime, makes planning far more local, and, I believe, will ease the deployability of capital in this regard. I do not share the hon. Gentleman’s view that the sector is suffering; it has been very successful, but I appreciate that there is a degree of urgency. I am happy to commend this order, and I thank all members of the Committee for attending this debate.

Question put and agreed to.

Draft Greenhouse Gas Emissions Trading Scheme Order 2020

Kwasi Kwarteng Excerpts

Tuesday 8th September 2020 General Committees

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

I beg to move,

That the Committee has considered the draft Greenhouse Gas Emissions Trading Scheme Order 2020.

It is a real pleasure to open this short debate, I hope, with you in the Chair, Mr Paisley. The Order in Council, which was laid before the House on 13 July 2020 in draft under the Climate Change Act 2008, establishes a UK-wide greenhouse gas emissions trading system—a UK ETS—as a policy replacement for our participation in the EU emissions trading system. The UK will cease to participate in the EU ETS at the end of the transition period at the end of the year as a consequence, obviously, of our withdrawal from the EU.

This stand-alone UK ETS, as some people refer to it, has been agreed by the four Governments of the UK nations, and those positions are set out in the Government’s response to the future of carbon pricing consultation, published on 1 June this year. Further secondary legislation will be introduced later this year that will introduce additional elements to the UK ETS. We have drawn on the best of the current system, which the UK, as everyone knows, was instrumental in developing, and we have made a number of improvements where possible to ensure greater flexibility to work in the interests of the UK and the global fight against climate change.

Given the importance of our net zero commitments, we will consult next year on what an appropriate development for the UK ETS cap is for the remainder of the first phase, once the Committee on Climate Change’s advice on the sixth carbon budget is published. We expect that to be published later this year. Reducing emissions while supporting UK business is central to my Department’s mission. We think that this is exactly the right way to go, and we always like to remind people that over the past 30 years our emissions have gone down by 45% while the UK economy has grown by 75%. It is absolutely the case that reducing carbon emissions is not really the enemy of economic development but can work very well with it.

The draft Order in Council establishes a UK ETS, as I have said, that will be operational from 1 January 2021. It establishes the scope of the UK ETS, which includes energy-intensive industries, the electricity generation sector and aviation, and it establishes a cap on allowances created under the UK ETS each year. That is a crucial point. The initial level of the cap will be 5% below what would have been the case had we stayed in the EU ETS. That means that the standard that we are establishing is more stringent in terms of carbon emissions than would have been the case had we stayed in the EU ETS.

The Order in Council also establishes a scheme for monitoring, reporting and verification requirements. The UK ETS clearly offers participants a robust and proportionate enforcement system, and it will establish and define the roles of national regulators in monitoring and enforcing the scheme. Finally, the order will establish a post-transition period carbon pricing policy for the UK. We want to encourage the best means of reducing carbon emissions and we feel that that is obviously central to the net zero target that we enshrined in law last year. On that basis, I commend the order to the Committee.

--- Later in debate ---

[Kwasi Kwarteng]

In response to the hon. Gentleman’s questions, he will know that in the past the Government consistently said that our primary objective was to get a UK ETS linked, as he described, with the EU ETS. However, he also knows, as he mentioned, that that is a subject of ongoing negotiation and discussion between our negotiators and the EU. Should there fail to be an agreement, this is our fall-back position.

In terms of a carbon tax and a UK ETS stand-alone scheme, we are talking to the devolved Governments all the time and it would be premature for me to say here what the outcome of those discussions will be. The hon. Gentleman is aware that the Treasury is also involved in the discussions. I can shed no further light on that.

With respect to the hon. Gentleman’s technical questions, yes, he can say that the proposed target, even though it is 5% more stringent than if we had stayed in the EU ETS, is not going far enough, but we have said specifically that once the cap is established we will consult on tightening it. We have also said, very specifically, that we will wait for what the Committee on Climate Change says about the sixth carbon budget. When that happens, we can have a further discussion and look at the cap again. As I have said, this is bridging legislation, trying to smooth our ETS and carbon emissions policy as we exit the EU. Clearly, once we have more information, particularly from the CCC about the sixth carbon budget, we can look at the cap again and, I am sure, make it even more stringent.

Alongside the UK ETS, the Government have a range of ambitious policies that will help industry reduce costs and decarbonise. Of course, in the midst of the covid-19 crisis, we are very focused, as many hon. Members know, on the green recovery. These schemes, along with this Order in Council, will maintain that we have an effective carbon pricing policy. With the EU ETS having covered about a third of UK emissions between 2013 and 2020, carbon pricing is, as the hon. Gentleman suggested a key tool. It is not the only way in which we will deal with carbon emissions, but it is a key tool in the fight against climate change. I commend the order to the Committee.

Question put and agreed to.

DRAFT ELECTRICITY AND GAS ETC. (AMENDMENT) (EU EXIT) REGULATIONS 2020 DRAFT ELECTRICITY AND GAS (INTERNAL MARKETS AND NETWORK CODES) (AMENDMENT ETC.) (EU EXIT) REGULATIONS 2020

Kwasi Kwarteng Excerpts

Monday 7th September 2020 General Committees

[The Chair]

Everybody is socially distanced. If anybody has notes, can they please email them to Hansard rather than hand them to Hansard? I call the Minister to move the first motion and to speak to both instruments. At the end of the debate, I will put the question on the first motion and then ask the Minister to move the second motion formally.

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

I beg to move,

That the Committee has considered the draft Electricity and Gas etc. (Amendment) (EU Exit) Regulations 2020.

[The Chair]

With this it will be convenient to consider the draft Electricity and Gas (Internal Markets and Network Codes) (Amendment etc.) (EU Exit) Regulations 2020.

[Kwasi Kwarteng]

It is a pleasure to open this short debate—I hope it will be short, anyway—under your chairmanship, Ms Elliott. The regulations were laid before the House on 22 June and 6 July respectively. When the transition period ends, as members of the Committee know, direct EU legislation and EU-derived domestic legislation that form part of the legal framework governing our energy markets will be incorporated into domestic law by the European Union (Withdrawal) Act 2018. These two SIs form part of my Department’s work to ensure that the UK’s energy legislation continues to function smoothly after the end of the transition period at the end of this year. The SIs ensure that the energy markets will be smoothly managed in the event that the UK does not reach an agreement or should the agreement that we do reach not cover the relevant policy area.

The first SI relates to what was done in the Department for Business, Energy and Industrial Strategy before the withdrawal agreement was agreed. Prior to the UK’s departure from the EU, BEIS laid several SIs that prepared for the eventuality that we would not achieve a withdrawal agreement. Members will have noticed that, since the SIs were made, the UK has left the EU on the terms of the withdrawal agreement, so those now have to be amended to take account of the fact that we have a withdrawal agreement.

The first SI makes consequential changes to reflect new legislation that has come into force since the original SIs were made. An example of where the first SI amends the original SIs is that we can now refer to electricity regulation, and that is now made consequential on the gas directive, which has also been changed as a consequence of the past two years. The SI also amends the original SIs with respect to the Northern Ireland protocol, which was attached, as we all remember, to the withdrawal agreement. The original SIs governing this space were made in 2019 before the withdrawal agreement was signed and agreed, and therefore the amendments in this SI fix the deficiencies that resulted from the fact that the original SIs were made on a UK-wide basis. Under the Northern Ireland protocol, however, EU legislation that applies in respect of the wholesale energy market will continue to apply in Northern Ireland after the transition period, and therefore the first SI removes provisions that were originally made relating to Northern Ireland that are no longer relevant because we have a withdrawal agreement and also the Northern Ireland protocol.

Finally, the SIs will now take effect from the implementation period completion day rather than exit day. Consequently, this SI updates the references that were previously made in the old SI. It essentially takes into account the fact that we have a withdrawal agreement and amends the SIs that were laid before the withdrawal agreement was signed up to.

The second SI relates to the period after the end of the transition period and reflects the fact that, since we laid the previous SIs in 2019, new EU legislation has come into effect. It makes amendments and revocations to the following new pieces of EU legislation: the electricity regulation and three of the electricity network codes. That new EU legislation will become retained EU law at the end of the transition period through the withdrawal agreement. Deficiencies in the legislation therefore need to be fixed so that we can make the regime workable after the end of the transition period. The SI also revokes the agency regulation, as it includes obligations that would be inappropriate and would not make sense after the end of the transition period, because Great Britain will no longer be a member of the Agency for the Cooperation of Energy Regulators.

By amending existing rules to ensure that they operate effectively in domestic law and amending provisions that will no longer be relevant after the transition period, the two SIs will maintain the operability and integrity of the UK energy market and UK energy legislation. They will provide maximum certainty for businesses and continuity for market participants.

In conclusion, the regulations are an entirely appropriate use of the powers of the withdrawal Act, which are designed to support a well-functioning, competitive and resilient energy system for consumers. They also provide clarity about the role and functions of UK bodies and market participants after the transition period ends on 31 December. As a consequence, I commend them to the Committee.

--- Later in debate ---

[Kwasi Kwarteng]

I am very pleased to respond to the hon. Gentleman, whose diligence in these matters is always to be commended, but I feel that there is a slight misapprehension about the force of the two SIs. As I described in my opening remarks, the whole point of the first SI is that it amends SIs that were laid before the withdrawal agreement was signed. Those SIs reflected, or tried to describe, the arrangements in Northern Ireland. The hon. Gentleman will know, as will other Members of the Committee, that at least a third of the withdrawal agreement related to the Northern Ireland protocol. I know that, because I was the Minister on the relevant Bill, but I failed to get the Bill through, as you, Ms Elliott, will remember. As the withdrawal agreement has come through, the SIs that we laid before its agreement are essentially redundant.

The first SI that we are debating essentially amends those SIs in the light of the fact that we have a withdrawal agreement and that the agreement has a Northern Ireland protocol attached to it, which determines many of these issues in relation to Northern Ireland. The hon. Gentleman is quite right to say that the second SI does not deal directly with the Northern Ireland issue. However, what has happened since then is that we have got a Northern Ireland Government. We all know—this was an issue that we have talked about at length, and I think that he and I debated it—that the single electricity market, or SEM, is what largely determines these issues on the island of Ireland. The workings of the SEM have been the subject of other SIs, as both he and I know well.

To answer the hon. Gentleman’s first question, it is not true to say that if we do not legislate in this way and there is not an agreement, the status quo just carries on. It does not just carry on, because, as I have said, the SIs have been superseded by the withdrawal agreement. In a way, this measure is a sort of safety blanket. We fully expect that there will be a deal, and that when there is a deal, we will have to reflect the institutions and how the energy market works according to that future deal, whenever it arrives and whatever its details are, when they are fleshed out. This measure is essentially just a safety blanket. It is not true to say that if we do nothing, we can simply carry on as before.

[Dr Whitehead]

I accept, of course, that it would not just be a case of status quo. Nevertheless, there is a question, in my mind at least: within a wider and overall deal, what would a specific deal on energy markets and energy transmission consist of? Does the Minister have information on that, with which he can reassure us this afternoon?

[Kwasi Kwarteng]

It would be quite an extraordinary ask, given that the negotiations are ongoing, for me to be able to tell the hon. Gentleman exactly what the details of those negotiations are. He will understand—this is public knowledge—that we hope to be part of or have a stand-alone emissions trading scheme, which is related to the EU’s ETS. However, as I have said, that is exactly the meat of the negotiations that are taking place, and it would be extraordinary for me in this public forum to say what the outcome of those negotiations will be.

If I may, and without further ado, I will say a couple of words in conclusion. The Government are committed to achieving a smooth end to the transition period so that our energy system operates with continuity and certainty. We confidently believe that these regulations will help to accomplish that in the event—the regrettable event—of there being no further agreement. We think that there will be an agreement, but should there not be one, these SIs will be very useful, because they will ensure continuity for our energy system, they will remove outdated references to legislation that no longer exists and that is not relevant, given the passing of the withdrawal agreement, and, as a consequence, they will provide more certainty for market participants. On that basis, I am pleased to commend them to the Committee.

Question put and agreed to.

DRAFT ELECTRICITY AND GAS (INTERNAL MARKETS AND NETWORK CODES) (AMENDMENT ETC.) (EU EXIT) REGULATIONS 2020

Resolved,

That the Committee has considered the draft Electricity and Gas (Internal Markets and Network Codes) (Amendment etc.) (EU Exit) Regulations 2020.—(Kwasi Kwarteng.)