Gas Prices and Energy Suppliers

Debate between Kwasi Kwarteng and Lord Spellar

Thursday 23rd September 2021 Commons Chamber

[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.

UK Steel Production: Greensill Capital

Debate between Kwasi Kwarteng and Lord Spellar

Thursday 25th March 2021 Commons Chamber

[Kwasi Kwarteng]

I welcome my hon. Friend’s report and his contribution to the debate around the green industrial revolution. He is absolutely right that, alongside steel, we should consider all forms of innovative and novel materials—advanced materials—that can help us build back greener and more sustainably.

[John Spellar (Warley) (Lab)]

The three fleet solid support ships, at 40,000 tonnes, are equivalent in size to the two aircraft carriers. That is a lot of steel. Only this week, the Ministry of Defence finally conceded that they will be designated as naval vessels, meaning that they will be built in British yards. When the Secretary of State goes back to his office, will he get on to the Defence Secretary and tell him they must also be built with British steel?

[Kwasi Kwarteng]

I admire and am always impressed by the right hon. Gentleman’s passion for these issues, and I think he is absolutely right. We do have a need for huge amounts of steel in infrastructure in this country. That is why I have said repeatedly that there is a future for the steel industry in the UK.

Oral Answers to Questions

Debate between Kwasi Kwarteng and Lord Spellar

Tuesday 23rd March 2021 Commons Chamber

[John Spellar (Warley) (Lab)]

What lessons have been learned from the operation of the vaccine taskforce.

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

The vaccine taskforce has successfully brought together the collective effort of Government, academia and industry behind a single purpose and mission. Its hard work and focus, in partnership with the NHS and other organisations, helped the UK to become the first country to procure, authorise and deploy the Pfizer-BioNTech and Oxford-AstraZeneca vaccines. As I speak, over 30 million individuals across the UK have now received their first dose.

[John Spellar]

As the Secretary of State has rightly acknowledged, under his Department’s authorisation the vaccine taskforce has performed brilliantly, but it has needed a scientific and industrial base that was already there to work with. As he knows, there are some concerns about dependency on an overseas supply chain that may be interrupted. As the new Secretary of State, will he make a name for himself by challenging the dead hand of Treasury dogma and ensuring that Government contracts and projects across the board put British industry first at last?

[Kwasi Kwarteng]

I am very pleased that the right hon. Gentleman is so enthusiastic about our British ingenuity and hard work. I and my right hon. Friend the Chancellor of the Exchequer are always working extremely hard and are very focused on trying to promote innovation in this country in our research and development base.

Oral Answers to Questions

Debate between Kwasi Kwarteng and Lord Spellar

Tuesday 9th February 2021 Commons Chamber

[Kwasi Kwarteng]

I am very pleased to be responding to my right hon. Friend. I very much enjoyed working with her in the Department and I am pleased that she is taking such an interest in our activities. In answer to her question, I would suggest that this is about policy, not regulation. The Government expect lenders to be constructive in their dealings with businesses in difficulty. I am glad to hear that in this instance her constituents are getting the support that they need from the bank, but bank regulations on forbearance are a matter for the independent Financial Conduct Authority.

[John Spellar (Warley) (Lab)]

When asset-stripper Melrose was allowed to take over GKN, the then Secretary of State said that Melrose had to honour its commitments to stay UK-based. Now that it has torn that up with its disgraceful behaviour and decision to close Birmingham’s GKN Driveline, with the loss of 500 skilled engineering jobs, what is the Secretary of State going to do about it?

[Kwasi Kwarteng]

As the right hon. Gentleman well knows, my door is always open, and I am very happy to meet him to discuss this issue. I recall that when my right hon. Friend the Member for Tunbridge Wells (Greg Clark) was in my place, it was a very delicate situation, but I am happy to discuss with the right hon. Gentleman ideas on how we can ameliorate it.

UK Hydrogen Economy

Debate between Kwasi Kwarteng and Lord Spellar

Thursday 17th December 2020 Westminster Hall

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

It is a real pleasure to conduct this debate with you in the Chair, Ms McDonagh. I am very pleased to be taking part. I am conscious that we have to revert back to my hon. Friend the Member for Rother Valley (Alexander Stafford) at the end, so I have only about eight minutes—that shows how full of content and well informed the speeches were. It is a real pleasure, as Energy Minister, to take part in a debate in the House of Commons with so many right hon. and hon. Members participating at such a high level. It is the House of Commons at its best.

We heard a range of opinion, but we broadly agree about the way forward and the potential dynamism of the hydrogen economy. I pay special tribute to my hon. Friend for the tireless, indefatigable way in which he pushes hydrogen at every opportunity. Even though my officials might not agree, I hope he continues to do so, because it is absolutely necessary for Members of this House to hold the Government to account. I am very happy to take part in these debates and express the Government’s point of view, share some of our thinking and respond to points that Members of the Opposition parties make.

The first thing I want to talk about is investment. One hears all the time about the German strategy—I have read the German strategy and the EU strategy this year. Ours will be different because we are looking at blue hydrogen, which the hon. Member for Southampton, Test (Dr Whitehead) alluded to, and green hydrogen. The EU and German strategies talk almost exclusively about the production of renewable hydrogen. We in this country, given our North sea heritage and the assets there, want to do both. Ours will be a very interesting strategy. It is the first ever hydrogen strategy that the Government have produced. When it is published in the first half of next year, I look forward to having more debates and answering more questions about it.

This has been an extremely busy time for the energy industry. The Government have had the Prime Minister’s 10-point plan, the second point of which was all about hydrogen. It outlined our ambition for a 5 GW capacity. Subsequent points in the 10-point plan referred to the use of renewables and decarbonised sources of fuel in jet propulsion and marine transport. A number of Members mentioned the role of hydrogen in transportation. It is absolutely right that we should be focusing on HGVs, for which it is particularly suited.

I can say to my hon. Friend the Member for Warrington South (Andy Carter) that I have been in a hydrogen car. I was not driving it—I was there in a ministerial capacity, so someone else was driving—but I look forward to taking that step in the imminent future.

My hon. Friend the Member for Rother Valley and the hon. Member for City of Chester (Christian Matheson) have done a great job in this debate of highlighting the strengths of the HyNet industrial cluster. Everyone has said, “Let there not be a beauty contest,” yet they have been very good at presenting the particular attractions of their areas. They have done a very good job on that. I am on the record as having pledged to visit HyNet, hopefully in the next few months. I have spoken to representatives of the cluster on Zoom and in various other forums, and they are doing a fantastic job in pushing this agenda.

On deployment, the hon. Member for Kilmarnock and Loudoun (Alan Brown) said that we should be going faster. We can always be going faster, and he is absolutely right to be holding the Government’s feet to the fire. We should seek to deploy a lot of these business and financial incentives earlier, and I am working closely with officials to do that. However, I cannot stress enough that the success of the hydrogen deployment will involve a substantial degree of private capital and private investment. If we look at the deployment—the success—in making the offshore wind industry in this country the biggest installed capacity of any country in the world, we see that the reason it happened was that something like £94 billion has been spent since 2010—the vast majority of which was private capital. It was not merely a function of the Government writing cheques; it was a function of the Government creating a framework and creating a CfD process, which private capital could participate in and spend and deploy the resources to develop the capacity. So I have to stress—it always comes up, and it is quite right for Opposition Members to push the Government on it—that ultimately the strength of the investment and the vast majority of the capital that will be deployed will come from private sources, which is a recipe for success.

I should mention the fact that we have hydrogen trials and that the Prime Minister announced in his 10-point plan that we want to see a hydrogen town. The hon. Member for Kilmarnock and Loudoun rightly raised the issue of the gas standards needing to catch up with the potential of hydrogen deployment. I have a conversation on that subject with colleagues in the Department of Health and Social Care on a regular basis, because ultimately that is their responsibility, given the health impact and the relevance to health and safety.

There are so many other points that I want to raise. The hon. Member for East Kilbride, Strathaven and Lesmahagow (Dr Cameron), who is no longer in her place, made a very good point about how we should try to bring the public with us. Even today, there is not much knowledge or engagement from our constituents or from people across the country with regard to hydrogen issues. It is quite legitimately a job of Government to improve that situation. However, it is also the job of all of us as MPs to try to get that message out, because it is not simply the Government who have the platform—the bully pulpit. Each and every one of us here, as individual MPs, can also make the case.

[John Spellar]

RTFOs?

[Kwasi Kwarteng]

The right hon. Gentleman has wonderful timing; I was just coming to the points that he made. He made some very good points, particularly—if I may say so—about town gas. He is quite right, and the hon. Member for Southampton, Test made this point as well, that the transition from town gas to natural gas that happened in the 1960s and 1970s was a whole-country endeavour. He is also right to point out, as I think the hon. Member for Southampton, Test also did, that town gas was largely composed of hydrogen. So in a way, having hydrogen in the gas network is not so novel an idea; it has happened before. Of course it was a much dirtier gas then, but hydrogen as the basis of a heating system is something that we can certainly achieve.

The last thing I will say before I conclude—

[John Spellar]

RTFOs?

[Kwasi Kwarteng]

We can discuss that issue at another time; I am afraid that I am limited by time constraints today.

The last thing that I will say in conclusion is that this is not a beauty contest; there is huge opportunity for every part of the country to benefit from the hydrogen revolution. I look forward to speaking to right hon. and hon. Members about how we can best deploy capital in the levelling-up agenda. The fact that HyNet is represented by Members on both sides of the aisle, and also other areas, is a really good sign. We can work together to bring about the hydrogen revolution.

Electricity

Debate between Kwasi Kwarteng and Lord Spellar

Monday 15th June 2020 Commons Chamber

[Kwasi Kwarteng]

I know that my right hon. Friend is a noted sceptic about climate change—or he was, certainly, until very recently—but he will know that any country that, like us, wants to reach the net zero commitment will necessarily be reliant on much greater interconnector capacity, from Europe in many instances and sometimes from countries such as Norway that are outside the EU, than is currently the case. That is exactly why we are proceeding on this path.

[John Spellar (Warley) (Lab)]

Should we not be looking at the underlying proposition, given the enormous increase in renewables? Is it not absurd that we have been importing electricity through the interconnector while paying renewable companies, particularly those connected to wind farms but also to solar, to switch off because of low levels of demand? Is there not a disconnect in this market at the moment?

[Kwasi Kwarteng]

I think there are issues, which the right hon. Gentleman raises, with regard to pricing and the ability to have a much more flexible grid system. With respect, however, these regulations have nothing to do with that. That is a separate debate.

[John Spellar]

With respect, the Minister seems to be embedding the current dysfunctional system into new regulation. I fully accept that the Government have to do something about this because of EU decisions, but, equally, there does not seem to be, and I do not get the sense of, an understanding that this is a defective mechanism that needs to be reformed, and probably quite quickly.

[Kwasi Kwarteng]

The right hon. Gentleman is absolutely right that the system needs to evolve. We are looking at some of the smart pricing he alludes to and the flexibility of the system, and I am sure he will read our White Paper with interest. However, the issue of the flexibility of the system is not really germane to this statutory instrument on the capacity market, which, as he and my right hon. Friend the Member for Wokingham (John Redwood) know, is a technology-neutral device.