Budget Resolutions and Economic Situation

Mark Hendrick Excerpts

Thursday 16th March 2023 Commons Chamber

[Sir Mark Hendrick (Preston) (Lab/Co-op)]

I start by apologising for being slightly late for the debate and I appreciate your indulgence, Madam Deputy Speaker, in allowing me to take part. I also extend my congratulations to my hon. Friend the Member for West Lancashire (Ashley Dalton) on an excellent maiden speech. I am sure she will make a major contribution to the House in her time here.

In the short time available, I will focus on energy. In January 2022, the Labour party urged the Government to introduce a windfall tax on oil and gas producers. The Government copied the policy to some extent, although they changed the name to the energy profits levy, and effectively implemented it from May 2020. The tax on what were becoming record profits was limited to 25%, but the tax rate introduced for companies producing renewable energy was set at 45% because of their much larger percentage profits. Although I agree that those profits should be taxed, the large difference between the levy on oil and gas revenues and on renewable energy source revenues makes it seem like the Government are applying higher taxation on companies for their good behaviour.

In the Budget, the Government have provided for a three-month extension of the energy price guarantee, which limits typical bills to £2,500 at a cost of £3 billion. Although that is good for the consumer, it effectively subsidises energy production with taxpayers’ money and it still allows energy companies to retain huge profits. In 2022, Shell reported profits of £32.2 billion—the highest in its 115-year history—and BP made profits of £23 billion in the same year, up from £10.6 billion. Those are grotesque figures that make millionaires and billionaires even richer while my constituents, and those of many other hon. Members, struggle to put food on the table and pay their mortgages, and nurses have to go to food banks to feed their families.

I welcome the commitments in the Budget to renewable energy and to carbon capture and storage. I am glad to hear that Great British Nuclear will be formed immediately with a mandate to run a so-called down-selection process for small modular reactors. The Government will match fund a proportion of private investment, but they have not specified whether the winners will be guaranteed orders or sites. Details of the selection process are expected at the end of March, but no firm date has been given. It has not been specified how many technologies will be chosen, and whether this will be open just to light water designs or to advanced nuclear designs, such as Newcleo’s lead-cooled fast nuclear reactors. Advanced modular reactor technology represents the next step in nuclear technologies beyond recent small modular reactors. These reactors will burn plutonium, which is a waste product, and Newcleo is offering to invest in them from private funding without recourse to public funding. It is a win-win situation for the UK, and I believe Great British Nuclear must take these new advanced reactors seriously.

I would also like to speak about artificial intelligence. On a positive note, as a vice-chair of the all-party parliamentary group on artificial intelligence, I welcome the Government’s announcement of £900 million for a new supercomputer facility to help the UK’s AI industry. AI technology will revolutionise the way we live, work and play. It is vital for the UK’s future that we develop it as much as possible for the benefit of ordinary people, not just to make money for rich corporations at the expense of poor people in this country.

As a final point, I am a little bit bemused that the Government’s Budget did not include help for social enterprises and co-operatives. I know the Government have co-operated on my private Member’s Bill—it is now in the House of Lords—which I welcome, but I had hoped there would be some support for co-operatives and mutuals in this year’s Budget.

[Madam Deputy Speaker (Dame Rosie Winterton)]

I call the shadow Business Secretary.

--- Later in debate ---

[James Cartlidge]

We have announced £20 billion of funding, which shows the strength of our commitment. We want to decarbonise and continue our rapid progress to net zero, but, along the way, we must maintain energy security, otherwise what have we learned from what has happened in the past 12 months, following the invasion of Ukraine? Our constituents want to know that we will do everything possible to grow the supply of UK domestic energy.

[Sir Mark Hendrick]

rose—

[James Cartlidge]

This is the last time I shall give way.

[Sir Mark Hendrick]

Is the Minister aware of Newcleo, a British company, that will burn waste plutonium in Cumbria without public subsidy or recourse to public funds, but purely with private investment?

[James Cartlidge]

I am not aware of that specific company but the hon. Gentleman is welcome to write to me. None the less, he is right to talk about the need for private investment.

Another important step that we took in the Budget, which the hon. Member for Inverclyde (Ronnie Cowan) referred to—I am not sure whether he was supportive of it—was changing the taxonomy so that we encourage more private investment into nuclear, which is so important.