Economy Update

Matthew Pennycook Excerpts

Thursday 26th May 2022 Commons Chamber

[Rishi Sunak]

My right hon. Friend makes some excellent points, particularly his macroeconomic point about the geopolitics that we are experiencing at the moment. I am happy to give him my assurance that I will continue to engage with consumer champions such as Martin Lewis. He has provided thoughtful and interesting suggestions, and I hope he will see that many of those have been met in the package we have announced today.

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

Why has the Chancellor not provided additional targeted support to the half a million communal heating system customers who are not protected by the energy price cap?

[Rishi Sunak]

We have not changed the structure of how the price cap works—it covers what it covers. But what we have done is provide discretionary funding—already half a billion pounds this year between spring and autumn, and now an additional half a billion pounds from October through to next spring—to pick up all those who might be in particular circumstances that need additional assistance.

Nuclear Energy (Financing) Bill (First sitting)

Matthew Pennycook Excerpts

Committee stage
Tuesday 16th November 2021 Public Bill Committees

[Virginia Crosbie]

Q Michael, what have you learned from your experiences of other countries’ financing, and how can you relate that to the RAB model?

Michael Waite: We are currently very active in the Czech Republic, Poland, Ukraine and so on. Those nations predominantly have either majority Government-owned utilities developing nuclear projects or Government financing for up to 100% of the project. They are reducing the cost of capital by fully leveraging Government financing, which is the cheapest financing. Those are absolutely all regulated approaches. No projects that we are doing currently rely just on market forces to develop nuclear; it is too much of a long-term project, with massive long-term benefits, to leave it up to the market.

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

I have a series of questions relating to—

[The Chair]

Before you start, Mr Pennycook, I should say that we have five people asking questions and 12 or 13 minutes left, so can everyone be swift in their questions and answers?

[Matthew Pennycook]

Q I will try and rattle through this. I have a series of questions relating to clause 1. Forgive me, Ms Pyke, but I think they will be directed mainly at you. It is quite clear in my mind that Sizewell C is the last project that can conceivably begin to generate by the end of this decade, so the Bill is very much about its effect on Sizewell C. Consumers in particular, but also Members of the House, will want to know whether the Bill is sufficiently discerning about which kinds of companies are designated, and who the RAB will ultimately go to. Could you detail precisely the interest in Sizewell C of China General Nuclear, or its subsidiaries or shell companies?

Julia Pyke: CGN currently has a 20% shareholding in Sizewell C. No material supply chain contracts are in place or intended to be in place with the Chinese supply chain or CGN. Whether CGN chooses to invest at financial close, and the extent to which it chooses to invest, is a matter for CGN itself and the UK Government. As Virginia’s question elicited, the RAB model is designed to bring in a lot more British financing and reduce reliance on overseas investors.

[Matthew Pennycook]

Q I do not want to get into the £1.7 billion—if I heard you correctly, you said that there were no express discussions, but that is really a question for the Minister rather than for you. Leaving the £1.7 billion aside, is it the company’s understanding that the Government’s intention is, as has been widely reported in the media, to divest themselves of that minority CGN stake? What options do you think are being considered in that regard?

Julia Pyke: That is absolutely a question for the Government.

[Matthew Pennycook]

Q Just to be very clear, because I think this has implications for the funding model, do you not think that that minority stake, and the potential force-out divestment by the Government, has any implications for the RAB funding model for Sizewell C?

Julia Pyke: I think that Sizewell C can raise money under the RAB model. How CGN intends to go forward with a financial investment in Sizewell C is a matter for CGN and the Government.

[Alun Cairns (Vale of Glamorgan) (Con)]

Q As we have highlighted, the benefits of the RAB model are that it reduces the cost of finance and provides financial certainty for any project—those are two key inhibitors in the development of new nuclear fleet. However, the construction of nuclear power stations is inherently uncertain because of the risk associated with it, and costing that risk is extremely difficult. Are you satisfied that the Bill gives the Minister the opportunity to assess the cost of that risk effectively? The alternative would be the failure of the RAB model, which would undermine the fleet generation that we would like to see.

Julia Pyke: I think that the Bill is a great framework under which there is a lot of detail to be developed, and we would expect more detail to be developed in relation to designation and the conditions of eligibility. While I could hardly deny that the cost of nuclear builds has had some uncertainty in some cases, what is not uncertain is whether nuclear works and the technology works. I think there are no cases worldwide of nuclear projects that have been abandoned for technical reasons. The industry knows how to make nuclear power stations work. So I think that there is a degree of uncertainty about the exact cost, but the whole point of building a replica of Hinkley is to minimise that uncertainty, benefit from all the lessons learned and get nuclear on to a stable, repeat-build footing.

David Powell: We designed our SMR BWRX-300 on the basis of proven technology. So we know very much the cost base for that technology, and it is really in our interest and that of investors to ensure that we can deliver to time and to budget on that. With respect to the build, we would obviously want to try to minimise any impact and risk of cost and schedule overruns, because we see this as building a fleet of smaller reactors out of a more modular-type approach.

Oral Answers to Questions

Matthew Pennycook Excerpts

Tuesday 2nd November 2021 Commons Chamber

[Mr Clarke]

The hon. Gentleman has referred to the contracts for difference mechanism, which has been hugely successful in helping to drive the improved economics of technologies including offshore wind. I think that we as a country should be very proud of that, especially in the week of COP.

There is no doubt that there are exciting opportunities for young people. I think that the Department with which the hon. Gentleman would do best to engage on that is the Department for Business, Energy and Industrial Strategy, but I am always happy to have any conversations that would be useful in this regard.

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

8. What fiscal steps he is taking to contribute towards achieving the Government’s net zero emissions target.

[Mohammad Yasin (Bedford) (Lab)]

10. What fiscal steps he is taking to contribute towards achieving the Government’s net zero emissions target.

[The Financial Secretary to the Treasury (Lucy Frazer)]

As 120 world leaders gather in Glasgow today, the hon. Member for Greenwich and Woolwich (Matthew Pennycook) asks a very pertinent question. Our net zero strategy outlines measures to enable us to make the transition to a green and sustainable future. As for fiscal measures, the Budget and spending review commit us to £30 billion of public investment towards net zero.

[Matthew Pennycook]

There is an obvious and pressing need for all fiscal announcements to be fully aligned with our country’s net zero target. To that end, will the Minister commit herself to at least the publication of the estimated emissions impact of decisions in future Budgets and spending reviews?

[Lucy Frazer]

The hon. Member will know that in our Budget we set out a number of measures to enable us to make the transition to a net zero world. We have made announcements relating to transport and warmer, greener buildings as well as energy and industry, and of course the Treasury always considers the impact in relation to net zero targets.

Commission on Race and Ethnic Disparities

Matthew Pennycook Excerpts

Tuesday 20th April 2021 Commons Chamber

[Kemi Badenoch]

My right hon. Friend is right. It is important that we in Government do not inadvertently promote people who are pushing divisive narratives, and I will look into his request and see what we can do across the House and across Government.

It is interesting that my right hon. Friend, too, raises the Runnymede Trust. He might not be aware of this, but the Equality and Human Rights Commission has written an open letter to the Runnymede Trust. In its letter of 12 April, its chair states that the Runnymede Trust made “unsubstantiated allegations” about the EHRC, questioned its “impartiality and impact” and impugned its credibility. The letter also said that the Runnymede Trust showed “an apparent misunderstanding” about the EHRC’s

“mandate as set out in statute”.

I was really shocked to read the commissioners’ letter and to learn that the Runnymede Trust had even asked—or certainly implied—that the EHRC should be defunded, which is surely the opposite of what a charity focused on improving race relations should want, and the complete opposite of its objectives, which goes to the point that my right hon. Friend made.

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

In the light of the job statistics released this morning indicating that young people and London have been particularly hard hit over the past 12 months, the issue of ethnic minority employment and pay prospects is pressing for many of my constituents. The report paints a largely positive story of an overall convergence between minorities and the white majority when it comes to employment and pay, yet the official data makes it perfectly clear that the situation has not markedly improved when viewed over decades. For example, the unemployment rate for black people has consistently been more than double the rate for white people over the past 20 years. How, then, does the Minister believe that the report’s claims in this area can be squared with what the available evidence clearly illustrates, which is that structural racial inequalities remain a stubborn feature of our labour market?

[Kemi Badenoch]

I thank the hon. Gentleman for his question and for engaging with some of the contents of the report rather than in divisive rhetoric. The answer to part of the question is that many of those statistics do not control for age. In this country, black people are much younger than the rest of the population, and that often ends up skewing some of the statistics. The report paints a picture of a continuing improvement and convergence, but the employment section is the bit that highlights the most significant problems, and there is quite a lot to do on that front. I encourage the hon. Gentleman to look at some of the recommendations and to let us know whether he agrees or disagrees. Before Government respond, I would encourage Members to put forward their suggestions, based on the evidence that the commission has produced, for what we should be doing.

Oral Answers to Questions

Matthew Pennycook Excerpts

Tuesday 1st December 2020 Commons Chamber

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

What fiscal steps he is taking to help achieve a net zero carbon economy.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

What steps he is taking to ensure that his fiscal policy incentivises environmentally positive behaviour.

[The Exchequer Secretary to the Treasury (Kemi Badenoch)]

The Chancellor’s announcement at the spending review will help us meet our net zero 2050 target by providing the right incentives for individuals and businesses. The spending review commits £12 billion of public investment, kick-starting our transition to net zero and boosting the UK’s global leadership on green infrastructure and technologies ahead of COP26 next year. It also included funding that will encourage protection of the natural environment, including for planting trees, restoring peatland, creating natural habitats and investing in national parks.

[Matthew Pennycook]

A robust carbon price is essential to achieving a net zero carbon economy, yet despite the transition period ending in just 30 days’ time, companies still have no precise idea what will replace the EU emissions trading system, which the UK will cease to participate in at that point. The House has already passed the legislation required to establish a stand-alone UK ETS, but there is no sign of the order necessary to fully implement a UK-wide carbon tax. With just 12 sitting days remaining, can the Minister confirm that the Government have determined that a stand-alone UK ETS is the fall-back option for 1 January and that the Treasury has abandoned a carbon emissions tax?

[Kemi Badenoch]

The hon. Gentleman will know that this has been the subject of negotiations, which are still ongoing. We legislated for a UK-linked ETS as well as a carbon emissions tax, and we will be announcing shortly which of those options we will be taking. We know that a UK-linked ETS is the preferred option at the moment, and that is the one that we are currently hoping we will be able to negotiate for during this period.

Lockdown: Economic Support

Matthew Pennycook Excerpts

Tuesday 3rd November 2020 Commons Chamber

[Steve Barclay]

First, I thank my hon. Friend for recognising the huge contribution of officials in HMRC, the Treasury and, indeed, across Whitehall in ensuring that that business support was delivered at the pace it has been. On the international comparison, I draw my hon. Friend’s attention to the report of the director of the IMF just last week, which I think is probably the best illustration of the way that the UK package of support is seen as offering one of the most comprehensive packages of support. It was recognised by the IMF and I think that shows where it stands in terms of international comparison.

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

When concerns were voiced earlier about the implications that flow from the fact that rateable values in some parts of the country are far higher than in others, the Chief Secretary could only point to discretionary grant funding. However, not only has the detailed guidance that would allow local authorities to distribute that discretionary funding not yet been published, but it will be distributed on the basis of a flat rate of £20 per head, irrespective of geographical area, as he knows. So can the Chief Secretary first ensure that that guidance is published promptly, so that local authorities can plan, but also look again at better tailoring support to account for variations in rateable value across the country?

[Steve Barclay]

I will take away the fair point that the hon. Gentleman raises about publishing guidance and seek to respond to it constructively. In terms of the £20 a head, often representations have been made to me in the Chamber that it is vital for the Government to move at pace to deliver schemes quickly, and to do so fairly. Without reprising the previous urgent question where the Mayor of Greater Manchester, according to the Labour Front-Bench team, was acting for Great Britain in a way that the Mayor of the Liverpool city region and others were not, which I felt was an unfair characterisation of their position, the point is that we need to deploy schemes quickly, which is why we have taken the approach that we have.