Oral Answers to Questions

Debate between Michael Fallon and Ian Lavery

Thursday 19th June 2014 Commons Chamber

[Michael Fallon]

Yes. We are pressing ahead with early implementation of the Wood review. We will make a full formal response shortly, but we intend to establish the principles behind the Wood review in the Infrastructure Bill, which is before Parliament at the moment, and to set out the arrangements for collecting the levy to fund the new authority. We are also pressing ahead with the recruitment of the chief executive officer of the new oil and gas authority, who will be the senior regulator.

[Ian Lavery (Wansbeck) (Lab)]

If the Government are committed to saving what is left of the British deep-mining coal industry, as has been expressed this morning, will the Minister give a commitment to guarantee that he will discuss state aid to the coal industry for any new potential investor?

[Michael Fallon]

Of course, we have been considering the state aid case and what has to be notified to the Commission in Brussels, but we need to see a subsequent plan. We can only act on the basis of a plan put forward by UK Coal Ltd, which is a private company. We are ready to help with any new plan that may emerge from the discussions going on at the moment with potential investors. I need to make it clear to the House that UK Coal Ltd has already had nearly £140 million-worth of taxpayers’ support during the past 10 to 12 years, and it is very important that any new loan represents good value for money for the taxpayer.

Oral Answers to Questions

Debate between Michael Fallon and Ian Lavery

Thursday 16th January 2014 Commons Chamber

[Ian Lavery (Wansbeck) (Lab)]

The emission level of coal is roughly 820g of CO₂ per kWh, and the emission level of natural gas is roughly 430g of CO₂ per kWh. Will the Minister say what he expects the emission level of shale gas to be?

[Michael Fallon]

We have published a study by the chief scientist at the Department on the likely emission level of shale gas. Let me take this opportunity to tell the House that we have of course now signed on the first carbon capture and storage project at Drax, which I hope that the hon. Gentleman will welcome. We hope to follow that with the second CCS project in Scotland very shortly.

Energy Bill

Debate between Michael Fallon and Ian Lavery

Wednesday 4th December 2013 Commons Chamber

[Michael Fallon]

I was coming on to the list of stations that have closed. My right hon. Friend is absolutely right that we need urgently to replace the capacity that is coming off the system. Coal, as he will know, currently accounts for around a quarter of our reliable generating capacity, but that is set to decline rapidly over the coming years. Last year, Kingsnorth closed, this year we have seen the closures of Cockenzie, Didcot A and Tilbury, and we expect Ferrybridge C and Ironbridge to follow suit.

[Ian Lavery (Wansbeck) (Lab)]

The Minister mentions that coal is producing up to 25% of the electricity generated. Does he agree that the recent statistics prove that over the last 12 months that has been up to 50% and on average was 41%?

[Michael Fallon]

Coal has been an important part of the mix, and I hope the hon. Gentleman will be with us this afternoon in preventing further coal from being driven off the system.

Coal is being removed from the system due to a number of factors, including the old age of some of the plants, the impacts of environmental legislation, the increasing penalty on high-carbon generation applied under the carbon price floor, and increasing levels of low-carbon generation as we introduce more renewables.

--- Later in debate ---

[Michael Fallon]

With the leave of the House, Madam Deputy Speaker, I shall reply briefly as I sense that the House wants to reach a decision on this matter.

We have had a good debate. Let me emphasise again that I think that we have been considering a well-intentioned amendment. Nobody doubts the motivation behind it and the issue is not completely straightforward. It depends in the end on a judgment—when coal stations are already being lost to the system, do we want to accelerate the closure of coal? The hon. Members for Rutherglen and Hamilton West (Tom Greatrex) and for Wansbeck (Ian Lavery) asked a specific question—others have referred to this, too—about our progress with CCS. The CCS competition is progressing very well. Negotiations are proceeding and we expect to make a decision on the award of the front-end engineering design contracts around the turn of the year. As I have said, we have made amendments to the Bill in the other place to ensure that those projects will be exempt from the EPS for a limited period.

[Ian Lavery]

rose—

[Michael Fallon]

The hon. Gentleman might also want to know that CoalPro, the Confederation of UK Coal Producers, wrote to me on 8 November and said that the amendment

“has the potential to turn out the lights, send prices even higher and close down this industry.”

[Ian Lavery]

When does the Minister expect the first CCS generation plant to begin in the UK?

[Michael Fallon]

As I said, we hope to sign the first FEED contracts by the end of the year. They will involve a couple of years of engineering study. It will take some time for CCS to be scalable across the system, but we are committing a great deal of money to it and a great deal of effort to the two projects at Peterhead and Drax. I am in no doubt that we have technology that we can exploit, but it will take time.

In the end, as I said, this is a judgment. Is it right now to accelerate the closure of coal and to force all coal off the system by 2025? In my view, that will add to the risks to security of supply and—I must say this to my hon. Friends on the Liberal Democrat Benches—will certainly add to the costs for our constituents. We estimate that if coal disappears by 2025, there will be an increase in domestic bills of about 3% to 4%, or about £22 to £28, and an increase in non-domestic bills of between 4% and 6%. A large number of Members from all parties attended the debate in Westminster Hall this morning and complained about the costs being imposed on energy-intensive industries, and we estimate that their costs will increase by between 5% and 7%.

This proposal will increase the risks to our security of supply and add to the expense of our constituents. I think that is too great a risk and too high an additional expense and I urge the House to reject the amendment.

Question put, That this House disagrees with Lords amendment 105.

Oral Answers to Questions

Debate between Michael Fallon and Ian Lavery

Thursday 28th November 2013 Commons Chamber

[Ian Lavery (Wansbeck) (Lab)]

Coal generates up to 50% of electricity in the UK, but sadly most of that coal is imported—there has been a 37% increase in the past year. What are the Government prepared to do to secure the future of the British deep-mining coal industry?

[Michael Fallon]

My Department played a role in ensuring that UK Coal Operations survived this year, following the serious fire at the Daw Mill colliery, and helped preserve 2,000 jobs at Killingworth and Thoresby. We continue to work with the UK Coal Forum and other bodies to ensure that the place of coal is properly recognised in our energy mix.

Oral Answers to Questions

Debate between Michael Fallon and Ian Lavery

Thursday 7th February 2013 Commons Chamber

[Michael Fallon]

No, I cannot confirm that figure. This is taxpayers’ money for projects that would not otherwise go ahead. They are recommended by an independent advisory panel as good value for money and they are subject always to proper due diligence.

[Ian Lavery (Wansbeck) (Lab)]

7. What discussions he has had with Royal Mail regarding its privatisation; and if he will make a statement.

[The Minister of State, Department for Business, Innovation and Skills (Michael Fallon)]

I regularly meet Royal Mail and the Communication Workers Union to discuss a future share sale. Since Parliament decided to secure the universal postal service through the Postal Services Act 2011, we have relieved Royal Mail of its historic pension deficit and established a new regulatory regime. The final step is to give Royal Mail access when it needs it to private capital and to honour Parliament’s commitment that at least 10% of the shares will be made available to employees.

[Ian Lavery]

Royal Mail is the jewel in the crown of this nation, and it is cherished by millions. There are grave concerns about the privatisation of Royal Mail in terms of price hikes, job losses and a reduction in services. May I urge the Minister to withdraw the privatisation plans and invest heavily in a publicly owned Royal Mail?

[Michael Fallon]

It would be very odd to deny Royal Mail—a business with a turnover approaching £9 billion—access to the capital markets that other large, successful companies enjoy, and which it will need in order to innovate and invest for the future. It would also be wrong to withhold from its 130,000 staff the chance that Parliament has given them to own shares in the company.