North Hyde Substation Outage Review: Government Response
Michael Shanks Excerpts(2 days, 23 hours ago)
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The Minister for Energy (Michael Shanks)
In March 2025 the Secretary of State for Energy Security and Net Zero commissioned the National Energy System Operator to undertake a comprehensive review of the incident at North Hyde electricity substation. The review was to identify lessons and recommendations for the prevention, and management of future power disruption events, and lessons for Great Britain’s energy resilience more broadly. NESO published its review report on 2 July 2025.
The Government response to NESO’s report sets a clear implementation plan to make progress against NESO’s recommendations. We will build on this implementation plan through our commitment today to publish an energy resilience strategy in 2026. The strategy will set out the Department’s strategic priorities to ensure a secure and resilient energy system, now and in the future.
Energy resilience strategy:
On top of taking immediate action to address learnings from the North Hyde incident, it is critical that we also consider how the risk landscape is evolving rapidly and growing more complex. The Government’s clean energy superpower mission will drive a sector-wide transformation, offering a critical opportunity to further embed security and resilience into system design, strengthening energy reliability.
The energy resilience strategy will address sector-specific challenges across the entire energy system, like those identified following the North Hyde incident. It will set out this Government’s ambition to build power sector resilience across society, including the critical sectors that rely on energy to deliver our critical services, and it will create a framework to embed resilience across the energy system now and in the future.
North Hyde implementation plan:
The North Hyde implementation plan has been developed in collaboration with the energy resilience group—a partnership between Government, the regulator and industry. This ensures a joined-up approach to energy resilience, emergency response and recovery—will set out specific actions to enhance resilience across the three pillars of NESO’s review:
Resilience of energy infrastructure;
Response and restoration of energy infrastructure; and
Enhancing the resilience of critical infrastructure to energy disruption
The majority of actions will be delivered by the end of 2026 and will bolster the energy industry’s prevention and preparedness for exceptional events, reducing the likelihood and impact of energy disruption. While improvements will be made, no energy system can be totally immune from disruption, which is why, in tandem, these actions will support other critical national infrastructure sectors—just as transport—in enhancing their own resilience to such events, as far as is reasonably practicable.
The newly established energy security and resilience taskforce, chaired by the Minister of State at the Department for Energy Security and Net Zero and comprising senior energy sector representatives, will oversee and assure the implementation of these actions.
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Oral Answers to Questions
Michael Shanks Excerpts(2 days, 23 hours ago)
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Jeff Smith (Manchester Withington) (Lab)
The Minister for Energy (Michael Shanks)
Thanks to the success of the initial scheme, Great British Energy is expanding the roll-out of solar panels for public services. Now, 50 more schools, 60 more NHS sites and 15 military sites will have their bills cut thanks to this Government, transferring money from the pockets of energy companies back into frontline services.
Jeff Smith
I warmly welcome the announcement of solar panels at Ladybarn primary school in Withington—it is great news for an excellent school in my patch and good news for the planet. I have also seen good investment in solar panels on hospital buildings in my patch, and we clearly need to scale that up. How can having Great British Energy as a publicly owned company help us to do that?
Michael Shanks
I congratulate those at Ladybarn primary school in my hon. Friend’s constituency on receiving solar panels. The benefit for the school is that it can spend more money on the things that are important for improving young people’s learning, rather than on its energy bills. Great British Energy is our idea for a publicly owned energy company—the first in 70 years—that will drive forward investment in the clean power transition and in supply chains, creating jobs across the country and bringing down bills for the public sector, as in these examples in the NHS and at military sites and schools, so that we can invest more in frontline services.
Mr Will Forster (Woking) (LD)
A constituent of mine wants to replace his gas boiler with renewable energy, which will cost him around £400. I am concerned by the prohibitive costs, which massively undermine our net zero ambitions. Can the Minister confirm what he and his Government are doing to remove those prohibitive costs?
Michael Shanks
We are working to reduce those costs. In fact, it has been announced just today that the boiler upgrade scheme will be made more accessible so that people can take advantage of renewable technologies. We want people to be able to bring down their own household bills. Of course, that also helps us as a country to move towards a clean energy system, which we know is what will bring down bills in the long run. We are doing work across Government to bring down those costs. There will come a tipping point very soon where it is much more economical to install those technologies than the alternatives, and that is when we will realise huge benefits for households right across the country.
Laura Kyrke-Smith (Aylesbury) (Lab)
Dr Allison Gardner (Stoke-on-Trent South) (Lab)
The Minister for Energy (Michael Shanks)
We are delivering the biggest nuclear building programme in a generation, overturning the legacy of the Conservatives, who failed to complete a single project in their 14 years in office. Just this week, we announced that the flagship small modular reactor project would be based in Wylfa, bringing thousands of jobs to north Wales and also right across the country in the supply chain. Great British Energy Nuclear’s ambition is that 70% of supply chain products across the SMR fleet will be British built.
Dr Gardner
Advanced ceramics and ceramic matrix composites play a critical role in the manufacturing of nuclear infrastructure. They are used in nuclear fission reactors as pellets, ceramic coatings are applied to small modular reactors, and ceramics are needed in fuel particle coating, moderators, reflectors and control rods. North Staffordshire is a hotbed of advanced ceramics manufacturing, and I ask the Minister to ensure that our local companies receive investment as part of the nuclear modular reactor scheme to ensure supply chain resilience.
Michael Shanks
My hon. Friend is a fantastic champion of her community and of the potential of businesses in her community to contribute to this. We have been clear as a Government that we want UK supply chains to benefit from these projects and to deliver their world-leading expertise across all our civil nuclear projects, including the SMR programme, Hinkley Point C and Sizewell C. To achieve this, we will continue to engage with industry right across the country and to address any barriers to entry into the nuclear sector, particularly for small and medium-sized enterprises who might not know exactly how to enter the supply chains, to ensure that they are in the best possible place to take advantage of the huge number of opportunities that will be created by this new golden age of nuclear in the UK.
Mr Gregory Campbell (East Londonderry) (DUP)
The Minister has outlined his determination and urgency on nuclear power. I hope he is able to confirm that everyone across the United Kingdom will benefit from lower costs as a result of the construction of mini nuclear reactors.
Michael Shanks
We know that to bring down bills for everyone, we need a clean power system that includes nuclear providing the stable baseload across the country. That also benefits Northern Ireland through the interconnectors, but obviously energy decisions are reserved in Northern Ireland. We are committed to bringing down the cost of these projects as much as possible, and also to ensuring that we get the economic advantages. When these projects are on the system, they will deliver clean, secure power made here in the UK for generations, and that is how we will deliver energy security and get us off the volatility of fossil fuels, which is what has been driving up bills for the hon. Gentleman’s constituents and mine for so long. This is the answer for our energy security and for good jobs right across the country.
Gordon McKee (Glasgow South) (Lab)
The Minister for Energy (Michael Shanks)
Clean power is the route to energy security and energy independence for the United Kingdom. For far too long, families have faced high energy bills thanks to our exposure to international fossil fuel markets over which we have no control. Through our clean power mission, we are ending that situation by rolling out clean, home-grown power that we control.
Gordon McKee
Since Vladimir Putin’s full-scale invasion of Ukraine, energy bills have gone up because we are reliant on international gas markets. That means that families in Glasgow are paying more for their heating because of factors totally outside their control. What are the Government doing to ensure that Britain has control of its own energy supply?
Michael Shanks
My hon. Friend is right to say that his constituents in Glasgow—and constituents right across the country—have faced sky-high energy bills because of our exposure to fossil fuels. Although very little Russian gas came into our system, we remained exposed to the volatility of the international markets.
The Opposition want us to go back to the fossil fuel casino and hope that this time we get a better hand, but we are determined to protect the public of this country in the long run from those price spikes and to ensure that we have energy security because of clean power grown here in the UK, delivered by jobs that we are investing in. That will help to remove the volatility that so many of our constituents have faced for too long—energy security, good jobs and tackling the climate crisis.
Harriet Cross (Gordon and Buchan) (Con)
Energy sovereignty and energy security are vital, and gas will play an important role in that for years to come, but our domestic production is falling because of this Government’s policies. Imports of liquefied natural gas are up by 40% this year, and domestic production is meant to get to 25% by 2030. We must support domestic production, and to do that the Government must scrap its policy of an increased energy profits levy and open up new licensing. When will the Government do that, and when will they support jobs, investment and domestic production from the North sea?
Michael Shanks
The hon. Lady is right: domestic production is important, which is why we have said that for decades to come, oil and gas will continue to be part of our energy picture in the UK. The number of imports has been increasing for a long time—it is not a recent trend. The North sea has been in transition for decades, and we must build up the energy that comes next. On her specific question, we consulted on what the future of the energy profits levy will look like. It comes to an end in 2030, and it is a matter for the Chancellor at the Budget. On the future of the North sea generally, we had a wide-ranging consultation, including on the future licensing position, and our pragmatic plan will be published in the coming weeks.
Lisa Smart (Hazel Grove) (LD)
The Minister for Energy (Michael Shanks)
Through Great British Energy’s local power plan, we are rolling out the biggest expansion of community energy for decades. We are supporting projects with funding through the community fund, and Great British Energy will also support communities to roll out small and medium-scale renewable energy projects by providing commercial, technical and project planning assistance. That will increase its capacity to build a pipeline of successful projects owned by local communities.
Lisa Smart
More community energy is obviously good for the planet and for the pockets of bill payers, and it is certainly good for our energy security. The amazing volunteers at Stockport Hydro, Greater Manchester’s first hydroelectric producing plant which is in the River Goyt in my Hazel Grove constituency, tell me about the problems they are having with the Environment Agency stopping them doing their work. They were kept waiting for 227 days for the result of a licence inspection, and they have struggled to get information from it. A lead volunteer told me that if the EA continues in this way, community energy is “doomed”. What conversations is the Minister having across the Government to ensure that community energy delivers the clean power that we need?
Michael Shanks
I thank the hon. Lady for that question, and pay tribute to all those involved in Stockport Hydro for the work they are doing. Clearly, it has been too much of a challenge, and we need to make it easier. Alongside much-needed funding, we must make the regulatory landscape much easier, and across Government we are having a review of regulation to ensure that we can move faster to build things in this country. Nowhere is that more important than in communities that have come together to deliver a project. That is good for us as a country, good for social and economic growth and good for local communities, and we need to make it easier. I am happy to discuss the issue further with the hon. Lady, because these are the kinds of projects that we want across the country.
Charlie Dewhirst (Bridlington and The Wolds) (Con)
The Minister for Energy (Michael Shanks)
Ministers in my Department have regular discussions with Cabinet colleagues on a range of matters, including solar policy, but the large-scale solar projects that are given to the Secretary of State to make quasi-judicial planning decisions on are not part of such conversations. Solar power remains a hugely important part of our energy mix. It is the cheapest and fastest to deploy, and will be a key part of how we meet our mission for clean power by 2030.
Charlie Dewhirst
Given that the Department for Environment, Food and Rural Affairs has yet to publish its land use framework or its 25-year farming road map, would it be prudent for the Government to pause all major solar farm applications until such time as they have a joined-up strategy for energy production on agricultural land?
Michael Shanks
There were 14 years when the Conservative party could have had a land use framework or a centralised strategic spatial energy plan, but it did not. We are now doing those things, and there will be an alignment between the strategic plan for energy and the work that DEFRA is doing on a land use framework. On solar, even the most ambitious plans for the roll-out of ground-mounted solar would use only 0.4% of UK land by 2030. These projects are important for the hon. Gentleman’s constituents and for people across the country if we are to bring down bills as quickly as possible, and of course they go through a rigorous planning process.
Alistair Strathern (Hitchin) (Lab)
Solar energy is an important part of securing clean, cheaper energy for our country, but one way to reduce its pressure on land use is to ensure that we are making better use of rooftops. It is fantastic that after my campaigning, we are going to be much tougher in requiring new homes to come with solar panels, but all too often car parks and commercial properties are still not making full use of the technology. How can we do far more to make use of those rooftops too, in order to generate the clean, cheap power that we all need?
Michael Shanks
My hon. Friend is absolutely right. There is a broad consensus across the House that if we can put solar on rooftops, that space can be utilised to generate clean power. We are ambitious and excited about the opportunity to put solar panels on as many rooftops as possible. We consulted recently on whether car parks should have solar panels on them. We are looking through the responses to that consultation and will say more in due course, but wherever possible, if we can generate clean, cheap power by utilising rooftops for solar, we want to do it.
Greg Smith (Mid Buckinghamshire) (Con)
I agree with the Minister that rooftops are the place to put solar. Indeed, as my right hon. Friend the Member for East Surrey (Claire Coutinho) made clear when she was Secretary of State for Energy Security and Net Zero, agricultural land should be protected from ground-mounted solar installations. The campaign group Stop Oversized Solar has found that operational sites and solar facilities in the planning pipeline alone are set to replace an area of farmland bigger than Merseyside, and that overall up to 5% of UK cropland is at risk from solar, so why do the Government persist with their claim that land take will be 1%? When Labour said that food security is national security, did the energy team not get the memo?
Michael Shanks
I always welcome consensus in the House, so I am delighted to hear that there is still consensus on rooftop solar. The Conservatives have moved away from so many of their previous positions and I was not sure if this was going to be another, although I wonder why that rooftop solar was not built over the past 14 years. But we will leave that to one side.
On the hon. Gentleman’s question about land use, we have been clear that ground-mounted solar will play an important part as the energy cannot all be generated from rooftop solar, but we want to ensure that communities are part of the decision making. The planning process is hugely important in that, but we also recognise that some communities have felt that there has not been a joined-up strategic approach. That is why we are publishing the strategic spatial energy plan, alongside the land use framework. Even in our most ambitious scenarios, 0.4% of land will be taken up with solar.
Susan Murray (Mid Dunbartonshire) (LD)
The Minister for Energy (Michael Shanks)
Great British Energy and Great British Energy Nuclear will invest over £8.3 billion this Parliament in home-grown clean power. We will keep backing renewables through contracts for difference, which secured record amounts of solar and the world’s largest floating offshore wind farm last year. Allocation round 7 will build on this success, for which we have already announced a budget of over £1 billion across offshore wind. The results will be announced in due course.
Susan Murray
Across Scotland and the UK, towns that once powered our economy have been left behind, as coalmines, steelworks, dockyards and, as we are now hearing, refineries and chemical plants are closing down, taking generations of skilled workers with them. We now have a chance to revive those communities by rebuilding British manufacturing to supply the components for our green transition, as well as for the wider net zero economy. As the Government prepare to conclude their consultation on the future of the North sea, do the Government plan to invest in the factories of Britain and in upskilling our workforce to be the innovative and sustainable local supply chain that the North sea and our net zero economy need?
Michael Shanks
Yes. The hon. Lady touches on a number of points. The transition means building on the industrial strategy that we outlined as a Government, because are not agnostic about industrial policy—we care that things are built in this country again. That is why there is a £1 billion supply chain fund to ensure that we get the economic advantage of the clean power transition, as well as energy security. There is a broader question around building up the skills to ensure that there is a future workforce that can take advantage of that. She and I both know that that sits with the Scottish Government, who are woefully underfunding further education—a route that so many young Scots might take to create the opportunity to embark on a career in the energy sector—so I hope there will be a change of Government in Scotland soon.
Tom Hayes (Bournemouth East) (Lab)
I am thrilled that University Hospitals Dorset NHS foundation trust, one of the region’s biggest emitters, has secured two grants totalling £3 million from Great British Energy for solar investment, but its ambition goes further. The trust wants to develop a geothermal solution that pulls energy from the geology under the Royal Bournemouth hospital. Will the Minister meet me and representatives from the trust so that we can explore this potential decarbonisation project together?
Michael Shanks
It sounds like a great idea. I am very happy to meet my hon. Friend and representatives from the trust to discuss that.
Dr Al Pinkerton (Surrey Heath) (LD)
Rachel Taylor (North Warwickshire and Bedworth) (Lab)
The Minister for Energy (Michael Shanks)
My right hon. Friend the Secretary of State and the Minister for Climate are in Brazil at the conference of the parties, fighting for Britain’s interests in the global transition and playing our part in securing leadership on the climate crisis. Since our last oral questions session, we have announced that 250 schools will benefit from Great British Energy’s solar roll-out; SSE has announced £33 billion of private investment in the energy system; we have set out our clean energy jobs plan to create 400,000 new clean energy jobs; and letters have started to arrive for the 6 million families who will receive £150 off their bills this winter. That is the difference this Government are making in order to deliver energy security, climate leadership and good jobs, and to protect households and businesses.
Rachel Taylor
Last year, over 1,000 former mineworkers in North Warwickshire and Bedworth benefited from this Government’s historic decision to release the surplus from the mineworkers’ pension scheme. Now, members of the British Coal staff superannuation scheme, such as my constituents Ray Sweet, Don Jennings and Andy Callow, are seeking that same justice. I held an event with the BCSSS members in my constituency, at which I heard from a woman who joined the National Coal Board at 16 and went to the mines at 5.30 in the morning to ensure night shift miners got their pay packets. Could the Minister reassure—
Mr Speaker
Order. Sorry, but one of us is going to have to sit down. Please—topical questions are meant to be short and punchy. You cannot do a full statement. I think you ought to try to catch my eye for an Adjournment debate, because this is a very important subject. Minister, I think you have got the principle of the question.
Michael Shanks
I pay tribute to all those who toiled in our coalmines for a very long time—we owe them a great debt. As the Prime Minister said in the House on 12 November, the Government remain committed to agreeing a way forward with the trustees that will benefit scheme members. We will make an announcement on this issue in due course.
Claire Coutinho (East Surrey) (Con)
At this COP, acres of the Amazon were chopped down so that the Secretary of State can lecture us about saving the planet. Can the Minister justify why his Government did not even put a single penny into the forest fund, which could have at least repaired some of the damage?
Michael Shanks
I think the shadow Secretary of State has a bit of a cheek talking about anyone’s action on the climate crisis when she has completely reversed her own position on it. The UK’s climate leadership is an incredibly important contribution to the world’s action on the climate crisis. That crisis is not a future threat, but a very present reality. The UK has been a part of the forest initiative; we have supported Brazil and others to make that happen. Of course, coming up to a Budget and with tight fiscal considerations, we want to make sure that every pound of British taxpayers’ money is spent. We have not ruled out any future support for such schemes. Britain’s leadership at COP and at other international forums is important for our own economic interests, but also for tackling the global climate crisis.
Mr Richard Quigley (Isle of Wight West) (Lab)
Michael Shanks
This is partly why the upgrade of our grid is so important. My hon. Friend references the particular example of the Isle of Wight, but right across the country we need to build much more transmission infrastructure so that we can get power to communities and businesses that need it most and bring down bills by getting clean power to people. I am happy to speak to him further about the specific case, and I know he is already engaging with the distribution network operator responsible for this case to make things happen.
Mr Lee Dillon (Newbury) (LD)
Mr Speaker
May I also suggest that this is such a big issue, but nobody put in for an urgent question? I really do think it is important.
Michael Shanks
First, I am sure the whole House would echo my hon. Friend’s comments about her constituents in Monmouthshire. Our thanks go to the emergency services, who have done an incredibly diligent job in difficult circumstances. She is right that it is yet another example of where the climate crisis is not some theoretical future threat, but a present reality. We have to tackle the climate crisis as quickly as possible. That is why this Government are doing everything we can to get off of fossil fuels, while also investing in flood defences across the country.
Robbie Moore (Keighley and Ilkley) (Con)
Chris Vince (Harlow) (Lab/Co-op)
Michael Shanks
I congratulate the school in my hon. Friend’s constituency. It will start to receive money off its bills immediately, which of course can then be reinvested into delivering exactly what we want schools to be delivering: better teaching facilities and resources for schoolchildren. When I visited a school that had GBE solar panels on its roof, I learned that the children had had a number of lessons on clean energy; they had learned about how sustainability was improving their school and about the wider impacts on the planet. That is an important curriculum benefit.
Sarah Dyke (Glastonbury and Somerton) (LD)
Bob Blackman (Harrow East) (Con)
Michael Shanks
That is exactly why we are embarking on upgrading the national transmission system and investing in that. I would gently say that the hon. Member’s party seems to be opposing most of that action at the moment, but it is critical not just for future power sources, but to ensure that we can get power to demand centres where we know there are economic growth opportunities. It is hugely important, and that is why we are driving it forward.
Mr Jonathan Brash (Hartlepool) (Lab)
Hartlepool has one of the largest clean energy economies in the north of England with thousands of local jobs—jobs that Reform would destroy. At the same time, we have one of the largest nuclear industries. We have signed the biggest deal in our history—jobs that the Greens would destroy. Does the Minister agree that when it comes to energy policy, we’ve got clowns to the left of us and jokers to the right?
Linsey Farnsworth (Amber Valley) (Lab)
Reform-led Derbyshire county council has recently abolished its climate change committee and scrapped its aim to tackle the causes and impact of climate change. Will the Minister outline the steps that his Department is taking to ensure that local authorities continue to address climate change effectively and meet national targets?
Michael Shanks
That sounds like just another example of the chaos that Reform-led councils across the country are inflicting on communities. The truth is that we had just a few moments ago an example of why local councils thinking about the impact of climate change is so important, and we now have Reform councils dismissing the very action that would protect communities from devastating floods and other impacts of climate change. It is important that we stay the course, recognise that the climate crisis is important and do everything possible to protect communities.
Sir Edward Leigh (Gainsborough) (Con)
Earlier, the Minister said that only 0.4% of land is being taken by solar, but he knows that in the Gainsborough constituency the number is far higher, because I went to see him—he was most gracious and reasonable. He will know that 14,000 acres around Gainsborough will be taken from some prime agricultural land. Just to be reasonable, will he have a look at this again and try to take all these solar applications together?
Michael Shanks
Let me say that the Father of the House was also very reasonable in the meeting that we had; I am glad that we had that opportunity. If we hit the absolute ambition of the solar roll-out, we will have 0.4% of land, but as I said to him, I recognise that a number of projects in particular areas have not been strategically planned for a long time. That is why we are bringing forward the strategic spatial energy plan, so that we plan the system across the whole of Great Britain and so that communities feel that things are being done not to them, but with them.
Melanie Ward (Cowdenbeath and Kirkcaldy) (Lab)
Today’s news that ExxonMobil is to close the Fife ethylene plant in Mossmoran is a devastating blow to many of my constituents. I am furious that contract workers appear to have been locked out of the site this morning. News reaching me suggests that ExxonMobil staff, many of whom have decades of service, have been told that they will lose their jobs but have no idea of the redundancy package they will receive. That follows months of attempts to engage with ExxonMobil in good faith, during which it was not forthcoming about its intentions or about what the Government can do to save the plant and the jobs. ExxonMobil continues to ignore my requests for clarity. Will the Government do all that they can to support a future for the plant and its workers? Will the Minister join me in calling on ExxonMobil to share vital information at this incredibly—
Mr Speaker
Order. [Interruption.] I am speaking to the hon. Lady. This is a very important subject, and I really do think it matters—she is absolutely right. I think such issues should be heard and discussed in the Chamber. It might be worth thinking about putting in for an urgent question, because this issue is so serious.
Michael Shanks
Thank you, Mr Speaker.
This is obviously a hugely concerning time for the workers in Mossmoran, their families and the wider community. The Government have been in regular contact with the company. I know that my hon. Friend the Member for Cowdenbeath and Kirkcaldy (Melanie Ward) met with the Business Secretary recently and has been trying to engage with the company as much as she possibly can. The company has faced significant global challenges, including closing a chemical plant in France. We stand ready to provide whatever support we can, but the issues she has raised are obviously deeply concerning. I know that the Business Secretary will look to speak to her and others to ensure that we have as robust a response as possible and that we support the workforce at what is obviously an extremely difficult time.
Dr Ellie Chowns (North Herefordshire) (Green)
With just a few days of COP30 left, it is incredibly disappointing that UK climate leadership is at risk because of the Government’s decision not to contribute to the tropical forest forever facility to end forest destruction. Can the Minister please confirm whether reports that that decision is under review are accurate? Can he assure the House that the UK will play its part in contributing directly to taking its fair share of ending forest destruction?
Michael Shanks
We are taking a leading role at COP and at home by driving forward the clean power mission, which requires the infrastructure that the Green party regularly opposes—the party talks on this issue, but it does not actually deliver it. We are at COP fighting for Britain’s interests and playing our part in leading the world and ensuring that collectively we can collaborate to tackle the most existential crisis the planet faces, and we will continue to make that a key priority of this Government.
Liz Twist (Blaydon and Consett) (Lab)
Polling by National Energy Action has shown that four in 10 adults with prepayment meters have found themselves without credit and unable to access heating or power in the past 12 months. Families often face immense distress as standing charges continue to accrue as a debt that must be cleared before energy can be accessed again. Does the Minister agree that Ofgem must explore practical reforms to ensure that households are not penalised for maintaining access to energy?
Alicia Kearns (Rutland and Stamford) (Con)
Last year, 2,000 acres of farmland in my constituency were approved for solar by the Government, and now a further 2,000 are being eyed up immediately next door. Together, those plants will build the first UK solar city, bigger than the Vatican and Monaco put together. When will the Government bring forth the land use strategy, and when will they impose minimum compensation for those who are currently losing their countryside and their communities?
Michael Shanks
I have always appreciated my engagement with the hon. Lady on these questions. The cumulative impact of applications is covered by the planning system, which considers all those impacts, but the hon. Lady is right to suggest that the land use framework and the strategic spatial energy plan are about taking a more strategic approach to the way in which we look at where such projects are sited. As for the question of community benefits, we have consulted on that and will say more shortly, but our general view as a Government is that communities should benefit from hosting infrastructure, particularly solar, which has often not produced the same community benefits as other infrastructure.
Euan Stainbank (Falkirk) (Lab)
Last month the Energy Minister stated that the £200 million investment in Grangemouth from the national wealth fund that was secured by Scottish Labour Members has brought private investment to the table. Does he agree that we need an anchor industry in Grangemouth with a scale and skills profile similar to those of the former oil refinery, and that we also need the Government to take a partial stake and to make an announcement, this side of Christmas, on the direction of Grangemouth’s industrial future?
Michael Shanks
I pay tribute to my hon. Friend, who has worked extremely hard with the Government and with the national wealth fund to ensure that we are bringing projects forward. More than 100 projects came forward for that £200 million investment by this Labour Government through the wealth fund; we are considering all of them, and hope to make announcements soon. However, as my hon. Friend will understand, given the substantial amounts of public money involved, we must ensure that due diligence in respect of all those businesses and projects is complete before we can make any announcements.
Graham Leadbitter (Moray West, Nairn and Strathspey) (SNP)
In the light of the deeply damaging situation at Mossmorran, what is the Minister’s assessment of the potential impact on the Acorn carbon capture, utilisation and storage project?
Michael Shanks
We are obviously still processing that news this morning, but I can say that I have had a number of conversations to ensure that the wider energy infrastructure as it relates to Mossmorran and to Grangemouth itself, and the pipelines that connect them, will not pose any risk to our energy system. As for the wider question of Acorn, I have taken that forward recently, having gained the carbon capture part of the brief, and I meet the company regularly. We have put money into that project because we want to see it succeed.
Lillian Jones (Kilmarnock and Loudoun) (Lab)
XLCC’s project to build the UK’s first high-voltage direct current subsea cable manufacturing factory at Hunterston, with its headquarters in my constituency, represents a major opportunity for Ayrshire. It is exactly the kind of investment in renewable energy that we need to drive growth, create jobs and strengthen our energy security. What steps is the Minister taking to support firms such as XLCC to delivery these projects?
Michael Shanks
One reason why we are so keen for the supply chain for the upgrade of our grid to be in the UK is our wish to ensure that there are opportunities for factories in constituencies such as my hon. Friend’s, and I recently met her, along with my right hon. Friend the Secretary of State for Scotland and XLCC, to discuss those opportunities. XLCC is currently changing its business model but remains committed to being part of the supply chain for cables in the future, and we will continue to do everything we can to support it.
Bradley Thomas (Bromsgrove) (Con)
The oil refining industry employs tens of thousands of people and is crucial to our energy security. It is also a key part of the ministerial brief. The sector is under immense pressure, so can the Minister tell the House when he will meet industry representatives directly?
Michael Shanks
I have met industry representatives, and when I did so they told me that it was the first time they had met anyone from the Government in 13 years. Many of the issues that are now emerging have been long in the making because of the last Government’s failure to recognise their importance. However, the hon. Gentleman is right to say that refineries are an important part of our energy mix and our economy. We will do all that we can to support them, and I continue to meet their representatives and those of Fuels Industry UK regularly.
Jim Shannon (Strangford) (DUP)
Here is a pithy question, which I hope will be important for us in Northern Ireland. Will Northern Ireland receive a dedicated share of UK-wide peatland funding schemes such as those covered by the Nature for Climate Fund?
Hydro Benefit Replacement Scheme
Michael Shanks Excerpts(3 days, 23 hours ago)
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The Minister for Energy (Michael Shanks)
I am tabling this statement to inform Members of the outcome of the statutory review of the hydro benefit replacement scheme and the common tariff obligation, which help protect consumers in the north of Scotland from inherently high costs of electricity distribution in this region.
Electricity network charges are paid primarily by suppliers and then passed on to consumers. These charges are split into those for the high voltage transmission network, and the low voltage distribution network. It costs significantly more to operate and maintain the electricity distribution network in the north of Scotland than elsewhere, due to its large and sparsely populated terrain. Under the principle of cost reflectivity, this means consumers in this area face higher distribution network charges.
The hydro benefit replacement scheme was established under the Energy Act 2004 and provides an annual cross-subsidy—£112 million in 2024-25—which will reduce electricity distribution charges for consumers in the region by around £70 per household in 2025-26. It is funded by electricity suppliers across Great Britain, and hence ultimately by consumers, at an annual average cost of between £1 and £1.50 per household.
The common tariff obligation places a requirement on suppliers’ charging arrangements in the north of Scotland to ensure domestic consumers are not charged different prices based on their location within the region. There is no direct monetary amount attached to the common tariff obligation.
There is a statutory requirement to review the hydro benefit replacement scheme every three years. There has been a long-standing ministerial commitment to review the common tariff obligation alongside the hydro benefit replacement scheme.
The Government have reviewed these schemes through engagement with our delivery partners in Scottish and Southern Electricity Networks and Ofgem, combined with analysis of distribution charges and the assistance amount. The north of Scotland continues to have significantly higher charges compared to the rest of GB and therefore it remains appropriate for assistance to be targeted. The review concluded that the current design continues to strike the right balance between protecting consumers in the north of Scotland and maintaining the benefits of cost-reflective charging, which promotes efficient use of the network and minimises overall system costs. As such, the schemes will be retained in their current form.
The Government’s recent decision on reformed national pricing has no impact on the outcome of this review.
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Small Modular Nuclear Reactor Power Station: Wylfa
Michael Shanks Excerpts(3 days, 23 hours ago)
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Urgent Questions are proposed each morning by backbench MPs, and up to two may be selected each day by the Speaker. Chosen Urgent Questions are announced 30 minutes before Parliament sits each day.
Each Urgent Question requires a Government Minister to give a response on the debate topic.
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Llinos Medi (Ynys Môn) (PC)
(Urgent Question): To ask the Secretary of State for Energy Security and Net Zero if he will make a statement on the development of the UK’s first small modular nuclear reactor power station at Wylfa.
The Minister for Energy (Michael Shanks)
I welcome the hon. Lady’s commitment to securing a new nuclear project in her constituency. She and I have had a number of discussions about nuclear power and other energy projects.
Nuclear energy provides the stable low-carbon baseload we need to keep the lights on and to support our economy. It is central to our clean power mission. That is why we have launched a new golden age of nuclear, committing £17 billion to the most ambitious programme of new nuclear for a generation. Our small modular reactor—SMR—programme, led by Great British Energy Nuclear, is an example of British innovation at its best. These mini reactors are smaller and quicker to build than traditional nuclear power stations, and we have been considering which is the best site to kick off the SMR programme now that we have reached that decision.
Last week, we announced that Wylfa on the north coast of Anglesey—Ynys Môn—is our chosen site for GBE Nuclear’s first SMR project. A written ministerial statement on the matter was made on Thursday. The initial project will see, subject to contracts, the construction of up to three Rolls-Royce SMR units. The site could host as many as eight, subject to future policy and funding decisions. That will deliver the largest industrial investment in north Wales for a generation. It will provide 3,000 good jobs on the site at peak construction. GBE Nuclear already looks forward to working with Welsh communities on the project, with work due to start on the site as early as next year.
We will be progressing the SMR project across this Parliament, working towards final investment decision. Meanwhile, large-scale nuclear power stations will also continue to make a vital contribution to our home-grown clean energy mix, complementing these SMRs. We will continue to act decisively, to invest ambitiously and to work with communities, investors and allies to deliver this golden age for new nuclear.
Llinos Medi
Diolch yn fawr, Llefarydd, for granting the urgent question.
Last week’s announcement that nuclear power will return to Wylfa is hugely welcome. I am pleased that the Government have backed the site. As I have mentioned several times in this Chamber, Wylfa is recognised as the best site in Europe.
May I pay tribute to the teamwork over decades, by elected Members from all parties, campaigners, businesses and the local community, who have long fought for new nuclear at Wylfa. Ynys Môn has known nuclear for 65 years, with a strong local college and university ready to train a skilled workforce of the future.
To maximise the success of the project, the Government must work with the local authority on behalf of our community to deliver tangible economic and social benefits. That includes maximising opportunities in the local supply chain. The potential is clear, but the challenge is turning it into reality. After many false dawns and broken promises, my optimism is cautious. We know the cost of failure on Ynys Môn: when the Wylfa Newydd project collapsed, it robbed a generation of the opportunity to live and thrive in their community.
Recent data from the Nuclear Industry Association shows that nuclear jobs on Ynys Môn are at a record low. We cannot afford further setbacks. Clear timelines and transparent decisions are therefore essential. Can the Minister confirm when the Rolls-Royce contract will be signed, the general design assessment completed and the final investment decision made? As it stands, the SMR project is already four years behind the previous Horizon project at Wylfa. The project had a planning application and was approaching a final decision before it collapsed.
Funding the SMR project at Wylfa remains critical. Although the Government’s £2.5 billion for the SMR programme is welcome, most of the costs at Wylfa will currently be funded privately. Given the problems of the past, and that Wylfa will host a fleet of SMRs—these first-of-their-kind reactors—are the Government prepared to demonstrate their full commitment?
We cannot let this historic opportunity slip through our fingers yet again. This is a unique opportunity to create a project that will deliver for our language, our culture and our young people. I urge the Government to work with myself, key stakeholders and developers to provide the best project ever to deliver prosperity and energy security.
Michael Shanks
The hon. Lady is right that the community in Ynys Môn faced a number of false starts under the previous Government. This is an historic opportunity—a huge moment—as the project moves forward with tangible timelines in place and the £2.5 billion that she mentioned. Rolls-Royce is taking forward three SMRs initially, but there is the potential for more in the future. People will start to see jobs soon. We expect that there will be work on the site as early as next year, including 3,000 jobs when the construction phase is at its peak.
I join the hon. Lady in paying tribute to all those who have worked on this project over a great many years. There have been a lot of false starts and disappointments, but last week was a huge moment not just for realising the potential of the site with the next generation of nuclear, but for the UK to see SMRs actually move forward after years of talking, and, with that, the huge investment coming into the social and economic fabric of communities like hers.
The Prime Minister spoke last week about the investment—in colleges, for example—to ensure that we have the skilled workforce in the local area. Nuclear prides itself on creating many well-paid and sustainable jobs. Of course, the hon. Lady’s community has benefited in that way from previous generations of nuclear. We are determined to ensure that those economic and social benefits are felt by her constituents and for those right across the UK.
Lizzi Collinge (Morecambe and Lunesdale) (Lab)
My constituency hosts Heysham 1 and 2 nuclear power stations, and provides the cleanest energy of any UK constituency, so obviously I am keen that Heysham continues to be part of our golden nuclear future. Is the Minister, like me, eagerly awaiting the report of the regulatory review—particularly on the outdated semi-urban population density criteria—and will he work with me to ensure that the benefits of the Heysham site are known across the industry?
Michael Shanks
My hon. Friend rightly highlights the huge economic advantage of nuclear. I grew up in Ayrshire, next to Hunterston, so I know how important nuclear power stations are for the communities that grow up around them. We are considering existing sites. This is not, of course, the end of our nuclear ambitions; we have been clear that we see nuclear as a hugely important part of our energy mix now and in future. Our work to consider the regulatory regime will report in due course to ensure that we have a robust process that rightly recognises the importance of nuclear safety but is also flexible enough to take advantage of the opportunities of nuclear.
Michael Shanks
Well, let me start at the end, because it is nice when we have a rare moment of consensus in this place now and again. I would add our friends in the Scottish National party to the last question, although I am not quite sure about Plaid Cymru—some of its members support nuclear and some do not, even though we are building in Wales. The right hon. Lady is right to say that nuclear must be the bedrock of our clean power system. It is also an economic opportunity, as we all know. I welcome that brief bit of consensus.
The right hon. Member says “build, build, build,” but all the Opposition did was consult, consult, consult. She talks about signing off new nuclear, but none of it has been built. It is easy to sign things off, but the previous Government committed no money—not a penny of funding. On one of the biggest days for our domestic nuclear industry in a very long time, it was remarkable to hear Opposition spokespeople last week talk down the sector. They talked big for 14 years, but built very little. Not a single new nuclear project was completed in their entire time in office, and that is because they did not put any funding into delivering it.
We have committed almost £20 billion of real money to build real projects, because we are ambitious about our nuclear future, about Sizewell C and about this SMR programme. We have not ruled out any future giga-scale projects, but our ambition is matched by funding to actually deliver them. Wylfa was the absolute best site on offer, which is why we chose it to host this most important, flagship project for the United Kingdom. We are delivering jobs and investment in Wales, and we are delivering the next generation of nuclear after many, many years of disappointment by the Conservatives.
Torcuil Crichton (Na h-Eileanan an Iar) (Lab)
Scotland’s Deputy First Minister, Kate Forbes, told the SNP conference that her Government would not allow Labour to turn Scotland into a “nuclear playground”. I guess she knew her audience, but given her reputation as the common-sense member of that Government, she should have known better. That kind of playground politics is an insult to Scotland’s nuclear workers, thousands of whom leave Scotland to work in highly unionised, safe, skilled jobs in England—and now Wales—to build the next generation of nuclear power stations.
Does the Minister agree that Scotland could have these jobs—that Dounreay, Torness in East Lothian, and Hunterston in the constituency of my hon. Friend the Member for Central Ayrshire (Alan Gemmell) could have these jobs—if it was not for the Dr Nos of the SNP and their outdated opposition to nuclear power?
Michael Shanks
I cannot help but notice that none of the SNP MPs is in the Chamber for this statement, so they are not defending the ideological objection that they seem to have. My hon. Friend, not surprisingly, is absolutely right to highlight the Scottish Government’s playground politics; this is holding back investment right across the country, as well as the necessary energy security.
We know that nuclear power stations across Scotland have delivered generations of well-paid, skilled and sustainable jobs. I recently met people in Torness who had started out as apprentices and who are still there, 20 or 30 years later, working in the nuclear industry. There will be jobs in Scotland in the supply chain for the SMR programme and Sizewell C, but it is a great shame that the Scottish National party is holding back the full potential of Scotland to be part of this nuclear story. I hope that the people of Scotland will vote for a different Government in May, so that we can get on with delivering the jobs and investment in communities right across Scotland.
Madam Deputy Speaker (Caroline Nokes)
I call Liberal Democrat spokesperson.
Charlie Maynard (Witney) (LD)
New small modular reactors have real potential to help reduce our reliance on foreign gas and bring down energy bills, as well as bringing a welcome boost to jobs and investment in Anglesey. SMRs should be where the focus is when it comes to nuclear, not big, expensive nuclear power stations that cost multiples more and take far longer to build.
The Liberal Democrats are pleased to see SMRs coming forward as part of a mix of cost-effective and safe decarbonised power generation, but will the Government please confirm that they will also maintain focus on boosting wind and solar power generation in order to bring down everyone’s energy bills? My hon. Friend the Member for Thornbury and Yate (Claire Young) has been working closely with constituents who will now be disappointed that the alternative site of Oldbury has not gone forward, so can the Minister clarify what the future is for that site?
Michael Shanks
The hon. Gentleman is right to say how important this next generation of nuclear is—but alongside other technologies. The Government have been really clear that our clean power mission is about wind, solar and storage, but it is also about nuclear. That combination is how we deliver our energy security and get away from the volatility of fossil fuels, and it is how we create thousands of jobs across the country. We need all of that.
The hon. Member is right to highlight Oldbury, which is a hugely important nuclear site that is owned by Great British Energy Nuclear. We continue to look at the future potential for Oldbury and other sites. This is not the limit of the Government’s ambition on nuclear; it is the next stage of that ambition. Wylfa was judged as the best possible site for the SMR programme and it is right that we put our flagship programme on the best possible site, but we are ambitious about the future of nuclear and Great British Energy Nuclear is looking at a range of sites across the UK—including both Oldbury and sites in Scotland—for potential future projects.
Charlotte Nichols (Warrington North) (Lab)
Although this announcement is a welcome step forward for the SMR programme and the community on Anglesey, after suffering many broken promises and false starts, it is abundantly clear that the UK will not meet our future clean energy needs without further gigawatt-scale plants alongside SMRs and AMRs. To that end, and with Wylfa having been widely considered one of the best sites, if not the best, in the UK for a full gigawatt-scale reactor, does the Minister grasp the urgency in setting out the road map for wider nuclear industry needs for future gigawatt sites beyond Sizewell C?
Michael Shanks
My hon. Friend is a huge champion of the nuclear industry, and I have learned a huge amount from her in my time in this post. I am sure the whole nuclear industry is grateful for her work on the all-party group on nuclear energy, and in other activities throughout the House to ensure that these issues are always top of the agenda. Great British Energy Nuclear has been charged with driving forward our ambition for nuclear, and the SMR programme is a key part of that, as are Hinkley Point C and Sizewell C, and we are also looking at what future potential we need.
Our country’s energy needs will clearly only increase in the coming years, and we will be looking at the future of that energy mix, and the mix of renewables with nuclear. The Secretary of State has charged Great British Energy Nuclear to look at what more projects there will be. I take my hon. Friend’s point about a road map to give some certainty to that, and I am sure that the Minister for Science, Innovation, Research and Nuclear, Lord Vallance, will have heard that comment, as well as Great British Energy Nuclear, and I am sure they will work with her on that.
Graham Stuart (Beverley and Holderness) (Con)
Like the shadow Secretary of State I welcome the announcement on moving forward with SMRs, but like the Minister’s extremely knowledgeable hon. Friend the Member for Warrington North (Charlotte Nichols), I am concerned about gigawatt scale. Wylfa is truly the best site for a gigawatt-scale nuclear development. When we build in such a way we create a lot of jobs in north Wales, whereas bringing in a modular pre-made SMR will do less of that. Why was the decision made to put SMRs on Wylfa, when Wylfa is practically unique in its attributes for large-scale gigawatt nuclear production, and many sites could host SMRs? Will the Minister please explain that to the House, because I genuinely do not know the answer?
Michael Shanks
I am grateful for a genuine question in the House of Commons—always appreciated. As I said earlier, the decision was made that Wylfa was the best possible site for SMRs. This is a hugely important project for us, starting with three SMR units, but with potential at Wylfa to increase that, which is a huge opportunity. The right hon. Gentleman is right to say that Wylfa would also have hosted at gigascale, but after a great many years of Wylfa being promised lots of things, the option on the table was either a project with funding now, and a clear pathway to delivery on an important site that will deliver the outcomes we need as a country, or a potential wait for another spending review where we might make a decision about future nuclear. We are ambitious about what the future of gigascale nuclear would look like, but right now funding has been confirmed for SMRs. It was right that Wylfa, which is a significant site and has a skilled workforce, takes advantage of that after a significant amount of time of things being promised but not delivered. As I said, we have not set that as the limit of our nuclear ambitions, and we will say more in due course about what future sites might look like. Great British Energy Nuclear is looking at those now.
Steve Race (Exeter) (Lab)
I welcome the announcement of the new SMRs at Wylfa. This is British innovation we can be proud of, leading to decarbonisation of our electricity grid, and helping to combat climate change. It is exactly the sort of policy that my Exeter constituents want from this Government. Does the Minister agree that supply chains at Wylfa and Sizewell C will benefit businesses and workers across the entire United Kingdom, alongside the local areas where they are based?
Michael Shanks
My hon. Friend is right: we should all be—I know we are, and the consensus has been welcome—hugely proud of this British innovation. We have a huge opportunity to be at the forefront of a technology that I have no doubt will change the energy system of a great many countries around the world, and Britain can be at the leading edge of that. This is a hugely important moment, and we should recognise that. As well as 3,000 jobs in Wylfa for the construction of the site, as my hon. Friend says there is a significant number of opportunities, including thousands of jobs across the supply chain. Great British Energy Nuclear aims to ensure that 70% of supply chain products are British built across the SMR fleet, ensuring that those SMRs are not just a product of British innovation, but that they are clearly stamped with “Made in Britain.”
Sir Julian Lewis (New Forest East) (Con)
No one likes to consider the prospect of international conflict, but we have seen from that between Ukraine and Russia how dangerous a situation can be when fuel supply installations are targeted. What thought have the Government given to affording the same level of protection against either sabotage or external attack for these new smaller reactors as those that are already built into the construction of the larger plants?
Michael Shanks
The right hon. Gentleman asks a typically important question. We take the security of our nuclear fleet in all its forms extremely seriously, and SMRs are a new part of that. The security arrangements will take into account the existing nuclear constabulary, which will look at security as soon as construction starts to ramp up on site. Across Government, we have been looking at the broader question of how we ensure our critical national infrastructure is protected in an increasingly hostile world, not just from physical attack and sabotage, as the right hon. Gentleman points out, but from cyber-attack, which is becoming more of a priority. My Department and the Cabinet Office are working together to come up with a more detailed plan to ensure that we do that, but the security of all our energy infrastructure is a top priority.
Alan Gemmell (Central Ayrshire) (Lab)
I congratulate the Minister on the announcement and the thousands of jobs that it will create. Is he as disappointed as I am in the SNP’s immature stance on new nuclear in Scotland that would mean that communities like mine in Ayrshire, where we have Hunterston, would not have access to thousands of new jobs? Is there anything that the Minister could do to change the SNP’s mind, short of a stonking Scottish Labour victory next year?
Michael Shanks
My hon. Friend is right to say that the SNP’s policy on nuclear is immature. Nuclear has been an important part of Scotland’s energy mix for decades. As a result, tens of thousands of people have had good well-paid jobs in his constituency, across Ayrshire and across the other nuclear sites in Scotland. After almost two decades in power, perhaps the SNP is beyond an explanation about this and so many other things, and the only answer for Scotland is change.
Mr Joshua Reynolds (Maidenhead) (LD)
The Minister is right to say that we want as many individual components of these SMRs as possible to be built in the UK, as well as the final SMRs themselves, but what work is he doing across Government to ensure not just these SMRs, but the world’s SMRs are built in the UK?
Michael Shanks
That is a hugely important question. This is a significant moment for British innovation, because we are now moving forward quickly to ensure that we are at the forefront of this innovation, so that other countries that are already looking to the Rolls-Royce designs can benefit from them as well, but made in Britain. The aim of SMRs that is different from gigascale nuclear is to get to a point where their replicability means that we can produce the SMR technology for export market as well as for ourselves. That is important for our allies across the world who want nuclear to be part of their energy mix, and it is a hugely important economic opportunity for this country as well.
Tom Hayes (Bournemouth East) (Lab)
In the first nine years of the 14 years of Conservative Government, David Cameron sent Wylfa to the wall, George Osborne begged the Chinese to invest—we are still unpicking that mistake—and Theresa May nearly killed off Hinkley Point C, and with it Sizewell C, and after that things actually got worse. Under Labour, plants are getting off the ground to end our reliance on dictators like Putin, which is to be commended. Will the Minister set out how we will build our nuclear future in all parts of the UK? May I make a particular recommendation for Dorset, because we have Winfrith, which could be a really big part of our nuclear future?
Michael Shanks
I was expecting every question today to be, “Could an SMR be built in my constituency?” but my hon. Friend is the first to ask, so he wins the prize for that. I will not labour the point, but as he says, we had a lot of promises and a lot of big talk from the Conservative Government on nuclear, but very little actually delivered. The truth is that no money was put forward for any of those things. It is easy to sign and say, “We want to deliver something,” but without putting any money forward, nothing will happen. We have committed almost £20 billion in funding to make Britain’s new golden age of nuclear a reality, which will deliver jobs in my hon. Friend’s constituency and across the country. We are ambitious about the future of SMRs. They can be sited in a great many more places than traditional nuclear facilities. We have asked Great British Energy Nuclear to look at the range of sites across the United Kingdom that are possible, not just the sites that were traditionally designated for nuclear projects. That opens up huge opportunity for the energy mix of the future, and for jobs, investment and training throughout supply chains as well.
James Wild (North West Norfolk) (Con)
In the spirit of consensus, which the Energy Minister untypically just moved away from, I join him in welcoming this announcement. I was advising the then Energy Minister when the Hinkley contract was signed and the Horizon project was proceeding, before Hitachi withdrew, so I am keen to see development at Wylfa and beyond. Will the Minister confirm what tangible steps are being taken to accelerate approval of Rolls-Royce’s design and other SMR designs, and by how much? When does he expect the first SMR to be operational at Wylfa?
Michael Shanks
Let me say genuinely that with all the debates we have about our energy mix, nuclear may be a point of consensus. That is important for the industry, so I welcome the hon. Gentleman’s comments. On the exact details of the timelines, I am afraid that I am not the Nuclear Minister, so I will get my noble Friend Lord Vallance to write to him on that point.
In terms of the overall timeline for the SMR programme, our ambition is that the SMRs will be online in the mid-2030s. There is obviously a significant amount of work to do on the site itself and on the designs, but we want to ensure that we are moving everything possible to get this done quickly. We have a first-mover advantage as a country if we can prove that this technology works, set about expanding it and look at the export market for it internationally.
David Baines (St Helens North) (Lab)
I strongly welcome this announcement. Nuclear is a growing sector. Just on Friday, in Haydock in my constituency, I helped officially to open the new HQ of Delkia, a relatively new company that does a lot of work in this sector. Will the Minister assure me and small and medium-sized businesses such as Delkia that they will benefit from this growth, supported by this Government?
Michael Shanks
My hon. Friend makes a really important point. The investment in these projects is felt in his constituency and in communities and small businesses right across the country. It is creating apprenticeships and opportunities for young people to set out in their careers in the energy industry.
As I said earlier, Great British Energy Nuclear’s ambition is that 70% of the supply chain products that will build these SMRs will be built in Britain. That is a hugely important investment right across our economy. Of course, 70% might not be the ceiling of our ambition, but this is an opportunity for communities and businesses to come forward and say, “We can help to build this innovative and hugely important part of our future energy mix, and we are really excited about the opportunities that it presents.”
Liz Saville Roberts (Dwyfor Meirionnydd) (PC)
I welcome this announcement. Plaid Cymru supports new nuclear at Wylfa unequivocally, as well as at Trawsfynydd. Last week’s statement announced AI growth zones, with two sites in north-west Wales—one at Holyhead and the other at Trawsfynydd. Will the Minister provide further information on the infrastructure required in Trawsfynydd, especially in relation to data centres and energy supply?
Michael Shanks
I think Plaid Cymru as a party has different views on this matter, but I am grateful to hear of the right hon. Lady’s support for new nuclear. The AI growth zones are all about us trying to designate an area for data centres, which is important for our future economic development, in a way that allows us to plan strategically how power will get to it and what transmission infrastructure is required. It is also about us trying to give confidence that infrastructure will be in place so that data centres know it is a site that can be invested in, which brings forward significant amounts of private investment. If she has specific questions about the infrastructure, I am very happy to speak to her outside the House.
Catherine Atkinson (Derby North) (Lab)
There will be good, well-paying jobs at Rolls-Royce in Derby to get these reactors built. That will not just benefit those doing those jobs, but power up the local economy, putting money in the tills of shops, restaurants and pubs. There is huge pride in knowing the crucial roles being played in powering Britain with clean energy. Will the Minister tell us more about the work being done to maximise the extra jobs and prosperity that will be delivered in Derby, Warrington, Wylfa and other sites as a result of this Labour Government’s investment in this historic project?
Michael Shanks
My hon. Friend is right to point out the wider impact that investment has in not just the nuclear supply chains, but the local communities that that drives forward. Nuclear tends to have much more sustainable, well-paid and trade-unionised jobs than other parts of our energy system, which means that there are wider economic benefits for those who work in the nuclear industry. We want to see a great many more jobs in nuclear right across the country. We should be hugely proud that Rolls-Royce is taking forward this project in the UK; it is hugely innovative. The UK is at the forefront of this new technology, which will change the future energy system for the UK and across the world, and we are really proud that it will be built in Britain.
Sarah Pochin (Runcorn and Helsby) (Reform)
Reform UK believes in investing in nuclear energy and welcomes this news for the north-west region, which will bring jobs and growth, including in my constituency. We are told that the Wylfa SMR will start producing power in the mid-2030s, but the procurement process will be done through Great British Energy Nuclear, a publicly owned Government company. How can the Minister assure us that this will not turn into another HS2, with spiralling costs and missed deadlines?
Michael Shanks
When I said that this was a moment of consensus in the House, I did not assume for a second that Reform would be part of that consensus, but I welcome its finally taking a serious position on the country’s energy security. We are committed to delivering this SMR programme as quickly as possible; it is important for our energy security and our energy mix, but it is also important to ensure we deliver the programme as quickly as possible on an international level. Great British Energy Nuclear is an expert company, set up by the previous Government to ensure expertise is right at the heart of steering these projects through, with a board made up of nuclear experts. That remains an important part of this programme. It is in the interest of Great British Energy Nuclear for these projects to move forward as quickly as possible, as it is in all our interests.
Mr Alex Barros-Curtis (Cardiff West) (Lab)
I welcome this brilliant announcement for Wylfa, delivering for the people of north Wales after 14 years of failure by the previous Conservative Government. I join in commending the stakeholders who have helped deliver this, including the hon. Member for Ynys Môn (Llinos Medi), my colleagues in the Wales Office, and our brilliant Welsh Labour MPs in north Wales who have been arguing vociferously for this project. It will be central to cutting energy costs and honouring our green energy commitments, so will the Minister assure me that this is just a sign of more great things to come for Wales from this UK Labour Government?
Michael Shanks
I thank my hon. Friend, and repeat my thanks to all those across the House who have been involved in these projects over many years. I particularly thank colleagues in the Welsh Government and Labour MPs from Wales who have been campaigning on this issue in recent months, as well as the hon. Member for Ynys Môn (Llinos Medi), who has campaigned on it as well.
Jobs will come from this project in Ynys Môn, but more jobs will come from the wider energy transition right across Wales, from our investment in transmission infrastructure to our investment in renewables projects, as well as in the Celtic sea and all the jobs that go with it. That will be delivered by this Government’s commitment to clean power—to delivering not just the energy system of the future, but the jobs that go with it. We will have an industrial strategy that creates jobs in Wales, after 14 years of a lack of industrial policy leading to job losses across the country. This is the beginning of great things for Wales; it is leading the way in this area, and with the expertise, skill and commitment that exists in Wales, it will do a fantastic job and make this country proud.
Jim Shannon (Strangford) (DUP)
I thank the hon. Member for Ynys Môn (Llinos Medi) for securing this urgent question and giving us an opportunity to discuss this issue. As the Minister will know, I welcome the UK’s first small modular reactor nuclear power station, recognising the strong nuclear heritage and expertise of that area of Wales. It is imperative that we all share that capacity—that we have the same capacity in Northern Ireland, without reliance on an all-island network. Will the Government commit to working with the Legislative Assembly to create a similar project in Northern Ireland that will provide power to homes and businesses throughout the area that I represent, and indeed right across Northern Ireland?
Michael Shanks
I should have come prepared with a line about whether an SMR could be sited in Strangford, because I should have known that that question was coming—sorry! As always, I welcome our discussions on energy policy; as I always say, I take the relationship with the Northern Ireland Executive very seriously, but energy policy is transferred to Northern Ireland. I do not have any direct responsibility for that, but we have been working with the Northern Ireland Government on their push to clean power, and of course nuclear power that is part of our baseload here in the UK is also important for Ireland. The interconnectors across the sea help to ensure that our energy security is a priority for both Governments, but I am happy to look at Strangford as a future candidate for an SMR.
Jonathan Hinder (Pendle and Clitheroe) (Lab)
I am delighted to see this Labour Government cracking on with new nuclear in the form of small modular reactors. When the Rolls-Royce site in Barnoldswick in my constituency was saved from closure during the pandemic, future SMR manufacturing work was specifically referenced in the dispute resolution agreement negotiated by my own trade union, Unite. As this Government are committed to creating clean jobs in all parts of the country, will the Minister and other relevant Ministers impress on Rolls-Royce SMR that some of the jobs created by this project must come to Barnoldswick?
Michael Shanks
It would be wrong for me to say that I am fully briefed on the particular issues of that settlement, but I am happy to take that away and write to my hon. Friend. Rolls-Royce winning this contract is a hugely important moment for British innovation. There will be thousands of jobs in the supply chains for this project in constituencies up and down this country.
Mr Jonathan Brash (Hartlepool) (Lab)
I welcome this announcement about small modular reactors. Thanks to the landmark deal done back in September, Hartlepool will now lead the world in advanced modular reactors, which will bring £12 billion of economic input and 2,500 jobs, and power 1.5 million homes. The pace in getting that project started is critical, so what will this Government do to ensure that regulatory alignment is in place so that spades are in the ground as soon as humanly possible?
Michael Shanks
September seems a long time ago, but during the state visit we announced the UK and US partnership—the Atlantic partnership on advanced nuclear energy—with a commitment from this Government to work with like-minded Governments with similar regulatory regimes to build nuclear, as well as to bring in the private sector much more. My hon. Friend mentions the agreement between X-energy and Centrica, with the plan to build up to 12 advanced modular reactors in Hartlepool. Thousands of good jobs will come with that, and it is a great example of where private investment, unlocked by decisions that this Government have taken, will deliver jobs across the country.
I am happy to come back to my hon. Friend on the timeline, but we have said throughout that we want to move as quickly as possible to make sure that the regulatory regime maintains the safety that the British public rightly expect, while also being flexible enough to ensure we take advantage of these opportunities when they come. We are working on that as quickly as possible.
John Grady (Glasgow East) (Lab)
It is brilliant to listen to all this chat about thousands of new jobs and billions of pounds of investment, but we are not getting any of it in Glasgow, because the Scottish National party is against nuclear power. Nuclear power is a source of reliable baseload energy and is essential for security of supply. In fact, we import nuclear energy to Scotland from time to time when the system is short. Against that background, does the Minister agree that the SNP’s anti-nuclear stance defies logic?
Michael Shanks
Of course I agree with my hon. Friend. Much of SNP policy defies logic, but this one does in particular. His constituents in Glasgow and constituents across Scotland will benefit from supply chain jobs from the SMR project and from the work we are doing at Hinkley Point C and Sizewell C. However, they are not benefiting anywhere near as much as they would, were we building those projects in Scotland. It is an economically stupid idea to ideologically block new nuclear in Scotland, but it is also a real challenge to Scotland’s energy security. For more than half of the past few weeks, nuclear has been providing electricity in Scotland. Renewables are hugely important, but they have to be balanced with storage and with nuclear. Only when we get that balance right do we deliver secure, clean, home-grown power. We need both parts of it, and the SNP is missing half of it and missing in action as usual.
John Slinger (Rugby) (Lab)
Does my hon. Friend agree that it is only thanks to this Labour Government investing at scale in our domestic nuclear industry that we can overturn the disastrous legacy of the Conservatives? Does he further agree that this Government, investing for the long term and working closely with our companies, can deliver the jobs and change to our energy system that constituencies across the country need?
Michael Shanks
It will not surprise the House that I completely agree with my hon. Friend, but he is right on two fronts. First, it is all fine and good to promise to do things and to talk big and to consult and consult, but at some point money has to be put on the table to deliver it. The previous Government failed to do that. Almost £20 billion of investment has now been brought forward by this Government to make these projects a reality. That is how we deliver a new golden age of nuclear in the United Kingdom, rather than just publishing lots of documents and thinking that is the end of it.
My hon. Friend’s second point is also right. Investment in the UK in the clean power transition is hugely important. We have had more than £50 billion of private investment since we came to power last year. That is because of the certainty and the policy confidence that investors have in the UK. That would be put at risk by the policies of the Conservatives, Reform and others who talk about the future energy mix, but miss out the detail and put that investment at risk. That puts at risk jobs and investment in supply chains across the country, too. We are delivering the energy policy of the future for energy security, for climate leadership and for good jobs.
Madam Deputy Speaker (Caroline Nokes)
I thank the Minister for his responses this afternoon.
Small Modular Reactor Programme: Site Allocation
Michael Shanks Excerpts(1 week ago)
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The Minister for Energy (Michael Shanks)
Today I am pleased to inform the House that the Government have selected Wylfa in north Wales as the site to host the Government-backed small modular reactor programme.
Thanks to record investment the Government are making in our nuclear power sector, Britain is entering a golden age of new nuclear. The Government’s SMR programme, led by Great British Energy-Nuclear, is putting the UK at the forefront of nuclear innovation, creating long-term economic benefits and good jobs in local communities, while opening up significant export opportunities. At the spending review the Chancellor committed over £2.5 billion to support the UK’s ambition to lead the global race for SMRs, and announced that following a rigorous selection process GBE-N had identified Rolls-Royce SMR as preferred bidder, subject to final Government approvals and contract signature.
Following careful consideration, Wylfa, on the north coast of Anglesey (Ynys Môn), is the Government’s chosen location for GBE-N’s SMR project.
Wylfa is one of the UK’s best nuclear sites, with a proud legacy and the capacity to host a fleet of SMRs. The initial project will see the construction of up to three Rolls-Royce SMR units, with GBE-N assessing the site to have the potential to host up to eight units, although this would be subject to future policy and funding decisions.
This decision will deliver once-in-a-generation opportunities for both Wales and communities across the country. For communities in Wales, building SMRs at Wylfa will create up to 3,000 new high skilled jobs at peak construction, attracting long-term investment and delivering an essential part of the UK’s energy future—while supporting thousands more jobs across Britain’s world-leading supply chain.
GBE-N looks forward to working with Welsh communities as this exciting project develops, with work set to start at the site in 2026. We will be progressing the SMR project across this Parliament and working towards a final investment decision.
But progress on SMRs alone is not the end of the Government’s ambition. We have taken decisive action by making the biggest investment in new nuclear for a generation at the spending review, with Sizewell C having subsequently reached a final investment decision. On top of this, we have agreed a major expansion of US-UK collaboration, as we progress a new framework so Britain can attract the best nuclear innovation from around the world. We are also spurring the modernisation of nuclear regulation through the ongoing Nuclear Regulatory Taskforce.
Large-scale nuclear power stations will continue to make a vital contribution in our home-grown clean energy mix, complementing SMRs. Therefore, to pursue the option of a further large-scale reactor project beyond the current deployments at Hinkley Point C and the recently confirmed Sizewell C, the Government are announcing that Great British Energy-Nuclear has been tasked with identifying suitable sites that could potentially host such a project. GBE-N will report back by autumn 2026 on potential sites to inform future decisions at SR27 and beyond.
In any study, GBE-N would also be asked to look at site opportunities in Scotland, expanding on its commission to assess Scotland’s capability for new nuclear power stations, including in areas that have benefited from nuclear in the past. This would seek to build on Scotland’s rich nuclear heritage with the Government believing new nuclear could bring significant benefits in communities there.
Finally, I am pleased to confirm to the House that the former nuclear power site at Oldbury in Gloucestershire, which is also owned by GBE-N, remains under active consideration for future projects. GBE-N will continue early work to evaluate the Oldbury site to ensure it is ready for future deployment as part of our broad nuclear programme, including the potential to support any privately-led projects that might be developed by the nuclear industry. Our intent would be to utilise the site as soon as is possible and GBE-N looks forward to ongoing positive engagement with communities around Oldbury.
This Government’s commitment to nuclear energy is unwavering—on SMRs, on advanced reactors and on Sizewell C we are making rapid progress towards delivering long-term energy security for the UK. We will continue to act decisively, invest ambitiously, and work with communities, industry and international partners to deliver this golden era of new nuclear—and with it jobs, investment and growth right across the country.
[HCWS1056]
Energy Infrastructure National Policy Statements
Michael Shanks Excerpts(1 week ago)
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The Minister for Energy (Michael Shanks)
Having considered the responses to the consultation, I am pleased today to be able to present three revised energy national policy statements for parliamentary approval. This represents an important milestone towards achieving the Government’s clean power and net zero ambitions. National policy statements are a crucial part of ensuring the planning system is fit for purpose. These revised NPSs provide greater clarity to developers and decision makers on Government policy concerning specific types of energy infrastructure projects and ensure that decisions are made in an accountable way by Ministers.
Investment in our nation’s infrastructure is key to enable the growth the UK needs. The revised energy NPSs will ensure the UK has diverse sources of electricity generation, and that we remain at the forefront of low- carbon technological development.
The revised NPSs I am laying before Parliament today under section 9(8) of the Planning Act 2008 set out national policy in key energy policy areas:
EN-1 covers the overarching needs case for different types of energy infrastructure.
EN-3 deals with renewable electricity generation.
EN-5 deals with electricity networks.
The supporting appraisal of sustainability and habitats regulations assessment provides detailed environmental assessments of the updated NPSs.
I am today also publishing the Government response to the consultation, to which there were over 180 responses, and providing the Government response to the Energy Security and Net Zero Committee, which reviewed the NPS updates.
I will deposit copies of all these documents in the Libraries of both Houses and they are available on gov.uk.
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Nuclear Energy Infrastructure
Michael Shanks Excerpts(1 week, 1 day ago)
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The Minister for Energy (Michael Shanks)
The UK’s nuclear sector will play a critical role in delivering the Government’s clean energy superpower mission and supporting economic growth. The Government will ensure that the right enablers are in place to support the sector to deploy new nuclear projects across England and Wales, including a suitable planning framework.
To improve the planning framework for nuclear infrastructure, today the final version of the new national policy statement on nuclear energy infrastructure—called EN-7—was laid before Parliament, according to section 9(8) of the Planning Act 2008.
EN-7 sets out the policy for considering development consent applications for new nuclear fission infrastructure. The NPS will be applicable to nuclear infrastructure proposed to produce over 50 MW of electricity in England and 350 MW of electricity in Wales. It introduces a criteria-based approach, removes the deployment deadline for new projects, and expands the range of technologies covered to include small and advanced modular reactors in addition to the existing gigawatt-scale reactors. The new planning framework is robust, transparent and agile, and it will empower developers to identify potentially suitable sites against a set of criteria, ensuring safety, sustainability and the mitigation of impacts on the host community.
Once EN-7 is approved, either by resolution by the House of Commons, or by deemed consent by the House of Commons following a “consideration period” of 21 sitting days, it will enter into force.
[HCWS1049]
Office for Nuclear Regulation: Executive Powers Annual Report
Michael Shanks Excerpts(3 weeks ago)
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The Minister for Energy (Michael Shanks)
The Department for Energy Security and Net Zero has today published the annual report setting out the use of the Secretary of State’s powers exercised in respect of the Office for Nuclear Regulation during the year 2024-25. This is in accordance with section 108(1) of the Energy Act 2013.
[HCWS1011]
North Sea Oil and Gas Industry
Michael Shanks Excerpts(3 weeks, 3 days ago)
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Urgent Questions are proposed each morning by backbench MPs, and up to two may be selected each day by the Speaker. Chosen Urgent Questions are announced 30 minutes before Parliament sits each day.
Each Urgent Question requires a Government Minister to give a response on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
Andrew Bowie (West Aberdeenshire and Kincardine) (Con)
(Urgent Question): To ask the Secretary of State for Energy Security and Net Zero if he will make a statement on the future of the North Sea oil and gas industry.
The Minister for Energy (Michael Shanks)
The North sea will be at the heart of Britain’s energy future. For decades its workers, business and communities have helped to power our country and our world, and they will do so for decades to come. The oil and gas industry has lost around a third of its entire workforce in the last decade as oil and gas production has declined. A plan is now needed. That is why in March we consulted on a framework for building a world-leading offshore clean energy industry in the North sea, alongside managing existing oil and gas fields for their lifespan. We will respond to that consultation in the coming weeks.
Alongside that, we published our clean energy jobs plan, which sets out that over 400,000 more good jobs are to be created across the UK, including 40,000 in Scotland, by the end of the decade. That is facilitated thanks to record investments in clean energy as well as over £50 billion of private investment since July 2024 thanks to the certainty our plans have created.
Turning to today’s news, colleagues will be aware that Petrofac Ltd has for some time been working on a restructure relating to its global portfolio. The restructuring plan failed, following the unexpected termination of a contract by TenneT—a Dutch transmission company. At 7 am today, holding company Petrofac Ltd announced that it will be entering administration. While that is obviously disappointing for the company, it is the product of long-standing issues with its global business.
Contrary to misleading reports today, the UK arm of Petrofac has not entered administration and is continuing to operate as normal—as an in-demand business with a highly skilled workforce and many successful contracts. Indeed, only last month Petrofac’s UK arm extended two significant contracts, demonstrating that the business has a viable future. Today’s announcement covers only the top-level holding company Petrofac Ltd, which has no employees. The Petrofac group has faced long-standing challenges, including a high-profile £77 million financial penalty imposed in 2021 following a Serious Fraud Office investigation into bribery.
We understand that there is reason to be optimistic about a commercial resolution that includes the UK arm. The Government have been, and will remain, in close contact with the company. I repeat this to the House: the UK business has not entered administration. It is successful and growing, and it will continue to operate as normal.
Andrew Bowie
Another week and yet another hammer blow to our North sea oil and gas industry, another gut punch to energy workers and another blow to our energy security. Whatever the Minister says today, the blame lies squarely with this Labour Government. [Interruption.] They do not like to hear it, but it is true.
Today, the energy giant Petrofac has entered administration, casting doubt over the future of its 2,000 employees in Scotland—as its global headquarters is in Aberdeen—and the countless more who are supported indirectly through the supply chain. As the Minister said, this company has had issues for many years, but the hostile environment in the UK continental shelf created by the Government has made operating here nigh on impossible for far too many companies.
Our offshore energy industry has seen thousands of redundancies since the 2024 general election. Harbour Energy completed a new round of redundancies just last month and, with depressing regularity, we hear of more job losses in the North sea. Whether at Harbour Energy, Apache, Hunting or Petrofac, each job lost means uncertainty for a family, a mortgage jeopardised, investment fleeing our communities and our world-class supply chains and skilled workforce pushed towards extinction.
How many more will it take for the Secretary of State to change course? These are political choices. This is a manufactured decline. As a direct result of the hostile trading environment, the “closed for business” sign is hanging over the UK continental shelf. From the energy profits levy extension increase to the ban on new licences and the refusal to defend the Government’s decision on Rosebank and Jackdaw, the odds are stacked against the North sea industry, damaging the business environment, threatening investment, harming our economy and undermining our energy security. These are political choices that have resulted in job losses.
What steps are being taken to support Petrofac’s HQ employees in Aberdeen? How many more jobs have to be lost across the industry for the Government to change course? When will the thousands of jobs promised through GB Energy for Aberdeen and around the United Kingdom materialise? Will the Minister personally act and ask his boss—the Secretary of State for Energy—to change course, or is he content to sacrifice Aberdeen, the north-east and our energy industry on this vainglorious campaign to destroy our fossil fuel industry?
Michael Shanks
On Petrofac, the hon. Gentleman should be careful with his tone. To come here and try to undermine efforts to find a buyer for the UK arm and to talk down a business, which, as I just outlined, is a successful and growing business in the North sea, is deeply irresponsible. There have been long-standing issues at the company; he of all people should be well aware of that, given his previous role as a Minister in the Department for Energy Security and Net Zero. All of us across the House have a responsibility to support the company at the moment, not to undermine it, and to send a positive message to those workers, the suppliers and the customers that the UK arm is continuing to operate as normal. All the signs are that there is a viable long-term future for the company, but that will not happen if we have comments like those made by the hon. Gentleman undermining that business.
On the wider question of the North sea, the hon. Gentleman should know as well as anyone that we lost over a third of the jobs in the North sea during the Conservative party’s time in government. He wants to pretend that the transition arrived in July 2024, but he was in government when those jobs were going, and the Conservatives failed time and again to come up with any credible plan for managing the future of the North sea. We will not do that. We will come up with a plan. That is why we are building the industries of the future on hydrogen, on carbon capture, on offshore wind and on the supply chains—the very investments that he and Conservative Members turn their backs against time and again. They are turning their backs on the future of the energy story in the North sea as they are more interested in exploiting problems than solving them. Time and again, they have learned no lessons from their time in government, when they left these workers without a credible plan. We will not do the same again.
Patricia Ferguson (Glasgow West) (Lab)
Will my hon. Friend outline to the House how the Government are delivering the clean energy jobs plan, which will see 40,000 new jobs in the clean energy industries in Scotland by 2030? I am sure that move will be welcomed around the Chamber. Will he advise us what support will be given to that plan by the Scottish Government?
Michael Shanks
My hon. Friend makes an important point about building up the industries of the future. I have said on a number of occasions that we should rightly be proud of six decades of oil and gas in the north-east of Scotland, and we should be proud of the work that that workforce has achieved, but we should also recognise that we have been in transition for a long time. Building up the jobs of the future in carbon capture, hydrogen, offshore wind and supply chains is how we ensure a long-term, viable, sustainable future in the north-east—alongside oil and gas for many decades to come.
The particular work that the Scottish Government need to do in this space is about improving the skills offer so that more of Scotland’s young people can take up the 40,000 jobs we will create over the coming years. That is a huge opportunity for Scotland’s young people, but only if we improve Scotland’s education system.
Michael Shanks
First, can I just say what a contrast it is when someone rightly responds to this concerning issue in a serious way and does not talk down the industry? This is where the House should stand taller and recognise that that company is doing good work and that there are 2,000 workers out in the North sea right now carrying out their duties. We want to ensure that there is a viable future for the company, and we are doing everything that we can in that space. All the signs are that it is a growing, successful business, and we should recognise that and talk it up, not talk it down, as the Conservative party seems hellbent on doing.
On the hon. Lady’s wider point, she is right to say that the future of clean energy involves tens of thousands of jobs across Scotland and hundreds of thousands across the UK, but that we need to ramp those jobs up as quickly as possible and ensure that people can achieve those jobs. We are doing what we can around looking at the skills framework, but we also ensuring that, through the investments we are making through Great British Energy, those jobs come forward much faster and that people are supported to move from jobs in oil and gas into jobs that have a real correlation in skills. We are picking this work up after the failure of the previous Government to have any plan. We are moving as fast as we can, and we will see more on that North sea plan in the coming weeks.
Torcuil Crichton (Na h-Eileanan an Iar) (Lab)
I have to say that this is a very underpowered urgent question. It is similar to a two-stroke engine attached to a rowing boat—[Interruption.]
Torcuil Crichton
I was, of course, referring to the shadow Minister, the hon. Member for West Aberdeenshire and Kincardine (Andrew Bowie), who knows full well that he has missed the story here. Petrofac went into administration because the Dutch Government cut a contract for offshore wind farm developments. I dare say that that raises concerns about the viability for finance and the supply chain for the offshore wind farm industry, but as the Minister has pointed out, and as the shadow Minister well knows, Petrofac is successful in the UK. It has 2,000 jobs in the UK and it has contracts in the UK, so we need less scaremongering from this underpowered Opposition and more assurance from the Minister that he will look after those jobs.
Michael Shanks
I will just reflect on something that my hon. Friend said. This is a global company, and it has not had its troubles to seek for some time. It was subject to an investigation back in 2017, and it has gone through a number of restructuring routes since then. Ultimately, that process came to an end when it lost a significant contract from TenneT, one of the Dutch transmission operators. This is a company that has faced global headwinds for some time, but I repeat to the House that the UK business has a viable long-term future. It is already growing, it is successful, and we have a responsibility across this House to talk up British businesses and the workers in those jobs, not to talk them down.
Stephen Flynn (Aberdeen South) (SNP)
May I convey in the strongest possible terms to the junior Minister the anger and anxiety that is felt by my constituents in Aberdeen? Right now they are providing energy security to each and every one of us on these isles, as well as revenue to his Treasury, yet their only reward, and the only certainty they seem to have on this Government’s watch, is that of looming job losses. May I ask—[Interruption.] He shakes his head. May I ask him to come to Aberdeen and explain to my constituents when he is going to listen to the trade unions, the academics, the workers and the industry and protect that industry, not only for our energy security but for Scotland’s economy?
Michael Shanks
I am in Aberdeen regularly and do meet constituents of the right hon. Member who work in renewables, carbon capture and hydrogen as well as in oil and gas. It is his constituents who will benefit from the investments that Great British Energy will make, for example, which he failed to vote for, and who tell me that after a long period of having no credible plan—[Interruption.] He can shout me down all he wants; he asked a question—
Mr Speaker
Order. I brought the right hon. Member for Aberdeen South (Stephen Flynn) in early because I thought that was right for his constituents and because he had applied for an UQ, but I do expect a little respect, even if he does not like the answer.
Michael Shanks
The right hon. Member asks a serious question, and I am trying to give him an answer, if he would but listen for a few moments. We take the issue of job losses seriously—of course we do—but we have to recognise that over 70,000 jobs have been lost over the past 10 years because there has not been a credible plan on the future of the North sea. We are going to deliver that alongside new jobs in the energy future.
I also say to the right hon. Member that I am somewhat confused what the SNP’s policy is on this because, as far as I understood it, it is exactly the same as this Government’s policy, which is to look at the licensing position. If he is telling us now that the SNP’s position has changed, that is news to me and, I suspect, to the House, but of course, the SNP has not published the draft energy strategy, which has been in draft form for two years, so it is hard for anyone to know.
Ms Polly Billington (East Thanet) (Lab)
What steps is the Minister taking to ensure that the UK arm of the company, which is an in-demand business with a highly skilled workforce and many successful contracts, has a long-term future in the UK, particularly in the context of our clean energy jobs plan announced last week and, as my hon. Friend the Member for Na h-Eileanan an Iar (Torcuil Crichton) pointed out, some of the risks around the development of offshore wind in Holland?
Michael Shanks
We have obviously been liaising with the company over quite a long period of time on the restructuring; indeed, the previous Government did as well. We have been looking at this issue and will continue to work very closely with the company to ensure that there is a viable long-term future for the UK part. But it is an in-demand business and, as I said just last month, it expanded some of its contracts, which shows that it is successful. Of course, it has a highly skilled workforce working in a huge range of jobs right across oil and gas.
The wider question about investment into renewables is also one that we should take seriously. We have a huge opportunity in the United Kingdom to capitalise on the economic opportunities that come from offshore and onshore wind, hydrogen and carbon capture, but that requires consistency and a view that the UK is a safe place to invest—things that were threatened by the Conservatives.
John Lamont (Berwickshire, Roxburgh and Selkirk) (Con)
Anyone who has met businesses in Aberdeen will know that they rely on the oil and gas sector. This Labour Government’s “net zero at all costs” policy is a disaster for high-quality skills and jobs in the north-east and across Scotland. What urgent action will the Government take to restore confidence and stability in the energy sector?
Michael Shanks
I reject the hon. Member’s assertion that this Government are somehow following a course without looking at the evidence. Clearly, oil and gas is a crucial part of our energy mix and will be for decades to come—we have been clear on that—but so too is building up what comes next. That means investing in the supply chains that were so often not part of the building of infrastructure that we have in our waters. We towed things in and switched them on, but had none of the jobs that went with them. We are determined to change that, but that comes with having a credible industrial strategy and a long-term plan for the future of the North sea, which we did not have under 14 years of the previous Government.
Brian Leishman (Alloa and Grangemouth) (Ind)
Incredibly, it is now eight months since the Prime Minister announced £200 million from the National Wealth Fund for the industrial future of Grangemouth. I have had meetings with numerous companies that have proposals and are, frankly, impatient to get started. When will this money be spent, and when will those jobs come to my town? All there is to show for it so far are the bones of an unjust transition and industrial devastation.
Michael Shanks
We have been looking at a number of proposals. I met the five companies that are the frontrunners for National Wealth Fund investment, along with the Scottish Government Energy Minister. A number of propositions are to be taken forward, and I hope we will have an announcement to make in due course. Of course, we have been trying not to just spend £200 million on the first thing that comes along but to find the genuinely long-term, viable industrial opportunities that deliver jobs at Grangemouth, not just for a year or two but long into the future. The hon. Gentleman is right that for far too long the site has been the victim of a lack of planning, and it is an example of a just transition done wrongly. We want to make that different by having a serious plan for long-term jobs on the site. The NWF has brought companies to the table, and we will deliver an announcement on that in due course.
Christine Jardine (Edinburgh West) (LD)
I accept the Minister’s comments about Petrofac, but it is a very worrying day not just for the 2,000 workers whose jobs are at stake but for the entire oil economy in north-east Scotland. Two things are missing that we desperately need in Scotland: one is investment in the jobs and skills that we will need for the renewable industries the Minister talks about, and the other is the reform of the taxation system and the windfall tax to ensure that it is consistent for the North sea area. What are the Government going to do about those things?
Michael Shanks
The hon. Lady is of course right that any announcements like this are worrying not only for those directly involved but for the wider community. I entirely recognise that point. She is right that it is critical to invest in the jobs of the future. We have worked with the Scottish Government—because we do work with them—to deliver joint funding for transition support so that workers can get the direct skills support they need to move from an oil and gas job into a renewables job. That is really important, but we also need to see much more upskilling of the next generation, who can take advantage of the jobs we will create in the clean energies of the future. On the question of taxation, I am afraid that is a matter for the Chancellor.
Graeme Downie (Dunfermline and Dollar) (Lab)
My constituency includes small and medium-sized enterprises and large businesses that work in renewables, oil and gas, solar, onshore wind and offshore wind. Does the Minister agree that some of the outbursts today from Opposition Members, both Conservative and SNP, will do nothing but undermine confidence for those companies? Furthermore, can he please reassure me that he is working extensively with colleges and employers in Scotland to ensure that we see a skills transition from oil and gas into renewables, so that people in my constituency can take full opportunity of the investments that the Government are making?
Michael Shanks
My hon. Friend is absolutely right that huge opportunities are coming. I have said that we should be proud of the history of oil and gas, and we should also be really proud of what the industry is doing to transition into the future. We need to do much more to ensure that jobs are delivered now, but certainty and confidence that the plan is not going to change overnight is critical for how we get private sector investment into the UK to deliver on those jobs. That is also why it is so important that we look at skills in the round.
I have to say that, despite the outbursts today, the SNP in Holyrood and the UK Government are working closely on ensuring that the skills opportunities are delivered. Would I like that to go further? Of course I would, and I hope we will have a change of Government and can make that happen. This only works if we have a serious approach to recognising the challenges, building the jobs of the future and ensuring that people can take advantage of the opportunities right across Scotland.
Harriet Cross (Gordon and Buchan) (Con)
We urgently need to restore confidence and stability in our oil and gas sector, or we will be here again and again as more and more businesses suffer and more and more jobs are lost, whether in my constituency, across north-east Scotland, in Scotland as a whole or in the UK as a whole—there are oil and gas and energy jobs everywhere in the UK. The future of Petrofac’s 2,000 skilled and expert staff, as well as the indirect jobs that rely on them, are now at risk and reliant on Petrofac being able to find a buyer for its North sea assets. Does the Minister think that the job of finding a buyer has been made more or less likely, given that the Government have created, in the industry’s words, “the most unstable fiscal” environment “in the world”?
Michael Shanks
I have enormous respect for the hon. Lady, but I have to say that this is not the day to be talking down this particular company. She can make the wider points about this Government’s policy—I totally recognise that—but this is a hugely important moment in which not to undermine a successful and growing company. We need to ensure that the suppliers, related companies and customers of Petrofac continue to support that business, because as of today it is operating as normal. It is incumbent on us all to ensure that that continues to be the case. We are working closely with the company to ensure that that outcome is delivered—the hon. Lady is right to mention the wider impact—but those 2,000 jobs and the supply chain jobs that rely on them have continued as normal today, and any suggestion to the contrary is just not correct.
Kirsteen Sullivan (Bathgate and Linlithgow) (Lab/Co-op)
Does my hon. Friend agree that it is important to speak responsibly, with care and accuracy, about the successful UK arm of Petrofac? To do otherwise will only serve to undermine the business and job security that we all want to see across the House. What steps is he taking to ensure that it has a long-term future in the UK?
Michael Shanks
I rightly expect to be challenged in the House on the Government’s policies. A strong back-and-forth exchange is important. In this one instance, however, and separate from any view that Members might have on the wider policies of this Government, it is important that we come together where we can and say that this is a strong, successful, growing company. It is in all our interests across the House to talk up the importance of that company’s continuing to be successful so that a buyer or another commercial resolution is found and those jobs can be maintained. That is surely in all our interests.
Kirsty Blackman (Aberdeen North) (SNP)
Every single one of us has been criticising Government policy, not criticising Petrofac, the expertise and workers at Petrofac, or any of the workers in our oil and gas industry. The Minister says that he has been spending time in Aberdeen. Does he have any idea how it feels to be in Aberdeen just now, with another hammer blow coming? And it is because of the Government’s policies; it is because there is this massive gap. Skilled workers in the oil and gas industry will just go abroad; they will go elsewhere. It does not matter whether we retrain them; the jobs are not there for them right now. What is he going to do to plug that gap? What will he do to keep these skilled workers in Scotland, in Aberdeen and in these islands, and not drive them away?
Michael Shanks
I take the hon. Lady’s first point with a pinch of salt, after her second point that this comes as a hammer blow to the community. There is no hammer blow; those jobs have been protected—today 2,000 workers are waking up and doing the same job they were doing last week.
I am often in Aberdeen but I do not pretend that I hear as much from people there as the hon. Lady does from her constituents. Although I have made an effort to be there as often as possible to hear the concerns, I recognise that we need to move further and faster than the previous Government did for 14 years, and the Scottish Government did for 18 years, to put a credible plan in place for the future of those jobs. That means not only investing in future jobs, but ensuring the processes are in place so that people can take advantage of those jobs much more easily. Passporting, which was stuck in the mud for years, is now being delivered because we helped to unlock it. There is a lot more to do, and we will say that in the coming weeks when we publish our future of the North sea plan, but we are the ones driving forward investment that creates the jobs of the future. I am afraid that other parties—I did not count the hon. Lady’s party as one of those until today—are harking back to the past rather than recognising that the jobs of the future need to go hand in hand with good, well-paid oil and gas jobs in the short term.
Dr Scott Arthur (Edinburgh South West) (Lab)
I thank the Minister for his statement and the confidence that he is showing in those workers. We have heard from the SNP. The difference between Labour and the SNP just now is that the SNP wants to scrap the energy profits levy but does not know what it will replace it with other than something that is fairer. Does the Minister think that is the kind of leadership we need in the oil and gas sector?
Michael Shanks
We recognise that the energy profits levy will come to an end and have consulted on what the future of that looks like with industry. It is a matter for the Chancellor to outline tax policy, as is standard practice in this House; it is not for me to comment on that. But there is a broader question about how we ensure that we drive forward investment. Talking down the investment in carbon capture, hydrogen, offshore wind and the supply chains is not the way to drive forward the jobs of the future, alongside the critical, important oil and gas jobs that will be with us for decades to come.
Sir Bernard Jenkin (Harwich and North Essex) (Con)
Why does the Minister refuse to issue new licences for the exploitation of new gas fields and new oil fields in the North sea? That is what the industry would like, and that is what the country would like, because we would like a stronger balance of payments, more tax revenues for the Exchequer, and a future for the North sea oil industry. What is the point of choking off our own North sea oil and gas industry when we have to import those fuels from other countries?
Michael Shanks
We will respond to the consultation on the future of licensing in due course. This Government were elected on the manifesto commitment to not issue new licences to explore new fields, but it remains our position that we will support existing licences and fields for their lifetime. We must manage the future of the basin, which has been in decline for 20-plus years—we hit peak oil in 1999 and peak oil in 2000, so we have been in transition for a long time—and that means investing in the industries that come next, alongside oil and gas.
Ms Stella Creasy (Walthamstow) (Lab/Co-op)
I am reassured that it is this Minister who is looking at the issue and fighting for those jobs in Aberdeen. I am acutely aware that the previous Government did not take full account of the impact of this situation. We now know that using Rosebank, which the shadow Minister raised, would create 50 times more climate-harming gases than the previous Government admitted, and that the climate crisis is one of the biggest drags on growth. I know that the Minister is committed, in common with all Labour Members, to protecting jobs and the planet, but what more can we do within our supply chains to support his work in getting growth and the just transition that this country desperately needs, without Rosebank?
Michael Shanks
The House will understand that I will not be drawn on applications that are currently awaiting decision, so I will not comment on that specific application. On my hon. Friend’s broader point, as has already been said, the net zero economy is growing three times faster than the economy at large, and it is our economic future. I recently attended the G20 in South Africa, where Ministers from across the world were talking about the opportunities offered by the clean power transition in their own countries. It is the economic opportunity of the 21st century, as well as how we deliver on climate leadership: contrary to what Opposition Members might now think, that still matters. It is only right that we deliver a genuinely just transition for the workers who have powered our country for the past 60 years. We have seen where transitions have not been done well. The previous Government failed to put in place any kind of plan, but we will deliver a plan that delivers a just transition and our economic future.
Seamus Logan (Aberdeenshire North and Moray East) (SNP)
I hear the Minister’s reassuring words, but surely he can understand the worry of the workers waking up this morning to the news that they heard. It is not just warm words that are causing the problem: it is policy, the energy profits levy and the ban on exploration. It is not just me saying that: those who are concerned include the Port of Aberdeen, Robert Gordon University, the North Sea Transition Authority, the Tony Blair Institute for Global Change and the Scottish Affairs Committee. What will the Minister do to address these policy problems?
Michael Shanks
I thank the hon. Gentleman for his tone and I accept the point that he makes. As I have said, we can be clear that there is a viable future for those 2,000 workers and we should be positive about that—it is important that we talk up the future potential of the company—but I recognise that that does nothing for those who might be worrying. We accept that the EPL will come to an end. We have consulted with industry on what the future of that looks like. We want to ensure that the Treasury gains value from price spikes, a point on which his party and mine agree, and that is a matter for the Chancellor to take forward. If he is in favour of a tax cut for oil and gas, it is important that he says where that significant amount of revenue will come from to fund the public services on which he and I rely.
Mary Glindon (Newcastle upon Tyne East and Wallsend) (Lab)
I welcome the Government’s mention of tiebacks in a consultation earlier this year. The development of tiebacks is important because it reduces costs and extends the life of existing critical infrastructure. However, many existing hubs are reaching the end of their life and we may miss the opportunities that are in front of us. Will the Minister look at tiebacks as a pragmatic step to help aid the transition?
Michael Shanks
My hon. Friend is always a great champion for the industry. Although we often talk, quite rightly, about Aberdeen and north-east Scotland, she is right to champion her own community, where there are a significant number of oil and gas workers. I always welcome her straightforward challenge to me on many points. I will not get into the detail of the response to the consultation, which we will publish in due course, but we have been clear that we want a credible, long-term plan for the future of the North sea. That is why we consulted on a range of factors, not just the future licensing position, and we will come to a pragmatic position on what the future of the North sea looks like.
Sir Julian Lewis (New Forest East) (Con)
For how many years, in the Government’s estimation, will we have to keep importing foreign oil and gas, as a result of not being allowed fully to exploit our own supplies?
Michael Shanks
Perhaps I should switch the question back: for how many years have we already been importing oil and gas? That gets us to the fundamental point. The Conservatives want to pretend that in July last year, we switched to being a net importer of oil and gas. That is not what happened. The right hon. Gentleman’s party oversaw that transition over many, many years. I recognise that, to some degree, given the geology of the basin, there would not have been different decisions taken if we had been in government, but what we could have done differently was ensure that the transition was happening, and delivered the economic opportunities that come along with what comes next, and that is what we will do.
Lizzi Collinge (Morecambe and Lunesdale) (Lab)
Does the Minister share my concerns about Reform and the Conservatives denying the reality of climate change, and denying that the best way to protect people’s jobs, including energy jobs, is to follow the green jobs plan? Does he agree that nuclear, including as Heysham 1 and 2 in my constituency—and, if I get my way, new nuclear at Heysham—is vital to the clean energy jobs plan?
Michael Shanks
I was going to say that that might be a note of consensus across the House, but I remembered that the SNP has an ideological objection to nuclear in Scotland, so it will not benefit from the economic opportunities that come from thousands of well-paid, skilled and trade-unionised jobs in nuclear. We believe that there is a long-term future for nuclear, which is why we announced funding for Sizewell C, concluded the small modular reactor programme, and have been working with the US Government to bring forward private funding partnerships to build the latest technology in the UK. That comes with thousands of jobs, will help us to deliver on energy security long into the future, and helps to tackle the climate crisis. This party believes that the climate crisis is an existential threat, and we should do everything that we can to tackle it.
Richard Tice (Boston and Skegness) (Reform)
Thousands more jobs are at risk, alongside the thousands of families and jobs at risk at the Lindsey oil refinery in Lincolnshire, all because of this Government’s policies on net stupid zero, yet the Minister talks warmly about the growth prospects for Petrofac. To grow, we need an industry; to have an industry, we need more oil and gas licences. Will the Minister change course and allow exploration and more licences to produce oil and gas in the North sea?
Michael Shanks
I am not sure that there was a hugely coherent argument there. The hon. Gentleman seems to say that the future might be in clean energy jobs, but he says, “They might not be delivered fast enough, so we should not bother doing it.” We think there is an important long-term future in delivering clean energy, including in his constituency, where many supply chain jobs will be delivered, and he is against that economic investment. He should explain to his constituents and to the wider country why Reform wants to make this country more energy-dependent, not less energy-dependent, and why it is against the economic opportunities that our proposals bring. Even if we disagree on the climate crisis—which I find staggering, given all the evidence; I accept that he might be burying his head in the sand—we should at least agree that there is a huge economic opportunity, and an opportunity to maintain our energy security.
Alice Macdonald (Norwich North) (Lab/Co-op)
I recently visited the Bacton gas terminal in the constituency of the hon. Member for North Norfolk (Steff Aquarone), which is on the North sea coast. It already provides up to one third of our nation’s gas supply, and is ideally placed to be a carbon capture and hydrogen hub. The Minister has just talked about jobs; I want those jobs in my area. Will he recognise the vital role that the east of England plays, back Bacton’s plans to ensure its low-carbon future, and help to secure good, local jobs?
Michael Shanks
My hon. Friend is right to highlight that this is a huge opportunity, which the previous Government talked about a lot but did not actually move forward on delivering. In the spending review, there were significant amounts of investment to move forward with the carbon capture clusters, and we have followed that up with specific investments over the past few months. I have been privileged to visit some of the sites and see the potential for maintaining existing jobs in industry while building the jobs of the future in carbon capture. We are hugely positive about the future vision for carbon capture across the country, as a way to tackle our emissions, help us get to net zero, and create good industrial jobs.
Martin Vickers (Brigg and Immingham) (Con)
I thank the Minister for the engagement we have had over the future of Lindsey oil refinery in my constituency. Can he give any indication of what support the Government might give, and when a final decision might be taken? Will he at least acknowledge that new licences in the North sea would offer job opportunities for those people whose jobs are at risk?
Michael Shanks
I thank the hon. Gentleman for the engagement we have had on this issue. Obviously, the failure of the company that was previously running the Prax Lindsey oil refinery has had a really significant impact. We have been working to make sure that the process that the official receiver is going through is concluded as soon as possible. It is for the receiver to decide who the potential buyers are; it is looking at a shortlist of credible candidates, but given the nature of the insolvency, it is not for the Government to decide what is built next on that site.
Turning to the hon. Gentleman’s second point, I genuinely do not think that the licensing question will decide the future of jobs for that site. We want to build up an industry for the future on that site, with long-term, sustainable jobs, and all the evidence we have seen about managing the future of the North sea basin suggests that that while oil and gas will be important for many years to come, that is not the long-term future for the North sea.
Matt Rodda (Reading Central) (Lab)
It is very important to increase the number of skilled jobs in renewables and in hydrogen. I welcome the Minister’s mention of the Government’s clean jobs plan; can he say more about that plan, and in particular about training and development for younger staff, as well as retraining for existing staff?
Michael Shanks
I thank my hon. Friend for his question, and particularly for mentioning retraining. We see huge opportunities for people who are in the middle of careers to transfer into the energy system. Just in the past few weeks, we have been looking at a scheme to support veterans who are leaving the armed forces in getting jobs building infrastructure. There are huge opportunities in that sector if we can capitalise on the clean energy transition.
We also need to invest in the future of the next generation of workers. In England, we are looking at technical training colleges to make that happen. Funding goes to the Scottish Government to do that in Scotland and, of course, to the Welsh Government as well. The future of our energy system is clean energy; we want to make sure that we have the jobs and training opportunities that go with it, so that the people of our country get an economic advantage, as well as the country getting the energy security.
Dr Ellie Chowns (North Herefordshire) (Green)
Today’s Petrofac news has nothing to do with UK oil and gas policy. This is a company with a long history of financial challenges and mismanagement; it was fined millions for bribery, lost £6 billion in value since 2012, and has now lost a contract with the Netherlands. Does the Minister agree that any attempt to claim otherwise is blatant political point scoring by the Tories and others with a head-in-the-sand climate denial agenda, and is a distraction from what really matters, which is ensuring that every worker whose job is affected by today’s news is properly supported?
Michael Shanks
I agree with the hon. Lady on the wider point, which is that—as I outlined in my opening answer—Petrofac has not had its troubles to seek. She has outlined a number of those troubles, but I reiterate that the UK arm of that business is successful and growing. We want to make sure that that continues—that there is a buyer, or another solution, so that it can continue long into the future. Others will seek to politicise this news for the sake of their own political narratives, but it is incumbent on all of us to send as positive a message as we can to the workers, suppliers and customers of Petrofac—the message that the UK arm continues to operate as normal, and that we want that to continue.
Graham Stuart (Beverley and Holderness) (Con)
Every month, 1,000-plus people lose their jobs in North sea oil and gas. Contrary to the case that the Minister presents, the industry says that this declining basin still has 4 billion additional barrels that could be extracted, if only there were new licences. He tells the House that that oil and gas will be needed for decades to come, yet he cuts off all new supply, mortally damaging the whole supply chain, of which Petrofac is part. The Minister cannot deny responsibility, and he needs to persuade the Chancellor—if not his Secretary of State, who is probably beyond persuasion—that we need to move to a practical policy that includes new licences. We need to optimise this, because green and fossil fuels do not need to be in tension; we want the transition, but we must keep those jobs for now.
Michael Shanks
First, I welcome the right hon. Gentleman’s recognition—which we seldom hear from his party’s Front Benchers these days—that this is a transition, and that we want the economic opportunities of oil and gas and those of renewables. It is a delight to hear him say that; his Front Benchers should say so more often and talk up the phenomenal renewables industry, which the Conservatives should take a bit of credit for. Over the past 14 years, they built up so much of that industry across the country, but they have turned away from that now.
Turning to the licensing point, I cannot remember at what stage the right hon. Gentleman was in the Government, but of course, the previous Government said that they would not issue new licences. Later, they briefly did; then they recognised that that was the wrong policy—I think it was the Liz Truss years in which they changed around. A tiny fraction of the licences that have been issued have ever resulted in extraction from the North sea. We will manage existing licences for their lifespan, and will take a pragmatic view on the future of the North sea, which we will announce in the coming weeks, but the long-term future of the North sea does not lie in oil and gas; it lies in renewables, carbon capture and hydrogen.
Mr Angus MacDonald (Inverness, Skye and West Ross-shire) (LD)
Does the Minister really consider this a just transition? We have thousands of contractors arriving in the highlands. They stay in workers’ camps, and very few legacy houses are agreed. The companies are not employing local people, and this is all in an area with the greatest fuel poverty in Britain.
Michael Shanks
We know that winter has come when the hon. Gentleman turns up in his lovely knitted jumpers; it is a pleasure to see them back again. He and I have had a number of conversations on this issue, and I recognise how seriously he takes it. There have been some good moves recently to look at the legacy left behind, particularly housing. This is about building housing that suits the workforce, but can be left behind for communities afterwards. We need a lot of work in partnership with the Scottish Government, who have responsibility for housing policy, to make sure that the opportunities are taken forward. The Minister for energy consumers, my hon. Friend the Member for Inverclyde and Renfrewshire West (Martin McCluskey), will say much more in due course about our plan for warm homes. That will result in significant spending in Scotland, but that will be in the hands of the Scottish Government, who have cut this budget time and again. I hope that they will change their ways, and will help the hon. Gentleman’s constituents to have warmer homes this winter.
Sir Desmond Swayne (New Forest West) (Con)
Has the Minister made any estimate of the likely impact on Petrofac and similar enterprises of the extension of the energy profits levy?
Michael Shanks
As I have said in a number of answers, the UK arm of Petrofac is a successful and growing business. Its holding company went into administration today due to a number of factors, including the loss of an international contract. It is nothing to do with our policy in the North sea.
Mark Pritchard (The Wrekin) (Con)
I say to our colleagues on the Green green Benches that of course climate change exists. We need green investment, green jobs and the green transition, but is there not a fundamental flaw at the heart of the Government’s policy, which is that it is ideologically driven? Have we not learned anything from Russia’s invasion of Ukraine about energy security, energy sovereignty and energy independence? I put it to the Minister, with the greatest respect, that in the medium to long term, if we continue down this track too quickly, without a stable transition for workers and the energy sector, the Government could end up undermining the UK’s national security.
Michael Shanks
I thank the right hon. Gentleman for how he has put the question. Energy security is at the heart of what we are trying to do, because our exposure to fossil fuels is what led to some of the most significant price spikes in all our constituents’ bills—spikes that they still face today. Our continued exposure to the impact of Russia’s invasion of Ukraine—even though none of that Russian gas now reaches us—is because of the international markets; they drive this forward. The only way to take back control of our energy is by building the clean power system of the future, and the pace of that transition is absolutely right. We are driving forward momentum, to make sure that the investment comes forward to create jobs in the economy right now. That has been successful; there has been £50 billion of private investment just in the past year. My view is that 10 or 20 years ago, both under the previous Labour Government and under the Conservative Government, we should have recognised that a transition was under way and put in place a credible plan for protecting the jobs. That was not done, but we are determined to do it, so that the transition for oil and gas workers is into good, well-paid jobs in renewables, carbon capture, hydrogen and other technologies, and we have a genuinely just and prosperous transition.
Llinos Medi (Ynys Môn) (PC)
Job losses in the North sea come from the lack of a strategic energy transition plan. The same applies to nuclear in Wales, where the lack of a plan for Wylfa has seen nuclear jobs in Ynys Môn fall to a record low. Does the Minister agree that future-proofing our energy industries against job losses and rising costs requires a clear strategy and timely decisions from this Government?
Michael Shanks
The hon. Lady rightly takes every opportunity to ask me about the range of energy issues in her constituency, and I thank her for that. We have concluded the small modular reactor programme that we inherited from the previous Government, with Rolls-Royce winning that competition. The future of nuclear will be taken forward with Hinkley Point C, Sizewell C and the future of the SMR programme, but also with private sector investment in the US-UK partnership, which will build it. The decision on where the SMRs will be is under consideration by my noble Friend, the Minister for nuclear, and we will have more to say about that in due course.
Dr Caroline Johnson (Sleaford and North Hykeham) (Con)
This Government like to tell people that growth is their first priority, but growth requires abundant and cheap energy. Does the Minister recognise that the only things they are growing by cutting the oil and gas industry are domestic prices, business prices and the number of job losses in the industry?
Michael Shanks
No, I do not. The clean power that we are trying to build will enable us to ensure that we remove gas as the price setter on our system. At present, gas sets the price 80% of the time, although it is often clean power that is powering the country. That is a problem that we have to end, so that all our constituents—but also businesses—benefit from cheaper power. The cheapest form of electricity that we can build at the moment is solar. I know that the hon. Lady objects to a number of those schemes in her own constituency, as she is perfectly entitled to do, but I would say to Conservative Members that if we want to build a power system that brings down bills, we have to support the infrastructure that goes with it.
Dr Neil Shastri-Hurst (Solihull West and Shirley) (Con)
Sadly, this is not an isolated case; regrettably, it is a pattern of decline that we are seeing under this Government. Can the Minister tell us how many companies must go under before the Government realise that Great Britain cannot build a resilient and secure energy system by shutting down the energy industry?
Michael Shanks
Let me just challenge the premise of that question once again. Petrofac’s UK arm has not gone under; it is working today as it did yesterday and the day before and the day before that, and as it will the day after. It is a successful, growing business, and we have a responsibility to talk up the industry to ensure that it has a viable, long-term future. In the next few days we will continue to work intensively with the company to make that happen, but we do have a responsibility not to undermine a successful business, which is what the UK arm of Petrofac is. The company that went into administration today is the topco of Petrofac, which has no employees.
Richard Foord (Honiton and Sidmouth) (LD)
The United Kingdom’s electricity price is set by gas 98% of the time. By contrast, the electricity price in the European Union is set by gas less than 40% of the time. If the electricity price in the UK were set by the price of clean energy more often, would the UK not be a more attractive destination for investment in energy generation? [Interruption.]
Michael Shanks
The hon. Gentleman is absolutely right, although I think I heard a “no” from the Opposition Front Bench in response to his question. The only way in which we can deliver long-term energy security is to get off the rollercoaster of fossil fuels. The future is in clean energy: we see that across Europe, where nuclear and renewables are driving down the cost of electricity, but also insulating countries from the price spikes that we have seen as a result of, for instance, Russia’s invasion of Ukraine. We are too exposed to gas at the moment, which is why our electricity prices are high, even though for much of the day our power is being generated by clean energy, which is considerably cheaper. Clean energy is the economic opportunity of the 21st century. It is how we deliver our energy security, how we tackle the climate crisis, and how we bring down bills for people now and in the long term.
Lewis Cocking (Broxbourne) (Con)
While Labour continues down the path of net zero, the UK now imports more than 40% of its total energy needs from overseas. Given that the UK is the second most expensive country in the world for household electricity, will the Minister issue new oil and gas licences so that we can get oil and gas out of the North sea to support jobs and help energy companies to cut fuel costs for people right across these isles?
Michael Shanks
I do not know whether the footnote to the hon. Gentleman’s question says this, but even if we were to issue new licences, what we extracted from the North sea would be traded on the international market and we would pay the price that is traded on the international market. I would like to understand the hon. Gentleman’s logic in respect of how that would help us to bring down bills; it is not the case. Let me be clear about this: the long-term future of our energy system is a mix of nuclear and renewables. Removing ourselves from the volatility of fossil fuels is the only way forward, but it is also an economic opportunity for his constituents and those of Members on both sides of the House. We will build this infrastructure here with a proper industrial strategy to create the jobs of the future.
Gregory Stafford (Farnham and Bordon) (Con)
Can the Minister explain to my constituents how banning new drilling for oil and gas while importing gas from other countries at a higher cost will bring their bills down by £300, and can he say when that will happen by?
Michael Shanks
Let me say to the hon. Gentleman’s constituents, and indeed to anyone’s constituents, that over the past few years they have been paying the price for what happens as a result of our exposure to fossil fuels. The last Government had to spend tens of billions of pounds on reducing people’s bills because of that exposure. The hon. Gentleman may have forgotten about that, but I can tell him that his constituents will not have, because they are still paying the price for it. This Government are determined not to make the same mistake again. The Opposition are willing to go back to the fossil fuel casino again and again and hope that it gives them a better hand, but we are going to build the clean power system of the future and bring down bills for good.
Jim Shannon (Strangford) (DUP)
I have a number of constituents who depend on the North sea oil and gas industry for their employment. The Minister will be aware that if a buyer is not found, the knock-on effect will not be limited to those families facing redundancy, but will affect our nation’s energy security. Does the Minister accept that the uncertainty of Government support has had an effect on the future sustainability of the industry, and that we should be realistic and acknowledge that the Government need to continue to invest in the industry until we approach that far-off time when, just perhaps, we do not need oil and gas?
Michael Shanks
I always welcome the hon. Gentleman’s contributions in our many debates on energy, both here and in Westminster Hall. He is right that the impact of job losses goes well beyond the individuals, although I reiterate that in this case there have been no job losses in the UK; Petrofac continues to be successful, and it is in all our interests to make sure that remains the case.
On the hon. Gentleman’s wider question, I know that the impact is felt on supply chain jobs in his constituency and across the country. That is why we need to build up the new energy infrastructure here as well. For too long, all those offshore wind platforms that were towed into British waters gave jobs to other countries, instead of creating jobs here in the UK. We are determined to do something different. We are driving forward investment in the supply chains to make sure that there is a viable future for his constituents and for those across the country.
Greenhouse Gas Removals: Independent Review
Michael Shanks Excerpts(4 weeks ago)
Written StatementsRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Minister for Energy (Michael Shanks)
The independent review into greenhouse gas removals has published a report of its findings and recommendations to Government.
In February, the Government commissioned the independent review of GGRs and appointed Dr Alan Whitehead CBE as the independent chair, to consider how options for GGRs, including large-scale power bioenergy with carbon capture and storage and direct air carbon capture and storage, can assist the UK in meeting our net zero targets, out to 2050. The review terms of reference were published on gov.uk at: https://www.gov.uk/government/publications/greenhouse-gas-removals-ggrs-independent-review/independent-review-of-greenhouse-gas-removals-terms-of-reference
The independent review has engaged extensively with industry and stakeholders through a call for evidence, industry roundtables and the net zero all-party parliamentary group.
The Government welcome this report’s findings and will consider the recommendations as we get on with our clean energy superpower mission, which will not only tackle the climate crisis, but will boost our energy security, protect households from energy price spikes, and create thousands of skilled jobs across the country.
Greenhouse gas removal technologies will play a key role in achieving our net zero target and it’s important we consider how best to deploy these.
I thank Dr Alan Whitehead for undertaking the review and everyone who contributed.
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