North Sea Oil and Gas Industry

Michael Shanks Excerpts

Monday 27th October 2025 Commons Chamber

[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.

[Mr Speaker]

I call the Liberal Democrat spokesperson.

--- Later in debate ---

[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

Thursday 23rd October 2025 Written Statements

[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.

[HCWS983]

Coal Tip Safety and New Extraction Licences

Michael Shanks Excerpts

Wednesday 22nd October 2025 Westminster Hall

[The Minister for Energy (Michael Shanks)]

I thank most hon. Members for the tone of the debate. I will return to the shadow Minister’s remarks later.

I thank the hon. Member for Caerfyrddin (Ann Davies) for securing the debate, and for recognising the context that it sits in. Several hon. Members have done the same. I wish to reflect first, as she did, on the fact that 59 years ago, 116 children and 28 adults lost their lives in Aberfan. I, too, am an MP for a constituency with a legacy of coalmining. In Lanarkshire in Scotland, we know that the hon. Member’s point about coal running through the legacy of people and communities is important. Even generations on from the coalmines in my constituency, I still see the impacts and the outcomes for people right across my community. I entirely understand the point, which is well made.

I thank hon. Members for grounding their remarks in that legacy and for recognising, as the hon. Member for South Cambridgeshire (Pippa Heylings) did, how far we have come as a country in phasing out coal, and the importance of the consensus that got us to that point, while paying tribute to those workers, as I pay tribute to the workers in the oil and gas industry who powered the country for 60 years. Recognising the incredibly important role that they played in powering our country is important, but it is equally important to recognise that we have made progress since those days. We should recognise with pride the role that they played, and recognise with pride how good it is that we have moved away from having to put people down coalmines to power our country. I thank hon. Members for that recognition.

The debate had two key themes that I will try to focus on: first, disused coal tips and the funding for them, on which I will reflect, and secondly, the future extraction of coal. The disused coal tips right across Wales are the enduring legacy that people see and experience. Coal tip disasters have left deep scars on many Welsh communities. As many hon. Members have said in this debate, the risks—particularly of climate change and worsening weather conditions leading to incidents in future—are significant. That is partly why we should redouble our efforts to tackle climate change, and there is broad consensus on that, although not from everywhere. It is also why we should do everything that we possibly can to maintain the safety of those coal tips.

We take the situation very seriously. That is why just a few months ago, the Chancellor and the First Minister of Wales visited a coal tip site on the banks of the River Afan near Port Talbot in the historic industrial heart of Wales to see the work that is being done to stabilise a former coal tip. The UK Government and the Welsh Government are working together in partnership to secure coal tip sites, including by providing the funding to which hon. Members have referred.

In the spending review, we announced £118 million of funding to protect Welsh communities, in addition to the £25 million from last year’s autumn Budget. Combined with funding from the Welsh Government, that figure of £143 million increases to £220 million. Some points were made about whether more funding is necessary. We will obviously keep those questions under review, but the suggestion does not always follow that a figure is the way to deliver the necessary work. Yes, we want to be ambitious about we can achieve with this programme. The funding that we have put in place—the £220 million—is what can actually deliver work on the ground at the moment. If there is future ambition in that programme, of course we will look at that. But giving a bigger figure that the Welsh Government, who are on the ground dealing with this, have not asked for, because they do not have capacity to move any quicker on some of these projects, is not an answer to the question. The £220 million has been given to deal with the issue at hand and to move forward with a programme in the fastest way possible, in partnership with others. We will, of course, continue to look at these questions in future.

[Llinos Medi (Ynys Môn) (PC)]

Given the challenges of having that specific figure in mind, if a future Welsh Government were to ask for the entire cost to be financed by the UK Government, given their historical and moral duty to do so, would the UK Government accept that request?

[Michael Shanks]

First, I should say that I am not the Chancellor. Such questions are rightly for the Chancellor at Budgets and spending reviews. However, I will say, as the Minister responsible for the Coal Authority, that we will look at this. The £600 million figure that was given was a provisional estimate, not a programmed budget. It was based on the very limited information that was available in 2020. A considerable amount of work, particularly on the mapping of these sites, has been done subsequently, and £180 million was given as the realistic amount of funding that could be used to protect communities now.

This needs to be based on evidence. Bandying around bigger figures does not necessarily improve the quality of the programme. The figure at the moment gives a signal of how seriously we take it, but also of the practical funding on the ground, to deliver what we think, based on more detailed information, the actual programme that is necessary. But of course we will always look at requests.

I want to reflect on some other things that have been established. The Disused Tips Authority for Wales will prevent unstable disused tips from threatening welfare. That is an important step forward, and will bring together some key people to deal with the matter. The Mining Remediation Authority, formerly known as the Coal Authority, is one of my Department’s partner bodies and is also playing an active role—in working partnership with the Welsh Government, in an advisory role—to ensure that a risk-based inspection and monitoring programme is in place, which has not been the case in the past.

[Ben Lake (Ceredigion Preseli) (PC)]

The Minister mentions the Mining Remediation Authority. I commend it for the work that it has commenced to address another hazard of our mining legacy: that of metal mines and lead pollution in particular. Does the Minister think that the work we are doing on coal might serve as a template for dealing with the historic legacy and problem of lead mines? Sadly, many of them are located in my constituency.

[Michael Shanks]

That is a very interesting point. I am sure that the Mining Remediation Authority, which I think I am meeting next week, will be delighted to hear the hon. Member’s praise, although perhaps it is also listening to this debate and wondering slightly how it is going to deliver another piece of work. The hon. Member’s point is useful, and I will take it back to colleagues. To date, the MRA has carried out 3,500 inspections, with the higher-rated category D and C tips continuing to be inspected on a six-monthly or annual basis.

Let me turn to the question of licensing. The Mining Remediation Authority currently serves as the licensor for most coal extraction in Great Britain. It is the owner of the UK’s unworked coal reserves. Our manifesto was very clear that we would not grant new coal licences, so we will amend the MRA’s licensing duties. The MRA takes the view that removing coal from tips that are made up of coalmining waste does not fall under the licensable activities defined in its legislation.

Extracting coal from tips does, however, require planning consent, which has to address all the environmental impacts individually. Most coal tips are owned by local authorities or private individuals, who under current legislation are responsible for maintaining their safety and stability. Local authorities have the primary responsibility for tip washing and reclamation schemes, through their planning and enforcement powers. We acknowledge the suggestion to make this type of coal extraction a licensable activity under the MRA, which would allow for a licensing prohibition, but our view is that the current planning policies around the regulations set by devolved Governments already provide robust frameworks.

We are a Government who believe in devolution. We created devolution in Scotland, Wales and Northern Ireland because we believe in devolving power to those authorities, so they are closer to people and to individual circumstances. It is right that we take their lead on these questions. Their firm view is that they can bring into effect the aim of the Welsh Government and the UK Government to make sure that extraction of coal is a thing of the past. Their view is that their existing powers do that.

[Ann Davies]

rose—

[Michael Shanks]

I will not question that process today, but I suspect that the hon. Lady will.

[Ann Davies]

Not at all; I would just like some clarification. The Government announced their intention in November 2024—nearly a year ago now—to introduce a Bill to ban new coalmining licences. Can the Minister tell us exactly when the Government will bring that legislation forward in Parliament?

[Michael Shanks]

I cannot give an exact date, I am afraid, partly because bringing forward legislation is not in the gift of any one Minister, but I can say that it is entirely still our aim to bring forward that ban. To pick up a point made by a couple of other hon. Members, it is also our aim to bring forward a ban on fracking across the country; we will do so as soon as we are able to introduce legislation. We had a Bill in the King’s Speech, and we still intend to bring forward that legislation as soon as possible, but that is dependent on parliamentary time.

I will conclude by addressing the wider context. The hon. Member for South Cambridgeshire made the point about phasing out coal; the shadow Minister reflected on the same point. To me, one of the great sadnesses of the past year is that we have moved away from a consensus that was so incredibly important for this country. We were a leader on tackling climate change under different Governments, and that was reflected across the world in some of the strongest possible ways, by driving other countries towards ambitious targets of their own.

In September last year, I was at the closure of Ratcliffe-on-Soar, the last coal-fired power station in Britain. I had the privilege of being in the control room with the workforce who had been there for decades, as they were switching off coal for the last time. It was a huge achievement, under Labour Governments, Conservative Governments and, briefly, the Liberal Democrat and Conservative Government. That consensus allowed us to move forward as a country, recognising that the future of our planet is important. It saddens me greatly that that consensus does not now exist. We now have a script that is, frankly, one of climate denialism. It also misses the point about the economic opportunity that our country faces.

A few weeks ago, for the first time ever, we powered this country without any fossil fuels at all. That is a huge milestone for us. It is an example of how we can be climate leaders, but also build legacies and communities right across Wales and the UK with good, sustainable jobs—the jobs of the future, not a harking back to a bygone era. It is about securing jobs; as the hon. Member for Brecon, Radnor and Cwm Tawe (David Chadwick) said, it is about renewal, not nostalgia. That is an incredibly important point about building the economic system of the future.

[Liz Saville Roberts]

Will the Minister give way?

[Michael Shanks]

I must come to an end, so that the hon. Member for Caerfyrddin has some time to wind up.

We will deliver on our manifesto commitment not to grant new coal licences. We will continue to build the energy system of the future. We will create good, well-paid jobs across the country. We will be forward-looking—not just delivering for people now and dealing with the legacy of what we built in past decades, but ensuring that we can pass our country and our world to future generations. We need to be safe for the future, with an economic and energy system that is built for the future as well.

All those things come together in our clean power mission and in what we are trying to do. Those who oppose that should recognise that they are against the economic opportunity of the century and against the climate action that is necessary now, not in the future. Together, we can rebuild this consensus. I look forward to working with hon. Members across the House on how we deal with this specific issue, but also on how we rebuild the wider consensus on the future of our planet.

Electricity Infrastructure: Rural Communities

Michael Shanks Excerpts

Tuesday 21st October 2025 Westminster Hall

[The Minister for Energy (Michael Shanks)]

I thank the hon. Member for Berwickshire, Roxburgh and Selkirk (John Lamont) for securing this debate. I have a huge amount of respect for him. He and I sparred at Scotland Office questions when we faced each other from different places in the Chamber. I genuinely take these issues seriously. In his list of quotes, I do not think he will find one in which I have dismissed community concerns. I have said repeatedly in Parliament that I take community concerns seriously, and I have met MPs from across the House to talk about these issues. I have probably had more meetings on these issues than previous Ministers have, so I do take them seriously, but they have to be balanced with ensuring that we are building infrastructure for the country’s future. That balance is difficult, and I will get into that throughout my speech, but I challenge the idea that I do not take these issues seriously, or that I do not respect his constituents’ views, because I do.

I will start with two points on which we agree, and then go on to answer some of the hon. Gentleman’s specific points. First, and most importantly, I will pick up on the point that he and the hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone) made about the role of nuclear, which we should not forget has a hugely important role in our future energy mix. We are extremely ambitious about the role of nuclear and have announced funding for projects across the UK, but unfortunately not in Scotland at this stage. I genuinely hope that position changes soon, because there is huge potential.

A few weeks ago, I visited Torness nuclear power station, which the hon. Member for Berwickshire, Roxburgh and Selkirk mentioned. I met the workforce, some of whom have been working there for decades. It is long-term, good, well-paid employment, and there is an opportunity on that site to look at the future of new modular reactors. I hope we will have that opportunity, but the SNP Government block us from even considering sites in Scotland at the moment. I hope that will change.

[Jamie Stone]

Is that not ridiculous, given that at Dounreay we have a skilled workforce, a fully licensed site and a local population that would warmly support new nuclear?

[Michael Shanks]

It is entirely ridiculous; the hon. Member is absolutely right. The thing about nuclear is that it often builds communities around it that respect the role it plays in the energy mix. Generations of people have worked at these power stations—they often start as apprentices and are still there decades later—so we do not disagree on that point. We should be building nuclear in Scotland, and I hope the SNP either loses in May so that we can change the position, or that the SNP changes its position. There are no SNP Members here today to answer that point.

The second point on which I agree with the hon. Member for Berwickshire, Roxburgh and Selkirk is the role of rooftop solar. We will be saying much more about that, but in the solar road map, we are clear that we should be building on every rooftop possible. It is a no-brainer, and there is support right across the country for it. Wherever we can put solar panels on rooftops—warehouses, car parks, supermarkets and so on—we should. That is why, in England, we have been funding schools and hospitals to do so. We would have liked to do it in Scotland as well, but once again the Scottish Government did not want to partner with us on that project, so it is for them to take that forward.

I will now reflect on what we are trying to achieve, because it is important not to forget the overall ambition for where our energy system needs to be. Every piece of infrastructure that we build across the country, whether it is wind turbines, solar panels or network infrastructure, is critical to protecting this country from future price spikes, like those that have hit households so much.

However, on infrastructure and the network in particular, there is a wider question about decades of under-investment in our grid, which has been holding back not just our energy system from working as we would want but economic growth. I gently challenge the hon. Gentleman’s points on AI and data centres. I understand the challenge they present, but they are also a huge economic opportunity. Right across the country, we are seeing good economic growth prospects being closed down because we do not have the grid connections that would allow them to be switched on. They are going to other countries as a result, so we need to fix this issue.

Delivering any infrastructure, whether it is energy, prisons or hospitals, involves tough choices, trade-offs and local impacts. That is precisely why we have a robust planning system. It is not a cop-out to say that I am not responsible for planning decisions in Scotland, and the hon. Gentleman knows that. It is for the Scottish Government to answer for the planning and consenting decisions they have made in Scotland, but every individual project is assessed independently and fairly through the Scottish planning system for proposals in Scotland.

If there are specific points about consultations not being done effectively, I am very happy to receive correspondence on that from the hon. Gentleman. It is for the Scottish Government, as part of their planning process, to follow that through, but I am happy to facilitate the exchange of that information.

[Wendy Morton]

Will the hon. Gentleman give way?

[Mike Martin (Tunbridge Wells) (LD)]

Will the hon. Gentleman give way?

[Michael Shanks]

I will just finish this point, as I have very brief time. It is right that the consultation is genuine and that people have a voice in what happens. I will give way very briefly, but I have only four minutes.

[Mike Martin]

In Wales, companies such as Bute Energy and Green GEN Cymru, which are both owned by Windward Energy Ltd, are prompting local concerns that the rules separating electricity generation and distribution are being undermined by corporate restructuring tricks. Is the Minister confident that Ofgem’s rules will deliver operational independence?

[Michael Shanks]

I am, and I am always happy to have more conversations with Ofgem about its regulatory role. If the hon. Gentleman has specific things he wants to raise, I am happy to follow up. I will not give way again, as we have very short time.

While it is absolutely right that communities should have a voice in this, should be able to scrutinise planning applications, should be able to object and should be able to understand how those objections affect the proposals, it is also right that we recognise as a country that we have to build infrastructure and that it has to be built somewhere. That is vital for our energy security and for the future of our country.

The grid has suffered from decades of under-investment. The legacy means we are constraining the amount of cheap, clean power we have in our system. Upgrading and expanding the electricity grid is not optional. The reason I challenge some of what the hon. Member for Berwickshire, Roxburgh and Selkirk said earlier is because a number of his proposals were not in the previous Government’s plan for the future of the energy grid. It was the previous Government who said that we need a great British grid upgrade, and they outlined many of the plans that are now being delivered across the country. Undergrounding was not a feature of those plans either.

It is critical that our current grid, which was largely built in the 1960s and was not designed to handle the type of power generation or electricity demand we have now, is upgraded. In 2023, the previous Government estimated that four times as much transmission infrastructure would need to be built by the end of the decade as had been built by 1990. This is not a Labour Government plan; it is the previous Conservative Government’s plan.

The hon. Gentleman mentioned the role of NESO, and I want to reflect on the point that he and other hon. Members rightly make that strategically planning the future of our energy system has been a significant failure. The truth is that decades ago, under the previous Labour and Conservative Governments, we should have more holistically planned the future of our energy system to make sure we get the most out of it, and to make sure that we are building the least possible amount of network infrastructure. That work was not done, so NESO is now leading the strategic spatial energy plan to make sure that, across the country, we have a holistic view of what our future energy system should look like.

[Ben Lake (Ceredigion Preseli) (PC)]

Will the hon. Gentleman give way?

[Michael Shanks]

I will not give way; sorry.

That will also include a centralised network plan so that we have a network that fits generation across the country, and so that we build as little as possible while still getting the most out of the energy system.

In the minute or two I have left, I want to say that we recognise the point about community benefits. Because of the network infrastructure, electricity is flowing through communities that do not necessarily understand the benefit they get from it. First, cheaper power in the system brings down everyone’s bills, so it is in all of our interest. Secondly, we have recognised the problem, which is why we have introduced community benefits for households directly affected by transmission infrastructure—the first time we have done that as a country. There is money off bills for people who have infrastructure in their locality, and there are also community benefits for substations and other infrastructure. That is currently commonplace for onshore wind and solar, but not for network infrastructure. We want to change that so there is a direct benefit from this infrastructure.

We need to be honest about the scale of the challenge we face as a country. We cannot meet future electricity demand without building grid infrastructure. I am sorry to say that means it has to be built somewhere. There is no magical third place where we can build infrastructure. We want to work with communities to make sure it is done with them, wherever possible, and so they benefit from it, but ultimately the whole country benefits when we have a functioning grid that delivers cheap, clean, secure electricity to people’s homes and businesses.

I have 20 seconds left, but I am very happy to meet the hon. Member for Berwickshire, Roxburgh and Selkirk, as I am genuinely happy to meet Members on both sides of the House. It is important that we do this with communities. I want to hear their concerns and questions. That does not mean it will always be possible to do exactly what every community wants, but I am happy to have those conversations. I thank the hon. Member for Berwickshire, Roxburgh and Selkirk for securing this debate.

Question put and agreed to.

Convention on Supplementary Compensation for Nuclear Damage: UK Accession

Michael Shanks Excerpts

Monday 13th October 2025 Written Statements

[The Minister for Energy (Michael Shanks)]

I am writing to inform the House of the UK’s accession to a further international nuclear third-party liability (NTPL) treaty, the convention on supplementary compensation for nuclear damage (CSC). On 3 October 2025, the UK deposited its instrument of accession with the Director General of the International Atomic Energy Agency. Under the provisions of the convention, the CSC will enter into force 90 days following the deposit of the instrument, on 1 January 2026.

The domestic implementing legislation for the CSC is set out in the Energy Act 2023, which amends the Nuclear Installations Act 1965. Minor technical changes were made by the Nuclear Installations (Compensation for Nuclear Damage) (Amendment) Regulations 2025. The CSC was laid before Parliament on 30 June 2025, under cover of Miscellaneous Series No. 4 (2025), and completed scrutiny on 10 September 2025.

Nuclear power is a reliable and low-carbon source of electricity. It is an essential part of this Government’s mission to protect family finances and replace the UK’s dependency on fossil fuel markets with home-grown power that we control. NTPL treaties bring benefits to the nuclear sector and potential victims as they establish minimum compensation thresholds which operators have financial security to cover, assign liability exclusively to the operator of the nuclear installation, and channel claims to the jurisdiction where the incident occurs.

The UK will remain party to the Paris convention on third-party liability in the field of nuclear energy and the Brussels convention supplementary to the Paris convention on third-party liability in the field of nuclear energy—or the Brussels supplementary convention. Accession to the CSC will enhance the UK’s NTPL regime by establishing NTPL treaty relations with the 11 contracting parties to the CSC, thus further removing potential barriers to investment and supporting UK exports.

The CSC establishes a shared international fund of supplementary compensation for victims of a nuclear incident, which is made up of contributions from contracting parties to the convention based on their installed nuclear capacity and UN rate of assessment. At present, assuming UK membership of the convention, the shared international fund would be valued at approximately £120 million, with the UK’s contribution at approximately £6.6 million. This would create a contingent liability on HM Government that could crystallise in the event of a nuclear incident in a contracting party to the convention. In the unlikely event of an incident in another contracting party, said contracting party could call on the UK to make its contribution of £6.6 million to the shared international fund once that party’s national minimum compensation amount has been exhausted.

Additionally, should an incident occur in the UK, HM Government may be required to compensate victims up to the value of the shared international fund of approximately £120 million. However, in the event of a civil incident, the UK would be able to call on the shared international fund for the contributions from the other contracting parties to the convention, thus significantly offsetting the value of the contingent liability to the value of the UK’s contribution to the shared international fund—i.e. approximately £6.6 million. To date, there have been no calls on this fund. Further details are available in the departmental minute also submitted to the house.

This contingent liability will be incurred on the day the treaty enters into force in the UK, which will be 1 January 2026.

[HCWS946]

Significant Energy Infrastructure Projects: Suffolk Coast

Michael Shanks Excerpts

Tuesday 16th September 2025 Westminster Hall

[The Minister of State, Department for Energy Security and Net Zero (Michael Shanks)]

Thank you, Sir John, for recognising that my role is exactly the same and yet somehow changed in title. I am grateful still to be the Energy Minister, because, as I often say in this place, the debates that we have are always hugely interesting and bring in so many different aspects of how we plan our future energy system. Indeed, you and I, Sir John, have had many conversations about this particular issue.

I thank my hon. Friend the Member for Suffolk Coastal (Jenny Riddell-Carpenter) for securing this debate and for her contribution. She and I have had a number of conversations about this issue. Let me say at the outset that I actually agree with her on the need for better co-ordination—I have said that many times here and to her personally. I think it is a source of deep regret for all of us—I think the previous Government will look back on this as well—that we did not more properly co-ordinate what has been a huge build-out of new, important infrastructure.

As my hon. Friend said, the previous Government vacated the space of leadership in planning the future of our energy system. That was not because it was an impossible task; I can only assume it was because they thought it was too difficult to do. We have grasped that task in the 14 months that we have been in office. I will talk a bit more about that later.

I want to start with a bit of context, which is important. My hon. Friend also mentioned this point. We are committed as a Government to building things in this country again. For far too long, under both Labour and Conservative Governments, we have held back a lot of critical infrastructure. The plan for delivering economic growth across the country does require us to build infrastructure. Energy infrastructure is going to be absolutely key, not least because even if we were not on the journey to clean power, which is critical, we would still be having to upgrade much of the energy infrastructure, particularly the transmission network, which has been so under-invested in over the past 50 or 60 years.

Our mission as a Government is to move towards clean power, making sure that we deliver our energy security; and every wind turbine, solar panel and nuclear power station that we build protects us from future energy shocks and delivers our energy security here at home. So, it is a critical mission.

New energy infrastructure—indeed, new infrastructure of any kind—is always controversial in some circumstances; there are always impacts and there are always differing views about whether it should be built or not. That is why we have a planning system that seeks to balance the pros and cons of applications against a framework that sets out, as a country, that we have to build things somewhere. So, the planning system is there to make sure that the planning process is rigorous and open, but ultimately so that we make decisions and build things.

For obvious reasons, I will not comment on individual planning applications; they will be decided in due course in the usual way. However, I will make a fundamental point about why we are on this journey and why we think that building this infrastructure is so important. The reason is that the only way to reduce our exposure to the volatility of fossil fuels is to build a new clean power system. That means new nuclear, renewables and storage working together to bring down bills and tackle the climate crisis.

I know that my hon. Friend the Member for Suffolk Coastal is aware of the NSIP regime, but for the purposes of the hordes of people that I am sure are watching this debate at home, let me say a little about it. The “nationally significant” in NSIP—nationally significant infrastructure project—is really important for us to recognise. The reason we have an NSIP process is that some decisions have to be made that local communities might not be able to make in isolation because they are of critical national importance, whether that is in transport, water or energy projects. It is important that we have this process and it is a robust process, involving the Planning Inspectorate, and various statutory bodies such as national environment bodies. Projects are judged on a case-by-case basis, weighed against the local impacts, be they environmental, economic or social. The need for this process is set out for all to see in local and national planning policy, and of course national policy statements are scrutinised by this place before being agreed.

When an applicant submits an application for a development consent order or DCO, the Planning Inspectorate, particularly for energy NSIPs, will appoint an independent inspector to examine the application. A recommendation will be made to the Secretary of State about whether permission should be given and the Secretary of State makes the final decision; that decision might be made by a junior Minister on their behalf, but the law states that the decision is still in the name of the Secretary of State. Such applications are considered against the relevant national policy statements as approved by Parliament, which make the case for infrastructure and all the various considerations that have to be made.

Cumulative impact is an issue that my hon. Friend raised with me today, and that a number of hon. Friends have raised with me previously. I know that it is a particular concern. Projects must consider their cumulative impact as part of their applications. Also, the local authority that hosts the infrastructure and surrounding local authorities—given that often these projects are on the borders with other local authorities—are invited to submit impact reports as part of the process, to ensure that the potential impacts of an individual project are taken into account, based on local knowledge.

Of course, there are also opportunities for local communities to have a say. Members of the public can get involved not just in the planning application itself, but in the pre-consultation process and in the discussions before applications emerge. They can also register through the Planning Inspectorate during the pre-examination phase.

On planning reform, we are mindful as a Government that the planning process can take much longer than we think it should. Let me say at the outset that that is not about trying to get to the decision that one particular group might want; it is about getting to any kind of decision much faster, so that instead of projects and communities being held up for year after year, with people not knowing whether something will proceed or not, decisions are made.

The average time to secure development consent for NSIPs has increased from 2.6 years in 2012 to 3.6 years in 2024. Such delays cost a vast amount of money—£1.5 million a month for some large projects—and that of course impacts taxpayers and bill payers, who foot the bill for these projects.

There is always a balance to be struck, as we have said throughout the passage of the Planning and Infrastructure Bill. Of course we want communities to have a say and we want the process to be as robust as possible, but we need to get decisions and end the uncertainty as quickly as possible, and the Bill will be key to improving the process. Our reforms are about trying to make sure that the system is flexible, proportionate and responsive to Government priorities. The Government must deliver the change on which we were elected; in the energy space, that means building the clean power system of the future. The planning system should reflect the priorities of the democratically elected Government of the day.

Public engagement is key to this process. We want communities to participate in the planning system, but as I will come back to in a moment when I talk about strategic planning, we also want communities to have a say much earlier in the process. It is not just about individual applications, but about the whole question of infrastructure in communities more generally. We are consulting on further proposals to streamline the NSIP process, including for new guidance on engagement following proposals in the Bill to remove statutory pre-application consultation requirements, and we encourage feedback from communities. We are also keen to hear views on the practical next steps and on how the system will actually work. I understand that the consultation is now open and will close at the end of October.

On the siting of energy projects, I agree with my hon. Friend that we should be much more strategic as a country in considering what the future of our energy system should look like, and in planning holistically what infrastructure should be built and where. She made a powerful point about the sheer amount in her part of the country. Had we been strategically planning a decade or so ago, we might have avoided some of those planning decisions, so it is important that we take this step. I regret the fact that we have not done so for the past few decades, but we are moving forward with a strategic view as quickly as possible.

The problem with being the Minister for Energy Security is that we are not short of acronyms—let me just go through some of them. The strategic spatial energy plan, or SSEP, and the centralised strategic network plan, or CSNP, are two crucial parts of how we will provide a holistic design much more carefully. The strategic spatial energy plan is about looking at the whole of Great Britain and how we map out the future of our energy system, and it will be published by the end of 2026—there is work going on at the moment. The centralised strategic network plan will follow, so that we can work out what infrastructure we need on the grid in order to meet the strategic spatial energy plan, and it will be published by the end of 2027.

This is about taking a much more active planning role in the future of energy right across England, Scotland and Wales, both inland and at sea. My hon. Friend rightly brings both of those things from her constituency into this discussion. It will be about assessing the optimal locations for things and the type of energy infrastructure that we need in the future. We must look beyond a developer’s five or 10-year plan and ensure that we meet future energy demand, knowing that it will significantly increase in the years ahead.

The centralised strategic network plan will build on the SSEP by ensuring that our transmission infrastructure meets the need and, crucially, is co-ordinated. My hon. Friend made that point very powerfully, and I was in Denmark last week to talk about this very question with EU Energy Ministers. The North sea is already congested with a lot of infrastructure, and the only way we will effectively plan the future of the North sea— for a whole range of uses, from fishing and energy to carbon capture and storage—is by working together. We will be part of much more co-ordination on the infrastructure in the North sea.

It all feeds into my hon. Friend’s point: we will only get this right by having a holistic view and enabling the efficient and co-ordinated use of infrastructure. That is better for communities affected by this issue directly, but we can also bring down the cost of building infrastructure if we plan it more coherently. That will benefit every person right across the country.

[James Naish]

The Minister describes something that I am extremely passionate about, as he knows, but it is a very top-down approach. I wonder whether we simultaneously need a bottom-up approach that engages with communities via local authorities in order to look at what land is available and how it could be used. Is that not something that we could do side by side with the vital strategic approach that he describes?

[Michael Shanks]

My hon. Friend foresees what I was going to say. I was just about to come on to his earlier intervention, which was really important. He is right about the need for infrastructure plans to be generated by communities and bottom-up. We need to take a national view of the future of the energy system as well, but I think both can work together.

The third great part of this planning is the regional energy plans. We also see a place, on a very localised level, for the local energy plans that many local authorities and combined mayoral authorities are working on, but the regional plans break up the whole of Great Britain into smaller areas so that we can look in detail at what energy can be sited in different areas, and crucially, at how the two kinds of plan can work together—the Government’s land use framework for the future use of land in the country alongside the capability and interest from communities to host infrastructure as well. I hope that we are doing that, but my hon. Friend should continue to bring that challenge to the Government, because it is something that we are committed to doing. I am confident that he will do so, which is great.

Let me finish on a point around the impact on communities. We do not want to get to a place where the future energy system is something that is done to communities, and we recognise that the failure of strategic planning across the country has meant that that is all too often what it has felt like for communities. We have a role to play in ensuring that, where communities do host important energy infrastructure, they benefit from it. Hosting such infrastructure benefits the whole country—without a resilient energy system, we all lose out, and we will not deliver the economic growth that we need—but the communities that host this infrastructure should feel a benefit from doing so.

That is why, in March, we announced two community benefit initiatives, guidance on community funds for communities that host this key infrastructure, and a bill discount scheme for households that are sited in proximity to new transmission infrastructure. The guidance sets out our expectations for how communities hosting that infrastructure should benefit. We will have more to say as the bill discount scheme is developed through secondary legislation, but that is an important statement: people should directly benefit, through money off their bills, if they are doing the country a favour by hosting that infrastructure. In May we also published a working paper on wider questions around community benefits, to make sure that other types of energy infrastructure also benefit communities.

In conclusion, I again thank my hon. Friend the Member for Suffolk Coastal for securing the debate. I know that we will continue to have these conversations. In this job I sometimes wish, for a number of reasons, that we could turn back the clock and do things slightly differently. I have been told repeatedly that, unfortunately, that is not an option, although I continue to push for it. Strategic planning is one of those regrets. As a country, whatever the political view, we will look back and wish that we had planned our energy system more holistically across the country. We are doing that. That does not change some of the decisions that have been made and some of the decisions that are in the system now, but it will allow us to build a more holistic system in the future.

[Jenny Riddell-Carpenter]

Will the Minister meet me to talk about what more co-ordination can happen now through the projects that are live, in the way that I set out in my speech?

[Michael Shanks]

I am always happy to meet any hon. Member from either side of the House, and I do regularly, but I will certainly meet my hon. Friend to discuss that. For obvious reasons, it is difficult to comment on specific applications in the system, but I am happy to meet her.

Let me finish with a general point that brings us back to our national mission. As a country, we must move quickly to replace a 19th-century fossil fuel-based energy system with a system that is fit for the 21st century. Even if we were not on that mission, the huge increase in demand for electricity necessitates the building of more energy infrastructure across the country. We must make the change that we are making to bring down bills and benefit consumers, to benefit our national energy security in an increasingly uncertain world, and to tackle climate change. Anyone who says that we can get by with not building any infrastructure is quite wrong.

Since time began, there has been opposition to any pieces of infrastructure built in any part of the country, but we must as a country recognise that, for us to deliver on the outcomes we want as a Government and improve people’s lives, we have to build infrastructure across the country. We want to do that in partnership with communities, to ensure that we do so in as well planned and strategic a way as possible, and to ensure that communities that host such infrastructure genuinely benefit from it. There is much more work to do, and I look forward to engaging with hon. Members on these difficult questions so that we can find the right solution for the country and local communities. I thank my hon. Friend once again for securing the debate.

Question put and agreed to.

Great British Energy: Strategic Priorities

Michael Shanks Excerpts

Tuesday 16th September 2025 Written Statements

[The Minister of State, Department for Energy Security and Net Zero (Michael Shanks)]

Great British Energy (GBE) is central to this Government’s mission to make the UK a clean energy superpower and will play a pivotal role in accelerating the deployment of clean, secure, home-grown energy as the UK’s publicly owned clean energy company. GBE is putting energy back into the hands of the British public, enabling the benefits of the clean energy transition to flow back into communities, households and businesses, to protect billpayers for good.

At the spending review, the Government confirmed over £8.3 billion in capitalisation for GBE and Great British Energy Nuclear. The statement of strategic priorities—"the statement”— now sets out the Secretary of State’s vision for how Great British Energy should contribute to the mission. It does so by identifying two core objectives for GBE:

Drive clean energy deployment across the whole of the UK, as a strategic developer, investor, and owner of clean energy projects.

Ensure that UK taxpayers, billpayers, communities, and the current energy workforce benefit from the clean energy transition by increasing public ownership and community involvement in the development of clean energy projects, and by supporting jobs and economic growth across the UK.

The statement provides strategic direction by specifying that GBE should focus on three core groups of activities to deliver on GBE’s objectives:

The statement outlines the key principles for intervention. Underpinning these principles for intervention is a requirement for GBE to ensure that its portfolio of activities and investments is additional. The statement also outlines GBE’s long-term goal to become financially self-sustaining, and the importance of setting a clear path towards profitability with a plan for self-financing to be in place by 2030.

Partnerships with the private sector and other public sector organisations will be critical to GBE’s ability to deliver on its core objectives. The statement therefore provides detail on how GBE should work collaboratively with private and public sector organisations. This includes local and devolved governments, the National Wealth Fund, The Crown Estate and Great British Energy-Nuclear.

The statement also sets out the Secretary of State’s expectation that GBE put in place a robust corporate governance framework which adheres to corporate transparency principles.

GBE is foundational to this Government’s mission to bring energy security, protect billpayers, create good jobs and help protect future generations, and will be a key player in establishing the energy system of the future. In doing so, Great British Energy will demonstrate how modern public ownership can deliver a dynamic state which works with industry, workers, unions and local and devolved Governments to accelerate the clean energy transition and deliver benefits for citizens across the UK.

[HCWS925]

Hydrogen Supply Chains

Michael Shanks Excerpts

Tuesday 9th September 2025 Westminster Hall

[The Minister of State, Department for Energy Security and Net Zero (Michael Shanks)]

It is a pleasure to serve under your chairship, Mr Betts—and to still be here as the Energy Minister. It is the only Government job that I wanted to do, which is perhaps just as well given how the reshuffle has landed, so it is genuinely a pleasure.

As I have often said, these debates are a great example not only of how we come together to talk about quite complex topics relating to the energy system, but of how this part of Parliament works. I always come out of these debates having learned something, as the shadow Minister said. Sometimes it is quite a niche fact that I am not quite sure what I will do with. I always learn a huge amount from my hon. Friend the Member for Worcester (Tom Collins), given his detailed knowledge of the industry and its practical application, which is often lost in our debates. I thank him and my hon. Friend the Member for Rushcliffe (James Naish), who also worked in the energy sector, and whose constituency was home to Britain’s last coal power station, the closure of which I attended last year. His understanding of the importance of the transition and the potential of future clean energy technologies is hugely welcome.

It has been an interesting debate not least because, as the shadow Minister said, we have had a degree of consensus. We once had consensus on quite a lot of things in respect of the future of our energy system, but that has somehow changed in the last few months. I will leave it to others to judge why that is, but it is really important that, given the huge opportunities for the future of the country and for thousands of jobs, there is a degree of consensus. As the hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone) said, we get things done when there is a degree of consensus, and that is hugely welcome. The hon. Gentleman referred to Joule’s law on the loss of power, which I think, if my standard grade physics holds up, is P = I²R,. I am sure people will correct me when that is typed up in Hansard.

Let me say a bit about our commitment to hydrogen before I respond to some specific points. We have been clear that hydrogen will play a fundamental role in the future of our energy system. Not only is it a crucial part of how we decarbonise heavy industry and transport, which are among our most energy-intensive and hardest-to-decarbonise sectors, but it is, as many Members have pointed out, part of our work to provide large-scale storage for our baseload of year-round clean power. As the Government have set out in everything we do, our mission to achieve clean power by 2030 and to maintain that relates to tackling the climate crisis, delivering energy security and reducing our dependence on unstable, volatile fossil fuel markets. How we take back control of our energy supply and storage will clearly be a critical part of that. It can also help us to reduce system costs as both electricity demand and renewable generation increase.

There are other great other examples of the use of hydrogen. The hon. and learned Member for North Antrim (Jim Allister) made the really interesting point that the world’s first hydrogen double-decker bus was made in North Antrim, which I had not realised. As the shadow Minister pointed out, there are challenges around how we maintain such innovation and make sure that it continues to work in the future. Last week I was in Denmark to meet European Energy Ministers. It was really interesting to see examples there, as well as at the port of Amsterdam in the Netherlands, of where infrastructure is being rolled out, while facing some of the same challenges about how we achieve the scale that makes it competitive. That is part of the work we will have to do.

We are acting now to seize the economic and industrial benefits of the hydrogen sector, which is why we have been not only pushing forward on our policy framework but trying to make clear our ambition. There is much more to be said about that, but there has been industrial and investor interest in our hydrogen allocation round programme. The first HAR1 projects are now putting spades in the ground, with the first wave expected to access more than £2 billion over the next 15 years in revenue support from the hydrogen production business model, and over £90 million in capital from the net zero hydrogen fund. Over £400 million of private capital has been committed up front for 2024 to 2026, with more than 700 direct jobs created in construction and operation. Those are among the first commercial-scale hydrogen projects in the world to take a final investment decision, and we expect them to become operational between this year and April 2028. That will kick-start our green hydrogen production at scale.

Following the success of HAR1, we expect to announce successful projects in the second hydrogen allocation round in early 2026. The current shortlist includes innovative projects that could support ammonia production in Shetland, produce new clean energy at Grangemouth and decarbonise lime kilns—one of the first steps in cement production—in the Humber area. Moving forward, in June this year we published our industrial strategy, which set out plans for the further hydrogen allocation rounds, HAR3 and HAR4, for our first regional hydrogen network, and for the launch of the hydrogen-to-power business model in 2026.

My hon. Friend the Member for Worcester talked about the crucial role that storage will play in the renewable energy we are building. The question of how we store that for when we need it is crucial. We laid out our plans in the industrial strategy, backed up by the spending review, with £500 million for hydrogen infrastructure, partly to look at how we unlock hydrogen’s potential for clean power and provide home-grown energy and good jobs. We also have an ambition to deploy the first regional hydrogen transport and storage network, to become operational from 2031, which will aim to connect producers with vital end users such as power for the first time. This will unlock hydrogen’s role in clean power and help to realise the potential of large-scale hydrogen storage in maximising renewable energy use to support the transition to a decarbonised energy system. We are also currently designing a hydrogen storage business model, alongside a hydrogen transport business model, with the intention of providing investors with the long-term revenue certainty that many Members have raised in the debate.

There is no doubt that the clean energy transition is the economic opportunity of the 21st century. This is about not just our energy security but, as many hon. Friends have pointed out, how we deliver the good, well-paid, trade-unionised jobs of the future. It is about how we reindustrialise communities that have for too long been left behind. The UK is well placed to be a global leader not only in hydrogen deployment but, crucially, in making sure that we capitalise on the supply chains, which is where we get the jobs, given the shared skills, experiences and qualifications in the existing oil and gas sector, our strengths in advanced manufacturing and innovation, and the policy environment we have set out.

We have taken significant steps to attract inward investment, and the public finance tools set out in the clean energy industries sector plan will play a crucial role. We have also looked at the question of skills, which a number of Members raised earlier. The Lib Dem spokesperson, the hon. Member for Thornbury and Yate (Claire Young), made the point very well. The hydrogen skills framework, which we published just a few months ago in April, is an open-source framework to try to enable the development of new qualifications and training programmes, in conjunction with industry, to make sure that we are bringing forward the apprenticeships and the skilled workers of the future.

We are also making sure that companies can access international markets and collaborate with global partners. We want to build a domestic success story by exporting hydrogen equipment and services across the world and reinforcing their role in global hydrogen supply chains, with the UK set to benefit from being right at the forefront of that work.

As the sector grows, we want to make sure that it benefits from the comprehensive public finance offers that we have set out. I will cover that briefly, because we have debated many of these things in the past. Part of that includes Great British Energy, with its £1 billion clean energy supply chain fund, which will be aligned with the clean energy industries sector plan to support companies that have the potential to grow in supply chains.

We have empowered the National Wealth Fund with a total of £27.8 billion in capital to enable it to take on higher-risk investments, including equity. It will invest in capital-intensive projects, businesses and assets, with at least £5.8 billion on carbon capture, low-carbon hydrogen, gigafactories, ports and green steel over the lifetime of this Parliament. We have also launched £4 billion in British Business Bank industrial strategy capital to scale up the financing package, and we introduced the clean industry bonus following the success in the round that we have just concluded. We are looking at whether we should expand that to hydrogen, and we will consult on that in due course.

We will continue to do all that we can to put the UK at the forefront of the global hydrogen revolution and thereby unlock billions of investment, create new-generation jobs, build the infrastructure and drive the clean growth that we—there seems to have been consensus today—all want to see. This autumn, we will publish the UK hydrogen strategy, which will be evidence-led, impact-focused and designed on the premise of fast-tracking delivery.

Since the publication of the last hydrogen strategy four years ago, the landscape has evolved significantly. Electrification technologies have moved on rapidly, pointing to a more focused and essential role for hydrogen, complementing the electrification that we will see in so much of our energy system. The new strategy will sharpen our priorities, deepen collaboration with industry, which is key to this, and seek to unlock the full potential of hydrogen over the next decade.

[Jamie Stone]

Does the Minister agree that we should at least check the proposed grid improvements against the possible strategic sites where hydrogen could be made?

[Michael Shanks]

My very next point was on the future of the network. It wasn’t, actually, but I will come to it now, because the hon. Gentleman made a very good point, which I meant to come back to. He is right, of course, that we need to invest in the grid—even if we were not embarking on this clean power mission, the grid is very much in need of upgrading—but we want to take the strategic planning of that much more seriously than it has been taken in the past.

We know that we need to build significant amounts of grid—the hon. Gentleman recognised the importance of that—but we also want to plan the future of the energy system strategically so that the grid follows a logical way to build out the energy system. His point about trying to make use of the abundance of clean energy to transfer it into hydrogen as an off-taker was well made. It will feed into the work on the strategic spatial energy plan. It is about how we best use all the energy system to our advantage. It is also about how we can reduce things like constraint payments and make use of it as efficiently as possible. That is an important point that we will take forward.

To conclude, our vision is clear: a thriving low-carbon hydrogen economy—one that decarbonises those hard-to-electrify sectors, strengthens our energy security and fuels good jobs and growth across the country—is at the heart of the Government’s mission.

[Jim Shannon]

I asked a question about the opportunity for apprentices. I know that the Government are committed to that; I have never had any doubt about that, but I want us to show where the opportunities may be. I know that the Minister is also committed to ensuring that all parts of the United Kingdom of Great Britain and Northern Ireland can take advantage.

[Michael Shanks]

A key part of my conclusion was the useful challenge that there always is from the hon. Member for Strangford (Jim Shannon) about ensuring that we represent all parts of the United Kingdom. He was right to point out earlier that it is a beautiful part of the country to visit. I confess I have still never been to Strangford, but there is still time.

The hon. Member is right on two other fronts. First, the skills strategy is all about unlocking the next generation of workers. We need to inspire people in school right now to see that we want them to be at the heart of the energy system of the future, and apprenticeships are crucial for doing that. We will create tens of thousands of jobs in the sector, but as part of that there has to be investment in apprenticeships. On his wider point, he knows that I enjoy the engagement with Ministers in devolved Governments across the country. We work closely with the Northern Ireland Executive. As I always say, the energy system is transferred in Northern Ireland, but there is a huge number of areas where we can learn from each other and work together to ensure that the people in Northern Ireland and Great Britain benefit from what we are trying to achieve, and we will continue to do that.

To conclude my conclusion, unless anyone else wants to intervene, we are firm in our commitment to working with industry. There is a huge opportunity here. This is an exciting moment for us to recognise—as we are doing with small modular reactors and with floating offshore wind—that we have the potential to be at the forefront of the next great thing in our energy system. It requires the strategy that we are putting in place and the long-term confidence for investment, and we will continue to work hand in hand with industry, investors, innovators, workers—

[Sadik Al-Hassan]

Will the Minister give way?

[Michael Shanks]

I will not, because I am just about to conclude. We will work with workers and trade unions to turn this vision into reality and ensure that every part of the UK benefits from the potential of growth and jobs in hydrogen and in securing our energy system for the future. I again thank all Members for this hugely constructive debate. In particular, I thank my hon. Friend the Member for Worcester for the way he introduced it and for the knowledge and experience that he brings to all these matters.

Post Office (Horizon System) Offences Bill (Instructions)

Michael Shanks Excerpts

Monday 29th April 2024 Commons Chamber

[Michael Shanks (Rutherglen and Hamilton West) (Lab)]

I start by paying tribute to several people across this House from a number of different parties. When I arrived here last year, I could tell they had already been working hard on this issue, including my right hon. Friend the Member for North Durham (Mr Jones) and the hon. Member for Motherwell and Wishaw (Marion Fellows). There is consensus across the House that this huge injustice must be righted. The question, as we have heard from a number of people, is how that is done in Scotland, and that is what I want to speak to briefly.

I want to make two points. First, there is the question of speed, which we have heard about a number of times, but more importantly, there is the question of accountability. Accountability is important. The Scottish Parliament has responsibility for justice in Scotland. Scotland has always had a separate legal system—since long before the Scottish Parliament was re-established—and, as we have heard, there are the questions of the Lord Advocate’s position, of how convictions were taken forward not by the Post Office by but by the Crown, of the basis of evidence used—

[Marion Fellows]

Will the hon. Gentleman give way?

--- Later in debate ---

[Michael Shanks]

May I make a bit of progress? I will then give way.

There is also the question of the evidence used around corroboration. There are differences in the convictions.

More importantly, the hon. Member for Motherwell and Wishaw spoke about one of the organisations involved—the Scottish Criminal Cases Review Commission, which she rightly said was the body that brought cases for review in Scotland—but she did not mention the accountability aspect. The commission was created by an Act of the Scottish Parliament, is responsible to the Scottish Parliament and gets its budget from the Scottish Government. There is a clear line of accountability between the Scottish Justice Secretary, the Scottish Government and the bodies responsible for reviewing these convictions, so the accountability is clearly with the Scottish Parliament.

[Joanna Cherry]

May I put it to the hon. Gentleman that he is completely misunderstanding what we are dealing with? We are dealing with absolutely extraordinary legislation that is quashing convictions as a gateway to compensation. Giving us a lecture of dubious accuracy on the lines of accountability of the Crown Office in Scotland does not address that. This legislation is going over the head of the Crown Prosecution Service in England, just as it would go over the head of the Crown Office in Scotland. Why cannot he appreciate that point? Is it because he is playing politics with the issue, like his Front-Bench colleagues?

[Michael Shanks]

The suggestion of dubious lectures coming from the Scottish National party is slightly misguided. I accept the point that the legislation goes above normal legal precedent, but there is no reason why the Scottish Parliament could not invoke its emergency Bill procedures as it has done in the past, recognising that this is an extraordinary situation.

[Mr Kevan Jones (North Durham) (Lab)]

The hon. Member for Motherwell and Wishaw (Marion Fellows) clearly does not understand how prosecutions are done in the UK—sorry, in England. [Interruption.] Well, not in England. In England, the Post Office took the prosecutions—they never went through the CPS. In Scotland, they did actually go through the Crown Office and the Advocate General. That is the difference. In terms of where decisions were taken and the people who reviewed cases before they went to court, the cases are not similar.

[Michael Shanks]

That is absolutely right. The key point is that there is no question about the Post Office being held to account for the institutional levels of cover-up—

[Marion Fellows]

Will the hon. Gentleman give way?

[Michael Shanks]

May I just make the point and then I will give way? The Post Office must be held to account for that institutional cover-up, and it is the responsibility of this place and the inquiry to look into that, but the prosecutions in Scotland were taken forward by the Crown Office, which is responsible to the Scottish Parliament. That is the point that I am making about accountability.

[Marion Fellows]

Would the hon. Gentleman agree that accountable for all of this is Post Office Ltd, which is wholly owned by the UK Government as its single shareholder, and that the UK Government took their eye off the ball, did not follow through, and took years to admit that there was a problem in the first place, and that if the UK Government caused this, they should fix it?

[Michael Shanks]

I am happy to agree with the hon. Lady about the responsibility of Post Office Ltd—I said that a few moments ago—but the prosecutions based on that Post Office evidence were taken forward by the Crown Office. There is responsibility to go around here. [Interruption.] I will just answer the point, if that is okay.

The evidence absolutely came from a flawed system, and Post Office Ltd must be held to account. That does not deal with how prosecutions in Scotland were taken forward not just on evidence from Horizon but with corroboration from other sources.

[Patricia Gibson]

I wonder whether the hon. Member shares my distaste at some of the things said in the Chamber today, including that we cannot bring this legislation forward in Parliament today because some of the postmasters in Scotland might indeed be guilty of theft and that we have to tread carefully. That bar has not been placed on postmasters elsewhere in the UK.

[Michael Shanks]

I would share that distaste, but those comments were reflecting what the Lord Advocate has said. I have letters from the Lord Advocate in my hand that repeat that point a number of times. Of course, the Lord Advocate sits around the Cabinet table with, I think—I will need to check—the current First Minister, Humza Yousaf.

[Joanna Cherry]

Will the hon. Member give way?

[Michael Shanks]

No. I have taken a lot of interventions and am going to make a bit of progress.

My second point is about timing. I do not accept the SNP’s argument at all that the timing is an issue. I have heard the Minister make the point on a number of occasions that the compensation regime will be available to people who have been exonerated—by whatever means that is—at the moment they are exonerated, so there is no question about that.

On the point about the Scottish Parliament not being able to rush through legislation, it does not have the same processes as the Northern Ireland Assembly—it does not have to go through a lengthy consultation process—so it could introduce a Bill tomorrow and have it passed before there is a vote on any of the confidence motions on Thursday. Indeed, in 2020, the Scottish Parliament passed an emergency Bill on covid—a considerably more difficult piece of legislation, stretching to 138 pages—in just two days, and the idea that this Bill is somehow more complicated than that is ridiculous.

There is no reason why the Scottish Parliament cannot take responsibility and introduce a Bill now. Indeed, if there was a question about not being able to finalise the Bill until the UK Bill had passed, the Scottish Parliament could take it all the way to the final amendment stage and amend it as necessary. But actually, again, the Minister has said that the Scottish Bill does not have to mirror directly the UK legislation for people to have access to the same compensation, which is what the hon. Member for Motherwell and Wishaw and I both want to see.

If the SNP is unwilling to act in the Scottish Parliament to introduce the Bill, my colleague Michael Marra MSP has already drafted a Members’ Bill and will introduce that Bill this week.

[Marion Fellows]

rose—

[Michael Shanks]

If the SNP is unable to act, there will be no more dithering and there will be no more delays, because Labour will act. For that reason, I will not be supporting the SNP motion.

[Marion Fellows]

On a point of order, Madam Deputy Speaker. At no time have the Scottish Justice Secretary or the Scottish Parliament said that they will not pass legislation—

Post Office Horizon Scandal

Michael Shanks Excerpts

Wednesday 10th January 2024 Commons Chamber

[Kevin Hollinrake]

I absolutely agree with the hon. Gentleman that we have to improve the remuneration of sub-postmasters and the businesses they run. We want to ensure we have a viable network going forward. We have 11,700 branches around the country. We have set a minimum number of 11,500, and a minimum of 99% of our population has to be within three miles of a post office, so we have already set access criteria. We are keen to ensure that the network is viable going forward; the hon. Gentleman offers one solution to that.

The Government already offer significant financing for the Post Office—about £2.5 billion over the last 10 years—in addition to other financial commitments we have made for other matters, such as rebuilding the IT system. We feel that the post office network has a bright future, particularly in areas such as access to cash, the banking framework and parcel hubs, and we see the remuneration opportunity improving in future years.

[Michael Shanks (Rutherglen and Hamilton West) (Lab)]

On Monday, I asked the Minister how we can ensure that any system is the same across the whole of the UK. In the past few days, before today’s announcement, what discussions has he had with the Lord Advocate in Scotland about the decisions? Has he given any consideration to legislative consent motions so that this Parliament could legislate to ensure that the same system is in place across the whole of the UK—something the Scottish Government are reportedly minded to consider? If that is not the case and the Scottish Parliament takes a different approach, how will the Minister ensure that the compensation regime is the same across the whole of the UK, so that people who may not have their convictions changed in Scotland in the same way still have access to the same compensation?

[Kevin Hollinrake]

I am very keen to make sure it is a UK-wide scheme, both in terms of compensation and people’s access to it. We have already had conversations with the Scottish Administration—I think they happened yesterday evening—so that they fully understand our intentions. Clearly, these matters are devolved in Scotland, so there are different routes to make sure that there is one scheme across the UK. I am keen to continue those conversations and make it as easy as possible for postmasters to overturn convictions or access compensation.