Energy
Michael Shanks Excerpts(2 weeks, 6 days ago)
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The Minister for Energy (Michael Shanks)
I thank all right hon. and hon. Members across the House for their contributions in this short but punchy debate this afternoon. This issue of how we build an energy system for the future has rightly become a huge political topic—a conversation not just in this House but much more in the public domain than it has been for some time. Energy is hugely important, and that is why it is even more important that we rise to the occasion to plan a future energy system that works for everyone in this country and that is based on a credible long-term plan, not on what we saw from the Conservatives today.
It has been an interesting debate, not least because quite a lot of it seemed to contain the echoes of the Tory party of late debating with itself. We had mentions of Boris Johnson and Baroness May, and I think we have doubled the number of visitors to the shadow Minister’s website just in the past half hour. Of course, there are plenty of quotes to go around. We do not need to go right back to the dim and distant Boris Johnson days. We can go back just to 2023, when the then Secretary of State, the right hon. Member for East Surrey (Claire Coutinho), said that
“the climate transition presents huge opportunities for this country and the people of this country when it comes to jobs, investment and improving our energy security.”
She apparently does not believe in any of that now. She said in the same speech:
“We are not rolling back from our targets at all”—[Official Report, 16 October 2023; Vol. 738, c. 114-115.]
However, she stands here today and proudly seems to dismiss all those targets.
I was particularly pleased to hear from the right hon. Member for Beverley and Holderness (Graham Stuart) earlier. He seems to be the only person left in the Conservative party who is willing to defend 14 years of investment in renewables. Everybody else in the party wants to turn their back on that investment, but I am delighted that he is here, in this debate and in many others, to remind us of his contribution.
Graham Stuart
The Minister is a thoughtful person, and I think he will share the concern about North sea oil and gas, for instance. On the specific topic of renewables, we are proud of what we did, but under the Climate Change Act—which has no cognisance of what happens to the economy; it is just decarbonisation or bust—we now have extraordinarily high electricity prices. We need to decarbonise heat, transport and industry, and the main way to do that is by electrification, which puts us in a bind. That is why I believe we are right to look at getting rid of the Climate Change Act and look at a new, balanced system that recognises that we must balance economics with the righteous move towards tackling climate change.
Michael Shanks
I am glad that the right hon. Gentleman was able to have another opportunity to speak positively about the Conservative party’s record on renewables when no one else in his party seems to want to talk about that at all.
A number of hon. Members said that the reason we are still subject to the volatility of gas prices is that it still sets the price far too often. The only way that we will bring down prices in the long term is by removing gas as the price setter. That means that we need to build more renewables, but another key point that the Conservatives have missed is that they built lots of those projects while not building the grid to connect them. They talk about constraint payments, but that is the legacy of a party that for 14 years failed to build the grid that would bring significantly cheaper power to homes and businesses across the country.
Wera Hobhouse
Is it not the truth that once the projects have been built, the energy is free? There is no commodity concentration, because the wind and sunlight cost nothing; there is very little cost apart from the installation.
Michael Shanks
I would say that it is significantly cheaper to generate electricity from renewables, but I might not go quite as far as the hon. Lady does.
There is a false argument that because the wholesale price of gas is cheaper, we should simply rely on gas more. That completely ignores the fact that we have an ageing gas fleet in this country, and would have to build significant numbers of new gas power stations to take advantage of that price. The figure the Conservatives frequently throw around compares the construction costs of renewables with the cost of gas, not the cost of building gas power stations, whereas renewables have extremely cheap ongoing costs in the long run.
Michael Shanks
Sorry, I will not. I have a great respect for the hon. Gentleman, but I have four minutes to sum up this debate.
For a long time in our post-war history, there was consensus. It was fuelled first by the transformative discovery of gas in the North sea, but also by a protracted period of us not worrying about whether, when we flicked on a switch, the electrons would flow. Putin’s invasion of Ukraine threw all that consensus away, and it threw into stark reality our dependence on gas power. By 2022, astronomic energy prices, which many of our constituents still face, shattered the complacent idea that continuing with the system we have known for a long time would work.
The answer is to build a system fit for the future. That will not be easy. Too often in this House and in our public discourse, we have come to believe that we can achieve difficult things by giving simplistic answers. This issue is complicated, and only by tackling the root causes of our dependence on gas, and the failure to build grids and the infrastructure of the future that we need, can we deliver not only long-term bill discounts for our constituents, but the energy security that we badly need. Most of our electricity grid was built in the 1960s and has not been upgraded since. It is holding back economic growth, but it is also failing to get cheaper power to people’s homes across the country.
The country faces two paths. From the Conservatives today, we have heard the status quo—the idea that we carry on as we have done, hoping that the volatility of fossil fuels will give us cheaper prices for a little while, until we get to the next spike and fail to protect our consumers. We have seen that time and again. In the past 50 years, half of the recessions in this country have been caused by our exposure to fossil fuels. We will not do the same thing again. We will not build an expensive monument to how we used to do things—to a system that let people down. We will deliver change and build an energy system for the future. That is why we are delivering our clean power mission.
I turn to the contributions on the North sea, which is a hugely important subject. I am afraid that I do not have quite as much time to sum up as I thought I might. It is important to recognise that the North sea has been in transition for a long time. Failing to recognise that does not help the workers in the North sea now. The status quo has led to a third of those workers losing their jobs in the past 10 years, and it has let down workers and communities. The failure to have a plan has let them down, but we will not do that. The status quo cannot be sustained, either economically or practically, so we will set out our future for energy in the North sea in the coming weeks. It will recognise the importance of creating new jobs and driving forward investment in renewables, carbon capture and hydrogen. We will not talk down those industries, but we also recognise that oil and gas will be with us for decades to come. The workers who have powered our country for more than half a century will continue to have a hugely important part to play in our energy system and economy.
There are two paths ahead of us: ambition for our country, or the barely managed decline that we have all faced in the past 14 years; hope that we can build something better, or defeatism that says we should not tackle the climate crisis or build new infrastructure because it might be too difficult; building for the future, or the yellow brick road of nostalgia, which has let so many of our constituents down. All of us in this House want energy security, economic growth, cheaper bills and to improve people’s lives. What divides us in this place is our ambition. We are ambitious for the future of the country, for what we can achieve, and about tackling the climate emergency. We will get on with that. The Conservatives need to learn the lessons of their 14 years of failure.
Question put (Standing Order No. 31(2)), That the original words stand part of the Question.
Oral Answers to Questions
Michael Shanks Excerpts(1 month, 2 weeks ago)
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Sarah Green (Chesham and Amersham) (LD)
The Minister for Energy (Michael Shanks)
We are delivering a strategic spatial energy plan to support a more actively planned approach to energy infrastructure. It will consider wider demands, including food production, water supply and nature recovery. The Departments for Environment, Food and Rural Affairs and for Energy Security and Net Zero will ensure that the strategic spatial energy plan and the land use framework work together.
Sarah Green
Residents in my constituency are concerned about a proposed site for a battery energy storage system on agricultural land in the green belt. With tales of similar storage systems catching fire, there is understandable fear in the community. Would the Minister meet me to discuss making local fire services statutory consultees for certain types of battery storage planning applications, and to hear my residents’ concerns, and will he reassure them that they will not be guinea pigs for new or untested technology?
Michael Shanks
The hon. Lady is right to say that public confidence in the safety of all infrastructure is incredibly important. Battery technology is no more unsafe than any other technology, but if there is a public perception that it is, then it is right that we take action to deal with that. That is why I am hosting a roundtable to look at what more we can do around safety, and it is why the Department for Environment, Food and Rural Affairs is doing work on some of the regulations in this space. This is regulated closely by the Health and Safety Executive, but I am happy to meet the hon. Lady to discuss what more we can do.
Anna Dixon (Shipley) (Lab)
I thank the Minister for that answer. In my constituency, several planning applications are pending, and one has already been granted in the villages of Wilsden and Cullingworth for battery storage and onshore wind in the wider area. Can the Minister explain how constituents with clean energy infrastructure in their area can benefit from both cheaper bills and community funding?
Michael Shanks
My hon. Friend is right to highlight that building renewable infrastructure is how we will bring down bills for everyone in the long term. It is incredibly important that we can store cheaper electricity, including through battery storage, so that we can deploy it in the system far more regularly than we are currently deploying gas, which is what is driving up people’s bills. We also want the communities that host the infrastructure to benefit directly from it. They will benefit from cheaper bills, as well as from direct community benefits. We have been consulting over the past few months on whether those should be made mandatory, and whether we should raise the expectations on developers.
Mr Tom Morrison (Cheadle) (LD)
Graeme Downie (Dunfermline and Dollar) (Lab)
The Minister for Energy (Michael Shanks)
We are building a resilient grid for the future after decades of under-investment. We are halving the development time for new transmission infrastructure, including through reforms to planning regulation and supply chains, and delivering the grid capacity needed to deliver clean power by 2030 and the economic growth that this country needs.
Graeme Downie
In January, when Storm Éowyn hit the UK, hundreds of thousands of people across Scotland were without power for several days. That included thousands of my constituents, in rural villages such as Oakley and Blairhall, and a number were reliant on power for critical medical equipment. Engineers performed heroic work to restore power as quickly as possible, but that was delayed by outdated grid infrastructure. As the new winter storm season has already begun this year, what steps are the Minister and the Department taking to ensure the future reliance of the grid to withstand worsening storms? How can that be done to protect vulnerable people in my constituency and across the UK?
Michael Shanks
My hon. Friend asks an incredibly important question. First, I would like to thank all the engineers and customer service staff who worked through the recent Storm Amy to ensure that people were reconnected as quickly as possible, including in some incredibly difficult circumstances—they did a fantastic job. We are trying to ensure that the UK’s grid remains as resilient as possible. That requires investment, and those who oppose the building of new infrastructure to improve our grid’s resilience will need to explain to their constituents why they want them to be much more at risk of disconnections in those storms.
Secondly, these storms are becoming more common, because climate change is impacting all our lives. The answer is to move more quickly towards clean power and to recognise that climate change is a problem, not to bury our heads in the sand and fail to deliver the necessary investment.
James Wild (North West Norfolk) (Con)
Proposals for 90 miles of pylons from Grimsby to Walpole in my constituency would have a major detrimental impact on rural areas due to the scale of the infrastructure, the loss of high-quality farmland and the proximity of the infrastructure to homes. Does the Minister understand—I do not think he does—why local people say no to pylons? Will he get National Grid to look properly at undergrounding or offshoring, to reduce the impact on these communities and ensure that if the proposals do go ahead, communities are properly compensated?
Michael Shanks
I could not have organised that better if I had tried: immediately after I said, “If you are against grid infrastructure, you are against economic growth”, up pops the hon. Gentleman to make exactly that point. His party is against building the future of this country, and we are not going to follow that path at all. Decades of under-investment have led to the issues we face today. They hold back economic growth across the country. This infrastructure has to be built somewhere. We are determined that communities benefit from that by introducing what the previous Government failed to do: community benefits for the communities who are hosting the infrastructure.
Greg Smith (Mid Buckinghamshire) (Con)
On grid infrastructure, the Chinese wind turbine manufacturer Ming Yang has said that it is looking to set up a wind turbine factory in Scotland. Our security services have warned us about the risks of Chinese state-sponsored hackers trying to infiltrate and destroy energy systems in the west, and hidden kill switches have been found in Chinese solar installation technology in the United States. Can the Minister provide the House with a very clear assurance that neither Ming Yang nor the Chinese state will be able to remotely control our energy infrastructure—yes or no?
Michael Shanks
First, I will take no lessons from the party that brought Chinese investors right into building our nuclear power station. This Government are delivering a nuclear power station with British Government funding, not Chinese funding, so I will take no lessons from the Conservatives on that. Many companies want to come and invest in the UK, and we absolutely welcome investment into this country, but every single decision and investment obviously has to pass stringent national security tests. I will not engage right now in what those tests will be, but we will say very clearly that no decision we make will ever compromise our national security.
Carla Denyer (Bristol Central) (Green)
Mr Richard Quigley (Isle of Wight West) (Lab)
The Minister for Energy (Michael Shanks)
The Government have published an onshore wind strategy to remove barriers to help companies build more onshore wind, with actions across several areas including planning, aviation, workforce and routes to market.
Mr Quigley
The UK is committed to growing our wind energy manufacturing capacity, but this requires investment in innovation to develop the next generation of products that could be made in the UK, using expertise that exists in places like my constituency of Isle of Wight West. Can the Minister assure me that the Government are doing everything possible to provide the funding to not only create jobs but provide sovereign ownership of blade technology and development in the UK, so that we become a true energy superpower?
Michael Shanks
My hon. Friend is right to recognise the importance of the industry in his constituency. Vestas is a key part of the UK’s wind supply chain. The Isle of Wight is already a successful centre for wind blade manufacturing and research and development. I can assure him that we are doing everything we can to work with partners and right across Government on the proposal, and that includes the agreement in principle between Vestas and the Government to support the factory’s repurposing to make onshore wind blades, saving 300 jobs.
Harriet Cross (Gordon and Buchan) (Con)
Energy companies of any kind, whether oil and gas or renewables, need certainty to plan to invest, whether it is onshore or offshore. The Government’s consultation on the North sea’s energy future closed on 30 April, almost six months ago, and the industry is still awaiting an outcome. The only guidance on timing on the Government’s website is to
“Visit this page again soon to download the outcome to this public feedback.”
The ongoing delay is causing huge uncertainty for sectors of all types of energy investment. Can the Minister confirm when the outcome of the consultation will be published with a date or a week, not a vague timescale?
Michael Shanks
On the substance of the hon. Member’s question, we launched the future of energy in the North sea consultation with a detailed set of questions, which we are analysing at the moment. We will publish the response to that as soon as possible, but I am sure she will understand that we want to make sure we have it absolutely right. I have engaged with industry to tell it about the timeframes for that throughout the process.
Let me just say one thing. The hon. Member talks about uncertainty. What could be more uncertain than the Leader of the Opposition coming to Aberdeen and talking down the investment in offshore wind, hydrogen and carbon capture—the very thing that will retain the supply chain in the north-east of Scotland? Uncertainty is what the Conservative party brings to this.
Dr Danny Chambers (Winchester) (LD)
Martin Vickers (Brigg and Immingham) (Con)
The hundreds of workers at Lindsey oil refinery will have noted that in response to an earlier question, the Minister did not attempt to respond on the future of the refinery. At least two investors are looking to take over the whole site. If they prove satisfactory, can the Minister assure me that the Government will back the project?
The Minister for Energy (Michael Shanks)
I am happy to have further conversations with the hon. Gentleman. I know that the refinery is in his constituency and that he cares deeply about it. A process is under way—led by the official receiver, because it is an insolvency process. It is considering a number of bids to make sure they are viable, and will conclude in the coming weeks so that there is certainty for the workforce. We have said throughout that we want to support as much investment in that site as possible.
Lillian Jones (Kilmarnock and Loudoun) (Lab)
Michael Shanks
My hon. Friend is absolutely right: allocation round 6 delivered a record number of renewables projects, and the jobs and investments that go with them will deliver jobs in constituencies throughout the country, including hers. We have reformed the scheme to ensure that allocation round 7 is a success, at a good price for consumers, and also that it delivers not only value for money but the clarity and investment for renewables projects that are essential to our energy security and to future investment.
David Mundell (Dumfriesshire, Clydesdale and Tweeddale) (Con)
Will the Minister confirm that there is now a timetable to ensure that everyone who has a radio teleswitch meter will have it replaced without losing their electricity, heating or hot water?
Sizewell C Funded Decommissioning Programme: Contingent Liability
Michael Shanks Excerpts(3 months ago)
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The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Michael Shanks)
I am pleased to have laid a departmental minute describing the contingent liabilities arising from the signing of the funded decommissioning programme and Government support package for Sizewell C. Once operational, Sizewell C will deliver clean power for the equivalent of 6 million homes and support 10,000 jobs, representing a major boost for energy security, jobs and economic growth.
It is normal practice when a Government Department proposes to undertake a contingent liability of £300,000 and above for which there is no specific statutory authority, for the Department concerned to present to Parliament a minute, giving particulars of the liability created and explaining the circumstances.
Following the Government final investment decision on Sizewell C, and subject to satisfaction of the relevant conditions precedent, both the funded decommissioning programme and Government support package will come into force at the time of revenue commencement. This is when the revenue collection contract between Sizewell C and the revenue collection counterparty is entered into, giving effect to the regulated asset base mechanism under which Sizewell C will be funded.
Context and rationale
The funded decommissioning programme sets out the operator’s intended approach to decommissioning of Sizewell C, including how costs will be met and the corresponding cost estimates. A funded decommissioning programme is required in statute as per the Energy Act 2008. The objective of the regime is, as per the funded decommissioning programme guidance 2011, to ensure that the risk of recourse to public taxpayer funds for the decommissioning of new nuclear assets is remote.
The Government support package respond to “high impact, low probability” risks that either investors or the supply chain cannot take or cannot price at a level that is good value for money for UK taxpayers or consumers, or it is not otherwise appropriate for consumers to take through the regulated asset base. The Government support package documents have been published on gov.uk.
Details of contingent liabilities
Funded decommissioning programme
The funded decommissioning programme at Sizewell C will be funded via the regulated asset base. The regulated asset base contains a series of protections that aim to minimise the risk that public funds will be required to meet decommissioning costs. However, in certain remote circumstances whereby all the protections afforded by Sizewell C’s economic licence fall away or a shortfall in the fund materialises, public funds could be used to contribute towards decommissioning costs and this liability would crystalise.
Based on best estimates by the Government Actuary Department, the maximum potential exposure from the liability is £12 billion—in 2022 terms. This has been estimated on a worse-case scenario whereby the Government were required to meet the full costs of decommissioning the Sizewell C power plant. The figure is based on the publicly available estimates contained in Sizewell C’s decommissioning and waste management plan. Due to the safeguards built into the funded decommissioning programme’s structure, it is highly unlikely that these full costs would ever crystalise.
Government support package
There are four contingent liabilities associated with the Government support package. Risks have been quantified based on best estimates of the costs that the package could be called upon to cover.
For three of the four limbs, the total maximum exposure is estimated at the maximum regulated asset base value. Further detail on each limb is provided below:
The contingent financing agreement allows the Secretary of State to provide additional finance or discontinue the project and pay investors compensation under the discontinuation and compensation agreement, in case of the project higher regulatory threshold being reached and shareholders choosing not to provide additional finance. We are not able to accurately quantify the maximum exposure level due to uncertainty over the point at which the agreement would be triggered.
The discontinuation and compensation agreement provides for the project to be discontinued in certain remote circumstances, in which case the Secretary of State will pay compensation to debt and equity, capped at the value of the regulated asset base.
The nuclear administration and statutory transfers agreement gives the means to introduce a form of special administration regime in respect of relevant licensee nuclear companies as per the Nuclear Energy Financing Act 2022.
The supplemental compensation agreement provides “top-up” insurance for certain circumstances on top of the insurances that Sizewell C is required to maintain through the commercial insurance markets. Under the SCA, the Secretaries of State would be liable for 95% of an uncapped amount for claims, with shareholders liable for 5%.
Due to the risks and market sensitivities around the Sizewell C equity raise and final investment decision, this notification could not be sent prior to the final investment decision being taken. Due to summer and conference recess timings, there will not be 14 sitting days prior to the liability being undertaken on 1 October. I am therefore announcing this liability today in order to allow as much parliamentary sitting time as possible prior to conference recess for the liabilities to be scrutinised.
The Treasury has approved this proposal for the contingent liabilities in principle. My Department will keep Parliament informed of any changes to this contingent liability as appropriate.
[HCWS893]
Prax Lindsey Oil Refinery
Michael Shanks Excerpts(4 months, 1 week ago)
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The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Michael Shanks)
On Monday 30 June, I made a written ministerial statement and gave an oral statement regarding the deeply disappointing news that Prax Lindsey oil refinery had entered insolvency. Today, I am updating the House on the urgent work undertaken by the official receiver to manage the situation on the Prax Lindsey site and determine next steps.
Since the refinery entered insolvency, we have worked urgently to ensure the safety of the refinery site and the security of fuel supplies, and to protect workers. This has also allowed time for bidders to express an interest in the site.
The official receiver has rigorously assessed all the bids received and concluded that sale of the business as a whole is not a credible option. Having visited some of the workers on site on 17 July, I know this will be hugely disappointing news for them, their families and the local community.
A package has been offered to all those directly employed at the refinery which guarantees jobs and pay over the coming months. The Government will also immediately fund a comprehensive training guarantee for these refinery workers, to ensure they have the skills they need, and that they are supported to find jobs—for example, in the growing clean energy workforce.
Furthermore, we understand that the official receiver continues to explore various proposals for assets. I therefore remain hopeful that a solution will be found that creates future employment opportunities at the Immingham site.
The refinery will continue to process crude for the rest of the month, and the official receiver will continue selling refined products for a number of weeks, giving buyers time to adjust their supply chains.
The former owners left the company in a poor state and gave the Government very little time to act. That is why the Energy Secretary immediately demanded that the Insolvency Service launches an investigation into their conduct and the circumstances surrounding insolvency, which is now under way, and I have repeatedly called on the owners do the right thing and provide financial support to the workforce.
[HCWS882]
Prax Lindsey Oil Refinery
Michael Shanks Excerpts(4 months, 1 week ago)
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Urgent Questions are proposed each morning by backbench MPs, and up to two may be selected each day by the Speaker. Chosen Urgent Questions are announced 30 minutes before Parliament sits each day.
Each Urgent Question requires a Government Minister to give a response on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
Andrew Bowie (West Aberdeenshire and Kincardine) (Con)
(Urgent Question): To ask the Secretary of State for Energy Security and Net Zero if he will make a statement on the closure of the Prax Lindsey oil refinery.
The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Michael Shanks)
In my oral statement on 30 June, I informed Parliament of the deeply disappointing news that the Prax Lindsey oil refinery had entered insolvency and that the court had appointed an official receiver to manage the situation on the site and determine the next steps. Since then, we have worked urgently to ensure the safety of the refinery site and the security of fuel supplies, and to protect workers. That also allowed time for bidders to express an interest in the site. Following a thorough process, the official receiver has rigorously assessed all the bids received and concluded that sale of the business as a whole is not a credible option.
I visited workers at the site on 17 July, and I will be meeting them again shortly today. I know that this will be hugely disappointing news to them, their families and the wider community. They are all in my thoughts at this time. A package has been offered to all directly employed at the refinery which guarantees their jobs and pay over the coming months. Alongside the usual support that is offered to workforces in insolvency situations, the Government will also immediately fund a comprehensive training guarantee for those refinery workers to ensure that they have the skills needed and the support to find jobs in, for example, the growing clean energy workforce.
Furthermore, we understand that the official receiver continues to explore various proposals for assets on the site. I therefore remain hopeful that a solution will be found that creates future employment opportunities at the Immingham site. The refinery will continue to process crude for the rest of the month, and the official receiver will continue selling refined products for a number of weeks, giving buyers time to adjust their supply chains.
The former owners left the refinery in an untenable position and gave the Government little time to act. That is why the Energy Secretary immediately demanded an investigation into their conduct and the circumstances surrounding the insolvency, and why I have repeatedly called on the owners to do the right thing and provide financial support to the workforce at this difficult time.
Andrew Bowie
When the Prax Lindsey refinery closes its doors in October, there will be only four oil refineries remaining in the United Kingdom, following the news about Grangemouth a few months ago. This is the second oil refinery to close in the United Kingdom in only six months, prompting serious questions about our energy security and resilience. In Immingham, people are waking up today to the reality that redundancies are now inevitable. It is estimated that about 625 jobs will be lost. For the community in Lincolnshire, that is seismic.
As the Minister said, we are aware of the long-standing financial issues with Prax Group, and I reiterate my support for the Government’s investigation into its directors. What progress has been made on that investigation? When does he expect the report to be made?
We cannot escape the fundamental crisis facing our manufacturing sector. As Jim Ratcliffe has said, the sector is “facing extinction” because of
“enormously high energy prices and crippling carbon tax bills.”
The Minister’s Department knows that to be true and has exempted some industry from paying the net zero levies, recusing specific businesses from paying the extortionate green subsidy costs. That is a ridiculous situation that sees subsidies being paid by the Government to businesses to exempt them from the charges being imposed by that very same Government—we are truly through the looking glass. The Department is wilfully talking down the oil and gas industry with hostile language and an impossible fiscal regime while overseeing the deindustrialisation of the United Kingdom through the perpetuated high cost of industrial energy. This is not simply managed decline; it is accelerated decline driven by ideology and steered from Whitehall.
Will the Minister tell us what work is being done to ensure the future of the four remaining oil refineries in the United Kingdom? What, if any, assessment has been made of the UK’s resilience, given the steep reduction in our refining capacity over the past six months? What, if any, assessment has been made of the increased reliance on imports that will be necessary as a result of the reduction in British refining capacity? Will he please change course and start speaking up for our oil industry—upstream and downstream—which sees from the current Government a disregard for it, its workers and the communities that rely most on it?
Michael Shanks
I agree with the shadow Minister, who was right to point out the impact that news like this will have on the workforce, who are hearing it this week, as well as the wider impact it has on their families and the community. That is why it is so important that we provide that support.
On the investigation, there is not much that I can update the House on at the moment. The Insolvency Service is carrying out that investigation, and it would be wrong for Ministers to interfere in that, but we have obviously given the direction that we expect it to be completed as quickly as possible. Given the mess we found the company in, I would not be surprised if it takes a bit of time for the investigation to get to grips with what was going on there, but that is for the Insolvency Service to resolve.
On resilience and fuel supplies, we have been really clear throughout that we have done everything we can to try to find a buyer to keep the site operating as a going concern, which is important for the workforce as well as for local resilience, but Prax Lindsey oil refinery comprises about 10% of our remaining refinery capacity; Phillips 66—a much larger refinery—is immediately next door. In the past few weeks, we have already seen fuel supplies adjusted and commercial contracts renegotiated. Although we clearly wanted the refinery to stay open, our assessment suggests that there is not an immediate risk to fuel supplies locally or in the wider area, but we will continue to monitor that.
On the shadow Minister’s wider points, I will first repeat what I have said on a number of occasions: we do support the oil and gas industry. I have spent a lot of time with the industry understanding some of its challenges, which are long standing, particularly around jobs lost over the past decade, and we consulted widely on what the future of energy in the north-east should look like to give confidence to the industry. We inherited the fiscal regime from the previous Government. We have consulted quickly on what the future of the energy profits levy should look like to ensure certainty about the fiscal landscape. The Treasury will respond to that consultation in due course. We want to give certainty, but we also want to recognise that this is an industry in transition, and burying our heads in the sand and pretending that that is not the case does nothing to protect the workforce in the long term. We will therefore continue to invest in the new industries of the future and in that wider strategy.
Refineries are important to our economy and will continue to be important. That is why I brought all of industry together in a roundtable to discuss the challenges facing the refinery sector. I was shocked to discover that that was the first time there had been such an invitation from the Government in 13 years. I ask the shadow Minister to reflect on who was in power for 14 years.
Bill Esterson (Sefton Central) (Lab)
The Minister is absolutely right—so was the shadow Minister—to focus on the jobs and the communities affected by the worrying news coming from Lindsey. He was also right to say that the problems are the result of shockingly bad management. My Select Committee will look at the future of refining in this country in a one-off session in the autumn, and we will be able to take further evidence at that point.
In response to what the shadow Minister said about energy prices, will the Minister confirm that the way to get industrial energy prices down—just as with domestic energy prices—is to reduce our reliance on the volatility, uncertainty and high prices that are determined by Vladimir Putin and the petrostates, and that we have to manage the transition, not shut our eyes to it or somehow play into culture wars as Reform wants us to do?
Michael Shanks
My hon. Friend is right. Separate from all the wider issues facing the refinery sector and the oil and gas sector generally, it is right we recognise that this week there are workers hearing some devastating news. Detailed work will be going on into how much of the site we can utilise in the future, and assessments are under way about how credible some of the bids are. We will do more work on that, and I am sure that his inquiry will be useful.
On energy costs more generally, one of the conversations I had when I met the refinery sector was about how we could do more to bring down its costs. We are looking at how we could support refineries more through including them in the energy intensive industries compensation scheme, which would obviously cut costs and help UK refineries with their competitiveness. That is not straightforward, but we are determined to look at that.
On my hon. Friend’s final point, he is right that the overall context of what we are doing as a Government is driving forward the transition to clean power, because it gives us back our energy security and takes away the volatility in prices that has been so devastating to households and businesses over the past few years. It is also the economic opportunity that helps drive forward refineries into what could be profitable businesses in that transition. They will continue to play a part in that, and we will support them to do so.
Mr Speaker
We have a lot of business today, so if we could help each other, that would be very useful. I call the Liberal Democrat spokesperson.
Edward Morello (West Dorset) (LD)
The closure of Prax Lindsey oil refinery is deeply troubling, with up to 1,000 jobs at risk across the supply chain. It is a devastating blow to workers, their families and the communities that rely on the refinery. We need a clear strategy to support those whose livelihood is in jeopardy. That means practical help with reskilling and retraining. This is also an opportunity for targeted green investment in industries that can offer decent, secure jobs for the future.
This crisis speaks to a wider failure. The UK still lacks a proper plan for a just transition that gives oil and gas workers real confidence about what comes next. We need to wind down fossil fuels in a way that provides genuine opportunities—well-paid green jobs, clean energy infrastructure, and proper support for the communities that have long powered this country. As other parties embrace climate denialism and internet conspiracy theories, the Liberal Democrats call on the Government to ensure that we do not backtrack on our climate targets, undermine green investor confidence, and abandon our leadership on the world stage when it comes to climate change.
First, what steps are the Government taking to ensure that contingency plans are in place, so that those whose jobs are at risk are guaranteed support and opportunities to redeploy their skills? Secondly, how are the Government ensuring that investment in skills and regeneration is targeted, so that it has the greatest impact where it is needed most? Finally, what steps are the Government taking to ensure that the transition to renewable energy makes the best use of the skills and experience of oil and gas workers in the places affected, such as the Humber estuary?
Michael Shanks
I wrote down the hon. Gentleman’s points, and then he came on to specific questions, but I will respond to the points. He rightly says that this has been devastating news for the workers. He also said something that I want to echo, and which I said to the workers when I met them last week: this decision, and what has happened to the company, is no reflection at all on the incredible, very skilled work that they are doing. I want to reiterate that. So often in these cases, the workers bear the brunt of decisions taken by the company, and that is a great shame. He is right, and we will support the workers. My Department is funding the training guarantee to make sure that all those workers are given an assessment of their training needs and future employment desires, so they can be given tailored support. We will make sure that is rolled out in the coming months.
On the hon. Gentleman’s wider point about the transition, he is right to say that we need a proper plan. That is why we consulted on the future of energy in the North sea, both through a series of questions, and through a much broader question about what the future of our energy sector looks like. It will have oil and gas for many decades to come, but already thousands of jobs are being created in other offshore industries, and we want to support that.
The hon. Gentleman is right to highlight that investor confidence is critical. It is shameful that people would seek to damage investor confidence in this country in the name of net zero rhetoric. The truth is that there has been more than £40 billion of investment in clean energies in this country. That means jobs and opportunities in all our communities across the country, and those who would talk that down should be ashamed.
Laurence Turner (Birmingham Northfield) (Lab)
I draw the House’s attention to my entry in the Register of Members’ Financial Interests in respect of the GMB trade union. The Minister said that he was engaging with workers. Will he set out in more detail what engagement he is undertaking with the trade unions that are those workers’ representatives? Will he give the House an assurance that the detailed modelling work undertaken by the Department includes the impact on the wider supply chain?
Michael Shanks
I also declare that I am a member of the GMB trade union; that is recorded in my entry in the Register of Members’ Financial Interests.
I have engaged with both the Unite trade union reps who are on the site, and with day shift workers who are not represented by a trade union, to make sure that I hear from them. I met them earlier this month and last week at the refinery, and I will meet them in about an hour’s time to talk through this more. We want to continue that engagement with them.
Sir Edward Leigh (Gainsborough) (Con)
Obviously, my first concern is my constituents who work in the refinery in the neighbouring constituency, that of my hon. Friend the Member for Brigg and Immingham (Martin Vickers). I am sure that the Minister will give them reassurance about enhanced redundancy. Also, may I ask a question on behalf of my rural constituents in North Lincolnshire—and I declare an interest, as I live there? This is a deeply rural area, where we rely on heating oil because we are not on mains gas. What impact will closure of the refinery have on the price of heating oil?
Michael Shanks
On redundancy, because of how the company went into insolvency, the workers will be entitled to statutory redundancy. That is not acceptable, given the role that they played in delivering for the company for many years. That is why I have publicly asked the owners of the company to put their hands in their pocket and improve the redundancy package. It is not possible for the Government to improve the package directly, but I am still hopeful that the company owners will do the right thing. We are providing a training guarantee to the workers, from Government funds, to make sure that they have that enhanced support.
I am happy to take away the point about heating oil. We have been assessing the situation over the past few weeks, including a number of weeks during which fuel has not left the refinery at its normal pace, to see what the impact is on supplies across the region. That impact has been minimal. That is partly because a significant amount of fuel and products come from the refinery next door. However, we will continue to monitor that, and if there is an impact on prices, I am happy to look into that.
Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)
Much like the ceramics sector, the refinery sector is an energy-intensive industry that is at the mercy of industrial energy prices, which are beyond its control but have a huge impact on its viability. It is welcome that the Minister thinks that the energy-intensive certification programme could expand to include the refinery sector, but he will know that the business level test is a huge barrier that needs to be overcome; it means that many companies will not be eligible for the programme. He will also know that the British industry competitiveness scheme is not due to come online for another two years; indeed, consultation on that scheme has yet to be opened. Refineries and ceramics companies are looking down the barrel of ever-increasing industrial energy bills. Will he give them some indication of what help and support is available now, before the new schemes come online, so that we do not have more statements about closed factories in the next few months?
Michael Shanks
My hon. Friend is right, and it is deeply frustrating that we inherited many of these issues, which were unresolved for such a long time. These are not problems that arrived in the past 12 months. Bringing in the refinery sector for talks with Government about the challenges would have been a fairly obvious thing to do at least once in the past 13 years. Clearly, that did not occur to the previous Government, and we have inherited challenges.
My hon. Friend is right to say that consultations will take time, unfortunately. It is right that we conduct a proper consultation to make sure that there are not any unintended consequences. The Minister for Industry, who is a Minister in both the Department for Energy Security and Net Zero and the Department for Business and Trade, is looking at how we can do that as quickly as possible. I am happy to follow that up with her. My hon. Friend is also right that nobody wants to be talking about redundancies in any part of our economy, and we are doing everything we can to bring down prices to prevent redundancies.
Martin Vickers (Brigg and Immingham) (Con)
This is a massive blow to my Brigg and Immingham constituency—most particularly to those directly employed by the refinery, but also to the wider economy of the sub-region. Will the Minister reconsider what he just said about statutory redundancy? I want the maximum support given to those workers.
I will raise two other points. First, North Lincolnshire council published a green growth zone document last year about the future of the regional economy. As we discussed yesterday, I urge the Minister to consider an urgent meeting, at which all involved are brought in for a roundtable discussion. Secondly, if he is not doing so already, may I urge him to speak to his colleagues who are local government Ministers? North Lincolnshire council will lose £2.6 million in business rates. Needless to say, that is a massive blow that would affect the delivery of services.
Michael Shanks
I thank the hon. Gentleman for his questions, and for meeting me to discuss the matter yesterday. I appreciate the impact that the closure will have, not just on those refinery workers who are directly impacted, but on the wider economy. We absolutely appreciate that there are ripple effects from a closure like this.
On the statutory redundancy point, we have looked at this, and have pushed to see if there is more action that the Government can take to change or give additional payments. It is not possible for Government to do that, not least because the Insolvency Service has to follow specific rules on creditors and how they operate in the event of an insolvency. However, the owners of the company have profited from this business, and they should do the right thing by the workforce that delivered that for them.
I have agreed to hold a roundtable discussion, and I previously met the two council leaders to talk about this. I am happy to arrange that discussion, and to have it with whoever is useful and wants to participate, because the hon. Gentleman is right about the opportunities. I am happy to engage on the point about North Lincolnshire and business rates. Although the refinery will not continue to be a going concern, we are assessing bids from those who are interested in the site; we hope those bids will deliver jobs and economic benefit, and that business rates income will come from new industries on the site. That is not as good as retaining the refinery in its current form, but we hope we can make some progress.
Dr Scott Arthur (Edinburgh South West) (Lab)
I thank the Minister for his statement, and particularly for the news that there will be a thorough investigation. I have two quick questions. First, are the reports correct that the previous Government did not meet representatives of the sector for 13 years? I know the Minister said that he had met them recently. Secondly, families will be in crisis when they hear this news, and they will struggle to deal with it. Does he agree that the owner, who I understand is not short of money, has an absolute moral obligation to ensure that those families are supported? Statutory payments are welcome, but the moral obligation has to be made clear.
Michael Shanks
I thank my hon. Friend for both those points. My understanding from the sector and from the Department is that a meeting has not happened in the past 13 years. [Interruption.] If the right hon. Member for Louth and Horncastle (Victoria Atkins), on the Opposition Front Bench, wants to find me dates when her Government met the sector, I would be really happy to look at them, and at any minutes from those meetings. That would be helpful. There are particular issues for the sector, but also for individual refineries; some are more profitable than others, and some have transitioned to doing other pieces of work. It is important that they learn from one other, and that the Government do what they can.
On my hon. Friend’s final point, I agree that there is a moral obligation here. Having met the workers on the site, I know that they have done nothing wrong. They have worked hard over many years to keep the refinery going, and to deliver a profit. Those who have taken money out of that business should now do the right thing and fund those workers, and I hope that they will respond to my letter in due course.
Chris Law (Dundee Central) (SNP)
With the Grangemouth refinery in Scotland having closed, and Prax Lindsey facing the same fate, there is clearly a missing element in the UK Government’s just transition policy. There can be no just transition if skilled jobs are lost when that transition is made. What assurance can the Minister give that the Government have taken a wider view, in order to stem these closures and address what is clearly a deeper issue with policy?
Michael Shanks
I take the hon. Gentleman’s point about the importance of recognising that the most important thing to get right is the transition of workers. I have said that in other answers. That requires us to recognise that a transition is under way, and to put in place a plan, which has not happened in the past decade, during which we lost more than 70,000 workers in this industry. It is really important that we grapple with those issues, and it will not be easy. The starting point is to bring together everyone with an interest in this, as I have done—everyone from the trade unions and industry to those making the green investment that is driving this forward—to make sure that we deliver on jobs, and to make sure that training and support are in place, so that workers can transition. He raises an important point.
On the hon. Gentleman’s point about Grangemouth, it was not breaking news that Grangemouth was in a precarious position, and the previous Government could have done more to ensure a just transition there. I met the investment taskforce yesterday, along with my colleague Gillian Martin, the Energy Minister in the Scottish Government, to look at the prospects for the sites. There are some interesting propositions coming forward; there are 84 bids in total for £200 million from the National Wealth Fund, and I hope that we will have good news on jobs and investment in Grangemouth soon.
Graham Stuart (Beverley and Holderness) (Con)
I thank the Minister for his briefing yesterday, but there is a pattern developing, is there not? Some 800 jobs were created every single day in the 14 years of the Conservative Government, but unemployment has gone up every single day under this Labour Government. Some 400-plus jobs have been lost at Vivergo, on the north side of the Humber, and perhaps 600 jobs will be lost directly, and others lost indirectly, on the south side of the Humber. Can the Minister reassure those affected that this Government will not destroy our industrial base, and that there is a future for us, because it looks like we are heading in the wrong direction?
Michael Shanks
I will avoid the wider political points in a week when workers are finding out about job losses, because that is obviously devastating for them. I will just say that the Government have published their industrial strategy, and this is the first time the country has had an industrial strategy in a very long time. [Interruption.] Well, let us say a credible industrial strategy, if the right hon. Member for Beverley and Holderness (Graham Stuart) thinks he had one before. Again, I ask him to present it to me. We are investing in the industries of the future, and delivering thousands of jobs on the Humber and right across the country. We are making sure that investment comes forward in jobs for the future. [Interruption.] The problem with the right hon. Gentleman’s point is that his party opposes that investment. It opposes the very thing that will deliver the jobs of the future, and I am afraid that is simply an untenable position. Either he is for or against investment in jobs; he has to say which it is. The industrial strategy is the way to deliver that.
Carla Denyer (Bristol Central) (Green)
The last time we discussed Prax Lindsey, I asked the Minister to support my energy jobs Bill—a plan for the redeployment and retraining of oil and gas workers that is proactive and industry-wide rather than reactive and crisis by crisis, and that would be paid for by the companies. That is what the workers and the unions want, but the Minister said he did not agree with it. He has now said that the Government will fund a training guarantee for these refinery workers and is asking this company’s owners to make voluntary contributions to support workers. That is progress, but will he now turn this into a proactive and industry-wide plan, and please go beyond asking the company nicely to do the right thing and require it?
Michael Shanks
I think the hon. Lady slightly misses the point. The company went into insolvency. The workers are therefore entitled only to statutory redundancy. I do not think that that is acceptable, so I have called—not nicely, but directly—for the owners of that company to do the right thing, put their hands in their pockets and fund proper redundancy for those workers. That is separate from a wider piece of work we are doing around the transition. I think she also misses the point about the importance of delivering investment in oil and gas that is also investment in renewables and in carbon capture, utilisation and storage to deliver the jobs that come next, so that there is a transition for those workers. I have said that I do not support her proposal, and I am happy to say that again because it would do neither of those things. It is essential that we support the oil and gas industry in its current form, but recognise that it is in transition. We still have decades of oil and gas to come in this country, but we are already building up the industry that comes next. That needs investment, and it also needs us to build infrastructure, which many people in her party seem to oppose.
Bradley Thomas (Bromsgrove) (Con)
While the Minister is right to point out that this refinery produces a small amount of the UK’s refined fuel overall, the site does provide around 50% of the fuel into Warwickshire Oil Storage, a key site at Kingsbury in the west midlands that supplies fuel into the west midlands, which is obviously a very large demand centre. What is the Minister’s assessment of the impact on the supply and demand balance of road fuels in the west midlands as a result of this closure?
Michael Shanks
I am happy to follow up on anything specific with the hon. Gentleman, but I can tell him that I get daily updates on assessments on exactly that point. Clearly, the first week of the insolvency saw some disruption to supplies leaving, but our evidence pointed to the fact that those commercial contracts were able to be renegotiated and to adjust to that. We are continuing to monitor to ensure there is no disruption, and there is no assessment at the moment that would suggest any impact at all on fuel security. Clearly, we will continue to do that, and if I can follow up on specifics, I will do so.
Lee Anderson (Ashfield) (Reform)
What a pathetic turnout today from the party of the workers: just four Labour MPs have turned up to speak out on behalf of the Prax Lindsey workers. What I want to know from the Minister is if it is true that a foreign company has already been lined up to asset-strip and decommission this site—yes or no?
Michael Shanks
First, I think the hon. Gentleman is misjudging the mood of this question, which is about workers affected by redundancy. I hear nothing from him on those workers who are hearing the news this week. On his point, we assessed a number of bids for the business as a going concern. None of those bids were credible, which is why the official receivers made the decision to cease refining. Some bids are interested in parts of the site for a range of different things, but I am not party to those bids. They are commercially sensitive bids that will be assessed on the basis of how many jobs can be retained and the industrial opportunities on that site, which is what we are driving forward. I would just say to him that spreading nonsense and rumours, either in this House or on social media, does absolutely nothing to support the workers on that site.
Harriet Cross (Gordon and Buchan) (Con)
I have listened closely to the Minister’s answers, and he is rightly highlighting the importance of the jobs and the redundancies, but I think we need to be a bit clearer and more open with people about what the new jobs in the renewables sector that the Minister refers to are about. These jobs are not comparable to a lot of the ones that will be lost in the oil and gas sector. A lot of them are not full-time jobs; a lot of them are part time or temporary jobs during construction phases. We are losing a huge number of workers across the country, and we will continue to do so because of the Government’s policies on oil and gas and the speed at which the sector is being demolished. Can the Minister please outline directly to these workers across the country, whether at Prax or in the north-east, how their jobs will be supported into the future? I am talking about comparable full-time jobs, not just the temporary ones.
Michael Shanks
A key objective of this Government is to deliver good, well-paid trade-unionised jobs, and we have been driving that forward. My right hon. Friend the Secretary of State has been pushing on trade union recognition, partly to ensure that terms and conditions in the clean energy industry are as good as those in, for example, the oil and gas industry. We will continue to push on that, and we have already had some successes.
I gently say that the investment going into clean energy that is delivering thousands of jobs and will deliver tens of thousands of new jobs across the country comes against a backdrop of opposition from the Conservatives on Great British Energy in the north-east of Scotland delivering those jobs. We are also announcing today the final investment decision on Sizewell C—10,000 jobs are being created in nuclear after years of dither and delay by the hon. Member’s party. We are getting on with doing this, and we will do everything we can to ensure those jobs are comparable on terms and conditions and pay. I say to her that if she wants these jobs to be created, she should support some of the policies that will deliver them in the first place.
Jim Shannon (Strangford) (DUP)
I thank the Minister for his answers. Bearing in mind that the refinery was responsible for supplying some 10% of British fuel—fuel for the United Kingdom of Great Britain and Northern Ireland—it is absolutely essential that a way forward is found, and found quickly. Part of that solution must be a common-sense approach to using fossil fuels. What discussions has the Minister had with his Cabinet colleagues to provide a long-term assurance that there is a future for this refinery, even at this eleventh hour, so it can be sold as a going concern, as it should?
Michael Shanks
The Government have pushed, over the past four weeks we have been aware of this issue, to try to find a route whereby the refinery can continue as a going concern. That was obviously our No. 1 objective. The official receiver assessed the bids that were made and found that none were viable to deliver that. The Government are not going to nationalise this refinery—we are not in the business of nationalising loss-making businesses—so, unfortunately, that is not a route we will take. But we have done everything we can, and what we now want to do is assess the bids for the future of the site to see what the maximalist approach is that, crucially, will keep as many jobs on the site as possible, but also will deliver on the industrial opportunities of that site for the wider community. We will continue to have those conversations.
Oral Answers to Questions
Michael Shanks Excerpts(4 months, 2 weeks ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
Alex Ballinger (Halesowen) (Lab)
The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Michael Shanks)
The Government are committed to strengthening collective bargaining and trade union recognition. The Employment Rights Bill and the plan to make work pay will modernise rights and improve conditions. The Office for Clean Energy Jobs engages unions to ensure that renewable energy jobs support economic growth, the net zero transition and workers moving from carbon-intensive sectors.
Alex Ballinger
Many of my constituents in Halesowen work in energy-intensive industries such as forges and heavy manufacturing. The Government are rightly supporting those industries to become more energy-efficient, but workers need new skills, as well as skills in the many new jobs in the renewable energy sector. As they make this transition, how is the Department supporting workers in the west midlands to get the right skills for these new industries?
Michael Shanks
My hon. Friend is right to raise that point. Supporting workers in energy-intensive industries is essential as we transition our economy. The Government will provide over £1.2 billion per year in skills funding by 2028-29, supporting training in renewables, low-carbon construction and advanced engineering. We are also investing over £100 million over three years to develop engineering skills in England and launching new technical excellence colleges to make sure that training stays aligned with employers’ needs. We will also push forward on the clean energy workforce strategy this year.
Mary Glindon (Newcastle upon Tyne East and Wallsend) (Lab)
Calum Miller (Bicester and Woodstock) (LD)
The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Michael Shanks)
We are working with Ofgem and the National Energy System Operator to accelerate network infrastructure through reforms to planning, supply chains and other areas, delivering the capacity needed to achieve clean power by 2030 and to drive economic growth.
Calum Miller
In my constituency of Bicester and Woodstock, the local plan anticipates significant new employment sites to create jobs and growth. Tritax Big Box tells me that it wants to put solar panels on 100% of usable roof areas on the buildings that it intends to create. Local planning policies would support that, yet I was shocked to learn that Tritax expects to install solar panels on only 25% of usable roof space. It cannot get a permit to generate electricity or consent to export to the grid. Will the Minister or his officials meet me to discuss how we can turn this into a win-win opportunity for rooftop green solar?
Michael Shanks
That sounds like a fantastic opportunity. Our ambition is to see solar panels on as many rooftops across the country as possible. It is a win-win opportunity, as the hon. Gentleman rightly puts it. He and I have spoken about a number of these issues previously, and I am happy to discuss this one with him. If he could write to me with the specifics, we will certainly look at the matter. In the meantime, we are looking at reforming all those processes to make sure that we can get as much power as possible.
Bill Esterson (Sefton Central) (Lab)
The challenges of increasing electricity grid capacity include the ability to get planning consent and to achieve grid connections, as the Minister knows. In the report that the Select Committee published last week, we referred to the problem of inconsistency in some of the guidance and energy plans over which comes first—the grid connection or the planning consent. Will the Minister please address that and ensure that the Government clear up that inconsistency, so that we can move forward with increasing electricity generation and grid capacity?
Michael Shanks
I thank my hon. Friend for the question and for the work that he and the whole Committee have been doing on this matter. His report has been my bedtime reading every night this week as it is an important piece of work. He is right about two things. First, where processes are not as well aligned as they should be, we absolutely need to look at what we can do to make sure that they work much more coherently. The second point his report made, which we are also looking at, is how we bring together things such as the strategic spatial energy plan, the holistic network design and the land use framework to make sure that we have coherent plans across the country, so that we can plan properly our energy system.
Shaun Davies (Telford) (Lab)
Adam Thompson (Erewash) (Lab)
The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Michael Shanks)
The clean power 2030 action plan makes it clear that nuclear will play an important role in our future energy system, providing low-carbon baseload power to the grid. We are delivering the biggest new nuclear building programme in a generation, having committed almost £17 billion at the recent spending review.
David Taylor
I was grateful to the Secretary of State for showing his love for Hemel Hempstead when he came to launch a new scheme on solar panels the other month. On the question of new nuclear and clean jobs, could the Minister outline how communities like mine in Hemel Hempstead will benefit from these new jobs?
Michael Shanks
Well, my right hon. Friend the Energy Secretary says that we love Hemel Hempstead; I think we agree on that. The nuclear sector is poised for significant growth. That will help deliver on our energy needs in the future, and it is how we will deliver thousands of skilled jobs across the country. The nuclear skills plan is a collaborative effort between Government, industry and academia, setting out the targeted work we need to address the skills gap and bring forward the thousands of apprentices we will need to deliver this work in the future. The regional skills hubs we have established will help to deliver training support locally to ensure that every community in the country benefits.
Adam Thompson
Rolls-Royce in Derby has recently been announced as the preferred bidder for the delivery of small modular reactors, which means that many of my Erewash constituents will become the beating heart of the workforce that delivers the reactors. Can the Minister explain how Derbyshire’s finest SMRs will help to end our reliance on foreign oil and gas?
Michael Shanks
My hon. Friend is absolutely right; the Government are committed to delivering a new golden age of nuclear, securing an abundance of clean power after 14 years of dither and delay from the Conservatives, and with that will come investment across the country. On 10 June, following a robust two-year process, Great British Energy Nuclear selected Rolls-Royce SMR as its preferred bidder to deliver the UK’s first small modular reactor, subject to final Government approvals and contract signature. The Government are making available £2.5 billion across the spending review to enable this to be one of Europe’s first SMR programmes.
Jim Shannon (Strangford) (DUP)
I have always been a supporter of nuclear power. Unfortunately, we do not have access to nuclear power in Northern Ireland, but I know from discussions with the Minister that he is very keen to ensure that modular nuclear power opportunities are available in Northern Ireland. Business that I have spoken to want access to these opportunities, as does the Northern Ireland Assembly. I know that the Minister is always committed to trying to make things better, so has he had an opportunity to talk to the relevant Minister in the Northern Ireland Assembly about ensuring that access to modular nuclear power is available to us in Northern Ireland?
Michael Shanks
I regularly engage with Ministers in the Northern Irish Executive, including in the Department for the Economy, which has responsibility for energy policy in Northern Ireland, and we discuss a range of issues. We are happy to support the Northern Irish Executive in any way we can, either with technology or through rolling out the regulatory framework. We are really excited about the opportunities posed by SMRs and are happy to discuss that in Northern Ireland as well.
Wendy Morton (Aldridge-Brownhills) (Con)
Marsha De Cordova (Battersea) (Lab)
The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Michael Shanks)
We will continue to support new renewables through the contracts for difference scheme in conjunction with initiatives such as the warm homes plan, the future homes standard and the boiler upgrade scheme. Great British Energy and Great British Energy Nuclear will together invest more than £8.3 billion over this Parliament in home-grown clean power.
Marsha De Cordova
I welcome the Government’s mission to achieve clean power by 2030. I know that the Minister will agree that it is vital that we make the transition to net zero as quickly as possible, not only to fight climate change but to lower energy bills. Does he agree that whereas previous Governments have failed to deliver for the British people, our plans are the single best way to bring down energy bills for families, including in my Battersea constituency, and to provide them with much-needed energy security?
Michael Shanks
I completely agree. My hon. Friend makes the point that this is not just about action on the climate—as important as that is—and creating thousands of new jobs, but about bringing down bills and, crucially, delivering on that energy security point. The truth is that even though our clean power mission is about doing all four of those things at the same time, the Conservative party opposes all of that action, would leave us much more vulnerable to the volatility of the fossil fuel markets, and would turn its face against the economic opportunity of the 21st century.
Sir Jeremy Wright (Kenilworth and Southam) (Con)
The Minister will recognise that one way to increase the supply of clean energy is to enable community energy projects to supply local energy markets. When Ministers are asked about that, as he knows they have been many times, they generally say that there is no technical obstacle to it happening, but will the Minister recognise that there is world of difference between, on the one hand, something being technically possible and, on the other, that same thing being facilitated and encouraged so it really happens? Will he focus on the latter as the Government develop their energy market reforms?
Michael Shanks
I completely agree. The right hon. and learned Gentleman is absolutely right: there are no technical barriers to doing it, but that does not mean that it is a straightforward process. To be honest, things that I thought would have been much more straightforward, like how we define “community”, are more difficult to get right, but we are absolutely determined to do it. He is right to make the point about delivering clean power that benefits local communities, so that they can buy it locally and really see the benefit of hosting it. That is exactly what we are determined to do and we will continue to work to make it happen.
Luke Akehurst (North Durham) (Lab)
Helen Maguire (Epsom and Ewell) (LD)
The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Michael Shanks)
Our clean power 2030 action plan sets out our pathway to delivering clean power. To support that plan, we recently launched the solar road map, which confirms plans to increase domestic solar installations through the future homes standard and warm homes plan.
Helen Maguire
Over 50% of our food and £2.7 billion in lifesaving medicines depend on the cold chain, but operators face soaring energy costs and growing grid instability. In Epsom and Ewell, Sunswap is pioneering battery and solar-powered refrigeration, which cuts emissions while protecting vital supply chains. Will the Minister commit to targeted support for renewable energy innovators like Sunswap, whose technology can strengthen both sustainability and national resilience?
Michael Shanks
The hon. Lady is right that we have an enormous amount of innovation in this space and real potential to meet our future needs, not just as a result of the pathway that we have outlined, but through innovative solutions like the one she mentioned, which provide specific support to targeted industries. I am happy to look further into her proposals, and at the funding available for innovation. If she wants to write to me with any details, I will happily follow up.
Dave Robertson (Lichfield) (Lab)
A business in the village of Fradley in my constituency has a plan to put millions of watts of solar on the roof of its businesses. Unfortunately, it cannot proceed with that application, because there is not sufficient export capacity on the site. It would never export a watt of that electricity, which would meet only a fraction of its energy needs. Will the Minister meet me, so that we can discuss how we can make regulatory changes to support projects like this one?
Michael Shanks
My hon. Friend makes a point that others have raised. We are looking in granular detail at how the system works to ensure that the regulatory landscape allows such opportunities to be taken. I am very happy to meet him to discuss this further. We are taking a detailed look at every single aspect of the system, so that communities, businesses and others can benefit from being able to export power to the grid. That will help the country with its energy needs and deliver a benefit for local communities.
Alex Brewer (North East Hampshire) (LD)
Carla Denyer (Bristol Central) (Green)
The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Michael Shanks)
Of course the Government follow the regulations that we have put in place quickly, and applications must be considered on a case-by-case basis—that is the way anyone would expect them to be dealt with. I will not say on the Floor of the House any more about those applications, as they are live decisions that will be made in due course by the Department.
Melanie Onn (Great Grimsby and Cleethorpes) (Lab)
Michael Shanks
I will repeat what I have said before: we are obviously hugely disappointed by the way that the owners have dealt with the company. I repeat the ask that I have made in the House a number of times, and in writing to the chief executive, that he should put his hands in his pockets and do the right thing by the workforce. We are doing everything we can as part of the insolvency process safely to manage the refinery, and to look at whether there are buyers interested in taking it on.
Blake Stephenson (Mid Bedfordshire) (Con)
Llinos Medi (Ynys Môn) (PC)
Solar developers are not playing by the rules when it comes to accessing the land of people on Ynys Môn. Government guidance states that developers must act reasonably when trying to obtain permission to access the land, but my constituents have received threatening emails and there have even been cases of developers trespassing on land. Does the Minister condone such behaviour, and does he believe that current guidance is strong enough to protect constituents such as mine?
Michael Shanks
I do not know the specifics of the case that the hon. Lady raises—if she wants to send any details to me, I will certainly look at them. We clearly want to see and expect in every single case a partnership between developers delivering projects that we think are important, the planning system responsible for putting the processes in place and the communities who should have their local area protected and be able to access it. I am happy to follow up with her if she wants to raise specifics with me.
Steve Witherden (Montgomeryshire and Glyndŵr) (Lab)
Michael Shanks
That is not the position of the Government, because report after report and the evidence points to the fact that undergrounding cables is significantly more expensive than putting them above ground. Individual applications will clearly look at the individual circumstances and make a decision on that. We have said as a Government that communities that host network infrastructure should benefit through community benefits and direct money off bills, and that is what we will deliver.
Ben Obese-Jecty (Huntingdon) (Con)
It was recently announced that the surplus Ministry of Defence land at RAF Wyton in my constituency has been designated as an MOD trailblazer site. The Housing Minister confirmed to me last week that no assessment has yet been made of the energy infrastructure currently in place. The Prime Minister recently confirmed to me here in the Chamber that my proposal to develop a defence technology cluster on the site would be supported. To that end, is the Minister prepared to look into the available energy infrastructure and substation connectivity at the site and write to me with his assessment?
Michael Shanks
The hon. Gentleman is assiduous in raising these sorts of questions with me. I am very happy to look at the possibilities. He is right to outline the potential of sites such as that, and we will look at it.
Tracy Gilbert (Edinburgh North and Leith) (Lab)
Nova Innovation in my constituency is pioneering floating solar, which is generating clean energy. Will my right hon. Friend outline what steps the Government are taking to support the development of floating solar?
Perran Moon (Camborne and Redruth) (Lab)
In France, Germany, Croatia and elsewhere on mainland Europe, geothermal energy is being taken very seriously. I was disappointed that geothermal energy got little mention in the industrial strategy, particularly as there is estimated to be 30 GW of energy in the Cornish granite batholith. Will the Secretary of State meet me to discuss how we clear the barriers to unleash the potential of the Cornish granite batholith?
Michael Shanks
My hon. Friend always raises the huge potential of Cornwall in this House and in the energy space. He is right to talk about the potential for geothermal; we are hugely excited about the opportunities that it presents. I am very happy to meet him and others to discuss further how we can take it forward.
Wendy Chamberlain (North East Fife) (LD)
I am already being contacted by constituents who are worried about affording their energy bills this winter, but do not feel that the service they get from the energy companies is properly supporting them. What steps are the Government taking to ensure that energy companies provide the support that they need?
Brian Leishman (Alloa and Grangemouth) (Lab)
More than 100 INEOS chemical employees are to lose their jobs at Grangemouth because the refinery has closed. The £200 million commitment to Project Willow does not help them in the here and now, and it is frankly an insult to the workers who are about to lose their livelihoods to talk about training opportunities at Forth Valley college that are not being afforded to them. What have the Government actually done and what will they do for those workers who do not have the same redundancy or training package as the refinery workers?
Michael Shanks
We are looking in the round at how we can deliver jobs and opportunities on the Grangemouth site. The National Wealth Fund made an unprecedented commitment of £200 million, and I have been meeting companies that are potentially interested in developing projects, to make sure we get them over the line. We have delivered on the training guarantee and delivered support beyond that provided by the Falkirk and Grangemouth growth deal. We are doing everything we can to support the workforce there, and we will continue to do so.
Draft Electricity Capacity (Amendment) (No. 2) Regulations 2025
Michael Shanks Excerpts(4 months, 3 weeks ago)
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The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Michael Shanks)
I beg to move,
That the Committee has considered the draft Electricity Capacity (Amendment) (No. 2) Regulations 2025.
It is a pleasure to serve under your chairship, Mr Vickers. These regulations were laid before the House on 3 June 2025, and they make technical improvements and changes to the capacity market scheme—the Government’s main tool for ensuring security of supply in Great Britain. We know that to achieve clean power by 2030, reform of the electricity market is critical. To paraphrase the clean power action plan, we must:
“Reform the capacity market to provide clear and viable routes to decarbonisation for unabated gas, enable low-carbon flexible capacity…and incentivise investment into existing capacity.”
Before I outline the provisions in these regulations, I will briefly provide some context. The capacity market was introduced in 2014, and it is designed to ensure that sufficient electricity capacity is available to meet future predicted demand, to maintain the security of our electricity supply. The capacity market is a well-established and technology-neutral scheme in which existing and new build electricity capacity receives revenue based on the capacity provided. Participants secure agreements through auctions, which require them to make capacity available at times of system stress. It is our main tool to ensure security of supply, and it provides the right incentives for all forms of capacity to be available when needed most. It covers generation, storage, consumer-led flexibility and interconnection capacity.
Through capacity market auctions, which are held annually—one year and four years ahead of delivery—we secure the capacity needed to meet future peak demand under a range of scenarios, based on advice from the National Energy System Operator. Since its introduction in 2014, the capacity market has contributed to just under 20 GW of new flexible capacity needed to replace older, less efficient plants as we transition to net zero.
To date, the capacity market has been successful in ensuring that Great Britain has adequate electricity capacity to meet demand, and it continues to be required to maintain our security of supply and to provide investor confidence. To ensure that the capacity market continues to function effectively, we regularly make adjustments to the implementing legislation based on our day-to-day experiences.
The draft instrument makes technical improvements and changes to nine regulations to support the functioning of the capacity market, and they have been identified and explored through consultation. The changes will ensure that the capacity market regulations remain clear for market participants and that the legislation remains up to date, to enable us to better deliver the security of supply mechanism.
The draft instrument does that by revoking several expired provisions of secondary legislation relating to the scheme, including references to: transitional auctions, which are no longer applicable; the temporary standstill period, which occurred in 2019; and the time-limited relief given to scheme participants in relation to coronavirus. It will also introduce a new process to establish a decarbonisation pathway for unabated gas plants currently in long-term capacity market agreements. That will allow gas plants to exit their agreements without penalty in order to transfer to a dispatchable power agreement, facilitating conversion to gas-fired power with carbon capture and storage once the technology is available. That will better align the capacity market with our clean power objectives, and it will provide gas plant operators with a future route to decarbonise their assets.
The Government carried out two public consultations on this instrument. The first considered reforms to the capacity market to strengthen security of supply and enable flexible capacity to decarbonise. The second considered reforms to modernise the capacity market and improve the participation and delivery assurance of consumer-led flexibility. Both consultations were published towards the end of 2024. Respondents were broadly supportive of the instrument’s proposals. We have also made a number of technical amendments to the capacity market rules that support the regulations, which were laid before the House on 3 June.
This draft instrument introduces a number of technical provisions and changes to enable the continued efficient operation of the capacity market so that it can continue to deliver on its objectives. These reforms will be critical if we are to achieve clean power by 2030. They will improve security of supply by ensuring the modernisation of the capacity market and making legislation as clear as possible for all scheme participants. We need clear routes for the decarbonisation of unabated gas and for the rapid acceleration of low-carbon, flexible capacity. And today, with these regulations, we take another step towards that.
I commend the regulations to the Committee.
Michael Shanks
I will not detain the Committee for long, but I should put on record that the shadow Minister was on the judging panel for the aforesaid awards. I am not quite sure what that says for either of us, frankly, but I thank him for whatever role he played in trying to prevent me from getting the award. It clearly did not work.
I welcome the shadow Minister’s broad support for the regulations, and I welcome his support for building a cleaner energy system, which I have not heard from the Conservative party for some months—I am glad he found his old script from a year ago and is repeating it in this place again, at least up to the word “however.”
Of course, the shadow Minister is right that security of supply is critical, as it is for any Government of any political party. These regulations are part of ensuring that security of supply into the future, and they are part of a series of measures we are taking to build infrastructure for the future, so that we remain resilient long into the future. That investment is important.
The shadow Minister talked about pricing, and I will pick out two points. First, the clean power mission is about reducing the current volatility in the price of gas. The Conservatives supported that move, and I credit them for constructing quite a lot of the renewables we have in the country, but they have since changed tack. At some point, they need to recognise that volatile gas prices are what is causing bills to increase so substantially, and that things like contracts for difference give long-term certainty on consumer bills and bring down the system cost, but the Conservatives oppose those things.
Secondly, capacity market costs have increased over time, not just in the past year but more generally. They have been impacted by a number of factors outwith anyone’s control when they were introduced. But overall, this change will bring about an overall benefit. It is important that we plan the power we might need one year or four years in the future and, of course, the cost of not having a capacity market would be a significant risk to the robustness of our electricity system.
Finally, and more broadly than these regulations, curtailment payments are deeply disappointing to everyone, but the answer is to plan the system strategically so that we build things in a way that makes sense. Secondly, of course, we need to build grid infrastructure to bring the cheaper power to consumers, and to reduce that curtailment payment cost. I hope we will see support from across the House on those questions of building new network infrastructure, although I suspect we will not from the Conservatives.
I warmly welcome, as I always do, the shadow Minister’s wholehearted support for the work we are doing in the Department for Energy Security and Net Zero, and long may that continue. I commend these regulations to the Committee.
Question put and agreed to.
Fossil Fuel Advertising and Sponsorship
Michael Shanks Excerpts(4 months, 3 weeks ago)
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The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Michael Shanks)
It is a pleasure to serve under your chairmanship, Mr Twigg, for my first petitions debate, which are a great innovation in parliamentary procedure. Like my hon. Friend the Member for Burton and Uttoxeter (Jacob Collier), I thank everyone who signed the petition. I do not think that I have been in a Westminster Hall debate with so many people in the Public Gallery. That is fantastic to see, and I thank them for being here.
I join the shadow Minister, the hon. Member for West Aberdeenshire and Kincardine (Andrew Bowie), in his comments about the Piper Alpha disaster, the 37th anniversary of which was yesterday. It was the worst oil disaster in history, in terms of human lives lost, and it reminds us just how dangerous some of the work in the North sea is. It also reminds us of the importance of the culture of safety, which has changed beyond recognition since that disaster. This is a useful moment to pause and reflect on the lives that were lost.
This is an important debate, and I praise my hon. Friend the Member for Burton and Uttoxeter for his excellent introductory speech. As a Member of Parliament, it is not always easy to give a balanced speech, but he attempted to put forward both sides of the argument very strongly, and I give credit to him for doing so.
I also thank other hon. Members who have contributed to the debate and raised a number of points. My hon. Friend the Member for Stroud (Dr Opher) brought his extensive medical experience to the debate. He rightly spoke about the significant impact that emissions have on people’s health, and about why climate change is a public health crisis as much as an environmental one. I also thank the hon. Member for Bristol Central (Carla Denyer) for her commitment to this issue. What she does in her spare time will now be in Hansard, so I think Wikipedia will be updated—there is no way out of that; it is on the record.
I recognise the strength of feeling on this incredibly important issue; the 100,000-odd signatures on the petition that triggered the debate underline that point. Before I address the specific points in the petition, however, I want to be absolutely clear that the Government are committed to tackling climate change. In fact, the Prime Minister said recently that that is “in the DNA” of the Government. We know it is an urgent threat to life—an existential crisis for our planet—and as I have said on numerous occasions, it is no longer a theoretical future threat, but a very present reality. We do not have to look far around the world to see examples of that.
Even if we did not accept all that as a huge reason to take action, we should recognise that the huge opportunity that swapping fossil fuels for clean, home-grown energy provides is much greater than just tackling the climate crisis: it can deliver our energy security in an uncertain time for our world and create tens of thousands of new jobs. It is also the industrial opportunity of the century. That is why one of the Prime Minister’s five key defining missions in government is to make this country a clean energy superpower with clean power by 2030, accelerating towards net zero. It is also why the Prime Minister has set one of the most ambitious nationally determined contribution targets in the world—to reduce all greenhouse gas emissions by at least 81% by 2035—and a few weeks ago my right hon. Friend the Chancellor set out the most significant investment in home-grown clean energy in British history.
Let me be clear. The Government are committed to this transition because it is the right thing to do for our energy security and to tackle the climate, but we will succeed in this mission only if we bring people with us. The moment that people start to feel that this is something being done to them, not with them, is the moment when we lose the battle. The shadow Minister rightly pointed out that we have been on this transition for a long time now. We have halved emissions since 1990 because of the consensus between Governments of different persuasions. That consensus, as many people will not have failed to notice, has now fractured, which is a great shame.
For us to win the political argument, we have to bring people with us. Instead of banning and blocking, our emphasis needs to be much more on empowering people to make informed choices. As the Prime Minister said before the election, after a period in which Government seemed to tread quite heavily on all our lives, part of this Government’s mission is to deliver for the people of this country, but to tread a little lighter on people’s lives. In this space, that means ensuring that everyone has access to accurate and trustworthy information about the climate crisis and the energy they use and the options available to them to be part of the transition.
In that context, I turn specifically to the petition. The UK has a robust regime in place to regulate the content and targeting of advertising through the Committee of Advertising Practice, which sets the codes that are upheld, and through the Advertising Standards Authority, which enforces the codes. The Government are not involved in the codes or in any of the investigations or enforcement delivered by the Advertising Standards Authority. In 2021, those bodies launched a climate change and environment project to respond to the ongoing climate crisis and ensure that environmental claims made in advertising are not misleading or irresponsible. Those findings have informed their updated guidance on advertising.
As the Government’s response to the petition sets out, we do not currently have plans to go any further on the guidance and ban or restrict fossil fuel advertising. However, that is not to say that we do not recognise that the climate crisis, as I have already outlined, is the greatest long-term global challenge we face. To address that, we need a legal framework in place to help us reduce our emissions, which will contribute to reducing our reliance on fossil fuels.
Carla Denyer
I thank the Minister for his patience while I checked a fact. A minute or so ago, he used the phrase “informed choice” to defend why he is not planning to ban advertising for fossil fuels. Is he aware that that exact phrase, “informed choice”, was used by the tobacco companies to campaign against the ban on tobacco advertising? I am reading from a memorandum by British American Tobacco that was submitted to Parliament in 2000.
Michael Shanks
I suspect that if we go through all the words that have ever been spoken inside and outside this place, we might find two words that go side by side quite often. In answer to the hon. Lady, no, I do not think that that is the case at all. She makes a persuasive argument, but in my view it is not the argument that applies in this particular case, which I will outline if I can make just a little more progress.
To come to the broader point, it is important that people have the knowledge and information before them to make informed choices on personal decisions, particularly on installing things in their own home. However, as a Government, we have a responsibility to share factual information about the state of the climate. That is why this Government frequently talk about the importance of the climate crisis; I think I have done so three times already in this speech. I am not seeking to pretend that there is not a climate crisis, and I do not think we have hidden from that fact at all.
I also want to talk about the path that the UK is currently on. We need to make a broader argument to the public that goes beyond banning advertising by certain companies. Collectively, we have a responsibility to show the opportunities presented by this transition, counter to much of the misinformation and disinformation that is being put about, including by Members of this House.
The latest report by the Confederation of British Industry shows that the net zero economy is growing three times faster than the wider economy, so there is an economic argument that we have to make. Since we came into government last July, more than £40 billion of private investment has come into the clean energy industries. We believe that the best way to build on that success, bring the public with us and create a convincing argument that this is the right route is by focusing on the economic and social benefits of net zero.
We have therefore been working with industry to explore how we can reduce emissions from high-carbon products, including voluntary eco-labels that help consumers to make different purchasing decisions. We are continually listening to the private sector, local government, trade unions and civil society. That is why we relaunched the Net Zero Council, and we will also publish our upcoming public participation strategy. At the same time, we are doing everything we can to slash emissions while building a more secure and stable future for our country.
The shadow Minister, in customary fashion, reeled off a set of political lines about why this is the wrong choice for us as a country, despite the fact that he believed in it last year when he was delivering speeches from the Government Benches. The truth is that actions speak louder than words, which is why in the past year we have not just said that we are committed to the clean energy mission and to delivering action on climate change; we have delivered.
We ended the onshore wind ban within 72 hours. We set up Great British Energy, the first publicly owned energy company in 70 years. We consented enough clean power for 2 million homes by approving applications that had languished on Ministers’ desks. We kickstarted the carbon capture industry. In the past few weeks, the Chancellor has also announced a significant investment of more than £60 billion in home-grown clean energy, including new regional hydrogen networks for transport, storage, industry and power. We also published our industrial strategy, which places clean energy right at the heart of industrial renewal over the next 10 years.
The wider context of climate action is important, and we want the UK to be a world leader in this space. That is why in 2008, when my right hon. Friend the Energy Secretary held the same role, we backed the Climate Change Act 2008, making the UK the first country to introduce legally binding net zero emissions targets. Since then, we have overachieved against the first, second and third carbon budgets, and we will be setting carbon budget 7 by June 2026, in line with our statutory duties.
Siân Berry
Before the Minister winds up, I want to ensure that he tackles the question of sponsorship, which is a key part of the petition. I think that focusing only on advertising ignores the lack of choice that people have if their much-loved sports team, the gallery they want to visit or the theatre company that they support is sponsored by a fossil fuel company. The Minister needs to reflect on why so many people signed the petition, having been put in an invidious position by these sponsorship deals.
Michael Shanks
It goes back to what I said earlier. I take the hon. Lady’s point, and I take seriously the number of people who engaged with the petition. I also reflect on the number of organisations and activities across the country that rely on sponsorship. I do not think that we should discount that so easily, because we have incredibly important organisations that may well collapse without some of that sponsorship.
There is a balance to be struck here. It is incumbent on Government to set the tone for what we expect in climate action. It is right and proper to hold private companies accountable where they share misleading information, but where they are supporting organisations that rely on their funding, I am afraid I struggle to say that we should simply withdraw that funding and, with it, the organisations that rely on it. As someone who has run a charitable organisation in the past, I can tell the hon. Lady that there is not an abundance of cash out there in alternatives.
This is about a balance, but I take the hon. Lady’s point on board, and we keep these things under review, as do other Departments that have a closer relationship with the Advertising Standards Authority and deal with questions on such matters. As I say, this is about us treading a little lighter on people’s lives and making the case for taking collective action on the climate crisis, but not being in the business of banning things.
I want to touch briefly on a point that the shadow Minister made, which is not often raised in these debates, about the just transition for the oil and gas industry. It is important to recognise that the industry has long been in transition, but there are many thousands of workers who rely on it for their livelihood and there are whole communities that depend on it for employment and investment. Although it is right that we are looking to the future of the North sea—a future that will include oil and gas for many decades to come, but will inevitably move towards other technologies, including carbon capture, hydrogen and offshore wind—we need to ensure that we are delivering the transition on the principle of fairness. Fairness for households means protecting bill payers from the volatility of fossil fuels, but in the North sea, fairness also means ensuring that workers and communities have a long-term, prosperous plan for their future.
The North sea will play a critical role in Britain’s energy future. For nearly 60 years, people have worked in incredibly difficult circumstances in the North sea, with workers, businesses and communities helping to power our country with oil and gas, and they will do so for decades to come. Although oil and gas production from our own shores will play an important role, as we drive towards clean energy, the North sea gives us an opportunity to show new leadership. That is why in our consultation earlier this year we outlined the role that we want to see the North sea playing long into the future.
I reiterate a point that I made at the beginning: this is an incredibly important subject and an important moment for us to say that the action needed on climate change is not just a question of banning advertising; it is about serious investment in how we push towards our clean energy transition. The Government are playing an active role in driving that forward, reducing emissions right across the country, creating good economic opportunities as part of that, demonstrating global leadership on climate action and delivering opportunities to every part of the country.
We are bringing people with us on this journey, so that when those who stand up and say that the climate crisis is not a priority for us, or that we should not be moving to net zero because it might be too difficult, we can say that we are delivering the economic and industrial opportunities of the 21st century. That is how we bring people with us and deliver on our transition for everybody. It is also how we deliver the action needed to tackle the climate crisis. That is why, although this petition is an important conversation, we think there are already measures in place to tackle many of these issues. They may well need to go further, and that is for the bodies responsible to do themselves. We think that the action needed from Government is to drive forward this transition and to deliver jobs, energy security and climate leadership, and that is what we will continue to do.
UK Onshore Wind Industry
Michael Shanks Excerpts(4 months, 4 weeks ago)
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The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Michael Shanks)
I am tabling this statement to inform members of the publication of the onshore wind taskforce strategy and updated community benefits guidance for onshore wind in England.
The Government are committed to delivering a clean, affordable and secure energy system by 2030, and accelerating progress towards net zero. Onshore wind is one of the cheapest electricity generation technologies and will play a crucial role in delivering our decarbonisation goals. Having more low-cost renewables like onshore wind reduces the UK’s exposure to volatile global fossil fuel prices, which protects consumer energy bills against future price shocks. Onshore wind is therefore vital to boost Britain’s energy independence, protect bill payers, support high-skilled jobs and tackle the climate crisis.
Making Britain a clean energy superpower is one of the Government’s five missions. The clean power action plan, published in December 2024, set a target for 27 to 29 GW of onshore wind by 2030. Today’s publications are a significant step forward in delivering the 2030 mission. This mission is about driving economic growth as well as clean power, and industries such as onshore wind present a significant economic opportunity. For example, by 2030 up to 45,000 UK jobs could be supported by the onshore wind sector.
Onshore wind taskforce strategy
The strategy is the main output of a joint Government and industry taskforce established to identify and agree essential actions to mitigate barriers to deployment across the UK and capitalise on the economic benefits. The taskforce was set up following the removal of the de facto ban on onshore wind in England in July 2024 to streamline and maximise the deployment of onshore wind.
This is the Government’s first ever dedicated strategy for onshore wind, committing to 42 actions across planning, grid, workforce, financing and aviation. This will ensure we quickly unlock onshore wind deployment, deliver on the economic benefits, and make progress towards our clean power mission. Highlights of the onshore wind strategy include:
New actions to ensure the planning system is ready for the first English projects to come through the pipeline since the removal of the de facto ban, which severely limited deployment.
Ambitious actions to address interference issues between onshore wind turbines and civil and military aviation systems, to help get onshore wind projects moving.
A range of new commitments, alongside industry, to build the evidence base to support future onshore wind supply chain and skills interventions.
Today we are also announcing the establishment of an onshore wind council to ensure we deliver on the critical actions in today’s publications and continue the excellent collaboration with industry.
Guidance on community benefits for onshore wind in England
Government want to ensure that communities directly benefit from our 2030 goals, and today we have published updated voluntary guidance on community benefits for onshore wind in England, ensuring developments have a lasting positive impact on communities. The guidance includes:
Best practice models for benefits schemes such as community benefit funds, local electricity bill discounts and shared ownership.
Support available to communities when co-designing and administering funds, summarising best practice engagement principles.
A resource kit for communities with detailed case studies and example documentation.
The guidance sets expectations that developers pay community benefits of £5,000 per megawatt of installed capacity per year for the operational lifetime of the project. This would mean a 25 MW wind farm would deliver £3.75 million of funding for communities on local initiatives across a 30-year operating life. If we deliver 29 GW of onshore wind by 2030, we could unlock around £70 million of additional private investment in our rural towns and villages every year.
Scaling up onshore wind generation will be critical to the success of the Government’s clean energy mission. Today’s publications will give a boost to the onshore wind industry and local communities, reduce our dependence on volatile fossil fuels, and improve our energy security.
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North Hyde Substation Outage Review: NESO Final Report
Michael Shanks Excerpts(5 months ago)
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The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Michael Shanks)
In March 2025, the Secretary of State for Energy Security and Net Zero commissioned the North Hyde substation review, an independent report delivered by the National Energy System Operator. The report was commissioned following a large fire breaking out at the substation, disrupting power supply to over 70,000 customers including Heathrow airport. While power was restored quickly, there were significant secondary impacts to the aviation sector due to the associated closure of Heathrow airport. NESO’s interim report was published in May 2025, and the final report has now been completed and published on NESO’s website.
The review aimed to identify lessons to be learned and actions to take forward for the prevention and management of future power disruption events, and lessons for Great Britain’s energy resilience more broadly. The actions recommended by this review address concerns under the three pillars: resilience of energy infrastructure, response and restoration of energy infrastructure and enhancing the resilience of critical infrastructure to energy disruption, as set out in the terms of reference published on gov.uk.
The report has highlighted key areas for substantial improvement across energy infrastructure management and maintenance approaches, and across the sharing of information and understanding between energy network operators and connected commercial customers. It also has options for improving the power resilience of other critical sectors. These actions will drive improvements to Great Britain’s energy resilience.
The majority of recommendations address improvements to be made across all parts of the energy sector, regardless of their involvement in the incident at North Hyde. In collaboration with NESO, Ofgem and other partners, my Department will ensure the delivery and implementation of these energy sector recommendations. The report findings are also applicable to wider Government policy on energy resilience—both in the energy sector and more widely. My Department, working across Government, will urgently consider the findings and recommendations set out by NESO and publish a response to the report in due course.
[HCWS770]