Economic Growth: East of England

Peter Aldous Excerpts

Wednesday 10th October 2018 Westminster Hall

[Peter Aldous (Waveney) (Con)]

I beg to move,

That this House has considered promoting economic growth in the East of England.

It is a pleasure to serve under your chairmanship, Mr Davies. The purpose of this debate is to highlight the enormous economic potential of the east of England and to put forward proposals for promoting growth, which can benefit people right across the region. In the past, East Anglians have perhaps been slow to come forward. We have hidden our light under a bushel, and thus the region has not secured the investment in infrastructure that is needed to transform what is already a highly successful economic region into a global leader. It is important that we now cast aside such shyness.

As we look beyond Brexit, the UK must strive to be the leader in a variety of fields. The east of England can help secure this goal, whether it is in the clean energy, agri-food, life sciences or information and communications technology sectors. The catalyst for this debate was the formation last December of the east of England all-party parliamentary group, which the hon. Member for Cambridge (Daniel Zeichner) and I co-chair, and which last month launched its Budget submission, “Building together the foundations of more productivity, prosperity and inclusivity in the East of England”. Much of what I will say is based on the proposals set out in that publication.

What is the east of England? In some respects, it is an area without boundaries. It includes the counties of Suffolk and Norfolk as well as Cambridgeshire and what used to be Huntingdonshire, and it extends to parts of Essex and Hertfordshire, though owing to the post-war growth of London, it does not reach as far south as it used to. From the Minister’s perspective, I fear it does not include Watford—its inclusion would enable the region to claim a premiership football team, as the Town and the Canaries currently flounder.

The region is relatively flat—it is often described as the bread bowl of England—and made up of attractive villages and countryside, interspersed with popular market towns and larger towns and cities such as Cambridge, Norwich, Ipswich, Colchester, Peterborough and, on its southern boundaries, Chelmsford.

[James Cartlidge (South Suffolk) (Con)]

My hon. Friend is a fine bastion of our region and I congratulate him on securing this debate. The east of England is beautiful, but if we want to encourage tourism, people have to be able to get there. Does he agree that one of the fundamental challenges is our rail network in the eastern region?

[Peter Aldous]

My hon. Friend is spot on: infrastructure and communications, whether road, railway or digital, are hugely important to the region’s future. I shall briefly touch on that, and I am quite sure my colleagues will do likewise.

The east of England APPG held its inaugural meeting on 13 December 2017, when we were addressed by Lord Heseltine, who emphasised the need to think strategically and to consider how best to manage and spread economic growth across the whole region for the benefit of all people. The Budget submission has been supported and endorsed not just by MPs, but by business, local government and local enterprise partnerships. Signatories include British Sugar, Stansted Airport, AstraZeneca, Anglian Water, James Palmer, who is the Mayor of Cambridgeshire and Peterborough, the Haven Gateway Partnership, the New Anglia local enterprise partnership, the Hertfordshire local enterprise partnership and the East of England Local Government Association.

In arriving at our recommendations, we held evidence sessions and considered a range of innovative ideas as to how to promote and sustain economic growth, including proposals from Lord Adonis; Councillor David Finch, who is the leader of Essex County Council; and Mayor James Palmer, who is working up plans for much-needed infrastructure improvements through land value capture. The recommendations that we are putting forward should be regarded not as a wish list, but instead as a new way of working and getting things done—business and Government, both national and local, working together to secure investment that ensures the whole of the east of England realises its full potential.

It is important to highlight the enormous economic potential in the east of England. We are one of the fastest-growing regions, in terms of both population and economy. With a population of 6.1 million, the region is growing rapidly at a pace that is second only to London. In 2016, the east of England was one of just three UK regions to contribute more in tax than it received in public moneys. Despite this, public expenditure in the region was £8,155 per capita in 2017, which is less than the UK average of £9,159.

We are a frontrunner in attracting business. In 2017, the east of England saw the largest increase in business numbers of all UK regions. We are at the forefront of global excellence in innovation. The region is a centre for nationally and internationally recognised expertise in sectors such as life sciences, ICT, agri-tech and low-carbon energy supply. The corridor from Cambridge to Milton Keynes and Oxford has the potential to be the UK’s Silicon Valley. We are a jobs powerhouse—total employment is expected to rise by 7% over the next 15 years—and we complement and enhance the position of London as a world city.

Significant investment is already taking place in the east of England. By 2020, all trains in the area served by Greater Anglia will be brand-new, not second-hand hand-me-downs from other regions. Some £1.5 billion is being spent on removing what is probably the worst road bottleneck in the whole country: the A14 between Huntingdon and Cambridge. A further £300 million is being spent on schemes along the A47 from Peterborough to Lowestoft. The Norwich northern distributor road is open, and vital new bridges are being built in Great Yarmouth and Lowestoft—the latter is in my constituency.

There is a need to join up the dots and to think strategically, so that the whole region can benefit from those investments. There are also challenges that are best met at regional level, such as climate change and water resource management. We are not only a very dry region but a low-lying one, with a coast where the battle with rising sea levels has been raging for millennia. The recommendations in the APPG report provide the foundations to promote growth in three areas: transport, infrastructure and industrial strategy. I shall briefly go through them.

With regard to transport, we recommend that the

“Government should support England’s Economic Heartland and Transport East—the region’s two sub-national transport bodies—to become statutory bodies.”

By doing so, we will be better able to prioritise, fund and then deliver road, rail and air transport improvements.

On infrastructure,

“councils should have greater discretionary powers to encourage housing delivery…Further action is recommended to free-up finances to build affordable homes at scale”

through a variety of measures, including

“relaxing Housing Revenue Account borrowing…Ministers should explore innovative funding options that could help deliver infrastructure to enable new housing, either by direct council investment or by leveraging in other funding…Government should facilitate greater cooperation between developers, infrastructure providers, and local planning authority providers to improve housing delivery.”

The importance of digital connectivity cannot be overestimated. The need for a full fibre network to all homes and businesses across the whole region is incredibly important. It is an absolute must, if the region is to compete globally post Brexit. If necessary, greater powers should be granted to Ofcom to ensure that commercial operators do not just concentrate on the larger urban areas.

With regard to our regional industrial strategy, we should be focusing on our flagship industries: life sciences, agri-tech, ICT and clean energy. If necessary, Ofcom should be granted greater powers to ensure that commercial operators do not concentrate just on the larger urban areas. Our regional industrial strategy should tackle the productivity gap, which is a particular problem for the region. The local enterprise partnerships are key to developing and enacting an effective industrial strategy for the region, because local private and public sector leaders best understand the region’s opportunities and challenges and are best placed to co-ordinate the promotion of the various sectors to ensure consistency. The education strategy should focus on helping local people to develop transferrable and adaptable skills.

I have sought to provide a framework, albeit in an outline form, for promoting and spreading growth across the east of England. There is a great deal of flesh to put on the bones, and I anticipate that colleagues will do that by highlighting the opportunities and constraints in their areas. Now is only the beginning of this campaign. There are many proposals in the APPG’s report, and they deserve careful thought and implementation. I ask the Minister to signpost the roadway that we need to go down to ensure that the east of England is a global leader and that we enhance productivity and increase prosperity for all those who live and work there.

--- Later in debate ---

[Peter Aldous]

We have had a wide-ranging debate, and I do not have time to highlight colleagues’ excellent contributions. Someone who looks at the east of England might say, “Everything looks reasonably okay there. It’s perfectly satisfactory. Let’s rumble on.” But do we want to be just rumbling on, second best? No, we do not. To use another football analogy, we want to be in the premier league. We want to be in the top four. We want to be not just playing in Europe every year but winning World cups. That is what this work is about and what we are putting the framework down for. This is a new way of doing things. This is a start—let’s get going.

Question put and agreed to.

Resolved,

That this House has considered promoting economic growth in the East of England.

Oil and Gas Industry

Peter Aldous Excerpts

Tuesday 9th October 2018 Westminster Hall

[Peter Aldous (Waveney) (Con)]

It is a pleasure to serve under your chairmanship, Mr Hollobone. I congratulate the hon. Member for Falkirk (John Mc Nally) on securing the debate, and he has done so at an opportune time, just under three weeks before the Chancellor delivers his Budget. He has also provided us with the opportunity to highlight the vital importance of the industry to the UK: it is essential for the UK’s security of energy supply, it has contributed billions of pounds to the Exchequer over the past 50 years, and it provides hundreds of thousands of highly skilled and well-paid jobs.

The industry has been through a great deal in recent years. As a result of the collapse in the price of Brent crude, tens of thousands of jobs have been lost and the industry has had to restructure. In many respects, it has emerged fitter and leaner, but significant challenges remain, and it is vital that the tripartite approach of industry, regulator—the Oil & Gas Authority—and Government working together continues. The oil price has bounced back, but that is almost certainly for short-term global geopolitical reasons, and it would be complacent to assume that the higher price will be sustained into the longer term. Production is up significantly, and by the end of the year could be 20% higher than over the past five years. Significant cost reductions have been made, though it is important that they are sustained if the industry is to remain globally competitive. However, warning lights remain on amber, with exploratory drilling activity at a record low and the revenues of supply chain businesses continuing to fall. It is vital that exploration and production companies work collaboratively with their supply chains, as their respective futures are very much intertwined.

I will briefly highlight three factors that need to be centre stage for the industry to continue to play its lead role. The first is the need for a stable fiscal regime. One of the key reasons why the UK continental shelf is an attractive investment proposition is that it is fiscally competitive. That reputation has been hard won and must not be thrown away because of an increase in tax rates. That would be short-termism, and it would cause lasting damage. In the Budget, the Chancellor should re-emphasise the Government’s commitment to the “Driving investment” plan. The proposals for transferable tax history, to be included in the forthcoming Finance Bill, are extremely welcome and will drive investment in late-life assets and maximise economic recovery. It is also vital that the Treasury urgently clarifies its plans for ship end-use relief and introduces proposals that are in line with the “Driving investment” plan.

Secondly, it is vital never to forget those who work in the industry. As the hon. Member for Falkirk said, 167 people lost their lives in the Piper Alpha disaster 30 years ago. The drive for business efficiency, which is very important for the industry’s future, must never compromise safety. It is also important to provide attractive career paths to encourage people into the industry. OPITO estimates that there is a need to recruit 40,000 people into the industry over the next 20 years, 10,000 of them into roles that currently do not exist. The “Workforce Dynamics” review has been taking place this year, and skills demand maps are being worked up. The Government should encourage and support that initiative, which will enable the industry to employ safe and well-trained people who will maximise its contribution to the UK economy.

Lastly, the industry must provide a bridge to a low-carbon future, which means setting out a clear and deliverable deployment pathway for carbon capture, utilisation and storage. The Government should consider carefully the conclusions of the cost challenge taskforce and work with the industry to develop regional clusters that will bring significant economic benefits to both the north-east and Scotland.

Off the East Anglian coast, in my part of the world, an enormous development of offshore wind farms is taking place. The two industries—oil and gas and offshore wind—need to work together. There are encouraging signs that that is beginning to take place, as evidenced by the Oil & Gas Authority’s promotion of “Gas to Wire”, which involves the gas produced from gasfields being generated into electricity offshore, and then transmitted to shore via spare capacity in the subsea cables used for wind farms. The industry has a great future—it is important we do not squander it.

Oral Answers to Questions

Peter Aldous Excerpts

Tuesday 17th July 2018 Commons Chamber

The Secretary of State was asked—

[Peter Aldous (Waveney) (Con)]

1. What steps he is taking to support growth in the offshore wind sector.

[The Secretary of State for Business, Energy and Industrial Strategy (Greg Clark)]

Offshore wind has been a fantastic UK success story. Costs have halved and jobs have been created. In my hon. Friend’s constituency, the port of Lowestoft has been a construction base for the Galloper project. It will shortly become the base for East Anglia ONE’s 25-year operations and maintenance work. We want to build on that success. Our clean growth strategy said that we could see a further 10 GW of new capacity in the 2020s. There is the opportunity for additional deployment if that is cost-effective.

[Peter Aldous]

I am grateful to the Secretary of State for that answer and I will be at the opening of the East Anglia One operations and maintenance base on Friday in Lowestoft. Offshore wind, as he said, is bringing significant benefits to coastal communities, though to realise its full potential there is the need to ensure that local people and businesses have every opportunity to take part in the success story. Can he confirm that this will be the Government’s No. 1 priority in the forthcoming sector deal?

[Greg Clark]

My hon. Friend makes an excellent point. I hope that the event later in the week goes well; I am sure it will. He is absolutely right that part of the industrial strategy, in particular the local industrial strategies, is to make sure that the benefits of these investments are available to the local workforce, and I know that he will work very closely with new Anglia local enterprise partnership to ensure that that is the case.

--- Later in debate ---

[Greg Clark]

A big part of the White Paper is the commitment to a common rulebook. Our sophisticated supply chains allow goods to be sold throughout the European Union, and businesses have made it clear that they want to continue to do that after Brexit, which is why they have welcomed the White Paper so warmly.

[Peter Aldous (Waveney) (Con)]

T2. With the construction sector deal setting out several options to tackle poor payment practices, can the Secretary of State assure me that retention deposit schemes, as proposed in my private Member’s Bill, which has significant industry and cross-party support, will be given full consideration and, hopefully, Government backing?

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Richard Harrington)]

I have met my hon. Friend to discuss his Bill, and we fully understand that the practice of retention has caused problems for the construction industry supply chain. We are fully committed to tackling the issue, but any action we take needs to be robust, proportionate and evidence-based. We have listened and consulted, and we will shortly be publishing the response to a public consultation considering several options including a retention deposit scheme.

UK Oil and Gas Industry

Peter Aldous Excerpts

Thursday 19th April 2018 Westminster Hall

[Peter Aldous (Waveney) (Con)]

It is a pleasure to serve under your chairmanship, Mr Sharma. I congratulate my hon. Friend the Member for Gordon (Colin Clark) on securing the debate, and it is an honour and a privilege to follow the hon. Member for Aberdeen North (Kirsty Blackman).

In the last four years, the oil and gas industry in the North sea has come under considerable pressure, and tens of thousands of jobs have been lost. The industry has adapted and, while challenges remain, it continues to be a vital component part of the UK’s economic base. It still supports hundreds of thousands of jobs and delivers more than half the nation’s oil and gas. There are up to 20 billion barrels of oil and gas still to recover, and the UK supply chain continues to be a world leader, with unrivalled experience in maximising economic recovery from a mature base. The industry makes a consistent contribution of around £1 billion per annum in tax revenues, and the wider tax contribution from across the supply chain is immense.

The Vision 2035 document confirms that the extraction of oil and gas on the UKCS is not a sunset industry. It has a vital role to play in adding to the UK’s energy security, ensuring a smooth transition to a low-carbon economy and creating highly skilled jobs that we can take around the world.

I will first provide a short overview on the national outlook, its successes in the face of adversity and the immediate challenges that need to be addressed. I shall then focus on the southern North sea off the East Anglian coast, where there are specific and exciting opportunities, although work is required if their potential is to be fully realised for the benefit of both the local and national economies.

I am mindful that, in the southern North sea, different energy sectors operate side by side, cheek by jowl—particularly gas, offshore wind and electricity transmission. I pose the question: should they come together and work as one? I am perhaps running before I can walk in saying that, but I will outline a scenario for how those sectors can work more collaboratively for the benefit of industry, people and the places from which those people come.

Notwithstanding the considerable pressures that the industry has faced in recent years, and while in many respects it is still battered and bruised, it is generally in a good place and there is exciting potential ahead of us. In 2017, UK upstream deals exceeded £8 billion. The UKCS production remains stable, despite some start-up delays and unplanned outages. Average unit operating costs have halved, from around $30 per barrel equivalent in 2014 to $15 in 2017. There were at least five exploration successes last year, with a combined discovery of 350 billion barrels equivalent. Around £5.5 billion of post-tax cash flow was generated on the UKCS—more than in any other year since 2011.

There is considerable potential to build on those successes this year, with at least 12 new developments, worth around £5 billion of capital investment, expected to be sanctioned, and with production forecast to increase by 5%. Set against that backdrop, 62% of supply chain companies surveyed by Oil and Gas UK have a positive outlook for 2018. That said, considerable challenges must be addressed if that potential is to be realised. Just 94 wells were opened up on the UKCS in 2017—the smallest number since 1973. Development drilling has fallen by around 45% in the past two years, with supply chain revenues falling by more than £10 billion from 2014. Despite the cost improvements for the supply chain, average EBITDA—earnings before interest, taxes, depreciation and amortisation—fell by £1.7 billion from 2014-16. Moreover, cash flow continues to be a major concern.

Even if all the fields discovered last year were developed, the reserve replacement ratio of 0.6 is not enough to sustain production. The fall in investment from 2014-17 means that production decline is likely to increase in the early 2020s. Sustaining efficiency gains is vital if the basin is to continue to attract investment. Moreover, it is important to improve exploration success and the commercial viability of existing discoveries.

A particular challenge that the industry faces, which we have heard about quite a lot today, is to reinvigorate the supply chain and to make it more resilient. It is important that we tackle this task; not to do so would be irresponsible. A strong supply chain will help sustain the industry and will open up significant export opportunities. Operators need to work more collaboratively with their supply chain businesses—sharing information, encouraging innovation and looking at new working practices. Addressing this challenge should be part of the sector deal, and the Oil and Gas Authority and the Government should work with the industry to help promote a new approach to collaborative supply chain working. Much can be learned from other industries, such as car manufacturing in the north-east and the west midlands.

Since 2012, the Government have generally worked well and closely with the sector, improving the fiscal regime and thereby helping to attract inward investment. That will continue as the driving investment programme is delivered. However, while Government policy is supportive, a number of decisions by HMRC—as the hon. Member for Aberdeen North touched on—have been taken without full and proper consideration of the impact on the oil and gas industry.

A particular example, as the hon. Lady mentioned, is HMRC’s decision in January to end long-standing exemptions for shipwork end-use relief from July of this year. For the oil and gas sector, this exemption—known as CIP33—provides relief from customs duties for equipment that is destined to be used in offshore installations, such as spare parts. The decision was taken at short notice, with no consultation with the industry.

[Kirsty Blackman]

The other thing that particularly concerned me about this was that I received a letter from the Financial Secretary to the Treasury that directly contradicts the decision taken by HMRC, which confused the issue further. The two appear to be giving totally different guidelines on this. It would be great to have clarity.

[Peter Aldous]

I thank the hon. Lady for reinforcing that point. It is difficult to attract investment, and the Government have worked very hard to make this basin one of the most attractive in the world to invest in, but these sort of noises coming out of HMRC reverberate around the world. A solution needs to be found very quickly.

While much of the industry’s focus in recent decades has been on Scotland, when exploration started on the UKCS in 1960s it did so in the southern North sea. That area is now on the verge of a renaissance, with the opportunity of reinventing itself as an all-energy basin, which, with the right policies in place, can play a significant role in the UK’s future energy strategy.

The southern North sea is at a critical juncture. For more than 50 years, the basin has developed and delivered strong gas production through a diverse network of offshore platforms, pipelines and onshore terminals. The basin has been well exploited, and the opportunity to identify and develop large, landmark discoveries is increasingly limited. There is potential with both marginal pools and tight gas, but they are increasingly expensive and complex to access, the technical and commercial risks are high and opportunities can often be quickly disregarded as uneconomic.

The challenge for the southern North sea is now to search for innovative business and technical solutions. This challenge is made more difficult by depressed commodity prices, aging infrastructure and increasing unit transportation costs, as production from existing developments continues to decline. The selection of projects is based on their ability to have a big impact, their prospect of success and the potential to achieve it within a reasonable timescale.

There are currently five priorities in the southern North sea. The first is to realise the full potential of decommissioning opportunities for the benefit of the East Anglian region, which I will come on to in more detail in a moment. The second is to unlock potential tight gas developments. The third is to realise the full potential of the synergies between renewables and oil and gas. The fourth, in the light of Brexit, is to find the best way to work across borders with the Dutch sector. The final one is to minimise production losses due to salting.

It is estimated that 40 platforms in the southern North sea are to be decommissioned by 2022; as I said, it is the oldest part of the basin. That business is worth several billion pounds, with significant job safeguarding and enormous earnings potential for the East Anglian region. However, there is a real and present danger that we will lose much of that work to our European neighbours, where port infrastructures have received investment from their Governments.

East Anglia does not have a level playing field on which to compete with our main competitors in the southern North sea—as I said, on the other side of the sea. Locally, the councils, the New Anglia local enterprise partnership and other supporting agencies, such as the East of England Energy Group, stand ready to support the industry, but there is a need for central Government to get involved and back them if we are to realise for the region the full potential of that significant opportunity.

We need a decommissioning challenge fund similar to that in Scotland, to help to establish a cluster of expertise, as is happening in Dundee with the Tay cities deal. We need to have an aspirational UK local content policy, as already happens with offshore wind. That would help to ensure a return to UK plc, as the Government are already funding between 50% and 75% of UK decommissioning. It would focus operators’ attention on using the local supply chain and would help to support the supply chain action plans that have recently been introduced for decommissioning projects. As I said, EEEGR is willing—it is indeed eager—to lead and to host a taskforce to spearhead that initiative. It would be match-funded by other local agencies, although it would need funding from central Government to establish and then help to maintain it.

The other opportunity in the southern North sea with exciting potential is closer collaboration and working between the oil and gas, offshore wind and offshore transmission sectors. If that can be achieved, a significant contribution can be made to addressing the UK’s ongoing energy trilemma of keeping costs to consumers affordable, ensuring security of supply and smoothing the transition to a low-carbon economy. We need to integrate energy production activities—for example, in respect of oil, gas and electricity—and share common infrastructure for distributing energy. Doing that will achieve significant economic benefits. The co-location of gas-powered electricity generation with gas production hubs would help to maximise the economic recovery from gas fields. The better utilisation of common infrastructure would improve the economic value of both the associated renewable and the hydrocarbon production assets. Collaboration between those sectors is slowly improving and could be accelerated by facilitating and enabling Government policies.

Two main issues are inhibiting more effective collaboration between the sectors. First, the regulatory regimes are quite separate; some of the regulators are not used to working together and they have different policy objectives. Secondly, cross-sector collaboration is not incentivised, as Government policy is highly sectorised.

A possible starting point for improving the situation and promoting cross-sector collaboration would be consideration of the UKCS as an energy basin, rather than a series of separate energy sectors. That integration could be the specific responsibility of the Department for Business, Energy and Industrial Strategy, albeit delivered through parties such as the OGA, National Grid, Ofgem and the Planning Inspectorate.

The three sectors would also benefit from incentives to work more collaboratively. Sector deals provide an opportunity to make it more attractive for the different sectors to work together, at both the developmental and the operational stages. That could include financial support for cross-sector innovation, improved regulatory cohesion, facilitating the movement of workforce skills between the sectors, and research and development. It may well be that a pilot could be set up for such innovative cross-sector working in the North sea. I would welcome the opportunity to discuss that with my right hon. Friend the Minister, along with industry representatives.

During the past 50 years, oil and gas extraction on the UKCS has brought enormous benefits to the UK. It has created hundreds of thousands of well-paid, highly skilled jobs, attracted significant inward investment from all over the globe and provided a huge annual dividend to the Exchequer. The past four years have probably been the most difficult in the basin’s life, yet notwithstanding a great deal of pain and personal anguish, it has come through this tough period in better shape than could reasonably have been hoped for and is ready to continue to play a full and leading role in the post-Brexit economy.

Since 2012, the Government have given the industry a very fair hearing and backed it, both fiscally and with the creation of the Oil and Gas Authority. Exciting opportunities lie ahead. It is important that the spirit of co-operation in the oil and gas supply chain continues, improves and, as I have outlined, extends to cross-sector working. It is said that if you go to any oil and gas basin around the world, you will hear Scottish, Geordie, Suffolk and Norfolk accents. We must ensure that that continues for at least 50 or—dare I say it?—100 more years.

Domestic Gas and Electricity (Tariff Cap) Bill

Peter Aldous Excerpts

2nd reading: House of Commons
Tuesday 6th March 2018 Commons Chamber

[Peter Aldous (Waveney) (Con)]

Going through the briefings that I have received from various organisations representing both consumers and suppliers, it is quite clear that there is universal recognition of the problem that the Bill seeks to address: market failure. There is almost universal support for the Bill on those grounds, and for that reason I am also extremely supportive of it. However, as we have heard, it is important to say that this Bill is not a panacea for all our ills and that the hard work does not stop here.

Citizens Advice is supportive of the Bill and sees it as a vital first step towards ensuring that consumers on default tariffs are no longer ripped off. Scope highlights the fact that disabled customers face higher energy costs for reasons related to their impairments and conditions, and it is of the opinion that the Government should also put in place a long-term plan to address the barriers that disabled customers face. First Utility, a challenger supplier, is also supportive, but it highlights the need for serious consideration of the level at which the price cap is set, for a level playing field for all suppliers and for consumers to become more active players in the market instead of them sitting back and becoming more passive. uSwitch has concerns in principle and believes that any price regulation should be light touch and in place only for the minimum time necessary.

I sense that we are moving in the right direction, but I do have one concern nagging me at the back of my mind about the possible unintended consequences. I hope that the Minister will be able to address my worry about a negative knock-on impact on investment in the energy supply sector. While I recognise that there is a strong element of “They would say that, wouldn’t they?” I take note of the worry raised by both the CBI and Centrica that the CMA should consider appeals against Ofgem’s decisions, rather than them being pursued through the courts by way of a judicial review, as the Bill currently proposes.

A revolution is taking place in the energy supply sector as it is decarbonised and decentralised and as more renewables come on stream. That welcome process requires an enormous amount of investment, and the Treasury has identified over £250 billion of energy investments that will be made in the early 2020s. We need to ensure that that investment keeps taking place in the UK. Such investment is beginning to bring significant benefits to East Anglia and my Waveney constituency, with numerous projects planned in the southern North sea, including the opening up of marginal gas fields and decommissioning. In offshore wind, 11 wind farms are either operational, under construction or planned off the East Anglian coast, with a total capacity of 8.7 GW. As I chair the all-party parliamentary group on energy storage, I should also highlight the exciting opportunities emerging in that sector that will help to decarbonise not only the energy sector, but the transport sector, that will empower British households to become generators of their own electricity and that will help to make our industrial base more competitive as cheap renewables are more easily deployed.

We are on the cusp of an exciting future that could bring significant benefits to the UK and create thousands of jobs, often in parts of the country where regeneration is badly needed. That requires enormous investment and, up to now, Britain has been an attractive destination for such investment due to its straightforward regulatory framework and limited state intervention. Everyone knows where they stand, and it is vital that we do not lose that hard-earned reputation.

The appeals process needs to be carefully designed and implemented to allow for continued investment and consumer engagement. Proper appeals are important to ensure that regulatory decisions are well founded. The appeals processes in sector-specific regulated industries show that regulators make errors. Ofgem is a regulator with wide-ranging powers that can make decisions that have significant consequences both for consumers and for companies operating in energy markets. Robust checks and balances are needed to ensure that the regulatory decision-making process is both rigorous and careful.

In making decisions, investors are mindful of the overall integrity of the regulatory process, which includes a proper right of appeal. There is a worry—as we heard from my hon. Friend the Member for Fylde (Mark Menzies), who is currently not in his place—that the Bill as drafted is damaging from that perspective. That said, I recognise and take on board the significant amount of work that the Select Committee carried out in its pre-legislative scrutiny. The research and evidence it received suggests that this is not a problem.

I have a slight nagging doubt about unintended consequences. I am mindful of an article in the Financial Times yesterday that painted a scenario of increasing investor uncertainty that, in turn, could lead to higher costs of capital and, ultimately, higher costs to British energy bill payers.

I would welcome from the Minister, either in her summing up or later in correspondence, an assurance that there has been due diligence and an impact assessment confirming that the Bill will not lead to a downturn in the investment that is currently being unleashed in the energy supply system and that is beginning to bring significant benefits to many parts of the UK.

Fireworks

Peter Aldous Excerpts

Monday 29th January 2018 Westminster Hall

[Peter Aldous (Waveney) (Con)]

It is a pleasure to serve under you chairmanship, Mr Walker. I congratulate the Petitions Committee and the hon. Member for Clwyd South (Susan Elan Jones) on their roles in securing the debate.

Several constituents have written to me to ask me to participate. Generally I was of the view, beforehand, that the current legislation strikes the right balance, which accords with the Government’s response to the petition. However, in view of the concerns that were put to me, I obtained the views of Suffolk County Council, which is responsible for public safety. The issues that I am going to highlight are the ones that it has brought to my attention, and I want to thank Nigel Howlett, the council’s senior fair trading officer. He leads on fireworks and explosives and is also the east of England trading standards authority’s representative on the fireworks enforcement liaison group.

The sale and use of fireworks is an emotive issue that concerns many people. There are four areas of concern: noise, safety, unsafe storage and sales, which I shall briefly consider in turn. First, as to noise, while there are restrictions on letting off fireworks, the biggest issue is enforcement. It is not a high priority for most police forces, and unless someone is caught in the act, it is probably impossible to identify where and by whom the firework was let off. In tests conducted by the National Trading Standards Board safety at ports and borders team in 2016, 50% of the fireworks tested failed the noise tests. However, those tests are expensive to carry out. They were previously funded by the Health and Safety Executive and Health Service Laboratories, but as no funding was available this year, no tests have been conducted. If there were specific funding for the testing of fireworks, it is possible that some of the noisier ones could be removed from the market.

With safety, the main problem, again, is one of expense, in that the cost of fully testing fireworks can run into several thousand pounds, which makes it impossible for many local authority trading standards departments to carry out tests. With regard to accidents arising from fireworks, while the NHS publishes data on hospital admissions and their nature and cause, it does not appear that there is any other record of accidents in relation to their cause. It is therefore difficult to determine whether accidents are caused by innocent use or misuse. Every year there are reported incidents of injuries attributed to fireworks, many of them leaving permanent scars or involving the loss of limbs. However, since 2010 the UK has not reported any unsafe fireworks to the European RAPEX rapid alert system for non-food products, while during that time there have been 113 reports from the rest of the EU. It is possible that many of the injuries could be down to misuse—particularly those involving animals, and incidents occurring in public places—and there are videos online clearly showing people misusing fireworks, although it is impossible to know whether they were purchased from licensed premises, or whether they were bought by people under 18, the legal age for purchasing fireworks.

There is also potential for injury from not following the instructions printed on the fireworks. One of those instructions relates to the safe distance that spectators should stand from fireworks. It is natural for people to want to buy the biggest and best fireworks in their budget; yet many of those bigger fireworks will be in the F3 category and subject to a safety distance of 25 metres.

[Dr Drew]

The hon. Gentleman obviously has better eyesight than mine. The printing is often very small and sometimes in another language. The idea that people could make sense of it is somewhat arbitrary.

[Peter Aldous]

The hon. Gentleman makes a good point, which I was not going to raise, but it is pertinent, and it is right to make it, so I thank him.

There do not appear to be figures for the average length of the UK garden, but it has been suggested that the typical British garden is 50 feet long. If that is correct, many modern houses will not have gardens of the required size to ensure the safety of spectators when F3 fireworks are let off. Obviously, the consequences, should anything go wrong with the fireworks, are likely to be greater the closer the spectators are to them.

Trading standards and the fire service can have control over the storage arrangements at sites only if they are aware of those sites, which means only if they are licensed. Recent guidance to those bodies has encouraged them to be more proactive about storage conditions and quantities at licensed premises. In Suffolk the number of small independent retailers storing fireworks has dropped considerably in the past 10 years. It is unclear whether that is because of a lack of demand or an increase in the number of major supermarkets selling fireworks. Also in the county, trading standards continues to find minor issues with storage arrangements, with the occasional more serious problem being found on unannounced inspections. However, there have not been any major storage issues resulting in prosecution since 2010. In general, Suffolk County Council believes that the controls and powers that are in place are appropriate and sufficient to ensure that where unsafe storage issues are found they can be rectified without the need to resort to more formal measures.

In recent years the number of allegations about sales via social media such as Facebook has increased nationally and in Suffolk. Such sites are difficult to control as they are often promoted through private selling groups and thus they are not visible to all users. The sites often require investigators to “friend” the seller or join the group to determine how or where the fireworks are being sold. The Regulation of Investigatory Powers Act 2000 requires local authorities to obtain approval from magistrates courts before formal intervention can be contemplated, and that makes investigating allegations difficult, especially given the short time constraints of the firework season. The control of sale is currently limited to restrictions on age and on period of sale—generally between 5 October and 5 November—and controls on the quantity supplied. In the UK we limit the sale of F2 and F3 fireworks to those aged over 18. In many parts of Europe F2 fireworks can be purchased by anyone over 16.

It is also appropriate to raise an issue that links sales, storage and safety. It concerns the current exemptions for the storage of less than 5 kg net explosive content. I am advised that in some places in the north of England it has been reported that some businesses are trying to get round the need to hold a licence by restricting their onsite storage to less than 5 kg NEC while keeping their remaining stocks hidden. There is concern that some fire authorities would therefore not know of the existence of fireworks on a property, which could put both firefighters and the public at risk. Some in the fire service would like to remove that exemption, but that would need careful consideration, because if it were not implemented properly many other businesses that store less than 5 kg NEC perfectly legitimately could be affected.

Suffolk County Council also makes suggestions on how existing regulations could be improved. First, it touches on insurance. The issue of public liability insurance was raised by my hon. Friend the Member for Stafford (Jeremy Lefroy) in a debate on 18 November 2016, when he highlighted the case of a fire at SP Plastics in Stafford in 2014. The business suffered financially due to neither the individual business nor the licensee having appropriate cover in place. While health and safety legislation does not require public liability insurance, it is now recommended that those manufacturing or storing fireworks should hold it. That advice has been added to the Health and Safety Executive website and to the “Guidance to Applicants” section on the licence application form.

Suffolk trading standards receives information from Her Majesty’s Revenue and Customs on all firework imports. That information is then disseminated to the relevant district council and the HSE where the consignment is destined. While in theory that allows the council and HSE to monitor the amount of fireworks being stored at their licensed sites, the information provided by HMRC can be sketchy at times and there is little or no enforcement of the requirements. Even where the information is provided, many authorities have suffered cuts to their budgets that restrict their ability to monitor imports adequately.

I sense that I have probably stretched my time a little. I have more to say, but I will come to my conclusion, which is that the Government should adopt a systematic approach to the collection of the statistics. Having considered the extremely helpful information put together by Nigel Howlett at Suffolk trading standards, I believe that, on balance, there is a case for amending the current regulations, although it is vital that a full consultation and regulatory impact assessment take place before any changes are made. That should include all those businesses in the supply network; we must remember that the vast majority of them are responsible, and it is vital that their views are heard. Thank you for bearing with me, Mr Walker.

[Mr Charles Walker (in the Chair)]

I thank the hon. Gentleman for his self-discipline. Others had been shorter, so he was not in danger of eating up anyone else’s time.

Oral Answers to Questions

Peter Aldous Excerpts

Tuesday 12th December 2017 Commons Chamber

[Greg Clark]

The hon. Lady is right in identifying that there are big regional disparities in productivity, and the long-term purpose of the industrial strategy is to work together with our leaders right across the country, with industries, and with universities and colleges to make sure that the drivers of improved productivity are in place. I know that the Government in Wales have participated in and endorsed the approach that we are taking, and I take her endorsement of our direction as further encouragement.

[Peter Aldous (Waveney) (Con)]

15. What steps he is taking to support the offshore wind industry.

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Richard Harrington)]

The UK is the world’s largest offshore wind market and will remain so for the foreseeable future. The contracts for difference announced in September will support more offshore wind deployment in the UK than Denmark and the Netherlands have in their last four auctions combined.

[Peter Aldous]

I am grateful to the Minister for his reply. Offshore wind has been of significant benefit to my constituency, but will he outline the work that the Government are doing to ensure that UK fabricators, such as Sembmarine SLP in Lowestoft, have every opportunity to participate in this great British success story?

[Richard Harrington]

I am delighted that companies in Lowestoft, such as Sembmarine, are benefiting from offshore wind projects off the east coast. I met several of them earlier this year, thanks to my hon. Friend’s invitation, at the East of England Energy Group event in October. Developers must submit a supply chain plan before entering into a CfD auction.

Oral Answers to Questions

Peter Aldous Excerpts

Tuesday 7th November 2017 Commons Chamber

[Margot James]

I would like to reassure the hon. Lady that the new social care compliance scheme will give providers up to a year to identify what they owe to workers and will be supported by advice from HMRC. Employers who identify arrears at the end of the self-review period will have three months to pay workers, so the scheme is designed both to support workers and to ensure the continuation of the crucial services that providers perform.

[Peter Aldous (Waveney) (Con)]

The Government’s new interim compliance scheme, announced last week, unfortunately adds to the uncertainty facing the social care sector. May I urge the Minister to do all she can to ensure that, as quickly as possible, the Government get back round the table with the sector to find an acceptable long-term solution?

[Margot James]

I assure my hon. Friend that we are working very hard across Government with the Department of Health and the Department for Communities and Local Government to continue our discussions with the Treasury about possible solutions to the long-term viability of certain providers.

Carbon Capture and Storage

Peter Aldous Excerpts

Thursday 19th October 2017 Westminster Hall

[Peter Aldous (Waveney) (Con)]

It is a pleasure to serve under your chairmanship, Sir David. I congratulate my hon. Friend the Member for Middlesbrough South and East Cleveland (Mr Clarke) on securing this debate. His timing is spot on, given the publication last week of the clean growth strategy.

We last held a debate in this Chamber on carbon capture and storage on 24 January. From my perspective, the outcome of that debate was disappointing, but nine months on, I believe that we are in a much better place. A framework is beginning to emerge within which carbon capture and storage in the UK can become a major industry, and we are learning lessons from the aborted second CCS competition.

I believe that the Government are studying closely the proposals in the noble Lord Oxburgh’s report of September 2016. I was on his advisory committee, which heard the evidence, drafted and approved the report, and I believe that it is a good blueprint for the future. We see carbon capture and storage as fitting in well with the 10 pillars of the Government’s industrial strategy; it ticks all the boxes. Finally, the publication last week of the clean growth strategy provides the much-needed road map that business is looking for in order to invest time and money in carbon capture and storage.

Invariably in debates such as this, Back-Bench MPs have an ask of the Government, which we look to the Minister to take on board and respond to. However, from my own perspective, with the publication of the clean growth strategy last week, the Government have, to a large degree, shot my fox. I shall briefly set out the case for CCS and why it is so important that it is at the heart of the UK’s industrial strategy.

The UK has legally binding commitments, set out in the Climate Change Act 2008, to reduce carbon emissions by a minimum of 80% from 1990 levels by 2050. As the Intergovernmental Panel on Climate Change and the Committee on Climate Change have both pointed out, if we do not deploy CCS, it will be very difficult to meet that target cost-effectively.

The UK has a unique selling point that means we should be at the vanguard of the CCS movement. It is the thing that most colleagues in this room have in common, in that our constituencies adjoin it: the North sea. I believe that your seat also adjoins it, Sir David. In the North sea and the UK continental shelf, the UK has its own large, safe and secure offshore CO₂ storage vessel, in the rocks deep beneath UK territorial waters. It provides us with the least-cost form of storage on an industrial scale. Over the past 50 years, as a result of the development of the North sea oil and gas industry, the UK has acquired enormous expertise and experience that can be harnessed to deliver CCS.

[Ross Thomson (Aberdeen South) (Con)]

Will my hon. Friend join me in acknowledging and welcoming that the University of Aberdeen has world-leading experts at the forefront of research into carbon capture and utilisation? It is reflected in the fact that Aberdeen was the only UK university whose entry into the Carbon XPRIZE was accepted. It is developing technology to help create a solution to the damage that CO₂ can cause, such as using what is left as materials for furniture and so on. Does he welcome and acknowledge that?

[Peter Aldous]

Yes, I do. I am happy to acknowledge it. We have enormous, significant expertise across the UK. I am sure that all of us in this Chamber can highlight institutions in or near our constituencies that can and should put us at the vanguard of the low-carbon economy and its global development over the next few years.

As I was saying, the UK has acquired enormous expertise and experience in the oil and gas sector, which can be used to deliver CCS, create jobs and—most importantly for the Government—generate revenue for the Exchequer. However, as the hon. Member for Redcar (Anna Turley) highlighted, time is of the essence. We need to get on with it. As a result of the lower oil prices that have prevailed for the past three years, the North sea is going through a period of transition and restructuring. We must move quickly to use assets that otherwise might be prematurely decommissioned.

As we have heard, CCS has an important role to play in delivering growth across the whole UK and in bringing jobs to coastal communities, which in recent years have faced particular challenges with the decline of traditional industries. There are areas where clusters of energy-intensive industries are based—such as Scotland and the north-east on Teesside, as the hon. Member for Redcar highlighted—which could benefit significantly from CCS. That might not be the exact situation in my own constituency, but we have businesses in East Anglia that are part of the North sea supply chain, whether in oil and gas or in the emerging offshore wind sector, and that would benefit from the development of CCS.

The industrial strategy highlights the importance to the UK of cultivating world-leading sectors and being global pioneers in industries in which we have an advantage. CCS is one of those industries. We have the resources and the skills. It is an industry in which we can not only secure inward investment but, in due course, create significant export opportunities, building on the expertise that my hon. Friend the Member for Aberdeen South (Ross Thomson) mentioned a minute ago.

On the resources and skills required for CCS, Norway is a country with which we have a great deal in common.

[Mr Simon Clarke]

On that point, we have had disappointing news from Norway this week. I spoke to the Teesside Collective to discuss what was going on there. It is important to put it on record that although the Norwegians have retreated somewhat in the scope of their ambition for when things will happen, they have not pulled out of CCS altogether. Effectively, they have found themselves in a minority Government situation—we can perhaps empathise—and that has made certain investment decisions rather harder to achieve, so they are looking to make them on more of a case-by-case basis. That is why the news has come out of Norway in the way that it has.

[Peter Aldous]

I am grateful to my hon. Friend for that intervention. I talked this morning to representatives of Statoil, who emphasised that they are proceeding with CCS and that the situation is, dare I say, a fact of life with minority Governments.

We have a great deal in common with Norway. The Norwegians are also taking forward CCS, and they are slightly ahead of us. However, I emphasise that it is not a question of CCS taking place either in the United Kingdom or in Norway; it should be in both. We need to collaborate between our two countries to ensure that that takes place on the best possible terms and at the lowest possible price.

On that point, cost is the elephant in the room. CCS has foundered on this particular rock in the past, and I am sure that there are some who say that it will do so again. However, I do not believe that that will be the case. The Oxburgh report showed that in the right circumstances, CCS can be delivered at £85 per megawatt-hour. It is also important to highlight what has happened in the offshore wind sector. Costs have decreased in the past three years from around £140 per megawatt-hour to just under £60. That has been achieved by the Government providing the framework for the delivery, and by the industry getting on with the job and building, rather than just talking.

With the clean growth strategy, the Government have provided a framework for CCS to develop. I look forward to more details from the Minister about the road map for turning this exciting vision into a practical reality. Doing so will not only make the world more resilient to climate change, but transform places and—most importantly —people’s lives.

Green Investment Bank

Peter Aldous Excerpts

Wednesday 25th January 2017 Westminster Hall

[Peter Aldous (Waveney) (Con)]

It is a pleasure to serve under your chairmanship, Mr Owen, and I congratulate the hon. Member for Edinburgh West (Michelle Thomson) on securing the debate; her timing is spot on. I entirely support the principle of privatising the Green Investment Bank, but that needs to take place on terms that are in the whole country’s best interests, and on a basis that will maximise the leveraging of investment in this very important sector.

The Green Investment Bank is a success story. Since its launch in 2013, it has leveraged £10 billion-worth of projects from a £2.8 billion public stake, playing a particularly important role in the offshore wind sector. It successfully kick-started the Galloper wind farm off the Suffolk coast, securing external investment for a project that will bring jobs both to Waveney and across East Anglia.

Since the sale process started a year ago, times have changed. We are now in a very different world and it is appropriate to pause and to consider whether the sale is taking place on terms that are in the best national interest. Brexit has led to a refocus on the UK’s industrial strategy, with the publication on Monday of the Government’s Green Paper. The pillars of the strategy include the need to upgrade infrastructure; to deliver affordable energy and clean growth; to drive growth throughout the country; and to rebalance the economy. The Green Investment Bank has played a leading role in all those areas, and it is important that it continues to do so, in particular as complementary investment from the European Investment Bank is, as we heard, almost certain to disappear completely.

When the Government circulated the bid documents last year, two possible options were suggested: a full privatisation and the retention of a 25% stake. The latter course should be pursued, because it would be more valuable for the bank, for UK plc and for the taxpayer. The stake would help to target important infrastructure spending; it would enable the Government to hold the bank to its mission of mobilising investment in the UK’s green economy and of maximising its green impacts; and, moreover, that sector of the economy is dynamic and entrepreneurial, so the stake is highly likely to increase in value. In summary—I have been very brief—in a short period of two years the Green Investment Bank has brought great benefits to the UK, and it is vital to the future of the country as a whole that it continues to do so.