Oral Answers to Questions

Debate between Peter Aldous and Graham Stuart

Tuesday 27th February 2024 Commons Chamber

[Peter Aldous (Waveney) (Con)]

T9. Offshore Energies UK’s industry manifesto highlights the once- in-a-lifetime opportunity that a home-grown energy transition provides to bring investment and jobs to communities all around the UK. This requires close collaboration between the private and public sectors. Can Ministers confirm that the Government are absolutely committed to such a partnership?

[Graham Stuart]

I can. What the sector does not need, of course, as OEUK has itself set out, is the tens of thousands of job losses that would be driven by the ideological and climate-damaging obsession of the right hon. Member for Doncaster North (Edward Miliband) with ending new UK oil and gas licensing.

Contracts for Difference Scheme

Debate between Peter Aldous and Graham Stuart

Thursday 19th October 2023 Westminster Hall

[The Minister for Energy Security and Net Zero (Graham Stuart)]

It is a pleasure to serve under your chairmanship, Dame Angela. I join others, and not least on this occasion the Scottish National spokesperson, the hon. Member for Coatbridge, Chryston and Bellshill (Steven Bonnar), in applauding his favourite Unionist—sitting behind him there—the ever-present, ever-active and ever-decent hon. Member for Strangford (Jim Shannon).

As the hon. Member for Strangford knows, and as he has mentioned, he and I have communicated extensively over the past year or so on the question of extending the GB contracts for difference scheme to Northern Ireland. He has asked questions in Parliament about this issue, most recently last month. I believe we know each other’s positions very well by now. Let me say at the outset that I admire his tenacity in continuing to raise this matter with me, which I know he does with the best interests of his constituents and the people of Northern Ireland in mind. However, I am afraid I have to say to him again that I do not believe that what he proposes is feasible—although I understand why he proposes it and why he hopes to find a solution—and nor would it lead to renewables or their associated benefits being delivered faster for Northern Ireland, as he hopes. I will explain why I believe that shortly.

First, though, to set the context, I would like to say a few words about the CfD scheme. The scheme was introduced in 2014 and is the Government’s main mechanism for supporting new low-carbon electricity generation projects in Great Britain. CfDs are awarded through competitive auctions that, from this year, are held annually. The lowest-priced bids are successful, which drives efficiency and cost reduction and is a low- cost way to secure clean electricity.

It is an interesting—but not necessarily surprising—fact that in every single year that the CfD has existed, industry has said that the prices we have suggested are too low, so this year is no different. I suppose it is also unsurprising that His Majesty’s Opposition should always speak up for the producer interest and be so indifferent, if not deaf, to the interests of the consumer, around whom we should build policy.

Winning projects are guaranteed a set price per MWh of electricity for 15 years, indexed to inflation. That provides income stabilisation, making projects that have high up-front costs but long lifetimes and low running costs attractive to investors and lenders. Importantly, the CfD also protects consumers when electricity prices are high, as it did last year. Understandably, this Conservative Government are extremely proud of the CfD scheme and its effectiveness, in not only securing clean generation but doing so at the lowest possible price to consumers—that is what has triggered the 70% reduction in costs for offshore wind. As I say, industry has always suggested that it wants to be paid more, and we have heard from His Majesty’s Opposition that they would be delighted to do so at the expense of ordinary consumers.

It was in the light of the challenge of setting the parameters of each CfD that we decided to move to an annual system. The hon. Member for Manchester, Withington (Jeff Smith)—he is not my favourite Unionist, but he is one of my favourite members of the shadow team—seems to have been deliberately innumerate. He will be aware that AR4 covered three years, and AR5 was the first annual auction. Like me, he will be able to divide by three the total generation that was in AR4, and to divine that in terms of annualised generation AR5 was the most successful round of the CfD that has ever existed. I would even gently chide my always loyal and fair colleague, my hon. Friend the Member for Waveney (Peter Aldous), for buying into the idea: at a time when other countries’ rounds have failed, we generated 3.7 GW. We supported geothermal and tidal and, I think, saw a near doubling of onshore wind.

That is not to say that I do not regret, and have not previously publicly regretted, the fact that in a highly turbulent geopolitical situation the window for offshore wind did not ultimately allow bids to come in from industry. However, that was one of the key reasons why we decided to move to an annualised system, so that we could quickly move forward. Of course, unlike a solar scheme, for example, these schemes are not things that are brought up quickly: they are developed over many years, with parameters informed by the behaviour of the industry.

We always gather the data each year from the industry—companies sign non-disclosure agreements with us and we commission external research—but the most important of all the data we use is behaviour in auctions, because we need that real-world data to inform the parameters we set. It is exactly that process—unchanged but better informed by behaviour in AR5—by which we will set AR6’s parameters, and I am confident that it will be successful.

[Peter Aldous]

rose—

[Graham Stuart]

I see that, having been chided, my hon. Friend is looking to intervene on me.

[Peter Aldous]

I was listening with interest to what my right hon. Friend was saying. To a degree, I hear what he says, but does he not agree that with offshore wind not being successful in AR5, the costs go up in future allocation rounds? It was ready to go, and there were economies of scale that it was ready to take full advantage of, but it was not able to go. The feedback that I am getting from industry is that these things cannot take place in a vacuum, ignoring what is going on throughout the world. Does my right hon. Friend not agree with me that it would have been much better if offshore wind had been successful in AR5?

[Graham Stuart]

Having been chided, my hon. Friend is of course—quite rightly, and characteristically—straining to justify his position, and I have a lot of sympathy with it. I have said that we would ideally have got the window in a way that better matched that reality. But there are reasons for having the annual auction. We always come up with a window that industry says is not enough. We have managed to bring down the costs by 70%. It is hard to overestimate the importance of this. This country, the CfD mechanism and, I have to say, this Government have transformed the economics of offshore wind—not just to the betterment of UK consumers, but to the benefit of the whole world. It is only because of what has happened here with this approach, which every year is in a state of tension with industry, that we have been able to show and reveal these prices. We are now able to export our expertise to the north-east of the United States, to the Gulf, to Taiwan—all over the world—as a result of this process.

I said that I wished we could have better attuned the window to the realities—they changed even after we set the prices in November. That was precisely why we decided on having an annual auction. To put it another way, if what someone offers is always accepted, they might want to consider whether they are overpaying. That is not to say that I in any way revel in the fact that we did not get offshore wind in that round, but I am glad that we had the foresight to move to an annual system and that we are able so swiftly to move on. It will just be the middle of next month when we set out the core parameters for the next round, which will happen next year.

Green Energy: Ports

Debate between Peter Aldous and Graham Stuart

Wednesday 18th October 2023 Westminster Hall

[Peter Aldous]

Offshore wind champion Tim Pick has highlighted some of the obstacles that need to be overcome for the industry to realise its full potential. Some of that focuses on ports. Will the Minister provide a bit more detail on the Government’s response to his proposals and recommendations?

[Graham Stuart]

We are working with industry through the Offshore Wind Industry Council, of which I am a co-chair, to consider Tim Pick’s wide-ranging recommendations, including developing an industry growth plan. Again, this is to do with supporting the development of the UK supply chain and, as we do this massive deployment, trying to ensure that as much as possible of the industrial heft of that can be delivered through the UK and UK jobs. That work is ongoing, and we will keep going.

The hon. Member for Strangford will be aware that Northern Ireland has a target for 1 GW of offshore wind from 2030. SBM Offshore and Simply Blue are developing FLOW projects in Northern Ireland. Likewise, Simply Blue is developing the Erebus project in the Celtic sea.

I was asked about meetings. Notwithstanding any transport and logistical challenges, I would be delighted to come to Wales. I must pay tribute once again to my right hon. Friend the Member for Preseli Pembrokeshire, who is relentless, albeit always cheerful and well-considered, in promoting the need for understanding and engagement with his part of the world and the opportunities that offers for the whole of the UK in contributing to the global challenge on climate change and, most importantly, in delivering a more prosperous and better future for constituents in his part of the world. Thank you, Mrs Cummins, for chairing the debate.

Offshore Wind Contracts

Debate between Peter Aldous and Graham Stuart

Tuesday 12th September 2023 Commons Chamber

[Graham Stuart]

I thank the hon. Gentleman for revealing the true face of where the Labour party is going. We can go back to the days when we had hardly any renewables, and we can allow Great British Energy, or whatever Labour is going to call its creature, to squeeze out private investment and destroy the most successful renewables market in Europe, and to destroy this Government’s progress on tackling the parlous position left behind by the right hon. Member for Doncaster North and his friends. We will continue to be the world leader in cutting emissions, but not if we move to the state-run, left-wing obsessions of colleagues like the hon. Member for Brighton, Kemptown (Lloyd Russell-Moyle).

[Peter Aldous (Waveney) (Con)]

Offshore wind plays, and will continue to play, a key strategic role in enhancing energy security, achieving net zero and revitalising coastal communities such as Lowestoft. To get back on track, can my right hon. Friend confirm that the criteria applying to round 6 will take account of current economic realities, that appropriate fiscal measures are being considered ahead of the autumn statement and that specific focus will be given to enhancing local supply chains?

[Graham Stuart]

I thank my hon. Friend, who has been such a consistent champion not only for the power of renewables to meet our environmental challenges but for the economic benefits that come from them. He is absolutely right that the nature of the CfD system is that it learns from the previous auction round, which is the most real data of all, and uses that learning to inform the next round. That is why I am confident that, just as we had a success with 3.7 GW on Friday, AR6 promises to be more successful still.

Oral Answers to Questions

Debate between Peter Aldous and Graham Stuart

Tuesday 4th July 2023 Commons Chamber

[Peter Aldous (Waveney) (Con)]

T8. The contracts for difference auctions have been very successful in kickstarting the British success story that is offshore wind. [Interruption.] However, the mechanism now needs adaptation to maximise job creation in places such as Lowestoft and to ensure that we adopt a strategic approach to the provision of enabling infrastructure such as ports and the grid. I would welcome an update from my right hon. Friend on the Government’s work on this important issue.

[Graham Stuart]

I could only just hear my hon. Friend’s question, as the shadow Secretary of State made it quite hard to hear. The Government recently completed a call for evidence on this very subject, looking at the introduction of non-price factors in the contracts for difference scheme so that it values things other than just cost deployment. My hon. Friend, like all Members on the Government Front Bench, wants the maximum number of jobs created and retained in this country.

Oral Answers to Questions

Debate between Peter Aldous and Graham Stuart

Tuesday 18th April 2023 Commons Chamber

[Peter Aldous (Waveney) (Con)]

T8. Maximising investment in renewables is vital to bringing new jobs to coastal communities such as Lowestoft. I would be grateful if my right hon. Friend confirmed that he is working closely with the Treasury to prepare a comprehensive fiscal strategy that will form part of the autumn statement, and that it will include tax incentives, the reform of capital allowances and measures to unlock private investment in ports.

[Graham Stuart]

My hon. Friend will be pleased to hear that we always work closely with our Treasury colleagues. We launched the floating offshore wind manufacturing investment scheme—FLOWMIS—on 30 March, which is worth up to £160 million and will support investment in port infrastructure precisely to unlock floating offshore wind investment and deployment. The spring Budget set out the Government’s plans to launch the refocused investment zones programme to catalyse 12 high-potential growth clusters across the UK.

Powering Up Britain

Debate between Peter Aldous and Graham Stuart

Thursday 30th March 2023 Commons Chamber

[Graham Stuart]

I thank my hon. Friend for his question. Let me follow up with him to talk about more of the details, but I welcome, as he does, the success of the Gigastack Phillips 66 project, the initial hydrogen project. We are leading the world and, having met with Phillips 66, I know that that type of refinery of the future has a real opportunity to play an important part in delivering the green transition on a number of fronts. It is fantastic to see it successful in today’s announcements.

[Peter Aldous (Waveney) (Con)]

I welcome my right hon. Friend’s statement. This strategy rightly focuses on security of energy, its cost and decarbonisation. I would be grateful if he could confirm that the Government will also concentrate on the enormous opportunity to create jobs, and that they will come forward quickly with both a skills strategy and a plan for investment in infrastructure, which should include both the grid and ports such as Lowestoft?

[Graham Stuart]

I thank my hon. Friend for his constructive contribution, as ever. I co-chair the green jobs delivery group. We are working closely with industry to ensure that we get the signals from them across multiple trades, and engaging with the Department for Education to ensure that it can use those inputs to construct various courses to support that. We are absolutely focused. The reason we have a Minister for nuclear and networks is that we recognise that we have to get that infrastructure right. If we get it right—look at the success we have already had and at our investability going forward—it will be a tremendous transition, generating lower-cost energy and making us one of the most competitive economies in the world.

Oral Answers to Questions

Debate between Peter Aldous and Graham Stuart

Tuesday 28th February 2023 Commons Chamber

[Peter Aldous (Waveney) (Con)]

T8. Offshore wind is a great British success story, but fiscal and regulatory action is urgently required if the UK is to remain an attractive place to invest. Can my right hon. Friend thus confirm that, ahead of the Budget, he is working with the Treasury to introduce new tax incentives and to reform capital allowances so that the UK can compete with other countries, such as the US and those in the EU?

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

I am sure my hon. Friend is as delighted as I am that the United States and the EU are now following our lead in developing renewables, including offshore wind. We work closely with the Chancellor to ensure that the UK remains, as it has been consistently under this Government, the best place in the world in which to invest in offshore wind.

Energy Prices Bill

Debate between Peter Aldous and Graham Stuart

Committee stage
Monday 17th October 2022 Commons Chamber

[Graham Stuart]

There are many statutes that include the word “may” from which we can take it that the Government will do what is set out. I am pleased to say that it is absolutely our intention to ensure that those off grid are treated comparably to those on grid.

[Peter Aldous]

The past 10 years have been remarkably successful, with the offshore wind industry and the Government working hand in hand. The industry has raised genuine concerns, which I briefly outlined in relation to clauses 16, 19 and 21, about the direction of that relationship and how it is being imperilled. Will the Minister agree to meet the industry and address those concerns as the Bill progresses?

[Graham Stuart]

As my hon. Friend would doubtless expect, I regularly meet energy companies. I have absolute confidence. One of my biggest concerns when we were looking at the package was to ensure that there are no disincentives to investment in renewables. It is noticeable that the EU has come up with a scheme. We are talking about prices linked to gas that are completely outwith any of the expectations of those who run long-standing nuclear and other low-carbon production. This is an intervention that deals with prices well beyond any prior expectation. It will therefore not disincentivise or undermine any existing business plans.

The contracts for difference that this Government brought in are now being mimicked around the world. In the last auction, 11 GW came in: so successful was it that we are now moving to annual auctions and CFDs. It is also worth saying, on the record, that renewables obligation certificates and other support mechanisms are being entirely honoured; this measure is merely about the spot price, which is excessive. We will come forward with further proposals in due course and will consult with the industry and others to ensure that we act in a way that does not disincentivise investment.

Question put and agreed to.

Clause 1 accordingly ordered to stand part of the Bill.

Clauses 2 to 30 ordered to stand part of the Bill.

New Clause 3

Report on additional expenditure treated as incurred for purposes of section 1 of the Energy (Oil and Gas) Profits Levy Act 2022

“(1) The Secretary of State must, within six months of the date of Royal Assent to this Act, publish and lay before Parliament a report on the effect of reducing the amount of the allowance under section 2(3) of the Energy (Oil and Gas) Profits Levy Act from 80% to 5%.

(2) The Report must set out projections of the effect of the reduction set out in subsection (1) on domestic and non-domestic energy bills.”—(Dr Whitehead.)

This new clause requires the Secretary of State to produce a report assessing the impact of reducing the investment allowance for oil and gas companies as set out in the Energy (Oil and Gas) Profits Levy Act from 80% to 5%, and in particular to assess such a reduction’s impact on domestic and non-domestic bills.

Brought up, and read the First time.

Question put, That the clause be read a Second time.

Oral Answers to Questions

Debate between Peter Aldous and Graham Stuart

Thursday 18th June 2020 Commons Chamber

[Peter Aldous (Waveney) (Con)]

What steps she is taking to promote UK agriculture exports. [R]

[The Parliamentary Under-Secretary of State for International Trade (Graham Stuart)]

Our food and drink sector is vital to our economy. In 2019, exports increased by nearly 5% to £23.7 billion. We want to see that success continue and will shortly be launching a bounce back strategy for the industry as the world recovers from covid-19.

[Peter Aldous]

I am grateful for that answer. I draw your attention, Mr Speaker, to my entry in the Register of Members’ Financial Interests. There are significant opportunities to increase agricultural exports, but for the UK to make the most of them, there is a need to dramatically increase food and drink processing capacity. What discussions has my hon. Friend’s Department had with the Treasury, the Department for Environment, Food and Rural Affairs and the Department for Business, Energy and Industrial Strategy, so as to ensure that the right fiscal and grant arrangements are in place?

[Graham Stuart]

My hon. Friend is right to raise that important issue. My Department is working closely with DEFRA, BEIS and Her Majesty’s Treasury to understand the market and investment trends in the agriculture and food processing sector in a post-covid environment. The Department for International Trade’s high potential opportunity—HPO—programme, which is part of our levelling-up agenda, is already attracting investment in food and drink programmes throughout the UK. For instance, there is agricultural engineering in Telford and aquaculture in Dorset. However, we want to do more, which is why, in partnership across Government and as part of our forthcoming export strategy, we will work to identify new investment opportunities in the sector and its supply chain, so that UK agriculture’s full potential can be realised internationally.

Managing Flood Risk

Debate between Peter Aldous and Graham Stuart

Monday 3rd March 2014 Commons Chamber

[Peter Aldous]

I agree entirely. One thing the Government need to be doing is making sure advice is provided through the local authorities on this £5,000. Support and advice must be given to local communities, in particular in streets where this problem is occurring, to enable them to put in place sound and practical arrangements as soon as possible.

[Mr Graham Stuart]

Does my hon. Friend agree that it is also important that the £5,000 is made available in the most sensible manner possible, so that those who have been repeatedly flooded over a number of years are eligible, rather than just those who have had a one-off event, however severe, which is unlikely to repeated for a long time to come?

[Peter Aldous]

The £5,000 grant has clearly hit the right note across the country, and it is no doubt right that the Government should review very carefully where it is provided.

In my constituency, the preparatory and warning work leading up to the storm surge generally went well. There is scope for improvement in handling the mop-up afterwards, however, and I know the councils are looking at doing that. It is also important to support those who are facing change and uncertainty, even if that is in the long term. Long-term expensive works are required to defend the communities of Corton and Kessingland in my constituency. It is necessary to work with those communities to involve them in finding a permanent solution, even if it is going to be very expensive and some way hence, so that they have confidence that in the long term such solutions will be in place, rather than leaving them feeling marooned and isolated, as they perhaps do at the moment.

Secondly, I am concerned that the existing mechanism for accessing new flood defence schemes is deficient, in that it does not give sufficient weight to economic considerations. It is important that when the Government are determining whether to provide financial support for flood defence schemes, proper account is taken of the economic benefits of the proposals. The benefit-to-cost rules that are currently applied do not do that. In the 2008 Pitt review the recognition of the need to protect the economy is too limited, and there are similar concerns about the flood and coastal erosion risk management plan introduced in 2011.

In my constituency, the future economic viability and vitality of Lowestoft are highly dependent on investment being made by energy companies in the port area, the very area where much of the flooding occurred on 5 December. In order to attract that investment, which would regenerate the area, bringing new business and new jobs to the town, it is important that robust and comprehensive coastal and flood defence arrangements are in place. Proposals to achieve that will be submitted to the Department shortly, and I shall be lobbying vigorously for the necessary funding.

Finally, there is a need for a new approach to coastal erosion and protection, and for a longer-term plan and increased investment in sea defences. Many of the sea defences in Suffolk and Norfolk were put in place by the Eden and Macmillan Governments after the 1953 floods and are now in need of urgent repair, upgrading or replacement. Given the events of 2007 and 2013, it seems these sorts of problems are likely to become more frequent in the coming years. Sea levels on the Suffolk coast have been rising since records began in Victorian times, and since 1953 they have been rising by 2.4 mm per annum. When the impact of climate change is added, it is clear that there is a need for urgent action. In Lowestoft, Halcrow and BAM Nuttall have made the assessment that whereas the previous estimate was that a 1953-type flood would occur every 1,000 years, it could now take place every 20 years.

The UK’s approach to coastal defences over the past 20 years should be contrasted with that of the Dutch. After the 1953 floods, they designed their sea defences to withstand a one-in-4,000-year flood, whereas ours were designed to withstand only a one-in-1,000-year flood. The Dutch have pursued a different approach: the provision of their coastal defences is fully integrated with the provision of other infrastructure, be it airports, harbours, roads, houses or factories. In the UK, coastal flood defences have tended to be an add-on and have all too frequently been cut in times of austerity. The Dutch do not rely solely on hard defences, and a system of dams, dunes and dykes has been put in place which enables them to withstand a one-in-10,000-year storm. By contrast, neither the Pitt review nor the flood and coastal erosion management plan properly addresses coastal erosion and flooding. The latter does not fully reflect the differences between inland flooding, which is temporary, and coastal flooding and erosion, which can be terminal for affected properties and assets.

The storm surges that occurred along the east coast in 1953 and 2013 were the result of a combination of events: very low atmospheric pressure over the North sea, which caused the sea level to rise dramatically; high astronomic tides; gale force winds; and rainfall. On both recent occasions, we escaped by the skin of our teeth, although I concede that what happened in 1953 was horrific; in 2007, the wind dropped in the nick of time, and in 2013 the wind was blowing in a northerly direction and there was no heavy rainfall. I fear that it will not be third time lucky, and it is important both that new defences are put in place as soon as practically possible and that we adopt a different approach to the managing of flood risk.

Static Caravans (VAT)

Debate between Peter Aldous and Graham Stuart

Thursday 26th April 2012 Commons Chamber

[Mr Stuart]

The right hon. Gentleman is right. He may not entirely share my sentiments when I say that the coalition has a great story to tell for east Yorkshire—the Humber bridge tolls have come down, and investments have been made in the A164, the Beverley relief road and the coastal communities fund—but I agree with him that this measure could have a devastating impact.

[Peter Aldous (Waveney) (Con)]

Does my hon. Friend agree that the Treasury has failed to take full account of the impact of the proposal on jobs, which will cascade all the way down from manufacturers to small and medium-sized enterprises? Moreover, it will be concentrated in particular parts of the country, such as his constituency and mine, which will not be able to take that extra impact.

[Mr Stuart]

There is great fragility in isolated, sparsely populated rural areas. How many other jobs are there in such areas? Indeed, what other jobs could there be? The truth is that often there are none.