Nuclear Energy (Financing) Bill

Richard Graham Excerpts

2nd reading
Wednesday 3rd November 2021 Commons Chamber

[Alan Brown]

I completely agree with the hon. Gentleman about nuclear being clean—oh, wait, apart from the radioactive waste that we still do not know what to do with. We will ignore that point, but he has a valid point about the need for clear environmental considerations with respect to where we site any marine project. That should be part of a robust, up-front planning process, working with the likes of Marine Scotland. There are regulatory bodies that have oversight of these projects, so it is important that they be involved in the planning process. I agree with the hon. Gentleman that there is still a huge future for wave and tidal.

[Richard Graham (Gloucester) (Con)]

The hon. Gentleman highlights the value of marine energy in Scotland and elsewhere; he and I are absolutely on the same page on that. Does he agree that one thing it would be very helpful for the Minister to take away is the need to clarify the precise size of the pot that will be available specifically for marine energy in the next contracts for difference auction round, CFD AR4? There is a danger that unless there is a specific pot, the marine energy providers will be rather crowded out by other forms of renewable energy.

[Alan Brown]

I completely agree. I was happy to co-sign the cross-party letter from the all-party parliamentary group on marine energy, which I fully support. I hope that the Minister is listening, because this is a matter that we agree on across parties.

Looking at other technologies that we should be spending money on, I compliment the UK Government on seeing the opportunities that floating offshore wind can bring, but let us start deploying it much more quickly and investing more money, because that is where the real future is. Clearly, the further out to sea the turbines are, the greater the reliability of wind and subsequent generation.

There needs to be much greater investment in carbon capture and storage. The Government need to reverse their disgraceful decision not to have a Scottish cluster as part of their track 1 CCS projects. A Scottish cluster would also deliver hydrogen production, which is vital on the pathway to net zero.

We heard earlier, as we always do, the argument that nuclear is required for when the sun does not shine and the wind does not blow, but as I have tried to point out to the Minister, there is an existing technology that can address that issue: pumped storage hydro, a renewable energy source that utilises surplus grid energy to fill the reservoirs and can then dispatch electricity when required. Pumped storage hydro is the perfect foil for intermittent renewables, rather than big, inflexible nuclear power stations that invariably pump energy to the grid when it is not required. An Imperial College report suggests that there could be system savings of £700 million a year from using pumped storage hydro technology instead of nuclear.

SSE has all the necessary permissions in place, right now, to progress a new pumped storage hydro scheme at Coire Glas in the Highlands. It is progressing the design at its financial risk, and all that it needs is agreement with the Government and a minimum floor price for electricity—not a strike rate and not direct funding, just a minimum guarantee on the sale price of electricity. Then the development can reach the construction stage, and can be commissioned in the same timeframe as Hinkley. I ask the Government to reconsider, and to get round the table with SSE and other developers.

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[David Morris (Morecambe and Lunesdale) (Con)]

It is an honour to be called to speak in the debate and to follow the excellent speech from the hon. Member for Kilmarnock and Loudoun (Alan Brown). In my constituency we have two nuclear power stations, whose output going into the national grid at any given time makes up about 10% of our national energy. They are the largest employer in my constituency, and I have extended family members who work in the nuclear power industry. In fact, it is hard to find anybody in my constituency who does not. We do not just have nuclear, however; we have other forms of energy from wind all the way down to biomass and also, out to sea, what I believe is the largest offshore wind farm in Europe.

The initiatives that the Government are now bringing forward are long overdue. I remember, back in 2010, when the then Energy Secretary Chris Huhne delivered his first speech to the House under the coalition, in which he said that nuclear power would be funded by private enterprise. Afterwards, I had a chat with him about that and he told me that, in his opinion, nuclear was old technology and an outdated form of energy. Anybody in this House who knows me well, as you do, Mr Deputy Speaker, will know my sense of humour. At that point, I said to Chris, “I think the wind has been blowing too hard between your ears, my old son.” He did not find that funny at all. The point I was trying to make to him was that we have an eclectic energy mix in this country of ours, from the great top of Scotland all the way down to the bottom end—and, dare I say it, we also get energy from the continent.

It is about time that we addressed how we are going to fund our future energy needs, especially nuclear. What has not been mentioned so far is that we are trying to get fossil fuels eradicated in one form or another within the next 40 years and that there will be more electric cars on the road. How are we going to power those electric cars? How are we going to meet that demand and keep the economy moving in an electrified form? It can only be done with nuclear power.

Nuclear power is the only form of energy we have that is constant. It is produced 24/7. The Walney wind farm produces a huge amount of energy for this country, but every one of those windmills would have to be producing energy at the same time to match the input into the grid of the two nuclear power stations in my constituency at that moment, whereas those two power stations are pumping energy into the national grid 24/7. It defies belief that we have not invested in nuclear power before now and that we have waited until this point to come up with a funding formula to do so.

[Richard Graham]

My hon. Friend is making some good points about the incredible efficiency of nuclear power operating 24 hours a day. On the specific point of how to finance new nuclear power, does he agree that, when the financing for Hinkley Point was being developed almost a decade ago, it would have been impossible to do a regulated asset-based proposal because, having not built a new nuclear power station for a generation, the risks to the taxpayer would have been enormous? Now that Hinckley Point is being done, however, we can take that same model on to Sizewell C and then hopefully on to Wylfa and elsewhere, gaining experience, expertise and reductions in cost as we go along. Does he agree that this is therefore the right model at this time?

[David Morris]

I totally agree with my hon. Friend. We can take forward this model of heavy lifters, which is how I refer to the bespoke power stations at Hinkley Point. Rolls-Royce has talked at length about a factory in which it would build modular nuclear power stations akin to the power plants on nuclear submarines, which are built not far from my constituency—we see them across the bay.

There are different models coming forward, and we are looking at and accelerating different types of approval because of the need for the low-carbon efficiency of nuclear power. Hinkley Point is a bespoke model, just like the huge heavy lifters we have at the Heysham 1 and 2 configurations in my constituency.

I agree with the hon. Member for Southampton, Test (Dr Whitehead) that there are lots of jobs in the nuclear power industry. It is not just the people working in the power stations; it is the vast supply chain. The hon. Member for Kilmarnock and Loudoun, who is my friend outside the Chamber, raised his valid concern about the processing of nuclear waste, but at the old Sellafield site across the bay from my constituency there is a laboratory that converts used plutonium into forms we can use. Americium, for example, is a by-product of decaying plutonium and uranium, and it can be used to power satellites for 100 years—it cannot be used clandestinely. Plutonium is like a wine that gets better with age, and as it decays it produces something that can be used in a different context.

Other industries spin off from nuclear, and the reality is that we have to meet our energy demands. It is brilliant to see the new Under-Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend the Member for Mid Norfolk (George Freeman), in his place, and he is an old friend of mine. I am glad the Bill has been introduced, and I believe the whole House will back this initiative because we are a great nation collectively and this is how we will power our future industries, transport and economy.

It is good to see the Bill because nuclear is important to my constituency. We have one of eight footprints in the country on which we can build a nuclear power station, and my whole community welcomes this initiative.

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[Sarah Olney]

I thank the hon. Gentleman for his intervention. I am fully aware of that; I just want to reiterate that Liberal Democrat policy is that we are against any further nuclear power stations. We want to redouble our efforts on renewables, and I think I have probably said that several times now. We believe there is no economic or environmental case for further nuclear power stations.

[Richard Graham]

The position that I think the hon. Lady is taking is that the Liberal Democrats believe that all our future energy needs can be covered entirely by wind, both onshore and offshore, and possibly a bit of marine energy. What happens when the wind is not blowing and the sun is not shining? That is precisely when the base contribution of nuclear energy is so vital. By not increasing nuclear capacity, the hon. Lady would not allow us to be able to produce the energy demanded by consumers, who include her constituents as well as those of all Government Members.

[Sarah Olney]

The current issue with renewables is one of storage, but the technology to address some of the problems is being developed at speed. It is clear that by putting our energies, investment and ingenuity into answering some of the questions in relation to storage in particular, but other things as well, we can achieve net zero much faster through renewables. It would be much more productive to invest in storage solutions than to invest in nuclear power.

Let me return to my point about the need to address electricity demand. Currently, households are a key source of demand, but a lot of that demand comes from inefficient buildings. We need to do much more to insulate the existing housing stock and to ensure that we have much better building standards for new builds. The Government need to do much more on that. I am a member of the Public Accounts Committee, and we have released a report on the green homes grant, which was a total failure, and the report goes into a fair amount of detail as to why. I urge the Government to redouble their efforts to get Britain’s homes insulated, because it is key that we use that as an opportunity to address the demand for power. We need to look at both sides of the equation.

If we can unlock more private sector investment, we can support investment in innovation and cutting-edge technologies, including tidal and wave power, energy storage, demand response, smart grids and hydrogen. My personal belief is that those things are much better uses of our time, energy, ingenuity and private sector capital than investing in more nuclear power stations.

In her intervention earlier the hon. Member for Edinburgh North and Leith (Deidre Brock), who is no longer in her place, highlighted the grave risks of nuclear power. I urge the Government not to ignore, in their enthusiasm for nuclear, the considerable downsides of nuclear waste. As a member of the Public Accounts Committee, I visited Sellafield last year, and I hope that every Government Member who promotes this Bill will also take the opportunity to do so. I found it so eye-opening in respect of the consequences of dealing with nuclear waste and the considerable time, effort and money that is still now being spent to dispose of nuclear waste that was generated in the 1970s, before I was born. It was just extraordinary and really brought home to me the literally toxic legacy that we leave for future generations when we create nuclear waste. I am not confident in some of the proposed solutions to deal with it, which could have grave environmental consequences. We cannot be confident that in 50 years’ time people will take nuclear waste seriously and that the right procedures will be in place.

I urge the Government to take nuclear waste very seriously indeed. We spend billions every year to dispose of it, which is why it is of interest to the Public Accounts Committee. The issue dates back to the fuel crisis in the ’70s, when the Government prioritised keeping the lights on. The costs are an ongoing liability for future generations and divert Government spending from other purposes. We need to be very careful before we propose to increase the existing legacy of toxic waste. I feel very strongly about that and urge the Government fully to consider the downsides.

In summary, we do not need new nuclear power stations. We want more private sector investment in innovative solutions and to spread the jobs bonus throughout the country. We cannot afford the legacy of nuclear waste that the Government propose to leave to future generations. We will vote against Second Reading.

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[Chris Green]

I agree entirely with my hon. Friend. We need to secure those jobs and we need, as early as possible, to give that reassurance to engineers and others and say to them, “Your future is in the nuclear industry.” In that way, people can be focused on sticking with the industry and looking for that next job. It is about building that fleet of nuclear power stations. Whether it is Sizewell or further power stations down the line—there are already eight sites that have been identified for future nuclear—we need to give workers the reassurance that their skills are needed within the sector.

[Richard Graham]

My hon. Friend rightly referred to the phrase “a fleet of nuclear power stations”. Of course, in that context, Hinkley Point C and Sizewell C would be the aircraft carriers, as would anything in the future in Wylfa, but there are also opportunities for the smaller frigates. That is where the small modular reactors being proposed by Rolls-Royce could come as an extremely useful addition to those aircraft carriers. Does he agree?

[Chris Green]

That is such an important point. I agree entirely that we already have the larger-scale nuclear reactors and the established technology. It is so important that we look at SMRs and AMRs, and at the leadership that can be provided in a consortium by Rolls-Royce. If we get in early and develop that technology in the United Kingdom, we can export it around the world and create more wealth in the United Kingdom from this incredibly important source of energy and the power stations.

Oral Answers to Questions

Richard Graham Excerpts

Tuesday 21st September 2021 Commons Chamber

[Kwasi Kwarteng]

I have discussed with the sector the ongoing issue of electricity prices or energy prices for the steel industry. That is why one of the first things I did as Secretary of State was to resuscitate the Steel Council. We are coming up with ideas to try to create a sustainable steel sector on a decarbonised basis.

[Richard Graham (Gloucester) (Con)]

I welcome the Minister back re-energised to his place in the Department, and as today is Gloucestershire Day, can I ask him to look very closely at the bid made by Gloucestershire to support the development of a vital new technology—nuclear fusion?

[George Freeman]

On Gloucestershire Day, it is a great pleasure to take that question from my hon. Friend, and the answer is yes.

Nuclear Fuel Manufacturing

Richard Graham Excerpts

Tuesday 7th September 2021 Westminster Hall

[Richard Graham (Gloucester) (Con)]

Thank you, Mr Betts. It is a pleasure to serve under your chairmanship. I congratulate my hon. Friend the Member for Fylde (Mark Menzies) on securing this debate and colleagues from around the House on joining in what might be called a celebration of nuclear, to which I know the Minister will respond positively.

My hon. Friend made absolutely clear his views of the future of civil nuclear fuel manufacturing in the UK at Springfields in his constituency, and made the case as strongly as any of us could have expected him to do, with a crucial role for Sizewell C. In the remaining minutes before the wind-ups, I want to touch on that crucial aspect of this debate, but then widen it fairly swiftly into the role of nuclear in the United Kingdom, as hon. Members have tended to do.

The crucial thing is that the case for nuclear has to be restated again and again, because it has not always been clear that this Parliament has supported it. Whereas nuclear energy itself has continued to deliver consistently throughout the past 60 years, political views have ebbed considerably over that time.

Ultimately, although the 103,000 jobs and important supply chains are clearly vital to the economy, that is not the fundamental reason why we need nuclear, which is, in summary, the only proven low-carbon power that does not raise emissions, even in extreme weather. Over the past 60 years, it has consistently delivered more than 20% of the UK’s electricity needs. We know that those needs will rise so it is crucial that we plan for the future. If the criticism of democracy is sometimes that we only think in terms of five-year election cycles, it is vital that nuclear is the exception to that short-term thinking.

I listened with interest to the thoughtful comments made by the hon. Member for Preston (Sir Mark Hendrick) about the sector about which he knows so much—engineering, nuclear and skills—but the fact is that unfortunately his own party’s failure to do anything for the best part of a decade led to a loss of skills, the sale of British Energy and our dependence thereafter on foreign investment and skills. Much has changed since 2010, of course. Crucially, with the construction at Hinkley Point, we have the opportunity for the first time in a very long time to build up domestic skills, which can then continue at Sizewell C. I hope very much that the Minister will indicate that there will be further opportunities in the future to build additional nuclear power stations, thus taking on the skills from generation to generation, reducing the cost, increasing our skills, possibly enabling us to become exporters of skills again, and reducing our dependency on foreign skills.

The mood music at the moment is encouraging. None the less, I understand that the 18 GW proposal at Sizewell C has not yet reached financial agreement. Anything the Minister can say on that would be welcome. Meanwhile, we have all been slightly sidetracked by the huge opportunities in renewable energy, not least offshore wind and the sector I have spent a lot of time on—marine energy. I encourage all hon. Members who are supporters of nuclear to look at what is being achieved by Orbital Marine Power off Orkney in the north of Scotland. It is a remarkable generation of marine energy. In a sense, all that complements what we can do with nuclear, because it opens another great opportunity, which is to generate hydrogen at or very close to our nuclear power stations. I would welcome it if the Minister commented on what progress we might make on that over the next two or three years.

My constituency of Gloucester has been the nuclear operational headquarters for British Energy and now EDF Energy for a long time, operating all the existing nuclear power stations in Britain. Of course, we hope to take our nuclear skills in a new and different direction with a bid to become the hub, at Oldbury and Berkeley, for the development of nuclear fusion. We are very keen to see the operation at Barnwood play a major role in the development of Sizewell C. As colleagues have mentioned, the opportunities for skills, careers and well-paid jobs in a sector that is so vital to everything we do is enormous.

Can the Minister give us any update on Sizewell C? When will the Government consider the next project thereafter and how fast we can take forward the development of hydrogen at our nuclear power stations? I hope that my comments supplement and complement what colleagues from around Westminster Hall have said in support of a sector that is so vital to our future.

[Mr Clive Betts (in the Chair)]

We now move on to the Front-Bench speeches. We have slightly more than the normal 10 minutes. We will allow two minutes for the mover of the debate to wind up at the end, so you have about 12 minutes. You do not have to take that time, of course. I call Alan Brown of the SNP.

UK Space Industry

Richard Graham Excerpts

Thursday 4th February 2021 Commons Chamber

[Richard Graham (Gloucester) (Con) [V]]

Today’s debate is a decade on from the space innovation and growth strategy of 2010, in which we aspired to a 10% share of a growing global sector. Today, a lot has happened, and the market has hugely grown. The Government are right, therefore, to focus on the increased market opportunities ahead.

To celebrate what has been achieved, our small satellites, led by Surrey Satellite Technology and AAC Clyde Space, have done good work around the world. For example, they have partnered with the Government of the Philippines to help their efforts at greater information for agriculture and, indeed, natural disaster awareness. Such opportunities, both environmental and security, echo across all the world’s regions, with chances to boost crop production and the livelihoods associated with it, reduce deforestation and increase carbon reduction. All of that comes in the lead up to COP26, so this is an appropriate moment to discuss our role in space. Such activity could be boosted by launches in Cornwall and the Shetlands, putting us at the front of European efforts, alongside Sweden, to have launches from the continent.



Our wider role in global navigation systems, now that we have left the European Galileo project, needs to be clarified, along with the future of the UK-based European Space Agency, as the EU creates its own entity. Although we currently stand second only to the US when it comes to providing finance for space, our Government spending on R and D, as my right hon. Friend the Member for Kingswood (Chris Skidmore) referred to, hardly places us in tier 2 and some way behind France and Germany.

Does this matter? My instinct is that for the UK to continue to be at the leading edge of space technology, with skills, jobs and growth benefits, we need the National Space Council to work closely with the Department for Business, Energy and Industrial Strategy on the strategy promised but not yet seen. I hope that will include opportunities for greater UK supply chains, as well as for how we take forward the role of OneWeb, particularly in our aims for autonomous vehicles.

We should, as a result of all these things, be looking at a future where robotics and advanced manufacturing play a key role, with finance raised from our capital markets, venture capital and other institutional funds. This will be helped by the partnership between scientists, technology, business, markets, the regulator and Government —exactly what has been delivered on vaccination. It is an initially surprising similarity, but, as other countries and unions have found, it is a difficult one. If the Minister and BEIS can together harness the good work of the decade-old Satellite Applications Catapult—shall we just call it the space catapult?—and the new Space Growth Partnership, we may have the vehicle to do it. With a really good regulatory policy alongside this and the best framework in the world, we will attract investment and a rocket-fuelled role for our economic recovery.

Employment Rights: Government Plans

Richard Graham Excerpts

Monday 25th January 2021 Commons Chamber

[Richard Graham (Gloucester) (Con) [V]]

There is a lot in this Opposition motion that we can all agree on, which is why the Government are right not to move a counter-amendment. None of us wishes to alter important employment rights such as rest breaks at work, nor should any Opposition MP want to alter the changes brought in by the Conservative Government of the last decade, such as shared parental leave and the national living wage, which has increased a 21-year-old’s earnings by over a third, or more than £5,200 a year. Let us never go back either on the near doubling of the tax-free allowance since 2010, which the Secretary of State referred to, and which amounts to an extra £1,000 a year of take-home pay.

So far, then, there is agreement. However, there were also telling things missing from the shadow Minister’s speech. First, there was a misreading of the Secretary of State, whose first announcement asked for faster payment of small businesses by big business, making sure that those companies—the subcontractors and the members of the Federation of Small Businesses and of the chambers of commerce, and which are the lifeblood of every constituency—get paid properly, especially during the pandemic.

There was a lot else that was missing. The second thing was that the shadow Minister failed to answer my hon. Friend the Member for South Suffolk (James Cartlidge), who asked about the Labour party’s manifesto commitment to a four-day working week. If that is Labour’s recipe for increased productivity, success and Britain’s global way forward, I invite the shadow Minister to come down to Gloucester and talk to some of our Queen’s award-winning manufacturers to get a dose of reality. It is a competitive world, and we do not win with a four-day week.

The third missing element from the speech was that the Opposition did not look at themselves. The worst published cases of employer abuses of employee rights have been in Leicester. Which party runs the council, with 52 out of 54 councillors, and has an elected Mayor, returned three times, and three out of three MPs? It is a national embarrassment, and until Labour sorts out the abuses in Leicester, it should be careful about lecturing anyone on employment rights and protections.

The fourth missing ingredient was the most important issue of all: jobs and job creation in a pandemic and an economic crisis. Today, we know that employers have signed up to offer 120,000 six-month kickstart work placements as soon as it is possible for them to start. Government Departments, such as the Department for International Trade, are on the case too. In a few days, I will host a trade export event in Gloucester to help businesses find new markets, which I hope will lead to new jobs. It is businesses that drive new jobs, as the Secretary of State knows. That is why he is supporting my efforts on promoting more marine energy around our coasts, bringing green energy and sustainable jobs. That is what we need: skills and jobs.

Energy White Paper

Richard Graham Excerpts

Monday 14th December 2020 Commons Chamber

[Alok Sharma]

I do not know whether it is possible to place eggs in a hydrogen basket, but the hon. Gentleman makes an important point. We need to level up across the country and we will do just that.

[Richard Graham (Gloucester) (Con)]

This energy White Paper is bristling with good things. Let me highlight two of them. The Secretary of State alluded to the negotiations with Sizewell C. May I highlight for him the importance of this project not just to the nuclear energy sector or to that part of the country, but to my constituents in Gloucester, where the operational headquarters of EDF Energy at Barnwood are extremely important? Can he confirm that access to Government financing will be the key to reducing the risk and costs of this project? The second great bit of news is his commitment to considering the role of wave and tidal energy. As chair of the all-party marine energy group, I thoroughly support this initiative, which I hope will end with some pots for marine energy and the contract for difference in November, before COP26.

[Alok Sharma]

I am delighted that my hon. Friend thinks that this paper is bristling with ideas and energy. I know that for a long time my right hon. Friend the Minister has been bristling with energy getting this thing put together. On Sizewell C, we are going to look at the financing model and that will be part of the discussion, but one of the other key points is that it will be creating jobs during the construction phase and indeed beyond. A number of colleagues have asked what is the connection between this and the lives of people in our constituencies, and the answer is that it is very much about jobs.

Marine Renewables: Government Support for Commercial Roll-out

Richard Graham Excerpts

Tuesday 8th December 2020 Westminster Hall

[Mr Carmichael]

I absolutely agree, and I would add to that list of tides and sunsets the attendance of the hon. Member for Strangford (Jim Shannon) at Adjournment debates in the Chamber and Westminster Hall. I think the chairman of the APPG wished to intervene.

[Richard Graham (Gloucester) (Con)]

I am grateful to the right hon. Gentleman for securing this debate and allowing me to intervene as chairman of the all-party parliamentary group on marine energy and tidal lagoons. As he and the hon. Member for Strangford (Jim Shannon) have highlighted, this is a resource of enormous potential across the UK.

We have representatives here from Wales. It is true to say that Bardsey will become the first island in the world to be entirely powered by tidal stream. The other projects in Morlais, Pembrokeshire and Perpetuus Tidal Energy Centre on the Isle of Wight, which is one of five centres funded through the Government’s TIGER project, give an idea, as the Minister is aware, of the potential. Does the right hon. Gentleman agree that, with COP26 in Glasgow next year, if the contracts for difference auction were to be just beforehand and marine energy to be given a fraction of the capacity there, that would be a fabulous project to highlight at COP26?

[Mr Carmichael]

I absolutely agree because, as I am about to illustrate, we have a nascent industry. It is growing but it is in a position to undertake that important role for the UK on the world stage. According to the UK Marine Energy Council, there are currently 22 tidal stream and 23 wave developers active in the UK, with an estimated investment to date exceeding £500 million of private capital in developing marine energy technologies, and £70 million in direct public support.

Estimates of support suggest that the tidal stream could deliver £1.4 billion gross value added by 2030, while the figure for wave is £4 billion by 2040. Those figures, plus the thousands of jobs that would come with them, are a tremendous prize. There are currently tidal stream sites with an aggregated output of 1 GW under development in the UK, awaiting a positive signal from the Government. The industry is ready to move, the technology is there, the private investment is primed but it does need a helping hand from Government at this critical stage.

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[Kwasi Kwarteng]

Forgive me; I saw straight through the Scottish representative. In this debate, we have representatives from all four countries of the United Kingdom. That is significant, and points to the fact that the levelling-up agenda is geographically extremely diverse. The green industrial revolution and green energy topics engage all four of our constituent nations. It is an excellent debate for that reason.

The Government remain absolutely committed to renewable energy, and that was highlighted specifically by the Prime Minister’s 10-point plan. We believe that the only way we can get to net zero by 2050 is through innovation. Tidal technology is part of that innovation. The only caveat is that it cannot come at any cost.

My right hon. Friend the Member for Preseli Pembrokeshire referred to eternal waiting and eternal words and rhetoric. We must have this dialogue and we must at least show a pathway to reducing costs, and if we can do that—I am sure we will be able to do that—we will in the short term be able to put flesh on the bones and realise in fact some of the aspirational rhetoric exchanged across the House for many years.

[Richard Graham]

The Minister has been generous in his support for renewables in general, and for marine energy specifically. As referred to by the right hon. Member for Orkney and Shetland (Mr Carmichael), he has been willing to see representatives of the industry and hear ideas for the future auction. Will he, at the same time, try to find a few moments to look at the innovative purchasing agreement proposed by the industry, allowing a tax reduction basis but with nothing rewarded till it has been delivered, in terms of energy? Will he commend it to his friends at the Treasury?

[Kwasi Kwarteng]

I can absolutely assure my hon. Friend that that is something I will be looking into. With regard to my BEIS commitments specifically, we can potentially get some movement on the auction. I do not know, and it is part of a discussion. Once that is up and running, perhaps we could have a further debate and a further push on tax treatment in the way he describes. I would clearly be happy to raise that with Treasury colleagues, although the right hon. Member for Orkney and Shetland knows from his experience in Government how fraught some of those conversations can sometimes be. BEIS will certainly look at the auction seriously. We hope to push forward with that innovation.

Question put and agreed to.

National Security and Investment Bill

Richard Graham Excerpts

2nd reading & 2nd reading: House of Commons
Tuesday 17th November 2020 Commons Chamber

[Sir Iain Duncan Smith]

My view is that the Bill should help us to identify exactly which of these are genuinely private and not located in China under Chinese law. That will be a big issue. I have to tell my hon. Friend that, on that question he is right, because I believe we are now facing a very significant threat from China. So we now need to use the Bill to figure out how we deal with that threat on a wider basis, not just on individual takeovers. The Government need to look at that. Huawei was a very good example of Government policy having to be reversed on that basis. It is a growing problem and he is right to raise it.

[Richard Graham (Gloucester) (Con)]

Does my right hon. Friend agree that it is incredibly important that we recognise that the Bill is not aimed at one particular country or any particular identified sovereign threat? It is a more general Bill about the importance and value of national security assets in this country. Does he also agree that referring to China as communist—although, of course, it is ruled by the Communist party—is a misnomer in the context of a successful model of authoritarian state capitalism with which we will have to deal and the world will have to deal? We will have to separate those companies that offer attractive investment opportunities from those that are genuine threats.

[Sir Iain Duncan Smith]

I thank my hon. Friend for that intervention. I know he has been a big champion of that relationship. We do not agree with each other on this matter because I think that China, with its dictatorial Government, poses a very significant threat. But I did speak about other countries—I did say that Russia also poses a threat—so I recognise his defence.

I want to move on to the national interest test. This year, the Australian Government invoked the national interest in looking at tests and they used it in similar legislation to block the acquisition of a minor stake—this might deal with the issue that my hon. Friend was talking about—in AVZ Minerals by a Chinese firm. They needed to intervene because the asset, given what has happened with covid and so on, had lowered in value unusually and unnecessarily, and that had opened it up to a takeover which they felt would have been very unhelpful. The other point I want to raise in passing is that we need to look at things like the Confucius Institute, which is here investing in universities with offers but is actually acting on behalf of the Chinese Government to follow lots of Chinese students around.

Other Members wish to speak, so I will finish my remarks. My main point is that without that national security test the Bill will lack clarity and definition, and fail to understand sometimes where it is actually looking. It could be open to pressures to turn this more into an industrial policy statement, rather than a national security issue.

The Bill also falls short of similar legislation by Five Eyes partners. My right hon. Friend the Secretary of State is absolutely right to say that they have looked across the scope of what others have done, but other Five Eyes partners have gone further on this. They are competitor countries to us, so it is not as though they have any kind of dictatorial regimes. The Committee on Foreign Investment in the United States and the Australian Foreign Investment Review Board are external bodies.

This is the point that I wanted to make to my right hon. Friend. I just wonder whether he might want to reflect on the nature of the pressure on somebody such as him, who, under the Bill, will have to sum up and make final decisions on the advice peculiarly to him. The other two organisations, in Australia and in the United States, have the ability to say that everybody on the panel makes a group decision on the evidence. I know he will argue that that process takes longer—yes, he may be right about that—but I feel that the pressure is on him.

I was in government for six years and I know what Downing Street does. It gives you a call and says, “I don’t think you have to go very far with this sort of stuff, do you? After all, this is worth a lot of money to us. Come on.” Others will say that and the Secretary of State will be sitting there thinking, “This is a balanced judgment. Where do I go on this?” I just wonder whether that pressure is fair on the Secretary of State. He would be questioned later on why certain decisions were made. If I was the Secretary of State, I would want to release myself from that situation. I would not want to be dragged to the courts to be accused of being biased in that decision and making a decision that was not agreeable. So I would look for more external bodies to be able to make that judgment.

I also say to the Government that human rights are vital nowadays. We cannot walk away from it; it is part of what makes us. The reality for us is that far too many companies have allowed themselves to quietly get sucked into the use of slave labour and other labour. We know about that, in Xinjiang province and in other areas too. My right hon. Friend does need to think about that very carefully. I do not want to make the Bill a Christmas tree, but elements of that are involved.

I congratulate the Government on bringing forward the Bill. It is the right legislation to bring forward. It is overdue, no question. However, the balance still needs to be widened somewhat. I hope that in the course of the Committee and Report stages the Secretary of State will accept that good amendments may come forward from brilliant people—not just me—who may well be able to help him in his adventures.

--- Later in debate ---

[Greg Clark]

Of course we should look at the example of other countries; I am sure we will do so during the course of the Bill. However, I would say to my hon. Friend that those two countries are very different in their markets and the size of their economies. The pool of capital that is available to start-up companies in the US is vastly greater than it is in the UK at the moment, although I hope that will change, for reasons that I will go on to discuss. Australia, conversely, is a much smaller economy, which does not have the network of policy regulatory innovation that we have.

We have been a leader; that is our international reputation, and one reason that transactions are conducted in this country is the confidence in our rule of law. We should emphasise and champion that, rather than feeling compelled to follow what other countries are doing in their entirety. Our policy—our industrial strategy—must be to make Britain an even more attractive place for innovative companies to be founded and to stay—not because they are compelled to do so, but because the environment that we provide, in terms of scientific research, educated and trained people, the availability of capital at every stage in their development and the public policy environment make it an attractive place for them to want to be.

Neither must our regime establish, in my view, a list of countries that cannot invest at all in the UK. The test must genuinely be about national security. That is very appropriate. China has been mentioned already in these discussions, and of course it is right and proper that the national security concerns that the House has about China should be reflected through this regime, and these powers are important for that. However, when I was sitting in my right hon. Friend the Secretary of State’s place, I fought hard to save, for example, British Steel in Scunthorpe, Skinningrove and Teesside. The Chinese steelmaker that bought the company, Jingye Group, is essential to the employment of many tens of thousands of people across the north and the east of England, and more in the supply chain. From my recollection, there was no intellectual property vulnerability in terms of its operations. Indeed, the retention of that substantial steelmaking capacity has enhanced our economic resilience, whereas losing it would have seen us relying on imports. I might say the same for Geely, the owner of the London Electric Vehicle Company, which my hon. Friend the Member for Stratford-on-Avon (Nadhim Zahawi), being a west midlands MP, will be familiar with, and which gives valuable jobs to many people.

[Richard Graham]

My right hon. Friend is making a very good case for why it is important to look at each investment in its own right. Geely, which bought the London Taxi Company, produced electric vehicles and now exports them to the Netherlands and France while continuing to manufacture in Coventry, is a good example of why that is so important. Does he agree that it is simply not good enough for this country to say, “China is Communist and we will not accept Communist investment, and therefore we will not accept Chinese investment.”? We must be a great deal more sophisticated and open than that.

[Greg Clark]

I would say to my hon. Friend that the Bill’s focus on national security is absolutely right. We should have a beady eye on national security, with substantial powers, as my right hon. Friend the Member for Chingford and Woodford Green (Sir Iain Duncan Smith) said, to enforce that. I think the Bill has it right in its focus on national security.

The Committee that examines the Bill will need to consider in detail some of the provisions of the Bill as it is presented on Second Reading. It is essential to provide investors and UK firms with a sense of predictability and confidence, but that can be undermined if the law has administrative consequences that are unintended and not provided for. For example, there are strong reasons to think that there may be a deluge of notifications, as the hon. Member for Dundee East said, when the new unit in the Department is set up, and it must be geared up to handle that right from the outset.

The prospect of five years’ imprisonment for directors and fines of 5% of turnover, as my right hon. Friend the Secretary of State commends, for failure to notify under a mandatory regime within sectors defined as broadly as communications and transport is, in my view, likely to lead to many small transactions being notified under the voluntary regime for peace of mind regarding those very strong sanctions against an inadvertent breach. It is an enormous challenge for the Department to set up a new unit, especially since the current regime—or the previous one, since the powers are live—has dealt with a very small number of transactions each year.

As Secretary of State, I reduced the turnover threshold for review from £70 million to £1 million only two years ago. This Bill contains no de minimis threshold, and I will be interested to see during the passage of the Bill evidence of why a zero de minimis threshold is necessary, especially when the definition of technology assets extends to “ideas, information or techniques”, which is very broad. This could result in a very large number of very small transactions being notified defensively.

Even if businesses are confident that they will not be covered by the mandatory notification requirement, the advantages of voluntary notification and clearance, with its exemption from the five-year look-back, may prove to be very attractive and very important in baking in the approval of a transaction against reversal more than five years in the future. It is clearly the ambition of the right hon. Member for Doncaster North to add further public interest tests. As we approach the general election, it may well be attractive, as a defence against the action of future Governments, for companies to notify even when they do not have to. It is very important that the Department is geared up for that.

Much of the Science and Technology Committee’s work in recent months has been concerned with the nation’s response to the coronavirus. If we can learn one lesson from that—for example, from problems with the test and trace system—it is that, to have public confidence, we need to properly anticipate demand and to set up to meet it from the outset. If that demand is not supplied, public confidence, which is crucial for investment, will be undermined.

Oral Answers to Questions

Richard Graham Excerpts

Tuesday 10th November 2020 Commons Chamber

[Amanda Solloway]

Skills for adults and young people in rural areas, such as West Dorset, are absolutely invaluable. Towns and cities are an important part of supporting the future economy, and we are working with education colleagues to consider how Government support on skills will be an integral part of our strategy for growth.

[Richard Graham (Gloucester) (Con)]

What recent steps his Department has taken to support the growth of innovation and new technologies.

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

This Government are fully committed to unleashing innovation and supporting priority technologies. For example, combined public and private investment in the National Quantum Technologies Programme over its 10-year lifetime is set to pass the £1 billion mark. We are investing £750 million through Innovate UK to support innovative businesses through the pandemic and have also launched the future fund.

[Richard Graham]

I welcome the Minister’s response. Does she agree more broadly with me that the UK should retain key technology assets where there is a national interest and that Arm Ltd’s capabilities in semiconductor and chip design, including processes for mobile phones, have national security implications? If she agrees, can she, her Department and the Government do more to protect the national interest in the proposed sale of Arm by SoftBank to Nvidia?

[Amanda Solloway]

Arm is an important part of the UK tech sector and makes a significant contribution to the UK economy. Although acquisitions are primarily a commercial matter for the parties concerned, the Government monitor them closely. When a takeover may have a significant impact on the UK, we will not hesitate to investigate further and take action. We will be scrutinising the deal carefully to understand its impact on the UK.

The Enterprise Act 2002 (Specification of Additional Section 58 Consideration) Order 2020

Richard Graham Excerpts

Wednesday 8th July 2020 General Committees

[Richard Graham (Gloucester) (Con)]

The Minister has laid out the case for why there needs to be a public interest addition to section 58 of the Enterprise Act 2002, and he mentioned the context: of the 20 interventions so far, none has been carried out.

None the less, the impact of this change is in the direction of growing protectionism. We are seeing that trend across the world, and it can only have a negative impact on inward, and indeed outward, investment. Will the Minister tell us the extent to which some of the partners with whom we are trying to do free trade agreements have similar provisions in place—in other words, specific considerations of public health emergencies added to their public interest constraints on buying companies? To what extent does he believe that that trend is going to grow?

In an earlier statement, the Minister said:

“It is difficult to imagine that the need to maintain critical UK public health and crisis mitigation capabilities will become less important over time.”

That implies that there will be more intervention, rather than less. It would be valuable if we were all clear about the direction of travel, given that this party of Government believes strongly in creating a global Britain that allows our businesses to go overseas and, if need be, to buy companies to help expand British interests overseas. As the Minister said, we benefit hugely from inward investment.

[The Chair]

We get a double portion of the Minister.