Civil Nuclear Road Map
Debate between Thérèse Coffey and Alan Brown(2 months ago)
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Alan Brown (Kilmarnock and Loudoun) (SNP)
I commend the hon. Member for Folkestone and Hythe (Damian Collins) for initiating the debate. It may not surprise him that I will approach it from a different angle, providing the opposition, as it were.
In my view, this should be called the nuclear road map fantasy. Even if we put aside my objection and that of my party to new nuclear power, all the evidence and all the understanding of the development or non-development of nuclear power in the UK over the past decade point to the fact that this will not happen. As the hon. Gentleman rightly pointed out, the 2011 plan never came to fruition. It is obvious that the nuclear ambitions have not been fulfilled in the past 13 years.
Every pro-nuclear enthusiast seems to ignore the fairly recent market failure whereby Hitachi walked away from Wylfa and Oldbury and Toshiba walked away from Moorside. Notwithstanding the intended competition for the construction of all these new nuclear sites, EDF and China General Nuclear remained the only show in town, and EDF is still the only show in town as the only company willing to build large-scale nuclear. EDF has a blank cheque when it is at the negotiating table, because there is nowhere else for the Government to go. Large-scale nuclear ambitions also ignore the fact that as a concept the EPR design has been a failure, with every single EPR project in the world being over budget, late and experiencing technical difficulties. Finland’s Olkiluoto 3 was 15 years late. Flamanville in France is 12 years late and at four times its original budget. Taishan in China was held up as the delivery exemplar when it was commissioned, but has been plagued by safety concerns owing to rod damage, and has been offline as much as it has been online since it was commissioned.
We were told that the lessons learned from all the problems with all the other EPR projects would be put into place in Hinkley and that it would be much more efficiently delivered, so let us look at Hinkley Point C. In 2016, its estimated cost was £18 billion, but EDF has recently updated that estimate to £48 billion in today’s prices—a mere £30 billion overspend. Instead of generating power in 2025, it will now be as late as 2031. As costs have continued to spiral, the Government’s attitude remains that it does not really matter for the taxpayer, because all the risk sits with EDF.
However, China General Nuclear, which is a partner in the project, has already reached its cap on the money and capital it is willing to put in, so clearly EDF is now having to find a lot more borrowing than it anticipated. Frankly, it beggars belief that the Minister and the Government claim not to be speaking to EDF about this, especially when just last week the chief executive of EDF, Luc Rémont, stated:
“We’re confident we can find a pathway with British authorities on Hinkley Point C and Sizewell.”
When will the Government admit that Hinkley Point C will need some sort of bailout to allow it to get to completion, or is the intention to throw more money at Sizewell to offset Hinkley’s financial black hole for EDF? The Government also need to come clean on why they put back the contractual payment cut-off dates for Hinkley by six years. Do they know that there is potentially further bad news for Hinkley?
The lessons learned have not worked out for Hinkley, but now we are told that it has been a good learning project and that Sizewell C will be different and will be delivered efficiently, learning from the lessons of the delivery of Hinkley. Again, this is head-in-the-sand stuff. The last Government estimate for Sizewell C was £20 billion, but we now know that Hinkley will cost nearly £50 billion, so it is quite clear that Sizewell C will cost £50 billion—a lot more capital than the Government have intimated they are required to raise. It is no wonder that pension funds have been running a mile from investing in Sizewell C.
Dr Coffey
It is not a straightforward comparison, because I think Sizewell C is still in line with its 2015 prices. It is fairly standard to try to stick with an estimate, but I agree with the hon. Gentleman. As the local MP for Sizewell C, I am concerned that there have been significant delays at Hinkley. I appreciate that the SNP does not approve of nuclear power at all, but I would like to understand why he is concerned that the Government will have to bail out Hinkley C, when that is clearly not the situation. I would be interested to explore why he thinks that is the case.
Alan Brown
I quoted the chief executive of EDF, who says he hopes to find a pathway with the British authorities, which suggests that EDF wants to be talking about getting more money. The reality is that if there is a £30 billion overspend, EDF must recover that money somewhere, if it can afford to deliver the project without getting a bailout and in line with the 35-year contract it has for selling electricity. If the company has been able to swallow that level of overspend, it shows that the site rate originally agreed in the £18 billion estimate for construction was way too high, because the original £18 billion was supposed to cover contingency as well. Something does not stack up, given that there is such an overspend and such a delay. The delay means that it will be even longer before EDF starts getting payment for the project, so something is not quite right and we need to get a better understanding of that.
I disagree that Sizewell C is still in line with its 2015 prices. At the end of the day, although some lessons can be learned and replicated, the site for Sizewell C is smaller, more constrained and geologically different. It is surrounded by marshes and adjacent to an internationally renowned nature reserve. It is also in one of the fastest-eroding coastlines in Europe, which is subject to rising sea levels and more extreme weather events. In other words, I would argue that Sizewell C is a daft location for a new nuclear power station. With the groundwork and initial civil engineering that will be required, it is not a straightforward carbon copy of Hinkley. We need to know the official estimate for Sizewell C. Taxpayers deserve some transparency, especially given that the Government have already allocated £2.5 billion of taxpayers’ money to EDF for the development of the project, just to get to the stage of a final investment decision. Enough money has already been ploughed into Sizewell C, yet there is still a lot of uncertainty.
On the wider programme delivery considerations for these large-scale nuclear sites, Hinkley will have taken 15 years to complete, if it is completed, by 2031. Even if we are optimistic about Sizewell C, which will be delivered much more quickly, it is still going to take at least 10 years, so it could be between 2035 and 2040 before it is delivered. These timescales alone show the folly of relying on nuclear for decarbonisation and of planning for nuclear to deliver 25% of generation output capacity by 2050, as set out in the road map. It also shows the folly of the road map stating a delivery target of 3 GW to 7 GW every five years. It is a fantasy target, as is 24 GW overall, unfortunately.
The concept of 24 GW, or 25% of generation output, is the wrong model, given that nuclear power is so inflexible. Such a large nuclear output on the grid means that, at times, even greater constraint payments will be paid for renewable energy companies to turn off their turbines.
Large-scale nuclear cannot deliver the intended five-year targets, so how will those targets be met? As the hon. Member for Folkestone and Hythe (Damian Collins) outlined, the road map talks about small modular reactors. The name sounds innocuous, but do people really believe that a footprint the size of two football pitches is small? It clearly is not, and there is not yet a single licensed prototype in the UK. Good luck in the competition for SMRs, considering that none has been licensed and approved for construction in the UK.
Of the designs that the Office for Nuclear Regulation is considering, the only one to have reached stage 2 is the Rolls-Royce proposal, with the ONR’s stage 2 assessments due to conclude in July 2024. Stage 3 timescales are still to be confirmed, so the reality is that SMRs are just a glint in the UK’s eye at the moment. There is no understanding or certainty on timescales, even if SMRs do come to fruition.
NuScale is supposedly the world leader in SMR technology, and it has just given up on its proposed SMR in Utah because costs have ballooned to £7 billion. The cost of electricity generation has rocketed, too. Our road map tells us that the UK will pioneer and lead the way on new nuclear and SMRs, but that does not make sense. The Government estimate that SMRs will cost £2 billion a go, which makes no sense given the cost of the project in Utah. The Chair of the Environmental Audit Committee, the right hon. Member for Ludlow (Philip Dunne), is in his place, and I welcome the questions he has put to the Government. The Government need to consider this closely, and I look forward to their response.
Why does the road map outline two possible funding models—contracts for difference and a regulated asset base? At a £92.50 per megawatt-hour strike rate over 35 years, Hinkley Point is way more expensive than renewable energy at circa £40 to £50 per megawatt-hour over just a 15-year concession period. When we debated the legislation on the regulated asset base funding model, the Government told us that the CFD model does not work for nuclear as it is too expensive, and that switching to RAB would save £40 billion to £80 billion over the lifetime of a nuclear project. If that is the case, why are two funding models listed in the road map? Are the Government now concerned that RAB transfers too much risk to the bill payer? Are they concerned about repeating what happened in South Carolina where, under a regulated asset base model, a company abandoned the construction of a nuclear power station and ratepayers were left paying for a power station that was never completed? What is to stop that happening at Sizewell?
The road map outlines the need for a geological disposal facility, but there are no plans in place to show how such a facility will be identified, constructed and paid for. What is the estimated cost of a GDF? How big will it need to be? Will it be one facility or will there be more, depending on how many nuclear power stations are built? Worryingly, the road map talks about having interim storage in the meantime. This shows that there is still no solution in place for disposing of radioactive nuclear waste, other than burying it for hundreds of years. Our current decommissioning legacy is estimated to be £124 billion, so why do we want to create another generation of nuclear waste for future generations to pay for? There is always a risk that a future Government will need to pick up the tab for decommissioning, no matter what companies sign up to at the outset.
Finally, we are told that nuclear is required because of its reliability and because it produces power when the wind does not blow and the sun does not shine. Over the last 12 years, however, each nuclear reactor has been offline for roughly a quarter of the year, so the dependability of nuclear is not a given. Indeed, Heysham and Hartlepool power stations are offline and have been since December, so two out of three in the existing fleet in England are offline. Before Hinkley comes online, seven of the original eight nuclear stations operating just a few years ago will have gone offline. If we can operate with such a depletion of the existing nuclear fleet before Hinkley comes online, that undermines the argument that we need nuclear to supply the baseload. The Government clearly do not think that the lights will go out when the rest of these nuclear stations are being decommissioned before Hinkley comes online. To me, the road map seems to be all false aspiration and not enough substance, and it flies in the face of the reality of what we know about the operation of nuclear in the past few years and how the market really sits at the moment.
Tackling Short-term and Long-term Cost of Living Increases
Debate between Thérèse Coffey and Alan Brown(1 year, 11 months ago)
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Dr Coffey
The hon. Gentleman is right to say that food banks are present and providing support in many communities, especially where people are trying to work out the best way to spend their resources. He mentions in-work poverty, and it is why we have a plan for in-work progression, why we have been investing in skills, why we are investing in our jobcentres and why, through the plan for jobs, we are doing more to help people not only to get back into work but to get on in work too. That is what we are doing.
On top of the activity we have been undertaking, there are things we can do and are doing to cushion families from the worst effects of inflation and to ease the squeeze on household budgets. As my right hon. Friend the Chancellor set out, £22 billion has already been committed to support the hardest hit this year. The £150 of support for households in bands A to D is landing in people’s bank accounts, with a further £144 million discretionary fund available to councils. From October, the £200 reduction in energy bills will help families spread this year’s increased costs over the next few years.
We initiated the household support fund, through which we invested £500 million across the UK to help with the cost of household essentials. We are increasing that to £1 billion every year. For the second phase of the grant we have put a particular focus on people on fixed incomes, which is why a third is ringfenced for pensioners. That is on top of existing targeted support such as the warm home discount, cold weather payments and winter fuel payments. We are stepping in at this challenging time, and we are ready to do more to help.
We are discussing an Opposition amendment, and I make it clear that we will reject all Opposition amendments to the Queen’s Speech as a matter of precedent. The Queen’s Speech sets out the Government’s legislative programme for the year, and it is for my right hon. Friend the Chancellor to introduce fiscal measures, and he will make all future decisions on tax in the usual way. I reiterate that he told the House today that no option is off the table.
We know that the best way to raise living standards over the long term is to grow the economy, to invest in skills and to get people moving into and progressing in decent jobs. The latest statistics cut through the Opposition’s charge that poverty has increased since the Conservatives came into power. There are 1.2 million fewer people, including 200,000 fewer children and half a million fewer working-age adults, in absolute poverty, before housing costs, than in 2010. In March we published statistics that, for the first time, combine absolute low income and material deprivation among working-age people. Those statistics show a fall of three percentage points, from 3.1 million when we came into power to 2.2 million in 2019-20.
Alan Brown
Will the Secretary of State remind the House of how much money the Treasury puts towards the warm home discount?
Dr Coffey
The hon. Gentleman is trying to be clever, as he knows the answer is that it is a redistribution within the energy policy. [Interruption.] Would he rather not have it? Would he rather be with his fellow SNP people who voted against any rise in benefits at all? That is what several of his colleagues did. They did not vote for a lift in benefits.
After a decade of rising employment, we are building on our track record. We are ensuring that people have stronger incentives to work and can keep more of what they earn. Some 1.7 million working people on universal credit are, on average, £1,000 a year better off following our cut to the taper rate. Last month’s 6.6% rise in the national living wage has provided the lowest paid with an increase of £1,000 a year in their income, and in July the increase in the national insurance threshold will benefit 30 million working people, with a typical employee saving over £330 a year.
Cost of Living Increases: Pensioners
Debate between Thérèse Coffey and Alan Brown(2 years, 1 month ago)
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Alan Brown
Of what the Secretary of State calls the £9 billion package, how much is provided by the Treasury and how much is a loan to consumers that has to be paid back?
Dr Coffey
The hon. Lady asks a valid question. As I have said to the House before, tackling the cost of living and poverty more broadly is shared across Government. Although that may come under our umbrella—recognising our general role in support through the welfare system—my right hon. Friend the Secretary of State for Business, Energy and Industrial Strategy leads particularly on items to do with energy and fuel poverty more broadly. I will ask him to contact her.
That leads me on to pension credit, which has been highlighted as a passport to a range of other benefits, including free TV licences, help with council tax and NHS dental treatment. Together, those are making a real difference, reflecting the Government’s commitment to supporting pensioners and continuing the work of successive Governments since 2010—when the Conservatives took office—to tackle and alleviate pensioner poverty.
The facts speak for themselves. The latest figures show that 200,000 fewer pensioners are in absolute poverty than in 2010, with levels of material deprivation having fallen from 10% to 6%, a record low. It is because of our commitment over that time and policies such as the triple lock that, from next month, the full yearly basic state pension will be more than £2,300 higher in cash terms than it was in 2010. In fact, no Government have paid more to pensioners than we will this year: £105 billion alone through the state pension. When we include all the other pensioner benefits, that rises to £129 billion a year.
Our aim over the two years of the pandemic has been to give fairness to pensioners and taxpayers, recognising what has happened with covid. For 2021-22, we protected the value of the state pension by legislating to secure and increase the state pension by 2.5%, despite a decline in earnings and inflation rising by just 0.5%. Had we not acted, the state pension, by law, would have remained frozen. Again, through the Social Security (Up-rating of Benefits) Act 2021, which Parliament passed last November, we legislated to temporarily suspend the earnings part of the triple lock in 2022-23 for one year. As I outlined at the time, that was in response to exceptional circumstances caused by the distorting effects of the pandemic on the earnings statistics.
Pensions will still rise by 3.1% next month. That reflects the inflation index that has been used consistently for many years, so over the past two years, pensions will have risen by a total of 5.6%. Next year, we will return to implementing the triple lock in the usual way for the remainder of the Parliament. I reinforce that full commitment, and whatever the right hon. Member for Leicester South may suggest—he may be trying to score points on politics, which, as the shadow Secretary of State he is absolutely entitled to do—I want to make sure that he avoids scaremongering.
Alan Brown
I welcome the Secretary of State’s commitment to reinstating the triple lock. Given that the Chancellor said this time that 8% was unaffordable and that that was £30 billion that we could not afford, is she saying that if inflation is at 8% when the Government do the measurement, they suddenly can afford to pay the £30 billion to pensioners?
Dr Coffey
I am not aware of any Minister trying to say to people that we did this because it was unaffordable. As a result of the pandemic, there was a statistical anomaly relating to earnings. We also understand the balance relating to intergenerational fairness, as has been outlined. At the time, however, we very much highlighted the statistical anomaly.
As a result of our actions, I believe that the state pension continues to be a strong foundation from which people can build additional savings for their retirement. We are seeing a thriving private and workplace pensions market, fuelled by the success of automatic enrolment, which transformed pension savings for more than 10.5 million workers. That is creating even firmer foundations for a robust pension system to ensure that not just today’s pensioners, but those of future generations are protected and supported. I know that, as a country, we will continue to build on the progress that we have made over the last 12 years under Conservative Governments, so that in the next 12 years, and in decades to come, pensioners will be able to enjoy a secure and dignified retirement.
We also know that a minority of pensioners choose to stay working beyond the standard retirement age. They do not pay the standard employees’ national insurance on their earnings, even though employers do if they earn above the threshold. As for the NHS and social care levy being introduced through national insurance, it is appropriate for anyone working at all, including pensioners, to contribute, bearing in mind that they will do so only if their earnings are at or above the regular threshold. I believe that will be about £190 a week, which is close to nearly £10,000 in earnings a year.
Universal Credit and Working Tax Credits
Debate between Thérèse Coffey and Alan Brown(2 years, 7 months ago)
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Dr Coffey
As I will probably say a bit later as well, this was indeed a temporary uplift, recognising the financial impact on people newly unemployed and that the uplift would be somewhat of a cushion for their financial circumstances. However, do bear in mind all the other support that we have given to help families get back on their feet, all the other elements that we have used to help people manage the cost of living, as well as the extra welfare grants that we targeted specifically through local councils. They have all been actions to help people, and we are helping people back into work, and better-paid work.
Alan Brown (Kilmarnock and Loudoun) (SNP)
Will the Secretary of State give way?
Dr Coffey
I am going to make a little more progress and then I will come to the hon. Gentleman.
Those foundations meant that we had the fiscal firepower and responsive welfare system to take decisive and unprecedented action in the face of the covid emergency. We delivered a package of over £400 billion to support the British people and businesses through the economic shock and injected over £7 billion extra into the welfare system, increasing local housing allowance rental support by nearly £1 billion, as well as over £400 million of targeted grants for local government to directly help the most disadvantaged and vulnerable families in local communities.
Alan Brown
If a constituent comes to my surgery saying that they cannot afford to eat and have to go to a food bank because of the removal of the uplift, does the Secretary of State think they will feel any better when I say, “It’s not a cut; it’s just the removal of a temporary uplift”? What does she say to constituents who are on universal credit for the first time? They will have no idea that this cut is coming.
Dr Coffey
We have communicated once already with recipients of the universal credit temporary uplift. That has already gone through. The second message is under way, and the third message will be done. I think that we have taken responsible action to make sure that people realise that this change is coming, but of course the hon. Gentleman’s constituent will still be engaging with their work coach about how we can perhaps help them into better-paid work than they had before.
Oral Answers to Questions
Debate between Thérèse Coffey and Alan Brown(3 years, 3 months ago)
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The Secretary of State for Work and Pensions (Dr Thérèse Coffey)
Tackling poverty and levelling up opportunity will always be a priority for this Government, while using universal credit, which works for the labour market, to encourage people to move into and progress in work. There are several measures of poverty in the annual publication “Households below average income”—which is based on the annual family resources survey—of which absolute poverty before housing costs is the measure on which the Government most focus. Since 2010, 400,000 people have been lifted out of absolute poverty, including 100,000 children, and additionally, the rates of combined material deprivation and low income for children were at their joint lowest, at 11%, in 2018-19.
Alan Brown [V]
Child poverty is a disgrace in the UK and it is strongly linked to welfare payments. Quite clearly, more people are going to be pushed into poverty if the Tory Government continue with their planned cut to the £20 uplift in universal credit and the working tax credit. Ministers have ducked this all day, but given that the Government did not vote against the motion last week, they have a duty to honour that motion, so will the Secretary of State confirm what discussions she has had with the Chancellor about retaining the vital £20 uplift?
Dr Coffey
I updated the House in November and did say that we would be reviewing this in the new year. That is exactly what we are doing, and I am actively considering with the Chancellor the best way to continue to try to support people who are impacted on strongly by the economic impacts of this pandemic.