Oral Answers to Questions

Debate between Tom Blenkinsop and David Mowat

Tuesday 15th November 2016 Commons Chamber

[David Mowat]

In a previous answer, I made the point that every local authority should be engaging with its STP, and the NHS must ensure that that happens. That is not the same as saying that every local authority has a veto on the STP, which was the implication of the hon. Gentleman’s point.

[Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)]

7. What assessment he has made of the effect of changes to local authority social care budgets on the level of delayed discharges from hospital.

[The Parliamentary Under-Secretary of State for Health (David Mowat)]

The Government are giving councils access to a further £3.5 billion for social care by 2019, which will mean a real-terms increase over the lifetime of this Parliament. The causes of delayed transfers of care are complex and, frankly, vary considerably by local council.

[Tom Blenkinsop]

The Care Quality Commission has commented that social care is on the verge of collapse. The Government have had six years of warnings in relation to this matter, yet they have cut £4 billion from the social care budget. Will the Secretary of State for Health be talking to his colleague the Chancellor of the Exchequer to ensure that the £4 billion is replaced in the autumn statement?

[David Mowat]

The system is under pressure but we also know that the best way to achieve the best results is faster integration, and not just money. I will give the hon. Gentleman an example. There is a massive disparity between councils. The best 10% of councils have 20 times fewer delayed transfers of care than the worst 10%. It is not just about money, as the budgets are not 20 times different. Indeed, many councils have been able to increase their budgets, including Middlesbrough.

Community Pharmacy in 2016-17 and Beyond

Debate between Tom Blenkinsop and David Mowat

1st reading: House of Commons
Thursday 20th October 2016 Commons Chamber

[David Mowat]

Yes—modern, efficient and oriented towards excellent patient care.

[Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)]

My constituency lies within the South Tees clinical commissioning group’s area, which is one of the pilots for the roll-out of the minor ailments service. The scheme was brought in due to the closure of minor injuries units at Guisborough and East Cleveland and medical centres at Park End, Skelton and Hemlington —all in my constituency. We are now seeing a shortfall in national vanguard funding for the minor ailments service and lack of GP provision in the region. What on earth is going on with primary care?

[David Mowat]

I do not wholly understand the thrust of that question. I assume that the hon. Gentleman, like others in this House, is welcoming the fact that we are rolling out a national system on ailments, delivered by pharmacists. As the hon. Member for Central Ayrshire (Dr Whitford) said, that is the future.

Energy Bill [Lords]

Debate between Tom Blenkinsop and David Mowat

Monday 14th March 2016 Commons Chamber

[David Mowat]

I rise perhaps early in this debate but, in the absence of alternatives on this side of the Chamber, I am happy to follow the hon. Member for Aberdeen South (Callum McCaig). I agree with much of what he said about carbon capture and storage, but my comments will be about new clause 10.

I do not agree with the thrust of new clause 10 and want to set out to the House why not, but first let me be clear: I, like possibly everybody in this House, also regard man-made climate change as a clear and present danger. The concern I have, though, is that we in this country are acting increasingly unilaterally in what we are doing to fix it. Indeed, the emissions trading system was an attempt to find a pan-European solution to a pan-European problem and I do not want us to turn our back on it.

I speak also for the 900,000 people who work in energy-intensive industries in this country and the many other millions of people who work in manufacturing industries. The central premise of my remarks is that I do not believe it is possible to rebalance our economy, to have a march of the makers and to do more in the north of the country predicated on electricity prices that are approximately double what they are in continental Europe. Of course, nobody in this House wants higher electricity prices, but the fact is that some of our actions are resulting in higher electricity prices, in so far as similar actions are not taken by our trading partners. This morning, our energy-intensive industries were paying something like 9p a unit of electricity; in Germany and France, they are paying 4p a unit. Broadly speaking, the gap between UK and EU electricity prices is 80% to 90%. I am an MP for the north of this country. I want to see manufacturing re-established much more strongly in the north, but it cannot be re-established on the basis of differentially higher electricity prices.

[Tom Blenkinsop]

In reference to new clause 10, it is quite obvious that the market in the European ETS is set, yet we decided as a country—or rather, the Government decided—to introduce the carbon price floor, which exceeded the EU ETS, so this is an issue for those on the Government Benches. Our European competitors also weight the cost of energy far more to the consumer than to industry, which is ultimately a Government decision, and by and large the costs are generally the same, varying from country to country.

[David Mowat]

The hon. Gentleman makes two points, the first of which is about the carbon price floor. As it happens, I do not support policy in that area. The consequence of that policy is that we are now importing electricity produced on the continent by power stations that do not pay the carbon tax at the level we do. As my right hon. Friend the Member for Wokingham (John Redwood) said earlier, that is no sort of economic and industrial policy. I have forgotten the hon. Gentleman’s second point. Perhaps he could just remind me.

[Tom Blenkinsop]

It was about the differential. The distribution of costs is much more on the consumer in EU member states.

[David Mowat]

That is true of Germany in particular. Apparently—I am not an expert in this area, but I hear Ministers from the Department for Business, Innovation and Skills talking about this—there is an issue with state aid, which does not apply to Germany because it started doing that in advance of state aid rules being set up, which is why it can charge such a differential and apparently we cannot. I agree that that is unsatisfactory.

I was talking about the 900,000 jobs in energy-intensive industries that we in this place need to be cognisant of as we legislate and move forward. These are jobs in steel and what is left of our primary aluminium industry—there were three smelters in this country until a few years ago; there is now one left, in Scotland, and a consultation is under way on its closure. This stuff matters. Of course, so does climate change. My only point is that we must get it right. There is a balance to be struck, and the people who pay for that balance cannot be the people who work in some of those industries.

I have four points to make about what I believe is an increasing difference between the approaches of the United Kingdom—with our climate budgets and our Climate Change Act 2008—and the European Union. The first relates to the Paris agreement which was reached in December, and which we have discussed in the House before. Some people describe it as a triumph, and in many respects it was. I personally do not think that it will be enough to limit the temperature rise to 2.7°; I think that that is an optimistic analysis. However, the key fact that we, as legislators, need to understand is that the United Kingdom did not have a submission to the “intended nationally determined contribution” process. Europe did, and Europe’s submission was a reduction in carbon emissions by 40% over 40 years. The UK is part of Europe, and it is therefore implicit that we must do the same, but the commitment for which we have legislated is to reduce emissions by—

[Tom Blenkinsop]

I recognise that the hon. Gentleman is talking about individual states’ emissions and Europe-wide emissions, but I have a responsibility for people who work in energy-intensive industries, and I know that a far more acute problem for the Government is the problem of Chinese dumping. Of course we cannot talk about that now, but it is far more serious than anything that it coming out of the European Union.

[David Mowat]

I agree that Chinese dumping is an issue. I also agree that business rates are an issue. However, I think that the hon. Gentleman is wrong if he is suggesting that energy prices are not an issue as well. The steel industry, and indeed the aluminium industry, is not under such pressure in parts of Europe as it is here.

[Tom Blenkinsop]

What the hon. Gentleman is saying contradicts comments from Eurofer and UK Steel. The two primary issues for energy-intensive industries, especially the steel industry, are market economy status for China and Chinese dumping. I am sure that the hon. Gentleman will return to the point about the EU emissions trading system, but those are the main concerns of the industries themselves.

[David Mowat]

The hon. Gentleman’s position strikes me as rather odd. I agree with him that the ETS status is important, that dumping is important, and that business rates are important, but, as is made clear in report after report—there is one from the aluminium industry in my office now—so are energy prices.

I do not think that I am making a massively controversial point. I am merely saying that in an industry that uses significant amounts of electricity, it is not a competitive advantage if our electricity costs more than other people’s. I agree with the hon. Gentleman that Chinese dumping is probably more significant, but we are talking about economics, and in economics everything happens at the margin. The stuff that I am talking about matters to our manufacturing industry. My central point is that if we are intending to have a march of the makers that involves a rebalancing of industry predicated on high electricity prices, it is going to be tough.

As I was saying before the hon. Gentleman’s interventions, the cross-European Paris INDC submission is about 50% less onerous than the requirements of our own Climate Change Act. When I first saw that statistic, I thought it odd. Why had we allowed this to happen? Given that we have a stringent, rigorous and, in many respects, very good process involving carbon budgets driving down emissions, and all that goes with that, why did we become involved, at a big world summit, in a European submission that was so feeble? Although the requirements of the European submission are so much lower than those of the UK, in terms of the Climate Change Act, it is not allocated by country, even now. I believe that that process will start this year, or perhaps next year.

My second point relates to the European emissions trading system itself. New clause 10 was deemed necessary because it was felt that the system was not acting as enough of a brake on carbon emissions. The European price of carbon—which is implicit within the system—is too low: it is about €5 a tonne, as opposed to the €23 a tonne or so that we are paying. In 2013, precisely that point was debated in the European Parliament. It was proposed, in an amendment, that the emissions trading system should be “re-baselined” in a way that would have made it meaningful. The amendment might have prevented the need for a carbon price floor in the UK, and created a carbon price that properly reflected where the market needs to be in order to drive actions. However, the European Parliament did not pass it, probably in response to the vested interests of big manufacturers in a number of big countries in Europe. I think that that was a pity.

As a consequence, here we are now, saying that the ETS is not fit for purpose, that the accounting that it implies—which was intended, in the Climate Change Act, to serve as a way of controlling generated power—does not work, and that therefore we are doing something different. However, the right answer is not to turn our back on the European system. I am a Conservative. I may be an “inner”, but only just. It is odd that those in the Opposition parties who are deeply committed to the European ideal should turn their backs on this European solution.

My third point is that there is no country-based reporting or control of emissions in Europe. Since 1990, Austria has increased its emissions by 13%, Ireland has increased its emissions by 7%, and Holland has kept its emissions static. During the same period, the United Kingdom has reduced its emissions by some 28%. If the European Union were serious about getting to grips with emissions, and getting to grips with individual countries that are tackling the problem, it would have addressed that fact.

My final point is that we are seeing dysfunctional member state behaviour. Germany and Holland are building brand-new coal-powered stations—lignite-burning stations. I believe that those countries not only do not engage in carbon capture and storage, but have made it illegal, which does not suggest that they understand the challenge that must be faced.

I have just been given a note saying that I should wrap up. Let me end by saying that, while there is no doubt that we all agree that climate change is a clear and present danger, we must bring the rest of the world with us, and by turning our back on arrangements such as the European emissions trading system and allowing the EU to put a submission to the Paris COP talks that is frankly feeble, we are doing the opposite. We will not solve the problem of global warming by fixing our 1.5% of total global emissions.

Onshore Oil and Gas

Debate between Tom Blenkinsop and David Mowat

Tuesday 26th January 2016 Westminster Hall

[David Mowat]

That is a strong point and I agree with it. It is extremely important that, as in the US, there are no methane emissions. We have seen over and again in places such as Pennsylvania that methane is not emitted and that some of the scare stories are not true. I am sure that when the Scottish Government conduct their pragmatic and responsible review of the industry they will find that out for themselves.

In the US—I will not repeat my points—there are two elements in what cheap energy can do in manufacturing. The US has created around 200,000 jobs in that industry but, more important, the estimate is 1 million jobs in the onshoring chemicals industry in the US eastern seaboard. The transformation is extraordinary. It is re-shoring industry from Asia, China, Europe and, frankly, the UK.

Organisations make marginal decisions—this is not about closing Teesside and moving it to the US. When it comes to the marginal decision of where to open the next production unit, it will not be in Grangemouth, Teesside or Runcorn, but in Pennsylvania or Cleveland because that is where energy prices and feedstock prices are so competitive that more money can be made. We need to be cognisant of that. We sometimes talk in this House as though it is a new industry, but it is not.

The question arises—it is a fair one—of whether that applies to the UK. I have heard it said many times that things are different in the UK. It is true that we have a smaller manufacturing base and a much smaller chemicals industry, so perhaps it will not be so dramatic. People sometimes say, “Well, US gas prices have reduced by 70%, but that can’t happen here because we are on a European grid.” Generally speaking, when there is more of a commodity, the price falls. It is true that we have a European gas price and a European hub, but we had a global market for oil and look at what shale eventually did to the oil price. We are still living with that.

[Tom Blenkinsop]

I take on board what the hon. Gentleman is saying about a sheikhs versus shale fight, but the reduction in general fossil fuel prices, because of the online, downstream effect of renewables in the last 10 years, has also had an effect on driving down fossil fuel prices. The future of shale could be very beneficial to energy intensives because of cost, which is at least 50% cheaper than conventional gas. In addition, most of those industrial sites in Britain are located close to where those feedstocks are found.

[David Mowat]

I meant to say at the start that with current prices where they are, I do not think we will see a massive upkick in the UK’s shale industry. I think that will happen where shale is available near a chemicals site—INEOS in Runcorn and in Grangemouth is an example—because the costs and economics are different.

[Tom Blenkinsop]

Rather than seeing shale as a means by which to reduce consumer prices for heating boilers, for example, we should also have an industrial strategy that targets the use of shale gas for cheap energy-friendly intensives because that would be a cheap benefit.

[David Mowat]

My point was more about feedstock. I have no problem with an industrial strategy along those lines, although I make the point gently that the million jobs that were created on the eastern seaboard of the US were the result not so much of industrial strategy, but of a massively cheaper economic model and business case and all that goes with that. We need to learn from that.

The Chairman of the Select Committee on Environment, Food and Rural Affairs, my hon. Friend the Member for Tiverton and Honiton (Neil Parish), made a number of points about the fact that we are running out of gas. This is not principally a discussion about whether we should have gas versus renewables. It is gas versus coal, as I said earlier, in environmental terms. Gas production is now 70% lower than five years ago and we are importing it from Qatar and principally from Norway, but increasingly from Russia. Centrica has a contract with Gazprom and around 10% of our gas will come from Russia by 2020. We need to understand that and be comfortable with the implications.

Coalfield Communities

Debate between Tom Blenkinsop and David Mowat

Tuesday 28th October 2014 Commons Chamber

[Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)]

I was not going to intervene, but, as the chair of the all-party parliamentary group for the steel and metal related industry, I shall do so. The hon. Gentleman knows that this Government unilaterally introduced the carbon price floor, which constitutes a higher tax than has been imposed by any of our competitors in the European Union. That is one of the main reasons for the contraction of the industry, and also a big reason for the fact that energy-intensive industries in general have contracted in the UK.

[David Mowat]

I thank the hon. Gentleman for that intervention, and he knows that I more than partially agree with him about the carbon price floor and the impact on energy-intensive industries, but is it right to pretend that the vote that took place on 4 December did not matter? The hon. Member for Barnsley East (Michael Dugher) did vote with Baroness Worthington and all of those people for the accelerated closure. That is what happened and I think it was a key moment in the history of the Labour movement that that vote took place with apparently so little concern.

The hon. Member for Middlesbrough South and East Cleveland (Tom Blenkinsop) mentioned the carbon price floor and that is part of it, as is the subsidy regime that we have put in place. The closure of coal stations is being driven by the large combustible directive and we are pursuing that, but it is worth saying that we are increasingly acting unilaterally in this regard. We should remember that we are the only country in the EU that is cutting the amount of coal we use. That is an extraordinary statistic and people should reflect on that, particularly those on the Labour Front Bench.

On 4 December there was a Labour three-line Whip for a vote on Lords amendment 105. That amendment said that the emissions performance standard—which means that new coal must, effectively, have carbon capture and storage—was to be applied to existing coal stations. That is what Opposition Members were whipped through the Lobby to support, and I think it is incredible. Apart from the effect on fuel poverty, we have seen the effect on Tata Steel and we are seeing the effect on the coal industry. The coal industry around the world is prospering. I shall say it again: no form of energy increased in absolute terms as much as the coal industry did.

Energy Company Licence Revocation

Debate between Tom Blenkinsop and David Mowat

Wednesday 3rd September 2014 Commons Chamber

[David Mowat]

I am sympathetic to that view. Countries are acting increasingly unilaterally in the area of climate policy. The fact that the Germans, the Dutch and other countries are building unabated coal power stations at scale raises that question. My honest answer is that we should look at how things develop. Later, I will discuss a vote that took place on 4 December, in which the Opposition went through the Lobby—I do not know whether the hon. Gentleman did—in support of a Lords amendment that would have accelerated the closure of our power stations by bringing in the emissions performance standard for existing stations, rather than just for old stations. That was an extraordinary thing to have happened. The Opposition’s position on coal has, in many respects, been extraordinary.

I want to respond to the remarks of the hon. Member for Llanelli (Nia Griffith) on energy costs. There is a difference between gas and electricity prices. This morning, table 10.2.1 on the website of the Department of Energy and Climate Change, showed that our gas prices for 2013 were lower than median prices in the EU. That is not the case for electricity, and I am pleased that the Secretary of State has asked the Competition Commission about that. However, if we are to debate these matters incessantly on Wednesday afternoons, I think it is worth having a debate based on the facts. I will say this again—hon. Members can intervene on me if they believe it not to be the case—this country has among the lowest gas prices in the EU. If that is the case and if a cartel is in operation, as I have said before, it implies that it is a pretty bad cartel. Nevertheless, let us investigate the industry and have a look.

As I have said about my constituents in Warrington South, what matters are lower prices. The Government have addressed that, just as the Opposition have made suggestions. We want to simplify tariffs and encourage new entrants. We have acted on green levies, and I think the point made earlier about it all being switched to general taxation was wrong. We want better and faster switching.

It is true that the market has been sticky—I am not defending that and it needs to work better. We must make it easier to switch, and some of the things introduced in the Energy Act 2013 regarding compensation to consumers are to be welcomed. In my view, the Opposition policy has three prongs. One is the price freeze, which has been mentioned. The second is what I would generally describe as name calling—describing energy companies as cartels and referring to price fixing and secret deals. All those things are illegal, and if evidence for them exists, it should be brought before the courts. These are public companies, and directors should go to prison if such things are happening. I repeat that if they are happening in the gas market, it is a pretty ineffective cartel, but let us have a look.

The third strand of the Opposition’s policy is that they vote for higher prices whenever there is a vote in this place on how we can influence energy prices. Let me give some examples of that. In 2011, the then Minister was trying to reduce the subsidy for solar panels—solar PV tariffs—from six times grid parity to something like three or four times grid parity. Solar electricity would no longer be six times as expensive as everything else, but four times as expensive. We had a vitriolic response from the Opposition who said that that would see the end of the solar industry and that such subsidies were absolutely necessary. Labour Members trooped through the Lobby to vote against that policy, which was an attempt to minimise the amount of subsidy being given and to reduce energy prices. Well, so be it. That is what happened.

Similarly, we had a debate on the 2030 carbon target. Earlier, the hon. Member for Middlesbrough South and East Cleveland (Tom Blenkinsop) intervened on the carbon price floor. I will not defend that; my view is that it is wrong, but it is also wrong for us to impose unilateral carbon targets. These are not EU laws; the EU is not doing this. Again, however, when the issue was debated on the Floor of the House, Labour Members trooped through the Lobby to oppose it. I can only imagine that there are two Labour parties, and I really believe this to be the case. There is the Labour party up in Hampstead—let us call it the north London set of the Labour party—which thinks all this stuff is great, and the other part of the Labour party that represents constituencies where there is energy-intensive industry, and where 700,000 people have jobs that depend on energy prices. If I were one of those people in the Labour party, I would be a little more sanguine.

[Tom Blenkinsop]

Will the hon. Gentleman give way?

[David Mowat]

Certainly. I was hoping somebody would intervene.

[Tom Blenkinsop]

Let us return to the hon. Gentleman’s point on solar panels. By removing the subsidies from solar panels, the Government decimated the solar panel construction industry that supplied panels to UK homes. We now have massive imports of Chinese products, which mirrors what is happening in the rebar steel industry where there has been an explosion of more than 20% in the number of steel products coming from China. That did not exist two years ago.

[David Mowat]

That is not the intervention I had expected or hoped for. The hon. Gentleman mentioned solar PV, but that policy is not directed at Chinese manufacturing, or anybody else. We do not subsidise British versus Chinese manufacturing, or whatever.

[Tom Blenkinsop]

I am chair of the all-party group for the steel and metal related industry, which met yesterday. We met an industry leader who works at Celsa Steel in south Wales. He commented that what the industry wants is consistency in prices that is long-term and set out, irrespective of whether prices are lower or higher. What we have are fluctuations and the market lacks confidence because it does not know what Government policy is.

[David Mowat]

I thank the hon. Gentleman for that intervention, and ask him to reflect on the fact that I am also chair of an all-party group—the all-party group for the UK aluminium industry. Industry wants lower prices and not higher prices regardless of whether those prices are static or not. Perhaps if he were to reflect on that, he would see that I am right.

The third instance of Labour Members voting, whenever they get the chance, for higher energy prices occurred on 4 December 2013, and this is perhaps the most interesting example. We heard earlier about the closure of coal stations in this country because of the large combustion plant directive. On that day Labour Members went through the Lobbies to support a Lords amendment on the emissions performance standard that would have required all existing stations to stop burning coal within a short period. That would have accelerated the rapid closure of our coal stations, and apparently for green reasons. That was an extraordinary thing to do, and the cost to generation would have been extremely high. As I said, I do not know which part of the Labour party did that, but it is an odd thing to have done.

Before I conclude, I ask Opposition Members to reflect on the three policies they are suggesting: the price freeze, the name calling about persistent cartels, and the fixing of prices and all that goes with that. More importantly, whenever we get a vote in this place, they should think about the impact of that vote on their constituents, and stop supporting unilateral action. I do not agree with my hon. Friend the Member for Monmouth (David T. C. Davies) because we need to take our climate change obligations seriously and follow the EU on that. However, we do not need to continue acting unilaterally in the way that we are doing.

[Tom Blenkinsop]

That is one point on which I agree with the hon. Gentleman. The carbon price floor scheme was unilaterally introduced and no conversation was held with industry. That was introduced by this Government. Labour policy, along with our EU colleagues and within a market, was to maintain a framework whereby we would not make ourselves less competitive than our closest EU competitors.

[David Mowat]

If you will indulge me, Madam Deputy Speaker, I will answer the hon. Gentleman’s point. I have a lot of sympathy with that, but all I would say about that policy, which has now been capped, is that at least it resulted in revenue for the Treasury, which I know is generally regarded as a bad thing by Opposition Members. That is part of what we had to do to pay off the debts we inherited. The other green levies that were voted for and that I mentioned are straight subsidies and they do not result in that and are unnecessary in terms of our carbon commitments. Finally, our carbon per capita and carbon per unit of GDP is lower than the EU average, and a third lower than that of Germany.