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Topical Questions

Volume 605: debated on Thursday 11 February 2016

Since the last Question Time, there has been a dramatic fall in the oil price. The Government are clear that the broad shoulders of the UK are 100% behind our oil and gas industry, the hard-working people it employs and the families it supports. The Government have set up the Oil and Gas Authority to drive collaboration and productivity in the industry. We recently set out an action plan to back the export of our world-class skills in oil and gas, and to diversify the economy of the north-east of Scotland, including through investment in exploration, innovation and skills.

Will the Secretary of State outline what progress is being made to secure vital infrastructure investment in the energy sector? Are not thinking for the long term and investing in infrastructure the best way to get secure, low-cost electricity for my constituents in Wealden? Before I forget, I wish the hon. Member for Bolsover (Mr Skinner) a happy birthday.

My hon. Friend is absolutely right. We are tackling the legacy of under-investment, the failure to deliver the next generation of energy projects and the energy security black hole that were left by the last Labour Government. We are getting on with the job of building a system of energy infrastructure fit for the 21st century. We have made substantial progress in securing infrastructure investment. The UK has enjoyed record levels in the deployment of renewables over recent years and it maintains a healthy energy investment pipeline, as is shown in our national infrastructure plan.

Last week, a Bloomberg report showed that the UK is the biggest beneficiary of European Investment Bank funding for clean energy projects and we are the third largest recipient of the new European fund for strategic investments, which is being spent mostly on energy. Some 70,000 jobs are expected to be created as a result. Does the Secretary of State agree that that is further evidence that Britain should stay in the European Union?

There are, of course, tremendous benefits from a united energy market, and I am interested and excited to work on the progress of the energy union.

T4. Will my right hon. Friend ensure that energy companies automatically switch their customers to the cheapest tariff possible, because many constituents find the current system confusing and somewhat disappointing? (903612)

My hon. Friend puts his finger on a sensitive and tricky issue about delivering the best for consumers, which is what the Government want to achieve, while also encouraging competition. I ask him to wait for the Competition and Markets Authority report, which I hope will address the issue, and then I believe we will make some progress.

At Prime Minister’s questions on 27 January, the Prime Minister said about oil and gas:

“I am determined that we build a bridge to the future for all those involved”—[Official Report, 27 January 2016; Vol. 605, c. 260.]

Following his visit to Aberdeen, it is clear that that bridge will be built on the cheap. Industry needs meaningful support in the forthcoming Budget, so can we have less talk about the broad shoulders of the UK, and will the Secretary of State put her back into delivering the change we need?

The hon. Gentleman is being a little churlish about the significant investment that the broad shoulders of the United Kingdom are putting into the north-east, particularly to ensure that jobs and skills are secured. I am working across Departments, and chairing a ministerial group, to ensure that those skills are preserved, and I will be working with the Department for Business, Innovation and Skills to ensure that we have a taskforce to take that forward. I hope he will also welcome the £250 million put into Aberdeen for its city deal, but there is a lot of progress to be made and a lot more to take forward.

T6. Will the Secretary of State consider how the current system model, including the National Infrastructure Commission, National Grid and Ofgem, could be reformed to make it a more flexible and independent part of an energy infrastructure that is fit for the 21st century? (903614)

My hon. Friend has a great deal of experience in this sector, and he will be aware, as I am, that National Grid as system operator has played a pivotal role in keeping the energy market working. As our system changes, we must ensure that it is as productive, secure and cost-effective as possible. There is a strong case for greater independence for the system operator, to allow it to make the necessary changes, and we will work alongside the National Infrastructure Commission to consider how best to reform the current model.

T2. As Valentine’s day approaches, will the Secretary of State support the climate coalition “Show the love” campaign and encourage all Members to wear the green hearts that we have been sent, which symbolise how so much of what we love, wherever we are in the world, is affected by climate change? (903610)

That is a very interesting approach, and it is always good to welcome Valentine’s day. Perhaps the hon. Gentleman could give one of those hearts to the birthday boy who is sitting in front of him.

T7. Dozens of my constituents are employed in the solar power industry, and I meet them regularly. May I add my voice to that of my hon. Friend the Member for Cheltenham (Alex Chalk) in asking the ministerial team to continue to assess and analyse what effect the changes to solar subsidies are having on microbusinesses and small and medium-sized businesses that are engaged in the solar industry? (903615)

As my hon. Friend knows, the solar industry is a great UK success story, and we are set to exceed massively our targets for solar power, achieving almost 13 GW of solar energy capacity forecast for 2020. With our revised tariff we expect up to 220,000 brand-new solar installations between now and 2019, which will give a rate of return of nearly 5% to well-sited installations.

T3. Pinsent Masons recently published a report on the prospects for the oil and gas sector in 2016, which highlighted that 67% of oil and gas executives see the UK as a prime opportunity for growth over the next three years, under the right fiscal environment. What fiscal support is being considered for the oil and gas industry ahead of the Budget? (903611)

The hon. Gentleman will be aware that fiscal changes are the responsibility of my right hon. Friend the Chancellor of the Exchequer, but I reassure him that we take seriously the support that we want to give to the UK continental shelf and all the jobs around it. I chair the cross-ministerial group, which also includes a member from the Treasury.

The new Anglia local enterprise partnership’s oil and gas taskforce has developed a package of measures to support businesses and workers at this difficult time. Will the Secretary of State consider a proposal from the LEP for the Government to match the local funding that it is providing?

I hesitate to agree to any financial commitments in this Chamber, but I am always interested in looking at proposals from my hon. Friend.

T5. What progress is the Secretary of State making on getting state aid consent for the strike price for island communities in offshore wind projects? When does she expect to go out to consultation on what that strike price should be? (903613)

We absolutely appreciate that industry, across all technologies, needs clarity on Government policies in future allocation rounds so that it can manage its investment decisions, and we aim to support that. We are currently working with Her Majesty’s Treasury to finalise the budget for future auctions, and we will set out more information as soon as we can.

I thank the Minister for her robust and informative response to my Adjournment debate about the Humber estuary on Tuesday evening. May I draw her attention to a statement issued to the local media by DONG Energy? The statement is wet, woolly and non-committal. Will she reaffirm her determination to be involved in the future developments in northern Lincolnshire?

I pay tribute to my hon. Friend for his excellent support for his area. I was delighted to respond to him in the Adjournment debate, and I can absolutely assure him that there will be no wriggle room; in order for the UK to benefit properly from our decision to support new offshore wind, we will require UK content and the UK supply chain be a key beneficiary of it.

T8. What plans does the Secretary of State have to allow large-scale solar generators to apply for a contract under the contract for difference mechanism? (903616)

We do not have plans at the moment for a large-scale solar contract. What we have found is that the large-scale ground mounted solar industry has confirmed to us that it does not need any subsidy and that because costs have fallen to such a great degree, it can continue, subject to planning permission, to develop and to supply electricity without a formal contract. That is surely in the better interests of the taxpayer and the bill payer, if it can be achieved.

Given that Cheshire has a centre of excellence in relation to the nuclear industry, what steps are the Government taking to ensure funding for new nuclear centres in the universities in the north of England?

My hon. Friend may be aware that in the recent spending review one area where we did get an increase was in innovation. Specifically, we have allocated half of the new increase for small modular reactors. We are working on delivery in that area with universities and with Innovate UK and we will continue to do so.

T9. The Select Committee has found that scrapping the Government’s support for carbon capture and storage technology puts at risk the UK’s international commitments on tackling climate change and makes it more expensive to do this. We have also lost out on about £250 million-worth of EU investment. Can the Minister just explain to me how this makes sense? (903617)

Our view is that CCS has a potentially important role to play in long-term decarbonisation. We continue to invest in the development of CCS; we are investing more than £130 million to develop the technology through innovation support. My Department is looking at what our new policy is to develop this important technology.

T10. Electrical network losses from theft and so-called “copper losses” are estimated by the Department to cost consumers in excess of £3 billion annually. What recent analysis has the Department undertaken on the potential contribution of power line carrier technology to address this issue? (903618)

This area interests me a great deal. Obviously, it is a complete disaster if pipeline tapping—in effect, stealing—takes product away from consumers which then has to be paid for. This is a vital area and I am looking at it. I am not familiar with the proposal the hon. Gentleman has mentioned, but if he would like to write to me about it, I would be happy to take a look at it.

Historically, all mining has been prohibited under the city of York. City of York Council passed a motion to say that no licences should be given for fracking, yet a licence has been given. What guarantee will the Minister give that the local voice now will determine what happens?

I am grateful to the hon. Lady for giving me a chance to explain that the licence is not a licence to frack—that sounds a bit Bond-like; it is simply a licence to be able to consider the seismic opportunity of the shale gas that is potentially underneath. It is absolutely not a guarantee that anything will happen at all. There is then a whole planning process to go through, including environmental assessments, health and safety assessments and so on. And there is a very clear local planning process, which is very well communicated and with which she will be very familiar.

This morning, energy experts reported that we were way behind on the target emission levels set at the Paris COP and in the fourth carbon budget. This comes only weeks after the important agreement in Paris. How on earth can this be the case?

The hon. Gentleman might be aware that the Paris agreement called for temperature increases to be limited to a maximum of 2°, yet the intended nationally determined contributions—the voluntary contributions from each country—only reached 2.7°, so that comes as no surprise. Everyone who signed up to the agreement—let us celebrate the fact that nearly 200 countries did so—knows that there is more work to do. It is not the end of the journey; it is just the start.