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Topical Questions

Volume 628: debated on Tuesday 12 September 2017

Over the last few weeks we have made significant progress across a number of the Department’s responsibilities. We have been discussing the first sector deal, which will involve the Government working alongside life sciences businesses to capitalise on our expert science and research base to make that industry even more competitive. Our reforms of corporate governance, which will ensure that businesses publish pay ratios between chief executives and staff, will help to maintain the UK’s reputation as a confident place in which to do business. We continue to invest in innovation throughout the country through the industrial strategy. In July, I announced the Faraday challenge, a £0.25 billion investment in battery technology in all parts of the country that will boost both research and development and job creation in the industry.

The Secretary of State knows that the concern for Ofgem, even though it has the power, is that energy companies would appeal to the CMA and frustrate the process. What he has not acknowledged today is that, under section 26 of the Energy Act 2010, he already has the power to introduce a price cap if one group of customers is treated less favourably than other customers by an energy supplier. Why does he not seek measures to introduce the power he already has?

Ofgem is the regulator, and it had a report from the Competition and Markets Authority saying that consumers are being ripped off to the tune of £1.4 billion a year. We have a regulator with powers given by Parliament, and those powers should be used. That is the challenge for Ofgem. I would be very surprised and very disappointed if any of the big six, knowing the objectivity of the CMA report, were to protest and appeal against such a determination.

T2. I know the ministerial team has been working hard on this, but the issue with sleep-in shifts, if it is not resolved, is that charities will have to close their doors and the people they support, including those with learning disabilities, will be left without care. Will the Minister update us on the progress on quantifying the back-pay liabilities of those charities and on when an appropriate solution will be delivered? (900810)

Social care providers play a vital role in supporting some of the most vulnerable people in our society, but workers in that sector should be paid fairly for the important work they do. The Government are working closely with providers and worker representatives to estimate the scale of any back-pay liabilities for sleep-in shifts, and we have temporarily suspended HMRC enforcement action while that work continues, and it is continuing as a matter of urgency.

On 27 June, the Secretary of State failed to confirm to me that he would legislate for a price cap to deliver to 17 million customers the £100 saving promised by the Prime Minister if Ofgem did not propose such a cap. On 3 July, Ofgem announced its plans, which fall short of the Prime Minister’s promise, and later stated that a cap is really a matter for Government legislation. I ask again, will the Government now legislate for a price cap to deliver the Prime Minister’s promise?

The hon. Lady is misinformed; Ofgem has not responded formally to my request, and it should act on the evidence presented to it, using its powers. The ball is in its court, and I expect Ofgem to do its job and stand up for consumers.

I am saddened that the Secretary of State is non-committal, because at the same time as we have rising prices, power distributors recently made an average yearly post-tax profit of 32%, paying out share dividends of £5.1 billion. For water, the situation is even worse, as over the past decade companies have made £18.8 billion in profits, paying out £18.1 billion of that as dividends, with Macquarie paying £1.6 billion in dividends alone, while Thames Water incurred £10.6 billion of debt, ran up a £260 million pensions deficit and paid no UK corporation tax. So I ask him: what are the Government’s plans to reform our broken utilities markets?

On the specific point of retail energy markets, a two-year investigation has been carried out by the CMA, and it is now for Ofgem to respond. I hope it will respond and eradicate that deficit; that is the test that Ofgem faces. We have made it clear that we will rule nothing out if it falls short, but I do not want to remove the obligation on it to respond in that way. I hope that the hon. Lady will welcome our intention to publish a consumer Green Paper and that she will contribute to it. This will look across the board—across other utilities as well—to see whether the existing regulatory arrangements are sufficient.

T3. The life sciences industry is worth £64 billion to the UK, and Sir John Bell’s report last week indicated how important manufacturing was. Will the Minister therefore join me in welcoming the opening of the cell and gene manufacturing unit and welcome further jobs in this industry in the east of England, particularly in my constituency? (900811)

We indeed welcome that. Medicines manufacturing is key, which is why we have launched a £146 million medicines manufacturing programme under the industry strategy challenge fund. That includes £12 million for expansion of the cell and gene therapy manufacturing centre. The other centres, a vaccines centre, a medicines manufacturing innovation centre and three advanced therapy centres, are open to competition and could be located anywhere in the country, including in the east of England.

T5. This week’s electricity grid connection deal would make the Cardiff tidal lagoon the UK’s largest renewable energy project, generating some of the cheapest power in the country, and it would be a big boost to Newport, but its potential can be realised only with the Government first backing the pilot project in Swansea bay. When will that happen? (900813)

I do understand the great interest in this matter. As the House knows, I am enthusiastic about renewable technologies, but we have an important responsibility to make sure that they proceed at a price that is reasonable for consumers, who pay through their bills. That is being assessed and I will report to the House when that assessment is finished.

T4. Although wind turbines play an important part in the nation’s energy mix, it is alleged that the quality of life and health of some rural residents is adversely affected by noise emissions. Are the current noise limits and recording methodologies sufficient—I am referring to low-frequency noise and infrasound—or should the methodologies be reviewed? (900812)

Interestingly, the overall balance of the existing peer-reviewed studies suggests that low-frequency sound and infrasound produced by wind turbines is not likely to affect human health significantly. I do, however, accept my hon. Friend’s premise that the potential impact on human health of these turbines is a topical issue, so it will attract further study, both in the UK and abroad, and we are monitoring that carefully.

T9. Will the Minister review the current arrangements for the distribution of the mineworkers pension surplus? I am sure it was never envisaged that the surplus would be so high, so is it not time to re-examine that, and seek to give more money to pensioners and beneficiaries? (900817)

I am aware of the issue and the representations being made on it. I am happy to meet the hon. Gentleman to explore what steps might be available, but he will be aware that pensions are, correctly, run at arm’s length from the Government, through an independent regulator and through the trustees, and so the Government’s ability to determine these things is very limited.

T6. Trading on the world’s markets as a free trade nation after 2019 will be a bit like swimming in the Serpentine on a winter’s morning: bracing and invigorating but a bit heart-stopping if one is not prepared. Will my right hon. Friend the Secretary of State explain how he is gearing up his entire Department to ensure that British industry no longer debates the rights or wrongs of staying in the EU or the single market but is fully prepared, and up-to-scratch with conferences, seminars and all the rest, to trade on the world’s markets? (900814)

My hon. Friend will be aware that my whole departmental team are very active, both in this country and overseas, in setting out the huge opportunities to build on this country’s strengths and be economically successful post-Brexit. I know that that work enjoys his full support.

The growth of new and renewable technologies presents a huge opportunity for the north-east economy but, given the continued uncertainty about the clean growth plan and our membership of and access to the single market, what are the Government doing to encourage business investment in this area?

We will publish the clean growth strategy very shortly, but it is not just a question of simple decarbonisation; we have to decarbonise right across the economy and maximise the economic opportunities for doing that throughout the UK. We also have to ensure that we are not putting a high energy-cost burden on consumers and business and that all parts of Government are committed to the strategy for the long term. When we are able to publish the plan, which will be very shortly, I look forward to debating the issue further with the hon. Lady.

T7. The results of yesterday’s renewables sector auction were very beneficial for my constituency. Will the Minister outline what further developments he has in mind to encourage and support the construction of turbines in the UK? How will we ensure, particularly in northern Lincolnshire, that the skills are there to meet the demands? (900815)

I congratulate my hon. Friend on the news about the funding for the offshore wind farm in his constituency. I assure him that it is our ambition to have a strong industrialised supply chain. We have had great progress in attracting investment—for example, the UK’s first offshore tower manufacturing facility in Scotland is providing the UK’s first towers. I am pleased to say that we are working well with the sector to deliver a sustainable UK-based supply chain under the industrial strategy.

Smulders in North Tyneside is a fine example of a company that is already advanced in its own low-carbon growth strategies. What direct support will the Minister give to businesses such as Smulders under the delayed clean growth plan?

I am sure that the hon. Lady will welcome the fact that we have made available more than £2 billion to support innovation and research and development in the sector. If a company in her constituency has specific projects that it would like to bring forward, I would be delighted to meet her to consider them.

T8. Now that it is autumn, many of our constituents are concerned about the cost of fuel and energy this winter. What can the Secretary of State say to reassure all our constituents that fuel and energy will be accessible for all this winter? (900816)

We still have in this country some of the lower energy prices in Europe, but the major energy companies’ increases for those on the standard variable tariffs are clearly unacceptable. The issue has been identified by Ofgem, which needs to take action to correct it.

Since the launch of the much heralded productivity plan 18 months ago, productivity has plummeted to pre-crash levels. Will the Secretary of State tell us which one part of that productivity plan he feels is responsible for the cataclysmic productivity figures we have today?

The hon. Gentleman is an intelligent fellow and knows that the route to building productivity in this country is to look to the long term to establish, in a serious way, a shared analysis and determination about what is to be done. On skills, for example, I hope he will share our view that by investing in technical education through the new T-levels and extending the hours for which people are educated, we are taking a step towards addressing what is a generational challenge for the UK economy.

More than eight out of 10 British manufacturers export elsewhere in the EU and tariffs or customs delays could have a negative impact. Will the Secretary of State confirm that the Government will seek to negotiate transitional relationships that maintain the economic benefits of the single market and customs union until a new relationship with the EU can be implemented?

It is completely understood that a cliff edge would be bad for business. Companies need to have the confidence to be able to make investment decisions over the next few months and years. That acceptance across Government is welcomed by business.