House of Commons
Monday 20 September 2021
The House met at half-past Two o’clock
[Mr Speaker in the Chair]
Oral Answers to Questions
The Secretary of State was asked—
Veterans and Military Charities: Additional Support
The Government are committed to providing a gold standard of support for veterans. The additional £5 million announced on 6 September followed a meeting of the Defence Secretary, the Secretary of State for Health and Social Care, me and the service charities to discuss measures to mitigate the impact of events in Afghanistan. That is on top of the £20 million already going to armed forces charities this year.
Sadly, some veterans end up living on our streets. The solution is not just to give them a bed, a job or a roof over their head; what they need is real, targeted mental health support. Will my hon. Friend please advise me what the Government are doing to make sure that our brave veterans get the targeted mental health support they richly deserve?
I am pleased to confirm that, in the form of Op Courage, we have bespoke mental health provision in the NHS, now running at £20 million this year. But this is not just about money; it is about ensuring that veterans are part of that care, and as peer support workers in Op Courage, they are.
Will the Minister explain specifically how these announcements will help the veterans community hub recently opened in Newton Aycliffe by the lord lieutenant, Sue Snowdon, and veteran Scott Robertson? That fantastic facility provides mental health support, occupational rehabilitation and sports therapy. Will the Minister commend all those involved with the project, but specifically veterans Scott Robertson and Tommy Lowther? While I am about it, will the Minister also thank 100-year-old RAF veteran William Cooksey, who completed a 100-mile walk—10 miles for each of 10 days —to support County Durham and Darlington NHS Foundation Trust, raising over £3,000? If the Minister would like to come and visit, he would be very welcome.
I am delighted to put on the record my thanks to veterans Scott Robertson and Tommy Lowther, and to the 100-year-old RAF veteran William Cooksey. They are clearly the best of us. If the Newton Aycliffe hub needs support, it should consider applying to the armed forces covenant trust fund. Of course I would be delighted to visit.
I know that my hon. Friend’s top priorities are the health and wellbeing of those people who have sacrificed so much for our country, especially in respect of mental health. Can he confirm that, if people who require specialist help were to reach out to NHS Operation Courage, they would get the bespoke care packages that they need and desperately deserve?
The Minister must know that 79% of charities believe that the responsibility to support veterans should lie more with the Government and the armed forces themselves. Will he commit to looking in detail at Labour’s proposed duty of care amendment to the Armed Forces Bill, which aims to do precisely that?
The Ministerial Covenant and Veterans Board is supposed to drive forward and co-ordinate better Government support for members of the armed forces, their families and veterans. The Scottish Government have asked repeatedly for that group to be reconvened. When can we expect its next meeting to take place?
Combat Stress, a charity supporting veterans’ mental health, has seen its income fall by £6 million in the current financial year. Will the Minister therefore accept that the Government’s recent announcement of £5 million for the entire sector is simply not enough to support veterans’ mental health?
Operation Warm Welcome
The whole Government are committed to ensuring that those Afghan nationals evacuated under Op Pitting are properly supported in the UK. Defence is supporting the cross-Government effort, Op Warm Welcome, and we are extending a hand of friendship in the spirit of compassion, comradeship and community.
I welcome the incredible efforts of our troops undertaking one of the largest evacuations in modern history and now working to extend that hand of friendship to those brought back. Will my hon. Friend join me in thanking them all for responding with such professionalism to the challenges faced?
For those eligible for the Afghan relocations and assistance policy scheme, arriving in the UK under Operation Warm Welcome has left friends and colleagues of our armed forces stranded in hotels without contact, support and help at the very time they need it. In the light of the outstanding skills of our armed forces, will the Minister talk to the Home Secretary about how his Department can lead on Operation Warm Welcome for those arriving under the ARAP scheme, so the right connections are made with those who served alongside these brave men and women to build vital bridges at each stage of the resettlement journey?
We are extending that warm hand of welcome. Of course, there is the requirement for some people to be in quarantine, but I can assure the hon. Member that a very thorough effort is being put in place to ensure that that hand of friendship is extended to all who have arrived.
Mr Speaker, thanks to your very kind invitation, 120 members of the armed forces who served will be welcomed to Parliament on 20 October, immediately after Prime Minister’s Question Time. I hope all Members of the House will be there to give them a very warm welcome. I very much hope we are giving just as warm a welcome to all the refugees coming back from Afghanistan. There are 100 in my constituency. How can we find a way to give them a warmer welcome? Could local communities, for example, find ways of welcoming them to barbeques or other ways to make them feel at home?
I am grateful for that question. I would like to put on record my thanks to my hon. Friend’s good offices for making that happen. Of course, there will be a very significant role for the wider community and the third sector to play in welcoming our Afghan friends. I recently visited an Afghan cricket team that had been put together by a local pastor. The whole community is quite demonstrably coming together.
The Scottish Refugee Council recently called for the UK Government to extend Operation Warm Welcome to Afghans who are still stuck in the asylum process waiting on decisions or who have previously been declined protection. Can the Minister confirm what discussions he has had with colleagues across Government on extending the programme in such a way?
Daesh and Global Affiliates
Thank you, Mr Speaker, for hosting the G7 in Chorley at the weekend, and for the warm welcome you gave to many of my colleagues from across the House in that excellent showcase of both Lancashire and the United Kingdom.
The UK plays a leadership role in the global coalition, which is working to secure the enduring defeat of Daesh in Iraq and Syria. We also remain committed to supporting counter-Daesh efforts beyond Iraq and Syria. The UK continues to work to counter Islamic State in the Khorasan province through means other than military presence in Afghanistan, working with partners in the region to diminish the threat it poses. We will continue to do what is necessary to protect the British people, our allies and partners.
May I give the Secretary of State a big warm welcome back to his place as Secretary of State at the Ministry of Defence? Does he agree that it is in the interests of both Pakistan and China to ensure security and to combat radicalisation in the wider region around Khorasan and neighbouring provinces? To that effect, what discussions has he had with counterparts from both those Governments?
I thank my hon. Friend for his kind comments. I am also delighted that my whole team has remained together on the Front Bench. I cannot remember that happening in any other Department in my time in politics, but it is a good thing to have continuity. It does, however, limit our excuse to say, “We are just getting on top of our brief.”
This is why Afghanistan matters. It is often the keystone or lynchpin in that part of the world. What happens in Afghanistan can ripple throughout the region and further along, as we saw with al-Qaeda in 2001—it is really important. The Minister for the Armed Forces and I will be setting off to the region this week to discuss that with a number of neighbouring countries. Pakistan and China are significant countries in the international community that we have to engage with to make sure that Afghanistan does not go from bad to worse, and that we reverse radicalisation where it appears.
The Secretary of State is right: the biggest threat from Afghanistan is the country becoming once again the base for extremist terrorist groups. The biggest risk is that the British Government give that the same lack of attention and preparation they gave to Afghanistan in the 18 months ahead of the NATO withdrawal, so why on earth is the Prime Minister now cutting back, by more than half, on his National Security Council meetings?
The right hon. Member will be referring to a report by the Joint Committee on the National Security Strategy that he has commented on previously. The report makes a number of those points, some of which I disagree with because, as I have said at the Dispatch Box, the Prime Minister often chooses that, on national security, Departments can generate their concerns and come together with national security Ministers to discuss the issues. It does not always have to be done in a formal NSC meeting; it can be done in a sub-committee, where we sometimes get across even much smaller issues.
The report also makes the point that Afghanistan is not mentioned much in the integrated review, but the right hon. Member will notice that in the defence Command Paper it is mentioned nine times—it is incredibly important. We did not neglect it in the lead-up to the fall of Afghanistan; in fact, we were investing more troops and more people in the last few weeks until we got to the point.
Nuclear Warhead Programme
The replacement warhead programme will allow the UK to maintain our independent minimum credible nuclear deterrent for the foreseeable future. The UK’s sovereign nuclear deterrent exists to deter the most extreme threats to our national security and will remain essential for as long as the global security situation demands.
I have the privilege of representing the Atomic Weapons Establishment in Aldermaston, which has been tasked with developing the new nuclear warhead. Of course, I welcome the announcement last week of the AUKUS security pact, but can my right hon. Friend confirm that it will not undermine the strategic importance of the new warhead and that the AWE will remain at the forefront of our critical defence of this country?
I am grateful to my hon. Friend for giving me the opportunity to make something very clear about the agreement with Australia and the United States. This is not a programme about nuclear weapons; it is a programme about nuclear propulsion, to give the Australians the strategic capability that they have decided is the right capability to meet the threat. That aside, Aldermaston is an incredibly important part of the defence establishment, and the amazing workforce contribute and have contributed over the decades to ensuring that Britain has a nuclear deterrent that is credible. I am delighted to say that we continue to invest in those people, their livelihoods and the science base that is so important to ensure that we have that capability.
The Secretary of State talks about the workforce. The reality is that the Government have just outsourced the fire service to Capita at both Faslane and Coulport. Capita is now, shamefully, cutting jobs—it has cut eight posts. The fire service has unanimously voted for industrial action and currently has an overtime ban on. When will he get a grip on the situation, end the outsourcing experiment and give the fire service the support it needs to keep the bases safe?
Alongside the Department for International Trade and the Foreign, Commonwealth and Development Office, we are hugely supportive of defence export campaigns to our friends and allies, a posture reinforced by the defence and security industrial strategy. I have conducted regular meetings on exports in Poland, Finland, Ukraine and Greece over the course of the summer. Tomorrow, I will engage in meetings in Tokyo before joining potential international partners on Type 31 in Rosyth, Babcock having announced only last week a frigate deal with Indonesia.
I congratulate the defence team on all the work that they are putting in to get more defence exports: not only is it good for British defence, but it is good for jobs. I have one concern, though: the licensing system seems to have slowed down, not only because of covid, but because it is very bureaucratic. Could the Minister take that up with the Department for International Trade, which deals with the matter, and have a word with it to try to speed this up? I fear that some of my local companies are losing business.
I think that 11,000 licences were granted during the covid period, but I note my hon. Friend’s concern, which I know is a real concern shared elsewhere in the House. DIT attempts to say that 70% of cases will be dealt with within 20 days and 99% within 60 days, but as we set out in DSIS, we need to get better both in transparency and in speed. We will be taking the matter up. I thank him for the question.
As the gap between ally and systemic competitor narrows, we heard last week that China is planning to join global Britain in the sunlit uplands of the comprehensive and progressive agreement for trans-Pacific partnership. Given all that we have heard in the integrated review about the UK having a more joined-up foreign, security and trade policy, I would be interested to hear the Minister’s opinion on this strange news and what it is about such a trade deal that the Chinese Communist party finds so attractive.
I am not actually in a great position to speak on behalf of the Chinese Communist party, but I can speak on behalf of the Government. I am delighted that we have a tilt to the Indo-Pacific, and that is coming through in so many different ways in the policy of this Government. It is a part of the world that will have 40% of global GDP in the not too distant future. We need to be properly engaged, and that is what we are doing.
I welcome the new nuclear alliance with Australia and the United States, but I wish we would use a bit more robust language and say why we are doing it. It is to stand up to China’s current behaviour in the South China sea; let us not continue to be in denial about that. However, the timing and the manner of this announcement are not without diplomatic consequence, and prompt further questions about the cohesion, purpose and, indeed, leadership of NATO after the bruised departure from Afghanistan. There is no doubt that France has overreacted to losing a major procurement deal, but does the Minister recognise that China’s authoritarian behaviour cannot be defeated by military means alone? We need all the tools and all the alliances working towards a common strategic aim, and if we do not resolve a sense of unity in the west and, indeed, NATO—
First, let me make it absolutely clear that the agreement with the United States and Australia is a requirement—an Australian requirement—for their strategic purposes. It is a decision that they wanted to make in order to enhance their strategic capability and their strategic defence. We have very strong contacts and a relationship with Australia and the United States, quite transparently. It will be a pleasure to work with them, and to help to deliver this important strategic capacity for Australia.
As for France, again, we work very closely with the French. My right hon. Friend is well aware of that, and of the Lancaster House treaties. There are ongoing discussions about incredibly important joint defence initiatives that we run together. I was in contact with my opposite number over the weekend, and I am looking forward to our working very closely with the French in the years ahead, as we have always done in the past.
Given that Babcock’s Arrowhead 140 frigate has been selected by Indonesia in an outstanding endorsement of Scottish engineering, will the Minister ensure that the Government expend all available effort to assist in future foreign orders, both for licensed build in-country and for foreign Governments to have their ships built in Scotland?
I entirely agree with the hon. Gentleman. As I said in my substantive answer, I have been working in Poland, Ukraine, Greece, and many other parts of the world where Babcock has aspirations. The United Kingdom has a great belief in the Scottish yards—far more belief than the Scottish Government appear to have, given some of their recent contracts.
I, too, welcome the AUKUS deal, which gives great form to global Britain and could be very good for jobs in both Barrow and Derby. Can we remind the Australians, when they begin their 18-month assessment, that the UK’s Astute submarine is arguably even more capable than the United States’ Virginia class? And, by the way, it is cheaper.
My right hon. Friend is a great advocate for British engineering and British defence jobs. There is an awful lot that is good about our Astute programme, but I am not going to second-guess the Australians’ 18-month assessment. They will work that through, but both we and the United States are there to support them in the delivery of this extremely important strategic capability.
Thank you, Mr Speaker. It is good to see you back from “Coronation Street” in such fine form, and to see the defence team still in its place.
When the Government presented the integrated review to the House, we were told that this Indo-Pacific tilt would not undermine interests in the Euro-Atlantic area. Can the Minister tell the House exactly how engaging in secret diplomacy against the mutual security and against the trust interests with one of our closest European allies helps our interests in the Euro-Atlantic area?
I think that that would be an accidental misunderstanding of the situation on the part of the hon. Gentleman. The reality is that a close friend and a close ally decided that they had a different strategic need and wanted to do something differently, and approached us. It would have been very strange not to have engaged in very constructive talks with Australia in those circumstances. That is not being seen to be going behind people’s backs; it is responding to a request.
But that was exactly what it was. Let us not muddy the words here: Paris was deceived, was it not? Are common challenges not better faced when liberal democracies trust each other and understand each other’s mutual interests? Whether it is on the rise of authoritarianism or on issues of climate change, terrorism or migration, we must be aligned with our Euro-Atlantic allies first. Has the fallout from AUKUS not taught us all that we need to pursue a comprehensive defence and security treaty with the European Union? Can the Minister tell us why France was excluded right from the start?
We have a number of close relationships, including through the Five Eyes, that we pursue on a global basis. We have an extremely close relationship with France, with whom we are doing so much around the world and with whom we enjoy extremely close relationships on equipment and support, as well as actively in the field. The bedrock of our relationships inside western Europe is of course NATO, which I am sure the hon. Gentleman would agree with. That is absolutely vital, and it is the cornerstone of our defence. It is an area in which we work closely with our European allies, including France.
Apprenticeships in the Armed Forces
The armed forces are one of this country’s biggest providers of apprenticeships. They have around 21,000 apprentices on programmes at any one time, ranging from engineering and digital to construction and driving, showing that if you join the armed forces, you get skills for life.
I thank my hon. Friend for all the work that the Ministry of Defence is doing on apprenticeships. Can I confirm that his Department will continue to meet the public sector target of 2.3% for the hiring of apprentices? Will he also ensure that any company that gets a procurement contract with the Ministry of Defence employs a significant number of apprentices, and that otherwise it will not get the contract?
I am delighted to confirm that. Over 90% of recruits are offered an apprenticeship, and I am pleased to confirm that recent statistics show that 7.9% of our headcount are new apprentice starts, exceeding the Government public sector target of 2.3%. We have ongoing discussions with the Department for Education to increase that figure.
I routinely engage at all levels, both nationally and internationally, in order to tackle the threat of terrorism across the middle east, north Africa, and the wider region. We continue to work with allies and regional partners to promote a safe and secure Afghanistan and to prevent the terrorist groups from gaining any foothold in the country in the future.
The reduction in conflict, stability and security funding, which is effectively what the hon. Gentleman is referring to, is partly because if it were to continue it could end up in the hands of the Taliban. Given that the fall of Afghanistan was happening, I do not think that that would have been a wise thing for anyone to do. Secondly, he should not rule out the fact that counter-terrorism funding both for here and abroad has increased significantly since 2015, with well over 30% of funding both to civilians such as the police and the intelligence services and to special forces and the armed forces. The direction of travel is increasing not decreasing and the capability that we are procuring, including the drones that we have recently signed up to, will give us extra capability that we did not have all those years ago in 2001.
The Joint Terrorism Analysis Centre sets the threat levels for this country, and it does so independently of Ministers. When those levels are changed, it will make a statement and the House will be informed. As far as a bulletin or update to the House is concerned, the hon. Lady is obviously free either to apply for an Adjournment debate or to table written questions, and we will be happy to ensure that we respond. On top of that, we have periodical updates on Afghanistan and the counter-Daesh strategy, and we will continue to provide them from time to time.
Given that long-term nation building from the ground up is not a feasible option in the future, and given that terrorist attacks could happen again, will the Secretary of State institute a serious review of counter-terrorism strategy, possibly based on pre-positioned forces in regional bases, to follow an active containment strategy?
My right hon. Friend highlights an important point: when there is no partnership on the ground, how do we deal with imminent threats to the United Kingdom? I cannot speak for the whole Government on a review of the counter-terrorism strategy, first of all, because Contest, in its many iterations starting under the last Labour Government, is probably a world-leading counter-terrorism strategy. It is periodically refreshed, which will always be done in time to meet the changing situation. What I can tell my right hon. Friend is that, even before the decline in Afghanistan, I had instigated work on how we deal with changes to the environments in which we fight terrorism and on what capabilities we will need in future.
Will the Defence Secretary update the House on the work of French and British forces in Mali and the wider Sahel region?
The United Kingdom supports the French forces and Operation Barkhane in Mali with a squadron of Chinook heavy-lift helicopters. At the same time, we also have some 300 British forces deployed on the UN multi-dimensional integrated stabilisation mission in Mali, which is one of the most dangerous UN deployments, to help nation building and peacekeeping. We also talk about the threat through intelligence channels, and we are both concerned about the Russian mercenary group Wagner, which is now appearing in many parts of west Africa.
Afghan Relocations and Assistance Policy
Since 28 August, 7,900 applications have been made to the ARAP scheme, of which 900 appear eligible from the MOD’s perspective. Obviously, there are Home Office checks that need to follow, and 50 applicants have thus far completed their Home Office checks and are being advised on how to proceed.
I thank the Minister for that answer, but I have cases of people who worked for the Afghan supreme court, the Afghan Government or the Afghan armed forces. Clearly, they assisted in our operations in Afghanistan. Surely the Minister accepts that these people are at severe risk and should qualify under category 1 of ARAP, yet they have been refused. In the figures he has just cited, how many people who clearly qualify for ARAP have been turned down?
I have just given the numbers for those who have applied since 28 August. I completely accept that there will be interpretation but, having looked at a number of cases that we have been invited to review at ministerial level, I am satisfied that the right judgments are being made. I know that is a disappointment to many hon. Members who are working hard to support people in Afghanistan whom they consider to be at risk but, under the ARAP scheme, it is not possible for us to bring out everybody who has had a connection with UK armed forces. That is why the terms were set as tightly as they were. If the hon. Gentleman would like me to look at any particular cases, I look forward to having that in writing and I will do what I can.
There is increasing confusion about the Government’s administration of the ARAP scheme. In response to a written question, the Minister said that 1,194 locally employed staff had been relocated by the end of August, yet in a further answer he suggested that only 850 applications had been processed in the same timeframe. This means that at least 344 people are unaccounted for. The Prime Minister says the figure is 311. Will the Minister, therefore, tell the House here and now how many applications were received between April and August, how many were accepted and how many have been left behind?
I will write to the hon. Gentleman with the exact detail he requests. Some 15,000 people were brought out in the airlift, as I think he knows. The discrepancy he thinks he has found in the numbers he quotes relates to the fact that 311 people had been called forward—they had successfully applied and been cleared by UK Visas and Immigration for travel—but we were unable to get them on to a plane. That is different from the number of people who had applications in process at the time but had not been called forward for travel.
I know from all my engagements with colleagues on both sides of the House that they will understand that those two and a half weeks in Kabul were somewhat hectic. It will take some time for the dust to settle on exactly who is out and who we have yet to bring out, but we are still working very hard to do so. The security situation is dynamic and our partnerships in the region are being developed, but we have every confidence that we will be able to help those who need help.
Fleet Solid Support Ship Contract
The final contract for the manufacture of the fleet solid support ships will be awarded to a UK business, either solely or as part of a consortium. We have been clear that a significant proportion of the build work will be carried out in the UK.
In spring, the MOD invited international companies to collaborate with UK firms to build the fleet solid support ship contract. Earlier this year, it awarded a £5 million design contract for the project. I have tried in numerous questions to the Minister to get the answers to these questions, and I have to say to him that his answers should be getting creative writing awards for the ways in which they avoid answering questions. May I ask him a direct question: who are the design contracts with—are they with the consortium or with the individual companies? Secondly, will he confirm that the prime contractor who wins this contract will be a UK company?
We are engaged with the consortium as a whole. I would have to check for the right hon. Gentleman on the finer points of where exactly the contract lies within that consortium, but it is the consortium that is being appointed to conduct the design work and it is the consortium that will be expected to do that work. It is then the consortium that we will be turning to for the next stage. As he knows, four awards have been made and, from memory, they are for £5 million each. They go to each in that consortium, all of which have a UK component, and they will be presenting not only their design but their views on the next stage and the build programme. I will come back on the precise point he makes, as it is a fair question.
It is a bit rich of Labour Members to be nit-picking on this contract, given that the competition that they were calling for, whereby shipyards in the UK were to be required to build these ships, is precisely what the Minister has engineered. Will he confirm to the House that following last week’s outstanding Defence and Security Equipment International exhibition in docklands, where, as he has mentioned, there were further contracts for British shipbuilders, and following the announcement of the establishment of the National Shipbuilding Office and AUKUS, the opportunities for defence shipbuilding in this country have never been greater?
I was so flattered to be awarded the creative writing award by the right hon. Member for North Durham (Mr Jones) that I was perhaps too kind. There is an awful lot that is great going on in British shipbuilding at the moment. He has been calling for the design contracts to be awarded, and they have been awarded; we are getting on with the fleet solid support ships. As my right hon. Friend the Member for Ludlow (Philip Dunne) says, there is also great news on Type 31. There is a lot of good news in the sector.
Mental Health Services: Armed Forces
The Defence Medical Services provides a responsive and comprehensive treatment service for personnel requiring medical intervention. We have improved access to mental healthcare and given armed forces personnel greater choice with the introduction of new ways of working, including digital triage and remote video consultation.
As the Minister knows, the armed forces covenant states:
“Those injured in Service, whether physically or mentally, should be cared for in a way which reflects the Nation’s moral obligation to them”,
but the Government have missed targets on all mental healthcare for veterans across all services in England. Unless that changes, does it not risk rendering the covenant, which I know the Government want to strengthen, meaningless? They need to get their act together on mental health services for veterans and the armed forces.
As we know, charities across the UK, including many that have supported veterans, have been hit hard during the pandemic, impacting on the services they provide, so what additional support are the Government offering charities, in order that they can cope with demand? What more can the Government themselves do to support veterans, given that their record so far is pretty poor?
On the contrary, we are putting an additional £3 million into Op Courage, which makes a total of more than £20 million this year, and an additional £5 million into armed forces charities, which means that more than £25 million will go to them this year. That shows that the Government are putting their money where their mouth is.
Defence Sector Jobs
Last week was a good week for defence jobs: I announced investments in laser and radio-frequency weapons, which will sustain 249 jobs and create 49 more, including 30 in Northern Ireland, and investment to enhance the capabilities of C-17 and Chinook, which will support 200 UK jobs and create 50 at RAF Brize Norton; and on Friday, my right hon. Friend the Secretary of State announced a £170 million investment in next-generation submarines, which will support 250 jobs at Barrow and 100 jobs at Rolls-Royce Derby. The UK sector more broadly already directly and indirectly supports more than 200,000 jobs throughout the UK.
First, I thank all the service personnel involved in Operation Pitting and pay tribute to the as-ever impressive leadership of Brigadier James Martin.
Radar is vital to our nation’s defence, and the Royal Navy’s radar is made in Cowes on the Isle of Wight. Do the Government have a plan for the development of next-generation radar?
We absolutely do. My hon. Friend is an assiduous proponent of the Island’s defence sector. In the summer, I visited GKN Aerospace in Cowes, which is one of a number of great companies on the Island. On radar, my hon. Friend will be pleased to hear that we are working closely with BAE Systems on the potential spiral development of the existing maritime radar.
My constituency of West Bromwich East boasts great skills and is only 30 minutes away from the Telford production hub for the British Army’s Boxer fighting vehicle. What is the Minister going to do to ensure that UK small and medium-sized enterprises, including our fantastic businesses in the Black Country, get proper access to contracts in defence supply chains?
MOD spending on equipment and support with SMEs exceeded 21% last year. We are determined to push that proportion higher and I will publish a revised SME action plan later this year.
On Boxer, to which my hon. Friend referred, over 60% of the contract is expected to benefit UK suppliers. Following the integrated review, we are considering expanding the purchase, which will create even more opportunities for SMEs, including those in the Black Country.
It is absolutely on track. Further progress was made last week with our international partners Italy and Sweden, both of which I have been in discussions with over the summer, and it is on my agenda for my meeting tomorrow with the Defence Secretary in Japan. Our £2 billion investment in the future combat air system is benefiting from the co-investment of hundreds of millions of pounds from our industrial partners.
Of course, jobs in the defence industry depend on contracts, so may I come back to the question about the fleet solid support ships posed directly by my right hon. Friend the Member for North Durham (Mr Jones), which the Minister has tried to slide by? Why does the Minister not give a clear message to the industry and the workforce that the Government will prioritise British jobs and the design contracts will clearly go to a British firm? Why not make a proper decision and send that message, which should also go to the steel industry?
I am hoping to send an exact message. I reassure the right hon. Gentleman that, as I have said, we have made it absolutely clear that the contract will go to a British company, solely or as part of a consortium. We have introduced the social-value model, which is included in the defence and security industrial strategy, and it will play a significant part in the overall assessment phase. The right hon. Gentleman has pushed for this competition for a long time; it is ongoing and is going to happen, and I am looking forward to it. I am certain that British companies will be absolutely embedded throughout the process.
The Minister will know that companies in the defence industry have been subject to a spate of takeovers. Many familiar names, such as Cobham and GKN Aerospace, are now in foreign hands, while Meggitt has recently been subject to a takeover bid from a US-based company. Even though the companies involved have promised to protect jobs and research and development, that has not prevented them from selling assets and closing factories. Workers at GKN Driveline at Erdington in Birmingham are going on strike to protest against a proposal for 500 redundancies next May. What are the Government doing to ensure that when British companies are taken over, promises to keep jobs and research and development in this country are kept?
As you will be aware, Mr Speaker, the legislation that we passed broadening the scope in which intervention can take place was cleared through this Parliament and is ready to be introduced. We take very seriously our responsibilities under the Enterprise Act 2002. This is a matter for the Secretary of State for Business, Energy and Industrial Strategy acting in his particular capacity, but guarantees can be sought and enforced as part of that process.
Military Operations Without United States Support
The Ministry of Defence conducts a range of operations, domestically and overseas, both independently and jointly with allies, including with the United States. We keep our operations and our broader military posture under continuous active review.
Now, following the debacle in Afghanistan, we know that we cannot rely on America, will the Secretary of State make his commitment clear to our closest and traditional ally, France, which is vital for our interests, particularly in regard to migration and many other issues? Will he commit himself to working with the French to improve relations and perhaps involve them in this new relationship in the Pacific?
I listened to my right hon. Friend’s points. First of all, the United States and France are our closest allies. The United States is the cornerstone of NATO and by far outspends and out-contributes any other European nation. It has been the guarantor of European security for decades and we should not forget that. When it comes to France, I have an extremely close relationship with my French counterpart. I met her only a month or two ago and I had a dinner with her in Paris a month before that. We speak regularly. Britain and France are joined at the hip on many issues, including on complex weapons; counter-terrorism; Africa, both west and east; and indeed Iraq and Syria. There is absolutely no intent here by the United Kingdom Government to slight, upset or drive a wedge between us and France. Members may like listening to the media, but, fundamentally, we have more in common than we have things on which we differ. There was no sneakiness involved, and we did not work behind France’s back. Fundamentally, it was Australia’s right to choose a different capability and it did.
Despite NATO’s withdrawal from Afghanistan, the middle east and the wider region remain a major source of threat to the UK. We will continue to engage and to invest to keep us all safe. We remain in NATO’s training mission in Iraq and fly missions under Operation Shader. Most recently planes from the RAF conducted a strike against Daesh on 6 September. Syria remains a cause of concern, with 900,000 civilians still trapped in Idlib province. It is now the Government’s view that Turkey’s presence is providing stability and averting a catastrophic humanitarian crisis there. That is something that the UN representatives also made clear to me when I visited some months ago. We continue to work to update our defence and intelligence assessments and work across Government identifying options to support our NATO ally, Turkey.
Mr Speaker, I am sure that you are as pleased as I am with Operation Warm Welcome. What a warm welcome are we giving to those members of the Afghan armed forces and intelligence officers who have come to the UK from Afghanistan through Operation Pitting, many of whom have trained in our military establishments such as Sandhurst and the Royal College of Defence Studies, which I was involved with last year. What steps is my right hon. Friend taking to identify them and perhaps integrate them into our own armed forces?
I am grateful to my hon. Friend for her question. The Minister for Defence People and Veterans, my hon. Friend the Member for Aldershot (Leo Docherty), is leading the charge here. Some of those people who are arriving here are finding the outlook strange and confusing—they have literally taken off one uniform, got on a plane and arrived in the United Kingdom. We in the Defence Department felt that it was incredibly important that the veterans’ community, local government, the Home Office and so on reach out a hand of friendship and support them as they integrate into society. We are looking at those who have already qualified, including those who have been through Sandhurst into the armed forces, to see what we can do for them. All the way through, we shall mentor them and put our arm around them.
I want to ask the Defence Secretary about the Ajax armoured vehicle, the biggest defence procurement failure since the Nimrod. What did the Defence Secretary know about the Ajax flaws when he published the integrated review in his Defence White Paper in March, scrapping Warrior, scaling back Challenger and fully backing Ajax?
I know that this was a troubled programme; I have never resiled from that at all in this House. In fact, as the right hon. Member will know, since I took over this job we have been determined to open up the programme and get to the bottom of its failings. We will shortly come to the House with more detail on that. Going right back to March 2010, this has been a troubled programme that needs to be fixed. Can it be fixed? That is what we are working to do. It is nothing to do with linking Warrior and the others, which the right hon. Member is trying to make the case for.
This is not just another troubled programme or another piece of Army kit. The Secretary of State’s defence White Paper confirms that Ajax is fundamental to the future of British ground forces. Our NATO allies in Europe already see a Prime Minister with the hots for his Indo-Pacific tilt. Now Ajax, alongside the AUKUS nuclear propulsion pact, raises serious concerns over Britain’s sustained contribution and commitment to NATO. What is the Secretary of State doing to settle those concerns?
First of all, what the right hon. Member has missed is that I committed to and brought forward the buying of Boxer, which is a German-British-Dutch project that will be made in Telford, providing jobs. I also brought forward the Challenger 3 upgrade, with Rheinmetall BAE Systems Land—a German company partnering with a British company to provide jobs. That is a strong, solid, metallic commitment to Europe. At the same time, we press forward with the future combat air system with Italy and Sweden.
I am pleased to be able to confirm to my right hon. Friend that the High Barnet Army reserve centre has a continuing defence use and there are currently no plans for its sale.
Yes, it is really important that we seek to build more British ships, but we should also recognise that there is an international collaboration on shipbuilding. I recently signed with the Indonesian Defence Minister to buy the design of the Arrowhead Type 31. That design originated in Denmark, but the intellectual property was shared with us, so we and British jobs now profit from that sale. International collaboration is important and it unlocks investment. We are now going to indicate the longest shipping pipeline for many decades so that British companies can invest knowing that there are ships in the pipeline.
The hon. Member should have listened to my answer. He was making a point about privatisation and I was making the point that Aldermaston had just been nationalised by the Government, which was the opposite ideological scene than that which he was trying to imply.
As a veteran, I know of the hard work, dedication and often sacrifice of our great armed forces. There are many families in Wolverhampton who live and support what the great armed forces do. Will the Minister do everything that he can to ensure that all serving and former service personnel have all the support they and their families need?
I agree entirely with my hon. Friend. Service families are at the heart of the defence community. Our assistance to them includes wraparound childcare, which is currently being piloted, and support for partner employment. We will shortly bring forward the armed forces families strategy, which will deliver choice and flexibility to service families, because people must be able to serve their country while also supporting a family.
My hon. Friend has already referred to the great economic benefits resulting from the £400 million investment in enhancing C-17 Chinook capability, but does he agree that it will also help us to ensure that we can continue to undertake complex operations like the recent withdrawal from Afghanistan, where C-17 transport aircraft played a key role?
Absolutely; it did play a key role. It is a very valuable asset, alongside others, including the A400M, which also has a connection with my hon. Friend’s constituency. I have visited his constituency, where there are great skills in the defence sector. I was delighted to make that announcement and I am delighted to see that investment going into that part of our country.
What assessment has the Secretary of State made of the impact of the introduction of operational MGS—MOD Guard Service—employment contracts on levels of staff fatigue and security at UK military bases?
Will the Secretary of State inform the House what Members should do when they are contacted by people who have been of assistance to our armed forces in Afghanistan but whom they have reason to believe the Taliban are hunting? Is there any help that we will be able to give them, and how should we go about approaching the Government to secure that help?
In the first instance, my right hon. Friend could advise them to go to the ARAP website and apply to the scheme, but it does no harm at all to write to me or my right hon. Friend the Secretary of State in parallel, as many colleagues have done, and we are working through those cases at best speed.
When people who are pursuing successful careers in the armed forces go back to their old schools and say, “Look, this is what I have done; this is what you can do”, that can be a real incentive to recruitment. Does the Secretary of State agree that this would be a good way for him to co-ordinate with the Secretary of State for Education in future?
That is an incredibly important way to inspire young people about the careers that are ahead. When politics do not get in the way of that recruitment, it is much better. I remember being banned from a school in Dundee when I was doing military recruiting—[Interruption]; not me personally—because ideologically it did not fit with some narrative.
Following on from the question from the right hon. Member for New Forest East (Dr Lewis) about those individuals who are working with British military forces in Afghanistan, what is going to happen to those who find that they have been refused under the ARAP scheme? Will they then be referred to the Home Office or to the Foreign, Commonwealth and Development Office, or are they being left in limbo just now?
They do not automatically get referred to the Afghan citizens resettlement scheme; instead they are invited to apply to it. In letters from the MOD to colleagues explaining that people have not been eligible for ARAP we are providing the details of how to apply to the ACRS.
Is the Secretary of State able to update the House on any plans to renew the Red Arrows’ Hawk aircraft, which are now quite old, in the near future?
There are no plans to renew them. The taking out of service of the non-Red Arrows Hawk T1s will provide a significant amount of spares and support for the current Red Arrows fleet going forward. There are currently no plans in the immediate future, or even the medium term, to review the Red Arrows.
On a point of order, Mr Speaker, in response to my hon. Friend the Member for Kilmarnock and Loudoun (Alan Brown), the Secretary of State stated that the fire services of the naval bases in Faslane and Coulport had been nationalised, yet Capita won the contract last year to provide the fire services for those naval bases. Would the Secretary of State like to come to the Dispatch Box, perhaps to rectify that anomaly?
I think the best way to rectify this, Mr Speaker, is to read Hansard, where you will see very clearly, in black and white, that I referred to the Atomic Weapons Establishment.
UK Gas Market
With permission Mr Speaker, I will make a statement on the UK gas market. As hon. and right hon. Members will be aware, over the weekend I held discussions with Ofgem and energy companies, and this morning I held a further roundtable discussion. Today I will set out the Government’s approach to managing the impact of high global gas prices affecting the UK and countries across Europe.
To begin, I want to make two points extremely clear. First, I must stress that protecting consumers is our No.1 primary focus and will shape our entire approach to this important issue. Secondly, I reassure the House that while the UK, like other countries in Europe, has been affected by global prices, Britain benefits from having a diverse range of gas supply sources. We have more than sufficient capacity to meet demand, and we do not expect supply emergencies to occur this winter. There is absolutely no question of the lights going out or people being unable to heat their homes. There will be no three-day working weeks or a throwback to the 1970s. Such thinking is alarmist, unhelpful and completely misguided.
To begin, I would like to set out some of the context for the global situation we are now witnessing. As the world comes out of covid-19 and economies reopen, we are seeing a dramatic uptick in global gas demand—much faster than many had anticipated. High demand in Asia for liquified natural gas, transported globally by freight, means that far less LNG has reached Europe. Weather events in the US have also affected LNG exports to Europe. Increased demand, coupled with reduced variety of supply globally, has put upward pressure on the price of gas traded globally. High wholesale gas prices have subsequently driven an increase in wholesale power prices, with a number of short-term markets trading at, or near, record levels. While we are not complacent, we do not expect supply emergencies this winter. This is a very important point. It is not a question of security of supply.
The Great British gas system has delivered securely to date and is expected to continue to function effectively, with a diverse range of supply sources and sufficient delivery capacity to more than meet demand. The National Grid electricity system operator has the tools within it to operate the electricity system reliably and to balance that system, and we remain confident that electricity security can be maintained under a very wide range of scenarios. We are not reliant on any one particular source for our gas, unlike many of our friends in Europe.
As right hon. and hon. Members should know, domestic production is our largest single gas supply source. It accounted for about 50% of total supply last year. However, the UK also benefits from an excellent relationship with Norway, one of our most important and reliable energy partners, which delivers nearly 30% of our total gas supply. In the last half hour, I was privileged to speak to the Norwegian energy Minister and welcome today’s announcement from Equinor that its gas production will significantly increase from 1 October to support UK and European demand. Our remaining supply is sourced from global markets via two interconnectors to the continent, and also through our LNG infrastructure, which is, as many hon. Members know, the largest in Europe.
The global gas situation has obviously had an impact on some energy suppliers. We have seen four suppliers exit the market in recent weeks and we may expect to see further companies do so in the coming weeks. I must say, having been Energy Minister for nearly two years before I became Secretary of State, that we often see companies exiting the market at around this time of year ahead of the renewables obligation certificate payment. There may well be more of them this year, but I want to make it clear that it is not unusual for smaller energy suppliers to exit the market, particularly when wholesale global prices are rising. The sector has seen regular entry and exit in the last five to 10 years; indeed, that is a feature of a highly competitive market.
The current global situation may see more suppliers than usual exiting the market, but that should not be any cause for alarm or panic. We have clear processes in place to ensure that all customers are supplied with energy. When an energy supplier fails, Ofgem typically appoints another supplier to take on serving its customers and there is no interruption to supply. I reiterate that our primary consideration is for the customer.
I will stress three principles that are guiding the Government’s approach. First, the Government will not be bailing out failed companies. There will be no rewards for failure or mismanagement. The taxpayer should not be expected to prop up companies who have poor business models and are not resilient to fluctuations in price. Secondly, customers, and particularly vulnerable customers, must be protected from price spikes. Thirdly, we must ensure that the energy market does not pay the price for the poor practices of a minority of companies and that the market maintains the competition that is a feature of the current system. We must not simply return to the cosy oligopoly of years past where a few large suppliers simply dictated conditions and pricing to customers.
I reassure all right hon. and hon. Members’ constituents that the energy price cap, which saves 15 million households up to £100 a year, is staying. It is not going anywhere. As I said earlier, our priority in this situation has to be the consumer—the Great British public—and the cap effectively protects, as it has protected, millions of customers from sudden increases in global prices this winter. We are committed to that price cap and it will remain in place. Meanwhile, our warm home discount, winter fuel payments and cold weather payments will continue supporting millions of vulnerable and low-income households with their energy bills. It is absolutely vital that the energy supply sector remains a liberalised competitive market in order to deliver value and good service to consumers.
As a result of high global gas prices, right hon. and hon. Members will perhaps have read that two fertiliser plants in Teesside and Cheshire shut down last week. They suspended the production of CO2 and ammonia. That decision has surely affected in the short term our domestic supply of carbon dioxide, which, as everybody knows, is used in the food and drink sector, as well as in the nuclear and health sectors. Yesterday, I met Tony Will, the global chief executive of CF Industries. We discussed the pressures that the business is facing, and we have explored quite thoroughly possible ways to secure vital supplies. Work is ongoing across Departments in Whitehall and across the Government to ensure that those sectors impacted and affected by this announcement have appropriate contingency plans in place to ensure that there is indeed minimal disruption. To maintain our domestic supplies of CO2, we are in constant contact with the relevant companies that produce and supply CO2, and we are monitoring the situation minute by minute.
Over the past few days, as has been widely reported, I have held several discussions with chief executives of the UK’s largest energy suppliers and operators and also with Ofgem to discuss this vital issue. Just this morning, I chaired a roundtable with UK energy companies and the representatives of consumer groups, in which I reiterated, as I have on the Floor of this House, the need for all of us in Government and across the industry to prioritise customers—in short, to protect the consumer. Meetings are continuing across Government today and throughout the course of this week. In terms of further actions and statements, this afternoon, shortly after the statement presented here, I will be making a joint statement with Ofgem, setting out the Government’s next steps following the healthy and in many cases illuminating discussions with it and suppliers.
Our security of gas supply is robust, but it is the case that the UK is still too reliant on fossil fuels. Our exposure to volatile global gas prices underscores the importance of our plan to build a strong, home-grown renewable energy sector to strengthen our energy security into the future. Thanks to the steps we have taken as a Government, renewable energy sources have quadrupled in gigawatts of capacity since 2010—far more than quadrupled, in fact—but there is still clearly a lot more we can do in this area. That is why we have committed to approve at least one large-scale new nuclear project in the next few years and are backing the next generation of advanced nuclear technology with £385 million, helping to attract billions of pounds in private capital and to create tens of thousands of jobs.
To conclude, consumers come first, and we must protect our constituents.
Order. Before anybody bothers to raise the matter, I say to the Secretary of State that it is totally unacceptable to take so long—almost 13 minutes—and not to have warned the Opposition. I would have thought that the people who put the statement together would have timed it. It is 10 minutes for a statement, and we need to get back to the rules of the House—not the rules that I make, but the rules that this House makes. I say to the shadow Secretary of State that I am sorry you did not know the statement would take so long, but by all means take an extra minute or whatever to compensate. But, please, in future, we should get this right and not take advantage of Members who are here to question the Secretary of State.
I thank the Secretary of State for his statement and agree that we should not be alarmist on the issue of security of supply, but I fear his statement was much too complacent on the price and economic impacts of the current situation.
First, on continuity of supply, we support the Secretary of State taking all necessary measures to ensure that families and businesses continue to have access to energy and that we secure the issue of CO2 supplies. The Secretary of State says that there are mechanisms in place to ensure that customers of failing companies get taken on, but the scale of the problems in the market will provide an unprecedented test of those mechanisms, so does he believe that taxpayer support will be necessary to deal with the problem? If it is, we must ensure value for money. I welcome his caution about outcomes that lead to taxpayer subsidy for big companies to further concentrate their market share, but can he therefore explain the alternatives and what he proposes happens to the customers of suppliers that do not get through this crisis? He is making a statement later this afternoon, and it would be good to know what he is going to say.
Secondly, on the impact of price rises on businesses and industry, can the Secretary of State set out his plans to support businesses, particularly energy-intensive industries? Has he considered with his colleagues the provision of Government support, including possibly loans, to help businesses facing difficulties? On consumer support, he is right to keep the price cap in place—it is a measure I have long supported—but the rise in the price cap of £139 means half a million more families will be plunged into fuel poverty. At a minimum, he should be looking at making the operation of the £140 warm home discount automatic and possibly extending it, but even that will not be enough. Families are facing a triple whammy: rising energy prices, national insurance rises, and, at the end of this month, the £1,000 cut in universal credit. These energy price rises turn the indefensible decision on universal credit into an unconscionable one. If he really wants to put consumers first, if he really wants to help working people, and if he really wants to tackle fuel poverty, is it not time, even at this late stage, to cancel this terrible decision on universal credit?
Thirdly, we need to learn longer-term lessons from this crisis about the lack of resilience in our energy system that has contributed to very large price spikes. The Secretary of State is right that there are global issues, but the UK is facing particular difficulties. Let me give some examples of Government decision making. In 2017, the gas storage facility, Rough, then 75% of our storage, was planned for closure. The Government could have acted to keep it open but did nothing. Our lack of gas storage was raised by industry, the GMB union and the Chair of the Business, Energy and Industrial Strategy Committee in 2019, my hon. Friend the Member for Leeds West (Rachel Reeves). A Minister said in reply that
“the UK’s gas system is secure and well placed to respond effectively to unexpected changes in supply and demand”.
Were the Government not, then as now, far too complacent on the issue of gas storage?
Next, energy efficiency could significantly cut the demand for gas, but we have had the fiasco of the green deal followed by the fiasco of the green homes grant and then the delayed heat and buildings strategy, and emissions from buildings are today higher than in 2015. When is the Secretary of State going to have a proper retrofit plan?
Our new nuclear programme is stalled, and while the Secretary of State is right that we have made progress on renewables, the truth is that we need to go further and faster, with a more diverse supply. Above all, there is not yet enough of a clear plan from Government for how we meet net zero with affordability and security. People have read what the Climate Change Committee said in its most recent progress report this summer:
“It is hard to discern any comprehensive strategy”.
Is not the truth that there is a direct line from the delay, dither and failure to the issues we face today?
I therefore urge the Secretary of State in the midst of this crisis to use this autumn’s net zero strategy—delayed—the net zero review, also delayed, and the comprehensive spending review to finally put in place a proper plan. Households, businesses and energy suppliers are looking to the Government for support and direction as we face this crisis; it requires not words but action and delivery. It is long past time for Government to get a grip.
I apologise, Mr Speaker, for issuing such a lengthy statement.
The right hon. Gentleman talks about a plan, but we have plans and strategies galore. We have the energy White Paper, which was widely well received and which I was very happy to present as Energy Minister, and we also have the Prime Minister’s 10-point plan. I was struck by the fact that when former US Secretary of State John Kerry came to the UK he publicly said that the UK’s plans for decarbonisation were more advanced than those of any other country.
The right hon. Gentleman has a legitimate concern about vulnerable customers, and I have made it very clear to the industry and to Ofgem that they are absolutely our No. 1 priority. We are looking at the warm home discount. As a Government, we have always focused on protecting the vulnerable and people in fuel poverty, and we will continue to do so.
The Secretary of State is entirely right that the UK is far better placed than most other European countries when it comes to the sources and diversity of its gas supplies, not least thanks to the two major liquefied natural gas terminals in my constituency at Milford Haven. Will he join me in paying tribute to the teams working at the South Hook and Dragon LNG terminals and also make a commitment today to work with me, the port authority and the industry on the Haven to make the transition to the next stage of our energy development and see a new generation of floating offshore wind and other renewable energy sources there?
My right hon. Friend will be well aware that there is a commitment to floating offshore wind in the energy White Paper and the 10-point plan. We have explicitly set a 1 GW target for 2030 and I fully expect and hope that that will be exceeded. I am also very pleased to be able to tell him that I am very keenly focused on Dragon LNG. I have not yet visited it in my two years as Energy Minister and Secretary of State, but I would be very happy to accept his invitation.
The Secretary of State almost brought himself to say it. Decades of underinvestment in renewable technologies, the barriers put in place by Brexit, 11 years of Tory austerity, a national insurance tax hike, the plan to rob £20 a week from those claiming universal credit, rising food prices, emptying shelves and now energy consumers facing skyrocketing, eye-watering bills—let us call this what it is. It is a cost of living crisis, and one created on the watch of this UK Government.
So what now? What is the plan? I do not, with all due respect, think that the Secretary of State’s warm words quite cut it. He mentioned the energy price cap, but what he failed to acknowledge was the fact that in just a matter of weeks the cap will be at its highest level ever. Will he therefore back new financial support for those in the lowest-income households, and of course, will he call on the Chancellor to scrap his cut to universal credit?
The Secretary of State acknowledged that, of course, it is not just households that are being hammered by these rising gas prices but businesses, too, particularly those that produce and transport goods. He did not say what specific support he intends to provide to those businesses.
On renewables, one of the key solutions to our supply issues lies not in nuclear—of course not in nuclear—but in the Scottish Munros, with hydropumped storage. When will the Secretary of State finally introduce a mechanism to make that technology come to the fore?
Finally, it would be remiss of me not to ask the Secretary of State what message he would have for the likes of the Prime Minister, who of course told us in 2016 that if we voted to leave the European Union energy bills would be reduced.
I find it extraordinary that the hon. Gentleman is still re-litigating the so-called Brexit wars. This is a serious issue, and it is not the time to re-fight the battles of five years ago.
I am fully conscious of the outstanding contribution of hydroelectric power. In fact, I was just speaking to the Norwegian Minister, and that country has 96% of its electricity derived from hydropower. The geography of our country means that we cannot reach that level, but I have absolutely asked officials to look into it, and the hon. Gentleman will know, given my record both as Energy Minister and as Secretary of State, that I am a very keen supporter of renewable energy. As I have always said, and as I said to the right hon. Member for Doncaster North (Edward Miliband), the Government’s focus on safety, consideration and protecting vulnerable customers is absolute.
My right hon. Friend is absolutely right to reassure consumers that energy security in the UK is safe, but does he agree that, as we transition away from fossil fuels towards renewables, we need to move urgently towards far greater electricity market reform? We urgently need an independent system operator, and we need much more local generation and local energy pricing to encourage consumers to use plentiful wind and solar energy, when they are being generated, for their optional energy use.
I thank my right hon. Friend very much. I remind the House that when I was appointed as Energy Minister, she was the Secretary of State in the Department, and she pushed a great deal of reform and innovation in this area. I reassure her that conversations about an independent system operator and how we can modernise the way we balance the electricity system are happening all the time, and I would be very open to hearing her suggestions about how we can bring that about. I think that energy security in this country, thanks in part to her efforts when she held the post I currently hold, is good. We have a diversity of supply, we have considered a wide range of renewables, and in fact we are pioneering and leading the world in the development of renewable technology.
I am grateful to the Secretary of State for an advance copy of his statement. There are, of course, a whole range of important questions to be answered to ensure that we do not face similar energy crises in the future. The Business, Energy and Industrial Strategy Committee will be asking Ministers to answer those questions over the coming days and weeks, but may I ask the Secretary of State a specific question today? Can he guarantee that the warm home discount rebate will continue to be paid to consumers who are forced to change energy supplier?
The hon. Gentleman tempts me on to dangerous ground. Of course, any guarantee of that kind has a fiscal implication, which, as he will no doubt be aware, is also a matter for the Treasury. We are in constant discussion about that. I look forward to seeing him in his usual place at the Business, Energy and Industrial Strategy Committee on Wednesday. I know that he takes these matters very seriously, and I am sure that we will have a fuller discussion of these subjects then.
Will the Secretary of State talk to the industry urgently about having more gas storage capacity? We have tiny capacity compared with most advanced countries, and that would provide a buffer to smooth supplies and keep prices down if this turns out, as we hope it will, to be a short-term interruption to supply from Russia and America.
My right hon. Friend, with his characteristic acuity, hits the nail on the head. Gas storage is definitely an issue, but the fact he points out is that we do not know how long this spike in the gas price will last. We must not precipitate a rush or, through any alarmism, instigate panic. There is no cause for that at all, but clearly this is a situation that needs to be reviewed. I am very happy to speak to him about particular solutions. I know that he has various views on interconnectors, and I look forward to discussing with him very frankly the way ahead.
The right hon. Member for Wokingham (John Redwood) referred to our “tiny capacity”. The UK cut its strategic gas storage to 1.7% of annual demand, when a former Government adviser suggested that it should be closer to 25%. In the light of that, why did the Government allow the Rough storage facility off the Yorkshire coast to close without taking action?
As I have said repeatedly, we have a wide source of energy supply. We have by far the largest offshore wind capacity in the world. There is no reason why we should be inducing panic because of the closure of gas storage facilities. It is something that I said we should look at, but I do not think it is right for hon. and right hon. Members to stoke alarm simply by focusing on questions that are not really relevant to today’s debate.
I declare an interest as chairman of the all-party parliamentary group on energy security. I pay tribute to the Secretary of State for the action he is taking to protect consumers and to calm the concerns that some commentators and some Members have expressed. Does he agree that diversity is key to reducing the long-term risk of such volatility in the markets? That means diversity of supply, diversity in energy generation—be it wind, nuclear, biomass, hydro or other sources—but also diversity in the location that the energy is generated. Some nations, regions and even countries have an excess supply on some occasions and a shortfall on others. The greater the diversity, the less the risk. Is he sufficiently reassured that Ofgem is sufficiently proactive in this field?
My right hon. Friend spoke about three distinct categories. I can assure him that on all three we have a degree of robustness. On the spread of the gas supply, I said that we have a wide range of sources for gas. On electricity generation, I can reassure him that with our work on renewables—onshore wind, offshore wind and solar—there is a much wider range of electricity generation supply in the UK than in practically any other country. On geographical spread, he will notice that a lot of installations and a lot of that capacity are spread very evenly across the United Kingdom. I happen to know that because I spent a large part of the past two years visiting those sites.
CF Fertilisers, based in my constituency, is one of the plants that has had to close down in the light of cost pressures. There are obviously many impacts on consumers as a result of this decision, but the employment prospects of my constituents are at the forefront of my mind at the moment. I am pleased to hear that the Secretary of State met the company yesterday. I wrote to the Department over a month ago pointing out the need for urgent action on the cost pressures the company was facing, not just in terms of global gas prices but a number of other factors. I hope that discussions prove fruitful, and not just for my constituents’ jobs. We do not want to get into a situation where we are relying on importing carbon dioxide from other sources, because that will not help us to reach net zero and will put us risk of other fluctuations in world prices.
I thank the hon. Gentleman for his ongoing interest in and passionate support for employment in his constituency. I spoke to him considerably about Stellantis over the last few months. I am very focused on the two CFF plants, one of which is very near or in his constituency. The other, of course, is in Billingham on Teesside. We are looking at both sites and trying to do what we can to support ongoing production in both those places.
I thank the Secretary of State for his interest in renewables, hydrogen, new nuclear and CCS. He has already referenced the incredibly difficult situation facing CF Fertilisers in Stockton, which has been forced to suspend production because of gas prices. Is he aware of the knock-on effect that that can have on businesses that CF Fertilisers supplies, such as Huntsman in Wilton, and the further knock-on impact to the rest of Teesside’s chemical industry? Can I impress on him just how interconnected our industry is and how losing one player could lead to a domino effect?
My hon. Friend is absolutely right. He and I have visited a number of those sites together. He is quite right to say that there is a chemical cluster reliant on the ammonia produced out of the CFF plant in Billingham. I say that that is a good cause to argue for the sustainability of the site. It is something we are very aware of and it was brought up in the discussion with the CEO yesterday.
I listened very carefully to what the Secretary of State had to say, which was that protecting consumers, particularly vulnerable consumers, was the Government’s No. 1 priority. Will he then seriously reconsider his position and lobby his colleague the Chancellor to reverse the £20 universal credit cut? Many of my constituents who are in receipt of universal credit are hard-working people on low wages, and they need that money to meet spiralling energy costs and the increased cost of living.
The hon. and learned Lady is aware that we are entering a comprehensive spending review process at this moment. I am speaking to my right hon. Friend the Chancellor all the time about all sorts of things and all sorts of measures that we can bring in to make sure that people are protected from this gas price hike.
It is absolutely right that we continue on our energy transition to net zero. I welcome the Government’s ongoing commitment to increasing renewable and low-carbon capacity across the UK, not least in the form of carbon capture and storage, for example, as proposed by the Acorn Project at St Fergus in my constituency, where, at the moment at least, about 30% of the UK’s gas comes ashore. Does my right hon. Friend agree that while we still have a demand, albeit a declining demand, for natural gas, we must ensure that that demand is satisfied by domestic sources as far as reasonably possible?
What my hon. Friend says is entirely reasonable. I pay tribute to him in his role as Under-Secretary of State in the Scotland Office, where he and I spoke about these issues almost continually, it would appear—we spoke about Acorn and we spoke about carbon capture. He will know that I am passionately committed not only to carbon capture but to ensuring that we have a decent domestic supply of natural gas.
Natural gas is a fossil fuel, and we all know that fossil fuel extraction and consumption have to end by 2050 at the latest. What is the Government’s precise timeline—not a 10-point plan, not imprecise promises, but their precise timeline—to phase out the national gas grid and replace it with renewables, in which case we would not be here in the first place?
The hon. Lady will know that to answer that question we would have to have a much clearer view, in terms of the safety and applicability of hydrogen, for example, in the national gas grid. That is clearly a big part of our ability and the speed with which we can decarbonise the gas grid. She also knows that I am committed to decarbonisation; I am committed to the hydrogen strategy that was published six weeks ago, and there are ongoing trials to see whether we can use hydrogen to decarbonise the gas grid.
To what extent is the UK collateral damage in a European-wide crisis caused by the Kremlin’s weaponising of gas supply and its attempts to intimidate the EU into accepting Nord Stream 2, potentially as a precursor to more violence in Ukraine? Should we not see this hybrid war for what it is and plan long term accordingly?
As my hon. Friend knows and has expressed, there are geopolitical elements to this in terms of the reliance of a large part of Europe on Russian gas. I am here to reassure people about a common misconception. We are not dependent at all on Russian gas. The gas sources are as I have described—50% are local, 30% are from Norway and about 18% are from LNG, which comes from all around the world—so I want to minimise the notion that we are somehow at the mercy of Russian gas policy.
This crisis is causing steelmakers across the country to suspend their operations during periods of the day when the costs of power are peaking at thousands of pounds per megawatt-hour. Can the Secretary of State assure the House that he is engaging with the steel industry to ensure that this crisis does not end up crippling our steel industry, which of course underpins our entire manufacturing sector?
The hon. Member knows that I am constantly engaging with the steel sector—in fact, I resuscitated the Steel Council as one of my first acts when I was appointed Secretary of State—and I am always in ongoing conversations with it. I have, I feel, made a contribution to making sure that we can have this industry on a sustainable basis, but I am very happy to talk to the hon. Member, among other colleagues.
Unlike the Opposition parties, my right hon. Friend knows that we cannot just keep spending billions of pounds every time there is a major problem, but I have to say that he also knows that the keys to prosperity through production are prices, profit and loss. May I ask him now to prioritise affordability and security of supply by removing all fiscal and other disincentives to oil and gas exploration, including shale gas, to increase domestic production levels?
We have rehearsed the shale gas issue many times on the Floor of the House. As Energy Minister, I was confronted with a situation in which the experiments with shale gas induced a reading of 2.9 on the Richter scale and people’s plates were falling off their walls. They wrote to me to say, “We’ve got to stop this,” and there was a moratorium. There is a moratorium, and I have said very explicitly that when the evidence changes we will look at it, but for now there is a moratorium on shale. However, my hon. Friend knows that I understand and fully appreciate the effect of supply and demand as well—perhaps not as well as he does, but better than the Opposition.
I am very glad to hear the Secretary of State say that protecting consumers is now his Government’s primary focus; it is just a great shame that it has not been in the past. He continues to expose people to high energy prices by refusing to look at the demand side. I do not think that the words “energy efficiency” or “home insulation” have passed his lips once this afternoon. When will he properly learn the lessons of the failed green homes grant, the green deal and the scrapping of zero-carbon homes? When will he put in place the comprehensive street-by-street local authority-led insulation scheme that we know will get emissions down, fuel prices down and jobs up right across the country?
I welcome the Secretary of State’s hard work over the weekend to secure our gas supplies and protect consumers. Does he agree that the long-term solution to energy price spikes is to reduce our dependence on fossil fuels and accelerate the transition to a more cost-efficient and resilient energy system based on renewable energy and nuclear power, through projects such as Wylfa Newydd in my constituency?
I pay tribute to my hon. Friend’s indefatigability on this issue. There never seems to be a moment when Wylfa is not on her lips, and I fully appreciate her passion for it.
Nuclear is clearly a big part of the answer to this, which is why—as Members who have read it will know—it is the third point of the 10-point plan. It is clearly an essential part of our energy mix for the future.
I, too, am grateful to the Secretary of State for his statement, and specifically for meeting representatives of CF Fertilisers, which has stopped production in my constituency, with a knock-on effect on industries needing the carbon dioxide that it generates as a by-product. He will remember my many meetings, letters, parliamentary questions and points made in the House about the perfect storm brewing for firms such as CF Fertilisers—rising fuel prices, a bizarre funding mechanism from Ofgem for gas transportation costs, and the lack of appropriate support for energy-intensive industries to mitigate high carbon emission prices. He says that talks are ongoing, but can he say a little more about what he is doing to get CF Fertilisers producing as soon as possible, and when we can expect policies to make our energy and related costs competitive against Europe?
I would say that our prices are very competitive. Offshore wind, for example, started off at about £150 per megawatt-hour, and at the last auction round it was £39 per megawatt-hour. We have seen the cost of renewables fall considerably over the past 10 years. As for CF Fertilisers, it would be premature of me to say exactly what the Government are going to do. A range of options are being considered, and I hope that the Government will be able to update the House shortly.
How long does the Department expect these elevated global gas prices to remain at their current level? May I also press the Secretary of State a little on nuclear? I agree with him that it is an essential part of the energy mix, but in relation to large-scale nuclear, what are his plans beyond the one plant that has already been agreed?
It would be foolhardy of me to speculate at the Dispatch Box on what the gas price will be even tomorrow. If I were in a position to know what the prices would be at a later date, I would probably not be a politician; I would probably be a gas trader. That aside, however, I think we have to accept that the prices could be high for longer than people anticipate, just as they could fall very quickly. The marginal dynamics of these markets can shift extremely rapidly. Those of us who followed the oil price last year will have seen that we had an oil price of $20 a barrel, and that in the same year it reached nearly $80. There is a considerable amount of volatility in these markets, and it would be rash of me to predict their course.
As I said earlier, we are committed to nuclear, which is the third point in the 10-point plan, and that means not just large-scale nuclear, but small modular reactors as well.
It is beyond doubt that Scotland is an energy-rich nation, but a quarter of our people live in fuel poverty. If the Secretary of State is a free-marketeer and is not prepared to see taxpayer support go into the market, does he not think it is time for a publicly owned energy company to be brought into being to help us through such difficult times?
I do not really follow the hon. Gentleman’s question. On the one hand, he is saying that I am a free marketeer, but then he is asking me whether I think there should be a state-owned energy company. I think I would avoid the latter outcome, in so far as I can, but as I always say in these things, we are looking at all options. I think that there are market-based solutions. I think that the industry will come together and that, with the Government and Ofgem, we can plot a course through this.
Alongside the increasing gas prices, consumers are facing a double whammy through increasing petrol prices, which, as FairFuelUK has pointed out, have gone up by 9-to-10p over the past six months. Will my right hon. Friend maintain the fuel duty freeze, which is vital for motorists and businesses? Will he also look at reducing VAT on energy bills, which is something that was indicated during the Brexit referendum debate? That would make a big difference to hard-pressed consumers.
I would like to thank my right hon. Friend, but he has been in the House long enough to know that VAT and the fuel duty freeze are beyond my remit. However, as I have said many times, I speak to my right hon. Friend the Chancellor about these issues on a regular basis.
The decision to raise the energy price cap to its highest-ever level will push half a million people into fuel poverty next month. At the same time, an additional 800,000 people will be pushed into poverty by the £20 a week cut to universal credit. On top of that, the national insurance hike will hit low-paid workers the hardest. These are political choices, so rather than relentlessly attacking the working class, will the Minister avert a worsening winter poverty crisis by cancelling the cut to universal credit, raising taxes on the richest and bringing energy companies into public ownership and running them for the public good, not private profit, to slash bills and cut carbon?
I totally understand where that is coming from, but I have said repeatedly that universal credit is an issue across Government and there is no way that I can commit to anything on that in the House. We are absolutely focused on protecting people in fuel poverty. All our policies have been focused on that, and I would suggest that she reads our 2019 manifesto to see the extent of our commitments to help those in fuel poverty.
Interconnectors are vital for our energy security and for reaching net zero, for both gas and electricity. In a White Paper last year, the Government aimed to get 80 GW of interconnectors in by 2030, which is three times what we have now. However, Ofgem, which is leading on this, seems to be dragging its feet. What can this Government do to get these interconnectors going and increase our energy security?
The issue of interconnectors is very important. There were clearly incidents with a couple of the interconnectors last week, so we need to guarantee that they are safe, but my hon. Friend is quite right to say that the 80 GW target is still very much something that we intend to achieve, and I am working with and speaking to Ofgem to be able to get there.
As you know, Mr Speaker, this is a bit personal for me because the village of Altnaharra is the coldest place in the UK every year. With the cut to universal credit, far too many people are going to have to make the hellish choice between switching off the electricity and paying for food. Did I hear the Secretary of State correctly? Will he maintain the fuel price cap where it is at the moment? Secondly, will he look positively at a Northern Rock-type of enterprise to pick up the customers of those companies that, perish the thought, might go under?
There are two issues there. I have said that I have committed to the price cap mechanism, but it is not up to me as Secretary of State to determine what the level of the cap is. That is an issue for Ofgem. Secondly, we have made some progress on protecting customers and there is an ongoing need to do that, but I would be happy to speak to the hon. Gentleman and to discuss his ideas on this.
On Friday, I visited the National Grid gas compressor station at Churchover in my constituency, which is at the centre of both the UK and the network of a resilient system that is distributing a diverse and flexible supply around the UK. Does the Secretary of State agree that, in terms of supply, we are in the fortunate and strong position of having built up a network to supply the current circumstances and to be adjustable for the future introduction of hydrogen?
An excellent question from my hon. Friend. All the conversations I have had over the weekend and today have stated clearly and unambiguously that security of supply is not an issue. That is thanks to the hard work that people in his constituency, in National Grid, in Ofgem and across the system have put in over many years.
The Secretary of State said we have to wait for his plan to find out what he will do to retrofit buildings and reduce dependence on carbon fuels, but local authorities across the country are way ahead of the Government. My local authority in Greenwich is experimenting with air-source and ground-source heat pumps. When he produces his report, does he think local authorities will be front and centre in creating local plans so that we can drill down into local communities to bring about the change we need to achieve zero carbon?
The hon. Gentleman is right that I welcome local initiatives. Only a month ago, I spoke at a forum at which representatives of local government were enthusiastic about getting behind net zero. I welcome all initiatives where local leaders are driving the push to net zero.
We have heard a typically reliable and reassuring statement from my right hon. Friend. He mentioned the Ofgem guarantee for when a supplier fails. Will that guarantee protect customers’ credit balances, and how soon will they be able to access them? Will fixed-term deals that customers have negotiated with their current supplier always be respected through the transfer?
My hon. Friend did not mention it in particular, but we have a supplier of last resort process, which has been relied upon over the past few years and involves a transfer of customers in the way he describes. We may well have an updated version of that process in the light of the threats posed to a number of suppliers. I look forward to discussing the details with him when the statement is made.
The Secretary of State says he is working on contingencies, but the meat industry says its CO2 supplies will be depleted within a fortnight. Is he sure that pork and poultry will not be the next items to disappear from our supermarket shelves?
I am working very closely with my right hon. Friend the Secretary of State for Environment, Food and Rural Affairs. We have spoken to the Treasury, and we are keen to push forward plans very soon to make sure there is a consistent and regular supply of CO2.