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EU Referendum: Investment in Power Sector

Volume 613: debated on Thursday 14 July 2016

12. What assessment she has made of the effect of the outcome of the EU referendum on investor confidence in the UK power sector. (905861)

16. What assessment she has made of the potential effect of the outcome of the EU referendum on levels of overseas investment in the UK energy sector. (905865)

20. What assessment she has made of the potential effect of the outcome of the EU referendum on levels of overseas investment in the UK energy sector. (905870)

The Government have engaged extensively with investors since the EU referendum, sending a clear message that the UK remains open for investment and business. I am very clear that the UK is an attractive environment for investment in energy. My Department will continue to take the steps needed to deliver secure, affordable and clean energy for families and businesses across the UK.

As one former leadership contender to another, I commiserate with the Minister over the events of the past week and wish her well in the reshuffle today.

The manufacturers organisation the EEF told the Environmental Audit Committee, which I chair, that the decision to cancel the carbon capture and storage competition in the autumn statement came as a huge shock and damaged investor confidence in the industry. We also heard from Siemens, which has invested £160 million in the wind industry in Yorkshire, that the referendum result means it is facing a whole new set of unanswered questions. What steps is the Minister taking to bring confidence to investors in low-carbon industries?

In fact Siemens has recommitted to its investment in Hull, which is great news for that area. I had a meeting a few days ago—it seems like a year ago—with the Offshore Wind Industry Council to talk about confidence in investment. Its members all remain committed to the UK, and EDF has reaffirmed its commitment to the UK.

Specifically on CCS, as I have said many times in this Chamber, we remain committed to looking at what our future strategy for CCS will be. The fact that the competition did not make the cut in terms of taxpayer value for money at the last spending round does not mean that we are ruling out CCS. We believe that it continues to play an important role in the future of our decarbonisation strategy.

The recent EU referendum result has of course created widespread insecurity in this market and, indeed, the wider economy. There is now an increasing number of possible options from the Brexit negotiations, each leading to a number of regulatory and market options for the UK’s relationship with the EU, with each of these having differing implications for the investment in and trade of energy. What steps has the Department already taken to guarantee that overseas investment in our energy sector is protected, whichever of the outcomes is taken?

I believe that we will see huge opportunities in leaving the European Union. As is always the case in the United Kingdom, we will take great steps to ensure business confidence and ensure that those who have invested in this country will be able to use our very sound contract law and investor base to be able to continue to fruition with their projects.

I am sure the Minister will agree that the EU exit vote has caused uncertainty. I am sure that this new and slightly unexpected Government, with the paint still drying on the signs, will want to boost investment and development in the energy sector. Will the Minister tell us how the Government will create incentives for investment and boost consumer confidence?

I think the hon. Lady will accept that my concern about investor confidence led to a very significant move on my own part to make sure that we had certainty in the UK. The new Government will absolutely be keen to reassure investors and to make sure that this remains a very strong place to invest.