Draft Combined Authorities (Finance) (Amendment) Regulations 2024

Monday 29th April 2024

(2 months, 3 weeks ago)

General Committees
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The Committee consisted of the following Members:
Chair: Caroline Nokes
† Ansell, Caroline (Eastbourne) (Con)
† Bacon, Mr Richard (South Norfolk) (Con)
† Baldwin, Dame Harriett (West Worcestershire) (Con)
† Doyle-Price, Dame Jackie (Thurrock) (Con)
Egan, Damien (Kingswood) (Lab)
† Ellis, Sir Michael (Northampton North) (Con)
† Everitt, Ben (Milton Keynes North) (Con)
† Fox, Sir Liam (North Somerset) (Con)
† Glindon, Mary (North Tyneside) (Lab)
† Jenrick, Robert (Newark) (Con)
† McMahon, Jim (Oldham West and Royton) (Lab/Co-op)
† Mohindra, Mr Gagan (South West Hertfordshire) (Con)
Owen, Sarah (Luton North) (Lab)
† Qureshi, Yasmin (Bolton South East) (Lab)
† Sobel, Alex (Leeds North West) (Lab/Co-op)
Timms, Sir Stephen (East Ham) (Lab)
† Young, Jacob (Parliamentary Under-Secretary of State for Levelling Up, Housing and Communities)
Liam Laurence Smyth, Committee Clerk
† attended the Committee
First Delegated Legislation Committee
Monday 29 April 2024
[Caroline Nokes in the Chair]
Draft Combined Authorities (Finance) (Amendment) Regulations 2024
16:30
Jacob Young Portrait The Parliamentary Under-Secretary of State for Levelling Up, Housing and Communities (Jacob Young)
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I beg to move,

That the Committee has considered the draft Combined Authorities (Finance) (Amendment) Regulations 2024.

It is a pleasure to serve under your chairmanship, Ms Nokes. The draft regulations before us today will, if approved by Parliament, complete the legislative framework for the funding of new combined county authorities. In recent months, similar secondary legislation has been made to provide rules for the election and by-election of combined county authority Mayors, and for their overview, scrutiny and audit committees. Today’s statutory instrument is the last key building block in the architecture of legislation for combined county authorities as a category. The regulations will provide for Mayors of the new combined county authorities to set budgets for the costs of their functions, and raise a precept for these costs, subject to consideration and a vote by the combined county authority. They also provide for a mayoral fund.

As with preceding legislation, we are following the principle that provision for combined county authorities should be the same as that for combined authorities. The regulations do this by amending the Combined Authorities (Finance) Order 2017, to apply its measures to combined county authorities. The 2017 order provides for an effective process, aligned with the wider local government budgeting timetables, including robust arrangements for scrutiny and challenge of the Mayor’s spending proposals by the combined authority. The effect of that application to combined county authorities is essentially identical, and is as follows.

First, there is a requirement for combined county authority Mayors to submit by 1 February a draft budget to their combined county authority for consideration. Secondly, the combined county authority must recommend any amendments to the draft budget by 8 February, and the Mayor must consider these amendments and respond with a further proposal if they choose to do so. Ultimately, the constituent members of the combined county authority may impose amendments to the Mayor’s draft budget, if supported by a significant—usually two thirds—majority. In the absence of this majority, the Mayor’s proposals are deemed to be accepted by the combined county authority. The combined county authority must set a mayoral budget on the Mayor’s behalf, if the Mayor fails to submit a draft for consideration by 1 February.

The Mayor may fund mayoral functions through a precept. The standard local government finance regime applies so that precepts must be issued by 1 March. Mayoral costs are itemised separately on council tax bills. Where the Mayor exercises police and crime functions, those are also listed separately. To further aid transparency, the Mayor is required to maintain a fund in relation to the receipts and expenses of the Mayor’s functions, excluding police and crime commissioner functions, for which there is a separate police fund.

Before introducing the original 2017 order for combined authorities, the Government undertook informal consultation with officers of constituent councils of current and prospective combined authorities, including via a working group of senior finance officers. Our inquiries with finance officers of existing mayoral combined authorities during the development of these draft regulations found no operational difficulties with the existing set-up. The regulations therefore simply extend the application of the existing provision in line with the broader policy of parity between combined county authorities and combined authorities.

Liam Fox Portrait Sir Liam Fox (North Somerset) (Con)
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This delegated legislation provides for a precept to be set. Can the Minister tell me what the mechanism is by which an upper limit for such a precept would be set, so that councils or Governments of a different colour would not necessarily be given a mechanism to fleece taxpayers?

Jacob Young Portrait Jacob Young
- Hansard - - - Excerpts

I will come back to my right hon. Friend on that point, but I would say that Conservative Mayors charge zero mayoral precept, whether that is Ben Houchen in the Tees Valley or Andy Street in the West Midlands. Contrast that with the Mayor of Greater Manchester, for example.

Richard Bacon Portrait Mr Richard Bacon (South Norfolk) (Con)
- Hansard - - - Excerpts

I would just like to pursue the point made by my right hon. Friend the Member for North Somerset (Sir Liam Fox). The issue is not what a particularly good Mayor from a good political party would do. These regulations relate to constitutional changes, which I know because the explanatory memorandum says so. It says that the combined county authorities have a slightly different constitutional structure from the combined authority model before, being designed to be better suited to non-urban areas—quite how, it does not say. Surely the issue is, regarding my right hon. Friend’s question, how are limits put upon the power to raise tax? If there are not any, can we be told, now, during this Committee?

Jacob Young Portrait Jacob Young
- Hansard - - - Excerpts

I shall make sure that I give my hon. Friend the answer to his question by the end of this Committee. However, to conclude my speech, these regulations will apply the regime, which is already in place for combined authorities, to combined county authorities to support their Mayors to fund their functions through a precept, where they chose to do so. They prescribe a tried-and-tested budget-setting process that allows for effective challenge and robust and transparent scrutiny by the combined county authority. I commend them to the Committee.

16:35
Jim McMahon Portrait Jim McMahon (Oldham West and Royton) (Lab/Co-op)
- Hansard - - - Excerpts

It is a pleasure to serve under your chairmanship today, Ms Nokes. I will start by confirming that we do not intend to divide the Committee on this statutory instrument. We agree that there is a financial and democratic need for transparency in the funding of combined authorities and in granting equal powers to mayoral combined authorities and combined county authorities in this regard.

The regulations are intended to extend the existing provisions for the funding of mayoral combined authorities to those of county combined authorities. The new model of county combined authorities, we accept, is more appropriate for non-metropolitan areas where two-tier governance is in place, and this model recognises the geographically specific issues that non-urban areas face, and that local governments then must reflect that different identity and accommodate it where possible.

Can the Minister answer, though, why it has taken so long for the Government to address this difference? There has been a great deal of frustration from our counties, which feel very strongly that they have been required—demanded, in fact—to mirror the model in urban areas, when it just did not fit their geography or their political structures. It would be interesting to know why it has taken so long to reconcile that.

Combined county authorities have shown great progress for English devolution, but there are legitimate concerns over the process and the way in which the SI has been handled. Therefore, can the Minister answer how this change would be communicated with the combined authorities, and their component councils, as this is rolled out?

Labour supports devolution and believes that having the right powers in the right places is important, and that precepts are an important way of achieving that. However, the Secretary of State for Levelling Up, Housing and Communities made a point in the Chamber, during oral questions only last week, of criticising the use of precepts in some areas. We heard some of that today, where the political argument is used that Labour Mayors choose to exercise their powers of precepts in a way that Conservative ones do not.

I think that we need to accept that there is no free ride on this—a Mayor is not free; the money comes from somewhere. It comes from a subscription that local authorities pay, from a levy that is required of the local authority, or is done via a precept. Surely the most transparent way is that Mayors of county combined authorities say to the public, on their council tax bills, “This is how much this particular function costs.”

Richard Bacon Portrait Mr Bacon
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The hon. Gentleman looks at me in a slightly accusatory way, as if I might disagree with anything he is saying. I do not think you get a free Mayor either. I believe that it is good that it is transparent. I believe that it is good that it is broken up on a bill, so we can see what council tax payers are having to pay for this. On these matters, we are in violent agreement. The only question I had—and I think my right hon. Friend had—was, “What is the upper limit, and how is it imposed?” We know that district councils, if they wish to put up council tax above a certain amount, have to go to a referendum. I am asking—and I think my right hon. Friend is—“What, if any, limits are there here?”

Jim McMahon Portrait Jim McMahon
- Hansard - - - Excerpts

I will avoid answering the Minister’s question for him, but we need to accept that different Mayors have different powers. Some are police and crime commissioners, while some do not have those powers, and some take on the fire authority powers, the powers of the transport authority, and the rest of it. Therefore, their funding models, and their precept and levelling-up funding, are very different.

However, in each of those circumstances, it will be for the Secretary of State to determine, by legislation, what the upper limit for any increase will be, whether that is a percentage applied to the council tax, or even a cash limit —£5, £10 or whatever—applied to mayoral combined authorities. That is in the gift of the Secretary of State. There is no precept increase in England that has been done without the explicit consent of the Secretary of State, and I think that that is an important point to make here.

We know that councils are facing a perfect storm of rocketing demand in adult and children’s services, adult social care and temporary accommodation, and a rise in borrowing costs, but, at the same time, the core grant has decreased alongside neighbourhood services. The sticking-plaster approach to devolution is part of the problem.

Local growth plans will be made in conjunction with businesses and local authorities to ensure that precepts will be adequately funded, planned and supported, therefore maximising economic potential across the whole region under consideration. More needs to be done, however, because local authorities are, in the end, the foundation of combined authorities. Combined authorities do not exist in isolation, and if the foundation on which they rest is not secure or firm, that will have an impact on them.

Labour is the party of devolution: it created the Scottish Parliament, the devolved Parliament in Wales, the Northern Ireland Assembly and the office of the Mayor of London, and it introduced the Localism Act 2011. Labour Mayors and Labour councillors are leading the charge across the country and, together, have made the case for further devolution.

We propose more stable, longer-term, single-pot settlements across all our combined authorities to reward those who make good progress and are good custodians of public money. It is a fact that, under the Government, working people are paying more and more for less and less, so it is time for a fresh start, which can be achieved only with a Labour Government.

16:41
Jacob Young Portrait Jacob Young
- Hansard - - - Excerpts

I am grateful to the hon. Member for Oldham West and Royton for expressing support for the regulations.

On the questions from my right hon. Friend the Member for North Somerset and my hon. Friend the Member for South Norfolk, there is no upper limit. The mayoral precept is not subject to the same referendum principles as council tax. As I said, however, mayoral budgets are subject to challenge and amendment by a significant majority on the combined authority or, in these cases, the combined county authority. I would suggest that local decision makers are best placed to determine what is right for their local area. As I outlined, it is made clear on council tax bills what the mayoral precept costs taxpayers, so taxpayers can hold the Mayor to account for charging an unwieldy mayoral precept in those circumstances.

Robert Jenrick Portrait Robert Jenrick (Newark) (Con)
- Hansard - - - Excerpts

Would my hon. Friend consider changing that in future, particularly for the new county devolution deals? Unlike most prior devolution deals, they have not been accompanied by any local government reform, so our council tax payers could be paying precepts for the town, the district, the county, the PCC and the new combined authority. Value for money is questionable in such a case.

Jacob Young Portrait Jacob Young
- Hansard - - - Excerpts

I understand my right hon. Friend’s point. I am happy to take that away and look at whether something similar could be established for mayoral precepts. It is not currently the Government’s intention to do so, but he makes a valid point.

On the point made by the hon. Member for Oldham West and Royton, combined county authorities are a direct result of the Levelling-up and Regeneration Act 2023. This statutory instrument is required by that Act. He asked why it has taken so long, but the Act was passed only at the back end of last year in direct response to the request of counties to have a devolution model that fitted them, so I would say that his frustration at the time that it has taken to get to this point is misplaced.

Jim McMahon Portrait Jim McMahon
- Hansard - - - Excerpts

I do not particularly disagree, but I would ask for an acceptance that there is a natural tension in the devolution programme between the need to have devolution for a purpose, such as jobs, housing, the economy or transport, and the need to represent local identity. The Government have struggled in the past where there have been conflicting identities—for example, where counties with distinct identities have been forced to merge to create a combined county authority with a Mayor who did not fit. Part of the delay that we have seen comes from trying to get that through but it not working.

Jacob Young Portrait Jacob Young
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As the hon. Gentleman says, we have been flexible in our approach. We have the traditional combined authority model that previous combined authorities have adopted. On Thursday, we will see a new Mayor for York and North Yorkshire elected using the traditional combined authority model, as well as a new Mayor for the East Midlands being elected using the new combined county authority model. We have listened, we have been flexible, and we have met local needs as and when they have arisen.

In conclusion, the regulations are essential to ensure a robust legislative framework for combined county authority mayoral finances for budget-setting, precepting and the mayoral fund. I commend them to the Committee.

Question put and agreed to.

16:45
Committee rose.

Draft Contracts for Difference (Sustainable Industry Rewards) Regulations 2024

Monday 29th April 2024

(2 months, 3 weeks ago)

General Committees
Read Full debate Read Hansard Text Read Debate Ministerial Extracts
The Committee consisted of the following Members:
Chair: Christina Rees
† Afriyie, Adam (Windsor) (Con)
† Brereton, Jack (Stoke-on-Trent South) (Con)
† Doogan, Dave (Angus) (SNP)
Edwards, Sarah (Tamworth) (Lab)
† Fletcher, Mark (Bolsover) (Con)
† Johnson, Gareth (Dartford) (Con)
Mearns, Ian (Gateshead) (Lab)
Mills, Nigel (Amber Valley) (Con)
† Mullan, Dr Kieran (Crewe and Nantwich) (Con)
† Mumby-Croft, Holly (Scunthorpe) (Con)
† O'Brien, Neil (Harborough) (Con)
† Rimmer, Ms Marie (St Helens South and Whiston) (Lab)
† Smith, Jeff (Manchester, Withington) (Lab)
† Solloway, Amanda (Parliamentary Under-Secretary of State for Energy Security and Net Zero)
† Sultana, Zarah (Coventry South) (Lab)
† Whitehead, Dr Alan (Southampton, Test) (Lab)
† Whittingdale, Sir John (Maldon) (Con)
Chris Watson, Committee Clerk
† attended the Committee
Second Delegated Legislation Committee
Monday 29 April 2024
[Christina Rees in the Chair]
Draft Contracts for Difference (Sustainable Industry Rewards) Regulations 2024
16:30
Amanda Solloway Portrait The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Amanda Solloway)
- Hansard - - - Excerpts

I beg to move,

That the Committee has considered the draft Contracts for Difference (Sustainable Industry Rewards) Regulations 2024.

I apologise in advance for my loss of voice, which is a result of being rather enthusiastic at a Derby County football match on Saturday. The draft instrument was laid on 21 March 2024, and I acknowledge the Joint Committee on Statutory Instruments and the Secondary Legislation Scrutiny Committee, which have provided a helpful review of the regulations and have not drawn them to the special attention of this House or the other place.

The instrument amends regulations underpinning the contracts for difference scheme, which is the Government’s main mechanism for supporting new low-carbon electricity generation projects in Great Britain, and which has been hugely successful in driving down deployment costs. The amendments are about providing extra funding support through the CfD scheme so that we can better support offshore and floating offshore wind supply chains. This critical industrial sector has been hit hard by inflationary pressures and supply chain disruption resulting from the Russian invasion of Ukraine. Consequently, necessary investments in manufacturing and infrastructure have been delayed or abandoned altogether.

The CfD scheme currently focuses on only the price of deployment and no other factors, so offshore wind developers are incentivised to use the cheapest supply chain options available, regardless of where in the world they are or how dirty their means of production. We are therefore introducing sustainable industry rewards, or SIRs, to rebalance the CfD scheme so that it may help to address some of the supply chain challenges already causing bottlenecks in the supply chain, further increasing costs and slowing down deployment.

This policy intervention has been welcomed by supply chain companies and is intended to take effect for the seventh CfD allocation round, which should take place in 2025. So how does it work? The regulations require all offshore wind and floating offshore wind CfD applicants, as a condition of entry to the CfD, to obtain an SIR statement from the Secretary of State. Applicants who obtain an SIR statement will obtain additional revenue support through the CfD—a top-up, as it were—for investing in the economic, social and environmental sustainability of their supply chains.

SIR statements are obtained if the applicants make successful SIR proposals that fulfil one of two sustainability criteria:

“Investment in shorter supply chains in UK deprived areas”,

which means investing in manufacturing in the most disadvantaged places in the United Kingdom, or

“Investment in more sustainable means of production”,

which means investment in manufacturers that have signed up to the science-based targets initiative for the reduction of carbon emissions. The mechanism to allocate SIR funding will be a competitive auction just before the main CfD auction. An applicant who obtains SIR funding will then be contractually obliged to deliver their commitments. Undelivered commitments will be subject to a system of performance adjustments.

The Government are conscious that the extra support for offshore wind will have an impact on consumers’ electricity bills as SIRs—like the rest of the CfD scheme —will be funded through the existing electricity supplier obligation levy, which electricity suppliers pay. The actual budget for SIRs is still being discussed with the Treasury, but we estimate that it will be in the region of £150 million to £300 million a year for no more than three years, subject to the number of applicants. The impact on the consumer will be small, in the region of about £2 a year per consumer. Hopefully, hon. Members will agree that that is a small price to pay for the benefit that sustainable industry rewards could bring to UK communities by creating new and cleaner manufacturing facilities and highly skilled jobs in deprived areas and carving out opportunities for businesses to become part of the offshore wind supply chain.

To further ensure that the policy does not become a permanent burden on consumer bills, the intervention is time-limited for three years—it is there to address a specific market failure. CfD SIRs also complement other Government support for renewable supply chains, such as the £1 billion green industries growth accelerator, which runs to a similar timeframe. The explicit, detailed rules of the allocation are set out in the draft SIR allocation framework released in parallel with the regulations, which replace the current supply chain plan process for offshore wind and floating offshore wind. I commend the regulations to the Committee.

16:36
Alan Whitehead Portrait Dr Alan Whitehead (Southampton, Test) (Lab)
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It is a pleasure to serve under your chairmanship, Ms Rees. The Opposition very much support the changes, which we hope will come in for allocation rounds 7, 8 and 9—it would be nice if they came in for AR6, but that is not in anyone’s gift to sort out right now. First, we think they will make a material change to the quality of the schemes supported by Government funding. Secondly, we think they will uprate the whole industry so that it is clear about what it is doing about UK-sourced materials for the schemes, arrangements for UK jobs and the sustainability of the whole supply chain and of the products themselves. So far, so good; we are fully behind the proposal to introduce SIRs as a replacement for the present arrangement, which is the sustainable supply chain declarations.

I ought to say before we proceed that my voice is not that great. I was also enthusiastically supporting my football team on Saturday, but unfortunately the result was not as positive as that for the Minister’s team, which I understand has now been promoted to the championship. If my team fails to get promoted through the play-offs this season, our two teams will play each other, so we will both have lost our voices if we meet again under those circumstances.

The problem with the regulations is one of potentially considerable detail. If I am wrong in my concerns, I would appreciate an explanation from the Minister of why I am wrong. Alternatively, if I am not wrong in my concerns, will she tell me what the Government are thinking of doing in the future to put right what I think is a potential problem for the process?

The problem is that both the allocation round and the new process that is to be introduced are competitive and have a budget, but one precedes the other, providing for the possession of a sustainable industry reward, or SIR, which essentially allows the company to go on to the full allocation round. If a company does not have an SIR, it cannot go into the main allocation bidding.

Once the SIR process is in place, companies bidding to go into the main allocation round have three possible outcomes. The first is that they have bid for an SIR and their bid has been ticked off—the Government have said, “Yes, your bid qualifies for SIR status, so you can through to the allocation round.” However, that company may not necessarily want to bid in that first round, prior to the allocation round, to get a funded SIR, because they may have ways of reaching what is in the SIR other than by going for a funded SIR. For example, a Danish offshore wind operator may be able to reach those arrangements through its own existing internal facilities. It may say, “Well, we are going to bid in without a funded SIR, but we have an SIR, so we can qualify for the eventual allocation round.” That is outcome No. 1. No. 2 is a straightforward process where a company bids for and gets a funded SIR, and then goes through to the allocation round with that funded SIR in its pocket.

The third possibility depends to some considerable extent on how the budgets are set, both for the SIR and the eventual allocation round. A company could have qualified for an SIR, with the Government having ticked off its proposals as SIR-qualifiable, but when it gets into the pre-allocation round competitive bidding, it may fail to get an SIR because of the budget constrictions in the SIR process—logically, because it is a competitive round, it is possible that some people will fail to get a competitively bid SIR to go into the allocation round. At that point, it is a company that had a bid process in at pre-qualifying, which allows it to be competitive against all those other bidders that have funded SIRs going into the actual allocation round. If a company has bid on the basis that it is likely to win some funding in the SIR allocation round, but it fails to win it, logically it has to readjust its bid, as if there was no SIR in place, in order to remain competitive in the actual allocation round.

As far as I can see, companies would not be denied access to the allocation round, because they did have a certified SIR in the first place. If they have bid and lost, as opposed to having decided not to bid, their bid will have to look different in the allocation round itself. Is it the case that the most advantaged people in the allocation round may well be those who have bid for an SIR and lost, and who have then readjusted their bid accordingly? Could it be that the smartest strategy for companies is to try to lose an SIR, while having indicated that they can, in principle, meet its terms? They can then bid more competitively than if they had had an SIR in the first place.

That is not to undermine the scheme as a whole, which is potentially very good, but there is a potential problem with the process of going between two separate competitive allocations to get to the eventual position of companies being in possession of a CfD, which is what we want to happen. That could distort the bidding process and could certainly lead to some lack of clarity about the principle of placing these additional requirements on bidders to secure the sustainability and so on of supply chains, which could potentially undermine the process.

Does the Minister therefore have any guidance she can give me to show that this is not really a problem, because of various issues that she can conjure up this afternoon, either on receiving inspiration or otherwise? Alternatively, if she cannot fully satisfy me that I need have no worries about this issue, which I quite understand, we could perhaps engage in correspondence subsequently.

16:45
Dave Doogan Portrait Dave Doogan (Angus) (SNP)
- Hansard - - - Excerpts

I will speak with some reasonable volume; there is nothing wrong with my voice—I had quite a quiet weekend.

In the interests of collegiate working across the Floor of the Committee, let me say that contracts for difference are a useful mechanism and have demonstrated themselves to be so. They have delivered a systemic and substantial shift in the way that electricity is generated across the market in Great Britain.

What is proposed today is contingent on the CfD regime; it is an improvement to the regime—or rather an attempt to improve it. Criterion A is welcome, and in that respect the UK Government are nodding to what the Scottish Government have known for some time: that we should give priority to applying multiplier effects from substantial multibillion-pound investments in electricity generation from renewables to the supply chain at base in GB.

However, that is where CfD has largely fallen over—there have been a few notable exceptions, but systemic investment in the supply chain rooted in GB has not happened as a consequence of CfD. That is not to take anything away from the generation capacity that has been created from CfD and or even the funding mechanisms, which, like most funding mechanisms, are imperfect to a certain extent. However, it does signal that there is a substantial problem that Governments—both Scottish and UK—are trying to address.

I am pleased and proud that the Scottish Government have sought to address the issue in a substantially different way in terms of ScotWind’s focus on the strike price in the auction round, whereby it has prioritised a commitment from manufacturers to invest in the supply chain, rather than seeking the lowest possible price in the auction. CfD, however, continues relentlessly to pursue the lowest possible price, and we saw the Government come unstuck in auction round 5 with that approach. The way the Government have recalibrated that approach for auction round 6 is welcome, and I very much hope that it generates as much new capacity as possible in that auction round.

However, let me move on to the bit that the SNP fundamentally disagrees with. Criterion B for the sustainable industry rewards scheme is:

“Investment in more sustainable means of production, anywhere in the world.”

The Minister literally used the terms “means of production” in her speech, and I am glad she did, because it removes any doubt that she knows exactly what she is talking about. I would respectfully suggest that investing in another jurisdiction’s means of production is not the best use of bill payers money in the GB energy market. I do not think that the Government would find a great deal of support from ordinary bill payers in GB for using their standing charges to fund investments in the means of production in a foreign jurisdiction.

I am also concerned that the quantum that the Minister has set out, which I think is in the region of £1 billion over three years, will have an extremely marginal effect on GB’s manufacturing base by the time that it has been shared—potentially; we do not know in what proportion —with manufacturers in foreign jurisdictions. I am sure that Siemens Gamesa, Vestas and Hitachi are delighted with the UK Government’s largesse and ambitions to invest in other jurisdictions, despite that being the responsibility of Governments in those jurisdictions. Manufacturers and potential manufacturers here will take a much more jaundiced view, as the SNP does, of such a misplaced ambition to invest in potentially any market across the world.

With that, I decline to support the measure. I emphasise to the Minister that if the basis of what we are discussing today was simply criterion A, I would be happy to nod the regulations through, because that is a cogent and reasonable ambition for manufacturing in GB and, in particular, Scotland. However, that is not the case, and the regulations are somewhat—fatally, actually—undone by the provisions in criterion B.

16:51
Amanda Solloway Portrait Amanda Solloway
- Hansard - - - Excerpts

I thank the hon. Members for Southampton, Test and for Angus for their contributions. I will endeavour to answer the questions as fully as possible, but if I fail to answer them all, I am incredibly happy to have further meetings on the subject, as suggested, although this issue is not in my portfolio.

All companies need to meet a minimum standard of investment before they bid into the CfD, so there is a level playing field for everybody. Companies will know if they have been allocated an SIR before they bid in. If they fail to get a CfD, their budget will be reallocated to those who were successful. As I have indicated, however, if I have not fully understood the question, I am happy to clarify further.

On the point raised by the hon. Member for Angus, the UK does not manufacture all the components required to build a wind farm. We do not expect to make everything, and it would not be legal to mandate UK content. Where investment goes beyond the UK, we want that to go to cleaner, net zero-consistent firms that support our net zero commitments.

The contracts for difference are a key pillar for our energy security, but they need to adapt to changing market conditions. We are determined to make offshore wind deployment a success story and we are willing to take innovative steps to make that happen. Sustainable industry rewards have been deployed with industry input. They will provide much-needed support to an industry that has faced a tough economic environment and supply chain disruptions.

That support should trigger significant investment in expanding the supply chain’s capacity and capability in many deprived coastal areas around the UK and in new, cleaner manufacturing processes. The investment will help to deliver our levelling-up agenda and will positively impact communities that host large infrastructure projects by providing new, well-paid, high-tech manufacturing jobs, as well as by maintaining existing jobs. New offshore wind manufacturers from Britain and overseas are already looking at the UK, thanks to our package of supportive measures. It is true that the measures will have an impact on consumer bills, and we are talking to the Treasury to get the balance right between what realistic sustainable industry rewards can achieve, through targeted revenue support to get investment in the supply chain back on track, and the cost to the consumers.

These measures will also put us on an equal footing with our direct competitors in the EU and the US, who are investing heavily in their offshore wind supply chains. Considering how much deployment and potential we have, it is only right to try to attract and support as much of the supply chain as possible. It is key, though, that we provide the support in a targeted, proportionate way.

As many hon. Members will know, allocation round 6 of the CfDs is now live. The budget for allocation round 6 was announced as part of the Chancellor’s spring Budget. At over £1 billion, it is four times larger than for the previous round.

Alan Whitehead Portrait Dr Whitehead
- Hansard - - - Excerpts

The Minister is giving a good response to this afternoon’s debate, but I do not think that she addressed the detail of the particular point that I raised. It is not a question of reallocating CfDs but of how we go about a competitive allocation round if we have people in different circumstances, albeit with an SIR, leading up to that allocation round. I would appreciate an opportunity—outside this Committee, if possible— to get to the bottom of that particular problem.

Amanda Solloway Portrait Amanda Solloway
- Hansard - - - Excerpts

I would, of course, be delighted to facilitate that, either with me or the relevant Minister.

Although that budget does not include the SIRs, it is none the less a crucial step in our renewable energy deployment plans and demonstrates the Government’s commitment to ensuring that the UK remains one of the world’s leaders in renewables. The Secretary of State will decide in due course whether to increase the budget later this year. I commend the regulations to the House.

Division 1

Ayes: 13


Conservative: 9
Labour: 4

Noes: 1


Scottish National Party: 1

Resolved,
That the Committee has considered the draft Contracts for Difference (Sustainable Industry Rewards) Regulations 2024.
16:57
Committee rose.

Draft Goods Vehicles (International Road Transport Permits and Haulage Within the EU) Regulations 2024

Monday 29th April 2024

(2 months, 3 weeks ago)

General Committees
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The Committee consisted of the following Members:
Chair: Graham Stringer
Blomfield, Paul (Sheffield Central) (Lab)
† Costa, Alberto (South Leicestershire) (Con)
† Esterson, Bill (Sefton Central) (Lab)
† Evans, Dr Luke (Bosworth) (Con)
† Fletcher, Katherine (South Ribble) (Con)
† Hart, Sally-Ann (Hastings and Rye) (Con)
† Kniveton, Kate (Burton) (Con)
† Mills, Nigel (Amber Valley) (Con)
† Mohindra, Mr Gagan (South West Hertfordshire) (Con)
† Morrissey, Joy (Lord Commissioner of His Majesty's Treasury)
Newlands, Gavin (Paisley and Renfrewshire North) (SNP)
† Opperman, Guy (Parliamentary Under-Secretary of State for Transport)
Smith, Cat (Lancaster and Fleetwood) (Lab)
Stevenson, John (Carlisle) (Con)
Tarry, Sam (Ilford South) (Lab)
† Western, Andrew (Stretford and Urmston) (Lab)
† Yasin, Mohammad (Bedford) (Lab)
Stella-Maria Gabriel, Committee Clerk
† attended the Committee
Third Delegated Legislation Committee
Monday 29 April 2024
[Graham Stringer in the Chair]
Draft Goods Vehicles (International Road Transport Permits and Haulage Within the EU) Regulations 2024
18:00
Guy Opperman Portrait The Parliamentary Under-Secretary of State for Transport (Guy Opperman)
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I beg to move,

That the Committee has considered the draft Goods Vehicles (International Road Transport Permits and Haulage Within the EU) Regulations 2024.

These regulations are necessary to ensure that the UK upholds a key part of the UK-EU trade and co-operation agreement, thereby ensuring that the movement of goods and trade can continue to take place between the UK and EU. They also ensure that the UK’s bilateral agreements are properly reflected in legislation. They support the UK haulage industry by discouraging undercutting by cheaper foreign operators. I commend them to the Committee.

18:00
Bill Esterson Portrait Bill Esterson (Sefton Central) (Lab)
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It is a pleasure to serve under your chairmanship, Mr Stringer. I am very happy to support the Government in these important regulations, which give great support to the UK’s haulage industry and international trading prospects. I look forward to the Minister’s response to my short speech.

None Portrait The Chair
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Do you wish to respond, Minister?

Guy Opperman Portrait Guy Opperman
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I have nothing to add.

Question put and agreed to.

18:01
Committee rose.