Solar Industry

Dan Poulter Excerpts

Tuesday 5th March 2019 Westminster Hall

[Claire Perry]

The hon. Gentleman will be aware that we have some of the tightest energy efficiency standards for new homes, but I totally agree that we need to go further, and my right hon. and hon. Friends in the Ministry of Housing, Communities and Local Government are looking at that right now. Under this Government, we will build millions of homes; that is absolutely part of our ambition, and it is right that we make them as energy efficient as possible and that they contribute as much as possible to this revolution.

I want to focus on a couple of the challenges that my hon. Friend the Member for Eddisbury emphasised, one of which is the concern about jobs. We have seen a healthy supply chain build up and it is exciting that we are already seeing subsidy-free solar projects at scale being brought forward. One consultant’s estimates tell us that 2.3 GW of solar projects already in the system in the UK with, or awaiting, planning permission could be delivered without subsidy. Lightsource, which has just been bought by BP, says that it is developing 300 MW of subsidy-free projects backed by power purchase agreements, some of which will be delivered during 2019. So we are starting to see solar being delivered at scale without subsidy—indeed, I opened the country’s first subsidy-free solar farm in my first few weeks in the job. That is incredibly exciting, and I am very ambitious for the jobs that will be created over the next few years.

[Dr Dan Poulter (Central Suffolk and North Ipswich) (Con)]

The Minister is making a very fair point: as the technology has moved forward, the cost of solar has dropped. That is certainly true for the businesses that are taking this agenda forward at scale, but for many individual householders, the cost of investing in panels is still prohibitive. Will she address the question of how the Government could support householders to invest in that technology?

[Claire Perry]

I am coming to that point. We have not said that the feed-in tariff is no more, and that there is essentially no value out there; there is huge value in having decentralised energy generation. My hon. Friend the Member for Eddisbury and others made some powerful points about the role of community energy, which I am passionate about. As she mentioned, it is often a way in which people drink the green Kool-Aid and realise that they can be part of this transformation; zero-carbon faith groups, for instance, are amazing movements. That is why we have continued to support communities.

I was pleased to extract from the Department for Environment, Food and Rural Affairs a commitment to the rural community energy fund, which will be reopening for bids later this year; it is an important part of delivering community schemes in many of our constituencies. We have invested £8 million in local energy hubs, which are helping some of the local authority-led schemes that the hon. Member for Hornsey and Wood Green mentioned, both in London and across the country. We have a local energy contact group, and we are working closely with communities through investments in energy efficiency, local energy schemes, and combined heat and power plants through the £350 million heat network scheme. There is a lot of support for communities that want to move forward.

The smart export guarantee is not just to provide a route to market for those who have installed, or will be installing, decentralised installations; it is intended to do a couple of things. My hon. Friend the Member for Eddisbury is quite right to say that this energy should not be provided for free, or indeed at negative prices, as is sometimes the case in other countries. She will be pleased to know that the consultation has not yet closed, although it closes at a quarter to midnight tonight, so hon. Members can make their representations.

The plan is essentially for this scheme—which, as my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) pointed out, is a market-based approach—to help move us towards the smart energy system of the future that we all talk about, in which we have decentralised energy and people are able to do the energy balancing for their home or their community, plugging in their electric vehicles and doing peer-to-peer energy trading. The scheme is designed to support all those exciting things that are out there. I had a very effective meeting with suppliers of products and services who really support this, and who want to get to that decentralised energy future. They accept the points about tariffs needing to be fair and reasonable, and needing to provide an incentive, but they support creating those prosumers, as my hon. Friend the Member for Eddisbury has said. They support creating that aggregated demand side, meaning that all of us who install solar panels will have some power and some value in the system.

Unpaid Work Trials

Dan Poulter Excerpts

Tuesday 5th February 2019 Westminster Hall

[Stewart Malcolm McDonald]

Rather unusually, I am blown away and have no words. I have never before heard of that kind of thing happening, but it does not surprise me at all. Imagine how dispirited and depressed that kind of situation leaves an applicant feeling, particularly if they have applied for job after job and have got nowhere, often with no feedback from those from whom they hoped to secure employment.

[Dr Dan Poulter (Central Suffolk and North Ipswich) (Con)]

The hon. Gentleman has clearly outlined some worrying issues. I do not think anybody present would support somebody not being paid for a one-week work trial if that is how it is badged. There are also legitimate concerns that, as part of the interview process, people may be asked to perform certain work tasks to see whether they are suitable for the role. How would he differentiate between the unethical practices that he outlines and genuine job interview and job selection processes?

[Stewart Malcolm McDonald]

My Bill deals with the very scenarios that the hon. Gentleman mentions. I want to make it clear that I am not against trying people out for a job. The Bill is quite clear on that, too. I am against the use of unpaid trials to exploit people. Later in my speech, I will mention a business that has changed its practices as a result of this debate approaching, which might address the hon. Gentleman’s concerns.

Some employers know that the practice is wrong but are indulging in it. I know that they know it is wrong, because they changed their practices when my Bill was introduced last year. I will give two examples. The first, believe it or not, is the BBC. I had been told that the BBC was taking advantage of young freelancers; abusing their time, talent and energy; involving them in the production of programmes; and doing so through the guise of an unpaid trial period. I wrote to the BBC about the matter and, as a result, it has stopped that practice. Why? It knows that it is exploitative.

Aldi has changed the way that it interviews and recruits people. It has taken away what might have been thought of as the interview element, whereby someone carried out a work task. Instead, it now has a shorter interview period that involves shadowing someone around the store to see exactly how the business works and, crucially, so that the applicant can determine whether the job is for them. That is a better way to recruit people.

My Bill would also have given some of the cards to the applicant who, it strikes me, holds very few in the entire process. My Bill would have made it clear that employers offering a trial shift had to be doing so for a job that actually existed; that when the trial period started and finished had to be stipulated in black and white; and that applicants knew that, however they got on during the trial, the employer would give them proper feedback as to whether they had got the job. My Bill was all about empowering applicants and making it clear to them that the law is on their side, rather than it being deficient and too often working against them.

When I introduced my Bill, the Government were of the view that the law was not deficient and dealt with these matters as it was. In fairness to the new Minister, she has brought forward guidelines on the use of unpaid work trials. That is welcome—I get that change often happens in small steps—but I am afraid that it is not enough. She is, I am sure, unsurprised to hear me say that. We know that millions of people up and down the UK are crying out for proper legislative change that will back them when they go for a job. At the minute, the law absolutely does not do that. That can be evidenced by the fact that there has never been a single fine—

Leaving the EU: State Aid, Public Ownership and Workers’ Rights

Dan Poulter Excerpts

Tuesday 11th December 2018 Westminster Hall

[Laura Smith]

I agree with the points that my hon. Friend makes, and I share his concerns.

Economic democracy can empower groups and individuals who are otherwise excluded. Involving workers, the public and other stakeholders in economic decision making has both societal and economic benefits. Democratic participation can also enhance the effectiveness of publicly owned enterprises by tapping into grassroots forms of knowledge and the direct experience of employees and users of public goods and services. Democracy, if we are to view it as a vital part of popular sovereignty, must extend far beyond the ability to elect Governments every now and then. The active exercise of individual worker and community member ownership rights is a prerequisite of genuine democracy.

If those campaigning to leave the EU were at all serious about taking back control for the British people, they will recognise the role that democratic public ownership can play in tomorrow’s economy. It can be used to mobilise our economy in pursuit of other policy objectives. For example, democratic public ownership of our energy system could allow us to put tackling climate change at the heart of our energy system in a radical way, while protecting the industry’s workers throughout any energy transition. It is popular: opinion poll after opinion poll demonstrates that the public are crying out for more public ownership, even given the option of “whatever works”.

EU law specifically allows for the public ownership of a service provider, yet the treaty that contains that provision also sets out an economic policy based on an open market economy, with free competition and the liberalisation of services given special status. Some commentators have suggested that remaining subject to EU law will make the reversal of market liberalisation highly problematic for a UK Government who wished to do that.

To take the postal service as an example, the third postal services directive, adopted in 2008, established a clear floor for the postal market, ensuring that collection and delivery take place at least five days a week. At the same time, it has promoted competitiveness for its own sake, which has driven down standards and posed a threat. It fails to see the market as a natural monopoly, and insists that it must remain fully liberalised, restricting the UK Government’s ability to eliminate the market to sustain the publicly owned provider.

Although public ownership of the carrier is not prohibited, it is difficult to see how a UK Government who remain subject to EU law could create a public monopoly with workers and service users at its heart, and with the necessary cross-subsidisation to allow such services to thrive. As far as I am concerned, a true level playing field would establish regulations to ensure that private sector carriers could not undercut prices, and would include a re-establishment of collective bargaining, which I will mention later.

There are similar challenges in the energy sector. The European Court of Justice’s Essent ruling found that the Dutch ban on private ownership of shares in the energy sector amounted to a breach of free movement of capital. The experience in Germany shows that it is possible to create publicly owned energy companies to rival private energy suppliers, but only within the parameters of EU competition law. The recent fourth railway package poses similar challenges in the rail sector.

I briefly draw hon. Members’ attention to a recent dispute at Royal Bolton Hospital. In Alemo-Herron, the ECJ ruled that private employers that take on the provision of public services cannot be required to pay transferred staff the pay rises that they would have had if they had remained in the employment of the public sector. By prioritising the rights of private companies to business freedom over the rights of workers who find themselves in that situation, EU law creates a financial incentive to privatise our public services.

On state aid and public procurement, I recognise that the UK has not made full use of the flexibilities on offer to it as a member state. As with all other aspects of the debate, I do not blame the European Union for the pursuit of neo-liberal policies by successive UK Governments. This Government have certainly not needed any encouragement in that respect. I also accept that there will always have to be some rules to facilitate fair trade, but the EU state aid rules are far more stringent than those in the WTO subsidies regime.

Earlier this year, I called on the Government to provide funding to cover the cost of pay owed to care workers who were found to have been paid less than the minimum wage. The failure to do so risked bankrupting care providers and putting many vulnerable people at risk. The Government, however, had to discuss the issue with the European Commission because of concerns that state aid rules would prevent them from taking such action. I am not sure whether those discussions reached a conclusion before the Court of Appeal’s July ruling.

In addition to restricting the UK Government’s ability to react to certain economic events that threaten our industries, those state aid rules can restrict our ability to intervene proactively to support individual industries or domestic supply chains as part of a comprehensive industrial strategy.

[Dr Dan Poulter (Central Suffolk and North Ipswich) (Con)]

I thank the hon. Lady for giving way and congratulate her on securing the debate. She is making some fair points, but I take issue with the last one. There has been a very effective deployment of state aid to expand broadband provision throughout the United Kingdom, which she surely welcomes as a positive boost to the UK’s infrastructure, and to help our public services. There are some good stories to tell, despite the general recognition that the level of state aid in the UK is much lower in comparison with that in many other EU countries.

[Laura Smith]

I thank the hon. Gentleman for his intervention. I know everybody says this, but I will come to that later, when I address broadband specifically. I agree that improving that infrastructure is essential.

The recent research from the IPPR that I mentioned earlier concludes that the public place more weight on returning powers to expand the use of state aid than to deregulate, with 53% showing a preference for allowing the Government to support and protect our industries, while only 26% preferred conformity with EU state aid rules to secure a far-reaching EU trade deal.

The variation in WTO-plus agreements suggests to me that a bespoke trade deal could, in theory, include room for structural subsidies. Those could, for example, support industries of particular national value or natural monopolies, where cost reductions would be beneficial and would have no impact on other countries. In that sense, Brexit offers an opportunity to redefine what a true level playing field looks like.

The Communication Workers Union suggested that there would, in theory, be a strong argument for rolling out superfast broadband everywhere, supported by the state, which takes us back to the point made by the hon. Member for Central Suffolk and North Ipswich (Dr Poulter). Not only is that a natural monopoly, but it is a driver of social and economic wellbeing, as he pointed out. A similar argument could be made for our post office network.

With regard to the withdrawal agreement as it stands, the Attorney General has made it quite clear that in the backstop, restrictions on state aid are hardwired, and new restrictions could be introduced even if they are not in our national interest. I would be grateful if the Minister clarified whether he expects our future relationship with the EU to be substantially different or based on a parallel system. In the same way, the EU procurement directive is far more restrictive than the WTO agreement on government procurement. I would support, for example, limiting eligibility for public procurement contracts to companies that can demonstrate ethical maximum pay ratios and gender pay ratios, yet the EU procurement directive raises questions as to whether that would be compatible with single market rules.

There will undoubtedly be risks to workers’ rights if we leave the EU. Parliament is currently considering a deal that refers only to “non-regression”, when it would surely have been possible to ensure that British workers enjoy at least the same statutory rights as their European counterparts, as part of what I would describe as a genuine level playing field. We must also consider collective bargaining. I do not want to stray into a debate on the benefits of collective bargaining, but suffice it to say that I believe that rolling out sectoral-level bargaining will bring far more than just improvements to workers’ wages or employment conditions, and, alongside other reforms, it can give workers a real stake in their industries, and is another prerequisite for democratising our economy.

Heat Networks Regulation

Dan Poulter Excerpts

Wednesday 28th November 2018 Westminster Hall

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Richard Harrington)]

I believe this is the first time I have had the honour of speaking in a Westminster Hall debate under your chairmanship, Mr Pritchard, and I am very pleased to do so. I congratulate and thank the hon. Member for Lewisham East (Janet Daby) for securing a debate on this important issue.

When I started thinking about heat networks, I realised that when I first moved to London, which I respectfully say was probably before hon. Lady was born, I lived in an old block of flats with a big boiler in the basement. We were all either freezing cold or boiling hot, and we paid far too much for heating via our service charge. My understanding is that that is really what a heat network is—obviously not just in one block of flats but in an area—so I immediately sympathised with her cause.

Of course there is a lot more to it than that. I agree entirely with the hon. Lady’s assertion that we need to ensure that all heat network consumers are well protected and benefit from fair bills, which is not the case at the moment. On the plus side, heat networks are a valuable part of our commitment to decarbonising heat, and we expect the sector to expand significantly with continued support from the Government. That does not mean it should continue as it is now, but the principle of heat networks is good if they work properly, and they can be of mutual benefit to the Government’s decarbonisation projects, to energy and local authority suppliers and to consumers in all our constituencies.

More than 400,000 consumers across the country are already on a heat network, and most report a largely positive experience. They are currently covered by general consumer protection and competition law and by the Heat Network (Metering and Billing) Regulations 2014. In addition, consumers on a Heat Trust-registered scheme, which the hon. Lady mentioned and I will come to in a moment, have free access to the energy ombudsman’s services.

In 2017, my Department commissioned a large-scale survey to quantify consumer experiences of heat networks in England and Wales for the first time. The results show that heat network consumers are as satisfied as non-heat network consumers with their heating system, and that on average they are likely to pay less for their heating. That is supported by analysis from the Competition and Markets Authority, which I strongly welcome. However, both our consumer survey and the CMA found evidence that some consumers get a poor deal on price and do not receive the quality of service we expect. That is exactly what the hon. Lady said, and she was backed up well by the hon. Member for Greenwich and Woolwich (Matthew Pennycook), whose constituents have clearly had a similar experience.

In its final report in its heat networks market study, the CMA makes important recommendations about how to strengthen consumer protections for heat network consumers. My Department has been reviewing the CMA’s findings alongside the recommendations of the industry-led taskforce that reported at the beginning of the year. Very soon, we will set out our priorities for establishing the long-term market framework that the hon. Lady mentioned, with—I stress this—a key focus on protecting consumers.

[Dr Dan Poulter (Central Suffolk and North Ipswich) (Con)]

I thank my hon. Friend for giving way and I congratulate the hon. Member for Lewisham East (Janet Daby) on introducing the debate. She made some very good points. On the point that the Minister has made, the Government have highlighted and responded to the unfair hiking of leasehold charges, and have dealt with that issue. The examples are from the few rather than the many, if you like. We are discussing district heat schemes. A few unscrupulous providers of those schemes are trying to exploit the people they are provided for. I think it requires legislation, rather than a good-will scheme or framework to deal with that. Would the Minister put that into his thinking when the Government respond?

[Richard Harrington]

I thank my hon. Friend for his intervention. I agree with him. It seems to me that legislation is exactly what is needed. In my three years as a Minister, I have learned that it is easy to talk about legislation, but it is all in the detail. We have to make sure that it does exactly what my hon. Friend the Member for Central Suffolk and North Ipswich (Dr Poulter) mentioned, which is to protect consumers, but at the same time provide a basis for the industry to expand. As I said, for decarbonisation and for many things, the structure can be a really good one for consumers.

Parental Leave for Parents of Premature Babies

Dan Poulter Excerpts

Tuesday 13th November 2018 Westminster Hall

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Kelly Tolhurst)]

It is a pleasure to serve under your chairmanship, Mr Pritchard. I congratulate the hon. Member for Croydon North (Mr Reed) on securing this important debate and thank him for his passionate speech.

I sympathise greatly with the experiences of parents of premature babies, especially those whose children spend extended periods in neonatal intensive care. I am sure we all have personal experience of friends or constituents who have been in this situation. I absolutely understand the hon. Gentleman’s point and sympathise. I assure the Chamber that this Government are committed to supporting working parents, including those of premature babies.

The UK’s system of maternity leave is one of the most generous in the world. Pregnant women and new mothers are entitled to take up to 52 weeks of leave as a day-one right and up to 39 weeks of statutory maternity pay, if they are eligible for pay. In the case of premature births, eligible fathers and partners have the flexibility to take up to two weeks of paternity leave and pay within eight weeks of the expected date of birth, rather than within eight weeks of the actual date of birth, if they wish.

Employed parents also enjoy other employment rights that enable them to take time off work following the birth of their child or agree a working pattern with their employer, which gives them the flexibility to combine work with caring for their child. Subject to meeting eligibility requirements, employed parents now have the right to request flexible working and the right to take shared parental leave and pay. Shared parental leave and pay enable eligible couples to share up to 50 weeks of leave and up to 37 weeks of pay. They can use the scheme to take up to six months off work together or, alternatively, stagger their leave and pay so that one of them is always at home with their newborn child. They can also have periods of leave within periods of work. Parents can use this flexibility to take time off work according to their and their baby’s needs—for example, fathers and partners might wish to take time off work when their child is born and later in the first year.

We are also undertaking a short, focused internal review of provisions for parents of premature babies. We expect to conclude that in the new year.

[Dr Dan Poulter (Central Suffolk and North Ipswich) (Con)]

One of the issues that I hope the Government will look at in the review is the voluntary conduct of employers and whether they want to support additional leave for parents of premature babies. We must remember that a baby could be born at 24 weeks, which is many months before its due date. The problem with voluntary codes is that, although some employers might be exemplars, many might not be. What more can the Department do to ensure that all employers recognise the special needs of parents in this difficult situation?

[Kelly Tolhurst]

My hon. Friend is absolutely right. Voluntary codes are there to try to change culture and to give businesses and employers the opportunity to do the right thing in the best way they can.

As I was saying, we are undertaking a short, focused review of provisions for parents of premature babies. We will work with ACAS to see whether we can improve the guidance. When the outcomes of that review have concluded in the new year, the Government will hopefully be able to come back with further activity and make further provisions.

Economic Growth: East of England

Dan Poulter Excerpts

Wednesday 10th October 2018 Westminster Hall

[Dr Dan Poulter (Central Suffolk and North Ipswich) (Con)]

It is a pleasure to serve under your chairmanship, Mr Davies. I congratulate my hon. Friend the Member for Waveney (Peter Aldous) on securing this debate, on his chairmanship, with the hon. Member for Cambridge (Daniel Zeichner), of the east of England all-party parliamentary group, and on helping to put the east more firmly on the Government’s map.

My hon. Friend was absolutely right that the region has not always advocated our case for investment to the Government, and we have not always outlined the reasons why additional investment in the east would unlock a region that already helps to bring economic benefit to the country as a whole. The east is a net contributor to the UK economy. As the hon. Member for Cambridge said, additional support for our infrastructure, connectivity and digital economy will deliver benefits for the whole region, and will help to improve the growth and economic productivity, which will raise tax revenue for the whole country. That is a compelling argument for why the Treasury should support infrastructure projects in our region.

Before I touch on agriculture, food and drink, infrastructure—particularly the A12 and rail, which I am sure my right hon. Friend the Member for Witham (Priti Patel) will talk about later—and the importance of looking after the public sector at a time when we are seeing private sector growth in the east, it is important to reflect on the fact that unemployment in our region has come down over the past 10 years. Youth unemployment is at lows that we have not seen for more than 20 years—particularly in my part of Suffolk—and we are seeing more vocational training and apprenticeships. Those are all good things. We can also note that average wages across the east of England, particularly in Suffolk, are above the UK mean and median, which means that we live in a relatively affluent part of the country. There are still pockets of deprivation, as we are all aware, such as those in Lowestoft and Ipswich, which need particular attention.

Agriculture, food and drink is one of the drivers of the economies of Norfolk and Suffolk, and of parts of Cambridgeshire and north Essex. There are many national names in our counties that contribute to the UK economy. They are names that we can be proud of, such as Gressingham Duck, Aspall Cyder and Adnams brewery, to name but a few. However, our agricultural sector needs additional support from the Government for the development of land-based college training so that young people have opportunities in agriculture, food and drink. One area that I ask the Minister to look at is vocational training. Throughout the region, there has been a tremendous expansion in vocational training in agriculture, food and drink, particularly in light manufacturing, and we can be very proud of that. It is the driver of our economy, particularly in Norfolk and Suffolk, but we need more support for our land-based training colleges, such as Easton and Otley College, which can provide the next generation of agricultural and land-based apprentices, farm workers and people working in the food and drink industry that is so important to our region.

We recognise that the east of England—Suffolk in particular—has benefited from considerable Government support for infrastructure. We have support for the third crossing in Lowestoft that my hon. Friend the Member for Waveney has campaigned for so tirelessly, and, to alleviate traffic congestion in Ipswich, we have the promise of a bridge, for which the previous Member for Ipswich campaigned very hard.

We have also had additional investment, with the A11 being dualled, but the A12 is the “motorway”—although it is not actually a motorway—for entry to Essex, Norfolk and Suffolk. The Government have already indicated support for improvements to the A12 approaching Ipswich, but if there is a case for additional support and investment, it is the other stretch of the A12—between Ipswich and Lowestoft—which unlocks the energy gateway and energy coasts and needs considerable improvement. It is still a single-track road, which reduces the ability of new businesses to develop on the eastern coast of Suffolk. Investment in the A12 would both benefit tourism—another great driver of our economy—and help to unlock the energy coast, with the potential of Sizewell C, renewable energies and the many windfarms. I know all MPs here will strongly support that investment.

Finally, I will touch on investment in the sustainability of the public sector. If we want a thriving private sector in productivity and economic development, we need to look after our public sector. We have to recognise that in the east of England, we have challenges in retention and recruitment. Although there are national retention and recruitment challenges in some parts of the public sector, such as in the healthcare workforce, in the east of England we face particular challenges, with a shortage of GPs. Many GPs are approaching retirement age, which I believe is also true in parts of north Essex, and we need to recognise that challenge. We must also recognise that we have a shortage of nurses in some areas, and that to continue looking after the private sector, we need to invest in the public sector and support the east of England with financial incentives that will attract public sector workers.

That is also true of education in parts of our region; there are difficulties attracting teachers to some of our schools. If we want to maintain the engine room of our thriving and growing east of England economy, we have to recognise that the package that will attract families will also support teachers and other public sector professionals who relocate to the east of England, as well as looking after the many dedicated professionals who already work very hard there.

I hope the Minister has heard my plea about supporting vocational training and apprenticeships for the agricultural and land-based economy. If he is free, perhaps he could come and visit Easton and Otley College to see for himself some of the good work that goes on there.

Geothermal Energy

Dan Poulter Excerpts

Tuesday 19th June 2018 Westminster Hall

[Dr Whitehead]

No, it is a very factual debate—that is the difference.

The geothermal potential of the country is enormous, and the hon. Member for Falkirk (John Mc Nally) set out what the potential would be, in electricity and heat, for the UK were we to proceed seriously with geothermal energy. Perhaps a limiting factor is the fact that geothermal energy is not available everywhere in the country. We need to be clear about the fact that deep geothermal is available on the basis of three different kinds of site. Basins with very ancient water at the bottom are one kind of site. Another kind, which require slightly different technology, are areas with radiothermal granite batholiths. I believe that the Minister, as a first-rate geographer in her time, will know all about batholiths and lopoliths and various other things. We have quite a lot of radiothermal batholiths in the UK, with naturally occurring radioactive-based heat coming from deep within the earth’s crust. Another kind of site relies on the availability of technology to release heat by putting water down one pipe and up another, giving geothermal as a result.

As my hon. Friend the Member for Bishop Auckland mentioned, lower-temperature geothermal resources arise from abandoned mine workings. With heat-concentration techniques that is not a problem, in terms of concentrating the heat to get into production either for heat distribution or, indeed, for making steam to generate electricity.

As hon. Members have kindly mentioned, I have an interest in the debate because I think I can claim to be the only sitting Member of Parliament who has directly set up a geothermal energy scheme. I know a little, therefore, about how it all works. That scheme is based, as has been mentioned, in the middle of Southampton in a not particularly prepossessing shed, with a small wellhead in the carpark of the former Toys R Us store. That unprepossessing setting hides a well, drilled to about 1,800 metres. Water comes up at just over 70° Celsius and is converted into the material for a district heating scheme by a heat exchanger and concentrator. Now Southampton has a city centre district heating scheme with some 17 km of pipes, covering the university, the civic centre, the country’s only geothermally heated hypermarket and a five-star hotel. In other words, there is a complete city centre arrangement, heated substantially by geothermal energy. Not only that, but it has been heated in that way on an untroubled basis since 1987, and will continue to be so until 2087 on present estimates of what may be available. That is the potential, in practice, for geothermal energy.

[Dr Dan Poulter (Central Suffolk and North Ipswich) (Con)]

The hon. Gentleman speaks with great knowledge, and I pay tribute to his work promoting geothermal power in his constituency. What are his thoughts on the potential for geothermal power in more rural areas, where there is great reliance on oil central heating, often at great cost and with a high carbon footprint? Does he believe that more could be done to incentivise and encourage developers in rural areas to look at geothermal power for new developments and homes?

[Dr Whitehead]

I have to tell the hon. Gentleman that he is the only Member present for the debate who does not have a geothermal resource under his constituency. I have mentioned the different types of geothermal resource, and the large Mesozoic basins are in East Yorkshire and Lincolnshire, around the whole Wessex area, in Southampton and Worcester, and in Cheshire. The radiothermal batholiths are in the eastern highlands, across the north-east and north-west of England, and in Cornwall. The hon. Member for Strangford (Jim Shannon) will be delighted to know that about half of Northern Ireland is covered by two Mesozoic basins, giving most areas a strong resource.

The problem is, first, that that resource is not available everywhere and, secondly, that because of the capital cost of the borehole, geothermal energy is probably best suited to larger district schemes. One of the key issues is that because of the immediate availability of the resource, if an area—particularly a rural area—is capable of receiving it, it can be used for relatively small district heating schemes, or for local plant producing electricity in the area with a combination of a relatively small heat take-off. There is considerable potential, but I am sorry to tell the hon. Member for Central Suffolk and North Ipswich (Dr Poulter) that drilling under his constituency at the moment would be fruitless, as far as I am aware. However, it is possible to do it in some rural constituencies where the resource is more available.

[Dr Poulter]

A number of new, larger homes—particularly barn conversions, which are very popular in Suffolk—have invested in the technology as a means of heating. My question is more about how we can do more to incentivise developers on small-scale developments, perhaps on the edge of rural villages and towns, to look at similar schemes, and what suggestions the hon. Gentleman may have to bring forward those incentives.

[Dr Whitehead]

I think that the hon. Gentleman is referring to vertical hole shallow geothermal ground source heat installations. They are perfect for rural homes, as he described. They will provide sufficient heat, from a relatively shallow penetration into the earth, for heat exchangers to heat a home to a regular temperature of 60°-plus. Although I do not think that that is an essential part of this afternoon’s debate—it is more to do with ground source heat pumps—the hon. Gentleman is right. It is a technology that I would strongly recommend for off-grid properties in which, in the past, the alternative heating might have been oil. It can absolutely reliably replace that form of heating. I join the hon. Gentleman in recommending to the Minister and the Government that efforts to secure the installation of ground source heat pumps for off-grid properties in rural areas would bear considerable fruit and ought to be strongly supported—rather more strongly supported, I suggest, under the renewable heat initiative than is currently the case.

I hope that I have set out the potential for geothermal energy, and stated how it can be done in practice and what its benefits are. I was leader of Southampton City Council at the time that the scheme I described was initiated, but provided that it had the resource, almost any local authority in the country could pilot and undertake such a scheme relatively easily. The main issue is how to raise the initial capital funding up front to get the scheme under way.

Let me say one or two words about what the Government ought to be doing—in addition to the constructive and sensible suggestions made by my hon. Friend the Member for Bishop Auckland—to start using this resource. Capital grants will be required up front for the essential drilling of the well. The Government have underwritten several such schemes in various parts of the country to the tune of about £2 million a time, and we should extend the availability of those initial grants. Currently, the money available through the non-domestic renewable heat incentive is not sufficient to get those schemes under way from a capital point of view. As far as deep geothermal is concerned, the RHI currently provides 5.38p per kWh. That does not compare favourably with funding for ground source heat pumps, which comes out at 9.36p.

At the moment, the incentives to get such a scheme going properly in any area are not sufficient. That is particularly unfortunate; geothermal energy ought to be considered a different form of renewable energy, because of its known longevity. When we invest in a geothermal energy plant, we are investing in a capacity that will give us free energy for 120 years—we cannot say that about pretty much any other renewable energy source, except possibly the Swansea tidal lagoon. I therefore think that the criteria under which geothermal energy is considered should be based on that kind of payback and that kind of timeframe.

Dieter Helm Energy Review

Dan Poulter Excerpts

Tuesday 24th April 2018 Westminster Hall

[Graham Stringer (Blackley and Broughton) (Lab)]

I beg to move,

That this House has considered the cost of the energy review by Dieter Helm.

It is a pleasure to serve under your chairmanship, Mr McCabe. The motion has a slight ambiguity as to whether we are considering the cost of producing the report or the contents of the report itself, and I want to make it clear that we are considering the report itself, and not the £500 a day paid to Professor Helm for producing it.

The report is a devastating critique of Government policy over the past 10 years or so. That is not just this Government, but the coalition Government and the previous Government. The report’s extraordinary headline is that we will have paid £100 billion—that is one hundred thousand million pounds—more than necessary by 2030 for current energy policies. Consumers are paying 20% more for energy than would otherwise have been necessary. Thinking about the debates, rows and discussions we have about major infrastructure in this place, High Speed 2 will cost £40 billion or £50 billion, which is half as much. Some of my hon. Friends are against that highly controversial project, and many Government Members are in favour of it. Cost is a crucial issue, but it looks as though, for no real infrastructure benefit whatever, by 2030 we will be paying twice as much—£50 billion more—for an energy system that is, in the words of Professor Helm, “not fit for purpose”. One could also argue about the marginal differences in cost that people see for remaining in or leaving the EU. The sheer size of this £100 billion figure leaves many such arguments in the shade.

Professor Helm’s report is long—240 pages long—but if people want a simple version of his views, I recommend reading the transcript from when he was before the Business, Energy and Industrial Strategy Committee on 16 January. He knocked down some of the criticisms of the report when he was quizzed by Members. The transcript is much easier to digest and more to the point than the 240 pages of dense, well-argued points.

One can agree or disagree with the report, but it is logically coherent. One surprise is that, given the sheer magnitude of the figures involved, the Government have not responded in detail to it. I am sure there are responses that could be made. There could be disagreements on much of the detail in it, but it is a real failure that the Government have not responded to such an important report, which they of course asked for.

One thing that the report emphasises is how the energy market is working and has been set up. The Government have tried to pick winners, but as often happens, they have not. We would all like to pick winners; we would all like to win on the Derby or the Grand National, but most of us are not very good at it, and Governments by and large are not much better at picking winners in industry and energy. The people who are good are inefficient businesses—losers, rather than winners, if you prefer, Mr McCabe. They are good at picking weak Governments and lobbying and arguing for subsidy for less-than-competitive industries. The report says that they have done that, and it is devastating in its analysis.

Not only have the Government—as I said, I am not making a particular charge against this Government; this charge is levelled at the last three Governments—been subject to lobbying and wasted money, but in the background of the process are many lobbyists and green groups whose acquaintance with the truth sometimes leaves a lot to be desired. We not only have industry with vested interests, but groups such as Greenpeace lobbying in the background, many times dishonestly, to support policies that fit their ideological preference.

Mr McCabe, you may remember walking into the House of Commons before Christmas and seeing big signs outside sponsored by Greenpeace that said the cost of wind had been cut by 50%. That was an outright lie. It was challenged at the Advertising Standards Authority, and Greenpeace was made to take those adverts down. When Greenpeace and others were asked to justify their position, they said that they were using projected costs for wind farms in the North sea that had not yet been commissioned, let alone built. That is the background to a controversial policy area that the Government should by now have responded to.

I said that Professor Helm was coherent, which he is, but—this will come as no surprise to the shadow Minister, my hon. Friend the Member for Southampton, Test (Dr Whitehead)—I do not agree with the objectives that Professor Helm has always agreed with. They are the Government’s objectives, too, and I will explain why I do not agree. He starts the energy review by talking about the Government’s target in the Climate Change Act 2008 to reduce carbon emissions in this country by 80% from 1990 levels by 2050. I do not agree with that, and I will explain why. However, it is the Government’s policy and the law, and that is the basis of the review. His second objective, which he took as concrete, was the security of energy supply. Along with those two objectives, he wanted to see whether costs could come down.

My disagreement is that I have always thought that there should be a hierarchy of targets in energy policy. Security of energy supply should always be the top target, because if the lights go out, not only would we be in trouble as Members of Parliament for creating a system that does not keep the lights on, but the country would be in trouble. I have always thought that security of energy supply, rather than arbitrary carbon targets, should be the top priority.

Secondly, I would find it difficult to explain to my constituents and industry in my constituency if price was not one of the top priorities. For it to be tertiary is a mistake. Lower prices should be a priority, but a consequence of the policy is that they have been neglected, and they have gone up by more than they would have otherwise. That is where I disagree.

[Dr Dan Poulter (Central Suffolk and North Ipswich) (Con)]

I congratulate the hon. Gentleman on securing the debate; he makes some good points. I agree entirely with what he has just said about price, and with what the report seems to indicate. There has been a complete failure of competition in the domestic energy market; Governments always talk about it, but they have failed to deliver. There is still a predominance of the big six energy companies, effectively rigging prices. Does the hon. Gentleman agree that that needs to be fundamentally addressed if we are to have a proper energy market that benefits customers?

[Graham Stringer]

That is my reading of the report. I think Professor Helm goes slightly further than that—beyond the big six energy companies—and talks about the problems that have been caused by investing in costly new technologies that might have been cheaper to purchase later, but I essentially agree with the hon. Gentleman.

The price of energy is important not just in the way that I have described; it is also probably the most important industrial policy that this country can have. Matt Ridley pointed out in The Times some 12 months ago that at the start of the industrial revolution—this is from memory, so I might have the numbers slightly wrong, but they will not be far out—the cost of energy in Newcastle was about one 20th or one 25th of the cost of energy in China. We know what happened: this country, Europe and the United States boomed ahead because what previously required 20 horses could now be done with a few lumps of coal.

Recklessly putting up the price of energy has been a huge mistake for the country. When I say that, I do not want anyone to think that I am somehow in the category of anti-science. My background is that of a scientist, and I understand the opacity or otherwise of carbon dioxide to different wavelengths of electromagnetic energy. I understand the greenhouse effect in some detail, and I do not deny its existence—I think that what its impact will be is sometimes exaggerated, but that is a debate for another day.

We have been putting the price of energy up and closing coal stations—probably the coal stations should have been closed earlier, as Professor Helm says. As an intermediate pathway to the Government’s goals, it might have been sensible to use gas-fired power stations, which have half the carbon emissions of coal-fired power stations. If we look at the whole-world picture, we see what little impact we have—I think we produce about 2% of the carbon dioxide in the world. Over the next 10 years or so, 1,600 coal plants are planned in 62 countries around the world. China will make 700 of them. Approximately 65% to 70% of India’s energy production is from coal, but last Monday India cancelled the vast majority of its planned nuclear power plants.

Whatever impact we have will be minimal to negligible, yet we are putting the price of energy up for some of the poorest people in the country, including my constituents. We are also undoubtedly damaging industry, because due to the high price of energy we are, in effect, exporting many jobs to countries such as China, India and Malaysia, where they are often less efficient, and there is the carbon cost of the transport by ship or plane when we buy their goods.

Professor Helm, taking the Government’s policies as firm, has a number of suggestions. First, he believes that there should be one uniform carbon price. He points out, in a chart towards the end of the report, that we have many carbon prices at present, where we add to the cost of fossil fuels through many of the interventions to VAT. He believes that they should be unified, which would make things transparent. He also believes that there should be auctions for energy suppliers. Devastatingly, he says in the report that he is surprised, and I think it was a surprise to everybody else, that when things were put out to auction, rather than using interventionist prices, the prices dropped dramatically.

Professor Helm gives us his reasons on the interventions. I do not want to read too much of the report directly, but he says that the different interventions have made the market extremely complicated and expensive. He points out:

“The legacy costs from the Renewables Obligation Certificates (ROCs), the feed-in tariffs (FiTs) and lowcarbon contracts for difference (CfDs) are a major contributor to rising final prices, and should be separated out, ring-fenced, and placed in a ‘legacy bank’. They should be charged separately”.

On the complexity, Professor Helm’s answer to the Business, Energy and Industrial Strategy Committee was devastating, because some of the vested interests had been into the Committee previously and had lobbied. Some of the renewable energy people and some of the people from the Committee on Climate Change—all of them professors, you understand, Mr McCabe—had said, “There’s no problem with complexity whatever.” I think there is a problem, and anybody who has been in the real world for very long knows that there is a problem. Professor Helm’s key finding and recommendation on that was:

“The scale of the multiple interventions in the electricity market is now so great that few if any could even list them all, and their interactions are poorly understood. Complexity is itself a major cause of rising costs, and tinkering with policies and regulations is unlikely to reduce costs. Indeed, each successive intervention layers on new costs and unintended consequences. It should be a central aim of government to radically simplify the interventions, and to get government back out of many of its current detailed roles. This review explains how to do this.”

In taking on the professors who think that complexity is not a problem, Professor Helm said:

“It is empirically impossible to work out the costs of current policy, because each policy intervention interacts with every other policy intervention. Any cost-benefit analysis of a particular intervention has to do the plethora of interactions with all the other bits as well. If you want an empirical piece of proof, you need to have all that analysis done and then analyse the empirics of the counterfactual, of what would have happened if you did not have all that complexity.”

I agree with him: it is impossible.

The report also says that, having created that complexity:

“As a consequence of Electricity Market Reform (EMR), the government now determines the level and mix of generation to a degree not witnessed since these were determined by the nationalised industries”.

I suspect that if I had been a Member of this House when Lord Lawson, as Energy Secretary, proposed privatising the energy industries, I would have voted against. Nationalised industries at least have a direct line of responsibility between the taxpayer, who may benefit from them and subsidise them, and the controlled industry. What we have here is a complete mess: Government intervention, interfered with by lobbyists and vested interests with no accountability, which ends up with the poor consumer paying more than they need to.

Professor Helm criticises the Government for focusing too much on electricity and not enough on agriculture, which is a tiny part of the economy and creates about 10% of carbon dioxide emissions. He strongly believes—this should please the Government—in a free market solution. He believes that the auctions will not pick winners, but that the winners will pick themselves by being efficient in the auction process.

I want to deal with one of the main questions put forward by my hon. Friends who represent constituencies where Vesta, for instance, produces wind turbines. That question is whether the alternative, renewable energy business would have got going without intervention. Nobody can really answer that. When all that extra cash has been put into the energy market, there are bound to be spin-off benefits, but it cannot be known at any time, unless the market is tested, whether someone could have got more bangs for their buck for investing differently.

One area where I completely agree with Professor Helm is that we need research—not just the research carried out by vested interests who want to produce energy, but pure research. There is a long way to go in battery technology, which may be part of the solution. Unless something has happened since I left the Energy and Climate Change Committee, we do not even have a proper pilot scheme for carbon capture devices. All those things could be explored in a pure way and then, in the way that often happens after pure research, industry could look at what could be used and the way we are investing at the moment.

The final point made by Professor Helm is that tens of billions have been invested in subsidising wind farms in the north sea. On what basis can we say that was the right decision, rather than putting the money into carbon capture and storage? I do not have the answer to that, and I know the Government do not have the answer. They have opened their arms to vested interests and have ended up with a system that disadvantages our constituents and is essentially not fit for purpose. The Government need to respond thoroughly and properly to this important report. It is possible to disagree with it or to agree with parts of it, but it certainly needs a response.