Energy Policy
Greg Clark Excerpts(6 years, 8 months ago)
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The Secretary of State for Business, Energy and Industrial Strategy (Greg Clark)
As part of preparations for EU exit, the UK is establishing a domestic nuclear safeguards regime to ensure that the UK continues to maintain its position as a responsible nuclear state and that withdrawal from Euratom will not result in the weakening of our future safeguards standards and oversight in the UK.
This Government believe that it is vitally important that the new domestic nuclear safeguards regime, to be run by the Office for Nuclear Regulation, is as comprehensive and robust as that currently provided by Euratom. The Government have therefore decided that it will be establishing a domestic regime which will deliver to existing Euratom standards and exceeds the standard that the international community would require from the UK as a member of the International Atomic Energy Agency (IAEA). International oversight will be a key part of the future regime. The UK is seeking to conclude new agreements with the IAEA that follow the same principles as our current ones. This will ensure that the IAEA retains its right to inspect all civil nuclear facilities, and continue to receive all current safeguards reporting, ensuring that international verification of our safeguards activity continues to be robust.
Discussions with the European Union are on-going. We will be exploring a number of options for smooth transition from the current Euratom regime to a domestic one. The unique and important nature of the civil nuclear sector means that there is strong mutual interest in ensuring that the UK and Euratom community continue to work closely together in the future. The UK’s ambition is to maintain a close and effective relationship with the Euratom community and the rest of the world that harnesses the UK’s and the Euratom community’s expertise and maximises shared interests. By maintaining our current safeguards and standards we are providing the best possible basis for continued close co-operation with Euratom in the future.
Whatever the outcome of those discussions, the Government are committed to a future regime that provides at least the existing levels of assurance. The legislation to provide for this was announced in the Queen’s Speech and will be brought forward in due course. This policy statement provides important context both for parliamentary consideration of that Bill, and for the forthcoming talks with the European Union, which take place in the last week of September.
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Oral Answers to Questions
Greg Clark Excerpts(6 years, 8 months ago)
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Alan Mak (Havant) (Con)
7. What steps he has taken to support the development of electric and autonomous vehicles.
The Secretary of State for Business, Energy and Industrial Strategy (Greg Clark)
Our industrial strategy capitalises on our strengths as we build the next generation of motor vehicles. On 25 July, we committed £246 million to the Faraday challenge to make Britain a centre for the development of battery storage. The following day, BMW announced that the new electric Mini will be built in Oxford.
Alan Mak
As the fourth industrial revolution gathers pace, countries that embrace electric and autonomous vehicles will find it easier to move both people and products, reducing costs and boosting productivity. Will the Secretary of State continue to support such vehicles, as they drive our future economic growth and productivity?
Greg Clark
I will indeed and I am grateful to my hon. Friend for his championing of those investments. We already have an outstanding reputation in the automotive sector through our leadership and investment in both electric and automated vehicles. Ford, for example, has announced that its European smart mobility research will be based in Britain, and Nissan is conducting its automated vehicle testing in the UK. Our code of practice for testing new technologies is globally recognised as the best in the world. We have a successful motor industry and we want it to be stronger still.
Stephen Kinnock (Aberavon) (Lab)
On 20 February, the Secretary of State said that he would release the famous letter to Nissan
“when it is no longer commercially confidential”. —[Official Report, 20 February 2017; Vol. 621, c. 784.]
Will he explain whether that will be in 2017, 2018, 2019, or sometime thereafter?
Greg Clark
Yes, I will release the letter. The hon. Gentleman reminds us of the fact that the investment Nissan is making in Sunderland has secured 7,000 jobs on that site and nearly 50,000 jobs in the supply chain. It was a very welcome investment. We need to respect Nissan’s confidentiality, but I have made a commitment to the House that, when it no longer applies, I will certainly release the letter.
Mr Gregory Campbell (East Londonderry) (DUP)
What discussions is the Secretary of State having with manufacturers on prolonging battery life as rapidly as possible, and on rolling out electricity charging points to ensure the existing points are working and not broken down, and that they become more readily available throughout the UK?
Greg Clark
We are gaining international respect and attention, including from some of companies that have been mentioned, for our commitment to research and development of battery storage. That is why, through our industrial strategy, the Faraday challenge to make us the best in the world in battery storage is so important. The hon. Gentleman is absolutely right to mention charging points. We want to make it possible for people to plug in and charge their cars. We have over 11,000 publicly accessible charge points. That is the largest network in Europe, and we want to expand it further.
Maria Eagle (Garston and Halewood) (Lab)
8. What steps he is taking to ensure the security of the UK’s energy supply after the UK leaves the EU.
Jo Swinson (East Dunbartonshire) (LD)
9. What steps he is taking to encourage long-term decision-making in corporate governance.
The Secretary of State for Business, Energy and Industrial Strategy (Greg Clark)
One of Britain’s greatest assets in competing in the global economy is our reputation for being a dependable place in which to do business. In our response to the recent Green Paper on corporate governance, we set out plans to build on those strengths through greater transparency and accountability to shareholders, employees and suppliers, and others with an interest in the long-term success of companies.
Jo Swinson
A myopic focus on short-term profit and share price in many British boardrooms damages the UK economy, leading to chronically low rates of business investment and the treatment of workers as units of production rather than human beings. Some respondents to the Green Paper suggested that long-term investors should be rewarded with stronger shareholder voting rights. Can the Secretary of State explain why the Government rejected that interesting proposal?
Greg Clark
We consulted widely on the Green Paper, and the set of reforms that we are making has enjoyed broad support. We are proposing to extend the holding periods for long-term share incentives from three years to five years. I think the hon. Lady played some part in the introduction of the three-year periods, and I hope that she will welcome the extension. We are also making it a more explicit requirement of boards, including boards of directors, to reflect in their reports and accounts what they are doing for a wider range of stakeholders, not just the short-term issues. I hope the hon. Lady will welcome that as well.
Mr Gavin Shuker (Luton South) (Lab/Co-op)
11. To ask the Secretary of State what assessment he has made of the capacity of the industrial strategy challenge fund to increase economic growth.
The Secretary of State for Business, Energy and Industrial Strategy (Greg Clark)
The industrial strategy challenge fund will help to drive growth in all parts of the country by using research and development to position us well in global markets where Britain has particular strengths.
Greg Clark
Our exchanges this morning show the potential and the strengths that we have in successful sectors such as the automotive, healthcare and medicine, and satellite and space sectors, in which we are creating very good jobs. However, my ambition and my Department’s ambition—which I hope the hon. Gentleman shares—is to increase the proportion of women and other groups who are under-represented in those industries, because there is talent there that we should be using, and part of our drive is to get the best talent into those world-beating industries.
Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)
A recent report produced by Sheffield Hallam University found that the challenge fund had too narrow a sectoral focus, which was disproportionately benefiting areas in the south-east at the expense of traditional manufacturing areas in, for instance, the west midlands. What elements of the fund will benefit areas such as mine?
Greg Clark
I have not seen the report. I will look at it, but I think it is mistaken. The challenge fund includes, for example, the Faraday challenge, which I launched at the University of Birmingham along with many industrialists and academics from across the west midlands. It is proposed that the west midlands should be at the heart of the challenge. Investment in driverless cars, and in satellites and space, is taking place throughout the country. One of the big features of the challenge fund is that it reaches every part of the country, and, indeed, every part of the United Kingdom.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
With Brexit uncertainty mounting, inflation rising, growth faltering, business confidence at a six-year low, and the euro at a record high—[Interruption.] I am sorry, but that is the truth. Our economy therefore needs action from this Government, but instead it is groundhog day, with the same money announced over and over again, which makes it back to the future for our regions, with, as my hon. Friend the Member for West Bromwich West (Mr Bailey) indicated, the challenge fund money being shown by Sheffield Hallam research to impact only 1% of the economy, overwhelmingly in the south-east. So will the Secretary of State stop prevaricating, do the right thing and tell us right now what level of regional growth he expects the challenge fund to deliver? Or does he not even know what success looks like any longer?
Greg Clark
Talking of groundhog day, the hon. Lady talks complete nonsense. The industrial strategy challenge fund and the industrial strategy Green Paper have been widely welcomed in all parts of the country. After our exchanges, I will send the hon. Lady the support it has had from the north-east of England, of which she should be aware. This is something that has long been called for. I have listed the sectors that will benefit. As we are talking about manufacturing, in terms of her reflections on the state of confidence in the economy, the hon. Lady should know that the EEF last week reported record orders, record export orders, record employment and record investment intention. She should welcome that.
Ms Marie Rimmer (St Helens South and Whiston) (Lab)
12. To ask the Secretary of State what steps his Department is taking to support small and medium-sized enterprises.
Dr Philippa Whitford (Central Ayrshire) (SNP)
13. What plans he has to ensure that the industrial strategy is effectively implemented in rural areas.
The Secretary of State for Business, Energy and Industrial Strategy (Greg Clark)
Some of the biggest economic opportunities are in the rural parts of the United Kingdom, and I welcome the contribution of many rural representative groups to the development of our industrial strategy, including several organisations in Ayrshire.
Dr Whitford
Ayrshire has enormous industrial potential, including as a possible site for the medical manufacturing innovation centre and, of course, for the UK’s first spaceport, but for it to succeed and for local people to benefit and access those jobs we require wider infrastructure development. Ayrshire is not covered by a city deal, so will the Secretary of State speak to the Chancellor and back a full Ayrshire growth deal?
Greg Clark
The hon. Lady knows that I have great enthusiasm for a deal in Ayrshire, and conversations around that are ongoing. I am sure that she will welcome the progress being made on the spaceport, which is important for Prestwick, and the £3.5 million support for the Halo project at the old Johnnie Walker bottling plant in Kilmarnock. A lot is being done in Ayrshire, but I would like that progress to continue.
Jo Churchill (Bury St Edmunds) (Con)
Has the Secretary of State considered rural enterprise zones? Small, targeted areas within small rural communities would help to drive business in those environments.
Greg Clark
My hon. Friend makes an excellent suggestion. There are particular opportunities for start-ups and smaller businesses to locate in rural areas, where premises may be more available than in towns. Clustering them together so that they can support each other is an excellent suggestion and I will take it forward.
Nigel Mills (Amber Valley) (Con)
15. What steps his Department is taking to increase transparency in the property market.
John Penrose (Weston-super-Mare) (Con)
17. Whether Ofgem is able to implement a domestic energy price cap within its present powers.
The Secretary of State for Business, Energy and Industrial Strategy (Greg Clark)
Ofgem has extensive powers that would allow it to establish a cap on household energy prices that cause consumer detriment. The Competition and Markets Authority identified a consumer detriment averaging £1.4 billion a year, which I expect Ofgem to take measures to eradicate.
John Penrose
I thank the Secretary of State for that clarification. Is it not pathetic of Ofgem to ask the Government to pass a law ordering it to impose an energy price cap when, as he says, it has the legal powers to do that already? Does that not show that Ofgem is miserably failing to stick up for energy customers? Will he therefore push Ofgem to grow a spine and introduce a cap without delay?
Greg Clark
Ofgem has yet to respond to my request. I have the power to oblige Ofgem to put a cap in place. Doing that would seem excessive, and it would require primary legislation. Ofgem has those powers, so there is no need for that. That is why, faced with this huge detriment of £1.4 billion on average, I believe it is essential that Ofgem uses the powers that Parliament has given it to eradicate the detriment.
Caroline Flint (Don Valley) (Lab)
T1. If he will make a statement on his departmental responsibilities.
The Secretary of State for Business, Energy and Industrial Strategy (Greg Clark)
Over the last few weeks we have made significant progress across a number of the Department’s responsibilities. We have been discussing the first sector deal, which will involve the Government working alongside life sciences businesses to capitalise on our expert science and research base to make that industry even more competitive. Our reforms of corporate governance, which will ensure that businesses publish pay ratios between chief executives and staff, will help to maintain the UK’s reputation as a confident place in which to do business. We continue to invest in innovation throughout the country through the industrial strategy. In July, I announced the Faraday challenge, a £0.25 billion investment in battery technology in all parts of the country that will boost both research and development and job creation in the industry.
Caroline Flint
The Secretary of State knows that the concern for Ofgem, even though it has the power, is that energy companies would appeal to the CMA and frustrate the process. What he has not acknowledged today is that, under section 26 of the Energy Act 2010, he already has the power to introduce a price cap if one group of customers is treated less favourably than other customers by an energy supplier. Why does he not seek measures to introduce the power he already has?
Greg Clark
Ofgem is the regulator, and it had a report from the Competition and Markets Authority saying that consumers are being ripped off to the tune of £1.4 billion a year. We have a regulator with powers given by Parliament, and those powers should be used. That is the challenge for Ofgem. I would be very surprised and very disappointed if any of the big six, knowing the objectivity of the CMA report, were to protest and appeal against such a determination.
Kevin Hollinrake (Thirsk and Malton) (Con)
T2. I know the ministerial team has been working hard on this, but the issue with sleep-in shifts, if it is not resolved, is that charities will have to close their doors and the people they support, including those with learning disabilities, will be left without care. Will the Minister update us on the progress on quantifying the back-pay liabilities of those charities and on when an appropriate solution will be delivered?
Rebecca Long Bailey (Salford and Eccles) (Lab)
On 27 June, the Secretary of State failed to confirm to me that he would legislate for a price cap to deliver to 17 million customers the £100 saving promised by the Prime Minister if Ofgem did not propose such a cap. On 3 July, Ofgem announced its plans, which fall short of the Prime Minister’s promise, and later stated that a cap is really a matter for Government legislation. I ask again, will the Government now legislate for a price cap to deliver the Prime Minister’s promise?
Greg Clark
The hon. Lady is misinformed; Ofgem has not responded formally to my request, and it should act on the evidence presented to it, using its powers. The ball is in its court, and I expect Ofgem to do its job and stand up for consumers.
Rebecca Long Bailey
I am saddened that the Secretary of State is non-committal, because at the same time as we have rising prices, power distributors recently made an average yearly post-tax profit of 32%, paying out share dividends of £5.1 billion. For water, the situation is even worse, as over the past decade companies have made £18.8 billion in profits, paying out £18.1 billion of that as dividends, with Macquarie paying £1.6 billion in dividends alone, while Thames Water incurred £10.6 billion of debt, ran up a £260 million pensions deficit and paid no UK corporation tax. So I ask him: what are the Government’s plans to reform our broken utilities markets?
Greg Clark
On the specific point of retail energy markets, a two-year investigation has been carried out by the CMA, and it is now for Ofgem to respond. I hope it will respond and eradicate that deficit; that is the test that Ofgem faces. We have made it clear that we will rule nothing out if it falls short, but I do not want to remove the obligation on it to respond in that way. I hope that the hon. Lady will welcome our intention to publish a consumer Green Paper and that she will contribute to it. This will look across the board—across other utilities as well—to see whether the existing regulatory arrangements are sufficient.
Jo Churchill (Bury St Edmunds) (Con)
T3. The life sciences industry is worth £64 billion to the UK, and Sir John Bell’s report last week indicated how important manufacturing was. Will the Minister therefore join me in welcoming the opening of the cell and gene manufacturing unit and welcome further jobs in this industry in the east of England, particularly in my constituency?
Jessica Morden (Newport East) (Lab)
T5. This week’s electricity grid connection deal would make the Cardiff tidal lagoon the UK’s largest renewable energy project, generating some of the cheapest power in the country, and it would be a big boost to Newport, but its potential can be realised only with the Government first backing the pilot project in Swansea bay. When will that happen?
Greg Clark
I do understand the great interest in this matter. As the House knows, I am enthusiastic about renewable technologies, but we have an important responsibility to make sure that they proceed at a price that is reasonable for consumers, who pay through their bills. That is being assessed and I will report to the House when that assessment is finished.
Bill Grant (Ayr, Carrick and Cumnock) (Con)
T4. Although wind turbines play an important part in the nation’s energy mix, it is alleged that the quality of life and health of some rural residents is adversely affected by noise emissions. Are the current noise limits and recording methodologies sufficient—I am referring to low-frequency noise and infrasound—or should the methodologies be reviewed?
Greg Clark
I am aware of the issue and the representations being made on it. I am happy to meet the hon. Gentleman to explore what steps might be available, but he will be aware that pensions are, correctly, run at arm’s length from the Government, through an independent regulator and through the trustees, and so the Government’s ability to determine these things is very limited.
Sir Edward Leigh (Gainsborough) (Con)
T6. Trading on the world’s markets as a free trade nation after 2019 will be a bit like swimming in the Serpentine on a winter’s morning: bracing and invigorating but a bit heart-stopping if one is not prepared. Will my right hon. Friend the Secretary of State explain how he is gearing up his entire Department to ensure that British industry no longer debates the rights or wrongs of staying in the EU or the single market but is fully prepared, and up-to-scratch with conferences, seminars and all the rest, to trade on the world’s markets?
Greg Clark
My hon. Friend will be aware that my whole departmental team are very active, both in this country and overseas, in setting out the huge opportunities to build on this country’s strengths and be economically successful post-Brexit. I know that that work enjoys his full support.
Catherine McKinnell (Newcastle upon Tyne North) (Lab)
The growth of new and renewable technologies presents a huge opportunity for the north-east economy but, given the continued uncertainty about the clean growth plan and our membership of and access to the single market, what are the Government doing to encourage business investment in this area?
Stephen Hammond (Wimbledon) (Con)
T8. Now that it is autumn, many of our constituents are concerned about the cost of fuel and energy this winter. What can the Secretary of State say to reassure all our constituents that fuel and energy will be accessible for all this winter?
Greg Clark
We still have in this country some of the lower energy prices in Europe, but the major energy companies’ increases for those on the standard variable tariffs are clearly unacceptable. The issue has been identified by Ofgem, which needs to take action to correct it.
Peter Kyle (Hove) (Lab)
Since the launch of the much heralded productivity plan 18 months ago, productivity has plummeted to pre-crash levels. Will the Secretary of State tell us which one part of that productivity plan he feels is responsible for the cataclysmic productivity figures we have today?
Greg Clark
The hon. Gentleman is an intelligent fellow and knows that the route to building productivity in this country is to look to the long term to establish, in a serious way, a shared analysis and determination about what is to be done. On skills, for example, I hope he will share our view that by investing in technical education through the new T-levels and extending the hours for which people are educated, we are taking a step towards addressing what is a generational challenge for the UK economy.
Vicky Ford (Chelmsford) (Con)
More than eight out of 10 British manufacturers export elsewhere in the EU and tariffs or customs delays could have a negative impact. Will the Secretary of State confirm that the Government will seek to negotiate transitional relationships that maintain the economic benefits of the single market and customs union until a new relationship with the EU can be implemented?
Greg Clark
It is completely understood that a cliff edge would be bad for business. Companies need to have the confidence to be able to make investment decisions over the next few months and years. That acceptance across Government is welcomed by business.
Corporate Governance Reform Green Paper
Greg Clark Excerpts(6 years, 8 months ago)
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The Secretary of State for Business, Energy and Industrial Strategy (Greg Clark)
One of the UK’s biggest assets in competing in the global economy is its reputation for being a dependable and confident place in which to do business. This has been maintained by keeping the corporate governance framework up to date.
The Government published the Green Paper on corporate governance reform last November. It focused on three specific aspects of corporate governance where the Government saw particular scope to strengthen the current framework—executive pay, corporate governance in large privately held businesses, and the steps that company boards take to engage and listen to employees, suppliers and other groups with an interest in corporate performance.
The Green Paper attracted 375 responses from a wide cross-section of business and society and have provided Government with a solid basis on which to take decisions. It has also benefited from the work of the Business, Energy and Industrial Strategy Committee which published recommendations for corporate governance reform in April.
Three key themes emerged from responses to the consultation.
First, in relation to executive pay, there were widely held concerns that a small minority of companies are not responding adequately when they encounter significant shareholder opposition to levels of executive pay and that remuneration committees need to do more to demonstrate that they are sensitive to pay and conditions across the wider workforce.
Second, a widely held view that large companies could do more to strengthen the employee, customer, supplier and wider stakeholder voice at boardroom level as a key factor in improving boardroom decision-making, delivering more sustainable business performance and building wider public confidence in the way businesses are run.
Third, there was a widely held view that there should be more transparency and accountability for corporate governance in large privately held businesses, reflecting their economic and social significance.
The Government have now published their response to the consultation setting out the proposals that they now intend to take forward to address these and other corporate governance issues. They involve a combination of secondary legislation, enhancements to the UK corporate governance code (which is overseen by the Financial Reporting Council) and voluntary, business-led action.
The Government intend to introduce secondary legislation to:
Require quoted companies to report annually the ratio of chief executive total remuneration to the average pay of the company’s UK employees, and to set out more clearly in remuneration policies the impact of share price growth on long-term executive pay outcomes;
Require all companies of significant size to explain how their directors comply with their requirements under Section 172 of the Companies Act 2006 to have regard to employee and other interests;
Require the UK’s largest companies, including privately-held businesses, to disclose their corporate governance arrangements, including whether they follow any formal code, except where they are already subject to an equivalent reporting requirement.
The Government have also invited the Financial Reporting Council (FRC), as part of their consultation on a revised UK corporate governance code later this year, to consider a number of new provisions including:
Giving company remuneration committees a broader responsibility for overseeing pay and incentives across the company and explaining how these relate to executive pay incentives;
Requiring companies to be more specific about the steps they should take to address significant shareholder dissent on executive pay (and other matters);
Requiring companies, on a comply or explain basis, to adopt one of three employee engagement mechanisms: a designated non-executive director, an employee advisory council or a director from the workforce.
The Government have asked business and professional bodies to take forward related business-led initiatives, including:
Inviting the CBI, the Institute of Directors, the British Venture Capital Association and the Institute of Family Businesses to work with the FRC to develop a voluntary set of corporate governance principles for large, privately held businesses; and
Asking the Investment Association to implement its proposal to establish and maintain a public register of companies receiving significant shareholder votes against resolutions, including on executive pay.
In addition, the Government have asked the FRC, the Financial Conduct Authority and the Insolvency Service to conclude new or, in some cases, revised letters of understanding with each other before the end of this year to ensure the most effective use of their existing powers to sanction directors and ensure the integrity of corporate governance reporting. The Government will consider, in the light of this work, whether further action is required.
Implementation of these measures will improve shareholder scrutiny of executive remuneration, strengthen the employee voice in board-rooms and build confidence in the way companies, both listed and privates are run. They will build on the UK’s corporate governance strengths and help ensure that we are equipped for the economic opportunities and challenges that lie ahead.
The Government’s full response to the Green Paper consultation is available on the gov.uk website and copies have been placed in the Library of the House.
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Energy Price Cap
Greg Clark Excerpts(6 years, 10 months ago)
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Urgent Questions are proposed each morning by backbench MPs, and up to two may be selected each day by the Speaker. Chosen Urgent Questions are announced 30 minutes before Parliament sits each day.
Each Urgent Question requires a Government Minister to give a response on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
Dr Alan Whitehead (Southampton, Test) (Lab)
(Urgent Question): To ask the Secretary of State for Business, Energy and Industrial Strategy if he will make a statement on the Government’s intention for an energy price cap.
The Secretary of State for Business, Energy and Industrial Strategy (Greg Clark)
Following a two-year inquiry, the Competition and Markets Authority found that energy customers on standard variable tariffs were paying on average £1.4 billion a year more than would be the case in a competitive market. That is completely unacceptable, so my party’s manifesto committed to introduce a safeguard tariff to extend the price protection currently in place for some vulnerable customers—those on pre-payment meters—to more customers on the poorest-value tariffs. The energy regulator, Ofgem, has the powers necessary to impose such a price cap without delay, and I wrote to its chief executive on 21 June to ask it to use its powers to do so. Today, the regulator has replied and announced that it will work with consumer groups to take measures, including extending the current safeguard tariff for those on pre-payment meters to a wider group of consumers, and move urgently to implement these changes.
I welcome this initial proposal—it is a step in the right direction—but I will wait to see the actual proposals turned into action to cut bills, as the test of whether the regulator’s changes go far enough is whether they move sufficiently to eradicate the detriment to consumers that the CMA identified. I remain prepared to legislate if they do not, and I hope that such legislation would command wide support across the House.
Dr Whitehead
I thank the Minister for his response. Does he recall that during the election his party placed the promise of an overall cap on energy prices at the centre of its manifesto? Indeed, does he recall the Prime Minister stating:
“I am making this promise: if I am re-elected on 8 June, I will take action to end this injustice by introducing a cap on unfair energy price rises. It will protect around 17 million families on standard variable tariffs from being exploited with sudden and unjustified increases in bills”?
Does the Secretary of State accept that Ofgem’s response to his letter of 21 June on energy prices falls far short of implementing that promise and that, although there are welcome suggestions on safeguarding tariffs and capping warrant charges for the installation of pre-pay meters, those measures would affect only 2.5 million customers, leaving more than 14 million SVT customers completely unprotected from price rises over the next period? Will he confirm that his letter did not ask Ofgem to consider introducing a general price cap? Will he tell the House why it did not, even though the chief executive officer of Ofgem confirmed earlier this year that it would have the discretionary power to implement an energy price cap?
Does the Secretary of State intend to pass legislation to require Ofgem to introduce a price cap, or is he now content to let his firm election promise of a cap fall by the wayside? If so, what does he have to say to the 17 million people on standard variable tariffs who thought that relief from rip-off price rises was on its way but will now feel completely betrayed by this policy U-turn?
Greg Clark
I am grateful to the hon. Gentleman for his questions. I hope he will see that I answered many of his points in my initial response to the urgent question. He will share my view—indeed, I think it is his view, too—that we should act as soon as possible to provide relief to consumers. That will require Ofgem to use its powers. It has powers that it can use immediately, and I have encouraged it to do so.
The hon. Gentleman mentioned my letter. I am sure that, as he was hoping to come into government, he studied the prospective use of the powers, so he will know that legislation requires me to ask Ofgem for advice. I did so under exactly those terms and Ofgem has responded by saying that it will work with consumer groups to identify how far the protection should go. I have been clear that I want the detriment of £1.4 billion a year to be eradicated. It is a test of Ofgem’s responsiveness that it should use its powers to that end. The constituents of Government and Opposition Members will look to the regulator to make use of its powers to prevent the continuation of such an unacceptable situation, which involves more than £1 billion a year.
John Penrose (Weston-super-Mare) (Con)
To build on my right hon. Friend’s most recent answer, some 17 million families are being ripped off by expensive standard variable tariff deals. Ofgem’s proposals will deal with at most 3 million of them, leaving 14 million still being preyed on by the big six energy firms. Does my right hon. Friend agree that Ofgem’s proposals will be viewed as a great betrayal of those 14 million households? If we are going to create an economy that works for everyone, will he distance himself from this big six stitch-up and pledge to help the millions of households that Ofgem seems set to ignore?
Greg Clark
My hon. Friend has done great work with many Members from various parties to establish that there is an appetite and need to tackle the problem exposed by the CMA, which has been going on for too long. In response to my letter, Ofgem has said today that it will work with consumer groups and come forward with a range of responses. I will look at them closely, as I know my hon. Friend will, and I am sure that the Business, Energy and Industrial Strategy Committee will, too. I have said clearly that the test of the adequacy of the responses is that they address the clear detriment that the authorities have identified.
Alan Brown (Kilmarnock and Loudoun) (SNP)
The UK Government really lack strategy right across the energy sector. The £20 billion Hinkley Point C project will add to future household bills, mention of energy was sadly lacking in the Green Paper that was published before the election, and now there is this lack of a joined-up approach to an energy cap. Will the Secretary of State confirm the Government’s plans to protect the 14 million people who will not be covered by the current proposals? Of the £1.4 billion that the CMA has said is going to the big companies instead of staying in consumers’ pockets, how much will be returned to consumers under the measures that are being introduced? He said that he might consider legislation, but what is his timescale for reviewing what is happening and deciding whether there is a need to act? Will he ask Ofgem to determine what the true level of a cap should be?
Greg Clark
The hon. Gentleman talks about energy strategy, and it is right that the Government have taken a decision—this was ducked by previous Governments for decades—to renew our nuclear power stations that are coming to the end of their lives. He will know that the SNP Government in Scotland agreed to extend the lives of nuclear power stations there, and he will also know about the impact of our success on renewable energy, specifically offshore wind, in Scotland. I have had fruitful discussions with colleagues throughout Scotland, especially in the remote islands, about the future possibilities for that.
On Ofgem’s response to my letter, I have set out clearly that it has said it will work with and consult consumer groups, and come up with a range of options. The £1.4 billion detriment has to be eradicated, and that is the test of whether the proposals are acceptable. I am sure that the House wants to scrutinise them as much as I do.
John Redwood (Wokingham) (Con)
My right hon. Friend inherited a system that relies increasingly on dear energy, which drives up household bills. Is there anything that he can do to bring a greater amount of cheaper energy into the mix so that bills reduce in five or 10 years’ time?
Greg Clark
My right hon. Friend makes an excellent point. We need to ensure that we meet our important climate change commitments at a competitive cost—for consumers and for businesses—and that we obtain the industrial benefits from having a supply chain in this country. That is exactly why we devote a chapter of the industrial strategy Green Paper to future plans to make the most of the clean energy transition in all respects.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
Having seen the recent report, surely it is safe to say that wind and solar will be the future for low-cost energy, but there was a Duke Ellington song called “How long has this been going on?” The fact is that this has been going on too long—this exploitation of people who cannot avoid paying above the price. Is it not about time that we moved away from botched privatisation and inadequate regulation to an answer that puts money back in people’s pockets, rather than taking it out?
Greg Clark
In response to the first part of the hon. Gentleman’s question, I welcome, as he does, the huge progress that has been made not just in the deployment of renewables, but in the cost reductions that we have seen. That process has created jobs across the UK, especially in coastal towns. I had the pleasure of opening the Siemens wind blade factory in Hull, which created 1,000 good jobs. However, he is right that the detriment has been going on too long, which was why the Government asked the CMA to investigate the industry root and branch. It has identified £1.4 billion of detriment, and I have made it absolutely clear that that detriment needs to be returned to the pockets of consumers.
Mrs Anne Main (St Albans) (Con)
May I tell the Secretary of State that the latest data show that 2,687 households in my constituency are estimated to be in fuel poverty? That is 6.6% of all households. What more can be done to identify these vulnerable groups and ensure that they have the best advice and information about switching tariffs? The suggestion that people search online is not the way forward. Perhaps it would be more helpful to have a better dialogue between the consumer and the energy provider.
Greg Clark
I agree with my hon. Friend. One feature of the energy market is that the poorer someone is, the larger the proportion of their income that they spend on energy. That is why it is imperative that vulnerable consumers should not be required go on the internet every few months to check that their tariff has not defaulted to a much higher one. That was the reason for my letter to Ofgem, and it is why I want its response to be vigorous. My hon. Friend is absolutely right that an aspect of the wider set of policies is to make it easier for consumers to know the price of energy and how much they consume, and smart meters are being introduced to help more people to do that.
Sir Edward Davey (Kingston and Surbiton) (LD)
Has the Secretary of State seen the analysis and evidence of former independent energy regulators who say that the consumer detriment pointed to by the CMA in this market was based on seriously flawed methodology? If he has not, will he look at that and report back to the House?
Greg Clark
I have seen that. This two-year inquiry conducted by the CMA identified £1.4 billion of detriment, which is a huge amount of money. When our constituents see the difference—it can be up to £100 a year—that they pay for a dual fuel bill by being on a dual fuel tariff, they know that that is significant amount.
The CMA said that suppliers have “unilateral market power” over their inactive customer base and could exploit their position by pricing their SVTs above a level that could be justified. That cannot go on.
Stephen Kerr (Stirling) (Con)
Does my right hon. Friend agree that it will take more than easier switching to encourage a fairer energy market in this country?
Greg Clark
A response is required from the regulator; this is a regulated industry. The development of modern markets means that it is possible for suppliers, especially dominant ones, to identify the customers who are the least likely to switch. As my hon. Friend the Member for St Albans (Mrs Main) said, they are often among the most vulnerable. It is unacceptable to use that information to sting them, and regulation has to catch up with that.
Mr Speaker
I think it is time that we heard again from the good doctor—Dr David Drew.
Greg Clark
We are seeing a big increase in the deployment of renewables as the price comes down, as the hon. Member for Huddersfield (Mr Sheerman) said. The effect of the overcharging—the abuse—is not a return to consumers, and this is not about the increased deployment of renewables. In the analysis of the CMA, the practice results in profits that are higher than they would be in a competitive market and relative inefficiency on the part of the suppliers. Consumers should not be paying for either of those.
Robert Halfon (Harlow) (Con)
Many energy consumers, particularly those on low incomes, do not pay their energy bills by direct debit, but they get huge increased charges from many of the energy companies when they do pay, even when they do so on time. Will my right hon. Friend look into this and make sure that people who do not pay their energy bills by direct debit get a fair energy bill?
Greg Clark
My right hon. Friend makes an excellent point. As I said, the poorest 10% of households spend 10% of their household expenditure on energy, whereas the richest 10% spend 3% of theirs on it. We need to look particularly at the conditions of more vulnerable consumers to ensure that they are not disadvantaged. My right hon. Friend mentioned one of the ways in which they are.
Matt Western (Warwick and Leamington) (Lab)
Are we not tinkering at the edges and doing a little bit of window dressing? I think that we all agree that the energy market appears to be dysfunctional. We saw that best at the beginning of this year when there was an increase in tariffs across the board that bore no relation to wholesale prices, but had everything to do with the exchange rate, particularly that with the euro, as most of our domestic companies are actually based in France or Germany. The big six are essentially operating as a cartel, not in the interests of the consumer.
Greg Clark
I am not sure that I would give them the excuse of exchange rate movements. The Competition and Markets Authority has said that suppliers have unilateral market power over this part of their customer base. This is a regulated market. Ofgem has the powers to introduce and extend the price gap, and my view is that it should use those powers now.
Wendy Morton (Aldridge-Brownhills) (Con)
Going back to switching, does the Secretary of State think that more needs to be done to make it much easier to switch, particularly for our more vulnerable constituents?
Greg Clark
I agree with my hon. Friend. While there should certainly not be barriers in the way, it also should not be necessary for people to spend every evening on the internet checking whether their bill has gone up by an outrageous margin. If people are loyal to a brand, it is not unreasonable for them to expect to be treated reasonably, especially as that brand may be a trusted brand. The regulator should enforce that.
Jonathan Edwards (Carmarthen East and Dinefwr) (PC)
We produce far more electricity in Wales than we use, yet we pay the highest electricity prices in the British state. More than a third of our households are in fuel poverty. Does that not suggest that Westminster control over Welsh energy policy is not working?
Greg Clark
No, it is one of the reasons why this investigation was commissioned and why what I have asked Ofgem to consider and enact will be particularly important to the hon. Gentleman’s constituents in Wales.
Rachel Maclean (Redditch) (Con)
Will my right hon. Friend join me in welcoming Ofgem’s proposal to consult on more measures to help microbusinesses?
Greg Clark
I do welcome that. We have talked about household consumers, and for many very small businesses, their energy bill is also an important component of their costs. In my request for advice, which it was technically necessary to make to Ofgem, I asked for that advice to apply to microbusinesses as well.
Diana Johnson (Kingston upon Hull North) (Lab)
The usual vested interests—the big six—were on the airwaves this morning advising consumers to switch their energy supplier, but if consumers really want to see a change to this rip-off of energy prices, do they not have to switch Governments?
Greg Clark
No, it was this Government who referred the whole industry to the Competition and Markets Authority. When the right hon. Member for Doncaster North (Edward Miliband) was Energy Secretary, I urged this measure on him, and he rejected it flat, so it is this Government who have exposed the level of the detriment, and it is this Government who are acting to put a cap in place to prevent this abuse—that did not happen under Labour.
James Heappey (Wells) (Con)
As welcome as a price cap will undoubtedly be, does the Secretary of State agree that the real key to bringing down prices for consumers is the liberalisation of the energy market through the digitisation of the energy system, storage in front of and behind the meter, and a demand-side response?
Greg Clark
My hon. Friend, who is well informed about such issues, is absolutely right. The opportunity that smart meters bring is that people can have much more knowledge and control of their energy use, and use that to get the best deals available. That is why the roll-out of smart meters is such an important part of our reforms to the energy market.
Ian C. Lucas (Wrexham) (Lab)
But does the outcome of the CMA inquiry not tell the Secretary of State, as a reasonable man, that this is the end of the road for the system? Privatisation did not work, the regulatory system has not worked, and we have had to have a CMA inquiry. What is needed is a fundamental reappraisal and change of this whole energy edifice?
Greg Clark
I am surprised to hear implicit support from the hon. Gentleman for the programme of nationalisation of this sector that the Labour party stood on. The billions of pounds that that would cost would not be the most important use of funds. This has been a regulated industry since privatisation many years ago, and the regulation needs to function better than it has.
Sir Oliver Letwin (West Dorset) (Con)
I have been listening carefully to my right hon. Friend’s answers. Am I right to understand that he would not be satisfied with a final solution from Ofgem that continued to cross-subsidise some customers out of a kind of loyalty premium paid by those who, even if not vulnerable, did not switch?
Greg Clark
This is a wake-up call for the industry. A model in which consumers who are known not to switch can be milked to pay a subsidy for other consumers in an unfair way—the CMA identified “unilateral market power”, which enables firms to exploit their position—has to come to an end.
Mike Wood (Dudley South) (Con)
While I welcome proposals to make it easier to switch away from poor deals, does my right hon. Friend agree that Ofgem needs to go much further than it suggested in its letter to him this morning to protect consumers from exploitation?
Greg Clark
There is a clear expectation that I want the detriment that the CMA has identified to be tackled once and for all. Ofgem has said that it will consult consumer groups, and I hope and expect that those consumer groups will share my hon. Friend’s analysis.
Giles Watling (Clacton) (Con)
Will my right hon. Friend join me in welcoming Ofgem’s acknowledgment regarding the ability to put a cap in place? Should we not urge it to use the power fully?
Greg Clark
My hon. Friend is right, and the proposal to consult consumer groups and to go beyond the CMA’s remedies—at least what the majority report of the CMA recommended—is welcome. As I said, that is a step in the right direction, but I would want to see this put out in detail and implemented before I would be satisfied with it.
Tom Pursglove (Corby) (Con)
Speaking as someone who represents an industrial town, has my right hon. Friend, as part of the wider debate on these issues, had the opportunity to assess what impact nationalising the energy companies would have on household and commercial energy bills?
Greg Clark
I have indeed. The impact of finding the billions of pounds necessary to take these industries into public ownership would not only be a disaster for our public finances, but the destruction of investor confidence in a whole range of industries that we need investment in.
Julian Knight
I was a BBC News consumer affairs reporter for five years, and during that time I saw the havoc that can be wrought by pre-payment metering. Does my right hon. Friend agree that practices such as rip-off emergency credit, which makes a payday loan look reasonable, need to be brought to heel, and that we should welcome Ofgem’s proposal to extend the current safeguard tariff for consumers on pre-payment meters?
Greg Clark
It can only be a matter of time before my hon. Friend enjoys the position to which you referred, Mr Speaker.
My hon. Friend is absolutely right. It has been the practice of this Government to intervene when there are abuses, especially of vulnerable people in the way in which he describes. That has happened with pre-payment meters, but the approach needs to go much further.
Mr Speaker
We are most grateful to the Secretary of State and to colleagues.
Oral Answers to Questions
Greg Clark Excerpts(6 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Jo Churchill (Bury St Edmunds) (Con)
2. What steps he has taken to consult businesses on the process of the UK leaving the EU.
The Secretary of State for Business, Energy and Industrial Strategy (Greg Clark)
Since the referendum, I have held discussions with businesses, workers and local leaders across the UK, and investors all around the world. These will continue over the coming months, including my weekly meetings with the directors general of the five main business organisations. The Government are creating a new EU exit business advisory group to ensure that business is not only heard but is influential throughout the negotiations.
Jo Churchill
My particular interest is in the UK’s life science sector, which is worth some £30 billion to the economy and involves nearly half a million jobs, many of which are in my constituency of Bury St Edmunds. Will the Secretary of State tell me how he will ensure that there is continued support to this vital leading research and science sector as we leave the EU?
Greg Clark
I will indeed. My hon. Friend is a great champion of the sector. In our negotiations, we want to ensure that we can continue these successful collaborations, as well as making further investment in the future of research through our industrial strategy. The House may be interested to know that I can announce today that the Government’s commitment to underwrite the UK’s fair share for the Joint European Torus costs—the leading nuclear fusion facility in Oxfordshire, supporting 1,300 jobs—will be made. The facility is funded through a contract between the European Commission and the UK Atomic Energy Authority. In making this commitment, the Government hope to provide the certainty and reassurance needed for a mutually beneficial extension of the contract.
Mr Ben Bradshaw (Exeter) (Lab)
All the five business organisations to which the Secretary of State refers have come out against the Prime Minister’s extreme and damaging Brexit. What is he personally doing to ensure that the Prime Minister not only hears what they are saying, but listens to it?
Greg Clark
The right hon. Gentleman will know that the five business organisations have put forward a sensible set of principles to govern the transition and the shape of a final agreement. Those suggestions seem very sensible. Part of the point of engaging with business, as I do rigorously and frequently, is to ensure that that voice is heard.
Robert Neill (Bromley and Chislehurst) (Con)
One of the important principles that those business organisations have stressed is the essential nature of having contractual and legal certainty for those who are entering into legal obligations so that they know that that will continue to be enforceable once we leave the EU. Will the Secretary of State therefore ensure that particular regard is had to the need for transition periods to be based on the reality of business practice, rather than on arbitrary considerations?
Greg Clark
My hon. Friend makes an excellent point. If he has the continued privilege to chair the Select Committee on Justice, I am sure that it will provide some help in this.
Rachel Reeves (Leeds West) (Lab)
Many businesses are particularly concerned about additional checks on trade imports and exports if we leave the customs union. Can the Secretary of State give businesses any reassurance at all that there will not be additional checks if and when we leave the customs union?
Greg Clark
I have always been clear, as have the Government, that we want not only no tariffs, but no bureaucratic impediments of the type described by the hon. Lady. That is one of the objectives set out by the business organisations. As she knows, the negotiations have just started, but we are clear that that is our objective.
Mr Jacob Rees-Mogg (North East Somerset) (Con)
Will my right hon. Friend be asking businesses to list the most egregious and restrictive EU directives that may be removed once we leave in order to make British business more competitive and efficient?
Greg Clark
I am sure that my hon. Friend will be an assiduous contributor to the scrutiny of the repeal Bill. The approach is to transfer into UK law that which was part of EU law precisely so that this House can scrutinise and consider what should be continued.
Bill Esterson (Sefton Central) (Lab)
The Government said yesterday that EU citizens will be able to apply for what they called “settled status”, so that they can continue to live and work in the UK. Application processes can be time-consuming, not to mention complicated, expensive and off-putting, especially when this Government are involved. How can the Secretary of State guarantee that all EU nationals working in the UK will be allowed to stay not just in theory but in practice, to the benefit of the many businesses that rely on EU workers?
Greg Clark
I welcome the hon. Gentleman back to his place. In fact, I think that Labour’s whole Front-Bench team has been reappointed. It is nice to see loyalty rewarded. The hon. Gentleman is absolutely right, and I thought that he would welcome the Prime Minister’s very positive statement. It is important that the process is implemented with no bureaucracy so that people can apply with confidence.
Stuart C. McDonald (Cumbernauld, Kilsyth and Kirkintilloch East) (SNP)
3. What his policy is on the non-release or late release of cash retentions in the construction industry.
Liam Byrne (Birmingham, Hodge Hill) (Lab)
14. What steps his Department is taking to foster a positive environment for business growth.
The Secretary of State for Business, Energy and Industrial Strategy (Greg Clark)
The industrial strategy Green Paper was launched on 23 January and has been warmly received across the country. We have received over 1,900 responses to the consultation, with respondents from every part of the United Kingdom. I look forward to taking our modern industrial strategy forward, with the involvement of all Members of this House, in the months ahead.
Gavin Newlands
In a damaging blow to business confidence and the wider economy in Renfrewshire, Chivas Brothers announced that it was moving operations from Paisley in 2019. The workforce have voted to strike over a pay offer that Chivas Brothers itself admits does not meet commitments it made to the workforce. Will the Secretary of State join me in urging Chivas to offer a deal that prevents industrial action and recognises the contribution the Paisley workforce have given to Chivas over many, many years?
Greg Clark
Of course we want to avoid industrial action. I am not aware of the particular circumstances, but I am very happy to meet the hon. Gentleman so he can inform me of them in more detail.
Liam Byrne
Does the Secretary of State agree with the Secretary of State for Defence, who spoke this morning about the need to provide extra investment in those areas that are left behind—even if the bill comes to something like £1.5 billion? When is he going to open talks with other hon. Members about the needs of their areas, so we can ensure that those left-behind regions are not left behind and left out?
Greg Clark
I am very surprised to hear that question from the right hon. Gentleman. Of all the people in this House, he was a great proponent of a city deal and a devolution deal for Birmingham and the west midlands, the value of which is over £1 billion. Looking around the Chamber, there are many Opposition Members who have made precisely such a case that we should invest in areas of the country, outside of national programmes. It seems to me to be reasonable to continue that programme.
Mark Pawsey (Rugby) (Con)
I took soundings from small businesses in Rugby at a small business expo run by the Federation of Small Businesses on Friday. Their single biggest concern related to the recruitment of staff, in that the skills they are looking for often are not available among local jobseekers. Given those instances, will the Secretary of State reassure us about the training of young people and the ability to recruit staff from the EU moving forward?
Greg Clark
I will indeed. One of the big findings, which has been reinforced by the consultation on the industrial strategy, is that we need to ramp up the level of skills and technical education and training in this country. We will respond to the consultation in the weeks ahead, but my hon. Friend can rest assured that that will be one of its key pillars.
Amanda Milling (Cannock Chase) (Con)
The Kingswood Lakeside business park in Cannock is home to many leading businesses, and the new developments there will create hundreds of new jobs. Does my right hon. Friend agree that those developments are evidence of business confidence, and show that Cannock Chase is well and truly open for business and is a great place to do business?
Greg Clark
I do indeed. Having visited Cannock Chase with my hon. Friend, I know that she is a great champion of the businesses there. It is fair to reflect that the confidence of manufacturers and employers in other sectors is high. As the CBI attested this week, it is high across the country, including in Cannock Chase.
Layla Moran (Oxford West and Abingdon) (LD)
8. What discussions he has had with Cabinet colleagues and other key stakeholders on the potential effect of the UK leaving the Euratom treaty on energy suppliers and on the availability of radioisotopes for the NHS.
Chris Ruane (Vale of Clwyd) (Lab)
22. What plans he has to implement an energy price cap.
The Secretary of State for Business, Energy and Industrial Strategy (Greg Clark)
Our manifesto said that
“we will introduce a safeguard tariff cap that will extend the price protection currently in place for some vulnerable customers to more customers on the poorest value tariffs.”
I stand by that commitment.
Emma Hardy
The lived experience of many people in Hull West and Hessle is that the Conservative party has done nothing to fix the energy market for the past seven years. Although I welcome the Government’s move and transformation from calling an energy price cap Marxist and extremely dangerous to copying it, is the Minister facing calls to water down that policy either from the big six or from his own Back Benchers?
Greg Clark
I welcome the hon. Lady to the House; she follows a distinguished predecessor. I would perhaps invite her to reflect on her own party’s history in this matter—the former Leader of the Opposition was the Energy Secretary and failed to do anything whatever about it. I have been clear about the commitment that we have made, and we will see it through.
Chris Ruane
Imitation is the sincerest form of flattery. To misquote Caroline Aherne’s question to Debbie McGee, what first attracted the Secretary of State to Labour’s financially astute, socially just and politically responsible energy price cap?
Greg Clark
I welcome the hon. Gentleman back. What he describes as an energy price cap was launched as an energy price freeze. The problem with that was that as energy prices fell, consumers would be paying more than they needed to. That would have been disastrous for them, which is why the proposal that we have made, in response to the Competition and Markets Authority analysis, is a much more sensible approach than we got from Labour.
Rebecca Long Bailey (Salford and Eccles) (Lab)
As we have heard, various media outlets have reported recently that senior Cabinet members were lobbying for the Conservative price cap manifesto commitment to be dropped. Indeed, the Secretary of State’s recent letter to Ofgem was silent on the price cap element and, when questioned last week, the Prime Minister refused to confirm unambiguously that the price cap would be upheld. Will the Secretary of State confirm for the avoidance of doubt that he will implement the promised price cap, and not just stand by it, to deliver to 17 million customers the £100 saving that his Prime Minister promised?
Greg Clark
I welcome the hon. Lady back. It is very good to see her back in her place. I did not hear her name chanted at Glastonbury and it is probably unparliamentary to do it here, but I warmly welcome her back. I have been very clear and the Queen’s Speech is very clear. It said, in terms:
“My government will ensure fairer markets for consumers, this will include bringing forward measures to help tackle unfair practices in the energy market to…reduce energy bills.”
Rebecca Long Bailey
I am afraid it is not clear. The Secretary of State’s recent letter to Ofgem simply asks it to advise him of the action it intends to take to safeguard customers on the poorest value tariffs. It was not a direction to implement a price cap. Can the Secretary of State confirm that should Ofgem not take directions to implement a price cap, or if it directs a price cap that is narrower than the Conservative manifesto commitment, he will legislate to uphold his party’s manifesto commitment and, if so, when?
Greg Clark
The powers that I have are to ask Ofgem to move in this way, not to order it; Ofgem is independent. As there is a strong body of opinion on both sides of the House that the detriment that consumers have been suffering should be put to an end, I would have thought that the hon. Lady welcomed it being put to an end as soon as possible, rather than waiting for legislation to pass through the House. Ofgem has those powers and I believe it should use them.
Diana Johnson (Kingston upon Hull North) (Lab)
12. What steps his Department is taking to ensure that all regions benefit from the Government’s industrial strategy.
The Secretary of State for Business, Energy and Industrial Strategy (Greg Clark)
The importance of our regions is a core pillar of our industrial strategy. We will build on successful clusters, of which the Humber Energy Estuary is a perfect example, as the hon. Lady knows. The Humber’s leading position in marine engineering has been further strengthened by the opening of factories around the offshore wind industry, including at Siemens, where 1,000 new skilled jobs have been created. This is the industrial strategy in action.
Diana Johnson
Ministers recently blocked Hull’s privately financed initiative to deliver rail electrification all the way to Hull, an important part of our infrastructure that is needed in east Yorkshire. Are people in Hull right to now believe that the £1 billion that was found for the Northern Ireland powerhouse comes at the expense of the northern powerhouse?
Greg Clark
The hon. Lady knows as well as anyone in this House the commitment that this Government, and I in particular, have made to devolving funds to Hull and the Humber. They have benefited considerably, first from a city deal and then from a growth deal. That has contributed to the increased prosperity in her city, which I would have thought she would welcome.
Martin Vickers (Cleethorpes) (Con)
Notwithstanding what my right hon. Friend has just outlined, and despite the fact that business confidence in the region is high, as outlined by the most recent Hull and Humber chamber of commerce’s quarterly report, there are still further initiatives that could be taken to advance the northern powerhouse. What further plans does my right hon. Friend have?
Greg Clark
My hon. Friend is absolutely right. One of the aspects of the progress made around the Humber is the close working relationships that have been established by businesses and council leaders north and south of the Humber with the Government. I look forward to visiting the area again—I am a regular visitor—so that we can have further devolution of funds and powers there.
Rachael Maskell (York Central) (Lab/Co-op)
Over the last seven months nearly 2,500 job losses have been announced in York, including some at Nestlé, as well as the closure of two company head offices. There are clear challenges to York’s economy. Will the Secretary of State agree to meet me, along with his senior officials, so that we can address those serious challenges and ensure that the industrial strategy reaches York as well?
Greg Clark
I should be very happy to do that. Nestlé is, of course, a major employer, and there is a cluster of food and drink and agriculture businesses in and around York. It has been identified in the industrial strategy as an area of real potential, and I look forward to working with the hon. Lady to realise that potential.
Kevin Foster (Torbay) (Con)
As the Secretary of State will know, expanding Torbay’s manufacturing sector is a key part of diversifying our economy for the future, but a lack of skills may hold us back. Will he confirm that the Government are still seeking to deliver institutes of technology throughout the regions in England?
Greg Clark
I will indeed. As I said in an earlier answer, the importance of upgrading our skills education is vital in all parts of the country, including Torbay, and institutes of technology are a way of making sure that industries can benefit from the particular skills that they need.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
Having abolished the regional development agencies, the Conservative party has refused to invest in growth for good jobs across the country. Ours is now the most unequal economy in western Europe. If every region produced at the same rate per head as London, we would all be one third richer, but instead working people have not had a pay rise for seven years. Will the Secretary of State commit himself to matching the specific proposals for investment for jobs that are laid out in Labour’s industrial strategy, or does his new-found largesse end at the shores of Ulster?
Greg Clark
Again, that was a disappointing response. The hon. Lady knows, and the leaders of her local councils know, how important initiatives such as the city deal and the growth deal have been in the north-east. If she looks around the country, she will see that, whereas in past years most jobs were created in London and the south-east, that situation has been transformed, and the north-east of England is one of the areas that have created jobs at a more rapid rate than anywhere else in the country. She should commend that development.
Ruth George (High Peak) (Lab)
13. What the reasons are for the time taken to publish the Government’s carbon reduction plan.
Rachel Reeves (Leeds West) (Lab)
T1. If he will make a statement on his departmental responsibilities.
The Secretary of State for Business, Energy and Industrial Strategy (Greg Clark)
As outlined in the Queen’s Speech, our industrial strategy will drive prosperity across the country, and in the past month we reached an important stage in that process. While we analyse the nearly 2,000 responses, we continue to make decisions that help UK-wide industries. We have announced £1 billion over the next four years for our most innovative industries, such as artificial intelligence, medicine, and autonomous vehicles. We have boosted investment in UK bioscience, such as by providing the University of Edinburgh’s Roslin Institute with some £20 million, which will not only support its research on infectious diseases but create more highly skilled jobs and cement the UK as a world leader in science and innovation.
Rachel Reeves
Energy security is essential for national security and for family finances. The essential Moorside energy project in Cumbria is key to such security, but with Toshiba now predicted to lose £7 billion and the French firm backing the project pulling out will the Secretary of State tell us if and when the project will go ahead and provide the assurances that industry, workers and consumers desperately need?
Greg Clark
We have inaugurated a new era of nuclear power through the approval of Hinkley Point C. The NuGen consortium, the membership of which has changed from time to time, is confident that that investment will be able to proceed.
Alan Mak (Havant) (Con)
T5. I welcome the Government’s commitment in the Queen’s Speech to the new industrial strategy. Will the Secretary of State update the House on his plans to support new, cutting-edge technologies that will help Britain to lead the fourth industrial revolution?
Greg Clark
My hon. Friend was a great champion of the strategy in the previous Parliament, and I hope that he will be here. One of its early fruits is the industrial strategy challenge fund, which is already making resources available for research in healthcare and medicine, artificial intelligence, clean energy, driverless cars, advanced materials, and satellites and space technology. That is exactly in line with what he and his group have been urging.
Kate Hollern (Blackburn) (Lab)
T2. The Conservative manifesto pledged to deliver a country“where wealth and opportunity are spread across every community in the United Kingdom”,and I see that Northern Ireland has just had its share. Will the Secretary of State tell me how the Government’s industrial strategy will bring wealth and opportunity to places such as Blackburn, where the national average wage is far less than it is in Maidenhead, for example? Blackburn has seen too many cuts from this Government and it is time that we had some investment, so how quickly can the strategy be delivered?
Greg Clark
I welcome the hon. Lady to her place. She will discover over time, I hope, that a key part of the industrial strategy is to drive growth in all parts of the country. My Department and I have looked to get funds out of Whitehall and into local places in every part of the country, including £320 million in Lancashire for the funding of the growth deal. She will also be aware that it is necessary to have an economy that is prospering, and one thing that would stand in the way of that is the record peacetime taxation with which the manifesto on which she stood was threatening the country.
Several hon. Members rose—
Luke Graham (Ochil and South Perthshire) (Con)
What assessment has the Secretary of State made of the Government’s industrial strategy for Scotland?
Greg Clark
It has been warmly received in Scotland, and we have had a positive response from businesses there. I had an enjoyable roundtable in Aberdeen, which was described by one local business as a “breath of fresh air.” I look forward to continuing that engagement with everyone in Scotland, and I am sure my hon. Friend will play a big part.
John Spellar (Warley) (Lab)
T7. While other countries, including our EU partners, have over the years used public purchasing to support their own industries, Britain often has not. As Brexit approaches, what are the Government doing to ensure that Government Departments, local services, emergency services, councils and other public bodies back British industry and British jobs by buying British first?
Greg Clark
The right hon. Gentleman will know that we have already changed the procurement guidance so that local value can be taken into account. We have anticipated the issue he mentions and this is being done.
Will Quince (Colchester) (Con)
The Secretary of State is aware that I have long campaigned for parental bereavement leave, and I was delighted to see this policy in not only the Conservative manifesto, but the Labour manifesto. On that basis, will he kindly set out what steps the Government will take to introduce this important benefit?
John Cryer (Leyton and Wanstead) (Lab)
The Secretary of State has talked repeatedly today about the discussions he has had on Brexit. Which trade unions has he met, and when?
Greg Clark
I regularly meet trade unions: I met Frances O’Grady of the TUC last week; I spoke to Roy Rickhuss of the steel union yesterday; and I spoke to Len McCluskey a few weeks ago. My contacts cover both sides of the employer and trade union mix.
Mr Dennis Skinner (Bolsover) (Lab)
I have listened to the questions and answers for the past hour, and I hear about the city deals and all the rest of it, but why does the Secretary of State not answer the specific questions about the trade unions? If he wants to give the impression that he is on the side of working-class people, why do not the Government drop the trade union Bill and all the rest of it?
Greg Clark
I could not have been clearer about the regular discussions I have with trade unionists. My concern, which I hope would be the hon. Gentleman’s concern, is to make sure that in all parts of the United Kingdom we generate the jobs and growth to ensure that all working people have a prosperous future to look forward to. That is the purpose of this Government, in contrast to the manifesto on which he stood.
Joint European Torus Facility: UK Underwrite
Greg Clark Excerpts(6 years, 10 months ago)
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The Secretary of State for Business, Energy and Industrial Strategy (Greg Clark)
Today I have laid before Parliament a departmental minute describing the contingent liability resulting from Her Majesty’s Government’s underwrite of the UK’s fair share of the Joint European Torus (JET) costs.
JET is a world-leading nuclear fusion research facility based in Oxfordshire and supports 1,300 jobs in the UK. JET is funded through a contract between the EU Commission and the UK Atomic Energy Authority. As part of this contract, the EU provides around £60 million of funding per year representing 88% of the JET running costs.
The current JET contract is due to end in December 2018 and the EU Commission is currently considering a potential extension of the JET contract until at least the end of 2020. This extension is crucial to the future of JET, the researchers that work there and to ensuring the UK continues to lead the world in fusion technology and research.
I wrote to the EU Commission on 20 June 2017 confirming that, should the JET contract be extended, the UK would continue to pay its fair share of JET costs. This underwriting of UK JET costs aims to provide the certainty needed to secure the extension of the JET contract and minimise the uncertainty around the future of this world-class facility.
The departmental minute describes the contingent liability that the Government will hold as a result of underwriting the UK’s fair share of the JET costs. The value of the liability is subject to negotiation. Estimates as to the possible value of the liability will need to remain confidential so as to avoid prejudicing the UK’s future negotiating position.
It is usual to allow a period of 14 sitting days prior to accepting a contingent liability, to provide Parliament with an opportunity to scrutinise the proposal and raise any objections. Because of the dissolution of Parliament it was not possible to allow for a period of scrutiny before incurring this liability. This was in order to ensure that the underwrite was communicated to the EU Commission in time to influence a key report on which decisions about the JET contract extension will be based. This action was judged to be in the public interest because of the additional costs to the public finances which might be incurred if the Commission was not informed of the UK’s intentions in time to influence its decisions.
[HCWS13]