Nuclear Power: Toshiba

Alan Brown Excerpts

Monday 12th November 2018 Commons Chamber

[Greg Clark]

My officials and I, and my ministerial team, talk regularly to countries and companies across the world. When I was in Japan last week, I had discussions with Hitachi, which is actively engaged in negotiations on the Wylfa project. Now that Toshiba has taken its decision, for reasons that everyone understands, and I make no criticism of it—it has been very transparent in the reasons for this—that site is now available. Other developers will know that and be able to engage.

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

Despite losing £100 million on this venture, Toshiba’s share price went up when it pulled out, yet the Secretary of State stands there and tells us that nobody is more committed to nuclear than he is. It is quite obvious that renewables are the future, yet this Government are blocking onshore wind development in Scotland. They are looking at pulling the export tariff, and as my hon. Friend the Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry) said, they have already pulled CCS funding. When will they provide proper investment in renewables and end this nuclear obsession?

[Greg Clark]

The first part of the hon. Gentleman’s question makes my point for me. The reason that Toshiba took the decision that it did was to restore robustness to the financing of the company following the chapter 11 bankruptcy proceedings that Westinghouse went into. It has grasped that nettle. On the deployment of renewables, he will know that when it comes, for example, to wind in the remote islands of Scotland, I made sure that we were able to take that opportunity, and as a result, investment is going into those communities. [Interruption.] He says that it is small, but the performance of offshore wind is creating jobs all around Scotland and the United Kingdom and is a reflection of the commitment that this Government have given to it.

HELMS and the Green Deal

Alan Brown Excerpts

Tuesday 23rd October 2018 Westminster Hall

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

It is a pleasure to serve under your chairmanship, Mr Robertson. Like others, I congratulate my hon. Friend the Member for Paisley and Renfrewshire North (Gavin Newlands) on securing this important debate. He made the case against HELMS excellently—the mis-selling of loans, the outright fraud, the fact that it was deemed to be a Government-backed scheme, the targeting of the vulnerable, the transfer of feed-in tariffs, and the personal finance arrangements that effectively forced people to commission other works. Some people took out loans for works that the Scottish Government would have paid for directly because they invest in energy efficiency measures.

My hon. Friend mentioned that building warrants were not applied for and people were not told that they needed them; now, statutory fees are added if people apply for a building warrant retrospectively. We heard about incorrect metering, and the fact that HELMS was able to go into liquidation and walk away, paying just £10,000 out of a record £200,000 fine for cold calling. We heard about the Government’s total inaction and inadequate governance, and about the Government’s attitude, which when combined with the actions of HELMS, has created fuel-poor households rather than helping people with their fuel bills.

My hon. Friend’s comments were echoed by other speakers. The hon. Member for Glasgow North East (Mr Sweeney) spoke about people being imprisoned or trapped in their homes, which is a travesty. He said that he asked Glasgow City Council to waive the statutory late fees for building warrants, and I put the same request to my local authority. The problem is that these are statutory fees—in law, they cannot be waived. That puts the ball firmly in the corner of the UK Government, who should pay those fees.

[Dr Lisa Cameron (East Kilbride, Strathaven and Lesmahagow) (SNP)]

It is a disgrace that people are being locked in to these deals. Older adults and vulnerable individuals were, I believe, deliberately mis-sold these products. In some cases in my constituency, which thankfully have now been dealt with, it meant that elderly individuals could not move from their homes to sheltered accommodation or nursing homes when they needed care.

[Alan Brown]

It is a shocking indictment and really disgraceful that people are trapped and cannot get into houses that are fit for purpose.

My hon. Friend the Member for North Ayrshire and Arran (Patricia Gibson) correctly highlighted the need for compensation, the issue of people who are unable to sell their homes, and the March 2016 feed-in tariff deadline that means that people are missing out on the tariffs they expected. It was good to hear a concession from the Minister about reviewing consumer regulation, and it will be interesting to see how that progresses. My hon. Friend issued a further challenge to the Government, and we all want to see action and intervention on this.

My hon. Friend the Member for Paisley and Renfrewshire North highlighted issues that are familiar to SNP Members but that the UK Government have so far chosen to ignore, despite numerous written parliamentary questions and letters from MSPs and MPs, including me. Surely today the Minister will confirm that the UK Government will take action and listen to our calls for a compensation fund for those affected.

Let me give some headline statistics: 162 households in my constituency have green deal finance with HELMS, and of those 142 have photovoltaic installations. Some 3,054 households in Scotland have HELMS green deal finance for PVs, and there are more than 4,000 across the UK. Other Members have mentioned the duration of loans: 93% of those loans in Scotland, including for 97% of my affected constituents, are in the range of 20 to 25 years. Think of that: a supposedly spend-to-save measure is being paid back over 20 or 25 years. No private company would take out such a loan to make projected minor annual savings because the risk is too great. We already know about the dodgy installations and wiring, but there is no way that those PV cells have a lifespan of 20 to 25 years. The additional ongoing maintenance required will offset any projected savings that people were led to believe they would get. Imagine having an asset that will not last for the life of the loan—it is criminal. Anyone aged 40 or over who has taken out a loan will still be paying it back when they reach state retirement age and beyond. That would be bad enough under normal loan ethics, but as we have heard, many people who took out those loans were duped by salesmen who said that savings would pay for a Government-backed scheme. What does the Minister say to the people who have been cruelly conned and left with long-term loans?

[Angela Crawley]

One couple who approached me had specifically been told that installing solar panels would help them make money on the sale of their home, but instead they have been paying double and triple the amount for their electricity. Does my hon. Friend agree that those who have been hardest hit are people in middle to low-income homes?

[Alan Brown]

I completely agree: this scheme is creating fuel-poor households, which is why Government intervention is needed.

How did this come about? For me, the situation results from a combination of a few factors. It was originally a Liberal Democrat policy that clearly had not been correctly thought through, and there was a Tory partner in the coalition Government who maintained a “hands off—market forces will prevail” ideology, which prevented direct Government intervention. There was always the desire not to get directly involved. Some unscrupulous businessmen saw a fantastic opportunity to make money at the expense of the vulnerable. The impact of events have since been compounded by successive Tory Governments who have refused to take a lead as the mis-selling scandal unravelled.

I find it incomprehensible that the UK Government have so far not seen fit to have a proper investigation into this matter and they are forcing victims to take out individual claims. That adds to the stress of the situation, and coupled with the non-disclosure agreement that is associated with any settlement offered from the Green Deal Finance Company, it is apparent that the initial approach is to minimise any refunds to those who deserve them. It is a classic “divide and conquer” approach, rather than an attempt to do the right thing.

When I read the debates on the Energy Bill in 2011, I noted that the current Minister of State for Energy and Clean Growth served on the Bill Committee. Given her familiarity with the legislation and the wider points debated in Committee and other debates, surely she would want to lead in fixing this mess. Indeed, as this mess has unfolded, it has become clear that the governance arrangements were not fit for purpose. Interestingly, the SNP spokesperson at that time, the former Member for Angus, Mike Weir, raised concerns on Second Reading, saying:

“One of the problems with energy mis-selling was that it was a long time before many of the cases came to light. Does the Minister have any thoughts on ensuring that the standards that are to be imposed on those selling green energy are regularly inspected to ensure that any problems can be detected at an early stage?”

The Minister responded:

“I can assure the hon. Gentleman that we will keep all elements of the green deal under close review…we will need continually to monitor all aspects of it, especially those relating to selling and mis-selling… If we identify any areas in which we think improvements can be made, we will not hesitate to make them.”—[Official Report, 14 September 2011; Vol. 532, c. 1049.]

Unfortunately, Mike Weir has been proved right. The UK Government did not uphold their end of the bargain regarding the governance and review that they said they would undertake.

On governance, the length of the loans alone should have prompted an automatic red flag. The 242 complaints about cold calling between October and December 2014 offering “free” solar panels should have resulted in much quicker clampdown on the actions of HELMS, but the Government were too slow to act. We know what the then Energy Minister, Greg Barker, thought of HELMS—he praised it for its entrepreneurial start-up skills. Mr Barker is okay now: he stepped down in 2015 and was promptly made a life peer in the House of Lords. The Secretary of State for Energy at that time lost his seat in 2015 but was knighted in the 2016 new year honours list and is now back as an hon. Member in this House. I am sure that my constituents will want to know why those who got it wrong have been rewarded and, as we have heard, those who have been wronged are still fighting for justice and have been ignored by the UK Government.

As we have heard, someone else who did okay out of this was the director, Robert Skillen, who was up to his neck in it. As my hon. Friend the Member for Paisley and Renfrewshire North said, Mr Skillen has some amount of brass neck to come back and campaign to protect people from the mis-selling that he was involved in. That is shocking. I hope the Minister will confirm that all necessary agencies and authorities will look into his ongoing activities and see what can be done to prevent further fraudulent action by him.

Coming back to governance, in a written answer to my parliamentary question on what review the Government had undertaken of the so-called golden rule and how it was working, the answer was “None.” Once the scheme was up and running, why did nobody look at whether the golden rule was working and whether the savings that had been predicted were being generated? That is another dereliction of duty. Who would think that basing a whole scheme on one year’s savings against a loan was a good idea? We need a proper root-and-branch review of HELMS installations, and I suggest that we need to extend it to wider green deal installations elsewhere.

The Tory Government pulled the green deal, but what analysis did they do when they put a block on it? When will we hear why they pulled it and what lessons were learned? While the Tory Government has stood back, it has been left to MSPs, MPs and citizens advice bureaux to try to assist affected constituents, but we are doing so with both hands tied behind our back because we do not have the address information. Only the Green Deal Finance Company, and therefore the Government, know exactly who has these green deal finance deals from HELMS. Again, that is why we need Government intervention. Before I conclude, I must put on record my tribute to the work done by my local CAB, particularly Linda Corbett, who has done fantastic work on digging into HELMS, understanding the issue, taking it forward and helping people, and to a local constituent, Isobel McNicol, who started a HELMS awareness and campaign group. However, it should not be left to those people to act; Government intervention is needed.

In the ministerial response to me the Government rejected the assertion that the whole issue is shrouded in secrecy, but I suggest there is still not enough transparency. We need to know how many people have been defrauded of their feed-in tariff. In response to a written parliamentary question of mine, I was told that it is not the Government who hold the information on whose feed-in tariffs have been transferred, but Ofgem. The Government need to get an understanding of the matter, because we have heard that there has been widespread fraud on the transferring of feed-in tariffs.

As others have said, this has been a flawed energy policy from the start. The problems will set back efforts to get people to sign up to future energy efficiency measures. Some people who are fuel poor and deserve to have energy efficiency measures installed in their homes will be afraid to do so. The Government must get a grip, set up a compensation fund, do a proper investigation and start taking collective action.

--- Later in debate ---

[Kelly Tolhurst]

The Green Deal Finance Company will make those offers. If they are not accepted by the consumer, the onus is on them to recommend the case to the Secretary of State and for him to take the decision. That is the redress process that we have put in place.

[Alan Brown]

I thank the Minister for giving way again. She said that roughly 10% of people who have a HELMS green deal have instigated a complaint. Therefore, 90% of those sitting on these deals have not complained, and many do not even know that they have been conned. That is why the Government have a responsibility to contact them directly and begin investigating, to see what help they can give.

[Kelly Tolhurst]

If that has not already been done, I am sure it will be looked at. I am not sure whether it has been done or not, as I do not have that information.

Oil and Gas Industry

Alan Brown Excerpts

Tuesday 9th October 2018 Westminster Hall

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

It is a pleasure to serve under your chairmanship, Mr Hollobone. I congratulate my hon. Friend the Member for Falkirk (John Mc Nally) on introducing what is clearly a timely debate, given that the Budget is forthcoming. As he rightly said, that Tory Budget cannot undermine the future of the oil and gas industry by once again using the North sea as a cash cow—terminology that was effectively recognised even by the hon. Member for Ayr, Carrick and Cumnock (Bill Grant), who acknowledged the £350 billion that the UK Treasury has accrued over the lifetime of the oil industry. That money has simply been frittered away.

[Colin Clark (Gordon) (Con)]

Will the hon. Gentleman give way?

[Alan Brown]

No, because I have limited time.

Where is the legacy from the UK Government? Where is the onshore infrastructure investment to support Aberdeen? It has been left to the Scottish National party Government to pick up the pieces, including the Aberdeen bypass and rail improvements. Where is the oil fund we have called for? Norway’s oil fund, started in 1990, has now topped $1 trillion in assets, and last year returned a profit of $131 billion. That alone gives lie to the myth that Scotland relies on the broad shoulders of the UK to deal with any price volatility. Careful stewardship would have taken care of that.

Let us look at the measures the UK Government have taken recently. In the spring 2016 Budget, they reduced the supplementary charge back to 10%. That was very welcome, but the predicted cost to the Treasury of £l billion was only a third of the inheritance tax giveaway to millionaires—such were their priorities. In the November 2017 Budget, the transferable tax history was a welcome measure, but given that it was predicted to bring an additional £70 million in revenue to the Treasury, that was not a difficult decision. The UK Government need to close out the process going forward. Over the same period, we have had the £1 billion carbon capture and storage betrayal. That project would have facilitated diversification from the wider oil and gas industry.

As others have recognised, the offshore oil industry has clearly been a great success story and has turned Aberdeen into a global city. Despite the predictions of when oil will run out, there is still a bright future. Just last month, Total announced a major gas discovery off Shetland, with an estimated 1 trillion cubic feet of gas that can be extracted. Rosebank, off the west of Shetland, is estimated to contain around 300 million barrels of oil. Equinor has called it

“one of the biggest undeveloped finds on the UK Continental Shelf.”

Overall, the North sea holds significant potential, with the equivalent of up to 20 billion barrels of oil remaining. That could sustain production for the next 20 years. I repeat that the UK Government cannot do another cash grab on the industry. Production statistics show that the sales value of oil and gas has gone up, and we know that production of oil and gas remains 23% higher than the level recorded in 2014-15. Even so, the UK Government must introduce measures to improve the exploration and attract fresh investment. They need to support the industry in its ambitions to increase the total economic value of the North sea.

With the publication of the Intergovernmental Panel on Climate Change report, we have to recognise the wider climate change issues and that the world is not on track to meet the temperature goals of the Paris agreement. The UK Government will have to take action in that regard, but that does not mean that we need to pull out of the North sea any time soon. Even if we did, we would then be reliant on imports.

Scotland’s energy strategy recognises that a strong domestic oil and gas industry can play a positive role in supporting the low carbon transition. What would help that transition, while we are still extracting oil and gas, is carbon capture and storage, greater investment in renewables, and allowing onshore wind developments in Scotland. The UK Government must also back away from the nuclear folly, and invest that money in offshore renewables, grid upgrades and directly in energy efficiency measures in homes.

We must recognise that the North sea industry is highly regulated, with some of the most advanced and comparatively least polluting production methods in the world. The industry is focused on reducing its carbon footprint and average emissions have fallen year on year since 2013. An oil and gas sector deal could help that process. Where is it? We really need one, and we need to hear about that from the Minister. The future of the oil and gas industry is bright, but it needs better leadership from the UK Government.

Economic Justice Commission

Alan Brown Excerpts

Tuesday 11th September 2018 Westminster Hall

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

It is a pleasure to serve under your chairmanship, Mr Hollobone. Like others, I commend the right hon. Member for Birmingham, Hodge Hill (Liam Byrne) on bringing forward the debate, and on the work he does as the chair of the all-party parliamentary group on inclusive growth. In his opening comments he mentioned a moral mission, and I certainly agree with that. Frankly, more politicians need to get behind this subject. I share the sentiment of the hon. Member for Ellesmere Port and Neston (Justin Madders), who thought that more Members would be present. This important subject needs more than a one-hour Westminster Hall debate.

I agree with the right hon. Gentleman on the issues he raised, including deindustrialisation, growth and the squeeze on wages, and the fact that the rich are getting richer meaning that we need a new economic model. I commend his reflection on Labour’s 13 years in power in which it did not address that. Labour has certainly moved on from the days of Peter Mandelson talking about having no problems with people getting filthy rich; that is progress. I also commend the work of the commission and its report, with its intention of stimulating debate about necessary changes to the UK economy. I also welcome how it considered Scotland in the round, not as an afterthought.

Who can argue against the principle that prosperity and justice should go hand in hand? As I said, I agree with the comments of the right hon. Gentleman, and I look forward to hearing the Minister’s response to his challenge to her to outline which principles in the report she disagrees with.

We are aware that the gap between the wealthiest and the poorest is increasing all the time, and I am concerned that the UK Government do not seem realise that or care about it. As the report sets out, the UK economy is not working and the nations and regions are diverging even further. Fundamental reform is required, and the ultimate aspiration must be a fair economy that has economic justice hard-wired into it. That in turn will make for a stronger economy.

The report also highlights issues that my colleagues and I have been going on about for a while. The UK economy is overly reliant on household consumption, excessive household debt and further increasing property prices—it is as if we never learnt the lessons of the financial crash 10 years ago. Sure as fate, another crash will come. The report also outlines that the UK has a serious investment problem, sitting at about 4% below the OECD average. Just today I was at a civil engineering briefing where it was noted that the UK is ranked 24th on infrastructure investment. We obviously need greater investment in infrastructure, and true regional and national investment in infrastructure would help to rebalance the economy. That must be looked at seriously.

Scotland has been playing catch-up, because before the creation of the Scottish Parliament we were always overlooked on infrastructure. I welcome the report’s call for greater borrowing powers for the Scottish Parliament to allow for greater investment in infrastructure. I am interested to hear what the Minister will say about that.

The report also outlines that there should be further devolution, as the UK is

“one of the most centralised states in the developed world”

and, as was touched on, the “most geographically unbalanced economy” in Europe. These matters are connected, and they are particularly pertinent to me as just today I have received written answers from the Scotland Office saying that the Secretary of State for Scotland has no interest in devolving further powers to Holyrood. He does not even want the Scottish Parliament to have the same powers as the Northern Ireland Assembly when it sits. That is a sad indictment of the Secretary of State’s ambition for Scotland. Again, I look forward to what the Minister will say about further devolution of powers.

On the workforce and the balance between the working and non-working population, the report highlights the risks associated with an ageing population, which is a bigger issue in Scotland than in the rest of the UK. I agree with the recommendation that immigration policy should be devolved to Scotland. It is predicted that we will need an additional 860,000 contributing workers by 2041, so we need control over immigration.

The report shares the Scottish Government’s ambition to tackle the gender pay gap. Complementary policies on that and gender balance deserve further consideration. The report says that

“all firms above 250 employees should be required to publish their pay scales—both ranges and averages by role—to employees within their firms”.

Thanks to the Scottish National party, we have the Gender Representation on Public Boards (Scotland) Act 2018, which sets the objective that 50% of non-executive members of public boards should be women. It also requires steps to be taken to encourage women to apply to become non-executive members of a board. That gender balance will help us towards a fairer and more understanding economy.

On fairness, the report suggests that everyone aged 21 and over should be paid the real living wage, and I concur. In Scotland, a higher percentage of workers receive the living wage, but until Westminster takes action and provides legislation it will not become a reality for all.

The report says that it has

“already drawn on the Scottish government’s Fair Work agenda”

in suggesting

“the establishment of a new national productivity agency, skills policies and a ‘good jobs standard’”,

which could deliver fairer working practices. The SNP Government are striving towards that, and it is time for the UK Government to do likewise and have a dramatic rethink about how the economy works. Otherwise, I look forward to the day when we have an independent Scotland, where a Government who have the correct will and desire can implement those policies.

--- Later in debate ---

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

It is an absolute pleasure to serve under your chairmanship for my first Westminster Hall debate, Mr Hollobone.

I congratulate the right hon. Member for Birmingham, Hodge Hill (Liam Byrne) on securing this debate. The IPPR’s Commission on Economic Justice has produced a thoughtful and wide-ranging report on our economy, and it is absolutely right that this House should debate it and its recommendations. I thank him for bringing it to the House and for introducing it, and I congratulate the IPPR and the commission on their contribution to the public debate.

We can all agree that the issues raised today are of fundamental importance. Tackling low pay, boosting equality and putting fairness at the heart of society, while building on the strength of our jobs market and on economic growth, are issues that affect all our constituents. I will start by simply reflecting on where we are now. We have a deserved reputation for being a great place to do business, with high standards, respected institutions and the reliable rule of law. We are an enterprising and successful economy, built on firm foundations: the skills of our workers, the quality of the infrastructure, and a fair and predictable business environment.

The Government are committed to building an economy that works for everyone, to raising living standards and to growing our national wealth, not just for today, but for future generations. That commitment is demonstrated by our progress since 2010: near-record levels of employment, with more than 3.3 million more people in work than in 2010, unemployment at a record low, income inequality down, fairness in the tax system—the right hon. Gentleman spoke about the wealthiest 1% in this country, but the top 1% contribute 28% to income tax and the top 5% contribute nearly 50% of income tax—and absolute poverty falling.

[Alan Brown]

In terms of rebalancing the economy and an economy that works for everyone, can the Minister explain how cutting the rate of inheritance tax and cutting capital gains tax help the poorest in society?

[Kelly Tolhurst]

One of the things we have absolutely seen is that putting wealth back into the system creates wealth. That is one reason why we have these measures and why we take some of these fiscal decisions—to ensure that we are fuelling wealth to be spent in order to benefit the lowest in our society.

We recognise the progress that has already been achieved in improving the life chances of millions around the country, but the right hon. Gentleman is right that we must not be complacent. For all our many strengths, we have businesses, people and places whose level of productivity is well below what can be achieved. That is why the Government have launched ambitious and transformative plans for our economy and for employment. The industrial strategy deliberately strengthens the five foundations of productivity: ideas, people, infrastructure, the business environment and places. It is a strategy that is being implemented with, not just for, British enterprise. It provides a template for the partnership between Government and the private sector that is required to solve productivity issues. Through the “Good Work” plan, the Government are supporting people to seize those opportunities as the labour market is changed by technological advances. I will talk about those today.

The Government’s industrial strategy is our long-term plan for building a Britain that is fit for the future. It sets out how we will help businesses to create better, higher paying jobs in every part of the UK. It focuses on the necessary investment in the skills, industry and infrastructure of the future. It ensures that our country and its citizens can embrace and benefit from the opportunities of technological change. We need to prepare to seize those opportunities. That would be necessary at any time, but Britain’s decision to leave the European Union makes it even more important.

Technology is transforming the world of work. That means we must invest in our workforce. We have committed to establishing a technical education system that rivals the best in the world, to stand alongside our already world-class higher education system. As part of wide-ranging reforms, we will invest an additional £406 million in maths, digital and technical education. Technological progress and a faster pace of change create opportunities but also challenges for those who may find themselves needing to learn new skills to find a job. We will therefore embed a culture of career-long learning through a new national retraining scheme that supports people to re-skill and grow their earning power throughout their lives.

We should not forget that it was the Conservative party that introduced the national living wage, delivering the lowest earners their fastest pay rise in 20 years. In April this year, we increased the national living wage by 4.4%, from £7.50 to £7.83. That increase is expected to benefit more than 2 million people and means that a full-time worker on the national living wage will see their pay increase by over £600 over the year.

Our industrial strategy also sets out what we are doing to make sure that the UK is the best place in the world to start and grow a business, which will create new jobs. We firmly believe in business as a force for good in society.

[Alan Brown]

Will the Minister give way?

[Kelly Tolhurst]

I will make some more progress.

Our corporate governance reforms are driving changes in how our largest companies engage, at board level, with employees and external stakeholders. Significant changes to the corporate governance code will strengthen workers’ voices in boardrooms by requiring boardrooms to put in place robust employee engagement mechanisms, while new laws will require companies to report how they engage with employees and have regard to their interests. Amplifying the voices of employees and external stakeholders will improve boardroom decision making, deliver more sustainable business performance and build confidence in the way businesses are run.

We are also introducing pay ratio reporting, requiring quoted companies to compare CEO pay with average worker pay, supported by an explanation of why the ratio is consistent with pay, reward and progression policies in the wider workforce. Under the revised UK corporate governance code, remuneration committees will have to engage with the workforce to explain how executive remuneration aligns with wider company policy. These changes will help to ensure that boardroom pay is connected with wider workforce pay and not set in an artificial bubble.

Wylfa Nuclear Power Project: Taxpayer Liability for Safety

Alan Brown Excerpts

Tuesday 24th July 2018 Westminster Hall

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

I beg to move,

That this House has considered taxpayer liability for safety at the Wylfa Nuclear power project.

It is a pleasure to serve under your chairmanship, Mr Robertson. I must say that when my alarm went off at 5.15 this morning, I was absolutely delighted to be getting up to travel here and deliver this speech. I am sure everyone else here in the Chamber is equally keen to be here, even though it is the last sitting day. I am equally sure that the power of my debating skills and the points I am going to raise will not only make the Minister ponder when she gives her response, but lead to changes in Government policy over the summer recess, so I look forward to some announcements when we come back.

To get to the main point of the debate, we must first look at the wider picture. We must look at the history and question why the Government are hellbent on new nuclear power stations and why the official Opposition appear to be in such unison with them. Nuclear energy was the future at one time; it was the low-carbon technology at a time when all other methods of generation apart from hydro were carbon based. However, while nuclear has been responsible for helping to keep the lights on for decades, keeping the lights on has come at a price.

We have a legacy of contamination, and the National Audit Office estimates that the clean-up will come in at £121 billion by 2020. The Magnox Swarf storage silo, in operation since 1964, contains waste sludge that is corrosive and radioactive, which is expected to pose a significant hazard until 2050. We have many more sites still to be decommissioned, which will lead to further increases in taxpayer burdens. According to Dr Paul Dorfman of the Energy Institute in London, the Nuclear Decommissioning Authority estimates that clean-up costs for the next 120 years will be in the region of £190 billion to £250 billion. That is some legacy to bequeath future generations.

On reflection, it is clear that the privatisation of the nuclear industry has proven to be another case of privatising the profits while renationalising the liabilities associated with the industry. We still do not know what to do with radioactive waste other than storage. We have a long-term problem looming because of the increasing volume of waste to be stored and managed, so why on earth do we want to create further liabilities with the proposed new power station at Wylfa?

We once thought asbestos was a wonderful heat-resistant product, but once we learned about the health risks associated with it, we stopped using it. Why, then, when we know the problems with nuclear, do we want to repeat the past mistakes associated with it? The UK Government tell us that we need more nuclear as a low-carbon means of energy generation, and Wylfa is one of eight sites proposed for a total programme of 13 new reactors. Yet renewables already provide a bigger proportion of electricity than nuclear within the UK, and in Scotland the divide between nuclear and renewables is even greater. While the nuclear process may be deemed to be low carbon, I suggest it is anything but green, given the toxic legacy I have already outlined.

Why do we want to commission more at exorbitant cost? The cliché is, “We need the baseload that nuclear provides,” but as far back as 2015, the chief executive of National Grid argued that the baseload concept was outdated. He added that large-scale nuclear reactors were also an outdated concept and that the future would be driven by

“demand side response and management”.

[Albert Owen (Ynys Môn) (Lab)]

I will come on to Wylfa Newydd if I catch your eye in a moment, Mr Robertson. I just wanted to say that the statement that the hon. Gentleman read out from the previous chief executive of National Grid has been put to bed by the new one. Indeed, even the previous chief executive said that we needed centrally located energy sources, or baseload, to continue. The hon. Gentleman has taken a very small quote from a very long statement from a previous National Grid chief executive. Current National Grid policy is certainly that nuclear is strong baseload.

[Alan Brown]

Clearly, we can both tear apart quotes, but the bottom line is that that is what the then chief executive of National Grid said. I was just going to come on to a quote from Dr Mark Diesendorf, of the University of New South Wales, in Australia. He stated that the assumption is

“that nuclear power is a reliable baseload supplier. In fact it’s no such thing. All nuclear power stations are subject to tripping out for safety reasons or technical faults. That means that a 3.2GW nuclear power station has to be matched by 3.2GW of expensive ‘spinning reserve’ that can be called in at a moment’s notice.”

He further states:

“The assumption that baseload power stations are necessary to provide a reliable supply of grid electricity has been disproven by both practical experience in electricity grids with high contributions from renewable energy, and by hourly computer simulations.”

Therefore, the argument that Wylfa and other stations are required to supply baseload is flawed.

[Mr Paul Sweeney (Glasgow North East) (Lab/Co-op)]

On the point about baseload, does the hon. Gentleman not recognise that the whole point of managing a baseload with nuclear power stations and reactors is that they are organised to be taken offline in a scheduled programme of maintenance? In the case of Torness, it almost broke the world record for a continuous run of 495 days before being taken offline. Surely that is a huge achievement for engineers in Scotland?

[Alan Brown]

The hon. Gentleman tried to worm in a compliment to engineers in Scotland at the end of his intervention. Of course I welcome the skills of engineers, including nuclear engineers—I have no doubt that the guys doing that work are highly skilled engineers. I still do not agree with the concept that the baseload is required from nuclear. If we think about Hinkley power station, we were originally told that, because of the baseload required, if it was not commissioned by December 2017, the lights would go out. We are way beyond that deadline, since Hinkley will not come on stream until closer to the end of this decade, and we are still managing our electricity supplies. There are ways to manage baseload through alternate supplies, which I will come on to.

The only other reasoning I can see for this headlong rush into more nuclear is the equally outdated concept of the UK being a world leader in a particular sector, but that will come about because of other countries pulling out of the nuclear sector. The US is not building new nuclear, Japan has changed tack and Germany has pledged to phase out new nuclear. It seems that the UK will be a world leader in propping up the nuclear sector for other countries. In a recent Westminster Hall debate on the nuclear sector deal, the hon. Member for Bolton West (Chris Green) stated that we should not be reliant on foreign countries for our energy, but with these new nuclear proposals, including Wylfa, that is exactly what we will still be: reliant on foreign countries for their expertise, knowledge and supply of goods.

I suggest that the UK might be the world leader in bad nuclear deals. Returning to Hinkley, we have a 35-year agreement at a strike rate of £92.50 per MWh, when offshore wind recently came in at a strike rate of £57.50 per MWh, and that £57.50 is only for a 15-year tenure. The Hinkley deal is so bad that it was criticised by the NAO as bad value for money. Part of the problem with Hinkley was the risk and the financial exposure to private investors, allied with the fact that the technology for the EPR, or European pressurised reactor, has still to be proven, with all existing EPR projects under construction still facing delays and cost overruns.

As investment in nuclear around the world falls, the UK has planning for 11 reactors on the go and two reactors under construction at Hinkley. In its latest report, released recently, the National Infrastructure Commission states that there should be a maximum of just one new nuclear contract signed before 2025 because of the reduced costs of renewables and the other emerging technologies, including the massive decrease in the cost of batteries. Its report also illustrates that, over the years, the cost of nuclear has not decreased, debunking another UK Government aspiration that continually commissioning new nuclear such as Wylfa will somehow reduce costs. Has the Minister assessed those comments, and will the Government provide a response to the report in due course?

Wylfa is also a different technology from Hinkley, and other proposed sites have yet further different technologies. It therefore stands to reason that, when employing those different technologies, the inherent price will not be brought down, because we will not benefit from repeat constructions and using the skills gained during one project on another. There will also be site-specific constraints and considerations.

This backdrop brings us directly back to the Wylfa proposals. Getting direct information from the Government remains difficult due to their claims of commercial confidentiality. However, the private developer, Hitachi, has clearly had difficulties with the costs and risks associated with the project, which has led to the suggestion of the Government taking a direct £5 billion stake. In principle, a direct Government stake in key infrastructure projects makes sense, as they can borrow more cheaply than private investors. However, in this case, it seems to be part of another, wider blank cheque-type agreement, with the Government desperate to get the project moving.

It is not only me using the blank cheque analogy. Will Gardiner, chief executive officer of Drax Group, said:

“I am not a fan of sweetheart deals, the government sitting down with Hitachi and writing them a cheque. That’s not good economics”.

On the economics, we have heard reported strike rate figures of £77.50 per megawatt-hour quoted for Wylfa. That reduced rate, compared with Hinkley’s, is on the back of the £5 billion stake. While the Government are trying to keep information under wraps, managing to learn anything is still a bit of a smoke-and-mirrors game.

Under the Paris and Brussels conventions, a nuclear operator is liable for any nuclear incidents. However, that liability is capped at €1.2 billion, which is way below the cost of a catastrophic incident—the Fukushima incident ran into the hundreds of billions of pounds—so the cap is arguably too low. Hitachi has already had two serious safety breaches in other nuclear developments, and was fined $2.7 million by the US Government for one of them. Apparently learning from that, Hitachi is resisting taking on liability for nuclear incidents at Wylfa. We do not know its exact proposal, but it marks a departure from current agreements, where the operator should be responsible for health and safety and attendant risks and liabilities.

The Times reports that Hitachi “won’t pay” for nuclear accidents at Wylfa, based on Nikkei reports that some of Hitachi’s directors wanted

“safeguards that reduce or eliminate Hitachi’s financial responsibility for accidents at the plant”.

It also marks a departure from the “polluter pays” principle. It is critical that the UK Government do not sign up to any such crazy proposals. I hope the Minister provides real clarity on this matter and does not hide behind commercial confidentiality.

We know the Prime Minister hit the pause button for Hinkley Point C to allow for a cost review. Despite that review, she somehow then caved in and accepted what the National Audit Office has subsequently confirmed is a bad deal. Why do the Government appear to be pulling out all the stops again to get Wylfa over the finishing line—by which I mean the agreeing of the contract? We know full well that the project will invariably end up over budget and delayed, just like every other ongoing nuclear project in the world.

Another argument in favour of Wylfa and other nuclear projects is the jobs they will create. I agree that these high-skilled jobs are vital for the localities with existing power stations, and I understand Members lobbying to maintain—or to create further—high-skilled jobs. However, those jobs should not come at any cost. Indeed, paragraph 23 of the Welsh Affairs Committee’s July 2016 report, “The Future of nuclear power in Wales”, explicitly states:

“We recommend that the Government negotiate a strike price for Wylfa Newydd below that agreed for Hinkley Point C and seek a price that would be competitive with renewable sources, such as on-shore wind. The Government should not continue with the project if the price is too high.”

It seems, based on that recommendation, that the Committee must by default be against this project continuing, as it clearly cannot be competitive compared with onshore wind. Has the Minister consulted the Committee on the recent developments in the likely cost of Wylfa?

I would not want to see job losses anywhere. I represent a deindustrialised constituency. Over the years, we have lost coal mining and many different manufacturing jobs. However, we can spend money more wisely to create jobs. Wylfa will cost up to £20 billion. The new nuclear legacy programme will cost circa £100 billion, and we have spent nearly £120 billion in decommissioning costs. Departing from civil nuclear projects, the successor programme to replace the Trident submarines will have whole-life costs of more than £200 billion, with future decommissioning costing up to £250 billion.

Those are astronomical sums of money, and we should be able to think how to spend them more wisely. We could have proper infrastructure investment and a targeted jobs and manufacturing strategy that would create more jobs and a more balanced economy, and we will not have the toxic legacy of nuclear. By the time Hinkley and Wylfa are constructed, with their anticipated 6 GW capacity, we could build something like 20 GW of offshore wind capacity. We know that the costs of batteries are plummeting, and renewable costs have also plummeted.

We should invest in carbon capture and storage. I welcome the Government’s latest report on CCS, but we should never have pulled the previous £1 billion allocation. How ridiculously small does that £1 billion seem compared with the costs of nuclear I have outlined? CCS will also allow for the decarbonisation of gas and biomass electricity generation and will open up the potential for a supply of zero-carbon fuel, in the form of hydrogen. However, each massive undertaking for nuclear is to the detriment of investment in renewables. When the Government give undertakings and risk guarantees for Wylfa, they reduce their scope to make similar guarantees for emerging technologies.

On jobs not coming at any cost, we also have to appreciate the potential health risks. As outlined by Dr Ian Fairlie, an independent consultant on radioactivity, the risks of leukaemia in nuclear workers are double those found in a 2005 study, and there is

“strong evidence of a dose-response relationship between cumulative, external, chronic, low-dose, exposures to radiation and leukaemia”.

He also states:

“When nuclear reactors are refueled, a 12-hour spike in radioactive emissions exposes local people to levels of radioactivity up to 500 times greater than during normal operation”.

He states in his blog that the research behind these findings is “impeccable”, as it was based on

“a huge study of over 300,000 nuclear workers adding up to over 8 million person years, thus ensuring its findings are statistically significant”.

I suggest we pay heed to such research.

As I have said, the cost legacy is bad enough, and we still do not have a solution to the long-term disposal of nuclear waste, so it is absolute folly to sign a deal in which the taxpayer takes on unlimited risk for a nuclear incident. This could prove to be the worst deal yet unless the Government change tack soon.

--- Later in debate ---

[Albert Owen]

Absolutely. In fact, I will also send one to the Chair, because I know that he is interested in this subject. Indeed, I should send some to the entire Scottish National party group in the House. I will do that over the summer. That is a promise.

Many energy developers have recognised the potential of the Isle of Anglesey to contribute to this major investment not just in new nuclear, but in marine energy and other technologies. You will know, Mr Robertson, from the time that we have spent together in the House that I am pro-renewables, pro-nuclear and pro-energy efficiency. I see no contradiction in that: I think that all three are needed if we are to meet our climate change goals and reduce emissions.

In the decade from 2001—when I entered the House—to 2011, the House of Commons was moving towards consensus on this issue. That was important. I accept that it was not universal, but there was a view that we needed a rich and diverse energy mix and that new nuclear was part of that mix. I was very proud to vote for the Bill that became the Climate Change Act 2008, because that was very pioneering of the UK; we were the first nation to introduce such a law. However, to achieve the objective, we need rich, diverse energy. We need base-load, and I will argue with the hon. Member for Kilmarnock and Loudoun that nuclear does provide base-load. He talks about offline, but this is factored in. Base-load is important, as is the intermittent status of renewables and, in particular, wind. He talks about figures, but I point out to him that we have had a very hot period over the last 28 days, and wind energy, offshore wind, contributed just 3% for that period. The rest came from base-load such as nuclear; the nuclear percentage went up in that period. I am therefore arguing convincingly for both—that we have the intermittent energy that we need in hot periods, but also, when we have cold periods, that we have the full load that is provided by nuclear and renewables. We need that balance.

New safe nuclear generation started in my constituency in 1963. Indeed, my father worked on the construction of the first Wylfa power station. The hon. Member for Kilmarnock and Loudoun had family who were in the nuclear industry: he told us in a previous debate that his brother-in-law was. Many families, across the United Kingdom, have benefited from the high-skilled, long-term employment opportunities that nuclear offers. The nuclear power station in my area was opened in 1971 and it produced up until the date of closure, which initially was 2010; that was extended to 2015. We are talking about 44 years of generation. I mention the jobs issue, because many of my peers at school left school and worked in the nuclear industry at Wylfa for all their working lives. Very few other industries can offer the longevity of employment and quality of jobs that nuclear brings; indeed, jobs for life are very rare.

Construction jobs are also important. In the move forward to Wylfa B or Wylfa Newydd, as it is correctly known now, we see an important uptake of skills for nuclear engineers and apprentices, and many people are training for the construction jobs—plastering, building, welding and so on. That is hugely important for areas on the periphery of the United Kingdom, such as at Wylfa in my constituency and, indeed, in Scotland. Scotland has benefited from nuclear over many years and still does today; £1 billion of gross value added comes from the nuclear sector—the two power stations. I believe—I will take an intervention if I am wrong on this—that the life of the two nuclear power stations has been extended by the SNP Government. Safe generation of nuclear energy is hugely important in Scotland, Wales and England. If we did not have it, we would be importing nuclear at this time of year either from England into Scotland or from France into the United Kingdom.

[Alan Brown]

The hon. Gentleman invited an intervention, and yes, he is correct: under the SNP Government, permission was given to extend the life of Hunterston B. Once an asset is there, if its life can be extended safely, we may as well do so. We will still have to deal with the toxic legacy at some point, but if we can make use of the asset in the meantime, we will do, so we are not absolutely blinkered.

[Albert Owen]

I understand what the hon. Gentleman says, but there is very little logic in that. If it is safe nuclear generation, it is safe nuclear generation. I accept that numerous previous Governments, of all colours, have not dealt with the legacy of nuclear waste. That is a fact, and we need to deal with it. But with new nuclear, the cost of decommissioning and of waste will be factored into the cost, which the hon. Gentleman did not explain; he did not take that out. The proper arithmetic of generation, of decommissioning and of waste will be part of the deal.

I do not know what the deal will be, but I do know that there will be some 850 jobs for the 60-year life of the new nuclear power station on Anglesey. That is huge for the local, regional, Welsh and UK economy. I also know that, at the peak, there will be 8,500 construction jobs. Again, that is a big figure. We have managed big projects in the past. I am thinking of the building of the nuclear power stations at Wylfa and Trawsfynydd and, indeed, the hydro at the Port Dinorwic storage facility. We have in north-west Wales a good legacy of these jobs, and I look forward to this project. Importantly, we are on the third round of apprentices. By the time Wylfa comes on board, there will be some 700 apprentices who have been trained in the area. Again, those are high-skilled jobs. They have had the opportunity not just to train in this country; many have been over to Japan and had the lifetime experiences that go with that.

The nuclear power station Wylfa Newydd has the support of Welsh Government. It has the support of the local council, which is Plaid Cymru led; it has the support of the Plaid Cymru Assembly Member; and it has my support. It has cross-party political support. That is important because of its potential.

The hon. Member for Kilmarnock and Loudoun is absolutely right to talk about the cost to the taxpayer of nuclear and other technologies. I have supported in the House of Commons a number of subsidies—I do not consider “subsidy” to be a dirty word—for offshore wind. When the cost was more than £100 per megawatt-hour and some people were arguing that we should not be doing it, and that the cost was too much, I argued that by investing at that stage we would be able to bring costs down, and that has happened. It has happened with onshore wind, with renewables obligation certificates—ROCs—and with solar, and it can and will happen with new nuclear as well. As I have said, I support this because we need that boost.

As the Minister will know, I argued—but was unsuccessful—for the Swansea Bay barrage, because the same principle applies to marine energy. We need to invest now for the future and the price will come down. We need a special, ring-fenced costing for marine energy and I will certainly write to the Minister, to the Secretary of State for Business, Energy and Industrial Strategy and to the Chancellor of the Exchequer to get that into the autumn Budget, because it is important; we are missing an opportunity with marine.

What I am establishing here is that I am pro-nuclear and pro-renewables and that my judgment has been to invest in them all. That means public—taxpayer—liability initially. We can look at oil, gas and electricity. They were 100% supported by the state when they were nationalised industries, and many new stations that came on board were given that subsidy when they were producing energy.

The statement by the Secretary of State in the House of Commons on 4 June was an important step forward for Wylfa Newydd, for the nuclear industry and for British industry in general. As I said, I do not know the details, but I do know that the statement confirmed that Wylfa Newydd would produce some 6% of electricity going forward. Electrification of surface transport is the big challenge for this country, and that is in addition to the built environment. We need that low-carbon extra resource, which I know Wylfa Newydd can produce.

I do not know the details, but it has been confirmed that the model will be different and, as we see from reading the “Nuclear Sector Deal”, the cost will be less than that of Hinkley. That is for sure, because when the first array of offshore wind was produced and the cost was much higher, we argued that it would come down. The nuclear sector deal asks for a 30% reduction in costs, and that is an agreement between industry and Government. It is important that Wylfa Newydd will come in at a much lower cost than Hinkley; we will learn the lessons of Hinkley. The Hitachi deal involves private money, and Government money from the UK—we do not know how much, and I doubt that the Minister will be able to help us at this stage, because of commercial sensitivity—and, importantly, Japanese agencies and their Government will be supporting it.

[Alan Brown]

I appreciate the hon. Gentleman saying that it is a different model. Does that mean that the costs cannot be compared directly to Hinkley? If the Government are taking on more liabilities and taking a stake in the project, we cannot just say, “Well, it costs less than Hinkley in terms of strike rate,” or whatever.

[Albert Owen]

No, the important thing to remember is that this is proven technology. The reactors that will be used have been produced—four in the world—on time and on budget, and they are effective. That is the difference with the Hinkley model, which has not been used before, and the risk is therefore a lot less. I have been to Japan and seen this technology in place. I know there have been incidents in Japan, but a delegation from Anglesey did go there and see it.

Sadly, this debate is about ideology. It is not about a low-carbon future, but purely the dogma of the SNP, which wants to close down nuclear per se. It is using the Wylfa argument to do that. The SNP is absolutely wrong. I want to see a balanced, diverse energy mix. I want to see the case for new nuclear, new renewables, jobs and skills, and research and development, so that the UK can become a leader in tackling climate change.

In conclusion, I wish hon. Members a happy summer recess. If they really want to find out about Wylfa, they should come to Anglesey. It is a great place to work, as I have indicated, for many people who work in the industry and are associated with the industry. I can assure hon. Members that it is also a great place to live, and it would also be a good place for them to visit. I am proud that Anglesey is ahead of the game in pioneering energy development.

--- Later in debate ---

[Mr Sweeney]

I thank my hon. Friend for that timely intervention. We have to think about this outside of these silos of energy generation. Although we want to decarbonise electricity in the UK, which is a laudable and vital aspiration, if we are to tackle the problem of climate change, it is critical that we recognise that nuclear has to be part of that mix.

Renewables, although we hope that they will eventually substitute all energy generation in the UK, are simply not mature enough, in terms of their reliability, to deliver output that is secure enough. The variability of wind is proving to be problematic. July’s wind energy is 40% lower compared with the same period last year. That is simply not sustainable enough for us to generate reliable energy sources in the UK. We have to look at other technologies, and nuclear presents an opportunity. We are not talking about rebuilding advanced gas-cooled reactors, which was a technology developed in the 1960s—it was advanced for the time, but is simply obsolete today. We are not talking about rebuilding that, with all the legacies of toxicity and problems with waste disposal that were mentioned, although I have to say that the advanced gas-cooled reactor fleet in the UK is a global benchmark for safety. I do not think there are any substantial risks associated with the advanced gas-cooled reactor fleet—it has had a tremendous safety record in the UK, which is a great triumph of British engineering.

We have to approach this with an industrial strategy; that is where we have to grip this. We are talking about shipbuilding and energy generation. All of those things can be linked to deliver a huge industrial and economic benefit for the UK.

[Alan Brown]

The hon. Gentleman is talking about emerging technologies—if new nuclear is an emerging technology. I presume he would welcome investment in carbon capture and storage in Scotland, and investment in tidal. The Scottish Government are not saying no to nuclear and no to new technologies; they are going to welcome wider technologies that are completely renewable and that do not have the potential toxic legacy of nuclear.

[Mr Sweeney]

That is an entirely legitimate point to make. We want to push on all fronts. We want Britain to be leading the world on all fronts. That requires investment in battery technology, where we have a huge disruptive opportunity. Let us push on that front. Let us push on carbon capture and storage. Again, the problem is that we have no rigorous industrial strategy. When I worked at Scottish Enterprise, for example, we watched Longannet drop off a cliff, with no plan for its succession and how it would be managed. As a result of that, we saw the collapse of Hunterston ore terminal in Ayrshire, which has now lost all its customers, because it was the input point for the transportation of coal to the power station.

[Alan Brown]

Longannet collapsed because it was no longer economically viable, due to the amount Longannet had to pay to connect to the grid, which is all based on distance from the population of London. Does the hon. Gentleman accept, therefore, that that is a UK Government failure, not a Scottish Government failure?

[Mr Sweeney]

The issue was a joint problem because we did not embrace the possibility of carbon capture and storage at Longannet. Nor, as the hon. Gentleman mentions, did we address the calculation system and the price charged for generation at Longannet—we have to address this issue on all fronts. Longannet was a failure because, ultimately, the jobs and industrial benefits were lost. As a result, we now have a large brownfield site that will cost a lot of money to clear up, for want of a proper succession plan and a proper strategy.

I urge all Governments to get a grip. I do not lay the blame on any one of them. I am describing the reality that faces the community and our country now, and it is about time we gripped it. I urge people to get together to sort it out. We have a lack of strategy in dealing with succession planning when it comes to closing down our nuclear fleet and also our conventional coal-fired fleet, so we have to address that. We must have a strategy. We have the opportunity.

Emerging technologies, such as the integral fast reactor, which is under development, will address the waste problem in nuclear. As Professor David MacKay, the chief scientist at the former Department of Energy and Climate Change, said, the reactor could supply all the UK’s energy needs for 500 years by consuming the UK’s existing stockpile of waste. That also addresses the decommissioning of the nuclear submarine fleet and the nuclear weapons at Aldermaston. It is a huge cycle that we have to address, and currently we are not gripping it.

We have a huge opportunity to embrace these technologies and use them as a basis for Britain to re-establish a global leadership position in civil nuclear energy that addresses the huge legacy of problems that we have had with nuclear. This is not about saying we can write nuclear off because the technology developed in the 1960s was flawed; it is about saying we are where we are and there are opportunities to utilise nuclear not only to deliver a low-carbon generation capability, but to address toxic waste issues. It is about developing, regenerating and manufacturing an advanced engineering base.

That is why I urge everyone to be open-minded when approaching the issue of new nuclear technologies in the UK and to look at new technologies that can benefit the Scottish and UK economies. That is how we and the trade unions are approaching it, and it is an entirely legitimate and open-minded approach. I am dismayed that the SNP will unconditionally block any potential exploitation of the opportunity in Scotland at Torness or Hunterston. That is a great tragedy for Scotland, a nation that has done so much to be a world leader in civil nuclear technology. I hope the SNP might look at those technologies and change their minds.

--- Later in debate ---

[Claire Perry]

The hon. Gentleman is absolutely right. I will make reference to the nuclear sector deal that invests in the small modular reactor technology that he talked about and that engages with the industry and its supply chain by investing in innovation and skills and by thinking about what we can generate and export in the UK. I also pay tribute to the organisation that he mentioned.

[Alan Brown]

The Minister quoted the figure that 25% of electricity generated in the last 24 hours was from nuclear. In 2016, on average, nuclear supplied 21% of the energy mix, so 25% is not a huge variation and does not demonstrate the massive reliance that would mean we need to have nuclear forever.

[Claire Perry]

The hon. Gentleman and I know, because we form a holy trinity of debating on energy matters with my friend, the hon. Member for Southampton, Test (Dr Whitehead), that we all look forward to that 100% renewable future, but the problems of intermittency and storage will not be solved in the near term. We will not make ideological decisions that will put up costs and restrict energy supply if we do not have to—and we do not have to, because we have one of the best and most diverse energy mixes in the world.

--- Later in debate ---

[Alan Brown]

Thank you again, Mr Robertson, for your chairmanship today.

The hon. Member for Southampton, Test (Dr Whitehead) touched on this—some of what has been presented today is supposition based on information that we have been able to glean from the media, so it could be argued that this debate was premature. However, I wanted to get such supposition out in the public domain and challenge the Government on it.

We should not be learning things from the media, but that is what has been happening in the case of Wylfa. After the first speculation about the Government discussing financial arrangements about the tax on Wylfa, I tabled a parliamentary question. That was in mid-May, but I was not able to get a meaningful response because of commercial confidentiality. Eventually, the Government made a statement on 4 June. So, while we hear about checks and balances and scrutiny, in many ways we are denied that scrutiny because of the cloud of commercial confidentiality.

I welcome the fact that the Minister categorically stated that Wylfa will have the same obligations on accidents and liability as all other nuclear power stations and nuclear power operators, and I hope that proves to be the case in the final arrangements. However, I will contradict myself slightly by saying that I hope we do not get the sign-off on those final arrangements, because of what I have said about attitudes to nuclear. I also remind the Minister that the National Infrastructure Commission’s assessment was that there should only be one new nuclear deal by 2025; again, I look forward to the Government reflecting on that.

I thank all the hon. Members who have taken part in this debate and, like the Minister, I also thank the Clerks for their work and the Hansard reporters—particularly in my case, they have a real hard job and they do it well. It is amazing to pick up a copy of Hansard and suddenly think, “Oh, that makes me look coherent”, so they do a marvellous job. I hope that all other members of staff have a good recess, as well. And again, thanks to everyone who participated in the debate.

Question put and agreed to.

Resolved,

That this House has considered taxpayer liability for safety at the Wylfa Nuclear power project.

Domestic Gas and Electricity (Tariff Cap) Bill

Alan Brown Excerpts

Wednesday 18th July 2018 Commons Chamber

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

It is a pleasure to follow the hon. Member for Weston-super-Mare (John Penrose), and I pay tribute to his work, as well as that of the right hon. Member for Don Valley (Caroline Flint) and my hon. Friend the Member for North Ayrshire and Arran (Patricia Gibson). The hon. Gentleman lost me a wee bit at the end when he compared the amendment in lieu to the nuclear deterrent. Apart from that, I concurred with his comments.

I will be brief, because there seems to be consensus across the House, and will simply outline my thoughts on the Lords amendment and the Government amendment. When Labour originally tabled the Lords amendment, I chose to abstain because, as I said at the time, I remained unconvinced by the arguments. Labour was against a relative cap, so it seemed anomalous to me to introduce a relative measure on a permanent basis. The risks and arguments are the same about the relative aspect—it really does risk increasing the price of standard variable tariffs and there is a further risk that if that came into operation in the absence of an absolute cap, we might see prices creep up again, which would be counter-productive.

The Business, Energy and Industrial Strategy Committee was against the absolute cap when it did its pre-legislative scrutiny. Consumer organisations were against it and even the Competition and Markets Authority has outlined where relative aspects have not worked in other sectors, so why would they work in this situation? That was certainly the concern. There seems to be cross-party agreement that an absolute cap is a temporary measure, so this would effectively be a temporary Bill. Why introduce a permanent measure into the Bill?

One good thing about the Lords getting the amendment through is that it has clearly allowed the Government to rethink and it is clear that the Government have worked with the Opposition to strengthen the Bill. They have agreed to introduce these measures, which basically instruct Ofgem to review the operation of the absolute cap and how it affects customers, including the most vulnerable, and to ensure that the companies take action to protect those customers. I welcome the Government’s amendment and, given the cross-party consensus, it is time to get on with it and get the Bill finished, and for the Government to concentrate on getting cheaper energy through renewables and by scrapping nuclear.

Oral Answers to Questions

Alan Brown Excerpts

Tuesday 17th July 2018 Commons Chamber

[Claire Perry]

Thirty years seems like a long time ago, but this is still the freshest possible knowledge for many people in my hon. Friend’s constituency: 167 men, many from a tight area in the north-east of Scotland, perished in the worst offshore disaster we have ever had in the history of our industry. Nothing will ever bring them back, but it was the findings of the Cullen inquiry that drove the changes that have made the UK a world leader in health and safety, and I want to pay tribute to our colleagues in the Health and Safety Executive, because they continue to focus on safety first when it comes to exploiting the resources in the North sea.

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

To avoid double-charging on battery installations, the Government have pledged to amend the Electricity Act 1989 when parliamentary time permits. Instead of a two-day holiday next week, is that change something that the Government could start to look at?

[Claire Perry]

That will be part of the entire review of how we bring forward the necessary investment in battery technology to support renewable energy intermittency.

Nuclear Sector Deal

Alan Brown Excerpts

Wednesday 11th July 2018 Westminster Hall

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

It is a pleasure to serve under your chairmanship, Mr Owen. I am sure it is your stewardship that has allowed the debate to progress so well. You sit through many debates in Westminster Hall and will have seen how they often have a unifying effect, with everyone saying roughly the same thing and agreeing on the argument, so I am sure as Chair you will welcome there being two sides to the argument on the nuclear sector deal. I commend my hon. Friend the Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry) for providing the counter-arguments.

I commend the hon. Member for Copeland (Trudy Harrison) for securing the debate. I note that she thanked all Members for contributing at the start and end of her speech, but I wonder whether that will hold true for the contributions from my party.

I talked about there being a unifying effect, and there is no doubt that Labour and the Conservatives are singing from the same hymn sheet. In that, from our perspective there is a wee bit of a throwback to Better Together. That, again, is why I am delighted to put forward a different argument.

The hon. Member for Copeland rightly spoke about jobs and skills. I appreciate that highly skilled people work in the industry, and I commend her and all the other constituency MPs for arguing for the value of the jobs brought to their constituencies. It is only right that MPs should fight for jobs in their constituencies, but other people in Parliament have to look at the bigger picture, not just the narrow, localised effect. She spoke about her family history and involvement in the nuclear industry. In fact, my brother-in-law works at a nuclear site in Hunterston in Ayrshire. Again, I appreciate the high level of skills and value of the jobs, but that does not change my outlook on nuclear.

The hon. Lady spoke about the opening of a power station in 1956. I had a shudder, because I thought she had said 1966—it must be World cup fever—so I had to look it up, and I am glad it was not that year. She mentioned Glasgow University, where I did civil engineering. She also mentioned cosmic particles, which is when it starts to go above my pay grade and understanding as a civil engineer. That does illustrate the multitude of skills involved in the nuclear industry.

The hon. Lady spoke about new ways to finance nuclear energy. I suggest that they are just another way of UK plc being completely indebted currently and for future generations. She mentioned that 100,000 workers would be required by 2021, which for me was a sobering statistic. That is not far away, and if 100,000 skilled workers are required by then the Government are already way behind the curve on science, technology, engineering and maths, on university qualifications and on generating workers. Yet again, that illustrates the impact of Brexit, trying to control borders and not letting people in. There will be a massive shortfall, because there is no way to create 100,000 new workers by 2021.

[Trudy Harrison]

It is actually only an extra 13,000 workers. We currently have 87,000 workers in the UK and it will be taken up to 100,000 by 2021.

[Alan Brown]

I thank the hon. Lady for correcting the record. However, even 13,000 jobs by 2021 is still a big ask and a massive challenge for the Government.

The hon. Lady also mentioned the Nuclear Decommissioning Authority and how it should be renamed the nuclear development authority—a sleight of hand picked up by other hon. Members. The NDA is responsible for massive expenditure on the historical legacy and historical folly of past investment in the nuclear industry. We should not look at it as a development opportunity. We should show it for what it is, liable for cleaning up the mess of past investment.

I would suggest the hon. Member for Plymouth, Sutton and Devonport (Luke Pollard) went slightly off topic and concentrated on the military, which is understandable, given his constituency interests. He did not say how the new nuclear submarines and Trident replacement will cost £200 billion, which is another nuclear folly investment that we could do without. I agree with him on Government silos. He said we should beg, steal and borrow from the civil nuclear industry to help the military, but that is not the right approach to nuclear; that is what has got us into the mess we already see. He also said that nuclear submarines cannot be stored indefinitely. I completely agree. That is another mistake that Governments of different colours have made. It is time the Government took action to address that, rather than having subs rusting away.

The hon. Member for Carlisle (John Stevenson) spoke of how Cumbria manages to juggle tourism and the nuclear industry—both civil and military. That pays testament to the beauty of Cumbria and his constituency in being able to do that. He also spoke about a change of role for the NDA, which I have already said I do not agree with.

I agree with everything said by my hon. Friend the Member for Inverness, Nairn, Badenoch and Strathspey—who would have thought? When he sat down, he joked about being popular. We saw hon. Members starting to look away or tune out because they did not agree with him, but I certainly do. My hon. Friend was right to highlight the potential £20 billion of Wylfa investment, the Public Accounts Committee’s recommendations and the bad deal that is Hinkley. He correctly highlighted—let us not shy from this—that the contract for difference strike rate for offshore wind is now £57.50 per MWh, including intermittent costs. That, Mr Owen, is for only 15 years; Hinkley, at £92.50 per MWh, is a 35-year deal, so it is even more than what we are sometimes led to believe. My hon. Friend correctly highlighted Hitachi’s past failures and fines, and the decommissioning costs of Hinkley, and I will make further comments about that.

The hon. Member for Stoke-on-Trent South (Jack Brereton) spoke about the £44 million package for small modular reactors. I admire his optimism, but I suggest it is a bit naive. This unproven technology still needs to be developed, and let us not be kidded that the Government will enter into another blank cheque agreement to supply the SMRs.

The hon. Member for Barrow and Furness (John Woodcock) spoke about the world-class skills at Sellafield, and I agree with him. However, some of those world-class skills are due to the £91 billion cost of decommissioning at Sellafield—there is a legacy for the nuclear industry to be proud of. It is estimated that those decommissioning costs will be £121 billion by 2020, which again illustrates the folly of it all. The hon. Gentleman also mentioned baseload, but even National Grid now says that baseload is an outdated concept based on past assumptions.

The hon. Member for Bolton West (Chris Green) says that we should not rely on foreign countries for our energy supply, but let me ask him who is involved in Hinkley—I am pretty sure that China is classed as a foreign country, although perhaps not one we want to rely on for the security of our energy supply.

The hon. Member for Hartlepool (Mike Hill) spoke about small modular reactors, and he also mentioned carbon capture and storage—I would certainly welcome the development of CCS in his constituency and the wider Teesside area.

Hinkley was the Prime Minister’s first U-turn. When she came to power she hit pause on Hinkley Point C, which I welcomed. I thought, “Here we go. Let’s have a fresh look at this and scrap the project”, but no, there was another U-turn, and the strong and stable Prime Minister showed her will and backbone, caved in and threw money at foreign countries to allow Hinkley to go ahead.

The nuclear sector deal, at £200 million as well as the £32 million kick-start for research and development, is small beer in terms of overall Government expenditure. Hon. Members have said how good that funding is, but it is really just a signal of intent, rather than absolute hard cash. Indeed, compare that funding with the £586 million in sunk costs of three major contracts that have been cancelled at Sellafield since 2012, because the Nuclear Decommissioning Authority found more cost-effective strategies. The real hidden cost of nuclear power is the cost of decommissioning.

A National Audit Office report states that the cost of decommissioning will be £121 billion, and £6 billion is the total expected spend on major projects that are currently in design or under construction at Sellafield. Sellafield Ltd’s spend on major projects in 2017-18 was £483 million. I understand why constituency MPs welcome that spend and the jobs in their constituencies, but taxpayers across the UK are picking up the bill to support those local jobs, and we need to take a closer look at the issue. I will conclude my remarks by urging the Government to end the folly of their nuclear obsession, start reinvesting in renewables, and allow onshore wind and solar to bid for future contract for difference options. That is the future, not nuclear.

Draft Contracts for Difference (Miscellaneous Amendments) Regulations 2018

Alan Brown Excerpts

Wednesday 11th July 2018 General Committees

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

I beg to move,

That the Committee has considered the draft Contracts for Difference (Miscellaneous Amendments) Regulations 2018.

The draft instrument makes three separate changes to the existing contracts for difference regulations. First, it amends the Contracts for Difference (Allocation) Regulations 2014 to establish remote island wind projects as a category of technology that is eligible to take part in the CfD scheme and compete alongside other less established technologies. In doing so, it delivers on a manifesto and clean growth strategy commitment.

Secondly, the regulations remove from the Contracts for Difference (Definition of Eligible Generator) Regulations 2014 the requirement for certain generators to intend to accredit their project under the combined heat and power quality assurance standard. That minor amendment will facilitate the delivery of future CfD allocation rounds and is not otherwise expected to impact on the operation of the CfD scheme.

Thirdly, the regulations update the definition of “waste” in the definition of eligible generator regulations. That ensures that generators are not incentivised to intentionally modify or contaminate biofuels in order to avoid the application of sustainability criteria that would otherwise apply.

We are proposing the legislative changes following a 12-week public consultation earlier this year, during which they received broad support. The CfD scheme is designed to offer long-term price stabilisation to new low-carbon generators, allowing investment to come forward at a lower cost of capital and, therefore, at a lower cost to consumers—something I think we would all welcome.

The scheme typically sees support contracts awarded in a competitive auction process, which ensures that costs to consumers are kept to a minimum. The technologies that are eligible to take part in the CfD scheme are categorised in two distinct groups or pots, as they are known. Pot 1 contains the more mature technologies, such as solar PV, which typically require less support, whereas pot 2 contains the less mature technologies, such as offshore wind, which typically require more support.

The scheme has been successful in bringing forward significant new investment in large-scale renewable generation. The two previous CfD auctions should deliver more than 5 GW of renewable electricity capacity by the early 2020s, helping us to meet our decarbonisation targets. We plan to open the next one in spring next year and are laying the regulations today to give certainty to businesses in advance of that.

I will briefly describe each of the three amendments in turn. The first amendment will make remote island wind projects eligible for pot 2 auctions. The Government confirmed in the clean growth strategy our intention that wind projects on remote islands that are expected directly to benefit local communities would be eligible for the next pot 2 auction.

Those projects have certain unique characteristics that set them apart from wind projects elsewhere in the UK, including higher costs. It is, therefore, appropriate for remote island wind projects to be recognised as a distinct technology within the CfD scheme; one that is subject to its own administrative strike price—a maximum price—and eligible to take part in pot 2 auctions, alongside other less established technologies.

The regulations set out the criteria that projects must satisfy to constitute a remote island wind project for the purposes of the CfD scheme. Those criteria have been carefully selected to ensure that remote island wind projects are sufficiently remote to be subject to more challenging operating conditions, as well as to increased network-related costs.

Allowing remote island projects to compete alongside other less established technologies in pot 2 would allow developers to build on the falling cost of onshore wind and provide a further boost to the supply chain. More than 750 MW of wind projects in the Western Isles, Orkney and Shetland could be eligible for the next auction. If successful, they could deliver long-term benefits to the UK.

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

I welcome those opportunities for the Scottish highlands. Will the Minister give us the timescale for when the next pot 2 auction will open?

[Andrew Griffiths]

Indeed, I will come to that in the course of my speech.

The second amendment will remove the requirement for certain generators to intend to accredit their projects under the combined heat and power quality assurance standard. The CfD scheme currently supports only two types of projects—dedicated biomass and energy from waste—if they are built with combined heat and power. The Contracts for Difference (Definition of Eligible Generator) Regulations 2014 require developers of such projects who want to be eligible to apply for CfDs to intend to accredit their projects under issue 6 of the combined heat and power quality assurance standard, usually referred to as the CHPQA. I have tried to eradicate TLAs—three-letter abbreviations—within the Department, Sir David, but they do creep into the speech. I am sure you will understand.

The Department recently launched and responded to a consultation on options to replace issue 6 of the CHPQA standard. The incoming replacement will include increased efficiency reference values against which future CfD-supported CHP projects will be assessed. The regulations will remove the requirement to intend to accredit from the legislation. Developers will still have to accredit their projects under the CHPQA standard to receive CfD support, but that will instead be specified in the contract terms with which developers have to agree and comply to receive CfD support.

The amendment will not have a practical impact on the CfD scheme’s operation, because in practice a developer’s intention to comply with the CHPQA’s requirements is not capable of being meaningfully tested at this stage in the CfD application process, long before a plant is built.

The hon. Member for Kilmarnock and Loudoun asked for the timescale for the next pot 2 allocation, which is of particular interest to him and his colleagues north of the border. We have put on record, and I am happy to confirm, that the next pot 2 auction will be held in spring 2019. That gives the industry enough time to be aware of the auction, put schemes together and make sufficient proposals. It also shows an urgency to support those remote islands with cheap renewable energy.

The third and final amendment concerns a minor change to the definition of the term “waste” in the Contracts for Difference (Definition of Eligible Generator) Regulations 2014. It is relevant only to technologies that may use waste as a fuel to generate electricity. The amendment simply makes it clear that substances that are deliberately modified or contaminated to try to bring them within the definition of waste will not constitute waste. That prevents the gaming of the system and will ensure that we do not inadvertently encourage generators to modify or contaminate biofuels to avoid the application of sustainability criteria that would otherwise apply.

The legislative changes in the regulations need to be made ahead of the next CfD allocation round, which is planned for spring 2019, so that developers have certainty as to who will be eligible to take part and on what basis. Subject to the will of Parliament, the regulations will come into force on the day after they are made. I commend them to the Committee.

--- Later in debate ---

[Alan Brown]

It is a pleasure to serve under your chairmanship, Sir David. We certainly welcome the changes, particularly to remote island wind, which the Scottish National party has been calling for for a while. I am pleased that the Government have listened and are taking action on that. If I were churlish, I would say that it is not before time, but anyone who knows me knows that I am not churlish, so I will not complain about the timeframe.

The Minister explained how the evolution of technologies has brought down the costs of capital, and I completely agree. It has been great to see the cost of onshore and offshore wind decrease dramatically, but we have to look at that in the context of Government policies on nuclear and its astronomical costs. In a Westminster Hall debate this morning, I highlighted that we are stuck with £120 billion of decommissioning costs, of which £91 billion are at Sellafield. We have got the Hinkley Point C project, which has a strike price of £92.50 per megawatt-hour for 35 years. That compares with a strike price of £57.50 for a 15-year CfD at the last offshore auction. It is clear that renewables are much more cost-effective and are completely green, rather than just reducing carbon, as nuclear does.

The hon. Member for Southampton, Test certainly worked his way around his assessment of the remote island wind definition. I am not too fussed about that, so long as the Scottish highlands get a bite of the cherry. That is all I care about, and I look forward to that. I certainly do not have any concerns about state aid. If Hinkley can pass EU state aid rules, I am sure the islands can. In the long run, it would be good to see Government assistance on and investment in additional interconnector cables between the remote islands and the mainland, because that would free up additional opportunities and help support the mainland national grid.

I have one question for the Minister. At Scottish questions this morning, I asked about onshore wind in Scotland being able to bid in future auctions. The response I got was that there would be an announcement soon. Can he provide some clarity? I welcome the changes and look forward to the remote islands benefiting.

--- Later in debate ---

[Andrew Griffiths]

I thank the hon. Gentleman not only for his comments, but for his wholehearted support for these measures.

He raised some important questions. He asked whether we will need state aid approval for remote islands. I am the Minister responsible for competition policy in the Department for Business, Energy and Industrial Strategy, and I confirm that we have state aid approval for the inclusion of remote island wind as defined using this criteria. He asked whether the Commission had granted that. It has granted that state aid approval; that was published by the Commission in February of this year. I hope that reassures the hon. Gentleman on any concerns he has about the approval process for state aid.

The hon. Gentleman also asked about the definition of remote islands and whether that excludes English islands. As he will know—I am sure he has seen the map in the consultation document published in December—a small number of remote islands off the coast of England and Wales could satisfy the criteria, but we do not envisage at this stage more projects coming forward. In practice, the only planned projects that we are currently aware of that might meet the definition of remote island wind are in Orkney, Shetland and the Western Isles.

The hon. Gentleman alluded to pot 1 and onshore wind. No decisions have been taken on running another allocation round for pot 1 technologies at present.

[Alan Brown]

The Minister is saying that no decision has been made about pot 1 future auctions. Does that mean that the response I got at Scottish questions today about possible onshore wind in Scotland being eligible for future auctions was not correct?

[Andrew Griffiths]

I am not saying that at all; I am saying that I am not in a position at this stage to give the hon. Member for Kilmarnock and Loudoun the reassurances he seeks. I absolutely understand why he asked the question, and his aspirations in relation to those projects, but I am unable to give him the solution he seeks at this present time.

Successful remote island wind projects will require the construction of new transmission links. The point that the hon. Member for Kilmarnock and Loudoun makes about interconnectors is a salient one. It is one that the Department is well aware of and it is looking at. Transmission links that wave and tidal projects would also be able to use are important. Establishing new transmission routes could therefore help unlock the potential of other innovative new technologies. The Government clearly have to be the catalyst to bring on those disruptive technologies.

Construction Sector Deal

Alan Brown Excerpts

Thursday 5th July 2018 Commons Chamber

[Richard Harrington]

The review by my right hon. Friend the Member for West Dorset (Sir Oliver Letwin) is considering those points, and I am sure that we will be delighted to report the review’s progress to the House.

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

As a chartered civil engineer, I welcome the principle of the construction sector deal. On protecting the supply chain, the Government must deal with two key issues: the elimination of cash retentions; and, as the Minister knows from his previous role, the effect that multi-employer pensions are having on subcontractors, particularly plumbers. Will the Minister review the Multi-employer Pension Schemes Bill—my private Member’s Bill—and have a word with the Under-Secretary of State for Work and Pensions, the hon. Member for Hexham (Guy Opperman), to ask him to take on board the measures in my Bill?

[Richard Harrington]

We are currently considering the entire policy on retentions, as I am sure that the hon. Gentleman knows. We are reviewing the responses to our consultation and considering the options for future policy.