British Steel

Alex Cunningham Excerpts

Tuesday 21st May 2019 Commons Chamber

[Andrew Stephenson]

The closure of any steel blast furnace or steel mill would have a significant impact on the locality. All the sites across the United Kingdom employ large numbers of people, which is why we are very keen to support all sites across the country. However, as I have said, the Government are willing to take action and intervene where we can. We supplied the £120 million bridging facility to British Steel recently, which I hope shows the level of commitment from this Government. We will work with all companies across the sector to support them, but any support we provide to any business has to be judged against British and European law.

[Alex Cunningham (Stockton North) (Lab)]

As my hon. Friend the Member for Redcar (Anna Turley) said, the Tory Government have form in failing to support this steel industry. Ministers turned their backs on Teesside in particular when we lost the country’s most efficient blast furnace, leaving thousands of people out of work. Now, more Teesside steel workers face an uncertain future. We need Ministers to act to save those jobs that we have left, but also to accelerate the investment on Teesside to create the well-paid jobs that have been promised but not delivered. When will we get these jobs?

[Andrew Stephenson]

The Government are working to support the sector. As I have just mentioned, a £120 million bridging facility has been supplied to British Steel to support its EU emissions trading system compliance, which demonstrates that graphically. In the past few weeks, we have been working with the sector on high energy costs, we are working with the sector to reduce its carbon emissions and we are working across the board to support all regions of the United Kingdom.

Nissan in Sunderland

Alex Cunningham Excerpts

Monday 4th February 2019 Commons Chamber

[Greg Clark]

The hon. Gentleman will know that the automotive sector deal, in which Nissan was an important partner, has a significant programme of investment in the skills and capabilities of the supply chain. In fact, the increase in opportunities for the supply chain domestically is one of the principal components of the sector deal that was so widely welcomed by the automotive industry.

[Alex Cunningham (Stockton North) (Lab)]

Unemployment in my constituency is double the national average, and there are hundreds of people in the constituency who are employed at Nissan and at supply chain companies. These supply chain companies also provide goods to other car makers and across the EU. What is the Minister going to do about a customs union that will protect those jobs in the longer term?

[Greg Clark]

To protect those jobs in the longer term, we need to secure our ability to trade without tariffs and without impediment across the whole of the rest of Europe. As I have stated very clearly to the House, it is my view that the House needs to come to a decision within the next few weeks. We need to make compromises with each other to be able to provide that certainty and security to important employers.

Former Steelworks Site in Redcar

Alex Cunningham Excerpts

Wednesday 14th November 2018 Westminster Hall

[Anna Turley]

I really appreciate my hon. Friend’s intervention. He makes his case incredibly powerfully. In so many communities around our country—in both England and Scotland—we have seen the devastation that can happen when industry declines and nothing replaces it. The site is of such fundamental importance to our local economy, and we cannot just allow it to smoulder. We cannot allow those jobs and skills to be lost. The next generation must not feel that they have to move away. We have got to accelerate the progress today.

[Alex Cunningham (Stockton North) (Lab)]

I congratulate my hon. Friend on securing this debate. Following what my hon. Friend the Member for Coatbridge, Chryston and Bellshill (Hugh Gaffney) has said, lots of Scots came to Teesside from Lanarkshire—my home county—to work in the steel industry. We are talking about their future too.

[Anna Turley]

My hon. Friend is absolutely right. Teesside is proud of being somewhere that workers came to from across the country—Scotland, Durham and even the south-west of England—to build the infant Hercules. We are a proud place with people from across the country, who came together to find employment. We want to be a place that attracts people from around the country and the world.

We have used the resources locally that the Government gave us to develop business cases and our skills to drive our economic recovery in the aftermath of the closure. The SSI Task Force—a collaborative effort—has created more than 2,000 jobs, supported 336 business start-ups and overseen the delivery of more than 17,000 training courses to support redundant SSI workers back into employment. Working with private sector partners such as MGT Teesside, award-winning employment and training hubs have ensured that local people are able to benefit from the jobs created by big new investment projects. The Grangetown training and employment hub in my constituency, jointly supported by Future Regeneration of Grangetown, the council and MGT, has already made great progress. Some 2,500 residents have been registered, 1,700 have undertaken training programmes, and 610 have been supported into work, 470 of whom were previously unemployed. A similar scheme in Skinningrove, in the constituency of the hon. Member for Middlesbrough South and East Cleveland (Mr Clarke), has been supporting employees made redundant from the Boulby potash mine, providing access to training, jobs fairs and support for those who want to set up their own businesses.

Local people are taking up the entrepreneurial spirit and setting up on their own. Independent shops and bars are starting to fill some of the empty units on our high streets, and some are run by former steelworkers. Our high streets still need support from things such as business rates, but the energy of local people is already driving their revival. Support from the local council to improve shop fronts, bring empty buildings back into use, and improve and expand accommodation on our industrial estates is also helping.

Big investors are also showing confidence in our area, which speaks well for the potential of the SSI site. MGT is investing £650 million in its new biomass power plant at Teesport. Just down the road in Whitby, in the constituency of the right hon. Member for Scarborough and Whitby (Mr Goodwill), Sirius Minerals is investing $4.2 billion in its polyhalite mine, with the material transported to an processed at Wilton International in my constituency. PD Ports and Redcar Bulk Terminal suffered significantly after the loss of the steelworks contracts. In just three years, they have reversed the damage, and have continued to build their businesses, bringing in millions of pounds of investment. They have not waited around or prevaricated; they have got on with it, showing the resilience and determination of our area.

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[Mr Simon Clarke]

I absolutely will. It is hugely important that this work draws together the six figures who make up the board. Ben provides exemplary leadership in his role as the first directly elected Mayor of the area, but he would be the first to say that it would be impossible to achieve anything without buy-in from Hartlepool, Darlington, Stockton, Redcar and Cleveland, and Middlesbrough. It is a team effort. The project transcends party politics. It must; otherwise it will fail.

The hon. Gentleman interrupted my thread about Ben’s role. Let me pick it up by saying that Ben led the Tees Valley’s first trade mission to the far east earlier this year. He led a delegation of local representatives in discussions with the three Thai banks that hold an interest in the former SSI land on the development corporation site. An agreement in principle was reached, which expires in February 2019, to transfer that land and its assets to the local public sector. In parallel, compulsory purchase proceedings have begun, to ensure that the land is back under local control as soon as possible. Separately, there is good reason to believe that a good deal to release the half of the site that is owned by Tata can be achieved in short order.

[Alex Cunningham]

I just wonder about the potential for agreement. Surely the Government should be working for an agreement with the Thai banks, rather than taking the compulsory purchase route which, by the time the lawyers get involved, could take years.

[Mr Clarke]

The Government have put themselves four-square behind the initiative to release that land. When Ben went to Thailand to meet the banks, the full support of the British embassy was thrown behind him. I know that Ben is genuinely appreciative of the massive efforts made by the Foreign and Commonwealth Office, as well as the Department for Business, Energy and Industrial Strategy, to make certain that we communicate to the Thai Government—as well as to the banks—that this issue is of material interest to Her Majesty’s Government, and that there is an international diplomatic aspect to the need to release the land as quickly as possible.

None of this work is easy. The hon. Member for Stockton North is right that some of it will take years; there is no point in sugar-coating that. None of this lends itself to quick fixes, but critical progress is being made. We are much further forward from the ashes of October 2015 than we were in 2017 or 2016, and as a result, Ben’s work has been widely welcomed in our community. In September, he was voted “most inspiring person” by Tees Valley business leaders, and my constituents recognise that he is doing his utmost.

There is an upsurge of quiet positivity on Teesside, backed by analysis from the Bank of England showing that the number of unemployed people in the north-east is down by 18,000 on a year ago, and that our region accounted for almost a quarter of the entire reduction in UK unemployment over the past 12 months. The devolution of skills strategy to the north-east, and the £24 million that has been announced for our local schools through Opportunity North East—which aims to make the transition from primary to secondary education better and more effective, working in the interests of local young people—will add to that positivity, and I stand behind those announcements. As a proud Teessider, I recognise that the South Tees Development Corporation site is a once-in-a-lifetime opportunity for our area, and I am determined that we should seize it.

Here we come to the crux of the matter. I am a realist about elective politics. At present, a gulf exists between the Conservative and Labour parties about our values, our economic strategy and our role in the world; but we have a responsibility to work together, as the hon. Member for Redcar said. It is, of course, the right and the responsibility of the Opposition to hold the Government to account in a spirit of constructive criticism, but we must avoid crossing the line into casting gloom or negativity over our area’s prospects. That is a fine judgment call, but I have the sense that whatever the Government offer is not enough, and nothing Ben achieves is right. That is not because Opposition Members have a better alternative; it is, I fear, because Ben and the Government are Conservatives. We have to push back against that. If the choice is between anger and hope, I am clear that anger will not triumph over the hope of new beginnings and a fresh start for our area. We must not dampen the public’s enthusiasm, and we must not spook investors about the economic prospects of our area.

Following the Budget, we heard a powerful intervention from Steve Gibson—the man who has been a beacon of hope for Teessiders since the 1980s—calling for an end to the downplaying of what has been achieved.

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[Alex Cunningham (Stockton North) (Lab)]

I congratulate my hon. Friend the Member for Redcar (Anna Turley) on securing the debate and for talking up our area—the positive things that are happening in our communities—but also for laying out the greater challenges that it faces. We are here to discuss the former steelworks site, where many of my constituents spent their working life before SSI walked out on our community and the Government failed to act to save steelmaking on Teesside. Local people still ask, “Why can Governments bail out banks for billions of pounds, and bail out other industries, including the steel industry in other parts of the country, but when it came to intervening to save that site in Teesside, they just walked away?”

Today’s debate is as relevant to my constituents as it was three years ago, when many of them lost their jobs virtually overnight. It is relevant because the latest statistics, published yesterday, show an increase in unemployment in my constituency. Many of my constituents look to the Government to act, but it appears that the Government have just been putting on an act. A procession of Ministers has visited Teesside to talk the area up, but talk is all we have had. When those Ministers came to the area and made their various announcements, they did not invite Redcar’s local Member of Parliament to join them. We all want to work together, yet we constantly find ourselves excluded. There have been dozens of press releases from the Mayor of the Tees Valley promising investment, but little if any has been delivered to date.

When MPs speak up to ask questions about what is happening and to demand answers, they are accused of talking the area down, putting investment in jeopardy and somehow working against those who are trying to solve the problems that we all face. I am sick and tired of that. None of us went into politics to talk our area down; we went into politics to work with whoever can deliver for our people. If that were not the case—as my hon. Friend the Member for Stockton South (Dr Williams), my near neighbour, has already said—why on earth would our local authorities, which have worked so well together for donkey’s years, press for a devolution deal with a Government they know to have stripped tens of millions of pounds from our local council services? It was because they wanted to achieve something. They wanted the crumbs that were coming from the Government’s table, because they would make that little bit of difference on Teesside.

It is, however, a fact that there has been a real lack of progress in bringing jobs and investment to the site and, for that matter, to other parts of the Tees Valley. Yes, there are legal issues to be resolved and land ownership to be sorted out, but it has been three years since the last steel was produced and not a single long-term job has been created on the site.

My real worry is not just that the Government are failing to deliver for the site, but that the local authorities, in the form of the combined authority and the metro Mayor, will never see the promise of the heavy money to develop the site fulfilled, because that is billions of pounds. Yes, there have been plenty of announcements and repeat announcements, but we need the Government to take real action, resolving the legal problems. We hear that progress is being made and that things are being done behind closed doors. We do not know the detail, but I know that it is not creating jobs.

More than ever, in the face of the uncertainty that Brexit brings, Teesside industry needs assurance and confidence in the UK. The hon. Member for Middlesbrough South and East Cleveland (Mr Clarke) talked about the fact that I chair the all-party parliamentary group on carbon capture and storage, and the importance of a project on that. I also chair the APPG on energy intensive industries. Those in industry on Teesside are beyond nervous about Brexit and what it means for them.

As a result of the proposed changes to the emissions trading scheme and escalating energy costs, we are facing a perfect storm that could land our big industries carbon tax bills running into millions, and cost hundreds more jobs on Teesside and thousands more across the country. We need an environment that can attract investors to the region, but daily news releases promising much but delivering nothing will not do that.

That includes a future for our Durham Tees Valley airport—a future that is more in doubt each day. That airport, and connectivity with London and the rest of the country, is crucial in attracting investors to the Redcar site and to elsewhere on Teesside. The Mayor promised to buy the airport, but we know that there is no more credibility to that plan than to his plan to achieve protected food status for the parmo, which doctors describe as a heart attack on a plate.

[Mr Clarke]

On the point about the parmo, I do not believe in the nanny state telling us what we should and should not eat. I love the parmo, and I will be the first to stand up for it. Everything in moderation.

On the airport, a non-disclosure agreement has been signed with Peel, the operators. I really do not think it is helpful or right to prejudice the status of those talks by dismissing the plan as something that will not happen. Precisely that attitude, frankly, led to Ben winning the mayoralty in the first place.

[Alex Cunningham]

I am sure that the hon. Gentleman is blessed, like me, with a slim figure and a fast metabolism, and will be able to cope with the odd parmo. We have a duty to be held accountable and to hold others accountable for what they have said they will do, and we have to press on whether or not negotiations are going on elsewhere. The plans to develop the airport are shrouded in secrecy. The parties involved are bound by confidentiality agreements, and those of us who are asking questions on behalf of the people we represent are getting very limited answers.

We know some things though. We know that the £5 million grant to create an access road to the south side of the airport to allow further development has been allowed to lapse. Why? In reply to a letter from me, the chairman of Peel Group, which owns 90% of the airport, said that his company has invested £40 million in the loss-making airport in recent years. He does not confirm that the airport will close in 2021 when the current agreements run out, but I fear that that is exactly what is on the cards if the Mayor fails to sort this out.

The final sentence of Robert Hough’s letter does tell a story. He apologies for not being able to be more helpful, and adds:

“We hope that we will receive support from the Combined Authority to take the airport forward in the most sensible and appropriate way, but the ball is not in our court.”

That means that the ball is in the Mayor’s court—the man who blocked a grant to the airport to attract more holiday flights just last year. I have every respect for the Minister, having worked opposite him when he was pensions Minister, and I am sure he will confirm that the Government are not going to bail the Mayor out and use public money to buy the airport. Who is going to buy an airport that continues to lose millions? I certainly do not want Tees Valley council tax payers to pick up that bill. It is time the secrecy was ended and we started to get answers on how the Mayor is going to buy the airport.

Secrecy, however, is the order of the day for this Government. A Public Accounts Committee report published yesterday said that “excessive secrecy” was standing in the way of, among others, the chemical industry preparing for Brexit. There appear to be plenty of secrets around the SSI site too. Budgets have come and gone, with millions of pounds allocated to the South Tees Development Corporation, but we know that most of that was just to cover the ongoing costs of keeping the site safe. Some of the delegated powers, such as devolution of the further education budget, have been delivered, fulfilling part of the agreement made with the combined authority long before we even had a Mayor. I now appeal to the Minister to provide the kind of clarity that we all need, but particularly the clarity needed by the combined authority to make the real decisions that deliver investment and jobs.

Sadly, the upshot of failing to do that could be industry looking elsewhere—we have heard some illustrations of that this morning—rather than waiting for a suitable site that does not appear to be coming to fruition. We have been told that more than 100 investors have declared an interest in the site, but some of that interest is already waning over false promises and a clear lack vision. We do not need another news release. We need the Government to take real, decisive action now.

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[Mr Goodwill]

Absolutely. The steel industry has a future in the UK, but it is in specialist products, such as those produced in Skinningrove and Hartlepool. Sadly, we can no longer compete with the Koreans and Chinese in the production of bulk steel. The steel industry was based on Teesside because of the ironstone and coal mines up the coast. Now that we no longer have that resource on our doorstep, it is more difficult to be competitive in the steel industry, but we have expertise in specialist steels, stainless steels and specialist products, which I believe have a great future. Indeed, we have a strong automotive industry in this country to consume the steel that is being produced. I do think that there is a future for steel in the UK, but sadly it is no longer on the British Steel site that I visited with Peter Lilley, the then Secretary of State for Trade.

I mentioned opportunities on the site. The people of Tees Valley have put their trust in Ben Houchen as Mayor because they have memories of feeling let down in the past. They have opted for optimism, rather than for the negativity that was part of the other side’s campaign. I am very pleased that Ben is working collaboratively with local authorities and with the industry to deliver in the area, as my hon. Friend the Member for Middlesbrough South and East Cleveland (Mr Clarke) recounted.

I must mention the Sirius mining project, which will transform my constituency. There are already 600 people working on the Woodsmith mine site, boring a mile down the shaft to the polyhalite—an amazing resource that will make the UK a global supplier of fertilisers once again. The Boulby mine is coming to the end of its natural life and has already ceased production of muriate of potash, but it is getting into polyhalite; indeed, I have bought some to use on my own farm. There are opportunities.

[Alex Cunningham]

As the Minister is in the room, it is important to acknowledge that we have only two fertiliser plants in the whole UK, one of which is in Stockton North, my constituency. Both plants are run by CF Fertilisers, and both are extremely worried by the Government’s proposals for a post-Brexit carbon tax, which they believe could ruin their business. Will the right hon. Gentleman join me in calling on the Minister for clarity on the matter, so that the existing fertiliser plants can continue to have a future?

[Mr Goodwill]

Yes. I have visited the Billingham plant, and I know that ammonium nitrate is a very important plant nutrient. The development of shale gas is key. Ammonium nitrate is basically made from air and gas, so without a good, cheap and reliable source of gas, its production is under threat. The sooner we get on with fracking for that gas so that we have our own domestic supply, the better it will be for all the energy-intensive industries on Teesside, not least the fertiliser industry.

The potash site will transform the area by providing jobs, and not only to people in Whitby. Of those who are already working at the Boulby mine, about half are from the constituency of my hon. Friend the Member for Middlesbrough South and East Cleveland, about a quarter are from the constituency of the hon. Member for Redcar, and about a quarter are from my own. We already have a lot of people working in the mining industry, and it is important that they be redeployed as Boulby comes to the end of its natural life. The 23-mile tunnel from Whitby to Teesport is a phenomenal project that people around the world are observing with awe.

We need the Government to get behind the project. The hon. Member for Redcar mentioned Treasury guarantees; this is a very big project for a very small start-up company that will be an FTSE 200 company on the day it opens production. We need that support, because it would be a great shame to see other mining companies from around the world coming in and capitalising on the project after all the work that has gone into it. I hope that my hon. Friend the Minister will pass those thoughts on to the Treasury, because we need that backing. We are talking about 1,000 full-time jobs in the mining industry for at least 100 years. This is a product that people will always need; as long as people are eating, they will need nitrogen, phosphate and potash. The Woodsmith mine is a great source of potash.

[Alex Cunningham]

As a farmer, the right hon. Gentleman knows all about fertilisers. May I seek clarity on what he said about workers at the Boulby potash mine transferring to the new mine? Is something happening at Boulby that we do not know about?

[Mr Goodwill]

Boulby has been losing staff over the past few years and its production is being scaled down. It is already approaching the end of the muriate of potash seam—the potassium chloride seam—and is now in the lower seam of polyhalite, which is what the Woodsmith mine will produce. All mines have a natural life.

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[Marion Fellows (Motherwell and Wishaw) (SNP)]

It is a pleasure to serve under your chairmanship, Mrs Moon, and I congratulate the hon. Member for Redcar (Anna Turley) on securing this important debate.

I want to speak about my constituency’s experience of a steel plant closing down, because there are valuable lessons to be learned from it. The Ravenscraig integrated steel mill closed 26 years ago in 1992. That was before devolution, so there was no Scottish Government and all industrial matters were dealt with by the UK Government. In the mill’s last two years, 4,400 people—mainly men—were laid off. Unemployment stood at 15% shortly after the closure and is still higher than average. The constituency still does not have the same number of highly paid and highly skilled jobs that it once had. The former MP for Motherwell and Wishaw, Frank Roy, did a lot of work to try to re-energise and rework the Ravenscraig site and led on a proposal to build a new town on it, but that has never come to pass because of recessionary pressures and local resistance.

Ravenscraig is slap bang in the middle of my constituency, between Motherwell and Wishaw town centres. The SNP Scottish Government made it a national priority in 2007, and lots of money has been poured in from various funds and resources. Ravenscraig Ltd was set up as a joint venture between Tata, Scottish Enterprise and Wilson Bowden when the plant closed. The site now has a new college, a new regional sports centre, less than 1,000 new homes—although more are being built—a pub, a hotel and a building research centre. There are proposals for more new homes and for a civic park. In 26 years, we have not come a terribly long way, given that it is a 1,400 acre site, most of which is covered by roads that do not necessarily lead anywhere yet.

I do not want to sound too pessimistic—as the hon. Member for Middlesbrough South and East Cleveland (Mr Clarke) said, we need to have hope—but when something as big as the Ravenscraig integrated steel mill closes, that is a hammer blow to a community. Not much help, if any, was given by the then Conservative Government; I hope that the Redcar site does not suffer the same fate. North Lanarkshire Council—of which I was recently a member, as the hon. Member for Coatbridge, Chryston and Bellshill (Hugh Gaffney) still is—is spending quite a lot of money on trying to make the site viable.

As the council’s new chief executive, Des Murray, says, it has always been recognised that there needs to be a redevelopment site at Ravenscraig, because it is of symbolic strategic significance, but we cannot live on symbols. The hon. Member for Redcar talked about Redcar as an iconic site, as was Ravenscraig, but people cannot live on such sites. People do not get jobs just because sites are iconic. There needs to be real and continuous development.

I do not want to paint too gloomy a picture, because there are improvements. The new Ravenscraig regional sports centre has hosted international and national events to great success, and the new houses there are lovely. The site building is now creeping forward, and in April there was another planning application put in for a more modified, and probably more likely to be built, new area in Ravenscraig, which now includes industrial and retail centres as well as two primary schools and development of the civic park. This is all good news, but I have to warn people in Redcar that it takes a long time and does not necessarily lead to the kind of jobs that have been lost.

[Alex Cunningham]

The hon. Lady is giving us a good illustration of why we need big, fast decisions and investment now. I am sure she will agree that Redcar cannot wait 20 years for the Tees valley to secure the good, well-paid jobs that we need. We do not want service jobs; we want good, well-paid jobs like we have had in the past—that needs decisions now.

[Marion Fellows]

The hon. Gentleman is absolutely right. I do not have a solution; I can only lay out what has happened at the Ravenscraig site. People have been doing their best, but the recession in 2007 really bit into developments there. When things get delayed, they do not always come back again, which is a real worry for everyone.

I give credit to North Lanarkshire Council, as I always do when it does things right, for continuing to work on the site and for trying to get more investment into it, but I fear that, with Brexit apparently here, this is going to be an ever-growing challenge to local agencies and authorities. Motherwell and Wishaw were iconic not just for Ravenscraig; there were always steelworks in my constituency. The fact that the Scottish Government managed to save what is now Liberty Steel—the DL works—and, in a neighbouring constituency, Clydebridge, is testament to the work that they have done and are trying to do.

We need steel. When I was first elected to Parliament, the all-party parliamentary group on steel and metal related industries was the very first one that I joined. I fought hard to save the steel industry in my constituency, and that was achieved. Ravenscraig does not make steel—it simply rolls plate—but it is still there. That is thanks to the work of the Scottish Government, who were determined to save that site and as many jobs as possible—not only the workers, but, more importantly, the apprentices who were working on the site at the time. It will be interesting to hear whether the Minister can give the same commitment to the industry in England and Wales. There are no longer steelworks in Redcar, but we need these iconic industries at our backs if we are to move forward as a group of countries.

I pay tribute to the hon. Member for Middlesbrough South and East Cleveland for saying that everyone has to work together, which I think everyone realises. It is not a party political issue when something like this happens, but things do move ahead on party political lines. We have to be cognisant of that fact, and people have to keep putting pressure on the Government to make decisions and to treat the area favourably, even if it is not recognised as a really good area for their party.

I go back to 1992, when very little was done by the central Government to support Ravenscraig and the workers who lost their jobs. I moved into the area shortly afterwards, and all I could hear was tales of when the steelworks used to be open and how Motherwell and Wishaw were such thriving, wonderful places. It took a long time for the towns to recover. They still have not recovered totally, because the jobs that people do now are completely different. I think that is what is found in Redcar, too.

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[Richard Harrington]

I thank the hon. Lady for that intervention.

I have visited the site, although not recently—I was 17 at the time. I was brought up in Leeds and went on a school trip to visit the Neddy—the National Economic Development Council—in Newcastle, the steel site and the Wilton ICI chemical works nearby. I have never forgotten the scale of it.

I whizzed past the site in my current job, when speaking at a steel conference just next to it in the constituency of the hon. Member for Redcar. A lot of Members of Parliament have trooped up there, as have a lot of Ministers. There has been talk of hollow words, but it is much better that there is a general awareness throughout the Government. The Mayor and other parties involved with the development corporation are regular visitors to the Treasury and other parts of Government, and so they should be. It is part of our democratic system, and we all co-ordinate together; I hope everyone realises that my office is very much part of that. I have certainly had nothing on my desk to do with this project that has been gratuitously turned down, ignored or not taken seriously.

I have been scrawling furiously during the debate to try to prepare to answer the points that have been made. I will try not to go over the history again, as it has been well covered by other contributors. Perhaps for the sake of Hansard it would be convenient if I did, but I think it has been said very well.

The South Tees Site Company is funded by a grant of £118 million, which was granted in the autumn Budget 2017 and includes £48.9 million for improving the site. The point was made—eloquently—that a lot of that money had to be spent, but it is still taxpayers’ money. It did have to be spent, and I hope that it is the first of very much more to come in the future.

There has been talk of different projects and implications that they have been turned down by the Government. My personal experience of doing this job is that I have spoken expensively—I mean extensively—to Liberty Steel. In its case, both those words might be true! I have spoken to it to get a project, which is still very much in outline. It has not been rejected. There has been nothing put in front of us.

It might have been the hon. Member for Redcar, or another speaker, who said that this project is going to Scotland. That is not the case. I am in regular talks with the company and I have been to its offices. I have met the chairman and other officials, several times, with our own experts, to try to get the project to a state where it can be looked at as a serious proposal. This is not a criticism, but it is not yet at that stage. I hope it will be. We meet regularly, and the company knows that the door is open.

As far as INEOS is concerned, its decision was taken for commercial reasons. As has been mentioned, I think it was more of a question of not wanting a brownfield site and a start from scratch, rather than anything to do with this site, the Government saying no or anything like that.

[Alex Cunningham]

I think the Minister will agree that the major impediment in our way—which, if resolved, could sweep away all that doubt—is the issue of land ownership and the associated legal agreements. When is that going to be resolved?

[Richard Harrington]

All in good time. I cannot give the hon. Gentleman a date now, but I will come to that shortly. I will make progress because I want to leave time for the hon. Member for Redcar to sum up.

The £14 million granted by the autumn Budget and the special economic area status for the site are both important. They came about because all those different Departments—including the Ministry of Housing, Communities and Local Government, and the Treasury—are working with South Tees Site Company, the development corporation and the combined authority. We have worked together on the proposals and will continue to do so. The 1,500 jobs quoted are a first step, but I know they are nothing compared to the number of jobs that were lost when SSI went into liquidation and struggled from crisis to crisis.

It is very easy to blame one Government and not the other or to say that the Government could have intervened by putting in a load of money to keep things going, but I have seen the consequences of that. I have seen places in the valleys in Wales where hundreds of millions—if not billions—of pounds were spent on keeping businesses open, and I saw a failed industrial policy in the north of England, where I was brought up. That does not mean that Government do not take part in industry—we are spending more money on research and development than ever before.

I really believe that the industrial strategy, in partnership with businesses, is the future. The reason why there is not a steel sector deal—as the shadow Minister, the hon. Member for Sheffield, Brightside and Hillsborough (Gill Furniss) mentioned—is that industry itself has not come up with its side of the proposals. I am working on this, meeting industry regularly, and am still hopeful, but that is work that must be done in partnership.

The Government responded immediately with support for the site when the closure took place, including a sum of £30 million that was ring-fenced for the statutory redundancy payments. The SSI taskforce, under the leadership of Amanda Skelton, took a leading role and deserves a lot of credit. The hon. Member for Redcar was a member of the taskforce and did a great job.

The clichés about people working together are predominantly true in this case; spats and disagreements come and go. I think it is fair to say that we cannot recreate what was there before—time has moved on. My right hon. Friend the Member for Scarborough and Whitby (Mr Goodwill) made the point about how steel has changed and certain commodity products cannot compete with much lower costs. Of the factors for the industry growing up there—iron ore, steel and water—only one remains. That does not mean that the site does not have a fantastic future—I really think it does. I am delighted that the hon. Member for Redcar quoted Lord Heseltine and former Chancellor George Osborne in different parts of her speech.

The Scottish National party spokesperson, the hon. Member for Motherwell, made a very—

Retail Sector

Alex Cunningham Excerpts

Wednesday 6th June 2018 Commons Chamber

[Rebecca Long Bailey]

I completely agree, and now I will begin the substantive part of my comments, if I may.

The retail sector is undergoing a period of transformative change that will impact millions of workers across the UK. As has been played out in the press over the last few months, the sector is experiencing huge challenges, with almost silence from the Government, sadly. We have seen an onslaught of store changes; big-name chains that have been the stalwart of our town centres and high streets for years have collapsed and gone into administration.

[Alex Cunningham (Stockton North) (Lab)]

My home town of Stockton won the rising star award in the British high street awards, sponsored, ironically, by Marks & Spencer, which is now abandoning our town after taking profits from our people for over a century. We believe however that our town has got a future, but does my hon. Friend agree that firms like Marks & Spencer should consider the future prospects of towns properly, and show a bit of loyalty to their loyal customers instead of taking their profits and running off to out-of-town shopping centres?

[Rebecca Long Bailey]

I agree with my hon. Friend, but the issue is twofold. It is not simply about imposing obligations on businesses; the Government have a duty to provide a fertile business environment in which large and small businesses can grow and provide a positive contribution to their communities.

Toys R Us and Maplin collapsed on the same day in February, putting 5,500 jobs at risk in one day. Card Factory, Moss Bros, Laura Ashley, Carpetright and Mothercare have all issued profit warnings this year, and some have entered into company voluntary arrangements, with hundreds of store closures expected. In April we heard news of a possible merger between Asda and Sainsbury’s; a couple of weeks ago the one and only Marks & Spencer announced it will be closing 14 branches this year and 100 stores by 2022; and just this week there were reports that House of Fraser is on the brink of collapse and attempting to negotiate a CVA. That list is not exhaustive but it clearly demonstrates the scale of the challenge faced by the industry.

I am sure many Members across the House will at one point or another have worked in the retail sector; it is many people’s first experience of the working world, as it was for me. My first job was as an assistant at a pawn shop. I must clarify that it was a pawn, not a porn, shop—at a meeting a few years ago I said I had worked in a pawn shop and one lady in the audience, thinking it was a porn shop, was horrified. That first job was important because it taught me valuable skills and allowed me to gain some financial independence, but for millions of people retail is not just a Saturday job; it is their livelihood. It is therefore vital that the Government take the challenges facing the sector seriously and provide support to it.

The industry is one of the largest sectors in the UK, contributing £94.6 billion to the UK economy in 2016. However, staggeringly, its productivity is less than four-fifths that of the national average, and this low productivity drags down the productivity of the UK, a point made recently by the Institute for Public Policy Research. And, sadly, with low productivity comes low pay. We should not fall into the trap of thinking that all people in retail are low paid and in economic hardship—the student doing a summer job would certainly not be in that position—but there is a widespread problem in the retail sector, and according to the Joseph Rowntree Foundation there are around 1.5 million people in low pay in retail, with a higher proportion of households facing economic hardship than in working households generally.

Because retail is such a large sector, the industry now accounts for just under one third of the total number of people in low pay in the UK. The economic importance of the sector should therefore not be understated, and the Government should be doing more to support it. I am sure the Secretary of State will listen to my suggestions today, but I hope that when he speaks later he staggers me with a comprehensive plan to support the sector.

I will start my kind suggestions to the Secretary of State by saying that one of the most glaring omissions from the industrial strategy White Paper was an appreciation that an industrial strategy is not just about labs or hard-hats, but is also about low productivity service sectors, where the majority of people work. Investing in and talking about headline-grabbing hi-tech industries is of course critical, but this alone does not constitute an industrial strategy. Despite the Government’s intention to improve productivity, sadly the industrial strategy Green Paper mentioned retail only twice in 132 pages, and the White Paper only three times in 256 pages, with vague references to working

“closely with sectors such as hospitality, retail and tourism on each of the foundations of productivity”,

but with very little detail to match.

Many challenges are facing the sector, and I will touch on just a few key areas today. Retail firms have since the economic crisis come under increasing pressure. Things have got so bad that in the first three months of 2018 some 21,000 jobs in the retail sector were at risk. The drive towards online retailing, and indeed bad weather, have of course had a significant impact on our spending habits, but one reason for this that is rarely mentioned is a clear failure to sustain wage growth. Wages are not expected to return to pre-crash levels until at least 2022, and household debt has spiralled to unprecedented levels. This clearly has a significant impact on what people spend their money on, with many, sadly, relying on credit cards just to get by each week, never mind buy luxury items.

The Office for National Statistics has stated that consumer spending is worth around 60% of GDP, and it has been one of the driving forces behind the recovery of the UK economy. Interestingly, however, trends are showing that British consumers have stopped taking on more debt, and Credit Suisse recently told clients that it believes this trend will continue, which would damage one of the key drivers of GDP growth.

Another issue is the increasingly hostile business environment many retailers are now facing. But it is not just businesses that will lose out: communities are having their hearts ripped out and high street after high street is becoming littered with empty shops, charity shops and bookmakers.

UK Oil and Gas Industry

Alex Cunningham Excerpts

Thursday 19th April 2018 Westminster Hall

[Alex Cunningham (Stockton North) (Lab)]

I congratulate the hon. Gentleman on securing this debate on an important issue. I am sorry that there are not more people here to discuss it, and that I have to leave before the end. He did not mention Teesside, which is of course the real centre of the oil industry. We have enjoyed a great partnership with colleagues in Aberdeen. Some £5 million of capital investment in new fields in the continental shelf is expected this year. Is he aware that companies that employ contractors are having extreme difficulties in recruiting people with the necessary skills for the new jobs now being created? Does he agree that the Government need to do more to improve the skills base to ensure that British workers can work on these British fields?

[Colin Clark]

The hon. Gentleman makes a very constructive intervention. There were 460,000 people working in the oil and gas industry; there are now nearer 300,000. With the amount of redundancies and people laid off in the industry, we might have expected that unemployment in the north-east of Scotland and on the rest of the east coast would have gone up sharply, but these are highly skilled people with highly transferable skills, and many companies that I visit in my constituency are already reporting a skills shortage, which is a concern that I am sure the Minister will mention.

It is very important that our universities and colleges engage with what the industry wants. One of the criticisms I heard recently was that there is not enough training in digitalisation for engineers. One company, Aker Solutions, a Norwegian company with a large base in Aberdeen, is recruiting from Mumbai because those engineers are trained in digitalisation. It is a serious worry for me that training and recruitment are not matching up.

Returning to my point about Mozambique, DIT had companies from Aberdeen and the north-east looking at the opportunities out there. There was also the Israeli ambassador’s lunch the other day—there are now huge finds of gas in the Mediterranean. Skills in the United Kingdom, particularly in the north-east, for example in directional drilling, will play a very big part in that.

I want to focus on the importance of the industry—its longevity, future and strategic importance—as well as Government involvement and the moral questions that surround the sector. The industry has come through some very tough years. As I said, employment in the sector has dropped from 460,000 to 300,000, but most of those people have been employed elsewhere. Employment has held up well, as people have also been employed overseas. Although there has been a downturn in the oil price, the amount of oil being produced pretty well holds up, so the number of people involved may simply move to another part of the world.

By early 2016 the price had declined by 75% in 18 months, so the industry withstood an enormous price shock, as opposed to a demand shock. Other basins stepped up production to maintain market share, most notably the middle east and OPEC. There have since been OPEC cuts and caps, which are helping to provide some sort of cost stability. We are seeing the price move nearer to $70, which starts to make the UK continental shelf much more profitable, or at least more able to cover its costs.

The main point to make today is that this is not a dying industry. Production will decline from the peak of 4.5 million barrels in 1999-2000—it is now down to about 1.5 million barrels—but it is still an incredibly important industry for this country.

--- Later in debate ---

[Colin Clark]

I thank the Minister for that intervention. It is very important that we are careful that this industry is not demonised and is not seen as something of the past. It is a constructive industry and it is important that we do not suggest it is a stopgap until we move on to something else. We have to recognise its importance. How we use hydrocarbons responsibly is something we have to get right for generations to come, while reflecting on how we have got it wrong in the past.

[Alex Cunningham]

There is also the legacy industry from the parts of the industry that have changed. A huge decommissioning industry is growing up. Does the hon. Gentleman agree that contracts around decommissioning should be subject to even greater regulation in order to protect not just the environment but the interests of British workers who need to train to carry out this decommissioning work, which could create thousands of jobs for Teesside?

[Colin Clark]

The hon. Gentleman must have read my mind, because I am coming on to decommissioning. It is interesting that Hartlepool has already set itself up to take the topsides of rigs. That is pretty remarkable, because I remember that when I was standing for another election back in 2015 I was told that large vessels come and take the topside off, and then take it away to Turkey or the middle east to be broken up. I was told that, apart from a bit sub-sea, decommissioning was not going to be done in the UK. I am delighted that we are going to carry out decommissioning. This is about how ambitious we are to be involved in it. There are huge opportunities.

[Alex Cunningham]

There is the opportunity not just to decommission the rigs, but to bring them in, reconfigure them and put them back out on to the Dogger Bank to provide platforms for the people servicing the offshore wind industry. Would the hon. Gentleman support that?

[Colin Clark]

That is a very valuable point, and I know that the Oil and Gas Technology Centre in Aberdeen is looking at that. The initial idea was that everything would have to be taken down to the seabed, including the concrete installations on the bottom of the seabed. The industry is starting to look at the opportunities. The Oil and Gas Technology Centre is particularly active in thinking about what we can use again and what has significant value. There is a real opportunity with renewables, whether solar or turbines.

The current estimates put the total decommissioning spend at about £60 billion, but the Oil and Gas Authority is targeting a 35% reduction in that cost. Decommissioning has a big effect on the Exchequer, so it is important that we come up with an efficient way of doing it. Companies such as Well-Safe Solutions, based in West Aberdeenshire and Kincardine, are coming up with industry excellence to ensure that we do not learn a new lesson every single time we do this. We want much of the decommissioning industry to be in the United Kingdom. Apart from anything else, morally we should do as much decommissioning in this country as we can safely and in a way that fulfils what we want to do. We should not simply offshore our responsibility to developing countries.

Although there are opportunities for the UK supply chain, it is important to know how much of the cake we will get and what our ambition is. The biggest part of the decommissioning spend is the technical side—the technology and the design. We are already well positioned to do that in the north-east and the rest of the country.

The ambition of the industry, and the vision of people such as Sir Ian Wood, is to extend the North sea’s life with small-pool and late-life development. The industry can report growth; it is showing resilience. Oil and Gas UK’s “Business Outlook” report, released on 20 March, said that more new investment is expected in 2018 than in the past three years, so things are starting to tick up. Production in 2018 is set to increase by 5%, making it 20% higher than it was five years ago. That is resilience; the industry is not going backwards. Unit operating costs, which were a huge problem in the North sea and got completely out of hand, are now down to about $14 or $15 per barrel, compared with a barrel price of $70. That is not the total cost, but it means that we are now internationally competitive, which is very important.

The supply chain is still under enormous pressure, but revenues will stabilise in 2018. Cash flow and, most importantly, profitability remain a challenge. The service sector is telling companies in the oil and gas sector that they are being squeezed far too much. The problem is that if the tier 1s and tier 2s put them out of business, they will not be there for tomorrow, and that will be an economic disadvantage to the country.

More exploration is needed to realise the basin’s full potential. Transferable tax history, delivered by the Chancellor last year, is expected to remove barriers to late-life investment. The problem was that the tax advantages that a tier 1 company built up may have prevented other investors from getting involved in the oil industry, because they are unable to use the decommissioning tax breaks. That is very important, and it demonstrates the UK Exchequer’s broad shoulders.

Maximising the potential of existing fields is key to sustaining production at current levels to 2050. Oil and Gas UK estimates that

“between 12 and 16 oil and gas developments could get the go-ahead this year”—

as the hon. Member for Stockton North (Alex Cunningham) said—

“unlocking investment of around £5 billion.”

It goes on to say:

“That’s more than the new oil and gas field approvals sanctioned over the last three years combined and promises a much-needed business boost for the supply chain”.

It is important that the supply chain starts to negotiate contracts that will sustain it into the future. There is excess capacity, and if the oil producers squeeze too hard we could see a depletion in the number of people involved, and in the long term that will be very bad news.

Norway is always cited as an example. Exploration is tax-deductible in the Norwegian sector, and there are vast reserves. However, when companies find oil, they pay up to 78% tax, compared with the UK sector, for which it can be 20%. The industry reports that the greenfield and major brownfield developments set to be approved this year could yield more than 450 million barrels of oil and gas over time, although that still falls short of the level required to sustain long-term production at current levels.

We cannot underestimate this; the industry is not out of the woods. Oil and Gas UK said:

“The project landscape for 2018 is the healthiest the industry has seen…greater exploration success and maximising the potential within existing assets are essential for the future”.

Oil and Gas UK is not pulling its punches. It is saying that we see green shoots in the industry, but if this does not happen they could dampen back down. Oil and gas companies make decisions about investing money, and they are very tough about where they do that. They will invest in the UK continental shelf if it is the right place, but if there is somewhere better to invest, they will do that. It is important that the UK continental shelf remains fiscally one of the best places to produce oil. We must applaud the sector, because it has learned to be leaner. The UK continental shelf is more efficient, and optimism is returning to the sector.

To blow the trumpet of the north-east for a minute—there are several north-east MPs here—

[Alex Cunningham]

The hon. Gentleman means north-east Scotland. We use “the north-east” to refer to north-east England.

[Colin Clark]

Quite right. I mean the generic north-east.

The north-east of Scotland has 7% of the population, but 15% of the Scottish economy. I am sure that the hon. Member for Aberdeen North (Kirsty Blackman) will agree that it is the engine room of the Scottish economy. The policies of Her Majesty’s Government and the Scottish Government must encourage companies to thrive, and not be damaging. The cost of living in the north-east of Scotland is higher—house prices were driven up by the boom years, so we have the highest council tax bills—and employers feel penalised by what they see to be very high business rates. The empty business property rates have unfortunately backfired and are encouraging landlords to take buildings down. It is important that we invest in the north-east of Scotland—this is a plea to this place as much as it is to Holyrood—and that the money we raise there is spent there.

Over the lifetime of this Parliament, as much as £500 million of extra rates will be raised in the north-east of Scotland. My plea is that we spend that money in the north-east of Scotland, whether on roads, schools, hospitals or other facilities. It is important that we make the north-east of Scotland not only the right place to invest, but the right place to live. If somebody flies in from Houston or comes up from London or Europe, they have to come to somewhere they really want to live, so it is important that we invest in the area.

--- Later in debate ---

[Colin Clark]

I thank Members for that plethora of interventions—it is good that everyone is so interested on such a hot day.

As I was saying, this is an enormously important industry, which has been the bedrock of the manufacturing industry of the United Kingdom. That is why Her Majesty’s Government have invested in it and made this country one of the best places fiscally to produce oil and gas. With the transferable tax history, the UK Government have delivered a massive incentive to invest—other Members campaigned for that for some time. However, it is important that the companies now investing in the industry understand their future responsibilities and that the companies that invested in the past, which have already had the tax benefit, realise that they still have a responsibility.

Fiscal policy makes the UK continental shelf one of the best places to produce oil and gas, and the low corporation tax of the United Kingdom means that the bigger part of the industry, the service sector, is well compensated when operating in the UK. To produce more revenue and grow the whole economy is what we are trying to do. For “business sector” read “jobs”, because employment in the oil and gas industry is picking up, and there is a huge spin-off from the industry. It has been reported that more than half of the companies surveyed expect employee numbers to rise this year. That is a big change.

The north-east of Scotland and the rest of the country involved in oil and gas have seen numbers heavily depleted. As we discussed in a Westminster Hall debate on social mobility a few weeks ago, some businesses are reporting difficulties in recruiting people with certain skills and competencies. That is a worry; perhaps our technical colleges and universities are not producing enough. I had not realised that that could be the case—I expected that Robert Gordon University in Aberdeen or Aberdeen University would be completely focused on the oil and gas industry, but there is already concern about skills shortages.

The oil and gas industry reminds me of the space programme in the US in the 1960s: when oil was $120 a barrel, the industry could not spend money fast enough—probably throughout the entire world, but particularly in the UK continental shelf. Since the oil price has dipped, the industry has obviously pulled back from training, which is probably the reason for our skills shortage. We saw a massive dip in training, although it is beginning to pick up again. Government should do everything possible to encourage training and investment in training, because the industry will continue to be important.

In the north-east we have the highest concentration of technicians and engineers in the United Kingdom—in both north-easts—and all sides can recognise that that is hugely valuable all over the UK. It is also important at the Oil and Gas Technology Centre that STEM—science, technology, engineering and maths—learning is an important part of what the oil industry offers.

Recently, the Aberdeen and Grampian chamber of commerce carried out an industry survey including employment and attitudes. I shall give a few of the numbers because it is important for us to understand where the industry is. The picture is a mixed one, but 80% of firms believe the industry has hit the bottom of the cycle and is now starting to go back up. That means we will start to see investment again—and we are. Fifty-four per cent. of the companies expected to be growing, which is very important, because we are clearly coming out of what was a major recession.

Companies also predicted that they will grow new opportunities, as came up in an earlier intervention by the hon. Member for Stockton North. I visited Sparrows, which builds complex cranes. It had a £10 million order for cranes to put on turbine platforms, to lift parts on and off: 105 of those automated cranes at between £50,000 and £100,000 each. That is a huge investment, and there is the industry diversifying out. More than 80% of companies expected to be involved in decommissioning, where the spend will probably be about £40 billion—that is not to be sniffed at and will sustain an engineering industry for a long time. Many sectors in the United Kingdom would like a £40 billion investment.

On Brexit specifically, the survey covered the issue of recruiting talent in future. The figures are worth mentioning: 47% of the companies surveyed believe that there will be no effect; and 33% were worried. I accept absolutely that we have to get immigration right because this industry employs such highly skilled people.

The Oil and Gas Technology Centre, funded by the city region deal to the tune of £180 million, combines academic research, including that of Aberdeen and Robert Gordon Universities, and industry to create value: to unlock the potential of the UK continental shelf, to anchor the supply chain in the north-east—predominantly the north-east of Scotland, in this case—and to create a culture of innovation that attracts industry and academia. The centre is trying to bring all that together.

For a long time, the oil and gas industry operated in silos, with independent commercial organisations. Sir Ian Wood, with one organisation, has been brilliant at encouraging companies to come together. I have to say—I am sure that all Members involved would agree—that the basing of the Oil and Gas Authority in Aberdeen has been an enormous success. I would be delighted were other Ministries to consider basing anything related to oil and gas in Aberdeen as well.

[Alex Cunningham]

I thank the hon. Gentleman for giving way again and for indulging me so thoroughly, because I have to leave the debate early. He has made a comprehensive case for investment in skills, innovation and development, but there is also the matter of the workforce. For example, workforce confidence in helicopter transport has diminished considerably in recent times. Since 2009 there have been 65 rescues and 33 deaths involving the Super Puma model. Does he agree that confidence in offshore transport needs to be rebuilt? The Government ought to consider and implement a public inquiry to help build that confidence again—that it is still safe to get in a helicopter to fly offshore.

[Colin Clark]

That was a valuable intervention. Recently, the British offshore oil and gas industry all-party parliamentary group met Airbus and the unions involved. There is obviously significant concern about the Airbus 225, also known as the Super Puma. At the moment, the Sikorsky S-92 is the main workhorse in the North sea. The problem is that if the 92 were grounded for any technical reason, or if there was any other reason to keep that helicopter on the ground for a week or two to check something, the industry would close down. Commercially, Airbus obviously wants to see the 225 come back in, and that is very much an issue for the Department for Transport. It is important for us to have confidence, because there is no other way to supply oil rigs.

When we had a visit from the Secretary of State for Transport, one or two of his advisers said, “This is brilliant, flying out in a helicopter.” I said, “How do you think they get back and forward?” The journey cannot be done by boat; it can take two and a half hours to fly offshore on a helicopter. Helicopters are important to the future of the oil and gas industry, so I accept the hon. Gentleman’s suggestion that we must restore the confidence of people who work offshore.

[Alex Cunningham]

Does the hon. Gentleman agree that part of that could be an open and transparent public inquiry? Everyone would be able to see, which would instil the level of confidence that workers are demanding.

[Colin Clark]

Also, the trade unions and their representatives have to be very careful that they base what they are saying on science, not anecdotal evidence. I have heard one or two things said that made me very worried; I will not say that it was scaremongering, but they undermined people’s confidence in what is absolutely essential. The people who work in the oil and gas industry do not want to see helicopters grounded; they want to be safe and they want to be confident about how they get back and forward from the rigs.

I would like to mention two projects by the Oil and Gas Technology Centre. It has a great ambition for an underwater innovation centre, which is very important to the sub-sea sector. That is a very big part of the constituency of my hon. Friend the Member for West Aberdeenshire and Kincardine (Andrew Bowie), who is no longer in his place. It is also about to create the newly announced decommissioning centre in Newborough, in my constituency, which is trying to be the centre of decommissioning technology and ability, so that the UK plays a key part in it and we do not move it elsewhere.

In monetary terms, Vision 2035 aims to create £1 trillion of revenue over the period to 2035 only. The Oil and Gas Authority has a potential upper level of 20 billion barrels of oil, and that expectation is based on barely a quarter of what there could be. We want to see the supply chain double to £500 billion over that period. That is an absolutely enormous part of the UK economy paying tax, contributing and investing in people. Through collaboration, the maximum economic recovery that has been developed by the industry could provide £400 billion. Again, that is just up to 2035. The collaborative effort between Her Majesty’s Government and the Scottish Government shows that when we work together, businesses and jobs benefit. That is pretty well what all our constituents would expect us to do.

The private sector is beginning to have tremendous confidence again in the oil and gas industry. In 2017, there was a staggering $8 billion of merger and acquisition activity in the sector; Chrysaor invested $3.8 billion to purchase Shell assets, and that was before transferable tax history. There was also activity in the supply chain that included Wood Group and Amec, which together are to become a FTSE 100 company, and GE and Baker Hughes, which plan to float on the New York Stock Exchange. They are mammoth businesses investing in a lot of people. The variety, size and type of M and A deals last year signal confidence in the UK continental shelf.

We live in a free market economy where Government must create the right conditions for growth, which is why we are here today to address the Minister. Anti-business rhetoric of demonising job creators, overregulation or punitive taxes all damage growth, as does demonising hydrocarbons by suggesting that they are somehow a thing of the past that we should not be getting involved in. Achieving inward investment requires a dynamic economy with flexible labour laws, hence our historically low unemployment. High taxes destroy investment and job opportunities.

Government must be very conscious of what they are doing. We need to grow the whole economy, not just take more slices out of bits of it. Past Conservative Governments have made mistakes on that very point, particularly in the oil and gas industry. Deirdre Michie said:

“We need more exploration if we are to get close to recovering the three to up to nine billion barrels”

of oil.

Whenever we speak of oil, the figures are absolutely enormous, as is its economic impact: as I said earlier, 1 billion barrels of oil is £50 billion of contribution to the economy.

The UK has signed up to significant carbon reduction. Hydrocarbon production is presented by parts of the media and politicians in this place—I have heard them on many occasions—as part of the problem. Renewables have become a large part of electricity production, but there is twice as much energy transferred by the gas ring than there is by electricity because, apart from on a hot day like this, this is a country that needs heating in our homes. Natural gas produces half the greenhouse gases that coal does. The UK continental shelf industry is part of the solution, not the problem. Each and every one of us gets up in the Chamber as often as we can to remind people that the industry is a very valuable part of the economy.

As the Minister mentioned, the Oil and Gas Technology Centre sees the future being hydrogen and carbon focused, with unmanned facilities and reusable structures. Already, BP in the Quad 204 is putting into practice sub-sea automated structures and vessels, as opposed to rigs. This is a rapidly changing industry—we are changing skills.

I would like to mention a Government elsewhere with a lot of Scots people who moved there many years ago: New Zealand has announced that it will not allow any new offshore development. They are simply offsetting their responsibilities to overseas. They are somehow going to oversee their responsibility for energy, so they are just moving it to a different jurisdiction, where they will have no idea what the ethical and safe practices will be. That is simply pushing away their responsibilities.

Oil and gas are part of the transition, but they are part of our economy, potentially for centuries. They are an incredibly important raw material. As somebody said to me, “You don’t make electric vehicles with wood”—not yet at least. Hydrocarbons, oil and gas and plastics are a major part of those industries. I want people to remember that it is our throwaway culture that polluted our seas, not the existence of hydrocarbons. Already, the UK has slashed emissions by transferring to gas.

I heard recently in a Committee that some would suggest that oil and gas should not be part of the so-called ethical pension funds, should not be considered for green finance, and that somehow we should just turn off the taps and stop using hydrocarbons. Not only is that unrealistic, it is a fairy tale and completely luddite. Hydrocarbons have driven the industrial and green revolution. We would not be where we are if it were not for our use of hydrocarbons. That does not mean that we did not mistakes.

Life would be a lot harsher and the population would be a fraction of what it is. I worry when environmentalists say that, because I wonder whether they are basically saying that there are too many people on this planet and we cannot sustain them. I do not quite know how they will work out which economies should carry on developing and using hydrocarbons, and which developing and third-world economies will somehow be deprived of the development that the western world has enjoyed. Oil and gas has been pivotal in transforming the carbon intensity of the power sector, with cost-effective emission reductions achieved through a significant switch from coal to gas.

I would like to briefly mention fracking, without being overtly political. Everybody should remember that hydraulic fractioning of rock formations has been used in the North sea for 30 years. It has been done very safely and under the jurisdiction of Governments of various parties, who have been very careful how it is delivered. I do not really want it to get into the general narrative that somehow that is not safe, because that would suggest that what we are doing offshore, perhaps thousands of feet below the rigs, is not safe.

Well construction and the UK continental shelf has been absolutely at the top of the industry. Directional drilling and hydraulic fractioning has been developed in the North sea, so we should not just discount it. I ask the Scottish National party and the Scottish Government to remember that there is a science and a very good background to what we have done in the North sea. However, I respect the right of communities to say that they do not want onshore fracking. I also respect the right of communities to say they do not want onshore wind. But let us be frank: it is about nimbyism. They do not want it in their backyards. That is what it is about, rather than a denigration of the science and technology of those sectors.

Deirdre Michie said recently:

“As we move to a lower-carbon economy, the UK needs to meet as much of its domestic demand for oil and gas from indigenous resources”.

I would like to thank UK Oil and Gas, Deirdre Michie, the Oil and Gas Authority, the Oil and Gas Technology Centre, and also local organisations and companies that have fed into what we are speaking about. We can see the importance and scope of the industry, which has the potential to produce more than £1 trillion of revenue for the Scottish economy and to all economies of the north-east and the rest of the UK continental shelf. That is absolutely enormous.

The industry has longevity and huge strategic importance. Particularly at these times in the world, when we consider where our energy is coming from, our own gas supplies are of incredible importance and we should be investing in them, if for no other reason than to give us energy security. We must remember that the basin still employs 300,000 people in highly paid and highly technical jobs that drive other areas of research in the economy.

Will the Department for Business, Energy and Industrial Strategy ensure that we have an energy policy that recognises that, on the Department’s own figures, oil and gas will still provide two thirds of total primary energy by 2035? Oil and gas must be a vital component of that policy, which should consider affordability, security of supply and environmental sustainability.

--- Later in debate ---

[Kirsty Blackman (Aberdeen North) (SNP)]

It is a delight to have the opportunity to speak in this debate. It is always good to have a debate focused on oil and gas; we have not had enough of them recently. I am also delighted to be in Westminster Hall—I feel like I have not been here for some time—and I am thankful for the air conditioning, which is incredibly useful today.

I will not spend an awful lot of time disagreeing with my constituency neighbour, the hon. Member for Gordon (Colin Clark), because I agree with most of what he said, but I will start with a slight disagreement about helicopters. I agree with what the hon. Member for Stockton North (Alex Cunningham) said about people’s nervousness. We and the companies involved ask people to undertake dangerous helicopter journeys just to go to work. In conversations with Airbus and other organisations involved with the helicopters, I have said, “It is not me you have to convince that the aircraft are safe; it is the people who are asked to fly on them.” To do that, those organisations need to have as many conversations and answer as many questions as possible. That is the only way they will possibly regain the confidence of people in the industry.

[Alex Cunningham]

On that basis, does the hon. Lady support my call for a public inquiry so that we have full transparency about exactly what happened and what is being done to rebuild confidence in particular models, which are still yet to come back into service?

[Kirsty Blackman]

I appreciate the hon. Gentleman’s question. To be perfectly honest, I am not clear that an inquiry is widely called for; an awful lot of information has been published. If lots of individuals from my constituency and from the industry more widely asked me for such an inquiry, I absolutely would look at that. I am not saying no, but that is not something that people generally have asked me for. They have looked at the evidence that has been published so far and taken decisions on that basis.

I will talk first about the oil and gas industry in general, although obviously I will speak particularly from the perspective of the north-east of Scotland, as Members would expect of an Aberdonian. I will talk about where we have come from, where we are and where we will go with the industry, and about how to get to those places. As I said, some of my asks are not dissimilar to those of the hon. Member for Gordon.

We were in a situation where the industry was overspending significantly. When it was told that it could have a widget today for £400 or tomorrow for £4, it chose to have it today for £400. There was an awful lot of fat in the system. Now the industry is able to make more profit at $60 a barrel than it was at $120 a barrel, just because it has slimmed down a lot of those costs. One of the most important things for us to do is to capture that—to ensure that, whatever we do, we do not lose the gains we have made.

We have undoubtedly been through an incredibly painful period. We have had an awful lot of pain and suffering in the north-east of Scotland. I get that. A number of people have found alternative jobs—they have been supported in that by various organisations; the Scottish Government have put a lot of effort into that—but some have not. We do not want to forget that there are people who still have not got through the pain of having to go through a redundancy process. We need to remember that and ensure that, whatever we do, we do not set ourselves up for another fall like the one we had. That is really important.

We had a very competitive system, in which companies were unable to work together or point in the same direction. Local authorities were not particularly good at that, either. What really brought local authorities, the business society and civic society in all of Aberdeen city, Aberdeenshire and the north-east of Scotland together was the bidding process for the city deal. Working together on that was really important. I am pleased that we got a city deal. Anyone who has read anything I have said about the deal will know that I was unhappy about how low level it was—I would have liked significantly more money for my city, and I am not sure that many people in the north-east of Scotland would disagree—but the process was very beneficial, as was the direction that the city and the shire took. I hope that we keep hold of that.

Industrial Strategy

Alex Cunningham Excerpts

Wednesday 18th April 2018 Commons Chamber

[The Secretary of State for Business, Energy and Industrial Strategy (Greg Clark)]

I beg to move,

That this House has considered the Industrial Strategy.

It is a great pleasure to open this debate. We are at one of the most important, exciting and challenging times in the history of global enterprise. All around the world, new technologies are transforming the way in which we live our lives as citizens, how we work and the products and services that we consume and supply. Whether it is in artificial intelligence, the digitisation of manufacturing, the clean energy revolution or breakthroughs in medicine, such is the scale of change that it has been described as the fourth industrial revolution. Britain is extraordinarily well placed to lead and benefit from this industrial revolution, just as we did in the first industrial revolution.

We are an open and enterprising economy, built on invention, innovation and competition. We are one of the world’s scientific powerhouses, producing more Nobel prize winners each year than any other country apart from America. We are synonymous with creativity, from literature to video games. People know that the UK is a hotbed of new ideas. In an uncertain world, we have a deserved reputation for being a dependable and confident place in which to do business, with high standards, respected institutions and the reliable rule of law. As this week’s Commonwealth Heads of Government meeting shows, we are—and always will be—proudly international. We are a crossing point for the world because of our geographic position, the importance of the English language, our global friendships and our vibrant culture.

Ten years on from the financial crisis, we have built a stronger economy than many people thought possible at the time. Unemployment is at its lowest rate for 43 years and there are more people in work than ever before. Our public finances have been transformed by rigorously reducing the yawning deficit that was inherited. We have world-beating industries—from financial services to the life sciences, and from the creative industries to advanced manufacturing.

As we look to the future, it is one in which Britain’s strengths are in increasing demand all around the world. The world is avid for our products, services, skills and know-how. To benefit from the opportunities before us, we need to prepare to seize them. We need to ensure that we join all the forces of our people and our economy to reinforce them and extend our strengths into the future, as well as capitalising on the new opportunities that have presented themselves. That is why I stood before this House at the end of November to launch our industrial strategy White Paper.

Deliberately, the exercise of producing the White Paper was a collaborative one. It was the biggest such consultation ever undertaken by my Department and its predecessors, drawing input from more than 2,000 organisations the length and breadth of the United Kingdom. I was particularly pleased that all the devolved Administrations contributed enthusiastically to the consultation. Employers, universities, research institutions, local government leaders and trade unions all contributed to the consultation that resulted in the White Paper, and there was a deliberate reason for this. It seems to me that if the nation is to have an industrial strategy, it has to be for the long term; we must orient our economy and society to the long term. The best way to ensure that policies and institutions endure is to take people with us, and to ensure that the advice and wisdom of all parts of the United Kingdom and all parts of the economy are taken and distilled into something of which all can feel a part.

[Alex Cunningham (Stockton North) (Lab)]

As the Secretary of State knows, Teesside is a powerhouse for industry, but in my constituency unemployment is still double the national average, and across the north-east of England it is considerably higher than the national average. Does he not agree that still more needs to be done to ensure that we balance industrial strategy in favour of those areas where there is high unemployment, and a lack of skills as well?

[Greg Clark]

The hon. Gentleman knows Teesside very well. One of the things he would welcome is that in recent years the long-standing disparity, going back decades, between constituencies like his and others in the country has narrowed. There is a real sense of progress and achievement on Teesside that I experience every time I go up there; I was up there a couple of weeks ago. However, he is absolutely right that we need to continue that progress. We need to reflect on the fact that, as I said, many of the industries, skills and attributes that are in demand across the world now—marine engineering, for example—are abundant in areas like Teesside. We must capitalise on that, and we have a massive opportunity to do so. The industrial strategy, as he knows—our friends and colleagues on Teesside contributed very fully to it—has, for the first time in an industrial strategy, a real, very clear attachment to the importance of recognising the contributions of different places. This came out very strongly through the consultation, so he is absolutely right.

--- Later in debate ---

[Greg Clark]

My hon. Friend is absolutely right. It is sometimes not known and cannot be seen what modern manufacturing is about. I had the great privilege and pleasure of visiting the Big Bang Fair at the National Exhibition Centre in Birmingham a few weeks ago, which does precisely what he advises. The excitement among the young people there, seeing the possibilities available, was palpable. It does a great job.

I know that you are rightly interested in other Members being able to contribute, Madam Deputy Speaker, so I will make some progress and give colleagues the chance to speak. Along with the measures in the Taylor review, it is very important, when new technologies require different skills from the existing workforce, that we back industry in providing the training that is needed. In that regard, the national retraining scheme being developed in conjunction with employers and trade unions, focusing initially on construction and digital skills, is a very important commitment. It is also vital that we upgrade our infrastructure, whether physical infrastructure or the broadband and mobile connections on which many new businesses depend, and again important commitments have been made in that regard.

When it comes to places, the leadership being given to many of our great cities by elected Mayors, not least those elected last year, must be combined with the ability, powers and resources necessary for them to make a difference to their areas. One of our commitments was a fund to enable local leaders better to connect not just city centres but the networks and clusters of smaller towns around our cities. An early example was the decision by Andy Street, Mayor of the West Midlands, to use the investment available through the industrial strategy to fund a metro extension to Brierley Hill and Wednesbury, which connects two important parts of the west midlands to Birmingham and the wider area.

On the business environment, we know that there is a problem of composition. We have some highly productive, highly performing businesses as well as what the Bank of England has identified as a long tail of less productive businesses, and transmitting the lessons from the best to the others is an important part of the work that we need to do.

I will conclude by saying a word about the importance of particular sectors. We have talked about the north-east and Teesside, the west midlands and other parts of the country. We know that the clusters of excellence in those areas can be very important not only in driving productivity but in attracting new investment and becoming the location of new businesses.

[Alex Cunningham]

One of those clusters is, of course, the chemical industry. People in that industry are extremely anxious about the possibility that the EU regulation concerning the registration, evaluation, authorisation and restriction of chemicals might go when we leave the EU. Will the Secretary of State update the House on where we are with negotiations on those regulations to ensure a common working platform for chemicals after we leave the EU?

[Greg Clark]

I would incur your displeasure, Madam Deputy Speaker, if I went into the European negotiations. Suffice it to say that if the hon. Gentleman reads the Prime Minister’s Mansion House speech, he will see a reference to chemicals. We take the advice of the Chemical Industries Association, which I meet regularly, into those negotiations so that we can continue to trade successfully in that very important sector.

I want to say a word about sector deals. As the right hon. Member for Wolverhampton South East mentioned, we know of the success of long-standing arrangements whereby major manufacturers, supply chains and the Government can work together—for example, in the automotive sector and the aerospace sector. These important institutions have taken a lead and boosted jobs and prosperity. In the industrial strategy consultation, therefore, we asked whether we should offer and engage in more sector deals with sectors that have not benefited from those arrangements. We asked business whether that proposal had merit, and the answer was an emphatic yes. These deals are about the Government working with sectors, but also about the sectors working with each other, in exactly the way that the right hon. Gentleman mentioned.

We have made significant progress. In December, I launched the life sciences sector deal with my right hon. Friend the Secretary of State for Health and Social Care. This deal for the long term is already attracting immediate investment, including from MSD, which is supporting nearly 1,000 jobs in the UK.

--- Later in debate ---

[Alex Cunningham (Stockton North) (Lab)]

I want to concentrate on one particular aspect of the Government’s industrial strategy, which is what seems to be their limited work to deliver carbon capture and storage projects, with the thousands of new jobs CCS could create and the hundreds of thousands it could protect.

Yesterday, I took part in a roundtable event hosted by the Institute for Public Policy Research on northern energy industry, where I spoke about the northern energy taskforce and its recommendations on expanding low-carbon energy. The recommendations are ambitious, realistic, comprehensive and achievable, but they are also essential. The north has a huge advantage when it comes to expanding low-carbon generation: hydrogen production, in which Teesside is the biggest producer in the country; the development of energy storage; the opportunity to develop smart grids to support our industry and communities better; and, of course, carbon capture and storage.

I chair the all-party group on carbon capture and storage, and I know that both parliamentarians and people from industry have been very disappointed and frustrated at the lack of comprehensive action on this issue. Two years ago, the Government cancelled the CCS competition to establish one or two projects at the Humber and in Scotland. Since then, we have been trying to play catch-up, and while there have been encouraging words from the Government about possible investment, every moment of delay is a continued failure. Delays are also giving countries the opportunity to steam ahead of us so far that we will never reap the benefits that CCS can bring to the UK.

Carbon capture is vital not only to create and support industry and to increase productivity and profitability, but in delivering the clean growth grand challenge, in that it would deliver a long-term sustainable future for key industries such as chemicals, steel, cement and oil refining, and it would enable low-carbon fossil fuels to continue to provide a clean, flexible source of electricity.

I was a little encouraged when the Government published their clean growth strategy in October last year, which includes the intention to develop a new approach to carbon capture and storage, but I am concerned about its ambition of deploying CCS at scale during the 2030s, subject to cost reduction. I am afraid we need much more than ambition when it comes to this issue; we need robust plans that deliver our capability and need. I am afraid that the 2030s will be far too late—long after other countries have steamed ahead of us and taken the opportunity.

I am proud to represent a Teesside constituency, and it is deeply frustrating for me to see the potential that we have to be a key CCS site while the Government talk a good talk but appear slow to real action. The Teesside Collective is based in my area, and one of its main projects is decarbonisation. The collective is industry-led. Those industries know what they are talking about, and they know what they can achieve given the right environment. Teesside’s concentration of industrial emitters and proximity to potential storage sites under the North sea means that the area is industrially and geographically suited to be the starting place for large-scale industrial decarbonisation in the United Kingdom. We also have the potential for a large-scale CCS-ready power station, which would add huge value to any project in the area.

While I trust that I will always be Teesside-focused, it is important for us also to focus on developing CCS in other countries and regions, such as Scotland, Yorkshire and Humber, the north-west and Wales. A number of potential projects are already being considered, and the Government need to create a framework in which they can be successfully delivered.

CCS is also an essential part of the lowest-cost route to achieving the UK’s climate change targets. The Committee on Climate Change has said that the Government should not even be considering any scenario to meet the 2050 target that does not include CCS. If we are not to be left behind, we need the first CCS projects to begin operating in the 2020s. While the £100 million to support that work is welcome, the Government will need to do much more to ensure its success. The development of low-carbon industrial clusters would constitute a major upgrade to UK infrastructure for a decarbonised economy, supporting regional growth at a time when the outlook appears shaky at best.

Sadly, by the time we see the report from the Cost Challenge Taskforce we shall be three years behind where we should have been. The time is now. I believe that the Minister for Energy and Clean Growth who visited Teesside recently, does “get” CCS, but we need her to bang on the doors of the Treasury and come up with the money that is needed to push these matters further forward.

It is vital for the deployment pathway to set out a strong and clear approach to CCS that will enable the first projects to begin operating in the 2020s—and that is 10 years earlier than the Government appear to be planning. Our industries need to know that the Government are on their side and are prepared to work in partnership and share the financial risk as CCS is developed.

--- Later in debate ---

[Richard Harrington]

I hope the hon. Gentleman will excuse me, but I do not have time to give way.

My hon. Friend the Member for Cleethorpes (Martin Vickers) mentioned a town deal for Grimsby and Cleethorpes, and I heard him speak very eloquently about it. There has been a meeting, and it is an absolute priority for us.

My hon. Friend the Member for Fylde (Mark Menzies) mentioned an aerospace growth partnership. This shows, as he knows, the benefits of a strategy that involves business and the Government working together. That is an intelligent way to channel money from business and from the Government together, which really summarises what the whole industrial strategy is about.

[Alex Cunningham]

Will the Minister give way?

[Richard Harrington]

I am very sorry, but there is not time to give way.

Following an Adjournment debate held by my hon. Friend the Member for Stoke-on-Trent South (Jack Brereton), I have met representatives of the ceramics industry and we are making progress—thanks to his efforts and those of other Members of Parliament, as well as the efforts of Laura Cohen and Kevin Oakes. We understand the ceramics business and we hope to be able to progress matters with them.

I thought at first that my hon. Friend the Member for Boston and Skegness (Matt Warman) was living in the 1840s, but the only person I know who does that is the Leader of the Opposition and he is not in the Chamber this afternoon. My hon. Friend showed us very eloquently that the lessons of the 1840s and the Government’s responsibility to harness developing technology go absolutely to the centre of the industrial strategy.

My hon. Friend the Member for Chippenham (Michelle Donelan) talked about the skills gap in Wiltshire—another important aspect of the industrial strategy—and mentioned a retraining scheme, which is about people and places. My hon. Friend the Member for Chelmsford (Vicky Ford) mentioned many sectors in Chelmsford. She showed that she had really read the industrial strategy and seen what it means in her constituency, and she is continuing to support it.

My hon. Friend the Member for Redditch (Rachel Maclean) said that Birmingham is better than Manchester. I cannot comment on that, although I would say that neither of them is as good as Watford, but you would expect me to say that, Mr Speaker. Seriously, she continues to argue for a town deal for Redditch, and I am very happy to meet her to discuss the idea of a free port.

My hon. Friend the Member for Stirling (Stephen Kerr) is absolutely right to say that the University of Stirling is a jewel. Our universities are jewels, but the industrial strategy is helping them to work together with business and the commercial world, as I saw only two weeks ago when I helped to launch a new science hub at the University of Hertfordshire.

[Alex Cunningham]

Will the Minister give way?

[Richard Harrington]

As hon. Members will know, I usually do my absolute best to take interventions, but I cannot do so on this occasion.

The attitudes we have demonstrated are based on fact, not fantasy. This industrial strategy is absolutely real, as well as imaginative, rounded and ambitious. We have had such attitudes for centuries—this goes back to the point about 1841—but this is the way in which the relationship between the Government and business will evolve. Those attitudes are a source of strength, just as our world-leading universities, businesses and workers are a source of strength. I believe that such attitudes are unique to the United Kingdom and, in combination, they are an asset that no other country can match in the same way.

The industrial strategy builds on our existing strengths and addresses any weaknesses. There is a wealth of potential in this country, and it is our duty to see it realised. It is my contention, and that of the Government, that our industrial strategy, which is available in as many languages as people want, will help this potential to be realised and will build an economy that is—I think this is the expression, which you may have heard before, Mr Speaker—fit for the future. I am very proud of it, and it is my job, and that of my right hon. Friend the Secretary of State, to see it delivered in the weeks, months and years to come.

Question put and agreed to.

Resolved,

That this House has considered the Industrial Strategy.

Carbon Capture and Storage

Alex Cunningham Excerpts

Thursday 19th October 2017 Westminster Hall

[Alex Cunningham (Stockton North) (Lab)]

I am grateful to the Backbench Business Committee for granting this debate, and to the hon. Members who persuaded it to do so. It is a particular pleasure to follow my co-chair of the all-party parliamentary group on carbon capture and storage, the hon. Member for Waveney (Peter Aldous).

My interest in the Government’s new approach to CCS in the clean growth strategy goes wider than Teesside, but I am pleased that new colleagues from our region are present, including the hon. Member for Middlesbrough South and East Cleveland (Mr Clarke) and my hon. Friend the Member for Hartlepool (Mike Hill). They join the work that many of us have been doing for years to persuade the Government to get serious about CCS. I am surrounded by no fewer than five Teesside MP colleagues; 100% of us are here, and we are 100% behind the debate.

I hope my new Tees colleagues recognise that the Government’s reaffirmed commitment to CCS, two years after withdrawing £1 billion in funding, is only a small step along what will be a very long road if our country is truly to reap the benefits of carbon capture. We need more than tens of millions in investment; we need billions. We need big leaps, not tiny steps. Nevertheless, this new recognition of CCS is testimony not only to the impressive body of evidence that continues to emphasise the key role of CCS in delivering least-cost decarbonisation, but to the energy—no pun intended—and enthusiasm of the industry, which has kept up a steady drumbeat on CCS since November 2015. I pay tribute to the Carbon Capture and Storage Association for its work and for its support of the APPG.

In the clean growth strategy, the Government have recognised what the industry has been saying for years: CCS is vital to broad sections of the UK economy. Power aside, key industries such as steel, cement and refining are increasingly looking for ways to remain competitive in a low-carbon world. CCS offers the only solution for deep decarbonisation in these industries that helps to enable their sustainable future, which is crucial for regions such as the Humber, the north-west and Teesside.

[Dr Paul Williams (Stockton South) (Lab)]

CF Fertilisers is based in my hon. Friend’s constituency, Stockton North, but also employs people in my constituency and in Middlesbrough. My hon. Friend the Member for Middlesbrough (Andy McDonald) has a long-standing commitment to carbon capture and storage, but cannot be present because of a Front-Bench commitment.

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[Sir David Amess (in the Chair)]

Order. Having recently been at a meeting of the Panel of Chairs, I remind new Members that if they wish to intervene they must be present at the start of the debate. However, I know that Dr Williams spoke in the main Chamber earlier, and I realise that he cannot be in two places at once. Nevertheless, as a Clerk is sitting beside me, I thought I should point that out.

[Alex Cunningham]

My hon. Friend the Member for Stockton South (Dr Williams) was indeed in the main Chamber earlier. So was I; I was in the smoking debate, trying to persuade our country to give up the weed.

I agree entirely with my hon. Friend. The company he refers to consumes the same amount of gas at its other plant in Runcorn. It is crucial that CCS be spread across the country.

[The Minister for Climate Change and Industry (Claire Perry)]

May I address that question now, in case I forget later? The hon. Member for Stockton South (Dr Williams) is right to focus on the effect on companies such as CF Fertilisers. He will be pleased to know that I had a meeting with that company yesterday. We have had conversations on several issues, but the impact of this technology on its carbon dioxide emissions and its cost base is clear.

[Alex Cunningham]

I thank the Minister for that helpful intervention. I have seen companies across the area, including those that make up the Teesside Collective, working hard to decarbonise their processes, but engineering can only do so much. The Government appear to understand that. The clean growth strategy estimates that CCS could provide almost half the required emissions reductions in energy-intensive industries, helping them all on their way.

A recent study by Summit Power gives a simple explanation as to why the first CCS projects must begin operation in the 2020s: achieving the CCS capacity needed to meet the UK’s 2050 target requires a 30-year build-out rate. Any attempts to significantly shorten that period would place unrealistic expectations on the supply chain and the construction companies. The end result would either be a failure to meet the 80% target by 2050 or the deployment of alternative low-carbon solutions that are likely to be considerably more expensive. We need the first CCS projects to begin operation in the 2020s. Although the £100 million of funding to support that work is welcome, the Government will need to do much more if we are to realise our ambitions.

The Government’s recommitment to CCS sets out an ambition to deploy it at scale during the 2030s, which throws up some interesting questions. What exactly is meant by “at scale”? Does it mean deploying the first CCS projects in the 2030s, or does it mean that the projects will be up and running in the next five to 10 years and at the required scale 10 years later? To achieve large-scale deployment of CCS in the 2030s, it will be essential to have at least one phase, if not two phases, of operational projects in the 2020s to enable learning and cost reduction.

That was just one of the messages from yesterday’s APPG meeting, where we heard about CCS progress in three fantastic projects that could be the first building blocks in the construction of a world-leading CCS industry: the Caledonia Clean Energy project, the Teesside Collective and the Liverpool-Manchester hydrogen cluster. They are all in a strong position to get work under way to deliver projects that could be expanded or replicated with relative ease.

The Department is familiar with those projects and is providing some support, but the message to Government at that meeting was clear: each of the projects is costed, demonstrates relatively low cost and, most importantly, could make something happen quickly. The projects have invested heavily in development, worked with leaders in the field and done the numbers. Their plea was for the Government to come up with a timetable for decisions.

The Teesside Collective spells out what it needs in its briefing note, which the hon. Member for Middlesbrough South and East Cleveland alluded to. It asks for the allocation of £15 million in capture plant FEED funding to enable it to develop phase 1 of the project. It wants support for investment in a suitable CO₂ store. It states that transport and storage costs will come down through new delivery models and that it is keen to work in partnership with Government to look at a cost-effective solution. It also wants the establishment of a funding mechanism to build and operate an industrial CCS network.

Will the Minister address those pleas and let us know what decisions we can expect from her? The industry desperately needs decisions. I invite her to attend a meeting of the all-party group early in the new year so that she can outline the Government’s thinking, listen to Members’ feedback and answer their questions.

I hope I will be forgiven for being a bit more parochial now. As other hon. Members have mentioned, NEPIC has identified Teesside as a location with a particularly strong competitive advantage in the deployment and commercialisation of CCS. My Teesside constituency is home to the Teesside Collective, a consortium of industries developing the first CCS project in the UK. Teesside has the workforce and the strong engineering skills required for CCS, largely as a result of long-standing expertise in the oil and gas, energy supply, chemical and process industries.

We know from the clean growth strategy that CCS has to do more than demonstrate carbon reduction and low cost. It also has to offer a competitive opportunity for the whole of the UK. There is every reason to believe that that aim can be realised. The UK has some of the best CO₂ storage capacity in the world, a world-class oil and gas industry with the ideal skill set for CCS, and industries already located together in key regions. The economic benefits of CCS could be immense, with the Summit Power report concluding that developing it in the UK could deliver an estimated £129 billion of benefits. The clean growth strategy includes a commitment to developing a deployment pathway for CCS in 2018, but there is no detail about how that pathway will be developed or about the actions that may be included, so I hope the Minister can help us in that regard.

To make sure that, come the 2020s, the first CCS projects are operational, the Government need to implement a number of key actions in this Parliament to kick-start CCS clusters in a number of key regions. Countries such as Norway and the Netherlands have come forward with strong commitments on CCS, and it is time for us to step up and take our place among the leading group of countries that are developing this transformational technology.

I am ambitious and optimistic about the potential that exists and I am encouraged that we seem to be moving in the right direction. However, in closing I reiterate three messages: we need huge leaps to be taken, not tiny steps; the Government need to publish a timetable for the decisions needed to make real progress; and there are good, costed projects ready to go that can make our country a world leader in carbon capture and in creating and protecting countless jobs. I hope that the Minister will help us do that.

--- Later in debate ---

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

It is a pleasure to serve under your chairmanship, Sir David. Like other Members, I congratulate the hon. Member for Middlesbrough South and East Cleveland (Mr Clarke) on bringing forward this debate. He promoted Teesside and highlighted the possible economic benefits of CCS, including to the energy-intensive industries located there.

I had started to wonder what the Teesside Collective was. Before I came into the Chamber, I understood that it was the consortium looking to develop the project, but it is quite clear that the name could be applied to the Members gathered in Westminster Hall, because there is no doubt that they spoke with a unified voice. It is good to hear cross-party support fighting for jobs in constituencies, and it is to be applauded.

As the hon. Member for Waveney (Peter Aldous) said, this is the second debate on CCS in this Chamber in a 10-month period. That shows how valuable CCS is deemed to be for climate control and emissions reduction. The debate has been somewhat more upbeat and optimistic than the debate in January, but I warn the Minister that, just like my hon. Friend the Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry), I reserve the right to apply a bit of gloominess to the issue.

[Alex Cunningham]

Before the hon. Gentleman introduces further gloom to the debate, perhaps he would like to welcome, as I did yesterday, the fact that the Caledonia project in my home country is working very closely with the Tees Collective project in my adopted home. It is co-operation between projects that will capture the imagination of the Government and others and drive things forward.

[Alan Brown]

Yes, I welcome that collaboration and announcement. The hon. Gentleman made a joke about being parochial for his area and his constituency, but surprisingly I am not going to be that parochial. I would like to see all these projects develop, with local areas across the United Kingdom benefiting.

The hon. Gentleman talked about taking tiny steps forward. We need to take much bigger leaps forward—this is where I turn to the gloomy aspect that my hon. Friend the Member for Inverness, Nairn, Badenoch and Strathspey touched on—but we have taken backward steps. The Minister might not like hearing this, but it is important, and it has got us to where we are just now. Pulling the plug on the Peterhead project cost the Peterhead area 600 jobs, but it has the much wider implication that it dented investor confidence. The Government need to take action to recover that confidence and find ways to get private investment going forward.

In 2014, before the Scottish referendum, we were told by the Better Together campaign that only the broad shoulders of the United Kingdom could cope with a reduction in the oil price. Since then, we have sadly seen a reduction in the oil price, but we have not seen enough support from those broad shoulders. That is why the pulling of the project at Peterhead was a further blow to the oil and gas industry in that area of Scotland. That project could have been the perfect fillip.

--- Later in debate ---

[Dr Alan Whitehead (Southampton, Test) (Lab)]

Surrounded as I am by what we now know is a Teesside collective, who look out on to the North sea, I cannot offer quite such a spectacular view from my constituency. I have a view on to the English channel, which is of course rather less bracing for a dip this time of year, but does not share the North sea’s potential for CCS in the future.

It was good to hear this afternoon from Members across the House about that potential, in terms of what is in Teesside—both in its own right and in conjunction with what is in the North sea. As a country, we must play a role in, among other things, making sure that after the exploitation of the North sea for oil and gas, the industry continues. That can be done by ensuring that the plant, the connections and the various other things currently in the North sea are turned around over the coming period, so that we are the leading country in Europe and the world for storing carbon as well as capturing it—perhaps offering that facility to not only our own country, but all the countries bordering the North sea and more widely.

In that context, it is interesting that that is precisely where Norway is now going. Statoil has been fairly busy recently; I met with its representatives just the other day. It was good to hear from them that although there have been setbacks in the process of getting the Norwegian project under way, it is very much still on track. The aim is to develop the Troll field, essentially as the first part of a European-wide process of storage of carbon in the North sea. They are currently looking at processes of barging captured carbon to an onshore site in Norway and then pipelining it out.

[Alex Cunningham]

The development in Norway is an illustration of why the UK needs to get on its bike and get moving. Yesterday, at the all-party parliamentary group meeting, it was revealed that the cost for projects in this country might be as low as £40 or £60 a tonne, but going to a third party might cost us £100 a tonne. That is an economic argument in favour of our own comprehensive storage.

[Dr Whitehead]

My hon. Friend has exactly anticipated, in rather more eloquent terms, what I was about to say almost immediately. The pace of the Norway project illustrates that we should get our act together as early as possible in making sure that we have the lead on the whole process in the North sea, for all the reasons that my hon. Friend mentions—cost, expediency and proximity. This unparalleled opportunity will probably not come again. If, for example, we close down all the capped wells and sites in the North sea as the oil begins to diminish, we will have lost that opportunity to be world leaders in the North sea. Action needs to be undertaken now, or in the very near future.

I endorse everything that has been said by pretty much everybody in the Chamber today about the importance of carbon capture and storage for the future. I cannot do better than describe it in the exact words of the Committee on Climate Change:

“Carbon capture and storage (CCS) is very important in meeting the 2050 target at least cost, given its potential to reduce emissions across heavy industry, the power sector and perhaps with bioenergy, as well as opening up new decarbonisation pathways (e.g. based on hydrogen).”

The committee goes on, in that report, to talk about the cost of not doing anything as far as carbon capture and storage is concerned over the coming period, which hon. Members have discussed.

The Committee on Climate Change sees carbon capture and storage as absolutely essential. That is what it said in its report, “The Fifth Carbon Budget”, which we in the UK have now adopted. It is incumbent on us to make sure that we respond to what the committee has underlined in that report—the importance of carbon capture and storage.

On that matter, I have been pleased to see that the clean growth strategy not only mentions but more than mentions what will happen with carbon capture and storage. Just a little while ago, the Minister told us in the House that the clean growth plan would be on its way shortly, with further bells and whistles. I would like to think that that mention—all three pages of it—may be a bell or whistle that she personally inserted into the clean growth plan to get a new view abroad of what we can get from carbon capture and storage, how important it is for the future and what the next pathways are.

I cannot be wholly uncritical, because certain things need to be underlined at this stage. Opening an avenue on carbon capture and storage will inevitably be seen by many people concerned about the area as springing from something that hon. Members have also mentioned this afternoon—the shameful passage in our recent history of the cancellation of the two carbon capture and storage pilot projects at the very last moment, in 2015. The cancellation of those projects was not just a tragedy and a disaster for the communities involved in them; it spread a pall of doubt and concern across the whole of the industry about whether carbon capture and storage has a future, whether it is worth investing in and whether confidence can be restored to make it go forward, as we all want. We have to tread a path back to the starting line, and I hope that, given the intentions about carbon capture and storage set out in the clean growth strategy, the Government understand what that setback has done to us and find a way to get back to the starting line. There are a lot of measures in those three pages, which suggests that that can be achieved.

I am not sure whether the £100 million—or, to be precise, up to £100 million—that has been set aside for the next phase of the development of carbon capture and storage will be remotely sufficient to get us where we want to go. I hope that, in 2018, when the Government come forward with more plans and details about how the £100 million will be spent and what will happen to it—the clean growth plan assures us that they will do that—the next stage of the road map will set out what we will put in over the next period to make carbon capture and storage work properly and ensure we reach the carbon reduction goals set out in the fifth carbon budget.

In that context, we ought to pay more attention to the excellent report on carbon capture, usage and storage by the Oxburgh commission, of which the hon. Member for Waveney (Peter Aldous) was a member. Although the clean growth strategy says that that advisory group’s advice influenced the Government’s thoughts on carbon capture and storage, the report sets out the investment that is likely to be needed for carbon capture and storage over the next period, and it is substantially more than the £100 million set out in the clean growth plan. It would be helpful for the Government to provide a formal response to that report, which they have not done hitherto, to put on the record which parts of it they think are important, which parts they will try to implement at an earlier stage and which parts they will leave for later. I will leave that thought with the Minister. That would be a very positive thing to do, in the light of what was put forward in the clean growth strategy. We must be clear about the path ahead of us, and we need to learn from the report’s very good insights.

I hope the Minister notes the cross-party agreement in this Chamber about the urgency of the need to develop carbon capture and storage, about the development route we need to take, about the key role that Teesside and the North sea will play in that process, and about the need to work together to realise the carbon capture and storage goals that are so necessary on our path to carbon reduction.

[The Minister for Climate Change and Industry (Claire Perry)]

As always, it is a great pleasure to serve under your chairmanship, Sir David.

I thank my hon. Friend the Member for Middlesbrough South and East Cleveland (Mr Clarke) for securing this excellent debate, to which there have been many thoughtful, detailed and factual contributions. My hon. Friend is a strong proponent both of the technology and of the area he represents. It was wonderful to hear the unanimity of views, in particular from the hon. Member for Redcar (Anna Turley), who speaks so passionately on behalf of her constituency; the hon. Member for Stockton North (Alex Cunningham), who made a very factual contribution about the importance of this technology; the hon. Member for Hartlepool (Mike Hill), whose predecessor also promoted the technology; and my hon. Friend the Member for Waveney (Peter Aldous), who, although not from the region, represents a coastal constituency and has a long-standing interest in this issue. As always, he spoke very well on this subject.

I tweaked the tails of the hon. Members for Kilmarnock and Loudoun (Alan Brown) and for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry) slightly. I understand their points, but I sometimes wonder whether we do not have more solar deployment in Scotland because listening to the Scottish National party might lead us to think that the sun never shines north of the border, whereas we all know that it does very frequently. They made a fair point about the criticism that has been levelled at previous decisions, and that criticism has made me determined to find a copper-bottomed means of taking this technology forward. We all accept, and the report is clear, that it should be in our decarbonisation mix, but we need to develop it in a way that meets our triple test: it must ensure maximum decarbonisation, offer a clear route to an acceptable cost level, and help us boost the UK’s technology leadership so we grow the number of jobs in that part of the economy and our export potential.

I will try to answer all hon. Members’ questions. As always, some will not get answered, but I am sure my excellent Parliamentary Private Secretary, my hon. Friend the Member for Richmond (Yorks) (Rishi Sunak), will be assiduous in capturing any that are not answered and making sure that I answer them further down the line.

[Alex Cunningham]

The Minister talked about fact-based speeches. Does she accept that the costings for the projects I alluded to are good costings and demonstrate good value for money?

[Claire Perry]

I have not reviewed those particular costings. As the hon. Gentleman knows, I am never without my calculator. If there is one thing I want, it is value for money and a clear route to cost-effective deployment. Hopefully, we all want to go down that path.

It was excellent to hear cross-border, cross-party support for this technology. That is the way to boost investor confidence and ensure the clean growth strategy survives the vagaries of the political cycles. These long-term decisions benefit both us and our children and grandchildren.

All parties welcomed the clean growth strategy, and I thank their representatives for that. We are coming at this from a position of strength. We have the best decarbonisation and growth performance of the G7 economies. We are all determined to capture the enormous opportunity from the global pivot to low-carbon economies, and we want to ensure the UK’s productivity benefits from it. The strategy is broad and binding. It sets out clear targets and harnesses the power of innovation, on which we lead the world, to drive down costs and increase the pace of the roll-out of innovation. It also clearly sets out how we intend to meet some of the challenges.

Carbon capture, usage and storage is a vital part of the strategy. It is needed as a long-term strategic option so we can deliver the 2050 target at the least cost. It is crucial that we cut emissions from sectors that are hard to decarbonise. CF Fertilisers has done an excellent job in taking as much carbon as possible out of its industrial processes, but we understand that producing that vital product is carbon-intensive.

Carbon capture, usage and storage also gives us optionality. The hon. Member for Kilmarnock and Loudoun talked about the opportunity to decarbonise hydrogen production, and it is important that we maintain that option as we move towards our low-carbon future. As my hon. Friend the Member for Middlesbrough South and East Cleveland argued so well, capturing and effectively deploying this technology enhances the competitiveness and productivity of industrial regions such as Teesside, Merseyside, Grangemouth and south Wales. I do not want anyone listening to this debate to be in any doubt that, although some areas may be leading in terms of their ability to promote themselves as places to use this technology, that does not rule out other areas. We want it to be deployed effectively in all parts of the UK where there are industrial clusters.

The technology represents an export opportunity for firms such as Shell and Costain and new UK technology providers such as Carbon Clean Solution, which was funded by the Department for Business, Energy and Industrial Strategy to develop globally leading new forms of carbon sequestration for industrial processes.

Many companies are involved in the supply chain as well. I have been following with great interest the Eight Rivers plant, because it is UK-developed, completely breakthrough technology. It is funded with UK Government money deployed in Texas because of the package of incentives put around it, but the supply chain to the plant involves venerable companies such as Goodwin in Stoke-on-Trent, which is an amazing leader in high-specification metallurgy, and Heatric in Poole, Dorset. If we can capture such opportunities onshore, we bolster our onshore supply chain and, as the IEA has estimated, the global CCUS market could be substantial.

The problem, however, is this: we all accept that CCUS is important—we had some conversation on the nervousness in Norway about doing this—but while 21 CCS plants are operating at scale in the world, 16 are dependent on the revenues from enhanced oil recovery, which suggests that for only five plants on the planet has someone been able to persuade a Government or local player to subsidise the technology substantially, despite the potential of such technology. That tells me that the cost of the existing technology is too high and that there are potentially ways to deploy it more effectively.

That is why I want to change things—this is the point made by the hon. Member for Southampton, Test (Dr Whitehead)—and it is very much a personal commitment and something I strongly believe is exceptionally important. That is why we have put in place a much broader strategy on CCS. We want the prize of global leadership in the area: we want to be the people who break the deadlock, deploy CCS in the UK and capture the export opportunities.

We therefore have three areas in which I have set out actions under the clean growth strategy. First, we will constitute the CCUS cost challenge taskforce rapidly, because the model worked extremely well for offshore wind where we all accepted that the existing costs were too high. I take the point about risk sharing—the hon. Member for Kilmarnock and Loudoun is knowledgeable about this. There is a real question as to how much risk partners were able to accept in that structure. We are keen to probe our understanding of how to get down the cost of the deployment of the technology, so the new taskforce will be constituted in the next month. It will report to me and, as with the green finance taskforce, it will be set specific challenges to come up with ways to reduce the cost.

Secondly, we will publish a deployment pathway for CCUS over the course of the next year, which will include the points made about power capture, industrial capture, and transport and storage. We want specific delivery and investment models for each of them. We will continue to progress the work we are doing with the Teesside Collective, but will also work with other initiatives in Teesside, Merseyside, south Wales and Grangemouth, because there are other opportunities to do so and to learn from.

[Alex Cunningham]

I very much welcome the commitment to a timeline over the next 12 months. That is extremely welcome, and I wanted to say it specifically, but what else will the Minister do to help build the investor confidence to ensure that we can get the investors to put the money forward to make the projects happen?

[Claire Perry]

The hon. Gentleman has pre-empted what I was going to come on to, although I am conscious of the time and that I have to leave some for my hon. Friend the Member for Middlesbrough South and East Cleveland. For example, I too am meeting Statoil today— I am doing the rounds and going straight from this debate.

I am very conscious of the opportunities to work with organisations such as the Oil and Gas Climate Initiative, which for the first time is deploying new funding specifically into this area. We are very keen on substantial private sector investment. We are talking for the first time to the gas turbine blade manufacturers, who have never been involved in the conversation but who clearly depend for their long-term business survival on continuing to generate power with gas.

Internationally, I want to be sure that everyone is aware that we are perceived as a technology leader. We participate in Mission Innovation and its carbon capture innovation challenge. We are already exploring collaborative working relationships with countries such as Norway, which has an excellent Energy Minister. Collectively, between our two countries, we took the hydrocarbons out from under the North sea; surely there is cost-effectiveness in co-operating to put back the CO₂ we have extracted. Given budget constraints, Norway in particular bears some interest, but there is also interest in working together in the United States, Canada and Australia.

We will therefore keep investing in our international CCUS programme and will organise and host an international global carbon capture, usage and storage conference next year to affirm that this is an area in which we want to take international leadership. We want to be the movers and shakers in this field.

As we have made hon. Members aware, we will invest in innovation to support such technology through our £100 million industry and CCUS innovation programme. We will make up to £20 million available for a CCU demonstration programme; we will support the next generation of technology; and in particular, as we talked about, we will support CCUS in some of the further out technologies, especially those to do with the removal of greenhouse gases. To ensure that that all works, I will personally chair a new CCUS council with industry to review progress and priorities.

I want hon. Members to be in no doubt that we are making a fundamental doubling down, as it were, on our commitment, but the guideline is that we must come up with a more cost-effective way of doing CCUS. We have to ensure that we produce the maximum reduction in emissions and we want to position the UK as the global technological leader in this space. That is at the heart of the clean growth strategy.

I will be delighted to attend the APPG and I am happy to have the conversation. As hon. Members should know, my door is always open. I feel that collectively—I choose the word advisedly—we are much better together on this sort of technology. The more we set aside any political differences, the more we ensure that we are perceived as a great place for investors—that would be great.

Sorry, I have one point to finish on quickly. I was asked about the response to the Public Accounts Committee. We accepted a majority of its recommendations, but we did choose to reject that one because, for one thing, it was based on outdated cost analysis. We want to convince everyone—I hope we have done—of the Government’s commitment to move forward on CCUS. I do not feel that we need to demonstrate its importance because that is already accepted.

I want absolutely and sincerely to say how impressed I am with the work of the Teesside Collective, which has made an exceptionally powerful case to be the first place to move forward with this technology. Discussions are very active, but it would be a bold Minister at my level who set out funding commitments ahead of the publication of the industrial strategy or the Budget. However, the case has been made, and made so well that—forgive my lapse into urban slang—I wonder whether “Teesside Massive” might be more appropriate than Teesside Collective. It is a powerful force, and it is wonderful to see so many colleagues from all parts of the House making the case.

Clean Growth Strategy

Alex Cunningham Excerpts

Thursday 12th October 2017 Commons Chamber

[Claire Perry]

My hon. Friend will of course know that per vehicle emissions have actually dropped. Cars are now about 20% more efficient, but we are using more of them. Reducing congestion and getting cleaner air is a really important benefit of taking action, but I hear what he is saying. The ambition is accelerating all the time. We announced ending the sale of conventional petrol and diesel cars and it is interesting that the Netherlands has come out with something similar. We are all doing this together. Things are the same with unabated coal. We said that we would phase it out by 2025 and Canada has said similar things. There is a genuine, exciting ambition, and things happen when we set such ambitions.

We have been talking about ending the sale of petrol and diesel cars for years, but we set the ambition and had that conversation and then many of the major manufacturers that are producing cars in the UK brought forward their plans for electric and ultra-low emission vehicles. For example, BMW announced that it will be building the electric Mini in the UK. This country already makes one in five of the electric vehicles sold in Europe, and it is through setting ambitions and then investing in innovations such as the Faraday challenge that we can be a world leader in making such vehicles and accelerating their transformation. However, this is not only about the vehicles; we also have to be able to charge them up. It is therefore important that we accelerate the roll-out of what we want to be the world’s most effective charging network, so that performance and price, not charging, are the only considerations when buying a car.

[Alex Cunningham (Stockton North) (Lab)]

I was not there myself, but the Minister told the Tory party conference that she viewed carbon capture and storage as a vital technology for the future, and I welcome its revival on the Government’s policy platform. They are certainly seeing sense. CCS is also vital for Teesside and for the jobs that the Minister talked about. Will she back the Teesside Collective project with real resources and, as she develops new initiatives, engage with the all-party parliamentary group on carbon capture and storage, which I chair?

[Claire Perry]

The hon. Gentleman is always welcome at the Conservative party conference. Like my hon. Friend the Member for Middlesbrough South and East Cleveland (Mr Clarke), he does a great job of affirming the commitment and energy that is demonstrated by the Teesside Collective. As we say in the strategy, Teesside is one of several areas with rapidly advancing projects, and with our renewed commitment and desire to be world leaders in this area and in new investment I would like to see such ambitions taken forward.

Post Office Closures

Alex Cunningham Excerpts

Tuesday 25th April 2017 Westminster Hall

[Alex Cunningham (Stockton North) (Lab)]

In 2014, the post office on Stockton High Street was downgraded from a Crown office to a lesser franchised branch buried away inside a WH Smith store. At the time, I likened that to privatisation through the back door. It ignored the public consultation that took place and put staff at risk of losing their employment. Last year, the Norton post office was franchised and moved half a mile away from the high street and main shopping thoroughfare, again to be buried inside a shop. Then in January this year, the Post Office announced that it would be closing the Billingham Crown office branch, making it yet another franchise. It is therefore more than a little ironic that, within the past few days, I received a briefing from the Post Office that talked about bank closures and about how it could help to fill the service gap. The hon. Member for East Worthing and Shoreham (Tim Loughton) talked about the opportunities, but if we do not have a robust post office network, branches will not be able to deliver their usual services, never mind others on behalf of the banks, which are axeing their branches on our high streets more and more.

Citizens Advice pointed out that 88% of people think that their local post office has the same or more importance to their local community than it had five years ago. The Government should adopt its recommendations by confirming appropriate levels of funding to maintain the current network and raising awareness about public consultations on the closing or franchising of branches.

The Communication Workers Union sent me a great brief outlining the key issues and wrote to me about the idea of a post bank, which I support. It talked about the impact on customers, queue times, service times, disabled access, customer service and replacing good jobs with insecure employment—the majority of staff in a Crown office will leave when it is closed and a franchise partner is found. The Post Office will not confirm how much public money is given to retailers such as WH Smith. Perhaps the Minister can enlighten us. There is also a wider social and economic impact with the loss of jobs and the physical removal of the shop from the high street. Those are all valid and strong points.

If we do not fight and challenge the proposed changes and closures—the post office in every single major community in my constituency has been downgraded—it will be to the great detriment to our constituents, who rely on us to speak out for them. I just hope the Minister will rattle some cages.

--- Later in debate ---

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

It is a pleasure to serve under your chairmanship, Sir Edward. I congratulate my hon. Friend the Member for East Worthing and Shoreham (Tim Loughton) on securing this crucial debate. Today’s attendance and the passion with which Members have spoken about the value of post offices in their local areas shows what an important topic this is. I suspect that, for several of us, this will be our last debate in this Parliament.

The Government certainly recognise the crucial role that post offices play in communities across the country. Between 2010 and 2018, we will have provided almost £2 billion to maintain, modernise and protect a network of at least 11,500 branches across the country. My hon. Friend talked about post office closures. There are more than 11,600 post office branches in the UK, and the network is at its most stable for decades. The number of branches declined substantially in the 13 or so years before 2010, but since then it has been kept absolutely stable. Graphs show that that is absolutely accurate. That is down to the transformation and modernisation of the network, thanks to taxpayers’ investment.

I thank my hon. Friend for his positive remarks about that network transformation programme, which has secured the transformation of more than 7,000 branches. I am sure that I am not alone as a constituency MP in having felt and seen the benefits of that transformation in the branches in my constituency. More than 4,300 branches now open on Sundays, nearly 1 million additional opening hours are to be added to the network every month, and losses have been reduced from £120 million to £24 million. That is a substantial result achieved by management and workers in the Post Office network. The subsidy that the taxpayer is obliged to put in has fallen by 60% since 2012. That is why the network is more stable than it has been for a generation. The Post Office has managed that transformation while maintaining customer satisfaction at more than 95% throughout the programme.

[Alex Cunningham]

rose—

[Andy Slaughter]

rose—

[Margot James]

I will give way once—I only have 10 minutes.

[Alex Cunningham]

The Minister boasts of the 60% reduction in taxpayer subsidy. Would it not be better for the taxpayer to invest in Post Office services, perhaps prevent some closures and downgrading and therefore maintain services for our communities?

[Margot James]

I agree that we need to invest in the postal service, and we are doing that. I hope that we shall continue to do so. However, I am afraid that one aspect of investment is making the existing structure of Crown post offices more efficient and affordable. Through the process of modernisation and franchising of Crown post offices, we have been able to reduce losses. That is a way for us to uphold our promise to keep post offices open in poorer and more rural areas that are not economically sustainable. I hope that the hon. Gentleman will at least understand that we are not just closing branches; we are franchising them and making them more efficient. We are then able to fulfil our promise to areas that need a postal service but would not have one if we continued to invest in loss-making Crown post offices.

UK Decarbonisation and Carbon Capture and Storage

Alex Cunningham Excerpts

Tuesday 24th January 2017 Westminster Hall

[Philip Boswell (Coatbridge, Chryston and Bellshill) (SNP)]

I beg to move,

That this House has considered UK decarbonisation and carbon capture and storage.

It is an honour to serve under your chairmanship, Mr Betts, and to have secured this debate. First, I declare an interest. Prior to coming to this place, I was Shell’s contract lead on the carbon capture and storage project at Peterhead. I moved the project from its previous format in Longannet. Further to that, I was on the CCS parliamentary advisory group working under Lord Oxburgh. It reported to the Secretary of State for Business, Energy and Industrial Strategy in September last year with the report, “Lowest Cost Decarbonisation for the UK: The Critical Role of CCS”. I therefore have great interest in the subject, and I commend all Members who have come forward to speak in the debate.

It is prudent to consider, at least summarily, the background against which the debate has been brought to the House. Since successfully winning a narrow majority, the Conservative Government have been rapidly drawing back from the previous coalition Government’s much-lauded green policies. Tony Juniper described it in his article in The Guardian on 24 July 2015 as

“an anti-environment ideology based on the view that ecological goals interfere with the market, increase costs and are against the interests of people.”

The cancellation of the ring-fenced £1 billion funding for the carbon capture and storage competition on 25 November 2015 is just one of a succession of cancellations of green policy initiatives and renewable programmes. Those cancellations include scrapping support for onshore wind; axing solar subsidies; removing the guaranteed level of renewables obligation subsidy for biomass; killing the flagship green homes scheme; privatising the green investment bank, which my hon. and learned Friend the Member for Edinburgh South West (Joanna Cherry) will discuss tomorrow; removing incentives to buy greener cars; abandoning the plan for zero-carbon homes; a U-turn to allow fracking on sites of special scientific interest; dropping the green targets; and—this is what triggered the CCS parliamentary advisory group’s report and, subsequently, this debate—scrapping the ring-fenced £1 billion of funding for the carbon capture and storage competition in November 2015.

With so much backtracking on green and renewable energy initiatives, the scrapping of that funding may not have been a shock to everyone. I forecasted it, but the industry, which was four years into the £1 billion competition, was shocked. Quite honestly, it virtually wiped out the industry in the UK in one fell swoop. Dr Luke Warren, chief executive of the Carbon Capture & Storage Association, said that the decision was

“just incredible. Only six months ago the government’s manifesto committed £1bn of funding for CCS…Moving the goalposts just at the time when a four-year competition is about to conclude is an appalling way to do business.”

What does that do for investor confidence? The litany of cancelled, diluted and abandoned renewable and green initiatives, as well as those within the energy industry as a whole, have virtually destroyed investor confidence in the UK energy sector. The third report of the 2015-16 Session by the Energy and Climate Change Committee, “Investor confidence in the UK energy sector”, was published on 23 February 2016. The Committee is chaired by my hon. Friend the Member for Na h-Eileanan an Iar (Mr MacNeil), and the report identified six factors that combined to damage investor confidence in the UK. The fourth was:

“Policy inconsistency and contradictory approaches have sent mixed messages to the investment community”.

The report goes on to cite three specific examples, of which the third is

“emphasising the important role of gas while scrapping support for carbon capture and storage.”

Earlier in the same month, the same Committee released a report, “Future of carbon capture and storage in the UK”, which opened with the warning:

“Meeting the UK’s climate change commitments will be challenging if we do not apply carbon capture and storage (CCS) to new gas-fired power stations and to our energy intensive industries.”

It goes on to state that alternatives to CCS are likely to cost the UK more in the future to meet legally binding climate change targets as set out in the Climate Change Act 2008. The report went on to criticise the Government’s focus on investment in shale gas exploration and quoted the then Secretary of State for Energy and Climate Change as saying:

“In the next 10 years, it’s imperative that we get new gas-fired power stations built.”

The report concluded that

“the manner in which the carbon capture and storage competition was cancelled, weeks before the final bids were to be submitted and without any prior indication given to the relevant parties, was both disappointing and damaging to the relationship between Government and industry.”

There will be positive news for the Government on that later in my speech.

[Alex Cunningham (Stockton North) (Lab)]

I congratulate the hon. Gentleman on securing the debate. The National Audit Office said that CCS is still proving costly. The Treasury pulled the funding away before there was an opportunity to prove whether or not it was going to be too costly. CCS would provide such a major boost to industries such as those on Teesside, which include cement, steel and fertilisers. Does he agree that it is about time the Government re-engage? They are seen as disengaged at the moment.

[Philip Boswell]

I completely agree with the hon. Gentleman. There are signs that the Government will be considering that. I look to the hon. Member for Waveney (Peter Aldous) and the Minister to confirm that they will consider that in their strategies. The hon. Member for Stockton North (Alex Cunningham) is absolutely right about investment in a key industry. When I was in the project in Peterhead, the technology was basic. We were capturing 90% of the carbon. With advances in technology, we will increase that, and with economies of scale and improved technologies, it will be cheaper. While the report understands the difficult balancing act that the Government face with public expenditure, the delay in bringing forward any plans to implement CCS in the UK while proceeding with fracking means we will not remain on the lowest-cost path to our statutory decarbonisation target.

What of forward planning? On 26 February 2016 in an interview in Utility Week, the chief executive of the Committee on Climate Change, Matthew Bell stated:

“We’ve been very clear that, with the 2050 target in mind, it is much less expensive to meet if we’re able to develop successfully CCS. The government needs to come up with a very credible plan on how it’s going to push forward with CCS.”

Bell says that, without such a plan, that investment in the power sector, at least on the more conventional generation front, could suffer. Gas is being pushed by the Government as the bridging fuel in the transition towards a low-carbon economy, although no new combined-cycle gas turbine power stations have been built in the UK in the past six years.

Acknowledging what is widely expected to happen as coal-fired power stations leave the energy system, Bell said:

“Between now and the early 2030s, gas could have an increasing and significant role”.

He also said:

“However, from some point in the 2030s, if you’re going to hit the 80 per cent gas target and don’t have CCS, then gas has to be virtually off the system…That would imply that during the course of the 2030s gas has to play a declining role – but there is a big ‘if’ there as that depends on CCS.”

--- Later in debate ---

[Philip Boswell]

The hon. Gentleman makes a good point. Now that we have chosen this path for the country, I hope that Brexiteers and remainers alike will make the best fist of it and work collectively with our European neighbours for the best, but he is right that we should do more in Britain and should focus on that. His point is well made.

[Alex Cunningham]

Further to the previous intervention, it is all the more important that, post-EU membership, we ensure we get our emissions-trading regime correct to protect the industries I mentioned in my earlier intervention.

[Philip Boswell]

Again, I agree completely with the hon. Gentleman. Given the coal mining in Europe for power generation and having to deal with climate change, we certainly ought to look at that.

Shortly before the demise of the Department of Energy and Climate Change—it is now the Department for Business, Energy and Industrial Strategy—it commissioned a study from the Energy Technologies Institute to examine where CO₂ clusters and commercially viable storage could be developed around the UK by 2030. The study identified five locations. Only one is deliverable right now, and I will spend a few moments describing how that so-called Acorn project could grow into a mighty oak tree of carbon capture, transport and storage.

To get a CO₂ takeaway network to operate, we need to gather CO₂ from multiple sources onshore and to transport it to the coast through a pipe and then through an offshore pipe to its carbon storage destination. St Fergus in north-east Scotland is the offshore oil industry equivalent of Clapham Junction. Many of the gathering pipes from the North sea bring oil and gas to landfall at St Fergus, which has a huge amount of pipeline infrastructure and processing equipment available. With the decline of North sea activity in certain fields, some of that equipment is no longer required.

Specifically, pipelines from St Fergus to the Atlantic and Goldeneye gas fields have now ceased hydrocarbons transport and are in fact scheduled to enter a decommissioning process. Onshore, three facilities service different offshore pipeline networks and produce about 400,000 tonnes per year of carbon dioxide, which at the moment is vented into the atmosphere. The Acorn project aims to capture and store that CO₂. The SAGE—Scottish Area Gas Evacuation—plant is also in St Fergus but, given the time, I will move on to allow other Members the opportunity to speak.

What of the Government’s new industrial strategy? My colleague the hon. Member for Waveney will discuss that in more detail, so I will touch on it only lightly. Publication this month of the initial “Building our Industrial Strategy” Green Paper is the first step towards introducing a new, engaged Government-industry relationship, which is to be commended. The paper invites engagement and comment, and is most welcome. I urge the Minister to include CCS in the final strategy, and ask him to give assurances today that CCS will be considered carefully and implemented as one of the many steps into Britain’s new industrial future, which looks to both industrial development and a greener, cleaner industrial future for our children and our children’s children.

The summary of the key findings of the CCS parliamentary advisory group’s report states:

“CCS is essential for lowest cost decarbonisation

1. This report addresses the policy disconnect that arises between the previous Government’s cancellation of the…CCS …competition on grounds of cost and the advice it received from a number of independent policy bodies that CCS was an essential technology for least cost decarbonisation of the UK economy to meet international agreements (most recently Paris 2015).

2. The Committee on Climate Change…recently reported the additional costs of inaction on CCS for UK consumers to be £1-2bn per year in the 2020s, rising to £4-5bn per year in the 2040s…The group agrees carbon capture and storage is an essential component in delivering lowest cost decarbonisation across the whole UK economy.

CCS works and can be deployed quickly at scale…Current CCS technology and its supply chain are fit for purpose”—

as I said, CCS works are shovel-ready—

“UK action on CCS now will deliver lowest cost to the consumer. There is no justification for delay. Heavy costs will be imposed on current and future UK consumers by a continued failure to enact an effective CCS policy…Ample, safe and secure CO₂ storage capacity is available offshore in the rocks deep beneath UK territorial waters and this represents the least cost form of storage at the scale required…CO₂ re-use, such as enhanced oil recovery and the production of materials such as building products, already exists and should continue to be encouraged,”

but it will not be able to deal with the huge volume required to make a difference in meeting our climate change targets. The summary continues:

“The lowest cost CO₂ storage solution for the UK at the scale required will be offshore geological storage in UK territorial waters. There is no reason to delay…

CCS in the power sector has an essential enabling role.

CCS has direct or indirect implications for the decarbonisation of all four of the major fossil fuel consuming sectors of the UK economy—industry, power, transport and heating. They need to be considered together so that synergies of a common infrastructure can be exploited…

With some 200TWh/year of new clean power generation needed in the UK system in the 2020s fossil fuels with CCS will play an important role as a cost competitive and potentially flexible power generation technology.

There is a widespread view that CCS has to be expensive. On the contrary, the high costs revealed by the earlier UK approaches reflected the design of these competitions, rather than the underlying costs of CCS itself.”

The poor design in the second CCS competition

“led to the lack of true competition and the imposition of risks on the private sector that it cannot take at reasonable cost for early full-chain”

development. The summary also states:

“Previous third party analysis by the CCS Cost Reduction Taskforce and for the Committee on Climate Change as well as analysis performed for this report show full-chain CCS costs at c.£85/MWh under the right circumstances. This report concludes that, under the right conditions as set out in this report, even the first CCS projects can compete on price with other forms of clean electricity.

To ensure that least cost CCS is developed when earlier approaches have foundered a CCS Delivery Company…should be established that will initially be government owned but could subsequently be privatised”

if the Government so wish. The summary continues:

“This company will have the responsibility of managing ‘full-chain’ risk and will be responsible for the progressive development of infrastructure focused on industrial hubs to which power stations and other emitters could deliver CO₂ which, for a fee, will be pumped to appropriate storage.

The CCSDC will comprise two companies: ‘PowerCo’ tasked with delivering the anchor power projects at CCS hubs and ‘T&SCo’ tasked with delivering transport and storage infrastructure for all sources of CO₂ at such hubs.”

It is clear that we must think and act more holistically about our energy needs and uses, and the inevitable effects of our behaviour on our planet. I hereby recommend that CCS be included in the Government’s new industrial strategy for the benefit of everyone in the UK now and in the future, as our children and our children’s children will be presented with our bill should we get this wrong again.

--- Later in debate ---

[Peter Aldous (Waveney) (Con)]

It is a pleasure to serve under your chairmanship, Mr Betts, and I will do my best. I congratulate the hon. Member for Coatbridge, Chryston and Bellshill (Philip Boswell) on securing this debate, which comes at a particularly opportune time, following the publication yesterday of the Government’s Green Paper, “Building our Industrial Strategy”.

I served with the hon. Gentleman on the group chaired by the noble Lord Oxburgh, which published its report on the future of CCS last September. I commend the noble Lord on the way he chaired the group and for looking at all the evidence, seeking out all views and arriving at what I believe are sound and sensible recommendations that the Government should put into practice as soon as possible. It should be noted that the report has been welcomed globally and the noble Lord has been invited to such countries as Norway, Australia and Canada to talk about it.

The group’s membership was wide-ranging and cross-party, and included independent experts from the fields of industry and research. We heard from a wide range of witnesses who work in research and development, industry, and banking, as well as groups such as the Committee on Climate Change. We set out with no preconceived ideas about what our conclusions might be, mindful that the Government’s cancellation of the CCS competition on cost grounds might mean that CCS was a non-starter. We considered a wide range of evidence and concluded that CCS has a crucial role to play if the UK is to deliver the emissions reductions to which it is committed at the lowest possible cost to consumers and taxpayers.

[Alex Cunningham]

I am grateful to my fellow co-chair of the all-party parliamentary group on CCS for giving way. CCS could be a game-changer for areas such as Teesside; it could drive investment and improve air quality. The Teesside Collective is showing great leadership on plans in that area. There are also plans for a large gas-fired power station, but those are being frustrated by a complicated planning process. Does the hon. Gentleman agree that the Government need to simplify that process while ensuring that plants are CCS-ready so that we can exploit them properly?

[Peter Aldous]

I agree that CCS has an important role to play in the regeneration of coastal communities and perhaps areas that have been forgotten over the last few years. That includes the area that the hon. Gentleman represents, many areas in Scotland and the area that I represent.

The report contains six recommendations for how CCS can perform that crucial role. I believe that we reached the right conclusions, for three reasons. First, the UK has made commitments, through the Climate Change Act 2008 and international agreements, to reduce carbon emissions. Those were most recently reconfirmed in Paris in autumn 2015. As a result, we have a duty to put in place measures that will enable us to get on with meeting those targets at the lowest possible cost to the country’s consumers and taxpayers.

It quickly became apparent to the group that we cannot get on with that without CCS. The great advantage of CCS is that it is a highly strategic technology that can deliver emissions reductions across many sectors, including, as we have heard, power generation, energy-intensive industries, heat and transport. It should also be pointed out that CCS has the potential to safely store 15% of current UK CO₂ emissions by 2030 and up to 40% by 2050.

There is a cost associated with inaction on CCS. Last summer, the Committee on Climate Change highlighted that if we take no action on CCS, the cost to UK consumers will be £1 billion to £2 billion per annum in the 2020s, rising to £4 billion to £5 billion per annum in the 2040s.