Andrea Leadsom
Main Page: Andrea Leadsom (Conservative - South Northamptonshire)(8 years, 7 months ago)
Commons ChamberRead Full debate Read Hansard Text
Christina Rees (Neath) (Lab)
18. What steps her Department is taking to promote investor confidence in low-carbon energy generation.
The Minister of State, Department of Energy and Climate Change (Andrea Leadsom)
I welcome the shadow Secretary of State to her position, and in particular I welcome Otis, who I gather was born only a few months ago. That is fantastic, and I congratulate the hon. Lady on being here so soon afterwards. I wish her every success in her new role.
The Government remain totally committed to our green energy future and to tackling climate change. The success of our renewables programme has exceeded expectations, which means that we are on track to meet our targets comfortably. A key priority for the Government is to keep consumer bills down and limit the cost to hard-working families, while ensuring that the UK remains an attractive location for all forms of low-carbon energy.
Margaret Greenwood
The Government are axing support for onshore wind earlier than expected, cutting feed-in tariffs for solar, and ending the exemption for renewables from the climate change levy. If renewables really are the future for our energy supply, what action will the Government take to repair investor confidence?
Andrea Leadsom
That is an incredibly important question. More than £42 billion has been invested in renewables, nuclear and CCS since 2010, and 2014 was a record year with more than £8 billion being invested. The Government remain committed to our long-term, low-carbon future in all areas of low-carbon generation. As the hon. Lady will appreciate, we must also consider our other priorities, such as keeping bills down for consumers. The policy reset that we are undertaking is about ensuring that through our success in generating renewables, we do not impact in a devastating way on the bills of hard-working families in this country.
Christina Rees
Will the Minister outline when the contract for difference negotiations on the Swansea bay tidal lagoon project are likely to be concluded? My constituents in Neath are eagerly awaiting the job opportunities and apprenticeships that will follow.
Andrea Leadsom
The hon. Lady will be aware that the Government are incredibly keen on those new technologies, and we are looking closely at that tidal lagoon and doing our due diligence. The Government would like to support that project, but it must of course offer value for money. It has gone through the first stage of the process and it will take some time, but I assure the hon. Lady that that project, and other firsts for the UK, are on this Government’s agenda.
Peter Aldous (Waveney) (Con)
East Anglia Offshore Wind, which will be developing the UK’s largest offshore wind farm, has the objective of being subsidy-free by 2023. Can the Minister confirm that the Government will set out a clear vision that will enable the industry to plan properly for the future, both to achieve this goal and to maximise the creation of British jobs?
Andrea Leadsom
As I am sure my hon. Friend will be aware, the UK is the world’s No. 1 in offshore wind. We are fully committed to the continued growth and development of that sector. As part of the spending review, we need to look at the impact on consumer bills and make sure that we can manage the ongoing development to reach that subsidy-free point while not impacting too much on the bills for hard-working consumers. We will set out our plans later this year.
Neil Carmichael (Stroud) (Con)
Does the Minister agree that the progress so far on new renewables sets the scene for even more investment in research and development, and that we need to have a clear pathway for that to happen so that we can encourage more investment, the strengthening of supply chains and the export of these technologies?
Andrea Leadsom
Yes, my hon. Friend is right. That is exactly what we want to do. We want to continue to support the growth of the renewables sector. I have already explained that there has been £45 billion of investment since 2010 in this sector and we want to encourage it further. We have to do that in the light of what is affordable for bill payers. At the same time we want to encourage new forms of renewables and keep Britain at the forefront of renewables technologies.
Caroline Lucas (Brighton, Pavilion) (Green)
Will the Minister explain how she can possibly think that investor confidence will be enhanced by taking yet another wrecking ball to the British solar industry with the enormous subsidy cuts, alongside ending pre-accreditation? On the latter issue, the Government’s own consultation concedes that her Department has not even bothered to estimate the likely impact on deployment. With tens of thousands of jobs at risk, will she withdraw this now and stop all the waffle about consumer bills? If she were serious about consumer bills, her Government would not be subsidising fossil fuels and nuclear to the extent that they are.
Andrea Leadsom
I am afraid the hon. Lady has not done her homework. She should be aware that it is a requirement of EU state aid that we regularly review the subsidies to ensure that we are not overcompensating the sector. That is exactly what we are doing. We are now in a consultation which closes on 23 October. I am sure she will give her response to that. As I keep repeating, we want to ensure that we are not impacting negatively on consumer bills, but at the same time we are supporting this very valuable and growing sector to become subsidy-free within the next few years.
Martin Vickers (Cleethorpes) (Con)
I welcome the Minister’s earlier replies, but she will know that there is a lack of confidence and certainty in the offshore industry, which is vital to the future economy of my constituency. Can she assure me that when she visits north-east Lincolnshire later this month, she will have a positive message for the industry representatives?
Andrea Leadsom
I can assure my hon. Friend that I will always have a positive message. I am very much looking forward to my trip to Humber and Lincolnshire. While I am there I will seek to reassure investors and project managers that it is our intention to continue to support and promote the very important renewables technologies in which, particularly in offshore, Britain is world No. 1.
Callum McCaig (Aberdeen South) (SNP)
May I add the welcome of the SNP to the hon. Member for Wigan (Lisa Nandy)? We look forward to working together where there are shared interests.
On the renewables obligation for onshore wind, it will come as no surprise to the Minister that the SNP is opposed to that closure. The implementation of the Government’s policy is causing additional and unnecessary difficulties through lack of finance owing to the lack of clarity about grace periods. Will she clarify when her Department will produce the grace period provision clauses to the Energy Bill, and will she consider a flexible approach where there is an element of community ownership involved in a project?
Andrea Leadsom
As the hon. Gentleman will know, we are looking very carefully at the consultation responses on the grace periods, and we intend to publish our response as soon as we can. That will be within the next few weeks, as part of the process of the Bill’s passage through the Lords. As he will realise, around 30% of the total support under the RO goes to Scottish projects, and we are delighted that Scotland still forms part of a GB-wide energy sector. That is very important for Scotland and for the whole UK.
Julie Elliott (Sunderland Central) (Lab)
It is estimated that 22,000 jobs could be lost as a result of swingeing cuts of up to 87% in the solar industry. Will the Minister confirm that the potential loss of jobs was not taken into account in her decision to cut support for solar power? Can it be right or proper for a formal consultation to ignore such harmful effects on the industry and on the thousands of families whose lives will be affected by these changes, including, as both Ministers have mentioned, their ability to pay their energy bills?
Andrea Leadsom
The hon. Lady is completely wrong to say that we have not considered all aspects of the consultation on reducing subsidies. She will appreciate that, because it is a consultation, it is only as a result of that consultation—which, as I say, closes on 23 October—that we will be able to assess the impact properly and then to make a decision. As I have said a number of times, we are fully committed to the ongoing development and progress of this very important sector. All jobs in the sector are of course extremely important and we will be doing everything we can to ensure that it continues to grow.
Helen Goodman (Bishop Auckland) (Lab)
3. What assessment she has made of the potential effect of Government policy measures announced since May 2015 on carbon dioxide emissions.
The Minister of State, Department of Energy and Climate Change (Andrea Leadsom)
The Government are fully committed to the oil and gas industry. In fact, the first visit that I made as the Minister was to Aberdeen. The industry is vital to our energy security, and it supports about 375,000 jobs across the United Kingdom. We fully recognise the huge challenge presented by lower oil prices, and accept the Oil and Gas Authority’s Call to Action report. The OGA is working with groups such as the Scottish Energy Jobs Taskforce to encourage companies to consider all possible alternatives to redundancy, as well as ensuring that we keep the vital skills that we will need in the future.
Stuart Blair Donaldson
I welcome the OGA’s early identification of the need to support a technology and innovation strategy. What measures will the Minister introduce to encourage technology and innovation, and to boost efficiencies in the oil and gas sector?
Andrea Leadsom
As the hon. Gentleman will know, the legislation to establish the OGA formally is currently being dealt with in the House of Lords. The authority’s key responsibility will be to maximise the economic recovery from the North sea basin, and it is already fully employed in that respect. The Government have made some fiscal changes to promote investment, and, importantly, we have also invested £20 million in seismic surveying of under-explored areas in the North sea basin to try to identify new opportunities for businesses that are based there, in order to encourage the investment that we so badly want.
Kirsty Blackman (Aberdeen North) (SNP)
17. Thank you, Mr Speaker. I am sorry; I was slightly thrown.I would appreciate it very much if the Minister would tell us what action the Government are taking to ensure that decommissioning is delayed for as long as possible. A total of 375,000 people are employed in the industry, directly and indirectly, and many of them are based in my city of Aberdeen.
Andrea Leadsom
You threw me as well, Mr Speaker, but I get the point.
I am entirely sympathetic to what the hon. Lady has said. We all agree on the need to avoid decommissioning for as long as possible. The OGA is working with operators throughout the supply chain to try to increase co-operation in relation to, for instance, supply ships, and to ensure that they share resources rather than saying, “That is mine, so you cannot have it.” A great deal of work is being done, but key to this will be looking at the long-term possibilities for new exploration. I hope the hon. Lady welcomes the new Culzean project near the Shetlands, which has just been given the go-ahead. That is a good example of what we can do if we all work together.
Callum McCaig (Aberdeen South) (SNP)
May I commend you, Mr Speaker, for the element of surprise that you are introducing to our proceedings?
According to the OGA’s report, more than 5,000 jobs were lost in the sector last year, but analysis carried out by Oil & Gas UK suggests that the wider impact on the industry could involve the loss of some 60,000 jobs. The industry’s calls for support must be listened to. A survey of 450 industry leaders, conducted by the Press and Journal’s Energy Voice, found that there was an overwhelming demand for tax breaks to boost exploration in the North sea, and those calls were echoed yesterday by the National Union of Rail, Maritime and Transport workers. Does the Minister agree with me, and with industry leaders and trade unions, that the Government must provide incentives to encourage exploration and protect jobs?
Andrea Leadsom
As the hon. Gentleman will know, the Chancellor introduced some strong fiscal measures in the March Budget to maintain and build investment, including a reduction in the supplementary charge, introducing a new investment allowance and a reduction in the petroleum revenue tax from January 2016, and we will continue to look closely at what else we can do to provide that fiscal support for further exploration and to keep the oil and gas sector thriving in the North sea basin.
Sir David Amess (Southend West) (Con)
9. What areas of co-operation on green growth the UK is exploring with China.
The Minister of State, Department of Energy and Climate Change (Andrea Leadsom)
The FITs review covers a wide range of technologies for which deployment across the UK varies depending on the specific benefits of that region. For example, there is more solar deployment in the south-west and more wind in Scotland and the north. The effects of the review will therefore affect all in different ways, and the impact assessment acknowledges this.
Drew Hendry
Just this week the National Farmers Union Scotland expressed deep concern that the FITs proposals will have a damaging impact on those looking to diversify. Why did the Government not consider a steady and more gradual reduction of FITs for small-scale solar and wind as recommended by the industry itself in a strategy published last year?
Andrea Leadsom
As I think my right hon. Friend the Secretary of State and I have made clear, this review is required under EU state aid rules and it is now out for consultation. We hope the NFU and other organisations will feed in their response to the consultation, which closes on 23 October, and only at that point will we look at the right balance between keeping bills down and continuing to support the industry.
Steve Double (St Austell and Newquay) (Con)
Many people in Cornwall feel we have been overrun by wind turbines and solar farms, and may I assure the Minister that the recent changes announced have been warmly welcomed by many people in Cornwall? Does she agree with a constituent of mine who recently wrote to me asking me to thank the Government for their recent decisions because they have saved Cornwall?
Andrea Leadsom
Cornwall is a beautiful place and all of us will probably have had fantastic holidays there and would not like to see it overrun by something unsightly, so I can sympathise with my hon. Friend. I am always grateful for thanks; we do not get much of it in government, so I ask him to thank his constituent for thanking us. We are still in a consultation period, however, but this is an important sector and we want it to continue to be successful.
Alison McGovern (Wirral South) (Lab)
Let me tell the Minister, in case she is not aware, that the north-west of England is a beautiful region as well.
Green energy is vital to our economic future and I am afraid that companies such as Natural Energy Sources based in Bromborough in my constituency simply would not recognise the Government’s account of what they have done, given the risks they have created for the solar industry. I ask the Minister to think again, do as so many Members have suggested, and restructure this change to feed-in tariffs.
Andrea Leadsom
I understand what the hon. Lady says, but there has been a lack of understanding about what we are trying to do. We have been enormously successful in supporting renewables. The generation, particularly of solar energy, has far exceeded expectations, and we are on course to meet our legally binding targets, so in a sense we are victims of our own success. As the hon. Lady will appreciate, in this country we have the trilemma of energy security, decarbonisation and keeping the bills down. The problem is the more we subsidise and the longer we subsidise excessive deployment, the more it costs the bill payer.
Christopher Pincher (Tamworth) (Con)
11. What steps she is taking to increase competition in the energy supply market.
The Minister of State, Department of Energy and Climate Change (Andrea Leadsom)
This is a very important issue for those living on the Scottish islands, and I want to assure the hon. Lady of the Government’s support. The work of the Scottish Islands Renewables Delivery Forum was discussed by the Secretary of State and Fergus Ewing on 8 June and 24 June. I am looking forward to co-chairing the next meeting of the forum in Glasgow with Mr Ewing next Monday. My office has invited the hon. Lady to meet me there, and I look forward to seeing her if her diary allows.
Carol Monaghan
In January, the Prime Minister committed to the deployment of renewable energy on Scottish islands, and the previous coalition Government pledged to publish information about the remote island wind contract for difference by July 2015. It is now the autumn and we have had no further detail on the CfD for remote island wind, which is critical to release the potential of remote island renewables generation. When does the Minister plan to publish those important details on the CfD scheme?
Andrea Leadsom
The Government are actively seeking EU state aid approval to ensure that we can treat remote island wind as a separate technology to onshore and offshore wind, as they operate in high wind areas with very challenging conditions. We are awaiting that approval, and, as the hon. Lady knows, we will be making announcements about CfD rounds later this year.
Ian C. Lucas (Wrexham) (Lab)
T1. If she will make a statement on her departmental responsibilities.
Stuart Blair Donaldson (West Aberdeenshire and Kincardine) (SNP)
T5. Stability and simplicity are key for oil and gas operators to make investment decisions, but there have been more than 18 changes to the oil and gas fiscal regime in the past 15 years. Will the Secretary of State reassure me and the industry that there will be no tax rises for the industry for the remainder of this Parliament?
The Minister of State, Department of Energy and Climate Change (Andrea Leadsom)
The hon. Gentleman will appreciate that that is really a question for my right hon. Friend the Chancellor, but I think he will accept that the Chancellor has taken great steps to try to improve the fiscal regime to encourage more oil exploration. By creating the Oil and Gas Authority, we have shown our commitment to trying to ensure that we maximise the economic recovery from the North sea basin.
Alex Chalk (Cheltenham) (Con)
T4. What assessment has been made in light of potential reductions to the feed-in tariff of the UK’s ability to meet its targets of cutting carbon emissions by 80% by 2050 and generating 15% of our energy from renewables?
Mr Speaker
I am sorry, we do not wish to deprive the Minister of her answer. I apologise that I was ahead of myself, but we will digest her answer, which I am sure will be brief.
Andrea Leadsom
I am grateful, Mr Speaker. As my hon. Friend the Member for Bury St Edmunds (Jo Churchill) will be aware, the feed-in tariff has been hugely successful in encouraging the generation of low-carbon energy for homes and businesses. We appreciate that pre-accreditation was widely supported as it enabled people to book their tariff, but the problem is that there is a tension between the cost to consumers and the value of the subsidies. We need to get that balance right.
Clive Lewis (Norwich South) (Lab)
Is the Minister aware of the concern among staff at the Nuclear Decommissioning Authority about changes to their pensions and will she agree to meet the relevant trade unions to discuss that?
Andrea Leadsom
The hon. Gentleman’s right hon. Friend Lord Hutton’s report on public service pensions was adopted by the Government in 2013 and set out the direction of travel for all public sector pensions. We are in close discussion with the NDA on how we can implement that, bearing in mind the particular sensitivities of Sellafield and other nuclear sites. I am very happy to meet the unions to talk about it, as I have previously.
Tom Pursglove (Corby) (Con)
Chinese steel dumped on the European market is bad not only for British business but for the environment, so does the Minister agree that the best thing to do for the environment and for securing greener growth is to buy British?
Peter Aldous (Waveney) (Con)
Notwithstanding the fact that the oil and gas industry is currently facing serious challenges, the southern North sea has the twin advantages of significant untapped gas reserves and a low cost base. Can the Secretary of State confirm that she will be bringing forward policies as quickly as possible that will meet the nation’s requirement for more gas and protect and create jobs?
Andrea Leadsom
I can assure my hon. Friend that we are doing everything we can to improve exploration of the further potential in the North sea, and he is right to point to the gas reserves in the southern North sea. Of course, the beauty of this is that gas is the cleanest fossil fuel, so it can also help to meet our decarbonisation objectives.
Helen Hayes (Dulwich and West Norwood) (Lab)
This week I had a meeting with Sustainable Energy 24, a community benefit society established to deliver solar panels on public and community buildings in my constituency. It told me, in relation to the cut in the feed-in tariff and the ending of pre-accreditation:
“It is hard to see how any community energy group can continue on this basis.”
Can the Secretary of State tell me why the impact on community energy companies was not considered ahead of the consultation and provide reassurances that the consultation response will address that very important issue?