Low-carbon Off-gas Grid Heating

Ben Lake Excerpts

Thursday 16th June 2022 Westminster Hall

[Ben Lake (Ceredigion) (PC)]

It is a pleasure to serve under your chairmanship, Sir Christopher. I begin by congratulating the right hon. Member for Clwyd West (Mr Jones) on bringing this very important and timely debate before the House this afternoon. I will underline and support most if not all of the remarks that he made. He made a very powerful case in favour of the Government pausing, taking a step back and reconsidering their approach to decarbonisation of heating fuel for rural households, for the following reasons. On average, rural households tend to have been built a lot longer ago, so the energy efficiency is somewhat lower. Also, something that we need to bear in mind—we do not do that enough, in my opinion—is the discrepancy between average rural incomes and those of our urban counterparts, which the right hon. Member made very clear in his speech.

I am very grateful for this opportunity to speak not only about the impact that the transition will have on households, but about the impact on businesses. In recent times, when we have understandably been focusing a lot on the cost of heating for domestic households, the impact that rising prices are having on businesses has often been missed, and many of my constituents have raised it as a real concern for them. I would like to elaborate in a moment on their case studies.

I fully support the right hon. Member’s calls for the Government to pause and reconsider their approach. I was particularly struck by his argument about needing a just and fair transition as we decarbonise the economy. I fully agree that we need to decarbonise our society and economy, but it has to be done in a just and fair way. Otherwise, it is not realistic and will, at worst, place a substantial cost on the shoulders of those who can least afford it. I very much endorse his remarks.

This debate is timely. Rising prices have caused a great deal of concern and worry for households and businesses across the country. Following April’s energy price cap increase, the Welsh Government estimated that some 45% of households in Wales could fall into real fuel poverty. Although the energy price cap offers some solace to those lucky enough to be included in it, it is not applicable to off-grid homes and businesses. They have been exposed and are vulnerable to sky-high prices that are increasing at a rapid pace. This is especially true in rural areas such as Ceredigion. According to the mid Wales energy strategy proposed by the Growing Mid Wales partnership, as many as 72% of properties in Ceredigion are off the mains gas grid.

My constituents are therefore particularly exposed, both to the recent increases in the price of heating fuel and to any policy changes the Government might bring in to decarbonise their fuel source. We know—but it bears repeating—that prices have typically increased by some 150% over the past year. Eye-watering sums have been quoted for some of my constituents. On top of the fact that so many households and properties in Ceredigion are not connected to the mains gas grid, our housing stock is very inefficient, primarily because it is quite old. In neighbouring Gwynedd, some 56% of the housing stock was built before 1945. In Ceredigion, only 36% of homes reach a C rating on the energy performance certificate standard.

As part of this conversation about how we transition and decarbonise fuel sources for off-grid properties, we seriously have to look at energy efficiency measures. The right hon. Member made the case far more eloquently and persuasively than I could, but I will reiterate that if we are serious about this, we need to improve the energy efficiency of our housing stock. Only 2% of homes in Ceredigion were built after 2012. The vast majority of the housing stock to be built for Ceredigion by 2050 has already been built. We need to renew our focus on energy efficiency measures.

We also need to accept the fact that for many rural households this will entail greater Government support. The case has been made already, but I want to reiterate it. Rural households tend to have lower incomes than our urban compatriots. We cannot afford some of the measures that have been proposed. Many of my constituents would desperately like to insulate their homes, improve the efficiency of their homes and install a number of measures, including in some instances heat pumps—be they air-source or ground-source heat pumps—but they simply cannot afford the cost.

I would like to mention the impact that the current crisis is having on businesses. We need to think about how we include them in our efforts to decarbonise our off-grid properties. One hospitality business in Ceredigion —it is off-grid—has informed me that its energy bills have increased by some 450%. It is, without putting too blunt a point on it, making them consider whether they can continue in business. It is otherwise a very profitable, successful business, but this hike in fuel prices for off-grid heating has caused them to consider their future. I do not think that good businesses like that should be allowed to fail because of the current crisis. As part of the debate, we need to look at interim measures that the Government may wish to consider in order to give them some short-term support. That business is very confident that if it can ride out this current storm, it can return to a very profitable, successful situation.

In addition to businesses, we need to remember the community groups and assets in rural areas and in off-grid properties that are also suffering. This morning I spoke to the people who run Calon Tysul, a community-run swimming pool in in Llandysul in the Teifi valley. They informed me that they are now spending as much as £1,500 a week just on fuel to heat the swimming pool, not accounting for the heating costs for the other section of the facility. They are already having to consider very difficult decisions, which they do not want to make, about scaling back swimming lessons and the like.

That group is in an interesting situation, because it does have plans to decarbonise its heating sources—for example, it plans to instal solar panels, which will drastically reduce elements of its heating and energy bills. The problem is the timescale. The group cannot quite make it through the current six-month period without having to seriously scale back their operation. So my question for the Government is: what interim, short-term measures can we put in place to help organisations such as Calon Tysul, and other community swimming pools and leisure facilities, to see out the current storm?

I fully support the need to decarbonise our housing emissions and the fuel for off-grid properties in general. The Department for Business, Energy and Industrial Strategy has estimated that some 20% of our off-gas grid homes are technically unsuitable for low-temperature heat pumps, but analysis, undertaken by firms such as Equity, found that 44% of rural homes currently using heating oil can be considered “hard to treat” when the cost of the transition is taken into account.

I have already mentioned the age of the housing stock in many rural areas, which is a real issue. As the right hon. Member for Clwyd West mentioned, we not only need to consider the cost of the measures themselves, whether heat pumps or something else, but the associated installation requirements have to be put in place for people to get the best out of the technology. The right hon. Gentleman quoted the heat and buildings strategy and its assessment of the current cost of heat pumps, but for the average off-gas grid home it is £12,000, and potentially a further £2,000 if measures such as cavity wall insulation are included. I realise that the heat and building strategy refers to the cost for the average off-grid home, but we need to reiterate the fact that in many parts of the UK the cost will be far greater.

I think of my own constituents in Ceredigion, where some 35% of homes were constructed before 1900. Over a third of the properties in Ceredigion were built in the 19th century, which is striking. I am not an expert, but I would imagine that the cost of insulating those homes and bringing them up to the relevant EPC rating to allow them to benefit from measures such as heat pumps will be significant. I am not surprised in the least that a whole range of analysis has suggested that households living in such areas will find it almost impossible to afford the up-front cost of many of these measures.

I know I am repeating myself, but it is important to make the point that we need to improve financial support for these households. Many of them will be able to afford other measures—I am not saying they are struggling, as such—but they will not be able to afford the additional cost of retrofitting their homes and installing some of these low-carbon technologies.

I am conscious that I am at risk of detaining the Chamber for too long, but I would like to ask the Minister a couple of questions and I would be grateful if he could address them in his response. We know there are various support measures for hydrogen development, for example, but there are questions about the extent to which they will be applicable to rural off-grid homes. The Minister and I had an exchange in the Welsh Affairs Committee on this point, and I am interested to know his thoughts on supporting the roll-out of local carbon gas alternatives such as BioLPG, as mentioned by the right hon. Member for Clwyd West. It is drop-in technology that could well offer us a short to mid-term solution if we are keen to decarbonise homes in rural setting.

I end by asking the Minister how we can support rural properties, whether domestic households or businesses and community groups, to weather the current storm. I know that there are a whole range of exciting projects in Ceredigion, where we have housing associations retrofitting houses. We have groups such as Llandysul, with some plans in the pipeline, but they face a period of six to nine months of real difficulty. Is there something that the Government could do as a short-term measure, just to see them through?

One couple who live in an off-grid house have contacted me to say that they have been quoted over £1,000 to fill their oil tank. That is more than their monthly income as a couple, and the problem is that they have been told they cannot place orders for volumes less than 500 litres. If it were possible to have some clarification on that point, it would be very welcome, because other households in Ceredigion have also told me that they would be able to afford 250 litres at the moment, but the 500-litre minimum is a stretch for them at current prices, and they cannot quite make it. I appreciate that that is a very short-term measure and that it is addressing an immediate problem rather than something in the future, but if we are talking about a just transition, we need to make sure that everybody comes along with us and that nobody shoulders a disproportionate amount of the cost of what we should all hope will be a shared endeavour.

--- Later in debate ---

[Greg Hands]

We have to think about the nature of that market, which I am satisfied the CMA has the ability to regulate. Although it involves an energy product, that does not mean that Ofgem, rather than the CMA, is best positioned to provide the oversight to prevent anti-competitive practices. There is a lot of Government support for off-grid properties, as there is for on-grid ones, including the £400 payment and the £150 council tax discount in England, with Barnett consequentials for Wales, Scotland and Northern Ireland.

[Ben Lake]

The Minister has jogged my memory. Some farmers have told me they have commercial electricity contracts to service their homes, and are therefore worried that they may not receive the £400 payment. I know the Government are looking at the technical details, so perhaps he could take that point back and ensure that it is addressed.

[Greg Hands]

Of course, energy prices for businesses attract a lot of very keen Government attention. The hon. Gentleman is right to suggest that there was a consultation on the workings of the scheme, which has closed; the Government will respond shortly. Energy costs for businesses is an area of active Government interest. We provide a lot of support for energy-intensive industries, and want to ensure that overall we have a sustainable position, whereby businesses are able to afford energy bills in order to continue the vital work that they do for us across the rest of the economy.

Many of the additional Government support measures, including the warm home discount, the winter fuel payment and the cold weather payment, are also available for those off the gas grid. Energy efficiency measures are a major area of Government investment, with £6.6 billion to be provided over the course of this Parliament. I have already mentioned the boiler upgrade scheme, which costs £450 million, and the home upgrade grant, which amounts to £1.1 billion.

As somebody who used to work in a swimming pool, I was intrigued by what the hon. Member for Ceredigion described as the difficulties facing the swimming pool in his constituency. The great news is that one of the Chancellor’s key announcements this year was the reduction of VAT on solar panels. I am sure Plaid Cymru was very supportive of the Chancellor’s overall package of measures, which will bring particular benefit to the swimming pool in the hon. Member’s constituency.

The use of hydrogen is an interesting question. Decisions will be made in the coming years on where we think hydrogen can be used as a source of heat. We will have to think about our hydrogen production capacity, and the alternative pressing needs for hydrogen, such as decarbonising industry and major forms of transportation, including maritime, heavy goods vehicles and aviation. There are a lot of potential uses of hydrogen, we will need to look at the option of using it to heat buildings before taking a decision, particularly given the other alternative uses of hydrogen.

The hon. Member for Ceredigion mentioned the rules around heating oil providers not providing less than 500 litres. I urge him to speak to the UK and Ireland Fuel Distributors Association, which is a helpful trade body. I think the basic problem is that providing small volumes of heating oil is likely to raise fixed costs, and therefore to make an inefficient market with ultimately more expensive provision. His motive is a good one—to try to make heating more affordable, in smaller pieces, for constituents who are facing trouble with their bills—but the perverse impact might be to raise the fixed costs of such deliveries, but I urge him to speak to UKIFDA, which is the real expert.

I congratulate the hon. Member for Strangford (Jim Shannon) on being the chair of the healthy homes and buildings all-party parliamentary group. We are of course keen to see Northern Ireland, like all parts of the United Kingdom—I stress that it is fantastic to have all four nations represented here today—play its full role in decarbonisation, and to ensure that it is supported during times of high prices. He said that he had learned that I speak to Gordon Lyons, the Northern Ireland Minister for the Economy, frequently and perhaps even weekly. In fact, I spoke to him only yesterday about ensuring that Northern Ireland’s renewable energy opportunities are boosted. The hon. Gentleman will also know that one of the key reasons that we are taking the approach that we are on the Northern Ireland protocol is to ensure that things such as the VAT cut on solar panels can be enjoyed as much by the people of Northern Ireland as by the people of England, Wales or Scotland. Watch this space; we are always keen to help in Northern Ireland.

The SNP spokesman, the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry), called UK Government support inadequate. Well, almost regardless of what we had announced as the level of support, I could have predicted that he would say that it was inadequate. I remind him—

Professional Qualifications Bill [Lords]

Ben Lake Excerpts

Report stage
Monday 14th March 2022 Commons Chamber

[Mr Deputy Speaker]

I call Ben Lake.

[Ben Lake (Ceredigion) (PC)]

I do not intend to detain the House for long, but it is a pleasure to rise to speak in support of Plaid Cymru’s new clause 5, which would require the Secretary of State or the Lord Chancellor to obtain the consent of the devolved Governments when acting in areas of devolved competence. Although I will not be seeking to divide the House on that, I hope that the new clause, alongside the repeated interventions of the devolved nations, will encourage the Government to reconsider their approach.

In its current form, the Bill represents an example of the Government legislating in devolved matters without having first secured the consent of Wales’s Parliament or, indeed, consent from any of the devolved nations. It betrays a blatant disregard for the constitutional framework of the UK, and further obscures the regulatory regime for workers, businesses and professional qualification providers.

Hon. Members should not mistake these concerns as mere trivial matters; they speak to the growing chasm of distrust between the Governments of the British Isles. Indeed, just last week, the Welsh Labour Education Minister accused the UK Government of acting in a manner that breaches the Sewel convention. Let us consider, for a moment, the implications of that statement: a Government Minister from one nation is accusing the Government of another of tearing up the constitutional convention that has been so instrumental in ensuring good governance and positive intergovernmental collaboration across our isles. That is what this Government and this Prime Minister are doing to the UK and that is why this Bill needs to be amended to respect the devolution settlement.

As I said, I will not be pushing our new clause to a vote tonight, but we will be supporting amendment 3 if it is put to a Division. I hope that Opposition Members as well as Government Members will acknowledge the seriousness of these constitutional concerns and accept the amendment as a first step towards government by consent, rather than imposition.

[Sarah Olney (Richmond Park) (LD)]

I rise to speak to amendment 3, which stands in the name of my hon. Friend the Member for North East Fife (Wendy Chamberlain). I am sorry to say that she is ill with covid, so I am here in her place.

The Bill allows UK Government Ministers to legislate on areas that would normally be under the authority of devolved Administrations. As it stands, there is no protection in place to allow the Scottish or Welsh Governments to revoke or amend these measures if needed. The entire reason we have devolved powers is to allow Ministers to make bespoke decisions that better reflect the needs of the local people and local economies.

The Minister’s statement that the purpose of the Bill is to ensure qualified professionals within the UK can work anywhere within the four nations clearly undermines the devolution settlement. We saw that with the United Kingdom Internal Market Act 2020 and we see it again here. Without the appropriate safeguards, the Bill further erodes both the powers we have in place in Scotland and in Wales, and the trust between our Governments. On many issues, the UK has subsumed EU law into UK law with a view to gradual divergence over time. We are concerned that this Bill takes a clean slate approach and may put the UK at a disadvantage when trying to fill vacancies at a time of acute shortages in some sectors. The Bill provides inadequate detail regarding its full intentions and scope, leaving provision open to interpretation. The Government must commit to ensuring the highest standards of professional qualifications are maintained and are not bartered away as part of any trade agreement.

Clause 7 would mandate the Secretary of State to set up an assistance centre for people looking to enter a qualified profession in the UK or people with UK qualifications looking to practise overseas. Regulators would be required to provide information to the assistance centre to allow it to carry out its functions. We welcome the provisions relating to a centre to provide advice on and assistance with entry requirements for those seeking to practise a profession in the UK, or those with UK qualifications seeking to practise overseas. The obligation to make arrangements for the assistance centre lies with the Secretary of State. Amendment 3, which we will be pressing to a vote, would require the Secretary of State to ensure that there are representatives for each of the devolved nations on the centre’s board.

The Law Society of Scotland has urged the Government to seek the consent of the devolved Administrations when setting up the assistance centre. We therefore think it imperative—this reflects the acknowledgement of the role of the devolved Administrations in earlier clauses in the Bill—for them to be consulted on the arrangements for its creation, and to be represented on its board.

Community Energy Schemes

Ben Lake Excerpts

Tuesday 30th November 2021 Westminster Hall

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

It is a pleasure to serve under your chairmanship, Mr Betts. Like other hon. Members, I commend the hon. Member for Bath (Wera Hobhouse) for bringing forward the debate. She set out clearly the benefits of community energy and how it would help on the path to net zero and to empower local communities. She also, importantly, set out the current barriers to setting up community energy companies. That was further illustrated by examples in the contributions of the hon. Members for North Devon (Selaine Saxby), for Brighton, Pavilion (Caroline Lucas), for Waveney (Peter Aldous) and for Strangford (Jim Shannon), and the right hon. Member for Leeds Central (Hilary Benn).

One barrier seems to be that it could cost upwards of £1 million to get set up for a generation licence. We have heard that the Licence Lite option under Ofgem simply is not working, so we need alternatives, and the Government must update rules that date back to the electricity network privatisation back at the end of the ’80s and the early ’90s. The hon. Member for Bath made important comments about bringing people on board. We need everybody to buy into the actions that we need to take to tackle climate change. If people get additional community benefits along the way, that is clearly a bonus.

[Ben Lake (Ceredigion) (PC)]

On that point, as my hon. Friend the Member for Carmarthen East and Dinefwr (Jonathan Edwards) has alluded to, not only do we need that community buy-in to allow for measures but, for too long, the energy system’s centralised nature has led to a disconnect between the consumer and the generation. By bringing them closer together, we may find that the typical consumer gains an appreciation of what is entailed in energy generation, which may bring beneficial behavioural changes on top of everything else.

[Alan Brown]

I completely agree. Actually, that touches on the point made by the hon. Member for Leeds Central that we have a grid system and a grid charging system still fundamentally based on where coal-fired power stations or nuclear power stations are sited. That needs a complete overhaul. I may touch on that a wee bit later.

Income Tax (Charge)

Ben Lake Excerpts

Thursday 28th October 2021 Commons Chamber

[Ben Lake (Ceredigion) (PC)]

Diolch, Mr Deputy Speaker. It is a pleasure to follow the hon. Member for Crewe and Nantwich (Dr Mullan). To start on a point of consensus, I agree that these are very difficult times and I, for one, do not envy the Chancellor for having to navigate some of the large events on the horizon.

In the course of the debate so far, a couple of themes have emerged as ones that we all want to highlight, but on which we perhaps have different points of view: climate, the cost of living crisis and levelling up. I hope to be able to comment on each in turn in the time that I have.

On the climate theme, I echo and share the bemusement of the right hon. Member for Doncaster North (Edward Miliband). In his opening remarks, he called into question the Chancellor’s commitment to net zero and the decarbonisation of the economy. In response, the Secretary of State referred the House to the net zero strategy that the Government announced last week as evidence of the Chancellor’s credentials. However, questions remain unanswered. The Institute for Government has suggested that the net zero strategy lacked detail on who will pay and offered only vague hints about a tax strategy to support the transition to net zero. In advance of COP26, we had hoped to see a bit more of that detail in yesterday’s Budget, but we did not receive it.

My hon. Friend the Member for Glasgow Central (Alison Thewliss) spoke eloquently on another theme that hon. Members have touched on: the cost of living crisis. She made a very good argument about how rising costs of living on the one hand and relatively low wage growth on the other have produced a situation where households are struggling. Government Members will perhaps accuse me of being negative or pessimistic, but we might agree that some of the OBR’s analysis is quite staggering. Real household disposable incomes across the UK are expected to grow by only some 0.8% over the next five years, and if we look at next year, we see that the OBR suggests that net inflation will peak sooner than expected and that growth will be only about 0.3%.

I do not think that I am being too negative and pessimistic, but if I am guilty of that, it may well be because—unless my accent has not already betrayed me—I represent a constituency in Wales. In Wales, gross disposable household income in 2019 was already only 80.5% of the UK average—the second lowest in the UK—so households in Wales, in particular, have experienced a longer-term cost of living crisis, which hon. Members from across the nation were very keen to see some action on in yesterday’s Budget.

I cannot deny that the announcements on the minimum wage and improvements to universal credit were welcome steps in the right direction, but welcome though the change in the taper rate and the working allowance were, they come on the back of about £6 million being taken from families in Ceredigion through the removal of the uplift.

The Chancellor and the Government were correct to remove the cap on public sector pay. Plaid Cymru has championed that for several years so we were very glad to see it included in yesterday’s Budget statement. However, questions need to be answered that will determine how much of a difference it will make to people in the public sector. Ceredigion has a high number of public sector employees, so an important question for us is: how much will public sector wages increase and how will that compare with inflation? That is not my being pessimistic; we just need to bear that concern in mind when we talk about whether some of these policies will be transformational and make a real difference to people’s pockets.

Let me focus on the rising costs of living. Energy bills have been mentioned and I agree with some of those concerns. Something that particularly affects rural areas such as Ceredigion is the price of fuel, and several hon. Members have spoken very effectively about that topic. The hon. Member for Merthyr Tydfil and Rhymney (Gerald Jones), the right hon. Member for Dumfriesshire, Clydesdale and Tweeddale (David Mundell) and the hon. Member for Newton Abbot (Anne Marie Morris) mentioned how the fuel duty freeze helps somewhat to insulate rural households against the rising cost.

We all acknowledge that the freezing of duel duty—I might even get plaudits for this from those on the Treasury Bench—is an incredibly expensive policy. We cannot deny that and it is reasonable to suggest that, in the not-too-distant future, we may need to reconsider whether the fuel duty policy is sustainable, not least for financial reasons, but also given our decarbonisation commitments. Should we come to that politically prickly and technical discussion, we should perhaps look to extend schemes such as the rural duty relief scheme so that those living in rural areas, who, at the moment, do not have the benefit of a sophisticated public transport infrastructure, should not have to shoulder the burden of unrealistic costs. That would also perhaps introduce an incentive, for areas that have the luxury of fantastic public transport, to choose to use public transport more often than cars. In rural areas, however, as I think hon. Members would acknowledge, there is not that level of choice at the moment, and, sadly, using a car is still a necessity. Whether they are nurses working in hospitals or teachers going to school, people need to use cars. In approaching the big questions of decarbonisation, we need to think about how to ensure that there is investment in public transport in rural areas so that abandoning cars is an option, but for the time being, 80% of commutes in Wales are still by car.

Another pressure that I hoped would be addressed yesterday is the added burden on small businesses from next year’s increase in national insurance contributions. When I speak to businesses in Ceredigion, they are grateful to the Treasury for VAT reductions; they have told me, especially in the hospitality sector, that they have been able not only to invest savings in their business to improve productivity and improve their offer, but to increase wages for staff. If we are serious about moving to a higher-wage economy, perhaps we could return to that point. It could be considered a missed opportunity in yesterday’s Budget, so I encourage Members on the Treasury Bench to think about it for the future.

The Federation of Small Businesses has asked for an increase in the employment allowance for small businesses and simplification of the process of making tax digital, both of which are concerns that businesses in Ceredigion have raised with me. Any movement on those fronts would be welcome: they would not only support employment and reduce the risk of higher taxes being passed on as higher prices, but offer much-needed support to our high streets.

I would like us to return to the discussion about retrofitting homes. It was a missed opportunity yesterday not to look at improving the energy efficiency of our housing stock. A report by the Future Generations Commissioner for Wales suggests that a commitment from the UK Government of some £360 million a year would go a long way towards bringing the quality of housing stock in Wales up to, I think, energy performance certificate rating C. The benefits are evident: it would not only create much-needed skilled jobs, but improve the efficiency of homes and reduce household bills by some £418 per year once the work was completed. It would also be good for the environment, of course.

I will leave it there, because I have run out of time. Thank you, Mr Deputy Speaker, for calling me so soon in the debate.

Supporting Small Business

Ben Lake Excerpts

Tuesday 19th October 2021 Commons Chamber

[Lee Rowley]

I am sorry, but I am going to make progress.

Entrepreneurs who take difficult decisions and face challenges every day on how to make their businesses grow will never fully succeed in a country that refuses to acknowledge that similar national choices are ultimately required. Back during the pandemic, we were clear that support was necessary, but we were also clear that it would be temporary. Even so, we have helped and we continue to help businesses during this recovery period.

We have been open for business for months now but we continue to help businesses recover: business rates relief will continue well into 2022, which is even acknowledged in the motion, meaning that eligible businesses will not have paid rates at all for 15 months and will have had a significantly reduced rate for a further nine months; there has been more than £2 billion of discretionary business grant funding to local authorities, including a top-up of nearly half a billion pounds, which is open until March 2022; we have had the recovery loan scheme, which allows businesses in the UK to continue to benefit from Government-backed finance until the end of the year; we have our pay as you grow scheme, which gives bounce back loan borrowers the flexibility to tailor repayments; and we have the lower rate of VAT, the £600 million start-up loans fund, the super deduction and an extension of the commercial lease evictions moratorium.

Just as they do naturally, British businesses are getting back on their feet and doing what they do best. We know that this is a difficult time and has been an extraordinarily difficult time, but I pay tribute to businesses for being able to get going again. A strong growth story is being shown by the level of unemployment, which has fallen for six months in a row and is now below 5%— lower than the levels in France, America, Canada, Italy and Spain; one of the fastest recoveries of any major economy in the world; business confidence being up; and job vacancies growing for eight consecutive months and at a record high.

The Labour party will never admit this, but the UK is a great place to do business. We have some of the lowest corporation taxes in the G20, the kind of lean regulation that puts us in the global top 10 for the ease of doing business and a highly skilled workforce. Next year, my right hon. Friend the Secretary of State will publish an enterprise strategy, which will set out how we want to revive Britain’s spirit of enterprise and help more people start and scale a business.

[Ben Lake (Ceredigion) (PC)]

The Minister mentions the reduced rate of VAT, which has been welcomed by a number of businesses in my constituency. May I invite him to comment on whether the Government have considered an extension to that? Many businesses in my constituency have informed me that that reduced rate has allowed them to invest in not only their businesses, but their employees’ wages—I am sure that is something we can agree on.

[Lee Rowley]

The hon. Gentleman is tempting me to make policy in an Opposition day debate, but I will step back from that, given that it is well above my pay scale.

Let me come back to the point about the UK being a good place to do business. It is easy to see why the UK is consistently home to one of the largest and most resilient economies in the world. All of this underlines precisely why the UK has long been a great place to do business and will continue to be so. That is why we are seeing so much excitement from the rest of the world, with investors here right now at the global investment summit. That shows just how attracted companies are to the business-friendly environment that we have.

The Government’s track record shows that we have been there for small and bigger businesses since the start of the pandemic; that we are now here to support them through the recovery; and that we will continue to create the conditions that will allow them to grow, thrive and innovate in future, as part of a dynamic, flexible market economy that supports private enterprise, backs entrepreneurs and recognises the importance of wealth creators in local communities.

UK Gas Market

Ben Lake Excerpts

Monday 20th September 2021 Commons Chamber

[Kwasi Kwarteng]

I spoke to the CEO of CF Fertilisers yesterday, and a number of hon. Members have raised that concern. We are trying to see how we can secure a constant supply of carbon dioxide.

[Ben Lake (Ceredigion) (PC)]

The loss of the IFA interconnector last week saw the UK lose two fifths of its capacity to import electricity from Europe, further increasing our dependence on natural gas. What pressure are the Government bringing to bear on National Grid to speed up these repairs and to invest the 19% increase to its pre-tax profits to better secure the UK’s energy network?

[Kwasi Kwarteng]

The hon. Gentleman is right to raise that issue. Clearly, to have interconnectors fail in the way they did last week, in the midst of a global gas price spike, is very concerning. We are looking at what went wrong and seeing what we can do with National Grid to hold it to account and to make sure that the risk of this happening again is minimised.

UK Emissions Trading Scheme: Wales

Ben Lake Excerpts

Tuesday 13th July 2021 Westminster Hall

[Ben Lake (Ceredigion) (PC)]

I beg to move,

That this House has considered the operation of the UK Emissions Trading Scheme in Wales.

It is a pleasure to serve under your chairmanship, Sir Edward. I commend the co-operative approach taken by the UK and devolved Governments in establishing the emissions trading scheme and in agreeing a common framework that treats each nation as an equal partner in our climate efforts. The scheme has brought coherence to one element of our combined efforts to achieve net zero.

There is, of course, room for improvement. I draw the Minister’s attention to concerns expressed by the Green Finance Observatory:

“The elephant in the room is that offsets are fundamentally not about mitigating climate change, or even about removing past emissions, but about enabling future emissions, about protecting economic growth and corporate profits.”

I hope that the Minister will reflect on those remarks when she sums up the debate. They raise two critical questions. First, how will businesses fundamentally reduce aggregate emissions, and do so rapidly? Secondly, what is the role of Government in facilitating that change?

In order to meet our climate targets, we must not only reduce overall emissions but adopt carbon-negative strategies. The most economical and natural of those is tree planting. I hope to expand on that point today and in doing so make a case for more closely linking the UK emissions trading scheme with a separate and voluntary carbon offset market. Both schemes encourage businesses to reduce overall emissions. They are currently unconnected in policy; they run parallel to each other. I accept the technical and policy challenges associated with directly incorporating carbon offsetting into the UK ETS, but I believe that an association between the two schemes, if established, would bring rigour, scrutiny and additional resources to the offsetting process.

Governmental intervention is urgently required to bring much-needed stability to the voluntary carbon offset market in Wales. My hon. Friend the Member for Carmarthen East and Dinefwr (Jonathan Edwards) recently highlighted that large companies are already purchasing vast tracts of agricultural land in the upper Teifi and Tywi valleys for forestry and carbon offsetting and are doing so in a manner that internalises financial gain and externalises the social, economic and cultural costs.

Those costs increasingly pose an existential challenge to Welsh farmers and rural communities and are inimical to efficient land use and a just transition. To echo the National Farmers Union, we urgently need to ensure a system that makes carbon offsetting mean the right tree in the right place. The Government, by acting as a broker and data-backed co-ordinator, can help to ensure appropriate land use for carbon offsetting, support the sufficient scale of planting and empower local farmers and rural communities to make a carbon-negative effort for themselves.

Wales’s forests are a natural economic and national asset at the very heart of our decarbonisation efforts. The lungs of our nation, our forests sequester approximately 1.84 million tonnes of carbon dioxide equivalent annually, while pollution removal by woodland was estimated to have an ecosystem value of more than £385 million back in 2015. Our forests are also essential for our environment and biodiversity. Indeed, of the 542 listed species of principal importance to the Welsh Government, 210 rely wholly or partly on woodland habitats.

[Liz Saville Roberts (Dwyfor Meirionnydd) (PC)]

Will my hon. Friend acknowledge the crucial importance of restoring Wales’s peatlands, given that their climate change mitigation potential is 3,000 tonnes of carbon a year, equivalent to 5% of Wales’s transport carbon emissions? I am sure he will also take the opportunity to welcome the peat restoration projects led by parc cenedlaethol Eryri, the Snowdonia national park.

[Ben Lake]

I thank my right hon. Friend for that intervention and, indeed, will join her in congratulating the parc cenedlaethol on that work. Peatland restoration will be an incredibly important part of our carbon mitigation and sequestration efforts. More work to ensure that local actors such as the parc cenedlaethol can fully benefit from and engage in that process is what we as politicians and policy makers should focus on in the future.

The area of land covered by trees and woodland in Wales has tripled since the early 20th century, increasing from 88,000 hectares in 1905 to more than 309,000 hectares as of March 2020. It accounts for about 14.9% of the Welsh land area. That is significantly greater in percentage terms than in England or Northern Ireland, but the coverage lags behind our Scottish cousins and is lower than both European Union and wider European averages, so we have much further to go.

The “Woodlands for Wales” strategy suggests increasing tree planting to at least 2,000 hectares per year from 2020. The Climate Change Committee, recognising the challenge of reaching net zero, has been even more ambitious, recommending an increase to woodland cover in Wales from present levels to 24%. That would mean planting 43,000 hectares of new trees by 2030 and 180,000 hectares by 2050.

Set against that backdrop, Welsh farming finds itself at a perilous juncture, buffeted on the one hand by increased trade barriers with our largest market and uncertainty over future income support, and on the other by increasing pressure on land use. Welsh land, like all land, is of course a finite resource. If climate goals are to be met in a sustainable and fair manner, solutions cannot be imposed on rural communities. Instead, solutions can and should be implemented in conjunction with rural communities, and in a way that protects them from any damaging consequences. That is especially important when it comes to Welsh forestry and carbon sequestration. If we are to achieve the desired objective of reducing carbon emissions and promoting biodiversity, rural communities must be at the heart of implementation. Welsh farmers play a vital but often overlooked role in the climate equation, with over 109,000 hectares of woodland—just over a third of the total woodland in Wales—located on Welsh farms. To fulfil the stated tree-planting objectives, therefore, we need to understand the implications for the farming and food and drinks sectors, which rely on this agricultural land—land that is also essential to the wellbeing of the rural economy.

At scale, concerns about food security are increasingly valid. We must also account for the real risk of displacing food production elsewhere, to countries that may have higher carbon footprints and lower environmental standards. The last thing that any of us would want is for an unregulated carbon offset market to bring about the perverse scenario of productive agricultural land in Wales being sold to large corporations for the purposes of carbon offsetting while we increase our food imports from across the world. Such a scenario—namely, the offshoring of our food production—would make a mockery of wider sustainability efforts. I must warn the Government that there are anecdotal examples of such a scenario beginning to take root in some parts of Wales. We must therefore act now to ensure that it does not become widespread.

The best way forward would be to increase the support for farmers and rural communities looking to enter the carbon offsetting market for themselves. I pay tribute to the fantastic work by academics based at Bangor University. In particular, I thank Professor John Healey, Dr Prysor Williams, Dr Sophie Wynne-Jones, Dr Tim Pagella and Ashley Hardaker for their outstanding research, which I commend to the Minister. If she were to review their work, she would note that substantial barriers to entry still exist for farmers and local landowners hoping to diversify into agroforestry. The UK ETS could play a transformative role, not only by better regulating the offset market but by providing the resources to encourage tree planting that is locally grounded rather than purchased by external, big business actors.

Practically, ETS revenues could be used to hasten a system of payments, as has happened in Ireland, so that farmers can afford to wait for a crop of trees to mature in order to derive an income stream. We could also look at land tenure restrictions and review contractual clauses that prohibit the planting of trees, which are especially important because over 30% of Welsh landed is tenanted.

Although such measures may seem parochial, they are fundamental to ensuring that we actually deliver a transition that is just as well as sustainable. We must work with farmers, who manage over 80% of land in Wales, to deliver a forested future that is critical to the overall success of our decarbonisation efforts. The alternative, in which big business can buy land, plant trees without any reference to local biodiversity and the optimum use of different parcels of land, all the while continuing with their polluting, business-as-usual practices, is unacceptable. Greenwashing, as the Minister will know, is an ever-present danger, but in this instance it would devastate Wales’s rural communities, culture and economy.

I hope that the Minister will address concerns that the ETS is not moving fast enough nor fundamentally reducing emissions. I also hope that she will agree that local groups and farmers should be supported to play an important part in the carbon offset market and in so doing lead the transition to net zero. We must not allow large corporations to buy farms, put rural communities out of home and land, and weaken local food production for the sake of greenwashed business as usual. More specifically, I would welcome any thoughts that the Minister might have on integrating carbon offsetting into the wider UK ETS framework to ensure that we have effective regulation of the market, the promotion of sustainable practices and the rewarding of responsible practitioners.

I hope that today’s debate, short as it is, has demonstrated the need for co-operative action across the UK to ensure that our greener future is ecologically, socially and culturally sustainable and, therefore, that the transition to it is a just one.

[The Minister for Business, Energy and Clean Growth (Anne-Marie Trevelyan)]

I congratulate the hon. Member for Ceredigion (Ben Lake) on securing this really important debate on the operation of the UK ETS in Wales. The four Administrations of the UK have worked together over months and years to establish what will be the world’s first net zero carbon cap and trade market and a crucial step towards achieving the UK’s target for net zero carbon emissions by 2050. We have drawn on our years of experience and global leadership in carbon pricing, going all the way back to the original UK ETS in 2002, to ensure that the new scheme has the flexibility and ambition to deliver for the whole of the UK. We share the combined objectives of driving permanent emission reductions across the UK while protecting the competitiveness of our businesses, be they steelworks in south Wales, ceramics producers in central England or whisky distilleries in Scotland. The UK ETS authority—the UK Government and the three devolved Administrations —continue to make good progress in the operational delivery of the UK ETS in our respective nations.

The UK ETS market opened on 19 May and there have now been four successfully completed auctions, with a fifth taking place tomorrow. Collectively, we published the free allocation table for stationary installations on 11 May, and we have since issued just under 40 million free allowances to qualifying operators. The allocation table for aviation operators was published on 28 June, and we will be issuing allowances to qualifying aircraft operations shortly, but we are committed to building on the process, and officials from the four Administrations are already working together on plans to further increase the climate ambition of the UK’s carbon pricing policy.

The UK ETS authority has already jointly committed to exploring a number of areas where we could go further and faster, and together we plan to set out our aspirations to continue to lead the world on carbon pricing. The overall cap for UK ETS is an obvious place to start, and we will be moving together quickly to consult on a consistent net zero trajectory for the cap, drawing on the advice from our statutory advisers, the Climate Change Committee. We will also be reviewing free allocation, which is a key measure to protect our industries, to prevent the offshoring of emissions—I think we all agree that that slightly defeats the point—and to ensure that the system is fair and equitable across the UK and its constituent nations, while maintaining the level of ambition that we really need to be able to get to net zero.

Together, we will tackle the case for expanding carbon pricing across the economy while encouraging innovation in emerging decarbonisation technologies. The hon. Gentleman’s challenge of connecting forestry with the ETS is one that we will indeed look at. We have committed to explore expanding the UK ETS to other sectors—two thirds of emissions are currently uncovered—including thinking about how the UK ETS can incentivise the deployment of greenhouse gas removal technologies, be they nature-based, as he identified, or indeed engineered not by nature. We shall enhance the effectiveness of the UK ETS, particularly for aviation, while recognising our international obligation in that sector.

A key objective of the UK ETS is to protect the competitiveness of UK industry, so as well as the free allocation of allowances to sectors at risk of carbon leakage, which is the offshoring of production and emissions, we are providing a package of measures to help businesses to decarbonise. On 17 March, the Government published the UK’s first-ever net zero strategy for industry. The document is the first strategy published by a major economy, and it sets out how industry can decarbonise in line with net zero while remaining competitive and without pushing emissions abroad. The strategy sets the expectation that emissions in industry will fall by around two thirds by 2035 and at least 90% by 2050 compared with 2018 levels, in order for us to achieve net zero. We have challenges ahead and we need to find the best, most effective and most impactful solutions.

The UK ETS is a jointly established, jointly operated scheme that has great potential for all Administrations.

[Ben Lake]

I am grateful to the Minister for her response. As the work gets under way to expand the ETS scheme, will she ensure that the wider costs of any scheme, particularly carbon offsetting in local communities —whether those costs be the loss of agricultural land or the impact on the vibrancy of rural communities—can somehow be incorporated into the approach taken? I appreciate that it is a very complex issue and I do not pretend to have the answers, but could she reassure us that that will be considered as part of the future work scheme?

[Anne-Marie Trevelyan]

I take note of that. The hon. Gentleman may want to call for a similar debate with the Department for Environment, Food and Rural Affairs to discuss other aspects of the funding that will go to those smaller communities as we change the systems, now that we are no longer under the EU frameworks.

The UK ETS is focused on supporting industry to make those transitions and has great potential for all Administrations. It recognises both the unique opportunities and, indeed, the challenges in each, which are all different. I endorse and agree with the hon. Gentleman and the right hon. Member for Dwyfor Meirionnydd (Liz Saville Roberts), and share their passion for all those nature-based solutions, which are critical to helping us to sequester carbon from trees to peat. I am a particular advocate for peat restoration across Northumberland, for obvious, biased reasons.

I encourage all Members to work with Government and Natural Resources Wales as we think about extending the ETS scheme, which we are just starting to do. We will seek to review it in some detail and think about how we can expand it. There is a great deal of room to continue the conversation. I look forward to working with Members as we set out the consultation in due course and make progress. I hope we will continue this important discussion and find solutions to ensure that these really important industries of ours can compete effectively on the international stage.

Question put and agreed to.

Enabling Community Energy

Ben Lake Excerpts

Thursday 1st July 2021 Westminster Hall

[Ben Lake (Ceredigion) (PC)]

It is a pleasure to serve under your chairmanship as always, Sir David. I congratulate the hon. Members for Bath (Wera Hobhouse) and for Waveney (Peter Aldous) on their work on this matter and on securing the debate this afternoon. They have laid out the huge potential of enabling greater community energy across these islands. The hon. Member for Waveney went into some detail on some of the mechanisms that we believe can realise that potential—namely, a right to local supply.

In advance of this afternoon’s debate, I have been contacted by supportive Members from all political parties who were unfortunately unable to attend. They include the hon. Member for Gower (Tonia Antoniazzi), the right hon. Member for Preseli Pembrokeshire (Stephen Crabb), the hon. Members for Bristol West (Thangam Debbonaire), for Milton Keynes North (Ben Everitt), for North Down (Stephen Farry), for Brent North (Barry Gardiner) and for Nottingham South (Lilian Greenwood), the right hon. Member for Kingston upon Hull North (Dame Diana Johnson), the hon. Members for Norwich South (Clive Lewis), for Glasgow East (David Linden), for Brighton, Pavilion (Caroline Lucas), for Bristol East (Kerry McCarthy), for Falkirk (John Mc Nally), for Richmond Park (Sarah Olney), for Romford (Andrew Rosindell) and for Lancaster and Fleetwood (Cat Smith), the right hon. Member for East Ham (Stephen Timms) and the hon. Member for Nottingham East (Nadia Whittome). This is an issue that enjoys considerable cross-party support.

I was delighted to be one of a cross-party group of some 250 Members who supported the Local Electricity Bill introduced by the hon. Member for Waveney in the previous Session. That Bill proposed a mechanism to implement a right to local supply. As the hon. Member for Waveney mentioned in his remarks, that proposal has quite an impressive and broad coalition of support behind it. There is a national campaign co-ordinated by Power for People, which is a coalition of 76 national non-governmental organisations, charities and trade associations, and 70 local councils. Impressively, three of the six distribution network operators—the companies that own and run the UK’s regional energy grids—publicly support the campaign and back calls for a right to local supply as enunciated in that Bill.

It is worth reiterating that a right to local supply was specifically recommended by the Environmental Audit Committee in its welcome and thorough investigation into how to enable more community energy generation. The possible benefits, although they may sound too good to be true, are very real. The “Community Energy State of the Sector 2021” report states that the existing community energy groups operating across these islands reduced energy bills by £2.9 million last year and created £3.1 million-worth of community benefit expenditure. We should just imagine what those figures could be if community energy was fully enabled and grew from its current 319 MW to more than 3,000 MW.

In Wales, we have the highest number of community energy organisations per head of population relative to the rest of these islands, but if a right to local supply was established, even more people and communities could become electricity customers of local enterprises—communities such as Cardigan and Ceredigion, which has a budding local energy club and ample local generation of renewable energy, but where local demand is not currently being catered for by local supply. A right to local supply would help connect consumers with locally generated electricity and the knock-on effect would be seen in communities across these islands.

This measure is not just about addressing the climate crisis, as important as that is. It is also about supporting more local skilled jobs, and it is about cheaper energy bills. It is very much a win-win-win. It can be done. While we welcome the Government’s support of the principle, we believe that, if we work together with the Minister and the Department, we can get the detail right and enact a local electricity Bill that enshrines the right to local supply. I hope the Minister will be open to such a meeting.

Marine Renewables: Government Support for Commercial Roll-out

Ben Lake Excerpts

Tuesday 8th December 2020 Westminster Hall

[Stephen Crabb (Preseli Pembrokeshire) (Con)]

I had not intended to speak, but now I am on my feet, and why give up the opportunity? I will put on the record again how excited I am by some of the developments off the west Wales coast. There is no shortage of projects coming forward and companies with various track records, but lots of good ideas and good intent for this new industry, which we have debated and talked about a lot in recent years. As the right hon. Member for Orkney and Shetland (Mr Carmichael) said, we are on the cusp of seeing those developments come to fruition if the right conditions are put in place.

[Ben Lake (Ceredigion) (PC)]

Will the right hon. Gentleman give way?

[Stephen Crabb]

I will give way to my next-door neighbour in Ceredigion.

[Ben Lake]

Does the right hon. Gentleman agree that one of the most exciting aspects of the sector’s potential is that areas such as ours in south-west Wales have the opportunity to be at the forefront of a new green industrial revolution?

[Stephen Crabb]

The hon. Gentleman is absolutely right.

The only other point that I will make, before I allow the Minister to respond, is that in a constituency such as mine, for the last almost 50 years, the economy has been heavily dependent on oil refining. We as a country, and as a Government, have now made a commitment to bring forward a ban on the sale of new diesel and petrol engines, and we are moving away from a carbon-based economy. Constituencies such as mine are vulnerable to the big strategic changes that we are mandating as part of our efforts to meet the global challenge of climate change. There is a duty on the Government to help bring forward replacement jobs—high-quality jobs and apprenticeships—in new exciting clean technologies.

Electricity Generation: Local Suppliers

Ben Lake Excerpts

Wednesday 14th October 2020 Commons Chamber

[Ben Lake (Ceredigion) (PC)]

I am grateful for the opportunity to open this Adjournment debate on an issue that I know is of great importance to not only communities in Ceredigion, but, as is evidenced by the attendance of hon. Members in the Chamber this evening, communities across these islands.

We face many pressing challenges as a society: the health and economic consequences of the covid-19 pandemic have been debated today, but just as pressing are the devastating impacts of climate change. If we are to meet these challenges and, ultimately, emerge stronger, more secure and more prosperous, it is vital that we transition rapidly to a society powered by energy generated from renewable sources. The Committee on Climate Change has been clear that the UK is off track to achieve our commitment to net-zero greenhouse gas emissions and meet our obligations under the Paris climate agreement. At present, renewable electricity generation accounts for only 11% of all UK energy use, and our transport and heating networks need to be electrified to decarbonise our economy. If we were successful in doing this, new policies and regulations would be needed to ensure that the resulting rise in electricity demand was met by renewable generation.

There is good news: villages, towns and cities across the land possess incredible potential for community renewable energy projects, such as solar arrays in fields, wind turbines, and hydro units in rivers. Such schemes support local skilled jobs and offer local economic opportunities.

[Liz Saville Roberts (Dwyfor Meirionnydd) (PC)]

Does my hon. Friend agree that to fully realise our local energy-generating potential we must invest in grid-integrated, locally situated batteries? They will smooth out the problems that hamper the grid supply in so many of our rural communities.

[Ben Lake]

I am grateful to my right hon. Friend for making that point. She anticipates a few of the arguments I wish to make this evening, but she is right to emphasise the role that batteries and improving storage will play in the future. If we are to balance local generation and local demand, being able to store a lot of this renewable energy will be key. These local, community-owned renewable energy projects support local skilled jobs and offer local economic opportunities, which will be very welcome in the face of the covid-19 pandemic’s impact on so many of our communities.

[Wera Hobhouse (Bath) (LD)]

Bath and North East Somerset Council is working closely with Bath and West Community Energy, and such partnerships are incredibly important for getting local buy-in. Does the hon. Gentleman agree that in order to get that local buy-in, this really has to work financially as well for the people?

[Ben Lake]

I am grateful to the hon. Lady for making that point. She rightly says that this has to be viable for these community schemes and partnerships if they are to fully realise the potential that so many of these schemes possess. I have put on record details of one local energy partnership in Cardigan in my constituency that I know is trying to grapple with some of these challenges.

[Jim Shannon (Strangford) (DUP)]

I congratulate the hon. Gentleman on securing this debate. I agree with his comments about community groups and the opportunity here. Does he agree that the monopolies of service provision by greater companies must be brought to an end, as we see many local people who are attempting to expand business being precluded from doing so by legislation that seems to be put in place only to frustrate, rather than to allow for competitive provision?

[Ben Lake]

The hon. Gentleman has got to the nub of the issue and has anticipated the main thrust of my argument. At present, the regulations and the way in which legislation has been structured may be outdated and disadvantage some of the smaller generation schemes. His point will be key if we are truly to capitalise on the potential that the smaller projects possess.

[Ben Everitt (Milton Keynes North) (Con)]

What are the hon. Gentleman’s thoughts on partnering with local authorities, at whatever tier? He mentions community projects at village level, but what about town councils? I am thinking specifically of Newport Pagnell Town Council, which is very keen to get involved in such initiatives.

[Ben Lake]

The hon. Gentleman makes a very valid point. We must not think that community-owned projects are necessarily just at parish council level; towns and municipalities can also play a part. If we make any changes, we will do well to ensure that we better empower such projects, because I believe that they will be key in moving to a decarbonised economy.

[Matt Western (Warwick and Leamington) (Lab)]

I concur with the point made by the hon. Member for Milton Keynes North (Ben Everitt); Warwick District Council is similarly interested. Does the hon. Member for Ceredigion (Ben Lake) agree that we have to ensure that local authorities can develop projects through the planning system, work with grid operators and start generating at scale in the immediate area?

[Ben Lake]

The hon. Gentleman makes a very good point. As is often the case, if we are to transition as rapidly as is necessary, we will need to bring together so many aspects of regulation and different Departments.

A lot of the points made by hon. Members touch on the fact that since the 1990s we have seen a transition in how energy and electricity have been generated and transmitted across the country. It will need to change even further, of course; we are moving from an electricity system that consists of a small number of quite large power plants, serving a passive operation, to one with potentially thousands, if not millions, of smaller generators with storage and active demand, complementing huge numbers of large-scale renewables.

[Scott Mann (North Cornwall) (Con)]

Does the hon. Gentleman agree that Cornwall has a vital role to play in battery storage technology, with our recent discovery of lithium in our Cornish tin mines? We will be able to use that Cornish lithium to build the battery technology that he describes.

[Ben Lake]

I am grateful for that point, because one of the heartening news developments of recent weeks has been about the lithium in Cornwall. It is clear that those deposits will be crucial if we are to make this transition.

The question that arises from the shift that I described is whether a system with potentially millions of moving parts could be managed in a centralised way even if we wanted it to be. I believe that local generation to meet local demand offers a possible answer.

[Olivia Blake (Sheffield, Hallam) (Lab)]

I congratulate the hon. Gentleman on securing this debate, which is of the utmost importance. Does he agree that fantastic community projects such as Sheffield Renewables should be better supported by the Government to provide local renewable energy, and that that support should be enhanced as we try to tackle the climate emergency?

[Ben Lake]

The hon. Lady’s point is an important one: we need to make sure that community schemes are supported. It also anticipates where I want to take my speech next, so I am doubly grateful.

The potential capacity of local community-owned energy is quite astounding. A 2014 UK Government report stated that community energy projects could contribute as much as 3,000 MW of electricity generation capacity by 2020. Unfortunately, we have not quite met that target, but the potential is striking nevertheless.

That potential is frustrated by the antiquated rules that govern our energy markets, which were designed primarily in the 1990s and were suited to a different system of large power stations and a handful of utility companies. Unfortunately, those rules still rule the roost, and they create insurmountable cost barriers to any community energy initiative that wishes to sell the electricity it generates directly to local households and businesses.

A report by the Institute for Public Policy Research shows that the technical and operational challenges involved in becoming licensed to supply energy to customers lead to initial costs exceeding £1 million. There have been attempts to address that. A few years ago, Ofgem launched Licence Lite, which was aimed at creating a less onerous set of supply licence conditions for specific types of new, innovative supply business models. Unfortunately, that has proved complex and has not been well used to date. To its credit, Ofgem has also launched an expanded Sandbox service to allow innovative companies to apply for derogations from the traditional licensing regime and stipulations, and it has extended its ability to grant those derogations to certain local generators.

However, the most effective solution would be to introduce greater proportionality to the licensing system, to ensure that the costs and complexities of being a licensed electricity generator are proportionate to the scale of its supply. If the costs are proportionate, it becomes financially viable for smaller-scale renewable generators to supply electricity, and, in turn, new community-owned schemes would become viable.

[Paul Howell (Sedgefield) (Con)]

The hon. Member may be aware that I co-chair the all-party parliamentary group for left-behind neighbourhoods, and there are many opportunities for this in those communities. In my constituency, for example, there is heat from mine workings. Does he agree that these sorts of innovation can come through this channel much better than others?

[Ben Lake]

I am grateful for the hon. Member’s intervention. He makes a key point: the transition to a decarbonised economy also has a lot of benefits in terms of economic development in areas such as his and mine, which have been left behind. This offers so many opportunities, and we would do well to make more of them.

[Patrick Grady (Glasgow North) (SNP)]

I thank the hon. Gentleman for giving way; he is being very generous with his time. As we hear from the interventions, there are local groups and bodies around the country that are desperate to have these opportunities. Partick Community Council in my constituency, which is a very concentrated urban area, is keen to find out how it can innovate and use the abilities being proposed.

[Ben Lake]

I am grateful to the hon. Gentleman for making that point. He is right: there is so much potential across these islands. We just need to sort out some of the obstacles that are currently faced.

[Peter Aldous (Waveney) (Con)]

I thank the hon. Member for securing the debate. He refers to the obstacles. Does he agree that one way to overcome those obstacles is for the ten-minute rule Bill that I presented in the summer, which is due to have its Second Reading on 29 January next year, to be passed into statute, whether through the private Member’s Bill route or the Government adopting it?

[Ben Lake]

I thank the hon. Member, who has done incredible work in bringing forward that ten-minute rule Bill, which has the support of a great number of Members on both sides of the House. I very much want to put my support for that Bill on record, and I hope that if it does not progress as a private Member’s Bill, the Government will look to adopt its provisions.

[Wendy Chamberlain (North East Fife) (LD)]

Members have talked about left-behind communities and the real desire for many communities to get involved. I want to mention those who are left out and how important it is that the community energy sector is inclusive. Right now, 4% of practitioners in the sector are black, Asian and minority ethnic. Will the hon. Member join me in paying tribute to the organisation Power for People, which is working to ensure that it represents those groups that are currently under-represented in the sector?

[Ben Lake]

I am grateful to the hon. Member for that intervention, and it gives me the opportunity to place on record my gratitude to Power for People. This debate probably would not be taking place tonight if it was not for the support and leadership that Power for People has shown in recent weeks, so I am pleased to put that gratitude on record.

The ten-minute rule Bill proposed by the hon. Member for Waveney (Peter Aldous) would allow electricity generators to become local electricity suppliers by applying for a new form of supplier licence designated for local supply. In advance of the debate, I have been contacted by Members from all political parties who are supportive of such measures but who unfortunately were not able to attend. They include the hon. Members for Tewkesbury (Mr Robertson) and for Thirsk and Malton (Kevin Hollinrake), my hon. Friend the Member for Carmarthen East and Dinefwr (Jonathan Edwards), and the hon. Members for Na h-Eileanan an Iar (Angus Brendan MacNeil), for Blaydon (Liz Twist) and for Glasgow East (David Linden), to name but a few. There are, as I say, 210 in total.

A right to local supply would help support local energy businesses to create jobs by selling energy to local customers and retain significant additional value.

[Dave Doogan (Angus) (SNP)]

I do not want to anticipate where the hon. Gentleman is going with this list, but one of the key opportunities that a right to local supply would present to our communities right across these islands is to allow for more entrepreneurial councils to generate electricity locally for communities, as the chief executive of Angus Council has suggested. Does he agree with that ambition?

[Ben Lake]

I do agree. The opportunities are many, and if we were able to address some of the regulatory barriers, it would be a win-win for all involved.

To draw my remarks to a conclusion—Mr Deputy Speaker, you have been very patient, and I am grateful for it—if we were to introduce a right to local supply, it would help local energy businesses and municipalities, as was mentioned, it would retain a significant amount of additional value in local communities and it would inject much-needed resilience.

[Simon Baynes (Clwyd South) (Con)]

On that particular point about additional value to local communities, in my constituency the Corwen hydroelectric project is part of a wider series of community efforts. The benefit of what the hon. Gentleman is proposing is that it would not only help the hydroelectric project, but would incentivise wider activities within the community as well.

[Ben Lake]

I fully agree with the hon. Gentleman, because there would be a range of benefits. We would have greater public support for the transition to sustainable energy forms, we would improve equality, and we would have nature friendly renewable energy generation. Obviously just as important is that we would have a secure energy supply less dependent on imports, let alone a more effective energy system that would perhaps see consumers’ energy bills decrease as well.

I hope the Government consider establishing a right to local supply and specifically the workable mechanism for it laid out in the ten-minute rule Bill of the hon. Member for Waveney, which as I said earlier is supported by more than 200 Members of this House. I am sure that together we can enshrine this right to local supply in law and make the most of the many opportunities that it offers.

[Mr Deputy Speaker (Mr Nigel Evans)]

The number of interventions might be a record. Congratulations. I call the Minister.

--- Later in debate ---

[Kwasi Kwarteng]

My hon. Friend is straying into ground that is not necessarily covered in this debate. I am very hopeful that the energy White Paper will be published soon. I think the Secretary of State said in front of the Business, Energy and Industrial Strategy Committee that it would be published in the autumn, and we are still in the autumn, so I am hopeful that it will come imminently.

[Ben Lake]

Should legislative changes be required—I think there is support across the House for that, as has been demonstrated this evening—how best can we work with the Minister to carry through any opportunities that are identified as necessary?

[Kwasi Kwarteng]

Well, a very good start is a debate such as this. It has been a real eye-opener for me. I am delighted to see so much interest. I would suggest that people engage with the Department and engage with me. I am very happy to discuss these issues, which are absolutely fundamental to the energy transition that the hon. Gentleman mentioned. As I said, this is part of an ongoing conversation. I am hopeful that the energy White Paper will come hastily enough for my hon. Friend the Member for Waveney.

We have to focus on the flexibility of the whole system in terms of the current regulatory regime. If we get that right, then we can bring the innovation and perhaps some of the centralisation that the hon. Gentleman, and other hon. and right hon. Members, want to see. The prospects are considerable. We could see innovation and growth. We could see cost reductions and, most fundamentally, carbon reductions. I think that with a co-operative spirit, we can get very far. The hon. Gentleman’s actual proposal perhaps creates more problems than it solves, but I am very willing to debate and discuss that with him on a subsequent occasion.

I thank the hon. Member for Ceredigion for raising this issue and thank all Members who participated in this short but interesting debate.

Question put and agreed to.