Nuclear Energy (Financing) Bill

Bob Seely Excerpts

Report stage & 3rd reading
Monday 10th January 2022 Commons Chamber

I would also like the Minister’s thoughts on the pace of the roll-out of nuclear power, if this Bill goes well and is passed with suitable amendment. What would he expect to see by way of incremental capacity for the following two decades after 2030, if all went well with the ideas embedded in this legislation, given the state of the technology and the rather imperfect supply of capacity? Above all, does he have plans for smaller nuclear where it might be possible to approve a project more quickly and then scale it up and roll it out in more than a few locations?

[Bob Seely (Isle of Wight) (Con)]

The purpose of small modular nuclear reactors—we are going to be building 10 or 15 of them—is to enable us to bring the price down. Is my right hon. Friend also concerned that 18 major projects in oil and gas exploration have seemingly been put on hold, given that we need those projects and those fields to come online now?

[John Redwood]

Yes. I fear I may be wandering a little from the actual Bill, Mr Deputy Speaker, but given the general context of energy shortage and the crucial role that gas has been playing in recent months in generating electricity, because we are short of nuclear power and short of wind power when the wind does not blow, I would strongly recommend that we get on with exploiting our own gas reserves. That is greener and cheaper than relying on gas being brought halfway round the world in a liquefied natural gas tanker or on Mr Putin’s gas routed via the continent. That is probably an argument for another day, but I am grateful to the Deputy Speaker for allowing me to answer my hon. Friend’s very good point.

In conclusion, I would like the Minister to set out a little bit more of the context of when nuclear might start contributing to our electricity demand and need, and how he sees the balance of that developing between small nuclear being rolled out at greater scale and the one or two large nuclear projects that might still be around. Also, given the hugely radical electrical revolution that the Government wish to encourage, with switching home heating from predominantly gas to electricity and switching much transport from predominantly diesel and petrol to electricity, we are going to need a massive expansion of total capacity. Would he agree, however, that we are starting from a position where we do not have enough capacity for our current levels of demand and where the nuclear element of that capacity will contract quite a lot over this decade?

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[Charlotte Nichols]

I do not have the data on my person at this point, but ultimately more jobs are at risk in Warrington North’s nuclear sector if we do not approve the building of new nuclear. Regardless of whether that involves direct state investment, a regulated asset base model, as we are discussing today, or foreign investment, the fact is that we need to get it built, because all those jobs will be at risk if we do not.

Going back to the point that the hon. Gentleman raised, we have heard complaints about the cost of the regulated asset base model. Indeed, my preference would be direct state investment in this vital national infrastructure, which would keep the stations and the power they produce in public ownership. None the less, the model that we are discussing must be recognised as an investment that guarantees construction and production over the longer term.

As I wind up my remarks, I want to point out that the uncertainty and lack of guarantees have left the industry in the dark for so long. With the uncertainties now addressed by the Bill and the amendments that Labour has tabled, the industry can now have the confidence to plan and move forward. My hope is that by passing the Bill on a cross-party basis, it will send the signal that there is a clear consensus on the vital role that nuclear will continue to have in our energy mix. This message is fundamental as we hopefully move on from Sizewell C to other projects and plan these as a fleet to drive down costs and to maintain and expand the world-class expertise and skills of the British nuclear sector.

[Bob Seely]

I rise to speak to amendments 1 and 2. If I have time, I will get to amendment 9, but I will speak for no more than five minutes.

I hear what people say about the importance of renewables, but it is not a choice between renewables or nuclear. Frankly, if the world is to have any chance of meeting its carbon targets, it is not “either/or” but “and”. I am afraid to say that we see the environmental, energy and security disaster that is Germany’s imbecilic energy policy, caused by the shutting of nuclear and the dependence on Russian gas and lignite coal, the dirtiest form of energy production known to humanity.

[Wera Hobhouse]

I am not speaking on behalf of Germany, because Germany is in a very different position from that of Britain. It is more or less landlocked, it does not have sea, and it does not have wind in the same way. Britain has a massive opportunity to invest in new renewable energy that no other country has apart from Greece, which is doing so.

[Bob Seely]

I am half German and I think my German relatives would confirm that they have wind in Germany. [Interruption.] And the Baltic sea—thank you very much indeed. There is no reputable case, including in reports from the UN and others, that disagrees that, if we are to meet zero carbon at some point in the next 20, 30 or 40 years, nuclear will play an increasingly significant element, whether we like it or not. It is a very low-carbon form of energy, with no greenhouse gas, and it is important for us to take that on board.

On foreign ownership and foreign funding, would I start from here? No. I am uncomfortable with the idea that we would ever want to build an untried, untested Chinese nuclear reactor in this country, especially one that has not been built anywhere else, to say nothing of the geopolitical ramifications of that. I am not hugely happy that we have Chinese funding in place, but I understand the critical point that we need a sense of momentum to make progress on this issue. In a perfect world, though, we would not be starting from here.

[Alan Brown]

The hon. Gentleman spoke about the importance of nuclear to get to net zero, but the UK Government are committed to decarbonisation of the electricity grid by 2035. If we are going to rely on nuclear, there is no way on earth that we can fully decarbonise the grid. Other things are needed, such as carbon capture and storage and green hydrogen.

[Bob Seely]

The hon. Gentleman makes a perfectly sensible point, but his argument that we can do it all with renewables is a bit of a cop-out. We are not doing so. I want tidal energy for the Solent and for the Isle of Wight as much as he does for the west of Scotland, but the argument that renewables will solve our problems—especially when, as the right hon. Member for Wokingham (John Redwood) says, there is no wind— is a difficult one to sustain.

Moving back to amendments 1 and 2, it is perfectly sensible for the Government to make the point—the Minister did so when we were in conversation last week, and I thank him for his time—that we need foreign institutional funding, especially from friendly states, such as the United States, Australia, Canada, and the European Union, and a RAB system to make that investment in nuclear, which is expensive and which we need for the long term, but we need to be getting on with it. Having argued against those two amendments, I have to say that we have had two decades of incredibly poor leadership on energy supply. The hon. Member for Warrington North (Charlotte Nichols) spoke eloquently about the attractions of the nuclear industry, but, unfortunately, the point she missed out was that nuclear was killed as an investment discussion early on in the new Labour years. Unfortunately, the coalition carried on with that, because, effectively, we were appeasing a rather extreme green lobby in our country. We are coming to this very late. As my right hon. Friend the Member for Wokingham said, in a decade’s time, we will lose 12 out of the 13 nuclear reactors that we have. That means that we will go backwards when it comes to producing low-carbon, low-greenhouse-emission energy, even if more renewables come on stream, which I hope they will, so we need to get on with this.

Are we in a perfect position with Chinese funding? No. Do I want to see a Chinese nuclear reactor in this country? Absolutely not. Do I want to see Rolls-Royce nuclear reactors, which I hope will be the Rolls-Royce solution in all senses of the word? Absolutely, and we need to get cracking, because that will lower the price. It is also British technology and we will be keeping those high-quality jobs. We need to get moving. On that principle, I oppose amendments 1 and 2. I am happy with where we are with the Government at the moment, but let us just crack on, get this done, get another Bill for another nuclear plant this side of an election and then get in place the laws and the Bills that we need for modular nuclear to come onstream.

[Jim Shannon (Strangford) (DUP)]

It is a pleasure to speak in this debate, and I am grateful for the opportunity to do so.

In the past, I have spoken in the Chamber and in smaller debates about nuclear energy and its importance in today’s society. I will put on record once again my support for nuclear energy and for what it can deliver for all of this great United Kingdom of Great Britain and Northern Ireland. We need nuclear generating capacity for the United Kingdom, and I believe that this Bill gives the opportunity for that to happen.

The hon. Member for Kilmarnock and Loudoun (Alan Brown) put forward a very good case for his proposals in new clause 1 and amendments 6, 9, 8, 7 and 10. I believe that, ultimately, it comes down to whether we support nuclear energy and the benefits that it brings or whether we have some concerns, which, obviously, the hon. Gentleman has.

Nuclear energy in the UK is minimal, with only 13 nuclear reactors and six plants, which are able to supply only about 20% of the UK’s electricity demand. It is worth pointing out that Northern Ireland is the only devolved institution in the UK without a nuclear plant or power station. I note from the papers supplied to us by the Minister that

“For the RAB model and revenue stream measures in Parts 1 and 2, these will extend and apply to England and Wales and Scotland only. This is because the unique energy position of Northern Ireland means they would not benefit from energy produced by nuclear energy generation projects under a RAB model in Great Britain, and so should not be obliged to pay.”

It is clear that the Government have provided protection for us in Northern Ireland. It is also important to remember that in the context of the Government’s levelling up agenda as well as the Bill, the funding is not relative.

Nuclear energy in the UK has not peaked since 1995 and the opening of Sizewell B, the last commissioned plant to be built.

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[Dr Whitehead]

Sorry, no—I have a general habit of wearing a mask whenever possible.

The Bill essentially falls into three parts. Part 1 concerns the designation of a company for the receipt of regulated asset base payments. Part 2 concerns the collection and disbursement of funds through the regulated asset base arrangements. Part 3 sets out a special administration regime, should a nuclear power plant be unable to carry out its obligations arising from the institution of the regulated asset base arrangement.

The Bill, essentially, is trying to produce a method for funding and getting over the line one particular nuclear power plant: Sizewell C. That is the only plant that is developed enough to be able to generate by 2030. A substantial part of the Bill is not about the general future of nuclear, or the relationship with nuclear renewables; it is about how one plant is to be financed over the next period so that it can actually start producing energy, hopefully by the end of this decade or shortly thereafter.

The Labour party supports nuclear power for the future and is particularly concerned that, for example, the Climate Change Committee has indicated that some 8 GW of nuclear power might be put in the mix for low-carbon renewable power for the future. Sizewell C is an important part of that process—indeed, getting it going is long overdue. Perhaps I can put the record straight, because the previous Labour Government, as the 2007 nuclear White Paper and the strategic planning documents of 2009-10 show, laid the basis for the present number of sites to be considered and, therefore, for nuclear power going forward.

[Bob Seely]

The hon. Gentleman is absolutely right, but unfortunately we lost a decade, from 1997 to 2007, when nuclear was taken off the table. Because of the timescales, which he is well aware of, will he just accept—this is not necessarily party political—that losing that decade put us back and is costing us now?

[Dr Whitehead]

The hon. Member is quite right that prior to 2007 the Labour Government did not consider the development of nuclear power by state means to be an appropriate way forward, although they never suggested that the development of nuclear power by private means could not be countenanced. However, we have since had more than 10 years of Conservative-led Government, which has produced precisely no nuclear power plants. Indeed, there is one nuclear power plant in the pipeline, and we hope a nuclear power plant that can be financed by reasonable means. One of the problems with the previous plant, Hinkley Point C, which the present Government got off the ground, was the funding arrangements, with EDF supplying most of the capital for the plant and then a CfD for the plant at the end, which looks like it will be quite disastrous, with future electricity prices being completely uneconomic.

It is therefore important that we get a method for funding those nuclear plants, and particularly Sizewell C, that does not fall into those traps and is also secure for the future. That is the concern of our amendments 1 and 2. To put the record straight, anyone who looks at those amendments reasonably closely will see that amendment 1 defines what is stated in amendment 2, and that it is defined as

“means owned by a company controlled by a foreign state and operating for investment purposes.”

That does not include EDF. Let us be clear from the outset that EDF is not

“a company controlled by a foreign state.”

Although it is substantially owned by a foreign state, it is not operating for investment purposes, but for production purposes. Let us be clear about what the particular concern is for the future.

Oral Answers to Questions

Bob Seely Excerpts

Tuesday 16th November 2021 Commons Chamber

[Greg Hands]

That allegation is rather unfair. We are engaging continuously with the Treasury on these matters. We have already put in place £2 billion of funds to help with the cost of electricity and to protect jobs. We have the £350 million Industrial Energy Transformation Fund, and the Under-Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend the Member for North East Derbyshire (Lee Rowley), meets regularly—and has done so very recently—with the Energy Intensive Users Group.

[Bob Seely (Isle of Wight) (Con)]

7. What plans his Department has to support the growth of (a) tidal and (b) nuclear power generation.

[The Minister of State, Department for Business, Energy and Industrial Strategy (Greg Hands)]

Our most recent contract for difference allocation round is the biggest ever. Tidal stream will be eligible to compete in pot 2 of the round. With regards to nuclear power, this Government see a vital role for new nuclear. We have just started considering the Nuclear Energy (Financing) Bill in Committee and, of course, we understand that net zero needs nuclear.

[Bob Seely]

I congratulate the Secretary of State and his team on putting in place a long-term energy strategy, because we have seen from Germany’s example how disastrous it is not to have that long-term strategy. Very quickly, on tidal, is the financing generous enough, because I understand that some tidal producers are saying that it is not? Secondly, on nuclear, will the £210 million for small-scale reactors—a brilliant thing to do—get us to a position where we are actually producing those reactors, or is this just an initial round of research?

[Greg Hands]

My hon. Friend has dextrously managed to get in two supplementary questions there. On tidal, of course we set the allocation round in September. That round will open on 13 December. Project developers can declare an intention to bid. May I commend his Perpetuus Tidal Energy Centre on the Isle of Wight for its brilliant work on tidal energy?

With regard to small modular reactors, the announcement made by my right hon. Friend the Secretary of State and his visit last week made it absolutely clear that there is strong support for British technology and British SMR design, and we want to see that move forward and make the UK a world leader in small modular reactors.

UK Gas Market

Bob Seely Excerpts

Monday 20th September 2021 Commons Chamber

[Bob Seely (Isle of Wight) (Con)]

To what extent is the UK collateral damage in a European-wide crisis caused by the Kremlin’s weaponising of gas supply and its attempts to intimidate the EU into accepting Nord Stream 2, potentially as a precursor to more violence in Ukraine? Should we not see this hybrid war for what it is and plan long term accordingly?

[Kwasi Kwarteng]

As my hon. Friend knows and has expressed, there are geopolitical elements to this in terms of the reliance of a large part of Europe on Russian gas. I am here to reassure people about a common misconception. We are not dependent at all on Russian gas. The gas sources are as I have described—50% are local, 30% are from Norway and about 18% are from LNG, which comes from all around the world—so I want to minimise the notion that we are somehow at the mercy of Russian gas policy.

National Security and Investment Bill

Bob Seely Excerpts

2nd reading & 2nd reading: House of Commons
Tuesday 17th November 2020 Commons Chamber

[Alok Sharma]

I know that my hon. Friend cares very deeply about this issue and, indeed, she and I have had discussions about it. I would say to her that the Bill is agnostic as to the domicile of an acquirer. I think that that is right and proper, but it is also right and proper that we look at every single transaction on a case-by-case basis. Let me assure her that if there are security concerns with any transaction, of course we will act.

[Bob Seely (Isle of Wight) (Con)]

There is a lot in the Bill that I am sure we all support, but does my right hon. Friend accept that without a public interest test, a character test, an anti-slavery test and a human rights test, the definition of national security being offered here is extraordinarily narrow and problematic to the broader age that we live in? Does he accept that there will be debate around that point—about what constitutes national security in this age?

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[Alok Sharma]

My hon. Friend raises an incredibly important point. Of course, self-referral, as he refers to it, is possible. In fact, if any company has particular concerns as to transactions that they may be undertaking or part of, they will get a swift assessment from the Government.

I make the point, though, that we will not be effectively publicising call-ins when they take place. Clearly, at the end of a transaction, if there was a particular remedy, that would be made public. It is also worth pointing out that the Government will publish an annual report, not on individual transactions, but on the scope of the transactions and sectors that have been looked at. I hope that that will give future investors an opportunity to consider the type of transactions in which the Government have a particular interest.

The final measure that I want to detail relates to the overseas disclosure of information relating to a merger investigation. Under section 243 of the 2002 Act, there is a restriction on the ability of UK public authorities to disclose merger information to overseas authorities unless the consent of the entity has been given. Clause 59 of the Bill removes that restriction. That will strengthen the Competition and Markets Authority’s ability to protect UK markets and consumers as it takes a more active role internationally, allowing the UK to set up comprehensive competition agreements with our international partners.

In conclusion, I hope that right hon. and hon. Members on both sides of the House see that the Bill updates our national security powers in a proportionate, pro-trade and pro-business manner.

[Bob Seely]

Unless I missed it, there is no definition of national security in the Bill. Will the Secretary of State provide a definition or will he commit to putting one in the Bill to give us something to work with?

[Alok Sharma]

My hon. Friend raises an important point. As he will know, and I am sure appreciate, I am not going to be able to set out every single test that we will apply when it comes to a national security assessment. The application of the tests will, of course, be based on information that we garner from across Government. He can be certain that in using the powers, the Government will act in a quasi-judicial fashion, we will have regard to the statement of policy that has been published, and we will act, again, in accordance with public law principles of necessity and proportionality. I also made the point earlier that any decision can, of course, be challenged by an affected entity.

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[Edward Miliband]

The right hon. Gentleman has taken a huge interest in these issues and, again, speaks with great expertise, and he may well be right that it is possible to do more on the definition. I am sure that is something the Secretary of State will consider. I can see there are definitely challenges, but I would agree with the right hon. Gentleman that the more guidance there can be for business about this, the better, because the more we will avoid a mountain of notifications that are not necessary and the more clarity there will be and the greater protection for our economy.

Fourthly, I want to talk about the role of this House in scrutinising the effects of this legislation. A large number of areas are left to delegated legislation in this Bill. Notably, the Bill enables Ministers to add new sectors to those subject to mandatory notification. I understand some of the reasons for this, but I do hope there can be proper scrutiny, if that is the case, in this House and, indeed, interaction with business. Given the sensitive nature of the issues involved in this Bill, I do think there needs to be a way—an annual report is envisaged, I believe, by the Secretary of State—for this House to monitor how this is working in practice.

I do not speak for it, but we have a special Committee of the House—the Intelligence and Security Committee—that can look at these issues. I would like to raise the question with the Secretary of State whether it could play a role in scrutinising the working of the regime and some of the decisions being made, because there are real restrictions on the kind of transparency there can be on these issues for the reasons raised by my right hon. Friend the Member for North Durham (Mr Jones). The ISC is in a sense purpose-built for some of these issues.

Again, this is one of a range of issues we will seek to raise during the passage of the Bill, because I think that it is really important. We see our role as a constructive Opposition to get this right. There is a shared understanding across this House that we need to update our legislation. There does need to be proper scrutiny, and I hope that there can be good scrutiny in Committee and an openness on the Government side to the points that are made across the House in relation to improving the legislation and a proper way to look at its operation, which is vital to our businesses.

[Bob Seely]

Is the shadow Secretary of State aware that some people on this side of the House, as part of this process and as part of the scrutiny, have been calling for an annual statement on strategic trade dependency to give ourselves an overview and an understanding of the strategic direction of some of our industries, including specific examples?

[Edward Miliband]

It sounds like a good idea to me, and I would welcome that. Actually, that is a convenient segue to the wider points that I want to make on this Bill.

Our view is that this is only one part of the change we need, because I believe that the existing legislation has been found wanting. That legislation was passed by a Labour Government—I checked—and I think it was more or less agreed across parties; certainly, the then Opposition did not vote against it. It has been found wanting not just on national security but on wider issues such as the public interest test for takeovers on economic grounds.

I just want to raise a very specific issue, because it illustrates the point. We are in the midst of a threatened takeover in the tech sector: the Nvidia-ARM deal. We know that ARM is the crown jewel of the British tech sector. We know that Nvidia competes with companies to which ARM supplies. There is a widespread view across the tech sector and across this House that this takeover could be a risk to the future prosperity and success of the sector in the UK, but looking at the Secretary of State’s statement of intent, I do not think that it falls in this list. The list of trigger risks are: disruptive or destructive actions; espionage; or inappropriate leverage. Those are not the issues with Nvidia. The issue is our wider economic interests, which speaks to the point that the hon. Member for Isle of Wight (Bob Seely) made.

In the two months since the takeover was announced, we have heard little from Ministers. It is true that there could be a referral on competition grounds—I am sure that the Secretary of State is a bit constrained in what he can say about this, but let us hear it if there is. But we are deeply worried about the future of ARM. We are worried about the strength of the legal assurances on its headquarters and other matters. It would be good if Ministers could tell us what they think about this issue. These are deeply serious issues about our industrial strategy and our economic base, and they go beyond national security and, on my understanding, the tests that are set out in the Bill.

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[Sir Iain Duncan Smith (Chingford and Woodford Green) (Con)]

It is always a pleasure to follow the right hon. Member for Doncaster North (Edward Miliband), not only because he followed me into leadership and discovered just exactly how pointless that really was. On that we can immediately agree, and he may well have stumbled into another point of agreement; he should know, now that he is a Cummings-ite, that I once employed him and then let him go, so maybe it is time for the right hon. Gentleman to do the same. Anyway, beyond that, I want to congratulate him, because there were things on which I did agree with him, as well as, obviously, things that would need further discussion.

I thank my right hon. Friend the Secretary of State for his deliberations on the Bill, which I will support tonight. It is long overdue. The debates around the Huawei stuff at the beginning of the year really exposed the fact that the UK had lost its way in this area in terms of threats and so on. We were behind the others—Australia, the United States; some of our big Five Eyes compatriots—but at least my right hon. Friend has grasped the nettle and brought this Bill forward, which is laudable. I also thank him for his courtesy in the course of this, in the sense that he spoke to me and, I know, to others. I particularly commend the courtesy of his Minister, the Under-Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend the Member for Stratford-on-Avon (Nadhim Zahawi), who is a very good friend. He went out of his way to talk this through with colleagues on both sides of the House.

This debate is in that context. This is right. I particularly like clauses 32 to 39 and onwards, which deal with penalties, fines and incarcerations, the scope of which is up to five years. These are strong recommendations—slightly stronger than I expected, to be quite frank, but they are well worth it. There are many other good things about the Bill. I will not run through them all, because the Secretary of State did that, and I want to tease out a few points that I think are relevant and need inquiry.

The Bill gives the Secretary of State great powers for industrial strategy—powers to screen these investments that we have been discussing and to address the national security risk that they involve. It also gives him the power to call in investments. We have been through those already. However, I want to pick up on the things that I think are missing from the Bill and that I hope the Secretary of State will look at again in the course of its passage.

First, we have to accept that parked across this space are two very big threats: Russia and, of course, China. In fact, I think China is now the single biggest threat and problem posed to the United Kingdom and the free world. The way it is going—its problems, its difficulties, and the way it is focusing on internal suppression, external expansion and trashing both World Trade Organisation rules and laws—means that we will have to deal with that, and I suspect that this Bill will progressively be right in the middle of that. In dealing with that, I want to raise a couple of issues. In dealing with that, I want to raise a couple of issues.

Without this definition of national security, the Government are giving a stick to beat themselves with at the moment. Having such a definition is important for two reasons. First, it helps to improve clarity—a couple of my hon. Friends wanted clarity. I have looked at some of the definitions out there, including the American definition, which may not be perfect but it does cover some of the wider areas that I will talk about soon under transnational crimes and goes into things such as threats from drug trafficking. It is important for the Government to think carefully about this because it will help to define the Bill.

[Bob Seely]

On what the shadow Secretary of State said, there is obviously a genuine and good debate to be had on the elements of the Bill. This is not necessarily about industrial policy—I say with great respect to those on the Benches opposite—which is part and parcel of another debate. It is about the modern definition of national security and whether we see it as narrow or broad, and there is a strong argument today for having a broader definition of national security.

[Sir Iain Duncan Smith]

I agree with my hon. Friend and I agree that this is not the Bill to discuss industrial strategy. The right hon. Member for Doncaster North made wider points which I think are worthy of discussion, but I am not sure that that discussion should take place in relation to this Bill and I want to keep this narrow.

First, in China something very special is taking place: the idea of civil-military fusion, which is now infecting every single enterprise and company in China. The Chinese military, as we have already heard, uses this concept and strategy to acquire intellectual property, technologies and research for civilian use and for military use. An external investment screening body, therefore, should be set up under this legislation, to establish and investigate cases where this may now affect UK investments. This is very important, because the rules are very strictly applied in China: you co-operate with the intelligence services or you are out of business. You may be out of not just your livelihood but your freedoms.

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[Greg Clark (Tunbridge Wells) (Con)]

It is a pleasure to follow the thoughtful speech of the hon. Member for Dundee East (Stewart Hosie). May I join my right hon. Friend the Member for Chingford and Woodford Green (Sir Iain Duncan Smith) in paying tribute to the Front-Bench team for their courtesy in being open about the development of the Bill and for their communication with all parties in the House?

This is an important Bill at an important time. In recent years, we have seen a tendency on the part of some countries to move towards national measures that seek to protect their domestic economics from the open conditions of international trade, not only in goods and services but in ownership and intellectual property, and we of all nations should be a voice against that. Few nations have prospered through pursuing a policy of national self-sufficiency. Over time, they have become deprived of innovation, competition and investment, although the exposure and experience of international trade and investment can be disruptive and uncomfortable. In the end, workers become less productive than in other countries, consumers pay more and those countries use technology that is behind what other more open economies allow. In other words, they become less prosperous.

The importance of this Bill pivots on its title. Is it exclusively about national security, or is “and Investment” a doorway to a more restrictive view of overseas investment more generally? I am pleased that my right hon. Friend the Secretary of State made it absolutely clear that the Government have decided that it is the former, rather than the latter, although there are some dangers that I want to touch on.

Do we need a statutory framework to ensure our national security when it comes to commercial investments? Yes, of course we do. There are commercial activities conducted in this country that are essential to our national security—defence contractors are an obvious example. Public policy has always recognised that, whether through the use of export controls on their products or, in the case of ownership, through golden shares and the intervention powers of the Enterprise Act 2002 for national security, which have been referred to.

Does the framework need to be kept up to date? Yes, of course it does. As the Secretary of State made clear, technologies that are now pivotal to our national security had not been dreamed of 18 years ago when the Enterprise Act passed through this House. The nature of some of those technologies is such that their financial value may not be reflected in the ownership of the company concerned, so they may be pivotal but not trigger the turnover test. The turnover and the value of the transaction may not be a dependable guide to their importance to national security. The control of those technologies may not be confined any more to takeover bids for public companies; it may include ownership outside the stock market of intellectual property or other assets.

Most nations on earth have a framework for overseeing the national security consequences of investments. It is important that we have one and that ours is up to date. The Government are right not to expand the Bill beyond national security or to introduce, as the right hon. Member for Doncaster North (Edward Miliband) said, a wider public interest or industrial strategy test. I say that as the author of our current industrial strategy, of which an essential pillar is our business environment. That strategy says that we need to continue to be

“an open, liberal free-trading economy in which new businesses can be created easily”

and

“existing businesses can attract investment”.

It is obvious that if a British company has succeeded and has made an international impact, we want it to continue to succeed and prosper in this country, and to do so with its headquarters and operations here. That goes without saying. The most important thing is that the company is founded and prospers in the UK in the first place, as my hon. Friend the Member for Newcastle-under-Lyme (Aaron Bell) said. Especially in fields such as the tech sector, if we tell the founders of new businesses that, should they succeed, they will be excluded from the possibility that they can receive overseas investment, or at the very least that it will be heavily questioned if they should cede control of the business, and that the more their business succeeds, the more draconian the restrictions are likely to be—although Silicon Valley continues to be a major source of international capital investment—the consequence, no doubt unintended, may be that those firms will not be founded here in the first place but will go to places where there is no risk of there being stranded assets.

[Bob Seely]

My right hon. Friend is making an important point, and there is clearly friction on this side over what we see as the crux, but does he accept that the United States and Australia—two free-market nations—will have significantly tighter restrictions after this Bill than we will, and does that concern him?

[Greg Clark]

Of course we should look at the example of other countries; I am sure we will do so during the course of the Bill. However, I would say to my hon. Friend that those two countries are very different in their markets and the size of their economies. The pool of capital that is available to start-up companies in the US is vastly greater than it is in the UK at the moment, although I hope that will change, for reasons that I will go on to discuss. Australia, conversely, is a much smaller economy, which does not have the network of policy regulatory innovation that we have.

We have been a leader; that is our international reputation, and one reason that transactions are conducted in this country is the confidence in our rule of law. We should emphasise and champion that, rather than feeling compelled to follow what other countries are doing in their entirety. Our policy—our industrial strategy—must be to make Britain an even more attractive place for innovative companies to be founded and to stay—not because they are compelled to do so, but because the environment that we provide, in terms of scientific research, educated and trained people, the availability of capital at every stage in their development and the public policy environment make it an attractive place for them to want to be.

Neither must our regime establish, in my view, a list of countries that cannot invest at all in the UK. The test must genuinely be about national security. That is very appropriate. China has been mentioned already in these discussions, and of course it is right and proper that the national security concerns that the House has about China should be reflected through this regime, and these powers are important for that. However, when I was sitting in my right hon. Friend the Secretary of State’s place, I fought hard to save, for example, British Steel in Scunthorpe, Skinningrove and Teesside. The Chinese steelmaker that bought the company, Jingye Group, is essential to the employment of many tens of thousands of people across the north and the east of England, and more in the supply chain. From my recollection, there was no intellectual property vulnerability in terms of its operations. Indeed, the retention of that substantial steelmaking capacity has enhanced our economic resilience, whereas losing it would have seen us relying on imports. I might say the same for Geely, the owner of the London Electric Vehicle Company, which my hon. Friend the Member for Stratford-on-Avon (Nadhim Zahawi), being a west midlands MP, will be familiar with, and which gives valuable jobs to many people.

--- Later in debate ---

[Sir John Hayes]

That is an excellent suggestion from another member of the Intelligence and Security Committee. My goodness, we are here in force and working as a team, as you can see, Madam Deputy Speaker. It is important that the House considers these matters, as well as the Committees I mentioned which have a particular responsibility for dealing with these things and holding the Government to account.

The point was made earlier that the national interest and national security are not identical. But they are coincidental—they do overlap—as there is a point at which national resilience, or its absence, compromises national security. The Government acknowledge that in the scope of the Bill. They talk about critical national infrastructure, as well as technology sectors of various kinds. By the way, I first looked at this issue, Madam Deputy Speaker—this is not a widely known fact, but I am happy to share it in the privacy of this intimate gathering—as a Cabinet Office Minister, with the former Member for West Dorset, Sir Oliver Letwin. We looked particularly at the threats posed to core infrastructure, such as the energy sector. By the way, that threat is posed not only by hostile state actors, but other players who might choose to disrupt core activities, with extraordinarily damaging consequences for our citizens. The Government do look at those things, but historically I do not think they have done so systematically enough. I know my right hon. Friend the Member for Tunbridge Wells, who has a distinguished record in this area, will have had similar experiences to me when we, in turn, looked at energy as part of our ministerial responsibilities.

China has been mentioned. I do not want to speak about it at great length, but clearly the ISC is currently looking at China and will be considering these very subjects in relation to that inquiry. That will come as no surprise to the House or the Minister.

I said this Bill was necessary, but necessity requires a degree of precision and I have some specific questions that I hope the Minister will deal with, either in summing up or by writing to the ISC if he does not have time to address them today. In looking at a specific case, will the investment security unit be able to consider the cumulative effect of a particular business transaction? In other words, will it take into account whether past acquisitions in that sector, when combined with the case currently under consideration, will result in a cumulative threat to national security? Moreover, will the unit consider acquisitions that might result in an indirect threat, for example, through supply chains or managed service providers? This may well involve very small businesses; sometimes a single expert or a small group of experts will play a vital role, as component parts, in either a technology or an industry that is vital to our national security.

[Bob Seely]

My right hon. Friend is making an excellent point in an excellent speech. He is highlighting the need to understand national security not only as individual events and individual companies, big or small, but as a series of cumulative processes. Those gradual processes, over time, are as important to understand.

[Madam Deputy Speaker (Dame Rosie Winterton)]

Order. Just before the right hon. Gentleman replies, let me give a gentle reminder that we have a lot of speakers still to go and I know the Minister wants to give a full reply at the end.

--- Later in debate ---

[Andrew Griffith (Arundel and South Downs) (Con)]

It is a pleasure to follow my hon. Friend the Member for The Wrekin (Mark Pritchard), who was a very successful businessman before he entered the House. I am also looking forward to hearing from my hon. Friend the Minister when he sums up later.

Foreign investment in the UK is an unalloyed good thing, and we would all be much the poorer without it. Inward investment stimulates our economic growth across the entirety of the UK. In 2019 alone, as the Secretary of State told us, almost 40,000 jobs were created thanks to foreign direct investment, with most of those outside London, despite its global reach.

Foreign investors in the UK create more exports and spend more on research and development than our domestic businesses, giving the lie to some of the things that we have heard from Opposition Members this afternoon. Let us remember that every doctor, nurse and careworker who has looked after us during the pandemic is paid for directly from the product of the economic growth that results from being one of the most open economies in the world. That is one reason why I congratulate the Government on recently establishing the new Office for Investment, with my noble Friend Lord Grimstone and No. 10 working together to bring high-value opportunities to the UK, such as on net zero, as well as investment in infrastructure and advancing research and development.

I approach this Bill with a degree of trepidation, much as one may occasionally have to approach a golden goose and suggest moving it to a slightly different, newer nest next door. There are many positive aspects of the Bill that I welcome, such as the clear statement of intent about enthusiastically championing free trade—we heard that from the Secretary of State today. I think it is very important that the Minister restates that at each stage of the proceedings. In many respects, this will be a more modern and slicker framework, providing more certainty and clarity for those we seek to attract here to invest. Timelines for assessments will be set out in law, and, as somebody who was previously a practitioner of acquisitions, I know how capricious the current status quo is, so I welcome anything that can make that more predictable. I also agree that aspects such as the turnover test or share of supply are backward-looking in an era when a business can become successful or strategically important while barely out of the incubator.

I hope that the Minister will not mind if I mention some areas for those on the Government Benches to focus on, from the perspective of a colleague who wants the Bill to succeed in its stated objectives. It is really important that it remains narrowly drawn around the risk to national security, and it will be good to hear the Minister again restate that very clearly. To govern is to choose, and it is important to be as clear about what the Bill is not as we are about what it is.

[Bob Seely]

Will my hon. Friend give way?

--- Later in debate ---

[Bob Seely (Isle of Wight) (Con)]

Naturally, Madam Deputy Speaker, I hope to speak for no more than six minutes. It is a pleasure—genuinely a pleasure—to follow my hon. Friend the Member for Arundel and South Downs (Andrew Griffith). In the spirit of constructive debate, I am going to disagree with some of his points, but it was undoubtedly the most eloquent argument in favour of a highly free-market approach, though I will ask some questions on it, if I may. I am going to talk a little about national security, and make some supportive suggestions for the Minister and some general points about the nature of national security in the modern world with China.

There is much to support in this Bill, and we can all agree that most of it is very necessary and very good. I would also like to thank the Minister, who is obviously held in very high regard by those on the Government Benches, for his engagement; it is always good to talk to him. I have actually rather enjoyed listening to the debate, because clearly a lot of constructive suggestions are being made, and I thank my hon. Friend the Member for The Wrekin (Mark Pritchard) for his kind remarks.

I am going to suggest some amendments and then explain why I think they are necessary. For me, there is an issue about national security and our definition of it. That has not been offered so far in the debate, but it sounds like the Government’s definition is too narrow in this age. That does not mean that we are talking about industrial policy. I was very interested to listen to many of the speeches by Opposition Members, including the hon. Member for Aberavon (Stephen Kinnock), who made some very good points. This is not the space for industrial policy, but it is a question of how we interpret national security.

The amendments I think we should be tabling are on a character test and a public interest test, if not specifically a human rights test. Nobody has ever accused me of being a bleeding heart liberal, but I think that, in this day and age, to have no human rights test, even one wrapped up in a public interest test or a character test, is genuinely confusing, especially because countries that are in many ways more free marketeer than us do have them. Australia has such a character test and a public interest test based on national security, competition, tax revenue, the impact on the country and what it describes as a common sense test. Forgive me if I am wrong, but I thought that we had rather invented common sense, but we do not necessarily have a common sense test or a character test.

While my hon. Friend the Member for Arundel and South Downs said that he is—I hope I am not misquoting him—ambivalent about the identity of people moving in, I am not. There is an issue about Huawei and there is an issue about ZTE because they are fronts for an authoritarian state. As well as a moral question over what authoritarian states do in their own countries—and, yes, we do tend to wag our fingers at people too much—there is a justified question to be asked, because how foreign authoritarian states treat their own people is very often, given half a chance, how they would treat us, so there is an issue for me here.



The next amendment relates to CFIUS, the Committee on Foreign Investment in the United States. That is a more transparent process and, if I understand it correctly, more people have to sign up to agree, so it is not just sitting within their version of the Department for Business, Energy and Industrial Strategy. Defence, the Secretary of State and other players get to sign off on funding for companies. In many ways, CFIUS has a higher threshold than we will have in this country. I do not think anyone is accusing the United States of being less free marketeer than we are, but in this area, they are more conservative. I am not saying they are right or wrong, but I think that it is an important point to note.

My right hon. Friend the Member for South Holland and The Deepings (Sir John Hayes) and the hon. Member for Dundee East (Stewart Hosie) spoke about the cumulative threat. It is not about a single company or a single issue, but the way an industry changes over time. Indeed, the hon. Member for Aberavon made that point about the slow collapse of the British steel industry. Also, the point has been made that a lot of foreign direct investment is good, but there is clearly a balance.

Finally on the amendments, I would be keen to see something more stated, more obvious or more explicit on critical national infrastructure. Where would we be with Chinese investment in our nuclear industry, for example, if this Bill was already law? That is a matter for genuine debate.

I will move on to one or two other specific points. We are forever telling people how we prioritise human rights and how we lead the world, yet there is nothing about human rights in the Bill. As I have said, I think that lacks consistency, and we need a public interest test.

Next, we are talking about national security without a definition. I was saying to my hon. Friend the Member for Bolton North East (Mark Logan) that we need a definition. He is very much a Sino expert: he lived in China and speaks Chinese, which is rather more than I do. He said that it is a very Confucian thing to say that, to have a debate, we need to understand the definition and know what we are debating. It is a genuine Confucian point: where is our definition of national security to have a debate with? We need that. In this day and age, we need a wider definition of national security. It is not just nuts and bolts on tanks—I am not saying that the Minister is saying that—but much wider than that.

The former leader of our party, my right hon. Friend the Member for Chingford and Woodford Green (Sir Iain Duncan Smith) talked about civil and military fusion in China. I am somebody who lived in the Soviet Union. I have travelled in China a bit, and I have worked in sort of authoritarian states. The purest free market position here is dated. I am not saying we need an industrial policy approach, but we need an understanding that sees strategic interests—national security and the national interest—in big data, artificial intelligence, facial and gait recognition and all these technologies that Moscow and Beijing want to use to control their own people. I am surprised that the technology being developed by universities potentially does not fall under the Bill, and I believe it needs to.

My hon. Friend the Member for Gloucester (Richard Graham) made the point, as he ever does, about the importance of Chinese foreign direct investment, and I agree. The point was also made by my right hon. Friend the Member for Tunbridge Wells (Greg Clark). Chinese FDI clearly has an important role. It enriches our country, but there is a cost as well.

Finally, we need an amendment on strategic trade dependency. I would like to see an annual statement from the Government on the nature of our strategic trade dependency. If I had stood up a year ago and said, “Personal protective equipment is a strategic issue for this country,” everyone would have laughed and Front Benchers would have been swapping amused WhatsApps at the foolishness of a Back Bencher. Who now denies that PPE is a strategic issue, given the amount of money it has cost us and the delays because we did not have our own industry? Over time, that industry had faded away, and now that has caught us out. There is a wider strategic debate.

There is also the nature of dynamic risk, as my hon. Friend the Member for South Holland and The Deepings said. Everything that we know about the last year, with the changing nature of authoritarian states, such as China and Russia, the fusion of the civil and military and the entirely different approach to power in those countries, makes me realise that the national security definition that needs to be offered in the Bill, but currently is not, should be, if not broad, then at least have a greater understanding of the modern world we live in than is currently the case in the Bill or this debate. I very much hope there will be movement on that from Ministers.

--- Later in debate ---

[Anthony Mangnall]

It is important to recognise that China has a poor track record in this case, which has not been addressed, but of course we are not against foreign ownership. We want to ensure that the structure is in place to scrutinise these acquisitions in the correct way that protects opportunity in this country. I thank my hon. Friend for his intervention.

A few months ago, I broke cover early on to vote against the Government over the proposals to see our 5G network built by Huawei—and I have not lived it down yet! I did so because our core infrastructure should never be compromised by foreign investment, and that was a severe threat to our national security. I welcome the fact that the Government have moved so significantly and plan to phase out Huawei by 2027.

I also did so because of the reports of human rights violations by Huawei. The success of my right hon. Friend the Member for Maidenhead (Mrs May) in passing the Modern Slavery Act 2015 is a proud moment for the UK, but it is worthless unless we use this Bill to stop dealing with companies that are reported to be using slave labour and looking to invest in the United Kingdom. Nothing in the Bill prevents companies that are complicit in gross human rights violations from investing in the United Kingdom, and that is a huge oversight. It would be an injustice and morally wrong for the UK ever to look the other way as money created from slave labour was invested in this country.

We have been told that this is not the right Bill for such provisions, but with all due respect, that is the same excuse used by the Whips on every single occasion that I have raised concerns about a piece of legislation. If we are going to bring forward the correct pieces of legislation, let us bring them forward. If not, the Government should not be surprised if we try to tack on amendments to address the issues that so many Members across the House feel strongly about.

[Bob Seely]

My hon. Friend is making such a brilliant speech that I do not want to interrupt him, but I will do so briefly. Does he agree that all these concerns could be wrapped up in a public interest amendment—including, for example, a human rights element—which would give Ministers some leeway and scope to address them?

[Anthony Mangnall]

My hon. Friend is absolutely correct. I hope that the Minister is listening, that we might expect such an amendment to arrive before us in due course, and that, with the consent of the House, we might see it implemented.

As I was saying, the line between state and civil actor has been blurred. The civil/military fusion requires legislation, and the Bill is in need of development to counter it. I therefore ask the Government very quickly to consider the following few proposals.

First, I would suggest the introduction of a committee on foreign investment. Our colleagues in America have introduced such a system. That would alleviate the pressure for any decisions to be made from political expediency. I believe, as my hon. Friend the Member for East Worthing and Shoreham was saying, that that would promote parliamentary scrutiny and transparency and ensure that there was an understanding of the entire system.

Secondly, I would suggest that the definition of national security be expanded to include human rights. We do more often than not, in this country and in this place, develop policy around moral obligations. This should be one of those cases.

Thirdly, I suggest that we increase the Bill’s scope and use it to tackle organised crime. That has not been mentioned. The UK very successfully closed the domestic trade in ivory. There was a trade across the globe—a domestic trade in ivory that was linked to al-Shabab. There is a way to track organised crime down to terrorist organisations. There is scope within the Bill to do so.

Fourthly, a recent study found that at least 929 UK shell companies used in 89 corruption and money laundering cases accounted for £137 billion. Those companies are registered through Companies House. The Bill should be used to alleviate the burdens and ensure that there are fewer implications for the UK.

We can attract investment and tackle malign activities. I hope the Government will engage, in the same constructive manner in which they have introduced the Bill, and I will be supporting them tonight. I am sorry for going on for so long.

Shale Gas Exploration: Planning Permission

Bob Seely Excerpts

Wednesday 12th September 2018 Westminster Hall

[Mr Bob Seely (Isle of Wight) (Con)]

On the Island we have great problems as well, because we are one of the most geologically unstable parts of northern Europe. Does my hon. Friend agree that it is very poor precedent for the Government effectively to force through something that is locally unpopular in many areas, because they could do so with many other things in future, including housing targets? Overall, as well as fracking, this is poor democratic accountability on the part of Government.

[Lee Rowley]

I concur with my hon. Friend’s statement on that matter.

Draft Contracts for Difference (Miscellaneous Amendments) Regulations 2018

Bob Seely Excerpts

Wednesday 11th July 2018 General Committees

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

It is a pleasure to serve under your chairmanship, Sir David.

As the Minister has set out, a number of amendments—some small, some large—have been gathered together under the heading Contracts for Difference (Miscellaneous Amendments) Regulations 2018. We have therefore already booked that title for this year, and should other portmanteau proposals come forward, presumably we will have to think of a different title for a future statutory instrument.

The miscellaneous amendments have different weights attached to them, and perhaps I can make progress if I apply very little weight to the two amendments that concern CHP plants and waste. To some extent we have discussed those amendments before, and they relate—among other things—to a desire to ensure that only the most efficient CHP plants obtain CfD arrangements, while at the same time enabling those CHP plants to distinguish between what they do for heat and what they do for power. Previously that balance was not quite right, and the amendments make a positive change in that direction. The amendment on waste makes a positive change by ensuring that what is done regarding sustainability criteria for fuel is properly carried out. Those amendments have two big ticks in the miscellaneous box and we need pay them no further attention, important though they are to the lives of future CHP plants.

The third amendment is a little less miscellaneous, and we need to understand what it seeks to do. The amendment would bring onshore wind back into place in the United Kingdom, and I suspect that that is the subject of rather more internal discussion on the Government Benches than on the Opposition Benches. Labour Members would love onshore wind to come back across the United Kingdom, as long as any concerns are addressed, there is community agreement to the onshore plants, proper planning arrangements are undertaken and proper value for money is obtained. We know, I think, that moves are afoot by the Government, and those who would take substantially the same position, to move such arrangements forward. As far as I can see, on this occasion it was decided to bring back some onshore wind where it was felt that such schemes were already in the pipeline. As the Minister said, a number of schemes could proceed rapidly and fruitfully, and if those schemes could be unleashed, we could have onshore wind in those areas.

The problem is that if we are trying to do that without actually bringing onshore wind back as such, we need a device to do it. The device used here is to say that those places where onshore wind might come back must be defined as a remote island. The problem that then arises is what constitutes a remote island. If a remote island is defined in a careless way, we might find that onshore wind is brought back in places where it was not intended.

Secondly, since onshore wind has for a long time been approved under state aid arrangements by the EU, bringing it back by creating a different category called remote island wind means that state aid clearance must, effectively, be applied for all over again. It would not be possible to apply specifically for onshore wind to come back on stream only on certain islands; that would certainly not get state aid approval, because area-specific arrangements cannot be declared for state aid clearance. It would be necessary to say that in principle it could be anywhere, and then define things to narrow it down to the desired result. In this instance, that result would be the Hebrides, the Shetlands and the Orkneys.

Things then get a little amusing, because on looking at the definition of what a remote offshore island is, we can see the wheels going round. It starts by saying, “It has to be an island.” Well, the hon. Member for Isle of Wight is in his place this afternoon; it might include the Isle of Wight. However, the Isle of Wight is of course in England, and the present policy arrangements probably would not include suddenly covering the Isle of Wight with wind farm applications.

[Mr Bob Seely (Isle of Wight) (Con)]

The hon. Gentleman is kind to mention the Isle of Wight, but I hope he is not implying that we are remote.

[Dr Whitehead]

The hon. Gentleman strikes the nail on the head, because the regulations progressively exclude the Isle of Wight from the definition. The first criterion is that the remote island needs to be connected by a cable to the mainland, but not by any old cable. It must be a 50 km cable to a main joining point for the national grid or the distributing grid and, furthermore, 20 km of that cable has to be under the sea. There is not a 20 km undersea cable between the Isle of Wight and where the interconnector to the Isle of Wight lands, near my constituency in Southampton. So that is the Isle of Wight out of the question.

The second criterion is that the remote island has to be 10 km away, along all of its coastline, from the mainland. That also eliminates the Isle of Wight, as well as Anglesey and a number of other places. So that is sorted out.

Gradually, by a process of elimination, the point that the Government wanted to get to is reached: the only qualifying islands happen to be the Hebrides, the Shetlands and the Orkneys. There we have remote island wind by definition, without saying what a remote island is. Well done to the Government for getting to that position—the introduction of onshore wind without actually introducing onshore wind. It is quite clever.

In order to make a separate category, however, it is necessary to compare the situation with what would be the case for onshore wind, which already has state aid, and differentiate the two. Indeed, the impact assessment does just that. In an interesting passage, it states:

“The Government considers that the higher costs faced by RIW projects mean that at present they would find it difficult to effectively compete with the more established technologies in Pot 1, including ‘mainland’ onshore wind projects”,

none of which exist, of course, because they are banned. An impact assessment has been carried out comparing remote island wind with onshore wind, when there is nothing to compare with at the moment because there is none, in order to justify a marginally higher administrative CfD than would be the case were it simply to be defined as a variant of onshore wind in general.

Consequently, what we have here is onshore wind coming back potentially at a higher cost than would have been the case had onshore wind come back with the variation, with the overall state aid approval being as it was for onshore wind as a whole. This move, smart though it is, is not without potential cost. I hope the CfDs that come forward under pot 2 will be very competitive; I am sure they will be, because onshore wind has come down to such an extent that there may even be a net nil cost for the administrative CfDs that will be put forward. We hope that that will be the case but, in principle, a mechanism has been put in place, because of this particular convoluted definition, to implant a little more expense in the process than would otherwise be the case.

The other thing I ought to mention in passing is that, smart though this mechanism is, it is not entirely perfect in terms of English onshore wind. Onshore wind is banned across England—I think we agree that that is the case—except, now, for one place, which is the Isles of Scilly. They have an undersea cable of more than 50 km—in fact, they have a cable of 55 km to the agreed connection—more than 20 km of which is under the sea, and they are 23 miles off the coast of Cornwall. We will have inadvertently restored onshore wind to England this afternoon. Admittedly, I should not be taken as advocating in any shape or form the placing of wind farms on the Isles of Scilly, but that is what we appear in principle to be doing.

As the Minister can gather, I am one-third delighted by this move, one-third amused by the hoops and reverse somersaults that we have had to go through in order to achieve it, and one-third concerned that the much easier process—to bring onshore wind back in one way or another, with proper constraints, planning arrangements and care—has not been undertaken.

In that context, I ask the Minister one question on the whole process. I do not expect him to stand up and agree with my analysis of exactly why this has been done, but it is the case that state aid approval was applied for, I think, for this particular subset definition. I think it is also the case that the European Commission has informally told the UK that it would not object to this being put in as a sub-definition. I am not clear whether anything formal has yet come from the EU to the UK saying, “Not only will we not object, but we will stamp this as far as state aid approval is concerned.” I would be grateful if the Minister confirmed whether that is the case.

After all that, we will not seek to divide the Committee this afternoon. I merely place on the record the recommendation that the next step, should there be a further statutory instrument containing miscellaneous amendments, should be to bring onshore wind back properly, with proper community protections, to ensure that we get the benefits and savings from onshore wind that many of us in this Chamber want to see and find that we are prevented from enjoying.

GKN: Proposed Takeover by Melrose

Bob Seely Excerpts

Thursday 15th March 2018 Westminster Hall

[Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)]

I beg to move,

That this House has considered the proposed takeover of GKN by Melrose.

I start by saying what a pleasure it is to serve under your chairship, Mr Stringer. I think it appropriate to mention as a matter of interest that, as a trustee of the Industry and Parliament Trust, a few years ago I undertook a secondment at GKN and witnessed some of its activities throughout the world at first hand. It is also appropriate that I mention Professor David Bailey of Aston University for the work he has done on this issue, which in part informs my comments today. I know there are other speakers with specific constituency interests who want to participate in the debate, so I will try to leave plenty of time following my introduction for them to make appropriate and relevant contributions.

I sought this debate because of the strategic interest of the issue for British manufacturing, but also because of its wider implications for long-termism, investment and responsible capitalism. In a former incarnation, when I was Chair of the former Business, Innovation and Skills Committee, we held inquiries into the Kraft-Cadbury takeover and the proposed Pfizer-AstraZeneca takeover. They flushed out many of the relevant issues. They are now even more relevant and are highlighted by this proposed takeover. Although GKN may be a rather different sort of manufacturer from Kraft and Cadbury, or Pfizer and AstraZeneca, the issues are very similar.

Following the deliberations of the Select Committee on those issues and its recommendations, there was an enhancement of the takeover code, particularly in the context of post-offer undertakings, which arose from Kraft reneging on the commitments it had made to Cadbury during the course of negotiations. I am pleased to say that that issue was highlighted in the inquiry by my hon. Friend the Member for Leeds West (Rachel Reeves) on this particular takeover. I note that my hon. Friend commented this morning that Melrose, in the context of this takeover, has refused to commit itself to the sort of post-offer undertakings that would be legally binding and potentially give reassurance to GKN shareholders.

[Mr Bob Seely (Isle of Wight) (Con)]

Does the hon. Gentleman agree that in many cases Melrose aims to own businesses for only between three and five years, and during that time seeks to maximise shareholder value, selling on the parts of those businesses that it sees as underperforming, sometimes without regard to the long-term benefit of the business and its individual plants? Therefore, a takeover by Melrose may mean a break-up of GKN. Does he share my concerns and those of others like me, who are fearful for the GKN plants in their constituencies? There is one in the Isle of Wight.

[Graham Stringer (in the Chair)]

Order. I would remind Members that interventions should be brief.

BAE Systems Military Air & Information Sites: Job Losses

Bob Seely Excerpts

Tuesday 10th October 2017 Commons Chamber

[Claire Perry]

The hon. Gentleman will know that my right hon. Friend the Secretary of State for International Trade is flying the flag relentlessly for all aspects of the British economy, including British ships. I am sure he would be delighted to answer a written question or a letter from the hon. Gentleman on that point.

[Mr Bob Seely (Isle of Wight) (Con)]

I spoke to BAE this morning as soon as I heard the news. What support will the Department for Work and Pensions provide to those affected? Will the Government assure me that any support package includes Isle of Wight workers affected at the BAE Cowes plant in my constituency? May I also highlight the importance of the advanced radar programme on the Isle of Wight, both for UK defence and for island jobs?

[Claire Perry]

The Department for Work and Pensions has a well tried, tested and effective rapid response deployment process to get in and talk to companies and people affected during the consultation process to make sure they are aware of any statutory rights and responsibilities, but also of any opportunities. I understand my hon. Friend’s point about the Isle of Wight and I will make sure it is reflected in any work going forward.

European Union (Approvals) Bill

Bob Seely Excerpts

3rd reading: House of Commons & Committee: 1st sitting: House of Commons & Report stage: House of Commons
Tuesday 10th October 2017 Commons Chamber

[Bill Esterson (Sefton Central) (Lab)]

The European Union (Approvals) Bill is a two-clause Bill, as the Minister has said. It will approve four draft decisions of the Council of the European Union in relation to the participation of the Republics of Albania and Serbia as observers in the work of the Agency for Fundamental Rights, and the signing and conclusion of a new agreement between the EU and Canada regarding competition law, including the exchange of information between the EU and the Canadian Competition Bureau. Approval of those decisions by means of an Act of Parliament is necessary under the European Union Act 2011 in order for a Minister to vote in favour in the Council.

The Fundamental Rights Agency replaced the European Monitoring Centre on Racism and Xenophobia in 2007. As the Europa website states, the agency advises EU institutions and national Governments on fundamental rights, particularly in the areas of discrimination, access to justice, racism and xenophobia, data protection, victims’ rights and children’s rights. The agency’s areas of work have been determined through a five-year framework, and the main priority areas include the fight against racism, xenophobia and related intolerance. EU candidate countries can participate in the FRA as observers. The Bill approves two draft decisions on the participation of the Republic of Albania and the Republic of Serbia as observers in the FRA’s work. We support the draft decisions concerning the participation of Albania and Serbia in the FRA.

Competition is vital to our economy, the success of our businesses and the prosperity of the people of our country, and the encouragement of healthy competition is vital. National Governments have a vital role in ensuring that a fair market exists, and not just a free market. The way in which Governments work together is also crucial in determining whether markets are free, fair or otherwise. The decision of the Trump regime to impose punitive tariffs on Bombardier will have a disastrous effect on the workers and communities of Northern Ireland, and on the economy. Such tariffs, if they are allowed to stand, exemplify the use by companies such as Boeing of market dominance to destroy competition.

[Mr Bob Seely (Isle of Wight) (Con)]

I am not sure that I like Donald Trump any more than anyone else does, but does the hon. Gentleman understand the difference between a regime and an Administration? He calls the Trump regime a regime, but in fact the Trump Administration is an Administration. It is a democratically elected Administration, not some sort of hard left Venezuelan or Cuban-style regime.

[Bill Esterson]

I do not think there is any danger of confusing Donald Trump’s Administration or regime with anything of the hard left.

That Boeing can act as it has done—initiating trade disputes in a segment in which it does not compete—with the full support of a protectionist US Administration demonstrates the need to ensure that every effort is made to deliver healthy and fair competition. The reliance of some Ministers on the US for trade and for our own economic success has been brought into sharp focus by the actions of the Department of Commerce. Notably, this applies to the International Trade Secretary, who seems to think that our relationship with the US is the answer to all our prayers, but it clearly is not.

--- Later in debate ---

[Andrew Percy]

I wish to forget that the hon. Gentleman was speaking, given, again, the nonsense he was trotting out that in some way this is Parliament’s failure. He clearly does not understand how European decision making has evolved through the various European treaties over the years and how the role of this House in that legislative process has been diminished. He is a member of a party that wants to retain decision making in Brussels, rather than repatriate it to the UK, so it is a little difficult to swallow being lectured about parliamentary democracy by a representative of a party that wishes decision making to remain in Brussels.

I am delighted, as I was at previous stages, to support the Bill. It is important, as we exit the EU, that we continue to be good partners in Europe, and if it is the will of Serbia and Albania to join the EU in the future, it is not for us to get in their way. Regardless of whether we are in favour of leaving or remaining in the EU, we will all wish them well as they embrace the values that we in this country and our allies in Europe hold so dear. It is important for their own stability that they be allowed to progress unimpeded down the path they have chosen. Also, by actively supporting the Bill, we show what we wish to be after we have left the EU: good partners with Europe. As a proud Brexiteer, therefore, I am more than happy to support a Bill that might well pave the way for the expansion of the EU.

On the provisions as they relate to Canada, the Minister was unable, quite reasonably, to say whether we would wish to participate in these arrangements in the future. That will of course be a matter for our final arrangements with the EU. The hon. Member for Sefton Central (Bill Esterson) set out a position, and the Opposition have set out any number of different positions on Brexit, all of which they appear to be capable of maintaining at the same time. That is an interesting approach to such an important issue.

[Mr Seely]

How many positions do we think the main Opposition party have taken? I have lost count. Is it five, 10, 15? Where have we got to?

[Andrew Percy]

I only got a C in GCSE maths, so I am afraid I cannot do such advanced sums involving so many numbers at any one time, but it is certainly a lot, and it is certainly the case that the position taken depends on which shadow Ministers—be they impressive or unimpressive—pop up on the television screen.

Let me now deal with the broader relationship with Canada. This whole process—not only through the agreement that we are discussing, but through CETA—has been an important indicator of how we may wish to do business with Canada in the future.

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[Vernon Coaker (Gedling) (Lab)]

This is a Bill that I think we can all support. It is small and we have consensus but, as other Members have said, it is still a significant measure. I refer, in particular, to the decision to grant Serbia and Albania observer status at the European Union Agency for Fundamental Rights.

One of the EU’s great successes, which I think the House should celebrate, notwithstanding the decision to leave, is its support to progressive movements in many former Soviet bloc countries in eastern Europe. Many of those countries are now full members of the EU, but many others, although now parliamentary democracies, are still seeking to move forward in a range of areas, as the Minister reminded us, such as in combating sexism, racism, homophobia and conservative nationalism in the worst sense of the term. It is important that we reflect on that in this debate.

Only 20 years ago, as the hon. Member for West Aberdeenshire and Kincardine (Andrew Bowie) mentioned, this country supported Kosovans. We saw ethnic cleansing in that part of Europe, just a few hours away from Heathrow. We thought that ethnic cleansing had been banished, and that it was impossible for that to occur again in Europe after the horrors of the second world war. The instability of the situation threatened the wider region. It has taken Serbia and Albania 20 years to reach the position in which they can be granted EU observer status.

There are still significant challenges. I recently met representatives from Albania at a conference in Rome on slavery and human trafficking, and we were reflecting on the challenges that the country still faces—I am not as familiar with Serbia, but I know that other Members are. All that I wanted to do was stand up in this House and say that the British Parliament thinks about and understands the people who are seeking to bring about progressive change in their counties, sometimes in very difficult circumstances.

There is a question for us, if and when we leave the EU—without getting into the divisiveness of whether or not we should—of how we can continue to support progressive movements that are seeking to tackle some of the problems in Serbia and Albania, and indeed in counties such as Montenegro. The Government will need to consider how to approach that. That sort of consideration can easily be lost in our debates on the EU, but it is of fundamental importance.

Serbia and Albania have made massive advances, but there is still a long way to go. The granting of observer status is another significant step forward. The people in those countries who are seeking to advance the causes of sexual equality, anti-racism and a nationalism that does not remind us of the horrors we have seen before need our support, and they need to know that we are interested, that we care, and that we will support them in their endeavours. The Bill is small, but it is crucial to us all.

[Mr Seely]

I am delighted to follow the hon. Member for Gedling (Vernon Coaker) and I will hopefully pick up on a couple of his points. I will speak briefly in support of the Bill, and specifically Serbia and Albania’s admission to observer status in the European Union Agency for Fundamental Rights. That is important for us, but it is extremely important for those two countries, particularly Serbia.

Whether we like it or not—we clearly do not, because we thought that it had ended about 20 years ago—we are in something of a cold war with the Russian Federation, or at least with its leadership. The aggressive cooling of relations was advertised in President Putin’s Munich speech back in 2007, and it could be said that there was a gestation period of some 10 to 15 years before that during which the forces of proto-communism and socialism, hard-line nationalism, and even an aggressive, virulent fascism coalesced around an illiberal hostility to the western world. Whether we like it or not, there is a battle for Serbia’s future and, broadly speaking, there are two models for where the country is going. One is pro-EU and involves democracy, individual rights and hostility to minority oppression. It is not a perfect system—it could be said that a little more adversarial politics would be no bad thing—but those things are critical to a civilised society.

As the hon. Member for Gedling was saying, the other model that the Serbians face is the one that the Russians want: hard-line nationalism; hostility to individual rights; perhaps a celebration of a sort of pan-Slavism; and aggressive propaganda against NATO, the EU and “gay Europa”, as the Russian official media would have it. The hon. Gentleman mentioned conservative nationalism, but it goes beyond that—it is a virulent form of illiberalism in almost all forms. It is almost proto-fascist, although it gains support from both sides, with avowed fascists and avowed communists having a similar social agenda involving antagonism towards homosexuality and what they perceive as deviance, and a slavish hierarchical acceptance of an order that we would consider stifling and deeply unpleasant.

Examples of the active destabilisation that has sadly been engaged in in the Balkans include the recent attempted coup in Montenegro, which was allegedly carried out by the GRU—Russia’s Main Intelligence Directorate—and the handing out of Russian passports to Serbians in the Balkans. The aim of that is to give the Russians the ability to interfere in politics in that part of the world and, in the worst-case scenario, to create the destabilising, small-scale conflicts that have marked Russia’s behaviour in the former Soviet states. There is also economic and political pressure in mainstream Serbia to try to get the country, and powerful individuals within it, to turn away from a broadly pro-western, pro-EU model.

What can we do about that? From my experiences in former Soviet states, the easiest things are probably free trade and free movement—all those things with the word “free” in—as well as support in every conceivable way for civil society, which the EU’s fundamental rights will help to grow. That is the fundamental basis on which democracy will be strengthened on the basis of our alternative—a broadly pro-western, liberal alternative —with a rejection of more aggressive, destabilising nationalism. For those reasons, the Bill is somewhat important to us, but it is extremely important to the Serbians.

[Paul Scully (Sutton and Cheam) (Con)]

We are still a member of the EU, so it is right that we proceed with the Bill as quickly as possible. We are not talking about leaving the EU on bad terms, so it is right that we spend time considering such cases as good members of the EU. Two of the four procedures that we are considering under the Bill involve giving Serbia and Albania observer status in the European Union Agency for Fundamental Rights. The agency replaced the European Monitoring Centre on Racism and Xenophobia. It collects data about fundamental rights and seeks to engage the public and civil society on tackling such issues. That sounds to me very much like the work of the Council of Europe. I have returned this morning from Strasbourg, where the plenary session of the Parliamentary Assembly of the Council of Europe is still going on. That body needs a lot of reorganisation and work to bring it up to scratch. However, there was mention earlier of what we might do post-Brexit to engage with such agencies, and it occurs to me that there would be an opportunity, if we were so minded, for us to consider how we might bolster an organisation such as the Council of Europe and wrap things up, rather than duplicating effort.

I think that the last time I was in Strasbourg was during the April session, and I opened up my locker yesterday to find my speaking notes from that trip. The Council of Europe building, which sits next to the Strasbourg European Parliament building, is essentially mothballed. There is a lot of waste and a lot of duplication, and we could work with our European colleagues and partners to ensure that we streamline things and focus on the frontline of protecting people’s fundamental rights. This debate will affect many millions of people.

Albania and Britain have some quite odd but big links. C. B. Fry was offered the monarchy of Albania, which he turned down, giving rise to the reign of the wonderfully named King Zog I. Norman Wisdom is also fêted in Albania; I think he has a statue in Tirana. The reason why I know these two bits of pub quiz trivia and little else about Albania was mentioned by the hon. Member for Glenrothes (Peter Grant): Albania has been a very closed country for a long time. It is important that we work however we can to open up that country and keep it progressing, joining the international community in the fullest possible way and protecting people’s rights.

I welcome the accession of Serbia and Albania to the agency, but I also want to say a word about the Canadian aspect of the Bill, as we consider competition law ahead of the ratification of the CETA deal. I have been lucky enough to travel around the world over the past few years to places such as Bangladesh, Burma, Saudi Arabia, the Emirates and Taiwan, and they have all been looking at how they can work with the UK through free trade deals. I am excited about the prospect of having free trade with as many countries as we can. I do not care if the EU is involved in this free trade—we need to widen it out so that we can break down barriers wherever they exist. Working on CETA and against anti-competition procedures can only be a good thing for our European partners. Although we might not be around in the EU to benefit from the CETA deal, it is only good for European and global trade that we should push this Bill through.

Question put and agreed to.

Clause 1 accordingly ordered to stand part of the Bill.

Clause 2 ordered to stand part of the Bill.

The Deputy Speaker resumed the Chair.

Bill reported, without amendment.

Third Reading

Renewable Energy Generation: Island Communities

Bob Seely Excerpts

Tuesday 4th July 2017 Westminster Hall

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

Sir David, it is as ever a great pleasure to serve under your constituency—under your chairmanship; I am sure your constituents feel the same about your activities on constituency days. In my first Westminster Hall debate, you were a mere Mr Amess. I am delighted you are here.

The right hon. Member for Orkney and Shetland (Mr Carmichael)—I remember when he was my right hon. Friend—is a gentleman in the true sense. The way he has conducted the debate, on a subject in which he has a lot of interest and expertise, and the way he speaks up for renewable energy generation in island communities, is truly commendable. As he is fully aware, he has me at a little disadvantage, as I have been in the job for precisely three weeks. I am not yet the expert he is, but I would like to make it clear to him and other Members that I have listened carefully to every word and intend to set out the Government’s position in what I hope he will accept is the right way at this stage.

We know that the islands have long been a hotbed for innovations in renewable energy generation. The Burgar Hill wind turbine site in Orkney, for example, hosted some of the most innovative experimental turbines in the ’80s and early ’90s. As has been said, the European Marine Energy Centre, which is also located on Orkney in the right hon. Gentleman’s constituency, has since its creation more than 10 years ago maintained its position as the world’s leading wave and tidal stream testing facility. The fact that it has hosted the prototypes for almost all the world’s leading devices, including the Atlantis turbines deployed in the Pentland Firth last summer, is a testament to its premier global status.

I also understand that the grid infrastructure necessary to support the proposed wind farms on the remote islands of Scotland could, if built, act as a springboard for further development of our wave and tidal sector and give this emerging industry a further boost towards commercialisation, helping to maintain the UK’s leading position in these technologies. The challenge for the wave and tidal sector will be to innovate and to reduce its costs sufficiently that it can compete with other renewable technologies. Those costs have fallen significantly during the past few years, and we fully expect that downward trajectory to continue. This is now a very competitive market, and developers will need to respond to that challenge; the sector can no longer take high subsidies for granted.

As the right hon. Gentleman is aware, my right hon. Friend the Secretary of State for Business, Energy and Industrial Strategy visited the Western Isles this year to learn about this issue at first hand. The hon. Member for Na h-Eileanan an Iar (Angus Brendan MacNeil) kindly hosted the Secretary of State’s visit, and I shall take this opportunity to thank him again for what my right hon. Friend described as a productive and informative trip. I know that it will not help or please the right hon. Gentleman unless some action is taken, as he has pointed out to me.

The issues are clear, and we know what the gains are. I shall go through the issues in no particular order. The first is ensuring healthy competition to support the best projects and get the best value for the consumer, while recognising that it may take a certain volume of projects to justify building the all-important new island-to-mainland links. I am aware that those are a vital piece of the overall picture, with their own timeframes and set of complex decisions, so there are really two areas of decision.

The second issue, as the Secretary of State made clear, is ensuring that local communities, which have been enthusiastic about this industry, receive appropriate benefits for hosting these projects.

[Mr Bob Seely (Isle of Wight) (Con)]

Excuse me, Sir David, if I do not quite get some of the etiquette right.

I thank my hon. Friend the Minister for what he has said about the importance of the popularity of tidal and other energy-efficient projects. It is right to say that islanders can play an important role, but does he agree that energy policies should take into account other policies such as regard for the landscape? Wind turbines were very unpopular with many of my constituents, because of the damage that they did to the landscape in areas of outstanding natural beauty, but solar panels are more popular. Should wave and tidal power take off, there would be, again, an aesthetic element as well. It is wonderful to have these things, but that should not be at the expense of a tourism economy in a place such as the Isle of Wight.

[Richard Harrington]

I thank my hon. Friend for his intervention. Time does not permit me to answer in full, but I would be happy to meet and discuss this subject with him on behalf of his constituents.

Thirdly, we have to define what is meant by “island wind projects” in a legal context, and that is being done; we are working through the issues. The right hon. Member for Orkney and Shetland is very aware of that matter.

Last but not least, we need to give clarity to the developers of island projects while being fair to developers of other projects elsewhere and to consumers across the UK.