Oral Answers to Questions

Debate between Ed Davey and Michael Connarty

Thursday 5th February 2015 Commons Chamber

[Mr Davey]

He is probably talking about the draft strategy. He needs to see the final one before he makes such points. The fuel poverty regulations that we have introduced are radical and have not received the attention they deserve. Under the regulations, by 2030 any person who is in fuel poverty must be in a house of at least EPC rating C. That is a major step forward and we have the policies, set out in the fuel poverty strategy, to deliver that.

[Michael Connarty (Linlithgow and East Falkirk) (Lab)]

9. What assessment he has made of the effect of lower oil prices on oil and gas extraction from the North Sea.

Energy Prices

Debate between Ed Davey and Michael Connarty

Wednesday 18th June 2014 Commons Chamber

[Mr Davey]

I certainly believe that local energy generation is key in driving competition. I am proud that it was this Government who published Britain’s first-ever community energy strategy to help local communities and individuals and small businesses to generate energy.

[Michael Connarty (Linlithgow and East Falkirk) (Lab)]

rose—

[Mr Davey]

I will let the hon. Gentleman intervene, but then I must make some progress.

[Michael Connarty]

It is very important that the Minister is not allowed to get away with an empty boast. The Energy and Climate Change Committee report states that

“gas and electricity have risen by 41% and 20% in the UK in real terms. . . This has had an adverse impact on fuel poor households and thrown Government targets to eliminate the problem by 2016 off-course.”

How can the right hon. Gentleman boast that prices are being cut in real terms when the facts in the Committee’s report deny that?

[Mr Davey]

Let me be fair to the hon. Gentleman—

[Michael Connarty]

Answer the question.

[Mr Davey]

I am about to do so. I said that our reforms are beginning to work. It is true—that is what I said. I admit that energy prices have gone up in this Parliament, but they have gone up slower than they did in the last Parliament, when energy bills went up faster on average every year than they have in this Parliament. Indeed, fuel poverty went up under Labour, whereas the latest statistics show it falling. The hon. Gentleman should look at the facts.

Grangemouth Refinery

Debate between Ed Davey and Michael Connarty

Wednesday 23rd October 2013 Commons Chamber

[Mr Davey]

I am grateful to my right hon. Friend for his question. The Scottish Government and the Westminster Government have been working extremely closely and I am grateful for such work. The partnership has been successful and constructive, and we will need to continue to work together in the days and weeks ahead for the people of Scotland—and, indeed, for the people of the UK, because as he suggested, this has UK-wide implications. Beyond that, I remind the House that Her Majesty’s Treasury has been working with INEOS to look at potential infrastructure guarantees, should INEOS make a decision to invest in the petrochemicals plant. My right hon. Friend the Chancellor of the Exchequer has developed innovative infrastructure guarantees and we stand ready to assist with that. I know that the Scottish Government have plans to assist as well.

[Michael Connarty (Linlithgow and East Falkirk) (Lab)]

I thank the Secretary of State for recognising that I have kept the Government and Opposition Front Benchers, and also the Scottish National party, informed of developments. There is common purpose in this.

On 14 October, I sat with Calum MacLean as he told me about the bright future that was available to Grangemouth Petrochemicals—the chemicals side—if it could go across the bridge to a point where it would be breaking even and then making money in large amounts, with ethane coming from America after 2022. It is unfortunate that there seems to have been an ultimatum approach, rather than a negotiation approach. There is still time for all parties—the Opposition, the Government and the Scottish Government—to ask the company to rewind the tape, get back to negotiations and think of the bright future that can be shared with the community after negotiations.

I heard the general secretary of Unite in Scotland saying this morning that the entire survival plan and all the terms and conditions of employment are on the table for negotiation, so there is still time to save the plant, which supplies 30% of the ethylene to the UK down the pipeline. It not just refines 300 barrels of oil a day for Scotland, the north of England and Ireland, but feeds the chemical industry of the whole of the UK.

[Mr Davey]

I once again pay tribute to the hon. Gentleman, who has been representing his constituents with his usual skill. I agree with much of what he says but, as the Government must look at all potential scenarios, we have to look at the potential scenario of liquidation, as announced by INEOS today. We very much regret that, but we have to plan for all potential outcomes. The hon. Gentleman is right that a better outcome would be to get both sides around the table so that we can get agreement on a way forward and secure the investment that we wish to see. We want to see the petrochemicals plant staying open and developing.

Oral Answers to Questions

Debate between Ed Davey and Michael Connarty

Thursday 17th October 2013 Commons Chamber

[Michael Connarty (Linlithgow and East Falkirk) (Lab)]

A missive from Ineos Grangemouth, which supplies 80% of the fuel for Scotland and the north of England and accounts for 10% of the gross national product of Scotland, says that the plant is

“shut and will remain shut”.

I have kept all Ministers informed through the Secretary of State for Scotland, as well as those on the Opposition Front Bench. The Secretary of State for Energy and Climate Change said earlier that he wanted people to get back to ACAS. However, he has also made it clear that supplies will still get through to Scotland by other means. The company has prepared for this and the cold shutdown of the refinery and petrochemical plant has been done deliberately. It must be urged to start up the plant again and to take the knife from the throat of the workers and the gun from the head of the Scottish people.

[Mr Davey]

I know that the hon. Gentleman takes a close interest in this matter and is a voice of moderation. He knows that I have worked hard to get the ACAS talks going. They did get going, but unfortunately they broke down. I repeat my request that all sides get around the table and resolve the matter without a dispute. I am pleased that Unite called off the strike. We have been working with the Scottish Government and the industry to ensure that Scotland gets the petrol, diesel and heating oil that it needs.

Oral Answers to Questions

Debate between Ed Davey and Michael Connarty

Thursday 8th March 2012 Commons Chamber

[Michael Connarty (Linlithgow and East Falkirk) (Lab)]

4. When he expects energy companies to secure investment for new nuclear power stations.

[The Secretary of State for Energy and Climate Change (Mr Edward Davey)]

The timing of investment decisions in new nuclear is a commercial matter. The Government are encouraging investment in new nuclear through a range of actions, including its proposals on electricity market reform. The Government have also committed to working with relevant developers to enable early investment decisions to progress to timetable, including those required ahead of electricity market reform implementation.

[Michael Connarty]

I thank the Secretary of State for that tortuous and absolutely uninformed answer. As secretary of the nuclear industry all-party group, I strongly support this industry, but the problem is that progress has been stalled for some time as it would appear that there has been not much talking and no action. The Government have to do more, because we are seeing the resources in this industry and the commitments to investment and technology going elsewhere and not coming to the UK as we hoped when we started to think sensibly about using this very low-carbon source of energy.

[Mr Davey]

I have to say that I am extremely surprised by what the hon. Gentleman has said, given the Labour party’s record on this issue, as it dithered and delayed for all its time in office. I do not recognise the situation he describes. Three consortia are putting forward proposals for 16 GW of new nuclear. Let me tell the hon. Gentleman that people are investing serious money in this industry and that we are making real progress.

Oral Answers to Questions

Debate between Ed Davey and Michael Connarty

Thursday 27th October 2011 Commons Chamber

[Michael Connarty (Linlithgow and East Falkirk) (Lab)]

1. What recent progress he has made on securing private sector investment in Royal Mail.

[The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Mr Edward Davey)]

As I made clear during the passage of the Postal Services Act 2011, we are taking a staged approach to its implementation. Before decisions can be taken on private sector investment, the regulatory regime must be reformed and the Government must secure approval to take on Royal Mail’s historical pension deficit and restructure its balance sheet. Progress is being made in these areas, alongside Royal Mail’s progress with its modernisation plan.

[Michael Connarty]

I thank the Minister for his reply. Will he therefore tell the House exactly how much the Government value the assets in the Post Office pension fund at this moment, how much will be transferred to the Treasury and what will be left in the assets of the pension fund thereafter?

[Mr Davey]

The hon. Gentleman will know, having been in the House a long time, that we would not make a valuation while working with the European Commission to secure state aid clearance. Until we get that, those sorts of calculations would be completely inappropriate.

Postal Services Bill

Debate between Ed Davey and Michael Connarty

Thursday 9th June 2011 Commons Chamber

[Michael Connarty (Linlithgow and East Falkirk) (Lab)]

Despite all these amendments, which have been won by clear arguments put by Labour Members in the House of Lords and the Cross Benchers who supported them, I am still concerned about having a Bill that is fit for purpose.

Lords amendment 1 provides a new requirement that the report made by the Secretary of State will make clear the

“objective intended to be achieved”

by the disposal of shares in Royal Mail. I have followed this issue very closely so I know that everything else falls on that. As you know, Madam Deputy Speaker, I am the secretary of the Communication Workers Union liaison group of MPs in this House and have been so for more than a decade. Despite all the Minister’s warm words, it is not clear what this is meant to achieve that can be achievable under this privatisation model as structured.

Does the “objective intended” include maintaining Royal Mail as an organisation able to deliver to all parts of the UK for a single charge or two varying charges? The Bill and the amendments provide no guarantees that that is the case. Will that be covered in the report given each year by the Secretary of State to the House in order to show just how far the failure has been progressed, and how far my concerns and those of other Opposition Members have been realised? If we were to fragment Royal Mail—it is entirely possible that that will happen as there is nothing to prevent it under the Government’s privatisation model—a Scottish regional mail delivery service could be given responsibility for meeting that objective under this model. That provider might then find that that particular part of the United Kingdom—the same could happen in places such as Cornwall and elsewhere in the south-west—the sparsity of the population and the diversity of the communities mean that it is not possible to make a profit. This process is about a privatisation and about giving organisations the right to run Royal Mail as an organisation that must make a profit. The Bill would allow them to come back to ask the Secretary of State to allow them to get rid of that universal service obligation.

[Mr Davey]

Will the hon. Gentleman tell the House which part of the Bill he is worried about? Which part will cause the fragmentation he is describing?

--- Later in debate ---

[Michael Connarty]

I only wish that that were true. I assure the hon. Lady that although small shareholders can go along and make a protest and trumpet what they have to say, the bonuses, the sale of companies and the redundancies will still be voted through regardless of small the shareholders’ shouting. I am not in the business of standing on the fringe and shouting. I would much prefer the Bill to be rejected out of hand. I am against the privatisation of Royal Mail and I believe that the pension fund deficit was caused by the holidays taken by Royal Mail and Post Office Ltd, which were allowed by previous Governments of both hues. I would rather be standing here opposing what the Government are about to do to Royal Mail because I think that all the assurances we have been given, hard-won though they are, will not make a difference.

Capitalism will work as capitalism works and will do what is to the advantage of the people who hold the majority of the shares for the bottom line of their dividends. That will mean that people will lose their jobs and the Post Office will not be sustained using Royal Mail, which will not continue to provide a universal service at one price. The amendments will have to come with a lot more specific targets, which I do not see in the Bill or in any of the schedules to the Bill. Although I welcome the smaller amendments that have been made in this part of the Bill, I do not believe they will make a major difference to the outcome for Royal Mail or Post Office Ltd.

[Mr Davey]

The hon. Member for Linlithgow and East Falkirk (Michael Connarty) finished where the hon. Member for Llanelli (Nia Griffith) started—in total opposition to the Bill. I have to tell the Opposition that they are ignoring the economic and financial reality of Royal Mail. As a result of the reduction in letter volumes because of technology such as e-mail, the internet, text messaging and social networking, it is losing a huge amount of money. The reduction in letter volumes—its core business—is predicted to fall again and again, but it is not only Royal Mail that is affected. Every postal administration around the world is seeing letter volumes and revenues go down. That means that those administrations are leaching money and something has to be done. The previous Government failed to do anything, although I should pay tribute to Lord Mandelson, who had the decency, on Second Reading in the other place, to recognise that we were on the right track with this Bill. The fact that Labour Front Benchers are unable to recognise that today is testament to Labour’s unwillingness to face up to the reality of the challenges.

--- Later in debate ---

[Mr Davey]

That is the whole point of the Bill’s ensuring that the universal provision is there for us. It will be maintained, because the regulator, Ofcom, will ensure that the universal service provider meets the minimum requirements, including on performance. If a company took over the management of Royal Mail and became the USP, it would be subject to that very tough regulatory regime.

My hon. Friend the Member for Bedford (Richard Fuller) rightly praised the management of Royal Mail, led by the chairman Donald Brydon and the chief executive Moya Greene, who have made a real difference in their time at the helm; the Government have huge confidence in them. My hon. Friend asked what the incentives for management were. Having met the chairman and chief executive and having attended a board meeting recently, I assure him that its management is really seized of the need to modernise Royal Mail. Look at the way in which we have set the regime up: the Bill makes it clear that Ofcom must, when regulating, have regard to the need for the USP to become, and to remain, efficient, so there will be a regulatory framework to bear down on management—but there also are other incentives for management. He was right to make that point.

My hon. Friend also asked about the role of the unions. Royal Mail’s management and I have engaged very constructively with the Communication Workers Union, and I have already welcomed its very strong support for the amendments we are discussing today, which it recognises as strengthening the protection of the universal service that its members provide. There are, however, some difficulties. I was disappointed by the CWU’s decision to ballot for strikes in London about modernisation and I hope that the ongoing talks will prevent a strike from going ahead, as industrial action would only damage the very universal service that we are all acting to protect.

The hon. Member for Linlithgow and East Falkirk (Michael Connarty) went very wide in his remarks on the regulation. I know that he is secretary of the CWU parliamentary liaison group, and I wish that he had been on the Bill Committee, as that would have spiced things up. We had a great time on the Committee. I remember fondly the days of Red Bull amendments, Gordian knot amendments and clause 3 amendments and all the rest that we heard from the Labour party. No doubt we would also have had the Linlithgow and East Falkirk amendment if the hon. Gentleman had been on the Committee. He is particularly concerned about Lords amendment 22, on which he spent a lot of time, about the procurement determination. As I said in my opening remarks, that change has been welcomed by Royal Mail and the CWU because it provides greater certainty. I also said that people had interpreted the option of procurement decision, if there were a decision that the USO represented an unfair burden on the USP, in ways that we had not expected. We believe it is a useful tool in the regulator’s armoury to make sure that the universal service will be provided throughout the country. It is not an attack on the USP, as some people had expected. The measure is designed to ensure that the legislation is future-proofed and to make sure that the regulator has all the necessary tools at its disposal.

Let me bring my remarks to a close—

[Michael Connarty]

The Minister has missed out Lords amendment 21, which came from the Government side and has not been discussed or pushed for by anyone else. That amendment changes from three years to five the time after which the issue of levy and burden-sharing will be set aside. That has been welcomed by the people who are making lots of money out of cherry-picking in relation to Royal Mail at the moment.

Postal Services Bill

Debate between Ed Davey and Michael Connarty

Wednesday 12th January 2011 Commons Chamber

[Michael Connarty]

It might be useful to read the Bill. That is not in the Bill. It is an under-the-counter promise by the Government that they have set aside a sum of money. That is no different from the sum set aside in the past by the Government every time they carried out a reorganisation to sustain the unsustainable. It is clear that those post offices are not viable in the market. If those post offices and sub-post offices lose another £343 million, which is the cost per year if the business arrangement is broken, that is where the money will go. It will replace the money that should have come from the agreement. The money will be required to pay the people. At present 900 post offices are up for sale, apart from those that are temporarily closed, as the hon. Member for Colchester said.

It is important that we realise that, in this process, the Conservative-led Government, supported by the Liberals against their pledges in their own manifesto, are trying to move the Post Office and Royal Mail into a market and away from a controlled situation. There is talk now of the inter-business agreement. There will be talk later of the universal service obligation, which will also be destroyed by the Bill. In the USA, the arch-capitalist country, the postal service is permanently in the public sector. It will not be taken out of the public sector because it is seen as a public institution. We will follow a route that will cause us to destroy part of our institutions.

I do not believe that Members are kidding themselves. I am sure they have talked to their communities when a sub-post office has been closed and heard the anger when that happens. I am sure that they have talked to people when they lose their Crown office and get a second-rate service from a post office put into the back of a supermarket. People do not like it because it destroys the structures of their communities.

[The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Mr Edward Davey)]

The hon. Gentleman mentions the United States Postal Service. Is he aware that it made an $8 billion loss last year?

[Michael Connarty]

What I am aware of is that the public purse supports an institution in the USA. If the Liberal Democrats in the Government are saying that they believe it best not to subsidise but to let the market rip, why do they talk about subsidising those 700 post offices that do not make any money? Is the Minister arguing for the withdrawal of the subsidy in the USA but not here? It does not make sense, and he knows it.

Oral Answers to Questions

Debate between Ed Davey and Michael Connarty

Thursday 14th October 2010 Commons Chamber

[Mr Davey]

May I reassure my hon. Friend that once the system is embedded with respect to domestic regulation affecting businesses and the third sector, the Government plan to extend it to other areas, including EU law?

[Michael Connarty (Linlithgow and East Falkirk) (Lab)]

I note that the Minister did not address the question asked by the hon. Member for Kettering (Mr Hollobone). Is he not willing to tell Parliament the truth that in fact business regulations are part of the common market, which means that they cannot be vetoed by the Government? What is required is for the Government to stop the gold-plating that is done by the civil service when regulations come from Europe.

[Mr Davey]

The hon. Gentleman did not listen to either my first answer or my second answer. The Government are committed to ending gold-plating and I have said from this Dispatch Box that, once the one-in, one-out system is embedded, we will apply it to EU legislation.