Great British Energy Bill (Fifth sitting)

Harriet Cross Excerpts

Committee stage
Tuesday 15th October 2024 Public Bill Committees

[Michael Shanks]

I have to say that of all the amendments before the Committee, I find this one utterly extraordinary. The shadow Minister’s amendment says that Great British Energy

“must take all reasonable steps to satisfy itself at the time of any investment in…infrastructure that connection to the National Grid will be made in time for energy produced from the relevant investment asset coming onstream.”

The recognition, after 14 years, that dealing with the issues with connections to the national grid should somehow be important is extraordinary. For the hon. Gentleman to wake up this morning, just a few months after leaving government, and decide that fixing this problem is a massive priority is quite something.

I am genuinely concerned by some of the language that we have heard today. The shadow Minister spoke, quite rightly, about Cameronian support for the climate. I wonder whether the Conservative party, after such a short time, ever takes a look at itself and wonders whether the rhetoric that it uses about the mechanisms we are going to use to tackle the climate crisis is in the right place. I know we have some net zero sceptics in the running to lead the party, but it is quite extraordinary to say in one breath that there are huge connectivity challenges for the country and that communities are “under siege”.

[Harriet Cross (Gordon and Buchan) (Con)]

I understand that in some constituencies this might not seem to be an issue, but in the north-east of Scotland it is a massive issue. For example, I have a town in my constituency called Kintore, which is next to a place called Leylodge. It is getting a 3 GW hydrogen plant next to an extended substation, with at least four or five battery plants and all the new pylons coming in to feed that. If the residents of Leylodge, where there are about 40 houses, and Kintore, where they number around 4,500—and similarly those in New Deer, up in the north—do not feel under siege, how do they feel?

[Michael Shanks]

I think that doubling down on the language is not helpful either, but I will come back to both those points.

I recognise the importance of the point about communities and a more strategic approach to infrastructure to ensure a balance. That is why we have commissioned the National Energy System Operator to look at the strategic spatial energy plan, which is important in how we look at energy in a strategic way. To say that communities are under siege is not the right language. This is nationally important infrastructure.

The Opposition do not support Great British Energy, but as my hon. Friend the Member for Na h-Eileanan an Iar said, Great British Energy is one mechanism whereby communities can benefit from infrastructure where they are not benefiting at the moment.

Great British Energy Bill (Fourth sitting)

Harriet Cross Excerpts

Thursday 10th October 2024 Public Bill Committees

[Michael Shanks]

That is not what I said at all. What I said a moment ago is exactly the same, which is that in the short term—in the start-up phase of the company—there will be a few hundred people. That is exactly what Juergen Maier said. In future, our aim—particularly with the right hon. Gentleman’s support, which I was not expecting at the start of today—is that it will grow even further, into a much bigger company. As a result, we expect that there could very well be thousands of jobs in the headquarters in Aberdeen. I am not ruling anything out or limiting the potential of Great British Energy, and I hope that the right hon. Gentleman is not either. I make this point again, for the benefit of the right hon. Gentleman: critically, that is not the limit of the jobs that will be created by Great British Energy. It is important to recognise that the jobs potential will come from the investments and partnerships that it makes.

[Harriet Cross (Gordon and Buchan) (Con)]

The second part of the amendment states that the jobs should be created by 2030. That timescale is really important, because it ensures that the expertise we have now can be retained to help build these jobs of the future. Even if the Government will not commit to the figure, will they look at the timescale, which will give the industry certainty?

[Michael Shanks]

For reasons I will come to in a moment, we will not agree to the amendment because we will not put timeframes and numbers in the Bill—we do not see those in any piece of legislation from the previous Government or any other Government, and for very good reason. However, the hon. Lady is right that this decade is absolutely critical for this issue. That is why I am taking it very seriously, and will happily have conversations with her about how we get these jobs as quickly as possible. The timeframe for that is important, but it is also important that we start with building things such as Great British Energy, which I hope she will support, and our broader policy around the office for clean energy jobs, our industrial strategy and our increased investment in things such as the renewables auction.

To come back to what the hon. Member for West Aberdeenshire and Kincardine said about offshore wind, he took some credit for it, but of course his Government have to take responsibility for the complete failure on offshore wind in the last auction. We have turned that around with some really successful projects and want to build considerably more in the future. He gave an absolute masterclass for a new Minister like me on how to speak to something—the onshore energy ban in England—that I know he does not believe in, because he is a smart guy.

The reality is that that was ideology over delivery of something critically important. Now, we have inherited not just a lack of projects that would help us towards clean power and deliver jobs right across the UK, but an empty pipeline of projects, given the length of time where wind in England was banned. It is a ridiculous policy that I do not believe for a second the hon. Gentleman supports, but it was a very good example for me on how to deliver a line.

As I said earlier, this clause is specifically about giving very particular, rare directions in urgent or unforeseen circumstances. It is not a clause we expect the Secretary of State to be using regularly. That is important, because I suspect that if it was phrased in any other way, the hon. Gentleman would quite rightly propose an amendment limiting the powers of the Secretary of State to doing exactly that. This clause is about ensuring that Great British Energy has the space to fulfil its strategic priorities. Amendment 16 would widen that intention by adding a long-term goal.

More broadly, and relevant to both the hon. Gentleman’s amendments, I repeat that the aim of Great British Energy is to be operationally independent from Government. The Bill focuses solely on making the absolutely necessary provisions to establish the company. Adding further unnecessary detail—detail I know the Conservative party would not dream of adding to any of its own legislation—risks restricting the company in carrying out its activities and goes against what we have said. That sentiment was supported by almost every witness, including on specific questions about this matter, where I think people were hoping for different answers. Every single witness confirmed that the Bill is in the right place here. For those reasons, and many others, we will not be supporting the amendments.

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[Harriet Cross]

Does my hon. Friend agree that the supply chains that we have are used to delivering large-scale multimillion-pound projects? That is important not only for home-grown jobs, but for the success of GB Energy and any infrastructure and skills that will come out of it. We need our home-grown supply chain, which is world renowned, to help deliver this.

[Andrew Bowie]

My hon. Friend and constituency neighbour is absolutely right. I completely agree. She is a doughty champion for supply chain jobs based in her constituency, in mine, in that of the right hon. Member for Aberdeen South and in others across the country. One reason that we have been so critical of this Labour Government’s North sea policies—the extension and increase of the energy profits levy, the removal of investment allowances, the removal of further licences in the North sea—is the impact on the domestic supply chain jobs that exist already and, by the way, on the high-skilled jobs that will deliver the cleaner energy future that we all want to get to.

That is why I and others in Committee have been so critical in the past—it is not that we do not want to see the transition; it is that we want the oil and gas industry, and those people in the supply chain who are employed by it now, to be a part of that transition. Without a successful domestic oil and gas industry or domestic supply chain, we will not deliver any of the projects that we are speaking so glowingly about in Committee and over the past few weeks, months and years. As my hon. Friend the Member for Gordon and Buchan says, it is critical for the supply chain to support net zero transition.

Security of supply chain is absolutely relevant to the objectives of GB Energy and should be included as a strategic priority, hence the amendment. I also tabled amendment 18, which would introduce the direction for GB Energy to report to the Secretary of State on the progress being made towards developing domestic supply chains.

Great British Energy Bill (Third sitting)

Harriet Cross Excerpts

Committee stage
Thursday 10th October 2024 Public Bill Committees

[Michael Shanks]

They cut more than £100 million last year to plug gaps in their own budget. If we are looking at energy efficiency, the right hon. Gentleman could look closer to home at what his own Government in Scotland are doing.

To return to the Bill, I want to address both paragraphs in the Liberal Democrats’ amendment 10. First, the new object proposed in paragraph (e) would mean that Great British Energy’s objects included facilitating and participating in emergency home insulation programmes. Several of my hon. Friends have pointed out that although those programmes are incredibly important—I will come in a moment on to what the UK Government are already doing on the issue—it is important to detach the Bill from every other part of our energy policy. Although I totally understand the perspective that says, “These issues are important. Let’s put them on the face of a Bill to say so,” it is really important to say that the Bill itself does matter. This is about setting up and delivering the Great British Energy company. It is not the answer to every single part of the energy system. There are places where we are already moving forward on home insulation programmes, such as the warm homes fund, and it would be more appropriate to talk about those matters in that connection.

That is not to downplay the importance of the issue. As a Government, we are committed to taking bold action. Within the first 100 days, my colleague the Minister for Energy Consumers, my hon. Friend the Member for Peckham (Miatta Fahnbulleh), has outlined the work that we will do on this. The warm homes plan that we have announced is the most ambitious such plan ever. It will be implemented from the spring, delivering cleaner, cheaper energy in the process and ensuring that people, particularly in those low-income households where fuel costs already account for a disproportionate amount of income, can spend less money on them because their home is insulated and warm. That is a right that everyone should have.

[Harriet Cross (Gordon and Buchan) (Con)]

Does the Minister appreciate that although in the run-up to the election it was assumed, or said, quite often that GB Energy would save households £300, that figure seems now to have been dropped? Is this not a mechanism to ensure that low-income households see some benefit from the Bill? They will not necessarily take the Government’s word for it that it may come later, when we have already seen announcements such as the figure of £300 being dropped.

[Michael Shanks]

We have not dropped any announcement on reducing bills, but GB Energy was not going to be the single thing that would deliver that; it was the Government’s whole energy strategy. It is important to say that. I said in my evidence to the Committee on Tuesday that GB Energy is an important part of delivering that, but it is not a silver bullet. It will not be the thing that deals with every single aspect of our energy policy. It is also about what we are doing, for example, around increasing the renewables auction to get more cheaper energy on to the grid. It is about what we are doing around planning, consenting and connections. All that work is related to bringing down bills in the long term.

The Conservative party—the party that was in government when all our constituents suffered some of the highest price spikes that we have ever experienced—has to recognise, as it did for many years until it moved away from this policy, that the only way to reduce our dependence on the volatile markets that have led to increases in bills is to move towards greener, cheaper energy in the long term. That is what GB Energy is about delivering, that is what will bring down bills in the long term, and that is what we continue to deliver through this Bill.

I turn to paragraph (f) of amendment 10, which I am afraid we cannot support today, partly because it says what is already in the Bill on expanding renewable energy and technology. The Bill itself facilitates exactly those points and defines clean energy as

“energy produced from sources other than fossil fuels.”

That existing object already enables Great British Energy to drive the deployment of clean energy, helping to boost our energy independence, create jobs and ensure that communities reap the benefit of home-grown energy. Therefore, as a whole, amendment 10 is unnecessary, as the Bill already enables all of those points in clause 3.

The words of the hon. Member for South Cambridgeshire are heartfelt and have been genuinely heard; I hope she gets that sense from all my hon. Friends and me. Such initiatives are an important part, not of GB Energy in itself, but of the whole Government’s mission to make communities in their households much safer from the lack of insulation and cold homes from which they are suffering at the moment. For those reasons, we will not support the amendment, and I hope that the hon. Lady will not press it.

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[Michael Shanks]

He stops short of that.

The shadow Minister spoke earlier about the rising bills caused by Putin’s invasion of Ukraine, as if somehow the UK had no vulnerabilities that particularly exposed us to that invasion. Of course it was an external factor, but it led to huge price spikes in this country, and we are still exposed to volatile fossil fuel markets. We are determined to push towards energy security through cleaner green energy. That is moving at pace—our recent renewables auction was the biggest we have ever had, with 131 projects—and Great British Energy will drive that forward.

[Harriet Cross]

We have already discussed the financial assistance in the Bill. It is therefore anticipated that there may be financial strain. Given that the objects in the Bill do not include reducing bills, what guarantee is there that reducing bills will be a priority if and when finances become tight?

[Michael Shanks]

On the financial point, the Bill is an enabling mechanism, like a number of other pieces of legislation, including the UK Infrastructure Bank Act 2023, which the hon. Lady’s party introduced in government to allow the Secretary of State to give additional funding to companies. We said throughout the election that we would reduce energy bills, and we stand by that, but we cannot flick a switch. The idea that some Members have put forward that somehow, after 14 years of chaos from the Conservative party, a Government can come in and, within 100 days, turn everything around overnight is simply and deliberately disingenuous. Conservative Members take no responsibility for the actions of the previous Government.

We are putting in place as quickly as possible the basis for delivering energy security in the long term and removing volatility from our energy market, so that we can deliver cheaper bills for everyone in the long term. We made no pledge during the election that we would do it in 100 days, a year or two years, because we know fine well that that commitment will take time. But it is the right journey for us to be on, and it is right that we have started by building the energy resilience we need in the system.

[Michael Shanks]

It is an important point, and I take it in the spirit in which the right hon. Gentleman says he intends it, but nobody is in a position to say what will happen to bills on a particular date. They will start to come down as our exposure to more expensive forms of energy is reduced, but the price cap has already increased because we continue to be exposed to those international markets, and there are actions taken by the previous Government that will continue as we move into the winter. We are doing everything we can to turn that around as quickly as possible.

The right hon. Gentleman knows as well as anyone that at the next election we will absolutely be judged on this and on a whole series of commitments that we have made, as any party is judged on its commitments in elections. We stand by that. We are doing everything we possibly can to deliver the change that is necessary. It will bring down bills in the long term. It will be difficult— I am not suggesting that it will not—but it is a commitment that we have made and it is one that we will work towards.

[Harriet Cross]

Just for clarity, will the other changes that Labour is bringing in, such as ending North sea licences, increasing and extending the windfall tax and ending investment allowances, make us more or less secure in the meantime, before GB Energy is set up? Will they expose us more or less to the international market?

[The Chair]

Order. There is a scope issue here.

Great British Energy Bill (First sitting)

Harriet Cross Excerpts

Committee stage
Tuesday 8th October 2024 Public Bill Committees

[The Chair]

Order. We are moving outside the scope of the Bill.

Juergen Maier: Anyway, the answer to your question is the same answer that I gave for Aberdeen. There will be an HQ, a lot of the activities, project management, knowledge and engineering, but obviously when it gets to installation and port-type infrastructure work, there will be significant opportunity in Cornwall and anywhere serving the Celtic sea.

[Harriet Cross (Gordon and Buchan) (Con)]

Q Good morning, Mr Maier. The Bill states that GB Energy will be involved in the supply and storage of clean energy. It goes on to say that clean energy is from

“sources other than fossil fuels”.

Where is the cut-off? With things like blue hydrogen, there is a crossover: fossil fuels are involved, but the product is not necessarily what you would call a fossil fuel. Where does GB Energy come in?

Juergen Maier: Our core focus will be on renewable energy that is not derived from fossil fuels, to be clear. However, there are obviously energy sources that are part of the transition, and the Bill so allows. Clause 3(2)(b) refers to

“the reduction of greenhouse gas emissions from energy produced from fossil fuels,”

which would include blue hydrogen, for example. I believe that blue hydrogen is necessary as part of the transition, because you just cannot produce enough green hydrogen to get us going from the get-go, so you need a transitional way of getting there, as long as the clear purpose is to see it as a transition to ensure that the future is all green hydrogen.

[Harriet Cross]

In that respect, we would still need fossil fuels—oil and gas—going forward to help the transition.

Juergen Maier: Of course, yes.

[Uma Kumaran]

Q Welcome, Mr Maier. It is good to hear your reassurances about communities being kept at the heart of this. You have told us about renewables, about offshore and about clean energy. As we have heard, it is a short Bill, but I would welcome your thoughts on what the Bill tells us about the objects and the strategic priorities of GB Energy and whether, in your view, it gives you enough detail to carry out your work.

Juergen Maier: It certainly gives me a very clear direction, along with the framework document that we will develop together with the Secretary of State and the Minister. The short answer to your question is that it is pretty clear. The purpose is clear, and that is the most important thing: the purpose, at the end of the day, is that we will accelerate the amount of clean renewable energy that we put on the grid, and that we will create as much prosperity and as many jobs through it as possible.

--- Later in debate ---

[The Chair]

Order. The Clerk is saying that we are straying from the scope of the Bill. We are okay for time because we have until 10.20 am, but it is getting a bit hypothetical about what will happen on top of the Bill, which, I am being told, is not really allowed.

[Harriet Cross]

Q This question is aimed at both of you. In terms of the job prospects for GB Energy, we have had figures such as 650,000 jobs, with 69,000 of those in Scotland as and when they come. However, I am sure that your members will be looking at not necessarily future jobs, but current jobs and the implication of the Bill for them. What would you like to see in the Bill to ensure that the jobs that are there today are protected? Do you think the Bill as it stands can and will impact them?

Mike Clancy: I am not sure. As extensive as the powers of Parliament are, I am not sure a Bill in itself can give any of those guarantees. I am not trying to avoid an answer; the reality is that the Bill will set up a company with certain objectives, and those objectives should address directly the generation of employment. You have already heard and asked questions about how many jobs there will be in Aberdeen, what that will scale up to, and what it will mean in terms of the supply chain.

We are seeing a lot of very considerable numbers in a lot of different energy spaces: potentially great demand and very high-quality jobs in both the public space and the private ownership of utilities. But it is all promise. Some of the numbers are so significant in aggregate that you have to wonder where they are going to come from, because there is pressure on different parts of the infrastructure. There are lots of synergies between this sector and others—the skills are the same in aviation, defence and so on—and the basic throughput of science, technology, engineering and maths skills in this country is a long-term inhibitor to our productivity and our delivery. In terms of the narrow focus of the Bill, this organisation needs to be the stimulus for that supply chain, with good employment conditions throughout.

One of the issues in a just transition is that you replace public and private structured, high-quality jobs with jobs that are flimsier, more fragile and more temporary. If GB Energy can be a champion for long-term, durable relationships with its workforce—and that is how you want the energy sector to go—that is your best bet for having the jobs promise to replace those that have to be removed due to the climate impact.

Mika Minio-Paluello: The easiest solution is to keep someone working in their current workplace, precisely because, as Mike explained, there is a significant risk that, in shifting across, you end up with more precarious work. A lot of the onshore supply chain for offshore oil and gas has been struggling; we have seen a big decline over the past 14 years both within the supply chain and directly. Chunks of that supply chain can be future-proofed to support offshore wind and other parts, and GB Energy has a significant role to play in supporting those supply chain sites. Whether it is Shepherd Offshore, Smulders or cable manufacturers, GB Energy should say, “We will be purchasing from you, and not just from China.” There is a big risk of China coming to dominate the offshore wind supply chain. We could end up in a situation with offshore wind like the one with solar at the moment, where if you buy a solar panel, it is 97% made in China. GB Energy can play a role in making sure the offshore wind supply chain is situated here, and that is part of the protection.

The other part is about what could be done in the Bill, although it will not necessarily protect jobs—Mike is right; the Bill itself cannot entirely protect individual jobs. In our submission, we suggest that there could be an amendment to the strategic priorities section and that the statement of strategic priorities should have regard for a just transition, job equality and job creation. It should be embedded as a core part of the statement so that, when the Secretary of State sits down to prepare it, they go, “Okay, part of what we are going to put in here is about a just transition, job equality and job creation.” That is a possible amendment.

We have also suggested an amendment on protection, particularly given that a lot of the job creation and economic impact will be in Wales and Scotland, so the Bill will play an important role for those nations. That means that those nations should probably have a say, through their devolved Governments, on what happens down the line to GB Energy. Let us say that down the line a future Government goes, “Well, actually we are going to privatise it,” or, “We are going to instruct it to dispose of a lot of assets,” Scotland and Wales should be able to have a say and go, “Well actually, this is about our economy here and we think that shouldn’t happen.” We suggest doing that through an amendment but you could explore different mechanisms, including golden shares for those devolved Governments that specifically say that.

[The Chair]

Order. Sorry, but I did tell off the shadow Minister for talking about jobs when they are not in the Bill. I think we are straying quite a fair distance away. We are meant to stick within the scope of the contents of the Bill. With that in mind, a brilliant example will be Josh MacAlister.

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[Josh MacAlister]

Q This is a follow-up for Ravi Gurumurthy, on the theme of autonomy and flexibility for GBE. For this to be a success, there needs to be some appetite for risk taken by GBE. Historically, Government agencies have not been known for being particularly free to do that. The Bill intends to provide a degree of flexibility for GBE to operate and respond with autonomy and pace. Given the work that Nesta has done in this space, Ravi, can you say a little more about what gives you the confidence that the Bill sets that up in the right way?

Ravi Gurumurthy: It is a very challenging question. As you know, good intentions in this area often do not translate. You can mandate and say you want to operate with risk appetite, but it does not really translate into behaviour. What do I think are some of the components? The capitalisation of GB Energy is really important, because that gives it some degree of resource to take risks. I am quite interested in whether, as well as investing in novel technologies with a high-risk appetite, GB Energy can either take cashless equity stakes or invest in more established technologies, because if you have a more balanced portfolio, it might give you the ability to take risks in some aspects.

That gets you into a conversation about the fiscal rules. The one thing I would say about this area is that if you compare offshore wind and other established energy technologies with roads or hospitals, the big difference in my mind is that for offshore wind we will build those wind farms whether the state invests or not, and we will pay as consumers, whereas roads and hospitals will not get built if the state does not. The point is that we are going to pay for it, and we will pay more through private sector borrowing than we will through the state.

The second big difference is that unlike a road or a hospital, there was a guaranteed revenue stream through a contract for difference, so there is a really good rationale for why we should not have fiscal rules that bias us towards 100% private sector borrowing, rather than the state either taking a cashless equity stake via this development process or actually investing. If you do that, it will give GB Energy the ability to then take risks on the much more novel aspects of the portfolio and have failures. If GB Energy does not have failures, it will not be doing its job.

[Harriet Cross]

Q We have heard a lot about public investment and the importance of private investment for meeting net zero. Is there anything in the Bill that encourages you that the amount of public investment going in will attract the amount of private investment that is needed? We have to take this Bill in the round with other energy policies coming forward. How does it sit alongside those in ensuring that we continue to attract private investment into the energy sector?

Marc Hedin: I may be playing devil’s advocate here, but there is a slight risk if a public company were to invest in a utility scale project. At the moment in GB, we manage to attract quite a lot of capital to deploy renewable projects, for instance. There is also a risk of perceived unfair competition that would be detrimental to future capital attractiveness, so I would add that to the global reflection around this topic.

Ravi Gurumurthy: To come in on that, it is very common in other countries for the state to co-invest. I have spoken to a lot of other organisations, and we need to attract £350 billion to £500 billion of capital into power generation in the next 10 years. I think it is perfectly possible for the state to play a role in that. Everything that GB Energy is trying to do is to reduce the risk and increase the predictability of the investment environment. If you take the developer role, at the moment the private sector, when it bids in for a seabed lease, has to have the uncertainty of whether that project will ever get commissioned and the long delay in planning and consenting, grid connection and environmental surveys. If we can actually have the state do some of that and de-risk it, I think it is more likely to get that private sector investment. That is what happens in the Netherlands and it is what the Danes are moving towards, and it is also partly what happens in Germany. There is a good track record of these sorts of environments working well to attract private sector investment.

Shaun Spiers: That is right. You cannot dictate the culture of a company in a Bill. There was a criticism of the Green Investment Bank, for instance, that it invested in rather established technologies and had an insufficiently high appetite for risk. It will be important that GB Energy does pump-prime private investment and not replace it.

[Torcuil Crichton]

Q You anticipated my question. To pivot back, Ravi, you talked about innovation, and you talked, Shaun, about closing that 20% towards net zero. What can this Bill and GB Energy do to drive that private sector investment?

Shaun Spiers: Ravi has written the report on it.

Ravi Gurumurthy: Your question is: what can it do to drive private sector investment?

Carbon Capture, Usage and Storage

Harriet Cross Excerpts

Monday 7th October 2024 Commons Chamber

[Ed Miliband]

My hon Friend is absolutely right. The last Government cancelled the project twice, which tells us all we need to know about them. I had forgotten about the second cancellation; I actually had to check—I could not believe that they had cancelled it not just once but twice. That is going some. After three months, here is the reality: they talked, we acted.

[Harriet Cross (Gordon and Buchan) (Con)]

The Secretary of State will know that investment in these CCUS projects would not be possible without the private investment generated from our oil and gas companies. In the light of that, of him again confirming his policy on no new licences and of other policies that are set to close down the North sea, how will he ensure that that private investment continues so that more CCUS projects come forward in the future?

[Ed Miliband]

I listened to what oil and gas companies such as BP and Equinor said: they warmly welcomed this announcement. Frankly, there was a sigh of relief; after years of promises and delay, we finally had a Government getting this done.

Great British Energy Bill

Harriet Cross Excerpts

2nd reading
Thursday 5th September 2024 Commons Chamber

[Harriet Cross (Gordon and Buchan) (Con)]

It is hard to overstate the importance of the energy sector to my constituents and, indeed, to the whole of north-east Scotland, so I am grateful to be called today. First, I must address the reports that Great British Energy might be headquartered in Aberdeen. The Government are still yet to confirm that, saying that it is speculation, but the manner in which they have managed this announcement speaks volumes. The ambiguity and the joking about when an announcement might be made, and then just saying that the headquarters will be in Scotland, do absolutely nothing to help the speculation and delayed decisions or give the industry any confidence. These layers of uncertainty are driving away investment and creating a less secure job environment in north-east Scotland. Aberdeen has always been the energy capital of Europe. It has been that way for half a century, so it is the most logical choice for the headquarters.

I have significant reservations and concerns, which I will outline today. The North sea oil and gas industry is not just part of the economy in Aberdeenshire, but the bedrock on which our communities and my constituents in Gordon and Buchan have built their livelihoods for generations. It is not just about the direct jobs in the industry and the associated services in the hospitality sector, for example. An overall economic ecosystem has developed, and that is why it is critical that we manage the energy transition properly, so that the north-east of Scotland does not become the next region to suffer industrial decline as the mining areas did. I am sure that the Secretary of State, the Minister and the Labour party do not want that on their record.

The Government’s plan for Great British Energy, coupled with the energy profits levy, puts the industry at risk at this vital time. The proposed increases and the removal of the investment allowances could be a death knell for investment in our area. Let me be clear: this is not about protecting the profits of large companies just for profits’ sake; it is about protecting the jobs and skills and futures of our communities. Offshore Energies UK has warned that the tax increase could see investments in the UK cut, and that they might fall from £14.1 billion to £2.3 billion between now and 2029. That is not scaremongering; it is what the industry is facing.

We can take today’s figure of £14.1 billion of private investment and compare that with what the Government are suggesting: £8.3 billion of public investment into GB Energy just to create an investment vehicle. We already have an investment stream in the north-east of Scotland. It is not Government money that is needed, but a stable, fair, globally competitive market for our national and multinational companies. They will do the business. Public money to create GB Energy while simultaneously introducing these punitive taxation and other measures that are projected to drive away investment just does not make sense, because the same investment in capital, skills and personnel that we need for our energy security today are also vital for an effective and efficient transition to clean energy.

I have a number of questions for the Government about Great British Energy, and I will start with job security and creation. How will Great British Energy protect existing jobs in Aberdeenshire’s energy sector? We have already seen a significant loss of jobs due to the oil price downturn and market uncertainty. The Government boast that Great British Energy will create 650,000 new jobs, 69,000 of which are projected to be in Scotland, but we need specifics. Figures have been provided at a regional level across England, but we have only one figure for the whole of Scotland.

The distribution of jobs in Scotland is currently heavily weighted towards Aberdeen, Aberdeenshire and the north-east, so no matter how many jobs might or might not be generated by GB Energy in Scotland, my constituents want and need to know where those jobs will be. Can the Minister confirm when he sums up how many of the jobs will be in Aberdeenshire and the north-east, what types of roles they will be and when they will be created? Already, oil and gas workers are losing their jobs and moving abroad to maintain or progress their careers. They are the workers we need for the transition.

Secondly, we must consider the economic impact on our local communities. For example, how will the wealth that flows into our local infrastructure and economy and community projects be replicated in the future under Great British Energy? Looking at the national picture, the Oil and Gas Authority estimates that the total revenue from oil and gas production in the five years to 2024 was £5.3 billion. Are the Secretary of State and the Chancellor willing to sacrifice that in the pursuit of an accelerated transition? That would be a significant dent in the £8.3 billion of public investment.

We need a balanced approach. We are not against the energy transition, and we recognise that the transition will take time, but rushing it could have severe consequences for communities such as mine in Gordon and Buchan. We are after net zero, not absolute zero. They are different things, and we do not need to banish oil and gas from our energy mix immediately in order prematurely to be on the road to net zero.

The people of Gordon and Buchan and indeed all of north-east Scotland are not against change. We have been at the forefront of energy innovation for decades, but we need the transition to work for our communities and to build their strength, rather than dismantle them. We must protect jobs. I call on the Government to provide clear answers, not just high-level projections, on how we expect Great British Energy to benefit, not harm, the existing industry in Gordon and Buchan. Our communities have so much to lose if we get this wrong, and they deserve our help with a comprehensive plan, not ideology.

Making Britain a Clean Energy Superpower

Harriet Cross Excerpts

Friday 26th July 2024 Commons Chamber

[Michael Shanks]

My hon. Friend has raised two important points. To answer the first, GB Energy will invest in a range of projects and will have a key stake in them, delivering a return for the British taxpayer. There will be a range of projects, in some of which we will certainly have the controlling stake, and some of which we might help to get over the line, but in every single project there will be a return for the British taxpayer.

My hon. Friend’s second point is vital. I have been in this role for only a couple of weeks, but every meeting I have comes back to this question of connection, storage, and how we make sure that renewables can be delivered throughout periods in which there is electricity demand. Storage will be important, and GB Energy will have a part to play in that, as well as in answering wider questions about grid and network.

Let me return to the point about ownership by foreign countries. British waters are home to one of the largest offshore floating wind farms in the world, Kincardine, off the coast of Aberdeen. It is a good example of the problem with the current model. The foundations were made in Spain, the turbines were installed in the Netherlands, and only then was it towed into British waters. Our view is that British taxpayers should own some of that infrastructure, which is why yesterday the Prime Minister and the Energy Secretary announced an exciting new partnership between GB Energy and the Crown Estate to unleash billions of pounds of investment in clean power.

This partnership will enable two national institutions to work together for the benefit of the British people. As well as building supply chains, GB Energy will develop and own power projects in every part of the United Kingdom—in England, Wales, Scotland and Northern Ireland. It will be capitalised with £8.3 billion over the lifetime of this Parliament, money that can be invested in wind, solar, nuclear, tidal and other technologies, and it will deliver profits to the British people, playing a vital role in delivering the new jobs that we need.

[Harriet Cross (Gordon and Buchan) (Con)]

The Government’s plans to ban new oil and gas licences have been criticised by business leaders, unions and community groups throughout Scotland. As a fellow Scottish Member, will the Minister say whether or not he supports his Government’s plans, which it has been said will put up to 90,000 jobs across Scotland at risk?

[Michael Shanks]

We made it very clear during the election that the future of the North sea is incredibly important, but that future is a transition away from the oil and gas industries that we see at present. The Conservatives also need to recognise that the North sea is a declining basin. We have lost thousands of jobs there over the past decade, and that will continue in the future unless we accelerate our transition in the North sea to the clean energy jobs of the future. It is not good enough to bury our heads in the sand and pretend that this problem does not exist. We need a plan to give people secure, long-term, sustainable jobs for the future, rather than thinking that we can just carry on with business as usual.

--- Later in debate ---

[Harriet Cross (Gordon and Buchan) (Con)]

Thank you, Madam Deputy Speaker, and I welcome you to your position. I congratulate the hon. Member for Central Ayrshire (Alan Gemmell) on his first contribution to this House; it already sounds as if he has made a huge contribution to the UK around the world, and I am sure his constituents are looking forward to him acting for them.

I will begin by echoing the words of my hon. Friends the Members for Mid Bedfordshire (Blake Stephenson) and for South Northamptonshire (Sarah Bool) about the impact on agricultural and rural land of the Government’s plan to cover them with cables, pylons and other energy infrastructure. The sheer concentration of this infrastructure on prime agricultural land in communities such as New Deer, Maud, Turriff and Leylodge in my constituency and the apparent lack of ability for communities to engage in meaningful discussion on this will in no way bring the public along on this crucial national endeavour.

However, I am going to focus on the key issue for my constituents and those across north-east Scotland, and that is the oil and gas sector: the jobs, expertise and investment that we will be putting at risk if the Government rush towards their green energy agenda. No matter how much the Minister may wish otherwise, we cannot and will not have a green energy revolution without the existing oil and gas sector, its skills and, crucially, its funding. The companies that make their money from oil and gas developments now are the key investors in our renewable energy sector and carbon capture projects—that is undeniable. We must make the UK an attractive place to invest in all energies in order to attract and keep multinational companies here, and to keep them investing here in the future. We have to draw only a very short line to realise that if we dismiss, alienate and penalise the traditional oil and gas parts of energy companies, the boards of those same companies will turn their backs on the UK for more sympathetic and attractive investment opportunities elsewhere. We would lose not just the current investment in oil and gas, but the potential for investment in renewable energy.

Does the Secretary of State for Energy Security and Net Zero or the Minister expect that we will have stopped using oil and gas by 2030? Of course not, so why are we banning new oil and gas licences and cutting off our own domestic energy supply? Why are the Government happy to see tens of thousands of home-grown jobs put at risk, and why are they happy to increase our reliance on imports of oil and gas produced with a higher carbon footprint from more volatile markets overseas? If there is a reason other than simply to fulfil their narrative of being a “green energy superpower” I am yet to find it.

The UK, thanks largely to Aberdeen and the north-east, has long been an energy superpower—an oil and gas superpower. That status, built over half a century, has led to the energy sector’s skills, expertise, companies and workforce being honed and housed in north-east Scotland—not just the subsurface and technical skills of the likes of geologists and engineers, but, crucially, the experts in supply chains. Those will be vital to the renewable energy projects of the future. Our workers in the oil and gas sector know how to deliver huge, multinational, high-budget projects—exactly the skills that will be needed to deliver the Government’s green energy revolution. Again, the Government risk losing those crucial skills by moving too fast and not planning for a jobs and skills transition alongside the energy transition.

Labour idly calls the investment allowance aspect of the windfall tax a “loophole” and plans to remove it and increase the tax rate to 78%; indeed, it boasts about doing so. Yet there are estimates that the combination of no new licences and changes to the windfall tax will cost £20 billion in tax revenues and risk up to 100,000 direct and indirect jobs. Last year, the leader of the GMB union said that Labour’s plans to end new oil and gas licences are “self-defeating”. I agree.

[Mr Holden]

Does my hon. Friend agree that while windfall taxes can be levied on oil and gas that is extracted in the UK, we will not get those revenues for decades if we do not have oil and gas exploration in the North sea? We will see windfall taxes going to foreign Governments across the world but none coming here. Does she agree that it makes no sense at all, for jobs in Scotland or for the UK Exchequer, not to have oil and gas exploration in the North sea?

[Harriet Cross]

I absolutely agree. It is so important for all those reasons—for jobs and future tax revenues—that we retain our domestic supply of oil and gas. Alongside the leader of the GMB calling the Government’s plans “self-defeating”, the former leader of Aberdeen council quit Labour last year, saying its plans were a “brutal attack” on the sector. Again, I agree.

Just as Rome was not built in a day, the experience and expertise of the oil and gas sector—the energy sector—did not develop in a day. However, the vital skills and investment that we will rely on to deliver the transition to cleaner, greener energy will be lost in no time at all if the Government do not listen, appreciate them and act to protect them. The warning signs are there, and we must not ignore them. Without the existing workforce, the energy transition will take longer, be more expensive, and be less efficient—truly an unwanted trilogy for any Government.

[Madam Deputy Speaker (Caroline Nokes)]

I call David Baines to make his maiden speech.