Prax Lindsey Oil Refinery
Michael Shanks Excerpts(1 week, 3 days ago)
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The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Michael Shanks)
On Monday 30 June, I made a written ministerial statement and gave an oral statement regarding the deeply disappointing news that Prax Lindsey oil refinery had entered insolvency. Today, I am updating the House on the urgent work undertaken by the official receiver to manage the situation on the Prax Lindsey site and determine next steps.
Since the refinery entered insolvency, we have worked urgently to ensure the safety of the refinery site and the security of fuel supplies, and to protect workers. This has also allowed time for bidders to express an interest in the site.
The official receiver has rigorously assessed all the bids received and concluded that sale of the business as a whole is not a credible option. Having visited some of the workers on site on 17 July, I know this will be hugely disappointing news for them, their families and the local community.
A package has been offered to all those directly employed at the refinery which guarantees jobs and pay over the coming months. The Government will also immediately fund a comprehensive training guarantee for these refinery workers, to ensure they have the skills they need, and that they are supported to find jobs—for example, in the growing clean energy workforce.
Furthermore, we understand that the official receiver continues to explore various proposals for assets. I therefore remain hopeful that a solution will be found that creates future employment opportunities at the Immingham site.
The refinery will continue to process crude for the rest of the month, and the official receiver will continue selling refined products for a number of weeks, giving buyers time to adjust their supply chains.
The former owners left the company in a poor state and gave the Government very little time to act. That is why the Energy Secretary immediately demanded that the Insolvency Service launches an investigation into their conduct and the circumstances surrounding insolvency, which is now under way, and I have repeatedly called on the owners do the right thing and provide financial support to the workforce.
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Prax Lindsey Oil Refinery
Michael Shanks Excerpts(1 week, 3 days ago)
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Andrew Bowie (West Aberdeenshire and Kincardine) (Con)
(Urgent Question): To ask the Secretary of State for Energy Security and Net Zero if he will make a statement on the closure of the Prax Lindsey oil refinery.
The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Michael Shanks)
In my oral statement on 30 June, I informed Parliament of the deeply disappointing news that the Prax Lindsey oil refinery had entered insolvency and that the court had appointed an official receiver to manage the situation on the site and determine the next steps. Since then, we have worked urgently to ensure the safety of the refinery site and the security of fuel supplies, and to protect workers. That also allowed time for bidders to express an interest in the site. Following a thorough process, the official receiver has rigorously assessed all the bids received and concluded that sale of the business as a whole is not a credible option.
I visited workers at the site on 17 July, and I will be meeting them again shortly today. I know that this will be hugely disappointing news to them, their families and the wider community. They are all in my thoughts at this time. A package has been offered to all directly employed at the refinery which guarantees their jobs and pay over the coming months. Alongside the usual support that is offered to workforces in insolvency situations, the Government will also immediately fund a comprehensive training guarantee for those refinery workers to ensure that they have the skills needed and the support to find jobs in, for example, the growing clean energy workforce.
Furthermore, we understand that the official receiver continues to explore various proposals for assets on the site. I therefore remain hopeful that a solution will be found that creates future employment opportunities at the Immingham site. The refinery will continue to process crude for the rest of the month, and the official receiver will continue selling refined products for a number of weeks, giving buyers time to adjust their supply chains.
The former owners left the refinery in an untenable position and gave the Government little time to act. That is why the Energy Secretary immediately demanded an investigation into their conduct and the circumstances surrounding the insolvency, and why I have repeatedly called on the owners to do the right thing and provide financial support to the workforce at this difficult time.
Andrew Bowie
When the Prax Lindsey refinery closes its doors in October, there will be only four oil refineries remaining in the United Kingdom, following the news about Grangemouth a few months ago. This is the second oil refinery to close in the United Kingdom in only six months, prompting serious questions about our energy security and resilience. In Immingham, people are waking up today to the reality that redundancies are now inevitable. It is estimated that about 625 jobs will be lost. For the community in Lincolnshire, that is seismic.
As the Minister said, we are aware of the long-standing financial issues with Prax Group, and I reiterate my support for the Government’s investigation into its directors. What progress has been made on that investigation? When does he expect the report to be made?
We cannot escape the fundamental crisis facing our manufacturing sector. As Jim Ratcliffe has said, the sector is “facing extinction” because of
“enormously high energy prices and crippling carbon tax bills.”
The Minister’s Department knows that to be true and has exempted some industry from paying the net zero levies, recusing specific businesses from paying the extortionate green subsidy costs. That is a ridiculous situation that sees subsidies being paid by the Government to businesses to exempt them from the charges being imposed by that very same Government—we are truly through the looking glass. The Department is wilfully talking down the oil and gas industry with hostile language and an impossible fiscal regime while overseeing the deindustrialisation of the United Kingdom through the perpetuated high cost of industrial energy. This is not simply managed decline; it is accelerated decline driven by ideology and steered from Whitehall.
Will the Minister tell us what work is being done to ensure the future of the four remaining oil refineries in the United Kingdom? What, if any, assessment has been made of the UK’s resilience, given the steep reduction in our refining capacity over the past six months? What, if any, assessment has been made of the increased reliance on imports that will be necessary as a result of the reduction in British refining capacity? Will he please change course and start speaking up for our oil industry—upstream and downstream—which sees from the current Government a disregard for it, its workers and the communities that rely most on it?
Michael Shanks
I agree with the shadow Minister, who was right to point out the impact that news like this will have on the workforce, who are hearing it this week, as well as the wider impact it has on their families and the community. That is why it is so important that we provide that support.
On the investigation, there is not much that I can update the House on at the moment. The Insolvency Service is carrying out that investigation, and it would be wrong for Ministers to interfere in that, but we have obviously given the direction that we expect it to be completed as quickly as possible. Given the mess we found the company in, I would not be surprised if it takes a bit of time for the investigation to get to grips with what was going on there, but that is for the Insolvency Service to resolve.
On resilience and fuel supplies, we have been really clear throughout that we have done everything we can to try to find a buyer to keep the site operating as a going concern, which is important for the workforce as well as for local resilience, but Prax Lindsey oil refinery comprises about 10% of our remaining refinery capacity; Phillips 66—a much larger refinery—is immediately next door. In the past few weeks, we have already seen fuel supplies adjusted and commercial contracts renegotiated. Although we clearly wanted the refinery to stay open, our assessment suggests that there is not an immediate risk to fuel supplies locally or in the wider area, but we will continue to monitor that.
On the shadow Minister’s wider points, I will first repeat what I have said on a number of occasions: we do support the oil and gas industry. I have spent a lot of time with the industry understanding some of its challenges, which are long standing, particularly around jobs lost over the past decade, and we consulted widely on what the future of energy in the north-east should look like to give confidence to the industry. We inherited the fiscal regime from the previous Government. We have consulted quickly on what the future of the energy profits levy should look like to ensure certainty about the fiscal landscape. The Treasury will respond to that consultation in due course. We want to give certainty, but we also want to recognise that this is an industry in transition, and burying our heads in the sand and pretending that that is not the case does nothing to protect the workforce in the long term. We will therefore continue to invest in the new industries of the future and in that wider strategy.
Refineries are important to our economy and will continue to be important. That is why I brought all of industry together in a roundtable to discuss the challenges facing the refinery sector. I was shocked to discover that that was the first time there had been such an invitation from the Government in 13 years. I ask the shadow Minister to reflect on who was in power for 14 years.
Bill Esterson (Sefton Central) (Lab)
The Minister is absolutely right—so was the shadow Minister—to focus on the jobs and the communities affected by the worrying news coming from Lindsey. He was also right to say that the problems are the result of shockingly bad management. My Select Committee will look at the future of refining in this country in a one-off session in the autumn, and we will be able to take further evidence at that point.
In response to what the shadow Minister said about energy prices, will the Minister confirm that the way to get industrial energy prices down—just as with domestic energy prices—is to reduce our reliance on the volatility, uncertainty and high prices that are determined by Vladimir Putin and the petrostates, and that we have to manage the transition, not shut our eyes to it or somehow play into culture wars as Reform wants us to do?
Michael Shanks
My hon. Friend is right. Separate from all the wider issues facing the refinery sector and the oil and gas sector generally, it is right we recognise that this week there are workers hearing some devastating news. Detailed work will be going on into how much of the site we can utilise in the future, and assessments are under way about how credible some of the bids are. We will do more work on that, and I am sure that his inquiry will be useful.
On energy costs more generally, one of the conversations I had when I met the refinery sector was about how we could do more to bring down its costs. We are looking at how we could support refineries more through including them in the energy intensive industries compensation scheme, which would obviously cut costs and help UK refineries with their competitiveness. That is not straightforward, but we are determined to look at that.
On my hon. Friend’s final point, he is right that the overall context of what we are doing as a Government is driving forward the transition to clean power, because it gives us back our energy security and takes away the volatility in prices that has been so devastating to households and businesses over the past few years. It is also the economic opportunity that helps drive forward refineries into what could be profitable businesses in that transition. They will continue to play a part in that, and we will support them to do so.
Mr Speaker
We have a lot of business today, so if we could help each other, that would be very useful. I call the Liberal Democrat spokesperson.
Edward Morello (West Dorset) (LD)
The closure of Prax Lindsey oil refinery is deeply troubling, with up to 1,000 jobs at risk across the supply chain. It is a devastating blow to workers, their families and the communities that rely on the refinery. We need a clear strategy to support those whose livelihood is in jeopardy. That means practical help with reskilling and retraining. This is also an opportunity for targeted green investment in industries that can offer decent, secure jobs for the future.
This crisis speaks to a wider failure. The UK still lacks a proper plan for a just transition that gives oil and gas workers real confidence about what comes next. We need to wind down fossil fuels in a way that provides genuine opportunities—well-paid green jobs, clean energy infrastructure, and proper support for the communities that have long powered this country. As other parties embrace climate denialism and internet conspiracy theories, the Liberal Democrats call on the Government to ensure that we do not backtrack on our climate targets, undermine green investor confidence, and abandon our leadership on the world stage when it comes to climate change.
First, what steps are the Government taking to ensure that contingency plans are in place, so that those whose jobs are at risk are guaranteed support and opportunities to redeploy their skills? Secondly, how are the Government ensuring that investment in skills and regeneration is targeted, so that it has the greatest impact where it is needed most? Finally, what steps are the Government taking to ensure that the transition to renewable energy makes the best use of the skills and experience of oil and gas workers in the places affected, such as the Humber estuary?
Michael Shanks
I wrote down the hon. Gentleman’s points, and then he came on to specific questions, but I will respond to the points. He rightly says that this has been devastating news for the workers. He also said something that I want to echo, and which I said to the workers when I met them last week: this decision, and what has happened to the company, is no reflection at all on the incredible, very skilled work that they are doing. I want to reiterate that. So often in these cases, the workers bear the brunt of decisions taken by the company, and that is a great shame. He is right, and we will support the workers. My Department is funding the training guarantee to make sure that all those workers are given an assessment of their training needs and future employment desires, so they can be given tailored support. We will make sure that is rolled out in the coming months.
On the hon. Gentleman’s wider point about the transition, he is right to say that we need a proper plan. That is why we consulted on the future of energy in the North sea, both through a series of questions, and through a much broader question about what the future of our energy sector looks like. It will have oil and gas for many decades to come, but already thousands of jobs are being created in other offshore industries, and we want to support that.
The hon. Gentleman is right to highlight that investor confidence is critical. It is shameful that people would seek to damage investor confidence in this country in the name of net zero rhetoric. The truth is that there has been more than £40 billion of investment in clean energies in this country. That means jobs and opportunities in all our communities across the country, and those who would talk that down should be ashamed.
Laurence Turner (Birmingham Northfield) (Lab)
I draw the House’s attention to my entry in the Register of Members’ Financial Interests in respect of the GMB trade union. The Minister said that he was engaging with workers. Will he set out in more detail what engagement he is undertaking with the trade unions that are those workers’ representatives? Will he give the House an assurance that the detailed modelling work undertaken by the Department includes the impact on the wider supply chain?
Michael Shanks
I also declare that I am a member of the GMB trade union; that is recorded in my entry in the Register of Members’ Financial Interests.
I have engaged with both the Unite trade union reps who are on the site, and with day shift workers who are not represented by a trade union, to make sure that I hear from them. I met them earlier this month and last week at the refinery, and I will meet them in about an hour’s time to talk through this more. We want to continue that engagement with them.
Sir Edward Leigh (Gainsborough) (Con)
Obviously, my first concern is my constituents who work in the refinery in the neighbouring constituency, that of my hon. Friend the Member for Brigg and Immingham (Martin Vickers). I am sure that the Minister will give them reassurance about enhanced redundancy. Also, may I ask a question on behalf of my rural constituents in North Lincolnshire—and I declare an interest, as I live there? This is a deeply rural area, where we rely on heating oil because we are not on mains gas. What impact will closure of the refinery have on the price of heating oil?
Michael Shanks
On redundancy, because of how the company went into insolvency, the workers will be entitled to statutory redundancy. That is not acceptable, given the role that they played in delivering for the company for many years. That is why I have publicly asked the owners of the company to put their hands in their pocket and improve the redundancy package. It is not possible for the Government to improve the package directly, but I am still hopeful that the company owners will do the right thing. We are providing a training guarantee to the workers, from Government funds, to make sure that they have that enhanced support.
I am happy to take away the point about heating oil. We have been assessing the situation over the past few weeks, including a number of weeks during which fuel has not left the refinery at its normal pace, to see what the impact is on supplies across the region. That impact has been minimal. That is partly because a significant amount of fuel and products come from the refinery next door. However, we will continue to monitor that, and if there is an impact on prices, I am happy to look into that.
Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)
Much like the ceramics sector, the refinery sector is an energy-intensive industry that is at the mercy of industrial energy prices, which are beyond its control but have a huge impact on its viability. It is welcome that the Minister thinks that the energy-intensive certification programme could expand to include the refinery sector, but he will know that the business level test is a huge barrier that needs to be overcome; it means that many companies will not be eligible for the programme. He will also know that the British industry competitiveness scheme is not due to come online for another two years; indeed, consultation on that scheme has yet to be opened. Refineries and ceramics companies are looking down the barrel of ever-increasing industrial energy bills. Will he give them some indication of what help and support is available now, before the new schemes come online, so that we do not have more statements about closed factories in the next few months?
Michael Shanks
My hon. Friend is right, and it is deeply frustrating that we inherited many of these issues, which were unresolved for such a long time. These are not problems that arrived in the past 12 months. Bringing in the refinery sector for talks with Government about the challenges would have been a fairly obvious thing to do at least once in the past 13 years. Clearly, that did not occur to the previous Government, and we have inherited challenges.
My hon. Friend is right to say that consultations will take time, unfortunately. It is right that we conduct a proper consultation to make sure that there are not any unintended consequences. The Minister for Industry, who is a Minister in both the Department for Energy Security and Net Zero and the Department for Business and Trade, is looking at how we can do that as quickly as possible. I am happy to follow that up with her. My hon. Friend is also right that nobody wants to be talking about redundancies in any part of our economy, and we are doing everything we can to bring down prices to prevent redundancies.
Martin Vickers (Brigg and Immingham) (Con)
This is a massive blow to my Brigg and Immingham constituency—most particularly to those directly employed by the refinery, but also to the wider economy of the sub-region. Will the Minister reconsider what he just said about statutory redundancy? I want the maximum support given to those workers.
I will raise two other points. First, North Lincolnshire council published a green growth zone document last year about the future of the regional economy. As we discussed yesterday, I urge the Minister to consider an urgent meeting, at which all involved are brought in for a roundtable discussion. Secondly, if he is not doing so already, may I urge him to speak to his colleagues who are local government Ministers? North Lincolnshire council will lose £2.6 million in business rates. Needless to say, that is a massive blow that would affect the delivery of services.
Michael Shanks
I thank the hon. Gentleman for his questions, and for meeting me to discuss the matter yesterday. I appreciate the impact that the closure will have, not just on those refinery workers who are directly impacted, but on the wider economy. We absolutely appreciate that there are ripple effects from a closure like this.
On the statutory redundancy point, we have looked at this, and have pushed to see if there is more action that the Government can take to change or give additional payments. It is not possible for Government to do that, not least because the Insolvency Service has to follow specific rules on creditors and how they operate in the event of an insolvency. However, the owners of the company have profited from this business, and they should do the right thing by the workforce that delivered that for them.
I have agreed to hold a roundtable discussion, and I previously met the two council leaders to talk about this. I am happy to arrange that discussion, and to have it with whoever is useful and wants to participate, because the hon. Gentleman is right about the opportunities. I am happy to engage on the point about North Lincolnshire and business rates. Although the refinery will not continue to be a going concern, we are assessing bids from those who are interested in the site; we hope those bids will deliver jobs and economic benefit, and that business rates income will come from new industries on the site. That is not as good as retaining the refinery in its current form, but we hope we can make some progress.
Dr Scott Arthur (Edinburgh South West) (Lab)
I thank the Minister for his statement, and particularly for the news that there will be a thorough investigation. I have two quick questions. First, are the reports correct that the previous Government did not meet representatives of the sector for 13 years? I know the Minister said that he had met them recently. Secondly, families will be in crisis when they hear this news, and they will struggle to deal with it. Does he agree that the owner, who I understand is not short of money, has an absolute moral obligation to ensure that those families are supported? Statutory payments are welcome, but the moral obligation has to be made clear.
Michael Shanks
I thank my hon. Friend for both those points. My understanding from the sector and from the Department is that a meeting has not happened in the past 13 years. [Interruption.] If the right hon. Member for Louth and Horncastle (Victoria Atkins), on the Opposition Front Bench, wants to find me dates when her Government met the sector, I would be really happy to look at them, and at any minutes from those meetings. That would be helpful. There are particular issues for the sector, but also for individual refineries; some are more profitable than others, and some have transitioned to doing other pieces of work. It is important that they learn from one other, and that the Government do what they can.
On my hon. Friend’s final point, I agree that there is a moral obligation here. Having met the workers on the site, I know that they have done nothing wrong. They have worked hard over many years to keep the refinery going, and to deliver a profit. Those who have taken money out of that business should now do the right thing and fund those workers, and I hope that they will respond to my letter in due course.
Chris Law (Dundee Central) (SNP)
With the Grangemouth refinery in Scotland having closed, and Prax Lindsey facing the same fate, there is clearly a missing element in the UK Government’s just transition policy. There can be no just transition if skilled jobs are lost when that transition is made. What assurance can the Minister give that the Government have taken a wider view, in order to stem these closures and address what is clearly a deeper issue with policy?
Michael Shanks
I take the hon. Gentleman’s point about the importance of recognising that the most important thing to get right is the transition of workers. I have said that in other answers. That requires us to recognise that a transition is under way, and to put in place a plan, which has not happened in the past decade, during which we lost more than 70,000 workers in this industry. It is really important that we grapple with those issues, and it will not be easy. The starting point is to bring together everyone with an interest in this, as I have done—everyone from the trade unions and industry to those making the green investment that is driving this forward—to make sure that we deliver on jobs, and to make sure that training and support are in place, so that workers can transition. He raises an important point.
On the hon. Gentleman’s point about Grangemouth, it was not breaking news that Grangemouth was in a precarious position, and the previous Government could have done more to ensure a just transition there. I met the investment taskforce yesterday, along with my colleague Gillian Martin, the Energy Minister in the Scottish Government, to look at the prospects for the sites. There are some interesting propositions coming forward; there are 84 bids in total for £200 million from the National Wealth Fund, and I hope that we will have good news on jobs and investment in Grangemouth soon.
Graham Stuart (Beverley and Holderness) (Con)
I thank the Minister for his briefing yesterday, but there is a pattern developing, is there not? Some 800 jobs were created every single day in the 14 years of the Conservative Government, but unemployment has gone up every single day under this Labour Government. Some 400-plus jobs have been lost at Vivergo, on the north side of the Humber, and perhaps 600 jobs will be lost directly, and others lost indirectly, on the south side of the Humber. Can the Minister reassure those affected that this Government will not destroy our industrial base, and that there is a future for us, because it looks like we are heading in the wrong direction?
Michael Shanks
I will avoid the wider political points in a week when workers are finding out about job losses, because that is obviously devastating for them. I will just say that the Government have published their industrial strategy, and this is the first time the country has had an industrial strategy in a very long time. [Interruption.] Well, let us say a credible industrial strategy, if the right hon. Member for Beverley and Holderness (Graham Stuart) thinks he had one before. Again, I ask him to present it to me. We are investing in the industries of the future, and delivering thousands of jobs on the Humber and right across the country. We are making sure that investment comes forward in jobs for the future. [Interruption.] The problem with the right hon. Gentleman’s point is that his party opposes that investment. It opposes the very thing that will deliver the jobs of the future, and I am afraid that is simply an untenable position. Either he is for or against investment in jobs; he has to say which it is. The industrial strategy is the way to deliver that.
Carla Denyer (Bristol Central) (Green)
The last time we discussed Prax Lindsey, I asked the Minister to support my energy jobs Bill—a plan for the redeployment and retraining of oil and gas workers that is proactive and industry-wide rather than reactive and crisis by crisis, and that would be paid for by the companies. That is what the workers and the unions want, but the Minister said he did not agree with it. He has now said that the Government will fund a training guarantee for these refinery workers and is asking this company’s owners to make voluntary contributions to support workers. That is progress, but will he now turn this into a proactive and industry-wide plan, and please go beyond asking the company nicely to do the right thing and require it?
Michael Shanks
I think the hon. Lady slightly misses the point. The company went into insolvency. The workers are therefore entitled only to statutory redundancy. I do not think that that is acceptable, so I have called—not nicely, but directly—for the owners of that company to do the right thing, put their hands in their pockets and fund proper redundancy for those workers. That is separate from a wider piece of work we are doing around the transition. I think she also misses the point about the importance of delivering investment in oil and gas that is also investment in renewables and in carbon capture, utilisation and storage to deliver the jobs that come next, so that there is a transition for those workers. I have said that I do not support her proposal, and I am happy to say that again because it would do neither of those things. It is essential that we support the oil and gas industry in its current form, but recognise that it is in transition. We still have decades of oil and gas to come in this country, but we are already building up the industry that comes next. That needs investment, and it also needs us to build infrastructure, which many people in her party seem to oppose.
Bradley Thomas (Bromsgrove) (Con)
While the Minister is right to point out that this refinery produces a small amount of the UK’s refined fuel overall, the site does provide around 50% of the fuel into Warwickshire Oil Storage, a key site at Kingsbury in the west midlands that supplies fuel into the west midlands, which is obviously a very large demand centre. What is the Minister’s assessment of the impact on the supply and demand balance of road fuels in the west midlands as a result of this closure?
Michael Shanks
I am happy to follow up on anything specific with the hon. Gentleman, but I can tell him that I get daily updates on assessments on exactly that point. Clearly, the first week of the insolvency saw some disruption to supplies leaving, but our evidence pointed to the fact that those commercial contracts were able to be renegotiated and to adjust to that. We are continuing to monitor to ensure there is no disruption, and there is no assessment at the moment that would suggest any impact at all on fuel security. Clearly, we will continue to do that, and if I can follow up on specifics, I will do so.
Lee Anderson (Ashfield) (Reform)
What a pathetic turnout today from the party of the workers: just four Labour MPs have turned up to speak out on behalf of the Prax Lindsey workers. What I want to know from the Minister is if it is true that a foreign company has already been lined up to asset-strip and decommission this site—yes or no?
Michael Shanks
First, I think the hon. Gentleman is misjudging the mood of this question, which is about workers affected by redundancy. I hear nothing from him on those workers who are hearing the news this week. On his point, we assessed a number of bids for the business as a going concern. None of those bids were credible, which is why the official receivers made the decision to cease refining. Some bids are interested in parts of the site for a range of different things, but I am not party to those bids. They are commercially sensitive bids that will be assessed on the basis of how many jobs can be retained and the industrial opportunities on that site, which is what we are driving forward. I would just say to him that spreading nonsense and rumours, either in this House or on social media, does absolutely nothing to support the workers on that site.
Harriet Cross (Gordon and Buchan) (Con)
I have listened closely to the Minister’s answers, and he is rightly highlighting the importance of the jobs and the redundancies, but I think we need to be a bit clearer and more open with people about what the new jobs in the renewables sector that the Minister refers to are about. These jobs are not comparable to a lot of the ones that will be lost in the oil and gas sector. A lot of them are not full-time jobs; a lot of them are part time or temporary jobs during construction phases. We are losing a huge number of workers across the country, and we will continue to do so because of the Government’s policies on oil and gas and the speed at which the sector is being demolished. Can the Minister please outline directly to these workers across the country, whether at Prax or in the north-east, how their jobs will be supported into the future? I am talking about comparable full-time jobs, not just the temporary ones.
Michael Shanks
A key objective of this Government is to deliver good, well-paid trade-unionised jobs, and we have been driving that forward. My right hon. Friend the Secretary of State has been pushing on trade union recognition, partly to ensure that terms and conditions in the clean energy industry are as good as those in, for example, the oil and gas industry. We will continue to push on that, and we have already had some successes.
I gently say that the investment going into clean energy that is delivering thousands of jobs and will deliver tens of thousands of new jobs across the country comes against a backdrop of opposition from the Conservatives on Great British Energy in the north-east of Scotland delivering those jobs. We are also announcing today the final investment decision on Sizewell C—10,000 jobs are being created in nuclear after years of dither and delay by the hon. Member’s party. We are getting on with doing this, and we will do everything we can to ensure those jobs are comparable on terms and conditions and pay. I say to her that if she wants these jobs to be created, she should support some of the policies that will deliver them in the first place.
Jim Shannon (Strangford) (DUP)
I thank the Minister for his answers. Bearing in mind that the refinery was responsible for supplying some 10% of British fuel—fuel for the United Kingdom of Great Britain and Northern Ireland—it is absolutely essential that a way forward is found, and found quickly. Part of that solution must be a common-sense approach to using fossil fuels. What discussions has the Minister had with his Cabinet colleagues to provide a long-term assurance that there is a future for this refinery, even at this eleventh hour, so it can be sold as a going concern, as it should?
Michael Shanks
The Government have pushed, over the past four weeks we have been aware of this issue, to try to find a route whereby the refinery can continue as a going concern. That was obviously our No. 1 objective. The official receiver assessed the bids that were made and found that none were viable to deliver that. The Government are not going to nationalise this refinery—we are not in the business of nationalising loss-making businesses—so, unfortunately, that is not a route we will take. But we have done everything we can, and what we now want to do is assess the bids for the future of the site to see what the maximalist approach is that, crucially, will keep as many jobs on the site as possible, but also will deliver on the industrial opportunities of that site for the wider community. We will continue to have those conversations.
Oral Answers to Questions
Michael Shanks Excerpts(2 weeks, 3 days ago)
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Alex Ballinger (Halesowen) (Lab)
The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Michael Shanks)
The Government are committed to strengthening collective bargaining and trade union recognition. The Employment Rights Bill and the plan to make work pay will modernise rights and improve conditions. The Office for Clean Energy Jobs engages unions to ensure that renewable energy jobs support economic growth, the net zero transition and workers moving from carbon-intensive sectors.
Alex Ballinger
Many of my constituents in Halesowen work in energy-intensive industries such as forges and heavy manufacturing. The Government are rightly supporting those industries to become more energy-efficient, but workers need new skills, as well as skills in the many new jobs in the renewable energy sector. As they make this transition, how is the Department supporting workers in the west midlands to get the right skills for these new industries?
Michael Shanks
My hon. Friend is right to raise that point. Supporting workers in energy-intensive industries is essential as we transition our economy. The Government will provide over £1.2 billion per year in skills funding by 2028-29, supporting training in renewables, low-carbon construction and advanced engineering. We are also investing over £100 million over three years to develop engineering skills in England and launching new technical excellence colleges to make sure that training stays aligned with employers’ needs. We will also push forward on the clean energy workforce strategy this year.
Mary Glindon (Newcastle upon Tyne East and Wallsend) (Lab)
Calum Miller (Bicester and Woodstock) (LD)
The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Michael Shanks)
We are working with Ofgem and the National Energy System Operator to accelerate network infrastructure through reforms to planning, supply chains and other areas, delivering the capacity needed to achieve clean power by 2030 and to drive economic growth.
Calum Miller
In my constituency of Bicester and Woodstock, the local plan anticipates significant new employment sites to create jobs and growth. Tritax Big Box tells me that it wants to put solar panels on 100% of usable roof areas on the buildings that it intends to create. Local planning policies would support that, yet I was shocked to learn that Tritax expects to install solar panels on only 25% of usable roof space. It cannot get a permit to generate electricity or consent to export to the grid. Will the Minister or his officials meet me to discuss how we can turn this into a win-win opportunity for rooftop green solar?
Michael Shanks
That sounds like a fantastic opportunity. Our ambition is to see solar panels on as many rooftops across the country as possible. It is a win-win opportunity, as the hon. Gentleman rightly puts it. He and I have spoken about a number of these issues previously, and I am happy to discuss this one with him. If he could write to me with the specifics, we will certainly look at the matter. In the meantime, we are looking at reforming all those processes to make sure that we can get as much power as possible.
Bill Esterson (Sefton Central) (Lab)
The challenges of increasing electricity grid capacity include the ability to get planning consent and to achieve grid connections, as the Minister knows. In the report that the Select Committee published last week, we referred to the problem of inconsistency in some of the guidance and energy plans over which comes first—the grid connection or the planning consent. Will the Minister please address that and ensure that the Government clear up that inconsistency, so that we can move forward with increasing electricity generation and grid capacity?
Michael Shanks
I thank my hon. Friend for the question and for the work that he and the whole Committee have been doing on this matter. His report has been my bedtime reading every night this week as it is an important piece of work. He is right about two things. First, where processes are not as well aligned as they should be, we absolutely need to look at what we can do to make sure that they work much more coherently. The second point his report made, which we are also looking at, is how we bring together things such as the strategic spatial energy plan, the holistic network design and the land use framework to make sure that we have coherent plans across the country, so that we can plan properly our energy system.
Shaun Davies (Telford) (Lab)
Adam Thompson (Erewash) (Lab)
The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Michael Shanks)
The clean power 2030 action plan makes it clear that nuclear will play an important role in our future energy system, providing low-carbon baseload power to the grid. We are delivering the biggest new nuclear building programme in a generation, having committed almost £17 billion at the recent spending review.
David Taylor
I was grateful to the Secretary of State for showing his love for Hemel Hempstead when he came to launch a new scheme on solar panels the other month. On the question of new nuclear and clean jobs, could the Minister outline how communities like mine in Hemel Hempstead will benefit from these new jobs?
Michael Shanks
Well, my right hon. Friend the Energy Secretary says that we love Hemel Hempstead; I think we agree on that. The nuclear sector is poised for significant growth. That will help deliver on our energy needs in the future, and it is how we will deliver thousands of skilled jobs across the country. The nuclear skills plan is a collaborative effort between Government, industry and academia, setting out the targeted work we need to address the skills gap and bring forward the thousands of apprentices we will need to deliver this work in the future. The regional skills hubs we have established will help to deliver training support locally to ensure that every community in the country benefits.
Adam Thompson
Rolls-Royce in Derby has recently been announced as the preferred bidder for the delivery of small modular reactors, which means that many of my Erewash constituents will become the beating heart of the workforce that delivers the reactors. Can the Minister explain how Derbyshire’s finest SMRs will help to end our reliance on foreign oil and gas?
Michael Shanks
My hon. Friend is absolutely right; the Government are committed to delivering a new golden age of nuclear, securing an abundance of clean power after 14 years of dither and delay from the Conservatives, and with that will come investment across the country. On 10 June, following a robust two-year process, Great British Energy Nuclear selected Rolls-Royce SMR as its preferred bidder to deliver the UK’s first small modular reactor, subject to final Government approvals and contract signature. The Government are making available £2.5 billion across the spending review to enable this to be one of Europe’s first SMR programmes.
Jim Shannon (Strangford) (DUP)
I have always been a supporter of nuclear power. Unfortunately, we do not have access to nuclear power in Northern Ireland, but I know from discussions with the Minister that he is very keen to ensure that modular nuclear power opportunities are available in Northern Ireland. Business that I have spoken to want access to these opportunities, as does the Northern Ireland Assembly. I know that the Minister is always committed to trying to make things better, so has he had an opportunity to talk to the relevant Minister in the Northern Ireland Assembly about ensuring that access to modular nuclear power is available to us in Northern Ireland?
Michael Shanks
I regularly engage with Ministers in the Northern Irish Executive, including in the Department for the Economy, which has responsibility for energy policy in Northern Ireland, and we discuss a range of issues. We are happy to support the Northern Irish Executive in any way we can, either with technology or through rolling out the regulatory framework. We are really excited about the opportunities posed by SMRs and are happy to discuss that in Northern Ireland as well.
Wendy Morton (Aldridge-Brownhills) (Con)
Marsha De Cordova (Battersea) (Lab)
The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Michael Shanks)
We will continue to support new renewables through the contracts for difference scheme in conjunction with initiatives such as the warm homes plan, the future homes standard and the boiler upgrade scheme. Great British Energy and Great British Energy Nuclear will together invest more than £8.3 billion over this Parliament in home-grown clean power.
Marsha De Cordova
I welcome the Government’s mission to achieve clean power by 2030. I know that the Minister will agree that it is vital that we make the transition to net zero as quickly as possible, not only to fight climate change but to lower energy bills. Does he agree that whereas previous Governments have failed to deliver for the British people, our plans are the single best way to bring down energy bills for families, including in my Battersea constituency, and to provide them with much-needed energy security?
Michael Shanks
I completely agree. My hon. Friend makes the point that this is not just about action on the climate—as important as that is—and creating thousands of new jobs, but about bringing down bills and, crucially, delivering on that energy security point. The truth is that even though our clean power mission is about doing all four of those things at the same time, the Conservative party opposes all of that action, would leave us much more vulnerable to the volatility of the fossil fuel markets, and would turn its face against the economic opportunity of the 21st century.
Sir Jeremy Wright (Kenilworth and Southam) (Con)
The Minister will recognise that one way to increase the supply of clean energy is to enable community energy projects to supply local energy markets. When Ministers are asked about that, as he knows they have been many times, they generally say that there is no technical obstacle to it happening, but will the Minister recognise that there is world of difference between, on the one hand, something being technically possible and, on the other, that same thing being facilitated and encouraged so it really happens? Will he focus on the latter as the Government develop their energy market reforms?
Michael Shanks
I completely agree. The right hon. and learned Gentleman is absolutely right: there are no technical barriers to doing it, but that does not mean that it is a straightforward process. To be honest, things that I thought would have been much more straightforward, like how we define “community”, are more difficult to get right, but we are absolutely determined to do it. He is right to make the point about delivering clean power that benefits local communities, so that they can buy it locally and really see the benefit of hosting it. That is exactly what we are determined to do and we will continue to work to make it happen.
Luke Akehurst (North Durham) (Lab)
Helen Maguire (Epsom and Ewell) (LD)
The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Michael Shanks)
Our clean power 2030 action plan sets out our pathway to delivering clean power. To support that plan, we recently launched the solar road map, which confirms plans to increase domestic solar installations through the future homes standard and warm homes plan.
Helen Maguire
Over 50% of our food and £2.7 billion in lifesaving medicines depend on the cold chain, but operators face soaring energy costs and growing grid instability. In Epsom and Ewell, Sunswap is pioneering battery and solar-powered refrigeration, which cuts emissions while protecting vital supply chains. Will the Minister commit to targeted support for renewable energy innovators like Sunswap, whose technology can strengthen both sustainability and national resilience?
Michael Shanks
The hon. Lady is right that we have an enormous amount of innovation in this space and real potential to meet our future needs, not just as a result of the pathway that we have outlined, but through innovative solutions like the one she mentioned, which provide specific support to targeted industries. I am happy to look further into her proposals, and at the funding available for innovation. If she wants to write to me with any details, I will happily follow up.
Dave Robertson (Lichfield) (Lab)
A business in the village of Fradley in my constituency has a plan to put millions of watts of solar on the roof of its businesses. Unfortunately, it cannot proceed with that application, because there is not sufficient export capacity on the site. It would never export a watt of that electricity, which would meet only a fraction of its energy needs. Will the Minister meet me, so that we can discuss how we can make regulatory changes to support projects like this one?
Michael Shanks
My hon. Friend makes a point that others have raised. We are looking in granular detail at how the system works to ensure that the regulatory landscape allows such opportunities to be taken. I am very happy to meet him to discuss this further. We are taking a detailed look at every single aspect of the system, so that communities, businesses and others can benefit from being able to export power to the grid. That will help the country with its energy needs and deliver a benefit for local communities.
Alex Brewer (North East Hampshire) (LD)
Carla Denyer (Bristol Central) (Green)
The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Michael Shanks)
Of course the Government follow the regulations that we have put in place quickly, and applications must be considered on a case-by-case basis—that is the way anyone would expect them to be dealt with. I will not say on the Floor of the House any more about those applications, as they are live decisions that will be made in due course by the Department.
Melanie Onn (Great Grimsby and Cleethorpes) (Lab)
Michael Shanks
I will repeat what I have said before: we are obviously hugely disappointed by the way that the owners have dealt with the company. I repeat the ask that I have made in the House a number of times, and in writing to the chief executive, that he should put his hands in his pockets and do the right thing by the workforce. We are doing everything we can as part of the insolvency process safely to manage the refinery, and to look at whether there are buyers interested in taking it on.
Blake Stephenson (Mid Bedfordshire) (Con)
Llinos Medi (Ynys Môn) (PC)
Solar developers are not playing by the rules when it comes to accessing the land of people on Ynys Môn. Government guidance states that developers must act reasonably when trying to obtain permission to access the land, but my constituents have received threatening emails and there have even been cases of developers trespassing on land. Does the Minister condone such behaviour, and does he believe that current guidance is strong enough to protect constituents such as mine?
Michael Shanks
I do not know the specifics of the case that the hon. Lady raises—if she wants to send any details to me, I will certainly look at them. We clearly want to see and expect in every single case a partnership between developers delivering projects that we think are important, the planning system responsible for putting the processes in place and the communities who should have their local area protected and be able to access it. I am happy to follow up with her if she wants to raise specifics with me.
Steve Witherden (Montgomeryshire and Glyndŵr) (Lab)
Michael Shanks
That is not the position of the Government, because report after report and the evidence points to the fact that undergrounding cables is significantly more expensive than putting them above ground. Individual applications will clearly look at the individual circumstances and make a decision on that. We have said as a Government that communities that host network infrastructure should benefit through community benefits and direct money off bills, and that is what we will deliver.
Ben Obese-Jecty (Huntingdon) (Con)
It was recently announced that the surplus Ministry of Defence land at RAF Wyton in my constituency has been designated as an MOD trailblazer site. The Housing Minister confirmed to me last week that no assessment has yet been made of the energy infrastructure currently in place. The Prime Minister recently confirmed to me here in the Chamber that my proposal to develop a defence technology cluster on the site would be supported. To that end, is the Minister prepared to look into the available energy infrastructure and substation connectivity at the site and write to me with his assessment?
Michael Shanks
The hon. Gentleman is assiduous in raising these sorts of questions with me. I am very happy to look at the possibilities. He is right to outline the potential of sites such as that, and we will look at it.
Tracy Gilbert (Edinburgh North and Leith) (Lab)
Nova Innovation in my constituency is pioneering floating solar, which is generating clean energy. Will my right hon. Friend outline what steps the Government are taking to support the development of floating solar?
Perran Moon (Camborne and Redruth) (Lab)
In France, Germany, Croatia and elsewhere on mainland Europe, geothermal energy is being taken very seriously. I was disappointed that geothermal energy got little mention in the industrial strategy, particularly as there is estimated to be 30 GW of energy in the Cornish granite batholith. Will the Secretary of State meet me to discuss how we clear the barriers to unleash the potential of the Cornish granite batholith?
Michael Shanks
My hon. Friend always raises the huge potential of Cornwall in this House and in the energy space. He is right to talk about the potential for geothermal; we are hugely excited about the opportunities that it presents. I am very happy to meet him and others to discuss further how we can take it forward.
Wendy Chamberlain (North East Fife) (LD)
I am already being contacted by constituents who are worried about affording their energy bills this winter, but do not feel that the service they get from the energy companies is properly supporting them. What steps are the Government taking to ensure that energy companies provide the support that they need?
Brian Leishman (Alloa and Grangemouth) (Lab)
More than 100 INEOS chemical employees are to lose their jobs at Grangemouth because the refinery has closed. The £200 million commitment to Project Willow does not help them in the here and now, and it is frankly an insult to the workers who are about to lose their livelihoods to talk about training opportunities at Forth Valley college that are not being afforded to them. What have the Government actually done and what will they do for those workers who do not have the same redundancy or training package as the refinery workers?
Michael Shanks
We are looking in the round at how we can deliver jobs and opportunities on the Grangemouth site. The National Wealth Fund made an unprecedented commitment of £200 million, and I have been meeting companies that are potentially interested in developing projects, to make sure we get them over the line. We have delivered on the training guarantee and delivered support beyond that provided by the Falkirk and Grangemouth growth deal. We are doing everything we can to support the workforce there, and we will continue to do so.
Draft Electricity Capacity (Amendment) (No. 2) Regulations 2025
Michael Shanks Excerpts(3 weeks, 2 days ago)
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The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Michael Shanks)
I beg to move,
That the Committee has considered the draft Electricity Capacity (Amendment) (No. 2) Regulations 2025.
It is a pleasure to serve under your chairship, Mr Vickers. These regulations were laid before the House on 3 June 2025, and they make technical improvements and changes to the capacity market scheme—the Government’s main tool for ensuring security of supply in Great Britain. We know that to achieve clean power by 2030, reform of the electricity market is critical. To paraphrase the clean power action plan, we must:
“Reform the capacity market to provide clear and viable routes to decarbonisation for unabated gas, enable low-carbon flexible capacity…and incentivise investment into existing capacity.”
Before I outline the provisions in these regulations, I will briefly provide some context. The capacity market was introduced in 2014, and it is designed to ensure that sufficient electricity capacity is available to meet future predicted demand, to maintain the security of our electricity supply. The capacity market is a well-established and technology-neutral scheme in which existing and new build electricity capacity receives revenue based on the capacity provided. Participants secure agreements through auctions, which require them to make capacity available at times of system stress. It is our main tool to ensure security of supply, and it provides the right incentives for all forms of capacity to be available when needed most. It covers generation, storage, consumer-led flexibility and interconnection capacity.
Through capacity market auctions, which are held annually—one year and four years ahead of delivery—we secure the capacity needed to meet future peak demand under a range of scenarios, based on advice from the National Energy System Operator. Since its introduction in 2014, the capacity market has contributed to just under 20 GW of new flexible capacity needed to replace older, less efficient plants as we transition to net zero.
To date, the capacity market has been successful in ensuring that Great Britain has adequate electricity capacity to meet demand, and it continues to be required to maintain our security of supply and to provide investor confidence. To ensure that the capacity market continues to function effectively, we regularly make adjustments to the implementing legislation based on our day-to-day experiences.
The draft instrument makes technical improvements and changes to nine regulations to support the functioning of the capacity market, and they have been identified and explored through consultation. The changes will ensure that the capacity market regulations remain clear for market participants and that the legislation remains up to date, to enable us to better deliver the security of supply mechanism.
The draft instrument does that by revoking several expired provisions of secondary legislation relating to the scheme, including references to: transitional auctions, which are no longer applicable; the temporary standstill period, which occurred in 2019; and the time-limited relief given to scheme participants in relation to coronavirus. It will also introduce a new process to establish a decarbonisation pathway for unabated gas plants currently in long-term capacity market agreements. That will allow gas plants to exit their agreements without penalty in order to transfer to a dispatchable power agreement, facilitating conversion to gas-fired power with carbon capture and storage once the technology is available. That will better align the capacity market with our clean power objectives, and it will provide gas plant operators with a future route to decarbonise their assets.
The Government carried out two public consultations on this instrument. The first considered reforms to the capacity market to strengthen security of supply and enable flexible capacity to decarbonise. The second considered reforms to modernise the capacity market and improve the participation and delivery assurance of consumer-led flexibility. Both consultations were published towards the end of 2024. Respondents were broadly supportive of the instrument’s proposals. We have also made a number of technical amendments to the capacity market rules that support the regulations, which were laid before the House on 3 June.
This draft instrument introduces a number of technical provisions and changes to enable the continued efficient operation of the capacity market so that it can continue to deliver on its objectives. These reforms will be critical if we are to achieve clean power by 2030. They will improve security of supply by ensuring the modernisation of the capacity market and making legislation as clear as possible for all scheme participants. We need clear routes for the decarbonisation of unabated gas and for the rapid acceleration of low-carbon, flexible capacity. And today, with these regulations, we take another step towards that.
I commend the regulations to the Committee.
Michael Shanks
I will not detain the Committee for long, but I should put on record that the shadow Minister was on the judging panel for the aforesaid awards. I am not quite sure what that says for either of us, frankly, but I thank him for whatever role he played in trying to prevent me from getting the award. It clearly did not work.
I welcome the shadow Minister’s broad support for the regulations, and I welcome his support for building a cleaner energy system, which I have not heard from the Conservative party for some months—I am glad he found his old script from a year ago and is repeating it in this place again, at least up to the word “however.”
Of course, the shadow Minister is right that security of supply is critical, as it is for any Government of any political party. These regulations are part of ensuring that security of supply into the future, and they are part of a series of measures we are taking to build infrastructure for the future, so that we remain resilient long into the future. That investment is important.
The shadow Minister talked about pricing, and I will pick out two points. First, the clean power mission is about reducing the current volatility in the price of gas. The Conservatives supported that move, and I credit them for constructing quite a lot of the renewables we have in the country, but they have since changed tack. At some point, they need to recognise that volatile gas prices are what is causing bills to increase so substantially, and that things like contracts for difference give long-term certainty on consumer bills and bring down the system cost, but the Conservatives oppose those things.
Secondly, capacity market costs have increased over time, not just in the past year but more generally. They have been impacted by a number of factors outwith anyone’s control when they were introduced. But overall, this change will bring about an overall benefit. It is important that we plan the power we might need one year or four years in the future and, of course, the cost of not having a capacity market would be a significant risk to the robustness of our electricity system.
Finally, and more broadly than these regulations, curtailment payments are deeply disappointing to everyone, but the answer is to plan the system strategically so that we build things in a way that makes sense. Secondly, of course, we need to build grid infrastructure to bring the cheaper power to consumers, and to reduce that curtailment payment cost. I hope we will see support from across the House on those questions of building new network infrastructure, although I suspect we will not from the Conservatives.
I warmly welcome, as I always do, the shadow Minister’s wholehearted support for the work we are doing in the Department for Energy Security and Net Zero, and long may that continue. I commend these regulations to the Committee.
Question put and agreed to.
Fossil Fuel Advertising and Sponsorship
Michael Shanks Excerpts(3 weeks, 4 days ago)
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The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Michael Shanks)
It is a pleasure to serve under your chairmanship, Mr Twigg, for my first petitions debate, which are a great innovation in parliamentary procedure. Like my hon. Friend the Member for Burton and Uttoxeter (Jacob Collier), I thank everyone who signed the petition. I do not think that I have been in a Westminster Hall debate with so many people in the Public Gallery. That is fantastic to see, and I thank them for being here.
I join the shadow Minister, the hon. Member for West Aberdeenshire and Kincardine (Andrew Bowie), in his comments about the Piper Alpha disaster, the 37th anniversary of which was yesterday. It was the worst oil disaster in history, in terms of human lives lost, and it reminds us just how dangerous some of the work in the North sea is. It also reminds us of the importance of the culture of safety, which has changed beyond recognition since that disaster. This is a useful moment to pause and reflect on the lives that were lost.
This is an important debate, and I praise my hon. Friend the Member for Burton and Uttoxeter for his excellent introductory speech. As a Member of Parliament, it is not always easy to give a balanced speech, but he attempted to put forward both sides of the argument very strongly, and I give credit to him for doing so.
I also thank other hon. Members who have contributed to the debate and raised a number of points. My hon. Friend the Member for Stroud (Dr Opher) brought his extensive medical experience to the debate. He rightly spoke about the significant impact that emissions have on people’s health, and about why climate change is a public health crisis as much as an environmental one. I also thank the hon. Member for Bristol Central (Carla Denyer) for her commitment to this issue. What she does in her spare time will now be in Hansard, so I think Wikipedia will be updated—there is no way out of that; it is on the record.
I recognise the strength of feeling on this incredibly important issue; the 100,000-odd signatures on the petition that triggered the debate underline that point. Before I address the specific points in the petition, however, I want to be absolutely clear that the Government are committed to tackling climate change. In fact, the Prime Minister said recently that that is “in the DNA” of the Government. We know it is an urgent threat to life—an existential crisis for our planet—and as I have said on numerous occasions, it is no longer a theoretical future threat, but a very present reality. We do not have to look far around the world to see examples of that.
Even if we did not accept all that as a huge reason to take action, we should recognise that the huge opportunity that swapping fossil fuels for clean, home-grown energy provides is much greater than just tackling the climate crisis: it can deliver our energy security in an uncertain time for our world and create tens of thousands of new jobs. It is also the industrial opportunity of the century. That is why one of the Prime Minister’s five key defining missions in government is to make this country a clean energy superpower with clean power by 2030, accelerating towards net zero. It is also why the Prime Minister has set one of the most ambitious nationally determined contribution targets in the world—to reduce all greenhouse gas emissions by at least 81% by 2035—and a few weeks ago my right hon. Friend the Chancellor set out the most significant investment in home-grown clean energy in British history.
Let me be clear. The Government are committed to this transition because it is the right thing to do for our energy security and to tackle the climate, but we will succeed in this mission only if we bring people with us. The moment that people start to feel that this is something being done to them, not with them, is the moment when we lose the battle. The shadow Minister rightly pointed out that we have been on this transition for a long time now. We have halved emissions since 1990 because of the consensus between Governments of different persuasions. That consensus, as many people will not have failed to notice, has now fractured, which is a great shame.
For us to win the political argument, we have to bring people with us. Instead of banning and blocking, our emphasis needs to be much more on empowering people to make informed choices. As the Prime Minister said before the election, after a period in which Government seemed to tread quite heavily on all our lives, part of this Government’s mission is to deliver for the people of this country, but to tread a little lighter on people’s lives. In this space, that means ensuring that everyone has access to accurate and trustworthy information about the climate crisis and the energy they use and the options available to them to be part of the transition.
In that context, I turn specifically to the petition. The UK has a robust regime in place to regulate the content and targeting of advertising through the Committee of Advertising Practice, which sets the codes that are upheld, and through the Advertising Standards Authority, which enforces the codes. The Government are not involved in the codes or in any of the investigations or enforcement delivered by the Advertising Standards Authority. In 2021, those bodies launched a climate change and environment project to respond to the ongoing climate crisis and ensure that environmental claims made in advertising are not misleading or irresponsible. Those findings have informed their updated guidance on advertising.
As the Government’s response to the petition sets out, we do not currently have plans to go any further on the guidance and ban or restrict fossil fuel advertising. However, that is not to say that we do not recognise that the climate crisis, as I have already outlined, is the greatest long-term global challenge we face. To address that, we need a legal framework in place to help us reduce our emissions, which will contribute to reducing our reliance on fossil fuels.
Carla Denyer
I thank the Minister for his patience while I checked a fact. A minute or so ago, he used the phrase “informed choice” to defend why he is not planning to ban advertising for fossil fuels. Is he aware that that exact phrase, “informed choice”, was used by the tobacco companies to campaign against the ban on tobacco advertising? I am reading from a memorandum by British American Tobacco that was submitted to Parliament in 2000.
Michael Shanks
I suspect that if we go through all the words that have ever been spoken inside and outside this place, we might find two words that go side by side quite often. In answer to the hon. Lady, no, I do not think that that is the case at all. She makes a persuasive argument, but in my view it is not the argument that applies in this particular case, which I will outline if I can make just a little more progress.
To come to the broader point, it is important that people have the knowledge and information before them to make informed choices on personal decisions, particularly on installing things in their own home. However, as a Government, we have a responsibility to share factual information about the state of the climate. That is why this Government frequently talk about the importance of the climate crisis; I think I have done so three times already in this speech. I am not seeking to pretend that there is not a climate crisis, and I do not think we have hidden from that fact at all.
I also want to talk about the path that the UK is currently on. We need to make a broader argument to the public that goes beyond banning advertising by certain companies. Collectively, we have a responsibility to show the opportunities presented by this transition, counter to much of the misinformation and disinformation that is being put about, including by Members of this House.
The latest report by the Confederation of British Industry shows that the net zero economy is growing three times faster than the wider economy, so there is an economic argument that we have to make. Since we came into government last July, more than £40 billion of private investment has come into the clean energy industries. We believe that the best way to build on that success, bring the public with us and create a convincing argument that this is the right route is by focusing on the economic and social benefits of net zero.
We have therefore been working with industry to explore how we can reduce emissions from high-carbon products, including voluntary eco-labels that help consumers to make different purchasing decisions. We are continually listening to the private sector, local government, trade unions and civil society. That is why we relaunched the Net Zero Council, and we will also publish our upcoming public participation strategy. At the same time, we are doing everything we can to slash emissions while building a more secure and stable future for our country.
The shadow Minister, in customary fashion, reeled off a set of political lines about why this is the wrong choice for us as a country, despite the fact that he believed in it last year when he was delivering speeches from the Government Benches. The truth is that actions speak louder than words, which is why in the past year we have not just said that we are committed to the clean energy mission and to delivering action on climate change; we have delivered.
We ended the onshore wind ban within 72 hours. We set up Great British Energy, the first publicly owned energy company in 70 years. We consented enough clean power for 2 million homes by approving applications that had languished on Ministers’ desks. We kickstarted the carbon capture industry. In the past few weeks, the Chancellor has also announced a significant investment of more than £60 billion in home-grown clean energy, including new regional hydrogen networks for transport, storage, industry and power. We also published our industrial strategy, which places clean energy right at the heart of industrial renewal over the next 10 years.
The wider context of climate action is important, and we want the UK to be a world leader in this space. That is why in 2008, when my right hon. Friend the Energy Secretary held the same role, we backed the Climate Change Act 2008, making the UK the first country to introduce legally binding net zero emissions targets. Since then, we have overachieved against the first, second and third carbon budgets, and we will be setting carbon budget 7 by June 2026, in line with our statutory duties.
Siân Berry
Before the Minister winds up, I want to ensure that he tackles the question of sponsorship, which is a key part of the petition. I think that focusing only on advertising ignores the lack of choice that people have if their much-loved sports team, the gallery they want to visit or the theatre company that they support is sponsored by a fossil fuel company. The Minister needs to reflect on why so many people signed the petition, having been put in an invidious position by these sponsorship deals.
Michael Shanks
It goes back to what I said earlier. I take the hon. Lady’s point, and I take seriously the number of people who engaged with the petition. I also reflect on the number of organisations and activities across the country that rely on sponsorship. I do not think that we should discount that so easily, because we have incredibly important organisations that may well collapse without some of that sponsorship.
There is a balance to be struck here. It is incumbent on Government to set the tone for what we expect in climate action. It is right and proper to hold private companies accountable where they share misleading information, but where they are supporting organisations that rely on their funding, I am afraid I struggle to say that we should simply withdraw that funding and, with it, the organisations that rely on it. As someone who has run a charitable organisation in the past, I can tell the hon. Lady that there is not an abundance of cash out there in alternatives.
This is about a balance, but I take the hon. Lady’s point on board, and we keep these things under review, as do other Departments that have a closer relationship with the Advertising Standards Authority and deal with questions on such matters. As I say, this is about us treading a little lighter on people’s lives and making the case for taking collective action on the climate crisis, but not being in the business of banning things.
I want to touch briefly on a point that the shadow Minister made, which is not often raised in these debates, about the just transition for the oil and gas industry. It is important to recognise that the industry has long been in transition, but there are many thousands of workers who rely on it for their livelihood and there are whole communities that depend on it for employment and investment. Although it is right that we are looking to the future of the North sea—a future that will include oil and gas for many decades to come, but will inevitably move towards other technologies, including carbon capture, hydrogen and offshore wind—we need to ensure that we are delivering the transition on the principle of fairness. Fairness for households means protecting bill payers from the volatility of fossil fuels, but in the North sea, fairness also means ensuring that workers and communities have a long-term, prosperous plan for their future.
The North sea will play a critical role in Britain’s energy future. For nearly 60 years, people have worked in incredibly difficult circumstances in the North sea, with workers, businesses and communities helping to power our country with oil and gas, and they will do so for decades to come. Although oil and gas production from our own shores will play an important role, as we drive towards clean energy, the North sea gives us an opportunity to show new leadership. That is why in our consultation earlier this year we outlined the role that we want to see the North sea playing long into the future.
I reiterate a point that I made at the beginning: this is an incredibly important subject and an important moment for us to say that the action needed on climate change is not just a question of banning advertising; it is about serious investment in how we push towards our clean energy transition. The Government are playing an active role in driving that forward, reducing emissions right across the country, creating good economic opportunities as part of that, demonstrating global leadership on climate action and delivering opportunities to every part of the country.
We are bringing people with us on this journey, so that when those who stand up and say that the climate crisis is not a priority for us, or that we should not be moving to net zero because it might be too difficult, we can say that we are delivering the economic and industrial opportunities of the 21st century. That is how we bring people with us and deliver on our transition for everybody. It is also how we deliver the action needed to tackle the climate crisis. That is why, although this petition is an important conversation, we think there are already measures in place to tackle many of these issues. They may well need to go further, and that is for the bodies responsible to do themselves. We think that the action needed from Government is to drive forward this transition and to deliver jobs, energy security and climate leadership, and that is what we will continue to do.
UK Onshore Wind Industry
Michael Shanks Excerpts(4 weeks ago)
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The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Michael Shanks)
I am tabling this statement to inform members of the publication of the onshore wind taskforce strategy and updated community benefits guidance for onshore wind in England.
The Government are committed to delivering a clean, affordable and secure energy system by 2030, and accelerating progress towards net zero. Onshore wind is one of the cheapest electricity generation technologies and will play a crucial role in delivering our decarbonisation goals. Having more low-cost renewables like onshore wind reduces the UK’s exposure to volatile global fossil fuel prices, which protects consumer energy bills against future price shocks. Onshore wind is therefore vital to boost Britain’s energy independence, protect bill payers, support high-skilled jobs and tackle the climate crisis.
Making Britain a clean energy superpower is one of the Government’s five missions. The clean power action plan, published in December 2024, set a target for 27 to 29 GW of onshore wind by 2030. Today’s publications are a significant step forward in delivering the 2030 mission. This mission is about driving economic growth as well as clean power, and industries such as onshore wind present a significant economic opportunity. For example, by 2030 up to 45,000 UK jobs could be supported by the onshore wind sector.
Onshore wind taskforce strategy
The strategy is the main output of a joint Government and industry taskforce established to identify and agree essential actions to mitigate barriers to deployment across the UK and capitalise on the economic benefits. The taskforce was set up following the removal of the de facto ban on onshore wind in England in July 2024 to streamline and maximise the deployment of onshore wind.
This is the Government’s first ever dedicated strategy for onshore wind, committing to 42 actions across planning, grid, workforce, financing and aviation. This will ensure we quickly unlock onshore wind deployment, deliver on the economic benefits, and make progress towards our clean power mission. Highlights of the onshore wind strategy include:
New actions to ensure the planning system is ready for the first English projects to come through the pipeline since the removal of the de facto ban, which severely limited deployment.
Ambitious actions to address interference issues between onshore wind turbines and civil and military aviation systems, to help get onshore wind projects moving.
A range of new commitments, alongside industry, to build the evidence base to support future onshore wind supply chain and skills interventions.
Today we are also announcing the establishment of an onshore wind council to ensure we deliver on the critical actions in today’s publications and continue the excellent collaboration with industry.
Guidance on community benefits for onshore wind in England
Government want to ensure that communities directly benefit from our 2030 goals, and today we have published updated voluntary guidance on community benefits for onshore wind in England, ensuring developments have a lasting positive impact on communities. The guidance includes:
Best practice models for benefits schemes such as community benefit funds, local electricity bill discounts and shared ownership.
Support available to communities when co-designing and administering funds, summarising best practice engagement principles.
A resource kit for communities with detailed case studies and example documentation.
The guidance sets expectations that developers pay community benefits of £5,000 per megawatt of installed capacity per year for the operational lifetime of the project. This would mean a 25 MW wind farm would deliver £3.75 million of funding for communities on local initiatives across a 30-year operating life. If we deliver 29 GW of onshore wind by 2030, we could unlock around £70 million of additional private investment in our rural towns and villages every year.
Scaling up onshore wind generation will be critical to the success of the Government’s clean energy mission. Today’s publications will give a boost to the onshore wind industry and local communities, reduce our dependence on volatile fossil fuels, and improve our energy security.
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North Hyde Substation Outage Review: NESO Final Report
Michael Shanks Excerpts(4 weeks, 2 days ago)
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The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Michael Shanks)
In March 2025, the Secretary of State for Energy Security and Net Zero commissioned the North Hyde substation review, an independent report delivered by the National Energy System Operator. The report was commissioned following a large fire breaking out at the substation, disrupting power supply to over 70,000 customers including Heathrow airport. While power was restored quickly, there were significant secondary impacts to the aviation sector due to the associated closure of Heathrow airport. NESO’s interim report was published in May 2025, and the final report has now been completed and published on NESO’s website.
The review aimed to identify lessons to be learned and actions to take forward for the prevention and management of future power disruption events, and lessons for Great Britain’s energy resilience more broadly. The actions recommended by this review address concerns under the three pillars: resilience of energy infrastructure, response and restoration of energy infrastructure and enhancing the resilience of critical infrastructure to energy disruption, as set out in the terms of reference published on gov.uk.
The report has highlighted key areas for substantial improvement across energy infrastructure management and maintenance approaches, and across the sharing of information and understanding between energy network operators and connected commercial customers. It also has options for improving the power resilience of other critical sectors. These actions will drive improvements to Great Britain’s energy resilience.
The majority of recommendations address improvements to be made across all parts of the energy sector, regardless of their involvement in the incident at North Hyde. In collaboration with NESO, Ofgem and other partners, my Department will ensure the delivery and implementation of these energy sector recommendations. The report findings are also applicable to wider Government policy on energy resilience—both in the energy sector and more widely. My Department, working across Government, will urgently consider the findings and recommendations set out by NESO and publish a response to the report in due course.
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Heathrow Substation Outage: NESO Review
Michael Shanks Excerpts(4 weeks, 2 days ago)
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The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Michael Shanks)
With permission, Mr Deputy Speaker, I would like to make a statement on the publication of the report from the National Energy System Operator following its review into the fire at the North Hyde substation on 20 March. NESO’s review was commissioned jointly by the Energy Secretary and Ofgem in the immediate aftermath of the fire, which disrupted power supply to over 70,000 customers, including, of course, Heathrow airport, which closed operations on 21 March. While power from the grid was restored quickly to customers, there were significant secondary impacts to the aviation sector due to the associated closure of Heathrow airport.
My right hon. Friend the Secretary of State for Transport made a statement to the House at the time, where she committed that the Government would update the House as soon as the relevant investigations had concluded. That is why I am making this statement before the House on the day that NESO’s report has been published.
Before I update the House on the key findings of the review, I reassure hon. Members that the Government are taking action in response to the report. We will urgently consider the findings of the review and have committed to publish a Government response that will set out a plan on how the issues identified will be addressed in order to improve our energy resilience.
Having reviewed the report, I am deeply concerned—I am sure hon. Members will agree—that known risks were not addressed by National Grid Electricity Transmission, a key operator of our electricity system. NGET’s own guidance is clear, and based on the elevated moisture samples that NGET took in 2018, the asset should have remained out of service until mitigating actions were put in place, or the asset should have been carefully monitored until it could be replaced. NGET failed to take action appropriate to the severity of the risk at North Hyde. That was most likely the cause of the catastrophic fire on 20 March.
I spoke to NGET this morning and made it clear that the findings are unacceptable and that action must be taken to ensure that maintenance work on critical assets is prioritised appropriately. Fire suppression systems must not be left inoperable.
I am pleased to see that the regulator is taking swift action in response to the findings, announcing today that it is opening an official enforcement investigation into NGET. Ofgem will consider any possible licence condition breaches relating to the development and maintenance of National Grid Electricity Transmission’s electricity system at North Hyde. I spoke with Ofgem yesterday to express my support for that investigation and the planned audit of National Grid’s critical substation assets. That will be essential to understanding any other potential risks on the network and ensuring that those are being mitigated appropriately.
The report also highlights that North Hyde substation, which was built in 1968, is subject to different design standards than newer sites that were built during the 1990s. There was not sufficient distance or a physical barrier between two transformers at North Hyde, which allowed the fire to spread. It is essential that we consider the potential risk created by differing design and standards across the electricity network, particularly as we move towards clean power 2030. That will be a key focus of the Government’s response.
My Department and Ofgem will hold NGET to account for its role in the incident at North Hyde, but the extent of the impact of the incident on Heathrow operations must also come into focus. Heathrow Airport Ltd commissioned its own independent review, the Kelly review, which was published on 28 May and investigated the circumstances that led to the airport ceasing operations for most of 21 March. The review highlighted several recommendations to further improve the resilience of the airport’s internal electricity network. Those align with NESO’s findings that there are options to improve Heathrow’s own power resilience, which is the responsibility of Heathrow and not National Grid, and reduce the risk of further disruption at this scale.
Heathrow benefits from three separate supply points to the electricity network. It is rare for any site to have such a resilient connection to the network. As no energy system can ever be free from disruption, this is an opportunity for Heathrow to consider investing in its internal electrical distribution network to take advantage of those multiple supply points. I welcome the continued effective collaboration between Heathrow and energy operators as part of the review. My Department and the Department for Transport will work to ensure that that collaboration continues across those critical sectors.
Although such incidents are rare and the UK has a robust and resilient system, there are always wider lessons to be learned. The majority of recommendations made by NESO in its report suggest potential improvements that could be considered by operators across the energy sector. In collaboration with NESO, Ofgem and other industry partners, my Department will ensure the delivery and implementation of those energy recommendations. However, the report findings are also applicable to wider Government policy on resilience, both in the energy sector and across other critical national infrastructure sectors.
Ensuring the protection and resilience of critical national infrastructure continues to be a key priority for Government, with action already being taken. The Government’s recently published 10-year infrastructure strategy committed to strengthening resilience standards across critical national infrastructure. Further, the Cabinet Office will imminently publish the UK Government resilience action plan, which will articulate Government’s new strategic approach to resilience and is the outcome of the resilience review announced by the Chancellor of the Duchy of Lancaster in this place last year.
My Department is already taking steps to enhance our current approach to the designation of critical national infrastructure in the energy sector. We recently introduced specific licence conditions that give NESO responsibility for data gathering and technical analysis to independently inform the Government’s decisions on the designation of CNI, ensuring our most critical infrastructure in the energy sector is always as resilient as possible. We will work with the Cabinet Office and wider Government to develop a full response to the North Hyde report and set out how we will tackle some of the cross-sector resilience challenges highlighted, particularly given the importance of the energy sector for the continued operation of so much of our critical national infrastructure.
I want to restate that Great Britain continues to have a resilient energy network. Even though incidents such as this are rare, it is essential that we learn the lessons to maintain and, where possible, improve our resilience. The Government response will set out our plans for how we will continue to do so.
I thank NESO for carrying out such a comprehensive review over the past three months. The report shows the value of learning from past emergencies such as this. NESO’s newly established functions in energy resilience will enable Government, the energy industry and the regulator to truly understand whole energy system risks and mitigations, proactively ensuring that Great Britain continues to have a reliable energy supply, which is critical to the whole of society. I commend this statement to the House.
Mr Deputy Speaker (Sir Roger Gale)
Before I call the shadow Secretary of State, may I take this opportunity to welcome her back to her place in the House?
Claire Coutinho (East Surrey) (Con)
Thank you, Mr Deputy Speaker. I feel older, wiser and significantly more sleep-deprived.
I thank the Minister for advance sight of his statement. I also thank NESO for its rapid work. The report is clear that there have been serious failings by National Grid to fix an issue that it knew about for seven years. The Minister is right; that is unacceptable. What is most important, though, is what happens now.
I have some questions for the Minister. First, who at National Grid made the decision to defer critical maintenance of the transformer in 2022? He said that he would hold them accountable, so how will he do that? He spoke about breaching licence conditions. What are the penalties for doing that and what accountability mechanisms will he use? Secondly, the report says that the North Hyde site did not meet modern standards on physical barriers between transformers. Can the Minister confirm he has asked National Grid to review substations with transformers built before the current standards were put in place? Thirdly, what steps will he take to look at the resilience of our energy system, particularly in the light of the heightened geopolitical risk that we all face?
The key message that we should take from the report on the Heathrow blackout is the importance of critical national infrastructure to our energy security and our national security. In that regard, it is the Secretary of State for Energy and Climate Change who is playing with fire. A week after the blackout hit Heathrow, Spain and Portugal gave us a stark warning of what happens when countries fail to protect their energy security: public transport down, payment systems down and millions of people unable to cook, travel or contact their families. Tragically, people lost their lives. In the case of North Hyde, the blackout affected schools, the London Underground, Hillingdon hospital and 70,000 customers, some of whom had to move out of their homes. That is the price we pay when we do not take energy security seriously. It is not a nice-to-have—energy is a basic need—and yet this Government are putting our energy at risk.
The national security strategy that the Government published just last week included 12 mentions of climate but not a single mention of the risk that China poses to our energy system. Last year, our intelligence services warned that Chinese state-sponsored hackers were working to disrupt and destroy critical infrastructure in the event of conflict, and yet the Secretary of State is rushing to make Britain dependent on Chinese solar panels, Chinese rare earths and Chinese batteries in just five years’ time. We have just seen China limit the export of critical minerals in its trade war with the US. We have seen kill switches found in Chinese inverters. The US intelligence services have warned us about the risk of surveillance devices in Chinese wind turbines.
I first wrote to the Secretary of State eight months ago, asking him to publish an assessment of what his targets mean for our reliance on Chinese imports. He has not even bothered to reply. If the Secretary of State wants to hand over the keys of our energy supply to the Chinese Communist party, he should come to this House and explain why.
We are lucky enough in this country to be surrounded by our own gas fields, but the Secretary of State does not care. This is a man who would rather import gas from Norway, from the very same fields in the North sea that he is banning Britain from using; who is pouring concrete down our gas wells; and who is blocking off any contingency plan that Britain might need in a crisis. I do not say this lightly, but this is a man who is putting our national security at risk. Today we are talking about the first transformer fire in a decade in this country and he did not even bother to turn up. That is the problem. The Secretary of State might prefer to be in Brazil, Baku, Beijing or wherever he is today, but he should be here to explain himself, because as the former head of MI6 said, he is pursuing an energy policy that is “completely crazy” when it comes to national security.
I want clean energy from nuclear, from small modular reactors and from the next generation of British innovation, but first and foremost I want energy that keeps the lights on and keeps bills down. This Government are going to leave us completely reliant on foreign imports: from China, from Norway, from Qatar—from anywhere as long as it is not Britain. NESO and Ofgem will do their work, but the Minister must do his work too. Alongside the work of the North Hyde report, can he confirm that he will come back and update the House on his plans to protect the energy resilience of this country?
Michael Shanks
I was going to start—and I will, regardless of the rest of that speech—by warmly welcoming the right hon. Lady back to her place as the shadow Secretary of State. I will miss sparring with my Scottish colleague, the hon. Member for West Aberdeenshire and Kincardine (Andrew Bowie), although I am sure we will still have opportunities to do so. The right hon. Lady might come to miss the lack of sleep at home compared with the noise in this place, but she is very welcome back. She has obviously taken the last few months to write a wrap-up speech on a whole range of issues, and I am glad to give her the opportunity to pontificate here on many of those things, but let me stick to the questions that related to the statement that I have delivered to the House today.
The right hon. Lady asked about the role that National Grid has played. Ofgem has opened an enforcement investigation into this incident to get to the bottom of exactly what National Grid has or has not done, and whether there are possible breaches of licence. That investigation should now take its course. There are clearly serious questions to answer, and that is exactly the point that I put to National Grid today. I have asked for an immediate response on what action it is taking and for assurances that there are no further maintenance backlogs that it has not acted on, and I expect that by the end of this week. Ofgem has also instructed a wider audit of maintenance work across the energy system, which will identify if there are any similar issues. On the point about being held accountable, clearly I am going to wait for the outcome of Ofgem’s investigation. It is the responsibility of Ofgem as the regulator to determine whether National Grid is in breach of any of its licence conditions and what the appropriate action should be if it is. I will wait for those findings to come through.
The right hon. Lady raised an important point about the physical barriers. Clearly there are differences because the time at which some of our infrastructure was built and the different standards that were in place at different times. We need to make a wider review to see what is actually possible with some of this infrastructure; it was not always possible to build to the standards we now expect, but everything that is being built now is being built to the highest standards. I want the same assurances that she has called for: to know that anything that was built previously is safe.
On the wider resilience questions, I am not going to get into a back-and-forward on the frankly quite ludicrous claims that the right hon. Lady made. I hope this is not an indication of the tone we can expect in the years ahead, because there are some difficult decisions for us all to wrestle with. There is the really important question about delivering our energy security in, as she says, an increasingly uncertain world. We are sprinting towards clean power to remove the volatility of fossil fuels from our system. She opposes all of that investment. There is also a critical role to play in upgrading the network infrastructure across the country, which her party also opposes.
There are some really searching questions for the Conservatives—who were, of course, in charge of this infrastructure for 14 years—about their role and what part they want to play. It is easy to shout from the sidelines with accusations. It is far more useful and important for a party that was in government for 14 years and is now the official Opposition to come up with some credible questions about how we deliver the energy system of the future. We are going to get on with delivering it.
Mr Deputy Speaker (Sir Roger Gale)
I call the Chair of the Energy Security and Net Zero Committee.
Bill Esterson (Sefton Central) (Lab)
It beggars belief that no action was taken after the risks were identified in 2018 at the North Hyde substation. The NESO report highlights a lack of information-sharing internally at National Grid and externally between organisations. It draws attention to the energy companies not knowing that Heathrow had a 10 to 12-hour arrangement for switching supply, and that National Grid did not appear to know that Heathrow was a customer of the substation. It is a matter of immense luck that the explosion and fire took place at 11 o’clock at night and that no one was present; otherwise, this would have been a very different discussion, with people having died. The Minister highlighted the unacceptable lack of action by National Grid. Will he ensure proper oversight and information sharing internally at National Grid and externally between organisations, so that we have safety and resilience in our national energy system, where it applies to critical national infrastructure and beyond?
Michael Shanks
First, on the point about joining up, my hon. Friend is absolutely right. The response that I have seen from National Grid identifies that as one of the points it will take away. It will look at information sharing and joining up the data in various systems, and at how to ensure that is followed through on. It is important to say that there is also learning, not just for National Grid but across the energy system, through looking at what other transmission owners do and at what the Government do around sharing information where we can. There is a lot of learning and a lot of recommendations will be taken forward.
On the question of Heathrow, much was identified in the Kelly review, which looked specifically at these operations. On the question of whether there was a single point of failure at Heathrow, the airport is one of the biggest consumers of electricity in the country and one of our most important pieces of critical national infrastructure. It is important that those at Heathrow reflect on this report and take some lessons from it.
The report has shown—this is a lesson for everyone—the importance of investing in electricity resilience and preparing for the worst, even if we think there is a low chance of the worst actually happening. I completely agree with my hon. Friend’s final point: it is in all our interests to spend time, effort and investment in making sure that our energy system continues to be as resilient as possible.
Luke Taylor (Sutton and Cheam) (LD)
This report is an utterly damning assessment of our national resilience, this time through decay but also through a lack of readiness as the climate crisis changes the dynamics, with old equipment operating at higher temperatures just as the loads for climate control and air conditioning are at their peak. The British people will rightly be alarmed that the problem that caused this substation failure was known as long ago as 2018, but there is a much wider point here. Beyond the technicalities of this failure, the resilience of critical national infrastructure has been neglected for far too long.
As an engineer, I came to this place for precisely this reason: we are too short-termist and too narrow in our vision. We cannot possibly expect to remain a world leader in infrastructure if we cannot future-proof and seriously invest in the resilience of our assets. Building and maintaining infrastructure might not get pulses racing. There is no ribbon to cut when something just continues to operate efficiently, but that long-termism is an ideology that we should all get behind if we are serious about Britain’s future. The report outlined the many missed opportunities to fix the issues at the substation, and we will all have to look seriously into Ofgem’s consequential investigation into National Grid once it is published.
This is not just about grid resilience, though. This time it was a fire caused by a fault, but next time it might be a deliberate cyber-attack or an act of terrorism, which could have a more disastrous impact. We must look beyond the short term, with a strategic and long-term plan to join up national infrastructure and make it safe and reliable for all. The Government must bring about a strategy and act quickly to review the resilience of all similar assets, including every UK airport—they are all critical to our national economy and our society.
With that in mind, can the Minister confirm whether an assessment has been made of the likelihood of a repeat of this incident, at Heathrow and at all other pieces of critical national infrastructure? Also, are the Government taking this opportunity to finally pick up the National Infrastructure Commission reports from 2020 and 2023, which were ignored by the previous Government, and the report from 2024, which was not implemented quickly enough, and to implement standards and frameworks for resilience in key sectors such as aviation, telecoms, water and energy, which will future-proof our ageing infrastructure to make it reliable and safe?
Michael Shanks
The hon. Gentleman is absolutely right to broaden this beyond the electricity system and North Hyde to take in wider questions around critical national infrastructure. He is also right about investing in the future. I always think that grids and networks set the heart racing a little faster, but that is just me. This is important, and this Government are investing in this infrastructure; just this week Ofgem announced record investment in it. I hope, given the importance of this statement, that Members on all sides of the House will recognise the importance of that investment.
On the points around wider resilience, the Cabinet Office is leading on trying to bring together what I think it is fair to say has been too fragmented a landscape in resilience across Government. My Department is responsible for a number of key risks in the national risk register. It is right that the lead Departments have expertise in certain areas, but if that information is not shared coherently across Government, we increase the chance of not getting the answers right. A lot of work is being done in that regard. We are also looking at how we share data across all sectors of critical national infrastructure within Government. We will say more about that in the resilience action plan, which the Cabinet Office is working on at the moment. Of course, the 10-year infrastructure strategy is also about how we will invest for the long term in the infrastructure that keeps our country running.
Mr Deputy Speaker (Sir Roger Gale)
I call the Chair of the Science, Innovation and Technology Committee.
Dame Chi Onwurah (Newcastle upon Tyne Central and West) (Lab)
Speaking as a chartered electrical engineer and as the Chair of the Science, Innovation and Technology Committee, I am absolutely amazed that such an important and large part of our critical national infrastructure in the National Grid was not properly maintained for seven years and that Heathrow—the busiest airport in the world—had a single point of failure. The Minister has outlined some of the processes and procedures that will follow, but will he say how he intends to improve the standards of engineering maintenance culture and excellence in our critical national infrastructure, which have clearly been allowed to fall significantly under successive Conservative Governments?
Michael Shanks
First, it is important to say that Heathrow had multiple routes into its electricity network—three in fact—which is unique. This report and the processes identified in the Kelly review will give Heathrow Airport Ltd pause for thought on what it needs to do on how its network is configured and how it can adapt in such situations. Of course, this is an incredibly rare circumstance, but the whole point of resilience planning is to plan for eventualities that we think are extremely unlikely to happen but that would have a significant impact if they did. Heathrow closing is clearly one such circumstance.
Secondly, my hon. Friend is right to highlight standards and systems. I want to be careful not to prejudge the review that Ofgem has announced, because there is something to be said about standards changing over time. Maintenance backlogs obviously then have to be met, and if the issue is that maintenance that should have been carried out has not been, that is clearly an issue we will take forward. But if it is just that pieces of infrastructure were subject to standards that have changed over time, we have a wider question of how we can adapt some of that infrastructure for future standards. We will look at all those points. I repeat to the House that our electricity system is incredibly robust in its resilience. We need to do everything possible to make it even more robust, so that such instances do not have quite so significant an impact as this one did.
Sir Bernard Jenkin (Harwich and North Essex) (Con)
May I follow up on that and ask the Minister whether he will undertake to have a full, frank and open discussion with the relevant directorates within his Department about what it has learned from this disaster? In particular, what exercises, tabletop or virtual, must be undertaken to practise resilience in the event of future such failures? My right hon. Friend the Member for East Surrey (Claire Coutinho) is right to warn about the increasing fragility of energy security in this country. There is plenty of informed opinion that supports that view.
Michael Shanks
I have spoken to colleagues across the Department on these questions. They are rightly constantly looking at how we review our processes. Importantly, they are also working outside of Government and trying to break down some of the silos, so we are co-ordinating with different parts of Government that have different responsibilities. But the right hon. Member is right, and we will constantly push to do more of that.
The question of exercises is important. We had a really significant exercise under the previous Government, which looked at the Government’s response to a significant power outage. We are putting in place many of the recommendations from that exercise, which are important to take forward, but more exercise is useful.
I would slightly separate the response from the infrastructure itself failing, which is what we need to investigate quickly. The Kelly review set out that Heathrow’s response to the incident was in line with its response plan. Although the outcome was clearly not what any of us would have wanted, it goes to a wider question about the infrastructure at Heathrow, not so much the actual plan put in place when the incident did occur. Those are two slightly different things, but they are both extremely important.
Ruth Cadbury (Brentford and Isleworth) (Lab)
I, too, thank the Minister for making this statement, and NESO for this damning report. Heathrow Airport Ltd’s power set-up internally virtually guarantees hours of disruption in a scenario like this. On 21 March, that meant over a quarter of a million passengers were affected; airlines lost significant revenue, for which they will not be compensated; and countless time-critical freight loads were also affected. Yet in Spain and Portugal, airports did not close when those countries had full power outages. By any definition, surely Heathrow airport counts as critical national infrastructure as it undeniably requires operational continuity. I note that the Minister confirmed the airport’s responsibility for its own power resilience, but does the Government have a role in ensuring that end-to-end power supply to critical national infrastructure is robust and that risks like power outages are managed adequately?
Michael Shanks
I thank my hon. Friend for the question and for her thanks to NESO, which has done a comprehensive job on this report in a fairly short space of time. There are lessons to be learned for Heathrow, and it will be learning those lessons. I am in communication with the Transport Secretary, who of course has immediate responsibility for Heathrow as a piece of critical national transport infrastructure. It is worth saying that its back-up generators did operate in the way they were supposed to, but Heathrow is a huge piece of infrastructure, and it is not intended that those back-up processes would continue to run normal operations in a huge airport beyond the immediate situation of being able to land planes safely and ensuring other critical systems within the airport.
The question Heathrow has to answer is on having three points of electricity generation coming into the airport. It clearly needs to look at the way the network is configured and take forward the wider question of its resilience and ability to adapt to such situations. The Government have an incredibly important role, as my hon. Friend rightly says, and we will do all we can to ensure that National Grid is doing its bit, that the distribution operator is doing what it needs to do, and that Heathrow Airport Ltd is also meeting the expectations that we would expect from our most important piece of transport infrastructure.
Graham Leadbitter (Moray West, Nairn and Strathspey) (SNP)
The report by NESO has clearly uncovered serious structural failings at National Grid, but let us not forget that the Government’s response to the outage was severely wanting as well. On the Monday following the outage, the Transport Secretary confirmed that she was relying on the contents of a three-day-old conversation with Heathrow, with no assessment from the Government and no conversations with National Grid. Can the Secretary of State assure the House that sufficient lessons are being learned in Government to ensure that, when the power supply to critical national infrastructure is affected in the future, the Government are not left without answers again? Additionally, Members will understand the phrase “Quis custodiet ipsos custodes?”, meaning “Who guards the guards?” Why did it take such a serious outage for the National Grid to be audited like this? Surely better oversight may have identified the shockingly poor risk management.
Michael Shanks
Since I did not realise in my statement earlier this week that the hon. Gentleman is now the SNP’s energy spokesperson, I welcome him to his place—I hope he will bring the same customary sunshine that his predecessor in the role did to our deliberations in this place.
On the incident itself, clearly there are lessons to be learned from the way the energy infrastructure worked on 20 and 21 March, and for Heathrow on the configuration of its internal network and how that worked. The incident itself is clearly one we want to avoid at all costs, but actually the process was carried out safely, passengers were informed and the disruption was kept to an absolute minimum, but if an airport such as Heathrow closes, there will be disruption. I am not sure that I take the hon. Gentleman’s criticism of the handling of the incident. He is right on the broader point about how we ensure we are regularly auditing the processes of maintenance work going forward. The three transmission owners in the UK have a responsibility for doing that, and that is regulated by Ofgem, which regularly checks on this. The second part of Ofgem’s review announced today will look specifically at whether those maintenance backlogs and any other long-standing issues have been resolved, and look at the lessons we can learn on ensuring that those processes actually happen and that we do not just have things sitting on a list but not actually delivered.
John McDonnell (Hayes and Harlington) (Ind)
The substation is located in my constituency and I was there on the day the incident happened. It was a massive fire and 200 of my constituents were evacuated from their homes during the night, and there was smoke flowing down the street. It could have been a much bigger disaster had it not been for the courageous firefighters who went on to the site, the help they got from the council, the back-up services and the NHS. I place on record the House’s congratulations to them and our admiration for what they did.
My constituents want to be reassured, but the report demonstrates a catalogue of failure. The problem was identified in 2018—we are now seven years on. I welcome the right hon. Member for East Surrey (Claire Coutinho) back to her place, but sleep deprivation can affect the memory: her party was in Government for most of that period.
I am worried that sites like this could be easily targeted by terrorist activity, so we need a process of reassurance. The recommendations set out in the review, about what we do from here to ensure resilience, have to take into account that the Government have a role in driving through the programme. We have to recognise that we cannot rely on some of the other agencies without a real Government thrust of leadership, but also securing accountability, because I do not want other areas to experience what we experienced that night.
Michael Shanks
I thank the right hon. Gentleman for his remarks and for the way he made them. He is absolutely right to recognise the heroic role that our emergency services played on the night—I am sorry that I did not say that at the start of my statement—as well as the engineers, who worked in incredibly hard in difficult circumstances in the hours that followed the fire to try to get services reconnected as quickly as possible. There are very serious questions to answer, and I hope that came through in my statement—it certainly came through in the conversation I had with National Grid earlier. We are seeking urgent assurances that the work that should have been done is being done, and that there are no other similar situations. Ofgem is taking the matter seriously, with two reviews, one into National Grid and the other into the wider energy system, to see if there are any further lessons to learn.
However, the right hon. Gentleman is right and I completely agree with his point that the Government need to be front-footed and take a leadership role in driving the work forward: we cannot leave it to individual companies to mark their own homework. We are doing that partly by bringing together our resilience work across Government, and I will soon be chairing a new group that brings together everyone who has responsibility for critical national infrastructure in our energy system, to ensure that energy security, cyber-security and other threats to our infrastructure are taken seriously, so that action is taken at the highest level of Government to ensure that we do not have a repeat of the incident in future.
Richard Tice (Boston and Skegness) (Reform)
The substation by Heathrow is probably one of the most important in the country, yet this damning report says that there was a “catastrophic failure” of maintenance. Given that National Grid also failed to recognise how close we came to a national blackout earlier this year, we have to ask: is National Grid grossly negligent and does the Minister still have full confidence in its management?
Michael Shanks
The hon. Gentleman may be confusing two things. The National Energy System Operator is no longer part of National Grid, as it was made into a publicly owned company by the previous Government, which was introduced by us when we came into Government. So the National Energy System Operator is responsible for managing the energy system and it is different from National Grid, which is a private company that operates the electricity network in England, so those two organisations are slightly different. Of course, he is right to highlight the scale of the failure. That is why I have given a statement today and why a number of serious actions are being taken, which will be followed up in a serious way.
We did not come close to a blackout earlier this year. It is important to repeat that, because there is a lot of misinformation about a particular set of statistics that were misunderstood by some people. We have never come close to that and we have never had a national power outage in our history. The aim of all the work that we do is to build as safe and resilient an electricity system as we can, so that when circumstances like this happen—because fires and accidents do happen—we will have done everything that we could have done to have mitigations in place. When such a fault is down to a failure of maintenance, we must ensure that is taken account of and never happens again.
Tom Collins (Worcester) (Lab)
Like any serious incident, this one had multiple causes, both operational and relating to design. I urge the Minister to ensure that the lessons learned are applied not only to electricity transmission and distribution sites, but to energy storage sites, for which we have an absence of standards. He rightly mentioned the need for redundancy and flexibility in our electricity systems, and the need to avoid having single points of failure. That applies well to large pieces of essential infrastructure, but is harder with our distributed critical infrastructure, for example around telecommunications, so we need diversity in our energy system as a whole. Does he agree that in our energy system, we need widespread availability from multiple parts of the energy sector, with electricity being backed up by, for example, hydrogen and ammonia?
Michael Shanks
My hon. Friend always reminds me how much he knows about many of these issues; it is hugely welcome. He is right: there are wider lessons to be learned across the system, and not just for large critical national infrastructure. As he says, we have a grid that has many more power stations, of different forms, than we have ever had in the past. There are also lessons to be learned for storage, which is rightly becoming increasingly important for our energy mix.
On his wider point about telecoms, in the wake of the storms earlier this year, we took a number of actions to make our electricity system more resilient. Our use of telecommunications equipment in this country is changing. Very few people now have access to traditional copper wire phones, so when telecoms equipment goes down, there is an immediate significant impact on people’s lives. I recently met the Minister for Data Protection and Telecoms in the Department for Science, Innovation and Technology to discuss this issue. We will work with Ofcom and the operators to ensure that the telecoms infrastructure is as resilient as it can be.
Prax Lindsey Oil Refinery: Contingent Liabilities
Michael Shanks Excerpts(1 month ago)
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The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Michael Shanks)
Today I am notifying the House of the steps taken by the Government with regard to the insolvency of Prax Lindsey oil refinery and related subsidiaries.
We know that this will be incredibly worrying news for workers at the refinery, as well as the wider community in Lincolnshire. The Government stand with the workers, their families and the community at this difficult time. Given the Energy Security and Net Zero Committee’s interest in this, we are updating on the action that the Government are taking.
There have been long-standing issues at the company since it was acquired in 2021. Prax Lindsey oil refinery’s financial reports indicated that it has recorded losses of around £75 million up to the financial year ending February 2024 since its acquisition in 2021.
At the end of April, the Government were informed of ongoing commercial difficulties. We repeatedly asked the company what the financial gap was, to work out whether the Government could help bridge that gap, but the company was unable to share that basic information.
As a result of today’s decision by the company, an official receiver and an administrator have been appointed to take over different parts of the business. The Government will ensure supplies are maintained, protect our energy security, and do everything we can to support workers.
The company has left the Government with very little time to act. The Government are supporting the official receiver to carry out his statutory duties, including managing the situation on the Prax Lindsey site to determine next steps. This will include urgently reporting back on all potential uses of the site, prior to a wind-down of the refinery.
As to the wider business, there are extensive operational and financing interdependencies within the Prax Group which mean that the refinery’s parent company, State Oil Ltd, has also been placed into administration today along with a small number of other group entities.
However, other parts of the group—including the group’s retail business in the UK, which provides oil trucks, logistics and forecourt services at a number of filling stations—have not gone into administration. The retail business is profitable, and is not solely supplied with fuels from the Lindsey refinery. This means that alternative supplies for the group’s retail network can be sourced as necessary and the administrators will seek to do that and trade the business as normal while they look to secure a prompt sale of the retail operation in due course.
The Energy Secretary has written to the Insolvency Service to demand an immediate investigation into the conduct of the directors and the circumstances surrounding this insolvency.
The Government’s immediate priority is to ensure that affected workers are supported through this difficult time. We will urgently work with the company and trade unions to explore what further support can be offered for workers.
I have laid a departmental minute today notifying the House of two contingent liabilities associated with the Government’s intervention. I regret that, due to compressed timings and the rapid response the Government have had to prepare, I have not been able to follow the usual notice period of 14 parliamentary sitting days. These liabilities relate to:
Legal indemnity
A legal indemnity has been offered to the official receiver to protect it against financial loss or legal claims incurred in the course of carrying out its statutory functions. The indemnity is a standard mechanism in high-risk or complex insolvencies where appointees are expected to act in the national interest without undue risk to the appointees. Crystallisation is expected to be limited.
Operating cost support
The Government will provide short-term funding to cover the essential operating costs of the refinery. This is required to maintain safe site operations to ensure our energy security during the initial phase of liquidation and to facilitate a controlled shut down or potential sale as a going concern. The funding acts as working capital to ensure the secure transition of the site as well as allowing the fuel sector enough time to adapt supply chains and commercial arrangements so that fuel remains available to end users. The final operating cost support will depend on market conditions and the strategy adopted by the official receiver, and this will be subject to close scrutiny and governance by the Government and the insolvency office holders.
Together, these contingent liabilities are necessary to provide the official receiver and special manager with the necessary tools to fulfil their duties in a beneficial way for creditors and taxpayers. If the liability is called, provision for any payment will be sought through the normal supply procedure. The Treasury has approved the proposal in principle.
I will update Parliament on any developments in this contingent liability.
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Solar Road Map
Michael Shanks Excerpts(1 month ago)
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The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Michael Shanks)
I am tabling this statement to inform Members of the publication of the solar road map.
The Government are committed to delivering a clean, affordable and secure energy system by 2030, and accelerating progress towards net zero. Solar is a mature and cheap source of power, which will play a crucial role in decarbonising our electricity and ensuring that Britain is insulated from volatile global gas prices.
Making Britain a clean energy superpower is one of the Government’s five missions. The clean power action plan, published in December, set a target for 45 to 47 GW of solar power by 2030. This mission is about driving economic growth as well as clean power. By 2030, up to 35,000 UK jobs could be supported by the solar sector, up from around 17,000 today. The Government will work closely with industry to ramp up generation capacity. Today’s publication fires the starting pistol on five years of rapid deployment.
The solar road map— https://www.gov.uk/government/publications/solar-roadmap —begins with a statistical analysis of likely deployment scenarios. It projects that the clean power action plan ambition of 45 to 47 GW is achievable, but that significant action will be required to facilitate the necessary deployment. It estimates that ground mount solar alone could power around 9 million homes. It estimates that—even in these ambitious scenarios—solar would occupy up to only 0.4% of total UK land.
The following chapters deal with salient issues for the solar sector. The first of these is on rooftop solar. It sets out actions which will enable Government and industry to unleash a rooftop revolution. This includes information on the role of Great British Energy, the warm homes plan, the future homes and buildings standards, a call for evidence about solar car parks, and tackling contractual and financial barriers to rooftop solar installations.
The electricity networks chapter addresses the lengthy and complicated process of securing a grid connection for solar. It highlights the impact of the Government’s radical connections reforms and Ofgem’s end-to-end review of connections. It also includes a range of actions to remove barriers for new-build and domestic solar, and to standardise service levels across the sector.
The supply chain and innovation chapter focuses on making the solar supply chain resilient, diverse, and sustainable. It provides details of legislation and guidance to ensure businesses take action against modern slavery in the supply chain. It also explains our support for engagement with supply chain standards, such as the solar stewardship initiative. The chapter also details how the Government intend to encourage the development and commercialisation of innovative solar technologies.
The skills chapter sets out the action required to increase the number of solar jobs in the UK. These include recommendations on improving understanding of current training opportunities, launching regional careers fairs, and clarifying the routes to competency for solar installers.
The planning and support schemes chapter deals with actions to remove other barriers, including planning reform; reform of financial support mechanisms; and support for floating solar. The final chapter, on working together to deliver our ambition, identifies the different stakeholders who will contribute to delivering 45 to 47 GW of solar power. It discusses the Government’s proposals to make it mandatory for developers to provide community benefit funds for the local areas hosting new infrastructure.
Finally, today we also announce that a Solar Council will be established to monitor delivery of the Roadmap’s actions, and to provide a forum for industry representatives to engage directly with Ministers. Scaling up solar power will be critical to the success of the Government’s clean energy mission. We hope that today’s publication gives a boost to industry as they help us reduce our dependence on volatile fossil fuels and improve our energy security.
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