Government Support for Business
Nadhim Zahawi Excerpts(4 years, 2 months ago)
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The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Nadhim Zahawi)
It is an absolute pleasure to serve under your chairmanship, Mr Bone. I thank my hon. Friends the Members for Arundel and South Downs (Andrew Griffith) and for North Norfolk (Duncan Baker). The quality of Conservative Back-Bench Members is clearly incredibly high. If the subs bench is of this quality, it keeps Ministers on their toes to keep performing. That is one great outcome of the general election where the Prime Minister Boris Johnson led us to that wonderful victory.
I congratulate my hon. Friend the Member for Arundel and South Downs on securing this debate. I assure the House that the Government are committed to supporting business. Of course, seizing opportunities now that we have left the EU is absolutely crucial to that. As my hon. Friend rightly pointed out, we will soon have a new relationship with our European friends, inspired by our shared history and values. We will have recovered our economic and political independence, which will enable us to control our own laws and of course our own trade—that is clearly what he is so passionate about. We will be able to strike new trade deals with partners around the world, helping our small and large businesses to export and grow on the global stage.
Hon. Members do not need to take my word for it, or that of my hon. Friend. The Global Entrepreneurship and Development Institute ranks the UK as the second most entrepreneurial economy in Europe and the fourth most entrepreneurial in the world. We rank higher than all other G7 countries except Canada on the World Bank’s “starting a business” list, although I take on board my hon. Friend’s comments about the ease of taxation, where we do less well. As someone who has started and run my own business, I can say that the UK is a great place to do so.
As my hon. Friend points out, we should remove friction and barriers to doing business and support our companies and entrepreneurs to succeed. That is why no permission is required to establish a business in the United Kingdom, there are no minimum capital requirements, and new companies can be registered online within just 24 hours for as little as £12. That is why, as my hon. Friend mentioned, only last week we launched a new website, businesssupport.gov.uk, which brings together information, support and advice for small businesses. It is why programmes operated by the Government-owned British Business Bank are supporting firms with finance. As of December 2019, more than £7 billion has been delivered to support over 91,000 small businesses in the UK, including £730,000 to 76 entrepreneurs in my hon. Friend’s constituency. Given his energy and how assiduous he is, I am sure he will endeavour to meet each and every one of the 76 beneficiaries of that support.
We are working together across Government to create smoother processes and the best environments for business, and I am pleased to say that we have already gone a long way towards integrating the customer interface with Companies House and HMRC. The streamlined company registration service was launched in 2018; it allows new companies to incorporate and to register for PAYE and corporation tax through a single portal. As my hon. Friend rightly reminded us, there is undoubtedly more work to be done to reduce the burden of tax, but HMRC is making progress, including through establishing a new VAT registration service.
We have also committed to a fundamental review of the business rates system. My hon. Friend the Member for North Norfolk quite rightly highlighted this issue, and challenge is important in this area. He is right to say that we need a holistic approach. The Treasury will provide more details about the business rates review in due course, but we have already provided reforms and reliefs to business rates worth £13 billion over the next five years. The Prime Minister has announced a towns fund of over £3.5 billion, including an accelerated £1 billion to support local areas in England to renew and reshape town centres and high streets. Through the taskforce giving expert advice on how to adapt and thrive, we are supporting local leaders and encouraging them to think differently about their high streets and to discover their unique selling points.
Andrew Griffith
May I contrast the Minister’s comprehensive programme of activity that is designed to improve the lot of small businesses in this country with the paucity of attendance on the Opposition Benches? Not a single member of any of the Opposition parties has deigned to grace us with their presence this morning.
Nadhim Zahawi
It is a shame and disappointing not to see any representation.
As part of my personal mission to improve the business environment, I am working across Government, including with the Department of Health and Social Care, on life sciences, which my hon. Friend described as one of the real future growth areas for jobs in our country, supporting collaboration across industry, Government and the NHS. With the Ministry of Housing, Communities and Local Government, we are developing plans to level up the regions across our great nation, with business and the economy at the heart of our plans.
My hon. Friend made an astute point about the importance of regulation and broadband access to business. Our pioneering regulatory regime has made the UK the go-to location for science, research and innovation for decades, and we are absolutely committed to learning from international best practice. The Better Regulation Executive has recently invited the OECD to undertake a review of our international regulatory co-operation, which will be published soon, but my hon. Friend makes a good point about getting them on an aeroplane to visit places such as Singapore or, dare I say, just across the channel in France. We are also committed to delivering nationwide coverage of gigabit-capable networks as soon as possible. The Prime Minister made that promise during the election and it was delivered as soon as he was returned to office, with £5 billion of public funding to close the digital divide and ensure that rural areas such as my constituency of Stratford-on-Avon and that of my hon. Friend the Member for Arundel and South Downs are not left behind.
As well as ensuring businesses across the country have the conditions they need to thrive, we are supporting sectors to ensure UK leadership in the industries of the future—as my hon. Friend points out, they are critical. Our study into tech competitiveness is due to report to Ministers this spring. We are supporting quantum with initiatives such as the quantum technologies challenge, providing up to £153 million of innovation funding for industry-led activities. The UK National Quantum Technologies Programme is set to invest over £1 billion of public and private investment over its lifetime.
We are also supporting life sciences, making a huge difference to people’s lives and to the NHS and how it delivers for people. Life sciences is an area of UK excellence and personal passion for me, with almost 6,000 businesses, 250,000 people employed and annual turnover of £74 billion. The Government have invested around £1 billion in a host of ambitious life sciences initiatives, with around a further £3 billion pledged by industry, including through our life sciences sector deal, which is part of the industrial strategy. That is one of 11 deals to drive productivity, innovation and growth across 10 sectors in the UK, from artificial intelligence to offshore wind, including a combined investment of £3 billion. Today we account for 36% of all offshore wind production on this planet, and we plan to go even further. That is this Government’s ambition, and that is what we will do.
My hon. Friend the Member for North Norfolk spoke about the high street. We are committed to conducting the review that I talked about earlier, but the reforms have already delivered the £13 billion that I mentioned. Although I will not deny that there are still challenges ahead for the high street and for small businesses, there are also fantastic opportunities. We talked about the towns fund, but local leaders need to be innovative. I see that in some local authorities that are returning people to live on our high streets. For far too long, retailers took on leases on our high street but left the upper parts vacant. We need to do much more to encourage people to live and work on our high streets in order to revive them; if people are living there, they will shop there and do many other things. I see it in my high street in Stratford-on-Avon, where we are beginning to think innovatively about how we deliver that—for example, with Shakespeare’s school, the King Edward VI School, where the great bard studied and learnt his craft. We have been looking at how we bring international students into some of the vacant properties to study over longer periods in the summer. Again, that would help the high street to deliver.
I thank my hon. Friend the Member for Arundel and South Downs for securing the debate, and I wish we had a lot longer to debate this issue. We need to ensure that—across our country, whether it is the Scottish Government or our Labour Opposition—we take business seriously. Ultimately, it is the lifeblood of the British economy.
Question put and agreed to.
Nuclear Energy Policy: Climate Change
Nadhim Zahawi Excerpts(4 years, 3 months ago)
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The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Nadhim Zahawi)
I congratulate my hon. Friend the Member for Ynys Môn (Virginia Crosbie) not only on securing this evening’s debate, but on her fantastic recent election result. I thank colleagues who have made interventions—the hon. Member for Strangford (Jim Shannon), my hon. Friend the Member for South Ribble (Katherine Fletcher) and the hon. Members for Warrington North (Charlotte Nichols) and for Hartlepool (Mike Hill). When the Cabinet went to Sunderland, the Prime Minister met an apprentice from Hartlepool. With regard to the point made by my hon. Friend the Member for South Ribble, it is not just about apprentices; it is about skilled workers across the country, including in the north-west arc, dating all the way back, Mr Speaker, to 1956.
Nadhim Zahawi
Quite right, Sir. It has been over three decades since Ynys Môn elected a Conservative Member of Parliament and I look forward to working with her over the coming years to ensure that this Government deliver for the people of her constituency and across the entire region of north Wales.
I am pleased that my hon. Friend has raised the important issue of nuclear energy, and I am eager to speak to her and the House this evening about the huge number of benefits that the UK expects to receive as a result of the Government’s commitment to the sector. I am grateful to the Secretary of State for Work and Pensions, my right hon. Friend the Member for Suffolk Coastal (Dr Coffey), for her presence. She, too, takes an eager interest in nuclear power, not only because of her constituency and her constituents’ needs, but for the wellbeing of the energy sector nationally.
New nuclear is likely to have a significant role to play in reducing greenhouse gas emissions to net zero by 2050. In September 2016, we gave the go-ahead to the first new nuclear power station in a generation, at Hinkley Point C; and in June 2018 we committed £200 million through our landmark nuclear sector deal, which includes millions of pounds for advanced nuclear technologies. The Government understand the important role that nuclear plays, and will continue to play, in our economy. That role includes ensuring that local and national benefits are realised, whether through increased employment opportunities or improvements in skills.
As my hon. Friend the Member for Ynys Môn reminded us, on 27 June 2019 the UK Government set a legally binding target to achieve net zero greenhouse gas emissions from across the whole UK economy by 2050. We were the first major economy in the world—followed by France and the rest of the EU—to legislate for net zero, and we want to deliver our commitments in a way that maximises the economic benefits of the transition to net zero. Between 1990 and 2017, we reduced emissions by more than 40% while at the same time growing our economy by more than two thirds, decarbonising our economy faster than any other G20 country. The net zero target requires us to build on that progress by transforming the whole of our economy and, of course, changing the culture in our society—our homes, our transport, our businesses and how we generate and use energy.
I thank my hon. Friend for talking about the energy White Paper. It will form a key part of our journey to net zero. To answer her question about its publication date, I can inform her that the Secretary of State has stated that she intends to publish the energy White Paper in the first quarter of this year. The White Paper will set out a clear, decisive strategy—a strategic approach to decarbonising energy, driving up clean growth opportunities and demonstrating international leadership in the build-up to COP26 at the end of the year. I am sure we are all delighted that COP26 is to be hosted in the great Scottish city of Glasgow.
Net zero is not just good for the environment; it is good business. It is already abundantly clear, however, that a substantial increase in low-carbon generation will be needed to reach net zero by 2050. Nuclear will have an important role to play in the UK’s future energy mix, providing firm low-carbon power and complementing variable renewable generation. Britain was the world’s first civil nuclear nation, and nuclear energy has powered homes and businesses in this country for more than 60 years. There are currently 15 nuclear reactors operating at eight sites throughout the UK, and they provide a fifth of our electricity. In 2016, the Government gave the go-ahead for the first new nuclear power station in a generation, at Hinkley Point C in Somerset. Once operational, Hinkley will provide 3.2 GW of secure, low-carbon electricity for around 60 years, meeting an estimated 7% of the UK’s current electricity requirements. To put that another way, it will power nearly 6 million British homes—twice as many homes as there are in London.
I recently had the pleasure of visiting the Hinkley site, and it was incredible to see the sheer scale of the endeavour that is being undertaken. There has been significant progress at the site; in December, the developer announced that all key milestones for 2019 had been achieved. Those included the successful delivery of J-zero for the first reactor, which marked the point at which the foundations for unit 1 were complete and the above-ground work could commence. They also included the first big lift for Big Carl—who I met—the world’s largest land-based crane, which towers 250 metres over the site. In one single lift, it can lift the equivalent weight of 5,000 shire horses, or of two A380s. It is a remarkable piece of engineering. On 18 December, engineers at Hinkley worked through the night to lift a 170 tonne part of the reactor’s steel containment liner into place, and it was fantastic to see the results at first hand.
During its construction and operation, Hinkley Point C will provide the local region, as well as the entirety of the UK, with economic benefits. In July 2018, the Government published “Hinkley Point C: wider benefits realisation plan”. The plan, produced with support from EDF Energy, sets out how the wider benefits of the project will be delivered. For example, Hinkley Point C is expected to provide more than 25,000 new employment opportunities and up to 64% of the value of construction contracts to UK-registered companies.
Jim Shannon
During the previous Parliament, I met some of the people involved in the project. They told me that all regions of the United Kingdom of Great Britain and Northern Ireland would benefit from those jobs. Can the Minister confirm that Northern Ireland will gain from the construction of the project?
Nadhim Zahawi
I am grateful to my hon. Friend for that question. I am happy to write back to him on how much of the benefit has gone to businesses in Northern Ireland.
A total of almost £4 billion in today’s money will go into the regional economy over the lifetime of the project, composed of about £1.5 billion during construction and about £2.4 billion during operations.
Katherine Fletcher
Does the Minister agree that we should not only seek to replicate established technologies, but use the new nuclear base-load as an opportunity to innovate and become a world leader in the sector?
Nadhim Zahawi
I am grateful to my hon. Friend for her intervention. She is absolutely right and I hope to address that point in a few moments.
EDF has informed us that Wales is already benefiting from work at the project; more than 1,000 Welsh residents have worked on it so far. Twenty-one apprentices who were previously employed at Wylfa are now working at Hinkley Point C, and more than 100 Welsh companies are working on the project, with contracts totalling more than £150 million going their way. The project is also sourcing more than 200,000 tonnes of Welsh steel from Express Reinforcements in Neath and large components from Vessco Engineering in Bridgend. I hope those examples go some way to showing that this Government recognise and value the highly skilled nuclear workforce and established supply chain that Wales offers.
I understand, however, that talking about successes in Somerset does not diminish the disappointment that north Wales felt upon hearing about the suspension of Wylfa Newydd nuclear power station. I reassure my hon. Friend the Member for Ynys Môn that we worked extremely hard during negotiations to find a deal that was right for everyone, with Government ready to contribute significant investment.
We were clear from the outset that any deal that was made would represent value for money, and be the right one for taxpayers and consumers. Ultimately, we were unable to reach such a deal and Hitachi took the commercial decision to suspend the project. However, the Wylfa site remains a potential location for new nuclear development, and Hitachi has stated that it is keen to discuss future options for the site with us, based on alternative funding models.
The Government are committed to looking at alternative funding models that could improve the value for money and reduce the cost of capital of new nuclear projects. As my hon. Friend the Member for Ynys Môn correctly noted, we recently consulted on a regulated asset base funding model as a potential new option that could attract private sector capital at a lower cost to consumers. The consultation closed on 14 October 2019, and we are currently considering the feedback to inform the best approach to the financing of future nuclear projects.
Ynys Môn will always be the energy island, and this Government are proud of the expertise and skills that north Wales brings to the UK’s civil nuclear sector. In September 2019, we published the Government response to the Welsh Affairs Committee’s report on the suspension of work on the Wylfa nuclear power station. We welcomed the report, and our response reiterated our recognition of Wales’s world-leading capability across the sector. I hope that we can continue to build on the great nuclear history that exists in north Wales.
In June 2018 we launched our landmark nuclear sector deal in Trawsfynydd. As my hon. Friend is aware, the nuclear sector deal comprises a package of measures to support the sector as we develop low-carbon nuclear power and continue to clean up our nuclear legacy. Worth £200 million, the deal is about Government and industry working in partnership to achieve significant cost reductions across the nuclear sector, and to ensure that it remains competitive with other low-carbon technologies.
The deal includes a number of commitments to ensure that the UK’s nuclear sector has a highly skilled and more diverse workforce. I recently signed the nuclear sector gender commitment as part of the Government’s commitment to the nuclear sector deal target of 40% women in nuclear by 2030—and I say that to someone who has clearly had a leadership position in Women2Win.
We believe that apprenticeships and higher education will be a key component in achieving this goal, and are working closely with industry and skills bodies through the Nuclear Skills Strategy Group to understand the skills requirements and potential challenges faced by the sector.
The Government also consider that new technologies, which my hon. Friend the Member for South Ribble mentioned, could play an important role in supporting our economy and allowing the UK to continue to be a world leader in tackling climate change. That is why our £200 million nuclear sector deal includes millions for advanced nuclear technologies. We believe that both small and advanced modular reactors have significant potential to support a secure, affordable decarbonised energy system, alongside other low-carbon generation. That is why we have awarded £18 million to the low-cost nuclear challenge proposed by a Rolls-Royce-led small modular reactor consortium. The challenge aims to design a working model that could be deployed as early as 2030. The consortium believes that a UK SMR programme can support up to 40,000 jobs at its peak, with each SMR capable of powering 750,000 homes.
To support advanced modular reactor development, we have committed up to £40 million to research and development through our AMR competition, the outcome of which will be announced shortly. Additionally, we have committed up to £26 million for an advanced manufacturing and materials competition and up to £12 million to build regulatory capability, which is also important, to take future licensing decisions on small and advanced modular reactors in a safe way.
I would like to thank my hon. Friend the Member for Ynys Môn once more for securing this important debate, and the Members who have made interventions. Nuclear can not only help us along the route to net zero by 2050, but is a key part of our economy. In 2018, there were around 89,000 people employed across the UK nuclear workforce and its supply chain. Our nuclear sector deal is looking to develop the skills that the sector needs and build a more diverse workforce. Hinkley Point C will kick-start new nuclear in the UK, providing firm base-load power and energy security for generations to come as we transition to a low-carbon economy. I look forward to working with all colleagues, and especially new ones, to ensure that we deliver for north Wales and support the energy island.
Question put and agreed to.
Draft Electricity Supplier Obligations (Excluded Electricity) (Amendment) Regulations 2019
Nadhim Zahawi Excerpts(4 years, 3 months ago)
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The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Nadhim Zahawi)
I beg to move,
That the Committee has considered the draft Electricity Supplier Obligations (Excluded Electricity) (Amendment) Regulations 2019.
The draft instrument, which was laid before the House on 9 September 2019, amends the Electricity Supplier Obligations (Amendment & Excluded Electricity) Regulations 2015. The existing legislation supports the competitiveness of energy-intensive industries by providing for a scheme exempting eligible businesses from a proportion of the cost of funding renewable electricity. The draft instrument will amend the existing legislation to include the manufacture of grain mill products; clarify the application of state aid requirements, which exclude undertakings in difficulty from the scheme; and improve the scheme’s overall operation.
Alan Brown (Kilmarnock and Loudoun) (SNP)
The Minister says that the exclusion relates to renewable energy. Will he confirm that it does not relate to the cost of nuclear energy, including the strike rate mechanism for Hinkley Point C?
Nadhim Zahawi
I was coming to the importance of the energy-intensive industries that are excluded. We exclude sectors that apply for that exclusion from any renewable obligations by up to 85%. I will address that further later on.
Alan Brown
The draft impact assessment says that this exclusion will be worth around £2.8 million per business in terms of the contract for difference mechanism for energy-intensive industries. I am just trying to get a handle on the total cost. Does that include the strike rate mechanism for Hinkley Point C? While the Minister is at it, will he explain whether this includes future capacity market auctions? There will obviously be a further round of CfD bids in the future. Will these industries be automatically exempt from them as well?
Nadhim Zahawi
The regulations deal with the cost of current renewables. Obviously, in the future, other mechanisms will be in place.
The sectors eligible for the existing exemption scheme employ around 350,000 workers and account for more than a quarter of total UK exports. Many are located in areas of economic disadvantage and provide good, well-paid jobs in those areas. While our industrial gas price is internationally competitive, our electricity prices for medium and large industrial users were the highest in western Europe in 2018. Clearly, electricity costs have a significant impact on the competitiveness of such enterprises. The industries affected operate in international markets, so higher electricity costs place them at a competitive disadvantage, resulting in the risk of carbon leakage, as it is referred to, where companies move production to countries with a less ambitious climate policy.
The existing legislation covering energy-intensive industries allows eligible businesses to receive an indirect exemption of up to 85% of the cost of funding renewable electricity schemes. Where an eligible business applies successfully for the exemption, its electricity supplier receives a reduction in its costs, which it passes on to the eligible business. This approach mitigates the cost of renewable electricity schemes, supports industrial competitiveness and provides certainty for business. The costs of the exemptions are distributed to all other electricity users.
“What does this SI do?”, I hear you ask, Mr Paisley. The regulations add the grain mill products sector to the list of eligible sectors and clarify the application of state aid requirements, which exclude undertakings in difficulty from the scheme. The regulations will also improve the scheme by ensuring that a business that uses a new meter will have to accrue only three months of data before applying, instead of having to wait until they have data from the previous year, as they have to now.
Where electricity meters are shared by more than one business, the proportion of electricity exempted will be updated more rapidly—it is currently done on an annual basis—making the system much more agile and responsive. Certificates will expire at the end of June, rather than March, reducing the risk of business facing a gap in the exemption. Businesses will also be able to submit quarterly reports on any day in that quarter, resulting in increased flexibility for them.
Alan Brown
When the Minister was clarifying what the regulations do, he mentioned that the scheme now includes grain mills and flour businesses. How many additional businesses will apply for an exemption? Will he estimate how many jobs that will protect?
Nadhim Zahawi
I am grateful to the hon. Gentleman for that question. For clarification, I want to return to his earlier point on the nuclear CfD. The EII applies to renewables costs only and not to the indirect cost of the nuclear CfD. Of course, it does apply to future renewable CfD auctions.
On the hon. Gentleman’s question, it will depend on the sector and the companies that apply from that sector. We are adding grain mills and, if they apply, they will be eligible. More than 200 UK businesses already benefit from energy-intensive industry exemptions, and we estimate they save about £300 million in electricity costs. We anticipate that about 15 businesses will be eligible through this further extension of the scheme.
The regulations will extend and improve the existing legislation supporting the competitiveness of energy-intensive manufacturing industries in the UK. I commend them to the Committee.
Nadhim Zahawi
I will take the last point first. My hon. Friend the Member for South Thanet raises a powerful point. At the beginning of my remarks, I referred to carbon leakage. We need to get smart about how we support industry, and of course move towards net zero, for which we are the first developed nation in the world to legislate. It is the law of the land that we will get to net zero by 2050.
However, I will share an example that I hope will allay some of my hon. Friend’s fears. I think it was nine years ago or less when we delivered the first offshore wind contracts. They came in at about £140 per megawatt hour; they are now at £40 per megawatt hour, and we account for something like 36% of global offshore energy production. That is an extraordinary tale of innovation and backing from Government, to repurpose, effectively, our energy production towards renewables—towards net zero. The hon. Member for Kilmarnock and Loudoun tried to make it a trade-off between nuclear, renewables and offshore, but I do not think it is as simple as that. I am a chemical engineer by background and the hon. Gentleman will know, I hope, that, while offshore wind and solar are of course important parts of the portfolio mix that we will produce as we transition to net zero, we need a baseload, because if the sun is not shining and the wind is not blowing, we will have a problem. That is why nuclear is an important part of the mix.
As to our investment in nuclear, I was at Hinkley Point C last week, to see the first-in-a-generation nuclear reactor project. It is remarkable, not just for what we are building, but for the apprenticeships coming through in the industry. It is a real revival of the nuclear industry. We are also investing in innovation around SMRs with Rolls-Royce, and in the future of advanced modular reactors.
Alan Brown
Obviously there has always been an argument that Hinkley Point C is required to provide the baseload, but when the original case was made for it we were told that if it was not commissioned by December 2017 the lights would go out, because there would not be sufficient baseload in the UK to keep the lights on. We are clearly way past December 2017. I think that the very earliest it will be commissioned, with a good tailwind, is 2025. It could be beyond that, so it kind of negates that argument for baseload, does it not?
Nadhim Zahawi
Not quite, because obviously the baseload is still needed. We have been able through efficient and safe operation to mitigate the delay, but obviously we do not want further delay.
Dr Whitehead
How dispatchable and flexible does the Minister think nuclear power in the future will be, bearing in mind that that is what we particularly will need, in terms of baseload, for the future variability of the majority of our energy supply? Does he think nuclear power can provide that dispatchability and flexibility to ensure that the system works as well as he hopes it will?
Nadhim Zahawi
It needs to be part of the mix—that is my very strong view. We will, quite rightly, have a portfolio tilted heavily towards renewables, and leaning into offshore wind even more than we have done to achieve the 36% that we have achieved; but it is certainly worth our continuing to make the investment. The technology is moving fast—whether that is fusion, in 10 or 20 years’ time, or AMRs or SMRs, which we are also very excited about. It absolutely needs to be part of the portfolio mix.
I want to return briefly to the points that the hon. Member for Kilmarnock and Loudoun made. The reason for the 2023 review date is that it is aligned with the Commission’s review of the energy and environmental aid guidelines in 2022. As to his question about the grain mill sector, it submitted sufficient evidence that satisfied our trade in electricity intensity criteria. We consulted businesses in a robust and open way, and published the Government’s response on 17 October. I made the point about nuclear earlier.
The shadow Minister asked a number of important questions about state aid and an alternative definition. Of course, state aid will be very much part of the free trade agreement negotiations, when they begin, and will be included in the level playing field position paper that the Government will publish soon. As the hon. Gentleman will know better than most, during the implementation period the UK will be bound by EU law, including state aid law, until the end of 2020.
Dr Whitehead
We are legislating this afternoon and presumably need to consider the circumstances under which state aid will not be applicable, because we will be bound by EU law only temporarily. Is the Minister saying that in the long-term future, we will continue to act as if the state aid rules are unchanged? Alternatively, is he saying that we will not do that and that we will need new legislation at the end of the transition period to effect that position?
Nadhim Zahawi
Let me be clear: during the implementation period, we have to follow EU state aid rules. The legislation that we are considering today will continue to apply under EU state aid rules. Therefore, the EU definition will continue to apply. We will issue guidance around that test. I cannot say to the hon. Gentleman today what the negotiations will produce, other than that we will deliver a position paper on the issue. That is what he must assume the decision he is making today is based upon.
Dr Whitehead
We still do not know what constitutes a company in difficulty.
Nadhim Zahawi
So let me come to the hon. Gentleman’s second point around whether we can include companies that do not pass the direct exemption, although it can be indirect because part of their business may come into competition with those companies that are exempt. Again, that will depend on the UK’s future subsidy regime. During the transition period, EU state law will continue to apply. I hope that offers him clarification.
On the hon. Gentleman’s final point about whether this is a further levy, it is not a new levy. It is a redistribution of the existing CfD levy. As he rightly pointed out, the amendment will mean a 20p addition to annual household bills.
I thank you, Mr Paisley, and hon. Members for their valuable contributions to the debate. The regulations will extend and improve the existing scheme that exempts eligible energy-intensive businesses from a proportion of the cost of funding renewable electricity. It is worth remembering that it is only a proportion of the cost, not the full cost. That will support the competitiveness of our energy-intensive manufacturing industries in the UK.
Alongside the regulations, we will support our manufacturing industries to become more energy and resource efficient and reduce their greenhouse gas emissions through several programmes, including the industrial energy transformation fund, which offers £315 million of additional support; a low carbon hydrogen production fund, which offers £100 million of further support; and the transforming foundation industries industrial strategy challenge fund, which is £166 million.
The Government are serious about delivering their net zero commitment by 2050 and leading the world. That is not just good for the environment, but good business, which I know is dear to your heart, Mr Paisley, and the hearts of your constituents. Therefore, I commend the regulations to the Committee.
Question put and agreed to.
Resolved,
That the Committee has considered the draft Electricity Supplier Obligations (Excluded Electricity) (Amendment) Regulations 2019.
Oral Answers to Questions
Nadhim Zahawi Excerpts(4 years, 3 months ago)
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Bob Blackman (Harrow East) (Con)
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Nadhim Zahawi)
It is delightful to see you in your place, Mr Speaker; this is the first opportunity I have had to congratulate you.
Small modular reactors have significant potential to reduce our carbon emissions, and help to achieve net zero by using advanced manufacturing techniques to unlock what is referred to as “fleet economics” and drive down costs in nuclear.
Bob Blackman
It is clearly very good news that Rolls-Royce, a world-renowned company, has taken up the challenge of developing small modular nuclear reactors for clean energy not only for the UK, but for export across the world. What assessment has my hon. Friend made of the opportunity for new jobs in the UK and for exports across the world?
Nadhim Zahawi
The Rolls-Royce consortium has proposed a significant public-private joint innovation programme worth more than £500 million to design a first-of-its-kind SMR. The consortium expects a working model to be up and running in the early 2030s, that the SMR programme would create high-value export opportunities and, at its peak, 40,000 jobs, and that each SMR would be capable of producing enough clean electricity to power 750,000 homes.
Martin Docherty-Hughes (West Dunbartonshire) (SNP)
In the last Parliament, the Defence Committee and Science and Technology Committee received evidence clearly indicating that there are threats from unmanned aerial vehicles in relation to nuclear reactors. If the Minister supports these small-scale nuclear reactors, will he advise the House on what discussions his Department is having with the Ministry of Defence about their impact on the security of national infrastructure?
Nadhim Zahawi
I am grateful for the hon. Member’s pertinent question. He is absolutely right; we do have discussions with the Ministry of Defence. The Minister for Business, Energy and Clean Growth and I are visiting Hinkley Point tomorrow, but the hon. Member raises an important issue that the nuclear constabulary is taking very seriously.
Mark Pawsey (Rugby) (Con)
John Lamont (Berwickshire, Roxburgh and Selkirk) (Con)
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Nadhim Zahawi)
The Government are committed to spreading prosperity to all parts of the United Kingdom. We are investing £565 million through the borderlands growth deal and the Edinburgh and south-east Scotland city region deal, demonstrating our commitment to supporting growth and prosperity in the Scottish borders.
John Lamont
The Minister will know about the borders’ fine, famous tradition of producing Scottish textiles, but this industry is being hammered by the US-EU trade war, whereby many businesses face a 25% tariff on their exports to the United States. What are the Government doing to support those businesses and, in particular, compensate them for these tariff charges?
Nadhim Zahawi
Scottish textiles are, as my hon. Friend rightly points out, an important part of the Scottish economy, our overall economy and our heritage. We will do everything we can to protect this micro-economy. The Government are working closely with the EU and the United States to support a negotiated settlement to the Airbus-Boeing dispute, and the Secretary of State continues to raise this personally with the United States Administration and is meeting the Trade Secretary later today.
Dame Diana Johnson (Kingston upon Hull North) (Lab)
Stephen Metcalfe (South Basildon and East Thurrock) (Con)
Jack Brereton (Stoke-on-Trent South) (Con)
Ceramic Valley enterprise zone has transformed a number of brownfield sites and created thousands of jobs in Stoke-on-Trent. Will my right hon. Friend the Secretary of State support our proposals to extend the zone, and its continuation in Stoke-on-Trent?
Nadhim Zahawi
Since it launched in April 2016, Ceramic Valley enterprise zone has been a fantastic success: it has attracted private sector investment and has already secured 1,000 new jobs in Stoke. The Government are prioritising levelling up, as the Prime Minister continuously reminds us. We will want to reflect on those things, such as Ceramic Valley enterprise zone, that have worked and see how we can support them further.
Kevin Brennan (Cardiff West) (Lab)
One interesting statistic in the figures released today by the Office for National Statistics figures is that for the first time more than 5 million people in the UK are self-employed. Will the Minister responsible for small business undertake urgently to push forward the work she has been doing on shared parental leave for freelancers and the self-employed? That will be particularly helpful to women in the workforce.
Euratom Exit Strategy
Nadhim Zahawi Excerpts(4 years, 6 months ago)
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The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Nadhim Zahawi)
The Government have further advanced their preparations for the UK’s withdrawal from Euratom and the European Union.
As made clear in previous statements on the topic, the UK has concluded all replacement international agreements required to ensure continuity for civil nuclear trade for when Euratom arrangements no longer apply to the UK and confirmed the operability of an existing bilateral nuclear co-operation agreement (NCA) with Japan.
Further to this, the UK and the Government of Japan held formal negotiations on the text of an amending protocol to the existing bilateral nuclear co-operation agreement (NCA) on 4 June. This amending protocol is not essential for the operability of the NCA or for our continued trade and co-operation with Japan but completes the formal legal process to amend the NCA on a permanent basis. Negotiations on the amending protocol continue.
Implementation guidelines for nuclear operators were published on 27 June outlining future reporting requirements on operators related to nuclear co-operation agreements. These requirements will allow the UK to comply with its NCAs with Australia, Canada, Japan and the US, following withdrawal from Euratom.
The UK also continued to make progress in implementing its new domestic safeguards regime. The Office for Nuclear Regulation (ONR) remains in a state of readiness to deliver a state system of accounting for and control of nuclear material (SSAC) that enables the UK to meet its international safeguards obligations when Euratom arrangements no longer apply.
The former Secretary of State prescribed the forms required by UK industry to notify UK regulators of the import of sealed radioactive sources from EU member states as well as the forms required by UK industry and UK regulators to apply for, authorise, and notify trans-frontier shipments of radioactive waste and spent fuel. The use of these forms will only be required from exit day in the event that the UK leaves the EU without a deal. A statement notifying Parliament of the use of the sub-delegated powers exercised to create these forms can be found in the report accompanying this statement.
Overall the Government have continued to work closely with industry to address the issues that may affect the civil nuclear sector in any exit scenario and remains committed to regular engagement with industry, civil society, academia, trade unions, and other interested stakeholders.
Today I will be depositing a report in the Libraries of both Houses that sets out further details on the overall progress on the Government’s implementation of its Euratom exit strategy, including domestic operational readiness, legislation and international agreements. The report covers the three-month reporting period from 26 March to 26 June 2019 and is the fourth and final statutory report under section 3(4) of the Nuclear Safeguards Act 2018.
[HCWS87]
Oral Answers to Questions
Nadhim Zahawi Excerpts(4 years, 6 months ago)
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Lucy Powell (Manchester Central) (Lab/Co-op)
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Nadhim Zahawi)
The independent Oakervee review will advise the Government on High Speed 2, including potential business benefits and how it should proceed. The hon. Lady will understand that I would not want to prejudice those findings.
Lucy Powell
I thank the Minister for that reply, but six regional heads of the CBI say that High Speed 2 should be built in full and the Northern Powerhouse Partnership recently published its excellent independent review saying the same, arguing that only HS2 can really rebalance our economy. Will the Secretary of State, as the business representative at the Cabinet table, advocate for business in the north?
Nadhim Zahawi
The hon. Lady mentions the CBI. Both the Mayor of Greater Manchester, Andy Burnham, and the Mayor of Birmingham, Andy Street, who sits on the panel conducting the review, have said it is important that we kick the tyres on value for money, but it is also important to make such representations to ensure that the committee gets a full view of the business benefits of HS2.
Philip Davies (Shipley) (Con)
May I urge the Minister to ignore the siren voice opposite? Most people in the north accept that HS2 is a catastrophic waste of money— a huge white elephant that is destroying the environment and the countryside and will chiefly benefit London, hence why it started out in London in the first place. May I therefore urge him to tell the Secretary of State for Transport to scrap HS2 and crack on with the thing that will really benefit the northern economy—Northern Powerhouse Rail or HS3—connecting the north, which is what we need to benefit the north’s economy.
Mr Speaker
I do wish the hon. Gentleman would overcome his natural shyness.
Nadhim Zahawi
I do not think there is any danger of that, Mr Speaker.
My hon. Friend raises an important point, which is why the Prime Minister has pledged to fund the Leeds to Manchester route and has accelerated those plans with a deal in the autumn of 2019, with billions of pounds going into Northern Powerhouse Rail, and has of course set up Transport for the North.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
The Minister may know that I am a fierce opponent of the £100 billion that is going to be wasted on HS2. Has he looked at research in France, where we see that high-speed trains actually suck more power and wealth into the metropolitan area of Paris, rather than the renewal of provincial towns? Will he have a look at the £100 billion, because that is how much it is going to cost, and will he spend it instead on investing in the workforce of this country?
Nadhim Zahawi
The hon. Gentleman makes a powerful point, although his colleague, the hon. Member for Manchester Central (Lucy Powell), was shaking her head, so there is clearly division on the benefits of HS2. That is why we have an independent review to tell us which way we should proceed.
Martin Vickers (Cleethorpes) (Con)
One of the businesses in northern Lincolnshire that will be a crucial part of the supply chain for HS2 is British Steel in Scunthorpe. I urge the Minister, when he is in discussion with the Department for Transport, to consider the effect on the supply chain and the impact on local economies.
Lee Rowley (North East Derbyshire) (Con)
Gareth Johnson (Dartford) (Con)
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Nadhim Zahawi)
I am pleased to say that Dartford has been shortlisted for the future high streets fund to renew its town centre. This will build on £4.3 million support already allocated from the South East local enterprise partnership growth fund.
Gareth Johnson
A number of businesses in my constituency face an uncertain future due to a nationally significant infrastructure project earmarked for the Swanscombe peninsula, where those businesses are located. Will the Minister commit to working with the Ministry of Housing, Communities and Local Government to do all he can to support the businesses that find themselves in that situation?
Nadhim Zahawi
I fully appreciate the concerns of local businesses with regard to the uncertainty over Swanscombe peninsula. My Department works very closely with the Ministry of Housing, Communities and Local Government. I will gladly raise this with my right hon. Friend the Minister for the Northern Powerhouse and Local Growth, when I see him tomorrow.
Karen Lee (Lincoln) (Lab)
Mark Pawsey (Rugby) (Con)
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Nadhim Zahawi)
We have just announced up to £l billion of new funding to advance the next generation of cutting-edge automotive technologies. I am sure the House would want to know how that funding is being used. Part of it is being used by the supply chain for large-scale production of electric vehicles so that we scale up the production in the UK, and of course part of it will be used for vehicle research and development.
Mark Pawsey
I do not know whether you have had the opportunity to make a journey in one of the new electric London taxis, Mr Speaker, which are manufactured in my Rugby constituency by the London Electric Vehicle Company and which often provide people with their first experience of an electric vehicle. The company has just recorded its best ever sales month, with 352 taxis sold, and the fleet is improving the carbon footprint in our cities by preventing 6,800 tonnes of CO2 from entering the atmosphere. What further can we do to improve the switch to electric?
Nadhim Zahawi
I am very pleased to hear that the London Electric Vehicle Company had record sales in September. I spoke to the CEO recently and was very impressed with their capability. I understand their sales have grown month on month since April. They have capacity to produce 20,000 vehicles a year and his message to this House when I spoke to him was, “Let’s get Brexit done.”
Conor McGinn (St Helens North) (Lab)
Some London boroughs have hundreds of electric vehicle charging points while whole towns in the north have none, but given the lack of public transport options in places such as St Helens, would it not be economically and environmentally better to invest in places such as mine to get people out of their cars?
Nadhim Zahawi
The hon. Gentleman is right to raise this issue. Our grant scheme and the £400 million charging infrastructure investment fund will see thousands more electric vehicle charging points installed across the whole UK.
Damian Hinds (East Hampshire) (Con)
To accelerate take-up, first, we need to have more people having an electric vehicle in their consideration set, so alongside communications to consumers can the Minister look at the pivotal role played by dealers in getting more people to take a test drive?
Nadhim Zahawi
My right hon. Friend raises an important point. Different touch points with consumers are important. For example, when people go for a replacement tax on their car, they should be immediately alerted to the fact that, instead of paying that tax, they could pay for a new electric vehicle.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
Electric vehicles represent a fantastic opportunity to combat climate change and boost manufacturing jobs. That is why Labour is committed to investing £2.3 billion in three new battery gigafactories, £3 billion in support for manufacturing new car models, and £3.6 billion in our electricity grid and charging infrastructure, and we will also provide targeted interest-free loans for new electric cars for up to 500,000 people a year. We will do all that while retaining membership of the world’s largest customs union. Apart from a few ad hoc pots of money, the Government are proposing green licence plates. When it comes to climate change and manufacturing, is it not true that the Government are all hot air and no action?
Nadhim Zahawi
The hon. Lady just reeled off a list, so I will reel off my own list of good news, starting with the fact that Government announced £1 billion to increase the capacity for electric car development. On 10 October, Nissan launched the new Juke model after investing £100 million in Sunderland. On 26 September, Jaguar Land Rover announced its latest investment in the Gaydon facility, close to my constituency. On 18 September, INEOS Automotive announced that its headquarters and assembly plant for its SUV will be based in Bridgend. BMW’s new MINI Electric launched in July. JLR has made a massive investment in electric engines at Castle Bromwich. On 20 March, Toyota announced a collaboration with Suzuki to make an electric version of its Corolla model. That is all real investment, not “hot air”. The Labour party would crash the economy, raise taxes and have nothing—nowt—to spend on the green economy.
Julian Sturdy (York Outer) (Con)
Christian Matheson (City of Chester) (Lab)
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Nadhim Zahawi)
I think the hon. Gentleman would know that we already have agreements in place so that planes can continue flying. If he votes for the deal today, we will be in a much better place to leave in an orderly way.
Paul Masterton (East Renfrewshire) (Con)
More than half a dozen post offices in East Renfrewshire have closed over the past couple of years and not one has been able to be replaced, because it was not a viable business proposition for retailers. Does the Minister think that increased fees under the banking framework agreement will be enough to build the sustainability of the post office network?
Jessica Morden (Newport East) (Lab)
Nadhim Zahawi
The hon. Lady and I are set to meet on 29 October, and I am meeting the all-party group on steel the day before. I will do everything I can to work with Tata to see whether we can find a future for the steelworks.
David Morris (Morecambe and Lunesdale) (Con)
I draw the House’s attention to my entry in the Register of Members’ Financial Interests. In my constituency, we have two EDF nuclear power stations. Part of the EDF group is RTE, which is currently working with the British company Aquind to deliver cross-EU-border energy infrastructure. The EU Commission has just removed UK companies from its list of projects of common interests, which affects their regulation. Will my right hon. Friend urge Ofgem to step up and protect British companies by granting regulation as soon as possible in accordance with British law?
Draft Freedom of Establishment and Free Movement of Services (EU Exit) Regulations 2019
Nadhim Zahawi Excerpts(4 years, 6 months ago)
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The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Nadhim Zahawi)
I beg to move,
That the Committee has considered the draft Freedom of Establishment and Free Movement of Services (EU Exit) Regulations 2019.
May I say what a pleasure it is to serve under your chairmanship, Mr Hanson, and congratulate you on becoming a grandad for the first time? [Hon. Members: “Hear, hear!”]
The regulations, which were laid before the House on 11 July, will disapply directly effective rights of establishment and the provision of services derived from article 49, on freedom of establishment, article 56, on free movement of services, and article 57, the definition of “services”, of the treaty on the functioning of the European Union—TFEU—if the UK leaves the EU without a withdrawal agreement. Certain directly effective rights, derived from article 18 of the TFEU, prohibit discrimination on grounds of nationality within the scope of application of the EU treaties. For completeness, the regulations therefore also disapply article 18 of the TFEU in so far as it relates to the disapplication of rights of establishment and provision of services.
The regulations also disapply equivalent or similar articles derived from the European Economic Area agreement between the EEA countries, the free movement of persons agreement with Switzerland, and the Ankara agreement and the additional protocol with Turkey. Henceforth those will be referred to as countries with associated agreements.
Directly effective rights of establishment and free movement of services ensure that nationals from EU member state territories can be self-employed, own and manage a company and provide services on a temporary basis in another member state under the same conditions as that state’s own nationals, and that they can receive services without facing certain restrictions in the EU single market. Rights derived from the TFEU are based on reciprocal relationships between EU member state territories; and rights derived from EU bilateral and multilateral agreements are based on reciprocal relationships between EU member state territories and certain non-EU territories.
The rights are retained in UK domestic law on exit day by virtue of section 4 of the European Union (Withdrawal) Act 2018. The Government have decided to disapply the rights as part of their preparations for Brexit on 31 October. The decision was taken for three primary reasons. First, the rights will no longer be reciprocated. The rights apply only to nationals of one EU member state or country with an associated agreement operating in the territory of any other EU member state or country with an associated agreement. As a result, once the UK ceases to be a member state of the EU, the rights will automatically no longer be reciprocated.
The second reason is sovereignty. Given that the rights will no longer be reciprocated, failing to disapply the rights in UK law would leave a lack of clarity as to whether EU nationals and nationals of countries with associated agreements had additional rights, compared with nationals of other countries, to challenge the laws and decisions of UK authorities after Brexit. In turn, that could restrict the Government’s future ability to regulate, particularly when UK nationals will no longer have the benefit of these rights in the EU.
The third reason is compliance with international law. Disapplying the rights will facilitate the UK’s compliance with international trade law and specifically the World Trade Organisation’s general agreement on trade in services—GATS—ensuring that the UK is not in violation of the most favoured nation principle.
I want to move on to impact. The Government were keen to ensure that the regulations received proper scrutiny before being brought before the House. I can confirm that the Government sought and received the consent of the devolved Administrations in Scotland and Wales to legislate on this matter, as the treaty rights being disapplied could, in a domestic context, impact on both reserved and devolved policy. This included agreement from the Scottish Parliament’s Economy, Energy and Fair Work Committee. The Government also notified the Northern Ireland civil service of our intention to legislate.
In addition, the Government engaged fully with the Joint Committee on Statutory Instruments. The Committee considered the regulations at its meeting on 4 September and chose not to report them to either House. The instrument was also considered by the Secondary Legislation Scrutiny Committee at its meeting on 23 July, and it drew the instrument to the special attention of the House on the grounds that it gives rise to issues of public policy likely to be of interest to the House.
Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)
I appreciate that I have not been selected as a member of the Committee, but I understand that I have the right to speak and ask questions on behalf of my constituents. The Minister is obviously getting his defence of this highly controversial measure in early. Does he not accept that it has caused great alarm to many self-employed EU citizens who have been operating legitimate and important businesses in our communities up and down the country? I was contacted by a constituent today who was simply unaware of this and is deeply alarmed.
Nadhim Zahawi
That is precisely why I am going into some detail on why the regulations will have no impact at all on the work or services provided by EU nationals or nationals of Turkey or Switzerland.
Let me make some more headway on the reasoning given by the Secondary Legislation Scrutiny Committee. For example, the Committee noted that the instrument seeks to ensure that the UK is compliant with WTO law and that it will make it an offence to dishonestly use illicit satellite decoder cards from the EU. I will attempt to address both of those points momentarily. However, I want to reassure the House on a number of aspects of the regulations: the practical impact that we expect from the disapplication of these rights; the interaction between these rights and EU citizens’ rights, which I think was essentially the thrust of the concern of the hon. Member for Cardiff South and Penarth on behalf of his constituents; and the impact of the disapplication of these rights on the immigration regime.
First, with respect to the practical impact of the regulations, they do not impose any additional restrictions on EU nationals or EU-based businesses, or on the nationals and businesses of the countries with associated agreements, at the point at which we exit the EU. This is because existing UK legislation is expected to be compliant with these rights. The Government have prepared as thoroughly as possible to identify policy areas that are reliant on the establishment and free movement of services treaty rights, and therefore have a good understanding of where direct policy impacts can be expected as a result of disapplying these rights today. With the exception of an impact on the use of satellite decoder devices, no direct policy impacts were identified during that preparation. The regulations will impact on the use in the UK of satellite decoder devices intended for EU audiences in order to dishonestly receive a programme with the intent of avoiding a charge. This is as a result of aligning the law with that already applied for satellite decoder devices intended for non-EU audiences.
Secondly, on citizens’ rights, the rights disapplied by the regulations should not be confused with the citizens’ rights of EU citizens currently resident in the UK, which are being protected separately. The UK’s guarantee to EU citizens is that those who are resident in the UK by exit day will still be able to work, study and access benefits and services, whatever the scenario. This is separate to, unrelated to and unaffected by these regulations.
Thirdly, with regard to immigration, these regulations will not in themselves have any impact on the immigration regime applying to EEA, Turkish and Swiss nationals in the UK. The Government have announced that free movement as it stands under EU law will end on 31 October if we leave the EU without a deal. A new points-based immigration system will be introduced from January 2021. Until then, much of the free movement migration framework will remain until the UK Parliament passes legislation to repeal the Immigration (European Economic Area) Regulations 2016.
The regulations that we are considering today carve out the rights in so far as they fall within the scope of the immigration regime applied to Swiss nationals and Turkish nationals. This is to ensure that changes to the immigration regime applied to Swiss nationals and Turkish nationals come into force via primary immigration legislation. These regulations are an important part of the Government’s preparation for Brexit. They facilitate the UK’s compliance with international trade law and they preserve the UK’s freedom to regulate, should this Government or a future Government choose to do so—after we have left the EU, of course.
I commend the regulations to the House.
Nadhim Zahawi
May I start by sharing with the Committee my dismay and disappointment at the conflating of this SI with issues of immigration and the status of European citizens, as well as those from Turkey and Switzerland, who work hard and deliver services here?
The hon. Member for Glasgow Central might not have been in the room when I confirmed that the Government sought and received the consent of the devolved Administrations in Scotland and Wales because we wanted to make sure that we received consent before we moved forward, but I hope that she and the hon. Member for Reading East will refrain from scaremongering. They both spoke about the impact on EU citizens’ rights, and I want to reiterate to the Committee that EU citizens’ rights are being preserved separately from this instrument. The Government have already committed to protect the rights of more than 3 million EU citizens, which we have heard being conflated today with this statutory instrument. We will make sure that their rights are protected. The regulations do not affect the offer that the Government have made to EU citizens resident in the UK at the point of exit. They do not interact with the citizens’ rights agreements with Switzerland and the EEA European Free Trade Association states.
Nadhim Zahawi
I have a lot to cover, but I will happily take the hon. Lady’s intervention later. The Government’s plan on citizens’ rights confirms that EEA and Swiss citizens resident in the UK by exit day would be able to apply to the EU settlement scheme until at least 31 December 2020 to secure their status in a no-deal scenario. The EU settlement scheme is live and performing well. More than 2 million applications have now been received, and the scheme will continue to run in a deal or no-deal scenario. EU citizens resident in the UK by exit day will continue to be able to access benefits and services on exactly the same basis after the UK exits the EU as they do now. I sincerely hope that colleagues will refrain from scaremongering. It is deeply irresponsible for hon. and right hon. Members to do so.
The hon. Member for Sefton Central asked important questions, which I will attempt to address. He asked about the impact assessment for the regulations. An impact assessment has not been prepared because the impact has been approved de minimis in line with the better regulation framework.
Nadhim Zahawi
Let me make some headway.
The only area in which the directly effective rights of establishment or free movement of services have been identified to have a direct impact on UK businesses is in the case of satellite decoders, where we expect the impact to be minimal. The directly effective rights of establishment and free movement of services impact the immigration regime applied to Swiss and Turkish nationals. Changes to the regimes will be delivered by primary immigration legislation, so let us not conflate those two things.
The hon. Gentleman also asked how we know that the EU will not reciprocate. Why are we doing this now? These rights are no longer reciprocated once we leave the EU. They are directly effective rights that are applicable only to member states. However, this does not preclude us from agreeing an ambitious free trade agreement with the EU.
The hon. Member for Cardiff South and Penarth said that the regulations are necessary to protect the Government’s freedom to regulate in a no-deal scenario and asked what regulations the Government are planning that would contravene or depart from those rights. We anticipate that the immediate practical impact of the regulations on the ability of EU, EEA, EFTA, Swiss or Turkish nationals to establish or carry on business or provide services in the UK will be limited, because UK law is currently expected to be compliant with these rights. Were there to be any legislative changes that depart from these rights—which I think is his point— after we have left the EU, they would be subject to the scrutiny of Parliament in the normal way and so would be considered at the appropriate time.
I want to return to the hon. Member for Sefton Central, who asked how the Government can be sure that there are no other direct impacts. The Government have prepared as thoroughly as possible. I hope he would agree that we have consulted as thoroughly as we can, and that the only exception is the satellite decoders.
Several hon. Members spoke about the submission from the Public Law Project. Allow me to address it. It is important that we get this on the record, because emotions are running high and the atmosphere is febrile in this place. I think I have addressed the issue of the impact assessment. The hon. Member for Sefton Central said that these go beyond the powers conferred on Ministers by the Henry VIII powers in section 8 of the withdrawal Act, a point that pretty much comes from the Public Law Project notes that were circulated today. I will share with the hon. Gentleman the correct position. The powers delegated to Ministers by Parliament via the EU withdrawal Act specifically allow changes to be made to existing Acts of Parliament by secondary legislation, through so-called Henry VIII powers. In its report on Henry VIII and delegated powers, the House of Lords Constitution Committee noted that
“the distinction between Henry VIII and other delegated powers is not in this exceptional context a reliable guide to the constitutional significance of such powers, and should not be taken by Parliament to be such.”
Section 8 powers to prevent, remedy or mitigate deficiencies in the EU law retained under the Act that arise from the UK’s withdrawal from the EU are used here to address deficiencies in retained EU law relating to certain provisions on freedom of establishment and free movement of services in the event that the UK leaves the EU without a deal. Section 8 is used to address any inoperability of such rights and to ensure that UK law continues to function effectively and with legal clarity.
Bill Esterson
I made the point that section 8 of the withdrawal Act is designed to address deficiencies in retained EU law—that is not in question. The problem is that it is not being used for that; it is being used for changes in policy and to affect people’s rights. That goes way beyond the scope, as does addressing WTO deficiencies. That is not what was ever envisaged or stated by the Government when they passed the withdrawal Act.
Nadhim Zahawi
The deficiencies in retained directly effective rights concerning freedom of establishment and the free movement of services, including a lack of reciprocity, which there cannot be in this case, arise as a result of the withdrawal of the UK from the EU. That is the whole point. The provisions in the regulations are being made as a direct consequence of the UK’s exit from the EU.
Finally, the hon. Member for Sefton Central mentioned the3million’s campaign on our doing this here through secondary legislation, rather than primary legislation. The regulations do not represent a significant policy change, as he suggests. They simply do not. If colleagues prefer to scaremonger, that is their prerogative, but I do not agree with them. I think it is a mistake to do that. It is a time to behave responsibly. The regulations do not impose any new restrictions on EU, EEA, EFTA, Swiss or Turkish nationals or on EU, EEA, EFTA, Swiss or Turkish-based businesses at the point at which we exit the EU, and we do not expect disapplying these rights to have a direct impact on the ability of EU, EEA, EFTA, Swiss or Turkish nationals to establish or provide services. The hon. Gentleman will know better than I do that successive Governments have implemented EU obligations via both secondary and primary legislation, so I hope he will reconsider his position.
I will end, Mr Hanson, because I want to get you over the road to the hospital to see your granddaughter. I thank Members for their valuable contributions to this debate. I compel them to think twice before they scaremonger. The hon. Member for Glasgow Central should talk to her colleagues in the Scottish Parliament on this.
Stephen Kerr (Stirling) (Con)
On that point, I agree with the Minister. It is very distressing in Scotland to hear the kind of propaganda we have heard this evening. It has been widely disseminated. In fact, an MEP in Scotland has written to all the EU citizens living in my constituency with similar scaremongering, with an opening paragraph on the Government’s attitude towards EU citizens. Does he believe for one minute that the hon. Member for Glasgow Central will go back to the constituents to whom she spent the weekend scaremongering and put them right? I do not. This is typical of the tactics that the Scottish National party is using in Scotland at the minute.
Nadhim Zahawi
It is incumbent on us all to be sensible and to reflect on today. Let us not add fuel to the flames of division. Let us come together. Hon. Members heard in my opening remarks that we have consulted thoroughly with our colleagues in Scotland and Wales, so I ask everyone to please act responsibly.
Stephen Doughty
I gently say to the Minister that it is certainly not my intention, or that of many hon. Members, to scaremonger in any way. The fact is that we are representing our constituents who are scared and who have concerns. I was not aware of this issue until my constituents raised it with me. I have to say that I do not agree with his characterisation of the EU settlement scheme. The Home Affairs Committee, on which I sit, has repeatedly found serious concerns and problems with how it operates, and indeed with the entire immigration system. That is why people have those concerns and are scared. It is genuine; it is not us scaremongering.
Nadhim Zahawi
I am grateful to the hon. Gentleman for that thoughtful intervention. I only ask that he shares the debate with his constituents, so that they can read, in black and white, what I have outlined as the true position of the legislation.
I again thank you, Mr Hanson, and Committee members. The regulations form an important part of our preparations to leave the EU, hopefully with the great deal that the Prime Minister has negotiated. They help to preserve our freedom to regulate after we have left the EU with respect to the establishment and carrying on of business in the UK, and the provision of services. They also facilitate our compliance with international trade law, which is important. We pride ourselves on being a country where people obey the rule of law—a subject that has been widely debated in this place and across the media. I commend the regulations to the Committee.
Question put.
Radioactive Waste: Geological Disposal
Nadhim Zahawi Excerpts(4 years, 6 months ago)
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The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Nadhim Zahawi)
Today I am pleased to designate the “National Policy Statement for Geological Disposal Infrastructure”, which was laid in parliament on 4 July.
This is an important milestone in finding a solution to manage the UK’s higher activity radioactive waste and this marks the final step in the parliamentary process for the national policy statement.
It is important that we who have benefited from nuclear technology take appropriate steps now to manage the waste created from using that technology. Nuclear technology has provided clean energy to our homes and businesses and will continue to play an important role as we transition to a carbon-neutral economy. For a long time, we have also used radioactive materials to treat and diagnose serious illnesses, to deliver research and development and to help deliver industrial processes. Radioactive waste is created from a variety of sources including electricity generation, defence and healthcare, and geological disposal is internationally recognised as the safest and most secure means of permanently managing a proportion of this waste not suitable for other management regimes.
The “National Policy Statement For Geological Disposal Infrastructure” sets out the need for such disposal infrastructure to safely and securely manage the UK’s higher activity radioactive wastes. The national policy statement provides an appropriate and effective framework for the Planning Inspectorate and the Secretary of State for the Department for Business, Energy and Industrial Strategy to examine and make decisions on development consent applications for geological disposal infrastructure in England
In order to support the requirements for the designation of “The National Policy Statement for Geological Disposal Infrastructure”, I am also publishing the “Final Habitats Regulations Assessment Report” and the post-adoption statement for the appraisal of sustainability on the Department’s website.
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