Retained EU Law (Revocation and Reform) Bill

Peter Aldous Excerpts

Report stage
Wednesday 18th January 2023 Commons Chamber

[Peter Aldous (Waveney) (Con)]

I have concerns about the Bill in its current form. Those concerns are informed partly by the National Farmers Union, of which I am a member through the family farm of which I am a partner, but they also apply to all other sectors of the economy and to all means of protection and regulation, whether they relate to the environment, to consumers or to workers. They are concerns of practicality, not of principle, and are driven by a desire to improve the UK’s regulatory and legal framework after our departure from the EU.

My principal worry is that the requirement to revoke all EU legislation by the end of this year is unrealistic. Such a sudden sunset clause sets a framework for bad and hasty lawmaking, although I acknowledge that the Bill makes provision for the deadline to be extended in certain circumstances.

Let me make some brief observations. Nearly seven years after the referendum, it is right that this process is finally being legislated for. There are many aspects of the law that require improvement and reform, but that needs to be carried out in a considered, not rushed, manner, with a proper review process set out and with full consultation.

The scale of the task, given the timescale proposed, is enormous. There is real worry about whether Departments such as DEFRA have the capacity to carry out the work, or whether other important work, of which there is much in these challenging times, will be given a lower priority as an unintended consequence. DEFRA alone has approximately 600 pieces of legislation to go through, and there may well be regulations of which it is unaware. A rash striking out of all laws by a set date could leave gaps in the law and the regulatory framework.

We should keep in mind the implications for the Government Legal Profession, in which morale is already low. A recent survey found that a third of its staff want to leave within a year. As well as the possible environmental and consumer protection risks that might inadvertently be created, there is also a worry that there will be a negative impact from a business perspective, with attention being diverted, uncertainty created and investment decisions delayed or cancelled.

In conclusion, I am worried that the Bill appears to be a continuation of the approach that has been adopted since Brexit: a rush, with no considered long-term plan in place, to carry out work such as agreeing trade deals that justify Brexit. We seem to be striving for quantity rather than quality. We are in danger of losing sight of what should be our ultimate objective: to put better arrangements in place than we had when we were in the EU. I fear that in its present form the Bill puts that aim at risk. I hope that in the Minister’s winding-up speech and in the other place, the Government will allay my concerns. They would do well to adopt the four-point improvement plan that my right hon. Friend the Member for Chelmsford (Vicky Ford), who is not in her place, set out earlier in the debate.

Energy Prices Bill

Peter Aldous Excerpts

Committee stage
Monday 17th October 2022 Commons Chamber

[The Second Deputy Chairman]

I call Peter Aldous.

[Peter Aldous (Waveney) (Con)]

I am largely supportive of the Bill, as there is an urgent need for assistance to be delivered at speed to hard-pressed families and businesses, but it is important to avoid any unintended negative consequences for other key Government objectives, in particular energy security, the transition to net zero and the full deployment of renewables and low-carbon forms of energy production.

My constituents urgently need the support that the Bill will provide, but to regenerate the local economy and create long-term, well-paid jobs, we need investment in offshore wind, nuclear and hydrogen. There are exciting opportunities in the sector throughout east Anglia, and specifically Waveney and Lowestoft, although certain clauses in the Bill raise worries that such investment could be imperilled. I hope that the Minister will be able to allay that unease. The Government are not pursuing a windfall tax on renewables and nuclear generators because they are worried that it would deter investment. Some of the mechanisms proposed in the Bill could have a similar negative impact, and it is important that further clarification is provided quickly. I will briefly outline three specific concerns.

Clause 16, along with schedule 6, introduces the cost-plus revenue limit, which is a cap on the revenue of low-carbon energy generation. There is a worry that this mechanism could penalise investment in clean, cheap and low-carbon generation. To avoid that, there is a need for a reinvestment allowance to channel investment into low-carbon projects, which are needed to meet our net zero and energy security targets, and which will also provide the long-term route map out of the cost of living crisis.

Clause 21 enables the Secretary of State to modify the licences under which energy companies operate. Currently, the regulator Ofgem determines licence conditions. This is an arrangement that works well and has the confidence of investors. Further clarification is required as to the Government’s intentions, and consideration should be given to providing a definitive timeframe through a sunset clause for how long this provision will be in place.

Clause 19 sets out the arrangements for passing on the energy price support from generators to end users. There is a concern that the Bill as drafted does not properly take into account the fact that generators do not all operate in the same way and that they incur differing operational costs.

In conclusion, I hope the Minister can allay these concerns. I urge the Government to liaise and consult with all relevant stakeholders, including energy companies and civil society organisations, to avoid these unintended consequences, which could imperil energy security, decarbonisation and economic regeneration in coastal communities such as Waveney.

[Alan Brown]

It is a pleasure to serve under your chairmanship, Mr Evans, and to follow the hon. Member for Waveney (Peter Aldous). I very much expect that the Minister will not listen too much to my suggestions, but I hope he will listen to at least some of hon. Gentleman’s suggestions for making sure that we do not disincentivise investment in renewables and for amending some of these overreaching powers.

I would like to put on record my thanks to the Chairman of Ways and Means for selecting our manuscript amendment, new clause 18, which was obviously tabled in response to the Chancellor’s shock announcement this morning at 11 am that the UK Government’s flagship energy price guarantee policy, which we were told would last for two years, will now end in April 2023. People are already worried about the cost of living and the cost of the energy crisis, even with the support currently pledged, so many millions more will now be even more worried.

When the Chancellor gave his statement to the House later, he committed to at least some form of Treasury review in a modified scheme to protect the most vulnerable, but that in no way negates the merit of new clause 18. Given the mistakes and the recent track record of this shambles of a Government, it is surely in the House’s interest to set the parameters of a review and the considerations required for a new scheme post April 2023. The shadow Minister said that 28 days is too short a timeframe. I would argue that it is more than time enough for a Secretary of State to report back to Parliament and try to give households some certainty going forward.

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[Graham Stuart]

There are many statutes that include the word “may” from which we can take it that the Government will do what is set out. I am pleased to say that it is absolutely our intention to ensure that those off grid are treated comparably to those on grid.

[Peter Aldous]

The past 10 years have been remarkably successful, with the offshore wind industry and the Government working hand in hand. The industry has raised genuine concerns, which I briefly outlined in relation to clauses 16, 19 and 21, about the direction of that relationship and how it is being imperilled. Will the Minister agree to meet the industry and address those concerns as the Bill progresses?

[Graham Stuart]

As my hon. Friend would doubtless expect, I regularly meet energy companies. I have absolute confidence. One of my biggest concerns when we were looking at the package was to ensure that there are no disincentives to investment in renewables. It is noticeable that the EU has come up with a scheme. We are talking about prices linked to gas that are completely outwith any of the expectations of those who run long-standing nuclear and other low-carbon production. This is an intervention that deals with prices well beyond any prior expectation. It will therefore not disincentivise or undermine any existing business plans.

The contracts for difference that this Government brought in are now being mimicked around the world. In the last auction, 11 GW came in: so successful was it that we are now moving to annual auctions and CFDs. It is also worth saying, on the record, that renewables obligation certificates and other support mechanisms are being entirely honoured; this measure is merely about the spot price, which is excessive. We will come forward with further proposals in due course and will consult with the industry and others to ensure that we act in a way that does not disincentivise investment.

Question put and agreed to.

Clause 1 accordingly ordered to stand part of the Bill.

Clauses 2 to 30 ordered to stand part of the Bill.

New Clause 3

Report on additional expenditure treated as incurred for purposes of section 1 of the Energy (Oil and Gas) Profits Levy Act 2022

“(1) The Secretary of State must, within six months of the date of Royal Assent to this Act, publish and lay before Parliament a report on the effect of reducing the amount of the allowance under section 2(3) of the Energy (Oil and Gas) Profits Levy Act from 80% to 5%.

(2) The Report must set out projections of the effect of the reduction set out in subsection (1) on domestic and non-domestic energy bills.”—(Dr Whitehead.)

This new clause requires the Secretary of State to produce a report assessing the impact of reducing the investment allowance for oil and gas companies as set out in the Energy (Oil and Gas) Profits Levy Act from 80% to 5%, and in particular to assess such a reduction’s impact on domestic and non-domestic bills.

Brought up, and read the First time.

Question put, That the clause be read a Second time.

New Pylons: East Anglia

Peter Aldous Excerpts

Tuesday 19th July 2022 Westminster Hall

[Peter Aldous (Waveney) (Con)]

It is a pleasure to serve with you in the chair, Mr Stringer. I offer my condolences to my hon. Friend the Member for Harwich and North Essex (Sir Bernard Jenkin) for his loss. I congratulate him on his choreography to secure the debate, which is ultimately about the roll-out of zero carbon renewable energy on what is likely to be the hottest day ever recorded in the UK.

The transition to net zero provides enormous opportunities for East Anglia to be the engine room of the UK, bringing new sustainable and rewarding jobs not just for Waveney and Lowestoft, which I represent, but across the region. If we get it right, we can be a global exemplar of how to deliver the transition. That, in turn, will create enormous export opportunities.

The case for offshore wind is compelling. It is now the lowest-cost technology for generating electricity. Energy bills continue to rise, and being able to transport and deliver more offshore wind across the UK will reduce bills. We need more homegrown green electricity to move away from Russia’s influence. The weather today provides a snapshot of our future if we delay action to reduce carbon emissions.

National Grid’s East Anglia green energy enablement project, known as GREEN, should be set in the context that approximately one third of today’s UK energy demand can be met by the energy that will come into East Anglia by the end of this decade. While much work has taken place to upgrade the existing transition network, it needs significant reinforcement. GREEN is the preferred option that National Grid has worked up in accordance with the existing regulatory framework, which includes the relevant national policy statements and the so-called Holford and Horlock rules.

I acknowledge the desire of all right hon. and hon. Members, on behalf of the communities that they represent, to consider an offshore option, but it would have been disingenuous of National Grid to have consulted on such proposal, knowing that the current policy and regulatory framework within which they operate would have discounted it. In due course the Government might wish to amend the national policy statements.

It should also be emphasised that we are at an early stage of the option appraisal and assessment process, with a statutory consultation and an examination in public to follow. There is therefore an opportunity for those concerned about the proposals to engage further with National Grid, following up the meetings they had yesterday and probably before, to address their concerns.

[James Cartlidge]

My hon. Friend is perfectly reasonable and has great passion about offshore wind, as we all do. He is perfectly entitled to make those points, but this is not a parallel universe. There is a sub-sea link going ahead off East Anglia called Sea Link 1. Our view is that we need far more of that. To quote National Grid about the justification:

“By connecting East Anglia and Kent, Sea Link will provide the additional network capacity needed to enable the import and export of wind energy to and from Europe.”

If it is not in policy, how can we be in a parallel universe where we are going ahead with sub-sea link off East Anglia? Our view is that we need more of them to build a connected offshore grid.

[Peter Aldous]

I thank my hon. Friend for his intervention and I am about to address his point and highlight why that alternative is not viable under the existing framework. Taking into account the framework within which National Grid operates, I would make the following high-level comments on their proposals. First, they have presented the most economically advantageous solutions, as they are bound by the UK Government to do. To move it offshore not only is technically challenging but will cost an estimated 10 times the current proposal—a cost that will ultimately be paid by the consumer. To bury the cable along the entire route not only would have a huge impact on the environment—as 150-metre-wide trenches are dug—but would increase the cost some 14 times.

While other regions have benefitted from subsea links, the scale of the challenge in East Anglia is much larger, with significantly higher amounts of potential electricity needing to be delivered into the grid. To do that without multiple connections coming ashore, together with East Anglia GREEN, would be similar to redirecting traffic from the M25 on to the A140—that tortuous route, which East Anglians know well, that runs from west of Ipswich, via Norwich, up to Cromer.

[James Cartlidge]

On a point of information, as it were, the sea link that I am talking about, which my hon. Friend said cannot go ahead under policy, is approved. National Grid will be going ahead with the link; it will be going from Sizewell to Kent. It will be going ahead partly because it gives more resilience to the nuclear power station, if we are completely frank. The point is that it is a reality. The justification that National Grid uses is the same one that we want to see from Sea Links 2, 3 and 4. “Sea Link 2” was rejected. The sea link that we are talking about has been approved and the current policy framework allows approval of undersea connection off East Anglia. As far as we are concerned, the quantity is too low compared with other parts of the UK.

[Peter Aldous]

I thank my hon. Friend for his intervention and I am sure that the Minister will pick up on that in his speech. From my perspective, I think it is wrong to dismiss the concerns of the communities that the new pylons will run through, as we have heard from all colleagues today. The way forward at this early stage of the consultation process is for them to work in partnership with National Grid, developers and local and central Government to mitigate the impact. Developers are showing a willingness to do that.

In Norfolk, Vattenfall is delivering its Norfolk offshore windfarm zone by pursuing a co-ordinated approach to the onshore element of the transmission. Business organisations, such as the East of England Energy Group, Net Zero East, Opergy and the New Anglia Local Enterprise Partnership, together with the East Wind Offshore Cluster, are developing new ideas to help address future connection. That includes collaborative project design with shared or modular grid connections, and encouraging and facilitating hybrid projects such as wind to hydrogen and wind to storage.

I acknowledge the worries that all my colleagues are articulating on behalf of their constituents. However, there must be no holdup or delay in the roll-out of the offshore wind projects off the East Anglian coast. Already, they are making a significant contribution to the local economy. ScottishPower Renewables has a £25 million operations and maintenance base in the Hamilton dock in Lowestoft that is already running and providing jobs for people in my constituency and across Suffolk and Norfolk. ScottishPower Renewables is also planning to invest a further £6 billion up to 2030 as part of its East Anglia hub development. Such projects provide a once-in-a-lifetime opportunity, creating new, exciting and well-paid jobs for local people, which is vital as part of the levelling up process. They are also critical for the overall prosperity of East Anglia and for us to play our role in mitigating the impact of climate change, which we are feeling so forcefully today.

Oral Answers to Questions

Peter Aldous Excerpts

Tuesday 12th July 2022 Commons Chamber

[Greg Hands]

I completely agree with the hon. Lady in her analysis of the underlying issue: the big rise in global energy prices over the past 12 months. That is exactly why we are taking the action we are taking: £37 billion-worth of support for consumers and bill payers over the course of this year. That is a massive amount of Government support going into ensuring that people get the support they need to be able to pay those bills in the coming months.

[Peter Aldous (Waveney) (Con)]

I am grateful to my right hon. Friend for outlining those measures. I sense it will be a very bleak winter; the energy price cap will play a role, but it would help if it were augmented by a social tariff. Will he advise on whether there have been any discussions in Government about the introduction of such a tariff?

[Greg Hands]

I thank my hon. Friend for that thoughtful question. Obviously, all these things are under review, but I remind him that we replaced the social tariff with other support schemes for bill payers under the coalition. That remains our position, but we—both the Department and the Treasury, and indeed, the whole Government—study these positions and issues very closely indeed.

--- Later in debate ---

[Kwasi Kwarteng]

People will understand that the increase in the national insurance contribution was precisely to pay for the NHS backlog and for ongoing health and social care costs. In that context, it made sense.

[Peter Aldous (Waveney) (Con)]

T3. As my right hon. Friend has indicated, we had the very good news last week that ScottishPower Renewables had been successful in the contract for difference auction for its East Anglia Three offshore wind project. I would be grateful if he would outline what else is being done to provide certainty over future CfD auctions, which will allow offshore wind developers to invest more in order to meet the Government’s 2030 target and bring more jobs to coastal communities such as those in Waveney?

Future Hydrogen Economy

Peter Aldous Excerpts

Tuesday 14th June 2022 Westminster Hall

[Peter Aldous (Waveney) (Con)]

Thank you, Sir Edward; I will do what I can on that. It is a pleasure to serve with you in the Chair. I congratulate my hon. Friend the Member for Redcar (Jacob Young) on securing this debate.

The Government have adopted a cluster approach to the promotion of the hydrogen economy. I fully understand the rationale for doing so, but the regulatory framework must be sufficiently flexible, so that more decentralised areas, such as the east of England, are able to realise their full potential. That way, we can not only more readily realise our decarbonisation goals but create new and exciting jobs.

In East Anglia we have a real opportunity to be a major producer, user and exporter of hydrogen. We have an abundance of resources, infrastructure—both on land and at sea—that can be readily retrofitted, and developers keen to step up to the plate, provided that the right policies are in place. Hydrogen East, last month, produced its proposal and proposed next steps for developing a clean hydrogen cluster in the east of England, which I shall forward to my right hon. Friend the Minister for his bedside reading.

I shall briefly highlight the projects that have already been initiated and outline those bigger opportunities that are at the design stage, which can have a national—and quite likely an international—impact. There are some exciting projects, as I said, that are already in the pipeline that highlight the role that hydrogen can play across the East Anglian region. Those include the Freeport East project centred on Felixstowe and Harwich, which could see the early adoption of hydrogen for portside related operation and other local uses.

In Lowestoft, in my constituency, there is the Lowestoft PowerPark project, which can lead to hydrogen being used to power municipal buses and the refuse fleet, as well as the development of flexible generation, or flexgen. There is also the Bacton energy hub project, using the infrastructure laid down over 60 years to serve the oil and gas industry in the southern North sea. In addition, work is ongoing on the switchover of agricultural and other off-road vehicles, especially in remote rural areas.

Those schemes are very much paving the way and laying the foundations for larger projects, including the development of electrolysis capacity in conjunction with nuclear energy and heat to support the proposed development at Sizewell C, which will be the first ever major construction project to use hydrogen vehicles at scale.

Cadent and National Grid’s new project, Capital Hydrogen, which is due to be launched in the autumn, will produce hydrogen in East Anglia not only to serve homes and businesses in the area, but to power London. Cadent has also identified five points in the east of England where hydrogen could be injected almost immediately to kick-start the move towards the 20% hydrogen blend that can be used in the existing gas network, with no need to change appliances or adjust the network. That project will help to stimulate rapid growth in the amount of low-carbon hydrogen produced in the region, but to make it happen, the Government need to change the regulations and allow hydrogen into the network.

In conclusion, East Anglia does not want a hydrogen economy in which we adopt second-generation or third-generation technologies and assets from other areas. What we want is to maximise our own potential and build our very own bespoke network; what we need is a framework that incentivises small-scale projects to be developed, in the knowledge that they can be scaled up in due course. I hope that in his summing up, my right hon. Friend the Minister will confirm that he is up for that challenge.

Oil and Gas Producers: Windfall Tax

Peter Aldous Excerpts

Tuesday 1st February 2022 Commons Chamber

[Peter Aldous (Waveney) (Con)]

I recognise the enormous challenges that many households are facing in struggling to pay their energy bills currently, but unintended negative consequences would arise from such a tax rise, and I shall briefly outline what they are. I make these observations as an MP representing a constituency where many people work in the oil and gas sector, as chair of the British offshore oil and gas industry all-party parliamentary group, and as a supporter of offshore wind—a technology with which the oil and gas sector is increasingly collaborating.

First, it is necessary to set the context. Extraction of oil and gas on the UK continental shelf over the past 55 years has brought an enormous dividend for the UK. It has provided heat for our homes and businesses. It has created hundreds of thousands of well-paid and highly skilled jobs—expertise that we have exported around the world—and, importantly for successive Chancellors, much-needed revenue.

Extracting oil and gas in the North sea is not straightforward. It is a difficult basin in which to work. It needs a stable fiscal regime to attract investment, which is globally footloose. Some might say that, as we move towards a zero-carbon economy, that matters less, and that we should not be promoting further investment in the North sea. The response is that we need that investment as we will continue to use oil and gas, albeit in lesser amounts, for some time, and that funding is required to secure a just and optimum transition to a zero-carbon economy, where we can add to and enhance the skills and expertise built up over the last half-century.

It is necessary to highlight that the existing tax system is working well without the need for a windfall tax. The UK oil and gas industry will pay about £3 billion in extra corporation tax as a result of the global rise in gas prices.

It is appropriate to look at the consequences of previous windfall taxes—most recently, that of the coalition Government in 2011. After all such previous increases, the Treasury has had to offer incentives to claw back investment into the UKCS. That additional fiscal risk puts a cost premium on investments compared with the cost in most other nations, in particular Norway, which is experiencing an economic surge and is well ahead of the field in the race to zero carbon.

The North sea oil and gas industry has a key role to play in the drive towards a zero-carbon economy. That is evidenced in the North Sea transition deal from last March.

[Jonathan Edwards]

Will the hon. Gentleman reflect on the point raised by the hon. Member for Aberdeen South (Stephen Flynn)—that it was a huge mistake not to create a sovereign wealth fund in order to reinvest in the transition that we now face?

[Peter Aldous]

I thank the hon. Gentleman for that intervention. He may well be right, but that decision was made 55 years ago. Norway has, I think, far bigger resources than we do, and of course it is a much, much smaller population and country. So that is a debate for another time. I understand where he is coming from, but there is another side to that argument.

[Alan Brown]

The fact that Norway is a small independent country actually backs up Scotland’s argument for independence, does it not, considering Norway has a $1.3 trillion sovereign wealth fund?

[Peter Aldous]

I think we are actually on the same side of the argument here. Norway has done remarkably well and there are lessons to be learned. I was actually pointing to the fact that they have had that stable fiscal taxation regime, which has enabled them to be at the forefront of the drive towards a low-carbon economy.

The North Sea transition deal from last March has enabled the industry to deliver investment of £14 billion to £16 billion by 2030 in new technologies such as carbon capture and storage and hydrogen. While the supply chain of the oil and gas industry extends across the UK, activity tends to be concentrated on the North sea coast in north-east Scotland around Aberdeen, on Tyneside and Teesside and in East Anglia around Great Yarmouth and Lowestoft. These are coastal communities that have their own particular challenges and it would be very wrong to add to them at this particular time.

Off the East Anglian coast, there are exciting opportunities to promote a prosperous transition in the southern North sea by redeploying infrastructure and expertise from the oil and gas industry to create a leading hydrogen production and carbon capture, usage and storage hub around the Bacton gas terminal in the constituency of my hon. Friend the Member for North Norfolk (Duncan Baker). The energy price crisis presents many people with enormous challenges, and I look forward to scrutinising the Government’s proposals to address it, which will probably come forward next week. A windfall tax might, at first glance, be a compelling way of meeting that challenge, but it would have untold negative consequences.

Community Energy Schemes

Peter Aldous Excerpts

Tuesday 30th November 2021 Westminster Hall

[Peter Aldous (Waveney) (Con)]

It is a pleasure to serve under your chairmanship, Mr Betts. I congratulate the hon. Member for Bath (Wera Hobhouse) on securing the debate. It appears that debates on community energy are synchronised in the parliamentary timetable to take place every six months. On the one hand, that illustrates the groundswell of support from communities all around the UK to come forward with their own bespoke schemes. On the other hand, the fact that we are turning up every six months would suggest that we are not getting anywhere.

The rationale for empowering community energy schemes is compelling. To decarbonise our energy supply, our transport system and our heating networks we need a shedload of electricity. We need to be firing on all cylinders. Communities around the UK want to do their bit, to play their role in getting to net zero. Imposing a wind farm, solar farm or hydro scheme on a community might well run into resistance, but a community working up its own plans is more likely to get somewhere. Community energy schemes can also play a key role in revitalising local economies, creating sustainable, long-term jobs and promoting a truly circular economy.

To enable community energy to play that full role, regulatory barriers need to come down. Work on doing that needs to start straightaway. Last year, deployment was at a record low. At a local level, local authorities are developing their own climate action plans, and they want to get on with putting them into practice. The one-size-fits-all supply licensing regime—even if there can be regional demarcation—the complexity of the electricity market and the costs of entry are stifling community development. Local price signals are also heavily dampened, and are thereby out of sync with the Government’s stated desire to encourage flexibility at all levels.

There is a need for regulatory reform. I suggest that the following issues need to be addressed. First, it should be made possible to grant derogations from standard licence conditions and to grant supply licences for specific geographical areas or premises types. Secondly, the Department for Business, Energy and Industrial Strategy should ask Ofgem to provide guidance on the steps needed to support community energy and to establish a right to supply. Thirdly, Ofgem itself should give full consideration to the provision of a local supply licence. Fourthly, the reform of the supplier-hub model should be fully investigated. Finally, careful thought should be given to the effectiveness of the smart export guarantee scheme. That should include looking at the range, nature and uptake of SEG tariffs and considering what steps must be taken to improve the route to market for community energy projects.

Although having such consensual debates provides pleasant respite, we need to get on with making meaningful and significant progress on the road to net zero. Local communities have a significant role to play and, to ensure that they can do so, we need to remove those regulatory barriers. I acknowledge that in many respects that is complicated, and there is perhaps a tendency to put it in the “too difficult to do” column. However, there is very limited, if any, political resistance and, in fact, as we are hearing, a groundswell of grassroots support from all around the four nations. I thus request that the Minister ask his team to work with Ofgem to produce a strategy for removing those hurdles, so that, when we next debate community energy, perhaps in six months’ time, it will be when he is making a statement in the main Chamber setting out the steps that he is taking to unleash a wave of community energy projects.

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[Greg Hands]

Fantastic. I will leave some time for the hon. Member for Bath to reply.

Finally, earlier this year, we jointly published with Ofgem our new smart systems and flexibility plan and the UK’s first energy digitisation strategy, which was also developed with Innovate UK. Many of the actions set out in those documents aim to improve locational signals and help to enable smart local energy solutions, such as facilitating further growth of local flexibility markets.

In addition, Ofgem’s access and forward-looking charging review seeks to deliver more efficient choices about where users locate on the networks, and how they use the networks on an ongoing basis. The introduction of better price signals is important in ensuring that local generation is rewarded for the benefits it can bring to the system. It is recognised that, in some parts of the country, the costs of connecting to the grid can itself act as a barrier. Ofgem has therefore proposed to reduce connection costs for generation connections, such as community energy, by socialising more of the network reinforcement element of connection charges. Any changes are expected to come into effect from April 2023.

Many Members have argued in favour of local energy suppliers as an option to mitigate global gas price impacts, which I have already referred to, but risks would continue to exist. For example, local energy suppliers are likely still to need to be connected to the grid during periods of low generation. The failure of a local energy supplier without a grid connection would also leave customers without energy supply in the absence of an effective safety net.

The Government continue to support the development of new business models to supply energy consumers and help achieve our net-zero ambitions. In response to the unprecedented rise in energy prices this year, we are working closely with Ofgem to consider broader reforms to the overall energy retail market regulatory framework. We want a market that will support the longer-term transition to net zero, recognising the need for continued competition and innovation while also ensuring that suppliers have sustainable and resilient business models. That includes Ofgem exploring a move towards a more prudential regulatory regime, recognising that energy suppliers are managing complex financial risks and ensuring that the energy sector is resilient against a wide range of future scenarios, including prices rising further or falling sharply.

This debate is testament to the fact that there is clearly extensive cross-party support for the community energy sector, which we very much welcome. Just as importantly, there is a wealth of innovative schemes—

[Peter Aldous]

I am most grateful to the Minister for setting out so clearly the obstacles that need to be overcome to mobilise community energy schemes. Can he confirm that he and the Government are committed to overcoming those obstacles and removing those barriers so that, when we come back in a few months’ time, we can say that we have achieved tangible progress?

[Greg Hands]

I am certainly committed to examining the obstacles and speaking to my hon. Friend; I know his long-standing interest in this, as indeed in all energy questions—he is the Mr Energy of East Anglia. I am very happy to continue to engage with hon. Members, to look at the obstacles and to see what can be overcome, ameliorated or worked around. I am very keen to meet and continue the engagement with hon. Members. It is a little difficult for me to agree to remove the obstacles until we have scoped them out. The Department is well aware of the obstacles, but if my hon. Friend has suggestions for how to overcome some of them, I am interested in working with him and like-minded hon. Members.

Just as importantly, there is a wealth of innovative schemes across the country, run by passionate people who are committed to creating a cleaner and greener future for us all. I close by thanking the hon. Member for Bath once again for securing the debate.

Oral Answers to Questions

Peter Aldous Excerpts

Tuesday 16th November 2021 Commons Chamber

[Paul Scully]

The UK has one of the best employment rights records in the world. We have made good progress in bringing forward measures that add flexibility for workers while ensuring the protection of employment rights, such as banning the use of exclusivity clauses in zero-hours contracts and legislating to extend the right to a written statement of core terms of employment to all workers. We will continue to make sure that we consider options to improve clarity on employment status, and we will bring forward an employment Bill as soon as parliamentary time allows.

[Peter Aldous (Waveney) (Con)]

In Suffolk and Norfolk, investment in research and development is vital to making the most of the opportunities emerging in such sectors as low carbon and life sciences, as well as to tackling pockets of deprivation, particularly in coastal areas. It is thus concerning that, in the Budget Red Book, the east of England is coupled with London and the south-east as an area from which spending on R&D will be diverted and in which it will be discouraged. Will my right hon. Friend work with his colleagues across Government to ensure that this discrimination against Suffolk and Norfolk is removed and is not included in the levelling-up White Paper?

[Kwasi Kwarteng]

I pay tribute to the fantastic work that my hon. Friend has done representing his constituents over 11 and a half years. He will know that I personally, as a Minister, have always been committed to the east of England. I have visited him in Lowestoft, I have visited offshore wind projects, and I would be very happy to speak to him about how we can drive the R&D programme and how East Anglia and his constituents can benefit from the UK’s science superpower status.

Nuclear Energy (Financing) Bill

Peter Aldous Excerpts

2nd reading
Wednesday 3rd November 2021 Commons Chamber

[Peter Aldous (Waveney) (Con)]

I am pleased to speak in support of this Bill, which facilitates the provision of a secure energy supply, will ultimately keep down consumers’ bills, and is crucial to achieving our net zero obligations. Specifically, along with the announcement in last week’s Budget, the Bill paves the way for the construction of Sizewell C in Suffolk, which can bring enormous benefits to the county, to the Waveney area and to Lowestoft.

We need new nuclear, as it provides energy security. It is the only proven technology that can supply low-carbon baseload at scale. It complements, rather than competes with, the growth of renewables—in particular, in an East Anglian context, offshore wind. It also promotes the development of other clean technologies, such as hydrogen, which is planned at Sizewell, direct air capture and, in due course, small modular reactors.

The funding mechanism presented in the Bill is the regulated asset base model, which, with the right safeguards, has the advantage of driving down the cost of capital for such large infrastructure projects, acts as a catalyst for private sector investment and, according to Government analysis, can lead to savings to consumers of at least £30 billion.

Along with offshore wind, Sizewell C can bring great benefits to the local Suffolk and East Anglian economy. It is estimated that during the 12-year construction period, £2 billion will be put into the Suffolk economy. During that period, there will be three apprenticeship cycles and 1,500 apprenticeships can be created. This is an opportunity to leave an enduring legacy of knowledge, skills and infrastructure which in the long term, once construction has been completed and Sizewell C is operational, can make Lowestoft and Waveney an attractive location in which to set up and grow a business.

There is much work to do, but a good start has been made, with Sizewell C and East Coast College signing a memorandum of understanding to deliver the skills needed for this and other major projects in the area. It includes support for a civil engineering campus at Lound, to the north of Lowestoft; engagement with the Energy Skills Centre in Lowestoft itself; and collaboration on welding and fabrication capacity and capabilities.

The Bill and the hive of activity over the past 10 days are extremely welcome, although some might say 20 years too late. Subject to the development consent order being approved, let us get on with it and, in doing so, enhance our energy security, help to propel us along the road to net zero, and bring enduring jobs and prosperity to local people in Suffolk and in my constituency.

Enabling Community Energy

Peter Aldous Excerpts

Thursday 1st July 2021 Westminster Hall

[Peter Aldous (Waveney) (Con)]

It is a pleasure to serve under your chairmanship, Sir David. I congratulate the hon. Member for Bath (Wera Hobhouse) on securing and leading this debate and the hon. Member for Ceredigion (Ben Lake) on his supporting and campaigning work.

On 10 June last year, I introduced the Local Electricity Bill. Unfortunately, due to the pressures on the Parliamentary timetable, the Bill made no further progress. What it did do was vividly illustrate that there is an enormous appetite from all corners of our four nations for an upsurge in community energy projects.

While credit should go to the campaigning work of Power for People, it is abundantly clear that local councils, cities, towns and villages want to play their part in the transition to net zero. This is not a straightforward journey, and we need to use all the tools in the box to ensure that we reach our destination on time and, hopefully, after a smooth ride. This means removing those regulatory barriers that currently prevent community energy from playing its full role.

The main obstacle prohibiting local communities from getting involved is that the current supply licensing regime is highly complicated, national in scope and has onerous credit requirements. It is a one-size-fits-all approach, heavily skewed in favour of the status quo. There is an exemptions regime for supply of less of 5 MW and a Licence Lite supplier licence, but these are not fit for modern purpose.

There have been recent reviews by both Ofgem and the Department for Business, Energy and Industrial Strategy into the current energy supply licensing arrangements, and there is an acknowledgment that the current regime is opaque and difficult to interpret. However, as yet there is no route map setting out the path to reform. The Government now need to commit to that regulatory reform, reaffirm support for community energy and remove those values. They should start by answering a number of questions, which I will list.

First, what has happened to follow up on Ofgem’s derogation policy review and other calls for evidence on aspects of the energy supply market? Does Ofgem intend to progress its consideration of a local licence?

Secondly, as indicated in the energy White Paper, does BEIS intend to ask Ofgem to provide latitude in the supply licensing regime for local suppliers?

Thirdly, as part of its ongoing review of the licensing derogation review, will BEIS consider widening the exemptions regime to enable local supply?

Fourthly, when is Ofgem planning to issue its review of the smart export guarantee and come to a conclusion on potential enhancements to provide a more certain route to market for community providers?

Fifthly and finally, are the Government proposing to consult more generally on community energy and local supply in advance of the net zero strategy?

This is a highly technical and complicated subject. I shall be writing to the Government and asking those questions. It would be easy to put this whole matter into the “too difficult to do” tray, but that would be a dereliction of duty. We would be letting down those thousands of communities who want to play their part and get involved. The Government, parliamentarians and Ofgem need to work together to get over those barriers. I hope that the Minister will indicate a willingness to do so.