Domestic Gas and Electricity (Tariff Cap) Bill

Rebecca Pow Excerpts

Wednesday 18th July 2018 Commons Chamber

[Claire Perry]

I thank my hon. Friend for that intervention, because it enables me to say four things. First, I am grateful to the noble Members of the other House, because legislation is always better when it is scrutinised carefully. I think amendment 1 is helpful, so I am not unhappy to have the chance to talk about it.

Secondly, the new chair of Ofgem, Martin Cave, who will shortly take up his post, is a brilliant campaigner in support of the idea that customers should benefit from this regulated energy market. Indeed, I think he proposed the original idea of a tariff price cap. His appointment and the Bill will both help to strengthen Ofgem’s powers. Members will know that he wrote to the Chairman of the Business, Energy and Industrial Strategy Committee—I think it was only last week—setting out Ofgem’s determination to use its powers as widely as possible.

Thirdly, I reassure my hon. Friend that I have come to the House from a meeting with Ofgem, at which we discussed its progress on the price cap. That is well under way, and Ofgem has an extremely good team working on it. Ofgem has already published various technical papers setting out the methodology behind the cap calculation, and it intends to publish in full the details of that in very short order. That will give everybody a chance to scrutinise the cap and make sure that there is nothing untoward.

Fourthly, I wrote to the chairmen of the big six—I think they are all men—last week setting out that the Government would take an extremely dim view of companies that sought to frustrate the introduction of the cap, for which we have all worked so hard, by some sort of legal challenge; and that instead they should work with Government in this exciting time in the energy markets and look to their own activities to see how they can drive down costs, and drive up efficiency and customer service.

[Rebecca Pow (Taunton Deane) (Con)]

On that note, does the Minister believe that the Bill will narrow down competition, and thereby affect prices, or increase it? Competition is generally viewed as good for a market, because one tends to get lower prices as companies try to attract customers.

[Claire Perry]

I strongly believe in competitive, well-regulated free markets. Indeed, in this market there are now more than 60 energy suppliers, all bidding for our business. I have recently switched again to a company that appears to be offering a very good green tariff. However, the problem, and the reason for the Bill, is that there is a very large group of customers who are sticky—who stay on expensive standard variable and default tariffs because they do not know how to switch, or they are not aware that they can. We can all think of grandparents, parents and others who fall into that category—it also includes young people who are renting accommodation—and they tend to be the furthest from the white heat of the switching market.

Understanding what the Bill does to the economic conditions in the market is, of course, an important part of Ofgem’s role. To go back to the original CMA report, however, we also know that the current pricing practices result in £1.3 billion of what it described as “excessive” returns, and we expect that number to come down. If you will indulge me, Madam Deputy Speaker, I wanted to make sure that the House was aware of that.

It is important that we have a level playing field for companies in the market. I have received representations stating that the customer accounts threshold for offering warm home discounts and ECO should be dropped to ensure that more companies can offer them to customers. We introduced legislation recently to reduce that threshold from 200,000 to 150,000, in increments of 50,000. Customers in receipt of warm home discounts will have a lower chance of losing them if they switch.[Official Report, 4 September 2018, Vol. 646, c. 2MC]

I hope the House agrees that amendment (a) is the most appropriate response to the concerns that have been raised, and that it will be welcomed by Members in this place and the other place. I hope that we will be able to move swiftly on this issue and keep our remarkable outbreak of cross-party consensus going, because I think the Bill is an absolutely vital piece of legislation.

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[James Heappey]

What a joy it is to be in this Chamber when consensus abounds, after a couple of days of tearing strips off one other. It is really rather nice to be in here, all agreeing. That has rather characterised the progress of the Bill throughout its time in this place and in the Bill Committee, on which I had the privilege to serve. I think it is right that we seek to remove the amendment that the Lords have sent back, but I am glad that a compromise has been agreed between the two Front-Bench teams and I think that the amendment in lieu that we have proposed is very sensible.

Since the Bill has been delayed by this extra lap in Parliament, I think it is worth while to rehearse the arguments once again. The price cap is only a part of the challenge, so I want to add a few other things to the exhortation from my hon. Friend the Member for Stirling (Stephen Kerr) about smart meters. The Government must push on with those very urgently, because the savings from them will be far greater than the savings that we will achieve for our constituents from this Bill.

First, on decentralised generation, putting storage in behind the meter and aggregated demand-side response, I know that the Minister is looking at what comes after feed-in tariffs when they start to run out next year. I hope that she can see merit in finding a mechanism to replace them that really unlocks the market for people who want to install generation in their homes or businesses, storage, demand response and the capacity that comes from electric vehicles.

Secondly, I hope that we can send a strong signal to industry and the regulator over the delivery of heat as a service. Heat as a service is a huge opportunity for energy efficiency to become the responsibility of the supplier, not out of obligation, but because it sees an opportunity to make bigger margins by providing energy more cheaply and efficiently. If we can make that happen, we will secure huge savings for consumers. Thirdly, as we replace the green deal, let us allow storage to be a part of this so that again people can find savings. Fourthly, on replacing the ECO, the consultation has been completed and responses have been had, and I know that plenty of tech companies have made representations for smart thermostats and other clean tech to be included within the ECO catalogue. Let us make that the case.

We have put in an awful lot of time, in this place, the other place and in Committee, to deliver a saving to our constituents of around £100. That is not to be sniffed at, but we can prove to an awful lot of people that an enduring price cap is not the answer by getting all sorts of other things right at the same time. Energy efficiency, storage, the flexibility of demand response and decentralised generation have the potential to slash bills to a fraction of what they currently are. Let us not let this price cap distract us from the real prize, which is huge savings for our constituents from clean tech.

[Rebecca Pow]

I welcome the Bill, as it places consumers at its heart. That is really what we are talking about. In particular, I welcome the amendment in lieu, which is a tweak but a valuable tweak that makes the Bill really work. I also reiterate what my hon. Friend the Member for Wells (James Heappey) said. How wonderful it is to have unity in the Chamber after these last few days. It is welcome and a lovely feeling.

[Alex Chalk (Cheltenham) (Con)]

It’s quite unsettling.

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[Rebecca Pow]

Quite unsettling, yes.

I believe that pressing for an absolute cap over a relative one is the right way to go. As the Business, Energy and Industrial Strategy Select Committee stated, a relative cap could force cheaper energy tariffs to disappear, harming consumers, not protecting them. That would run counter to the sentiment of the Bill. As we have heard, Ofgem will be given the task of making the cap work effectively with its formula and will be responsible for setting the cap and reviewing it every six months. As outlined by my hon. Friend the Member for Weston-super-Mare (John Penrose), it is beholden on Ofgem to get this right and hold people to account, otherwise it will not have been worth while. It is vital that energy companies do not take advantage of any price cap and lift their tariffs to the maximum allowed. As I mentioned earlier, the energy sector needs more price competition to encourage lower prices, and an absolute cap can help to achieve this.

I am delighted that the Government will require the Gas and Electricity Markets Authority to protect consumers beyond the end of the energy price cap. Energy companies must not slip back into their old habits as soon as the cap is lifted, putting ordinary people back in the position they were in before the cap and leaving them paying over the odds. The Bill will ensure better value for money for many people who, frankly, have been taken for a ride and been paying over the odds for the self same energy that the person down the road has been getting cheaper.

As the Minister stated, it cannot be fair that between 2012 and 2015 customers paid £1.4 billion more than they ought to have done. In 2016, this escalated to an incredible £2 billion. As I have said before, many of these people fall into the “vulnerable” category. Many are elderly. My constituency and wider Somerset have a great many elderly people. The number of over-75s is set to double in the next 10 years and they could be the people who would have been adversely affected. The Bill will help them. They are the people who do not switch very often, as are younger people and tenants. My children, in their 20s, have raised this with me. The Bill will help them. It is right that the cap system should be temporary. It is an artificial lever to control the market for a short while and is being applied in the interests of consumers. This is the right way to go, as it will still enable competitiveness in the market, which is essential. We want the market to work better for everybody.

As other Members have said, it is essential for us to engage all the different methods in the energy market, such as smart meters—we must get them right—and technology, including data-driven technology. What has not been mentioned before, however, is the need to encourage people to use less energy. There are now many devices on the market that we can put in our homes to ensure that we do not waste so much of it, and I shall be presenting a ten-minute rule Bill on that subject fairly soon. We also need even more investment in renewables. If we are to hit our clean growth strategy targets, we must do all those things, and I am delighted to say that the Government are indeed doing them. We are going in absolutely the right direction.

Nuclear Power

Rebecca Pow Excerpts

Monday 4th June 2018 Commons Chamber

[Greg Clark]

I am grateful for the hon. Gentleman’s welcome. He knows very well the potential of the development for his constituents and those beyond. I had the pleasure, during the Anglesey Day he hosted, to meet many of the companies that would benefit. It is the case, I think, that some young people already working on the site have been to Japan for training purposes, deepening their skills and broadening their horizons. They will be very important engineers of the future in the UK. I am delighted that, subject to the success of the negotiations, this opportunity will be available for them.

[Rebecca Pow (Taunton Deane) (Con)]

Does my right hon. Friend agree that, particularly with the electrification of more of our transport and heating, new nuclear is an essential part of providing the right energy load—including Hinkley Point C, adjacent to my constituency, with all the spin-offs it will bring—to meet our Government’s highly commendable carbon reduction commitments at least cost?

[Greg Clark]

I am grateful to my hon. Friend and I agree with her that nuclear should be a part of our energy mix. To be resilient, we should have a diverse energy mix. It is important that the cost of any project should be acceptable and affordable for bill payers as well as taxpayers. That will be an important principle in the negotiations, but if we are successful in that, it will make the contribution my hon. Friend describes.

Oral Answers to Questions

Rebecca Pow Excerpts

Tuesday 1st May 2018 Commons Chamber

[Claire Perry]

I am always happy to meet the hon. Gentleman, as he knows. It is interesting, because on average consumers are paying less and have the same level of satisfaction as they have with other heating options. Well designed and well regulated frameworks can really deliver a benefit for consumers, which is why we are investing more than £300 million, but the hon. Gentleman and I should get together to discuss his constituents’ particular concerns.

[Rebecca Pow (Taunton Deane) (Con)]

rose—

[Mr Speaker]

Forgive me, but I want to get to other colleagues’ questions as well, so if it is a short sentence, I will take it, but if it is not, I will not. No? All right.

Domestic Gas and Electricity (Tariff Cap) Bill

Rebecca Pow Excerpts

3rd reading: House of Commons & Report stage: House of Commons
Monday 30th April 2018 Commons Chamber

[Rebecca Pow (Taunton Deane) (Con)]

I want to put to my hon. Friend something that has been said by MoneySavingExpert, which is that a relative cap would simply result in firms withdrawing the cheapest deals—the shadow Minister mentioned that—and create the “worst of both worlds”. We do not want to fall into such a trap, as some consumers on expensive tariffs would still be paying more than they need to while many firms would not offer the cheap deals they currently offer.

[John Penrose]

That argument has been advanced for both a relative cap and for an absolute cap; some people argue that it applies to both. We heard earlier a rather good explanation of why the argument does not really apply, which is that it would be commercial suicide, or a commercial kamikaze effort, for anybody to try to raise their prices in the switching market, which is highly competitive, because they would very rapidly start losing customers hand over fist. I understand that argument, but I do not think it would be relevant in practice.

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“If you have an absolute price cap, you will obviously see that the affordability of the lower tariffs for the big six will be less: you will see some shrinkage between the highest price and the lowest price. That is what we are trying to do.”––[Official Report, Domestic Gas and Electricity (Tariff Cap) Public Bill Committee, 13 March 2018; c. 5.]

[Rebecca Pow]

rose—

[Mr Deputy Speaker (Sir Lindsay Hoyle)]

I call Rebecca Pow.

[Rebecca Pow]

Thank you, Mr Deputy Speaker; I am bringing up the rear, as they say.

[Mr Deputy Speaker]

I was not going to ignore you.

[Rebecca Pow]

Thank you.

I am delighted to speak in support of this Bill. It focuses on a temporary managing of the energy market, which has not been managed well enough, which is why we are talking about the whole concept of this Bill. I will speak briefly, and only to amendments 7 and 9. I do not disagree with the sentiment of, and intention behind, these amendments, and above all it is, of course, vitally important that we look after the vulnerable in society, in particular in terms of energy, and especially when the market is deemed not to be functioning properly.

It is crucial that people can keep warm and cook the right food and that they are comfortable and well, but this Bill already addresses that. It places a new set of duties and powers on Ofgem to protect consumers on variable and default tariffs, and Ofgem already has a duty under the electricity and gas Acts to have regard to the need to protect vulnerable customers. We should also remember that in 2016 the Competition and Markets Authority made an order, following its energy market review, to put in place a safeguard tariff for customers on prepayment meters, and about 4 million people have benefited from that. Last year, Ofgem took the decision under its principal duties in the electricity and gas Acts to extend the safeguard tariff to customers in receipt of the warm home discount.

Ofgem must have regard to the need to protect vulnerable customers when exercising its functions under these Acts, and I would argue that that is already being done. However, I agree with my hon. Friend the Member for Stirling (Stephen Kerr) that it is crucial that Ofgem uses its powers and uses them well and that its feet are held to the fire in this respect—to use an energy term. It also introduced an enforceable vulnerability principle into the domestic standards of conduct, making it clear that suppliers must do more to treat vulnerable customers fairly, and this must be done.

Realistically, therefore, these amendments seem to be overkill, placing new obligations on Ofgem that are not necessary; however, it must use the powers it has. Also, as many Members have said, the powers in this Bill are only temporary: the price cap operated by Ofgem is not intended to last beyond 2023, and I fully support that. By contrast, Ofgem’s powers to protect vulnerable customers under the electricity and gas Acts are not limited.

It is necessary to bring in the fairness that this Bill has right at its heart. Its main aim is to place a new set of duties and powers on Ofgem to protect customers on standard variable tariffs. That is what this is really all about; far too many people have been taken for a ride. In 2016, about 11 million people were paying a total of £2 billion over the odds for their energy; that is simply not right. Individuals are said to be paying about £300 too much. Many people falling into this category are the elderly, and I am speaking on this Bill in part because Somerset has a particularly ageing population, and they have been taken advantage of, as indeed have many young people who are in rental accommodation because they are tied to one form or another of payment.

We must not mess about any further with this Bill. We must be able to see the wood for the trees; we do not want to bring in another lot of suggestions and regulations that delay the Bill, because it is more important than ever that its measures come into operation this winter. It is essential that we protect the vulnerable, but it is not necessary to legislate further on vulnerability, as suggested by amendments 7 and 9. I hope that on this basis the amendments will be withdrawn.

[The Minister for Energy and Clean Growth (Claire Perry)]

I thank all colleagues here this afternoon for their intelligent and sensible contributions to a debate that has run for several years. We are now within striking distance of bringing this Bill to a conclusion and sending it off in good order to the other place. I particularly thank my relatively close—geographically speaking—party colleague, my hon. Friend the Member for Weston-super-Mare (John Penrose), whose dogged and intelligent scrutiny, along with that of his colleagues, has made this a much better Bill, and I pay the same compliment to the hon. Member for Leeds West (Rachel Reeves) and her Select Committee. This shows that when we work together we can deliver good legislation. I will respond to the amendments discussed today and my hope is that in doing so no Member feels obliged to press their amendments to a vote.

New clause 1, which we discussed at length in Committee and again today, seeks to introduce an ongoing, almost perpetual, relative price cap once the absolute price cap is removed. Like the Member speaking for the Scottish National party, the hon. Member for Kilmarnock and Loudoun (Alan Brown), I am a little perplexed by this amendment, as I said in Committee. The hon. Member for Southampton, Test (Dr Whitehead) has spoken so powerfully on many occasions against a relative cap and in favour of an absolute cap, and yet this new clause suggests bringing in the opposite: a relative cap on a perpetual basis. I will talk more about the issues we have with relative caps, but this is a little counterintuitive. It would also mean—this will be anathema to many colleagues who have spoken passionately today in support of a relative cap—effectively perpetual Government intervention in the energy market. There is strong agreement across the House in favour of competitive markets delivering the best for consumers. When those markets are broken, or regulation slips out of date, it is right to improve the powers of regulators, but perpetual Government intervention, particularly in setting prices, is not the way to deliver the best outcomes. Therefore, the new clause is not necessary.

Moving on to the comments on relative caps, Ofgem said in its evidence, which others strongly supported, that a relative cap will be gamed by the largest suppliers. If we introduce this hypothesis, it will be gamed. As my hon. Friend the Member for Eddisbury (Antoinette Sandbach) also pointed out, we also heard in Select Committee evidence sessions that there was overwhelming support for an absolute cap—now and then.

Domestic Gas and Electricity (Tariff Cap) Bill

Rebecca Pow Excerpts

2nd reading: House of Commons
Tuesday 6th March 2018 Commons Chamber

[Greg Clark]

I agree with the hon. Gentleman, and I was saying in response to my right hon. Friend the Member for Preseli Pembrokeshire (Stephen Crabb) that I think the regulator should be more agile in responding to the behaviour that had come about. In fact, the energy companies themselves should have recognised this, and one thing that they said to me was that none of them wanted to act individually and that they would prefer to have a consistent approach.

[Rebecca Pow (Taunton Deane) (Con)]

The Secretary of State is making a valid case for the Bill, which, after all, is all about fairness for the consumer, but will he comment on the fact that we do not want the Bill to reduce competitiveness in the industry—I am sure that it will not—and is that not key? Competitiveness has already done so much for the industry, and we want to encourage it, not reduce it.

[Greg Clark]

I quite agree with my hon. Friend. In fact, the Competition and Markets Authority found that, in effect, two markets were operating. There is a vigorous and highly competitive market, but among those consumers who, for whatever reason, trust the company of which they may have been customers for some time to reward them for that loyalty, there is an absence of competition. We need to change that, but, as I shall go on to say, the analysis shows that the market is not fully competitive at the moment and will take some time to get to that stage.

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[James Heappey]

My hon. Friend is indeed right. To resort to my former career as a soldier, I hope that the Government see this as a raid into the energy market, rather than an occupation.

In her opening remarks, the shadow Secretary of State made the important point that an amazing energy future is emerging in the margins of our current broken market, although I disagree with her analysis that the Government are not embracing that, because the clean growth strategy is a passionate embrace of those opportunities. Insurgent companies such as Octopus Energy are relishing bringing the new time-of-use tariffs to the market, giving consumers the benefits of fluctuating wholesale energy prices. Others are looking at how localised generation or aggregated shifts in demand might allow consumers to access cheaper energy or monetise their flexibility. Others still are looking at delivering heat and power as a service, often enabled by clean tech provided by the supplier for free, with the supplier then monetising the customer’s flexibility in order to make their margin. These and countless other innovations are accelerating our decarbonisation, increasing system flexibility—and therefore our energy security—and will mean lower bills for consumers.

We must also create an energy system that allows the full price-reducing power of clean technologies to bring down prices for the consumer. This will require significant regulatory change in order properly to unlock storage, demand-side response and the advantages of generating and consuming energy locally. We must also encourage the deployment of more renewables, no longer because they are the cleanest method of generation, although they still are, but because they are now so obviously the cheapest.

[Rebecca Pow]

My hon. Friend has great knowledge of this subject. Will he comment on the fact that we need to concentrate not only on energy efficiency, but on cutting energy waste, particularly in our domestic systems, because there is a lot of great new technology that could be harnessed?

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[Rebecca Pow (Taunton Deane) (Con)]

I am pleased to follow so many eloquent speakers, almost all of whom agree that this is a very sensible Bill.

I would like to begin with a question: can it be right that customers purchasing energy from the big six for some of the most basic things in life—simply keeping warm, making a cuppa, cooking the supper or running the washing machine—collectively paid some £1.4 billion more than they ought to have done between 2012 and 2015? In 2016, that figure escalated to almost £2 billion. As we have heard, that was the conclusion of the Competition and Markets Authority’s energy investigation. I am pleased to say that the Bill is intended to rectify that, which I am sure you will agree, Mr Deputy Speaker, is eminently sensible. Why? Because it is in the interests of fairness, of delivering for the customer and of giving better value to many people who quite frankly have been taken for a ride and have been paying over the odds for the self-same energy supply that others have got cheaper. In reality, they have been taken advantage of, as the hon. Member for Ynys Môn (Albert Owen) said.

We would not think that it was possible, but how has it happened? What we might call “active customers” are on the ball and save money by switching continuously, according to the prices on offer. Those people can save up to £300 a year by hunting out the cheapest deals. However, as we have heard, not everybody does that. Indeed, five out of every six households did not switch energy supplier in nearly a year between October 2016 and September 2017. That adds up to a cool 11 million households, although I am pleased that 4 million vulnerable households have been helped with an absolute price cap on prepayment meter tariffs.

The people in these 11 million households are on standard variable tariffs. They do not chop and change, but stick with the initial supplier. How are they rewarded for their faithfulness? By paying over the odds by up to £300 in a six-month period. That is itself a far from fair state of affairs, but it is even more scandalous that many of those staying on standard variable tariffs are those who can ill afford to do so. A high proportion of them are elderly. That is especially pertinent in a county such as mine, Somerset, where there is an ageing population. Between 1984 and 2014, the number of people aged 85 or more in Somerset increased by an incredible 170%, which is more than 18,000 people. The number of people aged 75 or more is projected to double in the next two decades, and the fastest-growing group is men aged 80 and over.

Those people should not be targeted and taken advantage of because they are not au fait with modern technologies such as surfing the internet to find cheaper energy deals. I am standing up for the elderly in particular—I run an older generation fair in Somerset, where I talk about these and many other things—and I believe that the Bill will definitely benefit elderly people in rural areas. We have a very high proportion of elderly people: two thirds of people in Somerset are over 65, and I believe that many of them will benefit from the Bill. Picking up the phone or checking on the internet is just not on many people’s agenda. A lot of them are already struggling to make ends meet, so we need to do everything we can to help them.

At the other end of the scale, the many young people who are renting accommodation also fall into the category of those on standard variable tariffs—they are often restricted from swapping energy suppliers by their landlord. I believe that the Bill will benefit them as well.

There is another category of people who are affected, whom I call the “mid-rangers”—my hon. Friend the Member for Weston-super-Mare (John Penrose) mentioned them—and I put myself and my family in that category. These people are really busy: they are working all day, and when they get home they are caring for their kids and they have to cook the dinner, take the dog for a walk and do all those other things. Are they really going to say, “I know what I’ll do tonight—I’ll pick up the phone or go on the internet to see whether I can get a better energy deal”? Truly, they do not do that, and they are the ones on SVTs.

I really believe that setting an absolute cap is a very sensible way of helping people in all those categories. It is not a price freeze, but a cap, as has been well pointed out. Ofgem will be given the task of making it work effectively, with a formula, and it will be responsible for setting the cap. I urge it to be transparent in doing so, because there must be no loopholes for big companies to game the system. It is absolutely imperative that companies do not take advantage of the cap and then raise all their bills to the top level; we have also heard much about that.

Ofgem will have a duty to report regularly on whether the whole system is to be expanded. The system is meant to be temporary, which is absolutely right. It is an artificial lever to control the market for a short while, and it is being applied in the interests of the consumer. I believe that this is the right way to go, as it will still enable competitiveness in the market, which is absolutely essential. We want the market to work better for everybody by continuing all the advances that are under way, such as smart meter technology and data-driven technology. If the market is made to work more efficiently, there will be more money for all companies to invest in renewables and to achieve our clean growth strategy.

On that note, I want to say that if we are talking about fairness in energy and better deals for customers, new technologies will play a very important part in the future direction of travel. Focus needs to be placed not just on energy efficiency, but on cutting the energy that is wasted, because a real concentration on such things could save consumers half their winter energy bills. I will give a couple of quick examples of gadgets that could be used. There is a small device—1.5 square inches in size—called Margo, which I saw only yesterday at the sustainable energy event in Parliament.

[Claire Perry]

Yes—very good.

[Rebecca Pow]

I believe the Minister opened the event. This gadget listens to the amount of gas in one’s meter and can hear how much gas is being used, and it has shown that customers are being overcharged by £40 to £50 a year because they are not being metered correctly. That is £1 million for all the people in Taunton Deane. The other gadget is a stored passive flue device, which uses waste heat from the boiler to heat water before it goes into the boiler so that it does a lot less work. It can provide a whole tank of hot water that can be used for other things. Overall, it will save the consumer money. [Interruption.] People are coughing to get me to wind up, but those new technologies are incredibly important and will play a part in the good work the Government are already doing on their clean growth strategy, cutting our emissions, reducing fuel bills and giving consumers a better and fairer deal. At the heart of that is the Bill, which I fully support.

Nuclear Safeguards Bill

Rebecca Pow Excerpts

3rd reading: House of Commons & Report stage: House of Commons
Tuesday 23rd January 2018 Commons Chamber

[Dr Whitehead]

I thank my hon. Friend for making that strong point. I recall that even the hon. Member for Stone (Sir William Cash) suggested during that debate that associate membership of Euratom could be effective in continuing those arrangements, which have served us so well over many years.

[Rebecca Pow (Taunton Deane) (Con)]

The hon. Gentleman has referred to the International Atomic Energy Authority. The Government have made it clear that we will be seeking new arrangements with it and that they will follow exactly the same principles as the current arrangements—that is, the right to inspect civil nuclear facilities and to continue to receive all the safeguards and reports. We should be confident that this Government are going about the issue in a serious, sensible and meticulous way.

[Dr Whitehead]

The hon. Lady makes the case for our new clause. If the Government are going about their business in a sensible and coherent way—I note the Secretary of State’s statement on 11 January on how the Government intend to go about conducting relationships with Euratom—it would be a good idea to place that procedure into the Bill, so that we can be clear about what we are about, what we want to achieve and how we will do so.

After all, it has been stated that this is a contingency Bill. We want to know what it is a contingency against and therefore how it should be framed in terms of what we should be doing in contemplating whether to bring it into operation. If we had either membership of Euratom or an associate form of membership, which might be fairly similar to that enjoyed currently by Ukraine but with a number of additional factors, this Bill would not be needed. The arrangements with Euratom would continue to be in place, rendering the Bill superfluous. We need to be clear about what we are debating.

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[Rachel Reeves]

Will the hon. Gentleman give way?

[Rebecca Pow]

Will my hon. Friend give way?

[Mr Jayawardena]

I will make some progress first.

The people we want to see in Britain—those who can contribute to our society, our economy and our communities—should be able to come here and contribute to our national life and national industries. Indeed, that is how we will continue to make sure that our nuclear industry goes from strength to strength.

[Rebecca Pow]

Would my hon. Friend give way on that point?

[Mr Jayawardena]

Okay.

[Rebecca Pow]

I knew he would, because my hon. Friend knows that my constituency is adjacent to the enormous new nuclear power station that is being built. We will get a large knock-on effect on employment, and indeed we have the first nuclear degree at the University Centre Somerset, which is in my constituency and the adjacent constituency. Does he agree that we need to keep these brains coming and ensure that this industry is growing and booming as we go forward? We are encouraging young people to go into it, and they want to know that there is a safe future.

[Mr Jayawardena]

My hon. Friend has guessed what is coming later in my remarks. I will come on to the future, but I want to focus now on the importance of nuclear, which I think everyone agrees is of key strategic importance to the United Kingdom. I am therefore pleased that Her Majesty’s Government have been clear that they aim to seek to maintain close and effective arrangements for civil nuclear co-operation with Europe and the rest of the world.

As we leave the European Union and enter, in my view—I accept that it might not be everyone’s view—an exciting and prosperous new phase in our kingdom’s history, where we are free to do what we need to do to put our people first and seek trade deals with friends around the world, it is through the cultivation of open, willing and free global markets, interested in innovation from Britain and the revenues that that trade will bring, that we will help to stabilise and boost the UK economy. In this new industrial revolution—perhaps the fourth industrial revolution, as has been championed by my hon. Friend the Member for Havant (Alan Mak)—nuclear power will form a vital part of the UK’s long-term energy mix.

In that context, I want to inform the House of how little of our energy comes from nuclear. Some 72.3% of France’s energy comes from nuclear, compared with 54.1% of Slovakia’s, 51.7% of Belgium’s, 51.3% of Hungary’s and 40% of Sweden’s. We are at less than half that percentage. I would be delighted to be told that I am wrong—I would be delighted if it were higher—but I am informed that it is less than 20%. Nuclear power, as a source of electricity to power millions of homes and businesses for decades to come, is not only clean, low-carbon energy, but reliable. It will also secure our energy, environmental and economic futures. It is therefore absolutely critical to get the regulation of it right.

We have heard about the deal to secure our first new nuclear power station for a generation. It will be built without resort to the public purse and will mean the creation of 26,000 new jobs. It is the sort of industry we want to incentivise in this country to create good new jobs for young people now and in the future. It will also mean energy security, as I have said, which is absolutely critical for our kingdom’s future prosperity, so it is critical that the right safeguards are in place.

It is important that the nuclear safeguards provided under the Bill are distinct from both nuclear safety measures and nuclear security measures. Those measures, which are respectively intended to prevent accidents and to put in place physical protection measures at nuclear sites—are not under the purview of the Bill. They are unaffected by our leaving the EU, because they are not responsibilities provided primarily by Euratom. Euratom has no role in setting security standards or in regulating or inspecting security arrangements in our civil nuclear sector.

Nuclear safety and security are regulated by the Office for Nuclear Regulation—very effectively to date, I might add—and it is the ONR that will assume responsibility for running our effectively equivalent domestic nuclear safeguards regime created under the Bill. That is why, again, I believe that the Bill should stand unamended. Furthermore—international safety and security considerations have been mentioned— the UK will remain a member of the International Atomic Energy Agency, of which we were one of the founding members in July 1957 and remain one of the board members. Our leading role in the IAEA, our work developing and complying fully with international standards and obligations on nuclear safety and security, and our commitment to responsible nuclear non-proliferation thus demonstrate that the UK has no intention of retreating from international standards in our new domestic safeguards regime.

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[John Woodcock]

I did try.

I would never accuse the Minister of complacency—he is not a complacent man—and I know that as Energy Minister he is giving much time to this matter, but although I do not think there is complacency from Ministers themselves, I am profoundly worried about the capacity in the system to deliver the new arrangements by the time set out. I agree with my neighbour, the hon. Member for Copeland (Trudy Harrison), on so much and we have worked together, but the idea that it is okay to be there or thereabouts in March 2019, at the time of transfer, is, I am afraid, bunkum. A level of certainty has to be written into our nuclear safeguarding regulatory arrangements.

Many Labour Members want our membership of Euratom to continue, howsoever it might be delivered in the future. The alternative at the moment is to rely on a Department for Business, Energy and Industrial Strategy that is bursting at the seams with all the things it has to deliver on Britain’s exit from the EU. I had a conversation a few months ago with someone whom I knew from my time as an adviser and who remains in the system. What he had to say about the number of staff looking at the Euratom issue in particular was frightening. There is not remotely the level of assurance that the House ought to expect if it is to give its blessing to the Government and not seek to write into the Bill a commitment to a transition period, which is eminently sensible while we try to work out whether we can stay for good.

Some Members have said that there is no certainty because a negotiation is in progress, but the new clause gives a degree of strength to Ministers, enabling them to say, “Parliament has willed that there needs to be a transition arrangement. Our Act—which is, of course, a contingency Act—makes clear that there must be contingency arrangements, and that is what we require from these negotiations.”

[Rebecca Pow]

Might I suggest that the new clause actually seeks to confuse? It appears to specify what should happen during the transition period, but it is unclear whether it is specifying what the United Kingdom should seek to be negotiating, or whether it is attempting to mandate the terms. It seems to be the opposite of what the Prime Minister set out in her excellent Florence speech. All the Opposition are doing is confusing the issue, which is leading to a lack of clarification for the nuclear industry which wants, needs and deserves it.

[John Woodcock]

The hon. Lady may be confused, but we are not, and the industry is not. The industry is strongly urging the Government—as they will know, if they are listening—and all Members to get behind a transition period while we examine the position, to decide whether we can reverse the wrongheaded decision to leave Euratom that was made—in all probability, unnecessarily—when article 50 was served. The alternative is to face a dire cliff edge that could do deep damage to civil nuclear production throughout the United Kingdom. I understand that the Minister is due to visit Sellafield for the first time later this week—

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[Drew Hendry]

No, I am going to make some progress.

The UK, as it presses ahead with the folly of Hinckley C, will need thousands of workers, many skilled in the nuclear industries.

[Rebecca Pow]

Will the hon. Gentleman give way?

[Drew Hendry]

No, I am going to make some progress. I may come back to the hon. Lady, but we will have to see.

Many of those workers will need to be skilled in the nuclear industries, yet current policy does not support the ability to get those workers if there is no concession on the movement of people, but achieving even that is put into a harsh light when it comes to getting highly specialist staff to meet the new safeguarding functions. Those positions are already challenging to fill. Nuclear inspectors do not live on every street—in fact, they are very rare—and they are in global demand. The Minister says that such staff are required only in the tens, but can he tell me today how many are in place? I offer him the opportunity to intervene. He was asked in November about recruitment. I am trying to get his attention, Madam Deputy Speaker. Will he tell us how the first phase has gone? I will offer him another opportunity to intervene and tell us how many recruits are in place. Is it 15? Is it 10? Is it five? Is it one? Is it none? How many nuclear safeguard inspectors have been set up?

Prospect and Unite the union have given evidence, and Ms Ferns from Prospect said:

“A reasonable approximation is several years—it is not a matter of months but years for people to be able to do that job…It is a small talent pool…even in the best of times.”

Many Members today have cited the testimony of Dr Mina Golshan, the deputy chief inspector and the director of the Sellafield decommissioning, fuel and waste division in the Office for Nuclear Regulation. She has said:

“I have been very clear from the outset in previous evidence sessions, and in discussions with industry as well as BEIS, that it would be unrealistic for us to expect to achieve an equivalent regime to what is in place currently by the time we officially leave Euratom, and that is March 2019.”

The BEIS Committee report, “Leaving the EU: implications for the civil nuclear sector”, states:

“To deliver the new domestic regime the ONR will need to double the number of its inspectors by 2019, and triple its numbers by 2021. Skilling-up the new recruits on time will present additional challenges, as even existing specialists will require 12-18 months of training to become an inspector, and generalists may need five years.”

Those are hefty timescales.

Let us look at the cost. So far, the Government have earmarked £10 million for all the operations in Euratom, yet we can already see that there are going to be much more expensive consequences for the UK. That £10 million figure is dwarfed by the £50 million of Euratom funding that the UK receives for the Joint European Torus project—JET—so it will be interesting to hear from the Minister how that funding is going to be replaced. Leaving Euratom and the JET project has been described as “bonkers” by Steven Cowley, a physicist at the University of Oxford and a former director of the Culham centre for fusion energy, which hosts JET. He is absolutely right. Can the Minister tell us how that funding will be maintained?

Can the Minister also tell us about our future in ITER, the project to build the world’s largest tokamak? The ITER agreement was signed in 2006 by China, the EU, India, Japan, South Korea, Russia and the US, and the building of the tokamak has been under way in France since 2010. The official start of ITER’s operation is scheduled for December 2025. Euratom also funds DEMO, a demonstration fusion power reactor planned to follow ITER by 2050. The UK is a key participant in ITER and sends information, results and design studies from its JET programme to the French site. This co-operation will continue throughout the Brexit process, but it is unclear what the impact of Brexit will be on this co-operation and the continuation of these programmes. Perhaps the Minister can advise us on that. We need to know all this information. Without it, we will need safeguards in place.

The hon. Member for North East Hampshire (Mr Jayawardena), who is no longer in its place, mentioned medical isotopes. He said that it was scaremongering to say that they would no longer be available, and that treaties would be in place to allow access to them. However, the critical point is not whether people can get the isotopes; it is that they have a very short half-life. Sometimes they have to be used within hours of being produced in order to maintain their effectiveness. If they are sitting at a border point because there is no customs agreement, they will be completely useless. Will the Minister tell us how we are going to put in place the necessary customs arrangements to prevent that from happening?

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[Rebecca Pow]

I am pleased to follow my hon. Friend the Member for Erewash (Maggie Throup) and all other colleagues who have spoken today in what I am sure everyone agrees has been a fascinating cross-party discussion. I want to contribute to debate because the Bill deals with a crucial issue that affects every single one of us and the safety of our nation. Getting the agenda and the legal framework right as we take the historic step of exiting the EU is imperative, because leaving the EU means also leaving Euratom—the European Atomic Energy Community—the body that sets the nuclear safeguards regime.

The Bill gives us the tools to ensure that an effective nuclear safeguards regime is established, enabling us to continue to meet international standards for nuclear safety, while maintaining the UK’s reputation as a responsible nuclear state. I have raised the question how we cope with leaving Euratom since the start of the discussions on EU withdrawal, always stressing that leaving the EU must not result in a weakening of our nuclear safeguards, on which we all rely and which are instantly recognisable on the global stage. I have often referred to the matter in wider speeches on the environment, because it is all related to the environment and is so important to us all.

I am confident that the Government have made it clear that future nuclear safeguards arrangements will continue to provide the quality, safety and robustness provided under Euratom and that we will continue to co-operate on standards. Our domestic regime will meet our international commitments on safeguards and nuclear non-proliferation standards. It is clear that the amendments proposed today—I listened carefully to the speeches made—would add nothing and lead only to delay and even obfuscation, especially the amendments relating to the transition period and an association with Euratom, which, as many colleagues have pointed out, simply is not possible.

The ONR, which already regulates nuclear safety and security, is the obvious route. It is also important to keep legislation relating to nuclear safeguards updated as they change on the international stage. The Bill will give the Secretary of State powers to do just that by updating existing international agreements once new agreements are reached.

Our nuclear industry is second to none on the world stage. It has a fine reputation, which we must maintain. Our standards have been a major draw in attracting investors to the nuclear industry in this country. Obviously, I am going to cite the Hinkley Point example, with its Chinese investment. One of the reasons that the Chinese want to engage with us is that we have very high standards on nuclear. That shows us off well on the wider stage and reflects well on us. Hinkley Point is the largest development site in the whole of Europe. I liken it to a James Bond film set. It is absolutely unbelievable how huge the development is. It needs to be seen to be believed. In energy terms, the power station will deliver 7% of our baseload energy, and it is low carbon, which is exactly the kind of energy that we are promoting, alongside all the other renewables. It is a clean source of energy.

Hinkley Point is not in my constituency but adjacent to it, and it has a massive knock-on effect for the people in Taunton Deane, from managers to engineers and from bus drivers to the caterers mentioned by my hon. Friend the Member for Wells (James Heappey). Ultimately, 26,000 people will be employed on the site. The industry is spawning many other jobs and creating a whole generation of nuclear businesses. My hon. Friend the Member for Erewash mentioned that she had a similar situation in her constituency with her micro-nuclear plants.

The first nuclear degree is operating partly from University Centre Somerset, which is in Taunton in my constituency. It is sponsored by EDF and the Ministry of Defence. It is critical that the industry should grow and enable all the young people who are doing this training to have a future. That is why the Bill is so important. We need the right checks and balances, so that we can go forward into a really positive future and be a world-leading industry. In mirroring Euratom, we are going to regulate civilian nuclear activity in the UK, including fuel supply, waste management—mentioned by my hon. Friend the Member for Copeland (Trudy Harrison)—and co-operation between nuclear states, which will be essential. I am confident that, through the ONR, we will achieve that, as well as new agreements with the IAEA.

I want briefly to touch on the subject of radioisotopes, because it has been raised with me by constituents. I welcome the cross-party work that is going on to ensure that there is no interruption in the continuity of supply of radioisotopes as we exit the EU. The Government are rightly listening on this. There seems to have been a lot of scaremongering, which is frankly not helpful. On nuclear research, the UK is a world leader in promising nuclear fusion technologies and we must maintain that lead. We must have the arrangements that the Government are negotiating, so that we can continue to participate on the world stage and attract the right nuclear brains to this country. I fully support the Bill. Nuclear safety and security are issues that deserve the utmost attention, and I am sure that the Bill will achieve its aims and set the Rolls-Royce standards mentioned by the Minister. I am optimistic that we will get the right system in place to keep us all safe.

Industrial Strategy

Rebecca Pow Excerpts

Monday 27th November 2017 Commons Chamber

[Greg Clark]

When the hon. Lady studies the White Paper in detail, she will see that one of the proposals is to look at the dynamic effect of investments—how a transport investment can transform the prospects of an area. That can be taken into account, we propose, in making transport decisions in the future, which will be of benefit to her constituents.

[Rebecca Pow (Taunton Deane) (Con)]

I, too, welcome the drive to up productivity with its links to the clean growth strategy. Does my right hon. Friend agree that this approach to upping productivity is one of the best planks that we can put in place for continued prosperity and sustainability? Would he like to pay a visit to Taunton Deane, to look at the opportunities provided therein for some of the funding to come our way? We must not forget the south-west, and we have a great opportunity on our new Nexus business site.

[Greg Clark]

I would be delighted to visit my hon. Friend’s constituency. As she points out, not just in this country but all around the world economies are becoming cleaner and greener, and if we can establish leadership in the research and development and, critically, the translation of those discoveries into industrial products and processes, we can benefit substantially. We are already doing that in the offshore wind industry and others. It is a world full of opportunities for more of that, and of course the south-west has a particular role to play in that.

Oral Answers to Questions

Rebecca Pow Excerpts

Tuesday 7th November 2017 Commons Chamber

[Mr Speaker]

The other Conservative Members standing have been heard, but we have not heard from Ms Pow.

[Rebecca Pow (Taunton Deane) (Con)]

Thank you, Mr Speaker. The House may be aware that 2017 is likely to be declared one of the top three warmest years on record. With that in mind, it is more important than ever to stick to our carbon commitments. Will the Minister kindly outline what objectives she has for the forthcoming UN climate change conference? Will consolidating our position as global leaders in this area be one of those objectives?

Vauxhall (Redundancies)

Rebecca Pow Excerpts

Monday 16th October 2017 Commons Chamber

[Claire Perry]

I absolutely assure the hon. Gentleman that we stand ready to work with him and his colleagues, the local LEP, the local council and anyone else, including the unions, to make sure that we have a good outcome and also an investment outcome for the future. As he will know, there is a huge amount of cross-party consensus on our industrial strategy and our clean growth strategy. The resulting confidence is shown by the fact that over the past few months we have seen some very significant investment news from auto industries in Sunderland, in Burnaston in the east midlands, and in Oxford. There is a vote of confidence: let us make sure that it continues.

[Rebecca Pow (Taunton Deane) (Con)]

Does the Minister agree that the UK automotive industry has in fact been a huge success story? Can she give assurances to PSA and others—I have companies in my constituency that make parts for cars, so this is very important to them, too—that this Government will provide, with their industrial strategy, a framework that ensures there is a major emphasis on the automotive industry as we go forward, particularly in the new technologies such as electric cars, other electric vehicles and battery storage, to mention just a few?

[Claire Perry]

My hon. Friend makes a compelling case. It has indeed been a success story, but I suspect that is not much comfort for those people going home tonight and discussing this over the tea table with their families. That is why we want to make absolutely sure that this country is the place for long-term investment. We know that this has happened as a result of the sales cycle, which has been disappointing for this car. We want to make sure that longer-term investment decisions in Ellesmere Port and other parts of the industry are backed up and supported and that this is the place to keep doing business in the auto sector.

Nuclear Safeguards Bill

Rebecca Pow Excerpts

2nd reading: House of Commons
Monday 16th October 2017 Commons Chamber

[Greg Clark]

Triggering article 50 of the treaty on European Union also requires triggering article 50 on membership of Euratom. That is not just the Government’s view; it is the European Commission’s view, too. The Commission clearly stated to the European Parliament that,

“in accordance with Article 106(a) of the Treaty establishing the European Atomic Energy Community, Article 50 of the Treaty on European Union applies also to the European Atomic Energy Community.”

That is the basis on which we are considering these safeguards.

[Rebecca Pow (Taunton Deane) (Con)]

Will the Secretary of State give an assurance that, as we leave the EU, the Bill will enable us to develop our own watertight system for complying with nuclear safeguards? As he says, that means introducing reporting and transparency to make it obvious that no nuclear material is going where it should not be going. We want assurances that all these boxes will be ticked, even if we leave Euratom.

[Greg Clark]

That is precisely the point of the Bill, and I will explain, perhaps at some length, the ways in which it might be done. I hope my hon. Friend will stay for that.