Energy White Paper

– in the House of Commons at 5:09 pm on 14th December 2020.

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Photo of Alok Sharma Alok Sharma The Secretary of State for Business, Energy and Industrial Strategy 5:09 pm, 14th December 2020

With permission, Madam Deputy Speaker, today we have published the energy White Paper setting out how we will power our net zero future. This document is a labour of love, and I pay particular tribute to the Minister for Business, Energy and Clean Growth, my right hon. Friend Kwasi Kwarteng, who has done an enormous amount of work in putting it together; he has been working on it since last year. I also thank previous Ministers who have worked on this; of course, we are now delivering it.

The White Paper sets out immediate steps to achieve our climate ambitions, to deliver on the Prime Minister’s 10-point plan, to create jobs and, of course, to protect the most vulnerable in society by keeping bills affordable as we transition to net zero. It also allows us not only to build back better from covid-19 but to build back greener.

We make this transition with consumers at the heart of it, because I understand, as I think we all do in this House, how difficult things are as we recover from covid; for many people, every penny does indeed count. That is why the White Paper sets out at least £6.7 billion of support over the next six years for vulnerable and fuel-poor households. That includes the green homes grant, which could see lower-income households save up to £600 a year on their energy bills, and it includes extending the warm home discount scheme to 2026 to cover 750,000 extra households, giving those eligible at least £140 off their electricity bills each winter.

We will also tackle “loyalty penalties” once and for all by offering simpler methods of switching, including automatic switching. We will consult on rolling out opt-in switching, where consumers are offered cheaper tariffs and invited to take them up. That follows successful Ofgem trials. We will also consult on opt-out switching, which would automatically move consumers to cheaper tariffs unless they told us they did not want that to happen.

We have set out a vision of the future for us all—a future where smart appliances charge at the cheapest price, where one can sell electricity from one’s car back into the grid, and where hydrogen heats homes. We will go further, to ensure that the energy system works for consumers. We will introduce competition in the building and operation of onshore networks to drive down costs and increase investment and innovation, all ultimately benefiting consumers.

We will also minimise the grid connections to our offshore wind farms, which I know is important for many colleagues here, including off the coast of East Anglia, to protect our beautiful coastal landscapes and save consumers up to £6 billion by 2050. We will use data to search for cheaper and more innovative ways to power our homes, transport and businesses by publishing the UK’s first energy data strategy in the spring. This will all help to create a fair deal for consumers and protect the fuel poor, and it will give us warmer, more comfortable homes as we transition to net zero.

This White Paper comes at a vital time for rebuilding our businesses. It reinforces commitments made in the 10-point plan to deliver a green recovery. Our plans in the White Paper could support up to 220,000 jobs by 2030 in clean industries such as carbon capture, usage and storage, offshore wind, and electric vehicles. Indeed, many of the jobs created will be in our industrial heartlands, supporting our promise to level up the whole country and leave no one behind. Now is the time to seize these opportunities.

Clean energy is at the heart of our transformation from a fossil fuel-based energy system to one that will deliver net zero. Low-carbon electricity will be a key enabler for net zero as we change the way we travel and heat our homes. That is why we have reaffirmed our manifesto commitment to 40 GW of offshore wind, including 1 GW of floating wind, by 2030, which will support up to 60,000 jobs by 2030; it is why we have committed to work with industry in aiming for 5 GW of hydrogen by 2030, which will unlock £4 billion in investment and support up to 8,000 jobs; and it is why we are supporting the deployment of power with CCUS by 2030, putting in place the framework required to mobilise investment.

Of course, nuclear power continues to be an important source of clean, reliable and safe energy that, as part of our net zero mix, will help to result in lower costs to consumers. But with the existing nuclear fleet largely retiring over the next decade, we need further new capacity, so I have confirmed today that we aim to bring at least one large-scale nuclear project to the point of final investment decision by the end of this Parliament, and the Government will enter negotiations with EDF in relation to the Sizewell C project in Suffolk. These commitments will be subject to full Government, regulatory and other approvals, including of course, very importantly, value for money. The Government will negotiate this in the best interests of the British people, ensuring low-cost, secure and clean energy over the lifetime of the project.

Today, we are also publishing responses to the consultation on the regulated asset base funding model used in many significant infrastructure projects. Such a model could help to secure private investment and drive down costs for consumers in the long run. We will continue to explore a range of options, including the potential role of Government finance during construction, provided that there is clear value for money for consumers and taxpayers.

I have also been impressed by the response of businesses to our calls to decarbonise. To support them in this endeavour, I am today confirming a new and ambitious UK emissions trading scheme, which will be in place from 1 January 2021. This new UK carbon market will be the foundation on which UK businesses achieve net zero emissions. It is also more ambitious than the EU system it replaces. From day one, the cap on emissions allowed will be reduced by 5%, and we will consult in due course on how to align it with net zero. We have also committed to explore expanding the scheme to further sectors, and will continue to progress our aspirations to lead the world on carbon pricing in the run-up to COP26 next year.

In conclusion, this White Paper sets out a historic suite of measures to deliver our net zero ambitions. Fuelling the drive to 2050, as we move out of the shadow of coronavirus, these measures open the door to exciting new opportunities for our country. Taking action now ensures the UK is set on the path to ending its contribution to climate change, while giving UK industry new opportunities and creating jobs as we build the economy of tomorrow. I commend this statement to the House.

Photo of Ed Miliband Ed Miliband Shadow Secretary of State for Business, Energy and Industrial Strategy 5:16 pm, 14th December 2020

Can I thank the Secretary of State for his statement? This White Paper has been promised year after year, so there have been high expectations for it, and I know I should say that the Secretary of State and his Minister are deeply committed to the fight against the climate crisis, but the test of this White Paper is not just good intentions, but whether it is a plan at the scale of ambition we need to create the jobs we need and deliver the fairness we need. While there are certainly elements in the White Paper we welcome, I fear that too often the sound we hear when we read its pages is of the can being kicked down the road.

First, on ambition, we would like to go further and faster than Government targets, but the very least they must be doing is meeting, with policies, the target for 2030 they have set and the recent proposal by the Committee on Climate Change for a 78% reduction in emissions by 2035. The CCC is clear that, as part of its plan, we need to deliver zero-carbon electricity by that date—2035—but my understanding from the White Paper is that it appears simply to have an ambition of 2050 for zero-emissions electricity. Can the Secretary of State explain what appears to be lesser ambition?

On onshore wind, tidal and solar, it is concerning that the White Paper has little to say. There is only one mention, for example, of tidal in the whole document. Can the Secretary of State explain why and what he is going to do to remove the remaining barriers there are to onshore wind?

On new nuclear, we too believe that it can play a part in the energy mix, but the Government appear not to have come to a view after years of consultation, frankly, about how to pay for it, so can the Secretary of State expand on what is his preferred method of financing? Beyond nuclear, there appears to be more, I am afraid, kicking into touch. On hydrogen, France has committed £8 billion, Germany £6 billion and the UK £240 million, and all we are promised is a strategy next year. Is the Secretary of State not worried that we are going to be left behind?

Secondly, let me turn to the theme of job creation. We would like further ambition from the Government on a green recovery. While other countries are investing tens of billions in a green stimulus to create jobs now, we are investing a fraction of this amount. The Secretary of State must recognise that he is way off his 60% target of domestic manufacture of offshore wind turbines. There is a widespread view that the £160 million investment in ports, while welcome, is a drop in the ocean compared with the scale of need if we are to meet his target. Can he tell us what assessment he has made on this issue?

Crucial to jobs is also a just transition for any workers in industries that will lose out. Does the Secretary of State recognise that there needs to be a proper plan for those in fossil fuel industries, including through using their skills in renewable sectors? Can he explain why there is not such a plan already, and will he work with trade unions and others to develop such a vital plan with urgency?

Thirdly, let me turn to the issue of fairness for consumers. I am glad to see the Government trying to build on the energy price cap—once said to be part of a Marxist universe, now part of the mainstream policy of a Conservative Government. But the biggest issue here, as the Secretary of State knows, is the massive job that we have to do in changing the way in which we heat our homes. I fear that the White Paper falls very short on fairness and delivery. Years ago, the Government abolished the zero-carbon homes standard due to come in in 2016, and we still have no date or plan for new homes to be built to zero-carbon. Why not? This is a false economy.

For existing homes, the Government have known for years about the challenge of insulation and conversion of the way they are heated, but, frankly, we still have one-off announcements of resources with no proper plan. They are actually cutting the green homes grant from this year to next. For homes owned by private landlords, the targets are still too weak and too far off; and they hardly scratch the surface when it comes to social housing. All this is on top of the fact that it is still being paid for through bills. These are very difficult issues, but does the Secretary of State recognise that the only answer to meet the transition and fairness is a proper long-term, street-by-street, house-by-house plan? When will that be published?

That brings me to my final point: markets have a role in this transition, but the Government must have a guiding hand. Whether it is a plan to decarbonise our homes, the future of the network infrastructure or the planned energy mix, the Government must match their intentions by playing their proper role to deliver in a way that is fair, creates jobs and shows the requisite ambition. If the Government do that, we will support them; but, on the basis of today’s effort, they still have a long way to go.

Photo of Alok Sharma Alok Sharma The Secretary of State for Business, Energy and Industrial Strategy

I thank the right hon. Gentleman for his comments. Let me just say to him: we are all revolutionaries now. We believe in the green industrial revolution, as he does himself. I note the points that he has made, but I will tell him what some in the energy sector have been saying about the White Paper. The chief executive of Energy UK has said:

“Today’s White Paper reveals the scale and opportunity of the energy transition”.

The chief economist of the CBI has said:

“The Energy White Paper is an important next step in our plans to reach our net-zero emissions target…Business stands ready to deliver the investment and innovation needed to turn ambition into reality”.

The chief executive of RenewableUK said:

“Today’s white paper provides greater clarity to the companies investing across the UK to deliver our net zero emissions target.”

The acting chief executive of Citizens’ Advice said:

“There’s a lot to welcome in today’s announcement.”

I could go on. [Hon. Members: “Go on!”] No; I know that other colleagues want to ask questions.

This Government have shown a great deal of ambition when it comes to the green industrial revolution. The right hon. Gentleman has seen the road map that is being laid out. We have, of course, had the Prime Minister’s 10-point plan with the £12 billion investment, leveraging in three times as much from the private sector, creating and supporting 250,000 jobs by 2030; he has seen the nationally determined contribution that was published, which was universally welcomed; and he will now have seen that the energy White Paper has been published, building on the 10-point plan. He talked about the fact that this White Paper has now appeared. When I spoke about this last week with the Chair of the Select Committee and said that I would get it out by Christmas, he asked me, “Which Christmas?”. I was keen to point out that it was Christmas this year.

Let me address some of the points that the right hon. Gentleman has raised. First, he talked about the CCC, which has made a recommendation regarding the NDC of a reduction of at least 68%. We have adopted that recommendation, and that puts us on the pathway to net zero by 2050. The right hon. Gentleman also talked about tidal. He will know that we have had a call for evidence on that subject. There will be an opportunity through the contracts for difference auction process next year to bring forward projects in that area. On offshore wind, let me be clear that we are talking about the 60% UK supply chain. He will know that in the last few days we have launched the ports infrastructure competition, which will be an opportunity for ports to bid for Government funding. This will ultimately allow us to build products relating to offshore wind in the UK and to create jobs in our country.

The right hon. Gentleman talked about financing for nuclear. As I said, we are at the start of that process of discussions with EDF, the developer at Sizewell C. There is a whole range of financing models that we need to work our way through. On hydrogen, he will know that the Minister for Business, Energy and Clean Growth, my right hon. Friend Kwasi Kwarteng, has been doing a brilliant job, working with the sector and academics. He leads the Hydrogen Council. I will be setting out our strategy at the start of next year and, of course, it is also about unlocking private sector investment.

The shadow Secretary of State talks about fairness for consumers. I am pleased that he welcomes that, and, as he will have seen, the acting chief executive of Citizens Advice has also welcomed the White Paper. In conclusion, of course we need to go further, but the Government are putting their best foot forward in delivering on a green industrial revolution.

Photo of Greg Clark Greg Clark Chair, Science and Technology Committee (Commons), Chair, Science and Technology Committee (Commons)

Without wishing to disinter policies buried under the “Ed Stone”, the policy of Edward Miliband was a price freeze rather than a price cap, which would have led to higher bills for consumers as prices fell.

I welcome the White Paper that the Secretary of State has published today. Does he agree that we are on the verge of a real transformation in technology, in which energy can go from something that was expensive, dirty and needed to be suppressed and eked out to something that can be clean, cheap and abundant? To drive that revolution forward, will he make sure that he invests in energy research and technology and that he changes regulation, so that the incumbents cannot frustrate the roll-out of those technologies nor deny to consumers the benefits that they bring about?

Photo of Alok Sharma Alok Sharma The Secretary of State for Business, Energy and Industrial Strategy

Of course, my right hon. Friend led on all this work when he was Secretary of State in the Department and I thank him for that. The White Paper is a product of some of the excellent reforms that he undertook in Government, including the energy price cap. I agree with him: of course we want to invest in energy research. He will have seen the settlement that we got at the spending review. We will power ahead in research and development and be a leading country when it comes to R&D.

Photo of Alan Brown Alan Brown Shadow SNP Spokesperson (Energy and Climate Change)

I thank the Secretary of State for advance sight of his statement. Clearly, we welcome any sensible proposals for the transition to net zero and value for consumers, and we will support policies accordingly. The White Paper is a year and a half late. Much of it is wishlists and it still has the same outdated nuclear obsession. For existing nuclear waste, there is a £132 billion bill. For Hinkley Point, it is £20 billion. To add to that £150 billion, we have Sizewell C, which is £20 billion, and Bradwell to follow, which is £20 billion. Despite market failure, the Government have not given up on Wylfa, Oldbury and Moorside, so that is potentially another £50 billion. Small modular reactors, advanced reactors and nuclear fission mean further blank cheques. We cannot be serious about energy bills and value for money when it all comes to 35-year nuclear contracts. Compare that with the commitment in the White Paper of just £50 million to upgrade properties to EPC band C.

What cost-benefit analysis has been done on the cost of nuclear jobs versus renewables? What is the Secretary of State doing about a route to market for pumped hydro? In Scotland, the Cruachan extension and the proposed Coire Glas scheme could be undertaken if the Government showed the same commitment to pumped hydro as they have nuclear. Can he confirm the route to market for tidal and wave energies, which he touched on earlier, and a contract for difference for hydrogen production? These processes, along with carbon capture and storage, are the chance to be world-leading and create green jobs, if they get a move on.

How will the Secretary of State ensure transparency for CCS site selections? Surely Peterhead, with its hydrogen proposals and existing carbon dioxide storage licence, has to be first in the batch. Can he confirm that it is under consideration, because it is not showing in the map in the White Paper? Sadly today, BiFab went into administration, with its yard in Tayside closing, which is proof of the failure to date of the CfD procurement process. Will the Secretary of State apologise for that and make sure that, following the consultation on procurement, this is remedied for the next auction process and that we get these jobs delivered in the UK?

There is so much in the White Paper—the future homes standard, the hydrogen strategy, heating buildings, decarbonisation, heat pump delivery—that is going to be consulted on from next year onwards. How can the Secretary of State make sure that these all come together and are delivered in time for the interim target of 2030? Finally, I welcome confirmation of the emissions trading system agreed with the devolved nations, and will he confirm that the carbon emissions tax alternative is now dead in the water?

Photo of Alok Sharma Alok Sharma The Secretary of State for Business, Energy and Industrial Strategy

I am delighted that the hon. Gentleman welcomes the UK ETS scheme that is being launched, but I will take it from his comments that he is not a fan of nuclear power. Perhaps I could explain to him that, of course, renewables are playing an increasingly large part in our energy mix, but the wind does not always blow as hard as we would like and the sun does not always shine. We know that nuclear power is reliable, safe and not intermittent; that is why it needs to be a part of the energy mix. He will know that a significant number of power plants will be coming offline and that is why we are proceeding with our discussions on Sizewell C.

The hon. Gentleman talked about tidal wave and tidal power. As I said in my response to Edward Miliband, there will be an opportunity, through the CFD 4 process, to come forward with projects on that.

Finally, the hon. Gentleman talked about CCUS. What I can tell him is that at this point we have not made any decisions about the sites of CCUS plants, but we will provide much more detail on this in early 2021. Those who are interested, including folks from his constituency, will then be able to take a look at what we set out.

Photo of Bill Cash Bill Cash Chair, European Scrutiny Committee, Chair, European Scrutiny Committee

As my right hon. Friend knows, the EU negotiations on state aid go far beyond the question of mere subsidies and include tax incentives and the like. Will my right hon. Friend assure the House that nothing in any treaty text or any subsequent Act of Parliament will prevent the United Kingdom from having its own sovereign state aid rules, including those on energy, so that we are not subjugated to EU state aid rules or to the European Court of Justice, given that the EU intends to impose and enforce its rules against us, which would be by a majority vote in the Council of Ministers behind closed doors without us at the table after 31 December?

Photo of Alok Sharma Alok Sharma The Secretary of State for Business, Energy and Industrial Strategy

I thank my hon. Friend for that question. If I may, I refer him to the written ministerial statement I laid in the House some weeks ago, in which I said that from 1 January 2021 the Government will follow the World Trade Organisation rules for subsidy control and any related commitments the Government have agreed in free trade agreements. We also intend to publish a consultation in the coming months on whether we should go further than our WTO and international commitments. That will include consulting on whether any further legislation should be put in place.

Photo of Darren Jones Darren Jones Chair, Business, Energy and Industrial Strategy Committee, Chair, Business, Energy and Industrial Strategy Committee

I thank the Secretary of State for advance sight of the statement, and congratulate him and his team on the publication of this long-awaited but comprehensive White Paper. He will know that the Business, Energy and Industrial Strategy Committee will be looking at it in the round in the new year, including in our inquiry on decarbonising heat, but may I ask him one question today about gaps between the sixth carbon budget and the energy White Paper? To give one example, the sixth carbon budget from the Committee on Climate Change requested that all new boilers should be hydrogen-ready by 2025 at the latest, and that to meet all our hydrogen requirements we would need to generate 90 TWh by 2035. In the energy White Paper, however, the commitment to boilers is for the mid-2030s and only 42 TWh of power from hydrogen by 2030, a gap of some 48 TWh. Will he acknowledge that gap between the energy White Paper and the sixth carbon budget, and perhaps tell the House whether there will be further announcements in the new year to bridge that gap?

Photo of Alok Sharma Alok Sharma The Secretary of State for Business, Energy and Industrial Strategy

I thank the hon. Gentleman for that question. Seeing what the CCC has said, we will of course be responding on CB6 next year. That and the 10-point plan take us forward towards fulfilling CB4 and CB5, but we will set out more details in due course on how we get to those budgets. We will also be setting out, between now and COP26, a net-zero strategy for the country.

Photo of Bim Afolami Bim Afolami Conservative, Hitchin and Harpenden

I welcome the Secretary of State’s support for nuclear and the discussions on Sizewell C. Is the eventual financing model entirely contingent upon the 30% reduction in the build cost for nuclear that is set out in the White Paper? To what extent does he see Government investing in nuclear over the medium to long term as a first resort, or should the first resort be investment from the private sector, with Government investment a last resort?

Photo of Alok Sharma Alok Sharma The Secretary of State for Business, Energy and Industrial Strategy

My hon. Friend makes an important point about funding models. Of course, Sizewell C will be second of a kind in terms of projects. I think there is likely to be an appetite from the private sector to invest in that, but we are at the start of the discussion with EDF to explore financing options. It could involve the regulated asset base model. As I said in my statement, we will look at the part that the Government or consumers could play in the financing, but at the heart of any decision will be ensuring that we are delivering value for money for British taxpayers and British consumers.

Photo of Chris Matheson Chris Matheson Shadow Minister (Digital, Culture, Media and Sport)

The section of the White Paper that I shall be reading is the one on hydrogen. The Secretary of State and the Minister for Business, Energy and Clean Growth will know that in my area—the Mersey and Dee area—there is a strong proposition on hydrogen via HyNet. May I urge the Secretary of State to resist the temptation to put all his eggs in one basket? If we are to move forward as a nation, we need to spread around the expertise and not play one region off against another when considering the destination of the investment in hydrogen.

Photo of Alok Sharma Alok Sharma The Secretary of State for Business, Energy and Industrial Strategy

The hon. Gentleman makes an important point. As part of the 10-point plan and the White Paper, we have talked about how we can level up across the country. I know that my hon. Friend the Minister for Business, Energy and Clean Growth will be happy to have further discussions with him. As I said, he has been working incredibly hard on the hydrogen strategy, and we are happy to hear from all colleagues.

Photo of Rebecca Long-Bailey Rebecca Long-Bailey Labour, Salford and Eccles

The European Commission is mobilising €1 trillion, and President-elect Biden will mobilise $2 trillion, but the UK saw only £12 billion for its green industrial revolution. Issuing yet more consultations, scant detail, repackaged announcements and bluster today about unleashing competition is simply not enough to tackle the climate emergency and fuel poverty. With the energy White Paper still leaving a huge gap of 101 million tonnes between meeting our 2032 carbon target, what is the Secretary of State going to do to close that gap?

Photo of Alok Sharma Alok Sharma The Secretary of State for Business, Energy and Industrial Strategy

As the hon. Lady talks about what is happening in the US, I should point her to the very supportive comments that former Vice-President Al Gore made over the weekend about the work that the UK is doing. It is not just about public money. She is fixated with the idea that it is just taxpayers who fund this stuff. The whole point is to ensure that we have revenue models and mechanisms whereby the private sector can invest. If she wants to see how this is done, she should look at the offshore wind sector, which was nascent a few years ago. We have introduced the contracts for difference process. We now have the biggest offshore wind sector in the world. That is how to do it: public and private sector working together.

Photo of Edward Leigh Edward Leigh Conservative, Gainsborough

Will my right hon. Friend spare a thought for rural Britain? Policies that may work for, say, London, which is 600 square miles and has 73 MPs, are a lot more difficult to implement in Gainsborough, which is nearly 500 square miles and has only one MP—albeit a very good one, I have to say. Our rural lines were stripped away by Dr Beeching. If I want to take a bus to the nearest town, it takes an hour, going around about 10 villages, and if I want to walk, it is a four-hour round trip, so we rely on the internal combustion engine. Frankly, an electric charging point in West Lindsey is about as rare as an oasis in a desert. Can we have some practical policies to help rural Britain?

Photo of Alok Sharma Alok Sharma The Secretary of State for Business, Energy and Industrial Strategy

I am sure my right hon. Friend’s constituents will agree with him that he is an outstanding Member of Parliament for Gainsborough. I agree with him—we are not trying to get people to stop using cars. We are saying that we want to move to zero-emission vehicles. That is why, in the 10-point plan that was published, we have put forward many hundreds of millions of pounds to support electric vehicle manufacturing and £1.3 billion for charging points across the country. We need to continue to work to ensure that we have EV manufacturing in the UK, and of course, the costs of that will come down as we have economies of scale.

Photo of Jonathan Edwards Jonathan Edwards Independent, Carmarthen East and Dinefwr

To accompany the White Paper, the British Government have confirmed that they are willing to take a direct equity stake in the proposed £20 billion Sizewell C nuclear plant. Why is similar direct public funding not being made available to other energy technologies, such as the Swansea Bay tidal lagoon, instead of the very costly contracts for difference model?

Photo of Alok Sharma Alok Sharma The Secretary of State for Business, Energy and Industrial Strategy

May I respectfully suggest to the hon. Gentleman that he looks at what we have actually said about nuclear? What we have said is that we are starting a discussion with the developer, EDF. We have not set out a financing model. As I have said, the point at which a decision is made on whether we move to a final investment decision in this Parliament will be on the basis that any financing model delivers value for money for the British taxpayer and, indeed, for consumers.

Photo of Stephen Crabb Stephen Crabb Chair, Welsh Affairs Committee, Chair, Welsh Affairs Committee

My right hon. Friend has made an important statement today, but he will be sensitive to the fact that there are constituencies such as mine in Pembrokeshire that have been heavily reliant on the oil and gas industries for the past 50 years and are particularly vulnerable to these big strategic changes in energy policy? Does he agree that, with the right level of Government support which will unlock private sector investment, we can see a new generation of quality jobs and apprenticeships in offshore wind and marine renewables, such as wave and tidal? Will he pledge to ensure that the Government provide that support, so that constituencies such as mine are not left behind?

Photo of Alok Sharma Alok Sharma The Secretary of State for Business, Energy and Industrial Strategy

My right hon. Friend is, I know, a great champion for renewables, and, indeed, for his own constituency, and he will know that I very much agree with him. Marine renewables is a technology that very much excites me. He will have seen that we recently held a call for evidence on the potential of marine energy projects, and that we have also announced the ambition of 1 GW of floating wind by 2030, supported by CFDs and innovative funding. I suggest that if there are particular projects that he thinks are viable in his constituency, he should point them in the direction of the CFD auction process when it takes place next year.

Photo of Richard Thomson Richard Thomson Shadow SNP Spokesperson (Business and Industry)

It is absolutely crucial that we achieve transition to net zero, and that that transition is just. There can be no just transition to net zero without the skills and expertise in human capital in the North sea oil and gas industry. An essential component of that will be securing a sector deal between Government and the industry. Can the Secretary of State tell us when he expects to be able to announce the successful conclusion of sector deal negotiations with the industry?

Photo of Alok Sharma Alok Sharma The Secretary of State for Business, Energy and Industrial Strategy

The Minister for Business, Energy and Clean Growth and I have a regular dialogue with the sector and, of course, I am fully aware of the importance of oil and gas as an employer in Scotland and, indeed, across the whole of the UK. I can tell the hon. Gentleman that, in November, we received a formal proposal from industry for a deal, and we will now move into negotiations with the sector. On timing, we aim to complete the negotiations and publish that in Q1 next year.

Photo of Alun Cairns Alun Cairns Conservative, Vale of Glamorgan

I congratulate my right hon. Friend and his ministerial team on today’s significant statement. I warmly welcome the commitment shown towards nuclear energy and the open mind that he shows towards the financing model. Does he recognise the challenges that the regulated asset base will give to assessing the risk at the early stage of a traditional build of nuclear power stations? Will he also show the same enthusiasm for small modular reactors that provide an exciting opportunity to parts of the UK that are looking for significant investment and the job-creating opportunities that small modular and advanced modular reactors can bring?

Photo of Alok Sharma Alok Sharma The Secretary of State for Business, Energy and Industrial Strategy

I very much support the idea that we should be advancing on SMRs and AMRs, and my right hon. Friend knows that there is a £385 million advanced nuclear fund to support the development of SMRs. He will also know that we will be supporting a consortium led by Rolls-Royce on that. He is right that that offers not only an opportunity for us to create jobs, but export opportunities for our country in the future.

Photo of Wendy Chamberlain Wendy Chamberlain Liberal Democrat Spokesperson (Wales), Liberal Democrat Spokesperson (Scotland), Liberal Democrat Chief Whip, Liberal Democrat Spokesperson (Work and Pensions)

Given that the typical training period to become qualified in heat pump installation is 48 months, will the Secretary of State clarify what steps are being taken to ensure that we have enough qualified people to meet the demand for heat pumps following the extension of the green homes grant outlined in the White Paper and, in the longer term, to meet our net zero targets?

Photo of Alok Sharma Alok Sharma The Secretary of State for Business, Energy and Industrial Strategy

The Minister for Business, Energy and Clean Growth leads the recently launched green jobs taskforce. As the hon. Lady will know, one can take advantage of a whole range of measures as part of the green homes grant. Of course, the Department is working very hard to ensure that the vouchers are issued and that more and more installers come on to the system.

Photo of David Jones David Jones Conservative, Clwyd West

The White Paper makes it clear that the Government will consider the role of tidal power as part of the clean energy mix. My right hon. Friend will be aware of proposals for a tidal lagoon off the north Wales coast, with a potential installed capacity of 2.5 GW. By any standard, that is a major generating station and one that could make a huge contribution to the nation’s energy needs. The proposal has considerable local support, so will my right hon. Friend or his colleague the Minister of State meet me and my hon. Friends the Members for Aberconwy (Robin Millar) and for Vale of Clwyd (Dr Davies) to consider what can be done to take it further?

Photo of Alok Sharma Alok Sharma The Secretary of State for Business, Energy and Industrial Strategy

Yes, of course. If there are interesting projects out there we want to know. I do not know whether this is one of the projects that came forward in the call for evidence, but of course the Minister for Business, Energy and Clean Growth or I would be happy to meet my right hon. Friend and the business involved.

Photo of Caroline Lucas Caroline Lucas Green, Brighton, Pavilion

With nuclear power both eye-wateringly expensive and painfully slow in the face of the climate emergency, it is disappointing that there is not more ambition on renewables and efficiency instead. Will the Secretary of State confirm that, far from saving consumers money, the regulated asset base funding model essentially means that consumers pay twice: first to reduce the cost of borrowing by increasing bills before the plant is operating, forcing liability for construction delays on to customers, and secondly for extremely costly power once the plant starts operating? Will he immediately publish the modelling that allows him to mysteriously claim that this will drive down costs for consumers?

Photo of Alok Sharma Alok Sharma The Secretary of State for Business, Energy and Industrial Strategy

First, I was on a call with the hon. Lady recently and she acknowledged—through gritted teeth, I think—that she was quite pleased with the UK’s NDC commitment of at least 68%, so I thank her for that. On nuclear, of course we will look at a range of financing models. I explained earlier why nuclear is so important as part of the energy mix—it is a non-intermittent supply—but of course the whole point of the regulated asset base model is that, ultimately, it should result in cheaper prices for consumers.

Photo of Damian Hinds Damian Hinds Conservative, East Hampshire

Of course renewables are preferable, but as the Secretary of State has just set out, for quite some way into the future we will need non-intermittent or dialable energy sources as well. The ultimate game-changer might be battery technology, which could change that balance. Will he say a little about what the Government are doing to support research and development on batteries?

Photo of Alok Sharma Alok Sharma The Secretary of State for Business, Energy and Industrial Strategy

My right hon. Friend raises an incredibly important point about batteries. We are putting investment into gigafactories and batteries for electric vehicles. Importantly, we will also be looking into energy storage technology, such as hydrogen batteries. The amount of storage we need will depend, ultimately, on the energy mix, but he raises a very important point, and of course developing battery storage will be vital.

Photo of Liz Saville-Roberts Liz Saville-Roberts Shadow PC Spokesperson (Home Affairs), Shadow PC Spokesperson (Women and Equalities) , Plaid Cymru Westminster Leader, Shadow PC Spokesperson (Justice), Shadow PC Spokesperson (Business, Energy and Industrial Strategy), Shadow PC Spokesperson (Transport), Shadow PC Spokesperson (Attorney General)

Diolch yn fawr, Madam Dirprwy Lefarydd. The White Paper mentions small modular reactors. When will the Secretary of State be in a position to update the House regarding the process for locating SMRs, bearing in mind that the Welsh Government are establishing a development company, Cwmni Egino, for the former nuclear site at Trawsfynydd?

Photo of Alok Sharma Alok Sharma The Secretary of State for Business, Energy and Industrial Strategy

Obviously, SMRs in the UK are currently at the design phase, and the consortium led by Rolls-Royce is making progress. We think there is the potential for SMR technology to be operational by the early 2030s, so we are still some way away from that. I am sure that, over the coming period, I or the Minister for Business, Energy and Clean Growth will be able to come to the House and give more information about that.

Photo of Mike Wood Mike Wood Conservative, Dudley South

Firms such as Westfield in my constituency of Dudley South stand ready to drive green growth in the transport sector, but to really unlock that they need charging points with grid-to-vehicle technologies and type approval for new clean electric passenger pods. Will my right hon. Friend work with his colleague the Transport Secretary to ensure that the infrastructure and type approvals are available so that those businesses can drive the green energy revolution?

Photo of Alok Sharma Alok Sharma The Secretary of State for Business, Energy and Industrial Strategy

My hon. Friend is a champion of the green energy revolution, and he mentioned Westfield. After the publication of the 10-point plan, the Transport Secretary and I did a roundtable with auto manufacturers, which were extremely enthusiastic about the support that we are providing for electric vehicle manufacturing. I mentioned previously the £1.3 billion to support the continued roll-out of charge points at UK homes and businesses and on streets over the next few years. That will be absolutely vital in ensuring that we are delivering a change and see more zero-emission vehicles on the road.

Photo of Emma Hardy Emma Hardy Shadow Minister (Education)

I welcome the transition to net zero. The Secretary of State may be aware that the Zero Carbon Humber project offers a world-first opportunity to decarbonise our region, promote local industry, attract investment and create jobs. When the Secretary of State is making decisions about which projects are successful for the Department’s industrial strategy challenge fund, will he take into account not just our green credentials but the impact of covid on our local economy and the need for job creation?

Photo of Alok Sharma Alok Sharma The Secretary of State for Business, Energy and Industrial Strategy

I commend the hon. Lady for speaking up on behalf of her constituency and for potential CCUS projects there. As I said in response to a previous question, we will provide more details on all that in early 2021, and at that point I will of course be very happy to have a further discussion.

Photo of Virginia Crosbie Virginia Crosbie Conservative, Ynys Môn

I congratulate the Secretary of State on the publication of an excellent energy White Paper, in which the word “nuclear” is mentioned about 80 times, and the stated ambition to make a financial investment decision on at least one large-scale nuclear project by the end of this Parliament. Apart from writing to Santa, what more does he suggest I do to ensure that my constituents on Ynys Môn have some good news regarding Wylfa Newydd this Christmas?

Photo of Alok Sharma Alok Sharma The Secretary of State for Business, Energy and Industrial Strategy

My hon. Friend is a great champion of Ynys Môn, and I know she is doing her bit to speak up on behalf of her constituents. We will of course consider any new projects that come forward with any viable companies and investors that wish to develop sites in Wales or elsewhere. She should direct them to my Department.

Photo of Matt Western Matt Western Opposition Whip (Commons)

The Secretary of State will be well aware that a shockingly high proportion of households are living in energy poverty across the UK. In my constituency of Warwick and Leamington, 8.9% of households are in energy poverty. I have heard about the green homes grant and how it has not really succeeded since it was introduced. What are the Secretary of State’s plans to ensure that those living in social rented properties will be able to have that addressed, and that local authorities and housing associations get the funding they need to implement that?

Photo of Alok Sharma Alok Sharma The Secretary of State for Business, Energy and Industrial Strategy

As the hon. Gentleman knows, the £3 billion funding that the Chancellor announced some months ago includes funding for social housing. We are making progress with the green homes grant. Thousands of vouchers have been issued, and the Department is doing its bit daily to ensure that we issue more vouchers to those who have applied and have more installers coming on to the system.

Photo of James Davies James Davies Conservative, Vale of Clwyd

The north Wales Mersey Dee region has the potential to be at the centre of a green industrial revolution, from Wylfa Newydd and offshore wind to a gigafactory, hydrogen production and carbon capture, but there is also great interest in harnessing tidal energy, as my right hon. Friend Mr Jones said, so will the Secretary of State take this on board? Will he also acknowledge the coastal protection benefits that a tidal lagoon could bring?

Photo of Alok Sharma Alok Sharma The Secretary of State for Business, Energy and Industrial Strategy

It is clear that there is huge support on this side of the House for marine energy projects, and as I have said, we want to look at any projects that come forward that can be supported by the contracts for difference auction process during next year and by any innovation funding that is available.

Photo of Sammy Wilson Sammy Wilson Shadow DUP Spokesperson (Treasury), Shadow DUP Spokesperson (Work and Pensions), Shadow DUP Spokesperson (Brexit)

The Minister has described this as a labour of love, but it is more like a policy that Labour does love, with its price controls, subsidies, directing investment, telling firms what kind of cars they can produce and telling consumers what kind of cars they can buy, all at an eye-watering cost. According to his own Department, reducing CO2 emissions by 68% will cost between £50 billion and £100 billion a year. What effect will this have on the energy prices that consumers pay, on fuel poverty and on business competitiveness? Is it not a fact that this time last year people voted blue, they are now getting green, and this policy will put them in the red?

Photo of Alok Sharma Alok Sharma The Secretary of State for Business, Energy and Industrial Strategy

If the right hon. Gentleman looks at our manifesto, he will understand that, yes, people voted blue but they voted blue for green policies as well, and that is what we are implementing. On the issue of cost, he will know that over the last 30 years, successive Governments have managed to grow this country’s economy by 75% and cut emissions by 43% at the same time, so green growth is possible. He talks about the car sector, but I can tell him that the auto manufacturing sector was incredibly pleased with what we set out in the 10-point plan. The real issue is to ensure that we have revenue models in place so that private sector investors can come in on projects with confidence.

Photo of Ben Spencer Ben Spencer Conservative, Runnymede and Weybridge

I welcome the energy White Paper, which charts an ambitious and, importantly, sustainable path to sustainability. I would like to raise a point about Jet Zero and the aviation sector, which is very important to my constituents. Does my right hon. Friend agree that, looking beyond the pandemic, sustainability will be a huge challenge to the aviation sector and that the world-leading work being done on Jet Zero by this Government will help to secure the future of aviation and support jobs and businesses in Runnymede and Weybridge?

Photo of Alok Sharma Alok Sharma The Secretary of State for Business, Energy and Industrial Strategy

My hon. Friend is so right. We have established the Jet Zero Council, whose aim is to accelerate the development and adoption of new technologies so that we can develop our strategy to reach net zero in aviation. Ultimately, we want to ensure that we are doing our bit to ensure that we have low-carbon flight, because there is huge potential in that as well.

Photo of Janet Daby Janet Daby Labour, Lewisham East

I welcome the statement by the Secretary of State. We need detailed plans that will show not only how we will reduce our carbon output but how we will protect the jobs and livelihoods of those who work in our oil and gas industries. Today’s White Paper gives them no answers and no hope. Does he agree that his Department must bring oil and gas workers with us as the industry evolves so that we can face a brighter, greener future together?

Photo of Alok Sharma Alok Sharma The Secretary of State for Business, Energy and Industrial Strategy

I agree with the hon. Lady. This whole plan is about jobs, jobs, jobs. That is precisely what we are looking to establish: green jobs, high value added jobs, and jobs that are going to increase productivity across our economy. When it comes to oil and gas, I mentioned the North sea transition deal, and we will be setting out more details of that in Q1 next year.

Photo of James Sunderland James Sunderland Conservative, Bracknell

I really welcome the Government’s green agenda, but banning the sale of diesel and petrol cars from 2030 came as a complete surprise. Does my right hon. Friend not agree that this will result in increased costs for the automotive industry, for businesses and for consumers?

Photo of Alok Sharma Alok Sharma The Secretary of State for Business, Energy and Industrial Strategy

I note my hon. Friend’s point, but of course there was a consultation on this: we have talked to the sector and, as I said, when we made the formal announcement on this the sector welcomed the changes, because connected with the announcement on the 2030 and 2035 dates was almost £3 billion-worth of support for the sector, which will allow us to ensure that we build giga-factories and support the supply chain. Ultimately, that is the direction of travel. The sector accepts it and I think consumers do, too.

Photo of David Mundell David Mundell Conservative, Dumfriesshire, Clydesdale and Tweeddale

I very much welcome the White Paper. My personal regret is that my own constituency cannot have a new nuclear power station because of the Scottish National party’s obsessive and dogmatic opposition to nuclear, but may I press my right hon. Friend again on the issue of oil and gas, which is so important to Scotland? Some 100,000 jobs depend on the industry. I heard what he said in relation to the transition deal and its appearance in quarter 1 next year. That is very welcome, not just because it was a manifesto commitment by the Conservative party at the last general election, but because it will bring certainty to those 100,000 workers in that industry.

Photo of Alok Sharma Alok Sharma The Secretary of State for Business, Energy and Industrial Strategy

My right hon. Friend is a voice of reason. I just wish the SNP would listen to him more.

The North sea transition deal was absolutely in the manifesto, and we want to use it as a vehicle to create new jobs as well as trade and investment opportunities. The whole point is also to ensure that we retain the skills of the highly skilled individuals we have in the sector. As I have said, we will be publishing details in Q1 2021, but this has been a real collaboration between the sector and the Government.

Photo of Mike Hill Mike Hill Labour, Hartlepool

I thank the Secretary of State for his commitment to the future of SMRs and his target of 2030, but that might be too late for Hartlepool power station, which is due to be decommissioned in 2025, the first of the existing fleets. We have a skilled nuclear workforce and a safe nuclear transport infrastructure, so what hope can the Secretary of State give my constituents on the future of nuclear jobs in Hartlepool?

Photo of Alok Sharma Alok Sharma The Secretary of State for Business, Energy and Industrial Strategy

If there are parties out there who want to come forward with proposals for the hon. Gentleman’s constituency, we will of course look at them. The value of developing SMRs is that one will potentially be able to have factories in a number of places in time, and that will mean that we continue the agenda of levelling up across the country.

Photo of Peter Aldous Peter Aldous Conservative, Waveney

These proposals are extremely welcome as they provide a route map to the zero-carbon future. They can also bring enormous economic benefits to areas such as Waveney in Suffolk by creating a very wide range of jobs, whether working on Sizewell C or in offshore wind, reusing our oil and gas infrastructure, running local community electricity schemes, or retrofitting our homes and places of work. Can the Secretary of State confirm that a radical new skills strategy will sit alongside the White Paper?

Photo of Alok Sharma Alok Sharma The Secretary of State for Business, Energy and Industrial Strategy

My hon. Friend raises an incredibly important point. He will know that some weeks ago I set out some initial thoughts on a refreshed industrial strategy, and of course we must ensure that skills are at the front and centre of that. We in the Government have discussions around these matters, and I hope that during the early part of next year we will be able to set out a refreshed industrial strategy

Photo of Kevan Jones Kevan Jones Labour, North Durham

County Durham has a proud and long history of coalmining. Ironically, it has left the county with a new valuable resource of green energy: the thermal heat from former coalmines. Durham County Council and Newcastle University are working together to develop the Seaham garden village project, which will tap into this new heat source for 1,500 homes. May I ask the Secretary of State to look at that and see how similar products could be spread out across County Durham and other former coalfield areas?

Photo of Alok Sharma Alok Sharma The Secretary of State for Business, Energy and Industrial Strategy

My right hon. Friend the Minister for Business, Energy and Clean Growth is already looking at this issue and has shown a great deal of interest. He will be happy to meet the right hon. Gentleman to discuss issues around geothermal.

Photo of Selaine Saxby Selaine Saxby Conservative, North Devon

As chair of the all-party parliamentary group on the Celtic sea, I am working with colleagues to try to facilitate floating wind turbines in the Celtic sea, which will help us to move towards net zero. Those involved in their construction are facing issues with the Crown Estate, so will my right hon. Friend do what he can to support this project and the clean energy it could generate?

Photo of Alok Sharma Alok Sharma The Secretary of State for Business, Energy and Industrial Strategy

My hon. Friend will know that in August the Crown Estate awarded seabed rights for the first floating wind project in Welsh waters of the Celtic sea. She will also know that the Crown Estate has just started market engagement to seek views on how to drive forward new projects. If things are not going as well as she would like, I or my right hon. Friend the Minister for Business, Energy and Clean Growth will be happy to meet her to have a discussion.

Photo of Luke Evans Luke Evans Conservative, Bosworth

There are three broad aspects to the energy market: security, to be self-reliant, the environment, and of course affordability for Mr and Mrs in Bosworth. Does my right hon. Friend agree that those three aspects are addressed in the White Paper, and will he ensure that they are not mutually exclusive?

Photo of Alok Sharma Alok Sharma The Secretary of State for Business, Energy and Industrial Strategy

My hon. Friend raises an important point. Those issues are absolutely not mutually exclusive. As he says, they comprise a golden thread running through the White Paper. I go back to the point that some Opposition Members have raised about nuclear. As part of energy security, we need to have a diverse energy mix, and that is why nuclear is very much part of that.

Photo of Justin Madders Justin Madders Shadow Minister (Health and Social Care)

The HyNet project is critical for the whole of the industrial sector in the Mersey-Dee area, particularly for Ellesmere Port, but actually this is to protect existing jobs as well as create new ones. May I join my hon. Friend Christian Matheson in urging the Secretary of State not to place all his hydrogen eggs in one basket?

Photo of Alok Sharma Alok Sharma The Secretary of State for Business, Energy and Industrial Strategy

I do not know whether it is possible to place eggs in a hydrogen basket, but the hon. Gentleman makes an important point. We need to level up across the country and we will do just that.

Photo of Richard Graham Richard Graham Conservative, Gloucester

This energy White Paper is bristling with good things. Let me highlight two of them. The Secretary of State alluded to the negotiations with Sizewell C. May I highlight for him the importance of this project not just to the nuclear energy sector or to that part of the country, but to my constituents in Gloucester, where the operational headquarters of EDF Energy at Barnwood are extremely important? Can he confirm that access to Government financing will be the key to reducing the risk and costs of this project? The second great bit of news is his commitment to considering the role of wave and tidal energy. As chair of the all-party marine energy group, I thoroughly support this initiative, which I hope will end with some pots for marine energy and the contract for difference in November, before COP26.

Photo of Alok Sharma Alok Sharma The Secretary of State for Business, Energy and Industrial Strategy

I am delighted that my hon. Friend thinks that this paper is bristling with ideas and energy. I know that for a long time my right hon. Friend the Minister has been bristling with energy getting this thing put together. On Sizewell C, we are going to look at the financing model and that will be part of the discussion, but one of the other key points is that it will be creating jobs during the construction phase and indeed beyond. A number of colleagues have asked what is the connection between this and the lives of people in our constituencies, and the answer is that it is very much about jobs.

Photo of Ian Liddell-Grainger Ian Liddell-Grainger Conservative, Bridgwater and West Somerset

As tail-end Charlie, I must say that the White Paper is a really good piece of work. It has taken a very long time and, as somebody who is rather keen on nuclear, for obvious reasons, I am delighted. However, having read through it, I will say that one of the great things we have down here is the National College for Nuclear, and apprentices in this remarkable industry do need time to be trained in nuclear skills. If we are talking about 10 years for the first SMRs and for Sizewell, we will need more people and we will need them quickly. May I urge the Secretary of State to visit Hinkley—obviously—and to ensure adequate funding within the White Paper so that we can train the future of the nuclear industry?

Photo of Alok Sharma Alok Sharma The Secretary of State for Business, Energy and Industrial Strategy

I would never describe my hon. Friend as tail-end Charlie; I think we have left the best till last. He raises an important point about skills, which a number of colleagues have talked about. We very much recognise the need to ensure that we train people up for the sunrise industries of the future, and we will look to address some of that in the refreshed industrial strategy.

Photo of Eleanor Laing Eleanor Laing Deputy Speaker and Chairman of Ways and Means

Mr Liddell-Grainger was not quite last, because we have an amendment to the call list, so finally, I call Siobhan Baillie.

Photo of Siobhan Baillie Siobhan Baillie Conservative, Stroud

Thank you, Madam Deputy Speaker. Last, but not least. The Government have stated they will be ambitious in developing fusion power and, as the Secretary of State knows, I am ambitious about developing opportunities for Stroud. Business West and other groups are already making the case to use the decommissioned nuclear site in Berkeley as an opportunity for fusion, and rightly so. Will the Secretary of State tell us a little more about the potential benefits of fusion power for the climate, for energy and for jobs?

Photo of Alok Sharma Alok Sharma The Secretary of State for Business, Energy and Industrial Strategy

Madam Deputy Speaker, I can now say that we definitely did leave the best till last—I hope that my hon. Friend Mr Liddell-Grainger is not listening. My hon. Friend raises an important point. As she knows—in fact, this is set out on page 51 of the Energy White Paper—the Government have already committed over £400 million towards new UK fusion programmes. She will also know that this month we launched the spherical tokamak for energy production—STEP—programme and published an open call for communities across the UK to apply to be the host site. I encourage her to look at that and, should her constituents or anyone in the area want to apply, they should put their details forward.

Photo of Eleanor Laing Eleanor Laing Deputy Speaker and Chairman of Ways and Means

I am going to suspend the House for three minutes so that people can leave safely and the next cohort of Members can enter safely.

Sitting suspended.

Virtual participation in proceedings concluded (Order, 4 June).