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Category: Energy

  • Greg Hands – 2022 Statement on North Sea Oil and Gas

    Greg Hands – 2022 Statement on North Sea Oil and Gas

    The statement made by Greg Hands, the Minister for Energy, Clean Growth and Climate Change, in the House of Commons on 9 February 2022.

    There will continue to be ongoing demand for oil and gas over the coming years. It is a clear choice between a transition that secures our energy, protects jobs and leads to innovation in new technologies like carbon capture and hydrogen, and an extinction for our energy sector, as I think the hon. Lady proposes. Flicking a switch and turning off our domestic source of gas overnight would put energy security, British jobs and industries at risk, and we would be even more dependent on foreign imports. The way we produce oil and gas is cleaner than in many jurisdictions, so it would be illogical to import them at further expense to Britain and our planet.

    The fields referred to in these reports are already licensed, some dating back to as early as 1970, and are now going through the usual regulatory processes. All proposals are subject to a rigorous scrutiny process prior to consent, as opposed to licensing, by our expert regulators, including an environmental impact assessment and a public consultation. No decisions have been taken by the regulators, so it would be inappropriate to comment further on that process. However, to be clear, continued support for Britain’s oil and gas sector is not just compatible with our net zero goals; it is essential if we are to meet the ambitious targets we set for ourselves while protecting jobs and livelihoods.

    As announced last year, and forming part of the North sea transition deal, we will introduce a climate compatibility checkpoint for any new licences to ensure that any future licensing rounds remain consistent with our goals. Meanwhile, we continue to make progress on developing new nuclear, which I think the hon. Lady also opposes, and renewables that will power our future. Today, we have announced that we are ramping up our options for our flagship renewable scheme, contracts for difference, establishing new industries, boosting investment and creating jobs in our former industrial heartlands.

  • Kwasi Kwarteng – 2022 Statement on the Contracts for Difference Scheme

    Kwasi Kwarteng – 2022 Statement on the Contracts for Difference Scheme

    The statement made by Kwasi Kwarteng, the Secretary of State for Business, Energy and Industrial Strategy, in the House of Commons on 9 February 2022.

    Since 2014 the contracts for difference scheme has been at the heart of our efforts to diversify and decarbonise our power system. Since 2010 we have increased the percentage of power generated from renewables from 7% to 43%, creating thousands of high-skilled jobs and bringing new industries to our former industrial heartlands.

    To date contracts for difference has awarded contracts totalling almost 16GW of new renewable electricity capacity across multiple technologies. Since the first competitive allocation round (AR1), it has contributed to a more than 60% reduction in the per unit price of offshore wind, with substantial benefits for consumers. We opened our latest allocation round (AR4) on 13 December 2021. It is our largest yet, with an ambition to procure more new generating capacity than the last three rounds combined.

    We want to further accelerate our low carbon power generation, making the UK less reliant on volatile fossil fuels and creating more home-grown power. This will help us to deliver a fully decarbonised electricity system by 2035.

    To do this we set out an ambition to accelerate the deployment of low-cost renewable generation by undertaking a review of the frequency of the contracts for difference allocation rounds. The review of allocation round frequency has now concluded.

    I have decided to increase the frequency of the allocation rounds to every year, from around every two years as it is currently. The next allocation round, AR5, will be brought forward to March 2023 and it is our intention that the subsequent allocation rounds will be held every 12 months in the following years.

    In parallel, we have recently opened a consultation on changes to make AR5 more effective and forward-looking, particularly on the application process for supply chain plans.

    Our review suggests that the move to more frequent contracts for difference allocation rounds is overwhelmingly supported by industry. Increasing the frequency of allocation rounds will help to encourage low carbon electricity generation, which may also encourage investment in supply chains, and benefit the UK in the longer term not least by protecting consumers from potentially volatile global markets.

    These more frequent rounds will also support the delivery of those renewable technologies, such as onshore wind, offshore wind, and solar PV, which are key to decarbonising the power sector, creating jobs and bringing even more investment to our former industrial heartlands. This will sit alongside the Government’s commitment to bring forward another large-scale nuclear power plant this Parliament.

    The contracts for difference scheme has been successful in deploying low-carbon generation and reducing the cost of capital for renewable technologies. As more renewables are added to the system, we will continue to consider how the scheme could evolve over the longer term to ensure it reflects the impact of renewables on the wider system, including total system costs.

  • Ed Miliband – 2022 Comments on Shell’s Profits

    Ed Miliband – 2022 Comments on Shell’s Profits

    The comments made by Ed Miliband, the Shadow Climate and Net Zero Secretary, on 3 February 2022.

    With oil and gas profits booming in recent months because of the spike in energy prices, it is clearer than ever that the North Sea oil and gas producers who have made a fortune recently should be asked to contribute.

    Labour would keep energy bills low, and we wouldn’t be landing costs with bill payers as they head into a spring of higher taxes and rising prices.

    Our plan, part paid for with a one-off windfall tax on North Sea oil and gas profits, would save most households £200 off their bills, with targeted support of up to £400 on top of that to the squeezed middle, pensioners and the lowest earners.

    Labour will reform our broken energy system so we deliver the green transition we need, energy security, and bills that are affordable.

  • Rishi Sunak – 2022 Statement on the Energy Price Cap

    Rishi Sunak – 2022 Statement on the Energy Price Cap

    The statement made by Rishi Sunak, the Chancellor of the Exchequer, in the House of Commons on 3 February 2022.

    Mr Speaker,

    The UK’s economic recovery has been quicker and stronger than forecast.

    In the depths of the pandemic, our economy was expected to return to its pre-crisis level at the end of 2022.

    Instead, it got there in November 2021 – a full year earlier.

    Unemployment was expected to peak at nearly 12%.

    Instead, it peaked at 5.2% and has now fallen to just over 4% – saving more than 2 million jobs.

    And with the fastest growing economy in the G7 this year…

    Over 400,000 more people on payrolls than before the pandemic…

    And business investment rising…it’s no wonder Mr Speaker, that borrowing is set to fall from £320bn last year…

    …the highest ever peacetime level…

    …to £46bn by the end of this Parliament.

    As we emerge from the depths of the worst recession in 300 years, we should be proud of our economic record.

    The economy is stronger because of the plan we put in place; because of the actions we took to protect families and businesses.

    And that plan is working.

    But for all the progress we are making – the job is not yet done.

    Right now, I know the number one issue on people’s minds is the rising cost of living.

    It is the independent Bank of England’s role to deliver low and stable inflation – and the Governor will set out their latest judgements at midday today.

    And just as the government stood behind the British people through the pandemic…

    …so we will help people deal with one of the biggest costs they now face – energy.

    The energy regulator, OFGEM, announced this morning that the energy price cap will rise in April to £1,971 – an increase of £693 for the average household.

    Without government action, this would be incredibly tough for millions of hardworking families.

    So the government is going to step in to directly help people manage those extra costs.

    Mr Speaker,

    Before I set out the steps we are taking, let me explain what’s happening to energy prices, and why.

    People’s energy bills are rising because it is more expensive for the companies who supply our energy to buy oil, coal, and gas.

    Of the £693 increase in the April price cap, around 80% comes from wholesale energy prices.

    Over the last year, the price of gas alone has quadrupled.

    And because over 85% of homes in Britain are heated with a gas boiler, and around 40% of our electricity comes from gas, this is hitting households hard.

    The reasons gas prices are soaring are global.

    Across Europe and Asia, a long, cold winter last year depleted gas stores.

    Disruption to other energy sources like nuclear and wind left us relying more than usual on gas during the summer months.

    Surging demand in the world’s manufacturing centres in Asia…

    …at the same time as countries like China are moving away from coal…

    …is further increasing demand for gas.

    And concerns about a possible Russian incursion into Ukraine are putting further pressure on wholesale gas markets.

    And so prices are rising.

    Mr Speaker,

    The price cap has meant that the impact of soaring gas prices has so far fallen mainly on energy companies.

    So much so, that some suppliers who couldn’t afford to meet those extra costs have gone out of business as a result.

    It is not sustainable to keep holding the price of energy artificially low.

    For me to stand here and pretend we don’t have to adjust to paying higher prices would be wrong and dishonest.

    But what we can do is take the sting out of a significant price shock for millions of families…

    …by making sure the increase in prices is smaller initially and spread over a longer period.

    Mr Speaker,

    Without government intervention, the increase in the price cap would leave the average household having to find an extra £693.

    The actions I’m announcing today will provide, to the vast majority of households, just over half that amount – £350.

    In total, the government is going to help around 28 million households this year.

    Taken together, this is a plan to help with the cost of living worth around £9bn.

    We’re delivering that support in three different ways.

    First, we will spread the worst of the extra costs of this year’s energy price shock over time.

    This year, all domestic electricity customers will receive an upfront discount on their bills worth £200.

    Energy suppliers will apply the discount on people’s bills from October.

    With the government meeting the cost in full.

    That discount will be automatically repaid from people’s bills in equal £40 instalments over the next five years.

    This is the right way to support people while staying on track with our plans to repair the public finances.

    And because we are taking a fiscally responsible approach, we can also provide more help, faster, to those who need it most – the second part of our plan.

    We’re going to give people a £150 Council Tax rebate to help with the cost of energy, in April – and this discount won’t need to be repaid.

    And I do want to be clear with the House that we are deliberately not just giving support to people on benefits.

    Lots of people on middle incomes are struggling right now, too – so I’ve decided to provide the council tax rebate to households in Bands A to D.

    This means around 80% of all homes in England will benefit.

    And the third part of our plan will provide local authorities with a discretionary fund of nearly £150m…

    …to help those lower income households who happen to live in higher Council Tax properties…

    …and households in bands A-D who are exempt from Council Tax.

    We’re also confirming today that we’ll go ahead with existing plans to expand eligibility for the Warm Home Discount by almost a third…

    …so that 3m vulnerable households will now benefit from that scheme.

    And that’s not all we’re doing to help vulnerable households.

    We’re providing £3bn over this Parliament to help more than half a million lower income homes become more energy efficient, saving them on average £290 per year.

    Increasing the National Living Wage to £9.50 an hour in April, a pay rise of over £1,000 for 2 million low paid workers.

    And providing an effective tax cut for those on Universal Credit, allowing almost 2 million households to keep an average of £1,000 per year.

    The payment through energy suppliers will apply across England, Wales and Scotland.

    Energy policy is devolved in Northern Ireland, with a different regulator, and the government does not have the legal powers to intervene.

    So we will make sure the Executive is funded to do something similar, with around £150m for Northern Ireland through the Barnett formula next year.

    And because the Council Tax system is England only, total Barnett consequentials of around £565m will be provided to the devolved administrations in the usual way.

    Mr Speaker,

    I know that some in this House have argued for a VAT cut on energy.

    However, that policy would disproportionately benefit wealthier households.

    There would also be no guarantee that suppliers would pass on the discounts to all customers.

    And we should be honest with ourselves: this would become a permanent Government subsidy on everyone’s bills.

    A permanent subsidy worth £2.5 billion every year – at a time when we are trying to rebuild the public finances.

    Instead, our plan allows us to provide more generous support, faster, to those who need it most, providing 28m households with at least £200, and the vast majority receiving £350.

    It is fair, it is targeted, it is proportionate – it is the right way to help people with the spike in energy costs.

    Mr Speaker,

    Today’s announcements are just one part of the government’s plan to tackle this country’s most pressing economic challenges.

    A plan for growth – with record investments in infrastructure, innovation and skills.

    A plan to restore the public finances – with debt falling by the end of this Parliament.

    A plan to cut waiting lists and back the NHS with £29bn over three years and a permanent new source of funding.

    And, with the measures I’ve announced today – a plan to help with the rising cost of energy with £350 more in the pockets of tens of millions of hard working families.

    That’s our plan to build a stronger economy – not just today but for the long term.

    And I commend it to this House.

  • Ed Miliband – 2022 Statement on a Windfall Tax for Oil and Gas Producers

    Ed Miliband – 2022 Statement on a Windfall Tax for Oil and Gas Producers

    The statement made by Ed Miliband, the Labour MP for Doncaster North, in the House of Commons on 1 February 2022.

    I beg to move,

    That this House notes the cost-of-living crisis hitting families across the country and that the energy price cap is predicted to rise by 50 per cent from April; recognises that rocketing energy prices are hitting businesses as well as household budgets; calls on the Government to introduce a windfall tax on the profits of North Sea oil and gas producers; and further calls on the Government to use that windfall tax to help fund a package of support for families and businesses facing the energy price crisis.

    In the last few days, we have often heard the Government say that they are desperate to talk about the biggest issues facing the country. Conservative Member after Conservative Member has lined up to say that there is nothing they would rather do than end the distractions and talk about the burning issues facing people. I have to say, Madam Deputy Speaker, where are they all? Where are they? Today, we are giving them—[Interruption.] There are a few of them, but not very many. Today, we are giving them and the House the chance to talk about those issues, and there is no bigger issue facing families than the energy price crisis. For months, we have waited for the Government to tell us what it is that they are going to do and there has been silence. Today, we are making a generous offer to focus on what really matters and to give them the chance to support the principle of a windfall tax on the oil and gas companies to help to address the energy crisis.

    Let me set out the case. In just six days’ time, we will know the scale of the price cap increase to be announced by Ofgem. It is expected, on the latest gas prices, that there will be a £600 increase in the cap, on top of the £120 increase we have already seen. April’s increase alone is expected to drag 1.5 million more families into fuel poverty. Let us be absolutely clear what that means. Consider a recent Citizens Advice case of a man in his 60s from Devon who had given up his job as an engineer when he was diagnosed with spinal cancer. He had been claiming universal credit but cannot work and recently saw that drop by £20 a week. He told Citizens Advice:

    “I don’t buy the things I need to buy. I’m constantly looking at the bank account. I put things off as I can’t afford the petrol to drive. I feel isolated and stressed, but what can I do? I’m living in one room to keep the heat down as low as I possibly can, but everything is just mounting up. It’s direct debit after direct debit.”

    I have had similar cases in Doncaster. This is the reality facing millions in our country, and that is before the price cap has actually gone up. It is against the backdrop of inflation running at nearly 6% and the national insurance rise on top. So people are facing very difficult times. Businesses, too, are facing great difficulty as a result of what is happening.

    Dr Rupa Huq (Ealing Central and Acton) (Lab)

    Does not my right hon. Friend agree that the Government’s version of the energy price cap, along with “use it or lose it” penalties on developers, banning letting fees for tenants and gender pay gap reporting, have his fingerprints all over them from our 2015 Labour manifesto, but that, unfortunately, they have made the schoolboy error of copying homework incorrectly? That is why we now need a windfall tax to rectify those errors. In a parallel universe—the Miliverse—this was done right, but sadly it has been done all wrong by them!

    Edward Miliband

    I thank my hon. Friend for that intervention. I am old enough to remember when an energy price cap was living in a “Marxist universe” and now it is Government policy.

    The Federation for Small Businesses reports that 45% of members are seeing soaring costs from higher energy bills. Meanwhile, the Energy Intensive Users Group, representing vital industries such as steel and pharmaceuticals, has called repeatedly for “immediate action”.

    This is an economic crisis plain and simple. What is extraordinary is that the Government, months into the crisis, have not produced a single solution. Where is the solution? There can be no greater evidence of a Government paralysed by inaction. Millions of families who want reassurance are instead subject to the spectacle of a rule-breaking Prime Minister still too distracted by trying to save his own skin.

    Our case today is that millions of struggling families should not be left to face this situation alone and that we should do all we can to act. It is right to look to those benefiting from this crisis to make a contribution.

    John Redwood (Wokingham) (Con)

    I am glad the right hon. Gentleman is highlighting this issue. Does he agree that gas prices are a lot dearer in Europe and the UK than they are in America because we are short of gas here? Would it not therefore be a good idea for us to get more gas out of our North sea to ease the squeeze?

    Edward Miliband

    The right hon. Gentleman and I differ somewhat on this. The real problem is that we have not gone far enough or fast enough on the green transition. The more we are subject to the volatility of fossil fuels—the prices are set internationally—the more we are at risk of the kind of crisis we are seeing at the moment.

    If there is one principle that should get us through these tough times, it is that those with the broadest shoulders should bear the greatest burden. Britain’s families and businesses are facing the toughest times, but that is not true of everyone. For the oil and gas sector, the price spike has been a bonanza—a trebling of prices today compared with a year ago. Let us be clear about the effect that is having on oil and gas company profits.

    Listen to Bernard Looney, the chief executive of BP. He says this: the rise in prices is a “cash machine” for his company. Those were his words—a “cash machine”. Let those words ring in the ears of right hon. and hon. Members in this House. Let us be clear about who is on the other side of the cash machine: the British people. In other words, it is an ATM from which the oil and gas companies collect billions and into which the British people pay—people like the man in Devon who could only afford to heat one room. He is one of the millions paying into the cash machine for BP.

    Once the companies are withdrawing the cash from the cash machine, where is the unexpected windfall going? Let us not fall for the argument that may be made in this debate—that it is somehow going into investment or workers in the oil and gas sector. [Interruption.] The hon. Member for West Aberdeenshire and Kincardine (Andrew Bowie) says from a sedentary position that it is. Let me tell him that he is wrong. All the evidence is that the companies are so flush with cash that billions are being used to inflate the share price in buybacks from shareholders. BP did a share buyback of over £1 billion in August, but it was so overwhelmed with cash that it did another worth nearly £1 billion in November. Shell has done the same, with a £1.1 billion share buyback in December. But that is not enough: it says it will do another one, worth £4 billion, at pace, in 2022.

    This is simply a redistribution of wealth from the energy bills of the British people—those who can least afford it—to the shareholders of those companies. The question before us, then, is one that has confronted previous Governments: should we do something about the situation or say that it is wrong to take account of the windfall in the tax decisions that we make? I say that it is not wrong to take account of it—it is fair and it is right and it is principled.

    Tim Loughton (East Worthing and Shoreham) (Con)

    The right hon. Gentleman is setting out the problem, but the trouble is that his solutions do not add up. Does he acknowledge that last year Shell and BP, the two largest oil and gas producers, posted a £26.9 billion and £22.5 billion loss respectively? How much would his windfall tax get from those situations? Does he also acknowledge that the biggest investments in renewable energy—not least hydrogen, into which hundreds of billions are being invested—come from companies such as BP and Shell, which we need to continue investing in alternative non-fossil fuels?

    Edward Miliband

    I will answer all the hon. Gentleman’s points. We would raise £1.2 billion from the windfall tax. I will come to this later in my speech, but the tax position is incredibly generous for companies, including Shell and BP. He says that their money is going into renewables, but I am afraid that he is not correct. Shell’s near-term plans involve investment of just £2 billion to £3 billion in low carbon activities and £8 billion on upstream fossil fuel production. It is just greenwash to say that these companies have somehow moved out of fossil fuels and into renewables. The truth is that when profits have risen by billions and billions and when billions are being paid out in share buybacks, it is not credible that somehow a one-off tax rise, taking just a small proportion of the windfall profits that these companies did not expect, will somehow lead to a collapse in investment.

    There is a clear consensus that a windfall tax is the right thing to do. An overwhelming majority of people support it—including, I might point out to Government Members, three quarters of Conservative voters. I do not know what Conservative Members are waiting for: they should support a windfall tax because some of the people who vote for them—or used to vote for them, anyway—also support it. Leading charities have endorsed it and some Conservative Members, including the right hon. Member for Harlow (Robert Halfon) and the former business Minister the right hon. Member for Kingswood (Chris Skidmore), have supported it too.

    Of course the oil and gas companies do not want the windfall tax to happen. Let us take their arguments head on. As I have said, the argument that the tax will lead to a collapse in investment is not credible given what the companies are doing with this windfall, and it also misunderstands the long-term basis of these companies’ investment plans. I should also point out that the companies would keep a significant proportion of the windfall, even under our proposals. It is an unexpected, unearned windfall, half of which they would keep.

    Secondly, as I said to the hon. Member for East Worthing and Shoreham (Tim Loughton), the proposal comes against a backdrop of the incredibly generous tax position in the UK, which meant that BP and Shell actually paid no net tax at all between 2018 and 2020.

    Thirdly, there is a wider context. [Interruption.] The hon. Member for East Worthing and Shoreham is muttering, from a sedentary position, that those companies are not making profits. Actually, they are forecast to make near-record profits this year, as the hon. Gentleman will see if he looks at what outside analysts are saying.

    As I was saying, there is a wider context. The oil and gas sector provides important employment for our country and communities. We need a phased transition, but, as I said to the hon. Gentleman, the long-term answer to this crisis is not more reliance on fossil fuels. Indeed, the Business Secretary himself has said:

    “the UK is still too reliant on fossil fuels.”—[Official Report, 20 September 2021; Vol. 701, c. 95.]

    The answer must be instead to go further and faster on renewables, nuclear and other zero-carbon alternatives, but that is not what the fossil fuel companies are doing with their profits.

    Matt Western (Warwick and Leamington) (Lab)

    My right hon. Friend is making a powerful speech. He has identified the immediate issue of energy poverty and crisis that we have in this country. Those of us who are old enough to have lived through the 1970s and 1980s recall how the Norwegians used the wealth generated from the North sea to create sovereign wealth funds. Should we not be thinking about that? Could we perhaps not just use the windfall tax, but deploy such funds in the way that my hon. Friend is describing, to invest in renewables and invest in our country?

    Edward Miliband

    My hon. Friend has made a powerful point.

    Labour has come up with a clear and costed plan. We plan, by levying the windfall tax, to reduce VAT to zero, to increase the warm homes discount from £150 to £400, and to extend it from the 2.2 million families who currently receive it to 9 million. On top of that, we have set aside £600 million to help our businesses out. This is in stark contrast with what is being proposed by the Conservatives—the Government of the day, who, six days before the announcement of the rise in the price cap, seem to have nothing to say. What is their explanation for why they are not acting? It is very hard to find the explanation, although perhaps we will hear one today. The one person who has ventured to provide one is the Education Secretary, who has said:

    “A windfall tax on oil and gas companies that are already struggling in the North Sea is never going to cut it.”

    Even the oil and gas companies do not describe themselves as struggling. They say that this is a cash machine. I have to ask what planet the Government are living on. Does it not say everything about them that it is the struggles of companies making billions from an expected windfall that stir them, not the struggles of the British people? How dare they leave families in the lurch because of their refusal to stand up to vested interests in the oil and gas sector?

    Alan Brown (Kilmarnock and Loudoun) (SNP)

    In 1998, when Labour was in power, oil prices bottomed out at $12 a barrel. By 2008, the price had risen to nearly $100 a barrel. What did Labour do with that money? It is regrettable that it did not create an oil sovereign fund, as Norway did.

    Edward Miliband

    I am very proud of the investments that the last Labour Government made in our public services.

    Alexander Stafford (Rother Valley) (Con)

    Will the right hon. Gentleman give way?

    Edward Miliband

    No, I am going to make progress.

    The truth is—we cannot get away from it—that the Conservatives are a party bankrolled to the tune of nearly £5 million by oil and gas interests since 2016. Bankrolled by oil and gas executives, they cannot act on behalf of the British people.

    Let me end by saying this. The British people are fed up with what they have seen from the Government in recent months. They want a Government who are on their side. They want a Government who will act for them. That is why we need a windfall tax. It is a test of whose side they are on, and whose side we are all on in this House—on the side of gas and oil companies making billions of profits, or on the side of millions of struggling families. We know whose side we are on. If this Government were truly on the side of the British people, they would act, and that is why I urge Members on both sides of the House to vote for our motion tonight.

  • Kwasi Kwarteng – 2022 Statement on Sizewell C

    Kwasi Kwarteng – 2022 Statement on Sizewell C

    The statement made by Kwasi Kwarteng, the Secretary of State for Business, Energy and Industrial Strategy, in the House of Commons on 27 January 2022.

    The UK was the first major economy to legislate for a target of net zero greenhouse gas emissions by 2050. As set out in the net zero strategy and the Prime Minister’s 10-point plan for a green industrial revolution, nuclear will continue to be an important and reliable source of clean electricity as we strive to decarbonise the UK economy. By 2050, we expect that the electricity system will be built on a foundation of renewables such as wind and solar, but these will need to be bolstered by reliable low-carbon power. The UK Government recognise that large-scale nuclear is the only proven technology available to provide continuous, low-carbon electricity at scale. Ministers are therefore firmly committed to deploying new nuclear in order to strengthen Britain’s energy security and reduce our exposure to volatile global gas prices, provided there is clear value for money for consumers and taxpayers.

    In 2016 we took the decision to enter into a contract for difference over Hinkley Point C in Somerset, which is currently under construction and expected to begin generating power by 2026, when it will start providing 3.2 GW of electricity. However, with five of the UK’s six nuclear stations scheduled to close by 2028, the Government have made a commitment to bring a further large-scale nuclear project to a final investment decision during this Parliament, subject to value for money and all relevant approvals. To facilitate this, we have introduced legislation for a new financing mechanism, the regulated asset base (RAB) model, through the Nuclear Energy (Financing) Bill. It is estimated that RAB could lower the cost of each new large-scale nuclear power project by more than £30 billion, compared to the existing contracts for difference model. The RAB model is also expected to reduce Britain’s reliance on overseas developers for finance by substantially widening the pool of private investors to include British pension funds, insurers and other institutional investors from like-minded countries.

    After Hinkley Point C, the Sizewell C project in Suffolk is the most advanced nuclear project in the UK. As a replica of Hinkley Point, Sizewell offers a high level of design maturity and an identified supply chain. The company developing the project has applied for both a development consent order and nuclear site licence and believes it can begin construction during this Parliament. If built, the new plant could deliver around 7% of the UK’s current electricity needs (enough to power the equivalent of around 6 million homes) and create tens of thousands of jobs across the country. New nuclear is not only at the heart of our plans to ensure greater energy independence, but to drive economic growth.

    The Government entered into Sizewell C project discussions in January 2021. Following significant investment from EDF, the project requires additional financial support to further mature it to a point where other private investors (and, subject to value for money considerations and relevant approvals, the Government) could consider a direct investment in the project development company. Sufficient early development funding prior to the construction of major projects is a key determinant of subsequent project performance, and to this end the Prime Minister’s 10-point plan committed in 2020 to provide nuclear development funding for this purpose.

    I am pleased to announce that I will today enter into an option agreement with EDF Energy Holdings Ltd, which provides Government with an option over the land at Sizewell C and conditionally over the shares in the development company in exchange for an option fee of £100 million. EDF Energy Holdings Ltd will invest that £100 million in further developing the Sizewell C electricity infrastructure project. Should the project reach a successful final investment decision, subject to value for money and all relevant approvals, the Government would recover this funding together with a financing return, either through an equity stake in the project, or in cash.

    This agreement represents an important milestone for both the Government’s nuclear strategy and the project, which has the potential to significantly contribute to the UK’s decarbonisation and security of supply objectives. However, I am clear that this agreement does not represent a Government decision that the Sizewell C project will progress. Neither is it an indication that similar commercial arrangements would necessarily be desirable for other prospective nuclear projects. Decisions on the Sizewell C Project will be dependent on decisions in respect of planning and designation under the Nuclear Energy (Financing) Bill if passed into law.

    Noting that the future of the Sizewell C project is not confirmed, the agreement the Government have reached with EDF provides the taxpayer with downside protection should the project not proceed. In return for the £100 million, the Government will be granted an option on the Sizewell site and conditionally over the shares in certain circumstances of the development company. In the event the negotiations with EDF do not successfully result in a positive investment decision satisfactory to all parties, then subject to certain conditions, taxpayers would be entitled to seek acquisition of either EDF’s shares in the Sizewell C development company or the site itself, or if neither can be delivered by EDF, the taxpayer would be entitled to a reimbursement of the £100 million with a financing return. This in turn would provide Government with the possibility of proceeding with alternative nuclear or low-carbon infrastructure, and therefore support the realisation of our net zero objectives.

    Today’s announcement further demonstrates our commitment to energy security, investing in our thriving nuclear sector and creating thousands of jobs.

  • Lee Rowley – 2022 Statement on Sizewell C Power Station

    Lee Rowley – 2022 Statement on Sizewell C Power Station

    The statement made by Lee Rowley, the Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy, in the House of Commons on 14 January 2022.

    This statement concerns the application for development consent made under the Planning Act 2008 by NNB Generation Company (SZC) Limited for the construction and operation of the Sizewell C nuclear power station, with associated infrastructure near Leiston in Suffolk.

    Under section 98(3) of the Planning Act 2008, the examining authority must submit its report to the Secretary of State by the end of the period of three months beginning with the deadline for completion of its examination of the application, or, if earlier, the end of the day on which it completes the examination, unless the Secretary of State sets a new deadline under section 98(4) of that Act. Where a new deadline is set, the Secretary of State must make a statement to Parliament to announce it.

    A request has been made to the Secretary of State by the planning inspectorate to extend the report writing stage of the examination by six working weeks, from 14 January 2022 to 25 February 2022. The reasons given for this request were that a significant number of change requests were submitted by the applicant during the pre-examination and examination stages of the planning process. These changes require significant additional consideration from the examining authority. The examining authority has also been affected by unexpected health issues which have impacted upon the reporting stage of the process.

    Taking these reasons into account and, after careful consideration, the Secretary of State has decided to reset the statutory timescale for the report writing stage, extending the deadline for the examining authority to submit its report to the Secretary of State by six working weeks, from the original deadline of 14 January 2022 to 25 February 2022.

    However, mindful of the need to avoid unnecessary delays to the development consent processes, the Secretary of State requests the examining authority make best efforts to complete its report as soon as is reasonably practicable within the extended period.

    The decision to set the new deadline for the report writing stage for this application is without prejudice to the decision on whether to grant or refuse development consent.

  • Anne Marie Morris – 2022 Comments on Losing the Conservative Whip

    Anne Marie Morris – 2022 Comments on Losing the Conservative Whip

    The comments made by Anne Marie Morris, the MP for Newton Abbott, on 12 January 2022 after losing the Conservative Party whip for supporting cuts to energy bills.

    It is deeply disappointing to have had the whip removed by the government, especially on a matter of simply standing up for what I believed to be the best interests of my constituents.

    I believe removing VAT is the right thing to do and I won’t apologise for supporting measures that would help my hard-working constituents at a time when the cost of living is rising.

    I believe that any disagreement over parliamentary procedure will always come second to standing up for the best interests of my constituents.

  • Ed Miliband – 2022 Comments on Michael Gove’s Promise to Cut Tax on Energy

    Ed Miliband – 2022 Comments on Michael Gove’s Promise to Cut Tax on Energy

    The comments made by Ed Miliband, the Shadow Climate Change and Net Zero Secretary, on 11 January 2022.

    Broken promises don’t pay the bills.

    Both Boris Johnson and Michael Gove promised to cut VAT on energy bills. But when push comes to shove, when families and pensioners really need support, they’ve broken that commitment.

    While Michael Gove backpedals, Rishi Sunak is missing in action.

    Labour would give families security by immediately cutting VAT on energy bills now – part of our plan to save households around £200 or more, with extra support for those feeling the squeeze the most, paid for by a windfall tax on oil and gas companies facing record profits.

    A Labour government will invest in renewables, nuclear and upgrading homes to solve the long term problem that the Conservatives have created in our broken energy system.

  • Pat McFadden – 2022 Comments on Rising Energy Bills

    Pat McFadden – 2022 Comments on Rising Energy Bills

    The comments made by Pat McFadden, the Shadow Chief Secretary to the Treasury, on 6 January 2022.

    The Government’s incompetence and failure has contributed to this crisis – destroying UK gas storage, regulation failures which customers will now have to pay for and more.

    Ministers could ease the burden on families right now by cutting VAT on energy bills.