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Tag: Alan Whitehead

  • Alan Whitehead – 2022 Speech on Public Ownership of Energy Companies

    Alan Whitehead – 2022 Speech on Public Ownership of Energy Companies

    The speech made by Alan Whitehead, the Labour MP for Southampton Test, in Westminster Hall on 31 October 2022.

    Thank you, Mrs Murray.

    Before we go any further in this debate, we ought to be clear about what the petition is calling for. I congratulate the petitioners on bringing forward the petition, which has received over 100,000 signatures, 500-plus of which are from my city of Southampton. I congratulate the petitioners on bringing it forward because it really underlines just what a dreadful state we are in at the moment with our energy provision and energy markets. I take the petition to mean that the Government should effectively expropriate all generation, all transmission, all distribution and all retail energy; place it, with compensation, in the public sphere; and then run a fully nationalised energy system, as was the case 30 to 40 years ago, before the privatisation experiment came into being.

    I can see why many people consider that that is the brief solution to the awful mess that we are in the moment. They see that they are paying sky-high energy bills and that, at the same time, a number of energy companies are making sky-high profits not from their ingenuity in suddenly developing new ways of delivering energy, but from doing what they have always done: supply gas to the UK market for the production of power, for which retail customers are paying sky-high prices.

    Those customers scratch their heads about why that has happened: “How is it that we are paying absolutely out-of-the-window high energy prices while companies are making such enormous windfall profits?” They scratch their heads when the Government spend such a long time deciding whether to alleviate some of the problems caused by those sky-high bills by introducing any form of windfall levy on those companies, and when the Government put an enormous loophole in the windfall tax so that the companies get back most of what they would have paid in windfall tax if they are, so they say, in a position to undertake further gas and oil exploration. The grotesque result is that Shell has not—

    Mrs Sheryll Murray (in the Chair)

    Order. I remind the hon. Gentleman that he should address the Chair.

    Dr Whitehead

    I apologise, Mrs Murray—I will face the right way from now on.

    The grotesque result is that Shell has stated that it has not actually paid any windfall levy because it has got it all back through that loophole. Customers see that the regulation of the system is so dreadful that they are paying enormously high prices for their power as if all of it came from gas, even though half of it now comes from much cheaper renewables. That is because the market is regulated in such a way that the marginal cost of gas provides the whole of the price for the market, and it is a substantial part of the reason why prices are so high. In short, customers have seen for themselves a thoroughly broken energy system in operation. They have perhaps concluded that the privatised norm of the last 30 years has failed, and that placing energy back in state hands is the relatively straightforward answer.

    What a delight it is to see so many Conservative Members in the Chamber to support their Government’s response, which states:

    “The Government does not agree that nationalisation of energy assets is the right approach. Properly regulated markets provide the best outcome for consumers as a driver of efficiency and innovation.”

    Wouldn’t it be nice if proper regulation did drive energy efficiency and innovation? We know that it simply does not; the failure of proper regulation is at the heart of the many problems in our energy markets. We also know that the Government themselves have recently resorted to measures that might be compared to nationalisation.

    As my hon. Friend the Member for Wirral West (Margaret Greenwood) said, Bulb—the seventh largest retail energy company in the country—went bust a little while ago, along with 40 other retail energy companies. Bulb, however, was regarded as too large to fail and was effectively nationalised by Government. It was put into special administration and has sat there for quite a while, at a cost to taxpayers of about £3.5 billion. It has just been sold for scrap, as it were, with its customers being transferred to Octopus Energy for, we think, several hundred million pounds—far less than the amount that taxpayers put in as a result of the Government’s reaction to appallingly bad regulation. Does the Minister have further information on exactly how much Octopus paid for the remains of Bulb, so that we can get an accurate grip on how much money has been retrieved from that episode?

    An energy Bill that was recently mysteriously withdrawn by the Government proposed that the operator of the national transmission system be fully detached from National Grid and placed in the public sector. That means that it would no longer be a part of National Grid, even at a distance. As set out in the Bill, the future system operator would have full power to plan the system, commission investments in it, and run and balance the system overall as a public sector organisation. However, as I say, that Bill has mysteriously disappeared, but I would be interested to know whether the Minister continues to support the idea that the future system operator be a company in the public sector, not the private sector. I would also be interested to hear when that energy Bill will return to Parliament, if at all. It contains a great deal of things that could lead to better regulation of the energy system, which is exactly what the Government are saying is the alternative to nationalising it.

    Although it is true that part of the answer to the problems we face in the energy system at the moment is proper regulation—and the Government have an enormous amount of work to do get it properly regulated—we also have to give careful consideration to where our energy system is going now, because it will not be successful in reaching its targets, particularly in the low carbon context, if we simply continue the privatisation experiment of the past 30 years. Of course, the energy system is changing before our eyes. All the old considerations about 80 or so power stations providing power for the grid and then to customers through retail sales are effectively disappearing. We now have about 1.5 million inputs that are owned by all sorts of different people. Indeed, some of that input is from companies and bodies that are not in the private sector, but are community owned or locally owned. There are all sorts of generators providing a different form of input to the grid.

    Of course, the grid itself is changing rapidly. National Grid Electricity System Operator, the forerunner of the future system operator set out in the energy Bill, considered in a recent holistic design plan that accommodating the new way in which the energy system is going to work, and making sure that it works well in future, would require a huge recalibration of the grid system, both onshore and offshore, at the probable cost of about £62 billion. An enormous amount of investment is needed to make the future energy system secure, and to get the green and low-carbon generators into it for the future. We will not sort that out by just hoping that somehow the market will come to the rescue and provide all the investment for the future based on our current regulation and system. My hon. Friends the Members for Wirral West, for Leeds East (Richard Burgon) and for Ilford South (Sam Tarry) both pointed to how that needs to be done. Perhaps we should not have to rely on the private sector to come to the rescue and sort out the future system.

    The Labour party wants a Great British energy company —a publicly owned company at the heart of investment and driving forward, planning and managing that new energy system. As my hon. Friends have pointed out, that company would stand alongside companies elsewhere in Europe that have already started that energy revolution with investments not just in their own countries but on an international scale. Companies such as Vattenfall in Sweden, which owns the largest onshore wind farm in the UK, Ørsted in Denmark, Equinor in Norway and a number of others across Europe are making investments in the future system and, moreover, keeping the equity in those investments for the people of the countries on whose behalf they are working. Either individually or in partnership with the private sector, they are turning over those investments for those people, and keeping their equity in them.

    In this country, as members of the public and customers we are spending enormous amounts of money each year on providing energy transmission and distribution companies with the means to invest in the grid system—the assets of which stay with those companies, even though we the public have paid for those assets. That is also the proposal for the new nuclear programme—we pay the money, they get the asset—but a Great British energy company would put a stop to all that. The assets would stay with the public and the money would come back to the public purse. That is the right approach. Our investment ought to go towards producing our future energy system.

    I reject the Government’s idea that this will all happen via better regulation—though it would be nice if that did happen—and the operation of the market. We need to be much smarter than that. I do not agree that we should nationalise the energy system as it stands. Among other things, if a lot of the junk and clapped out stuff in the energy market were nationalised, the people who own those stranded assets would be delighted to have them put out to grass and taken off their hands as the energy system changes, so that they could run off with the compensation money.

    We have to think smartly about the future of our systems. They will certainly not be funded, run or sorted out on the basis of the failed privatisation experiment of the last 30 years.

  • Alan Whitehead – 2021 Comments on Government’s Fuel Poverty Strategy

    Alan Whitehead – 2021 Comments on Government’s Fuel Poverty Strategy

    The comments made by Alan Whitehead, the Shadow Minister for Energy, on 11 February 2021.

    After presiding over a decade of spiralling energy bills and rising fuel poverty, it’s welcome that this Government is now taking action – but today’s announcements won’t do enough to help families make ends meet.

    The Government urgently needs to act to bring energy costs down, fix its botched Green Homes Scheme, and provide more clarity on what it will do for regions such as the North East where disproportionate numbers live in fuel poverty.

    Fuel poverty can’t be separated from other types of deprivation, which this Government has consistently failed to tackle amidst rising costs and falling incomes for families during the pandemic.

    Labour would give families security by ensuring our energy market puts consumers first, bringing in proper measures to reduce bills, and providing warm homes for all.

  • Alan Whitehead – 2020 Comments on Energy Bills

    Alan Whitehead – 2020 Comments on Energy Bills

    The comments made by Alan Whitehead, the Shadow Energy Minister, on 16 December 2020.

    It’s deeply worrying to see so many households getting behind on their energy bills, as people across the country struggle with the worst recession of any major economy, job losses and lower incomes as a result of Covid-19.

    The UK has some of the worst insulated homes in Europe, meaning higher energy bills and one in ten households experiencing fuel poverty. The Government must make their Green Homes Scheme work better to help retrofit homes at the pace and scale needed.

    And Ministers must put in place the package of business support needed to save jobs and livelihoods during this crisis and beyond.

  • Alan Whitehead – 2020 Comments on Wylfa Project Cancellation

    Alan Whitehead – 2020 Comments on Wylfa Project Cancellation

    The comments made by Alan Whitehead, the Shadow Minister for Energy, on 16 September 2020.

    The cancellation of what would have been the largest energy project in Wales, if it cannot be reversed, could have huge consequences including the loss of between £15bn and £20bn in investment. It will also prevent the creation of thousands of jobs in the energy sector and wider UK supply chain.

    We are already in the middle of an economic and unemployment crisis, yet the government has been completely silent on the potential loss of this power station and the economic impact for Anglesey and the region.

    Ministers must urgently outline whether they plan to seek new developers to take on the Wylfa project, what conversations they have had with Hitachi about the site, and how they will ensure the people of Wales do not pay the price for Hitachi’s withdrawal.

  • Alan Whitehead – 2018 Speech on Air Quality and Shipping Emissions

    Below is the text of the speech made by Alan Whitehead, the Labour MP for Southampton Test, in the House of Commons on 29 March 2018.

    It is a sad occasion that I cannot entirely join in the good wishes of the Deputy Leader of the House for the Easter Adjournment, because I am still here, along with you, Mr Speaker, and indeed a number of hon. Friends and hon. Members who have come to hear this debate and possibly to intervene briefly. I am very appreciative of their taking the time to stay behind, and indeed, of the Minister for coming along this afternoon to hear the last Adjournment debate before we finally start our Easter recess.

    The city that I represent is home to one of the UK’s largest ports. Southampton’s thriving port hosts large numbers of container vessels, roll-on/roll-off ships transporting vehicles, and many general cargo ships, along with being the main UK base for cruise ships. In just the next five days in Southampton, more than 60 large vessels are due to arrive at the port, including five cruise ships, nine large vehicle/ro-ro vessels and 10 large container ships. They are all very welcome to the port. Southampton port is not just a great asset to Southampton, but is a national trading and passenger asset in its own right.

    The ships are varied in size, content and function, but they all have one thing in common: when they are in port, often for several days at a time, they keep themselves going—their heating, lighting, power and so on—by running their engines and on-board generators as if they were at sea. During that period, a cruise liner, particularly, will consume an enormous amount of fuel—estimated to be some 2,500 litres of diesel per hour—in running its generators and keeping facilities in good order for perhaps 3,000 or 4,000 passengers. If we take account of the crew members and all the other people who are on the vessel, a cruise liner in port in the middle of Southampton running its engines in this way might be likened to a small town, perhaps the size of Romsey, turning up in the middle of a city and running exclusively on diesel generators, with all the consequences that that has for nitrous oxide and particulate emissions across the area.

    At the same time, Southampton is one of 18 cities in the UK facing possible infraction proceedings because of air quality issues in the city. Measures are under way in Southampton on the basis of commendable action by the city council to get a grip on air quality, including a future clean air zone for the city centre. The port of Southampton is working hard on its shoreside emissions. The port overall can be extrapolated as contributing overall perhaps some 25% of total emissions—of nitrous oxide, sulphur and particulates—but to date, it has not been able to do anything about the central fact of ships berthed in the port.

    However, something can be done and indeed is being done in a number of ports across the world—that is, to plug vessels arriving in port into the port’s mains electricity system, so that a ship can switch off its engines and rely on shore power to do the job. Ports in a number of parts of the world, including the United States, the far east and some parts of Europe, have installed shore-to-ship ​electrical supplies—essentially a very large plug deriving electrical supply from local power that goes into an equally large socket on the ship at berth to take over the running of the ship’s power in port.

    Shore-to-ship power is a very simple and relatively low-cost alternative to ships powering themselves when in ports close to densely populated areas. It also, potentially, makes money for ships at berth, since it is far cheaper for them to run on local power than to burn bunker fuel while in port. It certainly saves on emissions: a recent study in the United States showed that cruise vessels using shore power in one location saved 99% of their nitrous oxide emissions and between 60% and 70% of particulate emissions. Increasing numbers of vessels visiting ports in the UK now have the equipment on board that allows them to plug in. The problem is, though, that there are no shore facilities installed in Southampton, or indeed in any medium or large commercial port anywhere in the UK.

    Jim Fitzpatrick (Poplar and Limehouse) (Lab) My hon. Friend is making a very strong case for the argument he outlines. Does he believe that the absence of the shore-to-ship power supply is caused by a lack of regulation? Will he come on to what the shipping companies are expected to be able to do in terms of plugging in? Is it the responsibility of the port? Have the Government legislated on what ought to be the best practice in ports?

    Dr Whitehead My hon. Friend has raised some important points, and I shall touch on some of them in a moment. There are currently no regulations that would mandate the introduction of shore-to-ship power, although it is possible that European Union directives could be used for the purpose.

    To the credit of Southampton port, it is looking into whether it can install facilities in one cruise liner berth, but, as far as I know, it is alone in that. No other major port in the United Kingdom is following suit. The arguments that are presented for doing nothing about it are multiple and familiar. It is argued that not enough ships have the facilities to “plug in”, so it would be a waste of money, or that it is too expensive to take the plunge unilaterally, or that there are other ways in which emissions from ships might be reduced.

    Matthew Pennycook (Greenwich and Woolwich) (Lab) My hon. Friend is making a powerful case. As he will know, my hon. Friend the Member for Poplar and Limehouse (Jim Fitzpatrick) and I have concerns about the Enderby Wharf cruise liner terminal that is planned for East Greenwich. In that instance, the developer is saying that the cruise liner company with which it is working does not have the necessary technology. Is there not a role for the Government here? Could they not regulate to encourage cruise liner companies to upgrade and retrofit their fleets so that they can utilise this option when ports and terminals take it up?

    Dr Whitehead There is certainly a case for doing that. In California, regulations require a certain proportion of ships visiting ports to use shore-to-ship facilities. However, in California the facilities are already there.

    The arguments for doing nothing have some limited grounds, but unless the facilities are there, ships will have no incentive to equip themselves to use them, and, ​as I have said, there is currently no mandate for their use. Equipping a berth for large vessels would cost about £3 million, and fully equipping all Britain’s major and medium-sized ports would probably come to about £100 million.

    Alex Sobel (Leeds North West) (Lab/Co-op) Before I came to this place, I was a deputy executive member on Leeds City Council, and I attended many workshops with Southampton city councillors where I heard those same arguments. It was said that Southampton and other city councils were too hard pressed to introduce such measures. Does my hon. Friend agree that they are doing all that they can, but need Government support?

    Dr Whitehead I do agree, and in a moment I shall refer to the support that the Government might be able to provide. If we are to roll out shore-to-ship power across the country, we shall need a combination of stick and carrot.

    The £100 million that I have just mentioned would, however, largely be recovered—eventually—in fees in subsequent years, because ships coming into port would be charged for the electricity that they used, although it would be cheaper for them than using their own bunker fuel. It is true that some companies are making an effort to modify the fuel that is used by generators when ships are in port so that they run on, say, liquid petroleum gas rather than diesel or bunker fuel, but nothing comes close to the benefit of shore-to-ship supply.

    So how can we make a break in the apparent stand-off that currently exists in the UK? Ports may be aware that shore-to-ship power is beginning to happen seriously around the world, and ships are increasingly turning up ready to go, but everyone is looking over their shoulder to see whether anyone else is moving first. It might, commendably, be Southampton—although even then the initiative is for only one berth, which is a start but leaves a long way to go—but Southampton should not be in such a position.

    My central call this afternoon is for Government to take the lead in the creation of a level playing field for all ports in the UK for shore-to-ship installations by giving notice of an intention to mandate their use in ports by a specified date and, if I can venture a suggestion, to place aside a modest fund to assist ports in installing the necessary equipment over the specified implementation period.

    That is not exactly a novel idea, because an EU directive already exists—directive 2014/94/EU, to be precise, known as the alternative fuels infrastructure directive or AFID. It says this on shore-to-ship power, in article 4(5):

    “Member States shall ensure that the need for shore-side electricity supply for inland waterway…and seagoing ships in maritime and inland ports is assessed in their national policy frameworks. Such shore-side electricity supply shall be installed as a priority in ports of the TEN-T Core Network, and in other ports, by 31 December 2025”.

    Article 4(6) states:

    “Member States shall ensure that shore-side electricity supply installations for maritime transport, deployed or renewed as from 18 November 2017, comply with the technical specifications set out in point 1.7 of Annex II.”

    The Government have consulted and responded to the consultation on the directive, except that in the consultation they have scrupulously put the implementation of article 4(6) into train by insisting that statutory operators​
    “must ensure that new or renewed shore side supply installations must comply with certain technical standards”.

    Frankly, I imagine that that will be fairly easy to comply with given that none exist. Of course, there is not a mention in the consultation or response of the rather more difficult point made in article 4(5).

    In other words, as far as I can see, the Department does not intend to do anything about that. So my other call this afternoon—or rather perhaps a question—is about why the Department has apparently ignored one of the central points of the alternative fuels directive. Does it intend to put that right and get on with a programme of installing shore-to-ship charging before we are no longer mandated to do so at the end of the transition period of leaving the EU? Or does it just intend that such a mandate might just slip away and get lost after our exit from the EU is complete? If the latter is the case, that will be a sad outcome both for Southampton and all the populations of the ports around the country who welcome and support the port activity in their towns and cities but want those ports to be contributors to the health and clean air of their cities rather than detractors.

    I hope that the Minister has a positive response for me this afternoon so that I can wish her, as well as everybody else, a happy Easter.

    Jim Fitzpatrick I sensed that my hon. Friend was heading to a conclusion. At the beginning of his speech, he said how important the port of Southampton is for the wellbeing of the city, so will he confirm that this is not an attack on shipping, which is a fundamental industry for the UK economy? Members want to support shipping and are asking the Government for leadership in ensuring that shipping is more environmentally friendly and clean in the future. That will mean that when new cruise terminals are proposed for places such as the centre of London, people will welcome that because of the economic benefit it will bring and because they know that it will operate on an environmentally clean basis.

    Dr Whitehead My hon. Friend makes an important point, which I want to emphasise a little more. The presence of the port and all the activity that goes on with it are wholly welcomed in Southampton. I am sure that that is exactly the same in other cities that are close to and host major ports in the UK. Those cities do not want to see the end of those ports; indeed, they want to see development and thriving arrangements. All the boroughs around those cities have a joint interest in ensuring that the ports thrive as best they can. Over the years, Southampton has been substantially supportive of the growth and development of the port, but we want ports to work on the same basis as everyone else, cleaning up the air around us and ensuring that we can live in an environment that is conducive to the thriving of those ports for the future.

    Hoping that the Minister has a positive response for me this afternoon, I will end with the thought that that response will literally enable my constituents to breathe more easily.