Sarah Jones MP: speeches 2024

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Speeches

31 Oct 2024 · International Investment Summit · Hansard source
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We held, as we have said, an international investment summit on 14 October, 100 days after we formed the new Government. We secured £63 billion of investment, which is twice the level of the previous Government’s investment summit. The investment will create high-quality, high-skilled, well-paid jobs across the country, and represents a huge vote of confidence in this new Government.
31 Oct 2024 · Topical Questions · Hansard source
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Yes, indeed. I can reassure my hon. Friend that, on this Front Bench, there are Members, including me, who do have private sector experience, and who have run businesses. Of course we have had very strong relationships with businesses, both in the run-up to the election and now, and we will continue to build on those strong relationships for the benefit of all the people across our country.
31 Oct 2024 · Topical Questions · Hansard source
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The Government have no plans to undertake any trials on a four-day week for five days of pay. It is for employers and employees to reach agreements that fit their specific circumstances, but we want to get the balance right and make sure that we work with employers and employees. That is why the Employment Rights Bill will support both parties to reach agreements, where they are feasible.
31 Oct 2024 · Topical Questions · Hansard source
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I would be delighted to meet my hon. Friend often and regularly, as we do, to talk about these matters. Of course, the offshore wind supply chain is incredibly important. We have two big announcements to that end, which she mentioned, in relation to Orsted and Greenvolt, and there is much more that we can do through the industrial strategy to keep that area growing.
31 Oct 2024 · Topical Questions · Hansard source
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I thank my hon. Friend for his question and for the work that he is doing to represent his community. We are working extensively with all parties to find an outcome for Harland & Wolff that delivers shipbuilding and manufacturing in Belfast, Scotland and Appledore in Devon. I cannot comment further, as he says, due to commercial sensitivities, but we are working extensively with everyone to get the right deal.
31 Oct 2024 · Topical Questions · Hansard source
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I am glad that the hon. Gentleman asks what we are doing to engage with the Department for Energy Security and Net Zero, because I sit across that Department and the Department for Business and Trade. The entire point of my role is to make sure that we join up the two Departments, so that we can crack some of these problems. The grid is No. 1 on our list.
31 Oct 2024 · Topical Questions · Hansard source
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In little more than 100 days in government, this Department and its Secretary of State, who is flying to Doha today, have set about delivering on the promises made in our manifesto. We have turned up the dial on growth and published our Green Paper on the modern industrial strategy, which will channel support to key sectors, work across our nations and regions with the private sector, and deliver the conditions for investment and good jobs. We have delivered a huge vote of confidence in the UK by securing £63 billion of investment at our international investment summit, boosted by investment ploughing into our aerospace, automotive and life sciences sectors, as announced in yesterday’s Budget. We have also kept our promises by publishing the Employment Rights Bill, which represents the biggest upgrade in workers’ rights in a generation. We are a pro-innovation, pro-worker and pro-wealth creation Government, and are investing all our time in growing the economy for the long term and turning round 14 years of failure.
31 Oct 2024 · Topical Questions · Hansard source
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We will of course keep the House updated on the results of the investment summit, but the £63 billion, as I said earlier, was a massive show of confidence in this new Government.
31 Oct 2024 · Topical Questions · Hansard source
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The hon. Gentleman oversaw the worst Parliament for living standards in modern history. We did not choose that inheritance, and we have made choices. Would he rather we did not compensate for the infected blood scandal? Would he rather we did not compensate the Horizon victims, for whom there was no money in the Budget, on his watch? Would he rather we did not invest in the health service? Would he rather we did not increase the minimum wage? Would he rather we did not support carers? Would he rather we made the choices that he made, such as cutting national insurance for workers when there was no budget for that? This Government are fixing the foundations, so that we can have a bright future for all our country.
31 Oct 2024 · Topical Questions · Hansard source
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Yes, I will work with my hon. Friend. We are delighted with the £1 billion investment secured to transform the Shotton mill site. I think that a Labour Government in Westminster and a Labour Government in Wales can work together to deliver great things.
31 Oct 2024 · Topical Questions · Hansard source
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I will not take any lectures from the Opposition, who said “eff business”. Conservative Members have some cheek to come at us when we are clearing up the £22 billion black hole that we inherited, and setting in train stability. I spent quite a lot of yesterday, as the hon. Gentleman would expect, talking to and having meetings with businesses about the Budget and its implications. We talked about the potential for growth, long-term stability, and changes that this Labour Government are making.
31 Oct 2024 · Topical Questions · Hansard source
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I agree with my hon. Friend. It is essential that local communities see the benefits of landmark investments. I am pleased that Blackstone is investing £110 million in a fund to support local skills training and transport infrastructure. I am happy to have a conversation with my hon. Friend about what more can be done.
31 Oct 2024 · Topical Questions · Hansard source
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I admire the hon. Gentleman’s ability to shoehorn in a question on a subject that is not in the Department for Business and Trade’s remit, but we are of course happy to help with his endeavours to talk to Ministers in the Department for Transport.
17 Oct 2024 · International Investment Summit · Hansard source
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The hon. Member for Grantham and Bourne (Gareth Davies) was doing so well. [ Laughter. ] He was doing so well in the first half of his comments and then he returned to the same old tired lines that got the Conservatives defeated in the general election. I am so pleased to be closing this debate today, which in a parliamentary context draws to a close a hugely positive and successful week for the United Kingdom. I thank all hon. Members who contributed to the debate. I am disappointed that only one Conservative MP managed to make it here to speak in the Chamber and that nobody from the SNP managed to come. I am surprised that they are not here to welcome the week we have had so far. The Prime Minister made this Government’s guiding mission clear from day one: we will go for growth at every opportunity, and we are doing that in spades. A week ago today, we launched our landmark Employment Rights Bill to create more secure employment and a happier and more productive workforce. On Monday, we launched our industrial strategy Green Paper, something business has been crying out for, which lays strong foundations for 10 years of growth and investment in our most important sectors. Also on Monday, the Prime Minister hosted some of the world’s biggest investors to show them why, under this growth-driven Government, UK plc will be a blue-chip company that they should invest in. As was mentioned, Elton John was there to speak. I should tell the House that he took no fee—he took no fee. He wanted to come and celebrate with us the commitment of companies from across the world coming to the UK. Before I talk a bit more about the investment summit, I want to pay tribute to the Members who spoke today, in particular those who made their maiden speeches. As someone who wells up quite often and quite easily, this was a difficult debate for me. There were many moments when we looked up at the Gallery and saw parents and other family members wiping tears from their eyes. It was lovely to see. I loved the motto of my hon. Friend the Member for Ossett and Denby Dale (Jade Botterill). Working hard and talking straight is a great motto for this new Government. My hon. Friend the Member for Congleton (Mrs Russell) gave us a wonderful tale of her constituency and its people, including a slightly odd story, I have a say, about Beartown. [ Laughter. ] But there we go; that’s Congleton! My hon. Friend the Member for Buckingham and Bletchley (Callum Anderson) gave a great speech, telling us about the importance of Bletchley Park and its influence not just in world war two but on the technical age we are in today, and talking about the advanced manufacturing in his constituency. My hon. Friend the Member for Banbury (Sean Woodcock) was a Labour Student. I do not know how many members of the Cabinet were Labour Students —I was not—but it is quite a good stomping ground for future Cabinet members. He paid wonderful homage to the people and the place of Banbury. Diolch to my hon. Friend the Member for Bangor Aberconwy (Claire Hughes) for an incredibly beautiful speech about her constituency, its proud industrial history, and the ingenuity and innovation that it still shows. My hon. Friend the Member for Bournemouth West (Jessica Toale) spoke without notes and made a really impressive speech. The passion with which she wants to reignite pride in her town and in our country was very well understood. My hon. Friend the Member for Earley and Woodley (Yuan Yang), who has incredible experience, not least working at the Financial Times , talked about the life sciences in her constituency and how important they are. I look forward to meeting her next week to talk about that more. My hon. Friend the Member for Vale of Glamorgan (Kanishka Narayan) also spoke without notes. He spoke lovely words about his predecessor, told a lovely story about the history and beauty of his constituency, and paid tribute to his constituents. Many of us have spent many happy days in Barry island—I certainly have. At the investment summit, £63 billion of investment was announced, more than double what was raised at the Opposition’s summit last year. Iberdrola doubled its wind energy investment in the UK from £12 billion to £24 billion; there was £10.5 billion from Orsted and Greenvolt, and more than £200 million from SeAH Wind. There was £8 billion for carbon capture, which will create 4,000 jobs and support 50,000; £2 billion from Octopus Energy and £1.3 billion from Macquarie for solar projects; £6 billion of new money for data centres, on top of the £10 billion recently committed by Blackstone and £8 billion from Amazon; £1 billion for DP World’s London Gateway, and £200 million for a new freight ferry terminal at the Port of Immingham; more than £300 million for Holtec’s advanced engineering plant in South Yorkshire; £500 million from BMW Group for battery energy storage; more than £2 billion for rail and air projects from Network Rail and Manchester Airports Group respectively; and £400 million for life sciences and healthcare innovation. Moreover, our fantastic Imperial College London will put £150 million into a new R&D campus. On top of these transformational investments, we have proved our credentials as a pro-business Government. Thanks to the Chancellor’s announcement that the UK Infrastructure Bank would be turned into the national wealth fund, we are catalysing tens of billions of pounds of private investment into the UK’s clean energy and growth industries, including green hydrogen, carbon capture and gigafactories. We are establishing an industrial strategy advisory council, led by Clare Barclay, to help deliver the pro-business environment on which our industrial strategy will depend. We are creating a British growth fund that will fuse pension investments and venture capital markets. We are expanding the Office for Investment to ensure that international investors receive the information and guidance they need to invest in Britain, and we are cutting red tape to remove redundant reporting requirements, while making it easier for companies to re-domicile themselves in the UK—and all this within 100 days of our taking office. From more rights for a more productive workforce, to a pioneering industrial strategy for our sectors of the future, to scores of investments worth tens of billions of pounds, this Government are delivering change. The last Government’s scattergun approach to growth left our country starved of investment, economically divided and struggling to maintain our competitive edge in the global economy. Growth was anaemic; wage growth flatlined on their watch. Productivity was down; the gap between France, Germany and the United States doubled since 2008. We saw the lowest investment share as a percentage of GDP in the G7, and we ranked 27th out of 30 in the OECD last year. That is on top of the state of the public finances that the Conservatives left us, with public services starved of investment, millions of days of work lost to strike action, and rocketing debt. However, in just 100 days this Government have already laid down the blueprint for 10 years of growth through our biggest and most innovative sectors; secured £63 billion in new investments that underline our potential as a world leader in renewable energy, life sciences, technology and clean growth; and brought forward a raft of reforms to create a happier, more secure and more productive workforce.
17 Oct 2024 · International Investment Summit · Hansard source
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The shadow Minister knows that we are working very closely with businesses, business organisations and others to ensure that the changes we bring in grow our economy. We have huge confidence from a raft of people. For every quote the hon. Gentleman can find, I can find 10 that say the opposite. He can pick on one if he wants to, but I suggest that £63 billion does not lie. Let us not forget that our summit on Monday was organised in a matter of weeks. The Conservative party had two years between their investment summits, yet we secured double the amount of investment compared with its summit last year. To respond to a couple of other points, the Lib Dem spokesperson, the hon. Member for St Albans (Daisy Cooper), rightly mentioned business rates. We are looking at that and will deliver on the commitments in our manifesto. She was right to raise skills, which are a huge challenge for us. We see huge opportunities for growth across the entire country but we must ensure that we have the skills landscape, which is why we are setting up Skills England. She also talked about the national wealth fund and its ability to crowd in funding for the green sector and green technologies; it absolutely will do that. To summarise, across the House we are united in the belief that Britain needs to facilitate growth. Let us face it, we have been severely starved of it. Only through growth can we keep taxes lower for working people, invest in our public services and create secure, well-paid, high-skilled jobs. Of course, this is against a backdrop of the poor economic inheritance left by the Conservative party, who lurched repeatedly from Prime Minister to Prime Minister, gave us seven growth plans in 14 years, made millions of people pay the price of a Trussonomics Budget and saddled the people of Britain with a low-growth, low-productivity, low-investment economy. The steps that this Labour Government have taken in just 100 days show that we are overturning the Conservatives’ legacy of inaction, stagnation and deterioration, and creating a country of stability, innovation and prosperity. Question put and agreed to. Resolved, That this House has considered the International Investment Summit.
17 Oct 2024 · International Investment Summit · Hansard source
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I am always happy to meet and to talk about what more we can do in our next 100 days, and indeed—we hope—our next five to 10 years in government. Some Conservative Members have questioned whether some of these investments were teed up under the last Government. They know perfectly well that business confidence can rapidly change investment decisions. All the announcements included are of new, firm commitments being made by companies to invest in the UK either when final investment decisions have been taken or when announcements have been accelerated or unlocked because of actions taken and support provided by this Government. I am sure that Conservative Members will have seen the letter, published in The Times at the start of the week, from five of the world’s biggest banks, joined by private equity firms, insurers and tech giants, saying that it was “time to invest in Britain”, and that Britain’s “greater stability” had increased its attractiveness to investment, which was of course a reference to Labour’s decisions when we took office. They concluded: “We are optimistic about the future of the economy, and believe it is time to invest in Britain.” The fact that scores of investors attended our summit on Monday, with tens of billions of pounds being firmly committed to new projects, shows that under this Labour Government, business and investors have a great deal of confidence in our growth mission.
16 Oct 2024 · Steel Industry · Hansard source
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The hon. Gentleman will understand that I am not in a position to define what commercial companies do. While we are trying to do what we can, I cannot do anything other than say that we are working incredibly hard with the owners to ensure that we get to a point that we want to get to. The hon. Member for Strangford (Jim Shannon) mentioned Harland and Wolff, and the same situation is true there. We are working hard to understand the situation and we are hoping for a resolution relatively soon.
16 Oct 2024 · Steel Industry · Hansard source
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indicated dissent.
16 Oct 2024 · Steel Industry · Hansard source
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It is a pleasure to serve under your chairmanship, Mrs Harris. I congratulate the hon. Member for Boston and Skegness (Richard Tice) on securing this important debate, which I am glad that we are having. Let me be clear at the outset: the new Government were elected on a mandate to invest in the UK steel industry and turn around its decline, and that is exactly what we will do. As Members on both sides of the Chamber have echoed, the UK has always been a proud steelmaking nation; it has a rich heritage stretching back to the industrial revolution. My grandad worked in the tinplate factory fed by the steelworks of Port Talbot, and I think most of us in this place have connections, one way or another, to steel manufacturing. Yet, as has been said, steel has been a neglected industry for many years, with crude steel production declining by more than 50% in the last decade alone. Of course, that decline was brought into sharp focus when it was announced under the last Government that the blast furnaces would be closed at Port Talbot. This Government do not believe that decline is inevitable. The decline we have seen in recent years has been due to a lack of care from previous Governments, who did the bare minimum only when it was too late. We saw the insolvency of SSI—Sahaviriya Steel Industries—steelworks in Redcar in 2015 and the insolvency of British Steel in Scunthorpe in 2019, and we saw how close Tata came to closing its UK steel operations. That pathway risked jobs and emissions being offshored for the long term and risked making us heavily dependent on steel imports for our vital infrastructure and our energy and manufacturing sectors. This Government are taking a very different approach. This week, we launched a Green Paper on our industrial strategy. For that to have the greatest impact, we must be clear-eyed about the sectors that offer the highest growth opportunities for the economy and businesses, but steel is a foundational industry for practically every other important industry, from energy to infrastructure. We know that it is a vital component of our economy and our ambitions for growth, which is why we also need a steel strategy to determine the best steps forward to rebuild this hugely important industry. We need to lay out long-term policies and plans to ensure that the UK steel industry is not left behind as the world decarbonises, so last month the Government announced that we will bring forward a new steel strategy next spring. I hear the House’s impatience for that strategy and I understand it: there has been a long period of decline, and we need to turn that around. Given the £2.5-billion investment that we have committed to the strategy, however, it is right that we talk to experts and to politicians around the country, particularly those who have steel in their areas.
16 Oct 2024 · Steel Industry · Hansard source
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indicated dissent .
16 Oct 2024 · Steel Industry · Hansard source
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The process of selling the company is going through. That is a market situation, being dealt with in that way, so Government are not providing funding or anything such as that at this point. We are allowing the process to take its course, but we are obviously talking to all parties to do what we can to ensure that we get the right outcome. I have been talking to politicians from all four of the Harland and Wolff sites, as can be imagined, and there is uncertainty in each of those areas, whether that is in Scotland, Devon or Belfast. We are working hard to ensure the right outcome. To close my remarks, in steel, not to mention the wider economy, the inheritance of this Government from the previous Government was nothing short of a travesty. We had more than a decade of lurching from crisis to crisis, with no clear plan to safeguard the future of a competitive domestic steel industry. This Government are determined to change that, making the steel industry in this country fit for the future so that it is not left behind in a decarbonised world. The Government are on the side of Britain’s thousands of steelworkers. We have not talked about the other parts of the country where we also have steel production. Marcegaglia, which is in Sheffield, announced a couple of weeks ago that it is investing £50 million in a new electric arc furnace in Sheffield, so we have incumbents here in the UK that are doing well. The Government are determined to ensure the future of British steel. We are on the side of Britain’s thousands of steelworkers and we are working closely with our trade unions, experts and others to develop our steel strategy. We believe that steel will forge our future, not just our past, and I look forward to working with all hon. Members in this place to develop a steel strategy that sets us up for the next 10, 15 or 20 years to come.
16 Oct 2024 · Steel Industry · Hansard source
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I thank the hon. Gentleman for his intervention and for reading out a message from somebody watching the debate. We all agree that it is time for action and that is exactly what the Government seek. I will expand on our plans. The steel strategy will be developed and delivered in partnership with the steel sector and the trade unions, of course. It will work in lockstep with the Government’s industrial strategy. Our intention is to increase our UK capabilities, so that we can create a more vibrant, competitive steel sector. That will turn around the situation we inherited, where— I want to emphasise this—under-investment had resulted in dated infrastructure. My hon. Friend the Member for Stockton North (Chris McDonald), who knows so much about the steel industry, made the point about the efficiency and economy of the new technologies, and why blast furnaces have struggled to make money for the businesses that own them in this country. British Steel’s blast furnaces were built in 1938 and 1954. Both the blast furnaces at Port Talbot were built in the 1950s. They have become incredibly unproductive because they have not been invested in. The new technologies are simply more productive. If we do not keep up with what the rest of the world is doing, we simply will not be able to compete in the market. We inherited an industry on the brink. Nevertheless, within 10 weeks of coming into Government, we negotiated a better deal with Tata with better safeguards for workers and more money invested in their future. Our £2.5-billion fund for steel will ensure that we have a steel industry for the future. The Government’s ambition is to ramp up investment, strengthen our supply chains and create more well-paid jobs in the places they are needed. We talk of primary steel. With the help of experts, we will review the viability of technologies for the production of primary steel, including direct reduced iron.
16 Oct 2024 · Steel Industry · Hansard source
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I think I was fairly clear. We have been in opposition. We want to produce primary steel in this country; the previous Government got us to a point where that is almost impossible without huge investment. We are supplying £2.5 billion of investment and looking, quite rightly, at the best way to spend that to create a viable steel future for this country. We are looking at direct reduced iron as part of our steel strategy, which the previous Government did not do. The UK’s ambition is to ramp up investment. Many hon. Members talked of the need to procure British steel in this country, and we are now in a situation where 95% of the steel procured by the UK Government for infrastructure is British, if the necessary type of steel is made in the UK. The issue is that we do not produce all the different and right types of steel, so we need to ensure that we use the Procurement Act 2023 as much as we can to drive economic growth in steel. I disagree with the hon. Member for Boston and Skegness on whether the green agenda can drive up jobs—we think that it can. For example, the Korean company SeAH is building a factory in Teesside that will build monopiles, which are the big structures that go into the ocean and anchor wind turbines. It is currently building that structure with 30,000 tonnes of steel from British Steel. We want to get to a point where we are not only building those kinds of factories in this country but using British steel where we can to make the infrastructure. At the moment, we do not have a factory that makes turbines on the scale that we need for floating offshore wind, but SeAH is building that factory because it has an agreement with RWE, which will be running the turbines that it builds in future. That green job development into wind and renewable energy is driving our ability to build a factory in Teesside to create hundreds of jobs to build those monopiles, and we are using British steel. That is the kind of future that we want to see through the steel strategy; we are looking at those opportunities to bring new steel companies into this country and to find ways to drive up production in this country. I should address the issues holding us back, as they were mentioned in the debate. China and excess capacity is a huge issue that we should not underplay. China is now the biggest steel producer in the world and its unfair subsidies have led to massive steel over-production, which fuels global overcapacity and drives down prices. That is a global issue with local consequences that makes profitable steel production here in the UK much harder. That key global situation is helping to shape our future steel strategy and we will need to tackle that problem through things like the carbon border adjustment mechanism—CBAM—and ensure that we are working with a level playing field. Energy prices were mentioned by many Members, and for too long British energy-intensive industries, including the steel sector, have been held back by high electricity costs. Again, I disagree with the hon. Member for Boston and Skegness: electricity prices are set by global gas prices and the problem is our dependence on fossil fuels, as well as the fact that we did not mitigate for that situation in this country at all. When all the prices shot up with the war in Ukraine, we were in a worse position than many countries around the world. The British industry supercharger that the previous Government developed, which the hon. Member for Brigg and Immingham (Martin Vickers) mentioned, will bring down electricity costs for the UK’s most energy intensive industries, but we know that we need to go further. It brings down only 60% of costs and there is still a disparity. We believe that, in an unstable world, cheap home-grown green energy is the future. That is what will drive down prices, reduce our exposure to the volatile fossil fuel market, protect bill payers and strengthen our energy independence. Fundamentally, that is what will bring down costs in the long term. Members also mentioned the challenges of decarbonisation. Tata and British Steel’s plans to invest in electric arc furnaces are driven by market conditions and the desire to reduce their carbon footprint—customers want greener steel. The UK is going to have a CBAM. If we were producing steel in the UK with blast furnaces, we would be massively inhibited because the EU is bringing in a CBAM, so the cost of exporting to the EU would be much higher. We have to deal with the world as we find it, which again is where we disagree with the hon. Member for Boston and Skegness. We cannot look back and try to re-create the past; we have to deal with the world as we find it, which means that we have to move towards those more efficient and greener energies. The EU, where 78% of our steel exports went in 2023—that is worth pointing out—will bring in its carbon border adjustment mechanism in 2027. We rely on exporting a lot of the steel we produce to the EU, and we would be at a massive disadvantage were we to carry on producing steel from blast furnaces. We have committed to a UK carbon border adjustment mechanism, which will give UK businesses the confidence that, when they invest in decarbonisation and electrification, they will not be at a disadvantage. That is important. On other issues mentioned by hon. Members, I should touch on Scunthorpe, because that is at the forefront of everyone’s mind. No one wants to see any job losses, and everyone wants to see the steel industry thrive. Through our strategy, that is what we want to do. For commercially confidential reasons, which I am sure hon. Members understand, I cannot talk about our conversations with the owners, but I reassure Members that we are having conversations all the time and that we are working unbelievably hard to get a solution for Scunthorpe and to give the certainty that the hon. Member for Brigg and Immingham talked about. I completely understand the issue with the instability of the current situation, but all I can say to him is that we are doing all we can to work with the company on what the future will be.
16 Oct 2024 · Draft Contracts for Difference (Electricity Supplier Obligations) (Amendment) Regulations 2024 · Hansard source
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I beg to move, That the Committee has considered the draft Contracts for Difference (Electricity Supplier Obligations) (Amendment) Regulations 2024. As always, Sir Edward, it is a pleasure to serve under your chairship. This statutory instrument, which was laid before the House in draft on 30 July 2024, forms an important part of the Government’s commitment to accelerate the deployment of carbon capture, usage and storage. CCUS is critical to deliver clean energy and accelerate our net zero journey. As the Government recently announced, CCUS is vital as we enter into a new era of clean energy investment and jobs. By boosting this tried-and-tested technology, the UK has the potential to become a global leader in CCUS, delivering good jobs and economic growth for decades to come. A critical element of the CCUS mix is the successful deployment of power CCUS—gas-powered electricity generators fitted with carbon capture technology. [ Interruption. ] It is a bit more complicated than I just tried to indicate, but that is the gist. Power CCUS will complement the roll-out of renewable energy, providing the secure, flexible, non-weather-dependent, low-carbon electricity that is critical for a reliable energy system and for achieving our mission of clean power by 2030. The Government are committed to incentivising the deployment of power CCUS, and this statutory instrument will enable future payments to power CCUS plants under a business model called the dispatchable power agreement. The DPA is the contract framework to support power CCUS. It has been designed especially to incentivise investment in and the deployment of power CCUS in the UK. Dispatchable power agreements are a type of contract for difference. Like contracts for difference, they use the electricity supplier obligation to fund support payments. The levy is calculated and managed by the CfD counter-party—the Low Carbon Contracts Company—and collected from electricity suppliers such as Octopus or British Gas, which can pass the costs on to their customers if they choose to do so. In addition to the existing renewable CfD contract design, the DPA business model will provide an alternative payment based on a power CCUS generator’s availability. This availability payment is based on a generator’s availability in respect of electricity generation and carbon capture, and associated carbon dioxide transport and storage network costs. Under the DPA terms, payments will reduce proportionately to reflect any reduction in a generator’s CO 2 capture availability—in other words, its capture rate—or generation. A payment is made whether a generator dispatches power or not. This ensures that a CCUS power plant will run in response to market signals, ahead of unabated gas plants, but will not surpass cheaper renewables. This arrangement will strengthen our security of supply and ensure that a source of reliable low-carbon energy is available, but only when the wind does not blow and the sun does not shine. This statutory instrument enables only certain types of payments under the renewable CfD and DPA contracts to be funded by the supplier levy. Any future support offer to a project will be subject to rigorous negotiations with partners. Any decisions to award support will be subject to value for money and subsidy control tests to ensure the best value for money for consumers. The statutory instrument amends the Contracts for Difference (Electricity Supplier Obligations) Regulations 2014. The changes will allow the payments made under the DPA to be funded by the supplier levy by changing how the supplier levy rate calculation works in the regulations. First, regulation 4 relates to the way that an electricity supplier’s daily contributions paid to the CfD counter-party are calculated. The statutory instrument amends regulation 4 to change the definition of “generation payments” so that the supplier obligation can be charged for payments relating to the activities of a dispatchable power plant fitted with CCUS technology—I hope everyone is still with me. The statutory instrument includes amendments to take into account the electricity generation capacity made available by a generating station on a given day; a generating station’s achieved carbon dioxide capture rate or capture capacity on a given day; the CO 2 transport and storage capital costs incurred from transporting such captured carbon dioxide; and, if required, the associated carbon dioxide transport and storage network shortfalls, proportionate to a DPA-supported generating station, that arose on that day. Secondly, regulation 7 of the 2014 regulations sets out how the CfD counterparty estimates the quarterly obligation payment that electricity suppliers will be required to provide to the counterparty. The statutory instrument amends regulation 7 to ensure the consideration of matters related to a DPA-supported generating station, including the carbon dioxide transport and storage network capital costs and, if required, revenue shortfalls, and the amount of carbon captured. Together, the changes allow a CfD counterparty to estimate and raise funds, and ultimately to pay a DPA-supported CCUS-enabled power plant. The existing payment calculation, based on the amount of electricity generated by renewable CfD-supported generating stations, is retained and unaffected. In summary, the statutory instrument represents a positive step forward in the delivery of the Government’s ambitious CCUS programme and 2030 clean power mission. It will lay the regulatory groundwork to encourage the deployment of power CCUS and begin to unlock the great economic and jobs opportunities. I commend the draft regulations to the House.
16 Oct 2024 · Draft Contracts for Difference (Electricity Supplier Obligations) (Amendment) Regulations 2024 · Hansard source
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I have a couple of points to make. The first carbon capture and storage commitment was made in 2009, I think, but cancelled in 2010. It was then set up again at some point in the mid-2010s and cancelled again. The shadow Minister referred to the explanatory notes; the key word there is “intention”. The intention was announced, but whether the actual funding behind it was available is a different point. That is where we disagree, so I say very strongly that the Secretary of State certainly did not mislead the House. I am glad to clear that up. On track 2, we are working at pace to get things done. The costs of carbon capture are significant, as the shadow Minister knows, and we need to make sure that we spend money in exactly the right way and are as careful as we can be with what is public money. We are working with both projects—indeed, we are working on expansion in the existing track 1 allocations and on track 2—and trying to get to a point at which the cost of carbon capture comes down and we have a market that becomes self-sustaining over time. But that will take some time. I thank the shadow Minister for his comments and hon. Friends and other Members for being here. The statutory instrument before us will incentivise the deployment of power CCUS and make a significant contribution to our CCUS programme and 2030 clean power mission. I commend the draft regulations to the Committee.

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