Climate Ambition Summit 2020
Lord Sharma Excerpts(3 years, 11 months ago)
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The Secretary of State for Business, Energy and Industrial Strategy (Alok Sharma)
On 12 December, the United Kingdom co-convened the Climate Ambition summit with the United Nations and France, and in partnership with Chile and Italy, on the fifth anniversary of the Paris agreement. The summit marked a major milestone on the road to the crucial UN climate conference COP26 in Glasgow next November.
Countries representing around 65% of global carbon dioxide emissions, and around 70% of the world’s economy have now committed to reaching net zero or carbon neutrality. This includes announcements made in the run-up to and at the Climate Ambition summit and those expected early next year. This follows a huge diplomatic and cross-government effort to raise ambition.
75 leaders from all continents outlined over 90 commitments at the summit demonstrating that climate change is a global priority despite the shared challenges of covid-19. There is mutual understanding that the science is clear. Climate destruction is accelerating, and there remains much more to do as a global community to keep the global temperature rise to 1.5C.
The UK met commitments covering the three pillars of the Paris agreement. We formally communicated our nationally determined contribution (NDC) to the UNFCCC which commits the UK to a new ambitious target to reduce the UK’s emissions by at least 68% by 2030, compared to 1990 levels, published our first adaptation communication and reiterated our commitment to providing £11.6 billion in climate finance. A copy of the NDC has been laid in Parliament.
The Prime Minister announced that the UK will no longer provide any new direct financial or promotional support for the fossil fuel energy sector overseas, other than in exceptional circumstances, as soon as possible, and align its support to enable clean energy exports. The consultation, which is now live, will seek views on how to further enable an accelerated growth in UK clean energy exports, and on the impacts of the timing of implementation of the policy shift.
The Prime Minister also highlighted the 10-point plan for a green industrial revolution announced last month which spans clean energy, buildings, transport, nature and innovative technologies and will mobilise £12 billion of Government investment to unlock three times as much private sector investment by 2030; support up to 250,000 highly-skilled green jobs; and level-up regions across the UK.
44 countries and the EU announced headlines of their more ambitious NDCs. This includes a number of countries who have made significant increases such as Colombia, Jamaica, Peru and the EU, as well as the UK.
24 countries have now announced new commitments, strategies or plans to reach net zero or carbon neutrality with recent commitments from China, Japan, South Korea and Argentina establishing a clear benchmark for G20 countries.
The summit heard from the poorest and most vulnerable countries, who are already feeling the impacts of climate change. Barbados, Ethiopia and Maldives set themselves an aim of achieving carbon neutrality by 2030, with the right support. Meanwhile, Fiji, Malawi, Nauru and Nepal and others are aiming for 2050.
20 new or forthcoming adaptation commitments including in national adaptation plans, adaptation communications and NDCs. Countries such as Ethiopia are leading the way, by taking a whole-of-economy approach that protects people and nature, and Suriname is stepping up its implementation of its national adaptation plan. Developed countries, including the UK, Netherlands and Spain, are also upping their adaptation efforts, showing no country is immune to the impacts of climate change. The summit also saw the launch of the Race to Resilience, setting a goal of safeguarding 4 billion people vulnerable to climate risks by 2030 (more detail below).
A number of leaders set out concrete policies to implement their economy-wide targets. Pakistan announced that it will have no more power based on coal, while Israel has committed to ending fossil fuel energy use by 2050. Canada greatly increased the floor price for carbon. Denmark announced that it will end all new oil and gas exploration in the North sea. Fifteen countries profiled their targets to accelerate the transition to renewable energy by 2030—with Barbados (fossil-fuel free), Vanuatu (100% renewables) and Austria (100% renewables) all turning their backs on fossil fuels. Alongside the UK, France and Sweden set out plans to end international financial support for fossil fuels.
A strong commitment to protecting nature was also clear. Leaders spoke about their existing plans to increase the use of nature-based solutions to combat climate change.
12 donor countries highlighted their commitments to support developing countries, including just under €500 million in additional investment from Germany, an additional €1 billion per year from France from its previous target, as well as a World Bank commitment to ensure that 35% of its portfolio includes climate co-benefits, and an EIB commitment to ensure that 50% includes climate co-benefits, as well as 100% alignment of EIB’s activities on Paris agreement. However, it is clear that there is much more to do to ensure that no one is left behind. Covid-19 has impacted international climate finance flows this year. 2021 will be a critical year to show that finance is flowing and to meet and surpass the $100 billion goal.
The summit also saw commitments from business, cities and investors. Over 2,500 businesses, cities, regions, investors and members of the Climate Ambition Alliance representing nearly 70% of the global economy have now got commitments to net zero by 2050.
The Race to Resilience campaign, launched at the summit, brings together non-state actors and initiatives which commit to building resilience actions to safeguard by 2030 the lives and livelihoods of 4 billion people from groups and communities vulnerable to climate risks. Examples of actions include: Zurich Insurance (Switzerland) announced that the Zurich Flood Resilience Alliance will triple funding by 2025 and expand its reach from 11 to 21 countries, and the Mayor of Freetown (Sierra Leone) committed to planting 1 million trees between 2020 and 2021.
Net Zero Asset Managers Initiative (Global)—representing US$9 trillion of assets under management has seen each of the 30 founding members unequivocally commit to achieving net zero emissions by 2050. This includes setting individual portfolio targets, as well as engaging companies in each member’s portfolio to set decarbonisation goals in line with limiting global temperature rise to 1.5C.
C40 Cities (Global)—announced the launch of the Cities Race to Zero campaign and that 70 cities and local governments have joined in the first month.
Godrej & Boyce (India)—a manufacturing company, announced commitments to key global initiatives including the business ambition for 1.5C, setting science-based targets, and advancing energy efficiency, in line with their overall ambition to achieve carbon neutrality by 2050.
International Airlines Group (Spain/UK)—are the first airline group worldwide to commit to achieving net zero emissions by 2050, and the Oneworld Alliance of 13 airlines representing 20% of global aviation is investing US$400 million in the development of sustainable aviation fuels (over the next 20 years).
Dalmia Cement (India)—40 of the world’s leading producers of cement issued an industry commitment to deliver carbon-neutral concrete by 2050. The Indian cement company has gone further and established a roadmap to become carbon negative by 2040 and is working globally to meet its 100% renewable energy objectives.
Movida-Rent-a-Car (Brazil)—presented the actions that will underpin their pledge of net zero emissions by 2030 and becoming carbon positive by 2040.
Apple (United States)—pledged carbon neutrality for its supply chain and products by 2030 and announced new progress that 95 of its suppliers have committed to moving to 100% renewable energy.
Artistic Milliners (Pakistan)—a textile company announced joining the UN fashion industry charter for climate action and shared their actions on the circular economy to reduce their carbon footprint and provide zero emissions energy to thousands of homes.
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Oral Answers to Questions
Lord Sharma Excerpts(3 years, 11 months ago)
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Duncan Baker (North Norfolk) (Con)
The Secretary of State for Business, Energy and Industrial Strategy (Alok Sharma)
Both the Prime Minister’s 10-point plan and our energy White Paper, which we published yesterday, set out our bold ambition for the UK to be a world leader in low-carbon hydrogen. As set out in the White Paper, we are determined to make tangible progress in this important sector, including by investing £240 million through the net zero hydrogen fund and supporting industry to begin a hydrogen heating trial in an entire neighbourhood by 2023. We will publish a comprehensive hydrogen strategy early next year.
Dr James Davies
The development of hydrogen energy can lead to thousands of new jobs UK-wide, including an estimated 6,000 in my region through the HyNet project. Will my right hon. Friend do all he can to help HyNet access industrial decarbonisation challenge funding to allow it to progress?
Alok Sharma
My hon. Friend is absolutely right: this is all about jobs—high value-added jobs. He, along with other colleagues in the House, makes the case at every opportunity for the HyNet project, and it is very lucky to have him as a champion. As he will know, HyNet has already received funding through phase 1 of the industrial decarbonisation challenge, as well as £13 million of support through the Department for Business, Energy and Industrial Strategy energy innovation programme. We will announce the winners of the next phase of the industrial decarbonisation challenge in spring next year.
Duncan Baker
Bacton gas terminal in my constituency harbours a significant percentage of the natural gas intake into the UK. What assessment has my right hon. Friend made of the potential opportunities presented for the manufacture of blue hydrogen at Bacton, creating low-carbon jobs for the east of England?
Alok Sharma
My hon. Friend again raises the issue of jobs. Of course, creating these low-carbon jobs across the country is a priority for the Government. As I have set out, in our 10-point plan and the energy White Paper we have put forward policies for the creation of a significant number of jobs. The Oil and Gas Authority is currently conducting an in-depth feasibility study into blue hydrogen at the Bacton gas terminal. I very much welcome that work, and my officials and, indeed, Ministers would be very happy to engage further with my hon. Friend on this matter.
Dr Alan Whitehead (Southampton, Test) (Lab)
I am pleased to see that the net zero hydrogen fund that the Secretary of State just mentioned will support, among other things, the production of hydrogen. Will he commit today to using that fund to prioritise the production of green hydrogen, as opposed to blue hydrogen, in the future?
Alok Sharma
We will have to look at what bids come in in respect of how that funding is used, but I say again—I made this point yesterday at the Dispatch Box—that it is not just public money; we are also talking about private sector money coming alongside it. The hon. Gentleman will know that Hydrogen Strategy Now, a campaign group of more than 50 companies, has said that it is ready to invest £3 billion in hydrogen projects, and that was after the publication of the 10-point plan.
Peter Aldous (Waveney) (Con)
The Secretary of State for Business, Energy and Industrial Strategy (Alok Sharma)
Our 10-point plan for a green industrial revolution, which we set out last month, has an ambition to support 250,000 highly skilled green jobs across the UK by 2030. The plans we published yesterday in the energy White Paper will further position the UK as a global leader in the future energy industry, not least by supporting the development of jobs and green infrastructure in low-carbon energy such as hydrogen, carbon capture, usage and storage, and of course nuclear.
Peter Aldous
I am grateful to the Secretary of State for that answer. The scale of the opportunity for employment growth in low-carbon industries is immense. If the right approach is adopted, there can be enormous benefits to coastal communities such as Lowestoft and Waveney. How does the Secretary of State intend to transform the UK’s approach to energy skills in order to capitalise on these great opportunities?
Alok Sharma
Once again, a Conservative colleague talks about jobs, which is what the energy White Paper and the 10-point plan are all about. My hon. Friend is a tireless champion for offshore wind, and for jobs and growth, in supporting his constituency. He will know that we have set up the green jobs taskforce, which was launched in November and is led by the Minister for Business, Energy and Clean Growth, my right hon. Friend the Member for Spelthorne (Kwasi Kwarteng). The taskforce brings together businesses and trade unions to assess how our jobs and skills should adapt to allow us to build back greener, and how the Government can support people in transitioning industries.
James Daly (Bury North) (Con)
John Lamont (Berwickshire, Roxburgh and Selkirk) (Con)
The Secretary of State for Business, Energy and Industrial Strategy (Alok Sharma)
As conference of the parties president, I have held bilateral meetings with over 40 countries and spoken at around 50 international events over the past months. Throughout, I have called for world leaders to be as ambitious as possible with the climate action targets. The UK is showing real leadership in this area. On 4 December, we announced our new, ambitious nationally determined contribution and on 12 December, we co-hosted the Climate Ambition Summit, which saw 75 world leaders coming forward with 45 NDCs, 24 net zero commitments and 20 adaptation resilience plans.
John Lamont
The eyes of the world will be on Glasgow next year as the UK hosts the UN Climate Change Conference. This is a huge moment in our fight to stop climate change, so how will the UK Government engage with schools in Scotland and across the whole United Kingdom to promote this important event?
Alok Sharma
My hon. Friend is right: it is going to be a big moment for the UK in Glasgow next year and, of course, in the lead-up to it as well. I have been very encouraged and impressed by the commitment that young people are showing in tackling climate change. They have a vital part to play in ensuring that we deliver an inclusive and diverse COP26. In the run-up to the summit, we will be working closely with schools and young people, including by co-hosting the COP youth event, which will bring together 400 youth delegates from around the world to discuss a range of climate topics.
Matthew Pennycook (Greenwich and Woolwich) (Lab)
According to Climate Action Tracker, the national net zero pledges that have been put forward today could, if achieved across the board, limit global heating to around 2.1°, but in terms of actual policies, the world remains on course for catastrophic warming of over 3°. Given the gulf between what Governments, including this Government, have promised on climate action and what they are on course to achieve, does the Secretary of State agree that it is incumbent on the UK as COP26 host to demonstrate to the world that it actually has a plan to deliver net zero? If he does agree, will he assure the House that the Government will publish a comprehensive and fully costed net zero strategy well in advance of November next year?
Alok Sharma
The hon. Gentleman makes an important point. I said that at the climate ambition summit. Leaders from around the world have come forward with ambitions, but we absolutely need to go further. I agree with the hon. Gentleman, and I think there is consensus on it in the House. With regard to his question on a net zero strategy, of course we will publish one. I also just want to make the point that, when we were talking about clean energy and hydrogen earlier, I stated that the Hydrogen Strategy Now group made a commitment on the £3 billion after the 10-point plan, but in fact it came before that.
Jeff Smith (Manchester, Withington) (Lab)
The Secretary of State for Business, Energy and Industrial Strategy (Alok Sharma)
At this last Department for Business, Energy and Industrial Strategy oral questions of the year, I take this opportunity to thank my brilliant ministerial team, our brilliant Parliamentary Private Secretaries, our fabulous Whip and the outstanding civil servants for the huge effort they have made this year to support business and procure 357 million doses of the most promising vaccine candidates.
Since the previous oral questions last month, the Department has led on the Prime Minister’s 10-point plan, which is our blueprint for a green industrial revolution, and the energy White Paper. We have also been central in setting the UK’s ambitious nationally determined contribution, as well as helping to organise the climate ambition summit on 12 December. The pace and energy of delivery will continue in the new year, because our businesses and people across the United Kingdom deserve no less at this challenging time.
Jeff Smith
Rate relief for hospitality venues is welcome, but many are racking up huge rent debts while they are closed and getting only a third of the support they got earlier in the year. Have the Government had any discussions about a model of sharing the rental debt burden among tenants, landlords, banks and the Government, because without more help, many of these businesses will close?
Alok Sharma
The hon. Gentleman raises an important point, and of course we have dialogues with landlords and tenants. As he will have heard, the rent moratorium has been extended to 31 March, and he will also know that because the rates holiday continues, that is money that does not have to go out, which can be used for other purposes.
Cherilyn Mackrory (Truro and Falmouth) (Con)
Edward Miliband (Doncaster North) (Lab)
Businesses face a double whammy from the ongoing economic crisis and potential Brexit disruption. They want the Business Secretary to stand up for them. Some 61% of the country will be in tier 3 from tomorrow, and the situation for many pubs, restaurants and bars is catastrophic, as this morning’s record redundancy figures show. Will the Secretary of State now finally recognise what he has been told repeatedly by Members across the House—and again today—and by industry that support for the hospitality sector is hopelessly inadequate if many of these businesses are to survive through the winter?
Alok Sharma
I completely accept that it is a very difficult time for lots of businesses, particularly in the hospitality sector right now, but as the right hon. Gentleman will know, support is being provided. Businesses that are required to be closed can get grants of up to £3,000 a month. I also point him in the direction of the International Monetary Fund, which said that the support the UK Government are providing is
“one of the best examples of coordinated action globally”.
Edward Miliband
I am afraid that the Secretary of State is failing to stand up for the hospitality sector. Let us talk about the 150,000 businesses that, even with a trade deal, will have to fill in customs forms for the first time from 1 January. The ports are struggling, the IT systems are not ready, the customs agents are not in place, and businesses still do not know the rules that will exist in just 16 days’ time. Are these firms not entitled to conclude that they are being badly let down by a Government who have left them totally in the lurch and a Business Secretary who seems asleep at the wheel?
Alok Sharma
I will refrain from coming back on that jibe. As a Government, we have been working incredibly hard to support businesses. I know that it is very difficult. The right hon. Gentleman talks about the end of the transition period. Of course, there are a lot of changes that businesses can already put in place and, as he knows, we are communicating with businesses to ensure that that happens. I think that businesses do want us to continue talking to the European Union, and that is precisely what we are doing.
Nigel Mills (Amber Valley) (Con) [V]
Alok Sharma
As my hon. Friend knows, we are providing support. It is difficult for a lot of businesses right now. The furlough scheme has been extended until the end of March, and I know that my right hon. Friend the Secretary of State for Digital, Culture, Media and Sport is working closely with the sector, as is the Under-Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend the Member for Sutton and Cheam (Paul Scully).
Mohammad Yasin (Bedford) (Lab) [V]
Alok Sharma
We are in regular dialogue with Royal Mail and others. I am happy to take up the point that the hon. Gentleman raised separately, and I know that my hon. Friend the Member for Sutton and Cheam, who is responsible for Royal Mail, will be happy to follow up with him.
Mark Jenkinson (Workington) (Con)
Mr Speaker
It was a major achievement, and it shows the family of rugby league.
Alok Sharma
I congratulate the hon. Lady’s constituent, Kevin Sinfield. We have a good settlement in the spending review for R&D: we are committed to reaching £22 billion a year by 2024-25.
Robert Largan (High Peak) (Con)
David Linden (Glasgow East) (SNP)
Alok Sharma
I would just point out to the hon. Gentleman that, on support for businesses, what we have done is to look at the requirements and increase that support. As he will have heard, the level of support is now £280 billion. We have extended furlough and we have extended the self-employment scheme, and businesses that are now required to be closed because of restrictions can get up to £3,000 a month.
Dr Luke Evans (Bosworth) (Con)
Bill Esterson (Sefton Central) (Lab) [V]
Alok Sharma
As the hon. Gentleman knows, a whole range of support is available. I completely accept that not everyone will feel they have got precisely the amount of support that they would have liked, but a significant amount of support is available and, of course, all of this is always kept under review.
Dr Jamie Wallis (Bridgend) (Con)
Alok Sharma
My hon. Friend raises an important point, and my right hon. Friend the Health and Social Care Secretary is working very hard to help NHS trusts return to pre-covid levels of elective care as soon as possible. I have been really quite impressed over the past months throughout this pandemic at how businesses, both within the medical field and outside, have come together to support the NHS.
Paul Girvan (South Antrim) (DUP) [V]
Mary Robinson (Cheadle) (Con)
Alok Sharma
I assure my hon. Friend that the Government are committed to ensuring that whistleblowers enjoy high standards of protection under UK law. The international standard to which she refers is for employers wanting to introduce their own whistleblowing policies, which is already encouraged by our code of practice.
Nick Smith (Blaenau Gwent) (Lab)
The furlough scheme is really important for young workers—for young people—but when the scheme ends many are worried that we will see large-scale youth unemployment, so what is the Department’s input into the kickstart scheme and exactly how many jobs will be created by March next year to help young people?
Alok Sharma
As the hon. Gentleman knows, the kickstart scheme is a Government initiative, and the Treasury and the Department for Work and Pensions have led on this. I have had discussions with the Secretary of State for Work and Pensions on the issue, and of course we want to make sure we continue to support young people at this crucial time. We know that when unemployment is going up, it is new workers who find it particularly difficult to get jobs.
David Johnston (Wantage) (Con)
On Thursday, I had the pleasure of taking my hon. Friend the Member for Derby North (Amanda Solloway), the Minister for science, research and innovation, to Greencore’s Springfield Meadow development in my constituency, where it is building not just net-zero homes but carbon-positive homes and selling them to Sovereign Housing at precisely the same cost as for any other kind of home. Will my right hon. Friend join me in congratulating Greencore on this innovation and does he agree that it is exactly the sort of thing we need more of to hit our 2050 goal?
Jon Trickett (Hemsworth) (Lab)
After 10 years of this Government, before covid, constituents of mine were averaging £100 a week less in earnings than the average for the rest of the country; now a third of them are on furlough, which means a further £100 less per week—£10,000 a year less than the average. Will the Minister understand that when the Government talk about levelling up, in an area like mine people will say it is time that Ministers got out of their privileged bubbles and did something for communities all over this country, where millions of people are living very precarious lives?
Alok Sharma
I know it is a very difficult time for very many families, and that they will feel that particularly acutely as we get to Christmas. I would just say that across the country we have protected 9 million jobs—households up and down our country, who have been supported by the measures that the Government have put forward; and that that will extend until the end of March, as well as the other support that has been provided.
Given that we have now come to the end of questions, Mr Speaker, I thank you and your staff for all the support that you have provided to all Members in a very challenging year. I thank all Members—including the right hon. Member for Doncaster North (Edward Miliband)—for all their support, and I hope that they will have an opportunity to get some rest over the festive period.
Mr Speaker
May I just say thank you to the Secretary of State for completing the list? In order to allow the safe exit of hon. Members participating in this item of business and the safe arrival of those participating in the next, I am suspending the House for three minutes.
Energy White Paper
Lord Sharma Excerpts(3 years, 11 months ago)
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The Secretary of State for Business, Energy and Industrial Strategy (Alok Sharma)
Today the Government have published the energy White Paper which sets out the strategic vision for how we will transform our energy system to build a cleaner, greener future for our country, people and planet.
Building on the Prime Minister’s 10-point plan for a green industrial revolution, this White Paper provides further clarity on the practical actions that will shift our energy system from one reliant on fossil fuels to one that makes us a world leader in clean energy. We will do this in a way that creates jobs, as we build back greener from covid-19. And we will protect the most vulnerable in society by keeping bills affordable as we transition to net zero.
Consumers
We want to create a fair deal for consumers, protecting the vulnerable and fuel poor with support of £6.7 billion; increasing competition to drive better products and services, saving money on bills; and giving us warmer, more comfortable homes to live in.
The White Paper sets out a raft of measures to help households to save money on their bills. We will support the lowest paid through a package of measures that could save families in old inefficient homes up to £400. This includes extending the warm home discount scheme to 2026 to cover an extra 750,000 households and giving eligible households £150 off their electricity bills each winter. This is on top of the £2 billion green homes grant announced by the Chancellor, extended by a further year in the 10-point plan.
We will also keep bills affordable by making the energy retail market truly competitive. This will include offering people a simple method of switching to a cheaper energy tariff and testing automatically switching consumers to fairer deals to tackle “loyalty penalties”.
Putting consumers at the forefront of our approach means not just deploying measures that save energy, but making markets efficient, incentivising energy companies and consumers to choose clean energy, and making sure the rules that govern the market are swift to adapt to new technologies. We will make sure our energy system and networks are fit for the low-carbon transition by consulting on new strategic guidance for Ofgem, legislating for competition in onshore networks and delivering greater co-ordination of offshore networks. We will also encourage the development and uptake of innovative tariffs and products, and ensure customers have more transparent and accurate information on carbon content when they are choosing their energy services and products.
Creating jobs and growth
The energy White Paper comes at a vital time of rebuilding. It reinforces commitments made in the 10-point Plan to support a green recovery from covid-19 through investments in new infrastructure, and technology that will grow the economy, supporting many thousands of jobs and creating new business opportunities at home and abroad.
We estimate that measures in this White Paper could support up to 220,000 jobs in energy by 2030, many in clean industries such as carbon capture usage and storage, offshore wind and electric vehicles. Many of these jobs will be created in our industrial heartlands, supporting our promise to level up the whole country and leave no one behind.
Clean energy transformation
We will transform our energy system from one that is 80% based on fossil fuels today to one that is consistent with net zero. This will see us changing how we heat our homes and travel. It will lead to a doubling in how much electricity we use and the emergence of a new hydrogen economy.
The White Paper reaffirms our commitment to 40GW offshore wind, including 1GW floating wind, by 2030, and sets out £160 million of support for offshore wind integrated manufacturing hubs. This will support our world-leading offshore wind sector in delivering 60% UK content, and up to 60,000 jobs by 2030.
We have also committed to work with industry to aim for 5GW of hydrogen by 2030 which will unlock £4 billion in investment and support up to 8,000 jobs, and will develop low-carbon industrial clusters by 2030 by putting in place the framework required to mobilise investment.
Low-carbon electricity will be a key enabler of our transition to a net zero economy with demand expected to double due to transport and low-carbon heat. Our trajectory will see us have overwhelmingly decarbonised power in the 2030s, and fully decarbonised electricity generation by 2050.
New nuclear power
The White Paper is clear that nuclear power will continue to be an important and proven source of reliable clean electricity. With existing nuclear power plants due to cease generation by the end of the next decade, we need to take action to secure our future energy sources. Therefore, the Government are today confirming that we are entering negotiations with EDF, in relation to the Sizewell C project in Suffolk. EDF has proposed two reactors at the site, based on the design of Hinkley Point C, with a combined capacity of around 3.2 gigawatts of low-carbon electricity. By replicating Hinkley Point C, EDF believes it could be built more cheaply.
No decision has yet been taken to proceed, and the successful conclusion of these negotiations will of course be subject to full Government, regulatory and other approvals, including value for money. I will keep the House informed as we progress our discussions with EDF. And if we do reach a successful outcome, this would lead to tens of billions of pounds of investment into the UK and thousands of jobs during construction.
Today the Government are also publishing responses to the consultation on the regulated asset base (RAB) funding model, which involves an economic regulator granting a licence to a company to charge a regulated price to users of the infrastructure. The funding model is based on private investment and is used in many significant infrastructure projects. Such a model could help secure private investment and cost consumers less in the long run. Following the consultation, the Government will continue to explore a range of financing options with developers, including the RAB model. In particular, we will also continue to consider the potential role of Government finance during construction, provided there is clear value for money for consumers and taxpayers.
UK emissions trading scheme
To support businesses to decarbonise, the Government are today confirming a new and ambitious UK emissions trading scheme (UK ETS) will be in place from 1 January 2021. This new UK carbon market will be the foundation on which the UK achieves net zero emissions cost-effectively.
The scheme has been designed by the UK Government jointly with the Scottish Government, Welsh Government and Northern Ireland Executive and is a crucial step towards net zero, and will bring benefits for business, trade, and innovation.
The UK ETS will replace the UK’s participation in the EU emissions trading system (EU ETS) and will be a market-based measure which will provide continuity for participants. The UK ETS will initially apply to power stations, energy-intensive industries, and aviation.
Our UK ETS is more ambitious than the EU system it replaces—from day one the cap on emissions allowed within the scheme will be reduced by 5%, and we will consult in due course on aligning it with net zero.
The UK ETS will also allow us to expand carbon pricing across the economy and encourage innovation in emerging decarbonisation technologies. We have committed to exploring expanding the UK ETS to the two thirds of uncovered emissions, and will set out our aspirations to continue to lead the world on carbon pricing in the run-up to COP26. This will also include how the UK ETS could incentivise the deployment of greenhouse gas removal technologies. In addition to this, the UK is open to linking the UK ETS internationally in principle and we are considering a range of options, but no decision on our preferred linking partners has yet been made.
As we move out of the shadow of coronavirus, this energy White Paper opens the door to exciting new opportunities for our country, creating new jobs as we build the economy of tomorrow. Taking action now ensures the UK is set on the path to ending its contribution to climate change while enabling UK industry to seize new opportunities.
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Energy White Paper
Lord Sharma Excerpts(3 years, 11 months ago)
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The Secretary of State for Business, Energy and Industrial Strategy (Alok Sharma)
With permission, Madam Deputy Speaker, today we have published the energy White Paper setting out how we will power our net zero future. This document is a labour of love, and I pay particular tribute to the Minister for Business, Energy and Clean Growth, my right hon. Friend the Member for Spelthorne (Kwasi Kwarteng), who has done an enormous amount of work in putting it together; he has been working on it since last year. I also thank previous Ministers who have worked on this; of course, we are now delivering it.
The White Paper sets out immediate steps to achieve our climate ambitions, to deliver on the Prime Minister’s 10-point plan, to create jobs and, of course, to protect the most vulnerable in society by keeping bills affordable as we transition to net zero. It also allows us not only to build back better from covid-19 but to build back greener.
We make this transition with consumers at the heart of it, because I understand, as I think we all do in this House, how difficult things are as we recover from covid; for many people, every penny does indeed count. That is why the White Paper sets out at least £6.7 billion of support over the next six years for vulnerable and fuel-poor households. That includes the green homes grant, which could see lower-income households save up to £600 a year on their energy bills, and it includes extending the warm home discount scheme to 2026 to cover 750,000 extra households, giving those eligible at least £140 off their electricity bills each winter.
We will also tackle “loyalty penalties” once and for all by offering simpler methods of switching, including automatic switching. We will consult on rolling out opt-in switching, where consumers are offered cheaper tariffs and invited to take them up. That follows successful Ofgem trials. We will also consult on opt-out switching, which would automatically move consumers to cheaper tariffs unless they told us they did not want that to happen.
We have set out a vision of the future for us all—a future where smart appliances charge at the cheapest price, where one can sell electricity from one’s car back into the grid, and where hydrogen heats homes. We will go further, to ensure that the energy system works for consumers. We will introduce competition in the building and operation of onshore networks to drive down costs and increase investment and innovation, all ultimately benefiting consumers.
We will also minimise the grid connections to our offshore wind farms, which I know is important for many colleagues here, including off the coast of East Anglia, to protect our beautiful coastal landscapes and save consumers up to £6 billion by 2050. We will use data to search for cheaper and more innovative ways to power our homes, transport and businesses by publishing the UK’s first energy data strategy in the spring. This will all help to create a fair deal for consumers and protect the fuel poor, and it will give us warmer, more comfortable homes as we transition to net zero.
This White Paper comes at a vital time for rebuilding our businesses. It reinforces commitments made in the 10-point plan to deliver a green recovery. Our plans in the White Paper could support up to 220,000 jobs by 2030 in clean industries such as carbon capture, usage and storage, offshore wind, and electric vehicles. Indeed, many of the jobs created will be in our industrial heartlands, supporting our promise to level up the whole country and leave no one behind. Now is the time to seize these opportunities.
Clean energy is at the heart of our transformation from a fossil fuel-based energy system to one that will deliver net zero. Low-carbon electricity will be a key enabler for net zero as we change the way we travel and heat our homes. That is why we have reaffirmed our manifesto commitment to 40 GW of offshore wind, including 1 GW of floating wind, by 2030, which will support up to 60,000 jobs by 2030; it is why we have committed to work with industry in aiming for 5 GW of hydrogen by 2030, which will unlock £4 billion in investment and support up to 8,000 jobs; and it is why we are supporting the deployment of power with CCUS by 2030, putting in place the framework required to mobilise investment.
Of course, nuclear power continues to be an important source of clean, reliable and safe energy that, as part of our net zero mix, will help to result in lower costs to consumers. But with the existing nuclear fleet largely retiring over the next decade, we need further new capacity, so I have confirmed today that we aim to bring at least one large-scale nuclear project to the point of final investment decision by the end of this Parliament, and the Government will enter negotiations with EDF in relation to the Sizewell C project in Suffolk. These commitments will be subject to full Government, regulatory and other approvals, including of course, very importantly, value for money. The Government will negotiate this in the best interests of the British people, ensuring low-cost, secure and clean energy over the lifetime of the project.
Today, we are also publishing responses to the consultation on the regulated asset base funding model used in many significant infrastructure projects. Such a model could help to secure private investment and drive down costs for consumers in the long run. We will continue to explore a range of options, including the potential role of Government finance during construction, provided that there is clear value for money for consumers and taxpayers.
I have also been impressed by the response of businesses to our calls to decarbonise. To support them in this endeavour, I am today confirming a new and ambitious UK emissions trading scheme, which will be in place from 1 January 2021. This new UK carbon market will be the foundation on which UK businesses achieve net zero emissions. It is also more ambitious than the EU system it replaces. From day one, the cap on emissions allowed will be reduced by 5%, and we will consult in due course on how to align it with net zero. We have also committed to explore expanding the scheme to further sectors, and will continue to progress our aspirations to lead the world on carbon pricing in the run-up to COP26 next year.
In conclusion, this White Paper sets out a historic suite of measures to deliver our net zero ambitions. Fuelling the drive to 2050, as we move out of the shadow of coronavirus, these measures open the door to exciting new opportunities for our country. Taking action now ensures the UK is set on the path to ending its contribution to climate change, while giving UK industry new opportunities and creating jobs as we build the economy of tomorrow. I commend this statement to the House.
Edward Miliband (Doncaster North) (Lab)
Can I thank the Secretary of State for his statement? This White Paper has been promised year after year, so there have been high expectations for it, and I know I should say that the Secretary of State and his Minister are deeply committed to the fight against the climate crisis, but the test of this White Paper is not just good intentions, but whether it is a plan at the scale of ambition we need to create the jobs we need and deliver the fairness we need. While there are certainly elements in the White Paper we welcome, I fear that too often the sound we hear when we read its pages is of the can being kicked down the road.
First, on ambition, we would like to go further and faster than Government targets, but the very least they must be doing is meeting, with policies, the target for 2030 they have set and the recent proposal by the Committee on Climate Change for a 78% reduction in emissions by 2035. The CCC is clear that, as part of its plan, we need to deliver zero-carbon electricity by that date—2035—but my understanding from the White Paper is that it appears simply to have an ambition of 2050 for zero-emissions electricity. Can the Secretary of State explain what appears to be lesser ambition?
On onshore wind, tidal and solar, it is concerning that the White Paper has little to say. There is only one mention, for example, of tidal in the whole document. Can the Secretary of State explain why and what he is going to do to remove the remaining barriers there are to onshore wind?
On new nuclear, we too believe that it can play a part in the energy mix, but the Government appear not to have come to a view after years of consultation, frankly, about how to pay for it, so can the Secretary of State expand on what is his preferred method of financing? Beyond nuclear, there appears to be more, I am afraid, kicking into touch. On hydrogen, France has committed £8 billion, Germany £6 billion and the UK £240 million, and all we are promised is a strategy next year. Is the Secretary of State not worried that we are going to be left behind?
Secondly, let me turn to the theme of job creation. We would like further ambition from the Government on a green recovery. While other countries are investing tens of billions in a green stimulus to create jobs now, we are investing a fraction of this amount. The Secretary of State must recognise that he is way off his 60% target of domestic manufacture of offshore wind turbines. There is a widespread view that the £160 million investment in ports, while welcome, is a drop in the ocean compared with the scale of need if we are to meet his target. Can he tell us what assessment he has made on this issue?
Crucial to jobs is also a just transition for any workers in industries that will lose out. Does the Secretary of State recognise that there needs to be a proper plan for those in fossil fuel industries, including through using their skills in renewable sectors? Can he explain why there is not such a plan already, and will he work with trade unions and others to develop such a vital plan with urgency?
Thirdly, let me turn to the issue of fairness for consumers. I am glad to see the Government trying to build on the energy price cap—once said to be part of a Marxist universe, now part of the mainstream policy of a Conservative Government. But the biggest issue here, as the Secretary of State knows, is the massive job that we have to do in changing the way in which we heat our homes. I fear that the White Paper falls very short on fairness and delivery. Years ago, the Government abolished the zero-carbon homes standard due to come in in 2016, and we still have no date or plan for new homes to be built to zero-carbon. Why not? This is a false economy.
For existing homes, the Government have known for years about the challenge of insulation and conversion of the way they are heated, but, frankly, we still have one-off announcements of resources with no proper plan. They are actually cutting the green homes grant from this year to next. For homes owned by private landlords, the targets are still too weak and too far off; and they hardly scratch the surface when it comes to social housing. All this is on top of the fact that it is still being paid for through bills. These are very difficult issues, but does the Secretary of State recognise that the only answer to meet the transition and fairness is a proper long-term, street-by-street, house-by-house plan? When will that be published?
That brings me to my final point: markets have a role in this transition, but the Government must have a guiding hand. Whether it is a plan to decarbonise our homes, the future of the network infrastructure or the planned energy mix, the Government must match their intentions by playing their proper role to deliver in a way that is fair, creates jobs and shows the requisite ambition. If the Government do that, we will support them; but, on the basis of today’s effort, they still have a long way to go.
Alok Sharma
I thank the right hon. Gentleman for his comments. Let me just say to him: we are all revolutionaries now. We believe in the green industrial revolution, as he does himself. I note the points that he has made, but I will tell him what some in the energy sector have been saying about the White Paper. The chief executive of Energy UK has said:
“Today’s White Paper reveals the scale and opportunity of the energy transition”.
The chief economist of the CBI has said:
“The Energy White Paper is an important next step in our plans to reach our net-zero emissions target…Business stands ready to deliver the investment and innovation needed to turn ambition into reality”.
The chief executive of RenewableUK said:
“Today’s white paper provides greater clarity to the companies investing across the UK to deliver our net zero emissions target.”
The acting chief executive of Citizens’ Advice said:
“There’s a lot to welcome in today’s announcement.”
I could go on. [Hon. Members: “Go on!”] No; I know that other colleagues want to ask questions.
This Government have shown a great deal of ambition when it comes to the green industrial revolution. The right hon. Gentleman has seen the road map that is being laid out. We have, of course, had the Prime Minister’s 10-point plan with the £12 billion investment, leveraging in three times as much from the private sector, creating and supporting 250,000 jobs by 2030; he has seen the nationally determined contribution that was published, which was universally welcomed; and he will now have seen that the energy White Paper has been published, building on the 10-point plan. He talked about the fact that this White Paper has now appeared. When I spoke about this last week with the Chair of the Select Committee and said that I would get it out by Christmas, he asked me, “Which Christmas?”. I was keen to point out that it was Christmas this year.
Let me address some of the points that the right hon. Gentleman has raised. First, he talked about the CCC, which has made a recommendation regarding the NDC of a reduction of at least 68%. We have adopted that recommendation, and that puts us on the pathway to net zero by 2050. The right hon. Gentleman also talked about tidal. He will know that we have had a call for evidence on that subject. There will be an opportunity through the contracts for difference auction process next year to bring forward projects in that area. On offshore wind, let me be clear that we are talking about the 60% UK supply chain. He will know that in the last few days we have launched the ports infrastructure competition, which will be an opportunity for ports to bid for Government funding. This will ultimately allow us to build products relating to offshore wind in the UK and to create jobs in our country.
The right hon. Gentleman talked about financing for nuclear. As I said, we are at the start of that process of discussions with EDF, the developer at Sizewell C. There is a whole range of financing models that we need to work our way through. On hydrogen, he will know that the Minister for Business, Energy and Clean Growth, my right hon. Friend the Member for Spelthorne (Kwasi Kwarteng), has been doing a brilliant job, working with the sector and academics. He leads the Hydrogen Council. I will be setting out our strategy at the start of next year and, of course, it is also about unlocking private sector investment.
The shadow Secretary of State talks about fairness for consumers. I am pleased that he welcomes that, and, as he will have seen, the acting chief executive of Citizens Advice has also welcomed the White Paper. In conclusion, of course we need to go further, but the Government are putting their best foot forward in delivering on a green industrial revolution.
Greg Clark (Tunbridge Wells) (Con)
Without wishing to disinter policies buried under the “Ed Stone”, the policy of the right hon. Member for Doncaster North (Edward Miliband) was a price freeze rather than a price cap, which would have led to higher bills for consumers as prices fell.
I welcome the White Paper that the Secretary of State has published today. Does he agree that we are on the verge of a real transformation in technology, in which energy can go from something that was expensive, dirty and needed to be suppressed and eked out to something that can be clean, cheap and abundant? To drive that revolution forward, will he make sure that he invests in energy research and technology and that he changes regulation, so that the incumbents cannot frustrate the roll-out of those technologies nor deny to consumers the benefits that they bring about?
Alok Sharma
Of course, my right hon. Friend led on all this work when he was Secretary of State in the Department and I thank him for that. The White Paper is a product of some of the excellent reforms that he undertook in Government, including the energy price cap. I agree with him: of course we want to invest in energy research. He will have seen the settlement that we got at the spending review. We will power ahead in research and development and be a leading country when it comes to R&D.
Alan Brown (Kilmarnock and Loudoun) (SNP)
I thank the Secretary of State for advance sight of his statement. Clearly, we welcome any sensible proposals for the transition to net zero and value for consumers, and we will support policies accordingly. The White Paper is a year and a half late. Much of it is wishlists and it still has the same outdated nuclear obsession. For existing nuclear waste, there is a £132 billion bill. For Hinkley Point, it is £20 billion. To add to that £150 billion, we have Sizewell C, which is £20 billion, and Bradwell to follow, which is £20 billion. Despite market failure, the Government have not given up on Wylfa, Oldbury and Moorside, so that is potentially another £50 billion. Small modular reactors, advanced reactors and nuclear fission mean further blank cheques. We cannot be serious about energy bills and value for money when it all comes to 35-year nuclear contracts. Compare that with the commitment in the White Paper of just £50 million to upgrade properties to EPC band C.
What cost-benefit analysis has been done on the cost of nuclear jobs versus renewables? What is the Secretary of State doing about a route to market for pumped hydro? In Scotland, the Cruachan extension and the proposed Coire Glas scheme could be undertaken if the Government showed the same commitment to pumped hydro as they have nuclear. Can he confirm the route to market for tidal and wave energies, which he touched on earlier, and a contract for difference for hydrogen production? These processes, along with carbon capture and storage, are the chance to be world-leading and create green jobs, if they get a move on.
How will the Secretary of State ensure transparency for CCS site selections? Surely Peterhead, with its hydrogen proposals and existing carbon dioxide storage licence, has to be first in the batch. Can he confirm that it is under consideration, because it is not showing in the map in the White Paper? Sadly today, BiFab went into administration, with its yard in Tayside closing, which is proof of the failure to date of the CfD procurement process. Will the Secretary of State apologise for that and make sure that, following the consultation on procurement, this is remedied for the next auction process and that we get these jobs delivered in the UK?
There is so much in the White Paper—the future homes standard, the hydrogen strategy, heating buildings, decarbonisation, heat pump delivery—that is going to be consulted on from next year onwards. How can the Secretary of State make sure that these all come together and are delivered in time for the interim target of 2030? Finally, I welcome confirmation of the emissions trading system agreed with the devolved nations, and will he confirm that the carbon emissions tax alternative is now dead in the water?
Alok Sharma
I am delighted that the hon. Gentleman welcomes the UK ETS scheme that is being launched, but I will take it from his comments that he is not a fan of nuclear power. Perhaps I could explain to him that, of course, renewables are playing an increasingly large part in our energy mix, but the wind does not always blow as hard as we would like and the sun does not always shine. We know that nuclear power is reliable, safe and not intermittent; that is why it needs to be a part of the energy mix. He will know that a significant number of power plants will be coming offline and that is why we are proceeding with our discussions on Sizewell C.
The hon. Gentleman talked about tidal wave and tidal power. As I said in my response to the right hon. Member for Doncaster North (Edward Miliband), there will be an opportunity, through the CFD 4 process, to come forward with projects on that.
Finally, the hon. Gentleman talked about CCUS. What I can tell him is that at this point we have not made any decisions about the sites of CCUS plants, but we will provide much more detail on this in early 2021. Those who are interested, including folks from his constituency, will then be able to take a look at what we set out.
Sir William Cash (Stone) (Con)
As my right hon. Friend knows, the EU negotiations on state aid go far beyond the question of mere subsidies and include tax incentives and the like. Will my right hon. Friend assure the House that nothing in any treaty text or any subsequent Act of Parliament will prevent the United Kingdom from having its own sovereign state aid rules, including those on energy, so that we are not subjugated to EU state aid rules or to the European Court of Justice, given that the EU intends to impose and enforce its rules against us, which would be by a majority vote in the Council of Ministers behind closed doors without us at the table after 31 December?
Alok Sharma
I thank my hon. Friend for that question. If I may, I refer him to the written ministerial statement I laid in the House some weeks ago, in which I said that from 1 January 2021 the Government will follow the World Trade Organisation rules for subsidy control and any related commitments the Government have agreed in free trade agreements. We also intend to publish a consultation in the coming months on whether we should go further than our WTO and international commitments. That will include consulting on whether any further legislation should be put in place.
Darren Jones (Bristol North West) (Lab)
I thank the Secretary of State for advance sight of the statement, and congratulate him and his team on the publication of this long-awaited but comprehensive White Paper. He will know that the Business, Energy and Industrial Strategy Committee will be looking at it in the round in the new year, including in our inquiry on decarbonising heat, but may I ask him one question today about gaps between the sixth carbon budget and the energy White Paper? To give one example, the sixth carbon budget from the Committee on Climate Change requested that all new boilers should be hydrogen-ready by 2025 at the latest, and that to meet all our hydrogen requirements we would need to generate 90 TWh by 2035. In the energy White Paper, however, the commitment to boilers is for the mid-2030s and only 42 TWh of power from hydrogen by 2030, a gap of some 48 TWh. Will he acknowledge that gap between the energy White Paper and the sixth carbon budget, and perhaps tell the House whether there will be further announcements in the new year to bridge that gap?
Alok Sharma
I thank the hon. Gentleman for that question. Seeing what the CCC has said, we will of course be responding on CB6 next year. That and the 10-point plan take us forward towards fulfilling CB4 and CB5, but we will set out more details in due course on how we get to those budgets. We will also be setting out, between now and COP26, a net-zero strategy for the country.
Bim Afolami (Hitchin and Harpenden) (Con)
I welcome the Secretary of State’s support for nuclear and the discussions on Sizewell C. Is the eventual financing model entirely contingent upon the 30% reduction in the build cost for nuclear that is set out in the White Paper? To what extent does he see Government investing in nuclear over the medium to long term as a first resort, or should the first resort be investment from the private sector, with Government investment a last resort?
Alok Sharma
My hon. Friend makes an important point about funding models. Of course, Sizewell C will be second of a kind in terms of projects. I think there is likely to be an appetite from the private sector to invest in that, but we are at the start of the discussion with EDF to explore financing options. It could involve the regulated asset base model. As I said in my statement, we will look at the part that the Government or consumers could play in the financing, but at the heart of any decision will be ensuring that we are delivering value for money for British taxpayers and British consumers.
Christian Matheson (City of Chester) (Lab)
The section of the White Paper that I shall be reading is the one on hydrogen. The Secretary of State and the Minister for Business, Energy and Clean Growth will know that in my area—the Mersey and Dee area—there is a strong proposition on hydrogen via HyNet. May I urge the Secretary of State to resist the temptation to put all his eggs in one basket? If we are to move forward as a nation, we need to spread around the expertise and not play one region off against another when considering the destination of the investment in hydrogen.
Alok Sharma
The hon. Gentleman makes an important point. As part of the 10-point plan and the White Paper, we have talked about how we can level up across the country. I know that my hon. Friend the Minister for Business, Energy and Clean Growth will be happy to have further discussions with him. As I said, he has been working incredibly hard on the hydrogen strategy, and we are happy to hear from all colleagues.
Rebecca Long Bailey (Salford and Eccles) (Lab) [V]
The European Commission is mobilising €1 trillion, and President-elect Biden will mobilise $2 trillion, but the UK saw only £12 billion for its green industrial revolution. Issuing yet more consultations, scant detail, repackaged announcements and bluster today about unleashing competition is simply not enough to tackle the climate emergency and fuel poverty. With the energy White Paper still leaving a huge gap of 101 million tonnes between meeting our 2032 carbon target, what is the Secretary of State going to do to close that gap?
Alok Sharma
As the hon. Lady talks about what is happening in the US, I should point her to the very supportive comments that former Vice-President Al Gore made over the weekend about the work that the UK is doing. It is not just about public money. She is fixated with the idea that it is just taxpayers who fund this stuff. The whole point is to ensure that we have revenue models and mechanisms whereby the private sector can invest. If she wants to see how this is done, she should look at the offshore wind sector, which was nascent a few years ago. We have introduced the contracts for difference process. We now have the biggest offshore wind sector in the world. That is how to do it: public and private sector working together.
Sir Edward Leigh (Gainsborough) (Con)
Will my right hon. Friend spare a thought for rural Britain? Policies that may work for, say, London, which is 600 square miles and has 73 MPs, are a lot more difficult to implement in Gainsborough, which is nearly 500 square miles and has only one MP—albeit a very good one, I have to say. Our rural lines were stripped away by Dr Beeching. If I want to take a bus to the nearest town, it takes an hour, going around about 10 villages, and if I want to walk, it is a four-hour round trip, so we rely on the internal combustion engine. Frankly, an electric charging point in West Lindsey is about as rare as an oasis in a desert. Can we have some practical policies to help rural Britain?
Alok Sharma
I am sure my right hon. Friend’s constituents will agree with him that he is an outstanding Member of Parliament for Gainsborough. I agree with him—we are not trying to get people to stop using cars. We are saying that we want to move to zero-emission vehicles. That is why, in the 10-point plan that was published, we have put forward many hundreds of millions of pounds to support electric vehicle manufacturing and £1.3 billion for charging points across the country. We need to continue to work to ensure that we have EV manufacturing in the UK, and of course, the costs of that will come down as we have economies of scale.
Jonathan Edwards (Carmarthen East and Dinefwr) (Ind)
To accompany the White Paper, the British Government have confirmed that they are willing to take a direct equity stake in the proposed £20 billion Sizewell C nuclear plant. Why is similar direct public funding not being made available to other energy technologies, such as the Swansea Bay tidal lagoon, instead of the very costly contracts for difference model?
Alok Sharma
May I respectfully suggest to the hon. Gentleman that he looks at what we have actually said about nuclear? What we have said is that we are starting a discussion with the developer, EDF. We have not set out a financing model. As I have said, the point at which a decision is made on whether we move to a final investment decision in this Parliament will be on the basis that any financing model delivers value for money for the British taxpayer and, indeed, for consumers.
Stephen Crabb (Preseli Pembrokeshire) (Con)
My right hon. Friend has made an important statement today, but he will be sensitive to the fact that there are constituencies such as mine in Pembrokeshire that have been heavily reliant on the oil and gas industries for the past 50 years and are particularly vulnerable to these big strategic changes in energy policy? Does he agree that, with the right level of Government support which will unlock private sector investment, we can see a new generation of quality jobs and apprenticeships in offshore wind and marine renewables, such as wave and tidal? Will he pledge to ensure that the Government provide that support, so that constituencies such as mine are not left behind?
Alok Sharma
My right hon. Friend is, I know, a great champion for renewables, and, indeed, for his own constituency, and he will know that I very much agree with him. Marine renewables is a technology that very much excites me. He will have seen that we recently held a call for evidence on the potential of marine energy projects, and that we have also announced the ambition of 1 GW of floating wind by 2030, supported by CFDs and innovative funding. I suggest that if there are particular projects that he thinks are viable in his constituency, he should point them in the direction of the CFD auction process when it takes place next year.
Richard Thomson (Gordon) (SNP)
It is absolutely crucial that we achieve transition to net zero, and that that transition is just. There can be no just transition to net zero without the skills and expertise in human capital in the North sea oil and gas industry. An essential component of that will be securing a sector deal between Government and the industry. Can the Secretary of State tell us when he expects to be able to announce the successful conclusion of sector deal negotiations with the industry?
Alok Sharma
The Minister for Business, Energy and Clean Growth and I have a regular dialogue with the sector and, of course, I am fully aware of the importance of oil and gas as an employer in Scotland and, indeed, across the whole of the UK. I can tell the hon. Gentleman that, in November, we received a formal proposal from industry for a deal, and we will now move into negotiations with the sector. On timing, we aim to complete the negotiations and publish that in Q1 next year.
Alun Cairns (Vale of Glamorgan) (Con) [V]
I congratulate my right hon. Friend and his ministerial team on today’s significant statement. I warmly welcome the commitment shown towards nuclear energy and the open mind that he shows towards the financing model. Does he recognise the challenges that the regulated asset base will give to assessing the risk at the early stage of a traditional build of nuclear power stations? Will he also show the same enthusiasm for small modular reactors that provide an exciting opportunity to parts of the UK that are looking for significant investment and the job-creating opportunities that small modular and advanced modular reactors can bring?
Alok Sharma
I very much support the idea that we should be advancing on SMRs and AMRs, and my right hon. Friend knows that there is a £385 million advanced nuclear fund to support the development of SMRs. He will also know that we will be supporting a consortium led by Rolls-Royce on that. He is right that that offers not only an opportunity for us to create jobs, but export opportunities for our country in the future.
Wendy Chamberlain (North East Fife) (LD)
Given that the typical training period to become qualified in heat pump installation is 48 months, will the Secretary of State clarify what steps are being taken to ensure that we have enough qualified people to meet the demand for heat pumps following the extension of the green homes grant outlined in the White Paper and, in the longer term, to meet our net zero targets?
Alok Sharma
The Minister for Business, Energy and Clean Growth leads the recently launched green jobs taskforce. As the hon. Lady will know, one can take advantage of a whole range of measures as part of the green homes grant. Of course, the Department is working very hard to ensure that the vouchers are issued and that more and more installers come on to the system.
Mr David Jones (Clwyd West) (Con)
The White Paper makes it clear that the Government will consider the role of tidal power as part of the clean energy mix. My right hon. Friend will be aware of proposals for a tidal lagoon off the north Wales coast, with a potential installed capacity of 2.5 GW. By any standard, that is a major generating station and one that could make a huge contribution to the nation’s energy needs. The proposal has considerable local support, so will my right hon. Friend or his colleague the Minister of State meet me and my hon. Friends the Members for Aberconwy (Robin Millar) and for Vale of Clwyd (Dr Davies) to consider what can be done to take it further?
Alok Sharma
Yes, of course. If there are interesting projects out there we want to know. I do not know whether this is one of the projects that came forward in the call for evidence, but of course the Minister for Business, Energy and Clean Growth or I would be happy to meet my right hon. Friend and the business involved.
Caroline Lucas (Brighton, Pavilion) (Green) [V]
With nuclear power both eye-wateringly expensive and painfully slow in the face of the climate emergency, it is disappointing that there is not more ambition on renewables and efficiency instead. Will the Secretary of State confirm that, far from saving consumers money, the regulated asset base funding model essentially means that consumers pay twice: first to reduce the cost of borrowing by increasing bills before the plant is operating, forcing liability for construction delays on to customers, and secondly for extremely costly power once the plant starts operating? Will he immediately publish the modelling that allows him to mysteriously claim that this will drive down costs for consumers?
Alok Sharma
First, I was on a call with the hon. Lady recently and she acknowledged—through gritted teeth, I think—that she was quite pleased with the UK’s NDC commitment of at least 68%, so I thank her for that. On nuclear, of course we will look at a range of financing models. I explained earlier why nuclear is so important as part of the energy mix—it is a non-intermittent supply—but of course the whole point of the regulated asset base model is that, ultimately, it should result in cheaper prices for consumers.
Damian Hinds (East Hampshire) (Con)
Of course renewables are preferable, but as the Secretary of State has just set out, for quite some way into the future we will need non-intermittent or dialable energy sources as well. The ultimate game-changer might be battery technology, which could change that balance. Will he say a little about what the Government are doing to support research and development on batteries?
Alok Sharma
My right hon. Friend raises an incredibly important point about batteries. We are putting investment into gigafactories and batteries for electric vehicles. Importantly, we will also be looking into energy storage technology, such as hydrogen batteries. The amount of storage we need will depend, ultimately, on the energy mix, but he raises a very important point, and of course developing battery storage will be vital.
Liz Saville Roberts (Dwyfor Meirionnydd) (PC)
Diolch yn fawr, Madam Dirprwy Lefarydd. The White Paper mentions small modular reactors. When will the Secretary of State be in a position to update the House regarding the process for locating SMRs, bearing in mind that the Welsh Government are establishing a development company, Cwmni Egino, for the former nuclear site at Trawsfynydd?
Alok Sharma
Obviously, SMRs in the UK are currently at the design phase, and the consortium led by Rolls-Royce is making progress. We think there is the potential for SMR technology to be operational by the early 2030s, so we are still some way away from that. I am sure that, over the coming period, I or the Minister for Business, Energy and Clean Growth will be able to come to the House and give more information about that.
Mike Wood (Dudley South) (Con) [V]
Firms such as Westfield in my constituency of Dudley South stand ready to drive green growth in the transport sector, but to really unlock that they need charging points with grid-to-vehicle technologies and type approval for new clean electric passenger pods. Will my right hon. Friend work with his colleague the Transport Secretary to ensure that the infrastructure and type approvals are available so that those businesses can drive the green energy revolution?
Alok Sharma
My hon. Friend is a champion of the green energy revolution, and he mentioned Westfield. After the publication of the 10-point plan, the Transport Secretary and I did a roundtable with auto manufacturers, which were extremely enthusiastic about the support that we are providing for electric vehicle manufacturing. I mentioned previously the £1.3 billion to support the continued roll-out of charge points at UK homes and businesses and on streets over the next few years. That will be absolutely vital in ensuring that we are delivering a change and see more zero-emission vehicles on the road.
Emma Hardy (Kingston upon Hull West and Hessle) (Lab)
I welcome the transition to net zero. The Secretary of State may be aware that the Zero Carbon Humber project offers a world-first opportunity to decarbonise our region, promote local industry, attract investment and create jobs. When the Secretary of State is making decisions about which projects are successful for the Department’s industrial strategy challenge fund, will he take into account not just our green credentials but the impact of covid on our local economy and the need for job creation?
Alok Sharma
I commend the hon. Lady for speaking up on behalf of her constituency and for potential CCUS projects there. As I said in response to a previous question, we will provide more details on all that in early 2021, and at that point I will of course be very happy to have a further discussion.
Virginia Crosbie (Ynys Môn) (Con)
I congratulate the Secretary of State on the publication of an excellent energy White Paper, in which the word “nuclear” is mentioned about 80 times, and the stated ambition to make a financial investment decision on at least one large-scale nuclear project by the end of this Parliament. Apart from writing to Santa, what more does he suggest I do to ensure that my constituents on Ynys Môn have some good news regarding Wylfa Newydd this Christmas?
Alok Sharma
My hon. Friend is a great champion of Ynys Môn, and I know she is doing her bit to speak up on behalf of her constituents. We will of course consider any new projects that come forward with any viable companies and investors that wish to develop sites in Wales or elsewhere. She should direct them to my Department.
Matt Western (Warwick and Leamington) (Lab)
The Secretary of State will be well aware that a shockingly high proportion of households are living in energy poverty across the UK. In my constituency of Warwick and Leamington, 8.9% of households are in energy poverty. I have heard about the green homes grant and how it has not really succeeded since it was introduced. What are the Secretary of State’s plans to ensure that those living in social rented properties will be able to have that addressed, and that local authorities and housing associations get the funding they need to implement that?
Alok Sharma
As the hon. Gentleman knows, the £3 billion funding that the Chancellor announced some months ago includes funding for social housing. We are making progress with the green homes grant. Thousands of vouchers have been issued, and the Department is doing its bit daily to ensure that we issue more vouchers to those who have applied and have more installers coming on to the system.
Dr James Davies (Vale of Clwyd) (Con)
The north Wales Mersey Dee region has the potential to be at the centre of a green industrial revolution, from Wylfa Newydd and offshore wind to a gigafactory, hydrogen production and carbon capture, but there is also great interest in harnessing tidal energy, as my right hon. Friend the Member for Clwyd West (Mr Jones) said, so will the Secretary of State take this on board? Will he also acknowledge the coastal protection benefits that a tidal lagoon could bring?
Alok Sharma
It is clear that there is huge support on this side of the House for marine energy projects, and as I have said, we want to look at any projects that come forward that can be supported by the contracts for difference auction process during next year and by any innovation funding that is available.
Sammy Wilson (East Antrim) (DUP)
The Minister has described this as a labour of love, but it is more like a policy that Labour does love, with its price controls, subsidies, directing investment, telling firms what kind of cars they can produce and telling consumers what kind of cars they can buy, all at an eye-watering cost. According to his own Department, reducing CO2 emissions by 68% will cost between £50 billion and £100 billion a year. What effect will this have on the energy prices that consumers pay, on fuel poverty and on business competitiveness? Is it not a fact that this time last year people voted blue, they are now getting green, and this policy will put them in the red?
Alok Sharma
If the right hon. Gentleman looks at our manifesto, he will understand that, yes, people voted blue but they voted blue for green policies as well, and that is what we are implementing. On the issue of cost, he will know that over the last 30 years, successive Governments have managed to grow this country’s economy by 75% and cut emissions by 43% at the same time, so green growth is possible. He talks about the car sector, but I can tell him that the auto manufacturing sector was incredibly pleased with what we set out in the 10-point plan. The real issue is to ensure that we have revenue models in place so that private sector investors can come in on projects with confidence.
Dr Ben Spencer (Runnymede and Weybridge) (Con)
I welcome the energy White Paper, which charts an ambitious and, importantly, sustainable path to sustainability. I would like to raise a point about Jet Zero and the aviation sector, which is very important to my constituents. Does my right hon. Friend agree that, looking beyond the pandemic, sustainability will be a huge challenge to the aviation sector and that the world-leading work being done on Jet Zero by this Government will help to secure the future of aviation and support jobs and businesses in Runnymede and Weybridge?
Alok Sharma
My hon. Friend is so right. We have established the Jet Zero Council, whose aim is to accelerate the development and adoption of new technologies so that we can develop our strategy to reach net zero in aviation. Ultimately, we want to ensure that we are doing our bit to ensure that we have low-carbon flight, because there is huge potential in that as well.
Janet Daby (Lewisham East) (Lab)
I welcome the statement by the Secretary of State. We need detailed plans that will show not only how we will reduce our carbon output but how we will protect the jobs and livelihoods of those who work in our oil and gas industries. Today’s White Paper gives them no answers and no hope. Does he agree that his Department must bring oil and gas workers with us as the industry evolves so that we can face a brighter, greener future together?
Alok Sharma
I agree with the hon. Lady. This whole plan is about jobs, jobs, jobs. That is precisely what we are looking to establish: green jobs, high value added jobs, and jobs that are going to increase productivity across our economy. When it comes to oil and gas, I mentioned the North sea transition deal, and we will be setting out more details of that in Q1 next year.
James Sunderland (Bracknell) (Con)
I really welcome the Government’s green agenda, but banning the sale of diesel and petrol cars from 2030 came as a complete surprise. Does my right hon. Friend not agree that this will result in increased costs for the automotive industry, for businesses and for consumers?
Alok Sharma
I note my hon. Friend’s point, but of course there was a consultation on this: we have talked to the sector and, as I said, when we made the formal announcement on this the sector welcomed the changes, because connected with the announcement on the 2030 and 2035 dates was almost £3 billion-worth of support for the sector, which will allow us to ensure that we build giga-factories and support the supply chain. Ultimately, that is the direction of travel. The sector accepts it and I think consumers do, too.
David Mundell (Dumfriesshire, Clydesdale and Tweeddale) (Con)
I very much welcome the White Paper. My personal regret is that my own constituency cannot have a new nuclear power station because of the Scottish National party’s obsessive and dogmatic opposition to nuclear, but may I press my right hon. Friend again on the issue of oil and gas, which is so important to Scotland? Some 100,000 jobs depend on the industry. I heard what he said in relation to the transition deal and its appearance in quarter 1 next year. That is very welcome, not just because it was a manifesto commitment by the Conservative party at the last general election, but because it will bring certainty to those 100,000 workers in that industry.
Alok Sharma
My right hon. Friend is a voice of reason. I just wish the SNP would listen to him more.
The North sea transition deal was absolutely in the manifesto, and we want to use it as a vehicle to create new jobs as well as trade and investment opportunities. The whole point is also to ensure that we retain the skills of the highly skilled individuals we have in the sector. As I have said, we will be publishing details in Q1 2021, but this has been a real collaboration between the sector and the Government.
Mike Hill (Hartlepool) (Lab) [V]
I thank the Secretary of State for his commitment to the future of SMRs and his target of 2030, but that might be too late for Hartlepool power station, which is due to be decommissioned in 2025, the first of the existing fleets. We have a skilled nuclear workforce and a safe nuclear transport infrastructure, so what hope can the Secretary of State give my constituents on the future of nuclear jobs in Hartlepool?
Alok Sharma
If there are parties out there who want to come forward with proposals for the hon. Gentleman’s constituency, we will of course look at them. The value of developing SMRs is that one will potentially be able to have factories in a number of places in time, and that will mean that we continue the agenda of levelling up across the country.
Peter Aldous (Waveney) (Con)
These proposals are extremely welcome as they provide a route map to the zero-carbon future. They can also bring enormous economic benefits to areas such as Waveney in Suffolk by creating a very wide range of jobs, whether working on Sizewell C or in offshore wind, reusing our oil and gas infrastructure, running local community electricity schemes, or retrofitting our homes and places of work. Can the Secretary of State confirm that a radical new skills strategy will sit alongside the White Paper?
Alok Sharma
My hon. Friend raises an incredibly important point. He will know that some weeks ago I set out some initial thoughts on a refreshed industrial strategy, and of course we must ensure that skills are at the front and centre of that. We in the Government have discussions around these matters, and I hope that during the early part of next year we will be able to set out a refreshed industrial strategy
Mr Kevan Jones (North Durham) (Lab)
County Durham has a proud and long history of coalmining. Ironically, it has left the county with a new valuable resource of green energy: the thermal heat from former coalmines. Durham County Council and Newcastle University are working together to develop the Seaham garden village project, which will tap into this new heat source for 1,500 homes. May I ask the Secretary of State to look at that and see how similar products could be spread out across County Durham and other former coalfield areas?
Alok Sharma
My right hon. Friend the Minister for Business, Energy and Clean Growth is already looking at this issue and has shown a great deal of interest. He will be happy to meet the right hon. Gentleman to discuss issues around geothermal.
Selaine Saxby (North Devon) (Con)
As chair of the all-party parliamentary group on the Celtic sea, I am working with colleagues to try to facilitate floating wind turbines in the Celtic sea, which will help us to move towards net zero. Those involved in their construction are facing issues with the Crown Estate, so will my right hon. Friend do what he can to support this project and the clean energy it could generate?
Alok Sharma
My hon. Friend will know that in August the Crown Estate awarded seabed rights for the first floating wind project in Welsh waters of the Celtic sea. She will also know that the Crown Estate has just started market engagement to seek views on how to drive forward new projects. If things are not going as well as she would like, I or my right hon. Friend the Minister for Business, Energy and Clean Growth will be happy to meet her to have a discussion.
Dr Luke Evans (Bosworth) (Con)
There are three broad aspects to the energy market: security, to be self-reliant, the environment, and of course affordability for Mr and Mrs in Bosworth. Does my right hon. Friend agree that those three aspects are addressed in the White Paper, and will he ensure that they are not mutually exclusive?
Alok Sharma
My hon. Friend raises an important point. Those issues are absolutely not mutually exclusive. As he says, they comprise a golden thread running through the White Paper. I go back to the point that some Opposition Members have raised about nuclear. As part of energy security, we need to have a diverse energy mix, and that is why nuclear is very much part of that.
Justin Madders (Ellesmere Port and Neston) (Lab)
The HyNet project is critical for the whole of the industrial sector in the Mersey-Dee area, particularly for Ellesmere Port, but actually this is to protect existing jobs as well as create new ones. May I join my hon. Friend the Member for City of Chester (Christian Matheson) in urging the Secretary of State not to place all his hydrogen eggs in one basket?
Alok Sharma
I do not know whether it is possible to place eggs in a hydrogen basket, but the hon. Gentleman makes an important point. We need to level up across the country and we will do just that.
Richard Graham (Gloucester) (Con)
This energy White Paper is bristling with good things. Let me highlight two of them. The Secretary of State alluded to the negotiations with Sizewell C. May I highlight for him the importance of this project not just to the nuclear energy sector or to that part of the country, but to my constituents in Gloucester, where the operational headquarters of EDF Energy at Barnwood are extremely important? Can he confirm that access to Government financing will be the key to reducing the risk and costs of this project? The second great bit of news is his commitment to considering the role of wave and tidal energy. As chair of the all-party marine energy group, I thoroughly support this initiative, which I hope will end with some pots for marine energy and the contract for difference in November, before COP26.
Alok Sharma
I am delighted that my hon. Friend thinks that this paper is bristling with ideas and energy. I know that for a long time my right hon. Friend the Minister has been bristling with energy getting this thing put together. On Sizewell C, we are going to look at the financing model and that will be part of the discussion, but one of the other key points is that it will be creating jobs during the construction phase and indeed beyond. A number of colleagues have asked what is the connection between this and the lives of people in our constituencies, and the answer is that it is very much about jobs.
Mr Ian Liddell-Grainger (Bridgwater and West Somerset) (Con) [V]
As tail-end Charlie, I must say that the White Paper is a really good piece of work. It has taken a very long time and, as somebody who is rather keen on nuclear, for obvious reasons, I am delighted. However, having read through it, I will say that one of the great things we have down here is the National College for Nuclear, and apprentices in this remarkable industry do need time to be trained in nuclear skills. If we are talking about 10 years for the first SMRs and for Sizewell, we will need more people and we will need them quickly. May I urge the Secretary of State to visit Hinkley—obviously—and to ensure adequate funding within the White Paper so that we can train the future of the nuclear industry?
Alok Sharma
I would never describe my hon. Friend as tail-end Charlie; I think we have left the best till last. He raises an important point about skills, which a number of colleagues have talked about. We very much recognise the need to ensure that we train people up for the sunrise industries of the future, and we will look to address some of that in the refreshed industrial strategy.
Madam Deputy Speaker (Dame Eleanor Laing)
The hon. Member for Bridgwater and West Somerset (Mr Liddell-Grainger) was not quite last, because we have an amendment to the call list, so finally, I call Siobhan Baillie.
Alok Sharma
Madam Deputy Speaker, I can now say that we definitely did leave the best till last—I hope that my hon. Friend the Member for Bridgwater and West Somerset (Mr Liddell-Grainger) is not listening. My hon. Friend raises an important point. As she knows—in fact, this is set out on page 51 of the Energy White Paper—the Government have already committed over £400 million towards new UK fusion programmes. She will also know that this month we launched the spherical tokamak for energy production—STEP—programme and published an open call for communities across the UK to apply to be the host site. I encourage her to look at that and, should her constituents or anyone in the area want to apply, they should put their details forward.
Madam Deputy Speaker (Dame Eleanor Laing)
I am going to suspend the House for three minutes so that people can leave safely and the next cohort of Members can enter safely.
Paris Agreement: UK Nationally Determined Contribution
Lord Sharma Excerpts(3 years, 11 months ago)
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The Secretary of State for Business, Energy and Industrial Strategy (Alok Sharma)
On Friday 4 December, the Prime Minister announced the UK’s new nationally determined contribution (NDC) under the Paris agreement. This commits the UK to a new ambitious target to reduce the UK’s emissions by at least 68% by the end of the decade, compared to 1990 levels.
This is a step forward in our ambition to tackle climate change over the next 10 years as we accelerate towards meeting our legally-binding commitment to reach net zero by 2050. Just as the UK led the way as the first major economy to legislate for net zero, our NDC raises the bar for global climate ambition by committing the UK to the highest level of emissions reductions by 2030 of any major economy, compared to 1990 levels. The level of the UK’s NDC is consistent with advice from the independent Climate Change Committee (CCC). It is a significant step up from the level of the UK’s previous target as a contributor to the EU’s NDC, which was equivalent to around a 53% UK reduction over the same time period.
As the UK looks ahead to hosting COP26 in Glasgow next year, in partnership with Italy, we are urging all countries to follow suit and come forward with ambitious new NDCs and transformational long-term strategies towards net zero emissions, in order to ensure that this will be a decade of ambitious climate action. The climate ambition summit on 12 December, which the UK is co-hosting with France and the UN in partnership with Chile and Italy, provides an excellent opportunity for countries to come forward with new commitments across the three pillars of the Paris agreement: mitigation, finance and adaptation.
Tackling climate change will remain a top priority for the Government. In November, the Prime Minister announced his 10-point plan for a green industrial revolution. Ahead of COP26, we intend to publish a comprehensive net zero strategy, setting out the Government’s vision for transitioning to a net zero economy, making the most of new growth and employment opportunities across the UK.
The UK intends to communicate its NDC to the UNFCCC by the 12 December climate ambition summit. This will include the technical annex, known as information to facilitate clarity, transparency and understanding (ICTU), which will set out the detail underpinning the UK’s headline 2030 target. The UK also intends to communicate an adaptation communication and finance biennial communication to the UNFCCC.
Once formally communicated to the UNFCCC, I will lay the NDC in Parliament and will follow up with letters to relevant Select Committees.
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Departmental Contingent Liability Notification: Human Challenge Project
Lord Sharma Excerpts(3 years, 12 months ago)
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The Secretary of State for Business, Energy and Industrial Strategy (Alok Sharma)
I am tabling this statement for the benefit of right hon. and hon. Members to bring to their attention the contingent liabilities relating to the contract signed between the Government and Imperial College London for the human challenge project.
This project was announced on 20 October and is aimed at supporting the search for a covid-19 vaccine. A £33.6 million Government investment will back the project in partnership with Imperial College London, hVIVO and the Royal Free London NHS Foundation Trust.
In human challenge studies, a vaccine candidate that has proven to be safe in initial trials is given to a small number of carefully selected healthy, young adult volunteers who are then exposed to the virus in a safe and controlled environment. These studies offer the chance to accelerate development of promising vaccines against covid-19, bringing them to people more quickly and potentially saving thousands of lives.
The first step of the project is the virus characterisation study. This will begin in January 2021 and establish the smallest amount of virus needed to cause covid-19 infection in the volunteers. Robust safety, ethics, and regulatory approvals will be put in place before the study begins. Imperial College is the academic study sponsor for the characterisation study. As study sponsor, Imperial will be liable for any negative side-effects volunteers may experience in this study. Imperial has therefore taken out its own insurance, up to the sum of £10 million and for up to 36 months after completion of the study.
My Department has agreed to provide the excess for a relief claim that Imperial may make for a maximum of £15,000 per volunteer (to a maximum of the 90 volunteers involved in this study). This is only applicable where the claim arises as the result of the study but not as the result of one of the parties’ negligence. In addition to the agreed excess, my Department has agreed to provide unlimited indemnity beyond the £10 million.
My Department believes that this is a justifiable position given the very low risk of exceeding the maximum liability. In a reasonable worst-case scenario, our analysis estimates that liability would be under £1.5 million. Therefore, we do not expect the maximum liability to be exceeded.
A full departmental minute will be laid in the House of Commons providing more detail on this contingent liability.
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Green Industrial Revolution
Lord Sharma Excerpts(4 years ago)
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The Secretary of State for Business, Energy and Industrial Strategy (Alok Sharma)
The Prime Minister has today set out a 10-point plan to drive a green industrial revolution in the UK—an innovative and ambitious programme of job creation that will support levelling up, and up to 250,000 jobs across the UK.
As we rebuild, we must build back better, greener, and faster. Our 10-point plan sets out ambitious policies and significant new public investment to allow the UK to forge ahead with eradicating its contribution to climate change by 2050. It presents a vision for the UK that is greener, more prosperous and at the forefront of industries for the future. Covering clean energy, buildings, transport, nature and innovative technologies, the plan will mobilise £12 billion of Government investment to create and support up to 250,000 highly skilled green jobs in the UK, and unlock three times as much private sector investment by 2030.
In doing so, we will position the UK to take advantage of export opportunities in new, global emerging markets in low-carbon technologies and services, providing jobs and reinvigorating our industrial heartlands, including in the north-east, north-west, Yorkshire and the Humber, the midlands, Scotland and Wales.
The plan builds on the UK’s strengths and covers the following 10 areas:
1. Offshore wind: Generating more power with offshore wind by 2030 than households in the UK are currently using, quadrupling how much we produce to 40 GW by 2030, supporting up to 60,000 jobs. We have also committed to invest £160 million into modern, integrated portside offshore wind infrastructure, providing high-quality employment in coastal regions.
2. Hydrogen: Working with industry, aiming to generate 5 GW of low-carbon hydrogen production capacity by 2030 for industry, transport, power and homes. This will be supported by investment of up to £500 million for low-carbon hydrogen production across the decade, with £240 million committed to 2024-25. We will also support trialling homes using hydrogen for heating and cooking, starting with a hydrogen neighbourhood in 2023, moving to a hydrogen village by 2025, with an aim for a hydrogen town—equivalent to tens of thousands of homes —before the end of the decade.
3. Nuclear: Advancing nuclear as a clean energy source through large scale nuclear and developing the next generation of small and advanced reactors. We have committed £525 million to help develop large and smaller-scale nuclear plants, and research and develop new advanced modular reactors, all of which could support 10,000 jobs.
4. Electric vehicles: Backing our world-leading car manufacturing bases, including in the west midlands, the north-east and Wales, to accelerate the transition to electric vehicles, and transforming our national infrastructure to better support electric vehicles. Following extensive consultation with car manufacturers and sellers, the Government confirm that the UK will end the sale of new petrol and diesel cars and vans by 2030, 10 years earlier than planned. However, we will allow the sale of hybrid cars that can drive a significant distance without emitting carbon until 2035. To support this acceleration, the Government have announced: £1.3 billion to accelerate the rollout of chargepoints for electric vehicles in homes, streets and on motorways across England; £582 million in grants for those buying zero or ultra-low emission vehicles to make them cheaper to buy and incentivise more people to make the transition; and nearly £500 million to be spent in the next four years for the development and mass-scale production of electric vehicle batteries, as part of our commitment to provide up to £1 billion, boosting international investment into our strong manufacturing bases including in the midlands and north-east.
5. Public transport, cycling and walking: Making cycling and walking more attractive ways to travel and investing in zero-emission public transport of the future. We will start this transformation with £250 million for local measures to increase cycling and walking this year, as part of our commitment to invest £2 billion in cycling and walking over this Parliament.
6. Jet zero and greener maritime: Supporting difficult-to-decarbonise industries to become greener through research projects for zero-emission planes and ships. We will run a £15 million competition to support the production of sustainable aviation fuels in the UK and invest £20 million into the clean maritime demonstration programme to test new fuels in shipping.
7. Homes and public buildings: Making £1 billion available next year to make new and existing homes and public buildings more efficient, supporting 50,000 jobs by 2030, alongside a target to install 600,000 heat pumps every year by 2028.
8. Carbon capture: Becoming a world-leader in technology to capture and store harmful emissions away from the atmosphere, with a target to remove 10 MT of carbon dioxide a year by 2030, equivalent to all emissions of the industrial Humber today. We have announced an extra £200 million of new funding to create two carbon capture clusters by the mid-2020s, with another two set to be created by 2030. The total investment of up to £1 billion will help to support 50,000 jobs, potentially in areas such as the Humber, north-east, north-west, Scotland and Wales.
9. Nature: Protecting and restoring our natural environment, planting 30,000 hectares of trees every year by 2025, whilst creating and retaining thousands of jobs. This will include starting the process to designate more national parks and areas of outstanding national beauty, create more green jobs with £40 million for a second round of the green recovery challenge fund and £5.2 billion for a six year programme of flood and coastal defences.
10. Innovation and finance: Developing the cutting-edge technologies needed to reach these new energy ambitions and make the City of London the global centre of green finance. To accelerate the commercialisation of innovative low-carbon technologies, systems and processes we will launch the £1 billion net zero innovation portfolio. The portfolio will focus on 10 priority areas that correspond with the 10-point plan.
This 10-point plan ensures that our recovery from covid-19 will generate jobs and bolster the economy, whilst continuing to drive down emissions. It sends a clear signal to industries across the British economy to invest in the UK’s cleaner, greener future.
The plan marks the beginning of the UK’s path to net zero, and we will continue to build on it. Over the next year we will continue to bring forward ambitious proposals across the economy to cut emissions and secure long-term growth for the whole country, with the energy White Paper, and a net zero strategy, in the run up to the international COP 26 climate summit in Glasgow next year. The summit will bring together world leaders, climate experts, business leaders and citizens to agree ambitious action to tackle climate change.
Ahead of the summit, this 10-point plan demonstrates the UK’s significant and continuing commitment to tackling greenhouse gas emissions and sets the foundation to drive a green industrial revolution in the UK.
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National Security and Investment Bill
Lord Sharma ExcerptsTuesday 17th November 2020
(4 years ago)
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The Secretary of State for Business, Energy and Industrial Strategy (Alok Sharma)
I beg to move, That the Bill be now read a Second time.
Our country has always been a beacon for inward investment and a champion of free trade. We recognise and celebrate the positive impact of these twin policies in delivering prosperity and opportunities across the United Kingdom. Over the past 10 years, the UK has attracted around three quarters of a trillion dollars of foreign direct investment, which in turn has helped to create 600,000 new jobs in our country.
In 2019-20 alone, more than 39,000 jobs were created in England thanks to foreign direct investment projects, with more than 26,000 of those jobs created outside London. Almost 3,000 jobs were created in Scotland, and more than 2,500 in Wales and 2,000 in Northern Ireland respectively. That is why we will continue to work relentlessly to ensure that the UK remains a great place to do business and invest. That approach is more important than ever as we look to business to create jobs in our recovery from covid-19.
The UK is very much open for business, but being open for business does not mean that we are open to exploitation. An open approach to international investment must also include appropriate safeguards to protect our national security. Those are not conflicting approaches; prosperity and security go hand in hand. Otherwise, we leave the United Kingdom open to the risk of being targeted and compromised by potential hostile actors who are looking to disrupt our economic and wider security.
Ms Nusrat Ghani (Wealden) (Con)
From the moment that this Bill was started to now, we have learnt a lot more about security and infrastructure. Does my right hon. Friend share my concerns that the Chinese national intelligence law requires Chinese firms to assist with state intelligence work? This was brought to light for me when TikTok gave evidence to the Business, Energy and Industrial Strategy Committee. I am incredibly anxious about the data that it could potentially be harvesting and sharing back with its parent company, ByteDance.
Alok Sharma
I know that my hon. Friend cares very deeply about this issue and, indeed, she and I have had discussions about it. I would say to her that the Bill is agnostic as to the domicile of an acquirer. I think that that is right and proper, but it is also right and proper that we look at every single transaction on a case-by-case basis. Let me assure her that if there are security concerns with any transaction, of course we will act.
Bob Seely (Isle of Wight) (Con)
There is a lot in the Bill that I am sure we all support, but does my right hon. Friend accept that without a public interest test, a character test, an anti-slavery test and a human rights test, the definition of national security being offered here is extraordinarily narrow and problematic to the broader age that we live in? Does he accept that there will be debate around that point—about what constitutes national security in this age?
Alok Sharma
My hon. Friend raises a point that I know he has raised with my fellow Ministers, and other colleagues will raise a similar point. He talks about modern slavery. He knows that the Government passed the Modern Slavery Act 2015. The Home Office is looking to update and strengthen that. I note the points that he has raised, but the whole point of the Bill is for it to be narrow on national security grounds, and that is the way that it was constituted when it was first discussed in the Green Paper in 2017 and in the White Paper in 2018. However, I will try to address some of the points that he raised as I go on.
Those who seek to do us harm have found novel ways to bypass our current regime by either structuring a deal in such a manner that it is difficult to identify the ultimate owner of the investment, or by funnelling investment through a UK or ally investment fund, or indeed, by buying or licensing certain intellectual property rather than acquiring the company. Be in no doubt that the UK and our allies are facing a resurgence of threats. That is why we are updating our powers to screen investments into the UK. Our current powers date back to the Enterprise Act 2002. Technological, economic and geopolitical changes across the globe over the past 20 years mean that the reforms to the Government’s powers to scrutinise transactions on national security grounds are now required.
Mr Kevan Jones (North Durham) (Lab)
I welcome a lot of the proposals in the Bill, including on the issue of land and the removal of the thresholds in terms of ownership. One way that people have been able not only to get influence in this country but to launder money has been through the purchase of large amounts of property in the UK, which were highlighted in the Intelligence and Security Committee’s report on Russia. Does the Secretary of State see the Bill addressing that issue?
Alok Sharma
I will go on to the detail of that particular issue, but as the right hon. Gentleman identified, the Bill looks at assets and intellectual property. On the point that he raised about the size of transactions, as he knows, under the 2002 Act, apart from some limited exceptions, businesses being acquired must have a UK turnover of over £70 million or, indeed, the merger must meet a minimum 25% market threshold. This means that acquisitions of smaller but technologically sensitive companies are not covered.
The Government have been clear for a number of years about our intention to introduce new powers. Many of our international allies, including our Five Eyes partners, have also acted to update their legal frameworks to address national security risks. We, in turn, are seeking to update our legislation in a proportionate manner to ensure that we have more security for British businesses and people from hostile actors targeting our country; more certainty for businesses and quicker, slicker screening processes as we remain open to trade and recover from covid-19; and a regime that is in line with our allies, meaning that investors will be familiar with this approach.
Let me turn to some of the specifics of the Bill. Part 1, chapter 1 introduces a call-in power that the Government may use in relation to a trigger event across the economy that they reasonably suspect has given rise to or may give rise to a risk to national security. Trigger events include acquisitions of certain shares or voting rights in a qualifying entity, and the acquisition of material influence over such an entity. As the right hon. Gentleman pointed out, it will be possible for the first time to call in the acquisition of a right or interest in a qualifying asset, including intellectual property, where such an acquisition would enable the acquirer to use the asset or control or direct how it is used. That is similar to the US and other countries’ regimes.
The call-in approach is consistent with the 2002 Act, but importantly there are no minimum thresholds for the size of the business or asset to be acquired. That means that sensitive businesses and assets that may previously have slipped under the minimum size threshold will no longer do so. That will close the back door into the United Kingdom that hostile actors could exploit.
However, it is important to reassure the investment community that the Government expect to use these powers sparingly. We estimate that less than 1% of transactions in any given year will be subject to call-in. For transactions that fall outside the mandatory requirement of the regime, the Government will be able to call in a transaction within a period of five years of a trigger event having taken place where they have not been notified. When the Government become aware of a trigger event having taken place, they will have six months to issue the call-in notice. That five-year period is, again, consistent with regimes in Germany and France. The Bill requires that the Government publish a statement of policy intent explaining how they expect to use the power to issue a call-in notice.
Should the Bill become an Act, the Government’s call-in powers will apply from the date of introduction and will cover transactions that complete during its passage. That will ensure that hostile actors do not rush through the completion of transactions between the introduction of the Bill and Royal Assent as a means to avoid scrutiny under this legislation. My Department has already set up an investment security unit to field enquiries from businesses and investors about transactions under the new regime.
Under the National Security and Investment Bill, there will be no requirement to publish call-ins. That is of course in contrast to the public interest intervention notices under the 2002 Act.
Aaron Bell (Newcastle-under-Lyme) (Con)
I welcome what the Secretary of State just said about the call-in power. Will he confirm that, as a result of the measures in the Bill, most transactions can take place within 30 days, which means that the UK will remain a venue, and be an even better one, for foreign direct investment as we seek to rebuild our economy following coronavirus?
Alok Sharma
My hon. Friend makes a very important point. We are giving certainty, and we expect that most call-in decisions will be decided upon within 30 days. I said that we expect that less than 1% of all transactions in any given year will be called in, and only about 10% of those will then face detailed scrutiny.
Mark Pritchard (The Wrekin) (Con)
Will the Secretary of the State provide clarity to the House about the jurisdiction of the Bill? For example, if a German technological company was listed in Germany but the IP and research and development was based in the UK, what powers would the Government have to act?
Alok Sharma
This Bill applies to any transaction that relates to an asset or entity in the United Kingdom. If that were the case, of course it would apply.
Sir Iain Duncan Smith (Chingford and Woodford Green) (Con)
I am interested in that point. If a malign actor made an investment in another country with a lower-standard test, which then invested in the UK, putting intellectual property rights at risk, where do the UK Government go on that? Do they give themselves the scope, which I do not see in the Bill, to act on the basis of the original investment?
Alok Sharma
I thank my right hon. Friend for his question. He has taken a great deal of interest in this legislation, and we have spoken about such matters. As I said earlier, the whole point of the Bill is that we will be able to scrutinise the precise details of a transaction and of who the ultimate beneficial owner of a particular acquiring entity may be. I would therefore hope that the Bill will indeed cover the particular set of circumstances he outlines.
Going back to the point about providing assurances, businesses and investors can be reassured that the Government will treat potential national security risks with the discretion they deserve.
Turning to the mandatory notification elements of the Bill, investors in 17 prescribed sectors of the economy will be mandated by law to notify the Government of acquisitions of entities above a certain threshold of shareholding or voting. That mandatory notification process is similar to the approach taken in the United States, Germany and France. The Government have, alongside the introduction of the Bill, published an eight-week consultation to refine the definitions of those 17 sectors. The discussions that I and other Ministers in the Department have had with the investment community suggest that that has been extremely welcome.
Many sectors, of course, are well defined, and the purpose of the consultation is to refine them further so that the definitions are clear and narrowly focused on specific parts of sectors in which risks are most likely to arise and will allow parties to self-assess whether they need to notify. The House will appreciate that we could not have published the consultation before we introduced the Bill, with its call-in powers, or we would have risked hostile actors completing transactions in the particularly sensitive sectors.
Richard Fuller (North East Bedfordshire) (Con)
My right hon. Friend is quite rightly focusing on precisely defining the sectors. Was he as concerned as I was to hear the Opposition spokesman say today that he would prefer a strategy that did not have that definition, relying instead on the whimsy of a particular Secretary of State at the time? That situation could, like it does in France, lead to a yoghurt company or water bottle business being defined as a national strategic asset.
Alok Sharma
My hon. Friend speaks with a great deal of interest and experience in investments. This Bill focuses on national security, and we have been clear that we will define the sectors where mandatory notification is required, which is right and proper. The whole point of the Bill is that we are taking a proportionate approach. We do not want some kind of chilling effect on investment coming into the UK. We have been a beacon for inward investment over many years with, as I said earlier, three quarters of a trillion dollars coming into our country over the past 10 years. We would not want that to change.
Transactions covered by mandatory notification that take place without clearance will be legally void. Again, that is in line with the French, German and Italian regimes. Parties to an acquisition may, of course, voluntarily inform the Secretary of State about their acquisitions to seek swift clearance to proceed. We have also streamlined the information required for notification from 36 pages, as required under the Enterprise Act 2002 for competition modifications, to a third of that.
The use of digital processes will make interaction with the Government much simpler, more transparent and slicker, and Government will aim to provide clearance for most transactions within 30 working days of notification, as my hon. Friend the Member for Newcastle-under-Lyme (Aaron Bell) raised earlier. Having spoken to the investment community over the past week, I know that that timely approach to the clearing of transactions is welcomed.
Moving on to the assessment of called-in transactions, part 2 of the Bill provides powers to assess transactions should the Government call one in. Where the specific legal test is met, the Government may impose conditions or, in extremis, block or unwind transactions. I stress once again that the Government will use those powers sparingly and proportionately.
The Government will take the necessary powers in the Bill to gather information about any transaction. However, such information will be strictly safeguarded against inappropriate disclosure. That includes, of course, information from parties, regulators and others to make informed decisions on transactions. If no remedies are imposed, a final notification will be provided at the end of a national security assessment. Alternatively, the Government may choose to prescribe remedies.
Any notification decision under the Bill will be subject to legal challenge from the potential acquirer entity by way of judicial review or appeal, and the Government will be able to apply to the court for a closed material procedure to protect commercially sensitive and national security matters in such proceedings. The investment security unit will ensure that the entire process is streamlined and supported by robust digital structures and governance to ensure swift decision-making on assessments.
It is worth noting that the new regime will be underpinned by both civil and criminal sanctions, creating effective deterrents for non-compliance with statutory obligations. Again, that is in line with sanctions in the French and German regimes.
Mark Pritchard
Is it not the case that a call-in itself could be commercially sensitive, particularly to a listed company? In that regard, a default of self-referral to the Government would probably be a better way for industry to ensure that share prices are not unfortunately affected by what might be a legitimate call-in.
Alok Sharma
My hon. Friend raises an incredibly important point. Of course, self-referral, as he refers to it, is possible. In fact, if any company has particular concerns as to transactions that they may be undertaking or part of, they will get a swift assessment from the Government.
I make the point, though, that we will not be effectively publicising call-ins when they take place. Clearly, at the end of a transaction, if there was a particular remedy, that would be made public. It is also worth pointing out that the Government will publish an annual report, not on individual transactions, but on the scope of the transactions and sectors that have been looked at. I hope that that will give future investors an opportunity to consider the type of transactions in which the Government have a particular interest.
The final measure that I want to detail relates to the overseas disclosure of information relating to a merger investigation. Under section 243 of the 2002 Act, there is a restriction on the ability of UK public authorities to disclose merger information to overseas authorities unless the consent of the entity has been given. Clause 59 of the Bill removes that restriction. That will strengthen the Competition and Markets Authority’s ability to protect UK markets and consumers as it takes a more active role internationally, allowing the UK to set up comprehensive competition agreements with our international partners.
In conclusion, I hope that right hon. and hon. Members on both sides of the House see that the Bill updates our national security powers in a proportionate, pro-trade and pro-business manner.
Alok Sharma
My hon. Friend raises an important point. As he will know, and I am sure appreciate, I am not going to be able to set out every single test that we will apply when it comes to a national security assessment. The application of the tests will, of course, be based on information that we garner from across Government. He can be certain that in using the powers, the Government will act in a quasi-judicial fashion, we will have regard to the statement of policy that has been published, and we will act, again, in accordance with public law principles of necessity and proportionality. I also made the point earlier that any decision can, of course, be challenged by an affected entity.
Stewart Hosie (Dundee East) (SNP)
Before the Secretary of State moves on, will he give way?
Alok Sharma
I will move on, if that is all right with the hon. Gentleman.
These powers are narrowly defined and will be exclusively used on national security grounds. The Government will not be able to use these powers to intervene in business transactions for broader economic or public interest reasons, and we will not seek to interfere in deals on political grounds. They will not and cannot be used for wider economic tests. The Government already have proportionate powers in statute for intervention on the grounds of competition, financial stability, media plurality and combating a public health emergency. Going further than that would risk chilling and destabilising investment in the United Kingdom and reducing growth opportunities and jobs.
The UK has the lowest corporation tax rate in the G20. We are rated one of the most innovative countries in the world, ranking fourth in the 2020 global innovation index. We are one of the top 10 countries in the world for ease of doing business. We have a world-leading research and development environment, and the stability of our institutions, tax system and legal framework are respected globally. It is because of our pro-market approach that the United Kingdom has become one of the premier places to invest in the world, and I certainly would not want to do anything to change that. The powers we seek in the Bill support and enhance our pro-business environment, supporting economic growth, prosperity and jobs across the United Kingdom, while enhancing security for our country. I commend the Bill to the House.
National Security and Investment Bill and White Paper
Lord Sharma Excerpts(4 years ago)
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The Secretary of State for Business, Energy and Industrial Strategy (Alok Sharma)
I am today introducing the National Security and Investment Bill to update the Government’s investment screening powers and strike the right balance between maintaining an open economy and giving us the tools we need to intervene in cases of serious concern. I am also publishing the Government’s response to the public consultation on the “National Security and Investment” White Paper, an impact assessment for the Bill and a revised draft statement of policy. In addition, I am launching a consultation on secondary legislation to define the sectors subject to mandatory notification.
This Government are a champion for free trade, recognising that inward investment is economically highly beneficial. Investment in UK plc boosts productivity by backing businesses to create good jobs and develop skills, and will help support our economic recovery from covid-19. Since 2010-11, over 600,000 new jobs have been created in our economy thanks to over 16,000 FDI projects. During that decade, over $750 billion has flowed into the UK as a result of FDI. Investors value our legal system, our highly competitive tax regime, and a stable regulatory approach that cannot be replicated anywhere else in the world. The recently announced Office for Investment will build on the Government’s proud record and ensure that the UK remains a premier investment destination as we take advantage of our new status outside the European Union as an independent country.
An open approach to international investment must, however, also include appropriate safeguards to protect our national security and the safety of our citizens. The UK and our allies face continued and broad-ranging hostile activity from foreign intelligence agencies and others, who seek to compromise our national security. When it comes to investment, we are seeing novel means to undermine the UK’s national security that go beyond traditional mergers and acquisitions and also go beyond the reach of our current powers; such as structuring deals to obscure who is behind them. Such behaviour, left unchecked, can leave sensitive UK businesses vulnerable to disruption and espionage. It is crucial that the Government are able to fully combat these threats.
Our current powers to prevent hostile foreign investment in our businesses are set out in the Enterprise Act 2002. Technological, economic, and geopolitical changes across the globe over the last 20 years mean that reforms to the Government’s powers to scrutinise transactions on national security grounds are required. Currently, subject to minor exceptions, target businesses must have a UK turnover of over £70 million or meet a combined share of supply test before Government can intervene on national security grounds. This means that businesses below the £70 million threshold, including those at the very forefront of technological breakthroughs and national security-sensitive innovation, are too often beyond the scope of the present legislation. The Government are also unable to intervene in acquisitions of sensitive assets whose transfer might have national security implications.
The Government are therefore legislating to update their powers to respond to these changing threats and to bring our regime in line with that of our Five Eyes allies and other security partners.
More security for British businesses and people
The National Security and Investment Bill will require notification and clearance of investments in businesses in key sectors, such as defence and artificial intelligence, to our new Investment Security Unit. A full list is provided at the end of this statement and today we are publishing a consultation paper on the definition of these sectors. This consultation will be used to refine the definitions so that they are clear, allow parties to self-assess whether they need to notify, and are narrowly focused on the specific parts of sectors where risks are most likely to arise. This approach will ensure that the regime is targeted and proportionate, and keeps Britain firmly open for business. The Bill will bring us into line with other countries, such as the USA, whose Committee on Foreign Investment also operates a mandatory notification model that investors will be familiar with.
Other investments can also be notified to the Investment Security Unit or proactively “called in” by the Government for national security assessments. This maintains the current flexibility under the Enterprise Act 2002 so that the Government can address national security risks wherever they arise in the economy. The Bill will cover acquisitions of assets, including intellectual property such as trade secrets and software, so that the risks of such transactions can also be fully scrutinised. This combined approach will provide a proportionate defence against hostile actors targeting sensitive sectors in ever more novel and complex ways.
Transactions subject to mandatory notification will not be allowed to proceed without Government approval and any deal that is completed without approval will be automatically void in law. This approach is in line with powers under the French and Italian regimes.
The regime will be underpinned by both civil and criminal sanctions, creating effective deterrents for non-compliance with statutory obligations, in line with many of our allies’ screening regimes, including France and Germany.
The new powers are not limited by turnover or share of supply thresholds, meaning acquisitions of companies of any size, in any sector, can be examined, providing the Secretary of State reasonably suspects that the transaction has given, or may give rise to, a national security risk.
We have increased the period for “calling in” non-notified transactions which the Secretary of State reasonably suspects may raise national security concerns, to up to five years after they take place—and only those which take place from the point of Bill introduction onwards. Again, this is similar to the French, German and Italian regimes and will help to ensure that the risks posed by hostile actors seeking to complete deals in secret can be addressed. As outlined above, by notifying transactions—including after they take place—which are not covered by mandatory notification but may none the less be of potential national security interest, businesses and investors will be able to get a decision and achieve deal certainty.
Once a transaction has been called in and a full assessment process has been carried out, where the clear legal test is met, the Government will be able to impose remedies on transactions. This includes, in the small minority of cases where it is the only appropriate way to address the risks posed by the transaction, blocking or unwinding a deal. For the avoidance of doubt, the Government expect that the vast majority of transactions will be cleared outright, that only a small minority are likely to require conditions, and that only those transactions that present the most serious risks are likely to be blocked. None the less, it is vital we have all the necessary tools available to keep this country safe and such remedies are consistent with the approach under our existing legislation.
The Business Secretary will be the single decision maker for the new regime and will act with advice from the Investment Security Unit, policy experts in Government and with full information from the interested parties, including the ability to hear evidence from the parties in person. This will ensure consistency of decisions across all sectors, that there is a single avenue of approach for business and investors through the Business Department, and that a pro-business outlook underpins the very heart of our investment screening process.
Slicker investment routes and more certainty for businesses
We will make any interactions with Government simpler and quicker by providing clearance to most transactions within 30 working days, with notifiable investments submitted through a new digital portal. Timelines for assessments will be set out in law and not set by the Government on a case-by-case basis as at present under the Enterprise Act 2002, which can take many months to receive clearance.
The digital portal will be available upon commencement of the new regime. In the meantime, businesses and investors can contact the Government to discuss potential transactions of interest by email at: investment.screening @beis.gov.uk
The National Security and Investment Bill requires notified transactions to be either cleared or “called in” within 30 working days of the notification being given and accepted. If a transaction is cleared, then there is no further opportunity after this point for the Government to intervene—unless false or misleading information was provided—so businesses and investors can achieve maximum certainty.
Once a transaction has been “called in”, the Government will then have 30 working days, extendable—in cases where the specific legal test is met—by a further 45 working days, to carry out a full assessment of the transaction. That may include gathering further information about the deal, identifying the nature and extent of the risks it may pose, and working with the parties to explore potential remedies.
These statutory timescales will enable business and investors to plan their affairs with clarity about when they can expect decisions and give them the confidence they need to do business in the UK. Again, any transaction cleared following such an assessment cannot be re-examined by the Government at a later date—unless false or misleading information was provided—and the outcome of all cases requiring the imposition of final remedies must be published by the Business Secretary.
This, alongside the publication of an annual report as required by the Bill, reflects the Government’s commitment to providing the greatest level of transparency possible within the confines of a national security regime. Businesses, investors and their advisers will be able to use this information to attain greater certainty about their own activities and the types of prospective transactions which should be notified.
A regime in line with our allies
We are not acting in isolation. Many of our closest allies, including our Five Eyes partners and France, Germany, and Japan, have similarly reformed their powers in this area over the last few years.
Like us, the United States has also recently introduced mandatory notification requirements in specific parts of the economy to respond to the changing threats. In July, the Australian Government also released draft legislation requiring foreign investors to seek approval to acquire a direct interest in sensitive national security businesses. We will continue to work with like-minded countries to address the shared risks that we face, including through the vector of investment.
The UK’s proportionate updates build on the best practice established around the world by like-minded countries and deliver a balanced regime that provides the Government with the flexible powers they need while keeping our country firmly open to investment.
The Government have been clear for a number of years about their intention to introduce legislation in the area of national security and investment. As we re-build from covid-19 where sensitive British businesses may be vulnerable, we must go further and ensure that the Government can intervene in any deal across the economy that raises risks.
In summary, the Government believe that the final package of reforms introduced to Parliament in the National Security and Investment Bill today strikes the right balance between maintaining the openness and attractiveness of the UK as a destination for inward investment, while also providing the Government with the appropriate powers they need to protect the country.
I will lay both the Government response to the White Paper consultation and the accompanying Bill before Parliament. I will place copies of the impact assessment, the draft statement of policy, and the consultation on secondary legislation to define the sectors subject to mandatory notification, in the Libraries of the both House.
List of sectors with activities to be covered by mandatory notification
Advanced Materials
Advanced Robotics
Artificial Intelligence
Civil Nuclear
Communications
Computing Hardware
Critical Suppliers to Government
Critical Suppliers to the Emergency Services
Cryptographic Authentication
Data Infrastructure
Defence
Energy
Engineering Biology
Military and Dual Use
Quantum Technologies
Satellite and Space Technologies
Transport
[HCWS568]
Oral Answers to Questions
Lord Sharma Excerpts(4 years ago)
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Wendy Chamberlain (North East Fife) (LD)
The Secretary of State for Business, Energy and Industrial Strategy (Alok Sharma)
The Government have so far provided £13.2 billion of support to self-employed people through the self-employment income support scheme, and that support continues. The UK’s self-employment scheme is among the most generous internationally.
Margaret Greenwood [V]
According to the Association of Independent Professionals and the Self-Employed, the solo self-employed contributed an estimated £305 billion to the UK economy last year. So why have 1.6 million self-employed people been excluded from government support during the pandemic? What will the Minister do to address this failure of Government to recognise the huge contribution self-employed people make to the economy and to our communities?
Alok Sharma
As the hon. Lady will know, the self-employment scheme has been targeted at those who derive the majority of their income from self-employment. I hope she will welcome an extension of that scheme, which the Chancellor has announced. It will now last for a further six months, from November of this year to April 2021.
Wendy Chamberlain
Following yesterday’s news about a covid vaccine, for the first time in a while it feels as though there may be an end in sight. If it becomes clear that a return to normality will be possible in the next few months, surely the only responsible approach is to expand support and adopt a true “whatever it takes” approach to help all businesses, including those currently excluded. So in the light of yesterday’s news, will the Secretary of State agree to work with the Treasury to review the economic support currently on offer?
Alok Sharma
One feature of the pandemic has been that we have indeed reviewed the support and provided further support where it is needed. As I said, we have extended the self-employment income support scheme, which means an extra £7.3 billion of support for the self-employed through November to January. Of course, we all hope that a vaccine comes forward, but the support is there, as well as support in terms of grants for businesses that are required to be closed.
Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)
The Secretary of State continues to duck the question. He has been told for about seven months of those excluded from support—the battered, bruised and brushed off. We are talking about the 3 million—the newly self-employed, the directors and the freelancers who have been given nothing. He is the Business Secretary, so is it that the Chancellor has ignored his calls for support or is it just that he simply does not care?
Alok Sharma
The hon. Gentleman knows me quite well and I think he will understand, at least in private, that I do very much care, as does every Member of this House. He talks about those who are not able to get access to this scheme, and, obviously, one issue relates to those who are paid in dividends. As he knows, Her Majesty’s Revenue and Customs has made the point that it is difficult to distinguish between income earned through an individual’s own company dividends and dividends that have been paid from holding shares in other companies. If the hon. Gentleman has suggestions as to how we might overcome this, I would be interested to work with him.
Ms Nusrat Ghani (Wealden) (Con)
Jack Brereton (Stoke-on-Trent South) (Con)
The Secretary of State for Business, Energy and Industrial Strategy (Alok Sharma)
I want to thank those in the manufacturing sector for the brilliant work they are doing to support the economy and keep it going. Despite the national restrictions, the manufacturing and construction sectors can continue to operate and are doing so. Thus far, the manufacturing sector has benefited from about £5 billion of furlough grants and £4 billion of government-backed loans.
Ms Ghani
I thank the Secretary of State for his response. I wish to seek further assurances on behalf of my three local chambers of commerce—Hailsham, Crowborough and Uckfield. What further support can be provided for small and medium-sized manufacturing firms in my constituency, not only during covid, but during transition next year?
Alok Sharma
I know that my hon. Friend works closely with her three local chambers of commerce in Hailsham, Crowborough and Uckfield. On planning for transition, whatever our future trading relationship with the European Union things will change for businesses and they do need to prepare. My Department and my fellow Ministers and I have been communicating and engaging directly with businesses, and we will continue to do so.
Mrs Latham [V]
Rolls-Royce is a very important manufacturer throughout the UK, not least in Derby, where it employs more than 12,000 people. Will my right hon. Friend assure me that whenever the Government help Rolls-Royce, all money spent will directly support the recovery of domestic civil aerospace manufacturing?
Alok Sharma
My hon. Friend is a great champion of workers in her constituency, and she and I have met to discuss these issues. She will know that the Government are supporting the aerospace and aviation sectors to the tune of almost £9 billion through loans and grants. Of course, we want that support to create a positive business environment and ensure that Rolls-Royce and, indeed, other companies in the sector base their work in the UK, sustaining well-paid local jobs for decades to come. As my hon. Friend will know, Rolls-Royce proposes to consolidate the assembly and testing of its large aero-engines from Singapore to Derby.
Jack Brereton
Many manufacturers, especially those in Stoke-on-Trent, face high energy costs, and there is little incentive to switch to cleaner electricity because of the higher cost. Will my right hon. Friend look at what additional support can be offered to energy-intensive industries so that our manufacturers remain competitive and can invest in improved efficiency?
Alok Sharma
My hon. Friend is a great champion of manufacturers in his constituency. As he will know, the Government are committed to helping businesses to reduce their costs through resource and energy efficiency. We have established a package of compensation exemptions from electricity costs worth more than £470 million, which will of course benefit businesses in energy-intensive sectors such as ceramics, which is a particularly important industry for Stoke-on-Trent.
Edward Miliband (Doncaster North) (Lab)
One obvious way to help our manufacturers is with a green stimulus equal to the scale of the economic emergency that we face. President-elect Biden has pledged $2 trillion for such a stimulus; the French and German Governments have pledged tens of billions of euros; and Britain has pledged just £5 billion. Will the Secretary of State tell us when this Government are going to show the same scale of ambition—not in 10 years’ time but now—to create hundreds of thousands of jobs in this country?
Alok Sharma
The right hon. Gentleman may have been reading the Conservative party manifesto, because we have been clear that we have an ambition to create 2 million green jobs by 2030 and have already set out some of the measures, including £2 billion in green homes grants to support 100,000 green jobs. The Prime Minister has also announced that we will be boosting the Government’s target for offshore wind by 2030 from 30 GW to 40 GW, thereby bringing additional jobs to the sector. We will set out more plans over the coming weeks.
Edward Miliband
I thank the Secretary of State for that answer, but the rhetoric does not match the reality. Look at what other countries, including France and Germany, are doing, and look at the scale of what we are doing. He mentions offshore wind; let us take that as an example. As he says, the Government want to see 40 GW of offshore wind by 2030, but to ensure that the jobs in manufacturing the turbines are created here, we need the ports and supply-chain investment. The amount that the Government have pledged—£160 million over 10 years—is woefully inadequate. What is the Secretary of State’s estimate of the public investment required to meet his own target that 60% of the content of the offshore wind industry should be British—a target he is missing badly? Will the Government now fund and support the scale of investment required?
Alok Sharma
We are making funding available to upgrade ports, as the right hon. Gentleman said. I hope he would acknowledge that, as a result of the Government’s work on contracts-for-difference auctions, we have the biggest offshore wind industry in the world, which has driven down prices significantly and made offshore wind viable. We will continue to work to support those jobs, and we are talking about tens of thousands of extra jobs in the sector by 2030.
Darren Jones (Bristol North West) (Lab)
Vaccine manufacturing for covid is being led by Ms Kate Bingham from the vaccine taskforce. Not only has she disclosed official sensitive documents to hedge-fund managers in the United States, but she has spent £670,000 of taxpayers’ money on private public relations advisers instead of using civil servants and is set to benefit financially from state investments. Ms Bingham should be sacked. If she is not sacked, who will be held to account for this gross conflict of interest and misuse of public funds? Will it be the Secretary of State or the Prime Minister?
Alok Sharma
I would point out that the vaccines taskforce, which sits in my Department and is led by Kate Bingham, has done an absolutely brilliant job over the past few months. We have managed to secure 350 million doses across six of the most promising vaccine candidates. The hon. Gentleman will have seen the statement that came through from Pfizer/BioNTech yesterday; we were the first country in the world to secure access to that particular vaccine candidate. The hon. Gentleman talks about spending; the senior responsible officer, in line with his delegated authority, approved that resourcing in accordance with public sector practices and frameworks.
Chris Loder (West Dorset) (Con)
Jeff Smith (Manchester, Withington) (Lab)
The Secretary of State for Business, Energy and Industrial Strategy (Alok Sharma)
Last week, at the CBI’s annual conference, I reaffirmed our desire to build back better through levelling up across the country. We are developing a new strategy for growth, a refreshed and reinvigorated industrial strategy that puts the UK at the forefront of economic opportunity. We want to broaden the geography of our economy while taking a more strategic approach, supporting research and innovation in areas where the UK has the potential to both lead and change the world. We will work with industry as our plan for growth takes shape in the months ahead and is published in the new year.
Jeff Smith
Any help for business, like the local restrictions support grant, is welcome, however limited, but nightclubs and much of the night-time industries have been required to close since 23 March, with no sign to an end of their problems. So should the grants not be backdated to that date, rather than starting on 1 November?
Alok Sharma
I am delighted that the hon. Gentleman welcomes the support that is being provided. He also knows that, for areas that were in tier 2 or tier 3 before the new restrictions came into force, there are backdated payments to August equivalent to up to £2,100 a month.
Andy McDonald (Middlesbrough) (Lab)
Employers and trade unions work night and day to keep workplaces covid-secure, so it is absolutely staggering that the health and safety inspection discovered fundamental breaches of the guidelines in the overcrammed private office of the Secretary of State. A member of the Minister’s staff tested positive for covid, yet the Secretary of State did not self-isolate: he met Prince Charles and took a flight to South Korea. The need to suppress workplace transmission is as great as ever, so how can working people and businesses have any trust in the Government when the very people responsible for setting the rules ignore them in their own offices?
Alok Sharma
As the hon. Gentleman will know, I followed all the rules, as we always do in my Department. I want to thank businesses, trade unions and the business representative organisations we worked with earlier this year to put together the guidelines to keep business areas covid secure.
Jack Lopresti (Filton and Bradley Stoke) (Con)
Alok Sharma
I am absolutely delighted to congratulate my hon. Friend’s constituent, Jess. I thank him for all the work he does in his constituency to support engineering apprenticeships. He is absolutely right. We want the sector to keep supporting well-paid skilled jobs for our young people moving into the workplace as we build back better into the decade ahead.
Grahame Morris (Easington) (Lab)
Alok Sharma
I did address this issue earlier, but as the hon. Gentleman will know Rolls-Royce has indicated that it will retain key work in Barnoldswick, including fan blade capability relating to the Trent 700 engines, the joint strike fighter and a new technical capability for product development. I can also tell him that I will be meeting a cross-party group of Members of Parliament, together with Rolls-Royce, next week.
Andrea Jenkyns (Morley and Outwood) (Con) [V]
Justin Madders (Ellesmere Port and Neston) (Lab)
Alok Sharma
As the hon. Gentleman will know, showrooms were one of the first businesses required to be closed that were reopened in the last national restrictions period. What I would like, and what I know he wants, is for us get to the point on 2 December where we move back into local restrictions and we are able to open up businesses across the country.
Elliot Colburn (Carshalton and Wallington) (Con)
Graham Stringer (Blackley and Broughton) (Lab)
Alok Sharma
We have invested in manufacturing across the country. In fact, I visited Valneva, which is one of the companies that is producing one of the vaccine candidates, and we have of course invested there as well. If the hon. Gentleman has particular suggestions to make about areas where we ought to be investing in terms of vaccine manufacturing, he should come forward.
Alicia Kearns (Rutland and Melton) (Con) [V]
Alok Sharma
Many years ago, I had an opportunity to work for the Mars group, and I know what a brilliant job food processing companies have been doing throughout the pandemic. The food manufacturing sector can continue to operate through the national restrictions as long as they follow the Government’s guidance on keeping factories, plants and warehouses covid-secure.
Anne McLaughlin (Glasgow North East) (SNP) [V]
Judith Cummins (Bradford South) (Lab)
Alok Sharma
I completely understand how incredibly tough it is for many businesses, including in the sector the hon. Member outlined. She has raised a point, and I am sure that this issue will be looked at.
Steve Double (St Austell and Newquay) (Con)
Alok Sharma
As my hon. Friend will be aware, the Government are committed to the space sector. We have already invested £40 million to achieve satellite launch from the early 2020s, including more than £7 million to establish launch services from Spaceport Cornwall. I am sure that the science Minister, my hon. Friend the Member for Derby North (Amanda Solloway), will be happy to meet him to discuss that further.
Carla Lockhart (Upper Bann) (DUP)
Alok Sharma
We have been very clear on this issue and, as the hon. Lady knows, we have introduced the United Kingdom Internal Market Bill. Of course we will continue to work on these issues.
Dr Dan Poulter (Central Suffolk and North Ipswich) (Con)
Alok Sharma
I recognise the difficulty that the hospitality sector faces. Of course we want to ensure that, as we come out of the national restriction on 2 December, businesses move into the tiered areas, and I hope that some business will be able to reopen. However, it is worth pointing out that pubs and restaurants can continue to operate as takeaways and support is available, including grants of up to £3,000 per month, as well as additional support through the £1.1 billion funded to local authorities.
Tonia Antoniazzi (Gower) (Lab)
The Post Office Horizon scandal may well be the largest miscarriage of justice in our history, with over 900 false prosecutions destroying lives, families and reputations. Does the Minister agree that a judge-led inquiry into the scandal is the only way many sub-postmasters will be satisfied?
Alison McGovern (Wirral South) (Lab)
We know that our economy is changing, supercharged by the impact of covid and new technologies that are facilitating the change; but does the Minister agree that it is desirable and possible for companies to change in a way that protects skilled jobs, whether that is Spotify’s responsibility to creative workers, or BT’s responsibility to our broadband engineers? Will the Minister do all it takes to ensure that our companies invest in people as well as digital infrastructure?
Alok Sharma
The hon. Lady raises an important point. Of course we want good jobs to be created and preserved, and I agree with her. I believe she is arguing that we need a greater level of productivity in the country, and that is precisely what we are working on as part of our strategies.
Mr Speaker
In order to allow the safe exit of hon. Members participating in this item of business and the safe arrival of those participating in the next, I suspend the House for three minutes.