Coronavirus Large Business Interruption Loan Scheme
Lord Sharma Excerpts(4 years, 7 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 hon. and right hon. Members to bring to their attention the details of the Coronavirus Large Business Interruption Loan Scheme.
Like the Coronavirus Business Interruption Loan Scheme, the Coronavirus Large Business Interruption Loan Scheme will be facilitated by the Government-owned British Business Bank and delivered through its delivery partners. Lenders will offer loans of between £30,000 and £50 million to support viable businesses with a turnover of £45 million and above that are affected by the coronavirus outbreak. There will be no limit on the number and aggregate value of loans that can be made under the scheme.
The scheme is available on a temporary basis from 20 April for an initial six months, and can be extended as required. The key parameters of the scheme are as follows:
the percentage of the remaining balance of each loan that is guaranteed by the Government will be 80%;
there will be no portfolio cap for the lender, enabling lenders to benefit from capital relief to help lenders to price loans competitively;
a personal guarantee approach that mirrors the existing CBILS programme (no personal guarantees permitted on loans below £250,000, and personal guarantees up to a maximum of 20% of losses post-business recovery);
interest charged at commercial rates (but lenders are expected to ‘pass through’ benefit of the guarantee);
businesses with turnover of up to £250 million can access a maximum debt facility of £25 million, those with higher turnovers can access facilities of up to £50 million; and
facilities will be available with a maximum term of three years.
The new scheme was launched on 20 April. The Government will be subject to a new statutory contingent liability, and I will be laying a departmental minute today containing a description of the liability undertaken.
For more information on this and other support for business, please go to: https://www.businesssupport.gov.uk/
[HCWS198]
Departmental Contingency Liability: Coronavirus Interruption Loan Scheme
Lord Sharma Excerpts(4 years, 8 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 hon. and right hon. Members to bring to their attention the details of the coronavirus business interruption loan scheme announced by the Chancellor of the Exchequer on 11 March 2020.
The coronavirus business interruption loan scheme will be facilitated by the Government-owned British Business Bank and delivered through its delivery partners. Lenders will offer loans of up to £5 million to support small and medium-sized businesses with a turnover up to £45 million that are affected by the coronavirus outbreak. There will be no limit on the number and aggregate value of loans that can be made under the scheme.
The scheme is based on the British Business Bank’s existing Enterprise Finance Guarantee scheme, is available on a temporary basis and can be extended as required. The key parameters of the scheme are as follows:
The percentage of the remaining balance of each loan that is guaranteed by the Government will be increased to 80% (currently 75% of each EFG loan is guaranteed);
A cap on gross Government liability at the level of the lender’s whole CBILS portfolio of 75% of losses (currently the Government’s gross liability is capped at 20% of losses across the lender’s whole EFG portfolio);
A Government grant (the business interruption payment) will be provided for the benefit of businesses, equal to the fees and interest incurred on the facility for the first 12 months. The maximum grant payable is capped at a level that will allow a significant majority of businesses to be compensated in full. A lower cap applies to businesses in some sectors;
The lender must establish that the SME has a viable business proposition assessed according to its normal commercial lending criteria. However, where there are some concerns over the short-term business performance due to covid-19 impacts, provided the lender reasonably believes that the finance will help the business to ‘trade out’ of any short-term cashflow difficulty, then the business is considered eligible for the scheme; and
Subject to the lender’s policy, businesses can access CBILS loans up to a value of £250,000 without the lender undertaking an assessment of their security position (currently, only businesses that have been assessed by the lender as having insufficient security can access EFG loans).
The new scheme was launched on 23 March, will run for an initial period of six months, and will be extended as required. The Government will be subject to a greater contingent liability than is the case for the Enterprise Finance Guarantee, and I will be laying a departmental minute today containing a description of the liability undertaken.
For more information on this and other support for business, please go to: https://www.businesssupport.gov.uk/.
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Budget Resolutions
Lord Sharma Excerpts(4 years, 9 months ago)
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The Secretary of State for Business, Energy and Industrial Strategy (Alok Sharma)
I thank the right hon. Member for Hayes and Harlington (John McDonnell) for his opening remarks. I think we can all agree that we need to demonstrate a unity of purpose across the whole House, particularly at this time. As I go through my remarks, I will address some of the points he raised, but I will just say this in candour and with the hand of friendship. When I entered the House in 2010, he had already been here for a number of years. In 2010, the economy was absolutely on its knees. [Interruption.] We had the highest, biggest deficit in peacetime at over 10% of GDP. When George Osborne delivered an emergency Budget, there were siren voices on the Labour Benches—I do not know whether the right hon. Gentleman was one of them—who said that as a result of those policies we would lose 1 million jobs and the economy would be decimated. That is not what has happened. Ten years on, we have record levels of employment and we are able to make the investments the Chancellor set out yesterday precisely because we took the right decisions in terms of fixing the public finances.
Steve McCabe (Birmingham, Selly Oak) (Lab)
Is the Secretary of State not prepared to concede that within a year of that emergency Budget George Osborne actually had to reverse many of the capital cuts he had made, because of the damage he was doing to the economy?
Alok Sharma
I do not have to look back. I can look at the present, which is record levels of employment. As I go through my speech, I will highlight some of the Government’s other achievements.
Let me talk a little bit about the Budget. The Budget the Chancellor set out yesterday delivers security today and lays the foundation for prosperity tomorrow. The right hon. Gentleman said that all commentators were somehow against the Budget. That is not the case, as he knows full well. The Federation of Small Businesses called it a “pro-small business Budget”. The CBI said:
“It’s a bold Budget at scale…which will help people and business through tough times.”
The British Chambers of Commerce said:
“There’s much to welcome in this Budget for business communities across the UK.”
This is, of course, a Budget delivered in challenging times. I am grateful to the right hon. Gentleman for acknowledging that point and for supporting many of the measures the Chancellor put forward yesterday. I know that many people are concerned about the impact on investment, cashflow and the future of their businesses as a result of covid-19. The Government, as the House knows, announced a £12 billion package for public services, individuals and businesses whose finances are being affected. Support for businesses includes a £1 billion coronavirus business interruption loan scheme, delivered by the British Business Bank, which is already supporting over £7.2 billion of finance to over 93,000 SMEs.
Henry Smith (Crawley) (Con)
Does my right hon. Friend share my concern that there was nothing in the Budget to support our aviation industry? Indeed, air passenger duty was increased as a result of yesterday’s Budget. Many airlines face difficulty. A number have sadly gone out of business in recent weeks and other household names may well go out of business as a result of covid-19. Will he put in a request for air passenger duty to be waived for six months? Otherwise we could see a number of British airline brands go under as a result. They are deeply suffering.
Alok Sharma
I will talk about the discussions I have had with business groups and business representatives, including those from the aviation sector. The Chancellor was very clear yesterday that this is a start. We will keep the situation under constant review and where support is required, we will look to see what we are able to provide.
Returning to the business interruption loan scheme, this is a temporary scheme that will help small businesses to access much needed finance. Yesterday, the Chancellor also announced £2.2 billion of support for about 700,000 businesses which are in receipt of small business rate relief or rural business rate relief. We want to ensure that every single eligible business gets their £3,000 at the earliest opportunity. We will work with local authorities to make sure that that happens. We will also refund businesses with fewer than 250 employees which pay qualifying statutory sick pay to people who are absent from work due to self-isolating for up to two weeks. We are providing vital tax relief, temporarily abolishing business rates for retailers whose premises have a rateable value of less than £51,000 and expanding the discount to include leisure and hospitality businesses. From creating jobs to supporting communities, small businesses are absolutely the backbone of our economy and this Government will always stand by them.
Yesterday, my Ministry colleagues and I heard from the Bank of England’s chief economist, who stressed the vital action that the Bank is taking to help banks to provide additional credit to businesses. Banks must absolutely be part of the solution and we are already seeing signs of that. Earlier this week, NatWest and Lloyds launched funds of £5 billion and £2 billion respectively for small and medium-sized enterprises directly affected by the impact of covid-19. NatWest also pledged to defer customers’ mortgage and loan repayments for three months. I want to see more lenders stepping forward and supporting our businesses through these challenging times.
As Business Secretary, I regularly speak to the business community, and in the light of covid-19, I have ramped up that engagement. Last night, I spoke with business groups and trade associations, including those from the aviation sector, to discuss the measures in the Budget and to reassure them of the Government’s commitment to support them. As I said, we will keep our response under review as the situation develops, but let me be very clear: this Government will always be on the side of business, entrepreneurs and innovators, because they pay the taxes that fund our brilliant public services.
Although I started my remarks by discussing our short-term measures to fight covid-19, it is worth reflecting what Conservatives in Government have achieved with the economy since 2010—I know that the shadow Chancellor will want to hear this. Employment is at a record high. The unemployment rate is at its lowest since the 1970s. A record number of women and a record number of people from ethnic minority backgrounds are in work. Over 1 million more people with health conditions and disabilities are in work now than five years ago, and youth unemployment has almost halved since 2010. Employment is higher in every nation and region of the United Kingdom than in 2010.
Andrew Griffith (Arundel and South Downs) (Con)
Does my right hon. Friend agree that the acid test of how productive an economy is and how well it is doing is its ability to attract investment from global investors who could deploy capital anywhere in the world? In that context, does he agree that it is a sign of success that the United Kingdom attracts more direct investment than France and Germany combined?
Alok Sharma
My hon. Friend makes an incredibly important point. He has had a very successful business career and knows all about attracting inward investment, and he is absolutely right: the UK has been, and will continue to be, a beacon under this Government for foreign inward investment.
Stephen Timms (East Ham) (Lab)
The right hon. Gentleman mentioned 2010. I had a look back at the Red Book from 2010, which warned that if nothing had been done and the previous Government’s policies had carried on, then by 2014-15, we would get debt still rising up to 74.4% of GDP. What actually happened was that in 2014-15, debt carried on rising up to over 80% of GDP. Was the Chancellor not right yesterday to have completely repudiated previous Tory policy?
Alok Sharma
The right hon. Gentleman knows that I have a huge amount of respect for him—we have had very good discussions in other roles that I have had. He will know that in 2010, when the Conservatives took over in Government, we were on the brink—the economic precipice—and I do not think that, in private, he would disagree with that. We also had a record deficit, and that is now down to less than 2%. The shadow Chancellor talked about the impact on real people. What I am laying out is the precise impact that the Government’s policies have had on real people by improving their employment prospects and their earnings.
Stephen Timms
The absolute imperative was to eradicate the deficit by 2015. Today, the right hon. Gentleman is boasting that it is down to 2% five years after that.
Alok Sharma
I am a modest man. I do not like to boast—I just like to state facts, and the fact is that we have record levels of employment in our country.
Let us talk about what has happened for businesses. Since 2010, we have seen corporation tax come down by 9% to be the lowest in the G20. Business registrations are up by over 60%, with nearly 150,000 more firms registered in 2010. Wages growth has been outpacing inflation for 23 consecutive months. The UK is in the top 10 countries in the World Bank’s ranking for ease of doing business and in the top five of the Global Innovation Index. [Interruption.] I do not know—maybe the shadow Chancellor finds that funny, but I do not. I think it is something that we should be very proud of in this country.
I certainly am delighted to be part of the most business-friendly Government ever, and of course, we want to go even further. We are extending the British Business Bank’s start-up loan scheme for a further year, supporting up to 10,000 loans. We are providing another £200 million for life sciences and more funding for growth hubs. In short, we are on the way to making the United Kingdom the best place in the world to start and grow a business.
Of course, the best businesses need the best ideas. Research and development drives up productivity, which leads to high-value, high-wage employment and an increase in exports. That is why I am delighted, as I know Government Members are, that we are committing to spend £22 billion a year on research and development by 2024-25. This is the fastest and largest increase in Government R&D spend ever and there is a multiplier effect, for every pound of public R&D spend delivers around £7 of economic benefit for the country as a whole.
Britain is home to four of the world’s top 10 universities. We are a world-leading nation when it comes to winning Nobel prizes. The UK has produced around 14% of the world’s most impactful research. UK researchers and businesses are cutting carbon emissions, curing genetic diseases and pushing the frontiers of artificial intelligence. Ours is a country that gave the world penicillin, the steam railway and the worldwide web, and we are turbo-charging this tradition of invention and discovery by establishing a brand-new research funding agency, letting researchers pursue high-risk, high-reward projects. We are betting big on Britain’s pioneers and problem solvers as they seek to transform every aspect of our lives, from the journeys we make to the medicines we take.
We have already seen how public R&D funding can create centres of excellence right across the United Kingdom. In Coventry, the UK Battery Industrialisation Centre will soon be developing new ways of scaling up factory production for electric vehicles. In Manchester, the Graphene Engineering Innovation Centre is helping to make cutting-edge composites for affordable electric vehicles. In Harwell near Oxford, our Satellite Applications Catapult is working on applications to remove space debris from orbit. In Scotland, we are backing a world first medicines manufacturing innovation centre, which will help new drugs to reach patients faster. In Northern Ireland, our Digital Catapult is providing mentoring and advice to help cyber-security firms to scale up and succeed. In Wales, we are backing the first compound semiconductor cluster anywhere in the world—a technology that could underpin everything from wearable health sensors to autonomous vehicles in the years ahead.
I am determined that as the UK forges a path as a science superpower we use that opportunity to level up centres of excellence across our whole country. As part of that, my Department, with the Treasury, is committing to creating a northern campus, but I want to be clear that levelling up and having staff across the country has always been part of my Department’s agenda. Some 84% of its partner organisations are already based outside London, while BEIS itself already has sites across the UK, including in Aberdeen, Birmingham and Cardiff.
In the coming years, we will need to make the most of ideas, innovations and solutions from each and every corner of our United Kingdom. The shadow Chancellor will agree that nowhere is that more true than in tackling climate change. Part of my Department’s mission is to deliver clean energy and to lead on the path to net zero emissions by 2050. Since 2010, as a result of the actions we have taken, the United Kingdom has cut its carbon dioxide emissions by around 30%. Driven by investment in renewables, 99% of the UK’s solar photovoltaic capacity has been deployed since 2010. Today, the UK has more installed offshore wind capacity than any other country in the world.
Our contracts for difference auctions have helped to reduce the price of offshore wind by two thirds in the last five years. The UK already has more than 460,000 jobs in the low-carbon sector spread right across our country. From Siemens in Hull to MHI Vestas on the Isle of Wight, we have seen hundreds of new jobs making turbine blades, and last year Ørsted launched the world’s largest offshore wind operations and maintenance facility in Grimsby.
In yesterday’s Budget, the Chancellor announced that he would more than double R&D spend in the energy innovation programme. The Budget backed nuclear fusion to develop and build the world’s first commercially viable fusion power plant by 2040. It backed low-emission vehicles, including with funds to support the roll-out of a fast charging network for electric vehicles, and it will fund a new heat network scheme and put £800 million behind two or more carbon capture and storage clusters, one by the mid-2020s and a second by 2030. [Interruption.] I hear the hon. Member for Stalybridge and Hyde (Jonathan Reynolds) chuntering, if I may call it that—I do not mean to be rude—from a sedentary position. I hope he will appreciate that carbon capture and storage will have to be part of the mix going forward, which is why we are investing almost £1 billion in it.
Dame Diana Johnson (Kingston upon Hull North) (Lab)
The Humber is one of the areas that have been put forward for the carbon capture pilot. As the Humber is the highest emitter of carbon in the United Kingdom, we believe that we should be the first to enjoy some of that £800 million. I wonder if the Secretary of State might want to back the Humber in that proposal.
Alok Sharma
In the spirit of bipartisan friendship, I would be very happy to sit down and talk with the hon. Member about her proposals. I make no promises at that Dispatch Box, but, as I hope colleagues will know across the House, I am always happy to talk to colleagues and get their input.
Thanks to the industries I discussed earlier, we aim to have up to 2 million green jobs in our economy by 2030. The UK economy has grown by 75% since 1990. At the same time, we have cut emissions by 43%. We have demonstrated that green growth is possible. We have the opportunity to turn climate change into a green growth opportunity for the global economy. As the shadow Chancellor noted, this November, COP26, the UN climate conference, which will be the biggest summit ever organised by the UK, will take place here. Whether globally we live in the south or the north, the east or the west, we share one life-giving but fragile planet. All our futures are indeed intrinsically linked. COP26 can be where the world comes together to ramp up momentum towards a zero carbon economy. It can send out a message of ambition and hope that decarbonisation is the future, with huge opportunities for those who are willing to act now.
In conclusion, the Budget delivers for our businesses, innovators and entrepreneurs. It is a Budget to power pioneers and problem solvers right across our country. We are a one nation Government committed to levelling up investment, growth and opportunity across the whole of our United Kingdom, and I commend the Budget to the House.
British Steel: Completion of Sale
Lord Sharma Excerpts(4 years, 9 months ago)
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The Secretary of State for Business, Energy and Industrial Strategy (Alok Sharma)
On Monday 9 March, Jingye Group, a Chinese steelmaker, formally completed its purchase of British Steel Limited from the official receiver, securing more than 3,200 highly skilled jobs in the UK.
Jingye has acquired British Steel’s steelworks at Scunthorpe, Skinningrove and on Teesside, as well as subsidiary businesses TSP Engineering and FN Steel in the Netherlands.
On 22 May last year British Steel entered compulsory liquidation. The court appointed official receiver took control of the company and together with special manager, EY, was responsible for running an independent sales process.
Upon entering liquidation an indemnity was provided by Government which enabled British Steel to continue to trade, and staff to continue to be employed. During this time the Government worked closely with the official receiver, special managers and all interested parties to support the sales process.
Securing a positive outcome for British Steel would not have been possible without the considerable efforts and commitment of Jingye, the official receiver, special managers, employees and trade unions.
The British Steel Support Group, set up by the right hon. Member for Tunbridge Wells (Greg Clark) and maintained by the right hon. Member for South Northamptonshire (Andrea Leadsom) also played an important role in supporting the sales process. The group comprised of Members from across the House of Commons, local political leaders, local enterprise partnerships, trade union representatives, British Steel management, and representatives from Make UK and the Federation of Small Businesses.
The sale protects thousands of highly skilled jobs and secures steelmaking operations at British Steel’s sites in Yorkshire and the Humber and the North East. Jingye has outlined ambitious plans for the business, pledging investment of £1.2 billion to modernise sites and improve energy efficiency and environmental performance.
While more than 3,200 jobs have been secured, around 450 staff have, sadly, not be retained. The number of employees was negotiated with the trade unions alongside the new terms and conditions. The Government are offering their full support for those affected, mobilising the Rapid Response Service and National Careers Service to give immediate on the ground support and advice. This service will help those affected to transition into other employment or take on new training opportunities.
More broadly, the Government are committed to working with businesses and local government to grow and modernise the economy of the Humber area. Over the long term we will need industry in the Humber area to make a major contribution to national net zero and energy supply goals. We will shortly be publishing our local industrial strategy for the Humber which will reflect these ambitions.
We look forward to working with the new management team at British Steel to ensure that the company can realise its full potential. This sale is a vote of confidence in the UK steel industry. Britain and the world will continue to need high-quality steel, and British steel is among the best in the world.
[HCWS154]
Oral Answers to Questions
Lord Sharma Excerpts(4 years, 9 months ago)
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Seema Malhotra (Feltham and Heston) (Lab/Co-op)
The Secretary of State for Business, Energy and Industrial Strategy (Alok Sharma)
Supporting low-carbon industries is central to my Department’s mission to deliver our net zero target. We are backing our ambition with action. Since 2012, coal use on the grid has fallen from 40% to less than 3% in 2019, and renewable electricity generation has quadrupled since 2010, with low-carbon electricity providing more than 50% of our total energy needs.
Seema Malhotra
In 2018, investment in acquisitions in the UK’s solar dropped to just £0.3 billion, from £1.6 billion in 2015. Should the Government not be doing more to support renewable power, in the light of the net zero target—which the Secretary of State mentioned—and the closure of the feed-in tariff, especially given that German, Italian and Spanish companies are now investing over six times more than UK companies in low-carbon technologies?
Alok Sharma
I am delighted that the hon. Lady has raised the issue of solar power, because, as she will know, solar photovoltaics is a UK success story. There has been rapid deployment over the past eight years, and more than 99% of the UK’s solar PV capacity has been deployed since May 2010. The latest figures indicate that we now have more than 1 million solar installations, or 13.4 GW, of capacity installed.
Cherilyn Mackrory (Truro and Falmouth) (Con)
In Cornwall we have some exciting new emerging industries such as geothermal energy and lithium extraction. How is my right hon. Friend encouraging those industries to produce green energy in the future?
Alok Sharma
We are putting significant funds behind the renewables sector, and, as my hon. Friend will know, we are committed to increasing our research and development spending to 2.4% of GDP by 2027. I want the UK to be a science and R&D superpower, and that is what we are engaged in.
Matt Western (Warwick and Leamington) (Lab)
Why are the Government so opposed to onshore wind energy generation?
Alok Sharma
The hon. Gentleman may have missed yesterday’s announcement about the fourth contracts for difference allocation round, but if he reads that announcement, he will see the points that we have made. The proposals that we have presented are there to help the UK achieve its 2015 net zero ambition.
Jacob Young (Redcar) (Con)
I am grateful to my right hon. Friend for his support for the onshore wind sector. What support are the Government providing to advance the hydrogen economy, and to decarbonise the hard to abate sectors?
Alok Sharma
My hon. Friend makes an important point. Hydrogen can, of course, play a key role in net zero efforts, alongside electricity. My Department is investing in innovation, with up to £121 million supporting a range of projects to explore and develop the potential of low-carbon hydrogen.
Mr Pat McFadden (Wolverhampton South East) (Lab)
One of the UK’s great industrial success stories in recent decades has been the automotive industry. What discussions does the Secretary of State plan to have with the industry to help ensure that the UK is best placed to make the transition from internal combustion engines to electric vehicles?
Alok Sharma
Within days of taking office I spoke to our major automotive manufacturers, and I have had meetings with a number of them. However, the right hon. Gentleman is absolutely right. We want to encourage electric vehicles, and we are also committed to securing investment for a UK gigafactory. Last year we announced up to £1 billion of new money to support R&D and supply chains for electric vehicles.
Julian Sturdy (York Outer) (Con)
Mrs Flick Drummond (Meon Valley) (Con)
The Secretary of State for Business, Energy and Industrial Strategy (Alok Sharma)
The Government are already increasing public spending on research and development by £7 billion over five years, the biggest increase in public funding for R&D on record. Every pound of public expenditure on R&D leverages a further £1.40 of additional private investment, generating even greater returns for the UK.
Julian Sturdy
Given that nearly 50% of the core science budget currently goes to just three cities in southern England, can the Secretary of State assure me that the increase in R&D funding will do more to favour the regions outside the south, so that in future both my city of York and other regional hubs across Yorkshire, such as Leeds and Hull, will receive their fair share for the purposes of research and innovation?
Alok Sharma
I know that my hon. Friend is hugely supportive of R&D, and that last month he opened the Institute of Technology at York College. I absolutely agree that that is part of our levelling-up agenda. We want to support centres of excellence across the country. In December last year UK Research and Innovation awarded £24 million to the University of York for a quantum communications hub, and we will set out our ambitious play strategy for R&D in the second half of this year.
Bim Afolami
Rothamsted Research in my constituency is a world-leading agricultural research centre, and we have made huge strides in commercialising that scientific knowledge, working with agritech start-ups. I am working with Rothamsted to build a new venture capital fund for agritech, working with those start-ups to incubate and develop them so that we can improve this facility, not just for Rothamsted and the region but for the whole country. Will the Secretary of State provide Government support for this work and come to see the work that we are doing at Rothamsted?
Alok Sharma
I am delighted that my hon. Friend is showing his characteristic commitment to innovation by supporting an agritech venture capital fund. As he notes, Rothamsted has a world-renowned reputation for agricultural research, and that is why UKRI has awarded £3.4 million to determine protein abundance in plants at that research institute. Either I or the Science Minister—the Under-Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend the Member for Derby North (Amanda Solloway)—would be happy to meet him to discuss how the Government can support his proposals.
Mrs Drummond
I also welcome the emphasis that the Government are placing on research and development. Will my right hon. Friend tell me what further action is being taken on the proposal for a UK advanced research projects agency, following the departmental meeting last year?
Alok Sharma
My hon. Friend raises an important point. The UK is ranked fifth in the global innovation index, and our strengths in R&D mean that we are well placed to develop a new funding body to specialise in high-risk, high-reward projects. As I have said, I am absolutely determined that the UK should be a global science superpower, and my Department is making good progress on a UK advanced research projects agency. We are engaging with a wide range of researchers and innovators, and we will set out further plans in due course.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
I welcome the Secretary of State and the Science Minister to their places. Science is critical to our national prosperity, and it is important that it should be led by them, rather than by the misfit master of Downing Street, so can the Secretary of State clarify the confusing statement from No. 10 on the European research programme? International collaboration is the heartbeat of research and development. For every £1 we put into the European Union programme, we got £1.30 back, and such funding is essential if we are to retain our place as a global science superpower, so will the Secretary of State boost UK science by confirming that we will be going for full associate membership?
Alok Sharma
Of course I want the UK to be a science superpower, and we have set out our views on expanding the R&D budget. On Europe, our EU negotiating objectives are very clear: the UK will consider participation in Horizon Europe and Euratom, but this will be part of the wider negotiations.
Geraint Davies (Swansea West) (Lab/Co-op)
The Royal College of Physicians has found that something like 64,000 people a year die prematurely as a result of unclean air at a cost of some £20 billion. In addition to continuing the research and development into electric cars, will the Secretary of State lobby the Chancellor and the Environment Secretary to continue the grant of £3,500 for clean cars, so that we can have an enforceable regime for air quality and a platform for research and development and for exports in the green industries, particularly in relation to sustainable transport?
Alok Sharma
The hon. Gentleman raises an important point. We currently have 460,000 green jobs in this country, and we want to push that to 2 million. I would be happy to meet him to discuss the specific point that he has raised.
Jim Shannon (Strangford) (DUP)
Across the whole of the United Kingdom of Great Britain and Northern Ireland, universities have played a critical role in research and development. What help will the Secretary of State give to Queen’s University and Ulster University in Belfast, as well as to the Greenmount Agricultural College, so that they can apply for funding to help research and development across the whole of the United Kingdom?
Alok Sharma
Of course, UKRI provides funding for a whole range of universities. Again, if the hon. Gentleman has specific ideas for projects, perhaps he would come forward with them.
Mr Richard Bacon (South Norfolk) (Con)
It is possible to build a house that costs nothing to heat, but that is not happening at scale at the moment. Does my right hon. Friend consider it part of his Department’s responsibilities to support research into making this more widespread, which would be hugely beneficial for the planet?
Alok Sharma
I know that my hon. Friend is an authority on the house building sector, and I had an opportunity to work with him on these issues when I was the Housing and Planning Minister. He raises an important point. We know that 15% of emissions are from housing, and we are looking to see how we can bring that down as part of the net zero target.
Christian Matheson (City of Chester) (Lab)
Nadia Whittome (Nottingham East) (Lab)
The Secretary of State for Business, Energy and Industrial Strategy (Alok Sharma)
I am delighted to have been appointed COP President. I have already held discussions with former COP Presidents, including Paris COP President Laurent Fabius. I met, among others, the UN Deputy Secretary General Amina Mohammed and Patricia Espinosa at the United Nations Framework Convention on Climate Change. Last week, together with the Prime Minister’s COP26 climate finance adviser, Mark Carney, I launched the COP26 finance strategy. My officials and I are working at pace to deliver a successful summit.
Nadia Whittome
COP26 will be the most critical talks since Paris, yet preparations so far have been beset by chaos. What response can the Minister provide to the former COP President who says that this Government are presiding over “a huge lack of leadership” on the issue. The Prime Minister has admitted to her that he does not even understand climate change. Does the Minister acknowledge the embarrassing lack of credibility and competence that the Prime Minister has shown on COP26 preparations?
Alok Sharma
I thank the former COP President for her work. The hon. Lady talks about the Prime Minister’s leadership. I can assure Members that when we were at the UN General Assembly in September, there was a huge amount of positivity around his leadership in doubling our International Climate Finance commitment. She will also know that last month the Prime Minister launched the Year of Climate Action. He is absolutely leading on this issue from the front, and the rest of us are supporting him. Let me tell her that we are absolutely determined to make sure that COP26 is a success, not just for the UK but because it matters to the whole world.
Dr Alan Whitehead (Southampton, Test) (Lab)
Every country has to submit its contribution to climate action before COP26 meets. Why is the Secretary of State preparing the UK’s contribution statement on the basis of the fifth carbon budget, which works towards a target of only 80% reduction in greenhouse gas emissions by 2050, when this House has determined that the target to be met should be net zero by 2050?
Alok Sharma
We met the first two carbon budgets, and we are on track to meet the third. Of course, I recognise the need for further action: 2020 will be a year of climate action, as I have said, and we have new plans to decarbonise key sectors in industry.
Richard Graham (Gloucester) (Con)
I congratulate the Department on its far-sighted announcement yesterday that sets the tone for COP26 by allowing onshore wind and solar projects, which have local support, to bid for funding. The announcement also floated a further pot for less developed technologies, such as tidal stream and wave, some of which the Energy Minister and I met last week. Does my right hon. Friend agree that we should pursue this opportunity to develop diverse sources of green energy and look closely at the innovative tax credit proposal, innovation power purchase agreement, to help some of these technologies get off the ground?
Alok Sharma
I make the general point that innovation is vital in all sectors of industry, but particularly in the renewables sector. As my hon. Friend will know, the proposal that we set out will help the UK to achieve its 2050 net zero ambition. Ultimately, this is about achieving value for money by driving further cost reductions in renewable electricity.
Rachel Reeves (Leeds West) (Lab)
I welcome the Secretary of State and his new ministerial team to their places. The Business, Energy and Industrial Strategy Committee looks forward to taking evidence from them, and I am sure that they look forward to that as well.
May I follow up on the question from my hon. Friend the Member for Southampton, Test (Dr Whitehead) about our fourth and fifth carbon budgets? Those carbon budgets are premised on achieving an 80% reduction in carbon emissions, yet this House has unanimously passed legislation to achieve net zero. It is neither coherent, nor showing leadership, for our fourth and fifth carbon budgets to be based on an outdated objective that this House has rejected. Can the Secretary of State confirm that we will be updating our fourth and fifth carbon budgets—and, crucially, that we will meet them?
Alok Sharma
I thank the hon. Lady for welcoming my ministerial team and me. Of course I look forward to coming before her Select Committee. Let me be absolutely clear: we are one of the first countries in the world to have legislated for a net zero target, and we have demonstrated our global leadership. We have met the first two carbon budgets and are on track to meet the third, but I take her point.
Alexander Stafford (Rother Valley) (Con)
I agree that one of the best ways of preparing for COP26 is bringing forward the new contracts for difference auctions for onshore wind and solar, which will help us to achieve net zero. Could we also take this opportunity to demonstrate to the hard-working taxpayers of Rother Valley and across the country that we can reduce their bills by going green. Can we make it a key part of COP26 to show that going green is better value for those hard-working people?
Alok Sharma
My hon. Friend makes a very important point. Offshore wind prices have dropped by over two thirds between 2015 and 2019 because of the CfD auctions. Going green is positive for the economy: GDP has grown by 75% since 1990, yet we have also managed to reduce emissions by 43%.
Stuart C. McDonald (Cumbernauld, Kilsyth and Kirkintilloch East) (SNP)
John Mc Nally (Falkirk) (SNP)
The Secretary of State for Business, Energy and Industrial Strategy (Alok Sharma)
My Department is leading the green revolution, working towards a target of net zero emissions by 2050. We are unleashing innovation and making the UK the best place in the world to start and grow a business. We are creating better corporate governance, improving employment protections and working practices, and contributing to the UK’s labour market strategy. Our preparations for COP26 are gathering pace, ramping up momentum towards a global zero carbon economy.
John Mc Nally
The recent BEIS Committee report was clear that the UK could not credibly adopt a net zero emissions target unless it invests in carbon capture and undersea storage. Does the Secretary of State plan to extend the Tory manifesto’s proposals on CCUS plants to Scotland so that we can create and deliver a clean growth structure?
Alok Sharma
I certainly agree that CCUS is going to be essential to successfully tackling climate change. The hon. Gentleman talks about innovation funding for Scotland. I can tell him that £4.8 million is supporting the development of Project Acorn, which is a CCUS project based in north-east Scotland.
Mary Robinson (Cheadle) (Con)
For over 40 years, Jim Hall Sports has been at the heart of Bramhall village. However, the future of the shop is in doubt after Nike’s decision to terminate its supply agreements with smaller independent shops. This follows years of annual rises in the amounts that independent retailers have needed to sell to hold on to their merchandise account. It is a move that is a harbinger of the end of many independent stores in an already pressurised high street market. What discussions has my hon. Friend had with sports giants such as Nike to ensure that Jim Hall’s and other independent sports shops continue to have a future on our high streets?
Rachael Maskell (York Central) (Lab/Co-op)
Coronavirus is impacting on every aspect of work, from the cost to employers to the cost to workers. The Health Secretary has said that employers should view isolation as sick leave, but the law does not state that. Even if that was so, those on zero-hours contracts and in insecure work are unlikely to have sickness cover, and statutory sick pay does not pay for the first three days, meaning that those with little means have to choose between health and hardship—an issue I raised with the Health Minister a month ago. So what discussions has the Business Secretary had with Cabinet colleagues to ensure that workers are financially protected to stop the risk of spreading coronavirus?
Alok Sharma
The hon. Lady is right: this is a very serious issue, which affects individuals and challenges businesses. Those who do not qualify for statutory sick pay, including those who are self-employed, may be able to claim universal credit or new-style employment and support allowance.
Steve Double (St Austell and Newquay) (Con)
Patricia Gibson (North Ayrshire and Arran) (SNP)
Alok Sharma
We are committed to supporting the retail sector, and we are working closely with the industry through the Retail Sector Council. As the Under-Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend the Member for Sutton and Cheam (Paul Scully), noted in reply to a question earlier, we are supporting high streets with the £1 billion future high streets fund.
Suzanne Webb (Stourbridge) (Con)
Alok Sharma
We are committed to securing investment for a UK gigafactory to support electrical vehicle manufacturing. Indeed, last week, I met Andy Street and Ralf Speth, who is the chief executive officer of Jaguar Land Rover, to discuss their thoughts on this matter. We recognise the strength of the west midlands, where £138 million has already been invested in the UK Battery Industrialisation Centre scheduled to open near Coventry this summer.
Dr Lisa Cameron (East Kilbride, Strathaven and Lesmahagow) (SNP)
Alok Sharma
The hon. Lady talks about support for business. We provide that through small start-up loans and the British Business Bank, but I or one of my colleagues would be happy to have a discussion with her on the specific issue she raises.
Sir Edward Leigh (Gainsborough) (Con)
Alok Sharma
My right hon. Friend speaks from experience, having been a business Minister in the past. We are absolutely committed to making sure that we reduce burdensome regulation and red tape, but we need to make sure that we stick with the protections that are there for employees.
Mrs Sharon Hodgson (Washington and Sunderland West) (Lab)
Alok Sharma
I will make sure that my colleagues and I have the discussion. Perhaps the hon. Lady would like to share with my office the details of that case.
Theo Clarke (Stafford) (Con)
Neil O'Brien (Harborough) (Con)
Nearly half the core research and development budget is spent in just three cities—Oxford, Cambridge and London—and yet for every pound of private investment that such spending leverages in London, we get £3 in the east midlands and £5 in the west midlands. Does the Minister agree that, if we are going to level up, we need a fairer division of spending on R&D?
Alok Sharma
As I said in answer to an earlier question, I absolutely want to see levelling up, and I want to see money put into centres of excellence around the country.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
I welcome the Secretary of State to his role. I enjoyed working with him in his previous job, and I am sure he will do a very good job in this Department. Is he aware of the dire situation of businesses in my constituency because the workshop of the world—China—has closed for business? There is no supply chain, and manufacturing companies up and down the country are in a dire situation. This is a crisis caused by coronavirus, and we have not stepped up to the plate yet to face the measure of this terrible disaster.
Contracts for Difference
Lord Sharma Excerpts(4 years, 9 months ago)
Written StatementsRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Secretary of State for Business, Energy and Industrial Strategy and Minister for COP26 (Alok Sharma)
I am today confirming details of the next round of the contracts for difference scheme, which opens in 2021. The latest round will be open to renewable technologies including onshore wind and solar, with proposals to introduce floating offshore wind. This could see millions more homes powered by clean energy by the end of the decade, and a boost for the supply chain, adding to the 20,600 jobs and the £628 million of exports each year already supported by the renewables industry.
Today my Department is publishing a consultation on proposed changes to the contracts for difference scheme. We have made huge strides to decarbonise our energy system, moving the power sector away from its reliance on fossil fuels towards a cleaner, greener future. In 2018 the collective share of UK electricity generation from renewable sources was 33%. Our target of reaching net zero emissions by 2050 requires the UK to bring all greenhouse gas emissions to net zero by 2050.
Delivering net zero will require change across the whole of society, and I am therefore more mindful than ever of the importance of meaningful engagement with local communities on the measures in this transition that affect them the most. Local communities will have a more effective voice on developments that impact them, through proposals for tough new guidance on community engagement for developers of onshore wind across Great Britain, also announced today. They will have a definitive say on whether projects are allowed to proceed. It will remain the case that no English onshore wind project can proceed without the consent of the local community.
This challenge means we will need to make the most of multiple technologies available. 2020 is the year of climate action and this decision is a crucial part of the Government plans to go further and faster in tackling climate change. In the same manner I will be encouraging other countries to increase their own ambition ahead of COP26 later this year.
Today’s consultation outlines proposals to ensure the contracts for difference scheme can support the increased ambition required, including proposals to build on our world-leading position on offshore wind by introducing floating offshore wind into the scheme as well as proposals to support our renewable supply chain to enhance productivity and increase competitiveness.
I will place in the Libraries of both Houses, copies of the “Contracts for Difference for Low Carbon Electricity Generation - Consultation on Proposed Amendments to the Scheme” which sets out further information on proposals for engaging communities.
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