UK Export Finance: Expenditure

Debate between Baroness Fairhead and Baroness Sheehan

Wednesday 27th March 2019 Lords Chamber

[Baroness Sheehan]

To ask Her Majesty’s Government what proportion of UK Export Finance’s expenditure on support for energy production was spent on (1) fossil fuels, and (2) renewables, in (a) 2015, (b) 2016, and (c) 2017.

[The Minister of State, Department for International Trade (Baroness Fairhead) (Con)]

My Lords, UK Export Finance’s support is available for UK exporters in all sectors and its provision of support is demand-led. UKEF support for energy-related exports in 2015-16 through 2017-18 respectively was as follows: 99%, 97%, and 72% to fossil fuels, and 1%, 3% and 28% to renewable energies. It supported around 0.2% of the global annual investment in oil and gas in 2016. The support has helped to sustain UK jobs in a sector that employs over 300,000 in highly skilled work and is essential to our energy security. We recognise that climate change is a key issue for the world and it remains a high issue for UKEF, but support can be provided only where there is insufficient in the private market and at the moment there is significant liquidity there.

[Baroness Sheehan (LD)]

I thank the Minister for her reply. Will she acknowledge that there is a huge inconsistency between the Government’s international climate commitments, such as the Paris agreement, the UN SDGs, the G7, the G20, the EU—the list is very long—and the general support for fossil fuel production? Does she also agree that by providing billions to the enormously wealthy oil and gas industry while giving crumbs to the renewable industry, the UK Government are backing the wrong technologies and locking developing countries into decades of fossil fuel use which we will have to abandon if we are going to treat catastrophic weather events, such as cyclone Idai, with the urgency that the thousands of schoolchildren taking to our streets are demanding?

[Baroness Fairhead]

I cannot agree that it is inconsistent. Even the IPCC report states that there is a climate change imperative but that fossil fuels—oil and gas—will continue to be a significant part of our energy requirement and will require continued investment. The key is to make sure that that transformation and pivot towards cleaner energy is appropriate.