Action on Climate Change and Decarbonisation

Chris Skidmore Excerpts

Tuesday 5th July 2022 Commons Chamber

[Chris Skidmore (Kingswood) (Con)]

I thank the Backbench Business Committee for agreeing to the debate. Hon. Members across the parties have signed up to it, including a large number of Select Committee Chairs and chairs of all-party parliamentary groups. I speak as chair of the all-party group on the environment.

Our debate comes at an opportune moment: this is Net Zero Week, and last week was the third anniversary of my signing net zero by 2050 into law as Energy Minister. The UK was the first G7 country to do so. If I had been told at the time that by COP26 in Glasgow, 90% of the world’s surface would have signed up to a net zero target, I simply would not have believed it—but I probably would not have believed that we would have a global pandemic, that Afghanistan would cede to the Taliban or that Russia would invade Ukraine.

Given all the strong headwinds, the day-to-day political events and the crises of the past three years, it is worth reflecting on the longevity of the net zero target and on what needs to be done. We need to be resilient and sustainable to achieve our greatest challenge: a green industrial revolution, with a move from petrochemicals towards a new materials economy. The challenge is massive, but the UK has shown international leadership in signing up to net zero. We were able to pass it in this Chamber because of the Climate Change Act 2008, which was enacted by the then Labour Government with the Conservative party in opposition demonstrating cross-party support for upping the target.

We need to be in a place where our financial commitments are shadowing the commitments to net zero that all political parties have made. We do not have a financial mechanism in place as we do for our carbon budgets, so I think we need to be more innovative in how we look at our budgets. Today we are discussing estimates and the budgetary cycles for our net zero commitments; I will come on to the details in a moment. Until we move to a longer-term cross-party funding solution, however, I think we will struggle, because we will be endlessly discussing the detail rather than the broader strategic approach needed to deliver energy efficiency.

Before I go into the costs in pounds and pence—the billions of pounds that are being spent—I want to make sure that we do not fall into the trap of thinking of net zero as a sunk cost. Actually, every pound spent is an investment. Net zero is a net benefit to our economy, so when we talk about the money invested by the Government, let us not fall into the trap of thinking that somehow it is going down the drain.

[Richard Fuller]

I hate to pick my right hon. Friend up on this point, because he is much more knowledgeable than I am, but how can net zero be a net benefit to the economy unless achieving net zero comes with economic benefits? What would those benefits be?

[Chris Skidmore]

The economic benefit of net zero is a wholesale transformation in our industries, our manufacturing processes and the way we think about our world. The same debates would have been had over the introduction of the car, the introduction of electricity or the introduction of gas boilers to replace log burners in every house. Going through those wholesale transformations has led not only to new jobs, but to growth.

If there was one mistake in signing up to net zero, it was using the term “net zero”. We should have called it net zero growth, because it is not about eco-warriors or extremists committing themselves to decarbonisation; it is a pathway that shows us doubling our energy use by 2050. Committing to net zero is a manageable path that will ensure that our economy continues to grow.

[Richard Fuller]

I do not want to deflect my right hon. Friend too far from the debate, but let me just pin this down. The automobile added to growth because it got people from A to B quicker than a horse and cart. The move to net zero essentially means taking certain off-balance sheet, off-profit and loss statement costs and putting them on the balance sheet or on the P&L. It will therefore act as a brake on growth unless the United Kingdom can expand our revenue opportunities, do things at a lower overall cost or shift behaviour patterns so that we can do things more efficiently. That is the piece that is missing from what has so far been said by my right hon. Friend and by the Committee on Climate Change. Those things are there, but should we not be honest with the public that without them, net zero harms growth rather than enhancing it?

[Chris Skidmore]

My hon. Friend is entirely right about one aspect of this. He mentioned efficiency and productivity. Obviously the UK faces a huge productivity challenge. We are speaking in Parliament and discussing the importance of politicians to making this energy transition, but it is already happening even without us. Private companies across the UK, and indeed the world, are saying that they would want to go to net zero even if there were not a climate crisis, because they recognise the opportunities for productivity, for disruption, for achieving better efficiencies, and for thinking differently. That is what makes net zero so important: the wholesale transformation, into the 21st century, which recognises that we cannot be dependent on unsustainable fossil fuels that will ultimately run out.

The Russian war against Ukraine has demonstrated that we cannot be held hostage by petrostates for the future. We must do something about that, and I think current messaging means that far more people support net zero. This is the year when climate change and net zero went mainstream. I think that all politicians, particularly certain politicians on my side of the Chamber, are at risk of not being on the public side of the argument. They need to understand that this has to happen, not just for the sake of the climate, but for the benefit of our economy.

[Jim Shannon (Strangford) (DUP)]

rose—

[Caroline Lucas]

rose—

[Chris Skidmore]

I will give way to the hon. Gentleman and then to the hon. Lady, but after that I must get on, because I do not want use up all my time with interventions.

[Jim Shannon]

I agree with what the hon. Gentleman is saying, but I live in an agricultural community. I live on a farm, and all my neighbours are farmers. Let me give an example of the current pressures. Last week I spoke to the farmer next door, who is not just a very big dairy farmer but also a contractor. He has, I think, eight or 10 tractors and trailers on the road, and he employs 12 people. He told me that the cost of diesel was up by at least 100%, and the price of fertiliser by 300%. When it comes to the financial equations, he is staring at stark reality. With respect, speaking as someone who agrees with the objectives put forward by the right hon. Gentleman and others in the Chamber, maybe we need a wee bit more time, because at the moment some farmers are under so much pressure to make ends meet. They are faced with costs that they have never seen before in all their life. Does the right hon. Gentleman agree?

[Chris Skidmore]

With respect, I do not. We do not have any more time. We have 28 years until 2050. It has been 30 years since we began these discussions and since the formation of the United Nations framework convention on climate change. We have seen the emission, since 1990, of 50% of all carbon dioxide emitted by the world in the entirety of human history. The argument that we need to go more slowly belies the fact that net zero is the slowest possible path on which we can travel while hopefully retaining a chance of hitting 1.5°. The consequences of not hitting 1.5°, or 2°, or even 4°, God forbid, will be more catastrophic for local businesses, and for farmers such as the hon. Gentleman’s friend.

The Po valley, normally one of the wettest areas of Italy, is now dry because seawater is flooding into the river. That is the reality of what is happening. Farmers throughout the world are, because of climate change, becoming less productive, and are becoming unable to produce the food that they once could. We need to be able to look them in the face. We, the industrialised nations that have this leadership, need to take action to ensure that all countries take this opportunity while we still have time—and that time is, sadly, ticking away.

Let me turn to the details of the estimates. My right hon. Friend the Member for Ludlow (Philip Dunne) referred to the estimate from the Department for Business, Energy and Industrial Strategy, which is on page 9 of the Library pack. It claims that

“£11.6 billion for the £400 energy bills reduction announced as part of the Cost-of-Living measures package”

contributes to the net zero target. That is simply not true. The £400 that is going out of the door to subsidise gas and other fossil fuel usage is exactly the same amount that a household would save every single year in a property that was in band C of the energy performance certificate rating. This is the economic reality of net zero. Once a capital cost investment is made, we are looking at savings, year in, year out, whether that is through the production of renewable wind or solar energy, or through energy efficiency. That is what we need to be talking about when we are discussing net zero measures, not the false creative accounting that we see in the estimates.

We should also look at the Treasury’s spending plans for net zero. My right hon. Friend the Member for Ludlow mentioned the period 2023-24, when the plan is for spending to rise to £8 billion a year, before it falls back to £7.7 billion in 2024-25, so actually we are going backwards. Of course we want to ensure that private sector uptake and investment continues; it cannot just be the state making these investments. We have to look at how we can draw in greater private sector investment, and I will come on to that in a moment. The reality is that if we have such balance sheets without having a longer-term sustainable programme for delivering net zero, we will always have these measures.

We need a coalescing target, just as net zero-ers have been able to coalesce around a single target. When I was Science and Research Minister, we had a target spend of 2.4% of both public and private gross domestic product on research and development by 2027, although we may fall short of that. Other countries such as China are going to hit 3.5%, and countries such as Israel are already about to hit 5% of GDP, both public and private, on R&D. Yesterday, the Prime Minister talked about spending 2.5% of GDP on defence by 2050. Where is the GDP target figure for net zero? We should set ourselves a far-reaching goal, and commit ourselves to that spending, both private and public, to demonstrate the investment that is needed for net zero.

There are far too many small pots of funding—we have talked about the green homes grant—and that creates a concertina effect, whereby people apply for a funding scheme, but we do not have the skills to deliver the product that is needed. As a result, these programmes ultimately do not achieve the targets they set out to achieve. I believe that moving away from small pots of funding to longer-term plans through which we can finance net zero should be the way forward. To deliver that, we should think about setting a net zero finance target for the UK every year, and on estimates day, we should talk about that, rather than using false figures in our accounting to claim that we have delivered an additional budgetary impact on net zero.

--- Later in debate ---

[Bim Afolami]

I hope so.

This debate comes at a time when there will be significant problems for millions of ordinary people up and down this country, and indeed all over the world, in heating their homes and getting around. It is an opportune time for us to have this debate about decarbonisation. I should start by saying that I strongly support not only the Minister on the Bench, the Under-Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend the Member for North East Derbyshire (Lee Rowley), who I know is a highly capable and effective Minister, but the Secretary of State, who is also that. The Minister is smiling. I am being nice to you, Minister. Indeed, it is a very effective Department that has had a huge amount to do and, broadly speaking, it is doing a very good job.

However, the context of oil and gas prices rising is a very complicated one. If the House would indulge me, I think it requires not just the Government, or this House, but international markets and other countries to think about decarbonisation differently. Oil and gas prices may rise structurally over the coming years due to an increase in demand from emerging market countries in particular. Many in the City of London, and many investment banks and energy analysts, think that will occur. If it does happen, in the short term, there will be a significant problem for millions of people across the world, including in this country.

The way to deal with that is to increase the pace of decarbonisation, and the pace of getting renewable energy used and in the ground. Indeed, that helps our energy security as well. However, at the same time, we must not demonise the major oil and gas companies, which have the skills, wherewithal and capital to help us to achieve that. Therefore, subtle and effective Government policy is required, working internationally with our partners, to ensure that we can give these major energy companies the confidence to invest in decarbonisation. They have the engineers, the capital and the know-how all over the globe to help us achieve that aim. I speak as someone who does a lot of work on these issues, as the House knows. There is no point in our demonising anybody who holds shares in an energy company, gluing ourselves to famous paintings or doing that sort of thing. All that happens is the price of oil and gas continues to go up, which makes people’s lives harder. There may well be a backlash to the decarbonisation agenda if people perceive that it is not something that will ultimately help their lives and the economy, and help them to heat their home.

[Chris Skidmore]

Obviously we will discuss the Ways and Means motion on the Energy (Oil and Gas) Profits Levy Bill, or so-called windfall tax, later, but does my hon. Friend agree that companies such as BP and Shell that have agreed to become net zero companies should put their money where their mouth is and maybe establish a net zero fund? Such a fund could be tapped into over a long period to help to pay for some of the energy efficiency measures, demonstrating that it is not just green levies that will pay for additional net zero support mechanisms, and that we can leverage in private finance. Let us look to create a fund that could be financeable over a long period, given that we are holding these companies to account for their net zero commitments.

--- Later in debate ---

[Richard Fuller (North East Bedfordshire) (Con)]

It is a pleasure to follow my hon. friend and neighbour, the Member for Hitchin and Harpenden (Bim Afolami).

When Parliament agreed in June 2019 to achieve net zero by 2050, it was probably the most expensive, uncosted piece of legislation that has ever been passed by this country. It was a “Star Trek” piece of legislation, asking the country to boldly go where no one had gone before. These estimates start to frame how much the costs will be—costs for taxpayers, costs for individuals, and costs for business. As we look at those things, we need to be pragmatic and not dogmatic about achieving net zero. Too often we talk about the great opportunities of achieving net zero without really being honest about whether they are opportunities or just a shifting of resources, which, when it comes down to economics, has no net benefit at all.

As I was saying earlier, the contribution of net zero to this country’s growth is highly questionable. Essentially, we are taking a cost, which we ignored in the past, and saying that we now need to take it into account and eliminate it as a cost in our production. Growth does not arise from that. Growth arises when we can do the same thing for a lower cost—through productivity improvements. Growth can arise when we increase the revenues, particularly for our own country. That could be achieved through import substitution, or it could be achieved through the creation of new green technologies that we can export to other countries. However, it is not guaranteed just because we have passed a piece of legislation that says, “Let’s all achieve net zero by 2015.” It can be achieved by changing the ways that we do things into ways that are more productive. Finally, it can be achieved by reducing the costs of uncertainty, the most obvious of which when it comes to energy is hedging.

None of those things is guaranteed. As has been said, children and schools are enthusiastic about this, but that is because they are taught about net zero and because, quite naturally, young people have an interest in all things natural, such as the environment, diversity and the planet. Ultimately, though, the costs are what will matter in terms of whether and how we can achieve that ideological and scientifically justifiable goal.

From my point of view, the most important thing for us as a country is that we need to work with the pace of innovation and be cautious about trying to exceed the costs of innovation. That is because when we try to move more quickly for a policy goal, ahead of the way that innovation is enabling us to get there, it means additional cost burdens on households and on taxpayers.

In the estimates, it will be interesting to hear from the Minister about the extent to which he appreciates those goals and the extent to which the Government are trying to increase the pace of innovation. I am talking not just about providing subsidies and support for people to change the way they do things, but about the way the Government are providing incentives for innovation to move at a faster pace.

[Chris Skidmore]

The Government also need to set a number of targets for the production of hydrogen and for the capture of carbon dioxide as part of their 2030 plans and the net zero strategy Build Back Better. Talking to HyNet North West, it is clear that it believes that it can go further, and it wants to call on the Government to double its opportunities to capture carbon dioxide. It wants to increase the current allocation of hydrogen from 1 GW to 2 GW. It would also like to see a doubling of the megatonnes of carbon dioxide captured per annum.

Does my hon. Friend believe that the Government should give HyNet, which says that it has the companies ready to go, the opportunity to double the amount of hydrogen and double the amount of carbon dioxide that it can capture now, because it believes that it can do it? I agree with my hon. Friend that we should follow the innovation.

[Richard Fuller]

I appreciate my hon. Friend’s example of innovation, which could assist.

I wish to focus now on the particular issue of decarbonising home heating. We heard from my right hon. Friend the Member for Ludlow (Philip Dunne) in his opening speech that that is essentially a £20,000 cost for a household when it is combined with insulation. He quite rightly made the point that that is beyond almost every household. I think the hon. Member for Bristol North West (Darren Jones), the Chair of the Select Committee, also noted that it is beyond the expectation of the ability of households to pay for it.

We also know that the economies of scale when it comes to technologies for decarbonising home heat are challenging, because the technology is already established and therefore the production economies of scale are likely to be less than in other areas, and because a large part of the costs are in the service delivery, which is people. People efficiencies are harder to capture than production efficiencies.

Not only is the up-front cost high for everyone, but it means that, without Government action and direction, we would end up with certain households doing it that might not necessarily be those that make most sense for achieving our goal. I say this as a Conservative who believes in free choice, but if we want to achieve that goal, we have to own up to the fact that relying on individual choices by individual households to achieve the decarbonisation of home heating will mean that the overall cost to society of achieving that goal will be substantially greater than going through a process that has at least a very significant part of a community-based initiative.

Again, my right hon. Friend the Member for Ludlow was right to point to the issue of social housing. I am eager to see us move forward; we have a Bill coming and I think there is an opportunity to look at neighbourhood plans, which are about planning for our local communities. Maybe there is an opportunity there to put forward some of the suggestions for community decarbonisation of home heating. I hope that hon. Members who are interested in that will let me know, because I am thinking of tabling an amendment that would make that part of the way that we ask local communities, through the planning process, to start thinking about how they achieve the decarbonising of home heat on a community basis.

I must also urge the Government to come forward and say how they will harness patient capital to solve the economic equation of decarbonising home heat. The equation is that there is a big up-front cost and then the benefits accrue slowly each year, ideally through lower heating bills and certainly through less exposure to the volatility of carbon-based fuels. What are the Government going to do to structure a programme that can attract patient capital to do that? That is the sort of financial profile that pension funds invest in all the time.

Neighbourhood plans, a community-led approach and attracting patient capital into those community programmes seem to me to be one way in the estimates to try to get an approach to net zero, if I may coin a rather cheap phrase, at net profit to the British economy. Achieving net zero at net profit is a way to get a pragmatic answer to the idealistic but uncosted goals that this Parliament put in train in 2019.

--- Later in debate ---

[Kerry McCarthy (Bristol East) (Lab)]

I am mightily relieved to see that the Minister is still in his place. I hope he manages to hang on until 7 o’clock; he might find he is the last man standing on the Government Front Bench. If he does want to tell the House about his resignation when his time comes, rather than tweeting it, I am sure we would be delighted to be the first ones to know. There are times when we speak in this Chamber and we feel that the eyes of the world are upon us. I think it is fair to say that this is not one of those occasions, but it is an important debate, and I thank the right hon. Member for Ludlow (Philip Dunne), the Chair of the Environmental Audit Committee, for securing it.

I wish there was a bit more to discuss. As we have heard, last week the independent Climate Change Committee delivered its annual verdict on the Government’s climate strategy, or what there is of it. I think the Chair of the Select Committee let the Government off a little lightly in his quote from that report, which was an absolutely damning read. It talked about major failures in delivery programs and stated that

“we are not seeing the necessary progress”,

and

“the Government is failing in…its implementation”.

It also said that the current strategy will not deliver net zero. The committee concluded that the Government have credible plans for achieving only 39% of the emissions reductions required. This comes less than a year after COP, when we still hold the COP presidency and ought to be showing international leadership.

It is not just the Climate Change Committee saying that the Government have fallen short. The Public Accounts Committee report published at the beginning of March said that the Government still have

“no clear plan for how the transition to net Zero will be funded”,

or

“how it will…replace income from taxes such as fuel duty…and…has no reliable estimate of what the process of implementing the net zero policy is actually likely to cost British consumers, households, businesses and government itself.”

It went on to say that the Government have

“too often pursued stop-start strategies which undermine confidence for business, investors and consumers in committing to measures which would reduce carbon emissions, especially when some green alternatives are still significantly more expensive than current options.”

We heard that from a few speakers. I think the hon. Member for Hitchin and Harpenden (Bim Afolami) talked about how businesses need the confidence to be able to invest, how they need a sense of direction from the Government and how they need to know that they will be backed up.

We heard from the Chair of the Environmental Audit Committee that the global situation requires a rapid recalibration of the Government’s strategy, and that waiting for the right technology to turn up is not a strategy in itself. Again, that is a plea for a clearer sense of direction from the Government. He said—I hope I am quoting him right—that the Government prefer to delay substantive action to a future date, post election. We might find that comes a bit sooner than we were expecting when he made those comments, but let us see. I would certainly say that the time for action is now.

We have seen that day-to-day spending in BEIS has increased by 71% since the last supplementary estimate. That has mostly been driven by this increase of £11.6 billion for the energy bill support scheme. As has been said by several people, including the right hon. Member for Kingswood (Chris Skidmore) and the Chair of the Environmental Audit Committee, this is not a net zero measure unless it is linked to ending investment in fossil fuels, which we know it is not. I expect that we will shortly hear criticisms on that front. It was quite damning how the right hon. Member for Kingswood said that it was simply not true to say that this is a net zero measure. He talked about using false figures in our accounting; I thought those were strong words, but they are true. Once that figure is discounted, we see that little money is going on the most important measures that should be being put in place to deal with emissions. Several people mentioned the need to insulate and retrofit homes, which would simultaneously slash emissions and bring down energy bills. That should have been an urgent national priority as energy costs soared. As has been said, if we invested in that, it would bring down energy bills year on year.

[Chris Skidmore]

When it comes to future measures—I am conscious that some of these schemes were announced by a Chancellor who has resigned in the past half hour and is no longer here to defend them—we need to introduce the concept of conditionality. It has been done in France and other continental countries but not in the UK, and it means that an investment is made on the condition that it is seen through in future green investment.

I pointed out that the £11.6 billion is money out of the door with no consequential effect on delivering on net zero. That money—£400 a person—could have been delivered on the condition that it was later spent on green home improvement measures using a voucher scheme. We need to think carefully about how we deliver those schemes in future so that we can benefit people in a cost of gas crisis—it is not just a cost of living crisis—and see real change on the ground.

[Kerry McCarthy]

The right hon. Gentleman is correct. We should be looking at long-term solutions, not short-term fixes. When the next rise in energy bills comes in the autumn, people will quickly discount that money. They will obviously be grateful to have had some money to help towards their bills, but they will not feel as though they have benefited a lot. Insulation, however, would mean that they had something to see them through future years.

As I said, housing should have been a priority. Properly retrofitting homes would significantly reduce the 20% of UK emissions that come from buildings, as well as cutting bills. That is why Labour has pledged £6 billion a year to retrofit 90 million homes in a decade. My neighbour, my hon. Friend the Member for Bristol North West (Darren Jones), talked about a national street-by-street programme. I would welcome that, provided that it started in Bristol East rather than Bristol North West—we will work our way round to him eventually. If Bristol is getting some money for that, I want to be first in the queue.

There are other examples where the now ex-Chancellor seemed keen to claw back green spending wherever he could. The plug-in grant for electric vehicles was scrapped just weeks ago. The planned landscape recovery fund to rewild our countryside was recently gutted from £800 million a year to £50 million over three years. In these estimates, we see a £76.8 million reduction in funding for carbon capture and storage, despite the Climate Change Committee highlighting concerns last week about the Government’s support for the sector. As the Chair of the EAC said—I seem to be quoting him a lot, which is a tribute to his excellent speech—CCS is not a magic bullet. We are simply not there yet; there is huge potential, but we cannot magic it out of thin air. There has to be a strategy to get us into a position to make use of it.

There are many things that the Government could do if they were worried about the costs of going green. They could scrap the plans to provide a huge tax break for investment in fossil fuels in the upcoming Energy (Oil and Gas) Profits Levy Bill, which we will debate next. The way that that is envisaged at the moment means that the Government will provide 20 times more in taxpayer incentives for investment in fossil fuels than in renewables. Although we are flattered that the Government eventually saw sense and adopted our idea of a windfall tax, the way that they are going about it is all wrong.

The Government are simply not going far or fast enough to tackle the climate emergency. There has been no investment in the gigafactories that we desperately need to boost production of electric vehicles in the UK. That is about not just producing batteries here but ensuring that we retain the car manufacturing that is essential to many of our communities. That investment would also create 30,000 good green jobs in the process.

The installation of EV charging points is still moving at a snail’s pace, like some of the cars, with only 830 public chargers installed last month and the need for at least 270,000 more by 2030 to keep pace with demand. It is good that people are choosing to make the shift, but they need support from the Government to get from A to B; anyone who has an EV knows the perils of trying to find a public charging point when they need one. Energy intensive industries such as steel are still crying out for investment to help them to make the transition to low-carbon manufacturing.

The Government seem to be running scared of investing in climate action. They can only see the cost and they are blind to the opportunities. The Minister should remember that the Climate Change Committee estimates that even without factoring in the benefits of green growth or the impact on public health, reaching net zero will cost less than 1% of GDP. Another 0.5% of GDP could be saved by moving away from costly fossil fuels rather than fracking for more, as the Department appears determined to do. Wise investment would lead to lower bills for consumers, good green jobs and sustainable economic growth. It is not just right to tackle climate change; it will get us out of this cost of living crisis.

Labour will treat this issue with the seriousness it deserves by investing £28 billion a year to tackle the climate emergency, grow the green economy and get cheap green technologies into people’s hands. People want to upgrade their homes to bring down bills, they want to buy electric cars that will be cheaper to run as well as more environmentally friendly, and they want to make greener choices about what they consume, but the Government have to step up to support them in making this transition. That means recognising the urgency of the situation, putting climate action at the heart of every spending decision—on homes, energy, transport and more—and doing a lot better than the Government are doing now.

Nuclear Energy (Financing) Bill

Chris Skidmore Excerpts

2nd reading
Wednesday 3rd November 2021 Commons Chamber

[Chris Skidmore (Kingswood) (Con)]

I welcome the Government’s action to introduce the regulated asset base funding model for the financing of new nuclear power plants. As a former energy Minister, and indeed a former science Minister twice, I was fortunate enough to have the opportunity to see at first hand the brilliant services that our nuclear energy industry provides, despite the many compounding hardships that it faces.

Nuclear power currently provides just under 20% of the UK’s energy needs, but almost half that capacity will be retired and lost by 2025. For the UK to achieve its net zero obligations and beyond, expanding our nuclear energy fleet will be paramount as it provides emission-free energy without the need for the wind to be blowing or the sun to be shining. The case for nuclear energy as a clean source of power should be evident. It may have done more for decarbonisation and reducing carbon emissions in the past 70 years than any other industrial sector.

[Deidre Brock (Edinburgh North and Leith) (SNP)]

The right hon. Member speaks of the baseload and the constant flow of energy from nuclear. Does he support the tidal energy efforts being made in Scotland? Would he support far more investment in that?

[Chris Skidmore]

I believe that we do not have a choice. We must look at every form of renewable energy, nuclear energy, carbon capture and storage and hydrogen to reach net zero. We cannot make the perfect the enemy of the good. Equally, in looking at how to decarbonise, there are no good and bad actors; the most important thing is outcomes. We have a target set for 2050 but cannot ignore that we wish to reduce our carbon emissions now. I therefore welcome any technology that can achieve that sooner rather than later.

[Bob Stewart (Beckenham) (Con)]

My right hon. Friend knows a lot about these things. What percentage of our energy does he estimate will be produced by nuclear power stations by 2050?

[Chris Skidmore]

That depends on the potential for innovation for the future. We have an energy crunch coming down the line with perhaps just a single nuclear plant open by 2030 and, at the same time, we will move from existing nuclear fission reactors through to small modular nuclear reactors, advanced modular nuclear reactors and, ultimately, fusion.

As science Minister, I assigned Government investment for the spherical tokamak for energy production units. We need certainty and a clear strategy for where the nuclear pathway is going beyond the existing reactors and to front-load that investment now. I will come to why the RAB model is so important as it allows that front-loading.

As I mentioned, nuclear power has resulted in an annual saving of 22.7 million tonnes of CO₂, the equivalent of taking one in three cars off the road. The Government’s proposal to adopt the regulated asset base funding model for nuclear power is bold and ambitious, but it is also needed. The beauty of the funding model is that it inherently encourages a wider range of private investment in new nuclear projects, reducing the UK’s reliance on overseas funding.

As it stands, developers are forced to provide the finances for construction up front and begin receiving revenue only when the station starts generating electricity. Even in the best of times for energy markets, which we certainly are not in now, that lack of certainty diminishes how investable nuclear power projects are. As we have seen, sadly, with the nuclear projects at Moorside and Wylfa, our current funding model is simply not fit for purpose; 5.8 GW of nuclear energy, just over half our current supply of nuclear power, was lost directly because funding could not be secured. Those locations have both been described as highly desirable sites for new nuclear power plants, but even after the Government offered to take the equity, provide all the debt finance and back a revenue-stabilising mechanism, private investors still had to walk away.

[Jonathan Edwards]

I do not question the hon. Gentleman’s expertise or knowledge on this issue, but perhaps he can help me out. From the Minister’s letter, and from what the hon. Gentleman himself has said during the debate, we know that 12 of the UK’s 13 current nuclear reactors are scheduled to close by 2030. The main argument for large nuclear is the baseload protection it gives that other technologies cannot provide, but it seems to me that it is highly unlikely, even with this new financing model, that a large new nuclear plant will be built before 2030. The question that arises from that for me—I admit that I am not an expert—is, how will that baseload be covered while we are waiting for the new large nuclear plants to be built?

[Chris Skidmore]

That is a very important question. It is not just 2030 that I am concerned about, but 2025. Nuclear currently accounts for 18% of electricity generation. The current closure rate of plants means that by 2025, nuclear will go from 18% down to 10%, so we will lose 8% of energy supply in the next three years alone. We will not be able to cover that gap; the hon. Gentleman is absolutely right. We are behind the curve here, which is why the Bill is vital. No one should vote against it tonight, because to do so would simply be to kick the can further down the road.

Nuclear also provides a fantastic opportunity to level up. Think of the jobs that it can provide: no one who lives near an area in which there is a nuclear power plant is against nuclear. Hinkley C in Somerset, relatively near my constituency, provides 30,000 jobs, of which 70% are local. It offers enormous potential for creating a sustainable pipeline of skill and talent for the future.

On the RAB funding model, others have asked during the debate, “What about other technologies?” The RAB model has also been established and received strong support from investors in other large infrastructure projects. Indeed, RAB-based funding has provided the funding mechanism for numerous financings of offshore wind transmission cables and infrastructure, as well as Legal & General’s financing for Mutual Energy’s Gas to the West gas network expansion project in Northern Ireland.

Yet the real advantages of this new funding system will come in relation to emerging innovative nuclear energy technologies. As anyone who is interested in reaching net zero will be aware, plans to develop third-generation nuclear reactors are well under way, with British companies such as Rolls-Royce leading the way. Some of those innovations—I have mentioned small modular nuclear reactors—have been designed to be able to be mass-manufactured at one site, powered by an SMR nuclear power plant, and then shipped domestically or internationally, massively reducing the cost. That brilliant technology will have the added benefit, I believe, of helping to power hydrogen electrolysers, which are highly more efficient if they are given a supply of heat. In turn, those will be able to decarbonise sectors that are the most difficult to decarbonise—the hard-to-abate groups that energy cannot touch, which need liquid fuel. The potential for nuclear heat and energy to generate hydrogen I think has the potential, in turn, to generate a clean energy revolution.

Those exciting technologies look to radically shake up the international energy supply system, but it is only through an adequate and appropriate funding model that we can take full advantage of their possibilities. As we have seen with the recent rise in global energy prices, energy security must be at the forefront of all our minds when debating policy. One of the best ways to avoid the situations that the world currently faces is by having a diversified energy supply, nuclear included. Additionally, it is only through the correct development and deployment of innovative technologies that we can both secure our energy supply system and achieve our net zero obligations. Net zero by 2050 is the ultimate mission for our generation and one that we must achieve as quickly, efficiently and effectively as possible. The RAB funding mechanism provides a clear path for nuclear to play its part in that mission.

Space Debris

Chris Skidmore Excerpts

Wednesday 14th July 2021 Westminster Hall

[Chris Skidmore (Kingswood) (Con) [V]]

I beg to move,

That this House has considered space debris.

It is an honour to serve under your chairmanship, Mr Dowd. If the covid pandemic has taught us anything, it is that we can no longer take the unexpected for granted. The lesson that we must learn is that we need to look elsewhere for other seemingly unfathomable scenarios, recognising that they sadly may come true one day. Already the pandemic has hastened our awareness of other looming catastrophes. Heat domes over Canada and the western United States, combined with rapid glacial Arctic ice melting, have demonstrated the need for urgent action on reducing carbon dioxide emissions, but where else might the next catastrophe occur?

One answer, I believe, is staring straight above us in the skies. After being reshuffled out of Government, I found myself promoted to spending much more time with my three-month-old daughter. Obviously, my working patterns were slightly different, and I would often find myself at three o’clock in the morning comforting a baby in our downstairs living room, and staring up at the skies under our conservatory roof. Without sounding too middle-aged, I do not remember ever being able to spot so many shining pinpricks of light, each one a satellite making its swift but steady path across the Earth’s orbit, when I was a child.

It turns out that my early morning thoughts were not just the product of sleep-deprived delirium. We are living in a boom age of satellite production. According to the United Nations Office for Outer Space Affairs, UNOOSA, as of April 2021 there were 7,389 satellites in space—a 20% increase from April 2020. That is welcome news in terms of telecommunications, but who pays—not for the satellites themselves but for the risk that the proliferation of such projectiles poses for the sustainability and, indeed, future viability of the Earth’s orbit?

I believe that this is a threat that we must wake up to before we find ourselves in a catastrophe that has the potential to cause equal, if not worse, economic devastation than the pandemic. By way of a history lesson, the question of who is responsible for what we send up into space has long been debated. The Magna Carta of space law, the outer space treaty, was signed at the 1,499th plenary meeting of the United Nations General Assembly on 19 December 1966. For the most part, it is the primary piece of international legislation that guides how nations operate in space. Within that landmark text, article VI states:

“Parties to the Treaty shall bear international responsibility for national activities in outer space, including the Moon and other celestial bodies, whether such activities are carried on by governmental agencies or by non-governmental entities, and for assuring that national activities are carried out in conformity with the provisions set forth in the present Treaty.”

Therefore, national Governments are now, as then, held responsible for the activities of companies, public or private, that operate in space, yet this has not prevented an accumulation of dangerous space debris, which is littered across our orbit and for which no one seems to have been held accountable.

Currently, there are an estimated 34,000 objects greater than 10 cm in diameter in orbit, 900,000 objects of between 1 cm to 10 cm in diameter in orbit, and a further 128 million objects of between 1 mm to 1 cm in diameter in orbit, and all are capable of seriously damaging or destroying vital satellite equipment. As the British astronaut Tim Peake observed, it takes only an object the size of a paint fleck to crack the windows on the international space station. Those numbers are beside the number of defunct and non-operational satellites—currently 2,900—that have sadly led to collisions, such as the Iridium-33 collision with the derelict Kosmos-2251, which caused a significant dispersal of debris. We also have the case of the Ecuadorean NEE-01 Pegasus satellite, which collided with a discarded Soviet fuel tank in 2013, seriously damaging that nation’s only satellite. Those are just two of an estimated 560 satellite break-ups, explosions, collisions or anomalous events resulting in fragmentation.

The risk of a collision in space is still low, but conjunction warnings and collision avoidance manoeuvres are becoming commonplace for satellite operators and the international space station. Most recently, in March this year, the EU’s Galileo satellite GSAT0219 was forced to perform a collision avoidance manoeuvre in response to the predicted impact of tracked space debris, which turned out to be an old Soviet rocket that had been in orbit since 1989. The international space station has been forced to conduct 27 collision avoidance manoeuvres since August 2020, with manoeuvres becoming ever more common. Apparently, it is not the harshness of space, the distance from their families or even illness that is cited by astronauts on the ISS as their greatest fear; it is getting hit by a piece of untracked debris flying past them at 40,000 km per hour.

The threat of space debris is also apparent in the increased militarisation of space and the testing of anti-satellite weaponry, most recently by the Russians and Chinese. When we talk of military satellites, we automatically think of cold war-era spy satellites, but anti-satellite weaponry has now advanced from the realm of star wars under Reagan to become a very real and dangerous issue. In 2007, China’s intentional destruction of the Fengyum-1C decommissioned weather satellite through the use of a ballistic missile was a success, because the satellite operated at the same height as many American and Japanese satellites. It was destroyed, but it caused a massive dispersal of debris, which is still a problem today. That single explosion has accounted for 10% of all catalogued debris. Should anti-satellite battle strategies continue to be developed, we will fail to prevent Kessler syndrome, whereby an exponential splintering of satellite debris leads to further collisions, from developing.

That concern is not simply confined to missiles, as Russian satellite operators have engaged in anti-satellite proximity operations, positioning satellites in harmful trajectory of critical western satellites. In 2014, a Russian satellite named the Luch was purposefully moved into proximity to both Italian and French military communications satellites. Additionally, in July 2020, the Russian military satellite Kosmos-2543 released a high-speed projectile from its main body, causing the American Space Force to declare that the activity was

“consistent with a test of a new anti-satellite capability.”

Although the projectile failed to collide with another satellite, the capability to shoot down satellites from satellites has now been proved feasible. The test occurred after an April 2020 test of the Russian Nudol system, which is designed to engage satellite targets in low Earth orbit. More recently, from July 2017 to December 2019, the Chinese satellite SJ-17 made a series of manoeuvres with other Chinese satellites that took them past the UK Ministry of Defence’s Skynet 5A satellite.

The issue is important because it puts everything, from our military satellites to our global navigation satellite system services and environmental Earth observation satellites, in danger. Manoeuvring satellites around others is exactly the kind of misguided bravado that could cause a cascade of debris to form and then cut off our use of satellites—and future satellites—for our low and medium Earth orbits. Unfortunately, there is painfully little international agreement that prevents nations from recklessly using their satellites or even equipping their satellites with weapons that are not weapons of mass destruction or nuclear weapons.

The Russian Government’s choice to fire a projectile from Kosmos 2543 proves that the interpretation of article IV of the outer space treaty, which prevents nations from putting WMD or nuclear weapons into space, applies only to WMDs or nuclear weapons. We have a gap in the treaty.

As so often in international affairs, we have a problem that is growing in a less than adequate direction from current international treaties, and a global response that can only be described as lacking. Yet that has begun to change, as the recent G7 leaders’ summit in Cornwall proved with a joint statement on space debris, giving some much-needed leadership in an area that is vital for the continuation of human development, both in space and on Earth. In the joint statement, G7 leaders pledged to promote a

“safe and sustainable use of space to support humanity’s ambitions”.

The statement went on to

“recognise the growing hazard of space debris”,

highlighting the fragile nature of our planet’s upper atmosphere and promoting the desire for nations to co-operate in the safeguarding of space. Additionally, the G7 agreed on the importance of continued international collaboration and the promotion of both public and commercial efforts to clean up our low and medium Earth orbits.

Increased awareness, investment and specific regulation will be vital for a path forward to prevent the increase in space debris, removing what is currently a problem, and preventing irresponsible satellite activities in future. The joint declaration from the G7 was a strong step forward towards building strong space regulation and fostering the continued international partnerships between nations and private enterprises. However, more must be done to hold all space-capable countries and companies accountable for the shared good of our Earth orbit.

This problem will continue to be more apparent as the number of satellites, space missions and even commercial flights to the edge of space increase. I am sure we were all at the edge of our seats on 11 July last week when Sir Richard Branson came home after successfully visiting the edge of space during Virgin Galactic’s first commercial flight. I congratulate Virgin Galactic on that achievement. Although that milestone should be celebrated, Virgin Galactic’s mission success highlights the increased interest and ultimately the increased accessibility of space.

Additionally, missions to provide satellite broadband to the world, including the 3 billion people who do not have broadband access at the moment, by companies such as SpaceX, OneWeb and the many state-owned Chinese aeronautical companies, will require the deployment of thousands, if not tens of thousands, more satellites. Those mega constellation projects have already begun, as there was a 28% increase in satellites from 2020-21.

SpaceX’s Starlink constellation has already launched 1,730 satellites as of May 2021, with a total of 42,000 planned over the next few decades. Truly, we are living in a second space age of which we can all be proud, and thankful for the development of this remarkable technology, but the dramatic and continued increase in the number of satellites being launched means that we need to have an awareness of the increase in the amount of space debris and the real danger that it will pose to our modern world.

Many of the satellites that we rely on provide services for GNSS, also known as GPS. That is classified as an invisible utility, and for good reason, because without GNSS nearly every branch of critical national infrastructure would be in obvious jeopardy. Communications, emergency and hospital services, finance and transport all rely on GNSS to operate smoothly, and all rely on satellite services.

To put the importance of GNSS into perspective, a 2017 report by London Economics calculated that the economic impact on the UK of a five-day disruption to the network would put thousands of jobs at risk and cost around £5.2 billion—a major disruption to every aspect of modern life not even being counted in that figure. A disruption of that magnitude is not out of the question, and we need to face the reality. With more satellites comes more debris, and more opportunities for a serious accident to occur, as space travel becomes commercialised and access to space becomes ever more possible.

Should we continue largely to ignore the issue of space debris, we risk developing a situation where the upper atmosphere becomes completely unusable—that Kessler syndrome that I mentioned of an hypothesised scenario, where due to the amount of junk in space, pieces begin to collide with each other on a far more regular basis, causing a cascade of debris, effectively cutting off use of our lower orbit.

This growing number of satellites are becoming dependent on support technologies to avoid not only the increasing debris we are inevitably creating but other satellites. According to Holger Krag of the European Space Agency, today 15% to 20% of all satellite-avoidance actions involve manoeuvres away from other active satellites. That means that there is an increasingly established process of satellite operators contacting each other and co-ordinating actions to avoid collisions.

All that takes time and resource, contingent on fuel levels, satellite response times and successful co-ordination from operators. Because there is no universal system, such as an air traffic control for satellites, we are wasting fuel, decreasing response times and lowering the lifespan of satellites. International standards and agreed regulations will be incredibly important, moving forwards into this new space age. Thankfully, the UK, even though it is not a tier one space power, much as I would like it to be higher up that agenda, has been leading the way on space debris, by using our brilliant diplomats to push for an updated international legislative framework, aimed at modernising space law, and creating consistent legal frameworks that will help create sustainable space development.

The UK was among the first international partners to join the US-led Operation Olympic Defender, an effort to build closer co-operation with allied nations in securing and protecting space. The UK has also worked with the UNOOSA to encourage the development of space debris removal technologies. In addition, space domain awareness is a critical enabling capability, if the UK is successfully to manage the threat posed by space debris, including its removal.

The UK military recognise the need to understand this rapidly evolving and dynamic landscape in order to protect, defend and regulate the UK’s space interests, and to mitigate the threats posed to the UK’s assets and critical national infrastructure, and to play its part in assuring safe and responsible behaviour in space.

In January this year, a new space domain awareness software capability, known as Aurora, went live for operations and was successfully deployed into the Defence Digital’s MOD Cloud ICE. The software was designed, developed and deployed by CGI in partnership with the Royal Air Force and the UK Space Agency, as part of work to enhance the current UK Space Operations Centre.

Space is inherently dual use in nature, with congestion and debris an issue for both military and commercial satellite operators alike. The UK has a long-standing heritage in space domain awareness, and arguably has one of the best space domain awareness sensors in Europe in the form of RAF Fylingdales. Current and planned defence radars can contribute to space domain awareness through the inherent sensitivity, range resolution and discrimination capabilities. They benefit defence and wider Government objectives, and should be progressed at pace. RAF Fylingdales is also renowned for its whole-force approach to space operations, working with industry partners to develop this capability. British company Serco has been working with the RAF and now Space Command to deliver the RAF Fylingdales orbital analysis servers and sensor support for over 55 years. Serco is now exporting this heritage and skillset to support US Space Command with deep space surveillance.

Commercial space operators also have a large part to play, and a vested interest, in creating a sustainable space environment. Last week, in a speech at Space-Comm expo in Farnborough, which I attended, Rajeev Suri, chief executive officer of Inmarsat, set out a vision for

“an unrelenting commitment to sustainability in space”.

Mr Suri also highlighted the need to pay close attention to the potential risk of collision and the growing challenge of atmospheric pollution posed by deorbiting satellites, particularly during the recent rapid expansion phase of mega constellations, which I have spoken about.

The UK already has fast-growing capability in debris removal technology. The UK team at Astroscale are leading the mission operations for the world’s first commercial debris removal mission, ELSA-d, which is currently in low Earth orbit, preparing for the capture of a dummy defunct satellite, using a magnetic-capture docking-plate mechanism, in the next few months. This mission will be a milestone moment for the deployment of debris removal services, including Astroscale’s next phase partnership with OneWeb, via the European Space Agency Sunrise programme, to develop the technology to remove multiple pieces of space junk in a single mission and to demonstrate the commercial viability of a future service, ELSA-M.

At the same time, the UK is witnessing a surge in start-up space companies that are placing sustainability and environmental concerns at the heart of their missions. For example, Black Arrow, which plans to become the first net-zero launch company, is investigating the innovative use of new, environmentally friendly propulsion fuels and recoverable and reusable rocket launchers, to demonstrate to the space industry that we can chart a new net-zero course for space.

We need not invest in clean-up missions and sustainable space technologies simply out of altruism. It is important to recognise the potential growth that the space sector can provide for UK plc. Figures released in May by the UK Space Agency showed that sector income rose by 5.7%—from £14.8 billion to £16.4 billion—between 2016-17 and 2018-19. I would wager that it has risen higher still over the past two years. Over the same timeframe, employment in the sector increased by 3,200, to 45,100 people, and supportive R&D technology investments relating to space activities increased by 18%, to £702 million.

In short, the space industry in the UK is in a good position to not only do the responsible thing and help solve a growing problem, but to be successful while doing so. The UK needs to build itself a space-centric education pipeline to properly capitalise on the growing environment of the successful UK space industry. Investing in R&D technologies such as robotics, autonomous systems, quantum computing and satellite technologies will help the UK capture a space industry market share that is bigger than it already is. Currently, the in-orbit servicing sector is estimated to be worth $4.4 billion, and, should we act fast and invest in the best bets when it comes to space debris removal, we should be capable of capturing at least $1 billion of this market by 2030.

Central funding will be a key solution to this technological problem, and the UK Space Agency, via the UK Government, has been leading the way in helping develop new and innovative technologies for cleaning up space. In 2020, the UK Space Agency allocated £1 million to companies to assist tracking space debris. In addition to awarding £2.5 million to Astroscale UK in May 2021, only a few weeks ago the Government invited space firms to apply for a share of up to £800,000 in funding for the purpose of cleaning up space. For this initiative, the UK Space Agency is seeking to fund additional debris removal feasibility studies and develop debris removal mission concepts and system designs. Due in part to this renewed funding, the number of jobs in the UK space sector has increased, and overall income in that industry continues to rise. Continued funding, paired with internationally recognised regulation, will be the key to ensuring that we can tackle space debris as a nation.

For the UK to take the much-needed serious step in global leadership and position ourselves as a leader in space sustainability and debris removal, we must continue to encourage the development of environmentally sustainable space assets. The ELSA programme from Astroscale is a strong start, but we must continue to invest in our UK space assets and our cutting-edge R&D programmes in this field. By encouraging the commercialisation of space debris removal, we will also be fostering a financially lucrative industry that can be driven by the UK and create future UK jobs. This can be accomplished by increasing the scope and financing of the recent UK Space Agency phase A study, which is aimed at supporting space debris removal proposals. I urge the Minister to look at that study.

We can also take a leadership role globally by ensuring that regulation keeps up with industry development, and specifically by making it mandatory for companies to develop satellite sustainability contingency plans and encouraging partnerships with companies such as Astroscale for satellite end-of-life services with the use of docking plates. Regulation can also aim to ensure that low Earth orbit satellites have the capability to undertake collision avoidance manoeuvres and encourage the development of a space traffic control system. By establishing a “pay now or pay more later” system to encourage companies to prepare satellites for removal or face serious costs later if they are forced into collision avoidance manoeuvres, we will encourage companies to establish sustainability plans. Consistency and transparency in these matters will encourage space industry investment.

We must also remember that as global Britain, we need to leverage our international alliances with global partners such as the United States, Australia, Japan and India to establish agreed regulation and resist aggressive actions from other countries, such as China and Russia. With these partners and more, we can help establish a “net zero space” sustainable development goal to face this growing challenge in our lower and middle Earth orbits over the coming decades.

Two years ago, when I was an Energy Minister at the same time as being space Minister, I signed net zero into law, committing the UK to becoming the first major nation and the first G7 country to state that we would have net zero carbon emissions by 2050. Two years on, 75% of the Earth’s land mass has now committed to a net zero target ahead of COP26 this year, which just goes to demonstrate the leadership role that the UK can play globally. We can demonstrate to the rest of the world what can be achieved, so let us now take this opportunity to show leadership on space debris internationally, and to push for a net zero space environment and lead the world in the sustainable use of space.

--- Later in debate ---

[Chris Skidmore [V]]

Thank you, Mr Dowd, for your chairmanship of the debate. I thank the shadow Minister and the Minister for their contributions. It is clear that we share an equal passion for the importance of the future of space sustainability and what role space debris removal can play in that sustainability.

This is the first debate that has ever been held in Parliament on space debris, despite it being an issue that has been known about in the space community for more than 55 years, since the signing of the outer space treaty. The UK has a unique opportunity to show international leadership in this area, backed by future investment. I hope that space debris is part of the UK space strategy that the Minister outlined—it has every right to be so.

I have been contacted by a wide number of industry and academic experts. I am delighted that the Minister has met Astroscale, but I hope she might attend a roundtable of experts on space debris that I might organise in the future, with people from industry and academia, including Imperial College, the Open University and Leicester University. It is amazing how many people have been working on this subject.

We have the opportunity, just as we do with net zero, to set out a vision of net zero space. Let us be the country that does that, in the same way that we are the country that has led the charge on net zero. Net zero is so important now for setting out the future vision of our green economy. Setting out a future for our space economy can be built around a sustainable space environment, in which the UK can lead the way.

The Minister is doing a great job and I would urge her to think about how this issue can fit into her wider vision on space, and to attend the roundtable that I might organise as a result of this debate. I thank everyone for attending and speaking in this first debate on space debris and setting out why it is such an important and critical issue to resolve for our future, to avoid any future scenario where we are unprepared. The unexpected can be anticipated if we expect it, and I hope this debate has woken us up to the risks that space debris could case if it is not tackled for the future. I hope it places a marker in the ground—a sustainable marker, which can be removed, of course—that demonstrates that we can act, we need to act and we need to act fast in order to prevent collisions in the future.

Question put and agreed to.

Resolved,

That this House has considered space debris.

Advanced Research and Invention Agency Bill

Chris Skidmore Excerpts

2nd reading
Tuesday 23rd March 2021 Commons Chamber

[Chris Skidmore (Kingswood) (Con) [V]]

I welcome this Bill. As the former Science Minister who ushered in this concept of the UK ARPA—now ARIA—in the 2019 Conservative manifesto, I am delighted that the introduction of this Bill so early in the Parliament demonstrates the Prime Minister’s key determination that research and development will be a priority as we look to build global Britain on the back of recovery from the pandemic.

The Bill needs to be placed in the context of the uplift in research and development spend that has been spoken about, from the £9 billion per annum that we have spent in the past to £22 billion by 2024-25. To put that in context, ARIA will represent just 1% of total research spending in the period it is set up for, over five to 10 years. That is obviously due to our commitment to spend 2.4% of GDP on research and development by 2027, and we need to look at how we achieve that by creating multi-annual financial budgets. We know that ARIA will have £800 million over a five-year period, and that is incredibly welcome. We need that certainty and stability for the rest of the R&D sector to be able to plan ahead and devise research partnerships.

A number of Members have spoken about the current insecurities regarding the Horizon Europe subscription. There were plenty of insecurities when it came to seeing whether we would be an association member of Horizon Europe in the first place, yet we crossed that line. I am in no doubt that these issues will be resolved within the appropriate timescale to provide certainty for the science and research sector when it comes to plugging funding shortfalls, but in the future we should learn the lessons by creating multi-annual, sustainable, long-term budgets that stop us reaching this stage in the first place.

I believe that the Bill designs the right structure for ARIA, with that 10-year certainty that it will exist, free from ministerial whims and able to plan ahead. It is right that the Bill strikes the tone and balance between, necessarily, independence and autonomy, as well as providing the right flexibility to prioritise discovery-led research. There has been some discussion on Second Reading today around whether we should be taking a mission-oriented approach or whether we should be looking for moonshots for ARIA, but that is fundamentally to misunderstand the purpose of creating an organisation that will prioritise disruptive innovation. There are plenty of other opportunities for moonshots elsewhere within the R and D ecosystem. ARIA’s sole purpose will be to look at how we can create paradigm shifts in technologies or, indeed, in technologies that do not even exist at the moment. I reference back to the UK being a founder member of CERN in 1983. We put £144 million a year into CERN now, so our spend on ARIA is quite modest by comparison. No one expected CERN to help to develop the internet or touch-screen computing, and yet they have been spin-outs as a result of prioritising discovery-led technologies and putting our faith in research, not knowing where it might lead us.

Other countries are doing the same. When we look at this discussion around ARIA, it is important to understand that it is not just about ARPA—and it is nothing to do with DARPA. Obviously, DARPA is a mission-oriented defence-led project. We focused our intention on the 1950s and ’60s version of ARPA when looking at how to create ARIA. There is Vinnova in Sweden, which is £260 million a year; imPACT in Japan; and SPRIN-D in Germany, which was set up in 2019 on exactly the same framework as we are looking at for ARIA. In a way, therefore, we are behind the curve. Other countries are already powering ahead, looking at setting up these disruptive innovation centres that will prioritise discovery-led technology, and we need to step up to the plate now.

When it comes to the Bill, I will make two final points. First, there is the issue around commercialisation. As I have mentioned, £800 million is a modest amount. We can supercharge that, just as we need to supercharge our 2.4% target by leveraging private investment. How can we do that? We can look towards prizes that have been established, such as the $10 million Ansari X Prize, which has leveraged $100 million. ARPA in the States also relies heavily on SRI International at Stanford University to help drive the spin-outs. We need to be cautious about not leaving an open door when it comes to focusing on the “R” in research and then forgetting about the “D”. This has been mentioned before, but what we do not want to see is discoveries coming out of ARIA being taken advantage of by other companies abroad. We need to look at how we protect the intellectual property. We need to look at how we can create an organisation that will focus on the “D”. I do not believe that Innovate UK has the capacity at the moment to be able to achieve that, so we need to look at the Fraunhofer in Germany, which spends 10 time the amount of investment than the catapult centres, for focusing on how we can look at applied level research for the future.

Then there is the issue of high risk. Yes, we need high-risk research, and yes, we must have the freedom to fail, but we must also understand the risk when it comes to collaboration with foreign powers, hostile research and making sure that we have the right security measures in place for dealing with research integrity and that we have trusted research partnerships. That is why it is exactly right that we have the FOI exemption in place to be able to protect this research and make sure that other countries do not take advantage of it.

Finally, it would be remiss of me, as a local MP, not to mention the location of ARIA. It is right that it should be practically a virtual location spread across the country, and we need to ensure that universities and national laboratories have the right investment to be able to help conduct the research for ARIA. When it comes to the headquarters, the Bristol and Bath Science Park in my constituency has land that is free, and I am sure that it would give a very good rate if ARIA wished to set up there, right next to the National Composites Centre and the Institute for Advanced Automotive Propulsion Systems. It would be a huge opportunity if ARIA wished to locate in my constituency, which is only down the road from Chipping Sodbury—as the Secretary of State mentioned, the birthplace of the vaccine used by Edward Jenner.

Research and Development Funding

Chris Skidmore Excerpts

Wednesday 17th March 2021 Westminster Hall

[Chris Skidmore (Kingswood) (Con) [V]]

I begin by putting on record my thanks to the hon. Member for Cambridge (Daniel Zeichner) for having secured today’s important debate. I am also delighted that it comes a day after the Prime Minister announced in the integrated review the Government’s renewed commitment to spend 2.4% of GDP on R&D by 2027. It is a familiar figure, which I know the R&D policy community has spent a long time debating.

I was a Science Minister for two years and set out my own road map to 2.4%. I made a series of four speeches that looked at the importance of investing in people, in international partnerships, in private R&D investment and in emerging technologies in order to meet the target. The broad theme of those speeches—the hon. Gentleman rightly referred to this—was the importance of doubling not only public but private investment and seeking an entire change in the culture of how we do R&D in this country in order to hit 2.4%, given that other countries are now racing ahead of us. Germany is near 3%, South Korea is at 4.5% and Israel is at 4.9%. We will fall behind in the global race unless we raise our ambitions higher still.

I stand by the words of those speeches that I made in 2019, but what has changed since then is time: we have too few years to achieve 2.4%. As the hon. Gentleman stated, we are standing still at 1.8% of GDP being spent on R&D. There are just 2,115 days until 2027. We have only 302 weeks—or just a little over 50,000 hours—to go, if we are to reach that target.

Reaching the target is not just about investment, important though that is—I will talk about that in a moment. It is also about providing certainty for the future; and with certainty comes the need for advance planning in order to allow for the lead-in times, which are lengthy for R&D investment. That is why, when we were preparing to leave the European Union, the Government announced the underwrite in August 2016 and then the underwrite extension—the guarantee—so that in-flight applications to Horizon 2020 and projects already taking place in Horizon 2020, would still receive money for the duration of the projects. Communication is absolutely vital when it comes to demonstrating long-term certainty for the R&D community.

On certainty and commitment, there were big-ticket items that I needed to fight for as the Science Minister, one of those was association into Horizon Europe in order to ensure that British science stayed on the road. That was why I also worked hard to commit to an increase in the UK contribution to the European Space Agency, increasing the subscription to a record level in 2019, and also to secure the first real-terms increase in QR—quality-related research funding—for more than a decade. Those were essential big-ticket items that we needed in order to enhance stability for the sector.

When it came to Horizon, many people told me that that simply would not be possible to do. I think that sometimes the R&D policy community can see things in a bit of a glass-half-empty way, mourning for yesteryear, when what we really need is to work together towards a positive vision for the future.

The manifesto commitment made by the Government saw R&D investment publicly increase from £9 billion to £19 billion. That was a huge amount—one of the most significant increases in a generation. Since then, the Chancellor’s Budget last year increased the investment to £22 billion, so my assumption was that the Horizon subscription would come from that increase of £3 billion—the difference in what was being spent as a result of the Budget.

I recognise that we have difficulties over the current ODA R&D money that needs to be secured. Although we need certainty, it is right that we now look afresh at new structures and new funds in order to ensure that we can enhance our international research capabilities. I think that sometimes the global challenges research fund and the Newton fund were a square peg to fit a round hole when it came to justifying ODA spend—not necessarily when it came to actually fighting for what is right when it comes to R&D spend. I would look at the agility fund and the discovery fund set out in the Smith and Reid review for answers here.

On funding in general, however, we need to move away from the diverse plethora of pots—there are too many people competing for too small budgets—and replace them with the UK equivalent of Horizon Europe. A multi-annual framework for the R&D budget would help us to reach 2.4% by 2027.

UK Space Industry

Chris Skidmore Excerpts

Thursday 4th February 2021 Commons Chamber

[Chris Skidmore (Kingswood) (Con) [V]]

My hon. Friend the Member for Morecambe and Lunesdale (David Morris) is right that three minutes is not a long time to discuss the enormous potential of the UK Space Agency but, then again, it takes only two minutes and 30 seconds for a rocket to leave the earth’s atmosphere, passing the Kármán line, and go into orbit, so Members can do better than that. I am proud to have been the UK’s Space Minister—twice actually—between 2018 and 2020. Not only is it the best job title in Government, but my daughter used to call me the “Minister for the Universe”, confusing that with my other title of Universities Minister.

There are enormous opportunities ahead in the 2020s. As Space Minister I created the idea of the National Space Council, with the promised national space strategy that has been talked about. I also managed to deliver a record uplift in the UK’s contribution to the European Space Agency—nothing to do with the EU—of £1.9 billion a year over the next four years. However, we can and must do more. I am sure that the Minister will recognise that this role is a huge opportunity for her as well.

Space is involved in every aspect of our lives. It is probably involved in this debate today, with satellites passing information back from various constituencies. The economic output for space in the UK is estimated to be £300 billion, rising to £340 billion by 2030. Worryingly, however, only 10% of that activity is actually UK owned. There is a huge issue of sovereignty that we need to tackle when it comes to the UK space industry. Ninety per cent. of our satellite activity is through foreign-owned satellites, so we need to look again at what we can deliver for the future.

As for Government investment in space, yes we are doing well, but we spend roughly £500 million a year, which is a third of the French Government’s budget and half of the German budget. When it comes to a new national space strategy and the future, we need to consider a few things. First, looking at the UK Space Agency, we need to create a separate UK space delivery agency so that the Space Agency is a commissioner that pushes through projects such as horizontal launch down in Newquay. Secondly, we need to double our space budget up to £1 billion a year. We should have a national procurement fund for space worth £250 million a year and a space innovation fund worth £150 million a year. That would ensure that the UK can really be on a par with other European nations and other countries, putting the space industry right at the centre of our vision for a new global Britain.

[Madam Deputy Speaker (Dame Rosie Winterton)]

Order. We have lost the connection to John Nicolson, so we go straight to Richard Graham.

UKAEA Public Service Pension Scheme

Chris Skidmore Excerpts

Tuesday 28th January 2020 Westminster Hall

[The Minister for Universities, Science, Research and Innovation (Chris Skidmore)]

It is an honour to serve under your chairmanship, Mr Gray. I thank the hon. Member for Lancaster and Fleetwood (Cat Smith) for calling this debate. I understand that the subject is complex, sensitive and frustrating for a small number of individuals affected, including her constituent, Eve. I pay my greatest sympathies to her on the sad death of Anthony.

I hope it is worthwhile to offer clarification on some of the terms of the UKAEA pension scheme and on the Government’s position, although the hon. Member has already set out eloquently the history of some of the decisions taken. The scheme took on its current form in 1972, based broadly on the terms of the principal civil service pension scheme, which following changes was subsequently known as the classic scheme. These are unfunded public service pension schemes ultimately governed by and adhering to Treasury policy.

We know that the societal circumstances that shaped the scheme’s rules when they were created are significantly different from today, particularly with regard to women in the workplace. Initially, adult survivor benefits were provided only to the spouses of male scheme members, funded by a 1.5% employee contribution. That benefit was extended in 1987 to include the spouses of female scheme members, at which point women began to pay the contribution. The pension for survivors of female members is paid only in respect of reckonable service from that particular date. If the benefit’s scope had been wider—for example, to include unmarried partners —it would have required a higher contribution rate to fund it.

As the hon. Member mentioned, in 2002 the new civil service pension scheme, known as premium, was introduced, which offered a range of important improvements over the classic scheme, including a survivor’s pension for unmarried partners. The classic scheme closed to new members in 2002. She asked about the transfer at that moment. Existing members were given the choice to stay in their current section, to join premium for future service or to join for future service and convert past service to the new terms at a conversion factor of approximately 8% to account for improvements in premium at the time. Those improvements were therefore paid for by an increase in member contributions, making the change cost-neutral to the taxpayer. At that point, members of the classic scheme were offered, as I said, the opportunity to retain their current scheme or join premium. All subsequent civil service pension schemes have included adult survivor pensions for unmarried partners.

The new arrangements were not introduced to the UKAEA pension scheme. Instead, the model analogous to the civil service classic scheme remained unchanged. I understand that the differences between the UKAEA pension scheme and the civil service classic scheme were judged at the time to be sufficient, so a decision was taken that reform was not required. Following the McCloud judgment and the requirements of the Public Service Pensions Act 2013, the UKAEA scheme will close. Timetables are to be determined, following the judgment and the Treasury response. In terms of survivors’ pensions, these remain payable only to spouses and civil partners after 2005. Employees continue to benefit from the lower contribution rate.

It is clear that if an individual’s circumstance changes and the survivor cohabits with a new partner, gets married or enters a civil partnership, the benefit is no longer payable. The employee contribution paid by members was based on those rules and would likely have been higher if they had been different. I know this will disappoint the hon. Member and her constituent, but the Government’s established position is to avoid making any retrospective changes to public sector pensions at taxpayer expense.

The hon. Member mentioned the Brewster Supreme Court case in relation to any possible discrimination. In 2017, the Supreme Court judgment determined that where a pension scheme provides for a pension for unmarried partners on the member’s death, there should be no requirement for the member to nominate their partner for the pension to be paid. The Government believe that that decision has no bearing on cases where pension schemes do not provide pensions to unmarried partners.

As I have said, the Government’s established position is to avoid making retrospective improvements to public service pension schemes at taxpayer expense, other than in very exceptional circumstances, and we do not envisage that policy changing in future. I realise that that does not give the hon. Member the answer that she and her constituent would wish for, but, to follow up her comments, if she would like a meeting with responsible officials in my Department and others, I happily make the offer to sit down with her and go through in greater detail some of the provisions she has mentioned, with the caveat that the Government’s position on retrospective changes remains unchanged. I have liaised closely with the Department for Work and Pensions and the Treasury, and she is aware, having written to the Chief Secretary to the Treasury, that a number of the issues relating to public service pensions are ultimately Treasury decisions.

I thank the hon. Member for raising this case. As a constituency MP, I have dealt with a number of cases where changes have occurred over a number of decades to pension schemes—not the UKAEA scheme in particular—and individuals on previous schemes have sometimes been unable to qualify for particular benefits that came in at a later stage. I recognise the pain and dissatisfaction that her constituent feels with the current arrangements, and I pay tribute to her in coming to the hon. Member as the local MP on this particular issue. On changes enacted over a number of decades, unfortunately I am unable to give the response that the hon. Member would wish for. I am happy to arrange for subsequent meetings to continue the dialogue.

Question put and agreed to.

[James Gray (in the Chair)]

I suspend the sitting until 2.30 pm. The afternoon will open with a particularly interesting debate on Antarctica science and diplomacy led by none other than the hon. Member for North Wiltshire (James Gray).

Oral Answers to Questions

Chris Skidmore Excerpts

Tuesday 21st January 2020 Commons Chamber

[Carol Monaghan (Glasgow North West) (SNP)]

5. What steps she is taking to support the development of photonics SMEs.

[The Minister for Universities, Science, Research and Innovation (Chris Skidmore)]

We are working with the Photonics Leadership Group to support the success of the UK photonics industry. The Government have invested £81 million in the establishment of a new national extreme photonics application centre. The Fraunhofer Centre for Applied Photonics is involved in 17 Innovate UK-funded products. In addition, UK Research and Innovation has invested £7.2 million in partnerships with St Andrews and Strathclyde Universities, working on fundamental biophotonics research programmes.

[Carol Monaghan]

The Minister has rightly detailed some of the great expertise that exists in photonics and quantum across the UK, and particularly across the central belt of Scotland. When these SMEs are looking to expand, they often attract foreign investment from countries such as China, so what oversight is there of the potential technological transfer, in terms of both our expertise and threats to our security? What work are the Government doing with the Treasury to ensure that the expansion of such SMEs can be funded from UK sources?

[Chris Skidmore]

I thank the hon. Lady for her work as the chair of the all-party group on photonics. She is absolutely right: the central belt across Scotland—centred on Glasgow, in particular, and the new Clyde waterfront innovation district—is absolutely critical for our national success in photonics. As part of our national quantum technologies programme, which the Secretary of State alluded to, some £50 million will be invested in a hub for quantum imaging at Glasgow University by 2024. On business involvement, I am determined, as the Science and Innovation Minister, that we not only look at how we protect future intellectual property in this area and attract foreign investment through our international research and innovation strategy but, at the same time, look at new forms of protection through our innovation and regulation White Paper.

[Bob Blackman (Harrow East) (Con)]

7. What steps the Government are taking to support the provision of small-scale modular nuclear reactors.

--- Later in debate ---

[Mark Garnier (Wyre Forest) (Con)]

9. What steps she is taking to support the space industry in the UK.

[The Minister for Universities, Science, Research and Innovation (Chris Skidmore)]

The UK space sector employs 42,000 highly skilled people, generating more than £300 billion for the wider economy. We recently committed ourselves to investing £374 million a year—a record 15% increase—with the European Space Agency over the next five years, and our national space council and space strategy will help us to lead the way in the evolution of this high-technology sector.

[Mark Garnier]

Following the welcome announcements in the Queen’s Speech about investment in the UK space sector, will my hon. Friend tell us the status of funding for innovation in the sector and of plans for the proposed UK space strategy?

[Chris Skidmore]

I thank my hon. Friend for his work as vice-chairman of a newly formed all-party parliamentary group, the parliamentary space committee. I know that he plans to fly to the United States next month to attend the launch of the European Space Agency’s solar orbiter, which was built in Stevenage. It is a fantastic piece of UK science engineering and was funded by the Government to the tune of £216 million.

I understand that the space industry has proposed a space innovation fund, and I am interested in working with the industry on that. The national space council will consider how we can build on existing commitments through a comprehensive UK space strategy, which will help to create thousands of jobs across the country.

[Jim Shannon (Strangford) (DUP)]

It is good to hear what the Minister says about the space sector, but may I ask him specifically how all the regions of the United Kingdom of Great Britain and Northern Ireland will benefit from that potential, and, in particular, how Northern Ireland will benefit?

[Chris Skidmore]

Last year, during a fantastic trip to the Belfast region, I had an opportunity to meet representatives of Thales Alenia Space, which is working on some of the capsules that encase satellite technology. The hon. Gentleman was absolutely right to ask that question. Our national space strategy constitutes a one nation approach that will involve every part of the UK, from a horizontal launch site down in Newquay in Cornwall to a vertical launch site up in Sutherland in Scotland—we are also thinking about establishing a spaceport in Wales. Every part of the UK will be involved in space, and rightly so.

[Greg Clark (Tunbridge Wells) (Con)]

We have a growing share of one of the fastest-growing markets in the world—the market for satellites—but no country in Europe has the ability to launch satellites into space, and there is a race to be the first to do so. Will my hon. Friend update the House on when we expect the Sutherland site to be ready for the launch of the first UK satellite?

[Chris Skidmore]

I pay tribute to my right hon. Friend for his hard work on space when he was Business Secretary. He was responsible for working on the Satellite Applications Catapult increase, and for the £99 million satellite testing facility at Harwell, which will mean that satellites can be tested here rather than our having to go abroad. He also set out our mission to be the first country in Europe to have both horizontal and vertical launch. As for Sutherland, I am working closely with the highlands and islands authorities to ensure that we can achieve our vertical launch, and that we work with Lockheed and other partners to do so as soon as possible.

[Emma Hardy (Kingston upon Hull West and Hessle) (Lab)]

10. What recent assessment she has made of the level of compliance of businesses with payment of the national living wage.

--- Later in debate ---

[Stephen Metcalfe (South Basildon and East Thurrock) (Con)]

T5. Will my right hon. Friend update the House on what plans the Government have to secure the number of scientists, researchers and engineers we will require to reach the 2.4% GDP spend on research and development?

[The Minister for Universities, Science, Research and Innovation (Chris Skidmore)]

I start by thanking my hon. Friend for all the hard work he is putting in as the Government’s envoy for the “Engineering: Take a Closer Look” campaign, which is encouraging young people to consider science, technology, engineering and maths as a future career.

Our new fast-track immigration scheme, including a global talent visa and the removal of the cap on tier 1 visas, will enable a wider pool of scientific and research talent to come to the United Kingdom. We are also investing in the number of researchers we need for the future, including £170 million for bioscience doctoral students and £100 million for artificial intelligence doctoral training centres.

[Anneliese Dodds (Oxford East) (Lab/Co-op)]

T7. Community energy is crucial in the transition to a local, smart, zero-carbon energy system. Will the responsible Minister meet me and sector representatives to map out a way forward that enables community energy to play that crucial part?

--- Later in debate ---

[Anthony Browne (South Cambridgeshire) (Con)]

My constituency of South Cambridgeshire is no less than the life sciences capital of the world. We have the global headquarters of AstraZeneca, 20,000 people working in the biomedical campus around Addenbrooke’s Hospital and dozens of industrial parks and small businesses developing new therapies, helping people to live longer and healthier. Many of those companies are dependent on research grants, some of which come from the EU. Will my hon. Friend tell me what work the Government are doing to ensure that South Cambridge remains the biomedical and life sciences capital of the world, and that companies have continuity of funding once we leave the EU?

[Chris Skidmore]

I welcome my hon. Friend to his place. He represents an area that is the life sciences crucible of Europe and, as science Minister, I am determined to ensure that that continues. I will meet the vice-chancellor, Stephen Toope, shortly to talk about Cambridge’s own plans for investment for the future.

On European investment, I want to make it perfectly clear to the House that when it comes to Horizon 2020, including European Research Council grants and Marie Skłodowska-Curie actions, the withdrawal agreement ensures that we can continue within that framework. When it comes to looking at Horizon Europe, its successor scheme, we want to explore an association that is as full as possible. We may be leaving the EU, but we will not be leaving our European research partnerships.

UK Space Agency: SatelLife Competition 2020

Chris Skidmore Excerpts

Wednesday 15th January 2020 Written Statements

[The Minister for Universities, Science, Research and Innovation (Chris Skidmore)]

The UK Space Agency is offering young people expert advice and the chance to connect with space industry representatives, potential investors and commercial partners, as well as a share of £50,000 for their ideas of how satellites could improve life on Earth.

Satellite services such as navigation, communications and earth observation support industrial sectors worth £300 billion to the UK economy. This competition gives young people the chance to test new ideas with space experts and perhaps one day become part of the UK space sector, which already supports 42,000 jobs and could create thousands more this decade.

By supporting the UK’s next generation of scientists and engineers, the competition will help turn young people’s ideas into real-world proposals that could eventually transform our lives—from saving our planet from climate change, to improving healthcare services.

Anyone aged between 11 and 22 years old has until 3 March 2020 to enter the competition through the UK Space Agency’s website. The winners will go on to pitch their ideas to a panel of industry experts, with the opportunity to gain further advice and support.

The Government are committed to establishing a National Space Council and developing a UK space strategy, while establishing commercial spaceflight from UK spaceports for the first time, to help the UK lead the way in this fast-growing, high-technology sector. It is my own personal ambition to ensure the sector has a bright future, and I would encourage all young people who are fascinated by space to enter the SatelLife competition and to play a key part in the second space age.

[HCWS39]