Climate-related Financial Disclosures

Lord Henley Excerpts

Tuesday 30th January 2018 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Henley) (Con)]

My Lords, Her Majesty’s Government have endorsed the recommendations of the Financial Stability Board’s Task Force on Climate-related Financial Disclosures and encouraged all publicly listed companies to implement them. We are seeking views on companies’ ability to apply these recommendations with consistency through the work of the green finance task force and the recent streamlined energy carbon reporting consultation.

[Baroness Featherstone (LD)]

But that is voluntary. Do the Government agree with big investors in the UK economy such as Aviva that climate disclosures should now be mandatory, to set the pace for innovation and ensure that the UK secures competitive advantage amid the global race to green the financial system?

[Lord Henley]

My Lords, that is one view. It was looked at by the Environmental Audit Committee inquiry on green finance, which sought evidence on the effectiveness of the TCFD’s recommendations and the Government’s role in supporting their implementation. There is broad consensus among stakeholders that companies will certainly require more time to implement the recommendations but some have recommended making disclosure mandatory within, say, two to three years. The Government have not yet taken a view on this matter and will consider it in due course.

[Baroness Jones of Whitchurch (Lab)]

My Lords, it is estimated that listed companies account for around a quarter of global carbon emissions, with oil companies obviously among the biggest polluters. Therefore, does the Minister agree that investors should have a responsibility to demand that those sorts of multinationals, in addition to individual countries, sign up to the Paris Agreement and set out their business strategy for a net zero-emissions world? That is the only way that we are going to tackle this issue on a global basis and ensure that we protect shareholder investment.

[Lord Henley]

My Lords, I accept what the noble Baroness is saying: that is very useful information for investors and others who are interested in what the companies are up to. We explicitly ask for feedback on those TCFD recommendations and whether they should be mandatory in the long run. However, one has to balance against that the fact that it potentially imposes a burden on businesses, and one would have to look at how exactly that should be done. At the moment it is not mandatory. We will consider that in due course, but at the moment it is best that we analyse the responses we have had to the various consultations and then come forward with our recommendations.

[Viscount Ridley (Con)]

Does my noble friend agree that climate-related financial disclosures should take into account the fact that the consensus among climate economists and, indeed, in the Intergovernmental Panel on Climate Change, is that the economic impacts will be positive for the next 40 or 50 years?

--- Later in debate ---

[Lord Henley]

My Lords, my noble friend makes another point. If these impacts are going to be beneficial, there will be an even greater reason for companies to wish to list them in their financial disclosures. As I said in response to other questions, whether we make them mandatory is obviously a matter we want to consider in due course.

[Lord Teverson (LD)]

My Lords, the City recently released an excellent report, Fifteen Steps to Green Finance. One of its recommendations was that the UK should set up a green finance standards board. That would enable this country to take that sector of the finance market and call it its own, set standards globally and make sure that issues such as greenwash did not undermine that concept. Will the Government take that on? Should they not do it urgently to make sure that we corner that market globally?

[Lord Henley]

My Lords, that is something else we can consider. Quite a lot of task forces and other boards exist at the moment; the Question itself relates to the task force on climate change and financial disclosure, set up by the Bank of England, and there is our own green finance task force. There is also the consultation I referred to earlier—consultations seem to be coming out of our ears. But I will certainly look at what the noble Lord said; whether it is right to set up yet another body is another matter.

[Baroness McIntosh of Pickering (Con)]

My Lords, the Secretary of State for BEIS has given conditional approval to Third Energy to hydraulically fracture in North Yorkshire, very close to or under the national park. What checks are being conducted into the financial probity of Third Energy, which has failed to lodge its accounts for the last financial year?

[Lord Henley]

My Lords, I would rather not answer that question without notice. It goes slightly beyond the Question on the Order Paper, but I will certainly write to my noble friend about it.

Small Business Commissioner

Lord Henley Excerpts

Monday 22nd January 2018 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Henley) (Con)]

My Lords, the noble Baroness, Lady Maddock, accused me of having been giving optimistic answers at the Dispatch Box for the past 20 years. I assure her that it has been for only the past eight years; before that, I was a natural pessimist along with the best of them. I suppose that at least I can be grateful that the noble Baroness got my sex right, unlike my poor noble friend Lady Rock, who became Lord Rock briefly, but I am sure she understands that mistakes can be made.

Like other noble Lords, I thank the noble Lord, Lord Mendelsohn, for introducing this debate. It has been very useful, even if, as my noble friend Lord Cope made clear, it is somewhat early days yet to judge how effective the Small Business Commissioner is likely to be. The noble Lord, Lord Mendelsohn, made three points: first, that we should remain committed to dealing with the problem of late payments for small businesses; secondly, that we should consider additional opportunities; and thirdly, that we be sympathetic to what the Small Business Commissioner learns and be ready to act. I hope I have got the noble Lord right on that. Those will certainly be, in effect, our guiding principles in these matters.

The noble Lord mentioned earlier legislation. He mentioned 8% plus the base rate and the Prompt Payment Code and asked whether we had any data, particularly on how effective that earlier legislation was, and whether we want to learn from the Australian experience. Australia is another country, but there will certainly be lessons to learn from its experience, and it would be arrogant in the extreme to say that we are not going to learn them. We will certainly want to look at them. Whether I can provide him with any further data on how the earlier legislation worked is another matter, but I will have a look at it, see what there is and what we can make available.

The noble Lord also mentioned, as did other noble Lords, what we have learned about Carillion’s payment practices. It is too early for me to comment on it, but 120 days seems excessive, and we understand that other companies are operating the same system, although the noble Baroness, Lady Maddock, said that she has already noticed signs that there is some improvement in that sector. There are things that we want to learn on that.

I ought to add a little about the Government’s performance in this sector because it is very important. We all understand that the Small Businesses Commissioner will not be dealing with public sector payments, but we have regulations to make it clear that the public sector must abide by fairly strict rules. The Public Contract Regulations 2015 introduced a requirement for public sector buyers to publish data annually on their performance against paying undisputed invoices in 30 days. As most noble Lords will know, central government has gone further. In March 2015, we restated the long-standing policy of paying 80% of undisputed valid invoices within five days and the remainder within 30 days, and I assure noble Lords that the Government are reaching that target. In the 2016-17 financial year, my department, BEIS, paid 99.4% of undisputed invoices within 30 days. I do not know what happened to the 0.6%, but if the noble Lord would like me to make further inquiries I will be more than happy to do so.

Although the debate is specifically about the Small Business Commissioner and his role, which I will get on to in the small amount of time that I have available, I want to make it clear that removing all barriers to growth is a key part of creating the dynamic market economy which is at the heart of the Government’s ambitious, modern industrial strategy, which we debated in this House only a couple of weeks ago. Our industrial strategy aims to make Britain the best place to start and grow a business, and sets out our long-term plan to boost the productivity and earning power of people throughout the United Kingdom. I can assure my noble friend Lady Rock and all other noble Lords that small and medium-sized businesses have a key role to play in this. As we all know, they account for 99.9% of all private sector businesses and 60% of all private sector employment in the United Kingdom. I want to give that assurance to the House, particularly to the noble Baroness, Lady Maddock, who talked about the problems of access to finance as well as late payment. We wish to see them supported and I refer her to the speech by my noble friend Lady Rock, in particular my noble friend’s comments on various matters in the Budget designed to help those small businesses.

We recognise the importance of providing SMEs, which are the backbone of our economy, with an environment in which they can thrive, thus enabling them to grow and create jobs. Tackling the late-payment culture and driving a change in payment practices are vital for this to happen. Whatever the size of the late-payment debt that is facing small and medium-sized businesses—we have seen figures quoted from £14 billion up to £44 billion—it is completely unacceptable. That is why we have taken the steps we have to tackle this, in both the public and private sector, and why we will want to learn further from what happens and how the Small Business Commissioner gets on.

I start by giving a short update on the work that the Small Business Commissioner has completed in his office in the month or so since it was set up. Since last month’s debate on the Small Business Commissioner (Scope and Scheme) Regulations 2017, which I think the noble Lord, Lord Mendelsohn, remembers from just before Christmas, significant progress has been made. The House will be aware that we launched the Small Business Commissioner on 20 December, upholding a commitment to launch the service by the end of 2017. That followed the appointment of Paul Uppal to the role in October last year—again, I am very grateful for the fact that that appointment was welcomed by the noble Lord, Lord Mendelsohn, as echoed by other noble Lords in the course of the debate today and repeated by the noble Lord himself. Mr Uppal will play an important role in supporting small businesses to resolve their payment disputes with larger businesses, providing advice and helping to bring about a culture change in payment practices and how businesses deal with each other.

The commissioner has begun an extensive programme of stakeholder engagement. He has met a number of interested parties to discuss the role of the office in the future, including the Federation of Small Businesses, the Association of Independent Professionals and the Self-Employed, and the Forum of Private Business, to name but a few. Mr Uppal has also met the former Minister for Small Business, my honourable friend Margot James, who since the reshuffle has moved on to other things, and plans are being made for him to meet with her successor, my colleague Mr Andrew Griffiths. As the noble Lord, Lord Mendelsohn, said, he met Mr Uppal last November, and I believe he plans to go again to Birmingham in the near future.

The commissioner has been talking to individual small businesses about their difficulties in working with larger partners, building up evidence of poor practice and making sure that small businesses understand the role of the commissioner. His office is undertaking communications and marketing activities to ensure that small businesses are aware of its service. This includes several interviews and briefings with trade bodies, sector specialist publications and the national press.

The commissioner also provides general advice and information to business through a website, signposting businesses to existing support and dispute-resolution services. The website has been specifically developed so that it is fit for purpose, and it provides an information service that small businesses told us they need. I am told that the website has already attracted something in the region of 1,200 hits since its launch in mid-December. The commissioner also handles complaints about payment issues between small business suppliers and their larger customers.

The Small Business Commissioner is just one of the steps being taken by the Government to tackle late payment. The noble Lord, Lord Mendelsohn, mentioned the Prompt Payment Code, which provides the gold standard of payment practices and continues to play a role in turning round the culture of late payment. We will continue to promote and support it. In April last year we introduced a statutory duty on the UK’s largest businesses to report on their payment practices, policies and performance to increase transparency and provide small business suppliers with better information about those that they intend to trade with. To date, over 300 reports have been received.

Looking wider, we want to do all that we can to support SMEs where we can. My noble friend Lord Popat asked about earlier debates and asked what has happened since then. I can give him the assurance that we have published our White Paper on the industrial strategy, in which we set out how the Government will support small businesses in gaining access to international markets. He mentioned driving up exports and taking advantage of the opportunities of Brexit as part of our industrial strategy.

In the time available, I cannot deal with all the other questions that noble Lords have asked, but I hope I will be able to write to them and deal with the more detailed questions. In particular, I shall see if there are answers to some of the detailed questions from the noble Lord, Lord Mendelsohn. However, I can give an assurance that we remain committed to supporting all SMEs in continuing to grow and thrive, and to taking action to tackle the issue of late payments.

House adjourned at 9.32 pm.

Green Finance

Lord Henley Excerpts

Thursday 18th January 2018 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Henley) (Con)]

My Lords, I will leave lithium batteries and the recycling thereof for another day. I hope that the noble Lord, Lord Mendelsohn, will be prepared to accept a letter on that slightly more detailed subject than the broader themes with which we have engaged in this debate.

I join other noble Lords in congratulating the noble Lord, Lord Teverson, on securing this debate and introducing it. I join my sometime noble friend, the noble Lord, Lord Dykes—I suppose that is how I should address him—in congratulating his sometime noble friends on the Liberal Benches on the extraordinary contributions of the colleagues of the noble Lord, Lord Teverson—the former colleagues of the noble Lord, Lord Dykes—in producing four speakers in this debate. As my noble friend Lord Barker implied, we achieved much during the coalition years. I particularly remember undertaking with my noble friend a great deal of work on anaerobic digestion, the energy that can come from that and the successful removal of waste from the waste stream as a result. It is a minor point but it was very important in terms of recycling and green energy. The coalition achieved much and I hope that in what I will say I can convince noble Lords who were formerly noble friends—I refer particularly to the noble Baroness, Lady Featherstone, with whom I served on the coalition—that we will continue to achieve those results, no doubt with them prodding us along, as we continue not with a coalition Government but with a Conservative one.

I welcome all the contributions we have had on this important agenda. I congratulate noble Lords on the Liberal Democrat Benches on their recent report on a clean, green and carbon-free Britain. The noble Lord, Lord Teverson, and, I think, other noble Lords referred to the recent City of London report and the FSB’s report. I give an assurance that we will look very carefully at those.

Only a week ago, the noble Lords, Lord Mountevans, Lord Mendelsohn and others, debated our industrial strategy, which sets out how the United Kingdom will build on its strengths and maintain its global leadership in a fast-changing world. The industrial strategy recognises clean growth as a great opportunity that we must pursue. As the noble Lord, Lord Fox, will remember, we set out our clean growth strategy earlier than the industrial strategy, but the industrial strategy made it clear that, of the four “grand challenges”, clean growth was one of the main ones. It is a challenge facing us and all the major economies in the world—and the minor economies, for that matter.

Our clean growth strategy demonstrates that it is entirely possible to grow our economy while cutting emissions. Indeed, in 2016 the United Kingdom’s emissions were 42% lower than in 1990, while GDP increased by 67% over the same period. To all those Jeremiahs who say that you cannot have a reduction in emissions and GDP growth in the same period, the figures for this country show that that is not the case. Furthermore, PwC recently published a report that showed that the United Kingdom’s average annual reduction in carbon intensity over the past 16 years has been greater than that of any other G20 nation.

That global transition towards green growth cannot happen without our financial sector, which is the main subject of the debate today. The pursuit of cleaner growth implies a great change in the way we invest, from households to large institutions. All investments and purchases are relevant. In the last 10 years, for example, we have seen global green bond issuance grow from zero to reach more than £100 billion last year. I believe that we are already a global leader in green finance, and the Government entirely agree with the strong case for the United Kingdom to remain so and for our whole economy to be resilient to climate change, which is the second of the noble Lord’s debate Motion. If I can frame it as two questions, the first is the need to remain a global leader and the second is the need to ensure the resilience of the economy to climate change. Our industrial strategy and our clean growth strategy set out the ambitious first steps that we have taken to ensure not only that the United Kingdom captures this opportunity but that we will remain the leading standard-setter in the sector as it develops.

The United Kingdom is widely recognised as a global financial powerhouse. In the Global Financial Centres Index, London has been rated as the top financial centre in the world since 2015. It might be that the Leader of the Liberal Democrat Party does not think that the City should have quite such dominant power, but most of us welcome it and are grateful that it is so successful and provides so many jobs and funds for the Exchequer to pay for the services that the Government need to provide. It is only natural that the United Kingdom is well placed to build on our global leadership in green finance, which is what we want to do. It is an important part of the United Kingdom’s leadership in tackling climate change. I assure the right reverend Prelate and others that we want to show leadership in tackling climate change, because green finance matters to both the financial and climate change agendas, domestically and internationally. I assure noble Lords that government work on green finance does not take place solely within the Department for Business, Energy and Industrial Strategy, which I have the honour to represent here.

On the international stage, the Bank of England is co-chairing the G20 sustainable finance study group with China, and government as a whole has established formal green finance partnerships with Brazil and China. Domestically, BEIS and the Treasury both work in close collaboration on green finance, and at official level the work has received support from 11 different departments so far.

We have also seen significant leadership on green finance from the private sector. Barclays recently listed a €500 million green bond and HSBC committed to provide $100 billion of financing and investment to develop low-carbon technologies and projects. The London Stock Exchange has attracted more than 60 green bond listings, raising over $20 billion in seven different currencies. We want to do all we can to encourage the profitability of green finance. I reassure the right reverend Prelate that we want London to be the leader of that. Indeed, as that famous Londoner, the great lexicographer Dr Johnson, so eloquently put it many years ago:

“There are few ways in which a man can be more innocently employed than in getting money”.


We want the City to continue to do that in green finance as well.

As such, BEIS and the Treasury have jointly established an industry-led United Kingdom green finance task force. That was welcomed by the noble Lord, Lord Teverson, and I am grateful for that. I am also grateful to my noble friend Lord Barker, who, also describing himself as an optimist, welcomed that task force, which will develop long-term, ambitious policies in close collaboration with the private sector. The task force brings together senior leaders from across the financial sector, including representatives from big banks such as HSBC, Barclays, Aviva, the London Stock Exchange and the Bank of England. It has already consulted over 100 stakeholders and will publish its final report in the spring, providing green finance recommendations for the Government to consider.

On Tuesday, three of those UK green finance task force members gave evidence to the Environmental Audit Committee. I have not yet seen the detailed transcript but I look forward to it, as I imagine do other noble Lords. However, I understand that the task force was discussed, among other issues, and that those members were supportive of our green finance work. I very much hope that the noble Lord, Lord Teverson, who referred to the recent news of the sharp drop in investment in renewable infrastructure in the Bloomberg report, will accept that our support for clean energy has led to dramatic falls in the costs of renewable technologies—which, again, my noble friend Lord Barker referred to—and will accept that the UK green finance task force will look at ways in which the Government can facilitate investment in further low-carbon deals.

That brings me to just one or two of the questions at this stage which were raised. The noble Lord, Lord Teverson, was looking for more retail products; again, we would like the green finance task force to look at this issue and at lending for both households and businesses. We hope to see the sector itself develop new products—green bonds, for example—in the near future. But again, we are looking for advice on that.

The noble Baroness, Lady Kramer, asked what the Government would be doing on green mortgages. In our green growth strategy we committed to working with mortgage lenders to develop more products in that field. We published a call for evidence alongside the green growth strategy, seeking views on proposals for supporting more products of that sort, particularly green mortgages. That can be looked at by the task force.

The noble Lords, Lord Teverson and Lord Mountevans, referred to Fifteen Steps to Green Finance published by the Green Finance Initiative in association with E3G. Did the noble Lord, Lord Mountevans, say he was at the launch or perhaps it was at the creation of the Green Finance Initiative? He will correct me, no doubt, in due course if I have got that wrong. Both work as part of the green finance task force. We will certainly want to work closely with them.

The noble Lord, Lord Mountevans, and the noble Baroness, Lady Kramer, mentioned the sovereign green bond. We support the United Kingdom issuance of green bonds and the London Stock Exchange listing of those 60 or so green bonds to date, but for the Government to go down that route we would really have to show that they were cost-effective to the taxpayer. However, nothing is ruled out and it is something that can be looked at in the future.

I move on now to the sale of the Green Investment Bank, which the noble Lords, Lord Fox and Lord Dykes, and the noble Baroness, Lady Featherstone, very much regretted. We want to help the private sector build on its strengths and drive the development of the green finance sector. The core objective of the Green Investment Bank was to mobilise greater private sector green investment. It was a profitable sale—even the noble Lord, Lord Mendelsohn, admitted it was profitable but not as profitable as if he had sold it himself—and demonstrated the bank’s success in acting as a commercial entity and the case for green investment.

Under public ownership the Green Investment Group leveraged some £2.50 of third-party investment for every £1 it invested. Macquarie, the purchaser, has committed to maintain the Green Investment Group’s green values as part of its successful bid and a successful share has been established to safeguard the Green Investment Group’s green purposes.

The noble Lord, Lord Teverson, referred to his role as one of the independent trustees. We are very grateful for the work he has taken on and I am sure he will perform it with extraordinary diligence. I, like the noble Lord, Lord Mendelsohn, regret that he is unpaid for that but I do not think it will affect his excellent work in any way and the key role that he has played in the development of that special share, particularly now that he is one of the independent trustees.

The GIG continues to demonstrate leadership in the green sector. For example, it recently launched a ground-breaking pay-as-you-save energy efficiency service with no up-front costs for medium and large energy consumers in the United Kingdom. It is taking a proactive role in the green finance task force and has already made a number of significant green investments.

I did not think I would get through the debate without Brexit coming through. My noble friend Lady Featherstone questioned what might happen with Brexit and sought assurance on the implications. As we proceed to the exit, the Government will continue to utilise our entire global network to promote the UK as a destination to invest in, and as we move to the second phase of negotiations we will certainly explore our future relationship with EU bodies such as the European Investment Bank. At the Autumn Budget, the Government also set up a new dedicated subsidiary of the British Business Bank to become a leading UK-based investor in patient capital across the UK. That new subsidiary will be capitalised with £2.5 billion, which further complements the Government’s recent announcement of investing £2.5 billion in low-carbon innovation from 2015 to 2021.

In the last minute or two that I have, I will briefly touch on the resilience of the financial sector to climate change. The noble Lord, Lord Teverson, rightly noted the importance—as well as building on the UK’s global leadership in green finance—of ensuring that the UK financial sector is resilient. The Government already work with the insurance industry on physical risk, as mentioned by many noble Lords. My noble friend Lord Barker referred to the excellent work done by my right honourable friend Michael Gove at Defra through its Flood Re scheme, which works with insurers to help provide householders at the highest flood risk with affordable insurance. We are particularly interested in that, given recent disasters in the north-west. We continue to demonstrate this global leadership through DfID’s recent establishment of the Centre for Global Disaster Protection.

In the time available to me, I will not be able to give this part of the noble Lord’s debate the coverage it deserves. I hope that he and others are happy for me to write to them in greater detail, particularly on some of the recommendations we have received from the Task Force on Climate-related Financial Disclosures—very important recommendations indeed that need to be dealt with. Since I have now used up my 20 minutes, I very much hope that the noble Lord will accept a letter on that.

We share the desire of the noble Lord, Lord Teverson, and his party that the United Kingdom offers its leadership in this area. Through our clean growth strategy and our industrial strategy, we have put in place the tools to enable us to do so. We will continue to work collaboratively within government across all departments and all parties, and we welcome the occasional prod from our former colleagues in coalition on this issue. We also hope for further prods from the private sector and others to ensure that we effectively build on the UK’s strengths in green finance.

Brexit: Women in the Workplace

Lord Henley Excerpts

Tuesday 16th January 2018 Lords Chamber

[Baroness Crawley]

To ask Her Majesty’s Government what assessment they have made of the effect on women in the workplace of the United Kingdom leaving the European Union.

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Henley) (Con)]

My Lords, we have made a clear commitment to protect workers’ rights and to ensure that they keep pace with the changing labour market. We will not roll back EU rights for women in the workplace.

[Baroness Crawley (Lab)]

I thank the Minister for his reply, but I am not sure that I am convinced by his rebranding of the Government as champions of equality and workplace rights. Their lukewarm response to the recent House of Commons Women and Equalities Committee report on this subject speaks volumes. Does the Minister accept that British women facing discrimination in accessing their maternity rights at work, for instance—and his own Government’s figures bear this out; there are thousands of women who face discrimination in this area—would have a better future if we aligned ourselves as closely as possible with EU legislation and European Court of Justice case law in this area post Brexit?

[Lord Henley]

My Lords, obviously we will take note of what the EU does, but one of the important things about Brexit is that we can make our decisions about this. We do not have to be part of the EU to have high standards in the workplace. We already go way beyond the EU minimum standards in a number of important areas, such as annual leave, maternity leave and flexible working. But it is for the United Kingdom Parliament to consider these matters, not the EU.

[Lord Spicer (Con)]

Has my noble friend read the recent report by the eminent economist Patrick Minford, who says that a no-deal Brexit will cost the EU £500 billion and will benefit the UK by £640 billion? Does that not say it all—for women as well as for the rest of us?

[Lord Henley]

My Lords, I am aware of Professor Minford’s report and I have taken note of it. But the important point in relation to this Question is what the United Kingdom Parliament can do, and the important point to remember is that these will be matters for the United Kingdom Parliament and Government to decide.

[Baroness Burt of Solihull (LD)]

My Lords, I was very glad to hear the Minister say that the Government will not roll back EU rights for women in the workplace. This year the European Commission introduced proposals for a directive on work/life balance for parents and carers, which would provide for four months’ paid non-transferable leave for fathers. Will Her Majesty’s Government commit to keeping pace with the EU regarding equality and employment rights, including this directive?

--- Later in debate ---

[Lord Henley]

My Lords, while we are in the EU we will obviously continue to take a constructive approach to the various Council working groups, in particular that which the noble Baroness referred to on the new work/life balance directive, and we will seek to ensure that the text is appropriately clarified. We look forward to continuing discussions under the Bulgarian presidency. I am not going to make any commitments about what we will decide to do about different parts of that work/life balance directive, but we will certainly continue those discussions, and if we are part of the EU we will sign up to it, if appropriate. If not, these are decisions for ourselves.

[Baroness Hayter of Kentish Town (Lab)]

My Lords, one eminent equalities lawyer has said that the failure to bring across the charter of fundamental rights into UK law would mean that the free-standing right to equality will have no equivalent in domestic law, so we would lose one of the fundamental standards underpinning the other regulations being brought across in the withdrawal Bill. Given that we have heard that the new Brexit Minister in the other House wants to get rid of such rights anyway, what comfort can this Minister offer to women that their right to equality will not be weakened?

[Lord Henley]

My Lords, one eminent lawyer has made that statement, but not all eminent lawyers agree with it. We are fully signed up to human rights and will continue to be fully signed up to all other aspects of human rights. Leaving the EU does not make any difference in this matter.

[Baroness Hussein-Ece (LD)]

My Lords, the Minister mentioned the right to flexible working, but there is growing evidence that women who ask their employers for flexible working hours—particularly if they are older women, caring for elderly relatives or younger women trying to juggle work with caring for children—are often faced with discrimination, being ostracised or not being promoted. Is any work being done to look at this in a bit more detail and at why these women face such discrimination?

[Lord Henley]

My Lords, the Government and in particular the Prime Minister are fully committed to equality in this area. These are matters that we can resolve for ourselves. As I said, we already meet very high standards, which are higher than in the EU. Where our existing law is not working, these matters can be looked at and we hope that bodies such as the Equality and Human Rights Commission will look at them: it is the regulatory body in this area. I hope that appropriate action will be taken if that is the case—but, if necessary, it is also something that the Government can pursue themselves.

[Baroness Goudie (Lab)]

Will the Minister answer the second part of my noble friend Lady Hayter’s question? The Minister for Europe said yesterday in the other House that the Government were not going to stand by European policy on equality issues.

[Lord Henley]

My Lords, the important point I am making is that we are still fully signed up to human rights. I have not seen what my honourable friend said in another place. I am perfectly happy to look at what was said and I will write to the noble Baroness.

Parental Leave: Statutory Pay

Lord Henley Excerpts

Tuesday 9th January 2018 Lords Chamber

[Baroness Burt of Solihull]

To ask Her Majesty’s Government what plans they have to equalise statutory pay received for shared parental leave by people of any gender.

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Henley) (Con)]

My Lords, shared parental leave and pay are provided to enable working couples to share childcare responsibility in the first year. The scheme was introduced by the coalition Government for the parents of children who are due or placed for adoption from April 2015. We will evaluate its effectiveness this year.

[Baroness Burt of Solihull (LD)]

I am grateful to the Minister for that Answer. The shared parental leave rights, which were introduced under the coalition Government, as the Minister says, allow fathers to switch childcare duties with the mother during that first year. However, fathers get the basic maternity pay but, with only a few notable exceptions, not the enhanced maternity pay that the mother is entitled to. Unsurprisingly, take-up by fathers has been less than 1%. Will the Minister have a look at this, especially in light of the court case, Snell v Network Rail? Dads are being discriminated against, and they deserve equal rights too.

[Lord Henley]

My Lords, in the main, the pay and leave are both set at the same rate. Obviously, mothers get a slightly higher rate in that they are in receipt of statutory maternity pay for the first six weeks at that higher rate. Understandably, fathers, not being mothers, are not eligible for that SMP. But other than that, the leave and the pay are equal for all. As I said, we will evaluate the scheme later this year and come to conclusions. As regards the take-up rate, we are not entirely sure exactly what it is but we think it is broadly in line with the estimates that were made at the time of its introduction.

[Baroness Lister of Burtersett (Lab)]

My Lords, it seems that the take-up rate is minuscule. When the Government evaluate the scheme, will they take note of all the growing cross-national evidence which shows that the only way significantly to increase fathers’ take-up of parental leave is through an independent right to a non-transferable fathers’ leave, paid at a decent rate, as recommended by, for example, the Women and Equalities Committee? This is the way to change both culture and behaviour around shared childcare.

--- Later in debate ---

[Lord Henley]

My Lords, as I said, the take-up rate is on the low side; we do not know the precise figures but we reckon that they are broadly in line with the original estimates. Again, as I said, we will evaluate—that is what we promised to do, and we will do it this year. I do not think that the noble Baroness would expect me, in advance of that evaluation, to come to any conclusions about what might be the best way to improve that take-up rate.

[Baroness Nicholson of Winterbourne (Con)]

Will the Minister consider putting pressure on some of the European Union member state embassies in London? Our legislation, which is good and generous for maternity and paternity leave, is not replicated by those embassies, and it seems a little peculiar.

[Lord Henley]

My Lords, I am sure that staff in all the embassies in London will take note of what my noble friend has said. This is good legislation. We want it to succeed and to have its effect, but we also want to evaluate how it works and to see how it can be improved. That is what we will do later this year, and I am sure that our colleagues in the European Union will take note of any changes that we make.

[Baroness Sherlock (Lab)]

My Lords, I am sure that the Minister does want it to succeed. What would success look like?

[Lord Henley]

My Lords, I think that success would look like fathers and mothers being able to take the appropriate leave with the appropriate support so that they could manage those early weeks and months with a newborn child and properly adapt their lives. That is what we are trying to do with the original proposals for shared parental pay and leave, and that is why we want to improve them.

[Lord Lea of Crondall (Lab)]

Does the Minister recall that, when parental leave was first put on the agenda in Brussels, his party was very much opposed to it? It has been demonstrated in the last 15 years that this is a very useful and progressive part of our industrial system but that, as with other things agreed on a common basis across Europe—from pro rata to different types of atypical workers, as well as the gender question—it needs fairly strict rules to make it effective.

[Lord Henley]

My Lords, I do not recall what the noble Lord asks me to recall but I can say that this scheme was introduced by this Government—or, rather, by the previous, coalition Government. It is working reasonably well but with a very low take-up. I said in earlier answers that we obviously want to look at that to see whether it can be improved so that it can benefit more people and more couples.

[Baroness Hussein-Ece (LD)]

My Lords, until the Government get to grips with shared parental leave, perhaps they can take a look at the equal pay situation between men and women, which is still woefully inadequate. Will the Minister have a look at, say, Iceland, which is also led by a female Prime Minister? She has enshrined in law equal pay for men and women in the public and private sectors.

--- Later in debate ---

[Lord Henley]

My Lords, the noble Baroness is going slightly wider than the original Question on the Order Paper, which relates to shared parental leave. However, I am very happy to say that, like Iceland, we have a female Prime Minister, and long may that continue.

[Lord Watts (Lab)]

What would the Minister see as a successful take-up rate for males? Would it be 50%, 60%, 70% or 80%? Can he give an estimate of what the government policy is intended to deliver?

[Lord Henley]

No, my Lords. I have made it quite clear that we want to evaluate the system and, as I said in answer to one of the noble Lord’s colleagues, to see how it can benefit as many people as possible. It is benefiting some at the moment. Take-up is relatively low but broadly in line with what we originally estimated it to be. We want to see whether that can be improved so that more can benefit from it, but obviously we also want to take into account the costs to the taxpayer involved in any changes to the scheme.

Industrial Strategy

Lord Henley Excerpts

Monday 8th January 2018 Lords Chamber

Moved by

[Lord Henley]

That this House takes note of Her Majesty’s Government’s Industrial Strategy and of the case for boosting earning power and productivity across the United Kingdom with investment in the skills, businesses and infrastructure of the future.

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Henley) (Con)]

My Lords, we are at a critical moment for the United Kingdom. The world is changing and we have to ensure that we are building the type of economy that gives us a global competitive edge. New technology is creating new industries, changing existing ones and transforming the way we live our lives. We need to ensure that we are well prepared to prosper in this future. The decision to leave the European Union makes that even more important.

The United Kingdom has significant economic strengths on which we will build, but we also need to make the most of our untapped potential right across the country. In the Industrial Strategy White Paper, we have set out a long-term plan to help boost the productivity and earning power of people throughout the UK by focusing on five foundations of productivity.

Our first foundation is “Ideas”. Innovation and ideas are at the heart of increasing productivity. Our ability to come up with new ideas and to develop and deploy them is one of the United Kingdom’s historic strengths. We are building on these strengths and taking action to ensure that we are generating, and making the most of, new ideas, new ways of doing things, new goods and services, and new technologies. We want to be the world’s most innovative economy and we have announced a major step towards achieving this: increasing investment in research and development to 2.4% of GDP—an extra £80 billion over 10 years.

Our second foundation is “People”: ensuring access to good jobs and greater earning power for all, with a strong focus on technical skills, maths and engineering, and retraining throughout careers. An effectively skilled population is pivotal to a modern and productive economy. We will deliver a dynamic country that has high levels of skills in science, technology, engineering, mathematics, digital and social sciences. Our strategy also takes action to address regional disparities in education and skill levels so that we build on local strengths and deliver opportunities for people wherever they live. Creating a balanced economy that boosts the earning power of everyone means reaching out to underrepresented groups in the labour market: older workers, women, disabled people and black and minority ethnic workers. It is vital not just for them and for our communities but for the productivity of the United Kingdom economy as a whole that everyone has the opportunity to realise their full potential.

Our third foundation is “Infrastructure”. We have committed to a major upgrade to our digital and physical infrastructure, including increasing the national productivity investment fund to £31 billion. High-quality infrastructure is vital for economic growth and prosperity across all regions of the United Kingdom. We are ensuring that our infrastructure investments actively support our long-term productivity as well as providing greater certainty and clear strategic direction to investors and businesses. We will ensure that our country is one of the best in the world in terms of digital connectivity, with high-speed fixed and mobile access available in all areas. Trials in road and rail digital connectivity will prepare us for the future and the potential for the adoption and deployment of autonomous vehicles.

Our fourth foundation is supporting our “Business Environment”, by driving more than £20 billion of investment in innovative and high-potential businesses. The United Kingdom has an excellent reputation in the business world. Our industrial strategy aims to build on this and make it the very best place to start and grow a business and a real draw for the most innovative and successful companies. We have world-class companies and we will do more to support them, spreading their best practice and creating a more balanced and thriving economy.

Our fifth foundation is “Places”, in which our ideas, people, infrastructure and business environment happen. The United Kingdom has a rich heritage, with world-leading businesses located in every region. Our cities, towns and rural areas are essential to shaping our economic future. We will ensure that the entire country is in a position to fulfil its potential. We have created a £1.7 billion transforming cities fund to improve transport between city centres and suburbs. We are investing in innovation, including through our £115 million a year strength in places fund. We are investing in skills, including through our investment in teachers’ professional development in parts of the country where education attainment is lower. Local areas know their own strengths and weaknesses best. That is why we have also committed to developing local industrial strategies, with Greater Manchester and the West Midlands already developing early versions. We need to create a nation where every region is thriving.

Transforming these five foundations of productivity is vital, but we know that, on its own, it is not sufficient, so we have also identified four grand challenges, based on the advice of our leading scientists and technologists, to put the United Kingdom at the forefront of the industries of the future. These areas represent long-term, complex trends which will shape the global economy, creating both opportunities and challenges for the United Kingdom. If we act now we can lead from the front, but if we wait and see other countries will seize the initiative.

For each of these challenges, our industrial strategy sets out how we can seize the opportunity. These grand challenges will be supported by investment from the industrial strategy challenge fund, matched by commercial investment. The four grand challenges are: first, artificial intelligence and the data-driven economy; secondly, clean growth; thirdly, the future of mobility; and, fourthly, meeting the needs of an ageing society. I shall speak on each of these challenges in more detail, and set out, based on our analysis of current evidence and future trends, our priority areas for each grand challenge.

Artificial intelligence and machine learning are general purpose technologies .They can be seen as new industries in their own right. By one estimate, artificial intelligence could add £232 billion to the United Kingdom economy by 2030. To ensure our success in this area, we will make the United Kingdom a global centre for artificial intelligence and data-driven innovation. We will support sectors to boost their productivity through AI and data analytic technologies. We will lead the world in the safe and ethical use of data and AI and help people develop the skills needed for those jobs of the future.

The move to cleaner economic growth is another of the greatest industrial opportunities of our time. The Paris Agreement of 2015 commits countries to revolutionising power, transport, heating and cooling, industrial processes and agriculture. The effect of these changes will be felt across the economy and will involve the reallocation of trillions of pounds of public and private finance towards the pursuit of cleaner growth. We will take advantage of these trends by developing smart systems for cheap and clean energy across power, heating and transport; by transforming construction to dramatically improve efficiency; by making our energy-intensive industries competitive in the clean economy; by putting the United Kingdom at the forefront of high-efficiency agriculture; by making the United Kingdom the global standard setter for green finance; and, finally, by developing United Kingdom leadership in low-carbon transport across road, rail, aviation and maritime.

Mobility and transport are on the cusp of a profound change in how people, goods and services are moved around our towns, cities and countryside. This is driven by extraordinary innovation in engineering, technology and business models. Our mobility grand challenge will establish a flexible regulatory framework to encourage new modes of transport and business models; seize the opportunities and address the challenges of moving from hydrocarbon to zero-emission vehicles; prepare for a future of new mobility services, increased autonomy, journey sharing and a blurring of the distinctions between private and public transport; and explore ways to use data to accelerate development of new mobility services and enable the more effective operation of our transport system.

Finally, our grand challenge on ageing recognises our obligation to help older citizens lead independent, fulfilled lives. Our population is ageing, creating new demands for technologies, products and services, including new care technologies, new housing models and savings products for retirement. It is important that we get this right. To do so, we will encourage new products and services for the growing global population of older people, meeting important social needs and realising the business opportunity for the United Kingdom; we will support care providers to adapt their business models to changing demands, encouraging new models of care to develop and flourish; we will support sectors to adapt to a changing and ageing workforce; and, finally, we will explore the application of our health data to improve health outcomes and UK leadership in life sciences.

In addition to the work we are doing on the foundations of our productivity and our grand challenges, we are finding new ways of partnering with businesses. In the Green Paper we asked businesses if they would like to agree sector deals—strategic, long-term partnerships between industry and the Government, backed by sizeable private sector co-investment. The answer was an emphatic yes. We have already published deals in construction and life sciences, and in the coming weeks we will publish deals with the artificial intelligence and automotive industries. We set out our criteria for future deals in the White Paper and look forward to continuing our conversations with different sectors about their proposals.

The scale of ambition in our industrial strategy is clear and we can deliver on this only if we work in partnership. We will use the framework set out in the strategy to work with industry, academia and civil society in the years ahead to build on the United Kingdom’s strengths, make more of our untapped potential, and create a more productive economy that works for everyone across the UK. We believe that by acting now, the United Kingdom can lead from the front. Our strategy is all about seizing opportunities to put the United Kingdom at the forefront of the industries of the future. Our vision is that the United Kingdom will have good jobs and greater earning power for all, make a major upgrade to our infrastructure, be the best place in which to start and grow a business, and have prosperous communities across the country.

As I said, in the next month we hope to be concluding sector deals with the automotive, artificial intelligence and construction sectors. Alongside this, we are in ongoing negotiations to create nuclear, industrial digitalisation and creative industries sector deals. We will also be making progress in other areas, including setting up the industrial strategy council; developing our four grand challenges and appointing business champions for each of those challenges; and making further allocations of the industrial strategy challenge fund. Other departments—I emphasise that this is a government-wide White Paper—will also be setting out strategies designed to support the industrial strategy, such as Defra’s upcoming 25-year environment plan.

This is a strategy for the long term, involving all of government, which will evolve and adapt to respond to the challenges of the future. But, as set out, it is also taking action now to ensure that we make the most of our strengths, opportunities and untapped potential. I beg to move.

Industrial Strategy

Lord Henley Excerpts

Monday 8th January 2018 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Henley) (Con)]

My Lords, it seems a long time since 3 pm, but I am pleased to say that my right honourable friend the Secretary of State for Business, Energy and Industrial Strategy is still in place, and was able to come here and be greeted by the noble Lord, Lord Bhattacharyya, some hours ago.

In saying that, I pay tribute to my right honourable friend. It was a little over a year ago that he launched his Green Paper on industrial strategy. He then listened to some 2,000 responses to it, including from my noble friend Lord Heseltine, whose response came some time in November, just after I joined the department. I make the point that it was my right honourable friend, plus my noble friend Lord Prior and others, who worked together in the department with officials and other colleagues across government in distilling that Green Paper and its responses into the White Paper that has been broadly welcomed by many on all sides of the House.

Given the coverage of this debate, it will be impossible for me to try to distil its essence, as the noble Lord, Lord Fox, put it, or even to respond to a mere tithe of the points made. However, I hope to write to all noble Lords in due course. I cannot respond to all the points made due to the sheer range of the debate and the fact that it extended way beyond the remit of the Department for Business, Energy and Industrial Strategy. I make no complaint about that as it is quite right that it should have done so. As my right honourable friend made clear in his original Statement, this is a matter for not just BEIS but the whole of government. As noble Lords will be well aware, that is why we have had to respond to issues around migration policy and regional and local government.

Regional and local government was mentioned by my noble friend Lord Cavendish, when he talked about Cumbria, and by the noble Lord, Lord Wrigglesworth, who talked about the rather more successful position in Teesside compared with the less successful transfluvial problems—if that is the right word—in Tyneside. These are matters that I think most of us would hope that some of the local authorities, particularly in Cumbria, would deal with. However, the noble Lord was right to talk about the situation in Tyneside. If the local authorities could get their act together—to use that expression—those matters might be addressed. However, I also note what my noble friend Lord Heseltine said about regional matters and the need to move on from the seven directly elected mayors and possibly see further reforms. However, as I said, it has to be for some of the local authorities to come together, think about how they could improve things and, possibly in some cases, as a result, reduce the number of councils that my noble friend talked about.

As I said, we have covered a very wide range of subjects. I think there has been broad agreement about the direction of the industrial strategy but, as I said, we moved on to talk about education and place. The noble Baroness, Lady Valentine, talked about Blackpool. I think that most of us on both sides of this House have been to Blackpool many times. We have not been for some years but perhaps the time to do so will come again. Again, it would for Blackpool to sort these things out. There might come a time when we will go back to Blackpool again in the future.

The noble Baroness, Lady Coussins, talked about language skills, some possible omissions in the White Paper and whether more needs to be done in that area. We heard about social enterprise from the noble Lord, Lord Bird. My noble friend Lord Flight mentioned possible miscalculations in how we estimate our levels of productivity. We heard the natural optimists speaking. I refer to my noble friend Lord Willetts and the noble Lord, Lord Bhattacharyya, who talked about what has happened in the automotive industry. I am very grateful that there have been optimists in this debate. Dare I say that in the noble Lord, Lord Eatwell, and possibly the noble Viscount, Lord Chandos, we had some more “Eeyoreish” representations? The noble Lord, Lord Eatwell, does not like that word, but I do not think that he was quite so optimistic in his evaluation of the White Paper as some other speakers.

I would like to go back to two of the earlier speakers. It is rather a terrifying position to be in, to follow both the grandfather of industrial strategies, if I can refer to my noble friend Lord Heseltine in that way, and the godfather of industrial strategies, as he was referred to, in the noble Lord, Lord Mandelson—he now gives a rather godfatherly little smile; I do not know what it means. I was very grateful to both of them for their broad welcome. I want to pick up some of the points, and particularly what the noble Lord, Lord Mandelson, said, which was echoed by others—I am thinking particularly of my noble friend Lord Griffiths—on delivery and what happens next. I could easily repeat what I said in my opening remarks, but that was broadly about what has happened and the launch of the White Paper.

The noble Lord, Lord Mandelson, made it clear—I think that I have got him right—that he wants three things. He wants all Ministers—the whole of the Government—to take ownership of the industrial strategy. I give him an assurance that that will happen and that all Ministers have been involved in it. That is why the debate itself has gone so wide. He also made it clear that he felt that publishing it is not the job done, and that we need follow-up and continuity, a point echoed by the noble Lord, Lord Mair. Again, I give him the assurance that that will happen and that, with the creation of the industrial strategy council and with the Cabinet committee chaired by my right honourable friend the Prime Minister already in place, we hope to see the continuity and drive to continue with the White Paper. I cannot give detail about the remit of the industrial strategy council as the noble Lord, Lord Fox, would like, but in due course that will come, and I may be able to help him in writing. I hope that there will be further announcements as we move on into the spring, and so on.

My noble friend Lord Heseltine also made those three points about how we should move on. He felt that it was very important that there was a competitive unit in the Cabinet Office. However, I felt that he was rather dismissive—I hope that I have got him wrong—about what the industrial strategy council might be able to offer to that. He felt that it was merely going to react to events rather than being there to inform as well as to evaluate our industrial strategy. I hope that my noble friend will observe what happens in future and that it will bring him some satisfaction.

Again, my noble friend—and this was echoed by so many others in the course of the debate—spoke about the need for education and training, and about the long tail that exists in our schools and in all other teaching institutions, which is not very adequate. There have been considerable improvements over the last few years, particularly in certain areas. For example, if he looked at education in London, he would find that there have been very major increases—and again this is not merely a matter of this Government or of the coalition Government; it has been happening gradually throughout all Governments. As my right honourable friend said when he originally launched the White Paper, the important thing is to remember the regional imbalances that exist in this area. Certainly, we want to look at the tail as it exists not in London but in other parts of the country. Those of us from the north-east—I am myself from the north-west—know just where those areas are, but we are talking about not only the north but other parts of the country. We want to see those changes in education there that we have seen in London. The same is true for training and in all other respects.

His third point was about overcentralisation. He praised the seven directly elected mayors and wanted to see more. I could not agree more. What I said about local government reform and what local government itself can do applies in that area. I hope that both my noble friend and the noble Lord, Lord Mandelson, will accept that we are absolutely committed to making sure that we can see progress with the White Paper, that all Ministers will play their part in driving it forward, and that, with the creation of the industrial strategy council, we will see progress in this area.

I want to cover one or two other points in the short time available, in particular some of the matters dealt with by the noble Baronesses, Lady Young and Lady Randerson, relating to inequalities in regional infrastructure and transport. We have already announced quite a lot of investment in transport. The noble Lord, Lord Fox, asked me to do some sums and say how much was left. I am afraid I cannot do that and am not sure if such a sum is available. However, there have been announcements of further funds of £840 million going to the mayoral combined authorities for transport infrastructure through the Transforming Cities Fund. We are also rebalancing the toolkit that will provide a framework for support with high-value transport investments in the less productive parts of the country.

Moving on from inequalities and the problems we have in regional infrastructure, the noble Lord, Lord Hollick, quite rightly made a point, which I fully accept, about not investing enough in digital infrastructure to meet the challenge. We are seeking action to improve connectivity, and this is very important for all businesses and consumers in the United Kingdom. We are working, as far as we can, with industry and Ofcom to ensure that connectivity is there where people live and work and—just as importantly—when they travel. We have announced additional funds for digital infrastructure and hope to make progress in that area.

That brings me on to the sector deals, which I will say a little about. They were first raised by the noble Lord, Lord Kakkar, who talked about the life sciences industry and its sector deal. He made a reference—though it was possibly the noble Lord, Lord Crisp—to the excellent report by Sir John Bell in this area, which I commend. It was almost the first thing I read when I arrived in the department, with the exception of the Made Smarter report referred to by the noble Lord, Lord Fox, which I have read most of, although I have to admit I have not got up to the 256th page. We very much welcome Sir John Bell’s report and accept that, through the life sciences sector deal, we are boosting the pretty good position of our world-leading research base and making use of the NHS’s status as the biggest single player in the healthcare system. We will also be able to make use of all that NHS data—another advantage that this country has—while making it important to respect patients’ privacy.

Moving on to the construction industry sector deal, I was grateful for what the noble Lord, Lord Mair, said. Again, he took a positive approach, as he did in the example he gave us—which, again, I remember was given to me very early when I arrived in the department—of the difference between the construction of the Tottenham Court Road and Liverpool Street Crossrail stations. One was built on-site and the other off-site, and enormous productivity gains were made as a result of building the Liverpool Street station, in effect, somewhere up in Derby and then shipping it down. We also had praise for the sector deals from my noble friend Lord Griffiths. There is a good story to tell there, which marks this strategy out from previous industrial strategies.

I do not know whether at this stage I should go on much further in trying to answer questions or whether I should stick to that offer of a promise to write to all noble Lords. However, if I go back to the noble Lord, Lord Mandelson, who used the expression—if I remember it correctly—“A good White Paper; now what?”. It is a significant milestone but it is not, as I said, the end point. It sets out what I hope will be a clear ambition and a clear framework with a series of policies that support it. It is up to us in government, and in politics more generally, to work with businesses, academia and civic society to do what we can to boost productivity and earning power and to reduce those inequalities that we talk about and which we refer to in our White Paper, and to ensure that we can rapidly respond to the changes in the economy. The White Paper sets out the framework for that delivery. We are now aiming to implement the policies set out, including those four grand challenges I mentioned earlier and the local industrial strategies and sector deals. There are a whole host of ways to be involved, but the Government’s programme is ambitious. It is a modern industrial strategy, however many industrial strategies we have had in the past—I leave it to the noble Lord, Lord Hennessy, to count up and decide whether he thinks there are eight, nine or even 10, or whether he accepts the more optimistic view of my noble friend Lord Willetts, who talked about some of the more effective industrial strategies, such as that in the automotive industry, and the others there have been over the last 30 years.

We have a long-term plan, which is to boost productivity and the earning power of people throughout the United Kingdom. We also have significant economic strengths on which we can build—again, despite what the noble Lord, Lord Eatwell, had to say—but we also need to do more. We will boost productivity and our earning power across the country by focusing on those five foundations of productivity: ideas, people, infrastructure, business environment and places.

Motion agreed.

Carbon Capture and Storage

Lord Henley Excerpts

Wednesday 20th December 2017 Lords Chamber

[Lord Oxburgh]

To ask Her Majesty’s Government when and how they intend to respond to the September 2016 report of the Parliamentary Advisory Group on Carbon Capture and Storage.

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Henley) (Con)]

My Lords, I am grateful for the report of the Parliamentary Advisory Group on Carbon Capture and Storage, which the noble Lord led. Our response was set out in our Clean Growth Strategy, published in October, and I can only apologise to the noble Lord that we did not write to him to let him know. His report has been and will continue to be a key consideration in shaping our ongoing work.

[Lord Oxburgh (CB)]

My Lords, I am grateful to the Minister for his apology. It was a little surprising not to have received a reply to a report commissioned at a time of some desperation in the former department of DECC, when the Chancellor pulled the rug from under the department’s energy strategy. The group was set up by Amber Rudd, the then Secretary of State, and the noble Lord, Lord Bourne, who was then the Energy Minister here.

Will the Minister write to me—I will transmit his reply to the rest of the committee—giving an answer to each of the six recommendations that the report contains? That we have not had, and it is not contained within the clean energy strategy. Furthermore, he will recall that the report contained a detailed and carefully worked-out time plan for decarbonisation of the country’s energy system. As things now stand, it looks as though the Government have lost about a year on that fairly prudent plan. Does he agree that this means that the fifth carbon budget will now be something of a stretch? It would be good if he could also place in the Library a copy of a new plan.

[Lord Henley]

My Lords, I repeat the apology I gave to the noble Lord. I will certainly write to him and place a copy of my reply in the Library, with a full response to the six points that he makes in his recommendations—I have a copy of his report here and I have studied it. I also assure him that it remains a priority to work on both zero-growth and low-growth options. My honourable friend Claire Perry is committed to that and we will do all we can. As the noble Lord will be aware, in our industrial strategy we made it quite clear that we saw clean growth as one of the major challenges facing us. It is one of the grand challenges and very much a priority for the department.

[Baroness Liddell of Coatdyke]

My Lords, I refer to my entry in the register of Members’ interests. I make the point to the Minister that the report of the noble Lord, Lord Oxburgh, actually shows that carbon capture and storage is affordable. The fact that the Government have ignored that report—and I welcome their statement today—together with the cancellation of the competition, and now the fact that we are perhaps seeing carbon capture and storage by 2030, leads to some doubts about the passion of the Government for this aspect of industry. Will the Minister guarantee that those involved in the clean growth strategy will at an early point in their meetings in the new year look in some detail at how to move this forward? We have already lost competitive advantage to Norway, which is already in this country selling its capability with carbon capture and storage.

[Lord Henley]

The noble Baroness is right to stress the importance of carbon capture. In fact, I visited Imperial College, of which the noble Lord, Lord Oxburgh, was a very distinguished rector in the past, where I understand considerable research is being done into carbon capture. I hope to visit that in due course.

As for the other points that the noble Baroness made, yes, we accept the importance of this, and we will respond—I shall respond in a letter. We will continue to do work on this. As regards the cancellation of the competition in 2015, the noble Baroness will be aware that very difficult decisions had to be made in budgetary terms, which was why that decision was made at the time—and that is what we said at the time.

[Baroness Featherstone (LD)]

My Lords, obviously, everyone is agreeing that carbon capture and storage is absolutely vital to an emissions reduction programme, but the certainty that business had and its faith in the Government was shot to pieces by the removal of the manifesto pledge for the £1 billion and its replacement with £100 million. What will the Government do to restore confidence and certainty to green finance and green business, which is vital to the future of our economy?

[Lord Henley]

My Lords, I have dealt already with that change in 2015 about the removal of the £1 billion. The clean growth strategy sets out—and I make this point to the noble Baroness—that there will be further investment now as a result of the clean growth strategy. Some £2.5 billion is being invested by the Government to support low-carbon innovation between now and 2021. As well as that investment from the Government, as I said, there is considerable other investment, both in academe and in industry, to look at other possibilities.

[Lord Howell of Guildford (Con)]

Further to the intervention from the noble Lord, Lord Oxburgh, on the work of his committee, would not it make more sense to give a priority to investment in clean coal through carbon capture and storage, supercritical boilers and other means of reducing carbon, rather than reinforcing and subsidising the burning of wood pellets, which is going on now, which means tearing down the world’s forests and generating quite a lot of additional carbon?

[Lord Henley]

Well, my Lords, we are where we are. I rather agree with my noble friend about the importance of zero-carbon options, and that is why we want to look at carbon capture and storage. But we should look not only at zero-carbon options but also at low-carbon options.

[Lord Grantchester (Lab)]

My Lords, the clean growth strategy will still keep the UK on track to miss the fourth and fifth carbon budgets. The report of the noble Lord, Lord Oxburgh, whom I congratulate on his drive to take this technology forward, went into detail on how CCS could help to achieve these budgets. As for the energy-intensive industries, would the Minister agree that CCS would be a better value answer to these polluting industries than merely giving them dispensation from paying for climate control measures that every other industry has to adhere to?

[Lord Henley]

My Lords, I do not accept what the noble Lord says about us missing the fourth and fifth targets. We will do what we can to meet them; it will be difficult, but that is why we made it quite clear in the industrial strategy and the clean growth strategy why we want to invest in this area.

Energy: Domestic Tariffs

Lord Henley Excerpts

Tuesday 19th December 2017 Lords Chamber

[Lord Naseby]

To ask Her Majesty’s Government whether they plan to review their policy on capping domestic energy prices in the light of measures taken by the energy industry to change tariffs to help those most at risk, and to increase competition.

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Henley) (Con)]

My Lords, it is the Government’s intention to legislate, and a draft Bill is currently undergoing pre-legislative scrutiny by the Business, Energy and Industrial Strategy Select Committee. The Government will consider the committee’s report before making the final decision on introducing the Bill. The Competition and Markets Authority found a very significant detriment to consumers, and it will take meaningful and long-lasting reform to be assured that there is effective competition across the whole of the market.

[Lord Naseby (Con)]

My Lords, I find that a very interesting Answer. When will Her Majesty’s Government look at what Ofwat has done for water consumers, to their benefit, and decide that Ofgem can do an equally good job? Surely Her Majesty’s Government can see that there may not be perfect competition, but there is certainly a lot of competition, with new entrants coming in all the time, and there is an extensive number of schemes to help the disadvantaged. How can a totally uncosted subsidy help when all it will do is disrupt the market even further, above and beyond what is already happening through the Government’s green taxes?

[Lord Henley]

My Lords, Ofgem does a very good job, just as my noble friend has made it clear that Ofwat does a very good job. We agree with Ofgem that the energy market is not working for all consumers, and we are determined to address the detriment suffered by those overpaying for their energy. Because the market is not working, we feel that it is necessary to consider introducing a Bill, which is why we have introduced the draft Bill and sent it to the appropriate Select Committee. When the committee has produced its report, we will consider the appropriate way forward and introduce legislation if necessary. That legislation will be temporary, and we hope that afterwards the market can work slightly better.

[Baroness Featherstone (LD)]

My Lords, poor housing standards are the main cause of high energy bills. Could the Minister explain the thinking behind getting rid of the zero carbon homes standard?

[Lord Henley]

My Lords, the noble Baroness is quite right to say that bad insulation is not good for heating bills, so we would like to do better on that front. I would prefer to write to the noble Baroness in greater detail on the point she raised, but we are doing what we can to help all more vulnerable consumers with their heating bills. She will be aware of the warm home discount and the cold weather payments; and there is the winter fuel payment, which quite a number of noble Lords probably benefit from and which is worth up to £300 for a couple and £200 for an individual.

[Lord Hunt of Kings Heath (Lab)]

My Lords, the noble Lord says that Ofgem is doing a good job, but over the last few years we have seen evidence that the industry raises prices as quickly as possible and reduces them—when the international market shows a reduction in prices—as slowly as they can. Has Ofgem not used all the powers it has to intervene in the market?

[Lord Henley]

My Lords, what I made clear in response to my noble friend’s supplementary was that I believe Ofwat has done a very good job. Ofgem can do a very good job, but we agree with it that the energy market is not working as it should, possibly for the reasons the noble Lord has pointed out. That is why we have brought forward a draft Bill and are looking at what it might do. We will respond after the BEIS Select Committee has produced its report on that Bill.

[The Lord Bishop of Winchester]

My Lords, the Church of England has partnered with several organisations in an initiative called the Big Church Switch, which seeks to provide consumers with better prices from the UK’s cleanest energy suppliers, to make switching simpler and to protect the environment. What steps are Her Majesty’s Government and Ofgem taking to learn from such initiatives as this to enable consumers to make informed choices, both financially and environmentally?

[Lord Henley]

My Lords, I am grateful to the right reverend Prelate for bringing to the attention of the House the Big Church Switch. Other people offer advice on how to switch, and there is a great deal that individual consumers can do about switching their energy and getting reductions. The simple fact is that most people do not know about this, which is why we are working through the government-funded Big Energy Saving Network to try to get more information across. We are very grateful for the work the Church is doing as well.

[Lord Howell of Guildford (Con)]

My Lords, would not one obvious way of achieving cheaper energy prices be to produce in this country rather cheaper electricity and to make less costly the reduction of CO₂ in the atmosphere? Would that not require cheaper nuclear power and cleaner methods of coal-burning, which can be very cheap if it is clean? Is our present energy policy not going in exactly the opposite direction?

--- Later in debate ---

[Lord Henley]

My Lords, we are seeing reductions in the price of renewable energy and we are working to bring the price of nuclear energy down. My noble friend is quite right: the crucial issue is the price of energy that consumers have to pay, which is why we are helping them to shop around to get the best deal.

[Lord Foulkes of Cumnock (Lab)]

My Lords, is the Minister aware that it is not simple to switch energy suppliers, particularly for older people? In fact, it is easier to switch churches.

[Lord Henley]

My Lords, I know a little about switching energy supplier. I do not know much about switching churches but perhaps the noble Lord can offer some advice to the right reverend Prelates—not that I think they will want to be switching churches at this stage. More seriously, the noble Lord is right to draw attention to the fact that not enough people know how to set about switching energy. Sophisticated people like him know that they can go online and do it, but that is much harder for older people—people even older than the noble Lord himself—who are possibly less technically sophisticated than he is. This is why we are offering help and funding the Big Energy Saving Network, which we hope will provide assistance to vulnerable consumers.

European Structural and Investment Funds

Lord Henley Excerpts

Tuesday 12th December 2017 Lords Chamber

[Baroness Pinnock (LD)]

My Lords, I beg leave to ask the Question standing in my name on the Order Paper. In doing so, I draw Members’ attention to my relevant interests in the register.

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Henley) (Con)]

My Lords, over 50% of the United Kingdom’s structural fund allocation supports businesses, infrastructure and infrastructure development. Under the proposed financial settlement with the EU, the UK will retain its full funding allocation for 2014-2020 structural funds, and will continue to benefit from structural fund programmes until their closure. In the longer term, the United Kingdom shared prosperity fund will be introduced domestically to reduce inequalities and raise productivity in line with the industrial strategy.

[Baroness Pinnock]

I thank the Minister for his response. As he will be aware, the structural fund supports the poorer regions of our country. I draw his attention to Cornwall, where one of the programmes is a £10 million fund to support small business growth, which is vital for Cornwall. That will end in 2020, if we leave the EU. Will the Minister make a commitment that the funding promised in the Conservative Party manifesto, to which he has just referred, will provide the same level of funding for such programmes after 2020?

[Lord Henley]

My Lords, the noble Baroness will not expect me to give commitments of that sort, but she will know that the shared prosperity fund will aim to improve the United Kingdom’s productivity and reduce economic inequalities across the entire United Kingdom. Therefore, some of it will presumably be directed at Cornwall. The important matter that the noble Baroness should be aware of is the fresh opportunity to spend money according to our own priorities rather than those set by the EU. I think that even the noble Baroness would agree with that.

[Lord Watts (Lab)]

My Lords, the Minister will be aware that in the past Conservative Governments have reduced funding to areas that have been in receipt of structural funds. Can he guarantee that in any new scheme there will be no reduction this time and it will be additional? Those reductions are one of the reasons our regions are not as prosperous as they should be.

[Lord Henley]

My Lords, again the noble Lord will not expect me to give any specific guarantees at this stage. He knows why we have introduced the shared prosperity fund and that we also have the Industrial Strategy White Paper. In that White Paper, we refer to the inequalities between the regions, particularly in relation to productivity but also in other respects. It seems to me obvious, therefore, that we would want to devote the shared prosperity fund—the name of which gives some indication of what it is supposed to do—to doing just that.

[Lord Wigley (PC)]

My Lords, the Minister will be aware that Wales has been a significant beneficiary of these funds over the past 17 years. The Government have given an undertaking that they will replace money lost from European sources if we suffer Brexit. Will the Minister enlighten the House as to the criteria that will be used to ensure that the money goes to those areas that need it most?

[Lord Henley]

My Lords, the way that the Welsh voted in the referendum probably gives some indication of what they think we are likely to do with things such as the shared prosperity fund. The Welsh have considerable faith in how this Conservative Government will direct resources from the fund. Again, the noble Lord will not expect me to give any guarantees at this stage.

[Baroness Smith of Basildon (Lab)]

My Lords, if the Minister thinks the people in Wales have confidence in this Government, I suggest he thinks again. Several times today, he has said that he can give no guarantees. The European structural and investment funds have brought enormous benefit to the areas in receipt of them. So many times in this Chamber, we have heard about the cost of the EU as if all the funding has gone in one direction from this country to the EU, and that we have had no benefit. This is an indication of benefit that has been received by the UK. Will the Minister reconsider his answer? What guarantees can he give that these areas will not lose out by this country leaving the EU?

[Lord Henley]

My Lords, the noble Baroness should listen very carefully to my answers. The guarantees I was giving were about the future of the shared prosperity fund. I can give categorical guarantees about European structural funds for 2014-20. Those guarantees will continue to stand, as has been made clear by my right honourable friends in another place. They will stand in a no-deal scenario, and all projects that were signed up to before the Autumn Statement of 2016 will be guaranteed by the Government after the United Kingdom leaves the EU.

[Lord Deben (Con)]

My Lords, my noble friend has said that in the future these decisions will be made by Britain, not the European Union. Can he explain precisely the difference in criteria between those used by the European Union at the moment, and those that he will use, and how, if he uses different criteria, he will also meet the promise that all those places that now receive money will continue to do so?

[Lord Henley]

My Lords, I did not say there would necessarily be different criteria. I said—and I am sure my noble friend would agree with this—that the decisions would be made by us and not by the EU.

[Lord Goddard of Stockport (LD)]

My Lords, perhaps a fifth time might get the right answer. Will the Minister confirm whether the £21 million investment in the Greater Manchester low carbon and innovation fund will be funded if we leave Europe, following a hard Conservative Brexit? There are 2.8 million people relying on the answer, so for brevity, perhaps “yes” would suffice.

[Lord Henley]

My Lords, again I ask the noble Lord to listen to what I have to say. I gave a categorical guarantee about the financial settlement and structural funds that have been agreed as part of the 2014-20 funding. I do not know about the specific project to which the noble Lord referred, but if it is included, it will be guaranteed. We have also made a guarantee about a no-deal scenario that all projects that were signed up to before the Autumn Statement 2016 will be guaranteed by the Government after the United Kingdom leaves the EU.

[Lord Pearson of Rannoch (UKIP)]

My Lords, are we not talking about only £1.2 billion per annum in this Question? Surely we can go on paying that if we want to from the £20 billion per annum we will be saving by leaving the EU.

[Lord Henley]

My Lords, the noble Lord thinks that a billion pounds is a small amount of money. I think someone did once say, “A billion here, a billion there, and we are soon talking real money”. We are talking about considerable funds—some £8.6 billion over that period, which is a considerable amount.