Electric Vehicle Battery Production

Lord Naseby Excerpts

Monday 23rd January 2023 Lords Chamber

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

No, is the short answer to the noble Lord’s question. Of course, before we make any government money available, we do the appropriate due diligence. As a result of this work, the funding was designed so that agreed milestones had to be achieved for the company to draw down substantial amounts of taxpayers’ funds. In the event, it was not able to meet those milestones, so the money was not handed over. I am sure the Opposition would like us to be careful with public money. If the alternative had happened and we had handed over the funds and the company had still gone into administration, I am sure the noble Lord would have been on his feet demanding an inquiry into why we had been so careless with public funds.

[Lord Naseby (Con)]

My Lords, given that, as I am sure my noble friend agrees, gigafactories are a vital part of our industrial infrastructure going forward, is there not a case for publicly stating that they must be home grown and for calling together successful UK companies such as Rolls-Royce and BP, and entrepreneurs such as Sir James Dyson, to try to find a structure that will take this forward? Unless something like that happens, is it not a fact that it will result in imports from China?

[Lord Callanan (Con)]

The Government stand willing to talk to any manufacturers that want to establish such facilities. There have already been a number of excellent investments in the UK, supported by the automotive transformation fund. The site in Cambois that was going to be developed by Britishvolt remains available. Subject to the decisions of the administrators and the local authority, we very much hope that a project can be taken forward there.

Energy Bill [HL]

Lord Naseby Excerpts

Committee stage
Monday 12th December 2022 Grand Committee

Amendment 122 is to ensure that the powers contained in the Bill are used with purpose and in a timely manner. I have asked for officials to meet members of the hydrogen industry, particularly those conducting real-world trials of hydrogen in the gas grid, as well as the unions, to talk through the impact of the amendment. It is our understanding that no engagement on this clause has taken place with industry or the unions. I beg to move.

[Lord Naseby (Con)]

On Amendment 121, the Minister knows as well as I do that extensive work is being done on a 20% hydrogen/natural gas trial to provide central heating, et cetera, in homes. If that is the situation, either this amendment should be accepted or perhaps the Minister could explain how it will be possible for that work to continue.

[Baroness Sheehan (LD)]

I rise in support of Amendments 117, 118 and 122. If we are to move towards cleaning up heat, we really need to get on with it and put sensible deadlines in place rather than leaving it open-ended, as it currently stands in the Bill.

Amendment 118 tightens up what needs to happen by when and makes some very sensible suggestions on timeframes for

“the banning of the installation of unabated gas boilers in new properties from March 2025 … the banning of the sale and installation of unabated gas boilers in all properties after March 2035.”

We need to get on with this. I support the amendment wholeheartedly.

Likewise, Amendment 122 would introduce a deadline

“to include the number of heat pumps in the latest figures on recommendations from the CCC.”

On Amendment 121, like the noble Baroness, Lady Worthington, I add my note of caution about reliance on hydrogen. It is an unproven technology. There are ample studies and research that point to there being substantial barriers before it can be delivered at a low enough cost. Not least, there are technical difficulties: we know that the existing pipelines will not be suitable. So it will not be a straightforward case of replacing a natural gas boiler with a hydrogen or blend boiler. There are far greater changes that need to be made to the whole infrastructure before deployment.

Energy Security

Lord Naseby Excerpts

Monday 5th December 2022 Lords Chamber

[Lord Callanan (Con)]

I disagree fundamentally with the noble Baroness. Sizewell C is an important investment. It is still at the planning stage at the moment. We will secure the funding for it and we will bring it on stream as quickly as we possibly can.

[Lord Naseby (Con)]

My Lords, I welcome my noble friend to the Front Bench again. This was a very important Statement, and I can think of no better man to handle this very challenging area faced by His Majesty’s Government. On the nuclear issue, can he reassure me that the small modular reactor programme from Rolls-Royce will not be side-lined? It seems to me a very exciting project—one that, to date, has gone well with the company, as I understand it, and with those who are working closely with it.

Secondly, as he knows, I have a genuine interest—it is nothing to declare—in what is termed in the Statement “nascent hydrogen”. I personally believe that we will see, quite possibly, a similar revolution to that which we saw when we moved from coal gas to North Sea oil. In this instance, it will be a mixture of gas from the North Sea and hydrogen. If that were to happen, that would be a major step for every household in the United Kingdom. Can I be reassured that that will not be forgotten, and that hydrogen is vitally important, not just for normal usage but for the air industry, in which I also have an interest, as my noble friend knows?

Finally, just on renewables, I did a little bit of research on offshore winds in the current situation. At this point in time, things are not going well. The primary problem appears to be that National Grid is unable to give a guarantee to connect to the main transmissions until 2030. Quite frankly, that is totally unacceptable for an industry that has done well, in which we have major investments. Somebody needs to shake it up somehow so that those on the offshore and the future investments know that they can speedily get connection to the grid.

[Lord Callanan (Con)]

I thank my noble friend for his questions. I also thank him for welcoming me back to the Front Bench, although I was not aware that I had ever left it. Nevertheless, I am sure that his concern is well thought, and I thank him for that.

On SMRs, we are indeed continuing to support Rolls Royce; the figure is about £200 million-worth of support to accelerate the design of SMRs, because they will have a key role to play. My noble friend also asked me about hydrogen. We have a very advanced hydrogen strategy and will shortly be rolling out a business model. I can tell him that hydrogen for heating is not yet an established technology in its scalability. We have the ability to blend about 20% hydrogen into the current gas main, and in the Energy Bill, which we will shortly be considering, we are taking powers to conduct village-scale trials of hydrogen to check its feasibility for heating. I think it is more likely that the use of hydrogen will be in the sectors that are hard to decarbonise, such as steel or cement, or for really big, heavy, long-distance transport, such as locomotives or heavy goods vehicles.

My noble friend also makes a good point about the grid connections. As we seek to move the electricity system generally away from big nodes to a much more diversified system, clearly that requires an awful lot of new connections to be made. That is generally by pylons, but these can be extremely unpopular in various parts of the country. Nevertheless, that is something that we need to proceed with, but we need to try to do it in collaboration with local communities. Every offshore wind farm needs to be connected to shore and into the national grid to parts of the country that use the power. So there is a massive reconfiguring of the grid going on, with massive amounts of investment to bring that about. It is a project that will take many years to bring to fruition.

Battery Strategy (Science and Technology Committee Report)

Lord Naseby Excerpts

Wednesday 23rd November 2022 Grand Committee

[Lord Naseby (Con)]

My Lords, I wholeheartedly welcome this report from the noble Lord, Lord Patel, and his committee. It is absolutely timely. While it focuses primarily on vehicles, I would like to look at the broader scene a little bit. However, before doing so, I declare an interest in that I have a modest equity holding in a couple of stocks that are quoted on the London Stock Exchange. They are hydrogen companies.

I start with the report from Goldman Sachs, which appeared in the Financial Times either last Saturday or the one before, in which it highlighted the fact that the US and Europe can cut their dependence on China for electric vehicle batteries through more than $160 billion in new capital expenditure by 2030. It pointed out that China today produces three-quarters of the world’s batteries and dominates production of their materials and components, citing the fact that in the USA

“South Korean conglomerates LG and SK, who have been attracted by massive subsidies from US taxpayers”,

are forecast to achieve from 11% to 55% of that market in a three-year period. The question arises, if the US can do it, why on earth are we not parallel with the US? Clearly, we are not—we are clearly behind the curve.

Rather than repeating what the committee has said, I thought that it would be more helpful to look at a case history with which I was involved, to some degree, when I was on the Select Committee on energy in the other place: the change from coal gas to North Sea gas. That was a massive change, with 40 million households converting to North Sea gas, involving at least 30,000 men and women to do all the work over a period of time. That was a huge achievement, and it was done well—partially because there was a workforce there to do it. It seems that one of the key elements that is not quoted in this report is the involvement of our unions today. Two unions stood out at that time: the GMB and UNISON. If you talk to them today, as I did a few days ago, you will find that they worried stiff about the necessary labour force. Only 12% of the relevant labour force is under 30, yet we should look at the situation with BT, which is laying off its older workforce. So one of the challenges that His Majesty’s Government need to look at is the workforce. That means looking at every level in that area, including our universities, technical colleges and apprenticeships. It may be happening—I do not know—but I would welcome hearing from my noble friend the Minister that the Government are aware of that challenge.

Of course, that particular challenge is not just domestic because, in terms of hydrogen being inserted into existing natural gas, probably at a 20% level, gas is firing our factories up and down the country—so that, again, is another massive challenge. So I ask my noble friend on the Front Bench for reassurance that he recognises that, while the vehicle market is absolutely vital, there are industries alongside that which will produce the goods and facilitate the conversion of our boilers up and down the country from the existing pure natural gas to some combination of natural gas and hydrogen.

Government Departments: Communication with Industry and Commerce

Lord Naseby Excerpts

Monday 14th November 2022 Lords Chamber

Asked by

[Lord Naseby]

To ask His Majesty’s Government what steps they are taking to improve communication between government departments and (1) businesses in the City of London, and (2) industry and commerce in general.

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

My Lords, departments meet regularly to ensure that government communications with business are clear and consistent. BEIS’s primary way of engaging with business is through dedicated sector teams that provide expert engagement with sectors, mainly large companies and trade and professional bodies. Treasury Ministers and officials meet regularly with representatives from financial services firms, including those based in the City of London, on a range of matters from regulatory reform to the broader state of the UK economy.

[Lord Naseby (Con)]

Is my noble friend aware that that Answer and the depth of it will be enormously welcome to the CBI, the City, the chambers of commerce, and in particular some of our huge and expanding companies, because they have not felt part of decision-taking in our country in recent years? Bearing in mind that we need to get our growth rate up as we move forward, will he please ensure that the statement he has made today is implemented on the ground so that when I next contact the various bodies I have mentioned in a year’s time, they will say thank you to the Government for making sure that communication is now back on track?

[Lord Callanan (Con)]

I assure my noble friend that communication is very much on track. The first meeting that the new Business Secretary had following his appointment was with the “big five” business representative organisations, which collectively represent around 750,000 businesses.

Economy: The Growth Plan 2022

Lord Naseby Excerpts

Monday 10th October 2022 Lords Chamber

[Lord Naseby (Con)]

My Lords, what joy it brings me to see my noble friend on the Front Bench and what a speech she gave to the House this afternoon.

I am very happy with the new Prime Minister and Chancellor. I joined the Conservative Party in 1964, and the basic tenets of the party at that time were almost identical to what we are being offered today. I fought my seat in Northampton South in February 1974. I was told that I would not win, that it had been a Labour seat all its life and that there had never been a Conservative in Northampton. I fought that seat on the basis of what I have just described, with energy, determination and enthusiasm. What the Prime Minister is bringing to our nation is energy, huge effort, enthusiasm and commitment to the basic philosophy of the party I joined so long ago and continue to support wholeheartedly.

My goodness, what challenges she faced on the day she became Prime Minister: the world facing its fifth wave of debt, inflation rising far too fast, energy supply and pricing a huge challenge, and, on top of all that, Ukraine and Russia. There was no time to really prepare for any of that, yet somehow she and her team, in a very limited time, did a huge amount of work that is manifesting itself now. My friend the noble Lord, Lord Lupton, may well be right that some of the elements could have been better put together, but you have to look at the time span. Does nobody understand the sheer pressure of having fought to be leader of our party for a whole month and then being thrown in? She and her team have succeeded. It is a truly great achievement.

My noble friends need to understand that one element is missing. There is one word missing: communication. I spent my economic career in the marketing world, and part of that time as the director responsible to the Central Office of Information for whatever campaign the Government of the day decided needed to be communicated. I say to my noble friends on the Front Bench that it is no good relying just on TV. There is press, billboards, radio—all sorts of media. Remember that, and please do not forget that it is not unusual to communicate directly to every single household in this country if the need is there. At this point in time, I believe that need is there. It has been done before and ought to be considered again. If that happens and we really communicate well, I am quite sure that this will be a highly successful Government. I look forward to continuing to support them.

Small Modular Nuclear Reactors

Lord Naseby Excerpts

Tuesday 28th June 2022 Lords Chamber

[Lord Callanan (Con)]

We have not made a decision on the relevant business case model—it could be either the RAB or the CfD model—but we will consult on this shortly.

[Lord Naseby (Con)]

My Lords, my noble friend knows as well as anyone that we have suffered an energy crisis and continue to have one. Against that background and the vacillation over the North Sea, which is not my noble friend’s fault, does he not think that, given Rolls-Royce’s history and what it did during the war—twice as quickly as anyone forecast—it is a major company that can really get a grip on this, if Her Majesty’s Government push the button for it to do so?

[Lord Callanan (Con)]

I agree with my noble friend’s point: Rolls-Royce is indeed an excellent company, which is why we are funding it to do this work.

Russian Oil and Gas Imports

Lord Naseby Excerpts

Monday 7th March 2022 Lords Chamber

[Lord Callanan (Con)]

I do not think the noble Baroness is quoting a very good example. The Germans have made a singular mess of much of their policies by phasing out nuclear power, which has resulted in the burning of much more coal. I am not sure that that is an example of what the noble Baroness wants us to follow. We have an excellent plan in this country. We have a much bigger renewable sector than Germany, which puts far too much reliance on gas from Russia and now may well be paying the consequences.

[Lord Naseby]

Going back to Ukraine, is it not a fact that Russian gas is coming to this country by ship, in LNG tankers? In that case, why do we as a country not refuse entry to any of those tankers from this day forward?

Revised Energy National Policy Statements

Lord Naseby Excerpts

Tuesday 22nd February 2022 Grand Committee

[Lord Naseby (Con)]

My Lords, I apologise for speaking in the gap, but I had not realised that we had to have a list in the Moses Room. I shall be brief. I spent a number of years on the Select Committee on Energy in the other place. I very much welcome this framework, this document and the associated ones. As my noble friend just said, since Brexit we are on our own and therefore security of supply is vital.

I will make four key points. I was pleased by yesterday’s debate in our own House on nuclear. That is part of the way forward, and the very exciting bit is the development by Rolls-Royce of the mini-plant concept.

Unfortunately, solar is becoming a little controversial in rural England. The estimate given is that 150,000 acres of good farming land is being taken up every year. On top of the fact that nearly 100,000 acres are already going for other uses, industrial and so on, one has to ask, with regard to the planning decisions that are being made, whether there should be a clause or a requirement for the protection of the national interest. My noble friend may or may not know, but there is certainly considerable concern over the Mallard Pass and Cottam solar farms, and the Sunnica solar farm near Newmarket.

I have one suggestion to make, which was prompted by driving down from Northampton earlier today. There are now hundreds of warehouses across the nation and they all have flat roofs. Every one of those warehouses is an opportunity for solar. We should look at that urgently, put it into the planning requirement for any new ones and put some persuasive methodology ahead for those which have already been built.

On offshore, my noble friend Lord Moynihan covered most of that. However, I went out to offshore when I was in the Commons, and we have to make sure that we continue to explore and use those resources properly.

Finally, on the domestic front, heat pumps are not the perfect answer. They are extremely expensive. Quite frankly, I have talked to some people who have heat pumps and they are not exactly a source of warmth that most people would expect. The answer must lie in low-carbon hydrogen. I know that it is at its very early stages, but we need to move forward with research on that area, both in universities and in other research institutes. We need to give some major incentives to take it forward so that we can neutralise the gas emissions from the 70%-plus of homes that have gas-fired heating.

North Sea Oil and Gas

Lord Naseby Excerpts

Thursday 10th February 2022 Lords Chamber

[Lord Callanan (Con)]

Yes, I realise that it is counterintuitive but supplies are required in different parts of the country. We are importing and exporting. The corollary to the noble Lord’s question would be to say that we seal the borders, disconnect all our interconnection pipelines and import no further LNG—and we would not have enough supplies to satisfy our domestic demand in such circumstances. We import and we export, but the point remains that we are a net importer of both oil and gas supplies.

[Lord Naseby (Con)]

Bearing in mind that the four Governments previous to this one have ignored the role of nuclear—that appears to be the situation—can my noble friend assure this House that we will now see what useful role nuclear can play in giving us, in a sense, a defensive supply?

[Lord Callanan (Con)]

Indeed, my noble friend makes a very good point. The House will shortly have the opportunity to consider the Nuclear Financing Bill, which has its Second Reading on 21 February, I believe.