Rolls-Royce

Lord West of Spithead Excerpts

Wednesday 14th October 2020 Lords Chamber

[Lord Callanan (Con)]

My Lords, when companies announce these decisions it is, of course, a difficult time for all concerned. We are in extensive dialogue with Rolls-Royce and other high-technology companies to do whatever we can, within the limits of what is possible, to retain those jobs in the United Kingdom. I have already outlined the massive and enormous support that we are giving to Rolls-Royce at this difficult time.

[Lord West of Spithead (Lab)]

My Lords, in August, Rolls-Royce reported a first-quarter underlying operating loss of £1.7 billion, £1.2 billion of which was to do with civil aerospace and is Covid related. That is presumably why it has broken an agreement it had with the UK Government and moved work promised to UK workers to Singapore. Rolls-Royce is well placed, looking ahead, to provide low-carbon power solutions with the support of the UK Government—and that government support should depend on its benefit to highly-skilled UK workers. Will the Minister confirm that the Government will prioritise the work by the UK small reactor consortium—building on Rolls-Royce’s long history of providing nuclear reactors to the Royal Navy—thereby ensuring affordable nuclear power operations, and that this work will take place in the United Kingdom?

[Lord Callanan (Con)]

I congratulate the noble Lord on getting the Royal Navy, a matter close to his heart, into his question again. But to be serious, I agree that we need to develop the next generation of small modular reactors, and we are providing support to enable that to happen.

Energy White Paper

Lord West of Spithead Excerpts

Monday 28th September 2020 Lords Chamber

[Lord Callanan (Con)]

In December 2018, the Government launched a new siting progress to identify a suitable location in which to construct a geological disposal facility. This is of course a consent-based process that is looking to identify both a willing host community as well as a location with the suitable geology in which to construct such a geological disposal facility.

[Lord West of Spithead (Lab)]

My Lords, the Minister is well aware of my passion for ships and the need for the Royal Navy to have more, and also my huge support for a sensible nuclear power industry. But I am also delighted that it appears that hydrogen is being considered for future power. Will the Minister confirm that, in the energy White Paper, hydrogen is being addressed and that the supply and demand sides of the hydrogen economy will also be addressed—for example, a push towards hydrogen vehicles?

[Lord Callanan (Con)]

I was wondering how the noble Lord would get warships into this Question, but he has of course managed it. The White Paper will set out the proposals for the use of hydrogen and carbon capture and storage. They are key to our planning as we seek to decarbonise gas by 2050 for net zero, because of the potential they have to allow us to decarbonise both nationally and regionally while creating new, high-value jobs. Hydrogen will be a key part of the energy mix in the future. We are looking very closely at investing in it and we will be setting out a further strategy on that.

Oil and Gas Industry

Lord West of Spithead Excerpts

Tuesday 22nd September 2020 Lords Chamber

[Lord Callanan (Con) [V]]

My noble friend makes a very good point. It will be key to the sector deal to make sure that we can utilise the tremendous expertise across the oil and gas sector both for our own low-carbon transition and to help other countries with theirs.

[Lord West of Spithead (Lab)]

My Lords, the Oil and Gas Authority is only just beginning to take account of the UK’s statutory target for net-zero emissions of greenhouse gases by 2050. Official projections from the Department for Business, Energy and Industrial Strategy take no account of that requirement. Our nation is sleepwalking into an energy crisis of major proportions. National daytime electricity demand is forecast to double from 40 to 80 gigawatts by 2050, when we should have net-zero emissions. Oil and gas will have to be phased out, yet the Government’s industrial strategy does not mention the need to retrain and redeploy oil and gas workers. Although renewables can achieve much, there will always be days when wind and sun cannot meet our demands. Nuclear power provides the green option, yet we are discovering daily that the plan for nuclear power is in growing disarray. How do the Government intend to resolve this imminent crisis of secure nuclear power provision?

[Lord Callanan (Con) [V]]

I do not accept that we are sleepwalking into a crisis. We are devoting huge expertise and energy to planning for the transition. Renewables and nuclear have an important role to play in the transition, as do oil and gas. However, the noble Lord will have to be patient and wait for the energy White Paper, when all these matters will become clear.

Small and Medium-sized Enterprises: Public Procurement Contracts

Lord West of Spithead Excerpts

Monday 7th September 2020 Lords Chamber

[Lord Callanan (Con)]

The noble Lord makes a very good point. We encourage all SMEs that are interested in bidding for public sector opportunities to use Contracts Finder, which lists all tenders over £10,000. SMEs can create an account to get email updates for opportunities that align with their business interests. Public sector contracts are, of course, awarded after a fair and open competition process and commercial buyers are encouraged to ensure that all tenders are suitable for SMEs

[Lord West of Spithead (Lab) [V]]

My Lords, one area where there is a ready-made opportunity for boosting our industrial output and supporting struggling —and, indeed, collapsing—SMEs is defence. The Prime Minister recently stated that our nation requires

“a shipbuilding industry and Royal Navy that reflect the importance of the seas to our security and prosperity.”

Hurrah for that, but our shipyards—and particularly the SMEs that support them—are in dire straits. They need a commitment to a rolling programme of warship building if they are to survive, and the Navy is desperate for more ships. Can I ask the Minister whether this requirement is being given prominence in the current integrated defence review?

Saudi Arabia: Arms Sales

Lord West of Spithead Excerpts

Friday 10th July 2020 Lords Chamber

[Lord Grimstone of Boscobel]

The noble and gallant Lord makes a good point. As I have said previously, we have examined all the incidents and are satisfied that these were isolated incidents that did not display any particular pattern. Our analysis shows that Saudi Arabia has a genuine intent and the capacity to comply with IHL.

[Lord West of Spithead (Lab) [V]]

My Lords, there are a number of Royal Air Force officers and ex-officers—British ex-pats—in Saudi Arabia in the various programmes involving aircraft. Last year, when this was discussed in the House, it was said that one of the benefits of having them there if we were selling arms was that they could give advice about targeting and so on. Can the Minister say whether any Royal Air Force officers, or indeed ex-pats, are involved at all in the targeting process within Saudi Arabia?

[Lord Grimstone of Boscobel]

I do not believe that they are, but in order to give the noble Lord a completely accurate answer to his question, I will write to him.

OneWeb

Lord West of Spithead Excerpts

Wednesday 8th July 2020 Lords Chamber

[Lord Callanan]

Given the commercial considerations, at the time I am unable to provide further detail on our ongoing discussions. However, we will have strong representation on the board, we will be fully involved in setting the strategic direction of the business, and we will of course be discussing the future of the business and the merits of bringing in additional shareholders with our partners in due course.

[Lord West of Spithead (Lab) [V]]

My Lords, I am convinced that we should capitalise on our world-leading satellite capability and, if possible, expand it. Although there are risks, putting Galileo in the shade would be very good news, and I congratulate the Government on this vision, albeit that it is high-risk. As we move on from the impact of Wuhan virus and Brexit, does the Minister agree that we must grasp the new technologies of AI, quantum engineering, the internet of things, big data et cetera, and that it is a disgrace that a country with the scientific capability of the UK does not have an equivalent of Silicon Valley? In 1946, it was decided that for national security we should develop an atom bomb. The cost was huge. Does the Minister agree that for reasons of national security, we should generate an equivalent of Silicon Valley and an ability to create a world-beating, resilient telecommunications network, even if the cost is huge, and, ditto, civil nuclear power?

[Lord Callanan]

The noble Lord asks a lot of questions and there is not time to address all of them. We are investing in this as a one-off strategic opportunity to own a satellite communications network, working with Bharti Global Ltd, and to support our ambition for the UK to be a pioneer of novel satellite technologies. We are delighted that our bid was successful.

China: Supply Chains

Lord West of Spithead Excerpts

Wednesday 1st July 2020 Lords Chamber

[Lord Grimstone of Boscobel]

It is certainly a great priority for us to do that. It falls into the general area where it is very important to secure diversity of supplies for the United Kingdom. The pandemic has taught us many lessons about the importance of diversity of supplies. The noble Earl can rest assured that we are observing and watching this very carefully, including developing with our allies alternative sources of supplies to give us much greater diversity in these matters.

[Lord West of Spithead (Lab) [V]]

My Lords, it is understandable that there have been growing concerns about Chinese state involvement in the UK, which is focused in a number of key areas that could have implications for national security. Not only do the Chinese have a key part of our nuclear infrastructure, telecoms, CCTV network, steel and so on, but they fill courses at UK universities relating to AI, quantum engineering, use of big data and the internet of things. They have poured investment into higher learning in these areas in the UK, and have stolen IP on an industrial scale from our companies. When taken in conjunction with statements by Xi Jinping about the global ambitions of China, it is not surprising that we are worried—we should be. Have the Government made an overall assessment of Chinese involvement in the UK and the level of threat that poses? Who is responsible for compiling this list and what, if any, action we have taken so far?

[Lord Grimstone of Boscobel]

We continue to implement a comprehensive and co-ordinated approach to China, which identifies and pursues UK interests. I have to say that we take a very clear-eyed view of the challenges and risks from China. In many areas, we have a strong and constructive relationship with China but, equally, we are very aware that items may not coincide with our national security. Our approach to China is co-ordinated across government. The FCO is at the heart of the cross-Whitehall strategy approach to China, and the importance of this is shown in that the work is led by the National Security Council and the China National Strategy Implementation Group. We will continue to implement a comprehensive and co-ordinated approach to China that identifies and pursues UK interests in these areas and, of course, engage our like-minded international partners as we do so.

Oil: Changes in Global Markets

Lord West of Spithead Excerpts

Thursday 21st May 2020 Lords Chamber

[Lord Callanan]

As well as maintaining contacts with other countries, we invest considerable funds in helping countries in the transition and in promoting their domestic carbon reduction targets. The noble Baroness makes an important point and we will keep that in mind.

[Lord West of Spithead (Lab)]

My Lords, oil was trading at over $34 a barrel for West Texas Intermediate and $32 for Brent Crude by early Monday—up from a month ago, but 50% less than at the beginning of the year. The impact on fracking has been huge. There are fewer rigs now operating in the USA—some 600 or so less than at the beginning of the shale revolution. Low prices and market volatility have serious implications for countries that rely on oil exports, with, I believe, considerable impact on global security. The volatility also strengthens the need for the UK to speed up development of nuclear elements of our electrical energy supply. Can the Minister tell me when Hinkley Point C and the next new nuclear power station after that will be connected to the grid, and confirm that work continues despite the Wuhan virus?

[Lord Callanan]

The noble Lord is right to draw attention to the implications for international security from low prices and the impact that it will have on producing countries. We will continue to monitor the situation closely. We believe in a diverse energy supply in the UK, including nuclear. I cannot yet give him a specific date, but we will want to get the new nuclear power station on stream as quickly as possible.

Carbon Budgets

Lord West of Spithead Excerpts

Monday 8th July 2019 Lords Chamber

[Lord Henley]

My Lords, my noble friend is slightly wide of the Question, but I accept that shipping wood across the Atlantic in dirty burning boats is sometimes not the best way to go about things—although, in the transition to getting rid of burning coal, it is a great improvement.

[Lord West of Spithead (Lab)]

My Lords, one of the best forms of energy for carbon budgets is nuclear. Our civil nuclear programme seems to be in complete disarray. What will we do to get it back on track, so that we can provide a third of the power the country wants from nuclear, which was the Government’s position?

[Lord Henley]

My Lords, I assure the noble Lord that nuclear will continue to play a major part in what we are doing. He is right that it provides useful power with little carbon produced. We will continue to keep nuclear as an option, as I have made clear on a number of occasions.

British Steel

Lord West of Spithead Excerpts

Wednesday 22nd May 2019 Lords Chamber

[Lord Henley]

Coming from Lincolnshire, my noble friend knows exactly the problems faced by those employed by British Steel in Scunthorpe. As my right honourable friend made clear, particularly in responding to a whole raft of questions from those in another place who have constituency interests, one of our first concerns is to ensure that the uncertainty can be removed for those workers. That is why we are encouraged that their pay packets have at least been dealt with as of yesterday. But as I said, we want to work with the official receiver to ensure that this can continue and that a viable, operating concern can be sold on to someone else, so that steel can continue to be produced both at Scunthorpe and at the other two sites.

[Lord West of Spithead (Lab)]

My Lords, there is a strategic defence requirement for a capability to produce steel. Thirty-seven years ago, in the early hours of the morning my ship sank and blew up in the Falklands, having been attacked for 18 hours. In war, you need to replace ships, and you cannot always rely on people supplying you with steel—or anything—because they might not agree with what you are doing. There is an absolute need to do this. It seems that we have not pulled together our defence industrial strategy in terms of the 100,000 tonnes of steel that we would get from the UK if we built solid support ships in the UK, the 25,000 tonnes of frigate steel if we built the 31e’s here and the 80,000 tonnes of steel for the new ballistic missile submarines. We have given the recipe for specialist steel, at which we are the best in the world, to the French so they can provide us with some. This is not joined up. Does the Minister agree that it is an absolute strategic defence requirement for our nation to be able to produce steel, and that we must therefore pull together a policy and provide support in whatever way necessary to ensure that we have this for the future?

[Lord Henley]

My Lords, as far as I am aware, British Steel is not producing steel in large quantities for the defence industry. Having said that, I take the point that the noble Lord made. It is obviously very important to our defence industry and, more importantly, to the defence of the realm to make sure that we can produce steel of an appropriate sort. My right honourable friend is fully aware of that, and that is why he has encouraged all departments to look to their procurement of steel and why, where possible, certain adjustments have been made to allow them to take other factors into account in procurement. The noble Lord, Lord Fox, was rather dismissive of the tables we have produced to encourage other departments to buy British steel, but they are important. I can assure the noble Lord that, wherever possible within the rules, we will certainly use British steel for defence projects, but not necessarily steel produced by this company, if it does not produce the right sort of steel.