Budget Resolutions and Economic Situation
Andrea Leadsom Excerpts(3 years, 2 months ago)
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Andrea Leadsom (South Northamptonshire) (Con)
I am full of praise for the Chancellor’s work to protect jobs and businesses as we emerge from lockdown, and I support the measures he announced in the Budget, but I also urge him to give even greater focus than he has done to the prospects for our green economy.
In my stint as Business Secretary, I rewrote the Department’s objectives, so that its top priority was for the UK to lead the world in tackling global climate change. On the one hand, there is no doubt that that is the right thing to do—the future of our planet keeps far too many people awake at night. However, on the other hand, building a green economy also makes superb business sense for the UK.
First, the UK is at the forefront of developing green technologies: from offshore wind to nuclear fusion and green hydrogen, we are leading the way. Secondly, the UK has more than 450,000 people in the green collar workforce already. In my time at BEIS, I was confident that a target of 2 million green jobs by 2030 was possible. The particular beauty of the green economy is the breadth of employment opportunities—from apprenticeships in solar power to decarbonisation of heavy industry to cutting- edge scientific discoveries, there is something for all talents. The UK’s green economy could become a bigger jewel in our crown than UK financial services is today, and I urge the Chancellor to share that vision.
COP26 is a great platform, and we need radical action with world-changing initiatives, so I want to put forward three specific ideas. The first is to announce at COP26 a yearbook in which the Paris agreement signatories can record their Government, state and business-level achievements—transparency so that all can see and challenge, while the discussion continues over the more formal measurements.
The second idea is to announce at COP26 three ambitious bilateral commitments to decarbonisation by 2030. The UK can be a key role model, and those pledges could include, for example, working with India on delivering 100 GW of battery storage around the world, with China to deliver 200 GW of offshore wind, and with Brazil, say, to deliver 0.5 billion hectares of new woodland around the world.
The third idea is to announce at COP26 a global green investment bank. Our former rock star central banker, Mark Carney, is now the Prime Minister’s green adviser, and he should be pulling together the global pensions industry, project financing and green investment expertise to work together on financing the decarbonisation of our planet.
As one of the great heroes, Sir David Attenborough, has said,
“real success can only come if there is a change in our societies and in our economics and in our politics.”
The UK has the chance post Brexit to lead that change.
Mr Deputy Speaker (Mr Nigel Evans)
Very professionally done, as we expected, Andrea. Thank you for helping us out. I think our comms are now back. Let us see if we have Barry Sheerman.
Oral Answers to Questions
Andrea Leadsom Excerpts(3 years, 3 months ago)
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Kwasi Kwarteng
I am very pleased to announce that I and my ministerial colleagues have stated again and again that fire and rehire is completely unacceptable. I was in regular contact with British Gas—Centrica, as it is now called—as Energy Minister, and I have impressed upon it the need to engage with its workforce and treat them with utter integrity and fairness.
Andrea Leadsom (South Northamptonshire) (Con)
Kwasi Kwarteng
I am very pleased to be responding to my right hon. Friend. I very much enjoyed working with her in the Department and I am pleased that she is taking such an interest in our activities. In answer to her question, I would suggest that this is about policy, not regulation. The Government expect lenders to be constructive in their dealings with businesses in difficulty. I am glad to hear that in this instance her constituents are getting the support that they need from the bank, but bank regulations on forbearance are a matter for the independent Financial Conduct Authority.
SMEs and the Net Zero Target
Andrea Leadsom Excerpts(3 years, 6 months ago)
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Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
Kevin Hollinrake (Thirsk and Malton) (Con)
I beg to move,
That this House has considered support for SMEs and the net zero target.
It is an absolute pleasure to serve under your chairmanship, Ms Ghani. I draw hon. Members attention to my entry in the Register of Members’ Financial Interests on all things small business.
I am very supportive of the push to get to net zero as soon as possible. I absolutely believe that business will help to deliver that solution even faster than 2050. My principal concern in bringing forward this debate is that, in the headlong rush to get to that point, we must not treat businesses as collateral damage. We have done that in the past. When we had a change of emphasis in lending back in 2008, that happened to some good businesses, as well as to some businesses that had probably borrowed inappropriately.
I want to give an example of a business in my constituency. There is a very good business a few miles away from where I live called the York Handmade Brick company. It makes wonderful, handmade bricks, that look like old clamp bricks, for lots of houses around the country. It is a fairly small business employing about 20 people and is an award-winning company. Its processes use fossil fuels—natural gas—to fire the bricks. Now, I can see a situation where, in future, banks may look at this business and say, “That business does not sit with our ethical and sustainable goals portfolio. Therefore, it is perhaps not a business we want to support.” If that business needs to borrow some money to invest to move away from fossil fuels, for example, and move to other processes—biogas being an obvious one—what that company will need as it moves, down the line, to a different process, is money to invest. It is absolutely critical that our banking sector takes such businesses forward with us. Hon. Members might say that that is blooming obvious, but that is not always what we have seen in the past.
If we are going to get to net zero, it is absolutely vital that the private sector is taken with us. It will provide the cash and capital to invest in new processes and new techniques. We know for an absolute fact that the private sector is much better at allocating capital than the public sector—I might point to Croydon council in that regard, if Members have seen some of the recent news reports. The private sector is much better at allocating capital; in the past, the public sector has misallocated capital.
Of course, that investment will contribute towards innovation, and the solutions to climate change are about innovation. The more innovation and the more competitive free markets we have, the more our consumers get a better deal at a better price. We are seeing some interventions from shareholders in banks, who are saying, “We do not want you to invest in these kinds of industries anymore.” Shareholder action groups will get increasingly vociferous, which could be to the detriment of small and medium-sized enterprises, and even bigger companies. This is not just about SMEs: bigger companies will remember that last year, for example, there were some protests by actors from the Royal Shakespeare Company regarding BP’s sponsorship of that organisation, which led to a parting of the ways between the RSC and its sponsor. That is despite the fact that BP is working within our overall regulatory framework, and will be incredibly important in the future in making the investment we need to move from a dependence on fossil fuels to a greater dependence on renewable energy.
We have seen this with recent shareholder action in terms of things like the covid corporate financing facility, which is dispensed by the Bank of England. Again, there has been pressure from certain shareholder groups, saying that at this crucial time, when lots of businesses are in trouble because of covid, support for those businesses should have been linked to environmental objectives. How unfair would it have been, when hundreds of thousands of businesses employing millions of people are in crisis, to link those supportive measures to sustainability goals at such short notice?
My key message for this debate is that any intervention by the Government and our financiers, who are so critical to the UK economy, must be comprehensive, well considered, strategic and stable. Our interventions should be consistent over a long period of time to get to that long-term goal. Again, one example I might give is the recent news that we will bring forward the date on which we move away from fossil fuel cars—diesel and petrol cars. It was 2040; it has been brought forward to 2035, and has now been brought forward again to 2030. The motor manufacturers, of course, are gearing up for that, although it presents some real challenges for that sector during what is a difficult time anyway. What about the other businesses in that supply chain? Lots of other SMEs will have to make that change as well: those could be parts manufacturers, but they could also be forecourts. They are going to have to make massive changes over a very short period of time, so we must make these decisions in a strategic fashion.
Andrea Leadsom (South Northamptonshire) (Con)
My hon. Friend makes a really good point about giving sufficient notice. He also points out that businesses will always overachieve, and he might recall that back in 2015, the announcement was made that we would be taking coal off the system by 2025. It has indeed been the case that businesses have overachieved, because coal is almost off the system and it is only 2020.
Does my hon. Friend agree that there could be some merit in the UK Government doing what many G7 countries have done, which is to create a development bank that brings in some offer of Government funding to help with the transfer towards net zero that we all want to see, and from which all SMEs could benefit?
Kevin Hollinrake
I absolutely agree with my right hon. Friend, and commend her on the work she did when she was in the Department for Business, Energy and Industrial Strategy as energy Minister, providing a long-term framework that businesses can work within to phase out coal over that period of time: she was very far-sighted with her interventions. I am sure that my hon. Friend the Member for Grantham and Stamford (Gareth Davies) will talk about a development bank in his remarks in a few minutes.
One other area in which we need to look at a more strategic framework is that of the green homes grants. In our manifesto, we committed to about £9 billion for retrofitting, and I think we have committed about £2 billion so far through those grants, which is very welcome. One of the difficulties, as I have communicated to the Minister, is finding installers in our area. A lot of installers are thinking that £2 billion will go very quickly and, therefore, what is the point of applying?
The Federation of Master Builders has some data on that. There have been 180 inquiries to the Federation of Master Builders and only three have completed the paperwork because it was seen as too short a timescale. If we have a longer timescale, businesses will be more likely to invest in the training and the necessary other actions they need to take to qualify as a registered installer for that grant. A long-term, stable framework will encourage much-needed investment.
I will go back briefly to 2008. I am representing here, as I often do as co-chair, the all-party parliamentary group on fair business banking. Much of our work of the past 10 years—including the three years I have been involved—has been around trying to clean up the mess of 2008, when we withdrew support from lots of SMEs, unfairly and far too quickly, and did not give them the chance to transition into a different kind of business or even rebroker their finance.
We need to learn from that in terms of a timescale and a structure for that change and forbearance, in which the APPG has much experience. We need to learn from history. Warren Buffett once said,
“What we learn from history is that people don’t learn from history.”
It would be good to have a focus on that particular episode in our banking history.
With regard to banking, I mentioned before that banks are seeing some shareholder action in the businesses and sectors they will support in future. Access to capital being the most fundamental requirement of any business, this is a hugely important topic. As such, the APPG has come up with a project called Bankers for NetZero. It is engaging with the banking sector and others. It is supported by Volans, the sustainability think-tank, and Re:Pattern, who specialise in business transformation social impact. It is developing policy recommendations to lead to COP26, looking at the regulatory environment and the part banks play in financing; engaging with businesses on net zero challenges; and looking at opportunities and obstacles for banking, while trying to formulate some evidence-based, targeted policy, and to make recommendations on legislation and regulation, in accordance with the United Nations environment programme finance initiative, or UNEPFI, for short. The key objective is that no willing SME is left behind in this vital change to our economy.
One big issue over the next few years is the expected transition of lots of businesses from dependence on fossil fuels to a completely different model. That will be at a time, of course, when a lot of those SMEs are burdened with a significant amount of debt. TheCityUK recapitalisation group report said that SMEs are currently burdened with around £35 billion of unsustainable debt, which will put around 780,000 businesses at risk.
As a result of the covid crisis, it will be very difficult for the two thirds of businesses whose leadership is more focused on being greener and better to make that transition. We know how important SMEs are to our economy: 99% of all businesses are SMEs and they employ 61% of private sector employees, that is, 5.9 million businesses in total. That is a business environment that has been a huge success under this Government.
SMEs are disproportionately positively represented in our levelling-up areas. That also fits into the Government agenda. A very high proportion of SMEs are in construction; 99% of all construction businesses are local builders. They are going to be vital to retrofitting and other measures that we require to modernise our housing stock. They employ hundreds of thousands of local workers and 70% of all apprentices. Other sectors that have a high proportion of SMEs are transport and retail.
I know the Minister’s Department is looking carefully at the next few months. In terms of immediate business support, we need to think about things such as bounce back loans. Not all businesses can access bounce back loans, which is a huge issue. Lots of our businesses are with non-bank lenders, such as Tide, which do not have access to the Bank of England’s term funding scheme for SMEs and therefore do not have the capital to lend to them. Businesses already face that challenge.
Many businesses are struggling to get the new top-ups that the Department has brought forward, which is welcome. As for the businesses that can access that liquidity, many are swamped with applications or are closed to applications from new customers. We are locking some SMEs out of support right now, and we are going to need them to provide us with the solutions to our economic challenges moving forward. There are also issues with the new measures to allow businesses to pay this debt over a longer period of time—the “pay as you grow” guidance. That will be key, as it will allow businesses to pay back the loans over 10 rather than six years.
I welcome the Government’s focus on moving forward to a greener future. The Pension Schemes Bill that was before the House yesterday certainly moves us towards the net zero horizon. Last week, the Chancellor announced a taskforce for climate-related financial disclosure for large companies and financial institutions by 2025 to report on their progress in those areas. We also have the new green taxonomy and a plethora of policies in my right hon. Friend the Minister’s Department on the clean growth strategy.
In terms of where we need to go, first we need to ensure that we have diversity in finance provision. We need to solve the non-bank lender problem. However, I would also like us to invest in a new type of bank: a regional mutual not-for-profit bank that has a much more patient approach to providing finance to SMEs. During the financial crisis of 2008 and all the way through to 2013 in Germany, lending rose by 20% because of the regional banks. In the UK, lending to SMEs dropped by 20%, showing that patient capital works much better when it is provided by a diverse range of providers.
We need a sector-specific just transition road map that looks at every different sector. If some of the current provisions for hospitality, such as the VAT cut, were extended or made permanent, that would be welcome. The British Business Bank needs a role in supporting and advising SMEs. We need to standardise just-transition restructuring, so that if businesses are seen as being in a sector that banks do not want to support, there is a proven standardised process for taking those SMEs from where they are today into the greener future. The shared prosperity fund should be used to support SMEs to make the transition and we should have a fiscal policy that is conducive to allowing SMEs to make the transition, with tax breaks, for example, to decarbonise.
My final point to the Minister—and I know he gets this—is please, please, please let us have no cliff edges, but a strategic approach and a long-term stable framework towards that net zero future.
Parental Bereavement Leave and Pay
Andrea Leadsom Excerpts(4 years, 3 months ago)
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The Secretary of State for Business, Energy and Industrial Strategy (Andrea Leadsom)
The Government are committed to supporting working families to balance work with their caring responsibilities. We have laid regulations in Parliament which, subject to parliamentary approval, will implement our commitment to give employed parents a statutory minimum right to time off work in the devastating circumstances where their child dies or they suffer a stillbirth.
Parental bereavement leave and pay are the first of a raft of new employment reforms which will make the UK the best place in the world to work and to start and grow a business. As announced in the Queen’s Speech, the Employment Bill will introduce further measures to benefit employees and their employers, including carer’s leave and neonatal leave and pay.
The Parental Bereavement Leave Regulations 2020; the Statutory Parental Bereavement Pay (General) Regulations 2020; and the Parental Bereavement (Leave and Pay) Act 2018 (Commencement) Regulations 2020 (collectively referred to as “the Parental Bereavement Leave and Pay Regulations”) were laid in Parliament on 23 January 2020. Taken together, they implement a statutory right to a minimum of two weeks’ leave for all employed parents whose child under the age of 18 dies or who suffer a stillbirth from 24 weeks of pregnancy.
Employment law is a devolved matter in the case of Northern Ireland so the new entitlement to parental bereavement leave and pay will only apply to parents in Great Britain (GB). There are around 7,500 child deaths a year in GB, including around 3,000 stillbirths. The Government estimate that this new entitlement will help to support over 10,000 GB parents a year.
The entitlement to parental bereavement leave will be a “day one” right which means that employed parents will be entitled to time off work to grieve irrespective of how long they have worked for their employer. Parents who have worked for their employer for six months or more at the time of their child’s death will also be able to claim statutory parental bereavement pay.
Employed parents will be able to take their leave and pay as either a single block of two weeks, or as two separate blocks of one week each.
The right to parental bereavement leave and pay makes GB one of a very small number of countries worldwide to recognise the impact that the death of a child has on parents and to offer such support to parents. We are the first to offer a full two weeks of leave and pay and this is the most generous offer on parental bereavement leave and pay in the world.
Both the leave and pay can be taken at any time in the first 56 weeks after the child’s death. The ability to take time off work over a long period recognises that grief is a very personal matter—whilst some parents may want to take time off work immediately, others may prefer to take time off work on the first anniversary of their child’s death or to enable them to attend the funeral or inquest.
The new entitlement will be known as Jack’s law in memory of Jack Herd whose mother Lucy has campaigned tirelessly on this important issue.
Subject to parliamentary approval, the new entitlement will apply to parents who lose a child on or after 6 April 2020.
[HCWS90]
Oral Answers to Questions
Andrea Leadsom Excerpts(4 years, 4 months ago)
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Preet Kaur Gill (Birmingham, Edgbaston) (Lab/Co-op)
The Secretary of State for Business, Energy and Industrial Strategy (Andrea Leadsom)
Birmingham’s productivity increased at twice the national rate last year, and I am meeting our great West Midlands Mayor, Andy Street, next month to talk about how we can achieve even more. We have one of the country’s most successful enterprise zones in Birmingham, where we are investing £433 million in local growth funds and increasing skills levels, employment opportunities and connectivity.
Preet Kaur Gill
Transport for West Midlands and the Open Data Institute found that between 2008 and 2018 congestion had led to 216,000 fewer people being within a 45-minute bus journey of the centre of Birmingham. Will the Secretary of State commit to properly resourcing new public transport infrastructure in Birmingham to enhance productivity and help the city’s almost 2 million people to realise their potential rather than wasting their time sitting in traffic?
Andrea Leadsom
The hon. Lady raises a really important point, and she will know that the Department for Transport is looking closely at what more it can do to improve connectivity. I hope that she will be delighted, as I am, that the city centre and Curzon extension is creating 76,000 new jobs and contributing £4 billion to the economy each year, and that since 2010, according to the local enterprise partnership, there are 134,000 private sector jobs being created in the Greater Birmingham area.
Michael Fabricant (Lichfield) (Con)
When my right hon. Friend meets my friend the Mayor of the West Midlands, Andy Street, will she discuss the possibility of opening a giga factory in Birmingham or the immediate area for the production of electric vehicles?
Andrea Leadsom
My hon. Friend is well aware of the Government’s ambitions to have a giga factory in the UK. It is vital for the success of our economy that we are able to find these new areas of technological growth that can support the uptake of ultra-low and zero-emission vehicles.
Owen Thompson (Midlothian) (SNP)
Patricia Gibson (North Ayrshire and Arran) (SNP)
The Secretary of State for Business, Energy and Industrial Strategy (Andrea Leadsom)
The Scottish Government received almost £100 million to help to prepare for Brexit in the run-up to 31 October last year. I am delighted that we now have a good deal with the European Union, so we will be leaving the EU at the end of January, but the implementation period will mean that nothing changes for businesses until the end of 2020. We are working hard on our future trading relationship with our EU friends and neighbours.
Owen Thompson
With the final destination of Brexit still vague, it is a disgrace that the UK Government are still failing to give businesses the information they need to navigate Brexit, with firms needing more than the Chancellor telling them simply to “adjust”. Will the Secretary of State finally accept the policy of the Scottish National party and the Institute of Directors of providing a £750 million one-stop shop for UK firms?
Andrea Leadsom
I am not surprised to hear that the hon. Gentleman is still determined to resist Brexit, but he will appreciate that this Government are getting on with it and ensuring that there is a great deal for businesses. On his point about Scottish businesses’ preparedness, my Department’s business readiness fund enabled various trade bodies, including the Scottish Chamber of Commerce and the Scottish fishing trade bodies, to receive hundreds of thousands in taxpayers’ money precisely to enable businesses to be Brexit-ready.
Patricia Gibson
The Chancellor has been clear that some companies will benefit from Brexit and some will not, but the Fraser of Allander Institute has been clear that it estimates that as many as 100,000 jobs in Scotland will be lost as a result of Brexit. Can the Minister explain why she thinks it fair that Scotland will be hit so hard by a Brexit for which it did not vote?
Andrea Leadsom
I am sure that the hon. Lady will be delighted to see today’s employment numbers—yet again, the highest numbers on record—and she will no doubt also be delighted to know that there has been a 12.7% increase in employment in North Ayrshire and Arran since 2010. Jobs are being created, supported by a UK Government who are determined to give people right across the United Kingdom the chance of future growth and prosperity in their area.
Mr Speaker
Just to help the new Member, his question should really be associated with the current question, so I presume that he is talking about Scotland as well.
Andrea Leadsom
I am grateful to my hon. Friend for his question. He may be aware that the Government are investing about £1 billion in a new quantum technologies fund, which will be of benefit right across the United Kingdom as we take advantage of these extraordinary opportunities, so many of which are coming out of the United Kingdom.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
I would like to offer the shadow Secretary of State’s apologies, because she cannot be with us today. But it is the Secretary of State who has been AWOL from business—missing in action during the general election and now again, as we prepare for Brexit, shelving the weekly meetings with business leaders. Meanwhile, the Prime Minister promised the workers of Nissan that he would
“make sure we have complete equivalence when it comes to our standards, our industrial requirements and the rest of it”,
but the Chancellor rules out continuing alignment with the European Union. Will the Secretary of State ensure that the necessary alignment for frictionless trade with the European Union continues after Brexit?
Andrea Leadsom
I welcome the hon. Lady, who is standing in for the shadow Secretary of State. It is very unfortunate that she decided to play the man and not the ball, because she is absolutely incorrect to suggest that it is my policy to reduce meetings with businesses. In fact, my Department’s priority is to make the UK the best place to work and to grow a business, and I will be increasing the level of engagement and the range of engagement right across the business sector as we leave the European Union and get the best possible deal for businesses and for people.
Chi Onwurah
The Secretary of State did not even say the words “frictionless trade”, and her reassurances will not give businesses very much hope, but given that we know the Prime Minister’s views on business—I think it would be disorderly to quote them in detail—we cannot expect meaningful reassurances. However, Nissan was given private reassurances back in July 2017. We were told at the time that they were too commercially sensitive to publish, but now we have only 10 days to go and Ministers are answering questions on them, so will she publish the reassurances given to Nissan, and if not, why not?
Andrea Leadsom
Businesses right across the United Kingdom will benefit from the new potential free trading deals around the world that we will be negotiating as we leave the European Union, but at the same time this Government are committed to getting the best possible free trading arrangements with our EU friends and neighbours for all companies—for Nissan and for all companies that currently trade with the EU.
Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)
The 10 days till Brexit will be followed by 10 years of trade chaos, negative growth, lower employment and investment paralysis. Given that the EU has already stated that the trumped-up Tory timetable will not allow for a comprehensive trade deal, will the Secretary of State finally establish a small and medium-sized enterprise support service to allow Scottish firms to navigate this mess?
Andrea Leadsom
It is a bit like a stuck record, if I can use 1970s terminology. SNP Members said that we would not get any kind of a deal. They said that the Prime Minister would not be able to reopen the withdrawal agreement. They said that we would never get out of the EU. The fact is that this Prime Minister has been able to negotiate a good deal with the European Union that works for businesses and people right across the UK, and we are opening up new opportunities. Just for once, be a little optimistic!
Drew Hendry
It is clear from that answer that our Government have no plans to save Scottish firms from the sinking ship that is Brexit Britain, but we do have the lifeboat of independence. On Scotland’s right to choose, does the Secretary of State still believe that it is wrong to utterly rule it out and disrespectful to do so and is it still “never say never”, or are those laudable democratic principles to be sunk with the Brexit ship?
Andrea Leadsom
I would just draw the attention of the hon. Gentleman and those on his Benches to the very recent Deloitte CFO confidence survey, which demonstrates the biggest ever jump in business confidence, as a result of the certainty that we now have about the way ahead. Business certainty is absolutely key, and if he wants to do something for businesses, he should stop trying to hammer their confidence and start looking to work with the Government on the opportunities that lie ahead.
Jacob Young (Redcar) (Con)
Dr Rupa Huq (Ealing Central and Acton) (Lab)
The Secretary of State for Business, Energy and Industrial Strategy (Andrea Leadsom)
With your permission, Mr Speaker, I will first talk about my departmental priorities.
As we enter an exciting new decade, we are building a stronger, greener United Kingdom. To achieve that, my Department is focusing on three priorities. First, we are leading the world on tackling climate change, not just because it is the right thing to do but because it will create millions of new jobs and skills right across the UK. Secondly, we are solving the grand challenges facing our society—from life sciences to space, artificial intelligence and robotics—and improving lives across the world. Thirdly, we are quite simply making the UK the best place in the world to work and to grow a business.
Social enterprises are a thriving part of the UK’s economy. When I was a Back-Bench MP, and before I went into politics, I was closely involved in setting up and running a number of charities. She is absolutely right that we need to continue focusing on them as a key part of the economy.
I am always happy to hear lobbying from colleagues on both sides of the House about machinery of government changes, and perhaps we can meet another time to talk about that.
Mrs Maria Miller (Basingstoke) (Con)
Sammy Wilson (East Antrim) (DUP)
This week, thousands of climate hypocrites will zoom into Davos in hundreds of private jets to lecture the world about stopping the consumption of fossil fuels, oblivious to their own hypocritical behaviour. Will the Secretary of State assure us that she will not heed any of the calls for policies that would cost jobs in our energy-intensive industries, add costs to the fuel prices of the millions in fuel poverty, or add green burdens to consumers, farmers and motorists?
Andrea Leadsom
The right hon. Gentleman makes a vital point. It is not enough that we just look at our own behaviour here in the United Kingdom, where we are determined to meet our net-zero ambitions; we should also do all we can to lead the world in tackling the climate emergency. In our plans in the run-up to COP26, we have set out some really ambitious ideas for how we can not only work at home to decarbonise but help the rest of the world in their efforts to solve their own problems and behave better in the way they travel.
Robert Halfon (Harlow) (Con)
Hard-working Harlow binmen and women have been harassed and bullied in a pretty shocking way by Veolia management over many months. Will my hon. Friend launch an inquiry into what has been going on and ensure that guidance is given to local councils throughout the country to stop any new contracts with Veolia until it stops bullying and harassing its workforce?
Sarah Jones (Croydon Central) (Lab)
Westfield is set to open a fabulous new shopping centre in Croydon, but the French owner of Westfield, Unibail-Rodamco, is worried about business rates, the state of retail and the impact of Brexit. Will the Secretary of State please meet representatives of Westfield and Unibail-Rodamco to talk about some of those concerns?
Anthony Browne (South Cambridgeshire) (Con)
My constituency of South Cambridgeshire is no less than the life sciences capital of the world. We have the global headquarters of AstraZeneca, 20,000 people working in the biomedical campus around Addenbrooke’s Hospital and dozens of industrial parks and small businesses developing new therapies, helping people to live longer and healthier. Many of those companies are dependent on research grants, some of which come from the EU. Will my hon. Friend tell me what work the Government are doing to ensure that South Cambridge remains the biomedical and life sciences capital of the world, and that companies have continuity of funding once we leave the EU?
A Green Industrial Revolution
Andrea Leadsom Excerpts(4 years, 4 months ago)
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The Secretary of State for Business, Energy and Industrial Strategy (Andrea Leadsom)
May I start by congratulating you on the superb way you have taken over the speakership, Mr Speaker? The atmosphere in the Chamber demonstrates the dignity and respect that we all want to see, and I commend you and your Deputies for the leadership you are showing.
Speaking of leadership, I wish the hon. Member for Salford and Eccles (Rebecca Long Bailey) all the best in her party’s leadership contest. It takes courage to put oneself forward, and I commend her for her service.
Also on leadership, there is one woman—the first ever female Conservative leader—who definitely deserves 10 out of 10: Margaret Thatcher. Just over 30 years ago, she became the very first global leader to warn of the dangers of climate change at the United Nations, saying:
“It is mankind and his activities which are changing the environment of our planet in damaging and dangerous ways.”
She predicted that
“change in future is likely to be more fundamental and more widespread than anything we have known hitherto.”
How right she was.
Mr Speaker, you recently called the Australian wildfires
“a wake-up call for the world.”—[Official Report, 7 January 2020; Vol. 669, c. 235.]
I agree. From wildfires in Australia to flooding in Indonesia and record temperatures across the world, the impacts of climate change are in the here and now. People throughout the UK and around the world are calling for us to act, and we are doing just that. Just as the UK has led the past 30 years of climate action, we will lead the next 30 years, seizing the opportunities of the green industrial revolution.
Since Margaret Thatcher made that speech in November 1989, the UK can be proud of its record of action. Since 1990, we have cut our emissions by 42% while growing our economy by 73%.
Caroline Lucas (Brighton, Pavilion) (Green)
Will the Secretary of State give way on that point?
Andrea Leadsom
In a moment.
Since 2000, we have decarbonised more quickly than any other G20 country. Since 2010, we have quadrupled our electricity generation from renewables, including through the installation of 99% of the UK’s solar capacity.
Andrea Leadsom
In 2017, low-carbon fuels produced more electricity than fossil fuels for the first time, and in that year we also saw the first coal-free day for a century, followed in 2019 by the first coal-free week and coal-free fortnight. Building on the world’s first climate change Act, last year we became the world’s first major economy to legislate to end our contribution to climate change altogether by 2050.
Alan Brown
We obviously welcome some of the things that the Secretary of State has outlined, but on the net zero target that she just outlined, Lord Deben, the chair of the Committee on Climate Change, said in his covering letter to an update report that
“policy ambition and implementation now fall well short of what is required”
to achieve the target of net zero by 2050. Is the Secretary of State going to address that in her speech?
Andrea Leadsom
I will indeed address it, and I can also tell the hon. Gentleman that the Government have taken the advice of the Committee on Climate Change in setting our legally binding commitments to net zero by 2050. Throughout the year, we will set out precisely how we think we can achieve that.
Caroline Lucas
The Secretary of State will know that the Government are off track when it comes to the fourth and fifth carbon budgets, but I wish to take her up on the constant repetition from the Government. She says that greenhouse gas emissions have fallen by 42% since 1990, but she knows that if we calculated consumption-based emissions and factored that in, our emissions have actually fallen by only 10%. Does she agree that we need a common understanding of what is facing us? If she keeps using numbers in a slightly misleading way, we are not going to get to where we need to be by getting our emissions down.
Andrea Leadsom
On the one hand, the hon. Lady is absolutely right: the carbon emissions figures for the United Kingdom do not take into account our consumption emissions or, indeed, our contribution to the reduction of carbon emissions around the world—both are important points. On the other hand, I would take issue with her from a philosophical point of view, because in order to measure progress, we need to have measurements, so it is incredibly important to talk about our UK territorial emissions at the same time. I look forward to working with the hon. Lady constructively, as she and I have done previously on a number of occasions, to make the UK’s ambition to lead the world in tackling climate change a reality in the run-up to COP26.
Andrea Leadsom
I will make some progress and give way again in a moment.
As the cooling towers have come down, wind turbines are going up in their thousands, with offshore wind capacity increasing by more than 500% under Conservative Prime Ministers. We can all be proud that no other country in the world has more offshore wind than the UK, with a third of global capacity off our coastline. This is creating thousands of future-proof, planet-saving, profit-making jobs, as well as skills investment all around the United Kingdom.
Many of my new, true blue hon. Friends have green-collar jobs in their constituencies. The constituency of Sedgefield makes underwater-cable protection systems that are exported all over the world. Great Grimsby leads the world in offshore wind operations and maintenance, while in Blyth Valley, where I was proud to pay a visit to support our excellent new colleague my hon. Friend the Member for Blyth Valley (Ian Levy) during the general election campaign, our offshore renewable energy catapult recently tested the world’s longest offshore wind turbine blade. At over 100 metres, it would, if we stood it next to Parliament, be taller than Big Ben.
Anna McMorrin (Cardiff North) (Lab)
The Secretary of State talks about offshore wind, but does she agree that this Government have effectively banned onshore wind, which is the most tried and tested of all forms of renewable energy technology? Will she commit to bringing that technology back across all parts of the UK?
Andrea Leadsom
What I can say to the hon. Lady is that onshore wind produces electricity for 10 million homes in the United Kingdom. We are promoting offshore wind as the most effective way to increase our power generation from renewable technology. It is a huge success story for the United Kingdom and something of which we can be proud. She will be aware that the Conservatives are committed to producing 40 GW from offshore wind by 2030.
Janet Daby
The Government’s policies are not sufficiently ambitious to meet their own climate change targets. Does she agree that according to the Government’s official advisers, the Committee on Climate Change, the UK is even off its own climate change target of an 80% reduction in emissions by 2050?
Andrea Leadsom
As I said in answer to the hon. Member for Kilmarnock and Loudoun (Alan Brown), we work very closely with the Committee on Climate Change. Our target of net zero by 2050 has been set on the basis of its recommendations so that we can grow our economy, sustain our future and contribute to tackling global climate change in a way that is sustainable for the UK, with the creation of green growth, so I am confident in that regard. We will bring forward more measures throughout the year to help us to meet that target of net zero.
Philip Dunne (Ludlow) (Con)
My right hon. Friend is being very generous in giving way. She mentioned the cooling towers coming down. Was she aware that the four cooling towers of Ironbridge power station came down during the course of the general election, and that one of the companies interested in that industrial brownfield land is one of the leading companies involved in driverless vehicles? If the company is successful, I hope that she will come and open the factory.
Andrea Leadsom
My right hon. Friend might be setting up a bit of contest, because I think that my right hon. Friend the Secretary of State for Transport, who is sitting next to me on the Front Bench, will be fighting me for that honour. None the less, my right hon. Friend the Member for Ludlow (Philip Dunne) makes a really good point about how, particularly in some of our areas of heavy industry, the fossil fuels of yesterday are giving way to the green future that we all want. He gives us a fantastic example of the work that is going on.
We have made great progress, but there is still much more to do. Our challenge now is to ramp up and scale up successes such as offshore wind, providing new sources of pride and prosperity across our United Kingdom.
In the first industrial revolution, our pioneers from Scotland to Cornwall forged their own path, and in so doing they became the envy of the world. James Watt’s Prussian rivals travelled hundreds of miles to sneak a glimpse of his steam engines in Birmingham. Richard Trevithick travelled as far as Peru to personally oversee his engines. Today, like them, we must be the first movers, not the last to act. From creating supply chains for electric vehicles to decarbonising our industrial clusters and designing low-carbon buildings, the opportunities of net zero are immense. In 2020, the first year of a new decade of decarbonisation, we must seize those opportunities.
Jim Shannon (Strangford) (DUP)
The Secretary of State has outlined a number of important stats. Local councils such as mine—Ards and North Down—are specifically involved in achieving climate change standards and environmental targets. Will she consider implementing a reward system for councils that are specifically involved in education and setting targets for them to achieve? If we do that, we may encourage councils to do even more.
Andrea Leadsom
The hon. Gentleman makes a very good suggestion. It is clear that central Government will not be the only actor in spending taxpayers’ money and driving every bit of innovation; they will be hand in glove with local civic leaders and, really importantly, the private sector. Government must set the direction and provide incentives, and then let others take the mission forward.
Steve Double (St Austell and Newquay) (Con)
My right hon. Friend rightly highlights Cornwall’s history in new technologies. Is she aware that large deposits of lithium have been identified in Cornwall? That has the potential to put Cornwall at the forefront of technology once again and to revive our precious mineral extraction industry. Will she ensure that her Department gives that fledgling industry all the support it needs to thrive?
Andrea Leadsom
My hon. Friend is a great champion for his constituency and for Cornwall more widely. In many ways, Cornwall is playing a major role in our moves toward net zero, and we in my Department will always be happy to talk to him about that.
Mr Tanmanjeet Singh Dhesi (Slough) (Lab)
Will the right hon. Lady give way?
Andrea Leadsom
I will make more progress before giving way again.
Crucial to this debate is the UK’s global leadership. The UK contributes only about 1% of global emissions, and that figure is falling. We cannot solve the challenge of global climate change just by doing the right thing at home, so we are using our strength to help to transform the world, from doubling our international climate finance contribution to nearly £12 billion to using our £1 billion Ayrton fund to support the world’s most vulnerable—for example, by designing clean stoves for the billions who rely on firewood. In 10 months’ time, COP26 in the fantastic UK city of Glasgow will be a seminal moment for climate action, as well as a massive opportunity for British business—a giant global shop window for the UK’s clean tech prowess, with countries across the world heading home with their pockets crammed full of British ideas, technology and expertise.
Mr Dhesi
The Secretary of State mentioned electric vehicles and charging points, and Slough Borough Council, in my constituency, is leading the way in Berkshire. Although we gratefully receive platitudes regarding the good work of local authorities, what measures will the Government put in place to support excellent councils financially, in addition to those mere platitudes?
Andrea Leadsom
There are far too many initiatives for me to talk about now at the Dispatch Box, but one example is the £1 billion that was recently announced for electric charging infrastructure. If the hon. Gentleman writes to me, I shall send him a full submission on the subject.
Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)
What the Secretary of State says about electric vehicles is absolutely right and I applaud it. My vast constituency comprises 5,752 sq km and has 18 charging points, so that is a move in the right direction. My point, however, is that electric cars are expensive—more than most people can afford. Does the right hon. Lady agree that a tax break—perhaps through the PAYE system —should be considered as a way to encourage people to buy electric cars?
Andrea Leadsom
My right hon. Friend the Transport Secretary is sitting right next to me, and he and I work closely on all sorts of incentives for people to move away from fossil fuels and toward decarbonisation. Of course, as the hon. Gentleman knows, transport is a key target area and we will talk more about it later.
Several hon. Members rose—
Andrea Leadsom
I will make more progress before I give way again.
From fighting climate change across the world to backing British ideas, we need a thriving economy to pay for it all. That is why I have set out my Department’s clear mission to build a stronger, greener United Kingdom. That mission is underpinned by three priorities: to lead the world in tackling climate change; to solve the grand challenges facing our society; and, quite simply, to make the UK the best place in the world to work and to grow a business. Today, as well as prioritising the pathway to net zero, we are solving the grand challenges facing our society, backing a new generation of problem solvers in science and business. From space technology to life sciences, the UK is developing satellites that measure climate change and creating ways to help people to enjoy five extra healthy years of life by 2035. From artificial intelligence to robotics, and from advanced manufacturing to green tech, the UK will seize the opportunities offered by this new industrial revolution. That will be underpinned by our commitment to increase our research and development spending to 2.4% of GDP by 2027.
Clive Efford (Eltham) (Lab)
Again, we are hearing the right noises from the Government, but the action is not being followed through. The commitment to net zero trips off the tongue, but can we achieve it if we continue to fail to meet our environmental targets?
Andrea Leadsom
I urge the hon. Gentleman to consider what I have just said in explaining the achievements, the ambition and what we are actually doing in practice. Perhaps he just needs to listen to what I am saying.
To seize the opportunities that lie ahead, we must make the UK the best place in the world to work and to grow a business. This Government will back business to the hilt, promoting inward investment and new export markets while also stamping out the poor practices that can sometimes give businesses a bad name. Our plan is to reduce burdens on business by reviewing and reducing business rates, and by resolving the scourge of late payments. As we leave the European Union, we will protect business confidence in supply chains, securing the best possible trading arrangements with our European partners. From diversity to sustainability and beyond, we will hold businesses to the same high standards, putting in place reforms to keep the UK a world leader in audit, corporate governance and transparency.
Dr Huq
I wanted to congratulate the Secretary of State on one thing that caught my eye in both the Queen’s Speech and last year’s Environment Bill: the biodiversity net gain mandated for planning authorities when making their decisions. That has not yet taken effect. Ealing Council has a meeting of its planning committee tonight. Will she encourage me by making a new year’s resolution of ensuring that such committees adopt the measure now so that the bulldozers do not sacrifice our nature? The future of our planet is at stake.
Andrea Leadsom
The hon. Lady will hear that there is a lot of support for her initiative across the Chamber. She is right that we do not want Government to be telling people what to do; we want people to draw their own conclusions and to seek to protect and preserve our incredibly valuable biodiversity, our green spaces and our precious habitats for future generations.
At the same time as making the UK the best place in the world to work and to grow a business, we want our employment Bill, to which we committed in the Queen’s Speech, to make sure that work is fairly rewarded. We want to protect workers’ rights and ensure fair pay, to create a world where flexible working is just called “working”, and to do more to support the crucial work that people do as carers and parents, helping people to balance work with the other things that matter in their lives.
Margaret Thatcher ended her UN speech in 1989 by saying:
“We are the trustees of this planet, charged today with preserving life itself—preserving life with all its mystery and all its wonder.”
I hope that that is something on which we can all agree, whatever our party or politics. Thirty years ago, politicians could barely have imagined the technologies that would be available today. Today, we can only dream of the world of 2050. Together—as a House, as a country and as an international community—we must act. Our action can make a global difference. Instead of self-doubt, we need self-belief in our ability to build the low-carbon, high-tech United Kingdom that we all want, a stronger, greener future for people across our shores, and a sustainable future for our planet.
Alan Brown (Kilmarnock and Loudoun) (SNP)
The word “revolution” means either an overthrow or a radical and pervasive change in society, especially one made suddenly. Have we really had a green industrial revolution? Have we had a revolution in Government? I would suggest that, if anything, there has been a counter green revolution, given that the Tory Government scrapped the Department for Energy and Climate Change, thus highlighting their priorities in recent years.
I have to acknowledge that we have made fantastic strides forward with renewable energy, but has it been a revolution? I would argue that, owing to the UK Government chopping and changing strategy, the process has been too stop-start to be classed as revolutionary. We have seen a welcome increase in the deployment of renewable energy, and UK Government support has facilitated that, but owing to policy changes, there have been too many peaks, troughs and, in some cases, catastrophic failures because of the actions of the UK Government.
The first example of that is onshore wind, which was deployed to great effect in Scotland, with prices falling rapidly due to the initial Government policies. It was a renewable energy revolution that Scotland embraced—one that saw 75% of gross electricity demand met by renewable generation in Scotland in 2018. However, the Tory shire prejudice against onshore wind means that the Tory Government are now blocking onshore wind across the UK, against Scotland’s wishes.
The Committee on Climate Change states that onshore wind capacity in the UK needs to increase from 13 GW to 35 GW by 2035 as part of the net zero transition, yet there is no route to market at present for onshore wind, despite it being the cheapest form of electricity generation. The former Secretary of State for Scotland should hang his head in shame for blocking the redeployment of onshore wind in Scotland. A report by Vivid Economics estimates that this could cost 2,300 jobs in Scotland and add £50 a year to everybody’s energy bills.
As the debate on Scottish independence re-intensifies, we need to remember the broken pledge and propaganda on onshore wind in 2014. We were told how well Scotland does out of onshore wind subsidies, how that would continue and how the UK as a whole would support onshore wind in Scotland, but instead the subsidies were removed a year or so after. That is another broken promise in 2014 that the public need to be reminded of.
When we consider renewables and wind in particular, it is a reminder that the transmission charging regime is a straitjacket around Scotland. The punitive charges, especially in the north of Scotland, can be a deal breaker for some developments. The charging system needs a complete overhaul to allow deployment of renewable energy for maximum benefit.
Similarly, we need a timescale for the delivery of interconnectors to Scotland’s islands. The change in classification for island onshore wind so that it can bid in pot 2 contract for difference auctions is welcome, but without the interconnectors these opportunities cannot be maximised. Ofgem needs to reconsider its rejection of a 600 MW interconnector to the Western Isles. Why is it holding out for a less ambitious 450 MW interconnector?
We need greater strategic vision from the UK Government on interconnectors. We need interconnectors to the continent and Norway, because of the abundance of hydroelectric energy. Is it not telling that Ireland is getting an interconnector to France, paid for by the EU at a cost of half a billion pounds? What does that signal for the future direction of the single energy market, and where does Brexit and a possible no-deal crash-out leave the UK without those vital interconnectors?
In the past—in another policy change—we had the carbon capture fiasco, when the Treasury pulled £1 billion that was on offer, and which looked set to deliver carbon capture and storage in Peterhead. That was a wasted opportunity—money down the drain with nothing to show for it—and it cost 600 jobs in Peterhead and ruined the chance for the UK and Scotland to be a world leader in that technology. I am asking Westminster to please back Scotland’s CCS potential. With 35% of the available capacity in the whole of Europe, we could still be a world leader. However, it needs a fast start, and better investment in Scotland. The Committee on Climate Change has made it clear that carbon capture is not a wish; it is a necessity in order to hit net zero by 2050.
Solar energy was another possible success story, yet, when it was looking good, the Tory Government pulled the feed-in tariffs and now they have quadrupled the VAT on solar installations, so they have destroyed the industry just as it was heading towards subsidy-free installations. That is another example of a UK Government policy revolution wreaking havoc on an industry. The VAT decision must be reversed as soon as possible.
And yet, when it comes to nuclear and the Government’s nuclear obsession, money is no object. We signed up to Hinkley Point C, which has a 35-year concession at a strike rate of £92.50 per MWh, and yet, as the Secretary of State is aware—she spoke about the benefits of offshore wind—offshore wind now has a strike rate of £40 per MWh for just 15 years, so it is about three to four times cheaper than nuclear energy. Why are the Tory Government continuing to pursue new nuclear projects? It makes no sense. [Interruption.] Can the Secretary of State explain why?
Andrea Leadsom
The hon. Gentleman will be very aware that there is a difference between the baseload and the variability of renewables.
Alan Brown
And the Secretary of State will know very well that that baseload is becoming a moot argument. It was argued that Hinkley Point C was required by December 2017 for the baseload to stop the lights going out. Now Hinkley will not be delivered till 2025 by the earliest, and the lights have not gone out. That shows how much the market has changed. Half the existing nuclear power stations will be decommissioned by 2024, and they cannot be replaced by new nuclear stations in that time, so the Government really do need to look again at their strategy, and new nuclear power stations is not that.
The Government say that the National Infrastructure Commission have said that there should be only one new nuclear power station, because of the change in renewables technology. Again, it seems that the Government are not actually listening to the body they say they are listening to.
As an alternative to nuclear, we also need to look at sector deals for investments such as marine and tidal energy, and also floating offshore wind. Where are their sector deals and what is happening with those?
Has there even been an industrial revolution? Again, I would suggest not. The UK Government failed to back the technological development of onshore wind and the fantastic opportunities there. That led to the manufacturing sector of that industry being developed elsewhere, particularly Denmark. That was a massive lost opportunity, and it cannot be replicated by other emerging technologies.
Even now, when it comes to offshore wind, the CfD auctions do not include a quality mechanism that would allow bidders to be rewarded for using local supply chains. That would be an ideal way to generate industrial jobs around the coastal communities, and it would provide greater opportunities for companies in Scotland, such as BiFab and CS Wind. Why are the UK Government not willing to incorporate such a procurement quality assessment mechanism in the auction process? It makes sense, and it would also reduce the construction carbon footprint for the delivery of such projects.
If we are to hit net zero in the UK by 2050, we need a proper green industrial revolution. We need the large-scale development of CCS, which, as well as creating jobs, will allow a long-term just transition for the oil and gas sector. We need radical measures to decarbonise our heat. Our domestic heating systems are the elephant in the room when it comes to the net zero target. I said earlier that 27 million houses relied on fossil fuels for heating, so a change in that mechanism for 27 million homes needs to be a proper revolution. It is likely that we shall see gas central heating boilers change to hydrogen boilers, and we know that hydrogen blending is a short-term transitional measure in decarbonising the gas network, but we need the strategies and policies in place, and the necessary changes in regulation to allow that to happen. There, too, we need concrete plans from the UK Government.
If I may switch back to Scotland, Scotland has been attempting to undergo a real green industrial revolution, but again we have been hampered by UK Government policies, the U-turns and the lack of strategic vision. Where is the energy White Paper that we were promised last year? It is ridiculous to have a clean growth strategy, an industrial strategy, but not an overarching or a linking energy policy that brings those together. We need to see that sooner or later.
Where is the Government response to the National Infrastructure Commission? We are still waiting on that. That is another organisation that states that energy efficiency should be treated as a national infrastructure programme. It would create jobs and it reduces carbon emissions, energy demand and fuel poverty. And yet, again, the Tory Government have not addressed that. They previously chose to go down the route of the green deal, which actually forced people to take out loans. Then the green deal led to scandal, with the mis-selling of solar panels by the company HELMS, leaving thousands of people with 25-year loans and faulty installations. The UK Government have still not rectified that. Will the Secretary of State consider that as well?
Meanwhile, the Scottish Government spend four times as much per capita on energy efficiency measures as the UK Government. For that, they have been praised by industry, third sector organisations and the Business, Energy and Industrial Strategy Committee. Put simply, Scotland leads the way in energy efficiency, and by 2021 the SNP Government will have invested £1 billion in energy efficiency programmes.
The one energy efficiency measure that the UK Government brought in is the energy company obligation scheme—ECO. But the Committee on Fuel Poverty states that that is not helping the people who require it the most. In effect, that means that those who struggle to pay their bills for energy costs now pay extra on their energy bills for ECO, which is then funding energy efficiency measures for those most likely to be able to afford them. That is completely bonkers. There is also a really serious point, because every year 3,000 people in the UK die as a result of fuel poverty—the second-worst rate in Europe. Urgent, coherent action is needed to address fuel poverty and to address energy efficiency measures.
Scotland leads in energy efficiency, and we also lead in climate change registration targets: the first Government to call a climate change emergency; a net zero target for 2045; and a 75% target reduction by 2030. According to the Committee on Climate Change, Scotland has become the leading UK nation in reducing greenhouse gas emissions under the Climate Change (Scotland) Act 2009. However, these latest targets are world-leading. Our 2030 target goes beyond what the Intergovernmental Panel on Climate Change report states is required globally to limit warming to the 1.5°, as per the Paris climate agreement. We have also taken the difficult decision not to reduce air passenger duty when it is devolved. In the past couple of days the UK Government have been flip-flopping on that, and are all over the place when it comes to APD.
Going forward, the Scottish Government’s “Programme for Government” puts the green new deal at the heart of Government policy. Securing transition to net zero will be the primary mission for the Scottish National Investment Bank, supported by £130 million this year. The creation of the SNIB will provide £2 billion of long-term capital to businesses and infrastructure projects, to help transform the Scottish economy, and again reduce carbon emissions. That contrasts directly with the UK Green Investment Bank, set up by the Tory Government and then sold off without assurances of green aims or a UK focus.
We know that transport is a major carbon emitter. If we are looking at the roll-out of electric vehicles, I suggest that we need to look at Norway. It has undertaken a real revolution towards electric and low emission vehicles. In 2019, 58% of new car sales were of plug-in low-emission vehicles and 42% of overall sales were of fully electric cars. Meanwhile, here in the UK, flags are being waved and we are supposed to celebrate the fact that we have reached 3% sales of electric vehicles. According to the Committee on Climate Change, the UK deadline of 2040 for the phase-out of fossil fuel vehicles is way too far ahead, and even then the plans for its delivery are too vague. I suggest that the UK Government look to a small, independent, prosperous country such as Norway for inspiration, and to see how things can be done properly.
The UK has made strides regarding carbon emissions, but, as we have heard, there is a long way to go. While we look for solutions, nature is unfortunately undergoing its own climate change revolution. We have seen that with the bushfires in Australia, the 4 million hectares of Siberian forest that burned a few months ago, and the fires in Greenland, Alaska and Canada. The six hottest years on record have been the last six consecutive years, with warming oceans and melting ice. Things are critical, and Lord Deben, Chair of the Committee on Climate Change, said that the UK’s efforts to deal with climate change have fallen short. Indeed, in the interim progress report he states that
“policy ambition and implementation now fall well short of what is required.”
We have a Prime Minister who ducked out of TV debates on climate change, so we are looking for real leadership on this issue. I am glad that Scotland is showing such leadership, but I know it could do so much more if it were a small, independent country that was able to grasp the nettle in the way that Norway has.
Energy Emergencies Executive Committee Report
Andrea Leadsom Excerpts(4 years, 4 months ago)
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The Secretary of State for Business, Energy and Industrial Strategy (Andrea Leadsom)
On Friday 9 August 2019, over 1 million customers were affected by a major power disruption that occurred across England and Wales and some parts of Scotland. The power outage was due to the loss of a mix of generation including a gas-fired power station and an offshore wind farm.
Though the power disruption itself was relatively short-lived—all customers were restored within 45 minutes—the knock-on impacts to other services were significant. This is especially true for rail services which experienced major delays that extended into Sunday 11 August. The wider disruptions were caused by automatic safety systems under the control of individual service providers, which reacted to frequency and voltage fluctuations, or problems with their back-up power supplies.
Given the severity of the incident, I commissioned the Energy Emergencies Executive Committee (E3C) to conduct a review to identify lessons learnt and put in place a robust action plan to improve the reliability and integrity of our power network. The committee’s final report was published on Friday 3 January. This follows the publication of its interim report on 4 October. The final report sets out 10 clear actions and these will be implemented in full, to help prevent and manage future power disruption events.
Alongside the E3C report, Ofgem also published the conclusions of its own investigations into the incident. This set out a series of cross-industry actions for maintaining the resilience of the electricity system, as well as announcing voluntary payments totalling £10.5 million for companies involved in the power outages.
GB power disruption: E3C lessons learnt and actions
Following a lightning strike on an overhead transmission line, there was a near simultaneous generation loss at two transmission-connection generators; and a significant number of smaller embedded generators connected to the distribution network.
The two transmission-connected generators experienced technical issues near-simultaneously. Both generators have acknowledged the role they played in the incident and since implemented technical fixes to ensure that their systems can withstand similar incidents in the future. The E3C will share the lessons identified with generators across the UK.
The loss of smaller embedded generation on the day was greater than expected. The E3C report sets out a series of actions to assess the need for improvements to the governance, monitoring and enforcement processes for large and smaller generators.
On 9 August, the cumulative loss of generation exceeded the amount of back-up generation on hold. This triggered the first stage, a demand disconnection protection system, which is the last line of defence when the system is out of balance. This resulted in over 1 million customers being disconnected from the network.
Given the events on 9 August, the E3C report recommends a review of how much back-up generation the electricity system operator should be required to hold. As this is funded through consumer bills, the review will include a cost benefit analysis of increasing the amount of reserves.
Although the demand disconnection protection system worked broadly as intended, the review identified some discrepancies in its operation; therefore, the report recommends further analysis of the schemes performance in order to develop options for short and long-term improvements. This includes considering whether distribution network operators should afford particular types of customers any form of protection, especially during the early stages of an incident.
In addition to the direct impacts of customers being disconnected from the electricity network, wider disruptions on the day were caused by the automatic safety systems owned and operated by individual service providers reacting unexpectedly to the frequency and voltage fluctuations on the electricity network; or problems with their own back-up power supplies.
The E3C will consider what more can be done to support essential services owners and operators with advice and guidance to put in place more robust business continuity plans.
Effective communication is a vital part of any emergency response. Unfortunately, industry communications on the day fell below the standard expected, with infrequent and disjointed updates to the general public.
The E3C will develop and roll out new communications processes to ensure the general public receives regular updates during any future disruptions. There will also be a review of operational protocols to make sure they are fit for purpose.
Where appropriate, the E3C and Ofgem reports contain jointly agreed actions and recommendations. The E3C will take the actions set out both reports to drive forward changes across the sector. The committee will provide quarterly updates to my Department and Ofgem.
The UK leads the world by working to eradicate its contribution to climate change by 2050. The actions I have outlined here today will form part of a wider package of work already under way across government and industry to ensure the UK’s energy system remains resilient as we transition to clean and affordable energy.
[HCWS19]
Work of the Department
Andrea Leadsom Excerpts(4 years, 6 months ago)
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The Secretary of State for Business, Energy and Industrial Strategy (Andrea Leadsom)
I would like to update the house on some of the key achievements of the Department for Business, Energy and the Industrial Strategy since it was created in July 2016.
Leading the world in tackling climate change
Achieving net zero carbon emissions is a key departmental priority and we have set out actions we are taking across the economy to accomplish this.
We committed to set a legally binding target to end the UK’s contribution to climate change to net zero by 2050.
We have set out further actions we are taking across the economy to achieve net zero by 2050. These include adding around 6GW of clean energy to the grid by 2025 through the contracts for difference (CfD) scheme, enough to power over 7 million homes at record low costs.
We announced £200 million of initial funding for a programme which aims to design and build a nuclear fusion plant by 2040, looking to exploit the potential for clean, safe and inexhaustible power.
We announced £27.8 million of Government funding to advance carbon capture, utilisation and storage (CCUS) technologies in the UK, a crucial step towards the UK’s net zero emissions.
We announced investment of up to £1 billion over five years to boost the production of key green technologies in the motor industry, including batteries, electric motors, power electronics and hydrogen fuel cells. This is in addition to £400 million for electric vehicle charging infrastructure.
The UK was nominated to host the COP26 UN climate talks next year in partnership with Italy, recognition by world leaders of our strong global on climate issues.
UK emissions in 2019 were 42% lower than in 1990, while growing the economy by 72%. The UK has delivered fastest decarbonisation in G20 since 2000 according to PWC.
The UK’s fifth carbon budget was passed into law, equivalent to a 57% reduction on 1990 levels by 2032.
We committed £5.8 billion of international climate finance from 2016 to 2021, placing us among the world’s leading providers of climate finance, in addition to the £3.87 billion we provided from 2011 to 2016. The Prime Minister later announced the doubling of international climate finance spend to £11.6 billion.
Our international climate finance programmes are delivering real results on the ground and are catalysing wider change.
Among others, we have built the market for concentrated solar power (CSP) in developing countries.
We have contributed £720 million to the green climate fund, financing projects and programmes in a range of developing countries.
We published the Clean Growth Strategy: Leading the way to a low carbon future policy paper. This set out the strategy for decarbonising all sectors of the UK economy through the 2020s, benefiting the economy while meeting commitments to tackle climate change.
We held the UK’s first green GB week in 2018, a week to celebrate clean growth and raise awareness regarding how the public and businesses can tackle climate change.
We launched the smart export guarantee consultation which proposed that large electricity suppliers must offer small scale generators a price per kWh for the electricity they export to the grid. The scheme came into force in June 2019.
We are taking action to make sure the UK’s energy system has adequate capacity and is diverse and reliable.
We gave the go-ahead agreement to proceed with the first nuclear power station in a generation at Hinkley Point C to ensure future low-carbon energy security. Hinkley will provide 7% of Britain’s electricity needs for 60 years. UK-based businesses will benefit from more than 60% of the £18 billion value of the project, and 26,000 jobs and apprenticeships will be created.
We continued to support the capacity market auctions. The capacity market aims to ensure security of electricity supply by providing a payment for reliable sources of capacity, alongside electricity revenues, to ensure the delivery of electricity when needed.
The Department’s ambition is for the UK to have the lowest energy costs in Europe, for both households and businesses.
The Domestic Gas and Electricity (Tariff Cap) Bill put a requirement on the independent regulator, Ofgem, to cap energy tariffs until 2020. It came into force in January 2019, saving customers on default tariffs around £76 on average and as much as £120 on the most expensive tariffs.
As of March 2019, there were over 14.3 million meters operating under the smart meter programme.
Making the UK the best place to work and grow a business
The Secretary of State has set out her ambition to make the UK the best place in the world to work and grow a business. Creating fairer, inclusive workplaces and unlocking enterprise by cutting the burdens on businesses are two sides of the same coin and both equally important.
We announced that the British Business Bank would expand its venture capital and debt support programmes. A total of 82,000 smaller businesses have been supported by the British Business Bank.
The Brydon review examined the quality and effectiveness of the audit market and looked at what audits should be in the future. It addressed the audit expectation gap: the difference between what people think an audit does and what it actually does. It will also look at the scope of an audit, any changes that may need to be made to it and how it can better serve the public interest.
We consulted on the competition and markets authority’s far-reaching and ambitious recommendations to improve quality, resilience and competition in the statutory audit market. We are committed to acting on the CMA’s findings and will respond as soon as possible.
We established the Office for Product Safety and Standards to enhance consumer protections.
We published the Consumer Green Paper, aimed at responding to the challenges and opportunities of modern consumer markets via a regulatory and competition framework. This was followed by consultation and engagement on the Green Paper.
We carried out a Smart Data Review and proposed a set of measures to ensure consumers’ data is handled with the security they expect, while enabling them to continue to have access to the best deals available.
The Government asked Matthew Taylor to conduct an independent review of employment practices in the modern economy, which was published in July 2017.
We responded to this review with the good work plan. The plan set out proposals to ensure workers know their rights and receive the benefits they are entitled to, and that action is taken against employers who breach those rights. Proposals include:
First-day entitlements to holiday and sick pay;
A new right to payslips for all workers, including casual and zero-hour workers; and
A right for all workers to request a more stable contract, providing more financial security for those on flexible contracts.
As of 1 April 2019 the national minimum wage (NMW) was £7.70, and the national living wage (NLW) was £8.21. The annual earnings of a full-time minimum wage worker have increased by over £2,750 since the introduction of the NLW in April 2016. An estimated 1.8 million workers are expected to benefit from this above inflation increase. By 2020, almost 3 million low wage workers are expected to benefit directly from the NLW, with up to 6 million in total potentially seeing their pay rise as a result of a ripple effect up the earnings distribution.
The Parental Bereavement Act entitles parents who lose a child under the age of 18 to two weeks paid leave, supporting those affected by the tragedy of childhood mortality.
The Department consulted on a number of key employment issues. These include measures to boost workplace participation and to tackle employers misusing flexible working arrangements.
We announced a Tipping Bill, reaffirming our commitment to delivering employment rights reform to ensure our employment practices keep pace with modern ways of working.
Solving the grand challenges facing our society
Our industrial strategy is built to ensure we focus our efforts and resources on solving the grand challenges facing our society. Through this we will increase productivity and improve lives, as well as helping to make the UK a science superpower.
The “Industrial Strategy: building a Britain fit for the future” White Paper set out the Government’s long-term plan to boost the productivity and earning power of people throughout the UK, provide more opportunities for young people to find high-quality, high-skilled work, and spread jobs, prosperity and opportunity around the whole country.
We launched four grand challenges to put the UK at the forefront of the industries of the future:
Growing the artificial intelligence (Al) and data driven economy
Clean Growth
Future of Mobility
Ageing Society
We are pursuing five individual missions related to these grand challenges. Each of the missions focuses on a specific problem, bringing government, businesses and organisations across the country together to make a real difference to people’s lives.
We agreed 11 sector deals, partnerships between the Government and industry to create significant opportunities to maximise the potential of each sector. Each deal will substantially boost the sector’s productivity, through greater investment in innovation and skills
The Space Industry Act created a regulatory framework for the expansion of commercial space activities and the development of the UK space port. It will enable the first commercial space launch from UK soil in history, creating the potential for hundreds of highly-skilled jobs and bringing in billions of pounds for the economy
We launched the AI package for 200 UK doctoral studentships in AI and related disciplines which could help diagnose diseases like cancer earlier and make industries, including aviation and automotive, more sustainable.
The “Future of mobility: urban strategy” outlined the Government’s approach to maximising the benefits from transport innovation in cities and towns, therefore improving choice and the operation of the transport system. The strategy aims to make transport safer, more affordable and accessible to all.
We launched the West Midlands and Greater Manchester local industrial strategies, working with local leaders to boost the productivity and earning power of people throughout these regions. Local industrial strategies will allow places to make the most of their distinctive strengths, helping to inform local choices, prioritise local action and, where appropriate, help to inform decisions at the national level.
We announced funding for strategic priorities fund (SPF) wave 2 programmes on healthy ageing, clean air and productivity. These will help us to fulfil our goal of improving lives and increasing productivity through high-quality research and innovation. Programmes include research into care robots that could make caring responsibilities easier; digitising museum exhibits so they can be seen in peoples’ homes, libraries and schools; research into teenage mental health issues and closing the productivity gap with investment in super computers and a new productivity institute. The SPF Wave 2 total programme funding allocation is £496.8 million.
We set out plans to rewrite the regulation rulebook to ensure the UK leads the tech revolution and empowers consumers. The “Regulation for the Fourth Industrial Revolution White Paper” outlined how the Government will transform the UK’s regulatory system to free up businesses and innovators to test their ideas, make use of the latest technologies and get their products to market quicker, keeping the UK at the forefront of innovation.
We committed to increase investment to 2.4% of GDP by 2027. The Government are increasing spending on R and D by £7 billion over 5 years by 2021-22. This will be the largest increase in nearly 40 years. Within this funding we have:
Allocated £1.7 billion to the industrial strategy challenge fund (ISCF) over two waves of investment; £1billion was announced for wave 1 in Budget 2017, and a further £725 million announced in the industrial strategy White Paper. These challenges have been developed to align with the four grand challenges set out in the White Paper. We have announced nine challenges under the third wave of the ISCF.
Announced investment of £118 million to attract highly skilled researchers to the UK through a new Ernest Rutherford Fund, providing fellowships for early-career and senior researchers.
Committed £900 million to the UK research partnership investment fund over 2012-2021, which will lever double from private sources into R and D collaborations between universities, business and charities.
Committed to developing the UK’s national space capabilities, including:
£1million, matched by industry, for innovative new business ideas that could benefit from a flight to the international space station. These could be anything from medicines and innovative materials developed in the low gravity environment, to space-flown consumer products.
£20 million is being invested to predict severe space weather events by improving systems at the met office space weather operations centre and building the UK’s knowledge on how to forecast and better prepare for space weather.
To support R and D we have also within this funding we have:
Published “Higher Education: Success as a Knowledge Economy” (White Paper, 2016). This document set out a range of reforms to the higher education and research system, aiming to boost competition and choice in higher education, and strengthen the way the sector is regulated, and research is funded.
Passed the Higher Education and Research Act 2017, bringing together the seven research councils, Innovate UK and research functions of HEFCE into a single, strategic agency called UK Research And Innovation (UKRI) to encourage collaborative research across the sciences, and closer co-operation between researchers, innovators and entrepreneurs. UKRI was formally launched in April 2018.
Getting businesses ready for Brexit and the opportunities beyond
Preparing for all scenarios and delivering a Brexit that works for business has been the Government and the Department’s immediate focus.
As part of the Government campaign to ensure people and businesses are ready for Brexit, the Secretary of State hosted nine business roundtables, including five regional events, and visited businesses across the UK, in locations including Belfast, Aberdeen, Cardiff and Manchester. Businesses participating in the roundtables included Tate and Lyle Sugars, JCB, Tesco, Unilever, Laing O’Rourke, Scottish Power and Diageo.
We ran a “Get Ready for Brexit” roadshow, with 30 events over six weeks across the UK, where 3,132 attendees received tailored advice and support on preparing for Brexit. We also produced an online version of the roadshow, which has attracted nearly 6,000 viewers.
The Department launched the business readiness fund to help business representative organisations (BROs) and trade associations to support businesses to be ready for EU Exit. Initially launched as a £10 million fund, a further £5 million has been made available due to the fund’s popularity. So far over £10 million in grants has been issued to support 124 BROs.
We published 28 of the Government’s 106 technical notices to help the public prepare for Brexit, including Horizon 2020, state aid, workplace rights, nuclear research, mergers and trading goods.
The Nuclear Safeguards Act made provisions for nuclear safeguards after the UK leaves Euratom, ensuring the UK meets its international commitments.
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Cobham plc Merger
Andrea Leadsom Excerpts(4 years, 6 months ago)
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The Secretary of State for Business, Energy and Industrial Strategy (Andrea Leadsom)
On 25 July 2019, the boards of Cobham plc and a subsidiary of funds managed by Advent International, a US private equity firm, announced that they had reached agreement on the terms of a recommended cash acquisition of Cobham for approximately £4 billion.
On 17 September, following advice from relevant Government Departments and agencies, I initiated a public interest intervention under the Enterprise Act 2002 into this merger on the grounds of national security. I required that the Competition and Markets Authority investigate the merger and provide me with a report on the transaction by 29 October, which it has done. The Secretary of State for Defence has also written to me about the national security implications of the merger and the discussions which have taken place with the parties to propose undertakings to address those implications. I am grateful for the advice I have received and the constructive engagement from the parties.
The decision on how to proceed in this case requires further full and proper consideration of the issues. Having received these reports, I will therefore have further discussions with my ministerial colleagues and the parties to the transaction to inform the decision-making process. I will update the House in due course so that hon. Members can scrutinise the Government’s decision. The full legal process will continue to be followed throughout the general election period.
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Audit Reform
Andrea Leadsom Excerpts(4 years, 6 months ago)
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The Secretary of State for Business, Energy and Industrial Strategy (Andrea Leadsom)
The Government recognise the role that audit plays in the effective functioning of the UK’s financial markets and broader economy.
To help meet our ambition that the UK should become the best place in the world to work and to grow a business, we must take forward reform of audit. This will include reforming audit, the audit regulator, and the audit market. Change would affect a large number and a wide variety of companies, firms, and interests; but it is clear that there is a need for truly long-lasting and effective change.
I want to see the UK leading the world in the next phase of improvement for corporate governance and audit. In the first quarter of next year—when I have considered Sir Donald Brydon’s recommendations—I intend to bring together all relevant elements of reform in order to take that forward.
I am already working to create the new audit, reporting and governance authority, to replace the Financial Reporting Council. I have started with appointing new leadership at the Financial Reporting Council, who are driving a new vision and culture for the regulator. They are now implementing those recommendations made in Sir John Kingman’s excellent report that are not contingent on legislative change.
Future reform will cover not just the function of the regulator, but also the purpose and function of the audit market, and audit itself. I intend to bring forward an ambitious and coherent programme of change that drives up quality, resilience and choice. It will include proposals on the function and oversight of audit committees and new internal control arrangements within businesses; on the responsibilities of boards and directors; on how both investors and regulators can better hold companies and their auditors to account; and to reduce the reliance on a few large audit firms for the provision of audit.
All of those factors must be and will be assessed and weighed together, so that the whole package is coherent and effective. As recognised by the Business, Energy and Industrial Strategy Committee, whose work on audit I welcome, some reform will require radical action in order to ensure that it is meaningful and enduring, and that it fully addresses the very real concerns that we all share with the current state of the market.
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