UK Trade & Investment

Debate between Charles Hendry and Daniel Kawczynski

Thursday 12th September 2013 Westminster Hall

[Charles Hendry (Wealden) (Con)]

I congratulate my hon. Friend the Member for Shrewsbury and Atcham (Daniel Kawczynski) on securing this debate. He made a whole range of critically important points. Furthermore, he has given us the opportunity to discuss these issues and the important contribution that trade can make to our economic well-being, and I thank him for that. I also want to put on record my role as the Prime Minister’s trade envoy to Azerbaijan, Kazakhstan and Turkmenistan, and as president of the advisory board of the Russo-British chamber of commerce. Those are all unremunerated roles, but should be put on the record before my comments are made.

When I was a Minister travelling overseas, I was often asked, “Why do we not see more British companies here? Where are the British companies?” It was evident to me that right across the world there is an admiration for the skills, expertise and creativity of British companies, the brilliance of our education system, and the integrity and straightforwardness of British companies. Given the tenor of what my hon. Friend the Member for Shrewsbury and Atcham said, working with that enthusiasm in many countries to ensure a greater British presence should be absolutely at the heart of our trade and foreign policy. I am delighted by the extent to which the Government have been doing just that.

What I also saw, as a visiting Minister and subsequently, is that historically we have gone about this trade in a different way from the French, Germans and Italians. Part of that was because we did not separate out trade and politics. Too often, difficult political issues were allowed to become a real barrier to trade. My view, and that of the Germans, the French and others, is that trade is one of the best ways of creating more openness, greater transparency and a better relationship. The more that we can get British companies, accountants, solicitors and others in there, the better our prospects of leading those countries in the direction in which we want them to go.

There is a great deal that needs to be done. Our trade needs to be broadened to more countries. Our focus as trade envoys in the fast-growing emerging markets is an important part of that process. Through UKTI, we can help take businesses beyond the normal markets. For example, we can take them beyond Moscow and St Petersburg and get them into Tatarstan and some of the other Russian republics, which have been pretty closed to many British companies.

We need to ensure that we take the focus beyond the most expected industries. In the three countries in which I am trade envoy, the focus, inevitably, is on oil, gas and minerals. Let us look at the opportunities in design. Astana is holding Expo 2017, and we want British companies to build the infrastructure and the low-carbon transport system. Turkmenistan is spending half the budget of the London Olympics on the Asian indoor and martial arts games. Let us ensure that we capitalise on this extraordinary moment in our history when we are seen to have run one of the best games ever. I welcome such moves as part of the drive we are seeing through UKTI.

My experience of UKTI is of a lean, thinly spread organisation. I marvel at how much it is able to do, and at how every request that goes through is dealt with speedily. It is enthusiastic and shows real expertise in the countries in which we work. I link that with Scottish Development International. Clearly, UKTI does not cover Scotland in the same way that we are talking about, but around the world, the work of SDI should also be recognised.

However, those organisations can only do their work because of the way in which they work with other groups, including business groups and organisations such as the Kazakh-British Trade and Industry Council, the Turkmenistan UK Trade and Industry Council and similar groups that focus on bringing businesses together. Those groups are run by people with a detailed understanding and depth of knowledge of other countries, to try to advocate and advance the role of British companies. That must be seen as an integral part of this process, as is working with organisations such as British Expertise, which does a tremendous amount to lead trade missions and give people the chance to visit other countries for the first time. It recognises that for many people doing so, there is a nervousness, because there is a different language, culture and way of life. People going abroad do not want to do something that inadvertently offends their host, so going through an organisation such as British Expertise can be important. Of course, the chambers of commerce, such as the Russo-British chamber of commerce, can organise separate events to bring together people who are keen to do business and to take forward the bonds of co-operation between countries.

I part company with my hon. Friend the Member for Shrewsbury and Atcham on this point: I am not persuaded that such work would be best delivered by a stand-alone agency that has been taken out of Government. I want the Under-Secretary of State for Skills, who is here today, to bump into people from UKTI in the corridors of Nos. 1 to 19 Victoria street; to know that they are people who work directly for him; and to know that he does not have to go through the formalities of working with an agency and going through its chief executive or directors simply because he wants to say, “Remind me what is going on in Ukraine,” or “Tell me more about Algeria.” I want him to be able to call those people into his office at short notice and get updates, and to be able to capitalise and move quickly when an opportunity arises.

That direct reporting line to Ministers is absolutely central to the ability of UKTI to be successful. UKTI’s role is simply too important to be put at arm’s length from the core of Government; UKTI should be a part of the process of government. Also, UKTI’s dual reporting structure—it reports to both the Department for Business, Innovation and Skills and the Foreign and Commonwealth Office—is very valuable, because it engages more Ministers in its work. It ensures that more Ministers, when they are thinking of going abroad, are also thinking, “Which companies can I take with me, and how do we maximise the benefit for UK plc in the course of those visits?”

[Daniel Kawczynski]

I understand the point that my hon. Friend is making, and we will have to agree to disagree on this issue. However, only two members of UKTI’s staff have been sacked during the last six years for non-performance; that is my understanding. Does he at least share my view that it is important that the chief executive of UKTI should be more empowered when it comes to the hiring and firing of UKTI staff?

[Charles Hendry]

That can be achieved within the focus of the Department, and we can certainly see if there are ways in which the chief executive of UKTI can be given the authority that my hon. Friend calls for. However, removing UKTI from the direct responsibility of individual Ministers would lead to a loss of a significant part of the working relationship—a part that brings real benefits.

Wind Farms (Mid-Wales)

Debate between Charles Hendry and Daniel Kawczynski

Tuesday 10th May 2011 Westminster Hall

[The Minister of State, Department of Energy and Climate Change (Charles Hendry)]

It is a great pleasure to serve under your chairmanship, Mrs Riordan, at the end of a fascinating and stimulating debate. I congratulate my hon. Friend the Member for Montgomeryshire (Glyn Davies) on securing it, and on how he introduced it. I am glad that he has overruled his surgeon’s advice and come here to ensure that his constituents’ voices on this issue are heard clearly. There is no doubting the passion, commitment and integrity that he brings to the debate.

I am also pleased that, as the hon. Member for Ogmore (Huw Irranca-Davies) said, the issue transcends national boundaries. We have heard from Scotland and parts of England. It is not just a debate about mid-Wales; it has spread to every part of this country. We have no doubt whatever about the strength of feeling represented. I reassure him at the outset that I believe that onshore wind has a role to play, but it must be in the right location, and it must have more democratic support. We regularly hear hon. Members of all parties express the feeling that too often, onshore wind is imposed on communities that do not want it. I am keen to ensure that we address that democratic deficit constructively in our plans.

I am grateful to the hon. Member for Ayr, Carrick and Cumnock (Sandra Osborne) and my hon. Friends the Members for Shrewsbury and Atcham (Daniel Kawczynski), for Brecon and Radnorshire (Roger Williams), and for Wells (Tessa Munt) for their contributions, as well as to those who intervened in this debate. I think that we agree broadly that there is no question but that we must become a low-carbon economy; I welcome the Opposition spokesman’s supportive comments on that. Becoming a low-carbon economy will require enormous work and a great deal of investment. Perhaps £200 billion will need to be spent in the next 10 to 15 years on new generation, transmission and distribution, so that we can build secure supplies of low-carbon generation.

It is also absolutely clear that we cannot rely too heavily on one form of low-carbon technology. The last Government were perhaps a bit of a one-stick golfer in that regard, and did not see enough of the opportunities elsewhere. That is why we have put additional focus on developing marine and tidal power as technologies that can make a big contribution in the decades to come. We also have strong ambitions for offshore wind and are implementing measures to take it forward, alongside biomass, bio-energy, new nuclear power without public subsidy, and carbon capture and storage. We recognise that some low-carbon technologies are not as cheap as onshore wind, but the costs will decrease over time as the technologies become more mature. It is crucial, as I hope my hon. Friend the Member for Shrewsbury and Atcham will agree, that we maintain that diverse energy mix.

[Daniel Kawczynski]

One reason why our national policy is perhaps not as developed as we would like is that the previous Labour Administration had, I believe, nine Energy Ministers in 11 years. The constant changing of Ministers by Labour Prime Ministers impeded progress within the Department. I look forward to seeing the Minister in his position for many years to come and wish him success. Returning briefly to mid-Wales, I will send the Minister a map of the national grid, with which I am sure he is familiar. The developers could not have found a site further away from the national grid than the proposed site if they had tried. Transporting the energy to the national grid will affect the most people.

[Charles Hendry]

I am grateful to my hon. Friend for his kind comments. I have been in office for nearly a year, so by past records, I am up for replacement. I think that it was actually 16 Ministers in 13 years. I hope that I will have the chance to stay around a little longer to ensure that we end up in a sensible place on these policy matters.

The hon. Member for Ogmore asked about the fourth carbon budget. He knows very well that I will not comment on leaked or supposedly leaked documents, but the Government understand totally the need to take the issues extremely seriously and put in place a robust set of targets and mechanisms to drive forward our ambition and our ability to respond. I will reply more directly in a moment to the point made by my hon. Friend the Member for Shrewsbury and Atcham on the important grid issues.

It is clear from all the studies that I have seen that the United Kingdom has some of the best wind resources in Europe. Wind turbines tend to generate electricity about 70% to 80% of the time—not necessarily at full capacity, but during that time, they are turning and generating some electricity. Wind, unlike most other sources of electricity generation, is a free and unlimited source of fuel. It is also reliable overall—the likelihood is that low wind speeds will affect half the country for fewer than 100 hours a year. The chance of turbines shutting down due to very high wind speeds is low.

Onshore wind is one of the most cost-effective and established renewable technologies. We have to make sure that we take account of the needs of consumers by ensuring that they do not pay more than is necessary to decarbonise our electricity supplies. We can do that by making sure that onshore wind has a continuing role. However, although it is clear that onshore wind should continue to be part of the solution to the massive energy security and low-carbon challenges that we face as a nation, it needs more democratic legitimacy than it has today, and I intend to ensure that that happens.

We have to protect communities from unacceptable developments. We have already started to review the issues that often cause concern to local communities. We recently published a report on shadow flicker from wind turbines—an issue that the hon. Member for Ayr, Carrick and Cumnock mentioned—and we have commissioned a report on wind turbine noise. We must now go much further. Wind turbines should be positioned where the wind resource is strongest, so this year we are introducing a full review of the funding mechanism of the renewables obligation certificates to ensure that subsidies will not make it attractive to put wind farms in unsuitable locations. The funding mechanism must also reflect reductions in costs.

The cost of grid connections also means that there is an incentive to put wind farms closest to where the electricity is needed, rather than where the wind is strongest. My hon. Friend the Member for Shrewsbury and Atcham has made an extremely important point about the disconnection between areas identified for development and accessibility to the national grid, and the impact that that has on communities. That is why Ofgem’s fundamental review of the way in which transmission charges are levied is so important. It is also why the Government made clear at the start of Ofgem’s review that the transmission charging regime must deliver security of supply as well as low-carbon generation. It is the Government’s responsibility to ensure that the charges that consumers pay for renewable energy are as efficient as possible.

Most importantly of all, there needs to be a new relationship between wind farms and the communities that host them, as my hon. Friend the Member for Aberconwy (Guto Bebb) said. At present, too often a community can see what it will lose but not what it will gain by having a wind farm in its midst. That is why we have been exploring the financial mechanisms that should emerge to support communities that decide to host wind farms—particularly in England, where we have more responsibility for these matters—and that do more to encourage such community developments. “Community energy online” is a scheme whereby local groups can come together and look at what will be the best renewable energy schemes for their community. I am absolutely convinced that we have to address the issue of democratic accountability and public acceptability. The more these schemes can be seen to come from the ground up—that is not intended to be a pun—and to be developed with community support, the more we can deal with the democratic deficit.

Coal-burning Power Stations

Debate between Charles Hendry and Daniel Kawczynski

Wednesday 13th October 2010 Westminster Hall

[Charles Hendry]

The evidence that we have is that the crunch, which had looked as if it was coming in around 2017, is now further out. The recession has reduced demand for power by 6% or 7% and demand has not come back up to the levels that it had been at before the recession. So, there is a crunch coming but it will now come towards the end of this decade.

However, that does not mean that we are off the hook, because following the LCPD is the industrial emissions directive, which will deal predominantly with emissions not related to CO_{2 .} That directive will close down much of our remaining coal plant if the measures are not taken to ensure that our plant complies with it.

We have a mountain to climb and it is right that we should look at the range of options available to us, so that we can ensure that we have the generating capacity that will be so central in the future.

My hon. Friend the Member for Shrewsbury and Atcham also raised the issue of biomass. I am well aware of a company that is looking to convert the Ironbridge power station to a biomass facility. I am due to come to Shrewsbury in early December. It may be that I can meet representatives of the company then, or I can meet them in London if that is more convenient. I am very keen to learn more about their plans and to learn about how the use of biomass can provide continuity of output, production and employment at the Ironbridge facility.

We see biomass as having a very significant role to play in the energy sector. It can enhance our security of energy supply, because much of the biomass can come from our own indigenous resources. However, we know that sometimes the biomass comes from other parts of the world and we must be certain that the sources of biomass are indeed sustainable. Biomass is also dispatchable; in other words, it can reflect and respond to the peaks in demand. So, if there is a need for back-up capacity, a biomass plant can ensure that we have the continuing output that will be necessary, just as a coal plant can.

Without doubt, large scale dedicated biomass plants can deliver significant levels of renewable electricity by 2020. The renewable energy strategy, which was published by the previous Government in July 2009, estimated that electricity from biomass, including biogas and wastes, would comprise about 20% of all the renewable power generation that will be needed to meet the renewable energy targets that we as a country face.

We also recognise that electricity from dedicated biomass is cheaper than some other large-scale electricity sources. If the biomass generation needed to meet the renewable energy target were displaced by more expensive technologies, there would of course be an additional cost to consumers and, in all the discussion of these issues, that is a factor that we should rightly bear in mind, as my hon. Friend the Member for Shrewsbury and Atcham also reminded us.

Moreover, in comparison with some other large scale renewables, biomass can generate more long-term jobs relative to the megawatt-hours of energy output. That is due to the ongoing need for biomass feedstocks creating business and employment opportunities across the UK supply chain.

Use of biomass also provides an opportunity to enhance the forestry husbandry that we have in the UK. I believe that about 40% of our forests and woodlands are not under active management. So there is extraordinary potential and a massive national resource there, not only in terms of biodiversity but providing a renewable energy fuel that can make a major difference in this sector.

The Government support the generation of biomass electricity through renewable obligation certificates, or ROCs, which are tradeable certificates under the renewables obligation. In July, we announced that the support for dedicated biomass electricity plants under the ROCs would be “grandfathered”. That means that for 20 years the price that they would receive would be guaranteed, up to the 2037 end date of the obligation. I think that that will provide the certainty that investors are looking for.

However, we also recognise that we are receiving more inquiries from generators about the potential of switching to biomass and we acknowledge that we simply do not have enough understanding of the potential of that switch and what it can contribute. So we have called for evidence as part of our consultation on the ongoing work of the renewables obligation. That consultation will close on 19 October and we want everybody who has an interest in this issue to respond—I certainly hope that E.ON will contribute—so that we can understand the full range of interests and ensure that we can put a system in place that will encourage us to go forward.

[Daniel Kawczynski]

Can my hon. Friend tell me the best way for anyone who wishes to contribute to that consultation to participate in it? Is it just to write to him directly?

[Charles Hendry]

My hon. Friend asks a very apposite question. Anyone who wishes to participate can access the consultation through the Department of Energy and Climate Change website. Alternatively, they can write to me, or to my hon. Friend himself and he can pass any correspondence on to me. They can even write directly to my officials. Whichever way they choose to participate, we will be pleased to have their input and I can give an absolute assurance that it will be taken into account.

My hon. Friend also raised the issue of carbon capture and storage, as did a number of other hon. Friends. I think that CCS is potentially one of the most exciting areas of energy development in the UK. It is an area in which we should be leading the world and in which we are absolutely determined that we will lead the world. CCS can reduce by 90% the CO₂ emissions from a coal plant and we think that it is an area in which we must move forward faster.

In this country, we have the sequestration facilities in the North sea, with the depleted oil and gas fields; we have the skills of people who are used to working in the extremely dangerous and hazardous conditions of the North sea; and we have some of the best university expertise, at Edinburgh, Imperial college, Nottingham and elsewhere, which can be brought to bear to ensure that we take CCS forward. Therefore, we are looking at exactly what needs to be done to make CCS happen.

The coalition agreement was clear that we want to have four power stations—commercial power plants—equipped with CCS, as part of our vision of taking CCS forward. We want there to be a much more rapid development of CCS. [Interruption.]