Making Britain a Clean Energy Superpower

Chris Skidmore Excerpts

Thursday 9th November 2023 Commons Chamber

[Chris Skidmore (Kingswood) (Con)]

I draw the House’s attention to my entry in the Register of Members’ Financial Interests.

Thank you, Madam Deputy Speaker, for calling me in what is my last Gracious Speech debate. My constituency of Kingswood is being formally abolished in the boundary changes and there is nowhere for me to go, but I have had a great time participating in these debates over the past 13 and a half years.

I remember my first Gracious Speech debate. A loyal Back Bencher who knew no better, I was sitting in the Library, and a Whip came around and asked whether I might participate. I said, “Yes, sure, I’m happy to. Would five minutes be okay?” He said, “Yes, come in, but we actually need you to speak for 45 minutes, if that’s all right.” I am delighted that we have far more people in the Chamber now compared with that debate, when I was one of the few Members in the room. That demonstrates, I think, the interest and the enthusiasm on both sides of the House for focusing on the importance of the energy transition not just to tackling the climate crisis, but for the opportunity it presents the UK economy.

I was delighted to hear in the Secretary of State’s speech her enthusiasm for setting out in detail the UK’s progress internationally. We are a clean energy superpower. We can debate among ourselves the finer policy details, but the reality is that over the past 15 years we have decarbonised further than any other G20 nation. We have reduced our emissions by 50%, while at the same time growing our economy by 70% on 1990 levels.

That is a paragon and a model that all other nations look to, but it is important that once we have earned a reputation, we seek to preserve that reputation. Many countries now are following the UK, and we are now in a new global net zero race. We may have gone further and faster initially, which made us able to attract inward investment into this country as a result of our climate leadership, but other countries are following up further and faster in our tracks. I am reminded of the tale of the tortoise and the hare; the tortoises of the world are coming up, and we cannot just sit there pausing, thinking that this is good enough.

We have the United States Inflation Reduction Act, setting out £370 billion of investment in clean technologies, and the EU’s green deal, with the opportunity of up to €1 trillion of investment, but it is not just the investment that is important here—it is the certainty. I chaired the net zero review and published the “Mission Zero: Independent Review of Net Zero” report in January. We were very kindly granted a debate in both Chambers on the recommendations of those reports. Above all, the narrative that that mission zero report set out was that net zero is not a cost but an opportunity and an investment, and that there are two paths ahead of us.

The Secretary of State talked about two paths, and I will come on to that in a moment, but my own analysis is that the net zero path can potentially bring up to £1 trillion of inward investment and up to 480,000 new additional jobs by 2035, if we so wish. However, that path requires commitment from the Government to provide certainty, clarity, continuity and consistency—the four Cs that we identified—and a mission-based approach that provides long-term programmatic certainty. That certainty is almost more important than the money.

If we look at what the States has done, the 45Q and 45X tax credits are guaranteed until 1 January 2033. The Kreditanstalt für Wiederaufbau programme in Germany and the MaPrimeRénov’ energy efficiency programme in France are guaranteed over a decade. In contrast, in the UK we are still exposed to the tyranny of the spending review, and many of our programmes, whether in energy efficiency or clean energy, are bedevilled by the fact that they only last for three to four years at most and then have to start all over again. That does not provide the certainty to build out supply chains, it does not provide certainty for local authorities or regional Mayors to make investment, and it certainly does not provide the certainty needed for inward private investment to come to this country.

Let us be clear: of course there is a capital cost to energy transition and there is capital investment that needs to be made, but once the capital investment is made, the operational cost is far less than for fossil fuel technologies. However, that money will come above all not from the taxpayer, but overwhelmingly from private investors, who need certainty. Certainty does not come only from Government policy, legislation and regulation, although the net zero review was very clear in setting out 129 recommendations for how Government and Parliament can provide frameworks to ensure that investors have the opportunity to reduce delays and unblock the current problems whereby people cannot get grid connections until 2035. I welcome the progress that is being made on that, but certainty also comes from having cross-party consensus.

What is cross-party consensus? It does not necessarily mean that we will agree on everything. It is right in this democratic nation that we discuss the details of policies and hold each other to account, but let us understand that the consensus we need on climate was fought for by working closely together. The Climate Change Act 2008 was passed by the then Labour Government. The right hon. Member for Doncaster North (Edward Miliband) was the Secretary of State at the time, but he had the political courage to accept an amendment from the Conservative party, then in opposition, to raise our ambition from 60% emissions reduction on 1990 levels to 80%.

The legal framework that we had in place, with the carbon budgets process, and on top of that the Climate Change Committee acting as an independent advisory body—it does not make any policy recommendations, and to suggest that it does is deeply flawed, because all it does is to report back and advise on policy decisions, whoever makes them, whether it is the UK, Scottish or Welsh Government or even the Opposition—has been admired across the world as a paradigm of stability. Not only that, but it allowed me, as the Energy Minister back in 2019, to bring net zero into law.

Why was net zero so important for developing a clean energy superpower? Because it meant that there was nowhere to hide. No one could claim to be in that 20% that was too difficult to tackle. Net zero was everyone’s business, and with that came a moment when net zero went viral. If someone had told me back in 2019, I simply would not have believed that 93% of global GDP would have now signed up to a net zero target in some form.

However, for the UK that means that investment is now going elsewhere unless we raise our ambition. The terms of the game have changed in this year alone, partly due, obviously, to what has happened in geopolitics and the cost of oil and gas crisis generated by Russia’s illegal war in Ukraine. All countries in Europe have woken up to the fact that the answer to tackling the cost of gas crisis is to build out more renewable power. Even Ukraine has built 18 times more wind turbines than we have built onshore in the UK. There is only a finite amount of labour and investment, and we have a political choice to make whether we want that to come to UK, or whether we want to see it onshored elsewhere. I want to see it come to the UK.

We must set our priorities very clearly. Our priority must be that we want private investment to come to this country. We should retain that consensus and that ability to understand that, whoever becomes the next Administration at the next general election—I am not making a party political point here—we still need to work together. We all live under the same skies. We all operate under the same climate. Carbon dioxide does not care whether you are a Labour, Tory or SNP MP. All that matters is the real-terms emissions reductions we need to see.

When it comes to those emissions reductions, it is not about 2050; we cannot keep on kicking the can down the road. As COP28 will show, the globe will commit to a trebling of renewables and a doubling of energy efficiency measures in order to meet a halving of emissions by 2030. The UK needs to lead on the 68% emissions reduction target that it set in its own nationally determined contributions. The decisions we make today count not just for 27 years’ time, but for seven years’ time. That is what is at stake here.

That brings me, in conclusion, to the question of the future use of fossil fuels in this country. I understand that it is a closely fought debate, and unfortunately it has become politicised. I regret the decision that has been taken, but let us focus again on the evidence at hand. To start with, everyone in this Chamber, as far as I know, understands that we will need to continue using oil and gas. The Committee on Climate Change has set out the so-called balanced pathway, working alongside the North Sea Transition Authority, to recognise that we will still need to use oil and gas into the 2050s, but that we should do it with our existing wells and fields.

In reality, when it comes to looking at the future of oil and gas in this country, I do not belong to Just Stop Oil—I am not some eco-extremist just because I signed net zero into law, which was the bare minimum we could do. I saw net zero as a conservative mission, recognising that one of the priorities of the Conservative party, if anything at all, is to conserve. At the same time, it allowed us to generate economic growth and to ensure that all jobs, no matter the industry, were protected.

I am glad that we have raised the issue of jobs and people in oil and gas communities, because we must think about the individual communities and the people who work in those industries. They are highly talented and highly skilled, and we absolutely need their support to ensure that we can have a successful transition. The net zero review set out that we need an offshore industries passport; we need to make it far easier for individuals to move across into the industries of the future.

Politics is about priorities and deciding where investment goes. The Secretary of State mentioned the coalmines in the 1980, and in a way, I agree with her. Looking at what is left in the North sea, the decisions in the King’s Speech will mean, as Carbon Brief and a number of other environmental organisations have demonstrated, that instead of taking 95% of oil and gas out of the North sea basin, we will take out 97%—the equivalent of two weeks’ worth of oil and gas a year. That is the reality of what this energy security supposedly means.

It is not just me saying that. I have been handed this Conservative campaign headquarters brief, so I assume CCHQ wants me to read from it. It says:

“Even with continued licensing, production from the UK Continental Shelf is projected to decline at 7 per cent annually, this decline is faster than the average global decline”.

I even have the Conservative research department brief agreeing with me that there is not enough oil and gas in the North sea to make a difference; we will still be dependent on foreign oil and gas in future. It will predominantly be oil, and we do not have the refineries to be able to refine it, so it will still have to go the Netherlands and it will still be sold on international markets by foreign companies. Rosebank is operated by Equinor, a Norwegian company. I have nothing against Equinor, but we cannot pin a claim of energy security on the production of future oil and gas.

If we want to deliver effective energy security, we need to turn the debate on its head, because we have not really focused on what we need to achieve, which is a reduction in demand. We have been speaking a lot about supply, and that is fantastic, but if we want to be a clean energy superpower, we need to focus on our ability to reduce demand through energy efficiency measures such as heat pumps, and through understanding that we can reduce our gas demand, which is at the mercy of foreign petrostates and international markets, by up to 40%.

I know that the debate on oil and gas is emotive, and, to be honest, it is not helped by the performative protest of Just Stop Oil, which does not get anyone anywhere. No one in this Chamber supports Just Stop Oil. If we are honest, as democratically elected representatives, it is beneath us to suggest that any of us is in the same camp as Just Stop Oil. We are diametrically opposed, because we come to this Chamber to have democratic debate, across parties, about what is needed for the future, not to oppose for opposition’s sake. In understanding what needs to happen with the net zero transition, we need to ensure that we work together using the existing legislative apparatus—the CCC, the carbon budget process—and that we continue to lead, but that requires political certainty and political stability.

As I said, this is my last Gracious Speech debate, and, although I have so far supported every single such Speech in my parliamentary career, unfortunately this will be the first time that I am unable to vote for the King’s Speech. I apologise to His Majesty in advance— I hope that he does not mind—but I will not be put in a position of supporting new oil and gas licensing when it is not needed, either for environmental reasons, obviously, or for economic reasons.

This year alone, we have seen investment in oil and gas plummet. We have now seen investment in solar rise, to the point that it is at parity with oil and gas. If we continue to suggest that we can produce oil and gas forever, we will let down the communities that we need to transition. That is the point about the coalfields: we will end up being the Arthur Scargills of this world, claiming that we can forever continue mining coal. We cannot continue to drill for oil, because there is no oil left to drill. That is the economic reality that investors already understand. They are moving away from fossil fuels, and in 10 years’ time, people will look back at this debate and recognise that Westminster and Whitehall were behind the curve. The private sector and the markets are moving already. We need to listen now and clearly if we are to protect jobs for the future.

--- Later in debate ---

[Ms Ghani]

I am sure that putting that forward now means that the record will reflect it. If it was not £37 million, I dread to think what it was.

My hon. Friend the Member for Totnes (Anthony Mangnall) made a fantastic comment that maybe all the members of the Business and Trade Committee should be Privy Counsellors—yes, but only if previous members of the BEIS Committee are offered that, too. He spoke about the fact that we should not forget about the growth in our economy—it has grown by 78% since 1990—and the 46% reduction in emissions. We must be positive and promote what we have been able to achieve. He spoke about marine energy and maritime power linking into a local church. I am intrigued—I want to be invited to come by and take a look.

There were contributions from the hon. Member for Nottingham East (Nadia Whittome) and—forgive my pronunciation—the hon. Member for Kirkcaldy and Cowdenbeath (Neale Hanvey). I think it is best that the SNP Members reflect on the points that he raised. The hon. Member for Jarrow (Kate Osborne) spoke, as did the hon. Members for Wakefield (Simon Lightwood) and for Gordon (Richard Thomson). I never thought we would end up on an SNP love story, but we are all going to be thinking about that over the weekend.

I am anxious about how much time I have left to speak. I am closing the debate as a Business and Trade Minister, and have many more opportunities coming up to help ensure that we deliver on growing the economy and achieving net zero. We have a couple of programmes of work that were reflected in the King’s Speech in the Trade (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) Bill and the Digital Markets, Competition and Consumers Bill.

Turning to the subject of today’s debate, the Government are already turning the country into a clean energy superpower. “Already” is the important word there, because while the Opposition might try to claim otherwise, this work is well under way. Let me remind the House of the formidable record we are building on. The UK achieved the fastest rate of greenhouse gas emission reductions of all G7 countries, while renewables already generated over 48% of our electricity in the first quarter of this year—the highest ever level. Of course, we know we can and must go further, which is why the UK has one of the world’s most ambitious 2030 targets. However, the Government are also acutely aware that we cannot ask our citizens and businesses to pay undue burdens for achieving our net zero goals, particularly in these challenging economic times. Nor can we ignore the fact that Putin’s war of aggression means that we are living in a more dangerous world with far more complicated supply chains. As the Secretary of State for Energy Security and Net Zero has already explained, it is only right that we reduce our reliance on volatile international energy markets and hostile regimes. She will be doing so through legislation such as the Offshore Petroleum Licensing Bill.

The Opposition talk about strategies and plans, so let me remind the House that the Government have them in abundance. In fact, the Government’s green strategies aim to drive £100 billion of private sector investment into our green industrial base by 2030, supporting around 480,000 jobs by the same date. I am surprised the Opposition are not welcoming that.

However, the Government are not just focusing on words; they are taking action. Between 2020 and 2023, my Department alone supported more than £28 billion of net zero-related inward investment, creating 30,000 jobs. Thanks to our work, the country’s economic geography is also shifting—from clean technology development in the midlands, offshore wind in the north-east and Scotland and turbine manufacturers in Hull, to innovative hydrogen-powered buses in Northern Ireland. With the North sea transition deal, the Government are helping workers, businesses and the supply chain in fossil fuel-related industries to adapt to a net zero future, providing £20 billion of funding to encourage the early deployment of carbon capture, usage and storage, and to unlock private investment and jobs. Whether we are talking about our recently announced plans for carbon capture clusters in the north-west and north-east, the first 15 winning projects to receive investment from the Government’s £240 million net zero hydrogen fund, the port towns that stand to benefit from the £160 million-worth of floating offshore wind manufacturing schemes, or our freeports and investment zones, our policies are creating jobs, reinvigorating communities and opening horizons the length and breadth of the country.

It would be remiss of me not to talk about my own brief, which covers industries and, fundamentally, the automotive, aerospace and maritime sectors. Here again, my Department is playing an instrumental role. We recently announced a joint investment package with Tata Steel, worth £1.25 billion, to replace end-of-life blast furnaces with electric arc furnace steel production. That will preserve steelmaking for generations to come and enable green steel production to take place in the UK. While we are helping manufacturers, including steel producers, to access lower-cost hydrogen through the net zero hydrogen fund, we are also enabling our world-renowned automotive sector to seize the opportunities of the net zero transition. For instance, we have the automotive transformation fund from the Advanced Propulsion Centre, and the Faraday battery challenge. That has unlocked investment into the UK. Stellantis is producing electric vans at its Ellesmere Port plant, the first factory to be dedicated to the manufacture of electric vehicles, BMW Group is investing £600 million to bring two new all-electric Mini models to Oxford by 2026, and Tata has announced a £4 billion investment in Europe’s largest here in the UK. All that shows what our strategies are already providing.

[Chris Skidmore]

I thank the Minister for making an important point about job creation. As I said in my speech, the net zero review pointed to the 480,000 additional jobs resulting from green industries. When it comes to green steel both in Port Talbot and in Ellesmere Port, and the future of electric arc furnaces, does the Minister agree that, as politicians on both sides of the House, we need to fight the corrosive disinformation that green steel is somehow costing jobs—there would otherwise have been 6,000 job losses in Port Talbot rather than 3,000 potential job transfers—and point out that it is green industries that are keeping jobs alive? If we stick with the status quo, we will simply lose every job.

[Ms Ghani]

That is a valuable point. The most frustrating aspect of being a Minister is the lack of sufficient time and space to talk about some of the challenges and how we respond to them. If we had not provided support to enable Port Talbot to have those electric arc furnaces, thousands of jobs would have been lost. Unfortunately, however, there are always some people who argue that change inevitably brings challenge, and we get stick on that point. However, our investment means that those jobs are now secure, as are, I believe, more than 10,000 jobs in the supply chain. That will give people the reassurance that they need about their continued ability to produce steel or products in the supply chain.