Green Finance Strategy

Chris Skidmore Excerpts

Tuesday 2nd July 2019 Written Statements

[The Minister for Universities, Science, Research and Innovation (Chris Skidmore)]

Today the Economic Secretary to the Treasury, my hon. Friend the Member for Salisbury (John Glen), and I are publishing the UK Government’s first Green Finance Strategy. The UK has a proud record in tackling climate change and protecting the environment We were the first country in the world to set long-term, legally binding emissions reduction targets, through the Climate Change Act 2008. We have led the G20 in decarbonising our economy. Through our 25-year environment plan, we are delivering our commitment to leave the environment in better condition than we found it. And only last week we became the first major economy in the world to legislate for a net zero greenhouse gas emissions target for 2050.

Transforming our financial system for a greener future is an important part in helping us to continue to lead the way. The financial sector has a central role to play in delivering the investment we need to meet our environmental objectives—and the strength of that sector means the UK is well placed to grasp the opportunities from leading in green finance, as part of our industrial strategy.

The strategy has the twin objectives of aligning private sector financial flows with clean, environmentally sustainable and resilient growth, supported by Government action; and strengthening the competitiveness of the UK financial sector. It is in part a response to the independent Green Finance Taskforce that reported in 2018.

The strategy outlines measures to: green the financial system by ensuring current and future financial risks and opportunities from climate and environmental factors are integrated into mainstream financial decision making, and that markets for green financial products are robust in nature; accelerate finance to support the delivery of the UK’s carbon targets and clean growth, resilience and environmental ambitions, through a package of measures on energy efficiency in buildings, and through the launch of the Green Finance Institute; and ensure that UK financial services capture the domestic and international commercial opportunities arising from green finance.

I will place a copy of the Green Finance Strategy in the Libraries of both Houses.

[HCWS1682]

Draft Electricity Capacity (No. 2) Regulations 2019

Chris Skidmore Excerpts

Monday 1st July 2019 General Committees

[The Minister for Energy and Clean Growth (Chris Skidmore)]

I beg to move,

That the Committee has considered the draft Electricity Capacity (No. 2) Regulations 2019.

It is a pleasure to serve under your chairmanship, Mr Hanson. The draft regulations were laid before the House on 12 June 2019.

The capacity market is a key element of the Government’s strategy to maintain security of electricity supplies in Great Britain. This statutory instrument will help to maintain a strong security-of-supply position into the future. The capacity market ensures that there will be sufficient electricity capacity in Great Britain during periods of peak electricity demand, securing the capacity required through competitive technology-neutral auctions, normally held four years and one year ahead of delivery, ingeniously known as T-4 and T-1 auctions. Those who win capacity agreements, known as “capacity providers”, commit to providing capacity during periods of system stress in exchange for receiving capacity payments.

The draft regulations will help to maintain the effectiveness of the capacity market by allowing a one-off, three-years-ahead or—no prizes for guessing—a T-3 auction to be held in early 2020, to replace the T-4 auction that was postponed from early 2019 following the European Court of Justice judgment that annulled state aid approval for the capacity market. The regulations will also support the participation of certain unsubsidised renewable technologies in future auctions, and make minor changes to the existing credit cover requirements for upcoming capacity auctions likely to be scheduled for early 2020.

Before I explain those changes, I will first set out the context in which they are being introduced. On 15 November 2018, the general court of the Court of Justice of the European Union annulled the European Commission’s state aid approval for Great Britain’s capacity market, and introduced a standstill period until the scheme can be reapproved. The judgment means that the UK Government are not able to award capacity agreements, or to make capacity payments, unless and until state aid approval is obtained following the European Commission’s current investigation. We are working with it to ensure that it has everything necessary to reapprove the scheme as quickly as possible.

We discussed those issues and took steps, through the first instrument in this series—the Electricity Capacity (No. 1) Regulations 2019—and associated changes to the capacity market rules to maintain the operation of the capacity market, to the extent possible, while state aid approval is obtained. The steps we have taken to put in place those interim arrangements are subject to judicial review proceedings, which we are robustly defending.

The House of Lords Secondary Legislation Scrutiny Committee has highlighted the continuing uncertainty resulting from those judicial review proceedings and the Commission’s state aid investigation. This draft instrument therefore focuses on future auctions that are needed and will not proceed unless and until the capacity market has the state aid approval. The instrument is therefore unlikely to be impacted by the judicial review.

My Department carried out a public consultation from 7 March 2019 to 4 April on the changes that will be implemented under the draft regulations. That consultation received 42 responses from a range of stakeholders. The majority broadly supported holding that T-3 auction in early 2020. Respondents also supported allowing additional types of renewable technology to participate in the capacity market. The instrument also addresses concerns that running the T-3 auction in parallel with the usual T-4 auction in early 2020 could result in unduly burdensome credit cover requirements for some participants.

I will now expand briefly on the main provisions of the draft instrument, first on that T-3 auction. The instrument makes changes to enable the T-4 auction for the 2022-23 delivery year, which was postponed following the state aid judgment, to be replaced by the one-off T-3 auction. If held, that auction will be scheduled for early 2020. It will only be held if state aid approval has been received.

[Mr Jonathan Djanogly (Huntingdon) (Con)]

In the event of a no-deal Brexit, does this all fall away in so far as the judgment could not be enforced?

[Chris Skidmore]

In the event of a no-deal Brexit, there will be many issues of state aid requirements to which we are no longer subject. While we continue to be a member of the European Union, as we are, we must continue to legislate according to the principles of our membership. The state aid judgment issue is one that, having worked with the Commission closely, we believe will be resolved. We will ensure that we will be a law-abiding country.

The Commission is in the process of investigating and we anticipate that it will have concluded that investigation, and decided whether to approve the capacity market, by 31 October. On the effect of a no-deal Brexit, if the UK leaves the EU without state aid approval from the Commission or an implementation period, approval under the UK’s domestic state aid regime would still be required, and responsibility for investigating state aid cases would transfer to the Competition and Markets Authority. Therefore, the issue of state aid will not go away; it is a question of whether it will be under EU state aid requirements or UK requirements in the future.

Secondly, the regulations make changes to remove or reduce what might otherwise be unnecessary burdens on business in relation to credit cover. Applicants currently seeking to enter certain types of capacity market units—such as new technologies that are unproven or those not yet constructed—into capacity auctions, must provide and maintain credit cover. The regulations adjust the requirements for CMUs entered into both of the upcoming T-3 and T-4 auctions, to enable the credit cover obligations for both auctions to be satisfied jointly rather than separately. That will help to reduce bureaucracy.

The regulations extend the existing suspension of credit cover obligations provided for by the Electricity Capacity (No. 1) Regulations 2019 to the three capacity auctions likely to take place in 2020. They make changes to ensure that when the suspension of credit cover is lifted, following state aid re-approval, existing exceptions to credit cover requirements will still operate as intended.

Finally, the regulations make changes to support the participation of certain unsubsidised renewable technologies in future auctions. Some types of renewable technology, such as biomass, have always been able to participate in the capacity market provided they are not receiving other specified low carbon subsidies. Although the capacity market was always intended to include all unsubsidised technologies, when it was conceived wind and solar required subsidy and so were not included in the technical rules. With such unsubsidised renewables now a prospect, the capacity market rules were recently amended to allow wind and solar to participate for the first time.

The regulations support that change by requiring state support for new build renewable CMUs declared under the rules to be deducted or repaid from capacity payments, which enables renewable technologies in receipt of subsidies, other than those which exclude them from the scheme entirely, to participate without cumulation of state aid received through the capacity market and other schemes. Alongside the regulations, we have laid complementary amendments to the capacity market rules, which govern the technical and administrative procedures relating to capacity market operation.

The regulations are necessary to ensure the smooth running of the capacity market in the period after state aid approval is received, and to broaden the participation of renewable technologies. That is important the week after we committed to net zero emissions by 2050. I commend them to the Committee.

--- Later in debate ---

[Chris Skidmore]

I thank the hon. Gentleman for his comments. He is absolutely right that we were here before when we took our seats for the Electricity Capacity (No.1) Regulations 2019. I like to think of these regulations as a bit like “The Godfather” and “The Godfather Part II”, in that the Electricity Capacity (No.2) Regulations 2019 is the only SI that betters the first one. When it comes to moving forward with the capacity market, the Government believe that the capacity market is the right mechanism for delivering security of supply at the lowest cost to consumers.

I understand the hon. Gentleman’s concerns. He is right to raise the issues of state aid and the progress of the judicial review. My Department has been in regular discussion with the Commission since the judgment, to ensure that we can support its investigation in the most effective and timely way possible. The Commission announced on 21 February that it would open an in-depth investigation and it intends to appeal the Court’s judgment; the UK Government are intervening in support of the Commission in that appeal.

While it is for the Commission to establish its own timetable, we expect it to make its final decision later in the year, before 31 October. It is important to reflect that that T-3 auction cannot take place in 2020 not only if we do not pass the SI today, but if the state aid judgment is not resolved. While we cannot pre-empt the outcomes of the Commission’s investigation, we remain confident that it will approve the scheme following investigation, not least as it has approved six other capacity markets since 2014.

It is possible that the Commission will require policy changes to the design of the capacity market scheme when granting state aid approval. In that case, the Government would seek to respond swiftly, to consider or bring forward the required changes. Obviously, the Government continue to monitor our security of supply position carefully, together with Ofgem and the delivery body. In the unlikely event that state aid approval is not granted or is excessively delayed, the Government will ensure that any necessary steps are taken. The Government remain of the view that the capacity market is the right mechanism to deliver secure electricity to suppliers, but we will step in, if needed, to make the appropriate decisions to resolve this issue, if the state aid judgment is not resolved.

The hon. Gentleman mentioned the judgment and the details around whether it was procedural or not. The General Court identified elements of the capacity market that should have given the Commission doubts about whether the scheme was compatible with state aid requirements. That meant that the Commission should have conducted an in-depth investigation before deciding whether to approve the scheme. However, importantly, the Court did not rule that the design of the capacity market was incompatible with state aid requirements or direct that changes be made to the specific mechanism. We carefully considered each of the issues raised through the Court judgment, and we remain confident as a Government that the design of the capacity market is compatible with state aid requirements.

As I have said, the General Court’s judgment prevents the UK Government from making or unconditionally promising to make capacity payments. The T-3 auction and other upcoming capacity auctions will not run unless and until state aid approval is obtained. The delivery body and the settlement body are continuing to operate other aspects of the capacity market scheme, to the extent possible, during the standstill period. If this SI is not approved, that will prevent the Government from making preparations for the period after state aid is reinstated or from running a T-3 auction to secure capacity for 2022-23, which may put electricity supplies at greater risk in 2022-23.

The hon. Gentleman mentioned the five-year review; he is right that, in line with the requirement set out in the regulations, we intend to publish a report summarising our five-year review of the capacity market in the summer. The review is an important opportunity to look at making improvements. He also mentioned the low clearing price for the recent T-1 auction. We believe as a Government that that was due to a unique set of factors. The result tells us that we have a healthy capacity margin this winter, but does not tell us much about future T-3 or T-4 auctions, as the factors that led to the T-1 result are unlikely to arise in the same way.

That result was due partly to the fact that the auction was run close to the start of a delivery year, meaning that operational decisions for the delivery year had already been taken. It was also partly due to new-build capacity with future agreements and shorter lead construction timeframes commissioning ahead of their 15-year T-4 agreements, and existing capacity with agreements from previous T-4 auctions for future delivery years, looking to win interim T-1 agreements.

Regarding the T-3 auction in the regulations before us, when we look at the consultation that took place between March and April we see that most respondents agreed with the Government’s proposal to run this T-3 auction for the delivery year 2022-23. The approach will provide greater certainty to investors than a delayed T-4 auction, enabling that auction, unlike the T-1, to be run at a time when the Commission is expected to have made a decision about state aid approval.

That conditional T-1 auction was created to ensure that we had sufficient capacity for the next winter, 2019-20; as the auction was expected to be run during the standstill period, the agreements awarded were made conditional on the outcome of the Commission’s state aid investigation. This T-3 auction is different and we expect it to have received state aid approval ahead of running the auction in early 2020.

I turn to the matter of renewables, which the hon. Gentleman mentioned. Wind and solar make a measurable contribution to the security of supply, despite their intermittency. Remunerating that contribution is a key principle of the technology-neutral framework of the capacity market. It was always anticipated that the capacity markets framework would allow the participation of those technologies at some point. With the arrival of subsidy-free projects interested in bidding into the capacity market and the delivery body’s work to effectively de-rate intermittent renewables, the impetus for that change has become clear and is reinforced by the widespread support of stakeholders in the consultation.

Onshore wind, offshore wind and solar photovoltaic technologies will now be able to participate, and biomass and hydropower have always been allowed to participate, so this is equalling up on the renewables side. I state again that the capacity market is technology-neutral, and its role is to provide the security of supply at the least cost. Emissions performance standards and the carbon price floor work alongside the capacity market to ensure that our future energy supply is secure, low carbon and affordable. We are introducing other policy measures to support clean energy technologies, including the contracts for difference scheme.

Major schemes such as contracts for difference exclude renewables schemes from participation and we have not identified other forms of subsidy. We cannot rule out the possibility that some minor schemes may exist—at a local level, for example—but we are keen to do more and we will look, as part of the pathway to net zero, to set that out for the future. The Government believe that the capacity market is the right mechanism for achieving security of supply at the lowest cost to consumers—a view supported by the majority of stakeholders who responded to the call for evidence last September as part of our five-year review. The revenue from capacity payments incentivises the necessary investment to maintain or refurbish existing capacity and to finance new capacity. Without that capacity, we would be at greater risk of power shortages. It has had a direct and indirect impact on new-build capacity, and around 4 GW of new resources was cleared in the most recent 2018 T-4 auction.

To ensure that the state aid judgment is resolved in a timely manner, my Department will continue to work closely with the European Commission, ensuring that state aid approval for the capacity market can be reinstated swiftly, and robustly defends the recent judicial review of the arrangement that the Government have put in place during the standstill period. The regulations are necessary to ensure the smooth running of the capacity market in the period after state aid approval is received and to broaden the welcome wider participation of renewable technologies, and I commend them to the Committee.

Question put and agreed to.

Resolved.

That the Committee has considered the draft Electricity Capacity (No. 2) Regulations 2019.

Environment and Climate Change: Government Response

Chris Skidmore Excerpts

Thursday 27th June 2019 Written Statements

[The Minister for Universities, Science, Research and Innovation (Chris Skidmore)]

The Government are in no doubt that the we face an environmental and climate emergency—from climate change to biodiversity decline, from poor air quality to plastic pollution—which requires urgent action. The decisions we make today will affect the future of our planet for generations to come.

The Government’s approach is defined not by the words we use, but by the actions we take. That is why, in October last year, we commissioned the independent Committee on Climate Change to provide advice on the implications of the Paris agreement for our long-term emissions reduction targets, and why the Government have now responded to that advice by setting a new legally binding target for net zero greenhouse gas emissions by 2050, via an amendment to the Climate Change Act that came into force on Thursday 27 June 2019. This will bring an end to the UK’s contribution to the emissions that cause climate change.

This latest action builds on the leading role we have taken in solving global environmental challenges, as we move towards a cleaner, resource efficient, more resilient and environmentally sustainable form of economic growth.

The UK was the first country in the world to introduce legally binding long-term emission reduction targets through the Climate Change Act 2008. Between 1990 and 2017, we reduced our emissions by 42 per cent while growing the economy by 72 per cent. We have been independently assessed by PwC as leading the G20 in decarbonising our economy since 2000. The independent International Energy Agency has recently stated that the UK is a world leader in decarbonisation of energy supply, both in terms of actual emissions reductions and ambitions set out in our future carbon targets.

We are continuing this proud record of action; we are now the first major economy in the world to have legislated for a net zero target. This commitment has been made possible by many years of hard work from Members across both Houses of Parliament and beyond.

Clean growth is at the heart of our modern industrial strategy, backed by the UK’s biggest ever increase in public investment in research and development. Whether it be through our global offshore wind industry, our leadership on green finance or our unrivalled research base that is leading the charge on electric vehicles, we are showing the economic benefits of cutting emissions while growing our economy. Low carbon technology and clean energy already contribute more than £44 billion to our economy every year. We already have almost 400,000 jobs in the low carbon economy and its supply chain, and by one estimate this could grow to two million jobs in 2030.

We are taking clear steps to build on this leadership and meet our future carbon budgets, building on our clean growth strategy. Last year we published our Road to Zero strategy, which sets out a clear pathway to zero emissions from road transport, alongside plans to develop one of the best charging networks in the world. In the power sector, £92 billion has been invested in clean energy since 2010, and earlier this year we published the £250 million offshore wind sector deal, which commits the industry to providing a third of electricity by 2030. We are continuing to improve the route to market for renewables, by making up to £557 million available for further contracts for difference, with £65 million budgeted for the latest allocation round 3. And the Chancellor announced the future homes standard, ensuring that by 2025 all new homes are future-proofed with low carbon heating and world-leading levels of energy efficiency.

Climate change and biodiversity decline globally are interlinked threats for wildlife and people. We must solve both challenges or we will solve neither. The recent IPBES report shows we must redouble our efforts at home and internationally. This is why we are introducing the landmark Environment Bill, the first in over 20 years. The Bill will include measures to improve air quality, put the protection and enhancement of biodiversity at the heart of the planning system, improve waste management and resource efficiency, and improve surface waste ground water and wastewater management. The Bill will put environmental ambition and accountability at the heart of Government, establishing the office for environmental protection and introducing statutory environmental principles. We are exploring options for developing a framework of targets to drive environmental improvement alongside sustainable growth.

The Bill will also place the Government’s flagship 25-year environment plan onto a statutory footing. The plan signals a step-change in ambition, setting out how we will improve the environment within a generation, by creating richer habitats for wildlife, improving air and water quality, and curbing the scourge of plastics in the world’s oceans. The first progress report, published in May 2019, finds that 90 per cent of our priority actions have been delivered or are on track for timely delivery.

In December 2018, the Government published a comprehensive resources and waste strategy as a blueprint for moving to a more circular economy which keeps resources in use for longer, eliminating all avoidable waste and doubling resource productivity by 2050.

We have laid the Agriculture Bill in Parliament, which sets out our plans to reward land managers for protecting and restoring the environment and farming sustainably. This year, we will also start developing a new emissions reduction plan for agriculture, in which we will set out our long-term vision for a more productive, low-carbon farming sector. We are putting our new environmental land management scheme at the corner of our agricultural policy, providing public money for public goods, including the protection of habitats which will support our biodiversity goals and climate change mitigation and adaptation. This will help deliver a key outcome set out in the 25-year environment plan.

We have kick-started the creation of a vast northern forest—which will see 50 million trees planted from Liverpool to Hull over the next 25 years—and announced £50 million to help plant new woodlands through the woodland carbon guarantee, with £10 million to plant new trees in our towns and cities through the urban tree challenge fund.

We have committed to publishing an England peatland strategy, which will set out our vision to reverse decline in peatlands and restore them, providing a range of public benefits including carbon storage, biodiversity rich habitats and flood mitigation. Work is underway on four large-scale peatland restoration projects across England, to which we have allocated £10 million, and will restore 6,498 hectares of degraded peatlands. We will also be setting up a lowland agricultural peatland taskforce.

The work of Natural England and its staff in protecting our invaluable natural spaces, wildlife and environment is vital and its independence as an adviser is essential to this. As set out in the 25-year environment plan, it will continue to have a central role in protecting and enhancing our environment for future generations. DEFRA and Natural England have responded to the need to balance public spending and to manage resources rigorously. Natural England has transformed the way it does business, working in partnership and deploying resources where they will have greatest impact.

We should celebrate the progress we have made, but we must go further if we are to deliver net zero and leave the environment in a better state than we found it. With further ambitious domestic policy and concerted international action, solving the challenge of climate change and environmental degradation is possible.

It will require Government—and political parties of all colours—to work together with all sectors of business and society. And we must fully engage young people too, which is why a new youth steering group, led by the British Youth Council, will be set up to advise Government, for the first time giving young people the chance to shape our future climate policy.

It is the year 2020 that the nations of the world must come together to agree stronger action for climate, nature and ocean protection. The UK is committed to leading action globally on halting the loss of biodiversity and developing an ambitious new post-2020 global framework for biodiversity under the convention on biological diversity. We continue to drive action with global partners on climate change and other environmental concerns, as we bid, in partnership with Italy, to host the 26th session of the UNFCCC conference of the parties in 2020 under a UK presidency. If we are to meet the challenge of climate change, we need international partners across the world to step up to our level of ambition.

We will build on the strong frameworks of the clean growth strategy and industrial strategy to deliver the necessary transformation of our economy. Our forthcoming Energy White Paper will outline the Government’s vision for the energy system in 2050 and the actions that will enable the system to evolve during this next decade in order to achieve our 2050 net zero target.

Acting together, we can seize this once-in-a-generation opportunity to tackle one of the greatest threats to humanity.

It is actions like these that will deliver the changes we need to see and help to secure the future of the world we leave to our children and grandchildren.

[HCWS1675]

EU Council

Chris Skidmore Excerpts

Tuesday 25th June 2019 Written Statements

[The Minister for Universities, Science, Research and Innovation (Chris Skidmore)]

The EU Energy Council will take place on 25 June 2019 in Luxembourg, where the Deputy Permanent Representative to the European Union will represent the UK.

The presidency will put the Council conclusions on the future of the energy systems in the energy union to Ministers for adoption.

The European Commission will provide information regarding the EU’s external energy relations. This will be followed by an exchange of views.

Any other business (AOB) will include:

A presentation from the Commission on the draft integrated national energy and climate plans; and

Information from the Finnish delegation on the work programme of the incoming presidency.

[HCWS1649]

Smart Cities

Chris Skidmore Excerpts

Monday 24th June 2019 Commons Chamber

[The Minister for Universities, Science, Research and Innovation (Chris Skidmore)]

I congratulate the hon. Member for East Kilbride, Strathaven and Lesmahagow (Dr Cameron) on securing this debate and welcome the opportunity to set out the Government’s position on smart cities. First, though, I thank the hon. Lady and her colleagues on the British-American parliamentary group delegation for their valuable work in visiting the United States to inquire into smart cities. As Science, Research and Innovation Minister, I have spoken previously about the importance of remaining truly international in our collaborations—we recently published an international research and innovation strategy—and the hon. Lady’s work contributes a great deal to the maintenance of our global partnerships. We must be able to learn from our friends and colleagues across the Atlantic and bring back that learning to the benefit of everybody in the House.

There is no bigger trend in the world today than the move to urbanisation. By 2050, it is expected that three quarters of the world’s population will live in cities, with nearly 200,000 people globally making that transition every day. It is clear that city living presents unique opportunities and challenges. Smart cities, which involve the melding of digital technology and data to monitor, manage and improve our urban environment are what we need to harness those unique opportunities.

I reassure the hon. Lady that when it comes to Government policy on smart cities, we provided a formal definition in 2013. It stated that

“the concept is not static: there is no absolute definition of a smart city, no end point, but rather a process, or series of steps, by which cities become more ‘liveable’ and resilient and, hence, able to respond quicker to new challenges.”

A smart city can also be defined as

“an urban area that uses different types of electronic Internet of things…sensors to collect data and then use these data to manage assets and resources”.

Although termed a city, a smart city is actually a fluid concept that can incorporate anything that supports it. Those things range from 5G to autonomous vehicles, but it is crucial to note that smart cities are a process as much as a policy.

Smart cities encompass a vast array of technologies and policies that the Government have a role in creating and influencing, involving everything from transport to energy and communications, as well as the many issues that the hon. Lady raised in her valuable contribution. Because of that, the Government have recognised the need to support the development of smart cities, as part of the industrial strategy, in the interests of economic growth, combating climate change—I was proud earlier to be the Minister responsible for taking forward the statutory instrument that the hon. Lady mentioned—and, crucially, enhancing the quality of life for residents, which must always lie at the heart of any policy. This will be achieved through a number of Government initiatives, to which I shall now turn.

A smart city, town or area that recognises the need for new and emergent technologies to deliver better living standards for its citizens needs efficient transport, enabled by new technologies. The “Future of Mobility: Urban Strategy”, which the Government published in March, outlines our approach to urban transport innovations, ensuring that technologies are safe, accessible and green. It is worth referring to some of the strategy’s core principles to reassure the hon. Lady that putting the consumer and the citizen at the centre of our vision is exactly what we intend to do. The principles of the strategy include that new modes of transport and new mobility services must be safe and secure by design, and that the benefits of innovation in mobility must be available to all parts of the UK and all segments of society. As I will touch on later, if we are to convince the public of and maintain public trust in the need to invest in future innovation, technology and research, it is crucial that we are able to communicate the value of that for the taxpayer across every region of the United Kingdom.

Other principles from the strategy include that walking, cycling and active travel must remain the best options for short urban journeys, and that touches on the health-related points that the hon. Lady made in her speech. Mass transit must remain fundamental to an efficient transport system. New mobility services must lead to the transition towards zero emissions. Mobility innovation must help with British congestion through more efficient use of limited road space. The marketplace for mobility must be open to stimulate innovation and give the best for consumers.

The new mobility services are designed to operate as part of an integrated transport system, combining public, private and multiple modes of transport users. The data—the hon. Lady touched on data—from new mobility services must be shared where appropriate to improve both choice and the operation of that transport system.

In addition, we have established a future of mobility grand challenge, which I also cover as Science and Innovation Minister. This grand challenge is one of the four announced as part of the industrial strategy. It will take advantage of the extraordinary innovation in UK engineering technology to deliver better journeys for all. The main objectives are to be able to stimulate innovation, create new markets and secure a 21st century transport system. We believe that this could be a £900 billion global market in intelligent mobility by 2025, which is why it is equally important to be in the vanguard of developing those new technologies so that we can be world leaders. Since the “Future of Mobility: Urban Strategy” was published in early 2019, setting out the nine principles that will guide Government decision making, we have continued to ensure that we will take forward the biggest regulatory review of transport in a generation, taking advantage of technological advances to be able to better connect people, goods and services.

Alongside the strategy and the future of the mobility grand challenge, the Government have launched a competition for up to four new future mobility zones. This £90 million competition will test innovative transport ideas around the UK that could reduce congestion, pollution and costs, while making travel more accessible. Some £20 million of that £90 million was allocated to the west midlands last year to help develop the concept of future mobility zones—zones not just exclusive to cities but including urban areas and towns. As the Member of Parliament for Kingswood, near Bristol, I fully understand the importance of representing the urban region that includes not just the city centre, but areas around the outside of major cities. This can capitalise on related investments in the transport innovation in the region. The remainder of the funding will be awarded through a competitive process, with the winners announced this autumn.

Internationally, it should be noted that the Foreign and Commonwealth Office hosted a smart sustainable cities workshop in Madrid in February, with a focus on transforming mobility in cities. The workshop brought together 20 cities, looking at planning and delivering new, smart, low-carbon mobility systems.

Turning to the issue of smart technology, only a few weeks ago, I visited the Bristol and Bath science park to unveil a foundation plaque for the new £70 million Institute for Advanced Automotive Propulsion Systems. This institute is a specialist hub, which aims to deliver transformational research and innovation within the automotive industry, looking at the development of clean, efficient, ultra low emission vehicles. This is just one example of an investment made in a region. We have seen others. I was at Warwick Manufacturing Group in the west midlands on Friday, demonstrating our commitment to invest not just in London, Oxford and Cambridge—that so-called golden triangle of research—but in other areas of the country with traditional technologies that may not have had the opportunity to demonstrate that they can also be in the vanguard.

I have been to Glasgow, which I know is not far from the hon. Lady’s constituency, to see the fantastic work that is being done on quantum and the impact that quantum can have on the future of smart cities. It is potentially unfathomable at the moment, but we certainly know that those new technologies need to be supported to establish a future opportunity for visions in our cities and allow academic researchers at both Glasgow and Strathclyde to combine with industry to focus on what they know will be the huge potential for quantum. That is just one example of how we are trying to invest additionally not only in existing technologies, but in future and emerging technologies.

In further efforts to modernise our transport systems, the Centre for Connected and Autonomous Vehicles, a joint Department for Business, Energy and Industrial Strategy and Department for Transport policy team, was established in 2015 to secure the UK’s position at the forefront of this technology.

Automation can save lives, improve traffic flow and offer people better travel options. The Government are committed to ensuring that we can all benefit from the advent of these technologies as they emerge, which is why we intend to invest more than £250 million of industry match funding up to 2022 in research and development and in testing infrastructure. That will accelerate the development of these technologies and, crucially, anchor them in the UK. In addition, the Department for Transport’s £2.4 billion transforming cities fund was launched as part of the industrial strategy and expanded in the 2018 Budget by the Chancellor to address weaknesses in city transport systems. More than £1 billion has been devolved so far to six metro Mayors, and the Government are allocating a further £1.28 billion across another 12 cities on a competitive basis.

Creating an economy that harnesses artificial intelligence and big data, as the hon. Lady said, is one of the great challenges of our age. Data collected by smart meters, for example, facilitates innovative tariffs, with prices varying throughout the day as a result of a range of energy saving tools for households and small businesses. On Friday, I was in Solihull to see one of 100 homes in an experiment in which we are looking at having sensors placed in every single room.

As we talk about smart cities, smart towns and smart villages, I would extend the idea further to smart houses, smart dining rooms and smart living rooms so that we are able, for example, to meet the net zero target on carbon emissions by 2050. We know that some of the challenges that we face will be around clean growth. They will also be about looking at existing buildings to see what can done to ensure that they are more energy friendly. That will allow everybody using smart meters to better engage with their energy use and save money on their bills. A better understanding of energy demand will allow new local networks to manage their energy flows by supporting the integration of local decentralised energy resources, reducing the cost of network upgrades, facilitating detailed asset and building-level data, and creating secure, more centralised communication networks. Smart meters are one of the enabling technologies for smart cities. What we have seen already is that by placing technology in individual homes, we are able to connect up with a wider picture. We can take advantage of the data to establish patterns and demonstrate how best we can create future networks.

Last week, I was fortunate enough to attend a roundtable with the Energy Systems Catapult, which champions a whole-system approach to our network. For that reason, it has been responsible for the Government’s energy data taskforce. It has been challenged to identify gaps in the energy sector where data could be used more efficiently. This approach will be integral to the effective deployment of smart cities in order to encourage industry collaboration. Last week the taskforce published its recommendations, which we, alongside Ofgem, are considering.

In addition, we established the artificial intelligence sector deal in April 2018, which outlines nearly £1 billion of support for our future AI capability. This includes investment in leadership, skills, data, the new Office for Artificial Intelligence and the Alan Turing Institute, which I was able to visit this morning. Visiting the institute, it was absolutely clear that there is a huge potential for change in our public sector and our local authorities. However, that potential will be realised only if they have the opportunity to harness the high-performance computing and AI modelling that will demonstrate what can be done to define and establish behavioural change within cities.

Another field that can contribute greatly to the development of smart cities is robotics. At the beginning of the year, I enjoyed a visit to the University of Bristol, where I was promoting a £7 million funding announcement for robots that can be deployed into sewerage, water or gas pipes to inspect them and make repairs. That will be critical for transport systems on every road right down to village roads and country lanes. We know that the disruption caused by taking up pipework can stymie rural communities in particular for months on end, especially if it is the on the only road in and out of the village. It is estimated that innovations such as using robotics to inspect and make repairs without digging up the road in the first place could save the economy about £5.5 billion every year through reduced road excavations.

Turning to the need to benefit regions and towns, I could not agree more with the hon. Lady. As I said earlier, it will be vital to demonstrate that this is a shared initiative—that the research that is ongoing around smart cities is not just going to be put in place in the large cities of London, Edinburgh, Bristol, Birmingham or Manchester, but is to be devolved further down to the localities surrounding cities.

I am also the Minister for agri-tech, so I believe that we can do a lot through advances in rural technology and emerging technologies. The last agri-tech strategy was published in 2013; it is time that it had a refresh, because the technology has moved on. There have been fantastic opportunities to use British research in international partnerships to bring about agricultural change in other countries. We now have the opportunity to use some of that research to benefit rural communities.

When it comes to investment in areas such as those near the hon. Lady’s constituency, I point to the benefits that have already come about, such as the Innovate UK future cities demonstrator. Innovate UK awarded Glasgow £24 million to become a future cities demonstrator site, developing digital infrastructure and data initiatives to make it an interconnected smart city. What was fantastic about that project was that it led to £144 million in savings and new investments for the council. At the time, it focused on four key areas: active travel, such as cycling and walking; energy; social transport; and public safety. The hon. Lady mentioned small businesses and SMEs. Local businesses reported significant benefits from their involvement with that programme; some 63% of SMEs attracted additional business. When we look at the projects and at the funding from our research councils, it is crucial that we can to make those evaluations and communicate them to the public—to say that they did benefit people’s lives. People may not necessarily have noticed that something was a specific part of a programme established as part of the smart cities initiative, but to further the work we need to do, we need to go out and celebrate those investments.

Other investments have been made across the country. I wanted to mention to the hon. Member for Strangford (Jim Shannon) that the Connected Places Catapult, which spearheaded the digital infrastructure innovation strand, was a key part of the Belfast region city deal, which brought industry, academia and local authorities together around that shared proposal to the Treasury. That resulted in a £350 million investment from the UK Government.

I went to Belfast back in February and spoke to representatives of the University of Ulster and to the vice-chancellor of Queen’s University, Belfast. They demonstrated to me the importance of the triple helix—investment in a locality by the Government, with the university as a key locator of the knowledge economy in a local area and also with local businesses. It is about supporting local businesses and using the money to put them in contact with academics, who they might not have been in contact with before. I saw that with Quantum in Glasgow and the recent announcement of the ARCHER super-computer in Edinburgh, and with robotics in Bristol—it is about linking them up with Sheffield and Manchester and other regions that will have to adapt and demonstrate the new technology.

[Jim Shannon]

It is not just Belfast, but its peripheries: it is my constituency of Strangford; my council area of Ards and North Down; Lisburn and Castlereagh City Council; Mid and East Antrim Borough Council; and Newtownabbey Borough Council. Belfast and its surrounding areas all benefit—that benefit is for everyone.

[Chris Skidmore]

The hon. Gentleman is absolutely right. Setting out the benefits beyond the inner city locations is so crucial. When it comes to dealing with the issues of science and technology, we need to demonstrate the need for smart cities that will improve congestion and public transport.

I have not yet touched on the critical need to make sure that the lives and experiences of disabled people are better met in our cities. As Universities Minister, I am really keen that inclusivity must be mainstreamed. We should not be thinking about disabled people as part of the strategies; they should be at the centre of any strategy. That is the same in a university campus as in an inner-city location or a pedestrianised zone in a shopping centre. Placing the needs of disabled people at the heart of a vision from the very beginning is also critical in the design of smart cities for the future. Any local authority should make sure that it takes those issues of inclusivity absolutely to heart.

I conclude on a point of principle. The Government are committed to spending 2.4% of GDP on research and development—both private and public spend; at the moment, roughly a third of that spend is public and two thirds private. At the moment, we spend 1.7% on research and development. Other countries such as the United States, Germany, South Korea and even China are spending vastly more than us. That allows them to make advances that we must match.

Hitting 2.4% of GDP by 2027—the Government’s target—will just take us to the OECD baseline. We have to be able to make that investment, which would mean increasing the amount we spend on research and development across the public and private sectors from about £35 billion a year to £60 billion. To do that, we must convince SMEs to change their business models and recognise the value of research and development.

For example, we set up a robotics strategy in 2013. We invested about £386 million as a Government in robotics, and we leveraged in private capital of over £1 billion as a result. We need to see how we can increase that leverage; at the moment, the private sector puts in roughly £1.40 for every pound we spend on research and development in areas such as smart cities. In Germany, the figure is nearer £2.40 and in Israel it is about £3. We could be doing more to ensure a greater sum total pot for research and development on smart cities and the technologies that underpin them. However, we have to be able to make that initial public investment.

I have been giving a series of speeches about the road to 2.4%. First, I have covered the critical issue of people—investing in universities and future research leaders. Secondly, I have spoken about international partnerships; I am delighted that the hon. Member for East Kilbride, Strathaven and Lesmahagow took part in the delegation to the United States, setting out the new countries with which we wish to work for the future. Thirdly, I have been focusing on the new technologies such as quantum and robotics—the underpinning of smart cities and a future R&D strategy. My fourth speech on 10 July will be about how we can increase leverage and private investment for the future.

All four speeches relate to the key point of smart cities, which will happen and expand into our regions, towns and villages only if we make the investment in research and development in the longer term. We will need to spend £60 billion across the private and public sectors by 2027. We will need a catalytic moment from the public sector.

As science and technology Minister, I am also determined to ensure that we increase spend on clean and green technology for the future. The debate earlier focused on carbon capture, utilisation and storage. It is the regions that are coming up with some of the great new ideas; on Thursday, I will be going to Cheshire to look at some of the latest technology in that area. We do need to invest publicly as well as trying to increase private investment. The 2.4% figure must be a cornerstone of this Government’s and any future Government’s desire to meet the net zero target by 2050.

I am delighted that the hon. Lady secured this debate. It has highlighted some of the challenges that will lead to huge opportunities if we make that commitment to spending 2.4% on research and development. We can reach out to the whole country. Rather than research being focused in certain cities, we will be able to make sure that everyone in this country can share the proceeds of growth from research and development. We are looking at smart cities, but every town can be a smart town and every village a smart village.

Question put and agreed to.

Climate Change

Chris Skidmore Excerpts

Monday 24th June 2019 Commons Chamber

[The Minister for Energy and Clean Growth (Chris Skidmore)]

I beg to move,

That the draft Climate Change Act 2008 (2050 Target Amendment) Order 2019, which was laid before this House on 12 June, be approved.

It is an honour to be in the House debating this order less than two weeks after this seminal legislation was laid in Parliament. I should say that I stand here as the interim Minister for Energy and Clean Growth—as an understudy to my right hon. Friend the Member for Devizes (Claire Perry). It is a tribute to her efforts that we are debating this measure today. I am sure that she would have dearly loved to be at the Dispatch Box speaking to it herself. I pay tribute to her work, her industry, and, above all, her passion, which is testament to the legislation that is being taken through today.

The draft order would amend the 2050 greenhouse gas emissions reduction target in the Climate Change Act 2008 from at least 80% to at least 100%. That target, otherwise known as net zero, would constitute a legally binding commitment to end the United Kingdom’s contribution to climate change.

Last year, the Intergovernmental Panel on Climate Change published a sobering report on the impact of global warming at 1.5°C above pre-industrial levels. In that report, it made clear that a target set to limit global warming at 2°C above pre-industrial levels was no longer enough. It made clear that by limiting warming to 1.5°C, we may be able to mitigate some of the effects on health, livelihoods, food security, water supply, human security and economic growth. It made clear that countries across the world, including the United Kingdom, would need to do more. The House has heard of the great progress we have made in tackling climate change together, cross-party, and how we have cut emissions by 42% since 1990 while growing the economy by 72%.

[Caroline Lucas (Brighton, Pavilion) (Green)]

When Greta Thunberg was in Parliament a few weeks ago, she called on politicians to be honest at all times. Does the Minister agree that it is a bit misleading to suggest that we deserve great credit because we have reduced emissions by 42% since 1990, since we have done that primarily by outsourcing a huge amount of our manufacturing emissions to other countries? We do not account for our consumption emissions, and if we did, our success would look rather less rosy than he has just presented.

[Chris Skidmore]

The draft order builds on a framework of legislation set in 2008; I see the right hon. Member for Doncaster North (Edward Miliband) in his place, who introduced that legislation. We have always recognised as a country that we are on a journey towards reducing our carbon emissions. That journey includes ensuring that we show global leadership and demonstrate to other countries that are not cutting their carbon emissions the need to do so. Above all, we recognise the need to do so sustainably and to ensure that we can continue to grow our economy. The last thing we want to do is reduce our carbon emissions at the risk of increasing unemployment and shrinking the economy. We have taken the independent advice of the Committee on Climate Change, which has demonstrated how we can do so not only sustainably but, importantly, in a just transition. It is important for some of the poorest in society that we have a just transition towards net zero.

[Mary Creagh (Wakefield) (Lab)]

Does the Minister agree that the Government, as the largest purchaser of goods and services in the country, should also be a net zero purchaser and provider of services? That means a root-and-branch change of the way that government— local, national and quangos—procure what they buy for taxpayers.

[Chris Skidmore]

I thank the hon. Lady for her comments and for the leadership she has shown on the Environmental Audit Committee. I will come on to how the independent Committee on Climate Change produced its response, but it set out clearly a range of scenarios involving a net zero transition and what action would be needed in industry, within society and among individuals to go from 80% to 100%.

We have set carbon budgets 1 to 5 to take us to 2032. Carbon budget 6, which will lead to 2037, will be set by June 2021 at the latest. It is important to recognise that we all have a role. Government especially have a role not only in legislating today, to ensure that we set the policy framework for achieving net zero, but in demonstrating each and every one of its Departments’ commitment to net zero. Her Majesty’s Treasury will conduct a review over the summer, as we move towards the spending review, of the impacts on business, society and across the public sector of the need to decarbonise swiftly and securely.

As part of that progress and the pathway towards net zero, we will be publishing an energy White Paper in the summer. A variety of different documents will be published, but I take the hon. Lady’s point; when it comes to the public sector, we will need to show leadership. We will need to be able to explain or change and to set out how all different areas of society will meet future carbon budgets—whether that is carbon budget 6, 7 or 8—on the road towards net zero.

[Dr David Drew (Stroud) (Lab/Co-op)]

Will the Minister give way?

[Chris Skidmore]

I have given way a significant number of times, and this will be the last intervention for a while so that I can make progress with my speech.

[Dr Drew]

The Minister will know that the NFU has set a target for earlier than 2050. At the very least will he look at options for bringing forward the date by which we should be able to meet the target of net zero emissions?

[Chris Skidmore]

We have obviously taken advice on the 2050 target from the independent Committee on Climate Change, which has suggested that at the moment 2050 is the earliest possible date for reaching net zero. Obviously, we are the first G7 country to make that commitment to 2050. Other economies, such as Norway, have committed to 2038. As part of the Government’s local industrial strategy, the Greater Manchester area committed, just last week, to a net zero target by 2038. I welcome the NFU’s commitment, but what we are saying as a Government is that all agencies across society will need to take action.

We welcome the NFU’s leadership on agricultural emissions and looking at how the agricultural sector can be decarbonised. However, when it comes to the framework of the Climate Change Act, as the right hon. Member for Doncaster North highlighted during the statement made by my right hon. Friend the Secretary of State, the review mechanism is built into the legislation to allow us the opportunity to review the target in five years. When it comes to the overall cost—and some hon. Members may wish to reflect on the costs of going from 80% to 100%—the review mechanism is important. The Committee on Climate Change has recommended that the overall cost envelope of reaching net zero be the same as the 80% envelope, because since the original 80% target was set out, the costs of renewables and other technology have come down.

[Zac Goldsmith (Richmond Park) (Con)]

My hon. Friend is making a hugely important point. Earlier he talked about the need to balance the need to reduce emissions with concerns about jobs. Does he agree that we have already seen the creation of 400,000 low-carbon jobs in this country, and that by leading the transition to a clean economy—which will happen whether we like it or not—there will be even more opportunities for job creation in the future?

[Chris Skidmore]

I thank my hon. Friend for making that excellent point, and he is right. When we consider any impact on wider society of introducing this legislation over the next few decades, while we may see short-term costs from the transformation, we need to look at the investment opportunities that will be created by new green jobs, which are expected to rise from the 400,000 figure he mentions to 2 million by 2030, potentially creating an economy worth over £150 billion in the longer term. It is important that that investment is recognised, because we want the UK to lead the world in future technologies such as carbon capture and storage. The legislation today provides a catalytic moment for us to look at how we can achieve this target and to invest for the future. The Treasury review will lead into the spending review and we will wish to look at how we can continue to invest in clean growth as a technology.

[Jim Shannon (Strangford) (DUP)]

I congratulate the Government on bringing this proposal forward and assure him of my party’s support. I want to put that on record today. This issue is a topic of conversation every day in my office: it has become that sort of issue. Will the Minister outline how he intends to bring businesses along on the climate change agenda and ensure that they are encouraged, rather than forced, to make small changes that could make lasting changes globally? It would be great to bring small businesses along, as it would be a step in the right direction.

[Chris Skidmore]

I thank the hon. Gentleman for his leadership on the issue. We have had several conversations in the past few weeks on the legislation, but he is right that we have to take a whole of the United Kingdom approach to this. I know that it is more difficult for certain industries to make the changes that are needed, but for small businesses and those groups that we know will have questions or difficulties in making the transition, we will want to be able to set that out clearly. The energy White Paper will be published shortly, as the first in a series of documents to demonstrate the changes and consultations that we need. I reassure the hon. Gentleman that those consultations will allow the voice of small business to be heard in this debate. It is possible to achieve the changes, and we want to make sure that small businesses feel reassured of that.

[Sarah Newton (Truro and Falmouth) (Con)]

Does my hon. Friend welcome the support of the CBI and the British Chambers of Commerce, the NFU, the Royal Academy of Engineering and many household-name companies, because the legislation will give them certainty about investment so that they can benefit from the growth in our economy? It really is not only achievable to reach net zero by 2050, but affordable.

[Chris Skidmore]

I thank my hon. Friend for putting on record the wide range of support from many companies that have written to the Prime Minister and set out their own ambitious targets. I feel a bit like the BBC when it comes to whether I should name certain companies rather than others, but I know that many food manufacturers and retail corporations—big names on the high street—have already made the commitment to 2050. We are following in their footsteps as a Government and Parliament to provide the legislation today. My hon. Friend is right: the legislative framework will provide long-term security for those companies to begin their transitions.

[Graham Stringer (Blackley and Broughton) (Lab)]

Within the Government, there are many different estimates of the impact on jobs and the cost to the Treasury. Why do we not have an impact assessment for this statutory instrument? That would be good regulatory and legislative practice.

[Chris Skidmore]

The way that the legislation from the Climate Change Act 2008 has been framed means that impact assessments are not needed specifically for the SI. We did not have an impact assessment when we moved from 60% to 80%, because the risk is incumbent on Government in making the legislation. The impact assessments that are needed under the framework of the Act arise through the carbon budgets themselves. We have already legislated for carbon budgets 1 to 5, to 2032. The framework for carbon budget 6 will be recommended by the independent Committee on Climate Change ready for next year: it needs to be implemented by June 2020. There will be a full impact assessment on the next period, 2032 to 2037.

Following the point made by my hon. Friend the Member for Truro and Falmouth (Sarah Newton), it is the carbon budget process that needs the certainty in place for businesses and society to plan ahead. Any impact assessments that are made will reflect carbon budgets 6, 7 and 8. The Treasury is also taking forward its own independent impact assessment of the wider costs to business and society. That work is ongoing and will be presented at the time of the spending review.

[Mrs Kemi Badenoch (Saffron Walden) (Con)]

Many of my constituents, especially schoolchildren, will be delighted by this announcement, but others are rightly sceptical about the costs. What steps will the Minister take to ensure that the plan will be achievable and affordable?

[Chris Skidmore]

My hon. Friend is right that the legislation today is not simply about warm words or passing a law. We need to be able to demonstrate the action that lies beneath it. Action will come relatively quickly with the publication of an energy White Paper in the summer that will look at the future of our energy supply, at a household level and an industrial level, and the energy network itself. The White Paper will demonstrate the action that the Government are taking and it will lead to a series of future consultations.

In order to lead the debate on climate change and demonstrate the global leadership that the UK wishes to have, it is right that the process highlights the need for clean growth. That is not oxymoronic: we can grow the economy at the same time as removing greenhouse gases from our atmosphere and ensuring that new, greener technologies and more renewable forms of energy come on board. It is right that we lead that conversation, that we reassure those who may be concerned about the future, and that we take action to demonstrate to those businesses worried about any economic impact that this transition is both just and sustainable.

[Sir Oliver Heald (North East Hertfordshire) (Con)]

This measure is not long overdue but it is welcome, and I believe it will be very popular right across the country. Has my hon. Friend looked at the interim report of the all-party parliamentary group on British bioethanol, which proposes that E10 petrol should be introduced as standard in the UK, as it is in most parts of Europe, America and Australia? That would reduce carbon emissions from standard petrol by the equivalent of 700,000 cars; it would save jobs in the north-east of England, where the two British bioethanol plants are based; and it would be cleaner in terms of pollution. It would, of course, be a temporary measure while we introduce more electric cars, but is it not overdue?

[Chris Skidmore]

My right hon. and learned Friend has also raised that point with me in private, and I am happy to raise the issue of bioethanol with the Department for Environment, Food and Rural Affairs, which has responsibility for agriculture. It is important to reflect that, as part of a grand challenge in our industrial strategy, we have set out a number of missions on the future of mobility and transport in our cities, including the reduction of congestion, the introduction of electric vehicles and the adaptation of battery technology. I was delighted to visit Warwick Manufacturing Group on Friday, to discuss the advances it has made with lithium batteries. We must do that because of the need to reduce not just carbon emissions but air pollution; we know that tens of thousands of people are literally dying as a result of air pollution in our streets and cities, so the impact we make today is not just for 2050 but for now.

[Rachel Reeves (Leeds West) (Lab)]

The Government have committed to phasing out new sales of the internal combustion engine by 2040. My Select Committee on Business, Energy and Industrial Strategy has recommended that the date be brought forward by almost a decade, if there is to be any chance of meeting the commitment of net zero by 2050. Will the Minister look again at the phasing out of the internal combustion engine, so that we can get more electric vehicles on our roads and bring down carbon emissions?

[Chris Skidmore]

I could not agree more with the hon. Lady: we want to see the greatest possible transition, as fast as possible, to electric and hybrid vehicles for the future, but we have to be able to do it in a sustainable way. We have to ensure that electric vehicle technology, including batteries and other opportunities, moves with us at the same time. Other countries have moved faster than us, and I recognise the points the hon. Lady makes, but what is important is that we begin this discussion about how we can achieve that. There are a number of policy measures by which we can do it. There is also a supply-side as well as a demand-side issue when it comes to electric vehicle technology, and we need to be able to work on both sides of that economic argument in order to increase the number of electric vehicles on our roads. There are issues about charging points, which I also recognise. We need to do it in a sustainable and affordable way that ensures that we can continue a transformation of the economy.

[Dr Sarah Wollaston (Totnes) (Ind)]

I would really welcome an earlier shift towards electric cars and electric bikes, but is it not the case that, where possible, we really need to be getting people out of their cars altogether and encouraging greater use of cycling and walking? Will the Minister assure me that there will be increased investment in cycling and walking?

[Chris Skidmore]

I will get back to my speech in a moment. It is important that the Government are able to set out a pathway for considering the range of responsibilities across society, and that will encourage a range of individual actions. The Committee on Climate Change is the lead independent committee whose advice the Government have taken in order to legislate today. It has set out a range of future possibilities to reach net zero, many of which include individual actions for reaching the final 4%, but this is about system change and decarbonising our energy and heating systems, both domestically and industrially. There are a large number of areas where we will need to take action across society, and we need to be able to take that action now.

[Wera Hobhouse (Bath) (LD)]

rose—

[Chris Skidmore]

I have been generous in taking interventions—

[Madam Deputy Speaker (Dame Eleanor Laing)]

Order. If I might help the Minister and, indeed, the House, the Minister has been very generous in giving way and a great many Members have intervened on him. Perhaps the House is not aware that this debate has been allocated 90 minutes. That means that we will stop at 13 minutes past 7, which is only just over an hour away. Every time somebody intervenes, they take away the time of Members who have been sitting patiently, waiting to make speeches. Please do not be angry with the Minister for not giving way. He has been very generous and I am going to encourage him not to extend his generosity much further.

[Chris Skidmore]

The Committee on Climate Change has told us quite clearly that ending the UK’s contribution to global warming is now within reach. It has advised that a net zero emissions target is necessary, because climate change is the single most important issue facing us; that it is feasible, because we can get there using technologies and approaches that exist, enabling us to continue to grow our economy and to maintain and improve our quality of life; and that it is affordable, because it can be achieved at a cost equivalent of 1% to 2% of GDP in 2050. As I have said, owing to falling costs, that is the same cost envelope that this Parliament accepted for an 80% target. That is before taking into account the many benefits for households and businesses—from improved air quality, to new green-collar jobs. I applaud the committee for the quality, breadth and analytical rigour of its advice.

Recent months and weeks have been a time of huge and growing interest in how we tackle the defining challenge of climate change. Calls for action have come from all generations and all parts of society—from Greta Thunberg to David Attenborough, from schoolchildren to women’s institutes. My message today is, “As a Parliament we hear you, and we are taking action.”

This country has long been a leader in tackling climate change. Thirty years ago, Mrs Thatcher was the first global leader to acknowledge at the United Nations

“what may be early signs of man-induced climatic change.”

Eleven years ago, this House passed the ground-breaking Climate Change Act, the first legislation in the world to set legally binding, long-term targets for reducing emissions. The Act, passed with strong cross-party support, created a vital precedent on climate: listen to the science, focus on the evidence, and pursue deliverable solutions.

Today we can make history again, as the first major economy in the world to commit to ending our contribution to global warming forever. I ask Members on both sides of the House to come together today in the same spirit and to support this draft legislation, which I commend to the House.

[Several hon. Members rose—]

--- Later in debate ---

[Chris Skidmore]

The format of this debate prevents me from responding to many of the points made, so I commit to write formally to every Member who has raised matters that require a Government response. I will also seek Government time from the Leader of the House for a debate on this important issue as we work towards hosting COP 26. I thank all Members for their contributions. This debate is an historic moment and will ensure that we can progress the legislation for achieving net zero by 2050 to the other place.

Question put and agreed to.

Resolved,

That the draft Climate Change Act 2008 (2050 Target Amendment) Order 2019, which was laid before this House on 12 June, be approved.

Competitiveness Council 27-28 May 2019: Post-Council Statement

Chris Skidmore Excerpts

Thursday 20th June 2019 Written Statements

[The Minister for Universities, Science, Research and Innovation (Chris Skidmore)]

The Competitiveness Council took place on 27-28 May. The UK was represented by Katrina Williams, deputy permanent representative to the EU on day one (Internal market and industry); and by myself on day two (Research and space).

Day one (Internal market and industry)

The final Competitiveness Council of the Romanian presidency agreed three sets of Council conclusions: on the single market; on industrial policy and on tourism and reviewed the legislative achievements of the last six months.

The Council discussed the link between competition policy and EU competitiveness. Commissioner Bienkowska presented the Commission’s analysis on market integration, market concentration in the EU and protectionist practices in third countries. Ministers discussed EU competition rules and EU trade policy with regards to third country competition. The UK cited the Furman review which recommends updating competition policy for the digital age.

Ministers held a wide-ranging discussion on priorities for the future of EU industrial and single market policy. On industry there was broad agreement that the new Commission should develop an integrated industrial strategy which recognises global challenges. Discussions focused on the need to develop strategic value chains within Europe and welcomed the focus on important projects of common Europe interest (IPCEIs). The UK highlighted the need to recognise the global nature of value chains when developing policies. The increasing servitisation of manufacturing, the importance of digitalisation and the need to support the transition to a low-carbon economy were also key themes. The Council adopted conclusions on a vision for an EU industrial policy strategy (9263/19) and the future of the single market (9402/19). Ministers also agreed conclusions on the importance of tourism (document 9264/19).

The Commission reported progress on current legislative items: the directive on cross-border conversions, mergers and divisions; the directives on the modernisation of the EU consumer protection rules; and the collective interests of consumers and the general safety of vehicles regulation. The Commission also outlined its work on better regulation and provided an update on the future of the Rapex market surveillance system following the 2018 assessment.

The presidency reported on its conference in Craiova, Romania on the automotive sector on 18 March. The forum discussed challenges around low emission vehicles; connected and autonomous vehicles; and the competitiveness of European industry.

The Commission reflected on work to move the EU towards a circular economy and to achieve the objective of recycling 10 million tonnes of plastic by 2025.

The incoming Finnish presidency set out its future priorities: environmentally and socially sustainable growth with an integrated view of the single market and a modern industrial policy.

Day two - Research

Day two of the Competitiveness Council (Internal market, industry, research and space) took place on the 28 May in Brussels. I represented the UK.

The Competitiveness Council started with a policy debate on strengthening Europe’s role as a global actor and promoting international co-operation, space diplomacy and contributing to building the global space governance. The UK stressed the importance of open collaboration with third countries and entities with expertise, such as the European Space Agency (ESA), in order to achieve the strategic objectives of the EU in space.

Following the policy debate there was a brief “extraordinary ESA Council”, which adopted the “space as an enabler” conclusions.

The 11th EU-ESA Council was jointly chaired by the Spanish ESA presidency and Romanian EU Council presidency. They facilitated an exchange of views on the topic of “space as an enabler”. In the UK’s intervention Minister Skidmore highlighted the need to focus on better exploitation of the new technologies—artificial intelligence, internet of things and quantum technology—which would drive the 4th industrial revolution.

The Romanian presidency then resumed the Competitiveness Council with a policy debate on research and innovation as a driving force for a more competitive European Union. The UK stressed the importance of researcher freedom, closing the innovation gap and operating in a global context—as well the importance of training the next generation: in this context, the UK announced that EU students starting courses in England in the 2020-21 academic year will have guaranteed home fee status and financial support for the duration of their courses. EEA/EFTA and Swiss nationals (and their family members) will remain eligible for support on the same basis as now.

During any other business the Slovakian delegation outlined the recently signed BIOEAST initiative whilst the Romanian presidency recalled the launch of the joint strategic research and innovation agenda for the Black sea (SRIA) on 8 May. The incoming Finnish presidency concluded the Council by providing information on the work programme of their EU Council presidency.

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Regulation

Chris Skidmore Excerpts

Tuesday 11th June 2019 Written Statements

[The Minister for Universities, Science, Research and Innovation (Chris Skidmore)]

I am pleased to announce to the House today the approach that the Government will take to develop a regulatory system fit for the industries of the future.

The fourth industrial revolution is characterised by rapid technological change that has the potential to transform our economy for the good. It can drive the creation of new sectors, powered by breakthroughs in areas such as artificial intelligence and robotics. It can help us find new ways of diagnosing and treating diseases or novel approaches to cutting carbon emissions and tackling climate change. It can give consumers greater choice and lower prices through greater competition.

To seize the opportunities that this wave of new technology brings, we must ensure that our regulatory system is open to innovation while maintaining protections for citizens and the environment. The need for reform is urgent: 92% of businesses from a range of sectors think they will feel a negative impact if regulators do not evolve to keep pace with innovation in the next two to three years.

We start from strong foundations. We are ranked among the top 10 global economies by the World Bank for the ease of doing business in the UK, with the quality of our regulatory practices given the highest overall country score by the Organisation for Economic Co-operation and Development. Our regulators have pioneered cutting-edge approaches such as regulatory sandboxes, which have been emulated across the world. But we must not stand idle as change approaches.

Our modern industrial strategy committed to developing a new agile approach to regulation that supports innovation and protects citizens and the environment. The White Paper on regulation for the fourth industrial revolution sets in motion the reforms our regulatory system needs to meet that commitment, building on recommendations made by the Council for Science and Technology.

We will establish a Regulatory Horizons Council to advise the Government on regulatory reform needed to support the rapid and safe introduction of technological innovation. The council will complement and draw upon existing horizon-scanning activity across government to put the UK at the forefront of the industries of the future. The council will also advise on where greater public dialogue is needed to build trust in how innovation is regulated.

We will consult on a digital regulation navigator for businesses to help them find their way through the complex regulatory landscape and engage with the right regulators at the right time on their proposals. We will also consult on measures to enhance co-ordination between regulators to ensure that innovations are guided smoothly through the system.

We will support regulators to play a greater role in the innovation economy, including reviewing the case to extend the regulators’ pioneer fund. We will also pilot an innovation test so that the impact of legislation on innovation is considered as it is introduced, implemented and reviewed.

Building on our global leadership in regulatory practices, we will enhance our influence by establishing a partnership with the World Economic Forum centre for the fourth industrial revolution to develop regulatory approaches for new technologies.

[HCWS1613]

Oral Answers to Questions

Chris Skidmore Excerpts

Tuesday 11th June 2019 Commons Chamber

[The Minister for Energy and Clean Growth (Chris Skidmore)]

As my right hon. Friend is aware, the UK is considered to have one of the best intellectual property systems in the world, and we work continually to help keep that position. The Intellectual Property Office has committed in its recently published strategy to working towards making infringement socially unacceptable. We have commissioned research into consumer attitudes to counterfeit goods in order to assist with that.

[Mr Whittingdale]

Is my hon. Friend aware that online piracy of video and music content is still doing considerable damage to our creative industries? In particular, beoutQ, based in Saudi Arabia, is stealing content from a wide range of UK rights holders. Will he see what further measures can be taken to tackle this problem? Will he consider including economic harms in the scope of the measures set out in the Government’s Online Harms White Paper?

[Chris Skidmore]

Online piracy of any content is a key concern for the Government. We are aware of the specific issues with beoutQ and raised the matter with the Saudi Arabian Government. We will continue to make representations about its alleged infringement of UK creative content and support efforts to tackle piracy, wherever it occurs. However, the White Paper is to have a targeted approach that focuses on harms to individuals; it is not about economic harm to businesses.

[Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)]

It is not just in intellectual property where we need better legal protections. My constituent Mr Michael McGrory of Stalybridge recently took his employer to an employment tribunal for unauthorised deduction of wages, for breach of contract and for disability discrimination. He won his case but, rather than pay up, the company went into liquidation. The same directors set up the same business in the same premises under a different company registration and name. As a result, Mr McGrory cannot get his award enforced. Does the Minister agree that that is wrong? If so, how might we change the company formation process to stop that happening?

[Chris Skidmore]

I have great sympathy with the hon. Gentleman’s constituent. Obviously, we provide funding for the police intellectual property crime unit, which has seen 94 investigations and arrested or voluntarily interviewed 106 individuals recently. The maximum criminal penalties for copyright infringement have increased since 2017 from two years to 10 years. We are determined to do more, which is why we have a conference with the World Intellectual Property Organisation in London on 18 and 19 June, because we need an international response. I absolutely agree with my right hon. Friend the Member for Maldon (Mr Whittingdale): this is an international issue, and we need to ensure that we take action.

[Andrea Jenkyns (Morley and Outwood) (Con)]

3. What recent steps he has taken to support small businesses in Morley and Outwood constituency.

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[Mr Stephen Hepburn (Jarrow) (Lab)]

4. What recent steps he has taken to tackle fuel poverty in the north-east.

[The Minister for Energy and Clean Growth (Chris Skidmore)]

As my right hon. Friend the Member for Devizes (Claire Perry) has taken temporary ministerial leave of absence on compassionate grounds, I shall be answering all the questions relating to energy and clean growth today.

The Government made a manifesto commitment to tackle fuel poverty by upgrading fuel-poor homes to energy efficiency band C by 2030. Nearly 800,000 fewer fuel-poor households are living in the least efficient homes than was the case in 2010. We have also refocused the Government’s energy company obligation, and thousands of homes in the north-east have been improved as a result.

[Mr Hepburn]

Because of cruel Tory benefit changes and rip-off prices, fuel poverty in Jarrow has increased by 35% under this Government. Is the Minister proud of the choice that the Tories have given people, between heating and eating?

[Chris Skidmore]

It should be borne in mind that the fuel poverty metric is relative, which means that the number of people in fuel poverty will always fluctuate between 10% and 12%. It is important to focus on the average fuel poverty gap, which fell to £326 in 2016 from £341 in 2015.

[Sarah Newton (Truro and Falmouth) (Con)]

rose—

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[Sarah Newton]

We have been making good progress in reducing fuel poverty in Cornwall, but we could really do with some help with supercharging that progress. When will the Government publish their plan to deliver the excellent home energy efficiency targets in the clean growth strategy? If we could do that, it would save people, on average, about £400 a year.

[Chris Skidmore]

I can confirm that that will be taking place very shortly.

[Alex Cunningham (Stockton North) (Lab)]

5. What steps he is taking to tackle rates of pay in the offshore wind supply chain that are below the national living wage.

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[Layla Moran (Oxford West and Abingdon) (LD)]

8. With reference to the report entitled, “Net Zero: The UK’s contribution to stopping global warming”, published by the Committee on Climate Change on 2 May 2019, what assessment he has made of the adequacy of the Government’s greenhouse gas emissions targets.

[The Minister for Energy and Clean Growth (Chris Skidmore)]

I join colleagues from across the House in welcoming the Committee’s seminal report on net zero. The UK’s record in tackling climate change is world leading, and the CCC’s report sets out a path for us to continue that legacy by becoming the first major economy to legislate to end our contribution to global warming. The Government recognise the need for urgent action on climate change, which is why we asked for this advice last October, and we will respond in a timeframe that reflects that urgency.

[Layla Moran]

I am sure that, like me, many Members receive beautifully handwritten letters from schoolchildren. Nine-year-old Elizabeth from West Oxford Community Primary School says:

“Words are not enough—urgent action is needed within the next decade if the world is going to survive as we know it.”

Out of the mouths of babes—but not all of them are learning about climate change. Will the Minister work with the Department for Education to ensure that all children, including those at key stages 1 and 2, learn about this incredibly important matter?

[Chris Skidmore]

I certainly have the opportunity to do so, because I also sit in the Department for Education as Universities Minister. The Secretary of State for Education is keen to highlight that climate change is taught in schools, but I will pass on the hon. Lady’s comments about ensuring that the next generation continue to learn about the urgency with which we need to tackle climate change.

[Colin Clark (Gordon) (Con)]

We recently went for two weeks without using coal in our electricity mix, largely due to the use of lower greenhouse gas-emitting natural gas. Does my hon. Friend remain committed to the North sea oil and gas industry, which supports 120,000 jobs in Scotland and 280,000 across the United Kingdom as a whole?

[Chris Skidmore]

My hon. Friend hits upon a crucial point. If we are to have clean growth and a sustainable pathway towards net zero, we must ensure that we continue to use gas. We have weaned ourselves off coal, and it is remarkable that we went 18 days and seven hours without coal—not that I was counting. Anyone can follow the reduction in the use of coal over the past seven years, which has happened because we have been able to adapt and put gas back on the market. Going forward, we will have to ensure that we invest in a multitude of energy sources, including solar and other renewables, but gas will be a vital part of the mix in a sustainable transition.

[Paul Blomfield (Sheffield Central) (Lab)]

23. Last month, this House declared a climate emergency and called on the Government to“set ambitious, short-term targets for the roll-out of renewable and low carbon energy and transport”.Will the Minister outline what he has done to set and achieve those targets?

[Chris Skidmore]

It is incredibly important that the Government are committed to publishing an energy White Paper this summer. As for targets, we have already taken forward the grand challenges of setting out missions for transport and buildings, for example. Clean buildings are incredibly important, because 28 million buildings make up 25% of all carbon emissions. We are beginning that work, and we will be putting bids together in the run-up to the spending review that reflect the grand challenges and those missions.

[Rachel Maclean (Redditch) (Con)]

Does my hon. Friend agree with the CBI, which says that the Labour party’s plans to renationalise the energy system are already harming our efforts to tackle climate change? What commitments will he make about continuing to reduce our emissions to zero?

[Mr Speaker]

Yes, but do not bang on about the Opposition’s policy. That is not the Minister’s responsibility. We can hear a brief word about the Government’s policy. The trouble with following briefings from outside organisations is that they can lead Members astray.

[Chris Skidmore]

I think the key point is that the reforms that have led to the reduction in the use of coal over the past seven years have been taken forward using a market-based strategy. That was highlighted last week in a report by the International Energy Agency, which praised the UK’s commitments to addressing climate change by using market-based approaches.

[Rachel Reeves (Leeds West) (Lab)]

We have a moral obligation to bring our carbon emissions down to net zero, and there are real economic and social benefits in doing so. Although the Chancellor has expressed his scepticism, despite the fact that we face a climate catastrophe, will the Minister offer real leadership and commit the Government to supporting the Bill I will be presenting to the House this afternoon to bring down our carbon emissions to net zero by 2050?

[Chris Skidmore]

I will certainly be present to listen to the hon. Lady’s Bill. I want to make that commitment, but I recognise that across this House, across all parties, we cannot do this simply by taking a party political approach. It was her Government that passed the landmark Climate Change Act 2008, which introduced the carbon budgets that now allow us to adapt the legislation to look towards net zero.

There must be a whole Government approach, and I want to be able to work towards that. When it comes to looking at carbon budgets and the baselines, those are specific issues on which I want to work with the Committee on Climate Change. I look forward to hearing the hon. Lady’s Bill, on which we all want to move forward together.

[Barry Gardiner (Brent North) (Lab)]

I welcome the Minister to his new responsibilities while the right hon. Member for Devizes (Claire Perry) is on compassionate leave. We hope the right hon. Lady makes a speedy return to the House.

Assuming the Government will do the right thing and legislate for net zero by 2050, in line with the recommendations of the Committee on Climate Change, why has the Minister decided to weaken the third carbon budget by carrying over surplus emissions from the second carbon budget, against the committee’s specific advice?

While the Minister is at the Dispatch Box, perhaps he will confirm that net zero can be achieved within the current cost envelope for an 80% reduction of 1% to 2% of GDP. The Chancellor’s claim of £1 trillion spuriously adds together all the costs over the next 21 years and fails to subtract any of the benefits or savings.

[Chris Skidmore]

It is important to put on record the content of the Government’s letter to the Committee on Climate Change. After careful consideration of the committee’s advice, the Government decided to hold in reserve a small proportion of over performance from carbon budget 2—88 megatonnes of a total over performance of 384 megatonnes. The reserve will act solely as a contingency. [Interruption.] I have 384 mega- tonnes, but I will happily correct the record when I look at the statistics. Eighty-eight megatonnes are being held in reserve and act solely as a contingency against changes in the baseline. This will be released once it is clear that it will not be needed to address any technical changes to the baseline. We have also asked the Committee on Climate Change to look at those technical changes. We would not have asked the committee to take forward work on net zero if we did not believe we will be able to implement this.

When it comes to the cost reduction, I entirely agree with the hon. Gentleman that costs have come down on technology and will continue to come down. The Committee on Climate Change has made it clear that it can be done within the envelope of 1% to 2% of GDP, as set out for the 80% reduction.

[Derek Thomas (St Ives) (Con)]

9. What steps he is taking to ensure that people can access post office services in rural areas.

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[Wera Hobhouse (Bath) (LD)]

20. What plans he has to help ensure that solar power is (a) accessible to and (b) affordable for all households.

[The Minister for Energy and Clean Growth (Chris Skidmore)]

I am pleased to inform hon. Members that yesterday the Government launched their smart export guarantee, which will ensure that all small-scale generators are paid for the power they export to the grid. Supported by Government investment, residential solar installations are now 50% cheaper than they were in 2011 and, alongside technologies such as batteries, will help consumers to export energy to the grid when it is needed, reducing their bills and making solar more accessible and affordable than ever before.

[Clive Lewis]

With all due respect, only this Government could dress up a 94% collapse in domestic solar installations as a success. They now plan to slap 20% VAT on solar and storage and to replace the certainty of the feed-in tariff export payments with a lick-and-a-promise scheme with no certain payment rates and no guaranteed periods. Why does the Minister not just admit that, as ever, the Tories always side with big and dirty rather than with clean and local?

[Chris Skidmore]

The hon. Gentleman mentioned the drop in solar installations, which came about at the end of the feed-in tariff scheme. March was a record month for installations in the last two years, as we saw a rush for applications before the scheme closed. We had a question earlier about fuel poverty, and the point about the feed-in tariff is that, although it was important at the time and helped 850,000 people to use solar panels on their households, it was going to cost £30 billion, which would mean an average of £14 on every single household’s bill. We must now look into moving forward so that we can take a locally adopted position and ensure that we can generate a market.

[Douglas Ross]

I will try to be more positive than the hon. Member for Norwich South (Clive Lewis), but there has been concern among the industry, including AS Solar, about the proposed changes for reduced rate VAT for energy-saving materials. This presents a roadblock for many of the 60% of households that hope one day to get photovoltaic and battery storage, so will the Minister meet me urgently to discuss the matter to ensure that the solar industry gets this support from the Government?

[Chris Skidmore]

I thank my hon. Friend for raising those points, which reflect what the hon. Member for Norwich South (Clive Lewis) mentioned in the previous question. This obviously comes on the back of a specific European Court of Justice ruling. I understand Members’ concerns and sympathise with the industry, but I reassure the House that VAT continues to be zero rated for installations on new build housing. I will happily meet my hon. Friend to discuss the opportunities for future change.

[Wera Hobhouse]

I welcome the timely launch of the smart export guarantee yesterday, but many people will be disappointed by the decision not to set a minimum floor price to protect consumers and the domestic solar market. Under the proposals, it will be left to suppliers to set tariffs. If it becomes apparent that the market is failing to sustain fair remuneration for households that export to the grid, how swiftly can we expect the Government to intervene?

[Chris Skidmore]

The export market is clearly developing, and it is important to recognise that several suppliers are beginning to offer trial export tariffs, either in line with the wholesale price or at the same level or higher than the feed-in tariff export guarantee rate. Those suppliers include Octopus and Bulb, which have welcomed the changes. It is important that the policy can develop so that we can make sure that we see future development.

[Mr Speaker]

Lateral thinking, I say to the hon. Member for North West Leicestershire (Andrew Bridgen). Solar power and engineering are not altogether unrelated; with a degree of imagination, the hon. Gentleman could shoehorn his inquiry into this matter.

[Andrew Bridgen (North West Leicestershire) (Con)]

22. Thank you, Mr Speaker. Does my hon. Friend agree that we should be doing more to enhance technical education and engineering, and that one of the best ways to do that will be with T-levels? What impact does he think they will have?

[Chris Skidmore]

There are currently around 400,000 green jobs in the UK, and that number could more than quadruple to 2 million by 2030, so it is vital that we invest in skills. One of my priorities is to set out our mission to invest in technology for the future.

[Albert Owen (Ynys Môn) (Lab)]

Solar power is an important part of the energy mix. What plans do the Government have to help community groups to ensure that community buildings are built to be self-sufficient by producing their own electricity and selling to the grid, and to put solar panels on the roofs of Government buildings?

[Chris Skidmore]

There are a number of pilots on community buildings that we will be taking forward but, specifically, the smart export guarantee ensures that providers with up to 5 MW of production of solar electricity can export back to the grid. If we consider Blackfriars railway station—there is about 5 MW there—we can see the opportunity for community halls and community infrastructures to sell their energy back to the grid.

[Lucy Powell (Manchester Central) (Lab/Co-op)]

12. What steps he is taking to support business growth in the north of England.

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[Matthew Pennycook (Greenwich and Woolwich) (Lab)]

T4. The International Development Secretary recently said that he wants to double the UK’s current £1.1 billion commitment to the UN green climate fund. As the UK is yet to do so, will the Minister who has temporary responsibility for our engagement with the UN climate talks assure us today that it is the Government’s intention to commit additional money to the fund?

[The Minister for Energy and Clean Growth (Chris Skidmore)]

Obviously, any decision on future funds will be made within the spending review, but I can absolutely say that it is vital that we work cross-departmentally to look at how we can harness all the resources of Government towards tackling climate change. The Secretary of State for International Development has made that commitment personally, and I can double down on that commitment to ensure that we tackle climate change in the poorest countries in the world.

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[Mr Jim Cunningham (Coventry South) (Lab)]

T7. I have two universities in my constituency that work very closely with businesses to develop technology. Can the Minister assure me that the Augar review will not lead to funding cuts at these universities, as they get funding from different sources?

[Chris Skidmore]

The Government have been clear in our response to the Augar review that we want to reflect on its recommendations. We will take this forward as part of the spending review while the post-18 review reaches its conclusions. I entirely agree with the hon. Gentleman that the future of research in this country is about ensuring that universities act as magnets to draw business in. Just yesterday, I attended the launch of the University of Bath’s Institute for Advanced Automotive Propulsion Systems at the Bristol and Bath Science Park. It is absolutely right that we must cherish universities’ research capabilities.

[Mr Speaker]

I call Andrea Jenkyns. Oh dear; she has beetled out of the Chamber. I therefore call Peter Aldous.

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[Lee Rowley (North East Derbyshire) (Con)]

At a recent Public Accounts Committee sitting, the issue of fracking and specifically the decommissioning of fracking sites was raised, and the answers from senior civil servants were not great. Will the Minister meet me, so that we can discuss those concerns in more detail?

[Chris Skidmore]

I know that this issue affects my hon. Friend’s constituency directly and that he is a dedicated constituency MP, so I will happily meet him to discuss it.

[Melanie Onn (Great Grimsby) (Lab)]

The loss of Novartis from the South Humber bank will lead to 400 job losses. Will the Secretary of State appoint one of his Ministers to a taskforce, to find a new buyer for the site?

--- Later in debate ---

[Gavin Newlands (Paisley and Renfrewshire North) (SNP)]

Many of my constituents who are customers of HELMS—Home Energy and Lifestyle Management Systems—have been utterly failed by ineptly regulated green energy incentive schemes. The decision to remove the feed-in tariff for solar energy microgeneration, in tandem with the proposal to apply VAT to more energy-saving materials, including solar panels, will do nothing to support the public, the industry or the environment. Will the Minister reconsider those retrograde steps, which fly in the face of our climate emergency declaration?

[Chris Skidmore]

I simply disagree that this is a retrograde step. The smart export guarantee, which we announced yesterday and will legislate for, will create a market to ensure that small providers of renewable energy will be able to sell back their electricity to the grid and make a profit. As I have mentioned, feed-in tariffs will cost £30 billion over their lifetime, putting £14 on the bills of every household. If that is what the hon. Gentleman wants, as opposed to creating a market that will benefit those using solar panels, I do not know why he is here.

[Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)]

The Secretary of State is no doubt waiting for the new Prime Minister to authorise him to announce the UK ceramic sector deal. While that is being worked out, what conversations is he having with the Department for International Trade about supporting the anti-dumping measures that are currently being considered in Europe?

Low-Carbon Generation: Smart Export Guarantee

Chris Skidmore Excerpts

Monday 10th June 2019 Written Statements

[The Minister for Universities, Science, Research and Innovation (Chris Skidmore)]

I am pleased to announce I will be laying legislation today to introduce a new supplier-led subsidy free Smart Export Guarantee (SEG). This will ensure that homes and businesses, who export their surplus low carbon electricity to the grid, will be able to receive payment from their energy suppliers. The SEG will come into force in Great Britain from the end of December this year.

The UK has made substantial progress in building a successful renewables industry as part of our move to a low carbon economy. In 2017, businesses active in the low carbon and renewable energy economy generated £44.5 billion in turnover and employed an estimated 209,500 full-time equivalent employees. Our modern Industrial Strategy sets out how the Government will ensure that the UK continues to benefit from the transition to a low carbon economy.

Developments in technology and the industry, supported by the Government, have driven down the cost of small-scale low carbon electricity generation to a position where some projects can now be built without subsidy. This is in line with our vision that electricity generation should be competitive, and market based.

However, from responses in our call for evidence in July last year², it was clear small-scale generators can struggle to access the electricity market, while some larger suppliers are unfamiliar with smaller players in the sector. Responses suggested that following the closure of the Feed in Tariffs Scheme (FITs), some form of Government intervention remains necessary while markets for small-scale low carbon generation are still emerging.

The SEG will address this by requiring licensed electricity suppliers to offer a tariff for electricity exported by small scale low carbon generators, such as households with solar panels. This means small scale generators will be able to fully participate in the UK electricity market. This new requirement will apply to suppliers with more than 150,000 domestic customers. Other smaller suppliers can also voluntarily participate in the SEG.

Other than a few core conditions, such as payments having to always be greater than zero, this policy is market-led. The rates paid to the small power producers will be determined by the market rather than set by Government. This is unlike the FITs, which was funded through levies on consumers’ energy bills.

The SEG will complement the deployment of smart, flexible technologies such as storage and demand- side response. A smart and flexible system could save £17-40 billion across the electricity system to 2050³. The policy will encourage electricity to be sold at the times when it is most needed and market prices are highest.

Previously, the amount of electricity exported by small scale generators has often been unmeasured and flowed to the grid without metering. The rollout of smart meters allows a more precise approach, which in turn will make it easier to manage the electricity system as the number of small scale generators, as well as electric vehicles and small-scale storage batteries, increases.

Suppliers will also be free to choose the form of the tariff they offer and be encouraged to try different approaches, provided they meet the SEG requirements. This will allow simple tariff offers to be implemented quickly, with an expectation that increasingly smart approaches will be implemented.

The deadline for compliance will be from the end of the year to provide enough time for suppliers to make necessary system changes to operate the SEG. This will not preclude suppliers from offering export tariffs in advance of the deadline, as some are already doing.

To ensure that the market is delivering meaningful and innovative tariffs, Ofgem will report annually on the provisions made by suppliers for small-scale exporters. This will include the range, nature and uptake of SEG tariffs. If we consider that insufficient progress is being made, we will consult on reviewing the operation of SEG.

The SEG will ensure that small-scale low carbon generators are reimbursed for the electricity they export to the grid and can act as a springboard to the development of a robust and competitive market solutions. SEG allows the private sector to innovate and invest, while small-scale generation technologies can compete on their own merits. We expect that the electricity market to grow smarter and more flexible, and consumers will be offered an increasing range of innovative smart products and services. These services will support the integration and optimisation of onsite low carbon generation.

I will place in the Libraries of both Houses, copies of the “Government response to the consultation on proposals for the future development of small-scale low-carbon electricity generation” which sets out further information on the SEG.

1 Final results from the Low Carbon and Renewable Energy Survey on the low carbon and renewable energy economy in the UK, including direct and indirect activity, employees and turnover, available at:

https://www.ons.gov.uk/economy/enviromentalaccounts/bulletins/finalestimates/2017

2 The future for small-scale low-carbon generation: a call for evidence (July 2018) at: https://www.gov.uk/government/ consultations/the-future-for-small-scale-low-carbon-generation-a-call-for-evidence

3 https://assets.publishing.service.gov.uk/government/uploads/ system/uploads/attachment_data/file/568982/An_analysis_of_ electricity_flexibility_for_Great_Britain.pdf

[HCWS1609]