Oral Answers to Questions
Clive Betts Excerpts(2 years, 7 months ago)
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Lee Rowley
The benefits will be huge. This work is another example of the fantastic Conservative Tees valley team led by my hon. Friend, supporting Darlington, and the Mayor, and it demonstrates what we can do in an area to level up and improve it for the long term.
Mr Clive Betts (Sheffield South East) (Lab)
The Secretary of State for Business, Energy and Industrial Strategy (Kwasi Kwarteng)
Yesterday I updated the House on the UK gas market. As I said in my statement, protecting consumers is our primary focus and is shaping our entire approach to the issue; they must come first.
I welcome the new members of the Business, Energy and Industrial Strategy ministerial team. We had a great team before the reshuffle, but I am pleased that we have a good team with us today.
Over the summer, my Department has been abuzz with activity. We have introduced our innovation strategy and the hydrogen strategy, and outlined the new round for our contracts for difference scheme. It has been an excellent way to start and I look forward to continuing in that vein.
Mr Betts
Thank you, Mr Speaker; for a minute, I thought you were going to miss me out!
I welcome the fact that the Secretary of State launched the Government’s hydrogen strategy in my constituency at ITM Power, which is a leading green hydrogen producer. The German strategy is totally committed to green hydrogen alone, and of course the Germans have put substantially more funding in than we have into this country’s strategy. The Government have an aspiration to replace all fossil fuel boilers in this country by the 2030s. That ambition is important for reducing carbon emissions and for the security of our energy supplies. Does the Secretary of State agree that we can deliver on that ambition only with a much more significant commitment from the Government to develop and install green hydrogen boilers across the country?
Kwasi Kwarteng
The hon. Gentleman is quite right. I make no apology for the fact that we have a twin-track approach in the hydrogen strategy. We have endorsed the production of green hydrogen, as he has described the German Government have done. We have also endorsed the production of blue hydrogen, because in the first instance, as he will understand, blue hydrogen is much cheaper than green hydrogen. In order to kickstart a hydrogen economy, we need a cheap source of decarbonised hydrogen. As such, blue hydrogen represents a transition to an economy that can be driven more by green hydrogen. The twin-track approach that we have outlined is certainly the best one.
Kwasi Kwarteng
I will not admit that at all. The right hon. Gentleman got the date wrong—it was to be published in quarter 1 of 2021. I was the Energy Minister who said that.
Kwasi Kwarteng
Yes, it is still late, and I want to publish it as quickly as possible. I can admit that candidly.
The right hon. Gentleman talks about the green homes grant. I remind him that of the £3 billion that was sequestered—ringfenced—for the green homes grant, £1.5 billion was disbursed through Salix for public buildings, and that worked very well, while £500 million was disbursed by local authorities, and that was successful. The owner-occupier bit of it was a six-month programme—a short-term fiscal stimulus—that we have closed, and we are going to have a replacement imminently.
Nuclear Fuel Manufacturing
Clive Betts Excerpts(2 years, 7 months ago)
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Mr Clive Betts (in the Chair)
Welcome, everyone, to this session at Westminster Hall. It is good to see you all in person. To begin with, I need to remind everyone of the guidance. It is not my guidance; it is Government guidance and guidance approved by the House of Commons Commission, encouraging all Members to wear masks when they are not speaking. Please will Members and members of staff give each other space when seated, and when entering and leaving the room? Also, could Members’ speaking notes be sent to Hansard by email, please? Similarly, could officials communicate electronically with Ministers? I understand that Ministers can read emails and texts, so that should not be a particular problem, and it helps to make sure that we follow the guidance. Thank you all for your co-operation.
Mark Menzies
Indeed. If I may comment without embarrassing the right hon. Lady, she is a true champion of the workforce in her constituency, and she never misses an opportunity to make the case for investment in her area and champion that technology.
However, this new technology can be achieved only if the Government set out their vision for the UK’s future SMR fleet, including a regulatory framework and site proposals.
On SMR and AMR, I welcome the investment, particularly from the United States, but a way for investors to demonstrate their commitment is for them to promise to manufacture fuel in the United Kingdom. I strongly believe that a commitment to produce UK fuel for UK reactors must include all future UK projects and the possible transition of existing EDF contracts to Springfields. To achieve that, it would be a huge step forward if the Minister held meaningful discussions with EDF and US investors to work towards gaining such assurances on future contracts and to move some of the present contracts to the UK.
There are many ideas about the next phase, but one is that Framatome could manufacture at Springfields under licence, or that Westinghouse could manufacture Framatome fuel under licence, which would help to bridge the gap without a major renegotiation of EDF contracts. Indeed, having discussed this possibility—only yesterday, in fact—I know that EDF would be open to having a requirement for UK-manufactured fuel written in to contracts, as it works to solidify the long-term future of its key UK operations. EDF actually wants that clarity and certainty, which would go some way to securing Springfields.
As mentioned, there are huge opportunities on the horizon, but without the go-ahead from the Government, they remain something for the future. Therefore, it is key that the Government affirm their backing for UK nuclear and approve proposals for new reactors. With the spending review coming up and COP26 rapidly approaching, I cannot think of a better time for them to do that than now. However, we cannot just think about Sizewell C, which will provide opportunities for Springfields to fulfil the required contracts; we also have to consider the future, over the next 60 years, of what reliable nuclear energy looks like.
Support for other future opportunities, such as reprocessed uranium, is currently a growing area, and countries such as France rely on fuel imported from Russia. We are a neighbour and strategic partner of France, with a strong nuclear safety record, so with Government support and investment, this is something that Springfields has the expertise to commence work on in earnest.
To conclude, I cannot stress enough that, given the time-sensitive situation we find ourselves in, decisive action is needed at the earliest opportunity to protect this strategic national asset, and the Government must do whatever it takes to safeguard that asset’s future. Mr Betts, coming from Sheffield, you will know that Sheffield Forgemasters was regarded as a strategic national asset, and thank goodness action was taken to protect it. To stall further on nuclear would lead to irreplaceable skills being lost and facilities potentially closing. This is an industry with a great future, but it needs the certainty that Government support on investment and future projects can give.
The employees who I have discussed today are genuinely world-class; many of them are unique in this country in terms of what they do. However, they are ready to take on the new challenges that exist. Government must work with industry to guarantee that UK nuclear fuel will be produced in the UK, and give the go-ahead to the projects that will create those orders. If we do that in a timely way, both the workers and the plant would have a future, a national strategic asset would be protected, our journey towards low carbon would be a safe one, this country would achieve energy security, we would be able to export fuels, with the AMRs and SMRs, to many other countries around the world, and we would truly be heralding a golden era. I call upon the Government to seize this opportunity.
Mr Clive Betts (in the Chair)
I think we have five hon. Members who want to catch my eye, which gives them about nine minutes each. I am not imposing a time limit, just giving guidance on how long to speak for.
Chris Green (Bolton West) (Con)
It is a pleasure to serve under your chairmanship, Mr Betts, and to follow the hon. Member for Strangford (Jim Shannon), who has articulated so many of the arguments and points in this debate so well. It was a great pleasure to visit the constituency of my hon. Friend the Member for Fylde (Mark Menzies) to see the amazing facility at Springfields, and to get such a strong sense of how key it is—not just to our nuclear future, but in the framework of our energy future—and the importance of nuclear as a reliable form of energy. This, after all, is what the debate is about.
I not only met the organisation there; the National Nuclear Laboratory is sited there as well. I heard the powerful representations and views of the trade unions, Unite and Prospect. Their championing of the workers there, and the clear collaboration and close relationship between the management of the site, the workers and the union movement, is such an important thing for the future of any organisation. Working together is such a key part of the success and, hopefully, the ongoing future success of the site, but we need to understand what ought to be a fairly straightforward debate.
Fundamentally, we need clean, reliable and affordable energy to meet not only our current needs but our future needs as well. We do not know what the future will bring, but I would certainly like to see far more industry being located in Britain. China, India and many other countries around the world have been very competitive. We have been losing a great deal of heavy industry, and we need an energy supply that industry and heavy industry can use in an affordable way to be competitive with those countries, and with Germany as well. Germany is going down in terms of nuclear, but by doing so it is going up in terms of coal and other fossil fuels. That does not really fit in with what we normally hear about our European neighbours, which is that they are far more environmentally friendly than us. By turning their back on nuclear, they are embracing carbon emissions.
With our ambitions for COP26 and our leadership in this area, we ought to be looking at those sources of power that can reduce carbon emissions. It is the Government’s agenda; it is the international agenda. Nuclear is a key part of that, but we have to think about the steps that we need to take to get there. There was a bit of controversy recently about coking coal being produced in Cumbria rather than being imported for the British steel industry. It is so important that we take the effective and right judgments, and not only for the short term for British industry. Whether it is the Minister or the wider Government, we have to reassure industry and the nuclear sector that we have a future here, and will not export our industry overseas and feel good about exporting our carbon emissions to countries that perhaps have slightly lower expectations and standards than we do.
We need to support British manufacturing industry. We also therefore need to support reliable energy, baseload or firm energy, as I think the term is now, where we know, day or night, whatever the day of the year, we will have the energy that we need for industry and for homes—for cooking and for heating. We ought to be able to rely on that. As highlighted earlier this week in The Daily Telegraph, the UK produced a record of 14,286 MW of energy on 21 May, which is extraordinary, but earlier this week or last week we dipped down, just from wind, to 474 MW. That is not reliable energy that people wanting to keep a warm home in the middle of winter can rely on. It is not what industry can rely on, especially the steel industry. The next generation furnaces will be reliant on electricity. How can the steel industry run an arc furnace if it cannot rely on the energy supply?
It all goes together and the nuclear industry is key. This is technology that we have at the moment. We know how nuclear energy works. We know that we can produce stations that are reliable and cost-effective. We often hear about wind and solar energy, but there are significant technological problems with those forms of energy when it comes to providing firm energy. Until we have storage of that energy, so that when the peaks happen we can store the energy to take us through more difficult times, those forms of energy will not be as reliable as industry and homes need.
It is very positive that the Government have an increasingly strong hydrogen agenda. Again, that relies to a significant extent, it seems, on carbon capture and storage and that is not yet at scale or cost effective. Again, this is more technology that will probably be quite expensive and has not yet arrived. Perhaps in the longer term, we will need those technologies, but in the shorter term, we need more reliance on nuclear. That is where Springfields plays such a key part. It produces the fuels now and will produce the fuels in the future, but there is a short-term gap that needs to be bridged.
With more of our nuclear fleet being decommissioned in the very near future, we need to secure the future of the Springfields site. As My hon. Friend the Member for Fylde highlighted, we should perhaps renegotiate with the French nuclear industry to make sure that we can manufacture in the UK, perhaps under licence or whatever kind of relationship. We can do that. We also have the promise of massive investments in the nuclear fleet, because they are very expensive projects. That is some level of leverage we can use with the French, and I am sure we will be able to get a deal that ensures that we can keep those skills. That is such a key part: having Springfields there for the short, medium and longer term means we keep the skills in the United Kingdom.
Not only my hon. Friend but the team in Government and the COP 26 President have to have that ambition. We need to speak out more consistently. It is disappointing—I do not know how true it is—that the sense in Glasgow is that the nuclear industry is not being welcomed to participate in COP 26. It ought to be a key part of it. I hear the COP 26 President speak passionately on a regular basis about other forms of energy, but I do not hear the same passion about the nuclear industry. For the nuclear sector, for long-term investment, we need to hear far more about the British Government’s commitment to the sector—not just Springfields but the sector more widely—because that is what creates confidence. If people, whether from my constituency or more likely my neighbours’ constituencies of Fylde, Blackpool North and Cleveleys or even Preston, are to take up an apprenticeship, they must have confidence in the future. There are other companies—British Aerospace and others—that can take that talent, but Ministers need to give confidence to the next generation of engineers and scientists and other people coming through that this is a career for them.
We have to see the sector also within the framework of national security and strategic national interest. If we lose the skills and the businesses, it is very difficult if not impossible to bring them back. It is also a question of Hinkley C and the skills there. We need to have that certainty about building the rest of the nuclear fleet, when that is going to happen and what type of nuclear fleet we are going to have. If those engineers and that talent at Hinkley C do not have jobs to go to, they will use their talents in other projects around the country. When we get around to building the next nuclear power station, that talent will be gone. For reliability and effectiveness in terms of delivery, we have to secure that talent, just as we need to secure the talent in Lancashire. It ought to be seen as a key part of the levelling-up agenda, not just for championing Lancashire, the north west and the border, and the north of England, but even for Derby North. I do not know what kind of next-generation nuclear fleet we are going to have, but Derby is going to be a key part if we choose to have small modular reactors, perhaps of the Rolls Royce design. I am sure we have a strong voice in Government championing the cause. It would be lovely to hear it a bit louder.
Mr Clive Betts (in the Chair)
Finally, but not least, Richard Graham. Just to say that we need to start the wind-ups at 3.28 pm at the latest.
Richard Graham (Gloucester) (Con)
Thank you, Mr Betts. It is a pleasure to serve under your chairmanship. I congratulate my hon. Friend the Member for Fylde (Mark Menzies) on securing this debate and colleagues from around the House on joining in what might be called a celebration of nuclear, to which I know the Minister will respond positively.
My hon. Friend made absolutely clear his views of the future of civil nuclear fuel manufacturing in the UK at Springfields in his constituency, and made the case as strongly as any of us could have expected him to do, with a crucial role for Sizewell C. In the remaining minutes before the wind-ups, I want to touch on that crucial aspect of this debate, but then widen it fairly swiftly into the role of nuclear in the United Kingdom, as hon. Members have tended to do.
The crucial thing is that the case for nuclear has to be restated again and again, because it has not always been clear that this Parliament has supported it. Whereas nuclear energy itself has continued to deliver consistently throughout the past 60 years, political views have ebbed considerably over that time.
Ultimately, although the 103,000 jobs and important supply chains are clearly vital to the economy, that is not the fundamental reason why we need nuclear, which is, in summary, the only proven low-carbon power that does not raise emissions, even in extreme weather. Over the past 60 years, it has consistently delivered more than 20% of the UK’s electricity needs. We know that those needs will rise so it is crucial that we plan for the future. If the criticism of democracy is sometimes that we only think in terms of five-year election cycles, it is vital that nuclear is the exception to that short-term thinking.
I listened with interest to the thoughtful comments made by the hon. Member for Preston (Sir Mark Hendrick) about the sector about which he knows so much—engineering, nuclear and skills—but the fact is that unfortunately his own party’s failure to do anything for the best part of a decade led to a loss of skills, the sale of British Energy and our dependence thereafter on foreign investment and skills. Much has changed since 2010, of course. Crucially, with the construction at Hinkley Point, we have the opportunity for the first time in a very long time to build up domestic skills, which can then continue at Sizewell C. I hope very much that the Minister will indicate that there will be further opportunities in the future to build additional nuclear power stations, thus taking on the skills from generation to generation, reducing the cost, increasing our skills, possibly enabling us to become exporters of skills again, and reducing our dependency on foreign skills.
The mood music at the moment is encouraging. None the less, I understand that the 18 GW proposal at Sizewell C has not yet reached financial agreement. Anything the Minister can say on that would be welcome. Meanwhile, we have all been slightly sidetracked by the huge opportunities in renewable energy, not least offshore wind and the sector I have spent a lot of time on—marine energy. I encourage all hon. Members who are supporters of nuclear to look at what is being achieved by Orbital Marine Power off Orkney in the north of Scotland. It is a remarkable generation of marine energy. In a sense, all that complements what we can do with nuclear, because it opens another great opportunity, which is to generate hydrogen at or very close to our nuclear power stations. I would welcome it if the Minister commented on what progress we might make on that over the next two or three years.
My constituency of Gloucester has been the nuclear operational headquarters for British Energy and now EDF Energy for a long time, operating all the existing nuclear power stations in Britain. Of course, we hope to take our nuclear skills in a new and different direction with a bid to become the hub, at Oldbury and Berkeley, for the development of nuclear fusion. We are very keen to see the operation at Barnwood play a major role in the development of Sizewell C. As colleagues have mentioned, the opportunities for skills, careers and well-paid jobs in a sector that is so vital to everything we do is enormous.
Can the Minister give us any update on Sizewell C? When will the Government consider the next project thereafter and how fast we can take forward the development of hydrogen at our nuclear power stations? I hope that my comments supplement and complement what colleagues from around Westminster Hall have said in support of a sector that is so vital to our future.
Mr Clive Betts (in the Chair)
We now move on to the Front-Bench speeches. We have slightly more than the normal 10 minutes. We will allow two minutes for the mover of the debate to wind up at the end, so you have about 12 minutes. You do not have to take that time, of course. I call Alan Brown of the SNP.
Dr Whitehead
I try to set myself a self-denying ordinance of not straying too far into wider issues such as firm power, but I would say that carbon capture and storage is very well developed already, and is up and running. I have actually been to see a carbon capture and storage plant operating at full scale in Canada.
However, it is not a question of whether carbon capture and storage can actually do the work, and it is not that the technology has not been developed to make carbon capture and storage perform the entire chain of activities—sequestration, storage, transport, and so on. It can do all those well and at scale; that has already been proven. It is a question of how quickly we can develop carbon capture and storage and put it into operations, so that it works from the day they start, with carbon capture and storage on the back of them, rather than developing operations that are carbon capture and storage-ready, but where carbon capture and storage is not on the back of that process. That is really a question of planning and investment, more than anything else, but it needs to be done in the right place at the right time. That is the end of my diversion.
The issue for Springfields nuclear fuel, therefore, is that there is clearly a substantial valley of death before what Springfields can reasonably expect for its work for the future. If we leave it at that, it is inevitable that, even if it eventually survives that gap and comes through well in the end, that may well be at the cost of all the skills in that organisation and most of the workforce; and, at a time when Springfields’ services absolutely will be required in the national interest, its ability to spring back may well have expired in the meantime.
As a country, we cannot let that happen. I therefore congratulate the unions, Prospect and Unite, for campaigning strongly for that view of Springfields as a company. It is beholden on the Government to take that view as seriously as the workforce do—and, I think, all of us in this Chamber do—in their responses and reactions to this particular issue.
When looking at the nuclear sector deal that was signed in 2018, I was interested by this statement from the Government on securing fuel capabilities:
“We will work with the UK nuclear fuel industry to ensure continued, commercial operation of their facilities and secure the long-term future of these important UK strategic national assets to deliver future energy security as well as ensuring the UK nuclear fuel industry continues to deliver long-term UK economic benefit”.
That is what they committed themselves to in the nuclear sector deal. However, as far as I know, nothing has yet been done about that.
Therefore, my first question to Government is: does the Minister intend that that nuclear sector deal commitment will actually be carried out? Are the Government looking seriously at ways in which Springfields nuclear fuels can be properly supported during this period of its existence and assured of remaining in existence as we move to whatever the next stage of our UK nuclear programme is?
My second issue is also important. Are the Government serious about moving on the programme for the already existing nuclear facilities and bringing in arrangements to give greater certainty on the development of Sizewell C? I refer to what hon. Members have also mentioned this afternoon: the regulated asset base arrangement or similar. If the Government do not like that arrangement, an alternative could give certainty to the development of Sizewell C in the next period. As I am sure the Minister knows, there is a row going on between Departments about whether the regulated asset base should be introduced for Sizewell C. That needs resolving. Something needs to come out shortly to get that programme under way. That is also relevant to the future of Springfields nuclear fuels in the way I have described it this afternoon.
I have two direct questions for the Minister, both relating to the future of Springfields nuclear fuels, which we want to see secured. We want to make sure that the Government play a full role in securing that future, so that we can say that that national asset is in good shape and in good hands. In passing, there is a question mark about the future ownership of Springfields nuclear fuels. As a national asset, perhaps it should be a Government agency, so that we can secure its activities for the future in a way that befits its importance to the country.
Mr Clive Betts (in the Chair)
If the Minister could allow a minute at the end for the mover of the motion to comment, that would be helpful.
UK Steel Production: Greensill Capital
Clive Betts Excerpts(3 years, 1 month ago)
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Kwasi Kwarteng
I am delighted that my hon. Friend has mentioned the Steel Council. I remind right hon. and hon. Members that the Steel Council last met in February 2020. It was a first priority of mine, on becoming Secretary of State, to have another meeting, so we had a meeting on 5 March that went extremely well and is a solid basis for our ongoing dialogue with the sector not only among employers but among union representatives. It is an excellent body and I look forward to working very closely with it in the months and years ahead.
Mr Clive Betts (Sheffield South East) (Lab) [V]
I am sure the Secretary of State will recognise that Sheffield is the home of steel. Stainless steel was invented in Sheffield, steel made in Sheffield is famous not merely in the UK but throughout the world, and thousands of Sheffielders still work in the steel industry and in related industries as well. So will he give an absolute assurance that the term, “Steel made in Sheffield”, will not be consigned to the history books?
Kwasi Kwarteng
It certainly will not be consigned to the history books. We have an excellent firm in Sheffield, Forgemasters, among others. We all know the great history and traditions that Sheffield embodies and its vital role in the development, and the birth, really, of the steel industry worldwide.
Oral Answers to Questions
Clive Betts Excerpts(3 years, 1 month ago)
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Kwasi Kwarteng
My hon. Friend will know—if he does not, I will let him know—that when I took office two months ago, the things that the travel and hospitality sectors assured me that they needed more than ever were a road map and support. I am pleased to say that my right hon. Friend the Prime Minister came up with his road map on 22 February and my right hon. Friend the Chancellor extended unprecedented support to the economy on 3 March. I am happy to meet my hon. Friend to discuss whether he wants to see further actions, but we have committed £407 billion—an unprecedented amount—to supporting the economy at this terrible time.
Mr Clive Betts (Sheffield South East) (Lab) [V]
Kwasi Kwarteng
The hon. Gentleman will know that I have met ITM Power a number of times; I was honoured to meet them in Grimsby. It does a great job. He will also know that, in my time as Minister of State for Energy, I commissioned the hydrogen strategy, which will be published shortly. At the core of the strategy is a twin-track approach. We are promoting blue hydrogen—which is made through methane natural gas reformation—and, more particularly in answer to his question, we are also committed to green hydrogen, or electrolyser-produced hydrogen, in which ITM Power is the leader.
Budget Resolutions and Economic Situation
Clive Betts Excerpts(3 years, 1 month ago)
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Mr Clive Betts (Sheffield South East) (Lab) [V]
There are a lot of things missing from this Budget that I could comment on, but I will try to highlight some of the really important ones.
First, local government went into the covid crisis having had the biggest cuts of any part of the public sector since 2010. Some of the costs of covid and some of the loss of income have been covered by the Government, but local government went in with a £5 billion shortfall, and £2.6 billion of those extra costs and lost income have not been covered, so the crisis in funding for local government is all the greater. Croydon has put in a section 114 notice post covid, four other councils have had to have capitalisation plans accepted and we know that many others are on a financial lifeline. In the Budget, there was no mention of extra funding for local government, no mention of financial reform and no mention of reform to the business rates system, which has been promised over and over again.
The Chancellor could not even get the words “social care” out of his mouth when he spoke to the House about the Budget. There was no mention of social care at all, but we know that reform to social care funding is key to the whole reform of local authority funding. Indeed, two Select Committees—the Health and Social Care Committee and the Housing, Communities and Local Government Committee—did a joint report three years ago and gave the Chancellor an oven-ready scheme, to coin a phrase, which would have reformed social care funding with a social care premium. We are still waiting for a response to that report three years later.
There was no mention of the public health grant, despite the incredible work that public health inspectors and directors have done during the covid crisis. If only they had had a fraction of the money that has gone to the private contractors doing track and trace, I think we would all be in a much better position today. And, of course, what is the reward for all those people who have worked so hard in local government services—the social care workers, the public health workers, the environmental health workers and people like the refuse collectors who have kept our important regular services going during this crisis? What is their reward? A pay freeze. That is what their reward is. It is completely unacceptable that these hard-working people should be asked to bear a disproportionate share of trying to get the budget deficit back under control.
If we are going to build back better, then of course we need more social housing. The Select Committee did a report saying that to get to 300,000 homes in this country, 90,000 need to be in the social housing sector, built by councils and housing associations. There was not a penny in the Budget to enable that programme to be got under way, and we estimated that it would cost about £10 billion a year.
What we are seeing, unfortunately, is that for all these important public services and important public servants, the pre-covid austerity has now been translated into—guess what?—post-covid austerity, which is something we should all oppose.
Alternative Fuelled Vehicles: Energy Provision
Clive Betts Excerpts(3 years, 6 months ago)
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Matt Western (Warwick and Leamington) (Lab)
I beg to move,
That this House has considered energy provision and alternative-fuelled vehicles.
It is a pleasure to serve under your chairmanship, Mr Betts; it is very good to see you in the Chair. I thank all those who were involved in granting me this debate today.
Let me start with an uncomfortable, some would say inconvenient, truth:
“Each one of us is a cause of global warming, but each one of us can make choices to change that with the things we buy, the electricity we use, the cars we drive; we can make choices to bring our individual carbon emissions to zero. The solutions are in our hands, we just have to have the determination to make it happen. We have everything that we need to reduce carbon emissions, everything but political will.”
Those were the words of Al Gore some 14 years ago. The real truth, however, is that while we have some, possibly many, of the solutions, we are perhaps showing insufficient will.
In that same year, Lord Stern produced his climate change report. Fortunately, those calls were heard by the last Labour Government and they acted fast. In a global first, Labour legislated, with the Climate Change Act 2008 establishing the Committee on Climate Change, which has been responsible for recommending carbon budgets and a series of rolling targets for greenhouse gas emissions, to take the UK on a path to reduce emissions by 80%, compared with 1990 levels, by 2050.
Gore said that we must have the determination to bring about change. The inconvenient truth is that if we do not have it, and if the Government do not lead the way with the necessary determination and conviction, we will all be the victims of permanent climate change. He said that it is about making choices, both as individuals and as Governments. Labour’s Climate Change Act was a turning point. The carbon targets or budgets have been met primarily through addressing power generation, but transport remains an issue.
For the past decade or more, the contribution of carbon dioxide emissions from surface transport has remained broadly flat, at around 27%, having fallen just 3% between 2008 and 2018, according to a Committee on Climate Change report. That is the context in which we must view the importance of challenging the sector. It cannot be left to the vehicle manufacturers or the energy providers to take financial risks in the absence of certainty from Government. Nor should consumers, who rightly want to do the right thing, be penalised or disadvantaged by being first movers, only to find that the Government fail to match their ambition.
Certainly, the industry strongly supports the decarbonisation of road transport, recognising the need to reduce greenhouse gas emissions, both today and on the pathway to achieving net zero. Across the sector, it is investing significantly to deliver smart and sustainable mobility, and it is rightly calling for the right eco- system and for enablers to support consumers with their transition to ultra-low or zero-emission vehicles. As such, a comprehensive, multi-sector strategy is needed, including key elements of energy decarbonisation, investment in infrastructure and transitional consumer incentives to enable it to happen.
Let me consider in turn the strategies required for the market, industry, energy and skills, for each of which the role of Government is fundamental. It would be easy to leave it to the market and say, “Well, it’s not working. The upfront investments are too great to choose the wrong product or technology.” Manufacturers certainly cannot transform the market alone. Market frameworks and certainties are required to give consumers and businesses confidence to take the leap into these technologies and to power our transition towards alternative fuels. Understandably, until these vehicles are as affordable to buy and as easy to own and to operate as conventional cars or other vehicles, the consumer or business will not travel with the technologies. In the first half of the 2010s, fewer than 25,000 new plug-in cars and vans were sold in total. Last month, battery electric and plug-in hybrid cars made up one in 10 registrations of new models, which is a substantial amount.
It would be easy to compare and contrast with countries such as Norway, but it has a very different industrial base, and very different consumers and energy provision. It is far better to look at our peers, such as France and Germany, and see what is going on there. We need to avoid over-deliberating about technologies and make a decision—not a UK-only decision, but one that reflects where other primary markets and tech developers are moving. We need to decide the appropriate energy power unit for passenger vehicles, both solo and multiple occupancy, as well as for commercial vehicles, both autonomous and manned. The same applies to buses and mini-vans; heavy goods vehicles and specialist industrial, commercial and military vehicles, including refuse vehicles, such as those produced by Dennis Eagle in my constituency; and earth movers and others such as JCBs and those produced by businesses such as Thwaites, just outside my constituency in Warwickshire.
I turn to the industrial strategy that is required. Naturally, we all want to ensure that the UK is at the forefront of any new technologies. Of course, the UK should have the ambition to take a lead in the ultra-low emission vehicle market and be a leader in manufacturing. We need to attract new investment, including upskilling the workforce, which I will come back to. We need battery factory investment, with the supply chain development to go with it, and strategic research and development investment at a globally competitive level, such as that at the Advanced Propulsion Centre at Warwick University. We also need the UK Battery Industrialisation Centre, which is currently being built just outside Coventry and is due to open later this year. The Government supported the collaboration by Coventry City Council, the local enterprise partnership and Warwick Manufacturing Group, which were awarded £80 million.
Developing the technology is one thing; commercialising it is another. We presently have zero gigafactories, while other countries already have them or are establishing them. Sadly, we missed out on Tesla, which decided to invest in Germany, in a factory just outside Berlin, to produce batteries, battery packs, powertrains for use in Tesla vehicles, and to manufacture the new Tesla Model Y. It will produce 500,000 units a year, employing 7,000 people. The company was attracted to the UK, so Elon Musk says. However, it wanted to be at the centre of Europe, so, sadly, the Brexit decision meant that it was a safer bet for Tesla to invest elsewhere.
As Tesla shows, an industrial strategy needs to be underpinned by a super-low-carbon energy strategy. The energy needs of manufacturing must be supplied by renewables and low-carbon sources, particularly given that the manufacturing processes demanded in EV production cost up to one-third higher than those for an internal combustion engine vehicle.
Energy strategy is a crunch area for the UK and, ultimately, a deal breaker. UK electricity prices are 68% above the EU average, according to data from the Department for Business, Energy and Industrial Strategy in 2018, having risen by 55% since 2010. It is a seriously burdensome premium that the manufacturing sector has to pay. A 2018 University College London report found that our European neighbours had reaped the benefits of better interconnections, more cross-border trading and long-term supply contracts. Although the Prime Minister announced in the last 24 hours more offshore wind-generation capacity, we need to embrace more onshore wind, to seriously drive down energy costs.
I turn to network and planning and the importance of delivering energy locally to manufacturing and to the consumer. The present infrastructure is far from adequate. Significant and urgent investment is required to create an accessible, ubiquitous and interoperable network of public electric charging—likewise for natural gas and hydrogen refuelling points—so that consumers find it as easy as filling up from a petrol pump.
National Grid says that net zero will require significantly higher levels of electricity generation. In one scenario, it forecasts that by 2050 we will require almost three times more capacity than we have today. Even in the slowest decarbonising scenario, it foresees a 75% reduction in total energy demand for road transport, which is really positive. Although hydrogen will play a role, electrification is key to the decarbonising of transport, with at least 60% of all road transport being electrified in National Grid’s forecasted scenarios.
Critical to this is a massive increase in the number of charge points, which will require a strategic national plan, delivered locally. I appreciate that the Government announced Project Rapid 12 months ago, with a £500 million investment. According to Frost & Sullivan’s analysis for the Society of Motor Manufacturers and Traders, however, a total of 7 million charge points will be needed by 2030, of which just under 2 million would be public. By 2035, the requirement will increase to a total of just under 12 million.
For motorway travel, 7,000 150 kW charge points will be needed in motorway service areas. According to the electric vehicle charging app Zap-Map, the UK currently has only 19,000 on-street charge points. That means we will need to install more than 500 chargers across the UK every day to meet our 2035 target. Although those numbers seem huge, they are what is needed if we are to address consumer perceptions and recharging fears. According to a recent Savanta ComRes survey on behalf of the Society of Motor Manufacturers and Traders, 44% of car owners are discouraged from buying an EV because of a perceived lack of local chargers. If we are to meet this challenge, Governments at every level need to work with the private sector and the local energy distribution networks, and in partnership with charge point providers such as Tesla, BP Chargemaster and others, to deliver the EV charging infrastructure.
According to the Renewable Energy Association, the number of companies developing charging networks in the UK has increased significantly in the past 24 months. Few of the UK networks—major or minor—are members of interoperability platforms, which stands in contrast to other countries, where that is rapidly becoming the norm. The Netherlands is probably one of the best examples. One of the solutions is interoperability or roaming platforms, which would allow the consumers of individual charge point operators to charge on other networks that are also associated with that hub. The hub would monitor EVSE—electronic vehicle supply equipment—usage and could settle payments between operators. The roaming platform does that for a small fee.
A second solution is peer-to-peer arrangements, which involve the negotiation of direct commercial relationships and agreements between chief procurement officers, to allow for a consumer to use multiple networks while using a single app or account without the involvement of a roaming platform.
We also need to ensure that we deliver smart charging. National Grid has estimated that 80% of electric vehicle drivers will use smart charging by 2050, which will help balance almost half of the UK’s energy demands brought on by the move to zero-emissions driving. Imperial College has done a huge amount of work with Nissan looking at this issue, and there is a massive opportunity for the parking of electric vehicles to be a huge energy storage for the grid.
Let me turn to the strategy for heavy goods vehicles and large vehicles, because it is very easy to talk simply about passenger vehicles. I appreciate that the Prime Minister has talked about massively investing in hydrogen, but we are falling behind other nations on hydrogen mobility. In Germany and elsewhere, a number of buses are being run on hydrogen. I appreciate that plans are afoot in certain parts of the UK for this to be introduced, but we need to get it behind it urgently. I know there is news of a hydrogen hub in the Tees valley, which is really welcome, but the South Korean Government have set a target of 200,000 hydrogen vehicles and 450 hydrogen refuelling stations by 2025. Why can the UK not set similar ambitions?
Let me finally turn to education and skills, because while we need strategies, we also need to ensure that we have the skillset to deliver them. That will involve not just higher education, which is always highly regarded, but the development and supply of skills through our further education colleges, which is critical, as is developing science, technology, engineering and maths subjects through our schools. That applies not just to the research and development of new technologies; it also means providing training for those who will maintain and service the huge number of vehicles that will come on to the UK’s streets, whether they be passenger cars, commercial vehicles or heavy goods vehicles.
This is a really important sector for the UK economy. It is worth £82 billion in turnover and £20 billion in additional value to the UK economy. It is the UK’s largest exporter of goods, accounting for 13% of all UK goods exported. It employs 168,000 people in manufacturing, supporting 820,000 people across the wider automotive sector. It is critical that we invest heavily in this incredibly precious industry, and show support and direction.
The Government have made great progress in encouraging EV ownership, through VAT exemptions and the plug-in car grant, but more needs to be done in the rapid development of charging infrastructure, as well as in encouraging consumers to consider switching over to electric vehicles. We should consider tax breaks; free or reduced parking costs; generous, long-term plug-in grants; and readily available, reliable, fast EV charging on streets and in shopping centres and at places of work. We need better battery tech and more ambition from the Government to secure the giga-manufacturing plants in the UK. I and other west Midlands MPs wrote to the Government to see if we could secure investment in a gigafactory in Coventry, to support companies such as Jaguar Land Rover and, of course, Aston Martin.
The grid and direct district network operators need a clear road map from the Government for the transition in electricity use. We need a joined-up, multi-sector strategy and road map that targets long-term, positive consumer messages on all technology choices. It is Labour’s policy to end the sale of new petrol, diesel and hybrid cars and vans by 2030. We talked about the electric car revolution at the last general election, with our plans to invest £3.6 billion in EV charging networks and £2.5 million in interest-free loans for the purchase of electric vehicles, saving buyers up to £5,000. The Government need to get behind the agenda urgently.
We need new cleaner diesel as part of the mix, because without that, we will not ensure a managed transition. Diesel, together with plug-in hybrids, battery electric vehicles and hydrogen-powered vehicles are, as Al Gore said, the solutions that are there. We need a managed transition, which is critical in ensuring that manufacturers and consumers are not left high and dry by legislation, and Government policies that impact on the value of their investments or purchases. A willingness and, above all, an ability to invest is premised on the immediate profitability and future returns, but the sector needs a coherent industrial strategy, conjoined with the market strategy, underpinned by major public investment in infrastructure, in parallel with the private sector. Together, we can achieve that ambition of delivering zero-carbon vehicles by 2030 or 2035.
Mr Clive Betts (in the Chair)
We have seven Members on the call list, so that is three minutes each. I will have to enforce that, as the wind-up speeches will start at 5.20 pm. I call Tom Randall.
Kerry McCarthy (Bristol East) (Lab)
It is always a pleasure to see you in the Chair, Mr Betts. I congratulate my hon. Friend the Member for Warwick and Leamington (Matt Western) on an excellent and comprehensive speech. As he said, fuelling vehicles through alternative means will be vital if we are to meet net zero, and there are exciting developments in the field.
I confess that I was a sceptic about the role that alternative fuels would play in significantly reducing carbon emissions from aviation. It seemed that often they were put forward to deflect discussion of the demand for flights. However, since taking up my current role as shadow Minister for green transport I have spoken to a lot of firms in the sector, such as Velocys, which will be producing sustainable aviation fuel sourced from waste in the UK, and the Electric Aviation Group, which hopes to have hybrid electric planes operating in UK skies by the end of the decade. It is not the only answer to rising aviation emissions, but it is part of the mix. I have discussed alternative fuels with Maritime UK, and we are closely watching ongoing and planned trials of battery-fuelled and ammonia-fuelled shipping in Scandinavia.
Electric and waste biofuel buses are already on our roads, including the biogas buses in Bristol. However, they need additional support, particularly now that the bus industry is struggling with collapsing revenues because of the pandemic. The same is true for rail firms, which want to move away from dirty diesel rolling stock. However, they have been failed by the Government on electrification and need support to develop or purchase trains fuelled by renewable alternatives. We also need sectoral support for aviation, conditional on climate action. Many others have spoken about hydrogen, and I do not have time to go into that now.
On electric vehicles, recently, along with my colleagues from the shadow Business team, my hon. Friend the Member for Southampton, Test (Dr Whitehead), who is replying to the debate today, and my hon. Friend the Member for Greenwich and Woolwich (Matthew Pennycook), I wrote to the Transport Secretary calling on the Government to bring forward the planned phase-out of petrol, diesel and hybrid cars and vans to 2030—at the moment, the manifesto commitment is 2040—and plans to make that transition smooth and feasible. That is important not just to meet our carbon objectives, but to support our car manufacturing sector. I do not quite agree with the hon. Member for Rother Valley (Alexander Stafford) that we have missed the opportunity to develop electric vehicle production in the UK. We also need to think about electric bikes and electric cargo bikes. We used to be so good at producing bicycles in this country, and I think we need to do more of that.
We have only 5% of the charge points that we need if we are to stick to the 2040 target and have half of all new car sales represented by zero-emission vehicles by 2030. If we bring that date forward to between 2030 and 2032, we will have to accelerate installation of those charging points. I hope the Minister can reassure us on that point.
Mr Clive Betts (in the Chair)
We now move on to the Front Bench Members, who I am sure will be equally co-operative. I am getting ahead of myself. Anthony Browne, you have sat there patiently.
Anthony Browne (South Cambridgeshire) (Con)
Thank you, Chair. I thank the hon. Member for Warwick and Leamington (Matt Western) for securing a debate on this important issue. We are all committed to combating climate change and getting down to net zero. As chair of the all-party parliamentary environment group, I spend a lot of time pushing for that. When I was environment editor of The Observer and The Times more than a decade ago, electric cars were just a pipe dream. I drove some early models, but they are now a reality. I have long seen the internal combustion engine as a dirty, smelly and polluting Victorian technology. The sooner we see the back of it, the better.
I only have two and a half minutes, and there are eight things I think the Government should do. I will have to keep this brief. First, we should commit to 2035 rather than 2040. It is the minimum under the Committee on Climate Change recommendations and the Intergovernmental Panel on Climate Change recommendations for meeting net zero by 2050. Indeed, we should consider whether we can bring it even further forward. There is huge industry support for that, from a wide range of different people, and it will probably be cheaper for motorists in the long run.
Secondly, we should continue the subsidies for the schemes. They are not self-sufficient yet, and we definitely need to carry on providing the money to help people to buy them, install charging points and so on. I know the Government are doing that, but we should not turn off the taps just yet.
Thirdly, the Government should provide real clarity, certainty and absolute conviction to industry that this is the direction we are going in. For the big investment decisions from energy companies on charging points and so on, there has to be a real sense of national mission that we can all buy into.
Fourthly, we must make sure that charging is provided for all properties. Consultation is taking place about requiring charging points in new build, and that should be mandatory. Huge numbers of houses are being built in my constituency of South Cambridgeshire, and they should all have charging points, otherwise they will be outdated within a decade or so. How do people living in flats access charging points? Some 30% of homes do not have driveways. Are we saying that people in those homes should carry on driving petrol cars? Clearly not.
Fifthly, we need to get from 18,000 charging points to more than 200,000. That must be done in a way that is as consumer-friendly as possible; we must make sure that they are interoperable and put them in supermarket car parks, or in all car parks. Sixthly, we must unleash the private sector. That is happening already, but I have followed very closely the roll-out of cable, mobile and 4G. That was done by unleashing the dynamism and investment of the private sector, and we should carry on doing the same here.
Seventhly, do not make us an island that is incompatible with the rest of the world. We have different electrical sockets from everywhere else, which is an accident of history, but let us make sure that when drivers leave the UK and drive over to France, they can still use their electric cars.
Eighthly, as the hon. Member for Warwick and Leamington said, smart charging is the way to go. I know that we are doing that but it should be key. It improves energy efficiency, reduces costs and is good for our energy resilience.
Mr Clive Betts (in the Chair)
I thank all Members for their co-operation, including Anthony Browne. Over to the Front Benchers.
Alan Brown (Kilmarnock and Loudoun) (SNP)
I hope that I will not disappoint given that you were so keen to get to me earlier, Mr Betts.
I, too, congratulate the hon. Member for Warwick and Leamington (Matt Western) on securing the debate, as well as those who have contributed to it. It is quite clear that topic is important and needs a lot more time than the hour we have today.
We keep hearing about a green recovery in the UK being “world leading”, but for that to be a reality, we need coherent, interlinked strategies, and the policies to achieve them. That means the publication of the overdue energy White Paper, the national infrastructure plan, a heat decarbonisation plan, and a possible update to the transport decarbonisation plan. I hope that the Minister will provide an update on those and how they will be implemented, now that the Budget and spending review have been cancelled.
Although I will concentrate my speech on land transport, there are, as Members have said, opportunities for the production of sustainable aviation fuels—SAF—so will the UK Government provide the support that is needed to top up the private investment that is actually available so that we get a number of production plants up and running in the UK? Will the Government look at the renewable transport fuel obligation to further incentivise the use of SAF?
With road and rail, the main choices are electricity and hydrogen. Hydrogen is an obvious solution for HGVs, and it is part of the mix for trains and buses. That requires coherent hydrogen production policies. The Prime Minister’s announcement today about increasing the deployment of offshore wind is welcome, but that needs to be aligned with the production of green hydrogen. Blue hydrogen also needs to be part of the mix in the short term, which requires the implementation of carbon capture and storage. Will the Minister tell us when Peterhead will finally be given the proper backing to get up and running?
In the north-east of Scotland, Aberdeen has led the way with the introduction of 15 of the world’s first hydrogen-powered double-decker buses. The Scottish Government invested more than £3 million in that project, but another £8.3 million actually came from the EU. Where will the replacement funding come from for that type of scheme? For Aberdeen, another 10 hydrogen-fuelled buses will be procured, and they will be constructed by Wrightbus, protecting jobs in the UK. The Transport Secretary promised hydrogen bus-only town trials, but we are still waiting for the outcome. Where has he been, and when will the UK Government catch up with what is happening in Scotland? Will there be alignment with the manufacturers of hydrogen buses in the UK?
The Scottish Government have awarded £7.4 million to bus operators through the Scottish ultra low emission bus scheme. That will result in the manufacture of 35 electric buses by Alexander Dennis Ltd. Again, the UK is lagging behind on a proposed electric bus town. When will that go live, and will it result in orders for Alexander Dennis Ltd, too?
I welcome the fact that the UK Government are trialling the first hydrogen train in the world. That might make up for their dereliction of duty on electrification and the previous Transport Secretary’s obsession with hybrid diesel trains. The Scottish Government have published a real decarbonisation strategy with an end date of 2035, but Network Rail has only an interim programme in the UK targeting 2050. When will we get a final determination that is ambitious enough?
One simple ask on a hydrogen strategy is a starting point of £11.4 million for a clean fuel metrology centre in East Kilbride. Although we do not think about it, we actually need a measurement and calibration centre. That East Kilbride proposal would be a world first. Will the Minister update us on when BEIS will give the go-ahead for that centre?
We have heard about the UK being world leading on domestic electric vehicles but, in fact, it is not. As my hon. Friend the Member for Paisley and Renfrewshire North (Gavin Newlands) said, the UK needs to match the Scottish Government’s ambition. We really need to move on this. We need large investment. As hon. Members have said, we need a greater roll-out of the charging infrastructure network. I will tell the Minister how that can be paid for: cancel the plan for two nuclear power stations that is going to cost £40 billion. That will allow the upgrade in infrastructure, greater investment in renewables and a bright and green future, with a proper green industrial revolution.
Mr Clive Betts (in the Chair)
I now call Dr Alan Whitehead to speak for the Opposition—five minutes again, please.