David Mowat
Main Page: David Mowat (Conservative - Warrington South)
Caroline Flint
I will give way again shortly.
Whatever one thinks of the British weather, we are not short of wind. Apparently, we are the windiest country in Europe, and we should be a world leader on wind energy, onshore and off, but last year there was a 40% fall in the amount of new wind capacity being brought online, with only one offshore wind farm being completed.
Where we sought to support offshore wind manufacturing by establishing a £60 million fund to attract investment, nearly two years—two years!—after the Government promised to support the scheme, and only after a string of critical press reports, just one project has been awarded funding. Some 98% of that budget, which Labour initiated, remains unspent. As the Select Committee noted in its report, the UK has the best marine energy resource in Europe. It has the potential to supply 20% of current electricity demand and create 10,000 jobs by the end of this decade, but this Government’s decision to close the £50 million marine renewables deployment fund and replace it with a £20 million innovation fund dented confidence and undermined certainty in the business community.
David Mowat (Warrington South) (Con)
I have listened carefully to the right hon. Lady’s catalogue of achievements by the previous Government in this area, but can she explain why, given all that, in the last year of the previous Government, we were 25th out of 27 in the EU for use of renewable energy? Furthermore, in 2010, that decreased, which is extraordinary.
Caroline Flint
We doubled renewable energy generation under the Labour Government. We established Britain as a world leader in offshore wind capacity. I think I am right in saying that we were at the top of the league in investment. Was there more to be done? Undoubtedly, but the record that we left is being harmed significantly on a daily basis by the actions of this Government.
Mr Davey
My right hon. Friend the Chancellor would not have had to make that statement had Labour left the economy in a decent state. The fact is that we are having to clear up Labour’s deficit. Nevertheless, at the same time, we have established the green investment bank—something that it was unable to do even in the good times. That we are doing it in the difficult times shows our commitment to the environment.
That investment is already yielding real benefits. According to one survey, four out of five wind and marine energy companies are planning to hire more staff by this time next year. Many of those companies are small or medium-sized businesses, while many operate in areas that have otherwise struggled to attract investment. All are helping to rebalance and rebuild our economy, and hasten the low-carbon transition. For example, Evance Wind Turbines in Loughborough has doubled the size of its UK manufacturing facility and has expanded its work force by 25%. Sales have grown by over 200% since last January. Samsung announced plans last month for a new wind turbine plant in Fife—a £100 million investment that is expected to create more than 500 new jobs. Let us also consider Rolls-Royce, whose £400 million nuclear deal with Areva will support hundreds of highly skilled jobs, including in Rotherham. Even closer to the constituency of the right hon. Member for Don Valley, is the Don valley power project at Stainforth. It is one of the most advanced carbon capture and storage projects in Europe, and is looking to break ground in 2013, employing 2,000 people at the peak of construction and creating 200 jobs for normal operation. Those companies and many, many more are building the clean-energy infrastructure that will power Britain’s future, not just in generations to come, and not in some far off world, but in the weeks and months ahead. Some 4 GW of renewable electricity is expected to come online in the coming year—a doubling of capacity since May 2011. That is a real achievement.
A common thread running through some of the Opposition’s rhetoric concerns stability for investors. I would like to address that, because there is a difference between the parties on this issue, and it is plain for all to see. Let us take nuclear power. I am the first to admit that pushing ahead with new nuclear was not an easy decision for my party, but we have taken it, and we will do it. Let us contrast that with how Labour dithered over new nuclear, so that for the best part of a decade not a single new nuclear plant was authorised. It was the coalition that took forward the national policy statement on new nuclear, paving the way for the first new power station since 1995. However, I was grateful for what the right hon. Member for Don Valley said about nuclear power. Her strong support from the Opposition Front Bench for our new nuclear programme is welcome. It is important that we take politics out of such decisions, so I am grateful that we are making some progress.
Mr Davey
In a second.
On renewables, Labour missed chance after chance, allowing other countries to steal a march, so that when we came to office, the UK was near the bottom of the European renewable energy table—as some of my hon. Friends have said—despite our strong natural resources. We were ahead of Luxemburg—
Mr Davey
My hon. Friend is right. However, we were behind Bulgaria, Romania and the Czech Republic. We were at the bottom of the European league. This coalition Government are going to rocket us up that league. We want to ensure that our incredible offshore wind potential is realised. It was Labour that failed to do its job properly in government. If Labour had not done so, we would already have more manufacturing, more design and more added value here in Britain. Instead, we have seen manufacturers in Europe and Asia seize much of the supply chain value. In contrast, since we came to power, our policies to support manufacturing at ports and set up the offshore wind developers forum are already beginning to yield results. Foreign companies such as Siemens are now looking to invest in UK turbine manufacturing, and British companies such as David Brown are exporting technology to developers such as Samsung.
Investors and businesses want policy stability, but Labour could not deliver in government. Let us take the feed-in tariffs scheme—which Labour voted against in the last Parliament. Given an opportunity to encourage sustainable clean-energy industries here in this country, Labour dropped the ball. It should not have been necessary to review FITs, but they were not properly designed in the first place. The seeds of instability had already been planted by Labour Members. Labour’s scheme had no flexibility to change tariffs in response to the rapidly changing technology costs. As a result, 80% of the costs of FITs in 2015 will go towards paying for just 20% of the generation capacity, which was installed under Labour’s scheme. Under our new, improved scheme, we expect to get three times as much electricity generation for less than one third of the cost. When it comes to solar power, Labour is the party of the few, and the coalition is the Government of the many. There will be many more installations, and many more households will benefit. There will also be much more carbon dioxide taken out of the system.
Mr Davey
I am afraid that the hon. Lady is slightly confused. The German scheme is a personal loan scheme. Our green deal scheme is attached to utility bills; it could not be more different. The structures that she is talking about would therefore not work in the scheme that we are introducing.
The Labour Government were, frankly, equivocal about the capacity and suitability of our energy infrastructure. The coalition is therefore having to work doubly hard to compensate for the missed years. Our reform, set out in our White Paper last year, will secure our energy supplies, guarantee returns for investors and safeguard consumers from volatile internationally-set fuel prices. Critically, it will deliver energy infrastructure that will ensure Britain can evolve into a competitive low-carbon economy. We are introducing a mechanism to ensure that there is sufficient capacity, too.
David Mowat
I have been listening carefully to the Secretary of State’s remarks. He tends to use the terms “low carbon” and “renewables” interchangeably; they are, of course, not the same thing. The Climate Change Act 2008 asked us to reduce carbon, not necessarily to build renewables. In any event, will he confirm that all low-carbon sources of energy, including carbon capture and storage and nuclear, will be eligible for green investment bank funding?
Mr Davey
I am delighted to confirm that. I am sorry if my hon. Friend thinks I am interpreting low carbon as renewables, which is not our position. When we look at electricity market reform and talk about low-carbon technology, we are indeed talking about new nuclear and carbon capture and storage as well. I hope I have reassured my hon. Friend on that point.
Mr Lilley
We have absolutely no desire to have what is essentially a sub-prime bank in our area. The idea that we can boost—[Interruption.] It will be a sub-prime bank, because the Government have said that it will not accept prime investment opportunities, which will be left to the market. The bank will be able to lend only to those opportunities that are not attractive to industry—despite huge subsidies, quotas, publicity and fashion. In short, it will be able to lend only to the sub-prime opportunities, so let us hope that it is a long time coming. We do not want it in Hitchin.
The idea that we can boost productivity by replacing competitive sources of energy with uncompetitive sources of energy is so ludicrous that it is strange it has passed without comment today. We have a need for electricity generation. If we invest a certain amount of money in wind, which is four times as expensive as gas turbines, we will get for a given investment only one quarter of the electricity that we would if we relied on gas turbines. With onshore generation we will get half the electricity that we would from gas, so the idea that we can boost growth through low-productivity, high-cost industries is nonsense, and we should cease deluding ourselves that we can. It has been suggested that we might be able to generate jobs in the supply industries for those forms of energy, but it is nonsense to suppose that subsidising the use of renewable technologies automatically results in an increase in the domestic production of equipment for them. It manifestly has not; there is no reason to suppose that it should; the Government are not allowed to give subsidies to those equipment suppliers under EU rules; and in any case the record of Governments trying to pick winners is lamentable and miserable, so it is probably just as well that they cannot.
David Mowat
The thrust of my right hon. Friend’s comments—that we cannot generate jobs with lower-productivity activities—is right, but if we accept that the Climate Change Act 2008 is right also and we have to decarbonise, we reach a position whereby we ought to decarbonise ruthlessly with the cheapest option in front of us, which takes us to nuclear power rather than to some of the others.
Mr Lilley
As one of the five people who opposed the 2008 Act, I do not necessarily accept my hon. Friend’s premise, but I will for the purposes of debate, and if we are going to meet those targets we should do so as efficiently as possible. Nuclear is one of the best ways, but the cheapest of all is gas turbines, and gas might become cheaper in this country if we exploit the potential for shale gas, which has halved the cost of gas in the United States.