British Steel: EU Emissions Trading Compliance

David T C Davies Excerpts

Wednesday 1st May 2019 Commons Chamber

[Greg Clark]

The position we find ourselves in is through no choice of the UK Government. It was the Commission that took the decision to suspend the availability of allowances. We are having constructive discussions with the Commission about the release of the allowances and that is why this arrangement is described accurately as a bridging arrangement. We want and expect to be able to have access to those allowances. Participation in the ETS is not a matter of entitlement. It is not available to countries outside the European Union without special designation, but the discussions we are having are constructive.

On liabilities and the nature of the transaction, I have written to the hon. Lady in her capacity as Chair of the Select Committee. I am very happy to follow that up and to give whatever evidence she needs to scrutinise the transaction.

[David T. C. Davies (Monmouth) (Con)]

I welcome the announcement of the support for British Steel, but with the greatest respect, what is the Secretary of State doing to support other UK-based steel companies that have already paid to meet their commitments and could now find themselves at a commercial disadvantage as a result of the action he has taken? Has he taken account of that and will he be able to offer support to other UK-based steel companies?

[Greg Clark]

We of course make an assessment of the consequences. I think my hon. Friend will see, when he looks at the advice, that it seemed to be the right and responsible decision to ensure that this huge liability of over half a billion pounds did not suddenly crystallise in British Steel. We have a strong relationship with the steel sector. I might mention the industrial energy efficiency fund, worth £315 million. The steel sector is a prime example of how working to improve the efficiency of the technology deployed can help with our emissions reduction targets and reduce the costs of the sector. We are working with all companies in the sector to make that a reality. I know that, in his constituency capacity in south Wales, he takes a big interest in that.

Climate Change Policy

David T C Davies Excerpts

Tuesday 23rd April 2019 Commons Chamber

[David T. C. Davies (Monmouth) (Con)]

Does the Minister agree that no matter how strongly people feel about this issue, they do not have the right to block roads or to encourage students to take unauthorised absences from school?

[Claire Perry]

To peacefully protest is a fundamental part of our democracy, but I do think that forcing people to not take energy-efficient public transport on their way home, creating disruption for those going on a hard-earned holiday, and causing our excellent police force to give up their leave over Easter—I want to pay tribute to the police—should make people think long and hard about the tactics they are using.

Honda in Swindon

David T C Davies Excerpts

Tuesday 19th February 2019 Commons Chamber

[Greg Clark]

I am very proud of our automotive industry. It has all the attributes the hon. Gentleman ascribes to it. I am proud of the workforce. I am proud of the workforce in Swindon in particular. This is no reflection on their calibre, their commitment and their ingenuity. Far from the automotive industry being an industry that we can or should do without, it is one of the prime opportunities we have. If we have some of the best brains on the planet looking at connected and autonomous vehicles, and inventing the next generation of batteries, why on earth should we not make the products of that ingenuity in this country? I am determined that we should do so.

[David T. C. Davies (Monmouth) (Con)]

Given that we have decided to ban all their vehicles from our roads by 2040 and that many Members on both sides of the House have called for that ban to be brought forward, what does my right hon. Friend think is more surprising: that some of these companies are thinking of relocating elsewhere or that so many MPs in this House seem to want to put the blame on Brexit?

[Greg Clark]

What I would say to my hon. Friend is that we are talking about Honda’s plant in Swindon and that most of its output is not diesel but petrol vehicles, which go all around the world. Automotive companies are increasingly reflecting the much more rapid global shift to new powertrains than was expected a while ago. I think advantage comes from being in the vanguard of that change, rather than being a laggard. That is why we, in the industrial strategy, are determined to make sure that we are at that leading edge and can be an example to the rest of the world.

Energy Policy

David T C Davies Excerpts

Monday 25th June 2018 Commons Chamber

[Greg Clark]

The hon. Lady will know, as Chair of the Business, Energy and Industrial Strategy Committee, that the Government’s programme of renewables has resulted in the biggest reduction in the cost of the deployment of renewables that we have seen in this country, and that deployment has increased threefold. The success of that strategy is evident. I was asked by many Members, the Welsh Government and many businesses to make sure that every aspect that could contribute to a value-for-money case had been considered —the impact locally, the prospects for exports and the prospects for innovation—and it was right to do so and to leave no stone unturned. I think that that was the right approach, and when the Select Committee scrutinises the decision, I think it will regard the process as having been exhaustive and rigorous.

[David T. C. Davies (Monmouth) (Con)]

Does my right hon. Friend agree that the relentless criticism by environmental groups and Opposition Members of the £92.50 per megawatt-hour strike price for Hinkley—not least in this House a few weeks ago—has made it virtually impossible for any Government ever to agree to pay a higher strike price than £92.50, and that this project was coming in at a significantly higher price, according to the person responsible for it?

[Greg Clark]

I saw the evidence given to the Committee inquiry chaired by my hon. Friend and the hon. Member for Leeds West (Rachel Reeves). He is right that we made a commitment, in approving Hinkley Point C, that future projects had to come in at a lower price. I think it is the case that evidence to the inquiry cited a strike price on a comparable basis of not £92.50, but £150, which demonstrates the force of my hon. Friend’s point.

Oral Answers to Questions

David T C Davies Excerpts

Tuesday 12th June 2018 Commons Chamber

[Claire Perry]

Having grown up on one side of the Bristol channel and seen the second-highest tidal range in the world on an almost daily basis, I will take no lessons on the value of tidal and marine technology. As guardians of public money, it is absolutely right that we make investments that deliver the right decarbonisation and the right value for the taxpayer. The hon. Gentleman should not rely on leaks and assume that they are Government information. That announcement will come in due course and the House will be the first to know.

[David T. C. Davies (Monmouth) (Con)]

Does my right hon. Friend agree that the recent announcement of support for Wylfa underpins the Government’s commitment not only to reducing emissions, but to economic growth, not least in Wales?

[Claire Perry]

My hon. Friend is right. I should clarify that we are entering commercial negotiations—a deal needs to be done—but we should make a virtue of the fact that we have one of the most diversified energy supplies in the world and one of the lowest-carbon energy supplies. We have also managed to get ourselves off coal, which other countries long to do.

Nuclear Power

David T C Davies Excerpts

Monday 4th June 2018 Commons Chamber

[Greg Clark]

My hon. Friend tempts me to make a different statement from the one I made, but I note and have heard before his consistent advocacy of the benefits of that project to his constituency.

[David T. C. Davies (Monmouth) (Con)]

Has my right hon. Friend noted a cross-party view in the House that £92.50 is the absolute maximum we should be paying for energy generation, and will this feature in his deliberations on further energy projects?

Office for Students: Appointment

David T C Davies Excerpts

Monday 8th January 2018 Commons Chamber

[Joseph Johnson]

Mr Young’s work on behalf of disadvantaged and disabled students speaks for itself. He has championed inclusion in the educational institutions that he has set up. I cannot speak for the content of specific articles or tweets because, frankly, there are too many, and he has apologised for any offence he has caused, but I think that we should judge him by what he does—more so than we are currently doing.

[David T. C. Davies (Monmouth) (Con)]

Will the Minister confirm that Toby Young has never used social media to tweet bomb threats against rival politicians, unlike one member of the Labour party, who is named in the newspapers today, and that some of the outrage is little more than an extension of the “no platform” policy used to drive anyone with a right of centre view out of the university sector?

Oral Answers to Questions

David T C Davies Excerpts

Tuesday 12th December 2017 Commons Chamber

[David T. C. Davies (Monmouth) (Con)]

16. Does my hon. Friend agree that, notwithstanding his comments, wind energy requires a subsidy, realignment of the national grid and extra money for back-up sources when the wind is not blowing? Does that not mean that the electricity will be far more expensive than that which is produced by gas or coal?

[Richard Harrington]

The facts are that the—

Paris Agreement on Climate Change

David T C Davies Excerpts

Wednesday 7th September 2016 Commons Chamber

[Madam Deputy Speaker]

We will leave the point as to whether it was a quote or a misquote, but I am sure that the hon. Gentleman will temper his language.

[David T. C. Davies (Monmouth) (Con)]

On a point of order, Madam Deputy Speaker. I am not the least bit offended by the hon. Gentleman’s language, but if he is allowed to describe green policies in that fashion, I want to clarify whether I will be allowed to do the same.

[Madam Deputy Speaker]

No. I am grateful to the hon. Gentleman for his making his point of order, because the reason for my intervention was to ensure that the rest of the debate will see temperate language that we would all be happy to quote in future.

[Barry Gardiner]

Thank you, Madam Deputy Speaker.

This is interesting because the hon. Member for Monmouth (David T. C. Davies) is one of those who believes that in meeting their climate change commitments the Government are wrongheaded and that man-made climate change is somewhat overblown as a hypothesis. He is, in effect, a climate change denier—[Interruption.]

[David T. C. Davies]

Up until that point, the hon. Gentleman was quite right and I was nodding. I have never ever denied that the climate changes. In fact, on every single occasion that I have spoken on this subject, I have made the point straightaway that of course the climate changes, but that it has been changing for a lot longer than 250 years. The real deniers are people like the hon. Gentleman who seem to deny that the climate changed prior to the industrial revolution.

[Barry Gardiner]

I was of course referring to the hon. Gentleman being a denier of anthropogenic climate change, and he knows that.

However, there are sane heads who understand that when the world’s largest superpowers ratify a climate change treaty that commits the world to a net carbon future by the second half of this century, it is time to do what President Obama said last week and

“put your money where your mouth is.”

Last year, global investment in low-carbon technology was $286 billion. The problem is that investment in developing countries outpaced that in richer nations. We are locked in a low-carbon race and we are losing. The reason I want us to get on and ratify is not because Paris is some sort of totemic environmental symbol, but because political leadership sends a strong signal to attract investment. Countries with a clear policy framework are the ones that attract investment. Countries with a stable policy framework attract investment. The UK has had neither over the past few years.

On solar, the Government plan this month to hike the tax on businesses with rooftop solar installations through a six to eight times increase in business rates. In 2015, they cut all solar subsidy for commercial installations of over 5 MW and reduced the subsidy for the rest by 65%. The Government’s own figures show that that has resulted in a 93% fall in UK solar deployment and the loss of more than 12,000 jobs in the industry.

On wind power, the Government decided to end all subsidy for onshore wind farms despite them being the cheapest source of renewable power. For offshore wind, they took away all investment certainty by announcing that they would extend the levy control framework only to 2021.

On biomass, I wrote to the Secretary of State only a few days ago to ask why regulatory changes to the tariff structure of combined heat and power biomass plants were rushed through this summer, using secondary legislation to amend the renewable heat incentive without proper consultation. No impact assessment was made of the risk to business, and trade associations estimate that £140 million of investment is now at risk.

On carbon capture and storage technology, the Government broke their manifesto promise, cancelling £4 billion of promised finance—the latest £1 billion was cancelled last year just six months before it was due to be awarded, sinking the White Rose and Peterhead projects.

On energy efficiency, the Government ditched the zero-carbon homes policy and finally scrapped their green deal policy despite having no idea about how to replace it with other household efficiency measures.

On transport, the Government reduced the vehicle excise duty incentives for low-emissions vehicles. Is it any wonder that in just four years we have sunk from fourth to 13th in the Ernst and Young index of the best places for investment in low-carbon industries?

Just to make the investment picture complete, they took the quite monstrous decision to sell off the green investment bank. A bank that was precisely set up because there was a market failure that the private sector simply could not address. By abolishing the GIB, they are now prepared to starve low-carbon industries in the UK of the investment that they need at a critical phase of development.

However, not all parts of the energy nexus are being hit by this Government. In 2013, they announced that fracking companies would pay half the tax paid by conventional oil and gas producers. The then Chancellor called the tax regime the

“most generous for shale in the world”.

CCS, commercial solar, business rates on rooftop solar, onshore wind, offshore wind, biomass, the levy control framework, the green deal—is there any part of our energy sector that I have not mentioned? Oh yes, nuclear. Hinkley—oh dear. Dithering, delay, incompetence and an overpriced contract have led to a contract for difference that will now cost the bill payer, not the Government, not the £6.1 billion originally calculated by the Government but the £30 billion as determined by the National Audit Office.

The Hinkley project has already been delayed for eight years, and the Prime Minister has now thrown in into chaos. Two and half years ago, the Government should have reviewed the project on grounds of cost. To do so after the EDF board had taken a final knife-edge investment decision is to show a level of contempt for investors in our energy infrastructure and a lack of understanding of how company boards actually take decisions, sending out the most damaging message and turning investors away from the UK as a market of preference for low-carbon investment.

--- Later in debate ---

[David T. C. Davies (Monmouth) (Con)]

I begin by welcoming the new Ministers and indeed the new Department. I am very pleased at the fact that industrial strategy is going to be a huge part of what is going on. I think it is impossible to separate industrial strategy from climate change and energy.

With the greatest respect to Ministers, experienced though they are, I suggest that when their teams of advisers and experts tell them that the temperature is rising directly as a result of carbon dioxide, they should merely deploy the scepticism and intelligence that I know they have and ask a few pertinent questions. They should at least try to get some rational answers before embarking on decisions that will have a huge impact on industry, particularly energy-using industries such as the steel industry, which is an important one for me.

I do not intend to speak for too long today, but every time I speak on this issue, I deliberately and repeatedly make the point that I accept climate change. I have never tried to deny climate change; in fact, I have never met a scientist who does. The climate has always changed, and the ice age is testament to that. Those changes have gone on over the course of millions of years, and over the last 2 million years, we have seen ice ages usually lasting about 100,000 or so years, followed by interglacials, which are usually about 10,000 to 12,000 years. We are possibly coming towards the end of an interglacial at the moment, so we might want to turn our thoughts to what will happen when the earth inevitably starts to get cooler, as it will.

Of course I do not deny that the climate will continue to change; no sensible scientist has ever done so. The point I always make is that the climate change we have seen over the past 250 years is not particularly exceptional. Although it is of course true that carbon dioxide is a global warming gas—there is no doubt about that either—and that if we have begun to emit more carbon dioxide, it follows logically that it must have had some effect on the climate, that does not mean that it is responsible for the relatively small increase in temperature seen over the past 250 years.

I believe that the hon. Member for Aberdeen South (Callum McCaig) said that the temperature had increased by about 1°, and in common with many other commentators, he has linked that directly to increases in carbon dioxide emissions. In fact, the temperature increase that is generally agreed on—it is, of course, open to question—is 0.8°, but even the Intergovernmental Panel on Climate Change recognises that a significant amount of that is not due to man-made carbon dioxide emissions. The first question that I would put if I were ever to become a Minister in the Department—which I accept is probably an unlikely proposition—is, “What percentage of that 0.8° has come about as a result of man-made carbon dioxide emissions, and what percentage is due to the natural forcings that we know are there?”.

I have mentioned the ice ages and the interglacials, but over the last 2,000 years there has been a well-documented series of climate changes that have had nothing to do with carbon dioxide emissions. We know, for example, that 2,000 years ago, when the Romans ruled Britain, there was what was called a Roman optimum, a warmer period. That was followed by the dark ages, when things were cooler. There was then a medieval warming period during the Renaissance, which was followed by what was commonly referred to, and scientifically recognised, as a “little ice age”. That came to an end in about 1800, which, coincidentally, is when we started to industrialise.

Another important question that I would love to put to experts—in fact, I have put it to experts on many occasions, but have never received a rational answer—is, “How much of that 0.8° increase in temperature is due to the fact that the temperature was warming anyway because we were coming out of a particularly cool period, when the Thames”—just outside the House—“used regularly to freeze over so solidly that ice fairs could be held on it?” Some of that warming is clearly natural.

If people are still not convinced, we can look at the correlation, or rather the lack thereof, between carbon dioxide emissions and the temperature increases that have taken place since industrialisation. If it is the case—as some of the more alarmist commentators would have it—that this 0.8° increase has occurred directly as a result of carbon dioxide emissions, it would logically follow that one could correlate a line between carbon dioxide emissions that have taken place since, say, 1800 and temperature increases, but obviously, if we look at the graph, we find that there is no such correlation. We see that over the last 250 years there have been periods, once again, of warming and cooling, regardless of carbon dioxide emissions. In the first part of the 20th century, for example, there was a significant warming. From 1940 until about 1970, or probably a bit later, there was a significant cooling, which led to people beginning to suggest—

[Dr Whitehead]

indicated dissent.

[David T. C. Davies]

The hon. Gentleman shakes his head, but that is a fact. There was a cooling from the 1940s onwards. That is why, when I was growing up in the 1970s, people were worried that the next ice age was coming.

From the mid-1970s until about 1998 there was a significant amount of warming, but from 1998 until now there has been no statistically recognisable warming. People keep referring to the third hottest year on record, or whatever it is, but the reality is that when we look at the actual temperature increases, we see that they are absolutely minute. They are almost impossible to detect. Scientists who are asked about it will also have to admit that the margin for error within those increases is much greater than the increases themselves. Given the level of increase that we are seeing, it is perfectly possible to explain it away, because we are not comparing like with like. We are using slightly different temperature gauges, the areas in which we are using them have moved, some of the areas that they are in have changed over the years, and they can be subject to something called the urban heat island effect or to other natural factors. So there has not really been an increase since 1998.

Members may shake their heads, but I have raised this with the Met Office, and also with Professor Jim Skea. Scientists refer to it as the Pause, and they have come up with numerous explanations for it. I have heard about volcanoes, for instance, and the heat going into the ocean. At a meeting in this building, Professor Skea suggested that a pause over 16 or 17 years was statistically insignificant, which prompts an obvious question: if 17 years of temperatures not rising are insignificant, why are 30 or 35 years of temperatures increasing slightly so significant that we have to make radical changes to our economy and our industry to try and tackle that?

[Barry Gardiner]

Of course I have not dismissed the possibility that the hon. Gentleman might be right and that all the meteorological experts in the world are simply mistaken, but does he accept that if his thesis that there is natural as well as anthropogenic warming is correct, we are in a much worse position than we had thought, and therefore anything we can do to minimise the anthropogenic causes becomes all the more important, rather than less so?

[David T. C. Davies]

I do not of course dismiss the possibility that the experts may be right. I have never said they are wrong; I have merely suggested that they ought to be able to answer some fairly basic questions if they expect us as policymakers to go ahead with policies that are going to be profoundly unpopular with the public and which, in many cases, the NGOs that support those policies will not support the consequences of—I will come back to that. The point the hon. Gentleman is making is that if some of this warming is natural, the amount of warming that is not natural is that much greater in terms of the percentage of CO₂ that has caused it. [Interruption.] Well, there is another issue that I am tempted to go into, but I have been asked by the Whips to keep it short and I will respect that, and that is whether or not this is a logarithmic increase. In other words—[Interruption.] Yes, I am getting looks from all around. In simple terms, if X amount of CO₂ has caused Y amount of warming, would 2X of CO₂ cause twice as much warming? People seem to have made the assumption that it would, but of course, in nature things often do not work that way.

Let me return to the Paris agreement. It talks about limiting temperature increases to about 2° of what they were in pre-industrial times. With due respect to the Minister, which pre-industrial times is that? I do not mean to look angry, but which times is he talking about? Presumably 1800 is about the base figure, but pre-industry goes on for about 4 billion years longer than that. We could quite easily go back a few years further and say 2° above temperatures in the medieval warm period, when they were around the same level as they are now. They were around the same temperature as they are now in the Roman optimum, too. I am probably going to mess this point up, but a Greek philosopher—I think he was called Thracius—was writing about date trees in Greece and how they could be made to grow but could not produce fruit, therefore intimating, through that, that temperatures were about the same then as now in Greece because date trees behave in the same way as they did 2,000 years ago. The point I am making is if we took as a pre-industrial basepoint the year 10 AD we could probably carry on merrily putting CO₂ into the atmosphere for quite a while yet before we hit 2° degrees above that period.

[James Heappey]

My hon. Friend is an oracle on these things. I do not share his analysis, but if he is right does he not still agree with me that a low-carbon future with its clean air and low cost is surely something to be embraced and sought anyway?

[David T. C. Davies]

My hon. Friend is making the assumption that carbon dioxide is some sort of pollutant. It is not. Sulphur dioxide is a pollutant, and we have done wonderful things in getting rid of that. Carbon dioxide is actually the elixir of life, and a small increase in carbon dioxide has a very beneficial effect on the ability of farmers to grow crops. So I do not accept the premise of my hon. Friend’s question, which is that CO₂ is a naturally bad thing.

I would of course accept that we should concentrate on making sure our air quality and environment are good. I have been a surfer for 20 years—or I was until I had children, anyway—and I strongly believe in the environment. I was a member of the environmental group Surfers Against Sewage for years. I am not some kind of lunatic who wants to tear the environment apart and build everywhere, but I do have concerns about policies that are going to be enormously costly and have an impact on businesses, including some in my area.

I suggest that Ministers should ask themselves whether they actually believe what the NGOs that call on them to adopt certain policies are saying. A good point was made earlier about nuclear power. I believe it is absolutely safe. It is very interesting that whenever anyone proposes a nuclear power station somewhere, some of the biggest supporters are the people who live in that area. In Anglesey, or Ynys Môn, the Wylfa site is being supported by Members of Parliament right across the political spectrum, including those of Plaid Cymru, who normally try and paint themselves, literally and figuratively, as the most green party of them all. When it comes to nuclear jobs, Plaid Cymru is very enthusiastic about nuclear power and I commend it for that. It is right to be so. Let us contrast that with what happens when people want to put up wind farms. I know of Liberal Democrat politicians in Wales who will bang the drum for wind farms at every opportunity until someone suggests that one should be constructed in their own constituency, at which point they come up with all sorts of reasons why that should not happen.

One of my concerns is that green groups—and perhaps the hon. Member for Brent North (Barry Gardiner)—say that global warming is the greatest threat to mankind but then oppose proposals for a nuclear power station, which could resolve some of our energy problems without creating any extra carbon dioxide. The same attitude has been shown repeatedly by green groups towards the Severn tidal barrage. I do not know whether that project would stack up economically, but from an environmental point of view it has the capacity to produce about 5% of the UK’s electricity without creating carbon dioxide emissions.

[Philip Boswell (Coatbridge, Chryston and Bellshill) (SNP)]

One word: Sellafield.

[David T. C. Davies]

The hon. Gentleman will no doubt take the opportunity to discuss that with his close colleagues in the Welsh national party, Plaid Cymru, who are incredibly enthusiastic about the prospect of a nuclear power station in a constituency that it represents in the Welsh Assembly. No doubt that will be an interesting discussion.

My concern is not so much that we are adopting renewable energy schemes, because I understand the arguments about the need for energy security and diversity, but if we go too far, we are going to end up adopting energy generation systems that will cost a lot more money. I have had a lot of emails recently from environmental groups complaining about Hinkley, saying, “Mr Davies, it costs too much. Solar power and wind power would be much cheaper than Hinkley.” I am tempted to suggest that the Secretary of State should have a look at those emails and, on this basis, perhaps cut the renewables subsidies further and bring them down below the £92.50 per MWh that we are promising for Hinkley, given that we are paying up to £150 for some offshore wind farms.

I also get frustrated when I receive emails from Friends of the Earth, Greenpeace and all these other environmental groups complaining about fuel poverty, because fuel poverty will get worse if we continue to have to pay more for our electricity because we are adopting schemes that require strike prices. Similarly, I cannot understand why Opposition Members and non-governmental organisations will not support fracking, when it is quite clear that if we get rid of our coal-fired power stations and instead use gas that is produced in this country, we can create jobs and cut carbon dioxide emissions. That is surely something that they should support.

I do not want to be a thorn in the side of Ministers. I understand many of the concerns that people are expressing, and I hope that Ministers will put the pertinent questions to the experts. I also hope that they will remember at all times that it is rising tempers about increased energy prices that have caused companies such as Tata to consider closing down in Wales. That is the big cause for concern, rather than rising temperatures, which mankind has coped with quite happily for thousands of years.