Green Economy

Gordon Henderson Excerpts

Thursday 28th June 2012 Commons Chamber

[Laura Sandys]

I thank my hon. Friend for his comments, and, exactly as he says, there was an emerging industry and significant Government support, which saw the opportunities that the sector could offer to our industrial policy and to energy security and resilience. On industrial policy, we also supported the car industry. In the ’80s we gave generous incentives to Nissan to attract it to the UK, and, when we look at our long-term, and now leading, role in the motor sector, we find that that has been a huge success.

So it is neither unusual nor wrong for government to incentivise energy investment or to support industrial development, and that is why I am pleased that this Government have put in place so many fiscal measures to do just that in relation to the new generation of energy sources and to investment in green technologies.

There are unfounded rumours that some in government have gone cool on the modern green agenda, but I know that not to be the case. I know that the Chancellor is committed to inward investment and to ensuring that companies such as Vestas reconsider their investment in north Kent.

I know that my hon. Friend who represents Sheerness—

[Gordon Henderson (Sittingbourne and Sheppey) (Con)]

Sittingbourne and Sheppey.

[Laura Sandys]

I know that my hon. Friend the Member Sittingbourne and Sheppey (Gordon Henderson), whose main port is Sheerness, is very keen to ensure that in the south-east we secure an important manufacturer of wind turbines.

I know that Treasury officials are totally committed, as they were to the oil and gas sector in the ’70s and ’80s, to attracting the new jobs and growth that are emerging from the fastest-growing business sector in the UK; and I am sure that all in government are focused on securing the £200 billion of funds to rebuild our energy sector in a highly competitive capital investment market, where policy certainty is fundamental to investment decision making.

All that the Government need to do to unlock those industrial opportunities is to sustain and reiterate their consistent and constant policies, with subsidies based only on proper evidence and with investment messages that resonate among the largest industrial companies in the world, such as Siemens and GE, and the large energy generators.

--- Later in debate ---

[Gordon Henderson (Sittingbourne and Sheppey) (Con)]

We will hear in the debate arguments for and against investment in renewable energy, although I can see only one person in the Chamber who is against such investment. Those on both sides of the argument would probably agree on two things: the first is that there is only a finite supply of fossil fuels, and the second is that Britain relies too heavily on foreign imports for the energy needed to power its homes and businesses.

Both factors are problems that need to be addressed if Britain is to have long-term energy security. Hon. Members have a choice: we can leave the problem for our children and grandchildren to solve in 40 or 50 years’ time, when it might be too late to find a solution, or we can get to grips with the problem now and ensure that future generations can switch on their lights.

The problems I mentioned are interlinked and can be solved only by finding replacements for the fossil fuels on which Britain has become too dependent. There are a number of options, including nuclear power, shale gas, clean coal technology, biomass energy, anaerobic digestion, ocean wave energy, tidal power and wind energy. The sensible long-term strategy would be not to major on any one of those alternatives, but to establish a national plan that draws in power from all of those sources to supplement the reserves of oil that will become increasingly scarce and expensive over the next few decades.

The advantage of establishing an alternative energy industry is that most of the components needed to generate power could be sourced in Britain. That is particularly true of the renewable energy sector. As an island, we have the advantage not only of a limitless flow of water, but also of access to all-year-round wind, particularly offshore, which leads me nicely to that part of the green economic sector on which I would like to concentrate.

Many oppose an expansion in Britain’s wind capacity. They either say that wind turbines will never produce enough electricity to make them viable, or object to the use of Government subsidies to encourage investment in wind energy, or both. I would have more sympathy for the first argument if wind turbine technology had stood still, but it has not. For instance, the new V164 offshore turbines, which are being developed by Vestas on the Isle of Wight, each generate 7 MW of electricity.

It was with deep regret that we learned one week ago that Vestas has decided not to renew its option for land at the port of Sheerness, which had been set aside as the site for a factory that would have produced the blades for the V164. That factory would have created 2,000 new jobs for my constituency, and many of them would have gone to people living in my constituency. Given that my constituency has a higher unemployment rate than the average south-east constituency—in Sheerness East, where the factory would have been built, it is more than 11%—the decision by Vestas has been another blow to the morale of my constituents.

In many ways, Vestas’ decision is surprising, because Sheerness is an ideal location for a wind turbine factory, which is why I will be working closely with Swale borough council, Kent county council and the Department for Business, Innovation and Skills to attract another manufacturer to the Isle of Sheppey. Full planning permission is in place, and we have the right infrastructure and a willing and ready work force; all we need is somebody willing to take Vestas’ place.

[Mr Lilley]

Will my hon. Friend confirm that the one thing that none of those organisations can do is offer a subsidy to anyone to come to his constituency to produce wind farm components? It might be desirable that they should—it would certainly be a better use of money than subsidising rich landowners to install wind farms—but it is not the case. Can he confirm that?

[Gordon Henderson]

I can confirm that none of those organisations can offer such a subsidy, but that is not to say that we cannot do something to attract an alternative.

[Andrew George]

The hon. Gentleman will surely acknowledge that one thing that the sector, particularly the production sector, wants more than anything else is the underbelly of a functioning sector—one where there is a market, even if only initially in the UK, and certainty. That is one thing that the Government can and need to provide.

[Gordon Henderson]

I agree, and I shall come to that in a moment. Vestas has not given any reason for its decision, so we can only speculate on why it decided to pull out of Sheerness. A few months ago, it announced that it was slowing down development of the V164 to take account of the current economic conditions and the needs of their potential customers, which is what the hon. Gentleman touches upon. As I said, though, I will return to that point later.

That slow-down has resulted in the slipping of the date for erecting the prototype VI64 from the end of 2012 to 2014. I can only assume that Vestas took the decision—quite sensibly from a commercial perspective—that it did not want to lay out more money in an option on land for which it had no need for the foreseeable future. What will happen in 2014 is anybody’s guess, and that is a big worry both for my constituents and those of my hon. Friend the Member for Isle of Wight (Mr Turner). It is still conceivable, I suppose, that Vestas will come to Sheerness in 2014, but it will only proceed with its project if it can obtain firm orders for the VI64, and no potential customers will commit to those orders until they are clear about the Government’s commitment to offshore wind energy. Currently, however, the Government’s position is not clear, so I would like it to be made clear.

That brings me to the issue of subsidies, which has been raised already. As a Conservative, I am not naturally in favour of taxpayers’ money being used to help any business. If a product is good enough, it should be able to stand on its own two feet. I accept, however, that strategically Governments often use taxpayers’ money to invest in research and development in some industries, particularly where such developments are in the national interest—the defence industry is a case in point, of course. I believe passionately that securing energy supplies into the next century is in our national interest and that it will benefit Britain if taxpayers’ money is used to encourage the development of alternative sources of energy, whether nuclear power, shale gas or offshore wind. For that reason, I will gladly support the motion.