Net Zero Emissions Target

Greg Clark Excerpts

Wednesday 12th June 2019 Commons Chamber

[The Secretary of State for Business, Energy and Industrial Strategy (Greg Clark)]

I am very grateful, Mr Speaker, for your permission to give this statement on the proposed legislation I have tabled today to end our country’s contribution to global warming. There are many issues in this House on which we passionately disagree, but there are moments when we can act together to take the long-term decisions that will shape the future of the world that we leave to our children and grandchildren.

Just over a decade ago, I was the shadow Secretary of State for Energy and Climate Change when the right hon. Member for Doncaster North (Edward Miliband) secured Royal Assent for the landmark Climate Change Act 2008. I was proud, on behalf of my party, to speak in support of the first law of its kind in the world, setting a legally binding target to reduce greenhouse gas emissions by at least 80% by 2050 relative to 1990 levels. Today, I am proud to stand on the Government side of the House to propose an amendment to that Act that will enable this Parliament to make its own historic commitment to tackling climate change—a commitment that has been made possible by many years of hard work from Members across this House of Commons on both sides, and beyond. I thank in particular Lord Deben for his leadership as chair of the independent Committee on Climate Change, as well as its members and staff, and the hon. Member for Leeds West (Rachel Reeves) and my hon. Friend the Member for Cheltenham (Alex Chalk) for their recent Bills that paved the way for today’s proposed legislation. I also pay tribute to the extraordinary work of my friend and ministerial colleague, the Minister for Energy and Clean Growth.

Today, we can make the United Kingdom the first major economy in the world to commit to ending our contribution to global warming forever. The United Kingdom was the home of the first industrial revolution. Furnaces and mills nestled in English dales, coal mines in the Welsh valleys and shipyards on the Clyde and in Belfast harbour powered the world into the first industrial age. We now stand on the threshold of a new, fourth industrial revolution—one not powered by fossil fuels, but driven by green growth and clean, renewable technologies. Once again, the United Kingdom and all its parts stand ready to lead the way. It is right that economies such as ours, which made use of carbon-intensive technologies to start the first industrial revolution, now blaze a trail in the fourth industrial revolution. Whether it is through our global offshore wind industry, our leadership on green finance, or our unrivalled research base that is leading the charge on electric vehicles, we are showing the economic benefits of how cutting emissions can help to grow our economy.

Through our industrial strategy, the UK is already forging that future, leading the way in the development, manufacture and use of low-carbon technologies. By responding to the grand challenges we have set, including on the future of mobility and clean growth, we are already creating thousands of new jobs right across the country. We are showing that there is no false choice between protecting our planet and improving our prosperity: we can and must do both.

Indeed, low-carbon technology and clean energy already contribute more than £44 billion to our economy every year. In 2017, energy-related carbon dioxide emissions in the UK reached their lowest levels since 1888. Last year, we secured more than half of our electricity from low-carbon sources. Just last month, we set a new record for the number of days we have gone without burning any coal since the world’s first public coal power station opened in London in 1882.

We have said that we will completely phase out unabated coal-fired power generation by 2025, ending the harmful impacts to our health and environment for good. Together with Canada, we have launched the Powering Past Coal Alliance, which has now seen 80 national and local governments, businesses and non-governmental organisations join together in a pioneering commitment to phase out unabated coal.

However, if our actions are to be equal to the scale of the threat, nations across the world must strive to go further still, and we in the United Kingdom must continue to fulfil our responsibility to lead the way. That is why, in October, following the latest evidence from the Intergovernmental Panel on Climate Change, the Government wrote to the independent Committee on Climate Change to seek its advice on our long-term emissions targets. Just last month, it issued its response, recommending that we legislate for the UK to reach net zero greenhouse gas emissions by 2050, taking into account our emissions from international air travel and shipping. So I am today laying a statutory instrument—in fact, it is already before the House—that will amend the Climate Change Act 2008 with a new, legally binding net zero emissions target by 2050.

Ending our contribution to climate change can be the defining decision of our generation in fulfilling our responsibility to the next, but it will require the effort of a generation to deliver it. I am grateful to all those business leaders, faith leaders, scientists and climate campaigners who have written to the Prime Minister, me and many Members in this House to express support for this landmark proposal. It will require Governments and political parties of all colours to work with all sectors of business and society. We must fully engage young people, too, which is why a new youth steering group, led by the British Youth Council, will be set up to advise the Government—for the first time giving young people directly the chance to shape our future climate policy.

The assessment of the independent Committee on Climate Change is based on the latest climate science. It drives our ability to take action on the international stage, and it considers current consumer trends and developments in technology. The committee has concluded that a net zero 2050 target is feasible and deliverable, and can be met within the exact same cost envelope of 1% to 2% of GDP in 2050 as the 80% target when that was set, such has been the power of innovation in reducing costs.

It is, however, absolutely right that we should look carefully at how such costs are distributed in the longer term, as Professor Dieter Helm recommended in his report to the Government. The Government are also today accepting the recommendation of the Committee on Climate Change that the Treasury lead a review into the costs of decarbonisation. This will consider how to achieve the transition to net zero in a way that works for households, businesses and the public finances. It will also consider the implications for UK competitiveness.

In fulfilling the scale of the commitment we are making today, we will need technological and logistical changes in the way we use our land, with more emphasis, for example, on carbon sequestration. We will need to redouble our determination to seize the opportunity to support investment in a range of new technologies, including in areas such as carbon capture, usage and storage, and in hydrogen and bioenergy.

However, as the committee also found, the foundations for these step changes are already in place, including in the industrial strategy and the clean growth strategy. Indeed, there is no reason whatever to fear that fulfilling this commitment will do anything to limit our success in the years ahead—quite the reverse. In our industrial strategy, we have backed technology and innovation, including the UK’s biggest ever increase in public investment in research and development.

The International Energy Agency’s report on the UK, published last week, found:

“The United Kingdom has shown real results in terms of boosting investment in renewables, reducing emissions and maintaining energy security”.

By doubling down on innovation in this way, we can expect to reap the benefits as we move forward to meeting this target by 2050.

I believe that by leading the world and harnessing the power of innovative new technologies we can seize the full economic potential of building a competitive, climate-neutral economy, but we do not intend for a moment for this to be simply a unilateral action. If we are to meet the challenge of climate change, we need international partners across the world to step up to this level of ambition. While we retain the ability in the Act to use international carbon credits that contribute to actions in other countries, we want them to take their own actions and we do not intend to use those credits.

We will continue to drive this, including through our bid to host the COP 26 conference. As the IEA report found last week, the UK’s efforts are

“an inspiration for many countries who seek to design effective decarbonisation frameworks.”

Just as we have reviewed the 2008 Act in making this amendment today, so we will use the review mechanism contained in the Act, within five years, to confirm that other countries are taking similarly ambitious action, multiplying the effect of the UK’s lead and ensuring that our industries do not face unfair competition.

Finally, I do not believe that this commitment will negatively affect our day-to-day lives. No G20 country has decarbonised its economy as quickly as we have. Today, the UK is cleaner and greener, but no-one can credibly suggest that our lives are worse as a result—quite the reverse. We are richer, in every sense of the word, for being cleaner, for wasting less and for cherishing, not squandering, our common inheritance.

We may account for less than 1% of the world’s population and for about 1% of global carbon emissions, but by making this commitment today we can lead by example. We can be the ambitious global Britain we all want our country to be. We can seize this once-in-a-generation opportunity to tackle one of the greatest threats to humanity, and we can make this a defining, unifying commitment of this otherwise riven and often irresolute Parliament—one that is agreed by all, honoured by all and fulfilled by all.

In the first industrial revolution, we applied the powers of science and innovation to create products and services in which this country came to excel, but which came at a cost to our environment. In this new industrial revolution, we can innovate and lead all over again, creating new markets and earning our way in the world in the decades ahead, but in a way that protects our planet for every generation that follows ours. When history is written, this Parliament can be remembered not only for the times that it disagreed, but for the moment when it forged this most significant agreement of all. I commend this statement to the House.

[Mr Speaker]

It is very good indeed to see the Minister for Energy and Clean Growth, the right hon. Member for Devizes (Claire Perry), in her place in the Chamber, and we welcome her here.

[Rebecca Long Bailey (Salford and Eccles) (Lab)]

I thank the Secretary of State for advance sight of his statement. I echo his thanks, not least to the Committee on Climate Change, and to my right hon. Friend the Member for Doncaster North (Edward Miliband), my hon. Friend the Member for Leeds West (Rachel Reeves) and the hon. Member for Cheltenham (Alex Chalk). I, too, would like to welcome the right hon. Member for Devizes (Claire Perry) back to her place.

I begin by welcoming the statement. The Chancellor of the Exchequer was just wrong, in my view, recently to exaggerate the costs of achieving net zero, and it is good to see the Government listening instead to the experts at the Committee on Climate Change. The Labour party committed to a target of net zero emissions before 2050 at its 2018 conference, and it is welcome to see the Government move in a similar direction.

Now that the Government are prepared to legislate their duty, it is now imperative that they urgently take the strategic decisions necessary. Sadly, at last week’s Prime Minister's questions, the Minister for the Cabinet Office, referring to the UK’s carbon budgets, said:

“We are not off track”—[Official Report, 5 June 2019; Vol. 661, c. 136]—

in meeting those targets at all. It is, however, a matter of fact, confirmed by the Committee on Climate Change and official BEIS statistics, that the UK is off track to meet its fourth and fifth carbon budgets. It would be helpful if the Secretary of State took this opportunity to correct the record, and to tell the House—if the Government are off track to meet their existing carbon budgets—what immediate strategic decisions he will make to ensure that the public can have confidence in the Government’s ability to meet even more stringent targets. That confidence can certainly be restored, but the Secretary of State must recognise that urgent commitments to investment and new legislation will be needed

Today’s statement is a welcome first step, but the Secretary of State has already recognised the scale of the task that lies ahead. Since 2015, when the Conservative Government secured a majority, they have systematically dismantled the policy frameworks that were designed to tackle climate change. They have effectively banned onshore wind, reduced almost all support for solar power, scrapped the zero carbon homes standard, sold off the UK Green Investment Bank, removed support for tidal power, and relentlessly pushed fracking—fracking, of all things! Moreover, there has been a 98% fall in home insulation measures since 2010.

At this point the Secretary of State will mention offshore wind, so let us be clear about that. The Government have committed themselves to bringing 30 GW of offshore wind on stream by 2030—well done!—but that is significantly less than the 50 GW that the Labour party has pledged, and dramatically less than the 75 GW that the Committee on Climate Change says we could need by 2050. Greenpeace has described the slow pace at which the Government have made contracts for difference available as “bewildering”, and analysis by Green Alliance has found that the Government are pushing the sector into a boom-and-bust cycle.

I could go on—these policy decisions have put the UK back by years—but, as climate change is still reversible, so is the Government’s track record. I am trusting the Secretary of State today to promise the House that, as one of his lasting legacies, he will turn that record around. I welcome his collegiate tone, because there are many—not least the Committee on Climate Change, the Labour party, other Members of Parliament, numerous industry groups, and energy and climate organisations—who have the ground-breaking ideas that are necessary. The Secretary of State need only reach out to those who are desperate to help him.

Achieving net zero before 2050 is necessary and affordable, and there is no need to rely on international offsets, which—let us be honest—does look like cheating. At this point, may I ask the Secretary of State whether aviation and shipping are excluded from the net zero targets, and if so, why? To achieve net zero, however, we will need huge levels of investment. We will need co-ordinated planning and new laws, and, as with any emergency, we will need significant Government intervention. I do not believe that that is ideological, or even party-political; it is just common sense, and that is why it is at the heart of Labour’s plans for ushering in a green industrial revolution.

I welcome today’s announcement, but I must ask the Secretary of State of State when he will start to act in accordance with it.

[Greg Clark]

I thank the hon. Lady for her welcome. It contained some caveats, but it was there nevertheless, and I am grateful for it.

I think that the hon. Lady should take this opportunity to reinforce the joint determination—which is noted around the world—of parties in this House of Commons to commit themselves to leading the world. We have delivered on that. I do not know whether the hon. Lady has seen this week’s report from the International Energy Agency, but it is something of which she, and all of us, should be proud. The IEA—the world’s foremost body in commenting dispassionately on energy matters—says in its report:

“The United Kingdom has led the way in the transition to a low-carbon economy by taking ambitious climate action at international and national levels.”

That is its headline conclusion. As I said in my statement, it has also commented that the Government’s efforts—and I think we can include the efforts of successive Governments—are

“an inspiration for many countries who seek to design effective decarbonisation frameworks.”

This is a moment at which, for all the fractiousness of current debates, I think the House can be proud of the decisions that have been made.

The hon. Lady asked about carbon budgets, which were established by the Climate Change Act. As she will know, for the two carbon budgets that have been met—most recently in 2017—we have achieved surpluses of 1.2% in the first and 4.7% in the second, and we are on track for a surplus of 3.6% in the current one, which will end in 2022. As for the carbon budgets that follow, which run until 2032, at this stage—and we are talking about 15 years or more from now—we are already 90% of the way there.

An important feature of the report from the Committee on Climate Change is its recognition of the astonishing returns from investment in innovation. When the right hon. Member for Doncaster North (Edward Miliband) and I were debating the Climate Change Bill across the Dispatch Boxes—the right hon. Gentleman will remember this—the Opposition came close to defeating the then Government on the question of imposing an emissions performance standard on new coal-fired power stations: we were defeated by just a few votes. The need for such a performance standard is now cast into history, because we have no new coal-fired power stations and we are closing the existing ones. Such is the pace of change. So I am absolutely confident that we will meet the ambition that we have set today.

The hon. Lady mentioned solar power. The Committee on Climate Change has commended the action we have taken through the feed-in tariffs. They were always intended to kick-start the solar industry. The scheme cost £1.2 billion a year, and £30 billion has been spent on supporting the industry. It has been successful, as intended, in bringing prices down. Just as in every other advanced economy, as intended from the outset, it has now closed, but has been replaced by an export guarantee that allows those supplying surplus energy in the market to be paid for it.

Proposals of that kind have been endorsed by commentators around the world. In choosing to make this big increase in research and development, we can be confident that we can maintain and fulfil our ambition not only for the environment, but for the job creation in every part of the country that comes with a consistent and determined act of leadership. I am grateful for the support of the Opposition in that regard.

[Mark Pawsey (Rugby) (Con)]

Today’s announcement has been broadly welcomed—by, among others, the Confederation of British Industry—but our energy-intensive industries such as steel, ceramics and cement are currently paying a higher price for energy than is paid in comparable countries. What reassurance can the Secretary of State give such industries that other industrial economies will follow our lead and that the measures that will have to be introduced if we are meet the zero target by 2050 will not place those industries at a competitive disadvantage?

--- Later in debate ---

[Greg Clark]

My hon. Friend makes an excellent point. One of our requirements, which has been recognised by the Committee on Climate Change, is our need to invest in the energy-intensive industries in particular, to improve their energy efficiency so that they can compete effectively and also to enable us to capture, store and, in some cases, use the carbon they generate. The commitment to carbon capture, use and storage is one of the steps we must take to meet those ambitions.

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

I thank the Secretary of State for advance sight of his statement. I also welcome the Minister for Energy and Clean Growth, the right hon. Member for Devizes (Claire Perry), back to the Chamber—although she is no longer present—and echo others in thanking the Committee on Climate Change for its work.

We welcome the statement. It is important that we all work together to address this challenge. We especially welcome the intention to follow the Scottish Government by including aviation and shipping in the targets, but why not have the ambition to match the Scottish Government’s emissions plan? In Scotland, the target date for zero net emissions is 2045 rather than 2050, and the carbon-neutral target date is 2040. So let us see if we can step up that ambition.

Even before the actions contained in Scotland’s climate change plan, actual emissions were down 3.3% between 2016 and 2017 and down to nearly half of the emissions levels of 1990. The Secretary of State’s Government must be more ambitious. The Committee on Climate Change said that this is “feasible and deliverable”, as was mentioned in the Secretary of State’s statement. Will he also accept the committee’s recommendation which agrees with the CBI on the National Infrastructure Commission’s call that in the 2020s we really need to push ahead with renewables to meet the 2050 target?

The Secretary of State said that he is taking these actions to

“tackle one of the greatest threats to humanity”,

yet the Committee on Climate Change, the National Infrastructure Commission and the CBI all say that investment in onshore wind and solar has stalled for political reasons. The CBI has said we should take the politics off the table for onshore wind, so will the Secretary of State drop the Tory ideological opposition to onshore wind?

Finally, there is another choice other than nuclear: carbon capture and storage utilisation. St Fergus near Aberdeen could be operational quickly, by 2023 with the right investment and commitment. At minimum it could capture 5.7 gigatons, equivalent to 150 years-worth of all of Scotland’s 2016 gas emissions, so will the Secretary of State reverse the betrayal over Peterhead and that carbon capture programme being withdrawn and commit to investing in St Fergus, to deliver these benefits, not only for Scotland but for the UK and the rest of the planet?

[Greg Clark]

I am grateful to the hon. Gentleman. He seemed to be welcoming the committee’s report but criticising the Government for not agreeing with its recommendation to set a date of 2045 for Scotland and 2050 for the United Kingdom. That was its clear advice and we are following it. There were particular reasons, such as the greater potential for afforestation in Scotland, why it regarded a 2045 target as appropriate. I hope the hon. Gentleman will not take it amiss when I agree with the first part of what he said—that we should follow the committee’s advice—rather than the second part, which is that we should then disagree with it.

On the points about carbon capture and storage, part of the opportunity and requirement for net zero is that it is possible to take carbon out of the atmosphere, especially from industrial processes, and of course Scotland and its industrial clusters will have an important part to play in that.

The hon. Gentleman mentions the National Infrastructure Commission, and again I welcome his respect for its expert analysis. We support what it says about increasing renewables. I hope that in the same spirit he will support its recommendation that we should have more new nuclear power—something he opposed. I do not want to be excessively partisan on an issue that I know from my discussions with the Scottish Government is a common commitment that we make to maintain and increase our ambition and at the same time create jobs in every part of the UK including Scotland.

[Richard Benyon (Newbury) (Con)]

Yesterday, I was in Washington, where I was reminded that this is a fiercely partisan issue there that divides politics, perhaps more than any other. It is something to rejoice in that here there is a very bipartisan view on it. I am very proud that this Government have taken this decision today. They have listened to the scientific evidence and are acting on it, but does my right hon. Friend agree that this is the easy part? We have to carry our population with us as we decarbonise our economy further, change the way we travel, farm and move around, and be a beacon for other countries to do the same.

[Greg Clark]

I completely agree with my right hon. Friend and pay tribute to him for his leadership both as a Member of this House and a Minister in DEFRA in pursuing this at a national and international level. He is absolutely right that we need to change the way we do things, but the prospects of leaning into technology mean that we can do that in a way that does not make our lives more miserable or more constrained. No one could look back on the last 20 or 30 years and think that, having achieved what we have in terms of emissions reductions, we have done so at the expense of our quality of life. That is the guiding philosophy we should take: we should harness technology to make sure our lives can be better and greener and cleaner in the future.

[Edward Miliband (Doncaster North) (Lab)]

I warmly welcome the Secretary of State’s announcement and join those who have paid tribute to the Minister for Energy and Clean Growth, because this idea had been lying around for a couple of years in the long grass of government and it was she who took it out of that long grass and helped make it happen. I also welcome the five-year review mechanism because we might well need to bring forward the net zero date from 2050; that might not be the original intention of the review mechanism but it may be necessary. May I however ask the Secretary of State to recognise that in its advice the Climate Change Committee said very specifically that as well as setting the target itself, the Government must put in place the policies to meet the target? That means, as it said, a 2030, not 2040, cut-off date for new petrol and diesel vehicles; a proper decarbonisation plan for our 27 million homes, which we do not have; and an end to the moratorium on onshore wind—a moratorium I believe is now economically illiterate as it is now our cheapest fuel available? Can the Secretary of State assure us that henceforth there will be leadership not just on targets but on action?

[Greg Clark]

I pay tribute to the right hon. Gentleman for his own leadership in this. I think he will recognise that we are not credited simply with leadership in terms of legislation and targets but with achievement. Of the major industrialised countries we are the world leader in decarbonising our economy at the same time as growing that economy. We should be proud of that.

The right hon. Gentleman is quite right: the inclusion of the review mechanism in the Climate Change Act was a prescient one because it has allowed me to write to the committee, which has resulted in the report to which we are responding today. I think five years is a good period in which to see how we and others are doing against that target and whether the pace of implementation is what is required.

The right hon. Gentleman is absolutely right that policies to support that will be required. The essence of good policy is that it should not have unintended consequences. In terms of the automotive sector for example, I and Opposition Members know that car companies need to be able to generate the returns to make the capital investment to install the new capital equipment that is needed to make electric powertrains, for instance, so getting that pace right so that they can have the returns to be able to reinvest is crucial; otherwise, there could be unintended consequences. The right hon. Gentleman talked about homes and wind, and of course all these things make contributions to meeting that target. The action from now on, including in the energy White Paper, is to set out the policy framework that supports our ambitions.

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

I warmly welcome the Minister’s statement today and his beautifully articulated ambition for the UK. Cornish engineers, scientists and miners were at the forefront of the first industrial revolution, and the Cornwall and Isles of Scilly local enterprise partnership clean growth strategy shows that we want to play a pivotal role in this fourth industrial revolution. Will my right hon. Friend congratulate a team from Cornwall that yesterday won money from the Faraday challenge? Cornish Lithium and Wardell Armstrong came together to make sure we can set a path for extracting lithium from Cornish mines and create a supply chain here in the UK for the batteries we will need to power up this fourth industrial revolution.

[Greg Clark]

I agree with my hon. Friend and I am grateful for her warm words. She is absolutely right to point out some of the possibilities for Cornwall, including the sources of lithium that will be in demand as we decarbonise and electrify cars and other forms of transportation. There are great opportunities for Cornwall and I know that companies there will be creating new jobs on the back of that prospect.

[Rachel Reeves (Leeds West) (Lab)]

May I start by welcoming the statement and the commitment that the Secretary of State and the Minister for Energy and Clean Growth have given to this? May I also say how proud I am to be a Member of a Parliament that continues to lead the way globally in tackling climate change? I am pleasantly surprised that the Bill I presented to Parliament yesterday has been adopted so quickly by the Government. However, I would say to the Secretary of State that if we are going to will the ends, we also need to will the means, and I urge him to go back to the reports from the Business, Energy and Industrial Strategy Committee and look again at bringing forward the target date for phasing out petrol and diesel vehicles, getting on with the demonstration projects for carbon capture and storage, improving the energy efficiency of our homes by genuinely ensuring that all new homes are zero carbon, and asking more from our house builders. If we do that, we have a chance of meeting the targets that we are now signing up to.

[Greg Clark]

The hon. Lady is a very influential member of this House, and when she publishes a Bill, the Government respond with alacrity. I will draw on the expertise of colleagues on her Select Committee, who have participated in the preparatory work that is needed to review the policy framework to support our ambition, and I dare say that her Committee will hold me and the ministerial team to account in terms of our implementation of the work that is needed.

[Steve Brine (Winchester) (Con)]

Today is a fantastic day, and this commitment will be warmly welcomed by my constituents in Winchester and, I hope, by the young people watching in the Gallery who have picked a good time to come in. May I ask my excellent right hon. Friend the Secretary of State, who has spoken so passionately on this, what role he sees local authorities playing in this new zero ambition and what targets we as a Parliament might set them so that they can match their words with action—not on everything, but on things like retrofitting existing housing stock and protecting the natural environment from developers? What targets can we set them?

[Greg Clark]

My hon. Friend answers his own question in giving me some examples. It is important to acknowledge that each place has different challenges and different opportunities. My hon. Friend the Member for Truro and Falmouth (Sarah Newton) talked about the potential for the exploitation of lithium in Cornwall, for example. Every part of the country will have its role to play. One of the areas in which local authorities have a signal role to play is charging for electric vehicles. If people have the confidence to accelerate the take-up of electric vehicles, that will make a big contribution to decarbonising the economy.

[Hilary Benn (Leeds Central) (Lab)]

I, too, welcome this announcement. This is a significant day on the journey that our country must make towards a zero carbon future, although we recognise that some of the steps we have yet to take will be a little more challenging than the ones we have already taken. May I pick up the point that the Secretary of State just referred to? Part of the green revolution will have to be built on electric vehicles, not least because a third of our remaining emissions come from transport. We are seeing new electric cars being developed and the range extending, but having talked about responsibility of local authorities, will he explain who is going to pay for the charging infrastructure, particularly in residential areas, as this will be essential if consumers are to have the confidence to buy the cars, which will lead the manufacturers to make more of them?

[Greg Clark]

The right hon. Gentleman makes an excellent point. This is a shared responsibility, and part of the funding that we have made available—more will be needed—is to ensure that both the private and public sectors contribute to establishing a network that is not only available but dependable and also rapid in its ability to charge. That network needs to cover every part of the country—cities as well as rural areas.

[Sir Desmond Swayne (New Forest West) (Con)]

The Secretary of State will recall the green deal. Will he ensure, now we have a new target, that we have a commensurately robust plan to incentivise households?

[Greg Clark]

I do recall the green deal, and it is fair to reflect that as we take decisions and adopt policies in this area, not every one of them is going to work in the way that is intended. It is an area in which we are innovating, and my view is that we should innovate in technology as well as in policy. I hope that the House will not be too harsh when innovations are attempted that perhaps do not work out in the way that was predicted. However, my right hon. Friend is right to say that we need to give incentives to individuals as well as companies to participate in this roll-out, and through the clean growth strategy and the forthcoming energy White Paper, he will be able to see more of that in the weeks ahead.

[Mary Creagh (Wakefield) (Lab)]

I welcome this historic announcement by the Secretary of State and congratulate him and the Minister of State on this achievement. Does the right hon. Gentleman agree that any transition must be a just transition for the communities that are experiencing this if we are to avoid the social devastation that we saw in coalfield communities such as mine, where the mines were abruptly closed in the 1980s and 1990s with no plan? Given that there is no accompanying policy to today’s announcement, may I suggest that he follow the advice of the Environmental Audit Committee’s report, published on Monday, which is to phase out taxpayer subsidies for fossil fuel exports so that we are not exporting carbon dependency into low and middle-income countries while preaching about our own virtues here at home?

[Greg Clark]

I am grateful to the hon. Lady. The work of her Committee will be important in scrutinising the policies that are set in place to meet our ambitions. I have not seen the report to which she refers, but it will be my bedtime reading this evening.

[Tim Loughton (East Worthing and Shoreham) (Con)]

I very much welcome this announcement. In two weeks’ time, the EYE—eco, young and engaged—project that I founded in 2008 will hold its 11th eco-summit in Worthing, attended by 250 local schoolchildren, to share environmental best practice. Does my right hon. Friend agree that those who most enthusiastically embrace the need to take urgent action on climate change are our youngest citizens? If so, what more can we do to turbo-charge plans to do more in their schools and to lead by example on becoming more carbon neutral by doing more on renewable energy, energy monitoring, understanding food miles and environmentally friendly school transport plans?

[Greg Clark]

I am grateful for the support of my hon. Friend, and, as I said in my statement, we have created a particular role for young people to advise on the policy framework in the knowledge that the consequences of climate change will be felt most particularly by the younger generations. There is a further opportunity. If we succeed, as I hope we will, in hosting the conference of the parties next year, that will provide a big opportunity for young people across the world, and especially in this country, to participate in the deliberations on some of the most important decisions that the world will take. I very much hope we will be able to give that opportunity to young people.

[Several hon. Members rose—]

[Norman Lamb (North Norfolk) (LD)]

Thank you very much indeed, Mr Speaker. I warmly welcome this statement. It is a significant milestone, but does the Secretary of State agree that we now need to significantly increase the sense of urgency, particularly in decarbonising the heating of buildings and transport? We have no incentive at all to increase energy efficiency in the heating of homes other than for the most vulnerable households; we are still waiting for the consultation on building regulations to deliver zero carbon; and the plug-in grant for vehicles has been cut. This surely is not good enough, and we need to increase that sense of urgency.

[Greg Clark]

I am grateful to the right hon. Gentleman and I congratulate him on his well-deserved knighthood. I think everyone will recognise the reasons for it—[Interruption.] The hon. Member for Na h-Eileanan an Iar (Angus Brendan MacNeil) will have to wait in line, I fear. The right hon. Gentleman is correct to say that we need to decarbonise all parts of the economy. That means reviewing our policies in every area, and it is important that we should do that. He mentioned the plug-in grant for electric vehicles, and one of the desirable features of policies is that a commitment can be made to kick-start the development of an industry to bring costs down, with the intention of withdrawing that commitment when the market has taken flight. We must not get into a position where we can never propose something without it needing to be there in perpetuity, because that would reduce our overall potential for innovation, which, as he knows from his work as Chair of the Select Committee on Science and Technology, would not be good for the UK or for science and innovation.

[James Gray (North Wiltshire) (Con)]

Anyone who truly cares about passing on a cleaner, greener, better globe to our children and grandchildren will warmly welcome the content of today’s statement and will be glad that the whole House has risen above party-political bickering to do just that. The Secretary of State mentioned the manufacturing of electric cars, so will he congratulate Dyson in my constituency on investing £250 million in research and development at Hullavington in my constituency? Will he seek to try to persuade Dyson to make good use of vacated automotive manufacturing facilities nearby, perhaps by manufacturing vehicles at the Honda site in Swindon?

[Greg Clark]

I agree with my hon. Friend, and I congratulate and praise Sir James Dyson. He is one of our most brilliant inventors and entrepreneurs, and he makes a big contribution to our country, not only through the people he employs, but in the education training that he gives. I share my hon. Friend’s ambition for us to be able to attract Dyson to locate manufacturing facilities in the United Kingdom. We have the research, the brains, the skilled workforce and the facilities. I hope, in time, that we will be able to celebrate further opportunities that Dyson may have in the United Kingdom.

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

I do welcome this report, but I would welcome it a lot more if the Government had followed all the recommendations of the Committee on Climate Change, not just the ones that do not cause ideological indigestion. In particular, the committee recommended that the emission reduction effort needs to be done here at home, not outsourced to poorer countries. Carbon offsetting basically slows decarbonisation, and it deprives poorer countries of the low-hanging fruit that they need to meet their own reduction targets. Will the Secretary of State therefore review the decision to rely on dodgy loopholes, and will he ensure that the domestic action is all done here at home?

[Greg Clark]

I am grateful to the hon. Lady for welcoming the commitment, but she knows that the Climate Change Act 2008 includes the use of credits. The Committee on Climate Change has not recommended that we should repeal that part of the Act, just that we should not aim to make use of them. We support, accept and agree with that recommendation, so we will not be making use of credits.

[Henry Smith (Crawley) (Con)]

The Crawley-headquartered Virgin Atlantic had its first biofuel flight last year, and the Gatwick-based easyJet is now flying the new A320neo, which has a much-reduced carbon output. In moving towards net zero emissions, what support can the Government give to the world-leading UK aviation industry, so that it can play its part in ensuring that we can be an island trading nation while leading the world on environmental protection?

[Greg Clark]

The aerospace sector deal that was concluded as part of our industrial strategy includes the research and development of electric power for aeroplanes, which positions us at the forefront of the development of that technology. That has the obvious benefits of contributing to the reduction in omissions and creating further success for what my hon. Friend correctly describes as an important and successful industry in this country.

[Liz Kendall (Leicester West) (Lab)]

The UK is making good progress on clean electricity thanks to policies introduced by successive Governments, but we are not yet making the progress we desperately need to reduce greenhouse gas emissions from transport. What does the Secretary of State think the key problems and challenges are, and what we are going to do about them?

[Greg Clark]

If the hon. Lady reflects on the progress that is being made, she will see that the accelerating take-up of electric vehicles makes a major contribution. Through the industrial strategy, we have funded the research and development of new electric powertrains for commercial vehicles—vans, lorries and agricultural vehicles—which will be important. We need to double down on that commitment, but we made the right strategic judgment three years ago when we targeted the future of mobility, including electric vehicles, as being one of the principal contributors not just to tackling climate change, but to creating jobs in the economy.

[Richard Graham (Gloucester) (Con)]

I congratulate the Secretary of State on this important announcement. As he says, the challenge is now all about implementation. May I therefore encourage him to look closely at the Marine Energy Council’s proposals for how to stimulate the production of that side of green energy, which is still the Cinderella of the sector? In addition, may I ask him to work closely with the Secretary of State for Environment, Food and Rural Affairs to reduce the amount of illegal plastic waste currently being exported in a disgraceful way to Malaysia and elsewhere in south-east Asia, which will, if not stopped, damage our strong environmental commitments?

[Greg Clark]

I agree with my hon. Friend and recognise his long-standing campaigning and his contribution to creating a clean environment. In the quest to pursue the possibilities of new technologies and their research and development, I agree that marine and tidal technologies have an important role to play. Since 2010, we have made available over £90 million in grant funding, and we will continue not only to do that but, working with our universities and businesses, to accelerate the research and development that is taking place in all parts of the United Kingdom.

[Sir Edward Davey (Kingston and Surbiton) (LD)]

In wholeheartedly welcoming this statement, may I ask the Secretary of State to do two things? First, will he reverse the Government’s decisions to abolish the zero-carbon homes regulations, to ban onshore wind and to proceed with a third runway at Heathrow? Secondly, will he agree to meet me to discuss how we can decarbonise capitalism, particularly in the City of London? Given that the City funds 15% of global fossil fuel investment, if we can decarbonise the City, that can have a massive impact on the whole world.

[Greg Clark]

I acknowledge the right hon. Gentleman’s experience and contribution to the cross-party efforts that have been made in this area. When it comes to wind, we sometimes have to make some strategic calls, and the decision we took to provide funding and incentives for the development of the offshore wind industry has allowed it to develop to the extent that we are now the world leader, creating jobs right across the country, so it was right to champion offshore wind. He also mentions the City, and it is important to recognise the contribution and the leadership that the green finance expertise in the City of London offers to the world. The City will be extremely important in financing many of the investments that will be needed in the years ahead.

[Crispin Blunt (Reigate) (Con)]

I note that this statement marks 30 years of global British leadership on this issue, under both parties. Margaret Thatcher was the first P5 leader to devote the entirety of her speech to the United Nations General Assembly to this issue. Turning to the cost estimates, does the 2% envelope include the likely benefits that will come from the technology that will be generated from investment in this area? On the flipside of that, if British leadership fails to take the rest of the world with us, what kind of estimates have been made of the costs of protecting our country from the consequences of climate change?

[Greg Clark]

My hon. Friend makes an excellent point. Mrs Thatcher was the first world leader to declare a climate emergency. I recently reread the speech that she made to the UN, and I would commend it to any Member of this House. Its prescience and rigour are remarkable, and it bears reading again today.

The 1% to 2% cost estimate of the Committee on Climate Change is exactly what the House voted for in 2008. It is a gross figure, not a net figure, and does not include the benefits. My hon. Friend is absolutely right that it also does not include the consequences and costs of a failure to tackle climate change, although the committee’s report sets out in great detail some of the negative consequences were we and the rest of the world to fail to act.

[Liam Byrne (Birmingham, Hodge Hill) (Lab)]

I, too, welcome today’s statement as an important step forward. I hope the Secretary of State will join me in congratulating Birmingham City Council, which last night declared a climate emergency and a much more ambitious date to achieve zero carbon status. I hope he will also congratulate Birmingham Youth Strike 4 Climate, which has helped to lead this campaign in our region.

It would be a misreading of economic history if the Secretary of State forgot the mission critical role of a creative, active state in making industrial revolutions happen. In our region that means we need municipal energy companies to drive forward solar in the cities, green development corporations to help us build green council houses, an office of community wealth building to target the procurement spend we put into the market each year, a national education service to make sure we have the skills, and a regional investment bank to make sure we have the capital.

Will the Secretary of State work with us to help our region be the first to become zero carbon? That is the target we would like to set because, of course, we sparked the carbon revolution in the first place.

[Greg Clark]

As the right hon. Gentleman says, the west midlands has a distinguished role not just in the history but in the future of industrial production in this country and around the world. He is right that that sense of place is important and that it is crucial the Government play an active role in this at every level. We just need to look at the success of offshore wind, which was driven, in part at least, by a framework in which private companies could invest with confidence, knowing that they would be supported.

It is open to local authorities and to companies to take decisions themselves on when they can be carbon neutral, and many have done so. I am interested to hear that the right hon. Gentleman’s council has followed suit. He knows that the west midlands industrial strategy, which was mentioned in Prime Minister’s questions, has a substantial recognition of the opportunities across the region not only for participating in solving climate change but in reaping the benefits of the technologies.

[Luke Graham (Ochil and South Perthshire) (Con)]

I welcome the announcement. My right hon. Friend will appreciate that this has policy implications right the way through central Government, devolved authorities and local government. Can he reassure the House that central Government will lean forward and engage with every part of the United Kingdom to make sure we deliver this target so that we avoid negative targets such as the zero landfill target in Scotland, which sees opportunities lost and waste shipped to northern England, and so we see positive initiatives like the international environment centre in Alloa and, hopefully, geothermal in Clackmannanshire?

[Greg Clark]

My hon. Friend is absolutely right. We have set out a global ambition, and it would be absurd if we were divided within this United Kingdom on how we achieve it. We will work together to take advantage of all the opportunities, including in Scotland, to achieve the transition we need.

[Mr Chris Leslie (Nottingham East) (Change UK)]

This is an important commitment, but will the Secretary of State make sure he publishes the impact assessment and the cost-benefit analysis so that, if we want to bring this forward to 2045, we can continue to review it and do so? Is it not a glaring omission that Brexit is not mentioned at all in this statement? There are a number of ways in which the European Union helps us to reduce carbon emissions. Will the EU emissions trading scheme continue? What will happen to the EU funding for low-carbon projects? Many of us believe that we should remain in the European Union if we want to leverage our impact on carbon reduction.

[Greg Clark]

Sometimes I agree strongly with the hon. Gentleman, and on climate matters we have a record of leading in the European Union. The legislation that was passed and the achievements we have made are in advance of other European countries. It is within the capacity of this Parliament and this Government to make the necessary changes. I want us to lead Europe, as well as leading the world.

[Stephen Metcalfe (South Basildon and East Thurrock) (Con)]

I warmly welcome this announcement. Will the Secretary of State join me in encouraging everyone inside and outside this House to see decarbonisation as an opportunity to be grasped, not a burden to be managed? Combining technology, particularly artificial intelligence, can lead to lower costs, economic benefits, efficiencies, cleaner energy and, of course, high-quality employment opportunities for our constituents.

[Greg Clark]

I agree with my hon. Friend, whom I congratulate on being reappointed as the Prime Minister’s envoy on engineering, which makes a huge contribution. We need to have the skills to be able to take up the jobs and to implement the changes that are being made here. Training the next generation of engineers will be crucial.

From his work on the Science and Technology Committee, my hon. Friend knows the importance of innovation in this. Innovation enjoys prominent billing in my response today, and with just cause because it will be one of the ways in which we succeed.

[Kerry McCarthy (Bristol East) (Lab)]

It is a simple fact that we cannot reach net zero without a change in diet, a radical rethink of land use, at least a halving of food waste and embedding sustainability in the food chain from farm to fork. It is all well and good for Ministers to talk about carbon sequestration from soil and planting more trees, but that is very much the safe ground. We need to see a far more ambitious strategy both from the Department for Business, Energy and Industrial Strategy and from the Department for Environment, Food and Rural Affairs to achieve the reduction in emissions from food and farming that we need to see. Will the Secretary of State start by endorsing the National Farmers Union’s commitment to reach net zero by 2040?

[Greg Clark]

I am always strongly supportive of the NFU and its work to make food and farming not only sustainable but a source of prosperity for this country. The hon. Lady is absolutely right that there are challenges and opportunities in how we use land. Across the Government, and I hope across this House, we can work together to make sure those opportunities are reaped and applied so that we can benefit from them in this country and export them around the world.

[Alex Chalk (Cheltenham) (Con)]

This is hugely welcome. A legal commitment to net zero will help to preserve our planet while encouraging the kind of tech and innovation that we can export around the world. It is hugely welcome in Cheltenham, too.

I congratulate the Prime Minister and the Secretary of State on their decisive and historic leadership on this issue. What is the plan to ensure that other countries face up to their responsibilities, too?

[Greg Clark]

I commend my hon. Friend for his well-supported Climate Change (Net Zero UK Carbon Account) Bill and for his fantastic speech in support of it, in which he urged us in this direction. It is a source of great pleasure to me that we can meet his ambitions.

We will have an early opportunity to advance this cause with our international partners and with all countries around the world if, as I hope, we succeed in hosting the next conference of the parties, which takes place next year.

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

We would not be here discussing this today if not for Extinction Rebellion and the hundreds of thousands of young people who, week after week, grabbed this issue and brought it back into the mainstream. With that in mind, and given that many local authorities have more ambitious targets, will the Secretary of State agree to include in his plan at least an opportunity to meet this target at a much earlier time?

[Greg Clark]

I have referred to the hugely important contribution that young people have made in advocating the action we are taking, and they are joined by many other campaigners in this country and around the world. The substantial report of the Committee on Climate Change, which I hope the hon. Gentleman will have a chance to study in detail, makes a proposal that is not plucked out of the air but is evidenced and referenced. In adopting and legislating for this target, we are doing so on the best possible advice. That is the best way to proceed.

[Nigel Huddleston (Mid Worcestershire) (Con)]

I enthusiastically welcome today’s net zero announcement, because this issue has an impact on us all, and especially on young people. I therefore particularly welcome the announcement of a youth steering group to advise the Government on this issue, and perhaps we could employ this model in other policy areas. When will we find out a little more about the role and purpose of this group?

[Greg Clark]

Everything my hon. Friend does is with enthusiasm. We will publish the details of the terms of reference and composition of the group in the next few days, and I hope it will meet with his approval.

[Geraint Davies (Swansea West) (Lab/Co-op)]

The Secretary of State knows that the reason for our leadership on emissions is that we have relocated much of our manufacturing to China and elsewhere, and closed our coalmines. Is he aware of the predictions of Professor Yangyang Xu, published in Nature magazine, which simply show that because there is more methane production than originally projected and less sulphur, which has a cooling effect, we are expected now to reach the 1.5° threshold not by 2040 but by 2030? In the light of that, will the Secretary of State look again at the assumptions underlying the report on which he is predicating his 2050 target, with a view to bringing that forward? Will he listen to some of the pressure groups, such as Extinction Rebellion, which want firmer action, be it getting rid of fracking, or action on wave, solar or wind, and move forward more quickly, because there is a desperate emergency and this statement is simply too little, too late?

[Greg Clark]

The hon. Gentleman is wrong in saying that the reduction in emissions comes simply from exporting our production; he does a disservice to the hundreds and thousands of men and women who work in our renewables industry and lead the world in the development of offshore wind. It is a source of great national pride and I hope he will join in that. The Committee on Climate Change is a serious and substantial body that has done an important piece of work. It was rightly established by his party when he was in government, and those on both sides of the House have respected its advice. The Committee references and is impelled by the latest climate science, which, as he says, requires a more urgent response than was previously committed to. That is exactly why it has provided this advice and exactly why we are legislating to implement it.

[Derek Thomas (St Ives) (Con)]

Cornwall was early in declaring a climate emergency, and it will be glad to hear today’s commitment, not least because of the opportunity to create well-paid, skilled jobs by doing the right thing. The Committee on Climate Change recommendations talk about a massive skilled jobs programme and we have seen the need for that today. We are talking about the roll-out of smart meters, which helps to address the climate change emergency; the need for storage, as we heard from my Cornish colleague; home efficiency improvements; and even the management of waste food. Those things all require new skills and existing skills that people do not have at the moment. Will the Secretary of State work with the Department for Education and, in particular, with the Treasury to make sure that further education colleges, which are well placed to deliver these skills, have the money and have it quickly?

[Greg Clark]

I will indeed do that. Let me give the example of the offshore wind sector deal, where one of the major commitments between the industry and government was to establish the skills needed in the supply chain to be able to create those jobs and allow the industry to flourish. This does not just apply to offshore wind; it applies across the clean energy sector. That is a good model for how to proceed.

[Wera Hobhouse (Bath) (LD)]

I, too, welcome today’s announcement. However, the Liberal Democrats are setting out more ambitious targets to achieve net zero greenhouse gas emissions by 2045, together with clear interim targets to make sure that we do not kick the can down the road and avoid difficult decisions now. Does the Minister recognise that today’s announcement somewhat contradicts Government policies on, for example, fracking, which is a fossil fuel, and on withdrawal from the European Union, which undermines international co-operation?

[Greg Clark]

No, I do not. I am disappointed that the hon. Lady seems to be speaking on behalf of the Liberal Democrats in withdrawing the support for the Climate Change Act 2008, which set up the committee to give advice to the Government. The committee has been clear in saying that the ambition of 2050 is the right one for the United Kingdom. If she reads the report, she will respect the evidence on which that is based. It is always possible—and in our exchanges we have said that the Act provides for this ability—to review that progress and for the committee to give further advice. I have said that in five years’ time we will go back to the committee to ask it for an assessment of how we are doing.

[Melanie Onn (Great Grimsby) (Lab)]

What are the Government doing to support bioenergy and carbon capture and storage technology to enable the energy estuary of the Humber to become the UK’s first net zero industrial cluster?

[Greg Clark]

The hon. Lady knows that the Humber is one of the prime areas that can benefit from the capture of carbon by the high emitters of CO₂. We have a commitment to invest in carbon capture, usage and storage, and I know that across the Humber we have a strong contender for part of that investment fund.

[Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)]

Last night, at the Renewable Energy Association dinner, its chair, Nina Skorupska, said that the Committee on Climate Change should be renamed the committee for climate emergency. With that in mind, this net carbon zero statement is going in the right direction. A practical step to help what the Secretary of State is talking about would be to build a 600 MW interconnector to the Hebrides, rather than a 450 MW one. That would give us 33% more capacity for only 5% extra cost, and the extra electricity it would produce would probably drop wholesale prices and even eradicate that. Given today’s statement, will he make sure that Ofgem sees the big picture and gives the 600 MW the green light? Ofgem is currently not fit for purpose in this regard, because if it keeps its blinkered formula, its policies will result not in 600 MW or 450 MW, but in net zero MW.

[Greg Clark]

I know that the hon. Gentleman is frustrated at the decision that Ofgem has taken. He and I had a successful and productive meeting in Stornoway a few years ago, as he will recall, to make it possible for remote islands to benefit from wind. He knows that Ofgem has an independent role, but I will follow up on his concerns.

[Richard Burden (Birmingham, Northfield) (Lab)]

This morning, the all-party motor group, which I chair, met a wide range of senior representatives of UK automotive companies, and there was a real welcome for the announcement that the Government have committed to net zero by 2050. However, they also noted that there is so much more to do if we are going to get there. That has to include a step change in infrastructure investment, making sure that the rapid charging points are available in the quantities and places needed, and that they are interoperable, and ensuring that the grid can cope. They also noted that we have to manage the transition more effectively, which means ending the confusion in the Government’s signals about intermediate technologies, about the regulatory frameworks to be put in place and about the kinds of incentives that can help to change consumer behaviour. In that context, may I gently say to the Secretary of State that cutting back on the plug-in car grant does not necessarily help, in a market that is not yet mature?

[Greg Clark]

I am grateful to the hon. Gentleman for conveying the support of the automotive industry, which has a crucial role to play in this transition. He is right about, and in earlier exchanges I have paid particular attention to, the importance of getting that transition right, so that it does not have unintended consequences of depriving of investment an industry that is crucial to making that change. Of course we will look at all the policy components. The plug-in grant was established and has been successful in launching an industry—or, at least, in expanding the early take-up of an industry. It was intended that it should come to an end when its budget was exhausted, but of course, through the spending review, decisions will need to be taken on how the industry can be supported in future.

[Mr Paul Sweeney (Glasgow North East) (Lab/Co-op)]

The Secretary of State was correct to refer to the important role that the Clyde shipyards played in the first industrial revolution, but of course they will also have an important role to play in the next green industrial revolution if there is an appropriate industrial strategy. That is why I am dismayed that in respect of the offshore wind sector deal that the Government announced, they buckled to the lobbying by large energy companies and diluted the requirement for 60% of manufactured content to be made in the UK down to 60% of through-life content. As a result, EDF is sending the £2 billion contract for manufacturing a wind farm off the coast of Fife to Indonesia, instead of building it in the BiFab yards that lie 10 miles away on the coast of Fife and employ 1,000 people. Will the Secretary of State address this glaring inconsistency in the offshore wind sector strategy and ensure that we maximise British manufacturing of heavy engineered products in British renewable energy projects?

[Greg Clark]

The hon. Gentleman is absolutely right that our heritage and skills in shipbuilding are now being put to use throughout the country in marine energy and offshore wind in particular, but he will acknowledge that the commitment in the sector deal was to increase UK content. That was the right ambition to establish and it was agreed between the industry and the Government, although it can of course be kept under review. We always want to see content produced in the UK, including in the very shipyards that the hon. Gentleman mentioned that were so important in our first industrial revolution.

[Dr Sarah Wollaston (Totnes) (Ind)]

I warmly welcome the commitment to net zero emissions. Does the Secretary of State agree that to help to achieve that we need to do far more to encourage people out of their cars where possible and to make more journeys by cycling or walking? We know what works to achieve European levels of cycling; will the Secretary of State commit to looking into the evidence and meeting me and the all-party group on cycling to see what further can be done to achieve those targets?

[Greg Clark]

I would be delighted to do that. I am a strong advocate and have campaigned for and achieved the establishment of some important new cycle routes in my constituency. They are a good example of something that makes a contribution to the environment as well as giving us all opportunities to enjoy the fresh air and in many cases the countryside, including in the hon. Lady’s beautiful constituency.

[Cat Smith (Lancaster and Fleetwood) (Lab)]

My Lancashire constituents want to step up and play their role in meeting the climate emergency, including by choosing greener transport options. Will the Secretary of State look into opening disused rail lines, such as the one into Fleetwood, as part of the strategy? Does he recognise that fracking locks us into a reliance on fossil fuels for years to come? Will he review the Government’s support for fracking?

[Greg Clark]

I will of course talk to my colleagues in the Department for Transport. As the hon. Lady said, we need to look into all the options to give people a choice of how to get about that is environmentally sustainable. On gas, whether derived onshore or offshore, the Committee on Climate Change has always been clear that in the transition to net zero there is a role for gas in all scenarios. In my view, if we have a domestic contribution to that, that helps with the resilience of our energy supplies.

[Ben Lake (Ceredigion) (PC)]

The Secretary of State rightly referred in his statement to the historic opportunity before Parliament to make real progress in tackling climate change by achieving net zero carbon emissions. In order fully to realise that opportunity, will the Government reconsider existing policies—such as those relating to maximising the extraction of offshore oil and gas deposits—to ensure that they comply with the aspiration outlined this afternoon?

[Greg Clark]

As I said to the hon. Member for Lancaster and Fleetwood (Cat Smith), the Committee on Climate Change, which advises not only the Government but the House and the country on this issue, recognises the need for a transition and that gas and oil will be required in that context. As we recognise the jobs and exports generated by gas and oil, it seems to me that we should do that as efficiently as we can and with the best deployment of technology that we possibly can.

[Alex Sobel (Leeds North West) (Lab/Co-op)]

As the Secretary of State knows, I am usually supportive of our bid to host COP 26, on which I led on a joint letter with the hon. Member for Middlesbrough South and East Cleveland (Mr Clarke) that was signed by more than 100 Members, but I am concerned that we are due to miss the fourth and fifth carbon budget targets. The explanatory notes that accompany the statutory instrument laid this morning say that the Government will leave headroom for emissions from international aviation and shipping. When will we adopt a Norwegian-style plan on aviation and shipping emissions that will eradicate those emissions and mean that we can meet our carbon budget targets?

[Greg Clark]

We have followed the advice of the Committee on Climate Change and our plans for net zero cover the whole economy, including international aviation and shipping. We await the committee’s advice on how to legislate. One opportunity that our hosting the COP would bring forward is the ability to accelerate international agreements. I hope the hon. Gentleman would welcome that.

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

I join others in welcoming the legislation, but does the Secretary of State genuinely believe that the machinery of government is currently organised in such a way as to facilitate the type of ambitious policy response that we will need in this Parliament in order for the target to have credibility? He will know that we used to have a clean growth inter-ministerial group, but no such body now exists. Does he agree that, given the scale and pace of the transition required, we will almost certainly need to make changes to the institutional architecture of government to co-ordinate and drive progress across all Departments?

[Greg Clark]

The hon. Gentleman is absolutely right that we should have the best arrangement. In fact, that inter-ministerial group does exist, and my hon. Friend the Minister for Energy and Clean Growth chaired its most recent meeting just last week. The hon. Gentleman should reflect on the creation of my Department, which brought together the responsibilities for business and industry with energy and climate change, because that is a recognition that if we want, as we must, to take action to achieve the targets, we must make sure that the economy is run and companies operate in a way that supports that action. It is a practical example of just the kind of thinking and acting that the hon. Gentleman advocates.

[John Woodcock (Barrow and Furness) (Ind)]

The 2050 deadline is of course important, but anyone who has seen how Parliament is squandering its time ahead of 31 October will understand that deadlines are not sufficient in and of themselves. What is the Secretary of State going to do on two critical issues: what is he going to do to rescue the Moorside nuclear deal and Wylfa; and will he meet the team behind the strategic business case that is being put together for the plan for a tidal barrage across Morecambe bay and the Duddon, which could be transformative?

[Greg Clark]

I am happy to meet anyone who has a contribution to make, both to reducing our emissions and to achieving technological advances. On the nuclear industry, the hon. Gentleman knows that the financing of new nuclear power stations has been done commercially, and we are reviewing the financing model to see whether a different approach might address some of the difficulties that private sector investors have had in financing the scale of investment required for new nuclear. That review will report soon.

[Jim Shannon (Strangford) (DUP)]

On behalf of the Democratic Unionist party, I welcome the Government’s continuing commitment to deal with this vital issue. It is important that the United Kingdom of Great Britain and Northern Ireland does its bit to safeguard the environment for our children and grandchildren. Will the Secretary of State confirm that other countries are also committed and will do all that they can do to address the issue with equal determination?

[Greg Clark]

I am grateful for what the hon. Gentleman said; I know that he has regular discussions with the Minister for Energy and Clean Growth and is a strong advocate. Northern Ireland is one of the parts of the United Kingdom that has benefited strongly from clean energy and its deployment. We will continue that effort and I am grateful for the hon. Gentleman’s support.

Oral Answers to Questions

Greg Clark Excerpts

Tuesday 11th June 2019 Commons Chamber

[Glyn Davies (Montgomeryshire) (Con)]

13. What recent steps his Department has taken to support the development of electric vehicles.

[The Secretary of State for Business, Energy and Industrial Strategy (Greg Clark)]

In May I announced an additional £28 million, from the £250 million Faraday challenge, for the UK Battery Industrialisation Centre, where industry will test next generation world-leading technologies.

[Antoinette Sandbach]

Does the Secretary of State agree that for electric vehicles to thrive additional capacity will be required, and that energy efficiency measures to bring every home to an energy performance certificate C standard are vital in delivering that, as they will reduce energy consumption by 25% and free that capacity for electric vehicle use?

[Greg Clark]

I completely agree with my hon. Friend. She is right to point out the connections between our energy systems and the future of mobility in how we drive cars. That is why the industrial strategy sets up both as grand challenges and why the Faraday Challenge addresses both of them.

[Glyn Davies]

The Welsh Government are also promoting the development of electric vehicles, including the associated network of electric charging points. What steps is the Secretary of State taking to ensure liaison across the border between England and Wales to deliver the best possible distribution of electric vehicle charging points?

[Greg Clark]

My hon. Friend makes an excellent point. It is clear that if drivers are to have the confidence that they will be able to charge their vehicles, every part of the United Kingdom needs to be a part of that. My hon. Friends and I have regular discussions with the Welsh Government, and the roll-out of the charging network is in all parts of the United Kingdom.

[Alison McGovern (Wirral South) (Lab)]

The Secretary of State knows that many of my constituents work in the automotive industry and how serious the situation is with Brexit. Constituents are writing to me to ask why there are so few charging points in the Wirral. This is a huge issue. Will he do something that this Government really have control over and take action now on the business rates impact on the automotive industry, so we can at last have some positive news for the automotive industry in Britain?

[Greg Clark]

I think the hon. Lady knows that I have regular discussions with Vauxhall and its owner PSA. In fact, PSA has invested very substantially. One of its most recent major investments in Europe was to strengthen the Luton plant with the next generation of technology. We talked to it about investment in Ellesmere Port, which she knows is important.

In terms of charging points, we have one of the best charging networks in Europe, but we need to expand it further. As the hon. Lady knows, through the automotive sector deal we have a very close relationship with the industry and work jointly with it.

[Chris Elmore (Ogmore) (Lab)]

May I press the Secretary of State on yesterday’s statement from the Secretary of State for Wales in relation to Ford? There is capacity in the Bridgend plant and it would be a very good way to keep it open. Will he work with the Welsh Government to ensure that electric batteries can be constructed at Ford, to help to keep the jobs in and around my community?

[Greg Clark]

The hon. Gentleman makes an excellent point. I am delighted he was in the discussion that we had yesterday and that he will serve on the taskforce that has been established. The quality of the workforce, its facilities and connections represent a fantastic opportunity for new investment, whether by Ford or by others in the automotive sector. We work very closely to bring in those investments.

[Richard Harrington (Watford) (Con)]

I commend the Secretary of State and the Department for the Faraday challenge and the development of battery technology. However, does he agree that to have successful battery technology in the UK we need a successful automotive manufacturing sector, and that to do that we need a very close relationship with the EU for frictionless trade and everything that goes with it?

[Greg Clark]

My hon. Friend is right. In his time, he worked very hard to secure some of the investments that have been made. The automotive industry, along with many others, has always been clear that the strengths of the UK are at least in part drawn from our ability to export and import components very flexibly without delay. It is vital that that should continue.

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

Sales of electric cars in the UK in 2018 hovered at just 2.7%. In Norway, they rose to 31.2%, up from 20.8% in 2017. What lessons can the UK learn from a successful, driven, small independent country?

[Greg Clark]

The take-up of electric vehicles is growing very quickly in this country. The investment that we are making in the charging network, with 17,000 public charging points, is a very important contribution to that. In the weeks ahead, the hon. Gentleman will see further announcements on how we can accelerate the deployment of charging technology.

[Mark Pawsey (Rugby) (Con)]

I wonder whether the Secretary of State has received his invitation to the reveal of Lotus’s new electric hypercar on 16 July. It is the world’s first electric hypercar—designed, engineered and built in Britain. In a week when the motor industry has had some difficult news, does he agree that this is a great shot in the arm for the UK motor industry?

[Greg Clark]

It is indeed a great shot in the arm and I hope that I will see my hon. Friend there to celebrate it. It is fair to reflect that this is a difficult, challenging time for the automotive industry around the world, but through the decisions that we took in the industrial strategy to emphasise battery electric vehicles and the new technology, and connected and autonomous vehicles, we have made the right judgment about how to attract the jobs and companies that will be expanding in the future.

[Mr Gregory Campbell (East Londonderry) (DUP)]

Given the ongoing problems in recent years regarding the UK automotive sector and the ongoing problems affecting Tesla, is there not an opportunity for the Minister and the Government to approach Tesla and the UK automotive industry to see whether some acquisition could be arrived at to produce electric cars in this country?

[Greg Clark]

We have many discussions. Just a few days ago, I had a major potential investor in battery technology in my office to discuss a potential investment. Through the Automotive Council, we work very closely with the sector, and the national battery manufacturing centre is a collaboration between the players in the industry that gives them confidence to be able to invest for the future in the UK.

[Mr Philip Hollobone (Kettering) (Con)]

It is UK Government policy to end the sale of new diesel and petrol cars by 2040, but do we really have to wait 21 years to achieve that objective?

[Greg Clark]

It is important that we have a realistic move to the new fleet that we need. The targets were adopted in consultation with the industry. A lot of the capital investment needs to take place over a substantial period of time, and I would not want a situation in which we lost jobs and opportunities by setting a target that was not deliverable and feasible for manufacturers.

[Rebecca Long Bailey (Salford and Eccles) (Lab)]

Might I begin by expressing my support for the efforts of my hon. Friend the Member for Leeds West (Rachel Reeves) in bringing forward her Bill today to legislate for net zero emissions by 2050? To achieve that, supporting our automotive industry will be vital, but Ford had warned that leaving the EU would add hundreds of millions to its costs, and after the vote, it said that it was considering closing plants. This warning has come to pass. Ford is now saying that another 6,000 jobs could be at risk in the event of no deal, which is particularly concerning now that it looks likely that the next PM will actively pursue it. What direct support has the Secretary of State offered Ford to reverse its decision, and has he considered the impact of a no deal on manufacturing when deciding who to back as the next Prime Minister?

[Greg Clark]

We have led the world and the cross-party consensus across the House on our move to net zero. The hon. Lady will know that just this week, the International Energy Agency described the Government’s efforts as

“an inspiration for many countries who seek to design effective decarbonisation frameworks.”

When it comes to Ford and the automotive sector, she is right that companies in the sector have been crystal clear that we need to leave the European Union with a deal that allows us to continue to trade without frictions so that we are able to grasp the opportunities that we will have in the future. All my efforts are directed at securing that deal.

[Rebecca Long Bailey]

I actually asked about what support had been offered to Ford. Last night I spoke to a Bridgend councillor, who said

“We don’t need taskforces, commissions or working groups, we desperately need investment in Bridgend now.”

Sadly, it is not looking like any of the candidates for PM will support our car industry going forward. One thinks he knows more about car manufacturing than the boss of Jaguar Land Rover. Another said that there will be a stronger manufacturing base if we leave. Another denies that Nissan’s decision to pull the X-Trail was about Brexit, despite the company highlighting uncertainty; and the one who is allegedly the most reasonable has said that he is prepared to leave without a deal if there is a straight choice. Is it not the truth that whoever takes over as PM will drive manufacturing into the ground with their reckless approach to Brexit and that the Secretary of State’s legacy will sadly be decimated industries across our country?

[Greg Clark]

If the hon. Lady talks to people in the sector, she will know that the work we do with all companies in the sector is well respected and well regarded, whether that is the Faraday challenge or the support for individual companies such as we have seen in recent years. That support is available to Ford just as it is to any company working in the sector. As part of the work we are doing with the Welsh Government, we will attract a new investor to make use of those facilities and keep jobs for the future.

In terms of the relationship with the European Union, most, if not all, automotive suppliers want to see us reach a deal. That is my view, and I hope it is the hon. Lady’s view. In fairness, they have also said that the deal negotiated by the Prime Minister should have been approved. It is therefore of regret to me that that advice was not followed.

[Mr John Whittingdale (Maldon) (Con)]

2. What steps he is taking to increase protections for intellectual property.

--- Later in debate ---

[Dr Philippa Whitford (Central Ayrshire) (SNP)]

10. What recent discussions he has had with the Chancellor of the Exchequer on fiscal support for businesses in Scotland preparing for the UK leaving the EU.

[The Secretary of State for Business, Energy and Industrial Strategy (Greg Clark)]

The UK Government have provided the Scottish Government with almost £100 million to prepare for EU exit, alongside funding to support businesses with training and IT improvements. As we have heard in this question session, we have also supported businesses in Scotland through the city deals programme, including over £100 million for the Ayrshire growth deal in the hon. Lady’s constituency, which I know she welcomes.

[Dr Whitford]

I do welcome that, but an Ernst & Young report shows that, although 74% of Scottish firms have taken steps to get ready for Brexit, only 8% feel fully prepared. As 30% of manufactured goods go to the EU, will the Secretary of State accept the Institute of Directors’ call for £750 million to provide a Brexit advice service for small firms?

[Greg Clark]

I work closely with the Institute of Directors and other business organisations to make sure that information is available to their members and others. We will continue to do that over the months ahead, but it remains my ambition that we should have a deal that allows us to continue the successful trade that the hon. Lady mentions.

[Mr Edward Vaizey (Wantage) (Con)]

Hear, hear! Well said.

--- Later in debate ---

[Derek Thomas (St Ives) (Con)]

T1. If he will make a statement on his departmental responsibilities.

[The Secretary of State for Business, Energy and Industrial Strategy (Greg Clark)]

Since our previous questions, we have launched the west midlands local industrial strategy in Coventry, building on the region’s reputation for excellence in low-emissions vehicles, with further funding for the UK Battery Industrialisation Centre. Shortly after the recommendation by the Committee on Climate Change that we legislate to reach net zero emissions by 2050, Britain enjoyed its first ever coal-free fortnight since the industrial revolution. We will make our response to the committee’s report shortly to reaffirm our commitment to leadership in this important endeavour.

[Derek Thomas]

Most of us have hospitals, schools, council buildings and police stations in our constituencies. What more can the Government do to encourage the use of renewable energy in those buildings?

[Greg Clark]

My hon. Friend makes an excellent point on behalf of one of the sunnier parts of the country. The public sector energy efficiency loans scheme is open to public bodies so that they are able to invest in just that technology. I will ensure that he has the full details of that scheme, which might also interest the hon. Member for Ynys Môn (Albert Owen), given his question.

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

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

--- Later in debate ---

[Julian Sturdy (York Outer) (Con)]

T6. York Instruments, based in my constituency, is doing ground-breaking work developing advanced medical devices, attracting £10 million of private investment from the US to sustain 41 high-skilled jobs. Can the Government assure me that they are doing everything possible to facilitate this kind of investment, which can be very difficult for some small businesses to navigate?

[Greg Clark]

I can indeed, and I commend my hon. Friend for bringing this matter to the attention of the House. The life sciences sector deal has provided a means for investment to take place right across the sector. In fact, that deal has been so successful that we are on the second version of it, and further investments will be announced shortly.

[Ruth George (High Peak) (Lab)]

What has the Department done to monitor the growth of short-hours contracts in supermarkets, which have led 76% of USDAW members on low pay to rely on unsecured loans to pay everyday bills, with 63% believing that financial worries are affecting their mental health? Will the Secretary of State meet USDAW to discuss its recent survey in detail?

[Kevin Hollinrake (Thirsk and Malton) (Con)]

At the last BEIS questions, my right hon. Friend the Business Secretary gave a positive response to my suggestion of a wide-scale roll-out of solar on every public sector building—every school, hospital and prison. Is he interested in taking that proposal forward?

[Greg Clark]

I am indeed. I set out to my hon. Friend a means by which that can be financed. In our response to the Climate Change Committee’s report, we will be setting out further measures that we can take to accelerate our decarbonisation.

[Jim Shannon (Strangford) (DUP)]

Will the Minister outline what steps her Department has taken to ensure that free ATM services are retained in rural areas?

[Bim Afolami (Hitchin and Harpenden) (Con)]

The Secretary of State knows that Rothamsted Research in Harpenden does amazing work in agricultural science. Many people at Rothamsted have expressed to me their concern about the nature and the amount of science funding after we leave the European Union. Will the Secretary of State give me an update as to where we have got to on that as a Government?

[Greg Clark]

I completely recognise the excellence at Rothamsted, of which my hon. Friend is a great champion. One of the advantages of concluding a deal with the rest of the European Union is that we will be able to continue to participate in science projects that are of disproportionate benefit to the UK.

[Jenny Chapman (Darlington) (Lab)]

Yesterday, I spoke to the chief executive of Arcadia Group about the Top Shop, Top Man and Dorothy Perkins stores in Darlington. Tomorrow, there is a CVA—company voluntary arrangement —meeting where we could see the loss of 18,000 jobs nationwide. I know that the Government cannot intervene in the process, but what are they going to do to protect communities who could be affected by this decision?

[Mr Edward Vaizey (Wantage) (Con)]

A small amount of funding would unlock the growth of Harwell campus in my constituency via the Nuclear Decommissioning Authority. Will the Secretary of State, who knows Harwell campus well, meet me and the NDA there to discuss how we can get on and build Greg Clark Park and Theresa May Way, and drive this successful science campus to help growth post Brexit?

[Greg Clark]

I have no aspirations to such recognition, but I am very happy to meet my right hon. Friend to discuss the further opportunities for what is one of the foremost innovation campuses in the whole world.

[Alison Thewliss (Glasgow Central) (SNP)]

The Scottish Government’s consultation on fireworks closed last month, having received 16,000 responses. Can the Minister update us on the UK Government’s action on fireworks, and can she guarantee that my constituents in Pollokshields will not have to suffer as they did last November?

--- Later in debate ---

[Melanie Onn (Great Grimsby) (Lab)]

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

[Greg Clark]

As the hon. Lady knows, I am always keen to ensure that we take every step we can to preserve the continuity of skilled people, and I would be happy to do that.

[Tom Pursglove (Corby) (Con)]

The excellent new Minister has been a strong supporter of the new UK steel charter. Will he update the House on the progress he has made in getting it adopted across Government?

--- Later in debate ---

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

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

[Greg Clark]

As the hon. Gentleman knows, I am a strong supporter of the proposed sector deal, and in the draft tariff schedule that was published particular attention was given to the strong representations of the ceramics industry.

[Stella Creasy (Walthamstow) (Lab/Co-op)]

I have been inundated with complaints from local residents about a second-hand car sales company in my community that variously goes by the names BD Trade Sales, Leabridge Motors, Diamond Motors and many more. Members may be aware of its work from programmes such as “Rogue Traders”, “Don’t Get Done, Get Dom”, “Watchdog” and “The Sheriffs Are Coming”. Despite the evidence about how it is ripping off consumers, the council, trading standards and the police have not been able to stop it. Will the Minister meet me to talk about what we can do to hold these phoenix companies to account, so that we get dodgy cars off the roads and get consumers a better deal?

[Anna Soubry (Broxtowe) (Change UK)]

The Secretary of State has quite properly described a no-deal Brexit as “a disaster” for British business. Will he commit to continuing to do everything he can to prevent a no-deal Brexit, whoever the Conservative party choose as our next Prime Minister?

[Greg Clark]

I strongly believe that it is very much in our interests to have a deal that allows us to continue to trade with the rest of the European Union. The voices in countless industries could not be clearer that they depend for their prosperity on that, and I will do everything I can to represent that view in Government in the interests of the livelihoods of millions of people right across the country.

Contingent Liability Notification: British Steel

Greg Clark Excerpts

Thursday 23rd May 2019 Written Statements

[The Secretary of State for Business, Energy and Industrial Strategy (Greg Clark)]

Today I lay before Parliament a departmental minute describing a contingent liability arising from an indemnity for the official receiver acting in the insolvency of British Steel Limited.

It is normal practice when a Government Department proposes to undertake a contingent liability of £300,000 and above, for which there is no specific statutory authority, for the Department concerned to present Parliament with a minute, giving details of the liability created and explaining the circumstances.

British Steel Limited entered into liquidation on 22 May 2019. The official receiver has been appointed as liquidator and the Department for Business, Energy and Industrial Strategy has provided him with an indemnity in respect of:

carrying out the proper performance of the official receiver’s duties as liquidator of the company: and

maintaining, securing and funding the ongoing operation of the company’s undertaking, and distributing the assets of the company in the ordinary course of the official receiver’s duties as liquidator of the company.

It has not been possible to observe the usual waiting period for this contingent liability, since it only materialised when the company entered into liquidation yesterday morning.

HM Treasury has approved the proposal in principle.

[HCWS1585]

British Steel

Greg Clark Excerpts

Wednesday 22nd May 2019 Commons Chamber

[The Secretary of State for Business, Energy and Industrial Strategy (Greg Clark)]

With your permission, Mr Speaker, I would like to make a statement about British Steel.

It was announced this morning that the court has granted an application by the directors of British Steel to enter an insolvency process. Control of the company will now pass to the official receiver, an employee of the Insolvency Service, who will run a compulsory liquidation. The official receiver has made it clear that British Steel employees will continue to be paid and employed, and the business will continue to trade and to supply its customers while he considers the company’s position. In fact, employees were paid early, with the May payroll being run yesterday through cash being advanced by the company’s lenders.

As the House will recall, I made a statement on 1 May setting out details of a bridging facility that the Government agreed to provide to ensure that British Steel was able to meet its obligations under the EU emissions trading scheme, which fell due on 30 April. The Government provided the facility to purchase allowances worth £120 million against the security of 2019 ETS allowances, which are currently suspended pending ratification of the withdrawal agreement.

Without this facility, British Steel would have faced a financial pressure of over £600 million—the ETS liability, plus a £500 million fine. This would not only have placed British Steel in an insolvent financial position, but the charge attached to its operational assets would have been likely to prevent any new owner from acquiring these assets in the future. This transaction demonstrated the Government’s continuing willingness to work closely with all parties to secure the long-term success of this important business.

Following this agreement, the Government have worked intensively with the company for many weeks to seek solutions to the broader financial challenges it has been facing. The Government and individual Ministers can only act within the law and this requires that any financial support to a steel company must be made on a commercial basis. In the case of the ETS facility, this was based on the security of future ETS allowances.

To provide liquidity to the business in the face of its cash-flow difficulties the Government were willing to consider making a cash loan to the company and worked hard to investigate exhaustively the possibilities. However, the absence of adequate security, no reasonable prospect that any loan would have been repaid and the shareholder being unwilling to provide a sufficient cash injection itself meant that this did not meet the required legal tests.

I am placing in the Library the accounting officer’s assessment of these proposals, drawing on professional and legal advice, which concludes:

“It would be unlawful to provide a guarantee or loan on the terms of any of the proposals that the company or any other party has made or any others we have considered. You must note that such an offer cannot be made legally and that by making it you would be in breach of the Ministerial Code.”

The insolvency removes Greybull from day-to-day control of British Steel. Given the Government’s willingness to help secure British Steel’s future, demonstrated in the ETS facility, and the discussions that have taken place in recent weeks, the Government will work closely with the official receiver and prospective new owners to achieve the best outcome for these sites.

The Government have provided an indemnity to the official receiver, who is now responsible for the operations. We will take every possible step to ensure that these vital operations can continue, that jobs are secured and that the sites at Scunthorpe and Skinningrove and on Teesside continue to be important centres of excellent steelworking. During the days and weeks ahead, I will work with the official receiver, the special managers and a British Steel support group of trade unions, management, suppliers, customers and the local communities to pursue remorselessly every possible step to secure the future of these valuable operations.

This is a very worrying time for everyone associated with British Steel. Each one of British Steel’s sites has a proud record of steelmaking excellence, and I am determined to see it continue. Britain and the world will continue to need high-quality steel, and British steel is among the best in the world. Today is a very big setback for these operations, but it is far from being the end and we will take every step possible to secure a successful future for these vital assets, both people and plant.

[Rebecca Long Bailey (Salford and Eccles) (Lab)]

I thank the Secretary of State for advance sight of his statement.

This is indeed very worrying news for the workers, their families and the communities who rely on British Steel directly in Scunthorpe, Skinningrove and Teesside and all the way through the supply chain. At least 25,000 people will have been worried sick this morning, wondering whether they will have a job this time next week.

As the Secretary of State knows, however, the sector is critical to our manufacturing base and is strategically important for Government procurement from rail all the way through to defence. It is therefore imperative, given that the Government now have some control via the official receiver, that this business is stabilised and confidence is given to customers, workers and businesses right across the supply chain. The message from the Government today must be that British Steel is one of the linchpins of our industrial strategy and to that end they will move heaven and earth to ensure business as usual continues.

It is reported that the owner, Greybull Capital, was asking the Government for a loan of £30 million. The shadow Minister for steel, my hon. Friend the Member for Sheffield, Brightside and Hillsborough (Gill Furniss), asked for more information yesterday, but we were given none. Can the Secretary of State confirm today what the asks of British Steel were in the negotiations? Were they just the reported £30 million or was that part of a wider package of measures to support steel production?

I welcome the publication of the accounting officer’s assessment, but can the Secretary of State confirm Greybull Capital’s reasoning in asking for a loan, while reportedly being unwilling to put money on the table and simultaneously investing over £40 million in a French steelworks last week?

The Secretary of State has said in his press statement today that he will

“pursue remorselessly every possible step to secure the future of the valuable operations in sites at Scunthorpe, Skinningrove and on Teesside”,

and I welcome that. I also welcome the indemnity he has referred to, but can he outline exactly what other possible steps he will be pursuing in the coming days? Do they include bringing British Steel into public ownership as Unite the union and the Labour party have called for? Do they include discussions with other interested stakeholders to examine options for saving the company, including with Network Rail, which procures 95% of its rails from the Scunthorpe site? It is clear that we simply cannot countenance warm words and no real action as was the case with the SSI steelworks almost four years ago.

The truth of the matter is that the cost of British Steel collapsing is far greater than any short-term outlay the Government must make now. The Institute for Public Policy Research has estimated that British Steel’s collapse could lead to £2.8 billion in lost wages, £1.1 billion in lost revenue and extra benefit payments and that it could reduce household spending by £1.2 billion over 10 years. This is a significant economic disturbance, if the Secretary of State would like to dust off his state aid handbook.

We know Network Rail sources 95% of its rails from Scunthorpe. Last year, Network Rail signed a £200 million contract with the company. The loss of this supply could have serious consequences for Network Rail’s cost base and the quality of the steel used to maintain and upgrade the British rail network. Notwithstanding the great commitment by Network Rail to British Steel, however, we also know the Government’s wider public procurement of UK steel has been disappointing, with only 43% of steel used in Government projects traced to firms based in the UK, according to UK Steel analysis. So will the Secretary of State confirm today what steps he is taking to positively procure British steel for more of our key infrastructure projects?

Finally, there is no doubt that the UK steel industry is in a difficult place. Uncertainty about future trade with the EU and the dangling prospect of no deal are having a severe impact. Domestic issues like uncompetitive electricity prices, business rates and lack of support for steel in the so-called industrial strategy are also undermining the sector’s ability to compete, but UK steel has a proud history in the UK and there is no reason why this cannot continue. The ball is in the Government’s court: they can take action now to save British Steel and support the wider industry, or they can accept that their legacy will, yet again, be industrial decline. We in the Opposition know which side of history we want to be on, and I hope the Secretary of State wants the same thing.

[Greg Clark]

I am grateful to the hon. Lady for the spirit in which she approached her response to the statement, recognising that there is a total common purpose across both sides of the House to provide the confidence for new investors to be able to take on these assets, and we all, wherever we sit in this Chamber, want this to be a change of ownership rather than something that puts a stop to steel production.

The hon. Lady was right to refer to SSI, and she will recall—as will her colleague the hon. Member for Middlesbrough (Andy McDonald)—the situation with Corus in 2010. One thing we know about steel assets is that they are not like other kinds of facilities; once they close, it is very difficult for them to come back into life. So it seems to me that we have a special responsibility to make every effort to ensure there is no interruption whatsoever in production. That is my purpose, and I see it reflected in what the hon. Lady said.

I agree with the hon. Lady about the strategic importance of steel. It presents a strategic opportunity as well, because this country and the world will always need steel and British steel is among the best in the world, so we should be looking to supply it. I think my commitment was demonstrated in the move I made to provide £120 million to make sure that the liability under the ETS was addressed. Crucially, if we had not removed that liability, it would have hung over the assets, preventing any new partner from taking them on.

The hon. Lady also asked about the reports of the £30 million facility. The assessment of the accounting officer gives more information on that. In fact, that £30 million was not for a permanent refinancing of British Steel; it was a contribution to an administration only. The assessment was that the contribution from all parties would not be enough to withstand the cost requirements during that administration. She will see clearly set out the assessment of the proposals that were given. I have been exhaustive in pursuing the possibilities with British Steel over many weeks. If she is in government, she will find that she is obliged to follow the ministerial code, under which we are not allowed to make a decision that would be illegal, immensely frustrating though it is. I would have much preferred to have given the opportunity of this loan rather than go down the route that has been taken, but that is the requirement and there is no possibility of setting that aside.

On the motivation of Greybull in investing its cash in other facilities in France, one of the requirements in the case of any company failure is that the official receiver conducts an investigation into the reasons for the failure and the lessons to be drawn from it. I very much look forward to seeing the official receiver’s report. I dare say that the Chair of the Select Committee will also want to inquire closely, on behalf of her colleagues, into this as well.

On the question of new possibilities, I understand that there are buyers who have already made contact. The hon. Lady is right to say that important stakeholders such as Network Rail, which has been very supportive in recent weeks and has pledged to continue to be supportive, will work together. That is why I have invited everyone with an interest in this, including colleagues on both sides of the House, to work together so that we can make a demonstrable and clear case that the cross-party and cross-House of Commons consensus that reflects the importance of the steel sector is available to any new investor.

Finally, I agree with the hon. Lady’s assessment, relating to the report she mentioned, that the consequences are important not only for the workforce and those in the supply chain, vital though they are; they are also important for whole communities and indeed for the country. This furthers my resolve, which I know she shares, to do everything we can in the days and weeks ahead to ensure that there is continuity in these operations.

[Several hon. Members rose—]

[Sir Peter Bottomley (Worthing West) (Con)]

That was quite some time ago, Mr Speaker, when it was the British Steel Corporation rather than the old Appleby-Frodingham steel plant that we are discussing today.

I put it to my right hon. Friend that we ought to go on following his non-partisan line, but we ought also to remember what happened to steel production and steel employment during the last Government. Will he also tell us what can be done on energy costs, which form a large part of steel production costs?

Can my right hon. Friend confirm that this is an industry in which the worldwide steel cycle has a massive impact? The House will be grateful to him for doing all that he can to mitigate its effects on this country.

[Greg Clark]

I agree with my hon. Friend. I was unaware that he had had that early experience in the steel sector. I do not want to make a partisan point, so perhaps I can take this in a historical sense to illustrate that the steel sector has been through periods of turbulence and difficulty in this country and around the world, and it is clearly going through one now. It was the case that steel production fell by 50% between 1997 and 2010, as did employment in the sector, but I do not blame that on the Government of the day. It was a feature of the market at the time, but I think that we should learn the lessons from some of the decisions that were taken then. [Interruption.] The hon. Member for Middlesbrough reminds us from a sedentary position that the blast furnaces at Redcar were mothballed, which made it difficult to return them to service. They did come back with SSI, but it was very difficult to do that. The point is that we should have the maximum possible continuity, and attend to the lessons from that time. Criticisms were made at the time of the approach being taken both there and in SSI, and in the present situation we should learn the lessons and ensure that we have maximum continuity.

[Marion Fellows (Motherwell and Wishaw) (SNP)]

I thank the Secretary of State for giving me advance sight of his statement.

Since I was sworn in as a Member of this House four years ago, I have watched two Tory Prime Ministers and two Business Secretaries fail the steel sector across the UK. Time and again, they have refused to level the playing field for steel in relation to energy costs and to rates in England. I have been happy to show solidarity with those in the steel sector who face the prospect of not having a job and with those who work in the supply chains. We cannot keep on repeating this.

The UK Government need to achieve a sector deal for steel and, by their actions, fully commit to the steel industry’s future across the UK. A first step would be to listen to the industry and its concerns on Brexit, and I am glad to hear the Secretary of State say that he will do that. The inaction and apathy of this Government and this Prime Minister towards industry are reminiscent of another Tory Prime Minister. We are still recovering from the damage that Margaret Thatcher did to the steel industry in Scotland. Do this Tory Government recognise the danger inherent in pursuing their current policy regarding industrial strategy?

In 2015, by contrast, the SNP Scottish Government saved the Scottish steel industry. They saved the Dalzell works in my constituency and the Clydebridge works in the Rutherglen and Hamilton West constituency. Indeed, I am going there on Wednesday to sign the UK steel charter with the Scottish Minister for Trade, Investment and Innovation. Will the Secretary of State look to what was done by the SNP Scottish Government in setting up a Scottish steel taskforce and commit to saving steel across the UK? The Scottish steel taskforce was a model committed to saving those works, and it did so because it started out with that commitment as its sole objective, by contrast to the UK steel summit that we had in 2015. Minister, you have a grave responsibility here and I hope that you will come back and tell us that you have achieved what we all want for British Steel.

[Greg Clark]

I recognise that responsibility, and the intention of the group that the hon. Lady describes is precisely what I have set out. We all need to join forces to provide the best prospect for continuity for these operations. She referred to the important steelworks in Scotland. Sometimes, for the reasons I have set out, it is necessary for a Government to participate in a sector where discontinuities and interruptions can be difficult to recover from. I think she would be generous enough to concede that the £120 million that I informed the House of on 1 May gave precisely the possibility for these operations to continue, without which we would have been unable to have this discussion today about the prospects for the industry.

The hon. Lady asked about energy costs. Energy-intensive industries obviously incur significantly higher energy costs than other sectors. Over the past few years, we have paid £291 million in compensation to energy-intensive sectors, including steel. The industrial strategy contains an industrial energy transformation fund to increase the energy efficiency of energy-intensive operations, and that is worth about a third of a billion pounds. That constitutes, I think, the kind of action that she would expect. We now need to ensure that that is applied to the situation facing British Steel so that it can continue to operate and, indeed, to flourish.

[Several hon. Members rose—]

[Mr Simon Clarke (Middlesbrough South and East Cleveland) (Con)]

I thank my right hon. Friend for his statement, which will be hugely reassuring to my constituents who work at Skinningrove steelworks, most of whom live close by. It is vital that we prevent the closure of that plant, just as it is vital that we prevent closures at Scunthorpe and Lackenby and all the other sites that are affected. With that in mind, I welcome that the Government have provided the indemnity to the official receiver to try to keep British Steel operational while a buyer is sought. Beyond that, may I emphasise the case for public ownership or, indeed, a public-private partnership to serve as a bridge to new ownership? The priority is to save jobs. Everything else—all matters of ideology—must come second.

[Greg Clark]

My hon. Friend is absolutely right. We need to do everything we can. The situation is not entirely in the hands of the Government, because the official receiver is obviously responsible for the operations, and the trade unions and local communities want also to participate. This morning, the director general of UK Steel was asked whether he thought that the Government have done everything they can, and he said that he thought that we have. There is a recognition, which I am sure my hon. Friend will find in the sector, that we are serious about doing everything we can within our legal limits to help to give stability and a good future to this industry.

[Rachel Reeves (Leeds West) (Lab)]

This is a desperately sad day for our steel industry and those who work in it, and I am sure that the Business, Energy and Industrial Strategy Committee will want to look at what triggered the collapse of the company. The Government are now paying the wages of British Steel’s workers, which is welcome, and 25,000 jobs depend on production continuing. Will British Steel continue to take new orders under the Government’s official receiver to maximise the chances of the company’s survival? Will the Government guarantee to pay the wages and continue new production at the site until a new buyer can be found?

[Greg Clark]

I am grateful to the hon. Lady, and I would welcome her Select Committee, on which many Members currently in the Chamber serve, looking into this matter. There may be wider lessons to learn about how assets of such importance, where continuity is important, are held.

When it comes to paying the employees’ wages, we should be clear that the official receiver is responsible for that, not the Government. The Government have provided the official receiver with an indemnity, and his responsibility is to manage the business and to make a judgment about the business’s future prospects. He started today with a clear statement that the business continues to trade and that the workforce continue to be employed and to be paid. I hope that that was reassuring for the members of staff.

[Andrew Percy (Brigg and Goole) (Con)]

On behalf of the thousands of my constituents whose livelihoods rely on Scunthorpe, may I thank the Secretary of State for his personal interest and dedication? He has worked incredibly hard to try to find a solution here. I echo the comments of my hon. Friend the Member for Middlesbrough South and East Cleveland (Mr Clarke) about not applying any ideology to the ownership model moving forward. We want to keep this site together, and we do not want any cherry-picking if it can be avoided.

Will the Secretary of State also encourage the official receiver to work with North Lincolnshire Council and the local enterprise partnership, which commissioned and paid for a study into how British Steel could make better use of other parts of the site to generate money? Some of it could be used for energy generation or for housing, but such proposals have not been taken forward by the current owners. Will he ensure that the official receiver looks closely at that?

[Greg Clark]

I am grateful to my hon. Friend, and I will certainly do that. As I said, the official receiver is independent, but it is very much in his interests to maximise the opportunities on the sites that are now in his charge, and I dare say that that study will be helpful.

I completely agree with my hon. Friend that we should not take an ideological approach. We need to do what is right for the jobs and livelihoods of the people who work in and around those sites.

[Nic Dakin (Scunthorpe) (Lab)]

I thank the Secretary of State and his Ministers and officials for their work over a long period to get this business to where we all want it to be. I thank him for his statement, the commitments in it and his recognition of the strategic value of this industry and the business not just to the workers and families in my constituency and others but to the UK. Will he commit to ensure that these national assets are secure and to involve the workforce in all discussions through the excellent trade unions that work in the steel industry, so that they can be full partners as we take this business into a better future?

[Greg Clark]

I am grateful to the hon. Gentleman for his comments. The town that he represents has a proud history of steelmaking, and I want that to continue for many years. It should be making history in the future, as it has done in the past. It is vital in that to reflect the sense of community in the steel industry, both in particular places and across the country. Through my contact with the trade unions and the workforce, I will certainly involve them in the discussions about the future, and I will encourage the official receiver, who will want to benefit from those discussions, to do the same.

[Richard Harrington (Watford) (Con)]

The Under-Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend the Member for Pendle (Andrew Stephenson), said in answer to yesterday’s urgent question that he and the Secretary of State would leave no stone unturned to save British Steel. As a former Minister in this area, I can confirm that the Secretary of State’s commitment is second to none.

I was impressed with British Steel. Some of its management was very good, as was the workforce. The trade unions had a responsible attitude, and I want to pick out Roy Rickhuss of the Community union, who is very committed to this site. It seems to me that the company has a good business plan. It produces a product that people throughout the world want to buy, but one of the main dangers, and one of the reasons behind this situation, is the threat of WTO rules and the disgraceful tariffs that this country would be lumbered with if this House was not sensible and did not vote for a deal to rule out the burden that WTO rules would have on the steel industry.

[Greg Clark]

I am grateful to my hon. Friend for the hard work that he put into understanding and helping the steel industry during his time as a Minister. I know that it was well appreciated. I echo his tribute to Roy Rickhuss. My hon. Friend, the new Minister and I have always had a good relationship with the trade unions. I spoke to Roy Rickhuss and Steve Turner of Unite this morning, and they share the intention of everyone in this House to get the best possible future for British Steel.

One reason, although it is not the only reason, for the problems that British Steel is experiencing is the uncertainty around whether our future relationship with the European Union will involve tariffs—at least that is what the management say. Like my hon. Friend, I have a high regard for the management of British Steel, which needs to be taken at its word. We should resolve that uncertainty as quickly as possible, because that would be a major contribution that we can make to the future of British Steel.

[Mr Pat McFadden (Wolverhampton South East) (Lab)]

I am grateful to the Secretary of State for his approach in recent weeks and for his statement today. I thank him for his comments about the difficulty of turning off steel mills like a tap, because they cannot be turned off and on like that. We are all grateful to hear that the wages will continue to be paid for the moment and that the company continues to trade. Will he say anything more about the official receiver’s capacity to keep the situation going so that a new buyer can be found?

[Greg Clark]

I am grateful for what the right hon. Gentleman says. It is important that I should state, and that the House should recognise, that the official receiver is independently appointed by the court. The official receiver has a team of special managers from Ernst & Young who were appointed today, and their responsibility is to secure the best possible resolution for the assets they inherit. They have strict duties to the court, and they cannot be directed by me. My experience of the Insolvency Service and the official receiver is that they will want to recognise the importance of continuity, which I contend will help to secure the best value for the future of the site. From my conversations, I know they have that very much in mind, but it is important to emphasise that they are independent and do not take direction from me.

[Tom Pursglove (Corby) (Con)]

I impress upon my right hon. Friend the expectation of my constituents in Corby that he must pull out all the stops to secure the future of this business. Will he advise the House of whether any other steel businesses have indicated a willingness to take on the business at this stage?

[Greg Clark]

I certainly agree with, and will act upon, the first part of my hon. Friend’s question. It is a matter for the official receiver to consider, but during the course of the day—after all, it was just this morning that the company went to court—I have had some early indications of interest. I intend to be active in helping to promote these important assets to prospective investors, whether or not they are currently aware of the opportunity this may give them to invest in successful facilities in the future.

[Anna Turley (Redcar) (Lab/Co-op)]

I thank the Secretary of State for engaging with me constructively on the phone this morning, which I appreciate. I also pay tribute to all those at British Steel who have worked so hard, particularly over the last three years, to try to make a success of the company. I was proud to be at the launch at the Lackenby beam mill in 2016 when, out of the ashes of the SSI disaster, we felt that British Steel would rise and be a strong, fantastic brand. Obviously, today is extremely disappointing for those workers and for others all across the country.

I implore the Secretary of State to learn the lessons of SSI from 2016. He spoke movingly today of the importance of keeping the assets going, which is the No. 1 priority. We cannot turn this off because of the consequences for individuals, for families, for communities and for local economies. We are still facing the clean-up costs, three years down the line, of a rotting, decaying site that is still toxic. That cannot be allowed to happen again. We must ensure that the assets are maintained and preserved and jobs safeguarded.

[Greg Clark]

I grew up in the hon. Lady’s constituency, and I am very familiar with the landscape of steelmaking across Teesside. We need to learn the lessons of this. Across the country, including in Scotland, as we have heard, there have been times when the steel industry has been challenged. Not everything has been done in the best way each time. We should learn the lessons and apply them in this case. I hope that the official receiver will do that, and the indemnity is partly given to provide the official receiver with the confidence that the liabilities, especially the safety aspects, will be covered.

[Mark Pawsey (Rugby) (Con)]

The Secretary of State will know that, for any business to succeed, it is vital to look after the needs of the customer, so will he say a little more about the steps being taken to maintain the continuity of supply to manufacturers and contractors of the excellent, high-quality products produced by British Steel?

[Greg Clark]

My hon. Friend is absolutely right. The company benefits from very good relationships with customers, and I particularly mention Network Rail. This is important to both sides of that relationship. Network Rail has been particularly understanding and supportive during British Steel’s difficulties, and I hope very much that Network Rail will be part of the solution to resolving the difficulties facing the operations.

[Nick Smith (Blaenau Gwent) (Lab)]

The Government need to buy more UK-produced steel, yet the Ministry of Defence has refused to confirm that it will buy UK steel for the Navy’s solid support ships. Less than half of the steel currently bought by the Government is from the UK. How high will that percentage be in a year’s time to help avoid recurring steel crises?

[Greg Clark]

I hope the hon. Gentleman will acknowledge that we have taken some major steps. First, we have published the proportion of UK steel procured for each Department. Secondly, we have changed the procurement rules so that social and environmental factors can be taken into account in future procurement. Thirdly, we have published a future pipeline of opportunities. We have done all those things because I agree with his contention that, where we have good-quality British steel that can be used for purposes in this country, we should be making use of it.

[Martin Vickers (Cleethorpes) (Con)]

Like my colleagues, I congratulate the Secretary of State and his ministerial team on their efforts and on keeping Members informed. He knows north Lincolnshire well, and he will be mindful of the fact that some 200 people are employed at the port of Immingham either by British Steel or by associated companies. Can he give those businesses and their employees an assurance that, when Government decisions are made in future, those associated industries will be at the forefront of his mind?

--- Later in debate ---

[Greg Clark]

My hon. Friend is right that the impact of an industry such as steelmaking extends beyond its own limits, and he gives a good example of that. It is important that those impacts are reflected. Obviously, because the business is trading, suppliers can count on being paid now that they have the protection of the official receiver. I hope that will give them confidence, which was perhaps knocked in recent weeks when there were widespread rumours of the company’s cash-flow difficulties.

[Jessica Morden (Newport East) (Lab)]

Steelworkers in the community I represent will be very much thinking of those at British Steel sites who are affected by today’s announcement. Does the Secretary of State acknowledge that the uncertainty around thousands of jobs, including those in the supply chain, could pose a threat to other steel companies because of the potential weakening of the supply chain? The Government must show by their actions that they value manufacturing.

[Greg Clark]

It is important that we consider and act on the impact on the wider supply chain, and the group I propose to bring together to support British Steel will include representatives of the suppliers. I will set out further details of how we might do that in the days ahead.

[Jack Brereton (Stoke-on-Trent South) (Con)]

Energy-intensive industries like steel and other manufacturers in my constituency of Stoke-on-Trent South have come under increasing pressure from high energy costs. Will my right hon. Friend outline more of the measures that the Government are taking to address those high energy costs?

[Greg Clark]

My hon. Friend is absolutely right. The ceramics industry shares the concerns of the steel industry in needing relief from high energy costs. The industrial energy transformation fund is available to the ceramics industry, and I hope it will come forward with proposals that can reduce energy consumption and, in that way, reduce energy bills, so making industry more competitive—that applies to ceramics as it does to steel.

[Peter Kyle (Hove) (Lab)]

I, too, am grateful for the Secretary of State’s approach to this challenge. Hours before the collapse, the Under-Secretary of State for Business, Energy and Industrial Strategy, the hon. Member for Pendle (Andrew Stephenson), said from the Dispatch Box yesterday that no stone had been left unturned in the run-up to this, which implies that the collapse was inevitable. I do not believe such a collapse is ever inevitable. First, as we move forward, will the Secretary of State reconfirm that he will do everything he possibly can to make sure this plant carries on trading for as long as it takes to get back on its feet? Secondly, will he do everything he can to get a sector deal, for which the steel industry has been crying out for a very long time, up and running?

[Greg Clark]

I will continue to do everything I can. It is important to level with the House that I do not run these operations and these assets—they are under the control of the official receiver—but I will do what I can to interest prospective partners with a long-term interest in this. I will continue to leave no stone unturned. As with the solution to the emissions trading scheme problem, I will be creative where I possibly can be in finding solutions.

The second point was—

[Peter Kyle]

The sector deal.

[Greg Clark]

The sector deal was proposed in the industrial strategy. I am keen that there should be a sector deal in the steel industry, but the essence of a sector deal, as the hon. Gentleman knows from his work on the Business, Energy and Industrial Strategy Committee, is mutual investment by both sides. There is a good plan there, but one difficulty at the moment—British Steel is a good example of this—is that it has not been possible to see the investment coming in that is the hallmark of every sector deal. I very much want us to have that, and I hope that in talking to new partners we might have an opportunity for that sector deal to be completed, because in every sector deal we have the new investment that is required.

[Jeremy Lefroy (Stafford) (Con)]

I entirely support what my hon. Friends the Members for Middlesbrough South and East Cleveland (Mr Clarke) and for Brigg and Goole (Andrew Percy) have said about an innovative public-private approach to this. My right hon. Friend the Secretary of State talked in his statement about the accounting officer’s assessment, which said:

“It would be unlawful to provide a guarantee or loan”.

Will he confirm what the situation would be with regard to equity capital, in the context of a public-private partnership or other innovative solutions such as those that have been mentioned?

[Greg Clark]

I am grateful to my hon. Friend for that. As I said to colleagues, we should not allow any ideology to influence these decisions, but he is right to draw attention to the accounting officer’s opinion and advice on this, which includes an assessment that makes it clear that the option of whole or partial nationalisation of the company, temporary or permanent, does not change the assessment of legality. The reason for that is that it is a question not of the ownership but of the cash needs of the company. Whether a business is owned in the public sector or the private sector, the test of commerciality has to be met for the Government to put cash in; that applies whichever sector it is in. That is the legal test on which this hinges.

[Tom Brake (Carshalton and Wallington) (LD)]

The action taken so far is welcome, but this is still clearly a disturbing time for workers and suppliers. We heard earlier that British Steel invested £40 million in Ascoval—the Select Committee may want to look at that. At the same time, the French state and local government bodies invested an equivalent sum of £40 million in that steel mill. Is there anything the Government could learn from that? May I encourage the Secretary of State to be creative in the way he was suggesting he would be, by setting up a Brexit fund that could support businesses struggling as a result of Brexit?

[Greg Clark]

It is not a question of having the funds available; it is a question of the legality of being able to deploy them. The right hon. Gentleman will know, as the House will, that I have a good record of being able to invest alongside private businesses where this secures jobs and innovation. That is absolutely something that I would do in the steel sector. One legal requirement—we are meeting the legal requirements—is to show that there is co-investment from a private investor. In the situation in France, there was substantial investment on both sides. The same was not available in this case, which was one reason why the advice that I was given was of the nature that it was.

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

We have been here on two or three occasions, including with GKN and Bombardier, so one wonders where we are going, as the steel industry is vital to manufacturing in this country and, more importantly, to the defence industry. I thank the Secretary of State for his statement, but I can tell him that I worked at Rolls-Royce when it collapsed in 1971 and there is no worse situation an employee can find themselves in; that situation went on for weeks, until eventually the Heath Government had to semi-nationalise it. I have the feeling that you may be back here in a couple of weeks’ time if you cannot find a buyer, so you will really have to consider that. I hope you will consider that, because if you do not, you will be inflicting a lot of pain on a lot of good employees who work very hard. Once you have experienced something like that, you never forget it.

[Mr Speaker]

The hon. Gentleman raises a very serious point, but I just gently observe that I will not find a buyer and I will not be giving any consideration to this matter whatsoever.

[Greg Clark]

I get the hon. Gentleman’s gist; I know what he requires. He is right to call attention to the fact that, notwithstanding the intentions that everyone in the House has expressed, today is a day that no one in Scunthorpe, in Skinningrove or on Teesside wanted to see. It is a very worrying day; people will go to bed tonight very concerned about their future. We cannot resolve this overnight, but we can resolve to do everything we practically can to make a good future possible. I am grateful for the support and commitments from across the House that we will all do precisely that.

[Vernon Coaker (Gedling) (Lab)]

May I join others in welcoming the Secretary of State’s commitment to do all he can to prevent the demise of one of our great strategic industries? In the light of that, will he explain something to the House? In his statement, he said:

“The Government have provided an indemnity to the official receiver, who is now responsible for the operations.”

Will he explain a little more about what that actually means, how long that will last and whether it will give the time for the official receiver to find another owner for the steelworks? Some clarity on that would be really helpful.

[Greg Clark]

If I am legally permitted, and I do not see why I should not be, I will put the letter of indemnity in the Library of the House. If I am not permitted to do so, I will find a way to share it, perhaps through the Select Committee. It reflects the fact that an industrial facility such as a steelworks is a hazardous environment, with a lot of risk. Given that the official receiver is legally responsible for that site, he should be fully indemnified. So the indemnities arise, for example, through liabilities that might arise from carrying out the proper performance of his duties as liquidator in maintaining, securing and funding the ongoing operation of the company’s undertakings and distributing its assets. So it is the work that the official receiver is engaged in that has the backing of this indemnity from the Treasury from the outset—from this morning, when the letter was sent.

[Chris Elmore (Ogmore) (Lab)]

It is clear from the Secretary of State’s statement that he cares deeply about the issue, but may I take him back to the question from my hon. Friend the Member for Hove (Peter Kyle) on a sector deal? The Secretary of State talks about why the deal cannot take place, but may I put it to him that the industry clearly is suffering and is not cash-rich and that could be a good reason to implement the sector deal now and take that risk to ensure that we protect jobs and the industry in the future? If there are no other reasons why the deal could not take place, that would at least give us some assurances for the future.

[Greg Clark]

I am grateful for what the hon. Gentleman says. I am keen to have a sector deal in the steel industry. The nature of sector deals is the Government investing in certain capital improvements, research and development programmes or training programmes, and the industry investing alongside them. That is the essence of the deal. As is evident in the case of British Steel, it has not been possible for it to invest, which is why it has not been possible to conclude the deal. Given that, he makes a reasonable point: perhaps separately from the sector deal, other things could be done for a sector that is going through what is evidently a challenging time, not just here but around the world.

Industrial Strategy (West Midlands)

Greg Clark Excerpts

Thursday 16th May 2019 Written Statements

[The Secretary of State for Business, Energy and Industrial Strategy (Greg Clark)]

Our modern industrial strategy is a long-term plan to boost productivity and earning power for people throughout the country.

Since 2010, local leaders, working in partnership with Government, have delivered historic city deals with Greater Birmingham and Solihull, Coventry and Warwickshire and the Black Country. Having secured significant growth deal funding, the west midlands then came together as one to capitalise on these important new powers and establish new leadership through two successful devolution deals.

Building on these strong foundations, we set out in the modern industrial strategy to work in partnership with places to develop local industrial strategies. Local industrial strategies are central to our aim of creating prosperous communities across the country. They are being developed locally and agreed with Government. They are long term, based on clear evidence and aligned to the modern industrial strategy.

Today we launched the first of these strategies—the west midlands local industrial strategy. This has been developed locally by the West Midlands Combined Authority, led by Mayor Andy Street, supported by the local enterprise partnerships and agreed with Government.

This strategy sets out how, in partnership with west midlands local leaders, we will work to deliver on a range of commitments including:

delivering on our future of mobility grand challenge, which aims to be at the forefront of the development of cleaner, safer, easier and more reliable future modes of transport, cementing the west midlands’ position as the UK’s automotive heartlands;

playing a leading role in the UK’s trials of connected autonomous vehicles, with the west midlands aiming to deploy the first fully operational connected autonomous vehicles in advance of the 2022 Commonwealth games;

driving investment into electric vehicle manufacturing in the region, completing the UK battery industrialisation centre and maximising the impact of the Faraday battery challenge;

putting the west midlands at the heart of transport innovation in the UK by delivering the UK’s first large-scale 5G test bed; and

helping meet the artificial intelligence and data grand challenge by supporting the development of a west midlands translational medicine and med-tech commission to accelerate the “lab to patient” ecosystem.

The west midlands is a global force and a major part of the UK economy, generating £99 billion of GVA—5% of UK output. The region is growing fast, with output up 27% over the past five years. A record number of people are in work and the lowest number are out of work. Productivity is increasing too, at twice the rate of the UK in 2017-18, while carbon emissions have reduced by 18% over the last five years—showing that while we grow our economy we can reduce the impact on our planet.

The west midlands is a region in renaissance. Together, this work sets the long-term future for how the west midlands can fully realise its potential

A copy of the west midlands industrial strategy will be placed in the Libraries of both Houses.

[HCWS1559]

British Steel: EU Emissions Trading Compliance

Greg Clark Excerpts

Wednesday 1st May 2019 Commons Chamber

[The Secretary of State for Business, Energy and Industrial Strategy (Greg Clark)]

I am grateful for the opportunity to make this statement to the House today. I wish to inform the House of a commercial agreement that the Government entered into with British Steel on 24 April. As you know, Mr Speaker, I wanted to update the House at the first available opportunity now that the market-sensitive elements of the resulting transaction have concluded.

The agreement with British Steel relates to its obligations under the EU emissions trading scheme. The ETS requires heavy industry and power producers to obtain and surrender allowances equal to their level of carbon emissions on an annual basis. Companies that are the most exposed to international competition are allocated a proportion of free ETS allowances annually. For years, many companies have used these free allowances to comply with their obligations for the previous year.

Just over four months ago, in December 2018, the European Commission suspended the UK’s ability to auction ETS allowances until the withdrawal agreement is ratified. This was decided in order to maintain the integrity of the European carbon market in the event that the UK left the EU without a deal on 29 March this year. This position means that free allowances for 2019 have not yet been issued.

The withdrawal agreement negotiated with the European Union allows for full and continuing membership of the EU ETS until the end of December 2020. Therefore, once ratified, we will have the full legal basis immediately to issue free 2019 allowances. However, the decision of this House not to vote in favour of the withdrawal agreement means that it has not yet been possible to proceed on this basis. This has meant that UK businesses have unexpectedly, since December, been left without access to 2019 free allowances. All members of this House should reflect on the real-world impacts of decisions that we make in this place, or the lack of them, on the businesses on which many thousands of jobs and whole towns depend.

Despite the continued uncertainty, all UK installations have now met their 2018 obligations in full—before yesterday’s compliance deadline of midnight last night. My Department reminded all participants that they still had a legal duty to meet their obligations for 2018 and that the UK is committed to upholding our environmental standards and continuing to comply fully with European law while we remain a member of the EU.

However, until this week, British Steel had not complied with its obligations. British Steel, as many Members know, employs 4,200 people directly in the UK—in Scunthorpe, Skinningrove and Redcar—and thousands more in its associated supply chains. As the second biggest steel maker in the UK and one of only two integrated steel-making sites in the UK, the assets at Scunthorpe and in the north-east are of significant importance to the UK. They are a major supplier to rail networks across Britain. As the only UK steel plant that produces the rails used on our tracks, they provide almost all those procured by Network Rail, as well as supplying ScotRail, Transport for London and Translink in Northern Ireland, and they export a large volume of their product across Europe.

British Steel approached my Department earlier this year to explain that the absence of the expected 2019 free allowances left it unable to comply with its 2018 obligations. If it had failed to do so by last night’s deadline, it would have attracted an immediate and unremovable fine of £500 million, on top of the continuing liability of about £120 million, putting the company under significant financial strain.

The Government were therefore left with a choice: either to see British Steel be unable to comply with its legally binding obligations, creating a liability of over £600 million; or to consider whether there was a path to allow it to comply within the strict bounds of what is possible under domestic and European law. After careful consideration, the Government took the decision to enter into a short-term bridge facility, valued at about £120 million, under section 7 of the Industrial Development Act 1982, at an interest rate of LIBOR plus 7%.

The effect of this agreement is that the Government have, in the last week, purchased the necessary emissions allowances on behalf of British Steel. In return, under a deed of forfeiture, ownership of the company’s 2019 allowances will now be transferred to the Government once they are released. Through the subsequent sale of these 2019 allowances, we expect the taxpayer to be repaid in full. The 2019 allowances are more than are needed to fulfil the 2018 obligations, and all of them will come to the Government.

The terms of the deal ensure that if the price of allowances were to rise, the taxpayer would receive half of any financial upside once the allowances are sold back into the market. To ensure the taxpayer is protected in the event that allowances were to fall, under the terms of the deal, British Steel has been required to underwrite any shortfall and is covering the cost of arranging the facility. The price of carbon allowances has been rising over the past two years, and the Exchequer received £1.4 billion from auctioning allowances in 2018, up from £533 million in 2017.

In the unlikely event that we leave the EU without a deal, we are engaging with the Commission about the implications for our continued participation in the EU ETS. However, should an agreement not be reached, the Government are able to implement a domestic scheme that provides security against the loss of EU-derived allowances. I can confirm to the House that, following the purchase of the necessary allowances, British Steel has been able to comply with its 2018 EU ETS obligations in full.

I want to be clear with the House that the agreement reached with British Steel is a unique one in exceptional circumstances. My Department’s assessment, which has been agreed with the Treasury, shows that the deed of forfeiture offers value for money to the taxpayer, with benefits exceeding the costs—meeting the accounting officer test. This is set against the alternative of British Steel failing to comply and causing a business with an annual turnover of £1.4 billion to have an instant £600 million financial pressure.

This position was supported by the independent Industrial Development Advisory Board, which assessed the proposal in its statutory role and agreed with the value-for-money assessment. I am placing in the Libraries of both Houses a copy of my accounting officer’s letter to the Chair of the Public Accounts Committee and the Comptroller and Auditor General, and I have written to the Chairs of the Business, Energy and Industrial Strategy Committee and of the Treasury Committee. I have been advised that the arrangement is fully compliant with the state aid rules that apply to the steel sector, which require its terms to be commercially comparable.

While this was an unenviable situation to face, the Government believe that the agreement reached with British Steel to ensure that it could comply with its legal obligations represents a responsible course of action. I hope this is a view that Members across this House will also support, and I commend this statement to the House.

[Rebecca Long Bailey (Salford and Eccles) (Lab)]

A number of industry voices have welcomed this announcement. As Unite the union has commented today, British Steel workers and those in the supply chain will be breathing a sigh of relief at this loan. However, it is regrettable that the Government’s handling of the Brexit negotiations has brought us to this point. The Government have been warned about the uncertainty over the EU ETS for over two years, and the Prime Minister’s threats of a no-deal Brexit for over two years have caused significant uncertainty for the steel sector. UK Steel, the body representing the sector, warned in January that a no-deal Brexit was nothing short of a disaster for the sector, but despite the warnings, the Prime Minister ploughed on and the risks to the viability of our manufacturing sector have been plain to see.

This has had an impact on British industry, as it continues to fight off uncertainty. That is why it is imperative that we continue in this House to work across parties for a solution that will reach a consensus; I know that the Secretary of State is committed to that. But he must also note that this is part of a long track record of this Government standing by as our manufacturing faces increasing pressures, both domestically and internationally.

When Donald Trump imposed a 25% tariff on our steel, the Government’s response was lukewarm at best, and the Prime Minister’s refusal to fight for the sector was telling. The Government’s Trade Bill is set to make the sector even more vulnerable to steel dumping. The Government have been woefully silent on the steel sector deal proposals from industry and unions about the issues that are stifling competition, such as electricity prices: UK industries pay up to 50% more than their European counterparts. Furthermore, the Trade Remedies Authority has been described by the Manufacturing Trade Remedies Alliance as possibly the weakest in the world.

Will the Secretary of State provide some clarity for the steel sector today by describing the measures that his Government will take to ensure that the UK’s low carbon infrastructure, such as offshore wind turbines, and other projects, such as the Royal Navy’s new fleet solid support ships, are built using UK steel? Will he confirm what action he is taking on publishing a steel sector deal and incentivising both public and private investment in the sector? Will he also confirm what action he is taking on business rates and energy costs right across the sector?

This is welcome news, but as I have said it is not enough on its own to provide the certainty and assurances that workers and businesses right across the steel sector need. I know that the Secretary of State shares my belief that steel is one of the jewels in the crown of British manufacturing, and I hope he can assure the House today that this is just the first step in a long list of policies dedicated to supporting the sector going forward.

[Greg Clark]

I thank the hon. Lady for her welcome for the steps that we have taken. She is absolutely right that if a Brexit deal had been agreed, this would not have been necessary: the deal that has been proposed and voted on three times in this House would have made this statement unnecessary. I gently point out to her that the company itself, British Steel, wrote to constituency Members in December last year, when the agreement had been reached in the European Council, saying in terms:

“We believe the deal that has been tabled and agreed with the EU is within the best interest of UK business”

—British Steel—

“and we urge you to think about voting in favour of the deal.”

Unfortunately, there was not a majority in the House for the deal, and part of the problem was that Opposition Members did not vote for it. I welcome the constructive discussions that the hon. Lady and I have been having to now come to an agreement, but had Opposition Members voted according to the advice of the company, this would not have been necessary.

I also take issue with what the hon. Lady said about standing by. I do not think anyone could describe this initiative as “standing by”—quite the reverse: it is an agile response to an unwelcome situation, and I would have thought that she would commend it. She was not in the House at the time, but I remember well when the steel making on Teesside was substantially closed down, mothballed, during the last Labour Government, without such a response to do what we could to keep it in operation.

On energy prices and suchlike, I should say that under the last Labour Government steel production and employment in steelmaking in this country fell by 50%.

[Rebecca Long Bailey]

We don’t need a history lesson!

[Greg Clark]

Well, history is important in this because one of the reasons why our electricity prices have been high compared with others is that in the last five years of the previous Labour Government, industrial electricity prices rose by 64%. What we have done since then is provide £291 million in compensation for energy-intensive sectors, to correct some of the inflation that took place during that time.

As the hon. Lady knows and has acknowledged, my firm view is that in a world where manufacturing in this country and its opportunities around the world are undergoing a revival, there is absolutely no reason whatever why British Steel should not make a major contribution to that, right across the country. I am keen that we should conclude a sector deal with the steel sector. There have been important discussions. All sector deals require co-investment from the Government and the companies. No one is keener than I am to conclude one: as I hope is evident from my statement today, I am prepared to act in support of a sector that is important—not just for the economy, but for the towns across the country in whose lives it plays such a prominent role.

[John Redwood (Wokingham) (Con)]

If the Government had kept their word and taken us out on 29 March without the withdrawal agreement but tabled a comprehensive free trade agreement, we would not be in this mess. What are the Government going to do to have a proper industrial strategy, which can work only if there are more adequate supplies of much cheaper power?

[Greg Clark]

What my right hon. Friend has said is not the case. Our legal obligations for 2018 would be there, and the company would have to comply. Had we left without a deal, the company would be in the position that it is in.

When it comes to the competitiveness of the UK steel sector, it is clear that the markets are international and, especially in the case of British Steel, very substantially across the continent of Europe. It has been very clear that we need to make sure that we continue to trade on terms at least as favourable as we do at the moment with the European Union, which is why both British Steel as a company and the steel sector have been absolutely clear, in terms, that we need to ratify an agreement such as has been proposed, and we need to do it very quickly.

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

I thank the Secretary of State for early sight of his statement. I also put on the record my welcome for the action taken by the Government to protect 4,200 jobs; it is really important that we protect the remaining heavy industry and manufacturing facilities in the UK. That said, questions still need to be answered. The Secretary of State confirms that this is a loan, on commercial terms, to avoid the risk of a fine of half a billion pounds to British Steel. To mitigate that risk of a fine, what was to prevent British Steel from just borrowing from the market, given that it is borrowing from the Government on commercial terms? Why did this go to the eleventh hour? It seems that what is almost a gamble has been taken with British Steel in the discussions with the Government. Will the right hon. Gentleman explain that? Were the risks identified when the Government were negotiating the extension to article 50?

In his statement, the Secretary of State talked about the need for Members to reflect on the impact of decisions or non-decisions in this place. That seems like another classic attempt to blame other Members for the Brexit mess we are in. It is not our fault—there has been a lack of leadership from the Government. For two years, the Prime Minister was telling us that no deal was much better than a bad deal, then all of sudden, near the end, it was “my deal or no way at all.” That withdrawal agreement suffered the biggest parliamentary defeat in history. Surely, the Government should have reflected on that, instead of coming back here time and again and blaming this House for the Brexit mess.

The situation is further amplified by the fact that the statement says that in the case of no deal the Government are working with the Commission about future participation in the EU ETS scheme. Surely, if the Government had made preparations for a no-deal Brexit those discussions would have already been concluded and a way forward identified.

How do we get transparency and discussions with Government and industry for companies such as British Steel and Nissan, for which back-door deals were done previously? Who misses out? How are these companies identified? Why, for example, was it left to the SNP Scottish Government, rather than the UK Government, to protect Scottish steel?

Finally, this situation proves the need for proper investment in carbon capture and storage. Peterhead has sufficient storage, and it will be ready to be utilised and operational by 2023-24. That would tie in with the Teesside cluster and help the steel industry. If the Government can find £100 million overnight for a loan, why do they not find further money for direct strategic investment, which will help heavy industry and the low carbon position?

[Greg Clark]

The hon. Gentleman started out welcoming the action we have taken and ended up, it seems, withdrawing that support. I will take the first half of his statement at face value and recognise that we have taken action to deal with an unusual and urgent problem, and have done so in a way that I think has displayed some agility. Advice has been taken, which will be fully disclosed to the Committees of the House, on the terms of the agreement and how it can be commercially benchmarked. Clearly, borrowing against allowances with a short period of time before the deadline—it is in the company’s gift and the company’s obligation to comply—requires moving quickly. The judgment we took was that we wanted to make sure we could secure against the possibility of the fine, and do so in a way that was commercially benchmarked. We have done that and it can be scrutinised. The deadline was last night. The fact that I have come immediately to this House to make a statement and publish the accounting officer’s advice I hope illustrates the transparency with which we have proceeded.

On the contingency that this arrangement has had and whether a deal has been approved, I put it as a matter of fact that the reason we had to make this transaction was that we have not, as a House of Commons, agreed a Brexit deal. We have not ratified a Brexit agreement. I said to my opposite number that I welcome the constructive discussions that are taking place. I hope that in the days and weeks ahead, the hon. Gentleman’s party might approach them in the same spirit and try to come to an agreement so that not just the steel industry but every industry in the country can have confidence in the terms of our relationship with Europe in the years to come.

[Sir Oliver Letwin (West Dorset) (Con)]

I congratulate the Secretary of State. My experience in government was that the most important things that Secretaries of State do are those least noticed. They are the crises that do not happen. He has, with supreme competence, dealt with what could have been an extraordinarily tricky situation, as all those involved in maintaining British Steel in this country know.

Is the Department taking steps to ensure that when we leave, as I hope, in an orderly way in the relatively near future with an agreement with the EU, there is a proper substitute for the ETS on a domestic basis that will complement the measures that the Secretary of State for Environment, Food and Rural Affairs is taking in a whole realm of cognate spheres?

[Greg Clark]

I am grateful for the endorsement of my right hon. Friend, not least because in the previous Government he played the role he has ascribed to me with some deftness and success on many different occasions. He is absolutely right that agreeing to a withdrawal agreement would allow our continued participation until at least December 2020, giving us the time to put in place different arrangements, which would be in our gift. One reason we felt that it was important that British Steel should comply is that the institutions that drive compliance with emissions reductions targets should be respected. We want to send a clear signal that we expect the targets to be respected and implemented. That will take place while we are a member of the European Union and, as my right hon. Friend indicates, afterwards too.

[Rachel Reeves (Leeds West) (Lab)]

I welcome the Secretary of State’s decision. Without it, there would be huge job losses in the industry. This crisis at British Steel has been caused by the uncertainty over our future membership of the EU’s emissions trading scheme. Given that half of steel manufacturing in this country is exported to the EU, our relationship with the EU matters hugely for the future. Why did the Government allow us to get into the position where British Steel had to pay upfront for its allowances, even though we remain a member of the EU today? Will the Government confirm what the liability to the ETS will be of British Steel and other UK steel producers should we leave the EU without a deal?

[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.

[Wera Hobhouse (Bath) (LD)]

No doubt carbon credits are a useful way of managing carbon emissions, but Brexit or not we need to become carbon-zero in a very short period of time. I wonder whether the Government are actually taking that urgency seriously. What are the Government doing continuing to support the fracking industry, which is a fossil fuel industry? Surely all we do needs to go into renewable energy?

[Greg Clark]

The hon. Lady should know that we have one of the strongest records in the whole world in implementation and delivery of emissions reductions. It is important to acknowledge that mechanisms such as carbon pricing are one of the foundations of that, so it is important that the rules are respected. We are about to have a substantial debate on our next steps. I hope she will contribute to that, as am I. Perhaps we might have some further exchanges later this afternoon.

[James Heappey (Wells) (Con)]

As important as the continuation of the ETS post Brexit surely is, does my right hon. Friend share the view that the really long-term solution for both heavy industry and a zero-carbon economy is the advent of carbon capture and storage, and hydrogen? What measures are the Government taking to advance those causes?

[Greg Clark]

I agree with that. My hon. Friend gives me an opportunity to respond to what the SNP spokesman, the hon. Member for Kilmarnock and Loudoun (Alan Brown) referred to and I neglected to comment on. My hon. Friend is absolutely right that there is the opportunity for energy-intensive industries that are significant emitters to capture that carbon. We have a competition, which is being run at the moment, and sites such as Teesside have put in very impressive and attractive bids. I and my colleagues in Government want Britain not just to be one of the leading developers of the technology of CCUS, but to implement it to the advantage of our energy-intensive industries.

[Stephen Kinnock (Aberavon) (Lab)]

The term “cliff edge” is probably overused, but there is no doubt that British Steel was taken to the cliff edge on this one, with incredibly last-minute deals and negotiations. What steps will be taken to ensure that lessons are learned from this experience? Could the political declaration on the future relationship be amended to secure a commitment to the ETS? If not, we will end up at another cliff edge at the end of the transition period.

[Greg Clark]

The hon. Gentleman talks about taking us to the cliff edge. It is a legal responsibility on the part of each emitter to comply with its requirements to surrender allowances. Notice was given, and as some of my hon. Friends pointed out, every other company acted on that. We were presented late in the day with a choice I described as unenviable. We responded to that pragmatically, and I detect in the hon. Gentleman’s tone a recognition that this is the right step. To avoid repetition of this situation, the advice from the company and the industry is clear: the House needs to come together, long before 31 October, and agree a withdrawal agreement that would result automatically in the ability to release allowances, not only for this year but for the following year too.

[Tom Pursglove (Corby) (Con)]

I very much agree with the steps taken by my right hon. Friend. However, is he essentially saying that this whole situation has arisen because the United Kingdom, and specifically our steel industry, is being punished by the European Union, despite our still remaining a member?

[Greg Clark]

I would not put it that way myself. The suspension was put in place because we were liable to leave on 29 March. Given that the year to which the allowances refer is the calendar year from January to December, it was the observation that, as things stood, we were unlikely not to be a member of the scheme for the great majority of that year; now that we have agreed an extension of up to 31 October, that is clearly a different matter. The discussions we have had so far with the Commission have been constructive in recognising our ability to issue new allowances.

[Jonathan Edwards (Carmarthen East and Dinefwr) (PC)]

To what degree does the Secretary of State agree with the assessment in the Financial Times on 16 April that this situation could have been avoided had the company not sold surplus allowances from previous years, and therefore that this situation is a result of management failure by the private equity firm that owns British Steel for which the public are now expected to pay?

[Greg Clark]

The hon. Gentleman reflects an accurate point: if the allowances had not been sold, they would be available to discharge the liability. This is by no means a unique practice; across industries and firms, it is a fairly common way to proceed. However, it might well command the attention of the House as to whether it is the best way to proceed.

[Martin Vickers (Cleethorpes) (Con)]

I welcome the Secretary of State’s statement. It will be particularly welcomed by my many constituents who work at the Scunthorpe works, which, as he highlighted, supplies most of the rail network with track, which of course would have to be imported were the Scunthorpe works to close. Does he agree that this highlights that there is a cost to tackling climate change? It is far better that we approach that in a realistic, well-balanced way, such as the Government propose, rather than giving way to unrealistic demands from other groups.

[Greg Clark]

I am grateful for my hon. Friend’s welcome. I know that his constituents would have faced a worrying time had this liability crystallised on the company. In fact, British Steel has free allowances to cover its emissions. It is not a question of this being, as it were, a punitive tax; because British Steel operates in an internationally competitive sector, it has allowances to cover the costs that it incurs. It is a question of matching up the timing of the new allowances with its obligations. In this case, we found a way to square that circle.

[Jessica Morden (Newport East) (Lab)]

Today’s statement is about specific support for British Steel, and I completely understand the position we are in. However, as the hon. Member for Monmouth (David T. C. Davies) said, other companies out there that have incurred significant costs will ask what support the Government might offer to them. What will the Minister say to them?

[Greg Clark]

The hon. Lady will know that, through the industrial strategy and our work with particular sectors, we have a strong record of investing in the future potential of industries. Steel is part of that, but as she will know, we have increasingly deep working relationships—whether with the automotive, life sciences or the creative industries, or other sectors such as construction—to make sure that we capitalise on our strengths in this country, which are innovation and discovery, putting ourselves at the cutting edge. That is available and is being well exploited across the economy. I hope and expect that the steel industry will be part of that investment in the capability and capacity to prosper in the future.

[Bill Grant (Ayr, Carrick and Cumnock) (Con)]

I thank the Secretary of State for his statement and his support for British Steel. The steel industry, by its very nature, has very high energy costs. What action is my right hon. Friend or his Department taking to reduce those costs and, in parallel, to reduce pollution from the steel industry, which is very important for the future of the United Kingdom?

[Greg Clark]

I mentioned—it was announced in the spring financial statement—a new industrial energy efficiency fund worth a third of a billion pounds to partner with energy-intensive businesses in changing and upgrading their technology, so that they both consume less energy, and therefore have lower costs, and also produce lower emissions. As I said to the shadow Secretary of State, since 2013 we have provided nearly £300 million to energy-intensive industries in compensation for some of the effects of high costs. However, the way forward is energy efficiency, and that is the commitment that we made and backed in the financial statement.

[Mr Paul Sweeney (Glasgow North East) (Lab/Co-op)]

I welcome this measure but, again, it is a reaction to potential failure, rather than a proper, coherent plan for the industry. That needs to be gripped robustly. Does the Minister accept that there is insufficient capacity within the European emissions trading scheme to provide free credits to companies subject to anti-competitive measures, dumping and distortions caused by firms trading outside the ETS? We need to increase the level playing field available to British Steel operating in that sphere, in which it is subject to distortions caused by firms outside the ETS.

[Greg Clark]

The hon. Gentleman is right that we need to be vigorous in our trade defence mechanisms. Steel is a sector that all Members know is subject, and has been over the years, to dumping by global competitors. Through the G20 forum in particular, at which I have represented our country, we have been vigorous in pressing for the strongest measures against anti-competitive practices such as that, and we will continue to do so in the future.

[Sir Mike Penning (Hemel Hempstead) (Con)]

I apologise for not bobbing, Mr Speaker; my back is showing my age and its abuse on the rugby field over the years, so I waited until the very last moment.

I think the Secretary of State has handled this brilliantly well. There was a danger that we stepped in really early on, as suggested by Opposition Members. The market needs to sort this—companies have obligations—and only as a last resort should taxpayers’ money be brought into the equation.

[Greg Clark]

I am grateful to my right hon. Friend. He is absolutely right, and I do not want to say from the Dispatch Box that I have engaged again in this type of transaction. The obligations are with the company, and it would obviously have been much better had it been able to discharge them itself. However, sometimes we have to take decisions in office based on the evidence of the consequences. I felt, and was supported by advice that I received, that the responsible action in this case was to make this facility available, with the security that we have obtained, and to do so in time to allow the company to meet its obligations by the deadline.

[Nick Smith (Blaenau Gwent) (Lab)]

British Steel workers will be glad that the Government have stepped in here, but in Wales 9,000 jobs rely on this whole sector, and many workers and their families in south Wales will be troubled by the wider situation. Can the Secretary of State please confirm whether the new fleet solid support ships will be built with UK steel?

[Greg Clark]

The question of procurement is a very important one. We have changed the rules so that local economic, social and environmental impact can be taken into account in those procurement decisions, and we have also published for full disclosure for every Department and arm’s length body the details of what steel they procure.

[Nick Smith]

Yes or no?

[Greg Clark]

As the hon. Gentleman knows, we cannot specify under the procurement regulations that the work should go to a particular firm, but we can make it possible to take in local effects and be transparent as to the decisions taken. Within the legal constraints, which the industry and the unions well understand, we are acting to make sure that the process is much more public than it has ever been before.

Environment and Climate Change

Greg Clark Excerpts

Wednesday 1st May 2019 Commons Chamber

[The Secretary of State for Business, Energy and Industrial Strategy (Greg Clark)]

This excellent debate has been vigorous and well subscribed, as befits a subject of such profound importance. What has been established so clearly is that a deep sense of responsibility for protecting and improving our environment is shared across both sides of this House.

I pay tribute to the hon. Member for Newport West (Ruth Jones) for her maiden speech. She used warm words about her predecessor and said that he used his sense of humour to engage with people. I think she has bought his book on how to be an MP, but her speech today showed that she is already making great strides, so I do not think that she needs too many lessons. Having been in front of her predecessor at the Select Committees on which he served, I know that he could also be a fierce interrogator, and I am sure that she will learn that skill as well.

Like the hon. Member for Salford and Eccles (Rebecca Long Bailey), I pay tribute to the right hon. Member for Doncaster North (Edward Miliband), who gave a profound speech, reflecting on some of the lessons of leadership both in his term as Secretary of State for Energy and Climate Change and as leader of the Labour party. He was right in saying that moral authority comes from being able to act, and that is one of the reasons why, even though we are a small country in terms of the contribution we make to emissions, we have the moral authority that comes from being a leader. We must continue that with our action. He pointed out that we of course have different visions of how we get there, which is legitimate, but that is not to decry the motivation we share.

My hon. Friend the Member for Truro and Falmouth (Sarah Newton) offered a good example of what we can do in our constituencies. We should look to the climate vision on her website to see whether we can emulate it across all our constituencies to embrace our role as local leaders, as well as leaders in this place. My hon. Friend the Member for Copeland (Trudy Harrison) reminded us that nuclear has played and will play a distinguished role in ensuring that we can generate power free from emissions.

Finally, I pay tribute to my right hon. Friend the Member for West Dorset (Sir Oliver Letwin) whose work in opposition on producing a paper on the low-carbon economy established considerable consensus across this House and was seminal in shaping the Climate Change Act 2008, which the right hon. Member for Doncaster North led—I know that he will recognise that contribution.

The tone of this debate underlines why we should not create division in this House where there is none. When it comes to environmentalism and climate change, one of this country’s proudest achievements is that we have displayed to the world in international forums an impressive national determination to lead our country and the world, with the baton of responsibility being passed from one Government to their successors.

Mrs Thatcher, as many Members have said in this debate, was the very first global leader to acknowledge at the UN

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

Her speech in 1989 bears rereading for those who may not be familiar with the profundity of her anticipation of the problems with which we are grappling. It is not just the anticipation of the problems; she was a woman of action. If we think back to what she did—it was thought impossible at the time—virtually to eradicate CFCs across the world. She described the task of Government

“to follow the best advice available. To decide where the balance of evidence lies. And to take prudent action.”

Over the years, we have done that.

The last Labour Government passed the Climate Change Act with cross-party support, and the right hon. Member for Doncaster North will acknowledge that the Conservative party, then in opposition, participated in amending the Bill to increase the ambition from 60% targets to the current 80% targets. When it started its life, the Bill included a 60% target; and when it left this House, the target was the 80% proposed by the Stern review.

If we take the motion as moved, there is no reason to fracture the consensus that has been such an important feature of this area. The first sentence of the motion reflects what we have recognised all along: the need to reduce emissions is urgent and compelling and we should heed the advice of the scientists who comprise the Intergovernmental Panel on Climate Change. We have always considered that to be right, and I am glad we agree.

The second sentence rightly calls attention to the consequences of global warming for the natural environment and society. Going back to 1990, again, Mrs Thatcher said:

“Weather patterns could change so that what is now wet would become dry, and what is now dry would become wet… The character and behaviour of plants would change… Some species of animals and plants would migrate to different zones or disappear for ever.”

The third sentence of the motion calls on the House to increase the UK’s targets under the Climate Change Act and to ensure that we capture the benefits of the low-carbon economy. As all Members know, the Minister for Energy and Clean Growth, my right hon. Friend the Member for Devizes (Claire Perry) and I commissioned the Committee on Climate Change, after the Paris accord, to advise us on precisely how we can reflect this raised ambition in our targets. As we know, it will publish that assessment tomorrow. We did not ask for that advice in order to ignore it; we intend to act on it, and we are proud of the progress we have made.

I have been reading some of the policy documents that were being debated when we were forging this consensus in 2008. Between 1997 and 2007 our greenhouse gas emissions were increasing, and they were increasing at the rate of 2% a year between 1999 and 2004. Since then, we have transformed our performance and our reputation. Since 2000, few countries in the world, and none in the G20, have gone faster than Great Britain in decarbonising their economy. We will continue to set the pace over the years ahead, during which the battle to halt catastrophic climate change will be won or lost. We intend to win.

The motion concludes by urging further action to restore our natural environment and to create a circular economy. Through the environment Bill, the Agriculture Bill, the industrial strategy and our clean growth strategy, we will do precisely that.

I hope we can maintain this common purpose. The hon. Member for Salford and Eccles set out her party’s position. There is not one person who joins my party who is not concerned about the heritage of our planet. Conservation, preservation and the inheritance of future generations are a deep instinct of every Conservative. It is not new; nor does it sit at variance with our governing policy. Indeed, our traditional concerns for the environment and a prosperous economy should not be seen as in contradiction to each other. As we consider the threats from climate change, let us remember that, without prosperity, people also become extinct. Enterprise has been the greatest rebellion against extinction in the history of the world, so the economy and climate change have to be brought together.

The only thing that will work to deal with climate change is where the market is adapted to ensure both prosperity and the conservation of our environment. I am proud that Britain is an advanced capitalist nation, but one with a deep respect for its environment.

[Mr Nicholas Brown (Newcastle upon Tyne East) (Lab)]

claimed to move the closure (Standing Order No. 36).

Question put forthwith, That the Question be now put.

Question agreed to.

Main Question accordingly put and agreed to.

Resolved,

That this House declares an environment and climate emergency following the finding of the Inter-governmental Panel on Climate Change that to avoid a more than 1.5°C rise in global warming, global emissions would need to fall by around 45 per cent from 2010 levels by 2030, reaching net zero by around 2050; recognises the devastating impact that volatile and extreme weather will have on UK food production, water availability, public health and through flooding and wildfire damage; notes that the UK is currently missing almost all of its biodiversity targets, with an alarming trend in species decline, and that cuts of 50 per cent to the funding of Natural England are counterproductive to tackling those problems; calls on the Government to increase the ambition of the UK’s climate change targets under the Climate Change Act 2008 to achieve net zero emissions before 2050, to increase support for and set ambitious, short-term targets for the roll-out of renewable and low carbon energy and transport, and to move swiftly to capture economic opportunities and green jobs in the low carbon economy while managing risks for workers and communities currently reliant on carbon intensive sectors; and further calls on the Government to lay before the House within the next six months urgent proposals to restore the UK’s natural environment and to deliver a circular, zero waste economy.

Oral Answers to Questions

Greg Clark Excerpts

Tuesday 30th April 2019 Commons Chamber

[Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)]

3. What assessment he has made of the effect of uncertainty of the UK’s trading relationship with the EU on the delivery of the industrial strategy.

[The Secretary of State for Business, Energy and Industrial Strategy (Greg Clark)]

As the hon. Gentleman will know, there are huge opportunities for advanced manufacturers, especially in his region, and the sector benefits from a minimum of frictions in trade, so it is very important that we conclude a deal with the European Union.

[Mr Bailey]

I thank the Secretary of State for that reply and commend him for his approach. Boosting productivity is the declared objective of the industrial strategy, but it is plummeting at the moment due to Brexit uncertainty. Does he agree that it is absolutely essential that we get an early Brexit deal that delivers both a customs union and frictionless market access to the EU, because otherwise it is doomed to failure?

[Greg Clark]

I am a bit more optimistic than the hon. Gentleman in that respect, not least because of the announcement just yesterday from the Advanced Propulsion Centre, which he knows very well, about the opportunity of nearly £5 billion for manufacturers, including in the west midlands, to participate in the growing market for electric vehicle batteries. It is therefore crucial that we drive productivity forward. He will also know of the work that Jürgen Maier is leading, as part of the Made Smarter Review, to capitalise on the opportunities. However, as I have always been clear with the House, we can best advantage those manufacturers if they are able to continue to trade freely and without frictions with the European Union.

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

Can the Secretary of State confirm that the Government have held discussions with a range of businesses, including those with complex customs requirements and those that export and trade mainly with the European Union, in formulating all their plans?

[Greg Clark]

I and my colleagues meet very regularly—every day—with businesses in all sectors and in all parts of the country. I think that there is a strong feeling in the business community that we need to bring to a resolution the question of our future relationship with the European Union. The longer this situation goes on, the more attractive investment decisions are put on hold, and they could be creating jobs now.

[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

The most recent quarterly economic survey from the North East England chamber of commerce shows a reported mark-down in sales and exports from the north-east. It states:

“We frequently hear from members that uncertainty over Brexit is delaying investment and hiring decisions for their businesses and their customers.”

What specific north-east-focused steps are the Government taking to ensure that the north-east business community and local jobs will not be affected by that, given that the Government’s own analysis shows that any Brexit outcome will affect the north-east the hardest?

[Greg Clark]

One specific north-east-focused step is to invite the hon. Lady to vote for the deal that has been put before the House.

[Tom Pursglove (Corby) (Con)]

The steel industry is, rightly, a key part of the industrial strategy. In that context, what early discussions has the Secretary of State had on the steel charter and the key asks contained within it?

[Greg Clark]

The discussions that we have had are intended to ensure that the steel sector, which is of fundamental importance to this country, can benefit from some of the manufacturing opportunities that we have talked about. As we expand our production of vehicles, as I hope we will do, there will be a strong requirement for steel, and through the proposed strategy we will ensure that that is British steel.

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

The Secretary of State’s industrial strategy states that manufacturing is crucial to the economy and promises to support businesses to access international markets and drive up exports. However, according to Make UK, stockpiling in the UK is now the highest of any G7 nation ever, as manufacturers try to protect themselves from Brexit uncertainty. Chambers of commerce across the country report falls in cash flow because money tied up in stock is not available to drive exports or pay wages. Cash flow is the lifeblood of manufacturing and the cause of up to 90% of business failures. Whatever the eventual outcome of the Government’s Brexit shambles, British manufacturers must be in business to meet its challenges, so will he now commit to providing financial support?

[Greg Clark]

The hon. Lady quotes Make UK. The chief executive of Make UK, with whom I meet almost every week, has said:

“Make UK has consistently supported the Government’s withdrawal agreement as it removes the risk of no deal and delivers a sensible transition period which is vital for the needs of manufacturers.”

I think the hon. Lady and I have a joint view on the importance of manufacturing, not least in the north-east. I hope that she will have the flexibility and pragmatism to come together—I am talking to her colleague the shadow Secretary of State—and agree a way forward in line with what Make UK recommends.

[Kerry McCarthy (Bristol East) (Lab)]

4. When his Department plans to publish its smart export guarantee proposals for new solar households.

--- Later in debate ---

[Martyn Day (Linlithgow and East Falkirk) (SNP)]

15. What plans he has to hold discussions with trades union representatives on increasing workers’ rights.

[The Secretary of State for Business, Energy and Industrial Strategy (Greg Clark)]

Informed by my regular discussions with trade unions, we have extended worker rights, and both Houses agreed last month to close the Swedish derogation loophole to protect agency workers. On 1 April, we celebrated with union representatives the 20th anniversary of the national minimum wage. The day was marked by the rise in the national living wage, which has delivered the fastest pay rise for the lowest paid in at least 20 years, benefiting nearly 1.8 million workers.

[Martyn Day]

The Scottish Trades Union Congress general secretary, Grahame Smith, has said that the Scottish Government’s

“Fair Work Action Plan demonstrates a commitment to using the powers the Government has at its disposal to deliver Fair Work, which is good for workers and good for business.”

Will the Secretary of State do his bit by introducing a real living wage? If not, will he devolve the policy so that the Scottish Government can?

[Greg Clark]

What the hon. Gentleman did not mention is that this Government introduced the national living wage, and we have just increased it to its highest-ever level, benefiting millions of people around the country. I would have thought that he would welcome that.

[Laura Pidcock (North West Durham) (Lab)]

There are many warm words from the Government on workers’ rights, but to say that the Conservatives are the party of workers is a joke, because their actions in government tell a different story. Strong economies are almost always underpinned by strong trade union rights. Germany, Sweden, Norway and Denmark all have extensive sectoral collective bargaining coverage, which has been used to reduce income inequality and drive up wages. The hostility towards trade unions and the dismissal of collective bargaining here is not just bad for workers but bad for the economy, creating a vicious cycle of lower wages, reducing tax revenues and lowering spending. The obsession with undermining union rights is self-defeating. What is the Secretary of State doing to break the cycle?

[Greg Clark]

If you want to be the party of workers, you need to be the party that creates work. There are 1.5 million more people employed in work as a result of this Government’s policies, and of course we want to make sure they are in good jobs. The effort of our industrial strategy is to drive up productivity, which is necessary if pay rates are to increase over time. The hon. Lady should acknowledge the reforms, brought in partly as a result of the Matthew Taylor report, that have closed the Swedish derogation, which her party failed to close over 13 years in office.

[Stephen Kinnock (Aberavon) (Lab)]

T1. If he will make a statement on his departmental responsibilities.

[The Secretary of State for Business, Energy and Industrial Strategy (Greg Clark)]

Nearly 30 years ago Margaret Thatcher made a speech at the UN General Assembly in which she described

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

Ever since then, the UK has continued to lead the world on this issue. The UK, yet again, broke its coal-free power generation record, which now amounts to more than three and a half days without any electricity being generated from coal, over the weekend—the longest period since the industrial revolution in which coal has not been burned for power in this country.

Later this week we have another seminal moment in which the independent Committee on Climate Change will report back, at the Government’s request, on how we can set a date to achieve net zero emissions—once again, this country is leading the world on climate change.

[Stephen Kinnock]

I am sure the House will wish to join me in paying tribute to the management, the workforce and the emergency services who dealt so effectively with the explosion at the steelworks in my constituency on Friday. We wish the two men who received minor injuries all the best.

The predecessor of the Under-Secretary of State for Business, Energy and Industrial Strategy, the hon. Member for Pendle (Andrew Stephenson) promised the last meeting of the all-party parliamentary group on steel and metal-related industries that he would host a meeting of steel sector stakeholders, supply chains and steel MPs to discuss the failure to develop a steel sector deal. Will the Minister now commit to honouring that commitment and to meeting us as soon as possible?

[Greg Clark]

First, I join the hon. Gentleman in paying tribute to the workers at Port Talbot and to the emergency services, which responded with characteristic bravery and dispatch to deal with that very worrying incident. The Under-Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend the Member for Pendle (Andrew Stephenson), and I spoke to the company and the trade unions the next morning, and we are all relieved that the situation was not worse. Of course, we send our sympathies to the workers affected.

As the hon. Member for Aberavon (Stephen Kinnock) knows from an earlier answer, we are clear on the importance of the steel sector for the future of manufacturing generally, and I take a personal interest. These are early days for the Under-Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend the Member for Pendle, but I know he shares my enthusiasm, and perhaps we can both come to that meeting.

[Robert Neill (Bromley and Chislehurst) (Con)]

T4. British businesses in all sectors currently benefit greatly from the ability of UK-based law firms to advise and act for them on contractual, regulatory and intellectual property matters when they conduct business within the European Union. What steps is my right hon. Friend taking with other Ministers to ensure that commercial advantage is not lost as we leave the EU?

[Greg Clark]

My hon. Friend, who chairs the Select Committee on Justice, makes an excellent point on one of our principal sources of export earnings. More than that, the pre-eminence of law in the UK brings firms from jurisdictions around the world to do business here. We are determined that we should maintain our good relations across the continent and that we should keep up to date in our practices. He will know that, through the industrial strategy, we are investing in the regulators’ pioneer fund to make sure that legal services take their place at the cutting edge of innovation.

[Gill Furniss (Sheffield, Brightside and Hillsborough) (Lab)]

On 4 April, the Office for Product Safety and Standards published its investigation into Whirlpool and the ongoing issue of its product safety. The report was lambasted by consumer organisations, including Which?, as weak. Just days later it was revealed in the media that Whirlpool allegedly paid one consumer to stay silent after she was forced to flee with two young children as a blaze engulfed her home after her dryer had been modified. Can the Minister tell us whether the OPSS was aware of those allegations and, if not, whether it will now reopen its investigation in light of the accusations?

[Scott Mann (North Cornwall) (Con)]

T7. Many of my constituents still access some form of off-grid energy. While the Department looks to introduce a cleaner form of energy, will it also look at the cost impact of energy? Many of these people are also in fuel poverty and would like not only a clean form of energy, but a cheap one.

[Greg Clark]

I recognise the situation my hon. Friend describes; in his rural constituency, this is a big problem. In the spring statement, we announced that the future homes standard would ensure that all new buildings, including those in rural areas, are equipped with low-carbon sources of heat and power by 2025. We also recognise the importance of households that are off the gas grid and have them in mind as we deal with the energy companies in terms of their tariffs.

[Douglas Chapman (Dunfermline and West Fife) (SNP)]

T2. This Government are not even hiding their disdain for Scottish business, with one of them telling the BBC recently:“Once you’ve hit the”—Brexit—“iceberg, you’re all on it together”. When will the Minister accept that if he will not provide that level of security and that lifeboat, the Scottish people will, by voting for independence?

[Greg Clark]

It is a sad reflection that the job creation that has taken place in Scotland lags behind that in the rest of the UK. I fancy that one reason for that is that Scotland has acquired a reputation for being the highest- tax part of the UK. So I hope the hon. Gentleman would reflect on these causes and advise his colleagues in Holyrood to take a different course.

[Peter Aldous (Waveney) (Con)]

T9. England is currently the only home nation that provides no central Government investment to improve domestic energy efficiency. To address this deficit, will the Secretary of State take up the Committee on Fuel Poverty’s proposal for the introduction of a new clean growth fuel poverty challenge fund?

[Greg Clark]

I am aware of the advice from the committee, which we will consider carefully. My hon. Friend will know that the energy company obligation has been reformed to concentrate on fuel poverty, but we are grateful for the committee’s advice and we will respond shortly.

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

T3. I know that the Secretary of State will agree with more than 80 cross-party MPs who came together yesterday to say that to realise the northern powerhouse vision, we need the economic commitment to Northern Powerhouse Rail and HS2. Will he communicate that to aspirant Members from his party who want to see a race to the bottom in the next Tory leadership race? The north will not tolerate that.

[Greg Clark]

Across the country, it is crucial that we invest in infrastructure. If we want to compete with other nations across the world, we need to make sure that our businesses and our people can count on fast connections, and that includes between our great cities.

[Richard Harrington (Watford) (Con)]

Now that I am not bound by the ministerial code, or indeed collective responsibility, I feel that I can speak my mind about sector deals. I think they are absolutely brilliant, and I ask my right hon. Friend the Secretary of State to point out some of the achievements made on delivering the commitments made between the Government and industry.

[Mr Speaker]

I cannot say that I had noticed that the hon. Gentleman was previously all that closely bound.

[Greg Clark]

That was my experience, too, Mr Speaker. Goodness knows what my hon. Friend will be like now that he is on the Back Benches. May I pay tribute to the fantastic work he did in securing so many of the sector deals? He got to know very well the needs of particular industries and sectors. Let me pay tribute to the creative industries sector deal, for example, which this very weekend launched a new immersive technology version of “Peaky Blinders”. I do not know whether he is a fan of that series. If he is—

[Mr Speaker]

What is it?

[Greg Clark]

“Peaky Blinders” is an award-winning programme, which my hon. Friend will be able to experience in virtual reality as a result of the sector deal done with our creative industries, particularly the gaming industry.

[Laura Smith (Crewe and Nantwich) (Lab)]

T5. A recent report by the Society of Motor Manufacturers and Traders estimated that the UK could lead the world in connected and autonomous vehicles. What steps are the Government taking to ensure that UK car manufacturers can seize this opportunity?

[Greg Clark]

The hon. Lady will know that the investment that is being made through the industrial strategy in testbed facilities and data centres for connected and autonomous vehicles is geared towards making Britain the go-to place in the world for the development, deployment and manufacture of such vehicles. As the hon. Lady takes an interest in the sector, I would be delighted to invite her to see and meet some of the companies involved in what is a great set of possibilities for this country.

[Helen Whately (Faversham and Mid Kent) (Con)]

Shared parental leave is a good option for new parents, but the Secretary of State will know that take-up remains low. Will he consider introducing a stand-alone period of parental leave just for partners, to help families to balance work and childcare?

--- Later in debate ---

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

T8. I came to the House today hoping for some passion and leadership from the Secretary of State. There is a real opportunity for British business and universities to tackle climate change with innovation and enterprise. What do we get today? The dullest Question Time I have ever seen in this place.

[Greg Clark]

The hon. Gentleman should celebrate the fact that, when it comes to renewable energy, we are the leading nation in the world for the deployment of offshore wind. We are creating jobs right throughout the country, and many constituencies have people in good jobs because of the leadership in renewable energy that we have displayed. We will go further in the years ahead.

[Kevin Hollinrake (Thirsk and Malton) (Con)]

Solar plus battery storage will soon be commercially viable without any subsidy. Is now the right time to plan for a huge deployment of solar on every public building, school, hospital and prison?

[Greg Clark]

My hon. Friend makes an excellent point. If there is the possibility of more renewable energy than was previously contemplated and we can store it, we will solve our energy needs for the future, thereby helping business and consumers. I shall take up my hon. Friend’s suggestion.

[Stephanie Peacock (Barnsley East) (Lab)]

My constituent was made redundant from Carillion last April after 11 years’ service as a cleaner. She has been passed from pillar to post, from PwC to the insolvency services. Will the Minister please look into this case as a matter of urgency?

--- Later in debate ---

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

Will the Minister confirm that the Secretary of State for Scotland put in writing his objection to onshore wind finding a route to market in Scotland? Why will the Government not release that correspondence in the interests of transparency?

[Greg Clark]

I am not aware of the inquiry that the hon. Gentleman mentioned. I will follow it up with the Scottish Secretary.

[Several hon. Members rose—]

--- Later in debate ---

[Stephen Kerr (Stirling) (Con)]

The Business, Energy and Industrial Strategy Committee and the Competition and Markets Authority have both published reports calling for change in the UK audit industry. Will the Secretary of State undertake at the Dispatch Box that the power of the big four audit firms in the UK will not stop this agenda for change?

[Greg Clark]

I will give that commitment. I am very pleased that the Competition and Markets Authority has launched that report and made some interim recommendations. We will be looking at them during the weeks ahead. My hon. Friend is absolutely right to say that this is a sector that is fundamental to the confidence that we have in businesses right across the country.

[Chris Bryant (Rhondda) (Lab)]

Everybody wants to do their bit by recycling, but it is absolutely infuriating when we get to the supermarket and all the fruit and veg is wrapped in plastic. Then there is the exciting moment when we get home to the kitchen and see that there is a little sign, which looks like the packaging is recyclable, but then we read the words, “Not yet recyclable”. What on earth do they mean by that? Are we meant to keep it all until, suddenly, somebody announces that it is now recyclable? Are we meant to put it in the attic or store it in a cupboard? What are we meant to do? Surely, we should ban those words. The packaging is not recyclable and it should not be available.

--- Later in debate ---

[Ruth George (High Peak) (Lab)]

The other week, I was shocked to meet a constituent who had worked in care for nine months solidly without being given a single day off, while on a zero-hours contract. Such workers, who are vulnerable, need protection for their rights at work. Will the Secretary of State look at bringing in group claims for industrial tribunals and representative cases so that workers do not have to stick their head above the parapet?

[Greg Clark]

I was pleased to meet the hon. Lady yesterday to discuss this matter. I share her concerns about the case that she mentioned and take her suggestion very seriously. As I have committed to her, we will take this forward together.

Oral Answers to Questions

Greg Clark Excerpts

Tuesday 19th March 2019 Commons Chamber

[The Secretary of State for Business, Energy and Industrial Strategy (Greg Clark)]

The best way to support people is to make sure that they have a job. Today it was announced that more people are employed in our country than ever before. Unemployment has fallen to 3.9%, its lowest since 1975. Our pay rose in real terms over the past year by 1.3%, and over the past year 96% of those new jobs have been full time.

[Judith Cummins]

Too often, workers have eight or 10-hour contracts, but are then expected to work up to 60 hours when their employer demands it, with no flexibility in return. One concrete step that the Government could take to protect these insecure workers is to ensure that contracts reflect the hours that people normally work. Will the Minister commit to legislating for this?

[Greg Clark]

I am slightly surprised to hear that from the hon. Lady because she knows that we have taken measures to give workers the right to request that stable contract. She will know that in her own area Bradford Council is a very good exponent of that. It was advertising last night for casual commis chefs, saying that hours are offered on a “casual basis” and may be withdrawn by either party, giving a minimum of two hours’ notice. If she wants those rights to be extended, I suggest that she talk to Bradford Council first.

[Mr Philip Hollobone (Kettering) (Con)]

Can the Business Secretary confirm that there are more people in our nation in secure employment than ever before in our history and that the number of people on zero- hours contracts has fallen by 100,000 in the past year alone?

[Greg Clark]

My hon. Friend is absolutely right. Obviously, it is a great source of confidence to people that they can obtain a job. It is the case that employers across the country value the flexibility that having a flexible workforce gives. In fact, again, the Labour leader of Gateshead Council said that

“many zero-hours contracts employees”

on the council

“don’t want to be full time employees and prefer to consider themselves as self-employed”,

so this is a practice that is pursued right across the country.

[Rachel Reeves (Leeds West) (Lab)]

Some 1.6 million workers are paid exactly the national living wage of £7.83 an hour, and a further 3 million people are paid within 50 pence of it. In the spring statement last week, the Chancellor said that the ultimate objective of this Government was

“ending low pay in the UK”—[Official Report, 13 March 2019; Vol. 656, c. 349.]

The usual definition of a national living wage is 66% of median earnings, but the remit of the Low Pay Commission is only to get to 60%. Are the Government now committing to end low pay? If so, when?

[Greg Clark]

The hon. Lady should recognise the commitment to 60% and the progress that has been made towards that, which meant a very big pay increase for many of the lowest paid workers in the country. She will remember that the Chancellor announced a review in his statement last week to look into where we go beyond that, using international best practice to inform such a decision. I hope that the Business, Energy and Industrial Strategy Committee, which the hon. Lady chairs, will want to contribute to that review.

[Maggie Throup (Erewash) (Con)]

Matthew Taylor’s recent review of modern working practices indicated that a blanket ban on zero-hours contracts would create more cliff edges for employers and workers. Does my right hon. Friend agree with that analysis?

[Greg Clark]

I do agree with that analysis and with what my hon. Friend has said. The conclusion of the panel in that completely independent report was:

“To ban zero hours contracts…would negatively impact many more people than it helped.”

It is right to ensure that there is an ability to request a stable contract and that people are not banned from working for different employers, but to remove these contracts all together would be against the practice of many employers, including councils.

[Lloyd Russell-Moyle (Brighton, Kemptown) (Lab/Co-op)]

16. The National Union of Rail, Maritime and Transport Workers continues to receive evidence of seafarer pay as low as £3.60 an hour, including on UK-registered vessels. Employers in the ferry sector are continuing to reflag their ships. When will the Government take action to ensure that the national minimum wage provides a basic safety net for seafarers’ pay, including on international routes?

[Greg Clark]

I share the hon. Gentleman’s concerns. In the last few weeks, I have been discussing with the trade unions how any loopholes that might be being exploited should be closed. It is the intention of everyone across the House that the law should be obeyed and that workers should be paid a fair rate for their work.

[Nigel Huddleston (Mid Worcestershire) (Con)]

Does the Secretary of State agree that it is often the UK, not the EU, that has led the way on workers’ rights, and does he expect this to continue?

[Greg Clark]

I do indeed expect this to continue. Many of the rights that we have introduced—including, for example, the right to request a stable contract—were pioneered in this country, and are only now being taken up by other European countries.

[Laura Pidcock (North West Durham) (Lab)]

A couple of weeks ago, Labour colleagues and I crossed the road to Parliament Square to talk to outsourced Department for Business, Energy and Industrial Strategy workers from the Public and Commercial Services Union and the Independent Workers Union of Great Britain, who were demanding equal terms and conditions with directly employed staff. They were disappointed that no Minister from the Department came to talk to them. If anyone had, they would have heard how people’s status as contracted-out workers is a fundamental cause of their insecurity.

We have heard fine words from the Secretary of State about workers’ rights recently, yet here is an example of workers being forced into precarious contracts under his very nose. Will he outline what he is doing to put his own house in order to help resolve this dispute? In the process, will he learn the lesson that outsourcing is the cause of insecurity and poverty pay?

[Greg Clark]

I value very highly the work of all the staff in my Department. I met some of the staff she has mentioned, who were affected. I asked my officials to review the comparable levels of pay that such staff receive, and those pay rates have been increased as a result. It was a good and constructive discussion with my much valued colleagues.

[Patrick Grady (Glasgow North) (SNP)]

2. What recent discussions he has had with the Chancellor of the Exchequer on fiscal support for businesses based in Scotland making preparations for the UK leaving the EU.

[Angela Crawley (Lanark and Hamilton East) (SNP)]

8. What recent discussions he has had with the Chancellor of the Exchequer on fiscal support for businesses based in Scotland making preparations for the UK leaving the EU.

[The Secretary of State for Business, Energy and Industrial Strategy (Greg Clark)]

I have regular discussions with the Chancellor about support for businesses in Scotland, as well as in England, Wales and Northern Ireland. As the hon. Member for Glasgow North (Patrick Grady) will know, last Wednesday we announced up to £260 million for the borderlands growth deal, which is a cross-party—and clearly a cross-border—partnership that has been hailed as a game changer by all the bodies involved, including the Scottish Government. As the hon. Gentleman knows, the best way to support business in Scotland is to end the uncertainty that comes from Brexit and to join the Government in agreeing a deal.

[Patrick Grady]

Actually, the best support for businesses in Scotland would presumably be for Scotland to stay in the European Union, because IDA Ireland reckons that its country has gained more than 5,000 jobs as a result of Brexit-related investment, so it is a little bit perverse that it seems to be that the countries staying in the European Union are enjoying the benefits that were supposed to come from leaving.

[Greg Clark]

The best chance for Scotland to enjoy prosperity in the future is to stay in the United Kingdom, and I hope the hon. Gentleman would support that. I am very surprised that he would mention jobs in the Scotland when, under the SNP, jobs growth in Scotland has been far behind the good statistics that I was able to give for the whole country. Indeed, if Scotland had matched the rate of job creation in England, there would now be nearly 200,000 more Scots with a job.

[Angela Crawley]

An Ernst & Young survey found that only 8% of Scottish firms feel fully ready for Brexit. Does the Secretary of State regret his failure to accept the SNP’s and the Institute of Directors’ demands for a £750 million support service to help small and medium-sized businesses to navigate Brexit?

[Greg Clark]

No. Advice and support are available to every business across the United Kingdom, including, of course, businesses in Scotland. I work very closely with the Scottish Government. They are represented on the groups that are developing the contingency plans for a no-deal Brexit, and businesses are included in that.

[Mr David Davis (Haltemprice and Howden) (Con)]

In Scotland, as in the rest of the United Kingdom, there are grants of up to £1,050 per employee for training employees, and up to £200,000 for new IT systems for dealing with new customs arrangements. Given the importance of this, why is it not more widely advertised both in Scotland and in the United Kingdom?

[Greg Clark]

My right hon. Friend makes an excellent point. As he knows from the industrial strategy—he was closely involved in its construction—grants and assistance for training, especially for employees whose jobs change as a result of technological change, is a very important contribution that we can make, and I am glad that he has brought it to the attention of the House.

[Stephen Kerr (Stirling) (Con)]

What discussions has my right hon. Friend had with the Chancellor of the Exchequer about making sure that the UK shared prosperity fund is UK-wide and allows the UK Government to work with public and private partners across the whole of the Union?

[Greg Clark]

My hon. Friend makes an excellent point. That is absolutely the intention. The fund will be UK-wide and continue the progress that has been made, not least through the city deals programme. All the major cities of Scotland have benefited from a city deal that embraces the UK Government, the Scottish Government, and local authorities. That is a good model that is working and is successful.

[David Duguid (Banff and Buchan) (Con)]

3. What steps his Department is taking to promote clean growth.

--- Later in debate ---

[Kirstene Hair (Angus) (Con)]

22. What steps he is taking to ensure that renewable technologies form part of the energy mix.

[The Secretary of State for Business, Energy and Industrial Strategy (Greg Clark)]

The UK is leading the world in decarbonising our energy supplies while driving down the cost of clean power. The proportion of our electricity coming from renewables has increased fourfold since 2010, and the cost of clean power is falling fast. The price of offshore wind has fallen by 50% in the last couple of years.

[Ruth George]

The Secretary of State has just recognised that there is considerable support for renewable energy throughout the country. My local community in High Peak have always been committed to that. “Archie”, the Archimedes’ screw in New Mills, is the first community-owned hydroelectric project. However, the Government are preventing people from becoming involved in renewable energy projects by removing the feed-in tariff and refusing to remove planning blocks on onshore wind, while forcing councils to plan positively for fracking. Will the Secretary of State recommend the scrapping of that policy, and instead require councils to plan positively for renewables?

[Greg Clark]

I think the hon. Lady should recognise the huge progress that has been made, which is beyond what anyone would have expected 10 years ago when the Climate Change Act 2008 was passed. I commend her constituents for their contribution in respect of renewable power. However, as my right hon. Friend the Minister for Energy and Clean Growth has said, the right mechanism must be applied to the right technology. It is better to finance technologies in the early stages of development through innovation funding than to pretend that they can make a significant contribution to the grid.

[Kirstene Hair]

A renewables mix is hugely important in securing our long-term energy supply, so will the Secretary of State meet me to discuss some of the contradictory barriers in place for solar power, for example, because there are limited technologies that are able to bid for support through the contracts for difference scheme?

[Greg Clark]

I will indeed meet my hon. Friend, and I am sure that my right hon. Friend the Minister for Energy and Clean Growth will join that conversation. We have a good record in bringing on a range of new technologies and I am very happy to make sure there are no barriers to that.

[Dr Alan Whitehead (Southampton, Test) (Lab)]

There will now be a 9 GW cut in future installed capacity by 2030 as a result of Toshiba and Hitachi ending their plans to build three new nuclear power stations. The Secretary of State has also cancelled plans to build tidal lagoons possibly providing about that amount of additional capacity, has banned onshore wind and has run down new solar installations. He has severely limited the auction for new offshore wind to only £60 million of a possible £557 million. Does the Secretary of State agree that on present policies it looks like there will be a substantial capacity gap in power production against likely 2030 demand? Does he have any plan to deal with that? Does he have any plans to revive the lost nuclear power proposals? Does he share the Opposition’s view that, among other things, we will need at least 50 GW of installed offshore wind to help close the gap and meet our climate change commitments?

[Greg Clark]

Quite the opposite is true. One of the reasons why it has proved impossible to finance privately some of these nuclear power stations is that the cost of renewables was falling and the availability was increasing so rapidly that they are being muscled out of the system. The forecast electricity margin for this year is now over 11%, the highest for five years. To put this into context for the hon. Gentleman, the contribution that the Wylfa nuclear power station—3 GW—would have made was procured in a single contract for difference auction for offshore wind. That shows the abundance that we have, rather than the shortage.

[Clive Lewis (Norwich South) (Lab)]

14. What steps he plans to take to support small and medium-sized renewable power generators after the scheduled closure of the feed-in tariffs scheme.

--- Later in debate ---

[Mr Philip Dunne (Ludlow) (Con)]

T1. If he will make a statement on his departmental responsibilities.

[The Secretary of State for Business, Energy and Industrial Strategy (Greg Clark)]

One of the frustrations about the dominance of our Brexit debates over the last two years is that insufficient attention is given to the fact that this is one of the most exciting times for British industry and commerce since the first industrial revolution, which was forged in this country. We are in the vanguard of so many of the industries of the future. Earlier this month, my right hon. Friend the Energy Minister was in Lowestoft and, again, in Grimsby to launch the offshore wind sector deal—the 10th sector deal in our industrial strategy. It is helping Britain to procure a third of its electricity through offshore power by 2020, to provide a lead right around the world and to export good technology.

[Mr Dunne]

I share my right hon. Friend’s optimism and enthusiasm for the opportunities that lie ahead for this country. Following the Chancellor’s statement last week, when specific measures were announced, which I welcome, could he elaborate on how he expects the UK to take a lead in science and innovation to develop new technologies for renewables, which he touched on, and new materials?

[Greg Clark]

My right hon. Friend is correct that our reputation for science and innovation, and the standing of our universities, are among the best in the world. At a time when every country around the world is investing in the technologies of the future, we need to emphasise the abilities and talents we have. Through the industrial strategy, we have the biggest increase in public and private sector spending and innovation that we have ever had in this country. It is already making a difference, but we have more to do.

[Rebecca Long Bailey (Salford and Eccles) (Lab)]

Our automotive sector is facing significant challenges. To quote the Society of Motor Manufacturers and Traders,

“There is a perfect storm of a hostile global trading environment, the imminent threat of significant tariffs on cars exported to the US, rising costs, technological revolution and the already damaging impact of Brexit on the UK industry”.

This perfect storm has already claimed some victims: Honda in Swindon, the loss of the production of the X-Trail and Infiniti models in Sunderland, and the loss of thousands of jobs at Jaguar Land Rover and Ford. The sector needs immediate and substantial support. Does the Secretary of State think the Government are doing enough?

[Greg Clark]

I am glad the hon. Lady recognises the importance and effectiveness of our automotive sector. She is absolutely right that the acceleration of the shift to new technologies is affecting the sector in every country around the world. Through our industrial strategy, agreed with the automotive sector through the sector deal, and the Faraday challenge, we are advancing our position in battery technology. That makes sure that, when the new generation of batteries are produced, they are produced in Britain, guaranteeing our future.

[Rebecca Long Bailey]

Those are warm words from the Secretary of State, but actions speak louder. On Brexit, his Government have threatened a catastrophic no deal and run down the clock. On rising costs, the Government have allowed costs such as industrial electricity prices and business rates to disadvantage UK manufacturers. On electrification, the Government have allowed us to fall behind. The planned charging infrastructure investment fund is still not in operation 16 months after it was announced, and subsidies for electric vehicles have been cut. Is not the truth that this Government are failing to provide the automotive sector with the support it needs to weather this perfect storm?

[Greg Clark]

We are the leading country in Europe when it comes to the production of electric vehicles, and as the hon. Lady is well aware, we have, through the industrial strategy, advanced our leadership position. However, if she listens to the leaders of the automotive sector, they say one thing time and again very clearly: we need to conclude a deal with the European Union. They have endorsed comprehensively the deal the Prime Minister has negotiated. If the hon. Lady is concerned for the future of this important sector, she would compromise and recognise the importance of bringing to an end this uncertainty and passing the deal.

[Giles Watling (Clacton) (Con)]

T4. A couple of weeks ago, I attended a business briefing in Tendring where I met some of the wonderful entrepreneurs in my area. They just want certainty. They just want us to get the job done. What is the Department doing to protect those businesses as we leave the European Union?

--- Later in debate ---

[Steve McCabe (Birmingham, Selly Oak) (Lab)]

T3. The Society of Motor Manufacturers and Traders told us in big, bold type in its briefing note this morning that the vehicle excise duty diesel supplement must be removed immediately if we are to encourage the sale of the most advanced and cleanest diesel engines, such as those in which JLR is investing heavily. If that change is needed immediately, can manufacturers be expected to wait until the October Budget for an answer?

[Greg Clark]

The hon. Gentleman knows that I have been in discussion with the industry. The sector has participated in the development of the path to the decarbonisation of vehicles, and it is important that we are consistent with that. However, part of that process is about recognising that buying a diesel car is a perfectly reasonable choice for many people, but some people have got the wrong impression from the announcement.

[Kevin Hollinrake (Thirsk and Malton) (Con)]

T7. The all-party parliamentary group on fair business banking and finance is dealing with several cases, including those of Keith Elliott and Julia Davey, that raise serious questions about inappropriate links between insolvency practitioners and banks, specifically KPMG, PwC and Lloyds Bank. What action is the Minister taking to remove such conflicts of interest?

--- Later in debate ---

[Patricia Gibson (North Ayrshire and Arran) (SNP)]

T8. Can the Secretary of State explain whether he personally thinks the Prime Minister’s exit deal will make the UK better off than remaining in the EU would?

[Greg Clark]

Substantial analysis has shown that, of all the options available, the Prime Minister’s deal is the one that provides the best economic future, and I hope the hon. Lady will support it.

[Maria Caulfield (Lewes) (Con)]

Post offices are at the heart of our communities, so does the Minister welcome the news that Newick post office in my constituency, after being closed for months following the sad death of the postmaster, Terry, is set to reopen? Does she agree that we must do all we can to keep post offices open in our rural communities?

--- Later in debate ---

[Martin Vickers (Cleethorpes) (Con)]

Will the Secretary of State give an update on the next phase of the Greater Grimsby town deal?

[Greg Clark]

I am delighted that the Prime Minister was able to join my hon. Friend, the hon. Member for Great Grimsby (Melanie Onn) and me to celebrate the success of the beginning of that deal. The next phase is about investment in skills, and I look forward to visiting Cleethorpes and Grimsby to inaugurate that important set of investments in the skills of the population.

[Several hon. Members rose—]

Financial Reporting Council: Independent Review

Greg Clark Excerpts

Monday 11th March 2019 Written Statements

[The Secretary of State for Business, Energy and Industrial Strategy (Greg Clark)]

The Government have published their public consultation in response to the independent review of the Financial Reporting Council (FRC).

The UK has always been a world leader in audit and accounting services, with world-class frameworks for corporate reporting, corporate governance and regulatory oversight. Our modern industrial strategy sets out our vision to ensure that the UK is the best place to start and grow a business and is an attractive place to invest. The Government see a tough and robust regulator, and an audit sector with the highest standards, as a key part of that strategy. Stronger regulation of audit will benefit all, giving shareholders, investors, and the wider public every confidence in company reports and audited accounts.

In April 2018, I commissioned Sir John Kingman to undertake a root and branch review of the FRC to ensure the UK continues to stand as a beacon, with a first- class regulator of audit and corporate reporting. The review published a comprehensive set of challenging recommendations in December 2018, designed to transform the regulation of these important functions which underpin the economic life of our country.

The Government welcome and shares the review’s vision for a new regulator with a new mandate, leadership, and stronger statutory powers. The Government intend to move swiftly to implement these reforms, replacing the FRC with a new regulator called the “Audit, Reporting and Governance Authority”. This new body will build on the UK’s status as a great place to do business and will form an important part of strengthening public trust in businesses and the regulations that govern them, ensuring that the UK maintains and advances its status as a place of the highest standards in audit. In the interim period, until the new regulator is in place, we will be working with the FRC taking forward 48 of the review’s recommendations.

Through the consultation the Government also seek views on how more complex recommendations should be taken forward; note where further detailed policy development will be undertaken, and a further consultation will be published; and confirm where matters are for other authorities to consider.

There is a range of important work going on in relation to the audit market, and we also look forward to receiving the findings of the competition and markets authority’s market study of the audit sector and of Sir Donald Brydon’s review of the quality and effectiveness of audit. That work, taken together with the independent review of the FRC, will enable us to deliver a major set of reforms of company audit, accounting and reporting which will ensure the UK’s corporate regime is of the highest quality.

The consultation document will be placed in the Libraries of both Houses and available on the www.gov.uk website. The consultation will run for 12 weeks and I look forward to the continued contribution of interested parties.

[HCWS1397]