Tidal Energy Generation: Ringfenced Funding
Debate between Greg Hands and Ian Blackford(2 years, 5 months ago)
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Greg Hands
I gladly accept my hon. Friend’s invitation to meet. He does a brilliant job as the chair of that APPG and he does an amazing job as the Prime Minister’s trade envoy to Indonesia. He mentioned one or two of the warm words of congratulation on the announcement yesterday. RenewableUK said it was “a major step forward” and that it
“puts us in pole position to”—
lead—
“the global market in due course.”
RenewableUK also said it would
“unlock private investment and secure green jobs”,
while Neil Kermode of the European Marine Energy Centre on Orkney said:
“This support for the marine energy industry is absolutely pivotal”.
I appreciate the right hon. Member for Ross, Skye and Lochaber having brought this topic to the House. He perhaps might have left one with the impression that just he had made representations to the Prime Minister, but I checked back and found representations from my right hon. Friends the Members for Portsmouth North (Penny Mordaunt) and for Preseli Pembrokeshire (Stephen Crabb), and from my hon. Friends the Members for Meon Valley (Mrs Drummond), for Rother Valley (Alexander Stafford), for Rugby (Mark Pawsey), for Banff and Buchan (David Duguid), for Isle of Wight (Bob Seely), for West Aberdeenshire and Kincardine (Andrew Bowie), for Moray (Douglas Ross), for Ynys Môn (Virginia Crosbie), for Truro and Falmouth (Cherilyn Mackrory), for Gloucester (Richard Graham), for Sedgefield (Paul Howell), for Blyth Valley (Ian Levy), for Workington (Mark Jenkinson), for North Cornwall (Scott Mann), for St Austell and Newquay (Steve Double), for North Devon (Selaine Saxby) and for Barrow and Furness (Simon Fell).
I heard some doubt from the right hon. Member for Ross, Skye and Lochaber as to whether the £20 million per annum is a substantial-enough sum to put the tidal stream sector on its best footing. Indeed, the right hon. Gentleman suggested that £71 million is the minimum required for the job. I am afraid I cannot agree with him on that, because £71 million would mean the awarding of a contract to virtually every developer who shows interest in the auction as long as they bid at a level just a single penny under our stated maximum price. He and I worked together in the City of London in our time. He will know from his knowledge of financial markets—I know that he has since rebranded himself as the simple crofter—that there is no way to run an auction of that sort in that way.
Ian Blackford
I hope that we can dispense with the silly gibes.
What I explained to the Minister was that £71 million would justify 100 MW of output. Perhaps he can explain what he expects to see from the £20 million. Crucially, I did point out that MeyGen has consent for 80 MW and that, within the envelope of that £71 million, it could have been fully exploited and ultimately ramped up to 400 MW. As things stand, MeyGen 2 cannot be fully exploited and that is the impact of not going to the £71 million.
Greg Hands
The right hon. Gentleman is mixing up funding with the process of an auction. It is a contract for difference auction. The idea of £20 million being available is that it allows us to have a competitive process between all of the different parties that may be interested, and then to make sure that at least £20 million goes towards these projects. It is not the same as granting funding, which is what I think he is looking for, of £71 million. It is a competitive auction process. The purpose of the CFD scheme is to support and push for—
UK Economy
Debate between Greg Hands and Ian Blackford(7 years, 10 months ago)
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Greg Hands
I am going to talk a little more about the debate.
My hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) made a very powerful speech, referring to his very strong business background. Like me, he strongly supported the remain campaign. He made strong points about business and the importance of making sure we secure business and trade in our new arrangements.
The hon. Member for Ilford North (Wes Streeting) said he is one of the youngest Members of this House and that he had not been alive when the country had been outside the European Union, which is food for thought. All the years he has been alive, the country has been in the European Union. He was right to say that if an economy goes wrong, it is very likely to be the poor who suffer most. That would also apply in London, which we both represent. He issued a warning to the skeleton Front Bench of his own party. It is not appropriate for me to reflect too much on that, but I am sure his points landed with those he wished to make them to.
My hon. Friend the Member for Bexhill and Battle (Huw Merriman) made a strong contribution. He made an interesting observation at the beginning of it, when he said he hosted debates with high-quality speakers in his constituency and came away thinking that they did not seem to sway voters either way. He also said that the economy will bounce back if we act with resolve, which was an important point.
We then heard three speeches from Scottish National party Members—the hon. Members for Kirkcaldy and Cowdenbeath (Roger Mullin), for Ross, Skye and Lochaber (Ian Blackford) and for North East Fife (Stephen Gethins)—and I have taken a couple of interventions from them. They made impassioned speeches and some pretty familiar points.
Greg Hands
No, I will carry on.
The result may not have been what some of us wanted, hoped for or even expected, but that does not mean that the Government were unprepared for it. In the past six years, we have been working hard to bring our economy back from the brink and get our public finances back under control. We said we needed to fix the roof for any economic storms ahead, and that is what we have done. We have brought down the deficit, and we have steady growth, record employment and a resilient financial system, which we spent the past six years strengthening.
We have done the analysis on what leaving the EU might mean, and considered the potential impacts on our economy in both the short and the long term. There was general consensus in the House a fortnight ago on the risks we might face, so hon. Members recognise that it will not be plain sailing and that there are challenges ahead, but thanks to the measures we have taken over the past six years our economy is as well prepared as it could be to face whatever comes our way.
We anticipated that there would be an immediate impact on the value of our currency and the stability of the financial markets. The Treasury, the Bank of England and the Financial Conduct Authority have extensive contingency plans in place and we are watching the markets closely. Although we have seen volatility, the markets nevertheless continue to function effectively.
The Prudential Regulation Authority has worked closely with major financial institutions to prepare extensively for the consequences of a vote to leave. The Bank of England stress tests show that UK banks have enough capital and liquidity reserves to withstand a scenario more severe than the country currently faces. Thanks to our work to strengthen our financial stability, banks in the UK have raised more than £130 billion of additional capital in the past six years, and have more than £600 billion in liquid assets to ensure that they can keep lending to UK businesses and households during challenging times. The Bank of England can provide more than £250 billion of additional funds to support the banks and the smooth functioning of the markets. It can also provide liquidity in foreign currency if required. The authorities have all the necessary tools in place to protect financial stability. They are monitoring developments closely and will not hesitate to take further measures as required.
As we embark upon the renegotiation of our relationship with the EU, I reiterate the reassurances of the Prime Minister that the result does not mean that everything changes overnight. For British subjects living in the EU and EU citizens living in this country, there will be no immediate changes. People can still travel across the EU, businesses can trade as they did and our services can be sold as before.
The Prime Minister has been clear that there will be no immediate triggering of article 50, the procedure by which a member state can leave the EU. That gives us time to plan the new arrangements we are seeking with our European friends and neighbours. It also gives the Prime Minister’s successor the opportunity to make any adjustments to economic policy and our public spending, informed by an assessment of our economic situation from the independent Office for Budget Responsibility this autumn. In the meantime, we will continue to work hard to maintain the fiscal stability we have always worked so hard to deliver. A new unit will be set up in Whitehall bringing together experts from across the civil service, and in answer to the right hon. Member for Birmingham, Hodge Hill I can say that it will extend right across Whitehall, including all Departments likely to be affected, and that it will be given the resources it needs.
Tax Credits
Debate between Greg Hands and Ian Blackford(8 years, 7 months ago)
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Greg Hands
I will not give way at the moment.
Alistair Darling went on:
“One of the unintended consequences is that we are now subsidising lower wages in a way that was never intended.”
Like us, he was not calling for the end of tax credits. He made it clear:
“That is not an argument for scrapping tax credits, it is an argument for making sure that you adjust the system. And it’s also an argument for making sure that we do our level best to drive up those levels of wages”.
We recognise that as well.
The second reason is that the deficit the Government inherited in 2010 was equivalent to about £6,000 for every household in the country. That was being added to the national debt every year. It is now down to £3,300 per annum. Then, we were borrowing £1 for every £4 we spent. We have got that down to £1 for every £10. The world was beginning to doubt our ability to pay our way.
Greg Hands
I will not give way.
This Government’s mandate is to get our spending down, run a surplus and get our national debt down, and these reforms are a crucial part of that. That is what we were elected to do, and that is what the House agreed just last week. In particular, our general election mandate is to make reforms to reduce the welfare bill by £12 billion.
Productivity
Debate between Greg Hands and Ian Blackford(8 years, 11 months ago)
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Greg Hands
Yes, my hon. Friend is here, unlike half the shadow Treasury team who went into the election and were wiped out by either the Conservatives or the Scottish National party—and that includes the hon. Gentleman’s former leader.
Greg Hands
I shall give way shortly. I think I have awakened the hon. Gentleman’s interest with my reference to the SNP.
I thought that it would be helpful to start by setting out the productivity question in relation to the UK’s general economic competitiveness, setting the scene for the problems we face. Hon. Members will of course be aware that, thanks to our long-term economic plan, we can be proud of having the highest growth of the major advanced economies in 2014, and we are predicted to repeat that in 2015. We are highly competitive, and that is linked to productivity. We are ranked ninth of 144 countries globally for competitiveness, we enjoy the lowest corporation tax in the G7, and we are seen as being well governed, as we are in the top 20 of 102 countries on all eight factors of the World Justice Project’s Rule of Law index for 2015. London remains a world-leading international financial centre. British universities are by far the best in the world outside the US. For those who complain that we no longer make things, within two years we expect the UK to match its all-time car production record, which was set back in the 1970s. The city of Sunderland now produces more cars than the whole of Italy put together. We are extremely competitive.
Greg Hands
Let me make a bit of progress.
The high productivity that I have mentioned is very good, but we need to be equally honest about the areas where we can do better. We need to improve our literacy and numeracy skills, and our OECD position for intermediate skills needs to rise. To match the highest rate of female participation in the workforce in the G7, which is in Canada, or in the OECD, which is in Iceland, we would need over 500,000 or 2.5 million more women to enter the labour force respectively. Our gross value added growth is still too reliant on London and the south-east. We are not building enough housing, and our investment in roads and rail has not yet undone the effects of the decades in which we under-invested. All that means that our economy needs to find an extra gear.
We should view this debate in the context of the broad decreases in productivity growth across the OECD over the past few years. We are not unique in this regard. Other G7 countries, including Germany and Italy, have seen their measured productivity per worker fall since 2007. We have to accept that productivity is a major challenge, but it is not a new challenge—it has been around for decades. To meet that challenge, we must look calmly and seriously at the variety of factors that affect productivity, and put in place wide and ambitious long-term reforms.
Importantly—the hon. Member for Nottingham East needs to engage with this point—those reforms must not jeopardise other elements of our economic growth. That is the approach that the Government will take in our productivity plan, because productivity is not an end in itself, but a means to an end. It is all about prosperity. When we publish our productivity plan, I hope that the Labour party will see fit to support it, because we agree that improved productivity will be good for living standards across the country and help us to meet our fiscal commitments, which is a point that he raised.
Ian Blackford
What the Chief Secretary is saying does not meet the reality of what has been happening for the past seven years. Productivity in the UK has fallen and the Government have failed to deliver prosperity. The root of that has been the failure of macroeconomic policy. Your big idea was quantitative easing, with £375 billion of new assets being created, but none of that has fed through to bank lending. That is why we have not seen the underlying investment in our economy that is required. You need to address that and make sure that we see investment in infrastructure, industrial investment and a plan for growth, not some meaningless productivity, which is just hot air and words, but no reality.
Madam Deputy Speaker (Mrs Eleanor Laing)
Order. Several people this afternoon, not just the hon. Gentleman who has just spoken, have used the word “you”. When one uses the word “you” in this Chamber, it refers to the Chair. I have not done any of the things I have been accused of this afternoon. I do not want to pick on individual Members at this early stage of the Parliament, but please let us use the correct language.
Greg Hands
I dispute the premise of the hon. Gentleman’s question. Productivity in this country is rising, albeit at a relatively low level. We would like it to be higher. It has risen by 0.9% this year. The OBR’s projection is that productivity will increase by between 2.1% and 2.5% per annum in the coming years. We need it to increase by even more than that, but it is certainly not the case that productivity has collapsed over the past couple of years.
Greg Hands
Okay, I hear the hon. Gentleman.
To answer the point raised by hon. Member for Nottingham East about the OBR, the OBR already produces forecasts and commentary on productivity, and will continue to do so independently and impartially as it always has done.