Energy Infrastructure (UK Supply Chain)

John Hayes Excerpts

Tuesday 26th March 2013 Commons Chamber

[The Minister of State, Department of Energy and Climate Change (Mr John Hayes)]

It was T. S. Eliot who said that we know too much and are convinced of too little, but that cannot be said of my hon. Friend the Member for Waveney (Peter Aldous), who is gaining a reputation as both a powerful and an elegant orator—if I may say so—in the interest of his constituents. Few Members of this House are more determined to advance the employment opportunities, the skills opportunities and the wider economic opportunities of the people they serve than my hon. Friend. I pay tribute to him for bringing this matter to the consideration of the House. He served with some distinction on the Energy Bill Committee, which he mentioned in his speech. I enjoyed working with him, and look forward to working with him further in future on that and other matters.

My hon. Friend rightly emphasised that the investment in our energy infrastructure is vital. The UK must be able to compete to stay ahead of others in what is increasingly a competitive world order. This is, to the use the Prime Minister’s phrase, a global race. We must ensure not just that we keep up, but that we win that race.

It is estimated that replacing and upgrading our electricity infrastructure and closing power stations over the next decade will require no less than £110 billion of capital investment. The Government’s electricity market reform programme, which my hon. Friend mentioned in his remarks, is designed to drive investment that will support as many as 250,000 jobs in the energy sector.

As part of the Energy Bill, we will of course engage in the process of enjoying with the people who will bring about that investment a full and proper debate on jobs and skills in the UK. We are working with communities to maximise benefits and working with the industry to ensure that this is an opportunity to drive growth.

[Chris Heaton-Harris (Daventry) (Con)]

I assume the Minister understands that, with such huge spending, he needs to take the people of Britain on that journey with him. Will he tell the House something about the call for evidence on community engagement on the benefits—supposed benefits—of onshore wind, which his Department finished in the middle of November 2012? We eagerly anticipate the results.

[Mr Hayes]

Some say I am the people’s voice. I would not want to claim that myself, but it is certainly true that the people’s interests are always close to my heart. I can tell my hon. Friend that we will respond to that call for evidence. Perhaps I should say more about it. I have asked my officials to look at pre-application consultation, benchmarking good practice, and ensuring that communities have the resources to evaluate and consider wind applications. Many representations have been made on cumulative impact and topography. It is vital—to use not my words, but those of the Secretary of State—that no community feels bullied into having wind turbines in the wrong places, and that the Department of Energy and Climate Change and indeed Government policy should not be used as an excuse for putting them in the wrong places. I cannot be clearer than that, but my hon. Friend will look forward to that publication with excitement and enthusiasm. He knows where I stand on these matters: I stand on the people’s side.

To return to the main thrust of my argument, the scale of the investment that I described a moment or two ago is big even compared with some of the other major infrastructure investment that the economy is likely to enjoy. It makes up nearly half the total investment in the pipeline—it is up to six times the investment expected in water or communications, and more than 30% greater than expected investment in transport. Perhaps sometimes in energy, we punch below our weight in making the case on infrastructure investment and the effect it can have on the wider economy, and on skills and jobs, as my hon. Friend the Member for Waveney has made clear.

As I have said, it is critical in that process that we work with businesses, not only to attract greater levels of investment to rebuild our energy infrastructure, stimulate our economy and bolster the jobs market, but to do so in a way that builds a sustainable supply chain.

In September last year, the Government launched an industrial strategy that will drive forward our approach to creating a new partnership with the business sectors that will give us the greatest potential for development and exports. My Department and my former Department, the Department for Business, Innovation and Skills, which my hon. Friend also mentioned, are working closely together and in partnership with UK industry to produce three energy sector strategies as part of the industrial strategy, identifying ways that we can build up the UK supply chain in order to maximise the economic benefits of the investment we have attracted to communities and constituencies across the country.

These strategies cover oil and gas, nuclear and offshore wind, all of which my hon. Friend mentioned in his speech, and are among the first to be launched as part of the Government’s industrial strategy. Indeed, the nuclear strategy was launched today. It sets out how we can achieve our ambitions in nuclear power, bringing a new generation of nuclear power to deliver light and heat to lives across the nation. It also sets out how we can achieve a massive increase in opportunities for those who work in that industry. It is fair to say that some of those skills have been eroded over time as the last nuclear power station we built was in 1985. There will be jobs in building those stations, in running them and in the regulatory system—the context in which they sit, because of course all we do will be safe and secure.

The oil and gas strategy will be launched in Aberdeen on Thursday. The offshore wind strategy will be published later this spring. An abundance of virtues is emanating from the partnership between my Department and BIS. The strategies set out where we are now, where we want to get to, and how we will get there. This work will bring forward important analysis of supply chains, focusing on barriers, skills and technology.

There is good news. For example, Hitachi, which is a partner organisation that wants to develop a new generation of nuclear power in this country, has suggested that 60% of the jobs created will be local. The Hinkley Point development, which has been debated in the House several times and is of critical importance, estimates that potentially 57% of the jobs will be from the UK. These are real and tangible benefits to our nation as the result of a policy that is not protectionist—although Joseph Chamberlain is one of my heroes—but planned, on the basis that if we get the economic effect for which my hon. Friend calls, we will build unparalleled resilience, flexibility and responsiveness. It is right that all should benefit from the plans that I have outlined today.

I make no apologies for being a patriot—no one in this House should—so of course the measure has to be quality. I know that, by and large, British is best. As we move forward with our nuclear supply chain action plan, which was delivered in December 2012, and work on the community benefits for sites that host new nuclear power stations and new technology in other areas—mentioned by my hon. Friend the Member for Daventry (Chris Heaton-Harris)—we must put the people’s interests first. That is also true in the oil and gas sector.

As I said, the oil and gas sector strategy will be published on Thursday in Aberdeen. It will focus on how we can develop further opportunities in the North sea to the benefit of communities and of the supply chain. My hon. Friend the Member for Waveney will know that our gas generation strategy, published last December and of course on everyone’s bedside table, is designed to provide certainty for investors about the Government’s view of gas generation to ensure that sufficient investment comes forward within the context of the Government’s wider energy policies. Gas currently forms an integral part of the UK’s energy generation mix because it is reliable and flexible. It provides around 40% of our electricity. Shale gas is another exciting opportunity and our new office of unconventional gas and oil will be the pivot of our thinking and developments in that area.

We have enjoyed an exciting Easter Adjournment debate, and, at the end of that, another exciting debate thanks to my hon. Friend the Member for Waveney. It remains for me to wish you personally, Mr Speaker, a joyous Easter, and to do so in the knowledge that this Minister and this Government are determined to do right by the British supply chain.

Question put and agreed to.