(10 months, 2 weeks ago)
Lords ChamberI congratulate the Minister on her appointment. This is our first interaction. We served on the GREAT campaign advisory council for many years until her ministerial appointment. I am reassured to hear that the Government want to be cool, calm and collected. I am also reassured that the Government are doing their best to try to get a deal with the United States of America. Donald Trump likes deals, so let us try to get one with President Trump.
However, although the United States has £300 billion-plus of trade with the UK, we have £126 billion in services exports to the US—a huge services surplus that nobody talks about—which is not applicable for these tariffs. We should make the most of that strength. Even in goods, we have a small surplus. But the United States is only 13% of the world’s trade. Surely we should work with the other 87% of countries around the world to make sure that we continue with the rules-based multilateral trading system.
Secondly, the Minister mentioned growth, and I will raise one of the best ways to generate growth. I am chair of the International Chamber of Commerce here, ICC UK. The ICC is the largest business organisation in the world, with 45 million members. Before these tariffs were announced, we laid out a plan for growth that could unlock £25 billion in trade growth. By digitising trade, we can take what takes three months on a paper-based trade down to one hour. Why do we not, as leaders, champion digital trade around the world and take a leadership role in these turbulent times?
Before my noble friend answers the noble Lord’s question, I urge all noble Lords to keep their remarks brief and put questions to the Minister rather than making this Statement an occasion for wider debate. This will allow all noble Lords who wish to receive answers to their questions to do so.
Baroness Gustafsson (Lab)
My Lords, it is a joy to be here with the noble Lord again, and I thank him for his question. Why do we not work with all sides and not just the US? My role is Minister for Investment, and I love trade and investment—and I do not see that this is a matter of decisions. I want to have a strong and vibrant trading relationship with the US, I want to have a strong and vibrant relationship with Europe, and I want to have a strong and vibrant trading relationship with many of the emerging economies. This is something that we can navigate; it is not a situation where we need to pick one at the cost of the other, and I am really excited about seeing how we build and develop on all those trading relationships all around the world.
On growth, I share the noble Lord’s passion. I believe that the digital trade that we have is a huge opportunity. Already there is a lot that we do in the services piece that is worthy of celebration. Stitching that together alongside the digital surely has to be the future of the growth-driving economies that we see coming out of the UK. If I can promise noble Lords one thing, it is that I will be an advocate and ambassador as we champion the growth that we can drive through digital trade.
(1 year, 1 month ago)
Lords ChamberMy Lords, at this late stage of the debate, I am bound to be repeating much of what has already been said. I beg your Lordships’ indulgence for this. My speech may therefore be regarded as a summary as much as a commentary.
Today, we depend largely on renewable sources of energy for generating our electricity. Wind power is the largest component in the mixture of renewable power, and its highest share was achieved on 19 November 2023—between, I believe, 4.30 am and 5 am—when it reached 69%. Such widely proclaimed facts tend to divert our attention from the unreliability and intermittency of renewable sources of power. They are in short supply in periods when the wind does not blow and the sun does not shine.
In such circumstances, our present recourse is to rely on gas-fired power stations to fill the gap in the supply of electricity. These stations are a legacy of a previous era of electricity supply, when North Sea gas was plentiful and cheap. The gas-fired power stations rapidly replaced the coal-fired power stations. However, gas is not cheap and, moreover, burning it releases carbon dioxide, which is the principal agent of global warming. If we are to continue to rely on these power stations, the carbon dioxide that they release must be captured and sequestered underground.
In the absence of gas-powered electricity generation, additional sources of power must be found. Also, a means of storing energy must be found that is available for generating electricity at times when the renewable energy is in short supply. Two leading questions arise. The first concerns the urgency with which these recourses should be pursued, and the second concerns the proportions in which the storage and the additional power should be provided.
The report of the Science and Technology Committee that is the subject of today’s debate emphasises the urgency with which long-term energy storage must be provided, and makes it abundantly clear that the necessary actions to avert an energy crisis are not being taken in good time. To substantiate this aspersion, one needs only to read the recent documents published by NESO—the National Energy System Operator—which is the agency responsible for advising the Government. A simple way of assessing its outlook is to search for “storage” throughout its documents. One will discover that it is to be found mainly within the phrases “carbon capture and storage” and “storage heaters”. There are few instances of the phrase “long-term energy storage”, nor is there any assessment of the available capacity for such storage.
A truth that is revealed by the report of the Science and Technology Committee is that there is only a limited capacity in the UK for storing gas. The current capacity is devoted to storing natural gas. We are told that the UK stores 10 terawatt hours of natural gas, compared with 217 terawatt hours in Germany, 122 in France and 162 in Italy. This startling disparity is explained by our tendency in the past to treat natural gas from the North Sea as if it were on tap. It is no longer readily available to us in this manner.
We must envisage a greatly enlarged future demand for gas storage in underground locations. It will have three aspects. In the short term, there will be a continued and, indeed, increased demand for the storage of natural gas. An enlarged store should partly protect the UK from the volatility of gas prices. There would also be a requirement for the underground storage of captured carbon dioxide, which would permanently pre-empt some of the storage capacity. There should also be a requirement for storing the hydrogen that would be required to alleviate the intermittent scarcity of renewable energy.
The committee report tells of a lack of concern on the part of officials in the face of these circumstances. They are unable accurately to assess what the future requirements for gas storage might be. In the absence of certainty, they are disinclined to take action. The report suggests that action must be taken immediately despite this uncertainty.
The report also suggests that long-duration storage facilities can take seven to 10 years to build and require considerable upfront investment. The problem in providing this gas storage is due in part to the difficulty in devising appropriate incentives to encourage the private sector to undertake the task. A so-called strategic reserve of gas, to be called upon in the rare event of a prolonged dearth of renewable energy, does not offer an attractive investment prospect for private enterprise. This has been demonstrated by the partial closure by Centrica of the Rough offshore gas storage facility on the grounds that it was uneconomic to maintain it. I would suggest that the appropriate word here should be “unprofitable” rather than “uneconomic”.
Neoclassical economic doctrines have come to dominate the thinking of politicians and civil servants, which has made it difficult for them to accept that there is no viable market solution to this conundrum. They hesitate to accept that such a strategic reserve should be in public ownership.
The next matter concerns the sources of our energy. A report from the Royal Society proposes that we should rely almost exclusively on renewable sources of energy—on the wind and the sun. It is proposed that surpluses of electricity from these sources should be used to generate hydrogen by the electrolysis of water. Then, in times of a dearth of renewable energy, the hydrogen should power turbines and reciprocating engines, driving electricity generators. The proposal would involve a major investment in energy infrastructure. Facilities for generating hydrogen and using it to generate electricity are also required. Additionally, a network for piped hydrogen would be required. The electricity network would need to be updated to transfer the power from the remote places where it is generated to places where it might be used. Alternative recommendations involve various amounts of electricity generated by nuclear power.
I shall be fairly brief. One recommendation, which I strongly support, proposes that small advanced modular reactors should be deployed to provide heat and power for both domestic and industrial users. The inherent safety of fourth-generation nuclear technologies will allow the reactors to be located near the industrial users, thereby reducing demands.
Please let me encapsulate this final point. The time is advisory, not mandatory. I have a major point to make.
The small size of the reactors would be an advantage in this connection in comparison to the so-called small modular reactors which typically have a power output of 300 megawatts, which is more than an industrial user might require. Batteries of advanced modular reactors could be used to create large electricity-generating power stations. A sad fact to which I must testify is that Britain is losing its projects for developing such reactors—they are closing though lack of funds or finding sponsors in other countries.