Environment: Low-carbon Technologies

Lord Sugar Excerpts

Wednesday 14th July 2010 Lords Chamber

[Lord Sugar]

My Lords, I join other noble Lords in congratulating my noble friend Lord Haskel on initiating this debate. I also welcome my noble friend Lord Prescott and congratulate him on his excellent maiden speech. There was I thinking that he would be nervous, but obviously not. I think we are all in agreement about the need to deploy low-carbon technology in the future, for the obvious and well debated reasons. Therefore, I will not labour on that subject, but instead focus on the emerging opportunities available to UK industry in low-carbon technology.

Having spent 45 years in technology, I, like many of your Lordships, have experienced the rapid advancement in many industries. However, to my disappointment, I have witnessed time and time again how Britain has fallen behind, and regrettably does not lead in any sector. My fear is that we are going to miss out again.

I have time to discuss only one sector, wind turbines, on which my noble friend Lord Smith has already touched. This is one very good way of achieving our renewable energy targets. There has been talk that these sci-fi constructions will scar our landscape, but this technology is needed to secure our future. So it is no different from the days in 1883 when Thomas Edison introduced the first electricity pylons, which we have all come to accept. To those objectors I simply say: get over it, because it is going to happen—and happening, it is. As a small island compared with mainland Europe, we have nearly exhausted land sites where wind farms can work efficiently, so we have turned to offshore wind installations. I say “we”, but your Lordships should not assume that any UK companies are enjoying this massive growth industry. No, once again, we are behind. As mentioned by my noble friend Lord Smith, foreign companies are winning the contracts dished out by the utility companies.

It is estimated that in the next five years in the UK, £11 billion will be spent on wind turbine installations. It is further estimated that more than £100 billion will be spent between now and 2028.

I am going to take a little time to look at these things. They are made up of turbines—which, for simplicity, let us say are giant dynamos with a propeller on the front—a tall steel tower with a concrete base and a load of sophisticated wiring, transformers and more wiring routing to a grid. This is not rocket science; it is large-scale engineering, metal bashing and construction. But do we in the UK get a slice of the cake? The answer is no. Your Lordships will be disappointed to hear that so far no more than 10 per cent—possibly 11 per cent—of the build cost is down to UK suppliers.

To embark upon offshore installations, specialised ports and boats are needed to service the projects. Britain has many ports that can be adapted to handle this traffic, with associated land for the construction of factories and grid stations. Recently we heard of the closure of a steel plant in Middlesbrough. Coincidently, in the same region, we have seen our shipbuilding industry completely decay. Let us take those two elements in the area that I just spoke of. It does not take a brain surgeon to work out that, given the opportunity, there is a workforce and facilities there that can take on and make the lion’s share of this stuff. Frankly, they could do it with their eyes closed.

The current contractors which enjoy the orders dished out by the utility companies will of course accuse me of oversimplifying the technology and would no doubt put up arguments to defend their position. Certainly, there seems to be no patriotism from the utility companies when dishing out the contracts. They focus on employing contractors who have done it before. This ethos needs to change and change quickly.

I have heard that in recognition of the potential of the UK, some foreign companies are making noises in committing to a UK presence. I am sceptical about this; it smacks of the old screwdriver plants that were set up years ago to overcome tariffs and pressure from the then UK industry and Government. The Government hold the ace card here. The Crown Estate is responsible for dishing out the licences to the development companies. These companies need to generate renewable power in order to comply with the Government’s renewables obligation certification scheme. Here is the solution which I should like the Minister to take away, despite the fact that there is no one else listening over there. No licences should be granted unless there is an undertaking that an agreed percentage of UK content and labour is used on the contract. This will force the hand of the current foreign suppliers to set up in the UK, buy from UK subcontractors, build plants and pay for modification to some of our ports. To be reasonable, the percentage can be phased in in a stepped manner, starting at, say, 25 per cent in the first year, rising to 70 per cent by the fifth year. Eventually, UK subcontractors will turn into main contractors and be able to compete and not only enjoy business in the UK but win valuable exports.

I am sure that my simple suggestion will raise issues of EC law, unfair trade and all that stuff. I say to the Minister, “Please take a leaf out of our French cousins’ book”. They somehow manage to use French contractors for all major projects. As an example, their public offices are littered with normally uncompetitive—on a worldwide basis—Alcatel and Sagem IT and telecoms equipment. The Minister has clever people at his disposal to overcome these hurdles and can do it if he wants to. The coalition has said that 500,000 people from the public sector will be put out of work. However, it goes on to give us the good news that the private sector will employ 2 million. Well, if that is true, here is a way to start to employ some of those 2 million. Britain needs to put a stake in the ground in this technology and become a major player.

My parting comment is that when the Minister returns to his office, I want the Siemens Fujitsu computer on his desk to prey on his conscience every single day as a constant reminder of my words today.