Economy: Sustainable Jobs

Lord Teverson Excerpts

Thursday 27th June 2013 Lords Chamber

[Lord Teverson]

My Lords, I was at the final two debates last night, one of which was about small and medium-sized enterprises and exports. Many noble Lords commented that language was one of the challenges for small and medium-sized businesses in exporting. One of the most difficult areas of language, with which Google Translate would never deal, is sayings or colloquialisms. One of the first I ever learnt was, “To every cloud there is a silver lining”. I want to talk about the cloud, and then I will talk about the silver lining.

The cloud is literal: it is carbon emissions. It causes global warming and is a real issue. Now that we have passed 400 parts per million in carbon emissions and are moving towards higher temperatures, we have, as noble Lords know, the retreating polar ice caps and sea levels going up some 3 millimetres every year. It is carrying on. I was obviously delighted by my noble friend’s pronouncement about investment this morning, but I was even more ecstatic about President Obama’s recent pronouncement about the United States restarting its global and national engagement on climate change and global warming, particularly on restricting American coal emissions and making a major contribution to the reduction in global carbon emissions.

I say that because that agenda is being restated globally. Although we think of China as one of the world’s greatest polluters, it is a major agenda item there. I hope, particularly with the involvement of the United States, that the world will move forward on that. However, there is still a cloud up there that threatens our planet, our lifestyle and our economy into the long term.

What is the silver lining? It is clearly that this offers opportunities to us as a nation, uniquely, to take advantage of the technologies and how the way in which we live needs to change. As someone who often speaks on energy and climate change, that is why I supported the coalition so strongly when it was formed and the coalition agreement was authored: we were to be the greenest Government ever. I agree that we have struggled with that. We are still there and are still moving forward, but that aim and the policies arising from it—I will go through some of those—are the major reasons why we can look forward to growth beyond our recent track record and that of other European nations. Over the past couple of years, growth in green industries has been at around 2.5% per annum, while we have had relatively difficult economic performance elsewhere. Jobs have gone up in that area as well.

Green jobs and growth will really help us in three main areas, and they are not always the ones that we think about; we sometimes think about investment in wind farms and that sort of area, but I will come back to that. One of the key areas is competitiveness. We often hear about how shale gas has reduced energy costs in the United States and about how, because of that, US industry has become more competitive. However, that is an economy that thrives on energy inefficiency. That is the background to the power of the United States: wasteful carbon emissions and energy use making it the great manufacturing and industrial nation that it was.

In this country we have a very different model for potential energy efficiency. For the long term, we can perhaps reduce energy costs for business through the lower gas prices that we are yet to see from any shale gas development, but clearly we can ensure that we can do so through energy efficiency. That is why the programmes that the Government have brought forward, particularly the Green Deal, are important for our future not just for our homes but for businesses as well.

That initiative has only just started. The Government have been absolutely right to make sure that the programme has had a fairly soft start so that we learn, as that process goes forward, that it does not rely on public expenditure, making it future-proof against budgets and Chancellors of whatever colour taking decisions. Once that investment programme works, it has the benefit not only of relieving fuel poverty and reducing fuel bills but of making our industry more competitive and producing a large number of real jobs in the semi-skilled area, which are so important, as well as the skilled areas as we move through the long term to the future.

I think that we have made the right decision on energy-intensive industries, although I was somewhat iffy about this at the time. I have to admit that we risk increasing carbon and energy costs and offshoring energy-intensive industries. By doing that, we just shift those emissions geographically from the UK, where there is relatively better environmental regulation, to other economies where perhaps that is not the case. Therefore I welcome a transition for those industries, and it has to be a transition until we have a much more level playing field across the rest of the world.

Moving on from competitiveness, we come to investment. In the green economy, we have, as my noble friend the Minister has already announced, a huge programme of potentially £100 billion for energy investment. Much of that will be very highly skilled work, which will be local and will produce local jobs and local skills. We have to make sure that we get the current Energy Bill on to the statute book and make some of the detail better than it is at the moment, but we have a real focus on making sure that that happens.

In Sunderland in the north-east—I will probably defer to my noble friend Lord Shipley on this, as he knows that area better—Nissan has been producing Leaf electric cars since April this year. It is the only plant in Europe to do so, and provides some £450 million of investment and 500 extra jobs. In addition, we have a number of potential wind farm sites. In Scotland we have AREVA, where we hope to have another 750 jobs. We will see if those arrive. This is all about making sure that the industry has confidence in the green economy.

Apart from investment and competitiveness, we will make this business work only if we have the skills in the economy to drive it forward. This requires two things. The first is certainty about government policy. The Government have not always been hugely successful in that between the Department of Energy and Climate Change and the Treasury. It is much better now, given the deals that have been done and the road map that we have before us. In addition, we require investment and skills. That is why the Government’s target, particularly in BIS, to increase investment in apprenticeships is really the right way forward. We have a great opportunity there.

I conclude by quoting John Cridland, who I think has already been mentioned once this morning. He said:

“it is easy to understand why some people are fearful that ‘going green’ might further dent the economic recovery. For me, this is a false debate”.

He goes on to say:

“tackling head-on the critical challenges of energy security, affordability and climate change … isn’t a lofty ideal to aspire to—there is a hard-nosed economic argument that moving to a low-carbon economy can drive significant business investment and create many new jobs across the country”.

I think that is the fundamental view of this Government in their growth and economic strategy, and they must keep to it. We will have in the end not only the greenest economy but one of the most successful economies, not just in Europe but in the world.