I beg to move,
That this House
believes that the achievements of the previous administration and cross-party support for the Climate Change Act 2008 underpin the attractiveness of the UK to green investment;
notes this Government’s promise to be the greenest Government ever;
regrets that under the present Government investment in clean energy, particularly wind power, has declined and the UK has fallen to thirteenth in the world for investment in green growth;
further regrets the delays to the Green Investment Bank, the lack of clarity over financing of the Green Deal, the uncertainty surrounding funding for carbon capture and storage, the chaotic mismanagement of the cuts to the feed-in tariff for solar power, and the undermining of zero-carbon homes;
further believes that the effect of these policy failures, mixed signals from the Government and open hostility from Government backbench Members to action to cut carbon emissions have exacerbated investor uncertainty, hit small and medium-sized businesses, and reduced the UK’s ability to attract, retain and increase investment;
rejects the idea that the transition to a low-carbon economy is a burden and believes it has the potential to be a major source of jobs and growth for the UK;
and calls on the Government to bring forward an active industrial strategy for low-carbon growth by providing a stable policy framework to unlock private investment, improving public procurement, developing a low-carbon skills strategy, rebalancing the economy to support growth in the regions and encourage manufacturing, and engaging communities in the transition to a low-carbon economy.
I congratulate the Secretary of State on his appointment and welcome him to his new position for our first exchange at the Dispatch Box. We would have met sooner, but he chose not to come to the House to defend his Department’s shambolic mismanagement of cuts to the feed-in tariff for solar power, which, according to the Government’s own estimate, will see at least 5,000 people lose their jobs this year. The right hon. Gentleman was missing from the Commons because he was opening the world’s biggest offshore wind farm in Walney, Cumbria, where he said:
“Britain has a lot to be proud of”.
“helping to give the UK the highest operating offshore wind capacity in the world.”
The legacy of Labour’s active support for renewable energy is taking shape and we share his pride in the foresight of the previous Labour Government.
Nearly 1 million people already work in environmental industries in the UK, with the potential to create 400,000 more jobs. We are concerned that Britain is being left in the doldrums, however. We must get on board or risk missing out on growth, job creation and a revival of Britain’s manufacturing sector. Today, we have an economy without growth, inflation still at 3.6%, unemployment at a 16-year high, borrowing that will be higher every year for the next five years and a Government who are strangling growth and destroying jobs. Where other countries see a market that is already worth more than £3 trillion and opportunities for new industries, new skills, new supply chains and—yes—new energy sources, the Government just see burdens for business and blots on the landscape.
Under Labour, Britain was open for green business. When we left office, the UK was ranked third in the world for investment in green business, investment in alternative energy and clean technology reached £7 billion, energy generated from new renewable sources doubled, the UK’s global lead in offshore wind had been achieved and the Climate Change Act 2008 had been a world first with cross-party support. Even the Prime Minister did his best in opposition to detoxify his party’s brand and establish new green credentials. Who could forget the photo of the Prime Minister hugging a husky—or was it a hoodie? It was probably both, as there was a lot of hugging going on in those days. Who could forget the fanfare that greeted the wind turbine installed on the Prime Minister’s roof, only to be taken down later? Or the Prime Minister’s much-heralded pledge that his would be the “greenest Government ever”? Where did it all go wrong?
The Secretary of State is new to his post, but he should know that on this Government’s watch the UK has fallen from third in the world for investment in low-carbon businesses to 13th, behind China, Germany, the United States, Italy, Brazil, Canada, Spain, France, India, Japan and Australia. On his first day, the Secretary of State declared that there would be
“no change in direction or ambition” but unless our ambition is to fall even further, a change is exactly what we need.
The right hon. Lady waxes lyrical about the importance of a low-carbon economy, but is it not the case that under the previous Labour Government, emissions barely changed at all and were rising when her party left office? Does not the fact that there are so few Labour Members in the Chamber today show how little commitment her party has to this issue?
I am very proud that we not only met our Kyoto target on reducing carbon emissions but exceeded it. I am also proud that we set in train a number of initiatives that the coalition Government have in some ways had the sense to follow. It is a good thing that this country got agreement on our targets for reducing carbon emissions because business investors say it is important for them to know that there is coherence in countries’ party political structures on this matter. It is a shame that the legacy that has made this country a favoured one for investment is now moving away—partly because of the mixed messages coming from Government Front Benchers. For example, what the Secretary of State has to say might be in conflict with what others say and might not tally with what the Chancellor of the Exchequer says at his party conferences or elsewhere.
Let me make a little more progress. We know that businesses will not invest, build factories or create jobs until the Government end the dithering, stop shifting the goalposts and get behind the industries of the future.
On that very point, would my right hon. Friend be interested to know that literally dozens of people in and around Swansea are losing their jobs as a result of the withdrawal of the feed-in tariff? What is more, Tata Steel has just announced an opportunity for people to go home, not work at all and be paid half-pay, simply because of this ridiculous unilateral carbon pricing. On both sides—heavy industry and green energy—uncertainty is leading to less investment and to lay-offs; it is disgusting.
As I have said, the Government have confirmed that, based on their own estimates, 5,000 people in the solar industry alone will lose their jobs this year, including constituents in my hon. Friend’s constituency. Last week, business after business lined up to say that billions of pounds-worth of future investment is now on hold because there are serious question marks over the Government’s commitment to wind power. We are on the cusp of a new industrial revolution that is shaking up the old world order. We have to be leaders, not followers, in this revolution. It is about creating a new economy that is cleaner, leaner and more competitive and that provides the energy we need. We all know that the longer we delay action, the costlier it will become to mitigate and adapt to climate change, and the economic opportunities will slip through our fingers.
Does the right hon. Lady agree that the Mayor of London, Boris Johnson, is setting an excellent example? He set up the London green fund, from which he has committed £50 million towards the London energy efficiency fund, some 86 buildings have already been refitted and greened and there are another 297 public buildings in the pipeline. All that is going to create about 700 new jobs.
And, of course, the Mayor is pushing the price of public transport up, which means that more people might get into their cars. However, there is room for discussion regarding one point that the hon. Lady made. Labour and Conservative local authorities up and down the country have been looking at ways of helping their citizens, particularly those in social housing. That is why it is a crying shame that so many local authorities of all political persuasions have had to cancel or put on the back burner plans to use solar power in their social homes and community buildings; 100,000 social homes are losing out because of this Government’s decisions on solar power.
I will give way again shortly.
Whatever one thinks of the British weather, we are not short of wind. Apparently, we are the windiest country in Europe, and we should be a world leader on wind energy, onshore and off, but last year there was a 40% fall in the amount of new wind capacity being brought online, with only one offshore wind farm being completed.
Where we sought to support offshore wind manufacturing by establishing a £60 million fund to attract investment, nearly two years—two years—after the Government promised to support the scheme, and only after a string of critical press reports, just one project has been awarded funding. Some 98% of that budget, which Labour initiated, remains unspent. As the Select Committee noted in its report, the UK has the best marine energy resource in Europe. It has the potential to supply 20% of current electricity demand and create 10,000 jobs by the end of this decade, but this Government’s decision to close the £50 million marine renewables deployment fund and replace it with a £20 million innovation fund dented confidence and undermined certainty in the business community.
I have listened carefully to the right hon. Lady’s catalogue of achievements by the previous Government in this area, but can she explain why, given all that, in the last year of the previous Government, we were 25th out of 27 in the EU for use of renewable energy? Furthermore, in 2010, that decreased, which is extraordinary.
We doubled renewable energy generation under the Labour Government. We established Britain as a world leader in offshore wind capacity. I think I am right in saying that we were at the top of the league in investment. Was there more to be done? Undoubtedly, but the record that we left is being harmed significantly on a daily basis by the actions of this Government.
My right hon. Friend may be aware that I switched on 30 offshore turbines at North Hoyle off the coast of my constituency about eight or nine years ago. Those were the exact same turbines that the current Prime Minister referred to as “giant bird blenders”. What does she think of the Conservatives’ attitude to offshore wind?
Of course, the Conservative attitude to wind, offshore or onshore, has been represented by 101 Conservative MPs who wrote to their Prime Minister complaining about our attempts as a country to utilise that resource that is at our disposal. Unfortunately, the Chancellor of the Exchequer believes that we should not pursue the potential of this new energy revolution faster than Europe—we should go back to the slow lane. In the 1980s wind developers decided that there was insufficient support from the Government of the time—we all know which party that was—and they went elsewhere. That is why Denmark became the world leader in this area and we missed an opportunity.
Because of those decisions in the 1980s, we have been playing catch-up ever since. We must not destroy the foundations laid in the past five years or so by not making the right decisions now and playing to those who do not understand that the future is a new form of energy and a new way of empowering our citizens to control prices and at the same time have cleaner energy.
It is entirely the case that not everything done by the Labour Government in this area was ineffective or poor, and I pay tribute to the things that they did. The one thing that they did not wake up to until the very last months of the Labour Administration was the need to do much more for renewable energy. Will the right hon. Lady accept that the figures when Labour left office show that of all the 27 EU countries, the UK was at the top for the amount that it still needed to do in percentage terms to reach its 2020 target of 15%? The UK had 12.8% yet to go, compared with all the other countries, which had made a much more significant change during the period of our Labour Administration.
I thank the right hon. Gentleman for his courtesy in acknowledging that the Labour Government achieved a number of important milestones in renewable energy, and showed leadership worldwide in setting climate change targets and targets for the reduction of carbon emissions that were and continue to be challenging. However, I do not accept the woeful description of what we did in government. We doubled renewable energy generation and established Britain as a world leader in offshore wind capacity and in the prototype development of wave and tidal technology, but our achievements are now under threat. As a result of this Government’s mixed messages and failing policies, investment in green growth in the UK is falling. For instance, investment in wind energy fell by 40% in the first year they were in power.
I suggest to my right hon. Friend that for many years there was a consensus across the House that there was no need to invest in renewables because we were self-sufficient in gas and oil. The fact is that no one would have invested when we had such riches off our own shores. We all took time to learn the lessons, but when we did we moved very fast indeed.
I pay tribute to my right hon. Friend for her contribution to that effort. We have to be realistic about the fact that the strategies in this area have been affected by different forms of complacency over many decades on what we could rely on and what was certain in our changing world. Also, importantly, even if we could rely on certain energy sources for a period of time, that would not help us do what we need to do: reduce our carbon emissions. That is why some of the comments from Government Members are so worrying. They could lead people into false arguments about how relying on new ways to access different forms of fossil fuels is somehow the answer. Those sorts of messages are very difficult for investors to understand, because they do not project a sense of moving forward and seem to reflect a view held by some Government Members that, rather than a transition away from fossil fuels, there will be an opportunity around the corner that will allow us to go back to relying on them. We cannot accept that. That is why the Opposition decided to allocate some of our time to debate this and why we will continue to talk about it in future to ensure that we stay on track, because we believe that this opportunity cannot be missed.
I will make some progress before giving way again.
In government, we set up a system of feed-in tariffs to support solar and other forms of microgeneration. Within 18 months the solar industry had grown from 3,000 employees in 450 businesses to 25,000 people in nearly 4,000 businesses. Our vision was shared by many other countries; Germany installed half the world’s solar panels and supported 250,000 jobs and Australia could boast at Durban about the completion of 1 million homes with solar PV. What can this Government boast? Cutting off an industry at its knees put hundreds of businesses at risk, destroyed thousands of jobs—5,000 according to the Government’s own estimate—increased the import of Chinese solar panels and denied millions of households the chance of a little more control over their energy bills. I will not dwell on the catastrophic series of events that have left us where we are. Suffice it to say, even the Energy and Climate Change Committee, chaired by Mr Yeo, has stated that
“the damage to both investor confidence and to some consumers could have been avoided.”
I am listening carefully to the right hon. Lady’s speech—there are a number of Government Members who are. Is she seriously suggesting that she left a feed-in tariffs regime that was fit for purpose and that the Minister of State, Department of Energy and Climate Change, my hon. Friend Gregory Barker, did not have to salvage it from the car crash he found when he took office?
Well, it took the Government 18 months to give six weeks’ notice to the industry, but the truth is that Labour always said that this scheme and others that support fledgling sectors need to be reviewed and that prices will change and come down, but not in the way the Secretary of State and his predecessor indicated. It caused mayhem in the system and has left other business investors in green technologies questioning whether they should dip their toe in the water. The fact is that the Minister is now offering pie-in-the-sky predictions of the UK overtaking Germany in terms of solar capacity by 2020. He needs to get real. Just how can he cut support for solar power by 70% in six months and still expect to overtake Germany by the end of the decade?
When we last discussed the issue, on an urgent question, the hon. Gentleman suggested that we were aiming for something like 22 GW of solar power by 2020, but then again we cannot always take what he says—
No, I will not—[Hon. Members: “Ah!”] When I am in the middle of answering one intervention, I think that I should be allowed to complete it before I take another one. I know that the hon. Gentleman gets very excited on these occasions, and that it makes his hair even curlier than it is already, but the truth, I understand, is that today he has already had to revise down some of his statements about the cost of solar. So, again, we will go back and look at the issue, but I am happy to write to him with chapter and verse on some of the things that he has said over the past six months which have been changed on many occasions.
The right hon. Lady is absolutely right: I did say that our ambition is now 22 GW of solar energy by 2020. But if she was on top of her brief she would know that there is already 28 GW of installed solar in Germany, so would she like to apologise and retract her statement?
If the hon. Gentleman’s ambition is not to be as good as Germany, that is one thing, but one thing is for sure: his efforts over the past six months have certainly not put us in a position to get anywhere near Germany’s aspirations. I should be very interested to see the detailed plan of how he expects us to reach 22 GW, given what he has done to the solar industry in just a short space of time.
No, I am going to make a little more progress, if I may.
The future is not just in new sources of energy, but in adapting and transforming existing energy generation. We all know that with carbon capture and storage we are on the verge of developing a hugely valuable and exportable technology, but we know also that that opportunity will not last for ever, and the Minister of State, Department of Energy and Climate Change, Charles Hendry knows that other countries are seeking to develop that technology and that demonstration projects in Canada and Australia are already under way.
I know that the Government have announced a new competition in this sector, but I hope that they take the opportunity to bear down on the projects that we know and understand, because, with a new competition and 20 other projects sitting on a shelf somewhere, we must decide quickly which proposals known to us have the best prospects of success. There is a lot riding on the scheme, as the Minister knows, in this country and in terms of European support, so we all want to begin to develop the technology without further delay.
We know also that new nuclear power stations will need to be built over the next decade. Nuclear is important to us, and Labour understands that. It provides one seventh of the world’s electricity and one third of the European Union’s, and if we do not invest we will only import more French nuclear electricity. With 63 new nuclear power stations under construction worldwide, we have to make sure that we learn in real time the lessons of those overseas projects in order to ensure that the next generation of nuclear power in this country is delivered as efficiently as possible and maximises job opportunities for people in the UK.
Personally, I have found it quite helpful to talk to the people involved in those projects in order to understand what we can learn, and to take some of the risk out of delivering our own capacity more efficiently.
The right hon. Lady has spoken much about the previous Government’s record. They had six energy White Papers, of which only the last mentioned nuclear power in any substantive capacity at all, yet she has the front to come to the House and tell Government Members that we should think about nuclear power, when under this Government permission will be granted for new nuclear power stations.
I was trying to be helpful in terms of where we are. When we left government, we recognised that we did need to build more nuclear power stations. I am not sure whether all the Conservative party’s coalition partners necessarily accept that. I think that they have an opt-out from any vote on the issue on the Floor of the House.
That is correct, I hear from the right hon. Gentleman.
Labour is clear that nuclear has to be part of energy provision. I am merely saying, in a constructive way, that we know from projects overseas that often such projects—63 are under way worldwide—are not delivered on time and come in over budget. We must ensure that not only our civil servants but our industrial partners are seeing what lessons can be learned to avoid our repeating some of the risks that have delayed projects elsewhere. I think that it is helpful to offer that to the debate and to assure the Government of our support for developing energy in this field as part of the diverse mix that we need.
I will make a little more progress.
In government, we recognised that at a time when public money is in short supply, a green investment bank could leverage in private investment. That is extremely important to our ambitions for the next level of energy generation that we want our country to achieve. In his autumn statement, the Chancellor boasted that he had funded the first ever green investment bank. Now, however, the Government are set to borrow a staggering £158 billion more than they planned a year ago, and the green investment bank will not have full borrowing powers until 2016 at the earliest. The Government’s claim that the green investment bank is part of a strategy for growth looks somewhat thin—like the rest of the strategy—if it is able to deliver any real investment only at the tail end of this decade.
The green deal is yet another example of a policy that we set in train in government but now appears to be headed for a car crash. Originally, the Government claimed that the scheme would create up to 100,000 insulation jobs by 2015, reaching 14 million homes by 2020 and 26 million homes by 2030. Now, sadly, the jobs forecast has been downgraded by nearly half. Transform UK believes that the green deal will reach only a fifth of the number of households that the Government expect, while the number of those in fuel poverty could reach 9 million by 2016. We still have no detail on the interest rates that will be charged, which is significant for whether anybody will be willing to take up the green deal.
As well has having a coherent strategy to improve the energy efficiency of our existing housing stock, we need new homes to be built to the highest standards. The Government could have ensured that a new gold standard was created with the code for sustainable homes, which I launched as Housing Minister, but they have fudged and watered down the commitment on zero-carbon homes. We should add to that reports that the Government, in the form of the Secretary of State for Education, are planning to undermine the green building code for schools. That worries me because, yet again, the Government’s role in stimulating new building methods and making new markets appears to be overcome by short-termism and lack of vision.
We need an active industrial strategy to bring about the energy industrial revolution. First, to unlock the £200 billion of private investment, we need clear signals and clear intent from the Government, unsullied by the voice of the Chancellor of the Exchequer playing to the gallery at the Tory party conference. Secondly, we need better procurement to ensure that public money is spent in a way that supports the low-carbon economy. Housing benefit is one example of that. In our manifesto, we said that we would consider regulating parts of the private rented sector because of the way it acted, which we felt was inappropriate to its tenants and not a shining example of the best that we could expect in that part of the housing market. Unfortunately, however, the Government have set their face against any regulation of the private rented sector, even though housing benefit is paid towards 40% of private rented tenancies and homes in the private rented sector are the least energy-efficient. I have suggested that we use housing benefit to drive up energy efficiency standards in the private rented sector. That would also create a supply chain for installers delivering the products and small businesses manufacturing them, and it could save tenants as much as £488 a year on their energy bills.
The third part of an active industrial strategy is skills. New industries cannot survive with an ageing work force. I am sure that Ministers are as aware as I am of some of the problems in different parts of the energy sector, including nuclear, in this regard. We hope that the modernisation of our energy infrastructure will happen in the next decade. The people who will do that are already in our education system, and we have to make sure that they are prepared for the future in terms of our energy security.
My right hon. Friend makes an important point about the skills that will be necessary for the future. In Hull, where we are hoping to become a renewables hub, we are well aware of the need to take such skills into account in education. Does she think that Ministers in the Department for Education have fully understood the need for their involvement in promoting the skills that we will require?
The extent to which Departments are joined up in the endeavour of realising the potential for new energy industries and jobs worries me tremendously.
There are opportunities not only in providing cleaner energy, but in manufacturing the infrastructure to make it happen. I have mentioned the contradictions between the Treasury and the Department of Energy and Climate Change. I am not convinced that the Department for Business, Innovation and Skills is on board with everything that DECC wants to do. It is also worrying to hear that the Secretary of State for Education is downgrading the efficiency standards for new school buildings. This is one way in which we can use the muscle of Government procurement to make a difference without spending any more money. There are hundreds of ways in which that can be done.
We need a skills strategy. It is not only the school buildings that are important, but what is taught in our schools and how that links with industry. We must reach young people. However, we must not forget the work force in the existing fossil fuel industries. How can their skills be refreshed and transferred to the new industries as they come online? There must be hope for our young people, but there must also be hope for those in work that even if there are changes in their jobs, new jobs will be available for them and their families.
Fourthly, the Government must help to rebalance our economy. This, too, relates to the point made by my hon. Friend Diana Johnson. Britain’s industrial heartlands—places like the Humber, the north-east and Cumbria—have the business-cluster potential, the skills, the production, the ports and the energy to forge these new industries. We do not want to be a country that just installs products from overseas; we want to manufacture them. In the 1980s, small wind power developers drifted away from the UK due to a lack of support. Britain’s loss was Denmark’s gain and we have been playing catch-up ever since. Of the £1.2 billion cost of constructing the Walney wind farm, 40% went on turbines and parts that were not made in Britain. We have to do more to develop our supply chain and to support manufacturing in this country, rather than in Germany, Denmark and, increasingly, China.
Marine energy is still a nascent technology, but the potential is there. It would be unforgivable if we lost out on the economic benefits in the way that we did with wind energy in the ’80s. DECC and BIS must work together to be market makers and to build confidence in the British supply chain so that overseas energy companies know that there are British manufacturers who can do the job. At the very least, I would like to know, as a member of the public, what proportion of the steel used to produce turbines and other energy infrastructure is made in the UK.
Finally, the Government must empower the public in energy efficiency, and ensure that the public and communities become energy producers as well as consumers. The green deal must be delivered on fair terms to those people. In the Budget, the Government could cut VAT on home improvements, including those that increase energy efficiency, to 5% to give our economy the boost that it needs and to give power to people and communities.
The UK is not short of the capital skills or technology that are needed to make the transition to a low-carbon economy.
My right hon. Friend, in her excellent speech, has described the Government’s catalogue of disasters in the area of green jobs and growth. Is it any wonder that Friends of the Earth said in its report that it found little or no progress in three quarters of the 77 green policies of this Government that it examined? That is the reality of what this country is facing.
That is the reality. That saddens me because the foundations had been laid for a journey on which I believed there was cross-party consensus, which Labour worked hard to achieve in this House. It worries me that we have a Government who are short of a coherent political vision. As a result, we are in danger of missing a golden opportunity, not just to reboot our economy, but to build a more resilient and responsible economy for the future, built on not just sustained but sustainable growth.
If we fail to grasp this opportunity, it will be the public who pay the price through jobs and growth going overseas and through higher energy bills, as we become ever more reliant on volatile fossil fuel prices. UK plc needs an active industrial strategy focused on growth, skilled job creation and a revival of Britain’s manufacturing sector, which can be both clean and green.
I will not give way to the right hon. Gentleman, because he was not here for the start of the debate.
Today, we can send out a clear message that a new industrial revolution is upon us and that Britain is determined to lead it. I commend the motion to the House.
I am grateful to Caroline Flint for securing the debate, as it gives me the opportunity to come to the House for the first time as Secretary of State for Energy and Climate Change. I thank her for her welcome at the start of her remarks. I look forward to our debates, and I hope that despite some of the remarks at the end of her speech, we can have a constructive dialogue that shows the country and the world that there is significant consensus in the UK about the urgent need to tackle climate change. In that way, we can both attract the investment that is needed and continue to lead the international debate that it is crucial to keep winning.
I wish to take my first parliamentary opportunity to reaffirm the coalition’s commitment to being the greenest Government ever. My predecessor had a fantastic record of delivering policies that will protect the environment and consumers while making our energy infrastructure competitive.
Much of what the right hon. Lady said about our record was simply unrecognisable and unrelated to the facts. I was also disappointed to see no mention of consumers or bill payers in the Opposition’s motion. Under the previous Government, the link between energy and climate change and end users was often overlooked, and the link between the economy and our efforts to tackle climate change was not nearly strong enough. The coalition, on the other hand, has been successful in recognising that within our economic priority to foster growth, create jobs and make Britain competitive, we must pay heed to our obligation to tackle climate change while at the same time empowering and supporting consumers.
I want to make it absolutely clear that the energy bills of consumers and businesses will be a priority in my thinking. At the Department for Business, Innovation and Skills, I was the Minister responsible for consumer affairs, and I am worried about the impact of high bills on consumers. In a consumer empowerment strategy that I published last April, I talked about empowering consumers through collective purchase and collective switching. One would have thought that the Labour party would have been concerned about those matters in its 13 years in government, but it was not. I say to the right hon. Lady that in our work, including since I have taken office, we are pushing collective purchasing and collective switching, which will empower consumers, make energy markets more competitive and get a better deal for consumers.
Is it not the case that the Opposition have held two debates about energy prices? One was during the energy summit, and unfortunately the Secretary of State’s predecessor did not take the opportunity to talk about collective switching. The Labour party supports collective switching, but also reforming the energy market to make the energy generators put their energy into a pool and open it up to being sold in a transparent way. Will he support us on that?
I am very grateful when the Labour party raises the matter of energy bills, because my constituents are concerned about their bills. The problem is that the Labour party did not do anything about the matter when it was in government. We are pushing collective switching, which Labour had 13 years to do. Some countries in continental Europe have been experimenting with the idea, but I am afraid her party did nothing.
I congratulate my right hon. Friend on his newish appointment. My constituents are concerned about the many renewable and carbon commitments that the previous Government put on the backs of the poor through energy bills, particularly those such as the renewable heat incentive, carbon capture and storage commitments and feed-in tariffs. How are this Government looking after the least well-off, whom the previous Government were busy plunging into fuel poverty?
I congratulate the Secretary of State on his new position. He refers to the desire to be the greenest Government ever, and we really must hold him to that. Why, then, does he think a leading environmentalist, whom his party courted before the election, said at the end of last year that the coalition was
“on a path to becoming the most environmentally destructive government to hold power in this country since the modern environmental movement was born”?
I certainly do not recognise that description of this Government. It has been commented in one or two places in the press that the one thing to which I have been most committed throughout my political life is environmentalism—my first political activity was in the environmental movement. I can therefore tell the right hon. Lady of my complete commitment to that agenda.
The motion contains some good points. Cross-party support, for example, for the Climate Change Act 2008 makes the UK an attractive place to do clean-energy business—the right hon. Member for Don Valley was gracious enough to admit that the coalition parties supported the Act, which is important. A consensus on many such issues, whether energy infrastructure investment or climate change, is extremely important, because they are about investors investing over decades. If we are to hit our 2050 target, we need to give those investors and the wider economy a lot of confidence.
I welcome the Secretary of State to his post, in which he has the opportunity to set a new course for the Government. May I suggest constructively that, first, he needs to give certainty to green investors, big and small? The Government have shaken that certainty—he should not listen to his officials. Secondly, he needs to avoid carbon leakage from existing energy-intensive users, whose confidence his predecessor managed to shake. If he can deal with those two things, which have gone deeply downhill in the past two years, he will do this country, green jobs and the green economy a service, in both steel and wind.
Order. There seems to be a lot of wind in these long interventions from both sides. Can we have shorter interventions? I should say to Front Benchers, and let Back Benchers know, that it looks like we will have to introduce a limit of six minutes because of the amount of time that has been taken.
Thank you very much, Mr Deputy Speaker.
I know Huw Irranca-Davies takes a real interest in such issues and has a good track record in speaking up for them, but I do not recognise his points. My right hon. Friend Chris Huhne played a fantastic leadership role as Secretary of State for Energy and Climate Change. He set the Government’s ambitions at a far higher level than any previous Government. It is my job to deliver on those, which I intend to do.
I welcome very warmly my right hon. Friend to his new post. Will he confirm that, consistent with his past, present and vision for the future, green campaigning groups and the devolved Administrations will always be welcome to discuss with him their ambition, so that we can be a uniting coalition for a green country, to which he has always aspired?
I certainly can give my right hon. Friend that commitment. I have already met many non-governmental organisations and have spoken to the devolved Administrations. It was my pleasure and privilege to work on this agenda with him over a number years. He showed fantastic leadership when this was not a popular issue. He did more than almost any other hon. Member to put this issue on to the political agenda, and I pay complete tribute to him.
We need to look carefully at our energy-intensive industries, which is probably what is behind my right hon. Friend’s question. However, there is a danger in the debate that some of the economic analysis is too static. As the world moves to its climate change targets, industries across the world must be more energy-efficient. Industries in countries such as ours that can steal a march and become first movers will prosper by becoming more energy-efficient. Some of the market signals that are needed are rightly happening, but I accept that we need packages for energy-intensive industries.
I shall make progress and take interventions later.
Since coming to office, the Government have already seen significant new investment in clean energy. Our policies have stimulated new growth, supported new jobs and delivered new capacity. The UK is becoming more attractive to investors. Billions of pounds are being poured into our low-carbon economy, and more and more clean energy is coming on stream. The average annual growth in our low-carbon and environmental goods and services sector is estimated at more than 5% right through to the end of this Parliament, and low-carbon goods and services account for 8.2% of the UK’s GDP—a higher proportion than in Germany.
Since last April, companies have announced plans for £3.8 billion of investment in the UK renewable energy industry, and £600 million has been invested in onshore wind alone. A recent report by Ernst and Young showed that the UK is now the fifth most attractive place to invest in renewable energy—up from sixth last year—and we remain the most attractive place in the world for investment in offshore wind. The Minister of State, Department of Energy and Climate Change, my hon. Friend Charles Hendry was telling me that 95% of offshore wind installations occurred off our shores last year.
On the Ernst and Young report, is it not the case that the attractiveness of investment in the UK has only returned to the position it was in November 2010? Is not the truth that, since the right hon. Gentleman became a member of the Government, we have gone from third to 13th place worldwide in terms of actual investment in renewables in the UK?
I think that the right hon. Lady is quoting from the Pew report, but those data were provisional. According to the new data recorded by Bloomberg, investment is twice as much. I am afraid that she needs to do her homework before she comes to the House.
Unlike the right hon. Lady, we have made good progress on the green investment bank. The recruitment of the bank’s chair and senior independent director is under way. [Hon. Members: “Where’s the progress?”] The right hon. Lady and Luciana Berger need to calm down. If they do, they will hear that 32 bids were submitted to host the bank, which suggests an awful lot of interest and attraction. Those bids have come from right across the country. It is because of such interest that we have allowed extra time to ensure that we make the right decision on the location of the bank. Right hon. and hon. Members seeking to have the bank in their constituency ought to give credit to the Government for taking their representations seriously.
When I used to attend Business, Innovation and Skills questions, as a Minister in that Department, I noted that there were more questions on the location of the bank than on any other subject. I thought I might not get so many in my new position, but I see that I am already getting them. I refer my hon. Friend to my right hon. Friend the Secretary of State for Business, Innovation and Skills.
Subject to state aid approval, the bank will be operational by the end of the year. But from next month, we will pave the way for the establishment of the bank with a programme of direct coalition investment in green infrastructure: we have made £100 million available to invest in smaller waste infrastructure projects on a fully commercial basis; a further £100 million has been made available for investment in the non-domestic energy efficiency sector; and the coalition is ready to co-invest in offshore wind projects. The bank is on course to begin investing its £3 billion of initial capital by the end of the year.
Has the Secretary of State read the small print from the Chancellor on the future of the green investment fund? He has said that it will not be a bank until the target for debt to be falling as a percentage of GDP has been met —2015 at the earliest but probably now 2017. It is not a bank, and, on that formula, will not be so for a very long time. Will he ask the Chancellor to change that formula so that the green investment fund can become a green investment bank, which he suggests it already is?
My right hon. Friend the Chancellor would not have had to make that statement had Labour left the economy in a decent state. The fact is that we are having to clear up Labour’s deficit. Nevertheless, at the same time, we have established the green investment bank—something that it was unable to do even in the good times. That we are doing it in the difficult times shows our commitment to the environment.
That investment is already yielding real benefits. According to one survey, four out of five wind and marine energy companies are planning to hire more staff by this time next year. Many of those companies are small or medium-sized businesses, while many operate in areas that have otherwise struggled to attract investment. All are helping to rebalance and rebuild our economy, and hasten the low-carbon transition. For example, Evance Wind Turbines in Loughborough has doubled the size of its UK manufacturing facility and has expanded its work force by 25%. Sales have grown by over 200% since last January. Samsung announced plans last month for a new wind turbine plant in Fife—a £100 million investment that is expected to create more than 500 new jobs. Let us also consider Rolls-Royce, whose £400 million nuclear deal with Areva will support hundreds of highly skilled jobs, including in Rotherham. Even closer to the constituency of the right hon. Member for Don Valley, is the Don valley power project at Stainforth. It is one of the most advanced carbon capture and storage projects in Europe, and is looking to break ground in 2013, employing 2,000 people at the peak of construction and creating 200 jobs for normal operation. Those companies and many, many more are building the clean-energy infrastructure that will power Britain’s future, not just in generations to come, and not in some far off world, but in the weeks and months ahead. Some 4 GW of renewable electricity is expected to come online in the coming year—a doubling of capacity since May 2011. That is a real achievement.
A common thread running through some of the Opposition’s rhetoric concerns stability for investors. I would like to address that, because there is a difference between the parties on this issue, and it is plain for all to see. Let us take nuclear power. I am the first to admit that pushing ahead with new nuclear was not an easy decision for my party, but we have taken it, and we will do it. Let us contrast that with how Labour dithered over new nuclear, so that for the best part of a decade not a single new nuclear plant was authorised. It was the coalition that took forward the national policy statement on new nuclear, paving the way for the first new power station since 1995. However, I was grateful for what the right hon. Member for Don Valley said about nuclear power. Her strong support from the Opposition Front Bench for our new nuclear programme is welcome. It is important that we take politics out of such decisions, so I am grateful that we are making some progress.
In a second.
On renewables, Labour missed chance after chance, allowing other countries to steal a march, so that when we came to office, the UK was near the bottom of the European renewable energy table—as some of my hon. Friends have said—despite our strong natural resources. We were ahead of Luxemburg—
My hon. Friend is right. However, we were behind Bulgaria, Romania and the Czech Republic. We were at the bottom of the European league. This coalition Government are going to rocket us up that league. We want to ensure that our incredible offshore wind potential is realised. It was Labour that failed to do its job properly in government. If Labour had not done so, we would already have more manufacturing, more design and more added value here in Britain. Instead, we have seen manufacturers in Europe and Asia seize much of the supply chain value. In contrast, since we came to power, our policies to support manufacturing at ports and set up the offshore wind developers forum are already beginning to yield results. Foreign companies such as Siemens are now looking to invest in UK turbine manufacturing, and British companies such as David Brown are exporting technology to developers such as Samsung.
Investors and businesses want policy stability, but Labour could not deliver in government. Let us take the feed-in tariffs scheme—which Labour voted against in the last Parliament. Given an opportunity to encourage sustainable clean-energy industries here in this country, Labour dropped the ball. It should not have been necessary to review FITs, but they were not properly designed in the first place. The seeds of instability had already been planted by Labour Members. Labour’s scheme had no flexibility to change tariffs in response to the rapidly changing technology costs. As a result, 80% of the costs of FITs in 2015 will go towards paying for just 20% of the generation capacity, which was installed under Labour’s scheme. Under our new, improved scheme, we expect to get three times as much electricity generation for less than one third of the cost. When it comes to solar power, Labour is the party of the few, and the coalition is the Government of the many. There will be many more installations, and many more households will benefit. There will also be much more carbon dioxide taken out of the system.
On that point, the Secretary of State’s predecessor has said that there is a need for a community energy tariff in relation to the FITs. I have spoken in the House about the tremendous damage done to the social housing sector by the Government’s cuts. I note, however, that there is now no reference to a community energy tariff in the consultation. Will the Secretary of State say something today specifically about what he intends to do about that?
Under the scheme that the previous Government devised, there was no such system. The new scheme that we are consulting on contains proposals for a community guarantee for tariffs on which we want to hear people’s views. I hope that the right hon. Lady will engage with that consultation, because I think that that is a very positive proposal.
Following on from what I said about collective switching, I would now like to say a little more about what the coalition is doing to help, protect and empower consumers. We want to help people to heat their homes at a lower cost by improving the energy efficiency of their homes. That is why we are pioneering the green deal. We are creating a brand new market framework, designed to be driven by consumers and businesses, which will secure billions of pounds of private sector investment in Britain’s building stock. We are working with the finance industry to ensure that there is a sufficient supply of low-cost finance from day one.
The right hon. Member for Don Valley criticises a lack of progress, but we are designing an entirely new means of financing the re-fitting of Britain’s housing stock. We are the first country ever to do so, and we want to get it absolutely right. We have held in-depth discussions with a wide range of banks and other financial institutions, and established a round-table forum of key investment banks and investors. My right hon. Friend the Business Secretary has stated that the green deal is a priority for the Green investment bank. We are also in discussions with the European Investment Bank to see how it can support the green deal. I believe that we have an ambitious agenda that will help consumers up and down the country as it is rolled out.
Why is it, then, that representatives of local businesses came to my constituency office last Friday to tell me that there was gross uncertainty over the future of the green deal? They told me that they could not make plans because an interest rate had not been set, and that they were worried about losing businesses and the impact on jobs. In fact, one firm, which employs 55 people, did not expect to still be in business on
I would have thought that the right hon. Gentleman would know that the scheme is not going to be launched until the fourth quarter of this year, and that we will be making announcements in the run-up to the launch. I hope that he explained to his businesses that they will need to look for the Government’s announcements, and that they should feel positive about a scheme that is going to happen under this Government and that did not happen under the previous one.
The problem with some of the Opposition’s criticism is that they do not seem to realise that this will be a market-based system, and that the Government will not set the interest rate. The right hon. Gentleman needs to understand that green finance companies such as those I have just been talking about will set the interest rate.
The Secretary of State has said that the Government will not intervene in that way. Is he aware of the German example, in which the German Government have taken the lead and subsidised the interest rate down to 2.65% for a similar green deal scheme? The uptake for that scheme is 100,000 homes a year. This Government’s ambition is for our scheme to be massively larger than the German one, and we want to see that ambition realised, but how does the Secretary of State expect to achieve that when the interest rate has not yet been set? There are indications that it will be set at 6% or above, but polling shows that that would result in only 7% of the British public being interested in the scheme.
I am afraid that the hon. Lady is slightly confused. The German scheme is a personal loan scheme. Our green deal scheme is attached to utility bills; it could not be more different. The structures that she is talking about would therefore not work in the scheme that we are introducing.
The Labour Government were, frankly, equivocal about the capacity and suitability of our energy infrastructure. The coalition is therefore having to work doubly hard to compensate for the missed years. Our reform, set out in our White Paper last year, will secure our energy supplies, guarantee returns for investors and safeguard consumers from volatile internationally-set fuel prices. Critically, it will deliver energy infrastructure that will ensure Britain can evolve into a competitive low-carbon economy. We are introducing a mechanism to ensure that there is sufficient capacity, too.
I have been listening carefully to the Secretary of State’s remarks. He tends to use the terms “low carbon” and “renewables” interchangeably; they are, of course, not the same thing. The Climate Change Act 2008 asked us to reduce carbon, not necessarily to build renewables. In any event, will he confirm that all low-carbon sources of energy, including carbon capture and storage and nuclear, will be eligible for Green investment bank funding?
I am delighted to confirm that. I am sorry if my hon. Friend thinks I am interpreting low carbon as renewables, which is not our position. When we look at electricity market reform and talk about low-carbon technology, we are indeed talking about new nuclear and carbon capture and storage as well. I hope I have reassured my hon. Friend on that point.
May I welcome the Secretary of State to his new post? I am glad that carbon capture and storage has been mentioned, as I have a constituency interest in gas carbon, capture and storage at Peterhead, which provides a classic example of an opportunity missed in recent years. Will the Secretary of State take the opportunity today to set out a clear timetable for that technology? Personally, I believe that gas is a really flexible technology that will help balance the intermittency, so when can we expect an announcement?
As the hon. Lady will know, we intend to announce our competition for CCS soon. I cannot give her the date today, but we are clear that we will make it soon and in time to dovetail as best as possible with the European money that will also be available for some of these pilots.
I have to explain to the hon. Gentleman that there will be a competition. People will put in projects of all different types; then the competition will be judged. It would be completely wrong for me to say that we will favour one technology or another. There is going to be a competition, and it will be carried out with proper process.
A skilled and flexible work force is not only critical in delivering a cost-effective, low-carbon transition; it is also a key part of this Government’s offer to young people. The Department for Business, Innovation and Skills has set out a vision for radical reform of the further education and skills system to deliver skills for sustainable growth. Apprenticeships are at the heart of this strategy—arming employers and individuals with the support, funding and information they need to make the right choices. The skills strategy for England covers the whole of the economy, including green skills and sustainable development. It is a demand-led model to help deliver the skills training that businesses and individuals need.
The Government have put in place institutions to support this approach, such as the growth investment fund and national skills academies, and we have set up specific initiatives to ensure that we have in place the skills to meet our green objectives. These include a national skills academy for environmental technologies to develop standards, deliver training and upskilling for tradesmen and women and technicians to install and maintain low-carbon systems; funding for a renewables training network, led by RenewableUK, to tackle the shortage of skilled workers in green energy industries; a talent bank for the gas, power, waste management and water industries led by the energy and utility skills sector council; the creation of up to 1,000 green deal apprenticeships, subject to business take-up; a new “skills for a green economy” group of sector skills councils and others to help businesses understand and address green skills needs; and work to raise awareness of the green economy through the TUC-led unionlearn initiative. Taken together, they show how we are creating a strong and flexible platform to meet the skills needs for the green economy transition.
The coalition remains absolutely committed to the low-carbon transition. We will secure clean energy supplies at the lowest cost to consumers, making our homes and businesses more efficient and our electricity greener. Since taking office, we have put in place new policies to secure growth in clean energy investment, jobs and capacity. These policies are already bringing real benefits up and down the country. I have to say that I do not recognise the characterisation of this Government’s record that we heard from the right hon. Member for Don Valley. I do, however, agree with the Opposition’s contention that the low-carbon transition has the potential to be a major source of jobs and growth for the United Kingdom. I encourage Opposition Members to stop talking down our industries and our opportunities and instead to focus their energies on making the case for the low-carbon transition, in this place and in their constituencies. I believe that the sector has a hugely positive future, and that it is central to our growth strategy.
I welcome the Secretary of State to his new position.
As has already been said, nearly 1 million people are currently employed in the low-carbon economy, and there is the potential for 400,000 jobs in the industry to be created by 2020. That represents a great opportunity for growth in jobs and gross national product in the north-east.
Last week I received a full and comprehensive briefing from NEPIC, the North East Process Industry Cluster, which has offices in Teesside. It represents 500 companies as diverse as petrochemical, biotechnological and pharmaceutical. They employ 35,000 people, with a further 200,000 in the supply chain, and generate over 30% of the region’s GDP. NEPIC wants the industries that it represents to focus on a wider bio-resources sector incorporating fuels, heat, electricity and chemicals.
For example, MGT Power wants to construct a 300 MW power plant that will generate electricity from imported wood. Progressive Energy wants to gasify coal using carbon capture to store C02 and produce syngas as a building block for green foodstocks or energy. That project has been submitted to the European Investment Bank by DECC for consideration for funding under the EU’s new entrants reserve scheme. TAG Engineering Services is to build monopiles for the offshore wind farm industry. Those and other initiatives will help to grow the low-carbon economy, and will aid employment and economic growth in the Tees valley.
Geographically, Sedgefield is covered by what is known as the Tees Valley plain, and has become a target for a great deal of wind farm development in recent years. County Durham has an excellent record on renewable energy: 22% of its energy needs come from renewable sources. The only English county that can beat that is Northumbria, which is also in the north-east. In my constituency, Dalkia has built a 17 MW biomass facility at Chilton. The development has my support, and that of the town and county councils. It employs about 40 people, and the money provided through a section 106 agreement will help to fulfil the local population’s ambition to establish an energy service company.
Chilton town council has applied to the Government’s social action fund for additional funding to engage in energy efficiency tasks. I understand that the Government have said that the funding needs to be in place by
Those are all laudable initiatives. Some may take time to achieve, but I am sure that they will be achieved, and they are proof that the people of Chilton are prepared to embrace the need for renewable energy. However, I believe that what they face now is unfair, and is making Chilton—and, indeed, the main areas of population in my constituency, Newton Aycliffe and Sedgefield—a renewable-energy hot spot. The Dalkia biomass facility is north of Chilton. Just south of it, E.ON proposes to construct potentially the largest wind farm in England, consisting of 45 wind turbines, or no less than 29. E.ON has designated an area of 7.5 square miles of my constituency for the wind farm site, known as the Isles. That is 5% of the area of the constituency and is the size of Newton Aycliffe, home to 28,000 people.
Given that there are wind farms at Butterwick, the Walkway, Lamb’s Hill and Moorhouse Farm, all within a few kilometres of the Isles, it is no surprise that local people are saying that enough is enough. Chilton is caught between a biomass facility and a potentially huge wind farm—so huge, in fact, that it will be the Secretary of State who makes the final decision.
I hope that when the Minister visits Chilton on Wednesday, he will be able to meet some of those who are campaigning against the wind farm. I oppose the proposal, and I do so from a position of strength, because my county is set on reaching the 2020 renewables targets, a record about which most of those from the south of the country who oppose wind farm development cannot boast. I hear a lot of warm words from the Government about giving people a say on wind farm development, but the planning Minister, Robert Neill, said in this House on
“It would…be inappropriate to direct the Planning Inspectorate to refuse a planning appeal solely because of community opposition because there may still be strong national or local policy support for a proposal.”—[Hansard, 17 November 2010; Vol. 518, c. 807W.]
There is an element of truth in that, but when a planning authority states that the local landscape is full to capacity and cannot take any more wind farms, I believe it should be listened to—especially, in this case, as other parts of England do not have a record that compares with that of County Durham.
I am not dead-set against all wind farms. Offshore wind farms will, if we get the economics right, be a great asset to the country and create thousands of jobs in the north-east. That is why I am opposed to any great cut in wind farm subsidy: that may knock the industry off a cliff and cause a loss of jobs and investment in the Tees valley. However, subsidies do need to be kept under constant review.
If we are to win the fight against climate change, we will need to win hearts and minds. We need to take people with us, but when people feel engulfed by developments, do not feel as though they are being listened to, can point out of their window at a biomass facility—as the residents of Chilton can—or can point at a wind farm development, as in Sedgefield, Trimdon or Morden and Bradbury, I think they have the right to be listened to in detail when other developments are proposed.
I am pleased our motion calls for the engagement of local communities in the transition to a low carbon economy. I mentioned at the beginning of my speech the potential in respect of offshore wind and investment. That must continue in the Tees valley, as the implications for jobs are huge.
I want to pay tribute to the Department of Energy and Climate Change, and in particular to the Minister of State, my hon. Friend Charles Hendry, for the work that is being done on carbon capture and storage. There have been a number of very important positive announcements in recent weeks: the decision to include gas as well as coal; the establishment of the Office of CCS within the Department, which is giving focus to this area; and the holding of a number of industrial days, which culminated a couple of weeks ago in 200 or 300 CCS industry representatives debating in London with the Department. The head of the CCS Storage Association described the relationship between the industry and the Government as “tremendous”.
There was criticism about the decision to pull back from Longannet last year. It was said that that would slow things down, but it has proved to be a positive move, and there seems to have been a strategic rethink of what we are trying to do, how we are going to achieve it, how we are going to include European money, and how we are going to support clusters. On the eve of DECC announcing the new terms of its CCS competition, we have an industry that is enthused, a Government who are focused, and, most importantly, a positive dialogue and a sense of mutual support, which is vital for the success of such a tricky and unproven technology.
This change of philosophy is important for Yorkshire and the Humber, as it is the best placed region in the UK to deliver on CCS, with its heavy-industry heritage and its proximity to North sea storage. Much work has already been done to position the region to make the most of CCS. There are four or five main projects, including Don valley, Killingholme, Ferrybridge and Tata Steel, and nowhere else in the country has so many potential projects.
On pipelines, the National Grid has already undertaken initial consultation work, with very positive feedback from the public, and CO2Sense—we are grateful for the fact that the Department for Business, Innovation and Skills has supported it, and continues to do so post-Yorkshire Forward—has been bringing together people and expertise in the region. Yorkshire and the Humber has so many pieces of the required CCS jigsaw: the right industrial heritage, a good geography and location, projects that are ready, and a team of people who are collaborating and have a vision.
A commitment to the Yorkshire and the Humber cluster through the upcoming process would give a massive boost to the economy, with some 55,000 construction jobs in the construction phase alone, inward investment opportunities, export opportunities with countries such as China, and opportunities at home, too, created by additional revenues and extra skills as universities in the region, including York and Leeds, develop expertise and technologies to meet the business demand. There will be huge economic benefits, and there will be a great rebalancing of our economy, if we can get the commitment from the Department and from the European Union.
I wish to finish by encouraging Ministers to do the following: accelerate further the timelines for the competition; focus even more on the cluster benefits; encourage Europe to push forward on its side of the financial bargain; and avoid the Opposition’s legacy of picking a project here and there across the country, and instead focus on a region, Yorkshire and the Humber, to develop the critical mass and ensure that Britain is a world leader in CCS.
In the past, the industries in my county and constituency were farming, coal—based on the Point of Ayr pit, which the Conservatives closed, at the cost of 1,000 jobs—and seaside towns, which have had 40 years of steady decline. The jobs in my area are now increasingly in the renewable energy sector. One of the great stimulators of that process was introduced by Labour in the late 1990s, when my right hon. Friend Mr Hain, the then Secretary of State for Wales, allowed my county of Denbighshire and the neighbouring county of Conwy to come in on the objective 1 bid. As a result, £124 million was invested in Denbighshire over a seven-year period. The pièce de résistance—the best project we had—was a £17 million research and incubation centre, the OpTIC centre in St Asaph.
That centre will create 100 new opto-electronic companies over the next 10 years. It is based in the north Wales area—the third biggest for opto-electronics in the world. We build to our success in Wales, and we have had excellent success in renewable energy. Dyesol, a small two-man company, relocated from Australia to the OpTIC centre in St Asaph, and it is now working on organic photovoltaic paint that can produce electricity. It is working with Corus, down the road in Shotton, so that when that company produces its sheet steel, with the paint by Dyesol, electricity will be automatically created. The OpTIC centre is also working on fusion powers. There are two ways to fuse atoms and create power, one of which is by magnets and the other is by lasers. That work is being conducted in my constituency and I am very proud of the centre.
The OpTIC centre also contains the Centre for Solar Energy Research, which represents the future for jobs and growth, which lies in investment in research and development. Three weeks ago, I addressed the solar photovoltaic supply chain conference at the OpTIC centre, where I encountered very disappointed people—my right hon. Friend Mr Hanson met a similar delegation last week. I spoke to dozens of people who were disappointed about what has happened on the feed-in tariff.
The OpTIC centre was founded by a great man, Dave Rimmer, who had a vision for the area, and he got the funds together to get the centre up and running. Glyndwr university has taken it over and runs it in conjunction with Cambridge university, Cranfield university and University college London. For the future of renewables and low-carbon technology in our country, we need to look to top-flight universities to co-operate with practitioners in the provinces; we need to put the theory and the practice together.
In the OpTIC centre in St Asaph, we have a Welsh solution to a British problem. The centre has been acknowledged: Rhodri Morgan, the then First Minister of Wales, visited it on the same day as the then Labour Secretary of State for Energy and Climate Change—now Labour’s leader—addressed a conference there; and the current Prime Minister has also visited. So we have a prestigious centre in St Asaph, and the British Government should look to it as a means of spreading best practice around the whole UK.
My area does not just contain the OpTIC centre, because it also has the Sharp factory in Wrexham, the biggest solar panel factory in western Europe. It undertook its future budgeting on the basis of the plans the Labour Government gave it for feed-in tariffs. The company recruited its people and set its plans in motion, only to have the rug pulled from beneath it. It was one of the companies in north Wales that were upset by the proposed changes to the feed-in tariff. These companies need certainty, not uncertainty.
Let me now discuss wind power. As I have said before, I turned on 30 turbines off the coast of north Wales. I do not think that it is any relation, Mr Deputy Speaker, but these turbines were at North Hoyle. The then Secretary of State for Wales, my right hon. Friend the Member for Neath, switched on a further 30 turbines some two years ago, and in two years’ time, those at Gwynt y Mor will be up and running. When all those turbines are running, we will have the biggest concentration of wind turbines in the world. North Wales is playing its full part in renewable energy, creating jobs and growth.
I should also mention the Wylfa power station, which is to be redeveloped—an £8 billion investment, creating 2,000 to 3,000 jobs in the local economy. These big investments have been made because of the stability promoted by the former Labour Government, but we now have instability because of the coalition. In the future, my area will see the development of anaerobic digestion, tidal impoundment power off the coast and underwater wind turbines.
My hon. Friend might know of the two pioneering marine renewable companies in my constituency. Does he agree that their situation shows how the lack of continuity and support is affecting our credibility? Indeed, it is losing us export markets because of the influence on the ability to invest in the future?
Absolutely. The disappointment is shared by international developers, such as Sharp, as well as medium-sized and small enterprises in low-carbon creation.
I mentioned the underwater marine current turbines that will be located off the coast of Anglesey, where we are also looking at biomass. My hon. Friend Albert Owen has coined the phrase “energy island” and that is what it is. However, it is not just the island, but the whole of north Wales that is playing its full part. As I say, we are looking to the Government to create that certainty for the big international operators, the national operators and the regional operators, so that they can put their investments in place to create jobs and growth for the future.
I am very happy to follow Chris Ruane, and I pay tribute to the opportunities and success in north Wales. I visited the area when I shadowed the energy and climate change brief in the previous Parliament, and I must say that the whole of the north Wales coast and the area off the north Wales shore is a fantastic site. It gives us not only the success we have had already, but huge potential.
I am pleased to welcome my right hon. Friend the Secretary of State for Energy and Climate Change to his post, to join his colleagues in the Department’s team—
Clearly, he has gone out for his tea just at the moment. I will tell him off later, but even the ever-energetic Energy Secretary has to have a cup of tea some time.
I am glad that we are having this debate, and I pay tribute to Caroline Flint for choosing this important issue. She knows my commitment to it and I am grateful for the acknowledgement of the work I have tried to do in this area for many years. The Labour Administration had many successes, the Climate Change Act 2008 being the biggest, and the Leader of the Opposition, as he is now, tried hugely hard at the Copenhagen summit, which I, too, attended, to rescue it, as far as was possible, from the disaster that was otherwise afflicting it. Happily, he made sure that there was good progress that could be built on in the years to come.
I have to say to the right hon. Lady that in some areas Labour clearly did not deliver. I do not wish to spend most of my time discussing the past, because we all have a duty to work together to ensure the that we have the best possible present, but the renewables figures I cited were not speculation; they were the figures that are in the record. The energy figures for the EU show that we were the worst at achieving the renewable energy targets we had set. The table is commonly available and the share of renewable consumption as a proportion of our target showed us in the worst possible light. That was not acceptable and this Government will, I know, do better. It was a defeat of the Labour Government in the House of Lords that got the feed-in tariff system going and that was resisted by the right hon. Gentleman who is now the Leader of the Opposition. The European common energy market was never delivered in 13 years of Labour government. On all those things, the record was not all that the right hon. Lady might wish to make us believe it was.
There was one area in which Labour had a clear position with which I disagreed and with which I still disagree. I am not committed—the Liberal Democrats are not committed—to nuclear power. We do not think that it is the solution—[ Interruption. ] There had to be negotiation for the coalition agreement but we have made it clear that it is neither necessary for the future of British energy policy nor good for investment in jobs. It creates very few jobs compared with community-based and renewable energy schemes, and the criterion negotiated, while we retained our opposition, was that it would go ahead only
“provided there is no public subsidy”.
I and colleagues will remain eternally vigilant that there will be no direct or indirect public subsidy for nuclear. It is unacceptable in any other context and we have spent and wasted far too much on nuclear power in the past.
No. As my hon. Friend Sir Robert Smith knows, we have that capacity and I have argued consistently that it is possible to have clean coal and to ensure that we use the modern technologies through carbon capture and storage to achieve it. If we have a proper energy grid across Europe, we can capitalise on the solar power from the south and the hydroelectric power from elsewhere. It is entirely possible to do that—although that is, of course, a matter of dispute.
The right hon. Gentleman was very clear that there should be no subsidy for nuclear. Does he not feel, as many people do, that the carbon floor price, as it is currently constructed, acts as a subsidy for nuclear?
A very lively debate is going on about that point in the context of the European energy policy, which, as we heard the Prime Minister say earlier, will at last be delivered by 2014. We must ensure that we apply the same rules in that context as we do in all others.
When the coalition Government were formed, we set 23 objectives for energy and climate change policy. I hope that Ministers might either now or by the second anniversary put in the Library a report on how far they have gone towards achieving those objectives. Many have already been achieved and Ministers have set out down the road towards achieving the others. We already have £60 million invested in world-class offshore wind conversion in our ports to produce jobs and many people are being trained as apprentices to work on the green deal. We have a green deal energy efficiency initiative for homes across the country and a decision on the green investment bank, the location of which will be announced soon. Let me repeat what I have said publicly in the past: I do not think it should be in London. It should be elsewhere in the United Kingdom so that the benefits can be spread, and I say that as a London Member of Parliament.
We have a legally binding target for a 50% reduction in UK carbon emissions by the mid-2020s. We have the establishment of the low-carbon technology and innovation centres, a 25% improvement in energy efficiency standards for all new buildings, support for green buses, subsidies for the purchase of electric vehicles, a reduction in carbon emissions from central Government buildings of an almost incredible 14% over 12 months and—I pay tribute in particular to my right hon. Friend Chris Huhne—very successful participation in the climate conferences in Cancun and Durban, which has ensured that we are at last on the right road to international agreement and making up for what we did in the past.
Ministers also took difficult decisions after listening to what the public were saying about fuel costs. Fuel duty was cut last April, the automatic fuel duty escalator was scrapped, the planned rise this January was postponed to August and the next planned increase was cancelled. Petrol and diesel are, on average, 10p per litre cheaper than they would have been had the original plans gone ahead. Such decisions are always controversial in the environmental movement and the real world, and fuel prices obviously keep up with other prices, but the Government have responded to meet people’s concerns about their family budgets. The saving for the average motorist will be £144 and the average haulier will be £4,400 better off. Labour raised fuel duty 12 times while in office and planned for six further fuel duty rises after the election. We have done better than that.
I commend what my right hon. Friend the Secretary of State said on taking office about the Government’s plan on solar power. He wants to ensure that many more people benefit so that it can continue to be rolled out as a successful project. Combined heat and power equally has a very important role to play.
In conclusion, may I give the newly led administration in DECC my shopping list? First, will they ensure that we have the skill base to deliver the green economy, which is so important? That needs apprenticeships and good training. Secondly, will they ensure that we have energy efficiency in our schools and public buildings, including converting waste to energy more efficiently? Thirdly, will they incentivise community energy? Fourthly, will they not allow themselves to be distracted by the nuclear power persuaders? And finally, will they support the biodiesel industry in the future?
I am happy to agree with Simon Hughes when he says that the headquarters of the green investment bank should not be located in London. He will probably guess where I think they should be located.
It is not just people in Edinburgh who have been asking what is happening with the green investment bank after yet another delay last week. The Government’s announcement on the location of the headquarters had been promised by the end of February, but the deadline was put back. I might be damaging our chances by saying this, but it seems to me to be bare-faced cheek on the part of the Secretary of State to say that the fact that 32 cities have put in a bid for the headquarters excuses the delay in the Government’s announcement. If the delay was for just a few weeks, that would, perhaps, be understandable, but let us not forget that it looks like the delay means that the establishment and operation of the green investment bank will be nearly a year later than the date on which we were first told that it would be set up.
Let us not forget that on
The delay is not only affecting the Government’s credibility on this issue but, much more importantly, putting us in real danger of losing jobs, making us miss opportunities for green investment and waste time that other countries will take advantage of at our expense. I have heard reports that some companies have been holding back on investment because they have wanted to wait and see what will happen with the green investment bank, and I hope that that has not been the case, although I fear that it has.
Those comments will no doubt affect Edinburgh’s bid for the green investment bank—although, in reality, I am sure that the Government will not make a decision on that basis, and we have a very good case as Edinburgh has a combination of financial services skills, the technical knowledge, a manufacturing base and academic skills as well as broad-based support across the political agenda—but I must say that the delay is extremely concerning and alarming. Will the Minister tell us when the Government expect the green investment bank to start operating in reality? I do not mean when it will have a brass plaque on the door saying, “Green Investment Bank”. What I want to know is when it will start putting money into an industry that has great potential in all our constituencies. Opportunities have been lost as a result of this delay, and I hope there is no further unnecessary delay. If the Minister wishes to continue the cross-party support there has been for a green investment bank, he needs to assure all of us in the House that there will be no further delay. So far, there have been missed opportunities and a loss to the economy, but I hope that will not continue for much longer.
I want to focus on my region in East Anglia and on jobs. In East Anglia, between Great Yarmouth in my constituency and Lowestoft in the constituency of my hon. Friend Peter Aldous, we have a whole energy hub. That hub is quite an important factor in the context of the direction we are moving in with energy. Back in 2001, the industry employed about 20,000 people in our region across 6,000-odd companies. The growth, with what is on the table now and what has developed since 2001, means around 105,000 jobs in the industry in our region alone, with a turnover for those businesses of about £13 billion a year. What is on offer to the industry at the moment with the contracts that are out there, particularly for renewable energy and with the offshore wind farm option, is potentially another £50 billion-worth of contracts, with particular focus on carbon capture.
The way in which Departments have worked together has been useful for our area and in helping our industry to grow, and it has been welcomed by people in the industry across Great Yarmouth and Lowestoft. The Department for Communities and Local Government, the Department for Business, Innovation and Skills, the Treasury and the Department of Energy and Climate Change have worked together to make sure that we get the best out of our region and provide the best for our country, not least in terms of the important issue of energy security. We have been able to secure an enterprise zone, which means about 2,000 jobs with 80 businesses. I am hopeful that the very first business to open in the enterprise zone when it starts this April will be Seajacks in Great Yarmouth, with a focus on servicing the offshore wind farm industry. In the 25-year life of that enterprise zone, which is focused on energy and particularly on low-carbon energy, we believe there could be a potential 13,500 extra jobs and 200 extra businesses coming into our region alone.
Much of the advantage and development there has been in the industry has come from people in the industry working together, taking the proverbial bull by the horns and putting together the East of England Energy Group, which works well at representing the area across the world. It has shown the huge opportunities on our doorstep to develop extra jobs and apprenticeships and to publicise them across the industry. It is a multinational industry, with multinational companies such as Perenco, Halliburton, AMEC and others basing themselves in our area to take advantage of the opportunities that are now there because of the way in which the Government are delivering. The interest that has been shown by Ministers from across Departments and Secretaries of State who have visited our area and met businesses has shown the industry that they are interested in it, that they want it to grow and that they believe we have an offer in our area. We welcome that.
The Government have said they want Britain’s businesses to benefit from the £200 billion of infrastructure needed by 2020. Will the Minister comment on the fact that some in the industry believe that when they compete overseas they are sometimes at a disadvantage because other countries overly favour businesses from their own country? I would appreciate hearing his comments on that and our Government’s view of what we can do to balance that situation here.
We also need to make sure that we get in the skills and match them to what the industry needs. In areas such as Great Yarmouth and Lowestoft, the Skills for Energy group is coming together under an excellent chairmanship. It brings together companies such as AMEC, EDF, Seajacks, Shell and others to ensure that we are developing, across our colleges and universities, the qualifications and skills needed so desperately by the energy industry, and the engineering industry that comes off it through the supply chain, to fill the jobs that are on offer locally. Given that this debate concerns jobs and growth, that is very important.
The green investment bank has been mentioned many times. That is vital for funding, particularly development funding, in the industry and for giving certainty to the industry about the ability to develop and finance that funding. It is a very welcome introduction because this area is hugely complicated. As I have mentioned the bank, let me make a pitch for Norwich to have it, as it is in such close proximity to the whole energy hub. Nowhere else in the country could match that; Norwich is the perfect home for the bank. If the Minister would like to support those points or to comment on them, his comments would be welcome.
Lastly, let me touch on earlier comments about the low-carbon economy. We have the advantage of potentially being able to service, look after, develop and help construct, through our deep-water port, the new offshore wind farm that is going to be developed, which will be a huge asset both economically and as part of our energy offer. There is also the issue of carbon capture, with the Deborah field project very closely off our shoreline being worth, possibly, around £1 billion. Potentially, 25% of that could go to our supply chain, so there is a huge opportunity for East Anglia to develop. That is another advantage to our economy coming as a result of what the Government are doing, and for that I thank everyone at DECC. Most importantly, I am glad that Departments are working together to make sure that we can offer businesses the best opportunities and an environment in which they can develop the skills and encourage local education suppliers to develop the skills that the industry needs so that we are developing not just jobs and job opportunities but the skills to fill those jobs. That is vital when we are developing jobs and growth in our economy.
I am speaking in the debate because the unemployment rate in Hull is 14.2% for those aged between 16 and 64, whereas the national figure is 8.6%. This area has tremendous potential for jobs and the economic growth that Members across the House want because we know that unless the economy starts to grow, we are not going to be able to reduce the deficit.
I want to talk about Hull and the Humber area because we have been very fortunate in being able to put together a proposal for Siemens to come to east Hull to develop wind turbine manufacturing and use those turbines out in the North sea. However, that has been a battle, and I do not think the Government have done their best to assist Siemens in coming to the city. There seems to be a silo approach in BIS, DECC and other Departments, so there is not the joined-up thinking that is needed to make this part of the economy really grow and deliver for the country.
Let me pay tribute to the work of Matt Jukes, who works for Associated British Ports, to Hull city council and Councillors Steven Bayes and Steve Brady, to Mark Jones and to those in the chamber of commerce in Hull, particularly Dr Ian Kelly. They have worked together to push forward the renewables agenda in the city. We are very fortunate in having the university of Hull, which plays a leading role in the development of the renewables sector. We now have the local enterprise partnership, with Lord Haskins as our chair, and I hope that we are on the final stretch towards making sure that Siemens, and the associated supply chain businesses that would follow it, come to Hull and the Humber area. The Government need to get their act together and make sure that, in future, they speak with one voice on this agenda. Hull has put in an application for the green bank and I hope that it will be considered alongside all the other cities that have applied.
The debacle over feed-in tariffs has resulted in job losses in my constituency. Carillion, which is consulting on 150 jobs going in the city, tells me it is doing that because last October’s announcement on feed-in tariffs meant that it had to restructure its whole business. It looks likely that Carillion will pull out of Hull completely. I am sure that the Minister well knows that, as I said at the start of my speech, unemployment rates are already high in the city. Any job loss is a disaster for the individual and their family as well as for the wider economy in the city. Part of the Government’s problem is that they are rushing into things without properly thinking through the effects their measures will have.
I was very pleased that my right hon. Friend the shadow Secretary of State gave a speech at the Aldersgate Group in February, when she talked about the need for an active industrial strategy for green growth. I am interested in two particular issues in that regard. First, there is the skills agenda and the need to ensure we get skills training and education right for the people who will go into the renewables industry in future. The second issue is about rebalancing the economy. In areas such as Hull and the Humber, it is vital that this growth industry—renewables—is promoted and supported as much as possible by the Government.
I appreciate the opportunity to contribute, albeit briefly, to the debate. It would be remiss of me not to mention the bid from Southampton, which I can assure the Minister is an excellent one, to host the green investment bank.
It is striking from the Back-Bench contributions that rather than an endless drip of negativity, there is a commitment to the innovative and exciting technologies that are growing in many parts of the UK. Last week in Westminster Hall there was a debate on Government incentives for renewable energy. Caroline Flint may not have been aware of it, but the focus was on the generation of energy from waste. Had any members of her party been present, they would have heard the commitment of the Minister of State, Department of Energy and Climate Change, Charles Hendry to the eight technologies in the renewable energy road map.
However, the debate is not just about solar or wind. If we are to have security of energy supply, we need a suite of technologies, which is why I shall focus briefly on the generation of energy from waste by a company in my constituency, SeAB, which has patented a method of anaerobic digestion in shipping containers. That might sound a little strange to many Members, but the method has the capacity, on a small scale, to use the waste product from farms, schools, restaurants and food production to generate the energy needs of the same organisation.
Anaerobic digestion has the potential to play a massive role in both biomass heat production and electricity generation. Every year the UK produces about 100 million tonnes of food waste, manure and sewage sludge that is suitable for such treatment. Although of course we want the amount of waste to be minimised, using waste to generate electricity is a very green way to meet some of our energy needs. The UK has long been at the forefront of designing such technology, and SeAB and other small companies operating in this sector are using Government support in order to make the difficult transition from concept to deployment. SeAB is successfully making that transition, deploying its system with commercial success, for example at Sparsholt college in Hampshire and on the Southampton university science park.
The commitment to anaerobic digestion was present in the coalition agreement, in the renewable energy road map, and in the strategy published jointly by the Department for Environment, Food and Rural Affairs and DECC last June, and I look forward to the publication of the annual progress report this summer. As my hon. Friend the Minister of State said last week, 56 actions have been identified to tackle the key barriers to deployment. I do not pretend that it is easy or that there are not significant challenges. There are, but I welcome the inclusion of anaerobic digestion in the feed-in tariffs scheme.
There are significant employment opportunities to be had. SeAB may be a small company, but let us not forget that small and medium-sized enterprises are the backbone of the British economy. Small can be beautiful, and can certainly provide jobs across the country.
As the former chair of Flood Risk Management Wales charged with leading Wales forward in adapting to climate change, I am pleased to speak in the debate. The Welsh Assembly Government have sustainable development at the core of their constitution. I shall put in a bid for Swansea as the site for the green investment bank, given the access to the natural wind and wave power, the great universities there and the financial cluster in Cardiff to support it.
We are living in a world where the population will grow from just under 7 billion to 9 billion people in the foreseeable future. China and other emerging economies are driving up the price of oil as a result of economic growth. That means that opportunities for green investment increasingly show a higher prospective rate of return. That is why the present Government, like the previous Government, should invest now rather than later to get niche global leadership in fledgling green markets, targeting exports to emerging markets and providing the critical economies of scale at home to make that possible.
I have in mind the Government’s procurement programme. One can imagine a new generation of solar tiles being installed in all schools, for example, or the Government working with Tata Steel, which is based in Port Talbot, near Swansea. Tata is developing new cutting edge steel comprising six layers, which creates its own electricity and can warm buildings. Working through the procurement system could help to bring about a step change in green technology for Britain. We should think carefully about that.
I have been campaigning for the electrification of the railway from Cardiff to Swansea. There is a question mark over the cost-benefit ratio, but as the costs of diesel and the alternative means for the locomotion of trains get more and more expensive, it is self-evident that electrification will be an investment worth making sooner rather than later.
Nuclear is clearly part of the future. I know that the Secretary of State has previously campaigned against nuclear and the Liberal Democrats say there should be no subsidy, but again it is about embracing the future. It was a great dereliction of duty on the part of the Government to withdraw the loan to Sheffield Forgemasters, which would have assumed global leadership in an emerging market in nuclear production. That was a disgrace.
Tata Steel, which I mentioned earlier, has suffered from the unilateral carbon pricing that we have seen from the Government. Only last week it announced an opportunity for workers to go home and receive half-pay, when it should be motoring forward in emerging markets. Airbus in north Wales is at the forefront of carbon wings. Half the aircraft in the world are created by Airbus. We should embrace the future there, as with wave power. We should not just use our export focus to sell green technology and green products in emerging markets, but recognise that the capital opportunities in oil-rich countries and those with trading surpluses could help investment here, rather than UK inward investment remaining at the perimeter of Europe.
There are great opportunities for a green trajectory to an early recovery, rather than the stupid focus on cuts, cuts, cuts and the environment being seen as in competition with economic growth. I visited Olchfa school last week, which wants to put the green economy—the environment alongside the economy—at the forefront of any future agenda.
As in the case of most Opposition motions, there is much in the motion before the House with which I agree. For instance, there have been mixed signals from Government over the level of their commitment to the renewable energy programme, and that uncertainty has hit the confidence of many investors. The uncertainty was reinforced by the letter from 106 of my colleagues to the Prime Minister calling for a reduction in the subsidy offered to onshore wind farms.
I appreciate that those who signed the letter did so with the best of intentions. They believe that renewable energy should not be subsidised because it is uneconomic. However, some in the anti-onshore wind farm lobby demonstrate slightly muddled thinking. I have heard many opponents say, “But of course I support offshore wind farms.” Let us be quite clear. A threat to onshore wind is a potential threat to offshore wind. Although it is unquestionably true that wind energy is currently uneconomic, with the new generation of wind turbines, wind energy will become cheaper and more predictable. It is also worth pointing out that onshore wind is the cheapest form of renewable technology that can deliver at scale.
I was not one of the 106 Members who signed the letter, but if I had not been a PPS, I would have done so. Does my hon. Friend not accept that sacrificing a beautiful part of Britain to be covered by perhaps 600 wind turbines is an abomination, and anybody representing such an area would be totally committed to opposing it?
Yes, I accept what my hon. Friend says, but that does not mean that onshore wind energy is wrong. It means that it must be put in the right place. If we start from the premise that the nation needs to increase the percentage of our energy obtained from renewable sources, increasing onshore wind energy production is financially beneficial to the country because it reduces the need for other, more expensive forms of green power. There are those who question the need for renewable energy at all, and I appreciate their point of view. I disagree fundamentally with them, but I acknowledge their right to hold an opposing view.
As it happens, although I believe that, in an effort to cut lung diseases and global warm, we must reduce the amount of pollution we pump into the atmosphere, my primary reason for supporting renewable energy and reductions in the use of fossil fuels is concern about energy security. We are importing ever more energy into the United Kingdom and, in order to maintain supplies, we are increasingly at the mercy of events over which we have no control. Oil prices continue to fluctuate alarmingly and unrest in the middle east could affect supplies. A couple of years ago we saw Russia cut the flow of gas to Ukraine. It could easily do the same to us or push up the price of gas to even higher levels. It is worth repeating that spiralling household energy bills are driven by higher oil and gas prices and fluctuations in the exchange rate, not support for renewable energy.
Let us not forget that oil and gas are finite resources. The high price of energy is a growing problem, but at least we have energy. As fossil fuels begin to run out, as they inevitably will before the end of this century, energy prices will become so high that people will simply be unable to afford to use their cars or heat their homes. I have been to countries where power cuts are used to manage energy consumption and are a way of life. It is not inconceivable that in 50 years’ time people in this country could routinely flick a switch and find that the lights do not come on. If we are to prevent that from happening, we need to invest in a range of alternative, non-fossil energy sources. That is not an investment we can leave for our children and grandchildren to make; that would be too late. We need to invest now. We need to invest in nuclear power stations and renewable energy sources such as tidal, wind, biomass and anaerobic digestion.
Of course, investing in renewable energy will not only provide us with increasing energy security, but will have the beneficial side effect of creating thousands of extra jobs. Let us take wind energy as an example. Nationally, RenewableUK estimates that 6,000 people are directly employed in the onshore wind sector. That figure could grow to up to 12,000 direct and 19,000 indirect jobs by 2021. In my constituency, Vestas is considering building a factory in Sheerness, which would create 2,000 jobs. Our community took a hard hit recently when our local steelworks went into administration, with the loss of 400 jobs. I genuinely believe that the United Kingdom needs a thriving wind energy industry. More importantly, Sheppey needs that wind turbine factory.
It is a pleasure to follow Gordon Henderson, who spoke much sense in his contribution, particularly on the opportunities provided by the renewables sector, both onshore and offshore wind, for ensuring energy security, which is a key issue for businesses and individuals across this country, and for creating jobs, because the motion is about jobs and growth in a low-carbon economy. This is a great opportunity for a renaissance, a second industrial revolution in green jobs to drive the UK forward into this century and to create jobs and growth.
I particularly value the opportunities associated with renewable energy because close to my constituency, on the south Humber bank, there is a huge opportunity to develop a big area of land for the manufacture and deployment of renewables technology. It is a great opportunity, along with the potential for development on the north bank of the Humber, which my hon. Friend Diana Johnson outlined in relation to Siemens’s interest there. Together with the Able UK development on the south bank, that represents a site of European significance for driving the UK’s renewables industry forward. As has already been said in the debate, we need the opportunity not only of site, but of skills. We must ensure that the proper skills development is in place to take advantage of that opportunity.
I am concerned that UK taxpayers and energy bill payers should not end up resourcing jobs outside the UK. It is absolutely crucial that we ensure that the supply chain is developed to provide jobs within the UK’s renewables sector. Otherwise, we will find a huge missed opportunity. I will be interested to hear what the Minister has to say about how the Exchequer, the Department of Energy and Climate Change and the Department for Business, Innovation and Skills are working together to ensure that appropriate incentives are in place to develop the renewables industry supply chain in the UK so that we get maximum benefit. We also need to ensure that the penalties that are in place for energy intensive-industries are properly addressed. Industries such as the steel industry, which is crucial to not only the old industries of the past, but the new renewables industries, have made huge strides in becoming energy efficient.
My hon. Friend mentioned energy-intensive industries. Is he aware that, due to the carbon taxes that the Government are imposing on energy-intensive industries, Rio Tinto Alcan will close its plant in my constituency sometime this week, which will affect 600 jobs directly and 3,000 in the supply chain?
My hon. Friend makes a good point. We have already heard that 400 jobs are going in Sittingbourne and Sheppey, and now more jobs are going in his constituency. That is of great concern and underlines even more why we need to ensure that what happens in the renewables industry reclaims our industrial future in a way that we are at risk of not doing. The Chancellor came forward in the autumn statement with a package relating to energy-intensive industries, but it is still unclear to those industries what the detail of the package means. It is time that businesses on the ground had some clarity on what the package will mean. Otherwise, we will find more closures by companies such as Rio Tinto Alcan. Time is of the essence. We cannot afford to dilly-dally on such matters.
During the debate many hon. Members have drawn attention to the shambles of the solar feed-in tariff saga. I hope that everyone in the House and outside has learned from the mistakes so that we can ensure that in other significant areas, such as wind and other renewables, we do not make similar errors and create missed opportunities. I have said everything I wished to say, and I thank you, Mr Deputy Speaker, for allowing me to contribute.
My right hon. and hon. Friends on the Government Front Bench will probably be relieved to hear that I do not intend on this occasion to dispute the wisdom of the renewables targets that we have imposed on ourselves or had imposed upon us by the European Union. If we take those targets as given, we must accept the need to tax or ration fossil fuels and to subsidise or set quotas for renewables if we are to meet them. However, I dispute the premise that appears to underlie contributions to the debate from both sides of the House: that the move from low-cost energy to high-cost energy can generate jobs or growth. Such a move might be necessary, but we delude ourselves if we imagine that it will have either of those effects.
Subsidies can boost employment in the area that is subsidised, just as taxes can reduce employment in the area that is taxed, but the suggestion that subsidies can produce a net increase in additional jobs, as Caroline Flint suggested, is a delusion. It is self-evident nonsense and involves abolishing the rules of arithmetic, because we would destroy as many jobs with the taxes we would have to levy to pay for the subsidies as the subsidies given at other points would create. That is essentially the green version of the old broken windows fallacy, according to which we can create jobs by breaking someone’s windows because the householder would have to employ a glazier, who would have to employ glassmakers and the people who produce the other raw materials. That fallacy was destroyed ages ago and should not be reproduced by Members on either Front Bench.
We have absolutely no desire to have what is essentially a sub-prime bank in our area. The idea that we can boost—[ Interruption. ] It will be a sub-prime bank, because the Government have said that it will not accept prime investment opportunities, which will be left to the market. The bank will be able to lend only to those opportunities that are not attractive to industry—despite huge subsidies, quotas, publicity and fashion. In short, it will be able to lend only to the sub-prime opportunities, so let us hope that it is a long time coming. We do not want it in Hitchin.
The idea that we can boost productivity by replacing competitive sources of energy with uncompetitive sources of energy is so ludicrous that it is strange it has passed without comment today. We have a need for electricity generation. If we invest a certain amount of money in wind, which is four times as expensive as gas turbines, we will get for a given investment only one quarter of the electricity that we would if we relied on gas turbines. With onshore generation we will get half the electricity that we would from gas, so the idea that we can boost growth through low-productivity, high-cost industries is nonsense, and we should cease deluding ourselves that we can. It has been suggested that we might be able to generate jobs in the supply industries for those forms of energy, but it is nonsense to suppose that subsidising the use of renewable technologies automatically results in an increase in the domestic production of equipment for them. It manifestly has not; there is no reason to suppose that it should; the Government are not allowed to give subsidies to those equipment suppliers under
EU rules; and in any case the record of Governments trying to pick winners is lamentable and miserable, so it is probably just as well that they cannot.
The thrust of my right hon. Friend’s comments—that we cannot generate jobs with lower-productivity activities—is right, but if we accept that the Climate Change Act 2008 is right also and we have to decarbonise, we reach a position whereby we ought to decarbonise ruthlessly with the cheapest option in front of us, which takes us to nuclear power rather than to some of the others.
As one of the five people who opposed the 2008 Act, I do not necessarily accept my hon. Friend’s premise, but I will for the purposes of debate, and if we are going to meet those targets we should do so as efficiently as possible. Nuclear is one of the best ways, but the cheapest of all is gas turbines, and gas might become cheaper in this country if we exploit the potential for shale gas, which has halved the cost of gas in the United States.
On subsidies, can my right hon. Friend name a single nuclear power plant in the history of the sector that has not existed on the back of vast public subsidies? Has there ever been an unsubsidised nuclear power plant?
I am not sure whether some of the early ones were subsidised, but nuclear power is more attractive economically—the point that my hon. Friend David Mowat made—than some of the very high-cost renewables.
As Harold Macmillan remarked, when both sides of the House are agreed, they are usually wrong. They are wrong on this occasion, they invariably end up scratching each other’s backs and intellectual rigour goes out of the window. It is time that we looked rigorously at what is involved. It may be necessary to do what is under discussion, but we should not kid ourselves that it is going to create an industrial revolution, green growth or green jobs. It is going to cost a lot of money, and we are going to be worse off so that future generations can have a better climate.
One of my great Welsh forebears, Aneurin Bevan, once said that we live on a land made of coal, surrounded by sea, and it would take an economic genius for anyone to go cold or hungry.
What I hear from this debate today is that we have the greatest natural resources in the world, yet we are standing by and watching as we get left behind by the rest of the world. China has half the market in solar power batteries; Brazil is already investing in ethanol production for its cars; and the Danes are using wind power to produce their energy. What are we doing? We are falling from third to 13th( )in green technology investment. That cannot go on.
For too long I have been worried about debates on green energy and technology. I have been one of those who has said, “This is our last best chance,” but the real problem is that we talk in the abstract and in the future, so as we are only a few weeks away from the Budget there are three fundamental things that the Government can do to increase jobs and growth in the low-carbon sector.
The first, quite surprisingly, is to be found in mortgage repossessions, of which Wales has had 5,000 over the past year. It seems an economic fallacy to put those properties back on the market to be sold at below market level, when the banks could bring about equity investment, keep people in their homes and provide for energy-refitting such houses, so that their value increases. We could also look at refitting every public building to stimulate the construction business.
Secondly, with growth on the floor, I genuinely believe in and have come round to the idea of a mini stimulus: not a stimulus on the level that we saw in 2008, when we tried to keep the economy going while it was failing, but something based on what we have learned from that. If we look for example at the car scrappage scheme, we see that in 2009 a targeted stimulus put more new cars—2.4%—on the road, while at the same time emissions dropped for the first time in 13 years. We could look at that again, but instead of talking about just car scrappage, we could talk about hybrid cars as well.
The third and final thing that I would like the Government to do is to talk about not only the Green investment bank, but about picking two cities and making them energy independent. The two that I would pick are Cardiff and Bristol, because they could bring about an investment project, such as the Severn bay barrage, that would produce more energy through tidal and wind power.
Those are great opportunities that we can invest in and look at, and the Government can do so now. They have it in hand. This is our last chance, and as I see that time is ticking down, I suggest that we take it.
I am grateful to you, Mr Deputy Speaker, for calling me to speak in this debate, which gives us an opportunity to review the Government’s work on the green economy over the past two years, and to provide some thoughts on how they should move forward over the remaining three years of this Parliament. My comments will, I hope, complement those of my hon. Friend Brandon Lewis.
In what are difficult times financially, when we do not have as much money to go around as we would like, the Government have come forward with a full range of initiatives that will help to achieve the transition to a green economy. What is now required is, first, to see those policies through to fruition in order to ensure that they achieve their objectives and, secondly, to maintain the coherent, consistent policy framework that is necessary to provide long-term private investors with confidence and security.
East Anglia has an opportunity to play an important role in creating green jobs and helping to rebalance the economy. My colleague—my hon. Friend the Member for Great Yarmouth—and I have set out to make the case to the Government that, if they invest in the green economy in East Anglia, the area can play a pivotal role in promoting sustainable growth and creating new jobs. The Government have stepped up to the plate with the New Anglia local enterprise partnership, which covers Norfolk and Suffolk, being awarded green pathfinder status. I attended its conference last Thursday, when the objective was to work up proposals to include in the manifesto that it will present to the Government in the spring.
To help stimulate the green economy the Government have created an enterprise zone in Great Yarmouth and in my constituency, and they have granted the two ports core status as centres for offshore renewable engineering. Other initiatives that will help to create growth in the low-carbon economy are the green investment bank, the green deal and the roll-out of super-fast broadband.
A lot of work still needs to be done, but I believe that the foundation stone has been laid to create a new and exciting industry. I was going to move on to talk about the five challenges that we need to address, but I shall leave it to my other colleague, to my west and south, my hon. Friend Dr Coffey, to say a few words.
It is fair to say that there will be no economic growth without increased energy consumption, and the challenge to decarbonise our economy comes at a time when we have to spend about £200 billion on rebuilding it. The electricity market reforms have been very positive for the construction of new nuclear power stations. That did not happen under the previous Government, and I am proud that it will be happening under our Government. Sizewell C will be a key employer for many years to come, and it will afford construction opportunities in the near future.
My hon. Friend Caroline Nokes talked about energy from waste.
Having rejoined the debate and expertly managed to avoid the no doubt helpful contribution by Simon Hughes, I congratulate the Secretary of State on his much-anticipated and well-briefed promotion to his new portfolio and on his first engagement in Parliament in that role. When he was confirmed in his position, he made much of his determination to continue with the policies of his predecessor, so we have a new man in charge but the same policy in place. At least he has not continued with one feature of his predecessor’s appearances in this House—the speeches of inordinate length. We should be grateful for small mercies. It is a shame, though, that much of the content turned out to be very similar, with the same mixture of obstinacy, complacency and diversionary abuse.
The change of Secretary of State has given the Government an opportunity to reassess their policy prescription in the light of the evidence of falling investment in the green economy, taking the UK from third to 13th place, and to make good much of the rhetoric of the past two years on the opportunities for growth and investment to help to rebalance the economy and to build vital skills that could create and keep jobs in every part of the country. Those opportunities should not be missed. However, there is genuine concern that a combination of the effects of Government policies elsewhere, the Chancellor’s comments on a range of related issues at party conferences, and the hapless approach of the Minister of State, Gregory Barker, on feed-in tariffs are combining to reduce the attractiveness of those opportunities, not least in renewable energy.
The Secretary of State spent some time in Scotland this weekend, and he will have appreciated that Inverness is a little less crowded and a little windier than Surbiton, and that is not just because he was at the Scottish Liberal Democrats’ conference. I welcome his recognition of the benefits to Scotland and the rest of the country of the single energy market and the mechanisms within it to improve infrastructure and promote new developments that work in the interests of the whole of the UK. As well as appreciating the potential for renewable energy in Scotland he will also, according to press reports, have witnessed some of those who are less convinced at the staged wake at the conference. For the avoidance of doubt, it was an unofficial wake outside rather than something on the agenda inside.
As well as the opportunities, significant costs are associated with the investment needed to update our energy infrastructure. Mr Lilley and my hon. Friend Phil Wilson expressed concern about that. However, we should be realistic. There are no no-cost options, but there are opportunities to be realised. An over-reliance on fossil fuels will cost more in the long term and lead to bigger increases in consumers’ bills, and our generation plant is largely coming to the end of its useful life. The need to reduce carbon emissions, which is accepted by the Government but not necessarily by all Government Members, means that there is a pressing need to renew that infrastructure, and to do so in the right way.
We should also be maximising the opportunities for jobs in our economy to build growth and provide employment in the parts of the UK that are suffering the most economically, not least because of the impact of other aspects of Government policy. That was pointed out in an intervention by my hon. Friend Diana Johnson and in the speeches by my hon. Friends the Members for Sedgefield and for Scunthorpe (Nic Dakin). Many places around the UK are well placed to be the hubs for renewable energy because they combine the port infrastructure, the manufacturing expertise and the chance to develop new export opportunities. We have heard about the need for joined-up thinking within Government to attract that investment. Much of that depends on confidence, as the Secretary of State observed, and the Government must be aware that the shambolic handling of the feed-in tariff debacle has dented confidence more widely across the energy industry. I hope that Ministers learn some lessons from that sorry exercise, because it not only has direct consequences for jobs and businesses, as my hon. Friend the Member for Kingston upon Hull North said, but sends a wider message to the industry.
Julian Smith highlighted the importance of CCS, quoting Professor Jeff Chapman, and reflected on the decision on Longannet, which many Members are sorry has been unable to be demonstrated on a commercial basis. We should not forget, however, that the work at Longannet, including the FEED—front-end engineering design—study, will bring some benefits to potential future CCS projects, and it is important that we learn from that. I hope that as the Government outline their new competition, they do not use criteria that restrict the ability of many potential CCS projects to go ahead.
My hon. Friend Chris Ruane highlighted the importance of innovation and development to provide high-quality, high-skilled and exportable jobs, and the important link between academic institutions and industry in developing those jobs around the UK.
The right hon. Member for Bermondsey and Old Southwark, with his own unique style of collegiate behaviour, helpfully highlighted the differences among the Liberal Democrats on nuclear. We must all be clear that we need baseload generation as well as renewable generation, and that nuclear, despite many other aspects about which people express concern, is, like renewables, a low-carbon energy.
My hon. Friend Mark Lazarowicz, Caroline Nokes and my hon. Friend Geraint Davies put in, or repeated, their bids for the location of the green investment bank. I think that everyone did that apart from Mr Lilley, who said that he did not want it in his constituency, so that might bring the number of bids down from 32 to 31. However, the most important issue in relation to the green investment bank is not its location but whether it is up and running. The Secretary of State suggested that its operation as a bank has probably been delayed until 2017. My hon. Friend Dr Whitehead reminded him that that is a direct result of Government policies elsewhere.
In the extensive press coverage on the Secretary of State’s appointment, various anonymous Members among his coalition partners said that they were very pleased that he had got the job because he is a much more collegiate figure than his predecessor—although that would not be difficult. Labour Members must hope that he learns to stand up to the Treasury as well, because Treasury dominance has too often overridden important aspects of the green economy from which we need to benefit in the period ahead.
The hon. Members for Great Yarmouth (Brandon Lewis), for Waveney (Peter Aldous) and, briefly, for Suffolk Coastal (Dr Coffey) highlighted the potential of offshore industrial opportunities in their constituencies and the need to ensure procurement benefits, as far as possible, for indigenous companies—a point also made by my hon. Friend the Member for Scunthorpe.
Gordon Henderson, in an interesting and courageous speech, made clear the problems that the mixed messages coming from the Government and from Government Members are creating as regards some of the investment decisions that may or may not be made. He made the important point that while there may be costs associated with renewable energy, there are also costs associated with an over-reliance on declining and volatile resources. We need to bear that in mind.
My hon. Friend the Member for Scunthorpe made some important points on behalf of energy-intensive industries. He represents a steelmaking constituency, as do I. It is important that those industries get clarity from the Government about the package that was put in place in the autumn statement and do not miss out on opportunities in the green economy.
My hon. Friend Chris Evans highlighted the importance of energy efficiency in stimulating the construction industry, although I suspect that the right hon. Member for Hitchin and Harpenden would disagree with him.
The motion highlights the need for the transition to a low-carbon economy. It outlines the opportunities and presses the Government to get the right strategy in place. If the Secretary of State wants to make his mark and to deliver change, rather than just to use the rhetoric of change, he should ensure that the Government bring forward an active industrial strategy, because that is what is needed to transform the opportunities into reality. I commend the motion to the House.
This has been a great debate, with terrific contributions and thoughtful speeches by Back Benchers from all parts of the House. The level of expertise and knowledge on the green agenda across the Chamber never ceases to surprise and encourage me. I shall shortly address many of the points raised.
However, once again, the Labour Front Benchers were out of step with the mood of the House because of their desperate rush to score party political points at the expense of measured and informed argument. The fact is that the green economy, like the rest of the economy, faces a challenging time. There are real barriers and obstacles to growth to be navigated. The coalition is determined to tackle them with vigour, ambition and optimism. However, the green economy does not exist in a vacuum, and these are tough times.
There are no easy solutions for dealing with Labour’s legacy of debt and borrowing. In the real world, the green economy is confronted with the same financial challenges as every other industrial sector. Contrary to the gloomy, downbeat predictions from the Opposition, the green economy is rising to the challenge. It is bearing down on costs, introducing greater financial rigour and delivering better value for money for consumers and investors alike. Although there are no easy answers or quick fixes for Labour’s debt crisis, the green economy now has a Government who are genuinely on its side for the long term. Perhaps that is why Ernst and Young’s latest report upgraded the UK from the sixth to the fifth most attractive place in the world to invest in renewables, and why 80% of the 150 global investors in Credit Suisse’s recent survey voted for the UK as having the best regulatory environment for the next five years. After years of Labour’s stop-go policies, transparency, longevity and certainty are at the heart of our policy making.
Let me reassure Caroline Flint that the coalition’s ambition to be the greenest Government ever has not withered; far from it. In 2012, our green agenda will move up a gear. This is the year in which the coalition will move from ambitious green rhetoric to bold deployment. On a range of iconic programmes, we are taking huge strides forwards. We are delivering the same level of ambition, but at a lower cost to the consumer. More green for less cost—that is the challenge for the low-carbon economy in 2012; that is “Green economics 2.0.” Many Government Members echoed that. We are happy to be judged on our record.
The plans to establish Europe’s first green investment bank are well under way. In the meantime, UK Green Investments will invest £775 million in the green economy. The green deal, our transformational new market for energy efficiency and the most ambitious home improvement programme since world war two will be launched in the fourth quarter of this year and will build momentum in 2013 and 2014. Europe’s first renewable heat incentive is already investing £860 million in British innovation.
The reforms to feed-in tariffs were challenging and difficult for many companies, but they were absolutely necessary. However, as a result of some difficult decisions that Labour shirked, we can afford to increase massively our ambition for solar and a range of other decentralised technologies. Thanks to the firm action to reduce the cost of FITs, we have a bigger scheme offering better value.
The year 2012 will be the one in which we finally shrug off the humiliation left by Labour of being the third worst country in Europe for renewable deployment. This year, we expect to install at least 4 GW of green energy—double the amount that we inherited from the Labour Government. We are also building for the long term, not only with our forthcoming electricity market reforms and their game-changing measures for energy efficiency and demand production, but with our ambitious plans for marine energy, which will harness wave and tidal power; a world-leading programme for carbon capture and storage; and the ambitious roll-out of a new nuclear fleet. That all means that we can face the 2020s with growing confidence.
Phil Wilson spoke encouragingly of a range of renewable energy projects and initiatives in his constituency. I am happy to invite him to meet my officials to see how we can help to develop those programmes.
I will give way if there is time a little later, but I want to respond to some more contributions.
My right hon. Friend Simon Hughes spoke with genuine passion. I understand his long-held views on nuclear power. Although he takes a different view from mine, I welcome his canter through the range of other coalition policies that he wholeheartedly endorses. I thank him for paying tribute to Chris Huhne for his contribution to the international climate negotiations at Cancun and especially at Durban, where he played an important role.
Mark Lazarowicz spoke strongly in favour of the green investment bank. I assure him that we are pressing ahead at full speed with that flagship coalition policy, which was announced in opposition and is being seen through in government by our reforming Chancellor.
My hon. Friend Brandon Lewis is a great champion for a range of renewables, especially offshore wind. His active support for a huge number of new green jobs in this area is very valuable. I assure him that we are determined to maximise the value to British business of the deployment of these new technologies, unlike Labour. In the last offshore wind farm to be constructed under Labour, 80% of the components were manufactured overseas and imported. That is a shameful record that the coalition are determined to turn around.
My hon. Friend Peter Aldous was right to point to the important role that East Anglia can play in the new green economy. I listened carefully to his thoughtful comments and suggestions. I was only sorry that my hon. Friend Dr Coffey was cut off in her prime, rather like Adele at the Brits, when extolling the virtue of the East Anglian energy coast.
Diana Johnson was right to celebrate the investment in her area by Siemens and to praise the many local individuals who worked hard to secure it. However, she is wrong to think that there was not a strong and concerted push from Downing street and my Department to bring that investment to her area.
My hon. Friend Caroline Nokes was right to focus on the excitement on the Back Benches about a range of innovative new technologies that are coming forth and fuelling a green recovery, particularly the anaerobic digestion initiatives in her constituency.
My hon. Friend Gordon Henderson made a great speech. He was right to point to the falling costs of wind energy and its future as a reliable source. He was also right to remind us that home-produced renewables not only help us to meet our carbon targets, but add to the UK’s energy security by reducing our exposure to fluctuating international fossil fuel prices.
Nic Dakin was right to point to the need for more skills. I think he will be pleased about further announcements that my Department will make shortly on that issue and on apprenticeships.
My right hon. Friend Mr Lilley injected a degree of rigour back into the debate. I am afraid we do not always see eye to eye on these issues, and I have to say that the green investment bank will play a very powerful role, not least in leveraging in many times more money in private capital than from its own capitalisation. It will be a real lever for growth. I am now in a position to make a new announcement to the House about the location of the green investment bank: I can formally confirm that it will not be in Hitchin.
Chris Evans spoke about our use of natural resources and the need to install energy efficiency measures in homes, and I agreed with many of his points.
Despite the partisan note injected by Opposition Front Benchers, I believe that there is still much that unites Members throughout the House in their commitment to green investment and climate change. The real difference, however, is that Government Members believe in enterprise, the private sector, innovation and the genius of British business. The Labour party, I am afraid, is retreating to its left-wing comfort blanket of heavy-handed regulation, punitive taxation, fat Government subsidies for the chosen few and the dead hand of state planning. That is not our vision. We believe that the green economy can be an engine for growth, not a burden on taxpayers.
Globally, the clean energy sector continues to show dramatic growth, and we are determined for the UK to seize an increasing share of that valuable world market. Here at home, the Labour party had 13 years to deliver on the ground, but for all the big talk, its achievements were very modest. Come 2015, this historic coalition will be very happy indeed to be judged on its record of delivery.