Cambridgeshire and Peterborough Independent Commission on Climate
Anne-Marie Trevelyan Excerpts(2 years, 7 months ago)
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The Minister for Business, Energy and Clean Growth (Anne-Marie Trevelyan)
I begin by congratulating my friend, the hon. Member for Cambridge (Daniel Zeichner) on securing this important debate this evening. I take a moment, if I may, to recognise the excellent work done by Baroness Brown and the commission in producing the report of the Cambridgeshire and Peterborough Independent Commission on Climate Change. The report is testament to the drive and ambition that local areas have in supporting the country’s transition to a cleaner, greener future, and I know that across the UK, our local areas have already made great strides towards this future, including Cambridgeshire and Peterborough, which are demonstrating that in spades.
This Government recognise the important role that local areas play in helping drive progress towards our national climate change commitments. As you are now aware, Madam Deputy Speaker, the report makes a number of recommendations to the Cambridgeshire and Peterborough Combined Authority and to central Government. While sadly I do not have the time to address each recommendation in turn, I commend these first four areas, which in and of themselves demonstrate the enormous challenges we face as a country. We will have a close look at the peat area, which is of particular note to me as I have a large area of peat in my constituency, too. It is something that we need to work on in a considered way to make good progress.
The recent National Audit Office report “Local government and net zero in England” identifies £1.2 billion in grant funding available this financial year for local authorities to act on climate change and notes that that is a sixteenfold increase on the previous year. In addition to this grant funding, the local energy programme of the Department for Business, Energy and Industrial Strategy is providing direct support to local enterprise partnerships, local authorities and communities in England to play a leading role in decarbonisation and clean growth. The programme was announced in 2017 as part of the clean growth strategy.
Almost £22 million has been invested to date via the programme, including £13 million in funding for five local energy hubs across England, including one in the greater south-east region that provides direct support to the Cambridgeshire and Peterborough area. For example, the hub has funded several community organisations to develop locally owned energy projects, including a project for three villages—Great Staughton, Perry and Grafham—to transition to renewable heat through a ground or water source heat pump.
Last week, the hub worked closely with the Cambridgeshire and Peterborough Combined Authority to host the first event of the race to zero carbon tour. The tour will continue across the UK in the run up to COP26 and aims to share those local stories of decarbonisation with business, local authorities and communities.
The Government are also providing specific sectoral support to other areas, including a suite of measures to help local authorities to decarbonise heat and buildings through higher standards in planning and construction. For example, the local authority delivery phase 2 scheme, which aims to improve the energy efficiency of low-income households, has awarded more than £79 million to the energy hub to cover upgrades to homes in all 141 local authorities covered in the south-east. Further details on the immediate actions that we will take for reducing emissions from buildings, as well as our approach to the key strategic decisions needed to achieve a mass transition to low-carbon heat across the UK, will be outlined, as the hon. Member said, in the heat and buildings strategy, which will be published in due course.
I hope you will agree, Madam Deputy Speaker, that some excellent work is already under way to support local areas in reaching net zero. Further plans for the role of local authorities in meeting net zero will be outlined in the net zero strategy, which is currently under development—the hon. Member will be pleased to hear that it is keeping me very busy—and due to be published before COP26.
I thank the hon. Member once again for securing the debate. I reiterate that the Government are committed to supporting local areas in the transition to net zero. We understand that local areas are key to the Department’s wider efforts both to decarbonise our country and create a cleaner, greener future for us all as well as adapting to those climate impacts already with us and invest in resilient solutions to protect both lives and livelihoods. The report will help as a guide for so many of those climate-vulnerable countries that I am visiting and working with as the champion on adaptation and resilience for COP26. These are issues that affect us all. From Cambridge to Kathmandu, these challenges are with us now, and communities, counties and countries are having to get to grips with how they become more resilient while they move to clean energy. I thank all those who have worked so hard on the report, which will be a huge resource not only for the area but in helping others who want to find ways through this complex maze to reach a place where we can transition so that all those whom we support live in a cleaner, greener way that ensures that their families can have a safe planet for the future.
Question put and agreed to.
Magnox Inquiry Report: Government Response
Anne-Marie Trevelyan Excerpts(2 years, 9 months ago)
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The Minister for Business, Energy and Clean Growth (Anne-Marie Trevelyan)
We today publish the Government’s combined response to the March 2021 final report of the Magnox inquiry and the June 2021 Departmental Review into the Nuclear Decommissioning Authority. The response has been co-authored by BEIS, the Cabinet Office and UK Government Investments. The Nuclear Decommissioning Authority has developed its own combined response to both the Magnox inquiry final report and the departmental review, which is also being published today.
Since it was established under the Energy Act 2004 the Nuclear Decommissioning Authority has driven a significant step change in the decommissioning of the UK’s legacy nuclear sites. The organisation’s portfolio includes 17 licenced nuclear sites, with over 15,000 people across its estate, and contributes very significantly to the Government’s levelling-up agenda. However, there is an ongoing need for the organisation to evolve to become a more resilient, efficient and effective organisation that continues to drive transformation on the ground and deliver value for money for the taxpayer.
The Magnox inquiry was an independent, non-statutory inquiry commissioned by the then Secretary of State for Business, Energy and Industrial Strategy, right hon. Greg Clark MP in 2017.
Its purpose was to review the procurement and subsequent termination of a management contract for decommissioning the Magnox nuclear power stations. An interim report was published in October 2017 with a number of initial findings and the March 2021 final report contained a total of 57 recommendations. These recommendations centred around future commercial assurance, oversight of governance procedures and organisational culture change.
The departmental review into the Nuclear Decommissioning Authority, conducted by an independent team within BEIS, was published in June 2021, with a total of 26 recommendations. These centred around the form and function of the Nuclear Decommissioning Authority, its oversight by Government and their internal governance, organisational health and operational effectiveness.
I am grateful to Mr Holliday and his team and to the independent departmental review team for their comprehensive and rigorous work, which is reflected in the reports.
Since the publication of the Magnox Inquiry interim findings, significant progress has already been made to strengthen and simplify the organisation of the Nuclear Decommissioning Authority estate. This includes the replacement of management contracts with direct subsidiary arrangements to support improved efficiencies across the estate and improvements to the governance of assurance and approval decisions, especially in the area of commercial assurance. There has been a complete overhaul of the Nuclear Decommissioning Authority leadership team since the 2017 Magnox procurement and the Government have also enhanced its oversight arrangements for the organisation. The recommendations from the reviews complement the progress made and propose further improvements.
Both reviews that are being responded to today contain further valuable lessons for the Nuclear Decommissioning Authority and for the Government. We take the recommendations very seriously and have considered them with great care. The responses will give stakeholders confidence of the depth of reach and robustness with which the learnings from the reports will have an impact on the Nuclear Decommissioning Authority.
The Government and the Nuclear Decommissioning Authority will prioritise the implementation of the commitments within these responses as we continue to deliver against the UK’s critical nuclear decommissioning challenges.
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Energy Digitalisation and Smart Technology Strategies
Anne-Marie Trevelyan Excerpts(2 years, 9 months ago)
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The Minister for Business, Energy and Clean Growth (Anne-Marie Trevelyan)
I am pleased to announce the latest steps the Government are taking to decarbonise our electricity system, to meet our net zero target by 2050, delivering on commitments made in the Energy White Paper.
First, the Government have today published a new smart systems and flexibility plan, jointly with Ofgem. Technologies such as energy storage, interconnection and smart charging of electric vehicles are essential to balance supply and demand as we deploy more intermittent renewables to power our buildings and vehicles. Flexibility reduces the amount of generation and network we need to build, and costs for energy consumers—flexibility could reduce the cost of the system by up to £10 billion by 2050. It is critical for energy security as we shift away from unabated gas over the next decade. System flexibility is therefore fundamental in reducing emissions to net zero by 2050.
The transition to a smarter and more flexible energy system is also an opportunity. It will be delivered by UK businesses and will benefit consumers across the country. It will create nationwide jobs, potentially 24,000 by 2050, and drive investment across the UK. The UK is a global leader in smart systems and there is significant export potential—which could contribute as much as £2.7 billion per year to the UK economy by 2050—for the solutions that we will need to deploy at home. As nations confront the challenge of climate change, markets for new green products and services will spring up around the world. Taking action now will help position UK companies and our world-class research base to seize the business opportunities which will flow from it, creating jobs and wealth for our country.
The new smart systems and flexibility plan sets out how we will drive flexibility across the system, including a vision, analysis and suite of actions, focusing on:
Facilitating flexibility from consumers
Removing barriers to flexibility on the grid
Developing markets for flexibility, and
Improving monitoring of flexibility.
Secondly, the Government have published the UK’s first energy digitalisation strategy, jointly with Ofgem and Innovate UK. Energy system digitalisation is essential to enabling millions of assets—including solar panels, heat pumps, batteries and electric vehicles—to be optimised across our energy networks. A digitalised system will spur innovation, remove barriers to new entrants, facilitate new consumer offers and services, and enable system flexibility.
The energy digitalisation strategy sets out a vision and suite of actions to achieve this, focusing on:
Providing leadership and co-ordination to the sector
Incentivising the sector to digitalise, and
Supporting the development of digital tools and infrastructure.
These documents have been produced in close co-ordination with the energy sector.
Thirdly, the Government have published a call for evidence on de-risking large-scale, long-duration electricity storage. Large-scale and long-duration storage can provide additional benefits to other forms of flexibility, in particular by storing energy over long periods of low wind. The Government have developed a call for evidence from industry, investors and other stakeholders on the barriers and financing challenges that this type of storage faces, and how these barriers might be mitigated while minimising distortions in the market. This is the first stage in deciding whether a bespoke de-risking mechanism, such as a “cap and floor” regime is needed to accelerate deployment of this technology on the system.
Fourthly, the Government have published a call for evidence on the barriers to widespread deployment of vehicle-to-grid (and similar) technologies. Vehicle-to-grid technologies enable electric vehicles to balance the system by exporting electricity in return for payment when electricity is scarce—and reimporting it when it is abundant. The Government have developed a call for evidence to gain wider market views on the timescales, opportunities, and barriers as well as invite discussion on potential solutions to the widespread deployment of these technologies. The feedback will aid in creating a policy strategy for this area, help to design future innovation competitions and show the Government’s ongoing commitment to an area where the UK is a global leader.
I will place copies of the 2021 smart systems and flexibility plan and its appendices—appendix I: electricity system flexibility modelling, and appendix II: smart systems and flexibility plan monitoring framework—the energy digitalisation strategy, the call for evidence on facilitating the deployment of large-scale and long-duration storage, and the call for evidence on the role of vehicle-to-X technologies in a net zero energy system in the Libraries of both Houses.
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Green Workforce
Anne-Marie Trevelyan Excerpts(2 years, 9 months ago)
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The Minister for Business, Energy and Clean Growth (Anne-Marie Trevelyan)
As we look ahead to publishing our comprehensive net zero strategy and hosting COP26 in the autumn, we must focus on how we invest in the UK’s most important asset—our workforce—so that people have the right skills to deliver the net zero transition and thrive in the jobs it will create. This builds on the Prime Minister’s 10-point plan for a green industrial revolution set out in November 2020—the first step in capturing the once in a lifetime opportunity to lead the charge and pursue a global green recovery, level up the country, and support jobs throughout the UK as we accelerate on our path to reach net zero by 2050.
Today, together with the Under-Secretary of State for Education, my hon. Friend the Member for Chichester (Gillian Keegan), we welcome the publication of the independent Green Jobs Taskforce’s report. The report brings together evidence on the skills needed in the green economy and sets out their independent recommendations for how the Government, industry and a wide range of stakeholders can work together to meet the important challenges and grasp the opportunities they have identified.
We are also pleased to announce the formation of a cross-cutting delivery group to maintain the momentum generated by the taskforce and drive action across the green skills agenda.
BEIS and DFE convened this taskforce of 17 individuals from diverse backgrounds in industry, academia, unions, and the education and skills sector to come together to advise the Government, industry and the education sector. The Government will now consider the taskforce’s rich evidence base and comprehensive recommendations ahead of setting out, later in the year, our net zero strategy.
But we are taking the first steps to ensure that green jobs are good quality, that they can be accessed by people of all backgrounds and in all parts of the country, and that workers in sectors and industries undergoing change can reapply their skills and expertise towards this new challenge.
In England, the reforms to the skills system set out in the recently published Skills for Jobs White Paper provide the foundation on which we can build. This programme of reform, which placed employers at the centre of our technical education system, includes the introduction of new T-levels, flexible apprenticeships, skills bootcamps and occupational traineeships. Earlier in the year, we marked a major milestone in the lifetime skills guarantee, with the roll-out of almost 400 qualifications which are now available and fully funded for any adult who has not already achieved a level 3 (A-level equivalent) qualification.
We will ensure that these programmes are directed to support more people to get the skills they need to move into green jobs, and consider where we might need to go further or faster to fill skills gaps identified by the taskforce. We are already making progress—skills bootcamps will, from July this year, support flexible training in key green sectors such as construction and nuclear; a green apprenticeship advisory panel is identifying existing apprenticeships that best support green career pathways; our free courses for jobs offer is supporting more adults to study fully funded qualifications in subject areas crucial for green jobs, such as construction, forestry and engineering; and a new emerging skills electrification project will identify cutting-edge skills in the battery/electrification sector, develop short, modular content to meet the needs of employers, and upskill the teaching workforce.
This report also highlights how supporting people to develop the right skills to thrive in this transition cannot be the responsibility of the Government alone. We want to see businesses step up and invest in training the green workforce, and so we urge them to reflect on the taskforce’s work and use it to inform how they can benefit from and contribute to the green industrial revolution.
The Government will continue to work closely with industry to ensure the employer-led skills system we are building through our ongoing reforms meets employers’ needs and reflects the fast changing shape of the UK labour market.
[HCWS176]
UK Emissions Trading Scheme: Wales
Anne-Marie Trevelyan Excerpts(2 years, 9 months ago)
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The Minister for Business, Energy and Clean Growth (Anne-Marie Trevelyan)
I congratulate the hon. Member for Ceredigion (Ben Lake) on securing this really important debate on the operation of the UK ETS in Wales. The four Administrations of the UK have worked together over months and years to establish what will be the world’s first net zero carbon cap and trade market and a crucial step towards achieving the UK’s target for net zero carbon emissions by 2050. We have drawn on our years of experience and global leadership in carbon pricing, going all the way back to the original UK ETS in 2002, to ensure that the new scheme has the flexibility and ambition to deliver for the whole of the UK. We share the combined objectives of driving permanent emission reductions across the UK while protecting the competitiveness of our businesses, be they steelworks in south Wales, ceramics producers in central England or whisky distilleries in Scotland. The UK ETS authority—the UK Government and the three devolved Administrations —continue to make good progress in the operational delivery of the UK ETS in our respective nations.
The UK ETS market opened on 19 May and there have now been four successfully completed auctions, with a fifth taking place tomorrow. Collectively, we published the free allocation table for stationary installations on 11 May, and we have since issued just under 40 million free allowances to qualifying operators. The allocation table for aviation operators was published on 28 June, and we will be issuing allowances to qualifying aircraft operations shortly, but we are committed to building on the process, and officials from the four Administrations are already working together on plans to further increase the climate ambition of the UK’s carbon pricing policy.
The UK ETS authority has already jointly committed to exploring a number of areas where we could go further and faster, and together we plan to set out our aspirations to continue to lead the world on carbon pricing. The overall cap for UK ETS is an obvious place to start, and we will be moving together quickly to consult on a consistent net zero trajectory for the cap, drawing on the advice from our statutory advisers, the Climate Change Committee. We will also be reviewing free allocation, which is a key measure to protect our industries, to prevent the offshoring of emissions—I think we all agree that that slightly defeats the point—and to ensure that the system is fair and equitable across the UK and its constituent nations, while maintaining the level of ambition that we really need to be able to get to net zero.
Together, we will tackle the case for expanding carbon pricing across the economy while encouraging innovation in emerging decarbonisation technologies. The hon. Gentleman’s challenge of connecting forestry with the ETS is one that we will indeed look at. We have committed to explore expanding the UK ETS to other sectors—two thirds of emissions are currently uncovered—including thinking about how the UK ETS can incentivise the deployment of greenhouse gas removal technologies, be they nature-based, as he identified, or indeed engineered not by nature. We shall enhance the effectiveness of the UK ETS, particularly for aviation, while recognising our international obligation in that sector.
A key objective of the UK ETS is to protect the competitiveness of UK industry, so as well as the free allocation of allowances to sectors at risk of carbon leakage, which is the offshoring of production and emissions, we are providing a package of measures to help businesses to decarbonise. On 17 March, the Government published the UK’s first-ever net zero strategy for industry. The document is the first strategy published by a major economy, and it sets out how industry can decarbonise in line with net zero while remaining competitive and without pushing emissions abroad. The strategy sets the expectation that emissions in industry will fall by around two thirds by 2035 and at least 90% by 2050 compared with 2018 levels, in order for us to achieve net zero. We have challenges ahead and we need to find the best, most effective and most impactful solutions.
The UK ETS is a jointly established, jointly operated scheme that has great potential for all Administrations.
Ben Lake
I am grateful to the Minister for her response. As the work gets under way to expand the ETS scheme, will she ensure that the wider costs of any scheme, particularly carbon offsetting in local communities —whether those costs be the loss of agricultural land or the impact on the vibrancy of rural communities—can somehow be incorporated into the approach taken? I appreciate that it is a very complex issue and I do not pretend to have the answers, but could she reassure us that that will be considered as part of the future work scheme?
Anne-Marie Trevelyan
I take note of that. The hon. Gentleman may want to call for a similar debate with the Department for Environment, Food and Rural Affairs to discuss other aspects of the funding that will go to those smaller communities as we change the systems, now that we are no longer under the EU frameworks.
The UK ETS is focused on supporting industry to make those transitions and has great potential for all Administrations. It recognises both the unique opportunities and, indeed, the challenges in each, which are all different. I endorse and agree with the hon. Gentleman and the right hon. Member for Dwyfor Meirionnydd (Liz Saville Roberts), and share their passion for all those nature-based solutions, which are critical to helping us to sequester carbon from trees to peat. I am a particular advocate for peat restoration across Northumberland, for obvious, biased reasons.
I encourage all Members to work with Government and Natural Resources Wales as we think about extending the ETS scheme, which we are just starting to do. We will seek to review it in some detail and think about how we can expand it. There is a great deal of room to continue the conversation. I look forward to working with Members as we set out the consultation in due course and make progress. I hope we will continue this important discussion and find solutions to ensure that these really important industries of ours can compete effectively on the international stage.
Question put and agreed to.
Draft Electricity Capacity (Amendment) Regulations 2021
Anne-Marie Trevelyan Excerpts(2 years, 9 months ago)
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The Chair
We have moved to 1 metre-plus social distancing in General Committees. Members should still sit only in places that are clearly marked. Mr Speaker has stated that, unless Members are exempt, they should wear masks in Committee, except when speaking.
The Minister for Business, Energy and Clean Growth (Anne-Marie Trevelyan)
I beg to move,
That the Committee has considered the draft Electricity Capacity (Amendment) Regulations 2021.
It is a pleasure to serve under your chairmanship, Mr Stringer.
The draft regulations were laid before the House on 21 June. Before I outline their provisions, I will briefly provide some context. The capacity market is at the heart of the Government’s strategy for maintaining security of electricity supplies in Great Britain. It secures the capacity needed to meet future peak electricity demand under a range of scenarios through competitive, technology-neutral auctions, normally held four years and one year ahead of the relevant delivery year. Those who win capacity agreements, known as capacity providers, commit to providing capacity during period of system stress in exchange for capacity payments. Capacity payments are funded by electricity suppliers, who recover the cost from electricity consumers. Since its introduction in 2014, the capacity market has succeeded in ensuring secure electricity supplies at a low cost to consumers.
To ensure that the capacity market continues to function effectively, we regularly make adjustments to legislation, based on our experience of managing the market’s annual cycle. This instrument makes three technical improvements that will address issues that we encountered over the past year. A number of capacity providers had agreements terminated last year but were unable to transfer their obligations to other providers through the secondary market due to legislative barriers. The instrument aims to remove those barriers, and so improve the flexibility of the secondary trading regime, making it easier to replace capacity that closes prematurely and at short notice, and reducing risk to security of supply.
In the past year, there were a large number of appeals by prospective capacity providers whose applications to participate in the capacity market had been rejected. This was often for minor administrative errors. The instrument aims to make it clearer that the capacity market delivery body, the organisation that administers the capacity market, can accept information that corrects such errors when determining these appeals. This will reduce the risk of applicants being rejected for minor administrative errors, and prevent a detrimental impact on competition in the auctions.
Finally, we recently introduced new requirements on capacity providers that, if not met, could result in reductions to their agreement lengths. Given that such a reduction could have a significant impact on the viability of capacity providers’ projects, it is right that those in that situation have the right to appeal. The draft instrument will therefore allow capacity providers who have had the duration of their agreement reduced as a sanction for non-compliance with certain requirements the option of appealing the decision to the Secretary of State.
Alongside this instrument, we have put forward an amendment to the capacity market rules; it was laid before the House on 5 July. The amendment makes necessary changes that complement this draft instrument and a number of other technical improvements; most notably, it updates carbon emissions limits and extends some coronavirus easements, both of which were introduced last year.
In conclusion, this instrument introduces a number of technical provisions that are intended to address issues identified through the annual delivery cycle of the capacity market, and that are therefore necessary to enable its continued efficient operation. I commend it to the Committee.
Anne-Marie Trevelyan
I thank the hon. Gentleman for his remarks, which were careful and considered, as ever, and for his support for the statutory instrument. The Government continue to believe that the capacity market is the right mechanism at the moment for delivering security of supply at low cost to consumers, but we will of course continue to review it and ensure its ongoing efficient and effective operation in the years ahead. I absolutely note his point that the next review will be an opportunity for consideration as our energy mix continues to change to include more renewables and cleaner energy sources. It will be an opportunity to think about whether the capacity market continues to be the right tool.
The draft regulations respond to three specific technical issues that we have encountered in the past year in operating the capacity market. They introduce increased flexibility for market participants and the capacity market delivery body, so that the market continues to deliver its objective of guaranteeing secure electricity supplies at the lowest cost to consumers. I therefore commend them to the Committee.
Question put and agreed to.
Electricity Network Grid Charges
Anne-Marie Trevelyan Excerpts(2 years, 9 months ago)
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The Minister for Business, Energy and Clean Growth (Anne-Marie Trevelyan)
I congratulate the hon. Member for Kilmarnock and Loudoun (Alan Brown) on securing an important debate.
Network charging arrangements are central to the delivery of a secure and affordable net zero energy system, and the Government absolutely understand that. By law, network charging is a matter for Ofgem, as the independent regulator. Network charges are governed by the principle that the user pays. For the transmission network, that means higher charges for generators in Scotland, as much electricity is sent over long distances to centres of demand in the rest of Great Britain. By contrast, homes and businesses in Scotland pay lower transmission charges than consumers elsewhere in Great Britain. This cost-reflective approach ensures the efficient use of the network and keeps costs down for all bill payers.
Ofgem recognises the critical importance of charging arrangements in progressing to net zero. Last week, it published its consultation on a number of reform proposals as part of its access and forward-looking charges review, including a proposed reduction in the up-front charge paid by generators and demand users connecting to the distribution network. Ofgem’s consultation also noted potential issues with transmission charging arrangements and signalled that it is considering a wider and more holistic review of them.
As the pace of the energy transformation accelerates, it will be important for Ofgem to have clear sight of the Government’s policy priorities for energy decarbonisation. We have therefore committed in our energy White Paper to consulting on Ofgem’s strategy and policy statement in 2021. It will set out the strategic priorities of the Government’s energy policy, the policy outcomes sought and the role of the Government, Ofgem and other parties collectively responsible for delivering these goals.
For the Government’s part, we remain firmly committed to the roll-out of renewable generation projects and are taking a number of measures to support it. We will continue to support low-carbon projects across Great Britain through our contracts for difference scheme. Scotland has benefited significantly from the scheme since its inception in 2015; 34% of all projects are located there. The next round will open at the end of this year.
We have launched the offshore transmission network review to improve the delivery of transmission connections for offshore wind generation. We are working very closely with the devolved Administrations on that.
James Cartlidge (South Suffolk) (Con)
The offshore transmission review, as the Minister knows, means a lot to my constituents because they strongly support net zero. Offshore wind has been an amazing achievement in East Anglia, but it is bringing new infrastructure and we have the threat of new pylons across open countryside. On pricing, is it not true that one should look not only at the charging, but at expenditure on capital items that are relieving infrastructure pressure? For example, the eastern link, a huge undersea cable off the coast of Scotland that will relieve pressure on the countryside, will be more than £3 billion. People in East Anglia will hope to see similar expenditure so that they have a defrayment of the infrastructure that would otherwise be going over the countryside.
Anne-Marie Trevelyan
My hon. Friend is a doughty campaigner on the matter and continues to drive the Department to make sure that we are moving the offshore transmission network review at pace to find the right solutions that work for the whole country. We will be working on the review to improve delivery.
If I may, I will reply in detail in writing to the very long series of questions asked by the hon. Member for Kilmarnock and Loudoun, to ensure that he gets as full an answer as possible. In closing, I emphasise the importance of the network charging arrangements, which support the delivery of net zero in a fair and efficient way. The reforms that Ofgem is progressing will help us to achieve that.
Question put and agreed to.
Fuel Poverty
Anne-Marie Trevelyan Excerpts(2 years, 9 months ago)
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The Minister for Business, Energy and Clean Growth (Anne-Marie Trevelyan)
I beg to move,
That this House has considered fuel poverty.
I am pleased to be able to open this debate, which is an annual opportunity for Members to raise their constituents’ views on the important question of fuel poverty. The past year has been a challenge for everyone, yet the impacts of the pandemic have not been felt equally. In particular, it has had a devastating impact on those already on a low income. The issues being faced by those in fuel poverty are not unique to the pandemic. The health implications of living in a cold home remain as serious as ever. Work is ongoing to address the issue and support those who are most vulnerable.
Alan Brown (Kilmarnock and Loudoun) (SNP)
I appreciate the Minister giving way so early. She is illustrating the impact of covid and people in fuel poverty. Does that not underline the need to retain the £20-a-week universal credit uplift?
Anne-Marie Trevelyan
I will continue, if I may, and I hope I will answer the hon. Gentleman’s points.
Government-led energy-efficiency upgrades over the last decade have reduced the cost of heating homes, building resilience for all households, especially those on low incomes. I will come on to the energy-efficiency schemes that have kept households warm over the past year and the further action we are planning to take to accelerate progress towards tackling fuel poverty.
I would just like to acknowledge the importance of the strong relationships built with energy suppliers, which have been crucial during the pandemic. I thank them and their staff for their total commitment to looking after customers, despite risks to themselves. These relationships enabled us to quickly secure a voluntary agreement to support customers impacted by covid-19, which has been hugely successful in protecting those most vulnerable or at risk of debt, and came top of the Citizens Advice ranking of protection measures by industry. There is no doubt that more immediate support for those struggling to pay their energy bills and ensuring fairness within the energy market is important and I will come back to that later.
It is important to note that fuel poverty is devolved and that the Department for Business, Energy and Industrial Strategy has a responsibility for England. Each nation remains committed to tackling the issue and I welcome contributions from all hon. Members today as they raise their own nation’s issues.
In February this year, we published an updated fuel poverty strategy, “Sustainable Warmth: Protecting Vulnerable Households in England.” The strategy details our focus on energy efficiency, which enables warmer homes at lower cost, while also reducing carbon emissions in line with net zero. Our strategy reiterates the 2030 fuel poverty target in England, which is to ensure that as many fuel-poor homes—indeed, all homes—as is reasonably practical achieve a minimum energy-efficiency rating of band C by 2030.
A great deal has been achieved in the last decade, but there remain a significant number of households in need of support on our journey to the 2030 target. As of 2019, there are 3.18 million households in fuel poverty in England. That is a reduction of 1.6 million households since 2010. The main reason for the reduction in fuel-poor households over the last 10 years has been energy-efficiency improvements—improvements that are of benefit for many years to come.
Cold homes will often have issues with mould and damp. By installing energy-efficient measures, we are improving the comfort of our constituents’ daily lives. They are crucial in protecting and improving people’s health and helping to reduce the burden on the NHS, as well as reducing energy use and thereby reducing bills. We are focusing on improving the least energy-efficient homes first, to ensure some of those in the homes that are the most difficult and expensive to heat are prioritised. There has been significant progress.
Compared with 2010, there are now 1.3 million fewer low-income households living in the least energy-efficient homes—that is bands E, F or G. Our sustainable warmth strategy details the energy-efficiency schemes currently in place.
The green home grant local authority delivery scheme will deliver £500 million of energy-efficiency and low-carbon heating measures across the owner-occupied, private and social rented sectors. The home upgrade grant will support low-income households, with upgrades to the worst performing off-gas grid homes in England, providing energy-efficiency improvements and low-carbon heating alternatives.
In the 2019 Conservative manifesto, we committed to a £3.8 billion social housing decarbonisation fund over a 10-year period to improve the energy performance of socially rented homes. We have committed to a four-year, £4 billion successor scheme to the energy company obligation—the ECO, as it is known—across Great Britain. That will accelerate our efforts to improve homes to meet fuel poverty targets.
While these energy-efficiency schemes are crucial in reducing fuel poverty in the long term, we also recognise the need for short-term help, so our support for households in the winter months continues with the warm home discount, providing 2.2 million households with £140 off their energy bill this year. We are continuing to improve the scheme by expanding it and consulting on new ways to improve targeting to reach those most in need. Since 2011, it has provided more than £3 billion of rebates to households, helping keep homes warmer over the colder months.
Winter fuel payments provide pension age households with financial support worth up to £300 each year and cold weather payments support vulnerable households through particularly cold spells. They provided more than 3.6 million households in Great Britain with support last winter.
Alongside all the direct support, the voluntary agreement with energy suppliers has been crucial over the past year in protecting vulnerable customers. Our work with energy suppliers to ensure the best protection for low-income and vulnerable consumers and promote best customer service in a thriving energy market is vital, so we are working to reduce the impact of debt on fuel-poor households and identify those at risk of self-disconnection or self-rationing. Ofgem rules require suppliers to offer emergency and “friendly hours” credit to all prepayment customers at risk of self-disconnection. We are also working to improve the communications and advice available to everyone, to ensure that better engagement and information are readily accessible to consumers.
I assure hon. Members that we remain fully committed to addressing and reducing fuel poverty for our most vulnerable constituents so that all households can be assured of a warm and affordable home. We will continue to drive forward on delivering energy efficiency measures to reduce energy bills and create warmer, safer living environments, while providing direct support with energy bills and working alongside the energy market to ensure a better consumer experience and protect customers. I am grateful for the opportunity to discuss this important issue and look forward to hearing from colleagues.
Anne-Marie Trevelyan
I thank all those who have spoken this afternoon. It has been a really powerful and important debate. I particularly thank my right hon. Friend the Member for Wokingham (John Redwood). It might be rare to see him and the hon. Member for Kilmarnock and Loudoun (Alan Brown) standing up together to lobby the Treasury on reducing or removing VAT on insulation and other green products, but who am I to stop such a bonding of those least likely to want to campaign together? It is a fascinating issue, and we should all watch closely and hope that this will be a new match to take on some of the green challenges that we all want to see fixed.
I thank the hon. Member for Kilmarnock and Loudoun for raising the issues that the all-party parliamentary group for terminal illness raised. I will make sure that I read that report and look at it in more detail. As I said, Scotland obviously has its own devolved controls over fuel poverty issues, but I recognise, as someone who lives in Northumberland, that the challenges of weather do cause differences, and we have to be conscious of that as we work towards finding those solutions.
I thank my hon. Friend the Member for Hastings and Rye (Sally-Ann Hart) for being such a great and persuasive advocate for her constituency. She understands clearly and in depth that there are areas in her constituency that need more support. I hope that she will work closely with her local authority on the schemes it can deliver to help insulate homes and make sure that she drives it to greater success.
It is always a pleasure to hear from my hon. Friend the Member for Southend West (Sir David Amess), although we did not hear any calls for city status. His total commitment on this issue is heartening at every level. He has campaigned on it and has driven a change in many Government policies over the years. I hope that he supports the renewed drive and, indeed, supports bringing in the band C requirement as part of our fuel poverty strategy. That will not only drive the short-term ways we can help support families in fuel poverty, but will make sure we will change forever the landscape of our property mapping across the country. Properties in bands D, E and F will be brought up to scratch to ensure that we do that.
We must continue to take action to address the fuel poverty that still exists. As we move towards our 2025 milestone and our ambitious 2030 fuel poverty target, we are very aware of the challenges that remain. By focusing on energy efficiency and delivering 1.6 million households out of fuel poverty, and as we move to those low-carbon heating solutions and net zero by 2050, we have the opportunity to ensure that those on low incomes are not left behind. A fair and affordable transition will be key to protecting those who are in fuel poverty.
The social housing decarbonisation fund will deliver energy-efficient homes. Support such as the home upgrade grant, which is due to begin delivery early next year, with a commitment to a £4 billion successor energy company obligation scheme, will continue to help push forward a reduction in the homes that need to be improved.
For anyone whose questions I have not answered, I will make sure that we do so in writing. I thank everyone for their important and thoughtful contributions today.
Question put and agreed to.
Resolved,
That this House has considered fuel poverty.
Mr Deputy Speaker (Mr Nigel Evans)
We will suspend briefly for the sanitisation of both Dispatch Boxes, then we will resume with the next debate.
Oral Answers to Questions
Anne-Marie Trevelyan Excerpts(2 years, 9 months ago)
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Stephen Crabb (Preseli Pembrokeshire) (Con)
The Minister for Business, Energy and Clean Growth (Anne-Marie Trevelyan)
Since 2003, various bodies across Government have provided innovation funding of £175 million to the wave and tidal sectors. Projects remain eligible to compete in contract for difference auctions. We have also set a target of 1 GW by 2030 for floating offshore wind to stimulate investment. We are currently assessing the contribution of tidal stream, wave power and tidal range generation, following the call for evidence last September.
Stephen Crabb
As my right hon. Friend knows, and as I hope she will see if she visits Pembrokeshire, my constituency is emerging as an important hub for marine energy, but technologies such as tidal stream need the same revenue support that we gave to solar and wind to unlock private investment and reduce costs over time. To that end, will she assure us that the parameters of the CfD auction round later this year will be set to ensure that new tidal stream and other marine renewable projects can be developed?
Anne-Marie Trevelyan
I agree that there is significant potential for these new marine technologies. Recent market engagement carried out by the Crown Estate showed a high level of market appetite to develop more projects in the area, which is very encouraging. We will set out the details of the new technology as part of CfD round 4 in the autumn, so I hope that my right hon. Friend can wait that long. In the meantime, I look forward to being able to visit Pembrokeshire to meet him with businesses and those in the community who are keen to progress these projects.
Mr Philip Hollobone (Kettering) (Con)
The Minister for Business, Energy and Clean Growth (Anne-Marie Trevelyan)
In December, the Government aim to deliver our biggest auction yet for new renewables, through the contracts for difference scheme. We aim to launch the green heat network fund in April next year. The Government are also committed to investing £9 billion in improving the energy efficiency of our buildings while creating thousands of green skilled jobs.
Mr Hollobone
With some 30 major wind turbines and several solar farms, the Kettering constituency is doing its bit for renewable energy. Last year, how much renewable electricity was produced in Kettering? How many homes would it power?
Anne-Marie Trevelyan
As at the end of December 2019, the east midlands region produced more than 5,500 GW of electricity from renewable resources, including nearly 1,600 GW from offshore wind. To break that down, 1,534 of the 88,000 renewable electricity installations were in the Kettering constituency, including photovoltaic, onshore wind, anaerobic digestion, landfill gas and plant biomass. This is generating 173 GW, or enough power to power 45,000 homes.
Gill Furniss (Sheffield, Brightside and Hillsborough) (Lab)
Beth Winter (Cynon Valley) (Lab) [V]
The UK Government talk about levelling up former coalfield communities such as those in my constituency, yet at the same time they have profited by billions of pounds from the mineworkers’ pension scheme since its privatisation in 1994. That money could be going to miners and their families, many of whom are experiencing hardship and are struggling to make ends meet. The Government’s announcement yesterday not to implement the recommendations of the cross-party Select Committee on Business, Energy and Industrial Strategy to redress this injustice was met with dismay and was described as a “slap in the face”. Will the Minister agree to review that decision and implement the BEIS Committee recommendations in full?
The Minister for Business, Energy and Clean Growth (Anne-Marie Trevelyan)
The hon. Lady will know that I have sent my reply in to the BEIS Committee, but I also had a very constructive meeting with a number of the trustees just a few weeks ago and we have agreed to continue. I have left them with some questions that they must go to talk to the rest of the trustees about, and my door continues to be open for them to bring back propositions if they want to continue to discuss this.
Stephen Hammond (Wimbledon) (Con)
The Minister for Business, Energy and Clean Growth (Anne-Marie Trevelyan)
We will publish our comprehensive net zero strategy ahead of COP26. It will set out the Government’s vision and how we will meet our ambitious goals as we transition to net zero emissions by 2050.
Stephen Hammond [V]
I thank my right hon. Friend for her response. She will know that many infrastructure institutions, including the Institution of Civil Engineers, have called on the Government to deliver a system-wide plan for transitioning the UK infrastructure. Will she confirm that when she publishes the strategy in the autumn—I take that from her response—it will provide the policy certainty for infrastructure and the supply chain so that there is investment and we can ensure that the necessary initiatives are put in place to enable the Government’s aim of net zero to be achieved?
Anne-Marie Trevelyan
The net zero strategy will include a focus on how better to embed net zero as a key consideration across all Government activity. Furthermore, infrastructure will play a crucial role in the transition to net zero, and our policies and approach will reflect that. The net zero strategy will continue to build on policies that we have already announced, such as the £1 billion carbon capture and storage infrastructure fund and the £240 million net zero hydrogen fund. We are also supporting underlying investment decisions to mobilise private finance. The national infrastructure bank announced in the Budget will have £12 billion of capital and be able to deploy £10 billion of Government guarantees.
Matthew Pennycook (Greenwich and Woolwich) (Lab)
The 2021 progress report published by the Climate Change Committee last month stated:
“A pattern has emerged of Government strategies that are later than planned and, when they do emerge, short of the required policy ambition.”
Despite the committee’s characteristic politeness, that is a damning critique from the Government’s own climate advisers. I take it from the Minister’s previous answer that the House has this morning been given a cast-iron guarantee that a net zero strategy will be published well in advance of COP26; will she confirm that that is the case? Does she recognise that the credibility of such a strategy is predicated on a substantive Treasury net zero review that sets out precisely how the benefits and burdens of the transition will be shared fairly?
Anne-Marie Trevelyan
Of the 92 recommendations made by the Climate Change Committee in its 2020 progress report, 40 have been achieved or partly achieved and another 32 are under way, meaning that progress has been made against more than 75% of the recommendations. Our forthcoming strategies—including on hydrogen and transport and our comprehensive net zero strategy—will set out more of the policies that the committee calls for in its recommendations. I clearly cannot speak for the Treasury, which will publish its own review, but I know that that is also very well advanced.
Craig Whittaker (Calder Valley) (Con)
The Minister for Business, Energy and Clean Growth (Anne-Marie Trevelyan)
The Government confirmed our commitment in the energy White Paper to more nuclear power after Hinkley Point C, and we are currently negotiating for Sizewell C. That is a great example of the bright future ahead for our skilled nuclear workforce.
Craig Whittaker [V]
Gathering the skills and expertise for building new nuclear power stations in the UK has been a mammoth task and a considerable expense to many companies because no nuclear has been built in the UK for many decades. Can my right hon. Friend give some assurance to the tens of thousands of employees who are worried about their jobs as contracts on Hinkley Point come to an end and there is potentially a lengthy gap before the funding model for Sizewell C is agreed?
Anne-Marie Trevelyan
My hon. Friend is right that there was a long gap in respect of investment in UK, but I am pleased that the Prime Minister’s leadership has reset that. We are working closely with industry and the skills bodies to make sure that as we grow our nuclear industry again, we better understand the skills requirements and challenges faced by the industry. EDF’s latest estimate suggests that the number of people working on the Hinkley project will peak at around 8,500. That is a fantastic local employment story and, given EDF’s plans to replicate HPC at its next project, Sizewell C in Suffolk, we expect to see employment benefits transfer to that project, creating thousands of jobs in that local area.
Stephen Morgan (Portsmouth South) (Lab)
Caroline Lucas (Brighton, Pavilion) (Green)
The Minister for Business, Energy and Clean Growth (Anne-Marie Trevelyan)
The independent Climate Change Committee agrees that the UK will need oil and gas as we deliver net zero by 2050. No other significant oil and gas producing nation matches the UK’s action on hydrocarbons in the economy, while our withdrawal of support for international fossil fuels, our North sea transition deal and our new checkpoint for licensing provide a global exemplar. Our climate compatibility checkpoint will also operate from 2022. Any reduction in domestic production would be replaced by increased imports.
Caroline Lucas [V]
The International Energy Agency’s report is clear that there can be no new investment in fossil fuel projects if the world is to meet its climate targets, yet the Government are set to approve the Cambo oilfield, which, thanks to a loophole, will not even be subject to its derisory climate checkpoint because the original licence was granted over a decade ago. Is it really the Minister’s understanding that this new North sea oil project will not add to global heating because of the date on the original licence? Will the Government think again about approving this oil project when they are meant to be showing local leadership ahead of COP26, or, as with the Cumbria coalmine, are they waiting for the US climate envoy to intervene instead?
Anne-Marie Trevelyan
The checkpoint will apply to all future licence rounds. Those projects already licensed are already accounted for in our projections for future oil and gas production. Projects such as Cambo are already licensed and are going through normal regulatory processes. Estimated emissions from all the existing licences are already accounted for in our forward projections.
Helen Hayes (Dulwich and West Norwood) (Lab)
The Minister for Business, Energy and Clean Growth (Anne-Marie Trevelyan)
Solar is key to the Government’s strategy for low-cost decarbonisation of the energy sector, and we will need sustained growth in capacity over the next decade as we move to net zero. It already accounts for 28% of installed renewable capacity in the UK. Large-scale solar photovoltaic projects are eligible to compete in the next contracts for difference allocation round in December this year. The Government also support rooftop solar through the smart export guarantee and energy efficiency schemes.
Helen Hayes
Community energy is vitally important in delivering renewable energy and engaging communities in contributing to net zero, but the sector has suffered since the Government cancelled the urban community energy fund in 2016 and excluded it from the social investment tax relief in 2017. This evening I am meeting Sustainable Energy 24 in my constituency, which is working hard to deliver new solar installations and engage our local communities, despite the Government’s lack of support. Will the Minister commit to meaningful support for community energy?
Anne-Marie Trevelyan
We are absolutely supportive of community energy. The £10 million rural community energy fund provides grant funding to help communities with the up-front costs of project development. We have also funded dedicated officers at five local energy hubs to provide one-to-one support. We intend to set out our future plans for community energy in the forthcoming net zero strategy.
Steve Brine (Winchester) (Con)
The Minister for Business, Energy and Clean Growth (Anne-Marie Trevelyan)
I will pass on your displeasure, Mr Speaker. I had some very interesting answers to share with my hon. Friends, so I am as disappointed as you. Our 10-point plan lays the foundation for the transition to net zero, with key commitments and action including in offshore wind, zero-emission vehicles and building our green economy. Ahead of COP26, we will also publish a comprehensive net zero strategy. It will set out the Government’s vision for transitioning to a net zero economy, making the most of new growth and employment opportunities across the UK.
Catherine West
May I press the Minister on the Aquind scheme, in which I believe she may have an interest that she needs to declare? It was raised by my hon. Friend the Member for Southampton, Test (Dr Whitehead). How many green jobs will be provided by the proposed scheme and what national security assessment has been carried out, given that the project is sponsored by an oligarch who has donated £1 million to the Conservative party?
Anne-Marie Trevelyan
I am unable to answer any of the hon. Lady’s questions, because I have recused myself from all matters to do with the Aquind interconnector, because Northumberland Conservatives received some funds from one of the owners of the company.
Steve Brine
The retrofitting of existing housing stock has to be a key component of our net zero drive. We have had the green deal and we have had the green homes grant. I think the most diplomatic way of putting it is that neither has realised their potential. Can I ask the Minister what comes next and when we might have sight of that?
Anne-Marie Trevelyan
The Government are continuing to fund a number of schemes as part of our commitment to retrofit homes in order to cut energy bills for the poorest households and make them greener on that path to net zero. The green homes grant local authority delivery scheme, which is supporting projects to install energy efficiency measures for low-income households, has already provided £500 million to local authorities and low-income households across England. That is being delivered up to the end of this year. In June this year, we launched the sustainable warmth competition, enabling local authorities to apply for further funding under the £200 million local authority delivery phase 3 scheme.
John Penrose (Weston-super-Mare) (Con)
Paul Holmes (Eastleigh) (Con)
The Minister for Business, Energy and Clean Growth (Anne-Marie Trevelyan)
After a very long and difficult year, things are looking up. Our economy is in better health than many had predicted, and the vaccine roll- out continues apace. While some are keen to talk down Britain, across the economy optimism is returning. Last week, Nissan and Envision announced a £1 billion investment to create the UK’s largest gigafactory, creating 1,600 new jobs in Sunderland and 4,500 more in the supply chain. Today, Stellantis has announced over £100 million of investment at its Vauxhall plant in Ellesmere Port, which is to become the first mass-volume, fully battery-electric vehicle plant in Europe. This will safeguard the future of the site and its supply chain for the next decade. These are both huge votes of confidence in the UK post Brexit, and show our green industrial revolution in action. With COP26 fast approaching, the Secretary of State and I will continue to drive forward the Prime Minister’s 10-point plan—growing our economy, levelling up the country and, of course, tackling emissions.
Paul Holmes [V]
I welcome the Secretary of State’s announcement last week that he is bringing forward the date to remove unabated coal from the UK’s energy mix by a whole year to 2024. Does my right hon. Friend agree that this shows how the UK is leading the world in consigning coal power to the history books, and showing that we are serious about decarbonising our power system so that we can meet our ambitious, world-leading climate targets?
Anne-Marie Trevelyan
I fully agree with my hon. Friend. Closing Britain’s remaining coal units by 2024 will mean that we have reduced coal’s share of our electricity supply from a third to zero in only 10 years. This is a huge achievement that reinforces our record on climate action.
Edward Miliband (Doncaster North) (Lab)
As my hon. Friend the Member for Greenwich and Woolwich (Matthew Pennycook) said earlier, the Climate Change Committee’s report card on the Government two weeks ago was devastating:
“This defining year for the UK’s climate credentials has been marred by uncertainty and delay”.
The Climate Change Committee says that
“the policy is just not there”,
and:
“We continue to blunder into high-carbon choices.”
The chair, Lord Deben, when asked to give the Government marks out of 10 for policy, said “somewhere below four”. On any measure, these are failing grades. Who does the Minister hold responsible?
Anne-Marie Trevelyan
As we are world-leading—and, like a number of world leaders, I think Mark Carney stated at a Select Committee yesterday that we are doing as well as anybody else across the planet—I must respectfully disagree with the right hon. Gentleman, because I think we really are making huge progress. The policy that is rolling out is rolling out at incredible pace. Businesses—and I am hugely impressed—are leaning in so hard to help as their contribution to the decarbonisation challenges we face. As we move towards the net zero strategy, he will be able to see the holistic approach we are taking, which will ensure that all of us who are going to help to solve that will meet the challenge.
Edward Miliband
I think that is what we call the “dog ate my homework” excuse, and this is where the problem lies. When it comes to investment in a green recovery, the UK Government’s plans per head of population are less than a third of Germany, a quarter of France and just 6% of the US. That is why the Climate Change Committee says that we are just one fifth of the way to meeting our targets in terms of policy. Is it not the truth that, because the Government are not matching their grand rhetoric with public investment at scale, they are failing to tackle the biggest long-term threat our country faces?
Anne-Marie Trevelyan
We are one fifth of the way. If this is a journey to net zero in 2050, we have put into law—in fact, I did so just two weeks ago—carbon budget 6, which has brought forward the challenge we face to decarbonise our power industry by 15 years. We are literally world-leading in doing this, and other countries are talking to me day by day in an effort to help them follow the path we are taking and to make sure that we all do our part to meet net zero. This is not only about the UK; this is of course a global challenge, and the work my right hon. Friend the COP President-Designate is doing to help drive that across the world is critically important to its success.
Nickie Aiken (Cities of London and Westminster) (Con)
Alex Cunningham (Stockton North) (Lab)
Anne-Marie Trevelyan
As the hon. Gentleman will know, the process is in full swing and we will make an announcement before too long about those first clusters, and who will be able to lead in the carbon capture, utilisation and storage programme. The sixth carbon budget means that we have brought in the challenge of getting to grips with aviation and shipping fuels, and the Department for Transport is focusing on how that will be part of the net zero strategy.
Bob Blackman (Harrow East) (Con) [V]
Anne-Marie Trevelyan
The Government are committed to new nuclear power, as we set out in the Energy White Paper last year. We have entered into negotiations with the developers of Sizewell C to consider the financing, and to set to building that as the next one after Hinkley Point C. We have committed £385 million for developing advanced nuclear jobs, including small modular reactors, for deployment in the 2030s.
Mary Glindon (North Tyneside) (Lab)
Anne-Marie Trevelyan
As I mentioned in an earlier answer, I met a number of trustees a few weeks ago and we discussed a number of issues in detail. I left them with a number of issues to go away and consider. The proposition as it currently stands is one that the Government do not wish to take forward, but I have asked the trustees to come back to me once they have considered the questions we discussed.
Mark Eastwood (Dewsbury) (Con)
Grahame Morris (Easington) (Lab)
Anne-Marie Trevelyan
That fund—one might describe it as a backstop—is there for support if there is a need to increase pensions. I am pleased to continue discussions with the trustees to look at potential solutions for the years ahead as the number of miners reduces and the investment pot needs to be looked at differently.
Damien Moore (Southport) (Con)
Wera Hobhouse (Bath) (LD) [V]
Anne-Marie Trevelyan
As I said earlier, we already have a number of funds working in community energy. I am happy to meet the hon. Lady at any point to discuss her perspective.
Alan Brown (Kilmarnock and Loudoun) (SNP)
Yet again, we have heard about the need for a nuclear baseload. The reality is that Dungeness nuclear power station shut down seven years early and 75% of the existing nuclear fleet will be offline before Hinkley Point C can be up and running. Will the Minister tell me whether the nuclear baseload is a myth or when the lights will be getting turned out?
Anne-Marie Trevelyan
We continue to invest in new nuclear, as I set out earlier, and we are working to grow our renewable energies at an extraordinary pace. We are world leading, with our offshore wind capacity already at 29% of the total, and we will continue to grow that from 10 GW to 40 GW by 2030.
Catherine West (Hornsey and Wood Green) (Lab)
On a point of order, Mr Speaker.
Financial Assistance to Industry
Anne-Marie Trevelyan Excerpts(2 years, 9 months ago)
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The Chair
Before we begin, I remind Members to observe social distancing and to sit only in places that are clearly marked. I also remind them that Mr Speaker has stated that masks should be worn in Committee. Hansard would be most grateful if Members sent their speaking notes by email to hansardnotes@parliament.uk.
We are debating for up to 90 minutes the content of the resolution that the House of Commons itself will be asked to pass without debate once the text of the resolution has been reported from this Committee.
The Minister for Business, Energy and Clean Growth (Anne-Marie Trevelyan)
I beg to move,
That this House authorises the Secretary of State to undertake to pay, and to pay by way of financial assistance under section 8 of the Industrial Development Act 1982, grants to businesses to support the development of an electric vehicle supply chain in the UK, up to a limit of £388 million over four years.
The Prime Minister’s 10-point plan sets out our ambition to accelerate the shift to zero-emission vehicles. That will play an important role in driving down carbon dioxide emissions for net zero and improving the air quality in our cities and towns.
The UK is home to a successful automotive sector, which has one of the highest productivity levels of the major European automotive-producing nations. Currently, 149,000 people are employed in automotive manufacturing, with an estimated 278,000 jobs supported by the sector in the wider economy. Those jobs are spread across the UK, mostly outside London and the south-east, with significant clusters of activity in the west midlands, the north-east and Wales.
Globally, the automotive sector is going through a once-in-a-lifetime transformation and significant investment will be required to support the shift to electric vehicles. The UK needs to establish supply chains to source critical components and to continue to develop the new technology to deliver the transition. Investing in such areas offers a huge opportunity for the creation of new highly skilled jobs as we build back better following the significant challenges that the pandemic has posed for the automotive industry. There is significant opportunity for the UK to capture a share of the investment needed to make that happen, building on existing strengths in automotive research, development and manufacturing, and on wider capabilities such as chemicals, materials processing and refining, and electronics.
Without the new investment, there is a real risk that the sector will fall into decline, causing irreversible loss of jobs and activity in our industrial heartland. To maintain and grow our automotive sector, our aim is to create an internationally competitive electric-vehicle supply chain right here in the UK. Government have developed the automotive transformation fund, which supports both R&D and capital investment to focus on the commercialisation of strategically important technologies to enable production at scale. Securing investment in battery manufacturing and gigafactories is a priority, but the fund also targets investment in the upstream battery supply chain, motors, drives, power electronics and fuel cells.
The specific technologies and processes being targeted are based on extensive research into the vehicle value change, coupled with an analysis of UK strengths, capabilities and market trends. Demand for those key components is increasing rapidly as the transition to electric vehicles accelerates. Increasing production capacity will therefore help UK-based vehicle manufacturers to secure the supplies that they need. The ability to source from suppliers in the UK is also central to enabling UK businesses to meet the rules-of-origin requirements and to continue to benefit from tariff-free exports under the UK’s free trade agreements with important export markets. That will safeguard existing jobs in the automotive supply chain and create new ones, helping our established incumbent businesses to transform and attracting new investors.
Securing such investment will take concerted effort in the face of global competition. That is why the Government and their delivery partner, the Advanced Propulsion Centre, engage proactively with potential investors through the automotive transformation fund. Engagement is backed by extensive research into the UK’s competitive strengths and an understanding of key considerations for investors. The team also provides support and information on, for example, site availability, planning and energy supply; facilitates contact with other relevant stakeholders; and makes introductions to other businesses. We speak to vehicle manufacturers to better understand their requirements and which aspects of their supply chain they would most like to onshore. We use that information to inform our targeting and discussions with investors.
The automotive transformation fund is critical to our efforts to support the transformation of the automotive sector to a zero-emissions future. We are determined to ensure that the UK continues to be one of the most competitive locations in the world for automotive manufacturing. I commend the motion to the Committee.
Anne-Marie Trevelyan
May I thank the hon. Lady for her valuable contribution to the debate? On her last point, I completely agree on women-led businesses and how we make sure that we maximise all that latent potential. The green jobs taskforce, which has been running over the last few months, is about to publish its recommendations, and an area that I have discussed with its members at some length is the fact that they are not maximising the use of all the human capital available to them in terms of women. I hope very much that they will be able to put forward suggestions on how they will look to expand their staffing groups to make sure that they do, because I think there is room for much improvement in many sectors. I look forward to reading the report shortly.
To answer the point the hon. Lady made, the Prime Minister set out his 10-point plan last year with the £1 billion investment for the automotive transformation fund, of which £500 million is so far in the system—if that is the right way to describe it—and will set out in due course how the second half of that committed fund will roll out. We are committed to the continued success of the UK automotive sector. We are the fifth largest European car producer and we have one of the highest productivity levels among major European automotive-producing nations.
Investment in the automotive sector was £7.2 billion in 2019, which is nearly 22% of UK manufacturing investment, and I was thrilled to see Nissan’s commitment just last week to its move to electric vehicles and the work it is doing. It wants to stay because it knows—I speak as a north-east MP who is entirely biased—that its north-east workforce is fantastic, and the company would not in any way want to move away from that. On a personal level—I apologise—I was thrilled by that announcement, because many of my constituents work at Nissan, and this will expand not only that workforce and the vehicles they produce but the wider supply chain through the battery factory. It is very exciting news.
The automotive transformation fund will continue to be a really important programme to help us with the steadfast commitment that we have made to support the sector through its transition to electrification, and the intervention that we are discussing today will help to lay the foundations for that competitive and sustainable industry. We will continue to show our support as a Government to the automotive sector as it builds back better following the disruption caused by the covid pandemic last year, giving businesses the confidence to invest and innovate, creating skilled, well-paid gender-balanced—I hope—jobs across the country, and enabling our green industrial revolution to make progress at pace.
Question put and agreed to.