Business, Energy and Industrial Strategy: Departmental Spending

Matthew Pennycook Excerpts

Tuesday 7th July 2020 Commons Chamber

[Matthew Pennycook (Greenwich and Woolwich) (Lab)]

It is a real pleasure to take part in what has been a good debate. I commend the Chair of the Business, Energy and Industrial Strategy Committee, my hon. Friend the Member for Bristol North West (Darren Jones), for his characteristically thoughtful and articulate opening remarks. The quality of my hon. Friend’s contribution was matched by many others that followed, and I mention in particular the forceful and powerful speeches made by my hon. Friends the Members for Bradford South (Judith Cummins) and for Newcastle upon Tyne North (Catherine McKinnell). Given the toll that the pandemic has taken on our economy, it is right that they and a number of other Members chose to focus their remarks on the measures introduced by the Department to support businesses and individuals through the lockdown, and on what still needs to be done to address the gaps and deficiencies that exist.

[Justin Madders (Ellesmere Port and Neston) (Lab)]

On that point, my hon. Friend will be aware that Airbus in Broughton announced 1,400 redundancies last week. Does he agree that when we see countries such as France and Germany offering multibillion-pound support for the aerospace industry, we too need a sector-specific strategy for the aerospace sector?

[Matthew Pennycook]

Absolutely. My hon. Friend makes a very good point: other countries have done it and we have been calling for sector-specific packages for those in most need. The Government have done it for steel; let us get on and do it for aerospace and the other sectors that need additional support.

A number of other Members mentioned the environment and climate emergency. Given the primacy of the climate threat over the long term and BEIS’s lead role in ensuring that our country plays its part in tackling it, I want to use the time that I have to focus on the Department’s record in driving progress towards the net zero target for which we legislated just over a year ago.

Although 2050 is too late, we can continue to take pride in the fact that we were the first major economy to adopt a legally binding target to cut greenhouse gas emissions to zero. But setting a target is one thing; hitting it is quite another. As things stand, not only are the Government failing to do anything like enough to meet our legally binding 2050 target, but they are not even on track to meet the less ambitious target that preceded it. I am afraid Ministers give every impression of being entirely relaxed about that fact. How else do we explain that over the past 12 months, while basking in the virtuous afterglow of legislating for net zero, the Government have done precious little to set us on the road to carbon neutrality?

The Committee on Climate Change put it in characteristically diplomatic terms when it stated in a recent annual progress report that last year

“was not the year of policy progress that the Committee called for in 2019.”

The charge is irrefutable.

According to the CCC, last year the Government failed on 14 of the 21 progress indicators, fell further behind in many areas, and met only two of 31 key policy milestones. It is simply not good enough.

The human, economic and social cost of the coronavirus crisis has been severe, but as we turn our attention to rebuilding the Government have a once-in-a-generation opportunity to accelerate the decarbonisation of our economy and make up lost ground, and it is imperative that they seize it. There have been some positive signs in recent weeks that suggest that the Government may recognise the force of this argument. Take the package on energy efficiency measures that was trailed yesterday. We believe that the amount allocated to social housing is woefully inadequate, we take issue with the fact that the private rented sector has been almost entirely overlooked, and we have concerns about whether it will be possible to deliver in the seven-month window provided, but the investment is welcome. However, it has to be the first step, rather than the last word, when it comes to energy efficiency; the start of a long-term, year-on-year programme of support rather than merely a one-off annual boost. The same principle must apply in other areas.

All of which is to say that when it comes to judging the impact of tomorrow’s statement and the autumn spending review on our decarbonisation efforts, what matters is not only the scale and nature of the stimulus, but whether the measures to be announced form part of a co-ordinated long-term approach and are interwoven with the policy change required to drive emissions reductions through the remainder of this crucial decade.

If we are to get on track for net zero, the impetus ultimately has to come from the centre, but for obvious reasons BEIS has a crucial role to play in supporting the centre to set that strategic direction on decarbonisation and direct its spending appropriately to that end. Yet in several crucial areas the Department is still failing to provide the clear, stable and well-designed policy framework that businesses and investors require.

With that in mind, I will finish by putting a series of specific questions on the record, in the hope that the Minister may be able to answer at least some of them in his response. First, for the past year, as we have heard, we have been repeatedly promised that the energy White Paper, the aim of which is to provide much-needed certainty to business on the future energy system, is imminent, yet there is no indication in the estimates we are debating today that the Department is preparing for anything other than business as usual. Are we therefore to assume that the White Paper will be further delayed, or is it still the Department’s intention to publish it before the end of this year and then ask the Treasury for the necessary additional resources at a later date?

Secondly, when it comes to the decarbonisation of heat, the estimates merely appear to contain a broadly static commitment to expenditure on the renewable heat incentive. Leaving aside whether funds allocated to the RHI will be rolled over to underpin other proposed low-carbon heat schemes, does the Minister agree that the total resources currently allocated by the Department to heat are nowhere near enough to respond to the challenge presented by this most difficult of sectors?

Thirdly, taking the estimates in the round, is the Minister not uncomfortable about the apparent disparity between the lofty ambitions set out by his Department when it comes to low-carbon energy, particularly in the clean growth plan of 2017, and the focus of day-to-day spending by the Department on older, high-carbon sources?

Fourthly, and finally, given the commitment to phase out coal from our energy system entirely by 2024, why has the application for a new open-cast mine at Highthorn in Northumberland not been dismissed out of hand by the Government?