Business, Energy and Industrial Strategy Questions

3rd March 2020

Alok Sharma answers questions from MPs to his Department, the Department of Business, Energy and Industrial Strategy.

Rt Hon Alok Sharma MP speaking at the Dispatch Box, Mar 2020, BEIS Questions

Oral Answers to Questions

Business, Energy and Industrial Strategy

The Secretary of State was asked—

Low-Carbon Industries

1. What steps he is taking to support UK-based low-carbon industries. [901041]

Supporting low-carbon industries is central to my Department’s mission to deliver our net zero target. We are backing our ambition with action. Since 2012, coal use on the grid has fallen from 40% to less than 3% in 2019, and renewable electricity generation has quadrupled since 2010, with low-carbon electricity providing more than 50% of our total energy needs.

In 2018, investment in acquisitions in the UK’s solar dropped to just £0.3 billion, from £1.6 billion in 2015. Should the Government not be doing more to support renewable power, in the light of the net zero target—which the Secretary of State mentioned—and the closure of the feed-in tariff, especially given that German, Italian and Spanish companies are now investing over six times more than UK companies in low-carbon technologies?

I am delighted that the hon. Lady has raised the issue of solar power, because, as she will know, solar photovoltaics is a UK success story. There has been rapid deployment over the past eight years, and more than 99% of the UK’s solar PV capacity has been deployed since May 2010. The latest figures indicate that we now have more than 1 million solar installations, or 13.4 GW, of capacity installed.

In Cornwall we have some exciting new emerging industries such as geothermal energy and lithium extraction. How is my right hon. Friend encouraging those industries to produce green energy in the future?

We are putting significant funds behind the renewables sector, and, as my hon. Friend will know, we are committed to increasing our research and development spending to 2.4% of GDP by 2027. I want the UK to be a science and R&D superpower, and that is what we are engaged in.

Why are the Government so opposed to onshore wind energy generation?

The hon. Gentleman may have missed yesterday’s announcement about the fourth contracts for difference allocation round, but if he reads that announcement, he will see the points that we have made. The proposals that we have presented are there to help the UK achieve its 2015 net zero ambition.

I am grateful to my right hon. Friend for his support for the onshore wind sector. What support are the Government providing to advance the hydrogen economy, and to decarbonise the hard to abate sectors?

My hon. Friend makes an important point. Hydrogen can, of course, play a key role in net zero efforts, alongside electricity. My Department is investing in innovation, with up to £121 million supporting a range of projects to explore and develop the potential of low-carbon hydrogen.

One of the UK’s great industrial success stories in recent decades has been the automotive industry. What discussions does the Secretary of State plan to have with the industry to help ensure that the UK is best placed to make the transition from internal combustion engines to electric vehicles?

Within days of taking office I spoke to our major automotive manufacturers, and I have had meetings with a number of them. However, the right hon. Gentleman is absolutely right. We want to encourage electric vehicles, and we are also committed to securing investment for a UK gigafactory. Last year we announced up to £1 billion of new money to support R&D and supply chains for electric vehicles.

Research and Development Investment

2. What steps he is taking to increase investment in research and development. [901042]

11. What steps he is taking to increase investment in research and development. [901051]

13. What steps he is taking to increase investment in research and development. [901053]

The Government are already increasing public spending on research and development by £7 billion over five years, the biggest increase in public funding for R&D on record. Every pound of public expenditure on R&D leverages a further £1.40 of additional private investment, generating even greater returns for the UK.

Given that nearly 50% of the core science budget currently goes to just three cities in southern England, can the Secretary of State assure me that the increase in R&D funding will do more to favour the regions outside the south, so that in future both my city of York and other regional hubs across Yorkshire, such as Leeds and Hull, will receive their fair share for the purposes of research and innovation?

I know that my hon. Friend is hugely supportive of R&D, and that last month he opened the Institute of Technology at York College. I absolutely agree that that is part of our levelling-up agenda. We want to support centres of excellence across the country. In December last year UK Research and Innovation awarded £24 million to the University of York for a quantum communications hub, and we will set out our ambitious play strategy for R&D in the second half of this year.

Rothamsted Research in my constituency is a world-leading agricultural research centre, and we have made huge strides in commercialising that scientific knowledge, working with agritech start-ups. I am working with Rothamsted to build a new venture capital fund for agritech, working with those start-ups to incubate and develop them so that we can improve this facility, not just for Rothamsted and the region but for the whole country. Will the Secretary of State provide Government support for this work and come to see the work that we are doing at Rothamsted?

I am delighted that my hon. Friend is showing his characteristic commitment to innovation by supporting an agritech venture capital fund. As he notes, Rothamsted has a world-renowned reputation for agricultural research, and that is why UKRI has awarded £3.4 million to determine protein abundance in plants at that research institute. Either I or the Science Minister—the Under-Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend the Member for Derby North (Amanda Solloway)—would be happy to meet him to discuss how the Government can support his proposals.

I also welcome the emphasis that the Government are placing on research and development. Will my right hon. Friend tell me what further action is being taken on the proposal for a UK advanced research projects agency, following the departmental meeting last year?

My hon. Friend raises an important point. The UK is ranked fifth in the global innovation index, and our strengths in R&D mean that we are well placed to develop a new funding body to specialise in high-risk, high-reward projects. As I have said, I am absolutely determined that the UK should be a global science superpower, and my Department is making good progress on a UK advanced research projects agency. We are engaging with a wide range of researchers and innovators, and we will set out further plans in due course.

I welcome the Secretary of State and the Science Minister to their places. Science is critical to our national prosperity, and it is important that it should be led by them, rather than by the misfit master of Downing Street, so can the Secretary of State clarify the confusing statement from No. 10 on the European research programme? International collaboration is the heartbeat of research and development. For every £1 we put into the European Union programme, we got £1.30 back, and such funding is essential if we are to retain our place as a global science superpower, so will the Secretary of State boost UK science by confirming that we will be going for full associate membership?

Of course I want the UK to be a science superpower, and we have set out our views on expanding the R&D budget. On Europe, our EU negotiating objectives are very clear: the UK will consider participation in Horizon Europe and Euratom, but this will be part of the wider negotiations.

The Royal College of Physicians has found that something like 64,000 people a year die prematurely as a result of unclean air at a cost of some £20 billion. In addition to continuing the research and development into electric cars, will the Secretary of State lobby the Chancellor and the Environment Secretary to continue the grant of £3,500 for clean cars, so that we can have an enforceable regime for air quality and a platform for research and development and for exports in the green industries, particularly in relation to sustainable transport?

The hon. Gentleman raises an important point. We currently have 460,000 green jobs in this country, and we want to push that to 2 million. I would be happy to meet him to discuss the specific point that he has raised.

Across the whole of the United Kingdom of Great Britain and Northern Ireland, universities have played a critical role in research and development. What help will the Secretary of State give to Queen’s University and Ulster University in Belfast, as well as to the Greenmount Agricultural College, so that they can apply for funding to help research and development across the whole of the United Kingdom?

Of course, UKRI provides funding for a whole range of universities. Again, if the hon. Gentleman has specific ideas for projects, perhaps he would come forward with them.

It is possible to build a house that costs nothing to heat, but that is not happening at scale at the moment. Does my right hon. Friend consider it part of his Department’s responsibilities to support research into making this more widespread, which would be hugely beneficial for the planet?

I know that my hon. Friend is an authority on the house building sector, and I had an opportunity to work with him on these issues when I was the Housing and Planning Minister. He raises an important point. We know that 15% of emissions are from housing, and we are looking to see how we can bring that down as part of the net zero target.

COP26

8. What steps he has taken to prepare for COP26. [901048]

I am delighted to have been appointed COP President. I have already held discussions with former COP Presidents, including Paris COP President Laurent Fabius. I met, among others, the UN Deputy Secretary General Amina Mohammed and Patricia Espinosa at the United Nations Framework Convention on Climate Change. Last week, together with the Prime Minister’s COP26 climate finance adviser, Mark Carney, I launched the COP26 finance strategy. My officials and I are working at pace to deliver a successful summit.

COP26 will be the most critical talks since Paris, yet preparations so far have been beset by chaos. What response can the Minister provide to the former COP President who says that this Government are presiding over “a huge lack of leadership” on the issue. The Prime Minister has admitted to her that he does not even understand climate change. Does the Minister acknowledge the embarrassing lack of credibility and competence that the Prime Minister has shown on COP26 preparations?

I thank the former COP President for her work. The hon. Lady talks about the Prime Minister’s leadership. I can assure Members that when we were at the UN General Assembly in September, there was a huge amount of positivity around his leadership in doubling our International Climate Finance commitment. She will also know that last month the Prime Minister launched the Year of Climate Action. He is absolutely leading on this issue from the front, and the rest of us are supporting him. Let me tell her that we are absolutely determined to make sure that COP26 is a success, not just for the UK but because it matters to the whole world.

Every country has to submit its contribution to climate action before COP26 meets. Why is the Secretary of State preparing the UK’s contribution statement on the basis of the fifth carbon budget, which works towards a target of only 80% reduction in greenhouse gas emissions by 2050, when this House has determined that the target to be met should be net zero by 2050?

We met the first two carbon budgets, and we are on track to meet the third. Of course, I recognise the need for further action: 2020 will be a year of climate action, as I have said, and we have new plans to decarbonise key sectors in industry.

I congratulate the Department on its far-sighted announcement yesterday that sets the tone for COP26 by allowing onshore wind and solar projects, which have local support, to bid for funding. The announcement also floated a further pot for less developed technologies, such as tidal stream and wave, some of which the Energy Minister and I met last week. Does my right hon. Friend agree that we should pursue this opportunity to develop diverse sources of green energy and look closely at the innovative tax credit proposal, innovation power purchase agreement, to help some of these technologies get off the ground?

I make the general point that innovation is vital in all sectors of industry, but particularly in the renewables sector. As my hon. Friend will know, the proposal that we set out will help the UK to achieve its 2050 net zero ambition. Ultimately, this is about achieving value for money by driving further cost reductions in renewable electricity.

I welcome the Secretary of State and his new ministerial team to their places. The Business, Energy and Industrial Strategy Committee looks forward to taking evidence from them, and I am sure that they look forward to that as well.

May I follow up on the question from my hon. Friend the Member for Southampton, Test (Dr Whitehead) about our fourth and fifth carbon budgets? Those carbon budgets are premised on achieving an 80% reduction in carbon emissions, yet this House has unanimously passed legislation to achieve net zero. It is neither coherent, nor showing leadership, for our fourth and fifth carbon budgets to be based on an outdated objective that this House has rejected. Can the Secretary of State confirm that we will be updating our fourth and fifth carbon budgets—and, crucially, that we will meet them?

I thank the hon. Lady for welcoming my ministerial team and me. Of course I look forward to coming before her Select Committee. Let me be absolutely clear: we are one of the first countries in the world to have legislated for a net zero target, and we have demonstrated our global leadership. We have met the first two carbon budgets and are on track to meet the third, but I take her point.

I agree that one of the best ways of preparing for COP26 is bringing forward the new contracts for difference auctions for onshore wind and solar, which will help us to achieve net zero. Could we also take this opportunity to demonstrate to the hard-working taxpayers of Rother Valley and across the country that we can reduce their bills by going green. Can we make it a key part of COP26 to show that going green is better value for those hard-working people?

My hon. Friend makes a very important point. Offshore wind prices have dropped by over two thirds between 2015 and 2019 because of the CfD auctions. Going green is positive for the economy: GDP has grown by 75% since 1990, yet we have also managed to reduce emissions by 43%.

Topical Questions

T1. If he will make a statement on his departmental responsibilities. [901066]

My Department is leading the green revolution, working towards a target of net zero emissions by 2050. We are unleashing innovation and making the UK the best place in the world to start and grow a business. We are creating better corporate governance, improving employment protections and working practices, and contributing to the UK’s labour market strategy. Our preparations for COP26 are gathering pace, ramping up momentum towards a global zero carbon economy.

The recent BEIS Committee report was clear that the UK could not credibly adopt a net zero emissions target unless it invests in carbon capture and undersea storage. Does the Secretary of State plan to extend the Tory manifesto’s proposals on CCUS plants to Scotland so that we can create and deliver a clean growth structure?

I certainly agree that CCUS is going to be essential to successfully tackling climate change. The hon. Gentleman talks about innovation funding for Scotland. I can tell him that £4.8 million is supporting the development of Project Acorn, which is a CCUS project based in north-east Scotland.

Coronavirus is impacting on every aspect of work, from the cost to employers to the cost to workers. The Health Secretary has said that employers should view isolation as sick leave, but the law does not state that. Even if that was so, those on zero-hours contracts and in insecure work are unlikely to have sickness cover, and statutory sick pay does not pay for the first three days, meaning that those with little means have to choose between health and hardship—an issue I raised with the Health Minister a month ago. So what discussions has the Business Secretary had with Cabinet colleagues to ensure that workers are financially protected to stop the risk of spreading coronavirus?

The hon. Lady is right: this is a very serious issue, which affects individuals and challenges businesses. Those who do not qualify for statutory sick pay, including those who are self-employed, may be able to claim universal credit or new-style employment and support allowance.

T2. In Scotland, 204 free cash machines closed last year. Alongside access to local banks and post office services being cut, that is having a hugely detrimental impact on high streets and small businesses in our towns, which are already struggling. Will the Secretary of State ensure that the Government act now and introduce legislation to protect access to cash, local banking and post office services on our high streets, so that our small businesses and high streets can survive and thrive? [901067]

We are committed to supporting the retail sector, and we are working closely with the industry through the Retail Sector Council. As the Under-Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend the Member for Sutton and Cheam (Paul Scully), noted in reply to a question earlier, we are supporting high streets with the £1 billion future high streets fund.

T6. Both I and Andy Street are campaigning for a gigafactory to be located in the urban west midlands, close to the heart of car manufacturing. The factory would make the region a world leader in green vehicle technology. Will the Minister support that vision, and what steps can we take to ensure there is further investment in green technology in the west midlands? [901072]

We are committed to securing investment for a UK gigafactory to support electrical vehicle manufacturing. Indeed, last week, I met Andy Street and Ralf Speth, who is the chief executive officer of Jaguar Land Rover, to discuss their thoughts on this matter. We recognise the strength of the west midlands, where £138 million has already been invested in the UK Battery Industrialisation Centre scheduled to open near Coventry this summer.

T4. [R] As chair of the all-party parliamentary group for disability, I have been receiving representations from entrepreneurs with disabilities who state that they face many more challenges in accessing business loans. Will the Secretary of State speak with colleagues in the Treasury and make sure that there is a strategy to address that, so that a truly inclusive economy can be achieved? [901069]

The hon. Lady talks about support for business. We provide that through small start-up loans and the British Business Bank, but I or one of my colleagues would be happy to have a discussion with her on the specific issue she raises.

T7. Are the current bunch of Ministers crusading Conservatives? With 73% of small businesses reporting that they are over-regulated, do Ministers wake up every day thinking about how they can reduce taxation and regulation on business—particularly small businesses? In other words, do they accept that it is only with entrepreneurs that we can create wealth in this society? [901073]

My right hon. Friend speaks from experience, having been a business Minister in the past. We are absolutely committed to making sure that we reduce burdensome regulation and red tape, but we need to make sure that we stick with the protections that are there for employees.

T9. Following the conviction of two ticket touts in Leeds last week for fraud, what discussions has the Minister had with his colleagues in the Department for Digital, Culture, Media and Sport about including financial harm in the online harms White Paper? [901075]

I will make sure that my colleagues and I have the discussion. Perhaps the hon. Lady would like to share with my office the details of that case.

Nearly half the core research and development budget is spent in just three cities—Oxford, Cambridge and London—and yet for every pound of private investment that such spending leverages in London, we get £3 in the east midlands and £5 in the west midlands. Does the Minister agree that, if we are going to level up, we need a fairer division of spending on R&D?

As I said in answer to an earlier question, I absolutely want to see levelling up, and I want to see money put into centres of excellence around the country.

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