Autumn Statement: BEIS Committee chief calls for green policy turnaround

EXCLUSIVE: The UK Government should use this week's Autumn Statement as an opportunity to reverse a downfall in green investment attractiveness by committing to a range of low-carbon projects such as tidal lagoons, carbon capture and storage (CCS) and offshore wind.

That’s the view of Iain Wright, chairman of the newly-formed Department for Business, Energy and Industrial Strategy (BEIS) Committee.

Speaking exclusively to edie following the launch of the Committee’s latest inquiry into the implications of Brexit on the UK’s energy sector, Hartlepool MP Wright noted the uncertainty felt by Britain’s green businesses since the EU Referendum.

Wright called on the new Chancellor Philip Hammond to allay investor fears by sending out a positive message about the green economy during his first budget speech on Wednesday (23 November).

“In the light of Brexit, when it comes to business in general, there is concern because there’s that uncertainty,” Wright said. “To what extent can the Government, through the Autumn Statement, provide the investment in order to ensure that investor confidence is improved?

“They could have a green tinge to set out clearly that, in light of Brexit, we’re going to have a very dynamic modern economy, and that we’re going to have a low-carbon economy at its heart.”

Brexit uncertainty was cited as a major reason for the UK’s recent all-time low ranking in EY’s table of the world’s most attractive renewable energy markets. Speaking about that report’s findings, Wright expressed his concerns but suggested that the Government could bring forward specific projects in order to send out “clear signals” to private investment.

“Part of the role for the Chancellor in the Autumn Statement is to try and put in place actions to prevent that reverse down the table and to put us back up into leading the green investing countries,” Wright said.

“I’d like to see tidal lagoons explored, I’d like to see carbon capture and storage (CCS) pursued. I’d like to see further investment into offshore wind.

“Green transport infrastructure would also send out signals that we’re going to have a productive economy and that economy is going to be based upon a decarbonised agenda.”

Rounded approach

Wright leads the BEIS Committee which recently assumed the role of the now-defunct Energy and Climate Change (ECC) watchdog. Despite the absence of climate change from the new department’s title, the Labour MP insists that the low-carbon agenda will be “front and centre” of the Committee’s role in scrutinising BEIS.

But the opportunity for this new business-related department to drive industrial climate action will only happen if the country’s new green ministers develop and maintain a strong backbone. For too long, DECC was viewed as a “hostage of the Treasury”, while just last week the Treasury was lambasted by MPs for failing to adequately factor in long-term sustainability risks into its decisions.

Wright said his new Committee will work closely with the Treasury, alongside other departments, to ensure Britain’s forthcoming Industrial Strategy can be implemented across all layers of Government.

“If you’re having an Industrial Strategy, you’ve got to have cross-governmental coordination and the Treasury has to be buy into this,” Wright said. “The Treasury can’t ride roughshod over all of that.

“I’m very keen to see that the Industrial Strategy isn’t just stuck within BEIS. That’s going to be ridiculous because you’re going to need co-ordination. In a strategic way, the Treasury has to be brought into it as well. If the Treasury is blocking progress on a whole range of aspects, how are you going to have embedded a better Industrial Strategy in Whitehall, let alone sending out a degree of confidence to industry, stakeholders and investors? That’s really important.

“I will be making sure that we can scrutinise what the Secretary of State [Greg Clark] does in this regard. There’s a certain degree of sense about having business and energy in a single department. Having that under one roof will bring a better degree of co-ordination. I’m keen to see that climate change isn’t degraded. It’s not in the title of the department, and I can see that can be driving a bit of concern. But I hope that the actions that the department produces – and this is where we will be key on scrutinising – is that energy and climate change is front and centre of what they do.”

Green transport drive

The Government will enter the Autumn Statement buoyed by last week’s ratification of the Paris Agreement, which Wright believes is a “big step” in the journey towards alleviating widespread investor concerns. But while the UK exhibits a strong presence on the international climate stage, big questions remain over the UK’s domestic low-carbon agenda.

The Conservative Government’s highly-criticised green policy decision-making includes significant subsidy cuts for onshore wind and solar panels and the removal of a £1bn fund to commercialise CCS in the UK, among a raft of other changes.

More recently, there have been signs of improvement in the light of outlined plans for a second Contracts for Difference (CfD) auction, and proposals to phase out unabated coal power generation by 2025. Nevertheless, there remains several areas of concern. For instance, the UK has been told it will miss transport targets unless “major policy improvements” are rapidly enforced, and Wright believes this is one area where a wider industrial strategy should be adopted across the Government to help the UK reach its 2020 decarbonisation targets.

“Transport is a really great opportunity for the Industrial Strategy and how that can be embedded through decarbonisation,” Wright said. “If the Government is pushing the electric vehicle agenda, making sure that they implement proper infrastructure for charging points, I think it’s very important that BEIS, alongside the Treasury, can work with other departments in areas where we have commercial opportunities. There’s ways that we can help business and also fulfil climate change responsibilities as well. Transport is a great place to do that.”

Business opportunities

The new BEIS department paves the way for businesses to form a role at the heart of its low-carbon strategic choices. Indeed, BEIS secretary Clark recently proclaimed “there is an opportunity for an upgrade” across British industry, to ensure the nation’s businesses are “fit for the future”.

The UK’s new business-related strategy was reflected in BEIS’ recent call for evidence paper which asked companies for advice on how to best develop technologies such as demand response and energy storage, and increase the uptake of electric vehicles. Wright believes the increased dialogue between Government and the private sector will help to accelerate the UK’s low-carbon transition.

“What I think is key is having a stable transition to a low-carbon economy,” Wright said. “If you go too fast, the economy will be disrupted. There could be risks and it could destabilise the economy. That could mean mass unemployment, people being left behind with poverty, I don’t think that’s the right approach. Go too slowly and attempting to tackle climate change is essentially worthless. You’ve got to get the balance right.

“That comes from having quite substantial private investment into the low-carbon transition. If you’re going to have private investment, you need investor confidence. You need businesses to be able to say that these are the opportunities and these are the things we need to do. We need to adjust some of the challenges, and these are some of the things we will be able to achieve. That’s why I do think that proper dialogue is hugely important.”

George Ogleby

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