BEIS Committee hears evidence from new Business Secretary and COP26 President

The Business, Energy and Industrial Strategy Committee today heard evidence from Alok Sharma, COP 26 President, and from Kwasi Kwarteng, the new Secretary of State, Department for Business, Energy and Industrial Strategy.

Although Mr Sharma gave evidence first, the following summary starts with Mr Kwarteng's evidence as this is deemed to include more points of relevance and interest. A full transcript will be sent as soon as it is available.

Darren Jones asked about how the gap could be bridged between the fourth and fifth carbon budget periods and the projections in the energy white paper. Kwasi Kwarteng said the white paper and the Prime Minister’s ten-point plan included measures that would enable the gap to be bridged. Legislation would be introduced in the summer to put into law the carbon budget six targets put forward by the CCC.

The Secretary of State agreed there was tension between the granting of permission for a coal mine in Cumbria and the government’s climate change ambitions. But he pointed out it was a local planning decision and sources of coking coal were still needed.

Replying to Philip Dunne, he said 2021 would be focussed on issues such as delivery of the ten-point plan and the target for hydrogen and wind power.

Richard Fuller asked about the estimated costs to the economy of the government’s plans. Mr Kwarteng said it was not possible to give a price to consumers. About £9.2 billion was committed to protecting the most vulnerable in society, but it was not possible to put a figure on the actual costs. Energy efficiency and better practices in the generation of power had to be taken into account. He was reluctant to put a figure on something that would happen over several years.

Mark Jenkinson asked about the decarbonisation of the power sector by 2050, which some called unambitious. The Secretary of State said the target was achievable and had to be realistic in relation to consumer bills. On financing of nuclear projects, he acknowledged that Hinkley Point C had had its problems, but was on target. Without pre-judging future decision, Sizewell C could be more efficient and less costly. Nuclear power would be needed to supply about 15% of our energy needs as we could not rely on renewable energy, which was intermittent. In reply to a later question by Alan Brown, he reminded the committee there would also be small modular reactors and advanced modular reactors.

Paul Howell asked about consumers and public engagement and the importance of explaining the development of new industries. Mr Kwarteng said this was a fundamental question. There was considerable engagement with the public. He referenced the campaigning in the last general election on the subject.

Jerome Mayhew asked about the impact of the energy white paper on the competitiveness of industry. The Secretary of State replied that BEIS and the government already gave huge support to industry in the effort to decarbonise. He said the EU as well as the UK was keen to talk about how to measure carbon border adjustments. On carbon leakage, not only would he be pushing the publication of the industrial decarbonisation strategy, but he would have regular discussions with industry bodies about helping them make the transition.

Alan Brown asked about renewable energy, including less mature sources such as wave and tidal. Mr Kwarteng was keen to promote those technologies in the auction process, perhaps at the end of the year. The ministerial responsibility group was looking at the cross-departmental impacts of things like the offshore wind ambition. As energy minister he had worked on the North Sea Transition Deal, previously called the Oil and Gas Sector Deal, and he hoped to deliver on the deal “very early this year.” This was way ahead of the manifesto commitment. He was also committed to promoting hydropower.

Further questions involved issues connected to Brexit. Mr Kwarteng said many of the problems involving freight at the borders had been exaggerated. He was also confident that problems involving movement of musicians and musical technicians would be overcome through negotiation.

On Covid, Darren Jones asked if there would be a refresh of support for businesses in the upcoming budget. Mr Kwarteng said it was his job to make representations to the Chancellor on behalf of business. He agreed that support needed to be targeted.

The industrial strategy of 2017 was out of date and would be refreshed and would reflect current conditions.

Mr Kwarteng disputed Zarah Sultana’s comment that the government had not supported foreign countries’ efforts to reduce the use of fossil fuels. She also questioned the amount the UK was committing to reducing carbon compared to other countries. The Secretary of State said it was important to recognise that not 100% of commitment came from the public purse. Most investment was from the private sector. Ms Sultana also asked why the white paper did not include a date for new homes to be built zero carbon, nor shipping or aviation targets. Mr Kwarteng said shipping and aviation needed to be addressed. In terms of housing, BEIS was talking to the DHCLG. A heat and buildings strategy would be published this quarter.

Replying to Darren Jones on an updated workers’ rights bill, he said the government was committed to working closely with trade unions to help achieve the net zero target and high employment standards.

On audit reform Mr Kwarteng was keen a white paper should be published. On Post Office Horizon, he was assessing all information available.

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Rt Hon Alok Sharma MP, COP 26 President, was jointed in giving evidence by Peter Hill, COP 26 Chief Executive Officer, Cabinet Office; Ros Eales, COP26 Chief Operating Officer, Cabinet Office; and Archie Young, COP26 UK Lead Climate Negotiator, Cabinet Office.

Mr Sharma explained his ambitions for 2021 and the programmes running this year. He hoped that COP26 would be the most inclusive ever.

On the decision not to intervene in the coal mine decision in Cumbria, he said it had been left up to the local authority, but the general policy was to reduce use of coal. He understood the point made by committee chairman Darren Jones that it was “embarrassing” that there would be a new coal-powered station.

He welcomed the commitments to net zero by major economies, but a lot more progress would be needed this year.

Jerome Mayhew (from the Environment Audit Committee) asked about the growing call for the introduction of carbon border adjustments. Mr Sharma agreed there was an interest in this proposal around the world. He did not anticipate it becoming an issue in negotiations but it may have an impact. From a UK perspective, we had to consider the approaches towards carbon leakage.

Replying to Philip Dunne (from the Environment Audit Committee), Mr Sharma was confident he had support in government for COP26.

He told Nusrat Ghani he had been working on COP26 for some time, including the climate ambition summit, which demonstrated that despite Covid there had been progress. Bilateral engagements would continue. He was not complacent. The Prime Minister was playing a leading role in diplomatic efforts, including engagements with many world leaders.

In answer to questions by Judith Cummins, Mr Sharma welcomed the commitments already made by Joe Biden. He pointed out that he already had good relations with many senior people at individual State level.

Replying to Alexander Stafford, Archie Young said COP was a cross-government effort and Mr Sharma confirmed that all department heads were keen to be involved. It was not the case that there were restrictions on external recruitment. There were also high-level champions, such as Nigel Topping.

Mark Pawsey asked about finance for commitments made in the Paris Agreement, which were ‘eye-waveringly large.’ Mr Sharma said the goal was to raise £100 billion from developed countries. The government was also working closely with the World Bank. A big effort would be made to encourage private financiers to contribute. The race to zero had been largely successful, showing the private sector was already looking at ways of going green.

He confirmed to Alan Brown that he would be answering questions in the Commons, but arrangements were still in progress for this. He wanted to be as collaborative as possible with parliamentary colleagues. No decisions had yet been taken on the form of the delegation to COP26 regarding inclusion of representatives of the Opposition and backbenchers. Ros Eales added that there was close collaboration with the devolved governments

Alex Sobel (from the Environment Audit Committee) asked what steps were being taken to ensure the summit would be Covid-secure. Mr Sharma hoped the summit could be held in person.

Paul Howell asked about inclusivity. Mr Sharma said all communities would be involved as they were often the people who delivered local solutions. Engagement with the public was essential and the government had to demonstrate the connection between COP and people’s lives, both in the UK and around the world.

Replying to Zarah Sultana on the government’s 10-climate plan, including the phasing out of petrol and diesel cars, Mr Sharma said he believed in incentivising people to make a change.