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Energy Sector (Research and Development)

Volume 603: debated on Tuesday 15 December 2015

11. What funding his Department plans to allocate to research and development in the energy sector over the next five years. (902708)

As my right hon. Friend the Chancellor demonstrated in the autumn statement, the Government put investment in R and D as the top priority in our long-term economic plan. I am delighted, as I am sure that Opposition Members will be, by the announcement on ring-fencing the science budget, with £6.9 billion on science capital and £4.7 billion on revenue. In addition, the Prime Minister recently announced a 50% increase in our funding of climate finance, with £400 million over this Parliament, and we have just announced £60 million going into the energy research accelerator.

Launching an investment coalition in Paris at the weekend, Bill Gates made the point that if we are to avoid global warming we have to move at full speed in developing new renewable energy technologies. To ensure that the UK plays its part, what progress have Ministers made in ensuring that the UK Green Investment Bank receives the full £3.8 billion of capitalisation and maintains its green mandate, irrespective of the future of the Government’s stake in the bank?

I am sure that the hon. Gentleman will welcome the Prime Minister’s announcement of £400 million extra funding. The Green Investment Bank has played the role that we envisaged in supporting the green economy, which is not an allotment economy—it now constitutes 96,000 businesses with 230,000 employees and a turnover of £45 billion for the British economy and £4.8 billion of exports. By giving the Green Investment Bank the freedom to raise money on the capital markets, we will generate more money for the green economy, which is growing under this Government like never before.

The North sea oil and gas sector faces significant challenges at the current time, with a need for a collegiate approach to research and development to fuel innovation and to drive down costs. To achieve this, will the Minister consider setting up a North sea oil and gas innovation centre similar to the very successful offshore wind catapult?

My hon. Friend makes a very interesting point. On the east coast in East Anglia, in the north and in Scotland, this country is leading in the field of offshore energy. We have just funded the offshore energy centre, but I would be happy to look at the specific idea that he recommends.

“Extremely disappointing”, “missed opportunity”, “damaging” and “disgrace” were some of the words and phrases used to describe this Government’s decision to withdraw £1 billion of funding from carbon capture and storage. Hundreds of jobs for the communities of the north-east of Scotland, and the opportunity to be at the forefront of low-carbon innovation, have now been lost. The Government will instead spend hundreds of millions of pounds on subsidising research into nuclear energy. In the light of that decision, would the Minister like to take this opportunity to explain to the people of Peterhead and the north-east specifically how he has supported them to be world leaders in innovation?

It is a pleasure to follow that speech. I will happily repeat the figure I just gave: the Prime Minister has just announced £400 million of extra funding for energy finance. We have just made announcements on onshore research. One of the lessons for Scotland is to reduce its dependence on public sector funding. The truth is that, under the renewables obligation for offshore wind, 28% of the funding went to Scotland—that is £560 million—when it represents only 10% of bill payers. We need to support the green economy in Scotland, just like we are doing in the rest of the country.

In the spending review, a major energy investment of £250 million was announced for small modular reactors. That was warmly welcomed in the north-west and it will make a big difference to our ability to meet our climate change targets. It is crucial that the UK owns the intellectual property rights that result from that technology. Will the Minister and his colleagues in the Department of Energy and Climate Change make sure that that is the case?

My hon. Friend is something of an expert on those matters and I will happily look into the very important point he makes. One of the benefits of our support for the green economy—which, as I have said, is now a £45 billion sector in this country—is that we are generating the leading technologies in 21st-century green energy. I will happily look into the specific points he makes.