Thursday 12 October 2017
Business, Energy and Industrial Strategy
Clean Growth Strategy
The Government are today publishing the clean growth strategy—an ambitious strategy to cut emissions while keeping costs down for consumers, creating good jobs and growing the economy. This is an important component of our modern industrial strategy. We are also laying our responses to the Committee on Climate Change’s 2017 progress report to Parliament and publishing a suite of related documents.
Clean growth can make a real difference to people’s lives, from reducing energy bills and improving air quality, to supporting new technologies and boosting earning power in high-quality jobs.
We start from a position of strength. We have already made significant progress towards our legally binding 2050 target to reduce emissions by at least 80% against 1990 levels. We exceeded the target emissions reductions of our first carbon budget (2008 to 2012) by 1% of the budget level and we project that we will outperform against our second and third budgets covering the years 2013 to 2022 by almost 5% and 4% respectively.
The UK is a world leader in cutting emissions while growing the economy. Provisional statistics indicate that UK emissions in 2016 were 42% lower than in 1990 and 6% below those in 2015. At the same time, the UK’s GDP has increased by 67% since 1990 showing that a strong, growing economy can go hand in hand with reduced emissions. On a per person basis, this means that we have reduced emissions faster than any other G7 nation and led the G7 group in growth in national income over the period.
The global transition to a low-carbon economy offers huge growth opportunities which the UK is well placed to take advantage of as a core element of our industrial strategy. Our low-carbon sector already employs over 230,000 people directly and another 200,000 through supply chains. Analysis for the Committee on Climate Change estimated that the low-carbon economy has the potential to grow 11% per year between 2015 and 2030—four times faster than the rest of the economy.
While we have performed strongly to date, the task ahead is significant. The clean growth strategy sets out policies and proposals across the whole of the economy and the country including business, housing, transport, power, the natural environment and the public sector.
Low-carbon innovation is at the heart of our approach, with over £2.5 billion of Government investment from 2015 to 2021. This forms part of the largest increase in public spending on UK science, research and innovation in almost 40 years.
The clean growth strategy is an important milestone in the UK’s work to cut emissions and grow the economy. But it is not the end of the process. Clean technology is developing at a rapid pace and costs are falling faster than many predicted—for example, the cost of offshore wind has halved in two years. We look forward to working with colleagues across both Houses and the devolved Administrations, and with people and organisations across the country, to ensure the UK can continue to lead the world in clean growth.
EU Environmental Council
I will attend the EU Environment Council, which will take place on 13 October in Luxembourg.
Following adoption of the agenda, the list of “A” items will be approved.
Under legislative proposals, the Council will debate two proposals with the aim to get an agreement in the Council of Ministers:
A regulation of the European Parliament and of the Council on binding annual greenhouse gas emission reductions by member states from 2021 to 2030 for a resilient energy union and to meet commitments under the Paris agreement and amending regulation No 525/2013 of the European Parliament and the Council on a mechanism for monitoring and reporting greenhouse gas emissions and other information relevant to climate change. This is known as the effort sharing regulation (ESR).
A regulation of the European Parliament and of the Council on the inclusion of greenhouse gas emissions and removals from land use, land use change and forestry into the 2030 climate and energy framework and amending regulation No 525/2013 of the European Parliament and the Council on a mechanism for monitoring and reporting greenhouse gas emissions and other information relevant to climate change. This is known as the land use, land use change and forestry regulation (LULUCF).
Under non-legislative proposals, the Council will seek to adopt conclusions on the EU priorities for the third meeting of the United Nations Environment Assembly (UNEA-3), and on the preparations for the 23rd session of the conference of the parties (COP 23) to the United Nations framework convention on climate change (UNFCCC).
The following items will be discussed under any other business:
1. Reports on recent international meetings:
Sixth session of the meeting of the parties (MOP 6) to the convention on access to information, public participation in decision-making and access to justice in environmental matters (Aarhus convention),
Joint high-level segment under the meetings of the parties to the Aarhus convention and its protocol on PRTRs,
Third session of the meeting of the parties (MOPP 3) to the protocol on pollutant release and transfer registers,
First meeting of the conference of the parties to the Minamata convention on mercury (COP 1), (Geneva, 24-29 September 2017)
13th meeting of the conference of the parties to the United Nations convention to combat desertification (UNCCD COP 13)
2. A more transparent, more effective and safer assessment of chemical substances.
3. Importance, for the implementation of the Paris agreement, of good co-ordination and coherence between the integrated national energy and climate plans for 2030 and the long-term emissions reduction strategies, as well as of minimum quality, comparability and transparency standards.
4. 50th session of the international seminar “Science for Peace the World Over” (Erice, Italy, 20-23 August 2017).
The UK has also secured an additional AOB to encourage those member states who are ready to proceed with early ratification of the Kigali amendment to the UN Montreal protocol to protect the Earth’s ozone layer to do so in time for the 30th anniversary meeting of the parties to the protocol, in Montreal this November.
Last October, agreement was reached in Kigali to amend the protocol to phase down hydrofluorocarbons (HFCs) globally by around 85% by the mid-2040s. This could avoid up to 0.5 °C of global warming by the end of the century, making a major contribution to the Paris climate goal of a 2 °C limit. The amendment will come into force in 2019 as long as at least 20 countries have ratified by then.
It is important that Departments can start spending to prepare for Brexit when they need to do so. Managing public money requires that expenditure on new services must rest on specific legislation. However, delaying spend until legislation has reached Royal Assent could jeopardise readiness for Brexit.
To address this, for the small proportion of spending affected, Ministers can issue a technical direction, allowing critical spending to be incurred ahead of Royal Assent, whilst ensuring transparency to Parliament.
In these cases, the use of a direction will be a matter of timing. Departments will still need to ensure spending is in all other respects regular, proper, feasible and good value for money, in the usual way. I have asked my officials to write to all Departments explaining this process. They will also write to the Public Accounts Committee—this letter will be published to ensure full transparency.
As confirmed yesterday, by the Prime Minister to the House and by the Chancellor to the Treasury Committee, the Treasury has committed over £250 million of additional spending in 2017-18 to prepare for Brexit from the reserve. Departmental allocations will be set out at supplementary estimates in the usual way. An update on Brexit spending will also be provided at the autumn Budget.
General Practice Indemnity
I am today updating the House on recent developments regarding indemnity arrangements for NHS general practice in England.
The Government are committed to ensuring that general practice is an attractive long-term career option that gives stimulus and stability to our brightest medical graduates. Therefore, today I have announced that the Department of Health is planning, subject to examination of relevant issues, the development of a state-backed indemnity scheme for general practice in England.
Rising cost of indemnity is a great source of concern for general practitioners (GPs). Our ambition is to deliver a more stable and more affordable system for GPs and their patients. The scheme could provide financially sustainable cover for future, and potentially historic, claims arising from the delivery of NHS services.
The Department has benefited from the engagement with the four Medical Defence Organisations (MDOs) and GP representatives over recent months. Any new scheme should meet the needs of current and future GPs, be in the interest of patients and represent value for money for taxpayers. Transfer of historic liabilities from MDOs to a new scheme would be dependent on satisfactory negotiation with the MDOs.
We will explore with GP representatives how to embed new indemnity arrangements, including the future costs, into GP contract negotiations. The Department will set up a stakeholder group and arrange a first roundtable next month with the Royal College of General Practitioners, the British Medical Association and other GP representatives to gather views from general practice and agree how best to engage with the sector going forward.
Any scheme would take at least 12 to 18 months to establish and require careful negotiation. GPs should continue to ensure they have appropriate indemnity cover in line with General Medical Council requirements to enable them to practise. NHS England has already committed to provide additional funding to GP practices to cover the estimated annual indemnity inflation for 2016-17 and 2017-18. NHS England has also announced additional money for indemnity cover over the coming winter.
Indemnity arrangements are a devolved matter and the Department will continue to liaise with the devolved Administrations, who will make their own decisions about indemnity provision in their territories.
Rail Infrastructure Funding 2019 - 2024
I am today publishing my final statement of funds available for the railway in England and Wales for control period 6, which covers the years 2019 to 2024. This follows my publication of a high level output specification and initial statement of funds available on 20 July.
The high level output specification made clear that the Government are determined that the railway becomes more focused on issues that matter most to passengers—such as punctuality and reliability. It therefore focused on the operation, maintenance and renewal of the railway—areas which are crucial to delivering a more reliable railway. At the time of its publication, the Government deferred publication of a final statement of funds available, following more work to establish Network Rail’s costs and the scope for efficiency savings across control period 6.
This work has now concluded. On the basis of further work by Network Rail, of continued scrutiny by the Office of Rail and Road (ORR)—including through its independent reporter, Nichols—and through work by my Department and HM Treasury to challenge costings, Government are now in a position to set out their funding envelope for control period 6.
At this stage we expect around £47.9 billion to be spent on the railway across control period 6. Of this, we expect up to £34.7 billion to be provided directly via Government grant, with the remainder coming from a combination of track access charges and income from other sources, such as Network Rail’s property portfolio. These amounts will be refined during the regulatory process, which will produce by summer 2018 detailed draft amounts for the 2019 to 2024 period for consultation. Budgets will be set at route level, as part of the devolution of more accountability and authority to Network Rail routes, driving change in the organisation. The regulatory process will conclude with a final determination in October 2018.
During this process I expect the regulator to provide a strong efficiency challenge to maximise value for money, and the ORR has substantially changed its regulatory approach to help achieve this.
We have some of the most intensively used railways in Europe, and this investment focuses on the essential work needed to ensure their safety and reliability, including funding to support a significant increase in renewals activity compared to the current period, and increased maintenance spend to allow Network Rail to meet the challenges of a busier network. This investment recognises the critical importance of these activities in preserving the day to day operation of the railway.
I believe that a renewed focus on core railway activities will help return train performance to the levels that passengers expect and deserve. Overall, this significant funding demonstrates Government’s continued commitment to investing in the railway for the benefit of passengers, communities, the supply chain and the wider economy.
The Government have already made clear that they expect new enhancements to the rail network to be developed outside of the regulatory system. However, the statement of funds available published today includes funding to continue to take forward the enhancements that were deferred from control period 5. In line with the new process for enhancements these schemes will continue to be subject to ongoing consideration to ensure they deliver the best results for both rail users and taxpayers. In addition to this, I am making funding available for the early-stage development of new enhancement schemes. I will announce further details on a new process for taking forward enhancements later in the year. We need to ensure investment best addresses the needs of passengers and freight, and that funding commitments appropriately reflect the stage of development of those enhancements.
Furthermore, the statement of funds available also includes funding for continued investment in improvements to both the accessibility of the railway and the rail freight network. Our commitment to funding accessibility improvements in the railway further emphasises our drive to ensure that the railway is accessible to all. The Government have recognised the crucial role that rail freight plays in supporting the economy and the environment and our continued investment in the freight network recognises this.
Given the need to spend public money wisely and to incentivise the industry to do so, I believe the funding envelope published today is stretching yet achievable. I will continue to push Network Rail to improve its effectiveness and efficiency. In particular I support an ambitious approach to route devolution, so that Network Rail is more focused on its customers. I will also modernise the Government’s oversight and assurance arrangements for Network Rail to properly reflect its public sector status. I have taken steps to ensure that this money is spent more effectively and that the problems with cost and delivery which occurred during control period 5 are not repeated. I will also continue to drive improvement across the wider industry, including the franchising system. I will update this House further on my plans for wider rail strategy in the near future. I am arranging for copies of the statement of funds available to be placed in the Libraries of the House.
The statement of funds available can be viewed online at: