PARLIAMENTARY DEBATES - United Kingdom Parliament

1607 Energy Infrastructure (UK Supply 26 MARCH 2013 Energy Infrastructure (UK Supply 1608
Chain)
Chain)
[Peter Aldous]
the case, why is the UK the only oil and gas province in
the world that does not have a local content policy?
Why should licences granted on the UK continental
shelf not contain a clause requiring free and fair provision
for British companies in the procurement process?
The UK Government should apply pressure at national
and EU level to ensure that UK companies are not
disadvantaged when competing for overseas contracts.
Sembmarine SLP, based in Lowestoft in my constituency,
advises that in its experience, when it competes for
projects in Norwegian, Dutch, German and French
waters it has practically no chance of winning owing to
blatant protectionism. In the offshore wind sector, Seajacks,
based in the constituency of my hon. Friend the Member
for Great Yarmouth (Brandon Lewis), points out that
the French Government have explicitly stated that they
intend to award licences for offshore wind sites to bidders
favouring the French supply chain. British companies
are not looking for favouritism or trade barriers; they
are seeking a level playing field. I urge the Minister,
together with his colleagues in the Department for
Business, Innovation and Skills and the Treasury, to do
all he can to help achieve that.
The Government could take other long-term measures
to strengthen the UK supply chain. Indeed, they have
put in place a number of initiatives, for which I thank
and commend them. In the time left I shall briefly run
through what else needs to be done to ensure that
UK-based businesses are in the best possible place to
secure contracts.
First is electricity market reform. At present, the
Energy Bill is the most important game in town, and if
we get it right it will provide the stable long-term policy
environment that is required to attract supply chain
investment. I believe that we are moving in the right
direction. A £7.6 billion package has been provided for
investment in renewable energy, and although the Bill’s
provisions are complicated, it should provide the certainty,
confidence and credibility that investors are looking for
in UK energy policy. Timeliness is vital. It is important
to investors that draft strike prices are published in the
second quarter of this year and that the Bill receives
Royal Assent by the end of the year.
I commend the Minister on being receptive to
amendments to improve the Bill, and I am grateful to
him for considering my proposals, which are designed
to strengthen the supply chain. The elephant in the
room is, of course, the 2030 decarbonisation target. I
shall not dwell on that as I know it will be debated in the
Chamber in much detail and with much passion in the
coming weeks; indeed, it could be the subject of an
Adjournment debate. I will say, however, that it is
unfortunate that the issue has become a bit of a political
football, and when the matter is considered I ask the
Government to look behind any political positioning
and decide what is best for Britain, and particularly the
development of the UK energy supply chain. My views
on the matter are determined by what industry and investors
tell me, and it is important that we listen to them.
Secondly, the Government have put in place a number
of measures to strengthen the supply chain. In Lowestoft
and Great Yarmouth there is an enterprise zone, and
the two ports have centre of renewable engineering—
CORE—status. Those measures are proving helpful in
promoting the area, but as the Minister heard from the
Norfolk and Suffolk delegation he met last month,
more could be done to ensure that we fully realise the
potential of the great opportunity in front of us.
The problem that Yarmouth and Lowestoft face as a
CORE is that of six COREs in England, only it and
Sheerness do not have assisted area status. I believe that
if all six COREs enjoyed the benefit of assisted area
status, it would be particularly advantageous, both nationally
and internationally, in seeking to promote the UK. It
would help Lowestoft and Yarmouth to compete against
our fiercest competitors from the low countries on the
other side of the North sea.
I am also mindful that the UK ports fund, which is
designed to help the establishment of offshore wind
manufacturing, is only available in assisted areas. I am
advised that at present this fund is largely unspent. If
Lowestoft and Yarmouth were given assisted area status,
the two ports could access the fund to carry out work
that would stimulate jobs and investment in renewable
offshore engineering.
The advanced manufacturing supply chain initiative
is proving beneficial in stimulating investment in
manufacturing-related jobs and growth. However, the
current minimum threshold of £1 million for investment
from the fund appears to be holding businesses back
from making applications. It would thus be helpful if
the Department of Energy and Climate Change could
liaise with the Department for Business, Innovation and
Skills to see whether the threshold could be lowered
either for individual businesses or for smaller scale
projects. This would be helpful to businesses from across
the manufacturing sector and to those looking to support
energy projects.
I apologise if it appears that I have a shopping list, as
I am mindful that the Minister may tell me that the
shelves are bare. I would emphasise, however, that a
thriving supply chain can be a key driver in reducing
costs in the offshore wind sector, which is vital to
establishing the industry on a sustainable, long-term
footing.
Thirdly, investing in skills and people is of paramount
importance. The UK needs to improve its skills base to
serve the large demand that will come from the North
sea in the next few years with regard to the oil and gas
and wind sectors. If we do not do that, businesses will
source that expertise from other countries.
I commend the Government for promoting
apprenticeships. Indeed, the Minister himself played an
important role in that work in a previous life. I also pay
special tribute to Lowestoft college which, although not
a large further education college, has realised the huge
potential in the energy sector and invested a considerable
amount of resources in providing facilities and putting
on courses with the energy industry’s needs in mind.
There are a number of different ways and proposals
as to how best to invest in skills for the offshore industry.
I do not propose to go through these or, indeed, to pick
a winner. Suffice to say that it is important that the
necessary skills centres should be located near offshore
engineering ports. This way we can create the world’s
leading pool of offshore engineering skills here in the UK.
The Offshore Renewable Energy Catapult centre
proposed by the Technology Strategy Board will be
located in Glasgow, and the north-east and will have an