IN THIS ISSUE - EEF gives evidence to House of Lords Select Committee - Minister pressed on Green jobs - Weekly Focus – is it time rethink the Renewables target? - In the News - Week in Review - The week ahead
EEF gives evidence to House of Lords Select Committee
Our Senior Economist Jeegar Kakkad has given evidence to the House of Lords Economic Affairs Finance Bill Sub-Committee, alongside representatives from the IoD and CBI. The committee was focusing on the specific aspects of the Finance Bill, giving EEF the opportunity to state its positions on issues including corporation tax reform, growth and competitiveness and tax policymaking. You can watch Jeegar giving evidence here.
For more information contact Jeegar Kakkad, Senior Economist
Minister pressed on Green jobs
EEF this week called on the Climate Change Minister, Greg Barker MP, to ensure that UK manufacturing will be the prime beneficiary of nuclear new-build and renewable technologies. EEF posed the question to the minister at a round table discussion where he was highly supportive of the manufacturing sector. The minister said “UK manufacturing is vital to rebalancing the economy” and “more must be done to support manufacturers”. This is a welcome change in the stance of DECC, the climate and energy department. The short-term test for government now is what it says next week and how it responds to the fourth Carbon Budget (2023-2027) recommendations from the Committee on Climate Change.
For further information, contact Gareth Stace, Head of Climate & Environment Policy
Is it time rethink the Renewables target?
A report published this week by government advisory body the Committee on Climate Change (CCC) sheds important new light on a major policy question that’s very rarely broached in public – is pursuing the 2020 renewable target the best way to cut carbon dioxide emissions?
The urgent need to address carbon emissions is widely accepted, but the best way to go about it is more controversial. Despite there being a wide range of options available, we are currently committed to putting a lot of our eggs in one basket – renewable energy. The UK has target to quintuple consumption of renewable energy from 3% today to 15% of energy consumption from renewable sources by 2020.
Clearly there are major opportunities for UK plc from investments in renewable technology but it may be better to have ambitious emission targets (which we do), strong incentives to invest in low-carbon energy (which we do) and let the market select the best mix of technologies.
And this where the CCC report comes in, there is a very good reason why we should be questioning the renewable energy target – cost. A key finding of the report is that the majority of renewable energy technologies are likely to remain considerably more expensive than alternatives forms of low-carbon power generation for several decades.
For example, it predicts that in 2020 offshore wind, the technology many are pinning their hopes on delivering the lion’s share of the renewable energy target, will still be 60% more expensive than new nuclear power stations and, surprisingly, as much as 20% more expensive even than carbon capture and storage. The cost picture for earlier stage technologies like wave and tidal power is even less encouraging.
The potential consequences of going down the wrong path are considerable. We run the risk of piling unnecessary costs on hard-pressed consumers and undermining the competitiveness of UK industry for no environmental gain. We could even weaken the widespread support for addressing climate change which currently exists.
The previous government committed the UK to the 2020 renewable energy target without any obvious consideration of the alternatives. The CCC’s report provides the Coalition with the perfect opportunity for a considered reappraisal of its merits.
EEF will continue to lobby on this issue in the weeks and months ahead and we are always interested in hearing members' views.
For more on this contact Roger Salomone, Energy Adviser
EEF IN THE NEWS
We began the week by responding to the Committee on Climate Change report on Carbon Budgets where we called for a re-opening of the debate on the Renewables Target; this featured in The Independent and FT (registration required) . Subsequent to this we had a letter published in the FT on the same topic. We also responded to the latest Industrial Production figures which was picked up not once but twice by the FT(1) / FT(2), as well as the announcement of a Review of Employment Law and guidance on Agency Workers which was reported (again) in the FT and Daily Telegraph respectively. Coverage of our Sickness Absence survey continues to be referenced in a further article in the Daily Telegraph. Broadcast interviews were given live on Sky TV outside the Bank of England in response to the latest Inflation Report and on Wake up to Money on the back of the new strategy announced by UKTI to boost exports.
WEEK IN REVIEW
The UK’s total trade deficit worsened to £3.0bn in March, compared with £2.7bn in February. The deficit on the trade in goods worsened over the month, as good exports fell by £0.1bn but goods imports rose by £0.5bn. The services trade surplus improved slightly.
Index of Production
Manufacturing output rose 0.2% between March and February, and 1.1% in the first quarter of the year. Output for the production industries as a whole rose by 0.7% over the month, but only 0.2% over the quarter.
THE WEEK AHEAD
Tue 17th: CPI
Wed 18th: Labour Market Statistics
Thu 19th: EEF Pay Settlements; Retail Sales
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