January 2002

Westminster Report, IEE Review

The immediate aftermath of the election and the long Summer Recess was a fairly barren few months for engineering interests at Westminster. However, I am pleased to report that since late October, engineering, science and technology have returned with gusto to the agendas of many Parliamentarians.

One recurring theme in recent weeks has been renewable energy and different energy sources. A number of MPs have posed important questions to the Government asking about its development. Conservative backbencher Jonathan Sayeed posed one such question. He asked the Trade and Industry Secretary, Patricia Hewitt, about the incentives the Government were providing for the expansion of fuel cells. In reply, Ms Hewitt stressed that the DTI is giving strong support to fuel cells research and development and has done for many years. She said that since 1992, the DTI supported 147 fuel projects with a total of DTI spend of £11.8 million. Current spending was £2million per annum, with the Engineering and Physical Sciences Research Council spending about the same on basic research related to fuel cells. Ms Hewitt noted that the DTI was supporting the first UK demonstration of a 200 kW fuel cell combined heat and power unit at Woking Borough Council.

Another DTI Minister, Brian Wilson MP, also revealed that the Energy Review presently being conducted by the Performance and Innovation Unit (PIU) is considering the role of new technologies including fuel cells, in conjunction with other energy matters. The PIU is due to report to the Prime Minister by the end of 2001.

Meanwhile, at the end of November, the Science and Technology Select Committee published an interesting report on wave and tidal energy (http://www.publications.parliament.uk/pa/cm/cmsctech.htm).

The Committee noted that given the UK’s abundant wave and tidal energy resources, it is surprising that the development of wave and tidal energy technologies has received so little support from the Government. The Report argued that there appears to be no technological barriers to the effective development of wave and tidal energy through more multi-disciplinary research projects and the construction of large demonstrator models. The Committee urged that targeted funding for wave and tidal technology should be steadily increased year on year.

Responding to the Committee, Brian Wilson suggested that considerable progress has been made with the development of wave and tidal stream technologies since the Committee produced its report in April 2001. He stressed that the DTI had announced recent funding of £1.7 million of DTI funding for Wavegen to help this company with the development of its novel wave energy device.

The DTI is also supporting new wave and tidal stream projects via the Sustainable Energy Programme call process. He added that the UK is now making good progress with the development of reliable and cost effective wave and tidal technologies.

One continuing bugbear has been the increase in costs and regulations for the engineering industry. The Conservative benches have tried to highlight this and urge the Government to think again. In the Commons, Shadow Trade and Industry Secretary John Whittingdale MP, noted that the Engineering Employers Federation opposes legislation for employers to have a mandatory requirement to accept union learning representatives when having no say in who those representatives are, or how many are appointed.

Mr Whittingdale argued that this “compulsion” will add to costs and do nothing to increase employers’ commitment to training. He also urged the Government to abandon the climate change levy, something which has imposed an even greater and disproportionate burden on manufacturing at a time when the industry is already in recession.

In answer to a question from Robert Key, Brian Wilson acknowledged that the EEF and others had raised concerns about the climate change levy and its impact on costs to businesses. He argued that the levy was introduced in line with Government commitments to reduce emissions of greenhouse gases, while protecting business competitiveness. In an encouraging sign, Mr Wilson said that the Treasury are keeping the levy under review, however - as with any new tax measure. The Government are also maintaining contact with business to monitor initial experience with the operation of the levy .

Reducing costs and regulation on business is all the more important given that our manufacturing industry is clearly in recession. This was a point highlighted by Labour backbencher Claire Curtis-Thomas - still battling hard for engineering interests - in Westminster Hall (an adjunct to the Commons where backbenchers are give opportunities to debate important issues).

She noted the strong decline in manufacturing as a proportion of GDP, and stated that manufacturing activity is below 50% for its seventh consecutive month. August’s reading was the lowest since 1999. Clair Curtis-Thomas reminded MPs that the contraction in manufacturing output - about 4% in manufacturing and 9% in engineering - suggests that negative growth will soon stretch to double figures.

Urging increased investment in Research and Development - and tax breaks for larger companies for development - she asked the government to acknowledge the benefits that engineering and manufacturing bring to the economy and their contribution to the cultural development and intellectual capacity of the country.

In response, Trade Minister Nigel Griffiths said that the Government would be introducing a new tax credit for industry and is also putting more than £1 billion into sciences in addition to the £1.4 billion that has already been invested in partnership with the Wellcome Trust. There will also be new incentives for commercial application of research with a fund of £140 million to transfer more of science and technology out of the labs and into the factories. The Minister acknowledged that the manufacturing industry “is feeling real pain” and he claimed the Government is doing everything possible to stave off redundancies and to provide retraining.