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Brian Wilson MPALSTOM INTERNATIONAL ASSOCIATION ANNUAL DINNER |
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I am delighted to be here tonight as a guest of this long established and distinguished association. First, I would first like to congratulate Pierre Bilger on receiving an honorary CBE in the recent New Year Honours List. Many congratulations. ALSTOM: THE COMPANY I am honoured to be the guest of Alstom, a global specialist especially in the power and transport sectors with a presence in over 70 countries. It has a pre-eminent position in the UK engineering industry as a major exporter and an employer of about 15,000 people at 25 sites across the country. As a former Minister for Trade at the Department, I fully recognise the importance of international trade. For Alstom UK alone, exports account for around 40% of turnover. From the latest Alstom 2002 UK Newsletter which you kindly sent me, Paul, I was pleased to note recent successes in the power generation and rail sectors in both UK and overseas business. On the rail traction side, Alstom are to be congratulated on the recent on-time delivery of the first Pendolino tilting train for use by Virgin Trains on the West Coast Main Line. This is part of a prestigious order for 53 nine-coach sets, worth nearly £600m, which will soon provide Alstom with a shop window for its new high-technology product running on Britain's busiest main line. I hope that this achievement will usher in further success for Alstom in the highly competitive rolling-stock market. The Strategic Rail Authority's Plan for the future of the rail network in Britain was announced earlier this month. This, together with the recent resumption of the passenger franchise programme, should provide suppliers with new opportunities to participate in modernising the nation's rail system. We anticipate that Alstom will continue to make a major contribution. ENERGY ISSUES : PIU Review I know Alstom has been paying close interest in the review which the Prime Minister asked the Performance and Innovation Unit (PIU) to undertake of the strategic issues surrounding energy policy. The review team has now completed its work and I submitted their report to the Prime Minister at the end of the December. It is now for Ministers collectively to determine next steps on the report including the nature of any consultation process. UK Energy policy has had a number of successes in recent years. We are currently self sufficient in energy. Our gas and electricity prices are amongst the lowest in the G7. We have diverse sources of supply, with a good balance between coal, gas and nuclear in power generation. And we are on target to more than meet our Kyoto commitments at the end of the decade. That seems a fairly positive picture. But energy is subject to constant change and key drivers behind the need for the review were the risk of a looming security crisis and the certainty of environmental challenges. Whilst these issues become increasingly important, we will continue to focus on competitiveness and the use of competitive markets. During the review we have been tackling some of the specific energy challenges that face the UK. Cleaner Coal Technology Demonstration Plant For example, we have just completed a review into the case for the government supporting the construction of cleaner coal technology demonstration plant. I know that Alstom took part in the consultation process. The full conclusions of this review should be announced in the very near future, but it is clear from its work that significant reductions in carbon dioxide, from the use of coal in power generation, can be achieved through new cleaner coal technologies. COMBINED HEAT & POWER (CHP) On CHP, we have noted that the rise in wholesale gas prices combined with falling electricity prices has reduced its profitability. We are tackling high gas prices by pushing for better competition and liberalisation in Europe, by working for improvements in the GB market and by taking action against anti-competitive activity. This is a long-term strategy and there is no quick fix. We also recognise the genuine concerns that the introduction of the New Electricity Trading Arrangements (NETA) have adversely affected smaller generators, renewables and CHP. Following Ofgem's report, we are seeking to identify solutions. There has also been some calls for wider exemption of CHP from the Climate Change Levy. The Pre Budget Report stated that the Government would consider the environmental case for giving more favourable treatment within the Levy for CHP. I know that many in the industry would like to have seen more, but I regard this as a move in the right direction. In addition, my colleague, Michael Meacher, will be publishing a draft CHP Strategy for consultation shortly; to consider measures needed to achieve our target of at least 10,000MWe of installed Good Quality CHP by 2010. Renewables The Government has a commitment to renewables, and I have a personal enthusiasm. We have set ourselves the challenging target of obtaining 10% of our total electricity sales from renewables sources by 2010, as part of our move to a more sustainable use of energy. We are putting in place the Renewables Obligation to enable us to do this, and I hope to lay the Renewables Obligation Order before Parliament in the next few days. Security and diversity of energy supply are other important benefits of our support for renewables. But tonight, I want to focus on the opportunities that the development of our renewable energy resources offers for British industry. Achieving our targets will require a multi-billion pound investment into these new and emerging technologies. British industry has a heritage of innovation and expertise that we must exploit in building our renewables capacity. In the Renewables Obligation, we are providing an incentive for investment into new, environmentally benign technologies for converting waste into energy. These emerging technologies hold great potential for enabling new sources of renewable energy, such as energy crops, to come into the marketplace. I want our commitment to renewables to deliver tangible benefits, not just for the environment, but also for British business and so I urge industry to rise to the challenge that the Obligation lays before us, and make the most of this wonderful opportunity. Alstom is an example of a business which is responding, through innovation to the challenge of climate change. It is in the forefront of the drive for the development and take-up of sustainable technologies. I am delighted therefore to announce that my Department is offering £2.9 million in grant support for a development programme by Alstom and First Renewables to develop the next generation of biomass gas turbines. This £7.3 million project is an opportunity to develop the technologies and techniques that we need to make a successful transition from demonstration to commercial reality. I am pleased to note that the project will also benefit from academic collaboration with the Whittle Laboratory of Cambridge University. The project will build on the successes of the ARBRE project to develop a new generation of biomass power stations. MANUFACTURING Alstom's stake in manufacturing is clear. Last week Patricia Hewitt emphasised that we need to do more to recognise and celebrate UK manufacturing success. Alstom is part of that success. I hope to visit your Lincoln plant soon to see this flagship of the Alstom group with its fine engineering and export record. Right now, it is very tough for manufacturing. This problem isn't unique to Britain. No country can escape the downturn in the world economy, particularly after September 11th. So short term, the outlook for manufacturing is very difficult. But look ahead a year or so, medium and long term, the prospects are bright. Modern manufacturing is central to our future as a leading knowledge-driven economy; that Britain is extraordinarily good at modern manufacturing – and, with the right policies, can be even better. There are three myths about manufacturing which we need to dispose of. The first is the idea that manufacturing is out of date, the industry of the past. Yes, we are in the middle of an extraordinary technological revolution which is transforming every production process, every sector of our economy. Modern manufacturing is high tech, highly creative. The second myth is that manufacturing can't be done in the UK - it's all shifting to low-wage countries like China, Morocco and Poland.Labour-intensive manufacturing will go on shifting to low-wage countries. But high-tech manufacturing using the best technology –is best done in Britain and other leading industrial countries like Germany and Japan. So success in manufacturing – like success in any other sector –comes from constantly innovating, investing in new products, new designs, new materials and new production technologies, whether its textiles or turbines. The third myth is that we don't need manufacturing because the service sector is sufficient. That is simply not the case. We need successful manufacturers. Manufacturing provides well-paid jobs - and if Japan, the highest wage economy in the world, can manufacture successfully, so can the UK. Role of government If we are to fulfil our potential, then there is much more that government, working in partnership with industry and unions, needs to do. First, creating the right economic environment. The UK is enjoying the longest period of sustained low inflation, and the lowest long-term interest rates since the 1960s. It is a great tribute to Britain's manufacturers that their export performance has remained remarkably consistent in spite of the continuing weakness of the Euro and the slowdown in the US economy. At the same time, we must place these difficulties in context. The experience of the last 50 years tells us that changes in exchange rates don't by themselves explain the medium- to long-term success or failure of national manufacturing sectors. It is abundantly clear that you can't devalue your way to manufacturing success. And the potential benefits of euro membership in terms of trade, transparency, costs and currency stability, lead us to support it in principle. But in practice the economic conditions must be right, which is why the Government is committed to a rigorous and comprehensive assessment of the five economic tests, which include the impact of membership on investment and jobs. But the role of government goes far beyond getting the macroeconomics right, important though that is.
We must also keep on raising the quality of business support and spreading best practice in firms. DTI REVIEWS As some of you will probably know, my Department has just undergone a wide-ranging review of both its internal structure, and of the business support schemes we offer. There will be some radical changes which will be in place by April this year. Through them we aim to improve the way in which the Department serves business, consumers as well as employees. The DTI's role will be to drive up sustainable UK productivity and competitiveness. The support for business will be simplified, made more effective and easier to identify and to access. And to make sure we stay on target we will have a new productivity strategy that will focus everything we do. In delivering our agenda we'll be involving our customers in our policy development. Boosting our capacity to deliver as well as the very best in business. Making sure that the services we offer match your needs and make a real contribution to our productivity agenda. Focusing our resources on policies and services that make the difference. A key challenge will be to make sure our business support schemes and networks work even better for the businesses that use them. From a plethora of initiatives we'll move to a straightforward portfolio system that focuses business support on the areas in which it can make a difference: innovation, regional investment; international trade and investment; enterprise for small firms and on people and skills. We will work with business – with you – to take this forward. I – and Patricia Hewitt - are determined that in doing so we will focus on your needs and on how we can make a real difference for you. We are confident that with Government and industry working together, we can ensure that UK manufacturing industry can match the best in the world. |
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Other speeches by Brian Wilson MP
(the following are available from the archive) |
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