Sarah Jones: 'The possibility of us being able to import carbon is incredibly exciting'

“This is an incredibly exciting announcement – it’s a government that is hungry for change and hungry to reach our net-zero targets.”

Croydon West MP Sarah Jones, 51, is the new minister of state for industry, whose brief sits across both the Department for Business and Trade and the Department for Energy Security and Net Zero – a sign that this government wants departments to collaborate on its missions.

“Carbon capture and storage is, for some of the hard-to-decarbonise industries, really the only option that we have”

She meets The House shortly after Britain officially became the first major economy to end its use of coal power. Labour’s Desnz marked this “new era” by announcing £22bn of funding over 25 years for carbon capture and storage (CCS) projects, designed to capture CO2 emissions, then use them or transport them to be permanently stored underground.

“Ed Miliband has been working unbelievably hard in the first few months of the Labour government to deliver way beyond what we all thought would be possible in the first few months. And this is part of that,” enthuses Jones.

With Labour’s earlier promise to invest £28bn a year in green projects ditched before the general election, the CCS commitment is likely to be one of the biggest net-zero spending announcements of this Parliament. But the technology has its sceptics.

Dale Vince, owner of Ecotricity and a major donor to the Labour Party, has called the £22bn a “mistake”. “CCS doesn’t work commercially anywhere in the world – these subsidies for the next 25 years confirm it’s not expected to be viable any time soon,” he said.

Critics say not only is the return on investment low but CCS is an unproven technology at best and projects in Australia, Canada and the US have repeatedly missed targets. Green groups have also called it a boon to fossil fuel producers and an excuse to carry on with business as usual.

Jones is quick to defend CCS, saying it is essential for some industries and suggesting that – despite this government’s ban on new oil and gas licenses – non-renewable sources of energy have their advantages, such as dispatchability.

“Carbon capture and storage is, for some of the hard-to-decarbonise industries, really the only option that we have. If you’re looking at cement or if you’re looking at glass production, carbon capture is the only technology we have that will help them decarbonise.

“It is also a way that we can ensure we have energy security in a system where we have huge quantities of solar and wind, but when the wind isn’t blowing and the sun isn’t shining, we still need some backup power,” Jones says.

“I think it’s a proven technology in Norway and in the US, and we’re absolutely confident that we’re going to do this very well, very safely. We have incredible regulatory systems and mechanisms to make sure this is done well and safely.”

The energy minister promises that “renewables will be used first, in all instances – when we can use renewables, we will, and we’ve got that designed into the system”. She even suggests that the investment could see Britain importing carbon to store it.

“There’ll be 4,000 jobs in the first instance, but then there’ll be up to 50,000 over the next 10 years or so. The possibility of us being the world leaders here, and being able to import carbon, having this huge storage that we’ll have for carbon, is incredibly exciting and is absolutely essential as part of the mix for the future.”

According to Desnz, the UK has an estimated 78 billion tonnes of theoretical CO2 storage capacity. The government is therefore working to address regulatory barriers to enable cross-border CO2 transport and storage, The House understands.

But if the government is so confident that CCS works, why not make the carbon-emitting companies take responsibility and pay for the projects without big subsidies?

“This is the problem with some of the new technologies. The challenge that we have – we have it in other industries too – is that if you’re looking at a new market, a new product, getting it to a point where private sector companies can reach that level of investment is difficult. There will be £9bn of investment from the private sector as part of this announcement, and that will increase over time.”

On the other end of the political spectrum of CCS critics was Reform UK’s Richard Tice. He agreed with the Greens that it is a “risky technology” but also told the Commons: “Ten million pensioners will find it utterly extraordinary that this government can find over £20bn when they cannot find £1bn to fund the winter fuel payment.”

Given how easy it is to draw such contrasts, how will Labour ensure it is taking the public with them on the journey to net-zero?

“Cheap renewable energy, made at home, is the best way to deliver energy security in the long term and bring bills down. We need to make sure we’re making that case,” Jones replies.

“Taking people with us is really important, and that’s why it’s so disappointing that the Conservative government rowed back on some of their climate commitments and their net-zero commitments, rowing back on things like electric vehicles and the targets for those. That sent a message to the country that ‘we don’t need to do this now’. As a result, we’ve seen, for example, sales of electric vehicles fall.”

She acknowledges that “you can’t expect people to buy things they can’t afford, or to reach for things that they don’t have the money for” and reels off a list of policies to bring down household bills.

One example of a net-zero measure often perceived as unaffordable is switching from a gas boiler to a heat pump. In an effort to boost demand for the latter, the clean heat market mechanism – often known as the boiler tax – was going to be introduced before it was delayed by Miliband’s predecessor, Claire Coutinho. Will it go ahead as planned next year?

“That’s Miatta’s responsibility. You should talk to her,” Jones replies, referring to her colleague Miatta Fahnbulleh, the minister for energy consumers.

But under the status quo it will come into force? “I think you should just talk to Miatta about that.”

Instead, Jones stresses that Chancellor Rachel Reeves has been keen to pair new infrastructure in an area with a clear community benefit, “whether that’s cheaper bills or whether that’s some kind of community fund – announcements will be made in due course about that”.

“We’re completely committed to nuclear, and made that clear in our manifesto”

The Conservatives have accused Labour of ignoring nuclear power – at this, Jones chuckles – with a final investment decision on Sizewell C reportedly deferred until 2025 and all nuclear plans under review because Miliband believes the last government rushed out proposals. So, is it right that Labour doesn’t have much interest in nuclear?

“Again, it’s not my area, but we’re completely committed to nuclear, and made that clear in our manifesto,” Jones says. “We need all of these things in our armoury, we need all of these things to help us reach our targets, and nuclear will be a very important part of that.”

Some say nuclear projects are so delayed and so costly in this country because we have such tough environmental regulations, for example around protecting fish. Does she recognise that these are putting off potential investors?

“What’s been most off-putting to investors is that we haven’t had a government that’s been committed to growth at all. They did literally nothing in 14 years in terms of nuclear apart from coming up with a strategy towards the end of their tenure,” she replies.

“I’m confident this government will encourage investment, and we’ve got a massive investment summit next week, which is going to be delivering on that. There is a fundamental difference between us and the previous government on our ideological view of this because the previous government didn’t believe in an industrial strategy.

“They thought that the government should stay away, but then intervene at the point of absolute crisis. We’ve seen that happen repeatedly over the last 14 years. This government believes in an industrial strategy.”

This is not unusual, she points out. Labour has watched closely as the US Democrats have made huge federal investments in clean energy via the Inflation Reduction Act (IRA).

“You look at America and what they’re doing with IRA and all the incentives they have to encourage investment – it is the new normal to have an industrial strategy that plans to both grow the jobs and skills in an area as you want, but also to make sure you’re secure for the future, because we’re in a very different political situation around the world. There’s huge insecurities and uncertainties that we need to navigate,” she says.

“We have lost out to other countries being better than us at encouraging investment, and we are changing that.”

Is Labour taking inspiration from what Joe Biden has done? “Certainly, they’ve encouraged hundreds of millions of pounds of investment into the US. We’re very interested in what they’ve been doing, and have been looking at that.”

But Jones adds: “Our market is different to America. Our geographical strengths, our universities, our ability to innovate, our skilled people, our democracy, our regulation – all these things speak to our favour.

“We’re seen as a good place to invest, generally, but in recent years, we’ve just lost out because other countries and other governments have been working harder than we have to encourage that investment. I don’t think it’s impossible to bring the investment back.”

Although Labour ministers are proud of how much they say the government has achieved in its early months, it has been far from smooth sailing. Stories around freebies and Sue Gray, now replaced by Morgan McSweeney as Keir Starmer’s chief of staff, have dominated.

Asked whether she thinks No 10 will function better with McSweeney at the helm, Jones refers to their first 100 days in government and – with characteristic message discipline – lists achievements from lifting the onshore wind ban to kick-starting Great British Energy.

“All of these things are hugely difficult to do, and we’ve delivered them at pace, over 100 days where we had the summer in between. I think we’re already delivering across government departments, solving things like the strikes,” she says.

Perhaps, then, the problem is that this delivery has not been communicated well enough? The argument for public sector pay deals – ie ‘we’re solving the strikes’, as she cites – was not made forcefully enough. There has been a void where there should have been a coherent story to tell the country about what the government is doing and for what purpose.

“I think we’ve been clear about what we’re delivering and why we’re delivering it,” Jones insists.

“When I think back to when I was a civil servant working on the Olympics in 2012 and how government was working across all the departments to make sure we delivered that incredibly difficult project, and we delivered it incredibly well, that was government working brilliantly as one.

“I think a lot of our mission-driven approach, where we’re working across government departments, where we’re working in partnership with each other rather than in silos, will define what this government can deliver. The mission-based approach will enable us to turn a corner on what’s gone before.”

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