Examination of Witnesses (Questions 120-123)
DEPARTMENT OF
TRADE AND
INDUSTRY
21 FEBRUARY 2005
Q120 Chairman: May I ask a question
about research and development? There is mention of this in paragraph
2.39 on page 29. You spent £230 million on renewable energy
research and development in the past 16 years. Why do you have
so little to show for it?
Sir Robin Young: It is easier
said than done is the answer. This is an extremely complicated
and difficult topic. There are no easy solutions and no other
countries have done any better. It is not the case that we have
not tried and some good research has come out of it, but I agree
that there is no magic solution. If there were, we would have
found it or some other country would have found it.
Q121 Chairman: It says here ".
. . many contractors, especially wind generators, said they had
not received significant benefits from technological developments
funded by the programme". It is all rather too difficult,
is it not?
Sir Robin Young: In that particular
case it is the Danish and German turbine sectors which are extremely
strong and they dominate the onshore wind sector. It is probably
true that the UK firms, who have come in late, will have found
it difficult to compete. This is highly competitive and a very
difficult sector, but one in which I hope the United Kingdom will
take a lead if we hit our 10% target. We should force innovation
and change in a way which is a good use of a regulation.
Mr Williams: Just a thought at the end
of this process. It seems rather grotesque that you are subsidising
people to produce electricity at a price which is unaffordable
to many consumers, therefore you are now going to subsidise the
consumers to use the subsidised production. It seems a rather
convoluted way of solving your problem.
Q122 Chairman: That is a question
worthy of Sir Humphrey. See whether you can answer it.
Sir Robin Young: I do not think
I understood it. At least I am prepared to admit that.
Q123 Mr Williams: You indicated in
answer to my colleague that ministers would take into account
that their constituents would not be able to afford it, therefore
obviously the only way you can do that is by in some way subsidising
them to buy it. I am just pointing out that it seems poetic. I
am not demanding any great intellectual response. It seems a rather
grotesque situation that you are subsidising to produce what you
are going to have to subsidise to use.
Sir Robin Young: In so far as
you are using the price mechanism to get money into a sector,
it will have differential effects on different consumers, so the
government has to adjust its position and help the poorest consumers,
otherwise you cannot use the price mechanism at all to put money
into the sector. It is a poverty alleviation issue.
Chairman: That is a very fair final answer
from you, Sir Robin. Thank you very much, gentlemen. It is obviously
not for this Committee to argue with the policy objective, but
it is for us to question whether, in order to meet that policy
objective, we are not adopting a very complex mechanism. Thank
you very much, Sir Robin.
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