Speech: Nuclear Industry Association (NIA) annual conference 2017


Good morning and thank you to the NIA for the opportunity to address you all today.

Firstly, I want to congratulate John Hutton on his new role as Chairman of Energy UK - which means I can look forward to him lobbying me on my entire brief!

I also want to thank John, his team and the many industry leaders here today, who have contributed to the development of the Nuclear Sector Deal.

Clean Growth and Industrial Strategy

Sector Deals are a major component of the Industrial Strategy, which we published just last Monday.

The strategy is one of this government’s top priorities, because it sets out, in practical terms, how we intend to build a Britain fit for the future – a Britain ready to embrace the challenges and opportunities ahead.

By focusing on the 5 foundations of productivity: ideas, people, infrastructure, business environment and place, we can unlock our potential and in doing so build prosperous communities across the UK.

We also identified 4 Grand Challenges – areas where we can seize the initiative with the technologies and industries of tomorrow. One of these is clean growth.

This follows September’s Clean Growth Strategy, which set out how the whole country can benefit as we cement our place as the world leader in low carbon technologies and industries.

The nuclear industry is well placed to deliver against these important objectives – providing clean, reliable energy while growing the economy.

The sector provides tens-of-thousands of highly-skilled jobs and benefits diverse regions across the UK, from Cumbria to Somerset and from Wales to Oxfordshire.

Look at Hinkley Point C: when complete, the plant will provide enough clean energy to meet an impressive 7% of the UK’s electricity needs…

…but the project has already begun to benefit the South West, which is now home to the 2,500 workers currently on site and where we have seen over £450 million in contracts let to local businesses in the first year.

We want to build on the momentum created by Hinkley and we continue to work closely with EDF, CGN, Horizon and Nugen on their proposals for future plants. I also welcome the news that Toshiba has selected a preferred bidder for the Nugen project, and we now look forward to continuing to work with KEPCO to discuss their plans.

At the other end of the fuel cycle, we continue to lead the way in waste and decommissioning and we are seeing the benefit of this at Sellafield. Today, our expertise across the nuclear sector is recognised throughout the world.

We have to use this as a springboard.

As the Industrial Strategy makes clear, we must build on the UK’s strengths to take advantage of the opportunities of the future.

So I welcome today’s publication from the Nuclear Industry Council of proposals for a sector deal which sets out a number of steps to deliver on that potential.

Boosting the competitiveness of the sector by driving down costs…

While supporting high skilled, well paid jobs in regions across the United Kingdom…

We will be working with industry over the coming weeks to explore their proposals in detail.

I am pleased with the progress of our discussions to date, and as co-chair of the Nuclear Industry Council, I have witnessed first-hand the determination shown by the industry’s leaders to see it succeed.

Government too is committed to a thriving and innovative industry, so I am pleased to announce a package of new measures to boost innovation and provide greater clarity on our future plans.

National Policy Statement (NPS)

Government recognises the value industry places on policy certainty, so today I am pleased to launch a consultation on siting arrangements for large scale new nuclear plants. This will begin the process towards designating a new National Policy Statement for conventional nuclear power stations deployable between 2026 and 2035.

This initial consultation sets out the proposed siting process and assessment criteria for sites potentially suitable for nuclear plants with single reactor capacity above 1GW.

Having this new National Policy Statement in place will provide reassurance and certainty to developers into the 2030s.

Geological Disposal Facility (GDF)

Looking further ahead, we recognise the need to implement a responsible long term solution for the disposal of higher activity radioactive waste.

That is why early in the New Year, we will be launching two consultations as part of the process to site a Geological Disposal Facility for higher activity radioactive waste. We will be consulting on a framework for future planning decisions and separately, on our approach to working with local communities in the siting process.

Internationally, it has been shown that ‘willing host communities’ are central to a successful siting of a Geological Disposal Facility. Strong, effective and lasting relationships, built on mutual trust and a shared vision of the long-term economic benefits for the host community, are key to successful delivery of a GDF.

These consultations will help reassure industry that investment in the supply chain, both in people and capability, will pay dividends once we move into the delivery phase of this project.

Again, this will support both the objectives of our Industrial Strategy.

On our current estimates, at the peak of construction, the site will support up to 1,000 jobs, with an additional 1,000 jobs in the supply chain.

When it’s ready, the facility will sustain around 600 jobs a year for more than a century, while delivering significant investment and innovation to local communities.

Innovation and future technology

Another key element of our Industrial Strategy is a big commitment to supporting innovation, with a pledge to raise R&D investment to 2.4% of GDP by 2027.

It is only by innovating across the nuclear supply chain that will we be able to maintain our competitiveness into the future.

This means new approaches to nuclear technology that drive down costs and improve safety.

I know you will be keen to maintain the pace.

After all, the UK has the potential to become a world-leader in developing the next generations of nuclear technologies.

Your appetite is clear; industry has repeatedly called for clarity on the government’s plans for emerging nuclear technologies.

So today I am pleased to be able to set out the first steps in our proposed way forward.

We have spent the last 18 months working closely with you to understand new technological developments, and to assess their viability through the Small Modular Reactor competition.

That exercise is now closed, but it has greatly informed the evidence base and helped shape our thinking in this area.

In particular, 3 key requests came through.

The first was that you want better and earlier access to Regulators.

So, as announced in the Clean Growth Strategy, we are providing up to £7 million of funding to regulators to build the capability and capacity needed to assess and licence small reactor designs.

This funding will also provide support for pre-licensing engagement between vendors and regulators. I’m pleased to say a very successful first event took place in November with a focus on regulatory issues relating to smaller water-cooled reactors.

The second is to help turn new developer’s ideas into detailed designs.

To help deliver this, over the next 3 years we will be providing up to £44 million pounds in R&D funding to support Generation IV advanced reactors.

The third request was to create the right market conditions to enable developers to bring new reactors to market.

A crucial element of this is demonstrating commercial viability – in particular, the ability of new designs and delivery mechanisms to attract investment and generate cost-competitive electricity.

Smaller scale designs, using modular and other modern manufacturing techniques offer the possibility of achieving these aims, and I am grateful to those developers who have shared their financial estimates with us.

But I want to go further, so I’m setting up an expert finance group to report to me by the spring on smaller scale designs, identifying the barriers to investment and how these might be overcome.

I will also be considering what further steps government might take to support smaller reactor designs and maximise the benefits to the UK supply chain.

In the Clean Growth Strategy we confirmed £460 million of funding to support work in areas including future nuclear fuels, new nuclear manufacturing techniques, recycling and reprocessing, and advanced reactor design.

As part of this I am happy to announce that we will soon be launching the second phase of the Nuclear Innovation Programme. This will include up to £8m pounds for work on modern safety and security methodologies and advanced fuel studies.

We have also recently awarded contracts worth over £5 million pounds for work on materials and manufacturing as part of the Small Business Research Initiative that we launched last year

… and I am happy that we will be working with AMEC, Nuclear AMRC, Fraser Nash Consultancy and the University of Sheffield on this essential work.

Our leadership in nuclear technology is not just about progress in fission technology. I also want to see us maintain our global advantage in fusion technology.

So I am delighted to confirm the announcement of £86m of funding to establish the National Fusion Technology Platform.

Our investment will support UK industry in targeting major contracts for nuclear fusion and build on our expertise in this potentially transformative field.

This builds on the pledge we made in June to underwrite our fair share of funding for JET until the end of 2020. These actions underline our commitment to close collaboration with our European partners on nuclear research and training as we prepare to leave the EU and Euratom.


While we are leaving the European Union, we have been clear that our decision to withdraw from the Euratom Treaty in no way diminishes our nuclear ambitions.

The objective for our negotiations is to seek maximum continuity with Euratom across nuclear trade, nuclear research and nuclear regulation.

And I am pleased to say that we are making good progress with our negotiations with the EU, with the IAEA, and with our key trading partners across the globe.

The first phase of EU negotiations has focussed on legal and technical issues related to nuclear materials and safeguards arrangements.

In his report, the Secretary of State for Exiting the European Union noted that:

We are now close to reaching agreement on the vast majority of issues set out in our position papers on Euratom.

So we are keen to continue this good progress by moving on as quickly as possible to the negotiations on the future relationship with Euratom, with the aim of maintaining a very close a relationship.

But we don’t underestimate the challenge we are facing. There are some areas, such as free movement of goods and services, which are linked to broader negotiations with the European Union.

That is why we are putting the necessary arrangements in place to provide certainty for the civil nuclear industry that it will be able to continue to be successful under any scenario.

This includes negotiating bilateral safeguards agreements with the International Atomic Energy Agency…

… Negotiating bilateral Nuclear Cooperation Agreements with Japan, Australia, the United States and Canada…

… Delivering a new domestic nuclear safeguards regime, regulated by the Office for Nuclear Regulation …

… Exceeding the standard that the international community would expect from the UK…

… And the Nuclear Safeguards Bill, giving government the power to establish that domestic safeguards regime. Good progress has been made on the bill, which passed Commons Committee Stage on 14 November.

We’ve also held many discussions with the nuclear sector to better understand your concerns, including my own attendance at September’s industry forum.

Most importantly, we will continue to engage closely with you in parallel with our discussions with the EU…

… And I can announce that we will be holding further industry roundtables on a recurring basis.

Today is another opportunity to engage, and in a moment you will be hearing from David Wagstaff who is the head of EU Negotiations within the Euratom team.

We also have a team of Officials from the Civil Nuclear Directorate in the event space to answer your questions on any of the today’s announcements.


These announcements all point to the great opportunities facing the nuclear industry, but we know the sector also faces a big challenge to remain competitive going forward.

This is emphasised by the falling price of offshore wind. While this is great news for our clean growth agenda, it puts a spotlight on nuclear. And the advancement of technologies such as battery storage will only increase the pressure on nuclear to compete with other clean technologies.

To do this, it is clear we must reduce costs across the nuclear lifecycle – from new build to decommissioning.

Government will play a key role in this, but there is no doubt that industry has to lead the way.

So I’m pleased to see you publish your vision for enduring success, based on ambitious, specific cost reduction… and I look forward to discussing these further with John and his team.

This government is committed to a bold, new Industrial Strategy, with Clean Growth as one of the central components and it is clear nuclear has the potential to deliver against these ambitions.

With a clear commitment to cost reduction, I look forward to supporting a strong and innovative nuclear industry; one which is fit to deliver for decades to come.

Thank you.

Speech: Speech to the Conference of Parties (COP) 23

Bula vinaka! [boo-lah vee-nah-kah, meaning ‘warm hello’].

It is such an honour to represent the United Kingdom at COP 23, and I want to thank the Fijian Presidency for its excellent leadership…

… and the people of Germany for their great hospitality.

As our Prime Minister highlighted in New York in September, the Paris Agreement is a brilliant example of effective global cooperation. Every country in the world has now signed the Agreement, and I am proud that the UK is part of this.

It has never been more important to accelerate our momentum. Recent extreme weather events have devastated the lives of many across the world. I would like to extend my deepest sympathy to all those affected and emphasise that we are taking our commitments under the Paris Agreement very seriously and we are taking action.

  1. Firstly, for the UK we launched a Clean Growth Strategy for the UK just last month – a critical set of measures to meet our domestic carbon budgets and help our global CO2 reduction process.

  2. I was also proud that the UK recently announced plans to phase out unabated coal fired electricity generation by 2025… our intent to end the sale of conventional petrol and diesel cars by 2040… and to establish our Green Finance Taskforce

  3. Earlier today the UK, Canada, and over twenty five other parties committed to forming the Powering Past Coal Alliance - a new alliance committed to phasing out unabated coal from power generation.

  4. We have also kept our promises in supporting poorer nations to accelerate the transition to a more resilient and low carbon future and play our role in meeting our collective goal of mobilising $100bn in climate finance per year by 2020.

Last year, we showed international leadership by successfully balancing our climate finance across mitigation and adaptation… and so far we have mobilised £2.2 billion public and £500 million private finance for climate change purposes in developing countries. This has helped over 34 million people deal with the impacts of climate change.

… and I am very proud of the over three hundred million pounds of UK funding announcements at this COP on protecting forests, encouraging private sector investment in sustainable infrastructure, and helping countries finance their existing emissions reduction plans.

Plus we have recently committed to double our 2017 funding to IPCC and make multi-year pledges to be sure that this important institution can continue to play a crucial role in providing independent, rigorous and balances scientific information on climate change.

The UK also continues to be a global leader in protecting oceans and marine life:

  • We are on track to protect 4 million square kilometres of ocean across Overseas Territories by 2020.

  • During this COP, we have also announced that the United Kingdom has signed up to the “Because the Oceans” declaration and I encourage others who have not done so, to do the same.

We see pre-2020 action as extremely important - on Tuesday we ratified the Kigali amendment to the Montreal Protocol on phasing down HFCs….

…and I am pleased to say that our Foreign Secretary signed the Doha Amendment yesterday.

We are not resting on our laurels. In the New Year we are looking forward to hosting the Commonwealth summit in London which will help to provide a springboard for future collective action…

We see it as crucial that over the next few years we achieve:

… Agreement on the rules that underpin the Paris Agreement…

… an increase in ambition as technology and innovation makes the transition a win win for the planet and our economy.

… but of course the action that really matters is in the real world where businesses and organisations are taking the signals from these negotiations to transform our future

There is much we can – and must – achieve together.

Thank you to all parties here for working together to make COP23 a huge success.

Speech: Launch of the ScaleUp Institute review 2017

Thank you all. It is great to be here. I would like to thank our hosts. And I would like to take the opportunity to acknowledge the work that the ScaleUp Institute has done.

Irene Graham and Sherry Coutu are tireless advocates of scale up businesses, along with their partner organisations, many of which I can see here today.

The institute undertakes important research, spreads best practice, and provides opportunities for both public and private organisations to come together and share ideas. All of this advances our understanding of how to build an environment where small businesses can become high growth businesses. And I welcome the publication of this review as another step forward for the Institute.

Everyone in this room will know how important it is that we help people start up and grow their own businesses.

High growth businesses are vital to the economy - so the more small businesses that can make that leap from start up, to scale up - the better for our economy. And we continue to implement measures that help to make setting up a business as easy as possible.

We start from a strong position. There were a record 5.5 million private sector businesses at the start of 2016. This is an increase of nearly 100,000 since 2015 and over 1 million since 2010. This is record of success is one of the reasons that we rank third in the OECD for start-ups.

We are determined to continue that success, just as we are determined to support those business which want to scale up. To this end, we have taken serious action since 2010. British Business Bank programmes are supporting almost £3.5 billion of finance to over 56,000 smaller businesses. We have invested an additional £400 million in the British Business Bank to catalyse later stage venture capital investments by the private sector, which will unlock £1 billion of equity funding in later stage venture capital. We will work with investors to further understand the obstacles firms face accessing capital outside London and the South East.

We are supporting more companies to innovate through the UK’s R&D Tax Credits scheme. In 2014 to 2015 more than 20,000 companies, including over 18,000 SMEs, claimed nearly £2.45 billion of R&D support. We are working with high growth innovative businesses and new entrants into sectors and markets to help ensure the value these businesses bring is realised.

We want to support businesses to thrive. High growth businesses in particular make a big contribution to growth and productivity. They also create around one third to a half of all net employment growth amongst established businesses. This is one of the reasons that we want to see more high growth businesses in the UK, but to realise that ambition there is more to do on scale ups.

The OECD ranks the UK as 13th for scale ups, so we must nurture those businesses with the potential to be high growth, create an environment where they can thrive and, importantly, find them and help them at the right time.

Soon, we are going to publish our Modern Industrial Strategy. We are facing tough challenges. Growth has not been even across the UK. Prospects for people and businesses vary too much. We have world-class businesses and sectors – but some are not yet achieving their full potential.

However, great challenges offer great opportunities. Leaving the EU allows us to make fresh choices about how we shape our economy and presents an opportunity to deliver a bold, modern Industrial Strategy. One which builds on our strengths, provides certainty, and stands the test of time, creating a resilient economy ready for the future. Our strategy will enable the UK to work more productively and boost the earning power of people, businesses, places and the nation as a whole.

Key to all of this is creating an environment in which business can thrive. The UK is already a great place to start and grow a business but we want to build on this. That’s why it is one of the pillars of our Industrial Strategy. We must ensure that businesses across the UK can access the finance and skills they need to grow and we must create the right conditions for companies to invest for the long term.

As part of this, we want to help promising, growing companies to scale up. As the government’s Scale-Up Champion, I have set up a Scale-Up Task Force to look at the issues preventing businesses from taking action to grow and why those that do are not always achieving their full growth potential, whether in scale or speed.

I am delighted to see that some of the members of the Task Force are here today. I would like to thank them for the energy, enthusiasm and innovative thinking that they have brought to our discussions so far. It has been a privilege to work with this group and it has given me a renewed appreciation of just how challenging it can be for people who want to transform their businesses.

The next step will be the publication of Industrial Strategy white paper. A lot of thinking has gone into the development of this paper and not just the work of the Scale-Up Taskforce; people across the country have responded to the green paper consultation.

There is also the Patient Capital Review, considering the barriers to accessing long term finance, and the Entrepreneurship Review into how we can support businesses to start well and grow. All this work will feed into the white paper, which will reaffirm our commitment to driving business growth and productivity.

We are already a start-up nation; now, the opportunity is to become a scale-up nation. Let us continue to press on with this agenda. There is a wealth of ideas and support in this room.

Thank you once again for inviting me and for listening to me. And I congratulate the ScaleUp Institute for the publication of this review.

Speech: Greg Clark lecture to the Institute of Energy Economics


So Charles, thank you very much indeed and thank you for staying despite the extensive introduction from Charles. I am sure Charles explained that we have had a series of votes on the Finance Bill and we have just finished so I am here with you and looking forward to questions and the discussion.

But can I say to Charles what a pleasure and privilege it is to be here under Charles’ chairmanship. As I am sure Charles said to you, when I was hotfooting it over Parliament Square, Charles and I worked on energy policy extensively in opposition and I can see many familiar faces in the room who we got to know and were advised by then.

I think that the conclusions and the analysis that we drew during that time - looking forward to a low carbon economy and putting Britain on a path to a prosperous low carbon future in which we could benefit industrially as well as economically from the changes that were in prospect - what we were on to there has stood the test of time and I was very grateful for Charles’ advice and support throughout all of it.

Now, this is billed as a lecture. I am not one that believes in lecturing an audience as distinguished as this rather the other way round.

I think rather than telling you how things should be this is a particular point in the development of our policy not least after Dieter Helm’s review published a few days ago just in time for Halloween I know that much of the industry was debating whether this was a trick or a treat.

But the discussion is being launched inviting your thoughts and reflections on what Dieter has had to say and I will say a bit more about that in a second.

But it seems to me that the energy challenge that is facing us is an important one and one replete with opportunities; it is an opportunity for those of us serving in public life to look at how we can make life easier for businesses, and for consumers today and in the future. And energy is one of these areas where I think we can make a very big difference.

So I want to talk today about Government’s role in responding to what is a very rapid pace of change in the energy sector and if you just think about what has happened in the last 12 months…

For the first time in 135 years the UK did not use coal to generate electricity in a 24-hour period…

And against many predictions, the price of offshore wind has almost halved in our most recent auction, achieving a price that most people did not expect to see even a few years ago until the 2030s…

Large-scale, low cost batteries started outbidding some more conventional generation in our capacity auction. And the list of innovations goes on across the energy sector:

Proliferation of new models of electric vehicles;

Cost transformations that we have seen for oil and gas operators in the North Sea, a very crucial sector that continues to be vital to our industrial future;

Smart technologies to help people save money in their homes.

Much of this entrepreneurship and innovation we rightly celebrated in last month’s Clean Growth Strategy.

And so no one can doubt this is a time of extraordinary change in the energy market.

And during a time of change, Government’s job is to make sure that the possibilities and technological transformation in particular is made available for people across the economy.

Energy and Industrial Strategy

And that should mean lower bills for consumers; families who want to heat their homes for less, businesses large and small who want to reduce their energy bills.

It means taking the opportunity to enhance our energy security, particularly in our electricity market, through a smarter, much more responsive system.

It means continuing to reduce our carbon emissions and to make sure that this transformation benefits our wider economy.

It seems to me that by investing in innovation and encouraging further the creativity that has long characterised the energy sector in this country, we can create new businesses and provide good jobs.

And high value industries will help to improve people’s earning power right across the country.

Now these are goals for the long-term; and we are thinking not just about the next few years but about the next twenty years as a strategic view of energy should.

So we need a long-term plan to work towards those goals.

And that is why the place of energy and clean growth is so important in our Industrial Strategy. We published a green paper earlier in the year and very shortly we will be responding to the consultation with a white paper in which again the role of energy will be absolutely pivotal in the proposals that we set out because the pipes and the wires, the power stations and the heating systems are obviously a crucial part of our economic infrastructure as a country.

But beyond that, the challenges and opportunities for our energy sector match many of those for our wider Industrial Strategy: building on those strengths that we have in this country by creating new jobs in the energy sector with a challenge to make sure that we equip ourselves with a skilled workforce able to discharge some of the tasks and duties that will be required.

And to make sure that this sector alongside our other areas of national strength continues to be and is even more in the future a hotbed of innovation and ideas, and with public engagement by government crucial to that.

Now some people were surprised when Theresa May made an Industrial Strategy so central to the economic agenda of the country.

But in my view every country has an industrial strategy, whether they are called one or not. Think back to the early 1980s: the assessment that was made of the challenges and the weaknesses of the British economy.

And so to be explicit and to be deliberate about an industrial strategy to consider what are the challenges of the future?

How well we are equipped to meet them? And what we need do to best to prepare to get the most out of them? It seems to me is an essential function of government, not an option.

So it seems we should set out our plans for each. But a strategy is not a strategy if it is a short-term set of measures, if it is an ephemeral set of policy directions.

It seems to me that if you are to have a strategy it needs to be there for the long term and in a context of public policy and public life that has elections every 5 years, and sometimes more frequently.

It seems to be all the more important that you embed the longevity of a strategy by making sure that it is done in a way that commands support right across the economy and right across the county and political divides.

And so the approach that we have taken in our consultation on the industrial strategy has been a very extensive consultation with the aim to produce - as we will in our white paper - a document, but more than that an approach.

I think it will endure because it captures the challenges that we face for the future and sets out an approach to them that if it does not enjoy total consensus on everything it does then at least there will be I think a substantial respect for the policies and steps that we are taking.

And of course nowhere is this more important than in energy where questions as diverse but substantial as how the consumer welfare is protected?

What is the role of technologies like nuclear power?

The future of the gas grid?

How we make use of our experience in the North Sea in terms of future exploration but also our expertise in decommissioning and in services around the world?

These are big challenges and opportunities that I intend to make absolutely central to our strategy. So let me say something about the Government’s role in energy markets.

This was of course one of the key questions in Dieter’s Cost of Energy review, which we published – all 242 pages of it – last week.

Anyone who knows Dieter Helm - I suspect everyone in this room knows - that Dieter is completely independently minded, is rigorous in his approach and is unflinching in his analysis, and I commissioned him precisely on that basis.

The work that he has done during the summer resulting in his publication last week is a tremendous commitment of his brain power, his experience and his conversations with many people in this room.

And I am very grateful for what is a comprehensive and radical piece of work just as we - certainly I - hoped and expected.

I wanted him to ask awkward questions and to challenge the status quo.

And the reason for that and the reason that I commissioned the review and the reason that I commissioned Dieter to do it was to start with a formidable set of evidence and prescriptions, a debate about the future of our energy, and in particular our electricity sector in the light of the radical and exciting changes in technology I described earlier.

Now our intention in responding to Dieter’s report and the context of our industrial strategy is to lay out - as we are doing through the strategy as a whole - a clear set of policies and institutions that we intend to endure.

So when faced with that challenge, as Dieter’s review points out, we have to ask ourselves a set of questions:

  • How can we reduce complexity in our energy markets and what is the role for Government?

  • How can we harness the potential of distributed energy and smarter energy systems?

  • What will the role of system operators be in the future?

  • What is the future of our energy networks and how we regulate them?

  • And what do we do about the rise of zero marginal cost technologies?

These are significant challenges and thorny questions but they could not be a more exciting set, it seems to me, of challenges and opportunities to move from a world in which energy was a precious resource that was strictly rationed in to the prospect of a world in which energy is abundant and available for a much wider set of uses across the economy.

Now I am sure that many people - I dare say everyone - in this room will have strong views about whether Dieter was right in his contributions or whether a different approach should be taken; whether his vision of the future of the power market was right or whether there was a different approach that should be taken.

We are keen to hear those views and so I am going to launch, in the next few days, a call for evidence in response to Dieter’s arguments and I would hope that this society and its members will contribute.

It is not just your written responses that are important though they are, we want to make sure that we understand and discuss and debate your views and recommendations.


I just wanted to say something in this context about an important part of the industry that has been garnering a lot of attention recently which is the retail side of the market.

It was evident from the election campaign that almost every political party in the country reflected the view of constituents up and down the country that there is a concern in the current working of energy markets for consumers in the retail sector, at least in the short term.

Our work to cut costs and drive investment will be taking forward our existing commitments for further Contracts for Difference and Capacity Market auctions.

We remain committed to nurturing the kind of low carbon economy that we set out in the Clean Growth Strategy. But in particular, a commitment to keeping bills low means ensuring the retail market is fit for purpose.

Since privatisation, as many people in this room know, this market has displayed some of the strengths and also some of the weaknesses that markets can produce.

On the “up” side, we have a hugely competitive business-to-business market with razor thin margins and a growing number of sophisticated intermediaries who can and do help optimise how businesses use their energy.

For example, today, a hospital might use its own backup combined heat and power generation to sell energy back to the grid at times of higher prices.

Another “best-of-the-market” example comes in the competitive section of the domestic sector.

The CMA found that about one in three customers is an active participant in the competitive segment of the market.

It is full of new dynamic firms bringing innovation, better service and a different offer to customers.

It has also developed a supporting and innovative array of switching sites and collective switch providers who work out better ways for consumers to save money.

And so at its best, the competitive parts of energy supply are comparable with some of the best in the world.

Unfortunately, at the moment, the gap between the best and the worst in domestic retail is too large.

This is a theme that we find in many parts of the economy today, a kind of emerging polarisation, with the savviest and those consumers who suppliers can identify a repeated pattern of behaviour that makes them prone to switch getting good service, good prices and feeling that the future opening up for them is bright and competitive.

While others whose behaviour can be discerned by their suppliers to be irresponsive to prices who increasingly know behaviour of consumers often better than those consumers know their own behaviour.

They can and do use that information to provide a service and a set of prices that is not the equal of what is available in the competitive side of the market.

And as a result, in my view, too many customers, often more vulnerable, are punished for their loyalty, as the CMA in its report made clear.

They found that as a result, an average of £1.4 billion a year was being paid over recent years more than competitors would pay in what the CMA described as a truly competitive market.

As you know the CMA proposed robust action to protect customers on prepayment meters.

But in my view, just like the minority report of the enquiry, the CMA’s remedies did not go far enough.

This view again was confirmed by some of the price rises on the standard variable tariffs that we have seen over the last 12 months that even Ofgem at the time had cause to question and criticise.

I also judged that the degree of harm identified by the CMA, given the time it will take for the market to transform, and the uncertain impact of the CMA’s remedies, required an earlier response.

As you know this was the view of one of the panel members, Martin Cave.

But I think it was also a more basic and philosophical difference in that a well-functioning market and I think consumers look to policy-makers to ensure that the market serves all customers.

I do not think it is compatible with a positive view of the market in which consumers are forced to enter a suspicious, defensive relationship with their suppliers, the requiring to be ever-attentive to the risk of being overcharged, and where a loyalty that some consumers want to place in their suppliers is rewarded with much higher bills than if they did not take that approach.

And so I think that as government and regulators we should be working to ensure that markets emerge that do enjoy the confidence of customers and where companies care for their long-term reputations and where it is possible for consumers to place their trust in their suppliers confident that trust will not be abused.

We are entering, as I said earlier, an exciting new world across the energy sector but in particular it seems to me in the domestic energy sector where decentralised energy production… where the potential use of electric vehicles as storage on the system can take us.

But in order to take most households on this journey, people will need to feel that they are in the hands of trusted and trustworthy organisations and to achieve this objective is going to take a mixture of rapid reaction by Ofgem… … publication of our draft bill to impose a temporary wider price cap on SVTs is there to address that…

and, I would hope, more voluntary and unilateral measures from the energy companies themselves.

Ofgem as everyone knows is an independent regulator and has the legal powers that are required to cap prices in consumers’ interests.

The quickest way in my view to get that price protection in place is for Ofgem to use these powers.

So, I welcome the Ofgem board’s decision to consult on extending the CMA price cap to more of the most vulnerable households this winter: a further million this winter and a further two million next winter is an appropriate use of those powers.

In all, between the pre-payment meter cap and Ofgem’s proposed extension of it, five million households will be shielded from paying excessive prices to stay warm this winter over and above what was intended, what was made the case on publication of the CMA’s report.

But it is well known and I have said in public that I believe Ofgem could and should have gone further within their powers, but I respect their independence and I welcome the quick solution that they have put in place and are taking for the most hard-up households.

But my view is that the limited cap is not in itself sufficient to eradicate the detriment that was identified in the CMA report.

Therefore we published draft legislation that will require Ofgem to design and set a price cap for all customers on standard variable tariffs and default tariffs that will be in place until 2020, with the option to extend it to 2023.

It requires Ofgem to find a design that addresses the harm without undermining the long term competitive nature of the market.

The cap is a temporary staging post while we – and the industry – move to a better deal for all households.

Now it seems to me that in setting that cap Ofgem will want and I know that they intend to make sure that the vigorous competition that exists in the competitive part of the market will continue and indeed this has happened since the imposition of the cap in the prepayment meter market.

As Ofgem pointed out in its State of the Market report just today, suppliers are still in that section of the market offering tariffs below the cap – the cheapest across the market was £70 below the prepayment meter cap in August.

As you know in Northern Ireland, where price controls are currently in place, the incumbent has lost 40% of its market share since 2010.

The other concern that some commentators have raised with price caps is that they can be set at a sufficiently low level that suppliers no longer want to supply.

I think that this can easily be avoided in the careful design of a cap. A well-designed cap needs to be responsive to the market but also to give consumers comfort that they are getting a fair deal. That their loyalty is not being exploited.

It seems to me that this is a role for sensible government and regulation – to be actively engaged in a market until it has settled into the equilibrium that everyone contributing to the CMA report the majority and the minority foresaw.

And so it is to Ofgem to design the right cap.

Dermot Nolan, the Ofgem CEO, has given a speech recently in which he considers various design ideas.

Dieter, of course, has developed his own ideas in the course of the Energy Review.

I welcome this – this is exactly why we wanted to publish a bill that could have the scrutiny that is required.

And it is important that energy companies themselves should wholeheartedly participate in this thinking.

And indeed, be trying to solve this problem unilaterally by getting their customers off these tariffs that have been identified by the CMA as being at the detriment to consumers.

Clean Growth

So we are taking action to protect consumers, but it is important not to lose sight of the medium-term changes that will be needed to respond rapidly to changing technologies.

And it is important to invest for the long term, too.

If we get our approach right – combining competition with particular interventions where needed; ensuring that markets are working for all consumers; making sure as Dieter suggests that we are alive to the possibilities, innovation and change that are replete in this country.

If we have an energy system where renewables, nuclear, gas and other technologies are working together to ensure security of supply.

If we have strength through diversity.

And if we target affordable bills for businesses and households, where we are helping people to stop wasting energy and improving the productivity of our businesses.

And where we champion very explicitly the prospects for clean growth – which is the last point I want to focus on this evening – where we are not just decarbonising our economy, but our businesses and innovators are capturing commercial opportunities of the low carbon transition.

That seems to me to be an area of promise for this country.

One estimate suggests that the UK’s low carbon economy could grow in the region of 11 per cent per year up to 2030…

… meaning that in just 13 years it could support as many as two million jobs…

… and export billions of pounds in low carbon goods and services each year.

So, by focusing on clean growth, we have big opportunities:

We can cut the cost of energy…

We can cut how much carbon we generate…

We can drive economic growth…

We can drive the creation of high value jobs across the UK…

And we can improve our quality of life.

This is precisely what our Clean Growth Strategy is all about - and it is great to see so many people here that were at the launch of the Clean Growth Strategy – it is about making a positive change to how we live.

For businesses, the largest pool of contributors to emissions, we will help them improve how they use their energy, aiming to improve their energy productivity by at least twenty per cent by 2030, saving businesses £6 billion a year…

…and we will make sure through our innovation approach that we support areas in which we have excellence and in which the UK has a commercial and technological opportunity.

One example of that is the work that we have been doing on battery technology and ultra-low emission vehicles. We have launched the Faraday challenge – designed to ensure that the UK is the place in the world where new battery technology especially in combination with the auto sector is not just developed but is commercialised.

Part of the Clean Growth Strategy of far-reaching goals and priorities, setting the scene for the long-term plans that will be relevant across government …

such as the upcoming 25 year plan from my colleagues at DEFRA…

…and the Department for Transport’s Road to Zero…

…and as I said the Industrial Strategy that will be published during the weeks ahead.

So the common denominator is clear: the model of clean growth, of innovation and industrial opportunity that this energy sector has needs to be at the heart of the thinking and the strategy for our whole economy.


To capture that prize we need a strategic approach.

Over the past year, we have been setting out some of the building blocks of that approach, we published the Smart Systems Plan, we published just a couple of weeks ago the Clean Growth Strategy, we set out the Faraday challenge for battery storage, the decision to restart our civil nuclear energy programme, the Helm Review of the Cost of Energy, and our Industrial Strategy Green Paper.

During the months ahead the conversation that we will have with everyone in this room will I hope put in place a set of institutions, policies and practices across the economy that will restore to this country the position of leadership in the future of energy that we have enjoyed at various times through our industrial history.

We have in this country the ingenuity, the expertise, the heritage but also the current practice to be able to make us I think one of the most important foundations of the economy of the future.

Thank you very much indeed for inviting me to come belatedly this evening I look forward to your initial questions and to the conversation that will I hope take place vigorously…

Speech: Launch of the Clean Growth Strategy

Good morning all.

It is such a pleasure to be here today to launch our new Clean Growth Strategy. Not only because I am required to, under the Climate Change Act.

But also because I am genuinely proud of what we have achieved so far in the United Kingdom and incredibly excited about the huge opportunities for us ahead.

You may wonder why we have asked you to come to this iconic venue, scene of so much national success, this morning.

Well there are two reasons.

The first is because we are benefiting in this building from one of the UK’s biggest low-carbon combined heating, cooling and power facilities – brilliant technology that we want to see deployed much more widely.

And the second reason is… well you will have to wait for that.

Before I begin to detail all the steps we are taking, I want to thank a few people.

First, I want to thank my Secretary of State Greg Clark for his longstanding commitment to action on climate change.

From his time as Shadow Secretary of State for Energy and Climate Change before the 2010 election, to his work across government, he has continued to champion the urgent need to cut emissions and seize the opportunity of clean growth and he deserves a huge amount of credit for this Strategy.

Second, I want to thank Nick Hurd, my predecessor in the department.

Nick put a massive effort into developing the policies in this plan, and I was really delighted I could take the baton from him [not just to steal all the glory] but because when I took on the Strategy, he had got it to a great place.

Thanks also to my amazing team at BEIS who have been working so hard for so long to put this Strategy together.

I also want to thank the Committee on Climate Change and their tireless chairman, Lord Deben.

You don’t realise until you sit in this ministerial chair, what a brilliant piece of legislation the Climate Change Act has proved to be, holding our feet to the fire as we consider every policy choice and empowering the Committee to keep us moving forward despite the short term political cycle.

Finally, I also want to thank all of you here today for your work cajoling, prodding, challenging, sometimes praising and, yes, criticising what we do.

We are not going to tackle the risks of climate change, nor grasp the opportunities of doing so unless we work together and I thank you for your commitment to this most important of issues.

You will know the gestation of our Clean Growth Strategy has been long, at times difficult and sometimes frustrating.

But we finally have a Strategy that is ambitious, broad and binding…

Sets out clear targets….

Harnesses the power of national innovation….

And re-affirms this government’s commitment to lead the way to a low carbon future.

So, today, in launching the Clean Growth Strategy I want to focus on three things:

First, to celebrate the extraordinary success the United Kingdom has achieved in delivering clean growth over the past two decades…

Second, as Greg said, to underline the enormous industrial opportunity for us that is emerging from the global transition to a low carbon economy - and how it will benefit us right across the UK.

And third to set out why this Clean Growth Strategy is distinctive and how it helps us meet the challenges we face.

As I said to start, the reason we are all here is the 2008 Climate Change Act, which had cross-party support and was a totemic piece of legislation. Because of that legislation we have to set out our strategy to meet the upcoming carbon budgets.

But we are also here because we want to be.

As the Prime Minister said in her foreword to our new strategy: “Clean growth is not an option, but a duty we owe to the next generation.”

And I think the UK should be very proud of our record in fulfilling that duty.

We were one of the first countries to recognise both the economic and security threats posed by rising sea levels and rising high temperatures.

And we have followed the guidance provided by that scientific understanding with action.

As Greg said, since 1990, we have cut emissions by more than 40 per cent while our economy has grown by two thirds over that time.

On a per person basis, this means that we have reduced emissions faster than any other G7 nation.

And not by sacrificing growth and competitiveness - we have led the G7 group in growth in national income over that period.

Let me just repeat that – we lead the G7 group of countries in cutting our emissions and growing our economy

Proving as false the view that we couldn’t protect the planet and raise prosperity at the same time.

Our world-first 2008 Climate Change Act set the pace for change, committing us to cut greenhouse gas emissions by at least eighty per cent by 2050.

And I’m pleased to tell you we are on track.

We over-performed against our first carbon budget, and are on track to do the same for the second and third. This is a fantastic achievement.

Our action at home is matched by our ambition to see action across the world.

This saw us playing a leading role in securing the agreement of 195 countries to sign up to the now historic Paris Climate Agreement…

It commits us to being among the largest contributors of international climate finance.

And it means that from the Prime Minister, Theresa May, downwards we continue to work across the world to ensure the Paris agreement and climate action are delivered and at the forefront of international action – UK leadership that has never been more needed than now.

I know many of you in this room are responsible for this incredible success.

A success which I don’t think we celebrate enough.

Well I promise to keep talking about it and to champion it on your behalf at every opportunity, home and abroad.

The commitments made by 195 countries in Paris also present an unparalleled economic opportunity.

We are seeing the start of a global shift toward clean solutions…

Low carbon ways to get from A to B…

…power and heat produced in way that helps the planet and helps people struggling with their bills…

…and heavy industry going carbon-light.

This shift offers UK businesses and innovators huge potential to shape the future of clean growth.

Because part of the reason why the UK is considered a leader in tackling climate change, is that we don’t just see it as a problem to be solved…

We see it is an opportunity, too.

So, by focusing on clean growth, we are presented with a win-win situation…

We can cut the cost of energy…

Drive economic growth…

Create high value jobs right across the UK…

And improve our quality of life.

This is precisely what our Clean Growth Strategy is about.

You will see a list of 50 major policies and plans in the Strategy Document today, with many supporting ones in the text behind them, and when implemented there will be real change

To give you just a few examples:

For businesses, the largest pool of contributors to emissions, we will help them improve how they use their energy, aiming to increase their energy productivity by at least twenty per cent by 2030, saving businesses £6 billion…

…we will establish an industrial energy efficiency scheme to help large companies cut their bills…

…and we will demonstrate international leadership in carbon capture, usage and storage, that we need to decarbonise and improve how we do business, including substantial new investment in leading edge innovation.

Our strategy will make a positive change to how we live.

We will make it easier for homeowners to make home improvements that can reduce their energy use…

…we will invest around £3.6 billion to upgrade around a million homes through the Energy Company Obligation by 2020, and extend that support to 2028…

…we will continue to support RHI (Renewable Heat Incentive)…

… we will work towards our aspiration that every home in the country will be rated Energy Performance Certificate as Band C by 2035…

And we will aim to upgrade as many private rented homes as possible where practical and affordable – helping many of those living in severe fuel poverty.

And, our Clean Growth Strategy will change the way we travel and make our air cleaner.

We have already said and reconfirm today we will end the sale of new conventional petrol and diesel cars and vans by 2040…

…it will invest £1 billion supporting the take-up of ultra-low emission vehicles, including helping consumers to overcome the upfront cost of an electric car…

…and we will make sure that those cars are powered by developing one of the best electric vehicle charging networks in the world.

Indeed you may have seen the hydrogen bus outside and we will continue to support different types of low carbon transport.

I get asked all the time – so what’s the magic bullet today?

And my answer is – we don’t have one. There is no one lever we can pull.

Instead we go through every major part of our economy and every part of government to set out ways to cut the emissions and drive innovation

Whether that’s investing in research and innovation for energy efficiency…

Or building new heat networks across the country to drive down the cost of keeping homes warm…

Whatever it takes, we are determined to make a difference.

And any set of actions that hopes to combat climate change has to cover all parts of the economy

And be focused on the next few decades, not the next few years, that is why the Clean Growth Strategy is a Strategy.

It has far-reaching goals and priorities, and sets the scene for other long-term plans government will be bringing forward like the upcoming 25 year plan from my colleagues at DEFRA, the DfT’s Road to Zero and our Industrial Strategy and its Sector Deals.

Our message is clear: this needs to be a priority for our government and the country for the years ahead, for future generations and not just us today.

And now is the right time to make these decisions because the benefits are huge.

The most recent research shows that the UK’s low carbon economy could grow over 10 to 12 per cent per year up to 2030 – four times faster than the growth of the UK economy as a whole.

By that estimate that would mean – in just 13 years – the UK’s low carbon economy would support up to 2 million more jobs and export up to £170bn low carbon goods and services each year.

And I’m not just talking about jobs in London and the South East…

This impact will be felt all over the country. We’ve already seen this happen, whether it’s the Siemens wind turbine blade factory in Hull or Nissan confirming that their Leaf electric car will be produced in Sunderland.

Like I said: a win-win situation right across the country, one that we are exploiting.

You may ask: what is different about this plan?

Well, it focuses areas of action where we get clear joint benefits:

cleaner air from low emissions vehicles…

…lower energy bills from improved energy efficiency…

… reducing waste and using resources efficiently…

…and creating a more biodiverse, resilient natural environment.

It is also a true cross-government approach – with real actions from buildings to transport, and from the natural environment to power generation.

And at the heart of our Strategy is a targeted focus on innovation.

Because I fundamentally believe that it is only through innovation that we can bring down the costs of low carbon technologies.

We want low carbon to mean low cost.

Because we need low cost to protect our businesses and households from high costs, including energy costs.

But – just as important – if we can develop the low cost, low carbon technologies here, we can capture the industrial and economic advantage from the global transition we are starting to see.

Finally, if we want to see other countries, particularly developing countries, follow our lead, we need low carbon technologies to be cheap.

So we have a new triple test to help us decide how to support new technologies:

First, does this deliver maximum carbon emission reduction?

Second, can we see a clear cost reduction pathway for this technology, so we can deliver low cost solutions?

And third, can the UK develop world-leading technology in a sizeable global market?

Of course, we can’t predict every technological breakthrough – if we’d have done that a few years ago, we would have been wrong – and not all of the choices we make will be the right ones.

That is the nature of working with such fast moving technologies.

But we are determined to create the best possible ecosystem for the private sector to invest and innovate.

If we get it right, we can see the benefits, just as we have on offshore wind, and the remarkable cost reduction we have seen where the costs have plummeted 50 percent in just two years.

And we have installed the biggest offshore wind base in the world.

To achieve these sorts of wins going forward and deliver the clean growth we need, it will require everyone to play their part.

This is not a job for central government alone.

It is a job for our devolved nations, local authorities, businesses and civil society working together; ambition and drive from every part of society and government is as important as diktats from Whitehall.

That is why we are delighted to celebrate in our document some of the amazing work that is taking place across the country.

And it is why we are setting up an annual ‘Green Great Britain’ Week, to celebrate the progress we have made, showcase UK technology and leadership, and inspire and motivate us to keep going, no matter the challenges, to deliver low carbon technology.

To meet our goals, we are going to need the full ingenuity, enterprise and determination of the British people working together.

So that answers the second question as to why we are here today.

Because we want to capture the spirit of cooperation and enterprise that gave us such an amazing performance at the 2012 Olympics from Team GB…

And use it to deliver a Green GB…

There won’t be medals on offer…

But the prize for all of us will be driving and capturing the benefits and opportunities for Britain and the world of our low carbon future.

I think that’s a race we all want to win.

Thank you.

Speech: How universities can drive prosperity through deeper engagement

I’m delighted to be speaking here at the 2017 Higher Education Funding Council for England (HEFCE) conference. I hardly need to tell you what an important time this is for higher education in the UK.

Over the coming year, we will be putting into action the wide-ranging reforms set out in the Higher Education and Research Act (HERA).

Next year will see the launch of the Office for Students (OfS), which will take up the regulatory baton that HEFCE has borne for the past 25 years. I’d like to take this opportunity to thank Madeleine, Tim, and all the staff of HEFCE for their service.

The birth of the OfS will mean the establishment of a new regulatory regime, with a strong focus on accountability, value for money and the student interest.

Our work to implement the HERA will also bring into existence a new national strategic funding agency, UK Research and Innovation (UKRI).

This is an important time for research in the UK as we put science and innovation at the heart of our industrial strategy and it is on this vital area that I want to focus today.

We have made a significant commitment as a Government to increasing the amount of R&D the UK undertakes as a country.

Last year there was a £4.7bn increase by 2020/2021 we announced in the 2016 Autumn Statement, itself the largest increase to public R&D for 40 years.

Meeting the new target will not be possible without the concerted efforts of Government, businesses, charitable funders and of course our brilliant researchers, not just the homegrown talent but critically also those who have been drawn here from all over the world.

And this is what I would like to speak about today.

It goes without saying that UK universities are renowned for the quality of their research. Indeed, today the government is publishing analysis by Elsevier that shows that the UK continues to punch above its weight as a research superpower.

In particular, the research shows that although the UK represents just 0.9% of the world’s population, we account for 9.9% of downloaded academic articles, 10.7% of citations and 15.2% of the world’s most highly-cited articles.

Relative to its comparator countries, the UK continues to rank number one Field-Weighted Citation Impact. This shows the vital importance of funding curiosity-driven research. It is something to be proud of and to protect.

But high quality publications do not by themselves guarantee impact in the world at large. Nor is there a simple, linear relationship between academic excellence and economic growth.

If the research that goes on in our universities is to have the greatest possible impact, our universities need to be deeply connected to the wider world. This is an important challenge for universities in any advanced economy.

But it is particularly important in the UK, because of the outsize role our universities play in our research and innovation system.

Over half of the money the UK taxpayer provides for R&D goes to the Higher Education sector - £4.8bn out of £8.8bn in 2015.

The result is that a far greater proportion of R&D – 26% – takes place in our universities – than in comparable countries, with 20% in France, 17% in Germany, 13% in the US and 12% in Japan.

This funding arrangement has helped ensure the excellence of British universities and their strong performance in international league tables, which give a heavy weighting to research.

But the fact that by international standards an unusually large proportion of our R&D activity takes place within our universities brings with it increased responsibilities.

Because they loom so large in our research ecosystem, it is particularly important that our universities engage with the wider world, and help to ensure that their work leads to wider economic and social benefits.

Today I would like to focus on two ways in which universities can help us achieve our ambitious goal: knowledge exchange, and international engagement.

Improving knowledge exchange

Universities’ engagement with the wider world takes many forms.

Public attention often focuses on technology transfer, intellectual property (IP) licensing and high-tech spin-outs, but these are far from the only way universities contribute to innovation and growth.

Collaborative and contract research conducted with businesses, consultancy, training, and broader partnerships with businesses and with civil society are every bit as important.

And of course, most universities play an important local economic role, whether by participating in economic development efforts, in skills development or by acting as hubs for businesses.

The analysis of the 2016 Higher Education Business and Community Interaction (HEBCI) survey, which HEFCE is publishing today, shows that this wider economic engagement is growing more slowly than the economy as a whole, at 1 per cent, and from a low base. It is also highly uneven, with parts of the country benefitting from it more than others.

Comparisons of our commercialisation activity with that of the US are revealing.

We require about £5m more research spending to generate each new spin-off than the US does. And US higher education institutions earn almost 40% more IP licence income as a percentage of research resources than those in the UK

This is income that can be ploughed back into research in a virtuous cycle of scientific discovery and innovation. I see the evidence of this collaboration on the ground. Examples such as the collaboration between the University of Lincoln, Lincoln College and Siemens which is inspiring a new generation of engineering and scientific talent in the region. Or the decision by McLaren to site their new factory in Sheffield in order to collaborate with Sheffield University Advanced Manufacturing Research Centre.

But the system as a whole needs to find a new gear.

The University of Queensland on Australia’s Gold Coast is one institution we could learn from. Its long-established tech transfer subsidiary, Uniquest, helps it generate over AUS$30m a year from IP – more than any Russell Group university.

The rewards to good knowledge exchange can be very great: New York University earned more from Remicade, its blockbuster arthritis drug, in a year, than all UK universities put together.

Britain has had its home run successes too: consider the £64m that the Institute for Cancer Research made form licensing last year, or the University of Surrey’s development of Surrey Satellite Technologies. But I would like to see these successes, and the wide range of business links that underpin them, become more common.

If we are to meet our national goals to increase R&D, we will need to continue to deepen these forms of engagement. Demonstrating this engagement and the associated economic impact will be important in making the case to the public and within government that increased public investment in research is justified.

We are taking a number of steps to drive engagement.

Increased weighting for impact in the Research Excellence Framework (REF) Impact

I welcome the decisions that HEFCE and HE funding bodies have taken to place greater emphasis in the next REF exercise on the impact of research - increasing weighting for impact to 25%).

Science & Innovation Audits are also helping to deepen the relationships between universities and their wider communities. Across the country, I have seen that the SIA process has not just identified the relationships between universities and their local partners, but helped define and strengthen them.

For example, the SIA for the Edinburgh City Region has helped them to develop a successful bid realising £300m in funding for data driven innovation. This maximises the opportunities afforded by the world class research base and will exploit the wide range of technologies being pioneered across the city region.

So, today I’m also announcing Wave 3 of SIAs - twelve more areas selected to map their local research, innovation and infrastructure strengths. As before, this round of SIAs will examine strengths in a number of sectors and disciplines, across the UK – from the Marine Economy in Scotland to Nuclear in the North West.

As before, this round of SIAs will be taken forward as collaborations between, universities, businesses and other institutions such as Local Enterprise Partnerships.

Measuring and funding knowledge exchange

One of the most powerful tools for increasing engagement has been our investment in Higher Education Innovation Funding (HEIF). HEIF underpins knowledge exchange and tech transfer capabilities and supports skills development and entrepreneurship.

It provides universities with the resources needed to invest in partnerships: from developing tech transfer offices, to helping ease the movement of staff between academia and businesses. Many of the most important collaborative projects in England were enabled by HEIF. That is why we are providing an additional £40m a year for Higher Education Innovation Funding to help support commercialisation, taking the total to £200 million for 2017-18.

In addition, we are also encouraging universities to collaborate on the commercialisation of research and working with business. HEFCE launched a £100m Connecting Capability Fund in April, and today I am also pleased to announce the first four funding projects, which will collectively receive just under £20m.

  • The first project is a collaboration between a group of universities in the East of England – Essex, UEA, and Kent – which aims to address the region’s productivity challenges by supporting company development and entrepreneurial skills growth.

  • The second project is a collaboration between a group of HEIs in the North of England – Manchester, Leeds, and Sheffield – which aims to establish an investment fund to improve access to finance for university spinouts.

  • The third is an extension of an existing collaboration between a group of universities in the South of England – the SET squared partnership – which aims to better support SMEs as they scale-up.

  • The fourth is a collaboration between a group of universities and research institutes across the UK – Oxford, Birmingham, Dundee, and the Francis Crick Institute – which aims to support the development of new therapeutics to tackle age-related diseases.

Given the importance of knowledge exchange to the national mission of universities, I believe there is a strong case for doing more to measure how good a job universities are doing and to link funding more directly to such an assessment.

It is noteworthy that the UK university system has public frameworks to track two of the missions of universities – the REF for research and the Teaching Excellence Framework (TEF) for teaching outcomes – but nothing for the third mission of knowledge exchange and engagement.

Since its introduction under a different name in the 1980s, the Research Excellence Framework has become a familiar part of the higher education landscape, playing a vital role in ensuring we fund only excellent science.

And the more recently introduced Teaching Excellence Framework, entering its third year, is already, as Universities UK’s (UUK) recent poll shows, acting as a powerful incentive on universities to focus on teaching quality and student outcomes

I am keen to explore what more we can do to evaluate the extent of knowledge exchange, engagement, collaboration and commercialisation - the impact that universities are having on the economy – and to recognise which of our universities are leading the way.

I see a key role for an enhanced performance assessment in creating a constructive competitive dynamic between institutions that incentivises them to make the most of opportunities they have for knowledge exchange.

We have the building blocks for such an assessment with the work undertaken by the knowledge exchange steering group led by Professor Trevor McMillan and considerable amounts of relevant data are already gathered, not least through the HEBCI survey and the HEIF process.

And there is evidence that there is excellent practice on knowledge exchange throughout the system: from Russell Group universities like Oxford and Leeds to newer institutions like Anglia Ruskin and Hertfordshire.

But at present this information is hard to access. And it is not weighted to reflect the differences in size and research income between different institutions. Therefore it does not have the impact it might in terms of identifying outperformance and underperformance.

With this in mind, I will be asking Research England within UKRI, working with the OfS, to consult with the sector and advise on the development of a new, public Knowledge Exchange Framework (KEF), that brings together a comprehensive range of measures of impact from collaboration and knowledge exchange.

Our ambition is that the new KEF will become an important public indicator of how good a job universities are doing at discharging their third mission, just as the REF rewards excellence in research and the TEF rewards excellence in teaching and student outcomes.

This will enable universities to benchmark and develop their own performance, and will increase universities’ accountability to taxpayers, local government and businesses.

Increasing HEIF

Alongside better data on knowledge exchange, there is also a case for greater investment that is directly linked to institutional performance in terms of knowledge exchange and tech transfer.

I am struck whenever I visit universities by the impressive initiatives and ventures that have been enabled by HEIF funding.

The University of Central Lancashire, which established its Centre for SME Development in 2016, is a case in point. Its first annual report showed that it had interacted with more than 500 Lancashire SMEs. Its current funded business support projects for SMEs are worth almost £10m and are set to reach almost 1,000 SMEs in the region.

Or take Reading University, which is investing in a new inter-disciplinary Centre for Food, Nutrition and Health. This will extend its relationships with the agri-food industry, enabling it to deliver research, innovation and education that addresses their needs and contributes to economic growth in the sector.

I believe it is possible to do more. We have already reiterated the important contribution that HEIF is playing to the delivery of our Industrial Strategy through the £40m pa uplift taking HEIF to £200m in 2017-18. The Witty Review recognised the critical role of HEIF and recommended increasing funding to £250m pa and I am keen that we take steps to do so.

In addition, I am asking UKRI and Research England to consider the right balance between HEIF and quality-related (QR) funding – so that as we give recognition to the vital role that universities must play in their engagement with others in the UK economy, we do not lose sight of the need to support curiosity-driven science that has no immediate commercial goals.

This is not just because the pursuit of knowledge is the hallmark of a civilised society, and a good thing in and of itself, but because unanticipated scientific breakthroughs can turn out to be even more valuable than the outcomes of agenda-driven research.

I believe this stronger commitment to knowledge exchange and engagement will give universities the confidence they need to set ambitious plans and bold partnerships – benefitting national and local economies, and society at large.

International engagement

The second aspect of deeper engagement I would like to discuss is engagement with the wider world. Today’s Elsevier report shows the remarkable global reach of UK research. It shows that over 51% of all UK publications in 2017 were co-authored, highlighting that UK researchers are highly collaborative internationally. The only other comparator country to surpass the UK was France, ahead of the UK by just 0.3 percentage points. And the UK’s share of international co-authorship has increased annually from 2010.

Importantly, internationally co-authored articles are generally associated with a higher field-weighted citation impact. Continuing to work with international partners is critical - our research strength and our innovation have been built upon a history of collaboration.

As the Government set out in its recent paper, we will be seeking an ambitious science and innovation agreement with the EU - one that continues high levels of collaboration with European partners on major science, research, and technology initiatives.

In her Florence speech, the PM set out the UK’s commitment to developing the deep and special relationship we have with Europe. She said “We may be leaving the European Union, but we are not leaving Europe”. Continuing with - and building on - our collaboration with our European partners will remain critical to our long-term economic development. So, we have made our intentions clear in this area.

We want to remain a player in European science, research and innovation programmes. And we will continue to attract the best talent from across the world, including the EU.

The UK will continue to welcome the brightest and best from across the world, including the EU. The UK will remain a hub for international research and innovation talent.

So, we will continue to increase our levels of international engagement on science research and innovation. Not just with Europe, but across the world.

For example, UK-US collaborations have resulted in 26 Nobel prizes for science and economics. Nearly 14% of the UK’s internationally co-authored papers are with the US, almost double the next nearest country - Germany. And the UK is the number one destination for US R&D company investment outside of the US, accounting for over 10% of US foreign R&D investment.

That’s why, last month I signed the first formal Science and Technology Agreement with the US, providing a framework for UK institutions to collaborate on joint scientific research and technology programmes with the US.

We recently agreed to invest £65m in our ongoing partnership with the United States on the Deep Underground Neutrino Experiment, which will probe fundamental questions about the nature of matter and the evolution of the universe.

Alongside this, we have signed a new Memorandum of Understanding (MOU) with Canada which will strengthen bilateral cooperation in science, technology, innovation and entrepreneurship. The MOU kicks off work to build lasting partnerships between our science and innovation agencies, and will initially focus opportunities in the fields of quantum technology, clean technology, agri-tech, and advanced manufacturing. But we don’t want to stop there - this is a model that we are keen to repeat with other countries to further expand and enhance our global partnerships.

And that’s why I’m pleased to announce that Government is investing an additional £18m in the Rutherford Fund this year in 2017/18 to attract the brightest research talent to the UK. This builds on the £100m that we have already committed to Rutherford over the next 4 years.

This new funding will enable more than 200 additional significant fellowships to start in the current financial year, at our world class institutions, including at the Crick and the Turing Institutions, at UK museums, at the British Academy and at UK universities. It also includes 50 Commonwealth Fellowships.

Our ongoing investment in talent will help to reinforce the UK as the go-to country for innovation and discovery.

Reinforcing the importance of the humanities and social sciences, £5m of this global talent funding is through the British Academy’s flagship Post-Doctoral fellowship scheme with leading universities - delivered alongside a further £5m to support and develop domestic research talent.


So, Science, Research and Innovation are central to our industrial strategy and will be critical to the UK economy in the future – it improves our productivity, the economy and helps people prosper across the country. Universities’ engagement and collaboration with others – domestically and internationally - is now more important now than ever and I and other Ministers in this Government, through our industrial strategy, will be doing everything we can to support them.

Thank you

Speech: Winner of the 2017 Prime Minister’s Better Public Building Award

Good evening ladies and gentlemen. I am very pleased to be here with you this evening to present the Prime Minister’s Better Public Building Award at the 2017 British Construction Industry Awards.

An awards ceremony which recognises and rewards excellence in construction and how projects can transform society. I am also informed that this awards ceremony is in its thirtieth year, so congratulations to you all!

Thanks to your hard work, the construction industry in the UK has a world-class reputation and underpins our country’s continuing economic growth – creating much needed infrastructure and jobs, and helping export UK construction expertise around the world.

The government has a strong role to play in shaping this industry, with over a quarter of construction output from the public sector and central government being the biggest single construction client.

That is why these awards are supported through the Prime Minister’s Better Public Building Award, sponsored by the Infrastructure and Projects Authority in the Cabinet Office and the Department for Business, Energy and Industrial Strategy.

What makes a ‘better’ public building

Tonight we are all here to celebrate some of the very best examples of construction - from grand projects that are reshaping our cities, to smaller, more local, efforts that are serving our communities.

But these awards are not just about the technical merit of a building or the precise functional feat of engineering, important as they are. They are also about recognising how better building and construction can transform lives, communities and the UK as a whole.

A better public building achieves excellence in design quality, innovation and procurement practices.

A better public building is first class financial management - delivered on budget and providing value for money for taxpayers.

A better public building is constructed on time and has real social and environmental value for its local community.

These are the principles this government is committed to and that we are recognising tonight.

Government Construction Strategy

And these are the principles that are embodied in our Government Construction Strategy.

Our strategy sets out how we want to make the government a better client, improve construction productivity and deliver £1.7 billion efficiencies and 20,000 apprenticeships in construction by 2020.

We know that innovation inside the public sector can be used to support growth in the private sector. So we want to work with industry to ensure effective procurement, efficient delivery, competitive pricing, and design excellence all become the norm.

Tonight’s winner embodies all of these principles - it is a building that is well designed, innovative and enables a smarter public service.

It acts as a central hub, supported by nine local offices, putting this service more in touch with local communities.

It was delivered on time and on budget - in fact funded from the sale of its former building - so at no extra cost to the taxpayer! As Minister for Government Efficiency, you can see why I am particularly excited about the winner this year!

This approach has enabled more investment to be put into the public services the building is there to support. And despite its high security, the design of the building makes it feel open, welcoming and more transparent to the public it serves.

As the judges said, it is ‘fit for function’ in the best sense of the phrase.


I want to congratulate everyone involved in the projects shortlisted for the award this evening.

We continue to see increasing numbers of excellent projects all over the country. They are an inspiration to all public sector clients, and I’d like to see every new public building project meet the same high standards.

But there can only be one winner. So I am delighted to announce that the winner of the 2017 Prime Minister’s Better Building Award is….

… the New Scotland Yard building on Thames Embankment!

Please join the stage to collect your award. Thank you.

Speech: Supporting small business to start-up, scale-up and grow

It is a pleasure to be here today at the UK Commercial Finance and Banking Conference in the City of London, one of the world’s preeminent financial centres.

Throughout the 19th century, the City was the world’s primary business centre, and it continues today to play host to many of world’s leading trading and financial services companies.

Indeed, it ranks first globally in the Global Financial Centres Index.

No other city can rival its unique environment for success with access to the best talent in the world; high quality business education; a stable tax environment; effective regulation, all in an entrepreneurial and innovative setting.

Today, we benefit from having many of the financial sector’s leaders under one roof.

As Minister for Small Business it is my privilege to work in collaboration with you all, to ensure that UK businesses have every chance to grow to their full potential.

We are already in a strong position.

At the start of 2016 there were a record 5.5 million private sector businesses.

An increase of 97,000 since 2015 and over 1 million net new businesses since 2010. More than 99% of these are SMEs.

Small businesses employ 12.5 million people – 48% of the total UK private sector.

They boast a combined annual turnover of £1.3 trillion – 33% of all private sector turnover.

There is no direct measure of the number of business start-ups in the UK, but based on new business bank accounts opened, it is estimated that there were around 416,000 UK start-ups last year.

We can be proud of this. We have an excellent record in creating businesses, coming third in the OECD’s ranking for start-ups.

We rank seventh globally in both the World Bank’s Doing-Business Index and the World Economic Forum’s Global Competitiveness Index.

All of which goes to explain why private sector jobs have increased by 3.6 million since the quarter May to July 2010.

The government is determined to continue this success.

We heard an expert account earlier from Shiona Davies about the state of the market for SME finance.

The SME Finance Monitor is an invaluable source of up-to-date information and is required reading at BEIS.

I won’t comment on Shiona’s masterly analysis, so let me offer 2 more general thoughts.

As we heard in the panel session, the market for finance is more responsive, more diverse and offers more options than ever before.

That’s good news for London, the FinTech capital of the world, and also for SMEs across the country who ‘should’ benefit from these new services.

I say ‘should’ because there is evidence that some areas are still missing out.

If we look at equity finance for example, there is a huge disparity between the ‘golden triangle’ of London, Oxford and Cambridge and the rest of the country.

This morning’s panel considered some important questions:

  • Is there an information gap?
  • What support do SMEs need?
  • How can we stimulate demand?

It’s important to understand these in context. Our answers must be tailored to individual businesses in a specific location.

That is why government has put in place a network of 39 Growth Hubs across the country, supporting SMEs in their local area to thrive.

I know that many of you here already work with Growth Hubs, but I would urge all of you to increase collaboration at the local level.

It is easy for us to forget just how focused business owners are on running the business from day to day. But it’s essential that knowledge is shared.

If we are to have any hope of bridging the information gap, we need to make our communications easier to access and even more relevant.

We already have an excellent product in the Business Finance Guide which UK Finance members helped to create.

Several of you also distribute the guide to your customers and direct them to the website. Thank you for that.

Visitor numbers to the website have trebled since last year, so we are on the right track.

I hope you will keep working with the British Business Bank to make the Business Finance Guide even more compelling, relevant and easy for businesses to access.

Trust in banking

Still, there is not much point in giving advice to people who don’t trust you.

And it is sometimes suggested that there has been a breakdown of trust in banking, leading to low demand.

While overall trust in banks is actually quite high in this country – higher than in Germany, France or Italy for example – we do need to look at the experience of individual businesses.

Especially when their finances are under stress and they are looking to their bank for support.

Given the importance of trust, and the importance of standards in building trust, it is perhaps surprising that agreed industry standards for SME banking were only put in place earlier this year.

The Standards of Lending Practice for Business Customers are extremely welcome, and I would like to thank everyone involved in developing them, some of whom are in this room.

These are clear, well-written, important principles that will make a real difference – so long as they are applied in the spirit in which they were written.

Let me just remind you of a few principles from the Standards, for SMEs in financial difficulty. Firms should:

  • demonstrate an empathetic approach;
  • apply an appropriate level of forbearance; and
  • work with and support a customer’s turnaround plan.

These behaviours will take time to embed in everyday practice.

My request to you is this: please don’t wait for an audit from David Pickering and his team at the Lending Standards Board.

Start now. Make sure that the Standards are understood and acted on in all parts of your business but especially in your teams dealing with recoveries, where business owners are at their most vulnerable.

This afternoon’s panel will discuss the issue of redress, how to provide effective dispute resolution and put right past errors.

At the same time, let’s resolve not to repeat those mistakes.

Applying the Standards of Lending Practice will go a long way to make sure that such events can never happen again.

The strength of UK finance will be an invaluable asset for the economy and the country, whatever the future may bring.

That future will be built on strong foundations.

I look forward to working with you all to ensure that businesses in all parts of the country get the finance they need to support more businesses to scale-up and reach their full potential and to build trust by ensuring that business customers are treated fairly and consistently.

Thank you.

Speech: Culture Secretary’s speech at Bazalgette Review launch

Thank you to Sir Peter for his hard work in completing such a broad, thorough and thought-provoking review - some really interesting and bold recommendations for both industry and government to pursue, and across a very wide range of areas. And made much more interesting than a normal review by the quotes across the document which are drawn from British creative life. I can certainly relate to Kate Tempest’s call to action - “move fast, don’t stop, you got things to do” - as I’m sure you all can too.

And thank you to you all for making time to be here at such short notice. Turnout at a few days notice shows how much passion and commitment there is in relation to this subject, and how much interest in hearing what Sir Peter has to say.

That we are here today is testament to the importance of the creative industries to the UK - increasingly recognised across government as a key sector of the economy. This is partly about a sector holding its own with more traditional industries such as manufacturing - industrial policy is no longer just about widgets and hardware. It is also too about a sector holding its own with tech and other celebrated growth sectors.

Now - as Business Secretary, Greg has to be even-handed across the economy. As Culture Secretary, I can be a little more partisan. To underline just how important creative industries are to the UK economy, Creative Industries Federation analysis of PwC data suggests that they deliver four times the GVA of the automotive industry, six times as much as life sciences and nearly 10 times that of aerospace. Between 2011 and 2015, the sector created three times more jobs than the economy as a whole. The UK is the third-largest exporter of cultural goods and services in the world – just behind China and the USA. I spend a lot of my time reminding my Cabinet colleagues of these kinds of fact.

But they matter too for Britain’s place in the world – our values, soft power and influence. Creative Industries are in many cases at the very forefront of how the world perceives us. Whether it be music, film or design, they strengthen the UK brand, adding impetus to our growing creative content and services presence around the world, strengthening trading links in key emerging economies and influencing wider perceptions of the UK.

And they also matter intrinsically. They produce the things that enrich lives and give them meaning. That’s true of the ‘content’ sub-sectors of the Creative Industries - TV, film, games, music, publishing, fashion. It’s also true of the services side – the architecture that RIBA, our hosts today, do such fantastic work to promote, the design that creates our products, the advertising that influences our desires.

I hope it is clear to you that Government is committed to supporting the Creative Industries – for example, through the creative sector tax reliefs, which paid out over £600 million last year alone, securing in return nearly £2 billion. And more broadly in securing the best possible outcome for the sectors as the UK prepares to exit the European Union and looks to do trade deals around the world.

But there is still more to do - and that’s what today is all about. Creative industries in Britain and beyond face both real challenges and opportunities. Much of that is driven by technology and changing patterns of consumer demand. The “D” word - Digital - is now at the heart of the DCMS as the Department of Digital, Culture, Media and Sport. It is transforming the whole economy, but bears strongly on the Intellectual Property-rich, small and micro-dominated businesses that make up much of the creative industries. But change also arises from policy landscape - for example, the opportunities presented by the Government’s Industrial Strategy, and its clear focus on place, inclusive growth and rebalancing the economy.

And that’s where the sector deal comes in. As Greg has said, the Government has essentially asked business to make it an offer it can’t refuse. In the words of the IS Green Paper there is ‘open door challenge to industry’ to be ‘driven by business to meet the priorities of business’. It seeks ‘a clear proposal for boosting productivity’ in order to ‘drive growth right across the United Kingdom… creating more high-skilled, high paid jobs and opportunities’.

We have a once-in-a-Parliament opportunity to capitalise on this through the promise of a sector deal.

In devising a deal, the Creative Industries have made good progress so far thanks to the work of the sector and of course Sir Peter’s independent review, which we will hear about in a minute.

We have a down-payment today with the announcement of the AHRC funding for research and development partnerships across eight creative clusters.

The key challenge now is turning a lot of compelling ideas, at varying stages of development, into a tangible agreement. An agreement which is credible and has buy-in from both Ministers and the industry.

There is definite appetite in Government to land an ambitious deal and this review is a really valuable input. But there are also real constraints – not least financial. As you would expect in a time of continued austerity, the bar to new Government money is very high. The starting point is spending existing resources better.

There is also time pressure. As ever with these things it is more important to get it right than to get it fast. But we also want to get on and reach an agreement as quickly as possible, taking advantage of the platform the Industrial Strategy provides. Success will depend on the commitment behind the offer from industry, and how that fits with the strategic challenges set out in the Industrial Strategy Green Paper.

So I encourage Creative Industries leaders to continue to work together and wow Government with a compelling proposal. As the statutory sector body, the Creative Industries Council will lead negotiations on the deal - and I pay tribute to Nicola Mendlesohn who has done a fantastic job as chair - with critically important input from the Creative Industries Federation, under John Kampfner’s outstanding leadership, as well as from others across the sector. We are keen for those discussions to move forward.

Times are challenging but the prize is big so let’s be bold and ambitious; do what you do best - thinking creatively! - so we can deliver real change that takes the UK’s creative industries to the next level of success.

I am now delighted to hand over to Sir Peter to tell you about the detail of his review.

Speech: Minister Claire Perry reflects on her time at Climate Week

Opportunity. It’s a word you hear a lot in America. And it’s something I heard time and time again last week during New York Climate Week.

Climate Week represented the first major gathering of international climate leaders since the US announced its deeply regrettable decision to withdraw from the Paris Agreement. But it’s clear the momentum that produced that historic accord is unchanged – the global, unstoppable shift to a low carbon economy is transcending the actions of any one country and that brings with it a huge amount of opportunity for Britain.

Recent analysis from PwC shows that the UK is decarbonising faster than any other G20 nation. Since 1990, we have grown our economy by two-thirds, while cutting emissions by more than a third. We should be proud of this progress; however the government knows that there is much more to do.

This is why the Prime Minister’s confirmation last week of our plans to end dirty coal generation by 2025 is so important. It’s an unambiguous commitment to a low carbon future that sends a clear message to clean energy investors around the world: the UK is open for business.

Decarbonisation is going to take more than government policy. We will need to find ways to deploy the public and private capital to finance this revolution – the International Energy Agency estimates that more than $13 trillion will be needed between now and 2030 just to finance the clean energy countries will need to meet their Paris agreements. It’s here the UK has a competitive advantage and a chance to build on one of our greatest strengths – that we are the greatest finance capital in the world.

So we’ve got all the basics we need to lead the way on green finance but how do we make the most of this opportunity? On government’s part we must ensure that the UK remains the financial services centre of the world and the global hub of financial innovation. And we must do everything we can to accelerate the growth of green finance by drawing on the expertise of the City.

That’s why I’ve been working with the Economic Secretary to the Treasury Stephen Barclay to establish a Green Finance Taskforce that brings together leading figures from the finance sector, chaired by Sir Roger Gifford, who also chairs the City of London’s Green Finance Initiative. This will meet for the first time tomorrow (Tuesday 26 September).

We will also be working with the Green Finance Initiative and British Standards Institute to develop a new set of voluntary green and sustainable finance management standards, alongside the industry.

And we’re endorsing, officially, recommendations from the Taskforce on Climate-related Financial Disclosures which encourage all listed companies to align climate-related risk management and financial governance.

I launched the plans last week alongside Theodore Roosevelt IV – the great grandson of the former President and Managing Director for Barclays Capital Corporation – and Michael Bloomberg who chaired the Taskforce on Climate-related Financial Disclosures. It is clear from the enthusiastic response that we are tapping into something the world needs to make the low carbon transition and can build on our thriving financial sector which already has $7 trillion of assets under management and employs more than 2 million people.

It is increasingly clear that if we meet our decarbonisation challenges but also look to build on our positions of strength in finance – or offshore wind or electric vehicles – we can export our expertise, generate jobs and improve productivity right across the country. And that means that while the low carbon challenge is a steep one, the opportunity is far greater.