Event: BMW conference, Berlin, 2 December 2009 - ‘And this is just the beginning-a sustainable approach for individual mobility’
Now I know the UK is seen in Germany and elsewhere as a country that values bankers more than engineers or manufacturers. But let me assure you that that image is very far from reality. The UK is still the world’s sixth largest manufacturer, and we are all too aware that our manufacturers, our engineers will hold the key to our future economy.
The global financial crisis has shown all of us the centrality of innovation and new manufacturing technologies to economic growth as we emerge from this recession. And ultra low carbon represents a tremendous economic opportunity.
Of course, we’re inclined to think of the shift to a low carbon economy as if it were something as incidental as putting in an energy efficient light bulb. But when you sit down and think about it you realise it means changing everything we're used to. The way we power our factories, the way we run our homes, and the way we fuel our cars. It's nothing less than a new industrial revolution. And that means our focus will have to be on revolution not evolution.
And what's driving this huge economic shift, this need for a fundamental re-ordering of the way we do things, is the inevitability of climate change. That's why the UK is committed to a legally binding target to reduce greenhouse gas emissions by 80 per cent by 2050.
The UK is keen to help lead the way in low carbon. We have an estimated 50,000 companies employing 880,000 people in the UK in the low carbon market. But to fully realise our potential in a sector already worth around £3 trillion worldwide we realised we needed to do more to reshape our economy and prepare for this low carbon revolution.
So our new industrial policy looks at how we can have a national capability in the areas where we believe our future interests will lie – in advanced manufacturing, in nuclear energy and in low carbon. And, since, travel accounts for around 21 per cent of the UK’s total domestic greenhouse gas emissions, the need to place our travel on a more sustainable footing is absolutely key.
But the gulf between ambition and success is vast. Consumers aren't simply going to switch to low carbon alternatives unless convinced it is right for all their needs. So today I would like to set out three ways in which the UK Government intends to have a world class capability in low carbon travel.
Educating our consumers
Firstly, we're making sure consumers are properly informed to allow them to make greener choices. Our ‘Act On CO2’ campaign encourages people to reduce their carbon footprint whether it's through better journey planning, vehicle sharing, cycling or walking. We know this sort of campaign can have a real impact. In the past five years the three Sustainable Travel Towns of Darlington, Peterborough and Worcester have seen car trips fall by around 9 per cent, walking increase some 14 per cent, and cycling increase by 12 per cent.
Secondly, we're making sure that we will have the right transport infrastructure in place. So we’re spending money on widening our roads and motorways to relieve some of the congestion that blights our journeys. And we're now electrifying our railways – since an electric train typically emits up to a third less carbon per passenger mile than does a diesel train.
And you can't expect people to take the train if the train is the slowest alternative. So we're following Germany – and Europe’s – lead on high speed rail. We know this has the potential to lower carbon emissions by encouraging people to change their habit of relying on road or air travel.
So, by the end of the year, we will have delivered a dedicated route plan for the first stage of a high-speed line between London and the West Midlands.
Low carbon vehicle infrastructure
But, of course, the key topic of interest for the people in this room is what we’re doing with cars. How is the UK making sure its car industry is fitted out with the capability it needs in a low carbon age?
It would be entirely wrong to play down the huge strides that the motor industry has made in the past few years. Britain, for example, has a world wide reputation for making motor vehicles – everything from mass market cars to Formula 1.
However, the UK’s reputation as a major auto manufacturer will, ultimately, depend on more than evolutionary improvements to the internal combustion engine. It will be about harnessing the potential of the revolutionary emerging electric and hybrid technologies, and accelerating the transition to ultra-low carbon vehicles. This is where the UK sees a strategic opportunity to bring together our research and engineering skills to make a stronger impact in the global industry.
But the shift to low carbon won’t happen quickly enough without Government help. That’s why we set up the Office for Low Emission Vehicles (OLEV) to provide Government leadership with industry and link them with the energy providers. And we are doing everything we can to ensure we have a national capability in low carbon cars. OLEV has developed a comprehensive package to encourage demand, support supply, and enable places where these vehicles can be used, based on the industry consensus behind the formation of the UK Automotive Council.
Our ‘Plugged In Places’ scheme will support lead UK cities as they switch on for electric vehicle use. The UK is perfectly placed for electric vehicles, with high city population densities and short distances between conurbations. So we are even turning our congestion into an opportunity!
London is aiming to become the electric vehicle capital of Europe, and it is aiming to have 25,000 charge points across the city by 2015; but it is just one of the cities in this revolution.
And we've already made a commitment worth over £400m to accelerate the transition to ultra-low carbon vehicles, and to encourage take-up and support the technology as it comes to market. This includes customer incentives of between £2,000 and £5,000 a vehicle from 2011, when we expect these vehicles to come onto the market in volume.
I’ve talked about how the UK Government is helping consumers make informed choices and how we’re building up the right infrastructure. The third element of our plan is all about encouraging innovation.
What powers each industrial revolution is strength in innovation, linked to industrial capacity, capital, science and government support. The abundance of people prepared to think in completely different ways. If we’re going to create the next generation of electric cars, if we’re going to power another industrial revolution, we need to find and nurture the right talent. Not just people with know-how and expertise but people capable of approaching a problem from a totally different angle.
Now we’re good at innovation in the UK. We’ve been pioneers in a whole range of fields from plastic electronics to Bluetooth technology. We have an excellent science and research base supported by significant increases in government science investment in recent years. And we have four of the best ten universities in the world.
But, even so, we know there can be some gaps between having those great ideas and bringing them to market. So £150 million of our UK Innovation Investment Fund is designed, again, to lever in additional funding from the private sector.
And because we know innovators need space and time to test out their ideas – two commodities in short supply especially during a global recession – we’re building national centres for excellence to help develop the prototypes we need. Last week, for example, I visited the site of the National Composite Centre which will help us realise our potential in this next generation material.
Low carbon vehicle innovation
When it comes to low carbon vehicles we’re encouraging innovation in a number of ways. Recently, we ran a competition to develop and demonstrate low emission vehicles. It brought together car manufacturers, energy companies, local and regional government and world-class universities. As a result we are now testing low carbon vehicles from 16 manufacturers in eight locations across the UK – from Glasgow to Oxford, the West Midlands to the South East – making it possible to showcase new and emerging low carbon vehicle technologies in real world situations.
We want the UK to become the place to be for ultra low carbon demonstrator projects.
BMW, our hosts today, will soon be advancing the next generation of electric vehicles by testing their electric Mini prototypes on the streets of Oxford. And they will be showcasing a range of electric, hybrid and conventionally-fuelled vehicles at the forthcoming 2012 Olympics in London.
Britain has been chosen by Toyota to be the home of the first Toyota hybrid vehicle to be produced in Europe. And we’ve a site chosen by Nissan to be the European “mother” plant for battery production.
By taking such an active approach, the UK is already helping speed up the technological development of low carbon cars. Yesterday, I was fortunate enough to test drive an electric car and it was a remarkable experience. In many ways I preferred it to my normal car.
We are also funding exciting products such as Jaguar’s limo green – which is an electric vehicle in the luxury class.
But this isn’t just about products. We are developing our skills system so that people with the right skills and abilities can come through into these exciting new areas of research, development and manufacturing. Last month we published a Skills Strategy to identify the skills gaps in our low carbon industries. For example, this autumn we launched new qualifications for the production of hybrid vehicles.
As a result, we’re building up a new technician class through our revived apprenticeship system. We’re also seeing how we can devise practical low carbon courses in schools, further education colleges and universities.
And we are working with Richard Noble to use the new land speed record “Bloodhound” car targeting 1,000mph to create enthusiasm in our universities and increase engineering intake, just as the space race did in America 40 years ago.
Today I’ve mapped out three ways that will, when it comes to low carbon, make the UK the place to invest in years to come. But we will not be successful in our approach without a fourth and final element. And that is our ability to work in partnership – locally, nationally, and most particularly at the European and the global level. International partnerships, partnerships between businesses and between Governments are essential if we're to build up those local and international markets in low carbon. Because the challenges we face in the shift towards a low carbon economy are global in scale. They transcend national boundaries. And global problems demand global solutions.
I’ve already highlighted areas where co-operation between British and German companies is bearing fruit. More broadly the car industry’s consensus on a low carbon road map was central to the UK Government’s own strategy for the automotive industry which we published earlier this year.
And our newly created Automotive Council will set a long-term plan for the development of the industry. Its membership includes world class engineers, suppliers, scientists and business leaders from across Europe. It is an impressive group. And I'm delighted to hear that BMW's Jürgen Hedrich, along with Hermann Kaess of Bosch and Franz Josef Paefgen from Volkswagen, have agreed to join the distinguished cast list.
In a few weeks’ time world leaders will gather in Copenhagen. It remains to be seen whether that summit will have the same effect in advancing the low carbon economy as the fall of the Iron Curtain had in advancing democracy and peace in Europe.
But, whatever the outcome, that meeting has already underlined a few basic truths that are now universally acknowledged. Our future is in low carbon. We’re behind it here in the UK and we want to work with you to realise our full capability. Today’s discussions will advance our co-operation and I’m sure we will reap the rewards far into the future.
Department for Business, Innovation & Skills
The Department for Business, Innovation and Skills (BIS) is building a dynamic and competitive UK economy by: creating the conditions for business success; promoting innovation, enterprise and science; and giving everyone the skills and opportunities to succeed. To achieve this it will foster world-class universities and promote an open global economy. BIS - Investing in our future.
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