Amber Rudd – 2016 Speech on Energy Benefits of Staying in the UK

Below is the text of the speech made by Amber Rudd, the Secretary of State for Energy and Climate Change, on 24 March 2016.

Introduction

I’m here today because on the 23rd of June, you will make a decision that will set the direction of the country for generations to come.

A definitive, lasting choice that will impact upon the lives of our children and grandchildren.

Are we stronger, safer, better off inside the European Union?

I wholeheartedly believe that the answer to this question is a resounding yes.

As the Energy Secretary, my first responsibility is to make sure that our families and businesses have the certainty of secure energy supplies that they can rely on…now and in the years ahead.

Today I want to make the case for why being a member of the European Union helps to deliver that certainty.

It’s actually pretty simple.

It’s about safeguarding our national and economic security…

It’s about lower costs for our households and businesses…

It’s about creating jobs and investment which mean the security of a regular pay packet for working people…

It’s about getting our voice heard and influencing action taken in response to the biggest global challenges we face.

In short, I’m not willing to take the risk with our economic security.

So why do I believe that energy is an important issue in this debate?

Energy at the heart of the Union

65 years ago, on 18 April 1951, a treaty was signed in Paris that created the European Coal and Steel Community.

This was the first concrete step towards the EU we know today.

This was born out of the ravages of two world wars.

European co-operation began with an agreement on energy resources.

To ensure we didn’t fight for them, but traded freely and fairly.

And energy co-operation remains at the heart of the Union today.

Whether it’s about making us collectively more energy secure, making energy cheaper, or dealing with the global issue of climate change.

But more fundamentally, safe and secure energy supplies support everything we do in our day to day lives and everything we do as a country.

When we turn on the light, switch the heating on, or plug in our phone to charge. We never think about that energy not being there.

But it wasn’t always this way. I’m old enough to remember the power cuts of the 1970s. When Britain was the sick man of Europe.

When I was growing up, we had candles and boxes of matches dotted around the house just in case.

But because of the hard work of the British people, this is no longer the case.

In fact, the UK is now ranked the fifth most energy secure nation in the world.

But I also believe that our membership of the European Union has played its part in delivering this security.

Let me tell you why.

Security

Here in Kent, I am reminded that whilst we are an island, we have very real and physical connections to Europe.

We’re at the site of one of those connections today. The BritNed interconnector helps to provide the electricity we need.

And over the next five years we intend to double our ability to import electricity with similar new connections to France, Belgium and Norway. And there are potential new projects with Denmark, Iceland and Ireland further down the track.

These new connections alone could save British households nearly £12bn over the next two decades by driving down the price of electricity.

They act as an extension lead to the vast European energy market, bringing cheap electricity from the continent.

They are the perfect example of how being in Europe helps to deliver energy security at home.

Britain’s geography means we are exposed.

We are an island. It is potentially much harder for us to import and export electricity and gas.

Of course, our North Sea reserves have helped to ensure UK energy security for decades.

And, as the Chancellor’s budget last week demonstrated, we continue to support the industry in maximising the recovery of oil and gas.

But reserves in the North Sea are declining.

In 2015 we imported almost half of the gas we need to heat our homes and power our businesses. And two thirds of this imported gas comes through pipelines from the continent.

By 2030, even if we develop the potential of UK shale gas, we are expected to import about three quarters of our gas.

In other words, we will have to continue to work with our closest neighbours to deliver energy security in the future.

Relying on energy from abroad is not without risk.

We have seen how countries such as Putin’s Russia use their gas as a tool of foreign policy. Threatening to cut off supplies or drastically increase prices.

We mustn’t let our energy security be hijacked as a political pawn to bring Europe to its knees.

By working together in the European Union we can stop this becoming a reality.

As a bloc of 500m people, we have the power to force Putin’s hand.

We can coordinate our response to a crisis. We can use the power of the internal market to source gas from elsewhere. We can drive down the price of imports, as has happened recently in Eastern Europe.

To put it plainly – when it comes to Russian gas, united we stand, divided we fall.

However you look at it, an internal energy market helps to guarantee our energy security. Which is the bedrock of our economic security.

I’m not willing to play fast and loose with either.

Prices

Let me turn to getting the best for our households and businesses.

The European internal energy market is about making sure it is cheaper and easier for us to buy and sell energy.

Without barriers – a level playing field.

This is Britain’s agenda – trade and liberalisation to drive down prices – which has now been embraced by the rest of Europe.

It was Britain that pushed to break up the monopolies on building cross-border cables, like the one we are at today, exposing them to proper competition that drives down costs and ensures real value for money.

It has been estimated that a fully integrated internal energy market could save up to £50bn per year by 2030.

Existing EU energy efficient product standards for items such as TVs, fridges and washing machines, will save UK households an average of £60 on their energy bills this year, rising to £120 a year by 2020.

And that’s ignoring the benefits of new and tighter product standards in the future.

That would mean lower bills not just for families and businesses across Europe, but right here in Britain.

You might ask what’s the alternative? A question that those campaigning to leave seem unable or unwilling to answer.

I’m clear that our energy security is non-negotiable so let me try again.

Outside the EU, could we still benefit from these lower prices?

Could we still set the rules that govern the internal market to ensure that they are in our interest?

Could we still trade energy between ourselves and Europe without facing higher costs or barriers?

Well, we don’t even know on what terms we could negotiate these important questions.

How long it would take?

How would the markets respond to the economic shock of Brexit?

And those who want us to leave simply cannot tell you what a future outside the internal energy market would look like.

And most importantly, they can’t or won’t tell you what the cost might be.

But we can get an idea of what these costs might be.

National Grid, which is responsible for running Britain’s electricity system, is neutral in this debate.

It has assessed the risks and costs, because it will have to deal with whatever decision we make as a country.

Today, it has published an independent report looking at what the consequences of leaving the EU could be.

Either to become like Norway – inside the internal market but with no say over its shape.

Or like Switzerland – who are outside the internal market and have been negotiating without success for almost a decade to try and get access on decent terms.

The study contains some eye-catching numbers.

The UK’s membership of the European Union helps keep our energy bills down. If we left the internal market, we’d get a massive electric shock because UK energy costs could rocket by at least half a billion pounds a year – the equivalent of peoples’ bills going up by around one and a half million pounds each and every day.

People want and deserve lower energy bills, and we’re doing everything we can to make that happen, but leaving the EU could put all of that at risk and would hit the poorest in society the hardest.

These are the hard facts from an independent body charged with operating our energy system.

Even if we managed to negotiate to remain part of the internal market – on the lines of Norway – we would have to pay for access and have no say over the rules.

This would be giving away power, not getting it back.

I don’t know about you, but the prospect of being an EU rule taker, but not an EU rule maker, has no attraction whatsoever.

Investment

The report from National Grid also highlighted the impact of Brexit on investment and businesses in the energy sector.

Their analysis showed the risk of several hundred million pounds of higher investment costs for UK energy infrastructure as a result of the uncertainty Brexit would bring.

And this doesn’t include the impact on the UK’s energy sector due to the uncertainty about sterling in the event of a Brexit. This would likely increase the cost of importing electricity, gas, oil and energy equipment – all needlessly adding costs to UK energy.

This isn’t just an energy issue. Almost half of all foreign investment in Britain comes from the EU.

100,000 British businesses export to the EU. 3.3 million jobs are linked to trade with other EU countries.

Yes, we are the 5th largest economy in the world – something we should be proud of – but our economy is stronger because we are in Europe.

So is our ability to secure the investment we need in UK infrastructure to make sure it’s fit for the 21st Century. Being in the EU helps attract that investment.

Just look at the record levels of investment in UK energy infrastructure.

In 2014, direct investment in UK utility projects from elsewhere in the EU amounted to some £45bn.

We win a third of all the EU’s renewable energy investment.

And this investment creates jobs.

There are around 12,000 companies in Britain working in the low carbon economy.

£121bn of turnover. £44.9bn of value added to the UK economy.

Take for example DONG energy from Denmark.

They have invested £4bn so far helping to develop offshore wind in the UK. And they intend to spend a further £6bn in the years ahead.

Investments that will create over 2000 jobs.

Take Siemens.

They employ almost 14,000 people in the UK and are currently investing over £300m in a new factory in Hull, creating up to 1,000 direct jobs.

They certainly want us to stay in.

Siemens’ Chief Executive has been pretty clear.

“To me,” he told ITV, “this is not about surviving, it’s about thriving, it’s about growing and we’re very sure we can better grow our business in the UK as part of the European Union.”

Being in the EU helps us attract billions and billions of pounds of investment in our energy system and supply chain. Taken together, this investment helps support 660,000 jobs in the UK’s energy sector. Does anybody really think all of that investment would continue if we left the EU, and with no extra cost? Why would we want to cause worry and hardship to hundreds of thousands of families in the UK who rely on our energy industry for their livelihoods? A stable regime gives investors confidence. For them unfettered access to the EU single market of 500m people can make the difference between being merely a going concern and a booming business.

Leaving the EU would put all this investment at risk.

The leave campaign cannot tell British businesses how long they would have to wait to re-negotiate the existing EU trade deals with over 50 other markets, not to mention missing out on those EU trade negotiations, like with the US and Japan, that are well under way.

In the race for investment, why would we shoot ourselves in the foot by creating this uncertainty?

Working people will ultimately pay the price for this with fewer jobs and higher prices.

That is not a price I am willing to pay.

Global Standing

The final point I want to make is a personal one.

Just like our membership of the UN Security Council, and NATO, remaining in the EU is about our standing in the world and the impact we can have on global issues as an individual nation.

With Putin on the prowl and Daesh sharpening their swords, our unity and our shared values – of free speech, democracy and equality – are more important than ever.

Beyond these immediate dangers, there are longer term challenges that require us to work together to resolve.

Take the recent climate change conference in Paris where 200 countries came together to sign the first global climate deal ever agreed.

I was there. I saw first-hand how the EU played a pivotal role in driving this deal through.

The deal was ultimately negotiated between the world’s biggest economic powers: the US, China and the EU.

And it was UK representatives who were leading negotiations on behalf of the EU.

If we left the EU, with the UK responsible for just 1% of global emissions, I doubt we would have even been in the room.

How do I know? Because I was there in the room, and many others weren’t.

The global deal in Paris is in the UK’s interests, and frankly we wouldn’t have got it without being part of the EU.

I firmly believe that from our position in the EU we can influence the great geopolitical challenges of the day – to make the world a safer place for Britain.

And let’s be clear, the deal in Paris is not just about our national security, it’s also about our economic security.

Those who want us to leave have a tendency to argue that tackling climate change hampers our economic competitiveness.

I disagree.

It is our own domestic law – the Climate Change Act – that sets out obligations to the next generation.

Our own system – the UK’s Carbon Budgets – sets the pace.

We are also not the only ones taking action.

The Paris Agreement was about levelling the playing field between us and the rest of the world. Making sure that every country makes its fair share of effort to combat climate change.

And within the EU, we are at the table, shaping climate policies so they work for British businesses.

And so they are focused on cutting carbon in a cost effective way. Not driven by backward looking renewables targets.

And by having a seat at the table we are reforming the EU itself.

Since we re-entered Government in 2010, we have led the way on convincing other countries that binding renewables targets aren’t effective.

This kind of reform was at the heart of the Prime Minister’s renegotiation.

Getting a new deal for Britain. But remaining a member of the EU so we can continue to have a seat at the table to set the rules, and effect change at a global level.

In other words, the best of both worlds.

Conclusion

Today I have laid out my case for why I believe we should remain in the European Union.

I firmly believe that we will be stronger, safer and better off as a member of the EU than we would be out on our own.

Our businesses will be better off because they have full access to the free trade single market, bringing jobs, investment and financial security.

Our families will benefit from lower households bills.

Our children will grow up in a safer, more secure world, as we play a leading role in one of the world’s largest organisations from within. Helping make the decisions that affect them.

Those who would have us leave can’t even provide a plan for what happens next.

They are offering risk at a time of uncertainty. A leap into the dark.

For me, having to risk paying a Brexit premium to keep the lights on doesn’t feel like “stepping into the light’.

It’s clear to me that the alternatives won’t work for Britain.

Paying all the costs, but making none of the decisions that set the rules of the game.

Paying more to guarantee our economic security, whilst losing out on business opportunities, exports and jobs.

So I ask, why cut ourselves off?

Of course, the EU isn’t perfect. We have to continue to reform it to make sure that we are getting the best deal for the UK.

But I don’t believe we should make the best the enemy of the good.

I don’t want this country to just be on the fringes.

I want us to be at the centre of things, making things happen, leading in Europe and getting the best for our people.

My judgement is clear.

In the EU, our future is stronger and more secure, and our families and businesses are better off.

My answer is this.

We choose in. We remain. We stay.