The week ahead: High speed trains, energy bills and electric vehicles come under scrutiny

News editor

The government’s latest attempt to justify the HS2 north-south high speed rail line is set to be published tomorrow, while the Big Six energy companies prepare for a parliamentary committee grilling

Its with no sense of irony that Briefing focuses this week on transport and energy, two elements of national infrastructure taking – or forecast to be taking – a battering from St Jude right now.

A big week for rail sees the Office of Rail Regulation (ORR) deliver its final determination on Network Rail’s Strategic Business Plan, and MPs debate HS2’s budget in the Commons following the publication tomorrow of the proposed new line’s final business case.

Network Rail published its five year Strategic Plan in January this year, with ORR determining that over £2bn worth of savings could be found through the implementation of new technologies, better management of the railways and more efficient ways of working. Network Rail is expected to publish its final delivery plan in March 2014.

MPs will vote this week on whether HS2 will proceed following the publication of a new business case for the high speed line.

As many as 60 Conservative Party MPs are said to be preparing to vote against the rail scheme that was thrown into further disarray over the weekend.

On Saturday The Times reported on David Cameron’s misgivings about the scheme if it fails to secure cross-party support, arguing that private investment funding would not be forthcoming without it.

The Labour Party has aired concerns about the project’s budget, a figure that sits at £43bn and won’t be supported by the party if it creeps over the £50bn mark.

Cameron is widely reported to have said: ‘If Labour are to run away from this, they will be letting down the Midlands, they will be letting down the North.’

The third and final reading of High Speed Rails (preparation) Bill is scheduled for Thursday October 31.

Tomorrow sees energy company bosses and Ofgem face questions from MPs over price rises and profits.

The Energy and Climate Change Committee will take evidence from bosses of the so-called Big Six energy companies in the wake of parliamentary and public disquiet over the latest wave of electricity and gas price rises.

The session will explore issues including: reasons and justification behind the recent increases; difference in pricing policies between suppliers; and how the transparency of energy company profits can be improved.

Witnesses include E.ON chief executive Tony Cocker, SSE managing director William Morris; RWEnpower external affairs director Guy Johnson; and British Gas managing director, Energy, Ian Peters

Macquarie, a provider of banking, financial, advisory, investment and funds management services, believe the carbon tax should be scrapped as its makes domestic energy supplies more expensive than imports.

In a report in today’s City AM they say the tax is ‘counterproductive from an environmental, economic, and taxation point of view and therefore unsustainable….We see a £15 to £20 per MWH difference between power prices with and without this floor, which is about 10 per cent the retail bill.’

Alternatively Fuelled Vehicles (AFVs) don’t have a particularly large market share in Britain but they are slowly gaining traction. August’s figures from SMMT show year-to-date registrations had reached 18,785, an 8.2 per cent rise compared to 2012.

By 2050, however, the European Commission expects electric vehicles alone to play a significant role in reducing transport sector CO2 emissions by 60 per cent.

To this end, Plugging the Sustainability Gap: Boosting the European Electric Vehicle Market will examine the existing market entry barriers for alternative vehicles.   

Taking place in Brussels tomorrow, the one day conference will look at deficiencies in the sector – the limited range of models available, high costs and long recharge times, vehicle safety, consumers reticence and a claimed lack of significant price incentives – in order to take to take it forward.

Their reasoning is compelling when considering the approximately 12 million jobs in the EU’s automotive sector.

The organizers, Public Policy Exchange, say: ‘The automotive industry is vital to the economy and, as such, developing innovative and alternative fuels will not only maintain competitiveness and create high-skilled employment opportunities, but also make the European economy more resource efficient.

‘The electric and alternative vehicle sector has grown steadily over the past few years and the benefits of a thriving market are potentially significant, especially if considered alongside other technical developments such as intelligent transport systems and smart grids.

‘Nevertheless, several important developments have taken place, which it is hoped will raise awareness and boost the fledgling EV and alternative fuel market in Europe.’

Finally, a report from think-tank Civitas says government should take a more interventionist approach to industry or risk losing thousands of jobs to rivals.

The report – Picking Winners: How UK industrial policy ensured the success of the aerospace and automobile industries – recommends the introduction of a public finance scheme be introduced to support domestic suppliers to the automotive industry, and major investment in new technologies which do not attract enough involvement from the private sector.

The aerospace and automotive sectors, which Civitas describes as ‘the two main surviving success stories of UK manufacturing’, face pressure from global competition and could be lost to nations such as China, Japan and Brazil whose governments are prepared to invest heavily in sectoral development.

The report recommends that a public finance scheme be introduced to support domestic suppliers to the automotive industry, and major investment in new technologies which do not attract enough involvement from the private sector.

The aerospace and automotive sectors, which Civitas describes as ‘the two main surviving success stories of UK manufacturing’, face immense pressure from global competition and could be lost to nations such as China, Japan and Brazil whose governments are prepared to invest heavily in sectoral development.

Commenting on today’s Civitas report, Richard Surridge, divisional manager for Aerospace and Automotive at Matchtech, said: ‘Confidence in government support of the engineering industry has continued to lag from an engineer’s perspective as was highlighted by the results of our Confidence Index.

‘This survey, compiling the opinions of more than 1,000 UK engineers on the future of their industry, found that over half of UK engineers had lost confidence in government policy towards the industry.

‘The survey also found that 56 per cent feared that organisations will stop investing locally, and 43 per cent would actually be willing to desert the UK and move abroad for work.

‘The UK’s engineering industry has been a source of pride and prestige for centuries and we want it to stay that way. Politicians need to ensure they’re offering their full support to what was historically the backbone of British endeavour in order to ensure that the industry can continue to compete on the world stage. To do this, it is imperative that we start by making sure we’re nurturing the best talent here at home.’