Mike Reynolds [00:05:38] Hello everybody, and welcome to the latest edition of the Energy Impact Center Podcast. I'm joined today by Tom Thackray. Hello, Tom.

Tom Thackray [00:05:54] Hi, Mike.

Mike Reynolds [00:05:56] Tom is the Program Director for Decarbonization, but we've actually just qualified that he does a lot more than decarbonization, which is going to be good for us today. So, we can hear all about that stuff. And Tom is from the Confederation of British Industry, CBI, which is an organization that's name is in the news a lot in the U.K., working with governments, representing industry and and working across sector. And the CBI are involved in pretty much everything that business does in the U.K. So, it's going to be really interesting to find out about what you're doing.

Mike Reynolds [00:06:29] Tom, thanks so much for coming on today. Really appreciate it. Why don't you start out by sort of giving us a little bit of a potted history of yourself. And how did you end up where you are in taking on this role and working on decarbonization?

Tom Thackray [00:06:43] Sure, happy to. So, I'm a policy wonk at heart, really. I've always been interested in politics, growing up. I came from a political family without being sort of party political. We always had political news shows on; it was always in the background. And so, I was consuming this information and I was always sort of politically active without being aligned to any political party. I just enjoyed following it in a bit of a geeky war.

Mike Reynolds [00:07:11] So, that went into my study, and I sort of studied politics and economics at university. Had the opportunity to go out and work in Brussels for a little bit where I worked at some of the institutions doing internships and things like that across the different policy areas. And then, on graduating and doing a bit more study, I came back to the U.K. and started getting a bit more deeply involved in U.K. politics, sort of monitoring Parliament, parliamentary debates and things like that in quite a really geeky way, actually.

Tom Thackray [00:07:50] And so, businesses used to pay me, I guess, to monitor what was going on in Parliament just to see whether there were risks that they should be alive to or opportunities to gain relationships with members of Parliament and things like that. And then I joined the CBI back in 2010. I'd done a little bit of work with the CBI in Brussels, previously, but I joined the CBI permanently in 2010. I've been with them for the last 13 years or so.

Mike Reynolds [00:08:22] That's a long stint, isn't it? 13 years?

Tom Thackray [00:08:24] It is, yeah. Definitely in today's world, it's a long stint, isn't it? I didn't start in 2010 thinking, "This is going to be where I'm going to spend the next 15 years of my working life." But like you said, it's such a broad and large organization. We speak for so many businesses that I've dotted around different jobs over that time and progressed in my career.

Mike Reynolds [00:08:53] So, before you get into what you do at the CBI, give us an intro to the CBI, because a lot of our listeners are U.S. based and they may not have heard of it.

Tom Thackray [00:09:00] We're a business representative organization. I guess the nearest equivalent in the U.S. would be the U.S. Chamber of Commerce, although we're slightly different to that. Businesses pay us a membership subscription, they join our network and we represent their views to government. So we are primarily, although not exclusively, a lobbying organization. So, we lobby government to create the conditions that enable businesses to invest. And that's right across the suite to things that businesses might be interested in.

Tom Thackray [00:09:33] So at the moment, I work on energy and decarbonization, but we're involved in skills agenda, finance, international and exports, innovation, anything that businesses are interested in, basically, and where there's a government link, we play a role. And because we speak for so many businesses, we estimate that we sort of speak for around 200,000 businesses through our trade association network as well.

Tom Thackray [00:10:02] And that gives us a lot of power, I suppose. That's a weighty voice that we speak for, and that means that we've got decent access to senior people in government. And like you said, it means that we've got good access to the media and we've got a big policy team. We probably have about 70 people working on policy across the team, and about 10 to 12 of them working on decarbonization energy issues in my team. So yeah, we've got a big reach, quite a lot of power and quite a lot of capacity, I suppose.

Mike Reynolds [00:10:42] And so, that explains why you can stay somewhere 13 years, because you could tour around and try so many different things. So, what are the different things that you've been able to try and do and the impacts you've been able to have?

Tom Thackray [00:10:54] Well, I started out working in sort of public services policy, which was about partnerships between the government and the private sector, particularly around infrastructure. So, when we were building social infrastructure like schools and hospitals, the partnerships that the government would enter into with the private sector to get that done. And I've done a lot of work in what we call the enterprise field, which is working with small and medium-sized businesses, entrepreneurs and trying to get the policy conditions right for business startups and scaleups in the U.K. and I had a bit of a niche period working specifically on planning policy, which was actually... People might think that's incredibly dull, but actually when you get into the detail of something like that, it's incredibly, incredibly important.

Mike Reynolds [00:11:43] And absolutely critical. Yes, exactly, I was going to say.

Tom Thackray [00:11:46] If there's one thing that businesses complain about more than anything else, it might be planning systems. So, I was there to meet the funding in that job. And then I worked on innovation policy for a while, but I moved on to lead the team that I currently lead in 2018, I think. And that was initially the energy and climate change team. It turned into the decarbonization team a couple of years ago, once we had the team change of leadership. But essentially at that time I was made responsible for leading the CBI's voice when it came to energy issues. And increasingly, businesses wish to be more active on this decarbonization and broader sustainability space.

Mike Reynolds [00:12:33] I want to get into the decarbonization space. It's clearly the focus of the podcast, but can you give us some examples of things that are sort of cross sector issues at the moment? I mean, decarbonization, actually, probably will be one of them, but can you give me some other examples? I mean, the U.K. has been quite a politically tumultuous place for the last 12 months. Actually, you could say the last five years, to be honest, it's been quite tumultuous. And creating certainty for business... You hear it all the time. "Business needs certainty. We need to create long term plans. We're going to invest. We need to know we're going to be doing." And I think it's been quite hard. Could you sort of talk to the themes that are coming out that you're seeing cross sector, whether it's Brexit or other things that could be interesting?

Tom Thackray [00:13:21] Yeah, I mean, we take the temperature of our members all the time about the things that are most relevant to them. I think at the moment, I would say labor shortages are pretty high up on businesses' radar at the moment. And obviously, the referendum and the decision around Brexit has changed the environment for businesses to have access to labor. We've had a reduction in the flow of inward migration over that time. And with the shifts that we've had in the economy, businesses are just finding it very difficult to recruit the staff that they need. And we've got a very tight labor market in the U.K. at the moment. There's not very much unemployment, so we're not seeing...

Mike Reynolds [00:14:13] And it's all kinds of labor as well. It's not just skilled or unskilled or highly-skilled. It's everything, isn't it? It's all parts of society. I was in a restaurant a few months ago and it really struck me, actually. It's the first time it's happened to me, but I went into a restaurant to have lunch on my own, so this is not a large party. I was shopping in a shopping center. And I went in and they said, "I'm really sorry, we can't seat you at the moment." I said, "Well, what do you mean? There are a whole bunch tables here?" And they said, "No, we can't, because we haven't got enough staff to serve." So they'd opened the restaurant, but they only had two people waiting and had one person in the kitchen.

Mike Reynolds [00:14:46] And I think that's being replicated across sectors. I think the hospitality sector's felt it particularly hard with coronavirus and then the output of that. But it's being felt across sector. We see it in the energy space. You know, the skills gap is just massive, how to get enough people into the sector. What are some other things that you're seeing as trends?

Tom Thackray [00:15:07] Yeah, I think also there's just a big focus of competitiveness, at the moment, and resilience in the business community. Like you said, it's been a tough few years where we've sort of gone from crisis to crisis with dealing with the aftermath of Brexit and the sort of political turmoil that we had after that with change in elections, change in leadership, which is hard for businesses to sort of go through, followed by the coronavirus pandemic, which we were badly hit by. And obviously, for some sectors it was quite catastrophic for them in terms of their ability to trade and their operational resilience.

Tom Thackray [00:15:51] And then we've sort of gone into the situation with the Ukraine war last year. And I'm sure we'll talk about this, the energy crisis which was spawned out at the end of it. Businesses, I think, have been almost like a punch bag for the last five or six years, and resilience is pretty low. You know, we've got very high inflation at the moment in the U.K. by historical standards and prospects of growth this year are not particularly high. So, what we tend to be talking to government about more than anything is just how do they pull levers to enable businesses to grow again and to sort of be more positive.

Mike Reynolds [00:16:37] Describe how that works, having conversations with government. These are macro issues; these are big issues. And there aren't sort of really simple, "Oh, if only we did this." Numbnuts, of course if you did this, you'd be fine. You guys aren't going in with the magic book that says, "These are the answers." It's a dialog. So, could you talk a little bit about that relationship with government and how that works?

Tom Thackray [00:16:59] Yeah, it's quite difficult to put your finger on sort of one thing that you have in terms of relationship to government. I mean, U.K. government is a big business. Obviously, you've got ministers who sort of head up their central government departments, but they're backed up by enormous departments with senior civil servants who are there as well. So I think, at my level I tend to speak to junior ministers or senior civil servants.

Mike Reynolds [00:17:27] Senior advisors, yeah.

Tom Thackray [00:17:28] Senior advisers. And we tend to focus on things that are sort of most cross-cutting for all business sectors, just because of who the CBI is. And we are, like you say, talking about some of the big macro issues. So for example, ahead of the budget, which is a big moment for our Treasury coming up next week, we'll be in talking to the Chancellor and his advisors about sort of the overall framing for that fiscal announcement. Where are we in terms... What are the economic indicators telling us about business confidence and investment? What are our members telling us about things that would enable them to invest more? And can we come up with the sort of two or three big, bold policies that we can ask the government to get behind which will sort of speak to that agenda?

Tom Thackray [00:18:18] And so, at this current time, there's due to be an increase in corporation tax this year in the U.K., which is government trying to balance the books, the reason for it. But can we sort of take the hard edges off that a little bit by introducing allowances for businesses that enable them to offset some of their investment against that tax bill. And so, you sort of go through a process. You have to lobby at all levels and you have to sort of build those relationships and also build relationships with sort of the wider stakeholders who are also putting their best submissions into Treasury or other departments at any time. So it's about almost getting those outriders with you to support your agenda.

Mike Reynolds [00:19:05] What does a win look like for you guys? We work in a relatively simple industry, actually, what I do. At the end of it, we get to build a power plant and we get to sell power to customers. And that's it, you know, you've done it. Well done. I'm interested, when do you get to go home at the end of the day and kind of punch the air and say, "Yes, that's why I do this." What do those successes look like?

Tom Thackray [00:19:29] Sometimes they're very tangible. So, you get a policy document from the government which directly replicates something that we've asked for.

Mike Reynolds [00:19:38] Right.

Tom Thackray [00:19:40] So for example, in our budget submission we have a recommendation in there about how the U.K. should identify and back projects for carbon capture and storage in the North Sea. If that comes out in the budget submission next week, and hopefully references the CBI as well and the influence that we've had, that is a go home, have a drink, job well done time.

Tom Thackray [00:20:09] Often, it's less tangible than that. And sometimes it's about... The win will be actually on a risk avoided rather than something gained. So, you might hear that the government's minded to introduce a punitive business tax or something like that. Can we get in there to just stop that from happening rather than, you know...

Mike Reynolds [00:20:36] And it's interesting because actually the absence of something often means that you don't get recognition, doesn't it? You know, so where does the pat on the back come from, actually? Your members presumably just spend their entire time being dissatisfied because they therefore won't see the wins that you have which are, "Yeah, but you should see the stuff that we managed to avoid for you guys."

Tom Thackray [00:20:56] Yeah. I think a lot of our time is explaining to members all the stuff that we're doing behind closed doors.

Mike Reynolds [00:21:02] What kind of people work with you then in CBI? How many people are there in total, by the way? Do you know?

Tom Thackray [00:21:08] We're pushing sort of 300 people. So, we're not massive as an organization. We do have a big policy team and we sort of talk about the biggest policy team outside of Whitehall, the government's building. But you know, we're still just a "medium-ish" sized business. And it tends to be... I'm not out of the ordinary in terms of academic background. I can't say there are a lot of politically motivated people who work for the CBI. We have a lot of economists working for us. We do a lot of forecasts and things like that. And then we have a lot of commercially-minded people who are account managers for businesses and things like that. So, it varies quite a lot.

Mike Reynolds [00:21:54] Let's get into the energy stuff then and the carbon stuff, which is hence the name of the podcast. So, tell us about the energy landscape in the U.K. and I'm particularly interested in hearing what's the view of business at the moment on decarbonization, the road map for decarbonizing business and industry, the role that business plays in that, and what sort of trends are you starting to see?

Tom Thackray [00:22:25] Well, I'll start by saying I never think of myself as a sort of expert in the energy sector or energy industry. Because I'm sort of... As I said at the start, I've come to this in the last five or six years. But I've worked with businesses for a long time and I do have expertise in the sort of political environment around it. I take that as an asset, actually, to come in with a fresh pair of eyes.

Mike Reynolds [00:22:50] It is. You're not stuck in the echo chamber repeating the same thing over and over again and wondering why no one listens to you. And that's the point. I mean, I've done a couple of podcasts in the last week and actually, both of those were energy experts. It's really great to have you on because I want to hear what business actually says. Because business is a large proportion of emissions and it's also going to be a large part of how we decarbonize. It's through businesses leading and taking the charge on it. So, please don't worry about the fact that you're not an energy expert. We don't need that.

Tom Thackray [00:23:21] Yeah. What I'm proud of at the CBI is that I think we've taken quite a progressive attitude when it comes to decarbonizing business and for quite a long time as well, I'll say. Long before I was sort of involved in our work in this area due to the leadership of, I think, probably a minority of influential business leaders. They really pushed us to sort of be one step ahead of them at this for a little while. So, around the sort of early 2010s when the U.K. was passing its first Climate Change Act in Parliament... Up until that point, the sort of modus operandi for businesses would have been, say, like, "There's risks in this. We don't want to go ahead of the pack. We're worried about what it might mean for competitiveness globally.".

Tom Thackray [00:24:14] I think there was a bit of a change at that point where we started to see the opportunities inherent in the transition and recognized that if U.K. businesses were among the first, then we could sort of capture some of that market share globally. And having said that, when we were... The initial Climate Change Act mandated that we reduce emissions in the U.K. by 80% by 2050. And so, there was a tendency among our membership to think that, "I'll be part of the 20% of residual emissions then." So, everyone thought they were part of the 20%. And what we've seen in net zero in the last few years is that, "Oh, that's inclusive. Everyone needs to..."

Mike Reynolds [00:24:54] Can't hide anymore.

Tom Thackray [00:24:56] Exactly. "Everyone needs to act." There's no ambiguity there, really. I mean, there's a little bit, some, but most businesses realize that zero means zero and they need to start cutting down on it. You know, businesses are led by humans as well, and they're seeing the impact of extreme weather events and the catastrophe that climate change might be or increasingly is. And they're impacted by that. Their customers are telling them to do more, their investors are telling them to do more. There's loads of evidence to show that you're better at attracting and retaining staff if you're a more sustainable business. So, there is a movement there, a sort of unstoppable momentum towards corporates having to take this seriously.

Tom Thackray [00:25:47] And so it's sort of a sequence of that was happening anyway. And then, I think the U.K.'s hosting of COP26 was also important because that brought a focus to government policy. And not only to having the net zero target, but also having a strategy to back it up as well and transitioning all of the sectors of the economy. It's been a bit of a whirlwind, but I think U.K. businesses, I would say, relative to other countries, I think are much more aware of this agenda and acting towards it in bigger ways than their counterparts in other countries, I'd say.

Mike Reynolds [00:26:30] Are you seeing particular sectors going out fast?

Tom Thackray [00:26:38] Yes, I think we are. Obviously, the route to net zero is not the same for all sectors. It's easier for some rather than others. Take the CBI as a business, for example. We are establishing ourselves a net zero target even though we're sort of a medium-sized business. We don't have a massive footprint. It's not particularly... You know, there are challenges within it, but it's just about the space we use, our business travel, some of our policies and you're sort of there. So, for a lot of businesses you can sort of get there quite quickly.

Tom Thackray [00:27:13] I think it's the hard to decarbonize sectors that naturally feel like there are more risks in sort of making commitments when potentially the technology routes to decarbonization aren't as clear for them or it seems much more expensive or they are subject to competition from overseas in a way that other sectors aren't. In a highly-tradeable sector, it's more challenging to go further and faster. If you're not going to be protected, you're just going to be undercut on price when the technology's cheaper elsewhere.

Mike Reynolds [00:27:53] It's interesting because there are some very commoditized industries that seem to be going well. I mean, there's some quite significant progress in the steel industry, for example, where you're seeing fossil-free steel coming out. It's the hybrid fossil-free steel, as an example. And yet, you can also sit down with other people in the same sector and they say, "There's absolutely no opportunity for differentiation in steel production.".

Mike Reynolds [00:28:17] And the same with property, actually, where you see property companies. You can get one property company that says, "We see this as a massive value creation opportunity where if we can decarbonize our portfolio faster, it will have a higher value to investors and shareholders." And then another massive property fund says, "No, it's a total waste time. It's greenwashing.".

Mike Reynolds [00:28:39] I find it so interesting what differences of opinion there can be even with two companies that look from the outside exactly the same. And you must get that a lot. Is it herding cats trying to get consensus? Is it like, "What is it we want, guys? Do we want this or do we want this?"

Tom Thackray [00:29:00] Yeah, it is a bit like herding cats sometimes. I think the good thing is that we don't insist on absolute consensus for everything we say. And I think we can do surveys, we can almost have a voting system. We air a lot of this stuff publicly. We consult businesses en masse so they kind of see the breadth of opinions that we're getting and we steer a course between the two.

Mike Reynolds [00:29:29] But do you end up sliding to the lowest common denominator? It was great to hear you say, "We take a progressive approach. As an organization, we're going to lead." But when you then come into sort of policy recommendations, do you find you're able to be as bold as the leaders want to be and you can go with the innovators in the market? Or do you find you have to sort of tread a more careful path? How do you find that balancing act?

Tom Thackray [00:29:50] A previous Director-General, one of our leaders, equivalent of our CEO said, "You need to be one step ahead of the members, but never two."

Mike Reynolds [00:30:00] Right.

Tom Thackray [00:30:00] So, I think we can take some risks. And we do lose members over positions that we've taken because we're taking a leadership position, we'd say. But I'm sure there are businesses who are sort of right in the forefront of this agenda pushing for the fastest transition to net zero who would look at the CBI and say, "That's a broad church and they have to represent many, many businesses within it. Are they going to be as ambitious as we want to be?" I think that's fair enough, really. I think we're representing that broad church...

Mike Reynolds [00:30:43] And at some point, you can't keep absolutely everybody happy. It's like putting dinner on the table for the kids. One's going to say they don't like it. But interestingly, the energy crisis, you touched on earlier. The challenges that the war in Ukraine is having on European energy markets, the impact it's having, is being felt particularly keenly, I think, in the U.K. because of our reliance on gas in a way that I think a lot of other countries don't have. Certainly for the States, I don't think they've had the same challenge. In fact, if anything, they've had an opportunity on the back of this because they're making so much money trying to prop up European economies with energy supply.

Mike Reynolds [00:31:26] But if you take the decarbonization challenge and you now add in the fact that power is really expensive and gas is no longer dirt cheap, which it has been in the U.K. for 50 years, is that starting to get more consensus? That people aren't motivated only by climate change and carbon now and differentiation, but they're actually like, "Holy moly, my operating costs just doubled." Because the power prices are going through the roof.

Tom Thackray [00:31:54] Yeah. I think there's definitely, I guess, a wish from some of our members to make sure that it's not a miss. You can't waste this crisis, basically. It has a bit of an inflection point for accelerating the transition. So, we're seeing much more interesting in on-site generation, for example, solar panels, turbines, things like that. And businesses working directly with suppliers through power purchase agreements, things like that. Investments in energy efficiency. Our housing stock is particularly inefficient in terms of its energy efficiency, but also some of our commercial buildings are also... There's been a bit of a market failure there in the past in terms of businesses not investing in energy efficiency as well.

Mike Reynolds [00:32:43] But the entrepreneurship opportunity for a supply chain to exist to serve this need now just seems staggering. Have you got any numbers around what the opportunity is to... Sorry, springing this on you. But maybe you could talk about that a little bit if you don't have any numbers. But it just strikes me, this massive opportunity to decarbonize buildings and provide on-site power solutions, put in PPAs. Are you seeing an uplift in the number of companies that are trying to move into this space? And is there a diversification happening at all?

Tom Thackray [00:33:16] Yeah, I think it's starting to happen. I think one of the barriers we have is that some of the supply chain has had its fingers bent in this market in the past through policies that were there to support them, invest in their fuel space, for example, which were pulled out, a subsidy pulled out overnight. And therefore, they're a bit more cautious than perhaps they otherwise would be. And then we've got the issue with the tight labor market that we said before.

Tom Thackray [00:33:48] So, I think for energy efficiency in particular, the biggest barrier to actually insulating homes and commercial properties as fast as we'd like to is just the availability of people to do that work. And so, I have felt my own experiences of trying to get my loft insulated recently and not being able to find anyone with availability. It takes a long, long time. That's why we're sort of pushing government to give us that sort of business certainty in the policy landscape over a period of years so that the supply chain has confidence to invest in its skills and its processes.

Mike Reynolds [00:34:29] Exactly. Yes, it's that longer-term confidence to invest now in the skills and the resources and the training and the OpEx, you know, sunk OpEx that will then yield profit in the future, isn't it? And so, when you look at the asks of government, are there any consistent themes in the asks of government when it comes to energy and climate change decarbonization from business? Or, maybe if we pick some sectors, are you seeing certain sectors starting to ask for certain things?

Tom Thackray [00:35:05] We tend to focus on or categorize businesses not into the vertical sectors, but in capped-in types of businesses. So, we have the sort of providers of green technology. We spend a lot of time talking to those in the energy sector, in transport decarbonization, in the built environment who are providing the technologies that are going to decarbonize the U.K., but also potentially decarbonize the world.

Tom Thackray [00:35:35] And so, in things like the hydrogen economy or the carbon capture and storage, those early stage sectors, early stage technologies where investors don't have the confidence yet to invest at sort of a price which is competitive with the fossil fuel alternative or the incumbent, it needs a government intervention to lower the risk, essentially, and to enable that market to start to grow. And we've seen that approach has been very successful in the U.K. for things like offshore wind. And so, we've been asking for market mechanisms, basically, to enable investment in hydrogen production in the U.K., to enable the development of the carbon capture and storage market as well in the U.K. so, there's a suite of things and recommendations that we get in terms of market making in green technologies on the supply side, and that's from the energy suppliers.

Tom Thackray [00:36:42] On the demand side, I think we tend to focus on things that will make it easier for businesses to adopt those technologies and to become customers, and that might be the regulatory space. So we've seen, for example, we've got a phase out event in the U.K. for the sale of petrol and diesel vehicles at the end of the decade. And so, that's driven purchasing decisions from consumers, but also from businesses. They're having to look at electric vehicles probably more rapidly than they otherwise would do. And it's those kind of policies which can... Sometimes businesses are looking for regulation, actually, to give them the certainty and...

Mike Reynolds [00:37:26] A plan.

Tom Thackray [00:37:26] Yeah. Give them the plan for the future, exactly.

Mike Reynolds [00:37:30] It's a hard thing for government though, isn't it? Which is, you need to provide some certainty and a bit of a plan, but you also don't want to be seen to be driving one solution and telling everyone what the answer is and actually working against competition. There's so many examples in the energy space of well-intentioned policy that just didn't work. For every CFD, you've got a renewable heat incentive which really didn't do what it was meant to do. And it wasn't because everybody went in with the wrong ideas, it was just because there are always things that happen that you don't expect to happen.

Mike Reynolds [00:38:02] And I think we'll see the same thing with hydrogen and with CCS, for example. The thing that frustrates me as a guy who's been in the space for 20 years is the pace. So, if you're going to try things and they might not work, you need to get the hell on with it. Go get it launched, try it, give it two years. If it looks like it's working, then back it and smash it out of the park. If it's failing, try it in two years, move on, try another thing. And I think a culture of trying things is something that's again, hard to reconcile with the need for certainty, unfortunately. If all looks to government to de-risk it completely, oh, that's very, very difficult, isn't it?

Tom Thackray [00:38:43] Yeah, yeah, I think you're right. And they can't do everything, I think is the obvious truth.

Mike Reynolds [00:38:47] No, there's not enough money.

Tom Thackray [00:38:48] Yeah, exactly. Exactly. And I think actually, what we're sort of moving towards, and this is difficult for the CBI because we represent everyone, but sort of a medium to large-sized economy and we need to place some bets. We need to find out what our niche is based on the skills base, based on the science base that we have, based on the weather or the geology, whatever it is. You know, what are the things that make us distinctive and go off in a big way.

Mike Reynolds [00:39:16] We talk about it a lot in our sector, the nuclear sector. And the nuclear sector's 150,000 plus people that are qualified nuclear people in the U.K. An incredible history and legacy and a huge export opportunity if we get it right. And yet, it's an example for me of procrastination and waiting for perfect rather than getting on with something. And I think we're seeing a very similar challenge with rolling out CCS, unfortunately. How you get that cut through... These conversations must leave you in a frustrated place at times where you can sort of see the potential of things, but you're stuck on the merry-go-round.

Mike Reynolds [00:39:55] Have you seen some stuff in the last five years where you've been really pleased with the progress that's been made, and could you give us some examples? Progress that's been made on energy or decarbonization where you think, "Actually, yes, this is the right thing." CFD is quite a long time ago now, so I feel like that one's gone. But the last five years, what is some stuff that you could say, "Yes, that's good. We're moving in the right direction."

Tom Thackray [00:40:21] Things seem to be sort of turning the right direction when it comes to electric vehicles. I mean, certainly if you look in terms of sales. And I think the phase out date has sort of hit home with consumers now that we are going electric. There's less uncertainty around the technology that's going to win out for passenger vehicles, and therefore, the market is starting to move. And arguably, we could have done a better job at making sure we're securing more of the value chain for that sector through establishing the battery manufacturing facilities in the U.K. But overall, I think businesses recognize that transport is a substantial part of their emissions and are moving in that direction. Most people are making plans that way.

Mike Reynolds [00:41:16] Yeah. I think businesses are actually often first movers on some of these big EV transfers, aren't they? You see big fleets, some of the big logistics companies are trying to switch 100%. I think Sky are being quite progressive about... You know their fleet of vans that go around installing Sky TV. For everyone on the podcast that doesn't know that they install the satellite dishes on people's houses. Increasingly they don't do that; they just do cable, but they do a TV service and they have vans that go around and serve people. They are increasingly low-carbon vans.

Mike Reynolds [00:41:46] Could you touch a little bit for me then on heavy energy users, industry? Which I often feel is the kind of forgotten giant in the room. Like, no one wants to talk about the fact that there is still a big industrial plant down the road making chemicals. And actually, they employ 4,000 people and we'd really quite like them to stay there, thanks very much.

Mike Reynolds [00:42:05] When we talk about decarbonization, everyone always jumps into cars and heat pumps in your houses and then renewables, right? That's kind of the tour that you get. Industry seems to be forgotten, and CBI, massive with industrial customers. What are you hearing from them and what's the opportunity there do you think?

Tom Thackray [00:42:24] Yeah, I mean, there is a huge opportunity, but also, I guess a huge risk, which I think you allude to. Because the history of the U.K. is that we've had a lot of that sort of heavy industry hollowed out in terms of the supply chain. And that which we've retained is the higher-value, I suppose, in productive manufacturing, because it's had to be. It's had to compete pretty hard for it to stay there.

Tom Thackray [00:42:52] And you all know that they are located in parts of the country which are sort of less economically successful than, say, London and the Southeast. So the jobs that they create, they're sort of the center of the community and they tend to be really important. And also, just that they lie at the heart of our supply chain, often. There are chemicals, fertilizers, steel, cement. These are the building blocks, literally, that keep the show on the road when it comes to the other sectors functioning properly.

Mike Reynolds [00:43:24] Any economic growth, exactly.

Tom Thackray [00:43:25] Yeah, exactly. We need to have them front and center of our minds. And I think, actually, I don't get any sort of pushback from these sectors around the need to decarbonize. I think the risk that they tend to point to is the risk of carbon leakage because they tend to be in globally traded sectors. And they are exposed often to things like higher energy prices. If we've got a high energy price and high carbon price in the U.K. and the competition isn't subject to the same thing, then they are exposed.

Tom Thackray [00:44:07] But they're committed at the same time to investing in the technologies that are going to see them decarbonize. I think there's probably an opportunity for, actually that their customers and the demand side in the U.K. to push them, to give them reassurance, I suppose, that if they switch to this, the low-carbon alternative, that there's a market for it and they're not just going to be left high and dry.

Mike Reynolds [00:44:43] Completely. One of the things I'm interested in... Because a policy, when you're talking about decarbonization, everyone always jumps into energy policy. For industry, I think there should be more incentives for industry to decarbonize. I think there should be tax incentives. There should be money off the top. Off the top, off the bottom, whichever one it is. That actually, it's got nothing to do with your decarbonization or energy budget, it's just we would like you to decarbonize. We'd like you to stay in the U.K., and we recognize that there's an advantage in you doing that for us. And therefore, if you are able to hit this trajectory with your CO2 footprint, then there will be some kind of tax or employment credit benefit.

Mike Reynolds [00:45:25] And I do worry sometimes that the policy for decarbonization, because it sits in BEIS... And not BEIS anymore, it's DESNZ or something, isn't it? Department for Energy Security and Net Zero. But because it sits in there, we miss that connection with actually, "Yeah, but businesses pay loads of other taxes." What about lower rates if you are in a certain area of a city which connects into a district heating network, for example? And if you connect then you get lower business rates for the first five years. A creativity around that is, I think, still missing from policy with the government. I don't know, maybe that's something we can work on with the CBI.

Tom Thackray [00:46:04] Yeah, I think we're really interested to look at all of those levers that government could pull. I mean, there is the exact opposite in places now at the moment, isn't there? So if you invest in capital to make you more energy efficient in your plant, for example, then you get a bigger business rent bill at the end of the tax year. And it's a conscious disincentive to invest in becoming more energy efficient and cutting emissions.

Mike Reynolds [00:46:34] Exactly. I could go for a very long time on that one, but I won't. Okay, good. Tom, this has been fantastic. You gave us a real tour through the flavor of the CBI and the work that you're doing and particularly the connection to business. So, something I'd like to finish with is the question I finish with with everybody. You're clearly very passionate. You clearly care about making a difference. I don't think people come on this podcast if they don't care about making a difference. You've been there 13 years, and I want you to project forward for me 13 years into the future. You'll be as gray as me. And I'd love to know what do you want your legacy to be when you look back on your career? What's the impact that you would like to have had and that you'd like to be remembered for?

Tom Thackray [00:47:17] I would really like to say that I've made a difference in industrial decarbonization businesses' journey towards net zero. I'm lucky that I work for an organization which is influential with government, but also influential with businesses as well. And we do have that role in sort of leading companies. I'd say right now, there's quite a lot of pessimism out there in terms of creating conditions being difficult. But I'm at heart really optimistic, actually. Seeing the power of sort of markets and competition, that's why I work for the CBI. I believe in businesses' ability to get the job done. And we've seen in many examples the cost of these green technologies coming down at a much faster rate than anyone thought was possible because we've had the power of private sector being involved. So, it's galvanizing businesses on that journey.

Mike Reynolds [00:48:18] One hundred percent. One hundred percent. And matching the power of business to drive change and try to do things in a way that no one had imagined with a government that could create the certainty where it's needed to make big things move. I think if you could put those two things together, it's very exciting. Centrica or British Gas and Octopus Energy have just entered a footrace for who can install the most heat pumps in people's homes. That for me, is business doing it's thing. It's no, "Yes, there's a government..." I think it's a £5,000 incentive to put a heat pump in. That's not going to make it happen. It's the competitive element, which is, "Okay, this is the direction to travel. I want to get there first because that's market share and that's long-term value." That for me is very exciting to see. And I think if we could see that across other parts of industry, it would be really, really great.

Tom Thackray [00:49:19] And where we were talking about coming as a newcomer to this, as I'm entering into this, I was struck quite soon in sort of getting involved in debates on energy and climate change. There's a bit of a push in some part of the segment. People say, "We are going to make these sacrifices, basically, to get to net zero." And some of that might be true. But I've also seen amazing innovations around service innovations about tracking your energy use in your home. You're seeing like the innovations around alternatives to meats and how that's come on over the last 10 years and how great those products are. And I just feel like we're going to lose people very quickly if you're asking them to make too many sacrifices on the route to net zero. But if you paint a picture for them of these great things that are coming out, how the services, the products that they're going to be able to access over the next 10 to 15 years will make their lives better, that's how it's going to be won. It's a soapbox issue, I think.

Mike Reynolds [00:50:30] So, a positive note to end it. Let's inspire people, let's give them a reason to do something and a value that it delivers rather than tell them that they can't go on holiday and they have to sit in the dark. I one hundred percent agree, one hundred percent. Very good. Thank you so much, Tom. Really appreciate the time today.