Net Zero Strategy: High Court Ruling

– in the House of Commons at 10:32 am on 21st July 2022.

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Photo of Kerry McCarthy Kerry McCarthy Shadow Minister (Climate Change and Net Zero) 10:32 am, 21st July 2022

(Urgent Question): To ask the Secretary of State for Business, Energy and Industrial Strategy to provide a response to the High Court ruling that the net zero strategy is unlawful.

Photo of Greg Hands Greg Hands The Minister of State, Department for Business, Energy and Industrial Strategy

Over the past three decades, the UK has driven down emissions by more than 45%— the fastest reduction of any G7 country. We have one of the most ambitious carbon-reduction plans in the world, pledging to reduce emissions by at least 68% by 2030 and by 77% by 2035, compared with 1990 levels, before of course reaching net zero by 2050. Our track record speaks for itself: the UK overachieved against the first carbon budget and exceeded the second by nearly 14%. The latest projections show that we are on track to meet the third carbon budget as well.

In its judgment on the judicial review of the net zero strategy, the High Court found that Government had not complied with Climate Change Act 2008 in relation to some specific procedural issues and the level of analysis published as part of the 164-page net zero strategy. I stress that the judge has made no criticism about the substance of our plans to meet net zero, which are well on track. Indeed, even the claimants in the case described the net zero strategy as “laudable”. The independent Climate Change Committee described the net zero strategy as

“an ambitious and comprehensive strategy that marks a significant step forward for UK climate policy” and as

“the world’s most comprehensive plan to reach Net Zero”.

We are now considering the implications of the Court judgment and deciding whether to appeal. As we do this, our focus will remain resolutely on supporting people in the face of globally high energy prices and on boosting our energy security. Our recent British energy security strategy—launched by the Prime Minister—which puts Great Britain at the leading edge of the global energy revolution, will deliver a more independent, more secure energy system and support consumers to manage their energy bills.

Photo of Kerry McCarthy Kerry McCarthy Shadow Minister (Climate Change and Net Zero)

Let us be clear: we are here because the High Court has ruled that the Government’s net zero strategy is unlawful and is in breach of the Climate Change Act. The Climate Change Committee, which the Minister cites, said only a few weeks ago that the Government

“will not deliver Net Zero” on current projections. Not only have the Government failed to set out the detail of how they will reach net zero, but Ministers cannot even do basic maths, because, as the High Court made clear, adding up the emissions cuts in the strategy will leave a 5% shortfall. How embarrassing that his Department must be dragged to court to hear what we have known for months—that the numbers simply do not stack up.

This week has made it clear why we have to act now. The country has suffered through a sweltering heatwave causing fires across the country and infrastructure failure. But at a crucial time, this Government are directionless and collapsing in on themselves. The High Court has ordered that a revised strategy must be presented by next March. That will be under a new Prime Minister. Yet the current candidates have made their views on net zero clear. One has spent two years in the Treasury blocking climate action that might have saved the Government this embarrassment; the other wants to scrap green levies.

So forgive me if I have little faith that the situation is set to improve—but it has to. We need to insulate millions of homes to slash emissions and bring down bills. We need a green sprint for renewable energy to wean ourselves off expensive fossil fuels. Labour will deliver that, and more, with our £28 billion climate investment pledge. That is what the public want and what the planet needs, so will the Government get their act together, meet their legal obligations, and finally deliver the green future that we need?

Photo of Greg Hands Greg Hands The Minister of State, Department for Business, Energy and Industrial Strategy

I thank the hon. Lady for that set of questions. Let me first stress that the net zero strategy—I have it here—is a very comprehensive document with pages and pages of annexes as well. It would be well worth all Members re-reading it today. It is a comprehensive plan for meeting our climate targets, outlining measures to move to a green and sustainable future. The Court found that we had not complied with the Climate Change Act only in relation to specific procedural issues and the level of analysis published as part of the strategy. The judge agreed that it did not need to contain measures with quantifiable effects to enable the full 100% emissions reductions required. [Interruption.] We are talking here about a strategy for the next 28 years. Inevitably, there will be some evolution in the strategy, and inevitably there will need to be some flexibility in a strategy with a 28-year timeframe.

The hon. Lady asked about the Conservative leadership candidates. In all the hustings that I have been to—and I think I have been to almost all of them—all the candidates made strong commitments to meet net zero, including at the hustings chaired by her near neighbour, my right hon. Friend Chris Skidmore.

When it comes to net zero and climate change, I am not going to take any lessons from Labour, which is the party that said in 1997:

“We see no economic case for…new nuclear power stations.”

That has set us back decades. There is a reason why 11 of our 12 power stations are coming off-stream before the end of this decade: the decisions, or non-decisions, by the last Labour Government, who increased our dependence on gas from 32% to 46% of our electricity generation—which could only have cheered Vladimir Putin. On energy efficiency, we inherited a position where 14% of properties in this country were rated A to C. We have increased that to 46%. When we took office, renewables made up only 7% of our electricity generation mix. That is now at 43%. So I am going to take no lessons from Labour. It is this Government who are taking the tough decisions, including on Sizewell yesterday, and moving forward on renewable energy and nuclear—not any of the Opposition parties.

Photo of David Duguid David Duguid Conservative, Banff and Buchan

Thank you, Mr Speaker. I did wonder if I had managed to catch your eye.

Will my right hon. Friend confirm that this Government, whoever leads them after the summer, will remain committed to the net zero by 2050 target, given that, as he rightly said, in successive hustings, all candidates confirmed their commitment to maintaining that target? Will he also confirm that the UK oil and gas companies are at the forefront of driving forward the energy transition through so many different initiatives, such as carbon capture and storage, which will be so important to the St Fergus gas terminal in my constituency?

Photo of Greg Hands Greg Hands The Minister of State, Department for Business, Energy and Industrial Strategy

My hon. Friend is correct. He is always a strong voice for all the industries in his constituency, whether they be traditional oil and gas or those making the transition to carbon capture, utilisation and storage, hydrogen and so on. All these technologies will be crucial. The Climate Change Committee itself has said that carbon capture, utilisation and storage is “essential” to the achievement of our net zero goals. We remain on course to reach net zero by 2050 as a world leader, particularly under the COP presidency of my right hon. Friend Alok Sharma.

Photo of Deidre Brock Deidre Brock Shadow SNP Spokesperson (Wales), Shadow SNP Spokesperson (Environment, Food and Rural Affairs), Shadow SNP Spokesperson (COP26)

The judge ruled that the Minister could not have “rationally” reached the conclusions he did or made the decisions he did as a consequence of his lack of information in making the policy. If, as the judge ruled, the Minister could not have “rationally” made his decisions, on what irrational basis did he make them?

What confidence has the Minister that his Government’s climate policy can be fixed when both candidates for his party's leadership are at best lukewarm on climate issues, and at worst willing to sacrifice net zero? The Foreign Secretary said this morning that she would scrap the green levies, for example.

It is estimated that Scotland is missing out on 2,500 green jobs owing to the languid pace at which the UK Government are developing the renewables sector. Does the Minister agree that the UK Government should devolve financial powers to Scotland so that the Scottish Government can push forward renewables and clean technologies where the UK Government have failed to do so?

In 2020, the Met Office conducted a hypothetical thought experiment to determine what the weather would be like in 2050 if climate change accelerated as expected. Several of those projections are coming true now, 28 years early. Does the Minister not agree that it is vital for our plans to fight climate change to be up to the job, and that the next Prime Minister must remain completely committed to that fight?

Photo of Greg Hands Greg Hands The Minister of State, Department for Business, Energy and Industrial Strategy

It is entirely wrong to say that any of the candidates to be the next Prime Minister are lukewarm on climate issues. On the contrary, the commitment to net zero from all the candidates—well, both the candidates in the last round—is absolute. I am a little surprised by the Scottish National party at times: this is the UK Government who brought COP26 to Glasgow and brought it to the attention of the world, and all that the SNP has done in the last year is snipe from the sidelines.

The hon. Lady mentioned jobs. There are already 430,000 people across the United Kingdom working in low-carbon businesses. The British energy security strategy will increase the number of clean jobs in the UK, supporting 90,000 jobs in offshore wind, 10,000 in solar power and 12,000 in the UK hydrogen industry by 2028. I think it is about time the SNP got behind our energy transition—supporting, for example, the move to nuclear power, which is a key part of decarbonised electricity generation—and got behind what the UK Government are doing on behalf of the people of Scotland, as well as the rest of the UK.

Photo of Dr Caroline Johnson Dr Caroline Johnson Conservative, Sleaford and North Hykeham

I attended nearly all the hustings as well, and I was pleased to hear all the candidates support the net zero target and express their commitment to climate change. One of the challenges that we face, however, is the fact that the homes of people in rural areas are less likely to be well insulated and less likely to be easy to insulate. Furthermore, we have no mass transit systems—which, indeed, would be impractical in most rural areas—so we rely much more on fuels for our cars. What can the Minister do to ensure that, as we move towards climate change as a country, we do so in a way that does not penalise those in the countryside most financially, but spreads the risk and the penalty evenly?

Photo of Greg Hands Greg Hands The Minister of State, Department for Business, Energy and Industrial Strategy

My hon. Friend is a continuous and doughty champion on behalf of her rural constituents, and she has raised with me previously issues relating to properties that are off the gas grid and the costs of heating oil and liquefied petroleum gas. I am looking at these matters very closely, and have held roundtables both with Members of Parliament and with the industry. I urge her to engage—in fact, I am sure she has already done so—with the trade body, the UK & Ireland Fuel Distributors Association, which will make a strong case that there is a competitive market there. Obviously prices are high—driven by the high global prices of energy, particularly oil—but a price cap, for example, would be an inappropriate means for those companies to use.

I strongly agree with my hon. Friend that the commitment of this party and this Government to net zero is absolute, and one of the strongest in the world.

Photo of Richard Burgon Richard Burgon Labour, Leeds East

Oil and gas giants have driven the climate crisis, yet one Cabinet Minister banked £1.3 million from an oil company while a Back-Bench MP, and another has accepted £100,000 from a firm run by an oil trader. I will be tabling a Bill to kick oil and gas money out of politics. Is it not time we did just that?

Photo of Greg Hands Greg Hands The Minister of State, Department for Business, Energy and Industrial Strategy

That is a familiar refrain from the hon. Gentleman, and he ignores a lot of evidence that those same companies are big contributors to our world-leading renewable energy programme. We have Europe’s largest installed offshore wind capacity, we are moving into tidal, we are increasingly moving into onshore wind and we are ramping up our solar ambitions. A large part of our hydrogen production and our carbon capture, utilisation and storage is being done by energy companies. I look forward to seeing whether the Labour Front Bench supports his Bill.

Photo of Wendy Chamberlain Wendy Chamberlain Liberal Democrat Chief Whip, Liberal Democrat Spokesperson (Work and Pensions)

The Climate Change Committee has warned that the Government are on track to cut only 40% of the emissions required to reach the 2050 net zero target. The reality is that the Secretary of State for Business, Energy and Industrial Strategy is not sufficiently senior to co-ordinate the Government’s net zero response. Does the Minister agree that, perhaps as part of the evolving strategy he has described, we should have a Department and a Secretary of State for climate change, as there used to be, so they can be held accountable for delivering on that net zero target?

Photo of Greg Hands Greg Hands The Minister of State, Department for Business, Energy and Industrial Strategy

That is a slightly curious question. The hon. Lady said the Secretary of State for Business, Energy and Industrial Strategy was insufficiently senior to take the decisions, but she then appeared to propose halving the size of his Department, which would probably make him less senior.

On the hon. Lady’s central point about the net zero strategy, this country remains on course to deliver net zero by 2050. Nobody ever said it would be straightforward or easy. The strategy set a 29-year path at the time of publication, and we are on good course. I have every confidence that the strategy will be the blueprint as we move forward.

Photo of Barry Sheerman Barry Sheerman Labour/Co-operative, Huddersfield

I do not recall so much complacency oozing from the Government Front Bench in a very long time. I do not know about the Minister’s background, but when I studied economics, I was impressed by what John Maynard Keynes said:

“In the long run we are all dead.”

I believe the heat over the last few days means that 2050 will be too late for much of our population. We have to revise the target and move faster. There are some good things coming, but there are still so many closet climate change deniers in the Government and in the country. It is about time they opened their mind to the fact we now have to move faster and firmer.

Photo of Greg Hands Greg Hands The Minister of State, Department for Business, Energy and Industrial Strategy

I am afraid to say that is an extraordinary attack, even by the hon. Gentleman’s standards. Actually, this Government were the first to introduce a net zero target. At COP26, we saw our Prime Minister and our COP President leading the world on action against climate change—action that others now seek to copy.

Photo of Barry Gardiner Barry Gardiner Labour, Brent North

The UK has the lowest tax take in the world from offshore oil and gas. Even with the temporary energy profits levy, the tax take will still be six percentage points lower than the global average, and the new investment allowance announced by the Government will compensate companies 91p for every £1 they spend on new oil and gas projects. Will the Government look carefully at the fiscal regime and abolish the obscene subsidy that is distorting investment into outdated fossil fuels instead of new renewables, which do not qualify for that investment allowance?

Photo of Greg Hands Greg Hands The Minister of State, Department for Business, Energy and Industrial Strategy

I return to what I said earlier. The situation we inherited from the last Labour Government is that renewables provided only 7% of our electricity mix; it is now 43%. When it comes to oil and gas taxation, the Government’s energy profits levy—the hon. Gentleman will know this, as I very clearly remember him debating it in the Chamber—is set to raise £5 billion this year, which is considerably more than the tax proposed by the Labour Front Bench, which he backed.

Photo of Rachael Maskell Rachael Maskell Shadow Minister (Digital, Culture, Media and Sport)

I just remind the Minister that it was Labour’s Climate Change Act that called for those targets to be set—in section 4. However, it seems that this Government were asleep at the wheel, knowing that there is a 5% deficit in terms of being able to attain—this is what the judgment said—their net zero target. Therefore, the Government’s inaction has led to the decision of the courts. The Government’s inaction is also leading to the absence of a new green deal for York. We have been promised that by his Department, which supports 4,000 jobs and the upskilling of 25,000 people with a new green deal, yet the Minister has not come forward with the money. When are we going to get that?

Photo of Greg Hands Greg Hands The Minister of State, Department for Business, Energy and Industrial Strategy

I was referring to the adoption of net zero, of course, which was by this Government in 2019. I answered a question earlier about the jobs being provided through our action on climate change and our move into renewable energy, which I would hope the hon. Lady supports. The hon. Lady suggests that this Government and this party are not taking the tough action that we need and not putting the money there, but we have pledged £30 billion to combat climate change over this spending review. That is a considerable sum and a considerable political commitment by this Government.

Photo of Drew Hendry Drew Hendry Shadow SNP Spokesperson (Trade)

The High Court ruling that the Government’s flagship policy on climate change is unlawful is a clear warning that this UK Government are not doing enough on climate change. They should embrace that criticism and do something about it urgently, but instead they try to dodge it. The Minister mentioned the Climate Change Committee. It has said that nuclear will take too long; there needs to be a rush for electricity through renewables, and carbon capture and storage needs to be developed more quickly too. Why are the Government lagging behind and not taking this advice to deal with this important issue?

Photo of Greg Hands Greg Hands The Minister of State, Department for Business, Energy and Industrial Strategy

As I said, we are considering our options in the aftermath of the Court ruling, but let me deal with some of the substance of what the hon. Gentleman is saying. He is saying that nuclear will take too long. The SNP has been opposed in principle to nuclear power since its very existence. So on the one hand he is saying he does not want it, but on the other hand he is saying it is taking too long. That makes no sense at all. The hon. Gentleman will remember that on the very day we published the net zero strategy we also announced the programme to move forward with carbon capture, utilisation and storage—we are on good track there.

On renewables, the whole of the UK is taking part in our huge move into and boost for renewable energy. Scotland is a vital part of that, which is why we have announced the first ever tidal contracts in the contracts for difference regime, as well as the first floating offshore wind deals. We are making sure that the whole of the UK benefits from our offshore wind assets, including, for example, in the Celtic sea between Wales and Cornwall, as well as off the north-east coast of Scotland, the North sea and the Irish sea.

Photo of Olivia Blake Olivia Blake Shadow Minister (Climate Change and Net Zero)

I am surprised by the right hon. Gentleman’s response to this debate, because the summary of the findings highlights that the net zero strategy

“did not reveal that the quantitative analysis put before the Minister left a shortfall against the reductions required by CB6”.

Does the Minister agree that this House should have known that and also known how the Government planned to mitigate that? Are they not embarrassed that they felt that they could hide such an omission from this House, where we hold them to account?

Photo of Greg Hands Greg Hands The Minister of State, Department for Business, Energy and Industrial Strategy

We have to understand the context, which is setting out where 95% of emissions will come from in carbon budget 6. CB6 covers the years 2033—not 2023—to 2037. If we were to have gone back 30 years and asked, “How will we do our emissions over the next 30 years?”, I venture to suggest that that would not have been an entirely accurate exercise. I think that 95% is very credible for CB6, which covers 2033 to 2037. It is worth pointing out again that the court judgment was on this very narrow aspect—it is not about the net zero strategy as a whole. It sounds as though the hon. Lady has read part of the net zero strategy, and I strongly commend that she goes through the whole thing in more detail.

Photo of Ian Mearns Ian Mearns Chair, Backbench Business Committee, Chair, Backbench Business Committee

The Minister refers back to the Labour Government in 1997. Can I just point out to him that that was 25 years ago, and that for the last 12 years his Government have been in power. So in those 12 years, what has been done to rectify this particular problem, apart from possibly one of the major things: a moratorium on land-based wind generation, which has been a complete and utter disaster from that perspective? Has the Minister been asleep at the wheel, or is he only just remembering 1997 now, not in 2010?

Photo of Greg Hands Greg Hands The Minister of State, Department for Business, Energy and Industrial Strategy

The Opposition cannot have it both ways. The hon. Gentleman is saying that he is going back to decisions made by the last Labour Government 25 years ago, but somebody else in the Opposition has said that new nuclear will take too long. It is worth thinking for a moment about the connection between those two. One of the reasons why 11 of the 12 nuclear power plants in this country are going off generation over the course of this decade is the failure to make the decisions in the 1990s and the first part of this century to replace them. He will be delighted to hear—he will have been in the Chamber to listen to this—that we have rectified that by approving Hinkley Point C and yesterday announcing the planning approval for Sizewell C, and also through the strong numbers in the British energy security strategy to move forward to 24 GW of nuclear by 2050. It is this Government who are making the tough decisions that were ducked by the previous Labour Government.

Photo of Ruth Cadbury Ruth Cadbury Shadow Minister (International Trade)

There are two zero-emission policies that the Government could adopt to comply with the High Court’s request for a deliverable plan. One is a zero-emission home strategy. Since this Government have been in power, 1 million homes have been built without those standards in place, which makes a huge contribution to carbon outputs. The second is onshore wind, as my hon. Friend Ian Mearns has already mentioned. Why have the Government not taken on board the carbon savings that we could have if a significant amount of new growth in onshore wind could be invested in?

Photo of Greg Hands Greg Hands The Minister of State, Department for Business, Energy and Industrial Strategy

When it comes to wind, I just do not know what would satisfy the Opposition. We are No. 1 in Europe when it comes to our offshore wind capacity—[Hon. Members: “Onshore wind!”] I hear Members shouting about onshore wind. We have even more onshore wind than we have offshore wind. When it comes to energy efficiency, it is worth pointing out that when we took office only 14% of homes in this country were rated in bands A to C—the most energy efficient. We have increased that to 46%—a trebling of energy-efficient homes—and we have allocated £6.6 billion in this Parliament for energy efficiency. So I would say that we have answered the hon. Lady’s questions and we have raised them, in terms of the capacity of offshore wind, onshore wind and energy efficiency.

Photo of Liz Twist Liz Twist Opposition Whip (Commons), Shadow Minister (Scotland)

The Climate Change Committee recently said that the Government had credible plans to reduce only 39% of UK emissions and that the UK was not on track to meet net zero. Now the High Court has said that the net zero strategy is unlawful. Is it not simply the case that the Government need to grasp the nettle, accept responsibility and just get on with making those detailed plans? When will the Minister do that?

Photo of Greg Hands Greg Hands The Minister of State, Department for Business, Energy and Industrial Strategy

The court did not say that the net zero strategy was unlawful; I refer the hon. Lady to my earlier remarks. The Climate Change Committee praised this Government for the moves we have made on electricity decarbonisation. As I say, we are a world leader in this space, and I think she should show a little bit more pride in the efforts that the country is making, including off the coast in the North sea near her constituency, and also in our efforts on electric vehicles. There is a great deal for us all to take pride in across the whole country in terms of our net zero strategy and decarbonisation.

Photo of Peter Grant Peter Grant Shadow SNP Spokesperson (Europe), Shadow SNP Deputy Spokesperson (Treasury - Chief Secretary)

This week, Conservative Members have given both a full vote of confidence and an enthusiastic standing ovation to a Prime Minister who deliberately missed an emergency Cobra meeting to plan for the heatwave emergency because he was away playing at “Top Gun” with the RAF—playing the part of Maverick, I understand. How can anyone take seriously the climate change credentials of a party that so wholeheartedly supports a Prime Minister who, like some latter-day Nero, chooses to fiddle with his joystick while London burns?

Photo of Greg Hands Greg Hands The Minister of State, Department for Business, Energy and Industrial Strategy

Well, I do not know quite where to start. I am not sure whether there was really a question embedded there. [Interruption.] Now that I have the hon. Gentleman’s attention, let me say that it is about time that SNP Members started to talk to the Scottish Government, with whom, I have reason to believe, they may have some influence, about why they have an ideological opposition to new nuclear. Nuclear is absolutely the way to provide the baseload zero-carbon energy for the future. Why is his party, and the Scottish Government, fundamentally opposed to it? His time would be spent more usefully on engagement with them than on watching what the Prime Minister was up to at the weekend.

Photo of Jim Shannon Jim Shannon Shadow DUP Spokesperson (Human Rights), Shadow DUP Spokesperson (Health)

The Minister will agree that we need to strike a balance. Will he outline how he intends to address concerns in the agri-industry sector in Northern Ireland about the fact that livestock numbers in Northern Ireland would have to halve if we are to meet the net zero target by 2050? That would put 113,000 jobs at risk. Can he outline the steps that will be taken to ensure that the demands being made will not have that result?

Photo of Greg Hands Greg Hands The Minister of State, Department for Business, Energy and Industrial Strategy

I always welcome questions from Northern Ireland. In my previous job at the Department for International Trade, I enjoyed greatly my interactions with the Ulster Farmers Union, with the hon. Gentleman, and with colleagues on behalf of agriculture in Northern Ireland. It is an important sector for the whole country. We are making sure that Northern Irish agriculture can access markets around the world. I would be delighted to pass on his comments to the Department for Environment, Food and Rural Affairs, though obviously agriculture is devolved to Northern Ireland. On trade in particular, we will make sure that Ulster farmers can access markets.

Photo of Margaret Ferrier Margaret Ferrier Independent, Rutherglen and Hamilton West

Calculations have been made to quantify the emissions cuts that will result from the policies in the Government’s strategy. The cuts do not add up to the reductions required to meet the sixth carbon budget; there is a 5% shortfall. That is equal to 75 million tonnes of CO2, which is nearly the total amount of emissions in a year from car travel in the UK. What measures will be implemented to ensure that in future, calculations as crucial as these are informed by those with expertise, and are checked thoroughly before they are relied on in national policy?

Photo of Greg Hands Greg Hands The Minister of State, Department for Business, Energy and Industrial Strategy

To put this in context, what the hon. Lady describes as a 5% shortfall is not, if I read the judgment correctly, a doubt that the Government can reach the target; it is simply a criticism of why we had laid out only 95%, rather than 100%, of the measures that are needed. I remind her that we are talking about carbon budget 6, which is for the years 2033 to 2037. There is a reasonable case—it was made by the Government in court—for saying that it is commendable that they could outline 95% of the journey that we are intending to make in 11 years’ time.