– in the House of Commons at 12:45 pm on 9th February 2023.
I beg to move,
That this House
has considered the Independent Review of Net Zero.
I draw the House’s attention to my entry in the Register of Members’ Financial Interests, and should declare that I am the chair of the independent review of net zero that we are discussing. I thank the Backbench Committee and its Chair for agreeing to this debate. We had an excellent debate in the other place, led by Baroness Hayman, on the recommendations in the “Mission Zero” report, which was published on
Having been appointed chair of the review, I undertook what I understand is perhaps the largest ever engagement exercise specifically on net zero conducted in Government. We received 1,800 written responses to our consultation. I held 52 roundtables, virtually and in person. I toured every region of England and every devolved nation of the UK, and spoke in person to around 1,000 people to understand directly the challenges and opportunities of energy transition for the UK. In that consultation, the message that I heard from the overwhelming majority of respondents was that when it comes to the opportunities that net zero and energy transition can bring to the UK, Westminster, Whitehall and Government are falling behind the curve. Thousands of infrastructure projects are ready to take place, and thousands of businesses see the opportunity in net zero.
The opportunities are not just national; 2022 marked a tipping point in international opportunities for green technology. First, Russia’s illegal war in Ukraine woke countries up to their dependency on foreign-owned gas and oil. We have to be able to provide domestic sources of energy in future. That is why interest in renewable and clean technologies has escalated. Not least, as the report was being prepared, the US passed its Inflation Reduction Act, which provides for $369 billion of investment in green and climate technologies for the future, and sets out a clear direction of travel, and a programmatic approach to investing in carbon capture, utilisation and storage technology, hydrogen, renewable power and new nuclear power. At the same time, the European Union has taken forward its “Fit for 55” programme, and has provided further detail of how it will invest up to €1 trillion in the European green deal.
The review comes at a time when we are at a crossroads. On the one hand, we could continue on our trajectory as leaders on climate policy. We were the first G7 country to sign net zero into law. We could carry on showing leadership, as the only major industrial nation that has been able to reduce its emissions by 40%. Or we could take the other turning—a turning that is not zero and would see us resile from our climate commitments, and from the investments that we have made. Ultimately, the choice of not zero will cost more than continuing in the direction of working towards net zero. That is the choice. I was the Minister at the Dispatch Box 43 months ago, taking forward legislation to ensure we could be the first G7 country to sign net zero into law. I thank the Under-Secretary of State for Energy Security and Net Zero, my hon. Friend Andrew Bowie for his commitment and congratulate him on his new role. I understand that this is probably his first debate as a Minister in the new Department for Energy Security and Net Zero. It may even be the first debate that the new Department responds to. I am delighted that we have a new Department with “Net Zero” in its title. I hope he enjoys reading the “Mission Zero” report. I am sorry it is 340 pages. I am not holding him to having read every page for this debate, but hopefully it will form part of his weekend box.
It needs to be sooner than that. Basically, we have an opportunity now for the Government to look at the recommendations in the report.
The report is divided into two sections. The first part is a new narrative on net zero. As the chair of the net zero review team, I put on record my thanks to my fantastic team of 22 dedicated civil servants who were drawn from across all Departments. I can see one in the Box now, who is working with the Minister. If it was not for the team, we would not have produced a report of such quality. We set out a new narrative on net zero. It is not some kind of eco-project or religion, and I do not stand here thinking that I want the imposition from the centre of top-down policies. I recognise that the challenge we face is to ensure that everyone in society is able to see the opportunities of the energy transition for the future. There will be challenges, and the report is open about those challenges and costs. At the same time, there is an international opportunity: we are now in a global net zero race. We can either continue to lead or we will follow, and the cost of following will always be greater than the opportunity of showing first mover advantage. There are no free rider opportunities here.
The right hon. Gentleman said that he had been to all regions of the United Kingdom of Great Britain and Northern Ireland to ascertain opinions for the independent review. Can he tell us what the opinions were in Northern Ireland? Were they similar to everywhere else, so we can go forward collectively? If we can do that, we can achieve our goals. We cannot achieve them if we are divided.
I had a fascinating opportunity to visit Belfast to hold two separate evidence roundtables. The first was with Belfast City Council, which gave me the public sector perspective on the challenges of decarbonisation and the public estate in Northern Ireland. The second roundtable was with private business and industry, with the Belfast chamber of trade and commerce. What I took from that opportunity to speak specifically about Northern Ireland’s concerns and opportunities was that there are challenges in Northern Ireland. In particular, it will probably achieve net zero later than 2050. On our overall UK net zero target, that is the case for both Northern Ireland and Wales. For Scotland, it will be a bit sooner, in 2045, as I am sure the Minister knows given that his constituency is at the forefront of bringing forward some of the green opportunities that will allow Scotland to go further and faster.
A really important part of the report, which I will come on to in the moment, is taking a place-based approach to net zero. We will achieve net zero in a more affordable and efficient way if we allow local communities, whether they are cities or rural areas, the opportunity to be more empowered to understand how to achieve net zero in a way that suits their local communities.
In Northern Ireland, I listened to concerns about how agriculture could be decarbonised. Northern Ireland wants a whole raft of new biomethane plants. At the same time, there is a new fleet of hydrogen buses in Belfast—it is really pushing forward on fully decarbonising public transport. There was a fascinating discussion on how Northern Ireland wanted to be a leader on green hydrogen. It may not have much offshore wind, but there is a huge opportunity for onshore wind and for the use of hydrogen to drive a whole new economy. Picking up all the pieces that come together that demonstrate the opportunities in every region is exactly what the report tries to reflect.
The report sets out the new narrative that net zero is the primary economic opportunity of this century, but if we do not invest now—that investment is primarily private sector investment, but it needs certainty, clarity, consistency and continuity from the Government on policy—we will turn our backs on a potential £1 trillion of investment by 2030 and turn our backs on up to 480,000 new jobs by 2035. In a way, the net zero review is a bit of a misnomer. I was keen to look at the targets that have been set and to understand how we will realistically meet them. The worst thing one can do in politics is overpromise and underdeliver; it completely undermines confidence in the ability to deliver on our climate commitments and the energy transition.
First, I congratulate the right hon. Gentleman on the report. It is very welcome, and was very ably chaired and put together by him, so I put my thanks to him on record. On delivery, is it not the case that some kind of delivery authority is needed—a body that combines all the quite difficult and complex strands we face on net zero?
Yes. I thank the hon. Member for that point. One of the key recommendations of the report is that we have an office for net zero delivery, which will be able to join all Government Departments to ensure they speak with one voice on the policy commitments that are needed. We have the new Department for Energy Security and Net Zero. That is fantastic news. I hope it will be given the powers and the mandate to enforce an understanding of what we need to do to achieve net zero across all Departments, because it is certain that Departments are falling behind.
On net zero, I am a realist. I understand that on delivery we must be able to provide public confidence in our ability to achieve some of the ambitions that at the moment are just words on paper. The document is very much about delivery and implementation. I created a structure of six pillars to inform the report. The pillars strengthen the foundations of the pathway towards net zero by 2050, but also refer to some sub-commitments such as decarbonising power supply by 2035 and looking at our electric vehicle mandate by 2030. How will we achieve those targets if we do not get the basic under-the-bonnet issues right, such as infrastructure or grid? Delays in the planning system mean that current targets are way off beam and will not be achieved. Unless we are realistic now about what we need to do to unblock those problems and get, as I called it during the review, the debris off the tracks, we will not be able to reach our commitments in time.
Making decisions now is absolutely critical for this Administration. I include 129 recommendations in the report, but I set out 25 key recommendations for 2025, recognising that this Administration probably has about 300 legislative days left in Parliament until October 2024. That is not to say I would not urge them to take on all 129 recommendations. I understand that the Government will respond to the report by the end of March. Coincidentally, as I was taking forward the work on the review, the Government decided not to challenge the High Court judgment that their net zero strategy was illegal and they have agreed, in secondary legislation, to respond to the High Court judgment and the Committee on Climate Change by
There are huge challenges to achieving net zero. I recognise that, which is why we set out in pillar 1 that securing net zero must be a priority—understanding how we will be able to have in place the materials, supply chains and skills to ensure we can deliver on time. The sooner we act, the sooner we will be able to achieve net zero in an affordable and efficient manner. Other pillars cover powering net zero. I asked each sector how it could achieve net zero in a better way. A third pillar looks at net zero and the economy, and how we could work with those hard-to-abate sectors, whether energy intensives or agriculture, to make sure they can also achieve net zero on track.
I am very grateful indeed for my right hon. Friend’s report. The House will remember my interest: I was the aviation Minister responsible for the jet zero strategy. My right hon. Friend referred to hard-to-decarbonise sectors, which include aviation. He also referred to economic opportunities, and sustainable aviation fuel springs to mind. Would he like to comment on that sector? If sustainable aviation fuel can be provided, if we have the feedstocks and if we provide price stability, there will be an opportunity for the UK economy, as well as an opportunity to decarbonise that crucial yet hard-to-decarbonise sector. Does he think it as important as I do?
My hon. Friend’s point is very well made. Our mandate for 10% SAF by 2030 is one of our greatest opportunities to decarbonise in the short term to meet our 2030 nationally determined contribution. If we are to do that, we need to build out the supply chain and take advantage of opportunities to use biogenetic materials and waste materials for SAF, so we need the processing plants in place. My point about what happens under the bonnet is vital to SAF. That is why a circular economy is one of the 10 missions in “Mission Zero”.
I have set out for the Government what I believe needs to happen now in order to unblock the immediate challenges and keep net zero on track, but if as politicians we are to succeed—both in government and as Members of this House—in delivering our long-term net zero goal over a 28-year period, we need to retain the cross-party consensus that it is the right thing to do not just to tackle the climate crisis, but to ensure the future of the British economy and to ensure that the UK plays a leading role in future transition.
I have set out ten 10-year missions, because I believe that tackling energy transition, just like tackling climate change, requires a long-term vision of programmatic certainty, ensuring that businesses and investors have the confidence to invest and to grow, because they know that things will not continue on a start-stop, chop-and-change, project-by-project basis. Germany has a 10-year plan for hydrogen and the US has just set out 10-year visions for its climate technology programmes as part of its Inflation Reduction Act. We, too, need 10-year missions. The ten 10-year missions that our report sets out would start in 2025, after we have got the basics right, and be carried through to 2035.
In writing the report, I took my role as independent chair very seriously. I nearly became an independent MP on the back of the fracking no-confidence vote that happened during the review. I had meetings with every political party, including the SNP and the Liberal Democrats, and several with the Labour party. Whoever wins the next general election and whoever forms the next Administration come 2024, I want them to see the report as a road map not just to delivering net zero, but to delivering it for the benefit of the British people and the British economy.
I thank Chris Skidmore for his work on the report and for his speech, which will have given many people across the House and across the country a lot of hope—something that the actions and words of the Government leave to be desired.
Perhaps the most important constituency work that we do as Members of Parliament is meeting students from schools and colleges. Whether they are little ones in years 1 and 2, arriving in their hi-vis jackets, or sixth-formers who are passionate about the world on which they are about to have a say, it is a huge honour to speak to so many of them and to hear about their worries, their concerns and their hope for the world. The one message I always take away, above all else, is their absolute determination to ensure that as politicians we take the climate crisis seriously and, more importantly, that we act.
It is not enough for politicians to stand up and talk about the climate crisis; it is time to act. We have a responsibility to act, yet over the past decade of Conservative rule, we have seen an approach to the climate crisis that has too often put the need for short-term political gain ahead of the needs of our planet—the planet that our children and grandchildren will inherit.
The irony is that the review’s second conclusion is that the UK
“must act decisively to seize the economic opportunities”, but as the right hon. Member points out, the UK is now dropping back from the economic leadership role it once had on climate change and net zero across the world. If only the Government had listened to that message over the past decade, the country might now be in a different position. On Heathrow expansion, for example, they have not ruled out a third runway, despite the undeniable climate impact of the project.
On onshore wind, British businesses have been leading the way in developing the newest turbines, yet because of the decade-long ban on further onshore wind developments, UK companies have been exporting that technology rather than building it for projects on the hills of the UK to join the ones we already have, like the one my brother can see from his house. The UK could have been a wind superpower by now. We know that more wind power means cheaper bills for our constituents, yet the Government did not act.
Home insulation is another example. Homes in the UK leak three times as much heat as those in Europe, which means that energy bills are far higher than they should be. That adds to the cost of living crisis that our constituents face. The last Labour Government rolled out a plan to insulate new homes and retrofit old ones, but thanks to the Conservative Government’s promise to cut the “green crap”, the programme was massively scaled back.
Almost a decade after coming to power, the Government realised the scale of the crisis and finally introduced a green homes grant programme. My constituents were overjoyed, as were local businesses, but what happened? The scheme was a disaster: it closed down early, and many small businesses lost a lot of money. No wonder the Public Accounts Committee wrote a report on the grant and called it a “slam dunk fail”—a fitting epitaph for the Government’s climate agenda, perhaps. The most frustrating part of that slam dunk fail is that I know from listening to my constituents that they want to see action on the climate crisis.
Electric vehicles are another example. My inbox is full of emails from constituents who want to be able to buy electric cars or vans for their business, but who face hurdle after hurdle. From blocks of flats and residential streets to the strategic road network, there are so many gaps in the EV charging infrastructure that the Government are taking too long to address.
There is inadequate support for local authorities and elected Mayors, who are doing their best. Let me give a couple of examples of good work that is going on. The Mayor of London’s ambition is to cut emissions and pollution and to move to net zero. It is useful to know that all new bus contracts in London include a requirement to use zero-emission buses. My council, Hounslow, has done a lot of work on climate change: all new council homes built will be ultra-low emission, for example. But local elected leaders need national leadership, they need tools and sometimes they need funding from the Government, and too many of them say that they are not getting it. Unfortunately, short-termism and austerity have been the Government’s approach to net zero, which is why I believe the UK has been failing.
I am sure Conservative Members will ask what a Labour Government would do. No doubt my hon. Friend Kerry McCarthy will cover that, but I am very pleased that my right hon. Friend Edward Miliband has set out the bold action that a Labour Government would take to tackle the climate crisis. We would create Great British Energy to champion green and clean energy, we would invest in wind power, we would insulate 19 million homes, we would lower bills, we would improve our energy security, and, most important, we would work to tackle the climate crisis.
I think back to the dozens of students I have heard from throughout my constituency who are desperate for the Government, and indeed the world, to do much more to tackle the climate crisis. Many of them will be voting in the next general election, and the rest will vote in subsequent general elections. We owe it to them to go beyond words and to take action. It is nearly four years since the House declared a climate emergency, and I was proud to be an MP at that time. We know that we are living in a climate emergency: we see the flash floods, the displacement and the degradation of biodiversity across the planet, and we see the implications of all those developments. We can all see the damage that is being done. What we need to do is act now, but it is such a shame that action was not taken a decade ago.
I congratulate my right hon. Friend Chris Skidmore on an excellent report. It is also a very long report, and very comprehensive.
Net zero is all well and good. Of course we need to make effective use of our natural resources—everyone agrees with that. Cutting out waste from our society and using what we have in better ways has always been a sound conservative principle, so none of us can disagree with it. However, we need to approach these issues holistically, and avoid making huge errors that would set us back in other respects for the sole purpose of chasing the goal of net zero.
Let me give an example. Since the second invasion of Ukraine last year, we have realised how tenuous our food security is. The world food supply is incredibly delicate, and it makes no sense whatsoever to take good land out of agricultural use to build huge solar farms. I know quite a lot about this, because in my constituency there are applications to build solar farms on 10,000 acres of good agricultural land. Each of the panels will be 4.7 metres high. Those 10,000 acres that will be taken out of agricultural use could feed two cities the size of Hull every year. Vast resources, in the form of financial compensation, are going to a very few people. Someone who owns 1,000 acres could receive £2 million a year, but tenant farmers, unlike landlords, are being put out of business.
This is a serious issue, and I hope that when people chase goals like net zero, they will try to think creatively. The report rightly says—on page 9, I think, and I have read it—that we must do much more to put solar panels on the rooftops of schools, factories, and logistics and distribution centres. We have millions of acres of flat-roof warehouses where they could go, but cutting the amount of land that feeds our families and communities is surely nonsensical. By all means have as many solar panels as you like and have them within scale, but the applications in a single district that I represent, West Lindsey, cover an area greater than the whole of the east midlands. Whatever anyone says, ultimately the consumer will not benefit from lower prices; the rewards will go into very few pockets indeed.
The excellent report refers to—I like this phrase—
“a clean and endless supply of wind blowing across the North Sea.”
In Lincolnshire, I can stand behind my house, on the top of the Wolds, and see in the distance huge arrays of wind farms in the North sea. They are built with virtually no objections, and we are becoming—perhaps already are—world leaders in this regard. However, when it comes to onshore windmills, while I assure Ruth Cadbury that I understand what she is saying, the ones for which there have been applications in my constituency would be taller than Lincoln cathedral, which for 400 years was the tallest building in the world. None of these huge windmills will be built in Brentford and Isleworth, I am afraid. If they were, there would be such fantastic opposition that it would never happen, so they will all be built in rural constituencies.
I mentioned the hon. Lady, so the least I can do is give way to her.
There are actually at least two windmills in my constituency, one on Ormiston Wire in Isleworth and the other, a large one that a great many people see when they see drive in or out of London on the elevated section of the M4, on Sky Studios.
Well, if I am wrong I am wrong, but I do not think there is much enthusiasm for building windmills as tall as Lincoln cathedral in urban areas. We can say that in theory we are in favour of onshore windmills, but I assure the hon. Lady that every time they are proposed, there is a gruelling process of public inquiries and fierce opposition lasting many years. How much better it would be to concentrate our resources offshore. As I have said, we are world leaders in offshore wind, and there is never any objection.
The report also refers to achieving net zero through better public transport. It talks of the importance of getting more people to use sustainable public transport rather than making individual car journeys. When I am down in London I hate using a car; I would much rather use the tube, the bus or even a Boris bike. However, it is different in rural areas such as Lincolnshire, where we have been calling for better public transport links for decades. Little has been done; indeed, the services have become worse and worse. Too often, we have fallen victim to service cuts when budgets from central Government have been reduced.
If services for people who live in less built up areas are only two-hourly, or even once a day—or indeed, in the village where I live, non-existent—those people have to rely on cars, not just to socialise but for essential activities such as working and shopping. If the Government are serious about net zero in public transport, they must radically upgrade our rural transport links, and that includes the frequency of service. However, that is never going to happen, because it is so fantastically expensive, so I am afraid we will be reliant on cars for decades, or perhaps forever in rural areas such as Lincolnshire. By all means reduce the carbon footprint of buses—put solar panels on them if you want—but a net zero bus that arrives only once a day will not be of much use to you.
It is now 2023, but the sale of all conventional cars is to be banned from 2030, and the sale of hybrids by 2035. Lincolnshire measures 2,687 square miles, or 1,719,600 acres. The Government need to make clear how they are going to roll out charging points across such a vast area, because it is simply not going to happen by 2030. Are they in touch with the energy supply companies? Have they had discussions with rural councils about the transition? I put it to the Minister, who represents a Scottish constituency, that this is simply not practical in rural counties, and we need to think very seriously about it.
The excellent report by my right hon. Friend the Member for Kingswood points out that the UK’s housing stock is much older than that of most similar nations. More than 50% of homes in England were built before 1965, and almost 20% before 1919. As the report says, that has a huge impact on energy efficiency. I live in an old house, and I know very well how difficult it is to heat such houses. Nearly 50% of low-income households in England are in homes with energy performance certificate ratings of D or lower, and on average they use 27% more gas and 18% more electricity than higher-rated homes. These are the least well-off people, but there is no point in our preaching to them about the value of heat pumps, which they cannot afford. Lower-income households simply do not have the disposable income to pay for this kind of investment, unless we are prepared to devote massive resources to helping them.
We are also paying the price of decades of failure to invest in clean nuclear energy. In the wake of OPEC and the oil crisis in the 1970s, France’s Gaullist Prime Minister Pierre Messmer realised how vulnerable his country was, and ordered a huge upscaling of French nuclear energy. As a result, France now has a cheaper, cleaner energy supply, and is selling the surplus to needy countries such as ours.
As I said, we need to approach this issue holistically. The UK’s contribution to carbon emissions is minuscule on the global scale. I am not saying that is an argument for doing nothing, but it is a fact. If we achieve net zero, the gain for the planet can be wiped out by a tiny percentage increase in China’s or India’s huge carbon emissions. These are growing developing economies. Let us be realistic about it: they look at us telling them to cut their emissions and think we are cheating them. They both have complex relationships with the west. We are very friendly with India, but we are the former colonial power there. The rise of Hindu nationalism makes that relationship even more complicated and difficult.
As for communist China, it views us with distain. Judging by China’s actions, it is not wholly convinced by environmentalism. If people view the world from a totally materialist utilitarian perspective, as a communist Government do, why would they be as environmental as we claim to be? They would see all the leading developed and industrialised nations such as ours, which were totally reckless when we were industrialising, lecturing them. Now that we are on top, we tell developing countries to toe the line and not do what we did to get to the top—that is their view. They view our preaching as hypocritical on the one hand and patronising on the other.
Is the right hon. Gentleman not making an excellent argument for why we should lead by example? We cannot tell others what to do unless we show leadership ourselves.
Yes, of course we should lead by example. I accept everything that is in the report and we must lead by example, but I hope that my right hon. Friend the Member for Kingswood, who was an excellent Minister and has written a wonderful report, accepts that some of the points I have made about being realistic, particularly in terms of rural areas, should be taken into account. That is the point I wish to emphasise.
It is a pleasure to follow Sir Edward Leigh, because it is important to hear where people’s concerns are. The report sets out the fact that we must overcome our concerns because we have no option: we need to reach net zero. The House knows how passionate I am about making sure that this country reaches its net zero targets.
While recent news has overwhelmed us with the tragedies of war and natural disasters, the climate emergency continues to threaten our global future. We have to act together, in solidarity. I welcome the independent review of net zero. It is uncompromising in its demand that the Government get a grip and actually deliver on the targets they have set themselves. Last year, the Climate Change Committee made a similar point: tangible progress now lags badly behind the country’s net zero ambitions.
We are on course to overshoot our target level of greenhouse gas emissions twofold. The CCC had previously set the Government several targets for 2022 to stay on course for net zero by 2050; only a fifth of them have been achieved. This is an unforgivable underperformance and shows that the Conservative Government’s commitment to net zero is lukewarm at best. We need to do a lot more persuasion. It is about winning hearts and minds, not just in this House but in our local communities, to persuade people that we need to get to net zero. The commitment has to be more than lukewarm: it has to be hot and passionate. We want to get to net zero.
Too many people still treat our net zero targets like a bus that we can miss and then catch another. We must understand that there will be no next time if we do not reach net zero by 2050—and that means net zero globally. Climate change is already leading to chaotic consequences in our societies. Since 1950, the global number of floods has increased by a factor of 15 and wildfires have increased by a factor of seven. We have seen droughts and famine across east Africa, floods in Pakistan and a heatwave in the UK. The dangers of missing net zero are staring us right in the face. The difference in limiting global warming to 1.5°C instead of 2° would save around 420 million people from exposure to extreme heatwaves.
Our Government should be leading by example—I say that for the third time now. We are an advanced economy. We cannot tell economies that are less advanced that they have to get to net zero but our contribution is so tiny that it does not matter. It matters that we lead by example. I am so glad we have a report that says that net zero is not only good for the planet but makes sense economically. We will miss out hugely if we do not really get to grips with this and deliver on the targets. We must set ourselves ambitious targets and be very passionate and hot about them, not just lukewarm. What message does it send to the rest of the world when our advanced economy does not meet its obligations in the global fight to keep temperature rises below 1.5°?
The independent review recognises that the Government’s tepid approach to net zero means the UK is losing out on green investment. This concern is shared by the Confederation of British Industry and many renewable energy companies, such as Equinor, SSE and Vattenfall. The USA and the EU are developing huge financial packages to encourage green investment, and China is currently the biggest investor in renewable energy, while our Government are still playing to the tune of the oil and gas giants. The UK lags behind all but one of its G7 counterparts in investment in green infrastructure and jobs. It is a massive missed opportunity.
We are in a cost of living crisis because of our reliance on gas and oil. The Government fail to recognise that the fastest and cheapest way to guarantee energy security is to phase out oil and gas rather than invest in more exploration and extraction. I welcome the fact that we now have the new Department for Energy Security and Net Zero—that the two have been put together—because so much of energy security depends on our getting to net zero and phasing out our reliance on gas and oil.
I am pleased that the net zero review recommends that the Government support the Local Electricity Bill. The lack of growth in community energy in the past seven years is a significant missed opportunity. Its major strength is its connection to people and places. It engages people in energy systems and makes that important connection so that we win hearts and minds and people see the advantages of changing. I absolutely agree that change is difficult and we need to get people behind the net zero agenda.
In my Bath constituency, Bath and West Community Energy has installed enough renewable energy to power nearly 4,500 homes. Many of the projects are installed in local school and community buildings. The energy is net zero and far cheaper than gas and oil, but the huge potential for more community energy cannot be realised because current energy market and licensing rules mean that community energy schemes face high grid-access costs.
The Local Electricity Bill would reform the energy market to empower community-owned and run schemes to sell local renewable energy directly to households and businesses. It would make new community energy businesses viable, and those businesses would keep significant additional value within local economies by bypassing large utilities. It is incomprehensible to me why the Government are dragging their feet on enacting this vital change to help an industry that has so much potential not only in reaching net zero but in doing exactly as we are doing with this debate—aiming to win hearts and minds and make people and politicians aware of how important net zero is and how deliverable and advantageous for our society it will ultimately be.
The transition to net zero must be at the heart of every Government policy if we are to hit our targets. The Climate Change Committee has criticised the lack of joined-up thinking on net zero in the Government. Last year, I spoke to a group of sub-national transport bodies that noted the lack of synergy between the Department for Transport and the Department for Levelling Up, Housing and Communities in the development of sustainable land planning principles. That is just one example of siloed thinking in the Government.
I agree with the review that there needs to be a group with actual power that can work across Government to ensure that net zero is considered in every policy decision. A net zero delivery authority, as outlined in a recent Policy Connect paper, could do exactly that. Such a public body should be placed on a statutory footing and operate at arm’s length from the Government to provide assurance to business and people about its longevity and clout. It would be tasked with monitoring and accelerating the delivery of key net zero strategies.
The Government would set the authority’s objectives, rules and principles of operation and the authority would then be responsible for delivery within that framework. I am glad that we have already discussed that this afternoon. [Interruption.] I hope the Minister is listening, because he might be involved in setting up such an authority. I am looking forward to progress with that.
A net zero delivery authority would co-ordinate the delivery of Government strategies between local and national Government. That, too, is incredibly important and has already been mentioned. The delivery of many of our net zero targets should be devolved to local areas, because local people know best, and the delivery of net zero can be so much better achieved through local authorities. The authority would gather information and understanding about local delivery from local government and businesses to inform the national strategy. It would work with partner organisations and national bodies to inform both national and local delivery strategies for decarbonisation.
However, a net zero delivery authority is not enough, which is why we, as Liberal Democrats, are proposing a net zero action plan, backed by a £150 billion public investment programme to fire up progress to net zero and help the UK become a global leader in future technologies. What a net zero delivery authority could do is avoid policy inconsistency and ensure total focus within Government on the climate emergency.
The net zero transition will impact every aspect of our lives. The evidence is clear that the costs of combating the climate emergency are dwarfed by the consequences of inaction. We must all work together to deliver the net zero transition as efficiently and sustainably as possible. If we do not do so, we risk losing the battle to preserve our climate, the future of our country and the wellbeing of our people.
My right hon. Friend Chris Skidmore and his team are to be congratulated on carrying out the herculean and timely task of reviewing the UK’s legal commitment to net zero greenhouse gas emissions by 2050. Generally, I agree with his findings and recommendations, and I urge the Government to consider them carefully and to respond to them proactively. This must not be a document that gathers dust on a bookshelf, or to which occasional reference is made in preparation for debates such as this. Instead, it must mark a sea change in how we set about ensuring that the UK realises the full potential of the growth opportunities that net zero presents.
My right hon. Friend’s review calls for action on the “key 25 for 2025 recommendations”. Each of these proposals warrants a debate of its own, but what I shall briefly do is home in on one subject that is not only very important to delivering net zero, but already bringing significant job opportunities to areas such as Waveney and Lowestoft and, with the right policy framework, can deliver even more. What I am talking about is the offshore wind industry.
Offshore wind has come a long way in the past decade. At the outset, 10 years ago, there were many Doubting Thomases questioning whether the industry had a future, saying that, as a technology, it was way too expensive. However, the industry, working with Government, has proved them wrong. It is now an undoubted British success story, with everyone wanting a slice of the action. As a result, the Government have set very ambitious targets for 2030 and 2050 for the amount of electricity that offshore wind will generate.
The industry has brought significant benefits to East Anglia, with half of the nation’s offshore wind fleet anchored off the Suffolk and Norfolk coast. Its construction is being project managed from ports such as Lowestoft, where ScottishPower Renewables and SSE Renewables also have their operations and maintenance bases, and where Associated British Ports has obtained planning permission and is designing its Lowestoft Eastern Energy facility.
This success can be attributed to a combination of the ingenuity of business and the foresight of Government, who, in the Energy Act 2013, set down a policy framework that has been an undoubted success. However, times change. In many respects, offshore wind is a victim of its own success. The scale of the Government’s vision for the future of the industry means that a more strategic approach to its future development is now required. The Russian invasion of Ukraine and the ensuing global gas crisis mean that other nations, in particular the US with its Inflation Reduction Act 2022, are upping their game in developing their own renewable energy strategies. All of a sudden, the UK, which is still the No. 1 world leader in offshore wind, is at risk of being an also-ran. Energy is a globally footloose industry, and it is vital that we respond to ensure that the UK retains its pole and premier position.
I shall briefly outline how I believe this can be done. First, there is a need to streamline the planning process. A more co-ordinated and efficient planning system is required if we are to achieve the 50 GW 2030 target. The establishment of the offshore wind acceleration taskforce will help achieve that, but its reforming work does need to take place at a greater pace.
Secondly, and in the same vein, we need to speed up the development of the grid system, so that offshore wind projects can be delivered more rapidly. We require a new model of grid development where critical investments are accelerated by Ofgem and the transmission owners. To deliver this step change in grid development, the Government should reform the remit of Ofgem through an amendment to the Energy Bill, as recommended by my right hon. Friend the Member for Kingswood and his team.
Thirdly, there is a need for a stable and attractive fiscal framework that enables businesses to make what are enormous investment decisions with confidence. It would be wrong to get into a bidding war with the US, the EU and other nations, but we do need a taxation regime that encourages investment through a compelling range of capital allowances. I urge my right hon. Friend the Chancellor to introduce these in the forthcoming spring statement.
Fourthly, although the framework set down in the Energy Act 2013 has served us very well, it does need considered reform to take account of the harsh new global economic reality. Due to inflation and supply chain constraints, it is necessary for Government to adjust the parameters for future contracts for difference auctions, both with regard to their overall budget and the strike prices that are set. In the longer term, it is necessary to reform the contracts for difference allocation process so as to better balance price and supply chain considerations. In doing so, we will be able to maximise the opportunities that offshore wind presents for economic regeneration and job creation in places such as Lowestoft.
Does the hon. Member agree that one of the biggest problems that we encounter is not so much the CfDs, but the delay that is caused by grid access? The National Grid cannot develop new grid infra- structure until projects have come on board.
I agree with the hon. Lady. The industry faces a whole range of challenges. The contracts for difference one is very important at the moment, with developers putting forward their bids, but the grid is an important issue. As I have said, the industry has been a victim of its own success. The point-to-point approach to making connections into the grid, which we have had up until now, is, I fear, no longer sustainable and we need to move on to that more strategic approach.
My fifth and final point is that it is important that the Government act as a catalyst for investment in key infrastructure, particularly in ports. That is vital in order not to deflect investment overseas. Such leveraging could include revenue guarantee support for investors for a limited period, to overcome the risk gap at the time of final investment decisions, and looking to see what the UK Infrastructure Bank can do to crowd in private investment.
In conclusion, as I mentioned at the outset, offshore wind has come a long way over the past decade. In many respects it is now the UK’s star player in mission zero. It provides hope and opportunity for communities all around the UK. The existing partnership between business and Government, which culminated in the sector deal signed in Lowestoft nearly four years ago, has served us well. However, the regulatory and policy frameworks now urgently need reviewing if the UK industry is to retain its premier position. If we do not do that—my apologies for this metaphor, Madam Deputy Speaker—there is a risk that we will have blown it.
I appreciate being given the opportunity to speak, Madam Deputy Speaker. I congratulate Chris Skidmore on compiling this review—an impressive feat in such a short period of time since it was first requested of him. The focus on this issue is long overdue. This place and this country need far more urgency and purpose in trying to achieve our net zero ambitions. I absolutely respect him; he is a decent individual and, while I have not read the entire review, I am sure that all 129 recommendations are sensible and well-founded.
For me, net zero is not just the right thing to do, something that is critical for our society, our future and our civilisation, but economically important. That is why I am so struck by the failure in recent years to grab that opportunity. I wish the right hon. Gentleman well in the internal discussions on this review; certainly I fear that the Government perhaps have not engaged as much with Lord Deben and the Climate Change Committee in recent years, which is a real shame.
I think back to the signals we have had for many years now, going back to 2006 and Lord Stern’s report and the international work of people such as Al Gore, speaking about the inconvenient truth that we face and the lack of urgency in recent years. That was in 2006. We are approaching almost 20 years since then. Funnily enough, it was in the same year, 2006, that I approached my local district council, wanting to convert a building into a low-carbon property. Sadly, I was refused permission—to be fair, it was a minor change of use from a storage building, although it had been used as a house in times past—so I went to the Planning Inspectorate and appealed. The planning inspector found in my favour and I was given permission to convert that building. I wanted to prove what could be done in terms of developing a low-carbon building.
I appreciate that in the last 24 hours the Government are now refocusing on the importance of net zero with the restructuring of the departmental teams, but we are only really going back to where we were in 2010, when we had the Department of Energy and Climate Change, in recognition of the work of Lord Stern, Al Gore and so many others. That recognition led to the world-first Climate Change Act 2008, passed by Labour in government, which I think was a fantastic piece of work. Even though I was nowhere near this place at the time, I had a huge amount of respect for the work being done.
Sadly, in the intervening 12 to 13 years, we have seen massive retrograde actions by first the coalition Government and then successive Conservative Governments, when there was an enormous economic opportunity for us. I will come back to some of those opportunities later, but the decision to do away with the zero-carbon homes legislation was one of the most retrograde acts that they could have committed. We are now seeing why building new homes with gas dependency was such a wrong decision, first because of increasing demand for gas, but secondly because it was not the right thing to do to combat climate change.
As I am sure other colleagues across the House do, I visited a new housing estate a couple of weeks ago. There were 130 properties on the estate I visited, and of those none had EV charging points, solar photovoltaics, solar thermal or heat pumps. Those are brand-new houses that have not yet been completed. When I asked why those things were not being done, the builders said, “Well, it didn’t need to be done, to be fair, and the owners can always retrofit them.” Trust me—having been through building a house, I can tell hon. Members it can be quite challenging, but if a house is being built from scratch, it is much cheaper to install those things there and then. The fact that we are not installing such basic things, or even making provision for energy storage units in those properties, is a massive failure of the system. That should have been going on all this time; it would have happened under Labour had the party been returned to power in 2010.
The issue of existing homes has also been discussed and mentioned by a couple of hon. Members. I appreciate that we have a much older housing stock, but we could have been taking action over many years to change properties through secondary glazing, triple glazing and so on. When I visited properties built in the late 1950s in Germany, which had had double glazing and underfloor heating installed back then, I was struck by just how far in advance of us other nations have been on this.
There is an economic opportunity on insulation schemes, where we can not only reduce households’ dependency on fossil fuels, but also significantly reduce their energy bills. To the naysayers who say there really is very little advantage for an individual or a household, the gas consumption in my property in the last 13 years has been 130 cubic metres. When hon. Members next look at their gas meters and see how much they have used in the last year or the last quarter, they will realise how staggeringly low that figure is.
On power generation, I am afraid I do not share the views of Sir Edward Leigh, who has sadly just departed the Chamber. I believe there is an exciting opportunity in the field of power generation to introduce much more onshore wind, and offshore wind as well. Those of us who have the apps on our phones will have seen that for many months now, offshore wind-generated power has typically produced 40% to 50% of UK electricity energy. That is a fantastic result and just shows what can be achieved. Domestic solar is also a good and important thing that should be installed as a matter of course, not just in new build, but retrospectively, and then of course there is the opportunity for localised modular reactors to supplement power generation across the UK.
Power distribution is another important part of the equation, as the right hon. Member for Kingswood was saying. National Grid, which is headquartered in Warwick in my constituency, is central to that. Just a couple of weeks ago, I was up in the Wansbeck constituency, where there is a National Grid site with two cables coming ashore from a plant in Norway. Those are the interconnectors about which hon. Members may have heard, whereby hydroelectric power is generated and comes into the UK as renewable energy.
To visualise that, at that diameter, those two cables provide 3% of UK electricity. That is just how extraordinary those connections can be. Of course, more are planned, not just from Norway, say, but from Denmark and France. Those cables work both ways: we can bring power from Norway, but we can also supply power to Norway from the excess generated in the UK. That is why they present such a great opportunity. I appreciate that there is an issue on the planning side of distribution. We have to be much more joined up in the way that we approach it. Without localised power distribution, we will not be able to supply much-needed electric power to households and businesses.
One of last areas that I will cover is transport, on which we are really behind the curve. The EV industry is frustrated by where the Government are on this. It is easy to set targets, but we need to give the industries and sectors frameworks and structures against which they can deliver those targets. They recognise that those targets are challenging, and they want to achieve them, but they need more than just the setting of a target. Currently, we do not have an EV gigafactory at scale in the UK other than Envision up in Sunderland, which is very small. We need to get many more built in the UK. Other nations, including France, Germany, the US, Japan and China, are already manufacturing, while we do not even have a spade in the ground. Unless we do that, we will miss out big time on the economic opportunity.
Linked to that is the charging network. I mentioned the distribution of power; what we do not have is an overall strategy for the delivery of charging points across the UK. Again, we are way behind our international partners. The other point to mention on transport is the importance of the insistence on transport hubs across our towns and cities to encourage active travel.
The report that the right hon. Member for Kingswood has put together gives hope. Every time I visit a school, there are one or two issues on the minds of the young people there, and climate change is absolutely the foremost. They do not expect us just to talk about it; they demand that we act and deliver for their futures.
There is, as I say, an economic opportunity, and not just with gigafactories. I remember that the solar thermal unit I bought was manufactured in Scotland. I do not even know if that plant still exists, but I would be surprised if it does after the changes in 2010 and the green whatever- it-was that my hon. Friend Ruth Cadbury referred to. That change in legislation meant that we lost a lot of good businesses and manufacturers in the UK that could have been supplying to this economic opportunity. Even Alternative Energy Technology, a small business based in Atherstone in Warwickshire, which installed all the kit in my property, fell by the wayside because of those changes.
I commend the right hon. Member for Kingswood for this substantive report. He spoke of challenges and opportunities, and he is absolutely right. I see huge opportunities, and we need to minimise the challenges. I appreciate the point made by Peter Aldous about how planning needs to be addressed across Departments if we are to speed it up. It is so, so slow. I hear his point about “not zero”. If we do not do this, we will miss a huge economic—as well as critical—point in our history. Many people talk about this stuff, but I think the right hon. Member for Kingswood is absolutely sincere, and I welcome his report, for which I thank him.
I commend Chris Skidmore for the work he has done, and for securing the debate. I thank the hon. Members who have taken part. As always, I tend to disagree with the contribution from Sir Edward Leigh, but I certainly agreed with most of the others.
There is certainly much to like in the report, with stuff to debate and, of course, some stuff to disagree on. Given that the review was commissioned by the previous Prime Minister, after her ill-informed leadership campaign in which she pledged to remove levies from bills and alluded to net zero as a costly commitment, I welcome the fact that the report was undertaken purely independently and did not go down that rabbit hole. The key thing now is what the Government do with the recommendations, especially in the short term, given that implementation for 25 of them is recommended before 2025. That is critical because existing carbon budgets are off track. We need re-alignment if we are to hit net zero by 2050.
I note that the term “Scottish Government” is not used once in the main body of the report. Although I accept that there is engagement, and that some good practice from Scotland is mentioned in the report, I would have expected more references to and understanding of where the Scottish Government are taking a lead, including on the roll-out for electric vehicle chargers, interest-free loans for EVs, the embracing of onshore wind, peatland restoration, woodland planting, the just transition commission, the £500 million low-carbon fund for the north-east, energy efficiency measures and the roll-out of zero-emissions buses. There is a lot of good practice in Scotland that the rest of the UK could learn from. More consideration is required of devolved Governments’ inability to deliver because of funding constraints and, in the case of the Scottish Government, strict borrowing powers. That also needs to be debated.
What is abundantly clear in the report is the need for stable and consistent long-term policy to be matched by funding. The Treasury cannot be a blocker. As the right hon. Member for Kingswood said, other countries are now taking the lead in investment. The Inflation Reduction Act in the United States is making it a more attractive place for investment in renewables.
The folly of previous chopping and changing, and the cutting of solar and onshore wind from the contracts for difference auctions as part of David Cameron’s “cutting the green crap” agenda, has meant eight years of investment lost overnight from one policy decision. That has stopped the deployment of the cheapest forms of renewable energy. At least I can say that I am glad that we in Scotland continue to embrace onshore wind. We have made it integral to the decarbonisation of the power sector. The fact is that Scotland generates the equivalent of 100% of gross electricity consumption from renewables. That should be held up as a fantastic achievement and an example for the UK Government to follow south of the border.
At least the deployment rate of solar is now recovering and will soon stand at 1 GW installed per year. That means that, in a period of just three years, the solar equivalent of a Hinkley Point C will come online. Solar is quicker, cheaper and can be deployed where required, providing greater grid stability. I agree with the recommendation for a plan to get a road map for 70 GW of deployment by 2035.
I also agree with the right hon. Member for Kingswood about the need for a re-envisaged road map for carbon capture, utilisation and storage to be delivered this year. The report rightly points out that the investment landscape for CCUS and hydrogen is currently unclear, and that needs to be remedied as soon as possible.
Additionally, the track-2 clusters need to be expedited. It is outrageous that the Scottish cluster remains a reserve when it is probably the most advanced of the CCS clusters and is likely to be delivered quickest. Acorn represents the worst example of the UK Government chopping and changing policy and withdrawing funding. The reality is that the Scottish cluster needs to commence for Scotland to meet the 2030 target of a 75% reduction in emissions.
The new Under-Secretary of State for Energy Security and Net Zero, Andrew Bowie, obviously knows how important the Scottish cluster is as part of the just transition, and how important it is for jobs in the north- east of Scotland. I hope to hear a more positive response, rather than holding with the mantra of, “It is okay, Acorn is the reserve.” Being the reserve is not good enough, and it needs to commence sooner rather than later.
For the record, I agree with the detail on pages 67-68 that we will still rely on North sea oil and gas as we transition towards net zero. Where I fundamentally disagree with the report is in its continued blinkered approach about new nuclear. New nuclear does not form a great deal or a big part of the report, and there is not much evidence, yet it still comes out as a key recommendation and one of the suggested 10 missions. I disagree with applying the phrase “no-regrets option” to the concept of new nuclear.
The report rightly identifies that four of the five remaining nuclear plants will go offline in the next few years, before Hinkley Point C will come on stream. If the UK grid can cope with that scenario, fundamentally we do not need new nuclear as this mythical baseload. It proves we can cope without nuclear. Nuclear is not flexible enough and is relatively incompatible with intermittent renewables. There are still the issues and costs associated with radioactive waste. If we look at long-term performance, we see that nuclear is not necessarily there when the wind does not blow. Over a 10-year period, each nuclear reactor is shown to be offline for roughly a quarter of the year, so it cannot be depended on to be there when it is needed. The reality is that we need to invest in other technologies, particularly storage, to balance intermittent renewables.
The reality is that the nuclear market has failed, because it is too expensive and too risky. There is not a successful operational EPR plant in the world, yet despite that and the ongoing performance issues at Hinkley Point C, the Government seem hellbent on signing up for Sizewell C and using a regulated asset base model that will transfer risk to bill payers. Some £700 million of taxpayers’ money has already been thrown at the development of Sizewell C. That money could be better spent elsewhere. Capital costs for Sizewell C will be at least £30 billion. Think what that money could do if invested in other technologies and in particular in energy efficiency. I welcome the recommendations about aggressive energy efficiency targets going forward. Not only will that make bills cheaper, but it means healthier homes, healthier lifestyles and demand reduction.
Finally on nuclear, the report highlights elsewhere the issue of rising sea levels. It is madness to propose building a new nuclear power station in an area subject to coastal erosion and at risk of rising sea levels. Also, the report demonstrates that nuclear energy has never got cheaper cost-wise, whereas all other technologies, including battery storage and power-to-X fuels, are now cheaper than nuclear. Figures 1 and 2 from the report make the case that we do not need new nuclear and should be investing in other technologies.
Does my hon. Friend share my disappointment that the Conservatives embrace so wholeheartedly dirty, outdated technologies, such as nuclear energy, and refuse to fully embrace tidal energy, which has so much potential for our renewables industry, certainly in Scotland, but right across the United Kingdom?
Before you respond, Mr Brown, just remember the timings that were agreed.
I will aim to be brief. I wholeheartedly agree with my hon. Friend, and I would like to see the Government set a 1 GW target for tidal stream. We need to follow through on the recommendation of the report and set a clear plan for investing long-term in CCUS, hydrogen production and pumped storage hydro, for supporting a carbon floor mechanism and for replacing the EU funding for the European Marine Energy Centre. I hope the Minister will work with us on planning consents for major infrastructure projects. Section 33 of the Electricity Act 1989 is reserved to Westminster, and there is a sign-off process for Scottish Ministers. If we are going to speed up the consent process, we need to work with the UK Government to do that. Hopefully the Minister will work with us on that with the Energy Bill going forward. There is so much to welcome in the report. I wish we had more time to debate it further, but I commend the right hon. Member for Kingswood on it.
I thank my constituency neighbour, my hon. Friend the Member for Bristol West for that enthusiastic endorsement. May I welcome the new Minister to his place and thank Chris Skidmore, another constituency neighbour, for authoring this important review? As Peter Aldous said, it was a Herculean task, and I know how much effort the right hon. Gentleman put into it and how many meetings he had to have. I also thank him for being so open to briefing MPs from all parts of the House about the report’s contents since it was published.
The hon. Member for Waveney also said it is vital that the Government act as a catalyst, so I hope he listens avidly to what I have to say a bit later in my speech about what a Labour Government would do with our green prosperity plan. I certainly agree that this Government could do more to act as a catalyst. I might leave it to the new Minister to respond to Sir Edward Leigh, who does not like solar on agricultural land, does not like onshore wind, and says there is not much point doing anything because China is not doing anything. As Wera Hobhouse pointed out, that is not quite the case. I point out that we are hoping that the Government will produce a land-use strategy before too long, which will hopefully thrash out some of these issues, such as the balance between making sure that good agricultural land is used for food growing and having solar.
My hon. Friend Ruth Cadbury talked about the local context, how enthusiastic young people in her constituency are, the impact of Heathrow and the fact that new social housing should be low carbon, as well as electric vehicle charging infrastructure, which is a subject dear to my heart. She said that local leaders need support to deliver this agenda. The right hon. Member for Kingswood will know what Bristol is doing on that front in trying to lead the way in becoming a net zero city. Again, I thank him for his support on that as a near Bristol MP.
My hon. Friend Matt Western mentioned the creation of the new Department, which I welcome. I just hope that the net zero and climate change side of it does not get too swamped by the energy side, because the Government have made pretty good progress on decarbonising the energy sector. Much more, however, needs to be done in other sectors, and as the report we are discussing today says, there needs to be faster progress on that. It cannot just be seen as the energy Department with the occasional reference to other aspects of achieving net zero.
This report makes clear what we have known for some time now: this Government are failing to grasp the economic opportunities that come with net zero. I am pleased that the report is so unambivalent about the benefits that can come from a transition to a greener economy. It calls it
“the economic opportunity of the 21st century.”
We know this report was originally commissioned to take the heat off a Government who were hellbent on doubling down on polluting expensive fossil fuels, regardless of the cost to the taxpayer or planet. The then Prime Minister, Elizabeth Truss desperately needed political cover while she tried to push through her attempts to bring back fracking and ban new solar developments. Thankfully she did not stick around for long enough to do that.
We hoped that the next prime Minister would learn from the mistakes of his predecessor and embrace climate action as the huge economic opportunity that we know it to be. However, what were his first moves in office? He sacked the President of the COP26 climate summit, tried to duck out of attending COP27, attempted to resurrect the ban on onshore wind and was whizzing around the country by private jet, which I gather he was at again this morning. Those are hardly the actions of a climate champion.
Given that context of two Prime Ministers who, let us be frank, clearly could not care less about the climate, I am pleased that this review is not the greenwash many of us expected it to be. It does a comprehensive job of highlighting the many areas where the Government are falling woefully short in getting us to net zero. It makes clear that constant U-turns and lack of continuity make it impossible to plan and invest. All the businesses that I speak to in my role are telling me that time and again. They do not care about the politics of who is doing it; they just want that certainty, stability and sense of direction. It is clear also that the Government are not doing enough to make green technologies affordable for ordinary households. It is clear that this Government’s decision to axe support for home insulation in 2013 is the reason for plummeting energy efficiency improvements. It is clear that this Government have failed to set out a proper plan to restore nature or balance land-use pressures. It is crystal clear that we are falling behind in the global race to seize the economic opportunities of net zero.
That last point is particularly important. The review states that we must act quickly
“to cement the UK as a prime destination for international capital”.
Economic opportunities are being missed today because of weaknesses in the UK’s investment environment. The right hon. Member for Kingswood mentioned falling behind the curve—we are in danger of doing that.
These missed opportunities are blindingly obvious to anyone paying attention. We have lost Britishvolt in Blythe, the electric Mini in Oxford and Arrival’s electric vans in Bicester, and we are losing our steel industry piece by piece. It was worrying to hear the new Business and Trade Secretary being asked this week whether Britain would retain a steel industry. She said:
“Nothing is ever a given.”
We need to green and retain our steel industry here. Other nations are not facing the exodus of jobs but are actively encouraging their own green industries. They understand that green investment pays for itself. The United States has just announced unprecedented support for green industries through the $369 billion Inflation Reduction Act. Much of that support is linked to support for domestic green industries and designed to attract investment from overseas, too. The European Union has been quick and clear in its response to that Act, with more support for green industries that need it, and proposals for a net zero industry Act and a critical raw materials Act.
How has the UK responded? With a deafening and perplexing silence. I tabled a named day question on the first day back in January asking what our response to the Inflation Reduction Act would be. I keep being told that the Government are not ready to reply. I asked about that at International Trade questions this morning and I think the Minister of State, Department for Business and Trade, Ms Ghani had a slip of the tongue and replied that she was talking to green lithium companies about investing in the US. I suspect that she meant the UK. But there was not a concrete response to IRA and there needs to be if we are not to be left behind.
We should be seizing the initiative, not sitting on our hands. The Government should work night and day to ensure that we do not lose a penny more in green investment because of the failure to make the UK attractive to green industries, especially those at the cutting edge of innovation. The companies doing something new and taking the risks really need that Government support and catalyst that the hon. Member for Waveney talked about. I hope the Minister tells us whether and how the Government are planning to respond to the huge international investment in green industries. Or have they simply given up?
As much as I welcome the report’s findings, it has only told us what we already know about the Government’s progress towards net zero. We are simply not going far or fast enough. The right hon. Member for Kingswood is far from alone in that opinion. His report is merely the latest in a string of scathing assessments of this Government’s record on climate change. The Climate Change Committee said in last year’s progress report that the Government’s climate strategy “will not deliver” net zero. The High Court said that the net zero strategy is unlawful and inadequate. How many times do the Government need to be told that before they get their act together? Given the repeated warnings about the snail’s pace progress towards net zero, the huge uncertainty for investors and the staggering lack of ambition on crucial policy areas, I have little faith that the Government will finally step up a gear. I hope that the creation of the new Department is a sign that it will, but we will be there to hold them to account if they do not.
If this Government do not act, the next Labour Government will. We have put forward a transformative agenda for Government, with a fairer, greener future at the core. We will invest £28 billion per year to tackle the climate emergency through our green prosperity plan, which will allow us to insulate 19 million homes within a decade; to deliver a clean power system by 2030; to establish GB Energy, a publicly owned clean energy company to ensure the benefits of our green investments are returned to the taxpayer; and to set up a national wealth fund to invest in those green industries that the Government seem happy to ignore and drive overseas. That means investment in new gigafactories, renewable-ready ports, green steel plants, green hydrogen, net zero industrial clusters and carbon capture and storage. It means good green jobs and growth for every corner of the UK. That is the kind of vision that this report makes clear is necessary. It is the kind of vision that British industry and this country are crying out for.
I thank the Backbench Business Committee for securing this important debate, and my right hon. Friend Chris Skidmore for publishing the report and pushing for this debate.
Before I move to the subject of the debate, it will not have escaped the notice of Members—in fact, it has been referenced a few times—that I stand here as a Minister on behalf of the brand-new Department for Energy Security and Net Zero. As my right hon. Friend suggested, this is the first debate for this new Department, on my second day. I hope that demonstrates our commitment to net zero. The Department’s laser-like focus will be on securing a long-term energy supply, bringing down bills and halving inflation, giving the UK cheaper, cleaner and more secure sources of energy—something covered in great detail in part 2 of this excellent report.
The report and the creation of the Department align wholeheartedly with the great strides the UK has already made in our actions to tackle climate change. In 2019, my right hon. Friend the Member for Kingswood and the former Prime Minister, my right hon. Friend Mrs May, ensured that the United Kingdom became the world’s first developed country to set a legal commitment to reach net zero by 2050. That was followed by our 10-point plan for a green industrial revolution, published in November 2020. We built on that momentum in October 2021 by publishing the net zero strategy, which set out a detailed pathway to meeting our carbon budgets and net zero targets. That was followed by the British energy security strategy in April 2022, accelerating our ambitions on cleaner energy.
As Members will be aware, since publishing the net zero strategy, the economic conditions have changed significantly, due primarily to the Russian invasion of Ukraine. Energy prices and inflation rose sharply—the former to record levels. In the light of that, in September last year the Government appointed my right hon. Friend the Member for Kingswood to chair an independent review of our approach to meeting our net zero 2050 target, to ensure that we deliver on our legal commitment to reach net zero by 2050 in a way that is pro-business and pro-growth, given the change in the economic landscape.
I am delighted that the results of my right hon. Friend’s independent net zero review were published on
Furthermore, the report reconfirms that the 2021 net zero strategy is still the right pathway, based on modelling on the most cost-effective net zero energy system in 2050, and that the policy should go ahead.
I will not, given that I have made a commitment on time.
The review of net zero recognises that we have all made a great deal of progress through leveraging our international leadership in COP26. The proportion of the world committed to net zero has risen from 30% of global GDP to 90%. His Majesty’s Government have committed more than £2 billion to support the transition to zero-emission vehicles. That funding has focused on reducing barriers to adopting such vehicles, including offsetting the higher upfront cost and accelerating the roll-out of charge point infrastructure.
I take issue with the tone taken by the hon. Members for Bristol East (Kerry McCarthy) and for Brentford and Isleworth (Ruth Cadbury), who claimed that the Government had done nothing on climate. It was a Conservative Government who legislated for net zero. It was a Conservative Government who hosted COP26, and we look forward to working with the UAE as it looks to deliver COP this year to carry on that excellent work. It was a Conservative MP who brought forward the legislation for net zero—indeed, the same MP who wrote the report that we are debating. It was a Conservative Government who hosted the green trade and investment expo in Gateshead last year.
Unlike the Opposition, I am proud that we are leading the way in developing and exporting green technology. There were 430,000 green tech jobs in this country, worth £41.2 billion, in 2022. Companies like Catagen in Belfast, which I visited late last year, are developing green hydrogen and the e-fuels of the future. The hon. Member for Bristol East talked about onshore wind but completely ignored offshore wind. We are the world leader in offshore wind. We have the four largest offshore wind farms in the world off the coast of this island right now.
Despite all that, we are not resting on our laurels. We are raising our ambitions to ensure that we deliver net zero and realise the benefits. In last April’s British energy security strategy, we raised the ambition to deliver up to 50 GW of offshore wind by 2030, including 5 GW of floating offshore wind. We have already invested millions in offshore wind, securing many jobs and up to £320 million of Government support for fixed-bottom and floating wind ports and infrastructure.
To accelerate a reduction in energy demand—[Interruption.] If those on the Opposition Front Bench listen, they might learn something from what we are announcing today in response to the report. To accelerate a reduction in energy demand, the Government announced a long-term commitment in the 2022 autumn statement to drive improvement in energy efficiency to bring down bills for households, businesses and the public sector, with an ambition to reduce the UK’s final energy consumption from buildings and industry by 15% by 2030, against 2021 levels. That will be supported by an additional £6 billion commitment to 2028 and the launch of a new energy efficiency taskforce, further details of which will be announced in due course. By 2030, 95% of British electricity could, if we work together, be low carbon, and by 2035 we will have decarbonised our electricity system, subject to security of supply.
I turn to the concerns raised by my right hon. Friend Sir Edward Leigh. As a Member representing a vast rural constituency with a similarly vast road network, I hear the concerns about the EV charging network and the protection of farmland for food security. The Government take this incredibly seriously, and in due course the Department for Environment, Food and Rural Affairs and our Department will publish plans for how we speed up the roll-out of the EV charging network and ensure food security while meeting our net zero ambitions.
We continue to build on the strong progress we have already made. We have many exciting policy announcements in the coming year. The Energy Bill, which is going through Parliament right now, will deliver an energy system that is cleaner, more affordable and more secure. We are committed to publishing an update to our green finance strategy early this year, setting out how we will mobilise finance for the UK’s energy security, climate and environmental objectives, and maintain our position as a leading green finance hub. We will set out the next steps of the United Kingdom’s emissions trading scheme in response to last year’s consultation. We have committed to adopting a zero-emission vehicle mandate, requiring that a percentage of manufacturers’ new car and van sales be zero-emission each year from 2024.
The Minister is talking about green finance. What about the key recommendation that the UK Government have to do more funding-wise, particularly to offset the Inflation Reduction Act in the United States? We have the electricity generator levy here. The US is incentivising investment in renewables. Will the UK Government address that?
This Government are committed to incentivising investment in renewables across the piece, working with the energy sector and others. In the full response to this report, which I assure Members will come later in the year, we will set out more plans in that regard. The hon. Gentleman is right; that is something we need to do.
New technology will be critical to the transition, and this comes back to the point made by Wera Hobhouse about phasing out fossil fuels. Of course we need to move away from a reliance on fossil fuels as our energy baseload. That is why we are transitioning. That is why Offshore Energies UK has its “Vision 2035” to make the North sea the first net zero basin in the world. We continue to work with the oil and gas sector as it produces the energy we require and will need for many years to come, and as it invests in the new technologies of the future, including carbon capture and storage—a technology in which there are many projects across the country.
Is the Minister not aware that the biggest investment is still in oil and gas exploration and extraction? How does that fit with what he just said?
Exploration and drilling will continue. We will be reliant in some way on oil and gas for years to come. At the same time, we are working to increase our investment in renewables, as well as new technologies, including the developments in hydrogen and e-fuels that I have seen myself. This is a transition. It is not a case of simply turning off one form of energy and turning on another. We need to transition away from fossil fuels. That is why it is really important that we work with the oil and gas companies operating in the North sea to achieve that, as well as increasing our investment in new technologies being developed in this country.
We are a world leader in green and clean tech, as I saw just last week. We are delivering green and clean tech to countries across the world, but we must also work with our existing industry. The net zero research and innovation delivery plan will set out the Government’s current portfolio of research and innovation programmes that are backing Britain’s most innovative businesses to develop the next generation of technologies needed to deliver net zero. We expect to set out the next steps in a range of other critical areas, from energy efficiency to carbon capture and storage, very soon.
Does the Minister agree that part of the overall package needs to be improvements in connectivity for new solar farms to improve the roll-out of solar across the country?
Yes, that will play a major part in where we move to, as we take forward the ambitious agenda that this Government instigated by legislating for net zero and that has been reinforced by this report, which we will reply to in full in due course. Extending and improving connectivity for solar farms is, of course, important.
As I have set out today, our net zero target remains a Government priority. I assure the House that we will carefully consider the recommendations proposed in the review and in this debate, and provide a full Government response later in the year.
I thank the Backbench Business Committee again for granting this debate and all Members who have spoken in it. The debate has demonstrated that, while Members may disagree on some of the contents of the report and its recommendations, as should be the case, the overall narrative of the review—that net zero is an opportunity and not a cost, and that we must seize this opportunity now and not delay—is overwhelmingly welcomed by all parties in the House. I stand ready to brief any political party that is willing to continue to look closely at the recommendations in the report.
Matt Western spoke about the Stern review, and it would be an honour if this report was seen in the same bracket in terms of its ability to influence future policy innovation.
Mention was made of the length of the report and the fact that it was done in three months. I am grateful for the incredible work that was done by the wider net zero review team in Government. Three months is 1% of our journey to net zero. We do not have time to waste. It has been 43 months since I, as the Minister, signed net zero into law. There are 323 months left until we reach net zero by 2050. The net zero clock is ticking. This year alone, that window is vanishing in front of our eyes. To borrow the analogy used by Wera Hobhouse, the bus is already at the stop and is about to depart, and we have to decide now whether we want to get on it or leave it behind. We need to look at this change this year and move as soon as possible.
When John F. Kennedy introduced the moon landing mission in 1962, he said that we do these things
“not because they are easy, but because they are hard”.
It will be hard to get to net zero, but let us all work together across parties to recognise the scale of the challenge. This challenge must reflect the whole of society. As my right hon. Friend Sir Edward Leigh said, we must not leave any community behind. When it comes to net zero, we should not impose this on communities, but work with them and the wealth of views and opinions on how we can deliver on decarbonisation for the future. I hope that this report is not just the beginning but is a blueprint for a new Department on how it needs to move forward as soon as possible.
Question put and agreed to.
That this House
has considered the Independent Review of Net Zero.
On a point of order, Mr Deputy Speaker. Thank you for granting this point of order. I would welcome your advice. I wrote in both December and January to the Secretary of State for Health and Social Care to press him on the status and costs of the Rosalind Franklin laboratory, otherwise known as the mega-lab, in my constituency. Three weeks ago, it was announced that it would be closing, with a loss of 670 highly-skilled jobs, with four weeks’ notice. I wrote to the Under-Secretary of State for Health and Social Care, Maria Caulfield, two weeks ago, and she told me to write to the UK Health Security Agency. I am not sure what I should do now, but surely the responsible Department should reply to me directly.
Mr Speaker has made it clear that he believes any parliamentary written question should have a timely response. I am sure those on the Treasury Bench have heard the request and will pass on the hon. Gentleman’s concerns, and our concerns, that he has not yet had a proper response from the Department.