Review of impact of Act on the environment

Finance Bill – in a Public Bill Committee at 2:15 pm on 18th June 2020.

Alert me about debates like this

“(1) The Chancellor of the Exchequer must conduct an assessment of the impact of this Act on the environment, and lay this before the House of Commons within six months of Royal Assent.

(2) This assessment must consider the impact on:

(a) the United Kingdom’s ability to achieve the 2050 target for net zero carbon emissions,

(b) the United Kingdom’s ability to comply with its third, fourth and fifth carbon budgets,

(c) air quality standards, and

(d) biodiversity.”—

This new clause would require the Chancellor of the Exchequer to review the impact of the Bill on the environment.

Brought up, and read the First time.

Photo of Wes Streeting Wes Streeting Shadow Exchequer Secretary (Treasury)

I beg to move, That the clause be read a Second time.

Photo of Andrew Rosindell Andrew Rosindell Conservative, Romford

With this it will be convenient to discuss the following:

New clause 19—Review of impact of Act on UK meeting UN Sustainable Development Goals—

“The Chancellor of the Exchequer must conduct an assessment of the impact of this Act on the UK meeting the UN Sustainable Development Goals, and lay this before the House of Commons within six months of Royal Assent.”

New clause 20—Review of impact of Act on UK meeting Paris climate change commitments—

“The Chancellor of the Exchequer must conduct an assessment of the impact of this Act on the UK meeting its Paris climate change commitments, and lay this before the House of Commons within six months of Royal Assent

Photo of Wes Streeting Wes Streeting Shadow Exchequer Secretary (Treasury)

It is a pleasure to rise to move new clause 4, which asks that the Government review the impact of this Bill on the environment. As I said earlier in our discussions on the Bill,  this is where the Government’s stated ambitions on tackling climate change are not yet matched by action.

We know what an emergency response to a national emergency looks like. We have seen the sweeping policy decisions and extraordinary levels of public spending that have gone into addressing a public health emergency in the form of the coronavirus and its impact on our economy. The climate emergency, which has been declared as such by Parliament and apparently recognised by the Government, is a global emergency with hugely damaging consequences nationally and for the entire human race, unless we get this right.

To put that emergency into context, the UK and Europe are already experiencing the impact of environmental decline. According to the World Meteorological Organization, the past 22 years have produced 20 of the warmest years on record, with the hottest four occurring consecutively between 2015 and 2018. Prolonged summer heatwaves are crippling infrastructure and causing public health crises. On 25 July 2019, the UK Met Office declared a temperature of 38.7° C to be the hottest day on record. Temperatures such as those are set to become the norm, with London in the summer months predicted to become as hot as Barcelona by 2050. Before that excites too many people with memories of their own summer holidays in Barcelona, we should remember that Barcelona temperatures do not necessarily deliver a Barcelona holiday experience in terms of the pleasantness of the temperatures.

Hotter temperatures have much broader consequences for our way of life. Other climate-related processes will permanently change the face of Britain if we maintain current levels of greenhouse gas emissions. Sea levels around London are predicted to rise between 0.53 and 1.15 metres. That does not sound like a lot, but it threatens the safety of our capital and surrounding regions. Across the UK, the Met Office forecasts that flash flooding caused by the intense rainfall, which has already caused such misery in recent flooding events right across the country, could become five times as frequent by the end of the century if urgent steps are not taken.

Beyond our own shores, the consequences of climate change across the world will be profound. One need only to look at the homes lost in the California wildfires or the impact of global warming on the Arctic region, which has faced unprecedented environmental catastrophe. The melting rate of Greenland’s ice has risen to three Olympic-size swimming pools every second. Wildfires have been visible from space raging through parts of Siberia, Antarctica and Greenland. These caused the release of up to 50 megatonnes of CO2, a quantity larger than that released by all other Arctic circle fires in June from 2010 to 2018 combined.

Ultimately—this is particularly topical, given some of the wider discussions going on in the main Chamber across this week—the people of the global south will be disproportionately affected by the developing climate emergency, with 95% of the cities at extreme climate risk situated in Asia and Africa. In 2018, widespread drought-related food scarcity caused extreme food shortages for almost 840,000 people in South America. Food shortages are a major factor in mass migration and political instability. The World Bank believes that the total number of globally displaced people is set to reach 140 million by 2050, due to rising sea levels, droughts, extreme weather events and subsequent conflicts that will come to pass as a result. We simply cannot afford to bury our heads in the sand.

The Government claim to be among world leaders when it comes to tackling climate change. I am not sure that the boldness of that claim is justified when one looks at the evidence more closely. On our commitment to achieving net zero, policy has fallen short of bringing about the measures required to put the UK on course to meet its original long-term ambition of an 80% reduction, let alone the recently agreed net zero ambition. The most recent report by the IPPR’s environmental justice commission, “Faster, further, fairer”, estimated that the Government needed to invest an additional £33 billion per year just to meet their own 2050 net zero target, but so far less than 10% of that investment has been committed.

We recognise that the UK was the first country to set legally binding carbon budgets, and that is to be welcomed. The July 2019 report by the Committee on Climate Change on how the UK met its carbon budget shows that much of it can be attributed to accounting revisions in the UK’s share of the EU emissions-trading system. Had the global financial crisis not occurred and had economic growth turned out as expected when the carbon budgets were set, the second carbon budget would have been missed by a significant margin. As the IPPR’s commission noted in its interim report:

“At present, the UK is set to miss its legally binding fourth and fifth carbon budgets”.

On air quality, we need to make accessible and sustainable forms of transport more widely available, as we discussed in the debate on clause 83 when we considered the impact on electric vehicles. Much further work needs to be done to expand the take-up of environmentally friendly modes of transportation, including on the personal use of electric vehicles.

The UK is one of the most nature-depleted developed countries in the world: despite its being a signatory to the convention on biological diversity, 41% of species in the UK have decreased in abundance over the past 50 years, and 15% of species are threatened with extinction, according to the 2019 report by the State of Nature partnership. There are clearly big challenges in respect of our own biodiversity, and much further work is needed.

New clause 19, tabled by the hon. Member for Glasgow Central and her colleagues, would require the UK Government, through the Chancellor of the Exchequer, to

“conduct an assessment of the impact of this Act on the UK meeting the UN Sustainable Development Goals” and to report on that within six months of Royal Assent. I will not dwell on the new clause for too long—I look forward to the speeches from our SNP colleagues on the Opposition Benches—but it is worth highlighting a few of the UN sustainable development goals in respect of which Government action falls short of the commitments that we have undertaken.

The first UN sustainable development goal is:

“End poverty in all its forms everywhere”.

The global challenge of eliminating poverty is enormous, and this country, through the Department for International Development—the demise of which we lament and oppose ferociously—has made enormous strides in lifting millions of the world’s poorest people out of poverty yet, as I will discuss later, there is simply no excuse for poverty existing in this country, which is one of the richest in the world.

The second goal is a commitment to “Zero hunger”. It should not take an England footballer to draw the Prime Minister’s attention to holiday hunger among school-age children in this country. Food-poverty charities have been talking about the issue for years. They warned last summer that 3 million children risked going hungry over the summer period. It is a source of national shame and embarrassment that people in our country today are forced to rely on food banks to feed themselves. A report asking the Government to consider the impact of the legislation on achieving the SDGs would be helpful—although sadly not in celebrating progress but in demonstrating where further action is required.

New clause 20 would require a review of the Bill’s impact on the UK meeting its Paris climate change commitments. Again, we have a lot further to go if we want to meet our commitments. Our global voice in leading the world on climate change is important, particularly when some of our closest allies—I am thinking of the United States of America—are putting the world at risk by reneging on commitments made in Paris. Let us hope that a change of Administration brings about a change in policy.

In the light of the covid crisis, there has been a great deal of talk about a green recovery and a just recovery. Indeed, I have heard Ministers talk about the importance of a green recovery. I welcome the rhetoric, but it troubles me that the policies through which the Government envisage bringing about a green recovery are much less clear than the stated commitment. This crisis has exposed the weaknesses of the UK and shown our citizens what happens if we do not build resilience into public policy to prevent serious catastrophes. It is not too late for us to put a stop to destructive climate change on earth, but we will have to treat it as a genuine emergency. Although this House has declared a climate emergency, it is not clear from the Government’s policies that we have a response worthy of the urgency and seriousness of the situation.

Photo of Stephen Flynn Stephen Flynn Shadow SNP Deputy Spokesperson (Treasury - Financial Secretary) 2:30 pm, 18th June 2020

New clause 4 closely aligns with what the SNP seeks to promote in new clauses 19 and 20, and I will address each of them in turn. First, new clause 19 would require a review of the Bill’s impact on the UK meeting the UN sustainable development goals. The obvious thing that must be said to start with is, why would we not want to do that? Why would we not want to know whether our actions are complementing the UN sustainable development goals? We heard from the hon. Member for Ilford North, who helpfully stole some of my lines, about how important the UN sustainable development goals are. That perhaps suggests why the Government may be reluctant to agree to this new clause, although I hold out hope that the Financial Secretary to the Treasury will rise and show that my doubts are misplaced.

The first sustainable development goal is on ending poverty. Quite frankly, it is absurd that poverty exists in these isles. Unfortunately, the UK Government have been in charge for much of my lifetime, and during that period, poverty has been prevalent because of the actions and decisions that they have taken—we cannot escape that fact. Whether in more recent times through universal credit and the two-child cap, or regarding their inability even to provide free school meals to children in England, the consequences of their actions are great. We have heard that Marcus Rashford achieved more in a matter of days than the Government managed to achieve in a number of years, but that is not something the Government should be proud of. It should not take a footballer to change their direction; that is not how politics should work at the best of times.

The last UN sustainable development goal is on partnerships to achieve the goals. We heard from the hon. Member for Ilford North that the Department for International Development has been completely disbanded and is getting moved into the Foreign and Commonwealth Office. That is an absurd move by the Government, and it flies in the face of sustainable development goal 17, on partnerships to achieve the goals. DFID has done so much to foster good relations across the world, which has allowed us to play a leading role in trying to improve the lives of those whose life chances, quite frankly, are worse than anything we can possibly imagine.

The simple question is, why would the Government not wish to support the new clause? The answer is perhaps that their own record shames them from doing so. If they were to support it, they would be following the path of the Scottish Government, who embedded the sustainable development goals in our national performance framework—Scotland’s vision for national wellbeing—following consultation with the public, trade unions, business organisations, local government, voluntary organisations and wider civic society. It can be done, and in a positive and proactive way, with community groups from across the spectrum. Where Scotland leads, the UK Government have the opportunity to follow

That takes me to new clause 20, which seeks a review of the impact of the Bill on the UK meeting its Paris climate change commitments. Again, the obvious question is why would we not want to support this, particularly when COP26 is on the horizon? COP26 provides us an opportunity to shape things in a new direction, just as the current pandemic does. I made great waves earlier in relation to the oil and gas sector and my support for it, so it may seem a little bizarre that I want to talk about sustainable climate change commitments, but the reality is that the climate crisis is upon us, and if we do not grasp the thistle now, where will we be? The climate emergency has not gone away.

That takes me back to something I touched on earlier—the oil and gas sector deal; or the UK Government’s inability, so far, to sign an oil and gas sector deal. In response to written questions that I posed, they do not even seem to have a timeline as to when an oil and gas sector deal will be signed off and delivered. The key thing about such a deal is that not only will it provide immediate support to the oil and gas sector but will ensure that there is a sustainable transition, that investment is there to allow for a sustainable future, and that jobs are protected in that regard.

Again, hopefully it will come as no surprise to Members that the Scottish Government have been on the front foot in this regard. Just last week, they invested £62 million in a number of projects in the north-east of Scotland, including an energy transition zone, the Acorn project in Peterhead, a hydrogen hub in Aberdeen itself and a global underwater hub. That is where we want to go. We recognise that we need to invest in order to create that sustainable transition. The UK Government should work to do that too, particularly given that, as I said, they have reaped the revenue benefits of North sea oil and gas for decades. It is now time to give back, and to give back in spades, to make sure that that sustainable transition can happen.

The reality is that we cannot afford to wait. We cannot afford to wait in the short term, because jobs rely on this, and we cannot afford to wait in the long term, because our climate cannot wait. We need to protect ourselves from climate change, but we need to protect many other countries and individuals across the world, so I say to the Government: why would you not support this new clause?

Photo of Kemi Badenoch Kemi Badenoch The Exchequer Secretary 2:45 pm, 18th June 2020

New clauses 4, 19 and 20 would require the Chancellor to review the environmental impact of the Finance Bill and its impact on the UK’s meeting the UN sustainable development goals and UN Paris climate change commitments. The new clauses are not necessary and should not stand part of the Bill. Tackling climate change is a top priority for the Government, as demonstrated by the UK becoming the first major economy to pass legislation committing to reach net-zero emissions by 2050. The Bill builds on the UK’s existing strong environmental record and commitments by delivering new policies to reduce carbon emissions and enhance the environment, and it provides significant incentives to support the continued decarbonisation of transport.

Clause 83 establishes tax support for zero-emissions vehicles, exempting them from the vehicle excise duty expensive car supplement. From April 2020, vehicle excise duty and company car tax will also be based on a new, improved laboratory test known as the worldwide harmonised light vehicle test procedure, or WLTP, which aims to help reduce the 40% gap between the previous lab tests and real-world carbon dioxide emissions.

The Bill will ensure that HMRC can make preparations for the introduction of the plastic packaging tax, which will incentivise businesses to use 30% recycled plastic instead of new material in plastic packaging from April 2022, stimulating increased recycling. The Government are also reopening and extending the climate change agreement scheme to support energy-intensive businesses to operate in a more environmentally friendly way.

Clause 93, which establishes a UK emissions trading system, and clause 92, which updates legislation relating to the carbon emissions tax, ensure that polluters will continue to pay a price for their emissions once our membership of the EU and the emissions trading system ends following the transition period.

New clause 4 would require an impact assessment of the Bill on the environment to be laid before Parliament within six months of Royal Assent. Where tax policies have a particular environmental impact, the Government will take that into account during the tax policy making process and, where appropriate, publish a summary of the impact in the relevant tax information and impact note, or TIIN, as it is otherwise known. The Bill’s clauses demonstrate our progress towards tackling climate change as well as towards international deals and agreements, without the need for an additional environmental impact review.

The hon. Member for Ilford North made several comments about our spending more money on coronavirus than on climate change and about our not being on track to meet our net zero targets. All I can say to him is that many of the actions that we need to take to deliver our climate targets also help the UK’s economy to recover from the impacts of covid-19. We do not look at those issues separately. He must remember that between 1990 and 2017 the UK reduced its emissions by 42% while growing the economy by more than two thirds. It is simply wrong to say that we are not doing enough on climate change.

Building on our ambitious announcements in the Budget, such as the £800 million fund for carbon capture and storage, we are developing ideas for how we can go further using clean, sustainable and resilient growth as a guiding principle for our strategy to recover from the impact of the virus.

New clauses 19 and 20 would require a review of the impact of the Bill on the UK’s meeting the UN sustainable development goals and Paris climate change agreements. The UK published a voluntary national review setting out in detail our progress towards the sustainable development goals and identifying areas of further work in June 2019. We remain committed to supporting implementation of the sustainable development goals, including to help us build back better from the covid-19 crisis. By working to achieve the sustainable development goals, we will also be better placed to withstand future crises.

Under the Paris agreement, the Government must maintain and report on their emissions reduction commitments in the form of a nationally determined contribution. The UK’s legally binding commitment to reduce emissions to net zero by 2050 is among the most stringent in the world, and the system of governance implementing the commitment under the Climate Change Act 2008 is world leading.

The Committee on Climate Change, established under the CCA 2008, provides independent evidence-based advice to the UK Government on how to achieve the targets. It reports to Parliament annually on progress made in reducing greenhouse gas emissions and on preparing for and adapting to the impacts of climate change. The Government are committed to tackling climate change. The measures in the Bill already demonstrate that, as well as highlighting our progress towards achieving net zero emissions by 2050, which is one of the most ambitious climate change commitments in the world. In this context, a separate review of the environmental impact of the Bill and how it meets international agreement is unnecessary. I therefore ask the Committee to reject the amendments.

Photo of Wes Streeting Wes Streeting Shadow Exchequer Secretary (Treasury)

I am concerned by the complacency of the speech that we have just heard from the Exchequer Secretary. I do not think it is sufficient to say that the UK is doing enough to tackle climate change and to meet our net zero ambition when all of the evidence suggests that that is not the case. That reinforces even further the case to run a proper impact assessment on the Bill.

Question put, That the clause be read a Second time.

Division number 9 Finance Bill — Review of impact of Act on the environment

Aye: 6 MPs

No: 9 MPs

Ayes: A-Z by last name

Nos: A-Z by last name

The Committee divided: Ayes 6, Noes 9.

Question accordingly negatived.