Net-zero Test for New Policies
Question
2.57pm
Asked by
To ask Her Majesty’s Government what assessment they have made of
the letter from the Confederation of British Industry, Trades
Union Congress and others, to the Prime Minister on 3 December
2021; and in particular the recommendation to establish “a new
overarching Net Zero Test for new policies”.
The Parliamentary Under-Secretary of State, Department for
Business, Energy and Industrial Strategy
My Lords, the Government are ensuring that decision-making across
government is aligned to deliver net zero. This includes
establishing two Cabinet committees to co-ordinate action across
government and strengthening official-level governance. The Net
Zero Strategy includes a commitment to:
“Ensure that decisions taken on government spending are informed
by their impact on meeting net zero.”
The Government have also committed to publishing
“an annual progress update against a set of key indicators for
achieving our climate goals.”
My Lords, I declare my interests as set out in the register. I am
grateful to the Minister for that Answer, but it is very similar
to the Answer he gave me some months ago when I asked about the
recommendation that the Climate Change Committee made to
Parliament that there should be a net-zero test on all government
policies. Last month that recommendation was endorsed in a letter
to the Prime Minister by the CBI, the TUC, UK corporate leaders’
groups and others. They see the benefits of a comprehensive
approach not only in achieving our net-zero targets but in
providing a coherent and transparent framework from government
for the efforts of business and industry to fuel the green growth
we so badly need. Will the Government now accept the advice they
have been given so broadly?
I thank the noble Baroness, but the reason my Answer was very
similar to a few months ago was that the Question was very
similar to the one she asked me a few months ago. We have taken
new approaches to embed net zero in spending decisions, including
requiring departments to include the greenhouse gas emissions of
their spending review bids and their impact on meeting carbon
budgets and net zero. There is a huge amount of co-ordination
taking place across government and between this Government and
the devolved Administrations in helping us to meet our goals.
Does the Minister agree with the same letter where it says that
we must
“ensure the competitiveness of UK businesses is not disadvantaged
by imports that do not have the same carbon costs”?
If so, why is it that the only thing the Treasury’s Net Zero
Review has to say in the way of action on carbon leakage is
that
“a case for conducting a formal call for evidence may
emerge.”
Is that not a woefully complacent approach which puts at risk
British industry and British jobs?
I agree with the noble Lord that the competitiveness of UK
industry is extremely important. The question he is asking is
effectively about the carbon border adjustment mechanism which
the EU and others are considering. I am sure that the noble Lord
would be the first to accept that this is a complicated and
difficult policy area. It cuts across various WTO and
international trade commitments. I can see in principle the case
for what he is saying, but it is a complicated area.
Does the Minister agree that new nuclear has an important part to
play in achieving our net-zero targets? Will he indicate what the
UK Government are doing in relation to that in England, and will
he arrange to meet with Scottish Ministers to try to persuade
them of the importance of new nuclear?
I agree completely with the noble Lord for a change. He is quite
right to make the case for new nuclear. Indeed, the other place
passed the nuclear Bill just yesterday, so it will be coming to
this House shortly; I look forward to debating it alongside the
noble Lord. I already meet with Scottish Ministers, although I
fear that my efforts to persuade them of anything are very much
in vain.
My Lords, I take the Minister back to his own reference to the
key commitment that the Government made under the heading of
“Embedding Net Zero in Government” in the Net Zero Strategy; the
commitment that he referred to was to publish an update of
progress against a “set of … indicators” for achieving our
climate change goals on an annual basis. What progress is being
made in taking forward this commitment, and what scrutiny will
there be of the agreed indicators?
We are indeed committed to publishing this, exactly as I said,
and we are making a considerable commitment towards meeting our
targets. We have the most ambitious programme of emissions
reductions in the whole of the G7. Let me give an example of how
difficult these areas are. It is easy to say that, yes, we must
embed net zero in all our policies, but the other place is
currently having a debate brought forward by the noble Lord’s
party on removing VAT from domestic fuel. Everybody can see why
that might be important at the moment but, arguably, such a test
would fail the commitment on net zero, since most fuel is still
produced by carbon-intensive methods. These are difficult policy
areas; we have to balance the overarching aim of net zero with
other commitments on fuel poverty, et cetera.
Anyone watching the Government can see that there is no coherence
and that they do not understand net zero. That is why it is so
important to take up this idea. Any Government who understood net
zero would not have made a deal with the Australian Government
for lamb and similar things. That is not a net-zero deal. At the
same time, they are condemning British farming to sometimes going
out of business. Does the Minister agree that the Government have
to step up a bit and be a little more ambitious on net zero?
I understand the point that the noble Baroness is making—I know
that she is very passionate on this subject, and we have debated
it many times—but we have the most ambitious net-zero goals of
all of the G7. The noble Baroness puts her head in her hands, but
that is true. Of course, you could always argue that we should go
further or faster, but that would be expensive and would affect
our competitiveness. At the end of the day, the UK is responsible
for 1% of worldwide emissions. We need to make sure that we go
forward in a co-ordinated manner with other countries across the
world and approach this problem together.
My Lords, before Christmas, I fed my noble friend the Minister
what he took as a helpful line. I will try to do it again: where
are we with tidal power?
The answer I gave my noble friend then was that tidal power is
included in the latest contracts for difference round; I think
the figure is £20 million that we propose to expend on it. My
noble friend makes a good point that there are some very feasible
tidal power projects, but we need to be realistic—tidal power
will not contribute more than a small percentage of our power
needs.
My Lords, does the Minister agree that the current levels of
spending on climate-positive measures are far below what the
Climate Change Committee has recommended to achieve net zero? If
so, what plans do the Government have to increase expenditure so
that we have a greater chance of achieving their net-zero
target?
The noble Baroness makes an important point but it is not just
government spending that contributes to net zero. Regulatory
policies also have an impact. We are spending considerable sums;
certainly, within my department we could always do with spending
more, but the difficult job that the Treasury and Chancellor have
is balancing tax income with net expenditure. Many government
departments would, I am sure, prefer to be spending more money at
the moment.
My Lords, just before Christmas, the Government launched a
consultation with oil and gas companies on the design of the UK
policy for the sector. Can the Minister say, first, whether the
consultation will be carried out in accordance with the consensus
between scientists and the International Energy Agency that new
oil and gas production is incompatible with net zero by 2050?
Secondly, how are the Government proposing to give voice to other
stakeholders?
The noble Baroness and I have also debated this topic at length
before. The point she needs to recognise is that, during the
transition, there is still a requirement for oil and gas products
in the United Kingdom. Liberal Democrats might not like that but
it is a fact—unless you are going to stop people driving their
cars and turn their gas boilers off tomorrow, and I do not see
that being produced on a focus leaflet any time soon. We need to
transition to net zero. During a transition period, therefore,
the choice is: do we use oil and gas products we generate,
creating jobs and paying taxes from UK assets, or do we get them
from Russia or Saudi Arabia? I know what I would prefer.
My Lords, of the gaps identified by this letter still needing to
be filled in the urgency of the climate challenge in the Glasgow
climate pact, perhaps the one identified on adaptation and
resilience has received least attention. Little progress is being
made. What increases in adaptation policy ambition have the
Government determined are needed from the reports of the
adaptation sub-committee of the Climate Change Committee?
I have not seen the particular report that the noble Lord refers
to but I shall certainly have a look at it, take it back to the
department and write to him on that subject.
My Lords, in respect of developing strategies for nature-based
solutions, what advice are the Government developing to help
farmers meet their responsibilities?
The noble Lord makes a good point. Emissions from agriculture and
farm animals, et cetera, are a considerable component. These
matters are of course addressed in the Environment Act, and there
is no question that we are taking a whole-economy approach. Every
sector needs to do its bit; food and farming production certainly
need also to do their bit towards net zero.
