Kwasi Kwarteng (Spelthorne) (Con) I beg to move, That this House
has considered Government policy on reaching Net Zero by 2050. It
is always good to see you in the Chair, Sir Christopher. This is
the second time in about seven years that I have been able to
introduce a Back-Bench debate, so I am very grateful for the
opportunity. I am pleased to be able to say that the net zero
agenda—the energy transition—enjoys wider support across the House
than...Request free trial
(Spelthorne) (Con)
I beg to move,
That this House has considered Government policy on reaching Net
Zero by 2050.
It is always good to see you in the Chair, Sir Christopher. This
is the second time in about seven years that I have been able to
introduce a Back-Bench debate, so I am very grateful for the
opportunity.
I am pleased to be able to say that the net zero agenda—the
energy transition—enjoys wider support across the House than
practically any other area of policy. Yes, there are sceptics on
both sides of the House, but it is extraordinary how widely
shared the ambitions for net zero and decarbonisation are. I am
grateful to organisations in my constituency and to my
constituents. I thank Talking Tree, whose climate emergency
centre has promoted decarbonisation in my constituency, and my
constituent Hettie Quirke, who has raised these issues with me in
constituency surgeries and provided me with my inspiration, or
certainly my motivation, for requesting the debate.
This is a matter of great interest to me personally. I was
fortunate to be appointed Energy Minister, the post that my right
hon. Friend the Minister now ably fills, in July 2019, only a few
weeks after we as a Government had passed the net zero Bill and
enshrined the 2050 net zero target in law. That target was not
simply plucked out of thin air. It is based on a scientific
assessment of what we need to do as a global community to keep
average temperature increases on this planet below 1.5° compared
with 1990.
(Brighton, Pavilion)
(Green)
Does the right hon. Gentleman recognise that at the time when the
net zero by 2050 target was agreed, so was the principle of
common but differentiated responsibilities? That means that
countries such as the UK that can go further and faster must do
that, so we should be looking at something much closer to real
zero as soon as possible after 2030, not net zero by 2050.
As the hon. Lady well knows, she and I have very different views
on this. I think that the Government have to carry the population
with them, and it was interesting to hear what the unions were
saying about oil and gas earlier this week. I would like to be
able to press a button and say that we can get to absolute zero
by 2030, but I do not think that is possible given the
technological constraints and the financial and fiscal pressures.
I do not think it is attainable, which is why I am happy to push
the target of net zero by 2050.
I want to talk about our ability to reach that target. The hon.
Lady is right that we could and should always try to do more, but
we are constrained not only by technology but by fiscal
necessities and, I might add, by what is going on in the rest of
the world. The UK represents only 1% of global GDP, but we are an
example and a leader, and we have to be able persuade partners
across the G7 and the G20 and particularly in the developing
world. As she will appreciate, that is not always easy.
(Strangford) (DUP)
First, I commend the right hon. Gentleman for raising an
important subject that we will all have to acknowledge and be
involved with. It is clear that to achieve this ambitious goal,
we will need more dedicated funding—I hate to say that, but it is
the truth. The establishment of the net zero innovation portfolio
is a good indication of the Government’s priority, but does he
agree that enhanced funding must follow, and must be distributed
to all regions, including to Northern Ireland, Scotland and Wales
through Barnett consequentials?
I commend the hon. Gentleman for making that point, because he
knows better than anybody how important Northern Ireland is to
the transition. There are some great hydrogen businesses there,
in particular. As Secretary of State for Business, Energy and
Industrial Strategy I was privileged to visit Queen’s University
Belfast, a world-leading academic institution in its focus on new
technologies—not only energy technologies but cyber-security
technologies and others. I am pleased that he has contributed so
ably to this debate, as he always does.
I want to set out a few areas in which we have had successes, and
then point out others where we have perhaps found the terrain
heavier going and where there have been greater challenges. As I
look at British energy policy, I see that some things are going
very well and others could be improved.
First, as was mentioned in the previous debate, the biggest
success in the net-zero space since I have been in the House has
been power generation, including electricity and the grid. Even
as late as 2012, 40% of electricity, such as the lights and
everything we see around us, was derived essentially from burning
coal, using a 19th century technology. Today, that figure is
1.5%. Across 11 years, we have essentially taken coal off the
generating grid, which is a huge achievement. Many of us in this
room will remember how important coal has been to the political
and economic debate in this country. As we were growing up, there
was never a day when we did not read about coal strikes, or
industry-related issues around coal.
(Tiverton and Honiton)
(LD)
Will the right hon. Gentleman give way?
I warn other Members that I will have to make progress, but I am
happy to take this intervention.
I am very grateful to the right hon. Member. On the point about
comparing today with 2012, the UK’s draughty houses make up 14%
of the UK’s carbon emissions. In 2012, we were insulating 2.3
million houses every year, whereas now we are insulating fewer
than 100,000. Does the right hon. Member accept that the
Government would have saved taxpayers millions of pounds on the
energy price guarantee if they had only kept insulating homes at
the rate they were in 2015?
Of course, that would have been at great cost, and it would have
been brought forward. I do not know what the effect of Putin’s
invasion of Ukraine or the sudden spike in gas prices at the end
of 2021 would have been in that instance. The hon. Gentleman is
right to notice that. If he permits me—I know Members are always
enthusiastic to jump in—the insulation of homes and the
decarbonisation of domestic heating are issues I will address
squarely later in my speech.
Decarbonising power generation has been a relative success.
Offshore wind installation has been hugely successful. The target
of 50 GW by 2030 is hugely ambitious. The fact that we have
already installed 13 GW or thereabouts is hugely significant. No
other country, apart from China, has our capacity in offshore
wind. As the hon. Member for Tiverton and Honiton () observed, there are areas
where we could do a lot better.
It has been very difficult to land a scheme than can effectively
decarbonise domestic heating. Some 90% of the roughly 30 million
homes in the United Kingdom rely on burning fossil fuels for
heating: broadly 85% gas, and 5% oil. For that reason, it was
always obvious to me that one of the quickest and easiest ways we
can decarbonise domestic heating is through research and driving
hydrogen. Hydrogen can be a substitute for natural gas. We
obviously need to do that in a safe way—[Interruption.] I will
give way one more time, but I need to finish the speech.
(Woking) (Con)
I am grateful to my right hon. Friend for giving way. Will he
also touch on nuclear? That is an area where we have not made as
much progress over recent years as we could or should have done.
It is effectively carbon efficient, as well.
My hon. Friend will remember my three years as a Minister in the
Department for Business, Energy and Industrial Strategy. I was
always a passionate advocate for nuclear, because one of the
first things I was made aware of was that we need a balanced
power generation system with lots of different technologies. In
energy, there is no silver bullet, as I am sure my hon. Friend
appreciates. We have to rely on a range of technologies in order
to provide resilience to the system. Three metrics of any energy
system are the “SAS” of security, affordability and
sustainability. Those are the three watchwords I recall when I
consider this important subject.
As far as I am concerned, and certainly as far as the Government
are concerned, unless they have changed their policy in the past
few months—this was the case when I was in government—nuclear has
to be part of the answer. There is a debate to be had as to what
sort of nuclear we need, be it small modular reactors or the
large-scale approach. Our view until recently has been that we
need a mix of both. I believe that is still the Government’s
position, but the Minister can answer on that.
I wish to touch broadly on a couple of areas where, supportive as
I am of the Government, they need to be wary and deliberate in
their approach. Taxes have been increased, with the windfall
taxes and the electricity generator levy, or whatever one wants
to call them. I fully understand the political need for them, but
we should not be discouraging investment in key technologies. The
Government should examine the capital allowance regime and ensure
there is more incentive to invest in decarbonisation
technologies, not less.
One issue that has bedevilled our power generation system is the
grid. I cannot see any colleagues from Norfolk and the east
coast, but one issue that they have relates to the connectors,
the landing stations and the substations for electricity
generated by offshore wind in the North sea. We need to see how
we can more intelligently and efficiently create an offshore
network that can land this electricity in one point. I would like
more Government engagement on that; it has been considerable but
the point is important.
I realise that I am running out of time, because others wish to
take part in the debate, but I wish to mention buildings, which
were touched on by the hon. Member for Tiverton and Honiton. This
has been the most difficult nut to crack in the whole
decarbonisation space, as we see when we look at various other
sectors. I have mentioned the power generation sector, where we
have decreased considerably our dependence on fossil fuels, gas
burning and coal burning. In the transport sector, electric
vehicles have really taken off in the UK. We need more take-up of
them, but the transport sector is an area where there has been
success. I saw my first EV in Israel 10 years ago, in 2013, at a
time when we had zero EVs. As late as 2016 we had very few, and
there has now been quite an impressive take-up. If we go down
that route, we can imagine a world where we have decarbonised
transport to a considerable extent. However, this area of
domestic heating and how we decarbonise our housing stock has
proved the most challenging.
There are two issues with our domestic housing stock. First, the
buildings themselves are not very energy-efficient; we have the
oldest housing stock in Europe. Secondly, as I have said, 90% of
those houses are rely on the burning of fossil fuels. So there
are two criteria on which we are not doing very well. First, as
the hon. Member for Tiverton and Honiton said, we have to make
sure that we can retrofit and improve the housing stock.
Secondly, we have to be smart about how we heat those homes once
they have been improved and what the power sources will be. As I
have said, there is a big challenge there.
Given the huge reliance on natural gas in our system
domestically, hydrogen has to be part of the answer, as we see
when we look at where the Germans are. They have a huge
dependence on natural gas for industrial purposes, and Putin’s
invasion of Ukraine set the cat among the pigeons. German
Ministers, including Energy Ministers, and other politicians are
focused on how to substitute other forms of power for the gas
they imported from Russia. They have ruled out nuclear power and
focused on liquefied natural gas and, particularly, on hydrogen,
which is a source of energy that the Government could look at
again in order to accelerate its deployment.
Briefly, I want to mention what the United States is doing. Since
I started at BEIS, one of the biggest changes has been the
introduction of the US Inflation Reduction Act. Industrial
players in the sector say there is a huge pull to the United
States because of the subsidies and support it is giving to green
technologies, in a naked and unembarrassed way. As energy
Minister, Secretary of State for BEIS and, briefly, Chancellor, I
was very keen that we had something to say on this, because it is
not just a huge challenge to us but to the European industrial
base. Having been in his position, I know that the Minister will
not be able to talk about Treasury affairs, but I would be
interested to hear the Department’s thinking on the US IRA
development.
This is an introductory debate about a subject I am very
passionate about, as are many Members here, but finally I want to
thank the House and the many varied organisations that have sent
me great notes and briefings, which show me that this is one of
the most important issues any Government will face in the next 20
or 30 years. I have brought this debate, other MPs will secure
further debates before the end of this Parliament, and I am
convinced we will revisit the subject in the next Parliament.
Many issues that we debate are of largely ephemeral interest, but
this matter will affect our children and generations to come, so
I am honoured to be able to introduce this short debate today. It
is not the first, but one of the very many debates we will have,
and should have, about this crucial issue.
(in the Chair)
Before I call , I remind hon. Members that
we have the wind-up speeches at 5.10 pm at the latest, so each
contribution should be a maximum of five minutes.
4.47pm
(Brent North) (Lab)
Sir Christopher, under your guidance, I will try to speak
swiftly. I congratulate the right hon. Member for Spelthorne
() on introducing the debate;
I welcome much that he said. We are debating the Government
policy on reaching net zero by 2050, but perhaps it would be more
appropriate to think about the Government’s barriers to reaching
net zero by 2050, because the truth is that we are not on a path
to net zero.
Not all is bad. Under the Climate Change Act 2008 and the
Environment Act 2021, the UK created a strong legal framework for
achieving net zero emissions by 2050. We, on both sides of the
House, should be proud of that. However, legal promises alone
cannot stand. They must be accompanied by consequential and
transformational political action. The question is not what we
have committed ourselves to, but how we are implementing the
steps that are required to get there.
The Government know that. The 2021 net zero strategy clearly
outlines the fact that achieving net zero
“will require the transformation of every sector of the global
economy.”
In the 2023 environmental principles policy statement, the
Government commit themselves to
“a system that places environmental considerations at the heart
of policymaking across government.”
Again, I welcome the language, but the net zero growth plan does
not follow that vision. Instead, it sets out a vision for a
market led and technology driven net zero transition. A
technology centred, market led approach is Government-speak for a
voluntarist business-as-usual approach. This is too important to
get wrong.
Rooting our net zero approach in technological developments
blinkers us to the essential unity of the twin crises of climate
and the environment and ignores the very nature-based solutions
that the UK Government have rightly championed internationally.
It shows a fundamental incoherence in the Government’s
philosophical approach. We will neither achieve our environmental
goals nor reap the benefits of the economic opportunities of the
21st century if we leave it to the market to lead. The Climate
Change Committee has pointed out that while currently more than
31,000 people across the UK are employed in offshore wind alone,
that is set to rise to 97,000 by 2030. This is a huge
opportunity.
I welcome some of the investment that the Government have
committed to achieving net zero, with £30 billion of public
investment for a green industrial revolution, £36 billion of
funding for improvements in energy efficiency, £20 billion for
carbon capture and storage and a billion for low-carbon
technologies. The Government appear to remain perfectly convinced
that their approach will catalyse around—they say—£100 billion of
private investment in developing those new industries and new
carbon technologies, such as offshore wind and carbon capture and
storage. That is a combined total of £187 billion.
By contrast, the Climate Change Committee has made it clear that
we need between £300 billion and £430 billion of investment to
achieve our goals. More importantly, it is clear that a strategic
programme is required to reform the regulatory frameworks and to
remove those barriers to the planning and construction of
renewable energy infrastructure. It is not just about money; it
is about the whole regulatory framework. The 2022 Climate Change
Committee report points out that that has not been done; there is
no adequate policy framework for catalysing the large-scale
transformations necessary to achieve the established net zero
targets by 2050. It is concerned that there does not seem to be
any urgency on the part of the Government to do so.
I welcome the independent review conducted by the right hon.
Member for Kingswood (). He recognised the barriers
that remain in place. His review said that the Government should
take immediate action, and it recommended 25 short-term policies
that the Government should achieve by 2025. The review called
those policies “25 by 2025”. The idea was both to remove barriers
that prevented business and industries from supporting the net
zero ambition and to provide an immediate signal of intent to the
private sector that the Government were serious about delivering
their net zero target.
We were disappointed on the Environmental Audit Committee when
the Secretary of State for Energy Security and Net Zero, the
right hon. Member for Welwyn Hatfield (), responded to questions in
our most recent hearing. When asked about wood pellet biomass at
the Drax power station—a technology that emits 18% more carbon
than coal, yet still remains a critical part of the Government’s
net zero agenda—the Secretary of State said that he hoped he
might be able to say more in a future session. Well, we all hope
that, because we have been eagerly awaiting the Government’s
biomass strategy, which was due to be published last year and has
still not made it into the public domain. His response on
hydrogen, supposedly a key part in the Government’s plan, was
equally disappointing. The Secretary of State—
(in the Chair)
Order. We have limited time and the hon. Gentleman has now gone
over his time limit. I call .
4.53pm
(Ynys Môn) (Con)
It is an absolute pleasure to serve under your chairmanship, Sir
Christopher, and I thank my right hon. Friend the Member for
Spelthorne () for calling this important
debate. A McKinsey report has stated that the global net zero
transition could be worth a trillion pounds to the UK and support
just under half a million UK jobs by 2030. It has been described
as the economic opportunity of the 21st century. It is recognised
that the fastest and most reliable way for the UK to achieve net
zero and energy security is to pursue a programme of new nuclear
build.
I entered the House in 2019 to represent the constituents of Ynys
Môn. They have lived with nuclear power at Wylfa since the 1960s.
I stood on a mandate to do everything I could to bring new
nuclear to Wylfa. The majority of my constituents support
nuclear. They know it is clean, they know it is safe and they
know it brings jobs. But Wylfa is being decommissioned, as other
nuclear plants have been across the UK. Despite 30 years of
promises and the good will of local people, it has yet to be
replaced.
Anglesey is known as “energy island”. We have wind, wave, solar,
tidal and hydrogen—and, hopefully, new nuclear if I have anything
to do with it. Geographically, Wylfa is probably the best new
nuclear site in the UK, if not Europe. My constituents in the
surrounding area, including Cemlyn, Tregele, Cemaes and Amlwch,
and right across Anglesey, desperately need the employment it
would offer and give the site that all-important social
licence.
I have seen many steps on the way to new nuclear at Wylfa: the
British energy security strategy, which specifically mentions
Wylfa; the launch of the £120 million future nuclear enabling
fund at Wylfa by my right hon. Friend the Member for Spelthorne
(), who is sitting beside me;
and the Nuclear Energy (Financing) Bill. However, we have yet to
see the spades in the ground that the people of Ynys Môn and the
UK need.
Building nuclear plants takes years. Just going through
development consent takes years. In the building of Hinkley C and
Sizewell C, we are developing a new generation of nuclear skills
that we will lose if there is nothing for them to move on to. We
need a plan for how and when we will roll out the Government’s
goal of a one gigawatt nuclear reactor going to financial
investment decision in this Parliament and two going to financial
investment decisions in the next Parliament. We currently produce
3.9 GW of energy from nuclear. That is forecast to decline to 3.2
GW by 2030, with all but one of our nuclear power stations going
off line in the next decade.
As chair of the all-party parliamentary group on small nuclear
reactors, I welcome the SMR competition announced by the
Chancellor in the spring Budget. I am looking forward to the
launch of Great British Nuclear and it is brilliant news that for
the first time we have a nuclear Minister. Other countries are
taking bold and ambitious steps on investment and action in the
move to net zero. Without a similar response, we risk losing out
on new opportunities and potential economic gains. We have shown
that as a Government we can move at speed when we face a crisis.
In the Minister’s summing up, I want to hear—given that we are
just 27 years away from 2050, we are in a crisis—the Government’s
plan to grasp the opportunity and to build new nuclear at Wylfa.
Diolch yn fawr.
4.57pm
(Brighton, Pavilion)
(Green)
It is a pleasure to serve under your chairship, Sir Christopher.
I welcome this debate on Government policy on reaching net zero
by 2050 and I congratulate the right hon. Member for Spelthorne
() on securing it.
I would like to start by setting out the context for the debate.
Ministers are very fond of pointing out that the UK’s emissions
have almost halved since 1990. However, when we are, in the words
of the UN Secretary General,
“on a highway to climate hell with our foot on the
accelerator,”
relying on past progress is not enough. Secondly, that figure
ignores emissions from imports, focusing only on emissions from
the things we produce domestically. Frankly, if we outsource most
of our manufacturing, it is not surprising that our emissions go
down. We have just outsourced them to countries like China. But
we cannot outsource that responsibility and we must not. If we
take a consumption-based approach, the UK has only actually
reduced its emissions by 23% since 1990. That is equivalent to an
average cumulative reduction of just 0.7% a year. That is hardly
transformational.
In the short time I have, I want to focus on what is at the heart
of the climate crisis, which is our seemingly insatiable
addiction to fossil fuels. Frankly, it does not matter how many
good things we do or how many renewables we bring on line if, at
the same time, we continue to pump yet more filthy oil and gas,
and continue to license more oil and gas fields, as the
Government plan to do. Let me just make three quick points.
First, new oil and gas will not bring down bills. The right hon.
Member for Spelthorne himself noted in February last year:
“The situation we are facing is a price issue, not a security of
supply issue…Additional UK production won’t materially affect the
wholesale market price.”
Well, I could not agree with him more. He gets to the nub of the
issue: we have an energy affordability crisis, not an energy
supply crisis. Fossil fuels are not only heating our shared and
only home, but are so expensive that they have plunged millions
of UK households into fuel poverty, all while oil and gas
companies have raked in obscene, record-breaking profits. Our
dependence on oil and gas is the very reason for high energy
bills. It is somewhat perverse, therefore, that anyone would
suggest that they can also be the solution.
We know by now that the way to bring down energy bills is to
unleash truly abundant renewables, alongside storage and
batteries, and to properly insulate homes to keep them warm over
the winter months. It really is not that complicated. It should
shock us all that energy bills are now a staggering £9.8 billion
higher than they would have been had Government Ministers not
“cut the green crap” a decade ago.
Secondly, new licences will not improve energy security, contrary
to Ministers’ claims, because it is not our oil and gas—it is
owned by private companies, who sell it on global markets to the
highest bidder. In fact, the UK’s gas exports increased following
Russia’s illegal invasion of Ukraine in response to high European
demand. Even if it did belong to us, the majority of fossil fuel
projects in the pipeline are for oil, not gas, and we already
export around 80% of the oil that we extract because it is not
the type used in UK refineries.
That is before we even talk about the fact that despite
disingenuous protestations, no one is talking about turning off
the taps tomorrow. We are saying that there should be no new
licences for projects, which would not come online for many years
to come. I refer the right hon. Member for Spelthorne to , the chair of the CCC, who has
said how much he supports the policy position of no new licensing
of oil and gas. He is a prominent member of the right hon.
Member’s own party.
Finally, let us put to bed the idea that, somehow, producing oil
and gas domestically is better for our planet. It is commonly
asserted that the oil and gas extracted from the North sea than
has lower emissions than imports. Although that is certainly the
case for liquefied natural gas, imports of which have undoubtedly
increased in the last year, it is not the case for Norwegian oil
and gas, where the majority of our imports typically come from.
In fact, the UK’s production is two-and-a-half times more
polluting than Norway’s because the UK uses practices such as
flaring and venting, which have been banned in Norway since the
1970s.
Furthermore, the Government maintain that new extraction is
entirely in line with delivering net zero, but that is only
because they have washed their hands of emissions produced when
the oil and gas are burned—otherwise known as scope 3 emissions.
Surely those have to be taken into account if we are truly to
understand the impact of fossil fuels produced in the UK. The
Climate Change Committee has been clear that extra oil and gas
extracted in the UK will
“support a larger…market overall.”
When the International Energy Agency and so many other experts
say loudly and clearly that it is simply not compatible with our
climate change objectives to be pursuing new oil and gas, we
simply should not do it.
5.02pm
(North Devon) (Con)
It is a privilege to serve with you in the Chair, Sir
Christopher. Many thanks to my right hon. Friend the Member for
Spelthorne ()—it is a pleasure to be back
discussing floating offshore wind with him. As chair of the
all-party parliamentary group for the Celtic sea, both he and the
Minister have spoken to me at length on this issue.
I fully support the UK Government’s commitment to ensuring that
floating offshore wind makes up 5 GW of energy by 2030, but
everyone will recall that the Celtic wind blows the other way to
the wind in the North sea, which is why it is vital that this
project goes ahead. The recent administrative strike price in the
allocation round for contracts for difference did not,
unfortunately, take into account the unprecedented global
economic pressures that have led to costs rising by 20%.
An already challenging picture in the Celtic sea has been
exacerbated by delays in leasing rounds for projects by the Crown
Estate, as well as the lengthy amount of time that key strategic
ports have had to wait for the Government to announce the much
welcomed floating offshore wind manufacturing investment scheme,
which is essential to the funding to deliver port infrastructure.
I fear that, at this pace, we will miss the opportunities of flow
in the Celtic sea by 2030, and potentially deter much needed
international investment into the Celtic sea.
I agree with my right hon. Friend on buildings, but I have a
particular concern as a very rural MP. Some decisions around
rurality and how we change our housing need to be looked at
differently. That is why I supported the ten-minute rule Bill of
my right hon. Friend the Member for Camborne and Redruth () on hydrotreated vegetable
oil as an alternative for oil fired, which is used in 25% of
off-grid properties.
I would like to come to biomass. I declare an interest as chair
of the all-party parliamentary group for the wood panel industry,
which is not the stuff on the walls but basically kitchens and
the like. I thank the Minister for his engagement on this matter.
In my mind, burning wood for energy is a short-sighted and
environmentally damaging endeavour. Wood is too valuable a
resource to simply burn, given it is the best way to sequester
carbon and avoids the use of environmentally damaging materials
in the economy. Wood-dependent industries are struggling to get
the wood supply they need. Addressing that should be a focus of
policymakers. We need to change direction.
We cannot rely on bioenergy with carbon capture and storage for
energy security under net zero scenarios. We are fooling
ourselves if we think that we can. Proponents argue that BECCS
will help to contribute to energy security, but that is
inaccurate. BECCS comes with an energy penalty, as it requires
energy to power the CCS unit and to provide power to the grid.
Because of that, BECCS can either maximise power generation or
CO2 capture. It cannot do both. Given that it was previously
reported by the Financial Times that the regulator had appointed
a Drax consultant, Black and Veatch, to carry out an assurance
audit into the company, I hope that the formal investigation
recently announced by Ofgem will be carried out independently,
thoroughly and transparently. It should not be a desk-based
inquiry, as has been the case before. As we look to these new
technologies, it is vital that they really are sustainable and
that we are on the right road towards net zero.
We have not touched much on transport. As an active travel
champion, I am concerned that tomorrow’s National Audit Office
report will again show that we are not meeting the goals to
achieve our active travel measures and that we need to do more to
decarbonise every different element of our society. The
transition to net zero is a multifaceted mission that needs a
robust and well-calculated response, with each part fully
calculating its energy contribution and all its carbon costs,
including transportation. Those need to be properly analysed
along with their financial contributions in generating the energy
that we fundamentally rely on. The new Exeter University EC
simulator, which I visited last week, may well be a step towards
independent analysis of different projects as we continue the
challenging but vital work of moving towards net zero.
5.06pm
(Paisley and Renfrewshire
North) (SNP)
It is a pleasure to serve with you in the Chair, Sir Christopher.
I admire the chutzpah of the right hon. Member for Spelthorne
() in bringing forward the
debate. Not only did he make questionable decisions as Secretary
of State for Business, Energy and Industrial Strategy with regard
to Scotland’s net zero ambitions, but he was then
responsible—along with the previous Prime Minister—for crashing
the economy and making net zero far more expensive for this
Government, as well as everyone else, due to the soaring cost of
borrowing for capital investment.
The right hon. Member spoke about nuclear energy; we really need
to move away from the nuclear obsession. Hinkley will now cost
£33 billion and it is years late. Sizewell C, which will
invariably cost upwards of £40 billion, is located on a site
subject to coastal erosion and climate change sea rises. SMRs are
not the answer, either. There is no approved design, they have an
estimated cost of £2 billion each and Rolls-Royce is hoping for
an initial order of up to 15. That is £30 billion of commitment
better spent on energy-efficiency measures, storage and the
electrification of heating. Nuclear is also inflexible and not a
good accompaniment for intermittent renewables. Yet further
investment in storage is therefore required.
The right hon. Member described pumped-storage hydro as a
Scottish technology. The First Minister recently wrote to the
Prime Minister urging him to agree a cap and floor mechanism that
will get Coire Glas, the Cruachan extension and other
pumped-storage hydro schemes up and running. They cost a fraction
of what nuclear does and need only the revenue mechanism to
release private capital investment.
Contracts for difference have been a success in delivering the
deployment of renewables. However, in the Tories’ typical
penny-wise, pound-foolish attitude, their lowest cost obsession
has seen a major failure to develop UK supply chains properly. It
is Tory procurement processes that have prevented Scotland from
properly becoming the Saudi Arabia of wind. It is crystal-clear
that a coherent industrial strategy is required. That said, I am
pretty sure that we had one, and we all know what happened to it
lately. The failure to invest—[Interruption.]
(in the Chair)
Does the right hon. Member for Spelthorne () seek to intervene?
I would be happy to do so.
I would be delighted to give way.
Of course, the hon. Member is quite right that I, with the then
Chancellor, suppressed the industrial strategy, but what we have
done—[Interruption.] Thank you very much—I thought we had
stringent rules about phones and calls and that sort of thing,
but it seems to me that every time I speak, someone has got their
phone on.
Anyway, we have got an innovation strategy and an energy security
strategy. We have tons and tons of strategy, and that more than
fills the gap of what was a woolly and ill-defined industrial
strategy.
I thank the former Secretary of State and Chancellor for his
intervention, but I profoundly disagree with his take on this. I
will go on to talk about this at the end of my speech, but the
strategies he mentions do not have much in them. If we look under
the bonnet, there is nothing there. For him to say that those
strategies more than make up for the loss of the industrial
strategy is for the birds, to be quite honest.
The failure to invest in upgrading the transmission system
between England and Scotland has resulted in nearly £5
billion-worth of constraint payments—money that could and should
have been invested in grid upgrades. Developers in Scottish
waters are now having to connect to the grid in the north-east of
England, bypassing Scotland altogether. That said, it is one way
to avoid the utterly ridiculous and outrageous additional grid
charges that penalise developers in Scotland. The right hon.
Member was also in post for the further betrayal of Acorn CCS,
which is the most advanced project and the one with most delivery
certainty, but it is still waiting for Government support. That
belies the Tory commitment to net zero.
My hon. Friend the Member for Kilmarnock and Loudoun () and I have visited several
businesses and projects in the highlands, Orkney and Aberdeen
that are hugely important to reaching our net zero targets.
Storegga, of the Acorn Scottish cluster, was one, and another was
the hugely impressive European Marine Energy Centre in Orkney—the
real energy island in the UK.
Not content with providing innovators the platform with which to
test tidal energy, EMEC has come up with solutions to add value
to the energy produced, including an electrolyser complemented by
storage batteries producing green hydrogen, which in turn is to
power other projects such as a combined heat and power unit at
Kirkwall airport and a hydrogen fuel cell at Kirkwall harbour to
provide clean shore power to ships tied up there. I say “is to”,
because delivery of the hydrogen is an issue. Apparently, due to
Maritime and Coastguard Agency regulations, the hydrogen can only
be delivered if there is no freight and fewer than 25 passengers
on the ferry. Those regulations seriously curtail EMEC’s good
efforts.
Come to think of it, where is the Government’s coherent strategy
on delivering hydrogen, full stop? They talk hydrogen up often
enough, but those who are producing it struggle to deliver it.
You could not make it up, Sir Christopher. It is obvious that
tidal stream needs a bigger ringfence than it currently has. As
is often the case, we lead on innovation, research and
development in this country but, just at the point where a new
sector needs public sector investment to ensure that we retain
that lead and the supply chain benefits that flow from it, the UK
once again prevaricates and allows someone else to reap the
economic benefits.
To conclude, there is a big risk that allocation round 5 will be
a complete failure, like last year’s Spanish auction, with strike
rates now too low due to inflation and rising costs, as mentioned
previously. Again, the Government—more specifically, the
Treasury—are tone-deaf, as they are in their attitude to the
Inflation Reduction Act in the United States, which is causing
investors to rebalance their portfolios across the Atlantic. The
Government are now taking credit for work undertaken by the
Scottish Government; whether it is tree planting or zero-emission
buses, they have subsumed the Scottish targets into UK targets to
hide their own failures. No doubt active travel will be next.
The Tories’ record on net zero is a litany of failure; when we
look under the bonnet, there is no mechanism nor the required
investment for delivery. Scotland is doing so much more, but with
one arm tied behind its back. As in so many other areas,
Westminster is holding Scotland back.
5.12pm
(Bristol East) (Lab)
It is a pleasure to see you in the Chair, Sir Christopher.
I congratulate the right hon. Member for Spelthorne () on securing this debate. I
am pleased to see that he is still pursuing an interest in net
zero. I agree with some of what he said, but there were some
points I would have liked him to cover. For example, when he
talked about the grid, as the hon. Member for Paisley and
Renfrewshire North () has just said, the biggest
problem is not the question where the pylons go in east Anglia,
but the lack of grid connectivity, which is a massive obstacle to
economic growth. That is something we need to solve as we move
towards greater use of electricity in our industrial sector.
Three former Business Secretaries, from the Lib Dems,
Conservatives and Labour, have all come together today to bemoan
the lack of an industrial strategy, so I do not agree with the
right hon. Member for Spelthorne on that. He talked about
retrofitting homes, which is obviously important, but it would
help if we stopped building homes that do not meet energy
performance certificate C standard. We are compounding the
problem, having built more than 1 million homes since the zero
carbon homes pledge was dropped that do not meet that
standard.
The right hon. Member for Spelthorne mentioned green levies and
incentives for decarbonisation. It would have been interesting to
hear his thoughts on the hydrogen levy. We were in the Energy
Bill Committee earlier today and it must be said that, based on
Second Reading of that Bill, there is a lot of unhappiness on
both sides of the House. We will oppose the hydrogen levy on
bills, and I would welcome his support on that, because I do not
think we should be putting the burden on consumers when it is
mostly industry that will benefit.
Just to clarify, is Labour opposing the hydrogen levy on bills,
or its removal?
The House of Lords voted against the hydrogen levy
on bills on the basis that it is a regressive measure and we
should not be adding to the burden on consumers. We support that
position; the Government think that it should go on bills, where
it is the industry that benefits. There have been reports that
the Secretary of State is due to U-turn on that position very
soon, so the right hon. Member might want to be ahead of the
curve and jump the right way before the Secretary of State
does.
I am sure that the Secretary of State does not need my
encouragement, or otherwise, to come to the right decision.
I am sure that the right hon. Member would be a very persuasive
voice.
The Government’s commitment to a net zero target is to be
welcomed, but a target for a date set far into the future—2050—is
pretty meaningless unless it is backed up by a comprehensive road
map as to how we are going to get there. We know that the
majority of that journey needs to be done in the very early
years, with just the hard-to-decarbonise sectors following at the
end, so we need to know how much ground we are going to cover and
when. The Government were taken to court on this issue last year,
with the High Court ruling that they had provided insufficient
detail. There was a big hype about “green day” at the end of
March; eventually, the Government decided that it was not quite
green enough and changed its name to something else, but what we
got was a plan that—even in terms of our 2030 nationally
determined contribution—only sets out how we would deliver 92% of
that. We are still way off track.
Net zero is not a slogan or a mere box-ticking exercise: it is a
whole paradigm shift that we must instigate, as a country and as
a global community. Scientists are warning that we are likely to
breach the 1.5° threshold in the next four years. We are running
out of time, and we need to do everything as fast as we can.
There has been a lot of negativity in recent days about net zero,
with people pushing back against Labour’s announcement that we
would not support any new oil and gas licences. Again, people
have been repeating that old trope that it is too expensive to
reach net zero, when we know that renewables are far cheaper
now.
The Government do not seem to grasp that this is a huge challenge
for the country, but as has been said, it is also an enormous
opportunity. The right hon. Member for Kingswood (), who authored the recent
net zero review, said that it is
“the economic opportunity of the decade—if not the century”
to create a new economy. As the right hon. Member for Spelthorne
mentioned, President Biden has not only recognised that
opportunity, but seized it with the Inflation Reduction Act, and
the EU has responded with its green deal industrial plan. The
Chancellor has said that he will come up with a response in the
autumn, which is at least better than the response from the
Energy Secretary, who tells us that the UK is already decades
ahead of the USA. The Minister has said that the rest of the
world is “playing catch-up” with us. We do have 22% of the
world’s offshore wind installations, as I suspect the Minister
will tell us, but we have only 2% of global wind industry
jobs—that is just one example. A country such as Denmark, which
recognises the export opportunities, has over eight times as many
jobs as the UK for the equivalent wind energy capacity.
Businesses I meet now are describing the Inflation Reduction Act
as a game changer, and are warning that they will transfer
investments to the US. There have been occasional success
stories—the news that Jaguar Land Rover is set to establish a
gigafactory in the south-west, in Bridgwater, is very welcome—but
that comes with a sense of relief that that company has made that
announcement, rather than real confidence that there is a
coherent industrial strategy that will deliver the 10
gigafactories that the Faraday Institution predicts we need. I
would dispute the Minister’s suggestion that we are decades
ahead: we need to have a coherent industrial strategy, a response
to the Inflation Reduction Act sooner rather than later, and a
revised net zero strategy that shows that we really are on course
to meet that goal.
5.19pm
The Minister for Energy Security and Net Zero ()
It is a great pleasure to serve under your chairmanship, Sir
Christopher, and to listen to this excellent and important
debate. I begin by congratulating my right hon. Friend the Member
for Spelthorne () on securing it. Of course,
I come to this debate with some trepidation, as I am facing
someone who did my job previously and then, unlike me—yet,
anyway—went on to be Secretary of State at what was then the
Department for Business, Energy and Industrial Strategy. He made
immense progress on our path to net zero and energy security
I would not normally be rude, but I hope that the hon. Member for
Paisley and Renfrewshire North () can perhaps move on, as we
debate more often, from a rather adolescent approach to one that
more genuinely engages with the substance. His was not a
particularly brilliant contribution to this debate in comparison
with those made by other Members, which I thought actually had
some substance.
My right hon. Friend the Member for Spelthorne oversaw the
publication of the landmark, world-leading net zero strategy. The
independent Climate Change Committee described it as
“an ambitious and comprehensive strategy that marks a significant
step forward for UK climate policy”
and as
“the world’s most comprehensive plan to reach net zero”.
It is worth highlighting a couple of points. When we came to
power in 2010, just 7% of this country’s electricity came from
renewables; now it is well over 40%. The issue of insulation and
the number of houses being insulated was also raised. I do not
know why the Liberal Democrat member who raised it, the hon.
Member for Tiverton and Honiton (), is no longer here for the
winding-up speeches, but anyway—he raised it before leaving the
Chamber. It is worth noting that in 2010 the figure was just 14%
and by the end of this year I expect that 50% of homes will have
reached energy performance certificate level C or above, which is
a huge—indeed, transformative—change, albeit one that needs to go
much further and faster.
My right hon. Friend the Member for Spelthorne oversaw COP26,
which was the biggest summit that this country has ever hosted.
It brought together 120 world leaders and over 38,000 key figures
from Governments, civil society, businesses, youth and more, in
order to tackle the urgent challenge of climate change. It is
also worth noting that we have met all our carbon budgets to date
and that we are the first major economy to legislate for net
zero—done under this Government. So this country is more on track
than almost any other country and certainly more than any major
economy on earth. That is the context that people could be
forgiven for not realising was in fact the case from the rather
adolescent contribution of the Scottish National party spokesman.
I will leave to one side any comments that the chairman of the
Climate Change Committee has made about the Scottish Government’s
performance in meeting their climate targets, because doing
otherwise would be to descend to the level that the SNP spokesman
stayed at throughout his speech.
When the Minister says that this country is “more on track”, does
that mean that we are “on track” or that we are just closer to
being “on track” than anybody else?
That is an excellent question—we have exceeded every carbon
budget to date. We not only have the net zero strategy but we had
the net zero plan on 30 March, setting out how we will do it. Of
course that stretches through to 2037. Not every aspect of the
way in which we will fulfil that aim has been set out to
date—people would not expect them to be 14 years before that
date—but we are on track. What we have to do is make sure we stay
on track. I would not try to represent to the House today
anything other than the fact that it is an extremely challenging
business to ensure that we continue on track. That is what we are
working on flat-out.
My right hon. Friend the Member for Spelthorne oversaw the
publication of the British energy security strategy, which raised
greatly the ambition set out in the net zero strategy, and since
those documents came out the Government have continued to
progress. In March, we published the Powering Up Britain package,
which demonstrates that we are on track to reach net zero, and in
the net zero growth plan we are bolstering delivery. That plan
responds to the expert recommendations made in Mission Zero, the
independent review of net zero, to which there has been reference
in the debate, which explored how we can achieve net zero in the
most pro-growth, pro-business way.
Our net zero ambition needs strong public and private
partnership, and we are forging these links in a number of ways.
Government policy and funding commitments are already leading to
real outcomes, and we are leading the world in so many ways, not
just on offshore wind.
The Government are committed to accelerating renewable
electricity deployment. The Powering Up Britain package sets out
our delivery plans for meeting those ambitions. It includes
important announcements on a range of technologies, including up
to £160 million of new funding to kick-start our investment in
port infrastructure to deliver on our floating offshore wind
ambitions, which were referred to earlier, and a new solar
taskforce to drive deployment of that important technology as we
seek to increase that fivefold by 2035. We launched the taskforce
on 25 May, getting key players from Government, industry,
regulatory organisations and other relevant organisations round
the table to drive forward the actions required to deliver that
ambition of deploying 70 GW of domestic and industrial rooftop
and ground-mounted solar by 2035, all while cutting installation
costs, boosting British skills and jobs, and improving grid
access to support a solar power revolution.
The Minister rightly refers to the need to improve our
electricity supply from solar. Has he looked at the
interconnection that is proposed from Morocco to come in at
the Hinkley juncture? Are he and the Department now considering a
contract for difference, which would enable that contract to go
ahead?
I thank the hon. Gentleman for his question. We are looking at
the Xlinks project. We have set up a team to look at it with no
further commitment other than to make an assessment. It will be
reporting to me shortly on that. We will look at the outline
business case going forward. We are looking at it; I do not want
to go further—positively or negatively—than saying that.
I realise it is a stretch for the Minister to try to portray
himself as the adult in the room with his contribution, but he
mentioned good access. Will he therefore tell us what will happen
with the grid constraints across the border, even in Orkney where
all the energy it produces cannot actually be fed into the grid?
When will that be resolved?
I thank the hon. Member for that question. It is a good question
because the grid constraints, transmission and local connection
are the biggest barriers standing in the way of decarbonising our
electricity system by 2035. That is why the networks commissioner
was asked to investigate that and will be reporting to us this
month. That is why the Prime Minister appointed for the first
time a Minister for Nuclear and Networks, my hon. Friend the
Member for West Aberdeenshire and Kincardine (), who is working on that. The
hon. Member for Paisley and Renfrewshire North is absolutely
right to point out that the transformation we have seen in
renewables, the change in our generation system and the
requirement to grow our electricity capacity going forward puts
enormous strain on that and creates not only supply chain,
financing and deployment challenges in that space, but political
ones because of the infrastructure impact on communities. A lot
of work is going on in that space, and I am working closely with
Scottish Government colleagues and other colleagues to try to
ensure that we work in the most coherent manner possible.
We have heard mention in the debate of the need to improve the
energy performance of homes across the country. Notwithstanding
the transformation we have brought about—it is not enough—that is
why we have established a new energy efficiency taskforce to
drive forward improvements. That is why we are spending £12.6
billion over this Parliament and up to 2028 to support and
provide long-term funding and certainty, supporting the growth of
supply chains and ensuring that we can scale up delivery over
time. Only yesterday I visited Octopus Energy’s centre, looking
at how that company is trying to design heat pumps to be cheaper
to install and more efficient, so they can drive the cost down
and speed up the time it takes to install them, thus making the
decarbonisation of heat in homes, which is a thorny and
challenging subject, more realistic and deliverable.
The delivery of net zero relies on strong business action. That
is why we brought together senior business and finance leaders
into a new strategic net zero council co-chaired, alongside
myself, by Co-op Group CEO Shirine Khoury-Haq. It includes Carl
Ennis, CEO of Siemens; Ian Stuart, UK CEO of HSBC; Chris Hulatt,
the co-founder of Octopus Investments, and others from UK
business. The full membership reflects the cross-cutting nature
of our net zero challenge. The next meeting is planned to be held
in No. 10. We are mapping all the various business and sectoral
organisations focused on net zero, looking to ensure that we have
the most coherent architecture and that we can develop road maps
for each sector, so that we can take the cross-cutting nature of
Government in other policies and put it into something that
people in particular sectors can more easily adjust to and adapt
and that investors can invest in. The green jobs delivery group
was formed after the publication of the net zero strategy and
followed work by my right hon. Friend—
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