Grand Committee
(3 years, 8 months ago)
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Arrangement of Business
(3 years, 8 months ago)
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The Deputy Chairman of Committees (Lord Faulkner of Worcester) (Lab)
My Lords, the hybrid Grand Committee will now begin. Some Members are here in person, others are participating remotely, but all Members will be treated equally. I ask Members in the Room to respect social distancing. If the capacity of the Committee Room is exceeded, or other safety requirements are breached, I will immediately adjourn the Committee. If there is a Division in the House, the Committee will adjourn for five minutes. The time limit for this debate is five hours.
Net-Zero Carbon Emissions
(3 years, 8 months ago)
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Lord Teverson
That the Grand Committee takes note of the case for the integration of policy-making in (1) national, and (2) local, government to achieve net zero carbon emissions in the United Kingdom.
Lord Teverson (LD) [V]
My Lords, I declare my interests as a director of Aldustria Ltd, a trustee of the Green Purposes Company that holds the green share in the Green Investment Bank, and an honorary president of the Major Energy Users’ Council.
Beyond the pandemic, two emergencies confront us: climate change and biodiversity loss. Both are real and, like Covid, both can be fatal to our economy and society. Members and Ministers in this House are all good at fine words when it comes to these crises, and I am sure there will be many admirable ones in this debate, but what counts is action. This debate should focus on how we deliver our climate goals most effectively and certainly. To do that, almost before anything else, we have to closely co-ordinate work between government departments and between Whitehall and our devolved nations, combined authorities and local authorities. With climate change, there is no room for silos in decision-making or inaction—if there is, we lose.
I will concentrate on the word “action”. The Government have just accepted the Climate Change Committee’s recommended sixth carbon budget—I think that legislation is being laid before Parliament today. I welcome that, as I am sure we all do. I also welcomed the Prime Minister’s 10-point plan, but without a route map—I have not seen one yet—it is a 10-pointless plan. We are still waiting for a net zero road map, the Treasury’s review of the costs of decarbonisation and the strategy for heat in homes and buildings, and whatever happened to the task force net zero? Perhaps the Minister can tell us. Did the Cabinet committee on climate change that the Prime Minister announced at the beginning of his premiership ever get past its first meeting?
Despite our strong past performance on carbon reductions in the UK—we are all proud of that—we were on track to miss our fourth and fifth carbon budgets even when our 2050 target was still only an 80% emission reduction. We have become complacent. No wonder the reception of these new targets was muted. It is easy to set targets into the future—in this case 2035, 14 years away—making it happen now is the test of our sincerity.
To quote Alok Sharma, COP 26 president and Cabinet member, on the announcement of the sixth carbon budget decision:
“Long term targets must be backed up with credible delivery plans”—
how much I agree with Mr Sharma. Chris Stark, chief executive of the Climate Change Committee, stated:
“This target means every choice we make from now must be the right one for our climate.”
That means the choices made by the Treasury, the Cabinet Office, the Department of Health and Social Care, the Foreign Office and all the rest, not just BEIS and Defra.
How successful are we at Whitehall co-ordination? Back in ancient history, under Gordon Brown as Chancellor, the Treasury produced the Stern report and acted on it. The result was the Climate Change Act. But this year’s Budget was judged “climate-lite”. There were some good announcements, including green bonds—though late and long resisted by the Treasury—and the UK Infrastructure Bank, but no mechanism to ensure net zero- compliant investments and no big push of retrofit; in fact, there was a retreat on this. The Government backed away from green taxation, despite having previously trailed it in the press.
Let us be clear: if we are to win the climate change challenge, two departments have to be at the centre of it, and they are not BEIS and Defra but the Treasury and the Cabinet Office. There has to be a senior Minister in the Treasury whose sole focus is the climate change agenda. In the Cabinet Office there should be created a Minister for the climate emergency, who is a full member of Cabinet. That is the practical demand of the Government’s rhetoric and our desire to succeed.
There is one other department that I want to put in the spotlight when it comes to silos, yet it also is at the heart of climate change policy. That is the Ministry of Housing, Communities and Local Government. It scrapped the 2016 zero-carbon homes deadline and did the same for the 2019 commercial buildings target. It rules the roost on building regulations, but I get no impression from it of a desperation to urgently uprate standards, let alone inspection rates. The Conservative manifesto pledged over £9 billion for retrofitting buildings, which I welcomed, but, a quarter of the way into this term of office, very little has been committed. I shall come on to the green homes grant later.
Then we had the Cumbria coal mine. It somehow did not seem to occur to the department or the Secretary of State that a brand spanking new coal mine being approved in the year of our COP 26 presidency, when the UK was internationally the co-founder of the Powering Past Coal Alliance, might just be seen as a little off-message by the rest of the world. It is amazing—and amazing too, apparently, to COP president Alok Sharma.
Whitehall silos are a challenge to all Governments—I understand that—but when it comes to climate change, we just cannot afford that luxury, or that inefficiency. As part of removing the climate silo, investment appraisal in all departments must be subject to a “route to net zero” test. That financial rigour is really important in all departmental investment.
I turn to local authorities. The great news is that more than 300 local authorities have declared a climate change emergency. That is brilliant. They are of all political persuasions, and for most it is not just a declaration but a genuine call to action. Two-thirds intend to be carbon neutral by 2030. One reason that this is good news is that some 50% of the carbon reductions we will need in the future are strongly influenced by local policy-making. But when it comes to achieving net zero as a nation, central and local government are like two ships passing in the night.
The next stage of decarbonisation will be far more difficult than what we have experienced so far. Unlike when coal was removed from power generation, our fellow citizens will notice the differences in the way they live. Local authorities are trusted by 80% of their citizens—a far higher percentage than trust, say, the electricity suppliers or even central government—so local authorities are essential to the delivery of the net zero route map. This is the case especially in such areas as the energy efficiency of homes and buildings, transport, waste, planning and the often neglected area of enforcement.
What better example is there of local doing it better than retrofit and home insulation? The fiasco of the green homes grant illustrates all too well that in this area top-down does not work. Local or combined authorities should spearhead retrofit, preferably on a street-by-street basis. To me, that is utterly obvious. Frankly, they should also be delivering the ECO—energy company obligation—programme rather than the energy supply companies. But of course, dumb Treasury definitions of public expenditure get in the way of serious delivery.
Transport is the one growing area of emissions in the UK and, with the rise of white vans and SUVs, it is not just air travel and shipping. Again, local authorities are clearly the best at delivering co-ordinated low-carbon transport plans. Only they can ensure that all citizens have access to charging points for EVs at or by their homes, not least when they do not have a parking space except on the road. Only in that way can we ensure a just transition, which we all want. Moving from landfill and energy from waste to recycling and reuse is a core local activity as well. The enforcement of planning conditions, building regulations and trading standards on energy efficiency is local but hugely underfunded, making prosecution unlikely. That under- funding of enforcement really must change.
Among all their other strategies and route maps, the Government must publish a specific plan or concordat for how they will engage fully with local authorities in the delivery of climate change goals. As part of that, there must also be a grown-up fiscal settlement between the two—difficult, I know, but it has to be done.
As part of my preparations for this debate, I decided to speak to a number of local government officers on the ground in the climate change area to understand their experience of working with Whitehall. I will give five short quotes, which all relate specifically to climate change. Here we go—in their words rather than mine. First, when it comes to climate change, government is divided on the issues at departmental level, and there is no core ethos that drives conversations down a clear pathway. Secondly, we still get pushed towards a more traditional economic justification for projects and initiatives by many departments, and the climate change agenda is too big for that. Thirdly, we have to deal with a multitude of funding streams that are complex, short-term and never allow for strategic-level planning and, equally importantly, do not allow for supply chain development, market confidence and skills development —a reflection of those short-term government policies that change so quickly, so that once you have built up the skills and the organisation, the programme ends and everything stops. Fourthly, there needs to be much greater co-ordination between the climate and ecological emergency agendas within government, as talking to Defra and BEIS is like speaking to completely different organisations. Lastly, we need some form of concordat where there is an honest discussion of what local areas can and cannot do, charting a strategic pathway linked to long-term funding. Those are their words and their experiences, not mine.
Whether it is co-ordination and unity of purpose between Whitehall departments, or central and local government, this has to work. I have made many recommendations, but I ask the Minister specifically: will he ensure that a route map is published, in full consultation with local authorities, that paves the way for close and mandatory co-operation and co-ordination between central and local government? If so, we can achieve so much more, better and at greater speed. I beg to move.
Lord Whitty (Lab) [V]
My Lords, I start with some congratulations. I first congratulate the noble Lord, Lord Teverson, on picking out this debate and on his masterly coverage of the issues in his opening statement. This is a vital point; we need to make sure that government not only is not prone to complacency—as has been the case hitherto—but is getting itself into a position where it is capable of delivering what it promises and its stated intentions. I also briefly congratulate the Government, who yesterday produced on paper a pretty coherent response to the Climate Change Committee’s latest carbon budget, increasing the ambition of the timescale for delivery of our pathway to net zero.
That was positive. It was also positive that, for the first time, they included figures for the UK’s contribution to the cost of shipping and aviation, which the British economy imposes on international transportation. As the noble Lord, Lord Teverson, asked, however, where are the means of delivery? We have already failed—or are likely to fail—to meet the previous CCC carbon budget, and there is no reason to think that the Government are in better shape to deliver on the subsequent stages. The work of the Climate Change Committee has been vital. It has spelled out across the board what we need to do nationally, locally and internationally. Everybody—apart from a few climate change deniers, whom we still have in this House—has agreed that this is a good and clear road map. In theory, so it is, but it is the practice to which the noble Lord, Lord Teverson, has drawn to our attention.
I draw the same conclusion as the noble Lord, Lord Teverson. We need in charge of this process a senior Minister at least equivalent in status to the Chancellor of the Exchequer. The appointment of Alok Sharma, capable man though he is, is not what I mean. I mean someone who has command over other departments, whose name resounds around Whitehall, and who can give a lead to other parts of the public and private sector.
We also need to engage all departments in a high-level Cabinet committee, probably led by that same Minister, if not the Prime Minister himself. In different circumstances, I might have suggested the Prime Minister, but I am not entirely sure that, in the present circumstances, that would be wise. We need somebody specifically focused on this task. Again, as the noble Lord, Lord Teverson, says, the departments largely in charge of delivery at the moment are not particularly highly rated within Whitehall or, indeed, in the country as a whole. Moreover, their climate change commitments are only part of their responsibilities, so BEIS’s responsibility for climate change is often swamped by its industrial and energy responsibilities. Even Defra, which is still in charge of mitigation and various other aspects of climate change, is swamped by rural and agricultural requirements. They are not departments that can deliver. We need a new department for climate change.
The Deputy Chairman of Committees (Lord Faulkner of Worcester) (Lab)
My Lords, I apologise to the noble Lord, Lord Whitty. There is a Division in the Chamber, so we shall adjourn for five minutes.
The Deputy Chairman of Committees (Lord Faulkner of Worcester) (Lab)
My Lords, the Grand Committee will now resume and I invite the noble Lord, Lord Whitty, to continue his speech.
Lord Whitty (Lab) [V]
I apologise for the interruption; I have slightly lost my place. My original intention in looking at this was to go through all 10 points of the Prime Minister’s commitment to creating a green industrial society and strategy. That was probably too much and, in any case, the noble Lord, Lord Teverson, has already covered a few of them.
However, under each point, it is clear that is not just central government and a particular department that is responsible for delivery, but a whole range of departments; that was pretty clear from what the noble Lord, Lord Teverson, said about transport, buildings and so forth. Even the things that appear to be the purview of one department are affected by the position of other departments. Take the first: quadrupling offshore wind power. This involves BEIS, obviously, as the sponsoring department in energy policy, but we are proposing quadrupling wind power, which means that we will have to bring more of that power ashore. It means that the current situation, where individual turbines in arrays have their own point of contact to the shoreline, will increase a hundredfold if we allow every single instance of a turbine in an array to have its own point of contact. That is ridiculous.
We need to ensure that there is a network at sea before we bring it on land so that we reduce those hundreds of points to a few score. That requires planning permission from the local authority; environmental controls from the Environment Agency; and Defra and the marine authorities to look at the effects on marine life and fisheries. And all that needs to be brought together to deliver what seems to be a simple quadrupling of what has been a very successful commitment to offshore wind.
The same will apply in other areas, even in nuclear power, which seems very much a central, single government interest. That will also require huge commitments on the environmental, planning and construction side. It will require an integration of the delivery of new nuclear power with other aspects of the delivery of greener energy and heating, such as the creation of hydrogen and, indeed, carbon capture and storage.
I have decided not to go through all 10 points so I will not do so. However, in addition to the changes in central government that the noble Lord referred to, as have I, we will need local government to become more coherent, we need relations between the central Administration and the devolved Administrations to work more effectively on this, and we will need to ensure that there is clarity in reporting to Parliament.
That is my last point. I was a member of the Joint Committee of the House of Commons which preceded the Climate Change Act 2008. I now seem to have gone full circle: as of last week, I have become a member of the Lords new Committee on Environment and Climate Change, and I am very grateful to your Lordships for putting me there. However, some things have not improved, and cohesion in government is one of them. If that is not achieved by government itself, perhaps parliamentary pressure through our committees and the Commons committees will ensure that the fine words and the very clear policy direction is delivered by an interlocking and clear commitment from government. The clear strategy, some of which was announced yesterday, the fine words, the individual commitments, and the fact that we have most of business and much of the public on side, will not deliver of itself. It would be a serious problem if we were to screw all this up due to institutional inflexibility and a lack of interlocking government.
I support this Motion and I hope the Government take serious notice of what has been said.
The Earl of Caithness (Con) [V]
My Lords, I welcome the Prime Minister’s radical new climate change commitments announced yesterday, which will set the UK on course to cut carbon emissions by 78% by 2035. For the first time, climate law will be extended to cover international aviation and shipping. That commitment, which is to become law, brings forward the current target for reducing carbon emissions by 15 years and confirms the UK’s world-leading position. That is also the easy bit. The challenge now is to have policies to realise the targets, and that will not be possible without a more joined-up approach both at the departmental level and between government and local authorities. That is the subject of this timely debate, and I am most grateful to the noble Lord, Lord Teverson, for choosing the date so successfully.
There is no shortage of advice for the Prime Minister and the Government. In its report to Parliament in June 2020, the Committee on Climate Change—the CCC—argued that the scale of the net-zero goal required it to be
“embedded and integrated across all departments, at all levels of Government and in all major decisions that impact on emissions.”
It has also recommended steps to improve integration in net zero policy-making. Similarly, the National Audit Office stated that
“all government bodies, including departments, arm’s-length bodies and executive agencies have a role to play.”
It also recommended a cross-government plan, as well as regular reviews of the effectiveness of current oversight arrangements. In August 2020, the Prime Minister’s Council for Science and Technology published advice to the Government on using a whole-systems approach to the transition to net zero.
The Government agreed that net zero should be a core government goal integrated into all policy-making where appropriate. The overall responsibility for the net-zero target rests with the Department for Business, Energy and Industrial Strategy, but every other department is involved. The USA is doing well on a joined-up approach, particularly since President Biden took office, and all departments and federal agencies there have been directed to focus their efforts on tackling climate issues. Can we learn anything from them? In the UK, there is currently a Cabinet-level committee on climate change, but I understand that it has not met very often. Can my noble friend tell me how often it has met in the last year? Is part of the problem that everyone on it has other compelling priorities?
Beyond that committee there are few formalised mechanisms within the machinery of national and local government to ensure joined-up, consistent and prioritised consideration of the delivery of net zero. As this is such an important matter, does my noble friend the Minister agree with the noble Lords, Lord Teverson and Lord Whitty, and me that a Minister who sits in Cabinet should be tasked with overseeing different departments’ work on both climate change and biodiversity loss, with the ability to act as a central point in government for the net zero programme? This would allow different departments to continue the work they are doing: BEIS on the decarbonisation of energy in the economy, Defra on land use and ELMS, the Department for Transport on electric vehicles, et cetera. Perhaps there could be a team—in the Cabinet Office, say—whose sole focus is ensuring that work is integrated, complementary and, crucially, deliverable at local level.
I understand there are great challenges at the local authority level. Some 96% of local authorities surveyed said that funding was a barrier to them tackling climate change; 93% cited legislation or regulation, 88% a lack of workforce capacity and 78% a lack of skills. The Government and local authorities have a huge amount still to do. But the Government are doing things, which is good news. The Environment Bill, which we will discuss when Parliament reassembles, includes a requirement that the Government should prepare a policy statement to set environmental principles. One principle is how environmental protection should be integrated into the making of policies. The Bill would require Ministers to have due regard to the policy statement when making policy. I have no doubt that all noble Lords speaking in today’s debate will take part in the Environment Bill and I expect it to emerge a stronger and better Bill when it leaves our House.
HM Treasury has revised the Green Book to place a greater emphasis on environmental considerations. The Treasury is also carrying out a further review of the current approach to valuing future benefits adequately and accounting for environmental effects. The Dasgupta review is a promising start but it is not the end of the road; it is merely the beginning.
What has not been mentioned so far is that it is not just local government in England that matters. The CCC said that Scotland, Wales and Northern Ireland account for around one-fifth of the UK’s emissions for environmental effects. Therefore, they will have to play an integral role in reaching the net zero target and there will have to be great co-operation between Westminster and the devolved assemblies.
At the end of the day, all of us will be involved in climate change. All our lifestyles are going to change. We are going to need to be involved as individuals. But in order to feel that involvement and to take part in the changes that are ahead, we need to be able to understand and be sympathetic to the policies that the Government announce. Therefore, I implore my noble friend the Minister to use the KISS principle—keep it simple, stupid. If he tries to make it complicated, we, the public, will not understand. I give as an example recycling, which is a fearful mess. It is getting better slowly but it is an area where there has been misunderstanding and, as a result, great damage to the environment. We need to be part of what the Government are going to do. We need to learn, we need to be educated, and that will be a huge task for the Government.
Baroness Hayman (CB) [V]
My Lords, I declare my interest as a co-chair of Peers for the Planet and echo the words of previous speakers in congratulating the noble Lord, Lord Teverson, on his compelling introductory speech, on the work that he did for many years on the EU Environment Sub-Committee and on his impeccable timing in allowing us to debate this subject in the week of the Government’s commitment to the Climate Change Committee’s sixth carbon budget targets.
I suspect that the themes running through this debate will be echoed by many speakers. I, too, want to focus on the transition from rhetoric to reality. There is that beautiful phrase from Mario Cuomo:
“You campaign in poetry. You govern in prose.”
The Government so far have been very good about the poetry of commitment on climate, but the prose of delivery has not been so good. As others will, I want to focus today on how we achieve the emissions reductions needed to achieve the targets that we have adopted, and on how delivery is the challenge now.
While the scale of action needed at every level—national, regional, local government, industry, science and technology and individual behaviour change—is huge, it is important to remember that there are tremendous benefits as well as costs in taking the opportunities offered by setting sustainability as our guiding principle. As the Foreign Affairs Committee said this week in its report A Climate for Ambition: Diplomatic Preparations for COP 26:
“The recovery from covid-19 will require a Marshall Plan-scale commitment from many and the UK should ensure that this aligns with environmental ambitions, embedding a green outlook into a new economy. The FCDO should communicate to its partners that environmental agendas are not in competition but integral to health, development, and security policies.”
I want to argue that central to achieving our targets, as well as a whole range of specific initiatives and investments in the areas that we know are critical, will be a whole-systems approach to integrated climate considerations into policy-making in every aspect of national life. While success will not come from government action alone, government has a central role in leading, facilitating, stimulating and providing the regulatory and taxation frameworks for success, as well as investing and working, as others have said, constructively with local government and devolved Administrations.
I shall not focus today on policy areas where net zero needs to be embedded or the various sector strategies needed, particularly in relation to energy, buildings, planning, housing, transport, industry, skills and education. I am sure that other noble Lords will focus on those topics, along with the investment challenge, to ensure that there is the right balance between direct government funding and private investment and that the transition is just. Instead, I want to address the governance of policy.
The Council for Science and Technology, in its 2020 report Achieving Net Zero Carbon Emissions through a Whole Systems Approach, emphasised:
“Achieving net zero by 2050 is a system transformation challenge … Policy areas that have previously been managed separately or in isolation will need to be brought together. They should be developed as an interconnected programme of work, driven by data and analytics, with responsibilities, funding and accountability aligned behind a single goal”.
To put it simply: no more silos.
We need to adopt the standpoint articulated by the US Secretary of State, Antony Blinken, who said this week that the US State Department would “weave” the climate crisis into the fabric of everything that it did. As the noble Lord, Lord Teverson, and other speakers illustrated, we are not doing that weaving very well at the moment; we need radically to improve the machinery of government and the coherence of policy-making if we are to achieve an integrated approach.
Others have mentioned the Cabinet committee on climate change. We are told that it was established in October 2019, but there has been little indication of progress or activity, and there are few formalised mechanisms within the government machine to ensure joined-up, consistent and prioritised consideration for delivery of net zero targets. The Government’s 10-point plan promised a net zero task force, but when will it be set up, who will comprise the membership, how will it report to Parliament and the public, and will departments such as housing and transport, responsible for high volumes of emissions, be included in a way they are not on the current Cabinet sub-committee for strategy? The absence of such cross-cutting mechanisms and of a determinedly coherent approach at the highest level of government cascades down into inconsistent policy- and decision-making that is either contrary to or fails to take advantage of opportunities to achieve progress towards our net zero targets, so legislation is still introduced with no mention or understanding of the relevance of our domestic and international responsibility on climate, as seen recently in Bills on pensions and finance, when action had to be taken in your Lordships’ House to include provisions on climate.
Then there are decisions such as that on the Cumbria coal mine, road building programmes, airport expansion, air passenger duty, the freezing of fuel duty and bailouts without strings for high-carbon sectors, which run contrary to our commitment to net zero and undermine our position as a global climate leader. As others have said, cancellation of zero-carbon homes standards and the green homes grant has slowed down the decarbonisation of housing and has pushed the costs of retrofit on to home owners.
How can we achieve this systemic integrated approach? First and foremost, I would suggest a mindset and leadership at the highest level of government, and this is where the argument for there being a Cabinet Minister in charge comes. That would ensure that a climate lens is applied to all policies and legislation and that the elusive ideal of joined-up government is actually put into practice.
We need to look at some other specific approaches, some of which have already been adopted in other countries. One of the most important would be for all proposed legislation and policy initiatives coming to Cabinet to have a climate impact assessment to show whether or not they align with net zero. This is already being done in New Zealand and Sweden. We could place a statutory duty on departments and Ministers to further climate change goals. The new US climate Bill directs federal agencies to
“use all existing authorities to put the US on a path towards meeting this net-zero emissions target.”
Just as the Bank of England has been given a remit to take climate risk considerations into account, so could other regulators and public bodies. National planning policy statements should all be aligned with net zero, not be incoherent, as they are at the moment.
Given the critical role of local government, which others have stressed, we could follow the example of Ireland, which has set up a network of four local authority climate action regional offices to support co-ordination and learning and address mitigation and adaptation.
There is an argument for the Government to consider setting up a delivery body, along the lines of the Olympic Delivery Authority, to drive forward the huge systemic change needed. Given that transition will entail change for individual citizens, are the Government going to build on the very successful climate citizens’ assembly held by Parliament last year?
Before I conclude, I will deal with one question that is often raised: is there any value in the UK taking effective action to reduce domestic emissions, given that we are, as some would say, small fry compared with other nations in the league table of emitters? In the year when we are hosting both the G7 and COP 26, we have both enormous opportunities and enormous responsibilities to influence other countries, including those with greater emissions than our own, to take radical action to halt climate change and reverse bio- diversity loss. We will not have the credibility to lead in those fora unless we have ourselves walked the walk, not just talked the talk.
There is much talk of global Britain post Brexit. To achieve that ambition, what we do at home will directly influence levels of climate ambition across the world. In the words of the Foreign Affairs Committee report I quoted earlier:
“The UK has the chance to lead and set ambitious domestic climate policies, alongside credible plans to deliver them … It is essential that domestic policy decisions support rather than undermine diplomatic efforts. We recommend that the UK leads by example and sets ambitious domestic climate policies.”
We need to achieve those ambitious domestic policies. If we do so, and achieve the integrated and whole-system approach necessary to do so, we will not only have strengthened our economy, created sustainable jobs for the future, improved our nation’s health, and protected the future and our grandchildren, but genuinely led the world.
Baroness Sheehan (LD)
My Lords, it is a pleasure to follow the noble Baroness, Lady Hayman. I agree with her every word. In doing so, I pay tribute to her foresight and determination in creating a forum for Peers who are interested in tackling the climate emergency but rather bemused by its urgent complexity by setting up Peers for the Planet.
The complexity of the climate emergency is that the science and evidence before us are telling us with increasing urgency that climate change cannot be tackled issue by issue in silos. It is evident that our natural planetary systems inextricably link humans, animals, microorganisms—including viruses, the skies, the oceans and all land and its features, such as glaciers, forests, mangroves, coral reefs, peatbogs, mountains, lakes, farms and cities. That complexity is encompassed in many ways by this timely debate, tabled by my noble friend Lord Teverson, because it asks us to focus on the need for an integrated government approach if we are to successfully meet the interlinked challenges needed to get to net zero.
This is an important issue, and I thank my noble friend for bringing it to your Lordships’ House via Grand Committee. Declaring a climate emergency, setting a net zero target and even agreeing to the agenda for the sixth carbon budget, as set out by the Climate Change Committee, are, quite frankly, meaningless unless accompanied by meaty government processes that cover all arms of government, including its agencies, and all levels of government, especially those such as local authorities, which are rooted in their place and in touch and in tune with their communities.
The fact that my noble friend intimates in the title of his debate that the case for joined-up government needs to be made tells us that the Government’s words are just that: words. To date there has been little commensurate action to underpin their stated ambitions and intentions. I totally agree with the urgent need for a Cabinet Minister responsible for tackling the climate and biodiversity emergency, which many previous speakers have called for.
I will divide the rest of my contribution into two parts, the first focusing on local government and the second on one of the more egregious examples of unjoined-up, incoherent national policy-making by the Government. I very proudly served as a councillor for Kew ward in the London Borough of Richmond upon Thames. My roles for four consecutive years included that of assistant cabinet member for environment and climate change, and sitting on the planning committee, which was an interesting and fascinating experience. It will be crystal clear to anyone who has been a councillor that local government is key to success in reaching net zero targets.
I will pick out just a few of the myriad ways in which local government is essential to realising the CCC’s agenda for achieving net zero by 2050. Behavioural change is identified as a crucial component of success. A top-down approach will not on its own effect that; psychologists will tell you that peer pressure from friends, family and neighbours will have the biggest impact. We need to work from the ground up, and local authorities are well placed to do just that. They have the power to influence how residents use their local spaces; they can tweak local road schemes, encourage more walking and cycling and better eating habits and, crucially, put in place measures to increase energy efficiency in their local housing stock.
According to the CCC, local authorities have powers or influence over a third of emissions in local areas, much of which come from housing. To meet net zero, virtually all heat in buildings will need to be decarbonised and heat in industry reduced to almost zero carbon emissions. Given the importance of achieving success in this area, it is extremely frustrating that the green homes grant has been such an abysmal failure—cut in just six short months. Can the Minister say why the scheme, for which there was great demand, was cancelled? Can he also say why no notice was given and what will replace it?
I turn to local authority funding. The UK, despite its size, is one of the most centralised countries in the world; only about 5% to 6% of all tax revenue is raised by local government. However, it has not always been this way. In the 19th century, local government in Britain was as decentralised as Germany is today. It was only in the post-First World War era that Whitehall gradually accrued the spending power that previously lay with town halls. Given the growing inequality among the regions of the UK, I do not think that change has been an unqualified success.
To play their essential role in meeting the net-zero target, local authorities must be adequately funded. When grant schemes such as the green homes grant are suddenly cut off, that really hurts not just local authorities but local businesses and jobs. With £2.1 billion of EU structural funds cut off after Brexit, it behoves the Government to seamlessly put in place their successor scheme. We are heading towards the end of April 2021, and still there is no sign of the promised consultation on the shared prosperity fund. When can we expect it? Also, when will the Government issue the sovereign green bond, announced by the Chancellor in the House of Commons last November? Can the Minister confirm that, when set up, it will be able to make loans to local authorities?
I have just one other question for the Minister on funding for local authorities. Do the Government have a view on the new report from the London School of Economics and Leeds University, produced in association with the All-Party Group on Sustainable Finance, UK100 and HSBC? The report assesses how UK policymakers can engage the financial sector to meet the net-zero target and its commitment to the levelling up of regional economies in the context of Covid-19 and Brexit. Its authors and supporters would like to see Ministers make a strategic commitment to a just transition for jobs, including plans for mobilising public and private sector finance to deliver place-based projects which tackle both environment and social challenges. Will the Government respond to the report and put their response in the public domain?
I want to dwell on jobs for a moment. Maybe the Minister will correct me if I am wrong, but I think the green homes grant scheme, in large part, fell because of a lack of skilled people to carry out the installations and the complete lack of an efficient process to administer the scheme. Local authorities know their workforce. They know where they are; they know what they do. They will be invaluable in helping to get people reskilled and ready for new jobs in the greening of various sectors of our economy. The only way that communities will be ready to take advantage of the new jobs that green investment will bring is if there is strategic planning for the right sort of skills training and knowledge base that will be needed in the local neighbourhood. Central government does not have that knowledge—which, by the way, is not the same as data. If we are to reach our net-zero targets, local authorities will be key to successful transitions to new industries and new ways of doing things. We must value them, and we must fund them.
In conclusion, I will say a few words on the incongruity of the Oil and Gas Authority’s policy of maximising economic revenue and the legally binding target of net zero by 2050 both sitting within the same legislature. To limit global warming to 1.5 degrees centigrade, oil and gas production around the world needs to decline by an average of 6% per year between now and 2030, according to the UN Environment Programme 2020 Production Gap report. Instead, current global plans to increase production would lead to 120% more fossil fuels extracted by 2030 than would align with the Paris Agreement. Here in the UK, under the recently announced North Sea transition deal, the Government plan to continue to issue new licences to explore for and extract oil and gas. How is the MER—maximising economic revenue—policy compatible with our leadership of the climate emergency agenda and our standing on the global stage for COP 26 in November this year?
It is clear from our continuing MER policy and, indeed, the fiasco around the controversial Cumbrian coal mine that our legislation is not fit for the purpose of meeting the net-zero targets, and legislative alignment is sorely needed on our national planning regime. My final question to the Minister is: will we get our domestic legislation in order before COP 26? It would at least give departments a fighting chance of pulling in the right direction at all levels of government.
Lord Knight of Weymouth (Lab) [V]
My Lords, I welcome this debate and congratulate the noble Lord, Lord Teverson. Given that I will focus on education throughout much of my speech, I remind the Committee of my education interests in the register, particularly relating to my work with Purpose on climate education.
I also welcome yesterday’s government announcement of putting into law the target to cut emissions by 78% by 2035, as recommended by the Climate Change Committee. This morning I read with interest the news of the Mark Carney-led initiative to bring together 160 firms from the global finance sector—including Barclays, HSBC and Axa—with over $70 trillion in assets to meet new targets to cut the carbon content of those assets by 2030. It occurred to me: if the finance sector can come up with a plan, what is the plan for the public sector?
Clearly, we need leadership from central government and, as others have said, this year is a great opportunity. Tomorrow is Biden’s summit; the biodiversity COP is next month in China; the G7 is in Cornwall in June; there is the G20 meeting in Italy; and COP 26 is in November in Glasgow. This is the time to set an aggressive, ambitious course with such a focus on climate change to drive national momentum and public opinion.
The cynic in me, as with others, warns that this is a Government who love an announcement and a Prime Minister who craves the attention and will glory in the UK’s leadership role this year. But do they have a delivery plan to make this happen? Will the Chancellor change the Treasury’s long-standing hostility to green spending and fund a road map to carbon zero? Incidentally, rather than a separate Cabinet Minister for climate change, I would prefer to make the Chancellor accountable for the delivery of climate change plans, as part of a shift of emphasis in the Treasury from money to well-being.
Fundamental to that is investment in local government-led projects to enable place-based change. This is not just about the obvious local authority functions of housing, transport or waste. These are crucial, but we also need to see beyond a transactional approach of investment in X technology to achieve Y reduction in carbon emissions. That will not always deal with the ingrained political problem of there being parts of the population who are not ready for the change.
The importance of a place-based approach is that success is first and foremost about behaviour change in the whole population. We have seen how hard that is through the pandemic. Despite the best efforts of “hands, space, face” as a slogan, and billions in spending, plenty are still struggling to shift their behaviour to make our communities safe from the virus. How then will we get the whole population to change the food we eat, how we move around, how we dress and how we fuel our lives so that they are sustainable and affordable?
I believe that one of the biggest mistakes in the Government’s thinking in their handling of the virus is that they have not sufficiently engaged local government as an ally. Localities are different and need different solutions to create behaviour change. A national approach will always struggle to account for the rich diversity of our nation. Our impoverished councils urgently need more resources to invest in climate change mitigation projects that will effect the behaviour change we need.
The place I would start is in schools and colleges. Almost half of all households in this country contain school-age children. Children and young people are already engaged with this issue. We saw that with the Friday school strikes. According to the OECD, 78% of students in its member countries agree that the global environment is important to them and want to do something about it. The opportunity is to stand alongside those children and young people to shift our behaviour at a household and community level. The majority of schools in this country are still local authority schools, either directly or in partnership with faith groups. There is an urgent need to enable and empower local authorities to take a leadership role on this.
I commend to your Lordships the work of the Brookings Institution in Washington DC. It recently published a powerful analysis by Christina Kwauk and Rebecca Winthrop, which says:
“Recent research shows that if only 16 percent of high school students in high- and middle-income countries were to receive climate change education, we could see a nearly 19 gigaton reduction of carbon dioxide by 2050. When education helps students develop a strong personal connection to climate solutions, as well as a sense of personal agency and empowerment, it can have consequential impact on students’ daily behaviors and decisionmaking that reduces their overall lifetime carbon footprint. Imagine if 100 percent of students in the world received such an education. New evidence also shows that the combination of women’s empowerment and education that includes everyone—especially the 132 million out-of-school girls across the developing world—could result in an 85 gigaton reduction of carbon dioxide by 2050. By these estimates, leveraging the power of education is potentially more powerful than solely increasing investments in onshore wind turbines … or concentrated solar power”.
It goes on to say:
“Emerging research suggests the ‘sweet spot’ for climate action is at the scale of 10,000-100,000 people. This is not only because the collective ability to make meaningful action is rooted in local relevance, but also because we reach a certain degree of cost-benefit optimization when it comes to the global impact of our local actions. If we apply this to the education system, this is equivalent to focusing efforts at the school district level—or the equivalent school administrative cluster, depending on the population size of cities and counties. School districts are the perfect network of institutions that exist in every country in the world that has enough community connection potential to effectively scale green civic learning. Focusing efforts at the local level enables educational interventions to be community-driven, which is aligned to what we know about effective climate action and effective climate change education: that is, it needs to be locally-relevant, tied to local environmental justice issues, tied to local community challenges with climate change, and it needs to be tied to action and ownership at community level.”
Here I commend the work of Ashden’s Let’s Go Zero campaign, which a sixth of county councils are supporting, along with the Anglican Church. So far it has got more than 200 schools to pledge to be carbon zero by 2030. The smart thing about this campaign is not just the carbon impact but the educational one. It aims to get school and college leaders to stand alongside their students and pupils in making this pledge one institution at a time.
It is critical for the behaviour change for this to be owned by the school itself and to have the work to move to zero led by young people. That way, they learn about the consumption of energy and water on the site, the carbon impacts of the food they consume in school, the carbon capture of what they can grow on the estate, and the importance of the choices they make when they travel to and from the school or college. They can then apply that knowledge with the skills they need and, most importantly, develop the carbon-zero mindset we need in the whole population if we are serious about the 2050 net-zero target, let alone the new 2035 one.
This is because, of course, we want schools to reflect the future we want for our communities. That has to be a carbon-zero future. By starting with schools and colleges, we are nurturing the skills and mindsets needed in the labour force as we shift to the sustainable future we all want. Young people need a strong knowledge base in the causes of a warming climate, but also a strong set of skills that will allow them to apply their knowledge in the real world, including problem-solving, critical thinking, teamwork, coping with uncertainty, empathy and negotiation. Indeed, these very transferable skills are needed equally to thrive in the world of work and to be constructive citizens. There is such a win-win to be had here.
In this country, 77% of adults support teaching about climate change in schools and 69% of teachers agree that there should be more teaching on this subject than what is focused on in the non-compulsory subject of geography. My ask, therefore, is for central government to prioritise climate education in schools. Would the Minister like to join me in visiting a school to meet its school council, and to lobby it to make the Let’s Go Zero pledge? The Minister should be inspired by Italy, where every school-age child, by law, must have an hour each week of sustainable citizenship education. Here, we should mandate time, resources and training for teachers in this area, and then work closely with local authorities on the delivery of all our schools becoming carbon zero by 2030.
This is our chance to move on from children and climate strikes to children leading climate action. We can use our leadership position at COP to get others to do the same and, in doing so, drive the behaviour shift across the population that the world needs.
The Deputy Chairman of Committees (Lord Faulkner of Worcester) (Lab)
My Lords, the next two speakers have withdrawn from the debate, so I call the noble Lord, Lord Redesdale.
Lord Redesdale (LD)
My Lords, I must first declare my interests on the register as a director of SECR Reporting Ltd and Climate Change Professionals, and as a board member of the Energy Managers Association. As part of the work I undertake I advise companies and local authorities on net-zero targets, the policies they would need to put in place to achieve that, and the strategies they would have to undertake. Unfortunately, it is very clear from this work that there is a massive difference between aspiration and reality. A lot of greenwash is going on as well. One local authority I spoke to came up with a 2038 target. I asked how it came up with that. It said, “Well, the authority next door made a 2040 target, so we thought we’d go with 2038.” On digging into the details, it had no idea how it was going to achieve that. As the noble Lord, Lord Whitty, set out, a large number of local authorities have made this pledge, but from the work that I have done very few know how they will achieve it.
I thank my noble friend Lord Teverson for bringing this debate forward. It is usually at this point that I go into a great deal of detail on what the Government are getting wrong. However, I have a solution that the Minister could take on board. He might be interested in it because—and I never thought I would say this—it would be based on the Conservative Government’s own policy and would be Brexit-friendly, but I will go into that a bit later. It could have a major effect on how companies understand their carbon targets.
I know from working with companies that there is a problem, because the net zero carbon targets are quite complicated. They are based on reducing emissions in scope 1, scope 2 and scope 3, based on the GHG protocol. I will run through them.
A lot of companies understand their scope 1 emissions to a degree—obviously, that is their electricity use—and if you have half-hourly data, that can be useful. However, I have been utterly amazed at how even large companies do not have a handle on how much energy they use. Gas is fairly simple, as it is based on therms. Transport fuel, however, is not simple to work out; most of the energy managers I work with have never had to deal with transport before. I was talking to a company—a call centre—which had 140 spaces in its car park and which was looking at the energy used in the building. I said, “The energy used in the building is actually a fraction of what is being used in your transport requirement to get everybody into the office at any time.” Of course, understanding how you calculate transport fuel is difficult, because you could do it on mileage, litres or cost of fuel, and a number of calculations need to take place. Many organisations have left transport out.
Scope 2 emissions are those that you have bought on behalf of another company or organisation, and some companies are getting that under way, especially with grey fleet. I have been amazed by how local authorities do not understand the emissions from grey fleet; that is, cars that are used as company cars. Of course, that is a very large emission factor that often does not get added to the emissions of the company itself.
On scope 3, which is the supply chain, very few apart from the largest companies have an understanding of the emissions from their supply chain, and of course that supply chain could dwarf any emissions they have taken out. When you work with companies it is often interesting to realise that we really do not understand our scope 3 emissions. One of the areas that is of particular interest is IT. I was talking to a company which was marketing and which had worked out how much electricity it was using on its computers, but it then proudly told me that it had sent 1 million emails that month, which of course has a massive effect on servers around the world. Gaming is horrendous for that, as is the mining of Bitcoin. However, many companies just do not understand the cost of computing, which is a real issue because it is very difficult to get that information. Amazon will give it to you, while Microsoft will not, so companies have a difficulty in understanding their emissions.
Once you have understood the emissions, that is not the problem; the problem is then building policies around them and understanding what those policies should be. A lot of companies and local authorities have made blank commitments to go to net zero by 2030, 2040 or 2050, but that policy is not linked to any deliverable outcomes. Obviously, the next step is to develop a strategy for going forward from that. We also talk to companies about responsibility: who in the company is responsible for delivering those directives? This seems to be a problem not only for companies and local authorities but for government. I echo the words of the noble Lord, Lord Whitty, that perhaps we should have a Minister in charge of climate change, but we had that and then DECC was taken out, which was short-sighted. Perhaps we should look at reinstating a department on that basis.
Once you have a policy strategy and somebody responsible, companies need to understand that getting to net zero will have costs, so they will have to look at a CapEx solution. A lot of companies are just not prepared to spend money, even though they realise that in the longer term this could save them in energy savings. They also need to look at OpEx. Companies need to start understanding that what they are responsible for in managing their organisations has often been farmed out to third parties, especially in facilities management areas. Therefore, you might be running buildings, the contracts for which are based on a like- for-like replacement rather than replacing old equipment for more energy-efficient equipment.
We also look at transport, where there is of course the Government’s target to move to electrification. This is a major area of greenwash in a way, because there is, I think, a lack of understanding of how significant this will be for our electrical infrastructure. I talked to one company that had 100 car parking spaces and which said, “We’re going to electrify our fleet and we’re putting in three charging points.” I said, “That means you could probably charge nine cars during the working day—and you have 100 cars out there.” They then said that they would put in a lot of charging points. But, of course, if you put in more charging points you need a bigger transformer, and you need more electrical supply. At a lecture recently, I was interested to learn that those fast-charging points on motorways have an energy use equivalent to 250 houses. We realised that when we put them in, we were talking about a small village’s energy supply just for that.
The noble Lord, Lord Knight, talked about behaviour change. One area where we have been trying to work with companies is in getting people to realise that this is not just a policy. If we are to hit net zero, everybody in the company has to understand how they have to change their energy usage.
I have set out these small problems—slight mountains to climb—but I did say that I would suggest a solution to the Minister that could be helpful, which is to change the SECR reporting regime. In 2019, the Government brought forward a new GHG reporting regime: streamlined energy and carbon reporting, or SECR—it does not really roll off the tongue. It basically means that large companies—large as defined under the Companies Act—must report all their energy data, show which metric they have used and do an intensity metric. They also then have to list all their principal energy-efficiency measures and whether any are not undertaken. Each company has to do this by law and then report it to Companies House, with the information made available in its company report.
A very simple change that could be done very quickly through a statutory instrument—I know that PwC is doing some work for BEIS at the moment looking at whether this could be brought forward—would be to make it an obligation on companies to put their net zero plan into their company reports. It could be done in a way that was not very expensive. To make it Brexit-friendly, ESOS—the energy savings opportunity scheme—which was part of the European directive, could be scrapped, which would create a saving to companies. Some of the information that was needed for ESOS could then be incorporated into SECR, which is a second obligation on companies.
If companies were required to put their net zero plans into their company reports, it would allow stakeholders to understand where they are going forward. One area that we found most interesting is that companies are finding that their stakeholders are not just their shareholders any more but their employees, their customers and, interestingly, their banks, finance companies and insurers, which look very carefully at sustainability and climate change criteria when they are looking at investment opportunities.
Would the Minister be open to talking to his officials about whether SECR could be changed to include the net zero target and looking at whether we could introduce a statutory instrument to achieve this? If a statutory instrument were brought forward, it would mean that companies—before COP 26—would start having to set out their net zero plans. The cost would not be high, but it would mean that Britain would be a world leader in moving forward on how companies can adapt to climate change.
The Deputy Chairman of Committees (Lord Faulkner of Worcester) (Lab)
My Lords, the noble Lord, Lord Berkeley, is not on the call, so I call the noble Lord, Lord Stunell.
Lord Stunell (LD) [V]
My Lords, I start by reminding noble Lords that I am the honorary president of the National Home Improvement Council and an honorary fellow of the Institution of Civil Engineers.
I intend in my contribution to highlight the urgent need for the Government to set out a coherent plan to make our built environment zero carbon by 2050. Debates about reducing carbon emissions often focus on fuel substitution—let us stop burning coal to generate electricity, for instance. When the debate moves on to talk about the necessary infrastructure to deliver those things, the discussion tends to focus on how to get more vehicle charging points, what technology to use for charging for road use, building more cycleways and putting in showers and bike stores at workplaces. That is all good stuff, but one basic fact about climate change policy is often overlooked: that noble Lords’ houses emit more carbon dioxide each year than noble Lords’ cars.
The built environment as it exists now is responsible for at least 30% of the United Kingdom’s emissions each year, twice as much as the whole transport sector, road, rail and air combined. Every year we are building more homes that actually make it worse. Each new school, hospital, factory and office block makes it worse, making reaching the target of zero carbon by 2050 harder, not easier. Noble Lords might expect, in a rational world of evidence-led policy making, that here in your Lordships’ House, and along the road in Whitehall, we would see carbon reduction of the built environment getting twice as much attention as all that expended on the transport sector, with twice as much spent on research and twice as much invested in cutting emissions. Noble Lords would expect a laser-like focus on delivery on that by any Government aiming to meet their statutory zero-carbon deadline by 2050, let alone trying to meet an 80% reduction by 2035. In fact that is not what is happening, despite Ministers setting out to turn the UK into the pre-eminent soft power of the world, sailing on an independent course as global Britain.
This November the Government will host the one international forum where they might be able to demonstrate genuine world leadership, COP 26. Surely the Minister can see the value of demonstrating at that conference that they have a credible plan to decarbonise the built environment. All the participants at that conference will be looking to the UK to see what world leadership on climate change really means. They will surely see through an empty promise for 2038 that is not backed by a credible delivery strategy for carbon reductions from existing buildings, especially homes.
Let me chart a course for the Minister to follow on that perilous journey to super soft power status at COP 26. First, he should stop building stuff badly. Back in 2015, the incoming Conservatives scrapped the plan for all new homes to be zero carbon. Since then 800,000 homes have been deliberately built to a lower standard, which means they all face the need for upgrading before 2050. That was an environmental scandal, and it remains a continuing wasted opportunity. Today the Minister should announce that all new homes started on site from April 2022 must be zero carbon. Let us stop building stuff badly. That surely is a policy no-brainer. And, yes, of course, he should also require all new publicly funded buildings of every type to be zero carbon from the same date, with a firm timetable for the private sector to be zero carbon too.
But all that zero-carbon new build will still be only a small fraction of the built environment when we get to 2050. There are 24 million homes now and it is likely that 20 million of them will still be standing in 2050. They all have to be massively upgraded if there is to be any chance of reaching zero carbon by then. In that context, the announcement of the green homes grant last year sounded very promising: a 600,000 home programme to be completed by this March. If we kept going at that rate, 33 years later all homes would be upgraded—a three-year overshoot on 2050, but a promising start. However, as of this week the Government have set themselves the new target of an 80% reduction by 2035. I say to the Minister that even had the green homes grant delivered 600,000 home upgrades a year as originally planned, the scheme would have reached only 8.4 million homes by 2035, with only 40% of existing homes upgraded, not the 80% targeted.
But, as your Lordships know, sounding promising was as good as it ever got with the green homes grant. I hope the Minister will not use any of his time to tell your Lordships how nearly successful it was. The fact is that it did not deliver any extra jobs—the key reason given at the time of the scheme’s launch; it delivered less than 10% of the planned improvements to homes; it completely disillusioned the home improvement industry; it deeply frustrated a large pool of willing home owners who have been turned away from making improvements; and it enriched an incompetent IT company in Virginia, USA. Now, finally, it has been cancelled. The very small slice of the unspent money rolled over into this year has now been slashed as well, with an announcement this week—the first sign, perhaps, of ministerial understanding of real life—of £300 million being redirected instead to local housing providers for use in upgrading homes in the low-income housing sector.
The green homes grant was not world beating, nor will it be a soft power enhancer at COP 26. In fact, it was a perfect working example of what the noble Lord, Lord Teverson, referred to as silo policy-making by people who took no advice from anyone.
Therefore, the second step for the Minister to announce today is a completely fresh start to upgrading all of England’s homes in a steady multiyear programme. It will need innovation and investment in capacity building. It will need to be driven by regulatory changes and supported by serious workforce planning, with recruitment and retraining in the skills needed. Essential to all that is a shelf life not of the laughable 26 weeks offered by the green homes grant but more like 26 years. It will need to work and build with trusted partners. The one undoubtedly successful outcome from the green homes grant was the demonstration that local authorities, given their head, can deliver in this area, as they have done with the low-income owners scheme.
To get 80% of our homes upgraded by 2035, an average of 1 million homes a year will need work done. That is not as daunting as it may sound: nearly twice that number of central heating boilers are replaced each year without any drama at all. That is done because there are skilled installers in place all over the country, a marketplace that functions well, and a regulatory system that underpins safe and efficient schemes. But to deliver that for home energy upgrades will take a serious level of long-term commitment by this Government to lay sound foundations for establishing a capable delivery programme.
The Government will need to work very closely with the construction industry on to deliver the work. The great majority of those 1.6 million central heating boilers installed each year are put in by small and micro-businesses, not by mega construction firms. In the future, home energy upgrades will be done best when they are delivered through small companies and businesses. With those things in place, success can certainly follow.
In summary, the Government need to stop making it worse with new build and make zero-carbon infrastructure the new normal; to tackle the backlog of energy wastage and carbon emissions in our existing building stock; and to plan ahead and plan long term. They need to learn from the green homes grant experience that a press release is not a policy nor a delivery plan—and that Rome was not built in 26 weeks. The Government need to work with trusted partners in local government, empowering them to supervise and deliver, and give confidence to the construction industry that it is safe and indeed profitable for it to invest in the skills and capacity building needed.
My question to the Minister is: does he take to heart the urgent need to cut carbon in construction and to upgrade the country’s 24 million homes? If so, what is the plan, when will it start, who will deliver it and what are the milestones on the journey? Does he not, at the least, accept that answers to those questions that are provided before COP 26 starts will have a double value in giving leadership at that conference on the urgently needed international framework of climate change mitigation?
My noble friend Lord Teverson has set the Minister the exam question today. I have done my best to prep the Minister on what he might best say in response, at least in regard to the 30% of our carbon output that comes from buildings. I am looking forward with great interest to hearing from the Minister later whether or not my coaching has borne fruit.
Baroness Bennett of Manor Castle (GP) [V]
My Lords, I thank the noble Lord, Lord Teverson, for securing this debate and for his clear and powerful introduction to it. I particularly welcome those telling quotes from local government officials. I have enjoyed many of the contributions that we have heard already from all sides of your Lordships’ Committee. I particularly appreciated the contribution from the noble Baroness, Lady Hayman. Her phrases “from rhetoric to reality” and “from poetry to prose” are being reflected in the speeches of most other noble Lords. If this Committee were marking the Government’s work on integration of policy-making and the climate emergency, the result would surely not rise above D-minus.
It is a pleasure to follow the noble Lord, Lord Stunell, whose 2004 Private Member’s Bill, which became an Act, on sustainable and secure buildings was ground-breaking at the time. It is such a tragedy that we have made so little progress on energy efficiency in the past two decades and we are still building dreadful-quality new homes, immediately in need of extensive retrofitting. That is a far more expensive process than building them right in the first place in our lax regulatory environment. The noble Lord, Lord Stunell, beautifully summed up what was needed in new homes in a slogan that would even fit on the side of a bus: “Stop Building Badly”. I will not even start today on the green homes fund. Even the Government have admitted that that was a disastrous, ill-delivered policy and another outsourcing disaster. The terrible quality of our housing is a tragedy for the planet and for the households that have to live in such uncomfortable, inadequate environments and pay the heating bills for them.
As I turn directly to the Motion before the Committee, I should declare my position as a vice-chair of the Local Government Association. Reaching net zero emissions is a necessary condition to playing the UK’s essential part as an historically massive contributor to the climate emergency—as a former colonial power that destroyed much of the earth, leaving nations ill- equipped to deal with it. It is not, however, a sufficient condition: our current rate of progress is far too slow, as are our targets. We should be aiming for net zero by 2030.
Climate is only one of our problems. We also have the crisis in our state of nature: our soil is in disastrous condition and the world is choked with plastic waste. This is an appropriate time to mention that this is Reusable Nappy Week. An attempt to initiate it was made many years ago by the excellent Women’s Environmental Network to highlight the social and environmental damage posed by single-use nappies—a major source of plastic waste—but there has been no effective government action. I mention that specifically because this Motion focuses on the need for the integration of the efforts of national and local government. Here is one good example of excellent things happening piecemeal at a local level, often relying on volunteer-led approaches, such as nappy libraries. However, austerity-crippled local governments, with their powers stripped away in our incredibly centralised political system, have little capacity to deliver the consistently complete services—nappy libraries, support groups, centralised laundry provision—needed to make reusable nappies, which are better for parents, babies and the environment, the standard for all. What a criminal waste for the climate and for people to cut down a tree, pump up oil and turn it into plastic to produce an object used for a few hours at most before it becomes noxious waste set to remain in landfill for centuries or produce polluting gases in an incinerator—that it is if it does not end up littering the local park.
While we are on the interlinked issues of climate and plastics, where is England’s bottle deposit scheme? Not world-leading, not even world-trailing, but so far behind the arrangements in most comparable countries that we are on another planet.
Talking about the climate emergency and local government, it was striking this morning to see an article on Bloomberg News headlined “Cities are our best hope of surviving climate change”, which notes that cities consume two-thirds of the global energy supply and generate three-quarters of the world’s greenhouse gas emissions. As the headline’s wording suggests, this was a positive article. Top billing went to the globally fast-spreading 15-minute city proposal: the idea that what you need daily, for work, leisure, education and shopping, should all be within a 15-minute cycle ride of your home. The article notes:
“Paris has gone the furthest toward realizing this urban ideal citywide”.
It also notes that Barcelona has freed up entire swathes of its street grid to make pedestrian “superblocks”. That is something I was working on with campaigners to try to get going in central London, around Bloomsbury, back around 2008. Progress in the UK on this essential action for climate, for clean air, for cutting congestion and freeing the streets for people? Zilch.
In the Bloomberg article, what other places get mentioned for city action? Chicago, where
“rooftop vegetation proliferated after a 2004 mandate required private developments to include sustainable elements”.
The article notes:
“Bogotá’s whole public transit system—including its nearly 1,500 buses—is on track to be fully electric by mid-2022”.
I contrast that with figures I came across this morning for the entirety of South Yorkshire, which has 36 electric buses, all in Sheffield.
Back to the Bloomberg article and the good news: Izmir in Turkey gets a mention for heating an entire district using geothermal energy since 1996, with savings of 35% on heating costs for residents. There are so many good examples around the world. Great progress is being made, often led by local and city governments and delivering, in the jargon, real co-benefits, improving the lives of households and reducing poverty and inequality. That is the climate good news. But positive mentions of UK cities in this Bloomberg story? There are none.
When I sat down to think about this speech this morning, I realised with a sinking heart that I would inevitably be hearing that favourite government phrase, “world-leading”. So I have a question, a challenge, if you like, to the Minister: show one significant area where the UK is world-leading in action, not words, not targets, not meaningless “legally binding rules” that are nothing of the sort—for, as the independent Committee on Climate Change points out, we are not on track for the fourth or fifth carbon budgets, not even those target levels below what has been set now—but action on tackling the climate emergency.
Before the Minister brandishes the purely statistical accounting of our territorial carbon emissions, let us note that that figure ignores consumption emissions. The emissions associated with a washing machine made in China but sold and used in the UK are our responsibility. Offshoring emissions is not cutting them—is not climate action.
However, I always try to come back to the positive, so let us look at some positive things that are happening around the UK. Sitting in the other place, oven-ready—a phrase with which the Government used to be so enamoured—is the Climate and Ecology Bill. The last time I looked, it has the support of 118 MPs and Peers, yet the Government are denying the Commons parliamentary time to discuss it. A letter signed by 100 climate experts and environmentalists calls for the Government to back the Bill. Commenting on that, one of the signers, and designers, of the Bill, Professor Haigh, told the Independent that the law would replace “sorely lacking” mechanisms to turn ambition into reality. We have, the professor said,
“a hotchpotch of green initiatives, with no apparent joined-up thinking, while the Earth’s temperature continues to rise”.
But I am being positive. The Scottish Government published a draft public engagement strategy in December for a “net-zero nation”—an excellent model for Westminster to follow. If that seems politically unpalatable, call it something different. I really do not mind. The people of the devolved nations know that they are far ahead of Westminster on climate action, if still far from adequately advanced. That is one more reason why they are moving, at varying rates, in one direction across the range from “indy-curious” to “indy-convinced”. They can see their nations’ Governments delivering when Westminster is not, pushed by Parliaments truly representative of their people.
That is not to say that there are not lots of good things happening in England at the local level. As the noble Lord, Lord Teverson, referred to, after Bristol Council led the way, pushed by the brilliant councillor Carla Denyer, 300 of the 404 district, county, unitary and metropolitan councils have now declared a climate emergency. Eight combined authorities and city regions have done likewise. Some are developing plans on that, but we need integration and joined-up thinking— the Government working co-operatively with local government and not looking down on it.
But, again, I am trying to be positive. Since I focused on cities earlier, I mention just one example of the many thousands of smaller communities up and down the land that are taking action for themselves: the village of Ashton Hayes in Cheshire, a pioneering community of around 1,000 people, adopted the idea of being carbon-neutral long before it was a catchphrase. It has led in renewable energy and energy efficiency. Yet when I visited years ago, while admiring the efforts, I did have to look pointedly at the numbers and level of private car usage. Those leading the charge could only agree with me but, while public transport provision was so poor, people had no alternative. This was not something that a village of 1,000 people could fix.
We are back to the need for integrated policy-making and the provision of resources to bodies at the relevant level, not trickled out in tiny sums through government-controlled bidding processes but shared around the country to allow local decision-making, co-ordination and planning, based on local knowledge and conditions. Democracy would be a really good idea, as noble Baroness, Lady Sheehan, reflected earlier.
To return to my list of positives, some of this would be really simple. One starting point would be within the ability range even of this Government: stop doing the wrong things. Fixing some of our mistakes would be easy; the Government could implement a net-zero test to ensure that all new policies and existing action support the 2050 target and give the Climate Change Committee more powers to hold the Government to account. That would kill stone-dead obviously indefensible government projects such as new roads and expanding airports.
The Government could also simply create the bodies and structures already announced. We were told back on 18 November that the 10-point plan would establish a “task force net zero”. That was 123 days ago. Those were words—literally hot air. Where is the action? As many noble Lords have asked, where is the Cabinet committee on climate change?
Finally, we have a new COP 26 spokesperson—even if we have fallen into having one—but, however brilliant they might be at delivering words and however shiny and new their backdrop, they cannot do anything about delivering action. The climate emergency is a scientific fact. It does not respond to rhetoric or bullying. It cannot be laughed off with a Latin quip. It demands action.
Baroness Altmann (Con) [V]
My Lords, I declare my interests as a member of Peers for the Planet and the Conservative Environment Network. I congratulate the noble Lord, Lord Teverson, on securing this debate and on his powerful and persuasive introduction.
I also congratulate the Government on the work that they have already done to help us achieve net zero: their 10-point plan for a green industrial revolution, their determination to be a leader in the global transition to net zero, their pledge to use the Covid recovery to build green infrastructure and jobs and the £12 billion infrastructure bank project to support private sector and local authority schemes. How are plans progressing for publishing the Government’s net-zero strategy implementation proposals? I was delighted to hear the commitment to bring forward our goals to 2035. However, that brings it into what I consider the short term rather than the longer term, and we do not yet have a road map for reaching that goal.
The noble Lord, Lord Teverson, and all other noble Lords who have spoken mentioned the need for a cross-government approach and for integration across all parts of government. I fully support that. I understand that the Government are already working with the devolved authorities on issues such as carbon pricing and industrial decarbonisation strategies. Could my noble friend the Minister comment on further plans to work with regional and local government on these issues?
The Climate Change Committee points out that local authorities can impact more than one-third of all our emissions, and the devolved Administrations of Scotland and Wales account for one-fifth, so a national and local strategy to integrate policies is clearly needed to avoid conflicts between different parts of policy-making. For example, reducing traffic congestion could conflict with expanding cycle lanes, and a desire to build new homes or expand conductivity could undermine emission reductions. As other noble Lords have said, integrated policy-making on transport, electric vehicle charging networks, home heating efficiency and even carbon trading are urgently required. I therefore support the idea of a Cabinet Minister responsible for integrating all these policies and bringing in expertise across government who understands the impact of policies on emissions, and indeed on biodiversity, as the noble Baroness, Lady Bennett, and the noble Lord, Lord Teverson, stressed, to align policy objectives.
Another clear area where there seems to be a disconnect between one arm of government and the aims of net zero relates to cryptocurrency trading, which has been alluded to by others, and the mining and increasing expansion of bitcoin, for example, into regulated firms. I was delighted that the Government listened to the concerns of this House expressed in the Financial Services Bill and overcame their initial reluctance to agree that the FCA, the PRA and the Pensions Regulator should have regard to net-zero aims when making their rules. That is something this House can be proud of. Financial institutions at the Bank of England now have an expanded remit to reflect environmental sustainability and the net-zero transition.
But how does that fit with increasing penetration of cryptocurrency trading and use in transactions by regulated firms? The carbon emissions involved in mining bitcoin, for example, exceed the entire emissions of a country such as the Netherlands and it adds no discernible benefit to society. Indeed, it might encourage fraudulent trading and facilitate money laundering, as well as enticing people into speculative gambling on something that does not exist. This seems rather like the tulip bulb mania, but without any tulips.
The higher the price of bitcoin, the greater the energy emissions involved in the whole market. If our financial regulators want to control the risks and help to meet net-zero targets this would seem to be relatively low-hanging fruit, but the longer it takes to wake up to these risks, the more embedded and financially risky it becomes to remove trading in currencies such as bitcoin from regulated activities, and the greater the danger to the Paris climate change ambitions. If the Government really aim to make the UK the number one centre for green tech and finance, should they now consider a ban on this type of activity?
It feels to me like the debate on climate change is still classified as a long-term problem, but the climate emergency is already with us and requires short-term action, not just intentions. One of the challenges, of course, is to develop clear data and metrics to measure progress on reducing emissions, and to institute regular reporting and correction mechanisms. However, there are still opportunities for the Government to join up and embed a process into policy-making across departments in the shorter term.
On a related subject, what consideration is being given to devising a cross-government, cross-industry taxation strategy which supports net zero and increases the incentives for emission reduction while subsidising investments that will achieve, or help to achieve, climate goals? For example, finance will be essential for decarbonising the UK’s energy sector, as it is for most economic activities. But as a major global financial centre and with one of the biggest oil and gas sectors in Europe, the UK could play a leading role in attracting private finance into renewables projects and other net- zero technologies.
We also need plans to encourage large companies with assets under threat from climate change or climate policies to plan now for the net-zero transition so that they can protect not just their investors but their workers and other businesses in their supply chain. Again, that is where taxation policy could drive positive change.
The production gap already exists, yet our major oil and gas companies and those in other countries have policies that are not compatible with the Paris Agreement objective of limiting global warming to an increase of 1.5 degrees or 2 degrees. Fossil fuel production is still increasing, which means that either we will miss the carbon budgets or the financing of oil and gas infrastructure in the North Sea will become increasingly risky as those assets are more likely to become stranded, risking the financial stability and viability of companies involved and consequent job losses.
As the host of COP 26 and a country with relatively low economic dependency on fossil fuel production, I hope that the UK will address our own production gap, as well as rethinking the new proposed coal mine. As an example of the disjointed policy which this debate is all about, this is clearly incompatible with the Government’s foreign policy priority, expressed in their integrated review, to lead the world on climate change, and their aims of achieving net zero more rapidly.
I congratulate the Chancellor on announcing the UK’s intention to be the first G20 country to mandate climate disclosures by large companies and financial institutions across our economy by 2025, with many coming into force by 2023 and going beyond the recommendations of the Task Force on Climate-related Financial Disclosures. All of the UK’s principal financial regulators have explicit mandates to consider climate risks. These trail-blazing measures may set an example for other countries to follow, and we can be proud of them, but they are just the first steps. For example, mandatory climate risk disclosure improves the information available to investors and shareholders but does not deliver the investment required for net-zero projects on the ground. It will be important to move rapidly from climate risk disclosure to mandatory climate transition plans, explaining clearly how these will align businesses’ activities with the goals of the Paris Agreement.
What plans are there to utilise the hundreds of billions of pounds of pension assets to support the aims of net-zero infrastructure, housing and other investments across government? Long-term investors are most at risk from climate change. There is a huge amount of money waiting but, so far, the Pensions Regulator seems to have focused on asking defined contribution pension funds to aim to use those assets and all pension schemes to disclose their plans. Once again, that does not deliver on the ground.
Defined benefit pensions have more money than defined contribution and do not have the constraints of daily pricing and rapid access, so I hope that there will be increased joined-up thinking that draws together, for example, the funding for local authority pensions and other long-term investments into net-zero investing, rather than just focusing on the new defined contribution schemes. That would be popular; the Make My Money Matter campaign caught people’s attention because the public increasingly care about how their savings are invested and their environmental impact. I declare an interest as an adviser to Cushon, a pension provider that has introduced pension investment funds that are net zero now, with carbon off-sets designed to deliver a net-zero impact straightaway, rather than waiting more years, as other firms have proposed.
I hope that my noble friend will take the sentiments expressed by noble Lords in this debate, which seek to ensure that policy-making is integrated across government, and is consistent and not constantly changing, and reflect on the support from this Committee for the measures introduced so far and on the proposals for a Cabinet Minister responsible for integrating policy in national, regional and local government.
Lord Lea of Crondall (Non-Afl)
My Lords, a central concern of my remarks will be related to the growing divergence that can be seen on this chart produced last June. The Minister will correct me if I am wrong, and I expect that he will confirm there will be another chart in June 2021. There seems to be a divergence between the target for reduction graph and the actual outcome; one is going down, and the other one has now levelled off. We do not have a Gosplan—even if we did, it would not work—so the question is how we do it. We can add up the numbers on paper but it is more difficult in practice and, as a number of noble Lords have said, there are no longer any low-hanging fruit.
If I specify the coefficient of reduction of greenhouse gases as a coefficient of productivity growth, that is not output as such but what drives the economy forward—and we do not actually want to reduce productivity growth, do we? We want to increase it against the background of global competition and world market share. So how do we square the circle? It will not be done just by virtue signalling and lecturing people at work.
I come from the TUC, which I was with for 35 years. I was a member of the UK delegation at the Earth Summit in Rio in 1992 and on the original committee on sustainable development. I set up that committee in the TUC, and it has done some very useful work. But it is not straightforward, when you get down to brass tacks. I am 100% along the same lines as the noble Lord, Lord Whitty, on the practical side; he was a trade union person in the same era as me. But why is there such a difference of opinion about where we are and where we should be going? There should be no need for a difference of opinion. We have all agreed the target. The Green Party, the Labour Party, the Conservative Party and the Lib Dems and so on have all agreed that is the line that we have to be on—but we are diverging from it. So although we cannot have a Gosplan, we need something that adds up to have a reasonable chance of not only turning back the divergence but getting back on to the line we need to be on.
The former Governor of the Bank of England, Mark Carney, said yesterday that this subject has to be approached in “50 shades of green”—ha ha. He does know a thing about this and the politics of it. It is a way of saying that we cannot be too simplistic, but equally we have to make sure that we have a methodology to see how the greenhouse gas coefficient versus productivity curve can be brought nearer and then in line with the dotted line of aspiration and government policy. It has all been agreed.
I say once again to people on the green side of politics, in the broadest sense: please do not think that there is nothing we agree on, because this is something we have all agreed on. The issue is how to implement it. We are all on the same side and we have to find out what is needed to achieve it. This has to include some mathematics. I do not think that the Minister, given his political background, will be attracted to Gosplan any more than my side is, but what will the methodology be to see how the gap can be reversed and brought back into line? We do not want constant lecturing at each other. That would not work.
Is there some means by which we can get the breakdown everyone has asked for—the engineering industry, local government, you name it—to add up to some figure that will reduce the divergence? We need to be honest with people that that is the object of the exercise: we have to gradually reduce the divergence. I think 100% of people in this country ought to be able to agree that that is what we have to try to do. We cannot shut down the economy, et cetera. It is a difficult period for statistical measurement and finesse with Covid, but it is pretty obvious that that analysis is where we will wind up.
I will give one example from the engineering industry. In the world today, how we can remove plastic is, to some extent, an engineering issue—all those plastic bottles that we drink water from. There are water purification methods. Britain has industries, large and small, that can do water purification with new technology, which we are good at in some fields, to have a world market share in those contraptions you put on an older bottle so that the water is purified as you drink it. There is no doubt that that would save many zillions of tonnes of plastic. I am a bit interested in the industrial policy aspects of this. It might not be Gosplan, but those sorts of companies say that they find it very hard to figure out how to work the Government’s financial system as to what they can apply for in grants and so on.
Can the Minister say that he will make it his mission statement to go round and find how true what I have said is—that people are finding it very difficult to work the government schemes on finance for engineering projects such as this? He would have some degree of authority from No. 10 to do something about it, and I think this is something that everybody could applaud. If people say that the Government have not quite done what they said they would be able to do a year ago, at least the road map and political administrative methodology would be fit for purpose.
Baroness Randerson (LD) [V]
My Lords, I start by thanking my noble friend Lord Teverson for giving us the opportunity today to discuss such an important issue and for his excellent and inspiring speech.
Transport is a vital part of the jigsaw in the attempt to reach net zero. It is responsible for about a third of our CO2 emissions and, most significantly, while other sectors have seen significant reductions in total emissions, those from transport have hardly changed, despite significant advances in technology. The legacy of Covid should be that we can build back better but, frustratingly, so far, despite all the talk of how wonderful it is to be able to work efficiently from home, as people return to the office or to the shops, the fear of the disease has meant that they are slow to return to public transport and have gone back to car travel in a big way. This is a crucial period, when we need central and local government leadership working together.
With local elections coming up in England, and general elections for the devolved Parliaments in Wales and Scotland, this debate provides a very timely opportunity to look at the urgent need for a more effective partnership between the various tiers of government in the UK—because the UK Government cannot do it all. Their favoured model of providing some pump-priming money and holding a competition where local authorities are asked to bid for it is of only limited use. Too often, the money goes to the local authorities that are bigger and most geared up to write a good bid; thus the funding goes to the stronger, rather than to support the weaker ones. And, of course, government criteria are often hazy and the money goes disproportionately to those local authorities whose political faces fit. I fear that the Government look as though they will do the same thing in future with money that is currently part of the devolved Governments’ budgets and that the Government intend to apply the same centralisation process.
The Government have plenty of targets on reducing emissions. Some could be a lot more ambitious but that is not the main problem; it is the lack of stepping stones towards meeting those targets. That is not just my view. The National Audit Office recently reported on the Government’s actions in relation to ultra-low emission vehicles. It pointed out that, despite the Government spending over £1 billion of public money over 10 years to incentivise ultra-low emission vehicles, overall carbon emissions from cars have not reduced. It concluded:
“The lack of an integrated plan with specific milestones for carbon reductions from cars has resulted in a lack of clarity over what value the public money should be delivering … departments have not been able to demonstrate value for money.”
It also concluded that there was a need for a clearer plan and a more targeted approach, not just based on EV sales.
It is not just the lack of specific milestones: sometimes the Government seem to be marching entirely in the wrong direction. This self-harm can be inexplicable. For instance, in the last few months, this Government—who say that they are proud to host COP 26 this year—have increased rail fares above inflation while continuing to freeze fuel duty, hence encouraging car travel and deterring rail travel. What did rail passengers do wrong? Why are they worth less than the car drivers? At the same time, the Government have cut grants to encourage purchases of EVs, just when they are beginning to gather momentum and long before the strategic network of charging points is strong enough for EV owners to still be regarded as anything other than pioneers.
When two or three EV owners gather together—usually in the queue for the charging point—they swap horror stories of broken equipment, sparsity of charge points and so on. I have owned an EV for four years, and ever since then I have taken part in debates here, in APPGs, in round tables and so on. The complaints and problems have not changed. The Government have legislative powers to ensure that there is standardisation of equipment and that existing petrol stations modernise and cater for EVs too. They have powers to ensure easier payment systems and so on, but they have not used those powers. To make progress, they need to work more closely with local authorities so that they all come up to the standard of the best. My noble friend Lord Newby, earlier today, was praising the number and quality of charge points in north Norfolk, where council car parks are very well set up to attract EV drivers. He contrasted this with the low numbers of charging points on motorways, where so many are out of service. This problem has existed for years: motorways are the Government’s responsibility, so why has there not been any central government action?
Sometimes government transport policy seems to march in exactly the opposite direction from net zero. Take their policy on their roads plan for England—the second roads investment strategy—worth £27 billion. This is currently being challenged in the courts by the Transport Action Network. The Government have said that the additional CO emissions from this road-building programme would be negligible. Academics giving evidence in court say that the real impact will be 100 times greater, because the Government have not taken into account new traffic, the building process or the true long-term impact. If we cannot trust the Government to do the sums honestly on a subject such as the climate crisis, what can we trust them on?
Historically, most of our air quality regulations owe their origins to the EU, and we have had a poor record as a nation for achieving them. In the post-Brexit world, the Government have to decide to be much more rigorous with themselves and to take real leadership on climate change issues. That means much more than proudly announcing new targets for a time so far ahead that it always seems easy to put it off until tomorrow.
Central government must set the structure within which local authorities operate. Two years ago, the Liberal Democrats produced a strategy for improving air quality, and some of the points from that help to explain what I mean. We need government leadership via a new clean air Act and a statutory independent air quality agency. We need obligations on local authorities, including ones to test and monitor emissions. Central government must invest in research. It should structure vehicle taxation and fuel taxation to discourage use of the most polluting vehicles. Will the Minister tell us why it currently does not cost more in tax to drive a highly polluting SUV than to drive a low-emission vehicle?
The Local Government Association asks for an overarching transport settlement, with control by local authorities of all transport funding, to create unified sustainable travel plans suitable for the characteristics of their areas. It wants a guarantee of a five-year infrastructure budget, because you need long-term investment and planning to make major changes to transport networks.
Our Liberal Democrat strategy had a host of actions which, to be most effective, should lie with local authorities—everything from enforcing legislation needed to make it illegal to idle your car outside schools, to creating and enforcing local taxi licensing regulations which encourage the switch to low-emission vehicles, to an obligation to encourage active travel and provide safe routes to school.
Most prominent among local authority powers should be the creation of an efficient public transport network, with green buses, trams and electrified railways. The Government have recently announced an ambitious bus strategy, and last year they announced an ambitious plan to purchase hundreds of zero-carbon buses made in UK. But time has ticked away and there has been relatively little progress on this so far. To deliver on these promises, the Government have to fill in the detail very soon. They need to trust local authorities and work properly with them.
Railway building and longer-distance buses need co-operation on a wider regional basis. One of the longest established of these wider regional organisations is Transport for the North, a legacy of George Osborne. But here we see a pattern repeated so often by the UK Government: to establish a locally based organisation and then to undermine it when it does not do exactly what central government wants. Transport for the North lost a lot of its funding and its project on smart ticketing, which has been taken back into a new centralised government committee.
The Government have to learn that to reach zero carbon in the UK, we have to reach zero carbon everywhere in the UK: north and south; town and country; whichever political party runs the council; and in Wales, Scotland and Northern Ireland as well as England. Solutions have to be tapered to the local circumstances using local authority and devolved government knowledge. To do this, central government must trust devolved Administrations and local authorities with long-term budgets and give them the advice, skills and support they need to deliver.
Lord Bhatia (Non-Afl) [V]
My Lords, a whole-system approach enables decision-makers to understand the complex challenges posed by the net zero target and to devise solutions and innovations that are more likely to succeed. It is a discovery process combining structured approaches to understanding and managing physical factors—such as infrastructure and novel and advanced technologies—with broader perspectives on economic, behavioural and other issues, taking into account complex interactions. This systematic approach will help to manage the associated uncertainties, including technical and behavioural factors, and will require the use of both quantitative and qualitative approaches, including systems engineering.
Achieving net zero by 2050 is a system transformation challenge. A clear understanding of the entirety—[Inaudible]—an interconnected programme of work, driven by data and analytics, with responsibility aligned behind a single goal. A number of steps have to be taken to develop the analytical capabilities, flow of information and reporting needed to inform decisions, as follows.
First, the Government should require all regulators to develop an explicit first-order objective to support the transition to net zero by 2050. Secondly, to enable transparency and accountability across government, the Government should undertake and publish carbon emissions assessments for all public sector policies, including major infrastructure projects or investments.
Thirdly, the Government should bring together public sector funders to develop a bold, coherent, mission-driven programme of public sector research and innovation investment to achieve net zero. This body should have the level of authority to influence spending decisions across departments, influence the strategic direction of UKRI programmes and set out opportunities for leveraging business activity.
Fourthly, to support the development of decarbonisation technology and infrastructure, the Government should consider establishing a national infrastructure investment plan, with an explicit mandate to support the transition to net zero, to help manage risk, partner with the private sector and bring down the cost of finance. Fifthly, to help households, businesses and public service providers make the investment needed to deliver the transition to net zero, the Government should work with private sector financial institutions to establish frameworks and instruments to give them access to the required finance and support.
Sixthly, the Government should announce a clear, credible domestic plan for achieving net zero, to set an example that could help inspire international action and commitment under their presidency of COP 26 in Glasgow. They should build into their work the objective of fostering international action and international collaborations on trade, investment, finance, technology, capacity building and R&D.
The Deputy Chairman of Committees (Baroness Barker) (LD)
My Lords, there is a Division in the Chamber. The proceedings will be adjourned for five minutes.
The Deputy Chairman of Committees (Baroness Barker) (LD)
My Lords, we are ready to resume our debate. We return to the noble Lord, Lord Bhatia.
Lord Bhatia (Non-Afl) [V]
My Lords, getting to net zero will be a big challenge but will create millions of new jobs and improve the UK economy, which suffered huge job losses due to Covid-19.
Lord Shipley (LD) [V]
My Lords, I declare that I am a vice-president of the Local Government Association. This very timely debate in the name of my noble friend Lord Teverson is about integration of policy-making in national and local government to achieve net-zero carbon emissions in the UK.
First, now the Government have resolved to reduce our carbon emissions even more quickly, the means of delivering their targets will require a genuine partnership between national and local government. Central government simply cannot run England out of a Whitehall which has so many silos. Effective delivery will require joined-up, local leadership and co-ordination.
Nevertheless, I welcome the Government’s announcement this week. It is the right thing to do, and it explains to some degree the absence of much detail in the Budget, which at the time seemed a missed opportunity to put a green recovery and a sustainable economy at the heart of post-Covid thinking. If the Government are serious about climate change, they need to produce a clear action plan for the next decade.
We need much more new investment in green industries. For that reason, I welcome the new infrastructure bank, with its commitment to climate action as a core investment priority, the requirement on the Bank of England to have the further aim of creating a sustainable economy aligned with the objective of net zero, and the proposals for green gilts and green savings bonds. Local councils in particular will welcome these. Some have already issued green bonds to local people to help increase solar installations and biodiversity improvements, so I hope we can build on that willingness to take practical action.
However, it is not always going to be easy, as the Government found out with the green homes grant scheme, about which we have heard a lot this afternoon. It was a disaster, to put it mildly. It was complex to understand, had to contend with a lack of trained workers to implement, which was not unexpected, and suffered from far too short a planned timeframe to deliver. Despite being announced last year to such a fanfare, it reached only 8% of its target, yet domestic homes contribute around a fifth of our carbon dioxide emissions. So what plans are there for its replacement, as we have too many homes that are poorly insulated? Will there be something else in its place? It would help in achieving our objectives and could remediate poor-quality housing, particularly in the private rented sector. There is also a huge opportunity for jobs generation, as the Government must realise, having promised 100,000 new jobs are recently as last September when the flagship scheme rolled out.
It has been claimed that a quarter of homes in the UK are in places with dangerous levels of pollution and that 8 million homes exceed at least one of the World Health Organization’s recommended limits for particulate matter or nitrogen dioxide. Too often, local residents do not know what the levels of pollution are near them. I suggest that councils need to publish much more data and need to have action plans to eliminate dangerous levels where those are found.
Three-quarters of local councils have now declared a climate emergency, and most are taking very seriously their responsibilities to reach carbon neutrality. That is to be commended. But in the year when our country hosts COP 26, we are in the strange position that not many local authorities have withdrawn their investments from fossil fuel companies. Many of those investments are in pension funds—and I declare at this point that I have a small pension from the Tyne & Wear Pension Fund.
Pension funds have a legal duty to maximise income. In 2015, there was a significant divestment campaign, but it was said that non-financial issues could be taken into account only if there was considered to be no financial disadvantage or material risk of financial disadvantage from doing so. In other words, income for the pension fund was the primary concern. But today, six years later, it seems to be the case that local authority pension funds can take into account broader issues in so far as those issues may become a greater risk to the income of the fund in future—so climate change and the direction of travel of policy are important considerations which may impact on the value of a pension fund. Thus, green investment funds can now be seen as safer investments than they were. That should be the direction of travel for local authorities. It needs discussion with the Government, but there should be a date agreed publicly for local authority disinvestment from fossil fuels.
In this context, I draw the Minister’s attention to a recent University of Oxford report which says that, as the world generally moves to cleaner energy, the cost of investing in renewable energy sources has dropped as they prove to be safer investments than previously thought. The Government have to lead thinking here; they must force the pace to make sure that public investment ties in with public policy objectives.
My noble friend Lady Randerson has said a great deal about public transport, but nevertheless I want to add something about it. I share her concerns about the budget cuts to Transport for the North—for example, in smart ticketing, which has been available in London for many years but is not available yet in the north of England. Currently, 10% of all journeys in the UK are made by rail but only 1.4% of emissions come from rail.
Secondly, the Government have announced plans for major investment in buses, as we have heard, which is welcome. However, they have just spent the last year telling passengers—understandably—to keep safe and avoid public transport, so people have either stayed at home or have gone by car. Now the Government must say the opposite as soon as they can, because compared to pre-pandemic levels, bus usage is now at only 55% of those levels, rail and tube usage is only at around 30%, but road traffic is back to 90% of pre-pandemic levels. This means that we could end up with a car-based recovery. If so, that would represent a massive failure of policy. Instead, green investment is essential in the transport fleet. For example, only 2% of the bus fleet is zero emission and there are 32,000 buses. My noble friend Lord Teverson talked about the need for a route map for net zero, and here is a good example of why one is necessary. What is the Government’s plan for greening our transport system over the next decade?
In conclusion, it is no longer enough to get other countries to plant trees to solve the climate crisis. As my noble friend said, we face an emergency and what counts in dealing with it is action. His proposal—supported by many others—for a Cabinet Minister for the climate emergency and, crucially, for a senior Minister in the Treasury, are both essential recommendations which should command broad support. If that happened, it would give local authorities a single route into Whitehall.
Lord Oates (LD)
My Lords, I am pleased to have the opportunity to take part in this debate and to have heard the many insightful contributions from across the Grand Committee. I pay particular tribute to my noble friend Lord Teverson, who opened the debate so eloquently and powerfully. As my noble friend told the Grand Committee, joined-up thinking across Whitehall departments is critical and integrated planning with local government is essential if we are to meet our net-zero target. He also reminded us that while long-term targets unnecessary and welcome, they are meaningless unless they are backed up with credible action plans to deliver them.
Back in October, at Question Time, the Minister, the noble Lord, Lord Callanan, agreed that the Government’s net-zero target needed to be backed up by a credible short-term action plan for achieving it. When I asked him when we could expect one, he said:
“we will be setting this out in due course”.—[Official Report, 6/10/20; col. 517.]
I hope that in his response he will update us on when we can expect that plan, because we do not have time to waste.
In so many areas, the lack of a plan or even of any joined-up thinking is painfully evident: whether on decarbonising our buildings, transforming our transport system, protecting local ecology, tackling air pollution, reducing energy consumption or preparing the grid for a net-zero future. Just as the Government failed at the beginning of the pandemic to co-ordinate effectively across government or to understand that local government was a vital partner for effective public health interventions, so they are failing in the same way on climate change, where co-ordination in government is crucial and where local authorities have an essential role to play on the ground. The Government’s Ten Point Plan for a Green Industrial Revolution failed to recognise that important role, mentioning local government just once.
We have also heard from many noble Lords about the silo approach that has been taken in government, which is a big concern to many of us. We have heard about incidences where the Department for Transport and BEIS pursue conflicting goals on decarbonising transport; the Department for Education throws obstacles in the way of the deployment of solar in schools; Defra, as my noble friend Lord Teverson reminds us, seems like it is on another planet from BEIS; MHCLG seems like it is on a different planet from all of us; and all the while, the Treasury continues to exert a negative influence over climate policy as a whole.
I was taken by the suggestion of the noble Lord, Lord Knight of Weymouth, that the Chancellor should be made responsible for meeting our climate targets. Certainly, without Treasury help to drive policy, we cannot hope to be successful. Instead of fostering co-operation and integrated approaches with local government, however, more often than not the Government seem determined to frustrate the efforts that local authorities are making.
Planning is a key example where the Government’s policy stance is completely at odds with their net-zero objectives. First, they scrapped zero-carbon home standards, which the coalition had established. As a result, 800,000 homes have been built since then which will now have to be retrofitted, at much greater expense than if they been built to a decent standard in the first place. Now the Government aim to take planning powers away from local authorities—the exact opposite of what they should be doing, which is to enhance the local authorities’ ability to tackle climate change through the planning system, and to introduce a requirement that all planning decisions must have regard not just to the 2050 net-zero target but to the intermediate nationally defined target of a 68% reduction by 2030 and the sixth carbon budget’s 78% reduction target by 2035. How can we believe that the Government are serious about these targets when their policies point in the opposite direction?
Then we have decarbonisation of our housing stock. This is really where the rubber hits the road, because the changes required will reach into almost every home in the country and impact people in a way that is far more profound than the decarbonisation of the economy that has taken place to date. We have zero chance of success if local authorities are not intimately involved. My noble friend Lord Stunell gave a comprehensive and powerful overview of some of the challenges in delivering in this area. They involve overcoming consumer resistance, developing a local skills base, co-ordinating decarbonised heating schemes and providing information and reassurance to the public. That cannot be done from Whitehall alone, and any Government who try will fail, as the green homes grant has shown.
I will not repeat the points that have already been made about the shambles of the green homes grant, but I remind the Minister that, many months ago, I suggested that he consult my noble friend Lord Stunell so that the Government could avoid making the mistakes that they subsequently made. I suspect that the Minister, having heard my noble friend’s forensic speech on this issue, wishes that he had taken up my suggestion. However, to be fair to the Minister, I have always got the idea that he agreed with many of the criticisms that we made about the design of the scheme, and I suspect that it was the Treasury, as usual, that got in the way of sensible policy. I will take his nod as assent.
If we are to succeed in this area, local authorities need to be given targets and resources for driving this work forward. They are the only agents on the ground with the ability to co-ordinate change on this scale and the trust of the public to do it. As my noble friend said, they have proved that they can do it, but it will not happen unless the Government provide the right resources and incentives, and long-term funding that allows local governments to plan and work with local businesses to develop the skills base that would be required to deliver on decarbonising 28 million homes.
Our electricity grid will also face huge challenges as we continue to decarbonise our economy. We will have to hugely strengthen the grid if we are to sustain a switch from predominantly petrol vehicles to EVs and from fossil fuel to electricity in home heating. Yet the constraints on investment in the grid as a result of the Ofgem settlement make it seem not up to the task. Again, we seem to be failing to join up the various government agencies and departments and the private sector in a co-ordinated way. Can the Minister confirm that he believes that the level of investment is sufficient for what we need to do?
My noble friend Lady Randerson drew our attention to a wide range of contradictions between government transport policy and our net-zero policy, whether in the Government’s roads plan or in above-inflation rail fare rises while fuel duty is frozen. We heard yesterday that international aviation and shipping will be included in the 78% target for reducing emissions, although just last month the Government announced plans to reduce air passenger duty. There just seems to be no joined-up thinking.
The noble Lord, Lord Whitty, rightly drew attention to the need for co-ordination in bringing renewable electricity onshore. The current situation is a mess. It is another good example of the failure of BEIS and MHCLG to co-ordinate effectively with each other and with local government. This must be fixed.
My noble friend Lady Sheehan highlighted the insanity of the maximising economic recovery policy in the North Sea sitting in the same department that is supposed to be responsible for our net-zero policy. That makes absolutely no sense.
We saw a similar lack of joined-up thinking in the Treasury’s approach to the Financial Services Bill, which the noble Baroness, Lady Hayman, spoke about. Despite the fact that the way the financial services industry allocates capital will be critical to whether we will be able to tackle the climate crisis, there was no reference in the Bill to climate change, and it was only thanks to the noble Baroness’s leadership that a cross-party group managed to persuade the Government that they had to amend the Bill so that regulators had to have regard to the net-zero target. Sadly, we were not successful in pressing an amendment that would have required the regulators to review the risk ratings applied under the capital requirements regulation to lend into fossil fuel activities, but this is another area where we will need a joined-up approach at national and international levels.
This has been an important and informative debate. We have learned much from noble Lords about the gap between commitments and delivery. The noble Lord, Lord Knight of Weymouth, made the point that the Prime Minister often seems keen on making big announcements, but the noble Lord asked—I think rhetorically—whether the Government actually have a delivery plan for net zero. The answer, sadly, is no.
I have a bigger worry about the Prime Minister’s approach: he is very happy to make categorical commitments one day and to betray them the next. We saw that on the 0.7% commitment and the promises made to Northern Ireland over Brexit. I have a real fear that, after COP 26, we may well see it on climate change. I hope it will not prove to be the case and that cynicism has momentarily got the better of me. However, even if the Prime Minister does not plan to abandon these targets, without a credible plan to meet them the effect will be the same.
When I spoke in the debate on the energy White Paper, the Minister was, dare I say it, a bit grouchy that I was not as positive as he would have liked. I therefore draw my remarks to a close by welcoming the leadership shown by the Government in committing us to a nationally determined contribution of a 68% reduction in emissions under the Paris Agreement by 2030 and their commitment, announced yesterday, to adopt the recommendation of the Climate Change Committee’s sixth carbon budget to reduce emissions by 78% by 2035.
There are many challenges but, as other noble Lords have pointed out, there are many opportunities for our economy as well, if we have a clear action plan from the Government. I finish by quoting an Arab proverb, which warns: “Commitments are clouds. Implementation is rain.” The earth is crying out for the rain.
Lord Grantchester (Lab)
This has been a wide-ranging debate, and I am grateful to the noble Lord, Lord Teverson, for initiating such a thoughtful consideration of a key aspect of achieving urgent coherency on carbon emission reductions. I thank all noble Lords for all their contributions, all with clear challenges for improvements.
Universal throughout the debate was the fact that a credible, job-rich green recovery requires better co-ordinated action across all levels of government, harnessing investment and regulation and working across public/private interfaces to deliver system-wide change across all parts of the UK. Labour agrees, and believes that together we can harness the opportunities for green growth, but only if the Government, as the lead, take the right decisions right now. All speakers asked, in their own ways, whether the Government have a credible delivery plan. The noble Lord, Lord Redesdale, clarified how difficult this is even for one private organisation.
With the pandemic shock felt throughout the world, global emissions fell by a record 7% last year. However, by the end of the year, emissions were already rebounding and this year are forecast to jump by 5%, this being the second biggest annual rise ever, second only to the 2010 rise of 6% after the financial crisis. Emissions need to be cut by 45% this decade. Clear and imminent action demands quicker response times if we are going to achieve necessary emission reductions. The UK already has a target of 68% reductions by 2030. Ahead of COP 26, the Government need to set a nationally determined target for the UK. Announcing the target further ahead, such as 78% by 2035, while welcome, nevertheless does not impart the urgency that more must be done sooner. This is targets without delivery and rhetoric without achievement; there has to be ambition meeting reality, and the Government need to treat the climate emergency with urgency.
The UK is not yet on track to meet even the fifth carbon budget; instead, we are veering ever further off track, even before any meaningful return of international aviation. With the success of the NHS rolling out the vaccine, the UK is now in a position to build towards recovery with investments right now in the jobs, infrastructure and skills needed for the future. The whole country is calling for the Government to confront the combined challenges of the pandemic, unemployment and the climate crisis by accelerating investment in clean projects such as energy efficiency, especially in housing, flood prevention and climate mitigation measures, offshore wind and renewables, and cycling and walking infrastructure, as well as the electric vehicle charging network. This investment programme will lay the groundwork for secondary markets when based on national supply chains, thereby securing regional employment opportunities in every part of the UK with procurement linked to upskilling and education.
I am grateful to my noble friend Lord Knight for starting with schools and arguing for embedding a zero-carbon mindset for the future. Labour calls for a national retraining strategy as part of the green recovery and pathway to net zero; this would boost apprenticeships and give people the necessary skills by supporting workplace learning and other forms of education and training, which can lead to better access to work. This would reach across the local providers and co-ordinating institutions, including local authorities, further education colleges, local enterprise partnerships and business leader groups. It also needs to be coupled with increased ambitions in bus and rail to develop better mobility plans, together with powers for local and mayoral authorities and devolved Administrations to implement innovative schemes that match local needs.
Many speakers have addressed the process of engagement between central and local government to enable councils to fulfil their role to translate a national framework into transformative local plans to deliver on net zero and their local communities. Local government is well placed to take on this role and lead net zero agendas in local areas. Government must ensure that councils are properly resourced to be able to do this, considering necessary finance to set multiannual growth plans. In December 2020, the Climate Change Committee set out a clear agenda in its report, Local Authorities and the Sixth Carbon Budget, identifying that more than half the emission reductions needed will rely on people and businesses taking up low-carbon solutions, with decisions made at a local and individual level. These decisions will depend on central government having supportive mechanisms in place.
Local authorities have powers and influence over roughly one-third of existing emissions already in their area; they can meet central government policies through local knowledge and networks. The Government have responded with a scattergun 10-point plan, listing 10 strategies but lacking a more comprehensive approach. The Government need to move with pace and bring forward more detailed sector strategies in addition to the energy White Paper now released.
On energy efficiency, the Government have already abandoned the green homes grant scheme and the noble Baroness, Lady Sheehan, was most concerned at the cancellation with regard to housing. The heat and building strategy is urgently needed to provide a long-term approach with new measures.
The noble Lord, Lord Stunell, concentrated his remarks on housing and the built environment. The Government have recognised the need for co-ordination across departments, with BEIS taking overall responsibility. It is to set up two ministerial Cabinet committees—one on the climate action strategy and the other on policy implementation. The National Audit Office commented that that approach may show “collective ownership” but argues that the split gives rise to the risk that goals could have insufficient priority without a single central body with overall responsibility and levers to achieve change.
The scattergun 10-point plan mentions in its introduction the net zero task force as putting a systems approach at the heart of government thinking. Yet, there is no further mention of this task force. Can the Minister tell the Committee what has happened to it, what is it and could it be the driving force to provide that central cross-government plan that the National Audit Office also identified as missing from the Government’s muddled approach?
Decision-makers need to understand how different policies interact and influence the progress of the whole economy towards net zero. Does the Minister recognise that stronger oversight across departments and institutions is urgent, with strong governance and leadership structures? Will the Government appoint a Minister with sole responsibility for delivering net zero, emphasising delivery of all the milestones along the pathway? As my noble friend Lord Whitty asked, as did the noble Baronesses, Lady Sheehan and Lady Altmann, do the Government recognise the importance of that being a Cabinet post?
The Government need to avoid the embarrassment of agreeing and implementing fossil fuel developments such as the new coal mine in Cumbria. Will the Government now introduce a new net zero test for all policies and decisions to avoid mixed messages in the future? The challenge was mentioned by the noble Baroness, Lady Hayman. This new net zero test could provide the necessary consistent, predictable and stable policy environments. Complementary to this test, the Treasury needs to finance its net zero review. Will the Minister say how the Government envisage the final report to be produced? Will it inform and cement this needed cross-departmental net zero strategy for the net zero task force that I have identified? The noble Baroness, Lady Altmann, also asked about a net zero taxation policy and identified that pensions could play a vital part in leading investments.
For all the Government’s rhetoric for the future, does the Minister’s department realise that it still needs to deal with the identified shortfall in meeting the fourth and fifth carbon budgets? The Government finally announced in their statement on the COP 26 NDC that international aviation and shipping will be brought into consideration. Given the diminishing time before the conference, can the Minister outline plans on how that will work and translate across airports and fleets throughout the UK? Decarbonising transport gives rise to co-ordination across regions, boundaries and authorities, given that different places have widely different options and opportunities. Transport for the North has already begun to cut through the bureaucracy and provide better solutions across the challenging terrain and economies of the north. As the noble Baroness, Lady Randerson, commented, it is regrettable that it has not been supported adequately by central government. The stability of delivery organisations is vital to provide certainty in the planning system.
The scope of the issues covered by this debate are enormous, as local government covers all areas of the economy, including housing and energy efficiency, which I have already mentioned in terms of the green homes grant. The noble Baroness, Lady Bennett, mentioned household waste and plastics, emphasising how widespread the challenge is in everyday life.
The devolved Administrations have been identified by the Climate Change Committee as accounting for 20% of emissions and having an integral role to play. Powers are fully or partially devolved in most key areas, yet integration of policy delivery is also vital, as can easily be identified from thinking about plans to phase out petrol and diesel car sales.
Similarly, cross-authority working has already taken place in areas such as the north-west, where Cheshire and Warrington, working with Manchester and Liverpool, have initiated the Net Zero North West project to produce a decarbonisation plan for the region. Investment opportunities have been identified, such as biorefining for waste, CCUS, wave power, HyNet and nuclear research at Urenco, all taking place along the Atlantic Gateway, which is at the forefront of the green industrial revolution as a renewable-powered “super place”. Manchester has also set up a low-carbon hydrogen hub across multiple agencies and organisations, with the potential to set the standard for decarbonised energy generation across the north-west.
The final challenge is for the Government to invest in widespread public communications alongside regulatory and policy change. Will the Minister say in his remarks how the Government might take forward the experience of Climate Assembly UK to expand engagement with the public and provide coherent dialogue on this important subject?
The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)
First, I join others in congratulating the noble Lord, Lord Teverson, on securing this debate this afternoon. We have had some excellent contributions from all parts of the House, highlighting what is one of the most important issues of our time. Of course, while we presently find ourselves in the middle of a health pandemic which has to be our top priority, we also need to give this issue all the attention that it so dearly warrants. The Government absolutely accept and are determined that the UK will play its part in upholding the Paris Agreement and driving down our greenhouse gas emissions. Despite the considerable challenges we face, we can leverage our strengths to deliver a better and greener economy and go further and faster to accelerate the transition to net zero greenhouse gas emissions by 2050.
We need look only at what has happened with coal and wind in the last few decades, or the political consensus that has formed around reducing our emissions, to see that this is something that the whole nation is embracing. We were the first major economy in the world to set a legally binding target to reach net zero across our economy by 2050. As many noble Lords have pointed out, today marks another important step forward as we lay legislation for the UK’s sixth carbon budget, proposing a target which would reduce greenhouse gas emissions by 78% by 2035 compared to 1990 levels.
To respond directly to the challenge from the noble Baroness, Lady Bennett of Manor Castle, on where the UK is leading on action, I am sure she has noticed that we are achieving extremely rapid progress on decarbonisation. We have shown that it is possible alongside a thriving economy. Our emissions are down by almost 44% across the past 30 years, and our economy has grown by 78% in the same period.
Under the Climate Change Act 2008, we have made significant progress in meeting our climate targets. We confidently met our first two carbon budgets and we are projected to meet the third out to 2022. We exceeded the required emissions reduction in the first carbon budget by 1.2% and in the second by nearly 14%. Now is the time to double down and decrease our emissions further and faster.
To do this, the Prime Minister has set out his 10-point plan for the UK to lead the world into a new green industrial revolution. This innovative programme sets out ambitious policies backed by £12 billion of government investment. The plan will support up to 250,000 highly skilled green jobs across the UK, accelerate our path to achieving net zero by 2050 and lay the foundations for building back greener.
The 10-point plan will also help to develop the cutting-edge technologies that will be needed to drive down emissions in industry across the UK, such as through our significant investment into hydrogen and carbon capture technologies through our £1 billion Net Zero Innovation Portfolio. This will provide support to sectors which are some of the toughest to decarbonise. The Government recognise the significant advantages that the net-zero transition can bring in addition to the essential benefit of ending our contribution to global warming.
In response to my noble friend Lady Altmann and the noble Lord, Lord Oates, I can say that ahead of COP 26 we will bring forward an ambitious net-zero strategy to cut emissions and create new jobs and industries across the whole country. This will go further and faster towards building a stronger, more resilient future and protecting our planet for this generation and those to come. It will build on today’s announcement on the level of carbon budget 6 and ambitious plans across key sectors of the economy, including the energy White Paper, the transport decarbonisation plan and the heat and buildings strategy. The strategy will set out more clearly our plans and proposals for delivering the historic commitments that we have made.
The noble Lords, Lord Teverson, Lord Shipley and Lord Oates, and my noble friend Lady Altmann, all drew attention to the importance of government working closely with local government to help deliver net zero. It is fair to point out that a significant amount of support has already been made available to councils to act on climate change, from heat networks to cycle paths to flood defences. Councils are uniquely positioned to align local needs, local opportunities and local resources to deliver strategic intervention at all scales.
For those who recognise the urgency of the climate crisis, a great deal of funding is available. In the current financial year, the Government have provided several targeted funding schemes, including the £1 billion public sector decarbonisation fund. BEIS and the Government more widely also work with local authorities across a broad range of net-zero policies. For many of these policies, such as heat networks, EV charging and retrofit, local authorities are some of our key delivery partners. As part of developing these projects, BEIS will consult stakeholders either formally or informally, and ideally both. Local authorities and community groups are important stakeholders and, as such, we have a local energy contact group specifically set up to discuss policy with them. Furthermore, the BEIS local energy programme, set up in 2017, provides capacity and capability support to local authorities through the five local energy hubs.
In his introduction, the noble Lord, Lord Teverson, asked whether the Government would consider a road map for working with local authorities towards net zero. The net-zero strategy will indeed look at this issue further. It will specifically include a focus on place-based approaches and we will continue to stay closely engaged with local partners through forums such as the ADEPT Energy Working Group and the Core Cities sustainability sub-group, and of course the LGA itself, as we develop this strategy.
Further on local authorities, my noble friend Lady Altmann and the noble Lord, Lord Shipley, spoke about plans to decarbonise local authority pension fund assets. The Ministry of Housing, Communities and Local Government will consult later this year on requiring the Local Government Pension Scheme fund to manage and to report on climate risks. On private sector pensions, Parliament has now approved the Pension Schemes Act to allow us to require more effective governance of climate risk and disclosure in line with the task force on climate-related financial disclosures.
The noble Lord, Lord Whitty, asked about plans for integrating policy across Whitehall. He was right to point out that it is a considerable challenge; I think the noble Lord, Lord Oates, also highlighted some of the difficulties that we face in working with some other government departments. The Government aim to take a whole-systems approach to reaching net zero by 2050. This means considering policy areas and economic sectors as part of an interconnected system where changes to one area directly or indirectly impact others.
The National Audit Office has acknowledged that there has been significant progress on net-zero governance and that this reflects the high priority the Government give to the issue. That includes two Cabinet committees dedicated to climate change—one focused on strategy, chaired by the Prime Minister, and the other on implementation, chaired by the president of COP 26.
My noble friend Lord Caithness, and the noble Lords, Lord Grantchester and Lord Redesdale, all asked whether there should be a dedicated Minister for the climate and biodiversity. It is not unusual for government agendas to span many departments. The answer is rarely to move it all into the Cabinet Office or to make all departments have similar responsibilities. The Prime Minister has shown his commitment to net zero by taking the chair of the CAS. The Cabinet committees hold Secretaries of State to collective responsibility for delivery. The focus on net zero is borne out by results of government action, including of course the 10-point plan.
My noble friend Lord Caithness asked how often these committees have met. I am afraid I can tell my noble friend only that Cabinet committees meet as and when required. He will be aware from his time that there is a long-standing convention that the frequency, attendance list and minutes of Cabinet and its committees are not made public. The release of that information could undermine the principle of collective agreement and the ability of Ministers to openly debate policy in a confidential manner.
The noble Lords, Lord Teverson and Lord Grantchester, and the noble Baroness, Lady Hayman, all asked for an update on the net-zero task force announced through the 10-point plan. I can tell noble Lords that a further announcement will be made in due course.
The noble Baroness, Lady Sheehan, and the noble Lords, Lord Stunell and Lord Shipley, asked, correctly, about plans to decarbonise the built environment in the light of developments that noble Lords will be aware of regarding the green homes grant voucher scheme. I can tell the Committee that we are firmly committed to decarbonising the UK’s homes and buildings, and that emissions from public buildings have come down by 42% since 1990. As has been stated, meeting our net-zero target will require virtually all heated buildings to be decarbonised.
The Deputy Chairman of Committees (Baroness Barker) (LD)
My Lords, there is a Division in the Chamber. The Committee will adjourn for five minutes.
The Deputy Chairman of Committees (Baroness Barker) (LD)
My Lords, the Grand Committee is resumed. Lord Callanan?
Lord Callanan (Con)
The Government are planning to publish a heat and buildings strategy in due course. This will set out the immediate actions that we will take to reduce emissions from buildings. These actions will include the deployment of energy-efficiency measures and low-carbon heating, as part of an ambitious programme of work required to enable key strategic decisions on how we achieve the mass transition to low-carbon heat, setting us on a path to decarbonising all homes and buildings.
The green homes grant voucher scheme, referred to by many noble Lords, made significant strides—although not enough—with over 49,000 vouchers worth £208 million issued. To ensure that we continue to deliver on our net-zero ambitions, the Government have expanded their commitment to the green homes grant local authority delivery scheme and the social housing decarbonisation fund, with an extra £300 million of additional funding delivered across these schemes in 2021-22. That will bring the total spending on energy- efficiency measures to £1.3 billion, exceeding the Government’s manifesto commitment of £1 billion.
The noble Lord, Lord Shipley, asked about the decarbonising of the transport system. The Government recognise the urgency of stepping up the pace of progress to ensure that the transport sector plays its part in supporting the delivery of the UK’s emissions reduction targets. We have recently announced that the UK is embarking on a comprehensive transport decarbonisation plan, which will be a bold and ambitious programme of co-ordinated action needed to end the UK’s transport greenhouse gas emissions by 2050 and at the same time ensure that the transport sector plays its part in delivering our legally binding carbon budgets. The plan will think in terms not only of modes of transport but of technology and places. Part 1 of this plan was published in March 2020, with part 2, containing policies and proposals, expected shortly.
The noble Lord, Lord Knight of Weymouth, described an aversion to green spending. The outcome of the 2020 spending review counters this impression: in order to ensure that net zero remained a priority within a one-year spending review, the Treasury made exceptions on measures that are critical to meeting net zero by providing some multiyear settlements. SR20 committed £12 billion to green measures, boosting the UK’s global leadership on green infrastructure and technologies, ahead of COP 26 next year.
The noble Baroness, Lady Sheehan, asked about the alignment between revenue and net zero. Government cannot simply spend its way to net zero, not only because bearing the cost alone is simply unaffordable for current and future taxpayers but because spending is often not the most effective way to reduce emissions. It also risks crowding out private investment in the green industries of tomorrow: for example, while the 10-point plan will mobilise £12 billion of government funding directly, it will potentially drive three times as much from the private sector to create and support up to 250,000 green jobs.
The noble Lord, Lord Grantchester, asked about the Treasury’s net-zero review. The Government have announced that the review report will be published in spring this year, instead of its originally intended target date of autumn 2020. In the meantime, Her Majesty’s Treasury published an interim report this autumn, which sets out our approach to the review and analysis, which will inform the final report.
The noble Lord, Lord Knight of Weymouth, asked about our plans for the public sector. I can tell him that phase 2 of the public sector decarbonisation scheme has now been launched and has a stronger focus on heat decarbonisation, as this is what we need to reduce direct emissions from public sector buildings. Phase 2 of the scheme supports the transition to low-carbon heating in public buildings by providing funding to replace end-of-life fossil fuel systems, such as gas boilers, with low-carbon heat sources. The funding can be used to deliver projects that combine low-carbon heating measures, such as heat pumps, with energy-efficiency measures, such as insulation and LED lighting. Phase 2 of the public sector decarbonisation scheme has now closed to applications, and those that we received are being assessed.
The noble Baroness, Lady Altmann, raised the interesting issue of the Government’s plans for bitcoin and other cryptocurrencies. As always, the Government stand ready to respond to emerging risks or changes in the market and will continue to monitor how cryptoassets are being used in the UK, specifically with regard to the emissions that they create. This is an important point, but it is also vital to consider this in the context of the UK’s success in decarbonising the power sector. Between 1990 and 2019, the sector saw a reduction of emissions of 71%.
The noble Lord, Lord Redesdale, made some good points and asked about the potential to include a requirement for companies that fall within streamlined energy and carbon reporting to include an outline of their net-zero plans. It is important to note that, for most organisations in scope, this will be the first time that they will be reporting this information in company reports on a mandatory basis. We will therefore keep under review whether to mandate other types of disclosures, such as those that address the net-zero target, as we continue to evaluate the impact of these regulations and how the new reporting practices are being embedded.
In response to points made by the noble Lord, Lord Lea of Crondall, I can say that the Government already publish estimates of historic and projected UK emissions annually. Later this year, we will publish a net-zero strategy that will consider what metrics are needed to monitor delivery of our emissions targets, and will take the noble Lord’s helpful suggestion into account.
The noble Lord, Lord Knight of Weymouth, asked how the Government could elicit the behaviour change necessary to meet net zero. Reaching net zero requires not only changes to our energy systems and substantial new low-carbon infrastructure, but shifts in how we, as individuals, travel, what we buy and how we use energy in our homes. In many areas, delivering net zero will require the uptake of new lower-carbon technologies, such as electric vehicles or heat pumps. The Government are supporting people to adapt to these new technologies, with initiatives such as Go Ultra Low and the Simple Energy Advice service. We are also exploring how we could go further and support individuals to make green choices, as part of the development of our net- zero strategy.
In response to the question from the noble Baroness, Lady Hayman, regarding the Climate Assembly UK, I can tell her that the right honourable Alok Sharma as BEIS Secretary of State spoke at the report launch and welcomed the report. Its findings will help to shape the work that the Government are doing over the next year in the run-up to COP 26 and as we develop our plans for reaching net-zero emissions by 2050.
In response to the points made by the noble Baroness, Lady Sheehan, I can say that the Government have committed to issuing their first sovereign green bond. Subject to market conditions, this will be done this summer. Reflecting our long-term commitment to the green finance sector, we intend to follow up with a further issuance in 2021 to start to build out a green gilt yield curve.
On how to finance local authorities, the UK Infrastructure Bank has £4 billion set aside for local authority lending at very favourable rates. Furthermore, the Government launched the Green Finance Institute in July 2019, alongside the City of London Corporation. The GFI’s overarching mission is to accelerate the domestic and global transition to a clean, resilient and environmentally sustainable economy through accelerating UK leadership in green finance. Since its inception, the GFI has progressed significantly with initiatives and coalitions established on the built environment, transport, supply chains, and using finance to deliver nature-based solutions.
The noble Baroness, Lady Altmann, asked what could be done to encourage sustainable investments. Our new and ambitious UK ETS came into force on 1 January and will promote cost-effective decarbonisation in industry, power and aviation, allowing businesses to cut carbon where it is cheapest to do so. It will help to mobilise the scale of capital investment necessary, deploy clean energy technologies and capture new trade opportunities on the back of the energy transition.
In response to the points made by the noble Baroness, Lady Bennett of Manor Castle, I can tell her that the Government are currently consulting on a bottle deposit return scheme for England, Wales and Northern Ireland. With regard to the UK shared prosperity fund, a point raised by the noble Baroness, Lady Sheehan, I can say that the 2020 spending review sets out the main strategic elements of the UK SPF in the heads of terms, and the Government will shortly publish a UK-wide investment framework later this year and confirm the multiyear spending profiles at the next spending review.
As we develop our plans for reaching net-zero emissions by 2050, we will of course continue to engage with local authorities, devolved Administrations, businesses and the public on the changes needed to develop our ambitions to reach net zero. I know that I can speak for my right honourable friend the Secretary of State when I say that significant work is under way to engage with stakeholders across society at pace to understand how the transition can best work for the whole country.
This year we find ourselves in the extremely privileged position of being both president of the G7 and host of COP 26, and we are determined to use both those key international moments to promote ambitious action to deliver the transformational change required by the Paris agreement. Ahead of COP 26, we will bring forward further bold proposals, including a net-zero strategy to cut emissions and create new jobs and industries across the whole country, going further and faster towards building a stronger, more resilient future and protecting our planet for this generation and those to come.
Lord Teverson (LD) [V]
My Lords, I thank everybody for their excellent contributions. We did not manage to stretch the debate out to five hours—perhaps thankfully—but we have had some really excellent subjects covered, from international comparisons to fossil fuels, education, housing, bitcoin, transport and others.
I also thank the Minister for his reply and for mainly looking to the future, rather than the usual thing that happens, when Ministers say how good we have been in the past. I am glad to hear that there will be—what I specifically wanted to see—further thought and action on co-ordination with local government in the road map to net zero. I would like something that was substantial in itself, but that is clearly not going to be the case. I just hope that it is a whole chapter rather than a page or a paragraph.
There are still lots of things to be done to get rid of those silos that we have talked about. Only by closing those gaps—whether they are between government departments and devolved Parliaments and Assemblies or between central government and local authorities—will we have any chance of meeting those targets, which we all welcome but feel slightly sceptical about at this time. I will feel secure only when I see the Prime Minister driving an electric forklift truck through a wall that says, “Getting Decarbonisation Done”. At that point, I will know that we have got it in the bag. Until then, however, we are going to keep the pressure on the Government. We will applaud their good intentions, but we will much more strongly applaud their plan to actually achieve what we all want to achieve.
The Deputy Chairman of Committees (Baroness Barker) (LD)
That completes the business before the Grand Committee this afternoon. I remind Members to sanitise their desks and chairs before leaving the Room.