Net Zero Strategy and Heat and Buildings Strategy

Wednesday 20th October 2021 Lords Chamber

Statement

The following Statement was made in the House of Commons on Tuesday 19 October.

“With permission, Mr Speaker, I will make a Statement on the net zero strategy and the heat and buildings strategy. The Statement is all about future generations as well, because we know that we must act now on climate change. The activities of our economies, communities and societies are changing our environment. If we do not take action now, we will continue to see the worst effects of climate change.

We have already travelled a significant way down the path to net zero. Between 1990 and 2019, we grew our economy by 78% and cut our emissions by 44%, decarbonising faster than any other G7 country. Since 2010, the UK has quadrupled its renewable electricity generation and reduced carbon emissions in the power generation sector by some 70%. In the past year alone, we have published the Prime Minister’s Ten-Point Plan for a Green Industrial Revolution, the energy White Paper, the North Sea Transition Deal, the industrial decarbonisation strategy, the transport decarbonisation plan, the hydrogen strategy and more. Earlier this month, we unveiled a landmark commitment to decarbonise the UK’s electricity system by 2035. But there is still a substantial length of road to travel. We must continue to take decisive action if we are to meet our net-zero goal, so today I am pleased to announce two major government initiatives: the net zero strategy and the heat and buildings strategy. This is not just an environmental transition, it represents an important economic change, echoing even the explosion in industry and exports in the first Industrial Revolution more than 250 years ago.

We will fully embrace this new, green industrial revolution, helping the UK to level up as we build back better and get to the front of the global race to go green. We need to capitalise on it to ensure that British industries and workers benefit. I can therefore announce that the strategy will support up to 440,000 jobs across sectors and across all parts of the UK in 2030. There will be more specialists in low-carbon fuels in Northern Ireland and low-carbon hydrogen in Sheffield, electric vehicle battery production in the north-east of England, engineers in Wales, green finance in London and offshore wind technicians in Scotland.

The strategy will harness the power of the private sector, giving businesses and industry the certainty they need to invest and grow in the UK and make the UK home to new, ambitious projects. The policies and spending brought forward in the strategy, along with regulations, will leverage up to £90 billion of private investment by 2030, levelling up our former industrial heartlands. The strategy also clearly highlights the steps that the Government are taking to work with industry to bring down the costs of key technologies, from electric vehicles to heat pumps—just as we did with offshore wind, in which we are now the world leader. Those steps will give the UK a competitive edge and get us to the head of the race.

We have spoken often in this place of late about the importance of protecting consumers, and consumers are indeed at the heart of the strategy. Making green changes such as boosting the energy efficiency of our homes will help to cut the cost of bills for consumers across the UK. Switching to cleaner sources of energy will reduce our reliance on fossil fuels and, again, bring down costs down the line. This plan is also our best route to overcoming current challenges. The current price spikes in gas show the need to reduce our reliance on volatile imported fossil fuels rapidly. Although there is a role for gas as a transition fuel, moving away from imports quickly is in the best interests of bill payers. With our ambitious set of policies, the strategy sets out how we meet the fourth and fifth carbon budgets and our nationally determined contribution. It puts us on the path for the sixth carbon budget and ultimately on course for net zero by 2050.

We are now setting up the industrial decarbonisation and hydrogen revenue support scheme to fund these business models and enable the first commercial-scale deployment of low-carbon hydrogen production and industrial carbon capture. We have also announced the HyNet and East Coast clusters as track 1 economic hubs for green jobs.

We have previously announced that we will end the sale of all new non zero-emission road vehicles from 2040, and the sale of new petrol and diesel cars from 2030. The strategy explains that we will also introduce a zero-emission vehicle mandate that will deliver on our 2030 commitment to end the sale of new petrol and diesel cars and vans.

To increase the size of our carbon sinks, we will treble the rate at which we are planting new trees in England by the end of the current Parliament. We will be a global leader in developing and deploying the green technologies of the future. The strategy announces a £1.5 billion fund to support net-zero innovation projects, which provides finance for low-carbon technologies across the areas of the Prime Minister’s 10-point plan.

We have also published our heat and buildings strategy, which sets out our plans to significantly cut carbon emissions from the UK’s 30 million homes and workplaces in a simple way that remains affordable and fair for British households. We will gradually move away from fossil fuel heating and improve the energy performance of our buildings through measures such as grants of up to £5,000 towards the costs of heat pumps, a further £800 million for the social housing decarbonisation fund to upgrade social housing, and a further £950 million for a home upgrade grant scheme to improve and decarbonise low-income homes off the gas grid.

The year 2021 is a vital year for action on climate change. In just two weeks’ time, the UK Government will host the crucial United Nations COP 26 conference in Glasgow. As the Prime Minister has said, it needs to be a “turning point for humanity”, the point at which we pull together—and pull our socks up—to keep 1.5 degrees in reach. Hosting COP 26 will also give the UK a huge opportunity to showcase our world-leading climate credentials and set an example to other countries to raise their own ambitions. The net zero strategy will take centre stage in our display, setting out our vision for a UK that is cleaner, greener, and more innovative.

We are ready for Glasgow, and I commend this Statement to the House.”

18:47

[Lord Grantchester (Lab)]

I thank the Minister for bringing yesterday’s Statement on the net-zero strategy and the heat and buildings strategy to your Lordships’ House. As he knows, the clock is ticking, and it is less than two weeks to go before COP 26 in Glasgow. I congratulate the Government on getting these two vital documents out—two coming along together at once—to fulfil long outstanding commitments to show the spread of attention needed across the economy. These are two vital aspects to the challenge to decarbonise all areas of our national life, our homes and buildings, and to how the Treasury values net zero in its command of the nation’s finances.

COP 26 is making the Government face up to the size of the challenge, and we support them in the focus that that brings on climate change action. We want the conference to be successful. It comes at a very opportune time in world affairs, and it comes now. Can the Minister update the House on the amount of commitments that the Government have secured to their goal of raising £100 billion annually for climate investments internationally?

There are many aspects of the Statement that are rightly welcomed—that the Government recognise that they must take action now, and that these two major initiatives represent vital change in the economy and environment. People are thinking that the Conservative Government are taking Britain back to the 1970s, with energy shortages and high prices. At this last moment before COP 26, there is a growing sense that the Government are finding the climate emergency too big to ignore and yet too hard to grasp. As the Minister is presenting both documents, can he confirm that the Treasury is now fully committed to helping industry and the public through this present crisis? There is a sense that the funding commitments nowhere near match the size of the challenge. There has been almost a decade since David Cameron shredded vital confidence on action when he slashed the renewable energy incentives that so many wished to participate in to do their bit.

Emissions from buildings are higher today than they were in 2015. There are 19 million homes rated below EPC band C that desperately need insulation and upgrading. However, having said that, I welcome the element on the incentivisation for heat pumps, especially recognising those off the grid, most notably in rural areas. It does rather leave consumers at the mercy of electricity prices, and the Statement makes mention of a further £950 million for a home upgrade grant scheme to decarbonise low-income homes off the gas grid. Can the Minister expand on this and say how many households this will benefit?

I wonder whether the support for heat pumps is actually a step back in support. To the majority on the grid, heat pumps are generally seven times the cost of conventional gas boilers. The £5,000 grant appears less than the help that is currently provided through the RHI. Granted that the RHI is being scrapped in April, and that it pays back over a longer timeframe, is the Minister convinced that the Government are doing enough to defray the huge up-front costs for consumers? The Government say that they would like to see conventional gas boilers no longer included in new house builds from 2035. Can the Minister show more commitment? Why cannot the Government bring in a ban on all new conventional boilers being available after at least 2035? This would parallel the challenges and ban on the production of new petrol and diesel cars from 2030.

The hydrogen sector would certainly welcome the commitment towards hydrogen-ready boilers, that all quotes for any replacement or new boiler must include one for hydrogen-ready boilers. While they are still more expensive than conventional boilers, they certainly do not carry the huge price disadvantage of heat pumps. The Statement does not add any additional funding to the £240 million in the hydrogen strategy, which will not be made available until 2023. How do the Government plan to kick-start green hydrogen production at home when, to date, all orders for green hydrogen technology have been made overseas?

Hydrogen would certainly benefit the transport sector in the long term as well. In the meantime, I welcome the promotion of electric vehicles. Can the Minister outline the Government’s plan to help make electric cars more affordable for all consumers? I also welcome the emphasis on investments across the regions, most notably the HyNet cluster in the north-west, and stress to the Minister the need to engage effectively with metro mayors and local authorities, who are all eager to promote the net-zero agenda.

The Government used to insist that they were technology-neutral in their policies. They then moved to the scattergun approach of the Prime Minister’s Ten Point Plan without setting out a comprehensive plan across the economy. As they now fill in the gaps left, are the Government moving in this Statement from a scattergun policy towards picking winners and losers? This Statement, welcome as it is, resembles a pick ’n’ mix of support—so much has been omitted. I will leave it to other speakers to raise those many areas. However, the Government must go over to the touchline and check the monitor of reality. The Statement says that the Government will “gradually” move away from fossil fuels. “Gradually” is too slow. Action is needed now, and the Government must immediately cease the contradiction of providing support for fossil fuels both in the UK and overseas. The Government have said—the Statement repeats it—that the conference needs to be “a turning point for humanity.” What has been taking the Government so long? The earth is on the edge across the globe, and the Government must act as if they really believe it.

[Lord Oates (LD)]

My Lords, I welcome the opportunity to respond to the Statement on these important and extensive documents, and I hope that the Government will provide time at an early opportunity when the House can have a full debate on the full detail that is included in the hundreds of pages that have been published.

I know that in the past when I have responded to publications, the Minister has sometimes been offended that I have not been as effusive in my praise as he thought was merited. As I know him to be a sensitive soul, I will try to start off as positively as I can. There is merit in the fact that, after so long, we actually have the documents at last. There is merit in the fact that the Government remain committed to our climate change goals, and we should give thanks that climate has not become the political dividing line that it has in other countries. I also welcome the decision to introduce a zero-emissions vehicle mandate and a new target for greening all electricity generation. However, I am afraid that, after that, I am running out of things to credit the Minister and the Government with.

The Treasury tells us in the Net Zero Review:

“The transition has implications for current and future taxpayers”—


but it does not tell us what they are. It provides no indication of how the black hole arising from declining fuel duty revenues will be replaced. It says only that

“the government may need to consider changes to existing taxes and new sources of revenue”.

Likewise, in addressing the crucial issue of carbon leakage, which is critical to the viability of our industries as we decarbonise, the Treasury blandly tells us:

“Further work is required”


and that

“a case for conducting a formal call for evidence may emerge.”

There is nothing in the document about using the financial regulatory system to curb the financing of new and dangerous fossil fuel exploration and exploitation, and there is nothing about net-zero requirements on all planning decisions. The complacency is breath-taking. The Treasury clearly thinks that the climate emergency is a distant threat rather than the clear and present danger that looms before all of us.

The heat and buildings strategy is even more devastatingly unambitious. The Government propose a grant scheme that they estimate will deliver 90,000 heat pumps per year, and they convert what was assumed to be a mandate to end new conventional boiler installations into an aspiration. Every year, something in the order of 1.2 million new gas boilers are installed. The Government’s target for heat pumps will reduce that number to just over 1.1 million new gas boilers installed every year. Bearing in mind that they have a lifespan of about 15 to 20 years, it is immediately apparent that we will be building in a long legacy of fossil fuel heating year after year. If that was not bad enough, 90,000 units will not provide the scale to drive down costs and incentivise installers to retrain in heat pump installation, so the Government’s hopes of falling prices driving demand will remain a fantasy.

However, worse than all that, there is no credible plan to upgrade the energy efficiency of our existing homes, which should be the very first priority. If we are going to upgrade the millions of homes the Government say we need to, we have to rapidly scale up our capacity so that we have the skills base to deliver at least 1 million home upgrades a year. We are nowhere near that yet and there is no plan here to achieve that. Installing heat pumps in homes that are leaking energy makes no sense at all, but the Government offer no route to tackling these problems.

What about the money? I would ask what happened to the £9.2 billion promised for energy efficiency in the Conservative Party manifesto, had it not become abundantly clear by now that a promise in that document now seems the best indicator of what will not happen rather than what will. However, it is clear that, after the green homes grant scheme ended, we are now being given a promise of less money over a longer period of time, and it seems to achieve less than we were promised.

So, while I welcome the continuing ambitions of the Government, I remind the Minister that, some months back, he acknowledged in response to questions that the Government needed not only ambitious 2050 targets but a credible short-term action plan to get there. Regrettably, this is not it.

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)]

I thank the noble Lords, Lord Grantchester and Lord Oates, for their comments, even though the screen indicated the noble Lord, Lord Oates, had been renamed Lord Fox for most of his contribution. I am pleased to say he has been reincarnated in a different guise.

I was pleased to have the initial support of the noble Lord, Lord Grantchester. It deteriorated slightly from there, but never mind. On funding commitments, since the 10-point plan was announced, and including the commitments yesterday, that makes a total of £26 billion worth of public investment. More importantly, that has leveraged £90 billion of private sector investment into this sector as well. I can confirm the figure of £950 million for the home upgrade grant, which will particularly benefit the homes of low-income families in off-gas areas.

Both the noble Lords, Lord Oates and Lord Grantchester, mentioned the boiler upgrade scheme, which I can confirm will have £450 million over three years: £5,000 for air-sourced heat pumps, £6,000 for ground-sourced heat pumps. What most noble Lords missed, and a number of commentators as well, is that this is not the totality of our support for heat pumps. We are also installing a considerable number under the social housing decarbonisation fund, the public sector decarbonisation scheme and, of course, from 2025 when the new housebuilding strategy comes into force, there will be, pretty much, no alternative option for new builds than to install low carbon heating, so that will see a further acceleration. We are currently installing about 30,000 heat pumps a year: roughly 10,000 as a result of subsidy schemes and 20,000 in new builds. This is a massive ramping up.

If the green homes grant taught us anything, it is that we cannot just inject a large amount of funds and expect the industry to change overnight. There is a huge amount of transformational change taking place. To the credit of many private sector companies, they are coming forward with ambitious plans themselves. If I may mention but one: I visited Octopus yesterday morning. It has a fantastic new training centre in Slough and is proposing to employ and retrain hundreds, if not thousands, of currently qualified gas engineers to enable them to install heat pumps in the new revolution. The chief executive told me that by April next year, including this new grant system, they hope to be offering heat pumps for costs roughly comparable to existing gas boilers. I know that many other private sector companies have similar plans.

Clearly, heat pumps are expensive at the moment, but this is all about government funding, pump-priming the market, helping the private sector to innovate and bring the costs down. I am sure noble Lords will accept, that it is a strategy that was extremely successful in the offshore wind market. Costs for offshore wind were initially very expensive and are now comparable to, or possibly even cheaper—we will find out in the contracts for difference round—than existing fossil fuels.

I was surprised to hear that both the Labour Party and the Liberal Democrats now seem to be in favour of banning boilers. Our position is that it is certainly our aim and ambition that by 2035 we will be able to move away from installing gas boilers. Crucially, before we do that, we need to make sure there are viable alternatives in place. We certainly hope—given the figures that I gave for heat pumps—that by 2030 there would be comparable offers on the market, and alternatives in place. Maybe the hydrogen offer will be comparable by then. We will certainly consult on the possibility of making all boilers hydrogen-compatible, to enable that transition to take place, but as of yet the jury is very much out on whether there will be the ability, at reasonable cost, to produce the enormous quantities of hydrogen that would be required if we were to get anywhere close to it replacing natural gas. I am on the record as saying it is more likely that we will end up using it for industrial processes—trains, HGVs et cetera—rather than the large-scale replacement of gas for domestic heating. Although already, of course, there are trials taking place of hydrogen being injected into the gas main. Injecting up to 20%, it is still possible to work with existing appliances.

The noble Lord, Lord Grantchester, also raised the issue of electric vehicles, and I can tell him that a further £620 million of funding for zero emission vehicle grants and EV infrastructure was announced. We allocated a further £350 million of the up to £1 billion automotive transformation fund, to support the electrification of UK vehicles and, importantly, their supply chain, as well, of course, as a £3 billion integrated bus network, and £2 billion to enable towns and cities to be cycled or walked.

The noble Lord, Lord Grantchester, ended by talking about a pick-and-mix approach. I fundamentally disagree —this is a comprehensive strategy, looking at every individual sector of the economy in turn and outlining a comprehensive strategy of how they all need to do their bit to contribute towards the legally binding net-zero target.

I am grateful that the noble Lord, Lord Oates, started on a positive note before things descended. He asked me for details of the funding under the heat and building strategy. We have talked about the boiler upgrade scheme, and the social housing decarbonisation fund that is bubbling away in the background. They are extremely successful schemes, and I recommend that noble Lords visit some of the excellent schemes we are already installing. That is a further £950 million and £800 million respectively over 2022-23 and 2024-25. A further £1.4 billion over 2022-23 to 2024-25 is being invested in the public sector decarbonisation scheme, with the aim of reducing emissions from public sector buildings. There is £338 million for the heat network transformation programme and £270 million for the green heat network fund, sector regulation and new heat network zones by 2025.

I understand why noble Lords will always call on us to do more, but I think this does represent a comprehensive strategy tackling all parts of the economy and shows how they can all do their bit to contribute towards our decarbonisation goals. It was even recognised by the BBC’s environmental analyst Roger Harrabin. This is an extremely ambitious programme and is world leading.

19:07

[Baroness Bennett of Manor Castle (GP)]

My Lords, reports suggest that a companion document to the net-zero strategy entitled Net Zero: Principles for Successful Behaviour Change Initiatives was published and then withdrawn a few hours later. The report suggests that this government document raised concerns over the expansion of airports contained in government policy and tax exemptions for the aviation sector. It said that the Government needed to do more to make behavioural changes easy and affordable, and align commercial interests with net-zero outcomes. It proposed carbon taxes, a financial levy on food with a high-emission footprint, and forcing the markets to be more transparent to enable consumers to choose more sustainable options. Will the Minister confirm if these reports are true? Will he tell me why this report was withdrawn and what its status is now?

[Lord Callanan (Con)]

I believe there were some documents that were published in error, but they have been withdrawn. Fundamentally, we do not believe in telling people what to eat or how to live their lives. Our focus is on helping people, incentivising them to make green choices, and to make those choices easier and cheaper. As we transition to net zero, we will be tech- led using British technology and innovation, just as we did in the last innovation revolution. I appreciate that the Greens want to lecture people and instruct them; I believe that carrots are much better than sticks.

[Lord Liddle (Lab)]

My Lords, I welcome this Statement. I have not had the opportunity, as yet, to read all the documents. I fear the criticism that I made in the debate on levelling up on Thursday is relevant. There is a clarity of destination about the Government’s policies, but no viable plan to get there. The thing that stuck in my mind is that when we are looking at the necessary move away from gas central heating, the incentives being offered for heat pumps—the £450 million over three years—is clearly inadequate, in comparison with the huge scale of the challenge.

I have always understood the noble Lord, Lord Callanan, to be a Conservative who believes in the use of market mechanisms—they are what Conservatives normally support. Can he tell me the Government’s estimate of the rise in gas prices that would be necessary to persuade the public, under market mechanisms, to install heat pumps?

[Lord Callanan (Con)]

The noble Lord will be pleased to know that I do believe in market mechanisms. His question is impossible to answer, and let me explain why. Heat pumps are three to four times more thermodynamically efficient than existing gas boilers. At the moment, because of the costs of various policies on the production of electricity to successfully decarbonised the electricity sector, there is an imbalance in pricing. The Treasury and the Government have accepted that we need to do something about rebalancing gas and electricity prices. Now is clearly not the time to do this, when we are experiencing record gas prices. In the longer term, and bearing in mind that this is a 15-year strategy, we need to change the balance of these costs. We are committed to do so. There are other market mechanisms of which I could speak in favour. We will consult on a market mechanism for gas boiler manufacturers to have a certain proportion of their sales be in heat pumps. I repeat what I have said before: the boiler upgrade scheme is not the only support mechanism we offer for installing heat pumps.

[The Lord Bishop of Durham]

The Minister and I live in the same region, where masses of new building is going up. I have had only a quick read of the document —we have not had time for anything other than that—and there is a lot about retrofitting in it. Given that we have all the technology and knowledge now, can the Minister explain why new builds are not being built to a net-zero target from this year or perhaps next? Everything is in place to be able to do this. We are delaying too long.

[Lord Callanan (Con)]

The decision was made by what was then the Ministry of Housing, Communities and Local Government that the future homes standard would kick in in 2025. There is a long process of consultation to go through with industry to ensure that the standard is applicable, that the supply chain is there, and so on. The right reverend Prelate will be pleased to know that we are changing what is called Part L of the building regulations next year. This will also produce substantial carbon savings in advance of the future homes standard coming in in 2025.

[Lord Whitty (Lab)]

My Lords, I thank the Minister for answering a question I asked a few weeks ago, to which he did not then really reply. I asked when the owners and landlords of buildings and housing will know whether hydrogen is to be the basis for what is currently the gas network. In one place, the document says that it will be “in” 2026, and in another it says “by” 2026. Either way, building owners have five years during which they will not know whether or not their heating systems can be transferred to hydrogen. The Minister is tonight deeply sceptical about whether we would have enough hydrogen, given its other uses, as earmarked in this document, and the need for an increased production in hydrogen for transport and industry. Can the Minister go further and indicate whether any buildings or housing will be convertible from natural gas to hydrogen, or whether some buildings in areas of industrial hydrogen use could be transferred to it? There are three scenarios, varying from nil hydrogen for home heating to it being used for something like a third of home heating by 2050. Will this mix now take place? Do we have to wait till 2026 for any sort of answer to this question?

[Lord Callanan (Con)]

I would like to give the noble Lord a direct answer: it is genuinely impossible to say, at the moment. Let me explain why. It is clear that hydrogen will play a major role in our economy. It will probably contribute to some heating, but I have given my view based on current technology. It is perfectly possible to use hydrogen for heating and gas boilers; the technology exists now—I have seen it. Two houses have been built our area—for the benefit of the right reverend Prelate—of Gateshead—which are entirely hydrogen-fuelled. They have hydrogen boilers, hydrogen hobs and hydrogen gas fires. They work perfectly well — I have cooked an egg on a hydrogen hob.

The question is where we get the hydrogen from. There are two ways of producing it: either from natural gas through carbon capture storage for blue hydrogen, or through electrolysis to produce green hydrogen. You then have to ask yourself the question: does it make sense to use green electricity to generate hydrogen to heat homes, or is it more sensible just to use electricity in the first place to heat the home through a heat pump? That is a question about thermodynamics and conversion and there will be different solutions in different places.

We can say with certainty that the future of home heating will almost certainly be taken over by three technologies: electrification through heat pumps; a greater use of heat networks, for which we have allocated funding; and a certain percentage from hydrogen. The reason we have announced our hydrogen strategy, are funding lots of research programmes and are consulting on a market mechanism to generate large amounts of hydrogen is to try to kick-start the market—to get it going and to bring in private sector investment and ingenuity. This will help to generate large amounts of hydrogen—cheaply, we hope. But we do not yet know to what extent the technology will develop, how much we will be able to produce at reasonable cost, and whether it will be suitable for use in home heating or whether it will be more sensible to use it in industrial processes. We have a multi-pronged strategy. As soon as we have more information, I will be sure to update the noble Lord.

[Baroness Randerson (LD)]

The Government have announced that new-build housing will have charging points for electric vehicles. But the Minister will know that many houses and much other accommodation do not have access to driveways or sufficient space for such points. People will rely increasingly on electric vehicle charging points in public places. Their rollout has been very slow, and those that exist are in a very unreliable condition. More than two years ago, legislation came to this House and was passed which gave the Government considerable powers to improve their availability by making public charging points easier to use and easier to pay for and to ensure that they were better maintained. That legislation has not been implemented. Why not?

[Lord Callanan (Con)]

I believe that it has been implemented. As I said earlier, we have allocated £620 million for vehicle grants and for further funding for local EV infrastructure. This is being rolled out across the whole country. Many local authorities are installing EV charging points in lamp posts, in publicly accessible areas. Grants are available for the installation of electric charge points in the home. Many are being rolled out in service stations and petrol stations. The infrastructure is being rolled out. I understand that the noble Baroness is impatient for it to be done faster, but it is happening.

[Baroness Bennett of Manor Castle (GP)]

My Lords, given that I cannot see anyone else rising, perhaps I may return to a point raised by both Front-Bench spokespeople about the ending of the sale of gas boilers by 2035. The Government’s document seems to say that this is a confirmed ambition. Can the Minister explain what a “confirmed ambition” means? Given that the Climate Change Committee recommends that these should be ended for residential properties by 2033 and for commercial properties as early as 2030, and given that the International Energy Agency says that there should be a global international ban by 2025, why is this so late?

[Lord Callanan (Con)]

I understood that I had explained that earlier in my answer to the noble Lords, Lord Grantchester and Lord Oates, but I am happy to do it again for the benefit of the noble Baroness. It is an aim—an ambition—that by 2035 we will be able to move away from the installation of gas boilers, but we want to make sure that cheap, easily available and affordable alternatives which cost no more to buy or run than a gas boiler are in place. We are fairly certain that the technology will be available. That is why we are supporting so many of our insulation schemes and the heat pumps that we spoke about earlier, but we want to make sure that the technology is available. This also chimes in with the question asked by the noble Lord, Lord Whitty—hydrogen will play a role, but we do not know to what extent at this stage. I understand the impatience of noble Lords, but this is a strategy to be rolled out over many years.

[Baroness Bennett of Manor Castle (GP)]

My Lords, given that there are 19 million homes in the country marked on the bottom rung for energy efficiency—D or below—and that the Heat and Buildings Strategy stresses in its introduction the need for a fabric-first approach, can the Minister tell me why there are no firm proposals to replace the scrapped green homes grant or funding for improving the fabric of our homes?

[Lord Callanan (Con)]

The noble Baroness has obviously not been paying attention to what I have said, but let me repeat the figures yet again. She might want to go and look at some of the fantastically successful delivery we were doing for low-income families under the local authority delivery scheme. We spent hundreds of millions of pounds on that; we have already rolled out the first phase of the social housing decarbonisation fund, and we are investing £950 million and £800 million respectively over the next two years. I referred earlier to the home upgrade grants. All these are paying for home insulation measures for the most vulnerable in society and for people on low incomes. I am sorry if the Greens are not aware of that or do not support it, but we are investing these very large sums of money to upgrade the fabric of people’s homes and install low-carbon heating systems in them. I have been out and viewed many of these schemes.

[Lord Grantchester (Lab)]

If I may also take advantage of being able to jump up again on the Minister, I would mention one aspect of the spread of areas to be covered with new developments: nuclear. There was no mention of nuclear in the Statement. Are any updates to the small modular reactors policy being brought forward by the Government?

[Lord Callanan (Con)]

I am happy to tell the noble Lord that there was mention of nuclear in the Statement, and we announced £120 million for a nuclear innovations fund. I can also tell him that we will have more to say on our nuclear ambitions shortly.

[The Lord Bishop of Durham]

It is obviously the evening to get a second go. Yesterday, the Transition Pathway Initiative launched the Global Climate Transition Centre, which will be a key part of the COP 26 financial infrastructure, to assess 10,000 companies on their alignment with the net-zero pathway and support accountability and action on this very important issue. Understandably, that is not in the paperwork, because it was announced yesterday. Is the Minister aware of the Transition Pathway Initiative—which has been around for a while now—and the Global Climate Transition Centre, and what actions will the Government take to support these initiatives?

[Lord Callanan (Con)]

Yes is the answer to the right reverend Prelate’s question. They are excellent initiatives, and they are indicative of some of the leadership of many of our leading companies and how they are committing to net zero. Many of them are going to be displaying at COP, and it is great to see some of the biggest businesses in our land also helping us on the pathway to net zero.