Net-Zero Carbon Emissions

Lord Shipley Excerpts

Wednesday 21st April 2021 Grand Committee

[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.