Climate Change Committee Progress Report 2021

Alan Brown Excerpts

Thursday 21st October 2021 Westminster Hall

[Anthony Browne]

That is a very good point and I will come to it briefly. We need absolutely to try and get to net zero, but also to promote measures such as insulation and energy efficiency in housing and industry to reduce consumption.

We need other measures, rather than just decarbonising power. These other measures are where the potential political pain comes. Decarbonising electricity production did not really require consumers to change anything. The electricity supply to their homes and their sockets was the same as before, but produced in a climate-friendly way. They had the same cars and same central heating systems. However, with other sectors needing to decarbonise, future policies will inevitably have a more direct impact on consumers. That is why we need more political will in the coming decades, not less. This should be doable. The public are very supportive; a large majority say they want stronger action on climate change.

The CCC did welcome the advances in policy that have already been made. In last year’s report they made 92 different recommendations; this year’s report says that 72—over 75% of them—have either been achieved, partly achieved or are underway. That is a good record. However, it thought that things were going too slowly. It concluded that clearly policy progress is being made, but it is not yet happening at the necessary pace. Only 11 of the 72 recommendations have been achieved in full.

The report states that in 21 areas of abatement—places where we can make real changes—sufficient ambition is being maintained in only four. The report welcomes the Government’s ambitions until 2025 on electric cars and vans, off-shore wind and tree planting. I very much welcome that here the Government are in line with the committee’s recommendations. In last year’s 10-point plan for climate change, the Government committed to 40 GW of offshore wind power by 2030, which is what the CCC is calling for—tick! They also committed to 30,000 hectares of tree planting a year by 2025, which again is what the CCC is calling for—tick!

In some ways, the Government have arguably gone further than the CCC wanted. It wanted to ban the sale of new petrol and diesel cars by 2032, but the Government are bringing in the ban from 2030—two years earlier. That really is a world-leading ambition. Sales of electric vehicles are already escalating rapidly, and although the charging point infrastructure is not being rolled out quite fast enough for some electric car drivers, it is going at pace. Industry is taking the lead from the Government, with Jaguar having committed to selling only electric vehicles from 2025, and Ford has just announced that it will make parts for electric cars at its Halewood plant in Liverpool, giving it a new lease of life.

I am delighted to say that there has been significant progress since the CCC published its report in June and since this debate was applied for. In particular, the CCC was critical of the Government for not having published their transport decarbonisation plan, their hydrogen strategy, their heat and building strategy and their overall net zero strategy—it criticised them for the uncertainty and delay. To their credit, the Government published the first two, on transport and hydrogen, in the summer, and the heat and building strategy and the net zero strategy were published just a couple of days ago. Those included measures such as: a £5,000 grant to make clean-heat heat pumps affordable for homeowners; working with industry to ensure that clean heat is as cheap as gas-fired central heating by 2030; and a target to stop any new gas boilers from being installed by 2035—another world-first commitment.

The CCC has also chastised the Government for a lack of ambition on carbon capture and storage, which was the subject of a debate in this Chamber yesterday. It has said that we need to capture 22 million tonnes of CO₂ a year by 2030 while the Government were targeting only 10 million tonnes a year by then. It noted that that was the biggest single gap between what it had called for and what the Government were planning. When I drafted my speech at the beginning of the week, I was going to call on the Government to be more ambitious on CCS. Then, on Tuesday, they were: they announced two new clusters and a target of between 20 million and 30 million tonnes a year by 2030, which is potentially more than the CCC asked for. Hurrah! Those targets must be turned into reality, but the announcement is a big step forward.

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

Does the hon. Gentleman not agree that the Government could be even more ambitious on carbon capture and storage by progressing the Scottish cluster on track 1 as well, instead of having it stuck as a reserve?

[Anthony Browne]

The more ambitious the Government are, the happier I will be, but I totally bow to the Government’s metrics. The first two projects are right for the first phase, and the Acorn project is in reserve. I think the Minister said yesterday that being the reserve puts the project in a more advanced position for the second phase of the next two that will come—I am not sure whether anyone picked that up.

[Alan Brown]

It is still in reserve.

[Anthony Browne]

Hopefully it will get there in the second phase.

In my draft speech, I was also going to echo the Climate Change Committee’s call on the Government to commit to greenhouse gas removal targets, for which they had no target at all. The CCC said that the UK Government need to target 5 million tonnes of removal by 2030. In the net zero strategy this week, I discovered as I read through it that the Government committed to do exactly that—I did not see that reported anywhere, however. They also committed to a robust monitoring, reporting and verification process for greenhouse gas removal, which the CCC called for and which I was going to call for. In short, many of the policy gaps between the CCC’s report and Government policy have been closed since the report was published. Four months is an extremely long time in politics.

I strongly welcome this week’s announcements, even though it meant I had to rewrite my speech. Yes, the strategies have been delayed, but I am sympathetic to how the Government’s machinery has been distracted by the worst pandemic for 100 years. It is much better to have a good strategy late than a bad strategy early. However, there are still a few areas where more progress would be good. One of our biggest carbon sinks is peatland, and the Government are aiming for 32,000 hectares of peatland to be restored each year by the middle of the decade, but the CCC would like to see 67,000 hectares restored. That is quite a big difference. The CCC also says that the Government need to do more on consumer choice and behaviour: in particular, diet change—eating less meat, presumably—and reducing demand for flights. Those are indeed sensitive areas. I am hopeful that new technologies such as cultured meat and synthetic aviation fuels will help bridge that gap.

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[Tony Lloyd]

The hon. Gentleman has the good grace to admit that, like me, he has not got a clue. However, we need to have an educated consumer and we need to change the way people see this matter. These issues are not trivial if we are to make a real difference.

Similarly, in the industrial sectors, some of the same kinds of issues arise. Asking huge organisations around the world, such as Amazon or Manchester United football club, that have the intellectual and surplus capacity to decarbonise is one thing, but for a small firm, which focuses just on its core business, being informed about how they can and ought to make a difference is much more difficult unless we begin to look seriously at the issue of consumer education.

The hon. Member for South Cambridgeshire mentioned the need to change our diets, and possibly our attitudes to air travel. We have to take the country with us, and frankly we are not yet in a position to do so. This week there was a statement about the Government’s net zero ambitions, but the media did not seem to pick up that issue and say, “This is the one we have got to go with.” Education and taking the public with us was mentioned in the report, but we are still in the foothills of such a debate.

[Alan Brown]

I agree with the points that the hon. Gentleman is making about consumer education and the fact that more information should be available. In Scotland, the Scottish Government fund Home Energy Scotland, which is an independent, impartial body to give advice to people. Does he agree that the UK Government should consider that as a recommendation, so that consumers in England and Wales can access that impartial, independent advice?

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[Alan Brown (Kilmarnock and Loudoun) (SNP)]

It is a pleasure to serve under your chairmanship, Sir Christopher. I congratulate the hon. Member for South Cambridgeshire (Anthony Browne) on bringing forward the debate. I was trying to make the point earlier that when he secured a debate on carbon capture and storage the Government, in a remarkable coincidence, decided what carbon clusters were going to go forward. He has secured this debate and the Government have printed their response to the Climate Change Committee’s progress report and produced strategies. He must be feeling very productive. I wonder what is on the go for next week.

As others have said, the hon. Member for South Cambridgeshire made a thoughtful and balanced speech. There was a lot to be agreed on. He could have been a bit harder on the Government, but he did acknowledge that there is more work to be done from the Government and, critically, that we are not on track to meet the fifth carbon budget, let alone the final net zero target of 2050.

I disagree profoundly with a small part of the hon. Gentleman’s speech, about nuclear energy. He said that nuclear energy is safe and clean. The existing nuclear waste legacy is going to cost £132 billion to clean up and dispose of. We still do not have a means of disposing of nuclear waste other than burying it for a thousand years. I take umbrage at that. The Government need to think again about nuclear energy.

The hon. Member for Rochdale (Tony Lloyd) made a thoughtful contribution. He made an important point about housing and private landlords. He spoke about the need to involve local government, which is obviously a big theme for the hon. Member for Leeds North West (Alex Sobel), who I congratulate on rising to the challenge of making this debate last longer. He did really well.

There was a thoughtful contribution from the hon. Member for Bristol East (Kerry McCarthy), who mentioned the key Climate Change Committee recommendation that all decisions have to be looked at through the net zero prism and to be compliant with net zero. She correctly highlighted the £27 billion roads programme and the decision on Cambo, which needs to be looked at, and other matters. I would be interested to hear the Minister’s response to that.

The hon. Member for South Cambridgeshire was more optimistic than the speakers on this side of the Chamber, which is understandable. He is certainly more optimistic than I am. That said, we must acknowledge the progress that has been made, which he rightly pointed out, such as the 40% decrease in emissions by 2019 from the 1990 baseline—the biggest emission reductions in the G20. We welcome that; it is a fantastic start.

The reality is that, despite the publication of the heat and buildings strategy this week and the net zero strategy, there are still huge policy gaps that mean that we will not achieve the intended target of 68% reduction in emissions by 2030. The Government need to address this quickly, but we are still waiting for the Treasury’s net zero spending review. We know that the Treasury is, unfortunately, where the power lies, and it is the Treasury that will dictate how quickly the policies can be implemented. There is no clear plan on how to pay for the decarbonisation of our heating system. The UK Government have acknowledged that continually adding levies to our electricity bill is unsustainable, given that nearly a quarter of our bill is already made up of levies; and they still do not have a plan in place on how to fund the decarbonisation of our 24 million or so homes that are connected to the gas grid. There is no coherent plan for increasing the number of heat pump installations from 30,000 per year now to the stated target of 600,000 per year by 2028. The Climate Change Committee is clear about the extent of electric heating that is required, but at the moment the Government do not have the plans to match that ambition, and if they fall short there they will fall short of the 2030 nationally determined target.

The UK Government and the Minister seem to be putting all their faith in an announcement by Octopus Energy that it can make air-source heat pumps for the equivalent of the price of a gas boiler by April 2022. I really hope that Octopus Energy is successful, as it would be fantastic for industry and for enabling us to move forward much more quickly in decarbonising our homes, but a quick look on the internet today shows that a decent gas boiler can be purchased for £1,000, while air-source heat pumps are still in the order of £6,000 to £10,000. It is clear that the prices are not going to come down that quickly by next year. Air-source heat pumps are not a new technology. Other countries install many more heat pumps than we do in the UK, so there is no way that we could get such an exponential price drop, unfortunately.

The Government have tried to tackle the price differential with the announcement of a £5,000 grant. I suppose that is a start for the market and helps to close the gap slightly, but I am not sure that the Government or Ministers actually understand the amount of work required to install an air-source heat pump and the total cost. For a start, the home needs to be made energy efficient. That is good, but it adds cost and disruption. Generally, a new hot water tank will need to be installed in the property, which also adds further cost and disruption by requiring additional plumbing and possibly joinery work—adapting a cupboard or creating a space for the hot water tank. Radiators and pipework might need upgrading, the existing boiler will need to be decommissioned—needing further gas engineer and plumbing work—and redecorating might be needed after the boiler is taken out. Considering all that work, that £5,000 grant does not get anywhere close to closing the gap between replacing a gas boiler and the total amount of work needed to install an air-source heat pump. The Minister will need to review that and his Department’s strategy, or there is no way that they will meet that target of 600,000 installs per year by 2028.

The Government also need to understand, in general, how people replace their gas boilers. It is called a distress purchase because usually it is made when the boiler reaches the end of its life. If my gas boiler breaks down this winter, I might make inquiries about replacing it with an air-source heat pump, but if I find out that the pump and all the install has a two to three month lead-in time, I am not waiting the rest of the winter to get an air-source heat pump. I am going to buy a new gas boiler and pledge to myself that, some time in the future, I will get that energy-efficient air-source heat pump. That is the reality. As the hon. Member for Leeds North West said, we have a skills gap and a shortage of people with the knowledge and availability to do these types of installs. If that is not tackled by Government and planned for in policy, everything will fall short.

On heating in general, and decarbonisation, the UK Government remain open to the use of hydrogen. That is fine if they think it is a large-scale option that could progress, but if we are keeping hydrogen as an option and still want to progress ventilation air-source heat pumps, I suggest that the right place for them to start is with off-gas-grid homes. They should have a coherent programme that matches energy-efficient installation and air-source heat pumps in off-gas-grid homes, where people are more likely to be fuel-poor. That would scale up industry, reduce emissions, and help to tackle fuel poverty. That is where I would ask the Government to start.

The new heating grant announced by the Minister yesterday replaces the UK-wide renewable heat incentive scheme, but he has confirmed that the £5,000 grant is only for people in England and Wales, so Scotland has been completely excluded. Could the Minister explain why Scotland is excluded, and whether the Scottish Government will get Barnett consequentials so they can implement their own scheme? It seems ironic that page 27 of the heating building strategy states that

“Decarbonising our heat and buildings is a joint endeavour across the United Kingdom”,

because that is clearly not the case. What discussions did the Minister have with the Scottish Government before announcing the £5,000 grant scheme to replace the RHI?

On one last aspect of heating, the UK Government have clearly failed to meet the recommendation of providing a

“long-term policy framework to support sustained energy efficiency and heat pump growth at…scale.”

They have ignored the recommendation about bringing forward the target date for all homes to be EPC band C-compliant by 2028, and are instead sticking with the 2035 date. They have not set a date for mandatory hydrogen-ready boilers, and they need to make energy efficiency a national infrastructure programme, in the way that the Scottish Government have. As another hon. Member said, 2035 is far too late for the phase-out of new gas boilers. That date needs to really to be brought forward.

Excluding Scotland seems to be the theme of the week for the UK Government. I need to say again that the decision to not include the Scottish cluster as a track 1 CCS project is disgraceful. It has been classed as a snub in the north-east of Scotland, and has in turn been widely reported in the press. It is not just Scottish National party politicians saying that; that is the feeling. It is a real snub to Scotland, and I urge the Minister to think again about that decision. He has still not been able to explain why the Scottish cluster has been tagged as a reserve, or even why he thinks he needs a reserve. Is it because he is not sure about the deliverability of the two clusters that the Government propose to take forward? It seems illogical, but hopefully we will get a bit more information about that.

On carbon capture and storage, although the Government have announced that they hope to progress to clusters, they have yet to agree a pricing model for the storage of carbon dioxide. We need to get that in place if we are going to progress carbon capture and storage, which the Committee on Climate Change has said is really important.

[Tony Lloyd]

An important point in the debate about carbon capture is a recognition that yes, planting trees is excellent, and the Government’s ambitions will be really important if they are delivered, but we in England are destroying our peat bogs, which are a bigger carbon sink than the trees we will plant, and as we destroy those bogs, they become a source of carbon emissions. I congratulate the hon. Member, because Scotland is way ahead of England in restoring its peat bogs. It is a really important issue, and I congratulate Scotland on the approach it has taken. I hope the Minister will take it up with his colleagues in other Departments.

[Alan Brown]

I thank the hon. Gentleman for that intervention, and clearly I agree with him. It is great that he has recognised the work that is going on to restore peat bogs in Scotland. As he said, the UK Government’s tree-planting target is welcome, but I am sceptical that they have a plan in place to meet that target. They have never met any target for tree planting to date, so the idea that they can scale up massively in a couple of years is beyond belief. I was going to mention tree planting in Scotland later on, but in 2019, 85% of trees planted in the UK were planted in Scotland via the Scottish Government’s scheme. The Scottish Government have aggressively pursued tree planting—they have led the way on it—while the UK Government have not yet put plans in place to meet their ambitions.

There are too many policy gaps to mention, even though we have a lot more time today than we expected. We need to see an impact from the net zero aviation strategy, for example. I am not convinced by the plans that are in place. As the hon. Member for Leeds North West said, there is a transport decarbonisation plan in place, but when it comes to hydrogen and conversion of HGVs, we have heard the hon. Member for Bristol East say that not enough zero-emission buses are being produced. We really need to move quickly on these matters.

The hon. Member for South Cambridgeshire complimented the work that is being done on decarbonising the electricity system. That work is truly welcome, but there is still not a proper plan for ending unabated gas-fired electricity generation by 2035, nor a proper structured plan for the decarbonisation of the electricity grid to meet the 2035 target set by the Government. If they are going to meet the target of a net zero electricity grid by 2030, there are some things that I suggest the Minister needs to be cognisant of. The Government need to review the grid charging system, which will end the farce of Scotland having the highest grid charges in Europe. That system disincentivises the construction of renewable energy production in Scotland—puts it at a disadvantage compared with projects in England—but it does not help the UK to meet its net zero target, either. We need to make net zero a statutory consideration for Ofgem, and the Government need to review the capacity market to address its reliance on fossil fuels, and allow storage that is co-located with renewable energy to be able to bid into the capacity market. Bizarrely, that is blocked at the moment.

As I touched on earlier, the Government need to end their nuclear obsession. Instead of spending another £20 billion on a new station at Sizewell, not to mention the billions they want to invest in small modular reactors and the mythical advanced nuclear reactors, they should be investing that money in renewable energy—in green hydrogen production and storage. The UK has now fallen behind France, the Netherlands and Germany in terms of hydrogen production proposals, so an urgent rethink of policy development is required. The 5 GW hydrogen target is not ambitious enough. The Scottish Government have a 5 GW hydrogen production target, so surely the UK Government need to up their game.

The UK Government should be investing in pumped storage hydropower—a proven technology that allows dispatchable energy to be added to the grid when the wind is not blowing and the sun is not shining. This is something that can progress quickly. SSE is ready to progress with the Coire Glas scheme, and Drax is advancing plans to double output from the existing Cruachan dam pumped storage hydro plant. What is needed is a pricing mechanism to be agreed with the Government, like a carbon floor mechanism. I raised this with the previous Minister. Will the current Minister look at a pricing mechanism to allow pumped storage hydro to progress? It is a good use of renewable energy.

Wave and tidal turbine power—technology Scotland literally leads the world in— needs help to get to the next phase of scaling up. The industry requested a ringfenced sum of money in part 2 of the contracts for difference—round 4 is coming up shortly. Ringfencing money in part 2 has been done for floating offshore wind; all that the wave and tidal industry are asking for is the same ringfencing to allow them to compete and get a slice of the pie. It is believed that the Treasury blocked this ringfencing, which is ridiculous, considering that it would not have cost the Government any money. There is a risk that this technology will lose out and move abroad, and as happened with onshore wind, we will lose the opportunity to have the manufacturing set up in the UK and lose the export opportunities and growth that comes with that. Hopefully the Minister will listen the arguments. I would be more than happy to meet and discuss it, and he would be very welcome to meet industry representatives. Small changes could be made that will not cost the Government money, but could generate fantastic growth opportunities.

In Scotland’s commitments to the Paris climate change targets and net zero, we are genuinely leading the way. We were the first Government to set a net zero target with a date of 2045, the first to declare a climate emergency, and we have set up the Just Transition commission. Admittedly, we also did not meet our emissions target of a 55% reduction by 2020, a 51.5% reduction is still fantastic progress. In Europe, Scotland is second only to Sweden in terms of the scale of reduction achieved. Interestingly, one of the reasons Scotland missed its latest target is that the process under way of rewetting peatlands necessitates the removal of some trees. As the hon. Member for Rochdale (Tony Lloyd) pointed out, Scotland is doing fantastically with peat bog and wetland restoration, as well as having a fantastic tree-planting operation.

When it comes to energy production, Scotland has led the way in decarbonisation; last year, 97% of equivalent electricity demand was produced by renewable energy—this is absolutely tremendous. We have ambitious plans and we are making them happen; they cannot nor should not be blocked by decisions made in Westminster. I appreciate the UK Government does have ambitious targets, but as the report from the CCC shows, more policy and further intervention from Government are required—and they are required sooner rather than later.

[Sir Christopher Chope (in the Chair)]

Dr Alan Whitehead, I think you need to limit your remarks to 45 minutes.

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[Greg Hands]

Our position on the sixth carbon budget is unchanged, as the hon. Gentleman knows. However, I am a believer in an active Government, and publishing a set of strategies does not necessarily mean that we have reached the point that we want to reach: it merely lays out the map and sets out the process, which I think is very helpful. In terms of delivery, obviously the onus to fulfil these objectives is on not only the Government, but every citizen of this country and, indeed, the whole world.

We have just unveiled a landmark commitment to decarbonise the UK’s electricity system by 2035, to help us build a secure home-grown energy sector that is not reliant on fossil fuels and exposure to volatile wholesale energy prices, which as we know are very much in the news at the moment. However, the science could not be clearer: by the middle of this century, the world needs to reduce emissions to as close to zero as possible, with the small amount remaining sucked up through natural carbon sinks such as forests and relatively new technologies such as carbon capture. We are proud to lead the world in ending our contribution to climate change, not just because it is the right thing to do, but because we are determined to seize the unprecedented economic opportunity it brings. We want to build back better from the pandemic by building back greener and levelling up our country with new high-skilled, high-wage, sustainable jobs in every part of the United Kingdom. Those jobs will be spread across the UK, with specialists in low-carbon fuels in Northern Ireland, low-carbon hydrogen in Sheffield, electric vehicle battery production in the north-east of England, green finance in London, more engineers in Wales, and offshore wind technicians in Scotland.

The strategy builds on all the progress that the UK has already made. In June 2021, the UK Government set the sixth carbon budget at 965 megatonnes of CO₂ equivalent, a world-leading target that will mean a 78% reduction in greenhouse gas emissions by 2035 compared with 1990 levels. This is in line with the latest science, as the level recommended by our expert advisers at the Climate Change Committee, and is consistent with the Paris agreement’s goal of limiting global warming to well below 2 °C and pursuing efforts to limit it to 1.5°. The target would achieve well over half of the required emissions reductions from now to 2050 in the next 15 years.

Turning to the points raised during the debate, my hon. Friend the Member for South Cambridgeshire has pointed out that a parallel debate on COP26 is taking place in the main Chamber, so anybody watching the debate might wonder why there are not more Members here. The overlap has been considerable. He also rightly pointed out the UK’s huge success—in 2015, we emitted the lowest amount of CO₂ per annum since 1859—and then he got Opposition Members a little bit excited with his reference to the 1926 general strike. I do not think my hon. Friend thought of the 1926 general strike as something we would wish to emulate, but I noted from interventions and comments made by Opposition Members that they perhaps thought it was. It was very important that my hon. Friend quoted the 2019 figure, because emissions obviously went down quite a bit during the pandemic, so it is important that we look at a more robust figure, such as that from 2019. As he said, it was the biggest decline in the whole of the G20 since 1990: we emit less per person than the EU average, and less than Denmark or Norway. All of those were incredibly strong points.

I was thinking back to the 1990 benchmark for all those emissions. The nearest election to that time was the 1989 European elections, which were not memorable for anything other than the fact that they were the high point in the performance of the UK Green party. It was the year when the Green party got more than 10% of the vote overall. It ran on a manifesto that it was impossible to do anything to reduce emissions while still growing the economy. We had to reduce growth in the economy and reduce its size to do something about emissions.

As my hon. Friend the Member for South Cambridgeshire has pointed out, the incredible success in the 30 years since, during which the UK has grown the economy by 78% while reducing emissions by 44%, demolishes the case that was made at that time by the UK Green party and others. He also makes the good point that the hard work is yet to come. It gets more difficult and the low-hanging fruit has already been picked. Now we have the harder job ahead of us. He talked about carbon capture utilisation and storage and I refer, as in yesterday’s debate, to the fact that the Carbon Capture and Storage Association described Tuesday’s news as “amazing”. I will come back to the Scotland issue in just a moment.

On peatland, my hon. Friend rightly pointed out the Climate Change Committee’s recommendation to restore 67,000 hectares. Currently, only 32,000 hectares have been restored. We are committed to restoring 35,000 hectares by 2025 and 280,000 hectares by 2050. Other points included consumer choice and diet style and those also cropped up later in the debate, as well as the importance of nuclear power. I noticed that two Opposition MPs here today, the hon. Member for Southampton, Test (Dr Whitehead) and the hon. Member for Rochdale (Tony Lloyd), were first elected in 1997, running on a manifesto of ending new nuclear power plants in this country. It was part of the new Labour manifesto of 1997, which I think did so much damage to the nuclear industry in this country and effectively cost us a lost generation in nuclear capability.

I agree with my hon. Friend the Member for South Cambridgeshire that the decade of delivery has come.

[Alan Brown]

What is the Minister’s estimate of the capital cost of new nuclear that the Government are willing to commit the UK to?

[Greg Hands]

That is a slightly open-ended question, as the hon. Gentleman knows our commitment is to the existing Hinkley Point C facility. We are committed to bringing forward one further station for its investment case in this Parliament and on Tuesday we also allocated £120 million for a new nuclear innovation fund, which increases the optionality. What are the options for the UK in nuclear capability and capacity going forward? I just wish we had a more positive attitude on nuclear from the SNP. Scotland is part of this country’s nuclear heritage and it disappoints me continuously to see the SNP not seeing the opportunities available for Scotland in so many of our energy and climate change programmes.

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[Alan Brown]

Will the Minister give way?

[Greg Hands]

I will make some progress.

On transport, the hon. Member for Rochdale makes some good points. Let me tell him what we are doing on transport: the zero-emission vehicle mandate, improving consumer choice; further funding of £620 million for zero-emission vehicle grants; allocating a further £350 million of our up to £1 billion automotive transformation fund to support the electrification of UK vehicles; £3 billion on integrated bus networks; and a £2 billion investment to enable half of journeys in towns and cities to be cycled or walked by 2030. Those are big commitments.

The hon. Gentleman talked about homes and the boiler upgrade scheme. It is exciting, but slightly buried in all the news about net zero overnight, that one of the energy companies—it is Octopus Energy, but I expect others are either there or will follow—said that it is confident that by April next year, the installation price of a new heat pump will be equivalent to the price of a natural gas boiler. This is one of the important points about what the Government can do. The Government will not come round to everybody’s home, across the whole UK, and install a heat pump. That would be impractical and it would potentially be beyond the means of the Government and the taxpayer to do that. What we are doing is kick-starting a market and kick-starting private sector innovation to come along and do it, and we are already having an impact in what we are doing on heat pumps.

[Alan Brown]

The Minister is citing Octopus again, but can he tell me, then, what he thinks the installation price of an air source heat pump will be in a year’s time? Did he listen to the points that I made about all the other installation costs that need to accompany an air source pump? Can he give an estimate of what the total cost of that installation would be?

[Greg Hands]

I will not go further down the road of making price or market predictions. What the Government need to be in the business of doing is kick-starting the market, stimulating the market, and getting it going. I do not think it is in my interest to set out predictions of what I think supply, demand or pricing might be in a year’s time.

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[Greg Hands]

I am going to make a bit more progress. We intend to upgrade as many homes as possible to energy performance certificate band C by 2035.

The hon. Member for Kilmarnock and Loudoun (Alan Brown) talked about the heat pump grant scheme. I am amazed by that. It is a devolved matter, but there have been discussions with the Scottish Government about the Scottish Government joining up with us and participating in this scheme; but if I understand the situation correctly, they have refused. The irony is that the Ofgem team that will be administering the England and Wales scheme will be based in Glasgow, with more than 100 new members of staff. Unless they have a very long commute, they will not be able to benefit from the scheme that they are helping to administer, due to the fact that the Scottish Government have said that they will not be joining the UK Government in the scheme. That is a great pity.

[Alan Brown]

Will the Minister give way?

[Greg Hands]

If the hon. Gentleman has some hot news from the Scottish Government, over to him.

[Alan Brown]

I have not had time to get on the hotline to them. On the point about the additional members of Ofgem working in Glasgow, that is very welcome and I hope they will not have a long commute—that would not be good for climate change overall. The more serious point is about what funding is coming to the Scottish Government to run their own scheme.

[Greg Hands]

The Barnett consequentials will of course be enacted in the usual way as we would expect, but why not join with a scheme that has been very well received, that I think will be a market leader and that will, ironically, be administered out of Glasgow? It makes perfect sense for the Scottish Government to come on board with us.

We have made huge investments in offshore wind and other renewables in Scotland. The hon. Member for Kilmarnock and Loudoun mentioned the 5 GW target for hydrogen being less than in Germany. It is the same as Germany’s target—they have exactly the same target. On wave and tidal, we have already put down more than £175 million in innovation funding across this country, with 10 MW already deployed. In many senses, they are still pre-commercial technologies, but we are making the investment to increase the optionality that will be available in wave and tidal.

I welcome the hon. Gentleman’s overall support for the UK’s targets and ambitions. He mentioned reforms to the electricity market. We recently published a call for evidence on actions to align capacity markets with net zero and actions to encourage the participation of more low-carbon capacity. We are committed to accelerating the deployment of low-cost renewable generation through the contracts for difference regime and by undertaking the review of the frequency of CfD options.

The hon. Member for Southampton, Test, in a comprehensive speech, congratulated us on our success in decarbonising electricity generation. I go back to the commitment given to complete that process by 2035. He said that we are ignoring other areas. I do not think that is fair and I do not think that is the case. He talked about adaptation. We are currently developing a national adaptation programme, which is due in 2023. DEFRA published the response to the Climate Change Committee’s adaptation report, which goes into more detail on our progress on adapting to climate change.

On fossil fuels and net zero, of course net zero does not necessarily mean zero residual emissions in all sectors of the economy. It is, after all, a net zero figure. In aviation, agriculture and industry it may not be feasible, practical or cost-effective to eliminate all emissions.

I thank the hon. Member for Southampton, Test for his praise for the hard work put in by my officials on producing the reports.

The hon. Member for Kilmarnock and Loudoun asked, “Where is the Treasury review of the cost of net zero?” I have news for him—I emailed it to him about 15 minutes ago. It was published on Monday night. It is entitled, “Net Zero Review: Analysis exploring the key issues”. There are 135 pages for him to digest before I see him next, when he can ask me questions about it. It was published at the same time as, or just before, the net zero strategy.

In the past few years, the Government have gone further than ever before to ensure that the climate is at the heart of our decision making. We have taken new approaches to embed net zero in spending decisions, including requiring Departments to include greenhouse gas emissions in their spending review bids and their impact on meeting carbon budgets and net zero. As I already said, we have established two Cabinet Committees. The integrated review reflects that and ensures that it is the Government’s No. 1 international priority. We are also using the Environment Bill to require the Government to reflect all these issues in national policy.

We are committed to taking a whole-system approach to the net zero challenge, ensuring that we understand and can navigate the complex ways that our climate goals will interact with other priorities for the country. As I mentioned, we published the heat and buildings strategy, which sets out the required actions to decarbonise buildings over the next decade, helping meet near-term carbon budgets and getting us on track for net zero by 2050.