Climate Change Committee Progress Report 2021

Debate between Alan Brown and Tony Lloyd

Thursday 21st October 2021 Westminster Hall

[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?

--- Later in debate ---

[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.