Net Zero (Economic Affairs Committee Report)

Baroness Bennett of Manor Castle Excerpts

Monday 16th October 2023 Lords Chamber

[Baroness Bennett of Manor Castle (GP)]

My Lords, it is a pleasure to take part in this debate. I listened particularly carefully to the speech of the noble Lord, Lord Frost, who represents a small but very vocal segment of the debate covered by this report and the broader net-zero issue. I would like to correct one statement the noble Lord made about the Royal Society report. It does not assume a halving of electricity demand. I will quote a paragraph from the report:

“The demand for electricity in Great Britain in 2050 is taken to be 570 TWh/year in this briefing, roughly twice current annual demand”.


I thank the committee for the report and the noble Baroness, Lady Kramer, for her excellent introduction. I will make three points, pairing the 86 pages of the report and the Government’s 28-page official response—I am not counting the letter from the right honourable Mr Rees-Mogg, who was briefly relevant as the Secretary of State—because, despite the change in governing regime, it seems that there has been disturbingly little change in government energy policy.

The noble Baroness, Lady Kramer, focused on paragraph 121 of the Economic Affairs Committee’s report, and I make no apologies for focusing on it as well, because it is absolutely crucial. It quotes Dr Fatih Birol, the executive director of the International Energy Agency:

“Nobody should imagine that Russia’s invasion can justify a wave of new large-scale fossil fuel infrastructure in a world that wants to limit global warming to 1.5°C”.


But in the Government’s written response, as in their subsequent response, there is reference to launching a

“new oil and gas licensing round”,

which is exactly what they have gone ahead and done. You might think that they have not read the report at all. The noble Lord preceding me referred to stranded assets. I point out that the Committee on Climate Change estimates that new oil and gas licences take, on average, 28 years to begin producing. We are talking at a time when we clearly cannot use any significant amounts of oil and gas.

My second point is on the committee’s recommendation that the Government publish an “energy demand reduction strategy”, focusing particularly on home energy efficiency. This is just one of the many disaster areas of energy policy. It is worth noting that insulation rates in homes today are well below where they were when David Cameron, as Prime Minister, decided to “cut the green crap”. Listening to the Prime Minister’s comments at the recent Tory party conference, you might have thought that, given the committee’s report’s focus on the need for green skills—these are often debated in your Lordships’ House—they might have been a focus of Tory education policy. So can the Minister say how the proposed new British baccalaureate, the major education policy announcement, fits with the green skills agenda?

Thirdly, on carbon pricing, the committee calls for the provision of

“clarity to investors and … incentives to fund projects necessary for the transition”.

The official government response here has since been overtaken by events. We have recently seen a sharp decline in the carbon price, attributable to the Government’s decision to release 53.5 million additional allowances from a reserve pot to the market between 2024 and 2027. That means that emissions prices have fallen to less than half of the EU equivalent, when they used to be more or less at parity.

I credit the Financial Times for noting the financial and economic impact of this. It has left British exporters facing hundreds of millions of pounds in EU carbon border taxes within the next decade. That means that money that would have come to the British Treasury will now go to the EU; are the Government happy about that?