Net Zero

Baroness Hayman Excerpts

Thursday 26th January 2023 Lords Chamber

Asked by

[Baroness Hayman]

To ask His Majesty’s Government what steps they plan to take in response to the report by Chris Skidmore MP Mission Zero: Independent Review of Net Zero, published on 13 January.

[Baroness Hayman (CB)]

My Lords, I declare my interest as co-chair of Peers for the Planet and express a debt of gratitude to Chris Skidmore MP and his team for providing the important, detailed and comprehensive report that we have before us today. I am also grateful to all noble Lords who will be speaking and to the Minister himself for being here to respond, given his prodigious workload in your Lordships’ House

It is worth emphasising at the outset that the Mission Zero report was not asked to provide a stocktake of the Government’s progress on net zero—that is a job for the CCC. Rather, the exam question the review was set was whether, given the recent dramatic global changes, particularly in energy, the UK can meet its net-zero ambitions in a way that is affordable and efficient and encourages business and enterprise. The report’s answer is an emphatic, “Yes, we can”, but with the crucial caveat that we will achieve sustainable growth only if we are given the right leadership and policy responses from government. To quote Energy UK, the industry body,

“the Government must seize this golden opportunity to drive a broad economic recovery and become a global leader in new technologies for years to come. Based on the evidence set out in today’s report, further delay would both be inexplicable and hand that economic opportunity to other countries.”

The effects of a once-in-a-generation cost of living and energy crisis have, as we know, been profound. The global dynamic has shifted, and a great industrial race to decarbonise has been triggered, with the US, China and the EU leading the way. The private sector understands this very well, which is why industry and business leaders across all sectors are urgently calling for clear, consistent and stable policy direction, effective regulation and sectoral plans so that they can plan and attract investment for a pro-growth transition.

However, the business community is increasingly concerned that the opportunity to keep up with those leading this global growth race is slipping away from us. As the director-general of the CBI warned this week, a lack of government strategy risks “haemorrhaging” business investment and green growth to other markets. He flagged that at the very moment the US and the EU are going bigger and harder, we are seeing very little “urgency and boldness” from the Government. If economic opportunities are not to be lost and investment decisions delayed, we need an urgent government response to the call made in the review for greater certainty, consistency and clarity across net-zero policy. If we embrace that strategic approach, the UK has every opportunity not only to keep up but to lead.

We have already seen how forward-looking, well-balanced government policies and regulation can support the development of new low-carbon industries and British success stories. For example, we invented the contracts for difference model that has powered the breakout success and cost-competitiveness of the onshore and offshore wind industry. Such innovative models can ensure that we steal a lead in other technologies as well, including solar, geothermal, battery storage and carbon removals. Policy intervention and smart investment could also provide breakthroughs in other areas, from low-carbon steel to plant-based alternatives to meat; from electrified kilns for brickmaking and ceramics to green fertilisers.

While the next stage of the transition will undoubtedly require careful management, the UK has proven that it can pioneer complex system change and create world-leading sectors in the process, where well-constructed, practical policy is in place from government to support that process. At the World Economic Forum in Davos last week, the noble Lord, Lord Stern, chair of the Grantham Research Institute, said:

“The world has in its hands a new growth and development story driven by investment and innovation in green technology … it is a much more attractive and inclusive story than the dirty and destructive paths followed in the past.”


However, to capitalise on these opportunities, we need to confront another major message from the report: at the moment, we simply do not have the necessary strategic planning, infrastructure and delivery mechanisms to nurture sustainable growth. It is evident that private and public sector stakeholders have little confidence that the Government are actually making good on the Prime Minister’s welcome promise to ensure that UK climate leadership

“pervades all aspects of Government now”.—[Official Report, 9/11/22; col. 263.]

The report highlights that we do not have the whole-government approach that such a multifaceted and complex challenge as the transformation of our economy—because that is what we are talking about—requires.

Of course, political leadership at the very top of government is essential, and the disappearance of the Cabinet committee chaired by the Prime Minster is hardly encouraging. However, we also have to recognise that policy change and delivery have to take place at every level, and that not only businesses but civil society and, crucially, local government all have pivotal roles to play. If we are to achieve the Government’s aim of

“matching world-leading ambition with world-leading delivery”,

we need the structures in place to realise that commitment and secure the opportunities of net zero.

I therefore hope that the Minister will take very seriously the recommendations in the review aimed at overcoming the current lack of joined-up policy-making and to embed action across all levels of government, all nations and all departments. The Government should look urgently at two specific proposals in this area, put forward both by the review and by committees of this House and the other place: a net-zero test across government policies and legislation, and an office for net-zero delivery to drive policy in areas where progress, frankly, is painfully slow at the moment.

As the review says, unless the Government take a strategic and holistic approach to both policy and delivery:

“Climate commitments and net zero targets remain just words on a page without a clear, consistent, and stable transition plan.”


It is clear to me from reading the report and from all the briefings I have received in the run-up to this debate, particularly from business, that not acting risks costing far more than the necessary investment to make the transition and the growth that will follow.

As an immediate positive response, the Government could show their direction of travel in areas where we actually have legislation going through this House and the other place. Energy efficiency is a no-brainer for most people. There are amendments to both the Energy Bill and the Social Housing (Regulation) Bill which could transform both cost and quality of life, yet we are not making progress. Also, there is wide-ranging support from all sectors for giving Ofgem a regulatory duty to support the net-zero transition, so why are the Government opposing such amendments?

At COP 26 in Glasgow, Rishi Sunak pledged to make the UK the world’s first net-zero financial centre. Yet the Financial Services and Markets Bill totally fails to take the opportunities to make that pledge a reality, and we are told that amendments are not necessary. The levelling-up Bill could catalyse action to support net zero by fundamentally reforming the planning system through the development of green skills and ensuring that our climate and nature objectives are in place, while also delivering the cheapest forms of energy generation: onshore wind and solar. Amendments already made to the Procurement Bill present opportunities to stimulate the innovative businesses and supply chains of the future. I therefore hope for a positive response from the Minister on these immediate issues and on the longer-term strategic direction.

We often discuss climate change in terms of the moral imperative we have to safeguard the future for our children, our grandchildren and the planet. For me, that imperative is overwhelming. However, I hope that for those who are anxious about the costs entailed in attaining net zero, this report will provide some comfort that at this global tipping point, responding to the climate and nature crisis is not only the right thing to do but the right economic strategy.