Growing Back Better Report

Barry Gardiner Excerpts

Thursday 25th February 2021 Commons Chamber

[Philip Dunne (Ludlow) (Con) [V]]

First, I thank the Chair and members of the Backbench Business Committee for granting the opportunity to make this statement three sitting days before the Chancellor of the Exchequer rises to make his own statement to the House on his 2021 Budget. I am also grateful to the Exchequer Secretary for alerting me to the reason why she is not on the Treasury Bench; I know she is watching proceedings virtually, and I am grateful for her message earlier.

I would also briefly like to thank my colleagues on the Environmental Audit Committee, both past and present, who have been involved in this inquiry, which led to the report that I introduce today. From very early on in our work last year, it became abundantly clear that in creating policies to revive the economy after the devastating impact of the covid pandemic, the Government must take every opportunity to grow back greener—the name of our report. We have a golden opportunity to do so, with the Prime Minister genuinely committed to giving global leadership to this issue this year, as he will be hosting the G7 in Cornwall in four months’ time as well as the largest international conference ever hosted in this country, under the auspices of the United Nations conference on climate change in Glasgow, in nine months’ time.

In November last year, the Government intensified their ambition to meet their targets and obligations under the UN convention and the Paris agreement by increasing their commitments in publishing the nationally determined contribution for the UK, setting an example to the other countries that will be coming to the UK this year by confirming a 68% targeted reduction in 1990-level emissions by 2030—a key milestone on the path to net zero Britain by 2050. When the world congregates here, whether physically or virtually, for COP26, we want the UK to have a demonstrably powerful case of action, not just words, to inspire the rest of the world as to how a major industrialised economy can meet the challenge of climate adaptation.

It is therefore particularly critical that we do not miss the other clear opportunity that presents itself as the Chancellor decides next week which further exceptional fiscal and monetary levers to pull to revive the economy from its greatest contraction in over three centuries. I can put it no more simply than this: we must not repeat the mistakes of the past as we start to recover from covid. We must ensure that the measures we take will also materially help the goal of net zero Britain.

We have much to commend in how the Government have gone about the recovery to date. The Prime Minister’s 10-point plan for a green industrial revolution is a vital step towards the Government’s twin objectives of economic recovery and climate change adaptation. Similarly, the Chancellor’s national infrastructure strategy was accompanied by a revision of Green Book guidance so that investment decisions properly account for overarching Government net zero policy objectives.

These high-level strategies are now being backed up by further key staging posts, such as the energy White Paper, but the pause in progress on delivering Government policy caused by the covid crisis over the past 12 months must be overcome as the detailed plans and policies so vital to delivering on these objectives must be brought forward and implemented at pace and scale. Our Committee keeps receiving confirmation that the private sector is standing by with a wall of money to invest in projects that make a genuine contribution to the economic recovery and to net zero, and they need the demand signals and policy structures in place from Government to do so.

One policy for recovery that was brought out as an eye-catching measure when first announced as part of the summer economic package last year, which we applauded as showing a strong and positive direction of travel, is now, I regret to say, threatening to catch the eye for all the wrong reasons. Unless it is urgently overhauled, the green homes grant, with its ambitious target of retrofitting energy efficiency measures for up to 600,000 homes, risks giving this vital Government support a bad name.

Installers are quoting for work, but instead of taking on more staff and investing in training them to generate the green jobs of the future, they are actually having to lay off staff because homeowners are experiencing such unacceptable delays in having their planned work approved or voucher approvals paid. In many areas of the country, there are many homeowners who want to take up the Government’s offer of help with energy efficiency measures, but cannot find accredited installers willing to quote.

Even though funding for this scheme was extended until March 2022, which is welcome, it still seems mired in administrative delay, and now we read press reports that it might be ended entirely. This would be a grave error. There are 19 million homes that need energy efficiency measures to help to reduce the 17% of carbon emissions emanating from our homes. This has to be tackled with support from Government. The scheme needs to be overhauled and extended, not scrapped.

The Chancellor, in his Budget next week, will be the first who has absolute freedom to propose changes to the rates of value added tax, or to remove certain goods and services from VAT altogether, following Brexit. What better opportunity is there to use this new flexibility than to reduce rates of VAT on repair services and reused or recycled materials, and to encourage low-carbon technologies and energy efficiency improvements to our homes by cutting the VAT payable on green home upgrades? My hon. and right hon. Friends in the Treasury and their officials will shake their heads and tell me that any revenue forgone from such measures will have to be found from somewhere else. Well, quite, and increases in taxation are bound to be less popular than reductions, but what a powerful means of addressing our throwaway culture and demonstrating that the Government genuinely back repair, reuse and recycling of goods. Is it not the case that such an investment in a circular economy would pay massive dividends in the long run?

Lastly, I would like to highlight our recommendations on the Bank of England’s response to the economic crisis. I start by thanking the Governor of the Bank and his officials for the constructive approach that they have taken to our work, and by recognising the Bank’s excellent record in highlighting the financial risks from climate change above all other central banks. It was the first central bank to publish its own climate-related financial disclosure.

However, we regard the Bank as having missed a trick when introducing its financial support package for firms making a material contribution to the UK economy last year. In our view, the Bank’s purchase of commercial paper in those corporate businesses ought to have required more stringent sustainability conditions, as happened in other countries. In particular, the publication of climate-related financial disclosures should have been a requirement, in line with the Government’s green finance strategy.

The Governor of the Bank of England has rightly sought a little more clarity from the Government in the mandate that they set for the Monetary Policy Committee in its conduct of UK monetary policy. Our Committee has recommended that the Chancellor should make explicit that the Monetary Policy Committee should have regard in its work to the Government’s climate objectives, which it already does, but also to their nature objectives. That single, simple step would also assist the Bank in adjusting its corporate bond purchasing policy to support those objectives better in the future, to lead the way in reducing the carbon intensity of the UK corporate sector overall.

Our present challenges in the midst of this pandemic are being addressed by the ingenuity of scientists, the skill of the vaccine taskforce and the heroic efforts of the NHS and all its volunteers in organising the vaccine roll-out at such pace, but I am sorry to say—this will come as no surprise to the House—that there is no vaccine that is proof against runaway climate change. It is a challenge that requires all our effort and ingenuity, and changes in behaviour, to address.

The Government, in their response to the crisis, have shown encouraging signs of promoting a green recovery. Our report points out that there is much more to be done to sustain the recovery in a way that sees the UK set genuinely on a track to net zero. I commend the report to the House.

[Barry Gardiner (Brent North) (Lab) [V]]

I thank the Chair of the Committee not only for the way that he presented the report but for chairing the Committee with such patience, tact and, often, good humour.

Covid has caused unprecedented hardship, physical, mental and economic. The Government’s own figures suggest an 11% contraction of our economy this year and a loss of 1.5 million jobs from the high street. That comes just as the economy is embarking on a profound transition away from transport and heating infrastructures based on fossil fuels, which will see even more jobs lost in those old industries, with unemployment forecast to rise to 2.6 million this year.

The report is clear that not only is retrofitting and upgrading the 29 million UK homes essential to meet our 68% emissions reduction target by 2030, but it would be a huge creator of new jobs. Does the Chair agree, then, that the Government should bring forward much greater investment in energy efficiency programmes and resolve the serious delivery problems around the green homes grant?

[Philip Dunne]

I am grateful to the hon. Gentleman, who is a valiant supporter on the Committee, for his comments about our report and the way the Committee operates. He is absolutely right. This measure, when introduced last year, was a really positive signal that, of the Government’s manifesto commitment of more than £9 billion to invest in energy-efficiency improvements to buildings, £1.5 billion was to go towards owner-occupiers and the private rented sector, whereas the rest is likely to go to social housing and other types of public building.

However, the scheme has been suffering from very low take-up because of the extraordinary administrative burden that was imposed on accessing it; the lack of qualified tradesmen to undertake the work, because they have to go through a particular certification process that few companies have been prepared to secure; and the challenge of the duration of the scheme. It is difficult to persuade contractors to take on staff to do the work or even, frankly, to quote for the work if the scheme is coming to an end in a short period. It was initially a six-month scheme. Thankfully, it was extended to an 18-month scheme, running out only 13 months from now, but that is not enough. We think that this scheme should endure for the whole Parliament, and it should be supported and improved by the Government. We hear from newspaper reports that there is a risk of it being scrapped. That would be a retrograde step, particularly at a time when we have the eyes of the world on us for the schemes we are introducing to address some of the carbon emission challenges and the targets we have made.