Making Britain a Clean Energy Superpower

Chris Skidmore Excerpts

Thursday 9th November 2023 Commons Chamber

[Chris Skidmore (Kingswood) (Con)]

I draw the House’s attention to my entry in the Register of Members’ Financial Interests.

Thank you, Madam Deputy Speaker, for calling me in what is my last Gracious Speech debate. My constituency of Kingswood is being formally abolished in the boundary changes and there is nowhere for me to go, but I have had a great time participating in these debates over the past 13 and a half years.

I remember my first Gracious Speech debate. A loyal Back Bencher who knew no better, I was sitting in the Library, and a Whip came around and asked whether I might participate. I said, “Yes, sure, I’m happy to. Would five minutes be okay?” He said, “Yes, come in, but we actually need you to speak for 45 minutes, if that’s all right.” I am delighted that we have far more people in the Chamber now compared with that debate, when I was one of the few Members in the room. That demonstrates, I think, the interest and the enthusiasm on both sides of the House for focusing on the importance of the energy transition not just to tackling the climate crisis, but for the opportunity it presents the UK economy.

I was delighted to hear in the Secretary of State’s speech her enthusiasm for setting out in detail the UK’s progress internationally. We are a clean energy superpower. We can debate among ourselves the finer policy details, but the reality is that over the past 15 years we have decarbonised further than any other G20 nation. We have reduced our emissions by 50%, while at the same time growing our economy by 70% on 1990 levels.

That is a paragon and a model that all other nations look to, but it is important that once we have earned a reputation, we seek to preserve that reputation. Many countries now are following the UK, and we are now in a new global net zero race. We may have gone further and faster initially, which made us able to attract inward investment into this country as a result of our climate leadership, but other countries are following up further and faster in our tracks. I am reminded of the tale of the tortoise and the hare; the tortoises of the world are coming up, and we cannot just sit there pausing, thinking that this is good enough.

We have the United States Inflation Reduction Act, setting out £370 billion of investment in clean technologies, and the EU’s green deal, with the opportunity of up to €1 trillion of investment, but it is not just the investment that is important here—it is the certainty. I chaired the net zero review and published the “Mission Zero: Independent Review of Net Zero” report in January. We were very kindly granted a debate in both Chambers on the recommendations of those reports. Above all, the narrative that that mission zero report set out was that net zero is not a cost but an opportunity and an investment, and that there are two paths ahead of us.

The Secretary of State talked about two paths, and I will come on to that in a moment, but my own analysis is that the net zero path can potentially bring up to £1 trillion of inward investment and up to 480,000 new additional jobs by 2035, if we so wish. However, that path requires commitment from the Government to provide certainty, clarity, continuity and consistency—the four Cs that we identified—and a mission-based approach that provides long-term programmatic certainty. That certainty is almost more important than the money.

If we look at what the States has done, the 45Q and 45X tax credits are guaranteed until 1 January 2033. The Kreditanstalt für Wiederaufbau programme in Germany and the MaPrimeRénov’ energy efficiency programme in France are guaranteed over a decade. In contrast, in the UK we are still exposed to the tyranny of the spending review, and many of our programmes, whether in energy efficiency or clean energy, are bedevilled by the fact that they only last for three to four years at most and then have to start all over again. That does not provide the certainty to build out supply chains, it does not provide certainty for local authorities or regional Mayors to make investment, and it certainly does not provide the certainty needed for inward private investment to come to this country.

Let us be clear: of course there is a capital cost to energy transition and there is capital investment that needs to be made, but once the capital investment is made, the operational cost is far less than for fossil fuel technologies. However, that money will come above all not from the taxpayer, but overwhelmingly from private investors, who need certainty. Certainty does not come only from Government policy, legislation and regulation, although the net zero review was very clear in setting out 129 recommendations for how Government and Parliament can provide frameworks to ensure that investors have the opportunity to reduce delays and unblock the current problems whereby people cannot get grid connections until 2035. I welcome the progress that is being made on that, but certainty also comes from having cross-party consensus.

What is cross-party consensus? It does not necessarily mean that we will agree on everything. It is right in this democratic nation that we discuss the details of policies and hold each other to account, but let us understand that the consensus we need on climate was fought for by working closely together. The Climate Change Act 2008 was passed by the then Labour Government. The right hon. Member for Doncaster North (Edward Miliband) was the Secretary of State at the time, but he had the political courage to accept an amendment from the Conservative party, then in opposition, to raise our ambition from 60% emissions reduction on 1990 levels to 80%.

The legal framework that we had in place, with the carbon budgets process, and on top of that the Climate Change Committee acting as an independent advisory body—it does not make any policy recommendations, and to suggest that it does is deeply flawed, because all it does is to report back and advise on policy decisions, whoever makes them, whether it is the UK, Scottish or Welsh Government or even the Opposition—has been admired across the world as a paradigm of stability. Not only that, but it allowed me, as the Energy Minister back in 2019, to bring net zero into law.

Why was net zero so important for developing a clean energy superpower? Because it meant that there was nowhere to hide. No one could claim to be in that 20% that was too difficult to tackle. Net zero was everyone’s business, and with that came a moment when net zero went viral. If someone had told me back in 2019, I simply would not have believed that 93% of global GDP would have now signed up to a net zero target in some form.

However, for the UK that means that investment is now going elsewhere unless we raise our ambition. The terms of the game have changed in this year alone, partly due, obviously, to what has happened in geopolitics and the cost of oil and gas crisis generated by Russia’s illegal war in Ukraine. All countries in Europe have woken up to the fact that the answer to tackling the cost of gas crisis is to build out more renewable power. Even Ukraine has built 18 times more wind turbines than we have built onshore in the UK. There is only a finite amount of labour and investment, and we have a political choice to make whether we want that to come to UK, or whether we want to see it onshored elsewhere. I want to see it come to the UK.

We must set our priorities very clearly. Our priority must be that we want private investment to come to this country. We should retain that consensus and that ability to understand that, whoever becomes the next Administration at the next general election—I am not making a party political point here—we still need to work together. We all live under the same skies. We all operate under the same climate. Carbon dioxide does not care whether you are a Labour, Tory or SNP MP. All that matters is the real-terms emissions reductions we need to see.

When it comes to those emissions reductions, it is not about 2050; we cannot keep on kicking the can down the road. As COP28 will show, the globe will commit to a trebling of renewables and a doubling of energy efficiency measures in order to meet a halving of emissions by 2030. The UK needs to lead on the 68% emissions reduction target that it set in its own nationally determined contributions. The decisions we make today count not just for 27 years’ time, but for seven years’ time. That is what is at stake here.

That brings me, in conclusion, to the question of the future use of fossil fuels in this country. I understand that it is a closely fought debate, and unfortunately it has become politicised. I regret the decision that has been taken, but let us focus again on the evidence at hand. To start with, everyone in this Chamber, as far as I know, understands that we will need to continue using oil and gas. The Committee on Climate Change has set out the so-called balanced pathway, working alongside the North Sea Transition Authority, to recognise that we will still need to use oil and gas into the 2050s, but that we should do it with our existing wells and fields.

In reality, when it comes to looking at the future of oil and gas in this country, I do not belong to Just Stop Oil—I am not some eco-extremist just because I signed net zero into law, which was the bare minimum we could do. I saw net zero as a conservative mission, recognising that one of the priorities of the Conservative party, if anything at all, is to conserve. At the same time, it allowed us to generate economic growth and to ensure that all jobs, no matter the industry, were protected.

I am glad that we have raised the issue of jobs and people in oil and gas communities, because we must think about the individual communities and the people who work in those industries. They are highly talented and highly skilled, and we absolutely need their support to ensure that we can have a successful transition. The net zero review set out that we need an offshore industries passport; we need to make it far easier for individuals to move across into the industries of the future.

Politics is about priorities and deciding where investment goes. The Secretary of State mentioned the coalmines in the 1980, and in a way, I agree with her. Looking at what is left in the North sea, the decisions in the King’s Speech will mean, as Carbon Brief and a number of other environmental organisations have demonstrated, that instead of taking 95% of oil and gas out of the North sea basin, we will take out 97%—the equivalent of two weeks’ worth of oil and gas a year. That is the reality of what this energy security supposedly means.

It is not just me saying that. I have been handed this Conservative campaign headquarters brief, so I assume CCHQ wants me to read from it. It says:

“Even with continued licensing, production from the UK Continental Shelf is projected to decline at 7 per cent annually, this decline is faster than the average global decline”.

I even have the Conservative research department brief agreeing with me that there is not enough oil and gas in the North sea to make a difference; we will still be dependent on foreign oil and gas in future. It will predominantly be oil, and we do not have the refineries to be able to refine it, so it will still have to go the Netherlands and it will still be sold on international markets by foreign companies. Rosebank is operated by Equinor, a Norwegian company. I have nothing against Equinor, but we cannot pin a claim of energy security on the production of future oil and gas.

If we want to deliver effective energy security, we need to turn the debate on its head, because we have not really focused on what we need to achieve, which is a reduction in demand. We have been speaking a lot about supply, and that is fantastic, but if we want to be a clean energy superpower, we need to focus on our ability to reduce demand through energy efficiency measures such as heat pumps, and through understanding that we can reduce our gas demand, which is at the mercy of foreign petrostates and international markets, by up to 40%.

I know that the debate on oil and gas is emotive, and, to be honest, it is not helped by the performative protest of Just Stop Oil, which does not get anyone anywhere. No one in this Chamber supports Just Stop Oil. If we are honest, as democratically elected representatives, it is beneath us to suggest that any of us is in the same camp as Just Stop Oil. We are diametrically opposed, because we come to this Chamber to have democratic debate, across parties, about what is needed for the future, not to oppose for opposition’s sake. In understanding what needs to happen with the net zero transition, we need to ensure that we work together using the existing legislative apparatus—the CCC, the carbon budget process—and that we continue to lead, but that requires political certainty and political stability.

As I said, this is my last Gracious Speech debate, and, although I have so far supported every single such Speech in my parliamentary career, unfortunately this will be the first time that I am unable to vote for the King’s Speech. I apologise to His Majesty in advance— I hope that he does not mind—but I will not be put in a position of supporting new oil and gas licensing when it is not needed, either for environmental reasons, obviously, or for economic reasons.

This year alone, we have seen investment in oil and gas plummet. We have now seen investment in solar rise, to the point that it is at parity with oil and gas. If we continue to suggest that we can produce oil and gas forever, we will let down the communities that we need to transition. That is the point about the coalfields: we will end up being the Arthur Scargills of this world, claiming that we can forever continue mining coal. We cannot continue to drill for oil, because there is no oil left to drill. That is the economic reality that investors already understand. They are moving away from fossil fuels, and in 10 years’ time, people will look back at this debate and recognise that Westminster and Whitehall were behind the curve. The private sector and the markets are moving already. We need to listen now and clearly if we are to protect jobs for the future.

--- Later in debate ---

[Ms Ghani]

I am sure that putting that forward now means that the record will reflect it. If it was not £37 million, I dread to think what it was.

My hon. Friend the Member for Totnes (Anthony Mangnall) made a fantastic comment that maybe all the members of the Business and Trade Committee should be Privy Counsellors—yes, but only if previous members of the BEIS Committee are offered that, too. He spoke about the fact that we should not forget about the growth in our economy—it has grown by 78% since 1990—and the 46% reduction in emissions. We must be positive and promote what we have been able to achieve. He spoke about marine energy and maritime power linking into a local church. I am intrigued—I want to be invited to come by and take a look.

There were contributions from the hon. Member for Nottingham East (Nadia Whittome) and—forgive my pronunciation—the hon. Member for Kirkcaldy and Cowdenbeath (Neale Hanvey). I think it is best that the SNP Members reflect on the points that he raised. The hon. Member for Jarrow (Kate Osborne) spoke, as did the hon. Members for Wakefield (Simon Lightwood) and for Gordon (Richard Thomson). I never thought we would end up on an SNP love story, but we are all going to be thinking about that over the weekend.

I am anxious about how much time I have left to speak. I am closing the debate as a Business and Trade Minister, and have many more opportunities coming up to help ensure that we deliver on growing the economy and achieving net zero. We have a couple of programmes of work that were reflected in the King’s Speech in the Trade (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) Bill and the Digital Markets, Competition and Consumers Bill.

Turning to the subject of today’s debate, the Government are already turning the country into a clean energy superpower. “Already” is the important word there, because while the Opposition might try to claim otherwise, this work is well under way. Let me remind the House of the formidable record we are building on. The UK achieved the fastest rate of greenhouse gas emission reductions of all G7 countries, while renewables already generated over 48% of our electricity in the first quarter of this year—the highest ever level. Of course, we know we can and must go further, which is why the UK has one of the world’s most ambitious 2030 targets. However, the Government are also acutely aware that we cannot ask our citizens and businesses to pay undue burdens for achieving our net zero goals, particularly in these challenging economic times. Nor can we ignore the fact that Putin’s war of aggression means that we are living in a more dangerous world with far more complicated supply chains. As the Secretary of State for Energy Security and Net Zero has already explained, it is only right that we reduce our reliance on volatile international energy markets and hostile regimes. She will be doing so through legislation such as the Offshore Petroleum Licensing Bill.

The Opposition talk about strategies and plans, so let me remind the House that the Government have them in abundance. In fact, the Government’s green strategies aim to drive £100 billion of private sector investment into our green industrial base by 2030, supporting around 480,000 jobs by the same date. I am surprised the Opposition are not welcoming that.

However, the Government are not just focusing on words; they are taking action. Between 2020 and 2023, my Department alone supported more than £28 billion of net zero-related inward investment, creating 30,000 jobs. Thanks to our work, the country’s economic geography is also shifting—from clean technology development in the midlands, offshore wind in the north-east and Scotland and turbine manufacturers in Hull, to innovative hydrogen-powered buses in Northern Ireland. With the North sea transition deal, the Government are helping workers, businesses and the supply chain in fossil fuel-related industries to adapt to a net zero future, providing £20 billion of funding to encourage the early deployment of carbon capture, usage and storage, and to unlock private investment and jobs. Whether we are talking about our recently announced plans for carbon capture clusters in the north-west and north-east, the first 15 winning projects to receive investment from the Government’s £240 million net zero hydrogen fund, the port towns that stand to benefit from the £160 million-worth of floating offshore wind manufacturing schemes, or our freeports and investment zones, our policies are creating jobs, reinvigorating communities and opening horizons the length and breadth of the country.

It would be remiss of me not to talk about my own brief, which covers industries and, fundamentally, the automotive, aerospace and maritime sectors. Here again, my Department is playing an instrumental role. We recently announced a joint investment package with Tata Steel, worth £1.25 billion, to replace end-of-life blast furnaces with electric arc furnace steel production. That will preserve steelmaking for generations to come and enable green steel production to take place in the UK. While we are helping manufacturers, including steel producers, to access lower-cost hydrogen through the net zero hydrogen fund, we are also enabling our world-renowned automotive sector to seize the opportunities of the net zero transition. For instance, we have the automotive transformation fund from the Advanced Propulsion Centre, and the Faraday battery challenge. That has unlocked investment into the UK. Stellantis is producing electric vans at its Ellesmere Port plant, the first factory to be dedicated to the manufacture of electric vehicles, BMW Group is investing £600 million to bring two new all-electric Mini models to Oxford by 2026, and Tata has announced a £4 billion investment in Europe’s largest here in the UK. All that shows what our strategies are already providing.

[Chris Skidmore]

I thank the Minister for making an important point about job creation. As I said in my speech, the net zero review pointed to the 480,000 additional jobs resulting from green industries. When it comes to green steel both in Port Talbot and in Ellesmere Port, and the future of electric arc furnaces, does the Minister agree that, as politicians on both sides of the House, we need to fight the corrosive disinformation that green steel is somehow costing jobs—there would otherwise have been 6,000 job losses in Port Talbot rather than 3,000 potential job transfers—and point out that it is green industries that are keeping jobs alive? If we stick with the status quo, we will simply lose every job.

[Ms Ghani]

That is a valuable point. The most frustrating aspect of being a Minister is the lack of sufficient time and space to talk about some of the challenges and how we respond to them. If we had not provided support to enable Port Talbot to have those electric arc furnaces, thousands of jobs would have been lost. Unfortunately, however, there are always some people who argue that change inevitably brings challenge, and we get stick on that point. However, our investment means that those jobs are now secure, as are, I believe, more than 10,000 jobs in the supply chain. That will give people the reassurance that they need about their continued ability to produce steel or products in the supply chain.

Energy Bill [Lords]

Chris Skidmore Excerpts

Consideration of Lords message
Wednesday 18th October 2023 Commons Chamber

[Andrew Bowie]

I thank my right hon. and learned Friend for his intervention. Of course, I agree with him that pace is of the utmost importance in supporting community energy groups around the country, which is why the contact group has already met earlier this month and is engaging already on identifying the barriers that the consultation will seek to address and, thus, informing the Government as to what we need to do. That work is ongoing, which is why we do not feel that this amendment is required; we have begun that process already.

There are other issues with the amendment that mean we cannot support its inclusion in the Bill. The amendment would place an additional obligation on the Government to bring forward proposals to remove these barriers within a specific timeframe. As I just said, we cannot be sure what barriers will be raised in the consultation, or what the proper response to those barriers should be, until we have carried it out. We therefore cannot create a legislative obligation to remove barriers within a six-month timeframe when we are not aware of the nature of the barriers and have not yet properly analysed them.

[Chris Skidmore (Kingswood) (Con)]

I appreciate the Minister’s argument, but that is technically not what the amendment says; there is no requirement for legislative reform, only one to bring forward proposals. It is unfair to mislead the House—

[Madam Deputy Speaker (Dame Eleanor Laing)]

Order. It is not misleading the House; the Minister might possibly have done so inadvertently, but he would not have been misleading the House.

[Chris Skidmore]

My apologies to the Minister. I did not mean to make accusations so strongly. The challenge here is that subsection (4) of the new clause set out in the amendment contains no reference to legislation such as the Minister suggested. That is my point.

[Andrew Bowie]

I thank my right hon. Friend for his intervention. It is the Department’s view and mine that the amendment would result in legislation being required. As I said, we absolutely understand the importance of this, which is why I launched the consultation process as I did. It is why we are engaging so closely with the sector and all interested parties so that we can get this consultation up and running and out as soon as possible, and identify those barriers preventing community energy groups from accessing the market. I know that he has a passion in this area and holds strong convictions on it. I would be happy to continue to work with him, alongside the community energy contact group, as we develop our proposals for the consultation.

I also wish to reassure the House that we will continue to work closely with the sector to support its important work, both through our existing support, including, for example, the £10 million community energy fund, and in carrying out the consultation, to which we have already committed.

--- Later in debate ---

[Dr Whitehead]

That is not quite the subject of our debate, but the right hon. Member can see that we envisage an energetic and far-reaching proposal to develop the grid in such a way that those grid shortages are overcome, so that the grid is able to service the low carbon economy in the way we would all want it to do. In the context of what we are discussing, I remind the right hon. Member that this would be about distributed grids at a local level, rather than the national high-level grids. We need to take further action to strengthen and sort out grids at that level.

The Lords clearly continue to feel strongly about this issue; as we can see, they have sent back to us today a modified version of the original amendment, requiring the Government to consult on changes to assist community energy and, importantly, to set a timeline for proposals to be brought forward to remove barriers to the development of community energy.

Of course, there are others in this House who feel strongly about this issue. The proposals that the Lords have now twice tried to have inserted into the Bill are essentially the wording of a group called Power for the People, which suggested wording for a community energy enabling Bill for which it campaigned to secure signed-up support from parliamentarians. It did indeed secure substantial support from parliamentarians who feel strongly on the issue of community energy. Some 325 Members signed up in support, including 130 Conservative Members and, perhaps most remarkably, 22 members of the Government, including six Treasury Ministers, the present Chancellor and the Minister himself, as I often seek to remind him. There is no lack of support in the House for the principles and practice of community energy.

The Lords amendment seeks to acknowledge and further that support by putting forward very reasonable and, one might have thought, pretty non-contentious wording to add to the Bill. It is inexplicable to me that the Government should seek to resist these proposals in the way they have. Yes, they will say, as the Minister has said, that they have set up a community energy fund of £10 million over two years, which is welcome, and they have verbally indicated that, at some stage, there will be a consultation on barriers to supply, but there are no timelines for that and no commitment to move positively forward from it. That is what this amendment seeks to put right.

As I have said, the Minister appears already to be a signed-up supporter of community energy action, and I would fear for his own emotional wellbeing if he were forced today to perform another policy backflip and acquiesce in yet another Government repudiation of themselves in rejecting this latest Lords amendment. Instead, let us end the extended passage of the Bill on a high note, and all around the House agree on both the importance of community energy and the measures we will need to take to ensure it thrives in the future.

[Chris Skidmore]

I rise in support of the amendment. It is very similar to an amendment that I tabled during the previous stage of the Bill in the Commons. I echo the comments that have been made about the amendment being uncontentious. It calls for additional consultation—if the Government want me to do that, I will do it myself for the community energy groups.

The net zero review held several roundtables with a number of community energy groups across the country. Indeed, they were one of the reasons why pillar 4 in the final report, “Mission Zero: Independent Review of Net Zero”, was

“Net Zero and the Community”.

One of the key findings of the review was that over half of all net zero decisions will need to be taken not by Government or Parliament, but outside this Chamber. We can turbocharge our transition towards net zero if we can empower and support more community energy groups to take the action that needs to be taken.

Indeed, the only single wind turbine that has been built in the United Kingdom in the past year has been delivered through community energy. I am proud that it is in my home city of Bristol. Ambition Lawrence Weston has seen its 4.25 MW turbine built and it will now power 3,500 homes for the community energy project. The £4 million to pay for the project was raised by the group—it did not come cap in hand to Government—and now it will see an economic return of £140,000 a year as a result of the energy that will be sold to the grid. That is just one example of the myriad examples of net zero projects that demonstrate the economic opportunity that net zero can provide.

In Bristol, we also have the Bristol City Leap, which is a result of a £7 million investment from Bristol City Council. There has been £424 million of inward investment from the American company Ameresco Ltd to decarbonise the city’s district heat network. Community energy points the way for demonstrating that net zero is not a cost, despite what some may say, but an opportunity. We must seize that opportunity now, not just to tackle the climate crisis or reach our nationally determined contribution for 2030, because net zero is about 2030 not just about 2050. We cannot keep kicking the can down the road, somehow suggesting we are going to meet our carbon budgets. Meeting them now, today, is absolutely vital to ensure we can meet our climate commitments in future carbon budgets.

Community energy is here and now. We can get on with delivering net zero with the tools and technologies we have, and, above all, with the people we have—individuals and communities across the country. Community Energy England has 220 groups, a third of which would like to build onshore wind turbines, like Ambition Lawrence Weston. They want to get on with it. They are not often being paid to do this; they do it because they recognise what they can return to their communities. As a Conservative who believes in the power of local communities, we as a Government should be supporting local communities to the hilt to deliver on energy action.

When we look at the future of the grid, everything points to the fact that creating flexibilities on the edge of the grid enhances our energy security, allows us to return energy to the grid, frees up energy capacity elsewhere, and frees up our demand on oil and gas elsewhere. This is a no-brainer. I shall support Lords amendment 274B if it is pushed to a vote, although I will not push it to a vote myself. Nevertheless, it is vital that we send a clear message not just that we are committed to the net zero pathway—because it is the right and the economically important thing to do—but that we recognise that, when it comes to net zero, we need a big bang moment. We need to create little platoons of individuals and communities that are going out there writing their own net zero narratives and stories. For that reason, I will be supporting this Lords amendment today.

[Madam Deputy Speaker (Dame Eleanor Laing)]

I call the SNP spokesman.

Energy Bill [Lords]

Chris Skidmore Excerpts

Report stage
Tuesday 5th September 2023 Commons Chamber

In the remaining time, let me quickly underline new clause 33, which would require the Secretary of State to publish an energy demand reduction delivery plan. The Bill before us focuses almost exclusively on supply, yet demand reduction is essential for our energy security and the transition beyond fossil fuels. The more energy we use, the harder and more expensive it becomes to decarbonise our supply. That is why I am very happy to support the amendments tabled by the hon. Member for Nottingham East (Nadia Whittome), who made a strong and impassioned speech in favour of energy efficiency and making sure that we can keep people warm in their homes. I also support the Scottish National party’s statements on nuclear power, with which I wholeheartedly agree.

[Chris Skidmore (Kingswood) (Con)]

I draw the House’s attention to my entry in the Register of Members’ Financial Interests.

The rest of the world has woken up to the reality that the energy transition is here to stay. Investment in fossil fuels is reducing at such a rate that, while 10 years ago capital investment in oil was six times that of solar power, this year for the first time solar received more investment than oil. Last year, UK renewable power generated more electricity than fossil fuels. The cost of those technologies fell faster than ever predicted, with electricity production from renewables nine times cheaper than from gas.

Markets and investors across the world recognise that net zero is the future. Today we can only help or hinder that future, but we cannot stop it. The energy transition is an economic reality that, as legislators, we can either speed up, ensuring that the UK benefits from the economic opportunities and investments that can be ours if we so choose, or we can slow it down. To do so—to delay and hinder the transition—would merely cause the UK catastrophic economic self-harm. Investments will go elsewhere. Companies will locate elsewhere. Jobs will be created not here, but elsewhere.

As legislators, this is the choice we face: net zero and our economic future, or not zero with increasing costs and a loss of growth that will never come this way again. For that reason, I support the Bill, which seeks to maintain progress in the energy transition. However, we can and should go further. Yes, we must expand our use of renewable and clean energy, but the reality is that the UK should commit to phasing out fossil fuels. We do not need new oil and gas fields, which will only become stranded assets far sooner than we think. We do not need new oil and gas exploration licences for fossil fuels that are not ours to keep—as the hon. Member for Brighton, Pavilion (Caroline Lucas) made clear—but are sold on international markets and are rapidly losing market share and demand.

The truth is that, if we are truly serious about tackling climate change and delivering a green industrial revolution in the UK, focusing our finite investments, workforce and time on the energy transition, there is no place for new oil and gas fields or new coalmines. None of my amendments can be considered radical. Legislating to prevent the opening of new companies simply maintains a commitment that the UK sought to make to the rest of the world at COP26. Legislation to remove coal-fired electricity production from the grid simply puts into law a commitment that the Government have made to the ending of coal-fired generation by the end of 2024. Legislating to leave the energy charter treaty, which penalises nations for not maintaining investments in fossil fuels, simply ensures the UK follows the rest of Europe in doing so. Legislating to ban gas flaring and venting by 2025, which is responsible for methane emissions that are 54 times more powerful than carbon dioxide, simply brings forward a commitment from 2030, and is something that Norway has had in place since 1971. And legislating to establish an independent body to advise on when to end new oil and gas licensing in the UK seeks to depoliticise an issue on which we need to find a responsible consensus that can be supported cross-party, for it is too important to seek to divide and play politics with.

Tonight, in that spirit of cross-party collaboration and knowing that this is too important to get wrong or to fall short, I too am willing to back any amendments that I believe will deliver the energy transition more effectively. I hope all Members across this House will consider doing the same.

[Clive Lewis (Norwich South) (Lab)]

I would like to speak briefly to new clause 36, tabled in my name. New clause 36 asks—no, implores—this House to consider a national energy guarantee, which is also known as a rising block tariff combined with a social tariff. It is a system of energy pricing that shows that social and environmental goals can be advanced together. It really does embody a green new deal in action.

There are some in this House who claim that tackling the cost of living crisis and the climate crisis is a zero-sum game; that we can only do one or the other. The amendment blows a hole right through that falsehood. The reality of the current system in use by the Government is that too many people—millions of them and growing—are falling into fuel poverty. It is a system that simply is not fit for purpose. Let us be clear. Higher energy prices are not a blip. They are here to stay. Research from Cornwall Insight shows that energy prices will remain

“significantly above the five year pre-2021 historic average”

until at least the end of the decade. Even though Ofgem’s price cap will come down in October, the average bill will still be nearly double what it was in 2021, before prices soared. Millions of households will pay more this winter, given the Government’s energy assistance schemes have ended for most.

Up and down the UK, energy debt is soaring. Citizens Advice reports that nearly 8 million people borrowed to pay their bills in the first six months of this year. A quarter of people say that their energy bill is the cost they are most worried about. In my own city of Norwich, the rate of reporting fuel debts has increased by a staggering 300%. Yet by subsidising the unit price, the Government’s energy price guarantee disproportionately benefited well-off households and did nothing to incentivise energy demand reduction and decarbonisation.

The national energy guarantee will ensure that everyone can afford the essential energy they need, while cutting carbon. Here is how it works. Everyone gets a free energy allowance that covers 50% of essential needs. Households with higher needs, such as those with children or disabled residents, would get a larger allowance. The next 50% of energy used is charged at a reduced rate, matched to 2021 prices. Beyond that, a carbon-busting premium tariff kicks in. The result is that around 80% of us will have lower bills, while wealthier high-energy users will pay more but can reduce their bills by installing energy-saving measures such as insulation.

In one fell swoop, we will have protected essential energy needs, reduced bills and incentivised a ramping up of decarbonisation of our housing sector—crucial if we are to meet our net zero commitments. I urge and implore the House to support new clause 36.

Energy Bill [Lords]

Chris Skidmore Excerpts

2nd reading
Tuesday 9th May 2023 Commons Chamber

[Chris Skidmore (Kingswood) (Con)]

I draw the House’s attention to my entry in the Register of Members’ Financial Interests.

I welcome the Bill. I hope all parties will recognise that the Bill is an important and much needed piece of legislation, which I hope we can find consensus to support tonight. Many across the energy sector have waited too long for the provisions in the Bill; we cannot afford any further delay.

It is to the issue of delay that I wish to speak today. As the former Energy Minister who signed net zero into law and most recently, as has been noted, chaired the independent review on net zero, I believe the greatest threat to our future ambition to deliver on net zero is the endemic and systemic delay in creating the capacity and capability needed to decarbonise our energy systems. We simply cannot will the means, expecting that because we say we will deliver, net zero will happen. It will not. Unless we address the fundamental challenges of grid infrastructure, storage and capacity, we will not get there.

The net zero review set out how the Government can tackle those delays and implement their climate commitments, both by taking action now—the Bill is a huge opportunity to achieve that—and by providing the certainty, clarity, consistency and continuity of long-term policy direction that is needed to unlock future private inward investment. We can provide certainty in this place by working across parties to build on the long-term political consensus for net zero. Indeed, the Climate Change Act 2008, led by the right hon. Member for Doncaster North (Edward Miliband), has been held up globally as a model for what stable political action on climate change can deliver.

Back then, it was the Conservative party in opposition that pushed the Labour Government to go further, to be more ambitious, in their climate leadership on emissions reduction. Thanks to the actions taken by both parties, and across all divides, the UK is a global leader in the G7, having reduced our emissions further than any other industrialised nation, and we can do the same now.

Although many provisions in the Bill are welcome, we can once again, with cross-party support, go further faster and raise our ambitions. The amendments made in the Lords are all welcome additions. Indeed, many were recommended in the net zero review. I therefore support their continued inclusion and, if needed, will seek to re-table many of them. I will also seek to work across the House, as chair of the all-party parliamentary group on the environment, to table additional amendments that I believe are realistic and achievable to help the Government meet both the needs of the energy sector and their own legal and net zero commitments.

It is in that spirit of cross-party consensus that I believe it is our duty as legislators not only to make this Bill the best it can be, but to ensure that we do not delay any further the reforms that are needed to make our regulatory and planning systems, which are holding back net zero, fit for a net zero purpose.

This opportunity to reform our energy system will not come again in this Parliament. For me, as someone whose constituency is being abolished at the next general election and who is standing down, the opportunity will perhaps never come again. I hope the Minister and the Government will recognise that I stand here tonight, and throughout the passage of this Bill, to be helpful, although they might not feel that I am being helpful, and to raise our ambition by amending the Bill. Although they might not thank me today, in time I hope the Minister and the Government will understand that I and others who seek to improve the Bill have no choice, for there is no time left in which to act.

Powering Up Britain

Chris Skidmore Excerpts

Thursday 30th March 2023 Commons Chamber

[Graham Stuart]

I thank the right hon. Gentleman for his response, but Members on the Government Benches will have been listening with a certain degree of incredulity, because we remember that in 2010 he left the people of this country in the worst housing stock in Europe. They were cold, their bills were unmanageable and just 14% of houses were properly insulated. Now it is half, and we need to go further and faster, which is why we have the energy efficiency taskforce. It is why we have announced £6.5 billion in this Parliament, and it is why we are announcing today our new initiative on insulation. It is why there is another £6 billion to be spent between 2025 and 2028. The Labour party failed absolutely on the most basic thing: looking after people in their homes so they could pay their bills.

That is not all, however, because on renewables the Labour party now talks about this transformation by 2030, which no one other than the Labour party—it is not involved, I fear, in an entirely open, transparent, and possibly even honest exercise—believes can be delivered by 2030. What was Labour’s record on power? In 2010, 7% of our electricity came from renewables. If Labour in government had unleashed renewables the way we did, families this last winter would not have needed the Government to step in, because we would not have been so reliant on gas. It was Labour’s failure. It was 7% of electricity then, but it is nearly half today. This Government have transformed our performance, while the Labour party failed in power.

What are Labour’s ideas going forward? What do they consist of? While we have unlocked £200 billion of investment since we came into power, the Labour party, led by the hard left, with whom the right hon. Gentleman has always had more than a passing association, want through its GB Energy to nationalise an industry in which we have brought in global investment. Instead of unlocking renewables, Labour will, if it gets back into power, do exactly what it did in power last time: fail to deliver renewables, reverse the green transformation, fail to meet our carbon budget targets and let down Britain and every family, who will be back in cold, freezing homes with overly expensive bills to boot. That is what the Labour party offers.

We are internationally competitive. It is great that other countries, such as America with the Inflation Reduction Act, are seeking to catch up with us on things such as offshore wind. We support that. On onshore wind, which the right hon. Gentleman mentioned, as I have said, we are committed to reviewing it and ensuring that we can take it forward in a way that runs with the support and consent of local people.

In response to what the right hon. Gentleman said at the end of his words, three quarters of the power of this country today comes from fossil fuels, and we are the most decarbonised country in the G7. The right hon. Gentleman, the Labour party and the Scottish National party do not have a plan to stop using fossil fuels. What they have a plan for—this is unbelievable—is to make sure that we do not produce our own, that we import energy from abroad at the cost of billions and billions, that we make ourselves less energy secure, that we lose the 120,000 jobs, most of which are in Scotland, in the oil and gas industry and that we lose their capability to help deliver the hydrogen and carbon capture and storage industries upon which our decarbonisation path depends. The Labour party failed when it was in power. Its analysis of what it needs to do now is failing, too, and the British people will not be fooled.

[Chris Skidmore (Kingswood) (Con)]

May I thank the Minister for his kind words about the net zero review, and indeed the Government’s full response so soon after the review was submitted? I hope that the UK’s net zero pathway is now in a better place as a result of the recommendations. I should say that they are not my recommendations, but those of all the sectors I went to speak to and thousands of individuals, businesses and companies that want to get on with delivering decarbonisation, because they see the economic opportunity for the UK.

Does the Minister agree that we now need to slay this myth that somehow net zero will make us colder and poorer? Net zero will make us warmer and richer, and it is the economic opportunity of the decade, if not this century, to create a new economy, just as other countries such as the United States have recognised. Will he also accept that rather than talk down what the US has done, we need to work with our allies and democratic partners in creating a new special relationship around green energy?

Lastly, just to reflect on the comments made by the right hon. Member for Doncaster North (Edward Miliband), net zero is not just about 2050. We cannot keep kicking the can down the road. We do not have 28 years; we have seven years to deliver on the most ambitious nationally determined contribution of a 68% emissions reduction. If the UK achieves that, it is an economic prize that every single country across the world will look to us on how to achieve, and it will deliver further growth. There are economic consequences to not meeting that 2030 target, just as there will be severe economic consequences to not delivering net zero. I hope the Minister will urge both this party and any other climate delayers, who become the new deniers, that ultimately net zero is the future for the UK.

[Graham Stuart]

I thank my right hon. Friend and again pay tribute to him for all his work. This is the economic opportunity. If we look at a map of Europe, we can see the opportunity around the British Isles, and we will capture that energy. We are also blessed with around a third of all carbon storage in Europe. We can operationalise that to decarbonise the UK and provide a service to Europe, and we will do so. It will lead to the reindustrialisation of the north-west, north-east, Wales and Scotland. The opportunities are immense, and colleagues have been fighting hard.

On the NDC, we have set that ambitious world-leading 2030 target, and we are committed to delivering our commitments, including the 2030 NDC. [Interruption.] The right hon. Member for Doncaster North is a little out of touch. Countries are not due to start reporting to the United Nations framework convention on climate change on progress towards meeting NDCs until 2024, but we have quantified proposals and policies already to cover 92%, and we will go further. Just as we have done with our carbon budgets, we will exceed, not fall short. It was the Labour party that fell short on insulation and renewables; this party has a record of delivery, and our policies are supplemented by others that we have not quantified yet as we work hard to roll out these things. We will meet that 2030 target. We will continue our leadership role as arguably the only major economy in the world that is on that net zero pathway to 2050.

Energy Charter Treaty

Chris Skidmore Excerpts

Tuesday 21st March 2023 Westminster Hall

[Chris Skidmore (Kingswood) (Con)]

I beg to move,

That this house has considered the Energy Charter Treaty.

It is a pleasure to serve under your chairmanship, Mr Gray. I am grateful to the Minister responding today. I know he is currently very busy, preparing the finishing touches to the Government’s response to the net zero review, which I submitted as the review’s independent chair. I hope he will excuse me taking this chance to place on his ministerial desk another precious opportunity for the UK to demonstrate clear and decisive climate leadership.

I know that the Minister is all too aware of the opportunity that net zero and green growth present to the UK: new industries, new jobs and a wall of inward investment ready to be deployed into the UK if we are prepared to take the net zero pathway, rather than taking the risk of not zero and turning our backs on the economic opportunity of this decade, if not the century, that net zero provides.

The new economic narrative for net zero that the “Mission Zero” report outlines clearly demonstrates that the choices that the Minister and the Government will make this month—March 2023—over our future net zero investments and policy certainty will potentially define his place in climate and clean-energy history, if he acts now. The rest of the world is watching and waiting to see whether the UK will continue to show international leadership on climate policy.

I suggest that there is another opportunity to deliver international leadership on climate, which is achievable today, that the Minister and the Government can seize while the rest of the world watches and waits to see whether the UK will demonstrate international leadership. The UK Government can make a clear and public commitment to withdraw from the energy charter treaty. That treaty is an investment agreement dating back to the mid-1990s, when the focus was on access to oil and gas reserves in former Soviet countries, and when work to tackle climate change, and recognition of the opportunities of clean and renewable energy, was negligible. Today, the energy charter treaty acts as a millstone around the necks of all signatories who wish to take their climate obligations seriously.

[Jim Shannon (Strangford) (DUP)]

The right hon. Gentleman’s interest in Northern Ireland is always significant. When I ask a question, I am always aware he probably knows the answer, for which I thank him. The aim of the energy charter treaty is to promote energy security through open and competitive markets. Although that is great for the English mainland, in Northern Ireland it is restricted to providers, and the competition is diminished. Does the right hon. Gentleman agree that competitive markets must be available across all of the United Kingdom of Great Britain and Northern Ireland so that we can all get the benefit? I know he is saying we should withdraw, but Northern Ireland is already behind the eight ball, as it is.

[Chris Skidmore]

If the hon. Gentleman looks at the details of the treaty, which I will come to, he will see that it does not create a level playing field for competition. It is weighted in favour of fossil fuel interests. He knows full well, given his interest in clean energy, how Northern Ireland could become a future green energy powerhouse. It wants to ensure that it can continue to build onshore wind turbines, with a huge opportunity for providing green hydrogen. The challenge the energy charter treaty provides to the UK, and Northern Ireland as a proud member of the UK, is that it takes those potential clean and renewable investments and weights them disproportionately against existing fossil fuel commitments that no other country wishes to make. That is a challenge that we need to deal with.

The charter is a relic from a bygone age, which should have long been recognised as serving an obsolete purpose that still places its dead hand across all states that signed it three decades ago, preventing climate investments and, worse, prioritising inexcusable investments in oil and gas, even when the countries themselves do not wish to make them. The energy charter treaty has effectively become a Magna Carta for fossil fuels, and it is being weaponised by fossil fuel companies to sue Governments for introducing climate policies.

Recently, Italy was sued for its ban on offshore oil drilling. The Netherlands has been sued for its coal phase-out law. Several companies have taken the Dutch Government to court for their decision to phase out fossil fuels by 2030, claiming damages of €3.5 billion. Slovenia has also been sued for its fracking ban

[Caroline Lucas (Brighton, Pavilion) (Green)]

Does the right hon. Gentleman agree that there is a danger of complacency in the Government’s current approach? When I have asked questions on this issue of the investor-state dispute settlement mechanism, the Minister has replied, “Well, there has never been a case against the UK, so it is not a problem.” The examples the right hon. Gentleman has just given show why it is such a problem. In the Italian case, the Government were sued for six times the amount the oil company ever invested in the project. Does he agree that there are real risks here and that we should not be complacent just because we have not yet had a UK case?

[Chris Skidmore]

Absolutely. The other risk, which I will come on to in a moment, is the chilling effect. We do not know, or are unable to quantify, the investments that could be coming to the UK but for the fear that the energy charter treaty will again place its dead hand on those investments. Withdrawal from the energy charter treaty provides the certainty, clarity, continuity and consistency—the four Cs—that the net zero review outlined as part of a mission-based approach to long-term certainty. We cannot have long-term certainty for investment in future renewable projects or take decisions potentially shutting our fossil fuel investments unless the energy charter treaty is removed. It is critical that we provide that future certainty if we want those additional investments and the opportunities offered by that inward wall of capital that is waiting to be spent. As the hon. Lady mentioned, an oil company winning £210 million from the Italian Government over their restriction on offshore oil drilling is a perfect example of the risk to which this outdated treaty now exposes the UK. She mentioned that the company won six times the amount it had ever spent on the project, and those winnings are now likely to be fed back into financing new oil exploration.

Most worrying are the continued binds that the energy charter treaty places on signatory countries to prioritise and protect private foreign investments ahead of the democratic rights of elected Governments. Through investor-state dispute settlements, Governments who wish to do the right thing by the citizens who elected them and to tackle climate change to meet their net zero commitments are having their hands shackled by the energy charter treaty, imprisoning what should be free nations and leaving them bound by undemocratic regulations that are fought over by fossil fuel lawyers in courts. At a time when the UK should be taking back its sovereignty, and when it is seeking to demonstrate its energy sovereignty, the energy charter treaty, with its use of these unacceptable ISDSs, should be a prime example of legislation that we must recognise as being at the top of any lists of Brexit freedoms. Surely the UK Government should, can and must take action now to restore our energy freedoms.

[Christina Rees (Neath) (Ind)]

If the UK follows the International Energy Agency’s recommendation and cancels oil and gas projects, it could face legal claims under the ECT of up to £9.4 billion. The most recent Intergovernmental Panel on Climate Change report warns of the risk of regulatory chill—which the right hon. Member has mentioned—causing the UK to delay or to decide against climate action for fear of being sued by large fossil fuel companies using the ISDS mechanism.

[Chris Skidmore]

The hon. Lady is absolutely right. Far more impressive legal minds than mine—who have been working at ClientEarth, Global Justice Now and Green Alliance—have demonstrated that there is a way for us out of this treaty and that we can, potentially, work with our European partners to create an exemption regime for some of the historic investment cases in relation to which we might be under treaty obligations.

[Dame Nia Griffith (Llanelli) (Lab)]

I heartily congratulate the right hon. Gentleman on securing this important debate. Does he agree that, given that there could be a 20-year timeframe in which we would still be liable for action and penalties, the sooner we get out of this treaty the better? Moreover, what indications has he had that it may be possible to negotiate and mitigate down those 20 years, especially given the huge interest from other European countries?

[Chris Skidmore]

The hon. Lady is absolutely right: the sooner we get out, the sooner we are not under the cosh. However, when it comes to looking at the mitigation circumstances for the 20-year rule, France, Germany, Italy and the Netherlands have all signalled their intention to withdraw from the energy charter treaty. As I will explain later, the EU as a bloc will now potentially decide to withdraw from the energy charter treaty, although it will obviously take time to gather agreement and the UK can therefore lead on making a concerted effort to get all the countries to withdraw. If they do, that potentially creates a mechanism by which some of the disputes are unable to be taken forward in certain areas, such as the wider European area; there could be an opportunity to demonstrate how the overall potential liability can be cut by over 60%.

As the hon. Member for Llanelli (Dame Nia Griffith) has made clear, the risks of the status quo could hold the UK open to future challenge. The status quo cannot continue, because continued membership of the energy charter treaty risks having a chilling effect if Governments back away from new policies in order to avoid being sued—a danger that UN climate experts specifically warned about in the IPCC report. The UK Government have already recognised the problem, with the then Energy Minister, my right hon. Friend the Member for Chelsea and Fulham, saying:

“The UK cannot support an outdated treaty which holds back investment in clean energy and puts British taxpayers at increased risk from costly legal challenges.”

I hope to see the same clarity from the new Department for Energy Security and Net Zero, as well as from the new, beefed-up Department for Business and Trade.

[Selaine Saxby (North Devon) (Con)]

I thank my right hon. Friend for securing today’s debate on such an important topic. Does he agree that the creation of a new Department gives us the opportunity to expedite the decisions that we desperately need to take, particularly in the light of yesterday’s IPCC report and his own excellent report? We have to work towards net zero; otherwise, we will hit “not zero”.

[Chris Skidmore]

Absolutely. The UK has demonstrated continued leadership time and again, and I was the first Energy Minister to sign net zero into law. We became the first G7 country to do so, beating France by one day. We must collaborate, and I am proud that we have now seen a huge number of countries commit to net zero. I think we are the first country globally to ensure that we have a Department for net zero, which must also be welcomed. I thank the Government for demonstrating leadership on this issue, but let us extend that leadership by not just changing the words on a plaque on a wall in a Department; let us ensure that the new Department can boldly show leadership by coming out and demonstrating to other countries that it is willing to act. Then others will follow.

There are now serious moves, both here in the UK and elsewhere across Europe, to leave the energy charter treaty as a matter of political priority. It is clear that any chance of reforming the treaty is over. The modernisation talks proposed last year have failed, because several European countries, including Germany, France, Spain and the Netherlands, have decided to leave the treaty due to reforms not going far enough to bring it in line with the Paris agreement. Even the European Commission, which previously led the modernisation process, has announced plans for a full EU withdrawal from the treaty.

Without support from the UK’s traditional allies in favour of the continuation of the reform process, it will be impossible for the UK to push through reforms on its own against the remaining, less climate-ambitious energy charter treaty countries. The UK’s previous position of supporting modernisation is therefore no longer credible. Instead, the UK needs to reach out to like-minded partner countries, such as Germany, France and the Netherlands, to begin the process of co-leading an orderly withdrawal from the treaty.

In February, a group of experts wrote to the Energy and Net Zero Secretary, calling on the UK to quit the energy charter treaty. Today, 15 Members of Parliament from the all-party parliamentary group for the environment—I see a number of those colleagues in the room, representing four different parties—have written to the Minister for Energy Security and Net Zero, my right hon. Friend the Member for Beverley and Holderness (Graham Stuart), to make it clear that withdrawal from the ECT is now the best option for the UK in the future. The letter states that there is now an overwhelming case for taking action to leave the treaty unilaterally, especially given that many European countries have left and the EU as a bloc has publicly announced its withdrawal.

First, the letter makes it clear that

“The ECT is undermining efforts to achieve net zero due to costly legal action from fossil fuel companies, and the so-called “regulatory chill” effect, which causes governments to refrain from adopting climate policies. This view is supported by the Intergovernmental Panel on Climate Change”.

Secondly,

“The ECT makes the UK less attractive for clean energy investments as instead of serving the interest of clean energy and sustainable technology companies, it creates a policy landscape that is tilted against clean energy, and which exposes UK finances to huge litigation risk.”

Thirdly,

“The Treaty modernisation process has failed, with major signatories like Italy, Germany, and France preferring to leave the Treaty.”

And fourthly,

“The UK can regain control by co-leading a coordinated Treaty exit by working with like-minded partners such as Germany and France. This would help put the UK at the centre of decision-making on the next phase of ECT discussions, rather than waiting for an EU-led strategy to re-emerge.”

Not only is the letter signed by Members from across the House, but the wider principle of leaving the energy charter treaty is backed by climate and clean energy non-governmental organisations. I have already mentioned a number of them, including the Green Alliance, Global Justice Now and ClientEarth. There is also the Aldersgate Group, chaired by the former Prime Minister, my right hon. Friend the Member for Maidenhead (Mrs May).

As the former Energy Minister who signed the UK’s legal commitment to achieve net zero by 2050 into law, I know too well the challenges that the Minister faces, having sat in his position in the past. Politics has always been about priorities, and no doubt he will be told that there are other priorities that the Government must face. Some will seek to delay; others will claim that it is just too difficult. It was no different when I was seeking to persuade other Departments to agree to net zero. History judges us all on the priorities that we make and the future that we seek to create. Sometimes that future is unknown and unknowable, but that should not prevent us from taking action now to achieve it.

If someone had told me back in 2019 that 90% of the world’s GDP would have signed up to a net zero target just three years on, I simply would not have believed it. Change comes at us fast sometimes, and there is no faster change than climate change. I know of no one serious about achieving net zero who would back the UK’s remaining in the energy charter treaty. Indeed, the reality is that continued membership of the ECT and continued commitment to net zero are not compatible. We face a choice between defending our fossil fuel commitments of the past or delivering our net zero commitments for the future. Our continued membership of the energy charter treaty is not only unsustainable, but simply indefensible. The time has come to pick a side. I urge the Minister to choose net zero and commit to the UK’s withdrawal from the energy charter treaty.

[The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Andrew Bowie)]

It is a pleasure to serve under your chairmanship, Mr Gray, and to respond to my right hon. Friend the Member for Kingswood (Chris Skidmore) on such an important and pertinent topic. Thanks to his work in passing net zero legislation into law, and through his work on the review, the UK is committed to tackling climate change at home and internationally through our ambitious net zero targets and our international climate agreements, including the Paris agreement. I want to assure him of my personal commitment to achieving those goals, which I hope he knows already.

In an earlier intervention, the hon. Member for Strangford (Jim Shannon) raised energy security in Northern Ireland. I urge him to hotfoot it back to this Chamber at 2.30 this afternoon when the hon. Member for Upper Bann (Carla Lockhart) has a debate very much focused on Northern Ireland and energy security for farmers. I look forward to seeing him there and we can continue our discussion.

The energy charter treaty was signed in 1994. It was originally designed to provide stability and certainty for those participating in cross-border trade and investment in the energy sector, particularly for investors operating in states with a less stable rule of law. It currently applies to more than 50 contracting parties. As my right hon. Friend the Member for Kingswood rightly says, the world and the energy sector have changed significantly since 1994, and there is wide recognition that the energy charter treaty has not kept pace.

Britain has long accepted that to remain relevant the energy charter treaty needs to be updated to reflect the current energy landscape. In its unmodernised form, it is focused on trade and investment in fossil fuels. Although renewables are in scope, it does not cover modern energy technologies such as hydrogen or carbon capture and storage. That is exactly why His Majesty’s Government have been such keen supporters of modernising the treaty; I dispute the characterisation from the hon. Member for Brighton, Pavilion (Caroline Lucas) that we are in any way complacent.

We have spent two years negotiating to align the treaty with today’s changing energy priorities and investment treaty practices, as well as international climate commitments, such as the Paris agreement. We took a leading role in pushing for additional safeguards for the sovereign right to introduce measures such as net zero and a flexible mechanism to allow parties to phase out investment protection for fossil fuels. To be clear, there were challenges to overcome in the renegotiation. It is a multilateral treaty across more than 50 states, each with different priorities on energy and climate. The UK was able to secure coverage for modern technologies, and provisions to ensure a stronger environmental, labour and climate focus.

[Chris Skidmore]

This is a factual question: who is the Minister going to negotiate with in a modernisation programme, when none of the European countries, including Germany, France, Spain, the Netherlands and Italy, will be in the room? Logically, there is no opportunity to discuss modernisation, because no one wants to discuss it. The Minister’s speech may have been written before the decisions taken by the EU last week or the week before were made public, but it is simply not logically possible to follow the pathway that the Minister is suggesting. It might have been possible last year, but it is certainly not anymore.

[Andrew Bowie]

I was not suggesting a pathway forward; I was giving a brief history of how we have got to the stage we are at. If my right hon. Friend hangs fire for two seconds, I will explain where we are going next.

Despite efforts to update the treaty, which the EU had supported us on, when it came to the final moment the European Union and its member states were unable to endorse adoption of the modernisation at the energy charter conference in November. That was unexpected and a great disappointment to those, including member states and the UK, that were championing modernisation. As such, several EU member states have now announced their intention to withdraw. We expect a decision on modernisation to be rescheduled when enough contracting parties are in a position for a vote to take place.

We must carefully assess the impact of the evolving situation to understand how best to take forward our priorities in relation to the treaty. Since the conference in November, the Government have monitored the public positions of other contracting parties, engaged with official-level negotiators from those parties, conducted further assessment and considered the views from stakeholders across business, civil society and Parliament. We are building all that information, engagement and analysis into an assessment, underway right now, of how the UK should respond to the current situation in the energy charter treaty. We will keep the House informed of any relevant developments as soon as we are able.

Whatever the final decision on our membership or the future of the treaty, the UK remains committed to addressing the urgent need for climate action at home and abroad. As such, I sincerely thank my right hon. Friend the Member for Kingswood for raising the issue.

Independent Review of Net Zero

Chris Skidmore Excerpts

Thursday 9th February 2023 Commons Chamber

[Chris Skidmore (Kingswood) (Con)]

I beg to move,

That this House has considered the Independent Review of Net Zero.

I draw the House’s attention to my entry in the Register of Members’ Financial Interests, and should declare that I am the chair of the independent review of net zero that we are discussing. I thank the Backbench Committee and its Chair for agreeing to this debate. We had an excellent debate in the other place, led by Baroness Hayman, on the recommendations in the “Mission Zero” report, which was published on 13 January. Members may recall that the review was commissioned by the previous Administration, and the previous Prime Minister, my right hon. Friend the Member for South West Norfolk (Elizabeth Truss), in September 2022. The review’s remit was to allow us to understand how we can transition to net zero in a more affordable, efficient manner that is pro-business and pro-growth.

Having been appointed chair of the review, I undertook what I understand is perhaps the largest ever engagement exercise specifically on net zero conducted in Government. We received 1,800 written responses to our consultation. I held 52 roundtables, virtually and in person. I toured every region of England and every devolved nation of the UK, and spoke in person to around 1,000 people to understand directly the challenges and opportunities of energy transition for the UK. In that consultation, the message that I heard from the overwhelming majority of respondents was that when it comes to the opportunities that net zero and energy transition can bring to the UK, Westminster, Whitehall and Government are falling behind the curve. Thousands of infrastructure projects are ready to take place, and thousands of businesses see the opportunity in net zero.

The opportunities are not just national; 2022 marked a tipping point in international opportunities for green technology. First, Russia’s illegal war in Ukraine woke countries up to their dependency on foreign-owned gas and oil. We have to be able to provide domestic sources of energy in future. That is why interest in renewable and clean technologies has escalated. Not least, as the report was being prepared, the US passed its Inflation Reduction Act, which provides for $369 billion of investment in green and climate technologies for the future, and sets out a clear direction of travel, and a programmatic approach to investing in carbon capture, utilisation and storage technology, hydrogen, renewable power and new nuclear power. At the same time, the European Union has taken forward its “Fit for 55” programme, and has provided further detail of how it will invest up to €1 trillion in the European green deal.

The review comes at a time when we are at a crossroads. On the one hand, we could continue on our trajectory as leaders on climate policy. We were the first G7 country to sign net zero into law. We could carry on showing leadership, as the only major industrial nation that has been able to reduce its emissions by 40%. Or we could take the other turning—a turning that is not zero and would see us resile from our climate commitments, and from the investments that we have made. Ultimately, the choice of not zero will cost more than continuing in the direction of working towards net zero. That is the choice. I was the Minister at the Dispatch Box 43 months ago, taking forward legislation to ensure we could be the first G7 country to sign net zero into law. I thank the Under-Secretary of State for Energy Security and Net Zero, my hon. Friend the Member for West Aberdeenshire and Kincardine (Andrew Bowie) for his commitment and congratulate him on his new role. I understand that this is probably his first debate as a Minister in the new Department for Energy Security and Net Zero. It may even be the first debate that the new Department responds to. I am delighted that we have a new Department with “Net Zero” in its title. I hope he enjoys reading the “Mission Zero” report. I am sorry it is 340 pages. I am not holding him to having read every page for this debate, but hopefully it will form part of his weekend box.

[The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Andrew Bowie)]

Recess reading.

[Chris Skidmore]

It needs to be sooner than that. Basically, we have an opportunity now for the Government to look at the recommendations in the report.

The report is divided into two sections. The first part is a new narrative on net zero. As the chair of the net zero review team, I put on record my thanks to my fantastic team of 22 dedicated civil servants who were drawn from across all Departments. I can see one in the Box now, who is working with the Minister. If it was not for the team, we would not have produced a report of such quality. We set out a new narrative on net zero. It is not some kind of eco-project or religion, and I do not stand here thinking that I want the imposition from the centre of top-down policies. I recognise that the challenge we face is to ensure that everyone in society is able to see the opportunities of the energy transition for the future. There will be challenges, and the report is open about those challenges and costs. At the same time, there is an international opportunity: we are now in a global net zero race. We can either continue to lead or we will follow, and the cost of following will always be greater than the opportunity of showing first mover advantage. There are no free rider opportunities here.

[Jim Shannon (Strangford) (DUP)]

The right hon. Gentleman said that he had been to all regions of the United Kingdom of Great Britain and Northern Ireland to ascertain opinions for the independent review. Can he tell us what the opinions were in Northern Ireland? Were they similar to everywhere else, so we can go forward collectively? If we can do that, we can achieve our goals. We cannot achieve them if we are divided.

[Chris Skidmore]

I had a fascinating opportunity to visit Belfast to hold two separate evidence roundtables. The first was with Belfast City Council, which gave me the public sector perspective on the challenges of decarbonisation and the public estate in Northern Ireland. The second roundtable was with private business and industry, with the Belfast chamber of trade and commerce. What I took from that opportunity to speak specifically about Northern Ireland’s concerns and opportunities was that there are challenges in Northern Ireland. In particular, it will probably achieve net zero later than 2050. On our overall UK net zero target, that is the case for both Northern Ireland and Wales. For Scotland, it will be a bit sooner, in 2045, as I am sure the Minister knows given that his constituency is at the forefront of bringing forward some of the green opportunities that will allow Scotland to go further and faster.

[Andrew Bowie]

indicated assent.

[Chris Skidmore]

A really important part of the report, which I will come on to in the moment, is taking a place-based approach to net zero. We will achieve net zero in a more affordable and efficient way if we allow local communities, whether they are cities or rural areas, the opportunity to be more empowered to understand how to achieve net zero in a way that suits their local communities.

In Northern Ireland, I listened to concerns about how agriculture could be decarbonised. Northern Ireland wants a whole raft of new biomethane plants. At the same time, there is a new fleet of hydrogen buses in Belfast—it is really pushing forward on fully decarbonising public transport. There was a fascinating discussion on how Northern Ireland wanted to be a leader on green hydrogen. It may not have much offshore wind, but there is a huge opportunity for onshore wind and for the use of hydrogen to drive a whole new economy. Picking up all the pieces that come together that demonstrate the opportunities in every region is exactly what the report tries to reflect.

The report sets out the new narrative that net zero is the primary economic opportunity of this century, but if we do not invest now—that investment is primarily private sector investment, but it needs certainty, clarity, consistency and continuity from the Government on policy—we will turn our backs on a potential £1 trillion of investment by 2030 and turn our backs on up to 480,000 new jobs by 2035. In a way, the net zero review is a bit of a misnomer. I was keen to look at the targets that have been set and to understand how we will realistically meet them. The worst thing one can do in politics is overpromise and underdeliver; it completely undermines confidence in the ability to deliver on our climate commitments and the energy transition.

[Wera Hobhouse (Bath) (LD)]

First, I congratulate the right hon. Gentleman on the report. It is very welcome, and was very ably chaired and put together by him, so I put my thanks to him on record. On delivery, is it not the case that some kind of delivery authority is needed—a body that combines all the quite difficult and complex strands we face on net zero?

[Chris Skidmore]

Yes. I thank the hon. Member for that point. One of the key recommendations of the report is that we have an office for net zero delivery, which will be able to join all Government Departments to ensure they speak with one voice on the policy commitments that are needed. We have the new Department for Energy Security and Net Zero. That is fantastic news. I hope it will be given the powers and the mandate to enforce an understanding of what we need to do to achieve net zero across all Departments, because it is certain that Departments are falling behind.

On net zero, I am a realist. I understand that on delivery we must be able to provide public confidence in our ability to achieve some of the ambitions that at the moment are just words on paper. The document is very much about delivery and implementation. I created a structure of six pillars to inform the report. The pillars strengthen the foundations of the pathway towards net zero by 2050, but also refer to some sub-commitments such as decarbonising power supply by 2035 and looking at our electric vehicle mandate by 2030. How will we achieve those targets if we do not get the basic under-the-bonnet issues right, such as infrastructure or grid? Delays in the planning system mean that current targets are way off beam and will not be achieved. Unless we are realistic now about what we need to do to unblock those problems and get, as I called it during the review, the debris off the tracks, we will not be able to reach our commitments in time.

Making decisions now is absolutely critical for this Administration. I include 129 recommendations in the report, but I set out 25 key recommendations for 2025, recognising that this Administration probably has about 300 legislative days left in Parliament until October 2024. That is not to say I would not urge them to take on all 129 recommendations. I understand that the Government will respond to the report by the end of March. Coincidentally, as I was taking forward the work on the review, the Government decided not to challenge the High Court judgment that their net zero strategy was illegal and they have agreed, in secondary legislation, to respond to the High Court judgment and the Committee on Climate Change by 31 March. I hope that their response to the judgment will also form part of the response to the “Mission Zero” report, but the more we can do now, the more we will reduce the costs of the transition overall. The report sets out that if we delay action on net zero by 10 years, we add on 23 base points of GDP to our public debt.

There are huge challenges to achieving net zero. I recognise that, which is why we set out in pillar 1 that securing net zero must be a priority—understanding how we will be able to have in place the materials, supply chains and skills to ensure we can deliver on time. The sooner we act, the sooner we will be able to achieve net zero in an affordable and efficient manner. Other pillars cover powering net zero. I asked each sector how it could achieve net zero in a better way. A third pillar looks at net zero and the economy, and how we could work with those hard-to-abate sectors, whether energy intensives or agriculture, to make sure they can also achieve net zero on track.

[Robert Courts (Witney) (Con)]

I am very grateful indeed for my right hon. Friend’s report. The House will remember my interest: I was the aviation Minister responsible for the jet zero strategy. My right hon. Friend referred to hard-to-decarbonise sectors, which include aviation. He also referred to economic opportunities, and sustainable aviation fuel springs to mind. Would he like to comment on that sector? If sustainable aviation fuel can be provided, if we have the feedstocks and if we provide price stability, there will be an opportunity for the UK economy, as well as an opportunity to decarbonise that crucial yet hard-to-decarbonise sector. Does he think it as important as I do?

[Chris Skidmore]

My hon. Friend’s point is very well made. Our mandate for 10% SAF by 2030 is one of our greatest opportunities to decarbonise in the short term to meet our 2030 nationally determined contribution. If we are to do that, we need to build out the supply chain and take advantage of opportunities to use biogenetic materials and waste materials for SAF, so we need the processing plants in place. My point about what happens under the bonnet is vital to SAF. That is why a circular economy is one of the 10 missions in “Mission Zero”.

I have set out for the Government what I believe needs to happen now in order to unblock the immediate challenges and keep net zero on track, but if as politicians we are to succeed—both in government and as Members of this House—in delivering our long-term net zero goal over a 28-year period, we need to retain the cross-party consensus that it is the right thing to do not just to tackle the climate crisis, but to ensure the future of the British economy and to ensure that the UK plays a leading role in future transition.

I have set out ten 10-year missions, because I believe that tackling energy transition, just like tackling climate change, requires a long-term vision of programmatic certainty, ensuring that businesses and investors have the confidence to invest and to grow, because they know that things will not continue on a start-stop, chop-and-change, project-by-project basis. Germany has a 10-year plan for hydrogen and the US has just set out 10-year visions for its climate technology programmes as part of its Inflation Reduction Act. We, too, need 10-year missions. The ten 10-year missions that our report sets out would start in 2025, after we have got the basics right, and be carried through to 2035.

In writing the report, I took my role as independent chair very seriously. I nearly became an independent MP on the back of the fracking no-confidence vote that happened during the review. I had meetings with every political party, including the SNP and the Liberal Democrats, and several with the Labour party. Whoever wins the next general election and whoever forms the next Administration come 2024, I want them to see the report as a road map not just to delivering net zero, but to delivering it for the benefit of the British people and the British economy.

--- Later in debate ---

[Chris Skidmore]

I thank the Backbench Business Committee again for granting this debate and all Members who have spoken in it. The debate has demonstrated that, while Members may disagree on some of the contents of the report and its recommendations, as should be the case, the overall narrative of the review—that net zero is an opportunity and not a cost, and that we must seize this opportunity now and not delay—is overwhelmingly welcomed by all parties in the House. I stand ready to brief any political party that is willing to continue to look closely at the recommendations in the report.

The hon. Member for Warwick and Leamington (Matt Western) spoke about the Stern review, and it would be an honour if this report was seen in the same bracket in terms of its ability to influence future policy innovation.

Mention was made of the length of the report and the fact that it was done in three months. I am grateful for the incredible work that was done by the wider net zero review team in Government. Three months is 1% of our journey to net zero. We do not have time to waste. It has been 43 months since I, as the Minister, signed net zero into law. There are 323 months left until we reach net zero by 2050. The net zero clock is ticking. This year alone, that window is vanishing in front of our eyes. To borrow the analogy used by the hon. Member for Bath (Wera Hobhouse), the bus is already at the stop and is about to depart, and we have to decide now whether we want to get on it or leave it behind. We need to look at this change this year and move as soon as possible.

When John F. Kennedy introduced the moon landing mission in 1962, he said that we do these things

“not because they are easy, but because they are hard”.

It will be hard to get to net zero, but let us all work together across parties to recognise the scale of the challenge. This challenge must reflect the whole of society. As my right hon. Friend the Member for Gainsborough (Sir Edward Leigh) said, we must not leave any community behind. When it comes to net zero, we should not impose this on communities, but work with them and the wealth of views and opinions on how we can deliver on decarbonisation for the future. I hope that this report is not just the beginning but is a blueprint for a new Department on how it needs to move forward as soon as possible.

Question put and agreed to.

Resolved,

That this House has considered the Independent Review of Net Zero.

[Matt Western (Warwick and Leamington) (Lab)]

On a point of order, Mr Deputy Speaker. Thank you for granting this point of order. I would welcome your advice. I wrote in both December and January to the Secretary of State for Health and Social Care to press him on the status and costs of the Rosalind Franklin laboratory, otherwise known as the mega-lab, in my constituency. Three weeks ago, it was announced that it would be closing, with a loss of 670 highly-skilled jobs, with four weeks’ notice. I wrote to the Under-Secretary of State for Health and Social Care, the hon. Member for Lewes (Maria Caulfield), two weeks ago, and she told me to write to the UK Health Security Agency. I am not sure what I should do now, but surely the responsible Department should reply to me directly.