Green Investment Bank

Edward Miliband Excerpts

Wednesday 11th January 2017 Commons Chamber

[Mr Hurd]

I thank my hon. Friend for that constructive observation. He is quite right in his first point—“public good, private bad” could not have been clearer from the Opposition Front Bench. That will have been noted in the business community and across the country, reinforcing the question mark that the country’s business community has about the Labour party’s attitudes towards it.

On the green share and the maintenance of assets, I have set out the mechanisms; I think they are robust, and Parliament agreed that they were. As for so-called asset stripping and the freedom to sell assets, let us not get ourselves into a position in which we view holding assets for ever as a good in itself. I do not think we would want that for the GIB under its current structure. The management of the organisation has to be free to manage a portfolio. As a Government, we have to be practical about the limitations we would place on a private sector bid. I come back to the point that we have been very clear about the criteria we are setting for this sale, and we are looking at proposals by taking a holistic view of those criteria, which include the need for reassurance about the forward plans for the organisation and the level of ambition for mobilising private sector capital into this critical area of clean infrastructure.

[Edward Miliband (Doncaster North) (Lab)]

In the interests of consensus, we can agree that there was cross-party support for the Green Investment Bank right from the get-go. I would say to the Minister that there is also cross-party concern about this sale—and I could mention Lord Barker, who was a Minister in the last Parliament, Vince Cable and of course people on the Labour side. Is not the key question for the Minister and the Secretary of State this one? They promised a new approach to industrial strategy with a new Department, by contrast with their predecessors who did not even use the phrase “industrial strategy”. The question to the Minister is: what has changed since they took over? If there is a moment to prove commitment to the new industrial strategy, it is this one in respect of their plans for the GIB.

[Mr Hurd]

The right hon. Gentleman may be right about the cross-party agreement on the need for a GIB; the difference is that we did it, and he did not. His party had plenty of opportunity to do it. He talks about the need for a continued commitment to investment in renewables, and I think we have shown that. In fact, one of the most decisive steps this Department has taken in the short time we have been in power is the announcement of the new contract for difference auctions, which will be the next stage of support for the more mature renewable tech choice. There is no issue about this Government’s commitment to the low-carbon economy and the green infrastructure that needs to underpin it. The Secretary of State could not have been clearer about that. Where I think there is a divergence of view is that the Labour party seems to think that state ownership is a good in itself, whereas in this situation we feel we have moved on from that. When it comes to this very important organisation, which has done a great job, we want to liberate it so that it can do more in future. It is partly through that lens that we are looking at the proposals before us.

Nissan: Sunderland

Edward Miliband Excerpts

Monday 31st October 2016 Commons Chamber

[Mr Speaker]

Order. The Secretary of State has no responsibility either for Opposition policy or for Oscar Wilde—although we always enjoy the poetic licence of the right hon. Member for Surrey Heath (Michael Gove).

[Edward Miliband (Doncaster North) (Lab)]

I welcome the announcement, but I want to ask the Secretary of State about the duties and rights of this House. Last Monday, the Prime Minister told the House that

“the Government must not show their hand in detail” —[Official Report, 24 October 2016; Vol. 616, c. 27.]

to Parliament in advance of the Brexit negotiations. At the very same time, however, we now know that the Secretary of State was telling Nissan the Government’s detailed negotiating stance for the automotive sector, including that there would be tariff-free trade and no bureaucratic impediments. Will the Secretary of State explain how those two positions are consistent?

[Greg Clark]

The right hon. Gentleman, for whom I have a high personal regard, exemplifies what my right hon. Friend the Member for Surrey Heath (Michael Gove) was saying: he looks so glum at this news. What I set out to the House, to Nissan and to any firm that is in this country is what my colleagues have said repeatedly: there is a great common interest among other European Union nations and ourselves in having a deal following the negotiations that maximises the benefit to both sides. That seems so obvious that it is hardly worthy emphasising. That is the demeanour with which we will approach the negotiations. It is the approach that I have always taken in negotiations, and it seems as though that is something that people are glad to hear.

Paris Agreement on Climate Change

Edward Miliband Excerpts

Wednesday 7th September 2016 Commons Chamber

[Edward Miliband (Doncaster North) (Lab)]

It is a pleasure to follow the hon. Member for Wells (James Heappey), who spoke eloquently, particularly about the role that renewable heat can play. I commend my hon. Friend the Member for Brent North (Barry Gardiner) for securing this important debate. He brings huge knowledge and depth to his role and I wish him well in it. I should also take this opportunity to congratulate the new the Secretary of State for Business, Energy and Industrial Strategy. Mention was made earlier of the fact that he was my shadow when I was Secretary of State for Energy and Climate Change. I always respected his ability and commitment on climate change. I was deeply disappointed by the abolition of the Department of Energy and Climate Change but the one saving grace was his appointment and that of his extremely able Minister for Climate Change and Industry. I have spoken to the latter since the election about climate change. I do not want to damn his career too much, but I can say that he is a class act, as we will hear when he speaks.

Having got the niceties out of the way, I should add that, when I was thinking about my speech for this debate, I recalled a number of things the Secretary of State said when he was my shadow. Among other things, he called for more generous feed-in tariffs than the ones I proposed; for more generous commitments on carbon capture and storage; and for more generous resources for the renewable heat incentive. I look forward to his making good on all the aspirations he had in opposition now that he has the chance in his new role.

In the main, I want to talk about the impact of Brexit on climate change, but I should mention in passing that I could not help hearing in the Minister’s remarks the wheels of government grinding on the issue of domestic ratification. As his speech wore on, we got more of a sense that it would come more quickly than slowly. I encourage him in that, because my hon. Friend the Member for Brent North is right about the signal it would send.

The central issue for UK climate policy is Brexit. That is the unavoidable context for discussions about climate change. I have been nice about the Minister of State. I am not going take it back, don’t worry—maybe he’d like me to. He talked about British diplomacy. There is a big elephant in the room for British diplomacy on climate change: Brexit. We have to address it. I understand that the Prime Minister says she does not want a running commentary—fair enough—but there is a difference between a running commentary and a Trappist vow. There cannot be a Trappist vow. We have to engage with the many, many hard questions raised by Brexit for UK climate policy. Saying “Brexit means Brexit” does not really solve the problem.

The case I want to make is this: first, our membership of the EU has helped us to be a persuader for global action on climate change. Secondly, the ability to persuade is needed more than ever after the Paris agreement. We all know the issue in the Paris agreement: an aspiration to keep global warming below 1.5° with pledges that add up to about 3°. Thirdly, Britain’s ability to be that persuader for greater ambition is gravely endangered by Brexit. We cannot shy away from that. The real issue I want to focus on is this: the kind of Brexit we opt for—whether it is hard Brexit, which leaves Britain on its own, or whether we forge a new close relationship with the European Union—will be absolutely crucial to the issue of UK influence and the world’s ability to tackle the problem of climate change. That is why, having paid them nice compliments, I want to say to the Secretary of State and the Minister of State that they have a big responsibility in this process—I am sure they are aware of it—to ensure we have the right outcome in these negotiations on climate and energy.

The starting point for addressing this question is to understand that, in this area and in many others, the debate about our co-operation with the EU has not somehow ended with the referendum. It is only just beginning. I was on the remain side, but we all know the reality: the British people did not vote for a particular model of Brexit. They voted to leave the European Union, but the model we decide now has to be a matter of detailed debate and negotiation. As the House knows, in the international negotiations on climate change we currently negotiate as part of the European Union. As part of the EU, we are on a par with players such as China and the United States. The EU is responsible for about 10% of global emissions and Britain is responsible for about 1%. In the EU, we have been a successful advocate of strong European ambition on climate change. We have been—mention was made of this earlier in the debate—at the forefront of landmark international agreements, punching above our weight as a country. To be fair, we have seen that under Governments of both parties: at Kyoto in 1997, with the role played by John, now Lord, Prescott; and just last December, to give her rightful credit, with the role played by the last Secretary of State for Energy and Climate Change, now the Home Secretary, in the negotiations around the Paris agreement.

We in this House should be proud of what Britain has been able to achieve, but we should be under no illusions. The influence and role that Britain has played in the past two decades on climate change, which has been hard won, is now gravely at risk. The danger, in this area and in many others, is that we are outside the room when the big decisions are made, or are in the room as bit-part players. A recent paper from Chatham House, the respected international think-tank based in London, said that the danger of Brexit is that we would

“move alongside other second-tier powers such as Australia, Canada and South Korea”.

All those countries have played varying roles on the issue of climate change, some of them important and honourable, but we have had greater influence. I want to preserve that influence.

There is another danger. We have been persuaders for ambition in the European Union and the real danger is that our absence from the EU waters down and dilutes the commitment of the EU. The danger is that our absence tips the centre of gravity away from the high-ambition countries to those countries that have more anxiety about the issue. That is why the implications of Brexit are not just self-serving ones about Britain’s influence in the world and on climate change; they are also about the world’s ability to make the right things happen in the fight against global warming.

The risk that I have described about Britain’s influence comes with other associated dangers, including for the role of British science and research, which I am sure the Secretary of State and the Minister are concerned about and which draws huge benefit from EU resources, and of the European Investment Bank, which in the past few years has either loaned or given the UK a quarter of the money for energy and climate change projects. There is also a massive issue relating to the repeal of environmental legislation from the European Union.

I now come to the question of the mandate of the referendum result. Personally, I do not believe that when the British people voted to leave the European Union, they did so to diminish our influence or to weaken laws on air pollution or other environmental legislation that comes from the EU. That is why, as I said at the outset, there is a huge responsibility on us to shape new arrangements that can protect British influence and, indeed, our national interest.

Some people say that the best we can hope for in the negotiations is a Norway-style arrangement in the European economic area or the European free trade agreement. I like Norway—I spent part of my holiday there this summer—but I do not think that that should be our aspiration. It is a country of about 5 million people and we are a country of 65 million people. Our international role has traditionally been different from theirs, and I think that Norwegians would say that, too. On the issue of the climate, Norway negotiates on its own, not as part of the European Union. Crucially, if we went for a Norway-style arrangement, it would leave us without a voice on key aspects of environmental legislation. We would be affected by them, but we would be rule-takers, not rule-makers. That is the Norwegian problem: it accepts directives on air pollution and so on, but it does not have a say in the formation of that legislation.

What is to be done, given the referendum result? Surprisingly, I agree with some in the leave campaign who say that, after the referendum, we have to carve out a role for Britain that reflects our size, position and global reach, and that does not necessarily emulate the role played by other countries.

I want to draw the House’s attention to a recent pamphlet produced by an august group including Paul Tucker, who is the former deputy governor of the Bank of England, the Chair of the Foreign Affairs Committee of the German Bundestag, and a senior adviser to the French Government. They propose a continental partnership between Britain and the European Union. What does that mean in practice? Essentially, it is an argument for the closest possible co-operation on a host of issues of foreign and defence policy and, crucially, climate and energy.

What should that new arrangement mean? In my view it should mean that we continue to negotiate with the EU in international discussions, thereby protecting British influence. There is no earthly reason why, following the vote on the European Union, we should not continue to be part of the European bloc on those issues. We can write our own script for the future on those questions. We should also continue to be part of the emissions trading scheme; after all, Britain played a role in coming up with it, so there is no reason why we should leave it. I also believe that we should continue to be part of crucial environmental legislation, such as car emission standards and waste management. The reality is that we will probably have to accept that legislation anyway, if we want to gain access to the single market, so it is far better to find an arrangement that gives us a say on the rules.

I want to be clear: we would not continue to be members of the European Union—our status would change—but we would be crucial partners, and in my view that is completely consistent with the referendum. We should do that because it is in our national interest. Whether Members think we have gone too far on climate change or not far enough, nobody in this House, on whichever side they sit, has an interest in diminishing our influence. I think it is just objectively the case that we are in real danger of diminishing our influence as a country on this vital issue for the future of our people.

That provides some thoughts about where we need to go and where we need to take our new relationship, but there is a hard truth here for Government Ministers. For this to happen, it requires those in government who are sensible and who care about these issues to stand up to those who want hard Brexit. Let us not be under any illusions: hard Brexit is about detaching ourselves from the EU on all these issues. It is about some form of free trade arrangement, although goodness knows what, when what is at the front of the Government’s mind gets more confusing by the day. Leaving that to one side, it is not about having these kind of relationships.

I view the three Ministers who are in their places on the Front Bench as people who all care about these issues, so I urge them not to leave their climate convictions at the door when it comes to the Whitehall battles around Brexit. As I said at the outset, I do not doubt their commitment, but they have got to prove it in the proposals that the Government eventually produce.

Finally, I believe in the principle of co-operation with our closest neighbours in Europe, and I believe that we are strengthened, not diminished, as a country when we do that. Climate change is just one example of where that is the case. That was true before the referendum, and it is true after the referendum as well. I think that both the Secretary of State and the Minister of State know that, too. The stakes could not be higher on this issue and on what unfolds in the coming months and years. We will hold them to account, because Members of all parties care about not just tackling climate change, but making sure that we can continue to punch above our weight as we do so and get the right outcome for humankind. A lot rests on those Ministers’ shoulders; if they make the right decision, we will support them on it.

--- Later in debate ---

[Dr Alan Whitehead (Southampton, Test) (Lab)]

The hon. Member for Wells (James Heappey) described the hon. Member for Monmouth (David T. C. Davies) as an “oracle”. I cannot resist observing that the oracle at Delphi was a priestess known as the Pythia who raved incoherently under the influence of the noxious gases coming up from beneath the earth’s surface and whose comments were then translated by the priest for the delectation of the general public. I shall simply let that observation fall to the floor, for what it is worth.

Today’s debate is about not just the ratification of the Paris accords, but the consequences of their ratification for the UK, and the ability of the UK to ratify them in good faith and good order on the basis of what it recognises as the commitments it will undertake as a result of being a party to the accords. In that context, it is important not only to clarify one or two points about the ratification process, which we have already done to some extent today, but to review the process and how it relates to issues such as the existence or otherwise of a low-carbon programme that actually sets out what we are committed to. I would have thought that it would have been a particularly good idea—or should be particularly good idea—to make the low-carbon programme available at the same time as the consideration of the ratification process so that we could have the full raft of information in front of us, but I will return to that point in a moment.

It is clear that the ratification process has two stages, as we have discussed, and that the UK’s particular responsibility now is to put an order—the EU treaty converted into an order—in front of the House and to get our bit done, which, as I mentioned in an earlier intervention, France has managed to do. That is important not only to get the business done for our country, but to ensure that the EU ratification is made as speedily as possible by getting the full process undertaken, especially by the heavy-hitters such as the UK, at the earliest possible time.

It is also important to clarify what we are undertaking in our joint ratification with the rest of the EU. As my right hon. Friend the Member for Doncaster North (Edward Miliband) underlined earlier, we need to clarify our ratification position as the Brexit process is undertaken. As far as we are concerned, the INDCs that were put on the table in Paris form part of the European bloc for the international negotiations. We have a joint INDC with all other EU member states, and the commitments that come from that relate to ambitions not for 2050, but for 2030, given the 40% reduction in emissions between 1990 and 2030 that was jointly agreed among all participating EU states.

The INDCs will then be the subject of progress reports. The INDCs together represent a reduction in temperature of substantially less than the 2°/1.5°C ambition, coming in at 2.6° or 2.7° in the overall INDCs. Therefore, the conference of the parties progress reports on how the INDCs are going will not only consider whether countries have carried out their INDCs, but form part of a process of strengthening them over time to get further commitments and to move them down towards a reasonable target or ambition for global temperature stability.

In those circumstances, by my reading, we will be in the first review period just at the point when we will be undertaking Brexit, so the INDCs that we had negotiated jointly with the EU may no longer be seen as tenable for the UK. The question we may have to start to face in those international negotiations is: do we, as my right hon. Friend the Member for Doncaster North said, seek to nail ourselves down in the EU discussions on the INDCs, or do we decide at some stage that we are somehow going to develop our own INDC, which will be recalibrated from whatever it is we think we have allowed ourselves to be put in line for within the EU? If we do that, does that recalibration indicate a lessening or an intensification of our commitment? Better still, is there simply an agreement that, whatever else Brexit may say, we are committed to that joint INDC on the basis of whatever is shared out by the EU as the process goes forward? I would value a thought from the Minister about what the intention on the INDCs might be, because that is important for clarifying our long-term commitment over the next period in reality.

Notwithstanding that, the ratification process will take place on the basis that we are committed to being part of the European basket of a 40% reduction by 2030 as our offer from Paris and beyond that. The question of the missing low-carbon programme therefore starts to loom large because, as a result of Paris, we need to know whether the UK is really able to deliver on that 40% reduction, be it separately or as part of that EU programme. The whole issue of ratification must have that as one of the questions within it—are we able to do what we said we would be doing at the time of the agreement?

At the time, it was welcome news that the Government went ahead and agreed to the fifth carbon budget, and that they did so without any suggestions that there might be caveats attached, unlike what happened with the fourth carbon budget. That sent a clear signal about what our overall ambitions should be. A question then arises about the fourth and fifth carbon budgets moving forward, and whether we can fit what we have agreed regarding the INDCs into the process of agreeing those carbon budgets and their consequences. That is where we start to have a problem. I am increasingly concerned about whether we have the policy instruments in place and the wherewithal to reach a position where we can say, hand on heart, “Yes, we are in this seriously.” Indeed, that concerns not only me but, more importantly, the Committee on Climate Change. Its recent progress report to Parliament on carbon budgets made the important point that although, as the Minister mentioned, our progress on tackling overall emissions has historically been looking pretty good over the recent period, with emissions falling by an average of 4.5% a year since 2012, that has been almost entirely due to progress in the power sector, not progress in the rest of the economy.

The Committee on Climate Change says that, in the rest of the economy, emissions have fallen by less than 1% a year on a temperature-adjusted basis. It specifically says that that is because of a slow uptake of low-carbon technologies and the behaviour of the building sector—low rates of insulation improvement and low take-up of low-carbon heat—as well as because improved vehicle efficiency has been offset by increased demand for travel. It also says that there is minimal evidence of progress in the industrial and agricultural sectors. The Committee is beginning to sound alarm bells about the extent to which we will be able to make the progress that is needed if we are to carry out those INDCs properly.

The Committee on Climate Change points out that, even as far as the energy sector is concerned, some areas have seen progress. It says that funding for offshore wind has been extended to 2026, which I very much welcome as an important step towards attaching the next stage of the levy control framework to offshore wind. However, the Committee says that there are backward steps in other areas, and Members will not be surprised to hear what they are: the cancellation of the commercialised programme for carbon capture and storage; the reduction in funding for energy efficiency; and the cancellation of the zero-carbon homes standard.

The Committee on Climate Change also says that other priorities have not moved forward. There have been no further auctions for the cheapest low-carbon generation, no action plan for low-carbon heat or energy efficiency, and no vehicle efficiency standards beyond 2020. It also says that progress on improving the energy efficiency of buildings has stalled since 2012. Annual rates of cavity wall and loft insulation in 2013 to 2015 were down 60% and 90% respectively from annual rates between 2008 and 2012. I cite these points from the Committee given its status as an expert body.

The carbon budget and carbon programmes have substantial ramifications for endeavours, aspirations and targets way beyond the size of what appears to be the policy put in place at a particular moment. I have a lot of sympathy with the Minister in his task of putting the new low-carbon programme together over the next period. He inherits a number of issues that have percolated down to short-term policy decisions, which have substantial ramifications on climate change targets over the longer period. Like my right hon. Friend the Member for Doncaster North, I would like to big up the Minister’s new post. It is a good idea to have a Minister for climate change who is completely onside as far as climate change is concerned. Not only is he onside, but he has a long record of being onside. His commitment to this cause is absolutely unquestionable.

[Edward Miliband]

We have finished him off now.

[Dr Whitehead]

Indeed, yes. That is now two stabs to the heart of the Minister’s career.

In his responsibilities and those of his Secretary of State, the Minister has a problem arising from the flurry of policies over the past year on the long-term considerations relating to climate change effects. If his new Department lets those policy changes lie, or runs further with them, the problem will be exacerbated, and his problem of writing a low carbon programme will be magnified.

The new Department benefits from particularly good appointments in the form of Ministers who completely understand and are at ease with the question of what we need to do, where we need to do it, how we need to do it and what the effects will be. We need to identify where those effects may continue to be felt outside the new Department. We can point the finger at what happened with some of those changes under the previous Department of Energy and Climate Change, and we can point the finger in the direction of the Treasury. During the latter stages of the previous Government and in the first period of the present Government, we had the Treasury’s energy and climate change policy and the Department’s energy and climate change policy, and the two rarely coincided. Let us guess who came out on top in terms of policy direction.

My first plea, coupled with kindly advice to the Minister, is to get on top of the Treasury straight away. If Treasury domination of energy and climate change policy is allowed to continue, regardless of the long-term climate consequences, the writing of a new carbon policy will end in tears. To illustrate that, we can look at the previous carbon plan, which came out in December 2011. That plan not only contained some bright ideas, but set out where we were, where we wanted to be in 2050 and how the transition would be undertaken in each of a series of sectors, and that was analysed thoroughly for those sectors.

In the context of the 40% emissions cut that we are now looking at in the European INDCs, the assumptions underlying a low carbon plan are important. How effectively do they cover where we are now, where we are going to be in 2050, how we make that transition and how that transition works in 2030, which is the period that we are now considering? The carbon plan 2011 is clear about carbon saving, the green deal and ECO. It envisages that all practical cavity walls and lofts will be insulated by 2020 and up to 1.5 million solid walls will be insulated. We know that that has gone. There is no longer even a remote chance of such an achievement, particularly with respect to solid walls and probably also with respect to other forms of insulation, because the green deal has gone and ECO has morphed into a pretty restricted version of the original ECO. Yet, the Committee on Climate Change, in its preamble to the fourth carbon budget, suggested, as an assumption in that carbon budget, that by the early 2020s over 2 million treatments of solid-wall properties would have to be undertaken as a central contribution to carbon reduction. So that has gone.

The 2011 programme says carbon capture and storage will

“make a significant contribution by 2030”.

In the scenarios modelled, it is estimated that CCS will contribute as much as 10 GW. Well, that has gone. The Treasury managed to bundle CCS into a cupboard very neatly just a little while ago. Personally, I thought that was one of the biggest enviro-crimes committed by the Treasury, in terms of its policies of cutting off the fundamental route to decarbonisation of remaining baseload power over the period and apparently not worrying about the consequences.

The 2011 carbon plan says:

“From 2030 onwards, a major role for gas as a baseload source of electricity is only realistic with large numbers of gas CCS plants.”

We have committed ourselves to close down coal by 2025, although we have yet to see the consultation on that, but that is to be undertaken, it is stated in the relevant consultation, only if the progress on building new gas plants is sufficient to allow that to happen—that is, the commitment is to phase out coal, but to replace it with a new dash for gas. Yet, the carbon plan and, indeed, the Committee on Climate Change indicate very clearly that gas itself can be maintained as a baseload only if it has a substantial amount of CCS attached to it. We are apparently going ahead with the dash for gas over the next period without any thought that in the reasonable future CCS may come in as far as gas itself is concerned. That has a substantial impact on our ability to meet the fourth and fifth carbon budgets over the next period.

The low carbon plan says:

“Looking to the future, between 21% and 45% of heat supply to our buildings will need to be low carbon by 2030”,

but the then Secretary of State warned last year that we are failing badly on our 2020 heat targets and there is no chance at present of getting to our 2030 target, so that contribution has also gone.

Finally, let me just pick out some of a larger number changes from the 2011 report. The report said

“all new homes from 2016”

will “be zero carbon”, which would make a considerable contribution to the fourth and fifth carbon budgets. Well, of course, those homes will not be zero carbon, because the zero-carbon homes plan has also been pulled.