Oral Answers to Questions

Gareth Davies Excerpts

Tuesday 5th September 2023 Commons Chamber

[Wera Hobhouse (Bath) (LD)]

16. What assessment he has made of the potential impact of climate change on the economy.

[The Exchequer Secretary to the Treasury (Gareth Davies)]

The Treasury’s 2021 net zero review noted that unmitigated climate change damage has been estimated to be the equivalent of losing between 5% and 20% of global GDP each year. The costs of global inaction significantly outweigh the costs of action, and McKinsey estimates that there is a global market opportunity for British businesses worth £1 trillion.

[Nadia Whittome]

A recent report from Carbon Tracker found a huge disconnect between what scientists expect from climate change and what our financial system is prepared for, with flawed economic modelling leading pension funds and others to seriously underestimate the risks. Meanwhile, Energy UK warns that we are lagging behind on green energy investments. Surely the Minister agrees that to revive our economy and avert climate catastrophe we must rapidly phase out fossil fuels and invest in a green new deal to reach net zero.

[Gareth Davies]

It is important to point out that we are the fastest decarbonising economy in the G7. Since 1990, we have decarbonised by 48% while growing our economy by 65%, but the hon. Lady is right: this will take a balanced approach involving both public spending and private investment, including pension fund investment. The recent pension fund reforms, for example, should unlock some new assets for green infrastructure.

[Wera Hobhouse]

I agree with the question about the Carbon Tracker report. It has found that policy decisions are being based on 1990s literature. That is 30 years old. Will the Chancellor review the data and the thinking that the Government are using to make sure that all strands are in line with the climate science of the 21st century?

[Gareth Davies]

The data that I look at shows that last year 40% of our electricity was generated from renewables. That is an amazing achievement, but we are alive and present when it comes to decarbonising our economy. We have great plans and we are building on our great track record. We will continue to do that.

[Steve Tuckwell (Uxbridge and South Ruislip) (Con)]

Thank you, Mr Speaker. Does my hon. Friend agree with my Uxbridge and South Ruislip constituents that Mayor Khan’s ultra low emission zone expansion hits families and businesses without any significant environmental benefit?

[Gareth Davies]

Let me welcome my hon. Friend to his place. He has wasted no time whatsoever in advocating for his constituents against a Labour tax that is hitting households and businesses in his constituency and throughout the south-east. It is a massive tax bombshell at a time when families just do not need it. It is simply not right, and we would urge the Leader of the Opposition to tell his Mayor of London to stop it.

[Richard Fuller (North East Bedfordshire) (Con)]

The shadow Chancellor has said that she will not rule out mandating the use of pension fund money for the pet schemes that the Labour party thinks will achieve net zero, putting at risk the savings of many pensioners in this country. What does my hon. Friend think the impact of that will be on the British economy?

[Gareth Davies]

Pension funds have a fiduciary responsibility to deliver a financial return but also to be mindful of the values of their pensioners. I have every confidence that pension funds will continue to invest in line with the risk that is presented by climate.

[Mr Speaker]

I call the shadow Minister.

[Abena Oppong-Asare (Erith and Thamesmead) (Lab)]

This Tory Government effectively banned new onshore wind, which is vital for net zero, energy security and getting bills down. We now learn this could change because one fine group of Tory rebels is shouting louder than another group of Tory rebels. There is no leadership, just a Government led by their Back Benchers. Can we finally get an answer from the Government on whether they will dither and delay or join Labour in leading the way and acting on onshore wind?

[Gareth Davies]

Onshore wind has an important part to play, and we are already deploying 14 GW of energy from onshore wind. The cost of onshore wind has come down significantly. It is one of our cheapest energy sources. The hon. Lady does not have long to wait for the Energy Bill, which we are considering later today.

[Fleur Anderson (Putney) (Lab)]

3. What recent assessment he has made of the potential impact of the growth plan of 23 September 2022 on mortgage interest rates.

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[The Exchequer Secretary to the Treasury (Gareth Davies)]

In April this year the Government announced that we would conduct a formal review of the plastic packaging tax through analysis of environmental and tax data and customer research to assess the impact of the measure. More information about the evaluation will be published later this year.

[Caroline Ansell]

I am pleased to share that a business in my Eastbourne constituency has made many important changes in the way it operates in order to meet its own environmental ambitions, but when it comes to the transportation of food and pharmaceutical products, industry standards linked to public health regulations require such products to be transported in sterile packaging, which necessitates the use of virgin plastics and brings the containers that the business produces into scope for the plastic packaging tax. Is there a new direction I can share with that business, or will ongoing policy reviews look at such cases?

[Gareth Davies]

The aim of the plastic packaging tax is to provide a clear incentive for businesses to use more recycled plastic in packaging. Following extensive consultation, we looked at a range of possible exemptions and decided to limit those exemptions because we want to encourage innovation in the industry. Put simply, the more exemptions, the less innovation. However, all taxes remain, of course, under review.

[Kerry McCarthy (Bristol East) (Lab)]

A proactive approach to a circular economy could create hundreds of thousands of jobs and cut our consumption emissions. What circular taxation measures is the Treasury looking at to help us achieve those outcomes?

[Gareth Davies]

We are clear that we want all taxes relating to the environment to have an impact. The plastic packaging tax, for example, will clearly have an impact on the amount of recycling that takes place and on the amounts put into landfill. Those are all things that we assess as part of evaluations, and the plastic packaging tax will be evaluated this year.

[Nigel Mills (Amber Valley) (Con)]

10. What steps his Department is taking to incentivise pension schemes to invest in the UK.

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[Alison Thewliss (Glasgow Central) (SNP)]

T5. I recently conducted an energy survey in Dalmarnock, which brought heartbreaking stories of pensioners going to bed early to save money on their energy and many households struggling to pay the bills, even in summer. Does the Minister not agree that Dalmarnock residents and people right across Scotland would benefit from a £400 energy rebate this winter, as the SNP proposes?

[The Exchequer Secretary to the Treasury (Gareth Davies)]

We stepped in during the energy crisis with £94 billion of support, including the energy price guarantee, which effectively paid for half of people’s energy bills. That was important while energy prices were high; wholesale gas prices have now come down.

[Craig Tracey (North Warwickshire) (Con)]

T6. As the Minister knows, free access to cash is a vital lifeline for many people, including some of the most vulnerable in all our constituencies. Can he confirm what steps he is taking to ensure that free access is protected and continues to be available across the country, particularly in North Warwickshire and Bedworth?