Action on Climate Change and Decarbonisation

Kerry McCarthy Excerpts

Tuesday 5th July 2022 Commons Chamber

[Kerry McCarthy (Bristol East) (Lab)]

I am mightily relieved to see that the Minister is still in his place. I hope he manages to hang on until 7 o’clock; he might find he is the last man standing on the Government Front Bench. If he does want to tell the House about his resignation when his time comes, rather than tweeting it, I am sure we would be delighted to be the first ones to know. There are times when we speak in this Chamber and we feel that the eyes of the world are upon us. I think it is fair to say that this is not one of those occasions, but it is an important debate, and I thank the right hon. Member for Ludlow (Philip Dunne), the Chair of the Environmental Audit Committee, for securing it.

I wish there was a bit more to discuss. As we have heard, last week the independent Climate Change Committee delivered its annual verdict on the Government’s climate strategy, or what there is of it. I think the Chair of the Select Committee let the Government off a little lightly in his quote from that report, which was an absolutely damning read. It talked about major failures in delivery programs and stated that

“we are not seeing the necessary progress”,

and

“the Government is failing in…its implementation”.

It also said that the current strategy will not deliver net zero. The committee concluded that the Government have credible plans for achieving only 39% of the emissions reductions required. This comes less than a year after COP, when we still hold the COP presidency and ought to be showing international leadership.

It is not just the Climate Change Committee saying that the Government have fallen short. The Public Accounts Committee report published at the beginning of March said that the Government still have

“no clear plan for how the transition to net Zero will be funded”,

or

“how it will…replace income from taxes such as fuel duty…and…has no reliable estimate of what the process of implementing the net zero policy is actually likely to cost British consumers, households, businesses and government itself.”

It went on to say that the Government have

“too often pursued stop-start strategies which undermine confidence for business, investors and consumers in committing to measures which would reduce carbon emissions, especially when some green alternatives are still significantly more expensive than current options.”

We heard that from a few speakers. I think the hon. Member for Hitchin and Harpenden (Bim Afolami) talked about how businesses need the confidence to be able to invest, how they need a sense of direction from the Government and how they need to know that they will be backed up.

We heard from the Chair of the Environmental Audit Committee that the global situation requires a rapid recalibration of the Government’s strategy, and that waiting for the right technology to turn up is not a strategy in itself. Again, that is a plea for a clearer sense of direction from the Government. He said—I hope I am quoting him right—that the Government prefer to delay substantive action to a future date, post election. We might find that comes a bit sooner than we were expecting when he made those comments, but let us see. I would certainly say that the time for action is now.

We have seen that day-to-day spending in BEIS has increased by 71% since the last supplementary estimate. That has mostly been driven by this increase of £11.6 billion for the energy bill support scheme. As has been said by several people, including the right hon. Member for Kingswood (Chris Skidmore) and the Chair of the Environmental Audit Committee, this is not a net zero measure unless it is linked to ending investment in fossil fuels, which we know it is not. I expect that we will shortly hear criticisms on that front. It was quite damning how the right hon. Member for Kingswood said that it was simply not true to say that this is a net zero measure. He talked about using false figures in our accounting; I thought those were strong words, but they are true. Once that figure is discounted, we see that little money is going on the most important measures that should be being put in place to deal with emissions. Several people mentioned the need to insulate and retrofit homes, which would simultaneously slash emissions and bring down energy bills. That should have been an urgent national priority as energy costs soared. As has been said, if we invested in that, it would bring down energy bills year on year.

[Chris Skidmore]

When it comes to future measures—I am conscious that some of these schemes were announced by a Chancellor who has resigned in the past half hour and is no longer here to defend them—we need to introduce the concept of conditionality. It has been done in France and other continental countries but not in the UK, and it means that an investment is made on the condition that it is seen through in future green investment.

I pointed out that the £11.6 billion is money out of the door with no consequential effect on delivering on net zero. That money—£400 a person—could have been delivered on the condition that it was later spent on green home improvement measures using a voucher scheme. We need to think carefully about how we deliver those schemes in future so that we can benefit people in a cost of gas crisis—it is not just a cost of living crisis—and see real change on the ground.

[Kerry McCarthy]

The right hon. Gentleman is correct. We should be looking at long-term solutions, not short-term fixes. When the next rise in energy bills comes in the autumn, people will quickly discount that money. They will obviously be grateful to have had some money to help towards their bills, but they will not feel as though they have benefited a lot. Insulation, however, would mean that they had something to see them through future years.

As I said, housing should have been a priority. Properly retrofitting homes would significantly reduce the 20% of UK emissions that come from buildings, as well as cutting bills. That is why Labour has pledged £6 billion a year to retrofit 90 million homes in a decade. My neighbour, my hon. Friend the Member for Bristol North West (Darren Jones), talked about a national street-by-street programme. I would welcome that, provided that it started in Bristol East rather than Bristol North West—we will work our way round to him eventually. If Bristol is getting some money for that, I want to be first in the queue.

There are other examples where the now ex-Chancellor seemed keen to claw back green spending wherever he could. The plug-in grant for electric vehicles was scrapped just weeks ago. The planned landscape recovery fund to rewild our countryside was recently gutted from £800 million a year to £50 million over three years. In these estimates, we see a £76.8 million reduction in funding for carbon capture and storage, despite the Climate Change Committee highlighting concerns last week about the Government’s support for the sector. As the Chair of the EAC said—I seem to be quoting him a lot, which is a tribute to his excellent speech—CCS is not a magic bullet. We are simply not there yet; there is huge potential, but we cannot magic it out of thin air. There has to be a strategy to get us into a position to make use of it.

There are many things that the Government could do if they were worried about the costs of going green. They could scrap the plans to provide a huge tax break for investment in fossil fuels in the upcoming Energy (Oil and Gas) Profits Levy Bill, which we will debate next. The way that that is envisaged at the moment means that the Government will provide 20 times more in taxpayer incentives for investment in fossil fuels than in renewables. Although we are flattered that the Government eventually saw sense and adopted our idea of a windfall tax, the way that they are going about it is all wrong.

The Government are simply not going far or fast enough to tackle the climate emergency. There has been no investment in the gigafactories that we desperately need to boost production of electric vehicles in the UK. That is about not just producing batteries here but ensuring that we retain the car manufacturing that is essential to many of our communities. That investment would also create 30,000 good green jobs in the process.

The installation of EV charging points is still moving at a snail’s pace, like some of the cars, with only 830 public chargers installed last month and the need for at least 270,000 more by 2030 to keep pace with demand. It is good that people are choosing to make the shift, but they need support from the Government to get from A to B; anyone who has an EV knows the perils of trying to find a public charging point when they need one. Energy intensive industries such as steel are still crying out for investment to help them to make the transition to low-carbon manufacturing.

The Government seem to be running scared of investing in climate action. They can only see the cost and they are blind to the opportunities. The Minister should remember that the Climate Change Committee estimates that even without factoring in the benefits of green growth or the impact on public health, reaching net zero will cost less than 1% of GDP. Another 0.5% of GDP could be saved by moving away from costly fossil fuels rather than fracking for more, as the Department appears determined to do. Wise investment would lead to lower bills for consumers, good green jobs and sustainable economic growth. It is not just right to tackle climate change; it will get us out of this cost of living crisis.

Labour will treat this issue with the seriousness it deserves by investing £28 billion a year to tackle the climate emergency, grow the green economy and get cheap green technologies into people’s hands. People want to upgrade their homes to bring down bills, they want to buy electric cars that will be cheaper to run as well as more environmentally friendly, and they want to make greener choices about what they consume, but the Government have to step up to support them in making this transition. That means recognising the urgency of the situation, putting climate action at the heart of every spending decision—on homes, energy, transport and more—and doing a lot better than the Government are doing now.