Green Economic Recovery

Lord Callanan Excerpts

Monday 14th December 2020 Lords Chamber

[Baroness Ritchie of Downpatrick]

To ask Her Majesty’s Government what plans they have to promote a green economic recovery in response to the impact of the COVID-19 pandemic.

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)]

My Lords, as we rebuild, we must build back greener. Last month, the Prime Minister announced our Ten Point Plan for a Green Industrial Revolution, spanning clean energy, buildings, transport, nature and innovative technologies. The plan will mobilise £12 billion of government investment to unlock three times as much private sector investment by 2030, level up regions across the UK, and support up to 90,000 highly skilled green jobs.

[Baroness Ritchie of Downpatrick (Non-Afl) [V]]

Further to that, could the Minister outline what consideration the Government have given to the incorporation of a national retrofit strategy as a key infrastructure priority and a core element of their industrial strategy?

[Lord Callanan (Con)]

The Government will publish a heat and buildings strategy in the coming months; this will set out the immediate actions that we will take to reduce emissions from buildings, including deploying energy-efficiency measures and transitioning to low-carbon heating.

[Baroness Clark of Kilwinning (Lab)]

Does the Minister agree that, as we come out of the pandemic, there is a real risk that we will revert to the kinds of economic practices that created the climate crisis in the first place? No economic conditions of an environmental nature seem to have been placed on the money that has been put into the economy during the pandemic, so can he give an assurance that as we approach the COP 26 climate talks in Glasgow next year we will look seriously at how we both address the economic inequalities that have been exposed by this crisis and create a green economy? Does he agree with me that that will require significant shifts in both government policy and investment strategy?

[Lord Callanan (Con)]

The noble Baroness makes some important points, but, of course, all of the 10-point plan was exactly about building a UK that is greener, more prosperous and at the forefront of industries for the future.

[Lord Dodds of Duncairn (DUP) [V]]

The energy White Paper published today talks about kick-starting the hydrogen economy. I warmly welcome this commitment. How will the Government ensure fair access across all parts of the United Kingdom to the net zero hydrogen fund and the other funding streams, not least research and development?

[Lord Callanan (Con)]

The noble Lord is quite right to point out the importance of low-carbon hydrogen, and, working with industry, we are aiming for 5 gigawatts of low-carbon hydrogen production capacity by 2030. We will try to ensure that all parts of the United Kingdom can benefit.

[Lord Sheikh (Con) [V]]

My Lords, I declare an interest, as I am the co-chair of the APPG on Islamic Finance. Islamic finance can play a role in the green industrial revolution. As we will issue our first sovereign green bonds in 2021, I ask my noble friend the Minister: will Her Majesty’s Government consider the issuance of green sovereign sukuks, which will help support a green economic recovery following the pandemic? I believe that our financial services sector will play a key role in the economic recovery.

[Lord Callanan (Con)]

As the noble Lord rightly acknowledges, next year the UK will issue its first sovereign green bonds, subject to market conditions, and it intends to follow up with a series of further issuances to meet growing investor demand. However, this is a matter for the Treasury, whose Ministers will update Parliament shortly.

[Lord Taylor of Goss Moor (LD) [V]]

My Lords, first, I draw attention to my registered interests in renewable heat and sustainable development. Will the Minister acknowledge that the present taxation system fails to reflect the shift in the carbon intensity of energy, with sustainable electricity—and, indeed, electricity in general, which is now much more low-carbon—costing four times, per kilowatt, what gas now does? Is it not time to shift the tax system to reflect the priorities the Government have in their green agenda to shift what people do?

[Lord Callanan (Con)]

I thank the noble Lord for trying to tempt me down the road of reforming the tax system, but I will happily leave that for the Chancellor to announce.

[Baroness McIntosh of Pickering (Con)]

Will my noble friend join me in congratulating farmers on both responding to the Covid epidemic and delivering a green environmental economic recovery? What could be greener than buying locally produced meat, dairy products and cheese this Christmas? Will my noble friend join me in doing so?

[Lord Callanan (Con)]

I thank the noble Baroness for her question. She is quite right, of course: the farming community has had a very difficult year, as have many other industries. Where possible, we should all buy local freshly produced produce.

[Lord Ravensdale (CB)]

My Lords, I declare my interests in the register. The voice of the regions will be key to our green economic recovery. The Midlands Engine’s green growth conversation aims to bring together key players in the energy sector, including local authorities, LEPs, businesses and academics to create a regional action plan. What plans do the Government have to interact with such initiatives and support existing regional strengths to enable a clean economic recovery?

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[Lord Callanan (Con)]

The noble Lord makes a very good point; the Midlands green growth conversation is an important piece of work, and I look forward to the Midlands Engine growth action plan, which I understand is being published in the new year. The 10-point plan sets out our intention to “reinvigorate our industrial heartlands”, such as the north and the Midlands.

[Lord Stevenson of Balmacara (Lab) [V]]

My Lords, we face increasingly high levels of unemployment post-Covid-19, so does the Minister agree that retraining will be key to the green recovery? Can he explain why that is not mentioned in the 10-point plan? Can he also confirm what budget has been allocated for retraining and that it will be additional to the funding already announced?

[Lord Callanan (Con)]

I agree with the noble Lord that retraining will play an important part. We recently launched the Green Jobs Taskforce to support it. It will look at the key challenges faced by employers and workers in supporting a green recovery, ensuring that we have the right pipeline of talent and skills provision.

[The Lord Speaker (Lord Fowler)]

Baroness Walmsley?

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[Baroness Hayman (CB) [V]]

My question was about the Economic Affairs Committee report published today. It makes it clear that recovery from Covid-19 and investment in a green economy for the future are far from divergent aims; they are complementary. Does the Minister agree with the contention in that report that government spending should be on policies more tightly focused on creating job opportunities that reflect the long-term context and that the Government should prioritise green projects that can be delivered at scale and quickly and can take place across the country?

[Lord Callanan (Con)]

I agree with the noble Baroness that we need to generate more green jobs and to build back better—that was the aim of the 10-point plan, and it is a central aim of the Government. The noble Baroness makes an important point and we shall endeavour to do exactly that.

[Lord Randall of Uxbridge (Con) [V]]

My Lords, on The 10-Point Plan for a Green Industrial Revolution, may I urge my noble friend to press his department to invest some of the £5.2 billion promised over six years for flood and coastal defences in creating new wetlands, which would deliver massive benefits for the environment, nature, communities and, of course, jobs?

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[Lord Callanan (Con)]

My noble friend makes an excellent point. He will be aware that in the 10-point plan we are doubling the green recovery challenge fund with an extra £40 million. Nature recovery can indeed help us to mitigate and adapt to climate change by capturing carbon and providing other environmental benefits. My noble friend’s point is very well made.

[The Lord Speaker (Lord Fowler)]

If the noble Baroness, Lady Walmsley, is still with us, I am quite prepared to take her question now.

I think we can take it that she is not. All supplementary questions have been asked, which brings Question Time to an end.