10-point Plan: Six Months On

Lord Callanan Excerpts

Wednesday 19th May 2021 Lords Chamber

[Lord Grantchester (Lab)]

I thank the Minister and his department for the energy Statement. This is the scatter-gun 10-point plan: six months on—the repeat. We have a climate emergency, the most pressing issue of our age, which the Conservatives call hyperbole. They cannot bring themselves to declare and sign up to the size of the challenge. The Statement says the Government are already delivering on it, yet in the next sentence says the plan is projected to create so many jobs and mobilise so much investment. These are targets without delivery, rhetoric without reality and wishful thinking. This is underlined by the point in the Statement that says the Government

“have enshrined the UK’s sixth carbon budget in law”.

However, this is yet to happen. The statutory instrument has yet to go through your Lordships’ House for approval. We will not oppose it, but merely point out that the Government have yet to meet the fourth and fifth carbon budgets, mentioned in the Statement, which refer to years sooner than those referred to in the sixth carbon budget.

The climate emergency is real. What these scattergun headlines miss is a comprehensive overall plan, with priorities and route maps along the way to meet in a systematic way the challenges we face. I congratulate the Government on starting to face the task since announcing the scattergun headline plan six months ago. The gestation is slowly evolving. The Government have at least published the energy White Paper, The North Sea Transition Deal, and have begun to recognise the further missing strategies as ingredients that need to be addressed and delivered if this plan is to be comprehensive. The response to the climate emergency is nowhere near being oven ready.

I thank the Minister for recognising in this Statement that we still need a heat and building strategy ahead of COP 26. We still need a transport decarbonisation plan. More than ever, we need a national retrofit and fuel poverty strategy with skills training, now that the green homes grant scheme has been abandoned and its funding withdrawn, rather than being allocated elsewhere. Where is the Treasury’s crucial net-zero review, due in the autumn last year, then promised this spring? Can the Minister give us another target? When will it see the light of day and set the overall size and context of the financial commitment needed? Germany has invested £38 billion in a green recovery, France £31 billion; and in the US President Biden has committed $1 trillion of his green infrastructure plan to green initiatives.

Will the Government commit to bringing forward the £30 billion green recovery fund Labour has called for? Do Government now accept that the UK is facing a climate emergency, and do they believe that this scattergun 10-point plan is really meeting the scale of that emergency? According to the climate change committee, the Government’s emissions target needs £50 billion of public and private investment every year by 2030, but the scattergun plan promises only £54 billion of public and private investment over the entire next 10 years put together. Has the Minister seen this analysis and how does he propose the Government make up the shortfall?

The Government’s emissions target will require huge changes, including the full decarbonisation of our power sector by 2035 and half of new cars sold by 2025 being electric. Can the Minister lay out in precise terms how the scattergun 10-point plan will achieve this? Will he commit to publishing his modelling? Given that petrol and diesel cars cannot be sold from 2030 onwards, what plans do the Government have to ensure that those on low to middle incomes are not priced out of electric car ownership?

The Government and the nation have a long way to go. Industry will play its part. As recently stated, much of the technology that will be needed to achieve net zero has yet to come into existence and be readily available. Hydrogen will be a key part of the energy mix and key to the decarbonisation of heat, as well as the solution to rail transport, especially for freight. There is a massive opportunity for Britain, with our fantastic scientists, our brilliant workforce and world-leading businesses. We need a Government with ambition and real commitment who get the task done, matching the ingenuity and inspiration of the British people. The Minister has shown great bravery in announcing his scattergun plan—the repeat—so soon. The Government are second to none at self-congratulation. Labour has put some clear red lines through much of the rhetoric and has a sharp message across the bottom: “Good but must do better”.

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

I thank the noble Lord, Lord Grantchester, for his comments. Obviously, I do not agree with many of them, but let me go through the points he raised in turn.

He talked about the fifth and sixth carbon budgets. The noble Lord needs to see this in the context of the UK’s record on decarbonisation. As he said, we have recently, on 21 April, laid the legislation to set the sixth carbon budget, covering 2033-2037. That will require a 78% reduction in emissions compared to 1990. In addition to the carbon budgets, as he is well aware, we have set the highly ambitious nationally determined contribution, through the UN process, to reduce emissions in 2030 by at least 68% compared to 1990 levels. This is the highest reduction target made by any advanced economy. We have shown through our actions that cutting emissions and growing the economy can go hand in hand. We achieved record clean growth between 1990 and 2019. Our economy has grown by 78%, and at the same time, we have managed to reduce emissions by 44%. That is a better record than any other G7 nation. I would have hoped that the noble Lord might at least have given us some credit for delivering that.

The noble Lord mentioned the green homes grant. Yes, we will not hide from the fact that it did run into some difficulties in terms of delivery, but we have made excellent progress across much of the investment. We have invested substantial sums in social housing, schools and hospitals, as well as in homes through the green homes grant, in particular supporting local authorities through the local authority delivery scheme. As he will be aware, the Chancellor also announced additional funding of £300 million going into the local authority delivery scheme, and we are working in partnership with many local authorities. I have met with many of them, and they are very grateful for this funding.

He asked about the Treasury net zero review. We have announced that the net zero report will be published this spring. It was delayed from autumn last year because of the pandemic. In the meantime—in order to keep his reading up to speed—Her Majesty’s Treasury published an interim report this autumn. This sets out our approach to the review and analysis which will form the final report. The initial timing of the review was delayed due to the Covid crisis. Given these circumstances, we took the decision to move publication to 2021, so if he will have a little bit more patience, the review will be there for him to read shortly. He also mentioned our investment in transport decarbonisation. Let me give him some of the figures. We have provided £1.3 billion to accelerate the rollout of charge points for electric vehicles, we have provided £582 million in plug-in vehicles grants, we have spent nearly £500 million on the automotive transformation fund and we spent considerable sums on improving public transport and government investment in low-carbon buses and trains. In March, we published England’s long-term national bus strategy, setting out a bold vision for bus services across the country.

He also asked about the transport decarbonisation plan. We have announced that the UK is embarking on a comprehensive transport plan—a bold and ambitious programme of co-ordinated action needed to meet the UK’s transport greenhouse gas emissions targets through to 2050, and that ensures that the transport sector plays its part. I think I have responded to most of his points.

[The Deputy Speaker (Baroness Pitkeathley) (Lab)]

My Lords, we now come to the 20 minutes allocated to Back-Bench questions. I ask that questions and answers be brief so that I can call the maximum number of speakers.

[Lord Bradshaw (LD) [V]]

I have given notice to the Minister that I wish to concentrate on the role of the national grid. On a number of occasions that I have come across, the national grid has been shown to be operating at margins that are very close. For example, and this is an instance that I am familiar with, if you want to run a couple more freight trains up the east coast main line, immediately the shout goes up, “The power supplies will not support this!” It is the case that throughout the economy a lot of people are going to have to spend a lot more money on electricity both to charge their cars and run their trains, particularly freight trains. I am something of a hydro-sceptic, but even if you want hydrogen you are going to have to spend electricity money on it.

When I looked today at National Grid’s shareholders, many of them could hardly be described as friends of Great Britain. The sorts of friends that you see in that list are perhaps not always the sort with which you wish to be associated. So my question for the Minister is: is Ofgem up to the job of making sure that National Grid is preparing plans so that the electricity is available to do many of the things to which he has drawn attention? This is possibly a national fault, but we run too close to the margin and then, when we want to do something a bit extra, find that we cannot.

[Lord Callanan (Con)]

The noble Lord has drawn attention to some important questions. Of course, as we proceed with decarbonisation there will be an inevitable rise in electricity use and in the dispersion of electricity sources as we move away from fixed nodes to more dispersed forms of power generation. He is right to draw attention to the important role that Ofgem and the regulators, working in close partnership with the grid operators, will need to play to ensure that there is sufficient capacity, and I reassure him that we are doing exactly that. The Energy White Paper gave a commitment that the Government would consult on a strategic policy statement for Ofgem during the course of 2021, so we will absolutely ensure that it is up to the job—fit, battle-ready and taking part in important debates, negotiations and strategies to ensure that there is sufficient electricity capacity to meet the demand that he refers to.

[Baroness Bennett of Manor Castle (GP) [V]]

My Lords, I associate the Green group with the accurate description by the noble Lord, Lord Grantchester, of the plan as scattergun, and with many of his other concerns. I am sure the Minister will recall that point 5 of the plan refers to green public transport, cycling and walking, but when I look at the progress Statement I can find no mention of cycling and walking—or indeed of public transport, although the Minister mentioned it in response to the noble Lord, Lord Grandchester.

The Statement and the Minister have said a great deal about electric cars. Given the recently published Heinrich Böll Foundation European Mobility Atlas noting that on average commuters in London spend twice as long in congestion as those in Paris, in order to be the world-leading and attractive destination for businesses that the Government so often stress they want us to be, should they not be paying far more attention to walking and cycling across the nation, with their many Covid efforts at reducing congestion, improving health, fitness and well-being and supporting small local businesses?

[Lord Callanan (Con)]

I am sorry that the noble Baroness does not give us credit for the considerable sums that we have spent on transport decarbonisation. I took some time to run through some of the figures in answer to the question from the noble Lord, Lord Grantchester. In March last year we published part 1 of the transport decarbonisation plan. We are working to ensure that part 2 is as ambitious as possible, and we intend to publish it shortly. We have been clear that our intention was to get the plan fully published by spring 2021, but of course we have been delayed by wider events. The noble Baroness is right to draw attention to the importance of cycling and walking. They will form a key part of the Department for Transport’s decarbonisation plans.

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

My Lords, given that energy is devolved in Northern Ireland, along, to a lesser extent, with the environment, can the Minister confirm how the Government’s levelling-up agenda will ensure that the devolved nations, including Northern Ireland, keep up with the decarbonisation agenda, including the provision of more electric vehicle charging points and other elements of infrastructure based on the hydrogen economy?

[Lord Callanan (Con)]

The noble Baroness is right to draw attention to the work of the devolved Administrations. I can tell her that we work very closely with the DAs, at both ministerial and official levels, when developing policies and measures to reduce emissions and in tracking progress against our respective targets. Regular engagement takes place through the bi-monthly net-zero ministerial group, which has been developed in the context of the review of inter- governmental relations, and the supporting director-level net-zero nations board, as well as money policy-specific fora and frequent ad hoc contacts. Separately from that, there is a DA ministerial group chaired by COP president Alok Sharma, and the offshore transmission network review looks at policy and regulatory changes across England, Scotland and Wales.

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

My Lords, I was surprised that there was no mention of SMRs or AMRs in the Statement. The original plan says that

“further investment in Small Modular Reactors and Advanced Modular Reactors”

will be made, and mentions sums of £125 million and £170 million respectively. Can the Minister update us on where we are on that regarding both the spend to date and whether the rather larger sums that were due to be brought in from the private sector have actually been forthcoming? Can he also confirm that phase 2 of the SMR proposals is still due by the end of 2021? If so, could he give us a bit more clarity about the dates?

[Lord Callanan (Con)]

The noble Lord is right to draw attention to the importance of nuclear generation in the mix of fuels that we will need to take forward. I am happy to provide an update for him. I am delighted to see that the noble Lord, Lord West, is fully in agreement with this.

The PM has confirmed the Government’s commitment to advancing large, small and advanced reactors as part of our 10-point plan for the green industrial revolution. We have announced £385 million in an advanced nuclear fund to invest further in the next generation of nuclear technology, subject of course to value for money and future spending rounds. The advanced nuclear fund announced as part of the 10-point plan includes funding of up to £215 million for small modular reactors and up to £170 million for advanced modular reactors. We are also investing up to an additional £40 million in developing the regulatory frameworks, including developing, funding and siting policies for small modular reactors, to which the noble Lord referred, and supporting UK supply chains in helping to bring these technologies to market.

The Energy White Paper confirmed that generic design assessment, the first stage of the UK’s nuclear regulatory process, will be opened up to SMR technologies this spring. We are pleased to confirm that the guidance for advanced nuclear technologies to enter GDA has been published on GOV.UK. GDA entry is an open and ongoing process, with a standing invitation for advanced nuclear companies to apply when they believe that they are ready to do so.

[Lord Mackenzie of Framwellgate (Non-Afl) [V]]

My Lords, the Minister will be pleased to hear that I support the 10-point plan, which rightly does not see the strategy as a burden but as a way of building back the economy better, in a way that supports green jobs and creates a healthier Britain for our children by improving the air we breathe. As my contribution to the green agenda—I declare an interest—I have taken the significant step of investing in an all-electric car. Does the Minister agree that one of the big deterrents to taking this important step is the insufficiency of rapid-charging stations throughout the UK? Can he give your Lordships’ House an update on their rollout, and whether planning permissions and the timescales for implementation are being met? As an afterthought, if we are phasing out new gas boilers by 2025, why are they still being fitted into new builds?

[Lord Callanan (Con)]

I congratulate the noble Lord on his purchase of an electric car. I know he is from the north-east, too; I will not ask him what model it is but I hope it is one of the ones made in our region. He is right to draw attention to the need for charging points to be sufficient and widely accessible. We continue to engage with stakeholders to understand what support will be needed to enable the transition and minimise the impacts on businesses, workers and consumers across the UK. Prior to the 10-point plan, the Government have already committed £1.5 billion to support the early market and remove barriers to zero-emission vehicle ownership. Alongside the new phase- out dates, we have pledged a further £2.8 billion for a package of measures to support industry and consumers in making the switch to cleaner vehicles. That includes £582 million in funding for ZEV grants and £1.3 billion of infra- structure investment to accelerate the rollout of charging points, to which he referred.

With regard to the noble Lord’s point about gas boilers, when implemented in 2025 the future home standards will ensure that all new-build homes are zero-carbon ready. While building regulations themselves do not mandate or ban the use of any specific technologies, we intend to set the performance standard at a level which means new homes will not be built with fossil-fuel heating. In line with that ambition, the energy White Paper committed to consulting on whether it is appropriate to end gas grid connections to new-build homes from 2025 in favour of clean heat alternatives. The heat in buildings strategy reiterates our intention to consult on this. We will provide more detail on it in due course.