Oral Answers to Questions

Matthew Pennycook Excerpts

Tuesday 1st December 2020 Commons Chamber

[Matthew Pennycook (Greenwich and Woolwich) (Lab)]

What fiscal steps he is taking to help achieve a net zero carbon economy.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

What steps he is taking to ensure that his fiscal policy incentivises environmentally positive behaviour.

[The Exchequer Secretary to the Treasury (Kemi Badenoch)]

The Chancellor’s announcement at the spending review will help us meet our net zero 2050 target by providing the right incentives for individuals and businesses. The spending review commits £12 billion of public investment, kick-starting our transition to net zero and boosting the UK’s global leadership on green infrastructure and technologies ahead of COP26 next year. It also included funding that will encourage protection of the natural environment, including for planting trees, restoring peatland, creating natural habitats and investing in national parks.

[Matthew Pennycook]

A robust carbon price is essential to achieving a net zero carbon economy, yet despite the transition period ending in just 30 days’ time, companies still have no precise idea what will replace the EU emissions trading system, which the UK will cease to participate in at that point. The House has already passed the legislation required to establish a stand-alone UK ETS, but there is no sign of the order necessary to fully implement a UK-wide carbon tax. With just 12 sitting days remaining, can the Minister confirm that the Government have determined that a stand-alone UK ETS is the fall-back option for 1 January and that the Treasury has abandoned a carbon emissions tax?

[Kemi Badenoch]

The hon. Gentleman will know that this has been the subject of negotiations, which are still ongoing. We legislated for a UK-linked ETS as well as a carbon emissions tax, and we will be announcing shortly which of those options we will be taking. We know that a UK-linked ETS is the preferred option at the moment, and that is the one that we are currently hoping we will be able to negotiate for during this period.