Draft Greenhouse Gas Emissions Trading Scheme (Amendment) Order 2025

Nick Timothy Excerpts

Monday 27th January 2025 General Committees

[Nick Timothy (West Suffolk) (Con)]

It is a pleasure to serve under your chairship this evening, Mrs. Harris, and a pleasure to speak to the draft order on behalf of His Majesty’s Opposition.

We welcome the clarity provided by the draft order and will continue to scrutinise the details of the emissions trading scheme implementation under this Government. It will be important to observe how aligned we are with Europe on carbon pricing. Regardless of the many policy decisions we face in the years ahead, as a matter of principle we should always make sure that we are competitive and not naive in our carbon pricing, because the cost of energy affects our economy and people’s standard of living in fundamental ways. Without secure and affordable energy, industry cannot compete, jobs are lost, and living standards fall.

We have experienced unacceptable deindustrialisation in the years since 2008, and the trajectory of policy under this Government means that we will suffer a further loss of competitiveness in the years ahead, making the imbalances in our economy—sectoral and geographical—as well as a huge trade deficit and all the consequences of that, far worse. That is why I want to take this opportunity to ask the Minister about the assumption in the National Energy System Operator report that the carbon price will rise to £147 per tonne of carbon dioxide by 2030 to meet the Government’s clean power target. That is an incredible number, but the feasibility of the Government’s whole plan to decarbonise the grid by 2030 is entirely based on that number.

When asked about the £147 carbon price by my hon. Friend the Member for Bromsgrove during a recent Select Committee hearing, the Secretary of State said:

“I will not endorse these assumptions”.

Yet he also said:

“We work hand in glove with NESO, not just on modelling but on all of these questions”.

He insisted that the NESO report proves that his Department’s clean power plan can be delivered. The Government cannot have it both ways. Either Ministers must be honest and admit that the carbon price will increase to £147 per tonne of CO₂ because of Government policy, or confess that the 2030 target for clean power will never be reached and that the many claims they have made while citing the NESO report are utter nonsense.

Earlier today, representatives of Britain’s energy-intensive industries including steel, glass, ceramics, chemicals, paper and mineral products wrote a public letter to the Minister responsible for industry to express their frustration with being held back by

“high electricity costs, policy uncertainty and risk of carbon leakage”.

Energy-intensive industries know what that means for their survival, saying that they

“will not be able to bear these carbon costs”.

We should be clear about what the £147 figure would mean: the destruction of industry in this country and the death while such opportunities are in their infancy of British artificial intelligence. How many Members of the Committee have consulted the NESO report and its technical annexes? If they have not done so already, I strongly urge them to ask themselves whether they accept this projected carbon price figure and how business might respond to such a drastic increase. How many jobs will this cost? How much higher will bills go?

Let us be clear. Increasing the cost of carbon will be destructive for the economic wellbeing of the country. Ministers and supporters of the Government should be up front with the British people and with British industry about this fact. I implore members of the Committee, because they will be asked to keep voting for this mindless Milibandism, to read up and listen to industry and the technical experts—I do not mean Dale Vince—before lending their support and credibility to this destruction. If they go along with it, history will be most unkind to them.

We should remember that the Government were elected on a solemn manifesto promise that their policies would cut household energy bills by £300 per year by 2030. The Secretary of State and Ministers in the Department have studiously avoided repeating this promise time and again since July. The Government know that this promise was nonsense, and whatever his outward zeal, so does the Secretary of State, but he is too afraid to admit it.

Following the Government’s Budget spending spree, the Office for Budget Responsibility made it clear that environmental levies will have to increase to as much as almost £15 billion, thanks to the Secretary of State’s policies. That means households will each pay £120 more in environmental levies, and that is on top of all the hidden costs in the system—the subsidies, balancing costs, new interconnectors and massive upgrades to the grid and distribution networks that Ministers pretend do not exist while they tell the public that renewables are cheap.

The news gets worse for British business. The UK was once a net exporter of energy, with internationally competitive energy prices. This is no longer the case. We have been a net importer of energy since 2004, and our import dependency has increased from 13% in 2005 to 41% in 2023. Industrial energy prices have increased from 4.56p per kWh in 2005 to 25.46p per kWh in 2023. Industrial energy prices in the UK are now on average 50% higher than prices in in other advanced economies. Our industrial energy prices are four times higher than those in China and three times higher than those in America and Canada. They are also higher than prices in France, which has significant nuclear energy capacity. We are artificially driving up costs with a misguided drive to decarbonise before the technology is ready.

To be clear, I know that my party played a part in this, as my right hon. Friend the Leader of the Opposition has acknowledged, but we are looking at the evidence and being honest about the mistakes we made. The Government are denying the evidence and driving us faster and faster towards the abyss—

[The Chair]

Order. May I ask the hon. Member to keep to the subject at hand?

[Nick Timothy]

I certainly will, Mrs Harris, but this is relevant to the ETS, because there is nothing more important for the future of energy policy. Getting policy right means being straight about the trade-offs. The energy trilemma has not been resolved. We must choose how best to prioritise. We must do what other countries are doing and put cost and security ahead of decarbonisation.