Climate Change Committee Progress Report 2021

Tony Lloyd Excerpts

Thursday 21st October 2021 Westminster Hall

[Tony Lloyd (Rochdale) (Lab)]

It is a pleasure, as ever, to serve with you as Chair, Sir Christopher. I thank the hon. Member for South Cambridgeshire (Anthony Browne). In fairness, he tried to deliver a balanced approach and has succeeded, to a degree. I hope the Minister will take those rather sharp raps on the knuckles seriously—they are all the more important when they are from friendly fire. As the hon. Member points out, we have some real issues to face.

I was interested in the hon. Member’s views on the benefits of the 1926 general strike. I grew up in a household where we always applauded the 1926 general strike and it is good to know that he is now a convert to that view of the world. The only doubt I have is that there was something slightly Pollyanna-ish, for those who are old enough to remember Pollyanna. The world is not quite as good as it might seem. Certainly, our world—the world of which we have control—has some long way to go. Yes, we have a good record on the reduction of carbon dioxide and so on, but it is not an excellent record. Some of it, frankly, is because we saw some types of de-industrialisation during that time period, which has allowed us to transfer the production of offending CO₂ to other countries, from which we now import. That is not necessarily a criticism per se, but it is something that we have to take into consideration.

The Climate Change Committee’s report is tremendously important. It has established a baseline against which we need to measure ourselves. The overall message is that whether or not we have great plans, they are not being delivered. As my hon. Friend the Member for Leeds North West (Alex Sobel) said to me a few moments ago, it may be an A for effort, but it is a D for delivery. I hope that the Minister will tell us seriously what we intend to do about that. We should look at the commentary and criticism in that report, such as the legitimate point that although we have done well on decarbonising electricity supply, we have a long way to go on agriculture, parts of industry, buildings and, of course, transport.

Hon. Members have complained that we have two debates on this subject today—one in the Chamber and one in Westminster Hall—rather like two buses coming along at once. I can guarantee that those would not be electric buses, because we are not yet there in terms of transport. There has been radical change, but even where I live, in the middle of the very busy, relatively modern city of Manchester, it is still difficult to find the electric charging points that would allow someone to make the transfer from conventional or even hybrid vehicles to an electric vehicle at this stage. There is a long way to go to make sure that the investment is there and to guarantee that the changes recommended by the Climate Change Committee are delivered and not simply planned.

Looking at other areas, I have long been preoccupied by the question of what we should do with our buildings, both domestic and industrial. We have something like 30 million homes across the United Kingdom, as a reference point—we can argue about that number, but it is not a million miles out. The overwhelming majority of those buildings—more than 80%—will still be around in 2050. That is around 25 million old properties that we have to bring up to a modern standard. That is fraught with difficulty at the moment because we do not have the delivery mechanisms to make it happen. I am sure that other colleagues will talk about the ambition around heat pumps; I would simply say that it really matters that there is ambition, and that the capacity to deliver heat pumps goes way beyond what we saw in this week’s announcement. We have to see a radical, seismic change in terms of delivery.

Although even the very basic changes we need for our homes—such as cavity wall insulation and the capacity to properly insulate our roofs—are not difficult, they are difficult for an 80-year-old pensioner living on his or her own. I have experience of that in the past, when we have had improvement systems of different kinds and we are faced with the possibility of licensing cowboy builders to do work that rips off the public and does not deliver the social good that we all want. We need skills training that simply is not there at the moment, even for those relatively straightforward tasks.

[Dr Poulter]

On home insulation measures, does the hon. Gentleman agree that there is a particular challenge in the private rented sector with poor home insulation and, indeed, poor maintenance of those buildings, which often affects people on lower incomes? Does he agree that the Government need to do more to address that issue and to force, coerce and compel landlords to improve home energy efficiency in that sector?

[Tony Lloyd]

I am genuinely grateful to the hon. Gentleman, because I was going to come to that point. He is right. Of course, as a homeowner, I have an incentive to make improvements in my own home; I get the benefit of the more comfortable home and the lower fuel costs. However, a private landlord has no such incentive and a private tenant has no such ability to bring about those changes. The hon. Gentleman makes a very real point, particularly because we have an increasing number of private lets. As someone who, by force of occupation, has needed to rent privately in London, I have lived in places that I wish the landlord had had an incentive to improve, because very little effort was put in. It is a serious and important point, which I hope the Minister will pick up on.

The point I am making about buildings is that we lack the skills, and we are not delivering the training packages to introduce those skills. We also lack the confidence of the would-be consumer—whether a private landlord, an owner-occupier or whatever—to know that what is on the market is valid and can be trusted. If I were to ask Conservative MPs, even the esteemed former journalist, the hon. Member for South Cambridgeshire, which heat pump they would recommend for my home—

[Anthony Browne]

indicated dissent.

[Tony Lloyd]

The hon. Gentleman has the good grace to admit that, like me, he has not got a clue. However, we need to have an educated consumer and we need to change the way people see this matter. These issues are not trivial if we are to make a real difference.

Similarly, in the industrial sectors, some of the same kinds of issues arise. Asking huge organisations around the world, such as Amazon or Manchester United football club, that have the intellectual and surplus capacity to decarbonise is one thing, but for a small firm, which focuses just on its core business, being informed about how they can and ought to make a difference is much more difficult unless we begin to look seriously at the issue of consumer education.

The hon. Member for South Cambridgeshire mentioned the need to change our diets, and possibly our attitudes to air travel. We have to take the country with us, and frankly we are not yet in a position to do so. This week there was a statement about the Government’s net zero ambitions, but the media did not seem to pick up that issue and say, “This is the one we have got to go with.” Education and taking the public with us was mentioned in the report, but we are still in the foothills of such a debate.

[Alan Brown]

I agree with the points that the hon. Gentleman is making about consumer education and the fact that more information should be available. In Scotland, the Scottish Government fund Home Energy Scotland, which is an independent, impartial body to give advice to people. Does he agree that the UK Government should consider that as a recommendation, so that consumers in England and Wales can access that impartial, independent advice?

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[Tony Lloyd]

That is another important point. I think the Minister will accept my saying: I have been a Minister; never trust a Minister—partly because one day they will not be, and it will be someone else in the seat. Government should set the standards, but the delivery of that sort of information must be seen to be independent and to have sound validity for those involved.

When we look at delivery, one thing that is often missing from the conversation is the fact that central Government cannot deliver on many of these things. Central Government has to work through other agencies. That can be the private sector, but we need the strategic planning to take place at local, and sometimes sub-local, level. If we are going to not simply change attitudes but introduce the necessary infrastructure—the infrastructure of skilled training for the capacity to make the changes that we need—we must deliver locally. That does mean a much stronger partnership. Again, that is a recommendation in the report between central Government and local government. I say to the Minister that if that partnership does not include the proper transfer of funding so that local government can do this job, then we will be gifting the ambition but not delivering the tools with which to achieve it.

This is a very important report. Once again I congratulate the hon. Member for South Cambridgeshire. He is trying to deliver a balanced judgment. He is probably a little more optimistic than I, but he did emphasise that the crisis is not looming; it is with us. This is a call now to move beyond planning. Words can be good in setting ambition, but it has got to be now about serious delivery on the ground. We have had so many wake-up calls. This call says, “Now is the time for action.”

[Sir Christopher Chope (in the Chair)]

This is a very interesting debate. There is a parallel debate taking place in the main Chamber, where there is a three-minute time limit on speeches, I suspect. Before calling the last Back-Bench speaker in this debate, if anybody in the main Chamber is following what is going on in Westminster Hall, I am happy to accept additional Back-Bench speeches if Members show up, notwithstanding the fact that they were not here at the beginning for the initial remarks.

[Kerry McCarthy (Bristol East) (Lab)]

It is a pleasure to see you in the chair, Sir Christopher. I think we may have another Back-Bench speaker whose name somehow did not make it on to the list. My hon. Friend the Member for Rochdale (Tony Lloyd) stole my gag about climate debates being like buses—two turn up at once but they are not electric buses.

I was one of the MPs who went outside yesterday to see the people who are pressing for more zero-emission buses. They had buses there from Ballymena, Falkirk, and Selby near Leeds to highlight the fact that, while the Government have pledged 4,000 zero-emission buses, only a small handful have appeared on the roads. Although the Transport Secretary responded to questions from one of my colleagues in the shadow Transport team to say that 900 were in production, we have pressed him on that since, asking where they are in production and when they are appearing, and he seems to have gone very quiet.

I congratulate the hon. Member for South Cambridgeshire (Anthony Browne) on securing the debate, and I congratulate him on his optimism. We do need optimism when it comes to the fight against climate change. It can seem like a pessimistic environment. The zero-emission buses are an example of where the Government’s actions do not match their announcements. Unless we see an acceleration of action, not just warm words, we shall be nowhere near meeting the targets, which are good and ambitious. They set an example to the rest of the world, but if we cannot go to COP and demonstrate the real things that are happening on the ground, it all becomes greenwash, to put it mildly.

The Committee on Climate Change report is huge, but one recommendation goes to the heart of everything. There is a recommendation for No. 10 and the Cabinet Office that says:

“Ensure all departmental policy decisions…are consistent with the Net Zero goal and reflect the latest understanding of climate risks.”

That is where we need to be. Everything the Government do should be through the prism of trying to achieve net zero. We have the announcement of new fossil fuel projects—the Cambo oilfield and the Cumbrian coal mine. Lord Deben, chair of the Committee on Climate Change, has written to the Government to say that it is simply incompatible with our stated ambitions to allow those new fossil fuel projects to go ahead. Compare what is happening with airport expansion with the recommendations of the Committee that there should be no net airport expansion. The word “net” is important. Although it does not work in the current context, where Heathrow and everywhere else is pressing for expansion, there is an argument that, if capacity declined at Heathrow, regional airports such as Bristol would be able to expand, creating regional jobs and economic growth as part of that net calculation.

Take the Transport Secretary and the road-building programme, in which billions of pounds are going towards the construction of new roads. He was advised by his civil servants that that needed to be subject to an environmental impact assessment to see whether it was compatible with the Government meeting their climate change ambitions, and he refused to do so. I know that the Minister answering today is not from the Department for Transport, but that is another example of the actions of the Government just not squaring up with this recommendation in the Committee on Climate Change’s report.

The Australian trade agreement is another example. How can we claim to be serious about climate change and protecting the environment when we are more than willing to trade away environmental protections as part of a trade agreement? When the Minister was in his previous post, I asked him about potential trade agreements with Brazil and the relationship with that country in general. On one of his overseas jaunts, the Prime Minister congratulated President Bolsonaro on being an environmental champion. This guy is almost single-handedly destroying the Amazon by allowing huge numbers of people to be displaced from their land, and allowing swathes of forest to be burned and used for cattle ranching or the growing of various commodities—soya for livestock feed, palm oil, and so on.

It was sad how little attention was paid to that issue when we debated the Lords amendments to the Environment Bill yesterday. On the one hand, we have a Government who like to boast about how many more trees they are going to plant—at the last election, every party was trying to outbid the others as to how many millions of trees they would be able to plant—but that means absolutely nothing in terms of the net number of trees across the planet if we are allowing Bolsonaro to burn the Amazon to the ground.

One of the Minister’s colleagues in the Trade team once answered a question that I asked them about this issue by pointing to the UK Government’s giving money to Brazil for certain forest protection programmes, conserving parts of the rainforest or even planting new trees there, but if we look at how those numbers stack up against the proportion that is being destroyed, they are nowhere close. It is a token effort; it is well-meaning, but unless we do something through pressure in trade negotiations and at COP to stop Bolsonaro and others in their tracks, we will be destroying a huge carbon sink. We are now in a position where the Amazon is a net emitter of carbon: we used to talk about the Amazon as being the lungs of the world, but that is no longer the case, and that is something that the UK Government could do something about.

We now have the 1.5° target that we agreed at Paris, so COP should be about how we go about achieving that target, and we do need a lot of countries to set more ambitious nationally determined contributions. We are very concerned that China and now Russia will not be sending their leaders, so can the Minister advise us on what impact he thinks that will have on the negotiations? Will Brazil come to the table, and what pressure will it be put under at COP? Finance is incredibly important—trying to secure that $100 billion a year—but as chair of the all-party parliamentary group on small island developing states, I would make the point that whenever I talk to those states, they say that this is not just about how much money is committed, but how they can access it. These are tiny countries with very small levels of resources.

[Tony Lloyd]

My hon. Friend is making an excellent speech. This is not just about money, but about the transfer of technologies. One of the things we saw during the covid crisis was that we were unfortunately quite reluctant to transfer technology, even in our self-interest. We have to allow the small countries that she has described to have access to the technology, as well as the finance, that makes the difference.

[Kerry McCarthy]

My hon. Friend is entirely right. In some cases, the populations of those countries are smaller than the population of our constituencies, so it would not be a huge effort on the part of the UK Government to prioritise them and help them make the transition to renewable energy. In some cases, it involves getting out of very difficult contracts, sometimes with companies that are based in the developing world and are tied into electricity supplies based on fossil fuels. There is a lot that we could do to help them. The main plea is that we have to simplify the process. We all know of small organisations in our constituencies trying to apply for, say, lottery funding, or bidding for other funds. They face a similar situation; the paperwork and bureaucracy are immense.

I was concerned to read today in The Guardian that a third of Pacific islands have said that they are unable to attend COP, partly because of covid. That goes back to the size issue. The people who would be coming over from those islands cannot afford to take a fortnight off work to quarantine at the end of the conference. When I asked the COP26 President, the right hon. Member for Reading West (Alok Sharma), about that, he told me two things: that the UK would ensure that all people from small and developing states could be vaccinated, and that there would be funds available to bring them over. The reason that delegates at Paris moved from 2° to 1.5° was partly because of the personal testimony and presence of the Pacific leaders in particular, and leaders of small island developing states in general. That really made the change. Their presence and their voices at Paris shamed the world and highlighted the fact that in some cases those countries will literally disappear underwater if we do not keep 1.5 alive.

I would be interested to hear the Minister’s views on another of the recommendations in the committee’s report. It came up briefly at International Trade questions today, but the Minister did not have much time to outline the Government’s position. The report lists as a priority recommendation that the Government should

“Develop the option of applying either border carbon tariffs or minimum standards to imports of selected embedded-emission-intense industrial and agricultural products and fuels.”

Hon. Members can see why I had to write that down; it is quite a long phrase. As I understand it, we need to measure the embedded carbon in the products that we are importing into the country and find a way of dealing with it, and border tariffs may be one way of doing that. The report recommends that that should be discussed at the G7 and at COP, which is why I wanted to flag it up today. We should have those discussions.

I am aware that I have been speaking for quite some time, although I am also aware that, given that this is a three-hour debate, I could probably go on a lot longer. I am sure that people do not want to be detained, so I will just mention one more thing. It was reported this week that a nudge unit report on behaviour change, which recommended reductions in meat eating and measures to curb aviation demand, was buried. Can the Minister explain why that report has not been published and is not being discussed? We can talk forever about technological change, what the Government need to do and what needs to be financed, but behavioural change is a significant part of how we will meet our climate objectives.

In previous conversations, Ministers have suggested to me that they are quite reluctant to intervene in issues around the food agenda, plastic use and anything involving an element of personal choice. Ministers from the Department for Environment, Food and Rural Affairs said to me that individuals could choose to bring their keep cup with them—like I have done today—so that they do not use single-use plastic, or that they could choose to eat less meat, but that this is very much a matter of personal choice: the market will respond if the public want it.

Particularly with meat eating, the market has responded, but some Ministers, from an ideological point of view, do not see a role for the Government in nudging it along. There is a real debate about whether it is acceptable to nudge things along rather than wielding the stick to make people do things. That is the crux of the issue of whether we act upon the Climate Change Committee’s recommendations. For example, they recommended a

“20% shift away from all meat by 2030”.

That is pretty unambitious, but there is an ideological debate about whether the Government’s role is to encourage people to make the shift or to make them make the shift—using all the levers, whether they be carrots or sticks.

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[Alan Brown (Kilmarnock and Loudoun) (SNP)]

It is a pleasure to serve under your chairmanship, Sir Christopher. I congratulate the hon. Member for South Cambridgeshire (Anthony Browne) on bringing forward the debate. I was trying to make the point earlier that when he secured a debate on carbon capture and storage the Government, in a remarkable coincidence, decided what carbon clusters were going to go forward. He has secured this debate and the Government have printed their response to the Climate Change Committee’s progress report and produced strategies. He must be feeling very productive. I wonder what is on the go for next week.

As others have said, the hon. Member for South Cambridgeshire made a thoughtful and balanced speech. There was a lot to be agreed on. He could have been a bit harder on the Government, but he did acknowledge that there is more work to be done from the Government and, critically, that we are not on track to meet the fifth carbon budget, let alone the final net zero target of 2050.

I disagree profoundly with a small part of the hon. Gentleman’s speech, about nuclear energy. He said that nuclear energy is safe and clean. The existing nuclear waste legacy is going to cost £132 billion to clean up and dispose of. We still do not have a means of disposing of nuclear waste other than burying it for a thousand years. I take umbrage at that. The Government need to think again about nuclear energy.

The hon. Member for Rochdale (Tony Lloyd) made a thoughtful contribution. He made an important point about housing and private landlords. He spoke about the need to involve local government, which is obviously a big theme for the hon. Member for Leeds North West (Alex Sobel), who I congratulate on rising to the challenge of making this debate last longer. He did really well.

There was a thoughtful contribution from the hon. Member for Bristol East (Kerry McCarthy), who mentioned the key Climate Change Committee recommendation that all decisions have to be looked at through the net zero prism and to be compliant with net zero. She correctly highlighted the £27 billion roads programme and the decision on Cambo, which needs to be looked at, and other matters. I would be interested to hear the Minister’s response to that.

The hon. Member for South Cambridgeshire was more optimistic than the speakers on this side of the Chamber, which is understandable. He is certainly more optimistic than I am. That said, we must acknowledge the progress that has been made, which he rightly pointed out, such as the 40% decrease in emissions by 2019 from the 1990 baseline—the biggest emission reductions in the G20. We welcome that; it is a fantastic start.

The reality is that, despite the publication of the heat and buildings strategy this week and the net zero strategy, there are still huge policy gaps that mean that we will not achieve the intended target of 68% reduction in emissions by 2030. The Government need to address this quickly, but we are still waiting for the Treasury’s net zero spending review. We know that the Treasury is, unfortunately, where the power lies, and it is the Treasury that will dictate how quickly the policies can be implemented. There is no clear plan on how to pay for the decarbonisation of our heating system. The UK Government have acknowledged that continually adding levies to our electricity bill is unsustainable, given that nearly a quarter of our bill is already made up of levies; and they still do not have a plan in place on how to fund the decarbonisation of our 24 million or so homes that are connected to the gas grid. There is no coherent plan for increasing the number of heat pump installations from 30,000 per year now to the stated target of 600,000 per year by 2028. The Climate Change Committee is clear about the extent of electric heating that is required, but at the moment the Government do not have the plans to match that ambition, and if they fall short there they will fall short of the 2030 nationally determined target.

The UK Government and the Minister seem to be putting all their faith in an announcement by Octopus Energy that it can make air-source heat pumps for the equivalent of the price of a gas boiler by April 2022. I really hope that Octopus Energy is successful, as it would be fantastic for industry and for enabling us to move forward much more quickly in decarbonising our homes, but a quick look on the internet today shows that a decent gas boiler can be purchased for £1,000, while air-source heat pumps are still in the order of £6,000 to £10,000. It is clear that the prices are not going to come down that quickly by next year. Air-source heat pumps are not a new technology. Other countries install many more heat pumps than we do in the UK, so there is no way that we could get such an exponential price drop, unfortunately.

The Government have tried to tackle the price differential with the announcement of a £5,000 grant. I suppose that is a start for the market and helps to close the gap slightly, but I am not sure that the Government or Ministers actually understand the amount of work required to install an air-source heat pump and the total cost. For a start, the home needs to be made energy efficient. That is good, but it adds cost and disruption. Generally, a new hot water tank will need to be installed in the property, which also adds further cost and disruption by requiring additional plumbing and possibly joinery work—adapting a cupboard or creating a space for the hot water tank. Radiators and pipework might need upgrading, the existing boiler will need to be decommissioned—needing further gas engineer and plumbing work—and redecorating might be needed after the boiler is taken out. Considering all that work, that £5,000 grant does not get anywhere close to closing the gap between replacing a gas boiler and the total amount of work needed to install an air-source heat pump. The Minister will need to review that and his Department’s strategy, or there is no way that they will meet that target of 600,000 installs per year by 2028.

The Government also need to understand, in general, how people replace their gas boilers. It is called a distress purchase because usually it is made when the boiler reaches the end of its life. If my gas boiler breaks down this winter, I might make inquiries about replacing it with an air-source heat pump, but if I find out that the pump and all the install has a two to three month lead-in time, I am not waiting the rest of the winter to get an air-source heat pump. I am going to buy a new gas boiler and pledge to myself that, some time in the future, I will get that energy-efficient air-source heat pump. That is the reality. As the hon. Member for Leeds North West said, we have a skills gap and a shortage of people with the knowledge and availability to do these types of installs. If that is not tackled by Government and planned for in policy, everything will fall short.

On heating in general, and decarbonisation, the UK Government remain open to the use of hydrogen. That is fine if they think it is a large-scale option that could progress, but if we are keeping hydrogen as an option and still want to progress ventilation air-source heat pumps, I suggest that the right place for them to start is with off-gas-grid homes. They should have a coherent programme that matches energy-efficient installation and air-source heat pumps in off-gas-grid homes, where people are more likely to be fuel-poor. That would scale up industry, reduce emissions, and help to tackle fuel poverty. That is where I would ask the Government to start.

The new heating grant announced by the Minister yesterday replaces the UK-wide renewable heat incentive scheme, but he has confirmed that the £5,000 grant is only for people in England and Wales, so Scotland has been completely excluded. Could the Minister explain why Scotland is excluded, and whether the Scottish Government will get Barnett consequentials so they can implement their own scheme? It seems ironic that page 27 of the heating building strategy states that

“Decarbonising our heat and buildings is a joint endeavour across the United Kingdom”,

because that is clearly not the case. What discussions did the Minister have with the Scottish Government before announcing the £5,000 grant scheme to replace the RHI?

On one last aspect of heating, the UK Government have clearly failed to meet the recommendation of providing a

“long-term policy framework to support sustained energy efficiency and heat pump growth at…scale.”

They have ignored the recommendation about bringing forward the target date for all homes to be EPC band C-compliant by 2028, and are instead sticking with the 2035 date. They have not set a date for mandatory hydrogen-ready boilers, and they need to make energy efficiency a national infrastructure programme, in the way that the Scottish Government have. As another hon. Member said, 2035 is far too late for the phase-out of new gas boilers. That date needs to really to be brought forward.

Excluding Scotland seems to be the theme of the week for the UK Government. I need to say again that the decision to not include the Scottish cluster as a track 1 CCS project is disgraceful. It has been classed as a snub in the north-east of Scotland, and has in turn been widely reported in the press. It is not just Scottish National party politicians saying that; that is the feeling. It is a real snub to Scotland, and I urge the Minister to think again about that decision. He has still not been able to explain why the Scottish cluster has been tagged as a reserve, or even why he thinks he needs a reserve. Is it because he is not sure about the deliverability of the two clusters that the Government propose to take forward? It seems illogical, but hopefully we will get a bit more information about that.

On carbon capture and storage, although the Government have announced that they hope to progress to clusters, they have yet to agree a pricing model for the storage of carbon dioxide. We need to get that in place if we are going to progress carbon capture and storage, which the Committee on Climate Change has said is really important.

[Tony Lloyd]

An important point in the debate about carbon capture is a recognition that yes, planting trees is excellent, and the Government’s ambitions will be really important if they are delivered, but we in England are destroying our peat bogs, which are a bigger carbon sink than the trees we will plant, and as we destroy those bogs, they become a source of carbon emissions. I congratulate the hon. Member, because Scotland is way ahead of England in restoring its peat bogs. It is a really important issue, and I congratulate Scotland on the approach it has taken. I hope the Minister will take it up with his colleagues in other Departments.

[Alan Brown]

I thank the hon. Gentleman for that intervention, and clearly I agree with him. It is great that he has recognised the work that is going on to restore peat bogs in Scotland. As he said, the UK Government’s tree-planting target is welcome, but I am sceptical that they have a plan in place to meet that target. They have never met any target for tree planting to date, so the idea that they can scale up massively in a couple of years is beyond belief. I was going to mention tree planting in Scotland later on, but in 2019, 85% of trees planted in the UK were planted in Scotland via the Scottish Government’s scheme. The Scottish Government have aggressively pursued tree planting—they have led the way on it—while the UK Government have not yet put plans in place to meet their ambitions.

There are too many policy gaps to mention, even though we have a lot more time today than we expected. We need to see an impact from the net zero aviation strategy, for example. I am not convinced by the plans that are in place. As the hon. Member for Leeds North West said, there is a transport decarbonisation plan in place, but when it comes to hydrogen and conversion of HGVs, we have heard the hon. Member for Bristol East say that not enough zero-emission buses are being produced. We really need to move quickly on these matters.

The hon. Member for South Cambridgeshire complimented the work that is being done on decarbonising the electricity system. That work is truly welcome, but there is still not a proper plan for ending unabated gas-fired electricity generation by 2035, nor a proper structured plan for the decarbonisation of the electricity grid to meet the 2035 target set by the Government. If they are going to meet the target of a net zero electricity grid by 2030, there are some things that I suggest the Minister needs to be cognisant of. The Government need to review the grid charging system, which will end the farce of Scotland having the highest grid charges in Europe. That system disincentivises the construction of renewable energy production in Scotland—puts it at a disadvantage compared with projects in England—but it does not help the UK to meet its net zero target, either. We need to make net zero a statutory consideration for Ofgem, and the Government need to review the capacity market to address its reliance on fossil fuels, and allow storage that is co-located with renewable energy to be able to bid into the capacity market. Bizarrely, that is blocked at the moment.

As I touched on earlier, the Government need to end their nuclear obsession. Instead of spending another £20 billion on a new station at Sizewell, not to mention the billions they want to invest in small modular reactors and the mythical advanced nuclear reactors, they should be investing that money in renewable energy—in green hydrogen production and storage. The UK has now fallen behind France, the Netherlands and Germany in terms of hydrogen production proposals, so an urgent rethink of policy development is required. The 5 GW hydrogen target is not ambitious enough. The Scottish Government have a 5 GW hydrogen production target, so surely the UK Government need to up their game.

The UK Government should be investing in pumped storage hydropower—a proven technology that allows dispatchable energy to be added to the grid when the wind is not blowing and the sun is not shining. This is something that can progress quickly. SSE is ready to progress with the Coire Glas scheme, and Drax is advancing plans to double output from the existing Cruachan dam pumped storage hydro plant. What is needed is a pricing mechanism to be agreed with the Government, like a carbon floor mechanism. I raised this with the previous Minister. Will the current Minister look at a pricing mechanism to allow pumped storage hydro to progress? It is a good use of renewable energy.

Wave and tidal turbine power—technology Scotland literally leads the world in— needs help to get to the next phase of scaling up. The industry requested a ringfenced sum of money in part 2 of the contracts for difference—round 4 is coming up shortly. Ringfencing money in part 2 has been done for floating offshore wind; all that the wave and tidal industry are asking for is the same ringfencing to allow them to compete and get a slice of the pie. It is believed that the Treasury blocked this ringfencing, which is ridiculous, considering that it would not have cost the Government any money. There is a risk that this technology will lose out and move abroad, and as happened with onshore wind, we will lose the opportunity to have the manufacturing set up in the UK and lose the export opportunities and growth that comes with that. Hopefully the Minister will listen the arguments. I would be more than happy to meet and discuss it, and he would be very welcome to meet industry representatives. Small changes could be made that will not cost the Government money, but could generate fantastic growth opportunities.

In Scotland’s commitments to the Paris climate change targets and net zero, we are genuinely leading the way. We were the first Government to set a net zero target with a date of 2045, the first to declare a climate emergency, and we have set up the Just Transition commission. Admittedly, we also did not meet our emissions target of a 55% reduction by 2020, a 51.5% reduction is still fantastic progress. In Europe, Scotland is second only to Sweden in terms of the scale of reduction achieved. Interestingly, one of the reasons Scotland missed its latest target is that the process under way of rewetting peatlands necessitates the removal of some trees. As the hon. Member for Rochdale (Tony Lloyd) pointed out, Scotland is doing fantastically with peat bog and wetland restoration, as well as having a fantastic tree-planting operation.

When it comes to energy production, Scotland has led the way in decarbonisation; last year, 97% of equivalent electricity demand was produced by renewable energy—this is absolutely tremendous. We have ambitious plans and we are making them happen; they cannot nor should not be blocked by decisions made in Westminster. I appreciate the UK Government does have ambitious targets, but as the report from the CCC shows, more policy and further intervention from Government are required—and they are required sooner rather than later.

--- Later in debate ---

[Greg Hands]

I will not go further down the road of making price or market predictions. What the Government need to be in the business of doing is kick-starting the market, stimulating the market, and getting it going. I do not think it is in my interest to set out predictions of what I think supply, demand or pricing might be in a year’s time.

[Tony Lloyd]

I am genuinely grateful to the Minister for giving way. By the way, I was first elected in 1983 on what was euphemistically called “the longest suicide note in history”, so there are many examples that we can quote.

On the issue of heat pumps, I would put it to the Minister that to give the public confidence in the installation of heat pumps, they first need to know the technical specifications, that they are sound and that there are qualified installers. That means training, which we have discussed already today, but it also means something else. Heat pumps do not work very well unless we have well insulated properties. A combination of things are required in order to make that real difference. I hope that the Minister will address not the ’83 question, but the question of how we deliver heat pumps that work.

[Greg Hands]

The hon. Gentleman makes a very good point. I will come on to the point about installation. He also makes a very good point about insulation and the importance of well insulated homes, which I think nobody denies. But let me just return to the points that he made in his speech.

Local government and local delivery are incredibly important. It is very important that local leadership is seen on climate change. I see it from Mayors such as Andy Street and Ben Houchen and also some Labour Mayors. I think Andy Burnham, the hon. Gentleman’s local Mayor, has been quite good in this space as well. It is important that we all see climate change and taking action on climate change as a cross-party issue involving all the tiers of government and all the available parts of government across the whole United Kingdom.

On energy usage, the hon. Member for Rochdale asked what more the Government can do to address consumption and reduce emissions. The heat and buildings strategy addresses consumption in homes. For example, we provide increased support for low-income households through the home upgrade grant. We are committed to upgrading fuel-poor homes to energy performance certificate band C by 2030 where reasonably practicable. And there is our social housing decarbonisation fund, with £800 million provided. I think that the hon. Gentleman also asked about hydrogen investment. The net zero strategy confirms the industrial decarbonisation and hydrogen revenue support scheme, supporting blue and green H₂ production. It could lead to 1.5 GW of new capacity.

The hon. Member for Bristol East (Kerry McCarthy) asked about quite a number of things, some of which are familiar themes. I just remind her that Cambo has already been licensed as a field, in 2001 and 2004.

I could fill the remaining time on airport expansion. Mrs Murray, you will remember that I resigned from the Government in 2018 over airport expansion at Heathrow. I note that, since I resigned, that airport expansion has not happened and I am not seeing any sign of it happening anytime soon.

The hon. Lady asked about trade agreements.