That this House has considered Government policy on reaching Net Zero by 2050.
It is always good to see you in the Chair, Sir Christopher. This is the second time in about seven years that I have been able to introduce a Back-Bench debate, so I am very grateful for the opportunity.
I am pleased to be able to say that the net zero agenda—the energy transition—enjoys wider support across the House than practically any other area of policy. Yes, there are sceptics on both sides of the House, but it is extraordinary how widely shared the ambitions for net zero and decarbonisation are. I am grateful to organisations in my constituency and to my constituents. I thank Talking Tree, whose climate emergency centre has promoted decarbonisation in my constituency, and my constituent Hettie Quirke, who has raised these issues with me in constituency surgeries and provided me with my inspiration, or certainly my motivation, for requesting the debate.
This is a matter of great interest to me personally. I was fortunate to be appointed Energy Minister, the post that my right hon. Friend the Minister now ably fills, in July 2019, only a few weeks after we as a Government had passed the net zero Bill and enshrined the 2050 net zero target in law. That target was not simply plucked out of thin air. It is based on a scientific assessment of what we need to do as a global community to keep average temperature increases on this planet below 1.5° compared with 1990.
Does the right hon. Gentleman recognise that at the time when the net zero by 2050 target was agreed, so was the principle of common but differentiated responsibilities? That means that countries such as the UK that can go further and faster must do that, so we should be looking at something much closer to real zero as soon as possible after 2030, not net zero by 2050.
As the hon. Lady well knows, she and I have very different views on this. I think that the Government have to carry the population with them, and it was interesting to hear what the unions were saying about oil and gas earlier this week. I would like to be able to press a button and say that we can get to absolute zero by 2030, but I do not think that is possible given the technological constraints and the financial and fiscal pressures. I do not think it is attainable, which is why I am happy to push the target of net zero by 2050.
I want to talk about our ability to reach that target. The hon. Lady is right that we could and should always try to do more, but we are constrained not only by technology but by fiscal necessities and, I might add, by what is going on in the rest of the world. The UK represents only 1% of global GDP, but we are an example and a leader, and we have to be able persuade partners across the G7 and the G20 and particularly in the developing world. As she will appreciate, that is not always easy.
First, I commend the right hon. Gentleman for raising an important subject that we will all have to acknowledge and be involved with. It is clear that to achieve this ambitious goal, we will need more dedicated funding—I hate to say that, but it is the truth. The establishment of the net zero innovation portfolio is a good indication of the Government’s priority, but does he agree that enhanced funding must follow, and must be distributed to all regions, including to Northern Ireland, Scotland and Wales through Barnett consequentials?
I commend the hon. Gentleman for making that point, because he knows better than anybody how important Northern Ireland is to the transition. There are some great hydrogen businesses there, in particular. As Secretary of State for Business, Energy and Industrial Strategy I was privileged to visit Queen’s University Belfast, a world-leading academic institution in its focus on new technologies—not only energy technologies but cyber-security technologies and others. I am pleased that he has contributed so ably to this debate, as he always does.
I want to set out a few areas in which we have had successes, and then point out others where we have perhaps found the terrain heavier going and where there have been greater challenges. As I look at British energy policy, I see that some things are going very well and others could be improved.
First, as was mentioned in the previous debate, the biggest success in the net-zero space since I have been in the House has been power generation, including electricity and the grid. Even as late as 2012, 40% of electricity, such as the lights and everything we see around us, was derived essentially from burning coal, using a 19th century technology. Today, that figure is 1.5%. Across 11 years, we have essentially taken coal off the generating grid, which is a huge achievement. Many of us in this room will remember how important coal has been to the political and economic debate in this country. As we were growing up, there was never a day when we did not read about coal strikes, or industry-related issues around coal.
I am very grateful to the right hon. Member. On the point about comparing today with 2012, the UK’s draughty houses make up 14% of the UK’s carbon emissions. In 2012, we were insulating 2.3 million houses every year, whereas now we are insulating fewer than 100,000. Does the right hon. Member accept that the Government would have saved taxpayers millions of pounds on the energy price guarantee if they had only kept insulating homes at the rate they were in 2015?
Of course, that would have been at great cost, and it would have been brought forward. I do not know what the effect of Putin’s invasion of Ukraine or the sudden spike in gas prices at the end of 2021 would have been in that instance. The hon. Gentleman is right to notice that. If he permits me—I know Members are always enthusiastic to jump in—the insulation of homes and the decarbonisation of domestic heating are issues I will address squarely later in my speech.
Decarbonising power generation has been a relative success. Offshore wind installation has been hugely successful. The target of 50 GW by 2030 is hugely ambitious. The fact that we have already installed 13 GW or thereabouts is hugely significant. No other country, apart from China, has our capacity in offshore wind. As the hon. Member for Tiverton and Honiton (Richard Foord) observed, there are areas where we could do a lot better.
It has been very difficult to land a scheme than can effectively decarbonise domestic heating. Some 90% of the roughly 30 million homes in the United Kingdom rely on burning fossil fuels for heating: broadly 85% gas, and 5% oil. For that reason, it was always obvious to me that one of the quickest and easiest ways we can decarbonise domestic heating is through research and driving hydrogen. Hydrogen can be a substitute for natural gas. We obviously need to do that in a safe way—[Interruption.] I will give way one more time, but I need to finish the speech.
I am grateful to my right hon. Friend for giving way. Will he also touch on nuclear? That is an area where we have not made as much progress over recent years as we could or should have done. It is effectively carbon efficient, as well.
My hon. Friend will remember my three years as a Minister in the Department for Business, Energy and Industrial Strategy. I was always a passionate advocate for nuclear, because one of the first things I was made aware of was that we need a balanced power generation system with lots of different technologies. In energy, there is no silver bullet, as I am sure my hon. Friend appreciates. We have to rely on a range of technologies in order to provide resilience to the system. Three metrics of any energy system are the “SAS” of security, affordability and sustainability. Those are the three watchwords I recall when I consider this important subject.
As far as I am concerned, and certainly as far as the Government are concerned, unless they have changed their policy in the past few months—this was the case when I was in government—nuclear has to be part of the answer. There is a debate to be had as to what sort of nuclear we need, be it small modular reactors or the large-scale approach. Our view until recently has been that we need a mix of both. I believe that is still the Government’s position, but the Minister can answer on that.
I wish to touch broadly on a couple of areas where, supportive as I am of the Government, they need to be wary and deliberate in their approach. Taxes have been increased, with the windfall taxes and the electricity generator levy, or whatever one wants to call them. I fully understand the political need for them, but we should not be discouraging investment in key technologies. The Government should examine the capital allowance regime and ensure there is more incentive to invest in decarbonisation technologies, not less.
One issue that has bedevilled our power generation system is the grid. I cannot see any colleagues from Norfolk and the east coast, but one issue that they have relates to the connectors, the landing stations and the substations for electricity generated by offshore wind in the North sea. We need to see how we can more intelligently and efficiently create an offshore network that can land this electricity in one point. I would like more Government engagement on that; it has been considerable but the point is important.
Before I call Barry Gardiner, I remind hon. Members that we have the wind-up speeches at 5.10 pm at the latest, so each contribution should be a maximum of five minutes.
Sir Christopher, under your guidance, I will try to speak swiftly. I congratulate the right hon. Member for Spelthorne (Kwasi Kwarteng) on introducing the debate; I welcome much that he said. We are debating the Government policy on reaching net zero by 2050, but perhaps it would be more appropriate to think about the Government’s barriers to reaching net zero by 2050, because the truth is that we are not on a path to net zero.
Not all is bad. Under the Climate Change Act 2008 and the Environment Act 2021, the UK created a strong legal framework for achieving net zero emissions by 2050. We, on both sides of the House, should be proud of that. However, legal promises alone cannot stand. They must be accompanied by consequential and transformational political action. The question is not what we have committed ourselves to, but how we are implementing the steps that are required to get there.
The Government know that. The 2021 net zero strategy clearly outlines the fact that achieving net zero
“will require the transformation of every sector of the global economy.”
In the 2023 environmental principles policy statement, the Government commit themselves to
“a system that places environmental considerations at the heart of policymaking across government.”
Again, I welcome the language, but the net zero growth plan does not follow that vision. Instead, it sets out a vision for a market led and technology driven net zero transition. A technology centred, market led approach is Government-speak for a voluntarist business-as-usual approach. This is too important to get wrong.
Rooting our net zero approach in technological developments blinkers us to the essential unity of the twin crises of climate and the environment and ignores the very nature-based solutions that the UK Government have rightly championed internationally. It shows a fundamental incoherence in the Government’s philosophical approach. We will neither achieve our environmental goals nor reap the benefits of the economic opportunities of the 21st century if we leave it to the market to lead. The Climate Change Committee has pointed out that while currently more than 31,000 people across the UK are employed in offshore wind alone, that is set to rise to 97,000 by 2030. This is a huge opportunity.
It is an absolute pleasure to serve under your chairmanship, Sir Christopher, and I thank my right hon. Friend the Member for Spelthorne (Kwasi Kwarteng) for calling this important debate. A McKinsey report has stated that the global net zero transition could be worth a trillion pounds to the UK and support just under half a million UK jobs by 2030. It has been described as the economic opportunity of the 21st century. It is recognised that the fastest and most reliable way for the UK to achieve net zero and energy security is to pursue a programme of new nuclear build.
I entered the House in 2019 to represent the constituents of Ynys Môn. They have lived with nuclear power at Wylfa since the 1960s. I stood on a mandate to do everything I could to bring new nuclear to Wylfa. The majority of my constituents support nuclear. They know it is clean, they know it is safe and they know it brings jobs. But Wylfa is being decommissioned, as other nuclear plants have been across the UK. Despite 30 years of promises and the good will of local people, it has yet to be replaced.
Anglesey is known as “energy island”. We have wind, wave, solar, tidal and hydrogen—and, hopefully, new nuclear if I have anything to do with it. Geographically, Wylfa is probably the best new nuclear site in the UK, if not Europe. My constituents in the surrounding area, including Cemlyn, Tregele, Cemaes and Amlwch, and right across Anglesey, desperately need the employment it would offer and give the site that all-important social licence.
I have seen many steps on the way to new nuclear at Wylfa: the British energy security strategy, which specifically mentions Wylfa; the launch of the £120 million future nuclear enabling fund at Wylfa by my right hon. Friend the Member for Spelthorne (Kwasi Kwarteng), who is sitting beside me; and the Nuclear Energy (Financing) Bill. However, we have yet to see the spades in the ground that the people of Ynys Môn and the UK need.
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I realise that I am running out of time, because others wish to take part in the debate, but I wish to mention buildings, which were touched on by the hon. Member for Tiverton and Honiton. This has been the most difficult nut to crack in the whole decarbonisation space, as we see when we look at various other sectors. I have mentioned the power generation sector, where we have decreased considerably our dependence on fossil fuels, gas burning and coal burning. In the transport sector, electric vehicles have really taken off in the UK. We need more take-up of them, but the transport sector is an area where there has been success. I saw my first EV in Israel 10 years ago, in 2013, at a time when we had zero EVs. As late as 2016 we had very few, and there has now been quite an impressive take-up. If we go down that route, we can imagine a world where we have decarbonised transport to a considerable extent. However, this area of domestic heating and how we decarbonise our housing stock has proved the most challenging.
There are two issues with our domestic housing stock. First, the buildings themselves are not very energy-efficient; we have the oldest housing stock in Europe. Secondly, as I have said, 90% of those houses are rely on the burning of fossil fuels. So there are two criteria on which we are not doing very well. First, as the hon. Member for Tiverton and Honiton said, we have to make sure that we can retrofit and improve the housing stock. Secondly, we have to be smart about how we heat those homes once they have been improved and what the power sources will be. As I have said, there is a big challenge there.
Given the huge reliance on natural gas in our system domestically, hydrogen has to be part of the answer, as we see when we look at where the Germans are. They have a huge dependence on natural gas for industrial purposes, and Putin’s invasion of Ukraine set the cat among the pigeons. German Ministers, including Energy Ministers, and other politicians are focused on how to substitute other forms of power for the gas they imported from Russia. They have ruled out nuclear power and focused on liquefied natural gas and, particularly, on hydrogen, which is a source of energy that the Government could look at again in order to accelerate its deployment.
Briefly, I want to mention what the United States is doing. Since I started at BEIS, one of the biggest changes has been the introduction of the US Inflation Reduction Act. Industrial players in the sector say there is a huge pull to the United States because of the subsidies and support it is giving to green technologies, in a naked and unembarrassed way. As energy Minister, Secretary of State for BEIS and, briefly, Chancellor, I was very keen that we had something to say on this, because it is not just a huge challenge to us but to the European industrial base. Having been in his position, I know that the Minister will not be able to talk about Treasury affairs, but I would be interested to hear the Department’s thinking on the US IRA development.
This is an introductory debate about a subject I am very passionate about, as are many Members here, but finally I want to thank the House and the many varied organisations that have sent me great notes and briefings, which show me that this is one of the most important issues any Government will face in the next 20 or 30 years. I have brought this debate, other MPs will secure further debates before the end of this Parliament, and I am convinced we will revisit the subject in the next Parliament. Many issues that we debate are of largely ephemeral interest, but this matter will affect our children and generations to come, so I am honoured to be able to introduce this short debate today. It is not the first, but one of the very many debates we will have, and should have, about this crucial issue.
I welcome some of the investment that the Government have committed to achieving net zero, with £30 billion of public investment for a green industrial revolution, £36 billion of funding for improvements in energy efficiency, £20 billion for carbon capture and storage and a billion for low-carbon technologies. The Government appear to remain perfectly convinced that their approach will catalyse around—they say—£100 billion of private investment in developing those new industries and new carbon technologies, such as offshore wind and carbon capture and storage. That is a combined total of £187 billion.
By contrast, the Climate Change Committee has made it clear that we need between £300 billion and £430 billion of investment to achieve our goals. More importantly, it is clear that a strategic programme is required to reform the regulatory frameworks and to remove those barriers to the planning and construction of renewable energy infrastructure. It is not just about money; it is about the whole regulatory framework. The 2022 Climate Change Committee report points out that that has not been done; there is no adequate policy framework for catalysing the large-scale transformations necessary to achieve the established net zero targets by 2050. It is concerned that there does not seem to be any urgency on the part of the Government to do so.
I welcome the independent review conducted by the right hon. Member for Kingswood (Chris Skidmore). He recognised the barriers that remain in place. His review said that the Government should take immediate action, and it recommended 25 short-term policies that the Government should achieve by 2025. The review called those policies “25 by 2025”. The idea was both to remove barriers that prevented business and industries from supporting the net zero ambition and to provide an immediate signal of intent to the private sector that the Government were serious about delivering their net zero target.
We were disappointed on the Environmental Audit Committee when the Secretary of State for Energy Security and Net Zero, the right hon. Member for Welwyn Hatfield (Grant Shapps), responded to questions in our most recent hearing. When asked about wood pellet biomass at the Drax power station—a technology that emits 18% more carbon than coal, yet still remains a critical part of the Government’s net zero agenda—the Secretary of State said that he hoped he might be able to say more in a future session. Well, we all hope that, because we have been eagerly awaiting the Government’s biomass strategy, which was due to be published last year and has still not made it into the public domain. His response on hydrogen, supposedly a key part in the Government’s plan, was equally disappointing. The Secretary of State—
Building nuclear plants takes years. Just going through development consent takes years. In the building of Hinkley C and Sizewell C, we are developing a new generation of nuclear skills that we will lose if there is nothing for them to move on to. We need a plan for how and when we will roll out the Government’s goal of a one gigawatt nuclear reactor going to financial investment decision in this Parliament and two going to financial investment decisions in the next Parliament. We currently produce 3.9 GW of energy from nuclear. That is forecast to decline to 3.2 GW by 2030, with all but one of our nuclear power stations going off line in the next decade.
As chair of the all-party parliamentary group on small nuclear reactors, I welcome the SMR competition announced by the Chancellor in the spring Budget. I am looking forward to the launch of Great British Nuclear and it is brilliant news that for the first time we have a nuclear Minister. Other countries are taking bold and ambitious steps on investment and action in the move to net zero. Without a similar response, we risk losing out on new opportunities and potential economic gains. We have shown that as a Government we can move at speed when we face a crisis. In the Minister’s summing up, I want to hear—given that we are just 27 years away from 2050, we are in a crisis—the Government’s plan to grasp the opportunity and to build new nuclear at Wylfa. Diolch yn fawr.