Net Zero: Social Market Foundation Report

Question

Asked by

To ask Her Majesty’s Government what assessment they have made of the report from the Social Market Foundation Zeroing in: Net Zero disruption and opportunity at a local level, published on 14 September.

My Lords, the Government welcome the report and its conclusions. The net-zero transition will bring many challenges at the local level, but it will also create vital opportunities to level up. The Government are already doing many of the things that the report recommends. The net-zero strategy sets out our approach to maximising the opportunities that exist and how local and devolved administrations can contribute and benefit from the transition.

The report highlights some of the challenges that will be faced by rural areas in the transition to net zero. Does the Minister accept that solutions tailored to urban areas may very well not be appropriate in the countryside? Can he consider the recommendation that there should be a bespoke net-zero approach to rural areas to ensure that they do not get left behind?

My Lords, the Government are absolutely committed to rural areas not being left behind and take the point that they are essentially very different from urban areas. However, we do not consider that we should have a separate rural strategy but consider it to be part of all our activities.

My Lords, I declare my interest as chair of the National Housing Federation. I know from talking to housing associations over the last few months how determined and ambitious they are to make homes greener and warmer for residents and to tackle climate change, but it cannot be done alone. They are already planning to invest £70 billion in future-proofing, but our new estimates, produced by Savills, show that it will cost an extra £36 billion to reach full decarbonisation by 2050. I welcome the additional £800 million announced last week, together with the heat and buildings strategy—a great step forward—but neither addresses the long-term funding gap to 2050. Can the Government work with the sector to bridge this gap and to achieve the country’s net-zero ambitions?

My Lords, we recognise that there are considerable challenges in decarbonising our homes. I made a commitment that we will work together to help housing associations address those challenges.

My Lords, by how much is it estimated that the cost of energy will increase for identified UK user groups as the result of achieving net zero?

Price and bill impact will depend on electricity market developments and consumption patterns. Policies that improve energy efficiency of homes will reduce bills and benefit fuel-poor households. My noble friend will be pleased to know that we expect wholesale prices under a renewable-based electricity system to be lower than our current one, which is based on fossil fuels.

My Lords, I refer the House to my interests, as set out in the register. I will follow up on the Question of the noble Baroness, Lady Scott of Needham Market. Rural areas, communities and local authorities face a range of problems, such as a reliance on private cars, a lack of charging points and distance from the decarbonisation of industrial clusters. Does the noble Lord agree that the specific, unique issues of the countryside need addressing to ensure that no one is left behind? If he does—he said that the Government do not plan to have a separate strategy—what is he doing to meet this challenge?

The Government are providing many mechanisms to support rural areas. I point to the community energy projects, through the rural community energy fund, which is a £10 million fund to support community-run projects in England that benefit the transition to net zero. Net zero is half the story; adaptation to the consequences of climate change is equally important, and the Government are committing £2.8 billion in a six-year capital investment plan to reduce flood and coastal erosion risk.

My Lords, local authorities are critical to achieving the Government’s net-zero target, but will struggle to do so without sufficient resources. Some 95% of local authorities have said that funding is a barrier to them tackling climate change. The Climate Change Committee recommended increased resourcing for local government as a priority. Can the Minister say whether and when the Government intend to give local authorities new capital-raising and revenue-raising powers to support the transition to net zero, as recommended in the SMF report?

My Lords, I point out that the Government have committed £1.2 billion for local action on climate change. There are currently no plans to devolve additional tax-raising powers, but the Treasury will keep this under review.

My Lords, this follows the questions of my noble friend Lord Kennedy and the noble Baroness, Lady Scott of Needham Market, on the report that is the subject of this Question. Does the Minister agree that there is an enormous difference in the levelling-up agenda because there are problems in the north, particularly the north-east, where 90% of new-build houses are still heated by gas? Where is the policy to convert this to something more meaningful and at lower cost, whether electricity or hydrogen, and what are the Government doing about it? This will be a serious problem. London seems all right, but the rest of the country is going to suffer serious extra costs as a result.

My Lords, it is right that it is easier for London to hit the target of net zero by 2050, given its starting point. But levelling up is about improving living standards and unleashing enterprise and growth across all parts of the UK, and spreading opportunity. It is important to see how the £4.8 billion levelling-up fund is allocated to deal with the noble Lord’s point, but we also need to leverage private sector funding. Our estimates are that the fund will leverage substantial private sector income to achieve the green revolution that we all want.

My Lords, all supplementary questions have been asked and we now move to the next Question.