Powering Up Britain

For much of the past 50 years, since the oil crises of the 1970s, we have taken cheap, plentiful energy for granted. Indeed, one of the catalysts for Britain’s economic transformation over that period has been affordable, abundant energy powering our homes, infrastructure, businesses and industry. Yet today, this cornerstone of our prosperity is under threat. Putin’s illegal war in Ukraine and decades of overreliance on imported fossil fuels have combined to push up energy prices. Even though we have very little exposure to Russian gas, we have suffered the consequences of volatile international energy markets. That is why the Government have stepped in this winter to pay around half of the typical household energy bill, and I am pleased to say that that support was extended in the Chancellor’s recent Budget.

The much bigger challenge long term is to bolster our energy resilience as a nation, so that a tyrant like Putin can never again hit the pockets of every family and business in Britain. We must diversify, decarbonise and domesticate our energy supplies to secure the cheap, clean power that Britain needs to prosper in the future. That is why last month the Prime Minister created the Department for Energy Security and Net Zero to give these two closely entwined objectives—energy security and net zero—the full and dedicated attention within Government that they clearly merit. It was a statement of intent to put energy security among the Government’s top priorities. By doing so, we will bring wholesale electricity prices down to among the cheapest in Europe by 2035, drastically reduce carbon emissions and deliver the long-term boost that our economy needs, using Britain’s unique talents and assets to drive the energy transition.

Following the Department’s launch just 50 days ago, I am pleased to announce how the Government will be powering up Britain, including through our energy security plan, which sets out the steps we are taking to become more energy independent by powering Britain from Britain, and through our net zero growth plan, which builds on the measures laid out in the net zero strategy to keep us on track to achieve our carbon budgets. That plan meets our statutory obligations under the Climate Change Act 2008 to respond to the Climate Change Committee’s annual progress report from 2022, and sets out a package of proposals and policies that will enable carbon budgets to be met, to ensure that Britain remains the leader among the fastest decarbonising nations in the world.

Before starting on the announcements, I thank my right hon. Friend the Member for Kingswood (Chris Skidmore) for his excellent work in this area, investigating how to deliver net zero in a way that is both pro-growth and pro-business. In January, he submitted his detailed report and recommendations to Government. I can confirm that we are partly or fully acting on 23 recommendations of the independent review of net zero report’s 25 recommendations for 2025. On behalf of the whole House, I thank my right hon. Friend again for his work.

Let me start on the announcements, if I may. As part of powering up Britain, the Government are launching Great British Nuclear, to put clean nuclear power at the heart of Britain’s energy security and spearhead a busy programme of new nuclear projects, starting with a competitive down-selection this year to choose the best small modular reactor technologies. We are launching the floating offshore wind manufacturing investment scheme, providing up to £160 million to kick-start funding in port infrastructure so that we can move forward with that exciting new technology, and we are publishing plans for investing in carbon capture and storage, a key area for cleaning up energy and one in which Britain can lead the world.

To drive our hydrogen ambitions, we are announcing a shortlist and funding for the first round of electrolytic hydrogen allocation, with a second round to come, and setting out our longer-term hydrogen plans. We are providing an extra £1 billion for energy efficiency upgrades through the new great British insulation scheme, and we are investing to speed up the market for heat pump installation to decarbonise home heating and leverage up to £300 million of overall funding, including private funding.

This country is already ahead of the game when it comes to decarbonising its economy. We are a global leader in offshore wind power and currently have the world’s largest operational offshore wind farm project, named after a town in my constituency: Hornsea 2. We also have the second, third and fourth largest offshore wind farm projects, but the measures we are unveiling today will accelerate our transition, rolling out existing technologies and bringing transformative new technologies to market.

We are truly on the verge of a new industrial revolution, but just like the first industrial revolution, investment will be key to our success, delivering not just energy security and ambitious reductions in carbon but the jobs, exports and productivity gains of the future. With that in mind, we are publishing today a new green finance strategy, which sets out a range of measures to mobilise private investment into net zero. That will support the UK in maintaining its position as a world-leading centre for green finance, and it sets us on a pathway to becoming the world’s first net zero-aligned financial centre.

It is imperative that we do not just focus on reducing emissions at home. The UK will work with international partners through the green transition to share the benefits of an improved environment that is good for business, because all economies need to take decisive steps to reduce their emissions. Indeed, increased investment in net zero technologies globally will unlock innovation and drive costs down, as well as create opportunities for green UK exports—in carbon capture and hydrogen, for example.

As such, today we are publishing two additional documents. The first is the 2030 strategic framework for international climate and nature action, which outlines our vision to halve global emissions, halt and reverse nature loss, and build resilience to climate impacts this decade. The second is the international climate finance strategy, which details our commitment to £11.6 billion of international climate finance up to 2025-26, after we pledged to double it. Both reinforce our climate leadership during what is a critical decade for delivery, showing that Britain is credible and committed to meeting its promises.

It is no exaggeration to say that Britain’s prospects as a nation, our ability to compete as an economy, and our capacity to decarbonise and tackle climate change all depend on energy security. Now, with a dedicated Department to deliver that vital objective, we will not only wean ourselves off fossil fuel imports but deliver cheaper, cleaner energy from domestic renewables and nuclear, protecting British households from turbulent international energy markets and creating hundreds of thousands of green jobs to level up Britain in the process. Making Britain an energy secure, net zero nation is one of the greatest opportunities of our time. Today, we have shown how we will grasp that opportunity for the benefit of everyone in this country for generations to come.

I thank the Minister for his statement, but let me tell him that although there may have been thousands of pages published this morning, this is not the green day that the Government promised, but a groundhog day of reannouncements, reheated policy and no new investment. The documents are most notable for their glaring omissions: there is no removal of the onshore wind ban that is costing families hundreds of pounds on bills a year. There is no new money for energy efficiency to insulate homes and cut bills, just a reannouncement of a feeble offer made last year. There is no net zero mandate for Ofgem, as recommended by the right hon. Member for Kingswood (Chris Skidmore)—to whom I too pay tribute—and as demanded by industry. There is no proper response to the Inflation Reduction Act, even as the rest of the world speeds ahead.

The biggest indictment of all, buried in the fine print and not mentioned by the Minister, is the admission that the policies announced today do not deliver the promise, solemnly made in front of the world at COP26 in Glasgow barely a year ago, to meet the UK’s 2030 climate target. The Government waited until noon, five hours after all the other documents were published, to release the carbon budget delivery plan—which is more like the failure to deliver the carbon budget plan. This is what it says:

“We have quantified emissions savings to deliver…92% of the NDC.”

A target for less than seven years’ time, and now almost 10% off—what an indictment of all the verbiage we have heard today. All the policies and all the hot air do not meet the promise that the Government made on the world stage under the presidency of the right hon. Member for Reading West (Sir Alok Sharma), to whom I also pay tribute. That means higher bills, energy insecurity, fewer jobs and climate failure.

Let me ask the Minister five questions. First, if the Government really wanted a sprint for clean power, they would go for onshore wind. They even promised to lift the ban last December, but the proposals in their consultation have been written off by industry as doing

I thank the right hon. Gentleman for his response, but Members on the Government Benches will have been listening with a certain degree of incredulity, because we remember that in 2010 he left the people of this country in the worst housing stock in Europe. They were cold, their bills were unmanageable and just 14% of houses were properly insulated. Now it is half, and we need to go further and faster, which is why we have the energy efficiency taskforce. It is why we have announced £6.5 billion in this Parliament, and it is why we are announcing today our new initiative on insulation. It is why there is another £6 billion to be spent between 2025 and 2028. The Labour party failed absolutely on the most basic thing: looking after people in their homes so they could pay their bills.

That is not all, however, because on renewables the Labour party now talks about this transformation by 2030, which no one other than the Labour party—it is not involved, I fear, in an entirely open, transparent, and possibly even honest exercise—believes can be delivered by 2030. What was Labour’s record on power? In 2010, 7% of our electricity came from renewables. If Labour in government had unleashed renewables the way we did, families this last winter would not have needed the Government to step in, because we would not have been so reliant on gas. It was Labour’s failure. It was 7% of electricity then, but it is nearly half today. This Government have transformed our performance, while the Labour party failed in power.

What are Labour’s ideas going forward? What do they consist of? While we have unlocked £200 billion of investment since we came into power, the Labour party, led by the hard left, with whom the right hon. Gentleman has always had more than a passing association, want through its GB Energy to nationalise an industry in which we have brought in global investment. Instead of unlocking renewables, Labour will, if it gets back into power, do exactly what it did in power last time: fail to deliver renewables, reverse the green transformation, fail to meet our carbon budget targets and let down Britain and every family, who will be back in cold, freezing homes with overly expensive bills to boot. That is what the Labour party offers.

May I thank the Minister for his kind words about the net zero review, and indeed the Government’s full response so soon after the review was submitted? I hope that the UK’s net zero pathway is now in a better place as a result of the recommendations. I should say that they are not my recommendations, but those of all the sectors I went to speak to and thousands of individuals, businesses and companies that want to get on with delivering decarbonisation, because they see the economic opportunity for the UK.

Does the Minister agree that we now need to slay this myth that somehow net zero will make us colder and poorer? Net zero will make us warmer and richer, and it is the economic opportunity of the decade, if not this century, to create a new economy, just as other countries such as the United States have recognised. Will he also accept that rather than talk down what the US has done, we need to work with our allies and democratic partners in creating a new special relationship around green energy?

Lastly, just to reflect on the comments made by the right hon. Member for Doncaster North (Edward Miliband), net zero is not just about 2050. We cannot keep kicking the can down the road. We do not have 28 years; we have seven years to deliver on the most ambitious nationally determined contribution of a 68% emissions reduction. If the UK achieves that, it is an economic prize that every single country across the world will look to us on how to achieve, and it will deliver further growth. There are economic consequences to not meeting that 2030 target, just as there will be severe economic consequences to not delivering net zero. I hope the Minister will urge both this party and any other climate delayers, who become the new deniers, that ultimately net zero is the future for the UK.

I thank my right hon. Friend and again pay tribute to him for all his work. This is the economic opportunity. If we look at a map of Europe, we can see the opportunity around the British Isles, and we will capture that energy. We are also blessed with around a third of all carbon storage in Europe. We can operationalise that to decarbonise the UK and provide a service to Europe, and we will do so. It will lead to the reindustrialisation of the north-west, north-east, Wales and Scotland. The opportunities are immense, and colleagues have been fighting hard.

On the NDC, we have set that ambitious world-leading 2030 target, and we are committed to delivering our commitments, including the 2030 NDC. [Interruption.] The right hon. Member for Doncaster North is a little out of touch. Countries are not due to start reporting to the United Nations framework convention on climate change on progress towards meeting NDCs until 2024, but we have quantified proposals and policies already to cover 92%, and we will go further. Just as we have done with our carbon budgets, we will exceed, not fall short. It was the Labour party that fell short on insulation and renewables; this party has a record of delivery, and our policies are supplemented by others that we have not quantified yet as we work hard to roll out these things. We will meet that 2030 target. We will continue our leadership role as arguably the only major economy in the world that is on that net zero pathway to 2050.

I call the Scottish National party spokesperson.

I think the greenest aspect of these announcements is the level of recycling in them without the actual funding to back them up. Starting with nuclear, there is no successful European pressurised water reactor project anywhere in the world. Hinkley has almost doubled in price to £33 billion, so we know that Sizewell C will cost something like £35 billion. That is a huge, scandalous waste of money that could be better utilised elsewhere. On SMRs, there is not even an approved design with the regulator yet. At £2 billion a pop, SMRs are not cheap either, and it is a myth that they will lower energy bills and provide security. Nuclear is the only energy technology to get more expensive rather than cheaper over the years.

We need more storage. I keep asking about pumped storage hydro. Please will the Government agree a carbon floor mechanism so that SSE can get on with Coire Glas and Drax can get on with the Cruachan extension? While the United States has the Inflation Reduction Act, when we look at the budget for allocation round 5, funding has been cut by a third from £285 million to £205 million, while we have inflationary pressures of 30%. The reality is that it will not deliver what we need it to deliver. Has the Minister looked at the lessons from the Spanish auction, which failed miserably and did not deliver on allocations?

The Minister knows that we need a greater ringfenced pot for tidal. At the moment, tidal stream energy has a 80% to 90% UK supply chain. If the Government do not increase the ringfenced budget, we risk offshoring manufacturing again. If he is talking about being powered by Britain, he needs to increase that funding for tidal stream so that we are building the UK supply chain.

On CCS, Acorn was not even mentioned in the statement. It was promised to us in 2014, and now it is not even mentioned. Is there going to be a definitive funding allocation for Acorn and are there going to be timescales for that funding, or is it a further betrayal when the Government are taking in £60-odd billion in additional oil and gas revenues? The reality is clear: Scotland has the energy, but Westminster keeps the powers.

The hon. Gentleman’s party of course opposes nuclear, despite the opportunity it provides to this country, and it means that Scotland does not benefit as it should. He talked about pumped hydro, and I would be happy to meet him to discuss that further.

We are the world leader in tidal energy, although we would be hard pushed to understand that from the hon. Gentleman. We have put a ringfenced number on that, and budgets can be changed. The budgets were set on the basis of those projects that were ready and were coming forward. As that changes through this year, as I very much hope it will, we have the flexibility to change those budgets upwards appropriately. Like him, I believe that tidal has a great future, and I love the fact that we are the global leader. There are many jobs in Scotland and around the rest of the country from it.

On carbon capture and storage, this is a major announcement today. I am delighted about the eight projects for carbon capture that have come forward as part of track 1. Today, we have launched track 2, and we have said in the papers, as the hon. Gentleman will be delighted to hear, that we think the Scottish cluster—and Acorn—and Viking in the Humber are the two best placed at the moment to go ahead, although there will be a competition and we are opening that now. We will be having an extension of track 1, we will be having track 2 and we are cracking on with it. I very much look forward to seeing what the Scottish cluster has to offer, because I know it is particularly well prepared, and that is why it was not a reserve, but the reserve in our track 1 process.

Mr Deputy Speaker, thank you for calling me. Could I start by saying that I welcome the announcements that have been made? I think this does move us forward on the road to decarbonising our economy. I want to thank the Minister and particularly his officials for all of the work that has gone into this and the thousands of pages that have now been published. He made a really important point when he talked about how

“investment will be key to our success”.

I could not agree more. I agree with him that, over the last 10 or 12 years, we have managed to attract tens of billions of pounds of private sector investment, but we have to deal with the world as we find it now. The reality is that the US, the EU and other nations are speeding up and attracting billions and billions of private sector investment right now. Why are we waiting until the autumn to respond to that? Do we not need to speed up and respond now to the Inflation Reduction Act and measures by other nations?

I thank my right hon. Friend, and I pay tribute to him for his role as COP President and all the leadership he has given in this area. He is absolutely right to highlight the investment competition, but as I think The Economist mentioned last week, the US approach, with its direct subsidy regime, is not as effective—not as cost-effective—as the UK regime. I am confident in our system, and we are rolling this forward. We have attracted £50 billion of green investment from 2021 to 2022. [Interruption.] Since 2010—when the right hon. Member for Doncaster North, who does not stop chuntering, left power, fortunately—we have had 50% more expenditure per share of GDP in this country than in the US, and we are opening up today the policies to ensure that that continues. My right hon. Friend will be delighted to learn that the CBI has said:

“The package of measures announced by the government represents a gear shift to boost energy security, reduce household bills and re-establish the UK’s credentials as a leader in green technologies.”

That is the CBI speaking for British business, and I believe that the policies today will deliver implementation, which is our main aim as we go forward.

After more than eight years championing carbon capture and storage, I welcome today’s positive news, even the repeated bits, but particularly the projects for Teesside. That said, the Government’s ambition falls short of the industry’s, and the Department’s website shows that projects for CF Fertilisers, Alfanar and Kellas Midstream have not made it. Why is that, and what impact will the decision to ditch the Humber projects, in the Minister’s own backyard, have on the innovative, collaborative and excellent Humber-Tees carbon capture, utilisation and storage project?

I think there was some recognition of good news in there from the hon. Gentleman. He and, unfortunately, all the Labour MPs in his area seem endlessly to talk down Teesside, as it goes from success to success under its excellent Mayor. Today is fantastic news for Teesside, and as I have said, this is just the beginning. We are starting projects now, we are accelerating track 2 and we are promising an extension this year to track 1. We are doing it. The hon. Gentleman, of whom I am a friend and admirer, should stop talking down the success of his area, get behind the development and look at how we have moved from the dire situation in 2010 to the world leadership position we hold today.

There is much to be welcomed in the Minister’s statement, but excluding Drax from the track 1 CCS projects will come as a surprise to many and a blow to the company’s employees in my constituency and the wider region. I do not think there are any projects in the Humber region that have got through on track 1. The management at Drax will now have to urgently consider what to do with their UK operations, especially when we consider the challenging economics of biomass operations post March 2027. Could the Minister clear something up for me? The Yorkshire Post reported last August that the Prime Minister backed Drax’s BECCS—bioenergy with carbon capture and storage—plans. Can my right hon. Friend confirm that The Yorkshire Post reporting was accurate, and if so, why has the Government’s position now changed?

I thank my right hon. Friend for his question, and for being such an active campaigner for Drax and probably the foremost champion of power BECCS in this place. He is absolutely right that power BECCS and Drax are critically important to this country and the future of our net zero strategy. There are no power BECCS projects going ahead in the first phase of the track 1 process due to infrastructure constraints. We remain committed to our ambitious CCUS targets, which include 5 million tonnes of greenhouse gas removals by 2030, and power BECCS has a key role to play in that. That is why we have put so much emphasis on track 1 expansion and track 2, both of which will get further CCUS projects operationalised by 2030. To respond to the specific point my right hon. Friend made, the Department totally understands that we need to work with Drax on a bridging option between 2027 and 2030, and the Secretary of State has charged our officials with working with Drax on what those options look like.

Just a week ago, the UN Secretary-General said we needed a “quantum leap” when it comes to climate action. This Government have laboured and, frankly, brought forth a mouse. There is no new funding, no street-by-street home insulation plan, no mandatory rooftop solar and no unblocking of onshore wind. Instead, Ministers are gambling with technologies that are slow and costly at best, and unproven at worst. While some CCS might have a role for carbon-intensive industry, will the Minister accept that—given its very high cost, high life-cycle emissions and appalling record of delivery, and since it cannot achieve energy security because fossil fuels will simply be sold on global markets at global prices—CCS cannot be used as an excuse for licensing new oil and gas in the middle of a climate emergency?

I thank the hon. Lady for her question. [Interruption.] I think I was disappearing like a mouse underneath the Dispatch Box there. We of course made major announcements in the Budget. What today is all about is giving the detail of how we are going to unlock that. She raises the question of carbon capture and storage. There is not a way for us to get to net zero without using carbon capture and storage. I remember that it was said by the Labour Government in 2003, if I recall correctly, that it was urgent. Here we are, 20 years later, but I am delighted to say—[Interruption.] I am delighted to say that, having had to come into government with nobody insulated and practically no renewables, and a note on a piece of paper saying there was no money left, we are coming forward with proposals to put that right.