Ben Lake is the Plaid Cymru MP for Ceredigion Preseli.
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The communities raising these concerns are not blind to the urgent need to address climate change and decarbonise our economy. Indeed, the Welsh Government’s “Energy Generation in Wales: 2022” report, which was published last October, details the equivalent percentage of local electricity consumption met by local renewable electricity generation for each county in Wales. For Ceredigion, 118% of our local electricity consumption in 2022 was met by local renewable electricity generation. The communities voicing concerns about the impact of new pylon infrastructure on the environment and the potential devaluation of their properties are not doing so from a point of ignorance and are not denying the urgent need to contribute to our decarbonisation efforts. Indeed, the communities along Ceredigion’s coastline and interior valleys have long made a contribution to these decarbonisation efforts, and will continue to do so.
At the heart of this debate is the idea of a just transition that balances the concerns of communities with the need for new infrastructure. Although definitions of a just transition differ, my understanding of the concept is that it is about seeking to bring about fairer outcomes from the transition to net zero by maximising the benefits of climate action and minimising the negative impacts on communities. We have already heard that a failure to ensure a just transition exacerbates inequalities, affects support for action to address climate change and biodiversity loss, and leads to legal challenges. Ultimately, it can impact policy implementation.
Full debate: National Grid: Pylons
It is also important to bear in mind that a changing climate will also have an impact on those markets abroad from which the UK imports so much of its food. Especially relevant here is the fact that, as the right hon. Member for Camborne and Redruth outlined, different sectors will be more exposed to those foreign import markets than others. Let us take the fruit and vegetable sector as a case in point, as we depend quite a bit on foreign markets for our fruit and veg. The UK produces over 50% of the vegetables consumed domestically but only 16% of our fruit, and 93% of domestic consumption of fresh vegetables is fulfilled by domestic and European production, while fruit supply is more widely spread across the EU, Africa, the Americas and the UK. Some of those foreign markets are in areas of the world that we know will suffer from climate change, and their ability to produce much of the food that we import will be impacted by that.
Food security is a challenge with which we will soon need to grapple. By not only maintaining but increasing domestic production, so that we gain greater self-sufficiency, we will in turn gain greater resilience to climate change and to shocks in a very uncertain world.
Full debate: Farming
It is a pleasure to follow the hon. Member for Peterborough (Paul Bristow). I very much enjoyed his speech and in particular the points he made about the potential of green energy technologies and the green economy for economic development and growth. One of the things that west Wales and Peterborough might have in common is the fact that too many of our young people have to leave to find work when they come to the age of 18. I agree with him that advances and developments in green renewable energy technology offer real economic potential for us and could address that demographic trend that has harmed our communities for many decades.
I commend my neighbour and Chair of the Select Committee, the right hon. Member for Preseli Pembrokeshire (Stephen Crabb) on securing this debate and setting things out so eloquently and impressively. I could just regurgitate the points he made in his speech, such was their quality, but it is important to repeat the fact that Wales has significant renewable energy potential. As he rightly pointed out, if we realised that potential, it would make an important contribution to decarbonisation efforts, as well as creating well-paid jobs and careers in a part of the country that so desperately needs them and enhancing our energy security, the importance of which has been brought into sharp relief in the past year and a half or so.
Such scepticism about the transition nevertheless offers a useful reminder that it is not enough just to set ambitious targets or a general objective on the transition to renewable energy sources; we also need to ensure that the proceeds of doing so benefit communities in the UK and that they are distributed fairly. Many Members have mentioned that, so I will not go into it in detail, but we do need to ensure that we learn the lessons of the past. We need to be mindful that in previous iterations of offshore wind development, a number of the benefits from skills, jobs and technology were really felt in other countries.
It has been argued that management of the Crown Estate in Wales could give the Welsh Government the opportunity to allocate a proportion of the proceeds from leasing and licensing to benefit future generations by way of, in effect, a wealth fund. That is not a novel idea—other countries such as Norway and Qatar have done it in the past for oil and other fossil fuel sources, rather than for renewable energy—but perhaps we could be doing that in the renewables context. I would be keen to hear whether the Minister thinks that has some mileage. A 2008 study by PwC found that the UK could have built up £450 billion had it put tax receipts from oil and gas fields into such a fund from the beginning of the exploitation of gas in the North sea. We could learn a lesson from that and start investing now to create a fund that could serve as a buffer against future economic shocks, which is particularly important given the likely impact of climate change on the world economy in the coming decades.
Full debate: Energy Infrastructure
In the long term, the energy crisis has thrown into very sharp relief the urgent need to implement measures to bring down energy bills permanently for households and businesses. One solution is to transition to renewable energy sources, another—the focus of today’s debate—is to introduce comprehensive policies to enhance the energy efficiency of the UK’s housing stock.
Finally, reducing household energy demand is of course vital for us to improve energy security, reduce our reliance on fossil fuels and, of course, realise our climate targets. A coalition of charities, including Fuel Poverty Action and Green Alliance, have warned that without action on housing and buildings, there is no plausible path to achieving the fifth carbon budget or meeting the 2030 statutory fuel poverty target.
If those issues are not addressed, thousands of eligible households will miss out on crucial energy-saving measures, meaning that they will face higher energy bills this winter and beyond. I believe that the Department for Energy Security and Net Zero is consulting on the deliverability of elements of ECO4. If it intends to do so, I ask that they publish the consultation before the summer recess in order to allow sufficient time ahead of April 2024 for industry to adjust accordingly. A failure to do so may mean that even more installers drop out of delivering the scheme due to continued uncertainty.
Finally, I come to another area that deserves a brief mention in a discussion on how we can help households to bring down energy bills and expand our renewable capacity: incentivising households to invest in smaller-scale renewables. I have been contacted by several constituents who are concerned that the reduction in support from the feed-in tariffs—and now their replacement, the smart export guarantee—has vastly reduced the incentive to invest. I urge the Government to consider increasing the tariffs that the energy suppliers are required to offer to homeowners who generate renewable energy. I draw my remarks to a close, and very much look forward to the comments of my colleagues.
Full debate: Energy Company Obligation Schemes
Looking beyond next winter, I think Members will agree that the Bill offers a golden opportunity to step up investment in the energy efficiency of our housing stock. In the long term, reducing our energy demand represents one of the most important contributions to forging a more resilient and sustainable energy system, helping to permanently slash energy bills for both households and businesses alike. I have previously called for the £6 billion for energy efficiency measures, committed in the autumn statement, to be brought forward. The spending profile should be brought forward as much as possible. The more we can prioritise the investment of energy efficiency, the better. As chair of the all-party parliamentary group on fuel poverty, I emphasise that point and, in doing so, ask that the Government consider setting clearer pathways for improved energy efficiency standards for our housing stock.
Full debate: Energy Bill [Lords]
Another key area that should be prioritised if we are to boost the Welsh economy is, of course, renewable energy. Others are far more informed than I am on this topic and could make contributions, so I will just say that we have considerable generation potential along the Welsh coastline in both marine renewables and offshore wind, and an opportunity to seize a first-mover advantage in technologies such as offshore floating wind and become a world leader in the manufacture of components, and in the export of skills and expertise into a growing global market.
Wales desperately needs an economic strategy capable of providing adequate funding for its public services, reducing poverty, improving incomes and ensuring that we realise our potential contribution to the global effort of tackling climate change—a strategy that, I am afraid to say, the spring Budget did not deliver.
Full debate: Spring Budget: Wales
Before concluding, let me take the opportunity to raise an issue in the hope that the Secretary of State can use his good offices to look into it. We speak a lot in this place about energy efficiency and the need to decarbonise housing. In this cost of living crisis, with the current price of energy, there is a great deal of interest among the public in improving the energy efficiency of their homes. We should all be pursuing and supporting that. I am conscious that at present the flagship energy efficiency policy is ECO4—the fourth phase of the energy company obligation. Although I agree that retrofitting projects will have to play an important role in the broader energy efficiency mission, I am concerned about the implementation of ECO4 locally in my constituency.
Full debate: Welsh Affairs
When we look to the future of our food security, increasing climate change poses a significant risk. I mentioned that we are self-sufficient to the tune of only 16% of the fruit that we consume. DEFRA’s food security report notes that:
“The elephant in the room is that offsets are fundamentally not about mitigating climate change, or even about removing past emissions, but about enabling future emissions, about protecting economic growth and corporate profits.”
Full debate: National Food Strategy and Food Security
Finally, another aspect that bears repetition and further consideration is the recommendation from the Federation of Small Businesses to look again at support for renewable-energy installations for small businesses. The FSB has suggested that vouchers worth £5,000 could be made available to small and medium-sized businesses to spend on qualifying energy-saving products and services and renewable-energy installations. I look around the Chamber and recognise a few rural Members of Parliament; they may have been approached by farmers and agricultural businesses that have pointed out that they have a lot of roof space that might well be suitable for the installation of solar panels. Even if that cuts just the energy consumption and grid dependence of those farmers and businesses, it will still contribute to the wider effort to reduce our energy vulnerability to fossil fuels and the vicissitudes of the market.
Full debate: Energy Costs in Wales
I also associate myself with the concerns that have been voiced about the need to strengthen as an objective for the regulators the need for sustainable growth and to ensure that they are very much aligned with some of the Government’s expectations on net zero. I do not think that we have yet heard an explanation as to why that statutory objective cannot be placed on the regulators. I see it as working hand in hand with sustainable growth and competitiveness; they do not necessarily need to compete with each other.
Full debate: Financial Services and Markets Bill
It is a pleasure to serve under your chairmanship, Sir Christopher. I begin by congratulating the right hon. Member for Clwyd West (Mr Jones) on bringing this very important and timely debate before the House this afternoon. I will underline and support most if not all of the remarks that he made. He made a very powerful case in favour of the Government pausing, taking a step back and reconsidering their approach to decarbonisation of heating fuel for rural households, for the following reasons. On average, rural households tend to have been built a lot longer ago, so the energy efficiency is somewhat lower. Also, something that we need to bear in mind—we do not do that enough, in my opinion—is the discrepancy between average rural incomes and those of our urban counterparts, which the right hon. Member made very clear in his speech.
I fully support the right hon. Member’s calls for the Government to pause and reconsider their approach. I was particularly struck by his argument about needing a just and fair transition as we decarbonise the economy. I fully agree that we need to decarbonise our society and economy, but it has to be done in a just and fair way. Otherwise, it is not realistic and will, at worst, place a substantial cost on the shoulders of those who can least afford it. I very much endorse his remarks.
My constituents are therefore particularly exposed, both to the recent increases in the price of heating fuel and to any policy changes the Government might bring in to decarbonise their fuel source. We know—but it bears repeating—that prices have typically increased by some 150% over the past year. Eye-watering sums have been quoted for some of my constituents. On top of the fact that so many households and properties in Ceredigion are not connected to the mains gas grid, our housing stock is very inefficient, primarily because it is quite old. In neighbouring Gwynedd, some 56% of the housing stock was built before 1945. In Ceredigion, only 36% of homes reach a C rating on the energy performance certificate standard.
As part of this conversation about how we transition and decarbonise fuel sources for off-grid properties, we seriously have to look at energy efficiency measures. The right hon. Member made the case far more eloquently and persuasively than I could, but I will reiterate that if we are serious about this, we need to improve the energy efficiency of our housing stock. Only 2% of homes in Ceredigion were built after 2012. The vast majority of the housing stock to be built for Ceredigion by 2050 has already been built. We need to renew our focus on energy efficiency measures.
I would like to mention the impact that the current crisis is having on businesses. We need to think about how we include them in our efforts to decarbonise our off-grid properties. One hospitality business in Ceredigion —it is off-grid—has informed me that its energy bills have increased by some 450%. It is, without putting too blunt a point on it, making them consider whether they can continue in business. It is otherwise a very profitable, successful business, but this hike in fuel prices for off-grid heating has caused them to consider their future. I do not think that good businesses like that should be allowed to fail because of the current crisis. As part of the debate, we need to look at interim measures that the Government may wish to consider in order to give them some short-term support. That business is very confident that if it can ride out this current storm, it can return to a very profitable, successful situation.
That group is in an interesting situation, because it does have plans to decarbonise its heating sources—for example, it plans to instal solar panels, which will drastically reduce elements of its heating and energy bills. The problem is the timescale. The group cannot quite make it through the current six-month period without having to seriously scale back their operation. So my question for the Government is: what interim, short-term measures can we put in place to help organisations such as Calon Tysul, and other community swimming pools and leisure facilities, to see out the current storm?
I fully support the need to decarbonise our housing emissions and the fuel for off-grid properties in general. The Department for Business, Energy and Industrial Strategy has estimated that some 20% of our off-gas grid homes are technically unsuitable for low-temperature heat pumps, but analysis, undertaken by firms such as Equity, found that 44% of rural homes currently using heating oil can be considered “hard to treat” when the cost of the transition is taken into account.
I am conscious that I am at risk of detaining the Chamber for too long, but I would like to ask the Minister a couple of questions and I would be grateful if he could address them in his response. We know there are various support measures for hydrogen development, for example, but there are questions about the extent to which they will be applicable to rural off-grid homes. The Minister and I had an exchange in the Welsh Affairs Committee on this point, and I am interested to know his thoughts on supporting the roll-out of local carbon gas alternatives such as BioLPG, as mentioned by the right hon. Member for Clwyd West. It is drop-in technology that could well offer us a short to mid-term solution if we are keen to decarbonise homes in rural setting.
One couple who live in an off-grid house have contacted me to say that they have been quoted over £1,000 to fill their oil tank. That is more than their monthly income as a couple, and the problem is that they have been told they cannot place orders for volumes less than 500 litres. If it were possible to have some clarification on that point, it would be very welcome, because other households in Ceredigion have also told me that they would be able to afford 250 litres at the moment, but the 500-litre minimum is a stretch for them at current prices, and they cannot quite make it. I appreciate that that is a very short-term measure and that it is addressing an immediate problem rather than something in the future, but if we are talking about a just transition, we need to make sure that everybody comes along with us and that nobody shoulders a disproportionate amount of the cost of what we should all hope will be a shared endeavour.
Full debate: Low-carbon Off-gas Grid Heating
Ahead of the spring statement tomorrow, surging energy bills and increasing costs of living are rightly making us nervous. We are at a critical juncture not only in overcoming the legacy of the covid-19 pandemic and the devastating consequences of the war in Ukraine, but in how we approach levelling up. What I advocate today through this Bill is a clear UK-wide commitment to lower energy bills and to meeting our net zero targets by improving energy efficiency in homes and businesses, delivered through a devolved shared prosperity fund.
Some will argue that the Chancellor has already helped address the energy crisis by providing a rebate to UK households. However, I would argue that this measure was insufficient at its introduction and is even less adequate now. I realise that calls on the Government to introduce a windfall tax on cash-rich oil and gas producers—we should remember that the largest producer in the North sea has just reported $1.7 billion in profit—are likely to go unheeded. Nevertheless, the Government must ensure that they do not revert to a business-as-usual approach to energy supply, or fall for the siren call of those who would have us believe that salvation can be found in greater exploitation of fossil fuel reserves. To do so would not only be to forget the calls made at COP26 in November or the latest Intergovernmental Panel on Climate Change report on climate change, but grossly to overstate the short-term benefit of shale gas extraction and to underestimate its cost.
Cardiff University recently concluded that 1,016 fracking pads would be needed to replace just half of the UK’s gas imports to 2035. This would mean the construction of one shale gas pad approximately every five days over the next 15 years across our country. What is more, additional domestic gas production is unlikely to translate into lower prices for UK consumers, as our prices reflect Europe’s gas markets, with which we are intricately interconnected. Indeed, the Green Alliance cross-party thinktank offers a sobering fact for proponents of fracking: the first four days of the current gas crunch in September saw the greatest gas export from the UK to Europe on record, as domestic producers sought the best price for their product. Finally, there is the small matter that fracking is a devolved matter, and it has been banned in Wales since 2018 following a Plaid Cymru motion. Wales also joined the Beyond Oil & Gas Alliance at COP26, but, worryingly, the UK Government refused to commit this week to respecting devolved powers over fracking.
Full debate: Shared Prosperity Fund (Wales) Bill
Another driving force of the crisis in rural areas is the rising cost of fuel at the pump. Unfortunately, Wales has the highest car dependency in the UK with nearly 80% of commutes done by private car. Nearly half our businesses are located in rural areas where, sadly, people would be lucky to have multiple bus services a day. Of course I wholeheartedly support the rapid decarbonisation of our transport system to meet our net zero commitments, but many of my communities are devoid of the public transport infrastructure that would make that a reality. Sadly, they depend on private car use for essential journeys, whether going to work or going shopping.
Full debate: Cost of Living Increases
It is important to put the figures in some context. In doing so, I would like to us to consider another large figure: £3 billion. That, at just over half the cost of the moneys lost to fraud, is the cost of increasing working-age benefits and pension credit by 6%—the likely inflation rate by April—rather than the planned 3.1%. That prompts the question of what the Treasury could afford, if it wished, to end the cost of living crisis and build towards our net zero transition, or indeed honour promises to match EU regional funding for Wales and other parts of the UK that previously received it.
We find ourselves facing a mounting national debt alongside cost of living and climate crises. I accept that the public finances are in a precarious position, but, if the Government seek to convince us that they cannot afford greater support for in-need households or greater measures to tackle the climate crisis, they must do more to recover the billions of pounds of public money lost to fraud and hold those who have benefited from unscrupulous deals to account. If they fail to do so, they will have little moral authority to increase tax on households and businesses in April.
Full debate: Tackling Fraud and Preventing Government Waste
I should like to put on record my disappointment that the Government have done very little to counter misplaced rhetoric that falsely links net zero commitments to the cost of living crisis. We have heard a great deal about oil and gas imports, and it is true that 87% of the price cap increase is due to increased gas prices, with the remainder due to supplier failure. The green transition is not the cause of rising energy bills. Inflation, reflecting the confluence of factors at play in the crisis, is running at 5.4%—the highest it has been in nearly 30 years. Worse, contrary to Government rhetoric, wages are not keeping up, which means a decline in real wages for UK households.
One great problem is inequality —there is always a fuel poverty issue in good times as well as bad times in the United Kingdom. I was Chair of the Energy and Climate Change Committee. We visited the Technical University of Denmark in Copenhagen and a Conservative member asked an academic there about fuel poverty in Denmark; the response was, “In Denmark, folk can afford stuff.” There is a structural problem in the UK in that the problems are not always acute but are always there.
To conclude—I have spoken for some time already—we must also bolster local renewable energy supply if we are serious about tackling the longer-term issues of our fuel and energy supply. In closing, I raise Plaid Cymru’s call for the devolution of the management of the Crown estate in Wales. Simply put, with many colleagues from Scotland in attendance this afternoon, if Scotland can, why not Wales? Devolving the management of the Crown estate in Wales would bolster Welsh revenues, increase our bargaining power with the private sector and support renewable energy deployment, all the while ensuring that the communities in which this energy is generated will be where its benefits are enjoyed the most.
Full debate: Cost of Living Increases
On the climate theme, I echo and share the bemusement of the right hon. Member for Doncaster North (Edward Miliband). In his opening remarks, he called into question the Chancellor’s commitment to net zero and the decarbonisation of the economy. In response, the Secretary of State referred the House to the net zero strategy that the Government announced last week as evidence of the Chancellor’s credentials. However, questions remain unanswered. The Institute for Government has suggested that the net zero strategy lacked detail on who will pay and offered only vague hints about a tax strategy to support the transition to net zero. In advance of COP26, we had hoped to see a bit more of that detail in yesterday’s Budget, but we did not receive it.
We all acknowledge that the freezing of duel duty—I might even get plaudits for this from those on the Treasury Bench—is an incredibly expensive policy. We cannot deny that and it is reasonable to suggest that, in the not-too-distant future, we may need to reconsider whether the fuel duty policy is sustainable, not least for financial reasons, but also given our decarbonisation commitments. Should we come to that politically prickly and technical discussion, we should perhaps look to extend schemes such as the rural duty relief scheme so that those living in rural areas, who, at the moment, do not have the benefit of a sophisticated public transport infrastructure, should not have to shoulder the burden of unrealistic costs. That would also perhaps introduce an incentive, for areas that have the luxury of fantastic public transport, to choose to use public transport more often than cars. In rural areas, however, as I think hon. Members would acknowledge, there is not that level of choice at the moment, and, sadly, using a car is still a necessity. Whether they are nurses working in hospitals or teachers going to school, people need to use cars. In approaching the big questions of decarbonisation, we need to think about how to ensure that there is investment in public transport in rural areas so that abandoning cars is an option, but for the time being, 80% of commutes in Wales are still by car.
Full debate: Income Tax (Charge)
“unless there are immediate, rapid and large-scale reductions in greenhouse gas emissions, limiting warming to…1.5 °C…will be beyond reach.”
Today, we live in a world with global warming of 1.1°C, yet it is a world already ravaged by forest fires and increasingly frequent extreme weather events. It is a world made poorer by rapid biodiversity loss and made more geopolitically unstable by profoundly changing climate patterns. Despite that, my generation may be living through the last days of relative climatic, environmental and ecological stability. It is this realisation that makes COP26 and its outcome so important.
Like others, I can see that the Government’s net zero strategy published this week was an important but overdue intervention. Its ambitions for renewable electricity generation are laudable, the emphasis on decarbonising household heating welcome, and the desire to reduce the greenhouse footprint of our transport sector commendable. And yet, action falls short of the rhetoric, especially when addressing the costs of the transition for households. The heat pump strategy, for example, needs to go further. Indeed, it will benefit only about 0.3% of Welsh households. Instead, greater capital resourcing should be given to the Welsh Government, who are responsible for housing as a devolved competence, so that they can implement a whole-house approach, addressing both insulation and heating supply.
That is just one example, but unfortunately, there are many more, which prompts the question: why? It seems that the answer lies in the Treasury and perhaps its hesitancy to accept the climate crisis for what it is: an existential crisis. It is short-sighted in the extreme for some to suggest that we cannot afford the transition. It is the cost of inaction that is unaffordable. The Treasury’s “Net Zero Review” details that the number of natural catastrophes has risen markedly since the 1980s and Munich Re has calculated that global disasters exacerbated by climate change caused $210 billion-worth of losses in 2020 alone. Meanwhile, the Climate Change Committee found the annual net cost over the next 30 years for the UK’s transition to net zero to be £10 billion, or 0.5% of GDP.
Does the hon. Gentleman agree that we need to find positive ways to allow our constituents to be involved in making our cities and towns greener? For example, the new 110,000-tree Hempsted woods in my constituency will give every schoolchild the chance to plant at least one tree. That will be alongside the green energy from solar, wind and hydrogen that we hope to produce there. Does he agree that this is the sort of local initiative that goes alongside the national commitments?
The cost of inaction is unaffordable. Even if we were to disagree on that point, the alternative—a world aflame, flooded and barren—outweighs any short-term Treasury reservations about the cost of the green transition. To put it simply, we can and must do more. I urge the Government to support the COP26 President in the final weeks before the summit so that we achieve global successes on emissions commitments and ensure that the Chancellor’s forthcoming Budget meets the biggest challenge of our age.
Full debate: COP26: Limiting Global Temperature Rises
It is a pleasure to serve under your chairmanship, Sir Edward. I commend the co-operative approach taken by the UK and devolved Governments in establishing the emissions trading scheme and in agreeing a common framework that treats each nation as an equal partner in our climate efforts. The scheme has brought coherence to one element of our combined efforts to achieve net zero.
“The elephant in the room is that offsets are fundamentally not about mitigating climate change, or even about removing past emissions, but about enabling future emissions, about protecting economic growth and corporate profits.”
In order to meet our climate targets, we must not only reduce overall emissions but adopt carbon-negative strategies. The most economical and natural of those is tree planting. I hope to expand on that point today and in doing so make a case for more closely linking the UK emissions trading scheme with a separate and voluntary carbon offset market. Both schemes encourage businesses to reduce overall emissions. They are currently unconnected in policy; they run parallel to each other. I accept the technical and policy challenges associated with directly incorporating carbon offsetting into the UK ETS, but I believe that an association between the two schemes, if established, would bring rigour, scrutiny and additional resources to the offsetting process.
Those costs increasingly pose an existential challenge to Welsh farmers and rural communities and are inimical to efficient land use and a just transition. To echo the National Farmers Union, we urgently need to ensure a system that makes carbon offsetting mean the right tree in the right place. The Government, by acting as a broker and data-backed co-ordinator, can help to ensure appropriate land use for carbon offsetting, support the sufficient scale of planting and empower local farmers and rural communities to make a carbon-negative effort for themselves.
Wales’s forests are a natural economic and national asset at the very heart of our decarbonisation efforts. The lungs of our nation, our forests sequester approximately 1.84 million tonnes of carbon dioxide equivalent annually, while pollution removal by woodland was estimated to have an ecosystem value of more than £385 million back in 2015. Our forests are also essential for our environment and biodiversity. Indeed, of the 542 listed species of principal importance to the Welsh Government, 210 rely wholly or partly on woodland habitats.
Will my hon. Friend acknowledge the crucial importance of restoring Wales’s peatlands, given that their climate change mitigation potential is 3,000 tonnes of carbon a year, equivalent to 5% of Wales’s transport carbon emissions? I am sure he will also take the opportunity to welcome the peat restoration projects led by parc cenedlaethol Eryri, the Snowdonia national park.
The “Woodlands for Wales” strategy suggests increasing tree planting to at least 2,000 hectares per year from 2020. The Climate Change Committee, recognising the challenge of reaching net zero, has been even more ambitious, recommending an increase to woodland cover in Wales from present levels to 24%. That would mean planting 43,000 hectares of new trees by 2030 and 180,000 hectares by 2050.
Set against that backdrop, Welsh farming finds itself at a perilous juncture, buffeted on the one hand by increased trade barriers with our largest market and uncertainty over future income support, and on the other by increasing pressure on land use. Welsh land, like all land, is of course a finite resource. If climate goals are to be met in a sustainable and fair manner, solutions cannot be imposed on rural communities. Instead, solutions can and should be implemented in conjunction with rural communities, and in a way that protects them from any damaging consequences. That is especially important when it comes to Welsh forestry and carbon sequestration. If we are to achieve the desired objective of reducing carbon emissions and promoting biodiversity, rural communities must be at the heart of implementation. Welsh farmers play a vital but often overlooked role in the climate equation, with over 109,000 hectares of woodland—just over a third of the total woodland in Wales—located on Welsh farms. To fulfil the stated tree-planting objectives, therefore, we need to understand the implications for the farming and food and drinks sectors, which rely on this agricultural land—land that is also essential to the wellbeing of the rural economy.
Although such measures may seem parochial, they are fundamental to ensuring that we actually deliver a transition that is just as well as sustainable. We must work with farmers, who manage over 80% of land in Wales, to deliver a forested future that is critical to the overall success of our decarbonisation efforts. The alternative, in which big business can buy land, plant trees without any reference to local biodiversity and the optimum use of different parcels of land, all the while continuing with their polluting, business-as-usual practices, is unacceptable. Greenwashing, as the Minister will know, is an ever-present danger, but in this instance it would devastate Wales’s rural communities, culture and economy.
I hope that the Minister will address concerns that the ETS is not moving fast enough nor fundamentally reducing emissions. I also hope that she will agree that local groups and farmers should be supported to play an important part in the carbon offset market and in so doing lead the transition to net zero. We must not allow large corporations to buy farms, put rural communities out of home and land, and weaken local food production for the sake of greenwashed business as usual. More specifically, I would welcome any thoughts that the Minister might have on integrating carbon offsetting into the wider UK ETS framework to ensure that we have effective regulation of the market, the promotion of sustainable practices and the rewarding of responsible practitioners.
Full debate: UK Emissions Trading Scheme: Wales
In Wales, we have the highest number of community energy organisations per head of population relative to the rest of these islands, but if a right to local supply was established, even more people and communities could become electricity customers of local enterprises—communities such as Cardigan and Ceredigion, which has a budding local energy club and ample local generation of renewable energy, but where local demand is not currently being catered for by local supply. A right to local supply would help connect consumers with locally generated electricity and the knock-on effect would be seen in communities across these islands.
This measure is not just about addressing the climate crisis, as important as that is. It is also about supporting more local skilled jobs, and it is about cheaper energy bills. It is very much a win-win-win. It can be done. While we welcome the Government’s support of the principle, we believe that, if we work together with the Minister and the Department, we can get the detail right and enact a local electricity Bill that enshrines the right to local supply. I hope the Minister will be open to such a meeting.
Full debate: Enabling Community Energy
Just as important as digitally connecting our rural economy is the need to decarbonise our transport system rapidly and responsibly reduce private car use. Local authorities in Wales have a vital role to play in developing and supporting local bus networks, such as Bookabus. However, such services do not come cheap. In Carmarthenshire alone, over 85% of local transport routes in rural areas are subsidised to some degree, with the average subsidy in 2019 in Carmarthenshire per passenger being £3.63. As such, it is simply not enough for the Governments on either end of the M4 to call for improved active travel or the adoption of electric vehicles if they are not also prepared to invest in the necessary infrastructure and improved public transport.
Full debate: Welsh Rural Economy
Noting the significant risk that the proposed capital allowance super deduction might turbocharge regional inequality in the UK, Plaid Cymru will also table an amendment requiring the Government to consider the impact and geographical reach of that super deduction. Given the pressing challenge of climate change, and the need to recapitalise our economy to further decarbonisation efforts, our amendment will require the Government to consider the impact of a super deduction on climate change mitigation efforts. I sincerely hope that the Government will be supportive of that amendment, particularly given the Bill’s overall lack of measures and support for the green transition—except, it is worth noting, a welcome change to the Bank of England’s mandate.
Full debate: Finance (No. 2) Bill
Of equal concern is the Budget’s underwhelming green measures, as the UK joins rather than leads the green transition. For Wales to achieve our net zero commitments, we urgently need to start by retrofitting more than 100,000 homes, to expand and electrify our rail network and to provide gigabit broadband connection throughout Wales. If the Government are serious about their levelling up agenda, they must act on their rhetoric by decentralising power from Whitehall. Given the right economic tools, Wales can deliver a truly transformational low-carbon infrastructure stimulus package itself, and pave the way for an economy that is truly fit for the future.
Full debate: Budget Resolutions and Economic Situation
We face many pressing challenges as a society: the health and economic consequences of the covid-19 pandemic have been debated today, but just as pressing are the devastating impacts of climate change. If we are to meet these challenges and, ultimately, emerge stronger, more secure and more prosperous, it is vital that we transition rapidly to a society powered by energy generated from renewable sources. The Committee on Climate Change has been clear that the UK is off track to achieve our commitment to net-zero greenhouse gas emissions and meet our obligations under the Paris climate agreement. At present, renewable electricity generation accounts for only 11% of all UK energy use, and our transport and heating networks need to be electrified to decarbonise our economy. If we were successful in doing this, new policies and regulations would be needed to ensure that the resulting rise in electricity demand was met by renewable generation.
There is good news: villages, towns and cities across the land possess incredible potential for community renewable energy projects, such as solar arrays in fields, wind turbines, and hydro units in rivers. Such schemes support local skilled jobs and offer local economic opportunities.
I am grateful to my right hon. Friend for making that point. She anticipates a few of the arguments I wish to make this evening, but she is right to emphasise the role that batteries and improving storage will play in the future. If we are to balance local generation and local demand, being able to store a lot of this renewable energy will be key. These local, community-owned renewable energy projects support local skilled jobs and offer local economic opportunities, which will be very welcome in the face of the covid-19 pandemic’s impact on so many of our communities.
The hon. Gentleman makes a very valid point. We must not think that community-owned projects are necessarily just at parish council level; towns and municipalities can also play a part. If we make any changes, we will do well to ensure that we better empower such projects, because I believe that they will be key to our moving to a decarbonised economy.
I congratulate the hon. Gentleman on securing this debate, which is of the utmost importance. Does he agree that fantastic community projects such as Sheffield Renewables should be better supported by the Government to provide local renewable energy, and that that support should be enhanced as we try to tackle the climate emergency?
I am grateful for the hon. Member’s intervention. He makes a key point: the transition to a decarbonised economy also has a lot of benefits in terms of economic development in areas such as his and mine, which have been left behind. This offers so many opportunities, and we would do well to make more of them.
I fully agree with the hon. Gentleman, because there would be a range of benefits. We would have greater public support for the transition to sustainable energy forms, we would improve equality, and we would have nature-friendly renewable energy generation. Obviously just as important is that we would have a secure energy supply less dependent on imports, let alone a more effective energy system that would perhaps see consumers’ energy bills decrease as well.
Full debate: Electricity Generation: Local Suppliers
The Bill represents a welcome step towards ensuring the security and responsible use of UK pension schemes. I particularly welcome clause 124, which addresses the vital issue of climate change: the risk it represents to our long-term socioeconomic security, and the role that pension funds can play as key levers in the decarbonisation effort of our economy. Wales has a proud record on sustainability and climate change mitigation. A commitment to sustainable development is written into our de facto constitution and we were a world leader with our Well-Being of Future Generations (Wales) Act 2015. I know the Minister is aware of the groundbreaking work undertaken at the Centre for Alternative Technology, which is located in the constituency of the hon. Member for Montgomeryshire (Craig Williams). There is also groundbreaking work undertaken on my side of the Dyfi estuary. In particular, Aberystwyth University boasts the world-leading Centre for Glaciology, while IBERS—the Institute of Biological, Environmental and Rural Sciences—and Aberinnovation campus conduct crucial work on climate change mitigation.
Achieving net zero emissions will undoubtedly be a difficult and expensive challenge, yet, as the past few months have shown, the state, with its unrivalled ability to borrow and invest, can effect unprecedented change to our society and economy quite rapidly when there is a desire or need to do so. With around £3 trillion invested in UK pension schemes, pensions represent an equally transformative source of investment, and could support our decarbonisation efforts.
I welcome the requirements in the Bill for pension schemes to assess their exposure to climate change risk. Those requirements are necessary and well overdue. The Economist Intelligence Unit’s estimate that climate change could eliminate up to 30% of the world’s total manageable assets, along with the fact that the vast majority of UK pension schemes currently do not take climate change risk into account, offer sufficient justification for the introduction of the requirements.
Closer to home, in 2019 Welsh local authority pension funds still had more than £1 billion invested in fossil fuels. That means not only that the pension holders are exposed to future climate change risk, but that the funds are—indirectly at least—undermining collective efforts to decarbonise the economy. I therefore urge the UK Government to consider how they can better work with the Welsh Government to encourage the use of pension wealth to realise decarbonisation and productivity improvements across the four nations of the United Kingdom.
The opportunities are there. In recent years, vital projects such as the Swansea Bay tidal lagoon have gone unrealised, while the UK Government have proven themselves unwilling to finance key aspects of our carbon transition in Wales, including improvements to the Welsh railways. Simply put, we have an opportunity to make pensions work better for Wales, to achieve our climate targets and to meet our international commitments.
I welcome the Bill’s increased powers for the pension regulator and the greater urgency for funds to consider climate change risk, but the Bill could go one step further. The finance sector has already taken welcome steps not only towards divestment, but in advancing the environmental, social, and corporate governance agenda. The UK Government could bolster those efforts by amending the Bill so that all default funds are required to reach net zero by 2050, at the latest. That would stimulate green investment, as well as industry development, including better reporting standards and stewardship, as mentioned by the hon. Member for Amber Valley (Nigel Mills) earlier.
Pension funds have a pivotal role to play in decarbonisation—from influencing companies’ boardrooms to invest in a green transition, to protecting pension holders from the risk of climate change. For too long, their transformative potential as investors in that regard has been underutilised, so I welcome the Bill, and particularly clause 124, and hope that the Government can consider strengthening it further so that pension schemes play an even greater part in achieving our vital climate change targets.
Full debate: Pension Schemes Bill [Lords]
Therefore, an important first step for Wales’s re-entry into the diplomatic theatre would be the formalisation of the relationship between the Welsh Government and our existing honorary consuls. Only then can we look to build on that by enticing larger diplomatic missions to establish themselves, and to co-ordinate with Wales’s existing overseas officers to put into action an international strategy for Wales that focuses, perhaps, on certain key objectives or themes. Those could include becoming global leaders in the protection of minority languages, for example, or promoting the incredible potential that we have in the realms of renewable energy technology and research and the benefits that their development would deliver for the entire world as well as for Wales.
Full debate: Diplomatic Representation in Wales
Wales is ideally placed to develop pioneering renewable energy projects, especially in wave, tidal and hydro, and that could make an invaluable contribution to achieving net-zero carbon emissions. Will the Secretary of State assure us that Wales will receive sufficient support from the industrial strategy, and in particular the £2.5 billion clean growth fund, to realise its potential, and that Wales will not be left to rue missed opportunities yet again?
Full debate: Industrial Strategy